In 2006 the Food Industry Sustainability Strategy (FISS) issued a challenge to the food and grocery industry: to cut the social and environmental costs of domestic food transportation, by 20% by 2012. Two years on, is the industry on track to achieve?

The Food Transportation Champions’ Group reported in May 2007 that they believed the 20% reduction in external costs was possible. They also concluded that while significant best practice existed within the industry, uptake of this was patchy and there was considerable scope for improvement in its implementation.

Research conducted by IGD earlier this year, set out to examine what the implementation of the ‘Big 6’ best practice initiatives look like one year on from the publication of this report.

Level of implementation across the 'Big 6'

Source: IGD Research - 2008

In developing their recommendations, the Group set out to ‘work with the grain’ - this approach meant that they promoted initiatives which were more likely to gain acceptance whilst being realistic about the difficulty, and cost, of implementation. It is therefore encouraging that we see the levels of implementation shown above.
 

Leading brands work together

In response to FISS’s recommendations on Transport Collaboration and Network Redesign, ECR UK, the IGD-managed body aimed at increasing efficiency through collaboration, developed a Sustainable Distribution initiative involving many of the UK’s leading household brands partnering on initiatives which will result in the industry saving 48 million miles by the end of 2008.

Nestlé and United Biscuits

Following an ECR workshop aimed at identifying opportunities for companies to collaborate, Nestlé and United Biscuits were able to work together to create roundtrips between the North of England and the Midlands which are more efficient and avoid empty vehicle movements.

The two companies demonstrated that through collaboration it is even possible for competitors to generate a significant environmental and cost saving.

Tesco and Unilever

Unilever has worked with a variety of its customers to explore the potential for transport collaboration. One example is the sharing of transport between the Unilever Doncaster Distribution Centre and Tesco Goole Distribution Centre.

Health & Beauty brands such as Dove, Lynx and Sure which were previously delivered by Unilever are now collected by Tesco vehicles passing through Doncaster for onward delivery into Goole.

Sainsbury's and Pepsico

Previously Pepsico delivered Walkers crisps and snacks to the Sainsbury’s distribution centre in East Kilbride (Scotland) from their site at Peterlee. Now, Sainsbury’s collect this volume on the back of a store delivery, using their own vehicles.

Asda and Chep

It is not just finished goods which can benefit from this approach, ASDA already works extensively with its suppliers on transport collaboration but a unique opportunity emerged with the leading provider of pallets in the UK.

CHEP would send vehicles to ASDA’s distribution sites to pick up empty pallets for redistribution amongst other customers. This invariably meant there were certain legs of the journey where the vehicle would be empty, through matching this need with the capacity at ASDA it was possible to identify the routes where transport collaboration could be applied.
 

Saving miles and cutting costs

In what is a highly competitive industry getting companies working together in this way is very innovative and the results so far are impressive with over 16 million miles saved in the pilot alone and the target being to save a further 32 million by the end of 2008.

IGD President and Nestlé UK Chief Executive Alastair Sykes says: “The Sustainable Distribution initiative demonstrates the determination of the industry to minimise environmental impact, meet consumer and Government expectations and at the same time reduce costs. And it’s not just about large companies working together as we want to encourage companies of all sizes to get involved. There will always be a need to transport food and grocery items from producers to shoppers, and the more efficiently we can do this, the better for everyone”.

More information:

Sustainable Distribution in 2008 IGD’s new Sustainable Distribution 2008 research provides practical insights into the range of measures which can be used to cut CO2 within companies’ logistics systems, specific tools to measure the impact of distribution and best practice examples of implementation

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Karen Chalmers is Senior Analyst in the Supply Chain Initiatives team and is responsible for managing ECR Workgroups on Sustainable Distribution and developing the knowledge base on sustainable supply chains for IGD’s research. She is author of IGD's Sustainable Distribution in 2008 report and also contributes to training and collaborative based programmes involving participants from across the food industry.