How logistics co-distribution can improve supply chain sustainability and decrease greenhouse gas (GHC) emissions: A case study
Client: Global food & beverage manufacturer with worldwide presence in 120 countries.
Challenges faced: Logistics inefficiencies from low utilization of trucks and warehouses led to high operations cost, which further led to drop in numeric distribution and sales volume in the European markets.
Constant volume loss increased the weight of fixed costs, which in turn impacted route-to-market (RTM) model efficiency.
Logistics inefficiency led to high operations cost, resulting in drop in numeric distribution and loss of commercial control of outlets, thereby impacting volume.
Logistics inefficiency caused high carbon emission per kg, impacting client’s annual commitment targets to net zero carbon emission by 2050.
Solution: Globalpraxis, with its global expertise in effective & sustainable RTM design, proposed a logistics co-distribution model between client and two food manufacturers, customized for European markets.
Win-win collaboration between client and potential partners, with improved logistics cost-to-serve for their portfolios.
Improved efficiency (~25-30%) and shared distribution would lead to reduction of trucks and GHG emissions per kg.
Increased distribution and commercial control of outlets for both partners, resulting in higher sales.
Pilot implementation ongoing in Spain.
Co-distribution of 16 K tons of products would save 127 K metric tons of carbon emissions annually.
Source: USDA’s Economic research service 2022; geodis.com