Periodic Report Summary 2 - CO3 (Collaboration Concepts for Comodality)
Project Context and Objectives:
The EU-funded project ‘Collaboration Concepts for Co-modality’, or CO3 in short, is a project that aims to develop, professionalize and disseminate information on the business strategy of logistics collaboration in Europe. The goal of the project is to deliver a concrete contribution to increasing load factors, reducing empty movements and stimulate co-modality, through collaboration between industry partners, thereby reducing transport externalities such as greenhouse gas emissions and costs. The project coordinates studies and expert group exchanges and is building on existing methodologies to develop legal and operational frameworks for collaboration via freight flow bundling in Europe. Furthermore, the project consortium of knowledge institutes and industry partners are coming up with joint business models for logistics collaboration. The developed tools, technologies and business models are applied and validated in the market via pilot studies. Finally, the CO3 consortium promotes and facilitates matchmaking and knowledge-sharing through conferences and practical workshops to transfer knowledge and increase the market acceptance of collaboration.
Project Results:
CO3 developed and validated (demonstrated) new value chains and business strategies between major companies/ shippers allowing them to have logistic cost reductions of 10-20 %, with carbon footprint reductions of 20-30%.
An international legal framework has been elaborated for this purpose by leading lawyer offices.
The indispensable role of a neutral trustee is developed, to facilitate the collaborative process and compliance with the competition rules.
The most critical issue to make Horizontal Collaboration successful is the mental shift, depending on the company culture and the characteristics of transparency and trust amongst the partners in the collaboration. Gain sharing tools is crucial to create stability and fairness in the collaboration.
In the project period of 3 years (September 2011 – august 2014), the developed tools, technologies and business models were applied and validated in the market place via pilot studies and 6 ‘test cases’. Finally, the CO3 consortium promoted and facilitated matchmaking and knowledge sharing through over 50 conferences and practical workshops to transfer knowledge and increase the awareness and acceptance of horizontal collaboration.
The EU-funded CO³ project (Collaboration Concepts for Co-modality) set out to develop, professionalize and disseminate information on the business strategy and implementation of logistics horizontal collaboration in Europe. The goal of the project was to deliver real contributions that will enable businesses to increase vehicle load factors, reduce empty movements and stimulate co-modality, through collaboration in the Supply Chain between industry partners, thereby reducing costs and transport externalities such as congestion and greenhouse gas emissions, all without compromising the service level. These are seen as improvements that are important for improving the European logistics industry.
From over 100 interviews with industry players, we learned that Horizontal Collaboration is seen as a major next step in Supply Chain optimization to reduce costs and carbon levels. The missing link, however, was seen to be a structured approach to make collaboration happen. The CO3 team therefore developed and tested a three-step approach consisting of the following steps: 1) Identification, 2) Preparation, and 3) Operation.
For the Identification step we developed a self-assessment workbook, namely a tool to check corporate attitude, culture and supply chain characteristics, including the drivers, barriers and benefits of change. In short to ask: ‘Is the company ready for Collaboration?’
In the Preparation step a new role of the neutral Trustee was defined, being to facilitate the collaborative process and compliance with competition rules. In the Legal framework we included information on antitrust rules and how and with whom companies could collaborate. The Trustee can start the matchmaking process between different companies by analyzing logistic networks and transport data. The neutral Trustee needs an innovative set of tools, technologies and solutions to play their role and offer added value. This can either be in an “Offline Mode” (using as examples shipper freight flow database, smart visibility, Big Data/geographical analysis, automated matchmaking mechanisms, plus legal, gain sharing and audit support) or in an “Online Mode” (using as examples Collaborative Control Tower, multi-shipper planning systems in the cloud, plus real-time synchronization and optimization across multiple supply chains).
The CO3 project developed extensive legal frameworks, gain sharing models and also described in detail the roles of the neutral trustee. In addition, management games were developed as learning tools for companies interested in collaboration.
The third and final step of the CO3 approach was “Operation”. In our six real-life test cases we learned that collaboration does not usually happen spontaneously and the market will not therefore develop by itself. It needs the provision of visibility across multiple enterprise transport networks, it needs new tools and attitudes, and it also ideally needs all actors to be involved from the start. Further development and validation is needed of multi-actor and synchromodal collaborative business models to create more market uptake.
This all demonstrates that although Horizontal Collaboration may be complex and difficult to start, it can create a major step forward in both sustainability and cost efficiency at the same time.
Further information can be found at www.co3-project.eu
Potential Impact:
The CO3 project developed tools, position papers, templates and test cases to learn and implement Horizontal Collaboration in the supply chain.
The main results are:
1. Tools for gain sharing and game applications:
a. The Shapley value as a gain sharing method to ensure fairness and stability of the collaboration. It distributes costs and rewards to the participants based on the added value of each of them.
b. A neutral trustee, to manage the cooperation, make sure maximum benefit is achieved and takes away concerns on competition law.
c. The on-line game, as an interactive workshop on collaboration
d. The CO3 calculator is also on-line with two additional modules, a collaboration and co-modality example and a Shapley calculator to do gain sharing.
2. Legal framework, consisting of:
a. Collaboration agreement between shippers
b. Contract between shippers and Trustee
c. Contract between shipper and LSP
d. All these contracts under Dutch law have been reviewed and commented on national level in Italy, Belgium, France, Germany, Spain and the United Kingdom.
e. Additional reports on Competition law, international private law and international transport law. Also checked with the different European law firms.
3. Business Models: to understand the mechanisms, conflicts and barriers towards Horizontal Collaboration. Company culture is seen as the most important factor to collaborate and transparency and trust most important characteristics. The business models are translated into a self assessment workbook to enable a user to take a step by step approach to understand their company’s suitability together with the actions and processes needed to progress to a successful conclusion.
4. Test cases:
The objective was to apply, test and evaluate in real-life business environment the various concepts and tools that are available to create and manage logistics horizontal collaboration and freight flow bundling.
7 different test cases were implemented in different environments such as:
(1) Road transport, with 10% saving on transport cost and 20-30% carbon
(2) Intermodal transport with two shippers, 30% CO2 saving equal cost
(3) Fresh chilled distribution to retail, 10% cost and 20% CO2
(4) Retail inbound collaboration, still on small scale savings, need to grow
(5) Partnership for shared warehousing and value added logistics
5. Dissemination activities:
a. Speeches at 44 conferences
b. 4 CO3 conferences with 375 participants in total
c. 6 workshops
d. 6 seminars for specialists
e. Project website www.co3-project.eu
f. Contact database with 400 people
g. Newsletter each quarter, linked-in group 330 members, 2 video’s produced and articles in different newspapers.
6. Scientific and quality assurance:
a. Scientific board checked all deliverables and discussed the progress in her 8 meetings and several phone conferences.
b. High Level Industry Board, consisting of approx. 35 members to discuss the practical results and relevance of our projects in 6 meetings (each half year).
List of Websites:
www.co3-project.eu
The EU-funded project ‘Collaboration Concepts for Co-modality’, or CO3 in short, is a project that aims to develop, professionalize and disseminate information on the business strategy of logistics collaboration in Europe. The goal of the project is to deliver a concrete contribution to increasing load factors, reducing empty movements and stimulate co-modality, through collaboration between industry partners, thereby reducing transport externalities such as greenhouse gas emissions and costs. The project coordinates studies and expert group exchanges and is building on existing methodologies to develop legal and operational frameworks for collaboration via freight flow bundling in Europe. Furthermore, the project consortium of knowledge institutes and industry partners are coming up with joint business models for logistics collaboration. The developed tools, technologies and business models are applied and validated in the market via pilot studies. Finally, the CO3 consortium promotes and facilitates matchmaking and knowledge-sharing through conferences and practical workshops to transfer knowledge and increase the market acceptance of collaboration.
Project Results:
CO3 developed and validated (demonstrated) new value chains and business strategies between major companies/ shippers allowing them to have logistic cost reductions of 10-20 %, with carbon footprint reductions of 20-30%.
An international legal framework has been elaborated for this purpose by leading lawyer offices.
The indispensable role of a neutral trustee is developed, to facilitate the collaborative process and compliance with the competition rules.
The most critical issue to make Horizontal Collaboration successful is the mental shift, depending on the company culture and the characteristics of transparency and trust amongst the partners in the collaboration. Gain sharing tools is crucial to create stability and fairness in the collaboration.
In the project period of 3 years (September 2011 – august 2014), the developed tools, technologies and business models were applied and validated in the market place via pilot studies and 6 ‘test cases’. Finally, the CO3 consortium promoted and facilitated matchmaking and knowledge sharing through over 50 conferences and practical workshops to transfer knowledge and increase the awareness and acceptance of horizontal collaboration.
The EU-funded CO³ project (Collaboration Concepts for Co-modality) set out to develop, professionalize and disseminate information on the business strategy and implementation of logistics horizontal collaboration in Europe. The goal of the project was to deliver real contributions that will enable businesses to increase vehicle load factors, reduce empty movements and stimulate co-modality, through collaboration in the Supply Chain between industry partners, thereby reducing costs and transport externalities such as congestion and greenhouse gas emissions, all without compromising the service level. These are seen as improvements that are important for improving the European logistics industry.
From over 100 interviews with industry players, we learned that Horizontal Collaboration is seen as a major next step in Supply Chain optimization to reduce costs and carbon levels. The missing link, however, was seen to be a structured approach to make collaboration happen. The CO3 team therefore developed and tested a three-step approach consisting of the following steps: 1) Identification, 2) Preparation, and 3) Operation.
For the Identification step we developed a self-assessment workbook, namely a tool to check corporate attitude, culture and supply chain characteristics, including the drivers, barriers and benefits of change. In short to ask: ‘Is the company ready for Collaboration?’
In the Preparation step a new role of the neutral Trustee was defined, being to facilitate the collaborative process and compliance with competition rules. In the Legal framework we included information on antitrust rules and how and with whom companies could collaborate. The Trustee can start the matchmaking process between different companies by analyzing logistic networks and transport data. The neutral Trustee needs an innovative set of tools, technologies and solutions to play their role and offer added value. This can either be in an “Offline Mode” (using as examples shipper freight flow database, smart visibility, Big Data/geographical analysis, automated matchmaking mechanisms, plus legal, gain sharing and audit support) or in an “Online Mode” (using as examples Collaborative Control Tower, multi-shipper planning systems in the cloud, plus real-time synchronization and optimization across multiple supply chains).
The CO3 project developed extensive legal frameworks, gain sharing models and also described in detail the roles of the neutral trustee. In addition, management games were developed as learning tools for companies interested in collaboration.
The third and final step of the CO3 approach was “Operation”. In our six real-life test cases we learned that collaboration does not usually happen spontaneously and the market will not therefore develop by itself. It needs the provision of visibility across multiple enterprise transport networks, it needs new tools and attitudes, and it also ideally needs all actors to be involved from the start. Further development and validation is needed of multi-actor and synchromodal collaborative business models to create more market uptake.
This all demonstrates that although Horizontal Collaboration may be complex and difficult to start, it can create a major step forward in both sustainability and cost efficiency at the same time.
Further information can be found at www.co3-project.eu
Potential Impact:
The CO3 project developed tools, position papers, templates and test cases to learn and implement Horizontal Collaboration in the supply chain.
The main results are:
1. Tools for gain sharing and game applications:
a. The Shapley value as a gain sharing method to ensure fairness and stability of the collaboration. It distributes costs and rewards to the participants based on the added value of each of them.
b. A neutral trustee, to manage the cooperation, make sure maximum benefit is achieved and takes away concerns on competition law.
c. The on-line game, as an interactive workshop on collaboration
d. The CO3 calculator is also on-line with two additional modules, a collaboration and co-modality example and a Shapley calculator to do gain sharing.
2. Legal framework, consisting of:
a. Collaboration agreement between shippers
b. Contract between shippers and Trustee
c. Contract between shipper and LSP
d. All these contracts under Dutch law have been reviewed and commented on national level in Italy, Belgium, France, Germany, Spain and the United Kingdom.
e. Additional reports on Competition law, international private law and international transport law. Also checked with the different European law firms.
3. Business Models: to understand the mechanisms, conflicts and barriers towards Horizontal Collaboration. Company culture is seen as the most important factor to collaborate and transparency and trust most important characteristics. The business models are translated into a self assessment workbook to enable a user to take a step by step approach to understand their company’s suitability together with the actions and processes needed to progress to a successful conclusion.
4. Test cases:
The objective was to apply, test and evaluate in real-life business environment the various concepts and tools that are available to create and manage logistics horizontal collaboration and freight flow bundling.
7 different test cases were implemented in different environments such as:
(1) Road transport, with 10% saving on transport cost and 20-30% carbon
(2) Intermodal transport with two shippers, 30% CO2 saving equal cost
(3) Fresh chilled distribution to retail, 10% cost and 20% CO2
(4) Retail inbound collaboration, still on small scale savings, need to grow
(5) Partnership for shared warehousing and value added logistics
5. Dissemination activities:
a. Speeches at 44 conferences
b. 4 CO3 conferences with 375 participants in total
c. 6 workshops
d. 6 seminars for specialists
e. Project website www.co3-project.eu
f. Contact database with 400 people
g. Newsletter each quarter, linked-in group 330 members, 2 video’s produced and articles in different newspapers.
6. Scientific and quality assurance:
a. Scientific board checked all deliverables and discussed the progress in her 8 meetings and several phone conferences.
b. High Level Industry Board, consisting of approx. 35 members to discuss the practical results and relevance of our projects in 6 meetings (each half year).
List of Websites:
www.co3-project.eu