Through the Sharing Economy, marked in people’s minds by the “Airbnb-isation” of many business models, companies and consumers often prefer to pay for temporary access to goods and services rather than take on the ownership of assets and their long-term costs. The Sharing Economy is alive and well in the world of trailers and logistics through shared warehousing, real-time freight brokerage and trailer pooling.
Shared assets, greater flexibility and profitability
The rise in e-commerce in Europe has created some wonderful opportunities for trailer fleet operators that offer flexible, freight carrying capacity and delivery to meet fluctuating demand. Enjoying the benefit of shared warehousing or trailer pooling can make a significant difference to flexibility and profitability.
“Shared warehousing” is starting to attract industry interest. For example, among the key insights and growth opportunities that Frost & Sullivan identified in its February 2018 research report on the UK’s transportation and logistics market were “Shared warehouses with vertical structures [which] will begin to emerge due to a shortage of warehouse space.”
Dedicated vs Shared Warehousing
With a dedicated warehouse, your company pays all the fixed costs of running a warehouse, regardless of whether you are using its space to full capacity or not. With a shared warehouse, the ongoing operating and maintenance costs are spread across the different companies using the warehouse and their activity levels. Many of the costs become variable. The warehouse owners will manage the storage space rental and often be able to provide fulfilment services. Using a shared warehouse enables you to enjoy a flexible warehousing and fulfilment solution, whose costs rise and fall with the fluctuations in demand for your business. [source: ODWLogistics]
Shared warehousing in action
Koninklijke Vezet, a fruit and vegetable processing company in the Netherlands has been doing shared warehousing for its largest client, major supermarket chain, Albert Heijn for over ten years. It manages its stocks in Albert Heijn’s distribution centers to which it delivers five times a day, based on shared forecasts. Anouk Wissink, director Supply Chain & New Business at Vezet believes that sharing data with her client has been the key to their successful use of shared warehousing. [source: LogistiekProfs]
Airbnb-isation of shared warehousing
Digital sharing platforms, accessed on a huge scale, are transforming the logistics industry value chain. For example, a US company called Flexe finds spare warehouse space for e-commerce merchants all over the US and is fast becoming the Airbnb of warehousing. In five years, Flexe has built a marketplace of spare storage space in 550 warehouses representing close to 2.3 million square metres without purchasing any assets. [source: Bloomberg]
The concept of “urban discreet warehousing” is also taking off in the USA. It enables people or companies, via smartphones or the web to share unused personal storage space in urban homes, offices, garages and vacant rental properties in exchange for a fee for usage, per item or membership. Two US start-ups MakeSpace and Omni are pioneers in this field. [source: DHL Sharing Economy report]
Sharing economy and freight exchange platforms
Unused trailer capacity is a major industry issue. The UK’s Freight Transport Association analyses the level of empty loads each year as part of its Logistics Report. Empty loads have constituted approximately 30% of all trailer journeys since 2011 (Source: Fleetpoint.org). These empty loads are bad for business profitability and the environment. One solution is to join some of the many online freight exchange platforms. The BrummiFreund website lists 171 European freight exchange platforms. They exist to match companies wanting to send goods to specific destinations with road freight transporters travelling in the same direction with enough spare capacity to carry those goods.
Sharing economy and trailer pooling
The ability to increase or reduce trailer fleet numbers quickly through trailer rental enables you to participate in new revenue opportunities by “pooling”. Pooling is a process whereby shipments that would normally be transported to the same place by several incomplete trailer oads with different transport companies are consolidated into full trailer loads to take to the final destination. Pooling requires collaboration among retailers, manufacturers, warehouses, distribution centres and/or your competitors. It makes the consignment as cost-effective as possible at both consignment origin and final distribution points.
Flexibility through trailer rental
Trailer rental is a powerful and flexible solution. Buying your own trailers is a significant investment, with new trailers often costing upwards of €30,000. Trailer rental gives you access to the best trailers and latest trailer technology without the high investment costs and overheads of ownership.
Customers choosing to rent trailers through TIP Trailer Services can take advantage of preferential rental terms within lease contracts to take on more trailers or reduce the number as demand fluctuates.