Cost the key driver of collaboration in supply chains
Going green takes a back seat and only legislation will force it up the agenda
The key driver increasing collaboration in the supply chain is reducing cost, rather than the environmental benefits it brings, according to new research.
In a recent survey by analyst Transport Intelligence (TI), 64% of respondents said the main driver for collaboration was cost reduction, while 25% cited efficiency and just 8.7% said having a greener operation was the main factor.
Speaking at the Shippers’ Voice seminars at this week’s Multimodal exhibition, TI CEO John Manners-Bell said companies that collaborated in order to reduce empty running did so to reduce cost, and any environmental benefit was simply a by-product.
“Taking more vehicles off the road will improve your carbon footprint, and it’s great to advertise that and say to government and consumers ‘isn’t it great that we’re doing that’.
“However, this survey shows that the key driver is cost.
“Since the start of the recession, people have been talking about green issues less and less; it has all been about cost reduction and survival.
“It [going green] is important to companies, because they want their customers to think it’s important, but actually it comes quite a way down [the list of priorities].”
Clyde Buntrock, head of business solutions at Allport, did not expect collaboration to be driven by the environmental benefits in the future.
“The benefits of getting a cost advantage over others will drive collaboration even over green issues,” he said.
However, Buntrock said green issues could become a key driver for if government legislation forced the issue.
Philip Damas, director of consultancy Drewry Supply Chain, said: “There are a lot of ‘user-pays’ taxes coming forward, and in five years’ time, you will have to pay more for each mile of trucking -- then the environment and the cost issue will be the same thing.”
The survey also revealed that 43% of respondents had been involved in a collaboration with another company in the past and that 94% would consider collaborating, although they would prefer it not to be with a competitor.
If they were to collaborate with a rival, 90% of respondents would only do so if a neutral party – such as a 3PL – managed the relationship with strict confidentiality policies in place.
In a recent survey by analyst Transport Intelligence (TI), 64% of respondents said the main driver for collaboration was cost reduction, while 25% cited efficiency and just 8.7% said having a greener operation was the main factor.
Speaking at the Shippers’ Voice seminars at this week’s Multimodal exhibition, TI CEO John Manners-Bell said companies that collaborated in order to reduce empty running did so to reduce cost, and any environmental benefit was simply a by-product.
“Taking more vehicles off the road will improve your carbon footprint, and it’s great to advertise that and say to government and consumers ‘isn’t it great that we’re doing that’.
“However, this survey shows that the key driver is cost.
“Since the start of the recession, people have been talking about green issues less and less; it has all been about cost reduction and survival.
“It [going green] is important to companies, because they want their customers to think it’s important, but actually it comes quite a way down [the list of priorities].”
Clyde Buntrock, head of business solutions at Allport, did not expect collaboration to be driven by the environmental benefits in the future.
“The benefits of getting a cost advantage over others will drive collaboration even over green issues,” he said.
However, Buntrock said green issues could become a key driver for if government legislation forced the issue.
Philip Damas, director of consultancy Drewry Supply Chain, said: “There are a lot of ‘user-pays’ taxes coming forward, and in five years’ time, you will have to pay more for each mile of trucking -- then the environment and the cost issue will be the same thing.”
The survey also revealed that 43% of respondents had been involved in a collaboration with another company in the past and that 94% would consider collaborating, although they would prefer it not to be with a competitor.
If they were to collaborate with a rival, 90% of respondents would only do so if a neutral party – such as a 3PL – managed the relationship with strict confidentiality policies in place.
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