Collaboration in the freight industry has the potential to deliver
significant socio-economic and environmental benefits and is key to the
development of a Physical Internet. However, until now convincing
logistics companies of the business case for collaboration has
represented a significant barrier to generating those benefits. The
Freight Share Lab (FSL) project, which is funded by Innovate UK, offers a
solution. It demonstrates that there is a potential ‘win-win’ for
logistics service providers and their customers, where “coopetition” can
be delivered through a collaboration platform that yields significant
commercial benefits for all participants. The platform developed by FSL
project partners, Heriot-Watt University and Trakm8 PLC, uses a
multi-fleet logistics optimisation and decision support algorithm, in
the management of freight logistics assets which, when combined, deliver
a lower priced service and reduced carbon footprint than would have
been achievable by the original contract holder. The business model
developed by Connected Places Catapult Ltd (CPC) ensures that both the
original contract holder and those deployed by the FSL platform to
fulfill the contract, retain their profit margins and share the
differential between the operating costs of the former and the price
charged by the latter, using game theory approach. The initial results
obtained from model simulations using realistic data indicate there are
significant financial benefits for FSL platform members using this
‘gain-sharing’ model.