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Abstract:

Vertical supply chain collaboration has been around for decades. In a vertical collaboration, companies within one and the same supply chain collaborate, for instance to improve their forecast accuracy or inventory management. Horizontal collaboration is a more recent phenomenon where companies at the same level of the supply chain (i.e., between suppliers or between buyers) establish partnerships. An example of such a type of collaboration in transportation and logistics is collaborative shipping, where multiple shippers bundle volumes to fill the same transport. This more holistic view across individual supply chains brings many advantages for the logistics industry such as higher vehicle fill rates, reduced transportation costs and less transport emissions as more scale is available to enable a modal shift towards greener transport modes. Without counteractions, total annual transportation emissions are expected to increase by 70 percent by 2050 compared to 2010, whereas they need to be reduced by 40 percent to 70 percent during that timeframe to keep the increase in average global temperature well below 2°C by 2100 (IPCC, 2014). With today’s average vehicle fill rates of less than 50 percent, the current state-of-the-art freight system is environmentally not sustainable. While the integration of electronic datainterchange (EDI) technology into enterprise systems has enabled vertical collaboration (such as outsourcing logistics or vendor-managed inventories) between supply chain partners for a long time, horizontal collaboration is yet to break through.