Baxter International Inc. is one of the early movers in adopting the concept of horizontal collaboration in transportation. The company took part in its first European transportation collaboration in 2011. It teamed up with the Belgium-based pharmaceutical manufacturing company UCB to share shipping to six Eastern European countries: Bulgaria, the Czech Republic, Hungary, Slovakia, Slovenia, and Romania. Baxter and UCB were brought together in 2010 by Tri-Vizor NV, a neutral third party that orchestrates shipper collaborations. The Belgian service provider's database showed that the two companies had significant overlap between their freight flows out of Belgium and could benefit from shared transportation. Eastern Europe presented a good test case due to the close proximity of destination points of UCB and Baxter and because of the large distance of these final locations from the distribution center in Belgium.
Baxter and UCB now use a motor carrier to make full truckload shipments to all of the Eastern European destinations except for Romania, where co-loaded containers move via railroad. For the over-the-road shipments, the truck stops first at a UCB plant in Belgium and then proceeds to Baxter's facility in nearby Lessines. The truck goes to UCB first due to the first-in, last-out loading sequence for pallets: At each destination in Eastern Europe, the truck delivers to Baxter's customer first and then to UCB's consignee. That synchronization also extends to how much product each company ships. Normally, UCB places three pallets on the truck. If the Belgian pharmaceutical maker wants more than three pallets, Baxter will ship fewer of its own pallets on that truck. In 2012, Tri-Vizor suggested that Baxter should collaborate with another shipper, Donaldson Company Inc., a maker of filtration systems. Now Baxter and Donaldson co-load shipments from Belgium to Ireland. A truck picks up raw materials from Baxter's and Donaldson's facilities in Belgium and then takes a short-sea ferry from the port of Zeebrugge, Belgium, to Dublin, Ireland. From there the truck travels to Castlebar, Ireland, where a Donaldson manufacturing center is located near a Baxter plant.
Horizontal collaboration is facilitated by the ‘neutral trustee’ role played by the 3PL, Tri-Vizor. As an impartial third party, Tri-Vizor can make sure that all costs and savings from the collaboration are distributed equitably. It also can synchronize the two shippers' daily operations so that one is not favored over the other. Tri-Vizor coordinates the shipments through its Web portal. Baxter and its shipping partners place shipment orders through the Tri-Vizor portal, which automatically synchronizes the shipments and assigns them to a carrier on a pre-approved list. The portal also handles all aspects of the collaborative arrangement, including invoicing. As part of that process, Tri-Vizor tracks such key performance indicators as number of loads consolidated, pickup and delivery performance, and claims, as well as monetary and greenhouse gas savings. There are limits on what any party can see through the portal, as Tri-Vizor makes sure to guard companies' confidential data.
Baxter has realized freight cost savings of around 10 percent on the collaborative trade lanes. In addition, the company has witnessed a 30-percent reduction in its transportation-related carbon dioxide (CO2) footprint as a result of the consolidated truck shipments and the use of short-sea shipping and rail.
Baxter has now begun working with the European consortium Collaboration Concepts for Co-modality, informally known as CO3. Tri-Vizor is a key member of that consortium, which was launched with a grant of 2 million euros from the European Commission. The organization's goal is to promote shared supply chains as a way for Europe to reduce its dependence on foreign oil, ease traffic congestion, and cut greenhouse gases. Comprising 17 members, CO3 is developing a legal framework that allows companies to work together without violating antitrust law. It's also conducting pilots to demonstrate the value of shared supply chains from both a monetary and a sustainability standpoint.
At the moment, Baxter is engaged with two other test projects under the auspices of CO3. One of those involves the consumer goods company Kimberly-Clark, which got under way in March 2013. Kimberly-Clark and Baxter now send full truckloads back and forth between France and Belgium. The project is being managed by Tri-Vizor and another CO3 consortium member, Giventis, a Dutch information services company. Giventis developed a platform that automatically detects co-loading and round-trip opportunities between multiple logistics networks. In another project, Baxter is working with three other companies— Belgian retailer Colruty, the building-products company Eternit, and Ontex, a manufacturer of hygienic personal care products—to run full truckloads between Belgium and Spain. That project is making use whenever possible of short-sea shipping between those two countries.
Source: Cooke, J. A. Collaboration without borders. Supply Chain Quarterly, Quarter 3, 2013.