THE FAST-MOVING consumer goods (FMCG) industry should consider adopting co-loading delivery models to administer transport costs amid fuel price shocks, in accordance with FAST Logistics Group.
In a press release on Wednesday, FAST Chief Executive Officer for Logistics Manuel L. Onrejas, Jr. said corporations should look into co-loading as a practical approach amid oil price increases driven by conflicts within the Middle East.
“Every direct-to-store delivery should create value, not waste,” he said.
FAST made the suggestion during a gathering with the Department of Trade and Industry and leading FMCG corporations and retailers on March 17.
Co-loading is a logistics strategy that consolidates cargo from multiple shippers right into a single vehicle.
“As an alternative of paying for a dedicated vehicle, FMCG corporations pay just for the space occupied by their goods within the co-loading model,” FAST said.
FAST said inefficiencies in transport and direct-to-store deliveries, combined with rising fuel costs, could push up the costs of products.
“Higher oil prices, driven by global conflict, should push corporations to rethink traditional direct-to-store delivery systems, which frequently end in underutilized trucks, long queuing time, and better fuel consumption,” it said.
In line with the corporate, a co-loading model can increase vehicle utilization, reduce empty miles, and lower fuel consumption.
FAST also said many FMCG corporations deliver goods to retail stores using Asian utility vehicles, which cost 61% greater than using larger six-wheeler trucks.
Company data showed that about 56% of trucks delivering FMCG goods to retail distribution units (RDUs), or receiving bays, operate at low utilization rates of 32% to 40%.
This leads to long queues at receiving bays, particularly in supermarkets, shopping centers, groceries, and other modern trade outlets.
The corporate cited its Flow by FAST solution, where products from multiple FMCG corporations are sorted and consolidated in its regional facilities before being delivered to stores based on schedule.
“Stronger retailer collaboration would also help reduce congestion at receiving areas and maximize the efficiency gains from co-loading across the availability chain,” FAST said. — Beatriz Marie D. Cruz