Coopetition for innovative freight transport solutions in Swedish retail

Sammanfattning: Many companies today strive to reduce their environmental impact. A potential strategy to reduce CO2 emissions is horizontal cooperation between actors on the same level of different supply chains. The strategy opens for cooperation, in for example such non-core activities as distribution and transportation, between companies with a competitive relationship. Larger transport networks increase the possibility to combine optimal routes and consolidate goods. There is also an opportunity for joint facilities which further decrease costs and possibly reduce the total driven kilometres due to more direct routes. This master thesis will analyse participating companies’ transport networks and identify collaboration synergies. This to be able to investigate the effects on costs and the environmental impact that horizontal cooperation has. In order to quantify these effects, a constructed case has been built up consisting of two case companies. The case companies are the two largest grocery retailing companies in Sweden - ICA and Coop, with a total market share of around 70%. The purpose of this master thesis has been to test how a dyadic horizontal distribution cooperation effects the CO2 emissions and costs for large grocery retailers in Sweden. The transportation networks for each company have been built in the Supply Chain Guru software. The networks have then been combined with joint distribution terminals to investigate how shared distribution facilities influence the total cost and CO2 emissions. Given the underlying assumptions in the models, the results show a potential to reduce distribution costs by 6.2% and reduce CO2 emissions by 1%. These results show a great potential for horizontal cooperation and the potential could increase even more when adding more aspects such as joint distribution planning and supplier collections. The analysis requires a state-of-the-art supply chain design software and a software analysis has been carried out. The software is needed to be able to build up large network models and see how changes in the supply chain design affects the environmental impact and the costs. Out of 13 software, six software was possible candidates and out of those two where thoroughly tested. The software analysis showed that out of these two, LLamasoft Supply Chain Guru was the most suitable software and has been used in the analysis. Horizontal cooperation opens new innovative ways for companies to act and cut logistics costs and reduce the environmental impact. This master thesis’ purpose was to test how a dyadic horizontal cooperation affect CO2 emissions and logistics cost and shows that horizontal cooperation has a large potential for the two largest companies in the Swedish retail industry. This should invite to more research in the area, including more companies and other industries to truly investigate the vast possibilities of horizontal cooperation.