European FMCG Retailers Ports Activity: Retailers
While articulated vehicles are predominantly used to carry palletized goods, the type of palletization used by European retailers to move their FMCGs is palletized boxed goods, which are of different trailer types. The general process of how a retailer moves its FMCGs to European ports is generally through trusted third parties who make use of a pooling system. Lidl is a typical example of a European FMCG company making use of this general process with the added advantage of digitization.
- Palletization improves "warehouse operational efficiency by allowing easy movement of stacked goods using machines or tools, such as forklifts and pallet jacks."
- A pallet is "a portable, rigid platform that is flat and can carry the load." Several types of pallets that can be used either to "pile up, store, assemble, or transport goods."
Type of Palletization and Other Logistic Methods
- The LOGISTER project, which was funded by the European Union's Horizon 2020 research and innovation program, proposed that "the LOGISTAR system should focus on ambient palletized goods."
- For the movement of FMCGs, European retailers predominantly make use of articulated vehicles to carry palletized goods.
- The commonly-used type of palletization in the FMCG sector is palletized boxed goods, which are of different trailer types.
- There are the box trailers with "either barn door or roller shutter opening at the rear, and there may be a tail lift." Another trailer type is the curtain-sided ones that can be loaded from the sides, and they are usually called tautliners.
- Some FMCG companies interviewed in the LOGISTER project are "in a trial of a longer semi-trailer taking place in the UK." This type of trailer, "which is up to 2m longer than the traditional trailer, allows for 13% more pallets to be loaded, though the legal weight limits are still applied." FCMG companies, such as Nestle and Pladis, make use of this type of trailer and others to load double-height pallets.
- Other specifics as to how goods are palletized during the logistics process include the use of the double-deck, which is "a tall trailer with smaller wheels that permits up to twice as many pallets on two levels within the trailer."
- European retailers also move their FMCGs by making use of reefer trailers, which have "chill facilities and can maintain products at various refrigerated temperatures."
- Some European retailers operate a double-stacked pallet system in transporting. In such instance, "a stackability system ensures only the most appropriate pallets of goods are placed on top of other pallets so that damage does not occur."
- Many European retailers do not move FMCGs by rail due to the facts that the height of pallets are not compatible with the rail system and "service levels can’t be met or too expensive." In the UK, however, the FMCG sector makes use of rail because of the short distances, and it is "a less cost-effective option than the road."
FMCGs to European Ports
- For the movement of FMCG to European ports, "delivery date and specific delivery time are usually requested."
- Some European retailers make use of trusted third parties, like Kuehne + Nagel and GS1 Germany, to move its FMCGs to European ports. Due to the global presence of these third parties and their partnership with pooling partners, "a comprehensive range of storage and handling facilities are at their disposal, ranging from highly automated warehouses with cold chambers working at -25C to multiple outbound pallet configurations management for the varying specifications of different retailers."
- Using Europe's largest food retailer, Lidl, as an example, the general process of moving FMCGs to European ports have been digitized for "more sustainable and efficient pallet pool contracting and management system."
- Lidl has partnered with PAKi Logistics for the latter's e-Voucher, which allows for "less waiting time and more flexibility at the dock." Since November 2018, "Lidl offers its suppliers and carriers, in all European distribution centers, the option of digitally managing the pallet transport and rental service through a digital bonus system." The innovative efficiency of this system to the retailer's logistics platforms facilitates the processes at the dock, which allows for more sustainable pallet management.
- With the PAKi e-Voucher, Lidl operates "an automated 1:1 exchange service to reduce waiting times at its distribution centers, ensuring greater sustainability in the supply chain by lowering inefficient transport."
- The process involves the retailer issuing "the digital voucher together with a unique code through the PAKi e-Voucher database." The moment the operation is registered and validated by the service provider, "the corresponding amount of pallets will be billed to the beneficiary's online account."
- Because a unique code is generated, this process is faster and safer for Lidl to move its goods to the ports. The retailer also gets to skip the use of paper orders.
- The PAKi e-Voucher has a validity period of 12 months from its activation date; and "once accredited in a PAKi account, the account holder can benefit from the range of PAKi Logistics pooling services across Europe." The e-Voucher "can also be transferred to third parties."
- Lidl has over 10,000 stores and "over 150 product distribution centers in 29 countries, with PAKi Logistics responsible for the physical collection of the pallets from Lidl's central warehouses in Europe."
- According to Christian Agasse, CEO of PAKi Logistics, "thanks to digital solutions and our network across Europe, shippers and carriers can benefit from more agile, safer, and more sustainable pallet management." Irrespective of the size of the load, "carriers and suppliers can retrieve and deliver PAKi pallets throughout Europe."
We started our findings by identifying the type of palletization used by European retailers to move their FMCGs. We discovered that the norm in the industry is palletized boxed goods, which are of different trailer types. We, therefore, provided details on how goods are palletized during the logistics process using the different trailer types. We also indicated how two companies, Nestle and Pladis, are leading in the use of these different trailer types.
We found out that the general process of how a retailer moves its FMCGs to European ports is generally through trusted third parties who make use of a pooling system. Using a European FMCG company, Lidl, as an example, we discovered the retail company went a step further by adopting digitization through its partnership with PAKi Logistics. The latter company is "responsible for the physical collection of the pallets from Lidl's central warehouses in Europe," and moving them to the ports, which allows for "less waiting time and more flexibility at the dock."