“Collaboration“ is defined by Webster's Dictionary as “to cooperate or willingly assist an enemy of one's country“. Fortunately, there's also a second meaning: more generally, it is another term for “cooperation“. When logistics companies become climate neutral and competitors develop common IT platforms, this is a genuine paradigm shift in business. Multiple challenges require joint action – but how far can collaborations go? A look at what's happening in practice reveals the possibilities already available today.
We live in a time when nothing is the way it used to be, even just a few years ago. The Covid pandemic and its consequences such as component shortages or disruptions in international and national supply chains impact on the entire global economy. As the saying goes, we're all in the same boat. But even in the past, we all faced competition from China (for example the New Silk Road), megatrends such as digitalization and the climate crisis. These issues will continue to affect us. This triggered an initial, cautious change of thinking: Is competition really the single most efficient method we know to create value?
Is competition necessary for success?
Looked at from the perspective of the market economy, the current answer is still a clear “Yes“. But here I want to widen the picture and show you with a few examples how cooperation can generate new opportunities. Because I believe the best way to tackle the most important challenges, namely digitalization and climate protection, is not necessarily alone. Key here is the joint development of solutions, also by competitors.
Our C3 Bremen illustrates what great results cooperation between experts can achieve. It's our new lighthouse project for which we laid the foundation stone last week. The three Cs stand for Customer, Climate and Comfort. A close cooperation between a property developer and an investor will create a groundbreaking logistics center that sets new standards in sustainability and employee comfort. What's more, it will feature Germany's largest continuous photovoltaic system on the roof of a logistics building.
We are also seeing exciting approaches at our customers. For example, last year Volkswagen and Ford agreed an extensive alliance for up to eight million vehicles. Never before has there been a cooperation of this size in the automotive industry. Cooperation between automotive manufacturers also extends to the megatrends in the industry: electric cars and autonomous driving. When there is a change of such magnitude in an industry, combining strengths is a promising approach.
Now I'd like to take a look at an area that has been pretty turbulent in recent years: container shipping. Up to 2008, there was a string of so-called shipping conferences as well as vessel-sharing agreements and slot-charter agreements. Starting in 2015, three large alliances followed – 2 M, Ocean Alliance and The Alliance. Their goals were:
- To increase geographic range, build a global network of line services and create “one-stop-shopping“ for customers
- The ability to globally plan and coordinate vessel deployment for more efficiency than individual planning
- To distribute the risks and investments among all members
- Better exploitation of scaling effects and higher vessel capacity utilization
- Combined market strength when purchasing handling services, hinterland transport, feeder services etc.
Success has proved the value of this kind of constellation, showing that collaboration makes sense!
And more than 20 years ago, EUROGATE, in which BLG LOGISTICS holds a 50 percent share, took a bold step that stirred up interest around the world. The North Sea Terminal Bremerhaven, or NTB, has been in operation since 1998. It is a joint venture of EUROGATE and MAERSK Line. As a “dedicated terminal“, the NTB handles the large container ships of the world's largest shipping company on the northern area of the Bremerhaven container terminal.
In early 2004, EUROGATE founded a further joint venture with the world's second-largest container shipping company, the Mediterranean Shipping Company, or MSC. The MSC-Gate is also a dedicated terminal which handles various line services of the shipping company.
This successful model of forming collaborations remains a current strategy for EUROGATE. In a similar way, Hapag-Lloyd will take on a 30% share of the Container Terminal Wilhelmshaven (CTW). As the terminal operator, EUROGATE holds the remaining shares. With Hapag-Lloyd and MAERSK Line as customers, the deep-water port will continue to develop positively.
Talks are also continuing on a cooperation between EUROGATE and HHLA.
Cooperation with logistics startups
From tradition-rich companies to new rising stars. BLG also supports startups. Young companies need a docking point where they can realistically try out application scenarios. When young bloods get together with old hands it's always an exciting way to boost potentials.
For example, we are working together with Just Add AI. This startup supports us with our AI activities. They include intelligent document management plus AI-based reading of delivery notes and invoices as well as other papers.
Another example is Appanion Labs GmbH. The Hamburg company develops data-supported products for the transport and logistics industry with a focus on optimizing sustainability in the transport chain. With this company, we aim to collect data on the emissions generated by our road transport operations.
There's another exciting development in the area of customers and suppliers. The buzzword here is development partnerships. BLG is testing autonomous industrial trucks together with Jungheinrich. The aim is to enable both companies to learn from each other what successful internal logistics processes might look like in the future. There are numerous challenges. For example, a lack of GPS in logistics halls or an infrastructure that provides few guide points for autonomous trucks. Another important issue for discussion are logistics processes that were originally designed for semi-automated processes. Both partners learn, and both partners benefit from this cooperation. It's a classic win-win situation.
The mobility of the future
While we're looking at the major engines behind change, we also need to consider the future of mobility. In the field of electric mobility, some 40 institutions and companies have already formed a network at the research campus of the Federal Ministry for Education and Research. In a laboratory in Berlin, they are examining how to achieve a successful energy transition, e.g. through the electrification of truck shuttle services and feasibility studies on continuous operation. BLG LOGISTICS is also on board so that we can drive progress on sustainability with partners. Saving our climate, and our very survival, demands cooperation between all stakeholders. Two years ago, BLG resolved to reach climate neutrality by 2030 and became the first logistics service provider in Germany to gain scientific certification of its goals. Yet everybody needs to make determined efforts to save emissions.
To ensure we all work toward the same goals when it comes to sustainability, the BVL (German Logistics Association) is also active in this area. A few months ago, the BVL established a “Sustainable Design“ forum. It's a platform for the exchange of experience and information. Members from industry, retailing, logistics and science come together to discuss urgent issues relating to sustainability. Together, they are developing a better understanding of what challenges the various players are tackling. More than that, the participants aim to develop solutions.
Another example of a way for players to inspire each other is the Open Logistics Forum. The key word here is “communities“. Joint open-source projects cut development costs and boost Germany's competitiveness as a business location in the long term. BLG will also participate here and become a founding member of the Open Logistics Association.
Trust and added value
This brings me to the two core points when it comes to cooperation or collaboration between competitors: The first one is trust. In the area of digitalization, there are many large and small challenges which individual companies can solve with a great deal of effort by themselves. But often it's more effective to join forces to tackle the issues, also with competitors. In many areas, we already successfully use open-source solutions that we have adapted to our own needs. I can only encourage everybody to be open to this option.
The second point is added value. All partners must benefit. And it's important, especially when it comes to climate protection, to think in the long term. We're a long way from an economy for the common good, but intelligent cooperation will win through.