In a recent article, Alain Borri (BP2R firm) highlighted how transport plays an essential role in modern supply chains. Returning to the image of blood circulation, he underlined the need to take in-depth consideration of the transport stages in the supply chain. And he took as an example the way Amazon invests in its transport stages and in particular final distribution. And he concluded with the idea that transport will become the essential element of an efficient supply chain.<\/p>\n
I share the idea that transport plays an essential role in modern supply chains, this is the direct effect of the globalization of supply chains that we have all seen over the last 30 years. This is proof, on a new scale, that managing a supply chain means above all managing flows rather than stocks or processing stages (although this last point is especially relevant for certain deindustrialized countries, like unfortunately France). It is also an obvious effect of the development of e-commerce which, by generalizing home delivery, has shown the importance of controlling transport operations.<\/p>\n
But transport can also be a lever for implementing the company's strategy and to be convinced of this, let's look at the case of e-commerce from this angle.<\/p>\n
It must be emphasized that transport plays a fundamental role in the \u201cwinner takes all\u201d mechanism which is at work in e-commerce and which is the basis of the strategy of certain large actors. Indeed, the fundamental lever of transport performance is massification. It is this which allows the optimized filling of means of transport, whether maritime, air or land. To obtain it, as long as there are no players on the market with sufficient volumes on their own, the pooling of flows is a necessity. It is under these conditions that logistics operators and transporters can prosper, their economic utility being precisely to be the actors of pooling. In these situations, market players are more or less all in the same boat, benefit from similar service price conditions and equally shared quality of service. Once an actor reaches sufficient size, the game changes completely. If it has sufficient volumes to consolidate its transport alone, it will obviously want to do so both to optimize its costs (recover the pooling margin that the logistics operator or the transporter could legitimately derive from its activities), and to control its service and possibly destabilize its competitors by reducing the potential for pooling by subtracting its own volumes. There is therefore a tipping point on the market from which the size of a player allows it to build its own transport system independently of its competitors, thus giving it the means to optimize its costs and to independently develop the service it intends to provide to its customers.<\/p>\n
To reach this tipping point, two strategies are possible and we will see by way of illustration how Amazon succeeds in combining them. The first strategy consists initially of relying on existing operators (for example national postal operators) to benefit from their network and in particular from their final delivery system which relies on extraordinary customer density. Amazon seeks to optimize its operations in conjunction with the Post Office by consolidating its flows itself whenever possible. For example, if the flows from one of its warehouses to a regional Post Office hub allow it, it will set up full truck flows without going through the Post Office's internal hub-to-hub messaging network. . It will do the same for final delivery where each time its market share will lead it to have a sufficient delivery density, it will put in place its own means to control its costs and its service. Let us call this approach progressive. There is another more radical one which consists, when we have the objective of putting a disruptive offer on the market (for example delivery in 2 hours in large cities), in setting up the organization before having the volumes and to count on its marketing and commercial capacity to quickly fill the pipes put in place to reduce the additional cost. This approach is obviously riskier and more expensive initially and it only makes sense as part of an overall company strategy.<\/p>\n
This example of e-commerce illustrates to what extent transport must be operated according to strategic goals and how it can play a major role in the implementation of the company's strategy.<\/p>\n
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