Towards collaborative, intermodal hub networks: A case study in the fast moving consumer goods market

Collaborative hub networks can provide an answer to the need to decrease logistics cost and maintain logistics service levels by shifting consolidated flows to modes that are better suited for handling large volumes (rail, barge, coastal shipping), so economies of scale can be obtained. This necessity has been increased by the tendency of globalization of industries, smaller shipment sizes, high frequencies, and the fragmentation of flows. Through collaboration the necessary synchronization between expensive but fast and flexible means of transport and inexpensive but slow and inflexible means can be combined in an intermodal hub network. This paper shows the rationale behind these collaborative hub networks, based on the literature on the design of many-to-many hub networks. The resulting methodology is explained through presenting the results of the design and implementation of collaborative hub network for the distribution of fast moving consumer goods using a combination of trucking and inland barges. This concept, first proposed by Vermunt, won the European Intermodal Award of the European Intermodal Association in 2003, and after extensive research was launched in The Netherlands as a commercial pilot by logistics service provider Vos Logistics and barge operator Riverhopper in January 2004.