FAST urges co-loading to cut logistics costs amid fuel pressures

THE FAST-MOVING consumer goods (FMCG) industry should consider adopting co-loading delivery models to manage transport costs amid fuel price shocks, according to FAST Logistics Group.

In a statement on Wednesday, FAST Chief Executive Officer for Logistics Manuel L. Onrejas, Jr. said companies should look into co-loading as a practical approach amid oil price increases driven by conflicts in the Middle East.

“Every direct-to-store delivery should create value, not waste,” he said.

FAST made the recommendation during a meeting with the Department of Trade and Industry and leading FMCG companies and retailers on March 17.

Co-loading is a logistics strategy that consolidates cargo from multiple shippers into a single vehicle.

“Instead of paying for a dedicated vehicle, FMCG companies pay only for the space occupied by their goods in the co-loading model,” FAST said.

FAST said inefficiencies in transport and direct-to-store deliveries, combined with rising fuel costs, could push up the prices of goods.

“Higher oil prices, driven by global conflict, should push companies to rethink traditional direct-to-store delivery systems, which often result in underutilized trucks, long queuing time, and higher fuel consumption,” it said.

According to the company, a co-loading model can increase vehicle utilization, reduce empty miles, and lower fuel consumption.

FAST also said many FMCG companies deliver goods to retail stores using Asian utility vehicles, which cost 61% more than using larger six-wheeler trucks.

Company data showed that about 56% of trucks delivering FMCG goods to retail distribution units (RDUs), or receiving bays, operate at low utilization rates of 32% to 40%.

This results in long queues at receiving bays, particularly in supermarkets, shopping centers, groceries, and other modern trade outlets.

The company cited its Flow by FAST solution, where products from multiple FMCG companies are sorted and consolidated in its regional facilities before being delivered to retail outlets based on schedule.

“Stronger retailer collaboration would also help reduce congestion at receiving areas and maximize the efficiency gains from co-loading across the supply chain,” FAST said. — Beatriz Marie D. Cruz