Municipal Co-Distribution of Goods – Business Models, Stakeholders and Driving Forces for Change

The presentation provides background information and illustrates driving forces of the development of municipal co-distribution of goods in Sweden. The business model is “somewhat unique” to Sweden, given the country’s comprehensive welfare sector through which local governments are often the main transport buyers in smaller municipalities without industries or commerce. In this respect, Sweden has been a pioneer in streamlining public administration at all levels replacing manual work procedures and paperwork with the use of computers and digital information, with an overall aim to allow for spending on social and political reform policies. The main business model used in municipal administration is purchases with free delivery whereby the transport of goods occurs directly from contracted suppliers to municipal receivers and where transport costs are included as a hidden surcharge in the product price. Contrary, municipal co-distribution of goods entails a physical and legal consolidation of all external purchases, where in its rudimentary form suppliers leave goods at a freight consolidation center (FCC) where goods are loaded for distribution in shared vehicles to receivers. Municipal co-distribution of goods has evolved from an isolated innovation developed in 1999 to an approach implemented in 39 municipalities of Sweden’s 290 by 2016, through which the business model and procurement practices has been refined with digital tools, first through e-commerce and then with vehicle routing software. Ultimately, the business model could be applied to non-municipal receivers but this would involve digitization and that municipalities regulate vehicle movements as done in public transport.https://pdxscholar.library.pdx.edu/trec_seminar/1129/thumbnail.jp