Group developing legal framework for shared supply chains in Europe

A business consortium in Europe is developing a legal framework that will allow companies on the continent to collaborate on transportation and warehousing services without violating European antitrust laws.

The group, known as Collaboration Concepts for Co-Modality (CO³) expects to complete its work sometime next year, according to Sven Verstrepen, business development director for TriVizor, a Belgian company which orchestrates supply chain collaborations. The project was seeded with a $2 million grant from the European Commission (EC), the European Union's (EU) antitrust arm, because the EC felt shared transportation and warehousing services could help reduce Europe's dependence on foreign oil, ease traffic congestion, and cut greenhouse gas emissions, according to Verstrepen.

The legal framework will, among other things, describe how companies could establish a "neutral trustee" to organize and manage the shared network so competing shippers could work together without running afoul of the law, Verstrepen said. "Legally, you need to put up a firewall between competitors," he told the Council of Supply Chain Management Professionals (CSCMP) Europe Conference 2013 in Amsterdam earlier this month.

In addition to the legal framework, the consortium is sponsoring pilot tests for "co-loading," where shippers use the same carrier to deliver their goods to shared customers. Verstrepen said the tests would help the consortium demonstrate ways shippers can distribute costs and share the benefits from logistics collaboration.

CO³ was formed in 2010 to lay the foundation for the sharing of transportation and distribution services. An industry board meets twice a year to ensure that the organization balances the needs and expectations of shippers and intermediaries, Verstrepen said.

Verstrepen said the participants in pilot programs are well-known multinational companies that don't want to be identified until the pilots have proved successful.

At one time, the EC would approve collaborative agreements before they were launched, said Verstrepen. Today, however, companies can move forward on partnerships without government approval, and the EC will intervene only when it believes legal boundaries have been violated, he added.

"The fact that the EC is sponsoring CO³, and that the legal framework is a pivotal building block [of] it, can be considered an informal encouragement of Europe for what we do," Verstrepen said in an e-mail.

The concept of collaborative transportation, warehousing, and distribution has been around for years. However, businesses in the U.S. have been slow to participate due in part to antitrust concerns and in part because they have been reluctant to share their processes with rivals.