Co-distribution of Municipal Goods in Sweden – Procurement from a New Standpoint

Municipal co-distribution implies that all products from external suppliers, mainly groceries but also office supplies and other goods, will be delivered to a Freight Consolidation Centre (FCC) and co-distributed to recipients such as schools and retirement homes. A new business model is used in procurement of FCC and a transport company, named a “resource-optimized procurement process”. In short will the municipality itself use route optimization to simulate complete driving routes with distance, sequencing and time window of delivery that bidders use to submit offers? A similar situation applies for payment with what is called “reverse billing” where the transport company is reimbursed for vehicle kilometers of travel and working hours. Route optimization is central where, Vehicle Routing Problem (VRP) in theoretical research and practical applications has been documented in a multitude of variations. However, when it comes to commercial use and behavioural change in transport planning, will the type of algorithms be of less importance, or will how the algorithms have been packaged into a standardized software be what matters?. Crucial in operations will be the interaction between functionality (VRP) and the data, where experience of the user and simulations with different parameter settings will change the outcome of transport planning and hence, transport efficiency.