Partner Attributes

The first question that was asked which related to the partners a company was involved in horizontal collaboration with, was simply the number of partners the respondent’s company had. This is shown in Figure 4.9.

Figure 4.9: Number of partners

Figure 4.9 shows that 90% of the respondent companies are involved in horizontal collaboration with more than one other company. Over one third of the respondents indicated that they had 6 or more partners. For this reason, an open ended version of this question was asked in the follow-up questionnaire and further analysis by number of partners will be shown in Chapter 5 with the results from the follow-up questionnaire.

Respondents were also asked to indicate the relative location of their partners; the results from this question are shown in Table 4.19.

1 10% 2-3 37% 4-5 15% 6+ 38%

145

Partners located Percentage of respondents

Locally 27.0

In the same region 28.7

In the same country 47.1

In Europe 25.9

Anywhere else in the world 29.9

Table 4.19: Location of partners

Table 4.19 indicates a difference between the results of this study and literature concerned with manufacturers’ and retailers’ collaboration in terms of their logistics facilities/services. In the case of manufacturers and retailers collaboration in terms of the logistics function, they tend to collaborate with companies who have or who need services in a similar area to them. However, in the case of logistics companies collaborating this seems to be a more unpopular location for partners, with 44% of the respondents indicating they were not collaborating with any partners who were located locally or within the same region.

This suggests that logistics companies are collaborating to increase the range of the services they offer geographically or are involved in back hauling rather than the consolidation of freight to fill a vehichle or increasing the efficiency of non-core processes.

Whilst collaborating with companies that are geographically close does not appear to be particularly popular, collaborating with companies in the same country is more popular than collaborating with companies in different countries. This is illustrated by Figure 4.10.

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Figure 4.10: Collaborating in the same country vs. collaborating in foreign countries

Figure 4.10 shows that 73% of companies were collaborating with at least one partner in the same country whereas only 43% were collaborating with a company in a foreign country. This is still a significant percentage and suggests that horizontal collaboration is a common practice in the logistics industry worldwide.

Table 4.20 illustrates how the location of partners is influenced by the type of collaboration being undertaken.

In the same country 57% In foreign countries

20% Both in the same

and foreign countries

147 Locally In the same

region

In the same country

In Europe The rest of the world Consolidation of complementary freight 18.3% 32.3% 50.5% 31.2% 29.0% Consolidation of non- complementary freight 15.0% 35.0% 47.5% 30.0% 32.5% Shared services 29.4% 31.4% 51.0% 27.5% 31.4% Joint procurement 21.7% 13.0% 47.8% 26.1% 39.1% Joint ventures 22.2% 22.2% 55.6% 33.3% 55.6%

Table 4.20: Location of partners by type of collaboration

Table 4.20 shows that joint ventures are the most likely form of collaboration to be undertaken with foreign partners. This is not a surprising fact as much of the literature that was reviewed on joint ventures concentrated on collaboration with a foreign partner. Consolidation of complementary freight is the least likely to be undertaken with partners outside of Europe and is generally undertaken with partners in the same country.

Consolidation of complementary freight and consolidation of non-complementary freight are the least likely to be undertaken with local partners. This suggests that companies are using freight consolidation to increase their geographic range by working with partners who have services in different geographical areas.

Shared services is more likely to be undertaken with domestic partners, sharing back office processes or services will require a high level of synergy and cultural fit between the partner companies which may make this type of collaboration easier to implement with companies in the same country who will share some of the same cultural factors.

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Table 4.21 analyses whether size of the company has any impact on the likely location of the partners they are collaborating with.

Locally In the same region

In the same country

In Europe The rest of the world Under 5 million 35.7% 27.4% 41.7% 27.4% 27.4% 5 million – 10 million 32.1% 39.3% 57.1% 28.6% 28.6% 11 million – 50 million 12.8% 33.3% 46.2% 17.9% 17.9% 51 million – 250 million 16.7% 8.3% 66.7% 41.7% 41.7% 251 million – 1 billion 0% 33.3% 33.3% 33.3% 100% Above 1 billion 11.1% 22.2% 55.6% 44.4% 66.7%

Table 4.21: Partner location by size of company

Table 4.21 shows that larger companies are more likely to collaborate with partners outside of the country that they are located in. This could conceivably be because they have multiple branches so the partner companies could be in other countries that the company has branches in or it could be because large companies are more likely to be able to spend more time and money on finding potential partners. It is unlikely that a horizontal collaboration agreement will be set up without some face-to-face meetings.

Collaborating with local or regional companies is more popular among small companies; this could be due to small companies having more to gain from collaborating with other local companies in terms of back of services like the small retailer’s marketing programme discussed in section 2.7.3 of the literature review.

Table 4.22 analyses whether type of company has any impact on the location of the partners respondents indicated that they were collaborating with.

149 Locally In the same region In the same country

In Europe The rest of the world 3PL 34.7% 29.2% 56.9% 23.6% 20.8% 4PL 10.0% 20.0% 70.0% 30.0% 40.0% Shipper 26.7% 40.0% 40.0% 20.0% 46.7% Freight forwarder 25.0% 25.0% 41.3% 26.3% 42.5% Warehouse/ distribution centre 30.3% 36.4% 75.8% 33.3% 33.3%

Table 4.22: Partner location by type of company

Table 4.22 shows that 4PLs are the least likely to be collaborating with companies located locally or in the same region. This is in agreement with the results from Table 20 as 4PLs tend to be large companies. Moreover, 4PLs did not return the highest percentage of companies collaborating outside of Europe as would perhaps have been expected, with 46.7% of shippers collaborating outside of Europe compared to 40%, of 4PLs. Shippers are expected to be collaborating with companies that can help them extend the routes they can offer, therefore their partners are located in different regions or countries to their own company. 3PLs and warehouse/distribution centres showed the highest levels of companies’ collaborating with local companies’, with warehouse/distribution companies also showing high levels of ‘collaboration with companies in the same region’. Warehouse/distribution centres concentrate on providing services to a specific geographical area and are therefore likely to collaborate with local partners to enhance the efficiency of these operations. However, there might be cases where they collaborate with a company with warehouses in different locations by both allowing the other a certain amount of space in their warehouses to increase their geographical service range.

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Respondents were also asked to indicate whether the companies they were undertaking horizontal collaboration with were generally larger than their company, smaller than their company or a similar size to their company. The highest percentage of respondents, 43.7%, indicated that they were collaborating with companies that are larger than their company, whilst 35.1% indicated that they are collaborating with companies of a similar size and 21.2% indicated that they were collaborating with smaller companies. It can be deduced from this, despite the issues of power and dominance in horizontal collaboration, that could be caused by being the smaller partner in the collaboration, companies would still rather work with a larger partner with more resources and expertise.

Unsurprisingly, size of the respondent company had a strong underlying effect on the relative size of partner companies, with none of the respondents whose companies fell into the two largest size categories collaborating with companies larger than themselves and the majority of these respondents indicating that their partners were normally smaller.

Whilst the smallest companies had the highest percentage of companies collaborating with companies that were larger, at 54%, a significant percentage also indicated that they were collaborating with companies of the same size. All sizes of companies appear to be open to collaborating with companies of a similar size. However, only 25% of the largest companies indicated that they were collaborating with companies of a similar size, due to the smaller number of companies of a similar size at this level in the industry generally, this lower percentage is to be expected.

Considering this data in terms of type of collaboration being undertaken, a number of differences can be seen between the typical partner sizes for the different types of collaboration. These are illustrated by Table 4.23.

151 Smaller than respondent’s company A similar size to respondent’s company Larger than respondent’s company Consolidation of complementary freight 37.9% 21.5% 40.5% Consolidation of non- complementary freight 18.2% 45.5% 36.4% Shared services 19.3% 34.1% 46.6% Joint procurement 10.0% 45.0% 45.0% Joint ventures 41.7% 41.7% 45.8%

Table 4.23: Relative size of partners by type of collaboration

Table 4.23 shows that joint procurement is the least likely initiative to be undertaken with partners that are smaller. This can be explained by the fact that if the partner is too much smaller the order value they will place will not make a significant difference and may not increase the companies’ bargaining power or the discount they receive for bulk orders.

The two types of consolidation of freight are the least likely to be undertaken with larger partners, with consolidation of non-complementary freight showing the highest percentage of respondents indicating that they were collaborating with companies of a similar size.