An assessment of factors that influence coalition size of horizontal collaborations in the UK FMCG road freight transport sector

Abstract

Road freight transport plays a crucial role in supporting the UK economy, accounting for 79% of all domestic freight movements. However, there are inefficiencies in road freight operations, with 30% of vehicles running empty and only 63% of vehicles loaded to their capacity during their journeys. These inefficiencies not only impact operating costs but also contribute to higher carbon emissions. Transport is the largest GHG emission sector contributing 24% of the overall carbon emissions in the UK. Governments are setting decarbonisation targets to reduce carbon emissions from their economy and in the UK, the government has announced a plan to reduce carbon emissions to net-zero by 2050. Most companies primarily rely on internal measures to enhance efficiency from transport operations, but they have exhausted opportunities for further process optimisation within their existing operational boundaries. Horizontal collaboration is one of the solutions that go beyond organisational boundaries and has the potential to provide efficiency improvements, such as carbon and cost savings between 10- 30%. Theoretically, cooperative game theory suggests companies can achieve optimal cost savings by forming a grand coalition. Despite the benefits associated with a grand coalition, coalition size exceeding more than four companies is rare in practice and many collaborations fail during the implementation stage. The aim of this study is to assess the factors influencing coalition size of horizontal collaboration and evaluate coalition maximising strategies in the UK FMCG road freight transport operations to enable large size coalition. Methodologically, a systematic literature review conducted to identify the factors that influence coalition size of horizontal collaborations. Additionally, underpinning theories to horizontal collaboration such as cooperative game theory, social exchange theory and transaction cost economies were used to develop the conceptual framework. A mixed-methods approach is applied in this study, integrating focus group discussions to gain qualitative insights into factors influencing coalition size, and the Analytic Hierarchy Process (AHP) to systematically evaluate horizontal collaboration strategies and prioritise factors influencing coalition size of horizontal collaborations. The primary contribution to knowledge is identification of factors using literature review and theoretical foundation. Moreover, it prioritises identified factors that influence coalition size of horizontal collaboration and evaluate coalition maximising strategies in the UK FMCG road freight transport sector. This thesis provide AHP model for assessment of factors that enable practitioners to optimise their resource allocation by focussing on the most significant factors before joining a coalition. Moreover, it supports decision-makers by evaluating coalition maximising strategies for implementation of large size coalition.