The municipality of Växjö analyzed their goods and services distribution and found that 1900 consignments were conducted by 73 distribution companies every week. To reduce the number of deliveries in the city and hence the environment impact, Växjö negotiated a new agreement with just one distributor through public procurement.
In order to reduce the environmental impact and improve environmental quality in Växjö city, the municipality started to coordinate all of their consumer goods purchases through a consolidation center with joint distribution into the municipality. Växjö is located in the south of Sweden and aims to create paths for other procurers and be a role model for Swedish colleagues in setting sustainability requirements. The service started in 2011 and has since resulted in coordinated supplies of goods such as food products and office supplies etc. The concept has been financed through a public interest investor for demonstration and commercial exploitation.
The aims are to reduce costs through centralized orders, minimize environmental impact, create a better working environment in terms of loading and unloading, optimize driving distances and facilitate market entry for smaller suppliers.
The innovation has led to a reduction of 82 percent in the number of deliveries within the municipality, reducing CO2 emissions by 74 percent per ton of goods delivered. The coordination of the flow of goods has also resulted in reduced heavy traffic and improved traffic safety in the city and around schools. Fewer deliveries also reduce environmental impact and thus constitute more sustainable transport. Växjö is partnering with the logistics company Scandinavian Supply Chain AB, which is mainly owned by Alwex Transport AB, to coordinate the distribution on behalf of Växjö Municipality. The company is using an IT system from the company Ongoing Warehouse AB in order to facilitate the coordination of supplies.
Factors such as reduced costs, reduced environmental impact and the hope of creating a standard practice have made the concept successful.
There is an increased interest in coordinated distribution both among suppliers and logistics companies, amongst others because of cost reduction benefits. So far, several municipalities have had a study visit to learn from the city of Växjö. Since the concept is ready for deployment to other areas the concept is estimated to be level 9 on the GML scale.