Better logistics in European consumer goods

Performance-based logistics allowances can unlock potential savings for manufacturers and retailers alike.

Few European consumer goods producers offer their retail customers incentives for adopting logistics practices that lower the cost of delivering products. Such incentives—which include performance-based trade allowances to reward retailers for placing efficient orders (say, for full pallets or truckloads of goods instead of partial ones)—represent a valuable opportunity for manufacturers to boost their margins and establish closer relationships with retailers. As retail consolidation1 in Europe heightens the pressure on consumer goods companies, the importance of adopting performance-based logistics agreements will grow.