With soaring fuel prices, the need to cut costs as well as carbon emissions has never been greater.

Last week, The Grocer revealed details of a groundbreaking collaborative distribution scheme involving 37 retailers and suppliers, including Tesco, Asda, The Co-operative Group, Sainsbury's, Unilever, Nestlé and United Biscuits. Under the scheme, rivals have been sharing lorries, finding green alternatives to road transport and investing in more efficient engines.

The IGD-led group is hoping to cut a total of 48 million miles over a two-year period. It's already well on its way. The group claims to have saved 16 million lorry miles in the first year.

UB was until recently running empty trucks between the north and the Midlands. It now picks up goods from Nestlé factories in York and Halifax and delivers them to Nestlé distribution centres in the Midlands. "Sharing transport makes good distribution sense, good business sense and good environmental sense," says Jeff van der Eems, UB chief operating officer.

Working with a rival requires a leap of faith, but it is one that will pay off, says Nestlé group supply chain director, Chris Tyas. "Going back a few years you wouldn't have dreamed of a Penguin delivery van going to a Nestlé site where they make Kit Kats," he says. "There's been a realisation you have to work together to achieve these environmental benefits."

Tesco, meanwhile, is using trains rather than lorries in Scotland. Other businesses are training their drivers in fuel-saving techniques and have invested in more efficient engines that achieve more miles to the gallon.

The initiative has elicited the usual cries of 'greenwash' from the green lobby. "It's good to see the industry starting to work together on climate change," says Rupert Fausset, head of transport at Forum For The Future, a sustainability charity that works with business. "But this is only scratching the surface of the billions of HGV miles still driven to transport our food. The industry will have to go further in overhauling its supply chain, if it is to play its part in meeting CO2 targets."

That may be so but at least after years of false starts on the collaboration front, there is a real sense of purpose this time. And no wonder. In the new era of high fuel prices, there's as much of a business imperative as an environmental one.