Freight efficient

Posted on 10 Dec 2009 by The Manufacturer

A bicycle can be up to five times more efficient than walking, produces no emissions and, according to San Francisco’s Exploratorium, 100 calories can power a cyclist for three miles but would only move a car about 85 metres. Tim Brown examines energy efficient options for shifting goods.

When it comes to moving a load any larger than a small backpack or a few saddle bags, the effectiveness of the bike deteriorates dramatically. That is not to say that the human body isn’t capable of moving large objects.

World strong man champion Mariusz Pudzianowski can drag an Airbus A320, weighing 45,000kg, along 25 metres of runway, and former world strongman, John Wooten, once pulled a 280 ton train along its tracks for a short distance. However, the operative word here is short. It would be truly impressive to see Pudzianowski move five palette loads of toilet seats from China to the UK, or indeed for Wooten to shift one ton worth of window glass any distance in a safe manner.

Clearly the six billion tonnes of freight shipped around the world each year and the £800m worth of annual UK airfreight are beyond the capabilities of manpower alone — not to mention the extensive workload contributed by domestic and international truck and rail networks. The need for long distance large scale freight transport is not going to disappear anytime soon. Despite an apparent economic and environmental imperative for an increase in near-shoring, deglobalisation remains but a theory. However, the importnace of economic and environmental issues ensure the need for supply chain optimisation.

Modes of transport differ greatly in terms of both cost and environmental impact. However, no one means of transportation is better than the other. Each is simply more suited to particular requirements and thus managing and optimising freight options is key. In addition, each mode differs in terms of effectiveness and efficiency. For example, the quickest and most effective means of transport over any great distance would be air.

However, it is likely to be more expensive, worse for the environment and has considerably less capacity than a ship. In general, effectiveness is at the peril of efficiency, and therefore compromise is needed to satisfy both criteria.

In simplistic terms, sea freight ranks best in the economical freight hierarchy, followed by rail, road and lastly air. However, this simplistic approach is very much dependent on the required distance, lead time and the availability of infrastructure such as sea ports and intermodal rail terminals. Rail and shipping are currently both enjoying considerable promotion as environmentally efficient transportation methods. As a result of this, less frequently used transportation methods such as intermodal rail and short sea shipping are enjoying increased interest.

Looking out to sea
Sea freight is clearly the most efficient means of transporting large amounts of goods a large distance. However, short distant sea freight is also a workable option. The European Union is actively promoting what it terms the motorways of the sea which, for most of us, is short sea shipping.

Alan Braithwaite, chairman of LCP Consulting, a specialist supply chain and logistics consultancy for manufacturers and retailers says the use of feeder vessels from the big container ports is certainly viable. “We are seeing a lot of that for example up to Teesport and Grangemouth. Ports up until the downturn had been quite congested, and this mechanism meant you could get your goods through much easier. This was a typical hub and spoke deal as per the airlines, as the costs tended to be absorbed so it wasn’t a big on cost. As an example, Rotterdam or Atwerp might go to Teesport.” The cost for short sea shipping is roughly £30 per tonne. The feeder lines tend to be run by operators such as Samskip which are different to the deep sea lines. Short sea includes intercontinental Europe journeys involving trips of only several hundred kilometres that can generally be completed overnight.

Earlier this year Transport Secretary, Lord Adonis, launched the Low Carbon Transport strategy, which was warmly welcomed by the Chamber of Shipping. “I am delighted that the strategy recognises that it is vital that action to reduce emissions from shipping should be taken on a global level, and sets out the Government’s commitment to achieve those reductions through an international emissions trading mechanism,” said Mark Brownrigg, director-general of the Chamber of Shipping. The Chamber took a lead position in the international shipping industry’s response to climate change in December 2008 by advocating a global and open emissions trading scheme and, together with WWF UK, has submitted a joint paper to the Committee on Climate Change, offering suggestions on the most appropriate methodology of assessing shipping emissions in the UK.

The Rail Freight Group has released figures arguing that by switching from road to rail, CO2 emissions can be reduced by 70% — although Defra puts the figure closer to 35%. Regardless, the saving is nevertheless considerable. Braithwaite agrees that rail is certainly a viable option, but its use is dependent on a number of factors. “For anything less than 150km, it is very difficult to use anything other than trucks. I use the maxim that if a journey is 300km or more and it has the right rail connectivity and it is not travelling extensively beyond the rail terminal, then rail is going to be viable under almost all circumstances.”

Rail is considered of high importance in UK government transport policy. According to Braithwaite, inside the UK intermodal rail freight is concentrated on two elements. First is the movement of containers from the ports to the distribution centres, primarily Southampton and Felixstowe. Those trains run in to places like Daventry, Birch Copse and the midlands, where the train will be unloaded and the goods trucked to a warehouse and unloaded. “Because the service is maturing and is competitive, that mechanism is growing,” he says, “despite the fact that container volumes are well down.” The second is for inland transport primarily from midlands locations up to Scotland. The containers used — known as 45ft megafrets — are different to the kind used in shipping. They sit on the bed of the rail wagon and can be lifted off and placed straight on to the bed of a truck. During a recent trip to a rail freight terminal, Braithwaite says he was pleasantly surprised by the high amount of back loading occurring with trains operating at 50-60% capacity for their return journeys from Scotland.

“This makes it very economical. Take, for example, a journey from Daventry to Scotland; roughly 500km.

That is well beyond the break-even point for rail. It is sufficiently economic that the train could come back empty and it is still cheaper than sending a truck. The fact that they are getting backloads is immensely environmentally interesting.” In an example of a company optimising use of the rail network, supply chain solutions provider Wincanton has recently been working with Malcolm’s Logistics to create a rail freight solution for drinks manufacturer, Britvic. The resulting solution will take up to 50 lorry loads off the road each day and is expected to reduce CO2 emissions by 3,285 tonnes per year, as well as reducing cost. Currently in its trial phase, the rail route will replace daily road journeys moving an average 1 million bottles of Britvic product including Robinsons, Pepsi, Tango, J2O, Drench Water and Fruit Shoot from the midlands up to Scotland.

Having originated from production sites in Norwich, Beckton, Rugby, Widford, Leeds and Huddersfield, the product will be consolidated at the Daventry rail depot ahead of transportation to Grangemouth and Mossend. The solution will deliver genuine CO2 savings by ensuring full return legs.

Despite the viability of rail, Braithwaite says there is a severe deficiency in terms of infrastructure and terms the availability of rail freight terminals and interchanges as “a massive issue” — although he concedes that an increase in capacity is planned. “There are about eight terminals around the UK that could be described as full intermodal terminals. There is certainly a desperate need for more. There are 1100 terminals around the UK but most of them are tiny.

Many deal with bulk aggregate material such as coal. For manufactured goods there are only about 8 terminals available with a few additional ‘bit players’. These terminals tend to be biased to the north of England. There is almost nothing of any significance in the south.” There has also been an increased interest in intercontinental European rail recently, although the cross channel tunnel is currently extremely underutilised. “The rail channel tunnel is currently running at five freight trains per day,” says Braithwaite. “This is quite low, considering the allowable limit under the treaty of Canterbury is 35 and that there is a capacity for much more.”

Logistics management
The optimisation of freight transportation is, however, not dependent simply on the pairing of right transport mode in the right situation. There are many other management tools and techniques that can dramatically improve efficiency. Barloworld Logistics CEO, John van Wyk, says the creation of a cogent supply chain solution is necessary for every business, as is adequate preparation for changes in the transport market.

“We faced two major events in the last 18 months,” says Wyk. “Many people have already forgotten the first one, which was the first oil price spike where oil reached nearly $150 a barrel. The impact of that was not only on freight rates, but also shipping schedules due to many ships dialling back their throttle in an effort to conserve fuel.

This lead to a delay in delivery, and the knock-on effect of that flowing through a network can be tremendous, especially for companies running a very finely tuned network and some just-in-time management arrangements.

“Shortly afterwards we had the economic crisis which resulted in a steep fall in global trade. The result was a surplus of capacity in air and sea freight throughout the supply chain. Many of those companies that decreased their freight rates so as to remain operating are now increasing rates by as much as 25%. There has been a huge variability in the last 18 months and these issues have a tremendous impact on efficient supply chain management.” According to Wyk, a big change as a result of recent freight market turbulence has been a higher demand for visibility. He says that managers want to know what is happening in the supply chain so they can execute logistics activity in the most optimal way, and if the opportunity arises, take advantage of the volatility. He says that the use of a good logistics management and the application of the right technology can allow companies to link planning tools and methodologies with absolute killer execution, and start to improve not only the visibility, but also the flexibility of the supply chain.

Richard Burnett, unit director at Wincanton agrees, adding that visibility within logistics management across all the flows of a customer base allows for improvement in efficiency. He says that the logisitics market is focusing a lot more now on driving efficiency and looking at shared user transport. “Where once there was great competition within this market, I think there is now a much more collaborative approach.” The drive by consumers, government and the freight industry itself for continual efficiency gains will ensure continued improvement. However, the successes to this point are most likely far below the levels needed to satisfy the increasing requirements. With the price of oil expected to become a considerable issue again very shortly, the freight industry will undoubtedly see more market volatility. While the bicycle will never be able to replace the freight liner, there is an obvious need for effective transportation methods and techniques that have a similarly low environmental impact.