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Innovation, not taxes, the key to a greener supply chain

Birmingham, UK:  Transport is thought to be responsible for a quarter of all carbon emissions, and freight accounts for one third of transport’s total impact, a seminar at this week’s Multimodal 2013 exhibition at the NEC, Birmingham, heard.

Chris Welsh, director of global and European policy at the Freight Transport Association, said Europe was adopting the stick rather than the carrot approach, taxing carbon taxes and applying other penalties rather than rewarding good practice.

However, Welsh saw opportunities to do things differently and re-gear supply chains. He invited an expert panel to show how they were innovating to move goods in a less energy-intensive way.

Justin Kirkhope, project manager logistics strategy at The Co-Operative Food explained how the UK’s fifth largest food retailer tiptoed into trialling rail, sending just 10 boxes a week from its national distribution centre in Coventry, which holds slower-moving products, to Scotland in Spring 2010 in partnership with WH Malcolm.

Timetables were a problem, especially at weekends. Instead of dispatching trucks to its then three Distribution Centres in Scotland’s central belt on a just-in-time basis, The Co-Op was now restricted to two or three services a day.

Kirkhope diplomatically said it was a “challenge” for rail to match the costs of road transport. Yet he has been won over. “Reliability has been better than by road. We now send 25% of product by rail on this route. We’re saving 800,000km of road miles and 500 tonnes of CO2 per year.”

Temperature control on rail containers and tracking their position had been an issue, “but we’re starting to see new technology that will make it easier,” Kirkhope said.

He also admitted that integrating the special containers that The Co-Op pre-assembles to allow it to reach small, limited-access stores had put demands on the rail system.

The company is looking to extend its use of rail for deliveries further north to Inverness and to southwest England as part of a wider package of carbon reduction measures.

John Howell, rail development manager for WH Malcolm, said collaboration between the various players in the supply chain was essential.

“For customers, if the cost is not right, it’s not going to happen – but cost comparisons must be fair,” Howell said. He complained about “marginal costing that may be here today and gone tomorrow”.

Howell said operators must look at terminal opening hours and cutoffs to improve service levels, but there had to be commitment from the customer’s side too. “We may have to ask them to adjust picking times because they don’t now have a truck leaving every 10 minutes.”

Argos trunkers used to run 70% empty from the retailer’s Kettering DC to Mossend, Scotland. All this traffic has now switched to rail, representing 3,000 containers per year, according to David Parry, strategic transport improvement manager.

The retailer imports 42,000 boxes per year into the UK, many through Southampton, and 15% of these now go by rail to the Midlands. “We would put more on rail if the trains weren’t always full,” Parry commented.

However, it’s not all about modal shift. He said simple ideas such as centralised transport planning had made road transport massively more efficient, enabling Argos to remove 200 trailers from its fleet.

Low-resistance tyres, nose cones that were now being retrofitted to tractors and a reduction in maximum speed from 52 to 50mph were all making substantial savings, and Argos was now trialing fuel additives, Parry said. The company was converting to curtainsiders, which were lighter and more flexible in terms of backloads, and believed multiple steering axles had potential.

“We’ve always been a follower not a leader. We’ve learned not to be afraid of trialing things,” he said. The human dimension has not been forgotten, either. Argos came late to the party on telematics but drivers could now get active feedback on the road on how they were doing and were now being coached on techniques.

Rail now accounted for 30% of UK freight movements and had the potential to increase by another 10%, said Keith Gray, commercial director of Freightliner. “But road is still the dominant mode and sets the price,” he admitted.

The port of Southampton had seen an increase of a third in rail’s share of container movements after the route to the west coast main line was cleared to accommodate the largest units, but it took too long to get the funding for this, Gray said. It was a fact of life that grants were still needed to encourage further growth in intermodal transport.

Freight services required access to the higher-speed parts of the national rail network rack, and track access charges must be kept in check to control unit cost. “I’ve never met a company that was willing to pay more to reduce emissions,” Gray said.

All the speakers agreed that a more harmonised calculation of carbon emissions is crucial in allowing the industry to compare apples with apples. Even within the UK, let alone globally, this was seen as a big challenge.

The FTA’s Chris Welsh concluded: “If there’s a single message coming back from this forum, it’s – let’s have a common methodology, so that data from service providers is treated like for like.”

The Freight Transport Association organised a full day of seminars in cooperation with the Multimodal organisers, including discussions on portcentric solutions, declaration of container weights, leveraging contracts with ocean carriers, and fuel and freight derivatives.

• About Multimodal
Multimodal is a UK and Irish freight transport and logistics exhibitioh that also has a series of topical seminars and master-classes, and hosts a Shippers’ Village, giving freight buyers a private space to meet logistics suppliers. The supply chain show, entering its sixth year, is free-to-attend and takes place this week at the Birmingham NEC. Last year saw a record number of 5,500 visitors and more than 265 exhibitors. More at www.multimodal.org.uk