Sharing a heavy load

The eco­nom­ic slow­down of the last five years has forced every indus­tri­al sec­tor to look at how oper­a­tions can be car­ried out in a smarter, cheap­er and quick­er way. At the same time, the increas­ing aware­ness of cli­mate change and the demand for reduced car­bon out­put has added “green­er” to that list. The oper­a­tion of the sup­ply chain has been no excep­tion to this.

The role of the logis­tics man­ag­er is to max­imise the effi­cien­cy of all modes of trans­port avail­able – road, rail, sea and air – and to adopt the most effec­tive method, min­imis­ing both cost and CO2 emis­sions, while deliv­er­ing excel­lent cus­tomer ser­vice. Solu­tions include step­ping up the cre­ation of col­lab­o­ra­tive sup­ply chains through data shar­ing, stan­dar­d­is­ing busi­ness process­es, and shar­ing vehi­cle fleets and ware­hous­ing capac­i­ty.

Improve­ments in auto­mat­ed ware­hous­ing will also become avail­able to speed up order pro­cess­ing, and new mar­ket-match­ing mech­a­nisms – such as web exchanges – are being devel­oped where ship­pers and enablers can match rout­ing and capac­i­ties, so small and large com­pa­nies can con­sol­i­date deliv­er­ies. Major cor­po­ra­tions in a num­ber of dif­fer­ent indus­tries, includ­ing auto­mo­tive and con­sumer goods, already use third-par­ty logis­tics com­pa­nies as enablers to make such new arrange­ments work.

It is sig­nif­i­cant that most major retail­ers have devel­oped their use of rail freight in the recent past

Dif­fer­en­ti­a­tion in the sup­ply chain, chan­nel man­age­ment (where sup­ply chains are seg­ment­ed accord­ing to the ser­vice and cost require­ments of the cus­tomer) and col­lab­o­ra­tive part­ner­ships between logis­tics oper­a­tors will increase the oppor­tu­ni­ties for mul­ti­modal trans­porta­tion. This takes advan­tage of the avail­abil­i­ty of the most appro­pri­ate mode for the indi­vid­ual com­mod­i­ty at the required moment. These include the use of short sea-ship­ping facil­i­ties, barge freight and rail, each con­tribut­ing to valu­able reduc­tions in emis­sions and road con­ges­tion.

The ever-increas­ing arrival in the UK of “Made in Chi­na” pro­duce has gen­er­at­ed increased inter­modal oper­a­tions link­ing the key con­tain­er ports of Liv­er­pool, Southamp­ton and Felixs­towe with nation­al dis­tri­b­u­tion cen­tres and region­al hubs.

Many pio­neer­ing logis­tics oper­a­tors have also emerged, with ded­i­cat­ed rail freight oper­a­tions inte­grat­ing rail move­ments into a seam­less door-to-door ser­vice for cus­tomers. These com­pa­nies have large­ly pro­vid­ed ser­vices between the Mid­lands and Scot­land, but are able to bro­ker train space to oth­er cus­tomers unlike­ly to have the vol­umes of traf­fic to con­sid­er rail freight inde­pen­dent­ly.

Inces­sant com­pe­ti­tion in the super­mar­ket sec­tor has meant that retail­ers have been among the lead­ing and most inno­v­a­tive sup­ply chain oper­a­tors, and it is sig­nif­i­cant that most have devel­oped their use of rail freight in the recent past. To vary­ing degrees, all the major chains are increas­ing their use of rail, as well as devel­op­ing inter­est in water­borne freight.

A key issue with rail is capac­i­ty for freight traf­fic, as it com­petes for space with an ever-increas­ing demand for pas­sen­ger move­ment. Retail­ers cite increased train avail­abil­i­ty, sev­en-day work­ing, flex­i­ble timeta­bles, improved capac­i­ty and greater invest­ment as require­ments that would enable them to do more. Of course, the door-to-door facil­i­ty pro­vid­ed by road means that it will remain the dom­i­nant mode for mov­ing goods in the UK. Increased col­lab­o­ra­tion, includ­ing that between seem­ing com­peti­tors, pro­duc­ing and dis­trib­ut­ing the same prod­uct range, will be key to reduc­ing emp­ty run­ning, which remains a major obsta­cle to effi­cien­cy. Despite inten­sive use of joint ven­tures, col­lab­o­ra­tion, advanced IT and shared deliv­er­ies, a degree of this sad­ly remains inevitable.

All these oppor­tu­ni­ties and chal­lenges are present now, and must be grasped to ensure that our sup­ply chain of the future is not stretched to break­ing point. The les­son of the Char­tered Insti­tute of Logis­tics and Trans­port’s recent report, Logis­tics and Trans­port Vision 2035, is that major invest­ment and behav­iour­al change must be made to ensure Britain’s trans­port infra­struc­ture remains fit for pur­pose in 25 years’ time.

The economic slowdown of the last five years has forced every industrial sector to look at how operations can be carried out in a smarter, cheaper and quicker way. At the same time, the increasing awareness of climate change and the demand for reduced carbon output has added “greener” to that list. The operation of the supply chain has been no exception to this.