Saturday, 11 August 2012
Challenging times lie ahead for the road haulage industry which will see the logistics map of Britain change almost beyond recognition. That, at least, seemed to be the message from the 20th one-day seminar on "Improving Business Performance," organizied by the Road Haulage Association (RHA) for its members and hosted by Toyota Material Handing UK at its Leicester premises on June 19.
Road hauliers no longer work in splendid isolation from the warehousing function as many now operate their own distribution centres and undertake storage and handling functions once performed by manufacturers, importers and retailers. It is, therefore, crucial to know where they will be not just next year but 10-30 years ahead. Should they, for example, consider relocating to port centric locations with rail-embedded models or setting up LDCs to reduce final delivery distances, and what must they do to be seen as carbon angels?
Phil Harrison, director of LCP Consulting, tried to answer that in his thoughtful talk on "The Future of Warehousing." His key message was that carbon was the big, long-term challenge and that conventional solutions, would not be enough. In short, "The future for warehousing will be driven by the carbon challenge," epitomised by local 'carbon' sites using electric delivery trucks within a 20-mile radius instead of the current 60 miles based on ic engine trucks.
Industry rides virtuous circle
Mr Harrison had plenty of pointers to back his thesis which suggests the industry is riding a virtuous circle, starting with centralisation. This has seen a trend to fewer and bigger sites to the point where tonne/km are no longer growing with GDP. In 1984 a 38,000 mt2 warehouse was considered big but in 2008 a 100,000 mt2 site was unremarkable. The trend has also been upwards, from an average storage height of 6 mt to 14 mt.
Pleasing to any road haulier's ears was Mr Harrison's examples of what the virtuous circle could mean going out to 2050. He believes that Britain's road share of freight tonne/km will fall from 65% to 50% (not so pleasing, perhaps) but that the percentage of truck kilometres run empty will fall from the current 27% to 17%. The average weight-based load factor he sees as rising from 59% to 70%. The 'Green' camp will also be pleased, as the projections are for a 40% improvement in energy efficiency and a 30% cut in the carbon content of the energy.
But container terminals, in particular, can already do much better than that. At the world's most automated container port in Hamburg, 84 AGVs (automated guided vehicles) source their annual needs of 50 million kw from entirely renewable sources. Using this carbon neutral electricity has cut the whole terminal's carbon footprint by around 60% but there is more good news to come. Demag Cranes have developed all electric container handling AGVs that will completely eliminate local CO2 emissions. They will run for 17 hours on one battery charge thanks to the battery power train being twice as efficient as a diesel-electric one.
The drive to minimise carbon emissions, is not, of course just about preventing catastrophic climate change. It is also about the importance of preserving healthy lives. In Europe's northern countries around 50,000 people die prematurely owing to air pollution caused by cargo ships. That is why by 2015 all cargo ships in the English Channel, North Sea and Baltic must reduce the sulphur content of their fuel by 90%.
Future structures are already emerging to support Harrison's views. These include rail-embedded centres to manage in-bound flows and port centric locations. There are already city hubs aggregating the last 25 km and shared user hubs and services sites, regional mini distribution centres (DCs) and hubs.
Container growth will spur property changes
Some of Harrison' s views were supported by Jon Sleeman's paper on "Goods Transport Trends." Jon is a director, research, at Jones Lang LaSalle. These trends are driving activity in the property sector and in particular the envisaged strong growth in container traffic will see growing demand for port centric logistics. Forecasts show a 182% increase in container traffic between 2005 and 2030, from 7 million to 20 million TEU per annum.
Port centric logistics has the potential to provide more efficient logistics solutions by eliminating many return empty container trips. They also enable maritime containers to by fully loaded and they reduce transport costs and carbon emissions. The PCLs may challenge the 'golden triangle' national distribution model.
Online shopping will also shape the property market. E-commerce has hitherto been served by national fulfilment centres within reach of the main parcel hubs to enable late cut-off times to be offered to customers. But food retailers are moving away from vans using local supermarkets to make home deliveries and are now setting up specialist food retail fulfilment centres because sales volumes have risen sharply. This has implications for higher sales of automated warehouse equipment. Such E-fulfilment centres could challenge the existing map of UK warehousing by increasing demand from centres within, or on the edge, of major urban areas. Rail freight growth projections, if achieved, will also affect the property market. There is increasing interest from retailers and manufacturers for rail-connected sites.
In conclusion, Mr Sleeman expects rising demand for warehousing at or close to major container ports, warehousing on intermodal sites and storage in or on the edge of major urban areas for home delivery and 'last mile' solutions. As regards Off-pitch locations which are poorly located in relation to the key freight corridors, these could become obsolete.
All that, however, is in the future and hauliers cannot take their eyes off the ball on serious issues today, like safety and how to squeeze more revenues from existing operations. Too often some of the 400,000 HGVs on Britain's roads roll over, sometimes with fatal consequences, and usually they are caused by load movement owing to poor or non-existent load lashings. Ray Engley, head of technical services for the RHA, outlined the extent of the problem, causes and solution in his talk on "Load Securing -- from Theory to Practice".
Load security problems persist, particularly in curtainsiders, because there is evidence of poor practice, inconsistent enforcement, and no straightforward standard for operators. However, from April 12, 2012 VOSA's enforcement approach to load securing has changed to make it clear and more consistent.
In an example from a 2011 stop day, where vehicles were found defective, 49% of them related to inadequate load securing, 24% had no secured load and 15% an unstable load. The advice to combat this is simple enough. In the event of doubt on load security, RHS members should carry out a risk assessment for the load being carried. But is it really that simple, wonders this writer. As in warehouse forklift operations where the need to move goods out the door quickly to meet time constraints is often present, so, too, hauliers working under similar constraints where the business culture emphasises operational speed, conspires against any practices that may slow down throughput rates.
There is one peril lurking within road transport which often escapes mention -- the deliberate overloading of ISO containers. Quite apart from the many millions of pounds this behaviour deprives ship owners and governments, the accidents from such overloading can be horrific and far reaching, as in the case of the MSC Napoli container ship grounding off the Devon coast a few years ago, where gross overloading was a serious contributory factor. This problem will not be resolved effectively until weighing of containers at ports is made mandatory. "It's a major issue," said Mr Engley, "and we are working with the BSI to evaluate rules on loading containers." Ultimately, however, the IMO must be the enforcer but despite its many sound bites on promised action it has so far failed to deliver.