Choosing and Developing a Multi-modal Transport Solution Guide Acknowledgements
The Freight Best Practice programme would like to thank the following two organisations for their significant contributions to the case studies in this guide:
Rail Freight Group Freight by Water (formerly Sea and Water), now part of FTA
The Freight Best Practice programme would also like to thank the following people and organisations for their contributions to the case studies and photographs in this guide:
• Alan Woodburn
• British Waterways
• Frank Worsford
• Freight on Rail
• Freight Transport Association
• Gavin Roser
• Mike Browne
• Neil Stevens
• Network Rail Plc
• Steve Mulvey
The Freight Best Practice programme would like to thank the large number of companies and organisations featured in the case studies. A full list of these can be found in the Contents Page.
Front Cover Photograph A Fastline locomotive at the head of a container train at Birmingham Intermodal Freight Terminal, one of the newer freight terminals and featured in Case Study 31. Due to problems with its Parent Group Fastline ceased trading in March 2010.
Disclaimer: While the Department for Transport (DfT) has made every effort to ensure the information in this document is accurate, DfT does not guarantee the accuracy, completeness or usefulness of that information; and it cannot accept liability for any loss or damages of any kind resulting from reliance on the information or guidance this document contains. Foreword
Freight Best Practice is funded by the Department for Transport and managed by AECOM Ltd to promote operational efficiency within freight operations in England.
Freight Best Practice offers FREE essential information for the freight industry, covering topics such as saving fuel, developing skills, equipment and systems, operational efficiency and performance management.
All FREE materials are available to download from www.businesslink.gov.uk/freightbestpractice.
3 Contents Acknowledgements 2 Foreword 3 1 Introduction 8
The Aim of the Guide 8
What Is Multi-modal, Inter-modal and Co-modal Freight Transport? 8
Who Is the Guide for? 9
Structure of this Guide 9 2 The Modal Markets 10
Resurgence in the Rail and Water Markets 10
The Rail Freight Market 10
The Water Freight Market 12
A Strategic View of the Transport Market 13 3 Strategic Considerations for Modal Shift 14
Modal Shift Suitability 14
Market Dynamics 16
Rail and Water Freight Policy 17
Environmental Considerations 18
Organisational Priorities - Putting Strategy into Practice 20 4 Operational Factors Affecting Your Modal Choice 21
Cost 21
Supply Chain Resilience 22
Reliability and Punctuality 24
Customer Service 25
Access to Rail Network and Waterways 27
4 Flexibility of Services Offered 29
Volumes 30
Commodity Type 31
Distances 32 5 Co-modal Case Studies 33
Logistics Service Providers 33
Retailers 34
Bulk Commodities 35
Container Operations 37 6 How to Make the Modal Switch 39
A. Access Sustainability 39
B. Find Partners and an Operator 40
C. Feasibility Study 40
D. Grants 43
E. Business Case 46
F. Review 47
G. Operate 47
Appendix 1 Glossary of Terms 48 Appendix 2 Relevant Contacts 50 Appendix 3 Map of Port Locations and Main Inland Waterways 53 Appendix 4 Rail Freight Network Including Terminals (W8 Gauge and above) 55 Appendix 5 National Rail Infrastructure 56
5 Case Studies
Case Study 1: Feederlink BV 13
Case Study 2: Derbyshire County Council 17
Case Study 3: Tesco’s Rail Service Replaces Over 13,000 Lorry Journeys per Year 19
Case Study 4: Olympic Demand for Sustainable Distribution 19
Case Study 5: Cemex Starts Traffic Flow on the River Severn After a 10-year Gap 22
Case Study 6: Reliable Services - Potter Group, Rosebys, Medite, GB Railfreight 23
Case Study 7: ASDA Improves Resilience in Supply Chain by Taking to the Water 23
Case Study 8: Technology Improves Resilience in the Supply Chain - Tata and Dawsons 24
Case Study 9: A Step Approach Based on Service by Kuehne & Nagel 24
Case Study 10: Achieving CO2 Reduction and Avoiding Congestion in Central London - J Sainsbury’s Use River Transport 25
Case Study 11: Daily (7 Days a Week) Rail Freight 26
Case Study 12: Royal Mail Chooses Rail to Help Customer Service 26
Case Study 13: Cory Provides Excellent Service Levels for Local Authorities in London 27
Case Study 14: Hutchison Ports Benefit from Gauge Enhancement 28
Case Study 15: Westmill Foods Operation Benefits from Flexible Access 29
Case Study 16: The Tesco / Stobart Train 29
Case Study 17: Corus Steel (now Tata) 30
Case Study 18: Mendip Rail Choose Longer and Heavier Trains 30
Case Study 19: Abnormal Loads - Last Journey of Concorde 31
Case Study 20: Bulk Movements 31
Case Study 21: Short Distance Train Movements 32
Case Study 22: Short Distance Water Freight Movements 32
Case Study 23: Logistics Service Providers - The Malcolm Group 33
Case Study 24: Rail and Water as Part of a Supply Chain - John G Russell (Transport) Ltd 33
Case Study 25: ASDA Operates Several Rail Services 34
6 Case Study 26: ASDA Saves Road Miles by Using Coastal Shipping 34
Case Study 27: Tesco’s ‘Green Train’ 35
Case Study 28: Tesco’s Wine by Barge 35
Case Study 29: Corus (now Tata) - Steel by Rail 36
Case Study 30: Tata Uses Water Freight for Steel Movements 36
Case Study 31: Roadways Container Logistics Limited 37
Case Study 32: OOCL Offers Feeder Services 38
Case Study 33: K-Line Short Sea Shipping 38
Case Study 34: Days Aggregates 43
Case Study 35: Lafarge Aggregates 44
7 1 Introduction
Every mode of transport whether it is road, rail, inland waterways or short sea shipping has its own inherent advantages and, of course, limitations. Companies choose to use the mode that provides them with the best solution for the market and environment in which they operate. However, changing markets, increasing concern over the environment (especially CO2 emissions), higher levels of congestion, rising fuel prices, and changes in taxation and direct grants for certain freight movements, all mean that the boundary between which mode provides the best economic and environmental solution is changing.
Historically this has always been the case. For example, the development of the rail network in the mid-nineteenth century fundamentally altered the balance between rail and narrow-gauge canals, and we may well be in a period when a similar process is more noticeable now than in the recent past. Freight operators are increasingly looking for opportunities to reduce costs, improve service and reduce their impact on the environment so these variables are understood and are being acted upon.
Therefore, when choosing the most efficient and sustainable freight solution, a customer focused freight operator needs to look at all the different modal options possible before a route and mode are selected. Once the choice is made the performance of the new freight service must be kept under close scrutiny to make sure that the chosen option remains the best solution given changing circumstances.
It is important that sustainability and profitability are not seen as mutually exclusive goals.
The Aim of the Guide
This guide aims to explain to freight transport providers and users of transport services, via practical steps, how to approach a consideration of the use of rail or water transport as part of their supply chains in the UK. The guide:
• Explains in simple terms the water and rail freight sectors
• Shows examples of where rail or water services can be used successfully
• Helps you to make a decision on modal shift for a particular transport leg
• Explains the availability of financial assistance such as grant funding
What Is Multi-modal, Inter-modal and Co-modal Freight Transport?
This guide defines multi-modal freight transport as operations where more than one mode of transport is used. Typically this might include road as well as rail or water transport.
Multi-modal freight transport is often described as the use of more than one mode of transport in a supply chain. Within the UK, multi-modal freight transport is often employed by the use of road, water and / or rail. This is the context within which it is taken in this guide.
Where multi-modal differs from inter-modal is in the operational specifics. The term Inter-modal is often associated with international container traffic.
Inter-modal can use one or more modes, but crucially, the goods being transported are not handled each
8 time they change vehicle or mode. For example, where containers are being transported inland Who Is the Guide for? from port via rail, the goods in the container are not handled, therefore the operation is inter- This guide is for anyone interested in modal. Equally, as the transportation comprises understanding if their transportation network or both water and rail transport, it can be described flows are suited to rail or water and whether this as multi-modal. ‘Modal Shift’ is appropriate for their business.
If the same transport route was utilised for the To clarify this decision, the guide highlights the flow of coal, the coal would have to be ‘handled’ steps to be considered, the benefits to be gained, to remove it from the ship and into rail wagons; and uses case studies to illustrate examples. in this case, the flow is not inter-modal, it is only multi-modal. Structure of this Guide Co-modal is a term first used by the EU in 2006 The guide is constructed around the following and refers to the intelligent use of two or five chapters and utilises case studies to more modes of transport on their own and in illustrate points. Where the case studies are combination to get the biggest benefit from each concerned with rail they are displayed with a of them so that the overall journey is the most green background, where the case studies are sustainable that it can be. This optimising in the concerned with water they are displayed with a use of resources has economic, environmental blue background. and societal benefits. A number of examples of companies using a range of different modes of If you already have a good understanding of transport are featured in Chapter 5. the rail and / or water markets, you may wish to go straight to Chapter 6, which explains how to All three terms are used within different make a modal switch. examples in this guide. Figure 1. The structure of this guide
Understanding Multi-modal Freight Transport Implementing Multi-modal Chapter 2: The Modal Markets Freight Transport Chapter 5: Chapter 3: Strategic Co-modal Case Studies Chapter 6: How to Make the Considerations for Modal Shift Modal Switch Chapter 4: Operational Factors Affecting Your Modal Choice Real-life Case Studies
9 2 The Modal The Rail Freight Market In 2008, the rail freight market lifted 103 million Markets tonnes, which is around 4.5% of the total goods lifted in the UK. Whilst steady growth has been shown between 1996 and 2006, rail freight Resurgence in the Rail and actually declined in 2007 and 2008 , moving 21 billion tonne kilometres , down from its peak of Water Markets 22 billion in 2005-2006.
Rail and water freight account for 24% of the There are currently a number of rail freight UK’s freight tonnes per kilometre. The rail and operating companies (FOCs) all vying for water markets have always played an important business ( images shown on this page and role in freight transport within the UK. Since the contact details are in Appendix 2) and this privatisation of rail in 1994, rail freight has grown competitive environment has pushed up service by 66% (tonnes per kilometre moved) and water levels and reduced costs to the benefit of the transport is similarly seeing a revival with the market. A map of the UK’s rail infrastructure is undertaking of a variety of projects including shown in Appendix 4 and 5. container moving feeder services.
Whilst growth and investment serve to increase the attractiveness of rail and water, there are external factors that are increasing the potential benefits for modes other than road.
The increasing cost of fuel, drivers’ hours regulations and the commitment of the industry to reduce emissions have all increased the opportunities for rail and water transport operators and their customers.
To take advantage of the resurgence in rail and water, a balanced view of the multi-modal market is necessary because all modes have disadvantages and these are important to identify and compare against the possible advantages.
10 Key Facts for Rail Freight
• Rail freight has attracted over £1.5 billion of investment from the private sector since privatisation in 1994
• Since 1994, rail freight tonnes per kilometre have grown by around 66%, increasing its market share of inland surface transport to 11.5%
• In 2008, rail freight moved the equivalent of 6.34 million lorry journeys
• Since 2000 Britain’s rail freight companies have bought over 400 brand new diesel locomotives and over 3000 new wagons which has improved service levels significantly
(Courtesy of the Rail Freight Group)
Many of the rail freight operating companies are keen to demonstrate their customer focus “In 2007 Freightliner were operating through their publicity, as these quotes from with over 1,700 staff, 175 locomotives, three of the major FOCs show. including 127 new Class 66s, and more than 2,300 wagons, including newly built coal hoppers, flats and aggregate wagons. We carried up “DB Schenker is Britain’s largest to 3,000 inter-modal containers per rail freight operator and operates day and ran over 1,200 heavy haul its services with highly reliable trains per week attaining 97+% on- locomotives and wagons. Over half time deliveries and were awarded the the DB Schenker locomotive fleet was prestigious Rail Freight Award and built in the last fifteen years, therefore Business Improvement Award by IFW providing efficiency and reliability in (International Freighting Weekly).” the delivery of trains.” www.freightliner.co.uk www.dbschenker.co.uk
11 There are four categories of waterways classed “GB Railfreight has swept away decades by size of vessel (dead weight tonnes, dwt). These of outdated working practices. are: GB Railfreight’s success is built on an unrivalled record for reliability • Principal Freight Waterways (>1350dwt.) and punctuality – both locomotive - This covers the main waterways such as availability and service reliability run at the Thames, the Humber, the Ouse and the around 99%.” Trent, the Manchester Ship Canal and the Severn www.gbrailfreight.com • Main Freight Waterways (350-1350dwt.) - This covers the Aire and Calder, the The Water Freight Market Caledonian Canal, the Sheffield and South Yorkshire Navigation, and the Weaver The water freight market in 2009 amounted to 542 million tonnes of which 369 million tonnes • Intermediate and Freight Potential lifted was international sea freight. The balance of Waterways (100-350dwt.) - This covers 172.4 million tonnes was domestic water freight waterways such as the Rivers Hull and Great resulting in 49.7 billion tonne kilometres of goods Ouse movement and was comprised of the following: • Smaller Waterways (<100dwt.) - This • 41.4 million tonnes on inland waterways includes most narrow canals such as the Grand Union Canal. Much of the • 107.6 million tonnes by coastal shipping movements on the narrow canal network is of leisure craft but there is current • 24.1 million tonnes was one-port traffic investigation to see if there is some scope (mainly to and from oil rigs and dredging for freight traffic operations) Coastal Shipping The busiest inland waterway was the River Thames where 18 million tonnes were lifted. There are 11,072 miles of coastline and 300 ports around Britain (118 of these are shown in The domestic water freight market for the Appendix 3) and consequently coastal shipping purposes of this guide is spilt into two types, represents a serious opportunity for developing inland waterways and coastal shipping. multi-modal transport solutions. Lloyd’s List reported that in 2004 the UK accounted for 347 Inland Waterways million tonnes moved by short sea shipping, which was 16% of the total short sea shipping of There are about 5,100km of fully navigable the EU. waterways in England and Wales, of which around 450km are tidal. The main inland In general, the advantages of short sea and waterways and canals of the UK with good freight coastal shipping are that it is: potential are shown in Appendix 3. • Often cheaper by tonnes per kilometre than The bulk of freight movements on inland road transport waterways are found on larger canals and rivers which allow the use of bigger vessels. • Reliable, with guaranteed transit times Domestically, water freight accounts for 6% of tonnes lifted and can be cost-effective especially • Flexible - as there are more than 300 major for bulk and outsized loads where economies of European inland and coastal ports scale can be taken advantage of.
12 • Environmentally friendly on a tonne per kilometre basis A Strategic View of the Transport Market Several services have begun offering a choice to shippers on the eventual route a container might Road freight has become the mode of choice use. For example, it is possible that a Chinese for many transport operators and this has container could be unloaded at Rotterdam and resulted in significant growth over the last be placed on a coastal feeder for delivery into three decades. While operators moving heavier Immingham, Hull or Teesport rather than being commodities such as aggregates, coal and steel offloaded at Felixstowe and moved onward by have kept their traditional association with road. B&Q (the DIY retailer) took the decision rail and water transport, other operators have to move most of its imports from south coast found the flexibility, cost, ease of market entry ports to Immingham as it is nearer their main and reliability of road transport much more distribution depots in Scunthorpe and Doncaster. favourable than the other modes. This trend is shown in Figure 2 which shows three mode volumes from 1970 - 2000; whilst clearly showing the marked rise in road. There are also positive trends for both rail and water, particularly after Case Study 1: Feederlink BV 1994 privatisation.
Feederlink BV, part of the ICG Group, operates Figure 2 Goods Moved by Domestic Freight several services linking Rotterdam and UK Transport: By Mode ports. It is a pure feeder operator whose customer base is the main deep sea container shipping lines. It runs ships on a port rotation including Rotterdam, Felixstowe, Tyneside, Teesport and Grangemouth. Generally ships run in both clockwise and anti-clockwise directions. These services allow the movement of containers in the clothing, automotive and general cargo markets plus the re-positioning of empty ‘boxes’.
As well as feeder services from mainland Europe there are feeder vessels that supply links between UK ports, for example, Southampton to Teesport. Many of these services offer a choice of four or (Source: Transport Statistics Great Britain, DfT, five port destinations around the British Isles. 2007) For example, there is a flow of containers from Southampton up the Manchester Ship Canal which may offer an alternative to road or rail services. The uptake of such services and the likely change in supply chain is unknown but they could have an effect on potential demand for road or rail services as they can make additional journeys and deliveries when required.
13 3 Strategic Considerations for Modal Shift
The change from the use of one mode to another (modal shift) cannot be based on one factor alone. A strategic view is required and there are five main considerations that must be addressed:
1. Modal Shift Suitability
2. Market Dynamics
3. Rail and Water Freight Policy
4. Environmental Considerations
5. Organisational Priorities - Putting Strategy into Practice
These considerations are discussed in more detail throughout this chapter.
Modal Shift Suitability
Location
Having a good location is one of the most important factors in influencing transport costs. Before considering modal shift you should ask yourself some important questions:
• What existing links to rail and water can you have access to?
• If considering new premises is it near more than one type of transport infrastructure?
• Are there any new multi-modal developments in the area that may be to your advantage?
This strategic thinking could provide long-term benefits by future-proofing your organisation against changes in legislation or market conditions as well as offering flexibility to your business in the short- term.
Types of Commodity You Move
Transport by rail and water is already present in a variety of sectors and therefore whatever your commodity it is likely that there is a flow of goods already in existence. The following list provides some examples:
• Bulk commodities, e.g. steel by rail from Scunthorpe to Hartlepool and from Rotherham to Goole by barge
• Containerised deep sea freight between ports and container terminals, with a final road leg, e.g. containers from Southampton to Widnes Intermodal Terminal by rail, and the Irish Sea and Manchester Ship Canal to Irlam, a wharf near Manchester
• Waste from Manchester to Roxby in North Lincolnshire by rail and within London on the Thames
14 • Automotive products, e.g. BMW Minis Figure 3 shows the growth of tonnes per from Oxford to Purfleet by rail and from kilometre for the rail freight industry in general. mainland Europe to various ports around The UK’s reliance on coal imports has seen this the coast of the UK by short-sea shipping commodity grow the most but in general the trends are positive. This is especially true for • Petrochemicals from Immingham refineries domestic inter-modal services which have seen on the Humber estuary to Kingsbury by significant growth since 2002. rail and from Immingham to Castleford by barge Suitability Assessment
This list is far from exhaustive and this upward To help you assess if your goods are suitable, trend in domestic inter-modal freight is shown by for modes other than road, Table 1 (below) Figure 3 (which refers specifically to rail freight). highlights those commodities that currently flow on parts of the rail and water infrastructure. The Figure 3 Rail Freight Commodity Types Moved colour coding indicates where there are regular movements, trial and irregular flows or where products and modes are badly matched and hence are considered to be unsuited.
Key Regular Movements Trial Flows or Irregular Movements Not Suited * = Short sea Ferry Crossings
(Source: AECOM market analysis, 2010)
(Source: Transport Statistics Great Britain, DfT, 2007)
Table 1 Mode Sustainability Assessment
Inland Short Sea Mode/Commodity Type Rail Waterways Shipping Aggregates Coal Retail (non food) Retail (perishable food) Container Automotive Parcels Home Delivery Waste Oil and Petroleum Steel / Scrap metal Forest Products
15 Market Dynamics Working Time Directive Notwithstanding the elevated level of safety To allow for a long-term view in planning, this brought about by stricter drivers’ hours limits, section describes: legislation of this type has placed pressure on the • road industry. Combined with congestion, this The factors affecting the road haulage presents a challenge to maintaining service levels industry’s dominance in road freight transport. • Expected growth in the rail and water Driver Shortages markets The shortage of fully competent drivers means Factors Affecting the Road Haulage that those that are competent can command Industry’s Dominance higher wages. Should demand outstrip supply, higher wage bills could make road haulage Despite significant efficiencies achieved in the more expensive. A further factor that is having a road haulage industry in recent years, vehicle bearing on the availability of drivers is the need, fixed and variable costs have increased at a as of 2009, to hold a valid Driver CPC (Certificate greater level than inflation, for example, in 2006 of Professional Competence). costs rose by 8.2%. This has been predominantly due to escalating fuel prices, the cost of new Economies of Scale for Rail and Water vehicles and staffing costs but the road industry has been proactive enough to improve its The ability to ship quantities far greater than a efficiency so as to contain some of the impact of single truckload with a fraction of the manpower price rises. provides a distinct cost benefit for water and rail. In the case of rail, one trainload, for example, However, whilst the road haulage industry will operated by one driver can replace around 30 need to continue to address rising operating truckloads (30 drivers) which can be moved over costs by introducing measures such as new a vast distance. Green Logistics (An Engineering vehicle technology, vehicle design and driver and Physical Sciences Research Council funded training, there are some factors which cannot research project into sustainable logistics) be controlled. The following factors all have a report that an average container train carries significant bearing on the current cost of road 30 containers. Similarly two staff on a barge can haulage (some of them also affect rail and water deliver 750 tonnes or 30 truckloads. freight but in different ways). Expected Growth in the Rail and Increasing Fuel Price Water Markets
Whilst load sizes by road remain relatively small Network Rail Freight Route Utilisation Strategy compared with rail and water, the price of fuel 2007 predicts a 30% growth in tonnes lifted will continue to have a significant effect on the over the next ten years. The greatest increase price per Tonne of road haulage. The larger load in freight is expected to be in coal, inter-modal capabilities of water and rail lessen the effect of and construction traffic and the railway has fuel price fluctuation on costs in all but the final gradually been making inroads into the market road leg of the journey. for transporting ambient products, such as supermarket goods. Further growth is expected, Congestion for example, between Scottish terminals, such as Grangemouth, and West Midlands inter-modal Increasingly busy roads often mean longer terminals. Moreover, with the biggest inter- journey times and this has an impact on a driver’s modal growth expected to come from the deep ability to cover the required distance within the sea ports in the south east, the opportunities for hours allowed. growth in rail and water moving goods North could be significant.
16 Rail and Water Freight Regional and Local Rail Freight Policy Policy Many regions and Local Authorities (LA) have relevant policies that seek to promote sustainable While regional and national policies will be transport. For example, the East Midlands the major influence, EU policies are also likely Regional Freight Strategy seeks to promote: to affect both rail and water freight in the UK. For example, there is now greater emphasis on “Regional and local partners to work together to reducing the adverse environmental impacts of identify and promote opportunities to achieve a road freight at both UK and European level. significant shift from road to rail freight.”
The document goes on to say: “By 2015, the Rail Freight Policy tonnage per annum carried by freight trains originating or terminating in the region should National Policy increase by 4.5 million tonnes over 2005 levels, represented by an extra 30 trains per day.” The Department for Transport (DfT) has been funding rail infrastructure improvments with a A favourable council can be an important and commitment of £200m of funding to Network influential partner when trying to achieve modal Rail up to 2014 for the development of a Strategic shift. For further information please contact your Freight Network (SFN). What this amounts local council. to is a progressive programme of network enhancement to increase the logistical efficiency of rail. For more information, obtain a free copy of the publications Freight Quality In addition, over £150m of funding has Partnerships and the Local Authority Freight been allocated through the Productivity Management Guide. These are available via Transport Innovation Fund for infrastructure the website at www.businesslink.gov.uk/ enhancements. These schemes include: freightbestpractice
• £80m to enhance the gauge and capacity on the Peterborough - Nuneaton route, providing a crucial alternative to the busy Case Study 2: Derbyshire rail routes via London County Council • £42.8m to enhance the gauge on the Southampton - Nuneaton corridor, Derbyshire County Council’s policy is to completed April 2011 encourage existing freight to switch to rail where practicable and to encourage new • £8m to increase capacity on the link freight on to rail. There are two main areas between the Humber ports and the East where positive council intervention helped, Coast main line firstly, by providing a smooth planning process and secondly, assisting and supporting grant applications. • £1.6m to improve access between the West Coast main line and Liverpool Docks The Council believes it has helped shift over 25 million tonnes since 1993 onto rail, and it is • £18.5m for gauge clearance and freight running at around 8 million tonnes per annum. capacity work on the Gospel Oak to Barking Also it has helped other LAs with similar issues line arising from setting up rail-fed distribution sites to understand the local factors of lorries running to / from a depot versus the long-term gain of trunk haulage by train.
17 Water and Port Policy Corporate Social Responsibility (CSR) The DfT has published several reports in recent years, all of which highlight the importance of CSR is becoming a driver for change in many a sound ports’ policy. The Ports Policy Review of businesses and environmental impact is one 2006 forecasts that for the period 2010 – 2030 important part of CSR. Addressing your carbon the rate of growth for containers and Roll-on / footprint can offer a win-win situation, i.e. Roll-off (Ro-Ro) will be 71%, compared with a improving operational efficiency can save you more modest 16% for bulk freight. fuel and reduce CO2 emissions, which benefits the environment. The growth rate for unitised freight (Ro-Ro and containers) is predicted to be substantially higher As companies seek to quantify their carbon than the rate for total HGV traffic as predicted footprint and realise that the quantity of CO2 by the National Road Traffic Forecasts (NRTF) for from road transport is a significant factor in the the same period. Unitised freight traffic currently whole greenhouse gas calculation, there is an accounts for 16% of all UK lorry freight tonnes per increasing need to find solutions to the problem. kilometre and is predicted to represent 24% by A shift to non road based modes of transport can 2030. offer substantial benefits in this area.
This will lead to an increase in road freight traffic The Department for Transport estimates that from UK ports, potentially increasing congestion overall freight traffic between 1990 and 2005 making the use of rail or coastal shipping more grew by 20% and transport-related CO2 emissions attractive. grew by 11% over the same period. Unless there is a move to different modes of transport,
CO2 levels will only decrease as fast as new Environmental technology and efficient driving allow. Considerations
With the increasing awareness of Corporate Social Responsibility (CSR) the environmental credentials of rail and water are sometimes cited by companies seeking to enhance their image.
• Water transport emits 80% less carbon dioxide than HGVs and 35% less nitrogen oxide (Source: ‘The Case for Water’, Sea & Water, 2006)
• Rail transport produces 80% less carbon dioxide per Tonne carried than road transport. (Source: Association of Train Operating Companies)
However, it is recognised that more research is needed in this area to ensure valid comparisons are made. The regulary updated ‘Guidelines to Defra/DECC’s GHG conversion factors for company reporting’ this is a good place to start comparing emissions form different frieght transport modes. (www.defra.gov.uk)
18 Case Study 3: Tesco’s Rail Service Replaces Over 13,000 Lorry Journeys per Year
The service from Daventry International Rail Freight Terminal (DIRFT) to Grangemouth Rail Terminal in Scotland began in September 2006. Eddie Stobart Ltd collected goods from Tesco sites around the Daventry area, delivered them to DIRFT where they were loaded on Swap Bodies (see Appendix 1) for the train bound for Grangemouth. Tesco provide 100% of the goods volume travelling north and 90% of the southbound volume, with other Eddie Stobart customers providing the remaining volume.
The Stobart / Tesco collaboration means that for every train used, 28 truckloads can be taken off the road which will prevent approximately 19,600 road miles and save 7,962 litres of fuel.
Although this service has now changed to run between Rugby and Mossend, the environmental benifits continue to accrue.
Case Study 4: Olympic Demand for Sustainable Distribution
Some of the construction materials for the Olympic Games have been allocated to be brought in by rail and water to minimise the extra road congestion brought about by the Olympic Zone construction. British Waterways, the Olympic Delivery Authority (ODA), Department for Transport (DfT), Transport for London (TfL), and London Thames Gateway Development Corporation combined to invest £18.9 million (source: British Waterways, April 2008) in a new lock which would counter the tidal limitations of the River Lea in East London. It is hoped that Prescott Lock could remove up to 140,000 lorry movements from London’s congested roads during the Olympic building phase and 12,500 thereafter. This shows the willingness of the water freight industry to invest and take opportunities similar to any other mode and whilst the need was to provide sustainable distribution for a one-off event, it is estimated that the cost will be one-third of what the road infrastructure improvements would have been. Also, the development of new water-based infrastructure will leave a legacy plan for post - 2012 movements.
19 Organisational Priorities - Putting Strategy into Practice
Finding the balance between the four strategic considerations (suitability, market dynamics, freight policy and environmental considerations) can only be done through the understanding of your organisation’s priorities.
There is a trade-off to be made between ‘operational suitability’, ‘going green’ and ‘maintaining profitability’. Determining the mix of priorities and where the trade-offs lie within your organisation is at the heart of the modal shift debate. The following chapter goes into detail regarding the operational factors that can affect your decision and contains case studies on how companies have done this in the past, including obtaining grants that can help with capital and resource costs.
20 4 Operational Factors Affecting Your Modal Choice
Pre-conceived ideas about rail and water transport can be the most significant hurdle to understanding the suitability of modal shift for your business. This may arise from poor previous experiences or simply a lack of knowledge of what is on offer in the current market.
This chapter looks at the main factors affecting the decision for modal choice, and explains in general terms the current offer of rail and water transport. Practical examples have been included to show how the switch to another mode has resulted in positive results. The factors relating to your modal choice will be unique to your operation, but can be generalised as:
• Cost - Can you afford the change?
• Supply Chain Resilience - Will your operation become more or less resilient from changing mode?
• Reliability and Punctuality - Are rail and water reliable for your operation?
• Customer Service - Will you still meet your contractual obligations to your customers?
• Access to Rail Network and Waterways - Are they in close proximity to your operations?
• Flexibility of Services Offered - Are the other modes flexible enough for your operation?
• Volumes - Have you sufficient volumes to make it worthwhile?
• Commodity Type - Are your commodities suited to other modes?
• Distances - Are sufficient distances involved to make it worthwhile?
Cost
It is important to remember that the vast majority of rail and water freight services are operated on a commercial basis without grant support. This is because where there is sufficient volume, particularly between fixed locations, the nature of rail and water freight will produce significant economies of scale.
REMEMBER:
Look at all the potential long-term benefits of switching mode. A grant should not be seen as the only justification for modal shift.
21 Therefore, the real problem is that if potential Case Study 5: Cemex Starts Traffic users find it difficult to get a prompt response to Flow on the River Severn After a a request for a quotation, both for segmented and / or door-to-door services, they may just 10-year Gap continue to use road freight operators who are used to giving a quick response. Thompson River Transport and British Waterways have enabled Cemex to transport To avoid this issue it is advisable to accept advice its construction materials for the local market from a variety of different sources such as the Rail via water rather than road, giving both Freight Group, the FTA, other rail and waterways economic and environmental benefits. users, and the mode operators themselves (Information on these types of organisations can The further development of Ripple quarry be found in Appendix 2). could have had an adverse effect on the quantity of road movements in the area. Cemex has made a modal shift to water REMEMBER: using Thompson River Transport’s specialist barges to transport 200,000 tonnes of gravel The cost of lifting products on and off and sand per year. The shift to water is an transport can be between £30 - £60 environmentally sustainable solution as well per container. This can mean that as being commercially viable. A further 65,000 although the cost per mile by rail is tonnes (a year) of processed material will be cheaper it can make the overall cost transported back down the River Severn to less attractive. This reinforces the Cemex’s ready mixed concrete plant south importance of door to door costing. of Gloucester. By using the water mode, and carrying out four journeys per day, it is the equivalent of 116 road journeys per day. As well as journeys saved, a barge will consume Supply Chain Resilience less fuel than the fuel required for the same road freight movement. While cost is, of course, a major factor, maintaining and enhancing the resilience of your supply chain is vital. Without a reliable The fuel cost to operate a single barge is £11.70 supply chain in place all your efforts to drive per journey compared to the cost of fuel to down cost and increase efficiency can be easily transport the same tonnage by road haulage undone. It is important to assess the robustness which would total £57.60. This equates to a of your existing supply chain and understand saving of around £35,000 per year. how other options for transport can improve its performance. The Difficulty of Obtaining Costs Rosebys, the home furnishings retailer, wanted to build resilience into its transport supply chain Notwithstanding the cost savings gained from as it was aware that there were often journey operating the services, as demonstrated in Case disruptions occurring on the roads between the Study 5, the rail and waterways sectors often port of Felixstowe and its northern distribution find it difficult to respond quickly on cost issues centres. As Case Study 6 illustrates, The Potter because certain factors are out of their hands. In Group and Rosebys were able to improve the way addition, they are often unable to give ‘door to they operate by turning to rail for some parts of door’ estimates, only quoting on the leg of the their distribution requirements. journey which rail or waterways cover. This can be a significant barrier.
22 Similarly, ASDA was concerned about congestion on the road leg of its supply chain bringing products from the south-east ports to its Northern Regional Distribution Centres. Case Study 7 shows how the introduction of coastal shipping to ASDA’s operation has provided it with a reliable alternative to road.
Case Study 6: Reliable Services - Potter Group, Rosebys, Medite, GB Railfreight
The Potter Group invested £8.5m to set up a new rail connected terminal at its Selby site which now handles three trains a day: a container train from Felixstowe, a train carrying road stone from Derbyshire and a train loaded with a range of different products. It operates a road fleet, warehousing and rail interchange facilities for various industry sectors including drinks retail, home furnishings, non-food retail, paper, and construction.
The inter-modal train runs from Felixstowe to Yorkshire on behalf of the Mediterranean Shipping Company (Medite). Rosebys based its National Distribution Centre at the Selby site and used the train to transport around a third of its containers that normally arrive into the UK at Felixstowe, with the remainder moving by road. Such was the reliability of the train service operated by GB Railfreight that Rosebys gradually entrusted more and more of its freight to being rail hauled. Container trains may carry up to 72 twenty foot equivalent units (TEUs) and in this case a train may save around 30 lorry movements
Case Study 7: ASDA Improves Resilience in Supply Chain by Taking to the Water
ASDA had found that the lead times involved in road collection of containers from the south-east ports to its predominantly northern RDCs were becoming increasingly unreliable due to congestion at the ports. This in turn was affecting on-shelf availability of imported non-food lines.
In response, ASDA developed a new £20 million import centre at the regional port of Teesport, near Middlesbrough, creating up to 300 jobs in the local economy. Now over 70% of import containers from the Far East are moved directly to the port of Teesport from various European ports by feeder vessel, to be discharged in the import centre for processing and onward distribution. The port development not only significantly improves the flow of goods for imported lines but also ASDA estimates it saves over 2 million road miles a year by routing its import containers via Teesport rather than the south-east
23 However, it is very important that trains depart Case Study 8: Technology from their originating point on time. The rail Improves Resilience in the Supply network operates to a tightly timed schedule of train services and any train that misses a Chain - Tata and Dawsons scheduled departure may have to wait some time for a spare ‘path’ in the timetable and may delay Technology is increasingly being adopted in other customers’ services in the process. On some a collaborative way with companies sharing parts of the rail network there is priority given to information from point of manufacture to passenger trains over freight trains and a freight end-user. Dawsons runs an inter-modal train running late may be routed into passing terminal at Teesside, with access by water, rail loops until a passenger service has gone by. and road, and has a high quality, temperature controlled steel holding warehouse that The rail freight industry monitors its punctuality keeps the product in perfect condition before and, indeed, some of its postal and container onward delivery to Tata (DB Schenker bring trains run to exacting timetables. One of the in the steel products by rail). The company is reasons behind this is the increase in ‘time computer networked to Tata’ computer so that sensitive’ goods where, for example, the train is all transactions are completely transparent, and met by a fleet of lorries ready to make urgent details of consignments are logged accurately. supermarket deliveries. The system allows tracking of products through the whole supply chain, allowing The timetabled nature of rail freight means that a flexibility in ordering, a reduction in stock- robustly configured and well-managed operation holding and hence cost of working capital and will provide regular, predictable and reliable a reduction in returns. The computer system services. In pure performance terms, train speeds allows immediate confirmation of successful vary from 60mph to 110mph for some parcel deliveries thus making invoicing quick and freight, and with improving technology, wagon accurate. design and investment in locomotives, service speeds are increasing all the time. Reliability and Punctuality Case Study 9: A Step Approach Supply chains demand a reliable service Based on Service by Kuehne & throughout and the rail and water industries are keen to show they understand this. Through Nagel a renewed focus on customer service and significant investment in infrastructure they are Deep-sea inter-modal shipper, Kuehne & Nagel, making up considerable ground on reliability. started a Felixstowe to Daventry rail service with Freightliner’s Logico division in 2005. Initially the service ran five days a week with For example, over the last few years, the rail 18 wagons. Kuehne & Nagel monitored the industry has put in place contingency plans to reliability of its rail freight service and decided minimise delays to services should an incident to increase the service frequency and amount occur. These include: to six days a week and 22 wagons. • Train drivers learning diversionary routes The success of the scheme has resulted in that they can operate over should there be Kuehne & Nagel claiming that box movements delays on their planned route by rail are now more reliable than road. According to Kuehne & Nagel, rail freight • Standby locomotives positioned movements are 95% on time whereas road strategically around the rail network to movements are 80-85%. assist any trains that break down “Rail is more reliable than road.” • Multi-skilled staff deployed around the clock, to enable a range of repairs to Peter Ulber, Chief Executive - Keuhne & Nagel be carried out quickly, outside planned maintenance schedules
24 Rail is not the only answer to congestion on the roads. Sainsbury’s wanted to test how water transport would compare to road transport in terms of reliability, due to difficulties it was experiencing from congestion in central London.
Case Study 10: Achieving CO2 Reduction and Avoiding Congestion in Central London - J Sainsbury’s Use River Transport
Sainsbury’s in 2007 completed a successful trial for consumer goods from its South Eastern Warehouse to one of its stores in central London. The use of a traditionally slow mode actually saw
lead time improvement over road haulage and helps towards their target of 25% CO2 reduction by 2012.
Such a trial as Sainsbury’s would often be overlooked by supply chain professionals who dismiss any transport by water, particularly inland waterways, not only as a slow and unreliable but also as one which is not predisposed to time-sensitive goods. However, organisational priorities are creating new opportunities for other modes and this is fuelling growth in the rail and water markets
Customer Service
It is undeniable that rail or water movements cannot fully match the flexibility of road transport. But if they are to form part of your supply chain you must maintain or improve the levels of customer service that you provide.
As with any logistics contract, individual customers can contractually specify key performance indicators. Royal Mail (see Case Study 12), for example, has very tight performance criteria, which include hitting time windows (arrival within 10 minutes of schedule) at various points in the network and not just at the final destination.
25 Case Study 11: Daily (7 Days a Week) Rail Freight
Business pressures to provide timely and efficient delivery of goods will continue to increase for the foreseeable future. Logistics companies working in conjunction with rail freight operating companies are now offering reliable daily freight services. In some cases these operate seven days a week.
In April 2004 DRS in conjunction with the Malcolm Group, Craibs and ASDA started a daily inter- modal service moving ambient grocery, general merchandise and clothing by rail from Grangemouth to Aberdeen. This service runs to a timetable with punctuality running at 94% (better than many passenger trains). The logistics company Craibs, then handles the forward movement of containers around Aberdeen.
Slow moving ambient food lines, clothing and general merchandise for the Scottish stores move up from the Midlands each night on a Daventry to Grangemouth train and ASDA is continually evaluating further opportunities for switching freight to rail, either long term or for specific seasonal flows.
Case Study 12: Royal Mail Chooses option which can be quickly deployed when Rail to Help Customer Service other networks are compromised. The use of rail in overall terms is always under scrutiny by Royal Mail owing to the need to be certain that The Royal Mail totally reconfigured its supply the additional cost of maintaining a rail option chain some years ago, and substantially is justified in quality terms. reduced its reliance on the rail network, citing both cost and performance as its reasons for so doing. Royal Mail did, however, want to keep a presence on rail and sought service providers on the open market. GB Railfreight was awarded the service between London, Warrington and Glasgow, initially for the Christmas peak, and then for a longer period. The rail contract was renewed with the service this time being awarded to DB Schenker. The rail network has proved its use especially on the West Coast Main Line long haul route and in times of high volume and as a contingency
26 Case Study 13: Cory Provides London road network, leading to a reduction in Excellent Service Levels for Local pollution, noise and traffic congestion. Authorities in London
Cory Environmental disposes of waste on behalf of the Western Riverside Waste Authority (which handles waste for the City of London, Westminster City Council and the London Borough of Tower Hamlets). Cory, the largest barge operator on the Thames, runs a daily service along the river Thames in London. The service enables 700,000 tonnes of waste per year to be transported along the River Thames to Essex and this has resulted in removing 100,000 lorry movements per year from the
Away from time-sensitive freight, the waterways, paths but generally they are still available on the can be a viable solution for the transportation of network. Improved planning, use and allocation waste and recyclable materials. of freight paths mean that rail can increasingly accommodate efficient logistics operations. Dedicated private sector FOCs are now well Access to Rail Network and established and a genuine open access market is Waterways beginning to emerge. The European Union is actively encouraging The rail network is almost entirely operated open access to the European rail network and by Network Rail with the exception of a few wants to see a growth in international rail freight. private sidings, terminals and preserved lines. DB Schenker has recently started additional, UK waterways have no central governing direct intermodal services between Mainland body but around half are managed by British Europe and the UK via the Channel Tunnel, for Waterways (a Government agency), a quarter example from Duisburg to Manchester and by the Environment Agency and the remainder Grangemouth. by around 30 other public, private or voluntary interests. Rail Freight Freeways
Rail Network In Europe ‘Freight Freeways’ are currently being created. The 2,500 kms freeway from the There are a number of aspects to consider when Netherlands to Italy will be covered at 50-60 km / wanting to access the rail network: h when it becomes operational, compared to 30- 40 km / h now. The ambition is to make freeways • Access to rail terminals into ‘one-stop-shops’, where an operator can purchase a single timetable slot from A to B even • Availability of train paths if the points are in different countries. The one- stop-shop approach also means that documents • ‘Track access payments’ where Network Rail only have to be shown once and paperwork is charges for the use of its infrastructure minimised. Freeways are also expected to mean the end of inspections at borders. • The gauge of the rail route you want to use The job of the one-stop-shops is: The increasing need for more passenger paths has put pressure on the availability of freight train • To market capacity for freight trains on international routes, partly via the Internet
27 • To react quickly to rail companies which Gauge Size want to use the freeway, especially by providing information on: Another factor that rail companies have to consider is the rail gauge required to move • Prices for the use of infrastructure in all different sizes of containers and wagons through countries concerned the rail network. The gauge reflects the width of the track, the clearance heights in bridges • Additional services available and tunnels, tight corners, station canopies and platform edges. • The current status of the trains The gauge has been categorised simply as a ‘W’ • Technical information on the rail lines followed by a number and in simple terms the and other facilities to be used lower the number, the smaller the gauge (see Appendix 4 and 5). are the best source of advise for route availability (RA) and gauge.
Case Study 14: Hutchison Ports demand. A new rail terminal is also planned at Benefit from Gauge Enhancement the Port. In December 2005, HPUK submitted an Hutchison Ports (HPUK) is a member of the Application for a Transport and Works Act Hutchison Port Holdings (HPH) Group, the Order to increase the capacity of the Felixstowe world’s leading port investor, developer and Branch Line and this will involve the dualling of operator, with interests in a total of 47 ports a 4.25 mile stretch of the existing single-track in 24 countries. In the UK, HPUK operates the branch line and 3 extra sidings at Ipswich. Port of Felixstowe, Thamesport and Harwich International Port. In parallel with these local rail improvements, HPUK is working closely with Network Rail to Over 40% of all UK import and export trade is fund gauge and capacity improvements to handled at the Port of Felixstowe, which is the the route between Ipswich and the East Coast UK’s largest container port. Of the containers Main Line, and its diversionary routes to South arriving at Felixstowe in 2007, onward Yorkshire. movement market share was as follows: road 59%, rail 23% and transhipment to other vessels 18%. The number of container trains The capacity enhancement would allow up from Felixstowe has risen significantly in recent to 40 freight trains per day to the Port of years, and the Port’s two rail terminals handle Felixstowe to achieve a rail modal share of 26%, 26 trains a day each way, operated by three thus taking 500,000 lorry movements off the FOCs. road per year. This equates to a 3% growth in rail freight each year. There has been a marked growth in trains since the gauge enhancements (to W10 gauge) at Ipswich Tunnel and on the West Coast Main Line were completed in 2004. This work enables the high-cube 9’6” boxes to reach their destinations on standard flat wagons.
The Port of Felixstowe commenced work to extend three of its lines at the South Rail Terminal in March 2008, and is buying two new rail-mounted gantry cranes with a view to boosting rail capacity to cater for increasing
28 Inland Waterways improvements and many companies are finding the service provided extremely reliable. Britain has a useful network of inland freight waterways and there is potential for this to be Most vessels are self-propelled but some barges used much more (see Appendix 3). Apart from are unpowered and require a tug to move them the perceived slow speed of the distribution flow to their destination. This is illustrated by Case (about 4mph) access to waterways has been an Study 15 which shows how rice loaded into a issue. Despite this, some of the inland waterways barge in the USA can access a river wharf in the have undergone considerable infrastructure UK without being handled again.
Case Study 15: Westmill Foods Dean then pushes two LASH (Lighter Aboard Operation Benefits from Flexible SHip) barges up the River Ouse. The barges are loaded for the return journey to the USA with Access export goods.
Around ten loaded barges are discharged Transport by barge gives a financial benefit every 12 to 14 days at a jetty in Immingham of approx £4 per Tonne of rice in comparison that have been transported across the Atlantic to road transport and allows handling of rice by a sea-going ‘mother’ ship. Of these, three via an automated process, compared to the full barges carry approximately 1,000 Tonnes bagged rice arriving in containers which has to of rice from the Mississippi region USA to the be handled manually. Transport by barge also Westmill Foods Mill in Selby. Each barge holds helps reduce congestion, relieving the town approx 380 Tonnes of rice and can remove and the site of two thirds of the road transport the need for 50 lorry trips per week in and out required to maintain supply at the mill. of the mill. A pusher tug operated by John
A common feature of freight operations is that Flexibility of Services if a customer does not require the movement of Offered freight on a certain day then that service can be cancelled or postponed. This is often done at very Both rail and water freight are often thought to short notice in the road freight market but it can be inflexible in terms of quantities carried and also be done in the rail and water industry too. the number of services that can be offered.
Case Study 16: The Tesco / Stobart closed due to a derailed passenger train. The Train freight train was able to be rerouted over a relatively convenient alternative route thus avoiding too much delay and extra expense. The Eddie Stobart service for Tesco between Daventry International Rail Freight Terminal and Grangemouth Rail Terminal uses a new environmentally friendly Class 66 locomotive and pulls 28 specially designed 45’ curtain- sided containers. The company could have specified 9’ 6” swap-bodies but decided on a lower 8’ 6” height specification, meaning that they can travel on most of the rail network in the UK (see Appendix 4 and 5). This flexibility chosen by the operator paid dividends only months after the service started when the regular West Coast Main Line route became
29 Volumes
There is a trend towards longer and heavier trains and where this is possible it makes good business sense to do so. Trains can carry anything from 100 Tonnes of express parcels to over 3,000 Tonnes of bulk commodities.
REMEMBER:
Increasing the size of wagons in order to carry larger quantities can provide good economies of scale but may mean that this restricts the routes that the trains can use. This may be because of the axle loadings or due to the physical size of the loaded rail wagons exceeding the permissible width (gauge).
In Case Study 16 Tesco was concerned when specifying the design of its train (operated by DB Schenker and Stobart), that it might be limited to lines that were able to carry maximum size wagons. Although a larger train can carry more volume, it could get ‘stuck’ more easily if there were to be a problem on the normal route.
As a result, some operators decide to use smaller wagons that would be able to re-route over most of the rail network. This compromise on size of wagon increases the likelihood of supply chain resilience.
Case Study 17: Corus Steel (now Tata)
Following the inbound movement of rice from the USA on an ocean-going mother ship in Case Study 15, empty LASH barges are either reloaded in Immingham with engineering steel products from Tata at Rotherham and special profiles from Tata Skinningrove, or taken to Hull for loading at an undercover terminal with wire rod in coil from Tata at Scunthorpe. All of these steel products are bound for Mississippi upriver destinations in the USA.
Although aggregates, grain and petroleum products are the commodities most frequently carried by barge, this steel traffic demonstrates that barges are not restricted to carrying bulk cargoes. The main advantage of the LASH barge system is found in the USA, where deliveries to customers hundreds of miles inland can be made without transhipping or further handling at New Orleans.
In addition, Tata has a direct loading facility at its Rotherham site, Thrybergh Wharf, developed about three years ago, which is used for steel exports by barge to Goole and potentially Immingham.
Case Study 18: Mendip Rail Choose Longer and Heavier Trains
Mendip Rail runs six ‘jumbo-trains’ each day carrying limestone from Merehead and Whatley Quarries in Somerset for use in the London and south-east construction industry. The trains convey up to 44 x 102 Tonne gross weight wagons representing a payload of 3,300 tonnes, and are the heaviest freight trains in the UK. They run from Somerset to Acton in West London, where they split with portions going forward to a number of different railheads. The ability to move these tonnages with one driver on each train compares favourably to the equivalent use of over 100 road journeys, bringing significant operational efficiencies and environmental benefits.
30 Case Study 19: Abnormal Loads - Last Journey of Concorde
Concorde was able to be transported from London to Scotland via the River Thames and North Sea. The vessel used at 80 metres long and 6.5 metres wide, was loaded at Isleworth with the aircraft and floated down the Thames past the Houses of Parliament before travelling up into the North Sea. If the aircraft had been transported by road, it would have had to be cut into smaller sections, with a longer period of time for restoration needed, once it reached its destination.
Studies in this guide show Tata as the largest user Commodity Type of rail freight and Lafarge as the largest user of water freight in the UK. Sectors moving heavier commodities such as aggregates, coal and steel have often kept Despite the two biggest users of rail and their traditional association with rail and water waterways moving bulk products there are transport. The Freight Route Utilisation Strategy significant opportunities for most commodities published by Network Rail in 2007 states that to move by rail or water, as illustrated by the case coal, metals and construction account for 82% studies throughout this guide and the mode of tonnes lifted and 60% of rail freight moved suitability assessment table. (tonnes per kilometres). Petroleum constitutes 7% of tonnes lifted and 6% of freight moved. Similarly, water freight has tended to be used for the movement of bulky commodities. Case
Case Study 20: Bulk Movements Tata is the largest user of rail freight in the UK and the Scunthorpe steel plant receives 9 The rail network in North Lincolnshire centres million tonnes of raw material annually from on a rail line which stretches from Cleethorpes Immingham, 6.5 million tonnes of iron ore and through Scunthorpe to Doncaster. The vast 2.5 million tonnes of coal. majority of movements are freight trains and over 25% of all the rail freight moving in the The construction of Humber International UK runs on this route. About 330 freight trains Terminal 2 at ABP’s Port of Immingham saw a each week depart from the Immingham area large investment resulting in faster and more and of these, over 150 consist of coal for the flexible rail movements in and out of the power generators and around 100 serve the port. In addition, a rapid loading system was steel works at Scunthorpe. Of the rest, 33 are constructed which is able to load 23 -wagon oil trains from two oil refineries and 28 trains trains with approximately 1,500 tonnes of coal are wagon load trains including containers. in just 23 minutes. The speed of the process means that, every week, this facility now regularly handles over 100 trains.
31 Distances Case Study 22: Short Distance Journey distance has a bearing on the relative Water Freight Movements costs of different modes of transport. Part of the reason for this is that rail and water have higher KD Marine handles grain movements on levels of fixed costs than variable costs, which the Manchester Ship Canal, which is owned tends to mean that the additional variable cost of by Peel Holdings. The grain travels from the going an extra mile by rail or water is much lower terminal at Seaforth, Liverpool, and travels once the costs of loading on and off the train or to flour mills in central Manchester. Two barge has been paid. However, bulk traffic flows vessels are currently working on this service can be economic over a very short distance, often which runs a distance of just over 35 miles of less than 10 miles. in each direction. The vessels carry between 700 and 1,000 tonnes of grain on each It is estimated that for non-bulk rail to break movement which saves around 26 lorry even against road transport it must travel at least trips per day. 200 miles, and of the 850 million tonnes that is transported on the roads, around 17% moves this distance or more. That being the case, around 150 million tonnes could in theory, be moved onto rail which would increase the tonnage moved by rail by nearly 200%
Case Study 21: Short Distance Train Movements
The Malcolm Group launched a daily inter-modal service in November 2004 between Grangemouth and Elderslie near Paisley. This train is significant in that it is a journey of just 41 miles each way, a distance not usually economic for rail. Due to the unreliability of journey times on the road systems around Glasgow, the reliability of rail has made the service a success. This service is efficient because it makes use of rolling stock that has already made an Anglo-Scottish journey earlier in the day and would otherwise have been standing in a siding.
Further examples of short distance movements by rail include: Immingham-Selby (paper), Powderhall-Oxwellmains (domestic waste), Cliffe-Battersea (aggregates), Boulby-Tees Dock/Middlesbrough (potash/rock salt), Hope-DDB Schenkerbury/Weaste (cement).
32 5 Co-modal Case Studies
As demonstrated throughout this guide none of the benefits of modal shift can be taken individually nor is it likely that one company’s blueprint for modal shift is the same for another. Successful multi-modal operations stem from correctly identifying the set of circumstances affecting your company.
This chapter demonstrates the effective use of rail or water in conjunction with road haulage as part of a total supply chain. The use of other modes has brought each company featured a variety of different benefits and operational flexibility. The following case studies have been put into four distinct groups of companies: logistics service providers, retailers, bulk commodity movers and container movers.
Logistics Service Providers
Multi-modal logistics service providers offer a variety of services to companies wishing to transport goods and are especially useful when considering multi-modal distribution, as they have much expertise in different modes and can manage the whole process for you. Both of the following case studies illustrate well established logistics providers which are offering integrated multi-modal solutions in a competitive market.
Case Study 23: Logistics Service Providers - The Malcolm Group
The Malcolm Group, best known for its warehousing and road haulage fleet, decided to add a new dimension to its logistics services. In 2001 it started operating express rail freight services in conjunction with Direct Rail Services (DRS) between Scotland and its South Midlands base at Crick (Daventry International Rail Freight Terminal). Malcolms run regular timetabled services that offer customers flexible load configurations for a variety of goods including food and drink, glass and paper.
Malcolms saw the benefits of a rail trunking operation as part of the supply chain and offers rail connected warehousing. It uses a diverse range of equipment for efficient loading / unloading of containers and inter-modal equipment and has covered areas for the handling of high capacity freight wagons. From small beginnings of just two trains a week, in just six years the company now runs 58 train services. These services complement the total logistics package the company is able to offer its customers.
Case Study 24: Rail and Water as Part of a Supply Chain - John G Russell (Transport) Ltd
Russell’s investigated the possibilities of introducing rail and water freight into its supply chain where these modes of transport offer service advantages. Russell’s started in rail in the late 1970s, and by 1984 was contracting daily full trains using conventional rail vans. In 1998 it started an inter-modal rail service between Daventry and Central Scotland bringing together goods belonging to a number of different customers into economic trainloads. Russell’s has carried a range of commodities including household items, ambient food and drink and has back-loaded Scottish products to the Midlands terminal. “In 1998 Retailers didn’t have rail as part of their supply chain but by 2007 we have seen a large swing and a number of retailers are now actively using rail and the indications are that this use of rail will grow.”
Ken Russell, John G Russell (Transport) Ltd
33 Retailers Case Study 26: ASDA Saves Road In recent years a number of retailers have begun Miles by Using Coastal Shipping to use rail and water as part of their logistics strategy. Many have found that these trials have In addition to ASDA’s train service, ASDA showed improvements in a number of areas looked to coastal shipping following including cost, service level and reliability. research into the movement of goods destined for its northern consumers. ASDA ASDA has used rail since 2001 and water since found that lead times involved in the road 2006. The environmental benefits that ASDA has collection of containers from the realised from both its rail and water services are south-east ports was not only affecting significant and are examples of the possibilities customer service but also the availability that multi-modal operations provide in the UK. of general-merchandise lines. As a result, ASDA opened its Import Deconsolidation Centre in March 2006 at Teesport. Case Study 25: ASDA Operates Several Rail Services ASDA’s decision to establish a base at Teesport was aided by PD Ports’ plans to develop the Northern Gateway Container ASDA transports groceries, general Terminal (NGCT) - a £300 million deep- merchandise and clothing products from sea container terminal. This development distribution centres in the Midlands to helped to reduce the lead times for ASDA stores in Scotland. The daily rail service has by enabling deep-sea vessels to call direct saved more than 22 million road miles since to Teesport rather than by transhipment it was launched in 2001. from southern UK ports. Switching more of its freight to rail has ASDA was able to improve its customer helped ASDA reduce the overall number of service, have a more direct route for road miles travelled by its fleet transport by products, and reduce lorry miles in the UK, over 20% since January 2005. ASDA is on and now 70% of ASDA’s non-food imports course to reduce the amount of carbon it go directly to the north by sea, rather than produces by 40% by the end of 2010. by road from Felixstowe, saving more than 1.5 million road miles each year. The ASDA train started running from the Lutterworth, Corby and Brackmills depots in 2001 via the rail terminal at Daventry to a terminal in Grangemouth, adjacent to the retailer’s Scottish Distribution Centre. Since then ASDA has sent an average of 26 containers per day north (totalling 30,000 containers).
In 2004 the supermarket also began running a daily train from Grangemouth to stores in the Aberdeen area, saving a further 2 million road miles.
34 Case Study 27: Tesco’s Moves Goods by Rail
The £3.2 million project moves non-food products daily from the Midlands to its main Scottish distribution centre in Livingston, saving an estimated 4.5 million road miles and around 6,000
tonnes of CO2 a year.
Two new state-of-the-art ‘green trains’ have been specially imported from Canada to make sure the goods are transported in the most environmentally friendly way possible. The trains have also been designed to reduce noise and vibration. The wagons are curtain sided swap bodies and as already described in this guide are only 8’6” high thus enabling them to travel over a greater proportion of the rail network (see Appendix 4 and 5.)
Case Study 28: Tesco’s Wine by Barge
Tesco’s use of waterways to ferry wine by barge from Liverpool to Manchester cut carbon emissions by 80%. It also, removed 50 lorries off the road every week.
The new cargo service started in October 2007 and involves three journeys a week, delivering an estimated 600,000 litres of wine on each journey along the 40-mile stretch of the canal. The containers of wine from Australia, California, Chile and Argentina are then transported by road to a bottling site less than half a mile away where it is bottled and packed for supermarkets across the country.
Bulk Commodities
Bulk commodities have often been seen to be the most suited to rail and water modes. The economies of scale over longer distances, the increased weight capability and the ability to transport a greater volume in one journey all suit the rail and water markets.
Tata has a turnover of £10 billion and employs 47,000 employees. It uses multi-modal rail / road distribution within the UK with hubs at Bristol, Brierley Hill and Wolverhampton and is a heavy user of water freight from its sites in Rotherham, Teesside and Port Talbot. Tata typically transports bulk materials either in ore, coal, steel bar, ingot or bloom. Such products are particularly suited to the use of rail and water due to their relatively high weight and volumes. Case studies 29 and 30 detail Tata’s use of rail and water for its steel products.
35 Case Study 29: Corus (now Tata) - • EMR Northampton Steel by Rail • Crossley Evans
Tata is significantly served by rail for both • BK (Newcastle) inbound and outbound flows, particularly for transportation of raw materials within the There are some other interesting rail UK (with traction provided by DB Schenker). movements including: For example, the Scunthorpe site receives 9m tonnes of raw material annually from the Port • 300,000 Tonnes per year of steel bloom of Immingham by rail (6.5m tonnes of iron ore from Scunthorpe to France via the and 2.5m tonnes of coal) with the inbound Channel Tunnel (one train per day) and outbound flows moved around the site on 105 miles of internal track by Tata’ own • 250,000 Tonnes per year of steel slab locomotives (In fact, the predominant mode of from Scunthorpe / Teesside to Dalzell transportation within each of Tata’s integrated (Motherwell, Scotland) steel plants is internal rail systems). • 350,000 Tonnes per year of steel bloom Tata Rotherham receives six trains of scrap from Scunthorpe to Skinningrove steel per week. This consists of 1.4m tonnes of • scrap of varying grades and 1m tonnes of rod 150,000 Tonnes per year of steel and rail annually. Inbound steel is gathered bloom and billet from Scunthorpe to from a variety of sources, and the following Rotherham companies have invested in their own rail • Over 1 million tonnes per year of steel head for Tata’ purposes: slab movement from Port Talbot to Llanwern • TS Thompsons Tata’s relationship with the FOCs coupled with • Tyne Dock the demands of its industry has at times seen outbound material sent seven days per week • Smethwick by rail.
Case Study 30: Tata Uses Water One of the issues facing Tata along with Freight for Steel Movements other users of inland waterways is the width restriction on some of Britain’s inland waterways. The navigation serving Tata uses deep sea vessels directly serving both the Teeside and Port Talbot works. Rotherham can only handle vessels of 300 They also bring a lot of raw materials into tonnes because of the width of a lock. Immingham. As well as this Tata exports a lot However, steel is handled at river wharves, for of steel through a number of ports including example, on the River Trent at Flixborough specialist steel-handling terminals. and on the River Humber at Goole which is the most inland port in the country. Tata does make significant use of inland waterways in mainland Europe and its long- term strategy is to transport more volume along Europe’s inland waterways. It recently built a wharf at Thrybergh near Rotherham which benefits from an internal crane, and, when the market situation is right, loads have been, and could again be sent by water to Goole and beyond.
36 Container Operations
There are a number of logistics operators that just move containers and will often use direct movements from ports by road, rail or coastal feeder vessel.
Roadways Container Logistics has used a mix of trains and lorries to optimise its service whilst maintaining flexibility. Its use of regional terminals has provided an efficient supply chain and an opportunity to utilise hub and spoke operations but with rail as the inter-hub leg.
Case Study 31: Roadways region’s motorway network with capacity to Container Logistics Limited handle up to eight trains each day into a fast-expanding commercial area. Roadways Container Logistics (RCL) is one RCL’s standard service objective is to deliver of the UK’s leading container transport within 15 minutes of a stated time. Achieving companies. Its national network comprises this target, considering the high container three rail-linked inland terminals aligned with volumes involved, clearly relies on a well depots servicing the major southern container defined network and developed expertise. ports of Southampton, Felixstowe, Tilbury and Thamesport. With a fleet approaching 600 vehicles (including dedicated subcontractors), the company also operates an extensive fleet of modern trailers as well as container lifting equipment.
Roadways uses a ‘hub and spoke’ distribution system. The clear advantage with this method is use of an environmentally friendly mode for the long haul (rail), which can be dovetailed with the ‘time sensitive’ local haul (road) to achieve flexible short distance container placements.
Birmingham Inter-modal Freight Terminal (BIFT), the company’s relatively new Midlands terminal, typifies this approach. BIFT is a modern rail terminal, well located close to the
A number of operators are providing container services by short-sea feeder vessels and coastal shipping. The companies offer links between mainland European ports and the UK and / or domestic services between two or more UK ports. The operators involved are either divisions of larger deep-sea lines or smaller niche market carriers, and examples include BG Freight Line, K-Line, Feederlink, Unifeeder, OOCL and the Mediterranean Shipping Company and two of these are featured overleaf.
37 Case Study 32: OOCL Offers Feeder Services
This is an example of a deep-sea line offering an end-to-end service for customers. OOCL was one of the first Main Line Operators to offer their customers in-house feeder services rather than the third-party services which tended to dominate the market.
In February 2002 OOCL added a Grangemouth call to its service which linked the UK and Continent to the Baltic. Owing to growing volumes the service is very much ‘stand alone’ linking Grangemouth with the OOCL main UK hub at Southampton and on the northbound leg calling at Hull prior to returning to Grangemouth. In Greenock OOCL has a ‘slot-sharing’ arrangement with another line (X-Press) which makes a weekly call at Greenock. They also stop at Southampton, Dublin and Belfast.
‘Slot-sharing’ is used by a number of shipping lines where space is booked on ships belonging to other lines and this allows customers a greater frequency of service than would otherwise be the case.
Case Study 33: K-Line Short Sea Shipping
An example of a smaller, but effective operation is K-Line that runs two ships on a multi-port service which calls at Rotterdam, Felixstowe, Teeside, Aarhus, Rotterdam, Bilbao and Leixoes in Portugal. This coastal ship route has flows of wine, paper, whiskey, textiles and retail goods for supermarkets.
38 6 How to Make the Modal Switch
Figure 3, below shows the seven main tasks you will need to conduct in order to make an informed choice as to whether you should or can change mode to help improve your operations.
Figure 3 The 7 Practical Steps of Modal Change
A. Assess Suitability Assess Suitability Before you do anything else, you need to understand how the product that you wish to move can be moved using multi-modal operations. Find Partners Essentially you need to investigate the following areas: Feasibility • Product features (volume, tonnage, dimensions) Grants • Bulk product loading method (unitised, palletised, loose) Business Case • Frequency of despatch
• Operational days and timings Review • Source and destination
Operate
Appoint a Project Manager / Champion
After doing some initial thinking about your current operation you may want to consider appointing a project manager to take on your potential modal-shift project. Of course, whether this is a full-time post or whether it is an element of someone’s current job will depend on the size of the operation and how complicated the change might be. Whether a full-time or part-time role, whoever is appointed should have the authority to drive the change forward within the organisation, but also have the personal qualities to communicate the benefits at all levels.
For more information on introducing change, obtain a free copy of the publication Saving Fuel Through People available via the website at www.businesslink.gov.uk/freightbestpractice
39 B. Find Partners and an C. Feasibility Study
Operator A feasibility study draws together all of the information gathered so far and pits your It is at this point that you should seek those requirements against the possibilities. This phase contacts within the industry that can provide of project implementation can be either wholly you with advice to check and analyse your outsourced to a consultant, or done in-house assumptions and add to your findings with with external support. The following lists the specialist advice (see Appendix 2). advantages of each method.
You need reliable, responsive logistics providers Whichever method you choose the feasibility that offer cost-effective services. Across the study should include: sector there will be differences in level of service and experience and therefore a body that can • Confirmation of the service details give independent, objective advice is highly (volumes, timings, loading methods, recommended. frequency, special handling characteristics etc) Rail Freight Operators • The types of rolling stock / vessels to be The rail freight industry is a competitive sector used which is customer focused and now offers potential clients a real choice. The two original • Explanation of the tariffs companies that emerged following privatisation have altered their businesses to address the • Assessment of the operator / shipper’s new competitive industry. For example, DB competence and experience Schenker has three customer focused sectors and Freightliner has two separate businesses called • Indicative costs Heavy Haul and Inter-modal which includes a division called Logico for container bookings. • Contingency plans should the service fail The Rail Freight Group website is a useful point of reference for potential operators. (see Appendix 2). Selecting a Service Package The easiest way to obtain rail or water freight Water Freight Operators services is to buy the package through an FOC, shipping line, freight forwarder or other third- The water freight industry is far more fragmented party logistics company. All can offer you a than the rail industry, with a large number of range of options, from a stand-alone service smaller operators which are generally more that collects from one terminal and delivers regionally focused in their operations. The it to another, through to a complete package www.freightbywaterdatabase.org website that might include transport, terminal facilities, gives information on water freight barge road collection and delivery and appropriate operators coastal shipping lines and much more. documentation.
The British Waterways’ website holds the contact Identifying Terminals / Wharves details of regional offices as well as its Head Office in Watford (see Appendix 2). Having determined the volume of traffic likely to be shipped, the next step is to determine the best location. The options available are:
40 • Use the nearest terminal(s) at each end Interactive Multi-modal Map - these may or may not have the right facilities on site to handle or store the The online, interactive Multi Modal Map was traffic. If not, the customer will need to developed for the Freight Best Practice website explore with the terminal operator whether showing the location of all open user, UK based: facilities can be provided within time or budget constraints. Grants may be available • Rail Terminals to offset the costs of installing these facilities (see page 28) • Rail Connected Ports • Use the nearest terminal(s) with the right • Sea Ports facilities - this may be more distant than the first option. The additional road • River Ports haulage costs at each end will need to be considered against any savings in Clicking on each interactive symbol on the investment in facilities that might have map displays the address and contact details been incurred in the first option for the site along with a brief explanation of the commodities that can be handled by the • Develop a dedicated terminal(s) at either terminals. The Multi Modal Map also contains a / both ends - if a direct link is possible CO calculator that compares the CO emissions at either the ultimate origin and / or 2 2 or road, rail and water freight. The screenshot destination for the service, this option shows the CO calculator. should be explored to determine the likely 2 investment and lead time, and potential The interactive Multi Modal Map can be accessed grant availability. In some cases, there may at www.multimodalmap.org.uk be scope for relocating from an existing site to an alternative rail / water-linked site, to remove the road haulage that would otherwise be required
41 Timetable and Tide Tunnel, with loads being consolidated by the freight operating company. The advantages Rail include set timings between major inter- modal hubs, leading to good reliability. Recent The National Rail Timetable (NRT) is one of the developments have seen major shipping lines most important and complex components of take a greater interest in rail, procuring their own the railway system, co-ordinating thousands of services on a haulage-only basis and selling any train movements per day across the network. spare capacity to others. Depending on the volume and pattern of demand, freight trains may only operate ‘as Scheduled Less than Trainload Network required’, and / or may operate between different Services terminals. The flexibility of this type of service means it Coastal Water and Inland Waterways can accommodate a variety of traffic types, connecting a wide range of different terminals, Coastal water freight is constrained by tidal including those in Europe. Outside the core movements. This does not create the same network there are limitations on the suitability of barriers as ‘slots’ in a rail network but is crucial to the service for inter-modal containers, especially timing of delivery and pick-up. Inland waterway 9’6” containers (see Appendix 4 and 5). movements are affected by lock opening times and tidal rivers. International Services
Day-to-day Operation The Ro-Ro and Lo-Lo (Lift-on-Lift-off) shipping services between the UK and Europe are well established. Since the opening of the Channel Customers are advised to discuss contingency Tunnel in 1994, there has been a significant plans with their service provider, allowing for number of HGVs using ‘Le Shuttle’ service scheduled maintenance and for dealing with but as yet the volumes between the UK and incidents when services may be unable to run. Europe via the tunnel have not reached original This may involve agreement to alter schedules on targets. Establishing European supply chains specific days to avoid planned maintenance, or using high capacity freight wagons on Channel to provide stand-by road haulage via local call-off Tunnel services could prove to be a cost- agreements, to keep traffic moving. effective solution for trunk movements into UK distribution centres. Services Identifying Wagons, Loads and Services can be configured to meet the needs of any customer but they are broadly split into four Vessels types: Matching your commodity to the right rail wagon Single Customer Dedicated Services (usually on vessel is crucial to an efficient transport full load volumes) operation.
The one-to-one relationship between customer The Choice of Rail Wagons and service provider allows for flexibility in service and the optimisation of routing and There is a wide range of modern railway wagons timings. Hauling similar products on single routes available to suit most traffic requirements. The allows for the development of more suitable decision on the type to be used will depend on equipment to better facilitate loading and the freight to be carried, the length of contract unloading. envisaged, and the relative costs. In some cases, a bespoke design may be required for Scheduled Inter-modal Services specialised traffic, however, lead times for non- standard designs can be significant for design, construction and technical approval. These typically serve the ports and the Channel
42 Conventional wagons are normally designed for a specific purpose or traffic type, such as D. Grants hopper wagons for coal or aggregates, tankers for petrochemicals and covered van wagons for Grants are available where significant palletised traffic. environmental savings can be achieved through the use of alternative transport modes and where the cost of road freight is less than rail or water. Inter-modal wagons are designed to carry various They are designed by the Government to ‘buy’ units (e.g. containers, swap bodies) which may environmental benefits through modal shift require a low freight flat deck or a ‘pocket’ wagon and can help you establish a more sustainable with a dropped deck. solution (one that maximises benefits for the economy, society and the environment) which Conventional wagons tend to offer the best allows each mode to reach its full potential. payload, but inter-modal wagons tend to offer a better match on height and width to road trailers The Sustainable Distribution Fund is the main and only standard equipment is required to load source of grant funding and offers direct grants and unload them. to encourage modal shift from road to rail or water freight. There are various websites that can be visited to find more information on the types of rail wagon, and here is an example of a link to the rail wagon page from the website of one of the Case Study 34: Days Aggregates Freight Operating companies. It does not cover all of the types of wagon that operate on the UK Days Aggregates operates a number of network but provides a photographic illustration terminals in the London area catering for of some. http://www.freightliner.co.uk/default. the construction industry including one aspx?PageID=106 of the few active tri-modal terminals that offers a choice of road, rail and water. The Choice of Water Vessels company actively seeks to use sustainable means of transport to bring the bulky commodities from source to a terminal near The choice of water vessels is based on the to their point of use. width, the depth (draft) and commodity type. For inland waterways the restrictive nature of many canals requires the use of 300 Tonne barges, Days received a Government grant in whereas transport on major estuaries such as the 2001 towards the cost of mobile handling Thames, Severn, Humber and major man-made equipment. More recently a £1million navigations such as the Manchester Ship Canal, grant given to Days Aggregates from the Aire and the Calder allow the use of 750 the Aggregates Levy Sustainability Fund Tonne barges. Currently, the majority of inland managed by Department for Environment, waterway freight is to be found on the latter Food and Rural Affairs (DEFRA) has because of the economies of scale that can be delivered £11 million of environmental achieved. benefits in removing lorry journeys from the busy streets of London. This 11:1 ratio has mainly resulted from reductions in Typical types of barge include tankers and bulk congestion and improved air quality. carriers which cater for bulk liquids and dry bulk respectively. Coastal ship types include bulk carriers from 1,000 Tonnes upwards, and container feeder vessels from 200 TEUs.
There are various places to look for descriptions and more information on vessels. Visit the following website for diagrams and specifications of different vessel types and much more: http://www.inlandnavigation.org
43 Freight Grants - April 2011 Case Study 35: Lafarge Following the Comprehensive Spending Review Aggregates (CSR), the Department for Transport (DfT) closed the Freight Facilities Grant scheme in England Lafarge Aggregates Ltd is one of the UK’s in January 2011. Whilst the scheme has closed largest producers of construction materials, to new applicants, DfT continues to monitor meeting around 10% of the UK’s demand the performance of past schemes, with a view for aggregates. to ensuring the benefits as anticipated at the time of applying are delivered. For the current Employing over 2,000 people at 200 sites status of the scheme in Scotland and Wales, it across the UK, the company produces is advisable to contact the relevant devolved around 20 million tonnes of aggregate per administration. year.
Although the FFG scheme has closed, the DfT The company takes its environmental continues to support modal shift through its two responsibility very seriously and operating grant schemes. These are designed continuously works to improve its to facilitate the purchase of environmental and environmental performance in areas such wider social benefits that result from using rail or as: water transport instead of road. These schemes are: • Quarry restoration
• Mode Shift Revenue Support (MSRS) • Recycling energy efficiency scheme: assists companies with the operating costs associated with running • Alternative transport solutions rail or inland waterway freight transport instead of road (where rail is more Each year the company transports around expensive than road); and 200,000 Tonnes of processed sand and gravel by barge over 130 km from the • Waterborne Freight Grant scheme (WFG): Newark area via the Rivers Trent, Ouse and assists companies with the operating the Aire & Calder Navigation to Leeds. The costs, for up to three years, associated company accounts for approximately 20% with running coastal or short sea shipping of the total aggregate tonnage carried on freight services, where water transportation inland waterways in England. is more expensive than road. Lafarge began shipping aggregates In England DfT has secured a budget for these to Whitwood Wharf, West Yorkshire, operational grants of £20m for 2011-12, £19m for in 2004 after receiving a £2.3 million 2012-13, with a further indicative £19m for both Freight Facilities Grant. This was used 2013-14 and 2014-15. for the redevelopment of the Wharf and the construction of loading facilities at Besthorpe. Delivering the material produced from two of its quarries by Applications for the DfT’s freight grant barge instead of road, Lafarge is able to schemes are prioritised in a bid round remove around 25,000 lorry movements process. Further details on bid rounds and each year from the local road network, how to apply, plus details of those bids that which, in addition to reducing traffic have previously been successful please see congestion, helps to reduce their transport’s DfT’s rail or water freight grant webpages environmental impact.
44 It is possible to receive a grant so long as there is The Environmental Benefit Calculator sufficient environmental benefit to justify them can currently be found at http://www. and the DfT website contains full details of each transportdirect.info/web2/journeyplanning/ scheme. In addition, potential applicants can use FindEBCInput.aspx?&repeatingloop=Y an online calculator that works out the value of and can help you to calculate the value of an the environmental benefits that can be gained by individual journey, which will greatly aid your transferring a particular freight flow from road grant applications. to rail. Which Grant Applications Will be Successful?
Bids for grants will be ranked by value for money For the most up-to-date information on grants and environmental benefits. The higher the please visit the DfT website at the following benefits / cost ratio (BCR) the more likely the addresses: scheme will be allocated funding.
Rail Freight Grants: The following advice is suggested when applying: www.dft.gov.uk/pgr/freight/railfreight/rfg/ • Approach the DfT early on in the process to Water Freight Grants: determine eligibility
www.dft.gov.uk/pgr/freight/waterfreight/ • Ensure all information supplied is current grants/ and up to date
For advice on the availability of freight grants • Ensure there are no existing services in Scotland, Wales and Northern Ireland, please providing similar modal shift facilities i.e. see the following websites. you are not going to take loads that are already being moved by water or rail www.scotland.gov.uk or www.wales.gov.uk or www.northernireland.gov.uk • Allow time for the DfT to assess grant applications, in certain cases this could take up to six months How Are Grant Applications • Ensure that your research is correct and Judged? realistic Environmental Benefits
Monetary values are used as a means of quantifying the benefit of shifting freight from road to rail or water. These values are used in the calculations of all three grants and they are designed to reflect the environmental benefits to be gained.
Benefit Calculator
An Environmental benefit calculator provides a quick assessment of the environmental benefits to be made when a freight operator proposes to switch to a different mode and remove lorries from the road.
45 Where Grant Applications Fail costs and benefits but also the expected volume of freight, the routes that it will take and the Grant applications fail when the feasibility study commodity that will be moved, will help the DfT has not been sufficiently robust. Common areas and its independent consultants to process your of failure are: application.
• Planning and other consents not in place There is no need to hold back what you might consider commercially sensitive information • Unrealistic assumptions about volume and as all applications are treated in the strictest growth confidence.
• Insufficient detail on aspects such as project When constructing your Business Case you management, procurement, cost control should aim to produce a document that is: and timescales • Consistent - Internal company documents • Road alternative not fully evaluated (e.g. will be set to specific guidelines and criteria capital cost of road option omitted) but when these documents are included as part of a grant application then their format • The plant and equipment proposed were must conform to the grant application not suitably geared to the traffic in question guidelines (FFG only) • Business Oriented - Often, concerns the DfT • In the case of WFG and MSRS if the volume might have relate to marketing and finance, of traffic in your application is not achieved so the Business Case cannot afford to have the DfT may reduce the amount of grant a solely technical bias you receive • Understandable - The contents of the Details of how to conduct a bid can be found Business Case must be clear and concise on the DfT website. It is good practice to allow a and written in such a way as to aid third party to review your submission which will understanding. Always get a third party provide a ‘common-sense’ check and highlight to read your submission with ‘fresh eyes’ unclear areas and obvious omissions. Where a bid before you submit it is not made in-house (i.e. through a consultant) it is critical to maintain good communication with, • Measurable - All key aspects and tasks and if necessary provide staff resource for, the involved should be quantifiable so future consultant to help develop the best bid possible. progress in the new operation can be tracked and measured. This will enable the Government to track the success of its E. Business Case investment
A Business Case is where your aspirations meet • Accountable - Accountability for the practicality and profitability. It can be used in delivery of benefits and the management the first instance as an aid to researching the of costs should be clearly set out as they proposed modal shift, weighing up options, will be checked and audited at a later date detailing costs and service levels, etc, but it will by DfT’s consultants go on to become a key document for successfully obtaining grant funding. In theory your application form will probably set out all the information that is required by the DfT (and the DfT will contact you with any reservations it might have about your application). The production of a clear, concise ‘stand-alone’ document setting out not only the
46 F. Review Comments As the Business Case is formulated it will soon This guide has been written as an introductory become apparent that there are cost-benefit guide to rail freight, short-sea shipping and trade-offs to be had in terms of the equipment, inland waterways. It has tried to provide some volume and load. The principles of efficient discussion on some of the main factors that need supply chains are as applicable in the rail and investigation when considering using any of water freight industries as they are in road these modes of transport. It has used illustrations haulage. Every empty space on a vessel or train from many companies that are using rail or water decreases your profitability just as a failure to freight as part of the supply chain. However react to changing customer requirements may there is no substitute to researching how lead to termination of your contract. these modes could positively impact on your business. Appendix 2 features a list of a number It is important therefore, to ensure a of organisations that can provide you with much comprehensive review system is in place and more information on how to progress. relevant KPIs are established so that they will help you to understand how you are performing if the proposed service starts to operate.
G. Operate
If your grant is approved, the final stage of the process is to start putting your plans into operation. As with all supply chain initiatives improvements in the level of service come as a result of good communication between customer and service provider. Each has to understand the other, from the provision of appropriate wagons / vessels to the importance of presenting a loaded train / vessel to the rail and water network in time to meet a booked slot or sailing.
In order to do this efficiently a freight operator operating in a multi-modal environment requires specific rail or water knowledge to handle operational problems. However, you cannot rely on one person alone and must ensure that knowledge is shared so that potential problems can be overcome on any mode by all members of the management team. This requirement for multi-modal familiarisation is best addressed by building it into the recruitment and training process.
47 LASH (Lighter Aboard SHip) Barge - A type of Appendix 1 barge that can be carried within a mother ship for cross ocean journeys and then be propelled by a Glossary of Terms tug up a river or waterway. Loading Gauge (gauge sizes) - The UK rail Break Bulk - Taking a large consignment and network was not built to a uniform size. Although splitting it into smaller amounts for onward the width of the track is the same, the levels of delivery. clearance under bridges, station canopies, in tunnels and next to station platforms are not. The Containers - There are 4 different lengths of smallest gauge is described as W6 and in general container in the general market place, 20ft, 30ft, the higher the number, the bigger the gauge. 40ft and 45ft long. The height of the boxes varies The gauge becomes an issue when needing to from 8 feet 6 inches (2.6m) to 9 feet 6 inches (3m). move high cube boxes as in general at least W9 is 9’6” boxes are sometimes described as ‘high cube’, required unless special rail wagons are used. as they have greater volumetric carrying capacity. These are becoming more common. Container Multi-modal - More than one mode of transport width is fairly standard at about 8 feet 4 inches being used for a given journey. (2.5m). with some at 2.55m Short Sea Shipping - Shipping that moves a Container Stuffing - The loading of containers relatively short distance, for example, between often by hand or by specialised fork-lifts. The mainland Europe and the UK. This is generally a use of dunnage (packing material designed door-to-door movement as compared to feeders to minimise movement in transit) is of great which are generally port-to-port. Short Sea importance. shipping includes both Roll-on-Roll-off (Ro-Ro) trailers and Lift-on-Lift-off (Lo-Lo) containers. Feeder Services - Deep sea ships that move intercontinental containers are expensive to Swap Bodies - These typically are trailers that can operate and tend to only serve a small number be lifted off a road-going vehicle and transported of very large ports in Europe. A proportion of the by rail or water. They are often but not exclusively containers are transhipped at these large ‘hub curtain-sided and secured in place through the ports’ and placed on smaller vessels for onward use of twist-locks. movement to smaller regional ports. These regional feeder services ‘feed’ the hinterland with Tonnes Lifted - This figure reports the number goods and also ‘feed’ the deep sea ships with of tonnes physically moved and therefore is an return loads. indicator of business activity. This enables a year on year analysis of the volume of goods being FOC - Freight Operating Company in the rail moved by the different modes of transport. sector that provides traction, wagons and much more to potential customers. Tonnes per Kilometre - This figure is the product of the tonnage multiplied by the distance it Groupage - Combining orders from several moves. This shows changes in the geographical different sources or customers into efficient and pattern of trade; the physical volume of trade cost effective loads for onward movement. may stay the same but the goods may move over greater distances. Hub Port - These are typically larger ports where a shipping line might locate several of its services TEU - A Twenty-foot Equivalent Unit (TEU) is to different geographical areas. The hub tends the standard measurement in the container to be the centre of a ‘hub and spoke’ delivery industry.1 TEU = 1 twenty-foot container and a network. forty foot container = 2 TEU. Ship capacity and train length capacity are described with the Inter-modal - An adjective describing the number of TEUs they carry. ability to transfer goods from one mode to another without having to handle all the goods individually.
48 TOC - Train Operating Company, this tends to be used for passenger train companies.
3PL - Third Party Logistics companies organise the transport and logistics operations of a client and usually provide the transport themselves.
4PL - Fourth Party Logistics companies organise transport and logistics operations but do not usually own any assets. They also tend to organise the complete supply chain.
49 • British Waterways Appendix 2 64 Clarendon Road Watford WD17 1DA Relevant Contacts Tel: 01923 201120 Web: www.britishwaterways.co.uk • Department for Transport Modal Grants Team • Freight on Rail Zone 2/16 The Impact Centre Great Minster House 12-18 Hoxton Street 76 Marsham Street London. N1 6NG London Tel: 020 8241 9982 SW1P 4DR Web: www.freightonrail.org.uk Tel: 020 7944 6848 Web: www.dft.gov.uk • Commercial Best Operators Association P.O. Box 38479 • Freight Transport Association London Hermes House SE16 4WX St John’s Road Web: www.cboa.org.uk Tunbridge Wells Kent • Association of Inland Navigation Authorities TN4 9UZ Fearns Wharf Tel: 01892 526171 Neptune Street Web: www.fta.co.uk Leeds. LS9 8PB Christopher Snelling Web: www.aina.org.uk Head of Rail Freight and Global Supply Chain Policy • Office of Rail Regulation Tel: 01892 552245 One Kemble Street Email: [email protected] London WC2B 4AN • Rail Freight Group Tel: 020 7282 2000 7 Bury Place Web: www.rail-reg.gov.uk London WC1A 2LA • Network Rail Tel: 020 3116 0007 40 Melton Street Web: www.rfg.org.uk London NW1 2EE • Freight by Water Tel: 020 7557 8000 Freight Transport Association Hermes House St Johns Road Tunbridge Wells TN4 9UZ Tel: 08700 60 48 90 Web: www.freightbywater.org
50 Freight Operating Companies Running Freight Trains at the Time of Writing (Spring 2011)
• Colas Rail Ltd • Freightliner Group Ltd Fairbairn close, Off Beaumont Road, 3rd Floor, The Podium, Purely, Surrey CR2 2EJ 1 Eversholt Street, Tel: 020 8667 2885/07801 840109 London, NW1 2FL Fax: 020 8667 2822 Tel: 020 7200 3974 Web: www.colasrail.co.uk Email: [email protected] Mr David Attoe, New Business Web: www.freightliner.co.uk Manager - Freight Ms Lindsay Durham, Head of Rail Strategy Email: [email protected] Email: [email protected]
• Direct Rail Services Ltd • GB Railfreight Kingmoor Depot, 15-25 Artillery Lane, Etterby Road, London, E1 7HA Carlisle, Tel: 020 7904 3393 Cumbria, CA3 9NZ Fax: 020 7983 5170 Tel: 01228 406600 Email: [email protected] Fax: 01228 406601 Web: www.gbrailfreight.com Web: www.directrailservices.com John Smith, Managing Director Email: [email protected] • DB Schenker (UK) Lakeside Business Park, Carolina Way, Doncaster, South Yorkshire DN4 5PN Tel: 0870 140 5000 Email: [email protected] Web: www.dbschenker.co.uk
51 Logistics Companies Running Freight Trains In Conjunction With Freight Train Operating Companies at Time of Writing (Spring 2011)
• Malcolm Group • John G Russell Ltd Burnbrae Drive, Deanside Road, Linwood Industrial Estate, Paisley Hillington, Glasgow, G52 4XB RenfrDB Schenkerhire, PA3 3BU Tel: 0141 810 8200 Tel: 01505 324321 Fax: 0141 882 4909 Fax: 01505 324009 Email: [email protected] Web: www.malcolmgroup.co.uk Website: www.johngrussell.co.uk Mr Alan Thornton Mr Paul Hines, Manager – Transport Email: [email protected] Mr Graham Russell, Transport Director Mr John Holwell, Rail Development Manager • Eddie Stobart Ltd Email: [email protected] Brunthill Road, Kingstown Industrial Estate, • Potter Group Ltd Carlisle, Cumbria, CA3 0EH Green Lane, Tel: 01228 822500 Melmerby, Ripon, Fax: 01288 530384 North Yorkshire, HG4 5HP Email: [email protected] Tel: 01765 640495 Mr Richard Butcher, Commercial Director Fax: 01765 640588/ 01765 640544 Email: [email protected] Email: [email protected] Mr Derrick Potter, Chairman Email: [email protected]
52 Appendix 3 Map of Port Locations and Main Inland Waterways
53 Port Locations and Main Inland Waterways Port ID 47. Inverness 96. Stranraer 48. Ipswich 97. Sunderland 1. Aberdeen 49. Killingholme 98. Sutton Bridge 2. Aidrishaig 50. Kings Lynn 99. Swansea 3. Ayr 51. Kinlochbervie 100. Tees 4. Barrow 52. Kirkwall 101. Teignmouth 5. Berwick upon Tweed 53. Kyle of Lochalsh 102. Troon 6. Bideford 54. Leith 103. Truro 7. Blyth 55. Littlehampton 104. Tyne 8. Boston 56. Liverpool 105. Ullapool 9. Bridgford 57. Llanddulas 106. Weymouth 10. Brightlingsea 58. Lochmaddy 107. Whitby 11. Bristol (Avonmouth 59. London 108. Whitstable and Portbury) 60. Lowestoft 109. Wick 12. Brodick 61. Lymington 110. Workington 13. Bromborough 62. MacDuff 111. Londonderry 14. Buckie 63. Mallaig 112. Larne 15. Burghead 64. Manchester Ship Canal 113. Belfast 16. Burton Upon Stather 65. Medway 114. Dun Laoghaire 17. Caernarfon 66. Methil 115. Dublin 18. Cairnryan 67. Milford Haven 116. Waterford 19. Cardiff 68. Mistley 117. Rosslare 20. Charlestown 69. Montrose 118. Cork 21. Cowes 70. Moston 22. Dover 71. Neath 23. Dundee 72. Newhaven 24. Falmouth 73. Newport 25. Felixborough 74. Oban 26. Felixstowe 75. Padstow 27. Fishguard 76. Par 28. Fleetwood 77. Penzance 29. Folkestone 78. Perth 30. Fowey 79. Peterhead 31. Fraserburgh 80. Plymouth 32. Garston 81. Poole 33. Girvan 82. Port Ellen 34. Glasgow 83. Port Penrhyn 35. Glensanda 84. Portland 36. Goole 85. Portsmouth 37. Grangemouth 86. Ramsgate 38. Great Yarmouth 87. Rosyth 39. Grimsby 88. Rye 40. Harwich 89. Scrabster 41. Hayle 90. Seaham 42. Heysham 91. Sharpness 43. Holyhead 92. Shoreham 44. Hull 93. Silloth 45. Immingham 94. Southampton 46. Invergordon 95. Stornoway
54 Appendix 4 Rail Freight Network Including Terminals (W8 Gauge and above)
This network allows 9’6” container traffic although some routes may require low platform wagons (see operator). Please check with Network Rail for latest guage details
55 Appendix 5 National Rail Infrastructure
This shows the National Rail Network which is gauge W6 and above. All conventional wagons can be used on this network and an 8’6” container can be transported on low platform wagons on certain routes (see operator).
56 57 58 59 Freight Best Practice publications, including those listed below, can be obtained FREE of charge by downloading them from the website www.businesslink.gov.uk/freightbestpractice
Saving FUEL Performance MANAGEMENT Fuel Management Guide Fleet Performance Management Tool This is the definitive guide to improving the Incorporating CO2 Emissions Calculator fuel performance of your fleet. It gives step-by- 2009 Edition step explanations of the key elements of fuel This tool has been designed to help fleet operators management, how to measure performance and improve their operational efficiency using how to implement an effective improvement key performance indicators (KPIs) to measure programme. and manage performance. KPIs include costs, operational, service, compliance, maintenance and environmental.
Developing SKILLS Transport Operators’ Pack - TOP Saving Fuel Through People TOP provides practical ‘every day’ support This guide provides advice and real life examples material to help operators implement best to help operators motivate their staff effectively practice in the workplace and acts in direct and shows how to implement and manage support of tasks essential to running a successful change more successfully. fuel management programme
Equipment & SYSTEMS Case STUDIES Aerodynamics for Efficient Road There are over 25 case studies showing how Freight Operations companies have implemented best practice and the savings achieved. Check out the following selection This guide offers practical information on of case studies: aerodynamically effective styling for trucks • Efficient intermodal terminals deliver including appropriate add-on features supply chain benefits • Tesco Sets the Pace on Low Carbon and Efficiency • Engine Idling – Costs You Money and Gets You Nowhere!
January 2007 Reprinted November 2010. Reissued Spring 2011 Printed in the UK on paper containing 100% recycled fibre. Multi - MODAL FBP1089© Queens Printer and Controller of HMSO 2010.