SEVENTH FRAMEWORK PROGRAMME

Coordination and Support Actions (Supporting) Grant Agreement No: 233910

Project ENABLE Stimulate Sustainable Freight Transport Systems with Latin American countries

Deliverable 2.1 Best Practices Handbook

Version: Final Date: 23rd of December 2010 Dissemination level: Public Deliverable code: D2.1 Deliverable D2.1: Best Practices handbook

PROJECT INFORMATION Title: Stimulate Sustainable Freight Transport Systems with Latin American countries Acronym: ENABLE Grant Agreement no: 233910 Programme: 7th Framework Programme Funding Scheme: Coordination and Support Actions (Supporting) Start date: 1st September 2009 Duration: 24 months Web site: www.enable‐project.net

CONTROL SHEET

Version history Version Total Date Main author Contributors Summary of changes number Pages 1.0 5.6.2010 Antti Permala, Jarkko Lehti‐ nen 2.0 24 June Antti Permala, Jarkko Lehti‐ 2010 Karri Rantasila nen 3.0 119 8 Sept 2010 Antti Permala Input from D1.1 Karri Rantasila (draft) 4.0 125 21 Dec. Antti Permala Input from D1.1 (final) 2010 Karri Rantasila and 1st conference Abstract The deliverable D2.1 of the ENABLE project documents the European Best Practices that provide solutions to intermodal logistical challenges and barriers in Argentina and Brazil. The selected Best Practices are based on the analysis of existing intermodal situation in target countries. The cases allow building up a picture of the main development lines of logistics corridors in LA. All the presented parties (companies, operators, LSPs, IT providers and policy makers) are essential stakeholders for building up a well‐functioning logistics network. Approval Name Date Prepared VTT 21st December 2010 Reviewed CERTH/HIT 22nd December 2010 Authorized CERTH/HIT 22nd December 2010 Circulation

Recipient Date of submission European Commission 23rd December 2010

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EXECUTIVE SUMMARY The focus of ENABLE project is in co‐modal and intermodal freight transport. This pos‐ sesses fundamental importance in developing competitive alternatives to road trans‐ port. As roads are being increasingly overloaded, intermodal transport can offer reliable and cost‐effective transport mode in an environmentally conscious manner. EU is Brazil's biggest trading partner, accounting for 22.5% of its total trade. Brazil is the single biggest exporter of agricultural products to the EU, accounting for 13% of total EU imports. Also Argentina is a big exporter of agricultural goods to the EU, as well as Eu‐ rope is Argentina's second export market after Brazil. In addition, EU is the biggest for‐ eign investor in Argentina and Brazil respectively. The backbone of the EU's future bilat‐ eral trade relations with Argentina and Brazil will be a wide‐ranging EU‐MERCOSUR As‐ sociation Agreement. This Agreement aims at the creation of a free trade area. Based on the analysis of existing situation in Argentina and Brazil, findings of project forums and logistics performance indicators, the main logistical challenges and needs for improvements in Brazil and Argentina are addressed and discussed. After identifying the problems, the European intermodal innovations and best practices, mainly devel‐ oped in projects of PROMIT, Viacombi and Bestlog and by European Intermodal Associa‐ tion, are employed to provide solutions to logistical challenges in Latin America. General approach to best practices has been: • Benchmarking the European Intermodal best practices • Looking for sustainable concepts, industrial innovations, and intermodal solu‐ tions • Classification and clustering the best practices • Review of innovations and ideas • Analyzing the organization of innovation process and business models of ser‐ vices • Transferability to other situations or framework conditions.

The current intermodal status in LA has guided the selection of best practices that are further divided into five categories according the type of the case: 1) Company Cases, 2) Operator Cases, 3) Logistics Service Cases, 4) Information Technology Cases and 5) Pol‐ icy Strategies. Despite of the differences in EU and LA logistics systems, the key findings of EU Best Practices are extendable to LA and allow one to understand the development paths of LA logistics. The key findings of best practices to be transferred to LA include:

• Arranging logistics chain by using intermodal transport • Business models, service concepts and operational principles of intermodal transport operator • Business model and service concept of intermodal logistics network • Connecting port‐ and shipping operations to logistics network by utilizing in‐ formation technology

Chosen cases allow together to build a picture over the main development lines of logis‐ tics corridors in LA. All the parties presented above (companies, operators, LSPs, IT pro‐ viders and policy makers) are essential stakeholders for building up a well‐functioning logistics network.

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ABBREVIATIONS AEO Authorized Economic Operator BP Best Practice CA European Coordination Action CCD Coca Cola Drikker DB Deutche Bahn DBS Deutche Bahn Schenker CO2 Carbon Dioxide CT Combined Transport ICT Information and Communication Technologies IT Information Technology ITU Intermodal Transport Unit JIT Just‐In‐Time EDI Electronic Data Interchange EIA European Intermodal Association IMMTA International MultiModal Transport Association KN Kuehne+Nagel KPI Key Performance Indicator LA Latin America LDC Local Distribution Centers LCL Less than Container Load LPI Logistics Performance Index LSP Logistics Service Provider PCS Port Community System RORO Roll‐on/roll‐off SECU StoraEnso Cargo Unit SLA Service Level Agreements UIRR International Union of Combined Road‐Rail Transport Companies TEU Twenty‐foot Equivalent Units 3PL 3rd Party Logistics 4PL 4th Party Logistics

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CONTENTS 1. Introduction ______9 1.1. ENABLE Project ______9 1.2. Aims of Best Practices analysis ______9 1.3. PROMIT Project ______10 2. Intermodal transport in Europe______12 2.1. EU Intermodal Policy and Actions ______12 2.2. Related organizations______14 2.2.1. EIA______14 2.2.2. UIRR ______15 2.2.3. IMMTA ______15 3. Approach ______16 3.1. Methodology______16 3.2. An outlook of the EU‐LA logistics environment ______16 3.3. LA intermodal status______18 3.4. EU Intermodal status ______22 3.5. Criteria and classification of Best Practice cases ______23 4. Best Practice cases ______31 4.1. Company Cases______31 4.1.1. Volvo ______31 4.1.2. StoraEnso ______35 4.1.3. Coca Cola______43 4.2. Operator Cases ______48 4.2.1. Hupac ______48 4.2.2. Rhinecontainer ______53 4.2.3. BoxXpress Germany______57 4.2.4. Polzug ______61 4.2.5. Construrail______64 4.2.6. Corman______67 4.2.7. HUB Zahony ______70 4.2.8. BILK Combiterminal ______74 4.3. Logistics Service Cases______78 4.3.1. DB‐Schenker______78 4.3.2. Kuehne&Nagel______85 4.3.3. Cargo Domino ______90

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4.4. Information Technology (IT) Cases______95 4.4.1. Port Infolink ______95 4.4.2. Short Sea XML ______99 4.4.3. Valenciaport IT Platform ______103 4.5. Policy strategies ______110 4.5.1. German terminal policy______110 4.5.2. Swiss case______111 4.5.3. EU Maritime Knowledge Platform ______113 4.5.4. IPC/SPC Intermodal/Short Sea Shipping Promotion Centre______113 4.5.5. Railway border interoperability (INTERFACE)______114 4.5.6. Case Port of Helsinki / Vuosaari Harbour, Finland ______114 5. Analysis ______117 6. Concluding remarks ______124

LIST OF TABLES Table 1: Basic figures ______18 Table 2: European Best Practice cases according to LA needs and challenges______25 Table 3: Overview of European Best Practice cases described______30 Table 3: Transport of products from CCD’s plant at Lørenskog to the warehouse in Tromso (mode, volumes and logistics costs) ______47 Table 4: Types of swap bodies ______93 Table 5: Modes of integration______108 Table 6: General aspects of Best Practices to be applied in LA ______117

LIST OF FIGURES Figure 1: Areas of Freight Transport Innovations in Europe______14 Figure 2: Logistics Performance Index (LPI) in Argentina and Brazil ______17 Figure 3: Comparison of LPIs ______17 Figure 4: Cost of container transport in some countries______18 Figure 5: General freight loads (without ores) – Brazil ______20 Figure 6: International corridors of maritime transport between Brazil, Argentina and the European Union ______21

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Figure 7: Intermodal Transport Units (ITUs) forwarded at EU‐27 level*, by mode of transport, 2005 ______22 Figure 8: Volvo Supply chain______32 Figure 9: The schedule of Train "8"______33 Figure 10: The roles of actors in a Supply Chain ______34 Figure 11: The first implementation of the Stora Enso supply chain concept ______37 Figure 12: Starting point and NETTS principle ______39 Figure 13: Cost comparison in transportation chain______40 Figure 14: INFOLOG System ______42 Figure 15: CCD’s production and distribution map ______44 Figure 16: Different Business Models (Lehtinen in Nofoma 2008) ______46 Figure 17: HUPAC network ______50 Figure 18: Graphic representation of ports served by Rhinecontainer______54 Figure 19: BoxXpress network______58 Figure 20: Polzug Network______62 Figure 21: Construrail route ______65 Figure 22: Example of emissions between multimodal and road transport ______66 Figure 23: Economic and environmental aspects of redesigning the transportation chain ______69 Figure 24: Gauge‐transfer stations in Europe ______71 Figure 25: Railway reloading facilities ______72 26: BILK intermodal connections______76 27: BILK Combiterminal______77 Figure 28: The factors of a leadership in multimodal transports. Case DB Schenker ___ 82 Figure 29: SBB Cargo‘s intermodal transport volume (single wagon by origin)______91 Figure 30: Cargo Domino transport system ______92 Figure 31: Planned transshipment points until 2008 ______92 Figure 32: Cargo Domino technology ______93 Figure 33: The Cargo Domino concept ______94 Figure 34: The complexity in transport chains ______101 Figure 35: SSXML messages______102 Figure 36: Valenciaportpcs.net operating Principles ______106 Figure 37: PCS development stages ______106 Figure 38: Development of combined transport in road/rail on Kombi‐network2000+ ______111 Figure 39: Progress of modal shift policy in Switzerland______112

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Figure 40: Map of Vuosaari Harbor, Finland______115

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1. INTRODUCTION 1.1. ENABLE Project The main goal of the ENABLE project is to contribute to the external relations of EU with Latin American countries, specifically Argentina and Brazil, in the area of co‐modal and intermodal freight transport. This goal will be served by defining and promoting to the Latin American region European innovations and best practices that will facilitate the development of sustainable intermodal freight transport systems in the target area. Networking and partnership building actions will be employed, strengthening in this way the dialogue between Europe and Latin America, as well as fostering international cooperation between the two geographical areas. The focus of ENABLE project is in co‐modal and intermodal freight transport. Co‐modal transport1 means efficient use of different modes on their own and in combinations, and will result in an optimal and sustainable utilization of resources. Intermodal transport2 means the movement of goods in one and the same loading unit or road vehicle, which uses successively two or more modes of transport without handling the goods them‐ selves in changing modes. Combined Transport is a subset of Intermodal transport where the major part of the European journey is by rail, inland waterways or sea and any initial and/or final legs carried out by road are as short as possible. Intermodality is of fundamental importance for developing competitive alternatives to road transport. As roads are being increasingly overloaded, intermodal transport can offer reliable, cost‐effective delivery in an environmentally conscious manner. Develop‐ ing freight transport logistics is primarily a business‐related activity and a task for in‐ dustry. Nevertheless, the authorities have a clear role to play in creating the appropriate framework conditions and keeping logistics on the political agenda.

1.2. Aims of Best Practices analysis The main objective of this Best Practice work package is to organize the information from different sources, to build a sound picture of the main developments in European intermodal transport and to rewrite and adjust it for the situation of the target coun‐ tries. The main sources have been the outcomes from the PROMIT project, especially best practice cases, benchmarks and presentations in PROMIT workshops and confer‐ ences, the European Intermodal Association (EIA) award winner’s cases, EC projects Viacombi and Bestlog and other available sources. Best practice3 is a technique, method, process, activity, incentive, or reward that is be‐ lieved to be more effective at delivering a particular outcome than any other technique, method, process, etc. when applied to a particular condition or circumstance. The idea is that with proper processes, checks, and testing, a desired outcome can be delivered with fewer problems and unforeseen complications. Best practices can also be defined as the

1 http://eur‐lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2006:0336:FIN:EN:PDF 2 Terminology on Combined Transport. Prepared by the UN/ECE, the European Conference of Ministers of Transport (ECMT) and the European Commission (EC). UNITED NATIONS. New York and Geneva, 2001. 3 Ilies, Crisan, Muresan (2010) Best Practices in Project Management, Review of International Comparative Management Volume 11, Issue 1, Page:43

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most efficient (least amount of effort) and effective (best results) way of accomplishing a task, based on repeatable procedures that have proven themselves over time for large numbers of people. This deliverable D2.1 includes a comprehensive description of the selected European best practices to be transferred to the two LA countries. In addition some state‐of‐the‐ art technical innovations are presented in D2.2.

1.3. PROMIT Project PROMIT was European Coordination Action (CA) for intermodal freight transport initi‐ ating, facilitating and supporting the coordination and cooperation of national and Eu‐ ropean initiatives, projects, promotion centers, technology providers, research institutes and user groups related to this most complex transport form. The strategic PROMIT ob‐ jective was to contribute to a faster improvement and implementation of intermodal transport technologies and procedures and to help in promoting intermodal logistics and mode shift by creating awareness of innovations, best practices and intermodal transport opportunities for potential users as well as for politicians and for the research community. Due to the immense size of the intermodality domain PROMIT choose a matrix organiza‐ tion, where the domain expertise was treated in five parallel clusters: 1. Organization and Business Models, 2. Intermodal Infrastructure and Equipment, 3. Information and Communication Technologies, 4. Operation and Services and 5. Security, Safety, Legislation and Policy PROMIT Coordination Action lasted for 3 years, during which 3 Intermodal Innovation Day Conferences and nine cluster workshops and seminars were organized in addition to the dissemination via brochures, newsletters and an Internet homepage (http://www.promit‐project.net/). PROMIT included 64 Best Practice cases. Rail operations cover some new intermodal connections and several types of development of existing services, based on block and shuttle trains. Information platforms base on quite different approaches, e.g. regional, mode such as rail or port based solutions. Some platforms serve both stakeholders in intermodal business as well as authorities. Some have more informative nature. Termi‐ nal cases cover actions directed to operations efficiency, in many cases based on soft‐ ware development and handling technology development. Tracking cases include satel‐ lite positioning of equipment and track and trace services in intermodal rail transport. 14 business cases were analyzed in detail from strategy point of view. Intermodal trans‐ port service consists of a network of different companies, and not all of them can be the actual leader of the network. Strategic leadership of intermodal service was analyzed with three different types of cases Volvo, Hupac and Kuehne+Nagel. These companies are leaders of the service but they have a quite different position in the intermodal ser‐ vice network. Volvo is an industrial end customer, HUPAC a railway operator and Kue‐ hne + Nagel a 3 PL logistics service provider.

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PROMIT collected also extensive data on national transport policies supporting inter‐ modality; R&D, services, environment, taxation, legislation and transport policy. This analysis shows the many strategies available in EU‐27 to support sustainable transport.

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2. INTERMODAL TRANSPORT IN EUROPE 2.1. EU Intermodal Policy and Actions Traditional freight forecasts suggest continuous growth by a further 50% between 2000 and 2020. Growth rates for goods transport traditionally exceed those of the economy in general. Current forecasts need revision due to current economic downturn and pros‐ pects4. Main policies are documented in the following publications:

White paper – ‘European transport policy for 2010: time to decide’ (September 2001) In this white paper the Commission proposes some 60 measures aimed at developing a European transport system capable of shifting the balance between modes of transport, revitalizing the railways, promoting transport by sea and inland waterways and control‐ ling the growth in air transport. Mobility is essential for Europe’s prosperity and for free movement of citizens. The neg‐ ative impact of mobility in terms of energy use and environmental quality must be re‐ duced. Next to actions foreseen in the 2001 White Paper, such as boosting rail and mari‐ time connections for long distance freight transport, additional instruments will be needed to achieve these objectives. They include a freight logistics action plan; intelli‐ gent transport systems to make mobility greener and more efficient; a debate on how to change mobility of people in urban areas; an action plan to boost inland waterways; and an ambitious programme for green power in trucks and cars. The orientations of the transport policy build upon the 2001 White Paper. They include actions to create a competitive European railway network through liberalization, tech‐ nological innovation and interoperability of equipment, investment in infrastructure and better market monitoring with a new scoreboard from 2007 onwards. Motorways of the sea and short sea shipping need to be developed with an increased emphasis on land‐ ward connections. The European ports policy, which was launched in 2007, has as one of its goals increased investment within ports and towards the hinterland.

Review of White paper in 2006 The review announces a methodology as a basis for smart infrastructure charging by 2008. There is also a continuation of measures to improve security and safety in various modes. Measures must be stepped up to reach the target of halving the number of peo‐ ple killed on EU roads between 2001 and 2010. The instruments of the 2001 White Pa‐ per must be adapted to a new context of an enlarged Europe, rising petrol prices, Kyoto commitments and globalization. A European sustainable mobility policy needs more pol‐ icy tools to optimize the performance of each transport mode and their combined use.

Freight Transport Logistics Action Plan, Communication from the Commission COM(2007) 6075

4 Giannopoulos. ENABLE Conference Buenos Aires, 12 March 2010. 5 Promit D53. http://www.promit‐project.net/

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The Commission adopted a logistics action plan in 2007 in order to create better syner‐ gies between road, sea, rail and river, and integrate various transport modes in logistics chains. This will give the industry a competitive edge but also diminish the environ‐ mental impact per unit of freight. The review puts an increased emphasis on intelligent transport systems. There is no reason why ships, trucks, cars and trains would not have the same sophisticated com‐ munication and navigation tools as aircrafts. Real‐time management of traffic flows and capacity use as well as tracking will cut costs, improve environmental quality and im‐ prove security. Galileo will play a key role to promote new technologies. Today’s review calls for more ambitious actions to change mobility in Europe’s urban areas. The Commission launched a debate on urban transport policy in 2007 through a Green Paper. The EU can play the role of a catalyst to encourage decision‐makers to bet‐ ter tackle congestion, pollution and accidents with innovative actions. As part of the de‐ bate, a clear view is needed on what level of government is responsible for new actions. The greater use of intermodality, whereby different transport modes are used along the transport chain, using each mode to best effect, is a key element of the EU freight trans‐ port policy. In particular, it is promoted in medium and long‐distance corridors – for Al‐ pine crossings due to the environmental sensitiveness of these areas – and for port‐ hinterland and terminal‐to‐terminal connections. Focus in European intermodal freight transport6 is in: barrier‐free international road and rail transport and the opening of these markets to competition; logistics solutions based on harmonized communication framework conditions and Information and Communication Technologies (ICT) plat‐ forms, which are key to intermodality and comodality. Various barriers inhibit, however, the wider use of intermodal transport. These include the lack of a coherent network of modes and interconnections, capacity problems at terminals, the lack of technical interoperability both between and within modes, and a variety of regulations and standards. Levels of performance and service quality between modes are uneven and there are different levels of liability and a lack of information about intermodal services. As a result, intermodal door‐to‐door transport still offers un‐ tapped capacity and partnership opportunities.

Actions Freight transport innovation areas in Europe are described in Figure 1.

6 Towards an Integrated Transport System – Freight Focus. http://www.transport‐rsearch.info

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Figure 1: Areas of Freight Transport Innovations in Europe7

2.2. Related organizations 2.2.1. EIA The European Intermodal Association (EIA)8 is the first European association open to all transport modes: rail, road, waterborne, air. Its aim is to improve the co‐operation of the different modes of transport as the logistics' chain still has lots of shortcomings in infra‐ structural, technical, organizational and legal respect. Therefore, this neutral organiza‐ tion with more than 90 members is suitably qualified to discuss controversial subjects and to propose balanced and sustainable solutions in line with and to improve the EU transport policy. EIA maintains compendium for Freight Transport & Logistics Best Practices. This in‐ cludes market cases stemming from transport and manufacturing industry side. It de‐ scribes running services and sustainable initiatives regarding their background, motiva‐ tion, main benefits, innovations, partners involved etc. These cases have been obtained via various ongoing EU initiatives. Currently there are available a total of 60 cases from the EU funded projects Viacombi, BestLog and Promit9.

7 Giannopoulos. ENABLE Conference Buenos Aires, 12 March 2010. 8 http://www.eia‐ngo.com/ 9 http://www.eia‐ngo.com/category/best‐practices

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2.2.2. UIRR The International Union of Combined Road‐Rail Transport Companies (UIRR)10 is a co‐ operative limited company. It has 19 member companies. UIRR companies mainly in‐ volve the combination of road and rail. This combination brings together the advantages of both rail and road: • Rail can carry large quantities of freight over long distances, and • Road vehicles provide the flexibility needed for regional distribution

2.2.3. IMMTA International Multi‐Modal Transport Association (IMMTA) is a non‐profit technical and specialized organization, which is dedicated to promote the concept of multi‐modal transport globally. The objectives of the IMMTA are: • To act as a catalyst for the exchange of ideas and information on modern trade and multimodal transport technologies and logistics, including implications for the en‐ vironment and development, and to arrange meetings thereon; • To act as a pool of experts on multimodal transport issues. The activities of IMMTA include research, training seminars, conferences, and conferring of the awards. IMMTA will further the concept of multimodal transport and logistics through various means including the publication of papers, articles and books and other technical activities as appropriate. Working Groups on Multimodal Transport are also arranged to monitor the latest developments taking place at the international, regional as well as national level that impact multimodal transportation. See more at: http://www.immta.org/

10 http://www.uirr.com/

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3. APPROACH 3.1. Methodology The methodology followed in this report is based on the idea of transferability of the European intermodal innovations. From numerous innovative solutions, Promit project and European Intermodal Association, the most promising ones to European Best Prac‐ tices have been selected. From this selection, ENABLE project has chosen the ones which shall be of interest for LA circumstances. General approach to best practices has been: • Benchmarking the European Intermodal best practices • Looking for sustainable concepts, industrial innovations, and intermodal solutions • Classification and clustering the best practices • Review of innovations and ideas • Analyzing the organization of innovation process and business models of services • Transferability: Transferability to other situations or framework conditions. The current intermodal status in LA has guided the selection. The next chapter gives an overview to LA developments. LA current status (needs, barriers, etc.) combined with feedback generated by the various events that took place in LA have been the basis for cases selection.

3.2. An outlook of the EU-LA logistics environment To create an overlook over the logistics environment in EU and LA, two individual indi‐ cators, Logistics Performance Index (LPI) developed by the World Bank Group, and the cost of container transport, are presented below. LPI is based on a worldwide survey of operators on the ground (global freight forward‐ ers and express carriers), providing feedback on the logistics “friendliness” of the coun‐ tries in which they operate and those with which they trade. They combine in‐depth knowledge of the countries in which they operate with informed qualitative assessments of other countries with which they trade, and experience of global logistics environment. The LPI consists of both qualitative and quantitative measures and helps build profiles of logistics friendliness for these countries. It measures performance along the logistics supply chain within a country11. The LPI of Argentina and Brazil is illustrated in Figure 2 and Figure 3.

11 http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTTRANSPORT/EXTTLF/ 0,,contentMDK:21514122~menuPK:3875957~pagePK:210058~piPK:210062~theSitePK:515434,00.html

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Figure 2: Logistics Performance Index (LPI) in Argentina and Brazil

Figure 3: Comparison of LPIs

Most of the indicators confirm the need for improvements in logistics performance in Brazil and Argentina. Main challenges for logistics competence seems to be customs and infrastructure. This was also one of the conclusions in the BA Forum. However, it should be noted that the comparison was made against two highly developed EU countries and generally Argentina and Brazil performed rather well in terms of rank and LPI score. It is more a question of further developing the rather solid logistics network than starting from a scratch. Another important factor influencing the logistics performance is the cost of container transport, compared to European countries, seems to be more expensive in LA. In this analysis the fees are levied on a 20‐foot container in U.S. dollars. All the fees associated with completing the procedures to export or import the goods are included. These in‐ clude costs for documents, administrative fees for customs clearance and technical con‐ trol, customs broker fees, terminal handling charges and inland transport. The cost measure does not include tariffs or trade taxes. Only official costs are recorded12.

12 http://www.doingbusiness.org/Documents/CountryProfiles/ARG.pdf, http://www.doingbusiness.org/Documents/CountryProfiles/BRA.pdf

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Cost to import (US$ per container) Cost to export (US$ per container)

2000 2000

1500 1500

1000 1000

500 500

0 0 2007 2008 2009 2010 2007 2008 2009 2010

Argentina Brazil Germany Netherlands Argentina Brazil Germany Netherlands Figure 4: Cost of container transport in some countries

As presented in figure above, the cost of transporting containers to/from LA is about 50 to 70% more expensive compared to EU. The high cost might restrict the flows of con‐ tainers to be used in intermodal transport corridors inside the LA countries.

3.3. LA intermodal status EU is a key trading partner for LA economic and industrial development and is set to play a major role in science and technology. The territorial area of Brazil and Argentina is enormous (Table 1).

Table 1: Basic figures13

TERRITORIAL POPULATION GDP 2008 GDP PER CAPITA COUNTRY AREA (km2) (Inhabitants) (Million US$) 2008 (US$)

Argentina 2,766,889 40,276,376 333,322 8,358

Brazil 8,514,876 193,733,795 1,595,498 8,311

EU is Brazil's biggest trading partner, accounting for 22.5% of its total trade. Brazil is the single biggest exporter of agricultural products to the EU, accounting for 13% of total EU imports. Despite its size, Brazil only ranks as the EU's 10th trading partner. EU is the biggest foreign investor in Brazil. Main EU imports from Brazil are primary products, in particular agricultural products. However, manufactured products such as machinery and transport equipment represent almost one third of Brazilian exports to the EU. The EU exports mainly manufactured products to Brazil; machinery, transport equipment and chemicals. Argentina is one of the most important partners of the EU. It is a big exporter of agricul‐ tural goods to the EU and also an important destination for EU investment. Europe is Argentina's second export market after neighboring Brazil. EU is the biggest foreign in‐ vestor in Argentina, accounting for about half of the FDI in Argentina, notably in the au‐ tomotive sector.

13 IBGE and United Nations Statistics Division (2010)

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The backbone of the EU's future bilateral trade relations with Argentina and Brazil will be a wide‐ranging EU‐MERCOSUR Association Agreement aims at the creation of a free trade area. This agreement is currently under negotiation. The majority of the products imported by Argentina come to the country through mari‐ time and road. The multimodal transport network is historically consolidated by the use of extensive road routes that cross the country, added to a remarkable agglomeration of the rail network around the district of Buenos Aires. Inland waterways consist of rivers Parana, Uruguay and Plate that discharge into the Atlantic Ocean and provide connec‐ tion with Brazil. Rail networks serve basically to the national connection with the maritime port system of each country, for the predominant transport of bulks turned to the export. In Brazil, part of this network also serves as a way for the transport of raw material to the heavy industry, mainly in the transformation of the iron ore. The railway network has different gauges compared to the neighboring countries and also some national networks. In the last years, the use of containers has increased significantly in foreign trade in Bra‐ zil. Container movements have been restricted to the maritime ports for many years, but from the concession of the rail system increasingly more containers have been trans‐ ported by railways. In the period between 2004 and 2008, the amount of containers moved in the Brazilian port terminals presented growth of approximately 30%. In 2008, the port of Santos, located in the State of São Paulo, was responsible for around 1.7 mio TEU. The total volume was 4.6 mio TEU. As an example of the transport of containers, only the concessionaire ALL, manager of the rail axle that links the State of São Paulo, in Brazil, to the Province of Buenos Aires, in Argentina, moved in 2007 around 5,000 con‐ tainers. According to information of the own operator company, punctual investments aiming at removing the obstacles existing along the railway can allow that this number is tripled in a short term. The flows of general freight (without iron ore) are concen‐ trated in South‐West Brazil, with some main axis to North (Figure 5).

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Figure 5: General freight loads (without ores) – Brazil14

The Amazon River is the third most extensive river of the world. The navigable parts of the Amazon River and its tributaries provide an extensive system of water distribution ways used mainly to transport materials to develop the basin’s land. The La Plata Basin includes the de La Plata River, the Paraná river, Paraguay river and the Uruguay river. More than 100 fluvial ports are found in this fluvial system, with a total volume of 110 million tons of products transported per year. From this amount, around 30 percent re‐ fers to grains and 20 percent to general freight, including 1.4 million TEUs. The main container transshipment points in the Argentina’s international trade opera‐ tions are Puerto de Buenos Aires, Zarate/Campana and La Plata. In the case of the Brazilian export, seeds and grains, agricultural supplies and ore are the more relevant products, representing 73.2% of the total export. The main Brazilian Ports which export goods to the European Union are Vitória, São Luís and Rio de Janeiro with the share of 60%. This is due to the fact that the iron ore is exported through these ports, for in terms of exported products, in dollars, the most significant ports are Santos and Paranaguá, with 25.19% and 9.97% of the total, respectively. In the case of the im‐

14 PNLT, 2007

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portations derived from the European Union to Brazil, it can be highlighted the Brazilian demand for mineral fuels, manure and fertilizers and inorganic chemicals, representing 48.76% of the total Brazilian imports. The main Brazilian Ports that receive the products imported from the European Union can be observed on Table 3.11. It is possible to con‐ clude that the Ports of Santos, Paranaguá and Rio de Janeiro are responsible for receiv‐ ing 58.7% of the imports derived from the European Union. Regarding the Brazilian im‐ portation of manures and fertilizers derived from the EU, 07 Ports are responsible for 90.5% of the ingress in the Country. They are: Paranaguá, Santos, Vitória, Rio Grande, Porto Alegre, Maceió and São Luís (Port of Itaqui). Table 3.12 shows the total imported, in tons, through the mentioned Ports. Great part of the products exported from Argentina to the European Union is formed by industrial wastes, cereals and fruits. Main import goods to Argentina are fuels, oils, fer‐ tilizers, chemicals, paper and machines. Used main EU‐LA routes are presented in the next picture (Figure 6).

Figure 6: International corridors of maritime transport between Brazil, Argen- tina and the European Union15

15 Maritime Guide (2010)

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3.4. EU Intermodal status Eurostat statistics gives the following figures for unitisation of freight transport in Eu‐ rope in 2005. Road, with 77.5 million ITUs carried in 2005, is the most important trans‐ port mode in unitised transport in Europe. Another large share of traffic is taken by ma‐ ritime transport with 58.8 million ITUs while rail is considerably less with 4.7 million ITUs. The major part of unitised transport in the EU is performed on roads. Germany’s rail and road transport performances of unitised cargo are more than double that of any other Member State. The rail share in unitisation is high on the North‐South axis. Con‐ tainers and swap bodies are by far the most important rail loading units. In several Member States, over 50% of the container traffic is accounted for by maritime transport (Figure 7).

Figure 7: Intermodal Transport Units (ITUs) forwarded at EU-27 level*, by mode of transport, 2005

In order to evaluate the importance of unitized transport in total goods transport it is useful to have a look at their shares in the total tkm performed in 2005. Norway is first among European countries with 37% whereas Spain is first in the EU with a share of 33%, closely followed by Germany, Italy and the Netherlands with shares between 27% and 29%. This group of countries seems to feature a developed level of containerization on North‐South axis, starting in Scandinavia and ending in Spain and Italy. For many other countries, often located at the EU’s outer borders, this share is below 3%. In abso‐ lute terms, highest performances in unitized traffic expressed in tkm are registered in Germany (25.8 billion tkm), Italy (9.4), France (8.7), Spain (3.8), Sweden and Austria (3.7), accounting together for over 80% of the EU’s performance16.

16 Promit D53

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3.5. Criteria and classification of Best Practice cases Intermodal topics for Latin America have been presented and discussed in ENABLE fo‐ rums. Intermodal aims at changing modes of transport to more environmental friendly modes, such as rail, short sea shipping and inland waterway, combined with road trans‐ port. Prerequisite for combining different modes is organization of multimodal termi‐ nals with the application of information and communication technologies. Identifying and quantifying the actual benefits to all players such as transport business, cargo own‐ ers and public administration is needed, also the commitment of all these stakeholders in order to put together a plan of action to be taken with necessary investments and per‐ formance goals. One big issue is support from government to the logistics sector in gen‐ eral. It is necessary to create a pressure to the public sector by associations, port com‐ munities, research institutes, local authorities etc. Main areas of (European) best practices and innovations that seem to be of particular interest and priority for the LA region are: • Design of logistics chains utilizing intermodal transport corridors (rail and wa‐ terways) • Business models and service concepts more suitable for intermodal logistics net‐ works • Systems for connecting port operations and shipping operations to logistics net‐ works by utilizing advanced information technology (ITS) • Real time information systems for managing and controlling the total door‐to door transport chains; • Standards and standardization of procedural issues • Dangerous goods handling systems and tools • Container handling systems and security green lanes. Port activities are complex. LA ports are working to combat bureaucracy and lack of communication among the various players in the ports. EU benchmarks of Single Win‐ dows and Port Community Systems are useful tools for the development. Single Win‐ dows concept serves the clients and authorities. Port Community System simplifies commercial and operational transactions as well as coordinates the container transport flows inside port terminals and optimizes the respective operations. Main issues and priority areas for improvement of railways are: • Investment in coordination of the various railway lines and companies. • Improvement of the connectivity and access to the railway networks across the country • Tariffs harmonization (with particular emphasis on setting upper limits and deal‐ ing with the captive shippers) • Settling some economic and financial issues particularly as regards the types of concessions given to private operators. International transport connections base today on flows to main European and US hubs. Distribution to the rest of the world is based on these connections. This was epitomized by saying that “a Brazilian chicken exported to South Africa has to pass via a hub in Am‐ sterdam”.

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The Rio de Janeiro Conference identified a number of specific thematic topics where the European and Latin American business cooperation can be promoted: Port development and management; Among the systems and concepts most likely to be the “front runners” in this Thematic Area are: Port Community Systems, new business models for ports management, the encouragement and promotion of PPPs in port infra‐ structure development, ICT applications for port and terminal management, and most notably the “paperless port” concept, and finally e‐freight applications. Balancing the transport matrix; This expression means measures to rebalance the modal split of freight transport in the region by giving more emphasis towards the environ‐ mental friendly modes of rail and short sea shipping. In this respect, it was recognised that the EU’s experience has a lot to offer in terms of both success and failure stories. Regulatory issues: The transport sector in LA countries, especially freight transport and logistics, is under serious strain to introduce more competition and to stimulate compe‐ tition in all sectors. Drawing from the European experience in all these fronts would be a very useful area of cooperation including actions to put in place relevant legislation. The European experience in setting up and operating PPPs is a particular case for imminent application. Planning of new transport infrastructures and above all new transport international links and connections; The international transport connections between LA countries and their markets in the rest of the world need to be restructured taking into account the emerging new economic geography of the region and the rest of the world. This is an action that is primarily regulated by the private sector (forwarding companies, shipping lines, etc.), but the National and International governments (notably the EU) can play a useful role. Short Sea Shipping and Coastal Shipping: This thematic area is mentioned separately due to its great potential in serving intra‐regional transport flows and balancing the O‐D ma‐ trix (modal split) easing up the burden on land networks. Again, the European experi‐ ence (with programs such as Marco Polo and Motorways of the Seas) can be of value. . Short Sea Shipping is an area of interest for EU – LA cooperation Putting in place new Logistics concepts and services; the operation of an efficient freight transport system relies heavily on efficient supply chain management and logistics net‐ works. New Logistics concepts and services as well as new business models such as: “collaborative logistics”, forward and reverse buyer‐to‐buyer and seller‐to‐seller co‐operations, are of importance. An added objective will be to increase capacity utiliza‐ tion and shared transportation services so as to reduce the movements of empty con‐ tainers.

The aspects mentioned above have been taken into account, while considering appro‐ priate European best practices to be presented in Chapter 4. Furthermore, the chosen best practice cases meet the following general requirements and criteria set by the pro‐ ject: • Intermodal transport: current practices, strategies, concepts, projects and initia‐ tives should address complete intermodal transport chains or parts of them. Co‐ modal/mono‐modal and multimodal solutions can be also relevant, for co‐modal solutions and the ones which are transferable to intermodal transport • Strong relation to the topic

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• Improving quality and/or efficiency of intermodal transport • Coverage of intermodal modes (rail/road, inland waterway and shipping) • EU ‐ LA corridors coverage • Feasibility: technical, operational, organizational and financial feasibility.

Table 2 characterizes the key barriers and challenges of LA transportation identified in project. These challenges and barriers presented are divided into three categories: In‐ frastructure, Operational, and Institutional and Regulatory. In addition, the appropriate best practice cases of each challenge and barrier are indicated.

Table 2: European Best Practice cases according to LA needs and challenges

BARRIER BRAZIL ARGENTINA OF

SYSTEM TYPE TRANSPORTATION

Problems with size of runway Limited articulation between airport that hinder direct cargo the domestic and international flights to other continents, forc‐ air transport markets due to ing the use of Airport of Viraco‐ the two‐airport system in Bue‐ pos. nos Aires. Infrastructure

Brazil as a hub port in Latin Small amount of exports with a America for transit cargo. profile compatible with the use of air transport.

Transportation provision for air Higher costs of maritime trans‐ cargo is limited, since most of port (2005‐07) have coincided

transport the cargo is transported by pas‐ with apex of air sector crisis. senger aircrafts. Currently, much lower costs of Air maritime transport are a strong disincentive. Operational Provision of air cargo at most Number of flights offered in the airports is less than demand, domestic market is still (March causing the load in most cases be 2010) below the level of 1998, transported by road to an air‐ when touristic destinations are port that concentrates cargo excluded. flights to and from abroad.

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­ Additional charge for storage Rapid and subsequent changes and wharfage charges on import. in the domestic air market over Regu

the last decade. Operators have

appeared and disappeared and from the market, including changes in ownership that have latory blocked the consolidation on the cargo market. Institutional

General road conditions are pre‐ Capacity problems in metro‐ carious. politan highways leading to the ports of Rosario and Buenos Aires. Expansion of capacity around Rosario is urgent, as well as expansion of parking Infrastructure

and waiting facilities for trucks.

Lack of supervision of the limit Need for enforcement of load loads carried by vehicles, which restrictions on roads. Lack of hinder the road structure and compliance affects the econom‐ transport reduce the competitiveness of ics of maintenance and reduces companies within the limits. the competitiveness of truck Operational Road operators complying.

Excessive bureaucracy in inter‐ Excessive bureaucracy in inter‐ ­ national transport. national transport.

Not infrequently, border con‐ Regula tory trol of driver´s migratory pa‐ pers may delay cargo already and Institutional cleared. Transposition of rail freight ‐RHINE‐ Inherited infrastructure built ‐HUPAC through the São Paulo city could CONTAINER 80‐100 years ago. Coverage is ‐POLZUG be facilitated by the “ring rail” in ‐BOXXPRESS good (density of demand in the São Paulo state. south of the country isn’t likely

to justify additions). Bringing Need of warehousing areas and parking coordinated with port new branches into service operation. should be carefully assessed to avoid compromising current density of use.

Interface with urban areas, Rail access to terminals in ‐BILK Com‐ where problems, such as inter‐ greater Rosario needs urgent biterminal sections with city streets and expansion and adaptation. This ‐COCA‐COLA occupied the tracks of the field, issue is a key for greater use of transport

persist and thereby reduce the the entire railroad network. efficiency of the system. Railway access to Buenos Aires Rail Infrastructure Bi‐oceanic rail corridor needs to ‐HUPAC is clogged by the operation of metropolitan passenger ser‐ be promoted. ‐POLZUG vices. ‐DB‐Schenker ‐KUEHNE &NAGEL Guidelines for railway expansion ‐ HUB Zahony Rail access to the new con‐ in the Midwest. ‐ BILK Com‐ tainer port in La Plata, equally biterminal inherited, should receive atten‐ ‐POLZUG tion.

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Rail access to port of Sepetiba. ‐BOXXPRESS Rail network which has different Rail links from Argentina to sizes of gauges of the neighbor‐ ‐HUB Zahony northern Chile, Eastern Bolivia ing countries and some national and Paraguay, in fair and good ‐HUPAC meshes well. condition, but underutilized. ‐HUB Zahony Format of tracks, that are an‐ Rail connection to Brazil de‐ ‐BILK Com‐ cient, have curves and ramps pendent on transfer at rail yard biterminal which require speed reduction. at Uruguayana given the differ‐ ent gauges. International rail ‐POLZUG operations are not usual for rail ‐VOLVO operators and employees. Inef‐ ‐COCA‐COLA ficiencies in border controls may favor fear to reach this latent cargo market. Intensify use rail to stimulate the One issue that should receive rail and road integration. more attention is the possibility to develop a management sys‐

Low use of rail for freight be‐ ‐BILK Combi‐ tem to allow for shared infra‐ tween Brazil and Argentina. terminal structure use of different cargo ‐ HUB Zahony operators. One port operator ‐ VOLVO has shown interest in expand‐

Operational ing to rail operations. Large mining companies could as well consider becoming operators if legal framework is available.

Existing concessions, due to the

­ Extension of the current fran‐ types of contracts agreed, in chise schemes, or transition general, limit the role of the con‐ into a new model with greater Regula

tory cessionaires to maintain the in‐ emphasis on long term invest‐ frastructure, impeding their en‐ ments to adapt and renew in‐ and Institutional largement of activities. herited infrastructure. Construction of logistics termi‐ Need for strengthening the ­ nals for connecting waterways former river ports that where Wa to the highways and railroads. important in the past, espe‐

Need for construction of locks to cially on the upper section of Paraná river. Inland

improve inland transport.

Need of enlargement of spans Dimension problems of chan‐ and and / or reinforcement of the nels. Some stretches of Para‐ bridges pillars. guay river should be adapted to Infrastructure terways) (Ports Access by road and rail net‐ ‐POLZUG reduce sharp curves and in‐ crease safety. works to ports and inland ter‐ ‐BOXXPRESS minals. ‐ONSTRURAIL ­ ­ Shipping is not competitive Reliability and visibility of wa‐ p Waterborne al O tion era enough with the road system. terways would require tracking systems for cargo status and

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Need to improve inland sections ‐RHINE‐ of inland waterways with exist‐ CONTAINER ing operation and with potential ‐CORMAN to operate.

Delays in issuing environmental Intermittent reluctance of Mer‐ licenses hinder the navigation cosur members to facilitate potential of waterways. navigation of the upper section Tax levied at ports in the reload‐ of Paraguay river. Potential Regulatory ing of goods transported by wa‐ market for bulk transport on waterways is likely to be sig‐

and terways; it is not imposed on the

goods transported by rail and nificantly larger but linked to road. international traffic rather than domestic. Rules for hiring of manpower in the public ports that generates

Institutional excessive labor costs. Problems in land access are crit‐ Problems in road access and ical to port operations. highways links in metropolitan areas of Rosario and Buenos Aires. Congestion, overlapping ‐BOXXPRESS with local traffic, entrances to ‐VALENCIA terminals in some cases still. ‐BOXXPRESS Numerous Buffer yards for

trucks have been built but the problems remains. IT to coor‐ dinate origin‐destination tim‐ ing may apply. Cabotage) Problems in access routes, such Berths of container ports Infrastructure as maintenance and deepening around Buenos Aires cannot and

of channels and berths. yet fully accommodate 7100‐ TEU ships already operating. Course Studies for economic and envi‐ Lack of storage containers. ronmental feasibility of new port Problems in access routes. Long

areas.

Much of the operation in stuffing Weak coordination procedures

Maritime and stripping of containers is in for receiving and delivery of port, which hinders the opera‐ container terminals in exports. and

tion modes, facilitated by the Potential for technology ap‐ unitization of cargo. plied to customs controls and procedures. (Ports

Need of feeder service of the Legal definition of containers loads with Argentina. as transport equipment, al‐ though recently improved, still confusing.

Waterborne Little use of inland ports due to ‐RHINE‐ Port of Buenos Aires area is Operational difficulties in connection with CONTAINER considered a regional hub. other modes of transport. ‐CORMAN

Encourage the waterway trans‐ ‐RHINE‐ CON‐ Difficult to accommodate the port through the Paraguay River TAINER new vessels spokesman con‐ to Argentina. ‐CORMAN tainers.

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Lack of clear definition of the ‐GERMAN Road congestion around main model of private participation in TERMINAL ports (greater Rosario and Bu‐ port terminals in both the public POLICY enos Aires). ports and outside the port area.

Existence of legal restrictions on cabotage by foreign vessels. Lack of leasing areas and facili‐ ties. Necessity of review and update

development and zoning plans. Strategy deployment of new ports; no guideline that limits ‐SKEMA competition and complementari‐ Regulatory ties between existing ports and ‐STORA‐ENSO and

new ports. Issue of port security concern to operators of port terminals, es‐ pecially in relation to additional costs and their impact on com‐ Institutional petitiveness. Problems of communication and information flow at ports.

­ Lack of points of primary and Size’s restriction of the parking

secondary storage nodes. lot of the Cristo Redentor bor‐ Necessity of support structure of der. ture intermodal terminals in the Infrastruc “road ring” of São Paulo State.

Lack of adequate operational Incipient congestion at border

­ safety. posts.

tional Incipient development of logis‐ Opera crossing tics zones.

Non standard systems and doc‐ ‐PORT INFO‐ border uments. LINK

and ‐VALENCIA‐ PORT IT ‐SHORT SEA XML Regulatory

Opening hours at border posts and

Warehousing insufficient or inadequate to the needs.

Lack of harmonization of control

Institutional services and support provided by organizations involved in the operations of customs control.

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Minor use of the International Cargo Manifest / Customs Tran‐ sit Declaration International.

Best Practice descriptions are divided into three parts: 1. Fact box which gives the basic information about the case and helps the reader to decide whether it is worth to read the whole case description. Fact box includes Name/technology/approach/concept, Implementation date, Main achievements, Main innovations, Motivation, Main companies involved, Transport / Geographical characteristics

2. The case description the starting point (targets of the case), mode selection background and used equipment and finally the results and experiences from this case: Main benefits, Market success factors, Strengths and weak‐ nesses, IT‐ Applications, Collaboration between actors, Supply Chain Man‐ agement, Contract agreements, Quality issues, Environmental impacts, Safety and security

3. The last part discusses about the transferability of the case in LA and gives references and contacts.

17 best practice cases have been identified, which have been grouped into four groups according to their topic. Furthermore, 4 policy oriented cases have been added:

Table 3: Overview of European Best Practice cases described

Type of case Case Acronym

Company Cases: Transport system man‐ Coca Cola, StoraEnso, Volvo aged by shipper

Operator Cases: Transport system man‐ Hupac, Rhinecontainer, BoxXpress Germany, aged by transport operator Polzug, Construrail, Corman, Bilk, HUB Za‐ hony

Logistics Service Cases: Transport system Cargo Domino, DBS, Kuehne&Nagel managed by Logistics Service Provider

(LSP)

Information Technology (IT) Cases: Fo‐ Port Infolink, Short Sea XML, Valenciaport cus in IT IT Platform

Policy Strategies Swiss Case, German Terminal Policy, Port Governance Models, Port of Hel‐ sinki/Vuosaari Harbor

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4. BEST PRACTICE CASES 4.1. Company Cases 4.1.1. Volvo Fact Box

Name/technology The "8" Train and "Eurobridge" approach / concept Implementation Fully operational since 2002 date

Main achievements Organizing efficient rail operations through 5 countries, with 5 independent rail operators, with governments demanding return on rail infrastructure investments, and with several unions of transport workers. Robust solution by having two operations working in parallel, the "Euro Bridge" acting as a back‐up for the "8" Train when required. Main innovations Harmonization of rail operations in 5 countries with different cultures and languages. Common quality handbook for complete operation used by all operators. Organizational set‐up and use of KPIs that have resulted in very reliable services. Motivation Reducing logistics costs Reducing the environmental impact of transport

Main companies Volvo logistics involved Rail: Green Cargo, Railion Denmark, DB Cargo, Railion NL, SNCB Short Sea Shipping: DFDS Tor Line Transport / Linking Sweden to Belgium Geographical Intermodal: Road, Rail, Waterborne characteristics

Starting point Volvo's production is based on "built‐to‐order“. The distance of Volvo factories to the market was a starting point to the planning of train transports between suppliers (Swe‐ den) and the market (Central Europe). Improved transport efficiency is decisive to com‐ pensate the distance handicap. Business from peripheral areas, have to pay transport costs twice; sourcing distance and market distance.

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Figure 8: Volvo Supply chain

Targets of the case Volvo's factories locate in Sweden, comparatively far away from their market. The pur‐ pose was to create cost effective and environmentally sustainable transport solution to the company. The solution needed to: • be at least as fast as the old system, • be more cost effective, • be reliable, • have more capacity, • be sustainable, • combine products (cabs) with production material, • be possible to develop further.

Case description

Mode selection background The Volvo Logistics solution for transport between the factories and distribution centres was solved by rail operation called “8”. The "8" operates two trains per day in each di‐ rection connecting Umeå, Gothenburg, Ulofström (Sweden) and Ghent (Belgium). The transport route is strictly scheduled (Figure 9). The “8” operates two trains per day in both directions Olofström‐ Gothenburg‐Olofström and Olofström/Umeå‐Ghent‐Olofström/Umeå Transport between Gothenburg and Ghent is crucial to Volvo’s operations and as a back‐up transport solution Volvo Logistics uses short sea shipping operation EuroBridge offered by DFDS Tor Line.

Equipment There are in total 210 wagons, the same for both the Gothenburg and Olofström flow and there are 2 departures 5 days per week from each place. 22 440 wagons are trans‐ ported every year between Olofström and Gothenburg carrying 67 320 containers, spe‐ cially built to be able to take more cargo compared to road transports. Between Olof‐ ström and Gent is every year 16 960 wagons transported that equals 50 660 containers + 4 800 multipurpose wagons (big conventional wagons) taking truck cabs from Umeå to Gent with back load of racks and cars. The amount of wagons can be changed accord‐ ing to needs.

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Results and experiences

Figure 9: The schedule of Train "8"

Main benefits • Better efficiency, measured in reduced lead times, • The reliability with precision better than 95 % with very little warehousing • Reduced round trip time • Compared to road transport, the solution is less environmentally harmful • The solution is flexible and able to handle fluctuations by carrying different number of wagons • The solution has potential for expansion • The EuroBridge as a back‐up for "8" has reduced the lead time from 42 to 36 hours, enabling the shipping line to call extra port (Brevik, Norway). 1100 truck movements from Gothenburg to Norway have been removed.

Market success factors • Strategic decisions and persistence from Volvo Logistics • Willingness to adapt in all participating rail operators • Organizing the operation with clear door‐to‐ door responsibilities

Strengths and weaknesses Volvo case is today still a closed circle, serving few companies and few destinations. The concept is built to serve Volvo, and other users are rather limited. The management and coordination is strictly in the hands of Volvo (Volvo Logistics). Strict rules and standards limit both new clients but also new service providers. The corridor works fine as long as the volumes are sufficient to run the corridor. If this balance will be broken, the basis of the whole system might change.

IT­ applications A comprehensive and transparent data handling is critical success factor in the opera‐ tions. The challenge is a common information base for all material flow patterns glob‐ ally.

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A4D (Applications for Distribution) is the world’s first distribution system that is totally integrated with order and production systems. Volvo Buses has been using A4D since autumn 2000. This e‐business platform is all set to help other customers such as Volvo Cars to further improve the precision of their deliveries and to plan the physical distri‐ bution processes. They are developing a new IT‐ tool, called "Atlas", which will always have updated real‐ time information about all relevant activities in the material supply process, and will enable us to provide proposals regarding the best transport solution for each individual customer.

Collaboration between actors Volvo Logistics, a subsidiary to Volvo, acts as the manager of the supply chain. Volvo lo‐ gistics interacts with Green Cargo, who is responsible to organize the rail transport ser‐ vices from origin to destination.

Figure 10: The roles of actors in a Supply Chain17

Contract agreements Volvo Logistics sets many requirements to their transport companies. This way they achieve their qualitative requirements, but also the domination of the chain. They have set the following (minimum) requirements: • At least Euro 2/US98 for road transports • All major suppliers must have a third party certified quality management system according to ISO 9001 • All major suppliers must have a third party certified environmental management system according to ISO 14001/SmartWay or equivalent standard • Fulfilment of EU Directive 1999/32/EC and MARPOL 73/78 Annex VI for maxi‐ mum sulphur content in bunker fuel for sea transports (May 19th, 2006). • Fulfilment of national and international legal requirements concerning road safety. Carriers must present policies and a dedicated work around our focused areas: Speed limits, Use of seat belts, Driving‐ and resting times, Alcohol‐ and drug policies, Securing of loads and Dangerous goods.

17 Gina Hernefjord, (2007), Volvo Logistics

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• Apart from these requirements, they also require additional "Binding documents for carrying Volvo Logistics goods".

Quality issues Volvo uses two Quality criteria: • Reliability of service in time, 95 % is considered as good • Quality of cargo delivered in origin and destination. The transport service providers have been involved with the Volvo Damage Prevention at the Risk Management department

Environmental impacts Compared to road transport, the solution is environmentally harmful.

Safety and security Minimum requirements are set to all partners (see above).

Transferability to LA • The solution as such is not transferable to other situations, since it is developed for the special need of Volvo Logistics. • The concept and approach where a shipper with significant volumes wants to improve the logistics performance to establish efficient and sustainable solutions is most definitely transferable. • The business model (strategic partnership between shipper and transport service providers) is transferable. This is a type of business relationship that has been developed in many industries. The automotive industry was one of the pioneers, when number of suppliers was greatly reduced and in many situations single suppliers were chosen for strategic equipment. This required a new type of contractual cooperation – strategic partnerships – where there are transparency and “sharing of profits”.

References http://www.promit‐project.net/ http://www.eia‐ngo.com/intermodal‐freight‐transport‐logistics‐best‐practices.html

4.1.2. StoraEnso Fact Box

Name/technology, Stora Enso System Traffic / Baseport and NETTS approach/concept

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Implementation 2000‐2006 (incl. Baseport) date

Main achievements Concentrated cargo flows reduced costs. Transferring cargo from road to rail Reduced lead times Improved environmental performance Main innovations Density of cargo by using SECU and special rail wagons Cargo handling concept and technology in port operations (250‐400 TEU per hour) Vessels designed to support efficient cargo handling Emission reducing vessel technology Motivation Reducing environmental impact of transportation and distribution Reducing logistics costs and lead times Main companies Stora Enso, involved Green Cargo, Wagenborg, Cobelfret, B&N, Nordsjöfrakt, Ports of Gothenburg, Zeebrügge, Tilbury, Immingham, Kotka, Ajos, Oulu and Lübeck. Transport / Linking the Nordic countries to Continental Europe and UK Geographical Intermodal: Road, Rail, Waterborne characteristics

Starting point Stora Enso is an integrated paper, packaging, and forest products company, which con‐ centrates mainly on B2B customers. A global presence provides local customer service for customers. Although, most of the production capacity is located in Finland and Swe‐ den, production facilities are also located in other parts of Europe, North and South America, and Asia. The distribution structure of first implementation of the Stora Enso supply chain con‐ cept (Figure 11), called Baseport, was not considered to be optimal. To tackle this prob‐ lem, North European Transport Supply System – NETSS, was introduced. Following fac‐ tors influenced the solution: • Customer demands (frequency and quality) • High transportation costs and cost development • Concentrating the cargo on fewer ports • Need to combine Finland and Sweden flow to achieve synergies

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Figure 11: The first implementation of the Stora Enso supply chain concept

In Baseport, Local Distribution Centres (LDCs) were established close to customers to be able to achieve customer demand‐driven, quick response logistics operation. In addition, LDCs also acts as a buffer in the supply chain, which allows demand to be responded ra‐ pidly. Excluding few situations, where direct truck transportation is needed to respond the customer demand, Stora Enso has decided to base its logistics operation on a multi mo‐ dal supply chain. There were two main reasons for this: • Direct truck transport does not promote the density of cargo, which is a key fac‐ tor for lower cots level. • Direct truck transport has a more significant environmental impact. This would cause a contradiction with one of the key success factors of Stora Enso, namely sustainability.

In Baseport, three vessels operate with six sailings per week in both directions.

Targets of the case After implementing the Baseport operation and the merger of Stora and Enso, the distri‐ bution structure was not considered to be optimal. This led Stora Enso to implement the new joint transport supply chain system for the Nordic Mills that apply a joint Distribu‐ tion Centre structure close to continental Europe and UK markets. The targets of NETTS were: • Cost cut of 10‐15 % • Increased frequency and shorter lead times • Better service and product quality

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Case description Mode selection background The Stora Enso supply chain concept was first implemented in 1990’s for transportation between the production facilities in Sweden and customers in continental Europe. Base‐ port allowed efficient multi modal transport system that integrates Swedish rail and North Sea traffic. The new cargo handling technique for rail transport is based on the SECU (Stora Enso Cargo Unit). The unit, capacity of 80 tons, was developed in coopera‐ tion with the Swedish Railways. The SECU is a weather protected cassette ISO certified for 93,5 gross tonnes (3,6x3,6x13,8 m) and with the ability to accommodate more cargo than a conventional rail car of 40 foots ISO container. Combined with shipping (special SECU designed RoRo vessels) operations between the ports of Gothenburg (Sweden) and Zeebrugge (Belgium) this gives both an environ‐ mental friendly and cost effective solution for Stora Enso transport. In Baseport three vessels sailed six times per week in both directions. This provided an adequate fre‐ quency and transport capacity for Stora Enso Swedish mills. To complete the distribution network, three rail routes, Dalarna, Värmland, and Hylte routes are used to transport goods to the Port of Gothenburg, which was expanded with a new loading quay and rail link for handling the SECUs and trailers (57 000 m2). Load‐ ing and unloading of the vessels takes place at the stern and can be done with the aid of double roll on‐roll off ramps. The time required for loading and unloading the vessels is less than six hours, which reduces the lay‐time and increases the sea‐time. Zeebrugge has an important strategic position, both in terms of its geographical prox‐ imity to Stora Enso markets and through its access to the European rail network. In ad‐ dition, the port is also served by intercontinental shipping lines and several ferry lines. This enables the flow of finished products and raw materials to be coordinated more efficiently and ensures Stora Enso a better purchasing position. Together with the in‐ vestments on double ramps, SECU‐ and trailer parking areas, warehouses and ICT infra‐ structure, Zeebrugge is a transit centre to other inland LDCs for Stora Enso. The object of the Baseport for Stora Enso was to become independent of the conven‐ tional road transport and searched for a new cost efficient and sustainable (environ‐ mental) system and, that ensures high service (frequency, visibility), high quality (reli‐ ability above speed) and high flexibility (capacity). Stora Enso started Baseport system in 2000 and it was fully operational year 2001. As mentioned above, to reach the goals, Stora Enso: • established LDCs • chose waterborne and rail transport, • introduced Stora Enso Cargo Unit (SECU), • started to use an info logistics system (INFOLOG), and • developed loading systems. Due to the success of Baseport, Stora Enso was seeking the possibilities to extend this concept to a larger part of Nordic operation, called NETTS –North European Transport Supply System. Figure 12 illustrates the relationship of NETTS principle and the starting point.

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Figure 12: Starting point and NETTS principle

Phases of implementing the NETTS Phase 1 of NETTS was started in July 2005 and involved the ports of • Kotka • Gothenburg • Tilbury • Immingham • Zeebrügge

And the following routes (in addition to those of Baseport): • Gothenburg – Tilbury • Gothenburg – Immingham

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Phase 2 started operations in July 2006. Now the first of the new vessels were placed in service and the following new ports were included: • Kemi • Oulu • Lubeck • Antwerp

Introducing the route • Kemi/Oulu – Gothenburg – Lübeck

Phase 3 (January 2007) route from Kotka to Lübeck.

Results and experiences The operation showed the technical and operational feasibility, as well as economic vi‐ ability. The results included reductions in costs, lower emission levels, better reliability, higher capacity and more flexibility in handled cargo types. The systems has experi‐ enced to be robust a reliable and it has provided a solution for short sea shipping opera‐ tions (Figure 13).

Figure 13: Cost comparison in transportation chain

Main benefits • Better customer service and quality (less errors in handling, shipping) • Improved frequency and reliability • Economical benefits

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o Savings in lower tallying costs and faster process o Lower inventory levels o Faster delivery time and reduced round trip time • Better supply chain visibility enabling new customer service • Improved environmental profile

Market success factors • Stora Enso Cargo Unit (SECU) • Multi modal supply system • Unit level identification • Visibility • Frequency • Reliability • Local Distribution Centers • Startegic decisions and willingness to innovate • Development of an integrated standardized solution

Strengths and weaknesses The logistic solution conceived by Stora Enso, as well as the model LDC based model, could be extended to other manufacturing industries and countries. On the other hand, the high costs of setting up this rather complex system of intermodal supply chain, re‐ quires certain volume to be cost effective. In addition the SECU box is designed for Swedish railways. The use of SECU box can be a weakness, because its more generic utilization can be lim‐ ited. If the company has balanced volumes on both directions, the benefit looks clear. But if not, the boxes must be returned empty.

IT­ applications To automate a number of the handling operations in the supply chain, the SECU was in‐ troduced. In the inside of a SECU, automatic loading are configured with a set of grooves inside. A set of “rulers” lift the rows of paper rolls and move them inside the SECU. Well inside, the rulers are lowered into the grooves and withdrawn. This secures fast and safe loading of the SECU. The supply chain is supported by the management information system INFOLOG, which is illustrated in Figure 14. Visibility in a long and complicated supply chain is ensured by adding goods ID, box ID and an integrated IT system. The entire operation is designed to provide the required frequency and reliability in order to ensure the appropriate level of customer service.

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Figure 14: INFOLOG System

Collaboration between actors Collaboration between actors is required in all phases of supply chain; Ports of Gothen‐ burg and Zeebrügge, as well as SeaRo, needed to invest on terminal facilities (e.g. ramps etc.). Also train operator needed to use special trains to bring the SECUs from the mills to Gothenburg.

Quality issues One ambition of NETTS was to offer better service and product quality.

Environmental impacts Stora Enso is committed to sustainability – economic, environmental, and social respon‐ sibility in every aspect of doing business. Compared to road transport, the multimodal transport solution is environmentally harmful. In addition, the implementing of NETTS should result in a new environmental friendly infrastructure providing a sustainable al‐ ternative to the congested road network.

Transferability to LA The logistic solution conceived by Stora Enso could be a starting point for designing and redesigning logistic supply systems also in LA. The solution can also be extended to other industrial sectors. Also the model based on Local Distribution Centres is widely applicable. The system can be applied also using ISO containers, instead of SECU boxes, if not adaptable to railway network.

References http://www.promit‐project.net/ http://www.eia‐ngo.com/intermodal‐freight‐transport‐logistics‐best‐practices.html

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4.1.3. Coca Cola Fact Box

Name/technology, Coca Cola Drikker AS – Intermodal transport on long distances approach/concept Implementation The concept is evolving since 1998 date

Main achievements 75% of total distribution of Coca‐Cola distribution to Norway is handled by intermodal transport 600 000 euro cost savings each year Exploitation of synergies of Coca Cola and Mack Brewery logistics network Main innovations Flexible transport concept using slower and cheaper transportation modes, whenever possible ‐ more expensive and quicker modes are still being used, when needed. Shippers collaboration creates a win‐win situation for both parties Motivation Optimal trade off between transport price and offered services in respect with location decisions and durability of the products. Promoting CCD’s environmental engagement by using greener transportation modes. Main companies Coca Cola Drikker As, Mack Breweries, Logistics Service Providers and involved Shipping Agencies Transport / Norway Geographical Sea/Rail/Road characteristics

Starting point Coca Cola Drikker (CCD) was established in Norway 1937 and immediately made ar‐ rangements for producing and bottling with different breweries in Norway. However, after the disruption in late 1990s, CCD own production plant in 1998 and reorganized its distribution in Norway. The main production plant is located in Lørenskog just outside Oslo, Norway. The output volume is 315 million litres per year divided on 29 different products. In the production there are 150 employees and production capacity is 100 000 packing cases in 24 hours. In addition to production on its own plant located at Lørenskog, Coca –Cola Drikker AS has agreement on licence‐production with Hansa Borg in Bergen, Kristiansand and Sarpsborg and with Mack Breweries in Tromsø. About 30 million litres of the produced volume are distributed among customers in the northern part of Norway consisting of Nordland, Troms and Finnmark counties with a total of 460’000 inhabitants located on 106’715 km2 (5.3 inhabitants/km2). These customers are served from a joint ware‐ house between Coca–Cola Drikker AS and Mack Breweries in Tromsø. The distance be‐ tween South‐ and North end of the Norway is 1755, which together with low population density, is well‐suitable for intermodal (about 96% is transported by using intermodal modes). (see Figure 15).

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Figure 15: CCD’s production and distribution map

Targets of the case The objectives of Coca–Cola Drikker AS for using intermodal services are to get an opti‐ mal trade‐off between transport price and offered services in respect with location deci‐ sions of the production plant and warehouses in Norway, as well as the durability of the products. Intermodal transport provides the opportunity to promote Coca–Cola Drikker AS’s use of environmental friendly transport solutions (“green transport”).

Case description Mode selection background The soft drinks produced in Lørenskog for the markets in the northern part of Norway are either carried by road, intermodal road‐sea‐road, intermodal road‐rail‐road or in‐ termodal road‐rail‐sea‐road services. On the intermodal road‐rail transport Coca–Cola Drikker AS has dedicated wagons on the train. The freight price for the wagons has to be paid, whether there are goods on the wagons or not. For the sea transport there is al‐ ways capacity available. The combinations of different transportation modes are as fol‐ lows: • Intermodal road‐sea road service (1899 km, products with long durability). This supply chain is using ship on the main transport link from the port of Oslo to the port of Tromsø. Truck transport is used from the Lørenskog plant to the port of

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Oslo and from the port of Tromsø to the warehouse. NorLines organises the sea transport adn CCD and NorLines organise the pick up and delivery transport between the production plant and the port and between the port and the warehouse in co‐operation.

• Intermodal road‐train‐sea‐road service (1633 km, products with limited durability). This supply chain is using train on the main transport link from Alnabru intermodal rail terminal in Oslo to Bodø and ship on the transport link from Bodø to Tromsø. Truck transport is used from the plant in Lørenskog to the Alnabru rail terminal in Oslo and from the port of Tromsø to the warehouse. A forwarder, Tollpost Globe, organises the intermodal road‐train‐sea‐road service from the production plant in Lørenskog to the warehouse in Tromsø. The rail service from Oslo/Alnabru to Bodø is served by the rail company CargoNet. The forwarder has a fixed contract on a given number of railway wagons on each departure from Alnabru/Oslo to Bodø, with CargoNet. Of these wagons a certain number is dedicated to the products of CCD.

• Only truck transport (1639 km, urgent transports). This service is for urgent transports and is using only truck from the plant in Lørenskog/Oslo to Tromsø. This service, dedicated for small volumes is being used occasionally in summer times and organized by CCD.

The information exchange between CCD, the forwarder and the shipping agency covers the product lasting ability, which eases the transportation mode selection. To be able to arrange solid services, following information needs to be available: transport time, tem‐ perature, number of shipments a week and transport volumes. The main contract is last‐ ing for 3 years, but on the background of changes in markets (volume, price etc.) the service requirements are negotiated and settled for one year at the time. For the truck only transport the forwarder uses either its own trucks or trucks on fixed contract. The departure (once a week) of the sea transport from Bodø to Tromsø is coordinated with arrival of the freight train from Oslo. The forwarder provides the intermodal road‐rail‐ sea‐road service between the Coca‐Cola Drikker AS production plant located at Løren‐ skog outside Oslo to the company’s warehouse in Tromsø.

Equipment The supply chains using ship and train has 23 feet’s containers loaded with 19 pallets in carrying units. Door‐to‐door transport only uses trucks, which are loading cargo in pal‐ lets. Both, train wagons and ships are standardised to handle these containers seamless, which allows almost 96 % of the volume from Lørenskog to Tromsø to be transported either by road‐sea‐road (79% or 6.0 million litres) or road‐rail‐sea‐road (17% or 1.05 million litres). Only 0.25 million litres (4%) is carried only by truck.

Results and experiences Business models define the service level, which forwarders and/or LSPs offer, what the target cargo segment is and what kind of business bonds needs to be established with the buyers of logistic services. There are four main business (see Figure 2) models in

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which different stakeholders could have different positions and perform different func‐ tions vis‐à‐vis customers18: • The Freight operator‐3PL Model • The Anchor Customer Model • The Agent Model • The 3PL/4 PL Model

Operator – 3PL Model – Rail Freight Operator and 3PL share business responsibility; 3PL makes agreements with clients

Service provider Service provider Forwarder, 3 PL… Forwarder, 3 PL… Sellers or buyers of the product Sellers or buyers of the product HUB 1 HUB 2 Rail freight operator

Anchor Customer Model — Freight operator makes direct agreements with clients (anchor customers) Sellers or buyers of the product Sellers or buyers of the product HUB 2 HUB 1 Rail freight operator

Agent Model – Agents of the rail freight operators make agreements with clients

Sellers or buyers of Sellers or buyers of the HUB 1 HUB 2 product the product

Rail freight operator Agent or intermodal Agent or intermodal marketing company marketing company

3 PL Model – 3PLs make agreements with clients and subcontracts the rail freight operator Sellers or buyers of the product Sellers or buyers of the product Rail freight operator Party responsible for overall corridor HUB 1 HUB 2 organization and client contact Service provider, Forwarder, Service provider, 3PL Forwarder, 3PL

Figure 16: Different Business Models (Lehtinen in Nofoma 2008)

Two of these business models are applied by the CCD. For the intermodal road‐sea‐road service between Lørenskog and Tromsø the service provided from the shipping agency is an “Agent model” (model 3). For the intermodal road‐rail‐sea‐road service between Lørenskog and Tromsø the service provided from the forwarder is “A 3PL and/or 4PL Supplier Model” (model 4).

Main benefits and costs CCD’s decision to use intermodal transport instead of only truck reduced transport costs (see Table 4) by 600 000 euro, given the services offered from both modes. Using inter‐

18 Lehtinen Nofoma 2008

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modal transport also give the opportunity to promote the use of environmental friendly transport solutions (“green transport”).

Table 4: Transport of products from CCD’s plant at Lørenskog to the warehouse in Tromso (mode, volumes and logistics costs)

In addition, CCD divides products into three groups in respect of product durability. These are: • Long durability products ‐ road‐sea‐road • Short duration products ‐ road‐rail‐sea‐road • Urgent transports – only truck

Strengths and weaknesses Following strengths were identified in CCD’s transportation concept: • Single point of contact per supply chain • Seamless transport solutions • CCD avoids the risk of underutilization of transportation capacity Following weaknesses were also identified: • Low frequency and long transportation times in sea transport • Lower punctuality of sea transport due to the changing weather conditions. However, this risk has been minimized by producing under license also in Tromso.

IT­ applications IT systems developed by the forwarder are integrated in Coca‐Cola Drikker AS’s supply chain.

Environmental impacts Compared to road transport, the solution is “greener”, which also allows CCD to promote its environmental friendly image.

Safety and security Security and quality in the transportation of goods and information are secured by bar‐ codes on the goods that are checked in several checkpoints. This allows CCD to obtain

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information on where the goods are in the supply chain at any time. In case of delays, both the forwarder and the shipping agency inform CCD.

Transferability to LA The results of this case study are transferable to LA. However, it should be kept in mind that some critical success factors and case specific circumstances need to be considered (e.g. distance to be transported between the plant and the warehouse in this case is con‐ siderable and Norwegian geographical characteristics are well‐suitable for intermodal transport.

References http://www.promit‐project.net/ http://www.eia‐ngo.com/promit.html Analysis of business models for three‐mode intermodal transport. Lehtinen, Jarkko; Bask, Anu; Leviäkangas, Pekka. Proceedings of the Nordic Logistics Research Network NOFOMA Conference, Helsinki, 4 ‐ 6 Jun. 2008 (2008), 16 p. Business models for rail freight – topology formulation based on rail freight evolution in the US and Europe . Leviäkangas, Pekka; Lehtinen, Jarkko; Thomchick, E.; Spychalski, J. Proceedings of the Nordic Logistics Research Network (NOFOMA) Conference. Reykja‐ vik, Iceland, 7 ‐ 8 June 2007 (2007)

4.2. Operator Cases 4.2.1. Hupac Fact Box

Name/technology Systems for combined transport approach/concept Implementation date Founded in 1967

Main achievements Hupac operates a network of 110 trains every day between Europe's main economic areas. Main innovations The business model structure is directed to cooperation with the forwarders and operators. Technological development: Mega wagon, two pocket wagons, flat wagon for 60‐foot containers Motivation Combining the advantages of road and rail. Shifting long distance traf‐ fic to the railroad in order to respond to traffic jams, shortage of driv‐ ers, rising energy costs and fiscal burdens. Sustainable logistics.

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Main companies Hupac Group comprises ten companies involved Main terminals and ports; own strategically located HUBs and terminals All major rail operators Forwarders Transport / All major destinations in Europe Geographical Linking Europe and Moscow, Russia characteristics

Starting point The core of the business is related to operate through the Swiss Alps. The company works to ensure that an increasing volume of goods can be transported by rail and not by road, thus contributing to modal shift and environment protection. Hupac was founded in 1967 and has 100 shareholders. The share capital amounts to CHF 20 mil‐ lion; 72% of this belongs to logistics and transport companies, while 28% is held by rail companies19. The Hupac Group comprises 10 companies based in Switzerland, Germany, Italy, Hol‐ land and Belgium. The head office is located at Chiasso, with subsidiary offices in Basle, Busto Arsizio, Oleggio, Singen, Mannheim, Cologne, Rotterdam, Taulov and Warsaw. Each company operates within defined parameters, so as to offer advanced solutions and maximize the efficiency of the whole Group’s response.

Targets of the case Hupac offers an efficient network for European freight traffic for the combined transport of containers, swap bodies and semi‐trailers and complete truck trailers. They empha‐ size the following arguments: • Environment • Quality • Jams in European main roads • Customer minded service • Safety and security

Case description Mode selection background The corridor network they offer is today a quite typical intermodal solution. The actors build up a natural corridor: shipping companies, port operators, terminals, rail opera‐ tors, trucking companies, forwarders and clients. The varying and voluminous client‐ and owner base has provided a solid volume base in the corridors.

19 http://www.hupac.com/PDF/Download/40years_HUPAC_E.pdf

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Figure 17: HUPAC network

Equipment The company has 6087 wagon modules and 13 main‐line and /or shunting locomotives. They have own terminals in nine locations. Additionally, the company works with ap‐ proximately 70 third‐party terminals. The Busto Arsizio‐Gallarate in Italy is the central HUB of the shuttle net. The terminal has: • Area of 240.000 square metres • Transhipment sidings of 11 x 540 x 760 m • Gantry cranes totally 12 • Capacity to handle 30 trains per day

Results and experiences Today, after more than 40 years from the start, Hupac20 is the leading intermodal trans‐ port operator through the Swiss Alps and one of the market leaders in Europe. The com‐ pany works to ensure that an increasing volume of goods can be transported by rail and not by road, thus contributing to modal shift and environment protection.

20 http://www.hupac.com/PDF/Download/40years_HUPAC_E.pdf

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With a workforce of 443 employees, Hupac operates a network of more than 110 trains each day between Europe’s main economic areas and between the harbours and the hin‐ terlands. The Hupac Group comprises ten companies based in Switzerland, Germany, Italy, the Netherlands and Belgium. The business model of Hupac emphasises the company's concentration of transports between terminals. This has given to forwarding sector an important role in the chain in focusing to client service and distribution. This strategic decision, the difficult connec‐ tions over the Alps, and their brand for green values, are important factors for their suc‐ cess. Having forwarding sector as their partners and clients instead of competitors is one of the cornerstones for their success. Market success factors • Strong operators playing together • Strong transport volume base • Efficient solutions • One operator coordinating the chain between terminals • Environmental friendly brand • It‐ solutions supporting coordination and scheduling

Strengths and weaknesses - Hupac system seems to be a robust network. They have developed the network steadily and purposefully. Their brand emphasize green values and they seem to be more collaborative than competitive against the other logistics service pro‐ viders. - We see two potential, but very unlike, weaknesses in their business: A very dra‐ matic collapse of transport volumes, because of global changes in trade, might deteriorate their business badly. Another risk might come from inside the net‐ work: Some or few big owners of the company might withdraw and start to compete. This, however, seems to be very speculative argumentation, because the structure of the ownership is diversified.

IT­ applications The company has invested in IT ‐ development with the intention to monitor data with clients, service providers, terminals and other operators. They have developed tools like: - GOAL, integrated software solution for intermodal transport - CESAR, customer information system with links to 370 terminals - E‐train, satellite ‐ supported train monitoring system - E‐billing, to receive, review and enter invoice information into the billing system - EDIGES, XML‐ based data exchange system.

Collaboration between actors Hupac coordinates the intermodal corridor from terminal to terminal. The partners ‐ often part owners ‐ collaborate independently, but according to the network require‐ ments. The client service is mostly done by the forwarders.

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The terminals and ports are independently working according to schedules, most of them owned by partners. The railway operations are run by national or independent rail operations.

Contract agreements The involved actors are well‐ known big operators. It is not clear what kind of mutual agreements they are having together. However, it seems like the organisation is well structured with minor under lapping in work. The partners are often part owners of Hu‐ pac.

Quality issues The company seems to be undertaken to high quality. The main criteria are on‐time per‐ formance, reliable services, a minimum of technical failures and effective communica‐ tion.

Environmental impacts Hupac emphasizes the following environmental impacts in their services: traffic jams, shortage of drivers, rising energy costs and fiscal burdens. The impacts in figures are the following. Unaccompanied combined transport reduces CO2 emissions by an aver‐ age of 55% and energy consumption by 29%. The environmental impacts are estimated to be remarkable. The avoided emissions in tons of CO2 are 29149 tons, which is 65 % less than by using trucks. Totally the avoided heavy vehicles are estimated to be 47760, with a consequence of avoided fuel consump‐ tion of 10.9 m liters.

Safety and security The company highlights that safety is one of the top priorities in their services.

Transferability to LA • The core of the business, operation through the Swiss Alps is not transferable • Philosophy of reducing transit traffic and environmental problems caused by trucks can be applied • The development process of intermodal rail network takes decades • Business model where the rail operator concentrates only on traffic between terminals and forwarders take care of client service

References Systems for combined transport, leaflet (2008) [email protected] www.hupac.ch

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4.2.2. Rhinecontainer Fact Box

Name/technology, Rhinecontainer approach/concept Implementation In operation since 1978 (contract with DeCeTe including SLA date implemented in 2007)

Main achievements Quick, reliable and frequent intermodal transport to and from inland terminals via Rhine/Main Collaboration of many actors Steps forward in a very conventional sector Main innovations Service level agreements (SLA) Implementation of key performance indicators (KPIs) Motivation Undercapasity of ports in Maine Unreliable transshipment times in main Ports Customer are requiring reliable and frequent services that allows applying of JIT ‐concept Main companies Rhinecontainer, Wincanton, DeCeTe, H&S Container Line GmbH, involved Container Allianz Niederhein, Haeger & Schmidt International Transport / Scheduled Container Barge Services between the seaports of the Benelux Geographical and the various Rhine/Main ports. characteristics Inland Waterway

Starting point Container barge transport has benefited from a business model that combined ship‐ ments from different sendings and multiple clients, or cargo from several barge opera‐ tors on one barge. Historically, operationally cooperative firms outperformed outsiders, as they generated sufficient cargo to offer frequency and speed of services. The frag‐ mented nature of barge transport was overcome by forming partnerships, in order to offer extra (intermodal) services and better accessibility of the Hinterland. Over time, the importance of the terminals grew, as customers increasingly value their control of the supply chain from the seaport to distribution in the Hinterland. The result‐ ing business model implies that operators call at several seaport terminals and trans‐ port cargo to their network links, the inland terminals and beyond, with help of other modalities. This is what several major alliances have done in the past decades and still do today. Especially around 2003, take‐overs occurred and resulted in three main groups that act on the Rhine; (1) Wincanton (Rhenania, Rhinecontainer e.o.), (2) Reth‐ mann Gruppe (Rhenus e.o.), and (3) Imperial Reederei Gruppe. These large operators have sufficient cargo to occupy “their own” terminal. Therefore, the willingness to coop‐ erate with other actors is rather low. This also hinders the operations and entry of small, independent operators and competition. Smaller firms started to operate at the Upper Rhine, where competition is fiercer due to the prevalence of public terminals. This model has been slow to adapt, as there was

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overcapacity at the seaport terminals, and barge operators benefited from the flexibility of their rented fleet. However, the boom in China, growth of containerships and take‐ overs in the seaport terminals (preceded by a period of low investment) led to underca‐ pacity in the seaport terminals. This resulted in the current operational problems in seaports, shortage of personnel and problems with infrastructure, hampering perform‐ ance of the sector. Roundtrips also take more time as the amount of handling activities in the Hinterland increased. Reliability and market share of inland waterway transport in European transport is diminishing. Rhinecontainer started regular scheduled container service between Benelux and Rhine/Main ports. In regular schedule 21 barges (and barge combinations) offer quick and frequent intermodal (barge, road and rail) transport alternative to and from Rhine‐ bank terminals. Refer Figure 18 for served ports.

Figure 18: Graphic representation of ports served by Rhinecontainer

Targets of the case Inland barges are confronted unreliable and long waiting times in seaports, due to the priority given to deep sea vessels in sea terminals. The problem has increased due to the lack of transshipment capacity and growth in container traffic. Rhinecontainer aims to create a co‐operation between deep sea and inland terminal operators to cope with con‐ gestion in ports. Together with operational agreements, Rhinecontainer tries to form a strategic partnership with terminal operators to guarantee service availability and qual‐ ity of service. Rhinecontainer case shows how adaptations of the business model, i.e. the formation of strategic/operational partnerships and the development of new services, can assist barge operators to cope with earlier mentioned issues. The case also shows the neces‐ sity of partnerships, as well as the need for change in culture, as a critical success factors for the future performance of the inland waterway transport.

Case description Mode selection background

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Rhinecontainer’s business strategy is to compete on reliability of services/system, not on speed. Many customers have incorporated their services in JIT concepts, in view of reliability indeed. Rhinecontainer is offering a fast and regular intermodal alternative to and from the Hinterland with some 25 barges. With their partner in the region Wincan‐ ton, Rhinecontainer can also offer trimodal (barge, rail, and road) services from several terminals in the Hinterland. Rhinecontainer offers a reliable and efficient logistical service, in cooperation with ma‐ jor terminals along the Rhine, Main, Neckar and Danube on the basis of: • Punctual and regular sailings on fixed days of the week with modern container barges with varying between 208 and 374 TEU • Fast transit times, 1 up to 3.5 days between Benelux and Rhine ports • Tailor made service and Electronic Data Interchange (EDI) are available • A team of professionals ensures short lines of communications • Modern terminal and container storage facilities in the Hinterland • Terminals that are equipped to handle hazardous cargo

Currently Rhinecontainer is slightly changing its strategy to get rid of the outdated set‐ up of sailing schedules and of the commonality that barges transport to many seaport terminals in one roundtrip. This may lead to the formation of more integrated partner‐ ships within the sector. The business concept can be summarized as a scheduled con‐ tainer barge service 24 hours a day 7 days a week, with the following services: • Lower Rhine: 4 barges covering Rotterdam and 4 Antwerp. • Upper Rhine: 2 barges combining transport from Rotterdam and Antwerp. • Rhine‐Neckar: 5 barges covering Rotterdam and 4 Antwerp. • Rhine Main: 3 barges covering Rotterdam and 3 Antwerp.

Rhinecontainer obtains services from the seven Rhenania (Wincanton) terminals. Most terminals function as trimodal depots, combining waterway, rail and road transport The product that Rhinecontainer with its partners wants to deliver is a comprehensive solution that integrates existing logistics networks providing a seamless intermodal transport chain. Rhinecontainer offers tailored intermodal services by co‐operating with multiple rail carriers for offering also a rail connection to its Hinterland terminals in Karlsruhe, Neuss, Frankfurt, and Mannheim. New products are also developed in order to increase possibilities for intermodal transport. Recently, Rhinecontainer developed plans for a partnership in rail transport, exploiting shuttles to/between terminals.

Results and achievements In terms of roles and responsibilities, inefficiencies in barge transport arise as container stevedores and barge operators have no contracts. This creates congestion problems at the terminals, which have to take care of deep‐sea containers as well, and prefer those over the barge transport. Rhinecontainer tries to co‐operate with terminal operators to cope with the congestion in ports, exploiting dedicated lines (e.g. ECT terminal in Rotterdam, contracted by a SLA) to the Hinterland and agreements on fixed terms (e.g. APM terminal in Rotterdam, through Maersk Line). Besides these specific operational agreements, Rhinecontainer has concluded a strategic partnership to optimally use the service available in the Ger‐

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man terminals. By co‐operation Rhinecontainer and Wincanton try to make potential customers to shift their transportations from rail/road to inland shipping. This partner‐ ship also reduced the need for Rhinecontainer to combine its transport load with that of other barge operators. Rhinecontainer takes care of the network connections of terminals along the inland wa‐ terways and offers one price to the customer, which includes transport, handling etc. Rhinecontainer is not limited to the use of Wincanton terminals, if those are unable to process the cargo. If Rhinecontainer transports to/from the neutral terminals, it often uses a local forwarding department, which is owned by Wincanton and has preferred suppliers in the region, to arrange further inland transport. Together with H & S Container Line GmbH, Rhinecontainer signed a contract with De‐ CeTe Duisburg for container barge service between the terminal and the Ports of Ant‐ werp (18 000 TEU) and Rotterdam (70 000 TEU). This contract also includes strict SLAs, which aims to improve the total service in difficult operational circumstances in the sea‐ ports. Differing from traditional short time agreements, this contract works as a frame‐ work for parties to co‐operate and record commitment in reciprocal rights and obliga‐ tions. The contract also explicitly considers several KPIs like frequency, information ex‐ change, and sailing schedules. The second element of SLA also considers price agree‐ ments. The KPIs are evaluated in prescheduled meetings, which give partners the opportunity to reconsider the definition and progress of indicators. Moreover, Rhinecontainer is a pilot project that not yet includes any penalties or rewards.

Main benefits and costs The main benefits of strategic alliance are: • Improved port‐to‐door service for customers • The supply of intermodal (barge, road, rail) services to customers • Diminishing of the problems resulting from congestion at the seaport terminals • Scheduled services with reliable frequency • More efficient operations due to the lower transit times and less idle capacity • Less risks as the SLA provides some guarantees and more control over the chain • Improved quality due to the implementation of KPIs • Increased market share of the sector in total transport • Increased popularity of barge transport

Some of the costs of the new services, like the loss of flexibility from the fixed terms at the APM terminals, seem to be partly recouped from the customers. Clients also pay a surcharge per container for the congestion problems at terminals in the seaports. These fees partly cover the risk of sailing with a lower loading factor, which can occur with scheduled services and dedicated lines. With the new services, Rhinecontainer does try to diminish the waiting times and improve reliability.

Main success factors • Willingness of large actors to co‐operate in internal (partners) and external (competitors) context

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• Change in culture is needed since the sector is rather conservative, which results on outdated strategies and business processes. • Customers require integrated intermodal services with well‐connected activities through the transportation corridor.

Main barriers The main barriers for collaboration on the Rhine are: • Contradiction in national legislation, which causes additional paperwork on board. • National authorities have a lack of consistent policies • The competitive situation at the hinterland terminals hinders co‐operation • The non‐co‐operation attitude among larger barge operators and holdings • Insufficient chance to form partnerships

Transferability to LA Many outputs of the case are certainly transferable to LA. The solution enhances the provision of intermodal services and diminishes the problems caused by congestions at seaports. However, since the process is very recently developed, not all the needs and consequences are yet clear.

References http://www.promit‐project.net/ http://www.eia‐ngo.com/intermodal‐freight‐transport‐logistics‐best‐practices.html

4.2.3. BoxXpress Germany Fact Box

Name/technology Combined transport rail‐road, unaccompanied combined transport, approach/concept inland repositioning of marine containers. Implementation date Fully operational since 2000 Main achievements The train operates five times a week between ports and inland terminals, carrying 92 TEU per train. The total transport volume amounts to 365.000 TEU per year. The advantages are the high frequency, reliability and punctuality, high degree of security. The main benefits are economical and environmental. Main innovations The corridor utilizes well‐ known business models. Motivation To take the pressure off the sea terminals and improve customer service. Reducing logistics costs Reducing the environmental impact of transport

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Main companies Eurogate, HHLA, NTB, MSC, port terminal operator involved BoxXpress, Railion, port shunties ERS, TX‐Logistik, transport activities EUROKOMBI, DUSS, Wincanton, inland terminal operators Transport / Linking North Germany to South Germany Geographical Intermodal: Port, Train, Trucks characteristics

Starting point The goal of the project was to take the pressure off the sea terminals and improve cus‐ tomer service. The concept included handling the containers inland. The best transit‐ times were planned to be achieved by an unbroken transport chain. The service pro‐ vided data processing support using internet portal to ensure timely exchanges of in‐ formation.

Targets of the case The target of the case was to establish an intermodal corridor that connects German ports to Southern parts of the country. The cargo consists mainly of general cargo, au‐ tomotive, chemical, dangerous goods, furniture, paper pulp, forester products.

Case description Mode selection background The corridor is a quite typical intermodal solution. The actors build up a natural corri‐ dor: shipping companies, port operators, terminals, rail operators, trucking companies, forwarders and clients. The varying and voluminous client base has provided relatively good possibilities to establish the corridor. Eurogate Intermodal GmbH organise the to‐ tal transport chain from the port of Hamburg via Eurokombi railway terminal and inland terminals to consignees in the region of Munich.

Figure 19: BoxXpress network

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Equipment The BoxXpress operates the trains five times a week between ports and inland terminals, carrying 92 TEU per train. The total transport volume amounts to 365.000 TEU per year. The advantages are the high frequency, reliability and punctuality, high degree of security.

The ports of Hamburg and Bremerhaven are the ocean links of the corridor. The in‐ bound containers are moved from the port terminals to the main HUBs by trains.

Results and experiences The efficiency of operations can be improved by higher transport volumes, higher fre‐ quencies, wider time windows and higher number of shippers. More tracks should be available for electric locos including terminals to be approached by electric locos. The optimization of cargo volumes to equipment and technologies involved are essential for economically feasible corridor. The time‐ frame for development of a corridor is long. The case corridor operators ex‐ tend their planning to ten years, at least.

Market success factors • Strong operators playing together • Strong client base • Efficient solutions • One operator coordinating the whole chain • Environmental benefits • It‐ solutions

Strengths and weaknesses • The intermodal corridor is an active solution. Economically it is competitive, thanks to diversified and remarkable clients. The offering is on a daily basis ena‐ bling sufficient and efficient flows. The solution is scheduled to satisfy clients' needs. The environmental impacts are comfortable. As no subsidies are involved in the main operations, the continuity of the corridor seems to be secured. • The weakness of the solution can be that the fluctuation of the transport volumes might be remarkable, but as the client base is solid, and the operating companies are big actors, it seems very obvious that the future of the corridor is secured.

IT­ applications The solution provides data processing support using internet portal to ensure exchanges of information on the status of shipments, location and movements. Support concerns vehicle technology, energy supply and storage.

Collaboration between actors

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The collaboration between the actors is executed so that Eurogate Intermodal GmbH coordinates the transport chain from ports to inland terminals and consignees. Which part of the operator is making the agreements with the clients is unclear.

Contract agreements The involved actors are well‐ known big operators. It is not clear what kind of mutual agreements they are having together. However, it seems like the organization is well structured with minor under lapping in work.

Quality issues The volume of 365000 TEU per year has enabled the operators to run five trains per week between ports and inland terminals. This has ensured high frequency, reliability and punctuality and high degree of security.

Environmental impacts The environmental impacts are estimated to be remarkable. The avoided emissions in tons of CO2 are 29149 tons, which is 65 % less than by using trucks. Totally the avoided heavy vehicles are estimated to be 47760, with a consequence of avoided fuel consump‐ tion of 10.9 m liters.

Safety and security Though the safety and security is an essential part of the corridor, the special arrange‐ ments are not specified in the report. As all the operations in the corridor have existed before the corridor started, it is assumed that the operators have used their operator‐ level safety and security standards that have been fitted according to need of the other operators and clients in the network.

Transferability to LA The transferability to LA is limited due to the long development period (at least 10 years) required to establish this kind of service. Furthermore, the sufficient infrastruc‐ ture needs to exist. The role of service providers (forwarding agencies) is important, and needs to be taken into account when considering the monitoring of service.

References Intermodal Freight Transport & Logistics Best Practices; European Intermodal Associa‐ tion; Promit cases; 2010. http://www.eia‐ngo.com/viacombi.html

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4.2.4. Polzug Fact Box

Name/technology Combined transport rail‐road, unaccompanied combined transport, approach/concept inland repositioning of marine containers.

POLZUG Intermodal is a rail operator running a container service be‐ tween the northern European container ports of Hamburg, Bremer‐ haven and Rotterdam and their hinterland of Poland and Eastern Europe.

Implementation date Established 1991

Main achievements The train operates 3‐5 times a week between port and inland terminals, carrying 56 TEU per train. The total transport volume amounts to 120.000 TEU per year (2006). The advantages are the high frequency, reliability and punctuality, high degree of security. The main benefits are economical and environmental. Main innovations The cost advantage of using trains. The modal shift generates reduction of emissions. Motivation To move container cargo from German ports to Poland Reducing logistics costs

Main companies PkP, DBS and Polzug GmbH as combined rail‐road operator involved Polzug as terminal operator Road haulier as subcontractor

Various shippers, imports and exports Transport/ Linking destinations in Eastern Europe and Central Asia Germany and Geographical Rotterdam in Holland characteristics Intermodal: Port, Train, Trucks General cargo in containers

Starting point Container flows to Poland, border crossing difficulties, berth and storage capacities in the port terminals and transport time of feeder traffic have been the main difficulties. The corridor started with one block‐ train per week connecting Hamburg and Warsaw.

Targets of the case The target of the case was to establish an intermodal corridor that connects Poland to German ports, and gradually broaden the service to cover the Eastern Europe and other parts in Europe. The cargo consists mainly of consumer goods, foodstuff, pre‐products, automotive parts and non‐hazardous chemicals.

Case description Mode selection background

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The corridor is a quite typical intermodal solution. The three main actors, coordinated by Polzug, build up a network consisting of parts of services. The varying and volumi‐ nous client base has provided relatively good possibilities to establish the corridor. Polzug organize the total transport chain from the port of Hamburg via their own termi‐ nals to consignees (see Figure 20). The PkP and DBS act as combined rail‐road opera‐ tors.

POLZUG offices • Hamburg • Bremerhaven POLZUG terminals • Warszawa • Gadki/Poznan • Kiev (Ukraine) • Pruszków/Warszawa Representatives/Agents • Poti (Georgia) • Slawków/Katowice • Rotterdam • Moscow • Baku (Azerbaijan) • Wroclaw • Detroit (USA) PROMIT Seminar Helsinki Europe ? Far East rail transport via TSR • Malaszewicze • Seoul (South-Korea)4 February 14th, 2008 Figure 20: Polzug Network

Equipment The Polzug operates the trains three to five times a week carrying 56 TEU per train. The total transport volume amounts to 120.000 TEU per year (2006). The network is based on 8 own Polzug inland terminals in Poland. The advantages are high load factor per round trip high volume aggregation, reliability and punctuality for large volumes and short pre/ post haulage distances. A particular advantage is the storage of containers at inland.

Results and experiences The corridor has evolved from one shuttle‐train per week between two ends to a suc‐ cessively broad network and this progress is continuing. The main early problems are solved and today the corridor offers relatively good competitive and environmentally friendly services. Still border crossing problems exist and railway companies are evaluated not flexible enough. The network still needs improvements, frequencies could still be better and ef‐ ficiency problems exist, especially with railway equipment.

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Market success factors • Strong operators playing together • Successively new service offering with few competitors, except haulage • Solid client base • Economical solutions • One operator coordinating the whole chain • Environmental benefits

Strengths and weaknesses The intermodal corridor of Polzug seems to be a solid solution. Economically it is com‐ petitive, thanks to sufficient and different types and clients and rather well scheduled and frequent train connections. The network is growing and steadily it covers more des‐ tinations, not only in Poland, but the major parts of Eastern Europe. The environmental impacts support the intermodality and thus the progress seems to be solid. Container flows to Poland, border crossing difficulties, berth and storage capacities in the port terminals, transport time of feeder traffic are, and have been, the challenges to be mastered. Also there has been some pilferage and sometimes delays in the delivery and client complains. The network still needs improvements, frequencies could still be better and efficiency problems exist, especially with railway equipment. The weakness of the solution can be that the fluctuation of the transport volumes might be remarkable, but as the client base is solid, and the operating companies are big ac‐ tors, it seems very obvious that the future of the corridor is secured.

Collaboration between actors The collaboration between the actors is executed so that Polzug GmbH coordinates the transport chain from ports to inland terminals and consignees. PkP is the train operator in Poland and DBS in Germany. Which part of the operator is making the agreements with the clients is unclear. The relation with the forwarder sector is unclear.

Contract agreements The involved actors are well‐ known big operators. It is not clear what kind of mutual agreements they are having together. However, it seems like the organisation is well structured with minor under lapping in distribution of work.

Quality issues Though the progress of the corridor has been positive, quality problems still exist. Con‐ tainer flows to Poland, border crossing difficulties, berth and storage capacities in the port terminals, transport time of feeder traffic are, and have been, the challenges to be mastered. Also there has been some pilferage and sometimes delays in the delivery and client complains. The network still needs improvements, frequencies could still be better and efficiency problems exist, especially with railway equipment.

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Environmental impacts The environmental impacts are estimated to be remarkable. Avoided CO2 emissions are 28317 tons, which is 74 % less than by using trucks. Totally the avoided heavy vehicles are estimated to be 31134 truck loads, with a consequence of avoided fuel consumption of 10.6 mio. liters.

Safety and security Though the safety and security is an essential part of the corridor, the special arrange‐ ments are not specified in the report. As all the operations in the corridor have existed before the corridor started, it is assumed that the operators have used their operator‐ level safety and security standards that have been fitted according to need of the other operators and clients in the network.

Transferability to LA The solutions could be employed in developing the border crossing formalities, terminal network and container depots in inland terminals. Additionally, the business model (strategic partnership between operators without forwarding companies) is transfer‐ able to LA.

References Intermodal Freight Transport & Logistics Best Practices; European Intermodal Associa‐ tion; Promit cases. http://www.polzug.de/index.php?id=2&L=2

4.2.5. Construrail Fact Box

Name/technology, Construrail approach/concept

Implementation Starting date 15th February 2007 date

Main achievements Intermodal transport service between Madrid and Parma produce both economical and environmental improvements, as well as satisfied customer’s needs. Main innovations Cost effective and environmental friendly intermodal transport service between Madrid and Parma Motivation Reducing logistics costs Reducing the environmental impact of transport

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Main companies RENFE, Continental Rail (part of ACS Group) involved Transport/ Linking Spain to Italy Geographical Intermodal: Road, Rail, Waterborne characteristics

Starting point The purpose is to develop a transport service of maritime containers between the dry port of Madrid (Spain) and Parma (Italy) via Valencia and Genoa. The transportation route is presented in Figure 21.

Figure 21: Construrail route

The service between Coslada and Valencia is arranged 3 times per week in both direc‐ tions and takes approximately 4 hours. The cargo is then loaded from 40´ containers to container ship, which leaves Genoa every Friday. Considering the fact, that Valencia is the gateway for Madrid’s foreign trade, it is justified to expect that this kind of port‐rail service will attract more demand in near future.

Targets of the case The target was to serve Valencia, as the primarily export port of Madrid to fulfil the de‐ mand of transportation services with competitive costs and good customer satisfaction level.

Case description Mode selection background The cargo (construction materials) needs to be transported from manufacturer two times per week with average load per container of 40 tonnes. The cargo does not require any special handling arrangements and is shipped in pallets. The train service is not be‐ ing affected by the seasonality terms.

Equipment The train service should accommodate 50TEUs (25 x 40´ containers). The cargo is main‐ ly palletized (95%).

Results and experiences

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Due to the privacy reasons, the exact cost level before and after adapting the new con‐ cept is not available. However, the implementation of the new system didn’t require any investments from the shipper or financial support from the government. This concept accounted for 20% of all volume transported by the shipper. The service is now, well established and liberalization of rail cargo transport is sup‐ posed to increase the interest towards service in future. In addition the number of ser‐ vice times per week is intended to be increased as well. Also some new routes (Coslada to ports of Barcelona, Bilboa and Algeciras) are under scrutinizing.

Main benefits Combined to results, presented above, some encouraging results have also occurred re‐ lated to environmental aspects of the service. Compared to sending the containers by road to Parma (Madrid‐Barcelona‐Genoa‐Parma), the new service produces much less emissions. Example of emissions in train/road service from Coslada to Valencia is illus‐ trated in Figure 22(calculation is based on 630 containers with 26 trains).

Figure 22: Example of emissions between multimodal and road transport

Also following advantages of intermodal solutions were identified: • Door‐to‐door transport is possible in Intermodal solution through efficient ports • Reliability and punctuality • Environmentally friendly • Competitive pricing and higher transportation volume and frequency • Organizing the operation with clear door‐to‐ door responsibilities

Strengths and weaknesses Strengths are mainly presented above in results section. However, it was noticed that the positive environmental impact is more or less hard to disseminate in terms of better corporate image.

Collaboration between actors Construrail was combined of two participants, RENFE (49%) and Continental Rail (51%). Also Coslada dry port and Valencia terminal was leased from ACS Group, which also owned the locomotives.

Quality issues

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The train service wasn’t affected by seasonality and shipper was satisfied for service quality.

Environmental impacts Compared to road transport, the solution is environmentally harmful.

Transferability to LA The solutions can be transferred to LA in order to promote the combination of road/rail transport and short sea shipping. This would offer new ways to tackle the problems caused by congested land transport corridors, and to increase the efficiency of multimo‐ dal transportation chains.

References http://www.eia‐ngo.com/viacombi.html

4.2.6. Corman Fact Box

Name/technology, Corman approach/concept Implementation Started 2005 date Main achievements More environmentally friendly transportation chain Avoiding congestion problems in ports that caused waiting hours in terminals and problems with loading schedule Increased punctuality and no missed ocean going vessel closings Main innovations Redesigned transportation chain between production plant and seaports by using inland waterways Motivation Redesigning the transportation chain between production plant and seaports in respect of environmental and social requirements Main companies Corman involved Transport/ Inland transportation in Belgium Geographical Intermodal: Road/Inland waterways characteristics

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Starting point Corman is a dairy products manufacturer, located Liege and distributing its products in different European countries and New Zealand. European inbound and outbound flows are arranged by utilizing the road transportation between production plant and ports (mainly Antwerp). The same method has been traditionally applied also to interconti‐ nental outbound flows. To create more environmental transport chain that also corre‐ sponds to social requirements, various alternative transportation methods between pro‐ duction plant and seaports have been scrutinized. However, the rail transport hasn’t succeeded to produce desired outcomes.

Targets of the case The target of the case was to redesign transport system between production location and seaports into more environmental and economical direction.

Case description Mode selection background The starting point was to redesign the transportation chain between production plant and seaport, which has traditionally handled by road transportation. Several tests with rail transportation modes were unsuccessful. However, adding the barge transport via the Albert Canal (Liege to Antwerp) to trans‐ portation chain proven to be reliable. The transportation distance using the intermodal transportation was 270km, which was only minor longer, compared to road transporta‐ tion (245km). From the beginning of the project the frequency of departures has in‐ creased from two sailings per week to daily departures.

Equipment Containers (among which 50% reefer containers) are owned by the shipping lines. Trucks and barges were also owned by the relevant trucking or barge operator.

Results and experiences Reliability of delivery time has been 100%, which means that not a single closing of oceangoing carrier has been missed in two years period. However, there are no indica‐ tions that improvements have been succeeded in terms of economic aspects. Further‐ more, it takes about three days longer to transport container from the port to produc‐ tion site and back. Still, there were some significant improvements in environmental aspects. The level of accumulated emissions avoided per year (in terms of CO2) was 88 tons, which equals to 62% drop. This also means 196 heavy vehicles avoided and 33000 litres less fuel con‐ sumed (Figure 23).

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Figure 23: Economic and environmental aspects of redesigning the transporta- tion chain

Main benefits • More environmentally friendly transportation chain • Avoiding congestion problems in ports that caused waiting hours in terminals and problems with loading schedule • Increased punctuality and no missed ocean going vessel closings

Strengths and weaknesses The company is willing to increase the share of intermodal transportation, if problems related to longer transportation time could be resolved. The positive impact of intermo‐ dal transportation for environmental aspect is undeniable but decrease in costs cannot be directly deducted. However, the increased punctuality and avoid missing of the ocean carriers, favors the utilization of intermodal transportation. Also the empty containers cause problems. Theoretically import (or export) containers could be reloaded in production plant (or port area) but in practice containers are emp‐ ty in one direction. Availability of reefer containers has also proven to be an obstacle, when shipping lines are not willing to release empty reefer three days before closing.

Collaboration between actors Seamless transport operations require good collaboration of all actors in transportation chain, namely shipper, shipping lines, port operators and truck companies.

Quality issues Punctuality means also better quality in transportation chain.

Environmental impacts The level of accumulated emissions avoided per year (in terms of CO2) was 88 tons, which equals to 62% drop. This also means 196 heavy vehicles avoided and 33000 litres less fuel consumed (see also Figure 23). These are significant improvements compared to previous situation.

Transferability to LA The solutions can be transferred to LA to promote the use of inland waterways and more envi‐ ronmental friendly transportation chains. The solution could also be employed in avoiding con‐ gestion problems in port areas.

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References http://www.eia‐ngo.com/viacombi.html

4.2.7. HUB Zahony Fact Box

Name/technology HUB Zahony approach/concept Main achievements Wide range of services including rail transport, rail‐rail and rail‐road transshipment, storage, customs warehouse, packaging, rail gauge changes and other value added services. Duration 2007‐2013 Main innovations Trans‐shipment facility with extensive services and ability to handle different rail gauges. Intermodal terminal.

Motivation Junction of the wide (Trans‐Siberian) and European standard rail tracks. Key EU cargo transit point currently handling 23 percent of cargo flow at the EU's eastern borders.

Main companies Ministry of Economy and Transport, Hungarian Railways Zrt., ITD involved Hungary; KIÚT Regional Development Association, Magyar Közút Kft., National Infrastructure Development Zrt., Northern Great Plain Regional Development Council and Agency, Regional Development Holding, Szabolcs‐Szatmár‐Bereg County Development Council and Agency, Záhony Region Development Kft. Transport/ Hungary Geographical characteristics

Starting point Hungary’s central location in Europe is one of its most important competitive advan‐ tages. With four major European transportation corridors running through, it is consid‐ ered as a gateway between Europe and CEE region. In order to integrate transportation networks, the Hungarian government has launched a significant regional development projects in the Zahony area. Zahony is a border crossing terminal at the border of Hungary and Belarus, with a stra‐ tegic geographical position within the EU at the Schengen borders, as well as access to five countries within a 100 km radius. At Zahony, the rail gauges of the European and eastern countries meets. The gauge transfer stations are illustrated in Figure 24.

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Figure 24: Gauge-transfer stations in Europe

Targets of the case Development of an industrial and logistics area to accommodate manufacturing and dis‐ tribution by: • creating a public intermodal area • expanding the logistics potential of intermodal transport • setting up public warehouses • create a gauge‐transfer point

Infrastructure development to boost the economy and logistics potential by: • developing the railway network, in particular by reconditioning wide and standard tracks in the area • starting works to raise the speed of railway line • developing the road network in the area

Case description Mode selection background Zahony is one important link between Europe and east, as well as it is a road and railway interchange along Pan‐European Transport Corridor V. The main challenge is different

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rail gauges, which requires re‐loading capacity at the junction of the wide (Trans‐ Siberian) and European standard rail tracks. In addition Zahony is the largest rail trans‐ shipment facility in Central‐Eastern Europe with public intermodal logistical centre. It offers an Industrial parks with infrastructure, wide and standard rail connections.

Equipment The area offers logistics services and business infrastructure. The services include rail transport, rail‐rail and rail‐road transshipment, storage, customs warehouse, packaging and other value added services. The main elements of the railway reloading and logistics infrastructure include (Figure 25): • Reload, storing and warehousing of bulk products • Crane‐assisted reloading • Small‐machine‐assisted reloading • Liquid cargo reloading and storage • Axle refitting • Logistical services

Figure 25: Railway reloading facilities

Results and experiences

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The growing volume of products arriving from Asia is seen as an increasing incentive for the use of multimodal solutions for distribution within Europe. There are currently 13 intermodal logistics centers serving at least two transport modes in Hungary. Several advantages and other findings have been identified: • The reliable transport and business infrastructure at Zahony makes it an unpar‐ alleled location for manufacturers producing and delivering goods for the EU’s single market and Central And Eastern Europe • The focal point for logistics activity is moving eastwards as companies gravitate to the centre of an enlarged Europe. • Hungary’s strategic position in the heart of the continent, as well as its role as one of the major transport junctions in the Central East European region, makes it increasingly important as a regional distribution centre. • Developed transport infrastructure and an established background in logistics allow companies to benefit from remarkably high efficiency and added value • Zahony is a road and railway interchange and reloading centre along Pan‐ European Transport Corridor V. • Dense motorway and highway network with ring roads to avoid major cities en‐ sure faster and safer transportation. • Zahony is the junction and reloading centre for European standard‐gauge rail‐ ways and the wide‐gauge system of the CIS states. The fact that the two, funda‐ mentally different track systems (with 89 mm width difference between them) meet here, has given the area a unique role as an "unavoidable" reloading sta‐ tion.

IT­ applications Sophisticated information and communications infrastructure and ongoing innovation will ensure support for high‐quality logistics technologies of the future (GPS, broadband internet services, state‐of‐the‐art supply chain software development, RFID, etc.)

It is also employed in custom clearing services by offering: • E‐customs import procedures • Applications for AEO (Authorized Economic Operators) • Cargo container X‐rays • Accelerated clearance of transit cargo arriving on wide‐gauge tracks

Collaboration between actors The Hungarian logistics market comprises several multinational and Hungarian‐owned companies offering sophisticated services, consistent flexibility, complete reliability and highly competitive prices. The Zahony Area Logistics Cluster currently operates with 20 regional logistics, trans‐ port and development organizations. Its main objective is to increase the competitive‐

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ness of logistics companies active in the region through intense international activity, increased specialization and mutually advantageous partnerships.

Quality issues State‐of‐the‐art IT‐equipment and infrastructure improve the quality issues, as well as safety and security aspects.

Environmental impacts Since one of the objectives is to switch freight from road to rail and improve the rail transport services, the environmental impact is positive.

Transferability to LA The concept is transferable to LA where different gauges conditions apply.

References Hungarian Investment and Trade Development Agency (http://www.itdh.com/) PROMIT Seminar Connecting Europe and Asia with Trans Siberian Rail (TSR), Helsinki 14.02.2008.

4.2.8. BILK Combiterminal Fact Box

Name/technology BILK Combiterminal approach / concept Implementation The first development phase has been in operation since 2003 date Main achievements Cooperation for joint terminal realization and operation

Main innovations Cooperation for terminal realization and operation Broad Service Portfolio Motivation Planning and start up of a new and first bigger intermodal terminal in a country. Develop the terminal in two phases so the capacity of the terminal can be increased.

Main companies Establishing partners: MÁV Zrt., Hungarocombi Ltd., GYSEV Rt., MÁV involved Kom‐biterminál Ltd., Waberer Holding Logistic Ltd. Most important rail operators: Eurogate Intermodal, ETS railway, Alpe‐ Adria, Hungaria Intermodal and Intercontainer.

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Transport/ Road/Rail Geographical Hungary characteristics

Starting point The BILK Combiterminal is handling of accompanied and unaccompanied combined traf‐ fic in Budapest, in a modern logistic service centre. Main connections are to the ports in Hamburg. The case of BILK shows that intermodal connections combined with a new terminal can bring up new business opportunities. BILK is an excellent benchmark for those countries where the intermodal transport is still in development phase.

Targets of the case The objective was to establish a new and first bigger intermodal terminal in a country, and further reach the 200.000 TEU capacity by 2010.

Case description

Mode selection background For the improvement of the Hungarian logistical service centre the government, in the frame of increasing the share of the combined transport, initiated the BILK. In the back‐ ground there’s the environmental politics, which says, the most effective way to de‐ crease the environmental pollution is to remove the truck traffic to the fringes of the city. There are many railway operators such as Interkontainer, which has 5 trains per week to Hamburg Waltershof central shunting railway station and the goods will be distrib‐ uted from here. Hungaria Intermodal has 5 trains per week toward Waltershof. From Hamburg the goods are further transhipped in several ports. About 56 – 58 % of the traffic from the BILK is directed to Hamburg. The second most important relation is that of the port Koper (23 – 27 %), the third one is that of the port of Triest (10 – 11 %) and then they are followed by Bremerhaven, Wels, and Vienna. Only scattered traffic is com‐ ing from Rotterdam (through Wels) and from Wels, Enns, Duisburg, etc. as well. (Figure 26).

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Figure 26: BILK intermodal connections

The express‐ship between China and Koper (through the Sueze Canal) is very expensive, since in the export traffic empty containers are also transported, and therefore the price level of the import traffic is kept at a high level. The relation Hamburg‐China is less ex‐ pensive. The Far‐East and the Middle East relations are of importance. Containers are coming from Israel and from the Arabian Peninsula and from India; the repacking is made in Jemen and in Israel for the sake of avoiding the EU contingents. The cost of the Budapest‐Hamburg is 1050–1300 EUR/trip/TEU. This covers the costs of the traction plus the terminal cost in one direction (80–90 EUR in Hamburg in the case of export/import traffic, in the BILK this is equal to 60 EUR for the import traffic and 30 EUR for the export traffic).

Equipment The first development phase included 4 loading tracks (750 meter), handling equip‐ ment, depot, offices, customs, parking lot for trucks and maintenance yard. (Figure 29)

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Figure 27: BILK Combiterminal

Main benefits The traffic increased by 25% in 2006 (2006 = 102.000 TEU) and in 2007 by 30% (2007 = 138.000 TEU). The current capacity of the BILK terminal is 150 000 TEU/year, 20 000 truck /year (rolling highway), and container storage possibility for 2 300 loaded and 3 000 empty containers.

Market success factors A lot of innovative, electric solutions have been used in the development process. The use of the Kalmar loading machines is innovative both from the point of view of the in‐ formatics and of the electronics. Also the terminal controlling system was introduced, an electronic data connection is used with the partners, and there is an XML connection in the Container Depot.

IT­ applications In 2003 the terminal controlling system, JOKONT 2, was introduced. There is an elec‐ tronic data connection between the partners and the navigation forwarders (EDIFACT) and XML connection in the Container Depot. At present the Kalmar machines are being fitted with a GPS system to enable positioning of the containers.

Collaboration between actors

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The customers are mainly the railway operators, the domestic and international for‐ warders, as well as the inland navigation companies. In the case of Hamburg, some de‐ lays have been occurred because of the increasing traffic.

Quality issues The quality of the services is good only at the private railway companies (+/‐ 1 hour). The daily traffic is low with traction capacity problems in Slovenia and in Croatia. At the private railway companies 2 loc‐drivers are working, and so there are no cases, where the working time of the drivers is over during the transport operation. The companies have line locomotives as well.

Environmental impacts

The environmental pollution is decreased by removing the truck traffic to the fringes of the city. Also switch to more environmental transport modes will have positive impact on environmental issues.

Safety and security Communication is resolved with the aid of the safety devices (in the languages of 24 countries), and the traction infrastructure is also good.

Transferability to LA The concept is transferrable. However, it should be noticed that adequate financial re‐ sources needs to be available, but the finance can be built on other sources that banking as well.

References Promit D5.2: Strategy and Recommendations (www.promit‐project.net)

4.3. Logistics Service Cases 4.3.1. DB-Schenker Fact Box

Name/technology, DB‐Schenker approach/concept Implementation date

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Main achievements Better understanding over the privileges of the corridor leader, DBS business structure and the benefits and problems concerning this structure Main innovations

Motivation To scrutinize the structure of DBS and to understand its influence to business

Main companies Deutche Bahn, DB Schenker, DB Schenker Rail involved Transport/ Rail, Road Geographical characteristics

Starting point DB Schenker (DBS) is one of the three divisions of Deutche Bahn (DB), specialized trans‐ portation and logistics. Other DB’s divisions are passenger transportation and infra‐ structure and services. DBS was formed in 2002 by the acquisition of Schenker compa‐ nies, and today it is one of the biggest actors (91 000 employees, 2000 offices and turn‐ over of 18 billion euro) in logistics service sector with almost monopolistic position in European rail services. Acquisitions has also produced a possibility to expand their ac‐ tivities to the new business areas, especially global forwarding. DBS is the world leader in providing integrated logistics services, land operation, air‐ and sea freight, logistics solutions and supply chain management.

Case description Mode selection background Transport and Logistics Group Division, is divided into two business units. These are Schenker Business unit (DBS) and Rail Freight (RF) business unit. DB holds the majority of shares in both of these units, with 55‐100% of shares in Schenker companies and 98‐ 100% of shares in RF. DB Schenker is one of the leading transport companies: • No. 1 in rail freight (Europe) • No. 1 in combined transport (Europe) • No. 1 in land transportation (Europe) • No. 2 worldwide in air freight • No. 3 worldwide in ocean freight • No. 6 in global contract logistics

DBS stands apart with its dense network of locations in the world’s most important eco‐ nomic regions, in air and ocean transport, in European land transport, in contract logis­ tics as well as in supply chain management. The group differs from most of the other leading actors by having a huge rail network at their disposal, which they provide to cli‐ ents both in trade and industry. Together with top positions in all important markets, DBS extends its portfolio and its position in the market by integration with other logistics companies (e.g. BAX Global)

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and by forming new strategic alliances. This strategy is based on the view, according which the international markets grow together and outsourcing of complete service packages gains ground. Ultimately this will lead into conclusions that not only the re‐ quirement for transport increase, but also the demands placed upon the partners will grow. Furthermore, the liberalization of European rail goods transport market has led to a rapid comeback, especially for transport providers. DBS group is divided into the following segments: Rail freight, Land transport, Air freight, Ocean freight, Contract logistics, Events, Fairs and removals, Global projects and Corporate account management. This structure emphasizes the freight operations while, on the other hand, the coordinative and networking logistics is relatively little repre‐ sented. While other logistics providers (like Hupac and Kuehne + Nagel) highlight their inde‐ pendency, DBS seems to be taken opposite approach with the ownership. They are offer‐ ing full scale of door‐door services all over the globe. Moreover, while other companies emphasize the cooperation with their partners and other stakeholders, DBS tends to emphasize their own organization and capability to serve their clients. Above said can also be recognized from the citation on DB’s Annual Report 2007, according which DB is "... not only the leading provider of European rail freight transport, but also the leading company in the freight forwarding and logistics sectors. In the view of current and future customer requirements it is necessary to integrate rail freight services in overlapping logis­ tic service offers." DBS basically has two client segments. The first one of these is industry and trade, which is served globally and locally. The second segment is transport operators and freight forwarding companies that are served mainly in rail business. In Integrated logistics, company support industry and trade in global transactions, especially in the automotive, hi‐tech and consumer goods sectors as well as trade fair logistics, special transports and services for large‐scale events. In Contract logistic the company offers customized logis‐ tics solutions for industry and commerce, mainly in the hi‐tech, automotive and con‐ sumer goods sectors. The services include global supply chain management and ware‐ house management, value added services and standardized IT solutions. DBS provides transport solutions in the block train, single freight car and combined transport sectors, with a major emphasis on the transport of bulk goods in a number of industrial branches (e.g. mining, chemicals, mineral oil, fertilizers, agriculture, forestry, consumer goods, construction materials and waste disposal). The Intermodal business unit provides the entire range of services in European Com‐ bined Transport (CT) to transport operators and freight forwarding companies. These include complete service packages, which utilizes different modes of transport, as well as further value added activities involving terminal facilities, customer services or the provision of special equipment. The intermodal transport sector is divided into eight products: single car transports in Europe, block trains, sector products tailored to many sectors and goods, logistics, rail ports, depots, sidings and maintenance. To conclude the above said, it is possible to recognize the view, according which it is ne‐ cessary to integrate rail services in overlapping logistic service offers. This raises the question, why not all of the big transporters and forwarders haven’t done the same.

Equipment DBS operates 5,000 freight trains daily. Along with its partners, DB Intermodal offers a pan‐European network of over 2,100 trains per week with an annual transportation ca‐

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pacity of three million load units. DB Intermodal operates with 3700 locomotives, 132 700 freight cars and about 3 300 terminals in Germany alone. As a result of their rail ac‐ tivities, around a capacity of 100,000 truckloads are moved by rail every day. The ware‐ houses and terminals are mainly leased, as well as trucks and trailers.

Results and experiences By combining transport and service together makes DB a strong provider in the market. However, due to the fragmentation of the transport market, it can be reasoned that however big the DB and DBS are, their total market share is limited. Furthermore, it is assumed that their competitors feel their structure menacing because of the monopolis‐ tic features. This, combined to the predominance of rail markets in EU, competitors' may find it necessary to decrease the level of cooperation with the group. Some evidences, like the fact that their competitors' investments to road transports, partly supports this view. The main risk in the structure is that a part (or most) of their competitors, instead of competing with each others, start to compete with DB / DBS. DBS offer a comprehensive service in rail transport logistics. One part is coordinative, which they call logistics, and another part is different service processed that are typical in rail business. In addition, the company also offer maintenance services that are main‐ ly directed to train service providers. DBS Rail is built on five business segments to serve European network, East, Central, West, Automotive and Intermodal. Three of these seg‐ ments (East, Central and West) are regionally structured and two (The Intermodal and Automotive Business Segments) operate across the regions and combine the activities in their sectors respective. Each region has its own traction units, freight cars and mainte‐ nance facilities. DB Intermodal, a subsidiary of DBS Rail, is the European market leader in the area of combined transport, linking freight trains, trucks and ships. With approximately 3.2 mil‐ lion load units transported and some 1 900 trains per week, the Intermodal Business Segment connects all of Europe – from ports to hinterland, along the main traffic routes to all European countries. DB Intermodal’s sales partners are the operators in Europe. They service freight forwarders, ship owners and consignors. In individual cases, DB In‐ termodal also cooperates directly with freight forwarders and ship owners, for example in the event of large transport volumes to be shipped in networked logistics systems. It seems that intermodal business requires co‐operation with both, operators and out‐ side freight forwarders and ship owners. Because of this, the neutrality should be high‐ lighted. Still, the role of DBS in intermodal transport is rather blurred than clear. They quite certainly are one of the "clients", as outside freight forwarders are, but the role they have with the outsider shipments, is not very clear. Do they contact the final client, or do they offer local services like warehousing and distribution, or are they kept sepa‐ rated from the shipment totally? Another important question is who is the leader of the chain? In DBS case it is relatively easy to find that the group as a whole is the leader of the chain and also the owner of the corridors they are providing. However, it is more difficult to recognize the leader inside the group; DB is the owner of the divisions and the corridors, DBS Rail Freight is the leader of the actual corridors but it also offers comprehensive door – door transport services through the DB’s organization but also emphasizes its neutrality in intermodal transport services. This raises the question about the role of DBS in this corridor. Since they most probably have the client contacts and door‐services in their possession, they are also able to choose the mode of transport. In the choosing process, they need to hear

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their clients and choose the cheapest mode, but they also have their own fleet of trucks. It is not sure that in all the cases the normal choice will be the trains ‐or corridors. So, we conclude, that in the case DBS, the owner is DB, the leader is DBS Rail, but DBS stays independent in deciding, whether to use the rail corridors or their own other routes, mainly road. Figure 28 illustrates the most obvious features of DBS. The interesting feature is the transport orientation vs. service. DBS also seems to emphasize their transport services more than their global network and service production. In addition the question con‐ cerning the dualism seems to exist. DB mentioned that one of the reasons for acquiring DBS was overlapping business. This is understandable, but in DBS’s transports, there surely are parts that have remote connections with DB's interests. It is also not clear, who in the group is the leader, the DB as an owner, Rail Freight as a service provider or DBS as a client interface of the group.

Company profile Service •One main owner •Division of DB •Transport oriented •Huge transport and services logistics volumes •Door-door •Comprehensive •Own Network domination •Global network Brand •Transport vs. •Biggest Domination passenger traffic •Logistics services •Local service •Broad transport of the chain •Dualism? offering •Owner •Global network •Transport service •IT- development provider •Environment •Use alternatives •Quality •Safety & Security •Tailored with clients The owner •Health of the corridor

Client base Equipment •Industry •Leased •Trade •Partly own terminals Product •Global and local •All modes of IT- support transport •Strong support •Rail oriented •Network •Big volumes •Web Logistics services •Partly differentiated •Monopolistic features

Figure 28: The factors of a leadership in multimodal transports. Case DB Schen- ker21

The risk of a channel conflict between service and traffic, European level train operation and global forwarding and modes of transport exist. Furthermore, as DB is a big owner of the rail business in Europe, there is a risk of monopolistic features in this mode of transportation. Because DB's growth have recently based on acquisitions, the company profile seems to be partly unclear.

Main benefits and weaknesses According the experiences in US, there are certain privileges in corridors developed as a result of merger of a major freight participant with other party, often other than the rail‐

21 Lehtinen in Promit D53

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road. According the DBS case, following points concerning the corridor leader, were supported or partly supported22: • Sets the service level for the corridor • Makes the agreement with the client (shipper / consignee) • Collects the freight from the clients (or the main part of the freight) • Negotiates rates with the railroads. • Credits the subcontractors their shares. • Carries the biggest economic risk in the corridor. This case supports the conclusion that the acquisition of Schenker has been a huge and strategically important solution to DB. By doing this DB has not only changed their own structure, but rather the field of logistics services in the whole EU. DB was originally a rail company, which has allowed them to reach a leading role in the rail market in Europe. Rail business, however is quite local (at least compared to the de‐ velopment of 3PL and 4PL companies around the world), which made DB’s management to seek other options for becoming a global company.

Market success factors DB’s market position and resources have had a huge impact on successful acquisition. The circumstances in business environment need to be appropriate.

Strengths and weaknesses23 The problem of market leadership in transport and forwarding business is dualistic, which is why transport companies typically find efficiency inside, by maximizing the transport volumes with a strong influence of balanced volumes in both directions. In forwarding, the questioning is done with the client. The right solution is often the solu‐ tion that suits best to the client. However, the same solution is not always a right solu‐ tion to a transport operator. If DB decides to use rail whenever it is possible, the impar‐ tiality to serve the client is risked. Seizing the strong market lead in transport can turn against the company. It can be as‐ sumed, that if the transport company possess all, or most services that the competitor can offer directly to its client, the competitor finds the situation menacing to their client relations. For example, if DB transports the haulage, which final destination is Finland, from Frankfurt to Luebeck, they also have a tempting situation to offer the other parts of the transportation (by DB Schenker) to the client. In Hupac case this was avoided be‐ cause of the structure of the chain ("forwarders are our clients"). In Kuehne + Nagel case, this is limited because they do not rule the haulage and concentrate to the services in both ends of the transport. In Volvo case the circle is closed and therefore this ques‐ tion does not even exist. Even though, the parent company, DB, doesn’t directly involve to the rail transports, their influence still exists in terms of indirect influence (e.g. company strategy, structure, policy and development come from DB). This kind of structural influence conveys the leadership of the chain partly to DB. On the other hand, Rail Freight is the rail transport

22 Business models for rail freight – topology formulation based on rail freight evolution in the US and Europe. Leviäkangas, Pekka; Lehtinen, Jarkko; Thomchick, E.; Spychalski, J. Proceedings of the Nordic Logistics Research Network (NOFOMA) Conference. Reykjavik, Iceland, 7 ‐ 8 June 2007 (2007) 23 Lehtinen in Promit D53

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operator of the company and their decisions have an influence on the whole group (thus their client relations are presumed to be quite limited). Their typical decisions cover quality issues, pricing, networking and service providing. DBS remains, or should be, the primarily contact to the clients and end users. Above said, also makes DBS a partly leader of the chain, since they have the world wide client contacts. Also the corridors in EU, in which DBS uses trucks instead of rail engages DBS to decisions making process. To conclude this, it is not clear, which part of the company is the leader of the corridor. This could lead into a dualistic situation, where different divisions of the company make the decisions according to their own interests. This can be harmful for fulfilling the original strategy.

IT­ applications DBS has a strong support from IT. The company provides the client Web‐ based data handling (e.g. "E‐services") that include transport ordering, scheduling services, ware‐ housing, tracking and tracing, services to contract clients and EU‐ level network of DB Schenker connections.

Quality issues Their quality is based on quality, efficiency, easiness and society responsibility. The quality definition is based on: • Shipment requirements • Client service • Efficiency • Personnel • Profitability and growth.

Collaboration between actors As mentioned above, it is not necessarily clear, who is the leader of the chain. However the collaboration between the parent organization DBS and other subsidiaries need to be in good level in order to maintain the service level.

Environmental impacts Environmental issues have an important role in DBS's activities. Since 1991 DBS has made visible steps for sustainable development in their investments and development projects for transport solutions, energy use, waste and legal requirements. They seem to be aiming at providing wide range of logistics services without neglecting their envi‐ ronmental and other common responsibilities.

Transferability to LA The solution is only limitedly transferable to LA as it requires considerably high re‐ sources from the company. The business model, according which the transportation and other services are bundled together is transferable. This may lead into added value for the customer, as well as synergies inside the company.

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References Promit; Promoting Innovative Intermodal Freight Transport (http://www.vtt.fi/inf/julkaisut/muut/2009/PromitD53_Final.pdf) Permala, Antti; Lehtinen, Jarkko; Eckhardt, Jenni (Main Authors). 2009. 110 p. TREN/06/FP6TR/S07.55976/019851l. WP 5 / D5.3: Strategy and Recommendations www.dbschenker.com DB Annual Report 2007 Business Report 2006 and Market Ranking US Heavyweight "The Colography Group“ www.deutschebahn.com www.schenker.fi De la Chapelle, 3.3.2009: Almost all shipments between Italy and Finland are trans‐ ported in trailers

4.3.2. Kuehne&Nagel Fact Box

Name/technology Integration and Coordination of corridor services approach/concept Implementation date They have utilized the intermodal corridors as long as they have existed in the market. Main achievements KN integrates and coordinates a transport chains of theirs clients

Main innovations The business model of the corridor. KN acts as a forwarding company in two main levels. First, as an integrator of the chain, where the train operators coordinate the transport from terminal to terminal. The second role is to take care of the client service in both ends of the corridor. Motivation KN offers comprehensive logistics solutions, however, without full con‐ trol the whole parts of the corridor, especially the train part.

Main companies The operational structure of the group is divided into the following involved primary segments: Sea‐freight, Air‐freight, Road & Rail Logistics, Con‐ tract Logistics, Real Estate and Insurance Broker.

Transport/ The geographical regions are Europe; Americas; Asia‐Pacific and Geographical Middle East; Central Asia and Africa. characteristics

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Starting point KN is about 130 years old company with staff about 54000 people. During the recent years, the company has grown a lot, mostly because of mergers. The direction for this growth has been towards more and more global networks. KN delivers integrated solutions across the supply chain, with a purpose to turn their clients' logistics challenges into real competitive advantages. The customers are served worldwide by their Global Logistics Network, offices and distribution facilities, staffed by their own forwarders. The company acts as a freight carrier. In most of the cases the transport parts are bought outside from transport operators. The warehouse operations and distribution services are either outsourced or own production, depending on decisions made by the manage‐ ment. The local offices serve as connection points for customer access to global markets. KN delivers end‐to‐end supply chain solutions for many major industries, including high‐tech and consumer electronics, retail, fast‐moving consumer goods, pharmaceuti‐ cal/healthcare, industrial, chemical, aviation and automotive. Judging from their offering areas and size of the company, their client base is immense, varying from big global companies to small and local workshops. The shipments vary between massive packages to LCL‐ shipments. The most common transport equipments are containers and trailers. Being a common carrier, they can spread their network in all parts of the globe. With developing their information technology and processes, they are able to serve their cli‐ ents in the network with similar methods, which guarantee them a reliable and inte‐ grated service where ever the client is located.

Targets of the case KN‐ case is an example of a large forwarding company offering comprehensive logistics solutions to the clients. One of the options in their services is to use intermodal trans‐ ports for some destinations, provided that the service level corresponds to the needs of their clients. Thus KN can be considered as a user of the corridor, but also a leader of the corridor. This is because they offer the transport from door to door. The target of this case is to consider the structure of a corridor and a role of a logistics service provider.

Case description Mode selection background

KN offers European road and rail transportation products and services, including dedi‐ cated and individual delivery services. The transport operations are based on partner‐ ships with carriers. The web‐based tracking and tracing supports the service offering.

KN calls the company a neutral rail freight forwarder with access to best‐in class rail op‐ erators. They offer pre‐ and post‐carriage to intermodal transport logistics options, in‐ cluding cargo handling, warehousing, distribution and customs clearance. They also de‐ sign and integrate the necessary logistics services, including packaging, cargo insurance,

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customs clearance ‐ even complex projects, such as dismantling and reconstructing en‐ tire plants.

Instead of emphasizing the transport corridor and the operators there, KN points out the services they can produce above the basic transport service, like optimizing transporta‐ tion flows across Europe, integrating with other KN supply chain components, such as Sea/Air and Contract Logistics, and integrating road service with extensive rail capaci‐ ties, such as cost‐ and time‐effective block trains. Direct‐line hauls supplement the net‐ work with terminal‐to‐terminal and door‐to‐door connections.

Their intermodal offering includes:

• Block train transport o Directly linked to major European rail‐consolidation hubs o Serve single‐car loads, as well as intermodal solutions • single‐car transport o Across Europe and into Central Asia • intermodal transport o Solutions across Europe and to the CIS, Central Asia and Far East • Hazardous goods and oversized shipments • Services to and from the Commonwealth of Independent States, central Asia and southeastern Europe • Special services, including supplying raw materials to manufacturers, rail‐ connected consolidation hubs for retailers, and complete management of major industrial projects

Equipment Generally KN emphasizes the client service instead of equipment needed. Equipment is important but not the main issue. Mainly they do not own the wagons and containers, but use the transport companies' units24. If needed, they are ready to lease the equip‐ ment: The positive economic environment increased the demand for rail transport, but at the same time led to a shortage of capacity. Kuehne + Nagel successfully counteracted this trend by the long­term leasing of wagons and containers. Additionally, a reduction of standing times allowed for the improved utilization of vehicle capacity in round­trip traf­ fic25. The warehouses and terminals are both own and outsourced, depending on circum‐ stances. For example, in Finland most of their warehouses and distribution services26 are outsourced from the partners. The trailers are leased. In Germany most of the ware‐ houses and terminals are own or leased. The warehouse network is wide. It is estimated that the totally approximately 7 million square meters of warehouse space is controlled by KN worldwide.

24 Mika Rapo, Director Road&Rail; Kuehne+Nagel LTD

25 http://www.kn‐portal.com/fileadmin/_public/documents/annualreports/2007/Kuehne+Nagel_2007_annual_report.pdf

26 Mika Rapo, Director Road&Rail; Kuehne+Nagel LTD

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The KN service product resembles the 3PL‐ structure27. Especially in global networks most of the services they provide are outsourced, or better, bought outside28.

Results and experiences KN is hardly a leader of the corridor. They are rather leaders of the logistical system that is based on the entity that they have built with their clients. They have a strong influence in corridors, because through their system, the shipments are transported all around the world. As long as their solutions meet their customers' requirements, they are quite free to change the existing corridors to new ones. It is important to note, that the company structure in logistics service sector is not at all uniform. The transport and forwarding are very seldom purely separated from each others. In almost every logistics provider company, both of these parts can be found from their activities. For example, the brand Schenker, owned by DB, a big train opera‐ tor. Schenker is a competitor of KN. Another example is Hupac: Even though they are strictly a train operator, they do many services that remind of client service in a net‐ work.

Market success factors • Network covering the Global market • Strong client base • Efficient solutions • Coordinating the chain from door to door • Environmental friendly brand • It‐ solutions supporting coordination and scheduling

Strengths and weaknesses • KN system seems to be a robust network. They have developed a Global network steadily and purposefully. Their brand emphasize green values and they seem to be more collaborative than competitive against the other logistics service pro‐ viders. • We see one potential, but very unlike, weaknesses in their business: As the com‐ pany is more an integrator of transport corridors instead of transport operator, they might be vulnerable for price competition of transporters. As KN makes its profits from the purchase price, they have to add their value ‐ add to this price. So, in principle, the transporter can always offer slightly lower rates to the client. This, however, seems to be very speculative argumentation, because their strength, a comprehensive network offering, is something that pure transporters cannot offer. 29

27 http://www.businessdictionary.com/definition/fourth‐party‐logistics‐4PL.html: Arrangement in which a firm outsources its logistical operations to two or more specialist firms (the third party logistics).

28 Mika Rapo, Director Road&Rail; Kuehne+Nagel LTD

29 Lehtinen in Promit D53

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IT­ applications

As the business of KN is based on coordination of logistics, the investments to IT and co‐ ordination issues are large. Investments are made in staff, software and hardware, and information technology (IT). The purpose is twofold: to develop their own operations and by that, to meet the client requirements.

KN's IT ‐focus include Web‐enabling business‐support applications, customer applica‐ tions, re‐architecting infrastructure, business‐process management middleware, and Web services. Examples include development and implementation of standardized in‐ ternational freight, warehouse and transportation management systems, RFID and KN Login's visibility, and monitoring and reporting capabilities. KN is committed of stan‐ dardizing IT systems with a goal to create added value for customers through better co‐ ordination, integration, data quality and analytical capabilities. The Web‐services are meant to improve improved end‐to‐end visibility and exception alerting.

Moving goods globally, from factory to destination, KN is able to match the physical flows with near‐real‐time information via KN Login on the status of inventory, ship‐ ments, orders and order lines down to the product ID / SKU level.

Collaboration between actors KN is merely a user of the corridor. The corridor operators collaborate independently, but according to the network requirements. The client service is mostly done by KN. The terminals and ports are independently working according to schedules, most of them owned by partners. The railway operations are run by national or independent rail operations. KN co‐operates with the carriers even though some of them might be their competitors. They, for example, inform that they co‐operate with DB30 Logistics, a mother company of Schenker. This train operator provides them with train services with wagons and other equipment.

Contract agreements The involved actors are well‐ known big operators. It is not clear what kind of mutual agreements they are having together. However, it seems like the organization is well structured with minor under lapping in work.

Quality issues Commitment to Quality, Safety, Health, Environment & Security (QSHE) • QSHE program • quality‐management certifications o ISO 9001 o ISO 14001 certificate for environmental issues

30 Deutsche Bahn AG

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o OHSAS 18001 certificate for occupational health and safety o Transported Asset Protection Association (TAPA) security attestations o U.S. Customs‐Trade Partnership Against Terrorism (C‐TPAT) certificate o Authorized Economic Operator (AEO) Certificate initiated by the WCO.

Environmental impacts KN emphasizes the environmental impacts in their services. According to their policy, the company favors environmentally friendly transport solutions. Some of their daugh‐ ter companies participate in research of environmental impacts.

Safety and security The company highlights safety and security in their logistics solutions.

Transferability to LA • The core of the business, logistics services, is transferable • The acting as a forwarder, is transferable • The challenge is to establish a transport network, where logistics services are a natural part of a corridor offering • The 4th party logistics is a consequence of a development progress from anchor customers handled by railway operators to a comprehensive corridor network

References http://www.kn‐portal.com/

4.3.3. Cargo Domino Fact Box

Name/technology, Cargo Domino approach/concept Implementation Start date: 2002 date Main achievements Ability to offer competitive and environmentally friendly option for pure road transport with door‐to‐door service and delivered by the morning method. The Cargo Domino is a good example of a successful intermodal solution for short distances, from 80 to 300 km. Main innovations Technique for transshipping the swap bodies without external help or significant investments for new equipment. Motivation To provide economically competitive, and environment friendly, com‐ bined road‐rail transport option for pure road transport. Exploit the pos‐ sibilities related to national legislation

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Main companies Swiss Federal Railways SBB Cargo with contracts to many regional road involved haulers, which carry out the pre‐ and end‐haulage Transport/ Combined Transport Road‐Rail on medium distances Geographical Switzerland characteristics

Starting point Cargo Domino is an intermodal transport concept in combined door to door service of‐ fered by the Swiss railway operator SBB Cargo. The concept is based on vehicle related horizontal transshipment, which was introduced in summer 2002. The number of wag‐ ons per anno in SBB Cargo’s single wagon solutions is approximately 140 000, of which the Cargo Domino as a national single wagon solution, only counts for a small part.

Figure 29: SBB Cargo‘s intermodal transport volume (single wagon by origin)

SBB Cargo is the market leader in Switzerland for rail freight. The customers are mainly large scale Swiss distributors such as Coop, Usego, Manor and Migros.

Targets of the case Cargo Domino was developed with focus on consumer goods, raw materials and bulk ware. The targets of the case were to: • Reach a modal shift from road to rail • Promote the co‐operation between road and rail transport • Advance the best possible customer’s benefit • Intermodal Express service network for the regions

Case description Mode selection background

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Cargo Domino is a self‐contained transport system for medium distance inland transport that provides equipments, arrange pre‐carriage, organize transshipment, transport rail freight and deliver goods to the consignee in Switzerland without any transshipment and by‐passing traffic hot‐spots. Total transport distances are relatively short varying from 80 to 300 kilometers. According the Cargo Domino‐concept SBB Cargo is responsible for (Figure 30): • Organizing the pre‐ and end‐haulage • organizing equipment • transshipment of swap bodies • main‐haulage by rail • Distribution.

Figure 30: Cargo Domino transport system

Cargo Domino is integrated Night (Optimized over‐night connections between 22 hrs and 7.30 hrs) and Day Express‐Network, based on railway single wagon traffic, and is offered from Monday to Saturday. One central shunting yard is used to build the trains. SBB Cargo has a dense network of loading points, which guarantees a short pre‐ and end‐haulage distances, which are important factors when choosing the transportation mode. (Figure 31) Especially pre‐ and end haulage costs must be in a low level.

Figure 31: Planned transshipment points until 2008

Road transportation is not an option during the night time in Switzerland, since driving is prohibited between 10.00 pm and 6.00 am. Also subsidies for combined transport, together with heavy vehicle road tax (LSVA) favors combined transport.

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Equipment The minimum requirements for station infrastructure are: at least 80 to 100 m long tracks (for about 3 to 4 wagons); about 6 m wide loading/unloading lanes; space for maneuvering the trucks, and short pre and end haulages of 4 to a max of 60 km. Cargo Domino means: • A range of equipment ‐ 7,450 mm standard interchangeable containers, refrigerated containers, insulated containers, curtain‐sided containers • Special equipment, including tanks, silos or dry bulk material containers, is currently hired from SBB Cargo as required • Pre‐carriage by road ‐ from the factory ramp to the station • Transfer of interchangeable containers Figure 32 • Carriage by rail • Subsequent carriage by road ‐ from the station to individual consignees • The Cargo Domino transport units are standardized swap‐bodies. Three kinds of swap bodies do exist within the SBB Cargo‐pool (Table 5)

Figure 32: Cargo Domino technology

Table 5: Types of swap bodies

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Results and experiences The concept of combining road and rail transport has proven to be efficient mode of transportation particularly for perishable products such as fruit, meat or dairy products. In addition, transferring goods from road to rail, is not only economic, but also an eco‐ logical option. Because of its flexible horizontal transshipment facility, Cargo Domino has become a real alternative against pure road transport.

Figure 33: The Cargo Domino concept

Main benefits • Customer benefits: fast, reliable and possibility to plan, door‐to‐door service • Only one contact point for the customer (one stop shop) • Ability to utilize night transport (night driving is prohibited between 10 pm. and 6 am.), which allows goods to be delivered in early morning. This is significant advantage especially in Alps area. • Low infrastructure requirements in terms of needed cranes and reach stackers, which lower the cost of transportation. The driver can operate the transhipment by himself. • Utilizes the dense network of existing stations • Environmentally friend transport mode, which customers may also benefit in their marketing.

Market success factors • Optimized overnight connections • Rail infrastructure exist, driver may conduct transhipment without external help • Intermodal and railway freight transport plays a key role in the Swiss transport policy • SBB Cargo promotes the solution.

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Strengths and weaknesses Cargo domino may utilize the night time transportation as well as subsidies and lower tax level posed for multimodal transportation (compared to pure road transport). Also the existing network of stations and low need of handling equipment investments fa‐ vours this mode of transportation. Some challenges are faced in case of roundtrip deliveries and maintaining economic vi‐ ability in single wagon traffic. Also the reluctance of shippers to adapt new technology and intermodal options is a hinder for promoting the transport mode.

Collaboration between actors SBB cargo is the operator and organises the whole transport from door to door. They still do make contracts with many regional road hauliers, which carry out the pre‐ and end haulage.

Environmental impacts Compared to pure road transport, the solution is more environmental friendly

Transferability to LA The solution and approach could be applied to LA as well. However, it should be kept in mind that some geographical and political distinguishes have had a positive effect to the success of the model. The concept could also be extended into different industries, which posses similar characteristics with those ones, in which the model has already been suc‐ cessfully adapted. The business model, according which SBB has contract with many re‐ gional road hauler, which carry out the pre‐ and end haulage is also transferable to LA.

References http://www.sbbcargo.com/en/index/ang_intps/ang_produkte_domino_downloads.htm

4.4. Information Technology (IT) Cases 4.4.1. Port Infolink Fact Box

Name/technology, Streamlining the transport chains in the port of Rotterdam with Port approach/concept Infolink Implementation 2002 to present date

Main achievements Port infolink enhances the port of Rotterdam’s competitive edge by optimizing the information flows and work processes of the public and private sector. The Port Community System currently offers 24 different

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services, with around 4500 users who send more than 20 million electronic messages a year31.

Main innovations The Port Community System covers the whole spectrum of transport modes that meet at the port enabling modal integration from ship line to hinterland by short sea, barge, rail and road. The solution enables all the links within the port of Rotterdam's logistics chain to efficiently exchange information with one another. Motivation The need of customers and government of the port to develop Port Community System.

Main companies Port Infolink is an independent enterprise, with the Port Authority of involved Rotterdam being the sole shareholder. The Board of Directors consists of directors of big market players.

Transport/ The regional coverage consists of Rotterdam harbour, which is the Geographical largest sea port in Europe. The port connects all major global and characteristics hinterland destinations in Europe, and covers all transport modes.

Starting point The port of Rotterdam is the largest sea port in Europe and one of the biggest globally. Several intermodal corridors start from the port, with different actors offering services. Earlier projects had shown that there was a need to streamline the transport chains be‐ tween different actors. The result of the planning was founding Port Infolink and devel‐ opment of Port Community System (PCS) which covers the whole spectrum of transport modes enabling modal integration from shipping line to hinterland destinations by short sea, barge, rail and road.

Targets of the case The primary target of Port Infolink is optimization of processes in the transport chain that run through the port of Rotterdam using on‐line information and communication services between different operators and clients. This port‐wide ICT platform stream‐ lines the transport chains in the port.

Case description Mode selection background

Port Infolink distinguishes three layers:

• Organizational layer o Shipping agents o Forwarders • Physical layer o Shipping companies o Terminals o Depots

31 http://www.ship.gr/news4/portr9.htm

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o Ships o Barge o Rail o Truck operators • Facility layer o Port Authority of Rotterdam o Customs o Veterinary inspection o Insurance companies o Banks

Equipment The Port Community system comprises of three parts o Information and communication services; o A platform that contains all the facilities that are commonly used for all the services; o A central database where all the information that is exchanged through Port Infolink by the customers comes together. The platform is made between three kinds of tools: o Domain tools that are specifically geared to the port. o Generic tools with general basic functions o Implementation tools that provide the customers for the realization of new services.

Results and experiences The following services have been implemented (year 2007): • Agent infolink • Authority infolink • Barge infolink • Customs infolink • Depot infolink • Forwarder infolink • Rail infolink • Road infolink • ShipLine infolink • ShortSea infolink • Terminal infolink

The following services have been under development: • Cargo information • Notification waste disposal • Notification dangerous goods • Statement harbor dues

Year 2009 the ports of Rotterdam and Amsterdam joined their forces and have one joint port community system. The organizations behind the two earlier systems ‐ Port info‐ link and PortNET in Amsterdam – are merged and Portbase was founded. Via one port

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community system, the new organization offers broader range of services for the ex‐ change of data, both between them, and with the port authorities and Customs.

The creation of one single port community system is a wish of the clients that often op‐ erate via both ports. Agencies such as Customs also appreciate the advantages.

A second element in this joining of forces is the development of a completely new tech‐ nical platform with existing and new functionality in order to prepare the joint port community system for the future, with open standards. The new platform should be‐ come available in the course of 201032. The case shows that one port system can be adapted to other ports. The requirement is a system which is open an based on general standards.

Main benefits Added value for business • enhanced efficiency • lower costs • higher service level • better planning • quicker turnaround times • fewer mistakes

Added value for society • Multimodal transport becomes more competitive, potentially leading to a reduction of environmental harm. • Competitiveness of Rotterdam as main port in Holland and related employment and economic growth.

Market success factors • Strong logistics knowledge which enables Port Infolink to be accepted by the community • Active and intense consultation of the actors in the port community, in order to develop only those messages that are considered important by the various actors. • Neutral position and confidentiality and security of data. • The system is always available (24 / 7).

Open standards and non‐profit organization controlling the data are prerequisites for a successful system. The clients and actors should also accept the system.

Strengths and weaknesses

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The system brings economical benefits as the data handling and transparency gets eas‐ ier. The system development is hard to realize. This means that all the parties involved, in‐ cluding the ICT‐ development staff, must undertake the project from the beginning to the realization.

Collaboration between actors The parties involved vary from authorities and operators to clients, also the shipping modes represent the whole spectrum of transport modes. Thus, the relation between the actors involved, have been multiform. However, the collaboration between actors has been remarkable.

Contract agreements It is not clear what kind of agreements the actors have between each others.

Quality issues The Port Infolink brings value add with efficiency, cost factors, better service and plan‐ ning, quicker turnaround times and fewer mistakes.

Environmental impacts The environmental impacts mentioned are mostly indirect. Decrease of costs and better efficiency, and transport capacity reduce the environmental loading. The exact estima‐ tions are not yet known.

Transferability to LA Port Infolink seems to be transferable to LA, especially big harbors. As Port Infolink case shows, it should be considered, whether to concentrate to one harbor or to establish a more generic system that covers several harbors. The non‐ profitable integrator (Port Infolink) could be the recommended structure in LA as well.

References Promit project report: Intermodal Freight Transport & Logistics Best Practices, available at http://www.eia‐ngo.com/wp‐content/uploads/2010/01/Best‐Practice_Promit.pdf.

4.4.2. Short Sea XML Fact Box

Name/technology, Shortsea XML approach/concept

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Implementation Duration 2 years, ended 09/2008 date

Main achievements Building on existing standards and working with a range of EU partners, SSXML is established as next generation of business process integration. This provides enhanced flexibility and eases the utilization of all parties (irrespective of size) in door‐to‐door transportation chain. Message suite is combined of processes of scheduling, booking, operations (manifest) and status. Main innovations Message standard based on XML‐technology

Motivation The objectives can be achieved by a standardized messages based on XML technology which is cheaper and more flexible that other more established platforms and is generally present in most software applications. It has also good availability and it is easy to use. Shortsea XML is not intended to replace the more heavy weight applications (such as EDIFACT) but to operate in tandem with them. Main companies IT‐Suppliers: Seagha, Softship, viaMichelin involved Shippers, transport buyers: Borregård, Nosrke Skog, Take Cargo Lines: DFDS Lysline, Sea Cargo, NCL SS Promotion Centres: Sea and Water, SPC Finland, SPC France, SPC Netherlands, SPC Norway Standardisation organization: Copas, Nor‐Stella, SMGD Ports: Risavika Port, Port Infolink, Portnet, port of Bilbao Authority: Norwegian Coastal Administration Transport/ Short sea shipping Geographical characteristics

Starting point There is a growing need for short sea shipping entities to harmonize the data exchange methods in order to make transportation chain more efficient. Today’s customers re‐ quire up‐to‐date information in short response times, which also applies the pressure towards common messaging solution. The same goes with information exchange with authorities, who also need to be reported in short period of time. Seaborne transportation chains involve many different countries and the average share of administration costs represents 20‐30% of total costs. The complexity of transporta‐ tion chain is illustrated in Figure 34 Limited access to information results slow response time to customers but on the other hand shippers require increasingly electronic inte‐ gration with the transportation providers. Although Electronic Data Interchange (EDI) is widely applied in deep sea transportation chains, and in some extend also in feeder shipping, different lines have adopted a differ‐ ent EDI version, which complicates the applying of common solution. In addition au‐ thorities in different EU countries have adopted and developed different kind of systems and solution.

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Figure 34: The complexity in transport chains

Targets of the case The core objective of Shortsea XML (SSXML) is to introduce a common messaging solu‐ tion, which would cut off 10‐20% total costs. This would also have a positive affect on competitiveness of short sea shipping compared to road transportation.

Case description Mode selection background SSXML supports network of shippers and IT providers, who are working together for developing information exchange in logistics and maritime business. Shortsea XML is based on UN CEFACT and build on UN Core Components. It is an open standard program that is freely available to all parties. A range of European maritime associations, ship‐ pers, lines, agents, ports and IT suppliers are supporting the standard.

Results and experiences Initial project participants has been given the first opportunity to exploit the business and operational advantages of the project and now the new XML standard is open to all interested party. The recommended messages, based on XML technology, implement these new standards to reduce costs, cut administration, streamline the projects and improve the competitiveness of short sea transport. The types of short sea messages are (Figure 35):

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• Schedule: For description of short sea schedules and contact details. Use for long term repetitive Master Schedules, ship Voyage Schedules and Delay updates from the Carrier. Subsets are: o Master: The Master Schedule of the Carrier containing routes and contact details. o Voyage: The Voyage Schedule contains the ship schedules the coming 2‐4 weeks. o Delays: The Delay Schedule contains delays relative to the Voyage Schedule. • Booking: For booking of port‐to‐port and door‐to‐door shipment of consignments and transport equipment (containers and trailers). Used for Booking, Confirmation, Updating and Confirmation. Subsets are: o Car: For door‐to‐door and port‐to‐port shipment of cars in car carriers o Container: For port‐to‐port shipments of containers o ConsignEquip: For port‐to‐port shipment of consignments of multiple equipment o D2D Consignment: For door‐to‐door shipments of one ore more con‐ signments o D2D Equipment: For door‐to‐door shipment in equipment (trailers and containers) with multiple pick up and delivery points for each equipment o RoRo: For port‐to‐port shipment of trailers in pure roro carriers and fer‐ ries • Manifest: For cargo documentation for loading, unloading, transshipment, pre/on‐carriage and government reporting. Subsets are: o LoadUnload: Instruction to load and unload specified cargo, containers or transport equipment from a means of transport. Also used for Transhipment. o T2L: For documentation of country of origin for EU shipments via third party ports • Status: For tracking and tracing of consignments and equipment. Can also be used for damage reporting. Subsets are: o Tracking: Cargo and equipment tracking in gate and loading/unloading o Tracing: Request and response message to get last reported status o Damage: Reporting of damage to cargo or equipment

Figure 35: SSXML messages

The message library, presented above, is designed especially for users and providers of shortsea shipping. It can be used to exchange data between the parties in the transporta‐ tion chain concerning the consignments, cargo items, packaging, equipment, services, transport leg, transport mean, dangerous goods, terms, custom information and status.

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SSXML can be applied in different kind of transportation concepts like feeder, door‐to‐ door and industry shipments, as well as bulk, unitized cargo, container loads and RoRo transportation.

Main benefits

• Simplification and streamlining of administrative processes • Reduction in administrative errors • More transparency • Improved customer service • Saving of man hours • Better vessel utilization • Easier to meet the reporting requirements of the authorities • Reduced EDI implementation costs • Neutral message management.

Strengths and weaknesses To be successful the common SSXML needs to be adapted by several stakeholders (e.g. lines and authorities) in large scale.

IT­ applications Shortsea XML is based on UN CEFACT and build on UN Core Components. It is an open standard and is freely available to all parties. Shortsea XML is not intended to replace the more heavy weight applications (such as EDIFACT) but to operate in tandem with them. The list of recommended codes is available in http://www.shortseaxml.org/detail.aspx?pagename=CodeList.

Transferability to LA The solution of promoting open standard for information exchange is transferrable to LA. Based on EU experiences, the XML‐technology provides a solid base for developing the solution.

References http://www.shortseaxml.org/ http://www.promit‐project.net/ http://www.eia‐ngo.com/promit.html

4.4.3. Valenciaport IT Platform

Fact Box

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Name/technology, IT Integration System in Port of Valencia (Valenciaportpcs.net) approach/concept Implementation In commission date

Main achievements Increased efficiency due to the automated operations and adopting error‐free paperless processes Better connectivity: connecting port agents dealing with critical business processes Integration of sea‐port‐land operations between ports, ocean carriers and their shipping agents, freight forwarders and other operators Modernization of logistics management by connecting agents’ systems and using the most advanced information systems Main innovations Technological platform for agents and authorities called valenciaportpcs.net Motivation To tackle the inefficient processes, information exchange and to increase the level cooperation between different shareholders.

Main companies Port of Valencia ports, Administrations (Customs, Harbor Master’s, involved Inspection bodies, etc.) and all different agents around port activity. Transport/ Maritime transport (port operations) Geographical Spain (Valencia region) characteristics

Starting point Relationships among the different agents in the harbor are sometimes complicated. The parts involved in the process are in most cases ship and cargo agents and operators (forwarding agents, shipping agents, carriers, etc). Usually there is a lack of standardiza‐ tion among the reports, IT systems and procedures these agents use. Furthermore proc‐ esses are inefficient and sometimes manual, the visibility along the supply chain is heav‐ ily reduced and there is not integration with back‐office systems. On the other hand the constant growth of container traffic at the Port of Valencia has had as result in a parallel an increase of the volume of container‐related services and usually land transport. This change of framework overloaded the procedures and practices that used to handle these services and revealed how inadequate they were.

Targets of the case The new methods should cover necessities and solve problems such as: • Management of complexity • Increase the competitiveness • Highest amounts of containerized cargos • To provide adequate service level for high amount of containerized cargo • To deal with highly fragmented industry with a large number of agents • Comply with international security and safety requirements • To provide accurate information for planning and operations

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Valenciaportpcs.net seeks to consolidate itself as the main tool supporting the opera‐ tions between agents by: • Modernizing the logistics management by employing standardized information exchanges to facilitate business and administrative procedures, as well as operations concerning cargo movements at Valenciaport ports. • Promoting sea‐port‐land integration by extending the integration already accomplished between the Port Community and the SIC to land (with haulage operators) and to sea (integration with the world’s leading ship owners via INTTRA and GT Nexus). This means that users will be able to view the entire transport chain in the portal.

Case description Mode selection background Usually there is a lack of standardization among the systems agents used. Furthermore, the increased volumes revealed the inefficiency of current methods and processes, which encouraged Port of Valencia to replace inadequate methods by modern ones. To increase the speed of the processes and operations, Port of Valencia decided to create a new IT system to coordinate every agent in the Port (Figure 36). The system called Valenciaportpcs.net is a web service platform created to coordinate all the agents involved in maritime logistic processes and to integrate following systems: • The EDI services provided by the Port Authority for handling ports of call and dangerous goods. • The services offered by the SIC (information and communication system) for handling haulage, manifests, liaison with terminals and customs information. • The maritime services provided by carriers: shipping instructions, bookings and schedules.

The IT web platform, developed to cover Port of Valencia necessities, is a improvement of the SIC (Community Information System) and EDI‐based applications for the ex‐ change of information between the agents of the Port Community and the Port Authority of Valencia.

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Figure 36: Valenciaportpcs.net operating Principles

Valenciaportpcs.net covers business and operating transactions for sea, port and land operations. The new IT system integrates all the agents involved in the logistics opera‐ tions that take place in the port and solves the coordination problems they have to load and unload shipments. The evolution stages of PCS are illustrated in Figure 37.

Figure 37: PCS development stages

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Results and experiences The tool provides information related to logistic processes in several contexts and for several purposes. These are presented below with some examples. • Sea – sending and confirming documentary procedures about transactions, confirming bookings and shipping instructions. • Port ‐ the electronic processes involved in port of call requests, dangerous goods declarations, pre‐loading cargo manifests and summary declarations. • Land: processing haulage orders, cargo acceptance and delivery orders, and rail loading orders.

In addition to administrative services, valenciaportpcs.net also features more opera‐ tional functions like: • Integrated Track and Trace, which enables platform users to obtain track and trace information about their shipments (e.g. current status of their cargo, transshipments carried out or documents processed). It also allows users to integrate this information into their own systems to make it available to their customers and even enabling users to obtain information about their shipments anywhere and at any time through private section of the valenciaportpcs.net web page. • Quality control service provides information from the different agents involved in transportation concerning the compliance and the quality management provided by users of the platform themselves.

The concrete results/indicators of the project • 80% of Valenciaport traffic is operating through valenciaportpcs.net • 28 shipping companies are integrated in the platform for shipping instructions and notes, and more than 70 shipping lines for other services • 169 logistics operators are integrated in the platform • 167 road transport companies are integrated in the platform • 66 maritime agents are integrated in the platform • 13 empty container depots are integrated in the platform • 4 stevedoring companies are integrated in the platform • More than 90.000 daily messages are managed through the platform • Response time by message is under 5 minutes.

Main benefits • Economic advantages: o The port is now more efficient, flexible and their customer service has improved. o Ability to manage more TEU’s o Improvement in Port services and the information exchange allows faster service to be provided with a higher reliability. o Productivity has improved due to standardization of all the agents, furthermore truck drivers and the rest of the agents have also raised it because information is more precise and waiting times and mistakes have been reduced.

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o Improved processes and reduced paperwork. In addition, as data are more precise there is a reduction of the excess costs. Optimization of processes results of costs reduction. • Social benefits: o Reducing waiting time at terminals, congestion of ships at the Port, etc. decreases hazardous emissions. o Noise is reduced due to using less number of trucks at the port and congestion.

Market success factors • Integration of all the agents working at the port improves productivity and helps to become more efficient. • Error‐free processes help to reduce costs. • Gathering together different systems and making them run can provide informa‐ tion faster and more reliable. • Strong project leader • Public bodies compromise with the project • Port Community involvement.

Strengths and weaknesses Easy access to all integrated logistics information in sea, port and land leads into better performance of operations, which improves quality and customer service, makes trans‐ actions more efficient and allows one‐stop access and communication with carriers. The system is easier to use thanks to two methods of integration: electronic messaging inte‐ grated into the user’s applications and an exclusive customer application. These are the strengths of the systems in question. One of the challenges is the integration of all the agents working at the port. Also the ne‐ cessity of creating a new application to integrate the agents’ IT systems with the new web‐service and need of public funding are challenges for further development. Fur‐ thermore, the possibility of political barriers needs to be taken into consideration since the Port of Valencia is a public institution.

IT­ applications Valenciaportpcs.net is a web service platform that integrates the EDI (Electronic Data Interchange) services provided by the Port Authority and the maritime services pro‐ vided by carriers. Since the users may choose, whether to use web based systems or to integrate their current systems with valenciaportpcs agent application, the service can be utilized among most shareholders. To differences in these two application methods, refer Table 6.

Table 6: Modes of integration Electronic Messaging Application Web Messaging Formats Departures and Arrivals YES YES NO ‐ YES Bookings YES NO XML IFTMBF ‐IFTMBC

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YES Shipping Instructions YES NO XML IFTMIN YES Inland Transport YES NO COPARN CODECO XML Plain COPINO YES Track and Trace YES YES XML IFTSTA Port Calls YES SI (enquiries) NO ‐ YES Dangerous Goods YES NO XML EDI IFTDGN YES Terminal Instructions YES NO XML EDI Plain COPRAR COARRI YES Goods Declarations NO NO EDI IFTSUM Customs Information YES NO NO XML EDI Plain Reports NO NO NO ‐

Collaboration between actors The system is based on the needs of users and to integrate individual systems better to‐ gether. This is why the needs of stakeholders, as well as the port authority, have been taking under consideration when building the system. However, the coordination should be the base of the development in future as well.

Quality issues Applied system should improve the quality of services offered to all stakeholders.

Environmental impacts Environmental benefits: • Due to the use of reliable information, waiting times and the number of the trucks have been reduced or optimized and the emissions of gasses follow the same line. • Always when a port increases its operations and number of containers moved it is needed to build more docks, building. Through this project this impact has been reduced due to optimization of the utilization of the docks.

Safety and security Better planning of operations and information exchange should have positive effect on safety issues.

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Transferability to LA This technique can be used in any industry in LA since it consists on integrating and communicating all the agents involved in the supply chain. They only need is a common way of communication (in this case EDI). In general, this way of working can be used in any kind of geography and industry, but is very relevant in ports because of the distance between the different agents. Technically there is no problem in using this technique for small companies as well, but financial resources may limit the introduction among these ones.

References http://www.valenciaportpcs.net/web/ www.bestlog.org

4.5. Policy strategies This chapter gives some examples of National transport policy actions in Europe. The aim in both cases has been to boost intermodal transport. The German case is a govern‐ mental support for investments and Swiss case describes governmental enforcement practice.

4.5.1. German terminal policy German scheme intends to encourage the development of combined transport by sup‐ porting the construction of new infrastructure and the introduction of innovative equipment. The scheme is financed from Germany's federal budget. Subsidies will be granted for the construction and extension of terminals of combined transport and the purchase of loading equipment for transshipment. This type of aid is aimed at reducing lacking capacity of terminals thereby fostering combined transport of German and tran‐ sit traffic. Terminal development is open to everyone with the same rules and services applying to terminal investments and operation. Anyone who wants can obtain public grants the same as the railways. The main conditions which must be satisfied are: Š No cannibalism (no other terminal nearby) Š Terminal operator holds rights to the estate Š Must operate on a non‐discriminatory basis with equal access to all Š Economic plan Š Adequate business plan. Subsidies can be up to 85% of the investment including land acquisition, necessary in‐ frastructure, buildings, equipments and costs of planning. The intermodal terminal is treated as part of public infrastructure and thus a member state has no restrictions as to the method of financing. Public grants are also available for terminals because they en‐ joy the infrastructure privilege. A long standing principle is that terminals are evaluated only on economic terms (benefit – cost analysis) and not so much on financial aspects. Now Germany has a network of terminals with basically no capacity problems. There are many good SME business models in operation and intermodal transport is on the in‐

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crease. Terminals are competitive and playing their part in shifting cargo from road to rail (for trips typically longer than 400–500 km). In 2006 the available funds for construction of terminals were 81.6 million Euro. The trend has been growing from the 90s. This has partly influenced the growth of combined transport both on road/rail and inland waterways (Figure 38). The scheme will be in place until 31 December 2011 with a budget of €115 million annually.

Figure 38: Development of combined transport in road/rail on Kombi- network2000+

4.5.2. Swiss case Swiss transport policy is based on clear aims for modal shift. Protection against negative effects due to heavy traffic includes measures such as transfer of transalpine freight transport from road to rail and denial of road capacity. There is an explicit modal shift target in traffic transfer act to reduce the number of heavy goods vehicles crossing the Alps by road to a maximum of 650000 per year up until 2009. The cross Alpine traffic in France and Austria are dominated by trucks, the share being 77% of total volume. In Switzerland this share is only 35%. The results of active modal shift policy are evident. The share of road transport is decreasing and the growth is in intermodal transport (Figure 39).

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Figure 39: Progress of modal shift policy in Switzerland

There are multiple measures underway to achieve the modal shift: • Constitutional obligation • Traffic transfer act • Bilateral land transport agreement. These measures include the user and polluter pays principle, more capacity and produc‐ tivity, and added efficiency and quality through railway reform. Supporting measures are promoting intermodal transport and reducing rail infrastructure charges. A heavy vehicle fee is used on all roads in Switzerland. The fee is performance based related to distance, weight and emissions. The total financial support has been about 200 million Euros. The amount of subsidies per shipment has a decreasing trend. Instruments to promote intermodal transport are • Subsidies to combined transport • Reduction of track access charges • Investments in terminals for combined transport • Investments on connecting lines • Heavy vehicle inspections. Intermodal transport helps attain the modal shift goal. Intermodal door‐to‐door services are not a public duty. There are no direct subsidies for intermodal door‐to‐door services but there are subsidies for combined transport on rail. Thus there is indirect support for intermodal door‐to‐door services by private operators. Combined rail transport is of importance for modal shift. Combined transport has grown and its share is more than 60 % of transalpine rail freight. This means more competition and less subsidy per ship‐ ment.

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4.5.3. EU Maritime Knowledge Platform FP7 project SKEMA is aimed at establishing a Sustainable Knowledge Platform for the use of stakeholders in the Maritime Transport & Logistics industry. The SKEMA Knowl‐ edge Platform is an internet based tool, which facilitates the distribution of information and enhances collaboration between actors in maritime transport and logistics. The es‐ sential elements of platform are Consolidation & Periodic Studies that identifies the piv‐ otal challenges and offers solutions in an attractive, easily accessible form. The aim of Knowledge Platform is to:

• Facilitate the knowledge transfer between the actors • Identify the obstacles in adapting joint European practices • Support decision making, research and cooperation between authorities.

Thematic Network will engage the maritime transport & logistics industry in the activi‐ ties and outputs of SKEMA project.

Following topics are included to the project:

• Economic and regulatory Analysis • Legal and political aspects • Safety, security and sustainability • Technology forecasting and assessment • The development of transportation and logistics

The involved stakeholders are the members of the maritime and logistics community like the European Commission and national transport ministries, Research organiza‐ tions, Transport Service Providers, which include ship operators, freight forwarders, logistics providers, Exporters & Importers (shippers), European ports, Systems devel‐ opers and consultants. For more information see: http://www.eskema.eu/

4.5.4. IPC/SPC Intermodal/Short Sea Shipping Promotion Centre Since the start of the first Short Sea Shipping Promotion Centre in the Netherlands in 1997, the aim of promoting the modal shift from road to sea has been successfully ac‐ companied by the establishment and work of the national Short Sea Promotion Centres in all EU Member States with coastal areas. The European Shortsea Network (ESN) is a co‐operation between all national shortsea promotion centers. The main objective of the European Shortsea Network is to promote shortsea in the broadest sense of the word on a European level. ESN has no legal status, but is an agreement between the members. The ESN website www.shortsea.info is a portal to the national websites, but it will also incorporate some "European" content. One of the features that will be available is a Eu‐ ropean wide search engine on liner services. Furthermore information on tramp vessels will be available. The increasing pressure on the European transport infrastructure capacity has made shippers and transport operators more aware of the necessity to use intermodal trans‐ port and the availability of services. That is why Short Sea Promoting Centres are ex‐ panding their activities towards Intermodal Promotion Centres.

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4.5.5. Railway border interoperability (INTERFACE) INTERFACE project in FP5 identified and tested new ways to improve border crossings terminals operations reducing customs waiting time, increasing safety, harmonising regulations and developing additional functions. Selected improvements focus on com‐ bined solutions stressing their potential at technical, economical and organisational lev‐ els. The project had the main European economical poles and high potential traffic cor‐ ridors as geographical frame in order to make possible the transferability of the tested intermodal solutions to other sites.

• Demonstrator 1: Intermodal management procedures at border crossing between Austria and Czech Republic (Breclav – Hohenau). The tools developed ensured higher quality in international information interchange between ÖBB (Austrian Railway Undertaking) and CD (Czech Railway Undertaking), by means of the wa‐ gon database connection, and a file management improvement for data inter‐ change (pre advice, consignment note). The impact was especially reduction of stop‐over times at the border and delays as well as an enhancement of produc‐ tivity of the engaged personnel.

• Demonstrator 2: Development of logistical concepts at border crossing between Spain and France (Port Bou). The related outcomes were an improved elabora‐ tion of transhipment plans and their flexibility; decrease of plans non compliant to technical and security rules; easier transhipment planning training.

• Demonstrator 3 Interactions among terminals and network at border between It­ aly and Switzerland (Novara CIM). Harmonization between the Information Sys‐ tems interface of CEMAT (the main Intermodal Operator at Novara terminal) and of Trenitalia (the Italian Railway Undertaking) and setting of a common wagons database were deployed during the project. Those solutions allowed, respec‐ tively, to avoid any train manual data entry and the standardisation of wagons technical data. The outcomes were the reduction of trains delay from the termi‐ nal to the rail network because of human mistakes in data transfer, and the elimination of any train “weight and length check” failures.

4.5.6. Case Port of Helsinki / Vuosaari Harbour, Finland The state‐of‐the‐art Vuosaari harbor was opened in Helsinki 2008. Opening the Vuosaari greatly relieved the problems caused by congestion in old harbors located in the centre of Helsinki. Vuosaari is located about 20 kilometers from Helsinki city centre with easy access to road network. For example, the motorway Ring Road III, part of E18, originates right at the harbor gate. The harbor also has a direct railway line, which serves effec‐ tively both inbound and outbound traffic of the harbor. These links ensure advanced cargo connections to the entire Finnish road and railway network. (See Figure 40). Addi‐ tionally, Helsinki Airport, the main airport in Finland, is just 20 minutes from Vuosaari Harbor. Vuosaari harbor also includes and special logistics area, which is fully integrated with harbor operations to ensure solid combination of terminal and port operations. The harbor was realized as a joint project of the Port of Helsinki and private operators, which has also encouraged several companies to establish their operations to desig‐ nated Meriportti Business Park. The integration of operations is visible in Figure 40.

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Figure 40: Map of Vuosaari Harbor, Finland

Vuosaari Harbor offers an excellent environment for road and railway transports that are further enhanced by the new intermodal terminal, estimated to be complete in 2011. Currently the maximum capacity is 1.2 million TEUs and 800 000 trucks and trailers an‐

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nually. The investment was financed by selling the sites of old, centrally located, port facilities that are nowadays used for real estate developing purposes. Several aspects make Vuosaari as a good case of updating port operation to match latest requirements. These are: • The harbor is close to the centre of Finland’s consumption, production and trade. • It offers significant advantages of scale, ensuring a wide variety of logistics ser‐ vices at competitive terms. • In Vuosaari, exports and imports are in stable balance assuring a steady supply of available containers. • The large volumes ensure all services to all customers at all times, including transit traffic. • Number of logistics service providers (i.e. shipping lines, warehousing service providers) and other companies (i.e. maintenance providers) located in harbor area offer produces value‐added services. • Road and railway traffic flows through tunnels are directly linked to main trans‐ portation corridors, as well as traffic flow has been designed to eliminate con‐ gestion and delays. • New port has channeled freight traffic from congested city centre of Helsinki to better location. More information available at http://www.portofhelsinki.fi/Vuosaari%20harbour

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5. ANALYSIS Summary of all cases, their goals, solutions, challenges in LA and EU‐LA transport and transferability is shown the following table. Main focus of EU intermodal developments has been in rail and maritime/inland waterway solutions. This is why air and bulk transport is not analyzed in current cases, which however are not priorities in LA too. Also infrastructure topics are mainly outside the EU intermodal developments, except terminals for mode change. Another general observation is that carbon dioxide was not among the main concerns in LA. Despite of the differences in EU and LA logistics systems, the key findings of EU Best Practices are extendable to LA and allow one to understand the development paths of LA logistics. These aspects to be applied to LA can be identified according the case type classification used in previous chapters.

Table 7: General aspects of Best Practices to be applied in LA Type of case Case Acronym Main aspects to be applied in LA Company Cases: Transport Coca Cola, Sto‐ Arranging logistics chain by using inter‐ system managed by shipper raEnso, Volvo modal transport

Operator Cases: Transport Hupac, Rhinecon‐ Business models, service concepts and system managed by transport tainer, BoxXpress operational principles of intermodal operator Germany, Polzug, transport operator Construrail, Cor‐ man, Hub Zahony, Bilk Logistics Service Cases: Cargo Domino, DB Business model and service concept of Transport system managed Schenker, Kue‐ intermodal logistics network by Logistics Service Provider hne&Nagel (LSP) Information Technology (IT) Port Infolink, Connecting port‐ and shipping operations Cases: Focus in IT Short Sea XML, to logistics network by utilizing informa‐ Valenciaport IT tion technology Platform

Chosen cases, divided in four main groups, allows together to build a picture over the main development lines of logistics corridors in LA. All the parties presented above (companies, operators, LSPs and IT providers) are essential for building a well‐ functioning logistics network. However, the chosen cases are a small portion of the vast EU level business and industrial applications, which all of them have their own specific characteristics. The next table summarizes the key results of best practice case analysis. Also the trans‐ ferability of cases is presented.

December 2010 page 117 Challenges BEST Cate- PRAC- Goals Solution LA EU-LA Transferability gory TICES Company Cases DBS (rail, Business To provide compre- DB acquired Schenker in 2002 Both, the subject and See challenges in LA Theoretically the markets in road) model, ser- hensive logistics ser- to integrate the logistics services object of acquisition the field of large LSP's are vices vices as a group, but of Schenker into its own service needs to be viable and very much saturated. The at the same time al- portfolio. DBS formed the one of the services of object model of entering market still low indecency of indi- group's core businesses, Trans- company needs to fit into could be implemented in vidual business units. port & Logistics Board Division. service palette of subject smaller scale. Also rapid interven- Still some problems may occur company. Also it must be tion into new field of due to the ambiguities in chain kept in mind that today business was de- leader/ownership. the saturation level of sired. markets is high, because of large global players. StoraEnso Business To redesign the Intermodal (road, rail, water- To be efficient, the con- Challenges are large- Concept of choosing the mode (Road, Rail, model, op- transportation chain borne) to facilitate transportation cept need leader com- ly the same than in of transportation with respect Waterborne) erations, for reducing costs, modes and customer's expecta- pany that is large LA. The chain, still of demand. Also the idea of equipment lead times and envi- tions. Introduction of SECU and enough, since it can needs to be owned SECU concept could be cop- ronmental impact, as new cargo handling concept for mainly be applied only by individual com- ied or extended to other areas well as meeting cus- increased density and reduced into a case of individual pany despite of geo- and industries as well. tomer demand (fre- lead times. Also vessels were company (or at least very graphical scope. quency and quantity) designed to support efficient similar companies). Con- cargo handling, as well as being cept also requires rather more environmentally friendly. much investments and long term commitment. Construrail Business Reducing logistics Intermodal transport (road, rail, Relatively large volumes Due to the larger dis- Concept may be transferred if (road, rail, ma- Model, Op- costs and environ- maritime) and usage of dry port are needed to gain cost tance, the volumes adequate LSP and company is ritime) erations mental impact of for transporting construction ma- savings. Also the cargo need to be bigger and found for committing to ser- transporting construc- terials from one country to an- cannot be perishable due also more warehous- vice. tion materials across other. Cargo is transported to to the long warehousing ing capacity is borders. port three times a week by train periods. Also the railroad needed. and ship leaves once a week. infrastructure is needed. Deliverable D2.1: Best Practices handbook

K+N Business To understand the The case company acts in a two The challenge is to es- See challenges in LA • The core of the business, model role of leader and main levels as a forwarding tablish a transport net- logistics services, is transfer- user of the transpor- company. Firstly, it is an inte- work, where logistics able tation corridor, as well grator of the chain, where the services are a natural • The acting as a forwarder, is as the structure of train operators coordinate the part of a corridor offering. transferable corridor itself by scru- transport from terminal to termi- Also some infrastructure • The 4th party logistics is a tinizing the operations nal. The second role is to take related challenges may consequence of a develop- of intermodal com- care of the client service in both exist in context of inter- ment progress from anchor pany offering door-to- ends of the corridor. modal transport. customers handled by railway door services. Also operators to a comprehensive the required service corridor network level must be main- tained.

Volvo Trucks Business The goal was to op- - Big volumes inbound and out- Intermodal solutions in Not relevant Combining of inbound and (rail, back-up model, Op- timize the costs of its bound in one company, - Sche- car industries instead of outbound material flows of in- by SSS) erations logistics solutions, as duled rail services, - Strictly con- road transport. Needed: - dividual company by intermo- well as reduce the trolled supply chains by own rail services, - infrastruc- dal solution, controlled by the environmental im- logistics organization (Volvo Lo- ture. Mapping of raw ma- shipper. Company internal so- pact. Solution needed gistics - fully owned subsidiary) terial sources and main lution. to be more reliable, markets are needed for sustainable and in- solution building. crease the capacity.

Coca-Cola Operations To find the optimal - Intermodal transport (75% of Availability of intermodal Not relevant The concept of facilitating the (Rail, road, tradeoff between total distribution) led into 600 service infrastructure to distribution mode in respect maritime) transportation costs TEUR cost savings per year - allow distribution from external situation by using only and offered services Synergies with other brewery in one plant to whole coun- one transport mode or combi- in respect with loca- terms of distribution network - try. Also to be able to nation several modes. tion decisions and Flexible distribution concept, respond the flexibility durability of the prod- which allows cheaper and slow- requirements, the supply ucts. The chain er mode to be used if possible. of transportation services should also promote This also promoted environmen- needs to be in somewhat CCD’s environmental tally cleaner modes. high level engagement.

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ICT SSXML (short Technol- To increase the com- Shortsea XML standard was To successfully imple- If the major standards The concept of one common sea shipping) ogy petitiveness of SSS developed for exchange of data ment new standard, are developed sepa- messaging standard and against road trans- between parties in a shortsea some strong actor needs rately in two continents, even the technology if com- portation by cutting transport chain. It simplifies ad- to take the leading role in the potential conflict patible to current concepts. costs. ministrative processes, reduces implementation process. between these exists. errors and work hours, improves Also the current situation customer services and easies and standards needs to the work of authorities. These all be taking into considera- ultimately reduces the costs. tion as these act as a foundation for building new standard Port Infolink Technol- Strengthening the Portbase combines Port infolink Since the non- profitable If systems are devel- Port Infolink seems to be (Maritime/port ogy competitive position and PortNET systems and this application is the recom- oped separately, these transferable to other regions, operation) of the ports of Rotter- way makes information ex- mended structure, it also need to be able to especially to big harbors. dam and Amsterdam change more simply and effi- means that some in- make compatible. and the other stake- ciently. The Port Community vestments need to be holders of these System covers the whole spec- made. Different stake- ports. trum of transport modes that holders needs also be meet at the port enabling modal convinced about the ad- integration from ship line to hin- vantages. terland by short sea, barge, rail and road. The solution enables all the links within the port of Rotterdam's logistics chain to efficiently exchange information with one another. Valenciaportpcs Technol- To tackle the ineffi- The need for modernizing logis- To be able to convince all If systems are devel- This technique can be used (Maritime/port ogy cient processes, in- tics management, promoting the relevant actors (port oped separately, these in any geographical are. operation) formation exchange sea-port-land integration and administration, authori- need to be able to Technically there is no prob- and to increase the interconnecting associated ports ties and users) of the make compatible. lem in using this technique in level of cooperation was solved by launching Valen- benefits of the common any size of companies but between different ciaportpcs.net web service plat- system. There is also a financial resources may limit stakeholders in mari- form, which coordinates all the need for some invest- the introduction. time port operations. agents involved in maritime lo- ments to be made in or- Ultimately this should gistic processes and enhances der to unify the systems. lead into better prac- information exchange.

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tices and more effi- cient port processes. MarNIS (Mari- Technol- The goal of the pro- - Co-operation between authori- - Need of investments to - Compatibility of sys- Increasing co-operation be- time) ogy ject was to increase ties (cross functions and - built the necessary ICT tems in different coun- tween authorities and other the safety and effi- borders) - infra, - Persuading all tries or continents stakeholders, ICT solutions ciency of maritime enhanced utilization of new actors of gained benefits framework, enhanced use of transport including technology and concepts (MIM, technology and pooling the port activities. Also MOS, VTM), - data the better manage- harmonizing standards and ment of ship and ob- pooling the relevant information servation of all rules for better accessibility was pursued. Rail cases BoxXress (In- Business To take the pressure Establish an intermodal corridor Adequate infrastructure Even thought the intermodal termodal: Port, model, off the sea terminals that connects German ports to and availability of actors, services are typical for Eu- Train, Trucks) opera- and improve cus- Southern parts of the country. who can commit to rela- rope, the business model tions tomer service, as well Also the efficiency of operations tively long development can be transferred to other as reduce logistics can be improved by higher project. The operator al- areas as well. However the costs and environ- transport volumes, higher fre- so needs to possess cer- long development period is mental impact of quencies, wider time windows tain level of resources to needed to establish this kind transport. and higher number of shippers. be able to produce high of service (at least 10 years). In addition the optimization of quality service with com- This requires that needed cargo volumes of equipments petitive price. infrastructure exists. The role and technologies involved are of service providers (forward- essential for economically feasi- ing agencies) should also be ble corridor. considered. Hupac (Rail, Business Hupac set the target The growth was pursued with Different geographical Not relevant Intermodal strategy as a part road) model, on growing in the consequent extension of the and infrastructural cir- of service concept and busi- opera- markets and to sup- network and optimizing intermo- cumstances that may ness model can be adapted tions port this by strategi- dal operation. The main innova- affect on competitive- also in wider context. cally increase in in- tions of the approach were inte- ness. termodal transport. grated traction on cross border The intermodal strat- intermodal operations and ser- egy also aimed at vices, consequent shuttle sys- increase in quality tem and consequent long term and solving problems intermodal strategy. in border crossing.

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Cargo Domino Business To provide environ- Transferring cargo from road to Sufficient infrastructure is Not relevant Combining road and rail car- (Rail, road) model, mentally friendly and rail, where possible by utilizing needed to built up a go transportation in door-to- technol- competitively priced existing network as transship- transportation network door service ogy combined road-rail ment points and introducing new with adequate coverage. transport option for technology for shifting swap Also the success of the doo-to-door service bodies from road to rail (and case was partially based without major invest- vice versa). Due to these rea- on governmental incen- ments. Advantages of sons, no major investments tives for rail transport. legislative incentives needed to be made are also exploited. Polzug Opera- To connect the The main players on the market The infrastructure and Not relevant The business model is trans- tions, northern Germany in this destination took the initia- lack of service providers ferable to other areas as business seaports (Hamburg tive to cooperate and bundled may constraint the pro- well. model and Bremerhaven) their strength to meet the market viding the intermodal to seven most impor- demands. Polzug offers a train services tant economic cen- connection via Ukraine, further ters in Poland (and to Georgia, Azerbaijan, Armenia further on with and also to Central Asia. This many other regions) way Polzug connects these re- by rail connection. gions with the seaport of Poti. HUB Zahony Business Creating a public in- The largest rail trans-shipment The similar facility with Not relevant The concept is transferable (Rail, road) model, termodal area and facility in Central-Eastern Eu- HUB Zachony could pro- to LA where different gauges technol- expanding the logis- rope with public intermodal lo- vide a solution for pro- conditions apply. ogy tics potential of inter- gistical centre was established moting intermodal trans- modal transport by in Zahony, which is located in port and connecting dif- setting up public junction point of different rail ferent gauge structures warehouses and pro- gauges. It offers an Industrial with each other. How- viding gauge-transfer parks with infrastructure, wide ever, the significant in- and standard rail connections. vestments are required. BILK Com­ Opera- The objective was to The first development phase The infrastructure and Not relevant The business model is trans- biterminal tions, establish a new and included 4 loading tracks (750 lack of service providers ferable to other areas as business first bigger intermodal meter), handling equipment, de- may constraint the pro- well. Adequate infrastructure model terminal in a country, pot, offices, customs, parking lot viding the intermodal is needed. and further reach the for trucks and maintenance services 200.000 TEU capac- yard. This together with state-of- ity by 2010. the-art IT solutions allowed of- fering of high quality and broad service portfolio December 2010 page 122 Deliverable D2.1: Best Practices handbook

Inland & Short Sea Shipping RHINECON- Business To utilize the under Providing a new service for all To function, the business Not relevant Business model utilizing in- TAINER (inland model capacity and unreli- customers (despite of size) with model needs an ade- land waterways may be waterway) able transshipment scheduled traffic and service quate inland waterways, transferred with certain pre- times of the ports in level agreements. The perform- ports and connections to requisites. Maine by launching ance is furthermore followed by ocean going vessel ports. new business model, key performance indicators. Current inland waterways which fulfills the de- network, passages and mand for reliable and industry location near frequent IWW ser- waterways needs to be vices. scrutinized. CORMAN (inland Opera- To increase the punc- Redesigned transportation chain Port access using the Not relevant Transferring the port's feeder waterway) tions tuality of shipments between production plant and inland waterways. Need transport from road to IWW. and avoiding conges- seaports by using inland water- to unravel the IWW- tions with respect of ways instead of road transporta- vessel going passages to social- and environ- tion and from the ports mental friendly values

December 2010 page 123 6. CONCLUDING REMARKS In EU, co‐modality and intermodality are of fundamental importance for developing sus‐ tainable transport solutions. As roads are being increasingly overloaded, intermodal transport can offer reliable, cost‐effective delivery in an environmentally conscious manner. Developing freight transport logistics is primarily a business‐related activity and a task for industry. Nevertheless, the authorities have a clear role to play in creating the appropriate framework conditions (i.e. infrastructure and legislative incentives) and keeping logistics on the political agenda. The ENABLE project has produced an overview33 of the existing situation in Brazil and Argentina, as well as in EU‐LA transport corridors by identifying the problems, require‐ ments, constraints and priorities of the target countries’ freight transport environment. Most of the found topics deal with the general conditions in logistics business environ‐ ment and are not intermodal specific. Development of intermodal transport has to solve same constraints as single modal solutions. Some key findings from this review are: • The EU has become the largest foreign investor in LA. It is the largest development partner for the region, and the primary trading partner for many countries of MERCOSUR and especially Argentina and Brazil. • Today in Brazil, multimodal connections serve as storage while waiting freight transference between the modals. • The Argentinean multimodal network is utilizing road network that crosses the country, added with a remarkable rail network around the district of Buenos Aires. • Rivers of Parana, Uruguay and Plate discharge into the Atlantic ocean and provide short sea shipping connection between Argentina and Brazil. • Brazilian and Argentine railways are franchised and under unfavorable conditions for enlargements. Rail networks serve hinterland ‐ port connections, moving ex‐ port bulk cargo. In Brazil, part of this network also serves transport of raw materi‐ als to the heavy industries, mainly iron ore. • Brazil and Argentina have different gauges. • The main problems associated to the maritime transport are related to institu‐ tional problems, like slowness of the port and customs formalities, the rates, the taxes and the rules of workers in public ports. This Best Practice (current ENABLE D2.1) report has described selected European Best Practices in co‐modal and intermodal freight transport. Intermodal innovations are pre‐ sented in separate report (ENABLE D2.2). The current intermodal status in LA has guided the selection of best practices, which are further divided into five categories ac‐ cording the type of the case: 1) Company Cases, 2) Operator Cases, 3) Logistics Service Cases, 4) Information Technology Cases and 5) Policy Strategies. Despite of the differences in EU and LA logistics systems, the key findings of EU Best Practices are extendable to LA and allow one to understand the development paths of LA logistics. The key findings of best practices to be transferred to LA include:

33 ENABLE D1.1. Current Status of Freight Transport in Brazil and Argentina, and EU‐LA Transport and Business Relations.

Deliverable D2.1: Best Practices handbook

• Developing logistics chain by using intermodal transport • Business models, service concepts and operational principles of intermodal transport operator are key elements in organizing intermodal services • New business models and service concepts for intermodal networks are needed • Port and shipping operations should be connected into logistics networks by utilizing information technology Chosen cases, divided in five main groups, allow together to build a picture over the main development lines of logistics corridors in LA. All the parties included to analysis (companies, operators, LSPs and IT providers) are essential for building a well‐ functioning logistics network. Container volumes in ports are quite modest at the moment (Brazil 4.6 mio TEU in 2008 and Argentina 1.8 mio TEU in 2007). The concentration in main ports (Buenos Aires and Santos) gives good preconditions for developing port‐Hinterland intermodal solu‐ tions. According to LA statistics, a lot of rail infrastructure exists but the traffic volume is in international comparisons low34, at least compared to rail network. Another possible development area is moving trailers from road to railways and inland waterways. All actors are needed to discuss on common problems and challenges such as infrastruc‐ ture and operations. Actions like ENABLE project are needed for strategic organization and planning. International business and research networks like UIRR, EIA, EIRAC and ECTRI in Europe have a clear role in promoting and justification of development. Public administration, especially customs is an essential part of countries logistical competi‐ tiveness.

34 www.worldmapper.org

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