English Arabic Armenian Azerbaijani Chinese (Simplified) Chinese (Traditional) Czech Danish Dutch Estonian Filipino Finnish French Galician Georgian German Greek Hindi Hungarian Icelandic Indonesian Italian Japanese Korean Latvian Lithuanian Malay Maltese Norwegian Persian Polish Portuguese Russian Slovak Slovenian Spanish Swedish Thai Turkish Ukrainian Vietnamese

Rail cost savings to "bite your hand off"

PRESS RELEASE

April, 28, 2015: Freight trains are now carrying more intermodal traffic, mainly fast-moving consumer goods, around the UK than coal. But more work is needed if rail operators are to wean more customers off road transport and "green" the supply chain.

Speaking at a seminar at the Multimodal Exhibition at the Brimingham NEC, Julian Worth, Director of Transworth Rail and Chairman of the Rail Freight Forum at the Chartered Institute of Transport & Logistics, said that when UK rail services were privatised 15 years ago, the main freight flows comprised heavy, low-value goods and FMCG was barely on the radar. He highlighted the "three Cs", cost, carbon and convenience, as the reasons for rail's change of direction.

He claimed goods could be transported from deep-sea ports to the so-called Golden Triangle in the West Midlands up to 40% more cheaply by rail than by road – "an order of cost saving for which most people would bite your hand off".

Every tonne moved by rail would generate 76% lower carbon emissions. "If you're looking to de-carbonise your supply chain, there's nothing more effective you can do," Worth said.

The convenience aspect was that a truck driver would have to offload and turn around inside two hours to pay his way, Worth added. "With a rail box, within reason, you can call it in when you want it."

Andrew Hemmings, Secretary of the Rail Freight Forum and a contributor to Network Rail's freight utilisation strategy, said, "We weren't far-sighted enough to see the decline in coal, or may have thought that biomass would be going [by rail] into the power stations instead. But the economics of the supermarkets have dictated the rise of boxes into national and regional distribution centres."

From the customer perspective, Tim Wray, General Manager of Multimodal Logistics, said he "struggled" to accept that rail transport to the Midlands could save him 40%. With the merchant haulage market offering him such low rates, rail was "not a cost-effective option," he said.

"Capacity when you need it is the issue. Huge vessels all arrive at same time, and coping with the volumes is difficult."

Rail infrastructure must improve and more lines should be electrified, Wray said. Shippers would make "huge savings" if electric trains didn't have to switch to diesel on route to Felixstowe, for example. The East Coast Main Line was not cleared for high-cube containers and transport was therefore cheaper by road.

Better wagon configurations were vital to a more efficient rail service, and Wray was unhappy about operators' continued use of 60ft wagons. "We need 45ft units, but you take it because you need the capacity."

Worth pointed out that the biggest cost of intermodal transport "isn't the rail bit, it's the on-cost of going the final 30 or 40 miles by road." By using a DC at Daventry - Tesco has already put in place, with Sainsbury set to follow – a container load of goods could be put on a dock loader for £30 or £40 against a cost of up to £100 "just to get out of the gate" by truck.

Tesco had taken out a further tranche of cost by using rail outbound from a national distribution centre to regional facilities in Barking and Tilbury, from where stores across the UK south-east are supplied.

Worth noted a generational shift in attitudes to rail. A former generation of transport managers were actively migrating to road, then came distribution directors who were "agnostic". Incoming supply chain managers now more aware of the need for sustainability and saw rail as a genuine option, though he could recall only one customer who had ever offered to pay more to be green.

Hemmings said freight facility grants had helped pump prime rail projects over a 20-year period but were currently only available in Scotland and Wales, not in England. However, EU funding was available to incentivise small and medium enterprises in eastern England to try rail, and 70 had converted some of their traffic.

More News

Written on 24/03/2017, 21:15
hapag-lloyd-hit-by-low-freight-ratesHAMBURG: March 24, 2017. Hapag-Lloyd reported a net loss of €93.1 million in 2016 on revenue that fell 12.5 percent from the previous year to reach €7.73...
Written on 23/03/2017, 19:40
new-grow-box-technology-from-maerskTINGLEV, Denmark: March 23, 2017. Maersk Container Industry (MCI) has launched Star Cool CA+, an extension of its controlled atmosphere (CA) technology,...
Written on 23/03/2017, 17:04
emirates-responds-to-u-s-laptop-banDUBAI: March 23, 2017. Emirates Airline has responded swiftly to the U.S. ban on laptops and tablets via its passenger flights from Dubai with a free...
Written on 22/03/2017, 20:44
flying-eye-hospital-arrives-in-dohaDOHA: March 22, 2017. Qatar Airways has welcomed the arrival of the Orbis Flying Eye Hospital from the UK where the non-profit organization had earlier...
Written on 21/03/2017, 21:12
fedex-to-launch-round-the-world-from-liegeMEMPHIS, TN: March 21, 2017. Next month FedEx is to begin a B777 freighter flight from Liège, Belgium to Memphis as part of a round-the-world service...
Written on 16/03/2017, 20:20
k-n-acquires-two-pharma-logistics-companiesSCHINDELLEGI, Switzerland: March 16, 2017. Kuehne + Nagel is to acquire two specialist logistics companies in Turkey and Italy to expand its good...
Written on 15/03/2017, 17:52
panalpina-expands-circular-economy-centerDUBAI: March 15, 2017. Panalpina has officially opened its 40,000 square meter logistics manufacturing center in Dubai Logistics City, part of the bonded...
Written on 15/03/2017, 17:12
coyote-logistics-opens-in-guadalajara-mexicoCHICAGO: March 14, 2017. UPS 3PL subsidiary Coyote Logistics has opened a new office in metropolitan Guadalajara, Mexico to develop transborder truckload,...
Written on 15/03/2017, 15:20
auto-traffic-switches-from-road-to-railKIRCHHEIM/TECK, Germany: March 15, 2017. After a five-year hiatus, automobile logistics specialist Mosolf Group is re-introducing a weekly rail link...
Written on 14/03/2017, 19:47
unisys-offers-pay-for-use-air-cargo-managementLONDON: March 14, 2017. Unisys has launched 'Digistics' - described by the company as an "integrated cargo logistics solution" for carriers to streamline...
Written on 14/03/2017, 17:03
mercator-introduces-ice-in-abu-dhabiABU DHABI: March 14, 2017. IT solutions provider Mercator, majority-owned by Warburg Pincus Investments, has launched what it says is the air cargo...
Written on 14/03/2017, 15:59
unilode-wins-saudi-arabian-airlines-contractABU DHABI: March 14, 2017. Unilode, the ULD management company formerly known as CHEP, has won a major outsource contract from Saudia and Saudia Cargo to...
Written on 13/03/2017, 15:37
2016-revenue-increase-for-turkish-cargoISTANBUL: March 13, 2017. Turkish Airlines has reported a six percent rise in air cargo revenue in 2016 to US$996 million. Some US$600 million was...
Written on 10/03/2017, 21:49
nec-to-develop-visibility-platform-for-pandemic-responseTOKYO: March 09, 2017. The U.N. World Food Programme (WFP) and NEC Corporation are to develop the first supply chain visibility platform for pandemic...
Written on 10/03/2017, 20:21
airbus-helps-south-sudan-refugeesTOULOUSE: March 09, 2017. The Airbus Foundation has used an A330 test aircraft to carry 17 tonnes of aid equipment from the UK to Uganda for refugees...
Written on 09/03/2017, 22:32
the-alliance-sets-up-post-hanjin-insurance-planHAMBURG: March 09, 2017. On April 01 'THE Alliance' of Hapag- Lloyd, 'K'Line, MOL, NYK and Yang Ming, will launch 32 liner services to 75 major ports on...
Written on 09/03/2017, 16:35
another-quarter-decline-in-airline-profitsGENEVA: March 09, 2017: IATA says a drop in profits for its member airlines that began in Q3 2016 continued into the last quarter, despite margins...
Written on 09/03/2017, 14:55
hutcheson-to-operate-new-swedish-box-portSTOCKHOLM: March 08, 2017. Hutchison Ports is to operate the container terminal at Stockholm's new Norvik Port, due to open in three years. The facility,...
Written on 08/03/2017, 22:18
record-net-profit-for-deutsche-post-dhlBONN: March 08, 2017. Deutsche Post DHL (DPDHL) has reported a 71.4 percent rise in net profit of €2.64 billion on a 3.2 percent decline in revenue of...
Written on 07/03/2017, 19:49
yusen-supply-chain-uses-circular-economy-and-carbon-offsetHOOFDDORP, The Netherlands: March 07, 2017. Yusen Logistics has won a contract to manage the supply chain of diesel-engine cylinder blocks from...

- powered by Quickchilli.com -