Combined transport needs help

SEAMLESS DELIVERY

MODAL SHIFT • COMBINED TRANSPORT WILL BE KEY TO REDUCING EMISSIONS FROM EUROPEAN FREIGHT TRANSPORT ACTIVITIES BUT WORK NEEDS TO BE DONE TO REMOVE BARRIERS TO GROWTH

EUROPE HAS SET itself some daunting targets in the EU Green Deal and ‘Fit for 55’ programmes. For the supply chain in particular, there are expectations that greenhouse gas (GHG) emissions will be radically reduced by 2030 – less than ten years away – and yet further by 2050.

There is currently a lot of talk about the use of renewable energy and alternative, low- or zero-carbon fuels, but these routes to decarbonisation will take time and lot of money to put in place. Meeting the 2030 targets, in particular, will need more than that.

One obvious route to lower emissions is to move freight off the roads, as road transport emits much more GHG per tonne-mile than do other modes of transport. Moving freight onto rail or making more use of inland and shortsea shipping could help in the drive to lower emissions – but that idea of a modal shift away from road is nothing new: industry and governments have been talking about it for decades, yet industry as a whole appears stubbornly wedded to road transport.

There are some good reasons for that: road transport is supremely flexible, with pretty much 100 per cent coverage; it can be organised relatively easily and, especially with today’s telematics systems, highly transparent. Rail only reaches those parts of the world where there are tracks, and transport by water – inland or coastal – has similar limitations on accessibility. Both of those alternative modes have also been plagued with disruptions in recent years and are far less reliable overall than road transport.

BRASS TACKS However, with rising fuel costs and a seemingly endemic shortage of heavy goods vehicle drivers in most of Europe (and other parts of the world), there is a growing appetite to use alternative modes. That is reinforced by the growing demands for sustainability in all operations; in the chemicals sector, manufacturers are acutely aware of the expectation of governments and the public about how they go about their business and they are increasingly expecting the same from their supply chain partners.

The European Chemical Industry Council (Cefic) set out the issues that are holding back the shift away from road transport in a paper published this past January. It noted that the use of combined transport will be a “significant contributor” to achieving the EU Green Deal goal of reducing GHG emissions in transport by 90 per cent by 2050 but also said that measures must be taken – by policy makers, governments and the logistics industry – to further increase the attractiveness of combined transport.

Cefic says there are four main action areas that would help make combined transport the first choice for chemical producers: • It must focus at all times on satisfying its customers’ needs • It must be competitive with road transport on cost • Adequate network infrastructure must be in place to access rail and enable the reliable and efficient execution of main legs • Transport chains must be fully digitised end to end, enabling seamless information

exchange and optimisation of operational execution.

WHERE ARE WE NOW? Cefic’s position is that the idea of combined transport is just not delivering on those imperatives. Rail freight performance is falling short of shippers’ expectations – and those of their customers. It lacks transparency and reliability, so shippers are reluctant to jeopardise their customer relations – they need to be confident that consignments arrive punctually. Inland waterway options are no better: there is a lack of integration between inland and deepsea shipping, compounded by port congestion. Lead times are a problem in both modes.

As well as reliability and flexibility, cost is a major consideration for all shippers. They will only move willingly to combined transport if the end-to-end cost is lower than going by road all the way. At present, Cefic says, rail is only competitive over distances of more than 750 km – this needs to come down at least to 500 km.

There is also a link between reliability and cost: the current lack of reliability translates directly into low asset productivity; poor punctuality results in lower capacity utilisation in loading and unloading operations at shipper and consignee locations, and for terminal operators and rail and barge operators.

Cefic also repeats its calls to eliminate national rules and regulations that hinder seamless cross-border traffic; there needs to be better international cooperation and harmonisation in rail freight. It also warns strongly against the imposition of cabotage requirements for first- and last-mile legs of international combined transport operations.

Flexibility in the rail sector is further hampered by a shortage of terminal capacity and insufficient terminal connections, as well as a low frequency of departures. This is less of an issue in the main corridors but a major problem elsewhere, especially when the first or last mile to and from the terminal is a lengthy trip.

Some chemicals pose specific challenges: intermodal transport lacks the necessary infrastructure to handle temperaturecontrolled product in particular, Cefic says. Terminals often have no means to heat/cool and monitor the temperature of goods during interim storage and transit.

Digitisation of the information flows through the supply chain has the potential to improve visibility and, therefore, reliability. However, Cefic says, the degree to which combined transport chains have moved away from manual processes is poor; this appears to be despite the best efforts of the European Chemical Transport Association (ECTA) as well as IT system providers. The lack of automation leaves drivers having to handle documentation, reducing their driving time and exacerbating the driver shortage. It also means there is a lack of visibility of where the gaps are in the system, making it difficult to identify where investment is needed. Also, Cefic notes, if industry does not move on the issue, there is a danger that rules will be imposed that end up increasing bureaucracy.

FOCUS ON THE TERMINAL As a trade organisation representing the chemical industry, Cefic’s paper clearly demonstrates the frustrations that shippers feel with the existing multimodal supply chains in Europe. But it is not that transport providers are unaware of the issues Cefic presents, nor that they are not trying to do something about them. On the other hand, they too are hampered by issues outside their control, especially the disruptions to alternative modes of transport caused by, among other things, maintenance programmes on the rail network, port congestion and variable water levels on the Rhine and other waterways.

Writing recently in Wascosa’s Infoletter magazine, Andreas Schulz, chairman of the

THE RAIL SECTOR HAS A LOT OF WORK TO DO IF IT IS TO

REMOVE OUTDATED OPERATIONAL AND BUSINESS

PRACTICES AND BECOME MORE ATTRACTIVE AS AN

ALTERNATIVE TO TRANSPORT BY ROAD

board of the German Road-Rail Transhipment Company (Deutsche Umschlaggesellschaft Schiene-Strasse, DUSS), noted that the growth in combined transport that will be required to meet the German government’s plans – 6.8 per cent per year to 2030 – will bring major challenges, not least in terms of terminal capacity. “Are the facilities’ transhipment capacities sufficient to shift the forecast volumes to rail, and what are the strategic approaches needed to increase the capacity?” he asked.

Intermodal terminals are currently working at full capacity and there is an urgent need to expand existing facilities and build new sites. DUSS, a subsidiary of DB Netz, Germany’s national railway infrastructure operator, has begun construction of 14 new terminals and is expanding another two, with all the work due to be completed by 2030. But Schulz says that Germany is leading the way compared to other countries. “When you consider that it takes five to ten years from start to finish to get a new terminal ready for operations, it is clear that investing in ‘steel and concrete’ will not be enough to cover capacity needs by 2030,” he added. That means that, to close the capacity gap, it will be necessary to make more productive use of existing infrastructure.

SAME SPACE, MORE CARGO As things stand, Schulz explained, terminals tend to be utilised in line with customer demand. “Most users want to have the transport done overnight, coupled with a lengthy slot throughout the day for early pick-up and delivery in the afternoon,” he said. That means that demand peaks through the day, often exceeding handling capacity, while there are other times of the day when cranes are under-utilised. Spreading demand more evenly would free up capacity and reduce process costs in terms of maintenance and throughput times. “Synchronising traffic leads to increased productivity, not just for the terminal but also for the upstream and downstream stages of the chain,” he added.

To do that involves all parties involved being genuinely committed to the change. Shippers need to understand that terminals are not storage facilities or buffers for disrupted delivery chains. When containers lie idle for long periods at a terminal, it results in poor quality in the supply chain and a reduction in capacity.

The second driving force that can increase the productivity of terminals is greater digitisation of operations, which will reduce processing times for road and rail vehicles. “The shorter the processing time is for a truck and the faster that trains can be prepared, the more transhipments can be carried out,” Schulz pointed out. “This requires gates with video monitoring and automated identification of loading units as well as a detection system for dangerous goods and damage. Outdated dispatch counters also need to be phased out for dangerous goods and for customs clearance, and paperless dispatch must become a standard process.”

DUSS has piloted a ‘slot management’ system at its Ulm terminal, which it plans to roll out to all its locations this year. Through this system, the freight forwarder or haulier can check the availability of their loading unit online, add data and send a notification when it arrives. After arrival at the terminal it is automatically identified at the gate and guided through the terminal with no need for paperwork or even for the driver to leave the cab.

One other idea DUSS is working on is automating its crane systems, with the aim of achieving consistency and pre-sorting to save time. This system will be installed on all its new sites and some of its major existing facilities will be upgraded.

TAKING A LEAD Leading combined transport operator Hupac is taking measures into its own hands. Having

EFFECTIVE MULTIMODAL TRANSPORT NEEDS MORE

witnessed an increase of 10.7 per cent in the number of road consignments carried by rail last year (though noting that the 2021 figure was affected by the Covid pandemic), it is focusing on investment in both physical and digital assets.

“Combined transport is a growth market whose development is strongly influenced not only by demand but also by the available capacities and the quality of the services offered,” explains Hans-Jörg Bertschi, chairman of the board. The Swiss modal shift policy and the European Green Deal are creating strong demand impulses, as are the increasing bottlenecks on the roads. On the infrastructure side, the required capacity is gradually being created through the expansion of the freight transport corridors. Hupac is forecasting annual volume growth of 7 per cent for the next four years; with forecast annual economic growth of 2 per cent, this implies an increasing shift of traffic off the roads.

Hupac is also aware of the need for shippers to have confidence in combined transport, which means stabilising quality on the rail network despite the intensive construction activity on transalpine routes. “We will manage the performance of our network even more actively in the future,” says Michail Stahlhut, CEO. “We also expect a corresponding effort from our rail partners. Our declared goal is quality leadership. If the quality is right, traffic growth will come all by itself.”

LOOK AHEAD Hupac is also aware that the long-term development opportunities for combined transport depend to a large extent on the course set by transport policy. To that end, it has partnered with industry associations and gained the support of Swiss officials for greater quality and capacity in the rail network. Earlier this year, the Swiss parliament began negotiations with France over the electrification of the WörthStrasbourg axis to upgrade the left bank of the Rhine to corridor parameters. Hupac hopes this will eliminate the biggest bottleneck on the TEN-T corridor from Rotterdam to Genova.

What Hupac terms a ‘corridor perspective’ rather than narrow national thinking will help focus development on the needs of the freight transport industry and its shipper clients. There is a need, the company says, to interconnect the various TEN-T freight corridors to increase resilience and offer alternative routes when closures are in place. In addition, freight transport capacity must be secured through international network utilisation planning as well as giving priority for freight traffic over long distances at times of operational disruptions and irregularities. That can be alleviated through international coordination in planning construction work.

Hupac is also investing in the digitisation of its operations as a high priority. Customers now expect milestones and ETA data to be made available immediately throughout the entire intermodal chain, without gaps or errors and in real time. This requires a standardisation of the data formats in the European combined transport market. Together with partners, Hupac has been investing in the EDIGES consortium since 2019 to drive forward cross-sector digitalisation. A joint operating company will be established this year to promote the use and further development of the system as an open platform. cefic.org www.hupac.ch www.wascosa.ch

GREATER DIGITISATION CAN HELP IMPROVE