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inside VOL51 ISS3 JUNE/JULY 2017 inside VOL51 ISS3 JUNE/JULY 2017
Driving energy efficiency gains The Amazon effect Custom packaging Tomorrow’s chains Oxford Cold supply expansion Beyond barcode Sendle’sthe James Chin Moody Introducing MEGATRANS
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inside VOL51 ISS3 JUNE/JULY 2017 Custom packaging Oxford Cold expansion Sendle’s James Chin Moody Introducing MEGATRANS
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This Inissue this issue March 2016 June/July 2017
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All the right boxes
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With the dark, cold days of winter upon us, it’s more important than ever to keep focused on the big-picture stuff – the long-term, wide-scope projects to better ourselves, the industry and the nation. This winter, Australia’s logistics and materials COVER STORY handling industry will be hard at work getting ready for the incoming freight deluge, which 12 A common ground 30 The human touch has been forecast to increase by 26 per cent As Australia and much of the western world, Automation is gradually increasing its reach in face one of the least predictable periods in recent industry – one day, systems will be able to carry over the next decade. history, with volatile voting exposing extreme out processes such as manufacturing, packaging, In the future, 2017 will likely be remembered Tru-test 04 Bulletinboard Capture & as a 42 Data divides, the time is nigh for a collective and of quality. picking and transporting without so much as a period of rampant uncertainty – due to Supply concerted effort by industries to work together to cursory human supervisor. ForChains some companies unpredictable political turns – and, we hope, achieve Awards the best possible outcomes. that humansupply factor will never 24 Factory Materialsand tasks, however, 06 Mercury Sustainable chains. the year when the dedicated individuals, be replaceable. Handling 2010 Mercury Awards organisations and representatives of the FEATURES Spiral conveyor 32 solves Challenging status quo launched. Forklifts & Lifting 44the industry worked together to secure positive heat problems. Start-up Sendle has set out to disrupt the Australia 20 The perfect fit Humbled and Exalted Six new overhead cranes outcomes for the country’s freight task, both parcel delivery market without owning a delivery TheMercury pursuit of Award leaner manufacturingCart is putting dollies for simple – 2009 for Ferrocut. in the short and long term. vehicle. Its remarkable rise shows that the increasing pressure on Australia’s logistics handling tasks. winners. country’s SMEs were ready for change.reduces Airfreight system In this issue, we celebrate ingenuity, operators and, with delivery volumes not set to Double pallet dispenser. handling costs. reduce any time soon, the solution may not come collaboration and dedication. Our cover story, 35 At the forefront of change 14 Training in a one-size-fits-all box. Palletising robot. Making its debutHybrid forklift. ‘A common ground’, shares the wisdom in May 2018, MEGATRANS is a Bell’s Transport benefits gleaned at the annual forum of Logistics & unique trade platform bringing the national and from Skills for Growth 24 Thinking inside the box 32 Warehousing & Storage international49 supply chain industries, including Materials Handling’s association partner, the Handling Hazardous program. The Australian transport market has traditionally the wider infrastructure Goodsand transport sector, Australian Logistics Council. In a nutshell, we Record relied on trucking using rigid-bodied trailerspicking together in one large-scale setting. Proving profitable growth cutting need to be doing more now at to the protect future Gloves for handling dedicated to the road transport task.productivity. By utilising 16 Information hazardous substances. a skel and container combination, aAutomated more flexiblestorage. ed Proving profitable growth at the freight corridors, build infrastructure forcutrail 36 Logistics in action – Bolloré Logistics Technology Supply transport model is possible. Bolloré Logistics,Hand-held one of the top 10 transport and ting edProving growth at the and promote theprofitable value of combined data. eyewash. Chains Storage success. logistics companies in the world, recently found cutting edProving profitable growth at to We check out the most significant update Information driven. itself in need of a major CCTV system upgrade. 27 Family values the cuttingpackaging edProving profitable growth Australia’s industry in decades, One family business built from the ground up at edProvingOxford profitable talkthe to cutting Melbourne-based Cold Storage in Victoria is approaching its 50th year, and growth the cutting edProving profit- CEO about itsatAsian expansion and ask Sendle considering a business plan – and geographical – shift to coincide with the milestone. able growth at the his cutting edProving James Chin Moody feelings on competition, nullaorem velit augait, profitable growth at theacutting expectations and getting fair go. edProv03 From the Editor ing growth cutting We profitable are also very proudat to the reveal detailsedof volorpero dolortie 04 Industry News Proving profitable growth at thetrade cutting MEGATRANS, a new and unique show 08 Global News faccum dipsum zzriu edProving profitable at the sector. cutfor the wider Australiangrowth infrastructure 10 Australian Logistics Council ting edProving Happy reading. profitable growth at the cutting edProving profitable growth at John Murphy | Publisher the cutting edProving profitable growth at the cutting edProving profitable growth at the cutting edProving profitMurphy able growthPublisher: at the John cutting. MANAGING EDITOR (SOUTHERN): Sebastian Grote e sebastian.grote@primecreative.com.au
Contents
behindthecover
contents
Regular mercuryawards Run
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ASSISTANT EDITOR: Philippa Edwards e philippa.edwards@primecreative.com.au PRODUCTION CO-ORDINATOR: Michelle Weston e michelle.weston@primecreative.com.au MANAGING DIRECTOR: John Murphy ASSOCIATE PUBLISHER: Martin Sinclair e martin.sinclair@primecreative.com.au SALES MANAGER (SOUTHERN): Terry Wogan e terry.wogan@primecreative.com.au EDITORIAL CO-ORDINATOR: Ben Hagemann t 02 8484 0884 e ben.hagemann@primecreative.com.au PRIME CREATIVE MEDIA PRODUCTION ZibaVIC Mahabat 02 (03) 84849690 06258766 e ziba.mahabat@primecreative.com.au 11-15 BuckhurstCO-ORDINATOR: St, South Melbourne, 3205 tTel: Fax: (03) 9682 0044 ABN 80 132 719 861 ISSN 0004-976X www.primecreative.com.au KEY Tim Street, Richards 02 8484 0829 tim.richards@primecreative.com.au Suite ACCOUNT 3.03, Level MANAGER: 3, 1-9 Chandos St tLeonards, NSWe2065 Tel: (03) 9439 7227 PRIME CREATIVE MEDIA Media, 2017 © Copyright Prime Creative Tower 2, reserved. Level 3, 475 Avenue, Chatswood, 2067 Australia Locked Bag 4700, NSW 2067, Australia All rights NoVictoria part of the publication may beNSW reproduced or copied in any form or byChatswood any meansDelivery withoutCentre, the written permission of the Publisher. Tel: (02) 8484 0888 Fax: (02) 8484 0633 ABN 80 132 719 861 ISSN 0004-976X www.primecreative.com.au © Copyright Prime Creative Media, 2016 All rights reserved. No part of the publication may be reproduced or copied in any form or by any means without the written permission of the publisher.
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Industry News
Australia Post, Alibaba fight food fraud in supply chain Australia Post is participating in an initiative with e-Commerce company Alibaba and natural health company Blackmores to combat the rise of counterfeit food being sold across China, with management consultancy PwC acting in an advisory capacity.
(L-R) Bob Black, Executive General Manager – Parcels, AusPost, and CEO, StarTrack; Christine Holgate, CEO, Blackmores; Hon Steven Ciobo MP, Minister, Trade, Tourism and Investment; Maggie Zhou, Managing Director, Alibaba Group Australia and New Zealand; Luke Sayers, CEO, PwC Australia.
The initiative will target the traceability of food products, reducing the risk of fraud and ensuring Australia remains a trusted exporter of high quality food, said Bob Black, CEO, StarTrack, and Executive General Manager Parcels, Australia Post. The project would help guarantee genuine products arrive safely into the hands of Chinese consumers, he added. “We are delighted Alibaba has invited us to create an innovative platform, which will track food from paddock to plate, strengthening the supply chain,” Black said. “The initiative will leverage our secure, reliable and fast service to support the authentication of Australian products bound for the Chinese market. Our food producers have a global reputation as being a clean, green and safe provider of food and we are pleased to help deliver a solution to
enhance the integrity of their produce.” The project will explore new technologies, including blockchain technology, to obtain crucial details from suppliers about where and how their food was grown and map its journey along the supply chain. The technology also has the potential to enable up-to-date audits, increasing transparency between producers and consumers. “Food fraud is known to be one of the biggest issues facing the global food industry, considering the potential health risks associated with adulteration and loss of trust from consumers and governments,” Australia Post said in a statement. “In recent years counterfeiters have targeted popular Australian products such as health supplements, beer and wine, honey and cherries.”
Nord releases new vector drive line Specifically designed for intralogistics and baggage handling systems, the new LogiDrive standardised AC vector drives from Nord Drivesystems facilitate planning, configuration and spare-part management through a projectbased reduction of variant complexity. The drives meet the highest efficiency standards – IES2 system efficiency and IE4 or Super Premium Efficiency for the motor by itself – and reach excellent efficiencies even in the partial load range and at low speeds. They can therefore pay off their initial cost within a few years or even months, and total expenses over the product lifespan are significantly reduced. The systems allow for simple daisy-chaining – short power lines can be connected from one drive to the next. The user-friendly systems consist of a helical-bevel gearbox, an IE4 permanent magnet synchronous motor and a frequency inverter for installation near the motor – easy and quick to install thanks to pluggable connectors. Maintenance switches, key switches and direction switches on the device allow for flexible direct access to individual drive axes for set-up or service. Built into a light alloy case, the compact drives are also easy to handle. Boasting a large overload capacity, the drives come in three sizes that match the typical performance requirements in intralogistics and airport applications. 4 | Logistics&MaterialsHandling June/July 2017
Conveyor speeds and running directions are regulated by the LogiDrives’ frequency inverters, and the VFDs are available with an incremental encoder for highly dynamic applications. The STO and SS1 safety functions according to EN 61800-5-2 are included by default. Drive-related sensors can be connected via M12 plugs. Sensor data collected by the inverters can be passed on to higher-level systems, which reduces otherwise necessary wiring. LogiDrive installations can be deployed around the world thanks to comprehensive certifications.
Nord technology for airport installations.
Interfaces for all common bus systems are readily available. “Nord already has successful baggage handling systems installed in various airports across the world,” said Martin Broglia, Managing Director – Nord Drivesystems Australia. “The high reliability, efficiency and durability of our units is a big drawcard for customers. “Currently we are working on a local airport installation using various of the technologies which we have implemented in global airport projects, offering the local market our tried-andtested expertise.”
Industry News
Australian rail industry supports global marking standard The Board of the Australasian Railway Association (ARA) recently confirmed its support for the adoption of GS1 open global standards for identifying and marking (barcoding and/or tagging) components used across the Australian rail industry. The decision by the ARA Board was driven by the industry-wide Parts and Components Identification Project in rail that commenced in 2015, followed by the launch of the new Implementation Guideline for the Effective Management of Inventory in the Australian Rail Industry at AusRAIL 2016. The Australian rail industry is now being called to respond to a call to action to standardise the way materials are identified. Danny Broad, CEO, ARA, said the announcement by the ARA Board to support the adoption of common standards is a significant milestone for Australia’s rail industry. “We invite the Australian rail industry to join us in embracing a call to action to reduce costs, improve safety, reliability and quality using GS1 standards. The adoption of GS1 standards will provide a common framework to support the current challenge of managing efficient Maintenance Repair and Overhaul (MRO) processes,” Broad said. The objective of the call to action initiative is to implement GS1 standards across the Australian rail industry by 1 January 2019. This initiative is important from the perspective of quality assurance traceability and cost savings, the ARA and GS1 said in a joint statement, adding that the implementation of GS1 standards across the Australian rail industry is a critical foundation for the subsequent phase
of full-lifecycle tracking of components from acquisition to disposal – essential for the effective implementation of SO55000 Asset Management Standards. Maria Palazzolo, Executive Director and CEO, GS1 Australia, said, “A level of effort will be required for the implementation of these standards as many rail operators, suppliers, manufacturers and contractors are at various stages of barcoding their products,
with some rail organisations already well advanced and actively working with their suppliers.” Bonnie Ryan, Senior Manager – Trade, Transport and Heavy Industry, GS1 Australia, added, “Calling on industry players to work with us gives the Australian rail industry a unique opportunity to collaborate with a standardised approach for consistently identifying and marking components and assets.”
Danny Broad, CEO, Australiasian Railway Association.
New CEO Ports Australia Ports Australia has appointed the Hon. Michael Gallacher as Chief Executive Officer of Ports Australia. “Gallacher’s long standing interest and understanding of ports and shipping related issues, together with his widely acknowledged advocacy and policy development skills were instrumental in his successful application,” Ports Australia said in a statement. “His relationship with our industry
developed with his appointment as Shadow Minister for Ports following the 2003 NSW state election, and from that time he has been the strongest advocate for the future growth and advancement of our industry. “Through his career, Michael has progressed into other areas of political responsibility, such as Industrial Relations, Police and Emergency Services and yet he has always maintained an interest and a preparedness to
understand the challenges and opportunities affecting ports across the nation.” Vincent Tremaine, Chairman, Ports Australia said “There is no doubt that Michael will build on the outstanding leadership and direction set by our former CEO, David Anderson, to drive the public profile of Ports Australia and to strongly advocate on the issues affecting the efficiency and development of our nation’s shipping gateways. logisticsmagazine.com.au | 5
Industry News
‘Kookaburra’ discovery may boost logistics productivity Flinders University researchers believe they have cracked a long-running quest for an optimal solution to the classic algorithm question in computer science known as the Travelling Salesman Problem (TSP). The TSP focuses on finding the cheapest and most efficient way for a travelling salesman to visit all of his or her cities and return to a starting point. It can be summarised as: given a graph containing N vertices, determine whether it contains a simple cycle of length N. An optimal answer could lead to lucrative productivity gains in a range of industries and complex tasks, from logistics and transport to more cost-efficient manufacturing, gene sequencing and even drone mission planning. The solution was achieved by the Flinders Mathematical Sciences Laboratory Hamiltonian Cycle Project over the past three years and has already broken more than 20 records, solving open TSP problems listed on the international register maintained by the University of Waterloo in Canada. It is shaping up to be a powerful new tool in the development of better software systems for a range of industries, said Associate Professor Vladimir Ejov, Director of the Flinders Mathematical Sciences Laboratory.
“In a resource-restrained world, optimal solutions are increasingly necessary in evermore-complex processes,” said Ejov. “We hope this TSP solver could become a world leader
in the highly competitive market of solving difficult logistics and many other industrial problems by the virtue of its highest quality outcome.”
(L-R) Alex Newcombe, PhD student; Vladimir Ejov, Director, Flinders Mathematical Sciences Laboratory; Pouya Baniasadi, PhD student and Serguei Rossomakhine, software engineer, with visualised models of the TSP instances untangled by the Kookaburra TSP system. .
Maersk looking at on-land logistics in Australia Shipping line Maersk is reportedly looking at opportunities to expand into on-land logistics operations as freight rates are dropping. “We’ve got a vision to be the global integrator of container logistics,” Gerard Morrison, Managing Director – Oceania at Maersk told The Australian Financial Review. “Shipping and logistics can be quite fragmented – multiple parties, multiple documents, multiple invoices – but we’re hoping to find ways to simplify that,” he added. “At the moment, shipping is ‘shipping from port to port’ and the thought is, how can we help our customers deal with other parts of the supply chain?” 6 | Logistics&MaterialsHandling June/July 2017
Morrison noted that in order to offer services such as container storage, customs clearance and trucking to the logistics sector in Australia, the liner may need to acquire other businesses – though there are no such plans in place at present. “If the right opportunity was there, we wouldn’t look away from it,” he said. Morrison reported that shipping volumes are improving worldwide, driven in part by the economies of Europe and Latin America. “Australia and New Zealand are doing very well, there’s very steady growth out of both markets,” he said. “Customers are asking us to carry more and more cargo.”
Industry News
Federal Government invests $55 million in smart transport R&D centre The Federal Government is supporting a new intelligent transport cooperative research centre – the iMOVE CRC – with a $55 million R&D grant. The iMOVE CRC, a new national intelligent transport R&D centre funded through the Cooperative Research Centres Programme, has been in development for over 18 months. It is supported by 46 industry, government and research partners including the federal departments of Industry Innovations and Science and Infrastructure and Regional Development, state road authorities, retailers, logistics and insurance companies, technology developers, automobile clubs and several Australian universities. “Transport is the backbone of our economy, as a country we will fall behind if we cannot move our people and goods effectively and efficiently,” said iMOVE CRC Bid Lead, Ian Christensen. “Our roads are congested and our transport
systems are not coordinated and it’s getting worse in many cases. The establishment of the iMOVE CRC gives us an immediate opportunity to tackle this situation by harnessing the power of ‘big data’, developing smarter solutions and engaging with the community to trial and deploy new technologies.” iMOVE CRC Bid Chair, Ian Murray AM, said “As a country, we lose around $16.5 billion a year because of congestion. When you also factor in the human and financial losses due to accidents, we are looking at a phenomenal social and economic cost. We will now have the technology and smarts available to significantly alleviate these problems. “The iMOVE CRC has a research program and experienced people ready to start work immediately. I am tremendously excited by the opportunities we have in front of us with this funding.” The iMOVE CRC will play a role alongside
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other national bodies in assisting states, territories and peak industry bodies to collaborate and deliver cohesive national outcomes. “The current explosion of data, the computing power of mobile phones, and the increasing automation of vehicles creates a vast range of opportunities to improve the range, safety, convenience and effectiveness of peoples’ travel options,” said Christensen. “Mobility and transport is one of the most exciting and dynamic aspects of urban and economic development. With its broad range of partners the iMOVE CRC will enable Australian organisations to develop world leading products and services. “As well as with our partners we will be working in consultation with numerous other stakeholders, such as the Australian Logistics Council (ALC) and the National Transport Commission (NTC). This will enable us to get the best possible outcomes for Australia.”
NORD Drivesystems (AU) Pty Ltd 18 Stoney Way, Derrimut , Victoria 3030 Australia Phone: +61 3 9394 0500 Fax: +61 3 9394 1525 www.nord.com.au National Customer Service 1300 00 NORD (6673) au-sales@nord.com Member of the NORD DRIVESYSTEMS Group
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Global News
UPS investing in natural gas fleet, infrastructure US-based United Postal Service (UPS) will invest more than US$90 million ($117 million) in building an additional six compressed natural gas (CNG) fuelling stations and add 390 new CNG prime movers and terminal trucks and 50 liquefied natural gas (LNG) vehicles to its alternative fuel fleet. “With more than 4,400 natural gas vehicles and a network of fuelling stations, UPS has had great results using natural gas as an alternative fuel in our fleet,” said Mark Wallace, Senior Vice President Global Engineering and Sustainability, UPS. “We know the importance of investing in natural gas globally for our fleet and the alternative
fuel market. In 2016, we used more than 61 million gallons of natural gas in our ground fleet, which included 4.6 million gallons of renewable natural gas. This helped us to avoid the use of conventional gas and diesel, and decreased CO2 emissions by 100,000 metric tons.” The six new CNG stations will be built in Ontario, California; Orlando, Florida; Salina, Kansas; Louisville, Kentucky and Greensboro, North Carolina in the US, and Vancouver in British Columbia, Canada. Renewable natural gas (RNG) will be used at the station in Ontario to fuel UPS vehicles in the area with renewable compressed natural gas (RCNG).
The company has driven more than one billion miles since 2000 with its alternative fuel and advanced technology fleet.
Heathrow to get super efficient air cargo centre Siemens Postal, Parcel & Airport Logistics (SPPAL) has been commissioned to install an air cargo centre at the international London Heathrow Airport. International Airlines Group (IAG) issued the contract for its subsidiary, IAG Cargo. Siemens is equipping a complete new cargo terminal, allowing the cargo operator to benefit from a substantial expansion of the existing air cargo capacities and optimisation of complex cargo processes.
To this end, Siemens will implement an intelligent system layout and innovative material handling system. “With our many years of experience and our in-depth knowledge of air cargo logistics, we will be able to help IAG strengthen their competitive position,” said Michael Reichle, CEO, SPPAL. Sarah Coulson, Head of Strategy and Business Development at IAG Cargo, added, “We are proud to have held our ground for years as a
major player in the highly contested air cargo business. Premium solutions such as the ability to process air cargo at short notice will help us to successfully keep ahead of the competition.” Siemens will install a system consisting of elevating transfer vehicles, transfer vehicles, truck docks for loading and unloading and conveyor lines or the rapid break and build of cargo. The company will also deliver special cold storage zones for IAG Cargo’s temperaturecontrolled products.
DHL commits to zero emissions 2050 target Deutsche Post DHL Group (DHL) has set itself a target of net zero logistics-related emissions by 2050, both through the company’s own activities and those of its transport subcontractors. DHL also wants to become the market leader in green logistics and plans to expand its portfolio of green products and services to help customers achieve their own climate protection targets. “The decisions we make today will determine how our children live 30 years down the line,” said Frank Appel, CEO, Deutsche Post DHL Group. 8 | Logistics&MaterialsHandling June/July 2017
The company’s zero emissions logistics mission is supported by four interim milestones to be achieved by the year 2025 as part of the Group’s environmental protection program, ‘GoGreen’. First, DHL Group will increase the carbon efficiency of its own activities and those of its transport subcontractors by 50 per cent globally, compared to the 2007 baseline. Second, the Group will operate 70 per cent of its own first- and last-mile services with clean pick-up and delivery solutions using, for example, bicycles and electric vehicles.
Third, the company is aiming to make customers’ supply chains greener by having 50 per cent of sales incorporate ‘green’ solutions. Fourth, the Group will train and certify 80 per cent of its employees as GoGreen specialists by 2025. It will also actively involve them in its environmental and climate protection activities. DHL’s previous climate target – to improve carbon efficiency by 30 per cent over the 2007 baseline – was achieved in 2016, four years ahead of schedule, thanks to a diverse range of measures to optimise the Group’s vehicle fleet, buildings and logistics networks.
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ALC Column
Michael Kilgariff Managing Director Australian Logistics Council
W
ith the Federal Government having announced the composition of the expert panel that will advise on the development of the National Freight and Supply Chain Strategy, the real work of shaping its content is now well and truly under way. It’s not indulging in hyperbole to say that we have a once-in-a-generation opportunity to get this right. Australia’s rapidly growing population coupled with changing patterns of consumer behaviour – especially with the growth of e-Commerce – will impose significant additional demands on the freight and logistics sector. Indeed, the National Transport Commission (NTC) estimates that Australia’s freight task will grow by some 26 per cent in the next decade alone. When you think of the capacity constraints that are already evident in some of our major cities, particularly growing traffic congestion, such forecasts can appear daunting. Although it will require a significant degree of hard work on the part of the freight and logistics industry, I am nonetheless confident that we can come up with solutions that will allow us to meet this burgeoning demand. We know that industry is willing to play an active role, and we know that the Federal Government’s agreement to develop a National Freight and Supply Chain Strategy shows decision-makers are willing to listen to industry’s advice. Thus, our immediate challenge is to make certain the advice we provide is the right advice, which will help ensure the Strategy that emerges is the right one for our industry and the right one 10 | Logistics&MaterialsHandling June/July 2017
HIGHLIGHTING THE INDUSTRY’S VIEW for the Australian economy. I think there has been an encouraging start on this front. At the beginning of March, the ALC held its annual Forum in Melbourne, and the entire focus of the event was discussing the content of the National Freight and Supply Chain Strategy. Of course, we are not starting with a blank piece of paper. Many of the attendees at the Forum are leading figures within Australia’s freight and logistics industry, and throughout their many years of collective experience they have garnered insights and evidence that will prove invaluable in terms of getting policy settings right. Although ALC Forum 2017 was the first industry-wide gathering since the Prime Minister’s announcement last November that the Government would develop the Strategy, the discussions revealed there is already a remarkable degree of consensus across the industry about what is required to make it effective. This is a strong basis from which to work. To help synthesise the industry’s conversations to date, the ALC has produced a Working Paper that summarises the views of industry to date about the contents of the Strategy. Some of the major themes addressed in that publication are as follows:
Urban encroachment issues In the lead up to the 2016 Federal Election, the ALC prepared a document called Getting The Supply Chain Right, which highlighted the freight and logistics industry’s most pressing
priorities for an incoming government. One of those was urban encroachment, and the lack of buffer zones, land separation setbacks and design mitigation measures around sensitive use developments, which can significantly hamper the efficient operation of freight-related infrastructure. At the time, the ALC noted that the national freight supply chain will be unable to support Australia’s growing demand if facilities and infrastructure continue to be prevented from realising their optimal capacity, due to restrictions imposed on their use or operating conditions. This includes things like night curfews for airfreight and port facilities, restrictive speed limits and the banning of heavy vehicles from key routes that provide access to freight facilities. These things are often pursued by governments in search of an electoral boost. However, their long-term impact is to simply build inefficiencies into the supply chain, which ultimately results in higher consumer prices. As industry ‘insiders’, we understand that there is a symbiotic relationship between good outcomes for freight efficiency and good outcomes for the community. The problem lies in the fact that this is vastly underappreciated by the public at large, and even at times by decision-makers within government. This is how we end up with poor planning outcomes, such as the failure to preserve freight corridors, and insufficient consideration of freight operations when pursuing ‘urban infill’ objectives surrounding new residential developments.
ALC Column
The freight and logistics industry needs to better ‘sell’ the fact that corridor preservation equates to improved safety, liveability and efficiency outcomes.
Technology issues There was a broad consensus among participants at the Forum that not enough is being done to make use of data, both in terms of improving safety and efficiency across the supply chain, and also when it comes to effectively planning the nation’s freight infrastructure. Of course, the top priority must be safety in the supply chain. Regrettably, Australia’s approach to safety in the trucking industry is lagging significantly behind that of other comparable nations. In particular, several participants at the Forum noted that Australia’s trucking industry is making insufficient use of telematics when it comes to making business decisions. The ALC will continue to pursue a national telematics law, permitting the use of data about vehicle performance, equipment and driver behaviour that can be used to enhance road safety, improve efficiency within the logistics industry and identify problems with driver behaviour. Technology also offers a potential way to overcome the impact of ever-more restrictive planning and vehicular access policies when it comes to CBD freight delivery. One detailed presentation discussed using urban consolidation/distribution stations. These can provide for multi-modal routing systems using bicycles, walkers and electronic vans to facilitate freight delivery. It is far more efficient than using large vehicles to deliver small loads – especially given that an increasing number of large-scale residential developments do not incorporate delivery zones or provide access facilities for freight vehicles.
Rail issues There is very strong support within the industry for construction of the Inland Rail, at last providing a port-to-port rail link from Melbourne to Brisbane. This project has had a long gestation, but with the increasing demand for freight resulting from free trade agreements and the growth of e-Commerce, encouraging more freight onto rail is vital. Constructing the Inland Rail will help to cut freight transport times, reduce road congestion and promote cheaper consumer prices. There are also considerable economic benefits for
regional communities along the route. However, there are also opportunities elsewhere in the sector to make greater use of short-haul rail. This includes pursing projects like the duplication of the rail line at Port Botany, which will help achieve NSW Ports’ target of moving three million Twenty-foot Equivalent Units (TEU) by rail by the year 2045. Pursuing a rail connection between the Port of Melbourne and three of Victoria’s inland ports will also be important in promoting supply greater supply chain efficiency and addressing road congestion. This issue is especially important in the context of Asia’s rapidly expanding middle class, whose appetite for the type of highquality agricultural goods Australia produces will be a source of growing demand on our freight and export infrastructure. We must be mindful not to cede our competitive edge in this area by failing to have a supply chain that operates safely and efficiently from paddock to port.
The construction of Inland Rail must continue to be treated as a priority, ensuring rail as a modality has a clear place in moving freight in the Australian supply chain. Great Commonwealth leadership needs to promote supply chain safety and efficiency – this includes helping the public at large understand the importance of supply chain efficiency, as well as incentivising state jurisdictions to consider freight needs in their planning instruments by making Commonwealth funding support subject to conditions such as having corridor preservation strategies in place. Finally, the establishment of a specific Federal Department of Planning and Infrastructure will allow the Commonwealth’s expertise in these areas (including the development of funding mechanisms) to be concentrated and properly able to be used as resource, by industry and by other jurisdictions.
The next steps The ALC believes that a dynamic Strategy requires a dynamic consultation process to guide its development, and accordingly the ALC will be continuing to engage closely with industry over the coming weeks and months to make sure we get the right outcomes. However, from the conversation thus far, it’s already apparent that there are some clear expectations from industry. Existing freight infrastructure needs to be made to operate efficiently, through making sure planning instruments not only identify and preserve the industrial lands to provide the jobs and logistics facilities of the future, but also ensure new residential developments do not encroach on infrastructure and prevent its effective utilisation. It will also be necessary to establish some form of mandatory system of data collection that will allow better decision making and improved outcomes in safety, planning and investment decisions, all of which will help boost productivity. We will need to move towards hypothecation of levies, fees, taxes and charges raised for the purpose of developing an identified piece of infrastructure – so that money raised is invested properly and not put back into consolidated revenue. logisticsmagazine.com.au | 11
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A common ground As Australia and much of the western world face one of the least predictable periods in recent history, with volatile voting exposing extreme divides, the time is nigh for a collective and concerted effort by industries to work together to achieve the best possible outcomes, for now and for the future. Story by Philippa Edwards
The Hon. Luke Donnellan MP, Minister for Roads and Road Safety. 12 | Logistics&MaterialsHandling June/July 2017
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shift is occurring in global business. Due to the emergence of ever-more sophisticated technology, the fading importance of geographical borders and volatile voting patterns, governments are needing to rewrite the rule books, and fast. With Australia’s Federal Government looking to the industry for guidance on what the path forward should look like, Australia’s logistics industry needs to get on the same page. A particular challenge facing Australia’s logistics industry is the rapid growth of the country’s freight task – the domestic land freight task alone is projected to grow by 80 per cent between 2011 and 2031. The mammoth task to prepare for what lies ahead is strained further by the realities of four-year electoral tenures, and a volatile electorate. Globally, voting patterns have revealed discontent with the establishment, and political priorities in the coming years will have to reflect and address this disconnect. The Australian Logistics Council (ALC) used its 2017 Forum as an opportunity to gather industry together and foster consensus on essential considerations for the improvement of the freight network and future planning in Australia, to
inform the National Freight and Supply Chain Strategy, a document to be produced by the Federal Government, while communicating the sense of urgency the industry will need in order to prevail. “There is more technological change going on now than ever before,” said Ian Murray AM, ALC Chairman. “We need to address that and we need a strategy. Right now there are strong financial opportunities – changes to Super obligations, recycling of assets, the world’s lowest interest rates, trade potential due to free trade agreements made with Korea, Japan and China – we need a freight and supply chain strategy to maximise those opportunities. It needs to be done more efficiently at this end, and we need government commitment.” The event, Murray added, would help the ALC to draft recommendations to be presented to the Government in November 2017. Failure to properly prepare for the obstacles heading for rail, port and road transport operators in a timely and effective manner has been estimated to cost Australia $5.3 billion by 2031, as shared by Infrastructure Australia CEO, Philip Davies.
“When planning, it’s important to remember that the way it is today is not necessarily the way it will be tomorrow.” David Jochinke, President of the Victorian Farmers’ Federation.
Political pressure Many speakers reported that the global political climate – and its possible implications upon the local political environment – is a potential impediment to policy progress. “The world is polarising,” said Brian Tyson, Managing Partner at communications advisory firm Newgate Australia. “The disaffected electorate is volatile, and this makes governing very difficult – the logistics industry in particular is very dependent on stable economic policy. “There is a ‘haves’ versus ‘have nots’ split, and the have nots are rising up and increasingly realising they have a voice. This means that there is no longer a rested-upon support base for either of the parties.” In Melbourne, he explained, this would result in funding shifting from urban to rural areas in order to gain political ground, and a focus on infrastructure projects that result in job creation. The Hon. Luke Donnellan MP, Minister for Roads and Road Safety and Minister for Ports, added, “Political impediment of freight and logistics in the public policy sector is a challenge – it delivers prosperity but not votes, and public support is lukewarm at best. “In an ideal world, resources would be allocated to your industry in direct proportion to the prosperity you deliver – but we don’t live in an ideal world, we must balance the interest of industry with those of the general community. “Additionally, our four-year election cycle inhibits long-term infrastructure planning. In the last election, the infrastructure became highly politicised – it should not be political and it should not be sprung mid term.” The Hon. Darren Chester MP, Minister for Infrastructure and Transport, added, “Given our short electoral cycles, and the vagaries of our political system, the real challenge in this term is to make sure that the Inland Rail project becomes inevitable – that we build momentum to such a point where not future government is in a position to undo that decision.”
Policy reform
[L-R] Paul Graham, Chief Supply Chain Officer, Woolworths; David Jochinke, President, Victorian Farmers’ Association; Fiona Simson, President, National Farmers’ Association.
The Department of Transport’s recently appointed Director General, Richard Sellers, shared that half of the battle with getting the go-ahead for road projects for freight is getting the public to see that they themselves will benefit. “If people know that the price of a daily good will go up as a result of restricting truck movements, they may have more empathy when it logisticsmagazine.com.au | 13
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Michael Kilgariff, CEO of the Australian Logistics Council (ALC) sat down with Logistics & Materials Handling to discuss the ALC’s role in Australia’s logistics space, the harm of fragmentation and holistic logistics. Q. When and why was the ALC created? A. The ALC was established in 2002 by thenDeputy Prime Minister John Anderson to draw together the disparate groups that make up the freight and logistics industry and create an umbrella organisation that could be a ministerial advisory body and the authoritative ‘voice’ for the industry. Prior to that time, the lack of coordination among various representative and interest groups made it difficult to achieve consensus on issues, and it hampered the industry’s ability to deal with decision makers in state and Federal Government, as political representatives were uncertain where they should be looking for advice. After ceasing to receive government funding in 2007, the ALC moved its office to Canberra, established a full-time secretariat and underwent a substantial strategic repositioning to focus it as the representative body of the major and national companies in Australia’s logistics industry. In the words of Theodore Roosevelt, our role on behalf on industry is to ‘speak softly and carry a big stick’. Q. What do you hope the logistics industry will look like in the future, and how do we get there? A. There is still a good deal of fragmentation in the industry, and I think that everyone would benefit in varying ways if that could be reduced. There is now effective cooperation, and it is comes to bringing in infrastructure and planning cities,” he said. “We need to socialise it so people understand that having the trucks come through means price efficiency.” Mike Mrdak AO, Secretary of the Department of Infrastructure and Regional Development, added that the country can’t afford to fail to plan for long-term freight transport needs as it has in the past. “We need to make sure whatever we’re doing, we’re not getting in the way of emerging efficiencies,” he said. “Land acquisition now makes up a larger part of the cost of construction due to a lack of planning in the past – our future 14 | Logistics&MaterialsHandling June/July 2017
vastly improved from the way it used to be, but there is always room for improvement. I believe we will achieve that cooperation by focusing on the issues that unite the whole of industry – in particular, the need to improve efficiency and safety in the supply chain, and also the need to attract talented individuals to pursue careers in this sector. I also think that the freight and logistics industry is vastly underappreciated by other industries, and by the public at large. We need to do more to highlight our contribution, especially to the general public. If we can do this, it makes it easier to build support for the things our industry needs – including a greater voice in planning issues and funding support for freight transport infrastructure. Q. What is the best example so far of the industry achieving something important through collaboration? A. The Federal Government’s agreement last November to develop a National Freight and Supply Chain Strategy represents a critical opportunity to put the interests of the freight and logistics industry at the heart of policymaking. It’s our best chance to overcome fragmentation and get decision makers and the public thinking about our industry in a holistic way. Someone living in an apartment in a large city doesn’t notice our industry on a day-to-day basis, yet they notice when a package they order online takes two weeks to show up, because of road congestion, port bottlenecks or lack of adequate delivery facilities. In an industry that does not resonate with the public, whom politicians see as their voters, it is hard for its voice to be heard in political circles – as the saying goes, ‘freight doesn’t vote’. generations are going to pay a huge price if we don’t protect those corridors now.” He added that air regulation is an area that is experiencing unprecedented change, due to the proliferation of affordable drone technology. “Drone transport is low cost, though high risk, and air regulations are having to change quickly,” he said. “Airports were built on bubbles, in the past all people using them needed to have a licence.” Now, regulatory bodies struggle to keep up, let alone get ahead of the curve. These changes will be felt across the logistics spectrum, he said, with more sophisticated
Without government action there is a limit to what industry can do on its own to deliver the efficient, safe and effective supply chains that the nation needs. Developing the Strategy is the best way to demonstrate where the shortcomings are in our supply chain and how proper investment in remedying the situation will ultimately mean more jobs, stronger economic growth and better deals for consumers. Q. What challenges has the ALC faced in bringing the industry together? A. Heading an industry organisation is a difficult task because many members are usually fierce competitors in the commercial world. Often, they are cautious about cooperating or sharing information to improve industry efficiency, while other members are in client-customer relationships, invoking similar caution. That’s never going to change. The key is to focus on areas where improvement can be achieved without individual organisations having to share proprietary information. Generally speaking, our industry is one that prefers industry led and managed responses to issues, rather than government regulation. Opportunities to reduce red tape and increase the industry’s influence are often powerful incentives to put aside short-term disagreements and issues in pursuit of greater certainty over the longer term. In an industry association representing a vital economic sector with competing interests, it is difficult to satisfy all the members all the time, but it is imperative to have an identifiable position on the critical industry issues, even if some stakeholders might find it uncomfortable. A friend to all is a representative of none. logistics processes springing up across the board aimed at providing more direct delivery, at a competitive price. Policy reform is a crucial underpin to get markets working efficiently, shared Rod Sims, Chairman at the Australian Competition and Consumer Commission (ACCC). Instead of talking about congestion pricing, he said that an immediate benefit would be felt if road fee coffers were redirected back to paying for roads, rather than schools and hospitals, and the time is now. “The Treasury is on our side for the first time in years,” he said. “The shipping rules we
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have in place protect nothing – they’re there to protect bulk, not us. The supply chain must be more involved in the debate as they are the ones that end up paying. “Unless we have a united approach – if it’s about money – it’s going to fail. Industry needs to think through what roles they want the regulator to play. “For the issues now, the sector needs to start answering,” he said. Maurice James, Managing Director at Qube, stressed that the strategy is bigger than any one individual company. “Plans and infrastructure – it’s the next stage,” he sad. “Companies can keep the Government honest and make sure they’re following through on promises and plans – there’s no plan beyond this plan.”
Getting to market “It’s all very well extolling the virtues of free trade agreements, but getting those products to market is the next big challenge,” said Chester. Australia grew on the back of export of agricultural goods, and the sector now contributes up to 12 per cent of the country’s total gross domestic product (GDP), though the prosperity achieved through the export business does not seem to have been reinvested in its infrastructure. “The freight issue and economic policy are intertwined in Australia,” said Hamish McCormick, First Assistant Secretary, Office of Trade Negotiations, Department of Foreign Affairs and Trade. “In Australia, close to 60 per cent of production is destined for foreign markets. “More efficient trade means more exports, which means more jobs and more growth – that’s why the Australian Government is pursuing this.” David Jochinke, President of the Victorian Farmers’ Federation and Fiona Simson, President of the National Farmers’ Federation (NFF), each shared that much needs to be changed if Australia’s farmers are to manage the imminent surge in the freight task, indeed changes are urgently needed now to better cope with current levels. “The speed [for road transport] and heat [for rail transport] restrictions are unacceptable,” said Jochinke. Efficiency means the difference between a profitable or non-profitable enterprise, he added, pointing to the unsustainability of Victoria’s 18 regional councils, and how road investment suffers as a result. “What do we want the country and its roads to look like?” he said. “What are we doing it
for in the first place? Australian customers – but also those abroad. “We don’t need to be using the same pathways as in the past, or going after the same consumers or markets to grow the nation for everybody. When planning, it’s important to remember that the way it is today is not necessarily the way it will be tomorrow.” Simson too highlighted the impact of subpar freight routes on the nation’s farmers, sharing that freight is one of the most expensive factors in agriculture, accounting for up to 48.5 per cent of costs. “A lack of efficiencies adds to that number, both in road and rail,” she said. “We need a strategy from paddock to port.” Communication and authority also need particular attention, she added, since produce travels to ports on federal, state and local roads, and the NFF has had issues addressing all three tiers. “We hope the national freight and supply chain strategy is able not only to address road and rail, but also to look deeper at last-mile issues,” she said. “If we can plan for agriculture freight, make it sexy and get buy-in from politicians [that would help]. The thinking is, if a project is in a rural area only rural people will benefit, but everybody wins – consumers, retailers, rural communities and farmers.”
22nd-century rail Rail and, in particular, the Inland Rail project were high on the agenda at the Forum. Several speakers concurred that the mode has been long overlooked and now is the time to make rail relevant and viable again. “The freight task is increasing and we need to
prepare for that increase in volume,” said Andrew Adam, National General Manager – Intermodal at Pacific National. “If we leave it as it is, there will be a time in the next 10 years when intermodal freight will fall off trains and all go on trucks. “Road freight can’t double stack, it has length restrictions and is limited by the number of drivers that must be used. Trucks emit four times as much emissions as trains, that’s not an insignificant saving for the emissions outcome. “But, trucks got longer and better – why not rail? Nothing is stopping us from building double-stacked, automated 3.6km trains – we could lead the world, though it’s important that as we go up to the federal level we remain united in the scope.” Paul Scurrah, Managing Director and CEO of DP World Australia, agreed: “Rail gets drowned out, it needs government support. Hitting targets is not enough, it needs a bigger share – but the truck industry is louder. We need to be thinking beyond the next step.” Michelle Reynolds, CEO of Toowoomba’s freight precinct InterlinkSQ that sits along the path of Inland Rail, noted that the establishment of the estate has driven modal choice in Queensland – where rail freight had become all but non-existent, except for coal. The idea for the precinct was conceived 20 years ago, and land set aside for the project at that time. “We’re trying to get freight back on rail in Queensland,” she said, adding that the alternative is continued road accidents in the region, worsening port access and further environmental damage.” Catherine Baxter, Vice President Operations SE QLD, NSW, VIC, SA and Intermodal at Aurizon
The Hon. Darren Chester MP, Minister for Infrastructure and Transport.
logisticsmagazine.com.au | 15
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Ian Murray AM, Chairman, Australian Logistics Council.
echoed the call for freight to be brought back to rail. “We must create modal indifference to grow rail, road and coastal freight,” she said. “We need to remove vested interests – the reason there are only three major [rail] operators is the barriers to entry are huge, you must jump through hoops and the process is hugely inefficient – all that does is create a vortex of inaction. “[For Inland Rail to be a success] we need a very good understanding of where the priorities are, along with bipartisan support and industry support – competition shouldn’t exist when containers are getting on and off the train.” David Irwin attended the conference as a speaker days after announcing his resignation as CEO of Pacific National and acknowledged that it can be challenging to use rail. “There are certainly opportunities for better utilisation of rail,” he said. “It is good to see the Government has provided funding – the challenge is there’s so much difference between the different states in terms of regulations – a national regulator will help. “Harmonisation of standards is something we need to focus on.” Irwin shared that Australia’s rail network as it stands is in need of attention to bring it up to standard, with safety and capacity improvements key considerations. “Detection so drivers can’t go through a red light is needed yesterday,” he said. “Short-haul trains cant deal with corners, there’s 16 | Logistics&MaterialsHandling June/July 2017
no ability to double-stack, width and height are both heavily constrained – to get to one solid standard and improve it over time would be a huge step forward for rail freight.” Looking to the future, several speakers lamented the fact that progress in the rail space has been markedly slower than for other transport modes. “Take automation, for example,” said Aurizon’s Baxter.“We’re spectacularly unsuccessful in making change in this space. “We need to jump from 18th-century technology to 22nd-century technology – if we can fix it so no trains can run into each other, then the ability to start optimising really comes to life. Procedural controls in place for safety are stifling innovation. Technology can – in a really simple way – make a fundamental change.”
The more you know While the importance of collecting data is beginning to be understood, companies, industry and government are still failing to truly realise the benefits data analysis can bring, and why a sharing economy of data – rather than proprietary research – will be necessary, speakers shared. Michael Byrne, Managing Director of Toll Group, noted that companies could see immediate improvements simply by fully utilising the technology already available to ensure safe, efficient driving practices. “We
complain as an industry that there’s no margin – why aren’t we using telematics to weed out bad driver behaviour?” he said. “Put telematics in everything – engine, driver, safety, efficiency, drive quality, tyre wear, g-force.” Paul Graham, Chief Supply Chain Officer at Woolworths, shared that Australia has a particular need for detailed information. “Australia has a unique challenge with its scale,” he said. “We need technology to give us real-time information from paddock to plate, including knowledge about quality and any processes undertaken. “Data is a huge enabler for us making better decisions. We have a lot of data, now we need to give it to the relevant stakeholders. We need to use data to show quality and touch points, and to use it in a more cohesive manner.” Gary Dolman, Head of the Bureau of Infrastructure, Transport and Regional Economics (BITRE) Department of Infrastructure and Regional Development, said that in terms of transport modes, trucking freight information is remarkably scarce, while the Government has access to airline, maritime and rail data going back to the 1920s. “In trucking freight, there are a large number of operators,” Dolman said. “Data is starting to track information on last-mile issues, in terms of routes used, congestion, and whether truck stops are in the right place. Now we’re understanding movements better.” Automatically collected driving data can now do away with the need for survey-based research, with companies wishing to take part simply having to allow access to their telematics records. A data study recently carried out by the Department looked at data for a one-month period, with ten participating companies, though Dolman noted that he hopes to expand the participation in future. The study found that on Western Ring Road in Melbourne, the average speed for trucks in a recent data survey was found to be 59km/h, with off-peak speeds of 94km/h and peak-hour speeds of 19km/h. “We need ongoing collections with 20 or 30 operators, telematics data too if operators give permission,” he said. “Then it will be a lowercost exercise. It would be good if this could be industry-led like in the US, though it needs government participation too.” “Most people recognise that more information means a more efficient process,” said Cameron Webb, General Manager – Supply Chain Solutions at Woolworths. “We need to be able
to understand and plan, and customers want to know about condition of transport.” Webb added that an industry-wide standard for freight markings could benefit companies while allowing competition. “We can’t do it alone – a proprietary system is not cost effective,” he said. “Standards are possible while maintaining competition. It’s not a system, it’s a language, an agreement of a definition of what information to share.” Toll, OneSteel and Nestlé recently took part in a pilot project run in collaboration with GS1 using such a common language. The project found that using one labelling code which could provide different information to different parties along the supply chain, users were able to collect rich data sets. David McNeil, e-Commerce Manager at OneSteel, noted that in order for a common language to be used on labelling across the supply chain, compliance would likely have to be a requirement. “I don’t think it could be done without the implementation of a standard,” McNeil said. “Working to the GS1 standard means working to a global standard – it doesn’t only aid within borders, also with the global task.” He added that big names such as Google, Amazon and eBay have gone so far as requiring suppliers wishing to deal with them to adopt the GS1 standard. “Technology is nothing without data,” said Bonnie Ryan, Senior Manager – Trade, Transport & Heavy Industry, GS1 Australia. “It drives all of the processes we want to automate, but good quality data can’t be trusted unless it comes from the source – those creating it. You want to be able to trust the data flowing through your supply chain. “I’m glad to see we’ve now got visibility on the transport agenda,” Ryan added. “Great physical infrastructure won’t deliver visibility if something goes wrong – in that case it’s back to pen and paper.” Dr Jeff Potter, Project Director – Productivity and Safety at the National Transport Commission (NTC) said that it would take a concerted effort to achieve the full benefits of big data analysis, the first challenge being acquisition, then analysis and, finally, implementation of informed strategy. “Ninety per cent of all the data [we’re currently working from] has been collected in the last two years, while looking for something else,” he said. “We’re currently working on the development of a productivity framework for all land transport, but it’s not something only one organisation can carry out in isolation.” The Infrastructure and Regional Development’s Mrdak echoed the sentiment, stating that a united voice and effort would serve Australia’s industry far better than going it alone. “Fragmentation is our enemy, not just competition – fragmentation of our approaches,” he said, adding that local government, local industry and associations need to work together to achieve real results. Marcus James, General Manager – Road Safety and Productivity Branch at the Department of Infrastructure and Regional Development, summed up the path forward, noting that while government may have regulatory powers, industry will first have to stand up, state what rules, access and data they need and show that they’re willing to do what it takes to progress. “Government won’t do much unless industry takes the lead, then government can take the lead and facilitate the process,” James said.
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THE GLOBAL LOGISTICS REVOLUTION MAY 10-12 2018 MELBOURNE CONVENTION & EXHIBITION CENTRE
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The perfect fit The pursuit of lean manufacturing is putting increasing pressure on Australia’s logistics operators. With delivery volumes not set to reduce any time soon, the solution may not come in a one-size-fits-all box.
Daniel O’Sullivan, Sales Director, ABBE Corrugated, with Paul Camilleri, Senior Packaging Engineer, at the Box on Demand Australia Demo Centre in Coolaroo, Victoria.
T
he intralogistics and packaging environment is experiencing drastic change due to the growth of e-fulfilment following the offshoring of manufacturing. The industry faces the challenge of accommodating an unlimited range of box dimensions. Carton reduction has been on the agenda since the early 1990s. It has long been recognised that having excess space around goods being shipped does not make sense, in terms of wasted materials, the environmental impact of foam and plastic void fillers and the inferior protection offered by ill-fitting packaging. Until recently in Australia, boxes have been customisable in one dimension only. “It’s been 20 | Logistics&MaterialsHandling June/July 2017
possible to specify the height of boxes used for packaging, but until now the footprint has remained the same,” says Dick Heintz, Business Development Manager for Box on Demand. Box on Demand is an innovative packaging solution that has made its debut in Australia in March 2017, via exclusive distributor Abbe Corrugated Packaging, a privately owned, Victoria-based packaging manufacturer that has been in the industry for over 25 years. “Lean packaging is as important as ever, yet the products to be sent are changing constantly,” Dick adds. “There ends up being a lot of dead space left over in boxes.” Boxes that do not fully and correctly fit the product they hold can lead to damaged product and returns, he explains. Until now, companies
have had to consider increasing their range of stock carton size options or implementing end-of-line packaging automation to get packaging of the right size. While companies sending products are dealing with high return rates due to damage in transit, oversized boxes taking up additional warehouse storage space and waste through the use of void fill materials, Daniel O’Sullivan – Sales Director at Abbe Corrugated – says that until now their options have been limited. “Traditionally, a new product is created and the box is sized to fit hundreds – if not thousands – of same-sized products,” Daniel adds. “The ever-changing needs of e-fulfilment do not work with this traditional model and affect time to market and, ultimately, customer satisfaction.”
Feature
“The system is simple, intuitive and effective. We’re eager to see what further efficiency gains Box on Demand will bring to the market.” Daniel O’Sullivan Sales Director
Down-under debut Two years ago, Abbe Corrugated noted a global trend towards corrugated fanfold material and on-demand packaging systems and set out to find a solution that would suit the Australian market. ‘Fanfold’ material refers to continuous lengths of corrugated cardboard, folded in a concertina style at 1,150mm-wide increments, that can be cut to fit any desired box height or depth, through the Box on Demand system. “Fanfold utilises the complete space on a pallet so it can be freighted long distance at minimum cost,” explains Daniel. “It can be made to different specifications for varied applications by flute, width and strength of material.” Abbe Corrugated installed fanfold in February 2017 and one month later became
Australia’s exclusive distributor for the Box on Demand product, produced by Italian packaging machine manufacturer Panotec. “We now offer three-dimensional packaging solutions to the Australian market,” Daniel adds. Box on Demand offers a variety of system options, it is an easily integrated turnkey automated solution. “Box on Demand sustainably offers packaging optimised for different-sized goods, with the most suitable material option,” adds Dick. “It’s a custom box for custom products.” The Box on Demand system can be incorporated into enterprise resource planning (ERP) or warehouse management systems (WMS) for complete in-line automation. “Essentially, what happens is the product will be sized by a three-dimensional scanner, then
the machine will automatically produce a box to the exact size required from the fanfold material,” says Daniel. The lean packaging, Just-in-Time concept was developed to cater for existing and growing operations. “Ergonomics, future proofing and environmental considerations were key,” Dick explains. “Especially for global corporations and large Australian organisations that have committed to the Australian Packaging Covenant (APC).” The APC is a sustainable packaging initiative that aims to change the culture of business to design more sustainable packaging, increase recycling rates and reduce packaging litter. Since its introduction, companies have been encouraged to implement good business practice around sustainability, environment and waste reduction. Box on Demand, as a right-sized – or ‘threedimensional volumetric reduction’ –packaging solution can help to stimulate carbon footprint reduction, Daniel notes. “Reduced carton sizes means reduced material, which means reduced freight, reduced handling, and overall leads to efficiency improvements,” he says. Box on Demand is also well suited to helping tackle the demands put upon the manufacturing industry and third-party logistics providers by the rising popularity of online shopping, Dick adds. “The concept is specifically designed to create right-sized packaging for companies that logisticsmagazine.com.au | 21
Feature
The Box on Demand system, with assembly table, egluer machine and the Panotec - Midi Compack and Compact Evo box-production machines.
require a large variety of small-run cartons or constantly changing carton dimensions,” he says. “Within the manufacturing segment of the market you will find many customers, such as the furniture and kitchen (including flat packs), automotive spare parts and large-format printing sectors.”
The odd bunch While the Box on Demand solution is new on the scene in Australia, it has already been welcomed in many countries around the world. “Word of the solution is spreading,” says Daniel. “There are now over 1,000 machines worldwide, mainly through Europe, the US and China, and satisfaction is high.” Indeed, the solution has an impressive CV – e-Commerce behemoth Amazon uses Box on Demand to package odd-sized products, known as the ‘uglies’ of the industry. The system has been used to box a wide variety of such ‘uglies’, from antennas and furniture, to music equipment and sporting goods such as skis, surf boards and ice hockey sticks. “People no longer see a lack of local availability of bulky products as an impediment,” says Daniel. “As a result, Amazon and others are stepping up and supporting innovative packaging solutions, on a large scale.” Italian furniture manufacturer Pianca was able to completely rid its packaging process of polystyrene foam void fillers after implementing the solution, and process efficiency gains for Italian manufacturing company Denso were so significant the firm 22 | Logistics&MaterialsHandling June/July 2017
was able to reassign twelve operators to other functions within the business. For Express Gift, a UK company, the Box on Demand system was able to pay for itself within six months of installation, and Dutch online print firm Probo Print reports that it has achieved annual savings of €50,000 ($74,000) thanks to the solution. “A lighting division of electronics company Philips in Saudi Arabia managed to reduce the number of returns they process due to damage in transit by 175,000, these are the big impacts we’re seeing the system have,” says Daniel. “We know that Box on Demand users have reported reductions of up to 30 per cent in
The MIDI Compack packaging machine.
freight cost, vast reductions in returns of damaged product and elimination of the need for void filler and protective packaging,” he adds. “At Abbe, we have a range of demand packaging systems, from low volume manufacturers to high volume e-commerce businesses and automated warehouses. “In some cases, we are able to supply the solution with no upfront capital cost. Machine cost can be incorporated into the cost of the material.” Abbe Corrugated has a Box on Demand demo centre located on site at the company’s manufacturing facility in Coolaroo, in the northern suburbs of Melbourne, Victoria. The company regularly runs ‘i-box’ events at the centre to showcase the potential of the technology, in real time. Prospective customers are invited to bring their products along to the events, have them sized by the threedimensional scanner and see the machine produce a perfectly sized box instantaneously. “The system is simple, intuitive and effective,” says Daniel. “And we’re eager to see what further efficiency gains Box on Demand will bring to the market and evolving nextgeneration companies. “We’re also working closely with Box on Demand agents in the UK, the US and Europe to find new applications and markets for the technology.”
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Thinking inside the box The Australian transport market has traditionally relied on trucking using rigid-bodied trailers. By utilising a skel and container combination, a more flexible transport model is possible. Story by SCF
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hen thinking of containerised transport, the words ‘robust’, ‘weatherproof’ and ‘rigid’ would be far more likely to come to mind than ‘flexible’. In fact, while a certain level of uniformity is crucial in order to serve intermodal transport, containers can be customised to suit many operational environments. Australian container dimensions are commonly set to enable the container to be easily transitioned from road to rail. This therefore means the container length, width and height are fixed sizes that are compliant with wagon and skel dimensions, ranging from 20’ to 49’ in both dry and refrigerated variations.
Similar to trailers, containers can be modified to meet specific freight and operational requirements. One key differential between containers and the traditional trailer is the steel-based construction; the use of high-strength steel significantly increases the longevity and resistance to damage of containers compared to trailers. Key wear components of a container are reinforced to offer further operational improvements, for example side wall ‘scuff plates’ can be fitted to reinforce the bottom side wall, allowing for the protection against impact when loading pallets.
CONTAINER TYPES Refrigerated (End Door) containers such single and multi-temp machinery applications. The feature reinforced walls and floors, vertical load bar systems for double stacking of pallets, pogo and lashing point restraint systems, and multiple lifting and trailer interface points for trailer flexibility. Dry (End Door) containers feature reinforced walls and floors, vertical load bar systems for double stacking of pallets, pogo and lashing point restraint systems, and multiple lifting and trailer interface points for trailer flexibility. Side Door containers feature full side opening access for loading, floor-lashing systems for irregular freight such as steel, and reinforced contact points for reduced wear. Bulk containers feature top-hatch loading, rear and front wall hatches for discharge, and smooth internals to prevent bulk product hang-up. Liquid tanks feature internal coatings for liquid storage, multiple loading and discharge valves, and gantry and hatch systems for access. Pneumatic tanks are suitable for dry bulk freight, they feature aeration systems for loading and unloading, and multiple valves for easy operation.
24 | Logistics&MaterialsHandling June/July 2017
The business case Containers offer many commercial benefits outside of their core function of enabling multimodal access, with the modular setup allowing true fleet flexibility for all applications. The standardisation of containers provides access to all modes of transport through road, rail and shipping. Container-and-skel combinations specifically enable road operators to access rail for moving freight across Australia. The key advantages of intermodal include improved transit times and reduced costs for certain routes, reduction in management requirements with rail suppliers in control of the rail component and new freight opportunities for new revenue streams.
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With the ability to remove containers from skels, several utilisation improvements are achievable that can lower overall operational costs. Standard trailers require the equipment to be constantly operating to maximise its utilisation. A container can be removed from a skel for storage or use on rail, therefore reducing the overall amount of equipment required to achieve the same freight task. This further limits exposure to equipment downtime and opens opportunities for alternate skel utilisation when the initial container is not attached. The traditional road-only trailer model limits revenue to a single mode of transport, while a containerised model enables new revenue streams through expanding freight types that can be moved and locations it can be moved to. Multiple container types and sizes can easily be interchanged for cartage of different freight types. For example, an ‘End Door’ container used for dock loading can be swapped with a ‘Side Door’ container for ground loading. This has applications for both intermodal and road-only work, with both areas able to easily swap containers depending on the freight and operating requirements. Maintenance and repairs of transport equipment is essential in delivering safe and quality service, however it is commonly an unrecoverable cost. The construction and strength of materials used in container manufacturing deliver a product that is extremely robust and resistant to damage. This in turn provides real cost savings on repair and maintenance spend, as well as an increase in utilisation by not having equipment out of action for repair. Furthermore when repairs are required, a container can easily be unloaded and swapped with a replacement in a matter of minutes, allowing operations to continue with minimal disruption.
The trade offs The specification and construction of a container requires certain compromises when compared to a traditional trailer. This is to enable the container to operate in the intermodal environment and provides additional strength and features to the equipment. Compared to a trailer, height is commonly reduced in a container – this is due to the base strength and allows it to operate independently
Nick Schwartz, General Manager – Transport Equipment, SCF Containers.
of a skel, when transferring from road to rail or storage. Another important consideration is the weight of containers – due to the increased base thickness and steel materials used to provide the structure, tare weight is slightly increased in a container. When weighing up the options, considering the strengths, weaknesses and legal ramifications of each transport type can be somewhat overwhelming. Approach a company with expertise in different load containment types and let them know the volume, weight, regularity and fragility of the intended load, along with any unusual dimensions. Any reputable container equipment expert will be able to advise on the ideal configuration to suit the freight requirements and budget. “There is huge opportunity in the Australian market to unlock the potential of the modular skel and container combination,” said Nick Schwartz, General Manager – Transport Equipment at SCF Containers. “With a costfocused industry and increasing competition, an innovative approach is more important than ever.”
FAST FACT Shipping equipment company SCF has been engineering, manufacturing and maintaining containerised equipment in Australia for 25 years. This control over the process allows for complete customisation of the specification and can therefore be tailored to meet most specialised applications. The company’s offering ranges from skel and 2 Pallet Wide container combinations to wheeled liquid container tanks and trailer accommodation camps, both for sale and rent. SCF’s established support network can offer assistance on equipment storage, depot services and rental stock availability, and can provide expertise on all things intermodal.
logisticsmagazine.com.au | 25
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Business Profile
Family values Oxford Cold Storage, a family business built from the ground up in Victoria, is approaching its 50th year, and considering a business plan – and geographical – shift to coincide with the milestone. Story by Philippa Edwards
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ack in the days when Melbourne’s industries ran their businesses within the city’s inner suburbs, when the Jam Factory made jam and you could head down to the Capitol Bakery for your daily bread, one local business was already thinking big. In its earliest days, Oxford Cold Storage was already a trailblazer, born through a combination of necessity, ambition and societal change. Father and son duo Laszlo and Stephen Fleiszig found themselves in need of their own method of reliably storing food and, due to their enterprising approach, began what is now Australia’s largest privately owned cold storage operator and the 20th largest cold storage operator in the world by capacity. Paul Fleiszig, grandson and son, respectively,
of the company’s founding family members, serves as Director both of the company and of the Refrigerated Warehouse & Transport Association of Australia (RWTA). He tells Logistics & Materials Handling that the Fleiszig family has a mind for business, and Oxford Cold Storage was far from the family’s first venture. In fact, the family overcame adversity repeatedly, beating the odds to end up with a successful company, safe workers and improved sanitary practices.
From a poultry sum It all began in Hungary, with a poultry business that had been in the family for nine generations until it fell victim to the Nazis in World War II. Paul’s grandfather relaunched, growing the
business into Hungary’s largest poultry business by the late 1940s. When the business was again destroyed, this time by the communists, the Fleiszigs set sail for Melbourne, Australia. “They basically came to Australia as immigrants, with nothing,” says Paul. Laszlo got a job and, with his first paycheck, bought six geese in order to start another poultry business, ‘Cambridge Poultry’. “By the late 1960s, they were based near the corner of Chapel Street and Toorak Road,” Paul says, adding that a move was soon necessary. “The South Yarra Council wasn’t sure about all the feathers and the blood washing down Chapel Street. It was different back then though – it was an industrial area, full of factories.” In 1970, as Cambridge Poultry moved out to Laverton, poultry’s place in the Australian diet was shifting. “Poultry was then changing from being a luxury, killed to order, to a consumable item,” Paul says. As the price of poultry dropped and the company started doing poultry on spec, any excess poultry unsold on the day had to be frozen, an expense that soon mounted. “My grandfather and father decided to build a cold store,” Paul shares. “It was much larger than what they needed at the time so they sold their excess space to meat producers in the area, blast-freezing meats for export.” At the time, he adds, Footscray Road – to the north-west of Melbourne’s CBD – had an abundance of wellestablished abattoirs. “That’s really how Oxford Cold Storage got started, and it grew from there” he says. The company continued to work with the abattoirs until the mid-1990s, when issues with the meat workers union prompted a new focus. “Most of the abattoirs and boning rooms were shut down and moved interstate,” Paul says. “At that point it was decided: the business model had to change.” It was at this stage that the next generation – Paul, his brother and a cousin – got on board, bringing with them a fresh perspective. “When we joined the business, we immediately invested in IT,” Paul says. “We were the first to put a radio-frequency warehouse management system (WMS) into a cold store; no one had done that in Australia yet. That really transformed the business and opened up the fast-moving consumer goods logisticsmagazine.com.au | 27
Business Profile
(FMCG) business to us, which was really the basis for our growth.” The company soon acquired major customers, including BirdsEye, Peters Ice Cream, Bonland Dairies, McCain, Nestlé, Don Smallgoods and a few other multinationals, in addition to a multitude of smaller FMCG customers.
Family philosophy Oxford Cold Storage’s original site in Laverton is still owned and operated by the company, providing 5,000 pallet spaces, though the company outgrew it in 1980 and expanded onto a larger site a kilometre away. The main site has 175,000 pallet spaces and services 110 of the company’s customers. “We deal with products from food through to pharmaceuticals,” Paul says. “We have multiple temperature zones – frozen, chilled, and temperature- and humiditycontrolled areas.” As the company’s task has grown, so too has its workforce, which currently stands at slightly under 500 full-time and casual workers. Several staff members have been at the company since its early days, and some have encouraged their own family members to come on board. “We’re a family business, and we certainly have family values,” Paul says. “We have a lot of very long-term employees, in fact three of our five
first employees are still with us now, coming on to 40 years later. “We have many family groups – fathers with sons and daughters – all working for us in the group. We really value that family loyalty aspect – we’re a family and we like to deal with other families. “I think that if people invest their lives, and spend so many hours in a business, it’s got to be more than a place of work. That’s my personal view, and the family philosophy.” Today, there are still three generations of the Fleiszig family involved in the day-to-day running of the business, and Paul credits this with contributing to Oxford Cold Storage’s success. “I think being a family business, along with our core customer focus and investment in IT, this is how we deliver superior service,” he says.
Living in the future IT has had a profound effect upon the way Oxford Cold Storage does business, and very early on set it apart from the rest. Since Paul and his brother and cousin joined the ranks, technology has played an important role in improving the company’s offering. “We have a very heavy investment in IT,” says Paul. “We actually know how the IT works – we own our own source codes for the warehouse management
system. We also have another business that manufactures our own barcode and RFID tag readers.” Most recently, the company launched a pilot project testing automated guided vehicles (AGVs) in one of its smaller stores. In the test area, five moving robots complete processes and there are no human staff present. “We went live in February 2017,” Paul says. “As far as we are aware we are the first anywhere to do it in a third-party logistics (3PL) cold-store environment. “We are up and running and it is working.” Oxford Cold Storage’s staff members manually receive the stock from the back of the trucks and place it on a conveyor belt. The belt then takes the stock into the store and the robots put it away. When an order comes in, a staff member sends the order to the robots and the robots pick it and send it out on the conveyor belt. “You need to be flexible as a 3PL provider,” Paul says. “What you’re doing today probably isn’t what you’ll be doing in six months’ time, as people’s needs change. “Automation will eventually take over – I don’t know when, but we’re already talking about driverless trucks and cars, so a driverless forklift in a cold store is not a big ask. “It’s not as easy as you’d think, but that’s the way I think it’s going to go – we’re going to automate more and more.” So far the pilot is going well, though there have been plenty of minor teething problems as the robots have been learning the store – they do not follow a track, rather they use triangulation to know where to go. In the meantime, staff members have had to be brought up to speed on how to manage the technology. “You need to retrain your staff and that’s what we’re doing as much as possible,” Paul says. For now their jobs are safe, Paul shares, since the technology is far from a stage at which it can work properly without supervision. “We’re a long way from that,” he says. “Looking into the future, 15 or 20 years from now – if you’re not part of it you won’t be able to provide the services at a competitive rate.”
Evolving expectations
Oxford Cold Storage’s main site in Laverton, Victoria. 28 | Logistics&MaterialsHandling June/July 2017
Paul shares that customers are ramping up their already-somewhat-sophisticated expectations, pushing for error-free, low-cost service. While providers elsewhere in the 3PL sphere may be increasingly looking at traceability and visibility,
Business Profile
such requirements are old news in the cold storage world. “We’ve been offering full track and trace – a history of the products in the cold store – since 1995, when we first put in the warehouse management system,” he says. “That’s now a given within the industry, a basic requirement.” The push now, he shares, is around service delivery and competitiveness on price. “The margin for error in expectations is now zero,” he says. “It used to be that if you were running at 99 per cent that was okay, 100 per cent is now a demand so you need systems in place to capture human error.” Minimising cost is having a huge impact at the moment, he adds, driven by retailers such as Coles with its red hand, Aldi’s everyday low-price strategy and other retailers reducing prices. “It’s getting worse as a lot of customers in the food market have been pushed by retailers to a point where they’re not making a return and many are actually making a loss,” he says. “If all of a sudden your soda or mineral water has gone from $1.50 to $0.75, that reduction has got to come from somewhere.” A similar situation is emerging in Europe and the US, Paul shares, though here its effect is felt acutely due to Australia’s duopoly. “If you can’t sell to Woolies and Coles you basically don’t have a business,” he says. “In Europe and the US there are other retailers you can go through, but they don’t have the market penetration that those two do here, which amplifies the pressure.”
Eastern promise That pressure, along with the arrival of an overseas cold store provider in Australia, has led Oxford Cold Storage to its next big business model shift – the company is currently looking at the feasibility of expanding its operation into Asia. “We’re in a transition phase at present,” Paul says. “A new competitor has come in from overseas and is putting a lot of capacity into a market that probably can’t handle it, so in the past months it has become extremely competitive.” For a long time, Oxford Cold Storage has had a technical advantage over its competition. That is now shrinking as others are catching up. While the company continues to invest in technology unlike its competition, Paul is confident the company would benefit from looking to Asia for its next big opportunity. “Australia is a mature market,” he says. “In
Paul Fleiszig, Director, Oxford Cold Storage.
terms of growth we aren’t seeing much potential here. When we look at Asia and its fairly immature cold chain market, with a rapidly developing middle class, we’re seeing a growing need for our service. “Most people get their food from wet markets – to do so several times per week takes time, meaning you’re wasting huge amounts of time dealing with food. In more modern economies, people go to the supermarket, buy everything and then put it in their freezers. “So you need those cold chains to deliver that food fresh, and safely, into those easily accessible supermarkets and convenience stores.” Without this, he adds, the economy will hit a wall as lawyers, engineers, and all of the people who need to focus on their jobs can’t spend their day looking for food. “One of the things we’re seeing is some distrust of food in a frozen state – they don’t know where it’s been, and they don’t know how
it’s been handled through the supply chain. We see that as an opportunity to be part of that growth in Asia. Looking at Indonesia, Malaysia, Thailand and China in terms of the amount of people, the opportunities there are much greater than they are in a more mature market like Australia.” Paul believes that Oxford Cold Storage is well positioned to succeed in Asia, in terms of time zones. “We’re fundamentally in the same time zone,” he says. “So we don’t actually need people on the ground, or working through the night to support an Asian logistics network. “It doesn’t sound like much, but it really does make a difference – because of IT, it doesn’t matter where you are physically located, you can do anything. Your database for China can sit in Melbourne.” This geographic shift will be vastly different from the company’s original move from Hungary, but the same determination remains. logisticsmagazine.com.au | 29
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The human touch Automation is gradually increasing its reach in industry – one day, systems will be able to carry out processes such as manufacturing, packaging, picking and transporting without so much as a cursory human supervisor. For some companies and tasks, however, that human factor will never be replaceable.
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AC Systems designs and manufactures workshop and storage equipment at its 11,000m² custom-built factory in Glendenning, Sydney. There, the entire product range is produced from conception in the R&D offices through to manufacture, assembly and dispatch. In the four decades since its inception in 1977, BAC Systems has grown its product offering and earned a place at the forefront of modular workplace and storage systems development throughout the world. At a time when many companies are cutting corners and replacing manpower with computer power to maximise profit, BAC Systems is continuing to invest in the quality of its products and customer service to maintain its reputation and keep customers knocking at its door. “We value quality – both in processes and customer service – and we’re well recognised for what we do,” says Robert Griffin, a Director at BAC Systems. “We’re not cutting back in order to keep costs down, we would rather maintain our quality and integrity with our customers.” As for succumbing to the growing tide of automation, Robert shares that while the company appreciates the usefulness of some automated processes, it won’t be switching to a robot workforce any time soon. “We have 66 employees,” he says. “We think that providing local jobs is important, and as such we’re not looking to replace them through automation – we value jobs and we value our employees’ trained eyes. “We’re not opposed to automation, but we feel that there are many processes that, when automated, can unnecessarily put people out of work, then you miss out on their skilled eye for checking, calibrating and maintaining quality.”
Personalised solutions The company’s main focus is high-density storage, and it specialises in modular solutions, which are key for inventories containing smallto medium-sized components. “Everything we build, we design around the customer’s inventory, 30 | Logistics&MaterialsHandling June/July 2017
From coil to finished product, BAC Systems performs all sheet metal and assembly processes in-house.
needs and processes, to support functionality and productivity,” says Robert. “We look at what a customer produces, how they work and what processes and tools they use. Then we design a workshop or storage solution, considering such factors as fast-moving parts, how often a tool is used, whether documents need to be close at hand, and whether a specialised work surface, light fixture or power access is required.” The result, he adds, is an optimised workspace that promotes efficiency. “For example, in a warehouse, by getting as many parts as close together as possible, we minimise the time it takes to walk and retrieve parts,” says Robert. “If we cut the time taken to get that part from 10 seconds to two seconds, by changing the distance from 10 metres to two, we’re helping to save time – that quickly adds up.”
Storage is often treated by customers as an afterthought, Robert shares, and soon the need for additional storage space catches up with them. “Intelligent storage helps to save in real estate costs, by avoiding the need to upsize the parts storage to a larger facility,” he says. “We can compress the storage footprint by looking at the task in three dimensions. “When it comes to shelf storage, length is considered but height and depth rarely are – you end up just storing air. For small- and mediumsized parts, we configure drawer and shelf locations for the volume needed.” It is not unusual for new customers to approach BAC Systems with the idea that storage is synonymous with shelving, but this is not the case, Robert shares. “Rather than ask customers what their shelving needs are,
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A custom storage unit at the Phil McCarroll Toyota dealership in New South Wales.
we try to gauge their storage needs. Shelving has its uses but, equally, it can be the wrong solution. When we start a conversation with the customer we find often that a hybrid system of storage is the best fit – anything from pallet racking and long-span shelving, to smaller mobile shelving and drawer storage.” When it comes to suggesting solutions for storage of small parts, drawer storage wins “hands down” every time, Robert says. “Automated or powered systems have their place – they work fine up until a point, but incur ongoing costs, maintenances commitments and result in downtime when issues occur. “Non-powered drawer systems are engineered to work for decades and decades,” he adds. “Our system is designed to last forever, by being durable, flexible and reconfigurable, with no ongoing operational expenses – once it’s in, it’s in.” Testament to the engineering quality of BAC Systems’ storage cabinets is the fact that the 40-year-old company’s first cabinets are still going strong.
for many decades – they like the strength and capacity offered, and that internal partitions can be adjusted, so it’s a sustainable system.” A special project between BAC Systems and Cat 10 years ago resulted in BAC Systems developing a dust-control system to protect Cat’s parts. The system seals the drawer against settling dust and it gained acceptance from Cat for use across its whole global network as a high-level contamination control solution for small parts. “The relationship we’ve had with Cat has been fantastic,” says Robert. “We’ve responded when they’ve had needs, we’ve then met their needs, and Cat has shown its appreciation by investing in more cabinets.”
Specialised solutions developed for customers can result in innovations that can benefit BAC Systems’ other customers. “Our technology is in place on board the Navy’s ships and frigates,” he says. “We developed and shock tested individual drawer latches alongside the Navy, then the developed concept was used across industry boundaries. That same latch is now used to help secure doors on service vehicles and in earthquake-prone areas. “We can develop a niche, and then find other uses for it.” As many of BAC Systems’ products will have to undergo extremely rigorous usage – whether it be by the Navy, in the mines, or in a busy workshop, the company builds them with the worst-case scenario in mind. “We use thickgauge, high-quality steel,” Robert shares. “We have commissioned independent shock tests to ensure the cabinet can maintain its integrity.” The value that human time, human attention and human expertise bring to BAC Systems’ processes is going to help the company and its products continue to stand the test of time, Robert shares. “This company wasn’t built on individuals, we’re a family and we work as a team,” he says. “Together, we’re configuring storage in an intelligent way, not just giving it lip service. We take the time to do the hard work, asking the questions and surveying the inventory to deliver a more effective storage solution and, judging from the feedback we get from our customers, the human touch is serving us well.” BAC Systems produced a custom storage solution for firefighting equipment supplier Sasgar.
Returning customers BAC Systems counts construction machinery manufacturing company Caterpillar (Cat) as one of its most loyal customers, having stocked its network across the world. “Our storage solutions are used by Cat in Australia, as well as across South-East Asia, Africa, South America, Russia and Mongolia,” Robert says. “We’ve supplied our high-density drawer storage cabinets to Cat logisticsmagazine.com.au | 31
Interview
Challenging
the status quo Start-up Sendle has set out to disrupt the Australian parcel delivery market without owning a delivery vehicle. Its remarkable rise shows that the country’s SMEs were ready for change. Interview by Philippa Edwards
32 | Logistics&MaterialsHandling June/July 2017
Interview
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ew kid on the parcel delivery block Sendle has been offering Australia-wide flat rates to small businesses since 2014, though the delivery service has been embroiled in a legal dispute with Australia Post since soon after its inception. Australia Post has asserted that Sendle’s slogon – ‘post without the office’ – infringes upon its trademark over the word ‘post’. Logistics & Materials Handling sat down with James Chin Moody, CEO and Founder of Sendle, to find out why the company has the national postal service so spooked, how he feels about competition in the sector and why he doesn’t want to make everybody happy.
Q: Your court case with Australia Post has been ongoing for over two years now, how does it stand at present? A: There’s been a lot of to-ing and fro-ing – we put forth the trademark, Australia Post opposed it, then we had a chance to respond, then Australia Post got to respond to our response, now the ball is in IP Australia’s court. We’re interested to hear what Australia Post was trying to say – at one point they were going back to the Oxford English Dictionary for the definition of ‘post’. There are apparently two definitions in the dictionary; and they claim that one stands for national authority – post actually means a lot of other things as well, including sending a parcel. We think there’s absolutely no confusion around the phrase ‘post without the office’ and ‘post office’. In fact, the point of the trademark was to differentiate what we’re offering from what we think is a service that people don’t necessarily want, which is to line up at the post office. We wanted to say: here is the thing you want – to send a parcel, without the things you don’t want – lining up and spending more money. It’s 40 per cent cheaper on average to send with Sendle than it is when lining up at the post office. We believe the whole purpose of the trademark was to reinforce that idea – that lining up is so 20th century, in fact it’s probably more like 19th century. These days, why not enjoy door-to-door parcel delivery, while saving money and time. Australia Post put forward the argument that small businesses will get confused, and think they are using the post office, but we believe small businesses are a lot smarter than that – we are very actively trying to differentiate ourselves from that service. I think Australia Post is going to be around for many years to come, but I think they’re definitely not used to friendly competition in this space, and that is what we are trying to bring to small business parcel delivery. We think it makes industry improve service levels and brings prices down – all great things.
This court case is not the first time they’ve done this to a small business – Australia Post took a company called Digital Post Australia to court in 2012 over its trademark. That made it all the way through to Federal Court where it was then tossed out. So it’s done this before, and that gives us lots of confidence that you can’t own the word post – I think we’ve got a really solid case. Q: So, do you consider there to be room for both Sendle and Australia Post in the country’s parcel delivery market? A: I believe that having choice is healthier for everyone. Australia was poorer for it when we only had one airline – imagine if we only had one big bank or one telco. Choice helps friendly competition which helps drive prices down and makes everybody improve their service levels. There’s definitely room for more than one player – in fact there should always be room for more than one player. Q: Australia’s small- and medium-sized enterprises (SMEs) have embraced Sendle – what is the company doing differently? A: We believe we’re offering a better level of service. What we’re learning in the age of Internet and technology is that you can no longer be 80 per cent good to everybody – you have to be 100 per cent good to somebody. We want to be 100 per cent good to 20 per cent of the market, and that means choosing the tools, customer support and delivery partners that are good for small business. We want to create an option for these guys lining up at the post office. Many small businesses haven’t had a choice because when you’re small, none of the big guys want to talk to you. Parcel delivery is currently a monopoly wrapped up in a habit – when you ask people about sending a parcel, it has essentially become a habit to go and line up at the post office to send it. What we’re trying to show all those small businesses, including those with a small e-Commerce site sending 50 parcels a month, now there’s a viable alternative for you – we will pick up from your door and save you money as well. Studies have found that small businesses often spend up to 40 per cent of their time on administration and logistics. Let’s free up their time so they can focus on the stuff that really matters, building their business. Sendle has been growing about 20 per cent per month, for over 18 months, we’ve done over 500 million kilometres of parcel delivery and we’re the only carbon neutral delivery service in Australia. We estimate that we facilitate over $100,000,000 worth of small business e-Commerce per year, and this is just the tip of the iceberg. As far as we see, there is so much more opportunity to continue logisticsmagazine.com.au | 33
Interview
down this path and become the best service for small business parcel delivery in Australia, that’s where we’ll stay.
industry is evolving quite significantly so we’re still learning – so from that perspective we’re definitely still a start-up.
Q: Has Sendle caused the disruption you hoped it would? A: It’s hard to say what is disruption, though I think the fact that we got the notice of Australia Post is probably showing that we’re at least having a little impact. I see that hopefully translating into better levels of service for customers, better prices and so on, across the market. The fact that we have been growing so rapidly, month on month, is probably showing that the market was very ready for a competitor in this space and, for me, shows we are having an impact. We level the playing field between small and big businesses, and also offer flat rates – so it costs the same amount of money to send from Sydney to Melbourne as it does from Armadale to Perth. For a small business, you want price certainty. You want confidence that you’re going to be able to send a parcel for, say, under $10 for a parcel under 25kg anywhere in the same city. You want that comfort. That’s really where we have a strong position in the market. We get customers, particularly in regional areas, who call us up and say ‘I’m so happy I found you, I was thinking of shutting down my business but now I can actually keep going, because before delivery was getting too expensive’. That’s probably the best kind of impact we can have. Them saying, ‘I’m here because you guys are helping me to make my business work’. Fantastic.
Q: You said in 2015 that Sendle was a software company rather than a transport company, is this still true? A: In the time since we’ve realised that we’re probably both because the world is blurring, even in the couple of years since we started. One thing that differentiates us from a lot of other software companies in the shipping space is we see them as trying to improve the management of logistics, while what we’re trying to do is use software to improve the logistics itself. We use smart technology to choose partners based on quality of delivery and we have really smart technology around customer service. From our perspective, we are the parcel delivery service. We are the partner that you go to if you want to send a parcel. We might tap into other people’s infrastructure to deliver it, but we take full responsibility for that, and we make sure that parcel gets from A to B. We’re still absolutely a software company but also we’re a courier – a courier focused on that small business part of the market. It’s really an evolution of our thinking. The biggest advantage that we have is that we did start off as a software company. We live and breathe iteration, we’re continually learning, we use technology to make decisions – all those sorts of things we see as our advantage compared to, say, a national parcel delivery company who started off around infrastructure.
Q: Sendle came about in 2014 as a natural evolution of your sharing network, TuShare. Up until what point will you still consider Sendle a start-up? A: Sendle’s growth has been phenomenal – in fact once we launched Sendle it grew so rapidly that it quickly swamped the amount of volume that TuShare was processing. Within six months we really couldn’t keep both businesses running, so we had to unfortunately shut down the TuShare marketplace to focus everything on Sendle. The best definition I’ve ever heard of the difference between a start-up and a small business is that a start-up doesn’t quite know its business model yet, therefore its upside is potentially infinite. The moment you are really firm on your business model, then you’ve also defined how much upside there is. I think at Sendle we’ve definitely found something that works, but we can see that the 34 | Logistics&MaterialsHandling June/July 2017
Q: There’s a great deal of hype around innovative new delivery solutions such as drones at present – what effect do you foresee this new technology having on Sendle? A: We tap into capacity wherever it might be, and then use it to provide a consistent level of service. We’re very fortunate that there are some very big courier companies out there that we partner with that help us give that really solid level of service. In terms of drones, I’m not yet convinced that they’re the panacea to parcel delivery that they’ve been painted as. For remote and rural areas they could be great, but it’s quite expensive energy-wise to lift heavy items and deliver them. Driverless vehicles seem to be a more of a citywide solution than flying drones, but I think we’re still quite far off since there are so many technical, user and regulatory hurdles to overcome. We’re keeping an eye on the technology but frankly, from a point of view of sending a parcel from A to B, the service level is currently suitable
James Chin Moody, CEO and Founder, Sendle
to the market. That said, if someone starts building additional infrastructure, we’ll be the first to want to talk to them and see if we can integrate it. Q: What effect will evolving customer expectations have upon service style as we move into the future? A: I think it depends on what you’re sending – we send everything from toilet paper and dog pyjamas to wedding dresses – and the goal is to make our service invisible. Customers need to know that the parcel they’re sending is going to turn up in the right place, at the right time, in the best state possible. I think the expectations of the market for that sort of delivery are likely to evolve. The arrival of Amazon, most likely this year or next, will drive adoption of e-Commerce – many more people will be buying things online, not only through Amazon but everywhere – and I think it will also potentially change expectations around next-day delivery, but that will be a much slower trend. What we want to do is make sure all the small businesses can compete on logistics, that’s our core purpose. Logistics becomes quite an important part of the whole customer experience when you’re shopping online, making sure that you’re notified of everything and that everything is tracked. Making sure that small businesses have access to the tools available to the big sellers is one of the big reasons why we exist.
Industry event
At the forefront of change Making its debut in May 2018, MEGATRANS is a unique trade platform bringing the national and international supply chain industries, including the wider infrastructure and transport sector, together in one large-scale setting.
O
n 16 February 2016, Australia’s population ticked over to 24 million. From 2013 to the beginning of 2016, the country’s population increased by 1 million to reach this milestone, and it isn’t slowing. Australia sees a total population increase of one person every one minute and 22 seconds, according to projections based on the estimated resident population at 30 September 2016 from the Australian Bureau of Statistics. There are myriad sectors of society that are impacted and ultimately influenced by population growth, including urbanisation, employment, resources, the environment and of course, infrastructure. This population growth puts increasing pressure on how goods and services are moved and tests the limits of traditional transport systems, particularly in urban centres. The supply chain covers all facets of Australia’s industrial transport and logistics sectors, including road transport, sea, air, warehousing, infrastructure, materials and handling and rail. As the population increases and as megatrends such as globalisation, urbanisation, demographic change, Industry 4.0, buying behaviour and resource scarcity converge, the very idea of transport and logistics as we know it is evolving. MEGATRANS – an exciting new trade event – will bridge the gaps between these industry segments that have previously been operating in isolation.
MEGATRANS is proud to partner with the Victorian Government to present the trade show and, with major Australian industry and association partners including the Australian Logistics Council (ALC), the Victorian Transport Association (VTA) and the Australian Road Transport Suppliers Association (ARTSA) on board, the event is already creating a buzz in industry circles. “With such great industry support for the show from the get-go, we know that MEGATRANS will meet and exceed expectations in delivering a comprehensive and unique platform for the wider Australian infrastructure sector,” says Simon Coburn, Show Director, MEGATRANS. The show makes its debut 10–12 May 2018 at the Melbourne Convention & Exhibition Centre, based in the heart of the one of Australia’s major logistics hubs and one of the world’s most liveable cities – Melbourne. Connecting the Australian and international supply chain, the three-day expo will bring together those who plan, implement and control the efficient and effective forward flow and storage of goods, services and related information between the point of origin and point of consumption. Four main sections comprise the show’s 30,000m2 venue – Logistics & Material Handling/ Warehousing & Storage; Road Transport, Air, Sea & Rail; Infrastructure; and Technology. “As the borders between industries blur, new multi-dimensional concepts have to rise to the challenge, and MEGATRANS is leading the way,”
explains Coburn. The extensive trade show will facilitate discussion around the new trends in the market, explore the innovative technology streamlining the supply chain process, and create a unique networking opportunity across many facets of Australia’s industrial sector. “With Australia’s population increasing at such a rate, we need to prepare for the biggest industrial revolution of this generation. We must look at what technology and innovation is out there to improve and streamline the supply chain process, and embrace it,” says Coburn. “This includes all aspects of the wider infrastructure and road construction sector, which will contribute significantly to the future of Australia’s logistics and supply systems.” The show will feature site visits of Australia’s leading supply chain infrastructure, a technology showcase, Industry 4.0, key industry networking events, ministerial and government department round tables and the prestigious Mercury Awards – the premier awards night in supply chain management. MEGATRANS will bring together a variety of international and domestic conferences, including conferences for ALC and VTA members, the Global Shippers Forum and the ARTSA Global Heavy Vehicle Leaders Summit. “As an exciting new trade show, the scope of which hasn’t been done in Australia before, MEGATRANS will be a hub for industry representatives across the entire supply chain,” says Coburn. “We’re inviting everyone to be a part of this game-changing expo format – from hands-on decision-makers in the supply chain and logistics industry to CEOs, COOs, regulatory bodies, urban planners and government on all levels. “Watch this space for more developments – MEGATRANS 2018 will facilitate the topics of discussion, networking and decisions around the future of Australia’s supply chain process.”
For more information about the show or about exhibiting at the event, contact Emelia Hinge: emelia.hinge@ megatrans2018.com.au
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Case study
Logistics in action Bolloré Logistics “The system now gives us full visibility of the warehouse aisles to protect both us and the customer should an incident occur. It also provides real-time visibility of workloads.” Steve Smith Logistics and Compliance Manager, Bolloré.
The challenge Bolloré Logistics is one of the world’s largest third-party logistics (3PL) companies*, and has a presence in 105 countries. The company’s warehousing and logistics facility near Auckland Airport, New Zealand, has seen significant growth in recent years and often handles in excess of 2,000 items in a day. As a customs-bonded warehouse, monitoring of all stock movement and processing is crucial. The company’s CCTV operation needed to be expanded in order to monitor the entire site and, with footage on the site’s existing analogue system barely useable, an upgrade was essential.
The solution Steve Smith, Logistics and Compliance Manager at Bolloré, turned to Brian Clough of Auckland Security Cameras, a firm that specialises in security installations for large industrial and logistics companies. Clough chose to fit Mobotix cameras for the installation because their hemispheric technology would give excellent visibility of the whole premises. Plus, with military-grade encryption features as standard, Mobotix provides excellent network security, a significant consideration within the import and export sector. A combination of Mobotix c25, v25 and i25 hemispheric cameras, along with several Mobotix Dual D15s cameras, were installed to provide complete coverage of the 6,600m2 site. The existing IT infrastructure was used wherever possible for the installation, reducing the amount of new cabling needed, while MxManagementCenter (MxMC) by Mobotix made configuring the cameras very straightforward. “It’s the best user interface I’ve ever seen, from the end user’s point of view,” said Clough of Mobotix’ new VMS (Video Management Software). “It’s very intuitive – it 36 | Logistics&MaterialsHandling June/July 2017
performs perfectly and is very easy to use for the three main tasks that any end user will want: viewing live footage, reviewing past footage, and giving evidence of an incident.”
The results “The system now gives us full visibility of the warehouse aisles to protect both us and the customer should an incident occur. It also provides real-time visibility of workloads,” Smith said. Recordings accurately identify every vehicle and the precise time that it enters and leaves the facility, along with all loading and unloading activities. These are time-stamped to create a visual verification of every operational process. For security reasons, there is no direct access to the cameras over the internet, a time server is used instead. The decentralised technology means the cameras process and compress the recordings themselves, requiring no central server and therefore not burdening the network. Indeed, in situations where a network may experience higher loads at certain times of the day, Mobotix cameras can even wait until a specified time to send their footage. Where previously security staff had to go to the server room and search through hours of footage, they can instead perform this from their office computer with ease. The Mobotix search facility offers up to 60 times high-speed playback along with extensive analysis and event monitoring functionalities. The system goes beyond securing assets and premises, to be an integral part of operations. Reliability is an absolute priority. “At any time, we could be requested to supply video footage relating to an incident or delivery, which could have been some time ago,” Smith explains. Fortunately, Mobotix cameras are extremely reliable “I can honestly say I’ve never had a
camera failure in any of the Mobotix cameras we’ve installed,” Clough says. “But with storage devices that can happen, which is why we have built in plenty of redundancy into the networkattached storage (NAS) server where the recordings are stored.” Within a logistics setting, the consequences of damage or loss to premises and stock can be catastrophic. A security system that allows both the monitoring of business processes and guarantees the availability of historical footage can help companies avoid expensive compensation claims. Indeed it is an invaluable tool for risk management, compliance enforcement and dispute resolution. It creates a verifiable audit trail that can actually save money by reducing insurance premiums. Thanks to Mobotix technology and the integrated system installed by Auckland Security Cameras, Bolloré now has a flexible and future-proof security solution that provides excellent image quality and reliability at an affordable price.
*Source: Armstrong & Associates Inc.
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