Irish Haulage Strategy Webinar - 16th June 2021 Kühne Logistics University Hamburg
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Improving the Economic Efficiency and Environmental Sustainability of Road Haulage Professor Alan McKinnon Kühne Logistics University Hamburg Irish Haulage Strategy Webinar 16th June 2021
Road Haulage Sector: defining characteristics low barriers to entry few economies of scale highly fragmented intensely competitive treated as commodity service low margin high level of subcontracting under-utilisation of capacity operational inefficiencies largely the result from need to meet clients’ logistics requirements prioritising commercial performance / survival over environmental sustainability Survey of 800 small and medium-sized European road carriers priority to be given to decarbonisation in road freight sector Importance of fuel efficiency in long term strategy https://bit.ly/35p4d8A % of carriers % of carriers business opportunity in improving sustainability? very large 5% large 11% moderate 32% small 32% none 19%
Decarbonising Road Freight Transport by 2050 Leveraging key freight parameters to achieve a 90% reduction in CO2 emissions Scenario 1 80% 70% Scenario 1 Scenario 2 transfer 30% of road tonne-kms to rail 60% heavier reliance 50% 80% reduction in carbon intensity of rail freight on switch to low 40% carbon energy 30% + 20% 25% improvement in efficiency of truck routeing 10% + 0% 30% increase in loading of laden trucks + 30% reduction in empty running of trucks + EU road tkm reference scenario BAU trend (with constant carbon intensity) 50% increase in truck energy efficiency 160 2035 peak 143 151 + 2025 peak 126 134 117 60% drop in carbon content of truck energy 109 100 97 95 77 28% more accumulated 90% reduction in carbon intensity 57 56 CO2 emissions by 2050 36 At 2017 rate of truck replacement in EU: 16 13 – 14 years to replace the fleet once mass 2015 2020 2025 2030 2035 2040 2045 2050 production and uptake begins BAU 2035 peak 2025 peak
managerial / operational / behavioural (MOB) options UK road freight trends in key parameters weight-based load factor on laden trips • faster to implement need changes in business 65% • yield economic + environmental benefit practice, operating procedures , artics 60% • low capital investment skill levels and mindset all HGVs 55% rigids Possible Contribution of MOB Options to Road Freight Decarbonisation 50% reference scenario 45% improve loading 40% reduce road freight activity energy efficiency average fuel efficiency of road freight operations switch to biofuels 3.8 3.6 rigids electrify 3.4 3.2 km/litre 3.0 42% contribution of logistics to fuel savings artics modern truck scenario 2.8 2.6 IEA (2017) 2.4 2.2 https://bit.ly/2IQJ5jE 2.0 Mt CO2 saved by 2040 0 100 200 300 % of empty running 34% supply chain collaboration 32% rigids all HGVs modal shift to rail 30% 28% artics optimised fleet / routing 26% demand management fuel efficient driving 24% ETC (2019) can cut CO2 emissions by 22% https://bit.ly/3jcc1is modal shift to shipping 28% in heavy-road sector 20% by 2050
Constraints on the Utilisation of Vehicle Capacity retrospective analysis of potential for backloading many factors constraining vehicle utilisation 9000 journeys by 29 lorry fleets over 48 hours Source: McKinnon and Ge, 2005 https://bit.ly/3xwlqsV
Optimising the Utilisation of Vehicle Capacity typical density (tonnes / cubic metre) 9 % empty running loaded trips 8 decline in average density of freight 7 6 5 4 optimum density to 3 fill 40 tonne truck 2 1 average payload weight % space utilisation % weight utilisation 0 s er d l te s es ) am l s l y no ks r oi ee ed od oo el ee ar lo bb re /s ttl ic ha rc st al fo go rc ix w /b nc br ru bo pa (m et rth al e ge co te ilk en et er / ea en s hi /m el m be rie yr /w ss fu st ce d er pa ly or le o at po f il gr at w er of g x fr i bo re 2-dimensional view 3-dimensional view floor-area coverage cube utilisation vehicles ‘weighing out’ vehicles ‘cubing out’ space is the constraint weight limit is the constraint data availability high zero Impact of handling equipment, packaging and product design Macro-level Truck Utilisation Statistics: available data in EU right-sizing packaging https://bit.ly/3vpWDoV
Supply Chain Collaboration Deep decarbonisation of road freight transport will need much greater sharing of vehicle capacity Nestle – Pepsico Horizontal Collaboration in Benelux The Physical Internet applying networking of principles of the internet to physical movement of freight Open, collaborative network with full visibility and incentivized asset sharing ‘Physical encapulation ’ of goods in a new generation of modularised containers’ 1. Separate delivery operations 2. Groupage by Logistics Provider Kg CO2 / tonne 1. Separate delivery 43.8 2. Groupage 27.3 3. Collaborative synchronisation 20.3 EU project: 22 3. Collaborative synchronisation Source: Jacobs et al 2014 https://bit.ly/2TzTJ04
High Capacity Transport: relaxing truck size and weight constraints increases inHigh truck size and Capacity /or weight Transport limits in Europe 2019 since 2013 UK longer semi-trailer trial Norway Sweden Finland 25.25 metre 60 tonnes 25.25 metre 74 tonnes 34.5 metre 76 tonnes Denmark: 25.25m 60 tonnes Netherlands: 25.25m 60 tonne Germany: UK: 25.25 metre 40/44 tonnes Load consolidation cuts truck-kms, fuel use, up to 15% more pallets trial of 1-2 m longer trailers Extensive use of double- emissions, accidents and labour demands deck trailers 2013-2018 Flanders HCT pilot project Net CO2 savings even after allowance 37K tonnes of CO2e saved Spain made for modal shift and induced traffic https://bit.ly/37R9UyK 25.25 metre 60 tonnes Gaining extra capacity vertically: UK double-deck trailer – major contributor to UK road freight efficiency and decarbonisation Double-decking within 4 m height limit: 5m EWOS (Netherlands) UK ‘custom and practice’ 4.9m Ireland 4.65m Finland 4.4m Slovenia 4.2m 4m EU limit Source: ITF (2015) Case study https://bit.ly/3cO7GSl 48% reduction in CO2 emissions
Impact of digitalisation on the efficiency and sustainability of road haulage Online freight procurement and optimisation Smart road infrastructure Upgrading of web platforms and software tools % rating the impact of digitalisation on logistics as ‘high or transformational’ in past 5 years in next 5 years total sample 22% 74% Intelligent connected vehicles Industry leaders 25% 85% Internet of things Logistics providers 38% 86% Consignment-level visibility and connectivity Shippers 9% 64% survey of 92 logistics executives Data pooling Advances in vehicle routeing / scheduling cloud computing, software-as-a-service Big data, predictive analytics etc Supply chain applications of Blockchain https://bit.ly/3e5cYIY
Should We Reverse the Just-in-Time Trend? CO2 and process time in a supply chain Some suppliers Some suppliershave adaptedbetter have adapted better than than others others to to the disciplines the disciplinesofofjust-in-time delivery just-in-time delivery CO2 emissions time Relaxing of JIT - an effective means of cutting carbon emissions? Relaxing JIT: • more time to consolidate loads and find backhauls Time compression of non-transport activities • easier for rail and water to compete for freight But: • JIT is business paradigm that minimizes waste • contributes to energy / CO2 savings in production + warehousing https://bit.ly/35qx2Bt
Improving Energy Efficiency in the Road Freight Transport Sector vehicle technology: new build + retrofits Truck platooning Truck automation Improve vehicle maintenance driver training and monitoring change operating practices: e.g. reduce maximum speed or rescheduling telematic monitoring eco-driver training upgrade fuel efficiency of ancillary equipment e.g. more efficient transport refrigeration units, better insulation, improved operational procedures, alternative refrigerants
Effects of traffic congestion on truck fuel efficiency and benefits of rescheduling deliveries to off-peak periods average fuel consumption (l/100km) Effects of Varying Start Times for Deliveries across the UK Trunk Road Network 40 tonne lorry 90 Source: VDA (Germany) 80 70 60 50 40 30 20 10 0 no stop 1 stop per km 2 stops per km Source: Palmer and Piecyk, 2010 https://bit.ly/3cL5lYh 20-75% CO2 reductions in constraints: sychronisation of production and logistics urban areas noise disturbance Source: Sanchez- Diaz et al 2017 misalignment of stakeholder objectives https://bit.ly/3gsLe3m
Increasing awareness and understanding of efficiency / sustainability interventions https://bit.ly/35p4d8A https://bit.ly/2TDZWeY
https://bit.ly/2TDZWeY
Professor Alan McKinnon Kühne Logistics University – the KLU Wissenschaftliche Hochschule für Logistik und Unternehmensführung Grosser Grasbrook 17 20457 Hamburg tel.: +49 40 328707-271 fax: +49 40 328707-109 e-mail: Alan.McKinnon@the-klu.org website: www.the-klu.org www.alanmckinnon.co.uk @alancmckinnon https://bit.ly/34hp5Pl
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