Across the worldwide logistics industry, we are seeing a significant shift in modal use as businesses see the benefits of adopting an intermodal approach, or even shifting their operations entirely from mode to another.
In addition to benefiting the environment, increasing operational efficiency and reliability, this new approach could break down the previously siloed relationships between transport modes and inspire businesses to work together to find the most cost-effective, efficient transport method to the benefit of business and customers alike.
In this article, I will use case studies from FTA members PD Ports, Kerry Logistics, Tarmac and Rail Freight Services to explore the motivations behind this trend and why it is poised to have a significant impact on the logistics sector and health of our planet.
To take advantage of its efficiency in moving heavy loads quickly, particularly through heavily developed areas, use of rail is incentivised by government; this is a key driving factor in the uptake of companies using rail in place of road. For example, the Scottish government recently provided Tarmac, the UK’s largest supplier of construction materials, with a £1.49m ($1.9m) grant to expand rail operations at its Dunbar plant. With obvious benefits to the environment as well as reliable arrival times unaffected by congestion, any business wishing to move freight through sustainable modes, including rail or water, can apply for funding from the Scottish government to ease the transition to new modes of transport.
In London, Tarmac worked in partnership with Rail Freight Services to redesign its readymix concrete depot in Battersea, to remove the need to transport heavy raw materials across the city by road. Through the project, more than 70 FTKs of road movements have been taken off central London’s road network. The site became the first in the UK to use a train-mounted Liebherr Supergrab gantry materials handler, which, as well as being space-efficient, is able to offload a train 20% faster.
As a mode of freight transport that involves minimal human contact, the Covid-19 outbreak is also responsible for a short-term shift to rail. Speaking to RailFreight.com, Dariusz Stefanski, CEO of Polish operator PCC Intermodal, reports that his company saw a 20-25% shift to rail due to the pandemic. And, while road transport did pick up once its borders reopened to road traffic and physical distancing rules were eased, he believes this could spark a more permanent shift to rail for business, as well as environmental benefit.
The diversification of PD Ports – one of the UK’s major port groups – into rail, to transport cargo, has taken approximately 12,000 HGVs off the road, saving around 4.6 million miles and reducing CO2 emissions drastically.
Introduced in October 2018, PD Ports’ second service to Scotland – the Teesport Express – combines rail and ferry services to replace a withdrawn ferry service from Rosyth to Zeebrugge, decommissioned that April. Fully functional in only six months, the new service runs daily, whether the train is full or not, to give customers full confidence of delivery. PD Ports worked closely with partner P&O Ferries to achieve a seven-hour turnaround from ferry arrival to train departure to ensure customers’ needs are met.
In the view of FTA, the future of rail freight lies in electrification of the railway; electric freight trains produce 60% less carbon emissions than diesel trains. Electric freight trains are an established technology already in use on key stretches of railway; around 10% of rail freight is electrically hauled, principally on the West Coast Main Line. While additional support may be needed for the implementation of rolling stock, electric freight trains could be implemented to deliver significant carbon savings in just a few years.
With the promise of increased speed and efficiency, logistics businesses are also shifting traditional ocean-road cargo operations to rail, following the establishment of new, long-distance rail services. For example, Kerry Logistics, Asia’s premier logistics service provider, expanded its freight capability from China and South Asia with an intermodal service from Lanzhou, China, to Islamabad, Pakistan. The first journey along this route was completed in 13 days, 15 fewer than conventional ocean-road freight, and 10 block container trains now make the journey each month, with an average of 60 teu per train. And, following its establishment of the first westbound charter freight rail service from China to Spain, Kerry Logistics has strengthened its investment in freight links on the Belt and Road routes, with a commitment to develop a dry port in Laos, linking railways between China and Thailand.
Additional services have been introduced on the intermodal freight train from China through Kazakhstan to the Caucus and Turkey, as well as services from multiple regions to Pakistan and beyond.
With clear benefits to speed, cost-efficiency and the environment, more and more companies are adopting an intermodal approach to their operations; a development welcomed by FTA to ensure the most cost-effective, reliable transport method is used for the good of business, customers and environment alike.
To support this continued shift to intermodal transport, FTA is calling for certainty over future budgets for the Mode Shift Revenue Support (MSRS) grant scheme; a government initiative to fund the additional operating costs incurred by companies as they move to alternative transport.
FTA is one of the UK’s leading business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With Covid-19, Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. FTA supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, sea and air industries, as well as buyers of freight services, such as retailers and manufacturers, whose businesses depend on the efficient movement of goods. For more information about the organisation and its work, including its ground-breaking research into the impacts of Covid-19 on the whole supply chain, please visit www.fta.co.uk.