By our Contributing Partner Zaragoza Logistics Center (ZLC)
The European Smart-Rail project launched this May with nearly 6 million Euros (around $7 million) of funding from the European Commission (EC), aims to make the mode a better option for commercial freight in Europe.
Nineteen organizations are participating in the project, which has an overarching goal of improving freight logistics rail services from the point of view of the shipper in five key areas of performance: reliability, delivery time, cost, flexibility, and visibility. The project is divided into work packages that are coordinated by the Netherlands Organization for Applied Scientific Research (TNO).
The work package related to supply chain management is led by the Zaragoza Logistics Center (ZLC), Zaragoza, Spain, which brings its wide-ranging supply chain expertise to the project.
Traditionally, rail transportation in Europe has tended to favor passenger travel. “But the EC is now concerned about the movement of freight and how it can coexist with passenger transportation,” says Susana Val, Associate Professor and Manager of the ZLC Transport Department.
The volume of freight transported by rail has a bigger impact in statistical terms than the number of passengers carried. According to Eurostat, in 2012 (the last year that information on the EU28 countries was collected) the modal split related to freight was: 75.1% road, 18.2% railway, and 6.7% inland waterways. For the same year, the modal split for passengers was 83.3% for cars, 9.2% for motor coaches, buses and trolley buses, and 7.4% for trains.
A challenge that needs to be addressed is how rail freight services can develop a new, service-oriented profile based on excellent on-time delivery performance at competitive prices. The mode must also find ways to interweave rail operations with other forms of transportation, meet the needs of shipper customers more effectively, and create innovative value-added services.
Although there are different operating models in Europe – some rail systems are privatized while others are run by government, for example – this should not impede the project, Val maintains. The idea is to improve services in certain corridors for enterprises that are current and potential users of rail transportation, regardless of the model of ownership. Also, many service providers already operate across Europe.
The Smart-Rail project will focus on increasing productivity by addressing current operational and system weaknesses and limitations, including interoperability issues, and finding cost-effective solutions to these problems. The team also aims to make the European rail system more supply chain oriented with new business models and ways to exchange information that are designed around the needs of shippers.
These general objectives will be translated into specific operational goals. Examples include achieving a 98% on-time delivery rate, attracting a broader range of cargoes to the mode, improving intermodal services, and the development of a decision support tool that helps the supply chain community to improve the productivity of rail transportation.
“In the case of the 98% on-time shipment goal, we will look at the control tower concept that places the shipper at the top of the pyramid, and provides stakeholders with better information on capacity that they can use to improve their planning processes,” explains Val.
The work to develop a decision support tool will draw on the experience gained by ZLC in a previous project called FUTUREMED. This project was designed to make European ports more competitive by improving their communications with stakeholders in the hinterland. To achieve this, the participants created an IT platform for the sharing of information that improved supply chain visibility and eliminated manual, paper-based communications. “We are currently talking with IT companies that are interested in commercializing the platform,” says Val.
This interoperability platform improves the efficiency and visibility of intermodal seaport-hinterland containerized transport corridors on transnational maritime door-to-door transport chains. It also makes possible the integration of port systems with inland logistic infrastructures. This improvement in integration involves not only terminal operators at seaport and inland facilities, but also all related stakeholders in intermodal corridors such as railway operators, shippers, railway undertakings, maritime agents, freight forwarders, truck companies and customs.
The Smart-Rail initiative will take a similar approach, and, it is hoped, deliver the same kinds of benefits. For example, FUTUREMED provided accurate and up-to-date information on intermodal corridors and their inland hub networks, which led to improvements in supply chain visibility and traceability. The project raised operational efficiency through superior planning systems and management resources. Waiting times for trains and trucks were reduced, improving both service levels and customer perceptions of services. FUTUREMED also reduced costs and increased the economic benefits of intermodal transport chains.
The Smart-Rail partners are currently defining the problems they want to focus on and reviewing past and current initiatives in Europe that might provide useful input. “We are looking for best practices and solutions and talking to project leaders to help us refine our vision,” says Val. The project is due for completion in 2018.
For more information on the European Smart-Rail project contact Susana Val at firstname.lastname@example.org.
Article published by MIT Supply Chain Frontiers issue #58
Editor: Ken Cottrill