BY OUR CONTRIBUTING PARTNER ZARAGOZA LOGISTICS CENTER (ZLC)
The European Union’s (EU) rich mix of cultures and working practices is one of its strengths. But in intermodal transportation these differences can impede future growth. One of the main goals of an EU-backed project called SMART-RAIL is to remove attitudinal and other barriers that prevent more freight from switching to intermodal in Europe.
SMART-RAIL involves 19 organizations and aims to improve European freight logistics services by meeting customer needs in five critical areas: reliability, flexibility, lead time, cost, and visibility. Promoting the use of intermodal services is a key element of this overarching goal.
After declining in 2009 owing to the global financial crisis, intermodal cargo volumes in Europe have grown steadily and reached 20.8 million twenty foot equivalent units or TEUs in 2013. Today, intermodal is expected to maintain an average annual growth rate of about four percent.
Road remains the predominant mode of transportation in intermodal moves, but rail is catching up. In fact, rail intermodal freight is growing faster than pure rail transportation in the EU. Rail has a much smaller carbon footprint than road, but lacks the flexibility of truck transportation. Combining the two – and adding barge transportation where possible – meets sustainability goals for freight networks while offering the operational flexibility that shippers need.
But first, shippers, carriers, and third-party logistics providers (3PLs) in Europe have to be willing to consider intermodal when planning the movement of freight. All too often this option is ignored by these stakeholders – even when products are suited to multimodal transportation and the requisite services are available.
“One of the problems is a lack of awareness about logistics networks in other European countries,” says Susana Val, Associate Research Professor, Transport Research Manager, Zaragoza Logistics Center (ZLC), Zaragoza, Spain. ZLC is leading the supply chain management work package in the SMART-RAIL project.
Stakeholders in, say, Spain, might have little knowledge of the freight needs of stakeholders in, say, Germany, and vice-versa. “This makes the sharing of information very difficult,” she says. Securing backhaul cargoes – an important element of efficient intermodal networks – is extremely difficult when trading partners operate independently in this fashion.
Different national regulations and equipment specs also separate freight interests across the EU. In addition, there is often little awareness of how logistics decisions in one part of a freight network can impact operations in another part, especially where cross-border moves are involved. The lack of end-to-end visibility masks how disruptions ripple through supply chains.
Stakeholders’ tunnel vision is compounded by a silo mentality. “The parties are often not willing to relinquish control of their part of the supply chain,” says Val. “For example, carriers might regard other transportation modes as competitors and be unwilling to share information.”
Yet efficient intermodal transportation relies on the close integration of component modes.
The SMART-RAIL team led by ZLC is looking at ways to overcome these barriers and support the growth of intermodal cargo volumes. Optimizing the use of intermodal networks is called synchromodality.
“We are exploring opportunities for intermodal services and ways to build cooperation across these networks. By establishing common goals and approaches, we can build a powerful business case for intermodal,” Val explains.
One of the mechanisms for breaking down perceptual and operational walls is a Control Tower (CT). The team is developing a CT with 3PL Seacon Logistics. Seacon divisions in the Netherlands and Italy are part of the project consortium.
The CT functions as a real-time information hub that brings trading partners together and improves the monitoring of freight flows. Achieving better supply chain visibility also “gives us insights into disruptions that we can use to plan mitigating actions such as re-routing shipments when necessary,” Val says.
The researchers have generated a preliminary list of key performance indicators (KPIs) that are part of the CT design, and also relate directly to the concept of synchromodality.
These KPIs are:
- Pickup performance.
- Delivery performance.
- Lead time.
- Transit time.
- On-time departure/arrival.
- Un/loading performance.
- Train service availability.
- Visibility of the service.
- Tracking and tracing.
The ZLC-led team is also working to raise awareness levels among groups of freight interests in EU countries. This effort includes disseminating information about freight networks – a database of stakeholders has been created – and intermodal opportunities, and promoting working relationships between potential trading partners.
SMART-RAIL is a three-year project that is scheduled to run until April 2018. The intermodal team is currently looking at the bottlenecks that impede freight flows. “We are also consulting with stakeholders to align them along common goals and create cooperative business models along the supply chain,” Val says.
As she emphasizes, improving intermodal transportation will deliver multiple benefits. There is huge potential for cutting transportation costs, improving the reliability and robustness of services, and shrinking the carbon footprint of logistics operations – a major goal in the region. New analytical capabilities will shed more light on how intermodal can be deployed in Europe.
There are intangible benefits too, notably greater collaboration between stakeholder groups across the EU, and a mindset that is much more amenable to developing new freight transportation solutions.