Issue Date: 15 May 2012
Ref: JIG12/02
SIMPLER, SUSTAINABLE NETWORKS REDUCE ROAD MILES
Increased fuel costs and continued focus on sustainability issues have led transport and distribution companies to reassess their operations to reduce road miles. Significant savings and other sustainability benefits are available to food and beverage transport specialists who can get it right. A new breed of transport management service provider, exemplified by Jigsaw, is meeting the challenges presented by these issues.
Road transport supports a significant part of the economy. Around 83% of all goods, by tonnage, are transported by road while HGVs account for around 20% of domestic greenhouse gas emissions. The food industry alone accounts for about 25% of all HGV vehicle miles, according to Defra, and by some estimates food travels 19 billion miles each year on our roads. Yet while the annual amount of food moved in the UK by HGV has increased by almost a quarter since 1978 the average distance for each trip has increased by half. This suggests supply chain distances are longer which implies there is plenty of scope to reduce mileages.
The industry is taking a lead on the business and sustainability imperative. Progress is already being made and the Institute of Grocery Distribution (IGD) says the sector reduced road miles by around 204 million since 2007, equivalent to 3500 fewer vehicles on the roads. The British Retail Consortium reports that CO2 emissions from store deliveries were reduced by 23% between 2005 and 2011. Absolute emissions were reduced by 7%.
Organisations such as the IGD through its ECR Efficient Consumer Response programme are promoting sustainability across the supply chain. The Food Industry Sustainability Strategy (FISS) suggests that better use of technology could reduce environmental transport costs by around 2.3%. A number of retailers have joined the Freight Transport Association’s Logistics Carbon Reduction Scheme which aims to reduce carbon emissions through improved recording and reporting.
To meet these challenges many food and beverage transport specialists have adopted fuel efficient vehicles and aerodynamic trailers. These are important but only offer incremental improvements in fuel economy and on their own do nothing to reduce road miles. The same is true when switching to electric and hybrid vehicles. For more significant benefits operators need to think radically about the way they plan and use their fleets.
As an example, Indesit, one of the UK’s leading white goods manufacturers, recently introduced double-decker trailers into its distribution operation in partnership with Jigsaw. The company expects to save 340,000 road miles each year as a result. Another example is retailer Asda which introduced double-decker trailers into its ambient operations in 2010 as part of its “Fewer, Friendlier Miles” programme. The trailers accommodate around 70% more load than conventional units and, after adapting infrastructure at its distribution centres and changing delivery processes, Asda saved 3.6 million road miles a year and cut carbon emissions by 40%. Other benefits included reduced congestion at stores. It is clear that the numbers can stack up very quickly.
Any efficient distribution network will be designed around a finely balanced combination of warehousing, routes and processes. In the past these networks perhaps adapted to ensure high fulfilment and delivery success rates. These are now a given and the focus has shifted to better sustainability, enhanced flexibility and reduced costs. All of this has to be achieved without compromising overall service quality.
Established food and beverage transport specialists such as Jigsaw have created networks with regional hauliers and distribution specialists to offer national services to major producers and retailers. In this model the management of the network and transport go hand-in-hand. The benefit for the customer, whether producer or retailer, is a seamless service with a single point of contact which can often be more flexible and scalable than the facilities offered by a conventional national distribution company. Services like these separate transport from warehousing, to a certain extent, to maximise the efficiency of each. In doing so they enable the flexibility demanded by customers to support changing business patterns, seasonal fluctuations and new markets. Value is added through management innovation, commitment to higher service levels and providing an improved and seamless interface between the various supply chain partners.
Across the industry food and beverage transport specialists are redesigning their networks. Greater use of technology to support more efficient load and route planning, for example, promotes more efficient use of vehicles and fewer road miles. Similar techniques are reducing the number of vehicles on the road with partially filled or empty trailers and by ensuring available capacity can be utilised in “return journeys”. Businesses have also relocated warehouses to be nearer to key suppliers, customers or major motorway links. Producers are also more inclined to work in partnership to share transport and distribution infrastructure.
Demand for transport and distribution will continue to increase to support our growing population and the increasingly diversified services required by everyone involved in the supply chain. The industry is rising to the challenge presented by these changes and the improvements that have already been made are only the start of what will no doubt be an ongoing process.