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Tag: Transport

European road transport prices break new records

Posted on by David Priestman

Inflation, weakening demand, social instability and the war in Ukraine are leading to tumultuous developments in road freight prices, reveals the Ti / Upply / IRU Road Freight Rate Benchmark for Q2 2022. For the first time, this edition offers a separate analysis of the evolution of spot and contract rates.

  • The European contract road freight rate index reaches an all-time high of 121 points in Q2 2022, up 6.1 points quarter-on-quarter and 13.1 points year-on-year.
  • The European spot road freight rate index also reached a record high of 134 points, up 11.8 points from Q1 2022 and 20.1 points from Q2 2021.
  • Inflation is rising in all European countries and reached a record high of 8.6% in the Eurozone in June, weighing on costs and demand.
  • While diesel prices have varied by country since prices have remained elevated in July and are 69% above the January level.

The European Road Freight Rates Benchmark, produced by Transport Intelligence, Upply and IRU, analyses European road freight rates and market outlooks on a quarterly basis, to inform the decisions of shippers, transport providers and hauliers.

For the first time since the beginning of the report, Ti, Upply and IRU are able to offer a differentiated analysis of spot and contract rates in this edition covering Q2 2022.

  • War in Ukraine: Following the invasion of Ukraine, in March, the EU-27 pre-tax diesel price jumped 69% from its January level.
  • Demand weakening: Multiple indicators point to a weakening demand for European road freight, with declining activity in all major economies and inflation rates weighing on consumer and business confidence.
  • Rising inflation: Inflation is rising in all European countries and reached a record high of 8.6% in the Eurozone in June. According to the latest data, Spain is experiencing the highest increase with a price rise of +10.2%, higher than the other major European economies of Germany (7.9%), France (5.8%), Italy (8%) and the UK (9.1%).
  • Driver shortage: The shortage affects the entire European continent. Germany is in a particularly critical situation with an estimated shortage of 50,000 to 80,000 truck drivers. Migrant workers account for 24% of the German driver workforce and the loss of Ukrainian citizens returning to defend their country has further restricted the supply of drivers in Germany.
  • France/Spain: This corridor has seen very significant increases in spot rates. In particular, the increase reached 21.2% quarter-on-quarter in the Paris-Madrid direction. This is almost twice the average increase in European spot rates and is also the second highest increase of all European spot rates.
  • Germany/Poland: All rates, with the exception of spot rates from Duisburg to Warsaw, have reached new historical highs on this route after having followed an upward trend since the beginning of the pandemic. Contrary to the relationship observed on most European routes, spot rates on this route increased more slowly than contract rates. Demand has been affected in particular by the weakening of the industry in Germany and Poland. The instability created by the conflict in Ukraine is particularly noticeable in this part of Europe and also affects the development of industrial prospects.
  • France / Great Britain: Following the Brexit, transport operations between France and Great Britain have become more expensive and longer. Researchers at the London School of Economics (LSE) have found that while exports have largely recovered, British imports from the EU have fallen by 25% compared to other destinations. In addition, the variety of goods traded fell by 30%. Low value goods were the most affected by the increase in administrative costs.

Thomas Larrieu, Chief Executive Officer at Upply, comments: “The lull in European demand should slow the upward pressure on road freight rates. On the other hand, hauliers are still facing significant cost increases (fuel, labour, etc.), so rates are likely to remain at high levels in the coming months.”

Nathaniel Donaldson, Economic Analyst at Ti said: “The effect of rising costs in 2022 is now very evident with road freight rates across the European continent reaching new all-time highs. Initial fuel price rises following the invasion of Ukraine have held and produced a much more costly environment for European road carriers whilst industrial action and a worsening driver shortage keep capacity tight. A range of indicators are pointing towards a drastic slowdown in consumption and production which will ease further increases while high costs keep rates elevated.”

CLICK HERE to download a copy of the full benchmark report.

Decathlon partners with Zeus Labs to handle UK freight

Posted on by David Priestman

Zeus Labs, which is disrupting the freight industry with its next-generation digital solutions, has teamed up with the world’s largest sports retailer Decathlon to help handle its UK freight. The partnership means that Zeus now handles nearly half of all the retailer’s restocking in the UK.

Established in Lille, France in 1976, Decathlon opened its first UK store at Surrey Quays in 1999, and now has 70 sites across the UK with plans to open hundreds more over the next decade.

The partnership comes after Zeus has undergone phenomenal growth since its founding in 2019 by young entrepreneurs Jai Kanwar and Clemente Theotokis. The firm now serves more than 40 enterprise-level clients handling over 660,000 tonnes of cargo annually, worth circa £6bn.

Zeus has also experienced a 100% conversion rate from manufacturers who trialled their platform in 2021, which offers a near ‘zero-touch’ approach to managing road freight, with complete end-to-end tracking, reconciliation and system integrations.

The platform reduces road freight administration for both shippers and hauliers, while helping small-medium fleets grow quickly with fast payment terms.

It also features a generous loyalty programme that includes 50% discounts on premium truck tyres – which amounts to a potential saving of more than several thousand pounds a year to small fleets.

Zeus, which aims to reduce the industry average of 30% of trucks running empty to just 5% by 2025, achieved a 326% growth in total volume in 2021, and is on track to deliver a 400% growth in revenues by the end of 2022.

Zeus Labs Co-Founder Jai Kanwar said: “The addition of major brands like Decathlon is a testament to the great benefits we are bringing to the logistics sector. Our easy-to-use platform is not only helping companies streamline their supply chain but also help move the industry towards better sustainability by reducing the number of empty HGVs on UK roads. Every manufacturer that trialled Zeus in 2021 has awarded business to us this year, showing just how effective our service is in modernising road freight management.”

 

RailFreight Summit celebrates 5th anniversary in Warsaw

Posted on by Keith McKinley

The annual RailFreight Summit is ready to celebrate its 5th anniversary. The lustrum edition takes place on 7 & 8 September in Warsaw, a year after a record-breaking edition with 250 attendees. This year is set to break new records, bring the rail freight industry closer, and tackle critical topics.

A little more than a month is left until the rail freight industry gathers again in Poland. This year’s topic, ‘Moving to a new reality’, reflects the situation in which the rail freight industry and Poland have found themselves in the past few months. In a short period, the role of Poland in the international rail freight market changed completely. Whereas it used to be the gateway to Europe for traffic from Asia with the most heavily consumed border crossing on the New Silk Road, it needs to reinvent itself today due to the war in Ukraine. This new reality is at the heart of the discussion at the RailFreight Summit 2022.

The 5th anniversary edition of the RailFreight Summit will have everything: site tour to terminal and inauguration of new facilities, expert presentations and panel discussions on the new role of Poland and the CEE region in logistics, infrastructure and technology issues and possibilities, the future of Ukraine, the role of the Baltics and the New Silk Road dynamics are some of the things that attendees will have the chance to follow.

On top of that, the networking drinks and dinner will also be a central part of the two-day event aiming to bring old and new friends together and provide space to rail professionals for one-on-one meetings, networking and new business opportunities.

Visit the event’s website and first take a look at the programme and speakers. You can also find information about the event’s venue, details on the site tour and why Warsaw is this year’s hosting city, and  who else attends so that you can arrange your meetings in advance.

CLICK HERE to register for the event.

M&S acquires Gist

Posted on by David Priestman

Marks and Spencer Group plc has announced it is to acquire Gist Limited, the principal contract logistics provider to M&S Food, from Storeshield Limited, a subsidiary of The BOC Group Limited.

M&S Food says it has restored an industry-leading position in volume growth over the past four years, developed bigger stores and entered new channels through the investment in Ocado Retail and through franchise partnerships, including over 2,500 Costa stores. However, there is a substantial opportunity to create a more efficient and effective supply chain through investment in the network to reduce the cost to serve, update legacy systems and improve automation.

Gist provides the majority of M&S Food logistics services via a network of eight primary and 10 secondary distribution centres located across the UK and the Republic of Ireland, including a number of freehold warehouses. The existing arrangement has a higher cost legacy contract which expires in 2027. The acquisition will generate immediate benefits to M&S through the elimination of contractual fees and costs and the implementation of aligned operational processes. Through acquiring Gist, M&S can also take control of and invest in the network, building on the successful implementation of its “Vangarde” supply chain optimisation programme.

Under the transaction, M&S is acquiring the entire share capital of Gist for an initial consideration of £145m in cash. A further amount of £85m plus interest will be payable in cash from the proceeds of the intended onward disposal of freehold properties or, at the latest, on the third anniversary of completion. An additional profit share from the disposal proceeds of up to £25m plus interest will be payable under certain conditions. M&S has the ability to retain the freehold properties should it wish to do so in which case the full amount of £110m plus interest will be payable.

The Gist business being acquired generated a proforma EBITDA of c.£55m in the year ended December 2021, with the majority of profit reflecting management fees recharged to M&S under contractual arrangements, which will be eliminated upon consolidation to M&S. The transaction is expected to be earnings enhancing in its first full year and will be funded through existing cash reserves.

Stuart Machin, M&S Chief Executive, said: “M&S has been tied to a higher cost legacy contract, limiting both our incentive to invest and our growth. The last two years have shown what can be achieved by working collaboratively alongside our partners at Gist. This has given me confidence that now is the time to take action and remove an impediment to our growth. We have therefore acted decisively to acquire Gist, taking control of our Food supply chain for the first time in our history. This is the first step in a multi-year plan which will transform the entire supply chain.”

Gist also provides a limited number of logistics services for third parties, as well as freight forwarding for BOC. Its food service division will remain with BOC post-completion, with appropriate transitional service agreements in place to ensure business continuity. Gist has approximately 5,800 employees, led by an experienced management team, including CEO Michael Chambers who will continue to lead the business and report to the Commercial Director of M&S Food.

 

GRYN launches global carbon footprint calculator

Posted on by Keith McKinley

Calculating the carbon footprint of supply chains is for instance in the EU a legal requirement from 2023. The problem: manufacturers, suppliers, freight forwarders and other service providers involved have no or insufficient insight into the associated data. GRYN provides transparency here with its open platform based on artificial intelligence. GRYN is launching a network that allows all players in the logistics market to analyse the CO2 emissions for which they are responsible.

GRYN offers a one-stop solution that is open to all sides. In the network, manufacturers and shippers, shipping companies, airlines, parcel service providers and other partners can link their parameters via interfaces (APIs). With its AI platform, GRYN generates high-quality supply chain and sustainability data from this and provides reportings. This way, suppliers and carriers finally gain insight into the data and automated data management. Thanks to global benchmarks and suggestions for improvement, companies can systematically reduce their CO2 emissions.

The EU regulation, which will be in place from 2023, applies to companies with 250 or more employees and thus to 55,000 companies. The regulations and the GRYN solution come up against a highly fragmented and inefficient €350bn market with structural deficits; especially technologically:

The top five haulers in the EU (road) represent less than 5% of the market

  • 50% of trucks drive half-empty (EU)
  • 33% of truck journeys take place empty (EU)
  • 400,000 companies registered in the EU own only ten or fewer trucks

GRYN founder and CEO Oliver Ritzmann (pictured) has been active in the logistics sector for a long time. Sustainability is close to his heart. Within the competition, he sees GRYN in pole position. On the start in the European market, he says: “We connect manufacturers and suppliers with forwarders and service providers in a unique technology. We see strong market opportunities in this, especially since the growth potential is enormous. Our goal is to become the world’s largest network for sustainable logistics.

“Something has to happen! After all, worldwide freight transport accounts for 8% of global CO2 emissions, and including logistics locations, the figure is as high as 11%. At the same time, transport demand is set to triple, which would double emissions by 2050. To ensure that this does not happen, GRYN offers its platform. With our automatic reports, the data and suggestions for improvement, forwarders and carriers become more efficient. Suppliers can thus digitally map the entire value chain. This not only reduces their CO2 emissions, but also makes them more competitive.”

GRYN is now launching its platform – and thus tackling the “proof of concept”. This PoC- phase is supported by two leading global companies. The goal is to welcome more than 6,000 members to gryn.ai by the end of the year. Large logistics companies that want to directly share emissions with all customers via gryn.ai to automate reporting are already on board for the launch of the platform.

Through GRYN Community data, GRYN will use artificial intelligence to anonymously aggregate GRYN Members in the next phase to achieve consolidation effects through network optimisation. Through mode switching, for example from road to rail, or load optimisation, CO2 can be saved to a considerable extent.

In addition, GRYN ZERO will be launched in late summer of this year to give all transport service providers and shippers the opportunity to offer CO2-neutral transports through offsetting. Here, too, GRYN is building on an innovative certificate chain and a carbon pricing standard in logistics.

First Hydrogen agrees UK fleet trials

Posted on by David Priestman

First Hydrogen, the developer of zero emissions vehicles and green hydrogen production, is collaborating with the AHFC (the UK Aggregated Hydrogen Freight Consortium). The announcement coincides with confirmation that First Hydrogen’s two demonstrator hydrogen-powered light commercial vehicles (LCV) are on schedule for testing and on-road commissioning starting in late July 2022  in the UK.

The commissioning integrates First Hydrogen’s two MAN eTGE vehicles with the First Hydrogen FCE1 fuel cell propulsion system. The vehicles are expected to be delivered in Q4 this year ready for potential customer real-world usage trials in early 2023.

Managed by Element Energy, the AHFC is a partnership between leading hydrogen industry and mobility companies, including Air Products, Anglo American, Hyundai, Toyota and BOC. The consortium works together with large UK fleet operators to accelerate the commercial roll out of fuel cell vans and trucks and hydrogen refuelling infrastructure.

So far, 10 fleet operators have expressed interest in trialling First Hydrogen’s vehicles in their real-world operations, to experience the range and operational flexibility benefits hydrogen offers. These fleets comprise major operators from industries, including telecoms, express delivery, national utilities and national infrastructure companies; a national UK supermarket chain; a national vehicle breakdown and recovery association; an ambulance fleet; and a national fleet leasing group. The fleet trials will operate across multiple UK locations from West London, Birmingham and Sheffield, to Tees Valley and Aberdeen.

First Hydrogen and Element Energy expect to release more details on the AHFC van programme later this year.

Steve Gill, CEO of First Hydrogen Automotive, says: “Our proposal has received quite a response. We are excited to work with Element Energy and to bring our technology directly to fleet companies, demonstrating the benefits of fuel cell powered light commercial vehicles. It is a great opportunity for us to generate customer interest in our vehicles and gain first-hand customer and driver feedback to contribute to our bespoke vehicle development programme.”

William Darby, Principal Consultant, Element Energy, stated: “After hearing about the First Hydrogen van product, we knew this would spark a lot of interest from our van operator group. We are looking forward to working with First Hydrogen to ensure the trial meets the needs of each operator, whilst also providing First Hydrogen with the information and support it needs to continue developing the product.”

 

Used pallet demand soars as supply chains cut costs

Posted on by David Priestman

The used wooden pallet industry is reporting a large uplift in enquiries from supply chain users, as the prices of inputs including raw materials and transport have increased.

According to members of the National Association of Pallet Distributors (NAPD), demand has risen to “unparalleled levels” – up to 70% higher and from further afield than usual – as businesses seek to reduce costs of manufacturing, packaging, and delivery of goods.

Saleh Hijazi, press officer for NAPD, said: “The used wooden pallet business is experiencing heavy growth in demand from existing and new customers. This is being driven by a shortage of pallets and pallet timber in Western Europe, particularly in the Benelux region, diverting reused pallets and pushing prices up here in the UK. This has been further compounded by severe inflation in energy, transport, and other input costs.

“Reuse is helping to ease these issues – and is a central part of the circular economy, too. Wooden pallets are one of the most sustainable parts of a supply chain already, and repair and reuse of these has an increasingly important part to play in helping businesses fulfil their environmental obligations.

“While this challenging period continues, we are advising our customers that forward planning is more important than ever and we are working closely with them to fulfil the increases in orders.”

 

UPS expands sustainable operations in Europe

Posted on by Keith McKinley

As the logistics industry looks to operate more sustainably amid increasing demand from e-commerce, UPS is electrifying its ground fleet, using cleaner fuels and powering facilities with renewable energy. A new development is the use of duo-trailers in Spain that operate between Madrid and Barcelona five days a week.

These duo-trailers, operated and owned by Grupo Carrasco, feature two full-sized trailers pulled by a single truck. This combination emits less carbon per kilometer than if two vehicles were travelling individually, lowering the carbon intensity per package. Current records show it can reduce CO2 emissions by more than 30% per road journey.

“We are committed to delivering more while reducing the carbon intensity of our operations,” said Daniel Carrera, UPS Europe president. “These duo trailers demonstrate how we are relentlessly innovating and collaborating to create efficiencies in our network and build a sustainable future for our customers and the communities where we live and work.”

UPS has already deployed EcoCombi of a similar design in six countries within its European network. “EcoCombis” are currently permitted in 18 countries worldwide, yet they are a vital part of UPS’s goal to shrink its carbon footprint while increasing efficiency. Eco-trucks carry larger loads and reduce CO2 emissions by consuming less fuel. The new duo trailer design represents the next step in this evolution by connecting two full-sized trailers.

Delivering more with less environmental impact: With a global footprint and customers in more than 220 countries and territories, UPS sees how climate change, air quality and other socioeconomic challenges intersect, and has set a clear roadmap to reach carbon neutrality by 2050. This includes:

40% alternative fuel in ground operations by 2025

25% renewable electricity in facilities by 2025

As part of its rolling laboratory approach UPS has deployed more than 13,000 low-emission and alternative-fuel vehicles around the world and is always exploring ways to reduce carbon in its ground fleet.

 

Digital technology helps mitigate climate change risk

Posted on by Keith McKinley

Twenty-seven percent of supply chain leaders have conducted a climate change risk assessment to identify their most critical supply chain risks, according to a survey by Gartner, Inc. The survey among 320 supply chain leaders in December 2021 and January 2022 found that 18% of respondents have conducted both risk assessments and scenario planning (see Figure 1).

“The effects of climate change are hard to predict, but it is possible to model the risks and opportunities that might occur,” said Heather Wheatley, senior director analyst with the Gartner Supply Chain practice. “Chief supply chain officers (CSCOs) regularly assess various risks and opportunities as part of normal business – this must be done for climate change as well.”

Figure 1: How Organisations Assess Exposure to Climate Change Risk

According to the survey, 44% of respondents have a general sense of potential climate change risks based on previous events. This means they understand that climate change risks are materialising, but those risks are not methodically identified or quantified. However, the past is not a good predictor of future climate change events, as the severity and impact of events will escalate.

“Scenario planning is a crucial part of the process, as it highlights key elements of a possible future and helps draw attention to the key factors that will drive future developments. For example, in a future that includes raw material scarcity and trade uncertainty, organisations that rely on more resilient inputs such as drought resistant crops can gain a competitive advantage,” Wheatley said.

Lack of Foresight is Biggest Challenge

Climate adaptation must be included in investment decisions. For example, if building a new manufacturing plant, design considerations should be made for future climate change threats such as heat waves or water shortages. However, the need for financial investment can deter action. The top barriers to planning for climate change in the supply chain include a focus on short-term decision making (57%) and an inability to link the cause and investment to benefits (57%).

“Investments in climate adaptation require a certain level of foresight. An increasingly popular tool is the shadow carbon price, which applies a notional cost to greenhouse gas emissions, effectively translating a future risk into a present-day operational cost that attracts the attention of business leaders,” Wheatley said.

Technology Use Still in Infancy Stages

Only 19% of surveyed companies are using digital technology to help understand climate change risks. Of those organisations that are using technology, 85% are utilising predictive analysis. Examples of tools that could be used include geospatial analysis, drones and artificial intelligence (AI) capabilities such as ecological simulations. Many organisations are also partnering with external consultants to help model scenarios.

“For those organisations that are not using digital technology, it is unclear what information is being used to help model scenarios and to identify and assess risks. CSCOs should ensure that this blind spot is not overlooked,” Wheatley concluded.

 

Logistics Hall of Fame Council meets in Berlin

Posted on by Keith McKinley

The finalists for this year´s induction into the international Logistics Hall of Fame have been selected. On July 7th, the Logistics Hall of Fame Council nominated six personalities at the Federal Ministry for Digital and Transport. Three candidates reached the final for the “TRATON Logistics Leader of the Year” award. In the run-up, 24 valid proposals from all over the world had been received by the award organisation. The lists of candidates for both awards are traditionally secret and are not published.

The members of the Logistics Hall of Fame Council 2022 are: Dr. Atif Askar (Head of Business Development, Strategy and M&A, TRATON SE), Marten Bosselmann (Chairman Bundesverband Paket & Expresslogistik (BIEK) e.V.), Prof. Dr. Julia Hartmann (Professor for Sustainability Management, EBS University for Business and Law), Oliver Luksic MdB (Parliamentary State Secretary to the Federal Minister for Digital and Transport), Dr. Michael Niedenthal (Head of Department, traffic policy, Verband der Automobilindustrie (VDA) e.V.), Matthias Rathmann (Editor-in-Chief trans aktuell), Sascha Schmel (Managing Director of the Association for Materials Handling and Intralogistics in the VDMA), Dr. Martin Schwemmer (Managing Director, Bundesvereinigung Logistik (BVL) e.V.) and Anita Würmser (Jury Chairwoman of the Logistics Hall of Fame).

Matthias Klug, Senior Director Brand Differentiation KION Industrial Trucks & Services EMA (KION IST EMEA), has assumed the office of election commissioner in 2022.

For the Logistics Hall of Fame, the next phase of the selection process will now begin: Who will enter the Hall of Fame as a new member and who will be awarded “TRATON Logistics Leader of the Year” will be decided in the coming weeks by the jury, which is made up of around 70 internationally renowned sector experts from business, media and politics, including Logistics Business News Editor Peter MacLeod.

The Logistics Hall of Fame documents the major milestones in logistics. The decisive factor for induction is that his or her work has made a significant and lasting contribution to the advancement of logistics beyond the boundaries of the company itself. To date, 37 men and women have been inducted to the Hall of Fame.

The “TRATON Logistics Leader of the Year” is awarded to the pacesetters and future leaders in the logistics industry. The focus is on topicality and the benefits for the own company as well as innovative strength, sustainability and corporate change. The award is given by the Logistics Hall of Fame and donated by TRATON SE.

Both awards will be presented at the annual gala reception.

The Logistics Hall of Fame was founded in 2003 and honours leading figures who have made outstanding efforts to promote the further development of logistics and supply chain management. This eternal pantheon is also designed to remind future generations of the achievements of these individuals in the service of logistics. The aim of the Logistics Hall of Fame is to act as a worldwide platform to publicise the performance capability of logistics and its importance for society. The Logistics Hall of Fame is a non-profit initiative supported by the world of politics, associations, the logistics industry and logistics science. The patron is Dr. Volker Wissing, German Federal Minister for Digital and Transport.

CAPTION (left to right): Matthias Rathmann, Dr. Martin Schwemmer, Anita Würmser, Sascha Schmel, Oliver Luksic, Marten Bosselmann, Dr. Atif Askar, Dr. Michael Niedenthal and Prof. Dr. Julia Hartmann.

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