Modal shift: the role of rail
Intermodal services to ports and the introduction of rail shuttles are beneficial to both cargo shippers and transport service providers. Kate Royston reviews recent developments
Rail services have an important role to play in the development of hinterland logistics and modal shift. Their success is dependant upon the efficiency and effectiveness of the service experienced by the customer and the many actors involved through the logistics chain. Above all it must be cost effective. The economic crisis has seen some reversals of previous shift as hauliers have competed for business. However this is not expected to last. This article brings together case examples from the Netherlands, UK, Hamburg and Gothenburg and from a cargo owner – Procter and Gamble. The focus is on intermodal freight transport across Europe and the opportunities it can offer.
Intermodal Transport and WPCI
World Ports Climate Initiative (WPCI) have set up a project, led by the Port of Amsterdam, to pursue Intermodal Transport’s potential (see article on p34 of this issue) to improve the sustainability of hinterland distribution.
Key to the team’s work is identifying ways in which Port Authorities might help stimulate modal shift and achieve competitive advantage. One example is through the provision of hinterland rail services and investment in supporting infrastructure such as the Betuwe Line in the Netherlands.
The Betuwe Line.
Waterborne transport accounts for around 50% of freight movements between the Dutch ports and their hinterland. Rail services have a much smaller share, around 5%. This is increasing in importance and forecast to grow.
The capacity and efficiency of existing rail freight services were of some concern. Additional rail freight volumes were expected from Maasvlakte II and there was ongoing conflict with passenger rail services. The Ports of Amsterdam and Rotterdam decided to invest (15% and 35% respectively) with Prorail (50%) in a dedicated high speed rail freight route – The Betuwe Line. This would provide more efficient links from West to East for the growing international container shuttle services and improve the ports competitive position into the European hinterlands. Through modal shift the ports would also achieve air quality benefits.
The Betuwe Line opened in 2007 and is now fully operational. Traffic volumes built to an average 250 trains per week in 2009 and are expected to reach 350 trains per week by the end of 2010, close to full capacity. Growth has come mainly from a shift from the standard route but there have also been gains from traditional haulage companies seeking cost efficiencies where intermodal rail transport is more advantageous.
UK Rail Freight
In the UK, rail freight is promoted by the Rail Freight Group (www.rfg.org.uk) a membership organisation representing the different actors in the logistics chain. Their chairman, Tony Berkeley, stresses that continuing success of rail freight services must come from a holistic view including efficient entry and exit pathways and availability of terminals. These factors can be seen in some of the case examples later in the article.
The Port of Felixstowe owns and operates two rail terminals which support 23% of their container traffic in and out of their hinterland. Reconfiguration of Felixstowe South should enable a further rise to 26% eliminating 500,000 truck movements annually. Their work in encouraging modal shift from road to rail earned them the title of ‘Business of the Year’ in the 2009 Rail Freight Awards.
Associated British Port’s (ABP) Hams Hall Inland Rail Freight Terminal also received an award, for Environmental Innovation. ABP’s continued investment in Hams Hall has seen continued growth and is supporting container traffic from Southampton, Tilbury and Felixstowe among others.
At the IAPH Regional Conference in Hamburg in November 2009 (IAPH Hamburg) Dr Sebastian Jürgens from Hamburger Hafen und Logistik AG (HHLA) underlined the importance of effective hinterland connections as a competitive differentiator between ports in Northern Europe. Hamburg is well positioned, able to provide connections by all modes with rail predominant. Hamburg Port Authority (HPA) has gained significant expertise in development, operation and optimisation of rail services over the years.
This has been an important contributor to the growth of freight volumes at the port and its related rail services.
A critical element to success is the supporting infrastructure. HPA is responsible for Hamburg Port Railway. Its 350 km of track supports 13% of total rail freight volumes in Germany and 70-75% of all containers travel by rail. This increases to 86% for containers to the Czech Republic. Hinterland rail services are pivotal to the Ports operations and the regional and national economy.
An important success factor is achieving an efficient and effective service, cost competitive with other transport modes. This is enabled through ongoing investment in strategic infrastructure to minimise cargo movements and providing economies of scale. A long term programme of re-design, re-engineering and investment continues today and is embodied in the Hamburg Port Railway Master Plan. Key objectives include reducing congestion and increasing port capacity to feed into the hinterland.
Manfred Reuter, Head of International Affairs for HPA, explained at IAPH Hamburg how their expertise is playing an important role in their relationship with their sister port of Dar es Salaam. HPA is working with the Tanzanian Port Authority to improve the effectiveness of the port’s rail infrastructure.
Joint venture to support hinterland traffic
Underscoring the importance of economies of scale and availability of terminal facilities, Eurogate Group and HHLA have just announced a joint venture to develop an inland terminal network in Germany to meet the needs of the country’s seaports. The emphasis will be on full-service hinterland terminals to meet the needs of global transport chains. With much of the German economy dependant upon maritime transport chains the intention is to ‘bring the seaport closer to the customer and industry’. The Port of Gothenburg’s Rail Port Scandinavia (see later) has been developed to achieve similar aims.
Hamburger Hafen und Logistik AG (HHLA)
HHLA provides a range of terminal and logistics services for customers between the overseas port and European hinterland. Around 7.5m TEU were handled in 2008. Hinterland rail services are an important element of their service offer.
A key element of hinterland rail services are block train and container shuttles providing direct connections between the port and an inland hub in the same or neighbouring country. They provide advantages of scale and reliability for transit of traffic between fixed points. Importantly they can provide a bridge opening up new markets.
HHLA Intermodal and its subsidiary companies currently support 266 such services to 7 countries such as the Albatros Express network. This forms part of the extensive services from Hamburg and Bremerhaven into Germany, Austria and Switzerland (see fig 1.). Services have been in place to Poland since 1992 and have developed increasing traffic volumes to and from Poland, the CIS countries, Baltic States and Central Asia.
Opening up the Czech market has proved very successful. A direct train service was established between German ports and Prague with 28 departures per week: one every 6 hours. There was uncertainty as to whether the trains would fill. This was not a problem. With the knowledge that a train would be available whenever a ship unloaded, the service has gained strong market acceptance.
Metrans, the HHLA Company providing service into Prague is continuing to expand its services into Slovakia and Hungary through its hubs in Prague, Ziln and Dunajska Streda; from there providing further links into SE Europe. Dunajska Streda is itself now developing as a logistics and distribution hub for other organisations taking advantage of its growing connections. This case highlights important factors for success including:
• Frequent train services
• Optimising equipment to maximise efficiency
• Eliminating shunting where possible
• Providing a high capacity hub
• Technical innovation Above all, consistency and reliability are vital in linking producers and consumers.
Shunting Yard at Maschen The scale of rail traffic in the Hamburg area is reflected by the shunting yard at Maschen. Owned and operated by DB Schenker Rail it is Europe’s largest, and occupies 300 hectares.
Procter & Gamble’s move to intermodal
Procter & Gamble’s (P&G) consumer products are estimated to “touch the lives of people around the world three billion times a day”. Bringing these products to market in a sustainable manner is a major challenge. With a significant presence across Europe the company are re-thinking their transportation model and believe that the use of rail and intermodal transport has great opportunity. A study identified the potential for intermodal solutions for 80% of P&G’s W. Europe ton-kms. Project TINA (Trains, Intermodal, a New Approach) was established with a goal of achieving 30% rail transport by 2015 from a start position of 5%. A cluster of manufacturing locations in Belgium, the Netherlands and the UK with products to distribute throughout Europe provided an opportunity to look at aggregation of movements and elimination of truck miles. Working together with P&O Ferrymasters a number of routes were established:
• Mechelen-Zeebrugge rail link to the UK. Started in July 2008 the link now supports 4 dedicated P&G trains per day with bi-directional traffic (see fig. 2).
• North to Spain (N-S) link between Dourges and Perpignan started in July 2008. Space is shared on existing trains to provide 2 connections per day
• The first two links eliminated 4.2m truckkms and saved 2,500 tonnes CO2 pa in 2008/2009
• In June 2009 an Italy/Greece link was added. This consolidates freight from 6 different P&G sites in Northern Europe to serve Italy and Greece via a dedicated P&G train. Today P&G are halfway to their target and the initiative has been recognised by the European Intermodal Association. P&G received the ‘Intermodal Award for Best Practices’ for ‘Best integration of intermodalism into a shipper’s logistic chain’ in 2009 (see fig.3).
The Pet Food Train
From its IAMS plant in Coevorden (NL) the P&G dedicated pet food train started in 2003. Rail transport is being used to transport 60% of the plant production on a dedicated train to Rotterdam. Here the load is split for distribution by train to S. Europe and combined passenger/semi-trailer/container ferry to the UK. This has removed 3000 truck movements and brought real benefits to the community of Coeveorden through the reduced traffic volumes (see picture).
IAMS Coevorden Source: P&G
Key factors to the traffic growth have included standardisation of the containers to fi t with current practice and distribution facilities. P&G have chosen 45 foot 33 pallet boxes for European shipments. Importantly there has been no economic compromise. Transit times are at least the same as previously and additional reliability has been achieved through modal resilience. Trains are generally fully loaded and the environmental gains are evident.
P&G’s Sergio Barbarino believes that a step change in the efficiency and effectiveness of TINA could be achieved if horizontal loading of containers could be realised. Overcoming the need for shunting from electrified lines into loading areas served by overhead gantry trains could reduce average loading/unloading times of 6 hours to just 30 minutes. Excitingly, this would overcome the constraints on using only point to point connections, and introduce the option for Multi-Stop services. P&G could develop routes between distribution and production centres picking up and dropping off en route providing greater flexibility, better utilisation of capacity in both directions and greater reach for intermodal and rail services. Collaboration is key. P&G are developing an initiative called CO3 (Collaboration, Concepts on Co-modality) with a number of different actors looking at the opportunities to collaborate with others to create enough scale to efficiently load trucks, trains and potentially ships.
Interested in sharing trains?
As train density increases and with further technological improvements and collaboration Sergio Barbarino believes P&G may be able to improve on the 30% goal beyond 2015. P&G would welcome working with other cargo owners interested to share trains, particularly on backhaul routes not running at capacity. If you are interested please contact Verhulst.K@pg.com.
Port of Gothenburg’s rail shuttle services
The Port of Gothenburg is a key hub for Scandinavia, receiving deep sea calls and enjoying a hinterland with 70% of Scandinavian industry within 500 km. The Port has experienced tremendous success with the development of its rail shuttle services in recent years. Rail volumes have continued to grow through 2008 and 2009 and the trend remains upwards. Container traffic by rail has seen a three fold increase since 2002 with close to 366,500 TEU in 2009. This success has been built on a number of key factors:
• Ongoing investment in the ports rail infrastructure including an electrification programme in 2005
• Good co-operation and collaboration between the main partners including the Port itself, the RailPort terminals, rail operators, goods owners, forwarders, shipping lines and the National Rail Administration.
• Contribution made by Maersk Line. A substantial customer and very pro-rail, 75% of its traffic moves by rail today.
• Development of the daily shuttle service network and more recently the introduction of RailPort Scandinavia.
The Port began investing in daily shuttle services 10 years ago to link Gothenburg to Swedish centres of production and consumption. From the first service to Karlstad the network now supports 26 shuttles, directly connecting 23 centres in Sweden and Norway (see fi g. 4).
An important innovation has been development of the RailPort Scandinavia concept. Through partner co-operation the inland hubs are now operating as full service terminals, bringing the hubs closer to the port through their handling of services including customs clearance, storage, and documentation.
This enables the port to offer seamless and efficient rail links from the sea directly inland to its customers. The aim is to add an additional 2 shuttle services per year and continue expansion of capacity on existing routes.
The Port’s Rail Services include customer adapted whole train systems transporting steel, paper, oil, cars, bananas and other consumables. Altogether 70 daily rail departures are operated today.
The environmental benefits of rail transportation are significant amounting to 50,000 tonnes of CO2 saved in 2009. Together with the efficiency of the services the environmental advantages are expected to drive increasing volumes in the future.
Hinterland intermodal rail services can provide benefits to both users and providers and there are a number of key success factors. For the customer, reliability, consistency and cost effectiveness are important drivers. For providers to deliver this requires ongoing investment in the rail network, the entry and exit points and intermediate hubs; supporting frequent services. Co-operation and collaboration through the logistics chain is critical to achieve the seamless service required to deliver the reliability; and for providers and customers achieving scale is important to service sustainability. Visionary customers such as Procter and Gamble can help push out the boundaries. Growth and further innovation is expected as the pressures towards rail continue. Kate Royston can be contacted on: Kate. email@example.com
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