Thursday 29th Sep 2016 - Logistics Manager

Better, but no gold star

The other day I read a document that starts: “Freight is important and matters to everyone”. At first I thought it had been written for five year olds.

So it might come as a surprise to find that the line comes from a government report – particularly one that is rather more substantial than the average. “Delivering A Sustainable Transport System: The Logistics Perspective” sets out to develop a new perspective on logistics that goes beyond the traditional tables of statistics on freight moved by mode and so on. It is clear that there has been woefully little understanding of the true costs and benefits of the movement of goods. There are those who claim that there is an environmental benefit from producing food locally – but it could also be pointed out that growing crops like tomatoes in the UK is less environmentally friendly than bringing them in from Spain where they don’t need heated greenhouses.

Traditionally, the DfT has focused on mode, rather than commodity – how many lorries or trains there were rather than on the logistical detail of what freight moved where – but it is starting to look more closely at the composition of freight traffic on key routes.

Initially this new analysis has focused on lorries, because that is how most freight moves, it says. It has looked particularly closely at containers, because of high predicted growth (around 180 per cent by 2030 on current forecasts, prepared before the current downturn) and the potential for modal shift to both rail and coastal shipping.

“Early findings indicate that container freight between ports and the origin or destination is a major issue for some key parts of the road network located close to international gateways, but is not currently a significant component of lorry traffic across the road network as a whole. Lorry container traffic through the major container ports rapidly disperses and, when aggregated, the flows make up only a small percentage of lorry traffic on the motorway routes.”

The DfT sees a number of trends that will shape the future nature and impacts of freight including: sustained growth in imports, although possibly at a lower rate than of late, arising from more global sourcing of supplies, placing significant demands on key international gateways and the links to and from them; an increase in numbers of light goods vehicles, where growth of around 65 per cent is forecast to 2025.

“These trends contribute to current growth forecasts of: four per cent for HGV traffic (vehicle km) from 2007 to 2015; and 30 per cent for freight to be lifted by rail from 2007 to 2015.”

It argues that it is likely that substantial savings in greenhouse gas emissions will need to be made across a wide range of transport activities in the period to 2050. The report identifies three main ways in which reductions of CO2 in the supply chain can be delivered:

– Moving more goods by the modes with the lowest carbon dioxide emissions per tonne/km.

– Reducing emissions per tonne/km without changing the mode of transport.

– Reducing the need to transport goods.

While there has been quite a lot of discussion and some work on the first two, there has been no consideration of the third. In fact, the report says that at a discussion of the “Logistics Sounding Board”, none of the practitioners mentioned the third option as either part of their current or future plans.

But this does not mean that issue is going to go away. The report says: “For the future, we will need to think together much more about where goods are transported from and to. Our view is that this is an area where industry is best placed to take the lead, but in which government may have a high level role to play.

“Through our engagement process, the department has heard a strong commitment from practitioners in the logistics sector (particularly customers) to play their part in achieving this goal. We have also been told that there are some practical barriers to doing so, including an absence of strong CO2-based incentives and a lack of clarity about who in the supply chain is responsible for delivering savings. Is it the freight shipper (who arguably has fewest levers available to them), the freight forwarder, the business owning the goods transported (which generally has the widest range of interventions within its control), the end customer or a combination of these?”

This all amounts to quite an admission of ignorance. And there is a risk of a dangerous misconception – namely that transport can be dealt with in isolation rather than as part of a complete supply chain. It’s all very well to say that transport should be reduced but it is entirely possible that CO2 emissions and/or costs related to a particular product could actually rise as a result.

The fact that the DfT is starting to look at commodities rather than modes is a step forward. But surely it is time to go the whole hog and embrace the holistic approach that informs modern supply chain thinking.