Friday 21st Oct 2016 - Logistics Manager

Government study backs consolidation centres

A new study commissioned by the Department for Transport could open the way for growth in the number of freight consolidation centres serving retail centres and construction sites.

The Freight Consolidation Centre Study by Transport & Travel Research found that the use of consolidation centres could maximise retail space and deployment of store staff – with up to 20 per cent space expansion.

The study looked particularly at consolidation centres situated close to town centre, shopping or construction site, at which part loads are consolidated and delivered to the target area resulting in fewer lorry journeys.

It found that benefits include cutting the final mile delivery cost and increasing the delivery window, generating opportunity for efficiencies in the distribution chain.

The researchers identified eight operational retail freight consolidation centres in the UK. Three of these serve airports:

* Manchester Airport is served by a consolidation centre in Bury

* East Midlands Airport is served by a consolidation centre at a local warehousing facility

* Heathrow Airport in London is served by a consolidation centre in Stockley Park

The other five are:

* Brimsdown in Enfield (serving Regent Street)

* Bristol (serving Broadmead / Cabot Circus shopping centre and in the near future Bath city centre)

* Greenhithe (serving Bluewater shopping centre in Kent)

* Sheffield (serving Meadowhall shopping centre)

* Snetterton in Norfolk (serving Norwich city centre).

All of these are located within 19 miles of their respective target servicing areas, and all have opened since 2000.

There are also a number operating in the construction sector – notably the London Construction Consolidation Centre.

The study identified a range of social benefits from consolidation centres:

* Significant reduction in emissions affecting air quality

* Reduction in CO2 emissions (by up to 55 per cent)

* Reduction in traffic congestion (up to £2m per FCC modelled in social benefit gains over 5 years)

* Reduction in conflict between road users

However, the report also reveals some uncertainty over the real degree of delivery mileage savings, highlighting a study by ECR-UK which investigated the potential impact of consolidating the actual urban distribution operations of three retail groups, Boots the Chemist, Sainsbury’s and Musgraves-Budgens-Londis, using the (then) existing Boots distribution centre in Greenwich as the prospective consolidation centre.

The result of this exercise was a reduction in trips of just 2 per cent and in delivery mileage of 2.5 per cent.

The reason for this, the report said, was that “the three supply chains involved in this exercise are all well managed and if not already fully consolidated for individual stores will have a drop density which is relatively tightly defined, due to the strong presence of these retailers throughout the study area, hence providing little opportunity for significant reduction in delivery vehicle mileage.”

Nevertheless, Alan Lewis, director of Transport & Travel Research, said: “Freight consolidation offers significant benefits to industry and the public at large. This report provides guidance to local authorities, developers and the retail industry who are considering consolidation centres as part of their delivery strategies.”