A new trend is emerging among third-party logistics providers (3PLs) transporting products between the UK and mainland Europe – managers are thinking more cleverly about the logistics of their crossings and thinking that sailing from one of the Channel ports may not be the best solution in terms of saving time and distance travelled. If a delivery vehicle’s final destination is Frankfurt, for instance, then it is more likely that it will be booked on a ferry crossing from Harwich to the Hook of Holland than one from Dover to Calais.
That is the view of Frank Nieuwenhuys, Stena Line Freight’s (SLF) commercial manager for the UK and Republic of Ireland, who feels the belief that a driver must drive down to the heavily-congested South-east to take the short crossing is becoming a thing of the past. He explains: “From the logistics point of view, if you are located in the Midlands or the North and you’ve got to trek down the M1 or M11 onto the M25 and do the Dartford Crossing. Living in Nottingham, I know what that journey is like. You can understand why it is attractive for people to take the A14 [to Harwich] which is relatively traffic-free. That means people can arrive in a much more predictable way at the port; they don’t have to build in time for delay; and they don’t have to apologise to their customers that they haven’t met their delivery schedules.”
Nieuwenhuys continues: “Logistics has come on leaps and bounds in the last ten or 15 years and people are now calculating what the cost of that is – the time cost and the mileage cost. When you calculate the distance from Rotterdam Europoort to a destination in Germany, for instance and compared to going from the South-east, there is a tremendous mileage saving. The Hook of Holland is a similar distance from Basle as Calais is, although you wouldn’t imagine that on the map. Time and mileage are stripped away, giving more predictability and ultimately saving costs.”
SLF, which has expanded and developed significantly, has recently altered its structure to meet the needs of the transport business. Having had a route network the restructuring was designed to place the customer in the centre of the business, with one freight organisation mirrored in separate regions to achieve a single point of contact irrespective of where any freight customer is.
The company’s philosophy is that running from a single port, say Harwich, with an increased frequency of sailings makes life easier for customers. Equally, flexibility is available – customers can depart from Harwich, for example, and return via Killingholme on the south bank Humber – depending on the collection and delivery points.
Nieuwenhuys (above) says: “The changes that took place in the restructuring created one freight product – not one that is offered for the Baltic, not another just for the North Sea etc – but one freight product. There is a single freight director, then commercial freight managers and regional managers below that and then there are regional teams. Logistics providers are becoming bigger and more pan-European or more global.
“When a significant business that has pan-European involvement approaches us, they can deal with us either on a local basis or on a centralised basis which means we can look after the whole of the business irrespective of where they’re located. We’ve taken out the hassle factor of having to make several phone calls to book separate journeys on separate routes.”
SL’s growth in the North Sea market rocketed in the first six months of this year with volumes up 81%. Much of that growth is credited to starting a new route into Rotterdam as well as the strategy to create a strong North Sea link with the Continent using existing routes Killingholme-Hook of Holland and Harwich-Hook of Holland. Those two routes have grown by more than 10% this year.
Freight currently accounts for 35% of SL’s revenue. While the group’s passenger business continues to expand and always will do, Nieuwenhuys feels that the freight business has the capability to grow more quickly and become a higher percentage. “Freight tends to be very robust and not so influenced by events, as can the passenger area. Things like the SARS outbreak and foot and mouth crisis affects passenger volumes dramatically – and it’s instant. Freight is much more predictable and has its own momentum. It doesn’t stop just because of a SARS outbreak in the Far East. Everyone involved with it just assumes business as normal and carries on.”
Last year, SL acquired the Felixstowe-Rotterdam route from P&O and switched it to Harwich, its traditional port of operation. “Our whole infrastructure was there and we needed to consolidate the operation. It was also about minimising cost, operating from two ports you’ve got twice the costs whereas operating from the one port with more volume you have more cost but not twice the costs,” says Nieuwenhuys.
SL currently provides 16 sailings a day on the North Sea and aims to bring to the North Sea the frequency that has traditionally been available from the Channel ports. SL says that frequency will mean people having a choice of departure times and without long waits in between.
Nieuwenhuys says: “Because we’ve put frequency in we’ve met our customer base in terms of their demand for this alternative way of getting into continental Europe. Holland is an extremely good gateway to achieve that because it’s an open road up to Germany and to the other Benelux countries as well as beyond that to the eastern countries. We see it as a tremendous advantage, and gives us the chance to be identified for our services on the North Sea.”
He says that another increasing logistics trend is the land-bridge solution – traffic transiting from Ireland to mainland Europe or vice versa uses the UK as a bridge – which means there are two crossings. “We’ve seen an increase in land-bridge on our North Sea routes in particular. That’s because our ferry times are compatible so that somebody crossing from Ireland on our evening service will arrive at approx 1am in Anglesey and then drive across through the night, a good time to travel because of the low congestion levels, and be in Harwich for the morning sailing at 8.45am,” says Nieuwenhuys. “We’ve created a through-transit system to tune our land-bridge products as near to perfection as we can so that it’s very convenient to use without having long delays waiting for ferry crossings.”
Nieuwenhuys continues: “What we’ve seen in the last year is something in the order of an18-20% increase on our land-bridge on North Sea routes. It’s a popular product and continues to be so.”
With the knowledge that a company’s supply chain operates smoothly and ever mindful that ships can get delayed, SL has developed a communications system so that customers can be informed immediately of any deviation from the plan so that contingency action can be taken. Communication is critical, says Nieuwenhuys.
“We also have a very sophisticated, but simple-to-use Internet site so customers can access our live booking system. Within that there is an information bulletin board so when someone looks at a particular crossing for their vehicle they can see that the vehicle has gone through check-in and is on board. If the vessel is going to arrive late we put the timetable up in red so we highlight where there is a slippage. It’s actually using a loud halo – ‘hey, there’s an issue here you may just need adjustments’.”
More than 20% of SL’s bookings are now via the Internet or electronic exchanges and a large upgrade of the system is due later this year. That will enable customers to book large volumes of vehicles more quickly and easily where there are block bookings.
Nieuwenhuys sums up SL’s role: “Logistics is about moving things along a chain in a very predictable way, so that you can achieve things in a just-in-time (JIT) way. But JIT is no longer an individual discipline that you really have to go through the hoop for. This is something where there is an expectation in the market that everything will be delivered JIT. If you’ve got driver-accompanied vehicles or unaccompanied vehicles it doesn’t matter but everyone has the expectation of a very high service standard.
“Our job is to ensure that there isn’t an issue in delivery of the overall supply chain. We have to play our part in it and there should be an assumption that we will play our part 100%.” n