Software is the answer to cutting carbon emissions
Written by Tim Phillips, CEO of Freightex
Given the current economic climate, it is understandable that many companies are reducing their focus on cutting carbon emissions as this is often perceived to be an expensive pursuit.
However, operating a more environmentally friendly supply chain can actually improve operational efficiency and therefore save money. This is particularly true of road transport, where the cost of fuel accounts for a large percentage of overall expenditure.
The main focus of the logistics industry has been to improve environmental – and fuel - performance through smaller incremental changes to working practice. Truck manufacturers have worked on improved aerodynamics and fuel efficiency, and drivers regularly receive training to drive more economically. Yet, these improvements only amount to fractional percentage improvements in environmental performance.
One of the biggest challenges for the major players in the road transport industry, which also impacts on the environment, is empty running – where trucks complete journeys when they are not loaded to maximum capacity, sometimes even completely empty.
Although major companies tell us that their fleets are optimised with over 90% utilisation, in a lot of instances this ignores loads that are sub-contracted to other companies; often because they do not fit into the regular or convenient schedules of their networks or for some other reason are difficult to move.
Alongside this point, 80% of vehicles on the road belong to fleets of 20 trucks or under without sophisticated technology. On average, these operators run at around 60% capacity.
At a recent sustainability conference it was quoted that 80bn km are driven by trucks with no loads in the EU each year. Recent figures from the European Commission financed project C03 shows that the average truck on Europe’s roads has a utilisation rate of just 55%. This figure has barely changed in the last ten years.
The challenge for the freight industry leaders is to find ways of increasing the utilisation of these smaller fleets to improve the industry’s overall environmental performance.
Software can reduce empty running
The best way to improve utilisation rates, environmental performance and to reduce fuel consumption is through the use of innovative third party load planning software that improves visibility - enabling better planning and increased flexibility.
Implementing a system such as this is what I call, “Effective freight management services”. These can make a monumental improvement to a company’s environmental performance.
By filling empty vehicles on the road the industry lowers the proportion of wasted journeys that empty trucks are making and significantly lowers the carbon emissions that are created by repositioning these empty trucks for their next journey.
These management systems track down the most efficient truck at any one time to carry the load that needs transporting. By utilising an independent third party system, the whole industry is able to collaborate to share loads and capacity in a safe and managed environment where customer and carriers trust the process.
The technology provides economic matching and takes into consideration time and route, not just post code locations. This allows hauliers to better asses the viability of securing a load.
Another key advantage of this type of technology is its ability to improve visibility of assets and inventory and therefore the responsiveness of operations.
When things occasionally go wrong, freight management software can provide the visibility needed to find short term replacement options for these trucks or new capacity to move the load the truck can no longer make.
The responsiveness of operations achieved through this increased visibility therefore allows “live” collaboration to become a reality. The visibility provided enables companies to offer up a load that does not fit their network to others in the group and move something with their truck that makes more sense.
For every load to be moved, the platforms can rank available trucks, taking into account the detour they will have to make to collect the load in question. This often results in vehicles positioned very close to the load being used, and matches hauliers with traffic flows they wouldn’t otherwise have known about.
By incorporating effective freight management, hauliers are making a conscious effort to go green and make a significant reduction to their carbon emissions, without costing them a penny. In fact ultimately the service saves hauliers money. By making the most of normally wasted journeys to reposition trucks for their next job they are becoming more cost effective and reducing usually wasted mileage.
In addition, the customer also stands to benefit. By utilising a truck that would otherwise be travelling only partially loaded, they are often able to secure favourable pricing, with the whole operation managed by a service focused third party.
Tim Phillips Bio
Tim is CEO of Freightex - a European Full Truck Load freight service, specialising in optimised use of available market capacity while giving customers high service levels. Prior to this he worked as a director at a large automotive logistics provider and earlier at senior level in the OEMs as the general manager in transport buying.
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector