High petrol prices and the increasing importance of sustainability has prompted the food industry to try out new – and often innovative – methods of transporting their wares to customers, as well as search for ways to enhance their existing logistical operations.
Stuart Todd takes a look at the schemes food manufacturers and retailers have adopted to reduce both their carbon footprint and transport costs.
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By GlobalDataThe food logistics sector has embraced a number of initiatives under the banner of sustainable development.
They include the transfer of goods from road to rail transport, removing wastage from the supply chain, through the recovery of re-useable product containers and pallets and reducing ’empty’ truck miles, the development of shared user distribution hubs and the introduction of cleaner and quieter road vehicles for deliveries to retail outlets.
Among food groups, Ferrero has been a pioneer in combined rail-road transport. It has been shipping its Nutella brand chocolate paste by train across France since 2005 and in the run-up to Christmas last year surpassed the 50m units mark.
This month, the company launched its first modal transfer from road to river, with product transported on barges on the Seine from Rouen to the Paris region for distribution to Monoprix outlets, Ferrero’s supply chain director for France and the Benelux, Grégory Debuchy, reveals.
French dairy group Bel is another food manufacturer experimenting with rail transport as an economically viable alternative to road while also addressing the ‘green’ agenda.
In March, the Laughing Cow cheesemaker began testing out a “rail-road” route between Rennes and Lyon with its logistics services provider, STEF-TFE. This sees the weekly dispatch of Mini Babybel and Kiri products in two refrigerated swap body containers.
“When you look at growing road traffic congestion, the high price of diesel, the HGV tax already in place in Germany and the one to come in France, the outlook for road haulage is one of higher operating costs,” explains Esthelle Grosskopf, Bel’s distribution manager for Western Europe.
“Freight rates on our combined transport service are currently around 10-15% more expensive than road haulage. But we aim to reduce the gap by the end of the year by increasing the service to five swap bodies per week and generating return traffic to Rennes. End 2012-early 2013, rates are likely to be on a par with road haulage.”
In June, Bel also began transporting its Netherlands-manufactured Leerdammer brand cheese by freight train from Rotterdam to Milan. “Given the long distance involved and the volume we can generate, it’s more or less competitive in terms of road haulage rates and compares well on journey times too,” Grosskopf estimates.
Over the Channel, PepsiCo began carrying Quaker Oats and Scott’s Porrage Oats from a plant in Scotland to the company’s southern regional distribution centre in the English city of Leicester about two years ago.
“While environmental sustainability is a major aspect of how we do business, transferring shipments to rail was the right decision for us commercially too,” says PepsiCo UK and Ireland Supply chain director Jane Burkitt.
She estimates that, through a combination of rail, backhaul collaboration and potato front haul, PepsiCo UK & Ireland has reduced its road miles by more than 2m kilometres in recent years.
UK logistics firm Atchison Topeka’s sustainable development provision focuses on removing wasteful activity from the supply chain, says sales manager Scott Waters.
The company is investigating X-ray services to check for contamination in order to allow as much product as possible to be recovered while it also makes the re-use and recycling of material a priority too. Its supply chain waste management policy also takes the form of reducing ’empty’ truck miles.
“It’s built into our planning that when our trucks have completed their delivery runs we look to optimise return loads for onward distribution and collection of re-usable equipment such as IBC’s and plastic pallets in order to avoid them returning to our main base empty and it’s proved successful. This benefits customers who are not having to pay for empty miles and provides a beneficial reverse logistics solution.”
Atchison Topeka is also exploring multi-modal transport solutions such as rail-road services between northern Europe and the UK, particularly for bulk shipments.
“But the key issue is generating a critical mass of product and this is only likely to be achieved by people getting round a table, essentially competitors, and agreeing to collaborate,” Waters says. “Multi-modal also needs to have a flatter plan that sticks to forecast otherwise there will be conflicts with customers who need their LSPs to be first and foremost flexible and responsive.”
Another UK-based logistics provider, NFT, says its sustainable development efforts centre on reaping the economical and environmental benefits from its existing network.
“We deliver sandwiches on behalf of Marks and Spencer. Being a low-weight product, we have been able to increase capacity per truck from 26 pallets to 40 pallets, slashing food miles by 30%, without going over on the road train weight, by using a bespoke double-deck trailer” explains sales and marketing director Dale Fiddy.
Across the Atlantic, reflecting the growing emphasis on collaborative logistics, in October Ferrero and US chocolate and candy giant Hershey announced plans to link their supply chains to reduce their carbon footprint in North America.
The plans focus on sharing warehousing and distribution facilities and truck capacity and the two groups hope to realise gains from the pact as early as next year.
Meanwhile, logistics firms are busy introducing cleaner and quieter road vehicles for deliveries to retailers. For example, in October, Geodis began making deliveries to six Carrefour stores in in the city of Lille using a hybrid, refrigerated trailer truck, as part of its new urban logistics system Distripolis.
