EU | UK news digest. 16 June
Is too soon to place bets on rail as an industry savior? Perhaps, it is time to makes a leap of faith
The crisis has brought to light several pain points that no longer can be ignored – for years, shippers strived to make their supply chains as ‘efficient’ as possible – where efficiency was all about lower cost, lower inventory, just-in-time, faster lead times, etc., but in the process removing resiliency. Logistics coordinators also note that JIT in the supply chain suits the balance sheet only until there is a problem – then production stops and companies wonder why they made themselves such easy targets and there is no buffer transit time. The solution is viewed in approving smaller shipment lots, reducing factory stuffing FCLs, and improving LCL consolidation. The industry has to be reactive because although Yantian’s congestion is slightly getting better (the port's productivity has moved towards 45% of normal levels); the ripple effects of it are long-lasting. North Europe port of Hamburg has been under intense pressure in the past few weeks and recently, Hapag-Lloyd advised customers of a tightening of restrictions for export cargo deliveries at Antwerp. An advisory from the carrier said terminal operator PSA Antwerp had been forced to implement a seven-day cargo opening rule for export containers to its terminals.
The twin impacts of Brexit and the pandemic have harmed UK ports throughput in the first quarter of 2021. Recent data shows that total freight tonnage fell 9% year on year between January and March to 103.9m tonnes. Total imports were down 8% to 67.2m tonnes and exports down 11% to 36.6m tonnes. It is challenging to estimate which factor contributed the most to the damage, but what is certain is that traffic remains low and the driver shortages have reached their peak. The latter is in such a critical condition, that it was proposed to use army trucks to ensure enough vehicles and drivers to distribute food. However, an RHA spokesperson questioned the validity of using the military since it would need additional training and the crisis expects quick solutions. The current contexts pushed Logistics UK to call for an end to a post-Brexit rule banning lorries from parking in laybys for more than 45 minutes across several areas of the key southeast England county of Kent. The company considers this measure redundant.
There is significant international optimism that rail freight will play a huge part in the worldwide economic recovery over the next five years. What are the signs? The sector’s economic contribution has been valued at almost $ 250 billion and is predicted to grow annually by 20% in the next five years. Apart from playing a role in globalization, rail freight can increase economic integration in some regions of Eastern Europe characterized by groupings of many small countries by providing access to international and regional markets. The recent findings on the current state of rail freight are based on the data received from French national operator SNCF and DB Cargo and Genesee and Wyoming, the parent company of Freightliner in the UK. Great Britain in particular can become a forwarder on the way to decarburization. At least it was the message to G7 leaders from the Railway Industry Association. It believes that by acting strongly and decisively in 2021, rail will not only help the UK to achieve its green transport ambitions, but it will also give more weight to the Government’s call for other countries to follow suit when it comes to decarbonizing their transport networks around the world.
Unusual changes require unusual solutions, and the current situation is certainly out of the ordinary; therefore, the Russian military’s fifth railroad brigade reconstructed a 340-kilometer long rail track that is a part of the railway line connecting Siberia with the Far East part of the country. Experts are also watching over the proposed initiative (it has not been confirmed) to use prison convicts as workers to resolve the issue of labor shortages.
Ironically, the rail freight industry has been advocating for a shift to rail for many years, but now due to the high demand, its capacity on the westbound train is limited. However, there might be some tips that would allow booking on the train between China and Europe. According to industry experts, firstly, if you have considerable eastbound volumes, you are more likely to get space on the train going west. Secondly, e-commerce is prioritized over general cargo. Thirdly, companies like T.H.I. appreciate those customers that book space on the train all year round and advise doing it in advance.
Trying to come up with alternative solutions, Lamborghini and Rail Cargo Group have set up a new logistics concept. The luxury car giant will transport the Lamborghini Urus models by rail between their production site in Zwickau, Germany, and its parent plant in Sant’Agata Bolognese, Italy. The service will primarily use rail, with trucks involved only in the last 21 kilometers of the route between the Modena terminal and Sant’Agata.
Meanwhile, other initiatives push rail freight forward. Serbia and Montenegro have agreed to transport large amounts of copper through the port of Bar, with rail playing a leading role. The copper originates from the Serbian city of Bor and will be loaded on the train to the Montenegrin port. Intermodal operator Loconi has launched a new container train service connecting the Port of Koper and the Baltic Container Terminal (BCT) in Gdynia, Poland.
