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ECR Italy:
Intermodability
Silvia Scalia – ECR Italy
Andrea Fossa – Partner Hermes
Brussels, May 28th 2014
ECR Shared processes Creating value along the supply chain
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Why a Rail Transportation Project
• Sustainability and environmental issues are higher and
higher on FMCG consumers’ agenda.
• Leading FMCG companies already set ambitious
internal targets in terms of CO2 emissions reduction.
• European “laws” and “books” did set clear targets.
• Italian FMCG supply chain is 99% based upon road
transportation, independently of distance.
“The question is not
WHETHER modal switch will take place or not,
but WHEN.”
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The ECR working group
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Involving all the players in the working
group
All the players of the supply
chain involved (Retail,
Manufacturers, LSP, Rail and
Multimodal operators
Better understanding
of the rail sector
A complete map of rail transport
companies and services
Identification of FMCG
requirements
An industry-wide vision, defined and
shared
Potential estimate
Intermodability™
Project: The
simulation analysis
showing how many trucks
could be moved to rail
Pilot testing
The FMCG on the train: the
enabling factors and the barriers
Multimodal Transportation:
The project journey so far
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Flows simulation: 450k trips/year !
• Based upon 18 companies “real customers orders” (including
Retailers, Manufacturers and Logistics Service Providers)
• Database analysis has adopted “cautious parameters”
– 12 months orders including FTL or LTL with truck saturation >75%
– Underestimating intermediate flows towards local W/Hs and T/Ps
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. 6 months (June-November 2013)
. 9 companies (Manufacturers, Retailers, LSPs)
. 5 Multimodal Transport Operators
.16 North-South connections
2013 Test Phase – results
Average OTD statistical distribution (calendar days). Preliminary results 19/02/2014
-30% kgCO2
With respect to “all road”
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Planning
Order to delivery time reduction
Order visibility
Planning – rewarding rate
“Green slot”
Management
Flows selection (steady - rail)
(variable - road)
Service level agreement – (AxB)
Multi-pick / multi-drop
Track&Trace
Pallet interchange and goods return
management
Supply chain synchronization (modal hubs)
Asset
Availability and Sharing
Reefer swap body
Security ITU
Terminal efficiency and security
Capacity
Train availability
Slot on train availability
Pilot faced operational issues …
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The challenge is to develop a new business approach based upon:
• FMCG supply chain requirements
• Overcoming short-term approaches
• Aggregating demand for rail transport
… but the key issue is “volumes”
Volumes Service
development Stalemate:
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“Demand” is there …
MYTH “Flows are irrational, hardly compatible
with intermodal transportation limits”
Wee
kly
nu
mb
er o
f tr
ips
MM (k=5 gg)
Average: 3.100 trips/wk
52 WEEKS
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… let us stop the vicious circle !
Existing FMCG volumes do not
justify commitment for
service development
Existing trains do not answer current FMCG specifications
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• The project is evolving towards the creation of a “New subject” whose
main objective is to quickly achieve an adequate critical mass
allowing for a proper service design from Carriers
• This new “ECR subject” will
– Assure a proper legal framework (Trustee role, benefits split, …)
– Facilitate horizontal collaboration amongst participating Companies,
exploiting CO3 approach and experience
– Facilitate interaction with carriers/intermodal offer
– Provide budget, tools and procedures to implement the project
• A key role will be played by a 4PL acting on behalf of the “demand
side”, a player selected to carry out operational tasks
The 2014 project evolution
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New scenario: operational rel’p
New ECR Subject
SW Tools + Track & Trace
4PL Facilitator
MTO
Shipper 1
Shipper 2
Shipper 3
Shipper “n”
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New scenario: contractual rel’p
New ECR Subject
SW Tools + Track & Trace
4PL Facilitator
MTO
Shipper 1
Shipper 2
Shipper 3
Shipper “n”
Service contracts
Horizontal Co-operation agreement
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THANK YOU
INDICOD-ECR
Via P. Paleocapa, 7
20121 Milan - ITALY
T +39 02 7772121
www.indicod-ecr.it