A sourcebook

Good practicein freight transport

European Commission

Brussels • Luxembourg, 2000

European Commission

A sourcebook

Good practicein freight transport

A great deal of additional information on the European Union is available on the Internet.It can be accessed through the Europa server (http://europa.eu.int).

Cataloguing data can be found at the end of this publication.

Design: Concerto, Belgium

Luxembourg: Office for Official Publications of the European Communities, 2000

ISBN 92-828-4147-2

© European Communities, 2000Reproduction is authorised provided the source is acknowledged.

Printed in Belgium

Transport and environment are increasinglyconsidered as an ill-matched couple.Yetopportunities exist to improve transportefficiency and the environment at the sametime.

Traffic has environmental costs such as airpollution and noise. It deteriorates thequality of life in our cities as well as being acontributor to global warming. At the sametime, we appreciate the increased mobilitythat transport provides as well as the goodsand services that commercial transport brings to our shops and homes. As oftenin life we must find a balance between the costs, including those to ourenvironment, and the benefits that we enjoy.

European legislation has made substantial progress in reducing the environmentalimpacts of vehicles and fuels. Major efforts are also being made to improve theway in which the different transport modes work together, so that for any oneshipment we can combine modes to minimise the effects on the environmentwhilst maximising economic efficiency. We will continue to strive to reduce thecosts of transport to society in this way.

In parallel, transport operators and their clients can do their bit where policyreaches its limits. This sourcebook is intended to provide ideas and presentexamples, from a wide variety of businesses in Europe, where innovative solutionshave been found which benefit the environment. Significantly, these solutions notonly benefit the environment but frequently also benefit the companies involvedthrough reduced costs or through an improvement in their reputation as anenvironmentally conscious and advanced business; an asset which is important inan increasingly ‘green’ market place. Creative voluntary initiatives can pay in botheconomic and environmental terms.

I hope this sourcebook stimulates the widespread adoption of successfulinnovations and the development of new ideas to reduce the environmentalimpact of freight transport in Europe.

Foreword

Margot WALLSTRÖMCommissioner responsible for the environment

3

Whodoes this sourcebook address?

■ Manufacturing companies throughout the product range and of all sizes,

from small enterprises to large national and multinational companies.

■ Logistic companies and companies in any aspect of physical distribution

management and warehousing.

■ Road haulage companies, rail freight companies.

■ Shipping companies, freight forwarders, inland waterway companies,

companies in multi-modal or combined transport.

■ Large retailers, supermarket chains, mail order companies.

■ Companies with substantial vehicle fleets, e.g. gas, electricity, water and

telecommunication utilities.

4

Whowill gain if the suggestions in this report are adopted?

■ The companies themselves who will reduce their costs, increase their

competitiveness and improve their management style. They will also

enhance their standing as responsible companies and companies regarded

as reliable and mature by financial institutions considering new investments.

■ The communities who are most affected by the transport operations of these

companies. They will benefit from fewer vehicles on the road, reduced

pollution, reduced traffic danger, reduced accidents and an improvement in

the quality of life in their neighbourhoods. This will contribute to improved

health and to better relationships between companies and their neighbours.

■ The environment in its most general sense including a reduction in

greenhouse gases and avoidance of the worst (and expensive)

consequences of global warming.

5

Good transport facilities are vital to the success of business. An efficient transportsystem offering speedy and reliable transport for every stage of the productionprocess makes a significant contribution to a profitable and competitiveenterprise. The development of high quality logistics and specialised contracttransport services has helped businesses to improve productivity andcompetitiveness. The demands of customers for finely timed deliveries are wellestablished, the need to control costs is self-evident. At the same time, managingtransport in the new millenium provides a large number of opportunities for furtherefficiency gains. Successful identification and incorporation of new transportationstrategies into production and marketing plans will be a key factor in futuresuccesses.

However, there is increasing concern across Europe about the environmental sideeffects of traffic. Transport is associated with significant and growing amounts ofair pollution, noise, land take and contributions to global warming. Trucks areassociated with road damage and visual pollution and the presence of trucks incommunities and neighbourhoods is ranked highly in lists of those factors thatcause concern. Truck operators share this concern. Negative public opinion is notgood for business.

There is a widespread recognition that professionalism in transport operationsinvolves the development of solutions to the environmental problems caused bytransport. At the same time, innovation in transport operations which benefitbusiness can go hand in hand with environmental improvements. Already inEurope a large number of firms have recognised the competitive and marketingadvantages of being a forerunner in environmental performance. They have usedmodes of transport other than road because it is profitable to do so. They haveintroduced innovative programmes for fuel savings because this reduces costsand they have begun to cooperate with other firms and with local authorities toreduce the number of lorries in cities whilst fully satisfying the demands of theirclients and the requirements of economic efficiency. In turn, environmentalperformance is increasingly seen as a market asset.

This report is about identifying opportunities to improve transportation strategies.The report is intended to reinforce a process of change within the freight industryand to highlight some key areas where this is possible. It will enable companies toreap a double dividend of both environmental and competitive gain. Everyonegains from the adoption of high environmental standards in freight transport.

Introduction

6

There are five main approaches to the adoption of environmentalconcerns in freight transport. All are examples of ‘win-win’outcomes where benefits to the environment are either equalled orexceeded by benefits to the company itself. All these approachescan be implemented by small and medium-sized enterprises(SMEs) as well as by large national and multi-national operations.Individual firms are already learning from these experiences andimproving on them in the next round of innovation. All theapproaches are more likely to succeed when set within a generalframework of an environmental management standard such as theEuropean standard for eco-management and audit (EMAS) orISO EN 14001. The five approaches are as follows:

P. 9 ■ Reducing the impact of each modethrough cleaner engines, cleaner fuels,new fuels and in the case of roadfreight, energy efficient truck design;

P. 11 ■ Driver training and behaviour;

P. 13 ■ Switching to environmentally friendlymodes of transport, e.g. rail, coastalshipping, waterways and any of thesein combination with road transport;

P. 17 ■ Reducing the actual number ofvehicles running, vehicle kilometresand tonne kilometres by increasingload factors (reducing empty or partlyloaded running of lorries), improvingrouteing, utilising new informationtechnology to maximise backloading,consolidate deliveries, sharing loadsand pick-up deliveries with othercompanies;

P. 21 ■ City logistics.

Good practice in freight transport

7

9

Reducing the impact of each mode through technological improvements

‘There are a large number

of technologies that can improve

the fuel consumption of vehicles,

reduce air and noise emissions

and reduce costs.’

There are a large number of technologies that canimprove the fuel consumption of vehicles, reduce airand noise emissions and reduce costs. These technolo-gies include modifications to engines, electronic con-trol systems, exhaust systems and new fuels. The useof cleaner conventional fuels (e.g. low sulphur andlow benzene) and alternative fuels (e.g. liquid petroleum gas, compressed natural gas) can be par-ticularly helpful in reducing urban air pollution.Information on these technologies is available fromthe vehicle manufacturers and from professionalorganisations such as the UK Freight TransportAssociation. Introducing new technologies can have asignificant impact on a number of related areas.Reductions in fuel consumption will often be matchedby reductions in repair costs as vehicles are drivenmuch more carefully when fuel use is monitored.More careful driving will reduce the likelihood ofaccidents, which will reduce accident repair costs andinsurance premiums. All these benefits can beachieved for an initial outlay which is quicklyrecouped. The payback period for these kinds ofinvestments can be very short indeed as the TNTexample quoted below demonstrates.

In the UK TNT (Thomas Nationwide Transport)have introduced a number of engine and vehicle mod-ifications at a cost of GBP 3 000 per vehicle. Fuel savingsamount to GBP 3 500 per vehicle per year (on a 1991fuel cost) on a mileage in excess of 100 000. TNToperates 370 such vehicles out of a total commercialfleet of 2 669. The TNT experience shows how it ispossible to become more reliable and more efficient.

Cleaner fuels are already being used by those organi-sations with a mature environmental policy. The BodyShop and its specialist logistics contractors (The LaneGroup) use a very low-sulphur diesel. Sainsbury’s alsouse a low-sulphur diesel for their London deliveries.British Telecom has experimented with a number ofalternative fuels including liquid petroleum gas (LPG)and compressed natural gas (CNG).

The German logistics company DKS (DeutscheKleiderspedition) has acquired two hybriddiesel/electric lorries. These vehicles (Mercedes-Benz1117) are suited to delivering goods in pedestrianareas of town centres as they generate little noise andair pollution. These vehicles have a load capacity of11 tonnes, and in electric mode they have a maximumspeed of 30 kph and a range of 50 km.

The French mail order group 3 Suisses forwardsgoods to centralised urban distribution depots withconventional diesel vehicles. It has now started toexperiment with using electric vehicles to completethe distribution from these depots to the final cus-tomer. The experiment is being carried out in co operation with ADEME (Agence de l’environnementet de la maitrise de I’energie) and EDF (Electricitéde France).

Another area of technological improvement is in fuelmanagement. This is well covered in the UK FreightTransport Association publication ‘Fuel managementguide’. Fuel consumption in freight fleets can bereduced by up to 20 % by effective management offuel consumption.

ACTION POINTS

1 Make sure that existing vehicles are well maintainedespecially with respect to fuel consumption.

2 When purchasing new vehicles experiment with newtechnology in the form of alternative fuels and newvehicle designs that minimise fuel use throughaerodynamic changes and new tyres.

3 Link your purchase of new vehicles or application of newtechnology to driver training and behaviour to reward thebest drivers (i.e. most fuel-efficient) with, for example, thebest (i.e. newest) vehicles.

11

Driver training and behaviour

‘The British company Blagden

Packaging Ltd has reduced its fuel

consumption by 18%.’

Drivers represent a key interface between the companyand its customers but also between the company andthe public at large. It is essential that the standard ofdrivers and driving is as high as all other aspects of acompany’s operations and management. This is far morelikely to be achieved where the benefits to the companyand to individual drivers are fully described and appre-ciated by all concerned.

Driver training is clearly related to technologicalimprovements and fuel management systems in that thegreatest gains in reducing fuel consumption are likely tobe forthcoming from an integrated approach to using allthese areas in combination. Driver training does, how-ever, go further than the technology. In the Netherlandsfor example, EVO, the employers’ organisation for logis-tics and transport, organises courses and training pro-grammes to teach drivers to drive more economically.Lorry manufacturers, e.g. Mercedes-Benz also offercourses. Drivers who follow these courses can bring infuel consumption reductions of 5–10 %.

Driver behaviour is also associated with informationtechnology. Satellite positioning systems, real-time datalogging and direct communications with drivers can allensure that fuel consumption and drivers’ hours con-form with company policy and with legal requirements(in the case of driving time and rest periods). These log-ging systems can also contribute to improvements inhealth and stress reduction amongst drivers as theyremove the pressure to make up time and encourage aculture of doing the job well within legal requirements.Reductions in driver stress and improvements in driverhealth are of advantage to the company in minimisingdriver training budgets and maximising the use of themost skilful and reliable drivers.

The British company Blagden Packaging Ltd hasreduced its fuel consumption by 18 % as a result of acombination of measures including a fuel performance-related bonus and encouraging drivers to use gearsproperly, to switch off the engine when the vehicle isstationary and avoid heavy acceleration. These perform-ance gains are also likely to have knock-on effects inreducing accident rates, reducing vehicle wear and tearand reducing repair and insurance bills.

The Dutch firm Ahold Grootverbruik operates a fleetof 60 lorries. This firm encourages economical drivingby keeping a record of the fuel consumption of all itsdrivers which is made available to everyone in the com-

pany. This registration and publication strategy has ledto a 5 % reduction in fuel consumption.

All the drivers of the UK-based Lane Group take atraining course in ‘best practice’ driving. A 56 mphspeed limit was in effect before it became law, with theobjective of saving 10 % on fuel costs. The company ishoping to demonstrate how responsible driving preventsaccidents and consequently saves down time for lorryrepairs.

Safer driving can produce cost reductions in insurancepayments as well as fuel use. Fewer accidents and fewerinsurance claims can make a substantial contribution tocost reduction.

ACTION POINTS

1 Monitor and log the fuel consumption of all trips by alldrivers (consider acquiring the appropriate software) andpost this information on prominent notice boards in thedepot or warehouse/factory.

2 Reward the most fuel-efficient drivers with suitableprizes/commendations.

3 Provide a thorough training in all aspects of drivingbehaviour including courtesy to other road users and toresidential areas that lorries must pass through.Emphasise speed-limit observance, anticipation, correctuse of gears, acceleration, etc.

4 Consider using satellite communication systems tomonitor driver behaviour. Explore the advantages of thisfor both the driver and the company. The setting of highstandards of behaviour reduces stress and improves thehealth of drivers as well as improving companyperformance. A driver observing all legal speed limits andobeying all regulations about driving hours and restperiods will be a safer and healthier driver.

Switching to more environmentally friendly modes

Information has been available for many years aboutthe lower levels of noise and emissions from rail,waterway and coastal shipping when compared withroad freight. For many companies, however, roadfreight has been the only practical option that meetshigh standards of control, punctuality, flexibility,security and cost. This situation is now beginning tochange in response to a mixture of technicalinnovation and the deregulation and privatisation offormerly State-controlled modes of transport.

The availability of alternatives, particularly for long-distance transport, has never been greater and manycompanies are discovering that changes are possible asa result of a careful auditing of existing practices.Simply adding in new information about theavailability of alternatives is enough to trigger a shiftin transport policy and to identify lucrative businessopportunities for partnerships with other members ofthe supply chain and transport providers.

Identifying the detailed environmental performance ofdifferent modes of transport is an important stage inthis process. In the majority of circumstances a switchaway from road transport will deliver immediateimprovements but it is also important to recognisethat a road freight option can perform well if it isorganised around using fuel efficient technology andstrategies that reduce vehicle kilometres. The key is adetailed environmental audit of the transport functionas part of the eco-management and audit scheme(EMAS) or ISO EN 14001.

The German food company Kraft Jacobs SuchardDeutschland uses trains to transport raw materialproducts, including coffee beans, from Bremen to itsGerman factories in Berlin. The coffee bean trainsreplace about 4 300 long-distance and 7 200 localdelivery trips and have saved 40 % of the energypreviously used. Packaged coffee is transported on thereturn leg of the journey. It is estimated that railcarries 46 % of the company’s raw material.

The German chemical company BASF uses inlandwaterways to transport over 70 % of its supplies and asimilar share of transport within the company.A smaller proportion (27 %) is used for thedistribution of its products.

The German electric appliance company BoschSiemens Hausgeräte has a policy of increasing yearon year the proportion of its material inputs andmanufactured products transported by rail. To bringthis about it has built a new loading centre in Giengenin collaboration with Deutsche Bahn AG to increaseload capacity to 3 500 wagons per year. It also useswaterways and maritime transport. Productsmanufactured in Bavaria are transported by train toMannheim, then by river barge to Rotterdam wherethey are transferred to a freighter bound for the UK.Products manufactured in Berlin are transported bytrain to Duisburg and then onto the Rhine for onwardshipment by barge.

The Swedish furniture and household goodsmanufacturer and retailer IKEA has a policy of usingtrains wherever possible. Train/lorry combinations areregarded as better than lorry alone over distancesgreater than 200 km. An innovative aspect of IKEA’spolicy is to establish partnerships with othercompanies who also have a need for rail

‘In the majority of circumstances

a switch away from road

transport will deliver

immediate improvements.’

13

transportation, e.g. with another Swedish company,Electrolux, in order to share whole train sets and getbetter transportation prices and capacities. WhenIKEA wanted to arrange transportation from Italy toSpain, the company placed advertisements in theItalian press to find partners for its transportationarrangements.

Combined transport (usually road/rail in somecombination) or more generally intermodal transport(any modes in combination) have enormous potentialto extend the range of freight transport possibilitiesand to avoid congestion. Combined road/rail transportis already of some importance in journeys across theAlps through Switzerland or Austria and can beexpected to become more so in the future.

Combined transport can provide very cost-effectiveand reliable alternatives to road-only options.Opinions vary as to the trip lengths best suited to railshipments but whatever the optimal trip length therecan be no doubt that a flexible approach hasadvantages.

In the Netherlands ETC BV operates a transhipmentfacility in Coevorden for combined rail and roadtransport. From here the transport company Van derGraaf operates a weekly rail service to eastern Europehandling over 20 000 tonnes per annum. At thedestination the customer arranges for final deliveryusing local companies. Over these distances the railservice is very competitive on price and journey time.

In Sweden the retailer ICA uses combined transportfor distribution in the north of the country. Lorries are put on specially built rail wagons and rail is thepreferred mode of transport for journeys longer than400 km.

Henkel, the German chemical company, hasreorganised its distribution system to take advantageof rail. Distribution of washing powders anddetergents now goes via nine regional centresthroughout Germany and these are located near thecustomers. These centres are supplied by rail carsloaded at the end of the production line. Some 12 %

‘Combined transport can

provide very cost-effective

and reliable alternatives

to road-only options.’

14

of all products are still delivered directly by lorry fromthe production lines. This new structure offers an annualsaving of 22 000 lorry movements and each vehiclecovers an average of 300 km (excluding empty runs).These lorries have been replaced by 13 500 rail cars.

The German logistic company, Fiege, offers railoptions as part of its total logistic service and can bulkup goods from several different customers to make railoptions more viable.

ACTION POINTS

1 Talk to customers, suppliers, other logistic companies,railways, intermodal experts and find out what is on offerto meet your own requirements and how the costscompare with current costs.

2 Consider experimenting with rail freight where it isavailable on distances of over 200 km where rail mightprovide an alternative to a congested motorway or acongestion black spot around a city. Considerestablishing partnerships with other organisations thatmight share similar patterns of origins and destinations sothat whole trains can be booked.

3 When you are considering new locations and neworganisational systems try and ensure that they areaccessible to rail as well as road facilities. Flexibility inchoice of mode for the future is a good business strategy.

15

17

Reducing vehicle numbers, vehicle kilometres and tonne kilometres

‘Even in well-managed companies

there is always some scope

to produce greater levels

of efficiency, cost savings and

the identification of new business

opportunities.’

It is very much in the interests of any transport andlogistic company to carry out as much of its activitiesas possible with the minimum number of vehicles andthe smallest possible total of vehicle kilometres.Standards in this area are, therefore, already high inmany companies. The case studies described belowindicate that even in well-managed companies there isalways some scope to produce greater levels of effi-ciency, cost savings and the identification of new busi-ness opportunities.

In the Netherlands a joint project of the Dutch Min-istries of Transport, Environment and EconomicAffairs, the shippers organisation EVO and the roadhaulage organisation Transactie has set up a man-agement tool that can be widely applied in manufac-turing and logistic organisations and will reduce vehi-cle activity, pollution and the costs to the company by10–15 %. The tool can be widely applied in manufac-turing and logistic organisations. The Transactie pro-gramme has already been applied to BASF Nederlandand to two logistic companies Wegtransport andDeni.

In a situation where large numbers of deliveries arebeing made from widely spread origins to widelyspread destinations it is possible to reduce the num-ber of vehicles used and the distance travelled. Onemethod of doing this is the ‘hub and spoke’ systemsomewhat similar to that used by airlines at majorinternational airports. Consignments can be bulkedup and capacity utilisation rates increased. TheGerman haulier Schenker Eurocargo has implement-ed a hub and spoke system at Friedewald in Germany.The German mail order company Otto Versand hasimplemented a similar system.

UK supermarkets have been active in this area oftransport innovation. The ASDA chain has reduced60 direct deliveries per day from suppliers to threeconsolidated deliveries per day. The Swedish retailerKF is cooperating with BTL to reduce the number oflorry kilometres by consolidating loads. They haveopened a mixed consignment centre in Malmo wheregoods are assembled from 25 suppliers and are to betransported to 11 regional warehouses. This has thepotential to cut daily deliveries to supermarkets by 75 %.

Supplier strategies can also reduce vehicle kilometres.By encouraging suppliers to locate near to an impor-tant production facility it is possible to reduce overallkilometres travelled by the inputs. In Wakefield (UK)

Coca-Cola and Schweppes Beverages Ltd haveencouraged an on-site bottling plant and a can-manufacturing plant which together have reducedlorry movements by 9 000 a year.

The potential for savings in lorry activity when com-petitors cooperate is even larger than when one com-pany rationalises its own operations with consolida-tion programmes. In Düsseldorf, three departmentstores, Horten, Kaufhof and Karstadt cooperate inthe distribution of goods to customers. One haulagecompany is used to reduce the number of trips.Karstadt (in association with Fiege) has reorganisedits entire distribution system so that it can use railmore often. This switch to rail has reduced the num-ber of journeys by lorry from 240 000 to 10 000.

18

The Norwegian company Tollpost-Global is involvedin an international project called Greentrip (globalreactive efficient and environmentally friendlytransport logistics). They are developing a new com-puter-based logistics and communications system withthe aim of reducing total vehicle kilometres by 25 %and costs by 10 %. The system will combine electronicroad maps, and information on customers, cargo,lorry types and location and time schedules to devisethe shortest and most efficient routes

The Royal Mail in the UK is a major user of roadtransport. It handles in excess of 60 million lettersand packets each day through a network of 80 mainsorting offices and over 3 400 local delivery offices toover 24 million addresses. It operates 30 000 vehiclescovering 713 million km, using 120 million litres offuel per annum at a cost of approximately GBP 44 million. To control costs and optimise its distri-bution and routeing operations Royal Mail introducedP-E International’s TRANDOS routeing and schedul-ing system in 1989. Royal Mail is confident that theGBP 5 million cost will be fully recovered by the end ofthe third year of the main urban installation pro-gramme. By 1993 TRANDOS had helped to identify,and achieve, an 18 % reduction in distances travelled,an 18 % reduction in vehicles and a 24 % reduction infuel consumption. Importantly TRANDOS has helpedto improve the quality of the service delivered to cus-tomers, reduced costs and reduced environmentalpollution.

New approaches to packaging design offer consider-able potential for reducing lorry activity. Packagingnow imposes significant obligations on those respon-sible for its handling and disposal. Re-designing pack-aging from a transportation efficiency point of viewcan provide multiple benefits to everyone in the sup-ply chain. It can reduce the physical amount of pack-aging that must be handled, reduce the cost of pur-chasing packaging materials and increase the utilisa-tion of vehicles in transporting the actual goods ratherthan large amounts of packaging.

Re-designing packaging offers a number of cost reduc-tion possibilities that will contribute to the overallfinancial health of the company. It is possible toincrease the compactness of the product through con-centration. It is possible to change the raw materialused for packaging and to reduce weight and volumewhilst retaining physical integrity and mechanicalfunction. Packaging can also be standardised and re-used. These principles can also be extended through-out the product design process so that the productitself is designed in a way that will reduce transportdemand.

Since 1994 BSN Emballage and Saint-Gobain havebeen offering new lightweight glass bottles: 300 ginstead of 380 g for 75 cl wine bottles. BSN noticedthat this change allowed an increased number of bot-tles to be loaded in a truck, and a corresponding costsaving of FRF 2–3 per bottle.

19

ACTION POINTS

1 Audit the performance of your vehicles. Have vehiclenumbers or vehicle kilometres increased faster than theincrease in goods delivered or economic return on goodsdelivered? If so, find an explanation and work out a wayof reducing vehicle numbers and vehicle kilometres.

2 Consider using a standard software package that willexplore different ways of making routine deliveries so asto reduce kilometres and vehicles. Ask the drivers and thecustomers for suggestions. Software works best whenused interactively with those having a day-to-dayinvolvement in doing the work.

3 Explore the possibilities of using either your own oranother company’s vehicle to fulfil another delivery task(e.g. waste packaging) when it is on an empty leg of ajourney.

4 Consider experimenting with new design solutions forpackaging to reduce the volume and/or weight ofpackaging and increase the number of units that can becarried or packed into a standard vehicle.

5 Introduce (initially on an experimental basis) computerlinks with vehicles to feed information through to driverson route selection and on the availability of loads near tochosen routes.

6 Consider moving towards a ‘hub and spoke’ system oftransport organisation to reduce the total number of lorrytrips and maximise the loading of vehicles.

In a joint project British Sugar, ExelLogistics/Tankfreight and Nestlé have produced the‘JID-95’, a revolutionary sugar tanker that can carryboth bulk sugar and packed goods. This tanker takessugar from York to Scotland and rather than returningempty uses the new technology to take packed choco-late crumbs back to York. This means that each returntrip now carries 45 tonnes of material rather than24 tonnes for a conventional sugar tanker.

VICO, a French mashed potato producer, changed thesize of its packaging boxes to improve the loading rateof the trucks rented for the delivery of its products.The combination of new packaging and specialisedsoftware for journey optimisation (VRS, developed byDiagma in France) increased the loading rate by 60 %.This reduced the requirement for trucks in a year by 2 000 (8 000 lorries are now rented annually insteadof 10 000 before the introduction of the eco-logisticssoftware) for the same amount of products deliveredand reduced distances travelled by 960 000 km andfuel used by 300 000 litres. The cost of the softwareinvestment was about EUR 60 000 and the paybacktime for the investment was less than one month.Even for a shipper loading 15 lorries per day (com-pared with 50–60 for Vico) the payback time on thecapital expenditure would be less than six months.

DHL International (UK) Ltd delivered 80 millionpackages to 70 000 destinations in 218 countries in1993. It has an action plan to improve fuel efficiencyby 15 %, which will save GBP 358 000 in a three-yearperiod. Achieving this target is linked to driver train-ing and initiatives such as its ‘team buses’. Instead ofindividual courier vans DHL has begun to use ‘teambuses’ for journeys from Heathrow to central London.Couriers sort the consignments on the bus en routeand deliver the goods on foot. The area covered bythese ‘foot deliveries’ is very similar to the norm inpostal service deliveries. This has reduced the numberof vans travelling in and out of London from 18 to 2per day and speeded up customer services and deliv-ery times which is good for business.

A combination of new design approaches to packag-ing, route scheduling and optimisation and telematicsoffers a powerful tool for companies wishing toincrease their productivity and profitability.Environmental improvements flowing from thesesame strategies will benefit everyone and will add tothe company’s reputation as a responsible and well-managed organisation.

21

City logistics

‘Partnerships between logistics

contractors are reducing

lorry numbers and improving

the urban environment.’

City logistics involves setting up new partnershipsand styles of cooperation between all those involvedin the logistics chain and in delivering/receiving goodsin city centres. These partnerships offer significantreductions in vehicle kilometres and truck numbersand are currently in existence in Germany andSwitzerland. City logistics is a very clear illustration ofthe importance of developing high-quality ‘software’to match high-quality ‘hardware’. The hardware in a transport operation is well understood and wellmanaged, e.g. vehicles and depots. The ‘software’relates to organisational linkages, cooperation, think-ing about marketing and packaging strategies andthinking about different ways of doing things. Citylogistics has taken transport operations into an area ofdevelopment that builds links and emphasises cooperation across all players and interest groups.

In Germany partnerships between logistics contractorsare reducing lorry numbers and improving the urbanenvironment. These partnerships (known as CityLogistik companies in Germany) are in operation inBerlin, Bremen, Ulm, Kassel and Freiburg. TheFreiburg example has several pointers to the futureshape of freight transport in urban areas. There arecurrently 12 partners in the scheme. Three of thepartners leave city centre deliveries at the premises ofa fourth. The latter then delivers all the goodsinvolved in the city centre area. A second group offive partners delivers all its goods to one depot locatednear the city centre. An independent contractor (CityLogistik) delivers them to city centre customers. Athird group, this time with only two service providers,specialises in refrigerated fresh products. These part-ners form an unbroken relay chain, one partner col-lecting the goods from the other for delivery to thecity centre.

The Freiburg scheme has reduced total journey timesfrom 566 hours to 168 hours (per month), themonthly number of truck operations from 440 to 295(a 33 % reduction) and the time spent by lorries in thecity from 612 hours to 317 hours (per month). Thenumber of customers supplied or shipments made hasremained the same. The Kassel scheme showed areduction of vehicle kilometres travelled by 70 % andthe number of delivering trucks by 11 %. This hasreduced the costs of all the companies involved andincreased the amount of work that can be done byeach vehicle/driver combination.

ACTION POINTS

1 Talk to your customers and other parts of the logisticschain to see whether or not cooperation can reduce thenumber of lorries that need to be in a city. Is it feasiblethat they could unload at an edge-of-town depot foronward delivery in smaller vehicles at quieter times? Canthese smaller vehicles be run on fuels other than diesel orpetrol?

2 Survey the pattern of deliveries in a city centre, office areaor industrial park. If deliveries are currently made to twoor more customers within a small geographical area bymore than one company, is there any possibility ofcombining the deliveries to geographically distinct areasor streets so as to reduce vehicle kilometres?

3 Consider combining forces with a company/organisationthat already makes city centre deliveries (e.g. vegetablewholesaler, post office) so that they can add yourdeliveries to their schedules.

2323

The future

‘Reductions in environmental

impacts generate

a double dividend.

Companies benefit from reduced

costs and an improved

competitive position.

They will be more attractive

to customers eager to buy

‘green’ products and services.

Environmental criteria are

moving to the forefront

in business decisions today.’

The future of freight transport in Europe will be farmore varied and full of opportunities than in the past.Companies are already responding to environmentaland business challenges that are making themstronger and more successful in their markets. In aderegulated and privatised world the opportunities forpartnerships, shared responsibility and new venturesare more common than in the past. Companies arealready cooperating with each other to improve citycentre deliveries and shared use of vehicles and facil-ities is no longer the rarity it once was.

Partnerships of this kind are at least as important asthe technology of vehicles, engines and electronic datainterchange. Close collaboration, high-quality facilitiesthat will make combined transport and intermodaltransport an attractive option and appropriate taxationincentives point a clear way forward to a more pro-ductive freight transport industry and one with amuch smaller environmental impact.

Partnerships are also likely in the area of tappingintermediate and closer supplies. A great deal of thegrowth of freight transport in recent years has beenthe result of sourcing goods over very long distances.Whilst in the past there have been sound economicreasons for a ‘distance-intensive’ strategy, it is nowrecognised that there may be benefits in sourcinggoods over shorter distances. This is analogous tomoving from an energy-intensive strategy to an energy-conservation strategy. It offers a way of avoiding con-gestion delays, reducing costs and building productivebusiness links on a regional or sub-regional scale. Italso opens up the possibility of creating a highly inno-vative ‘critical mass’ of entrepreneurial activity (theSilicon Valley effect).

In some cases the potential for substituting ‘near’ for‘far’ in purchasing decisions will not be great. Thisstill leaves scope for rail or waterways to take a greatershare of long-distance transport leaving the localtransport for lorries. A switch away from road trans-port for long-distance trips offers a number of advan-tages to both logistics firms and their clients. Both canbenefit from improved reliability and transportproviders can benefit from having more choice intheir exploitation of business opportunities.

Every manufacturing and logistic company can dosomething to reduce their costs and benefit the envi-ronment in a way that benefits everyone. Some will beable to do more than others and to select more itemsfrom the menu on offer in this sourcebook. The great-est gains in terms of reduced costs and improvedcompetitiveness are likely to flow from a combinationof many measures.

Reductions in environmental impacts generate a dou-ble dividend. Companies benefit from reduced costsand an improved competitive position. They will bemore attractive to customers eager to buy ‘green’products and services. Environmental criteria aremoving to the forefront in business decisions today.

24

Agence de l’environnement et de la maîtrise de l’énergie (ADEME)27 rue Louis-VicatF-75737 Paris Cedex 15Tél. +33 1 47 65 20 00Fax +33 1 46 45 52 36www.ademe.fr

ASDA Stores LtdASDA House-SouthbankGreat Wilson StreetUK-Leeds LS11 5ADTel. +44 1132 43 54 35Fax +44 1132 41 86 66www.asda.co.uk

BASF AGCarl-Boschstraße 38D-67056 LudwigshafenTel. +49 621 600Fax +49 621 6042525www.basf.de

BASFCOM Nederland BVPostbus 1019NL-6801 MC ArnhemTel. +31 26 371 71 71Fax +31 26 371 72 46www.basf.nl

Blagden Packaging LtdWestinghouse RoadTrafford ParkManchester M17 1DSUK-LancashireTel. +44 161 869 62 00Fax +44 161 848 72 85

British Sugar plcHead OfficeOundle RoadPeterboroughUK-Cambridgeshire PE2 9QUTel. +44 1733 563171Fax +44 1733 563068www.britishsugar.co.uk

British Telecommunications plcHead Office81 Newgate StreetUK-London EC1A 7AJTel. +44 20 73 56 50 00Fax +44 20 73 56 55 20www.bt.com

BSH Bosch-Siemens HausgeräteGmbHGartenfelderstraße 28D-13599 Berlin (Gartenfeld)Tel. +49 30 386 25 957Fax +49 30 386 26 799www.siemens.com/regionen

BSN EmballageSiège social64, boulevard du 11-Novembre-1918F-69611 Villeurbanne CedexTél. +33 4 72825171Fax +33 4 72827082www.bsn.fr

BTL/Schenker-BTL ABHead OfficeS-412 97 GöteborgTfn. +46 31 703 80 00Fax +46 31 40 75 22

Coca-Cola and SchweppesBeverages Ltd1 Queen Caroline StreetUK-London W6 9HQTel. +44 20 8 237 3000Fax +44 20 8 237 3700www.thecoca-colacompany.com

Deutsche Bahn AGStephenson Straße 1D-60326 Frankfurt/MainTel. +49 69 2657475Fax +49 69 2657500 / 2657555

Deutsche Kleiderspedition GmbH & Co KGWeichertstraße 5D-63741 AschaffenburgTel. +49 6021 344-5Fax +49 6021 34 49 99www.dks.de

DFDS Tollpost-Globe ASHovedkontor:Alfaset 3. Industivei 25Postboks 6441-EtterstadN-0605 OsloTel. +47 2232 9000Fax +47 2232 9001www.tollpost.no

DHL International UK LtdOrbital Park178–188 Great South West RoadUK-Hounslow TW4 6JSTel. +44 20 8 818 8000Fax +44 20 8 818 8141www.dhl.com

Diagma International75, rue de CourcellesF-75008 ParisTél. +33 1 44 01 00 20Fax +33 1 42 67 86 87www.diagma.com

Électricité de France (EDF)32, rue de Monceau F-75384 Paris Cedex 08Tél. +33 1 42 89 94 10www.edf.fr

Electrolux GroupS:t Göransgatan 143S-105 45 StockholmTfn. +46 8 738 60 00Fax +46 8 738 74 61www.electrolux.com

Euro Terminal Coevorden BV (ETC)(see Transportgroep Van der Graaf)

EVO (Ondernemersorganisatie voorLogistiek en Transport)Postbus 350NL-2700 AJ ZoetermeerTel. +31 79 346 73 46Fax +31 79 346 78 00www.evo.nl

Exel LogisticsSolstice House251 Midsummer BoulevardUK-Central Milton Keynes MK9 1EQTel. +44 1908 24 4000Fax +44 1908 24 4107www.exel.com

Fiege SystemzentraleJoan-Joseph-Fiegestraße 1D-48268 GrevenTel. +49 2571 9990Fax +49 2571 999888www.fiege.de

Henkel KGaAHenkelstraße 67D-40191 DüsseldorfTel. +49 211 7970Fax +49 211 7984008www.henkel.com

Horten KaufhausMönckebergstraße 1D-20095 HamburgTel. +49 40 328120

ICA SupermarketMinuthandlarvägen 2PO Box 9020S-120 04 ÅrstaTfn. +46 8 722 10 00Fax +46 8 585 509 91www.ica.se

IKEA International a/sNystrandveg 21DK-3050 HumlepaekTlf. +45 49 155000Fax + 45 49 155001www.ikea.com

Contacts

25

Karstadt Warenhaus AGHauptverwaltungTheodor-Althoff-Straße 2D-45133 EssenTel. +49 201 7271Fax +49 201 727 5216www.karstadt.de

KaufhofKaufhof Warenhaus AGLeonhard-Tietz-Straße 1D-50676 KölnTel. +49 221 2230Fax +49 221 223 28 00www.kaufhof.de

KF Konsument FörbundetPO Box 15200S-104 65 StockholmTfn. +46 8 743 10 00www.kf.se

Koninklijke AholdPO Box 3050NL-500 HB ZaandamTel. +31 75 670 15 02Fax +31 75 659 83 60www.ahold.com

Kraft Jacobs SuchardErzeugnisse GmbH & Co KGLangemarckstraße 4–20D-28199 BremenTel. +49 421 59901Fax +49 421 5993675www.kjs.de

Lane Group plcGaronor WayRoyal Portbury DockUK-North Somerset BS20 7XXTel. +44 1275 37 44 01Fax +44 1275 37 32 71www.lanegroup.co.uk

Mercedes Benz AGTürlenstraße 2D-70191 StuttgartTel. +49 711 25900Fax +49 711 2590162www.mercedes-benz.com

Ministerie van Economische ZakenDirectoraat-Generaal EnergiePostbus 20101NL-2500 EX Den HaagTel. +31 70 379 89 11Fax +31 70 379 63 68www.minez.nl

Ministerie van Verkeer en WaterstaatDGV (Directoraat Generaal Verkeer)Transactie Milieu en Energy-EfficiencyProjectPO Box 20901NL-2500 EX Den HaagTel. +31 70 351 70 48Fax + 31 70 351 69 39www.dgv.minvenw.nl

Ministerie van Volksgezondheid,Ruimtelijke Ordening enMilieubeheer (VROM)DGM (Directoraat Generaal Milieu)Directie Geluid en VerkeerRijnstraat 8NL-2515 SP Den HaagTel. +31 70 339 39 39Fax +31 70 339 12 80

Nestlé UK LtdHead OfficeSt. George's House, Park LaneCroydonUK-Surrey CR9 1NRTel. +44 20 8 686 3333Fax +44 20 8 686 6072www.nestle.co.uk

Otto Versand GmbH & CoWandsbekerstraße 3D-22172 HamburgTel. +49 401 6461 401Fax +49 401 6461 449www.otto.de

Royal MailHead Office: 148 Old StreetUK-London EC1V 9HQTel. +44 20 72 502888Fax +44 20 71 2502632

J. Sainsbury’sStamford HouseStamford StreetUK-London SE1 9LLTel. +44 20 7 695 60 00Fax +44 20 7 695 76 10www.sainsburys.co.uk

Saint GobainSiège SocialLes MiroirsF-92096 Paris-La Défense CedexTél. +33 1 47 62 38 00Fax +33 1 47 62 50 80www.saint-gobain-emballage.fr

Schenker AGZentrale — Alfredstraße 81 D-45130 Essen Tel. +49 201 87810Fax +49 201 8781 8334www.schenker.com

3 Suisses12 rue de la CentenaireF-59963 Croix CedexTél. +33 3 20 20 21 25Fax +33 3 20 20 34 68www.3suisses.fr

The Body Shop International PlcWatersmeadLittlehamptonUK-West Sussex BN17 6LS Tel. +44 1903 731 500Fax +44 1903 726 250www.the-body-shop.com

TNT UKUnit 6, Spitfire WaySpitfire Trading Est.HounslowUK-Middlesex TW59 NWTel. +44 20 8 5612345Fax +44 20 8 8483285www.tnt.com

Transactie Modal ShiftPostbus 20904NL-2500 EX Den HaagTel. +31 70 351 16 61Fax +31 70 351 16 95www.transactie.org

Transportgroep Van der GraafDe Mars 1Postbus 290NL-7740 AG CoevordenTel. +31 524 59 44 33Fax + 31 524 59 44 93

UK Freight Transport AssociationLtd157 St. Johns RoadTurnbridge WellsUK-Kent TN4 9UZTel. +44 1892 52 61 71Fax +44 1892 78 48 37www.fta.co.uk

VICO SA165, rue de la Belle-ÉtoileF-95947 Roissy CDG CedexTél. +33 1 49 90 11 77Fax +33 1 49 90 11 88

26

Sources

European Commission (1997)Good practice in improving environmental and business performance of transport inEuropean companies. Analytical framework and guidelines;Nodal Consultants, Intakta, Chalmers IndustriTeknik.

European Federation for Transport and the Environment (1996)The greening of freight transport in Europe. What can hauliers do, what can freight customers demand? Brussels.

McKinnon, A. C. (1996)Freight distribution and logistics: fuel use and potential savings; School of Management, Heriot Watt University, Edinburgh.

Company literature from Fiege Logistic GmbH & Co.,TDG and Exel Logistics.

Institute of Business Ethics (1994)Benefiting business and the environment, case studies of cost savings and new opportunities from environmental initiatives.

TNO (1992)EC policy measures aiming at reducing C02 emissions in the transport sector;TNO Institute of Spatial Organisation, Delft, the Netherlands.

OECD (1993)Cars and climate change; Paris.

ELTIS — Database: www.eltis.org

Photos: European Commission — Directorate-General for the Environment, DHL-UK, Siemens, Mercedes Benz.

European Commission

Good practice in freight transport.

Luxembourg: Office for Official Publications of the European Communities

2000 — 26 pp. — 21 x 29,7 cm

ISBN 92-828-4147-2