Case Study. Transport collaboration - Carpathia Express. European Commission

Transcription

1 Case Study Transport collaboration - Carpathia Express European Commission

2 THE PLATFORM If transport continues to grow at the same rate as the economy, this will become both an economic and an environmental problem. lncreasingly congested roads are as much a disadvantage to European business as they are to society at large. The bestlog project, initiated by the European Commission, will establish an exchangeplatform for the improvement of supply chain management practice across Europe. OBJECTIVES To improve logistics practice and logistics education To raise the overall standards of practice across Europe To set high standards for logistics education and practice To create economic growth and job opportunities as a result Achieve a better match between EC policy and business decisions SOLUTIONS & ACTIVITIES European platform for sharing logistics best practice Online directory of logistics best practice case studies Online directory of European logistics education opportunities Benchmarking on line for European companies European conferences to share logistics best practice Web forum, award directory, media directory, and more lndustry workshops

3 Transport collaboration - Carpathia Express PROBLEM DESCRIPTION The development of transportation during the 20th century and in recent years in the Czech Republic has mostly favoured road transport, while rail transport has been left behind. In summary: Road transport has grown 2.5x (by 1997) Freight volumes in rail transport have declined by 50% Freight volumes steadily declined until 2002; A pessimistic estimate of the annual revenues of the Czech national rail freight provider for the three years from 2002 suggested further decline of some 17% The ratio of rail/road transport volume is 24.5% (rail) to 71.9% (road) As market development brings ever larger percentages of small and lightweight shipments into total freight volumes, the competitive advantage of rail transport has been declining substantially Some local rail tracks have been closed Large number of traditional manufacturers have either shifted their operations to other markets or closed their railway sidings Government support of rail transport has recently been very weak This background, together with the recent growth of environmental concerns and a desire to offer progressive and innovative services, resulted in the launch of the CARPATHIA EXPRESS project and the formation of the Carpathia Group, an independent train operator owned by three established freight forwarders from the Czech Republic and Germany in cooperation with three national railroad operators. The productivity of rail transport has been steadily declining in recent years. This fact, together with a desire to develop a new innovative product for existing as well as potential customers, has lead a team of logistics professionals to design a brand new commercial logistics project. It builds on the close cooperation of these three traditionally competing freight forwarders and three national rail transport providers with the ultimate aim of maximizing the resource utilization of all parties involved and at the same time increasing the productivity and competitiveness of rail transport. COMPANY FACTS Company name: Carpathia Group Location: Czech Republic Industry/sector: Transport Company size: Small Employees: 15 Turnover: 20 mio. (2007) Services/products offered: Regular transport of goods from CEE region to the Balkans via an integrated freight train. Other case-related facts: Route: Havlickuv Brod (CZ) - Brno Malomerice Breclav Bratislava (SK) Curtici (RO) Total route distance: 715/722 km Total transport time: 27/28 hrs Frequency: 33 trains per month in average Train capacity: min tons per months

4 THE SOLUTION The name CARPATHIA EXPRESS clearly illustrates the route on which the Group s shipments are transported. The project partners were not chosen randomly - they comprise forwarding agents and railroad companies. It is forwarding agents, as well as logistics providers, who decide on which route and which transportation mode will be used in individual cases. Railroad companies are usually in charge of the entire infrastructure and a full range of rail coaches; Moreover, they have considerable expertise in various international transport technologies. Traditional competitors - Argo Bohemia s.r.o., Spedi-Trans Praha, s.r.o. a Raabersped Speditionsgesellschaft m. b. H. each market leaders in their own logistics markets - decided to override their own corporate interests for the sake of this project in favour of a joint effort. Each project partner took advantage of its knowledge of and professional expertise in the flow of shipments from the CEE region to Balkan markets. All researched carefully the pros and cons of individual transport modes in terms of their capacity, quality, speed, etc. on one hand, and the requirements of customers on the other. The following results have been achieved : A working team emerged leading to the establishment of the Carpathia Group Business policy was set and a reservation system launched Operational rules were defined for train technology A decision was made that the CARPATHIA EXPRESS logistics train will be available for public use. The CARPATHIA EXPRESS logistic train is a fast integrated commercial connection designed for the movement of truck load shipments and containers from the CEE region to South Eastern Europe. CARPATHIA EXPRESS is open to all interested parties who may wish to use it for their shipments via Carpathia Group. Carpathia Group acts as an independent train operator.

5 CARPATHIA EXPRESS freight trains are open for all types of truck load shipments from domestic and international shippers with the exception of the following: Military transport Private empty rail cars INTERFRIGO-governed shipments Oversized shipments Livestock The first shunting station for CARPATHIA trains is Havlickuv Brod. Other shunting stations are Brno-Malomerice, and Breclav. The train s terminal destination is either the city of Curtici where shipments are sorted and distributed to their final destinations (Route length, 715km, journey time 27 hours) or alternatively the city of Episcopia Biharhere, where shipments are sorted and distributed to their final destinations in northern Romania and Moldavia (722km, journey time less than 28 hours). The technology of CARPATHIA EXPRESS allows it to accept consignments from Western Europe via Czech-German and Czech-Poland border crossings. It is vital for the project that the service can meet JIT logistics technology requirements. CARPATHIA EXPRESS also supports standard hub-and-spoke logistics patterns, being regular, fast, spacious, and providing reliable connections, which allow for the creation and use of a logistic centre for collection and delivery of shipments, and for their re-distribution. CHALLENGES Challenge 1: Pooling the individual customers of the project partners into services subsequently provided by the Carpathia Group Challenge 2: Forming a common sales strategy Challenge 3: Increasing productivity and countering negative trends in the transport industry, despite the overall decline of rail freight volumes (on a given route) Challenge 4: Radical reduction of contemporary standard transport journey times Challenge 5: Cut overall costs in a way that enables operators to cut the prices charged to their customers substantially Challenge 6: Increase in competitiveness Challenge 7: Ensuring transport and pricing flexibility while adhering to fair-play principles

6 LESSONS LEARNED AND SUCCESS FACTORS The cooperation of formerly competing companies yields substantially reduced costs for all partners involved, and ultimately, also reduces final transport costs for most customers A well-defined sales policy, together with the right technology, can yield a remarkable increase in rail transport volumes regardless of the overall stagnation of the rail transport market in Europe Looking back, it is obvious that the original decision was right; the introduction of a direct integrated train on a given route has resulted not only in the reduction of the operating cost of a single railway carriage, but has also generated new custom as well as increased overall annual turnover for all parties involved. When offered regular, reliable and fast services at competitive prices, customers are willing to shift their shipments from road to more environmentally-friendly modes Partnership of industry competitors with similar transport streams can generate a critical mass of individual shipments which can hardly be generated on so large a scale by a single entity Jan Götthans, Project Principal

7 SUSTAINABILITY THE BENEFITS Dramatic reduction in journey time Faster turnover and improved loading efficiency of rail coaches Cost reduction which ultimately leads to the reduction of transport costs for individual customers Increased competitiveness of rail transport between Czech (and the broader CEE region) and Romania (and the surrounding markets) The combination of shipments generated by individual partners helps reach critical mass It is very important that the technology applied meets the requirements of customers who prefer JIT and/ or Hub-and-Spoke scenarios. ++ Economic Average 66% saving on journey times compared to other transport modes High quality one-stop-shop - type of service for project customers including checkin, space reservation, despatch operations, etc. The product developed product is widely available and beneficial not only for local customers, but also for customers located in western and northern Europe The original customer portfolio during initial 6 months of commercial operations was extended by 400% ++ Environmental CO2 emission reduction as a result of the transfer of a remarkable quantity of shipments from road to rail As a result of the centralization of shunting operations to just a few railroad railheads, the noise emissions caused by rail tractor units (engines) have decreased substantially along the entire CARPATHIA EXPRESS project route(s) Social ++ N/A CHALLENGES TRANSFERABILITY Transferables Country Implementation of similar schemes elsewhere is feasible and is not limited to any particular railroad company, forwarder, or location. + Sector + Company Size + Limitations The only limitation is the presence of a real desire shared by several entities to share their knowhow and customer portfolios in order to enhance their business opportunities, with the ultimate aim of increase overall business volumes and individual revenues. ++: very high, +: high, o: neutral, -: low, --: very low

8 Contact Resources Network Design Procurement Sourcing People Best Practice Topics in bestlog Customer Product Tactical Planning Transport Production Information & Communication System Markets & Strategies Reverse Distribution Structures & Planning Infrastructure Processes & Operations Enablers & Support PROJECT SECRETARIAT Berlin Institute of Technology H90 - bestlog Strasse des 17. Juni Berlin - Germany Phone: Fax: info@bestlog.org Web: European Commission Rumler, Miroslav. Reliant s.r.o. (2008): BestLog Good Practice Cases. Transport collaboration - Carpathia Express. Published by BestLog Project.. This document, including but not limited to text and photographs, is protected under copyright. The copyright owners admit the use for informatory and training purposes. Any commercial use of the document or parts thereof is prohibited.