D 3.2 Targets and application of benchmarking in intermodal freight transport Rapp Trans AG, Zürich, Switzerland (martin.ruesch@rapp.ch)
Content Introduction Objectives and Purpose of Benchmarking Benchmarking Topics and Approaches Benchmarking in Intermodal Transport Benchmarking of Intermodal Chains Benchmarking at Terminals Conclusions and Recommendations
Important Input Transport Benchmarking: Methodologies, Applications and Data Needs, OECD, 1999 Benchmarking Intermodal Freight Transport, OECD 2002 Results of the ISIC Project (Integrated Services in the Intermodal Chain) relating to Task Improving the quality of Intermodal Terminals, 2005 Results of the PROMIT Project (Promoting Innovative Intermodal Freight Transport) relating to Benchmarking and Quality in Intermodal Transport Chains, 2009 PIARC activities in B.4 Freight Transport and Intermodality, Working Group 4.2 Interfaces of freight transport on roads with other modes, Working documents, 2009
Definition of Intermodal Transport The movement of goods in one and the same loading unit or vehicle which uses successively two or more modes of transport without handling of the goods themselves in changeing modes. (UNECE, 2001) C pre haul: - road - deep-sea transhipment - rail transport - inland shipping - short sea shipping transhipment end haul: - road - deep-sea C
Definition of Benchmarking Benchmarking is a systematic and continueing process of comparing the performance and quality of products, processes, services, strategies, policies, etc. based on clear targets and defined key performance indicators A Benchmark is a reference point of a measured best practice. Benchmarking is a tool to support and improve economic activities and policies.
Drivers for Benchmarking in Freight Transport Globalisation, Liberalisation and Competition Pressure for companies to increase efficiency and quality Pressure for companies to implement best practices and innovations Problems in freight transport pressure for governments to improve the transport system and make freight transport more sustainable pressure for companies to solve the problems Limited funds/financial means and ressources Pressure for governments to make better use of existing Infrastructure Pressure for companies to make better use of existing resources Increasing Customer requirements Pressure for companies to increase quality and reduce cost
Challenges in Freight Transport Limited capacity of the transport infrastructure (incl. Terminals) Limited financial means / funds for infrastructure extension Efficiency problems within freight transport chains Quality problems along freight transport chains Protection of the environment, energy, resources and citizens Climate Change Improvement of International Connectivity Safety and Security in Freight Transport
Reasons and Interests for Benchmarking Actor Government Shippers Logistics service providers Transport operators Facility operator Reasons / Interest for Benchmarking Assessing effects of policy on transport, etc. Assessing effects on economic growth Comparison to other continents, countries, regions Comparing cost and quality of different logistics and transport chains Preparing sound choice/decision of transport options Partly same reasons as shippers and as transport operators Comparing own performance against performance of others Implementing Best Practices and improving performance Comparing efficiency, service level and cost of operations (e.g. in seaport and inland terminals) Implementing Best Practices and improving performance
Levels and Topics of Benchmarking Actors Government (EU, National, Regional, Local) Benchmarking Level Policy Level Benchmarking Topics Regulatory Framework, Policy, Infrastructure Logistics and Transport Service providers (incl. forwarders, terminal oper. etc.) Shippers, Client Focus Company Level Customer Level Strategies, Activities, Processes, etc. (efficiency, productivity, etc.) Products, Services, etc. (Quality and Cost) Horizontal Benchmarking Vertical Benchmarking (Source: Rapp Trans based on European Commission)
Performance Management Cycle
Basic steps for Benchmarking (source: Transport Benchmarking, OECD, 1999)
Dimensions of Performance and Quality Indicators Dimensions for Performance Indicators Cost Productivity (Asset Utilisation) Efficiency Effectivity Dimensions for quality Indicators Reliability / Punctuality Flexibility / Frequency of services Accessibility Capacity / Value added services Safety and security Environment Human Resources and Qualification
Main Requirements for Performance and Quality Indicators covering the targets data available data accessible (especially if external benchmarking) low data collection effort (in case data are currently missing and have to be collected from operators side) measurable comparable possiblility for up-dates (source: ISIC, report on task D, 2005)
Requirements for a Benchmarking System Adress user needs and targets (benefits!) Covering the most important performance and quality dimensions Limited set of KPIs Reliable data base (transparent, valid, etc.) Comparability of own with best practice Identification of potential for improvement Good cost/benefit ratio (limited resources and time) Monitoring the development of indicators Implementation of changes
Benchmarking Intermodal Freight Transport Chains PROMIT = Promoting Innovative Intermodal Freight Transport Co-ordination Action in FP 6 supported by DG TREN Duration: 2006-2009 Budget: 2.8 M Euro Co-ordinator: PTV AG www.promit-project.net Project results Knowledge Experiences Expertise Good practice Contractors Subcontractors Interest Groups Experts Workshops Intermodal Innovation days Conferences WP 3 Best WP 4 Bench- WP 5 Intermodal WP 6 Promotion Practice marking strategies & strategy & and Quality Recommen- transferdationability CL 1: Organisation and Business Models CL 2: Intermodal Infrastructure and Equipment CL 3:Information & Communication technology (ICT) CL 4: Intermodal Operation and Services CL 5: Security, Safety, Legislation, Policy WP 2 WP SC 1 Network Coordination Project Management WP 7 WP 8 Promotion Implementation Dissemination Member states Local authorities Technology suppliers Associations Shippers Projects Policy makers Transport operators Intermodal operators Terminal operators Ports
Benchmarking Intermodal Freight Transport Chains WP4: Benchmarking and Quality Comprehensive process description of intermodal transport chains Developing performance indicators on efficiency and quality issues of operators Quantifying KPI in intermodal transport Presenting the benchmarking system in a user friendly format
Problems in Intermodal Transport Chains Problem areas Intermodal Main Haul Terminal Pre- and Chain Endhaulage Organisational Barriers Technical Barriers Infrastructural Barriers Operational, logistical and Service related barriers Financial and Economical Barriers Political Barriers (framework conditions) very high importance, high importance, low importance
Division of Intermodal Transportation in Abstraction Levels Division into 3 levels Level1: Transportation from source to destination as a black box Level2: Transportation from source to destination as a number of activities Source Road transport to a terminal Terminal Rail/Water/Other transportation Terminal Road transport to the destination Destination Level 3: Specific operations Unload truck Move aside Find Load to...
Key Performance Indicators
Main KPIs (1) Price (cost) This is the cost of sending a shipment or conduction an activity Lead time (transit time). This is time that passes from the moment when the activity starts (shipment leaves the source point) to the moment the activity finishes (shipment reaches the destination point). Effective mean lead time. This indicator is measured as the average lead time over several executions (shipments) Promised lead time. Promised lead time is the lead time that is promised by the service provider 95% reliability lead time. This indicator measures minimum time that has been required for 95% of all activities (shipments). On-time performance. Measured as percentage of activities (shipments) carried out within promised lead time
Main KPIs (2) Lead time variability. The best measurement: standard deviation Frequency of service. How often it is possible to conduct such a shipment (activity) Shipment compatibility. Indicates whether the shipment is compatible with the activity Loading units compatibility Business model compatibility Regulations compliance Cargo compatibility Damages (theft) during shipment (activity). Measured as Percent of damaged (stolen) goods measured in terms of value/quantity Percent of carrying units (e.g. 40 ft) containing damaged (stolen) goods
Important KPI s in the intermodal chain
Example of intermodal quality management scheme (1) Starting Point Brenner as strongly used corridor by road freight (and rail) Limited share of rail Brenner Action Plan Motivation Improving intermodal capacity Stabilising and improving quality and efficiency of intermodal transport to be more competitive against road Establishing the basis for long term growth of intermodal transport
Example of intermodal quality management scheme (2) One important part was the quality management system /quality agreement Objectives Improve the quality of services on the Brenner corridor Definition of service quality guarantees Definition of rules for measuring and evaluating quality Development of system of penalites Elements of the quality management system Punctuality Reliability Flexibility Customer information Rolling Stock Documents 90% (with max tolerance of 15 min) Max train delay of 180 min (related to 10% of non punctual trains) Cancellation of regular trains up to 48 hours prior departure without extra charge Interim time-table modifications within three months after submittal of request Real time monitoring of every train Reporting of ETA Co-ordinated international reporting system 95% rate of employment of agreed wagon set 99,9% rate of reliability of transport of accompanying documents (www.promit-project.net)
Example of intermodal quality management scheme (3) Benefits Improved reliability (max. delay time 180 min. for trains, 90% punctuality) More flexibility for time-table shifts 99.9% reliability for transport of documents Customer satisfaction increases through customer information system Increase of intermodal transport Benefits for environment and traffic on Brenner road 7,5 + 16 % Success Factors corridor approach main operators of the corridor joined the project focus on quality and customer satisfaction 4,0 7,0 6,5 6,0 5,5 5,0 4,5 + 13.5 % + 16.2 % 2003 2004 2005 2006
PROMIT Benchmarking Tool Transit Time Objective: Strong underperformance, e.g. > 130% Underperformance, e.g. 130%-110% Normal performance, e.g. 110%-90% Good performance, e.g. 90%-70% Excellent performance, e.g. <70% Self assessment of logistics/ transport performance Strong underperformance, e.g. > 130% Underperformance, e.g. 130%-110% Normal performance, e.g. 110%-90% Your performance: 85% Good performance, e.g. 90%-70% Transport Cost Excellent performance, e.g. <70% Gather Benchmarking information for transport options Strong underperformance, e.g. > 130% Your performance: 125% Underperformance, e.g. 130%-110% Normal performance, e.g. 110%-90% Good performance, e.g. 90%-70% Damages Excellent performance, e.g. <70% Approach: Your performance: 45% Visualisation of relative performance position Strong underperformance, e.g. > 130% Underperformance, e.g. 130%-110% Normal performance, e.g. 110%-90% Good performance, e.g. 90%-70% Integral performance Excellent performance, e.g. <70% Your performance: 85%
PROMIT Benchmarking Tool Data collection Users (companies) can enter their benchmarking data in a convenient and unambiguous way. Functionality and Information Flow Feedback generation The users (companies) receive an immediate feedback on their data. Research option It is possible to provide (restricted) access to the database for research purposes.
Current State Benchmarking Tool Testing of the tool during the PROMIT project 113 benchmarking records Benchmarking Tool Workshop in the Netherlands Quite a lot of interest from companies towards intermodal benchmarking data Fully mature benchmarking tool needed with reliable data base Higher sophisticated tool necessary which is more detailed relating to commodities, directions, etc.
Benchmarking Intermodal Terminals Freight Integration Initiative by DG TREN (2003-2004) Facilitating the organisation of international, intermodal freight transport. Basis for Consulting Project Integrated Services in the Intermodal Chain (2005) To provide all necessary information for the Commission to successfully prepare and implement the actions within the Freight Integrator Action Plan. This project must prepare the roadmap for implementation of the actions mentioned in the FIAP. Task A Co-ordination and management Task B Improving intermodal liability and documentation Task C Harmonising technical req s for for intermodal transport equipment Task D Improving Quality of Intermodal Terminals Task E Certification and Training for Intermodal Transport Task F CBA for all integrated actions of the FIAP Task G Promotion of Intermodal Transport
Benchmarking Intermodal Terminals To identify the objectives, purpose of the benchmarking system and target group; To describe the key terminal (port) processes in order to assess indicators used for benchmarking; To design a BS considering activities and resources necessary; To select indicators and evaluate values for best practices; To describe the benefits and costs for the users; To propose an implementation plan for benchmarking system. Terminals of European Importance Quality Label (incl. Certif.) Benchmarking Standardi- Sation (ISO, CEN, National) Terminal Funding
Problems at Intermodal Terminals Problem area Problem Efficiency Capacity Quality Unsuitable track topology and layout Insufficient railway access Infrastructure / Insufficient equipment / procedures for dangerous goods Equipment Lack of storage space Lack of exclusive parking area Limited extension possibilities Failure/Breakdown of equipment Insufficient road access Insuffiecient capacity
Problems at Intermodal Terminals Problem area Problem Efficiency Capacity Quality Insufficient management of terminal processes Inefficient gate procedures Insufficient management of incoming trucks Operation / Inefficient internal administrative processes Organsiation Restricted terminal opening times Insufficient terminal security procedures Insufficient cooperation between terminal operators and other actors (incl. communication) Insufficient intormation exchange (e.g. delays etc.) Low equipment performance
Chosen Benchmarking approach Combination of process benchmarking (terminal operator) and general benchmarking (authorities) Arrival of truck with ITU at gate Gate entrance, proceeding to waiting area Proceeding to sector on loading lane Focus should be on process benchmarking (management tool for continuous improvement) Transhipment to barge Transhipment to rail wgon wagon Transhipment to storage General benchmarking should allow rough comparison between terminals in performance (and quality) Consideration of terminal variety Loading of barge finished Loading of wagons finished Truck proceeding to gate for exit Shunting Departure of barge Departure of Train
Important indicators for terminals Performance indicators Transhipment volume / Throughput Terminal productivity Utilisation rate (%) Total terminal costs per ITU Transhipment costs per ITU Operational process costs Administrative process costs Energy consumption per load unit Crane rate and crane load Quality indicators Cut-off-time Waiting times Turnaround times for trucks, train, barge and vessel Opening hours Possibility for short time deliveries Accessibility / connection to main road or rail net Hinterland connection Slotting availability Loss frequency Damage frequency Damage to loading unit Security features and control
Aggregation over processes Process Indicators Single Process group ID Name Unit Type of time Measurement Meas. unit Arrival = A 1. Arrival of truck with ITU at 1 α Entry waiting time per truck Truck Waiting Average Minutes gate 1 β Trucks per hour at arrival Truck Waiting Total Number 2. Gate entrance, proceeding to 2 α Waiting time per truck at waiting area Truck Waiting Average Minutes waiting area Positioning = P 2 β Waiting time per truck at waiting area (% of total) Truck Waiting Percentage % 3. Proceeding to sector on loading lane 3 α Time necessary from waiting area to loading lane Truck Processing Average Minutes 4 α Crane rate (unloading time of a ITU from truck) ITU Processing Average Minutes 4 β Waiting time per ITU at storage area before loading ITU Waiting Average Minutes Storing = S 4 Waiting time per ITU at storage area before loading γ 4. Transhipment to storage (% of total) ITU Waiting Percentage % 4 δ Time needed from storage to loading area ITU Processing Average Minutes 4 ε ITU stored before loading per week ITU Waiting Total Number 4 φ ITU stored before loading (% on throughput) ITU Waiting Percentage % 5 α Crane rate (loading time of a ITU to train) ITU Processing Average Minutes 5 β Number of loaded ITU per hour ITU Processing Total Number Transhipment 5. Transhipment to rail wagon 5 γ Waiting time per ITU at loading area before loading ITU Waiting Average Minutes = T 5 δ Waiting time per ITU at loading area before loading (% of total) ITU Waiting Percentage % 6. Truck proceeding to gate for exit 6 α Exit time per truck Truck Processing Average Minutes 7. Loading of wagons finished 7 α Time needed for monitoring operations per train Train/wagons Processing Average Minutes 8. Shunting 8 α Shunting time per train Train/wagons Processing Average Minutes Departure = D 9 α Waiting time per train from shunting to departure Train Waiting Average Minutes 9. Departure of trains 9 β Waiting time from shunting to departure (% of total) Train Waiting Percentage % 9 γ Departures (train processed) per week Train Processing Total Number Average waiting time at arrival Average time for positioning Average time for storage Average time for transhipment Average time for departure Process group indicators 1 α 2 α + 3 α 4 + α + 4 β 4 δ 5 + α + 5 γ 6 α 7 + α + 8 α 9 α Unit Truck Truck ITU ITU Train
Aggregation of Indicators Time per process Time per Unit
Proposed Indicators Indicator Meas.unit. Ref. values/range Average waiting time at arrival Minutes 19 40 Average time for positioning Minutes 30 Average time for storage Hours 3 Average time for transhipment Minutes 5 60 Turnaround time for trucks Minutes 10 60 Total waiting time for trains Hours 5 10 Cut-off time Minutes 30 480 Trucks per hour at arrival Number 12-15 Departures (train processed) per week Number 30 (provisional values!)
Indicators for authorities Indicator Throughput per surface Utilisation rate Crane load Ship rate Berth load Energy consumption per load unit Space Consumptions Noise Emission Exhaust Emission per load unit Damages per transhipped load unit Damage to dangerous goods Number of accidents in terminals Number of accidents in ports Description Total number of ITU per year per hectare in % (realised transhipped volume/theoretical capacity) during one year Total annual throughput (ITU)/ total number of cranes Loaded and unloaded TEUs or containers per crane per hour Ratio between total annual throughput / total length of berth KWh / ITU (yearly average) In square metres per load unit In dba per daytime CO2 per load unit In % of cases In % of cases Total number of accidents per year Total number of accidents per year
Benefits of Benchmarking Increase efficiency, productivity, quality and capacity of intermodal transport increase profitability create modal shift Identify problems and best practices Overcome routine-blindness Continuos Learning Benefit/cost ratio >> 1 (result of ISIC study)
Success Factors for the Implementation of Benchmarking High-level commitment and willingness for improvement and change Understand benchmarking as tool for improvement and not for control (esp. external benchmarking) Benchmarking scheme must cover main issues in the transport and logistics chain Common agreed targets and performance indicators Accessibility of external data (for comparison) Comparability of Indicators (not comparing apples and oranges!) Standardised and harmonised definitions and measurement Monitoring for continuos improvement Integration of staff and stakeholders
Conclusions Benchmarking can be used to improve business processes and to support policy Benchmarking is an important tool to identify innefficiencis, quality gaps, etc. to implement changes to increase competetivity to create modal shift Benchmarking should provide results on process, activity level and on aggregated level as well. Important: small, but complete set of indicators, that cover essentials of the business and give its sense of direction. KPIs are also suitable for quality agreements, quality labels or certification. Benchmarking is beneficial (benefits/costs ratio >>1)
Recommendations To further develop and implement benchmarking schemes for company internal and external use To standardize and harmonize definitions of indicators and also measurement methods. Standardisation within CEN and ISO could support this. To evaluate the cost and benefits of benchmarking To sensitize staff and stakeholders about the potential of Benchmarking.
Thank you very much for your attention!
More Information, MSc Civil Engineering Member of the Management Board / Partner martin.ruesch@rapp.ch www.promit-project.net