TRANSPORT MODES AND THE CONSOLIDATION OF TRANSPORT LOTS

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1 TRANSPORT MODES AND THE CONSOLIDATION OF TRANSPORT LOTS November 2002 Department of Forest Economics, University of Helsinki Visit: for updates

2 General When weighing between different modes of transport one should pay attention to several factors: Transport costs including all handling and warehousing costs Suitability of the transport mode for the specific product Transport time Reliability and safety of inter-modal transport (combined transport) Unitizing and packaging required by the transport We will take a look at the characteristics of some transport modes used in the Finnish forest industry, which have to be taken into consideration when decisions on transport are made. It is common that companies use more than one transport mode in exports. Most transports are combinations of several transport modes. (Juslin, Neuvonen) Truck transport Truck transports are a common transport mode at both ends of a physical distribution chain: at departure from the factory to the railway station or port and at arrival from the port of destination to the warehouse of the customer. Truck transport bears the highest unit costs per kilometer. Its use is worthwhile on shorter distances. However, truck transport may become favorable because of the following reasons: Continuous transport to customer is possible (no discharge or loading). Truck transports are fast. It is easy to combine truck transport with other modes of transport. (The whole truck or only the trailer can be put on board a ship.) (Juslin, Neuvonen) Companies may be in possession of their hauling equipment or they may take advantage of the services provided by transport companies. As far as the large forest industry companies are concerned, the transports to and from ports both domestically and abroad are based on contractual transports. The forest industry companies have made long term contracts with individual truckers and transport businesses to regularly freight the company s products. (Juslin, Neuvonen) - 1 -

3 FULL TRAILERS have two stowage spaces that can be disconnected from each other and which make it possible to load simultaneously in two different places. They enable the truck to move also in narrow spaces. The working load of this truck type is bigger than the working load of a semitrailer. A 22-meter full trailer combination has a volume of 140 m³. (Pehkonen) SEMITRAILERS have a continuous stowage space. The maximum length of the cargo platform is 13,6 meters. Semitrailers can carry longer items than full trailers. Due to the length of the vehicle, maneuvering is much more limited than with full trailers. The operation costs of semitrailers are lower. (Pehkonen) In Central Europe the maximum length of a full trailer is 25,25 m. The vehicles are called modular trucks. Finland and Sweden, as members of the European Union have to allow the use of these trucks on their roads by the end of the year (Pehkonen) Railway transport Railway transports are especially suitable for the carriage of large lots on longer distances. Railway transports are characterized by: Moderate carriage rates Reliable and secure time schedule based transports Like in sea transport, an advance transport and delivery transport (by truck) are normally required (Juslin, Neuvonen) Rail transport is used as a means of domestic transport in the export chain especially if the distance to a port is long. Combining railway transport with sea carriage is an option worth considering. This is called RAILSHIP in Finland. In this transport mode merchandise is loaded on a rail car either at the company s own railway yard or at the closes railway station. The freight train takes the rail cars to a port (Hanko in Finland) where the truck groups of the rail cars are changed to tally with the Central European rail gauge. Then the rail cars are put on board a ship and transported to the port of destination. A local train takes the rain cars from the port of destination to the rail yard of the customer. The main benefit of these railway dispatches is their reliability. Deliveries travel according to timetables and merchandise does not need to be handled during the transport. Depending on the sellers and buyers locations railway transport can also be a very affordable option. (Juslin, Neuvonen) - 2 -

4 Sea transport Sea transport forms usually the main part in the export transports of forest industry products to Central European markets. The cargo unit costs per kilometer are normally the lowest in sea transport. However, one has to consider the whole delivery chain, when estimating the advantageousness of sea carriage: advance transport to a port, port charges at departure and arrival, the sea transport itself, as well as possible reshipment costs. Sea transport may even set special requirements for packaging. Sea transport can be divided into two modes of transport: tramp shipping and liner shipping. Please see more about this issue in document Shipping. Now we will take a look at different vessel types. (Mikkola, Myrttinen) LO-LO (lift on lift off). In this particular vessel type, the cargo is loaded and unloaded through the hatches by either the ship s or the harbor s cranes. Conventional vessels usually have small hatches in relation to their vessel length and the weak power of the cranes usually reduces the loading efficiency. In order for the in-loaded cargo to be securely situated in the hold, it often has to be vertically moved in the hold. For the transport of forest products, LO-LO vessels are rather inconvenient and their importance in transport has diminished. Only ships with large, square formed holds and wide hatches can be considered suitable for forest products. (Mikkola, Myrttinen) In open vessels, on the other hand, the hatches are almost the length of the entire vessel and the cranes efficiency has been increased and their positions optimized. The loading space is box-like and the walls vertical. Open vessels operating on the LO-LO principle have continuously increased in popularity and can be well applied for pulp, paper, cardboard and chipboard transports. Sawn timber is often transported as deck cargo. Efficient use of the vessel, however, requires that the lots be consolidated. (Mikkola, Myrttinen) RO-RO (roll-on roll-off) vessels can be defined as vessels where the cargo is loaded on and off by rolltrailers through the front or aft ramps. Sometimes loading can also occur through the side (side-port). The rolltrailers or sometimes platforms stay on board for the voyage. The cargo is loaded on to these trailers with a forklift. Finally, for safety reasons, the cargo units are fastened onto the platforms or trailers in the ship s hold. (Mikkola, Myrttinen) The RO-RO system enables the transport of different sized goods, which can already be loaded onto the rolltrailers before the actual vessel has arrived in the port. This accelerates and makes the loading of goods more flexible. Moreover, the loading and unloading of the ship can be conducted simultaneously in RO-RO vessels. RO-RO can be especially well applied in short liner shipments. Some disadvantages involved in the RO-RO system are, however, the big investments, as well as the high utilization costs, the laborious fastening of the cargo and the high number of employees required. (Mikkola, Myrttinen) STO-RO (stowable RO-RO) vessels have rolltrailers rolling the cargo in and out of the ship. The cargo is unloaded from the trailers with a forklift and stowed in the hold. Rolltrailers and forklifts are removed from the ship for the duration of the voyage. (Mikkola, Myrttinen) STORO-SIDE systems imply that the vessel is loaded and unloaded using either the side hatches or the stern ramp and rolltrailers. The rolltrailers are removed from the vessel for the duration of the voyage. The goods are stowed with the help of a forklift. (Mikkola, Myrttinen) - 3 -

5 SIDELOADER vessels load and unload the cargo through the side hatches. The goods are stowed using forklifts, which often are part of the ship s equipment. (Mikkola, Myrttinen) COMBINED VESSELS can be loaded using different methods. For instance, the super liner vessel can be loaded with the LO-LO system using a boom; the truck to truck system using the side hatches, or with the RO-RO system using the stern ramp. These three methods make the combined vessels very efficient, as loading methods can vary greatly in different countries and ports. Combined vessels are also very convenient for long voyages and for exporting forest industry products. (Mikkola, Myrttinen) TRAIN FERRIES connect railway systems across seas and are used, for example, between German and Swedish railway systems. This type of system enables exports to be carried out by train from Finland to Central Europe without having to reload the carriages at any stage of the voyage. This is made possible by changing the carriages shafts and trucks to narrower ones in the port of departure. Train ferry transport has slowly increased in popularity. (Mikkola, Myrttinen) LIGHTER TRANSPORT tries to have the expensive cost generating manned machinery in continuous use. The machinery brings the lighter onto the loading place and immediately receives a new loaded lighter in replace there are three different alternatives for transport: 1. The lighter is loaded onto the main vessel for the duration of marine transport (LASH Lighter Aboard Ship system) 2. The butting-system consisting of a floating storage and its pusher tug (pushing lighter) 3. The towing of the lighter by a towboat, which is inexpensive and simple. The pushing lighter is most probably going to be further developed in the future even though it would also be fruitful to develop lighters situated on the main vessels. In lighter traffic, distances should be short so that the times spent in harbor form a considerable part of the entire transport. In addition, the flow of goods should be smooth and consist of large quantities. (Mikkola, Myrttinen) MULTIMODAL TRANSPORTS use a combination of road, sea and railway transport. This type of mode of transport requires its own multimodal transport documents as it cannot merely function on, for example, bills of lading. The problem is which terms, shipping or railway terms are to be followed and to what extent each of these terms are to be combined for this mode of transport. This combination of transport modes is especially popular in transit traffic and on long journeys involving a variety of terrains. (Mikkola, Myrttinen) The cargo-carrying capacity (tonnage) of a boat is given in register tons (vessel ton). One register ton is: 100 j³ = 2,83 m³. The total volume of the vessel is reported in gross register tons and the cargo space is given in net register tons. (Pehkonen) The load carrying capacity of a vessel is measured in dead weight tons (dwt). It informs how many tons of cargo, people, fuel and other materials the vessel can take. (Pehkonen) Displacement tons stand for the weight of water in tons that the vessel displaces. In container traffic the unit of measure is TEU (Twenty feet Equivalent Units) which tells how many 20-ft containers the vessel is capable of carrying. (Pehkonen) - 4 -

6 In order to avoid excessive loading load lines have been painted on the vessels flanks. There are several different load lines for different seasons and sea areas. (Pehkonen) The consolidation of transport lots During consolidation, numerous small packages or parcels are combined to form bigger, transportable units. These bigger units need to be easily transportable. Depending on the product, a unit can be packages, pallets or rolls of, for instance, sawn timber. The weight of a unit is between kg. Extra big units could be, for instance, containers, trailers, platforms, or train carriages. The use of big units is growing. Super units might be consignments even up to 150 tons. Reasons why the transport of units has increased are because they speed-up the loading maneuvers, reduce the need to handle the goods and they can be transported on many different modes. With the development of freight traffic, unified goods will gain a competitive advantage over non-unified goods. There are, however, some restrictions for using unified goods. For instance, the goods need to be arranged in a way that they do not have to be unpacked in the port of destination due to their inconvenient size and shape for safety reasons. The consolidation should therefore be ordered and planned according to the wishes of the buyer. (The source of this chapter: Mikkola, Myrttinen) References: Juslin, H. & Neuvonen, J Metsäteollisuustuotteiden markkinointi. Opetushallitus. Pp ; pp ISBN X. Mikkola, M. & Myrttinen, S The Forest Industry s Transportation Systems in Export. University of Helsinki. Department of Forest Economics. Pehkonen, E EU-Suomen vienti- ja tuontitoiminta. WSOY. P ISBN