The Integration of Railway Traffic as a Part of Global Logistics Solutions

1
The Integration of Railway Traffic as a Part of
Global Logistics Solutions

• Logistics Oulu 2002 Logistics Event 28.8.2002
• Mirja Mutikainen, Development Manager,
• VR Group Oy

2
Presentation Themes

• The demand for global logistics solutions is
  growing (Logistics report by the Ministry of
  Transport and Communications, 2001)
• The integration of production Combined rail and
  road transportation (intermodal transportation)
• Rail traffic as a part of global logistics
  services examples from elsewhere
• Global logistics services are offered to the VR
  Group cargo customers
• Electronic commerce integrates the value added
  chains of the clients and the professionals in
  the field

3
The demand for global logistics solutions is
growing (Logistics report by the Ministry of
Transport and Communications, 2001)

• The focus of the development of logistics in the
  late 1990s
• improvement in reliability of deliveries
• increase in the number of deliveries
• decrease in the size of a delivery
• tailoring services
• decrease in the time between the order and the
  delivery
• The focus of the development of logistics in the
  early 21st century
• flexibility, ability to react
• integration of information systems
• comprehensive control over the delivery network
• The most important developments in the next few
  years a more wide-ranging use of logistics
  service companies and the concentration of
  deliveries between companies and sectors

4
The demand for global logistics solutions is
growing (Logistics report by the Ministry of
Transport and Communications, 2001)

• Trends
• companies are concentrating on their core
  know-how
• thinking in terms of co-operation and
  partnerships becomes more common
• the position of logistics as a factor in
  competition and a source of added value is
  emphasised
• the intensity of information in logistics is
  growing
• the level of know-how in logistics should be
  increased
• HOWEVER
• Global logistics are not comprehensively offered
  in Finland
• logistics services were given a school grade of
  7½ / 10

5
The integration of production Combined rail and
road transportation (intermodal transportation)

• Framework transportation by train, collection
  and delivery by road combination vehicles,
  lorries, containers, exchangeable crates
• Finland should be an opportune area for combined
  transportation
• long distances
• limitations concerning the driving and resting
  times on the roads
• fuel price development
• projects to increase the speed of cargo trains
• The volumes of combined transport are growing
• Turku/Helsinki/Tampere - Kemi/Oulu volume grew
  from 14,400 units (25,900 TEU) in 1997 to 23,100
  units (45,700 TEU) in 2001
• A study on the feasibility and markets of
  combined rail and road transportation in North
  2/2002 potential for combined transportation
  between Kuopio and Southern Finland may be up to
  33,000 transported units per year
• TSR container traffic (see next slide)

6
TSR Trans-Siperian rata
Trans Siberian Railway Traffic on guarded trains
nearly every day
Trans Siberian Railway Traffic on guarded trains
nearly every day
Traffic volumes in trade with Finland
12 days 5-7 days Kiina China Japani
Japan E-Korea South Korea
Imports
Exports
12 days
5-7 days
Japan
South Korea
China
7
The integration of production Combined rail and
road transportation (intermodal transportation)

• HOWEVER
• too much capacity in the lorry business forces
  road traffic to compete with prices
• generally, transportation flows are small and
  divided the binding train timetables are a
  limiting factor
• the majority of import/export container
  transportation and framework transportation for
  the retail trade are not transported for long
  enough distances to make use of trains economical
  (gt 240350 km) in Finland
• the layouts in industrial plants do not always
  support dispatched containers they are lacking
  in technology
• Central influencing factors
• The completion of the terminal for combined
  transport at Oritkari
• Vuosaari Port

8
Rail traffic as a part of global logistics
services examples from elsewhere

• In the summer of 2002, Deutsche Bahn bought the
  majority of Stinnes Logistik (Schenker)
• the central aim was the ability to offer major
  clients global logistics services
• The development activities of Green Cargo in
  Sweden
• Road and Logistics operations
• Celexor Ab founded to serve IKEA and similar
  clients requiring comprehensive services
• Wilson co-operation
• UK
• rail operators coalitions with road traffic

9
Global logistics services are offered to the VR
Group cargo customers

• According to the clients wishes, the services
  offered can include parts of special delivery
  parcels to whole trains
• Transpoint services
• Combitrans services
• VR Cargo services
• Transuotila services
• Group companies and partners in value added
  logistics services
• The whole trains concept offered by VR Cargo has
  significant potential, when it is genuinely
  integrated into the customers production
  logistics
• utilisation to be designed in co-operation with
  the client
• good examples are the raw wood transportation
  (Eastern Suomi) and paper transportation (Jämsä
  River Valley, Kajaani-Rauma)

10
Global logistics services are offered to the VR
Group cargo customers

• The benefit and extra value for the client
  derived from our global services
• Fewer contract partners / contracts (easier to
  manage).
• The readiness of a reliable and professional
  operator to take up and manage outsourced
  operations in the whole country
• Optimisation of rail and road traffic (avoiding
  optimisation in part)
• Ease of planning and control of transportations.
• Logistiikan hoitoon sitoutuneiden resurssien
  minimointi (ei päällekkäisyyttä)
• Flexibility and reliable deliveries
• Availability of consultation and development
  resources
• High-quality information systems and their
  constant development
• Certified quality and environment system.
• Readiness and willingness to undertake new
  challenges.
• Professional, knowledgeable personnel and network
  of co-operation partners
• Client and service orientated

11
Electronic commerce integrates the value added
chains of the clients and the professionals in
the field

• The VR Group is a national forerunner in the EDI
  message intermediation. EDI is complemented by
  for example
• extranet type solutions in bilateral data
  transfer
• RailTrace for the monitoring of dispatches and
  carriages
• service portals
• the results of the VIPRO project are utilised
  when the data transfer related to export traffic
  is being intensified
• Data transfer systems in TSR traffic the
  information from a container train sent to the
  border station in advance to enable efficient
  handling of the cargo
• In the future taking part in selected sector
  specific portals as a logistics service provider