Kalmar unveils fully electric medium-range forklift

Kalmar, part of Cargotec, has launched a new range of fully electric forklift trucks in the 9–18 ton range.
According to Kalmar, the electric forklift trucks offer the performance of a powerful diesel truck without the accompanying air emissions, noise and vibration, and with reduced operating costs.
The battery capacity of the forklifts reportedly enables them to operate for a full eight-hour shift, and Kalmar noted that they are future-proofed to operate with new lithium-ion battery technology.
“At Kalmar, we aim for zero emissions in our offering development across the board,” said Peter Ivarsson, Director – Forklift Trucks, Kalmar. “We’re proud to be the first leading manufacturer to offer a full range of electric forklift trucks with this level of lifting capacity. Our electric machines offer savings in terms of faster and simpler maintenance, making them a winning concept in the long run.”

Isuzu signs on with MEGATRANS2018

Truck manufacturer Isuzu has announced its support of multi-modal supply chain event MEGATRANS2018, joining the show as a Platinum Sponsor.
Isuzu, a market leader in the Australian transport industry for 28 consecutive years, joins key partners including the Victorian Government and the Port of Melbourne in supporting this inaugural trade show event, which takes over the Melbourne Convention and Exhibition Centre 10-12 May, 2018.
With a focus on connected vehicles and a technology-driven display in the works for MEGATRANS2018, Isuzu is aiming to set a new benchmark in the wider supply-chain industry.
“The discussion and hype surrounding autonomous, or driverless, vehicles and technologies continue to build both overseas and here in Australia,” said Phil Taylor, Director and COO, Isuzu.
“Disruptive technologies appear to be becoming more prevalent with each new year, fundamentally changing the way the market will look at the road transport industry over the next few decades.
“There is one thing that I know for certain, whatever the technology, or the timeframe – Isuzu will ensure that Australian truck operators have access to the latest innovations in truck technology that are suitable for Australian operating conditions, driving better safety outcomes for all road users and improving air quality, productivity and the bottom line for the operator.”
Logistics & Materials Handling is an official Media Partner of MEGATRANS2018.

Investment group to acquire Coates Hire

Investment group Seven Group Holdings (SGH) has announced that it has entered into a binding agreement to pay $517 million to acquire the remaining 53.3 per cent of securities in equipment hire company Coates Hire that it does not already own, from an affiliate of Carlyle Asia Partners II, a fund managed by The Carlyle Group, and minority owners.
SGH said in a media statement that the Coates Hire acquisition reflects its continued focus on becoming “the leading operator of industrial services businesses in Australia” and driving efficient capital allocation across its portfolio.
“The Coates Hire business is led by a strong and experienced management team, with a number of business improvement initiatives in place and already delivering results,” the statement continued.
“Full ownership of Coates Hire will enhance SGH’s portfolio with increased exposure to industrial services.”
Ryan Stokes, Managing Director and CEO, SGH, said: “We are pleased to reach agreement with Carlyle to acquire the shares in Coates Hire we don’t already own.
“We have had a long history with the Coates Hire business and believe with the visible market opportunity associated with East Coast infrastructure activity, along with the current performance of the business and management team, the company is extremely well positioned to create value for all shareholders.
“The move to full ownership of Coates Hire will enhance SGH’s position as a leading operator of industrial services businesses, with a strong macroeconomic environment and a positive outlook providing the potential for significant opportunities to be realised.”
The transaction is subject to satisfactory waivers being obtained from Coates Hire’s existing lending syndicate.
 
 

DPWA introduces Fremantle surcharge

DP World Australia (DPWA) has announced that it will introduce a charge at its Fremantle Terminal as part of the basis for which access to the terminal is granted, for both road and rail operators, from 30 October 2017.
In a media release, Luke Westlake, General Manager – Operations, DP World Fremantle, stated that the charge reflects a “considerable” rise in property costs at Fremantle Terminal in the last five years.
“DPWA has incurred material increases in the costs of occupancy of more than 25 per cent, covering the cost of council rates, land tax and rent,” Westlake said. “DPWA avoided passing these costs onto the supply chain over this period, attempting to offset them through efficiency improvements. Despite, DPWA’s continued efforts, these material step changes in costs cannot be offset.”
He also cited investment DPWA has made in infrastructure to “keep pace” with industry expectations, and to handle greater peaks and troughs in cargo arrival patterns.
The surcharge will be $8.22 (excluding GST) per container and will apply to all full containers received or delivered to/from landside operators at Fremantle Terminal.
Full containers received or delivered via road will be charged to the road carrier through the 1-Stop Vehicle Booking System, while full containers received or delivered to rail will be charged to the rail operator as a separate item on the invoices produced.
“Ongoing access to Fremantle Terminal will be conditional on payment of the charges as per our conditions,” Westlake added.
DPWA noted in an additional statement that the surcharge is necessary to maintain productivity levels at the Terminal.
“This is a modest charge, which takes into consideration not only rising costs but the investment required to ensure our terminals continue to provide the highest levels of productivity,” the statement said. “This comes amidst the greatest levels of competition in Australian stevedoring history.”
Paul Zalai, Director of the Freight Trade Alliance (FTA) and Secretariat at the Australian Peak Shippers Association (APSA) advised that representatives of both the FTA and APSA will meet Federal Minister for Infrastructure and Transport Darren Chester MP in Canberra on 19 September in a bid for his help in stemming the tide of surcharges.

Government backs Port of Melbourne rail shuttle

The Australian and Victorian Governments have announced that they will back several projects aimed at taking trucks off local roads and connecting major Victorian freight hubs with the Port of Melbourne, using the existing rail network.
The Governments will soon seek expressions of interest to deliver a series of rail freight ‘shuttle’ initiatives on the existing rail network by connecting the port to major freight hubs and businesses.
Federal Minister for Infrastructure and Transport Darren Chester said the proposal would take advantage of rail’s ability to shift larger volumes of freight than trucks, while also busting congestion in Victoria’s capital.
“The Australian Government’s free trade agreements are seeing a boom in exports, which has led to trucks taking more produce and freight to the ports,” said Chester.
“This project will provide the ability to shift larger volumes of freight via rail compared to trucks, and reduce congestion on our roads.
“The freight and logistics industry had identified rail’s potential to reduce transport costs by about 10 per cent, with the proposal potentially improving Australia’s competitiveness, which is why the Australian Government is investing $8.4 billion in the Inland Rail project connecting Brisbane and Melbourne.”
Victorian Minister for Roads, Road Safety and Ports Luke Donnellan said the initiative will take trucks off local roads in Melbourne’s inner west.
“The Port of Melbourne will remain our primary freight hub for a generation. With container numbers expected to double over the next two decades we need to act now to share the load between road and rail,” Donnellan said.
“Alongside the West Gate Tunnel, 24-hour truck bans in the inner west and the Port’s rail access plans, this project will help shift containers from residential streets onto dedicated routes to the port.”
Michael Kilgariff, Managing Director, ALC, welcomed the Governments’ support of rail freight.
“Moving more freight to rail, where it makes sense commercially, has the potential to significantly improve freight efficiency, while at the same time improving urban amenity, reducing road congestion and decreasing queuing times at ports,” Kilgariff said.
“[The] ALC has been a consistent supporter of the Port Rail Shuttle project, which will be a significant enhancement to the Port of Melbourne, producing real benefits for freight efficiency in Victoria, and across the nation’s supply chains.
“In NSW, the state government is committed to doubling the amount of freight entering and leaving Port Botany by rail, which currently sits at 19.3 per cent. NSW Ports is likewise committed to moving 3 million TEU by rail over the longer term.
“There needs to be an equal focus on promoting greater use of short haul rail services for freight movement in Victoria.
“The Port Rail Shuttle will build on other significant investments being made in freight infrastructure – including the Inland Rail project, which will link the Port of Melbourne with the Port of Brisbane when fully completed.
“Constructing the Port Rail Shuttle to provide a rail connection between the Port of Melbourne and inland ports in Victoria is a crucially important aspect of improving the state’s freight network and driving greater supply chain efficiency and safety.”
 

DP World Australia launches intermodal partnership with SCT Logistics

SCT Logistics will partner with DP World Australia on a joint capabilities initiative, focusing on improving freight services for operators moving goods from the Parkes region in New South Wales to the Port of Sydney, the Parkes Champion Post has reported.
Through the initiative, the two companies will together service regional trains providing exporters and importers direct access to the DP World Australia’s Sydney dock via the recently announced Botany Intermodal.
“Botany Intermodal will offer will offer fast and efficient container coordination, movement, cleaning, repairs, refurbishment and storage services to customers who are transiting container freight into and out of the terminals,” said Mark Hulme, Chief Operating Officer – Logistics, DP World Australia.
“Botany Intermodal’s connection to the Southern Sydney Freight Line will drive improved rail efficiency and speed of service to adjacent stevedoring operations.”
Geoff Smith, Managing Director of SCT Group added, “We currently move freight from Perth to Sydney via Parkes.
“We are well positioned to expand these services to include your export into Port Botany to meet vessel cut offs.
“Furthermore, we have 324 hectares in our regional intermodal estate that would be ideal for exporters or importers to situate themselves in the strategic Parkes rail hub.”
Parkes Champion Post noted that the partnership is expected to result in reduced truck dependency in the region, along with environmental benefits.
Cr Ken Keith OAM, Mayor of Parkes Shire, welcomed the joint initiative by the companies.
“This partnership will further connect our region to a global market via one of the major ports of Australia, placing Parkes and the Central West into an economically advantageous position,” he said.
“We compete in global markets and as such transport efficiency is critical to our competiveness.”
 

ATA calls for ACCC to regulate road, port charges

Australia’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), should take over regulating toll road and landside port charges, Ben Maguire CEO of the Australian Truck Association said on 28 July.
The Australian Government is considering setting up an independent regulator to control truck and bus registration charges and road user charges that truck and bus operators pay on fuel.
Maguire commented that the independent regulator – ultimately the ACCC – should be responsible for toll road and landside port charges as well.
“Toll road charges for trucks are growing rapidly,” he added. “Small trucking businesses simply cannot afford them. Although these charges are set by state governments, the arrangements for setting them are not transparent and do not take into account costs across the supply chain.
“The ATA and its members have similar concerns about landside port charges.
“Earlier in 2017, DP World unilaterally increased the infrastructure surcharge at its Melbourne terminal and imposed a new surcharge of $21.16 per container at its Port Botany terminal. ATA member association Road Freight NSW pointed out that the Port Botany surcharge could cost carriers up to $150,000 per year.
“Separately, Patrick increased its existing surcharges this month, and introduced a $4.76 surcharge per container at its Fremantle terminal and a $25.45 surcharge per container at its Port Botany terminal.
“These charge increases cannot be avoided by trucking operators – they have not been subject to detailed regulatory scrutiny, they simply build additional costs into Australia’s supply chains.
“To fix these problems, heavy-vehicle tolls and landside port charges should be set by the road-price regulator, which should ultimately be the ACCC or a dedicated body established under its Act.”
Maguire said governments must start the reform process by fixing the overcharging of truck and bus operators.
“Truck and bus operators will be overcharged by $264.8 million in 2017–18. The meter is ticking up by more than $725,000 per day,” he noted.
“It’s time for governments to take action and stop overcharging the hard-working small businesses that make up the vast majority of operators in our industry.”
 

Inland Rail to enable modal shift

At the Future of Freight event held by the Committee for Economic Development of Australia (CEDA) in Melbourne on 17 July, a panel of logistics industry experts discussed the need for, and barriers to, a modal shift in Australia’s freight transportation network.
John Fullerton, CEO of Australian Rail Track Corporation (ARTC), noted that the nation’s much-discussed growing freight task will heavily impact the east coast.
“If you look at Melbourne to Brisbane, currently only 25 per cent of that freight moves by rail, 75 per cent is on road,” he said. “Compare that to Melbourne all the way to Perth, we’ve got 75 per cent of the freight on rail, primarily because we run trains to different schedules, we’re more competitive, we can run trains a lot longer, and we can double stack those trains out of Adelaide.”
The purpose for Inland Rail, he added, will be to complete the network of track between Australia’s capital cities that can carry world class–configured trains. “We’re going to get more freight onto the network, to handle freight for the future and get a better, more productive market share,” he said.
Maurice James, Managing Director of logistics and infrastructure company Qube, added that he sees the Inland Rail project as a great opportunity.
“I think [people] are underestimating the benefits of Inland Rail,” he said, adding that the time is right for the construction of a “huge” intermodal terminal at either end of the rail line, in Melbourne and Brisbane, to drive freight to rail.
“Freight doesn’t just come to rail,” he said. “Freight goes to rail when rail is more efficient against road.
“The opportunity that Melbourne and Victoria have is to identify where is that big intermodal terminal at the end of the Inland Rail [going to go]?”
James noted that Qube will soon discuss ‘fragmented supply chains’ with the management of the Port of Melbourne.
“At its worst, between a container coming into the Port of Melbourne, or any port, and the product ending up on the shelves, there could be anywhere up to 12 or 14 different truck movements,” he said. “People thinking about the product going to the warehouse, then to the store – [they don’t realise] everything behind that container, where the empty container goes, the reuse of the empty as a export commodity, how it gets back to the port.”
Qube’s model, he shared, is to focus on making sure every container coming through Australia is used as efficiently as possible.
“The logistics challenge ahead for the country is quite simple,” he shared. “It’s truck movements to rail head, a rail movement to Brisbane, and a truck movement to a final destination, competing with a truck, door to door.
“[Truck door to door] is quite easy, from a pricing, costing, efficiency perspective, but if you had…an intermodal hub in Melbourne and Brisbane and you’ve effectively [got] rail competing door to door with road, then you’ve got a serious chance of a significant modal shift.”

We must educate drivers about trucks

Peak transport body Road Freight NSW (RFNSW) has called on the Federal Government and relevant departments to convene a special industry-led national working group to better educate motorists on interacting with heavy vehicles, in order to reduce the number of road accidents estimated to be costing the Australian economy $33 billion a year.
Appearing before the Senate Rural and Regional Affairs and Transport References Committee inquiring into road safety in Australia, RFNSW General Manager Simon O’Hara said: “Greater engagement and education on the roads, particularly with regard to light vehicles is essential.
“Preventable deaths are a tragedy, the question is what we do about it,” Mr O’Hara told the hearing.
“RFNSW, along with the ATA, has issued a list of ‘Top 10 Tips’ advising the motoring public on how to drive safely with heavy vehicles on the roads. One of those tips is distracted driving, with studies showing that 80% of collisions are caused by motorists whose attention is taken away from the road by their passengers, phones, GPS, radio, eating drinking and smoking.
“Alarmingly, distractions are now deemed to be the single biggest cause of crashes and near misses, with road users who take their eyes off the road for two seconds or longer, doubling their crash risk. If drivers get that message and pay attention, that’s one simple way of trying to achieve safer roads for all users alike.
“RFNSW wants safety to be the cornerstone of what truck drivers do each and every day.
“RFNSW recommends the establishment of a working committee to scope out better ways to educate light vehicle users and cyclists in their interactions with heavy vehicle users for the purposes of attaining safer roads. We believe appropriate funding also be set aside for greater engagement and public awareness to educate road users and inform them on how to properly interact with heavy vehicles.”
At the hearing, Mr O’Hara also raised another critical issue impacting carriers – crippling new surcharges being imposed by stevedores DP World Australia and Patrick on truck operators at Port Botany.
“A large proportion of the rationale for these charges, as we understand it, is around rent increases. But only last week we learnt from NSW Ports that rent has actually decreased at the Ports from 2013 (pre-privatisation) to 2017,” he explained.
“RFNSW believes these port charges place further pressures on an industry already working with slim profits and costly overheads.
This questionable behaviour from the stevedores should be properly explained and built on a firm foundation of empirical evidence that justifies the rationale for this additional financial burden on carriers.
Ultimately, the consumer in one form or another pays the cost and if road transport users can’t understand why they are being taxed (and invoiced early) for using the stevedores – then perhaps the Australian consumer who will likely bear these costs deserves an explanation.”

Found in translation – Exporting the Australian logistics mindset

This article first appeared in the February/March 2017 issue of Logistics & Materials Handling.
Three Australian logistics veterans have been tasked with rethinking Japan’s supply chain strategy, mixing the traditional and the modern to achieve unprecedented growth.
Even when you’re the biggest name in your market, that’s no reason to rest on your laurels. While Coca-Cola is the market leader for beverages in Japan, there are five other major players vying for a share of the action. Market pricing has been declining steadily over the past 16 years, putting a squeeze on margins and forcing beverage suppliers to stay vigilant to remain relevant. According to Bruce Herbert, Chief Supply Chain Officer at Coca-Cola East Japan (CCEJ), consolidation and diversification have been key strategies for many in the industry. “Coke in Japan is not just carbonated drinks, over half our volume is sugar-free teas, coffee and water,” he says. “A very strong innovation and new product pipeline has to be filled every year from our own plants and a network of contract packers.”
Covering over half of Japan and serving a population of 60 million, Coca-Cola distributor CCEJ is in a constant state of metamorphosis, always looking for ways to increase efficiency and cut costs. The US$6 billion ($8.2 billion) bottler was originally formed in 2013 through the merging of four smaller bottlers and has since absorbed a fifth one. It will soon merge with Japan’s next biggest beverage distributor – Coca-Cola West – and cover some 90 per cent of the market. Set to take place in 2017, the merger will increase the company’s value to US$10 billion ($13.7 billion) and increase its assets from eight factories to 17, 250 sales warehouses from 150, and 800,000 vending machines from 400,000 and 3,500 daily semi-trailer loads shifted per day from 2,000.
CCEJ recruited supply chain experts from around the world, including Bruce, to come to Japan and lend their expertise and, as a result, has been hugely successful in cutting costs and increasing profit. Bruce is joined by two other Australian supply chain experts, cherry-picked for their knowledge of the beverage and retail industries with decades of experience working with supply chains in Australia, Asia and Africa – Edward Walters, now Senior Executive Officer, Planning, Logistics & Distribution at CCEJ; and Distribution Transformation Manager, David Sim.
The Japanese market has presented a challenge, thanks to the country’s complex traditional business etiquette, though Bruce found its workforce’s strong work ethic and customer service to be worthy of admiration. “In Australia we take for granted that change and improvement are part of working life,” he says. “Especially at [Coca-Cola’s Australian-based bottler, ed.] Amatil, where supply chain transformation has been progressing since the mid-90s and many world-leading initiatives were started. Coming to a business which was effectively five small Japanese businesses just three years ago, I have realised just how far ahead some of those things we were doing in Australia were.
“In one way we have a big advantage of having lived in what will be ‘the future state’ for the supply chain here. Of course, there are many things to be learnt from the Japan model as well, but knowing that changes needed here have worked elsewhere gives us a big head start.
“I respect the Japanese working style. My Japanese colleagues are extremely hardworking and focused on detail, in a way that most Australians would find very challenging. Workers regularly work very late in the office, never hesitate to stay back or work over weekends and don’t give up on a problem. So much so that Government and companies are focused on encouraging people to relax more and take more time off, take more holidays etc. – this is definitely not a problem in Australia.”
The Japanese approach to life in general, including even how seemingly ‘logical’ issues are approached is quite different to the West, according to Bruce. “Not better or worse, but different,” he adds. “Whilst basic human reactions and motivations are the same, the way they express themselves is different. Relationships are much more important and sensitive here, as is loyalty to the business or community. All of these things translate into business culture and relationships.”
In some aspects, Australia’s logistics sector could benefit from observing the Japanese workplace, says Bruce. In particular, he believes that the value placed on quality and customer service in Japan would do wonders for Australian business. “Japan is surely the most quality-focused country on earth, and customer service is seen as an extension of quality,” he says. “Near enough is not good enough, perfection is sought after and worked towards at every level. It is deeply ingrained into everyday life – I don’t think we would ever have to ‘train’ for customer service as it is intrinsically understood. This often leads to failures by multi-national companies who don’t understand what Japanese consumers and customers expect. Likewise: quality. Australian businesses may be more ‘lean’ but often do so at the cost of customer service and quality.”
CCEJ looked at successful logistics strategies in use around the developed world when searching for ideas to rejuvenate their own approach and, according to Bruce, flexibility and a laid-back Australian style have been instrumental in ‘cracking the code’ for the company’s logistics strategy. “I think openness to different ideas has been key,” he shares.
“I experienced some changes put in place here earlier by some of our colleagues from the US, but many of them did not work as they were simply ‘cut and pasted’ ideas from the US. Aussies may be proud of their country, but they usually don’t expect that they have all the answers.”
Edward likens the challenge of solving CCEJ’s issues to the task of unravelling a badly tangled set of Christmas lights – difficult to unravel without breaking a light and stopping the business. “We discovered that, over many years on the quest to providing high service and quality, network efficiency at CCEJ had been eroded severely,” Bruce adds. “This had happened steadily and high transport, warehouse and other costs had been accepted as ‘normal’. As there was little benchmarking of supply chain costs outside Japan, and since the costs were not easily ‘visible’, they had not been tackled by investment or progressive change either and a gap grew between global practice and Japan Coca-Cola practice.”
In order to ‘crack the code’, Bruce shares that two major changes needed to be introduced. “First was a painful implementation of a new SAP ERP system which replaced multiple legacy systems and gave central visibility to live data,” he says. “Second was more instinctive – we cut inventory by about 20 per cent – a very brave move in Japan – and thereby decongested the network, eliminating double handling, waiting times, extra transport and product write-off.”
A third big change, which is currently in progress, involves moving inventory upstream, closing small sales centres and cross-docking others, together with possible investment in new warehouses at plants and picking automation. CCEJ is already seeing positive results from the change, with over 25 billion JPY ($290 million) supply chain savings both from manufacturing and logistics/distribution improvement since its inception in 2013.“This year, heavy transport cost is down 20 per cent and write-offs are down 50 per cent,” Bruce shares. “So we are already almost halfway to the long-term cost reduction goal after just one year.” The 2017 merger of Coca-Cola East Japan and Coca-Cola West is expected to create opportunities for further savings.
Bruce attributes his team’s success to a combination of factors, from slow and cautious implementation of changes to constant re-evaluation of direction. “We didn’t approach this as a ‘project’,” he says. “We tackled this as a management challenge – to implement changes, monitor them closely and adjust as we went along. In that way the original ‘plans’ were gradually changed – with successes amplified and failures dropped quickly. Good real-time data access and manipulation was crucial here.
“Thanks to methodical and detailed execution of strategies by our team here, the changes we made to inventory levels, planning processes, truck routing, pallet configurations etc. were executed without impacting customers or quality. This meant that the costs we saved were not lost in upset customers or lost sales, but could flow directly to the bottom line.
“We discovered a clear and costly link between inventory levels and transport costs, which had never been uncovered before. I’d like to say we found this by a big analytical study, but actually it only became clear by trial and error – which is why an army of experts and analysts had failed to find it before.”
CCEJ now encourages its employees to make suggestions for improvement of processes, and implements over 100,000 small innovation ideas per year on ways to improve quality, safety, service and cost.
The notoriously rigid traditional Japanese business culture presented a particular challenge for the CCEJ supply chain team, Bruce explains, though they were still able to achieve “massive change and results” thanks to their measured approach. “Resistance to change remains a constant both within the business and with customers and some suppliers,” he says.
“This is largely due to the extremely high standards set by customers and consumers and fear of making big mistakes. We were able to overcome this by making many small progressive changes, and avoiding – for the most part – big bang or sudden, unplanned change.”
Bruce believes that if applied in Australia, his team’s strategy could result in similarly positive outcomes. “The approach we have taken here has been based on numerics and data combined with good management routines, not just ‘hardware’,” he shares. “It can therefore be applied anywhere, to any problems.”
The CCEJ supply chain team have developed their own version of the revered – though oft-misunderstood – ‘Kaizen’ (kai: change, zen: good) business philosophy whereby big changes can be achieved through small, continuous improvements in all aspects of business. They are confident this method could be applied with success in any business environment. Bruce adds, “All I know is that after 35 years in this game there has never been a change as big and fast as what this team has achieved here in Japan this year.”

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