Assessment of the Current Situation and Practices of the Supply Chain

After declining in 2009, owing to the global financial crisis, intermodal cargo volumes in Europe have grown steadily. Today, intermodal is expected to maintain an average annual growth rate of about four percent. Road remains the predominant mode of transportation in intermodal moves, but rail is catching up. In fact, rail intermodal freight is growing faster than pure rail transportation in the EU. However, the current analyses state that there are some barriers that hinder this growth at different levels, supply chain and specifically at transshipment points (terminals). Lack of standardization, accessibility, equipment, data exchange and lack of visibility in general, are some of the problems facing every day and constitute barriers for the development of intermodal transport.

Rail Market Development

Figure: Rail market development(UIC, 2015)

Within SMART-RAIL an assessment is performed on the current situation and practices of the supply chain. This assessment includes also an initial assessment of the relevant KPIs with non-railway stakeholders earlier identified in the project. The need for measuring and evaluating logistics performance increases with new incentives of involving strategic issues in logistic and transportation. Based on the previous work, consortium discussions and interviews with stakeholders, the following KPIs have been proposed:

  • Lead time from order to delivery,
  • Time to un/load,
  • Time to assemble train,
  • Idle time, operations in transit,
  • Total delivery time,
  • Frequency or flexibility of the service,
  • Visibility of the service,
  • Customer satisfaction,
  • Reliability and punctuality of the service,
  • Efficiency of capacity utilization and costs.

Different stakeholders, including their roles and interrelations between different actors have also been identified, analyzed and pointed out to reveal potentials to improve cooperation between the actors. Main shared drivers that could move a common action between the system components, due to their nature of economic entities are:

  1. Cost reduction and efficiency, with its positive collateral effect of better profit results;
  2. Service quality improvement, from which customer satisfaction and sector’s market share increasing.

Existing business and governance models have been defined within the supply chain in order to reveal current strengths and weaknesses in the transport operation. These business models are based on the need for consideration of a complete supply chain that at least goes beyond railway transport with their (partial-) components. Four different types were defined:

  1. Freight train operator/3PL-model;
  2. Anchor customer model;
  3. Agent model;
  4. 3PL/4PL-model with intermodal operator.

Ongoing trends in terms of modern technological initiatives for improving the execution of supply chain processes have also been presented. The diverse nature of managing multimodal transport chain is supported by a number of activities where each phase needs to be optimized and possibly integrated with other activities for effective and efficient business operations. Some ICT initiatives identified are:

  • Freight resource management systems and applications;
  • Terminal and port information and communication systems and applications;
  • Freight and fleet tracking and management systems and applications;
  • Integrated operational/information exchange platform/portal/marketplace.

Finally, one of the main results obtained from the analysis of cooperation quality and quantity in intermodal transport network confirm the need for a better cooperation among the stakeholders in the supply chain. But first, shippers, carriers, and third-party logistics providers (3PLs) in Europe have to be willing to consider intermodal when planning the movement of freight. All too often this option is ignored by these stakeholders – even when products are suited to multimodal transportation and the requisite services are available.

To read more on the analysis of the current situation and practices of supply chain including a comprehensive review of intermodal services and infrastructure network with special emphasis on terminals as potential bottlenecks in performing a smooth and efficient flow of goods, please read the public report ‘D4.1 V1.0 Assessment Of The Current Situation And Bottlenecks Regarding Cooperation In The Supply Chain’ in the Results section

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