FREIGHT
STRATEGY
NEW DAY DAWNING?
Here Matt East, Senior Advisor - Logistics and Infrastructure Policy for the UK, Europe
& Middle East, at GHD, wonders if COVID-19 will herald a new era of effi ciency.
re-location of populations,
moving from urban to rural
areas.
Reading the changes
In the UK, for example, this has
resulted in a 30% reduction of
freight movements across all
modes, including maritime,
rail and HGV. As we move into
the recovery phase following
COVID-19, we need to
understand if these changes to
the supply chain confi guration
will be temporary, or if the way
in which we operate and plan
the logistics network will be
transformed from this point on.
Beyond economic
stimulation, the need for a
more resilient supply chain to
mitigate potential disruptions
A clearly defi ned
strategy would
provide confi dence
around resilience for
current and future
disruptions…
Will COVID-19 catalyse
the advent of a
new global freight
strategy by encouraging a shift
in modes of transport and
improving network effi ciency?
COVID-19 has generated
unprecedented disruption
in the global logistics and
freight industries, severely
impacting operations and
delivery activities. However,
could these current challenges
ultimately pave the way for
a more streamlined, effi cient
and environmentally friendly
future?
It’s a tempting thought.
Demand for essential goods,
such as produce, medical
supplies and Personal Protective
Equipment has signifi cantly
increased, while manufacturing
capacity has decreased
because of various lockdown
restrictions. In the short term,
hauliers, international gateways
and retailers are facing a
climate of uncertainty.
The community has
experienced disruption to
points of supply and quantities
of freight available; it has been
affected by disruption to freight
handling across international
borders; and the reduced
number of vessels, vehicles
and personnel available across
the supply chain has affected
the routes taken. Moreover,
changing demand patterns as
consumer and business needs
change, is evident - and then
there has been a noticeable
from future similar events could see producers and distributors
looking to local manufacturers rather than international suppliers.
These manufacturers would ideally be located near to where the
key supplies are required. Nearshoring or reshoring could be one
“new norm”.
The current situation provides an opportunity to consider
strategic locations where local manufacturing and production
hubs could be key in providing this resilience, while acting as an
economic booster to those regions.
Making effective use of capacity
The reconfi guration of the supply chain and modal shift is an
idea that has been mooted previously, with the intention that
these modifi cations would help us achieve particular industry
goals, such as the net zero targets. In 2017, the UK Government
issued the Freight Carbon Review, which identifi ed options for
making more effective use of current capacity on the rail, water
and road networks. The report notes that a signifi cant reduction
of greenhouse gas emissions could be achieved through increased
use of rail freight, deployment of longer semi-trailers and improved
logistical effi ciency by means of more widespread industry
collaboration.
The report also recognised the constraints around network
capacity occasioned by passenger demand; however, it is
anticipated that more people will elect to work from home
following COVID-19, resulting in an estimated 20% reduction
in passenger train movements on the rail network. If similar
impacts are experienced across the overall transport network,
additional capacity for freight paths may become available, where
it previously did not exist.
A window of opportunity?
Therefore, the pandemic may have just provided the industry
with a window of opportunity to accelerate a modal shift, while
reconfi guring the network to provide more effi cient distribution.
The industry can proactively plan to respond to these changes
and grasp this opportunity by collaboratively developing a holistic
strategy for the movement of freight across and within countries.
A clearly defi ned strategy would provide confi dence around
resilience for current and future disruptions by addressing
existing and potential policy and regulation amendments. This,
in turn, would also inform decisions to optimise the supply
chain to achieve cost effi ciencies (supply to demand ratio), and
concurrently reduce the environmental footprint.
www.airlogisticsinternational.com August 2020 25
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