What was the issue / What Initiated the project
As we started to re-structure our inter depot trunking operations, there was an opportunity to review & trial opportunity on rail. This also coincided with our initial discussions & strategy planning around Sustainable Distribution & the potential benefits delivered through modal switch. Reason to switch was not service led, but a combination of carbon & cost efficiency.
What we did
Back in 1999, initial trials were centred on a fresh grocery route from Paddock Wood in the South-East of England, to our Scottish Distribution Centre in Grangemouth. At this point we were networking with a number of potential 3PL’s & rail providers who were keen to explore a number of potential rail routes with us.
During this period we worked with WH Malcolm group to project plan the start of a dedicated rail service from Daventry – Grangemouth. All ambient grocery products moving from our National DC in Lutterworth to Scotland has been on that route for the last 11 years.
In 2005 we extended our rail service to include a depot to store service from our depot in Grangemouth, to 9 stores in the Aberdeen region. Again, this was initiated through our relationship with the Malcolm group & now includes a partnership relationship with ‘Direct Rail Services’ & ‘AR Craib’.
Other alternative solutions considered
There were & remain no other practical modal switch alternatives on these particular routes.
There is opportunity to work with different 3PL’s & Rail providers on the same or similar routes.
Obstacles to overcome
Our key aim within distribution is to provide a world class level of service to our store customers & therefore there was some initial nervousness about the reliability & service level risk associated with the switch from Road to Rail. Key senior stakeholder engagement was crucial when setting up the process to help mitigate any associated risks.
The initial process of building the business case projections was also difficult. As a new user of rail, the intricacies of understanding possible government funding, REPS & associated costs of specialised fleet & containers was not easy.
The ability to engage the 3PL rail provider at an early stage was advantageous throughout that process.
The single biggest obstacle for future rail freight flows, is the cost viability of relevant new routes. The widespread introduction of Double-Deck road trailer fleet, has made road transport much more cost efficient over the last 5 years & needs to be considered going forward.
Initial rail flows were set-up over 6 days a week. This is far from ideal, as our freight flows are consistently 7 days a week. This was altered 5 years into the process, but remains a genuine risk for future rail flows.
What we achieved
Daventry – Grangemouth
- 11 years unbroken service on this route
- Service levels in excess of the targeted 95% ‘on-time’ performance
- Introduction of 7 day routes (from original 6 day running)
- 5 million road miles removed every year
Grangemouth – Aberdeen
- 5 years unbroken service on this route
- Service consistently above 98% ‘On-Time’ delivery performance to stores
- 750,000 road miles removed every year.