The impact of an upstream buyer consolidation and downstream intermodal rail-based solution on logistics cost in the China-Europe container trades

Author's accepted version (postprint).This is an Accepted Manuscript of an article published by Elsevier in Case Studies on Transport Policy on 19/03/2020.Available online: https://www.sciencedirect.com/science/article/pii/S2213624X19300884?via%3DihubIn the typical structure of the supply chains associated with the Asia-Europe container trade, containers are stuffed in China, and the cargo is subsequently cross-docked at a major European logistics hub or a distribution centre closer to the customer for further distribution to the final retailing points. However, this solution may not be optimal in the perspective of total logistics cost. Upstream buyer consolidation at the origin and a downstream rail-based intermodal system at the destination has been regarded as a potential solution for reducing the costs of supply chains. The purpose of this study is to identify the benefits of this potential solution. This research is based on a case study obtained from a Swedish retailer with a chain of retailing points in Scandinavia and Poland. A comparative analysis is used to reveal the cost advantage of the alternative solution. Our findings suggest that this alternative solution may reduce monetary logistics cost from two aspects: converting LCL shipments to FCL shipments and converting almost full 20-foot FCL shipments to 40-foot FCL shipments. In addition, certain non-monetary benefits of buyer consolidation, including reduced possibility of delay, reduced complexity, reduced carbon emissions and reduced activities in the destination countries, are illustrated in this paper. Based on our calculation, the cost-saving potential of the new alternative solution illustrated in this case study is considerable, which suggests that such solutions might be desirable as an alternative to the typical arrangements in this trade. Keywords: Upstream buyer consolidation; Rail-based intermodal system; Asia-Europe container supply chains; Monetary benefits; Non-monetary benefits.acceptedVersio

Intermodal terminal concessions: Lessons from the port sector

Tendering procedures for concession of port terminals to private operators have been the subject of considerable interest during the last decade. As a consequence, keys to effective port governance, particularly the landlord model, are fairly well understood, even standardised to some degree. By contrast, intermodal terminal contracts have been found to be quite varied, with little standardisation of procedures, requirements, risks, incentives or contracts even within a single country.This paper applies lessons from the study of port terminal concession contracts to the intermodal sector. The World Bank port reform toolkit is used to create a framework with 72 provisions, which is then matched against five intermodal terminal concession contracts. The analysis reveals several uncertainties in intermodal concession contracts, relating particularly to a lack of specified provisions on performance monitoring and measurement, open access to users, infrastructure maintenance, service marketing and hand back procedures. The paper identifies how the port concession framework used in this paper can be adapted for use with intermodal terminals, as the first step towards developing a global standard such as that used in the port sector

Using a “virtual joint venture” to facilitate the adoption of intermodal transport.

Purpose The supply chain literature discusses various models of supply chain collaboration and integration. When applied to logistics, each has been shown to exhibit different levels of success depending on particular factors. This paper examines a strategic alliance between a large shipper and a freight forwarder to provide an intermodal service to and from the port of Gothenburg. Design/methodology/approach The methodology is based on action research and interviews supplemented by document analysis. Findings According to this innovative model, a new entity is not set up but an open-book basis is established, long-term contracts with other parties are signed, risks and profits are shared, and the shipper makes several investments specific to the service. Thus the benefits of a joint venture are obtained without needing to establish a new organisation and thus sacrifice flexibility and independence. Research limitations/implications A limitation of this study is that it is based on a single case of best practice; it may be difficult to replicate the high levels of trust in other situations. Nevertheless, the evident success of this “virtual joint venture” suggests that some elements are transferable to other cases, and the model may be refined through additional case analysis. Practical implications Results indicate several advantages of this “virtual joint venture” model, including risk sharing, knowledge development, long-term service stability and diversification of activities which all contribute to facilitating the shift of a large customer from road haulage to intermodal transport. Potential challenges mainly relate to contractual complexity. Originality/value This paper identifies an innovative business model for logistics integration that can be used in future in other cases to make modal shift more attractive and successful, which is a key aim of government policy in many countries

Drivers for vertical integration in the rail sector: using wagons as “relationship specific assets"

Purpose – This paper uses a combination of transaction cost economics (TCE), the resource-based view (RBV) and the relational view to analyse vertical integration in the rail sector, through which rail wagons are viewed as “relationship specific assets”.Design/methodology/approach – The empirical analysis is based on a cross-case comparison of four case studies of intermodal operators in Europe, each exhibiting different levels of collaboration and integration between terminals, operators and sub-contractors.Findings – Viewing rail wagons as relationship specific assets rather than merely transaction specific (TCE) or firm specific (RBV) demonstrates that wagon ownership is not only a good indicator of the level of vertical cooperation but of the existence of trust and learning within a collaborative environment.Practical implications – the organisational setup is not derived purely from transaction or resource characteristics, but by the integration of processes through the purchase of assets that will be used to produce a service, with the expected levels of trust and commitment. In this sense, the role of the wagon as a relationship specific asset is a microcosm of the key elements of a successful intermodal transport system.Originality/value – As one of the key operational aspects of the rail sector is the use of expensive equipment and the relative responsibility for fixed and moveable assets, an analysis of the use of rail wagons as relationship specific assets allows a more dynamic understanding of vertical integration in the rail sector than currently provided by TCE or RBV alone

Identifying competitive strategies for each phase of the intermodal terminal life cycle

This paper applies the marketing strategy literature to the four phases of the intermodal terminal life cycle (ITLC) to identify the appropriate competitive strategy to be undertaken at each phase, based on fluctuating markets and competitor behaviour. Not only can applying the correct strategy at each phase help to obtain a competitive advantage, but anticipating future strategies in advance can underpin the success of current strategies and ensure that both public and private stakeholders are prepared for future challenges.The paper derives the appropriate strategies, provides empirical examples and discusses the opportunities and challenges inherent in each strategy. The paper concludes with suggestions for future research on strategy options that go beyond the traditional view of terminals as homogeneous interchangeable assets. Rather than simple improvement of factor conditions by investing in the infrastructure, innovative strategies to obtain competitive advantage should focus on partnerships with external stakeholders such as rail operators, 3PLs and shippers.Free download until 7th May 2017: https://authors.elsevier.com/a/1UkLi7sdbMeOv

The role of contracts in achieving effective governance of intermodal terminals

Public sector actors often provide financial or planning support to intermodal terminal developments with the aim of achieving societal benefits through modal shift from road haulage to rail transport. Once operational, such terminals exhibit a variety of governance models with varying levels of power and responsibility shared between public and private actors. This paper reviews a selection of contracts between rail infrastructure owners, terminal owners, terminal operators and rail operators in order to determine the incentives, commitments and risks involved in specifying such responsibilities between actors. The two markets analysed are Sweden and the UK, with similar histories of liberalisation of rail operations. In the Swedish context, terminal infrastructure owners, usually public actors, want to act as landlords but continuously find themselves involved in daily operational and commercial situations. In the UK, long leases on token rents mean that few commitments or investments are required by private operators as long as they remain in use and allow open access. Policy implications are discussed and recommendations made for future research

Sulphur emission control areas and transport strategies -the case of Sweden and the forest industry

Background and purpose The International Maritime Organisation’s (IMO) decision to lower the allowable amount of sulphur content in marine fuels to 0.1 % in the so-called Emission Control Areas (ECAs) beginning in 2015 has outraged the Swedish forest industry. The seas around Sweden are included in the ECA and achieving the new sulphur directive requires shipowners to take actions that will increase the cost of transporting goods by ship from Sweden. Swedish forest industry exports are transported mostly by ship and there is a possibility that the forest industry will shift freight from sea to land transport because of the sulphur directive. How greatly the transport costs differ between different transportation options is affected by several uncertainties such as price trends for fuel. Other restrictions for shipping, such as nitrogen oxide emissions and ballast water treatment, are also expected to become stricter in the future. The purpose of this paper is to examine the impact of the sulphur directive and associated uncertainties on the Swedish forest industry, its transport system structure, and its logistics strategies. Results and conclusions Previous studies in the field have forecast that the freight will be transferred to land because of the sulphur directive. Our results also show that companies will transfer the cargo to land transport. The transfer will be greater thefurther southinthecountryproductionfacilitiesare located.Goods that previously were shipped from ports onthe Swedish east coast will instead be shipped more frequently from ports on the west coast to reduce transport time within the ECA region. Furthermore, the results show that firms do not sign agreements with shipping lines that extend beyond the year2015, but instead write long, flexible agreementswith rail operators, enabling an increase in freight strategy to address the sulphur directive. In this way, they have created the capacity to transform the transport structure. Document type: Articl

Exploring Quality Challenges and the Validity of Excellence Models

\ua9 2016, \ua9 Emerald Group Publishing Limited. Purpose: The purpose of this paper is to identify and explore important quality-related challenges facing organizations, and investigate how current excellence models incorporate these challenges. Design/methodology/approach: The paper is based on a Delphi study of Swedish organizations. Forty-nine challenges were generated and ranked according to importance and the ten top-ranked challenges were compared to the principles of four excellence models. Findings: The excellence models still seem to be relevant since their content matches many of the identified challenges. The Malcolm Baldrige National Quality Award and the Swedish Institute for Quality models were found to have the most comprehensive coverage, while the International Organization for Standardization model had limited coverage. Research limitations/implications: Three areas for further research were identified: first, how quality management (QM) can evolve in different contexts that have varying needs in terms of adaptive and explorative capabilities; second, the interfaces of QM and sustainability, and ways to understand how customers and stakeholders can be active contributors to improvements; and third, the roles of the owners and board of directors regarding QM, and how to organize and distribute responsibilities of the QM work. Practical implications: There are three important challenges that future revisions of excellence models could address: first, making QM a strategic issue for company owners; second, involving customers in the improvement activities; and third, developing processes that are robust yet still easily adaptable. Originality/value: The Delphi study identified upcoming challenges in the QM area based on input from 188 quality professionals