Ukraine’s Automotive Revival – As Recovery Increases So Will Demand

automotive logistics InstaFreight 2 - Ukraine’s Automotive Revival - As Recovery Increases So Will Demand

After a three year slump, it seems like the automotive market in Ukraine is finally starting to bounce back. According to the latest figures for the first half of 2017, the number of passenger cars sold has jumped up by as much as 36 percent for a total of 35,700. Ukratuprom, the Ukrainian automotive industry association, is confident that they will reach as many as 90,000 vehicles sold by the end of the year.

While this number pales in comparison to the 2012 sales peak of 217,000 vehicles, the rebound is very promising for the automotive industry, especially when considering the difficulties the country has faced in the recent past which put the country into an economic tailspin. Now that the dust has settled it would seem that regrowth and rebuilding of the industry are already under way. The Ukrainian government is even going so far as to remove duties for imported components as well as other concessions that will help to speed the rebound along.

As Recovery Increases So Will Demand

The automotive rebound has come back with such vigor that the logistics industry is having a hard time keeping up, not a bad problem to have to be sure.

“Transport companies were completely unprepared for this increased demand,” according to an article from Automotive Logistics. “In the last three years, the automotive carrier fleet has decreased by about three times, as many companies simply have not survived the crisis.”

As sales and manufacturing volume increases, so will the demand for logistics, specifically in transporting components from the EU into Ukrainian manufacturing facilities. Given the drop in logistics and transportation capacity, this will prove to be a fantastic opportunity for companies who want to get on the ground floor of a rapidly (re)growing market.

“In 2017-2018, most likely there will be synergies between various participants of the automotive logistics chain in the form of joint ventures and investments of carmakers in transport companies with automotive carriers; first, because carmakers are interested in [stimulating] rising distribution of their car brands in Ukraine as well as improving quality of this distribution.”

Trade Flows Both Ways

In addition to the positive future for vehicle production, there are even more opportunities for logistics. While vehicle production might have dropped off, Ukraine has long been held as a promising site for component production and a lot of big players in the automotive industry such as Daimler, BMW, and Volkswagen, have plans to build more production facilities on the western border to better expand their distribution radius.

With the addition of new construction facilities, export trade from the EU to Ukraine and vice versa will be seeing a significant boost and, as expected, will benefit from an increase in logistics services to continue to facilitate transportation.

How InstaFreight Can Help

Managing logistics can be a very delicate and time-consuming process, one of the biggest reason why freight forwarders exist. So what do you do when you’re trying to take advantage of a boom in production? You take advantage of a digital freight forwarder that’s on the leading edge of technology. Instafreight specializes in a quick and easy digital booking platform. Why waste precious time digging for a transportation quote and available capacity when you can have them both in seconds. Click, book, ship, and manage your shipments online. InstaFreight makes it that easy.  

 

Timely Deliveries in Europe’s Construction Industry

EU Construction 1 - Timely Deliveries in Europe's Construction Industry

The European construction market is gaining strength which is good news for a segment that represents 9% of the European Union’s overall GDP. According to the recent 83rd Euroconstruct conference, European construction output is expected to expand by 2.5% in 2016 – 0.5% stronger than was expected six months ago. This is thanks to improving economic signs. For the short-term outlook, output in the construction industry is expected to grow 8% from 2016 to 2018.

By segment, residential construction is expected to expand by 5% in 2016 and moderate to 1.7% by 2019. In fact, new residential building permits issued in Germany increased by more than 20% in 2016 because of a growing population, increased job security and record-low borrowing costs. German construction industry associations expect sales to rise by 5% this year to hit the highest level since 1995, following growth of 5.8% in 2016. Meanwhile, Europe’s non-residential construction is expected to grow 2.3% for 2017 and 1.2% for 2019.

The European Construction Market

This is all positive news for an industry that makes up three million enterprises and has a total direct workforce of 18 million people according to the European Builders Confederation. Indeed, a number of large companies such as BauXpert Hoba GmbH, Mutanox GmbH and Haltec Hallensysteme GmbH are a part of the large European construction industry. But did you know that 99.9% of the European construction sector is composed of small and medium-sized enterprises (less than 250 employees)?

Importance of the Supply Chain

Indeed, with so many businesses involved, the supply chain becomes even more important to ensure contractors receive supplies in a timely manner to keep the construction work going without interruption. Take for example the movement of heavy supplies such as reinforced iron bars and steel beams, these items require special handling, loading and unloading as well as installation. Any delays and/or damage can incur additional costs, damage claims and loss of reputation for suppliers. To ensure the process is seamless as possible, coordination with delivery carriers is extremely important. But, with the revival of the construction industry, capacity and rates can be a concern. Specialized carriers can be scarce and the time spent locating a reliable carrier at an agreed upon rate can further be time consuming and thus put construction projects at risk for delays.

InstaFreight to the Rescue

InstaFreight’s award winning freight management solution can ease the minds of many construction suppliers. Shippers are able to utilize InstaFreight’s vetted carriers 24/7 while not having to worry about truck availability or time spent on negotiating rates. Instead, InstaFreight manages the carrier relationship ensuring reliability as well as availability. In fact, we take it a step further and provide guaranteed availability. Furthermore, rates are determined via InstaFreight’s innovative algorithms that are fair to both shipper and carrier. Lastly, InstaFreight handles all carrier payments so shippers can focus on and manage their core business.

 

Improving The Efficiency of Road-Freight Transport Is Critical

0807 European trucking  - Improving The Efficiency of Road-Freight Transport Is Critical

Efficiency is top of mind for all industries however within the road freight market, maintaining efficient operations while abiding by tighter and tighter environmental regulations can prove difficult and often requires costly financial investments.

However, the International Energy Agency’s (IEA) latest report, The Future of Trucks: Implications for Energy and the Environment, indicates that improving the efficiency of road-freight transport is critical to reducing the growth in oil demand, carbon emissions and air pollution over the next few decades. In fact, according to the report, trucks account for almost a fifth of global oil demand or around 17 million barrels per day. Ouch.

Indeed, among the areas, the IEA highlights is the improvement of logistics and systems operations. This includes such measures as using a global positioning system to optimize truck routing, as well as real-time feedback devices that monitor the on-road fuel economy of trucks.

European trucking infographic - Improving The Efficiency of Road-Freight Transport Is Critical

AAEAAQAAAAAAAAeTAAAAJDJmZjEyOWU1LTAwMzEtNDNkOC1hNTEzLWJlNWI4MzYzYjIyNw 300x50 - Improving The Efficiency of Road-Freight Transport Is Critical

Route Optimization

Optimizing truck routes can help increase the volume or weight of cargo transported which in turn improves the truck load for each trip. It also reduces the number of trips during which trucks run empty after having delivered the goods. Along with the reduction of trips and thus reduce fuel use, route optimization also helps minimize vehicle wear and tear and mitigate exposure risk, which in turn has an impact on violations, accidents, and insurance premiums.

By optimizing truck routes, businesses have also been able to reassign staff that previously spent hours of computer time to “crunch” the numbers and develop routes for the fleet’s drivers. Instead, these folks can focus more on customer-facing tasks.

Monitoring and Improving On-Road Fuel Economy

A number of technology solutions are available that reduce the amount of engine idling to providing power for cabs and those that reduce aerodynamic drag. Additionally, there are others that decrease rolling resistance of the tires and some that improve powertrain performance.

Improving the design of the truck for better aerodynamics and improved energy is another means of improving efficiency. An extreme example is Navistar’s CatallST Super Truck project estimated at $7 million. A joint project with the US’ Department of Energy to boost freight efficiency by 50 percent. The result of the project found that CatalIST achieved fuel efficiency of 13 mpg and demonstrated 50.3 percent brake thermal efficiency (BTE) and a path toward 55 percent BTE. The first goal of achieving this was to reduce the weight of the truck. Over 2,000 pounds was removed from the trailer, but 1,500 pounds was added back through aerodynamic devices such as slotted skirts, a boat tail, gap treatment and 48-volt solar panels. Also, 2,300 pounds were removed from the scales on the truck. The skirts and hood were carbon-fiber, and the cab was a carbon-fiber skin over the steel structure of an LT tractor. The windows and windshield were replaced with polycarbonate, which is lighter and stronger than glass.

Next, the team set out to improve the aerodynamics of the truck by adding a boat tail that extended below the underride guard and serves as an extension of the skirts at the rear of the truck. Furthermore, the segmented Wabash trailer skirts flare inward as they reach the end of the trailer. Lastly, mirrors were replaced with exterior cameras and interior pillar-mounted monitors.

In previous blogs, we’ve highlighted platooning, in which trucks are electronically-linked.  The interest in platooning is on the rise in particular as fuel represents a large percentage of operating costs for trucking companies.  A Dutch research firm TNO notes in a white paper on the topic that each truck in a platoon uses on average 10 percent less fuel per journey.

How InstaFreight Can Help

“InstaFreight is a convenient solution for both shippers and carriers. The average utilization level of a carrier today is about 70%. With InstaFreight, we built a one-stop shop for road freight cargo. Besides optimized utilization, transparency and cost savings, carriers also benefit from the fast payment processing.” – Gion-Otto Presser-Velder, Co-founder of InstaFreight

Indeed, the trucking industry is facing many challenges including declines in the number of drivers and fluctuating rates. Our solution provides 24/7 available freight capacities at fixed rates. The fixed rates are determined by the use of algorithms that calculates the optimum market rate.

InstaFreight’s solution allows shippers to coordinate and schedule truck shipments more efficiently. Shippers can book shipments from carriers that have already been vetted in terms of service levels, capabilities, and insurance. For carriers, an app has been created and provides a useful tool for load availability and payment solutions.

Will higher pay mean better driver retention?

better driver retention InstaFreight - Will higher pay mean better driver retention?

The majority of freight, 80%, is transported by road within Germany. However, recruiting long-haul truck drivers is becoming harder as more drivers leave the workforce, young workers are not interested in pursuing a career as a truck driver and let’s face it, work conditions are not ideal for many folks. Germany alone is expected to lose about 250,000 drivers to retirement in the next 10-15 years.

As noted in a recent blog post, two-third of all European long-haul deliveries are done by Eastern European trucks. The share of hauliers based in these Visegrad countries in the Western European transports exceeds 30%. Among the reasons for this growth is due to lower wages within these countries. As a result, in May, the European Commission issued “Europe on the Move”. These measures include EU-wide harmonization of the minimum wage of the truck drivers.

Europe on the Move

The new regulatory requirement is a controversial one. Labor Unions also were able to push the EU Commission to further improve work conditions by requiring employers to pay for a place where drivers can sleep during long trips abroad. Professional drivers will not be allowed to rest inside of trucks. Also, truck drivers will be required to manually register when they cross EU borders on a tachograph device.  The measure is expected to help controllers at roadside checkpoints determine whether they comply with the law.  And lastly, the proposal allows drivers to replace paper documents with electronic proof to show controllers, which the Commission hopes will relieve drivers of time-consuming administrative work.

It’s hard to say if this requirement will be enough to retain and even attract new drivers. If anything, it could ultimately prove a costly measure for shippers and customers and result in a backlash in terms of mode switching to perhaps rail, air or a multi-modal solution. For Western European truck drivers, the new proposal will level the playing field and likely improve the competitive environment.

The Role of Technology

Meanwhile, as the hunt for additional truck drivers drags on, manufacturers and technology are playing a role in the growing crisis. European truck manufacturers are making trucks to include more comfort features and safety systems in order to entice more drivers. “The times when haulers opted for trucks with only basic features are over…Safety systems and comfort are getting increasingly important, particularly for long-distance haulages.” (IHS Automotive).

In addition, autonomous trucks are being tested and will become a reality sooner rather than later. Could these vehicles be the answer to the industry’s labor issues? According to a report released by the European Automobile Manufacturers’ Association (ACEA), the International Transport Workers’ Federation and the International Road Transport Union (IRU) it is possible. “Automated trucks could reduce the demand for drivers by 50-70% in the US and Europe by 2030, with up to 4.4 million of the projected 6.4 million professional trucking jobs becoming redundant, according to one scenario,” the report says. Furthermore, the report notes that even if the rise of driverless truck dissuades newcomers from trucking, over two million drivers in the U.S. and Europe could be directly displaced.

Find out more

As the trucking industry evolves, companies will need to develop creative means to move freight on behalf of customers. Tools such as InstaFreight are proving beneficial as shippers look to maintain consistent flows and movement of freight with no disruptions. For trucking firms, InstaFreight is an easy to use app that eases load consolidation, payment processes and management of time for drivers. For more information, check out our website.

The Cooperation of InstaFreight and CargoLine

Cargoline collaboration - The Cooperation of InstaFreight and CargoLine

A recent union between the digital freight forwarder, InstaFreight, and the consolidated cargo network CargoLine, is looking to create a promising future for the customers they serve. It’s fascinating to see two companies coming together in the spirit of cooperation instead of competition, the way it often goes with start-ups. In the case of InstaFreight and CargoLine, it’s proving to be a very symbiotic relationship indeed.

In an article from Eurotransport, we can hear the thoughts of the CEOs from both companies explain why they believe this will be a beneficial partnership for both companies.

“‘At the moment, we do not have the resources for this form of digitalization, but we are fascinated by the business model,’ explains CargoLine managing director Jörn Peter Struck. In return, InstaFreight CEO Philipp Ortwein admits: ‘Building up our own network of carriers for consolidated cargo does not make sense for us, so we like to work with the experts of  CargoLine.’ Thematically, this fits: InstaFreight cares not only for partial and complete loads but also for consolidated cargo – the specialty of CargoLine. ‘We wanted to start with one product first and to enlarge gradually,’ says Ortwein.”

This partnership should prove beneficial to both companies for many reasons. CargoLine will move more towards a digital solution, allowing them to not only reach out to more customers but also to outsource orders that are too big for them to fulfill. InstaFreight, on the other hand, has access to a network of high-quality carriers for consolidated cargo, allowing them to fulfill the needs of more customers in a scalable manner.

The Benefits of Digitalizing Freight

The goal of InstaFreight is a pretty straightforward one; they want to digitalize the shipping industry. But why is digitalization significant? For starters, it offers an unparalleled step in efficiency that simply can be recognized by the old school way of thinking. Countless phone calls, emails, faxes, and spreadsheets can be replaced by a few simple clicks of the mouse. Shippers no longer have to scramble and jump through hoops to find a carrier, and in turn, carriers begin to operate more efficiently through the creation of a more transparent network. Before, when there was a hang-up, whether it be a broken down truck due to lack of proper maintenance, or a snare in loading and unloading, a carrier would be lucky to catch it when it happened. With a more transparent model, knowing where the problems are make them easier to correct before they become something more serious.

Because of that goal, InstaFreight doesn’t add to the already massive network of carriers and drivers on the road by adding their fleet into the mix. Instead, they look to create a more efficient network by adding their technological expertise to carriers already in operation. Shippers can find open spaces at a fair and fixed rate, and carriers operate more efficiently, making it a win all around. This system is so efficient, in fact, that InstaFreight has won the prestigious Eco Performance Award for making measurable changes as a start-up company.  

The aim is to find businesses that not only concentrate on the classic core business of logistics but also strive for innovative approaches to sustainability.

As noted from our press release:

The winner in the “start-ups” category – InstaFreight GmbH – specialises in track and trace and fleet scheduling, i.e. vehicle deployment control. Clients can digitally book transports immediately on a platform. InstaFreight achieves ecological benefits because its range of services lead to improved capacity utilisation. This not only saves costs, but also positively impacts the reduction of CO2 emissions. The solution also has a social aspect because the product integrates the environment of the employee (e.g. scheduling) into driver motivation.

InstaFreight and CargoLine will provide a one stop shopping experience for shippers that will help to drive up  sustainability, transparency, and efficiency for all it’s customers.

 

 

Improving Efficiency and Reducing Emissions

reducing emission instafreight - Improving Efficiency and Reducing EmissionsEmission reduction will be the name of the game as consumer conscious and environmental regulations are on the rise. Fortunately, reducing C02 emissions for freight transportation can be as easy as stepping up your logistics game. Improved logistics alone can help to reduce land freight emissions by 10 percent by the year 2050.

The European logistics sector leaves something to be desired. As it stands, 20 percent of trucks are running empty, and while there isn’t a reliable statistic for it, partially loaded trucks are also a fairly common occurrence. It stands to reason that poor utilization of trucks not only contributes to an unnecessary increase in carbon emissions but poor performance for trucking companies as well. Part of what contributes to this efficiency problem is the low cost of road transportation. An article from Transport and Environment believes that increasing the price of road transportation would cut down on the dead hauls while leading improvements in both efficiency and environmental changes for the industry as a whole.

Raising the (Rate) Bar

Increasing prices would force companies to think more about their logistics and how they utilize their assets. If business slackens, the increased pricing would provide a safety net for the trucking companies. Conversely, companies who are improving their logistics would find that there are more opportunities to make money, whether it be through booking round trip haulage or simply improvements to efficiency.

The increase in price might also have an interesting effect on the freight transportation industry as a whole. Let’s assume that there was a negative drop in demand due to the new pricing policy. This would cut down the number of empty trucks on the road, which would be a decided benefit. Additionally, the price increase would lead to a higher probability of road freight logistics being digitalized as road freight rates are currently too low to necessitate the need for a wide scale digitalization that would have a noticeable impact on the entire sector.  Fortunately, Europe is starting to move in the right direction to start getting their emission and efficiency issue in check.

“The European Commission is taking the right steps to unlock the potential described above. They proposed an amendment to the tolling directive (Eurovignette) in May. National governments should introduce, expand and redesign tolls so as to accelerate the market take-up of zero or low-carbon trucks. In parallel, national governments should consider gradually increasing diesel tax, ideally in bigger groupings of countries (to avoid fuel tax tourism). Revenues could be used to fund the transition of the sector,” according to Transport and Environment.

How InstaFreight can Help

Two goals that every company must strive for to be successful are sustainability and efficiency. Whether it is finding a more efficient way to communicate or cutting down on packaging, sustainability and efficiency go hand in hand.  Working towards a goal and achieving it do suffer from a wide degree of separation. Especially, when you’re trying to manage a large scale operation like a supply chain. Efficiency and sustainability are very much reachable goals, especially when you consider the possible impact digitalization can have on the supply chain.

The Perks of Going Digital

As technology grows, so does our capacity to realize its full potential. With veritable torrents of data out there, it’s a matter of knowing what to look for and knowing what to do with the information. For many companies, this can be an overwhelming task on itself. Not only is accessing data time consuming but combing through it to find something useful can be both difficult and expensive.

To that end, many shippers and carriers rely on 3PLs and Freight Forwarders to provide them with the information they need, when they need it. Timely access to data can create many opportunities to increase efficiency and sustainability.

However, it’s one thing to say that we know about sustainability in transportation and it’s another to show it. So let’s start with the fact that InstaFreight has won the prestigious Eco Performance Award 2017. The Eco Performance Award is the leading European award for sustainability in the transport and logistics sector. It is led by an expert jury of renowned industry representatives chaired by Prof. Dr. Wolfgang Stölzle from the University of St. Gallen.

We understand the need for both sustainability and efficiency in logistics, and we strive to help you achieve both. Whether you’re looking to simply reduce your emissions, cut down dead hauls, or just have a smooth running business, our digital platform can help.

Just-in-time – Plan And Be Ahead Of Others

Optimized JIT.2 - Just-in-time – Plan And Be Ahead Of Others

What does ‘Just-in-time – JIT’ mean

According to Investopedia, “Just-in-time (JIT)” is an inventory strategy, companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs. This method requires producers to forecast demand accurately.

JIT was originally developed by taking a hint from the way that U.S. supermarkets do product replenishment. As such, JIT in the Toyota Production System, for example, gave the Japanese auto industry an edge in the market and has been adopted by many companies in the manufacturing industry.

JIT applied for Freight Forwarding

As the birth of Just-in-time was motivated by the pure survival of the Japanese automotive industry, digitalization shall be the edge in Freight Forwarding nowadays. When the JIT method of manufacturing was first described it seemed both too much futuristic and impossible. When we talk about changing methods of transport booking we are faced with similar thoughts. “An 100% online Freight Forwarder? No, that might come in 25 years and it’s anyway impossible.”

But in fact, it’s here: InstaFreight has created a platform to order, book and perform goods deliveries, fully online. And by-the-way that is a further similarity to the basic idea of JIT.

Namely that the Toyota Production System has taken an existing trading model, that of the U.S. supermarkets. They replenish products only for the needed amount in small batches.

InstaFreight takes a purchasing principle that is familiar and is utilized across all industries. The platform works just like in a one-stop online shop, where one can compare freight rates and book a truck with a few clicks. InstaFreight is in line with the trends.

And one more parallel between freight forwarding and manufacturing. In both processes the workers, the freight clerks themselves directly make the decisions. In other words, JIT and online freight forwarding give people the ability to purchase/order products/services when they need them and for the amount needed.

Conclusion

A competitive edge in freight logistics cannot be gained by following the same principles and methods that other providers follow. Instead, implementing cutting edge tools and new methods work well when they follow some well-known and widely used practices of another industry. And last but not least change does not happen spontaneously. Change management that follows a clear vision is the most probable to succeed.

A one-step replacement of long term freight contracts with a spot based truck booking system may not be entirely realistic. Nevertheless, daily operations never run 100% perfect; contracted trucks might be late or unable to deliver. To make JIT work, there is almost always a need for a spot buffer; an “emergency” pool of freight trucks.

InstaFreight is the solution for this need. Freight clerks can organize a transport as-easy-as on an online shop, making quick decisions and gap-filling on the spot. At the end of the day, the Supply Chain is only as strong as its weakest link.

The Visegrad 4 – the Tigers of Europe?

Visegrad four - The Visegrad 4 – the Tigers of Europe?
“Tell me where Central Europe is, and I can tell who you are.” Jacques Rupnik, quoted in: Johnson, Lonnie (1996). Central Europe: enemies, neighbors, friends. Oxford University Press US

Central and Eastern Europe, whatever the exact description of the region might be, has many times been the turning table of European history. Nowadays this group of countries is playing an increasing role in the political as well as the economic re-shaping of Europe. With this article, I would like to bring your attention to the so-called Visegrad Countries.

A bit of history

“The Visegrad Group was formed in 1991 from a meeting between the President of the Czechoslovak Republic, Václav Havel, the President of the Republic of Poland, Lech Wałęsa, and the Prime Minister of the Republic of Hungary, József Antall.

This meeting in Visegrad, Hungary was similar in scope to one that took place in 1335. The earlier meeting was attended by John of Luxembourg, King of Bohemia, Charles I of Anjou (Charles Robert), King of Hungary, and Casimir III, King of Poland. In both meetings, there was the desire to increase cooperation and friendship among the three Central European states.

Why you should care

Data for the region confirms that economic growth quickened in Central and Eastern Europe (CEE) at the start of 2017. GDP expanded 3.9% over the same period last year in Q1, notably above Q4 2016’s 2.8% expansion. The first quarter’s reading marked the fastest growth since Q4 2015.

In terms of logistics, the market value growth of Eastern and Central European road transportation is the fastest in the world. International third party logistics (3PL) companies and large trucking fleets have a major presence in these countries thanks in part to lower labor costs as well as for strategic reasons.

Union

The Visegrad Countries are well aware of their growing importance in the European supply chain. In the spring of this year, the carrier associations of the Visegrad Fours took joint action by criticizing several Western European countries for creating barriers to restrict Eastern European truck traffic.

Beyond administrative regulations, these barriers include such rulings as any truck driver who enters a Western European country must earn at least the minimum wage of the particular member state. However, Eastern European haulier companies’ unique selling point is focused on lower wage expectation of their drivers.

An example: Austria borders four Eastern European countries: Czech Republic, Slovakia, Hungary, Slovenia. All these countries have different official languages. Moreover, they have various regulations regarding wage calculation and filing. Since January this year, truck drivers are required to file their wage documentation in German, certifying that the truck driver’s wage meets the minimum wage requirement in Austria.

Growing Volumes from CEE

According to Eurostats, two-third of all European long-haul deliveries are done by Eastern European trucks. The share of hauliers based in the Visegrad countries in the Western European transports exceeds 30%. Taking these figures into consideration, it is likely that Eastern European truckers cannot be replaced as easily as some might think.

“The participants of the April V4 hauliers summit in Budapest concluded that the implementation of protectionist measures adopted by various Western European countries in order to restrict competition by Eastern European transport operators would result in a significant price increase in Community member states, putting hundreds of thousands of jobs at risk across the eastern part of the Community,” according to the press statement sent to the Budapest Business Journal.

The leaders of road haulage federations in the Visegrád Four countries, represent a total fleet of 170.000 truck-trailers and 9.800 companies across the region, have requested to the European Union, a moratorium of these regulations. After negotiations, there was a promise to a sustainable regulation.

‘Europe on the Move’

The joint action seems to have taken effect. In May, the European Commission issued “Europe on the Move”. It is a complex legislation package, aiming to help the sector to stay competitive in a socially fair transition towards clean energy and digitalization.

These measures include EU-wide harmonization of the minimum wage of the truck drivers, introducing a so-called “posting” for “significant delegation of foreign labor”.

Posting is a situation where a truck driver works for a limited period in an EU Member State and receives temporary social rights  in that Member State. An example is the right to earn the same pay rate as local drivers. Currently, employers “posting” their drivers to other member states, even for very brief periods, are obliged to fulfill costly administrative requirements. The new rules are expected to bring about a fairer and more efficient system for road transport.

The new rules will also guarantee a higher remuneration if a driver works at least for three days in a month within a Member State at a higher pay rate. If the proposal comes into force, it will also include lighter and more adapted administrative requirements. Today, only few Member States implement the posting rules to road transport. The new rules will have to be applied in the whole EU.

It is of course hard to judge if the proposal will pass, but of particular note is that“Europe on the Move” was officially introduced by Vice-President for the Energy Union, Mr. Maroš Šefčovič, a Slovakian EU diplomat.

The Silk Road and Europe’s Trucking Industry

The Silk Road 2 - The Silk Road and Europe’s Trucking Industry

The historic Silk Road that connected the Far East to the West over two thousand years ago is returning to life and is now updated with trains, ships, and trucks. Announced in 2013, the New Silk Road is an overland and maritime trade network. Spearheaded by the Chinese government’s “One Belt, One Road” initiative, it is to promote economic cooperation between China and Europe, Middle East and Central Asia.

The first trains from China rolled into Europe in 2014 utilizing an old cargo route through Germany and final destination in Spain. Currently, at least 15 cities in Europe are now connected directly to China via China’s rail services and the number of European cities are expected to grow in the coming years. Major European rail terminals included in the network are:

  • Moscow (Russia)
  • Brest (Belarus)
  • Warsaw (Poland)
  • Duisburg (Germany)
  • Antwerp (Belgium)
  • Rotterdam (Netherlands)
  • Calais (France)
  • London (England)
  • Hamburg (Germany)
  • Hendaye (France)
  • Milan (Italy)
  • Madrid (Spain)

Faster than Ocean and Less Costly than Air

For shippers, the new Silk Road provides a third option to consider when moving freight between Asia and Europe. While the new Silk Road is a much faster connection than the usual 30-day trip at sea between Western Europe and China, marine shipping remains much cheaper. However, when compared to air freight, the Silk Road option is generally considered less costly but does take more time, about 15-18 days.

According to one shipper, providing this third option allows procurement managers to tailor their freight spend relevant to production. Instead of having to upgrade an ocean order to air, the rail mode gives them the option to meet deadlines without having the full expense of air freight.

Trucking from China to Europe

Less than 10% of Chinese exports to the European Union go by road, with most transported by sea or air. However, this could change. In 2016, China signed the U.N.’s TIR Convention, the global standard for international freight customs transit. As a result, this will enable Chinese freight containers to travel across Europe without being opened up to customs checks at each country border.

According to the IRU Secretary-General, by truck one can travel from western China to Europe in 8-12 days. Also, intra-regional Asian trucking will likely greatly expand. TIR-operating countries around China, including Afghanistan, Kazakhstan, Kyrgyzstan, Mongolia, Russia, and Tajikistan, also anticipate a boost to transport and trade when the system becomes operational in China.

Expectations for Europe’s Trucking Industry

With the rail option, once goods arrive at the rail terminal, trucks handle the final leg of the delivery. As such, the new Silk Road is ushering a rising demand for multimodal transportation services throughout Europe. Forwarders such as Geodis, DHL, Kuehne + Nagel and others typically manage the entire process, end-to-end. But, for small to medium size businesses and even smaller forwarders, securing a reliable trucking firm to carry goods to the final destination can be daunting.

Many trucking firms are already bracing for the increase in demand. Indeed, the Belarusian association of international road carriers (BAMAP) is among many trucking associations that anticipate such increasing demand for services. According to the association, once the Silk Road operates at full capacity, about 10% of all cargo will be transported via Belarus. In 2016, BAMAP experienced a 17% increase in international cargo volume (excluding bilateral transportation inside the Eurasian Economic Union) with the number of trips up by 14%.

“We anticipate increasing trucking demand as China’s One Belt, One Road initiative expands further into Europe.” Commented Philipp Ortwein, Managing Director of InstaFreight. “Capacity could tighten with increased demand but by using InstaFreight, shippers will have ease of mind by booking, managing and tracking cargo all in one place and online.”

How InstaFreight Can Help

Utilizing a tool such as InstaFreight for finding and booking carriers online for the first and last leg of the delivery can be useful for shippers.

Shippers just input their shipment requirements, such as pickup and drop-off location, characteristics of the cargo and then book the shipment. The digitalized booking process makes it easy for shippers not only to find carriers, get instant freight quotes and track the cargo but to manage documentation too. Trucking firms have already been vetted and all are insured. Payment to the carrier is managed by InstaFreight.

To learn more, visit our website as well as our LinkedIn and Twitter pages for the latest industry news and updates.

How Logistics is Adapting to Last Mile Deliveries

blog - How Logistics is Adapting to Last Mile Deliveries

Logistics has always been about the A to B where A was the manufacturing plant, and B was the retailer who was selling the items. However, with the rise of eCommerce and omnichannel marketing, A to B isn’t so straightforward anymore. Consumers now have the power to skip the store and have items delivered directly to them. It means, logistics and transportation providers have to find ways to make it work. In addition to having a wide variety of goods and products delivered right to their door, consumers want those products delivered even quicker than ever before.

The Last Mile of delivery is becoming a new focal point for logistics providers. So the question is, how is logistics adapting to last mile deliveries?

City Logistics

Last mile delivery is one thing, but contending with crowded streets and heavy traffic is something else altogether. Smart city logistics is just one new challenge that logistics providers will have to face. With warehousing space coming at a premium and often too far away from the city to be useful, what options are there?

One of the latest trends for warehousing space is repurposing. Across the United States, shopping malls that are falling into disuse (having been pushed out by e-commerce) are quickly being snatched up as distribution hubs for many companies. Many European cities are taking advantage of the falling car usage by repurposing multi-storey car parks into DC hubs which can provide easier access to the core of the city and reduce traffic and congestion.

Other companies are adopting warehousing models used in highly populated Asian cities like Tokyo and Hong Kong where multiple companies are sharing a single warehousing space which helps to cut down on operating costs and expenses.

New Delivery Methods

New delivery methods will also be crucial to integrating smooth last mile delivery services. Of course, everyone knows that Amazon is looking to deliver packages directly to customers doorsteps using drones. However, there are a lot of other innovations that can make last mile deliveries that much easier.

Package delivery bots are also starting to make the rounds as an automated carrier robot can deliver a package directly to a customer’s door without the need for a Federal Aerial Clearance. Additionally, there are many businesses that are bringing some new tricks to the trade. DHL and Daimler AG are working on a system that would provide a package carrier a one-time access code to the trunk of a consumer’s car, allowing deliveries to be made wherever the car is parked, whether it be at home or out and about.

In addition to new modes of delivery, there are also some serious upgrades being made to delivery trucks in general. Electric delivery trucks from Mercedes-Benz and Daimler AG have a delivery range of 200 kilometers with a payload of 26 tons, which can cut down on urban CO2 emissions. Additionally, these electric trucks could bypass the night time noise ordinance, which would allow deliveries to be made during a time of lower traffic volume and congestion in the city

Logistics Companies Get Smarter

Location and new delivery methods are all well and good, but if a logistics provider works at a suboptimal level then it’s all for nothing. To that end, many shippers and carriers are overhauling their logistics intelligence to work more efficiently

Digitalisation of freight services will play a large part in the adaptation process. As companies go digital, they gain access to a wide array of useful information and data that allows them to increase their transparency and operating efficiency. More data means smarter moves which result in less wasted time. When it comes to last mile deliveries, timing is king.

More and more companies are turning to freight forwarders like InstaFreight to provide them with the forwarding capabilities they need to get their goods from A to B. See why InstaFrieght is quickly becoming a go-to source for many shippers by visiting our website.