Driving Sustainable Logistics in Europe

Could cluster-based freight corridors bolster economic activity in Europe?

A hyper-connected network of logistics clusters could play a key role in achieving the European Union’s goal of creating a sustainable, more efficient freight transportation system.

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One goal of Clusters 2.0 is to increase the average door-to-door vehicle load factor by 75 percent.

An EU-backed research initiative called Clusters 2.0 is laying the groundwork for such a network by developing ways to link freight hubs via the physical internet.

Clusters 2.0 comprises many research projects and freight interests. The Zaragoza Logistics Center (ZLC), Zaragoza, Spain, is working on methodologies for collaboration within and between logistics clusters.

PLAZA, Europe’s largest logistics park located near Zaragoza, is one of the clusters involved in the initiative. The others are: Duisburg (Duisport), Lille (Dourges), Bologna-Trieste (Interporto/Port of Trieste), Brussels (BruCargo), London (Heathrow), Pireaus (PCT) and Trellebourg (Port).

Creating a collaborative platform

Increasing the volume of freight moved by rail is central to the EU’s sustainable transportation strategy. To this end, the EU wants 30 percent of freight flows that exceed 300 kilometers in length to shift to rail by 2030 – and 50 percent by 2050.

Clusters 2.0 will provide management models and tools that companies need to move freight by rail between hubs. And by exploiting synergies between the enterprises involved, loads can be bundled to capture economies of scale. One of the goals is to increase the average door-to-door vehicle load factor by 75 percent.

This will require the trading partners to collaborate at both tactical and strategic levels, which is why ZLC is engaged on developing a multi-user collaborative platform.

Many questions must be answered before such a platform can become a reality.

For instance, who will orchestrate and manage it? Perhaps an intermediary like a fourth-party logistics provider (4PL) could fulfill the role. Interoperability is another issue. How will information flow between disparate IT systems and stakeholders?

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Increasing the volume of freight moved by rail is central to the EU’s sustainable transportation strategy.

Fortunately, the EU has sponsored substantial research in this area, and ZLC is utilizing these findings to develop interoperability solutions for cluster-based freight networks.

Prototypes of modular load units for moving freight – an important element of the physical internet concept reliant on the seamless movement of goods – and automated transshipment systems also are under development.

Clusters 2.0 aims to develop low-cost, low-capital and investment-intensive systems that reduce the operational costs of transshipment by 30 percent.

The project’s collaborative platforms will extend to manufacturing. Manufacturing operations create demand for logistics services, and it is important that these demand-side requirements are wired into the freight transportation management systems that underpin the new corridors.

Proximity Terminal Networks

Proximity Terminal Networks (PTNs) represent another important component of the Clusters 2.0 project. PTNs are “regional” networks of intermodal terminals that function internally within clusters.

They are part of the asset and resource sharing mechanisms that support the broader integrated network, especially in relation to freight movement planning and execution and cargo consolidation.

Clusters 2.0 could have a significant impact on the regions in which individual clusters operate. A project goal is to increase economic activity in these locales by 5 percent annually while maintaining a neutral environmental impact on surrounding areas.

The project could also boost economic activity within each participant cluster. Hub performance and engagement will improve, possibly doubling the amount of value-added activities carried out and increasing the volume of freight managed by existing infrastructure by as much as 50 percent.

Much of the work will be carried out in living labs, which will test, improve and validate the proposed solutions and develop the required business models. ZLC is currently working in a living lab dedicated to creating a symbiotic network of logistics clusters.

The aim of this living lab is to connect TEN-T corridors’ hubs – hubs considered to be of strategic importance in Clusters 2.0 – by implementing an innovative framework for inter-cluster cooperation. This framework, supported by a dynamic transaction platform, should convince EU shippers and logistics service providers, including 4PLs, to bundle their volume in a regional TEN-T hub.

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The role of logistics will expand to encompass the competitiveness and sustainability of industry in Europe.

Based on the methodology developed by the Dourges and Barking cargo handling terminals in the project, the freight bundling concept will be duplicated to other TEN-T hubs.

As well as being an important step in the EU’s overall sustainability strategy, Clusters 2.0 offers an opportunity to extend the role of logistics clusters in the region.

Greater logistics activity

If these hubs are to support the growth of intermodal freight as envisioned, their traditional function as centers of logistics activity will expand to encompass the competitiveness and sustainability of industry in Europe. And their geographic reach will increase as more clusters join the network.

The knowledge created will benefit future projects.

One of the tasks that ZLC has been allocated is to create a comprehensive inventory of relevant knowledge. This database will be made available to the logistics community once the 36-month Clusters 2.0 project is completed in April 2020.

This article originally appeared on Supply Chain @ MIT blog and was republished with permission.

Dr. Milos Milenkovic is a Research Fellow at the MIT-Zaragoza International Logistics Program.

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