sustainable transport and reliable supply chains jari kauppila economist f&l working group...
TRANSCRIPT
![Page 1: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/1.jpg)
Sustainable Transport and Reliable Supply Chains
Jari KauppilaEconomist
F&L Working Group meeting, Paris, 2 July 2013
![Page 2: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/2.jpg)
Related work at the ITF/OECD
• Improving Reliability on Surface Transport Networks (ITF/OECD 2010) http://www.internationaltransportforum.org/Pub/pdf/10Reliability.pdf
• Managing Urban Congestion, ITF/OECD (2007) http://www.internationaltransportforum.org/Pub/pdf/07Congestion.pdf
• Internalisation of External Effect in European Freight Corridors http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DP201310.pdf
• Road Haulage Taxes and Charges, Summary analysis and data tables 1998-2012 http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DP201308.pdf (related database available at http://www.internationaltransportforum.org/statistics/taxation/index.html)
• Measurement of National Level Logistics Costs and Performance http://www.internationaltransportforum.org/statistics/taxation/index.html
• All ITF/OECD work on shipping http://internationaltransportforum.org/jtrc/maritime/index.html
2
![Page 3: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/3.jpg)
Related work at the ITF/OECD
• Statistics Brief on Global Trade and Transport http://www.internationaltransportforum.org/statistics/StatBrief/2013-04-Global-Trade-Transport.pdf
• Spending on Transport infrastructure 1995-2011 http://www.internationaltransportforum.org/statistics/index.html
• Moving Freight with Better Trucks (Summary document) http://www.internationaltransportforum.org/jtrc/infrastructure/heavyveh/TrucksSum.pdf
• Charges for the Use of Railway Infrastructure http://www.internationaltransportforum.org/Pub/pdf/08RailCharges.pdf
• Workshop and presentations on Information and Communications Technologies for Innovative Global Freight Transport Systems http://www.internationaltransportforum.org/Proceedings/Genoa2010/index.html
• Workshop and presentations on Innovation in Road Transport: Opportunities for improving efficiency http://www.internationaltransportforum.org/Proceedings/Lisbon2009/index.html
• Workshop and presentations on Overcoming Border Crossing Obstacles http://www.internationaltransportforum.org/Proceedings/Border2009/index.html
3
![Page 4: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/4.jpg)
Key messages
Take into account all elements of sustainability
Focusing on reliability can improve sustainability of supply chains
Reliability should be incorporated into transport policy
4
![Page 5: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/5.jpg)
Sustainability
Economic viability
Efficiency is key in contributing to growth
Social welfare
Safe and equitable access to jobs, education, healthcare
Impact on cost of goods
Environmental carrying capacity
Transport consumes massive amounts of finite resources
Should not surpass key environmental thresholds > limit opportunities for future generations
5
Sustainability and transport
![Page 6: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/6.jpg)
Sustainability and supply chains: challenges
Economic viability
Uncertainties (Volatility in oil prices, slack demand)
6
![Page 7: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/7.jpg)
Global freight volumes suggest continuous uncertainty
7
-13%
-5% -6%
Sep
-10
USA external trade by sea, total (tonnes)(% change from pre-crisis peak)
Jul-08 June-12
-14%
-3% -1%
Sep
-10
EU27 external trade by sea, total (tonnes)(% change from pre-crisis peak)
Jul-08 June-12
Source: International Transport Forum statistics
![Page 8: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/8.jpg)
Global air freight as a lead indicator
8
-20%
-1% -1%
Sep
-10
USA external trade by air, total (tonnes)(% change from pre-crisis peak)
Jul-08 Jun-12
-21%
16%
-3% -1%
Sep
-10
EU27 external trade by air, total (tonnes)(% change from pre-crisis peak)
Jul-08 Jun-12
Source: International Transport Forum statistics
![Page 9: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/9.jpg)
Supply chains and sustainability challenges
Economic viability
Uncertainties (Volatility in oil prices, slack demand)
Congestion
9
![Page 10: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/10.jpg)
10
Road Congestion
Continued dependency on road freight Options for shifting to other modes limited
Infrastructure investments necessary but not sufficient
Significant impact on efficiency
Unmanaged road capacity no longer an option Identify & target strategic bottlenecks Regional planning key in port-hinterland networks
Focus on managing networks for reliability, users’ needs
![Page 11: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/11.jpg)
Supply Chains and Sustainability Challenges
Economic viability
Uncertainties (Volatility in oil prices, slack demand)
Congestion
Social welfare
Supply chain contribution to cost of goods
Impacts on safety
11
![Page 12: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/12.jpg)
Safety
http://www.team-bhp.com/forum/commercial-vehicles-india/39265-container-truck-toppled-traffic-junction.html
Road safety
Around 1.3 million people die on roads every year 20-50 million injured
Truck involvement 10-25% in OECD countries Up to 70% in developing economies
Multiple causes, including speed, non-respect of traffic laws, over-loading and equipment failure
Huge cost for society and impact for well-being
![Page 13: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/13.jpg)
Supply chains and sustainability challenges
Economic viability
Uncertainties (Volatility in oil prices, slack demand)
Congestion
Social welfare
Supply chain contribution to cost of goods
Impacts on safety
Environmental carrying capacity
Energy use/GHG and air pollution (land and sea)
13
![Page 14: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/14.jpg)
14
Air pollution
Transport key contributor to the overall air pollution
Control strategies are known but implementation lagging in non-OECD countries
Need to address concentration of air pollutants in port cities and port areas
![Page 15: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/15.jpg)
Responses
Regulatory
E.g. mode-specific emission and energy efficiency agreements and standards
Reorganization of supply chains
Shifts in production composition
Relocating production (especially for low value goods where transport component is large)
Operational
Slow steaming
15
![Page 16: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/16.jpg)
16
Supply chains are slowing down
“There is this big, ugly thing in the middle of the supply chain slowing down” –Ron Widdows,
CEO Rickmers Holdings
![Page 17: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/17.jpg)
Supply chains are slowing down - impacts
Logistics business with inability to deliver goods on time
Inventory levels affected – more stocks are held in compensation for uncertainties
Companies need to adapt their operations either through the way they operate or building in buffer stocks
17
![Page 18: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/18.jpg)
18
Reliability carries a premium
“We like speed but spend most of our time making the supply chain predictable” –Jeff Langenfeld,
VP, International Logistics,
Walmart
![Page 19: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/19.jpg)
Reliability carries an premium
Reliability may matter more than speed
Cost of unreliability rival those of congestion
Users often face delays at interfaces
Reliable but slow can be also greener
19
![Page 20: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/20.jpg)
Shift in policy focus
20
Travel time
Current focus in reducing average travel time
Future focus in reducing also variability
![Page 21: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/21.jpg)
Choosing the low-hanging fruit
A key policy challenge to create incentive structures that encourage cost-effective solutions
Improvements can be delivered by both users and network providers
21
![Page 22: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/22.jpg)
Transport is a component of process speed
22
0%
5%
10%
15%
20%
25%
30%
35%
Owncompany
action
Problem atdelivery
point
Trafficcongestion
Problem atcollection
point
Lack ofdriver
Vehiclebreakdown
Huboperation
% o
f to
tal
del
ay t
ime
McKinnon et al (2009).
Easier to pay someone to move goods faster than to change the procedures within the company
“Own company actions” the most important source of delays
![Page 23: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/23.jpg)
PIMP your transport policy
Provision: Increase physical capacity either through supplying
extra capacity or improving the quality of existing infrastructure
23
![Page 24: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/24.jpg)
Provision
Physical growth through new, expanded or upgraded facilities (mostly bottleneck removal)
Higher network standards can deliver higher reliability
E.g. long-life pavements reducing need for maintenance
Providing additional capacity in infrastructure has limited remaining scope in traditional corridors
Time consuming, costly and politically difficult
24
![Page 25: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/25.jpg)
PIMP your transport policy
Provision: Increase physical capacity either through supplying
extra capacity or improving the quality of existing infrastructure
Information: Informing users enabling them to mitigate the
adverse effects of poor predictability
25
![Page 26: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/26.jpg)
Information
Monitoring reliability is a policy signal and needed to inform policy
Diverge information is needed for different users
1. Government to design cost effective policies
2. Network managers to enhance service provision
3. Users (carriers) to adapt behaviour accordingly or to mitigate adverse effects of poor reliability
4. Logistics managers handling the total trip not just part of the trip (supply chain)
26
![Page 27: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/27.jpg)
“Fluidity index” by Transport Canada
27
Source: Transport Canada – Economic Analysis & Research
Evidence-based information leads to greater accountability and transparency in the supply chain and will benefit all gateway users
![Page 28: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/28.jpg)
PIMP your transport policy
Provision: Increase physical capacity either through supplying
extra capacity or improving the quality of existing infrastructure
Information: Informing users enabling them to mitigate the
adverse effects of poor reliability
Manage: Better management of existing infrastructure
28
![Page 29: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/29.jpg)
29
Managing existing infrastructure
“Before building new infrastructure, we need to make sure the existing works as it was meant”
– Catharina Elmsäter-Svärd, Minister of Infrastructure, Sweden
![Page 30: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/30.jpg)
Managing existing infrastructure
Pro-active management
Active management
Government can have a facilitating role
Managing interfaces
Ports and hinterland connections
Borders
Network providers
Organizational interfaces
30
![Page 31: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/31.jpg)
PIMP your transport policy
Provision: Increase physical capacity either through supplying
extra capacity or improving the quality of existing infrastructure
Information: Informing users enabling them to mitigate the
adverse effects of poor reliability
Manage: Better management of existing infrastructure
Price: Charging directly for reliability to achieve more efficient
levels of reliability
31
![Page 32: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/32.jpg)
Price-reliability spectrum, with circle size illustrating traffic volume (USA)
32
Source: Derived from The Tioga Group (2003).
![Page 33: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/33.jpg)
Conclusions
Take into account all elements of sustainability
Focusing on reliability can improve sustainability of supply chains
Improves efficiency
Reduces congestion, cost of goods and environmental footprint
Focus on interfaces and better management
Governments may have a facilitation role
Enhanced interface coordination and corridor management
Provide information for all users
33
![Page 34: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/34.jpg)
Future and on-going work at the ITF/OECD
Workshop on Supply Chain Resilience
APEC Supply Chain Resilience Workshop, Bali, 26-28 July 2013
Follow-up early 2014, jointly with APEC
Measurement of national-level logistics costs and performance (two post-docs)
Supply chain performance
ways to better measure and benchmark their supply chain performance (APEC priority)
Working Group on Infrastructure Adaptation to Extreme Weather and Climate Change (on-going)
34
![Page 35: Sustainable Transport and Reliable Supply Chains Jari Kauppila Economist F&L Working Group meeting, Paris, 2 July 2013](https://reader035.vdocuments.us/reader035/viewer/2022062511/551b9a70550346a10a8b5df4/html5/thumbnails/35.jpg)
Thank youJari KauppilaT +33 (0)1 45 24 97 21E [email protected]
Postal address 2 rue Andre Pascal75775 Paris Cedex 16