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Alan McKinnon – Professor of Logistics

THE 
LOGISTICS BLOG

Current issues in logistics and transport

Prioritising the flow of empty trucks: another Brexit anomaly

The Financial Times has just revealed an ‘official sensitive’ UK government plan to ‘fast-track’ the return of empty lorries going back to the European mainland via the Dover Straits to collect food for UK supermarkets.  As these vehicles have no products onboard they are not subject to the new post-Brexit customs paperwork and checks.  The government is clearly afraid that when the anticipated truck queues build up on access roads to Dover over the next few weeks, there will be a shortage of vehicles to bring EU-sourced food into the country.  Given the length of the delays on this route last month, many hauliers are naturally reluctant to risk tying up their valuable assets for many hours, if not days, in motorway tail-backs and holding areas.

So far this month truck traffic on the cross-Channel routes has been flowing relatively smoothly but this is unlikely to continue for much longer.   Traffic volumes have been more than 50% below normal for this time of year – mainly for three reasons.  First, fearing severe disruption in the days immediately following the end of Britain’s Brexit transition period on December 31st, many companies on both sides of the Channel have been stockpiling goods.  This, however, provides only temporary relief; as the buffer stocks run down, deliveries will have to resume. Second, many companies, particularly in the retail sector are having difficulty sorting out the customs paperwork they now have to complete, in many cases for the first time, and this is delaying the dispatch of the goods.  Third, tight Covid lockdowns in the UK and its EU near-neighbours are also depressing the level of economic activity. 

After this Brexit ‘honeymoon period’ traffic levels are expected to rise and French customs controls to be more rigorously applied. The UK Department of the Environment, Food and Rural Areas conceded in a document circulated last night to industry  that the ‘potential for further disruption remains high’.  So the contingency plan to expedite the return of empty trucks critical to the UK’s inbound food supply chain may seem a sensible precaution.  It nevertheless raises several thorny issues.

First, why just food and not industrial components for, say, automotive and aerospace plants which need them on a just-in-time basis to maintain their operations.  Presumably because empty supermarket shelves are more visible, newsworthy and politically embarrassing than the suspension of production in factories out of the public view.

 Second, exporters of time-sensitive products such as Scottish seafood will be justifiably aggrieved that their outbound trade is considered less important that imports of foreign food.  This seems contrary to the Brexit rhetoric.

Third, this plan sets a worrying precedent for hauliers shuttling freight between the UK and EU as it shows that the authorities are prepared the abandon the principle of fairness in the management of a queue.   The British used to be renowned worldwide for their respect for queuing.   Now that queue-hopping is officially sanctioned for particular types of traffic, foreign hauliers, who are responsible for 90% of truck movements on the Channel crossings, may be even less willing to serve the UK market, particularly if they are unable to persuade a traffic policeman that they’ll be coming back with a truckload of courgettes, clementines or cucumber.

Posted in Discussion | 1 Comment

Lorry traffic: a Brexit Nemesis?

France has just closed its border to lorries arriving from British ports in response to the new, more infectious strain of Covid19 now sweeping the UK.  Currently around 10,000 lorries a day make the main Dover to Calais crossing.  In supply chain terms this 27 nautical mile link is among the most critical in the world.  The term ‘logistical nightmare’ has been so often used it has lost much of its impact, but it aptly describes the situation in which many thousands of businesses dependent on UK-France road freight connections now find themselves. 

This suspension of services may be dismissed as a short-term over-reaction by the French government, but it is also a timely reminder that serious, longer term disruption of UK-EU supply chains is only two weeks away.

What government would deliberately risk plunging the country into a logistical crisis during the worst medical emergency in a hundred years? The answer is a government that prioritises an ideological principle over the state of the economy and well-being of the people.  Adherence to Brexit demands severing the UK’s remaining ties with the EU on the 31 December 2020 come what may, ‘no ifs no buts’.  No matter how strong the warnings from industry, Parliamentary Committees and independent public bodies that the country is not prepared for this impending rupture with the EU economy, the government insists that it must happen.  Although it concedes that the new Covid strain is ‘out of control’ and requiring radical lockdown measures, there is no suggestion that the end of the Brexit transition period, due in 10 days, might be extended.  A call today for this to happen will no doubt be cursorily dismissed.   This is surely the true measure of the UK government’s utter devotion to the Brexit cause, a cause which according to opinion polls now commands the support of a diminishing minority of British citizens.

Brexit news is currently dominated by the prospects of a last-minute trade deal being agreed.  For many months these prospects have been oscillating between bright and dismal but none of the deals on offer, no matter how much they are hyped, will avert the logistical disruption we are facing.  Most of this disruption will be caused by Britain’s decision to leave the EU Customs Union, effectively ending friction-free trade between the UK and its main market which accounted for 43% of its exports in 2019. Only an eleventh-hour reversal of this decision or an extension to the Brexit transitional period can now spare us the impending dislocation of EU-UK supply chains.  Both options would, of course, be anathema to a government hell-bent on delivering Brexit at any cost.

Over the past week, before the new suspension of services was announced, we had a foretaste of what is likely to happen from January onwards. Companies desperate to build up and reposition inventory ahead of the December 31 deadline have caused a pre-Brexit surge in lorry traffic on the cross-Channel routes, which account for 90% of truck-borne trade between the EU and UK. This has resulted in 25-30 km tailbacks on port access roads on both sides of the Channel. According to the Sixfold real-time mapping, on the morning of Friday 18 December, when there were no truck delays at almost every other international frontier in Europe, the average delay was 5-6 hours on the Dover-Calais route and 13 hours between Dunkerque-Dover. And this is before any customs checks are introduced. Once they are, problems arising from untested computer systems, vehicles arriving without the right paperwork, acute staff shortages in customs brokerages etc are likely to cause even longer delays.

The potential extent of these post-Brexit delays to freight moving on the cross-Channel routes is indicated by the 1700 vehicle capacity of the new lorry holding area that the government is building in Kent.  1700 16.5 metre long articulated lorries would form a nose-to-tail traffic jam 28 kilometres long.  The government’s own ‘reasonable worst-case’ scenario envisages as many as 7000 lorries queuing, a tailback extending from Dover to the outskirts of London.  These tailbacks are typically portrayed in the media as a traffic problem, but this under-estimates their wider implications for the road haulage industry, the management of supply chains and the economy as a whole.

 EU-based hauliers are responsible for four-fifths of the cross-Channel road freight market.  As flows are predominantly inbound to the UK these foreign hauliers usually struggle to find backloads. So the economics of delivering to the UK are relatively unfavourable even before Brexit depresses the level of exports to EU countries and shrinks the available pool of return loads.  The economics will become even less attractive once the new operational and administrative stresses of serving the UK market are factored into the equation. One or two day delays are likely then to become routine, new customs paperwork will be mandatory and it will get harder to find truck drivers willing to make the UK round trip. In a European haulage market already suffering from a chronic driver shortage, how many drivers will want to regularly spend many hours, if not days, waiting in their cabs on both sides of the Channel, often with limited access to toilet and catering facilities?  A high-friction UK border means gross under-utilisation of vehicle assets and labour which will translate into much higher operating costs and freight rates.  A few days ago a German haulier I know was able to charge almost five times as much as normal for a delivery from Hamburg to London because of the current delays.  How high will road freight rates to and from the UK rise once post-Brexit trucking delays on cross-Channel routes become endemic?

The wider impact on EU-UK supply chains and production systems, finely-tuned to just-in-time replenishment over three decades of friction-less movement, will be even more severe.  These international supply chains are not only being subjected to a substantial lengthening of transit times on the main roll-on roll-off ferry routes: acute congestion at the UK’s main container ports, which is partly Brexit-related, is compounding the problem.  In recent weeks Honda has had to suspend production at its UK plant because delays in its inbound component supply chain, while IKEA has warned its UK customers of a decline in product availability.  These high-profile examples of the vulnerability of UK-bound supply chains are just the tip of a very large iceberg spanning many industrial and retail sectors.

The government’s decision to phase-in UK customs controls over a 6 month period from January may seem a welcome concession, but it is debatable how much logistical relief it will bring.  Tying up vast numbers of lorries in outbound traffic queues awaiting French customs clearance, will also limit transport capacity in the inbound direction with or without customs checks on the UK side.   Nor will the phase-in of UK customs checks help those managing the distribution of Britain’s exports to EU customers.  In addition to facing outbound delivery delays, many still lack the information they will need to trade with EU businesses just two weeks from now.  For several months they have been instructed by a patronising government PR campaign to ‘check, change and go’ but the British Chamber of Commerce’s Brexit Guidance Dashboard for December shows that ‘businesses still have insufficient official information available in 24 critical areas (out of 35), undermining their ability to prepare for change on 1st January’.

I have long argued that ultimately it would be the reality of disrupted supply chains that would make people and politicians realise what a bad idea it was to leave the EU.  No amount of political debate and media discussion on this issue can compare with traffic jams, empty shelves, factory closures, higher prices, medical shortages etc in shaping the public mood.  The next few months will reveal if this is correct.

Posted in Discussion | 5 Comments

The Forgotten Cost of Brexit Day

Today, the 31st October 2019, was to be Brexit Day, the day of Britain’s departure from the EU after 45 years.   In the 3½ months since becoming prime minister Boris Johnson has insisted that Brexit would happen today ‘do or die’, ‘no ifs and buts’, ‘come what may’ etc.   His EU-departure rhetoric even extended to him saying he would prefer death ‘in a ditch’ to seeing Britain remain an EU member beyond this iconic date.  Three million specially-minted 50 pence coins were to be released today to celebrate the event, rather ironically inscribed with the words ‘Peace, prosperity and friendship with all nations’.  Meanwhile, in preparation for the big day, the government has spent a £100 million on a last-minute information / propaganda campaign using every possible media channel to urge citizens and businesses to ‘Get Ready for Brexit’.

Well, today has come and we are still a full member of the European Union and will remain so at least until the end of January next year.  The EU ‘deal’ that Johnson’s team managed to cobble together with a few days to spare actually received Parliamentary support but because he could not get a majority of MPs to agree to debate and approve the bill in time for a 31st October departure it has now been abandoned in favour of a general election.  Suddenly media focus has swung from Brexit negotiations to the election, leaving the full significance of this critical date for business almost completely ignored.

I can find little reference in the press or news websites to the huge cost, time and effort that businesses across the UK and Europe have had to invest in contingency planning for the no-deal Brexit that could have happened today.  Overnight this would have ruptured Britain’s trade links with the EU, seriously disrupting the tens of thousands of supply chains that are threaded through a handful of Channel crossings, of which by far the most vulnerable is Dover-Calais. The government’s own internal Operation Yellowhammer report explained just how bad things could get: 40-60% reduction in the volume of trucks and 2½ day delays on the Dover-Calais route, not just for a day or two, but for three months.

It is little wonder that companies potentially exposed to a disruption of this magnitude have taken measures to limit the possible damage.  These measures have included stockpiling, often in newly-acquired and difficult-to-find warehouse space, repositioning production and inventory, re-routing freight flows, reconfiguring the sourcing of supplies and rescheduling production operations around the end of October.   All of this has come at a high cost.  It has also had be done twice in 2019 because the same happened prior to the original Brexit date of the 29 March. 

The cost of all this contingency planning and logistical preparation has not been quantified at a macro-level.  The Office of Budget Responsibility undertook a ‘fiscal stress test’ of the impact of a ‘no-deal, no transition Brexit’ which suggested it would increase public borrowing by around £30 billion, even within what was ‘by no means a worst case scenario’.  Large though this figure is, it does not give a true indication of the economic impact of a no-deal Brexit.  The OBR’s macro-economic modelling assesses mainly the post-Brexit effects and largely excludes the expenditure businesses have made in anticipation of Brexit, expenditure that has had to be incurred regardless of whether or not Britain actually leaves without a deal and transitional period.

The OBR report also fails to make any reference to the supply chain bull-whip effect which successive waves of pre-Brexit stockpiling must already have triggered.  UK government economic data for the period January-April 2019 clearly shows a spike in inventories in March and subsequent destocking.  The amplifying effect of this temporary, but pronounced surge in demand is likely to have a destabilising effect on production and distribution systems for months, and possibly years, to come.

The extensive literature that accumulated over the past 20 years on supply chain risk management discusses a huge range of eventualities that can interrupt the flow of goods.  I can’t recall any reference, however, to a government risking this by deliberately taking the national economy to the brink of disaster, supposedly to strengthen its negotiating position with the EU but mainly to fulfil the reckless promises of its prime minister.  In so doing the UK government has shown an alarming failure to understand the supply chain implications of its actions.

Thankfully we have avoided logistical mayhem today, but it may still happen when the current extension ends on the 31 January. Surely businesses will not have to gear up for a no-deal Brexit for a third time!

Posted in Discussion | 3 Comments

40 years an academic: some personal reflections

It was forty years ago this week that I took up my first academic post, as a lecturer in the geography department at the University of Leicester.  It was a rather inauspicious time to embark on an academic career.   A general election on the day of my interview for the Leicester job had brought Mrs Thatcher to power and within a year or so her government slashed public funding for universities. This made my early years in higher education rather demotivating as much of the talk was about job losses, departmental closures, salary erosion and the difficulty of obtaining research funds.  

The life of a researcher at that time wasn’t just constrained by money.   Conditions were distinctly low-tech by current standards. For example, we had one external telephone line for the whole department, two computer terminals linked to the university’s mainframe and a quaint system of getting the head’s approval for any photocopying. All this for around 25 academic staff, PhD students and post-docs.

In that pre-digital age before word-processing, micro-computing, the internet, smart phones and social media, research progressed at a more leisurely pace.   Communication was primarily by snail-mail and instead of instantaneous downloads you had to wait a week or two for inter-library loans of literature not held on campus.  Literature reviews involved laborious trawls through banks of index cards and the reference lists of journals and books.  No instant access to online databases, no keyword searches, no cutting and pasting…  Millennials must wonder how any serious research could have been done at all under such primitive conditions. 

On the other hand, keeping up with the literature was much easier back then.  Logistics was only just developing as an academic discipline.  I reckon that it would have been possible to read its entire literature in two or three weeks. There was an abundance of interesting research questions and much pioneering work to be done devising new conceptual frameworks and experimenting with new analytical techniques. With very few academics specialising in the subject, it was far easier than today to get established and gain recognition, even with the limited dissemination channels available at the time. 

New entrants to the academic world of logistics today may have access to electronic research tools unimaginable back in 1979, but their professional lives are so much more demanding and stressful in other respects.  After forty years of research and an explosion in the number of logistics specialists, the field has become fairly crowded and unexplored topics are hard to find.  The challenge now is to find a niche within which to build a research reputation.

When I started, reputation-building was an informal process of gaining the respect of a small peer group.  Today, thanks to Google, Web of Science and Scopus and the ardent compilers of journal rankings, your reputation is quantified by a range of bibliometrics that Deans regularly use to decide if you are worth recruiting, retaining rewarding and promoting.   One can argue, of course, that this more scientific approach to assessing personal research performance is fairer and more consistent than the procedures used forty years ago, but it is not as objective as claimed and it has changed the ethos of departments and institutions not always for the better.

One thing that certainly has changed for the better during my academic career is the gender balance, though it has still some way to go.  When I arrived in the all-male geography department to take up my post in October 1979, several staff mentioned that they would have preferred to have a woman, but this had been over-ruled by the head of department at the time who said such a thing would happen only ‘over his dead body’.  Looking back, it is sad to think that I partly owed my first lecturing job to academic sexism

Posted in Discussion | 7 Comments

Food Stockpiling for a No-deal Brexit: a serious proposition?

There has been much discussion recently in the UK media about the possible need for Britain to stockpile food in preparation for a ‘no-deal’ Brexit. 30% of the UK’s food is sourced from the EU, 50% more than from the rest of the world combined. So serious disruption to the inbound flow of food from the EU could pose a major problem.

In an answer to a Parliamentary Committee on the 24 July the new Brexit secretary, Dominic Raab, offered assurance that the country would have ‘adequate food supplies’ but said, ‘It would be wrong to describe it as the government doing the stockpiling’. This implied that the food industry would be taking responsibility for any stockpiling. This met with a cool response from representatives of the food industry who claimed that they had not been consulted on the matter. A senior executive of a large British supermarket chain was quoted in the Financial Times as saying ‘It’s ridiculous. It’s scary because it shows how far the government is from the reality of how things work. It’s genuinely worrying.’

Most of the press comment has questioned the feasibility of food imported from the EU being stockpiled in the period leading up to a no-deal Brexit. Ball, in an article in the Guardian, summarised the prevailing view when he stated that ‘factories couldn’t just step up production before the Brexit date and store the surplus… They no longer have much space to store their product’ since ‘the UK’s highly efficient supply chains work on a “just in time” basis’. In the FT article, the British Retail Consortium (BRC) explained that retailers too ‘do not have the facilities to house stockpiled goods and in the case of fresh produce it is simply not possible to do so’.

This focus on feasibility has diverted attention from the more fundamental question of whether stockpiling will actually be necessary.

You normally stockpile in anticipation of a temporary disruption to the flow of goods caused, for example, by an extreme weather event, industrial dispute or military action. In the event of a no-deal Brexit the disruption would not be caused by Britain’s former EU partners withholding supplies. Inbound trade would continue to flow but take longer to reach its destination in the UK. Customs delays at ports and airports would lengthen international transit times, perhaps by several days. As the BRC explained in a letter to the Prime Minister and EU Chief Negotiator , ‘Failure to reach a deal – the cliff edge scenario – will mean new border controls and multiple ‘non-tariff barriers’, through regulatory checks, that will create delays, waste and failed deliveries’. International food supply chains operating on a just-in-time basis have little inventory to buffer against such delays. This applies particularly to fresh produce entering the country. As Lang et al (2018) note, ‘Much of the stock and storage is in the trucks on the motorways and autoroutes’.

Any resulting food shortages might only be short-lived, however.

In theory, they should only last for the additional number of days that products spend in the supply chain because of the new customs arrangements. For example, if a 4 day delivery of fruit from a supplier in Italy to a retailer’s distribution centre in the UK were extended to 6 days post-Brexit, there would be a two day period of short supply. Thereafter, the system should adjust to the longer transit time and the availability of the product in the shops return to normal.

This, however, would be a new and significantly inferior normal, in several respects:

1. The extra in-transit inventory would increase supply chain costs and be reflected in higher prices / lower profits.
2. The longer delivery time would make the supply chain less responsive to short-term fluctuations in demand.
3. As it would now take longer to adjust the flow of product to these variations in demand, UK food manufacturers, retailers and wholesalers would probably have to increase their inventories, reversing the just-in-time trend of the past forty years. This would be a longer term development as many companies lack the storage capacity needed to accommodate the extra inventory. It would further inflate logistics costs.

One can construct an optimistic scenario in which a no-deal Brexit would only disrupt EU food imports for a few days and only affect products with relatively time-sensitive supply chains. In this scenario there would be little need for stockpiling. Consumer demand could temporarily switch to alternative domestically-sourced products or foreign-sourced foodstuffs with larger UK inventories. There might be enough short-term flexibility in the UK food supply system to deal with such a switch, keeping the impact on the average person’s diet to a minimum. After all, according to the Cabinet Office, the food industry ‘remains highly resilient owing to the capacity of food supply sectors and the high degree of substitutability of foodstuffs’.

On the other hand, in the days following a no-deal Brexit delays to inbound food movements could last much longer and the adjustment of EU-UK food supply chains to longer transit times prove more problematic. The UK Food and Drink Federation envisages a no-deal Brexit causing ‘disruption on a pretty epic scale, at least for a number of months’. This may be a more realistic scenario.

Cross-border transit times could become not only longer, but also more variable as ports and airports struggled to cope with the new regulatory regime. The reliability of food imports from the EU could then be significantly eroded long after Brexit day. This would be reflected in lower availability of many EU-sourced products on supermarket shelves.

This would still be a long way from a national emergency requiring the strategic stockpiling of basic foodstuffs to maintain the health and well-being of the population. A no-deal Brexit would unquestionably have an adverse effect on the performance of UK food logistics but would not push the country to the brink of starvation!

All this assumes, of course, that there will be no panic buying prior to a no-deal Brexit. Media speculation about Brexit’s possible impact will no doubt intensify as the critical departure date approaches, causing many consumers to stock up on food just in case. If it is mainly the general public that does the stockpiling, just-in-case at a consumer level will collide with just-in-time at an industry level, amplifying the negative effect of Brexit on food supply chains.

To minimise the need for any form of food stockpiling we should, as Lang et al recommend, ‘avoid a hard food Brexit at all costs’.

Posted in Discussion | 2 Comments

Happy Birthday IMO

In 1948 the newly-founded United Nations decided to set up an organization to regulate international shipping. Although the International Maritime Organization (IMO) was not actually established until 1958, it is celebrating its 70th birthday this year. To mark the event the IMO held a Forum at its headquarters in London on ‘World Maritime Day’ to discuss its future role in the light of wider developments in the global shipping industry. I had the honour of being one of the seven panellists invited to debate the subject before an audience of around 450, comprising representatives of many of the IMO’s 174 member states and specialists from a range of other maritime-related bodies. Here are a few of the points that I made and several others I would have liked to make had the opportunity arisen.

First, in response to a question about how IMO could stimulate international trade, I argued, perhaps rather mischievously, that this is not its role. It is essentially a regulatory organization which facilitates trade and ensures that high safety and environmental standards are maintained in the movement of people and goods by sea. It should leave the job of promoting international trade to the World Trade Organisation, the World Bank, the IMF etc. Besides, with maritime tonne-kms forecast to grow three-fold by 2050 on a business-as-usual basis, there doesn’t seem to be much need for more ‘stimulation’.

Reinforcing the upward trend in international shipping would also make it harder for the IMO to achieve its target of cutting GHG emissions from shipping by 50% by 2050 against a 2008 baseline. This target was agreed recently by the IMO’s Marine Environment Protection Committee (MEPC). The IMO’s own forecasts of maritime traffic growth suggest that by 2050 the carbon intensity of international shipping will have to drop by 70% to meet this target. Piling on more traffic growth will simply make this already very formidable carbon intensity challenge all the more challenging. One of the other panellists expressed confidence in the shipping industry eventually becoming carbon neutral. A comprehensive review of decarbonisation options for the maritime sector published last year by Bouman et al suggests that this is a pipe dream, unless one resorts, as in the aviation sector, to extensive carbon offsetting – a marine equivalent of CORSIA.

Partly in response to audience and online questions, our panel also explored the case for taking a broader end-to-end supply chain view of maritime decarbonisation. While the IMO’s remit has traditionally focused its attention on the vessels, it also needs to recognise the inter-relationship between shipping, port and hinterland transport emissions. As the only logistics specialist on the stage I naturally emphasised the importance of understanding how changes in global logistics systems and supply chains would influence the future carbon intensity of shipping. After all, one of the main decarbonising forces in the maritime sector over the past decade has been slow steaming, a practice that has required significant logistical adjustment on the part of shippers.

The IMO has four degrees of separation from the shipper community. It ‘outsources’ the implementation of its conventions to the governments of its member states. The IMO rules which national governments then impose and enforce impact directly on the ship operators, with their customers, the shippers, affected indirectly. The IMO is at the heart of a maritime regulatory ecosystem comprising member states, classification societies, P&I clubs etc which by all accounts functions very effectively. In developing multi-stakeholder initiatives to address the challenges of the next 70 years, such as decarbonisation, adaptation to climate change, opening of Polar shipping routes and vessel automation, it may have to strengthen its links with other key players across the wider maritime world, including not only the shippers, but also the port operators, freight forwarders, ship brokers and leasing companies, logistics service providers and potential ‘market disruptors’ like Amazon.

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Restraining freight traffic growth – a decarbonisation option too far?

During a panel discussion on the decarbonisation of transport at the recent Transport Research Arena conference in Vienna I said something that provoked significant reaction. Basically I argued that if the forecast growth in European freight traffic materialises, we will not be able to achieve the required reductions in freight-related CO2 emissions just by cutting the carbon intensity of freight movement (i.e. g CO2 per tonne-km). This challenged the claim made by the EU Transport Commissioner, Violeta Bulc, in her introductory speech at TRA that it would not be acceptable to restrain traffic growth. In essence this was a reiteration of the long-held view of the European Commission that ‘curbing mobility is not an option’. So why do I believe that at some point this view may have to be revised?

First, if you accept the EU traffic forecasts and exclude the traffic restraint option, the carbon intensity of European freight transport would have to plunge by over 80% between 2015 and 2050. This would require what the Dutch research institute TNO has called a ‘factor 6’ improvement in ‘carbon productivity’. In a recent presentation I indicated what this would mean in practical terms by showing how all the main freight transport parameters would have to be stretched to deliver an improvement of this magnitude.

One scenario would involve a 30% modal shift from road to rail, a 20% increase in routeing efficiency, 30% higher load factors, 50% greater energy efficiency and 50% less carbon content in the energy used by the freight sector. Any of these targets would be very ambitious, even over a 35 year period. Expecting them all to be achieved, as a Factor-6 improvement would demand, is, to put it mildly, scarcely credible.

Nor do we actually have 35 years to transition to this very low carbon freight transport system. We should not be thinking simply of hitting an annual CO2 target by 2050. It is the accumulation of CO2 emissions from freight transport between now and then which matters. In my new book on Decarbonising Logistics, I construct two emission reduction profiles for EU freight transport both leading to a 60% reduction by 2050 but emitting widely varying amounts of CO2 along the way. In one scenario freight emissions don’t peak until 2030 and then drop steeply. In the other they peak now and descend at a rapid but more feasible rate. In the latter scenario, a third less CO2 is emitted over the 35 year period – bringing freight more into line with the carbon budgeting calculations emerging from climate science.

So aiming to achieve the Factor 6 reduction by 2050 would be much too leisurely. The drop in total emissions needs to happen quickly, so quickly in fact that one cannot rely on reductions in carbon intensity alone to shoulder this decarbonisation responsibility.

The same applies, even more forcefully, at a global level. This was revealed by last year’s Transport Outlook report from the International Transport Forum. According to my calculations, its ‘low carbon’ scenario for 2050 would see the average carbon intensity of freight transport at a global level dropping from 27g CO2 per tonne-km in 2015 to 8g CO2 per tonne-km in 2050. But this huge reduction would, in carbon terms, be almost completely offset by the forecast tripling of total tonne-kms over the intervening period. In fact, if this forecast proved accurate, global freight-related emissions would decline by only around 12% in absolute terms. Although no sectoral carbon reduction target has yet been set for freight transport at a global level, one can comfortably assume that a 12% reduction would be peanuts relative to what will be required.

So one arrives at the conclusion that something must be done about the underlying growth in demand for freight movement. If, as I discuss in my new book, we may be over-estimating future freight traffic growth then the required reductions in carbon intensity would be lower and the case for ‘curbing mobility’ weakened. But this case will, nevertheless, remain strong and should at least be on the political agenda at national, EU and global levels.

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Who cares about journal rankings?

In a newly-published paper I return to a debate I first joined five years ago on the ranking of academic journals. On this issue I basically have three concerns. The first is the use of a journal’s ranking as a proxy measure of the quality of all the papers it publishes. This practice is seriously flawed though increasingly underpins assessment of the research performance of academics and institutions. My second concern is about the extent to which journal rankings are now influencing research strategy and funding, staff recruitment and promotion and the behaviour and well-being of academics. I’m also particularly concerned about the negative impact of this obsession with journal rankings on the study of logistics / supply chain management (SCM). This is because most of the specialist journals in the field occupy relatively low positions in the main ranking schemes – quite unfairly in my opinion. As a result, the subject is at risk of being marginalised in the academic business world and those working in the field forced to reorient their research to adhere to the methodologies and paradigms of the top-tier journals.

Any non-academics reading this blog are probably feeling that this has little to do with them. In many circles the term ‘academic’ is used as a synonym for ‘irrelevant’ and, in that sense, this debate must be seem fairly academic. After all, managers very seldom consult journal articles during their working lives. Many only encounter them when doing a university-based course and required to reference an assignment. Even government planners and policy-makers, whose decision-making is supposed to be ‘evidence-based’, rarely pay much attention to the academic literature. So as this literature tends to be the exclusive preserve of ‘scholars’, why should anyone outside academia bother about this or that journal ranking?

In my view the main raison d’etre for university research on logistics / SCM is to provide relevant advice to what might loosely be called the practitioner community. Logistics is surely one of the most pragmatic of all human activities, vital for economic development, social welfare and security. If it were an obscure subject, say the study of irregular verbs in Medieval German poetry, one could accept that research outputs would be confined to academic circles. But what is the point of academic research on logistics / SCM if it does not inform business practice and policy-making? This is significant because higher-rated journals tend to be more theoretical and less accessible to practitioners by virtue of their subject focus, writing style and / or mathematical complexity. The desperate pursuit of a publication in these journals is therefore widening the gap between theory and practice and reducing the importance of business relevance as a criterion of research performance. This is neither in the interest of those running our logistics systems and supply chains nor the academics devoting their lives to studying them.

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Supply Chain Naivety in Brexitland

In 2008, the UK Department of Transport published a series of case studies ‘to bring out the full complexity, interaction and diversity of transport chains’. They explained, for example, how a sofa got from China to a home in Newcastle, wine from California to a shop in Manchester and coal from Russia to an English power station. The studies received virtually no publicity at the time and so had no impact on public understanding of supply chains and how they work.

The following year, 2116 UK adults, surveyed by tns-bmrb, were asked how much they knew about the ‘role of logistics in the economy’. Only 14% claimed to have ‘some knowledge’. The Freight Transport Association responded by launching a ‘love logistics’ campaign to inform the public of this vital service they simply take for granted.

There is little evidence that the message is getting across. Consumers pick items from the shop shelf and order goods online without giving any thought to where the stuff actually comes from. When logistics works well nobody notices it. People only become aware of it when things goes wrong, possibly because of a strike, bad weather or an IT failure. This partly explains why the words most commonly linked with ‘logistical’ these days are ‘disaster’ and ‘nightmare’. Regrettably these verbal couplings may become more commonly used once Britain leaves the Single Market and Customs Union.

Supply chains are the very essence of the EU. They bind countries into a continental-sized economy offering huge economies of scale and scope. In a border-less EU, free of tariffs and customs checks, they do this by tightly coupling business processes in disparate locations. Within finely-tuned just-in-time systems transport has become an integral part of companies’ production lines.

Consumers get a sense of this logistical capability when, for example, they order online in the morning for same-day delivery. What they don’t realise is that many of the upstream links in European supply chains are also highly ‘time-compressed’. For much UK-EU trade this will no longer be possible if customs barriers are re-imposed at UK ports and airports. Despite glib reassurances from government Ministers, this will be a major shock to the logistical systems that currently integrate us into what is, overwhelmingly, our main international market for trade in goods.

Many people still harbour Victorian notions of bilateral international trade: raw materials in and manufactured goods out. In practice, the world is now cocooned in a dense web of supply networks within which value is added to products and services incrementally in many different locations. Intermediate trade within these ‘value chains’ comprises around 60% of all global trade. So when politicians talk about reshoring and repatriating manufacturing they typically under-estimate the difficulty of disentangling particular activities from this international nexus of value-adding processes.

If the UK electorate had had a greater appreciation of the immensely complicated systems which supply us with everything we consume and maintain the competitiveness of our economy, at least some of the 52% that voted for Brexit might have had second thoughts.

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Trump climate change and transport

I have just spent a week in Washington DC on the eve of Donald Trump’s presidential inauguration. At the two transportation conferences I attended there was much dismay about the prospects for government action on climate change during the Trump presidency. Even before he assumes power, however, climate change scepticism, if not outright denial, is deeply entrenched in much of the US electorate and political process. The fossil-fuel industry, the lobbying organizations its funds and the numerous Republican politicians it sponsors have admirably prepared the ground for a climate-change denying president. A Gallup opinion poll found that climate change was rated 12th out of the thirteen most important issues in the 2016 presidential election. Clearly if it had been a major electoral differentiator, the candidate declaring that global warming is ‘bullshit’ and ‘a total, and very expensive, hoax’ would probably not be entering the White House next week.

I found it disconcerting to listen to senior officials from the transportation departments of several States explain how little they could say or do about climate change. The constraint is partly linguistic. One official explained how in promoting transport initiatives to politicians and the public they had to avoid using the words sustainability, environment and climate change. Another claimed that the only way to get carbon-reducing measures accepted in his state was to emphasise the ‘co-benefits’ such as fuel savings, better health and fewer accidents. One even said that he risked being reprimanded if it was discovered he had attended a conference session on climate change!

The fact that the session was on the adaptation aspects of climate change would probably have made it more acceptable. The increasing frequency, duration and intensity of extreme weather events has forced a reluctant acceptance that climate is changing and transportation systems need to adapt. This is clearly acknowledged in the US National Climate Assessments. These four-yearly assessments, however, say very little about the mitigation measures that need to be put in place to protect future generations against much more extreme weather. The US may have signed up to the COP21 climate change agreement, but many transport policy-makers and planners remain hesitant to promote overtly carbon-reducing strategies. This is rather worrying, given that transportation accounts for a third of the country’s total CO2 emissions.

Thankfully, some states are adopting a much more robust approach to the issue. In California, where a target has been set to cut greenhouse gas emissions by 40% between 1990 and 2030 and where 36% of these emissions come from transport, decarbonisation efforts are more advanced and more explicit. As in other environmental matters, the ‘golden state’ is setting a good example to other states and indeed the Federal government, in its commitment to drive down transport-related GHG emissions.

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© Professor Alan McKinnon 2021

Kuehne Logistics University
Hamburg
Germany

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© Professor Alan McKinnon 2021

 

Kuehne Logistics University
Hamburg
Germany

 

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