Terms of trade will trip you up

Metro are getting BIGGER in Europe

Oct 19, 2022 | , , , ,

Metro has been shipping freight to, from and across Europe since 1981, using road, rail and short-sea services to create country and product-specific transport solutions. Our new Head of European Services, Matt Paxton-Rhodes, wants to make these award-winning solutions available to more shippers, in more verticals.

Metro’s European transport solutions are designed to meet the needs of individual customers, many of whom have entrusted the management and operation of their supply chain to Metro. 

Safely, efficiently and cost-effectively, Metro plan and arrange the time-definite transport of components intra-Europe, and finished products from the manufacturer or producer, to their final point of use on the European continent.

The European team is experienced in orchestrating and overseeing the timely, cost-effective transport of goods to anywhere in Europe, using rail, short-sea and carrier partners’ modern fleet of vehicles. Designed to transport loads of any size and type, including out-of-gauge, refrigerated and automotive.

Metro’s new Head of European Services, Matt Paxton-Rhodes, has held senior executive roles with some of the biggest global carriers and forwarders, gaining an enviable breadth of experience, knowledge and contacts along the way.

It is a sign of Metro’s growth and stature, that a senior industry professional like Matt is excited by his move and the opportunity to transform the European product.

Matt is very clear on the factors that attracted him to Metro:

People - The passion of the senior team and their total commitment to customers and colleagues.

Power - The flat reporting structure and the empowering of management to make decisions gives Metro the agility to react quickly to customers’ needs. Now.

Product - Metro’s European product is established, proven and effective, with a distinct opportunity for replication in new verticals and geographies. 

Platform – We will always provide all options and best fit recommendations – regardless of the requirement for overland trucking. Trade with our closest markets continues to change, almost daily – so do we with our solutions.

Despite only being with the business for less than a year, Matt has set his sights on some short term objectives. 

“The Metro team has extensive knowledge of European transport and customs compliance arrangements, which means they are well experienced in providing the most appropriate solutions for transporting goods in the fastest, safest and most reliable ways, to deadline and including for JIT operations.”

“Having an established and effective core-product means that I can focus on building a dedicated team to increase capacity, by taking our best-practice and matching it closely to the needs of new verticals, on new routes.”

“Turkey, an increasingly popular location for near-shoring, is a good place to start as it is one of our most established routes and the potential for growth is immense.”

‘’Our brokerage team are market leading and cutting edge – the whole end to end piece is naturally part of the offer and it is a very compelling proposition that we design around our customers individual needs and requirements.’’

If you would like to explore our European capability, or learn more about our Turkish services, EMAIL Matt now. It will be 5 minutes well used!

Autonomous vehicles

Environmental developments you may have missed

Oct 5, 2022 | , , ,

While we continue to drive forward our ‘green’ initiatives, by selecting environmentally focused partners and further developing our MVT ECO platform in managing, measuring and offsetting carbon emissions, we also monitor ‘green’ developments that may impact our sector.

The Hydrofoil alternative to air freight

Air freight emissions account for 0.5% of global emissions and are expected to grow to 6-13% by 2050. Boundary Layer Technologies (BLT) is developing a hydrofoil fast vessel powered by emission-free green hydrogen, as a viable alternative to air.

The vessel (Argo), due to be launched in intra-Asia trade lanes in the first quarter of 2025, will carry 20 TEU, with a range of 1,500 nautical miles and cruise at 40 knots, as a replacement for short-range air freight transport.

The team behind Argo’s development claim it can replace air freight with only a small increase in door-to-door transit time and will target high-value, time-sensitive cargo like electronics, automotive parts and pharmaceuticals. It will be equipped with power to support reefer containers and offer freight prices that will be 50% cheaper than air freight, based on average 2019 rates.

Argo is intended to be powered by green liquid hydrogen fuel cells, although BLT has yet to secure a supply contract for green hydrogen and it is unclear whether dedicated pipelines for the transport of green hydrogen to the ports used by Argo will be built in time for its launch.

ARGO image courtesy of Boundary Layer Technologies (https://www.boundarylayer.tech/argo)

Sustainable aviation fuel (SAF)

SAF is similar in its chemistry to traditional fossil jet fuel and is produced from sustainable feedstocks, including cooking oil, non-palm waste oils from animals or plants; solid waste from homes and businesses, and food scraps that would otherwise go to landfill or incineration. Other potential sources include forestry waste, such as waste wood, and energy crops, including fast growing plants and algae.

Using SAF results in a reduction of up to 80% in carbon emissions over the lifecycle of the fuel compared to the traditional jet fuel it replaces, depending on the sustainable feedstock used, production method and the supply chain to the airport. 

We work closely with the Air France/KLM/Martinair SAF programme, in growing the adoption of SAF and reducing the carbon footprint of our air cargo miles. We are considering migration to programme partnership and contributions to further SAF acquisition.

Driverless electric trucks on public roads

Swedish freight technology company Einride has granted a permit in the United States for a pilot project, to test electric, autonomous trucks, which will run for two weeks in the third quarter of 2022 and take place on public roads.

The Einride autonomous electric truck operates without a driver and is monitored by a specially-trained remote driver who can take control if necessary.

Autonomous trucks will mix with normal traffic on public roads located near project partner GE Appliance’s plant near Memphis, Tennessee. 

As part of the pilot, the autonomous trucks will test moving goods, as well as loading/unloading goods with warehouse teams at nearly locations.

Image courtesy of Einride (https://www.einride.tech)

Automated container terminals

Following on from ECT, which opened in 1993 and became the first fully automated terminal in the world, a new container terminal with five deep sea berths is being developed at Rotterdam. It will add 7m teu of annual capacity when it begins operations in 2027, with 2.6km of quay at the north end of the ECT terminal.

Like ECT, the new facility will be fully automated, with vessels unloaded by autonomous cranes and cabin-less ground vehicles.

The cleanest vessel power source

The greenest of power sources, wind propulsion, has received a lot of interest as ship owners aim to reduce fuel consumption and lower CO2 emissions. Depending on the size of the sails, efficiency gained from wind propulsion assists mechanisms generally in the range of 15-20%.

Maersk’s liquid bulk division sold the Maersk Pelican to an Indonesian carrier last year, the vessel was the world’s first product tanker to incorporate wind propulsion technology into its operations.

The vessel was sold with the technology installed on board and Maersk has confirmed that it will continue to work with relevant parties to enable the use of wind propulsion technology, optimise vessel performance and reduce CO2 emissions.

From giant kites that pull cargo ships to inflatable sails to spinning rotors that create lift, the move towards wind-powered commercial vessels will generate a doubling of such ships on the water by 2023, as lines work to help meet the industry goal of cutting greenhouse gas emissions from the global fleet by 50% by 2050, from 2008 levels.

In July, Japanese  carrier K Line boosted its kite orders to five and signed a contract to install as many as 50 on its fleet of about 420 vessels, as part of its move to net-zero greenhouse gas emissions by 2050.

Giant commodity trader Cargill will pilot-test two 120-foot-high rigid wind sails made of steel and composite glass that will be outfitted on the 751-foot-long carrier that it charters and could help cut emissions by as much as 30%, which equates to about 6,400 metric tons of carbon dioxide per year. If the trial is successful, Cargill will retrofit up to 10 more ships.

There are about 12 wind propulsion systems on the market, with seven more coming online in 2023, including 37 meter rigid sails, 100-square-meter inflatable wing sails and 35 meter rotor sails.

The biggest hurdle for many shipowners is the capital investment, with rotors and rigid sails easily costing $1 million to $1.5 million each and ships often needing at least three or more. The return on investment typically is about seven to eight years, but with higher fuel costs, that time is being trimmed dramatically.

Seawing image courtesy of K Line (https://klineurope.com)

Metro has committed to Sustainability Disclosure Requirements and is achieving CO2 neutrality by measuring, reporting and offsetting our CO2 emissions.

The ‘free of charge’ Eco module, that sits in our MVT supply chain platform, monitors the energy emissions, emission costs and CO2 equivalent emissions, of our customer’s consignments, by every mode. Which means that Metro customers can monitor the environmental impact of their supply chains and participate in offset projects that will eradicate their supply chain CO2 footprint.

To request a demo or discuss your requirements, please contact Simon George, who can outline our proven carbon reduction strategies and the availability of offset projects.

Oil platform

Oil supply threat to road freight

May 30, 2022 | ,

While there has rightly been much focus on driver shortages and spiking fuel costs, it is a shortage of engine oil and lubricants that is currently the biggest threat to the road transport of freight.

Road transport is an inherent component in almost every freight movement and the critical collection/delivery method for logistics operations and with EVs almost non-existent in commercial fleets, the cost and availability of fuel, engine oil and lubricants is essential for vehicle availability and operation.

Quite simply trucks are the mainstay of just about every developed economy, because just about every product you consume has been delivered by a truck, in at least one and probably multiple segments of the supply chain.

Soaring petrol and diesel prices have contributed to rising haulage costs which have risen by 16% over the last three years, but it is another type of oil that may finally bring the world’s commercial vehicle fleet to a (literal) grinding halt. 

When the Corona pandemic first spread, global demand for fuel for road traffic and especially paraffin for aviation collapsed, with demand for the latter falling by 82%.

In the refinery process a lot of paraffin is released and these large quantities cannot be stored so refinery capacity was reduced, which means that other refinery products, including the raw materials for producing base oil for lubricants, remain in short supply, which has led to a worldwide shortage of base oils.

In addition many crude oil producers postponed planned maintenance because of the pandemic and with many now shutting down to carry out critical maintenance activities, this has further reduced global supply. 

As the global economy began to recover, oil and fuel demand skyrocketed with shortages occurring everywhere. Almost every industry has been affected, and deficits are growing of the most common engine oils and lubricants, including 15W-40 and 5W-40 heavy-duty engine oils, full synthetic passenger vehicle oil, way oil, hydraulic oils, synthetic gear oils, and EP grease.

By 2021, lubricant manufacturers began to feel the pressure as base oil, and additive supply tightened worldwide. This strain caused seven record price increases from December 2020 to October 2021 for base oils and additives, compared to an average of just two annual price increases over the previous decade. These issues continue to plague the market in 2022.

Adding further turmoil supply chain bottlenecks were exacerbated by fierce winter storms that hit the US gulf coast, which had the effect of several major additive suppliers and their raw material suppliers invoking force majeure due to these extreme weather conditions.

This impacted supply of additives and chemicals for all lubricant categories. Then last summer, a massive fire destroyed Lubrizoil’s Chemtool grease and lubricant manufacturing facility in Illinois. 

Combined with increasing demand as countries (in some instances, temporarily) emerged out of lockdown, prices for both crude and vacuum gas oil (VGO, which is a mix of hydrocarbons produced during the extraction of crude oil) rose significantly, moving the price of lubricants up by a staggering 116% (140% for synthetics).

Supply is not going to increase any time soon. It is reported that suppliers are not just short supplying distributors’ orders but cancelling them altogether, often without notification. For some brands, distributors are finding that some of their suppliers are simply out of the product they need, with supply not being restored for at least six months.

But heavy engine oils and lubricants are not a discretionary purchase, they are essential for the reliable and ongoing use of light and heavy commercial vehicles and orders are being restricted to a limited allocation, with demand outpacing supply in the medium term.

There is one solution and that is not using heavy vehicles, which may well be the case in the US, as the country’s inventory levels of diesel have fallen to a 14-year low, with talk of diesel fuel rationing in some parts of the country.

Road transport cannot be avoided, as part of the international movement of goods, container movements and domestic haulage.

We work with a select number of strategically located long-term haulage partners, to give us access to the widest pool of equipment, where and when it is required

To learn more or to discuss any requirements, please contact Elliot Carlile or Simon Balfe, who leads our transport operations.

Oil platform

Bracing for continued fuel surcharge increases – if it moves it needs an engine

Mar 24, 2022 | , , , ,

Fuel prices were already on the way up before Russia decided to invade its neighbour and the additional volatility and uncertainty created by the conflict in Ukraine are significant enough to drive oil and fuel prices to levels not seen before. Or at least since the 1970’s relatively.

Average low-sulphur marine fuel prices had already risen to $726/mt prior to the Ukraine invasion, well above the 2021 high of $617/mt which has left us bracing for higher bunker/fuel surcharges, which will add to the already elevated rates for sea, road, and air freight movements.

Marine bunker prices and the price of diesel, which feeds directly into road and rail inland movements, has continued to climb, with jet fuel prices up double-digit percentages from mid-February.

The price of crude oil accounts for about half the price of diesel, but demand is a factor too and the intense freight demand and resulting supply chain disruption are likely to keep the price of diesel and petrol elevated even if they do moderate in the weeks ahead. This dynamic is also the case for aircraft and marine vessels.

The price of VLSFO, which powers approximately 70% of the global container ship fleet, reached close to $1,000/mt last week while high-sulphur fuel oil was trading at $623/mt.

Rising fuel prices, which have effectively doubled, represent a real worry for carriers and shippers are likely to feel the impact of these higher fuel costs via per kilo surcharges by airlines, Inland Energy Surcharges (for line haulage) as well as the traditional bunker adjustment factors (BAFs) that typically lag fuel price increases. Ultimately these are passed on to the consumer and that’s part of the explanation for global inflationary pressures currently.

Sea-Intelligence Maritime Analysis has estimated that if bunker fuel prices remain at their current level for the rest of the year, the container shipping industry will incur an additional annual cost of $7 billion, which would result in an average additional fuel cost of $39 per TEU.

As the global situation remains so uncertain, it is likely that we have not seen any peak yet, which could mean more bunker surcharges when lines issue their next rate adjustments on the 1st of April.

When freight costs are volatile, how often you ship and the way you ship becomes very important. Often speed is a determining factor, with many shippers choosing little and often, rather than consolidating bigger loads, that offer greater economies of scale.

Pragmatism now replaces expediency, as the sensible shipper will weigh the transit time benefits against the overall cost of the freight movement.

This affects all parts of the supply chain including first and final mile distribution. Many UK haulage firms are now reviewing their fuel surcharges on a weekly basis to ensure that they do not suffer losses through swings in the cost of daily changes in fuel procurement. We have distributed changes over recent weeks but the reality is that the cost to transport goods overland by any mode has increased sharply since February. We will continue to update and share the latest information and situation with you.

Despite the oil price spiking and increases anticipated, it is worth noting that nothing is certain in terms of fuel surcharge outcomes, which is why we share market intelligence and any changes that may occur, for transparency.

For the latest insights please contact Elliot Carlile or Simon Balfe, who will share market conditions and intelligence and explain how we are offering solutions that ensure that we stay ahead of the unravelling and volatile situation in global logistics. The reality is if fuel gets more expensive so will moving products – we will ensure that this is always shared, explained and passed through at cost – it is an unavoidable ingredient in transport.

Category: Road

Coronavirus | Road | Supply Chain

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