A top DHL executive has said freight consolidation centres remain an "extremely important" sector for the business to maintain a specialism in, as he believes they will become more commonplace in the future logistics market.
Vice-president of public sector, Roger Burns, says although there isn’t a vast amount of consolidation activity in the present climate, it still remains an essential area for DHL to explore growth opportunities.
DHL Supply Chain currently operates three freight consolidation schemes in the UK - the Camden Council-led London Boroughs Consolidation Centre, Gatwick Airport and Bristol-Bath (see fact file, below) - and the business is engaged in "ongoing" talks up and down the country as more organisations seek out the benefits that consolidated freight deliveries can bring.
“We believe it is an extremely important area for us as an ethical operator to be represented in and maintain expertise in consolidation," said Burns. "Sooner or later it will become a much more normal way of operating. Today it is a relatively specialist and small-scale operation, not just for DHL, but for anybody. However, this will change.”
He adds that local authorities and other public bodies are increasingly conducting feasibility studies to see if consolidation centres are the answer to ever-growing congestion on their city streets. “Clearly you have to still deliver goods into the city, but how can this be done in the most environmentally friendly way? Consolidation is one of the mechanisms that city planners will look at,” said Burns.
For a consolidation scheme to succeed as a sustainable operation, it is essential for the initiative to build enough scale to be economically viable, explained Burns, which can be achieved in two ways.
First, through positive encouragement with some seed funding from the local authority, but with a remit of building sufficient scale to become self-funding as soon as possible.
The other way is to build scale through a regulatory environment. “Which is perfectly feasible and we've been successful at [achieving scale this way] in operating environments like airports or shopping centres. At the airport, for example, the regulatory environment is built around security. They have a need for consolidation driven by security.”
He added: “It is clearly more difficult to regulate a major city, as the number of users is vast. But you are seeing it to a certain extent in the Bristol-Bath consolidation centre. Bath City Council has brought in an increased level of restrictions for road use in the central areas. With one hand, the council is making it more onerous to use these roads, and on the other, the solution to this is making use of the consolidation centre.”
Burns said DHL is now in discussions with organisations both in London and other major cities about the possibility of freight consolidation. “It's an ongoing dialogue.”
Bristol-Bath consolidation centre began operation in May 2004 with European funding and now serves 128 businesses with two electric vehicles in operation to carry out last-mile deliveries. To date the scheme has achieved:
- A 79.5% reduction in delivery trips for retailers
- 158 tonnes of CO2 and 5,136kg of Nox saved
- More than 16,224 vehicle trips removed