Synchromodality—the future of the integrated supply chain

Fleet connectivity has advanced more rapidly in Europe than anywhere else in the world, in part because the high price of fuel provoked a need for cost-saving solutions, in part because of the increasingly overburdened road infrastructure and, more recently, due to a sharpened awareness of the effects of road traffic on the environment.

As a result, private and public players in the ecosystem are constantly seeking to leverage the technology to make supply chains more efficient, less costly and, now, “greener”. The latest strategy in connected fleets, which seeks to integrate all modes of freight transport available in Europe—barge, truck and train—has been dubbed synchromodality and is still very much a work in progress.

“Synchromodality is a question of logistics optimization,” says Matthias Hormuth, director, Concepts & Solutions Logistics Software, at PTV Group. “It consists of making use of whole networks of intermodal services—the best use of the entire network. The main elements are distance, time, cost and emissions.”

The solution will become even more important in the future, he says. “Freight volumes will increase. For that reason, alternative transport modes will become more important.”

According to Albert Veenstra, scientific director of the Dutch Institute for Advanced Logistics (Dinalog), a government-funded body, “Synchromodality is multimodality as it was supposed to function. It is the integration of the various modes of transport. Its embodiment is the question of how do I allocate freight to the various modes of transport and choose the right option at any point of time.”

It is also, he notes, an issue of national economic importance in the Netherlands, where the port of Rotterdam is competing with other European gateway ports, such as Antwerp and Hamburg. As a result, Veenstra and Dinalog are at the forefront of research into the development of synchromodal transport, looking for the means to use the technology to connect every pan-European supply chain coming into and going out of the Netherlands.

For Kornee Sterrenburg, CTO at IXOLUTION, “All the different transport modalities need to be connected in time. This is the synchro of synchromodality.” As an example, he posits a situation in which a shipper misses the closing date for one transport operator, perhaps because it was discovered too late that a driver is not allowed to transport dangerous goods or his allotted driving time has expired.

“You can then make another booking with another operator,” he says. “That needs to be confirmed and then communicated to all parties along the supply chain automatically and in a way and format that fits every party in the plan functionality, like email, EDI, visual, in the correct language and so on. It simplifies a lot of complexity.”

Sterrenburg’s IXOLUTION provides an intermodal transport- and terminal- management system that supports transport logistics organizations that need to plan pan-European freight transport involving more than one transport mode, as well as inland terminals as intermediate hubs. Hormuth’s PTV and IXOLUTION are long-time partners, with PTV components embedded in the latter’s transport management system solution

“From a single shipment, we can help organizations plan the entire route, from A to B, involving all aspects of the chain, in a truly synchromodal way,” Sterrenburg explains. “The first step in the plan is ranking all the options involving all known road, rail, barge and terminal schedules and options. The second step is to communicate with, say, a rail operator to see if there is space available for the load.”

Hormuth describes the two-step planning approach similarly. “The first step is to see what transport is available, and then to see what the terms are,” he says. “In other words, who is operating services, when and how much? Then you decide which you want to make use of.”

Sometimes this decision is defined by existing contracts, and you decide to put, say, 20 containers on a train and five on a barge. “The decision is based on the principle of interoperable optimization,” Hormuth says. “But you try to assign as much as possible to the same transport mode.”

Sterrenburg notes that “the right decision for a shipment might be based on the wishes of the customer—for example, a desired lead time—or it might depend on the product, such as fresh produce.”

In making the decision for, say, a shipment of 100 containers from Rotterdam to Poland, four overarching factors are also considered, Hormuth says. “Time optimization, that is, can we save time for the shipment? Cost optimization, which includes such aspects as rail capacity and the amount of containers on the shipment. If you have a train capacity of only 20, then the other 80 containers must be trucked because of the time limit.”

In addition, “not only do you want to save time but you must be on time,” he says. “If you have enough time, you can even ship with a vessel going along the northern European coast. This is the cheapest mode.”

And, finally, as Europe gets more and more environment-conscious, you consider the emissions produced by the transport. “Although cost is a higher priority, this is a must-have because public authorities and customers are demanding it,” Hormuth says. “If you identify routes with equal costs, then the priority is the one with lower emissions.”

This makes for many variables to consider for a pan-European shipment, Sterrenburg says, adding: “The calculation from door to door is a complex process.” But Hormuth says that, for that shipment of 100 containers, it takes “a few seconds to a few minutes to assign them.”

Of course, there are also variables during the transport itself to consider. For example, the IXOLUTION system includes alerts to all the parties involved along the supply chain if there is an unexpected event that has changed the plan, such as a traffic jam.

“In many cases, we have a real-time connection to the truck,” Sterrenburg says. “Every five minutes we know where it is by a real-time ping from his location. Using PTV technology we can calculate its ETA.”

PTV’s Hormuth says that his company’s new Drive&Arrive solution constantly updates a truck’s ETA and broadcasts it to the next destination. This solution uses such data as predictive traffic on roads along the transport route and how much time the driver has remaining of his legally allotted driving time.

“This data is used to answer the question, What does this mean for the truck?” he explains. “For example, if the traffic on a road slows from 120 to 80 kph, what does this mean for the truck, which drives at 80 kph anyway but now cannot overtake and will have to perhaps slow to 60. Traffic has a different impact on trucks than on passenger vehicles.”

In addition to the time schedules of all the available modes, says Sterrenburg, the IXOLUTION system even includes data on river depth changes, ship water displacement under load and bridge clearances, all of which influence how much freight a barge can safely carry.

These technological innovations have led to the creation of a new kind of logistics service provider, such as IDS, a 4PL that uses both a state-of-the-art transport management system platform and transport experts to provide a supply chain overview to carriers, logistics service providers and forwarders.

“We are the spider in the center of the web [of supply chains],” explains IDS commercial manager Rinus de Kok. He notes that one of the advantages of his company is that it owns no assets.

“We are a non-asset-based 4PL,” he explains. “We are not connected to any transport carrier. We manage the transports from an entirely neutral perspective.” This stands in contrast to companies that own transport modes or that are part of a carrier’s network. “They will have an interest that may not be in the shipper’s interest,” de Kok says. “They want to improve the fill rates of their trucks, for example, and will make a choice where they put a certain vehicle.”

As an example of his firm’s services, he cites its work with several divisions of DSM, a food ingredient and advanced plastics producer. “They have good contracts with carriers and often ship to Europe in less than full loads. On Monday, say, they will ship to one factory in Germany. On Wednesday they’ll ship to the same factory and then on Friday twice to the same customer. This is happening because there is no overview. The solution is obviously to ship once in one shipment to the same customer in one day.”

IDS then calculates the cheapest solution for the transport flow, which may involve multimodal routing, if the customer has multimodal contracts. “And when we see the potential to do more multimodal, we talk to them,” de Kok says. At the end of the month, an analysis is done to determine how shipments can be synchronized further.

IDS also provides cross-chain control center (4C) services, bundling the shipment flows of different customers to reduce cost, traffic and emissions, he explains. This was the case when IDS combined shipments from divisions of DSM and Mitsubishi Chemical.

“When Mitsubishi delivered on Wednesday and DSM on Monday, we suggested combining their shipments for a Tuesday transport and then we simulated it for them,” de Kok explains, and adds, with a laugh: “Here we call ourselves a ‘5C company’: a Chemical Cross Chain Control Center.”

When customers are working in the same commercial area and using the same carriers, “there is a potential to combine these loads and save both parties money,” de Kok says. “You just need a third party to combine them. 4C is synchronizing shipments to the greatest extent possible. We combine, consolidate and synchronize; we even synchronize pick-up dates and delivery times.”

However, it’s no easy task convincing companies to ship their freight alongside that of other firms. “We’ve concluded that it’s very hard for shippers that are competitors to get to the table and cooperate,” de Kok says. “We see a trend, however, that the latest generation of supply chain managers and directors is more open to bundling flows, even with competitors. They understand that competition is not happening in the truck, but out there in the market. This way more and more 4C will come.”

Ultimately, all barges, trains and trucks will need to be connected for synchromodal transport to function optimally, says Dinalog’s Veenstra. “All available barges must be able to communicate with the network. They have to be able to say they are available and what their capacity is.” Projects are currently underway to achieve this goal. In addition, trains must make available tracking data. “They can do it now, but they don’t share it,” he says.

There are also projects underway to enable trucks and inland terminals to exchange data. As Veenstra puts it, “We have a lot of independent trucking companies with little connectivity. We have to give them an app on a smartphone so they can signal when they are coming to pick up the container, when they’re arriving with it and where they are.”

In addition, the terminal can then signal where the container the truck is picking up is located. “This will save time for the truck, and ultimately the transport,” he says. “We need to look for ways to keep freight transport competitive by interacting all the modes. There is development ongoing to fulfill the requirement of having all the necessary neutral information.”

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