Logistics Industry - Container Handling Case Study

Background

Toll SPD, a division of the Toll Group, is an industry leader in multi modal (road, rail and sea) full container load transportation between Australian capital cities and the larger regional centres.

In Brisbane, Toll SPD offer a warehousing and distribution centre service, for its major retail and industrial customers.

Historic Situation

Toll SPD run a transport operation to their warehouse facility.

Operation 1:

Shuttling full container loads to and from the warehouse and the Brisbane rail yards and the Port of Brisbane.  This service utilises:

  • Approx. 25 owned trailers
  • 5 owned prime-movers

There are typically 30 container moves each day.  1 move is a round trip, either empty to rail or port, full to warehouse or full to rail or port, empty to warehouse.

At any time, there would be 20 trailers sitting in the warehouse yard with either an empty or full container on it, waiting to be moved to the loading dock, for the container to be emptied or filled.

The prime-movers would arrive from the rail yard or port, drop off a trailer/container combo and then re-hitch and take away a trailer/container combo.

A yard prime-mover would shuttle waiting trailer/container combos to and from the loading dock and the warehouse yard.

Operation 2:

Long-haul transport with full container loads, to and from the warehouse and the larger regional centres.

There are typically 10 container moves each day.  1 move is either empty in/full out or full in/empty out.

In this instance, the prime-mover will wait (avg. 3 hours) with its trailer/container combo, in the warehouse yard, with the other trailer/container combos, until it is time for them to be moved to the loading dock to be emptied or filled.

The loading docks could handle two trailers at a time.  The warehouse operated 12 hours each day.  Approx. 4 containers were cycled through the loading docks each hour – it took about 30 minutes to empty or fill a container.

Problems

Toll SPD could see that they had two main problems that they wanted to resolve:

  1. They had a lot of money tied up in trailer assets that spent most of their time idle, sitting in a yard as an expensive container stand.
  2. Whenever a long-haul transport arrived, it would spend several hours waiting (avg. 3 hours) to be unloaded, which was a poor utilisation of a prime-mover and driver.

The Toll yard was leased premises, and the yard conditions were not suitable for a container forklift or reach stacker.

Container Handling Solution

Toll SPD implemented a new Mobicon System.  This enabled Toll SPD to:

  • Sell 20 trailers, keeping a fleet of 5 prime-movers and five trailers.
  • Sell the yard prime-mover.
  • Significantly reduce waiting time for long-haul transport from 3 hours to 30 minutes.

For any transport from the rail yards or port, the Mobicon would remove container from trailer, either empty or full, and re-load a new container for transport back to either the rail yard or port, either empty or full.  This eliminated the need for extra trailers as expensive container stands.

For any long-haul transport from the large regional centres, the Mobicon would remove container from trailer, either empty or full, and re-load a new container for transport back to the large regional centre, either empty or full. 

This eliminated the need for the prime-mover to wait to be unloaded or loaded at the loading dock.

The Mobicon would also move containers from the yard off the ground to the loading dock, where it would place them on loading dock stands.

The yard prime-mover was no longer required.

TOLL YARD - Before

Toll Before/After diagram

 

 Business Case

The initial financial case included the following:

  1. Assets to Cash (Once Off Cost/Saving)
  • Purchase of new Mobicon       
  • Sale of 20 trailers        
  • Sale of yard prime-mover       

After buying the Mobicon, and selling the trailers and the yard prime mover, there was a Capital Surplus of AUD$70,000

  1. Direct Cost Savings (Annual Ongoing Reduction to fixed costs)
  • Registration of 20 trailers/per annum ... ... ... ... ... ... ... AUD$ 16,000
  • Insurance of 20 trailers/per annum ... ... ... ... ... ... ... .. AUD$  24,000
  • Trailer Maintenance ... ... ... ... ... ... ... ... ... ... ... ... ... AUD$  30,000

 Total Saving per annum ... ... ... ... ... ... ... ... ... ... ... ... AUD$  70,000

  1. Indirect Cost Savings (Annual Ongoing Reduction to variable costs)
  • Productivity improvement for long haul prime movers ... . $AUD 506,250
  • 2.5 hours per container
  • 10 containers per day
  • 225 days per year
  • $AUD 90 per hour

 Total Productivity Improvement per annum ... ... ... ... . $AUD 506,250

  1. Associated benefits
  • Less freight damage because of less movements.
  • Safer working because of less movements in the yard.
  • Less manual labour, as trailers did not have to be un-coupled anymore.
  • Increase storage area, as loading dock was no longer required.
     

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