E-trade increasing the need for transport
With 2,200 vehicles, PostNord (Nordic Post) is one of Sweden’s largest transport companies when it comes to the number of vehicles in its fleet. When the company recently updated its fleet with 175 heavy-duty trucks, it chose only Volvo trucks.
“Access to service and driver training were the two factors that played the main role in our choice of Volvo Trucks as the sole supplier,” says fleet manager Hans Ankergård Karolin.
PostNord is one of the largest logistics companies in the Nordic countries, with more than 40,000 employees, and it is the result of a merger between Swedish Posten AB and Post Danmark A/S, which took place in 2009. In addition to being responsible for handling mail in Sweden and Denmark, the company also runs operations involving logistics and information logistics, first and foremost in the Nordic countries but also to some extent in Europe. The merger was a result of increasingly fierce competition, with a growing need for cross-border transport.
“We operate in an industry that is characterised by a high rate of change, with fierce competition and price pressure, and this means that it is constantly essential to work on cost adaptation. With this as the starting point, it is becoming increasingly important to be large in order to take advantage of economies of scale,” explains Johan Åhlander, head of Posten Logistik Produktion, which is responsible for logistics in Sweden.
Even if traditional mail handling is still a large part of the company’s operations, with 29 million letters every day, the logistics business area has experienced the largest growth during the past few years. Every day, PostNord transports half a million parcels containing goods between companies, warehouses and shops in Sweden, Norway, Denmark and Finland.
“The sharp expansion of e-trade is having a major impact on our logistics operations, as more and more e-trade companies are asking for total solutions that comprise everything from goods and stock management to parcel delivery,” adds Johan.
Hans Ankergård Karolin is fleet manager at the Logistics Sweden unit and he is responsible for a total of 2,200 vehicles that operate on roads all over the country. Just over half of them are heavy-duty trucks for long-distance transport between regions and countries, while the remainder are small distribution vehicles which handle deliveries in towns and cities. During the past few years, Hans and his colleagues have been working to standardise both the vehicle fleet and its procurement.
“While one vehicle can spend a large amount of time operating in one part of the country, others can operate on a smaller scale in another region. By working actively to change the areas in which the trucks operate, we can get as much as possible from every truck during its service life. However, to do this smoothly, we need trucks that are as alike as possible and this is why, in the space of a few years, we have changed from 34 models to three,” Hans explains.
For the same reason, the procurement of 175 heavy-duty trucks which took place recently was also standardised. This was, however, the first time the company did not divide the order between several truck manufacturers and instead contacted a single supplier – in this case, Volvo Trucks.
“No matter whether we are talking about Scania, Mercedes, Volvo or any other large manufacturer, they all produce good trucks. So we need to look at the other ‘soft’ offers, such as aftersales and service, driver training, price and so on. In this case, Volvo came up to our expectations better than anyone else,” says Hans.
Fuel consumption is another important factor.
“More than 90 per cent of all the fuel we purchase is used in the heavy-duty trucks. If we can cut consumption by three per cent, we can save SEK 25 million a year. That’s one of the reasons why all our Volvo trucks have been equipped with the I-Shift as standard for the past four years,” adds Hans.
“At the same time, technology is not the answer to everything. It is also up to the driver and the way he or she drives. That’s why we are working continuously to train our drivers in driving techniques and we do this to some degree in collaboration with Volvo Trucks,” he continues.
The rigorous environmental standards that currently apply are imposing demands on logistics companies and their vehicles.
“First of all, there is legislation with which we have to comply, but, over the years, developing our operations so that they are less dependent on fossil energy sources has become an increasingly important question in terms of business strategy,” says Johan Åhlander.
So, when the 175 new Volvo trucks are delivered, they will all be equipped with Euro 5 EEV engines, the highest environmental classification that currently exists on the market.
“We are also taking part in a field test with Volvo Trucks in which two trucks are running on DME and, over a five-year period, we are going to lease two electric-hybrid vehicles with a reduction of up to 20 per cent in fuel consumption and carbon dioxide emissions,” says Hans, adding that this, too, is a way of living up to customer expectations.
“Many of our customers want their goods to be transported in an environmentally sustainable manner. If we fail to comply, there’s a risk that we will lose them to a competitor.”
Principal market: Nordic countries
Turnover: SEK 42 billion
Parcel pick-up points in the Nordic countries: 4,400
Carbon emission reduction target by 2020: 40%
Letters every day: 29 million
Parcels every day: 500,000
Pallets every day: 25,000