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CSIRO Services Science

Time To Deliver: New science-based approaches

 to optimise reight transport in Australia

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The demands on land supply-chains

are increasing more than ever.

Now’s the time or transport companies to

consider change. Discover why intelligent

optimisation and innovation will transorm

transport operations and maximise eciency. 

Moving more reight, to more customers, aster, is the unavoidable transormation

ahead or transport companies. Goods need to be delivered with less

expense, lower environmental impact and under saer working conditions.

To achieve all this, supply chains will inevitably increase in complexity.Quick decisions by transport companies, to deal with such complexity, include

rapid investment in new equipment to ‘solve’ logistical problems short-term.

However long-term strategies, that reduce costs and improve services, include

sophisticated use o systems optimisation and innovation at every kink in the supply 

chain. Here we outline the benets o systems optimisation or uture transpor t logistics.

Photo: Carl Davies CSIRO

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Changing the way or road and rail transport

Firstly, an increased truck capacity means

 that more goods are needed to ll each

load. In turn, this requires moving reight

in aggregated loads. Tracking who owns

what and where it’s going, managing sub-

loads at change points and organising

driver rosters are just some o the issues

 that aggregated shipments create.

Secondly, recent legislation makes all

parties in the supply chain – not just the

 transport operator - legally responsible

or sae work conditions. Managing

 the risk o driver atigue - by planningschedules, training drivers and checking

records – is essential, yet complicates

 the hauling o aggregate loads.

Thirdly, uture planning o cities will

create outer reight distribution ‘hubs’

 to prevent large vehicles clogging up

In Australia, interstate road reight is

expected to increase by 130% between

2008 and 2030 according to the

Bureau o Inrastructure , Transport and

Regional Economics. The rail reight

 task will experience similar growth.

As a direct consequence, transport

companies will have to meet this demand

and remain protable. Road haulage

companies will invest in bigger trucks,

with more reight hauled per dr iver, to

improve productivity. Delivery times will

shorten to meet customer requirements.

Yet the growing task o moving

more reight saely, and with

reduced environmental impact,

has oreseeable hurdles.

already congested public transport

and commuter dense networks.The unloading and reloading o 

aggregate loads onto smaller vehicles

at such hubs will be complex.

Similarly, the rail network aces capacity 

limits. Only so many trains can operate

simultaneously and the current network 

is used or public and reight transport;

both orecast to increase. Reducing

wait times, handling and mistakes, in

addition to maintaining consistent

reight movement are essential or 

meeting uture demands. To achieve this,

a holistic approach and new thinking

is needed or the land supply chain.

 With fexible, dynamic logistic networks

we can meet the needs o a growing

population and ensure transport

companies remain competitive.

Road and rail to take fight

Today, technology aords us abundant

data on how land reight is moved.

 Journey times are accurately recorded,

vehicle movements are pinpointed by 

GPS, and real-time trac data is available.

Land supply chains are no longer point-to-point deliveries, but networks

 to which complex modelling can be

applied. However, to make a real impact,

we must use both data and models,

 together, to make better decisions.

Unlike the land supply chain, the airline

industry evolved with sophisticated

optimisation systems, due to the obvious

dangers and expense o air travel and its

more recent development. The typical

airline system has several advantages

over land supply networks in order to

run smoothly and remain protable.

So what concepts can land transport

learn rom how airlines operate?

Firstly, airlines have state-o-the-ar t

 timetabling and task scheduling. They 

control all aspects o their aircrat,

rom whereabouts and routing, to

maintenance and reueling. In terms

o human ‘reight’, extensive travel

inormation aids successul ‘deliveries’.

Secondly, airline revenue is prociently 

managed and adjusted, in real time,

depending on ticket sales. Seat prices

are tier-adjusted, with pre-assigned ares

and taris released relative to demand.

Thirdly, airlines orecast and arrange

complicated sta duty patterns.

Unlike road transport, airlines have

always been heavily regulated or 

pilot atigue. Advanced roster systemsensure a suitable crew is available.

Even last minute changes, due to

absenteeism, missed connections and

emergencies, are readily handled.

In order or land transport systems

 to reach the same sophistication

as airlines, and benet rom cost-

savings and better work practices,

 two areas must be addressed.

Better orecasting o workloads. While1.

airlines know in advance who has

booked tickets, many road transport

operators are lucky to know one day 

prior to a delivery being required.

Nevertheless, data on peak periods or 

land reight can be used to model and

better predict outcomes.

Better use o real-time location data.2.

This accessible data can be used, or 

example, to shorten journey times

or commuters or plan ecient truck routes based on trac fow.

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Optimise to maximise

In the transport business, reducing cost

and enhancing customer service are

key. Thereore, planning and monitoring

perormance - with an emphasis on

continual improvement - is cr itical. The

need or sophisticated optimisation is

clear when real actors such as outer city 

distribution hubs, large capacity trucks

and atigue r isk management, exist.

Transport companies will advance,

 through systems optimisation and

innovation, to provide optimal service

and increase prots. In general, thereare three stages in the supply process

 that benet rom optimisation.

The planning stage - beore the delivery 

process begins - is an ideal time to

optimise pricing, orecast peak periods

and decide where to put what sized

 trucks. With little lead-time or day-to-

day operations, planning or upcoming

peak periods optimises the number o 

 trucks and drivers to meet demand.

During the delivery process, there are

real-time aspects to monitor, or instance

unoreseen disruptions and applying

rules to control operations, such as

restricting waiting times or loading or 

what to do i a truck breaks down.

Finally, optimising the stage ater a

delivery is completed will work out i 

 the delivery went to plan, or nd out

what to adjust next time to better 

meet key perormance indicators.

Complexity at

the coal ace: an

Australian case study

The good news is that every supply 

chain can be improved, no matter how

complicated or underdeveloped it is.

The most important point is to identiy 

 the true bottleneck, with regard to

increasing productivity and prots.

One real-lie example o supply chain

optimisation is the operations o the

Hunter Valley Coal Chain (HVCC).

HVCC generates AU$15 billion in annual

export revenue. Blending and loading

coal into sea vessels at three ports, ater 

 transport along 380 kilometres o railrom 27 train loading points, ollowing

extraction rom 35 dierent mines

owned by 13 coal producers, makes

HVCC an enormous logistical eat.

As demand or Hunter Valley coal

increased, so did the impetus or 

optimisation. Intelligent advice suggested

building a orth seaport terminal to

increase the coal supply to international

buyers. Yet building a new port terminal

was a signicant nancial outlay, and it

was vital to rst determine whether the

rest o the supply chain could keep up.

The HVCC logistics team enlisted CSIRO

 to perorm optimisation modelling

o the current supply chain, beore

investing in major capital works. CSIRO

reviewed many aspects o the HVCC

operation, including loads, service levels,

feets, handling acilities and human

resources. Through science-based

approaches to optimisation, CSIRO

ound eective solutions or HVCC to cope with demand and expansion

without unnecessary spending.

How to optimise the

supply chain process

Optimising your supply chain oers

 the most benets when three

actors are present: complexity,

degrees o reedom and change.

I your supply chain is simple, or 

example, isn’t multimodal or doesn’t

move aggregate loads, then you can

normally gure out what to adjust

in order to improve the system -

without optimisation. However, more

complex supply chains, including ‘less

 than a truck load’ services always

benet rom systems optimisation.Furthermore, i your supply chain

has ‘degrees o reedom’, meaning

 that there is some aspect or process

you can change, then applying

optimisation will show you the best

way to achieve maximum eciency.

Finally, because nothing is ever set in

stone, an element o change with time

or with external actors can be modeled.

Technology allows changes to be

monitored, thus continual optimisation

will ensure you provide the best

service as things continue to change.

Photo: John Bartholdi, Georgia Institu te of Technology 

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Summary

To meet uture•

demand, reight

transport systems will

expand capacity and

improve efciency

Real-time data and•

workload orecasting

can be used to

streamline task 

scheduling, manage

revenue and improve

work practices

Optimisation benefts•

the planning, delivery

and post-delivery

stages o the supply

chain to save money

and enhance customer

services

Science-based•

approaches to

optimisation enhance

productivity and

profts in all manner o 

supply chain systems

Beore needless•

overspending occurs,

seek reliable advice

about optimisation 

Need advice?

Beware o reacting too ast and rushing to employ a consultant, go out

 to tender, or invest in a computer package that may do little to optimise

your processes. As a rst step, seek impartial, expert advice.

Oten, the biggest hurdle is correctly dening the problem. Find out what your 

company specically wants to achieve. Get reliable advice on the best way 

 to use systems optimisation to ensure you stay viable or the long haul.

CSIRO

CSIRO, the Commonwealth Scientic and Industr ial Research Organisation, is Australia’s

national science agency and one o the largest and most diverse research agencies

in the world, with more than 50 locations throughout Australia and overseas.

CSIRO oers logistics systems optimisation and innovative modelling toprivate companies and organisations, as well as supporting the Australian

Government to improve industry, society and the environment.

Contributor

Alan Dormer, Theme Leader, Services Science, CSIRO

Mathematics, Inormatics & Statistics

CSIRO’s Alan Dormer leads a team o researchers who

bring science to Australia’s growing services sector.

His team is dedicated to applied research or the services sector.

The current ocus is in transport and logistics, government

services, industrial services, nance and inrastructure, and

 there are plans to include other sectors in the uture. The team

applies specialist skills in quantitative risk, mathematical modelling,

optimisation, inormation and communications and more.

Read more about Alan and his team at:

www.csiro.au/people/Alan.Dormer.html

www.csiro.au/science/ps63k.html

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For urther inormation:

CSIRO Mathematics, Inormatics

and Statistics:

Alan Dormer 

Phone: (03) 9545 8082

Email: alan.dormer@csiro.au

Front cover photo: Carl Davies, CSIRO