VEHICLES/ TECH / TranSporTaTIon/LogISTICS
PU BLI CATI O N LI CENSED BY D U BAI PRO D U CTI O N CIT Y
g N i L e Fe
C I r T C E EL t a g n i k o o l l ecia p s s e l c i h e ic V r t c e l e s ’ e gy m o l o t&F n h c e t d an s c i m o n o c e their
T C E f f E n am a zo ped it tO becOme ics heL t is g O L w st retaiLer e hO g ig b ’s d the wOrL
contents COVER STORY
26 / ThE bRighT SpaRkS
Why Volvo is confident that light EVs are going to be a success.
also this issue … NETWORk
05 / NEWS fROm ThE mONTh
Trukkin says its new funding in Saudi Arabia shows there is a future for techno-logistics. iNTERViEW
10 / TRadE CORRidOR Umberto de Pretto of the IRU talks to T&FME about why Saudi could become a regional hub. iNTERViEW
14 / iN ThE fLOW Cardiff General Transport’s Ziyad Mohammed on staying successful in the O&G industry. iNTERViEW
16 / CONTiNENTaL ROLLS ON Continental meets T&FME in Rotterdam to talk about its upcoming entry into radial port tyres. aNaLYSiS
22 / amazON’S EffECT A look at how Amazon is re-shaping the US and global logistics sector. LaUNCh
30 / a SafER fh Volvo Trucks’ Jan-Erik Thoren on the company’s Safety Edition FH launch in the UAE. aNaLYSiS
34 / CaLCULaTiNg EV TCO The latest research on how fleets could make electric vehicles investment pay for itself.
JULY 2018 TRUCK&FLEET ME 01
GROUP MANAGING DIRECtOR RAZ ISLAM firstname.lastname@example.org +971 4 375 5483 EDItORIAL DIRECtOR VIJAYA CHERIAN email@example.com +971 4 375 5472 EDItORIAL EDItOR StEpHEN wHItE firstname.lastname@example.org +44 7541 244 377
the amazon butterfly effect I have had the opportunity to cover so many industries before landing in the world of commercial vehicles industry that very occasionally I hear or read something that time warps me back. This month, we benefit from the insight of Cyndi Brandt, a senior director at Omnitracs who talks about the Amazon Effect, a seismic shift in the US warehousing and logistics channel caused by the world’s biggest retailer’s disruption (yes, it is that word again). Reading her thoughts of how Amazon is tearing through her industry with its new models of how to run a supply chain in the retail sector has reminded me of how, in a former life, I saw the devastation it caused. I once covered the retail sector and was very close to the dealer channel in Europe, the US and elsewhere. At the time, retail was just coming off a boom period that had been spurred on by their migration from the centre of cities and towns into so-called big boxes located in the suburbs and outskirts. They had decimated many traditional retail venues as well as third party suppliers because they were able to leverage enormous economies of scale and offer convenience to consumers. Ironically, however, the advent of online sales meant that they were prime targets for even larger multi-channel retailers like Walmart or Carrefour, and then came Amazon like a huge wrecking ball. One of the biggest retailers in this second tier was a company called Staples which specialised in office products. Despite fending off and eating away at its struggling rivals, its appetite was to prove its down fall as it bought one bad business after another. Ultimately, what Staples nor the failing companies in its sector could do was compete with Amazon’s huge choice, data and logistics nous. Amazon today is so vast, it’s global supply network so large that even if you are in one of the few regions where it hasn’t risen to pre-eminence its effects can still be felt. This is a region where virtually everything has to be imported and will doubtless be connected to the Amazon machine somewhere. Where I think Brandt’s insight is invaluable is how she explains how to organise a modern logistics operation to cope with the expectations that Amazon has created. People are learning to order less and more frequently she notes on more than one occasion, and this is due to Amazon. She has some thoughts on how to deliver a similar experience and even how a truck should be configured. If disruption is coming to your sector, now is the time to take her advice.
stEPHEN WHItE EdiToR, TRUCK&FLEET ME STEPHEN.WHiTE@CPiTRAdEMEdiA.CoM 02 TRUCK&FLEET ME JULY 2018
sUb EDItOR AELRED DOYLE email@example.com ADVERtIsING sENIOR sALEs MANAGER BIpIN SONEJI firstname.lastname@example.org +971 4 433 2856 DEsIGN ARt DIRECtOR SIMON COBON email@example.com DEsIGNER pERCIVAL MANALAYSAY firstname.lastname@example.org PHOtOGRAPHY MAKSYM pORIECHKIN email@example.com MARKEtING MARKEtING MANAGER SHEENA SApSfORD firstname.lastname@example.org +971 4 375 5498
CIRCULAtION & PRODUCtION DIstRIbUtION MANAGER SUNIL KUMAR email@example.com +971 4 375 5476 PRODUCtION MANAGER VIpIN V. VIJAY firstname.lastname@example.org +971 4 375 5713 WEb DEVELOPMENt MOHAMMAD AwAIS SADIQ SIDDIQUI fINANCE ACCOUNts NAHEED HOOD email@example.com +971 4 375 5474 CREDIt CONtROL ExECUtIVE CAMERON CARDOZO firstname.lastname@example.org +971 4 375 5499 fOUNDER DOMINIC DE SOUSA (1959-2015) PRINtED bY pRINtwELL pRINtINg pRESS LLC, DUBAI
Licensed by tECOM to registered company, CpI trade publishing fZ LLC whose registered office is 207 – 209, Building 3, Dubai Studio City, Dubai, UAE. www.cpitrademedia.com the publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. the opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication, which is provided for general use and may not be appropriate for the reader’s particular circumstances. the ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing.
TrUKKIN GAINS SAUDI fUNDING / UBEr rEGISTErING SAUDI wOmEN / VOLVO XC40 ALE rECOrD / PrEmIEr SCOrES ISO fIrST / TrISTAr OPENS NEw HUBS
network Batic funding techno-logistics company Trukkin PrE-SErIES fUNDING frOm KSA fIrm fOr UBEr-LIKE B2B COmPANY TECHNO LOGISITICS B2B techno-logistics platform Trukkin has secured funding led by Saudi Arabia’s Batic Investment and Logistics Co for a pre-series round of investment. Trukkin was launched in 2017, and in a short period of time, has shipped over 5,000 heavy cargo truck movement across GCC. Trukkin is an online-based aggregator of full-scale commercial and land
transport services and the company says it has received positive backing, support and investments” from key captains of the industry”, and its team, led by CEO Janardan Dalmia, is working closely with all backers and mentors to make “Trukkin the de facto enabler” of the industry. Batic is the only large publicly listed logistics and private security company in KSA and has implemented a consolidation
strategy focused on building a unique Saudi logistics national champion. “Support from marquee institutions like Batic is a testament to the fact that we are on the right track. The investment will allow us to further scale our operations and continue growth,” said Dalmia. The region holds huge potential in techno-logistics, but is still tied to traditional operating processes.
“The market is fragmented, and is hampered by several inefficiencies. Trukkin has thus been founded to improve the entire operational framework of commercial logistics used by shippers, fleet owners and truck drivers and all stakeholders, who stand to benefit from increased efficiencies. Trukkin’s goal is to up the level of service and create industry benchmarks,” said Dalmia.
DP wOrLD HANDLED 70.1mN TEUs GLOBALLY IN 2017, wITH VOLUmES GrOwING BY 10.1% – 4% ABOVE THE GLOBAL CONTAINEr AVErAGE
JULY 2018 TRUCK&FLEET ME 05
VOLVO: “OVErwHELmING DEmAND fOr XC40” VEHICLES Volvo Cars says it has received almost 80,000 orders for its new XC40 small SUV and will expand production in Europe and China to meet demand. Production will be expanded at its Ghent manufacturing plant and Volvo Cars will add XC40 production capacity at its Luqiao plant in China in the first half of next year, underlining the popularity of this year’s European Car of the Year. In addition, the company has also announced today that it will capitalise on the popularity of its new
smaller models with the introduction of new models on its Compact Modular Architecture (CMA), replacing the current V40. “The XC40’s success has surpassed even our highest expectations,” said Håkan Samuelsson, president and CEO of Volvo Cars. “The small SUV segment is the fastestgrowing segment in the industry now, and with these additional CMA-based models we expect to benefit further from that growth.” The coming new models based on CMA will include fully electric vehicles and will be sold globally in all major regions.
ALE COmPLETES rECOrD TrANSPOrT HEAVY LIfT Global heavy lift and transport specialist ALE has claimed a new world record for moving a 5,134t evaporator in Saudi Arabia. The company said it was contracted to deliver the evaporator, as well as lime filters, steam transformers and a brine manifold, to the Shoaiba Desalination Plant Project near Jeddah. It undertook the transportation project and, with the evaporator,
06 TRUCK&FLEET ME JULY 2018
broke the world record for the heaviest object to be transported. ALE said it first received the items at the plant’s jetty in April and loaded the evaporator using 186 Generation 3 SPMT axle lines in a 3×2 file 62 configuration. After a 1km jounrey to the desalination plant project site, ALE had to find a route within the plant, which was full of challenges. To keep removal of obstacles to a minimum, the cargo was modified to pass over fences.
Saudi women can now join uber TrANSPOrT
Uber is rolling out a new registration portal for Saudi women. The portal, accessed through a separate ‘Masaruky’ landing page on its website, will serve as a one-stop shop for Saudi women interested in driving on Uber once the driving ban is lifted in the Kingdom, and learning more about the company’s initiatives for women in the Kingdom. Uber’s ‘Masaruky’ (“your path” in arabic) initiative aims to increase women’s participation in the workforce through access to affordable transportation, in addition to increasing women’s access to flexible economic opportunities through Uber’s technology. The new landing page will cater to expected interest from women looking to benefit from extra earnings opportunities through Uber once they have received their licenses. Earlier this year an Uber survey, carried out in collaboration with international research house Ipsos, found that 78% of Saudi women surveyed were likely to get a driving license post ban removal, with almost a third (31%) of those surveyed indicating that they were interested in driving as an earnings opportunity. Commenting on the announcement, Ohoud Al Arifi, Uber Marketing Manager in Saudi said: “We’re keen to continue to create change that’s meaningful and improves the experiences of Saudi women with Uber. So whilst we have historically provided women in the Kingdom with mobility options that previously didn’t exist, our new Masaruky landing page for women is an exciting extension of that journey. Many women have already recognised that Uber is the right choice for anyone who wants to make an extra earning from the flexible economic opportunities the technology provides on their own schedules, and we hope the new registration portal will help address any queries they may have as they gear up to start driving on the Uber app.” In addition to the new landing page, Uber has also announced that it is in the process of rolling out its first women’s Drivers Support Center in Riyadh. The new center will see incoming female partner-drivers benefit from a fixed destination for all questions, comments and inquiries.
CA .0 PE MPA 7. R I – IOD GN 30 .0 9. 18 01
TANGIBLE QUALITY. MAN GENUINE PARTS FOR STRENGTH AND DURABILITY. MAN Trucks and Buses need MAN Genuine Parts – nothing else will do. The quality of MAN Genuine Parts always pays off – after all, reliability and safety are the foundation of efﬁciency in vehicle use and ensure a sustainable reduction in the total cost of ownership. Beneﬁt from a substantial price saving for MAN Genuine Parts. Maximum beneﬁts and minimized costs make it worthwhile to shop now. Seize the opportunity. www.parts-me.man
PrEmIEr mOTOrS fIrST AUTO COmPANY IN THE UAE TO ACHIEVE fIVE ISO CErTIfICATIONS Management standards. Premier Motors represents major European and American automobile manufacturers such as Land Rover, Jaguar, Ferrari, Maserati, Lincoln, Ford, and Ford Trucks across Abu Dhabi. During a special ceremony at HIGH STANDArDS Premier Motors, the ISO certificates The audit concluded that Premier Motors has systems in place to improve its business operations, including the business continuity process to ensure the were presented to Helal Hanei business can recover to an operational state within a short period of time. Omar, Vice President of Premier Motors and Paul Moore, Senior Vice President, Administration and Finance of Al Tayer rETAIL Motors, by Sudheer Kesapragada, General Manager of Premier Motors is the first automotive company in Business Assurance for UAE and Qatar at Intertek. the UAE to achieve five International Organization “These certifications are important to us for Standardisation (ISO) certifications. because they reaffirm our commitment to adopting The Abu Dhabi dealership was awarded the ISO management systems certifications by leading Total Quality high global standards in governance and assurance management,” said Omar. “Equally important, they put Assurance provider Intertek and cover Environmental in place a framework for continuous improvement and Management, Occupational Health and Safety, Energy excellence in delivery of service to our customers.” Management, Business Continuity and Security
TrISTAr OPENS NEw HUBS IN UAE AND OmAN LOGISTICS Tristar Group has opened two new facilities in the UAE and Oman as it aims to enhance its integrated logistics services to the downstream petroleum industry in the GCC. The new truck staging and workshop facility at Industrial City in Abu Dhabi 2 (ICAD 2) has 50,000sqm to create “tailor-made logistics service options” to customers for transport, warehousing,
storage and distribution services. It is strategically located near Khalifa Port, and the main highway connecting UAE with Saudi Arabia, it explained in a statement. “Our new facility reinforces our confidence in investing in the UAE economy which is expected to further strengthen with the government’s recent regulations extending visa tenure, and
providing greater support to investors,” said Tristar Group CEO, Eugene Mayne. The Oman facility is located in the Rusayl Industrial Estate close to Muscat International Airport. Tristar’s facility, which is in Phase 2 of Rusayl Industrial Estate, has a total plot of 15, 000sqm with a two-storey office building and a five-day operational workshop, with two inspection pits and a washdown bay.”
anGe brinGS the new maxuS t60 to the uae LAUNCH
Al Naboodah Group Enterprises (ANGE) has unveiled the new Maxus T60, the latest product in its fast expanding portfolio of Maxus Light Commercial Vehicles. Suitable for both commercial and personal use, the T60 Pickup is available in 2WD and 4WD and comes with either petrol or diesel engines. The Maxus T60 has gone through a long and rigorous testing process in the UAE market before its official launch. As a result of its comprehensive active and passive safety features, it has been given a 5-star ANCAP rating, which is the maximum possible rating available. ANGE is the exclusive distributor of the Maxus range in the UAE with the launch taking place at the ANGE Maxus Showroom in Deira. Ajit Kumar, COO of Commercial at ANGE said, “We are constantly seeking to satisfy the demands of the burgeoning UAE market. The new Maxus T60 is a topof-the-range commercial pick up that will exceed expectations in the region with its advanced safety, technology and style features. The Maxus T60 is powered by 2.4l petrol and 2.8l diesel engine delivering 136 and 150 horsepower respectively and peak torque of 360 newton metres, giving it enough power to deliver on heavy duty tasks. Future T60 models will include auto transmission, lane departure warning and fatigue warning functionality, keeping in mind the ever growing safety standards of the local market.”
INSIDE THIS ISSUE: OPENING A GCC TrADING COrrIDOr, CArDIff ON SErVING THE O&G SECTOr, CONTI ENTErS rADIALS, AND mOrE
08 TRUCK&FLEET ME JULY 2018
The Ultimate Business Solution. Driving your business with the Full Line-Up of Hyundai TRUCK & BUS
Hyundai Motor Company strives to become indispensable; to understand customers and their business needs. We aim to go beyond being just a provider of vehicles. We enhance customersâ€™ lives and become their lifetime partner by creating high-quality, premium-design products and services. We are a true partner in all aspects of customersâ€™ business, in every way they go. Country Kingdom of Saudi Arabia Kingdom of Saudi Arabia Qatar Kuwait Bahrain Oman UAE
Company Almajdouie Motors Mohammed Yousuf Naghi Motors National Car Company Northern Gulf Trading Co. First Motors Oman Trading Est. Juma Al Majid Est.
Partner in Every Way. Hyundai TRUCK & BUS
City Dammam Jeddah Doha Shuwaikh Manama Muscat Dubai
Country Jordan Lebanon Egypt Iraq Iraq Iran (Except for H350) Iran (H350 only)
Company Unity Trading Est. Century Motors Egyptian International Motors Al-Kasid Commercial Agencies Ghreiwati and Sons Company Iran Khodro Diesel Soroush Diesel Mabna
City Amman Beirut Cairo Baghdad Baghdad Tehran Tehran
Signed and to be delivered
Umberto de Pretto, Secretary General, IRU, explains to T&FME why KSAâ€™s signing up to TIR is a good thing for regional trade
10 TRUCK&FLEET ME JULY 2018
he sight of trucks sitting at the Saudi border of the UAE will be familiar to many that have crossed between the two countries but that process could be about to get a lot faster, for some fleets at least, with the KSA government finally signing up to the TIR Convention. It could also lead to greater trade between the GCC and beyond. The Convention on International Transport of Goods Under Cover of TIR Carnets (TIR Convention for short), was originally conceived as a means of speeding up trade between countries almost 60 years ago, Umberto de Pretto, Secretary General of the global transport organisation IRU, explains to T&FME. “The TIR Convention, first adopted in 1959 and upgraded in 1975, is a highly successful UN transport convention, enabling the global development of trade and commercial links,” he says. “In short, it is the only global customs transit system, allowing goods to move through international borders without additional checks.” Trucks bearing the white on blue TIR square on their grilles are common in many parts of the world today with the system helping to streamline procedures at borders, reducing the administrative burden for customs authorities and for transport and logistics companies. It cuts border waiting times significantly; saving time and money. TIR-authorised operators can move goods quickly across multiple customs territories, under customs control, using a single guarantee. Harmonised systems and data exchange tools mean that operators only need to submit their declaration data once for the entire transit movement. Each TIR transport from start to end of the journey is monitored on-line, so goods can be traced and secured while in transit. “TIR guarantees the payment of customs duties and taxes, and makes border crossings faster, more secure and more efficient, reducing transport costs, and boosting trade and development,” adds de Pretto. “TIR guarantees cover VAT as well as customs duties. Up to 57% of transport time is spent at border crossings and 38% of transport costs go towards unofficial levies. TIR addresses the issue by enabling goods to transit from a country of origin to a country of destination in sealed load compartments that are controlled by customs via a multilateral, mutually recognised system. “This system secures customs duties and taxes and provides a robust guarantee mechanism, reducing trade transaction costs and minimising time spent waiting at borders,
A booST To TRANSPoRTERS TIR guarantees the payment of custo ms duties and taxes, and makes border crossings faste r, more secure and more efficient, reducing transport costs, and boosting trade and development, says Umb erto de Pretto.
We are extremely pleased that Saudi arabia has pledged to implement the system swiftly and we look forward to seeing the first tir operations in the very near future”
so facilitating higher growth of intra-regional and inter-regional trade.” Saudi agreement to use the convention has been a long time coming, especially as neighbour UAE signed up to the convention a decade ago. De Pretto says that momentum for Saudi’s membership to TIR has been steadily growing, especially as trade has becoming more of an important focus for Saudi Arabia in recent years. “With the World Trade Organisation’s Trade Facilitation Agreement coming into force last year (itself a system for expediting the movement, release and clearance of goods, including goods in transit between WTO members), the spotlight has been on TIR as an effective tool to implement the TFA’s objectives,” he says. “Equally, the Saudi Arabian Vision 2030 and National Transformation Program 2020, is positioning KSA as a logistics hub linking Asia, Africa and Europe. We are extremely pleased that Saudi Arabia has pledged to implement the system swiftly and we look forward to seeing the first TIR operations in the very near future.” When asked what opportunities this lead to for Saudi Arabia and companies looking to trade outside the Kingdom, de Pretto reels off stats to demonstrate the ground that Saudi needs to make up with trading with its neighbours. “Bilateral trade between Arab countries is JULY 2018 TRUCK&FLEET ME 11
currently below 10%, and only 5.8% of Saudi exports go to its GCC neighbours,” he remarks. The IRU secretary general adds that the GCC has collectively committed to join the TIR system, with Kuwait, Qatar and the UAE already signatories, and Bahrain and Oman set to join soon. With a wider trade corridor, Saudi Arabia becomes a more attractive destination for investors which has been one of the priorities for the government reforms in the country. “Foreign investors, looking at indicators such as border crossings and customs formalities, would be encouraged to invest once a country accedes to TIR,” he explains. “Adopting the global standard sends a strong signal to investors, who would have more confidence in the attractiveness of investment opportunities relating to transit and trade.” Elaborating on his point, he adds that the trade corridor could also stretch to markets beyond Saudi Arabia’s immediate GCC surroundings. “Corridors such as the Ashgabat Corridor (linking Central Asia to the GCC countries through Oman) can benefit from a global tool which harmonises the different legal frameworks, making it easier for operators to work between the separate jurisdictions,” he says. “TIR can unblock the challenges of waiting times and security at borders. There are further issues, which harmonised UN conventions can tackle – such as the ADR Convention on the transport of dangerous goods and the ATP Convention on the transport of perishable goods. Multilateral agreements can address other issues, such as visas for drivers in the Middle East. IRU encourages countries to use these tried and tested conventions and agreements to streamline processes.” With most goods and products entering the region by sea, road transport has long-been the main method of ferrying them across the GCC. An established region-wide rail network is still years, and possibly decades, away the adoption of TIR by Saudi Arabia could make the country a crucial link and strengthen the use of intermodal transport to and from the region. “IRU has long advocated for ending silo approaches to border processes and unifying them under global conventions,” says de Pretto. “For seven decades, TIR has been facilitating and securing customs procedures for road transport. Our work on applying TIR to the intermodal context showed considerable savings in time and costs, as a result of reduced border processes; reduction in emissions with shorter waiting times; and, conversely, a significant boost to trade as the number of transports could potentially rise. “Concretely, we recorded a 5-day saving in 12 TRUCK&FLEET ME JULY 2018
oPENING A TRAdE coRRIdo R Umberto de Pretto argues that there is an opportunit y to open up an interm odal trade corridor between the GCC, Asia and Europe.
Who IS UMbERTo dE PRETTo, SEcRETARY GENERAL, IRU? Born in Ottawa in 1961, Umberto de Pretto has both Canadian and Italian citizenship and is now based in Geneva, Switzerland. After graduating in Political Science Economics and International Relations at Ottawa’s Carleton University, he worked as a legislative assistant for Ministers and Members of the Canadian Parliament and then moved to Paris in 1992 to take on the position of head of the Transport Division. Shortly afterwards, he was named deputy director of the International Chamber of Commerce, responsible for international commercial
practices and techniques. His previous roles at IRU, the world road transport organisation, include policy coordinator and head of strategy, and he was appointed deputy secretary general in 2002. He took up office as secretary general of IRU in June 2013, having first joined in 1995 as Head of Economic Affairs. His vision for the organisation is to lead the road transport industry towards embracing innovation and ensuring that the industry, as well as the regulatory framework, is ready for the challenges and opportunities ahead.
time when using TIR along an intermodal trade corridor linking Europe to the Middle East. Another study estimated that the use of TIR between Serbia and Azerbaijan would reduce transit and slack times by 92 hours; and increase container use by an estimated 33%, as the same container can be used to transport goods more times in a given year.” Now that the convention has been signed, there is a tried and test process to be understood by fleets before they themselves can use the TIR system. “There are five main actors involved in TIR and they work together in a chain of cooperation. The United Nations Economic Commission for Europe oversees the application of the TIR Convention, including adoption by member countries of any proposed amendments, reviewing national measures for compliance and supporting the application of the Convention. As the world road transport organisation, IRU manages the TIR international guarantee chain, distributes TIR guarantees through its member associations, and oversees IT and administration processes. IRU also develops new and innovative resources and services that work with and alongside TIR to facilitate trade and goods transport,” explains de Pretto. “Customs authorities implement TIR at the national level, including border controls, approvals of national TIR operators and vehicles. They can also contribute to amendments to the TIR Convention.” An authorised association in each country then issues TIR guarantees to approved transport operators. Associations work with their national customs authority to settle any irregularity arising in their territory. “After being approved by their member association and customs, transport and logistics companies can purchase guarantees and start making TIR transports,” adds de Pretto. “Companies who meet the criteria to become an approved transport operator are required to put the (TIR) sign on their trucks.” Looking ahead, IRU is working with the relevant agencies to develop a digital TIR system that applies the latest technologies and is at the core of efforts to ensure a seamless, transparent and more efficient supply chain. “By going digital, each shipment benefits from increased overall efficiency of logistics, resulting in increased economic competitiveness,” says de Pretto. “Fully digital TIR also harmonises the system’s capabilities so that it works interoperably with other digitalised procedures in the multi-modal fields of logistics, transport, customs and other relevant domains.”
Operations manager Ziyad Mohammed, Cardiff General Transport, talks to T&FME
ardiff General Transport is one of the foremost suppliers of heavy vehicles and heavy equipment in Abu Dhabi. According to Cardiff 's operations manager Ziyad Mohammed, the company is striving to deliver on its promise of excellence in service to all of its loyal clients through a company culture that is oriented around professional team work. Cardiff first started operations in 2009 and, as it nears a first decade in the market, it has fully embraced a philosophy revolving around a high standard of safety and quality of customer service. Ziyad says that the company 14 TRUCK&FLEET ME JULY 2018
has establish a wide range of operations in oil-field industry, attracting one of the sector biggest players ADNOC. Providing 24/7 on-shore and off-shore transportation, project management, vehicle lease and vehicle rental, custom clearing and forwarding services to their major client demands from them that they follow some of the highest safety and quality standards in the region. Rather than rest on its laurels, Ziyad says that the company is in a constant state of adaption and improvement to ensure it continues its impressive start in the market. “The market situation is challenging, customers are becoming more and more
We treat every working project as our own and complete the task as a partner”
empowered, and demand more for less,” he says. “Therefore, we need to be proactive and offer personalised solutions to meet their expectations. The backbone of our service is extensive support from customer-oriented operations team and well-trained drivers and operators who are specialised in the Oil & Gas industry. We utilise the capabilities of our full services according to customer requirements. We treat every working project as our own and complete the task as a partner.” Supporting Cardiff is a combination of the local knowhow of Darwish Bin Ahmed & Sons Co. LLC and the international might of MAN Truck and Bus Middle East.
Ziyad says the company has built a fleet of 60 MAN trucks but is continuing to add vehicles, and will be bolstered by the end of 2018 with the addition of the 4x4 TGM, 6x6 TGS and the TGS 8x8 off-roader, a rugged vehicle with high clearance making it adept at supporting remote pipeline installation. “MAN helps because the quality of the trucks for the successful running of the business,” he says explaining why Cardiff has built up a sizeable MAN fleet. “The mileage is fantastic, fuel consumption is economical and the MAN trucks can go on- and off-road which makes it more flexible and better than other brands.” Fleet purchasing at Cardiff is driven by the needs of its clients. Ziyad says that the company’s renewal of its fleet targets a five-year rotation with the sale of older trucks contributing to newer replacements. Given the remote locations and harsh environment that Cardiff operates, inspections on the vehicles are conducted on a regular basis and support from MAN and Darwish Bin Ahmed & Sons Co is vital. He adds that they have formed a strong partnership over time. “We started with a small number of vehicles but the truck number has grown to above 60 because of the trust and longterm relationship. The workshop and after sales support is very good thanks to the dealership in the UAE - Darwish Bin Ahmed & Sons Co and we have benefitted from their quality and durability over a long period of time,” says Ziyad. “The vehicles have performed without major breakdowns providing peace of mind and re-assurance.” “We are delighted to have enjoyed such a long partnership with Cardiff,” says Khalifa Darwish, Managing Director, Darwish Bin Ahmed & Sons Co. “We see it as our duty to help them continue to be a success. ” The UAE’s heavy truck fleet is an important part of the Oil & Gas industry and it is crucial that transporters are able to match the safety and environmental requirements of a sector that is becoming cleaner and greener. The company has established its own dedicated HSE department as part of an effort to protect lives and the environment from any hazard materials as required by UAE waste management regulations. “In the Oil & Gas industry, everything is reported and safety comes first,” he adds. “There is no compromise on safety rules and regulations. One of the major factors that we care about is safe transportation. Cardiff’s HSE department monitors and trains employees to work according to oilfield site rules and regulations. Whoever
the backbone of our service is extensive support from customeroriented operations team and welltrained drivers and operators who are specialised in the oil & gas industry”
violates safety rules, they will have to face actions according to the violation matrix and given safety orientation in order to improve the quality and standard of work.” Rises in fuel costs are a major pressure for fleet owners in the region and Cardiff is drawing on MAN’s expertise to better manage the overall cost of its vehicles and operation. “The continuous hikes in fuel price is having a serious major impact on the expenses side of the business. It is really very tough to maintain the same cost for trips with the current competitive market situation.” According to Franz Freiherr von Redwitz, Managing Director, MAN Truck & Bus Middle East, the work with Cardiff is a demonstration of how it provides customer-centric solutions in different segments, including Oil & Gas, to keep fleet costs manageable. “By focusing on individual transport costs, the correct MAN solution is recommended and supplied to any of the MAN operators in the region. Not only do we provide vehicles with an outstanding quality, our after sales services support our customers throughout the journey with MAN,” says Franz Freiherr von Redwitz. ”We guarantee maximum uptimes and therefore high profitability through our repair and maintenance contracts, extended warranty and MAN Genuine Parts that come with 2 years warranty. “MAN Truck and Bus Middle East also helps to save costs and improve overall profitability especially in the longrun through our MAN ProfiDrive driver
education program which is proven to increase fuel economy which, on average is a 10% improvement comparing a driver before and after the training session.” Another less-understood challenge for fleets is the temptation to save costs in a market that is more competitive than ever by purchasing non-OEM parts. MAN has invested millions into its genuine parts programme working with a carefully selected group of globally recognised suppliers who manufacture according to its demanding specifications and MAN Truck & Bus Middle East’s head of After-Sales’ Richard Brown believes this can help avoid failures and lower the the risk of accidents. “Counterfeit or grey market substitutes will cost less initially but the lower prices hide a haphazard production process using poorer materials and minimal checks which would have trimmed down the quality of the final product.” Whether it is truck quality, customisation, training or advice on parts, Ziyad says that Cardiff will continue to draw on MAN’s expertise to maintain its own high level of service. “MAN is our important partner as Cardiff has to provide the message to the UAE that we are able to provide services in oilfield operations safely. This is one of our priorities as it demonstrates that we are a quality brand to trust,” he says. “MAN also helps us by developing additional features that enable us to meet very high standards.”
A TEAM EFFORT (Left to right) Marketing Manager Basheer Mohammed, General Manager Shameer Mohammed, Finance Manager Jishar Mohammed head a team at Cardiff which is focussed on quality customer service and well-trained drivers. The company works in partnership with MAN Truck & Bus Middle East and Darwish Bin Ahmed & Sons Co.
JULY 2018 TRUCK&FLEET ME 15
Continental shifts Continental talks to T&FME about why it has had to re-think its port portfolio
16 TRUCK&FLEET ME JULY 2018
he way the goods and containers at ports is changing. The traffic at terminals continues to rise with TEU (twenty feet equivalent unit, the unit for containers) growth estimated to have grown by 6% in the past year. Meanwhile, the types of ships and the equipment and vehicles used to shuttle their loads are also evolving. Automation is on the rise too but even in older terminals the need to benefit from digital technology is creating demand from port operators who want to lower their costs wherever possible. Five years ago, Continental introduced its well-received V.ply tyres into the market but has recognised in the time since that it has been hindered by a lack of a radial option for ports following the load and carry method of container handling. However, this will change next year with Continental expanding into the radials segment. During an interview held in Rotterdam, Julian Alexander, Product Line Manager Material Handling at Continental CST tells T&FME that the company feels it must offer a complete range of tyre options for all terminals to compete in an expanding market. “The V.ply range has given us a lot of good feedback from our customers but I think it’s very important that we come with a complete offer now,” he says. “Sometimes, we talk with terminal operators that have got different terminals and they want to buy V.ply tyres from you but maybe they want Radial tyres for another terminal. Customers are mainly driven by cost per hour and we have to work on making sure our tyre performs with the lowest cost per hour – which is competitive for the market but offers them full service.” Alexander believes there are five main trends driving the ports sector: scale, speed, sustainability, smartness (as in technology) and safety. Continental, he adds, is moving towards a point where it can finally address all those pressures on port operators. The company is willing to change the way it is producing the tyres and their technology to keep pace. “Some ports are going up and some are going down, but at the end of the day the trends are still the same. The ships coming into terminals are getting bigger and they are having to be unloaded faster,” he begins. “It’s very important that there’s a whole smooth process getting the containers off the ships through the stack and back to the hinterland. And, of course, time is money and customers want reliable tyres that don’t let them down perform well. Really all they want is one less headache for them to worry about.” Rotterdam, one of the world’s biggest
container ports saw a rise of well above the global average in TEUs by 10.9% to 13.7 million TEUs in 2017. Much of that growth has been bolstered by the ramping up of activity at its new state-of-the-art terminal – APM’s Massvlakte 2 – and Alexander notes that Continental supplied crane master and straddle master tyres to the OEM producer of its 95 automatic guided vehicles (AGVs). Having accepted its first loads in 2015, the port is beginning to re-coup the $1.7 billion it cost to build as global trade recovers but Alexander feels Continental shouldn’t be concentrating on whether TEUs go up by 10% or 15%. “For us as a company, it doesn’t really matter. What really matters is the impact on the tyres. Are the vehicles are being driven faster or longer distances and doing different jobs? It’s very important that we know what’s happening in the market,” he says. “We have to really look closely into the market and have a field intelligence department where we have fleet engineers keeping close to the customer so we can ensure that as the market changes, we’re also prepared. If there is an impact on our tyres we also need to make sure our tyres change or the performances fits.” As an OTR field engineer Matthias Englehardt is one of the leading figures in Continental’s efforts to tap into how the requirements of ports and logistics companies are changing. “The biggest challenge for us is the influence factors like applications, machinery, tasks, especially as ports are highly diverse and scarcely one port resembles another....or in other words each port is different and has his own specification,” he remarks. “That’s the reason why we offer a wide range for industrial machinery and we also help the customer to find the product which clearly matched his main application and his main operations. We have to know the customer otherwise we almost never get this information.” The role of Continental’s field engineering department is to monitor how the tyres are running: (“which run well, which runs wrong”) and give recommendations for improvement as Continental works to find the best requirements for their customer: “This is the biggest interaction between fleet engineering and R&D,” he adds. The majority of ports use two different methods of container handling – ‘pick and stack’ and’ load and carry’. During pick and stack operations the container will be placed very close to the loading point which means the tyres run on short distances, but with a lot of turns and often on the spot. Englehardt says that the major challenge in these applications JULY 2018 TRUCK&FLEET ME 17
a sECToR IN FLUx Julian Alexander says the ports market has changed considerably since the V.ply was launched five years ago. Hence the need for radials in ever more busy ports.
is fighting wear on tyres. A common sight on pick and stack ports are thin strips of rubber from the tyres left on the surface of the concrete (wear worms as one Continental executive describes them). Alexander identifies them as a problem for ports concerned with sustainability. He says the company’s engineers have come up with a new compound called Port Plus which makes it much harder for the rubber to tear. “In these applications where you do a lot of turning you tend to get cracks where there’s tread on the right angles. Our R&D and chemists have worked on upgrading the compounds. They’ve redone the recipe using natural rubber, synthetic materials, fillers: silica and other things like that,” he remarks. “The compound increases the tensile strength of the tyre which basically means you get less abrasion. In addition, the compound runs at a lower temperature which means you get less heat generated issues.” Heat generation is an even bigger issue at load and carry terminals, where the container is transported over a long distance; with the longer distance meaning higher speed and “a higher speed means higher temperature,” Englehardt says. “That’s why our design engineers have had to design a tyre compound that is low heat generating to avoid over-heating on 18 TRUCK&FLEET ME JULY 2018
some ports are going up and some down, but the trends are still the same. the ships coming into terminals are getting bigger and they are having to be unloaded faster”
sidewalls” and sidewalls operations is likely to have welches on the sidewall which reduces the tyre life, and brings the operator to have to do a short interval between replacing the tyres.” The testing of the compound is starting to deliver some impressive data with as much as 50% in some cases of an improvement in wear. Englehardt reveals that the testing is also proving that the Continental’s tyres will be suitable in the Middle East. “We have a test in a Dubai port with the new compound and the results are not showing 50% because the operation is different but the intermediary results are showing us the right way and that we can attack these markets with sales. Less heat build-up will help us especially in these higher temperature markets for industrial applications but also we see it being suitable for construction sites where you need a special compound.” The problem of heat generation on the massive equipment used at ports is one of the biggest motivations behind next year’s introduction of radial tyres. In 2016, Continental announced that it had spent almost $60 million in improving its agricultural radial range production at its Lousado plant in Portugal. The company will now use the facility as the base of radial tyre production for port applications. “We had to build up the infrastructure first in order to make sure that we actually provide the quality the customer is used to and expect from from Continental Tyres,” adds Alexander. Martijn Oosterbaan, tyre development and field application engineer OTR, says that by using a radial tyre you can improve your heat build due to its footprint and heat distribution and increase the lifetime of the tyre. “We’re really working hard on extending our portfolio on tyres from just the V.ply range. We have basically three main patterns that we are developing. The RD20 which we’re known from the material handling ares. We will also have a Straddle Carrier Pattern and also a container mass pattern in different sizes, especially for vehicle types that are running in hot and fast conditions,” he explains. “We are planning the launch for the middle of next year for the extension and the Radial portfolio. “Since the end of last year we have been testing the tyres on several places around the world. We are testing in Italy, France and New Zealand. Our field intelligence department are really closely following the tyres; testing every milimetre of wear.” Vehicle fleets in the Middle East can now access Continental’s digital solutions such
ChaNgINg poRTFoLIo “In ports, we distinguish different central tasks – pick and stack applications on the one hand and load and carry applications on the other hand - which all require different vehicles, each with specific demands: In pick & stack applications, vehicles are used to load and unload containers, there is a lot of short distance driving with a high number of turning on the spot – the focus of the tire development therefore needs to be the reduction of abrasion and the subsequent tire wear it causes,” explains Julian Alexander, Product Line Manager Material Handling. Continental is therefore now offering the V.ply tire portfolio with a new Port Plus compound, a compound that reduces heat generation and abrasion, the two primary causes of tire wear, to significantly extend tire life. Other than picking and stacking containers, vehicles in ports may also operate in applications that involve driving over longer distances and at higher constant speeds. Heat build-up is the biggest challenge and the main reason for high maintenance costs and vehicle downtime. “With our new radial tires with a very low heat build-up produced with state of the art technology, we are once again reinforcing our position as a full solutions provider for port operations,” says Alexander. The radial tire portfolio will be available with integrated tire sensor ready for the digital solutions ContiPressureCheck and ContiConnect shipped from the factory. The tyres will be available from next summer.
PEUGEOT TRAVELLER BUSINESS CONVENIENCE & LUXURY ON THE GO
Starting from Class Leading Fuel Efficiency (17.5 km/L) Class Leading Safety (4* ENCAP)
Price inclusive of 5% VAT 5-year roadside assistance
DUBAI: Sheikh Zayed Road SHARJAH: Sheikh Khalifa Bin Zayed Road FUJAIRAH: Bin Matar Road RAK: Mohd. Al Mothwkil Road
Toll free: 800 782 748
as ContiPressureCheck and ContiConnect. Part of a series of solutions that use sensors to give both drivers and fleet managers warnings of heat and pressure problems in the tyres. Michael Christian Lorenz, tyre development and field engineer application OTR specialist says that Continental is learning from its earthmoving tyres where the sensors are already factory-fitted inside the tyre. “The sensor measures the temperature and pressure of the tyre and is ready to be used by ContipressureCheck – which is for single vehicles. This is driver-focused as they will always be notified when there is too high or low pressure and the temperature is higher
than recommended. So, for example, this is something which fits very well with ports as they have an entire fleet of different vehicles and this we cover with ContiConnect.” Suitable for use across the entire port portfolio of Continental the sensors can also be retrofitted into an existing tyre. “This we do in many different industries and this we can do for port tyres,” adds Lorenz. “We are looking for partnerships and nice set ups together with OEMS. We already have one example, together with the Belgian company MOL who is producing terminal tractors. We got a very concrete specification from one terminal that wanted to increase safety on one
time is money and customers want reliable tyres that don’t let them down”
hand and on the other side the wear of the terminal tractor tyres. They wanted to reduce the breakdowns they had. Our CPC sensor and system is sending information to the engine and when the pressure is low for example, the vehicle will drive slower, and when it goes lower to a critical level the vehicle will then stop and the driver will need to go to the workshop.” As our discussion comes to close, Alexander sums up Continental’s shift in the way that it is approaching the market. “This is all about the complete offer. I think that it is very important that we come with a complete offer now and not only with our V.ply tyres but with all our tyres.”
JULIaN aLExaNdER oN ThE FIVE FUTURE TRENds oF poRTs scale “Size matters. The largest container ships existing reach an overall length of more than 400m and a beam of more than 50m. They are able to carry loads of more than 200,000t. This trend towards mega ships results in higher congestion and adds complexity to the port terminals. Subsequently, operations get more diverse. Loads become even heavier and bigger. Terminal tractors and trailers need to load and carry heavy freights over longer distances. Robust tyres such as our TerminalMaster complement the vehicle allowing it to transport heavy loads faster.
speed “Time is money. This is also true for ports where a precise planning of processes and operations is even more important given the enormous impact of the tides and the costs for dockage. Working at high speed is therefore essential for modern ports to remain attractive to carriers. This can be seen by the increasing number of RoRo operations, for example in the port of Malmö where the RoRo traffic has grown by 20% over the last five years. RoRo operations are extremely flexible, quick and cost-efficient and they support an even better vessel utilisation.
20 TRUCK&FLEET ME JULY 2018
safety “Safety is one of the guiding principles of our daily work and part of our corporate mission at Continental. The vision of zero accidents drives us – on and off the road. Today, in ports the set of safety challenges in an already dangerous environment gets even more complex. The study ‘Global container terminals’ of the British IOSH has shown that a third of the dockworkers experienced injuries in the previous year while even 70% feel that their safety is at risk. Tilting stability such as the compound is extremely important to us. Safety is not something we only pay lip services to.
sustainability “Environmental sustainability is one of the most important topics on the political agenda. Ports have to be ‘green’ to keep their ‘license to operate’. Otherwise, the resistance of local population or climate change goals will force them down. In ports, vehicles still belong to the major drivers of emissions. 20% fall upon the rolling resistance of the tires. Yet, there is enormous potential to reduce CO2 emissions and waste accumulation. Through improvement of compounds, wear, rolling resistance and heat build-up of our tyres, we contribute to sustainable ports.
smartness “The future port is smart. Port of Rotterdam for example has established the first automated terminals. New technologies and innovations will optimise the flow of information and goods. All devices will be interconnected and communicate with each other. Our tyre pressure management systems are a first step towards embedding tires in fully connected ports and digital chains. Our partner MOL in Belgium has recently started the delivery of their tractors with tyre sensors pre-installed and the data integrated in their dashboard.”
Learning from the amazon effect Cyndi Brandt, senior director, Omnitracs on how Amazon is changing logistics
hen you go all the way to back to the first Model Ford, it didn’t just disrupt transportation. It disrupted people that had stables, it disrupted people that shoed horses. It disrupted carriage makers, wheel makers for carriages, crop makers. When you simply type in the term Amazon effect on Google today you get back over 174 million records. That tells you just in that small search alone that the Amazon effect 22 TRUCK&FLEET ME JULY 2018
is something that is absolutely, incredibly real within many industries across retail and distribution. I like to think of the Amazon effect really as the disruption effect. And why do we think about it as a disruption effect? Well disruption is anything that changes how you do business today. Disruption is good because it does three incredible things. One, it makes us think; it makes us think about change both in the physical sense as well as the mental sense; and, lastly, it also really makes companies innovate. We can’t be complacent. We can’t wait to
We have created an economy now that wants everything right away”
see how things actually happen out there. Jeff Bezos (Amazon’s CEO) really is taking a long-term approach. He’s figuring out ways to ‘delight’ customers, if he didn’t, its revenue line wouldn’t trend upwards and to the right as severely as it is. If they weren’t thinking about new ways to delight their customers; if they weren’t really thinking about ways to foster innovation new ways to serve those customers; you and I probably never would have thought about this little online books bookseller that came out of nowhere. So to be profitable put money back in your business.
Focussing on some of the logistics and supply chain services that they have invented for themselves, (you’ve got) the over the road tractors and trailers. We’re starting to see Amazon Prime-branded vehicles, as well as trailers, out and about everywhere now (in the US). They acquired TiVo so that they could automate a tremendous amount of their warehousing but what it has also done is spurn TiVo on to do even more innovation in their robotics area. They started an airline and lease planes so that they can move Prime packages. We
i don’t think there’s any limits to where they can innovate”
wouldn’t be surprised if they don’t start to move some of the some of the US Postal Service mail inside those vehicles as well. And then there’s warehousing fulfillment and shipping services all meant to benefit the smaller businesses that work with them; so they can enable greater choice. They can also enable faster service and convenience to customers. They continue to invest in many different areas of transportation and the supply chain so that they can build a bigger, better, faster Amazon. The effect is that there is also excess capacity and they use that excess capacity to also sell and service wholesale distributors. And probably the biggest one is Amazon Web Services – they had to build that whole cloud interface and cloud solution for themselves and because they needed extra redundancy for disaster and fail over they started to create a server farm that had an immense amount of excess capacity. Now some of the world’s leading software applications for both businesses and consumers exist in that Amazon Cloud. There are two key areas that I think that they can really disrupt and innovate. One is going to be healthcare (we’ve already seen Bezos make some moves towards healthcare with some of the strategic alliances he’s created) and the other is traditional wholesale distribution areas; industrial supply, building supplies electrical supplies. They’re starting to build back-ends that cater to those businesses. I also think it’s completely plausible that one day they’ll also be 3D printers on Prime Now trucks or Amazon Fresh trucks, so that when somebody needs an on-demand part they can get on the Prime Now app and say, hey, get a truck over here print that part for me. I don’t think there’s any limits to where they can innovate but it’s important for us to understand what they have under the covers – on the back-end – for distributors to access and use; especially if they’re using multi-modes of transportation or the omni channel network to get things done. I always like to say there’s an ‘Amazon smile’ and an ‘Amazon frown’ and one of the things that Amazon is helping with is reshaping warehouse and shipping costs. If you look at their FBA programme, they’re able to consolidate packages and bring down the retailer’s shipping costs. They’re starting to generate excess capacity in warehousing by building warehouses everyday. Are they going to be very specific sometimes in the frozen, dry or refrigerated in the food space or the produce space? Probably not but they’re going to be wonderful dry warehouses that smaller wholesale distribution
CUSTOmERS ORdERING LESS, mORE fREqUENTLY As our customers order less and they want more frequent shipments, it really increases and drives up the cost of transportation exponentially. Your average cost to deliver was 55$ and customers were ordering $400 of product and that means that you have about $350 of profit on that delivery. If now they’re only delivering $200 dollars-worth of product it will still cost me $50 dollars to deliver. It’s gone from 350 dollars in profit done to 150 dollars in profit. If you just take a step back and think: What if you had to deploy a truck for delivery instead of doing it ten times a day, it had to make 20 deliveries a day? The vehicle configuration has got to change. It could be the body, it could be moving from gasoline to natural gas to electric. There’s going to be tons of different configurations out there and we’re already seeing companies producing trucks bodies coming out with bodies to allow people to do both bulk delivery as well as a small quantity deliveries with much more volume. On average it cost us two dollars a mile for a vehicle that we’re running. Iif we have to increase our stops by 25% that increases our overall transportation costs by 25% which takes a good bite out of the bottom line or profit. It’s also going to increase wear and tear on those vehicles. We may need more employees to make those deliveries, or we may need to buy different vehicle configurations, so buy different figure out how do we actually get all these deliveries I wouldn’t be surprised if we’ll start to see some of the smaller 8 foot straight trucks start to move up to be more of a 12 or 16 foot straight truck.
JULY 2018 TRUCK&FLEET ME 23
Discover the IVECO world and all its news on: www.iveco.com, Middle East area. Or call now the IVECO Representative Office: 00971 4 2994935
BEST PAYLOAD IN THE INDUSTRY Payload up to 20 ton on a 6x4 chassis with Large “C” section chassis
CONTINUOUS OPERATION Higher autonomy thanks to the Cursor engine that allow to reduce fuel consumption
ON-ROAD EXCELLENCE. OFF-ROAD ENDURANCE.
OUTSTANDING TCO Thanks to 11.2% fuel saving tested by TÜV on the New Stralis, optimised driveline and disk brakes
MODULAR AND MISSION-ORIENTED RANGE New front axle (off road) that guarantee an higher ground clereance Robust chassis for light off-road missions
companies can participate in. I think that that’s one of the great things that they’re going to do for a lot of companies. With warehouses you sometimes have to locate them in areas where you can afford the rents, and by Amazon taking over that rent for us, they can offer the space at a lower cost. It will also be in a better-situated location because you can bet they’re going to be picking the prime locations for themselves. Amazon has increased the number of choices that we have. I had to buy a new bluetooth headset the other day. And on Amazon I had no fewer than probably 20,000 products came up. I never knew that I could have that level of choice and it’s because they’ve broken down a lot of global borders to bring products together. They’re really changing the shipping paradigm – we used to think it was wonderful to have five to seven days shipping and now we want two hours or 30 minutes or two days. That’s going to put a lot of pressure on anybody that performs a service or delivers a product. We always see the B2C trends bleed into the B2B world. So, we need to be cognisant that those shipping paradigms are going to affect us. The ‘Amazon frown’ for me is first and foremost about changing customer demands. We have created an economy that now wants
everything right away. We’re starting to train people that if you can order it now, you can have it within the next two hours or 24 hours. Amazon is also a competitor and in front of me. Sometimes they compete with folks, sometimes they help us and sometimes they’re really our enemy because they’re taking product away or increasing delivery frequencies. We have now found that people, because of all these different Amazon services (such as Amazon, Amazon Fresh) were ordering fewer pieces of product and we want to get them more often. These frequent smaller shipments can be a real challenge for distributors, if they don’t really start to plan for them accordingly. The best thing and the worst thing is really this investment in innovation. I think that people really need to start to take a step back say we can’t run our companies the way we used to. If we look at things we buy as consumers – you know the whole omni-channel where I can have it shipped to me, pick it up at a store or have it delivered via truck – we have all these choices. We’ve got to start to think about how are all these multiple choices going to affect my business and how can I innovate around that? Amazon is going to force me to take a step back, re-evaluate my business and think about what can I do to make a change?
ENCOURAGING mORE dRIVERS ThROUGh TEChNOLOGY We have an ageing workforce that is starting to say I’m done driving and we don’t have a lot of folks that are raising their kids to be truck drivers and delivery people. We’ve got to figure out how do we use technology to elevate these positions to make them a position that is really becoming more desirable?
Efficient, autonomous, connected. Discover the future of moving freight.
Tickets from iaa.de Sep. 20–27, 2018 Hannover
JULY 2018 TRUCK&FLEET ME 25
Volvo Trucks on its recently unveiled EV truck ranges 26 TRUCK&FLEET ME JULY 2018
VoLVo FE ELECTRIC Fully electrically-powered truck for distribution, refuse collection and other applications in urban conditions, GVW 27 t. Driveline: Two electric motors with 370 kW max power (260 kW cont. power) with a Volvo 2-speed transmission. Max torque electric motors 850 Nm. Max torque rear axle 28 kNm. Energy storage: Lithium-ion batteries, 200-300 kWh. Range: Up to 200 km. Charging: Two different charging systems are available; CCS2 – Maximum charge power 150 kW DC. Low Power Charging – Maximum charge power 22 kW AC. Charging time: From empty to fully charged batteries (300 kWh): CCS2 150 kW appr. 1.5 hours, Low power charging apprx.10 hours.
n 2019 Volvo Trucks will start selling electric trucks in Europe, and the first units will be put into operation together with selected reference customers already this year. Electric trucks drastically reduce noise and exhaust emissions and open up for new ways to manage logistics. More transport assignments can be carried out at night and fewer trucks need to compete for road space during rush-hour. “Electromobility is fully in line with Volvo Trucks long term commitment for sustainable urban development and zero emissions,” says Claes Nilsson, president Volvo Trucks. “By using electrically powered and quieter trucks for goods transport in urban areas, we meet several
challenges simultaneously. Without disturbing noise and exhaust gases, it will be possible to operate in more sensitive city centres. “Transport may also take place throughout less busy periods, for example in late evening and at night. This will reduce the burden on the roads during daytime rush-hour traffic, allowing both the road network and vehicles to be utilised far more effectively than today.” A recent project, Off Peak City Distribution, conducted by Stockholm City, Sweden and KTH Royal Institute of Technology studied the effects of goods transport at night in central Stockholm. Since the trucks avoided having to operate in rush-hour traffic, transport assignments
Without disturbing noise, it will be possible to operate in more sensitive city centres”
were carried out in one-third of the normal time. In order to improve the quality of life in urban environments more sustainable transport solutions need to be adopted. With well-developed logistics and more effective utilisation of roads in the evenings and at night, it is also possible for many smaller vehicles to be replaced by fewer but larger vehicles, thus further contributing to lower emissions and less traffic. A distribution truck has just over ten times the load capacity of a regular van. If a larger proportion of transport assignments could be carried out during hours when fewer people are on the road, this will also significantly reduce the risk of accidents.
JULY 2018 TRUCK&FLEET ME 27
“Our technology and knowhow within electromobility are based on proven commercial solutions already in use on Volvo’s electric buses, and solutions that were introduced in Volvo’s hybrid trucks as far back as 2010. The vehicles themselves are only one part of what is needed for large-scale electrification to succeed. Enabling long term sustainable transport is a complex issue that requires a holistic and wide range of measures. We are working closely with customers, cities, suppliers of charging infrastructure and other key stakeholders to create the necessary framework for electrical trucks”, says Jonas Odermalm, head of product strategy medium duty vehicles at Volvo Trucks. “We belive in full electrification for urban distribution as a first step. However, we are working with electrification for other transport applications. This is only the beginning”, adds Nilsson. Volvo Trucks has begun to roll-out all-electric trucks for commercial use. First announced was the Volvo FL Electric, a truck designed for urban distribution and refuse operations, among other applications. Sales and series production of the new model will start in Europe next year. With this introduction Volvo Trucks takes the lead in solutions for electrified goods transport in cities. “We’re immensely proud to present the first in a range of fully electrically-powered Volvo trucks ready for regular traffic. With this model we are making it possible for cities that aim for sustainable urban development to
the vehicles themselves are only one part of what is needed for large-scale electrification to succeed. Enabling long term sustainable transport is a complex issue that requires a holistic and wide range of measures”
A nEw wAVE oF ELECTRIC VEHICLES Jonas Odermalm (left), says are only one part of what is needed for large-scale electrification to succeed. Meanwhile Claes Nilsson says Volvo wants to help cities that aim for sustainable urban development.
28 TRUCK&FLEET ME JULY 2018
benefit from the advantages of electrified truck transports,” says Nilsson. With better air quality and less noise in the city, it is possible to plan for housing and infrastructure more freely than at present. An electric truck without any exhaust emissions can be used in indoor terminals and environmental zones. Their low noise level creates opportunities for doing more work at night, thus reducing the burden on the roads during the day. There is considerable market interest in electric trucks. Many potential customers have questions about the opportunities generated by the new technology and how it can impact their operations. Odermalm says that in order to make the transition secure and smooth, the company is offering holistic solutions based on each customer’s individual needs regarding driving cycles, load capacity, uptime, range and other parameters. “Such a solution may encompass everything from route analysis and battery optimisation to servicing and financing. Volvo Trucks works closely with several suppliers of charging equipment. The aim as always is to offer customers high uptime and productivity,” he adds. Volvo Trucks’ sister company Volvo Buses has sold more than 4,000 electrified buses since 2010. The technology used for propulsion and energy storage in the Volvo FL Electric has been thoroughly tried and tested from the outset and is supported by Volvo Trucks’ network.
AUTomATIC FoR THE pEopLE The steady advance of vehicle automation enables exciting possibilities for the transport industry and society as a whole. And Volvo Trucks has been at the forefront of this evolution for well over two decades. Sasko Cuklev, Director Autonomous Solutions, has a strong vision and talks frankly about the possibilities he sees for the near future. “There is no doubt we will start to see self-driving trucks from Volvo on our roads becoming a part of our society. The exact timing depends on many things such as traffic regulations, road infrastructure and of course safety standards,” Cuklev continues. While a shift towards using fully automated vehicles forms part of the development, work currently remains focused on implementing automation stepwise to enhance the driver profession towards further increased safety, productivity and convenience. “Automation is not about killing jobs,” states Ann-Sofi Karlsson, Director Human Factors for Automation. “The future need for skilled drivers will still be high. As trade and the world population continues to grow, so does the transport of goods. Automation is about making it more efficient.” As well as having a global outlook, Volvo Trucks’ automation work is closely tuned into making everyday lives easier, like that of driver Lukas Strohmeier. A professional who drives silo transports in southern Austria, his working day often involves loading up in the compact, busy city of Graz. “It’s very difficult driving a big vehicle through heavy traffic. You have to keep your eyes everywhere. It would be helpful to have another hundred eyes.”
VoLVo FL ELECTRIC Fully electrically-powered truck for distribution, refuse collection and other applications in urban conditions, GVW 16 tonnes. Driveline: Electric motor with 185 kW max power (130 kW cont. power) with a Volvo 2-speed transmission. Max torque electric motor 425 Nm. Max torque rear axle 16 kNm. Energy storage: Lithium-ion batteries, totalling 100-300 kWh. Range: Up to 300 km. Charging: Two different charging systems are available; CCS2 – Maximum charge power 150 kW DC. Low Power Charging – Maximum charge power 22 kW AC. Charging time: From empty to fully charged batteries: fast charge 1-2 hours (DC charging), night charge up to 10 hours (AC charging) with maximum battery capacity of 300 kWh.
“From experience we know how important it is that cities, energy suppliers and vehicle manufacturers cooperate in order for large-scale electrification to become a reality. With attractive incentives, agreed standards and a long-term strategy for urban planning and expansion of the charging infrastructure, the process can go much faster,” explains Odermalm. Volvo Trucks believes that it is essential to take a holistic view of electrification of the transport sector to handle the ongoing challenges in areas such as electricity generation and batteries. “In order to ensure that raw materials for the batteries are extracted in a responsible way, the Volvo Group works with the Drive Sustainability network, which has a special function that monitors this issue,” explains Odermalm. “The Volvo Group is also involved in various projects where batteries from heavy electric vehicles get a second lease of life, reused for energy storage. All the questions about handling of batteries have not yet been solved, but we are working actively both within the Group and together
Low noISE, VIbRATIon-FREE AnD ComFoRT The new trucks will be offered in several variants for different types of transport assignments. Volvo’s low-entry cab, which makes it easier to enter and exit the cab and gives the driver a commanding view of surrounding traffic.
We are working closely with customers, cities, suppliers of charging infrastructure and other key stakeholders to create the necessary framework”
with other actors to drive development.” With the first trucks in the Volvo FL Electric range entering regular operation with customers in Volvo Trucks’ home city of Gothenburg, the company also unveiled the Volvo FE Electric in April. Like the mainline trucks offered by Volvo Trucks, this vehicle is designed for heavier city distribution and refuse transport operations with gross weights of up to 27 tonnes. Sales will commence in Europe in 2019. “With the introduction of the Volvo FE Electric we have a comprehensive range of electrically powered trucks for city operations and are taking yet another strategic step forward in the development of our total offer in electrified transport solutions,” explains Nilsson. “This opens the door to new forms of cooperation with cities that target to improve air quality, reduce traffic noise, and cut congestion during peak hours since commercial operations can instead be carried out quietly and without tale-pipe exhaust emissions early in the morning or late at night.” The first Volvo FE Electric, a refuse truck with a superstructure developed together with
Europe’s leading refuse collection bodybuilder, Faun, will start operating in early 2019 in Germany’s second-largest city, Hamburg. “Hamburg, which in 2011 was named the European Green Capital, has worked long and successfully on a broad front to enhance green and sustainable urban development. This applies not least in the transport sector, where electrified buses from Volvo are already being used in the public transport network,” says Odermalm. The experiences and ambitions from this venture make Hamburg a highly interesting partner for us.” Prof. Dr Rüdiger Siechau, CEO of Stadtreinigung Hamburg, sees large potential for environmental benefits with electric trucks in the city. “Today, each of our 300 conventional refuse vehicles emits approximately 31.300 kg carbon dioxide every year. An electrically powered refuse truck with battery that stands a full shift of eight to ten hours is a breakthrough in technology. Another benefit is the fact that Stadtreinigung Hamburg generates climate-neutral electricity that can be used to charge the batteries.” JULY 2018 TRUCK&FLEET ME 29
Jan-Erik Thoren, managing director, Volvo Trucks Middle East on its recent Safety Edition FH launch
olvo Trucks recently launched an enhanced version of its FH – the Safety Edition FH – with FAMCO in the UAE and Jan-Erik Thoren, managing director, Volvo Trucks Middle East, tells T&FME that the truck is closely aligned with the Swedish company’s well-known emphasis on safety. “One of the core values of Volvo has been safety right from the start of this company. We have continuously invented and introduced many safety features across many countries,” begins Thoren. “We see the focus of road safety and environment gaining momentum in the Middle East countries and we see the need to introduce the Volvo advance safety systems in this region. Moreover, Volvo has always taken the lead in introducing new systems in this region.” The new truck has enabled the introduction of Volvos’ Advanced Safety Features, such as the Headway Support System and Lane Keeping Support. While it is intended to be in line with the 30 TRUCK&FLEET ME JULY 2018
UAE Government’s vision 2021 and its focus on providing a sustainable future, Thoren says it could help drive demand for more safety features in the market. “We have many safety features in this truck which are standard in many countries in Europe. We have a responsibility to communicate to the authorities and customers on how we can make our roads more safer with our trucks. We see that few of these features can become standard requirements in four to five years’ time.” It has been a year since Volvo Trucks launched the similarly specc’ed FH 16 in Saudi Arabia with Zahid Tractor, and Thoren says that it was: “well perceived and the customers are happy with the features.” He adds that while UAE truck shares the same specification as the FH there is a key difference between the two. “Yes, it’s similar to the truck launched in Saudi last year but we have enhanced the UAE truck with a couple of more additional features such as a tyre pressure monitoring system,” he says. “These safety features can be
ordered on any of the Volvo trucks in this region from end of this year. This truck is to demonstrate the advanced safety features what Volvo can offer.” Thoren believes that Volvo Trucks is the first company to bring in such a comprehensive suite of advanced safety features into the region. “We see systems such as Tyre pressure monitoring and Volvo Dynamic Steering having instant success as they will come into play during a daily operation. The other safety systems will come into action when accident situations occur – and this will gain prominence in the years to come.” He continues: “Better safety features means possibility of lesser insurance premiums and fewer accident possibilities and the unavailability of trucks or loss of production. Hence the safety features will come with a price which will offer value to the customer.” Its UAE distributor FAMCO has built an impressive track record for selling advanced technology on Volvo Trucks that improve productivity, particularly with the 90%-plus adoption
rates with fleets of the automatic I-Shift system. Thoren has every confidence they will be able to communicate the benefits of the new features. “FAMCO has been a very strong partner for Volvo for many years now. They have taken the lead in investing and introducing new Volvo features in this part of the world,” he remarks. “It will be difficult to sell the safety features to start with. That is the reason we have a truck which will be demonstrated to different customers across the country. Systems such as the Volvo Dynamic Steering will keep the drivers fresher, which means more productivity.” Volvo Trucks is also now selling Euro 5-compliant vehicles into the UAE market. With some manufacturers experiencing a drop in sales due to some fleets opting to buy Euro 3 trucks, new vehicle sales could further be harmed by overall slow demand, but Thoren cautiously optimistic. “It (2018) has been good so far and weare expecting moderate sales this year but we are still optimistic.”
COnTinEnTaL FiRST TYRE FOR MiddLE EaST / PEnTa GOES ELECTRiC / FMS TECH inTROdUCES GEOFEnCinG / PaREnT TYRE SaFETY
Continental launches all-new Generation 6 COMPanY inTROdUCES FiRST TYRE dESiGnEd FOR THE REGiOn TYRES Global tyre giant Continental has introduced its all-new Generation 6 tyre range, which has been specifically designed for the Middle East market. Continental said in a statement that the new tyre is aimed to service up to 40% of the region’s tyre market and offers vehicle owners a selection of robust tyres designed to cope with the road conditions found across the region. Consisting of 60 different sizes across three product lines, the Generation 6 tyres comprise ComfortContact 6 for smaller cars and city driving, UltraContact 6 for larger sedans and MaxContact 6 for high-performance
vehicles. Providing a wide range of options for customers, the new premium tyre range will service small to high performance cars, combining advanced German technology with local expertise to deliver greater comfort and robustness, suitable for the driving conditions faced by the region’s drivers, said Continental. The company added that the Generation 6 tyres have undergone extensive safety checks in line with Continental’s Vision Zero goal of eliminating fatalities, injuries and accidents on road. Commenting on the Middle East arrival of Generation 6 tyre products, Jose Luis de la Fuente, managing director of Continental Middle East, said: “The region has proven to be a key market for Continental since the establishment of the brand’s regional office in 2015. We are confident that our customers will reap the benefit of the tyres’ performance and TYRE adVanCEMEnT robustness across some The design of the new Generation 6 range provides high resistance to damage from of the toughest terrains hazards such as potholes, debris and kerb and challenging impacts, helping to prolong the tyre’s life. conditions.”
PEnTa TO OFFER ELECTRiC POWER SYSTEMS bY 2021 EnGinES
Engine and power products specialist Volvo Penta will provide electric power solutions for both its land and marine business areas by 2021. The Volvo Group company said that as part of this commitment, it has undertaken an organisational restructuring to accelerate the switch towards electrified power. As part of the increased commitment to its electrification investment programme, Volvo Penta has already established an electromobility development and test laboratory at its Swedish headquarters. “Volvo Penta is embracing the electric transformation and will be at the forefront in delivering compelling business cases to customers using this new technology,” said Björn Ingemanson, president, Volvo Penta. “We will take a full systems supplier approach helping our customers in the transition to the new technology. This will happen application-by-application, on the basis that the business case for switching to electric will differ across our many customer segments. This is the start of a long-term transition.” He added, however, that diesel and petrol-powered systems will remain the most appropriate power source for many applications for years to come.
inSidE THiS MOnTH’S WORKSHOP: CaLCULaTinG TCO FOR EVS, a FLYinG Taxi SERViCE THaT TaKES inSPiRaTiOn FROM dUbai, UiTP in dUbai, and MORE 32 TRUCK&FLEET ME JULY 2018
OnE in FOUR UaE PaREnTS Can’T RECaLL WHEn THEY Had THEiR TYRES CHECKEd
FMs Tech inTroduces GeoFencinG in The Gcc
Fleet Management Systems & Technologies (FMS Tech) has introduced its new Geofencing software for fleet management in the GCC. The company says the new system takes in-vehicle monitoring systems (IVMS) and telematics, known for their ability to track and trace vehicles with Global Positioning System (GPS) location, a step further with a new nextgeneration programme that is already in use in many parts of the world. FMS Tech’s Geofencing gives an administrator control of establishing a virtual boundary around a specified location and sending alerts when a specific vehicle enters or exits the area. The company added that it is designed for maximum transparency on the whereabouts of a fleet, and allows an administrator to control fleet movements.
ROad SaFETY Research in the UAE has found that parents are overlooking basic safety checks of their vehicles, putting themselves and their children at risk. Contrary to the advice of safety experts, most parents are failing to check their tyres regularly enough, with a quarter not even being able to recall the last time they did a proper check, said a report commissioned by Continental. Continental said it conducted two separate studies; with YouGov surveying the frequency with which UAE parents check their tyres and a second inspecting the state of parent vehicle tyres at GEMS Modern Academy Dubai. Continental and local partner Emirates for Universal Tyres (EUT) carried out standard tyre tests on over 200 vehicles parked at the GEMS Modern Academy in Dubai. A YouGov survey asked 500 UAE parents about the last time they or a professional thoroughly checked the tyres on their car: 47% said they had within the last month with a further 23% and 5% in the last six months and 12 months respectively. 25% of those surveyed could not recall the last time they had their tyres checked. Intended to help ensure that parents were
ferrying their children safely and also to raise awareness around the issue, technicians visited GEMS Modern Academy and tested the air pressure, tread depth, wear and punctures on 204 vehicles and found that 24 of the vehicles, more than one in ten of the sample, should have at least one of their tyres replaced. While seven in ten vehicles had the correct tyre pressure, more than 25% of checks discovered under-inflated tyres – a key factor contributing to irregular tread wear (discovered in 31 vehicles) and side-wall damage (found on 14 of the parked cars).
YOUR ADBLUE® TOTAL PACKAGE PROVIDER Need AdBlue®? Call Trychem! ■ ■ ■ ■ ■
Trychem FZCO P.O. Box 263945, Dubai, UAE Tel. +971 4 8807059 email@example.com
For your Euro 4, 5 or 6 vehicle 1,000 liter IBC and dedicated IBC pump Now available in the UAE Allows you to drive 60,000 km per truck with 1,000 liter Also available in 10 liter cans and bulk
AdBlue® is a registered trademark of the Verband der Automobilindustrie e.V. (VDA).
JULY 2018 TRUCK&FLEET ME 09:38 33 16.05.18
How viable are e-Trucks? What will spark EV adoption? Asks McKinsey Center of Future Mobility
he adoption of electric vehicle (EV) technology in the freight sector appears to be progressing faster than expected, potentially presenting a major challenge to the dieselfueled truck market. This article explores how fully-electric trucks could capture a significant share of sales as early as 2030 and the impact this would have on energy markets. Our latest research reveals that eTrucks could account for 15% of global truck sales by 2030, with favorable segments like urban light duty trucks reaching sales as high as 25-35% in China and Europe. This is based on adoption curve scenario modeling for the US, China, and Europe and incorporates the trends of three main drivers for electrification. Three drivers determine the attractiveness of eTrucks. The first driver for eTruck attractiveness is the cost parity of these
34 TRUCK&FLEET ME JULY 2018
trucks with diesel alternatives. Once eTrucks have lower total cost of ownership (TCO), many commercially driven business owners are expected to switch their fleets. The second is electrification readiness, which includes the availability of models on the market and supporting infrastructure, both driven by technology developments and actual investments/production. Thirdly, local and national regulations are enabling a supportive environment, in the form of stricter emission targets and (local) diesel bans. The future of the truck market can be analysed by assessing 27 truck segments with their own dynamics and average cost parity range. A few key drivers have a significant impact in terms of TCO (per km or mile) between diesel trucks and eTrucks, including battery size and cost, daily driving distances, electricity consumption, and the fuel price differential (i.e., electricity versus diesel). For
each segment, the assumed battery size must match the daily average range, with slight overcapacity to deal with capacity degradation over time. In practice, the exact point at which cost parity is reached will depend on application specifics, such as range and typical routes. Our analyses indicate that the majority of commercial vehicles can reach cost parity with diesel-powered trucks within the next 10 years, assuming we see continued improvements in battery cost and power density. The most cost-effective application seems to be in the light duty truck (LDT) segment that drive a relatively constant distance of 100 to 200 kilometer per day, which is a sufficient range but avoids battery costs being too high. This segment is expected to reach cost parity with diesel in Europe between today (regional application) and 2021 (urban application). For cases like parcel delivery and small retail delivery, we see a clear economic rationale for operating electric trucks as soon as they are on the market. The DHL case illustrates how specific applications with small battery requirements might have already reached cost parity. The heavy duty truck (HDT) segments will be the last to reach parity, with 2027 for at-scale regional applications in Europe. Other regions and applications will reach cost parity beyond 2030. Regional characteristics determine the different timing of when cost parity will be reached in Europe, the US and China. In the US, cost parity will be later than in Europe, caused by local energy prices (lower price differential between diesel and electricity) and larger battery requirements due to different driving dynamics (higher average speeds and heavier loading). Cost parity is expected latest in China, due to the availability of cheap internal combustion engine (ICE) trucks. Future regulation may increase the cost of ICE trucks in China, but this is not incorporated in our TCO analysis. Typically, a specific segment can reach cost parity two to five years earlier compared to the average use case with some optimisations. For instance, fleet operators can move the cost parity point closer by introducing intra-day charging as it allows decreasing the battery size, compared to the average use case where we assume only overnight charging. Additional gains can come from ensuring a high vehicle utilisation rate and increasing fuel economy, by, for example, avoiding congestion, limiting air-con options, and limiting acceleration.
While cost parity with diesel is close or has already been achieved for specific applications, a large-scale switch requires a sufficient number of eTrucks on the market and adequate charging infrastructure. Supply of eTrucks will likely be the bottleneck for freight transport electrification in the next few years. This will change as new models are launched and production comes online. Several established OEMs have reported that they are developing their first eTruck models and are making significant investments in R&D. The first models on the market are expected in the LDT segment, where differences with passenger cars are the smallest. Along with diesel regulations and customer pull, the introduction of challengers like DHL’s StreetScooter Work XL and Tesla’s Semi will undoubtedly accelerate OEMs’ decisions to build an eTruck portfolio. The other element of electrification readiness is charging infrastructure. We expect that early adopters will mainly charge their fleet overnight at their own depots or warehouses. Thus, they will not be dependent on public infrastructure. The inability to charge while on the road means battery size needs to match daily range, which pushes vehicle cost up. However, once eTrucks become more mainstream, we expect the roll-out of supercharging infrastructure at distribution centers and along the main highways, enabling long-haul “refueling” along popular routes. Regulation could accelerate eTruck proliferation beyond the levels expected from reaching cost parity alone. Important regulatory measures include tightening emissions targets for carbon dioxide (CO2) and oxides of nitrogen (NOx) and the likely introduction of diesel bans in many urban areas around the world. A shift away from diesel-fueled conventional ICE vehicles also seems a natural way for countries to meet their commitments to reduce CO2 emissions under the Paris Agreement. These regulatory forces could lead to a relatively rapid increase in the sales of electrified commercial vehicles. Especially, city diesel bans could have a material impact, as they will force OEMs to consider eTrucks in their portfolio, whereas complying with other emission regulations can often be done with improvements in aerodynamics or ICE efficiency. Estimating the future uptake of electric vehicles requires a synthesis of the three
JULY 2018 TRUCK&FLEET ME 35
factors driving electrification, combined with a perspective on the switching behaviour of truck owners based on perceived risks and operational challenges. Our analyses indicate that eTruck uptake is particularly fast beyond 2025, driven by rapid TCO improvements from battery cost reductions, expected regulatory support, and reduction of perceived risk as operational challenges, like adequate charging infrastructure, are addressed over time. We expect the first eTrucks to be sold at scale in the LDT segment by 2020. The delay compared to their early cost parity is due to the limited availability of eTrucks on the market in the short-term. The MDT segment is mostly active in urban and regional applications, which will reach cost parity early as well. Uptake of eTrucks in MDT follows shortly after LDT as cost parity is reached a bit later due to larger battery requirements and lower fuel efficiency. Adoption in the HDT segment will be the last because of later cost parity, and because HDT predominantly operates on long-haul routes where charging infrastructure will take longer to establish. We expect the largest share of sales of eTrucks in 2030 to be in Europe (with 21 and 29% of total truck sales for the early and late electrification scenario respectively), followed by China (11 and 24%) and finally the US (8 and 13%). This translates to an 8-15% share of global sales as adoption in other regions is expected to be limited until 2030. The differences in sales projections between regions are mainly driven by differences in TCO and anticipated regulations. In Europe, where cost parity will be achieved earliest, additional regulation could also drive higher uptake in the early adoption scenario. In China, we expect uptake to be driven by an anticipated push from the government, especially after China announced mid-September to consider setting a deadline for ending sales of fossilfuel powered cars. Uncertainty about new regulations lead to a larger range of eTruck sales share between the scenarios in China. The US will lag behind the other regions, because relatively low fuel costs mean the advantage gained from using electricity is less significant, while the regulations in place focus on the improved fuel efficiency of diesel trucks instead of a shift to electric. Overall, the switching behaviour towards electric vehicles is expected to be faster for fleet operators than for consumers who are considering electric passenger cars. There are two main reasons for this. First, commercial vehicle owners are more focused on TCO than passenger car owners when making 36 TRUCK&FLEET ME JULY 2018
DIFFEREnCE bETWEEn DAY AnD nIgHT To avoid rush-hour and day-time traffic, eTrucks could enter the city during the night. This can be done with an eTruck because it is silent, while diesel trucks are usually not allowed to enter city centres at night because they make too much noise.
supply of eTrucks will likely be the bottleneck for freight transport electrification in the next few years. This will change as new models are launched and production comes online”
THE ETRUCK SToRY Up To noW When DHL decided in 2013 that it wanted to upgrade its fleet to electric powertrains, it could not find a suitable vehicle or an original equipment manufacturer willing to develop one. So, they decided to develop a vehicle themselves. With investment from DHL, StreetScooter— a German university startup — designed a fully electric van and now offers three different models. More recently, DHL teamed up with an original equipment manufacturer (OEM) to develop a larger electric delivery van. While the weight of these vans is just below the light truck classification (3,500 kg), it clearly indicates the viability of electrification for commercial purposes. With the launch of Tesla’s Semi, an electric tractor, in October 2017, the first electric truck (eTruck) will enter the heavy duty truck segment.
purchasing decisions; they often own multiple vehicles, and the need to reduce operating costs in the competitive logistics sector makes eTrucks attractive. Second, the trucking sector experiences relatively rapid fleet turnover (typically between three and six years; twice the rate of private owners), which enables quicker adoption once switching begins. While we see strong indicators for fast adoption, there are still several challenges to solve before eTrucks are widely adopted. Firstly, determining TCO is not always straightforward. To capitalise on TCO benefits, owners need to incorporate uncertainties and calculate the point at which eTrucks begin to outcompete diesel in their particular set of circumstances (e.g., how to deal with variability in driving distances across a fleet of vehicles). Secondly, investments are higher. Owners need to be willing and able to pay the higher upfront costs for a new eTruck, which will take time to recoup. Thirdly, operational flexibility is more limited. Freight operators with variable routes and mileage are unlikely to benefit in the same way as those able to closely match battery capacity and daily range requirements. Fourthly, the operational risks are also new and unknown. Although battery electric vehicle technology is becoming more mainstream for passenger cars, the technology for trucks is still relatively unproven. Reliability could initially suffer from start-up issues, although expectations are that reliability will ultimately outcompete that of ICE trucks. Finally, new technology might require some getting used to. Drivers might initially run out of power, as they may not stick to recharging schedules or know how to conserve energy. OEMs will likely need to train truck operators to operate these new technologies adequately. Even though trucks represent only ~5% of the global vehicle stock, they make up more than 20% of road transport fuel demand due to their high fuel consumption and mileage. Trucks account for over one third of global diesel demand, nearly 9% of global liquids (oil) demand, and ~3% of total global energy demand. Any impact on diesel use by trucks will have a significant impact on overall diesel and liquids demand. However, it may take some time for the impact of electrification to be felt, because the majority of diesel is consumed in the heavy truck segment, which is expected to be the last to switch to eTrucks. The impact of truck electrification up to 2030 on total oil demand is, therefore, expected to be rather modest. Without eTrucks, diesel demand would be expected to continue to grow modestly over the next few years due to population and macro-economic growth in non-OECD regions and as additional fuel efficiency
ELECTRIC TRUCKS gET READY To TAKE oVER Electric trucks could significantly contribute to the reduction of air pollution in European cities. Two flagship European projects, in which FIER Automotive is actively accelerating the switch to sustainable transport solutions, show e-trucks are getting ready to take over from diesel-powered trucks. By 2030 all forms of mobility in major urban centres in Europe have to be essentially CO2-free, according to the European White Paper for Transport (2011). Because Electric Freight Vehicles (EFV) are expected to make a major contribution to this, the European Union flagship project FREVUE was launched. During FREVUE, in which FIER Automotive was responsible for the total cost of ownership (TCO) calculations of the vehicles in Rotterdam and Milan, 70 eTrucks of 9-18t started operations. Eight major cities across Europe participated in the project. electric Green Last Mile (eGLM) started in 2017 and introduces the production and implementation of 40t-50t electric trucks to be used for ‘Last Mile’ transportation. eGLM is a EU-funded INTERREG-project and brings together logistics companies from the Dutch province of Limburg and the neighbouring German state North Rhine-Westphalia. The project, of which FIER Automotive was one of the initiators, puts eight to ten full eTrucks on the road. It is supported by the involved regional governments, the EU and lead-partner LIOF, a Dutch investment and development company. FIER Automotive was able to help both transport companies and truck manufacturers to bring electric trucks to the road by bridging the TCO-gap.
improvements for ICE trucks reach the technological limit in the next decades. Although it will take time for higher sales to increase the proportion of eTrucks in transport fleets, our research shows electrification in the EU, China, and US causes a tipping point and reverses the global trend of growing diesel demand in the truck sector before 2030. Beyond 2030, the continued uptake of eTrucks could displace up to 3.5 million barrels per day by 2050 (the equivalent of removing 40% of today’s demand from trucks) and even more in higher uptake scenarios Until 2030, the additional power demand from eTrucks is small compared to the expected incremental demand from buildings, industry, and other transport, including electric passenger cars. By 2030, we estimate that electricity demand for eTrucks will be ~30 TWh, representing less than 0.3% of the global electricity demand. Beyond 2030, electricity demand from eTrucks will grow rapidly, exceeding 1,000 TWh just before 2050 (or ~3% of total projected electricity demand). The main challenge for utilities will be how to deal with demand in new locations during peak periods. This will require local grid upgrades around new offtake points, such as those along major highways and in industrial zones for overnight charging. Because motorway stopovers are often located in remote areas, this might prove a challenge for utilities, local governments, and commercial players. In very remote areas, the installation of batteries could be an
a few key drivers have a significant impact in terms of Tco between diesel trucks and eTrucks, including battery size and cost, driving distances, electricity consumption and fuel price”
alternative to expanding the grid, especially in combination with renewables. Beyond 2030, we expect smart charging software in vehicles and charging stations to be in place. This will reduce charging during peak hours. While the initial impact of eTrucks on diesel demand is modest, as we move beyond 2030 the outlook is more significant and will require the actors involved to rethink their current strategies. National and international oil companies will experience reduced demand for their product; fuel retailers will see their business model dramatically disrupted, requiring a redesign of fuel stations. In the power sector, grid or decentralised generation and storage investments may be needed to capture the additional electricity demand opportunity, while decommissioning of older power plants might need to be postponed in OECD regions to accommodate higher peak loads in the evenings. Once the eTruck sector begins to mature, the transition could be rapid and opportunities for innovative partnerships and new entrants might quickly dry up, as established OEMs battle for market share. It will be electrifying to see how this disruptive force will change the reality for the freight transport sector. Will new challengers gain significant market share or will established players anticipate timely and be the winners? This report was authored by Christer Tryggestad, senior partner in McKinsey’s Oslo office, Namit Sharma, partner, Jasper van de Staaij, solution manager, and Arjan Keizer, a specialist in McKinsey’s Amsterdam office.
FREE To ExpERIMEnT Transport companies must be able to experiment with e-trucks. This first phase is very important for adaptation of the technology, because it enables transporters to negotiate with local governments about the time window they can use to deliver the goods.
JULY 2018 TRUCK&FLEET ME 37
Smart city transportation tops the agenda at the 3rd UITP MENA Transport event
UITP: A regIon geTTIng smArTer
ignitaries from across the region shared their vision for smarter transportation at the 3rd UITP MENA Transport Congress & Exhibition 2018 held in Dubai. HE Mattar Al Tayer, director-general and chairman of the RTA told delegates at the 3rd MENA Transport Congress & Exhibition 2018 that the emirate is: “Achieving the happiness of public transport users requires cities to be people-friendly and capable of responding to their needs. It also requires bringing happiness to employees to be able to bring happiness to customers. It requires designing mobility packages that suit public transport riders through benefiting from AI, big data and automation besides providing environmentfriendly transport and promoting the culture of public transport among students.” 38 TRUCK&FLEET ME JULY 2018
HE Abdullah Belhaif Al Nuaimi, minister of the Infrastructure Development, UAE, was the keynote speaker during a parallel session reviewing public transport projects in the MENA region. The session was held in Zabeel 4 Hall, Dubai World Trade Center; the premises of the Congress hosted by the Roads and Transport Authority (RTA) in Dubai and the UITP featuring huge global participation. “Transportation is a key driver of development and has a strategic economic role through the Gross Domestic Product as well as the direct and indirect financial returns. It also has a social role in contributing to the development of cities and creating job opportunities. The development of the transport sector in the UAE has contributed to facilitating the movement, reducing transportation costs & the number of accidents, and completing the modern road network. It also encourages industries
Unfortunately, we build cities and then think about public transport. We are now trying to reconcile the two”
based on the needs of the sector such as concrete barriers, steel columns, paints and signs as well as commercial exchange. “The development indicators in the transport sector include expenditure on the transport sector during the last five years, the reduction in accidents in the UAE, the percentage of population connected to the road network and the budgets allocated for transport in the five-year plan. “The UAE is striving to be Number One in all international competitiveness standards for roads and infrastructure, having achieved first place in road quality, fourth in quality of infrastructure, fifth in infrastructure and 13th in logistics performance. The session, which was attended by Tayer, and several officials, revealed mega projects in the MENA region worth $106 billion. Participants expressed their anticipations for future investment opportunities in
the MENA region including bus and train operators, and other mass transit companies in the region. Khalid Al-Hogail, president of UITP (MENA), and managing director of SAPTCO in Saudi Arabia, who chaired the session, asked: How can we align the political decision with community visions? How can we provide funding for projects? How can we shape the future of our cities to meet the aspirations of our peoples? "We look with pride and admiration at the experience and achievements of the UAE, especially in the field of roads and transport," he said. "What the UAE provides starts as a dream, then turns into a reality, and later becomes a necessity.” HE Hisham Arafat, Minister of Transport, Egypt, also spoke during a parallel session exploring public transportation projects in the MENA and gave his support to the vital role of the UITP in the development of sustainable urban transport. He praised the theme of the Congress: "Pioneering for Customers Happiness", a clear testament to RTA’s efforts to bring happiness to customers as well as Dubai visitors from various parts of the world. “The UAE government’s keenness to appoint a minister of state for happiness illustrates the importance of transforming the concept of happiness from a vision and hope into a reality. Egypt has witnessed unprecedented efforts in recent years to achieve sustainable economic development. The strategies adopted contributed to construction attracting investments in a healthy climate in areas of infrastructure development. The transport projects undertaken bear reference to the strong opportunities in Egypt and the investment climate in specific projects, especially in the railway sector and urban transport in cities. "Our rail systems currently serve 3 million riders per day, and I hope to transport 10 million riders per day. We have one of the oldest rail and metro networks in the region, but we are working to upgrade it,” he added. Saudi Arabia's deputy minister of transport, Saad Al-Khaleb, said, “The Kingdom's vision includes benefiting from the huge human and natural resources it possesses and renewable energies. A strategic partnership must link the public and private sectors. The Kingdom of Saudi Arabia currently hosts about 8 million pilgrims and the plan is to up the capacity to receive 30 million visitors for Hajj and Umrah annually. This warrants the development of ambitious
The development of the transport sector has contributed to reducing transportation costs and the number of accidents, and completing the modern road networks”
plans of transport networks within and between cities and airports. The King Abdul Aziz Airport receives 16 million passengers annually, and this number will rise to up to 30 million in the future.” Rumaih Al Rumaih, president of the Public Transport Authority in Saudi Arabia, said: "Unfortunately, we build cities and then think about public transport. We are now trying to reconcile the two. We are starting to make public transport gradually grow to meet people's aspirations. We will not be happy unless we succeed in convincing community members to use public buses. We have phased out old buses and brought in new sophisticated ones. Alwaleed Al-Akrich, deputy head of programs and projects, and the Supreme Authority for the Development of Riyadh, Saudi Arabia, spoke about the transport projects in Riyadh, especially the Riyadh metro project. He noted that the population of Riyadh is approximately 6.5 million with most of them aged under 30. Abdul Mohsen Ibrahim Younes, CEO of Rail Agency, RTA, concluded the session by reviewing the key stations of Route 2020. He stated that the organisation of Expo 2020 in Dubai was a strategic event for the whole region, not only the UAE. He added that the event would attract about 25 million visitors during a six months period. It has prompted the RTA to develop a specific strategy for transporting 50% of visitors on public transport means. Mohammed Obaid Al Mulla, RTA Board Member and Chairman of the Higher Committee of MENA Transport Congress &
Exhibition, said, “The Congress has attracted more than 2000 participants and visitors from the MENA region. They shared ideas and practices of cities of the region facing similar challenges with the aim of providing integrated public transport in the region. The Congress hosted 85 speakers from 21 countries and 49 exhibitors from 17 countries. The event attracted 36 sponsor companies. “The Congress witnessed the signing of five MoUs, and 200 students from 18 schools were invited to attend. More than 200 drivers and bus conductors were trained on safe driving. The Congress hosted the 4th World Hackathon in partnership with youth for public transport (Y4PT), where 45 students from 21 countries came seeking to develop innovative ideas.” “Over the past three days, the Congress discussed several topics including the integration of mobility and land use through the establishment of multimedia priorities to ensure the smooth movement of pedestrians and cyclists to make cities happier and liveable. Discussions also covered the role of technologies in facilitating public transport mobility, and developing business models for financing public transportation infrastructure,” said Al Mulla. He stressed the importance of the smart urban mobility in maintaining a premium position in transforming cities into smart cities. “The share of public transport in people mobility in Dubai has grown significantly in the last ten years, from 6% in 2006 to 16.5% in 2017. The RTA aspires to push this share to as much as 30% by 2030; which requires learning platforms to share best practices and the latest trends of the in industry,” added Al Mulla.
ThE wAY forwArd for PUbLIc TrANSPorT Discussions covered the role of technoloy in developing public transport mobility, and creating business models for financing public transportation infrastructure.
JULY 2018 TRUCK&FLEET ME 39
ABOVE THE CLOUDS
Paramount Miami Worldcenter turns to Dubai for its flying taxi service
aking its inspiration from Dubai, the developer of one of Miami’s most prominent real estate developments, Paramount Miami Worldcenter, says it is preparing for the future of urban aviation by making modifications to the rooftop design of the tower to accommodate a 5,000-square-foot Skyport on top of a new 60-story downtown Miami high-rise. Dan Kodsi, a veteran developer, with a masters in urban planning and background as a recreational pilot, has built more than 6,000 units over the course of his 30-year career. Today, he is readying his stateof-the-art future-forward residential tower, with the ability to convert its rooftop into a Skyport for vertical takeoff and landing (VTOL) aircraft, also known as passenger drones, or what some may call “flying cars.” “The future of transportation is here within the next 10 to 15 years and urban aviation is closer to
reality than you might expect. The flying vehicles will use airspace to alleviate transportation congestion and traffic on the ground for quicker daily commutes, and cleaner air around the world. These vehicles are more like a helicopter, but much quieter, run electronically and are environmentally friendly,” said developer Dan Kodsi. “While the industry still has many regulatory hurdles to clear, we are excited to be at the forefront of urban aviation with what can one day be the first residential Skyport in Miami.” One day, residents could seamlessly ride a sleek glass elevator up to the luxury tower’s private rooftop, where they could be picked up or dropped off by on-demand aircraft. Dubai’s Road and Transport Authority (RTA), in partnership with Chinese firm Ehang, carried out the first test run of an autonomous aerial vehicle (AAV) last year with the launch operations to take place very soon.
Ever since UBER Elevate announced it would begin testing its urban air taxis in DallasFort Worth, Los Angeles and Dubai in 2020, a galactic style race erupted from tech, aircraft manufacturers and automakers both domestic and international to develop flying cars. “Imagine traveling from Miami to Palm Beach – a drive that takes the better part of two hours – in about 30 minutes. That stopand-go traffic to the suburbs could become a burden of the past for residents,” said Kodsi. Paramout is located inside the massive Miami Worldcenter project in the heart of downtown Miami. Units range in size from 1,180 to 2,350 square feet, with prices starting at $750,000. Construction crews from general contractor CoastalTishman have already reached the 47th floor. Paramount is on course for its top off in summer 2018, and building completion anticipated for spring 2019.
NEXT ISSUE: T&FME TRAvELS TO GOTHENbURG TO SEE vOLvO TRUckS UPDATE TO ITS DRIvING TEcHNOLOGY, AND MUcH MORE!
40 TRUCK&FLEET ME JULY 2018