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China – both a threat and an opportunity

“China is laying the foundation of an efficient transportation and logistics industry, and is already at the leading edge of technological developments and technology take-up,” said Mats Harborn, employed for many years at Scania in China, at the HCT (High Capacity Transport) conference arranged at Lindholmen Science Park on August 29.

“We see China as both a threat to competition and an opportunity,” he continued. “China has a huge amount of ideas and technology that we can integrate into our own systems.”

 

harbour.jpg

This was the fifth time CLOSER – the neutral collaboration platform and project workshop for increased transportation efficiency – had been organized at the conference. High Capacity Transport means the introduction of longer and heavier vehicles and other vehicle combinations than currently permitted.

Just like last year, the conference had a Nordic edge. Mats Harborn was the very first speaker. He works for truck manufacturer Scania in China and said that the entire world needs to keep its eye on what is going on in that country.

He believes that the Chinese transportation and logistics industry is being developed from two levels:

  • China is learning to crawl. 
    This involves, for example, having regulations in place that must be strictly followed so no one can gain a competitive advantage by cheating using poor equipment, overloading, etc. It is also about adapting the infrastructure and having the correct standards to move towards multimodal transportation.
  • China can already run.
    This means making use of new digital technology, for example, sharing data to fill vehicles in both directions.

“Many major technological advances are being made in China now,” says Harborn. “China also has the world’s largest domestic market. That means that if a company – Chinese or foreign – gets hold of the Chinese market, it also has the potential to dominate globally.”

Transportation efficiency involves, for example, using resources as much as possible and Harborn was able to present interesting figures:

“Most Chinese truck transport companies use their equipment for about 80,000 km per year – but the best ones achieve up to 500,000, giving them an enormous competitive advantage.” Accordingly, the consolidation that is set to take place has already begun. Using effective planning, the best ones will eliminate those that have too few transports and therefore also unit costs that are too high per tonne kilometer.

In Europe, the average is 180,000 kilometers per year, which is far below the best-performing Chinese companies.

“We need to ask ourselves why this is so. The answer is partly to be found in the driving regulations,” according to Harborn. “Using the new technology that we are now talking about and which permits a driver to count the time in the cab as rest time whenever the technology takes over certain stretches, we will also be able to increase the degree of utilization in Europe.

Regardless of the job we do, we must all relate to what is happening in China,” said Harborn, who subsequently responded to some interview questions:

Is China already taking a large lead over us?

“Both yes and no,” said Harborn. Our competitive advantage is that we have common sense. You can use technology in absurdum but it won’t help. It is important to use technology in a smart way and to begin with the low-hanging fruit. We must do the easy things quickly and push the difficult aspects to the future.

What is easy and what is difficult?

“It is easy to comply with regulations and to use longer vehicle combinations. And using renewable fuels as early as possible. In this way, we can considerably reduce the carbon footprint from the transport sector. This applies as much in China as in the rest of the world.

“Looking a little further forward,” Harborn continues, “I believe that we can use digitalization to achieve better route planning. And in the slightly longer term, I believe that autonomous vehicles will increase the degree of utilization of vehicles so that they will be able to cover 200, 300 or 400,000 kilometers per year.”

The conference otherwise broadly reflected the situation for increasing the transport capacity in the Nordic region in various ways. Finland is far ahead and has been conducting ambitious and comprehensive trials using longer and heavier trucks for several years. They also permit heavier trucks, 76 tonnes compared with Sweden’s 74, as well as this being on a larger road network.

As a result of the trials, the Finns are now reviewing their rules to enable them to extend the length of their vehicles. Currently, the country has the same rules as Sweden, 25.25 meters for module combinations on roads. However, there is now a demand to extend the vehicle length to 34.5 meters. 

New legislation for vehicle combinations will have two major effects:

  • Transportation efficiency will increase.
  • Emissions will be reduced.

asplund.jpgFor the past five years, we have been conducting rather large trials in comparison with the other Nordic countries,” said Erik Asplund from the Finnish Ministry of Transport and Communications, who was one of the Finnish speakers at the HCT conference. “We have tested nearly 50 vehicle combinations and are far advanced in the process.”

After his presentation, Erik Asplund expanded on his comments regarding why the current activities are important:

“We need to do this to be able to live up to the rather strict Paris accords – and to address the competition from other regions in the world. During the conference, we heard that China is doing a great deal to enhance the efficiency of its transports and we must be better!

Where are Finland and Europe in relation to China?

“ We know that we are further ahead in terms of heavy vehicles,” said Asplund. “We are doing a little more. But China has excellent resources and if we are good, they can make a copy that is a bit better. 

“ In Europe, we are not as far advanced as China when it comes to electric vehicles. It could take ten or perhaps 20 years for us, but the development is coming.”

Thomas Asp, project manager at CLOSER, led the HCT conference. Afterwards, he said:

“Days like these are important for gathering influences from many different areas. We received many thoughts and ideas from the Nordic countries as well as from China, which is far advanced, for example, with the transport of goods.

“Much of what has been done in the HCT program has been used and forms the basis of the rules that are now in place. For example, the Finns have an enormous improvement in efficiency in being able to drive two trailers instead of one, with a doubling of the amount of goods that can be transported without fuel consumption increasing to the same degree.”

In the HCT program, CLOSER is working to update a schedule for the area and Thomas Asp describes that much needs to be done to further increase transport capacity, for example:

  • Continue to reduce energy emissions.
  • Improve the infrastructure to enable an increase in capacity for heavier vehicles.
  • Review the rules to ensure that it is easy to use a connection or data from vehicles to confirm that they are driving on the right roads, are not overloaded and not driving too fast.

During the conference, the risk was also addressed of goods transports being moved from rail to roads as road transports become less expensive in conjunction with reduced fuel costs and the reduced need for drivers.

“But,” said Thomas Asp after the conference, “Many surveys have been conducted that show that the transfers from rail to road will be marginal. The goods are often adapted for something in particular, so it is seldom that a conflict arises between the modes of transport.” 

All presentations from the day are available here