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Logistics

Toll SPD:  Case Study

BACKGROUND

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

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

HISTORIC SITUATION

Toll SPD run a transport operation to their warehouse facility.

Operation 1:

This operation includes shuttling full container loads of transported product to and from the warehouse plus the Brisbane rail yards and the Port of Brisbane. This service utilizes approximately 25 trailers as well as 5 prime-movers all owned by TOLL.

There are typically 30 container moves each day on average. 1 move is a round trip, either an empty container taken to the rail yards or the port, a full container to the warehouse or a full container to the rail yard or to the port, and finally an empty container back to the warehouse.

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

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

A yard based prime-mover would then shuttle waiting trailer and container combos to and from the loading dock and the warehouse yard to be worked with.

Operation 2:

This operation focuses on long-haul transport with full container loads, to and from the warehouse and the larger regional centres of Australia.

There are typically 10 container moves each day on average. One move is described as either an empty container coming in and a full container going out or a full container coming in and an empty container going out.

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

The TOLL loading docks could handle two trailers at a time. The warehouse operated for 12 hours each day and approx. 4 containers were cycled through the loading docks each hour based on the fact that it took about 30 minutes to empty or fill a single container.

PROBLEMS

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

• They had a lot of money tied up in trailer assets that spent most of their time idle, sitting in a yard as an expensive container stand.
• Whenever a long-haul transport arrived, it would spend on average 3 hours waiting to be unloaded, which was a poor utilisation of both a prime-mover and its driver.
• The Toll yard was a leased premises, and the yard conditions were not suitable for a container forklift or reach stacker which are very heavy pieces of machinery.

MOBICON CONTAINER HANDLING SOLUTION

After discussion with Mobicon Systems about the solutions that a Two Tower Mobicon Straddle Carrier could provide, Toll SPD implemented a new Mobicon System. This enabled Toll SPD to:

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

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

At the same tocken, for any long-haul transport from the large regional centres, the Mobicon Straddle Carrier would remove the container from the trailer, either empty or full, and re-load a new container for transport back to the large regional centre, either empty or full again in the same cycle.

Before

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

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

This meant that the yard prime-mover was no longer required and could be sold.

BUSINESS CASE

The initial financial case included the following:

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

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

Direct Cost Savings (Annual Ongoing Reduction to fixed costs) included:

• Registration of 20 trailers/per annum                                       AUD$16,000
• Insurance of 20 trailers/per annum                                          AUD$24,000
• Trailer Maintenance                                                                    AUD$30,000

Total Saving per annum                                                              AUD$70,000

Indirect Cost Savings (Annual Ongoing Reduction to variable costs):

• Productivity improvement for long haul prime movers          AUD$506,250
• 2.5 hours per container
• 10 containers per day
• 225 days per year
• $AUD 90 per hour

Total Productivity Improvement per annum                          AUD$506,250

Associated benefits from the purchase of a Mobicon Straddle Carrier:

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