Unilever-Haus in Hamburg’s HafenCity district has been Unilever Deutschland’s HQ since 2009.
Every day, 2.5 billion people around the globe use Unilever’s products. The Dutch-British corporation markets over 400 different brands, making it one of the most important brand manufacturers in the world. At least one Unilever product can be found in 70% of German homes, thanks to smooth-running supply chains. To make sure everything arrives just in time, logistics experts such as DB Cargo start their work long before an actual delivery is scheduled to take place.
In this day and age, few things would seem more unnatural than the idea of going to a supermarket and seeing nothing but empty shelves. Most people simply take it for granted that the things they want to buy are always ready and waiting for them. Consumer goods in particular are assumed to be always available. If the things we use each and every day aren’t available, the impact is instantaneous. This is particularly true of foodstuffs. These expectations represent a tremendous challenge for manufacturers and logistics companies alike, and they can only address this task by working together.
Despite being Europe’s largest rail freight operator, even an experienced logistics service provider like DB Cargo knows that transporting products for one of the world’s largest consumer goods manufacturers is a complex undertaking. As a result, experts from each side meet for detailed discussions when preparing each new transportation service. One result of this came in November 2018, when DB Cargo started operating a new link for food items on the corridor between Heilbronn and northern Germany on behalf of the brand group. Heilbronn is Unilever’s central foodstuffs distribution hub in Germany.
“For us, the Heilbronn base is the central point of our food business in Germany, so we need a reliable logistics partner there.”
- Christian Heinrichs, a logistics manager at Unilever Deuschland
The Heilbronn hub has been in operation for 46 years. A few years ago, the corporation started stepping up the volume of freight earmarked for distribution by train.
For the new link, this meant transporting items such as the packet soup and potato dumplings produced by familiar Unilever brands such as Knorr and Pfanni. Even though these goods are not highly perishable, the supply chain has to ensure smooth movement across a large number of different locations in order to meet the journey time constraints of the retail sectors. Karsten Rotter is a key account manager at DB Cargo, and he brings the full range of his experience as a consultant to bear in this logistical challenge.
Collaborative consulting from the very beginning
Rotter says: “As part of this logistics solution, we not only handle the rail-based transportation of goods from the Heilbronn railport to DB Cargo’s logistics centre in Maschen, but we have also assumed responsibility for transshipment and for managing first and last-mile transportation by lorry. We are in charge of everything from the moment freight enters our system at Unilever’s base in Heilbronn to its arrival at the distribution centres used by the group’s various retail customers and supermarket chains. What Unilever has entrusted to us is something where time and volumes play a central role.” At Unilever Deutschland, Johannes Herrmann is responsible for customer transport services. He says: “We started negotiations with DB Cargo back in 2012. Building on those talks, we collectively designed an intermodal concept that was, at the time, unique in the fast-moving consumer goods (FMCG) segment. Quick communications, little bureaucracy and an atmosphere of partnership made it clear that we had made the right decision, which is why we want to stick with this concept and widen its scope.”
The new contract saw DB Cargo take charge of transporting full and partial container loads from the food distribution centre in Heilbronn to the collection warehouses used by Unilever’s customers far way in the northernmost regions of Germany. “Working on their own, the various retailers then handle the business of restocking their outlets – these could be a mid-range supermarket in Kiel or a discount supermarket in Hamburg”, says Rotter.
Once a day, the DB Cargo staff working with Unilever get the group’s transport orders, which detail the specific needs of different retail customers. At its food distribution centre, Unilever performs order picking and gets the pallets of items ready for collection. “Our contacts at the Freilassing control tower then use online platforms to reserve a slot for lorry deliveries to the retail customers’ various collection points”, Rotter elaborates. At Maschen, DB Cargo can rely on a pool of experienced hauliers that each have specific postcode-based catchment areas.
The unloading deadlines at the retail outlets, i.e. when a lorry must definitely reach its destination, are of central importance if the goods are to be accepted. “The only reason we can plan lorry deliveries from Maschen when taking an order on is because the main leg of the delivery process by train is so reliable and stable.” Volumes vary month by month over the course of the year, which poses another challenge for operations. “When asparagus season starts in Germany, shops need to have enough of Knorr’s hollandaise sauce on the shelves, so we suddenly start shipping far more of this particular product”, explains Heinrichs. “Staff at the control tower tackle these issues each and every day”, Rotter declares proudly.
These coordinators not only take individual orders of different sizes and assemble them into complete loads for dispatching by freight wagon, but they also make use of parallel lorry services for some freight if this is necessary. It is precisely this all-encompassing logistical challenge that Karsten Rotter likes so much about Unilever: “Most people only think we are in the rail freight business, but this solution gives us the chance to show that we deploy the full range of transport services.”
Because every second counts in the FMCG sector, the transport concept created by Rotter and his colleagues relies on fast, overnight rail connections to cover the largest section of the delivery route.
Overnight connections at the core
The procedure follows a routine. Unilever’s customers place their orders with the food distribution centre in Heilbronn. The items are picked at the warehouse in the morning and brought to the Heilbronn railport by lorry. There they are transferred to freight wagons, before the train departs for Maschen at about 6 pm. It travels through the night and arrives at its northern terminus in the early afternoon. The goods are loaded onto lorries for the last section of the journey to the retailers’ distribution centres. Each freight wagon can accommodate 44 pallets, so the 132 pallet positions provided by three freight wagons makes it possible to optimise the transportation of a host of different consignments. This corresponds to the same volume as four lorries, and there are five departures every week.All in all, it means a substantial reduction in road traffic. Karsten Rotter: “
The nighttime connection that this classic door-to-door solution uses is what makes it possible to deliver freight within the 48 hours stipulated by customers.
– Karsten Rotter, Key Account Manager, Sales & Operations
Center Consumer Goods, DB Cargo
48 hours for goods to get to the shelves of customers’ distribution depots? For logistics operators, time is of crucial importance in the FMCG segment, but everything runs smoothly for Unilever. Johannes Herrmann can confirm this: “We are able to plan deliveries by train with almost as much flexibility as lorries, but trains are considerably more reliable when it comes to avoiding traffic problems and providing transport capacities.” For DB Cargo, the Unilever service represents another step towards becoming the lead logistics provider (LLP) that handles the entire logistics chain and can easily resolve disruptions to its just-in-time deliveries by falling back on lorries.
“Time really is of the essence when goods are dispatched to retailers. We have to be fast if we want to keep up with things, but this is not a problem thanks to the multimodal logistics base in Maschen.”
- Stephanie Reinert, head of DB Cargo’s sales and operations centre for consumer goods
Maschen logistics centre: a hub for services
With an excellent location in the heart of Europe’s largest marshalling yard, the Maschen logistics centre delivers quick processing and a range of other services that benefit Unilever as a customer. Rotter elaborates: “Occasionally, a pallet can be damaged during transportation from Heilbronn to Maschen, such as during the process of loading or unloading. We can rectify this in Maschen by ensuring that loading is done correctly or by re-wrapping the pallet so that the goods are in flawless condition when they arrive at the retailers.”
In addition, incoming freight can be temporarily warehoused on-site if necessary. Rotter says: “Normally, we can’t do something like this because of timing. This logistics centre focuses purely on cross-docking, i.e. goods arrive and then leave again straight away on lorries. But if need be, we can hold onto freight for several hours.”
Sustainable service for positive CO2 balance by 2030
Unilever had one key requirement for the new connection: the transport had to be sustainable and economical at the same time. The group stipulated that this factor had to be included in the preliminary consultation process. When designing the tailored logistics concept, this specification underpinned the work of Karsten Rotter and his colleagues: “Working with our colleagues at the control tower, we came up with a customer-specific solution for Unilever that optimised loading capacities.” The solution works so well that the corporation is now consigning more freight to rail services and, as a consequence, cutting back on its use of lorries.
Assessing the situation, Reinert says: “The multimodal transport solution we provide consists of lorries for the first and last-mile sections and trains for the main leg of the journey. Looking at the total distance covered, our transport chain generates substantially less CO2. Using a rail connection for the main stretch reduces CO2 emissions by about 77% when contrasted with a comparable road haulage system.” By 2030, Unilever aims to have a positive CO2 footprint for its production and administration activities, while halving the environmental impact of the manufacturing, transportation and use of its products. Rotter reports that the rail strategy has been received very well in the larger market and among other consumer goods manufacturers. This, he believes, confirms that Unilever’s decision was the right one.
More than just driving a train
The transport provided for Unilever shows that work at Europe’s largest freight operating company begins well before the wagons roll. It all starts with consultation. For the logistics experts at DB Cargo, the end of the line often marks the start of the additional services. That is because service is key from start to finish. Thanks to its four pillars and complete range of services, DB Cargo has become an essential part of its customers’ supply chains.