Energy Efficiency the Key to Successful Freight and Logistics Warehouses

UK – The heart of the freight distribution business lies within the warehouses which receive, handle and deliver onto collecting vehicles all the cargo which flows along the supply chain. This, often less glamorous side of the logistics industry, has however seen some huge leaps in cost savings and efficiencies of operation in the past few years and deserves more than a mention. We look now at a few examples of companies which have been able to adapt, using new technologies to improve efficiency.

One of the areas which is seeing progress undreamt of hitherto is the amount of energy used to power a typical distribution warehouse. The advance of lighting technology has meant a small investment can reap costs back in very little time. One east London based freight forwarding agent provides a typical case study. Last year W E Deane saw a greatly increased demand for its food storage services. Such contracts demand the highest standards of warehouse and equipment cleanliness and the sodium and fluorescent strip lights in situ were not suitable due to the possibility of a shattered bulb or tube raining glass down on the product.

Although protected fluorescent tubes would have solved the problem these are prohibitively expensive and Deane’s discovered that metal LED bulbs offered benefits in every area. Despite a higher initial cost the lamps selected do not shatter when expired and the running costs are far below other lighting. Director Jackie Marsh explains:

”The installation of the new lights was a simple matter for our in house electrician and, despite the cost, we recovered the price of the investment within four and a half months. After a year we have not yet had one of the lamps fail and the added bonus is that, somewhat surprisingly, the quality of the light produced is actually better than the original units.”

According to specialist installers ecolighting, the cost of lighting a typical warehouse unit with old fashioned sodium luminaires makes up 70% of a company’s energy expenditure compared with around 25% which goes on recharging the fuel cells of battery-powered forklifts and other materials handling equipment. The Hinckley based company says a move to energy efficient lighting has allowed warehousing and transport specialist, Paul Ponsonby Ltd, to cut annual lighting costs from £15,035 to £3,030, an annual saving of over 80%. This means that the company will achieve payback of the new installation in under three years.

Another third party logistics specialist, Great Bear, was able to slash its yearly lighting bill from £146,207 to £23,844, a saving of £122,363 (83%) in 12 months. The company’s annual CO₂ emissions were also cut from 799,265 kg to 130,348 kg prompting ecolighting operations manager Stuart Cain to call the return on investment ‘staggering’. Furthermore the tax breaks that are available to companies who install energy-saving lighting make the case for investment even more compelling. Stuart Cain comments:

“The Enhanced Capital Allowances (ECA) scheme encourages businesses to invest in energy saving lighting equipment that meets the performance standards set out in the Energy Technology List (ETL). Lighting products that meet the ETL standards may be eligible for first year tax relief - meaning that you can write off the whole cost of the equipment against your taxable profits in the year that you buy it. This can be very helpful for cashflow purposes, although, of course, it makes sense to get confirmation from your supplier that the equipment meets the ETL criteria before you invest in it.”

Lighting of course is not the only way to save money on energy. From April 2018 a new legal standard for minimum energy efficiency will apply to rented commercial buildings. Currently commercial buildings have an energy efficiency rating that goes from A – G. Under the new law there will be a minimum standard of E and that will mean that buildings cannot be rented out unless they meet that standard. The good news for the landlords of warehouses is the rather imprecise government guidelines which state, ‘an industrial site, workshop or non-residential agricultural building that doesn’t use much energy [is exempt]’, which vague statement presumably means most distribution centres.

Of course the biggest factor in ensuring one extracts the maximum profit from any storage premises is to ensure one uses the space as efficiently as possible, and for many companies this means racking. In past times most freight warehouses employed the same counterbalance fork lift trucks to both offload and reload vehicles and stack goods on any racking fitted. As buildings got larger and racks got higher ever more sophisticated trucks and racking systems have evolved to squeeze the last drop of profit from the available space.

As fork lift technology has advanced it has enabled companies to use racking systems with ever thinner aisles and now a range of machines compete for this developing market. Companies such as Narrow Aisle, makers of Flexi Trucks produce ranges of machines which can work in the tightest of spaces and to extreme heights. The Flexi AC Cold Store truck for example, which will be demonstrated at the forthcoming TCS&D Show (13-14 September 2017, Ricoh Arena, Coventry) is claimed to enable the user to increase pallet storage space by up to 40% compared with a standard reach truck.

Unlike traditional Very Narrow Aisle (guided) trucks, the Flexi AC CS does not require mechanical or inductive wire guidance and, in addition, it does not need special pallet racking, standard adjustable racking is ideal, which means existing racks can be up-cycled during any store reconfiguring process. The truck can operate in buildings up to 12 metres high and with loads up to 2 tonnes and the warehouse floor does not need to be of VNA specification as the Flexi AC CS can work on any standard concrete floor or yard thanks to the stability offered by its four-wheel chassis and large elastic rubber tyres.

Narrow Aisle also supply Flexi HiMAX trucks, nine of which were recently ordered by Howard Tenens, one of the UK’s largest privately owned logistics companies. The supply chain specialist has used similar equipment for over a decade and this latest investment is part of an ongoing programme that has seen the company commit some £42 million to the development of its property portfolio, logistics contracts and systems solutions as well as employee training, in the last three years. The new trucks will be put to work at Howard Tenens’ facilities at Ashby de la Zouch and Sharpness and Mike Jones, General Manager at Howard Tenens Sharpness, commented:

“We have been working with Narrow Aisle for over a decade. They were able to demonstrate flexibility within the 3-year contract that allows us to tender competitively for new business and, in turn, a significant saving was made by trading in older trucks.”

These new trucks were supplied on an inclusive contract rental package that means all planned maintenance, safety inspections and repairs are included in one fixed monthly rental charge ensuring the freight group avoids hidden expenses for the future. The triplex free lift masts fitted offer excellent forward visibility and, when retrieving and putting away pallet loads at the highest level, a high definition LCD CCTV system ensures Howard Tenens’ operators have a clear view, whilst the integrated tilting and side shifting fork carriage eliminates mast deflection. Narrow Aisle’s sales and marketing director, John Maguire, commented:

“Howard Tenens has long realised the space and throughput efficiency benefits that Flexi articulated truck technology brings and we are delighted to be entering the second decade of our relationship with them. These latest additions to Howard Tenens fleet offer the perfect solution for high bay warehouses where fast throughput capability and narrow aisle storage density are required.”

Photo: LED lighting can be an efficient alternative to traditional luminaires.