Stora Enso charts out new shipping links

by Caroline Jewitt

Stora Enso was all at sea when it came to transport issues following the merger of the two companies in 1998. But the group's think-tank has come up with a revolutionary system that can deliver paper from door to door at the touch of a button

Stora Enso has delighted the media with news of mergers, acquisitions and investments following the link-up of the Finnish and Swedish companies in 1998. Since then, the industry has lapped up news about the group's mainstream business activities, comparing and contrasting them with competitors' movements. But in doing so, many industry watchers may have missed the revolutionary move that the group has made in the transportation of its goods.

Stora Enso's Secus are tailor-made for efficiency

In the early days of Stora Enso, the group used to ship its orders by means of railcars from the various Swedish mills via northern Germany and into Europe. Reels ended up at specialized paper distribution centers and were forwarded to customers by truck within a 300-400 km delivery radius. As the months went by, it became clear to Stora Enso that this single traffic lane was no longer a viable option. The country's rail links via northern Germany were becoming increasingly congested and railcar transportation prices from Sweden to the continent had risen considerably since beginning of the 1990s. Considering that one out of every four railcars leaving Sweden was filled by Stora Enso, and with shipped volumes set to increase, the group wanted a transport system that could cope for the next 20-30 years. Gridlock in the middle of any company's distribution system is far from conducive to happy customer relations. As a result, managers have been forced to look at alternatives that would keep customers smiling as the group expanded further.

Unfurling the blueprints

When the word was out that the paper giant was searching for a new transport system, there was initially a lot of talk and enthusiasm in transport circles. A lot of new ideas were tried out, but the various projects were stuck in the development phase. Due to the lack of available alternatives, Stora Enso took it upon itself to devise a new transport system that it claims is unique (so far) within the European paper industry. Stora Enso christened the new system with the name, "Base-Port".

There are four pillars that support the Base-Port project - automation, tailor-made containers, tailor-made ships and the port of Zeebrugge in Belgium. There are two major advantages of operating a system based on these props - cost saving and customer satisfaction, according to Sven-Åke Johansson, supply chain director at Stora Enso. He explains the rationale behind the new system. "The top priority of using a Base-Port such as Zeebrugge is cost saving," Johansson says. "The cost of transportation is lower as we [Stora Enso] don't have to buy transport services from different operators. We have just one partner for the operations in Zeebrugge - Sea-Ro. On the terminal they do all the work for us," he explains. Since the terminal started up in January 2000, the group has saved millions of Swedish kroner that Stora Enso has ploughed back into the mills, according to Johansson.

The firm that operates the terminal, Sea-Ro, was in the right place at the right time when the project was in the planning stages and is also reaping the benefits of the new system. The company now ranks as one of Europe's top roll-on roll-off (RoRo) freight stevedoring providers and concentrates on handling trailers, containers, new cars and forest products. Since the creation of the company in 1978, Sea-Ro has always been active in RoRo traffic, starting with short sea crossings and then moving into deep sea RoRo traffic in the middle of the 1990s. But when Stora Enso came up with the proposal of shipping to a northern European port other than Antwerp, Sea-Ro's management leapt at the chance to expand and diversify.

Some 23 years after the company started up, Sea-Ro has became a leading European RoRo stevedore and has developed services from exclusive stevedoring tasks to a full range of logistic aspects, according to Theo Milliau, forest products manager at the Sea-Ro terminal in Zeebrugge. Since 1998, the company has further diversified to include Sea-Park, a fully-owned subsidiary, as well as offering value-added activities to the car industry. Sea-Ro has also entered into a contract with Bridgestone-Firestone for the creation of an inner port European distribution center for tyres and, as if that is not enough, entered into a long term contract with Stora Enso. "Now we already handle 1.2-1.5 million tonnes/yr of paper next to a couple of hundred thousand tonnes of woodpulp," Milliau says. The contract with Stora Enso has created two major firsts for Zeebrugge, namely handling forest products and establishing transit/distribution facilities. "Around 60% of the paper cargo received at Zeebrugge is sent on to inland terminals for distribution," Milliau explains. "A further 20% is sent on as deep sea traffic. That's normal. But we also handle 20% of the cargo as warehouse goods, which are then distributed to the end-user as and when required," he adds. "That's completely new for Zeebrugge," he comments.

Nurturing new contacts

From Stora Enso's point of view, the Belgian port was the natural choice of shipping route. Milliau and Johansson both believe that Zeebrugge is just getting into its stride in terms of forest products handling with plans for expanding the Sea-Ro terminal already underway.

One major advantage of shipping goods to Zeebrugge is that reels remain untouched between the time that they leave the end of the paper machine and the point of loading on to railcars in Zeebrugge. Reduced handling minimizes damage to the reels, which in turn leads to customer satisfaction and fewer claim settlements, according to Milliau. Stora Enso's Swedish shipments are routed through Zeebrugge. The group's deliveries from Finland, on the other hand, arrive at the neighboring Belgian port of Antwerp which operates a more traditional handling system. On top of that, he points out that all of the paper handling takes place under cover at Zeebrugge, so there is never any danger of exposing reels to the elements. "The trains come right into the loading bay to minimize the risk of damage to the reels," he explains. In fact, the terminal has 1.0 km of covered warehousing that doubles up as a train drive-through.

Another of the four pillars of the project, automation, is the key to minimal handling and Stora Enso is working toward a fully-automated warehouse management system. Stora Enso gave Sea-Ro instructions to come up with the ideal automated warehouse and the company is well on the way to achieving this goal. Sea-Ro Terminal and LIS of Ninove, Belgium worked together for over 500 hours analyzing Stora Enso's needs and trying to work out the best solution. LIS is a European leader in warehouse management systems and specializes in complex logistics operations. But even with 15 years' experience in almost every industry sector, LIS found new challenges in the Sea-Ro requirements. "They disappeared for four months and came up with the solution that we see here today," Milliau explains. The IT system which runs the Zeebrugge shipping operation is due to come on line at Stora Enso's UK handling terminals in two years and in Finland in five years, according to Johansson.

Lifting the lid on containers

Potential damage to the reels is also limited by the specially designed containers known as Secus, or Stora Enso Cargo Units. A Secu may look like a standard 40 foot container, but has extraordinary dimensions (13.8 x 3.6 x 3.6 m) which allow the group to increase shipping capacity and flexibility, as well as reducing environmental impact. The units can hold up to 80 tonnes of paper, which is far more than the average 22 tonne load that is permitted to travel by road in Europe. Instead of the usual paperwork attached to each container, there is a simple radio tag which stores all the relevant data required by the terminal management to keep track of the Secu.

On top of commissioning the new giant boxes, Stora Enso also ordered three tailor-made ships from Wagenborg. The vessels are shaped specifically for Secus to maximize capacity and minimize in-transit movement and damage in the hold of the ship. Sea-Ro constructed a double-deck pontoon that would allow the Secus to be driven on and off the ship with minimal disturbance to the reels, while limiting the discharging operations to a maximum of three hours (two decks are discharged simultaneously). Another partner in the project, Cobelfret Ferries, is responsible for selling any space that is not taken up by Stora Enso. In general, Stora Enso uses the main and lower decks for shipping Secus and the weather deck is hired out for commercial cargo. On top of that, the Cobelfret Ferries aims to fill each Secu with north-bound cargo for the return journey to Gothenburg in Sweden.

Sea-Ro continues to develop the terminal at Zeebrugge in Belgium

At the moment, the ships cross between Gothenburg and Zeebrugge, where the cargo is loaded into trains destined for France, Germany, Italy, Austria and Switzerland. But Johansson says that Stora Enso has plans to extend the service to other countries with rail links through to Spain and Portugal. Following a successful audit of the concept, the Base-Port system is likely to be rolled-out at other shipping destinations.

Keeping the shipping lanes green

With tailor-made solutions such as the Secus, ships and terminals, Stora Enso is clearly focusing on cutting costs and improving customer satisfaction. But the forest products giant can always be relied upon to consider the impact of its business on the people and natural environment involved in any of its activities. In keeping with the group's green attitude, Stora Enso set out several stipulations that would ensure minimum impact from the system. Some of the environmental aspects include:
• docked ships must switch off their engines and hook up to shore-connection for an energy supply
• crossing times are long enough to allow ships to run their engines at less than full capacity during transit, consuming fuel more economically, using engines more efficiently and reducing emissions
• fork-lift trucks are electric
• all warehouses and cross-docking stations are equipped with sprinklers to prevent fire damage.

Stora Enso is on a roll with its new transportation system

Johansson also believes in extolling Zeebrugge's green virtues. "Zeebrugge allows us to carry out environmentally friendly shipping, which is not always an option in other ports," he says. "There are also problems with many European railways in terms of noise and pollution, but the service from Zeebrugge manages to avoid these," he explains.

The employees are also included in the environmental equation. Stora Enso insists that all of the forklift trucks at the terminal are designed with the operator in mind. For example, there is in-cab heating, as well as ergonomic seats and steering wheels.

Stora Enso has such confidence in the new system, that the company's bosses are ready to roll out the concept at PPI's 14th Transport Symposium which is being be held in Gothenburg, Sweden, on October 1-3, 2001. "Our aim is to help everyone join the Base-Port system," Johansson says. With cost saving at the heart of most business plans, it is likely that Stora Enso's revolutionary transport concept will interest even the most traditional forest products companies.