Published on March 23rd, 2014 | by Daniel Sherman Fernandez0
ASIA’S FIRST INTEGRATED ROAD NETWORK
The idea of developing an interconnected road network spanning across an entire continent may seem like “mission impossible”, but an express company has done just that to ensure timely delivery of goods in a fast and cost efficient manner. We go behind the scenes to look at the first ever Asia Road Network.
To succeed in life is to have the right network and connections.
This adage may sound familiar in terms of business deals, denoting how a good “network system” within the corporate world can be good for business. Having the right connections can help an individual move up in their chosen career. It can help to boost sales and more often than not, can get deals going which would otherwise be seen as impossible.
But there may be more truth to this maxim than looking at a “network” as a connection between people. What if it were a connection of roads – one that would bring about an interlinked system of streets, byways and highways, to ensure quick and efficient transportation between countries within a continent to improve efficiency while keeping costs down, all at the same time?
This was the exact question posed by TNT Express. Developing such a system would mean a more effective alternative to more expensive air freight and slower-moving sea freight. And to establish such a network successfully meant to find the “holy grail” of sorts to a more efficient system for the delivery of consignments. This eventually led to the development of the company’s Asia Road Network (ARN), Asia’s first integrated day-definite road network.
Of course, such an endeavour had never been attempted before. Not in Asia at least. Needless to say, there would need to be a herculean task ahead, not the least being the planning of such a network. Setting up a network of roads to connect Singapore, extending up the continent to South China and eventually to Hong Kong was no ordinary undertaking. It was a daunting task no doubt – but not impossible.
Dinesh Kanapathy, Regional Operations Manager, Asia Road Network explained, “Our model here in Asia is modeled after our highly successful European Road Network. The model works on a Hub and Spoke model, where the Road Network operates the main international line haul between each Hub. The Domestic Networks in each country then performs the last mile delivery services.” With the Network model decided on, what ensued was years of formal applications, lobbying and negotiations with various customs offices and governmental departments in various countries. It was a never-ending process, with the end seemingly further and further away, but the team persevered and the ARN was finally launched in 2005. The system would change the face of TNT’s operations in Asia dramatically. And the results far outweigh the long drawn out process of implementing the network.
No pain, no gain
One might ask though – why go through all the hard work and pain to establish such a system? The answer is quite simple. The ARN is really “history in the making”, setting an unprecedented and unparalleled level of timeliness for road delivery services. The unique operational features of the network allow for the successful timely day-definite deliveries with a 95% on-time performance, setting TNT Express apart from other logistics companies.
However, what ultimately makes the ARN truly remarkable is that it is able to translate this new found effectiveness in delivery into savings for the customer. Having such a system provides more options to the customer for cost savings. With the ARN, consignments can be sent anywhere around Asia by road, eliminating high air transportation costs. For longer haul deliveries, customers can even opt for a fusion of air and road transport to save costs while not compromising on delivery time.
While less costly sea freight is still widely used in Asia, the ARN guarantees a quicker arrival of goods: “The speed of the ARN is not just about arrival time, but also that our customs processes are much quicker as compared to lengthy port customs,” says Kanapathy. The ARN route is also built to feed into major air hubs in the region, and TNT’s own air network operations.
And this is all thanks to an extensive road network which today connects 127 cities in Singapore, Malaysia, Thailand, Laos, Vietnam and China. This system is still expanding and this network will soon be extended to include Hong Kong.
When timing means everything
Unique to the ARN is its network of inland clearance depots (ICDs), which allows for TNT trucks to load and unload shipments within TNT’s bonded facilities at local in-city facilities, bypassing usual tedious and time-consuming stops for customs clearances at border-crossings. In the fast paced business environment today, timing really is everything, and even the shortest of stops can really prove to be costly.
“Our trucks are registered in the countries we operate and display multiple licenses that enable them to cross international borders smoothly,” explained Kanapathy about the ICD process. “What this means is that our trucks can travel virtually non-stop from Hub-to-Hub, reducing border processing times, ensuring a timely and more importantly, secure, delivery of consignments.”
In order to be able to meet the day-definite deliveries, the ARN runs on a fixed schedule with over 100 truck departures weekly. Other operators of truck-driven delivery services only depart when their trucks are full. The ARN schedule, in contrast, assures scheduled departure regardless of load: “When we first introduced the ARN, we were sending out trucks that were half empty. But as we had faith in the system, we understood that the ARN would be a long-term investment for this region’s logistics services,” explains Kanapathy.
The final secret in the network’s timeliness lies in yet another industry first. Instead of swapping containers, cargo is handled by swapping prime movers (also known as tractor units). This beats conventional container-swap processes at borders or tedious cross docking activities, whereby a truck is completely unloaded and then reloaded into another truck, often with manual labour needed, and taking hours to complete. TNT’s integral trailers are detached from its arriving truck, with the prime mover driving out and the departing prime mover driving in for attachment; a process that takes no more than 10 minutes. This way, trailers are very quickly prepped to continue on their journey.
With such an extensive network in play, security and safety poses to be a serious concern, especially in terms of hijacking and theft. Much of the security features employed in the ARN exist within the cargo hold itself. The cargo hold remains secured by an Electronic Lock (E-Lock) system that restricts precious cargo from unwarranted access. Monitored by TNT’s 24-hour Regional Security Command Centre (RSCC), the E-lock can only be opened by remote control or with a randomly generated PIN provided by the RSCC that is keyed into the number pad on the back of the trailer.
Both the prime movers and trailers are equipped with a GPS tracking system, and additional internal and external CCTV cameras that monitor movement around and inside the container. Finally, besides driver authentication and a panic button, drivers also receive thorough security training on robbery response and potentially threatening situations such as unauthorised roadblocks.
TNT’s Asia Road Network was recently recognized for its rigorous security standards for road transportation, achieving the highest validation ever to be awarded to a company for trucks operating in Asia. Globally, TNT has become the first in the industry to be certified with Level 1 TAPA (Transported Asset Protection Association) accreditation in its Trucking Security category, which demands 100% compliance in meeting stringent security measures.
Using a slightly smaller model of the same R series trucks used in the ERN, the fleet of 12 Scania R380 trucks that serve the ARN were built from scratch in Asia and developed specifically to handle Southeast Asian terrain.
With a global relationship, Scania played a role as one of the partners for developing the ARN. Built along the network are service centres of the truck manufacturer and retailer, on-call for the ARN trucks, “If for example any of our trucks face a breakdown along the ARN route, Scania is able to send help within two hours,” said Dinesh.
TNT’s ARN proudly boasts a loyal team of drivers that ensures operations run smoothly with minimum hiccups in human resources, with an almost zero turnover rate. To ensure their safety, health and satisfaction, the drivers are given a performance incentive different from other trucking companies: “Instead of the number of trips they make, our drivers are rewarded based on how well they keep to their KPIs and stick to protocol, and are given a limit of how many trips they can make a month to avoid exhaustion,” explains Kanapathy.
Indeed, the establishment of the ARN highlights the lengths at which companies would go through (literally speaking perhaps here), in order to provide the best and most cost effective service possible for its clients at a time when competition is key and having that edge above the rest does indeed provide that “added advantage.” In the case of the ARN, it has proven to have set a new standard in the field of logistics, giving a whole new meaning to the term “staying connected”.