Environmental, Economic and Policy Impact in Road Freight Transport

Description of impact

An award-winning fleet planning company began exploiting Heriot-Watt University optimization research in 2014, leading to the following impacts:

Economic: GBP11,650,000 investment and B2B income, plus GBP9,600,000 estimated gains for end-users, four jobs created (15 person-years in the period).

Environmental: the associated cloud service was launched August 2018 and by end 2020 had reduced CO2 emissions by approx. 3,000 tonnes and started recruiting nationwide home delivery fleets.

Policy: founded on results of an associated project, the World Business Council for Sustainable Development now recommend asset-sharing platforms in their guidelines for freight procurement.

Narrative

In 2014, Route Monkey Ltd (RML), was establishing a reputation for innovation in fleet software, developing business plans around the vision of a fast/flexible ‘online scheduler’, and radically simplifying fleets’ access to optimisation capability. RML adopted Corne’s research to help realise these plans, and a series of associated Innovate UK, EU and B2B projects began in October 2014. One project in this HWU/RML partnership explored multi-fleet collaboration, leading ultimately to policy impact; meanwhile, others transformed RML’s technology portfolio, setting the stage for RML’s acquisition in 2015/16 by Trakm8 PLC, who sustained the HWU partnership, and launched ‘Vortex’ (incorporating Corne’s algorithms) in August 2018. Associated impacts are outlined below.

Environmental:

Trakm8 released the ‘Vortex’ API in August 2018, incorporating the research and underpinning their optimization service (https://www.trakm8.com/optimisation). Vortex is used for new clients since August 2018, while gradually migrating pre-existing clients. Daily emissions savings accumulate, which can be estimated as follows: Before Vortex, we can estimate that fleets would have used, on average, 10% additional mileage. This is more conservative than the 12.5% estimated gains from top-tier optimization across diverse fleets, which takes into account that some may previously have used optimization services. This translates into reduced CO2 emissions, mitigating pollution and climate change, and contributing to the UK’s CO2 targets. Meanwhile in 2017 RML commissioned an estimate revealing savings of c. 2,200 tonnes per month (from 3,240,000 miles saved per month) across its customer base (https://tinyurl.com/rmlest). Since August 2018, around 5% of pre-existing RML customers have migrated to Vortex, suggesting further reduced emissions of 110 tonnes per month, accumulating to c. 3,000 tonnes by end 2020. Meanwhile some very significant fleets will adopt vortex in 2021 on the basis of proven benefits beyond their current service. These include two top-10 supermarkets accounting for over 90,000,000 home-delivery miles p.a. The latter projects and associated product confidence contribute to pre-2021 Trakm8-based economic impact, as presented below.

Economic Impacts:

Route Monkey Ltd / The Algorithm People Ltd (TAP): In 2015, Trakm8 PLC acquired RML for GBP7,100,000 (for a consideration of up to GBP9,100,000); this investment was driven in large part by the distinctive and novel algorithm capabilities, and associated development roadmap, afforded by engagement with Corne’s group, which also enabled RML to leverage further R&D and private funding summing to approx. GBP3,000,000, and enabling ~15 additional person years of employment in technical positions. RML’s CEO went on to found TAP, which raised GBP1,300,000 to develop its novel pay-as-you-go online scheduling platform ‘My Transport Planner’, which makes use of vortex.

Trakm8 PLC: associated economic impacts for Trakm8 can be quantified in terms of jobs created in connection with the Vortex API service, and associated project income from a number of IUK and B2B projects, on topics ranging from integration/deployment of Vortex through to specific consultancy tasks that exploit Vortex. Trakm8 estimate these impacts (until end 2020) as: project income: GBP250,000; creating 4 jobs.

End Users: where case studies have been done by Trakm8 PLC on the impact of Vortex on individual customers reports include, e.g., savings of GBP150,000 p.a. for a charity’s transport costs, and 10% savings on fuel costs along with 30% improved driver productivity for Iceland Foods Ltd. Estimating economic benefits across all end users is confounded by the variety of ways that end-users exploit increased plan efficiency; however a lower bound can be suggested, based on cost-per-mile of the most fuel-efficient diesel vans (11p - https://tinyurl.com/fuelppm). Assuming 3,240,000 vehicle miles per month saved to December 2020 (RML estimate noted above), the resulting figure is GBP9,600,000.

Policy Impacts:

The WBCSD is an organization in Geneva, funded by businesses globally and by the World Bank, advising businesses and influencing policy globally around sustainable practices. Corne’s research on asset-sharing was central to two reports from the WBCSD’s Low-Carbon Freight working group, and also underpins (via the FSL project), procurement guidelines for freight operators published by the WBCSD’s ‘Transforming Heavy Transport’ project.

The first WBCSD report was built around Corne’s research as part of the Low Carbon Freight working group, and co-authored by the consortium, including Nestle, UPS, and Scania, promoting non-trivial horizontal asset sharing among fleets (i.e. beyond simply ‘backhaul’) as one of the more significant measures to be recommended for reducing emissions. Meanwhile, the freight procurement guidelines (WBCSD report 2) is a deliverable of the WBCSD’s ‘Transforming Heavy Transport’ initiative, which brings together 20 global transport organizations to guide the sector towards zero emissions by 2050.

Additionally the WBCSD report from the World Business Council’s ‘Transforming Heavy Transport’ project, Sep 2019; “provides professionals engaged in logistics procurement, supply chain and logistics management, and logistics emissions management with action-based guidance on how to reduce greenhouse gas (GHG) emissions and air pollutants from their freight transport and logistics procurement practices”; the report describes the ‘Freightshare Lab Asset sharing platform”, an outcome of the Innovate UK project, as an exemplar and a signpost to best practice that is “applicable to all companies”.

Impact status	Achieved
Impact date	1 Jan 2017 → 31 Dec 2020
Category of impact	Economic, Environmental
Impact level	European