NEW YORK, Oct. 4, 2011 (RISI) -A new project between Finnish pulp manufacturer Botnia and logistics provider V. Alexander will use RFID to monitor pulp shipments. The tracking technology has found wide success with paper shipments in the last few years, but pulp producers have been leery that the technology is too expensive. If this pilot project is successful, V. Alexander could take the lead among logistics providers who handle pulp.
"The first trial shipments are planned for the beginning of October. We should be ready by December, before the end of the year to be up and running," says Carsten Hellmers, CEO, V. Alexander.
Forest products logistics has been exploring the use of RFID technology for years. An early effort at PPI Transport Symposium 16 was made to introduce the technology to the industry. That year, the radio frequency tags were included in delegates badges, allowing them to see how individual units can be tracked through each step of a multipart process.
Earlier this year, Botnia, one of the world's principle suppliers for market pulp, invited many of their suppliers to start using RFID to track pulp, applying a just-in-time production standard to this breakbulk product. V. Alexander is the first logistics and warehouse supplier at a port to undertake the project within Botnia's supply chain.
An increased need to control pulp movements and especially of stock levels is the major driving factor for Botnia starting the RFID project. Applying RFID tags to individual pulp shipments allows Botnia to track when the pulp has arrived in the warehouse, delivered to the mill and finally, if agreed with customers, when the pulp is used. All items together changing the dynamics of keeping track of pulp inventory levels at warehouses.
Controlling pulp movements, especially stock levels, was the major driving factor for Botnia starting the RFID project.
The warehouse stage of the pulp shipment process is still crucial and this is where V. Alexander comes in. Selecting Bremen as the pilot port, V. Alexander will use RFID to track when the pulp arrives in vessels at Bremen, monitoring the pulp as it is discharged and placed in the warehouse. Through the process, V. Alexander will electronically report to Botnia what has been stored and when it will leaves the warehouse, all in real-time.
"For the producers who are implementing it, they will have much more control about the pulp volumes," says Hellmers.
By agreeing to make the investment for the pilot project, V. Alexander is hoping the RFID technology will match with other pulp producers and potentially other cargos. The system is being designed so that modifications can be made for other cargos and in other ports and warehouses managed by V. Alexander.
Selecting Bremen as the pilot port was a strategic move for V. Alexander as well as Botnia. Transporting pulp from Finland to various ports in Europe, Bremen can be seen as the prototypical hub for destinations in the UK and Southern Europe, such as Italy and Spain. V. Alexander can also take advantage of their existing experience with forest products at Bremen to better gauge the initial project.
As a major handler of forest products, V. Alexander has experienced phenomenal growth since it started operations in 2006. Annual tonnage for forest products has increased from 125,000 tons in 2007 to 500,000 tons in 2010. Revenue for the company has increased 400% to over 19 Million Euros.
V. Alexander will use RFID to track when the pulp arrives in vessels at Bremen, monitoring the pulp as it is discharged and placed in the warehouse.
Pulp and paper represents approximately 70% of V. Alexander's activities. Acting in two distinct fields of logistics on the continent, V. Alexander has established itself as a logistics provider offering warehousing, distribution, and shipping on good coming into Europe through ports such as Flushing and Antwerp. At ports in Northern Europe, like Bracke, Poland and Bremen, V. Alexander offers warehousing based on breakbulk discharge in the ports and just-in-time distribution by rail, truck and barge.
Part of V. Alexander's breakbulk traffic is tailored specifically to South American producers, such as Fibria, Cenibra, CMPC and Suzano, where pulp is transported through Flushing. Trans-shipments are used to transport pulp into the UK, Poland and Portugal.
Handling containers is big part of V. Alexander's operations. Working with paper - kraftliner and newsprint - and fluff pulp, V. Alexander works with many North American companies for their European distribution. Georgia Pacific, Weyerhaeuser, Rayonier, Domtar and Buckeye have all built strong distribution channels through V. Alexander.
"That is one big segment, part of the reason we have grown as much over the years," says Hellmers.
Future expectations for this RFID project might extend to any of V. Alexander's other customers and products. And Botnia is partnering with all other logistics providers or stevedoring companies at destination ports they have latest end of 2012. Regardless of what comes next, as this project takes shape through the end of 2011, V. Alexander and Botnia are gaining a competitive edge with the pulp industry.