Levers of Power

The process of how Silk Contract Logistics came to partner with Scania Australia is involved and worth telling. It’s a story of a customer with a definitive task with which there would be no quick fix. When Silk were headed to the market for a prime mover that could deliver the prerequisite power required of its roadtrains on the Toowoomba Range Crossing they had set, as a matter of necessity, high expectations of the OEMs approached in the request for proposal. That there are 27 sites where over 380 Silk employees are staffed says something to the magnitude of its growing operations, not to mention the demands made of it.

Silk Contract Logistics maintains a national presence with a head office in Melbourne. As a provider of integrated warehousing, distribution and supply chain services, the company, depending on the financial insider you talk to, is headed for a share market listing later this year. Moveable assets are often assumed as part of appointed acquisitions, with at least one of these added annually since 2017 including Container Swinglift Services and more recently the 150 year old wharf carrier Rocke Bros last year.

By far the biggest move the company has made so far this year is the purchase of 13 roadtrain spec’d units manufactured and supplied by Scania. For Silk the procurement process was contingent on overcoming difficulties it had in keeping its commercial vehicles, assigned a notorious steep descent in southwestern Queensland between Toowoomba and Withcott, from being repeatedly sidelined. Here Silk marshalled together a list of requirements for the solution it sought in regard to extracting more power while increasing its equipment liability coverage. Upon going to market the company had set its budding OEM partners a challenge. Could it provide a warranty that would not limit engine hours and fuel use? Would it deliver the torque to contend with the demanding terrain? A significant set of failures with a prior set of roadtrain equipment had left Silk explicit as to what it would not entertain in a warranty. The company set about talking to every truck manufacturer in the country with the ability to deliver an order of 13 prime movers for roadtrain application according to Silk Contract Logistics National Transport Operations Manager Kip Sandercock. 

“We ended up going through a process of evaluating the warranty conditions which are very important to us,” he says. “We would not entertain limitations on engine hours and fuel use which some manufacturers will say you are voiding your warranty if you do more than 2,000 hours or so many litres of fuel through the engine in 12 months. They also have a limitation on kilometres that was less than what we felt the safe operating life of the truck was.”

Silk was upfront in making this precondition known to all of its potential vendors. In response, Phil Mayfield, Scania’s appointed sales representative, got a flight up to Brisbane to spend the day with Silk to better understand the application. It made an immediate impression.

“No one else did that. We just got quotes emailed into us,” recalls Kip. “Phil came and sat with us and wanted to understand it. He then took me out to a Scania branch here in Richlands and we went through a truck and took it for a test drive.”

During the test drive Phil explained the technical aspects of how some of the features of the truck worked. Of particular importance to Kip was the operational function of the retarder and the cruise control. Under the Performance-Based Standards scheme its vehicles are tracked by the National Heavy Vehicle Regulator in terms of speed having been limited to 90 km/h for roadtrains in NSW and Queensland. According to Kip his team needed to be certain the equipment wouldn’t “run away” when it was on cruise. The scare quotes, given the torrid time the company had experienced with its equipment on the Toowoomba Range, are justified. After having been set up in manufacturer specification, in a particular gear on the settings of a particular retarder position, Silk’s prime movers had succumbed, too often, to the task. In a 33 month period it had blown up 17 diffs.

“Now the dealership gave us support at the time but the OEM stepped away from us saying the application was too harsh for their equipment so I needed to be sure in making the choice of the equipment we were going to operate had retardation methodology that meant the backlash in the diff wasn’t going to cause the diff to blow up,” Kip says.

Silk’s wasn’t the only equipment struggling on the Toowoomba Range descent. Other carriers in Queensland had been experiencing, on the very same route, a similar problem. For Silk, this was not undue grounds to ensure it had warranty coverage that would protect it going forward. The warranty, as it was written for the trucks in essence, must provide full coverage of the drivetrain including engine, gearbox, diff and all associated running gear to be replaced irrespective of engine hours or fuel burn.

During its tender process, it left Silk with only two manufacturers who were able to meet their needs. When Silk went back to speak to both of them it was Scania that proposed a deal that demonstrated proof of concept with trucks on the ground already in use for other customers – competitors of Silk’s that it knew from industry information weren’t having issues with diffs, which is to say, it was an entirely believable proposal.

“Their pricing was competitive and when we put together our total cost to operate, Scania came back with some better information around fuel use and what we could expect from it,” recalls Kip. “In colloquial terms, Scania commercial vehicles, were never parked up at the bottom of the Toowoomba Range crossing with the other roadtrains, ours included.”

Based on the weight and journey of the application in question, Scania delivered a fuel estimate which Kip plugged into a tool that evaluates factors crucial to evaluating Silk’s fuel burn.

“Working out what they told us and where we ended up made for some good reading,” Kip says. “We ended up 3.4 per cent better on fuel consumption than what they had forecast which was fantastic. To me that built a lot of confidence in how they operate and it built trust in the relationship after the sale because what they told us was the truth. It wasn’t sales pitch. It allowed us to believe in their brand and their people.”

For Silk that represented a 12 per cent decrease in fuel consumption, a major improvement over the previous brand of truck it was using. As the Scania V8 offers more torque, it revs lower to produce its power, alleviating strain on the crankshaft from the pistons. With more cylinders it is also limiting how many times the injectors open per minute, which is, in the case of a six cylinder engine, much higher.

“Because the cylinder has got to be bigger in a six and theres less cycles, it’s got a bigger explosion chain, for the same capacity 16-litre engine,” Kip says. “So you get more torque out of a V8 engine because you’ve got more push on the crankshaft and what that means you get your power lower down in the rev range so the engine can react more quickly to a change and therefore you’re not having to apply more RPM because more RPM means more fuel.”

A qualified mathematician who studied computer science at university, Kip is something of an anatomist for the finer details. He has previously worked at DB Schenker and Linfox in its Ports Logistics business, where he performed business development and operational roles and ended up working for John Sood, who was General Manager at the time, and now serves as a Director of Silk Contract Logistics. In the end Silk purchased a mix of Scania NTG R620s and R650s.

“Our procurement process was about building a model that eventually spat out an answer. It wasn’t an emotional decision but rather a numeric decision and what spat out the back end of it was a coin toss between the various manufacturers we had,” he says. “What got us over the line was the warranty terms and conditions and essentially the support that was offered by Scania. In terms of the relationship that they built with us through the procurement process it gave us trust in them that they were going to stand by their product and they have.”

Managing Director Brendan Boyd says the new Scania fleet, critically, has enabled Silk to deliver a consistent and reliable service to its customers.

“There has been zero downtime on the new fleet, which has been a key factor in ensuring 100 per cent of our customer’s produce has met vessel departure times,” he says. “Despite the reality of the new bypass not meeting the promise – its longer in distance, inconsistent in grade and hard work on our fleet, despite the tolls – the Scania with its higher torque and performance has been critical in not impacting our service delivery.”

In 2011 Brendan joined Silk as General Manager under the ownership of Gresham. Three years later he led a management buyout of the business and took on the role as Managing Director and has had the company on a trajectory of growth both organically and through acquisition ever since. Under Brendan and business partner John Sood, Silk is now regarded as one of Australia’s leading suppliers of innovative supply chain solutions.

“Scania has demonstrated itself to be a collaborative and professional partner,” says Brendan. “Silk endeavour to engage with partners who have a willingness to get in the trenches with us, understand our business and our challenges and who can contribute to winning solutions which we can then combine with our own IP to provide our customers with best in class solutions. Examples of this are our 29 Tonne capacity lifters and the Scania roadtrain fleet.”

Late last year Silk, as it looks to redefine its productivity, pioneered an innovation in maximising space in the hyper-competitive container transport sector. As sideloader containers exceed the on-road capacity of axle weights, given the triaxle and drive axle group are often on a limit point with spare capacity on the other, it has become an ongoing issue for many cartage operators. A sideloader application with a tare weight of 18 tonnes and gross concessional mass of 42.5 tonnes leaves capacity of 24.5 tonnes. With a 12.25 tonne restriction on the drive axle when the tare weight on the drive is minimised somewhere between four tonnes and five tonnes in order to meet compliance, the operator must keep under eight tonnes payload on the drive axles and 16 tonnes on the triaxle according to John Sood, who also serves as Operations Director.

“Because the container is often retracted into the centre of the trailer the issue then comes from having the capacity reduced to 22 tonnes,” he says.

The backward weighed position of the sideloader caters for the reduction in capacity at general mass limits but as an operator proceeds to concessional mass limits, heavy mass limits and the Mass Important Management Scheme, the weight balance changes between the two axle groups.
Along with Silk Contract Logistics QLD Transport Manager Paul Yeoman, Kip sought a solution to reduce truck trips and speed up delivery time for its customers through long time partner Hammar.

The unit of choice to obtain these weights began with a standard Hammar 195 as it fit the 24 tonnes to 25 tonnes payload capability.

They also secured a lightweight prime mover as a chaser vehicle.

So that it had a thorough understanding of the range of positions required to be able to maximise the payloads, part of the project required a customised tool to calculate the precise position for any weight of container and Silk turned to Hammar for its 160S Ultralight and the 110S for the type of multipurpose work undertaken. After working through some designs to reposition the turntables and weight reductions of the trucks to achieve its intended goal, Silk, in close collaboration with Hammar, managed to deliver upper limits in weight which is first-in class. Weight distribution such as this and how Silk has come to be able to compliantly transport such significant weights is a market-leading innovation and as such the IP could not be shared by the company. For one of its biggest national customers, a retailer, Silk has reduced the ‘Wharf to DC’ time in their business from 16 days with an incumbent to five days on 8000 containers annually across the Eastern Seaboard.

The capital required to procure the sideloaders and prime movers, along with the compliance to NHVAS (Mass and Maintenance), research and development is significant according to the company, but justified by the outcome.

While there has been little saving by way of cost, great benefits have been seen through an improved capacity with which more work is now achieved in the same timeframe.

In sum, it is fair to suggest that Silk has engineered a flexible solution that allows advanced insight into what limit is in place for each configuration as it allows the setup to be compliant with the many elements of Chain of Responsibility, protecting employees, customers and the general public.
“Lowering Wharf to DC time gives our customers greater stock availability, ensuring saleability, lower inventory holding and revenue through the door quicker,” Kip says. “Additionally, but certainly not of lesser value is the development of our calculation tool which means we’re in a position to know what’s legal before we put it on the truck instead of after, eliminating the chance of overweight issues on the road.”

Silk itemises its current equipment from acquisition asset registers. When integrating new assets acquired as part of purchasing other businesses it draws on direct comparisons to existing equipment and existing applications. In some instances, according to Kip, where he learns that an acquired business has a piece of equipment that is still operating well they can promptly identify the bits of kit that are perhaps past their use for life. Having a larger quantum of equipment across the country certainly helps.

“It might have too high a repair and maintenance percentage of revenue and we can then quit those to make sure we’re staying within services ranges that our customers need.” says Kip. “We can’t have trucks breaking down all the time so we need to make sure that we’ve got them on the road. And as they get older they tend to breakdown more often especially in the port operations where you spend so much time waiting.”

Road kilometres are not the adjudication of the expiry of a unit from useful service explains Kip. It’s engine hours.

“Engine hours multiplied by 80 gives you the effective road kilometres and you might have a truck that has done 400,000 kms which is not a lot in theory but it might have done 20,000 hours and if it’s done that many hours you’re talking about a 1.6 million km truck. Now you wouldn’t be putting that to service against your A1 best customers. We go through and identify the R&M record of a piece of equipment is not suitable for the service level we offer our customers and we replace it.”

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