Welcome to FREJA’s third newsletter in 2021 in which we want to share with you what is happening in our part of the transport and logistics business.
FREJA wants to be greener and we are doing trials with alternative fuels in cooperation with chosen clients and hauliers. There is no agreement in the EU countries on which alternative fuels to invest in and research is done on several fronts. Read our article about alternative fuels and our considerations on environmental considerations.
In this newsletter we also give you an article about the EU Mobility Package which regulates the working conditions for drivers and the costs this adds to the transporter.
At FREJA, we advise our clients to invest in customer/supplier relationships that support and absorb the challenges on your way. FREJA’s 4PL Services can help your company. We have digital tools to calculate models to support your supply chain. Read more about this in on of our articles.
In the more entertaining part of the scale we give you a greeting from the golf event “Challenge Tour” where FREJA mid-August participated in a ProAm tournament in Esbjerg. A victorious day – in the eyes of FREJA.
The EU Mobility Package sets the working conditions for truck drivers, but unfortunately, it also leads to increased costs
After several years of negotiations, the EU passed the so-called Mobility Package in July 2020. The EU Mobility Package sets the standards for truck drivers’ salaries and working conditions. Some parts of the Mobility Package have been implemented, while others will become effective gradually during the following years.
We find it positive that the EU creates common regulations regarding working conditions for drivers, but unfortunately, tightening the regulations increases our costs. The new regulations mean that drivers are entitled to return to their home country every fourth week, and therefore, the transports must be planned accordingly. Furthermore, the vehicle itself must return to the company’s registration address every eight weeks. The travel costs related to the driver’s return to his home country must be covered by the employer.
Regarding resting related to the rules of driving and resting times, all rests lasting more than 45 hours must be held outside the truck, and it is required to have documentation for these rests. Finally, it is a requirement that the drivers are paid the same as national drivers in the country in which they drive.
The above has resulted in several questions from FREJA’s customers if we are able to price the increased costs in relation to the implementation of the Mobility Package. However, we are not able to do so presently. It is highly uncertain how many drivers and hauliers will choose to leave the transport industry because of the increased requirements of returning to their home country, the salary, and the increased administration. We will wait and see what will happen and how the situation develops over the coming months and years.
Yes to a green transition, but it requires agreement in the EU on alternative fuels
FREJA wants to be greener, but it seems to be a bigger challenge than expected due to divergent taxes and a pressured market.
There is no agreement in the EU countries on which alternative fuels to invest in. Some countries want to focus on biodiesel, other countries on gas, and then there are those countries that have not yet made up their mind. Limited refueling options and large price differences, and the fact that some truck manufacturers require shorter service intervals for B100 diesel, make it difficult for hauliers to be a part of the green transition.
FREJA is doing trials in collaboration with a few customers and hauliers on the B100. This is only a reality in cases where the infrastructure allows it, and when there is a customer who wants to pay for the additional cost it gives our haulier.
FREJA has initiatives underway with the HVO100 on a couple of our own trucks. The experiment will take place by refueling in Sweden, as it will be impossible to refuel HVO100 in Denmark due to the large charges.
HVO (Hydrotreated Vegetable Oil) is second-generation biodiesel. HVO100 can provide up to a 90% reduction in CO2. B100 is first-generation biodiesel and provides up to 60% CO2 reduction. B100 comes primarily from rapeseed crops.
Biogas is also an environmentally friendly alternative. CBG (compressed biogas) has a relatively short operating radius, making it unsuitable for international transport and dependent on land, as there are only limited refueling stations.
LBG (liquid biogas), which could be an alternative, has even fewer options for refueling and is financially impossible for our hauliers.
Like most of our colleagues in the industry, these few alternative trials only happen in limited driving areas and in collaboration with customers, who are willing to pay for the costs. Many hope that the hydrogen solution will be the sustainable alternative to diesel and therefore also have expectations that it will be economically viable, but there are no real facts on the table yet about the economy. It requires more than just political declarations of intent – it requires real action and common guidelines across the EU.
While we wait for the right sustainable alternative, we continue to do what we can, which is to focus on increasing our overall unloading rate as well as reducing the number of miles driven.
New times requires new measures for handling the supply chain
During the pandemic, we have faced multiple factors that have increased complexity and constrained our operating model in a historically inefficient manner, shifting from a lean and responsive supply to a “just get the goods moving, we can sell anything” perspective.
The challenges are many. On a global scale, material scarcity is a reality, as insufficient inputs have been a concern since the pandemic began, due to an abrupt rise in consumer demand like never before, resulting in increased costs.
Capacity has been challenged at all facilities within mining, production, warehousing, and transportation, which are all elements of the supply chain that create bottlenecks and exploding cost levels.
Professionals have had to reconsider
Difficult demand forecasting
Changing consumer attitudes
And yet still develop and lead change in the right strategic direction while being (very) busy getting the goods available to buy off the shelf.
How are you managing the supply chain projects during the pandemic, and do you have the time to run optimizations and gain profits? If the demand flips once again, how do you cope with the bull-whip effect that has reduced supply chain efficiency for ages? Today, the theory is more relevant than ever as purchasers buy whatever they can get hold of in large quantities for inventory, or accepting prolonged lead time in planning, production, and transportation services.
Digital tools are hailed as the solution to many challenges, but how do you deploy them into your supply chain department?
At FREJA, we advise our clients to invest in customer/supplier relationships that support and absorb the challenges on your way. FREJA’s 4PL Services can help your company by building a shared forecasting model to reduce the bull-whip effect in your supply chain. Our 4PL specialists will also code the mathematical model that tells you who to source material from and where to store your products to keep cost at a minimum. Thereby, you are aware of the optimum supply chain and this allows you to wind more market shares and service the market with the required flexibility and lead time.
Read our case about mathematical modelling to get a glimpse of what coding of your supply chain is really about and how that may reduce your costs by 5,9% and improve your responsiveness. Introducing mathematical modelling to be a part of your team makes unmanageable decisions manageable. Imagine millions of combinations and thousands of parameters. How can the human brain manage such complexity? In a winning supply chain, you need to know your best-case options to make the best decisions. That is served by FREJA.
What is the Bullwhip effect?
The bullwhip-effect describes the phenomenon, where the customer’s change in demand effects the whole supply chain to a point, where the variance in demand, becomes greater than the actual sales. This causes the manufacturer to increase its production without any increment in the actual sales at the retailer. This effect causes more goods on stock, less accurate forecast and a more expensive operation for all involved parties. This can be prevented with information-sharing (forecast sharing).
Top class golf experiences at ‘Made in Esbjerg Challenge presented by FREJA and TotalEnergies’
From August 11-14, the Challenge Tour tournament ‘Made in Esbjerg Challenge presented by FREJA and TotalEnergies’ took place. In this connection, FREJA had the pleasure of inviting 24 customers and business associates to participate in the Pro-Am the day before the tournament start. FREJA lined up with 12 teams and enjoyed an unforgettable day at the golf course, where the atmosphere was top-notch, and the professionals shared their best golf advice.
A total of 26 teams participated in the Pro-Am, and there was a prize for the six best teams. FREJA ended up having four teams in the top six, including a well-deserved first place. It was FREJA’s Team 2 with Lars Wejrup from Søms A/S, Michael Pedersen from Give Steel A/S, Kasper Hansen from FREJA, and the Italian professional golfer, Matteo Manassero, who took home the victory.
We appreciate all the positive feedback we have received, and we would like to thank everyone who participated and helped make this day memorable. We look forward to many more exciting golf experiences in the future.
Read some of the positive feedback from our customers here:
We would like to thank you for a fantastic day at the golf course at the Challenge Tour & Pro-Am in Esbjerg. The golf course was like never seen before, the weather was great, and we got some good scores. It is always a pleasure to feel the atmosphere at these events, and we especially enjoy the good dialogue with the pro. It provides an opportunity to gain direct insight into life as a pro and the challenges they face daily. As the pro said, there is a reason it is called “Challenge Tour”.
It is a great way to create relations that goes beyond the daily collaboration, and we appreciate the effort FREJA puts into these events.
Scandi-Roc ApS Jes Rasmussen & Thomas Jacobsen
We had a super good day in good company. It is always nice to meet new people and feel the good spirit from the staff at FREJA.
Our pro was a very likable person, and I think he gave a lot of himself to us as a team.
All in all, a lovely day with a great result. Thanks to Kasper Hansen/FREJA, Michael Pedersen/Give Steel, and our pro, Matteo Manassero.
Søms A/S Lars Wejrup
If you wish to join a FREJA team in the future, you are welcome to contact Franz Andersen or Kenneth Christensen.
FREJA already has three offices in China in Shanghai, Qingdao, and Guangzhou.
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