ABG provides heating products like firewood and briquettes to customers in Norway, Sweden, Russia, and the Baltic countries. They transport products via both road freight (30%) and sea freight (70%). Sea freight allows for larger volumes and predictable delivery times, while road freight enables door-to-door delivery without reloading. To improve sea freight operations, ABG wishes for direct lines between Russia/Baltics and Norway to reduce lead times, and more cost-effective delivery to western Norway destinations.
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4. Products
Briquettes Firewood
1 900 TEU
2 700 TEU
Pallet material Imp. material
and labanks 400 TEU
300 TEU
5. Volumes
Summary of volumes in TEU
Product Volume Unit Eq. TEU
Firewood 1 500 000 Bags 1 900
Briquettes 3 500 000 Packs 2 700
Treated material 8 000 m3 400
Pallet material and Labanks 6 000 m3 300
Total 5 300
8. Road freight (30 %)
Advantages
• Low prices
• Door - door without re-stuffing
• Short lead-time (2-3 days door-door)
• Flexible to remote destinations
• Less risk of damaging pallets (no re-stuffing)
Disadvantages
• Exposed to political issues
• Vulnerable if Norwegian fish farms shut down
• Limited capacity
• Unpredictable ETA
• Vulnerable to road conditions in winter-time
9. Sea freight (70 %)
Advantages
• Bigger capacity
• Floating “warehouse”
• Predictable ETA
• Delivery to customer by local transport
• Not exposed to “political” risk
Disadvantages
• Longer lead-time
• Risk of damaging pallets (re-stuffing)
• Expensive to remote destinations
• Difficult to change direction
• Ice in Gulf of Riga and Gulf of Finland
10. The best of two worlds
Sea freight
• Bigger capacity
• Floating “warehouse”
• Predictable ETA
• Delivery to customer by local transport
• Not exposed to “political” risk
Road freight
• Low prices
• Door - door without re-stuffing
• Short lead-time
• Flexible to remote destinations
• Less risk of damaging goods (no re-stuffing)
11. Wish list for sea freight
• Door-door deliveries, incl. pre-carriage
• Direct line(s) from Russia and Baltics to Norway = shorter lead time
• Cost effective solutions to destinations on the west coast
• Longer free time in Norwegian ports