2011 Supply Chain Cost Analysis of Long-Distance Transportation of Energy Wood in Finland
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8/10/2019 2011 Supply Chain Cost Analysis of Long-Distance Transportation of Energy Wood in Finland
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Supply chain cost analysis of long-distance transportation
of energy wood in Finland
Timo Tahvanainen*, Perttu Anttila
Metla, Finnish Forest Research Institute, P.O. Box 68, FI-80101 Joensuu, Finland
a r t i c l e i n f o
Article history:Received 5 October 2009
Received in revised form
28 October 2010
Accepted 1 November 2010
Available online 7 January 2011
Keywords:
Logging residue
Forest chip
Energy wood bundle
Railway transportation
Fuel terminal
Supply chain
a b s t r a c t
The increasing use of bioenergy has resulted in a growing demand for long-distancetransportation of energy wood. For both biofuels and traditional forest products, the
importance of energy efficiency and rail use is growing. A GIS-based model for energy wood
supply chains was created and used to simulate the costs for several supply chains in
a study area in eastern Finland. Cost curves of ten supply chains for logging residues and
full trees based on roadside, terminal and end-facility chipping were analyzed. The average
procurement costs from forest to roadside storage were included. Railway transportation
was compared to the most commonly used truck transportation options in long-distance
transport. The potential for the development of supply chains was analyzed using
a sensitivity analysis of 11 modified supply chain scenarios.
For distances shorter than 60 km, truck transportation of loose residues and end-facility
comminution was the most cost-competitive chain. Over longer distances, roadside
chipping with chip truck transportation was the most cost-efficient option. When the
transportation distance went from 135 to 165 km, depending on the fuel source, train-based transportation offered the lowest costs. The most cost-competitive alternative for
long-distance transport included a combination of roadside chipping, truck transportation
to the terminal and train transportation to the plant. Due to the low payload, the energy
wood bundle chain with train transportation was not cost-competitive. Reduction of
maximum truck weight increased the relative competitiveness of loose residue chains and
train-based transportation, while reduction of fuel moisture increased competitiveness,
especially of chip trucks.
2010 Elsevier Ltd. All rights reserved.
1. Introduction
Trucks strongly dominate the transportation of domestic
round wood in Finland (Table 1). Altogether, about 80% of the
round woodentersmillgates bytruck and about 16%by rail [1].
The remaining 3.5% is transported by waterways. During
the last decade, the share of waterways has decreased by
one third, while truck transportation has correspondingly
increased its share. In 2005 about 26% (17.9 Mm3) of the raw
wood used by the Finnish forest industry was imported. Ofimported raw wood, only 45% was transported by trucks and
over 23% by rail. Almost 32% (5.5 Mm3) was transported in
vessels, of which 2.2 Mm3 was in the form of wood chips. In
addition to round wood transportation,about800 kt of chipped
sawmill residues were transported by railway to pulp mills in
2005[2].
The average transportation distance by rail is three times
longer than that of truck transportation (Table 1). The cost per
* Corresponding author. Tel.: 358 50 443 2950; fax: 358 13 263 7111.E-mail address:[email protected](T. Tahvanainen).
A v a i l a b l e a t w w w . s c i e n c e d i r e c t . c o m
h t t p : / / w w w . e l s e v i e r . c o m / l o c a t e / b i o m b i o e
b i o m a s s a n d b i o e n e r g y 3 5 ( 2 0 1 1 ) 3 3 6 0 e3 3 7 5
0961-9534/$ e see front matter 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.biombioe.2010.11.014
mailto:[email protected]://www.sciencedirect.com/http://www.elsevier.com/locate/biombioehttp://dx.doi.org/10.1016/j.biombioe.2010.11.014http://dx.doi.org/10.1016/j.biombioe.2010.11.014http://dx.doi.org/10.1016/j.biombioe.2010.11.014http://dx.doi.org/10.1016/j.biombioe.2010.11.014http://dx.doi.org/10.1016/j.biombioe.2010.11.014http://dx.doi.org/10.1016/j.biombioe.2010.11.014http://www.elsevier.com/locate/biombioehttp://www.sciencedirect.com/mailto:[email protected] -
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cubic meter and kilometer is roughly half of the cost of truck
transportation[1]. However, railway and water transportation
also includes truck transportation from the forest to the
nearest loading terminal or water storage. For railway trans-
portation, the truck feed-in costs cover as much as 42% of total
transport costs.The amount of harvested forest biomass for energy
generation is still low compared to harvested industrial timber
(Table 2), but it is increasing rapidly. Energy wood harvesting
is strongly integrated into industrial timber harvesting; most
of the raw material for forest chips is collected from clear
cutting areas and also from thinnings, where both industrial
and energy wood is often harvested. The users of forest chips
are mainly local district heating or combined heat and power
(CHP) plants and the average transportation distances are
shorter than for industrial timber assortments. Trucks are
dominating energy wood transportation and for the time
being there are few large CHP installations that use railway
transportation for residue bundles, stumps or chips.The use of different technologies for forest fuel production
in Finland in the year 2007 has been estimated based on
a survey of energy wood suppliers, assuming the share of
railway transportation to be zero [4,5]. The most common
supply chain for producing energy chips from logging residues
and small-sized timber was based on roadside chipping and
road transportation using chip trucks. The estimated number
of chip trucks in use was 130 units, with a portion of the chip
trucks also used for transporting energy peat and industrial
wood residues. About 60 energy trucks were equipped for
transporting loose residues and stump wood. The bundling
systemis able to usestandardtimber trucksfor transportation;
seven timbertrucks areused fortransportation of energywood
bundles. The supply chains for both bundles and stumps
require a stationary crusher at the plant to prepare the fuel
before combustion. The number of stationary crushers in
energy plants was six[4,5]. Chipping or crushing can also take
place in a fuel terminal before transportation to the plant.Railway transportation in Finland was a state monopoly
until 2007, when private companies were allowed to offer
services for goods transportation. In summer 2007, the first
private company obtained a licence to operate with the
intention to start delivering cargo services for the forest,
mining and metal industries. The forest industry is the largest
client for railway transportation [6], and has criticized the
state monopoly for high costs and inadequate service. The
criticisms regarding service include the lack of specialized
wagons for hire and the scarcity of loading stations and
terminals suitable for wood transportation. Additionally, the
poor condition of infrequently used parts of the rail network
results in reduced maximum loads and speeds[7]. Comparedto truck transportation from forest to plant, railway trans-
portation is more complicated to organize. In order to mini-
mize equipment rentals, the minimum cargo is large (about
1000 m3), and the timetables for loading are tight and often
scheduled during weekends. These restrictions apply for
energy wood transportation as well. Another limiting factor is
the sparse railway network.
The general trend has been towards closing sparsely uti-
lised railway sections having little or no passenger traffic,
typically located in forested areas[7]. However, the revival of
the mining industry, increasing energy costs and demands for
improving the safety of road traffic are increasing the interest
in railway transportation in general. The closing of smallerproduction units in the Finnish pulp industry is leading to
longer average transportation distances for raw wood. New
large installations for using wood for energy production are
increasing the demand for fuel and competition between
different users. The demand for fuels is largest in southern,
western and central Finland, while the production potential is
located more in eastern and northern Finland. Disturbances in
local fuel supply and the need for balancing the regional
supply and demand during periods of peak consumption
require efficient systems for long-distance transportation of
biofuels.
Planned large-scale production of liquid biofuels and the
development of the so-called biorefinery concept may also
Table 2 e The sources of energy wood for forest chips andharvesting of industrial round wood in Finland in 2006[3].
Mm3
Thinnings: full trees and delimbed stems 0.70
Large stemwood 0.17
Logging residues 1.74
Stumps 0.46
Forest chip, total 3.06
Industrial roundwood, total 49.90
Table 1e Transportation of domestic round wood in Finland in 2005 [1], volumes over bark.
Domestic roundwood
Volume Share Distance Unit cost Unit cost
Mm3 % km m3 km m3
Trucks 33.27 80.1 105 0.054 5.68
Railway 6.85 16.4 293 0.030 8.92by road to railway 6.48 15.6 48 0.079 3.81
rail transportation 6.85 16.4 245 0.022 5.34
Water (floating barge) 1.45 3.5 311 0.027 8.35
Total long-distance transportation 41.54 100.0 143 0.044 6.31
Total by road 41.12 99.0 93 0.057 5.31
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increase the need for long-distance transportation of energy
wood. Furthermore, the growing demand for renewable
energy and fuels is fading the strict line between industrial
timber and energy wood. For both biofuels and traditional
forest products, the importance of energy costs, energy effi-
ciency, and environmental impact assessments are growing
[8], thus supporting the development of energy-efficient
means of transportation such as rail. The new methods andtechnology for the transportation of energy wood have to be
developed as a part of the whole logistic chain, because
activities at the beginning of the supply chain affect the
choices and costs in latter phases of the chain. The bundling
system is a good example: bundle wrapping in the beginning
of the supply chain results in cost savings in forwarding,
together with faster loading and unloading operations
throughout the whole chain.
The purpose of this study was to assess the costs of forest
chip procurement and the development potential of the
supply chains. A special emphasis was on railway trans-
portation, which was compared to the most commonly used
truck transportation options in long-distance transport. Thepotential for the development of supply chains was investi-
gated using a sensitivity analysis, on the basis of the cost
structures of the simulated supply chains. Another purpose
was to develop a GIS-based cost model for forest fuel supply,
which could be used to estimate supply costs and fuel avail-
ability at specific plants using forest resource data.
2. Materials
The CHP plants under consideration were located in Uima-
harju (62190N, 27540E) and Varkaus (62550N, 30130E); themain transportation routes are illustrated in Fig. 1. Road
network data were used as a basis for calculating the costs of
truck transportation. The Finnish Road Administration
maintains a national road and street database called Digiroad
[9]. Digiroad describes the geometry and physical features of
the roads including, for example, the functional class of a road
and turning restrictions.
The cost calculations of train transportation were based on
railway network data obtained from the National Land Survey
of Finland[10]. Locations of railway terminals were provided
by the Finnish Rail Administration [11]. The number ofrailway
terminals was 24. The land area in North Karelia is 17 780 km2,
of which 84% is forest land[12]. Based on the road and railwaydata, the railroad density in North Karelia is 30 m km2 and
the road density is 2.0 km km2.
A grid of forest data with an interval of 500 m between the
grid points was created. Based on CLC2000 land use per land
cover classification [13] and the boundaries of conservation
and Natura 2000 areas, points outside of forestry land were
removed from the analyses. Subsequently, the average
Finnish harvesting conditions were assumed for each point
(Table 3). The roadside storages for transportation simulations
were placed for each grid point onto the nearest Digiroad
network location. In Finland, logging residues are collected
mainly in spruce-dominated final felling sites. The total
number of simulated roadside storages was 69 743.
3. Methods
3.1. Supply chains
Ten different supply chains for forest chips were compared in
this study (Table 4). In addition, 11 modifications of these
supply chains were produced for sensitivity analysis. Thesimulations of the ten basic supply chains represent the most
commonly used supply chains with average cost and effi-
ciency parameters and their combinations with railway
transportation.
In chains 1-6 the fuel source is logging residues from clear
cutting areas, whereas in chains 7-10 energy wood consists of
small-sized full trees from thinning operations. Chains 1 and 7
represent the most common supply chain in Finland, where
the energy wood is chipped at roadside directly into the truck
and transported to the plant. In chains 2 and 8 the chip truck
delivers the chips first to the railway terminal, where chips are
loaded onto train wagons for long-distance transportation to
the plant. Residues (Chain 3) and full trees (Chain 9) aretransported as loose material straight to the plant andchipped
there in a stationary chipper. In chains 4 and 10 loose material
is transported to the railway terminal, where it is chipped and
transported in a chip wagon to the plant. Residue bundles are
transported in timber trucks straight from roadside storage to
the plant for end-facility comminution in chain 5, and via
railway terminal in chain 6.
3.2. Cost calculations
3.2.1. Distance-independent costs
In the calculations the costs were divided into those that are
independent of the transportation distance (Table 5) and coststhat depend on the distance. Felling-bunching costs, hauling
costs in thinnings[14,15], and hauling costs in clear-cuts[16]
were all based on models. Bundling, roadside chipping and
terminal crushing costs were based on cost models developed
by the Finnish Forest Research Institute (Metla) [14], which
combine the results of several public research projects and
non-publiccase studies. For roadside chipping options, loading
of the truck includes only the waiting time cost of the truck
during chipping into load space. Chipping costs at the terminal
were assumed to be 70% of the roadside chipping costs due
to more efficient equipment and larger chipping volumes.
Typical loading and unloading times (Table 6) for trucks were
used [17,18]. Loading and unloading times for train wagonsfollowed the corresponding efficiencies for trucks, except
loading of chip wagons, where chipping into load space was
replaced by chipping and loading using a front loader. The
preparation times in terminal operations were about the same
for a truck as for a train with tenwagons. Thecosts for loading
and unloading operations were calculated by multiplying the
consumed timeby hourlycosts of the equipment(Table 6).The
hourly costs for trucks [17] were multiplied by the average
cumulative increase in unit costs (m3 km) for truck trans-
portation in the Finnish forest industry in 2004 and 2005, was
about 9.4% [1,19]. The estimated organization costs varied
between1.5 and2.5 m3, depending on the multiplicity of the
procurement chain.
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For the sensitivity analysis, improved supplychains were
produced. For bundle-based supply chains the truck and
wagon loads for bundled residues were increased by opti-
mizing the bundle dimensions in relation to the load space of
truck and train wagons. Shortening the bundles from the
average 3.11 m[18] into 3 m resulted in an increase in the
amount of bundles in the load from 60 to 72 bales and 17% by
volume. Train unloading times were reduced by 40% and
wagon costs by 15% for all train-based chains. Terminal chip-
ping costs for bundles were estimated at 50% of the costs of
roadside chipping of logging residues. The estimation is based
on efficient chipping (or crushing) machinery, larger chipping
volumes and better working conditions than in average road-
side storage. Chain 11 (opt) is a combination of optimized
bundle truck and optimized chip train supply chains.
Maximum truck payloads were based on Scandinavian
regulations, in which the maximum weight of a truck is 60
tonnes. This corresponds approximately to a 38 tonne
payload, depending on the truck type and how it is equipped[20]. In the sensitivity analysis, results were calculated for
trucks with a 40 tonne total mass limit and 25 tonne payload.
Truck load space was the limiting factor for all loose residue
and bundling options. The average basic density for logging
residues was 460 kg m3 (dry weight) and 398 kg m3 for full
trees from thinnings [18]. The density figures represent
average bundles delivered to the plant, where logging residue
bundles are spruce (Picea abies) dominant and full tree bundles
consist of a mixture of several tree species. For chipped
logging residues with an average 45% moisture content, the
limit for truck maximum weight reduced the payload from
54.0 m3 to 45.4 m3. Due to lower basic density and moisture
content (42%), the chipped full trees were able to fully utilize
Fig. 1e Location of the study area, studied CHP plants and main transportation routes in the study area. The grey area
represents the province of North Karelia. Coordinate system: ETRS-TM35FIN. Boundaries and railways: National Land
Survey of Finland, license MYY/179/06-V. Road network: The Finnish Road Administration/Digiroad 2006. Railway
terminals: The Finnish Rail Administration. Smaller picture: Boundaries: ESRI Data & Maps; National Land Survey of
Finland, license MYY/179/06-V.
Table 3e Average conditions in felling sites used inharvesting cost calculations.
Final Fellings Pre-commercial thinnings
Area, ha 1 Area, ha 2
Forwarding distance, m 150 Forwarding distance, m 200
Moisture of green
logging residue
(in forwarding), %
55 Moisture of fresh full
trees (in forwarding), %
55
Recovery of green
logging residues, %
70 Average full tree volume,
dm360
Accumulation of
industrial round
wood, m3 ha-1
266 Accumulation of
small-sized energy
wood, m3 ha-1
33
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the maximum load space. The effect of drying the fuel from
45% moisture content to 35% was calculated for normal and
reduced (25 t) payloads of chipped logging residues. Changes
in the productivity of chipping due to drier raw material werenot taken into account.
3.2.2. Distance-dependent costs
There were three distance-dependent work phases: driving
a truck without a load, driving a loadedtruck,and transporting
by train. The GIS model involved finding out the fastest routes
from each of the generated roadside storage piles to theplants.
The first plant (pulp mill) is located in Uimaharju village in the
centre of North Karelia and the second plant (pulp and paper
mill) in the town of Varkaus, about 70 km from the south-west
border of North Karelia (Fig. 1).
The distances from the roadside storages to the plants
were calculated with Network Analyst extension in ArcGIS 9.2.
Subsequently, truck driving times were predicted with models
estimated for timber trucking[21]and driving the route two
times: empty and with a full load. The cost of driving (m3)
was calculated using Equation(1)as follows:
drivingcost hourly cost,
driving time
60truck load size
(1)
where hourly_cost hourly total cost of the truck,
driving_timedriving timein minutes, andtruck_load_size size
of a truck load (Table 6).
In the supply chains including train transportation, the
driving cost of a truck was calculated from each point to the
three closest railway terminals. Furthermore, train trans-
portation cost was estimated from each terminal to the plants.
The reason for calculating the costs via three terminals
instead of only the closest one was that the route via the
Table 4e The studied supply chain scenarios.
Supply chain Description Note
1 Chip truck Clear cutting e Chipping at roadside landinge Truck
transportation
Reference chain
2 Chip train Clear cutting e Chipping at roadside landinge Truck
transportatione Train transportation
3 Loose truck Clear cutting e
Loose residuee
Truck transportatione
Crushing at plant only to Uimaharju
4 Loose train Clear cutting e Loose residuee Truck transportatione
Chipping at station e Train transportation
5 Bundle truck Clear cutting e Bundlinge Truck transportatione
Crushing at plant
6 Bundle train Clear cutting e Bundlinge Truck transportatione Train
transportatione Crushing at plant
7 Chip truck (thinn) Thinning e Chipping at roadside landinge Truck
transportation
8 Chip train (thinn) Thinning e Chipping at roadside landinge Truck
transportatione Train transportation
9 Loose truck (thinn) Thinning e Loose residuee Truck transportatione
Crushing at plant
only to Uimaharju
10 Loose train (thinn) Thinning e Loose residuee Truck transportatione
Chipping at station e Train transportationSensitivity analysis:
11 Bundle truck chip train Clear cuttinge Bundlinge Truck transportation -
Terminal chipping - Train transportation
72 bundles in truck, wagon costs
reduced 15% and efficient terminal
operations
2 Chip train (opt) Clear cutting e Chipping at roadside landinge Truck
transportatione Train transportation
wagon costs reduced 15% and
efficient terminal operations
4 Loose train (opt) Clear cutting e Loose residuee Truck transportatione
Chipping at station e Train transportation
wagon costs reduced 15% and
efficient terminal operations
5 Bundle truck (opt) Clear cutting e Bundlinge Truck transportation e
Crushing at plant
72 bundles in truck, efficient
unloading at plant
6 Bundle train (opt) Clear cutting e Bundlinge Truck transportation e Train
transportatione Crushing at plant
wagon costs reduced 15% and
efficient terminal operations
1 Chip truck (40 t) Clear cutting e Chipping at roadside landinge Truck
transportation
40 t max truck weight
2 Chip train (40 t) Clear cutting e Chipping at roadside landinge Trucktransportatione Train transportation
40 t max truck weight
5 Bundle truck (40 t) Clear cutting e Bundlinge Truck transportatione
Crushing at plant
40 t max truck weight
6 Bundle train (40 t) Clear cutting e Bundlinge Truck transportatione Train
transportatione Crushing at plant
40 t max truck weight
1 Chip truck (dry) Clear cutting e Chipping at roadside landinge Truck
transportation
35% MC
1 Chip truck (40 t, dry) Clear cutting e Chipping at roadside landinge Truck
transportation
40 t max truck weight and 35% MC
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closest terminal does not always minimize the total cost. In
some cases, train transportation distance could be shortened
considerably if slightly longer truck transportation routes
were selected. Consequently, the cheapest route of the three
was selected for a certain point.
As empirical data and models for train costs were notavailable,asimplecostmodelforasinglewagonwasfitted.The
shape of the cost model follows the train transportation cost
curves of the train cost simulation model developed for the
forest industry [22]. In reference to [22], the average trans-
portationdistance was290 km andwhen the distance changed
to100 km the relativehauling costs changed byabout 20%. The
relative costs were transformed to absolute costs (m3 and
perwagon) byfittingthe curve to average train transportation
costs in the Finnish forest industry to the 2004and 2005 values
[1,19]. Subsequently, thecost of train transportationper wagon
(per wagon) was calculated by Equation(2)as follows:
train cost wagon 160 0:
89,distance (2)
where
distance train hauling distance (km) from a terminal to
a plant.
Furthermore, the cost of train transportation per volume
( m3) was calculated by dividing the wagon cost by the
wagon load volume.
3.2.3. Total cost
For each point in the grid, the total cost was computed by
totaling the distance-independent and distance-dependent
costs. Formap output thepoint data were interpolated by using
naturalneighboralgorithm [23].Subsequently,theareasoutside
forestry land were excluded from the resulting raster surface.
In order to model the dependence between transportation
distance and total costs, regression curves were fitted to the
point-level data. The curve form was decided based on visual
goodness of fit and coefficient of determination. The share of
truck and train transportation with a certain total trans-
portation distance varied, causing considerable variation in
Table 5e Summary of the different work phases related to the chains and the respective calculated costs in mL3.Distance-dependent phases are marked with f(d).
Work phase Supply chain
1 2 3 4 5 6 7 8 9 10
Felling - bunching 12.9 12.9 12.9 12.9
Bundling 7.6 7.6
Hauling 5.9 5.9 5.9 5.9 2.7 2.7 4.7 4.7 4.7 4.7Chipping at roadside landing 6.8 6.8 6.1 6.1
Driving without load f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d)
Loading of truck 1.6 1.6 3.0 3.0 1.6 1.6 1.5 1.5 3.0 3.0
Driving loaded f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d)
Unloading of truck 0.7 0.7 2.4 2.4 1.1 1.1 0.6 0.6 2.4 2.4
Chipping at station 4.8 4.3
Loading of train 0.5 0.5 1.6 0.5 0.5
Train transportation f(d) f(d) f(d) f(d) f(d)
Unloading of train 0.3 0.3 1.1 0.3 0.3
Crushing at power plant 1.7 1.7 1.7 1.7
Other costs 2.0 2.5 1.5 2.0 2.0 2.5 2.5 2.5 2.0 2.0
Total of distance-independent
costs, m317.1 18.4 14.6 18.9 16.6 19.8 28.4 29.1 26.7 30.1
Sensitivity analysis:
Work phase Supply chain
11opt 2opt 4opt 5opt 6opt 1 40t 2 40t 5 40t 6 40t 1 dry 1 40t dry
Felling - bunching
Bundling 7.6 7.6 7.6 7.6 7.6
Hauling 2.7 5.9 5.9 2.7 2.7 5.9 5.9 2.7 2.7 5.9 5.9
Chipping at roadside landing 6.8 6.8 6.8 6.8 6.8
Driving without load f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d)
Loading of truck 1.4 1.6 3.0 1.4 1.4 1.8 1.8 1.8 1.8 1.8 1.7
Driving loaded f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d) f(d)
Unloading of truck 0.9 0.7 2.4 0.9 0.9 0.9 0.9 1.1 1.1 0.9 0.8
Chipping at station 3.4 3.4
Loading of train 0.3 0.3 0.3 0.4 0.5
Train transportation f(d) f(d) f(d) f(d) f(d)Unloading of train 0.2 0.2 0.2 0.3 0.3
Crushing at power plant 1.7 1.7 1.7 1.7
Other costs 2.5 2.5 2.5 2.0 2.5 2.0 2.5 2.0 2.5 2.0 2.0
Total of distance-independent costs, m3 18.9 18.0 17.7 16.2 17.4 17.4 18.6 16.8 17.3 17.4 17.2
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Table 6e
Parameter values used in calculating transportation costs. TruLS [Size of a truck load, TruLA [Preparation time of loaTruL[Timeto load or chip into a truck, TruUA [Preparation time of unloading a truck, TruCD[Hourly cost of a truck when drivingloading or unloading, WLS [Size of a wagon load, TrnLA [Preparation time of loading a train, TrnL [Time to load a wagon, Trna train, TrnU [Time to unload a wagon, BCL [Hourly cost of a bulldozer when loading or unloading a train.
Chain TruLS TruLA TruL TruUA TruU TruCD TruCL WLS TrnLA TrnL
m3 min load1 min m3 min load1 min m3 h-1 h1 m3 min train1 min m
1 Chip truck 45.4 18 1.5 20 0.4 79.8 49.2
2 Chip train 45.4 18 1.5 20 0.4 79.8 49.2 57.0 25 0.4
3 Loose truck 28.4 15 2.9 20 2.0 82.0 53.6
4 Loose train 28.4 15 2.9 20 2.0 82.0 53.6 57.0 25 0.4
5 Bundle truck 32.2 18 1.3 25 0.4 79.8 52.5
6 Bundle train 32.2 18 1.3 25 0.4 79.8 52.5 32.2 25 1.7
7 Chip truck (thinn) 54.0 18 1.5 20 0.4 79.8 49.2
8 Chip train (thinn) 54.0 18 1.5 20 0.4 79.8 49.2 57.0 25 0.4
9 Loose truck (thinn) 28.4 15 2.9 20 2.0 82.0 53.6
10 Loose train (thinn) 28.4 15 2.9 20 2.0 82.0 53.6 57.0 25 0.4
11 Bundle truck chip
train (opt)
37.6 18 1.3 25 0.4 85.3 52.5 57.0 25 0.4
2 Chip train (opt) 45.4 18 1.5 20 0.4 79.8 49.2 57.0 25 0.4
4 Loose train (opt) 28.4 15 2.9 20 2.0 82.0 53.6 57.0 25 0.4
5 Bundle truck (opt) 37.6 18 1.3 25 0.4 85.3 52.5
6 Bundle train (opt) 37.6 18 1.3 25 0.4 85.3 52.5 37.6 25 1.7
1 Chip truck (40 t) 29.9 18 1.5 20 0.4 79.8 49.2
2 Chip train (40 t) 29.9 18 1.5 20 0.4 79.8 49.2 57.0 25 0.4
5 Bundle truck (40 t) 29.9 15 2.9 20 2.0 79.8 53.6
6 Bundle train (40 t) 29.9 15 2.9 20 2.0 79.8 53.6 57.0 25 0.4
1 Chip truck (dry) 53.7 18 1.5 20 0.4 79.8 49.2
1 Chip truck (40 t, dry) 35.3 18 1.5 20 0.4 79.8 49.2
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the total cost with the train-based chains. The maximum
feed-in truck transportation from roadside storage to railway
terminal was reduced to 30 km. Consequently, only points
having a maximum truck transportation distance of 30 km
from roadside storage to railroad terminal were considered
with train-based chains. Roadside storages within a 30 km
truck transportation distance to the railroad terminal covered
about 65% of all the roadside storages.
4. Results
4.1. Cost models
With the chains based only on truck transportation, cubic
curve form was found to give the best fit (see an example in
Fig. 2) for the model for estimating total costs. The coefficient
of determination was 1.00 for all the truck chains. For the
procurement chains based on both truck and train trans-
portation, linear function form was selected (see an example
inFig. 3). The coefficient of determination varied between 0.40and 0.90.
4.2. Total costs
The reference supply chain (Chain 1) chipping at roadside
storage and transportation of chips in full truck and trailer
units to the plant was the most cost-efficient alternative for
transportation distances between 60 and 160 km (Fig. 4). For
shorter distances, loose residue trucks combined with chip-
ping at the plant was the least expensive alternative. The total
costs of the supply chains with truck transportation were
much more sensitive to transportation distance than the
train-based chains, especially for loose residues and bundles,which were underutilizing the payload capacity of a truck.
Chipping at roadside storage and transportation as chips by
truck and train was the most competitive train option, when
the maximum truck transportation was limited to 30 km. The
total costs of the train transportation chain were lower than
the costs of the chipping at the roadside and truck option at
about a 160 km distance. Trucking of loose residues to the
railway terminal for chipping combined with train trans-
portation was more expensive than the chipping at the road-
side and train option, but the difference was rather small,about 1.5 m3. Due to the lower payload, the costs of bundle
trucks were higher than those of chip trucks. Train trans-
portation of bundles was the most expensive alternative.
For energy wood supply chains from thinnings, the total
costs were over 11 m3 higher compared to the same
transportation method for logging residues (Fig. 5). The truck
transportation cost curve for chips from full trees is slightly
less sensitive to distance than for chips made of logging
residues. The costs of transporting loose full trees exceeded
the costs of roadside chipping and truck combination at about
a 30 km distance. The most competitive train transportation
option based on chipping at the roadside offered the lowest
total costs of the studied thinning supply chains when thetransportation distance exceeded 145 km.
The spatial variation of the total supply chain costs for the
Uimaharju plant is illustrated in Fig. 6. For pure truck-based
transportation options like chain 1 (Chip truck) the costs are
increasing as a function of the total transportation distance.
For truck and train combinations, like chain 2 (Chip train), the
low-cost areas are located near the railway terminals. The
same pattern is clearly seen inFig. 7, where the lowest cost
supply chain options for Uimaharju are illustrated. At short
distances, the loose residue option with crushing at plant (3
Loose truck) results in the lowest total costs. Further away
chipping at the roadside landing and transportation by truck
is the cheapest. When the total transportation distance is long
Fig. 3e
Point-level data of 2 Chip train supply chain toUimaharju with the fitted linear curve. Transportation
distance includes both truck and train transportation, and
the maximum truck transportation distance is limited to
30 km.
Fig. 2e Point-level data of 1 Chip truck supply chain to
Varkaus with the fitted cubic curve.
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15
17
19
21
23
25
27
29
31
33
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190
Transportation distance, km
Totalcost,m
-3
1 Chip truck
2 Chip train
3 Loose truck
4 Loose train
5 Bundle truck
6 Bundle train
Fig. 4 e Total costs of basic supply chains of logging residues as functions of transportation distance to Uimaharju.
15
20
25
30
35
40
45
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190
Transportation distance, km
Totalcost,m
-3 1 Chip truck
7 Chip truck (thinn)
8 Chip train (thinn)
9 Loose truck (thinn)
10 Loose train (thinn)
Fig. 5e Total costs of supply chains of full trees from thinnings as functions of transportation distance to Uimaharju. The
curve of 1 Chip truck for logging residues is plotted as a reference.
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but the distance to the nearest railway terminal is short, the
chipping at roadside followed by truck and train trans-
portation is the most cost-efficient alternative. The longer the
total distance, the larger the cost-competitive area around
a railway terminal.
In long-distance transport of logging residues from North
Karelia to Varkaus, the reference chain (1 Chip truck) was the
most cost-efficient until about 160 km. For longer trans-portation distances, chipping at the roadside combined with
truck and train transportation offered the lowest costs. For
most of the forest area in North Karelia, the truck and train
combination was the cheapest supply chain at Varkaus
(Fig. 8).
4.3. Improved supply chains
Optimization of bundle dimensions to fully utilize the load
space of a timber truck remarkably lowered the transportation
costs for bundle options. Additionally, when the efficiency of
unloading the truck was improved, the improved bundle truck
transportation option (5 Bundle truck (opt)) offered onlyslightly higher costs than loose residue truck until about
65 km (Fig. 9). At about a 65 km distance, the chip truck chain
beats both loose truck and optimized bundle truck, being the
most cost-efficient supply chain until about 120 km. When the
cost efficiency of train transportation was improved by 15%,
together with efficiency improvement in terminal operations,
the chipping at the roadside and train transportation option
(2 Chip train (opt)) became the most cost-efficient alternative
at about a 90 km distance. Chain 11, which combines the
bundle truck and chip train transportation became cheaperthan option 5 Bundle truck (opt) at a distance of 105 km, but
did not reach the cost of other train options.
In general, simple supply chains, like truck transport of
loose residues and chipping at the plant, offer the lowest total
costs at short transportation distances. For long distances, the
importance of packing density and the ability to use full load
capacity (t) become more important. Additional work phases
cause additional costs, which should be compensated by
improved efficiency in other phases in the supply chain. The
extra unloading and loading costs resulting from train trans-
portation are not fully compensated by lower transportation
costs at a 50 km distance, but at 200 km the total costs become
lower than in plain chip truck transportation (see chains 1 and2 inFig. 10). Bundling remarkably increases the roadside costs
for energy wood. However, haulage costs are significantly
Fig. 6e Total cost to Uimaharju with the chain 1 Chip truck scenario (left) and the chain 2 Chip train scenario (right).
Coordinate System: ETRS-TM35FIN. Boundaries and railways: National Land Survey of Finland, license MYY/179/06-V.
Road network: The Finnish Road Administration/Digiroad 2006. Railway terminals: The Finnish Rail Administration.
Non-Forestry Land: Finnish Environment Institute, partly Ministry of Agriculture and Forestry, National Land Survey,
Population Register Centre. Conservation areas: Metsahallitus, Finnish Environment Institute. Natura 2000 areas:
Finnish Environment Institute.
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lowerthanforlooseloggingresiduesandfulltrees(seeTable5).
Consequently, more efficient loading andunloading anduse of
efficient end-facility crushing brings cost savings to these work
phases, and the distance-independent costs for the plain
bundle truck option are lower than for the chip truck-based
supply chain. The total costs remain higher than in the most
cost-efficient roadside chipping alternatives because of lower
payload.
4.4. Effect of reduced payload and moisture
When the trucks total weight was reduced to 40 t, corre-
sponding to 25 t payload, the weight was the limiting factor at
45% moisture content for all of the studied supply chains,
except for the loose residues. This strongly reduced the cost-
competitiveness of the chip truck-based supply chains.
Consequently, trucking of loose residues became the most
competitive option up to 120 km (Fig. 11). The reduced payload
for trucks improved the relative cost-competitiveness of rail-
road transportation. Roadside chipping combined with train
transportation remained the most competitive train trans-
portation option, offering the lowest costs for transportation
distances of 120 km or more. Bundle truck offered lower costs
than roadside chipping and truck transportation. Roadside
chipping combined with truck and train transportation (2 Chip
train (40 t)) became as expensive as roadside chipping and
truck transportation (1 Chip truck (40 t)) at an 80 km distance.
Lowering the moisture of chips from 45% to 35% before truck
transportation reduced the transportation costs by 0.8 m3
for a 70 km transportation distance. When using the 60 t
maximum weight, the corresponding cost difference was
slightly bigger. In general, the transportation costs with 40 t
trucks were higher and differences between supply chains
smaller compared to conditions, where 60 t total weights fortrucks is allowed. As the truck dimensionsand maximum load
volumes were not reduced compared to Scandinavian stan-
dards, the results cannot be generalized for areas having
different standards for truck dimensions.
5. Discussion
5.1. Overview of results
In Finnish conditions, the looseresidueoption withend-facility
chipping was the cheapest optionunder short distances, while
for medium distances the chipping at roadside together with
Fig. 7 e The cheapest procurement chains at Uimaharju
plant.
Fig. 8 e The cheapest procurement chains at Varkaus
plant.
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truck transportation offered the lowest costs. Train trans-
portation became competitive when the transportation
distance exceeded145 km for chipped full treesand 160 km for
logging residues, when maximum truck transportation to the
train station waslimited to 30 km.When thetruckpayload wasreduced from 38 tonnes to 25 tonnes, train transportation
offered the lowest costs at a 90 km distance.
The threshold distance where the costs of the loose residue
option and chipping at the roadside were equal was about
65 km for logging residues and about 30 km for full trees,
which is in line with results by Asikainen[24], who stated that
distances up to 50 km are suitable for loose residue trans-portation. The difference between the two sources of forest
chips is mainly based on the higher efficiency of roadside and
15
17
19
21
23
25
27
29
31
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190
Transportation distance, km
Totalcost,m-3
1 Chip truck
6 Bundle train (opt)
2 Chip train (opt)
4 Loose train (opt)
5 Bundle truck (opt)
3 Loose truck
11 Bundle truck chip train
Fig. 9 e Total costs of the optimized supply chains of logging residues as functions of transportation distance to Uimaharju.
The curves of chain 1 Chip truck and 3 Loose truck scenarios are plotted as reference.
Fig. 10e Total cost structure of selected supply chains for logging residues at 50 km and 200 km transportation distances
(scenarios: 1 Chip truck, 2 Chip train, 3 Loose truck, 4 Loose train, 5 Bundle truck and 15 Bundle truck (opt)). Bundling costs
are included in roadside cots in supply chains 5 and 15 (opt).
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terminal chipping of full trees compared to chipping of logging
residues, and partly due to differences in basic densities and
moisture contents of the fuels. At zero stumpage prices, theroadside cost for thinning wood was about 11.3 m3 higher
than for logging residues.
Chipping at roadside and truck transportation to the plant
is the most common supply chain for logging residues and
small-sized trees in Finland[5,25]. It seems to offer the lowest
supply costs in quite a wide range of transportation distances,
being relatively competitive in wide range (30e200 km) of
distances. The results presented here are based on optimal
conditions, when a separate chipping unit and full-sized truck
with full loads are used, which may overestimate the cost-
competetiveness of roadside chipping. The challenge of this
kind of hot supply chain is how to avoid un-productive
waiting hours of a chippere
truck combination. The work flow,including loading and unloading procedures and chipping
itself, as well as the technology (chippers, self-unloading
trucks) for roadside chipping supply chain are mature and
tested. Thus, they probably include less development poten-
tial than some other supply chains.
The truck weight limit reduced the maximum volume for
chips from logging residues by 20%. Lowering of the moisture
content during storage offers an opportunity for reducing
costs in chip truck transportation. Reduction of moisture
content from 45% to below 35% allows for the use of the full
load space capacity of 60 tonne chip trucks with the fuel
parameters used in these calculations. The corresponding
reduction of distance-dependent costs would be about one
euro per m3 for a 100 km transportation distance. Drying may
reduce the efficiency of chipping by slowing down the feeding
speed of the chipper and increased storing time also causeshigher biomass losses [26]. On the other hand, drier chips
tolerate longer storing times in later phases in the delivery
chain. The fuel quality of drier chips is also better; dry fuel
allows for a higher boiler capacity during peak consumption
and causes less freezing-induced problems in feeding
systems.
The use of roadside chipping combined with train trans-
portation sets high requirements for chip storage facilities at
railway terminals. The surface should be paved to allow effi-
cient re-loading and to prevent stones and other impurities
from mixing with the fuel. A constantly used chip storage area
should preferably be covered to avoid rain and snow during
storing. The feasible storage time of moist chips is still onlya few weeks to avoid the risk of composting. Storing as chips
at roadside storage is not feasible due to material losses,
impurities and extra loading costs on top of the typical road-
side chipping procedure, in which the chipper blows the chips
straight into the trucks load space.
5.2. Improving the overall efficiency of supply chains
Delivery as chips is well suited to small plants that cannot
afford costly end-facility chipping. Loose residue supply
chains are the most cost-efficient for short distance trans-
portation from the forest to fuel terminals equipped with
stationary or mobile chippers or crushers, and into plants
15
17
19
21
23
25
27
29
31
33
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190
Transportation distance, km
Totalcost,m
-3
1 Chip truck
1 Chip truck (40 t)
2 Chip train (40 t)
3 Loose truck
5 Bundle truck (40 t)
1 Chip truck (dry)
1 Chip truck (40 t,dry)
Fig. 11e Total costs of supply chains of logging residues as functions of transportation distance to Uimaharju, when the
truck maximum weight is reduced to 40 tonnes. The curves for scenarios for chain 1 Chip truck, the corresponding chain
with dried chips (1 Chip truck (dry)) and Chain 3 Loose truck are plotted as reference.
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equipped with an end-facility comminution unit. Trans-
portationof loose material increases traffic andrequires larger
storing area, and slow unloading times cause logistical prob-
lems, especially in large bioenergy installations. Large plants
are often located in city areas and typically have no place for
fuel storage or even for end-facility comminution. Also,
comminution may not be accepted in urban areas because of
noise and dust problems.Terminal comminution of stumps usually takes place
before long-distance transportation to increase the load
density and to hasten the operations in the plant. Loose resi-
dues and stumps canbe transported in similar trucks andboth
fuel sources are well suited to logistic systems based on local
fuel collection terminals. Thus, loose residue transportation
may become more popular in Finland because of increasing
useof stump wood. Some extra savings using the loose residue
to terminal supplychaincould be gained by transportingsmall
roadside storage piles during summer and autumn to larger
fuel terminals to avoid the cleaning costs of rarely used forest
roads. More efficient drying in large, open terminal storage
facilities could also bring some extra benefits.Bundling increases efficiency in forwarding and decreases
the need for storage area compared to loose residues. Bundles
are fast to load and unload and they can be transported with
normal timber trucks, which leads to better possibilities for
avoiding empty truck driving than the use of trucks designed
only for energy wood transportation. Current residue bundles
require the most heavy mobile chippers or end-facility
comminutionattheplant,whichhinderstheiruseinsmalland
mediumsize plants. Plastic bundling stringsespecially require
efficient chipping to avoid problems on conveyors at the plant
that can be caused by loose pieces of strings. Compact and
easy-to-handle bundles can reduce moisture content during
storing, although decaying of bundle strings may cause prob-lems during repeated loading and unloading [18,27]. The
overall efficient handling characteristics make bundles suit-
able forterminal operations, resulting in lowest terminal costs
(chipping, unloading and loading) compared to all studied
supply chains (Fig. 10). If the bundle truck bears the same load
as the chip truck, the bundle truck chain is competitive with
the roadside chipping chain in cost efficiency. Improvements
in efficiency can still be gained by optimizing bundle dimen-
sions in respect to transportation units. In addition, some
improvement can likely be gained in bundling productivity by
lowering the bundler investment costs and possibly also by
increasing the density of a single bale.
Combining the bundling of residues together with chippingat the railway terminal and long-distance transportation as
chips in railway wagons may be an interesting option for
further development. The terminal chipping costs would
probably be lower than those presented here, because it is
faster to feed bundles into the chipper than it is to feed resi-
dues. New bundler technology designed for thinnings is
already in the demonstration phase [28], which opens new
possibilities for energy wood logistics.
5.3. Implications of results
The growing needfor biofuels and the geographical imbalance
between energy wood supply and demand will presumably
increase the need for long-distance transportation of wood
fuels within a few years. For long distances, railroad, together
with waterways, offer the most cost-competitive and energy-
efficient transportation means. Proper infrastructure of
railway terminals for storing, comminuting and loading
together with optimized technology and integration with
industrial timber logistics can remarkably reduce the logistic
costs of wood fuel supply. Also, the growing lack of skilledtruck drivers and demands for improving the safety of road
traffic are creating additional pressures to move timber
transport from roads to railroads. A major obstacle to
increased use of railway transportation for energy wood in
Finland is currently the lack of railway connections and
terminals at energy plants. Thus, when designing any new
large installations for wood energy production, railway and
waterway connections are highly recommended to secure
cost-efficient fuel supplies.
The terminal phase in the supply chain causes extra costs
compared to the straight chain from forest into plant; an extra
stop causes extra unloading and loading of fuel and usually
the total transportation distance increases. The fuel terminalcan be located near the end-users (distribution terminal) or in
areas where the fuel sources are located (fuel collection
terminal). Similar to Johansson et al. [27], the present study
found that supply chains straight from the forest into the
plant resulted in lower costs than those using the terminal
and a combination of different transportation means for short
and medium distances. However, in long-distance trans-
portation the use of railway terminals for collecting fuels
seems to reduce the supply chain costs. Terminals also
provide possibilities for new logistical cost reductions due to
specialized heavy-duty technology. Cost and energy-efficient
railway transportation is well suited to the demands for
reducing the ecological footprint in timber transportation[8],and the growing fuel prices are likely to improve the
competitiveness of railway transportation against more
energy-intensive means of transport.
Terminals are needed for processing fuel sources like
stump wood and recycled wood and for producing mixed
biofuels like wood-straw and wood-peat mixtures before
deliveries to power plants. Large energy generation units and
increased competition forfuel resources are boosting the need
for buffer storage for securing the fuel supply during peak
consumption[29]and disturbances in energy wood markets.
This is likely to lead to the increased use of terminals. When
terminals are already needed for securing the fuel supply, it
would be more logical to consider which terminal-basedlogistic chains are the most efficient for forest fuels, instead of
just comparing terminal chains with the most cost-efficient
supply chains.
5.4. Conclusions
This study suggests that fuel collection terminals linked to
railway transportation have great potential as alternatives to
truck transportation for distances even under 100 km, if any
(buffer) storageis needed beforefinal delivery to the plant. The
train-based supply chains still include remarkable develop-
ment potential. Terminals also offer new business opportu-
nities for improving the fuel quality and overall reliability of
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the supply chain, and possibilities to divide and direct various
qualities to the right consumers. Increasing transport
volumes and synergies between fuelwood and industrial
timber transportation open possibilities for new business
models in terminal operations and wood supply services.
The results of this study are only tentative and simulations
are based on average Finnish conditions. Because of the
missing empirical data, several cost factors were based onassumptions. This especially concerns the cost factors of
railway transportation, the overhead costs of different supply
chains, the costs of terminal operations (e.g., the costs of
heavy mobile crushers), and the share of empty truck driving
in energy wood transportation. The costs of train-based
supply chains were based on the assumption that already
existing stations could be used as loading terminals. Thus, the
investment costs for terminals were not included. Even with
the same productivity and cost parameters, the result can be
different in other areas having different logistic infrastruc-
ture, distribution of wood resources and energy plants, wood
species (e.g., varying densities) and natural environment.
Also, the dimensions and maximum load capacity of theavailable trucks can vary significantly.
Supply costs and the availability of fuel can be successfully
estimatedwith the logisticalmodeldeveloped in thisstudy.The
model can be further developedusing several methods to better
utilize the services of GIS; forexample, the transportation time
sub-models could be developed to utilize the Digiroad data
more efficiently, so that time estimates are calculated for each
road section of the route and road classification data is used as
an independent parameter, instead of using only the total
distance between roadside storage and plant. Truck fuel
consumption represents a large share of transportation costs.
Thus, fuel consumption models, based on road classification
andcurrent load, would helpto produce morepreciseestimatesof transportation costs and CO2 balances of different supply
chains. Finally, the roadside costs of energy wood could be
estimated using harvesting removal (m3 ha1), size of harvest-
ing area, and average tree volume (in thinnings) as an inde-
pendent value instead of using the average stand conditions.
Acknowledgements
The authors would like to thank Mr. Juha Laitila from Metla for
providing the cost calculators for the study, and Dr. David
Gritten and Ms. Brenna Lattimore for the linguistic revision ofthe manuscript. We also thank Prof. Timo Pukkala, Prof. Antti
Asikainen and Mr. Heikki Parikka for their valuable comments
on the manuscript. The article was finalized with the support
of GLOENER project, which was funded by the Climbus
Research Programme in the Finnish Funding Agency for
Technology and Innovation, Tekes.
r e f e r e n c e s
[1] Kariniemi A. Puunkorjuu ja kaukokuljetus vuonna 2005.Metsatehon Katsaus 2006;19:4. Summary: Timber harvesting
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