SOLAR ENERGY – AN OPTION FOR SAVING COSTS IN LOGISTICS

Cost of transporting raw materials, fuels (coal, gas, and petrol), spare parts, components, and semi-finished good from source of supply and finished goods from the manufacturing units to market is a substantial part of the total cost of finished product. Selecting strategic location for supply chain activities is the trend in the global supply chain. Companies are buying materials from different parts of the world where raw material reserves are located to reduce the cost of the materials. The manufacturing facilities are also located near the source of raw materials to save on the cost of transportation of materials. In some countries, the cost of labor is lower than other countries. For example, labor is cheaper in China, India, Malaysia and Vietnam in comparison to European countries. Global companies are taking advantage of cheap materials from the places of natural deposits and low cost of manpower to make their supply chain more economical and competitive. Transportation is a major component of the supply chain cost.

Renewable Global Status Report 2015

According to a report ‘Renewable Global Status Report 2015’ published by Energy Policy Network for the 21st century (REN21), Paris, France; transport accounts about 30% of the global energy demand. The road transport accounts 81.4% of the transportation energy use followed by 8% by air transport, 4.5% by water, 3.8% for pipeline and 2.3% for rail. Water transport being the cheapest mode of transportation, is used maximum in global supply chain due to transportation of large quantities of raw materials, fuel and finished goods from one part of the globe to another.

According to a report ‘Renewable Global Status Report 2015’ published by Energy Policy Network for the 21st century (REN21), Paris, France; transport accounts about 30% of the global energy demand. The road transport accounts 81.4% of the transportation energy use followed by 8% by air transport, 4.5% by water, 3.8% for pipeline and 2.3% for rail. Water transport being the cheapest mode of transportation, is used maximum in global supply chain due to transportation of large quantities of raw materials, fuel and finished goods from one part of the globe to another.

Solar energy use    

Due to limited availability of crude oil in the world and increasing demand all over the world, focus is on to look for alternative source of energy supply. Renewable energy sources are being tapped increasingly to partly meet the demand for energy in various applications in industrial, housing and transport sectors. The use of renewable transport fuels is being encourage through regulatory measures and fiscal incentives. Solar energy, which is available in abundance in many areas, where sun is available for long hours during the day, is a potential source of energy. Solar energy is widely used in industry, office complexes and residential buildings for heating and cooling applications. Power sector, agriculture and other industrial sector are using solar energy very effectively. Supply chain is looking for opportunities to use solar energy for reducing the cost of transportation.

The case of ‘Solar Sal’ vessel carrying Cargo

According to a report by MH&L Staff (November 11, 2015), the solar electric driven vessel ‘Solar Sal’ transported 4 tons of cargo in October 2015 from Lockport N.Y. to Mechanicville facility of Cascades Tissue Group in New York. The vessel covered a distance of 300 miles in Erie Canal to deliver a shipment of recycled cardboard. The vessel is the first-ever cargo powered by the sun only without using any fossil fuel. The vessel can reach a speed up to 7 knots with a sustainable 5 knot cruising speed by using 4 kW of power. On board batteries have enough power to cover additional 50 mile run after dark. Innovative method of transporting the cargo to reduce the impact on environment is now available as large quantity of air, water and energy is consumed by paper and packaging industry.

Solar Sal can accommodate a 12 ton payload and can be used for multiple uses such as short distance cargoes of heavy goods, recyclables, trash, or even fuel oil.

Optimization of logistics cost

The cost of solar energy being very low compared to fossil fuels offers great opportunity to save on cost of logistics. There can be many other possible uses to use Solar Sal such as using it as a platform for floating markets for the farmers. Transportation of cargos through canals can exploited at a very attractive cost


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