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Robert.Jervis_43227 Jan 27

Tetley bags a green supply chain through port centric logistics with Port of Tyne

tetleys tea
“The port centric services we offer, combining 3PL and port services for international distribution, delivers great value to Tetley”
Identifying ways to minimise road transportation where viable alternatives exist is a central thread of the UK’s ongoing drive to ensure a green economic recovery after the Covid-19 pandemic. Adopting a ‘port centric logistics’ strategy and swapping trucks for a coastal feeder service are two good examples to consider, as Tetley recognised well before ‘port centric logistics’ had even been coined by supply chain specialists. 
 
As the 2nd largest tea brand globally, Tetley has a heritage spanning more than 180 years and is highly regarded for its sustainability programmes. After joining the Tata Consumer Products family in 2000, the Tetley brand has gone from strength to strength, with a presence in over 40 countries and millions of cups of Tetley tea brewed every day.
 
Part of Tetley’s success can be attributed to its long-term partnership with the Port of Tyne. Over the past 15 years, the company has honed a highly cost efficient and environmentally friendly warehousing and distribution strategy, which operates around the port.  Shipping now accounts for 95% of Tetley’s inbound and outbound transportation activities, with a process that starts thousands of miles away in the Asian and African continents. Here Tetley buys millions of kilos of tea leaves every year and these raw materials are packed into 60kg sacks, loaded onto containers and shipped into South Shields (GBSSH), where the goods are stored in a specialist Port of Tyne warehouse to maintain the quality and freshness of the tea.
 
It’s a very finely tuned operation and the whole journey takes around 5 weeks. Each inbound container load contains 440 sacks to be offloaded until required by Tetley’s manufacturing operations. Shipping efficiency has been carefully optimised, with the introduction of slipsheets to remove any requirement for palletisation. By avoiding the use of pallets, Tetley can fully pack its containers from floor to ceiling, increasing the amount of tea shipped per container by 10%. As fewer containers are needed, this saves on transportation costs and helps improve Tetley’s carbon footprint. Using the slipsheet method also means Tetley avoids the shipping and disposal of 831,600 kgs of wood per annum used for the construction of pallets, saving 457 trees per annum.
 
The environmental and cost savings achieved by working with the Port of Tyne continue right down Tetley’s supply chain. Each day, Tetley’s outsourced warehouse operations team at the Port receives an order for the precise tea blends scheduled by production.  The Port of Tyne team picks the tea varieties in the quantities needed and loads the order onto one of the Port’s own trucks and trailers, for delivery to Tetley’s manufacturing plant at Eaglescliffe. The same process works in reverse for the export of finished goods to Canada and Europe. The Port’s trucks are reloaded with finished goods, which are stored in the Port’s warehouse for loading into containers for export from South Shields.
 
Technology plays an important role in enabling this environmentally friendly supply chain process and Tetley and Port of Tyne rely on a fully integrated warehouse management system (WMS), which sends real-time notifications via EDI of sales orders and inbound shipping consignments.  This enables a seamless supply chain operation and fully integrated ways of working between factory and warehouse, to ensure Tetley meets the demands of retailers and consumers. For instance, a goods out note at the Tyne warehouse automatically triggers a goods in note for raw tea destined for production.

“It is a great example of a fully closed loop and port centric logistics strategy, because incoming feeder vessels are also used to ship outbound finished goods, which are destined for global markets,” says David Cook MCILT, Group Logistics Manager at Tetley.
 
In addition to the environmental benefits of using a shipping service as opposed to road haulage, a port centric logistics model offers other cost benefits. One of the most significant is easier and faster access to global markets via Rotterdam and Felixstowe from the port, plus the ability to minimise the potential disruption of Brexit. The Port of Tyne has been granted Authorised Economic Operator (‘AEO’) status as part of its preparations for Brexit and provides access to fast track security processes and simplified customs procedures.  Awarded by HMRC, the Port’s customs checks and processes fully meet international standards.
 
Moving from roads to sea for the import of raw tea and the export of finished goods has removed a significant number of road miles for Tetley. This is beneficial on two different levels. Not only have the number of vehicles on the road been cut, but the move to sea means that Tetley can take full advantage of the plated weight of the container and is not restricted to road weight limitations. It also avoids congestion at ports and the problems associated with the UK’s ongoing shortages of haulage.
 
Using the same lorries to move raw tea to the factory and collect finished goods destined for global markets has eliminated an estimated 21,000 miles of empty lorry runs. Tetley’s export warehouse used to be in Manchester, so moving it to the Port of Tyne has reduced the shunting miles between its factory on Teesside to the export warehouse in Manchester and from there onto the Port.  Road miles between the export warehouse and port have been practically eliminated. 
 
Overall, in addition to the factory mileage saved by using the feeder vessels to transport to and from seaports, Tetley has saved over 730,000 road miles per annum.

“We have estimated the cost and environmental benefits equate to an annual fuel saving of 308,086 litres of diesel per annum - enough to fill 6,845 family cars," adds David Cook.
 
In March and April 2020, Tetley saw local demand for its tea products in the UK increase by 40% as a result of the Covid-19 lockdown.  Initially this was due to shoppers stocking up cupboards with everyday essentials, then later to higher levels of consumption due to the increase in homeworking. Efficient cross docking processes implemented at Port of Tyne combined with the ability to increase Tetley’s allocated storage capacity meant that the company could quickly scale production to a fully 24/7 operation and meet the additional demand.
 
“We are an important strategic partner to Tetley and the port centric service we offer, combining 3PL and port services for international distribution delivers great value to Tetley and contributes to their overall commercial and sustainability goals,” says Richard Newton, Commercial Director, Logistics at Port of Tyne.

“Environmental sustainability is an important part of our business model and evident in every part of our supply chain. It’s been very front of mind when developing our port centric logistics strategy and proving beneficial on a number of levels. To be sustainable long term, it has to make economic sense and by working in close partnership with Port of Tyne, we’ve balanced that equation,” says David Cook