Adopting a ‘port centric logistics’ strategy and swapping trucks for a coastal feeder service were strategies adopted by tea giant Tetley, well before the term ‘port centric logistics’ was coined by supply chain specialists.
Shipping accounts for over 95% of Tetley’s inbound and outbound transportation activities. Over 15 years the company has honed a highly cost efficient and environmentally friendly warehousing and distribution strategy centred around the River Tyne.
Part of the Tata Consumer Products family, Tetley is the 2nd largest tea brand in the world, producing 280 million tea bags a week for the UK and overseas from its state-of-the-art factory in Eaglescliffe. The company buys millions of kilos of tea direct from gardens and local auctions in over 20 countries including Kenya, China, Sri Lanka and India.
Bagged in 60kg sacks, 440 sacks of tea per container are shipped into South Shields (GBSSH). The Inbound containers are offloaded and stored in a specialist Port of Tyne warehouse until required for blending and packing at Tetley’s factory.
Shipping efficiency is optimised by Tetley’s use of slipsheets in lieu of wooden pallets. The use of slipsheets means that the sacks can be loaded from floor to ceiling delivering 10% extra capacity in each container. Most important it means the company uses 30,000 less pallets a year saving the 457 mature pines needed to produce the 831,600 kgs of wood required for pallet construction.
Technology plays an important part in overall efficiency and Tetley and Port of Tyne rely on a fully integrated warehouse management system (WMS).
As an agricultural crop the quality and characteristics of each tea crop differs depending on where it has grown, the season and climatic conditions during growth. About 90% of the tea drunk in the UK is a blend of different sourced teas and blending different teas together to create a ‘recipe’ that will deliver a consistent level of taste and quality is a fine art.
Tetley’s outsourced warehouse operations team at the Port receives a daily order for the tea blends scheduled for production. The team picks the tea varieties in the quantities needed and loads the order onto Port owned trucks and trailers for delivery to the factory.
The process works in reverse, with the same trucks reloaded with finished goods, which are then stored in the Port’s warehouse ready to load into containers for export from South Shields to Canada and Europe. This forms part of the company’s Brexit mitigation plan, shipping directly to Europe from the Port of Tyne means the potential Dover/Calais bottle neck can be avoided.
The established systems relied on by the Port of Tyne and Tetley need to be responsive and flexible. In the early days of the COVID-19 lockdown Tetley saw a surge in demand for tea. Working 24/7, production at the factory increased by 40% and the POT scaled up its operations to ensure continuity of supply. This responsiveness enabled Tetley to keep shelves stocked with tea and its customers, including the NHS and front-line services, supplied with the tea they needed.
Tetley’s decision to move from road to sea for the import of raw tea and the export of finished goods has had significant environmental benefits and benefitted its carbon reduction programme. “The use of feeder vessels to transport to and from seaports has resulted in 730,000 less road miles. This represents an annual saving of 308,086L of diesel, enough to fill 6,845 family cars which equates to the removal 828 tons of CO2 from the atmosphere,” says David Cook MCILT, Group Logistics Manager at Tata Consumer Products.
Using the same lorries to move raw tea to the factory and collect finished goods means fewer empty lorries on the road, and 42,000 less road miles equating to 128 less tons of CO2 in the atmosphere.
“This 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,” adds David Cook
“Sustainability lies at the heart of our business and every part of our supply chain has its contribution to make. Each partner we work with has their part to play in our sustainability plan. Working towards shared goals is essential, but for long term success, solutions have to make economic sense as well,” adds David Cook.
Richard Newton, Commercial Director, Logistics at Port of Tyne agrees, “We’re proud of this model relationship. We are effectively a 3PL provider and the port services and international distribution service we provide to Tetley is quite exceptional in terms of cost and environmental efficiency.”