1. HITRANS – Whisky Logistics Study Presentation toFTA Frank Roach 14 June 2011

2. Whisky Logistics Research | 17/05/11 Structure of our Presentation Introduction Background Methodology Consultation Spreadsheet-based Tool Results Implications for the Whisky Industry Commission Deliverables

3. Whisky Logistics Research | 17/05/11 Background MVA Consultancy and Caledonian Solutions were commissioned by HITRANS to review the current and future logistics requirements of the whisky industry and the corresponding impacts on the strategic transport network in the HITRANS area The study is designed to: collate information on current logistics of the industry, focusing on the movement of products to, from and between facilities in the HITRANS area; and forecast how the relevant supply and demand may change over time and the likely impact of these changes on the transport infrastructure

4. Whisky Logistics Research | 17/05/11 Study Area - HITRANS HITRANS is the Regional Transport Partnership for Highlands, Western Isles, Orkeny, Argyll and Bute and Moray Home to 75% of Scotch Malt distilleries, producing almost 90% of all Scotch Malt Whisky Keen to ensure adequate infrastructure and logistical support is provided for this important Scottish industry

5. Whisky Logistics Research | 17/05/11 Current Ownership of Distilleries The Big-5 Diageo(25) Chivas (12) Edrington (4) Grants (3) Whyte and MacKay (3) plus a large number of smaller 1-2 distillery operators

6. Whisky Logistics Research | 17/05/11 Methodology 3 Strands to our Approach Strand 1 – Consult with key stakeholders involved in whisky-related logistics, documenting specific issues, constraints and opportunities which impact upon the industry Strand 2 – Investigate the logistical requirements of the whisky industry, including movements of barley, malt, spirit, byproducts and fuel, develop a tool to predict future requirements based on growth scenarios and predict the corresponding impacts on the strategic transport network Strand 3 – Present results via map-based formats which can be displayed and interrogated interactively via the freight section of HITRANS website

7. Whisky Logistics Research | 17/05/11 Stakeholder Views - Road-based Issues Majority of transport movements are undertaken by road Due to geography; and Flexibility Haulliers use the main trunk road network, understand problems occur and are generally content to work round these Problems noted with the alignment of the A95 between Aviemore and Aberlour and lack of safe overtaking/dualling on the A9 Importance of keeping the strategic routes open in winter noted Issues with empty running From 2024 requirement to replace or refurbish all tankers to bottom fill, bottom discharge A83 Rest and be Thankful and other network-reliability issues Fuel costs Speed limits Access roads/links

8. Whisky Logistics Research | 17/05/11 Stakeholder Views - Rail Currently no whisky-related freight movements undertaken by rail in the HITRANS Region 2010 SWA Transport and Safety Group set up to investigate appetite for modal shift to rail, identifying potential constraints Rail freight requires critical mass - industry-wide or major player co-operation needed to make feasible) Elgin appears to be the most appropriate rail head (but requires further investment/development) Rail is constrained by the requirement for road shunts at either end of journey No subsidy available to cover the increased costs and hence currently no effective financial incentives to move to rail

9. Whisky Logistics Research | 17/05/11 Stakeholder Views – Sea-borne Critical aspect of the industry needed to access, supply and unload goods from island distilleries Apart from Islay, all island-based distilleries rely on commercial ferry services Islay imports much of its barley by coastal freighter, other products are road-based via the commercial ferries from Kennacraig (NB these are affected by the current closure of Port Ellen) Limited capacity on ferries – problematic for future growth Reliability issues affect hauliers and in turn the industry Empty-running a particular issue

10. Whisky Logistics Research | 17/05/11 The Spreadsheet Tool Bespoke tool working back from published maximum capacity figures Uses 14 distinct geographic clusters Identifies volumes of inputs/outputs and likely number of transport journeys required Allocates these movements to the strategic transport network

11. Whisky Logistics Research | 17/05/11 Area Clusters 13 distinct area clusters Additional area representing Invergordon Grain Distillery Allows similar characteristics to be modelled Tool allows each area cluster to be investigated individually rather than the study area as a whole Vehicles placed onto links rather than every individual origin/destination

12. Whisky Logistics Research | 17/05/11 Routes 20 distinct links Additional link representing Islay Ferry Vehicles placed onto links rather than every individual origin/destination Allows flow of vehicles and materials to be charted across the network Each link clickable on GIS- based mapping (viewable via HITRANS website)

13. Whisky Logistics Research | 17/05/11 Routing Assumptions Routing assumptions based on consultation and our knowledge of the industry Forecasts total flows (volumes and vehicles) using all of the key links of the network Tool allows growth assumptions to be varied by location Also allows user to vary assumptions regarding recycling of by-products Reported using GIS-based mapping (viewable via HITRANS website)

14. Whisky Logistics Research | 17/05/11 Typical Outputs

15. Whisky Logistics Research | 17/05/11 Key Results RouteDaily Whisky Flow AADTHGV %Whisky % of HGVs A9 Invergordon96110158%11% A9 Aviemore136756814%13% A95 Grantown on Spey 377748310%50% A83 Tarbet824628%4% A82 Loch Lomond 11101386%2%

16. Whisky Logistics Research | 17/05/11 Implications & Recommendations Whisky industry will need to consider how significant future growth will be catered for This will determine corresponding future traffic growth on relevant key transport links Growth of freight traffic on many of these routes will have significant impacts on the rest of HITRANS economy Continue to investigate options for modal shift – but realism required Capacity of ferries is likely to become a crucial constraint Local and National Authorities need to recognise the value of the industry and support where necessary In particular, the need to invest in winter maintenance and other measures to maintain network reliability

17. Whisky Logistics Research | 17/05/11 Any Questions ?

18. Whisky Logistics Research | 17/05/11 Contact us Name: Chris Paterson Telephone number: 0141 225 4415 Email: cpaterson@mvaconsultancy.comcpaterson@mvaconsultancy.com www.highlandrailfreight.com Office address: 7 th Floor, 78 St Vincent Street, Glasgow, G2 5UB.

19. Whisky Logistics Research | 17/05/11 Document control Sheet Project title:HITRANS – Whisky Logistics Research MVA project number:C3A43000 Document type:Working Presentation Directory & file name: Document Approval Primary author:Chris Paterson Other author(s): Reviewer(s):David Connolly, Alan Wolstenholme Formatted by: Distribution IssueDateDistributionComments