17/03/08 Bluecycle to Reduce 'Salvage Miles' by Three-Quarters of a Million

Bluecycle, the UK's online marketplace for car salvage, could save salvage companies thousands of pounds with a planned restructure of its logistics network.

The new network, set to become operational next month, could save fuel costs totalling more than £325,000* and nearly 3,500 working days by cutting miles driven from 2 million to 1.29m.

It will also reduce Bluecycle's carbon footprint by at least 810 tonnes of CO₂ through the 36% reduction in miles covered by salvage operators.

James Russell, managing director of Bluecycle, said: "To maintain a sustainable, profitable and competitive salvage business, it's vital to review and tackle the thorny issue of moving vehicles around.

"Working with the London School of Economics**, whose research has helped us to re-engineer our logistics network, we have been able to pinpoint ways of bringing costs down and work more efficiently through intelligent planning."

The new Bluecycle network is based on determining the most suitably located salvage yards across a number of UK "territories" and optimising the time and distance taken picking up vehicles.

Notes to Editors

* Calculation:

2,019,497 - 1,289,605 = 729,892 (mileage difference between current network mileage and predicted new network mileage)

Mileage difference / 30 = 24,320 hours worth of travelling at 30mph

24,320 / 7 hours = 3,474 working days

Taken from BT's Carbon Calculator for a diesel vehicle doing 11mpg (figure from Trent's) and doing 729,892 miles a year (the difference between the 2 figures)

Diesel costs currently £1.08 / litre at the pumps

1 gallon = 4.54611 litres

1 gallon = 1.08 * 4.54611 = £4.91 / gallon

Mileage saved = 729,892

11 miles travelled uses 1 gallon of fuel which costs £4.91

Mileage saved / mileage per gallon 729,892 / 11 = 66,354

66,354 gallons at a cost of £4.91 per gallon = £325,797

** The research was carried out by Theodoros Mantoukas, a student of the LSE's Operational Research Group, Department of Management. His LSE supervisor was Dr Katerina Papadaki.

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