Wine Bulk v Bottled Shipping

The shipping costs associated with shipping in bulk versus shipping

wine bottled at source

Volume comparison

Bulk wine shipping

According to Oxford dictionary the word ‘bulk’ mean the mass or size of something large.

Bulk wine as the name implied is the wine that is shipped through a tank from the origin, with

the intent of being bottled at the destination before distribution. Bulk wine shipping could be

done in two different way using Flexi-tank or ISO tank. The focus of this research would be

solely on Flexi-tank.

Flexi-tanks are disposable/reusable flexible bags that could be fitted into a standard 20ft

(6.25m) container (GlassRite, 2008). Depending on the transported product, the material used

in making this bags differs. On bulk wine shipments, substantial research and development

work has been done to ensure that appropriate materials are used in making this bags without

impairing its quality, taste and colours. While the bag comprises of different range of sizes, the

maximum capacity of the largest flexi-tank is 24,000 litres filling a 20ft (6.25m) container.

Usually most bottled wind has approximately 0.75cl of wine content. The number of bottles

that could be derived from 24000 litres of bulk shipment is as follows:

24000

0.75= 32000 𝑏𝑜𝑡𝑡𝑙𝑒𝑠

Bottled Wine in container

Containerised bottled wine is the shipping of wine in a box on a palletised container, listed

below are the specifications for a standard container and pallets allowance.

Workings:

1) (𝑛𝑢𝑚𝑏𝑒𝑟𝑠. 𝑜𝑓 𝑏𝑜𝑡𝑡𝑙𝑒𝑠 𝑝𝑒𝑟 𝑏𝑜𝑥 ∗ 𝑛𝑜 𝑜𝑓 𝑐𝑎𝑠𝑒𝑠) = 𝑛𝑢𝑚𝑏𝑒𝑟𝑠 𝑜𝑓 𝑏𝑜𝑡𝑡𝑙𝑒𝑠 𝑝𝑒𝑟 𝑝𝑎𝑙𝑙𝑒𝑡𝑠

6 * 140 = 840 bottles per pallets

𝑛𝑢𝑚𝑏𝑒𝑟𝑠 𝑜𝑓 𝑏𝑜𝑡𝑡𝑙𝑒𝑠 𝑝𝑒𝑟 𝑝𝑎𝑙𝑙𝑒𝑡𝑠 ∗ 𝑛𝑢𝑚𝑏𝑒𝑟𝑠 𝑜𝑓 𝑝𝑎𝑙𝑙𝑒𝑡𝑠 𝑝𝑒𝑟 𝑐𝑜𝑛𝑡𝑎𝑖𝑛𝑒𝑟

= 𝐻𝑜𝑙𝑑𝑖𝑛𝑔 𝑐𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑝𝑒𝑟 𝑐𝑜𝑛𝑡𝑎𝑖𝑛𝑒𝑟

840*10=8400 bottles per container

A standard 75cl bottle of wine weighs 1.25kg. Thus, six bottles, without a case, would weigh

7.5 kg.

2) (𝑏𝑜𝑡𝑡𝑙𝑒 𝑤𝑒𝑖𝑔ℎ 𝑖𝑛 𝑘𝑔. ∗ 𝑛𝑜. 𝑜𝑓 𝑏𝑜𝑡𝑡𝑙𝑒𝑠 𝑝𝑒𝑟 𝑐𝑜𝑛𝑡𝑎𝑖𝑛𝑒𝑟) =

𝑇𝑜𝑡𝑎𝑙 𝑤𝑒𝑖𝑔ℎ 𝑜𝑓 𝑤𝑖𝑛𝑒 𝑖𝑛 𝑐𝑜𝑛𝑡𝑎𝑖𝑛𝑒𝑟

1.25kg*8400=10,500kg of bottled wine in a container

10,500kg of bottled wine are carried on a container, in reality, the liquid wine is just a fraction

of the load on transit as shown in the working below:

3) Bottles weight = 0.5kg

Actual product (Wine) = 750 ml (0.75 litres)

0.75*8400 bottes per container = 6300 litres per container

Container Pallets Bottles per box Cases per pallets Holding

Capacity 20 feet

container

Standard

pallets: 10

6 bottles per box 140 cases

8400 bottles

per Teu

container

40 feet

container

Standard

pallets: 20

6 bottles per box 140 cases

16800 bottles

per Feu

Container

Distinctively, wine case weights differ from 2kg to 6kg. Each variation put the total weight of

6 wine bottles and cases between 9.5kg and 13.5kg respectively.

Note: the below calculation is based on the assumption that the wine case weights is 6kg and

total weight of 13.5kg per cases.

4) (𝑊𝑖𝑛𝑒&𝐶𝑎𝑠𝑒𝑠 𝑤𝑒𝑖𝑔ℎ𝑡 𝑖𝑛 𝑘𝑔. ∗ 𝑛𝑜. 𝑜𝑓 𝑐𝑎𝑠𝑒 𝑝𝑒𝑟 𝑝𝑎𝑙𝑙𝑒𝑡 ∗ 𝑛𝑜 𝑜𝑓 𝑝𝑎𝑙𝑙𝑒𝑡𝑠) =

𝑇𝑜𝑡𝑎𝑙 𝑙𝑜𝑎𝑑𝑠 𝑠ℎ𝑖𝑝 𝑝𝑒𝑟 𝑐𝑜𝑛𝑡𝑎𝑖𝑛𝑒𝑟

13.5kg*140*10=18,900kg of wine in a container

Total full load weight: 18900+2330 = 21230kg

40ft. Container

No. of pallets: 20

Number of bottled wine per container: 16800 12,600 litres of wine excluding the bottles

Like to like comparison dictated that bulk wine will be compared to 20 ft. container not FEU,

due to the fact bulk shipping can only be done on TEU because of weight restrictions.

Shipment Cost Bottled Wine 20 TEU Bulk wine TEU

Origin Destination Cost ($) Origin Destination Cost

Maipo Valley port of

Valparaiso

178 Maipo Valley port of

Valparaiso

178

port of Valparaiso Felixstowe 2000** port of

Valparaiso

Liverpool

2500**

Felixstowe Daventry 340** Liverpool Manchester 250**

Daventry Manchester 337

Labour costs 3 peoples working

(loading and unloading) on each mode

@ 1 hours

240

Labour costs 1 person working

(loading and unloading) on each

mode @ 1 hours

80

Total costs 3095 3008

Workings based on assumption:

Maipo valley to Port of Valparaiso (Bottled & Bulk)

Mode: Truck

Claim: Rented $120 (𝑑𝑖𝑠𝑡𝑎𝑛𝑐𝑒

𝑚𝑝𝑔) ∗ 𝑙𝑖𝑡𝑟𝑒𝑠 𝑖𝑛 𝑔𝑎𝑙𝑙𝑜𝑛 ∗ 𝑓𝑢𝑒𝑙 𝑝𝑟𝑖𝑐𝑒

Fuel price per litres: $1.37

Distance: 56.8 miles (56

6) ∗ 4.5 ∗ 1.37 = 57.54 ≈ $58

MPG = 6 58 + 120 = $178

Litres in gallon = 4.5

Felixstowe to Daventry

Estimation source: Network rail

Daventry to Manchester

Mode: Truck

Claim: Rented $163 (𝑑𝑖𝑠𝑡𝑎𝑛𝑐𝑒

𝑚𝑝𝑔) ∗ 𝑙𝑖𝑡𝑟𝑒𝑠 𝑖𝑛 𝑔𝑎𝑙𝑙𝑜𝑛 ∗ 𝑓𝑢𝑒𝑙 𝑝𝑟𝑖𝑐𝑒

Fuel price per litres: $2.23

Distance: 128 miles (128

6) ∗ 4.5 ∗ 2.23 = 57.54 ≈ $58

MPG = 6 214 + 163 = $337

Litres in gallon = 4.5

Labour cost (bottled wine)

Number of loading and unloading = 4

Labour required on each = 3 4∗ 3 ∗ 20 = $240 Bottled

Hour required to load and unload = 1hour

Hourly rate = $20

Bulk wine

$20 hourly rate * 4 workforce (@ 1 per destinations) = $80

Note:

On average, it would take approximately an hour to load a 24000 litres flexitank with a single

person, the paying rate for the labour is usually around $20 per hour, furthermore, what

determined the loading and unloading time is the pump used and verbosity of the product,

however, a 24,000 liter Flexitank can be loaded in 45 minutes (Trans Ocean, 2010). Compared

to bottled wine which required about 3 to 4 man power to load a container. While it will cost

just $20 to load a flexitank, the loading labour costs on bottled wine container on average could

be around $60 to $80 depending on the man power.

Other Cost (Direct Material)

Under the current EU directive 2004/12/EC, UK has a set target of green glass that must be

recycled every year, according to WSTA (2013), the target for glass was 60%; this necessitate

the need for bulk shipping of wine, as the recycled glass could be used in bottling the imported

wine in the UK. Using recycled materials in wine packaging has some advantages such as

reducing the raw material imported into the UK and energy usage in producing new glasses on

every shipments, which can lead to cost savings and environmental improvements (WRAP,

2013). Looking at it in cost perspective, Rabobank (2013) report concluded that shipping in

bottles can add about 25cent (£0.15) per bottled wine ship. This price is usually pass-on to the

consumer of wine. Perhaps, is partly why bottled wine is more expensive than bulk wine.

Final remark (Bulk v Bottled wine)

Base on the calculation figures the shipping cost including labours associated with bulk is

$3008 while that of bottled wine will costs $3095. Shipping in bulk is not only cheaper based

on volume comparison, it work out cheaper on labour, due to the fact that it is less labour

intensive when compared to bottled wine (i.e. a single person could load and unload a flexitank

while it takes 3 or more to load and unload bottled container in an hour).

However, when the UK import duties is included with the shipping cost using the below

calculation bulk shipping incurred a higher cost of £36163.2 in tax compared to bottled wine

who tariff is relatively smaller registering £7119.63.

UK import duties are calculated in hectolitre thus the bulk and bottled wine need to be

converted into litres as follows:

Bulk 𝑁𝑜 𝑜𝑓𝑙𝑖𝑡𝑟𝑒

𝑙𝑖𝑞𝑢𝑖𝑑 𝑣𝑜𝑙𝑢𝑚𝑒 𝑝𝑒𝑟 𝑏𝑜𝑡𝑡𝑙𝑒

24000

0.75= 32000 Bottled wine can be obtained from a single bulk shipment

An hectolitres = 100 thus 32000

100= 320ℎ𝑙 𝑜𝑓 𝑤𝑖𝑛𝑒𝑠

Current wine duty

Wine and made-wine:

Exceeding 4% - not exceeding 5.5% abv

£113.01

(hmrc, 2013)

Therefore 320hl * £113.01 = £36163.2

Bottled wine 𝑁𝑜 𝑜𝑓 𝑏𝑜𝑡𝑡𝑙𝑒𝑠 𝑝𝑒𝑟 𝑐𝑜𝑛𝑡𝑎𝑖𝑛𝑒𝑟∗0.75(𝑙𝑖𝑞𝑢𝑖𝑑 𝑖𝑛 𝑏𝑜𝑡𝑡𝑙𝑒𝑠)∗𝑈𝐾 𝑅𝑎𝑡𝑒

ℎ𝑙 (100)

8400 ∗ 0.75 ∗ 113.01

100= £7119.63 𝑝𝑒𝑟 𝑐𝑜𝑛𝑡𝑎𝑖𝑛𝑒𝑟 𝑜𝑓 𝑏𝑜𝑡𝑡𝑙𝑒𝑑 𝑤𝑖𝑛𝑒

Lastly, the above calculation was not included on the table due to the flexibility of importer

of wine been able to pay the import tariffs on a later date instead of payment at the point of

clearance. Therefore, this calculation will not be used in the bulk or bottled import decision

later in the research.

The environmental costs associated with shipping in bulk versus

shipping wine bottled at source

To work out the environment cost/impact associated with both form of shipping, we need to

consider the mode of transport involve in shipping bulk and bottled. Below are the summary

of the intermodal transport that will be used in the shipment, the distance covered in mileage

and the C02 emission per mode.

Intermodal Transport of Bottled container

Origin Destination Mode Distance per

mile.

C02 Emission

(tonne)

a Maipo Valley port of Valparaiso Truck 56.8 0.055

b port of Valparaiso Felixstowe Ship 11060.5 1.4206

c Felixstowe Daventry Train 137 1.03

d Daventry Manchester Truck 128 0.123

Total emissions 2.629 tonnes

Working:

a) Maipo Valley to Valparaiso

Full Truck load

Fuel Consumption: 6 miles per gallon

1 gallon = 4.55 litres

1 litre of diesel produces 2.63 kg of greenhouse gases

(𝑀𝑖𝑙𝑒𝑎𝑔𝑒 𝑐𝑜𝑣𝑒𝑟

𝑓𝑢𝑒𝑙 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 ) ∗ 𝑛𝑜. 𝑜𝑓 𝑔𝑎𝑙𝑙𝑜𝑛 𝑝𝑒𝑟 𝑙𝑖𝑡𝑟𝑒𝑠 ∗ 𝑔𝑟𝑒𝑒𝑛ℎ𝑜𝑢𝑠𝑒 𝑔𝑎𝑠𝑒𝑠 𝑝𝑒𝑟 𝑘𝑔

(56.8 /6) *4.55 * 2.63 = 113.3 kg is the carbon footprint of a truck shipment based on

44000kg (Full load)

In the UK, with some exceptions, the maximum vehicle weight is 44 tonnes gross (truck, fuel

and load) and has up to six sets of axles.

Note: as shown from earlier working the total weight for the bottled container is 21230kg,

which means the shipment is less than a full load capacity of a tuck. Therefore we need to

calculate the actual emission for LTL (Less than truck load)

Truckload = 44,000 kg

Shipment = 21,230 kg

𝐶𝑎𝑟𝑏𝑜𝑛 𝑓𝑜𝑜𝑡𝑝𝑟𝑖𝑛𝑡

𝑓𝑢𝑙𝑙 𝑇𝑟𝑢𝑐𝑘𝑙𝑜𝑎𝑑 113.3/44000 = 0.00256818181

0.00257 * 21230 (Shipment load) = 54.56kg 0.055 tonnes

b) port of Valparaiso to Felixstowe

Jfhillibrand (2010)

The above emission calculation was extracted from jfhillebrand.com CO2 calculator. The total

emission from grams to metric tonnes is converted as follows:

1420583.58

1000000= 1.42058358 ≈ 1.4206 tonnes

Note: the 1.4206 tonnes CO2 emission is for just a single container, a container ship could

carried around 11000 container per shipment journey example Emma Mærsk is able to carry

around 11,000 twenty-foot equivalent units (TEU) or 14,770 TEU depending on arrangement

and products type.

http://en.wikipedia.org/wiki/Twenty-foot_equivalent_unit

c) Felixstowe to Daventry

McKinnon et al. (2010)

Activity-based method formula for emission

𝑇𝑜𝑛𝑛𝑒𝑠 𝑜𝑓 𝐶02 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 = (𝑇𝑜𝑛𝑛𝑒𝑠 ∗ 𝑘𝑚 ∗ 𝑔 𝐶02 𝑝𝑒𝑟 𝑡𝑜𝑛𝑛𝑒_𝑘𝑚

1000000)

Distances covered = 137 miles 220.480128 ≈ 220.5 km

Shipment weight = 21,230 kg 21.23 metric tonnes

CO2 emission factors for train = 22g CO2/tonne-km

Thus Tonnes of CO2 emission =

(21.23 ∗ 220.5 ∗ 22

1000000)

= 1.02987 tonnes

d) Daventry to Manchester

Full Truck load






(128 /6) *4.55 * 2.63 = 255.3 kg is the carbon footprint of a truck shipment based on

44000kg (Full load)

Shipment weight: 21230kg LTL (Less than truck load)



𝑓𝑢𝑙𝑙 𝑇𝑟𝑢𝑐𝑘𝑙𝑜𝑎𝑑 255.3/44000 = 0.0058


Bulk shipments

Origin Destination Mode Distance per

mile.

C02 Emission

1 Maipo Valley port of

Valparaiso

Truck 56.8 0.062

2

port of Valparaiso San Antonio Ship 95.5

1.4206 San Antonio Liverpool Ship 10973.8

3 Liverpool Manchester Ship

Canal

Barge 50 0.0598

4 Manchester Ship

Canal

Manchester Truck 5 ** Based on

assumption

0.00544

Total emissions 1.548 CO2 tonnes

Workings

1. Maipo Valley to Valparaiso

Full Truck load






(56.8 /6) *4.55 * 2.63 = 113.3 kg is the carbon footprint of a truck shipment based on

44000kg (Full load)

In the UK, with some exceptions, the maximum vehicle weight is 44 tonnes gross (truck, fuel

and load) and has up to six sets of axles.

Note: as shown from earlier working the total weight for the bottled container is 21230kg,

which means the shipment is less than a full load capacity of a tuck. Therefore we need to

calculate the actual emission for LTL (Less than truck load)


Shipment = 24,000 kg


𝑓𝑢𝑙𝑙 𝑇𝑟𝑢𝑐𝑘𝑙𝑜𝑎𝑑 113.3/44000 = 0.00256818181


2. Port of Valparaiso to Felixstowe via San Antonio

Jfhillibrand (2010)

1420583.58

1000000= 1.42058358 ≈ 1.4206 tonnes

3. Liverpool port to Manchester ship canal

Activity-based method formula for emission

𝑇𝑜𝑛𝑛𝑒𝑠 𝑜𝑓 𝐶02 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 = (𝑇𝑜𝑛𝑛𝑒𝑠 ∗ 𝑘𝑚 ∗ 𝑔 𝐶02 𝑝𝑒𝑟 𝑡𝑜𝑛𝑛𝑒_𝑘𝑚

1000000)

Distances covered = 50 miles 80.4672 ≈ 80.5 km

Shipment weight = 24,000 kg 24 metric tonnes

CO2 emission factors for train = 31g CO2/tonne-km

Thus Tonnes of CO2 emission =

(24 ∗ 80.5 ∗ 31

1000000)

= 0.0598 tonnes

4. Manchester ship canal to warehouse

Note: the final destination of the bulk wine was not included on the case study. Thus the below

calculation is based on the assumption that the bulk wine will be transported to a designated

warehouse in Manchester and be stored or bottled there, hence the need for more transportation

mode. It is assumed the mileage covered to reach the final destination is 5 miles and Truck as

the preferred mode of transport.

Full Truck load






(5 /6) *4.55 * 2.63 = 9.97 kg is the carbon footprint of a truck shipment based on 44000kg

(Full load)

Shipment weight: 24000kg LTL (Less than truck load)



𝑓𝑢𝑙𝑙 𝑇𝑟𝑢𝑐𝑘𝑙𝑜𝑎𝑑 9.97/44000 = 0.0002265909


CO2 emission Bulk v Bottled Container

Shipping wine in Bulk covered 11181.1 miles generating 1.548 tonnes of CO2 in the process

while bottled wine shipment will generate 2.629 tonnes of C02 emission with slightly more

distance covering 11382.3 mileage in the process.

Generic environment impact of shipping

Emission

Which form of transport is cheaper per bottle of wine? Wine bottled

in Chile or the same wine bottled in UK?

Bottled wine Bulk shipment

Shipping Cost $3095 $3008

No of bottles 8400 32000

𝑡𝑜𝑡𝑎𝑙 𝑠ℎ𝑖𝑝𝑚𝑒𝑛𝑡𝑠 𝑐𝑜𝑠𝑡

𝑛𝑜 𝑜𝑓 𝑏𝑜𝑡𝑡𝑙𝑒𝑠

𝑁𝑜 𝑜𝑓 𝑏𝑜𝑡𝑡𝑡𝑙𝑒𝑠

𝑡𝑜𝑡𝑎𝑙 𝑠ℎ𝑖𝑝𝑚𝑒𝑛𝑡𝑠 𝑎𝑚𝑜𝑢𝑛𝑡

3095

8400= $0.4 𝑝𝑒𝑟 𝑏𝑜𝑡𝑡𝑙𝑒

3008

32000= $0.1 𝑝𝑒𝑟 𝑏𝑜𝑡𝑡𝑙𝑒

From the calculation above, it is apparent that bulk shipping is cheaper based on volume per shipping

cost ratio, bulk registered $0.1 cost per bottled wine imported while palletised bottled wine registered

$0.4 per bottle. The dissimilarity in cost is a result of the volumes of wine a bulk shipping can carry

compare to palletise bottled that carried just 6300 litres of wine, logically, bottled wine carries more of

other loads with relatively small amount of wine.

Which form of transport is more environmentally friendly? Wine

bottled in Chile or the same wine bottled in the UK?

Bulk v Bottled shipping

Bulk Bottled wine

Economy of scales 8400 bottles per shipment 32000 bottles per shipment

C02 emission 2629 tonnes 1548 tonnes

Bulk to bottled ratio

32000

8400= 4𝑥 Journeys of bottled wine to attain 32000 bottles of wine derived from a single journey of

bulk shipping.

Environment impact scales based on bulk to bottled ratios of travel time required.

Environment impact Bulk Bottled

wine

Emissions

Air Emissions

NOx, SOx & PM

Carbon Emissions

1

4x

4x

4x

Vessel Discharges

Ballast Water

1

4x

Invasive Species 1 4x

http://www.businessweek.com/articles/2013-02-07/most-australian-wine-exports-ship-in-

giant-plastic-bladders

http://www.transoceanbulk.com/en/faqs.aspx?faqid=55#faq55

http://www.wsta.co.uk/Glass-recycling.html

http://www.wrap.org.uk/content/recycled-content-wine-packaging

http://www.networkrail.co.uk/Freight/The-cost-of-using-rail-freight/

http://www.businessweek.com/articles/2013-02-07/most-australian-wine-exports-ship-in-giant-plastic-bladders

http://www.businessweek.com/articles/2013-02-07/most-australian-wine-exports-ship-in-giant-plastic-bladders

http://www.transoceanbulk.com/en/faqs.aspx?faqid=55#faq55

http://www.wsta.co.uk/Glass-recycling.html

http://www.wrap.org.uk/content/recycled-content-wine-packaging

http://www.networkrail.co.uk/Freight/The-cost-of-using-rail-freight/

http://www.hmrc.gov.uk/rates/alcohol-duty.htm

http://www.hmrc.gov.uk/rates/alcohol-duty.htm

Wine Bulk v Bottled Shipping

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