Logistics & Supply Chain

Chemical Logistics Companies Have to Catch Up

Efficiency of Value Chains around the World is on Trial

03.04.2017 -

Right now, chemical logistics companies around the world are facing major challenges. Transport Logistic, the 16th International Trade Fair for Logistics, Mobility, IT and Supply Chain Management, will show how they are dealing with those challenges and what potential solutions are available. From May 9-12, 2017, more than 2,000 companies from more than 60 countries will showcase themselves in nine exhibition halls at the Messe München trade-fair center.

Organizers are more than optimistic that the fair will once again surpass the record number of exhibitors and visitors from 2015. The upcoming exhibition will occupy more than 112,000 square meters of exhibition space — broken down into nine halls as well as the outdoor site and railway track space.

Specials for Chemical Logistics

Transport Logistic features a number of attractions especially for chemical logistics companies. For instance, on Wednesday, May 10, 2017, CHEManager is hosting a conference titled "Chemicals industry: Transport infrastructure — Vision and reality" as part of Forum III in Hall B2 (starting at 10:00). After all, an intact, well working and intermodal transportation network is very important to the chemicals industry: What is the situation right now? Where is action needed, especially as a result of the new 2030 Federal Transport Infrastructure Plan? These are the issues that the experts at this event will deal with. Speakers who are expected include Gerd Deimel, Spokesman for the VCI Initiative Verkehrsinfrastruktur, Martin Schwemmer from the Fraunhofer Center for Applied Research on Supply Chain Management, Dr. Carsten Hinne from DB Cargo, Contargo managing director Heinrich Kerstgens and Michael Kriegel from Dachser.

Transport Logistic is a central meeting place for visitors from the chemicals and pharmaceuticals industry: The ITCO Pavilion has been an important part of the trade fair for years. According to Dr. Robert Schönberger, exhibition group director for Transport Logistic: "The ITCO Pavilion is convincing because of active and attractive invitation management. Its organizers always manage to bring customers and suppliers together that suit each other perfectly." This year more than 60 member companies will be in Munich to exhibit on more than 1,400 m2 of space at the ITCO Pavilion and to inform visitors about their latest products and services.

Global Networking Calls for International Transport and Logistics Service Providers

Players in the chemicals industry and in chemical logistics operate in a complex international environment. "Despite protectionist trends in several regions of the world, demand for networked value chains will remain high in the future," says Prof. Carsten Suntrop, managing director of the chemicals consulting company CMC² in Cologne and lecturer for management at the European University of Applied Science at Rhein/Erft. "Due to global networking, international corporations also want international logistics service providers to establish standards in transport and storage chains and in site logistics that are internationally uniform.”

Against this backdrop, increased transparency is absolutely necessary when it comes to the share of value-chain and production costs that can be attributed to logistics costs. "That is because logistics costs, which generally account for three to eight percent, can in some cases account for as much as twelve percent of overall costs. As a result, chemical logistics within chemical companies are now the focus of considerably higher operational and strategic attention," explains Suntrop. "This awareness should then result in higher and urgently necessary investments in logistics infrastructure and intellectual capital, for instance by hiring more supply chain managers or project employees."

The pressure to cut costs will continue to exist in chemical logistic. But in most cases, actually forcing prices down has not led to success for quite some time. Suntrop says: "Instead, the trend is toward cooperative cost management. Concepts such as inter-organizational cost management along the value chain are resulting in increased coordination between parties and the increased exchange of planning and control data and improved controllability." Service providers and shippers must work together to search for concepts that make the value chain more competitive.

Shippers Expanding Core Competencies to Include Chemical Logistics

This could result in more chemicals companies outsourcing their logistics to specialists. Possible advantages: Making up for the chemical industry's tariff disadvantages compared to logistics companies as well as economies of scale that would also apply to logistics tasks that are specific to chemicals — such as production logistics — for logistics service providers. Depending on the supply chain type (lean/agile/innovative) this could also result in more shipping companies establishing chemical logistics as a core competency, especially if doing so would help them to distinguish themselves from their competitors.

"But despite the pressure on costs, everyone involved in the chemical logistics process will have to establish new safety supply chain initiatives," predicts Suntrop. "Cutting costs must not under any circumstances result in marginal logistics concepts that are unacceptable when handling hazardous goods and materials." Examples would be reducing the quality of employees, cutting back on maintenance measures or failing to meet compliance requirements. That is why there will be counter-movements to improve compliance and to meet safety requirements.

There is still another problem that urgently needs to be solved. "When it comes to digitalization, several studies have indicated that chemical logistics in particular is one of the poorest performers among the top branches of industry," says Suntrop. "Innovative concepts such as the universal control and tracking of shipping units, active scheduling of freight carriers to loading sites and process/IT standards for check-in and check-out processes at chemical locations within seconds must also be developed." Answers to these issues will also be available at Transport Logistic. (sa)

Visitors who are interested in attending the fair can purchase a ticket online and enjoy affordable Early Bird prices. The Print@home Ticket gives registered visitors direct access to the show — without having to wait in line. Details are available here.



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