Shipping chemicals and other bulk liquids in tank containers can be a highly demanding trade for logistics service providers, with mounting pressure from regulators, auditors and from the shippers themselves.
This month, Intermodal Eye investigates the five biggest customer demands facing logistics service providers – whether road, rail or intermodal – in tank container supply chains.
1.Timely deliveries
Of course, every shipper wants their consignment to be delivered on time – the problem is that most people want to make their deliveries at the same time. Research suggests that 60% of customers demand delivery between 0700 and 1100 in the morning, when there is usually congestion on roads. Why does this matter? The more time spent waiting, the less that logistics service providers are able to optimise the utilisation of tank container assets – and so cannot take advantage of any cost savings that could be made.
2.The environment
Major chemical companies are increasingly concerned about the environmental performance of the supply chains that handle and deliver their cargoes. In 2011, the chief procurement officers of six major chemical companies formed the Together For Sustainability (TFS), an initiative that works to implement the UN’s Global Compact on sustainability. TFS’s membership today comprises of 11 companies including AzkoNobel, BASF, Bayer, Solvay and others. TFS’ scheme audits the sustainability practices of its logistics service providers. Member chemical companies can use the TFS audits to screen and monitor their logistics providers’ environmental performance plus other criteria such as health and safety compliance.
3.Quality management systems
In a recent survey of 50 chemical producers and distributors, 65% said a logistics provider must have an ISO 9001 accreditation for quality management systems before it can be considered for a contract. In contrast, only 57% of those in the same survey said a Safety and Quality Assessment Systems (SQAS) assessment was necessary to win a contract and 38% said it was desirable.
The SQAS audit, which is how the chemical industry screens and assesses quality logistics providers in Europe, is being revised to include aspects of ISO 9001. These comprise corporate social responsibility, labour policy and human rights and fair business practices. The onus is now on logistics providers to prove their worth.
4.Modal shifts
All this talk of environmental and operational efficiency is prompting major chemical producers to move a greater share of their supply chains from road to rail transport. A modal shift from road to rail is also being promoted by the European Commission, and the European Chemical Industry Council (Cefic).
Dow Chemical is actively trying to move more tank containers by rail. The producer recognises the safety and environmental benefits of rail transport, plus the lack of congestion. Currently, 26% of Dow Chemical’s bulk shipments are intermodal, rather than purely by road, which the producer would like to increase.
5.Bottlenecks
Now that customers have indicated they’d like to move more tank containers by rail, intermodal terminal operators need to step up and ensure they can provide regular and reliable service levels and ensure on-time deliveries. By extension, this means that the intermodal market needs to be agile and adaptable in the event of disruptions such as bad weather or rail strikes.
Terminal safety is a big factor too. The extra handling operations that tank containers undergo at intermodal terminals have to be added to the shipper’s risk management plan. It also complicates insurance policies, so intermodal operators can help maintaining a high level of safety performance.
The more safe, efficient, sustainable and cost-competitive intermodal transport is, compared with road transport, the better the outlook for the sector.
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