Challenges in chemical logistics

Processors of chemicals in crisis mode: A paint and coatings manufacturer urgently needs solvents so that it can continue to produce. A producer of lubricants is frowning as stocks of its basic materials in the warehouse dwindle by the day. Supplies have been ordered, but are stuck. Logisticians specializing in chemical transport are doing their best, but are in turn dependent on factors over which they have little influence. We talked about this with Michael Kriegel, Department Head at Dachser Chem Logistics.

Mr. Kriegel, first a general question: How has chemical logistics developed in recent years?

MICHAEL KRIEGEL Very positive as far as the general cargo segment is concerned, i.e. packaged and palletized goods. We can see this in concrete terms in the steadily growing number of shipments. In 2021, we moved around four million consignments of chemical products at Dachser. Among them were 1.25 million dangerous goods consignments. This development is in step with the chemical industry, which, as we all know, is one of the most successful and competitive industries of all. Despite the positive development, supply chain disruptions, material shortages and capacity bottlenecks have severely challenged chemical logistics in the last two years. It is essential to manage these bottlenecks in global supply chains with foresight in order to keep the chemical industry's supply chains running without interruption.

Is this just a snapshot - also driven by Covid-19? To what extent do we also have to speak of a long-term development here?

The pandemic has shaken many certainties. There are repeated disruptions in global supply chains. Currently, seaports and airports in China are having to restrict or even completely shut down their operations for a certain period of time due to the rigorous Corona measures. This leads to capacity bottlenecks that cannot easily be made up. In addition, there are permanent, structural problems such as the shortage of drivers and skilled workers, which are particularly noticeable in the current situation and which logistics operators and shippers must tackle together.

Meaning?

The reduced ability to plan with regard to supply chains will continue, at least this year, and companies will adjust their supply chains to a certain extent. The importance of supply chain management has increased in this context - the topic is now being discussed by many customers, right up to the boards of directors. As a result, logistics is increasingly perceived as a business-critical success factor, also in the chemical industry.

In 2021, supply bottlenecks occurred in many places - in many cases due to interrupted supply chains. This affected and continues to affect chemicals. How do you support your customers in maintaining supply chains?

We act as a partner and solution provider in this situation. Crucial to this is a robust and balanced transport network that remains capable of performance and control at all times, even under the extreme stress conditions of the pandemic, and can activate appropriate transport capacities.

Transporting large quantities of chemicals from A to B is a fundamental part of the logistics business. Here, too, the question of ideas and implementations to make transports more sustainable?

Our company is investing decidedly in research and development in this area and already has a number of e-vehicles in operation in inner-city traffic. However, so far only a few zero-emission heavy trucks are available on the market, which are needed for general cargo distribution of chemical goods in the main run. That is why today, optimal utilization of transport capacity remains the biggest lever in making chemical logistics more climate-friendly. At the end of the day, nothing is more harmful to the climate than empty runs. We are also currently converting our fleet to mega-trailers, for example. These have a larger loading space for the same length and width and are therefore more economical and resource-saving than conventional trailers, especially on long-distance journeys (main run).

As a logistics service provider, you also offer the storage of chemicals. The warehouses have to meet special requirements, including high energy consumption. How do you deal with this in times when sustainability is increasingly becoming a top priority?

We have many years of experience in warehousing, including in energy-intensive industries - and with our internal construction department, we have the expertise in-house to design expansions and new buildings in an energy-saving way. At the same time, we are implementing various projects such as the Europe-wide switch to industrial trucks with energy-saving lithium-ion battery technology or the use of energy-saving LED lighting. Since 2022, we have been sourcing electricity exclusively from renewable sources worldwide and are significantly expanding our renewable energy generation. To this end, we are investing in the expansion and construction of new photovoltaic systems on the roofs of our European logistics facilities and office buildings.

In many areas, increasing the level of digitization has led to better overall performance. Where do you see their strengths for logistics?

Digitization and thus the use of "Big Data" will make work in logistics along the entire supply chain easier, more efficient and less prone to disruption. However, we see the particular strength of digital technologies primarily in supporting people in decision-making processes or relieving them of routine tasks, thereby increasing motivation and giving them room for more demanding tasks. Supply chains become less susceptible to disruptions by linking goods and data flows, thereby creating transparency and quality across all process steps. For example, we are already using machine learning applications for data from day-to-day operations to better forecast incoming volumes. Wherever possible, we are also replacing paper with digital processes, such as the tried-and-tested clipboard used to check dangerous goods vehicles.

And another look into the future: Which topics will be of utmost importance for chemical logistics in the coming years?

In addition to the topics of digitalization, sustainability, and driver shortages already mentioned, the topic of supply chain resilience and the associated network concept will be of major concern to us. For many companies, the current bottlenecks are a wake-up call. They want and need to become more resilient in order to better arm their supply chains against potential threats. IT security and IT resilience will also be of utmost importance, as secure data and its exchange keep the physical supply chain running.

About the person

Michael Kriegel has been active in the logistics industry for more than 20 years and specializes in solutions for the chemical industry. Since 2007, he has been responsible for the Dachser Chem Logistics industry solution throughout Europe.
> dachser.ch

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