Hazardous-goods logistics

High requirements on hazardous goods
Paint, rubber and matches cannot be produced without sulfur. For this reason, sulfur is an important base material of modern chemistry, one that major chemical companies frequently need and regularly order. But, the transport, storage and transshipping of hazardous goods like sulfur pose major logistics challenges. For instance, short-term scheduling changes, rapid provision of material after order receipt and nighttime transports over distances of more than 100 kilometers are not unusual. The correct handling of hazardous material must be observed by all companies involved in the work.

The special characteristics of hazardous-goods logistics
Because chemical products have very particular characteristics, they require special treatment. As a result, they may have to be stored in different warehouses specifically for radioactive materials, hazardous goods or temperature-controlled items. In addition, restrictions governing the warehousing or combined storage of chemical products must be observed to prevent chemical reactions like explosions.
A decision concerning whether a material can be warehoused together with another material in a storage site can be made on the basis of warehouse classifications and hazardous-goods classes. There are two varieties of storage:

• Partitioned storage: Only certain materials may be stored in a warehouse section that is separated from other warehouse sections by fireproof walls and ceilings. The same principle applies for storage out of doors.
• Separate storage: Certain materials do not require partitioned storage and can be stored in a warehouse section. But they must be physically stored in a separate manner within the section.

Jobs performed by logistics-service providers in the chemical industry
There are three different development steps for the use of logistics services in the chemical industry.

The delivery and sale of chemicals : The traditional area where service providers perform jobs for companies in the chemical industry is the delivery and sale of chemicals on behalf of chemical producers. They operate as suppliers of chemicals on their own account. Chemical companies use the marketing services of logistics providers for purposes that include expansion into new markets or countries where they are not represented. They can simply draw on the service providers’ established sales network.
In addition, service providers are contracted to sell products to B and C customers in order to reduce the sales-based complexity at the chemical company. The companies themselves can then concentrate on supplying bulk shipments to strategically important A customers. As a result of bottlenecks at the chemical company, technically complicated products can be sold by an external service provider that has the necessary niche know-how.
The purchasing of chemical products: Outsourcing tendencies can be seen in the purchase of chemical products as well. Within the context of single sourcing concepts, the conventional purchasing approach to B and C products is altered in order to reduce procurement complexity. Provider models such as vendor-managed inventory (VMI) can reduce the complexity and, ultimately, lower capital costs. In VMI, the supplier handles inventory management in the warehouse for the customer. As a result, he has insights into the customer’s inventories and replenishes supplies when they fall below a minimum level.
The assumption of pre- and post-production processes: In addition to purchasing and sales, a service provider can also perform processes that are close to production. For instance, external service providers can take over activities that have no significance to core skills - e.g., mixing, filling and packaging. In the process, parts of the value chain are transferred to the service providers and bought from them.

Producers and logistics-service providers as partners
The activities that have just been described show that logistics-service providers who handle chemical products and particularly hazardous goods increasingly need product-technical and chemical know-how to go along with their logistics skills.
In addition, logistics-service providers are being increasingly integrated into their customers’ processes. Optimization is focused not just on the provider’s own company. Increasingly, cross-company objectives are being pursued. Chemical companies and logistics-service providers are evolving into partners, and supply-chain orientation is expanding.

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