There’s risk in all supply chains, of course. But the chemical supply chain has a set of dangers unlike any others.
“The two biggest differences within the chemical supply chain are safety and regulations,” said Taylor Nicks, Manager of the ChemSolutions division of C.H. Robinson Worldwide Inc. “Many of these commodities are potential dangers toward health, safety, security and the environment. And, in addition to safety risks, many can be heavily regulated at the federal and state levels. Supply chain must execute a series of defined processes with multiple communication points and handoffs for the safety of the general public, the environment and the people working with those products.”
Loading and unloading of trucks is another concern. It must be done as efficiently as possible—as with all products—but the variable and dangerous needs of chemical handling adds another tier of risk.
Then there are the tanks and trucks that store and transport the chemicals. One area of concern is prior content. If a tank isn’t cleaned out properly, the next chemical can be ruined, said Rich Katz, Chief Technology Officer at Elemica. “If you’re sharing certain types of chemicals, you’ve got to be careful what you put in there or you can destroy a $200,000 load. We’re working on a system to integrate carriers and cleaners to manage this efficiently. There can be a lot of spoilage, so we track previous loads to minimize spoilage.”
Nicks described the case of a C.H. Robinson customer, a global chemical manufacturer, who had difficulty managing product spikes. They needed to find tankers that didn’t have prior restrictions (a commodity that conflicts with the one that must be shipped). They had excess product to meet the spikes, so the challenge, because of reduced capacity, was getting their product shipped. ChemSolutions came up with the idea of providing exclusive capacity with a select use of equipment and drivers. It was very flexible—the company might have needed 15 trailers one month but 50 the next. The problem is finding drivers.
On the road
Driver training requires very specific training that varies with the shipper or commodity. And to complicate matters even more, a new tanker definition is being put into place in 2014 that bases the definition of a tanker by the amount it can hold. Drivers must have a tanker authorization on their Commercial Drivers Licenses (CDLs).
The regulation reads: “Tank vehicle means any commercial motor vehicle that is designed to transport any liquid or gaseous materials within a tank or tanks having an individual rated capacity of more than 119 gallons and an aggregate rated capacity of 1,000 gallons or more that is either permanently or temporarily attached to the vehicle or the chassis. A commercial motor vehicle transporting an empty storage container tank, not designed for transportation, with a rated capacity of 1,000 gallons or more that is temporarily attached to a flatbed trailer is not considered a tank vehicle.”
“We’ve been working with our customers and carriers to identify those areas where, in the past, the shipment wasn’t classified as a tanker, but will be [under the new regulation],” said Nicks. “We’re working with them to identify carriers and to get drivers’ certified. That regulation was introduced two years ago, but will be fully implemented in all 50 states by 2014.”
An efficient supply chain also means getting the product to the customer on time.
“As you get closer to the retailer, you pay a lot more attention to the demand signal,” Katz said. “Eight to 10 years ago, a lot of planning was typically monthly. Now we’re seeing it weekly when they plan production runs. There’s a lot of real-time, what-if analysis coming from CPG customers [who need chemicals in their manufacturing processes]. They demand a lot out of the chemical manufacturers, who now put the same level of responsiveness and forecast sharing on their suppliers.”