Chemical Engineering April 2016 - 63

vice and costs. A chemical company
utilizing a TMS has constant access
to critical supply chain data, ensuring
that it is using the right carriers at
the right price every single time. At
the same time, the TMS shows real
opportunities to drive cost out of the
network and improve safety. A TMS
can also provide benchmarking opportunities
by strengthening business
intelligence capabilities.
Figure 3. Efficient management of freight movements at warehouses and cross-docking points - where
goods move between trucks without intermediate storage - is important for smooth operations
able option for shippers today.
Establish long-term supply contracts
and multiple sources. Establishing
contracts with transportation
carriers as well as raw-materials suppliers
will help to assure continuity.
Additionally, make sure to have multiple
contacts for each critical aspect
of the business; in other words, work
with multiple suppliers and carriers.
It's important for companies to work
with carriers who know what kinds
of equipment and standards are required
to transport various classifications
of chemicals. Carriers should
also train drivers according to the requirements
of Federal Regulation 49CFR,
regarding transport of hazmats
and sensitive cargo. This reduces
risk and builds in a reassuring layer
of supply chain accountability.
Plan for risk and disruption. As
previously discussed, there are numerous
potential disruptions to the
chemical supply chain. To be able
to respond quickly and efficiently,
should these disruptions arise, shippers
need to proactively plan and
develop contingency plans. Actions
might include the use of backup carriers
or routes, and the use of secondary
facilities (Fig. 3).
Lobby your legislators. Chemical
companies have the option of lobbying
to make sure the government
understands the impact of the regulations
and laws it is trying to pass.
And if chemical companies participate
in lobbying efforts, they will be
" in the know " and better able to an62
ticipate
future regulatory changes.
Reduce your carbon footprint.
Companies in the CPI have an important
role to play in reducing carbon
dioxide emissions. In the case
of logistics, this can be through
implementing best practices relative
to mileage traveled, route efficiency,
and load optimization, while
balancing shipment modes, times
and costs against customer service
expectations. This is destined to become
an even bigger issue as government
restrictions on truck emissions
continue to tighten.
Take advantage of optimization
technology. A transportation management
system (TMS) can automate
the entire supply chain process,
as well as help with mode and
route selection. The result is added
efficiency and cost savings. A TMS
can provide 360-degree visibility into
every shipment, including automated
status updates, milestones, delay
alerts and other reporting - all readily
accessible from the time of order
pick-up to the moment of delivery.
This carrier-tracking capability not
only allows shippers to keep their
customers more informed about
planned delivery schedules, but also
enables them to make better decisions
while shipments are en route,
if necessary.
Compliance and visibility are critical
for chemical companies, and improvements
in these areas can lead to
streamlined supply chain operations
including improvements in safety, serGood
relationships are vital
Carriers, just like shippers, are always
looking for ways to improve efficiency
and streamline their operations. This
includes being mindful of the companies
they work with and keeping
detailed metrics for their shipper
partners. Some carriers are even
scoring shippers on factors such as
financial attractiveness; fair auxiliary
charges; profile of the freight carried;
new opportunities introduced; and
how the shipper treats the carrier.
In the past, an abundance of market
capacity has given shippers the
greater leverage. Carriers have had
to compromise, doing anything to
get loads. Now, however, changes
in industry regulations and the lack of
available drivers have caused a tightening
of capacity, so carriers are being
more selective and strategic about
what shippers they work with. As a
result, many shippers are even looking
for ways to become a " preferred
shipper " to their carrier partners.
To gain preferred status, shippers
need to understand what drives carrier
efficiency. Factors to pay attention
to include:
Pay quickly. 70% of carrier expenses
are due inside of eight days,
so paying carriers in a timely fashion
helps to offset rate increases.
Use weekends. Offer freight during
off-hours, such as weekends.
Make and honor commitments.
Test the market by talking to key
partners on key lanes to arrive at a
mutual agreement. Then deliver on
the agreed terms and expectations.
Manage procurement. After awarding
lanes, give sufficient time for the
carrier to implement them.
Prioritize partners. Bring new opportunities
to your core carriers first.
Treat drivers with respect. Driverfriendly
facilities and staff make it
easy for drivers to work with your
business.
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Chemical Engineering April 2016

Table of Contents for the Digital Edition of Chemical Engineering April 2016