epca interview

Collaboration is key in logistics

Cooperation along the supply chain and in logistics provision is increasing as producers look to carry lower stocks and improve their supply efficiencies. Companies are collaborating on the design and implementation of supply chain services and infrastructure

elaine burridge lOndOn

ollaboration in the logistics industry is gaining ground as the financial crisis spurs chemical producers to cope better with ongoing volatility and economic uncertainty. The amount of available storage and transport assets in Europe has been falling during the crisis and the traditional overhang of capacity has disappeared. There is a much stronger need now for producers and logistics providers to collaborate and plan together for future developments, with regard to demand and structural market changes. EPCA board member Hans-Jorg Bertschi, CEO of Swiss transport and logistics provider Bertschi, says that there is a much higher necessity to be agile and responsive to changes in the supply chain on a daily basis. The move within the chemical industry to operate on a low working capital basis and at minimal stock levels is leading to a different distribution model. The trend over the past 20 years to centralize distribution management is changing to decentralized structures which are more flexible and agile, Bertschi says.

Companies are seeking longer term collaboration to secure capacities for future business in volatile markets
Hans-Jorg bertsCHi EPCA board member/CEO, Bertschi

He has seen a big increase in terminal capacities related to contract business, as companies move larger volumes under contract rather than spot. Companies are seeking longer term collaboration to secure capacities for future business in volatile markets, and not to lose customers because of missing logistics availability, he says. Jossi Landesman, director of Belgium-based BMS and EPCA board member, says that after 2008, buyers went into long-term contracts to avoid being caught short and also to head off speculation. He notes that, in general, the arbitrage has been reduced in the world with lower volumes on some trades, such as paraxylene (PX). There will always be flows, but more and more is going to Asia than anywhere else. A growing number of producers are building logistics capabilities in developing countries, such as Russia, China and the Middle East, where new markets tend to outsource logistics facilities right at the start. Bertschi says this approach requires a close collaboration if it is to be developed successfully. Philip Browitt, EPCA treasurer and advisor to UK supply chain company Agility Logistics Solutions, says that the big tenders in the Mid-
October 2011 | EPCA Supplement | 7

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