Inbound Logistics - Chemical Week | June 2022

Another challenge is that “rates for hazardous material or tanker endorsed shipments skyrocketed 60 to 70% during much of 2021 and early 2022,” Braun says. “Supply chain volatility continues, and recently costs on the spot market have declined.” The fragmentation of the U.S. trucking sector became even more pronounced during the pandemic, as many drivers left their fleets to start their own small businesses. However, if diesel prices remain high while spot rates fall, the newer entrants likely will struggle. “If small owner- operators don’t know how to handle these shifts, there may be a bigger swath of bankruptcies,” Braun says. That could mean even less capacity. Indeed, the rate of loads tendered and then rejected reached as high as 25% during 2021 and early 2022, Braun estimates. Some shippers are charged detention fees because their containers are stalled at the ports, even though they have little control over the delays. Shippers are not the only ones penalized. “Drivers make money only when their wheels are turning,” says Curt Gonya, senior vice president, chemical and specialty products logistics with KAG Logistics. Drivers who suspect they might be delayed with one load are increasingly willing to find other loads to move. Challenges notwithstanding, the market for chemical logistics providers is forecast to grow by nearly 4% annually between 2020 and 2027, when it’s estimated to top $322 billion, according to Allied Market Research. Technology is proving key in chemical logistics. “Capacity management and visibility solutions are critical,” Gonya says. Chemical logistics providers increasingly need to offer technical tools that boost shippers’ ability to access capacity and monitor their shipments throughout their order lifecycles. Through features such as collision avoidance and lane control, technology also has helped improve safety. “While not unique to chemical logistics, it’s

The market for chemical logistics providers is forecast to grow by nearly 4% annually between 2020 and 2027, when it’s estimated to top $322 billion, according to Allied Market Research.

This is particularly true with long- haul shipments, as more drivers leverage high demand for their services to choose routes that allow them to return home most evenings, says Diane Lyons, vice president, sales, with Odyssey Tank Intermodal. Shifting portions of trips to intermodal helps address this, as rail transportation generally requires fewer employees. Along with potentially moving to more intermodal tanks versus traditional drums or totes, some suppliers and end users source more regionally as opposed to globally, Miles says. This approach requires rationalizing a company’s logistics networks, reevaluating just-in-time inventory strategies, and placing even more emphasis on real-time shipment tracking to understand delivery risks. “At the same time, this creates a ton of benefit by avoiding trans-Pacific logistics challenges,” Boyle says. Shippers looking for ways to secure capacity will want to take steps to become shippers of choice. “For the first time we see situations where money does not buy a shipper’s way out of the situation,” Boyle says. While rates remain important, solid forecasting; the reliability and/ or repeatability of lanes; good site behavior, such as few or no delays; and predictable shipper behaviors are all essential to enabling shippers to address capacity challenges.

one of the biggest positive impacts of technology,” Strutz says. Over the next several years, artificial intelligence solutions that can track goods coming from outside a country at the container level and provide live updates will become more mainstream, says Scott Buber, director, operations and chemical division with WSI Supply Chain Solutions. Restructuring jobs through technology also is proving key to attracting and retaining employees. For instance, in addition to boosting pay scales and offering hiring incentives and bonuses, WSI has largely automated how it schedules trucks, Buber says. Carriers and other logistics partners can log in and edit their schedules if, say, a driver is delayed. “The providers can manage this themselves versus coordinating through someone else,” he adds. Another tool to blunt the impact of the driver and capacity shortage is greater use of intermodal transportation. “Moving products on domestic rail versus over-the-road allows shippers to reduce their dependence on drivers and other non-controllable factors,” says Robert Boyle, business unit leader with Odyssey Enterprise Managed Services, a unit of Odyssey Logistics. During Q1 2022, railroads moved more chemicals than in any other quarter in history, according to the American Association of Railroads.

72 Inbound Logistics • June 2022

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