Managing the supply-chain

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Anthony Elwine, manager of global industries, Maersk Logistics.

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Elwine expresses his optimism for Maersk logistic’s petrochemical division.

In a customer driven commodities market the hydrocarbon supply chain faces a multitude of challenges, as well as opportunities says Anthony Elwine, Maersk's logistics manager of global industries.

The oil and petrochemical industries are global in their very nature. This boom in global demand and the inflexibility involved in the petroleum industry's supply chain has made its management more complex and much more challenging.

Commodities and products are transferred between locations that are, in many cases, continents apart. The long distance between supply chain partners and slow modes of transportation induce not only high transportation costs and in-transit inventory, but also high inventory carrying costs in terms of safety stocks at the final customer location.

The transportation process is carried out either by ships, trucks, pipelines, or railroads. In many instances, a shipment has to exploit multiple transportation modes before reaching the final customer's location, so the distances between supply chain partners present a variability of transportation times that can, in turn, affect the suppliers.

In terms of finished goods, a typical process would mean having the petrochemical manufacturer, who will then go to the industries that are called converters, taking the raw material and converting it to a semi-finished or finished good ready for export to a market. This ideally will be deemed finished goods, or part finished goods in the supply-chain.

Maersk Logistics, a provider of supply chain management solutions, is broken down in to a number of different sectors - an aviation business, an oil and gas division, and a sector devoted to businesses involved with parcel tankers, retail, and a number of plastic converter industries from around the world.

A transactional business

Anthony Elwine, the global head for the petrochemicals industry for Maersk Logistics sees great potential in petrochemical transportation. Working across the Middle East and for a number of European and US based petrochemical manufacturers, cargo is exported across the globe from the countries of origin.

"Clearly just by shipping the product, it is a very transactional business," says Elwine.

"The Middle East industry is growing at a significant rate at the moment, and looking at future projections that's going to continue to happen until around about 2040-2050.

Based on significant growth, and access to local feed stocks in the Middle East, it is very important that rather than being a business that's transactional based - these clients need to differentiate themselves from the competition which, is where Maersk Logistics comes in, adding value to their supply chain," he adds.

Globally, the petrochemical industry is a very important base cargo because of its extensive volumes, and constant need for supply-chain management. Logistics management in the petroleum industry contains various challenges, which are not present in most other industries, such as retail (clothing), for example.

Maersk's business is container related and most petrochemical product is shipped in a choice of flexible 20ft containers, or in 40ft containers in which there appears to be a significant growth in demand for.

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