What do you see as the key issues in the transportation of liquid bulk compared with dry bulk?
Whilst not all dry bulk is easy, most of the products produced in the Middle East are commodity plastics which are relatively uncomplicated to transport in bulk. When it comes to liquid chemicals the main challenges are those of dangerous goods classification and potential concerns related to the temperature of the products when in transit.
As a largely export-oriented market, the equipment available for liquids mainly consists of ISO-tanks which are operating in the global deep-sea market. This is fine when it comes to standard equipment but if specialised equipment is required, the availability is more difficult than in a market such as mainland Europe where there is more domestic movement of specialised vehicles.
As a petrochemicals producer the Middle East has already been manufacturing substantial amounts for many years and has done this very successfully, obviously with the advantage of lower cost feedstock. The available allocation of further feedstock is of course a challenge for those manufacturers who wish to expand their production capacities in the region.
The decision of certain Middle East manufacturers to move further downstream in the chemical chain and produce speciality chemicals provides a new horizon for the region and supports local wishes to manufacture more end-products for their own consumption. The feedstock cost advantage is then not as significant and it will be important to have reliable, safe and cost-effective logistics to handle this more specialised area.
Customers have growing demands when it comes to the shipping of their products, in terms of both lead time and quality of service. What’s the solution to providing this effectively in the current climate?
Quality of service is something that always comes at a certain price and the customer needs to understand that a fair price has to be paid for high quality. By working closely together the customer and the LSP can develop solutions to ensure good quality for a reasonable price.
Lead time is a challenge for the GCC manufacturers and whilst on the one hand the most cost-effective way to deliver is directly to the client, a buffer in the supply chain is often required with storage closer to the receiver. Ultimately the best solution is usually a combination of direct deliveries, sales on water and a certain amount of stock closer to the receivers for fast deliveries.
Container ships are experiencing difficult times on the whole, with many not leaving the ports at full capacity. But growth regions are struggling to find available containers for their products. What needs to be done to reconcile this mismatch?
It’s not really my area of expertise but we have been listening to all of the concerns about container availability for many years and it always seems to regulate itself. There are generally enough containers in the region but they are not necessarily in the right place at the right time. Repositioning becomes an inherent requirement and whilst it creates costs, it becomes part of the total price discussion between shipper and shipping line.
Do you get the sense of any sleeping giants – regions that could expect rapid growth in the next, say, 30 years?
Hard to say from my perspective. I believe it is well known that exploration for oil and gas is going on in many parts of the world, some of which are definitely not associated with major industry at this time. If reserves are found that need to be exploited, this could add new logistical challenges, similar to those related to new plants in remote areas of the Russian Federation. Clearly the shale gas theme has changed the playing field as the US now sees far more potential to develop its own feedstock and be less reliant on the Middle East. Whether shale gas will be a success in areas such as Europe remains to be seen with all of the environmental challenges that will have to be faced.
What can Alfred Talke offer to customers that will ease the entire process of the current challenging supply chain?
The “entire process” is probably not the right phrase in our case as we are not a typical freight forwarder but rather a specialised chemical logistics provider. I see our role in emerging markets as being one of supporting our multinational customers with the standards of services that they are used to having at home while developing their business in new markets where challenges, particularly in HSSEQ, are much higher.
What would you like to achieve during your time as Director, Middle East/Asia?
I hope that we and our customers can benefit from Talke’s first-mover advantage in our sector in the Middle East. There are still some very large projects coming up in which we believe we can participate well, particularly due to the fact that there is more diversity in the products being manufactured, which brings Talke back to its roots as a chemical liquids service provider in addition to the huge dry bulk market.
What have you achieved to date that you are most proud of?
Having spearheaded the movement of Talke’s operations beyond the boundaries of Europe and introducing the concept of outsourcing of site logistics in Saudi Arabia and then in other GCC countries. From there we took our operations to China and recently started in India. This has been a substantial development for the company in a period of less than 10 years and I hope to continue this development for many years to come.