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Special Report: Modern polymer logistics: It is more than just transport

by Arabian Oil & Gas Staff on Apr 18, 2018


This multi-user chemical and petrochemical dedicated hub of Schmidt Middle East offers its services to clients within UAE and the rest of the Gulf region, and acts as the companys Middle Eastern headquarters.
This multi-user chemical and petrochemical dedicated hub of Schmidt Middle East offers its services to clients within UAE and the rest of the Gulf region, and acts as the companys Middle Eastern headquarters.

Schmidt Logistics has developed unique systems and processes for dry bulk logistics which can catapult an organisation to the path of higher success in its entire operation.

The low price of oil, declining profit margins, and the rising cost of labour are facts we are all well aware of in the current Middle East Scenario. The rule of the game is changing, and the companies which adapts the best will survive the longest. Innovations are needed, and the traditional ways of doing business need to change drastically. To survive and grow, more focus must be placed on smart logistics processes.

Schmidt Group

Schmidt Logistics was founded in 1948 in Germany, and one of the key driving factors behind the success of the company was the permanent innovation of the supply chain process for the petrochemical industry.

Starting with the invention of the silo trailer to replace the hard-working labourers carrying bags, the company is touching today a global network of polymer hubs to serve its clients with an overall package of services. A complex supply chain covers today easily 40 to 80 single chains that have to fit together (physical and admin). The product portfolio of Schmidt Logistics increased to all kind of ‘dry products’ – meaning dry chemicals such as polymers and catalysts and dry food items such as rice, flour and wheat.

In 2009, the Schmidt Group saw the business opportunities offered in the Middle East as a fast-developing market. Schmidt leadership decided to launch an office in Abu Dhabi, and from this new office, Schmidt was involved in the planning and design of a significant bagging and packaging facility in Shanghai, China, and successfully commissioned this facility in 2011. Since then, Schmidt has grown in strides and worked with many large companies, handling their bulk product logistics.

Different client requirements, inflation of KPIs

Today’s clients are seeking logistic solutions starting from the planning, detailed engineering, procurement, construction, commissioning and operation of their facilities.  Logistic solutions not only mean on-site operations, which is just one link of the chain, but also transportation to the end-customers, or storage in the intermediate hubs, which are also significant elements in the supply chain. Schmidt Logistics is also involved in optimising the delivery mode – packed or bulk – of the final product to the customers.

Globally, the general principles of outsourcing of on-site logistics vary in different parts of the world. For example, in the GCC, manpower based requirements are more common, and maintenance is not carried out by the logistic operators as the owners are responsible for the provision of spare parts. This module presents 100-200% higher maintenance costs than the complete maintenance package by the logistic service provider.

Compared to Europe and North America, cost of logistics operations in the Middle East is 200-300% higher, if the salary levels would be similar. So, there is still a significant room for improvement and cost reduction of the logistic operations.

The KPI structure of clients and customers’ business attributes show the requirements, in detail, getting inflated over the last decade, showing the typical picture what a logistics service provider can supply. KPI structures of 50-70 single topics are getting common.

Customers’ ranking of the importance of business attributes is in the following order: safety operation; competitive pricing; delivery lead time; delivery accuracy; long-term partnership; product consistency; ease of contacting; traceability; and controllability. Key parameters and the instability of logistic costs are the drivers of smart logistic solutions.


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