The chemical industry serves as support for many other industries, like agriculture, automotive, construction, and pharmaceuticals. According to an American Chemistry Council report, 96 percent of all manufactured goods trace back to chemical manufacturers. Chemical manufacturers often process raw materials into refined products used in other industries or within the chemical industry. However, raw materials costs have been rising recently, along with additional operating costs in the chemical industry.  

As chemical manufacturers face increased expenses, many find it more challenging to remain profitable. How can chemical manufacturers better manage their operating costs? In this blog, we’ll take a walk through what chemical manufacturers are currently facing and how they can better manage their operating expenses.  

Rising Raw Material Costs 

Raw materials costs have been rising in recent years. Part of the cause for increased prices is because they’ve gotten scarcer as the demand has risen for them. For example, raw agricultural materials have increased 117 percent since 2000, rubber has seen an increase of 359 percent, and steel is up 167 percent.  

Crude oil, which many chemical companies use for energy and other materials, is up 250 percent since 2000. Crude oil prices are the most important ones to watch because it affects so many different markets. For example, many basic ingredients originate in the oil and gas fields and then travel through a global supply chain to make materials like plastics, packaging, fertilizers, lubricants, paints, and much more. Additionally, higher energy costs mean higher operating costs for the chemical industry.  

Logistics Operating Costs in the Chemical Industry 

The strength of long, global supply chains continue to be tested. From the start of the Covid-19 pandemic to battling intense weather and labor shortages, prices for logistics operating costs in the chemical industry have skyrocketed. Chemical supply chains have had their weaknesses exposed, from their dependence upon the volatile oil and gas sector to their global shipping networks. It’s caused additional cost as many of the materials needed to operate are out of stock due to shipping congestion and backlogs. According to a survey done by the National Association of Chemical Distributors, 85 percent of chemical industry distributors reported at least one imported item out of stock. 

How to Better Manage Operating Costs in the Chemical Industry 

Interestingly enough, skyrocketing logistics costs are beginning to outweigh other operating expenses for chemical manufacturers. Finding better management and control in your logistics may be the thing to keep your chemical company cost competitive. As a result, a growing trend among chemical manufacturers is turning to outside help for their logistics. Many chemical companies find that using a third-party logistics company (3PL) makes a lot of sense. It helps them free up resources to focus on other aspects of their business. Here are some ways working with a 3PL can help you manage your operating costs.  

Find the Right Carrier – In Less Time 

We all know the stress and workload of finding a carrier to move your freight, especially for chemical manufacturers who need carriers that know how to handle their products safely. Capacity can be limited when looking for a hazmat certified, or tanker endorsed carrier for a decent shipping rate. Outsourcing your transportation is one solution to that problem.  

3PLs will take over the responsibilities of finding and vetting qualified carriers. A 3PL should make sure carriers have the proper credentials, insurance, and experience for your freight. Take control of your time and let someone else take on the workload so you can gain time for the rest of your business.  

Create Efficiency With A 3PL’s Technology 

Working with a 3PL also offers you access to their technology services, like shipment tracking, automated workflows, and detailed reporting. By replacing your manual processes with logistics technology, you’ll find more visibility into your supply chain. And that visibility can help you find efficiencies to help you manage your operating costs. While the technology itself can be an extra cost alone, most 3PLs offer you technology applications along with freight arrangements. Additionally, you’ll have experts you can rely on to help you navigate those applications.  

Transportation Management Systems 

All chemical companies are focusing on streamlining their operations, whether they choose to outsource their logistics or not. Many companies are turning to transportation management systems (TMS) to optimize their transportation networks. 

A TMS can help your business gain visibility into your supply chain, create new efficiencies, and automate your manual workload, so you can better manage operating costs.  

When using a 3PL, you often have options to choose how you want to integrate your TMS. Trinity Logistics offers you customer integration and a specialist to work with you every step of the way. No matter what option you choose, you gain the visibility and automation you’re looking.  

Control Your Logistics Costs 

In business and life, there are certain aspects that you can manage and control. As a chemical manufacturer, you must manage those costs that you can control and plan for those variances in costs for those you cannot. Logistics is one operating cost you can manage when you choose to partner with a 3PL.  

And you don’t have to look too far to find one. Trinity Logistics is well-versed in the chemical industry and understands your complicated market. Our Team of experts is here to help you find the quality carrier you need while offering technology to help you create efficiencies. We can help you gain control over your logistics costs, so you can make room for those other unknowns.  

If you’re ready to get a handle on your operating costs in the chemical industry, let’s get connected.  

Author: Christine Morris

By definition, logistics is the management of the transportation of materials or equipment from where they are to where they need to be. For everyone, materials or equipment need to arrive on time and with no damage, and this lies especially true for those coordinating construction projects. Construction sites require heavy-duty and valuable equipment and materials that must be delivered on schedule. The absence of a logistics plan and tracking for your freight to your construction sites can lead to several problems. Here are some reasons why you don’t want your logistics in construction projects to be an afterthought. 

BEHIND SCHEDULE

It only takes one delayed shipment for a construction project to cause the schedule to fall behind days, weeks, or even months. According to the Electrical Contractor, in 2017, 61 percent of construction projects were shown to be behind schedule. Obviously, this is a big problem in the industry. Even worse, being behind schedule raises costs. Over half of those 61 percent of construction projects that were behind schedule were also over budget. 

EXTRA COSTS

When materials or needed equipment aren’t delivered on time and on-site when the crew members are scheduled, then they are sitting ducks with nothing to do. Since scheduled, they will still need to be paid for those days that they are on-site, whether they are working or not. Additionally, you’ll have to pay them for any extra days that they will need to complete their work, which may come with extra costs due to pushing back their work schedule. When the material or equipment needed is not on the job, you’re simply not making money. 

You’ll also need to consider theft. According to the National Crime Information Center, nearly 1,000 pieces of commercial construction equipment are reported stolen each month. Thieves often target valuable construction equipment like bulldozers, forklifts, or generators, and even materials with a high resale value. Theft can be costly as you not only have to replace the stolen equipment but face the possibility of increased insurance costs due to the claim. 

Choosing a provider to support your logistics in construction projects can give you the potential to avoid, or at least be better prepared should something happen. 

REDUCED TRUST

The worst issue caused by improper logistics planning is reduced trust in your customers and partners. Falling behind on schedule and incurring extra costs that have to go somewhere makes you seem less reliable. You could lose customers and gain a poor reputation. Nobody wants that for their business. 

BE BETTER THAN THE REST

Having effective transportation and logistics in construction projects ensures that your materials and equipment will be delivered on time, keep you on budget, and keep your reputation among customers. Yet, becoming effective with your logistics can be tough, but it doesn’t have to be. Consider partnering with a third-party logistics company (3PL) to help you can gain a competitive advantage by better managing your logistics. 

CONSIDER A 3PL TO HELP WITH LOGISTICS IN CONSTRUCTION

Focus on what you do best and let a 3PL do the rest. Working with a 3PL can eliminate the headache of handling your logistics in construction projects by offering you access to :

A VAST CARRIER NETWORK

You need experienced, qualified carriers, and 3PLs, such as Trinity, to have those much-needed relationships with them. A 3PLs service is to both shippers and carriers, allowing us to build solid relationships with carriers all over. Each motor carrier is vetted through our Compliance Team, so you’ll never have to stress over your freight arriving on time and safely.

MANY MODES

Since we work with so many carriers, we have access to many modes of transportation. Whether you need air, ocean, rail, truckload, or anything else, you’ll no longer have to work with several companies for your logistics needs. 

AUTOMATED PROCESSES

Whether you choose to outsource your freight transportation or all your logistics, you’ll see efficiency in the automation we offer. From carrier vetting, freight tracking, invoicing, and more, you can reduce your time on many manual logistics processes.

ACCESS TECHNOLOGY

No need to pay for (costly) technology when you can gain access to state-of-the-art technology when working with a 3PL. At Trinity, we offer tracking through FourKites, MacroPoint, Trucker Tools. View all your shipments and their statuses, pay your invoices online, or request a quote on a new shipment in our Customer Portal. Or work with our Managed Services team and see if a TMS solution is what you need.

GAIN MORE CONTROL OVER YOUR LOGISTICS COSTS

Through all the benefits mentioned above, you gain control over your logistics costs. When working with Trinity, you’ll have an expert on your side to help you make informed decisions so you can choose what works best for you and your budget.

KEEP YOUR CONSTRUCTION PROJECT ON TRACK

The main benefit you gain from using a 3PL for your logistics in construction projects is that it helps you simplify your challenges and find your own customized solutions. 3PLs, like Trinity, work with complex situations and variations frequently, and better yet, we thrive in them. In construction, we know your supply chain is always changing. When you choose to streamline your logistics, you can lower your costs and know your construction project will be completed on time. 

Trinity has supported construction and manufacturing companies of all sizes. We’ve aided in logistics projects like office buildings, roadways, housing developments, and more. We know that in your industry you need your materials and equipment exactly when and where you need them. Let Trinity help keep your construction project on track.