Priorities for chemical logistics in an age of disruption
Markus Kanis, global SVP, chemicals, at DP World, shares some results of a recent study
Today, the risk of things in the chemical logistics value chain going wrong is higher than it has been for some time. Return on capital is at its lowest point in more than 25 years as the sector finds itself under pressure on several fronts. 1 Geopolitical tension is reshaping trade flows, US tariffs and Red Sea volatility are stimulating reshoring, while energy and feedstock markets remain volatile.
At the same time, the sector is under pressure to cut its greenhouse gas emissions( it accounts for 5-6 % of the global total) and scale up the materials that enable the energy transition. 2 This will be a significant challenge: the Rocky Mountain Institute has projected that emissions will more than double by 2050 without intervention. 3
This combination of dependence and disruption creates a new kind of exposure for chemical cargo owners – and in this fragile environment, supply chain visibility and flexibility have become nonnegotiable. The problem many chemical organisations are still
wrestling with is what this actually looks like in practice, such as:
• What is the right balance between inventory and responsiveness?
• What is the right level of diversification in routes and suppliers?
• What digital tools can be used to better anticipate and manage disruption?
The first step to addressing such questions is to quantify what disruption really costs, in money, in time and in reputation. Via this report,
Figure 1 – Reputational impact of disruptions on BCOs
Figure 2 – Most effective means or reducing costs via transport & logistics investments
we hope that cargo owners, logistical partners and policymakers can see more precisely where the work now needs to happen.
Now is the time to design for a world defined by disruption. The companies already investing in forecasting, visibility and multiroute design are the ones protecting margin and proving that resilience can be a competitive advantage.
Methodology
This report is based primarily on survey data from cargo owners
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