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

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.

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.

Solutions – packed to bulk

Schmidt Logistics’ focus has always been on the elimination of waste, and waste comes along in many forms, such as spillage, excess labour, extra packaging, excess handling, extra space required, and high operating cost on material handling equipment. Waste can be measured in many ways, but the certainty is waste costs money and erodes profit margins. The aim and focus of Schmidt Logistics are to reduce the time and to increase the effectiveness of loading and unloading of dry products instead of handling packed goods.

Schmidt Middle East believes that there is an unlimited potential to move from the traditional bagging and packaging operations to more focused bulk collection and storage methods. Therefore, Schmidt has invested and built two large distribution centres in Kizad, Abu Dhabi, and Bahrain, in support of this.

These distribution centres have not only warehouses but also have cooling facilities as well as silos to store and reconfigure the mode of transport. It is a fact that by importing in bulk and distributing in daily smaller quantities the operating cost of local moulding companies can go down as those have no need of warehouses and forklift operators as well as the other material handling equipment. The optimisation of logistics is accomplished by eliminating the storage requirements of such a company and by making use of the small customised silos.

The concept is to receive the material in bulk, store it at the Schmidt Logistics’ facility and then deliver to the end-customers on a daily basis, or as required. Schmidt Logistics’ silos that would be installed on the customer’s site are equipped with measuring devices and can send daily stock records to Schmidt, indicating when the next delivery should be made.

This further eliminates planning and human errors as it is a digitally controlled operation. Savings of $25mn each year for a world-scale production plant is easily achievable by this. However, the existing distribution centres and the other planned distribution centres in the rest of the Gulf countries are not the only arrows in the Schmidt quiver of arrows.

The elimination of waste is not only dependent on a distribution centres, but also on the efficient loading, unloading and transportation of materials. Therefore, Schmidt Logistics has developed various types of road tankers and bulk containers to ensure the provision of the most efficient transportation at all times. Waste can be caused by the underutilisation of transport modes such as trucks, or trailers. Each task will require a specific unit and Schmidt Middle East has the knowledge and experience to define and implement the best mode of transport to use.

A market leader

Schmidt Middle East is a market leader in the following to ensure continuous improvement and elimination of waste to manufacturing companies.

Schmidt Transport: Transport services by road tankers and silo containers are the core business of Schmidt Middle East. For the world bulk goods carriers, the name Schmidt stands for brand quality and diligence for many years. More than 60 years of experience in the transportation of dry bulk products ensures a high level of expertise. Consequently, Schmidt has become one of the leading logistics providers in Europe and the Middle East.

Schmidt Logistics Consulting: Extensive knowledge and experience of many years, in addition to the technical and operational know-how gained in the bulk goods industry, are the backbone of Schmidt Logistics Consulting, which is tailored, in all cases, to the individual requirements of its customers.

Storage for Bulk Goods: Schmidt Group operates the largest network of logistics centres for the European plastics bulk industry. Most sites are located in the immediate vicinity of, or adjacent to the key players in the petrochemical industry. To supplement transport services, Schmidt bulk logistic centres offer various storage and warehousing capacities, customised to individual requirements.

Schmidt Logistics Solutions: Logistics solutions are provided for complex material flow and transport systems. In this case, the whole process chain will be analysed and optimised from the point of production to the factory of the consignee.

The key trends in the future of polymer logistics are: (i) A closer link between producers and customers; (ii) An automated movement of goods and use of fully automated vehicles; (iii) Semi-automated shuttle transportation; (iv) Logistics and IoT (When IoT gets more prevalent shortly with smart devices attached to the vehicles [and not just sensors], blockchain could enable a peer-to-peer interaction or communication for logistics. This becomes more useful with the advent of autonomous vehicles and increased security concerns.); (v) Real-time data capture and monitoring; (vi) Artificial Intelligence and IoT can have a revolutionary impact on the supply chain; (vii) Blockchain’s unique ability to present singularly accurate and uncompromised data facilitates interoperability of industrial processes at an exceptionally expedited and accurate level. Since logistics chains typically span a broad network of incremental steps – packaging, loading, transportation, offloading, warehousing, consignment changes, container changes, multi-stop trips, multi-vehicle trips and security checks at each node – the decentralised and safe network of a blockchain is, therefore, logical and proficient to apply a solution for more intricate logistics chain.

Schmidt Middle East is the trend leader in logistics and is immediately available for consultation to collaborate with potential customers with the ultimate aim to eliminate waste in the client’s facility.

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