The unmoved logistics potential of the 3.000 billion chemical industry

September 28, 2015 Ken Klaver

freight audit. chemical sector potential

  • 700 million tons of freight per annum need better logistics and supply chain management
  • New research from DHL reveals promoting logistics to board level importance increases competitive advantage and cost savings
  • Identifies 5 key levers to use logistics as a strategic management tool

Leading companies in the chemical industry are possibly missing out on serious freight spend savings, cost reductions and competitive advantages. This according to a research commissioned by DHL.

This report (and infographic) highlights the opportunities for the chemical sector to address in order to overcome challenges and improve the overall performance.

The 5 different areas where the logistics department of chemical companies must focus on, according the report, are : optimizing logistics costs, freeing up capital for better inventory management, smart investment in logistics assets, increased focus on end-to-end safety and security processes and differentiated logistics services.

"Logistics in the chemical industry is expected to run smoothly and reliably with senior executives usually only paying attention when something goes wrong and rarely regarding logistics as an opportunity," explains Michael O'Hara, Global Head of Chemicals Sector, DHL Global Forwarding. "Logistics and supply chain management should be key elements in a formula for success for global chemical companies in today's complex interconnected marketplace where products are fast being commoditized."

With a worldwide sales value of Euro 3,000 billion, the chemical industry is one of the world's largest and most important sectors, generating international trade volumes above 700 million tons of freight annually. The industry is exceptionally diverse with complex supply chains challenged by the variety of products, highly specialized transportation and storage requirements and growing safety issues. With the ongoing globalization of the supplier and customer base, chemicals are fast becoming commodities and as a result competitive advantages are getting harder to find.

freight auditing.chemical sector potential

In order to meet these challenges, it's imperative that the senior management staff changes its perception on logistics and freight spend.  It should no longer be approached as a transportation and delivery service, but logistics should become a strategic asset. "Management boards of chemical companies usually do not perceive supply chains and logistics as opportunities for their business. The five levers we outlined provide executives with insights and recommendations how to improve their company's capability for better performance and increased competitiveness."

freight audit.chemical

More content by ControlPay:

1.  What is Freight Audit - How can Freight Audit reduce logistics costs?

2. How to Maximize value out of a TMS 

3. 11 Ways to Gain Global Transport Cost Control

freight audit. logisticspotential of the 3,000 billion chemical industry

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