Storage of Substance

Storage of Substance


By Michael King

Amid the anarchy of the New York shopping festival season in late November in an office just off Fifth Avenue, the CEO of a major e-commerce third-party logistics provider bemoaned to Breakbulk the difficulties of finding enough storage for high-value e-commerce parcels.

“In Germany we just can’t convince developers to build logistics space that we can use, it’s a constant battle,” she said. “And it’s not much better here. And what is available isn’t the sort of space we can use most of the time.”

She was talking about high-value consumer products requiring minimal storage space for short periods of time – a very different set of logistics challenges compared with those faced daily by many Breakbulk readers. The warehousing options available for, say, a generator, are, of course, far more limited than those available for iPads and Kindles.

Non-standardized cargo also requires specialist onward shipment arrangements, handling, lifting, security and, sometimes, maintenance. This further reduces the available and suitable storage solutions.

Shippers evaluating warehousing solutions for oversized or breakbulk goods at ports, inland terminals or other distribution centers need to check off a lengthy list before they entrust their precious cargoes to a specific storage or warehousing facility.


Storage Criteria

According to DHL Global Forwarding, when searching for storage and warehousing options, much needs to be taken into consideration, and the criteria will vary based on the individual project. For example, shippers and forwarders need to consider the nature and specifications of the cargo, the distance to/from port and destination delivery point, how the journey from storage facility to delivery is planned, and the handling capability of the storage facility – for example, lifting gear, space for maneuvering and ground-bearing capacity.

Case studies and security assessments should also be conducted including an assessment of the experience of the facility and its personnel, while the location of the facility in terms of road, bridges, overpasses and access to barges and inland waters is another critical factor.

“Depending on the project, a site visit may be required as well,” said Mads Mikkelsen, head of industrial projects, U.S., ocean freight, DHL Global Forwarding. “At DHL Industrial Projects, we have a thorough and extensive vendor vetting process, which includes a screening of all vendors we use.

“This is the first step for any project we oversee to ensure all safety and security protocols are met. Some of the areas we assess are HSE (Health, Safety and Environment) policy statement, HSE manual and plan, external certification of HSE management system, example of task risk assessment, crane/lifting gear certification, HSE training register and HSE statistics.”

Gary Dale Cearley, managing director XLProjects Network, stressed the importance of security, particularly in Asia where the independent forwarding and chartering network has a strong presence.“Security is a major factor here, and security takes a few forms,” he said. “You need to know that no one who isn’t authorized will have access to the storage area, whether it be a lay down yard, warehouse or other facility. It needs to be free of foreign objects that can come into contact with it. If the cargo is laden outside, it will need the best weather protection possible. The entrance and exit to the facility are also very important. The cargo should be able to pass easily.”


Weighing Costs

And then, of course, there is price and how to manage the cost-benefit analysis of what the shipper wants in his/her perfect world versus the budget available. For many in the industry, this would be the first and most important consideration once negotiations begin in earnest and decisions are made. DHL, however, takes a different tack.

“Price is, of course, also a factor to some extent,” Mikkelsen said. “It really depends on what the shipper requires. Where requested, we can offer different solutions — for example, open versus covered storage at different price points. However, we will never compromise on security and safety.”

Cearley, however, believed there is invariably a trade-off, even in the best of situations, between what the shipper would like and what can be afforded. This is particularly true when the location of the project is an additional variable.

“If the projects are remote often the entire facility will have to be built from the ground up, thereby limiting alternative options and the ability to negotiate a better price. In Europe and North America, it is another situation. Many times there the project owner, the manufacturer of the cargo or the logistics service provider will have their own facilities. In less-developed countries, this isn’t always the case.”

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For many cargoes with specific requirements, a port will be the ideal location for short-term or long-term storage/warehousing given the onward distribution and handling options often available.

Cearley said finding a skilled stevedore in Asia is often at the forefront of the planning process. “Stevedores vary greatly out here in Asia,” he said. “In many places you don’t have any choice who to use. For instance, offshore supply bases in Vietnam — whether they are good or bad, you are stuck. And often stuck with a high price.

“Others, like in Singapore’s ports, have global reputations. If you are dealing with private ports there are often greater stevedoring options, but state-owned ports tend to keep monopolies. And that coin can flip in either direction.”


Largest By Volume

Hugo du Mez, advisor for dry bulk and breakbulk at the port of Rotterdam, believes the port offers a global one-stop shop for project and heavy-lift cargoes, including for warehousing and storage. Moreover, Europe’s largest port by volume is also enhancing its storage and terminal operations for specialist cargo.

du Mez said he believes Rotterdam has an advantage over its rivals in the shipping options shippers have for pre- and post-warehousing.

“For heavy-lift and project cargo, there is no typical way of transporting,” he said. “So we have deck carriers coming in, short-sea vessels, deep sea vessels, pontoons, barges … everything. Whatever the shipper requires, or the end receiver requires, or the shipping line requires, or the freight forwarder requires, we can accommodate it.

“And remember, it’s not only the breakbulk shipping lines offering capacity on the vessels, it’s also the container-shipping lines offering capacity on their vessels and from here they have scheduled services worldwide.”

With Rotterdam’s floating cranes in the port, container operations can continue on the landside while a transformer, for example, is loaded from the water side of the vessel, he said.One company at the heart of Rotterdam’s project and heavy-lift community is Broekman Logistics. Based in the Netherlands, the company supplies a range of forwarding and shipping services aimed at the project and breakbulk markets supported by three dedicated terminals at Rotterdam and Eemshaven ports offering storage, handling and onward distribution as well as access to Rotterdam’s heavy-lift and project shipping services.

The company’s flagship Broekman Distriport Botlek facility, for example, is 270,000 square meters with 50,000 square meters of overflow. Open storage is 225,000 square meters while covered storage takes in almost 60,000 square meters of which 13,500 square meters is temperature controlled. All of this is supported by crane capacity with lifting capacity of up to 700 tons and its own covered rail access.

Managing Director Rik Pek told Breakbulk that the needs of shippers are usually simple when they are boiled down to the basics. “What they need is expertise in project cargo and someone who will get it right the first time,” he said. “All the projects are unique and specialized, and the value of the products is high so the risk of the products being damaged or delayed is also high. So at port you need to minimize value-added activities such as construction and packing where needed. Then the shippers want deliveries to schedule and without damage.”


Adding European Capacity

Pek said Broekman Logistics is expanding Broekman Distriport Botlek. “At the moment we’re making investment decisions because we see an opportunity in the market for expanding the quay capacity and making sure that we have enough available space for our key accounts which are using the warehouses,” he added. “It’s related to oil and gas, so we’ll see more activity in the North Sea, especially the Dutch contracting companies. But also the power and renewable sectors.”

Onward distribution is always critical for post-warehousing in any supply chain management strategy and, forwarders report, the various shipping and modal options would generally be whittled down at the time of the tender for the storage and/or its supporting logistics contract. With access to Europe’s major waterways, rail, short sea shipping and road networks, the port of Rotterdam is well endowed. Elsewhere things can be more complicated, however.

According to Mikkelsen, in the U.S. where regulations can vary by state, onward shipment has to be a priority when choosing storage. “This is, of course, part of the overall route development and solution package,” he said. “Modes of transport are analyzed at the time of the bid. Part of that is indeed a close study of each leg of the route, including selection of vendors, for example railroad companies, as well as road permit requirements which would need to be reviewed as the turnaround time can vary state by state.”

In developing countries, Cearley said assessing the options and finding one suitable to the cargo and client could be a painstaking and complex task.

“It isn’t just the road, rail, etc., that has to be taken into consideration but the availability of equipment in many developing countries,” he said. “Many project forwarders are non-asset based, thus the quality of subcontractors as well as their experience is king here. If it is a barge that is to be used does it have the proper registration? What are the conditions of the prime movers and trailers? Are the cranes and loading equipment up to and do the operators know what they are doing?

“No one can afford cowboy firms.”


Michael King is a multi-award-winning journalist as well as a shipping and logistics consultant.

Photo credit: Broekman



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