The Shipper’s Guide to Project Logistics
Handling oversized cargo requires a special touch. Here’s how to find a project logistics provider with the know-how to get the job done right.
The global recession took its toll on the logistics sector, causing many service providers to seek out new market opportunities. One segment gaining market share is project logistics. This specialization, which requires expertise in handling and moving oversized or hazardous cargo from origin to final destination, represents an important and growing facet of the logistics sector.
“Logistics used to be all about warehousing, transporting, and handling product at the least cost,” says Adrian Hawkins, vice president, projects, for global third-party logistics (3PL) provider Kuehne + Nagel Inc. “Project logistics, however, goes against that old mindset of putting savings first. Project logistics can require years of planning for billion-dollar projects, and shippers can’t take logistics or monetary shortcuts.”
Finding a Partner
Shippers do, however, need to take special care when selecting a 3PL to handle project logistics. Any provider can claim it is able to tackle special projects, but specialists follow a unique business model with core competencies in global freight forwarding.
“Shippers typically do not have an adequate in-house logistics division to coordinate and plan all aspects of project logistics. They rely on 3PLs to handle the essential requirements of the job, craft a plan and a reasonable budget, then execute the plan effectively,” says Susan St. Germain, executive director of projects for Houston-based TransProject, the heavy project logistics division of TransGroup Worldwide Logistics, a 3PL headquartered in Seattle.
The Search Begins
When seeking a project logistics service provider, narrow your search to companies with financial stability, proper insurance, and experience handling various cargo projects. The most efficient way to find a competent partner is to ask for referrals, search the Internet for successful projects, and contact organizations such as Project Professionals Group, whose members are made up of qualified and vetted freight forwarders. Then interview your top three candidates to discuss company philosophy and project details, and solicit customer references.
“Flooding the market with numerous inquiries and not vetting forwarders in advance often results in higher rates,” says St. Germain. That’s because providers will think you are only looking for the cheapest solution, not quality, and will not take the inquiry seriously.
When interviewing providers, be aware that the majority of true project forwarders tend to be smaller, specialist companies operating in local markets.
“Most project logistics providers work in niche areas— and some even work in niches within niches,” says Gary Dale Cearley, executive director of Global Project Logistics Network (GPLN), a group of independent companies specializing in international oversized, out-of-gauge, and heavy-lift cargo projects.
“Most of the large, recognizable freight forwarding companies do not fit this mold,” he notes. “Although some operate project departments in certain global markets, and attract business based solely on their names, they aren’t necessarily the best available. For a true project company, look to local specialists.”
It also pays to consider the provider’s internal staff. “Some companies might not have a dedicated project cargo department, but they might have recruited specialists with 20 years of project experience,” Cearley adds.
Eliminating Surprises
All parties involved in a project logistics move need to feel comfortable with their role. Getting the logistics provider involved in the project as early as possible— 30 to 45 days before the estimated ship date— is critical to success.
“Before we start a job, we ensure we understand all the processes that will be required to move the cargo,” says Ross Bacarella, president of Shelton, Conn.-based BTX Air Express. “In addition, the freight forwarder and the shipper need to work together to make sure the cargo is compatible with all the transportation vendors’ equipment. For instance, we worked with one supplier to add loops to a piece of machinery so a crane could pick it up.”
Bringing a 3PL into the project planning phase early allows it to provide input into transportation plans. For instance, conducting detailed route studies at the destination point will determine if the location has adequate infrastructure to move the cargo. Sometimes, obstructions such as toll booths or trees along the route can cause delays.
“For these reasons, we like to get involved with the shipper as early as possible— even before an oversized piece of cargo is manufactured,” says Dennis Devlin, director of global projects and energy at BDP Project Logistics, a subsidiary of BDP International, headquartered in Philadelphia. “We can tell the manufacturer if the product will be able to get where it needs to go, or if it has to be lighter and smaller.”
Devlin recalls a special project that BDP handled for Quinn Chemicals, which was building an MMA (the base for producing Plexiglas) plant near the East Germany border. Bringing in 11 giant reactors and towers from around the world posed some transport challenges. BDP had to determine the exact weight and dimension of each piece of equipment early on because permits were required and the cargo would have to pass under some high-voltage power lines. To avoid areas with the most obstacles, BDP built a temporary bypass road out of aluminum panels across farmers’ fields.
“There is no substitute for figuring out these details ahead of time,” says Devlin.
For some carriers, such as Atlantic Container Line (ACL) in Westfield, N.J., getting involved just a few months before a project is fair lead time. ACL works with Fortune 100 companies directly or with their freight forwarders. The ocean carrier receives and loads special project cargo on board its vessels, relying on roll on/roll off (RoRo) equipment to handle and transport special project cargo while minimizing cost and handling. RoRo shipments often move as one piece, using specialized trailers from origin to port to destination.
ACL ships massive turbines, heavy machinery, aircraft fuselages, and giant cranes on every voyage. In addition, the carrier recently transported a colossal high-voltage transformer from Antwerp, Belgium, to New York aboard its RoRo/containership Atlantic Compass. The transformer weighed 255 tons and stood 30 feet tall, 11 feet wide, and 15 feet high. It was secured by ACL’s cargo bridge system, in which loadbearing beams are bolted to steel pedestals for stowage into the vessel’s RoRo decks via a 460-ton-capacity stern ramp.
“We can’t have surprises when cargo boards our vessels,” says Robert Willman, general manager, RoRo/special projects at ACL. “If all the cargo dimensions and weights are not properly calculated, we will not have the necessary equipment on board to handle it. That presents a real problem.”
Getting the 3PL involved early prevents problems from creeping up later in the project. For instance, the provider can look at project drawings and suggest ways to reduce transport expenses, analyze timelines to be sure it can meet milestones, and ensure that pricing is adequate to cover execution costs.
Treat Cargo with TLC
Covering your bases is essential to avoiding project logistics pitfalls. The goal is to get the cargo to its destination as quickly and safely as possible. Timing almost always trumps cost.
Shippers looking to save money, however, should discuss the best transportation mode with their 3PL. For instance, is a chartered flight required, or could cargo move via commercial airline?
“We try to optimize the best route at the least cost to the shipper,” says Dave Kemmer, director of global development for BTX. “We recently moved a 50,000-pound crane from New Hampshire to Korea on a commercial carrier, which saved one shipper thousands of dollars. The equipment left New Hampshire on Monday and arrived at the Seoul factory on Friday.”
Also, as a result of the recession, many service providers are trying to secure project cargo contracts, but not all of them are qualified. “A company specializing in containers, for instance, wouldn’t have adequate knowledge about how to handle oversized equipment,” says Devlin. “Experienced project logistics providers understand the details of moving this type of cargo.”
St. Germain agrees that using providers lacking in project cargo experience can negate the bargain price they offer. The 3PL might offer a good rate for trucking to a jobsite from the port, but will it know to check whether engineering studies are needed for permits? If not, that can be a $35,000 surprise.
A specialist can also help minimize or eliminate risks involved in project logistics. For example, a detailed method statement outlining the best way to lift and handle the cargo is particularly important when transporting hazardous materials.
Bottom line: it pays to invest in the services of an experienced project logistics provider. “Many shippers don’t fully understand special project logistics,” says Bacarella. “This is cargo that requires extra love and tenderness.”
Houston, We Have No Problem
Planning nine months ahead to receive more than 26,000 freight tons of critical petrochemical equipment —including 11 items weighing between 220 and 570 tons —is already a logistics challenge. Being tasked with loading all the equipment within one week, and shipping on two separate vessels to arrive within a 10-day window of each other, is another challenge altogether.
Kuehne + Nagel’s Houston project office tackled this challenge for a major petrochemical client constructing a new polypropylene facility in Texas. Planning involved site visits and dozens of meetings and conference calls to keep all parties informed of the manufacturing progress and final shipping window.
All the components were critical to the plant’s success and timely start-up. Detailed risk analysis ensured each step of the door-to-door movement had a recovery backup plan and each component had its own lifting, stowage, and securing plan for land and sea transport.
Because the origin was Kuantan, Malaysia, the backup plan even included positioning a floating crane in case any of the ships’ gear failed before or during loading. A similar plan was incorporated into the discharge operation in Houston. The project manual included historical weather and ocean current data for the time of year in order to plan safe harbors should foul weather threaten the security of the voyage and the valuable deck cargo being transported.
Thanks to careful planning and constant communication, all cargo was loaded within five days and arrived safely in Houston, on time and on budget.