GATX Integrated Solutions Group Targets Chemicals with Terminals, Rail, Logistics
Jul 1, 2000 12:00 PM
PETROLEUM products continue to dominate many aspects of GATX Corporation, but the company is making a concerted effort to increase its involvement with the chemical sector. Most recently, chemical services have been clustered under the GATX Integrated Solutions Group umbrella.
The group consists of GATX Terminals, GATX Logistics, GATX Rail Logistics, and the recently formed GATX Chemical Logistics Group. Making up the GATX Chemical Logistics Group are three key elements-GATX Liquid Logistics, GATX Inventory Monitoring Services, and recently acquired Leaman Logistics.
"Our objective is to be a full-service logistics solution for the chemical industry," says Paul T Newbourne, vice-president of GATX Integrated Solutions Group. "We see so many opportunities to reduce logistics costs for chemical shippers. Tremendous inefficiencies still remain in the chemical supply chain.
"Chemical customers want multiple integrated services from fewer providers and want a consultative sales approach. GATX's operating company synergies can provide the scale and breadth of services to create integrated logistics and supply chain values for our customer base."
Supply Chain Formed in September 1999, the GATX Integrated Solutions Group is a combination of all the GATX supply-chain-related businesses and is focused on the chemical and petroleum industries. It serves as a single source for customers seeking supply chain solutions and services worldwide. Customers are provided with seamlessly integrated logistics solutions.
"Initially, we're focusing on chemical logistics in the North American market, but GATX recently acquired a logistics company in Brazil," Newbourne says. "We'll pursue similar opportunities in other parts of the world.
"Our strategy is to reengineer the processes for all of the links in the supply chain. That's where the big dollar savings come from in logistics. More volume isn't the solution. We believe we can cut distribution costs by at least 3% through improved asset utilization."
The GATX Integrated Solutions Group has extensive supply chain capabilities that include supply chain engineering, design, and implementation; inventory and transportation optimization and planning; shipment management; product storage; bulk product distribution; multimodal transportation management; bulk chemical transloading; remote inventory monitoring; continuous inventory replenishment; asset management; and carrier management. These capabilities are augmented by custom-designed, state-of-the-art information systems that are increasingly using the Internet as a management tool.
Customers are offered the full range of GATX services, either separately or bundled into customized packages. The range of logistics services are among the broadest in the industry, and they are international, as well as domestic.
Worldwide Operations GATX Corporation has operations all over the world, especially in the liquid bulk terminaling sector. GATX Terminals have gone through an extensive restructuring program over the past three years as part of an effort to ensure that the company remains a leader in providing superior services to chemical and petroleum markets worldwide.
"Our terminals often handle both chemicals and petroleum," Newbourne says. "Petroleum storage still predominates at GATX, but we are increasing our activity in chemicals. We've sold off some of our petroleum terminals that weren't strategic, but we still have tremendous capacity in petroleum storage. For instance, our Houston (Texas) facilities handle 5% of all petroleum entering the United States.
"We're developing new approaches to the terminaling business. For instance, we've developed a terminal-within-a-terminal for Union Carbide at our Carteret, New Jersey, facility. We'll do more of that in the future."
Today, the company has terminals in 35 locations in nine countries. North America continues to have the highest concentration, with 18 in the United States and Mexico. Other terminals are in Argentina, Belgium, the Netherlands, Spain, United Kingdom, Japan, Singapore, China, and Malaysia.
Chemical Logistics Terminaling is just one of the factors addressed by GATX Chemical Logistics, which was formed in September 1999 following the acquisition of Leaman Logistics. The new operation brings together the capabilities of Leaman Logistics with GATX's chemical supply chain management and outsourcing businesses: GATX Liquid Logistics Inc and GATX Inventory Monitoring Services Inc.
GATX Chemical Logistics provides customers with supply chain reengineering, design, and implementation; inventory and multimodal transportation optimization, planning, and management; remote inventory monitoring; and continuous inventory replenishment. In short, GATX Chemical Logistics can manage every step in the chemical distribution process.
It all starts with a Supply Chain Alignment diagnostic study of the customer's existing processes. The study looks at material acquisition and product support systems, physical movement of inbound material and outbound products, monitoring technologies and systems, communications, information systems, and cost profiles.
"We build a distribution model that looks at all options," says J Stephen Hamilton, president and chief executive officer of GATX Chemical Logistics. "We want to find the solutions that are best for the customer. We want long-term relationships that benefit all parties.
"We believe that's what our customers want, also. Distribution managers at the chemical companies have already wrung most of the savings they can out of rate negotiations. Now, they have to look deeper into the basic structure of the whole supply chain.
"There are still plenty of opportunities for improvement, and we know where to look. Inventory reduction is one area. Delivery windows are another. We have to get away from the traditional time schedules. We have to reengineer every step in the process to find the real savings."
Transportation management is a big part of the effort at GATX Chemical Logistics. All types of transportation are addressed, whether ship, barge, pipeline, train, tank container, or truck. Transportation alternatives are best matched to load specifications, cost, delivery requirements, and integration into the total supply chain.
Buying Power GATX Chemical Logistics will leverage its buying power to control the total transportation cost. Rates are negotiated based on the accumulated total of all shipments through GATX Chemical Logistics.
The company works with 35 to 40 tank truck carriers and 70 dry freight haulers. GATX Chemical Logistics also markets Union Pacific Railroad's BulkTainer tank container service in the United States. "At Leaman Logistics, we had handled the BulkTainer service for about three years, and that relationship has continued under the GATX umbrella," Hamilton says.
Transloading services can be arranged, but GATX Chemical Logistics doesn't operate any rail transfer facilities of its own. "Some of our terminals provide limited rail transfer, but we're not sure we want to be very active in that business," Hamilton says. "Rates are too low. Many railroads give it away as a loss leader to get rail business."
The most efficient routes for any mode are determined based on the nature of the material being transported. Performance reports are issued periodically, and customers are kept up to date on regulatory and environmental requirements.
Electronic Capabilities E-commerce and the Internet are becoming important factors in the GATX Chemical Logistics operation. "We're moving toward web-based load tendering and acceptance," Hamilton says. "We're looking at the whole dotcom marketplace right now to see what actually works."
GATX ProServe (Proactive Replenishment Optimization Service), which incorporates Manugistics' Bulk Distribution Planning software, is web-enabled to allow the supplier, the customer, and the transportation provider to execute real time optimized inventory and transportation plans. ProServe is part of the system that enables GATX Chemical Logistics to coordinate and direct supplier/vendor managed inventory processes, ranging from monitoring and forecasting of customer usage through optimal ordering, availability confirmation, dispatching, and delivery to storage tanks.
GATX Chemical Logistics has measurement and telemetry equipment installed on more than 8,000 storage tanks worldwide, making it a leader in inventory management of bulk materials. Through the monitoring system, GATX Chemical Logistics can track remote inventory levels, verify delivery and consumption events, perform flow metering, and collect product performance data, such as pH levels, temperature, pressure, and conductivity.
Through its WEB*VMI system, GATX Chemical Logistics can ensure that customer inventory levels are constantly replenished without ever having to carry and pay for excess inventory. Multi-function sensors and computer monitoring help ensure that replenishment operations remain within specifications. Moreover, WEB*VMI generates historical data to assess performance and project future needs and cost savings.
Bulk materials distribution isn't the only sector benefiting from the computerized management capabilities. GATX Logistics (also part of the GATX Integrated Solutions Group) is focused on the supply chain for packaged product distribution.
GATX Logistics optimizes the supply chain by managing the movement of customers' raw materials, products, and information throughout the manufacturing and distribution processes. "Through GATX Logistics, we target packaged chemicals," Newbourne says. "It's part of being a full-service logistics provider."
Rail Logistics The final element in the GATX Integrated Solutions Group is GATX Rail Logistics, which develops and manages customized rail transportation solutions. The services offered by GATX Rail Logistics include rail, asset, carrier, shipment, and inventory management.
GATX has been in railcar leasing since 1898. Today, the company owns, operates, or has an interest in more than 157,000 railcars worldwide. GATX offers full-service tank car, freight car, and locomotive leasing; fleet management; and railcar design and maintenance.
The company operates the largest tankcar fleet in North America and a significant fleet of specialty freight cars. Chemical, petroleum, and food industries are target markets, and GATX has developed a number of special units for those markets.
The Tank Train system of interconnected tankcars was developed to meet the needs of the petroleum industry in moving crude oil from the oilfield to a pipeline terminal. Each unit consists of 78 tanks that are linked together by hoses. The entire unit can be unloaded in a matter of hours, compared to days for a traditional series of tankcars.
The Tank Train system was adapted to meet the requirements of transporting sulfuric acid in Australia. Twenty-four tanks in the unit can carry 384,000 gallons of sulfuric acid, which is used in fertilizer production.
From railcar leasing and simple storage to complex logistic algorithms, GATX Integrated Solutions Group will significantly improve chemical logistics and supply chain effectiveness by delivering measurable economic value to chemical companies and their customers.
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