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Malaysian innovation for managing chemical, gas tanks will deliver significant savings

AvantiKumar | Nov. 2, 2010
'BDPSmart Tower controls global tank movements, increases productivity, reduces costs'
KUALA LUMPUR, 2 NOVEMBER 2010 -- A new Malaysian solution that will manage core assets of chemical, and oil & gas companies will deliver significant cost savings, and increase productivity, according to logistics management firm BDP International.

"The solution, called BDPSmart Tower, managed one of the core assets of chemical and oil & gas companies - their ISO-tanks and multiple element gas containers (MEGCs) - and is believed to be the first of its kind," said BDP regional director, business development, Asia Pacific, Hoo Ching Dew.

"The new service addresses the long-standing problem of how to simplify and improve the management of the flotilla of industrial tanks used for shipping chemicals and other industrial liquids / gases around the world," said Hoo. "It is estimated that under-utilisation of these containers could be costing chemical and oil and gas companies more than US$1.5 billion a year in unrealised revenue."

Under-utilisation of tank assets occurs because no single source in the supply chain has been responsible for tracking and controlling the tanks, particularly during their destination dwell time and the return leg, he said. As a result, these assets often sit idle for weeks if not months awaiting their next move. In one case, an ISO tank was discovered sitting at a customer's site for 14 years.

BDPSmart Tower is a complete management service that improves visibility and optimises utilisation of tank assets. The service comprises four principal components: End-to-end freight forwarding including planning for the reverse logistics of empty tanks to ensure they are returned on schedule.
 Potential earnings from new solution

BDP's decision to develop the new offering was reinforced by market research confirming the difficulties global shippers face in managing these forgotten assets," said Hoo.

"Of the 250,000 tanks worldwide, 100,000 are owned or leased by chemical, petrochemical and oil and gas companies," he said. The profit on each tank's contents is conservatively estimated to be about US$15,000 per trip. So getting just one additional trip a year from each tank could earn the industry a projected US$1.5 billion annually.

"Companies also pay the hidden' costs of extended idle time when customers hold the tank and use it as a form of free storage, as well as unnecessary port charges associated with delays in moving the tank back to its owner," said Hoo. "This erodes productivity and delays sales as the tanks are unavailable to be used more frequently for outbound transport of shippers' products."

Until now, there has never been a comprehensive way to centralise the visibility of ISO-tanks and other specialised container assets in the reverse logistics phase of the supply chain, he said. This lack of visibility, together with a lack of ownership of the reverse logistics process, has resulted in wasted time, inefficient use, added expense and unrealised profits for shippers.

Shippers can now rely on BDP to track numerous milestones in the transportation / logistics lifecycle, significantly improving velocity and turnaround time of their tank assets," said Hoo. "Each tank can cost between US$150,000 and US$300,000, so it pays to manage them the same way as any other high-value asset.