As containers continue to be in short supply, logistics professionals are eager to find new container solutions.
It’s a problem that has only become more challenging to address since the start of the pandemic.
First, the slowing of global trade and subsequent ramp-up caused an unprecedented bottleneck of shipping containers. Availability stalled in some areas while elsewhere, ports were congested with empties.
To make matters worse, the slowdown of global steel production led to reductions in ISO container production and other key container types as well, such as steel drums.
Plastic production also slowed, driving a shortage of critical industrial containers, such as high density polyethylene totes suitable for the storage of specialty oil products.
As the effects of the pandemic on the global supply chain continue to play out, we’re all faced with the imperative to adapt.
We continually ask ourselves, what more can we do to deliver container solutions to our customers and enhance supply security?
Searching for Container Solutions
In a previous post, we explored how to apply “outside the box” thinking around trucking solutions. But what do you do when you literally face the prospect of lacking any “box” at all?
Standard logistics strategies can help when you can’t depend on the just-in-time availability of critical containers.
You can:
- Experiment with different types and sizes of containers. Only if this is an option, of course. We require certain standards to maintain the integrity of our products. Options are limited.
- Plan orders further out in advance. As experienced logistics professionals, we were already planning as far ahead as possible for contract customers. But we needed to improve supply security for them while maintaining our capacity for spot orders as well.
- Develop new trucking solutions. Strategic arrangements with trucking companies can add efficiency to the transportation of containers and help keep them circulating. Of course, we knew efficiency gains would only get us so far in a sustained shortage.
While these measures help, we wanted to do more to address the fundamental problem. Was there a way we could remove the need for just-in-time availability of containers entirely?
Customer-Centric Container Solutions
We came up with a way that supply security for our customers was no longer dependent on a continuous supply of new containers: putting the container into the customer’s hands and showing them how to reuse it rather than just recycle.
For many customers of select specialty oil products, our standard business practice had been to fill and deliver a new tote for each order. This required us to maintain a surplus inventory of these containers to ensure just-in-time use. Typically the customer would send the tote for external recycling.
But our specialty oil products can either be transported by tote or in bulk (by tanker), and the latter option has a lower cost. So, we decided to offer this solution to a broader base of customers.
For those who did not have bulk tanks, we offered to sell them our filled, reusable totes to create a dedicated supply point. Once customers began keeping totes dedicated, reusing rather than recycling them, they could then order in bulk and we would refill them on site.
This saved both the cost and supply issues to obtain new totes as well as the labor to fill. These customers would get the lower cost of bulk oil delivery into totes that they had already paid for.
Benefits
- Customers who owned a sufficient number of totes for their day-to-day needs were insulated from future container supply concerns.
- They could enjoy the bulk rate, which saved them up to $1 per gallon compared with toted pricing.
- Delivering via tanker to a fixed supply point facilitates speedier service, as it is generally more efficient than navigating to a packaging facility and then shipping the filled totes to the customer.
This is just one example to illustrate the point. When trying to solve logistics problems, the best policy is always to look at the customer’s perspective first. Win-win solutions are often there for companies willing to try them.
Work with Renkert Oil to Find Container Solutions
Addressing the container shortage is just the beginning. Drawing from four decades of experience solving complex logistics problems, Renkert Oil is here to help you solve yours.
This extends beyond offering you the best supply security for specialty oil products in our industry. As partners with you, we’re also eager to share our expertise to help you solve your own supply chain challenges.
So if you’re looking for a specialty oil supply partner that can help you find the innovative container solutions you need, talk to Renkert Oil today.