Basic HTML Version
For decades – almost without
exception – the sun shone on the
oil industry and just about everyone
associated with its efficient and
increasingly profitable management.
Other verticals gazed in envy upon
its near endless bounty and, in some
cases at least, no doubt wondered
how to gain a slice of the action.
Well, they’re not quite so keen now. In
the past two years the oil industry has
suffered unforeseen price falls leading
to some quite cataclysmic changes
both in how the industry sees itself
and how it is perceived in the world
outside. Naturally enough, it has had its
effect upon the logistics providers, as
Managing a downturn
Franziska Inman openly acknowledges.
“For sure we’ve suffered lower
volumes,” she tells me matter-of-factly.
“Just 24 months ago, at $80-90 a
barrel, everyone was happy, there
were lots of projects. Now the oil
companies are driving down supply, it
has its own effect on the supply chain
and it trickles down to us.”
Cost and price are obviously factors
in Agility’s decision-making, but a key
change has been in the company’s
drive to innovate and create a more
efficient supply chain for its customers.
“Mode change is one big area,” she
explains. “We are going from air
consolidation to ocean consolidation
– or from ‘next
flight out’ and
First Class air
to different air
solutions.”
Demand
forecasting has
been another
focus area. “Oil
and gas are
traditionally
very reactive,
because they
are so volatile.
Planning has
therefore been
much more
short-term
because of that
environment.
When oil and gas
were in the boom
years, the truth
is no-one gave
much thought
to the supply
chain, but in a
downturn, it’s
about applying
the principles
used by other
verticals to our
own industry. So
that might mean
finding a more
efficient packing
How has the global downturn in the oil industry forced logistics operators
to change how they do things?
Paul Hamblin
spoke to Houston-based
Franziska Inman, Senior VP for Global Business Development, Agility.
method or redistributing weight to
reduce load counts.”
What about technological solutions
to provide greater efficiencies in the
downturn? “One thing we haven’t
done as well as other industries is
to make better use of technology to
provide data and information to our
customers which will enable them to be
more efficient. So, for instance, track
and trace capability – we can provide
better snapshots or dashboards to our
customers which will help them in their
conversations with their suppliers. An
example might be some data which
shows that, of the 10 suppliers which
a company is using, two are always
late. If we can provide that data to
our clients, they can go back to their
suppliers and ask the right questions.”
What of the future? Is oil and gas ever
going to return to the sunlit uplands?
“If I knew that, I probably wouldn’t be
sitting here!” she laughs. “Obviously
I don’t have a crystal ball, but we
are seeing less capital expenditure,
less investment, freight volumes are
contracting. I think the industry should
probably be braced for continuing
cheaper oil prices over the next year
and that a 90 to 180-day lag should
be added on to that in terms of the
logistics aspect in that scenario.”
Nevertheless, she is refreshingly
positive about the task the industry
faces, especially as sustainability and
green logistics become ever more
important buzzwords to be factored
into the mix. “It means that we have to
keep looking at ways to add value, so
it’s good for us,” she adds. But is it fun?
“Yes, it is,” she chuckles. “After all, it’s
what we’re here for, right?”
8
Logistics Business Magazine | February 2016
OIL AND GAS