How savvy oil & gas companies solve the top 5 challenges of moving bulk materials
The oil and gas business is booming – so is demand for bulk materials like cement, gravel, sand and water. If you’re in the oil & gas industry, you need gravel to build roads to well sites, cement for well pads, sand and water to break up rock and extract oil and gas – and you need these materials in the right place at the right time.
That means knowing when and where a well is being built, when and where you need which material and coordinating closely with material vendors and carriers. If you don’t want congestion and delay as dozens of trucks squeeze into an area the size of four tennis courts, the key to making that happen is better data and visibility. For many oil and gas companies, this is a huge problem. And it’s mostly because of the paper run ticket and dated processes that make it tough to track and transport bulk materials.
Top 5 supply chain challenges of moving bulk materials
- Losing the paper chase? Here’s how to win it.
When a truck loaded with sand, gravel or water arrives at a site, the driver turns in a little paper run ticket to be time-stamped and get paid. Depending on the size of the site, thousands of those tickets might be floating around – literally and figuratively. The paper tickets, not surprisingly, get lost, damaged and create massive data entry challenges.So how do you end the paper chase? Replace it with an electronic ticketing system that records data from order to cash in one repository accessible via Web, smartphone or tablet. Don’t have the resources to do it yourself? Team up with a third-party logistics (3PL) provider that can. - Trouble sourcing carriers? Offload the load.
The freight capacity crunch and driver shortage rank high on every industry’s list of transportation challenges. It’s far worse for oil and gas companies, where job sites are located in remote, hard-to-get-to areas where qualified drivers and special equipment are few and far between.Struggling with finding, managing, and interacting with common carriers? Team up with a supply chain partner that can procure and manage carriers for you – one with expertise in procurement, contract management and safety. - No visibility into your supply chain? How to get insight.
The U.S. recently displaced Saudi Arabia as the world’s number one oil and gas producer, thanks to shale rock drilling. And yet, most of the companies driving that explosive growth, have little to no visibility into their supply chains. Many don’t know how many loads of water or sand are in transit, what they pay for transport, or the cost of detention fees because drivers are waiting around.Enter digital platforms that provide visibility to key metrics. Drivers show up at well sites with hand-held wireless devices instead of paper run tickets. Supervisors have tactical visibility into truck location, loads hauled and arrival times – and strategic visibility into sourcing choices or the merits of shipping bulk materials opposed to storing them in warehouses. - The buck stops where? Why it pays to find a better way to pay carriers.
Most oil and gas companies rely on networks of small, independent carriers to transport bulk materials – mom and pop companies that subsist paycheck to paycheck. However, when they work with large energy companies, they may have to wait weeks or months to get paid. This is a huge pain point for carriers – one that makes it even harder for oil and gas companies to secure freight.By outsourcing transportation management to a 3PL provider – one with strong relationships with carriers – oil and gas companies side-step issues securing freight and paying carriers, bills are paid on time, costs are allocated to the right cost centers and expenses are tracked to the penny, giving CFOs access to actionable information to improve decision-making. - Fleet not working to potential? Optimize everything.
Savvy fleet managers know the benefits of optimizing loads and routes. But those benefits have been largely overlooked when it comes to moving bulk materials. Given the current capacity crunch, optimization is the key to driving efficiency. By replacing paper-based ticket systems with digital ones that offer route scheduling and optimization tools, companies can run more loads per day, consolidate loads and set up backhauls to minimize empty miles. Fleets use fewer trucks, travel fewer miles, incur less risk, emit fewer pollutants, reduce detention time and make better use of resources. In other words, it’s a win-win.
Will Taylor is Director of Supply Chain Engineering for the Oil & Gas Industry for Ryder System, Inc. Will has worked in the oil and gas transportation business for 5 years. Over the years, he’s helped create logistics solutions for large, complex companies by leveraging data, process, and optimization and now heads the company’s Oil and Gas Supply Chain Engineering efforts.
