Executive Briefings

Project Logistics Company Provides a Bridge, and a Road to Success

Cutting down and then replacing trees, building temporary bridges over rail lines and aluminum roads through farmland-these are just some of the logistics challenges that Quinn Chemical faced when it built a new plant in Germany.

For most manufacturing and retail supply chains, the greatest challenges center on managing suppliers, vendors, inbound logistics and other front-end processes. The final delivery link is often the easy part that can be handled by any reliable transportation provider. With large project supply chains, however, the order of difficulty is often just the opposite. The final logistics leg can make or break the success of huge industrial construction projects.

Consider the case of Quinn Chemicals, an Irish company that is now just completing a large plant in Germany for the production of MMA, which is a base for acrylic glass, such as Plexiglas.

The chemical plant is being built in Leuna, near the Czech border in what was East Germany.  Old, abandoned factories have been taken down in the area after years of neglect to make room for new industrial projects. While this brownfield area is still designated as a place for heavy industry, it also has gained much more transportation infrastructure, including a state-of-the-art, high-speed inter-city express rail line and a new major highway.

"There has been a push for industrial investment in the area, but actually building there is now very difficult," says Emanuel Scerra, project director for BDP Project Logistics in Germany, which handled the final delivery of the inbound components for Quinn Chemical. "The new infrastructure projects have limited the ability to move anything into the area larger than standard containers or trucks."

According to Dermot Carey, senior plant manager for Quinn Chemicals, the main challenge was the safe, on-time delivery of key components to maintain the construction schedule.

"Much of this material is large and very difficult to transport," he says. "Just about every leg requires special permits from various different authorities. The logistics involved detailed advance planning down to the exact weight and dimension of each piece and determination of the center of gravity for each component."

The most important components of Quinn's chemical plant were custom-made by contractors all over the world. A 270-ton reactor was made in Deggendorf, in Bavaria, and two 100-ton reactors were made in Kobe, Japan. Eight towers from 30 to 48 meters long, four to six meters in diameter, and weighing up to 155 tons were built in Shanghai, China. All of the multimillion-dollar pieces took many months to design and fabricate, and each piece was unique and critical to the final project.

"Redundancy or replacement of any piece for any reason was clearly not an option," says Carey.

With the exception of one scheduling delay, the fabrication process for the 11 giant components went off without a hitch. Even the long water journey required for most of the pieces was not a significant challenge.

"While these moves were very long, commercially available self-geared, heavy-lift vessels made these shipments fairly routine," says Scerra. "The pieces were easily reloaded from ship to barge at the port of Hamburg. There were no physical obstructions that we had to deal with."

The Last Miles

The logistics challenges really started when the pieces arrived on German soil. There was no way to move pieces weighing up to 270 tons several hundred kilometers by rail or over conventional highways to Leuna.  In fact, the logistics planning for the final delivery of the components to the site took an entire year.

When the plant project was in its earliest stages, the major risk factor that Carey and his team at Quinn considered was the feasibility of getting the components to the site on time and intact.

"We knew there would be obstacles to the transport such as seasonal water levels for barge transports, route difficulties for road hauls, and so on," says Carey. "Some of these issues were easy, such as static calculations of bridge capacities. Other issues, such as crossing railway lines and closing roads would require a great deal of hands-on coordination with many agencies, public and private.  We even looked at the possibility of on-site re-assembly of some components and the impact of potential delays in deliveries. All of this detailed planning and the large amount of coordination with different parties had to happen as early as possible in the project phase."

BDP Project Logistics was one of several firms considered for the transportation work. BDP Project Logistics Germany was formed in 2006 as a division of BDP Project Logistics Philadelphia, in existence in the U.S. since 1991 as part of  Pa.-based BDP International. The German division had no track record for such a large project, so it started its detailed planning in February 2007 before the contract was to be awarded. The leading competitor had already started its preliminary planning months before and nearly landed the contract before BDP even had a chance to bid.

"We got the job in April 2007 even though we were an unknown in the German market," says Scerra. "I think we were awarded the logistics work because of detailed planning that we were able to present to Quinn and our ability to deal with their concerns."

For example, BDP's plan called for delivery of every component intact, regardless of its size or weight. The solution proposed by a competitor was to cut the very long towers in two to make it easier to transport and lift them across the rail lines with a crane. This approach would have required re-welding of the severed pieces on the site, then testing them. Since the towers are intended to hold gases under high pressure, Quinn did not like the idea of potentially compromising the towers' integrity. This approach would also have adversely impacted an already tight schedule. BDP's plan was to bring the tower in as one piece using a unique, temporary bridge.

And while the actual cost of the project logistics pales in comparison to the importance of getting the new plant completed on time, Carey insists that transportation and logistics costs were very much a part of the vendor selection process.

Hüseyin Kizilagac, director of sales for BDP Project Logistics, agrees that his company would not have been awarded the contract if it had not come in with a competitive cost.

"Quinn looked at more than a straight comparison of transportation quotes," he says. "They considered total logistics cost. Even though our temporary bridge was expensive, it assured on-time delivery and it avoided other costs such as cutting, rewelding, retesting and other time delays."

Cost also played a role in selection of modes, according to Carey, but so did practical concerns.  For example, water transport was used where possible, not just because it is less expensive, but because the size of the pieces simply eliminated the possibility of road transport for many of the moves within Germany.

River Moves

Thus, the next step for moving the components, either from the Port of Hamburg or from the contractors in Bavaria, was by river barge. The pieces that came through Hamburg would come down the Elbe and Saale rivers to the closest port to Leuna. The pieces from Bavaria would take a circuitous river route from the south.  The first move in June 2007 was the 270-ton reactors. BDP Project Logistics loaded them on a barge on the Danube River, moved them on the Rhine-Main-Danube Canal via Nuremberg and then east and southeast to the small river port of Aken about 80 kilometers from the Leuna plant site.  The journey that would have taken about three hours by car took 14 days along the circuitous river route.

In November 2007, BDP picked up the two Japanese reactors in Hamburg and moved them by barge, which also picked up the Bavarian reactor which had been transported in June and was now in storage at the river port of Aken. All three were then moved closer to Leuna up the Saale River to avoid the need to cross one of two rail lines.

"The Saale is very small and shallow, but it was at the right level to allow us to navigate all the way to a small jetty called Pfuetzhal for temporary storage," says Scerra.

The longest land leg for all major pieces was from the Pfuetzhal river jetty to the plant site. The pieces moved on special lowboy trailers with many axles to spread the load. The trailer for the 270-ton reactor had 21 axles. One truck pulled and another one pushed. For the "smaller" 100-ton pieces, BDP used low-boy trailers with 10 axles. The narrow roads, power and telephone lines, small bridges, abundant trees and many small towns along the way, however, presented problems at every step.

"We went through a dozen towns in the middle of the night to avoid disruption and damage claims," says Scerra. "Our route added at least 50 kilometers to the trip, but it saved time, bureaucracy and money. We had to cut down quite a few trees, which in Germany is a big deal. You don't want to know what they cost us to replace."

The huge chemical plant pieces had to pass under some of Germany's most powerful high-voltage lines (380 KV) where the minimum security distance is five meters.

"A little too much humidity, and we would have run the risk of an explosive electrical arc that would have been a major problem," says Scerra. To avoid areas with the most obstacles, BDP simply built temporary bypass roads out of aluminum panels across farmers' fields.

"We had to deal with scores of public and private parties along the route to coordinate the moves, get permits and permissions and satisfy all the parties that felt they were impacted by the passage of the trailers," says Scerra. "Collaboration has to be face to face, not via telephone or email. You are dealing with government agencies and local authorities who have to be motivated to help you get the job done."

Quinn's Carey agrees. "We found out very quickly that there is no substitute for sitting down with the people who have to give you permission," he says. "There is no technology or short-cut that is better than face-to-face collaboration."

Manufacturing Delays

The eight towers being built in China were to be delivered in two lots: four in November 2007 and four in January 2008. The towers had been routed to come through the Aken port where the river was always deep, but this route would require crossing two rail lines for which the Deutsche Bahn would only grant a two-hour window over a weekend to shut down the rail traffic. The application had to be made 28 weeks in advance and BDP obtained the railroad windows based on this schedule, along with a few backup windows just in case.

Unfortunately, the fabrication of the towers was delayed in China well past the November and January arrival dates, so BDP kept on applying for additional crossing windows in hopes that the towers would soon arrive. After the 13th extension, the Deutsche Bahn would grant no more windows because of its own construction and increased traffic needs. When the towers finally arrived in March-two months late-BDP had two choices. It could wait 28 weeks for more railroad windows to open up, or BDP could ship the towers down river to the jetty of Pfuetzhal where two of the three rail lines could be bypassed.

"The water level was high enough to navigate because of winter rain," says Scerra. "The water was almost too high. We under-passed a bridge by two centimeters of clearance by adding 300 tons of ballast to lower the level of the barge."

The final, and most challenging obstacle for all 11 pieces was the inter-city, high-speed train line that bordered the industrial site. There was no rail crossing or anyway to bypass this line. BDP would again have to apply to the Deutsche Bahn for a special permit to perform any lifting or any work over the lines. And again, the Deutsche Bahn would only grant a few two-hour windows over a weekend to shut down the rail traffic, and the application had to be made 28 weeks in advance. Backup times had to be separated by at least one week. With such a small window to lift 11 huge pieces over the lines, the final obstacle seemed insurmountable.

Rather than deal with these high-risk windows, BDP's Kizilagac came up with the idea of building a temporary bridge across the rail line, so the pieces could be driven over the line when they were ready to move. Two crossing windows would still be needed from the railroad when the bridge's main section was placed over the line and when it was removed, but these could be done at any time. Weather was not a big factor, and there was no need for a heavy lift crane.

"We were able to deliver the pieces exactly when the customer needed them on site," says Scerra, who adds that this concept had never been tried before in Germany. It is a good thing that BDP did not attempt to lift the pieces across the express train line. A major storm hit the area just at the time the lift would have taken place. With the bridge in place, the storm did not impede trucking the pieces over the tracks.

"The wind was at our backs, so it actually helped push the trailers up the bridge ramp," says Scerra.

Project Success

The main reactors could be delivered in March, a full month ahead of schedule, much to the delight of Carey and his team at Quinn, and much to the credit of the newly formed logistics company. The final pieces of the project, the eight towers from Shanghai, were delivered to the Leuna site in May 2008.

Not only was part of the project finished ahead of schedule, but it also came in on budget, says Kizilagac. "I was home only five nights over the length of the entire project," says BDP's Kizilagac, who says that project logistics is unlike more conventional transportation work in one major respect: there is much more risk.

"While our customer approved the temporary bridge concept, it was up to us to have it approved by all of the parties to include the railroads and local government agencies," says Kizilagac. "The risk was entirely on us to get the bridge approved and built."

As the project logistics leader, BDP also took the risk of not exceeding a maximum cost that was agreed to in the proposal to Quinn.

"We optimized every part of the plan, including transportation, routing, engineering, permits, and so on," says Scerra, "but we knew quite a few things could and would go wrong. We figured on the worst-case scenario to meet deadlines and avoid penalties. If the costs were higher, we would assume the risk of any cost overrun.

"Luck can play an important part in project logistics, and in our case, there was more good luck than misfortune," says Scerra. "I think it is also true that the better you plan and execute, the more luck you have."

RESOURCE LINK:

BDP International, www.bdpinternational.com

 

For most manufacturing and retail supply chains, the greatest challenges center on managing suppliers, vendors, inbound logistics and other front-end processes. The final delivery link is often the easy part that can be handled by any reliable transportation provider. With large project supply chains, however, the order of difficulty is often just the opposite. The final logistics leg can make or break the success of huge industrial construction projects.

Consider the case of Quinn Chemicals, an Irish company that is now just completing a large plant in Germany for the production of MMA, which is a base for acrylic glass, such as Plexiglas.

The chemical plant is being built in Leuna, near the Czech border in what was East Germany.  Old, abandoned factories have been taken down in the area after years of neglect to make room for new industrial projects. While this brownfield area is still designated as a place for heavy industry, it also has gained much more transportation infrastructure, including a state-of-the-art, high-speed inter-city express rail line and a new major highway.

"There has been a push for industrial investment in the area, but actually building there is now very difficult," says Emanuel Scerra, project director for BDP Project Logistics in Germany, which handled the final delivery of the inbound components for Quinn Chemical. "The new infrastructure projects have limited the ability to move anything into the area larger than standard containers or trucks."

According to Dermot Carey, senior plant manager for Quinn Chemicals, the main challenge was the safe, on-time delivery of key components to maintain the construction schedule.

"Much of this material is large and very difficult to transport," he says. "Just about every leg requires special permits from various different authorities. The logistics involved detailed advance planning down to the exact weight and dimension of each piece and determination of the center of gravity for each component."

The most important components of Quinn's chemical plant were custom-made by contractors all over the world. A 270-ton reactor was made in Deggendorf, in Bavaria, and two 100-ton reactors were made in Kobe, Japan. Eight towers from 30 to 48 meters long, four to six meters in diameter, and weighing up to 155 tons were built in Shanghai, China. All of the multimillion-dollar pieces took many months to design and fabricate, and each piece was unique and critical to the final project.

"Redundancy or replacement of any piece for any reason was clearly not an option," says Carey.

With the exception of one scheduling delay, the fabrication process for the 11 giant components went off without a hitch. Even the long water journey required for most of the pieces was not a significant challenge.

"While these moves were very long, commercially available self-geared, heavy-lift vessels made these shipments fairly routine," says Scerra. "The pieces were easily reloaded from ship to barge at the port of Hamburg. There were no physical obstructions that we had to deal with."

The Last Miles

The logistics challenges really started when the pieces arrived on German soil. There was no way to move pieces weighing up to 270 tons several hundred kilometers by rail or over conventional highways to Leuna.  In fact, the logistics planning for the final delivery of the components to the site took an entire year.

When the plant project was in its earliest stages, the major risk factor that Carey and his team at Quinn considered was the feasibility of getting the components to the site on time and intact.

"We knew there would be obstacles to the transport such as seasonal water levels for barge transports, route difficulties for road hauls, and so on," says Carey. "Some of these issues were easy, such as static calculations of bridge capacities. Other issues, such as crossing railway lines and closing roads would require a great deal of hands-on coordination with many agencies, public and private.  We even looked at the possibility of on-site re-assembly of some components and the impact of potential delays in deliveries. All of this detailed planning and the large amount of coordination with different parties had to happen as early as possible in the project phase."

BDP Project Logistics was one of several firms considered for the transportation work. BDP Project Logistics Germany was formed in 2006 as a division of BDP Project Logistics Philadelphia, in existence in the U.S. since 1991 as part of  Pa.-based BDP International. The German division had no track record for such a large project, so it started its detailed planning in February 2007 before the contract was to be awarded. The leading competitor had already started its preliminary planning months before and nearly landed the contract before BDP even had a chance to bid.

"We got the job in April 2007 even though we were an unknown in the German market," says Scerra. "I think we were awarded the logistics work because of detailed planning that we were able to present to Quinn and our ability to deal with their concerns."

For example, BDP's plan called for delivery of every component intact, regardless of its size or weight. The solution proposed by a competitor was to cut the very long towers in two to make it easier to transport and lift them across the rail lines with a crane. This approach would have required re-welding of the severed pieces on the site, then testing them. Since the towers are intended to hold gases under high pressure, Quinn did not like the idea of potentially compromising the towers' integrity. This approach would also have adversely impacted an already tight schedule. BDP's plan was to bring the tower in as one piece using a unique, temporary bridge.

And while the actual cost of the project logistics pales in comparison to the importance of getting the new plant completed on time, Carey insists that transportation and logistics costs were very much a part of the vendor selection process.

Hüseyin Kizilagac, director of sales for BDP Project Logistics, agrees that his company would not have been awarded the contract if it had not come in with a competitive cost.

"Quinn looked at more than a straight comparison of transportation quotes," he says. "They considered total logistics cost. Even though our temporary bridge was expensive, it assured on-time delivery and it avoided other costs such as cutting, rewelding, retesting and other time delays."

Cost also played a role in selection of modes, according to Carey, but so did practical concerns.  For example, water transport was used where possible, not just because it is less expensive, but because the size of the pieces simply eliminated the possibility of road transport for many of the moves within Germany.

River Moves

Thus, the next step for moving the components, either from the Port of Hamburg or from the contractors in Bavaria, was by river barge. The pieces that came through Hamburg would come down the Elbe and Saale rivers to the closest port to Leuna. The pieces from Bavaria would take a circuitous river route from the south.  The first move in June 2007 was the 270-ton reactors. BDP Project Logistics loaded them on a barge on the Danube River, moved them on the Rhine-Main-Danube Canal via Nuremberg and then east and southeast to the small river port of Aken about 80 kilometers from the Leuna plant site.  The journey that would have taken about three hours by car took 14 days along the circuitous river route.

In November 2007, BDP picked up the two Japanese reactors in Hamburg and moved them by barge, which also picked up the Bavarian reactor which had been transported in June and was now in storage at the river port of Aken. All three were then moved closer to Leuna up the Saale River to avoid the need to cross one of two rail lines.

"The Saale is very small and shallow, but it was at the right level to allow us to navigate all the way to a small jetty called Pfuetzhal for temporary storage," says Scerra.

The longest land leg for all major pieces was from the Pfuetzhal river jetty to the plant site. The pieces moved on special lowboy trailers with many axles to spread the load. The trailer for the 270-ton reactor had 21 axles. One truck pulled and another one pushed. For the "smaller" 100-ton pieces, BDP used low-boy trailers with 10 axles. The narrow roads, power and telephone lines, small bridges, abundant trees and many small towns along the way, however, presented problems at every step.

"We went through a dozen towns in the middle of the night to avoid disruption and damage claims," says Scerra. "Our route added at least 50 kilometers to the trip, but it saved time, bureaucracy and money. We had to cut down quite a few trees, which in Germany is a big deal. You don't want to know what they cost us to replace."

The huge chemical plant pieces had to pass under some of Germany's most powerful high-voltage lines (380 KV) where the minimum security distance is five meters.

"A little too much humidity, and we would have run the risk of an explosive electrical arc that would have been a major problem," says Scerra. To avoid areas with the most obstacles, BDP simply built temporary bypass roads out of aluminum panels across farmers' fields.

"We had to deal with scores of public and private parties along the route to coordinate the moves, get permits and permissions and satisfy all the parties that felt they were impacted by the passage of the trailers," says Scerra. "Collaboration has to be face to face, not via telephone or email. You are dealing with government agencies and local authorities who have to be motivated to help you get the job done."

Quinn's Carey agrees. "We found out very quickly that there is no substitute for sitting down with the people who have to give you permission," he says. "There is no technology or short-cut that is better than face-to-face collaboration."

Manufacturing Delays

The eight towers being built in China were to be delivered in two lots: four in November 2007 and four in January 2008. The towers had been routed to come through the Aken port where the river was always deep, but this route would require crossing two rail lines for which the Deutsche Bahn would only grant a two-hour window over a weekend to shut down the rail traffic. The application had to be made 28 weeks in advance and BDP obtained the railroad windows based on this schedule, along with a few backup windows just in case.

Unfortunately, the fabrication of the towers was delayed in China well past the November and January arrival dates, so BDP kept on applying for additional crossing windows in hopes that the towers would soon arrive. After the 13th extension, the Deutsche Bahn would grant no more windows because of its own construction and increased traffic needs. When the towers finally arrived in March-two months late-BDP had two choices. It could wait 28 weeks for more railroad windows to open up, or BDP could ship the towers down river to the jetty of Pfuetzhal where two of the three rail lines could be bypassed.

"The water level was high enough to navigate because of winter rain," says Scerra. "The water was almost too high. We under-passed a bridge by two centimeters of clearance by adding 300 tons of ballast to lower the level of the barge."

The final, and most challenging obstacle for all 11 pieces was the inter-city, high-speed train line that bordered the industrial site. There was no rail crossing or anyway to bypass this line. BDP would again have to apply to the Deutsche Bahn for a special permit to perform any lifting or any work over the lines. And again, the Deutsche Bahn would only grant a few two-hour windows over a weekend to shut down the rail traffic, and the application had to be made 28 weeks in advance. Backup times had to be separated by at least one week. With such a small window to lift 11 huge pieces over the lines, the final obstacle seemed insurmountable.

Rather than deal with these high-risk windows, BDP's Kizilagac came up with the idea of building a temporary bridge across the rail line, so the pieces could be driven over the line when they were ready to move. Two crossing windows would still be needed from the railroad when the bridge's main section was placed over the line and when it was removed, but these could be done at any time. Weather was not a big factor, and there was no need for a heavy lift crane.

"We were able to deliver the pieces exactly when the customer needed them on site," says Scerra, who adds that this concept had never been tried before in Germany. It is a good thing that BDP did not attempt to lift the pieces across the express train line. A major storm hit the area just at the time the lift would have taken place. With the bridge in place, the storm did not impede trucking the pieces over the tracks.

"The wind was at our backs, so it actually helped push the trailers up the bridge ramp," says Scerra.

Project Success

The main reactors could be delivered in March, a full month ahead of schedule, much to the delight of Carey and his team at Quinn, and much to the credit of the newly formed logistics company. The final pieces of the project, the eight towers from Shanghai, were delivered to the Leuna site in May 2008.

Not only was part of the project finished ahead of schedule, but it also came in on budget, says Kizilagac. "I was home only five nights over the length of the entire project," says BDP's Kizilagac, who says that project logistics is unlike more conventional transportation work in one major respect: there is much more risk.

"While our customer approved the temporary bridge concept, it was up to us to have it approved by all of the parties to include the railroads and local government agencies," says Kizilagac. "The risk was entirely on us to get the bridge approved and built."

As the project logistics leader, BDP also took the risk of not exceeding a maximum cost that was agreed to in the proposal to Quinn.

"We optimized every part of the plan, including transportation, routing, engineering, permits, and so on," says Scerra, "but we knew quite a few things could and would go wrong. We figured on the worst-case scenario to meet deadlines and avoid penalties. If the costs were higher, we would assume the risk of any cost overrun.

"Luck can play an important part in project logistics, and in our case, there was more good luck than misfortune," says Scerra. "I think it is also true that the better you plan and execute, the more luck you have."

RESOURCE LINK:

BDP International, www.bdpinternational.com