A Study in Terra
Four questions for Joe Giesler, senior v.p. of commercial operations for chemical company Terra Industries, Iowa.
A: To deliver finished products to customers, 29 percent of shipments move by truck, 50 percent by rail, 13 percent by barge, and eight percent by pipeline from six originating points in North America. One major difference to our transportation operations is that we diversify equipment as customers and products change.
For instance, we needed to add specialized tankers to our rail and truck fleets. Terra uses third-party logistics services to automate freight rating, and implemented tracing software to keep up with railcar movements.
Q:How important is it to you that a service provider be a Responsible Care partner? Can you compare the safety auditing process for carriers that are and are not partners?
A: It is difficult to say how many of our carriers are Responsible Care partners. Before entering into a contract with a truck or barge carrier, however, we thoroughly investigate the carrier's safety, maintenance, and compliance records.
We also inspect each truck, railcar, or barge before and after loading. We conduct an annual review of our inspection practice with our carriers and the Department of Transportation to be sure we meet best practice standards. Safety and inspection practices over the last several years, specifically for hazardous materials, have become standard—any risk of a carrier having its operating license revoked is too high for Terra to contract with that carrier.
Q: Have any of your carriers or customers recently implemented any methods that you would consider a new standard for chemical logistics best practices?
A: Terra and its main carriers work diligently with The Fertilizer Institute, along with the rest of our industry. It is not appropriate to say that Terra specifically has designed new best practices; however, we and our truck, rail, and barge carriers are continually involved in updating industry best practices for loading, unloading, safety, environmental, and training procedures.
Q:How has technology helped Terra improve safety and efficiency or reduce costs?
A:Terra has partnered with technology provider Supply Chain Consultants. Its software package, Zemeter, integrates our internal supply planning and record-keeping with logistics tracing and freight rating, providing an efficient tool for pulling information from our third-party logistics packages and operating system.
The ability to view and analyze forecasting, supply, and production planning against actual demand and replenishing needs is a must for Terra as we diversify our product mix and customer base.
As our supply chain and customer demand model has become more intense, a software package that provides the flexibility to integrate with other solutions is necessary. After reviewing several alternatives, we chose the Zemeter demand planning and supply chain package because it provides this capability efficiently, and is less costly than going through a single system upgrade.