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PETROLEUM DIRECTORY: Moving equipment, supplies and products around the world Panalpina provides a complete door-to-door, international logistics service Alan Bailey & Kay Cashman Petroleum Directory Contributing Writer
Whether you’re operating an oil field, a gold mine or a manufacturing plant, it’s essential to be able to procure or supply equipment and products quickly, reliably and on time. The international nature of modern business has transformed traditional freight forwarding services into global supply chain management requiring specialist expertise and state-of-the-art computer technology.
“That’s really how you would define a freight forwarder in today’s world — a supply chain manager,” John Hodel, Alaska branch manager of Panalpina Inc., told Petroleum News.
Panalpina, an international freight forwarding and logistics company based in Basle, Switzerland, prides itself in offering services for moving freight between all parts of the world. With about 12,000 employees and nearly 480 offices on six continents the company can claim a truly global reach.
The company even operates its own scheduled air cargo service with major hubs that include Huntsville, Ala., and Luxembourg. Anchorage, Alaska, provides a gateway to Asia and the Russian Far East. Door-to-door service “Most customers are interested in what we call a door-to-door service ... what you would call a complete supply chain from raw materials or parts from suppliers to assembly points and then to consumers,” Hodel said.
For example, a major U.S. computer manufacturer uses Panalpina to manage the transportation of computer components to its assembly plants.
“They’re manufacturing components all over the world and engage Panalpina to move them,” Hodel said. “So we’re involved in moving parts and pieces from different manufacturing points into an assembly point, maybe in Mexico or maybe in the United States.”
Panalpina also manages the shipment of equipment and supplies to oil fields and mining operations. For example, the company provides logistical support for the mining and oil industries in the Russian Far East by bringing freight to the Russian operation from many parts of the United States. Alaska business Panalpina’s burgeoning business in the Russian Far East triggered the need for support staff in Alaska and the company opened a branch office in Anchorage, near the Ted Stevens Anchorage International Airport, in April 1998.
“With the proximity of Anchorage into (the Russian Far East) and direct flights from Alaska to there — we’ve located our offices here,” Hodel said.
Hodel and his staff in the Anchorage office now coordinate arrangements for both sea cargo and airfreight between the United States and Asia. For example, the company recently chartered some aircraft to fly a mining base camp, drilling equipment and testing equipment to Siberia.
“Most recently, in March, we chartered six aircraft to fly from Anchorage into Siberia for a gold mining company,” Hodel said.
Panalpina brought the equipment into Anchorage from the Lower 48 and Canada for consolidation into the loads for the chartered aircraft.
With its wealth of experience in the Russian Far East and elsewhere in the world, the company has been successfully expanding into support for the mining and oil industries in Alaska. The company has particularly engaged in re-deploying equipment and materials between Alaska and the rest of the world.
“We bring heavy equipment and materials in from all over the world into Anchorage, order it all and get it out to oil fields and mining sites,” Hodel said.
Looking to the future, Panalpina plans to expand its infrastructure to support the logistics of oil and gas operations west of Prudhoe Bay and new mining projects slated for development. Shipping Alaska seafood Since opening its Anchorage office, Panalpina has established a niche business, shipping Alaska seafood all over the world.
“We’re one of just a couple of companies that really specialize in flying Alaska seafood literally from door to door,” Hodel said. “We’ve shipped live crab to Japan and fresh salmon to Europe.”
A single delivery of poor quality product could give the whole Alaska seafood industry a black eye. So Panalpina staff takes great care to ensure efficient delivery and appropriate freight handling.
“All of our services are geared around ensuring that the product arrives at its destination in prime condition,” Hodel said. “That means selecting carriers that can minimize transit times and ensure adequate refrigeration.”
Hodel also sees a mission in facilitating the sale of Alaska seafood in world markets by providing the means of delivering the product. The importance of information Although delivering freight on time and in good condition forms the core of any freight company’s business, providing information about the status of the freight has become as important as the actual transportation of the goods.
As a result, Panalpina has invested heavily in sophisticated computer systems for keeping track of its customers’ freight. Customers can even use Panalpina’s Web site to obtain information about the status of a consignment.
“So many decisions are made (based) on where the goods are,” Hodel said. “(People) need to make decisions, they need to schedule crew, and it all revolves around when they’re going to have the material.”
Numerous people from an individual customer company may have ordered goods from a wide variety of places. Shipping these goods will often involve several freight carriers.
“It’s all intermodal nowadays,” Hodel said. “One minute it’s on a truck. The next hour it’s on a plane. Ten hours later it’s on a truck. So you have to be connected with all these people with an international force.”
Ultimately, each customer wants to know where its orders are and when they’re expected to arrive. Providing everyone with the information that they need involves a spider’s web of linked data involving customer purchase orders and freight carrier tracking systems. The computer systems hook all this data together.
Panalpina’s computer systems also improve efficiency by enabling the electronic processing of documents such as purchase orders and invoices. For example, Panalpina can receive a customer’s purchase order by computer and then arrange for a carrier to pick up the order from the supplier. A specialist expertise In recent years, the increasing need for efficient freight transportation and freight tracking has created a specialist expertise around logistics and supply chain management. Some universities including the University of Alaska Anchorage now offer logistics programs and it’s no longer rare to find senior managers from a supply chain management background, Hodel said.
The need for this specialist expertise has driven many companies to outsource their supply chain management functions to companies like Panalpina. This outsourcing can save some of the hidden costs of procurement — people can spend a lot of time trying to find out what has happened to their supplies or deliveries, Hodel said.
“If I can eliminate all that work for those people and stay on top of what’s going on, that’s a big value to them,” Hodel said.
And Panalpina’s international reach and breadth of experience can provide vital help. Hodel recalled an occasion when an automotive plant in the Lower 48 nearly ran out of Japanese ball bearings for its assembly line — the company was operating a “just-in-time” parts inventory. Panalpina had to charter an airplane out of Anchorage to ship the parts to the factory.
“This factory was going to shut down at a precise time ... if they didn’t have these things ... and, so, along with another charter company we got the freight moving,” Hodel said.
That’s all part of the challenge of the logistics business in the 21st century.
Editor’s note: Alan Bailey owns Badger Productions in Anchorage, Alaska
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