As terminal operators and providers of maritime supply chain solutions to the bulk industry, Euroports is not only uniquely positioned to evaluate market and trade tendencies in the fertilisers and minerals bulk market but also perfectly organised to offer answers to the industries’ ever-changing supply chain requirements.
Shifting from traders to producers
In today’s bulk supply chain, we can observe four major trends. The first is a shift in who defines the supply chain requirements, from traders to producers. A key example of this tendency is shown in the fertiliser industry. Around 2009, commodities became speculative and a considerable number of companies had to write off lost stock values. This meant that there was limited access to capital, resulting in reduced cargo and lot sizes. As a consequence, shipment and vessel sizes were preferred to be as small as possible. On top of that, fertilisers are a seasonal commodity, peaking more due to changing weather conditions. Changes to vessel size and this seasonality required increased flexibility and a reaction from the logistics service provider in speed to market and flexible transport solutions. Intermediary players did not have the financial means to support these changes.
On the other hand, the producers have the financial power to absorb the speculation on the product, and were therefore forced to take on part of the intermediary role. In the period that followed between 2009 and 2013, we saw an ongoing wave of acquisitions in the industry and producers started to play a more active role in trading activities. Producers felt the need to show their brand to the end user in spite of intermediary involvement (distributors, wholesale, and traders). These reasons made the producer the definer of the supply chain requirement rather than the traders. The producers in-sourced a part of the commercial supply chain.
Changing roles of logistics partners
The second trend is directly related to logistics service providers like Euroports. They can create a win-win situation by servicing customers’ full transportation needs on a European scale. Looking at the case of Euroports, the first development and consolidation in the fertiliser and mineral market changed our reality, meaning dealing with bigger groups (producers) and more complex logistics flows. As this increase in complexity in the physical supply chain is not part of the industrial clients’ core business, the supply chain is not part of their traditional comfort zone. This, combined with the further push towards globalisation in the markets has led to logistical partners such as Euroports changing their roles in the customers’ supply chains. They are now adding a consulting role, meaning advising on the best means of transport for each lot (eg. container or bulk vessel). Additionally, the bulk producers are looking for
logistical partners that have the ability and competences to grow with them. They need to be able to think locally and act globally.