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A&R’s Transport division
is a major logistics services provider in the plastic resin industry. It
manages a fleet of 810 tractors and dispatches loads to 660 company drivers and
150 owner-operators using TMW Systems suite. Major customers are premier
chemicals producers including: DOW, Chevron Phillips, Exxon Mobil, Total and
PolyOne. Plastic resin producers generally ship full rail cars from plants, but
many times customers can't take rail cars or rail car quantities, which creates
the need for rail-direct logistics. For example, A&R manages approximately 75%
of the Houston-based petrochemical manufacturer LyondellBasell’s shipments in
North America. This incorporates packaging and warehousing services in addition
to transportation management. In addition, A&R handles a broader range of dry
bulk commodities for other customers including grain, soybeans, corn, sugar,
olive oil, and slag.
Transport maintains significant capacity with 1,070 dry bulk trailers, 1,000
non-pressurized intermodal containers and 150 pressurized vessels. The
"Eliminator" invented by A&R, is a 1,500 cubic feet of aluminum vessel that fits
within a 40-foot ocean container. It eliminates the need for disposable liners
and reduces the dwell time of rail cars on track by speeding the
loading/unloading process. One hopper car feeds about four bulk truckloads. So
instead of waiting for a corollary number of trucks to come in and unload a
train unit, the Eliminator allows shippers to re-task assets without lengthy
dwell periods. Thus, rail cars can be turned in three or four days versus
sometimes as many as 30 days under previous methods.
  
The system also allows A&R and its customers to blend materials for the end user
and fully utilize inventory. For example, after unloading a rail car into bulk
trucks, there might still be 1,000 or 2,000 pounds of product left over,
referred to as the “heel.” How do you manage that heel? Do you send it back to
the manufacturer? This can create problems. With the Eliminator, excess
inventory is removed and stored, then used to top off other trucks as they come
in. The Eliminator represents the type of innovation and investment that
exemplifies A&R Logistics’ reputation in the market.
A&R Packaging and Distribution:
Bulk material handling is
an asset-intensive business requiring a significant national network of truck
terminals and warehouses with direct rail access, trans-loading and packaging
equipment, and bulk storage. The Packaging and Distribution operation plays a
necessary supporting role in bulk commodity logistics, including:
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Trans-loading from rail hopper car to bulk hopper truck or drytainer
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Packaging into gaylords and super sacks
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Storage of raw materials in on-site rail cars, containers and silos, and of
packaged goods in warehouses
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Inventory
management of raw and packaged goods by date and lot number
The Packaging and Distribution division operates a nationwide network of 10
warehouses on a 24/7 basis.
In Morris, IL, paired silos positioned next to a
rail siding are used to store plastic resin pellets from a rail car which are
fed into gaylords and super sacks during the packaging process. These
containers are inventoried and handled using A&R’s TRAMS warehouse management
system, which maintains both date and lot number for each container.
  
For bulk materials, rail access is important.
Rail-direct delivery, taking pellets off line and delivering to customers via
truck, represents about 90% of A&R’s business. On any given day, the 3PL
performs up to 125 rail-to-bulk truck transfers. Using pneumatic suction, A&R
can remove 800 to 1,200 pounds of pellets per minute out of rail cars. This
equates to 2.5 hours of unloading time per unit. Rail cars are essentially
forward storage locations for A&R’s customers. All but three warehouses have
direct rail access with total rail car spots for customers’ in-transit inventory
exceeding 1,500. With the importance of environmental safety, all of A&R’s
warehouses are ISO9001 certified and it trains employees on detailed procedures
for trans-loading. The focus is to minimize and prevent spills, and A&R follows
guidelines established by leading industry associations, namely Operation
Clean Sweep (a joint program of the American Chemistry Council and the
Society of the Plastics Industry) and Responsible Care (International
Council of Chemical Associations).
A&R Global Logistics - Integrated Logistics
Services for Dry Bulk Shippers:
This division was added in 1997 to operate as a non-asset based 3PL for domestic
transportation management (DTM). In 2010, GL grew gross revenue to $53 million
and net revenue to $7.7 million with 25 employees. Leading customer accounts
include: DOW, Stryron, American Styrenics, PolyOne, Mytex Polymers
and Chevron Phillips. By combining capabilities across divisions, A&R
offers an integrated 3PL services portfolio detailed in the figure below.
Core services include transportation management,
exception management, track and trace, general commodity freight brokerage,
trans-loading, silo evacuations, and terminal management services. A&R’s UTC
Overseas division is an extension of Global Logistics. A&R partners with
international transportation management 3PLs (ITMs), such as Schmidt, to handle
end-to-end transport of global shipments.
Access to Dry Bulk Capacity:
Global Logistics is a complement to the asset
based Transport division. Its significant access to dry bulk transportation
capacity and knowledge of plastic resin handling requirements are
differentiating factors in the market. GL dispatches 700 loads per day for more
than 50 customers. Most of these are regional moves (65% within 250 miles and
35% beyond).
GL’s carrier network encompasses
less-than-truckload (LTL), truckload (TL), reefer and flatbed modes as well. It
has 3,000 carriers in its system. 10% or 300 of them are under contract. 46 of
its contract carriers are dry bulk carriers. GL closely tracks Federal Motor
Carrier Safety Administration (FMCSA) data on core carriers, including out of
service violations, accidents and BASIC scores. Carriers with individual
category ratings above FMCSA thresholds are flagged as a warning sign. GL also
sets a secondary threshold. Once exceeded, the carrier is red-flagged and
discontinued.
Full-Service Transportation Management:
Most of GL’s transportation management resources are housed in its Midland, MI
office. It performs carrier procurement and management, shipment planning for
all modes, dispatch, track and trace, claims processing, freight bill audit and
payment, and specialized services, such as silo evacuation. Many accounts, such
as Mytex Polymers, take advantage of the full range of Global Logistics’
services for dry bulk, TL and LTL shipments, which are performed using
MercuryGate’s TMS.
DOW has been an A&R Logistics customer for 29
years; Global Logistics has been managing transportation for DOW for 14 years
and has developed a deep understanding of DOW’s business. GL manages all of
DOW’s dry bulk shipments, using A&R’s DataCorp transportation planning system.
In 2010, GL managed 30,600 shipments with 98.93% On-Time Delivery. GL’s
proactive approach to exception management has resulted in high marks in
Customer Complaint Error Free shipments of 99.62% and Non-Conforming Reports for
2.8% of shipments.
Over the years, Global Logistics has designed a
number of enhancements to the DataCorp system and developed in-house expertise
in report writing. While 40% of DOW’s dry bulk volume goes to A&R Transport,
the remaining volume is brokered to 46 core bulk contract carriers. GL has been
able to deliver 3% to 5% annual savings gains to DOW by increasing backhaul
volume, leveraging shipment volume to gain favorable rates from dry bulk
carriers, and reducing empty miles through better shipment planning.
Ramping up General Commodity Freight Brokerage:
GL’s core customers are plastic resin producers. However, GL’s Elgin, IL
operation is growing its freight brokerage business beyond dry bulk and into
general commodities. Major customers include: Berry Plastics, Chemical
Resources, Oce, Wisdom Adhesives and Wham-O. In 2010, A&R hired Mike Hogan as
vice president of sales and marketing. Mike is expanding business by offering
more logistics services to existing A&R Logistics customers, as well as actively
developing new business across commodity groups and industries. GL is
positioned for growth, especially with regard to its IT. GL currently brokers
25 to 30 loads per day using MercuryGate’s TMS on a full range of modes,
including TL, LTL, reefer, flatbed and, of course, dry bulk hopper trucks.
Monitoring Rail Car Movement for On-Time
Delivery: Coinciding with A&R
Distribution and Packaging’s rail car trans-loading services, Global Logistics
developed a service and reporting tool to support rail car management for key
customers, such as PolyOne. Customer rail car orders are sent via FTP (file
transfer protocol) to Global Logistics. Rail car movement status is likewise
received from Kleinschmidt’s CLM (car location messaging) service. GL loads
order and movement data into a proprietary database that generates status
reports and alerts for potentially late rail cars. The critical needs for
just-in-time delivery and inventory reduction have made GL’s rail car management
program an obvious value-add to bulk shippers.
Positioned for Growth:
With a strong foundation built upon asset based
logistics services and an extensive customer base within the plastic resin
industry, A&R Logistics is modifying its business model to grow its non-asset
based transportation management business and use it to serve a broader range of
customer commodities and industries. A&R’s range of integrated 3PL services and
access to transportation capacity has improved its value-proposition to
shippers, which is becoming evident in A&R’s sales growth. Its investments in
systems and sales promotion should produce positive returns, especially if the
broader economy continues to recover.
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Systems, Dow, Chevron Phillips, Exxon Mobil, Total, PolyOne, rail logistics,
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gaylord, super sack, bulk hopper truck, 3PL, logistics providers, A&R, A&R
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Phillips, Exxon Mobil, Total, PolyOne, rail logistics, domestic transportation
managers, plastic resin producers, trans-loading, dry bulk logistics providers,
intermodal, drytainer, gaylord, super sack, bulk hopper truck, 3PL, logistics
providers, A&R, A&R Logistics, A&R Global Logistics, LyondellBasell, TMW, TMW
Systems, Dow, Chevron Phillips, Exxon Mobil, Total, PolyOne, rail logistics,
domestic transportation managers, plastic resin producers, trans-loading, dry
bulk logistics providers, intermodal, drytainer, gaylord, super sack, bulk
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Total, PolyOne, rail logistics, domestic transportation managers, plastic resin
producers, trans-loading, dry bulk logistics providers, intermodal, drytainer,
gaylord, super sack, bulk hopper truck... |
