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Outsourcing
fuel logistics to capable local logistics managers is reducing risk and
increasing returns for oil companies, says logistics company Cargo
Carriers.
Oil companies need to sustain flexible and cost-effective transport operations in order to compete in a highly competitive market. As logistics is not part of such companies’ core focus, it is easier to partner with logistics managers who can handle the burden and positively impact on the bottom line. “When outsourcing fuel distribution, it is essential that oil companies partner with transporters who are attuned to the demands and high standards of the fuel industry.”
The fuel supply chain follows a process of exploration, discovery, drilling, harvesting, crude oil retail, refinement and distribution, the company reports. Historically, fuel companies were in complete control of the entire process from exploration to retail. These days, oil giants are rethinking where they want to be in the supply chain. By specialising in segments in which they have a competitive advantage, they can considerably improve their position if they form strategic partnerships in distribution segments where others may be able to make the entire package more appealing, the logistics company states.
Local distribution is one of these areas, with fuel companies able to offload the rigid capital burden of owning distribution assets to logistics experts with strong local networks. Fewer assets mean higher returns. Local logistics expertise and networks also mitigate risks.
In 2009, international oil company BP reviewed its logistics operations and invited third-party logistics providers to tender for the delivery of fuel from terminals to the fuel service station network, commercial and wholesale customers.
Caltex moved to employ local distributors in the Eastern Cape with the establishment of Caltex Eastern Cape Marketers (CECM), in 2010. Based on its successful record, CECM has now been appointed to a wider franchise that extends to the inner city of East London. This company intensified its focus on higher safety, health, environment and quality (SHEQ) standards, and has optimised distribution through its partnership with JSE-listed Cargo Carriers in a new joint venture called Uzuko Carriers.
Cargo Carriers has established a specialist division to service the fuel distribution sector.“We have a solid track record of distributing fuel and hazardous materials,” says Cargo Carriers joint CEO Murray Bolton. “We are ready to take on the rigours of fuel distribution in South Africa. Our high levels of SHEQ, 50 years of logistics experience, and the formation of Uzuko Carriers are all a testament to our ability and willingness to set the standard in local fuel distribution.
PetrolWorld 120811 Source:Creamer
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