All stake­hold­ers should in­volve in safety of chem­i­cal sup­ply chain lo­gis­tics –

Ra­jki­ran Kana­gala, Sr Vice Pres and Group Head, Busi­ness De­vel­op­ment, TCI

Chemical Industry Digest - - What’s In? - – Ra­jki­ran Kana­gala

The in­ter­view high­lights, how the global spot­light on en­vi­ron­ment, safety and sus­tain­abil­ity, safety of chem­i­cal sup­ply chain lo­gis­tics has be­come cru­cial for chem­i­cals trans­porta­tion.

Ques­tion: How are the en­vi­ron­men­tal risks man­aged dur­ing the tran­sit of liq­uid prod­ucts like haz­ardous chem­i­cals or petroleum prod­ucts?

Ra­jki­ran Kana­gala (RK): Chem­i­cal in­dus­try is a highly com­plex in­dus­try. Dan­ger­ous goods can be trans­ported only if han­dled prop­erly and with care. All the laws & reg­u­la­tions, stan­dards or guide­lines to pro­tect the en­vi­ron­ment are only limited to plant level and are not preva­lent in end to end sup­ply chain.

The main chal­lenge to main­tain safety stan­dards through­out the value chain is manag­ing the cost. While chem­i­cal in­dus­try is hell bent on lo­gis­tics play­ers to main­tain safety stan­dard, they are not ready to bear the cost of main­tain­ing th­ese stan­dards.

No mat­ter how much we pre­tend to be com­mit­ted to safety, it will not be ef­fec­tive un­less the man­u­fac­turer, trader, worker, trans­porter or in­spect­ing author­ity do not share the fi­nan­cial re­spon­si­bil­ity.

Q: How are lo­gis­tics and sup­ply chain com­plex­i­ties man­aged as there are num­ber of stake­hold­ers in­volved in the trans­porta­tion of chem­i­cal prod­ucts?

RK: Safety is a se­ri­ous busi­ness for the chem­i­cal in­dus­try. Be­cause of the na­ture of its prod­ucts, the in­dus­try needs to be more vig­i­lant to en­sure that goods do not spill or are tam­pered with dur­ing tran­sit. Though ISO Tank­tain­ers are con­sid­ered to be the safest mode of bulk trans­porta­tion of chem­i­cals, yet their avail­abil­ity in the mar­ket is less. The rea­son be­hind lo­gis­tics play­ers’ am­biva­lence to in­vest in this costly as­set is again non-will­ing­ness of chem­i­cal com­pa­nies in shar­ing the cost.

To rec­tify the prob­lems of the chem­i­cal trans­porta­tion in­dus­try, a se­ri­ous re-ap­praisal of the ba­sic guid­ing prin­ci­ples of the in­dus­try is the need of the hour.

Q: Ac­cord­ing to you, what is the im­pact of GST for the chem­i­cal and petro­chem­i­cal in­dus­tries and for their ser­vice providers?

RK: Al­most ev­ery im­pact of GST on the In­dian in­dus­trial sec­tor looks pos­i­tive like in the case of most of the in­dus­tries. The ben­e­fits are same for all, con­sol­i­da­tion lead­ing to re­duc­tion in costs.

The only dif­fer­ence be­ing that in-tran­sit/short term stor­age of chem­i­cals is not as easy as in the case of other con­sumer goods as cor­rect stor­age and han­dling of the prod­uct across the value chain re­mains a chal­lenge. Add to it, ben­e­fits of con­sol­i­da­tion in stor­age/ware­house space is also not so easy for chem­i­cal in­dus­try since com­pli­ances/li­censes do take time and risk mit­i­ga­tion is­sues come in.

Q: En­vi­ron­men­tal and sus­tain­abil­ity con­cerns are push­ing com­pa­nies for adapt­ing greener trans­port modes but this would in­crease the cost. So how can com­pa­nies face this chal­lenge?

RK: The fu­ture be­longs to mul­ti­modal lo­gis­tics by rail and sea. For­warders, par­tic­u­larly in branded com­pa­nies, in­creas­ingly have to deal with cus­tomers who are de­mand­ing sus­tain­abil­ity in lo­gis­tics. There­fore, lo­gis­tics com­pa­nies are re­quired to of­fer suit­able so­lu­tions. If we’re talk­ing about ‘green trans­port’, then in­evitably we are talk­ing about us­ing trains and ships.

Rail trans­porta­tion is any­time much cheaper than road trans­porta­tion in long haul. ISO Tank­tain­ers with higher load­ing ca­pac­ity are able to pass on the cost ben­e­fit to chem­i­cal com­pa­nies. One of our joint ven­ture com­pa­nies, TCI Con­cor is do­ing end to end move­ment of solid and bulk liq­uid chem­i­cals by rail. Up till now we have safely moved around 2mn tons of chem­i­cal by rail and proud to call our­selves as “Lead­ers in ‘Green Lo­gis­tics’”.

We hope in fu­ture, many com­pa­nies will def­i­nitely opt for trans­porta­tion via rail route more than what is cur­rently been seen.

Ra­jki­ran Kana­gala, ( Alumni of Har­vard Busi­ness School), Sr. Vice Pres­i­dent and Group Head, Busi­ness De­vel­op­ment with TCI is also head­ing the Chem­i­cal and SAARC ver­ti­cal. He has worked ex­ten­sively with cus­tomers in both do­mes­tic and in­ter­na­tional mar­kets and has spent nearly 11 years in in­ter­na­tional busi­ness de­vel­op­ment and sourc­ing. Be­fore join­ing TCI in 2006, Ra­jki­ran has held var­i­ous po­si­tions with lead­ing OEM com­pa­nies.TCI Group, with rev­enues of over ` 3600 crore, is In­dia’s lead­ing in­te­grated sup­ply chain and lo­gis­tics so­lu­tions provider.

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