WCA Dangerous Goods
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Case Studies

New Member DGM Kenya got their first job from a WCA member this month - An Air Charter of Class 1 Cargo to Botswana.
 
BACKGROUND:

Kukbo Logix Co., Ltd. received an inquiry from a Korean manufacturer of chemicals who had been exporting their liquid chemical products from Korea to Malaysia by using Intermediate Bulk Containers (IBC) within a general purpose dry container. The chemical is corrosive and considered dangerous cargo. 
The consignee in Malaysia though, faced two problems because of the IBC. Firstly, the empty IBCs took up space at the factory because they could not be easily disposed, and therefore had to be stored within the company premises. This is due to environmental legislation and lacking infrastructure for disposal of chemical residue in the customer’s vicinity. The second problem was that there was reoccurring leakage with the IBC. We do not know if this happened because of the corrosive nature of the product, or because the consignee didn’t handle the IBC in a correct way. The consignee asked the shipper to solve these issues.

Because the shipper’s logistics provider at that time couldn’t offer a better method to arrange these shipments, the shipper approached us. After we analyzed the situation, we came up with a possible solution based on using small ISO tank containers (17,500 liter), but we had to overcome several challenges to make this happen.

 
CHALLENGES:
  • Product: The product in question is a corrosive liquid chemical (DG Class 8). For this reason we had to find a type of package that fit with this chemical. Because the consignee did not have enough space to store empty packages, and can’t easily dispose IBCs, we also ruled out drums or any other similar package types that contained dangerous residue after discharging. Another hurdle was the leakage issue, which might also continue with options like steel drums.  Additionally, the product in question has a specific gravity of 1.45, and therefore we could not use general ISO tank containers, which have a volume of 24,000 to 26,000 liters, as those would become too heavy. Because of these requirements we opted for using small ISO tanks with a volume of 17,500 liters. Using an ISO tank solved both of the primary problems that the consignee was facing. ISO tanks are very safe, and if maintained well, there are generally no leakage issues as all the critical places like valves are checked regularly. Additionally ISO tanks can be simply returned after discharging the cargo and therefore don’t take up factory space. Because of the volume we had to use 30 such 17,500 liter ISO tanks.
  • Timeframe: The customer set us a very tough time frame.  The product had to arrive within 30 days at the consignee’s premises, after the consignee contacted us. Normally this would not be that difficult, but as small ISO tanks like the ones we needed have to be leased and are not normally available in greater quantities in Korea, we had to negotiate with multiple leasing companies, and still had to wait until some of those 17,500 tanks were positioned from other countries like China. So we had to juggle multiple leasing contracts while constantly updating and negotiating rates and space with the carriers.
  • Operation: Because the ISO tanks were sub-leased to our customer, the customer had to bear the costs, we had to stick to the bare minimum fleet size possible to avoid unnecessary costs for our customer. Therefore the utilization rate of the tanks had to be optimal. It was helpful that we could arrange the shipments as round trips without cleaning, as the product isn’t contaminated by residue. Not having to clean the tanks also saves costs of course. Still, the tank management, including domestic and international transportation, customs clearance, discharging and loading, had to be planned very carefully to avoid any idling of the tanks. This also included issues like having alternative carriers on hand in case of space problems or service delays. Additionally, the movement of the tanks had to be monitored very closely, so that we were always aware where the tanks were and where there were possible delays. As we only had the bare minimum of tanks on hand to transport the necessary volume, a major delay would lead to a disruption of our customer’s production line.
  • Price: It was crucial that our new method would at least not increase costs for the shipper, as they are in stiff competition with other companies, and can’t increase the price of their product. ISO tanks often have a price advantage against IBC or drums as the volume, which can be transported within the space of a 20’ container, but in this case as we only can use smaller tanks, and the customer actually has to lease them, there was no such inherent advantage.
 
RESULT:
  • We managed to organize the necessary thirty 17,500 tank containers within the time limit, by signing contracts with leasing companies from the USA, Europe and Japan. We had a bit of an advantage here, as we are the sole agent of Exsif, one of the biggest tank leasing companies, in Korea. Equally important was that we managed to find a reliable partner in Malaysia, who manages and monitors the tanks well, and diligently communicates with us.
  • The new method started in October last year and since then we experienced no leakage issues, and had no delays. The consignee is satisfied because the stock issue has been solved, and they find the discharging process much more convenient than before (our drivers are educated to do this together with the consignee’s staff).
  • Additionally the new method reduced logistics costs for our customer in Korea enabling them to reduce their selling price around 4%, and the monthly volume has almost doubled since we changed from IBC to tank containers.
 

For more information of the shipment, please contact Mr. Ingo Buchner at ingo@kbe.co.kr

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