Why Chemical Logistics Needs a Shipper of Choice
Chemical logistics companies face a persistent challenge in securing capacity during periods of high demand. Rob McCray, Vice President of Transportation at Univar Solutions, argues that the most reliable way to secure trucks for hazardous materials is to become a “shipper of choice.” This approach prioritizes long-term relationships over short-term rate chasing.
The cost of chasing the lowest rate
McCray explains that many companies treat carriers as a commodity. They simply look for the lowest price and switch providers whenever the market shifts. This method often fails when capacity is tight. Since Univar operates mostly in liquid bulk hazmat, the pool of available carriers is very small. In a competitive market, a carrier receives many calls for the same assets. If a shipper has not established a personal connection with the carrier, the carrier will likely choose the customer offering the highest margin for the immediate load.
Univar avoids this trap by investing in face-to-face events. The company hosts a carrier kickoff event, which requires a significant financial investment. The goal is to treat carriers like partners rather than vendors. By inviting carriers to Chattanooga and engaging with them directly, Univar builds a network of trust. This trust ensures that when a truck is needed, the carrier looks to Univar first.
Niche assets require specialized care
The chemical industry moves unique products that require specialized equipment. Standard steel drum tankers are common, but some chemicals like hydrochloric acid require rubber-lined 53-foot tankers. These assets are expensive and have high utilization rates. A shipper must provide consistent business to justify the investment in such equipment.
Building a network of partners helps mitigate this risk. By maintaining good relationships, Univar ensures that its carriers are available when the market turns. This strategy also extends to the company’s private fleet. While a large portion of volume moves via carriers, the private fleet allows Univar to reach customers outside its normal delivery zones. Carriers that work with Univar appreciate the consistency of the work.
Related: 10 Things To Look For In VPS Hosting Before Buying
Success in this model relies heavily on the people running the logistics department. Univar targets employees who are data-centric but also possess high emotional intelligence. The company looks for individuals who understand the blue-collar nature of the industry and enjoy engaging with drivers. This human element is vital. When exceptions occur, a shipper with a face-to-face relationship can resolve issues quickly through conversation rather than email.
The philosophy extends to how the company handles underperforming carriers. Univar uses a “rack and stack” system to rank carriers based on service levels. If a carrier falls off track, they receive a 90-day period to improve. If they do not meet the standard, the relationship ends. This discipline ensures that only the most reliable partners remain in the network.
In a sector where there is “so little room for error,” consistency is everything. The company’s approach creates a flywheel effect: reliable service attracts more business, which generates higher profits that can be passed back to carriers as higher rates. This creates a sustainable cycle that protects the company’s customers and suppliers from market volatility. [1]AI data centers are reshaping freight demand, further complicating these logistics challenges.
Looking Ahead
Consistent operations are the only path forward for chemical shippers.
