Quinn Chemicals
A Bridge to Success
Global chemical company builds new plant in Germany with the help and imagination of project logistics provider.
Challenge
For most manufacturing and retail supply chains, the greatest challenges center on managing suppliers, vendors, inbound logistics and other front-end processes. The final delivery link is often the easy part that can be handled by any reliable transportation provider. With large project supply chains, however, the order of difficulty is often just the opposite. The final logistics leg can make or break the success of large industrial construction projects.
Quinn Chemicals, located in Ireland, is completing a large plant in Germany for the production of MMA, a base for Plexiglas production. The chemical plant is being built in Leuna near the Czech border in what was East Germany.
According to Dermot Carey, Senior Plant Manager for Quinn Chemicals GmbH., the main challenge for Quinn was the safe, on-time delivery of key components to maintain the construction schedule. “Much of this material is large and very difficult to transport,” he says. “Just about every leg requires special permits from various different authorities. The logistics involved detailed advance planning down to the exact weight and dimension of each piece and determination of the center of gravity for each component.”
Solution
The most important components of Quinn’s chemical plant were custom-made by contractors all over the world. A 270-ton reactor was made in Deggendorf, Bavaria and two 100-ton reactors were made in Kobe, Japan. Eight towers from 30-48 meters long and 4-6 meters diameter, weighing up to 155 tons, were built in Shanghai, China. All of the multimillion-dollar pieces took many months to design and fabricate and each piece was unique and critical to the final project. “Redundancy or replacement of any piece for any reason was not an option,” says Carey.
The fabrication process for the 11 giant components went off without a hitch. Even the long water journey required for most of the pieces was not a significant challenge. “While these moves were very long, commercially available self-geared heavy-lift vessels made these shipments fairly routine,” says Emanuel Scerra, Regional Director for BDP Project Logistics in Germany that handled the final delivery of the inbound components for Quinn Chemicals.
The final miles
The logistics challenges really began when the pieces arrived on German soil. There is no way to move pieces weighing up to 270 tons several hundred kilometers by rail or over conventional highways to Leuna. In fact, the logistics planning for the final delivery of the components to the Leuna site took an entire year.
BDP Project Logistics GmbH –a division of BDP Project Logistics, headquartered in Singapore –was one of several firms considered for the transportation work. The leading competitor had already started its preliminary planning months before and nearly landed the contract before BDP even had a chance to bid.
“We were awarded the project in April 2007 even though we were unknown in the market in Germany,” says Scerra. “I believe it was due to the detailed planning we were able to present to Quinn and our ability to deal with their concerns.” For example, BDP’s plan called for delivery of every component intact, regardless of its size or weight. The solution proposed by a competitor was to cut the very long towers in two. Quinn did not like the idea of potentially compromising the towers’ integrity. This approach would also have adversely impacted an already tight schedule. BDP’s plan was to bring each tower in as one piece using a unique, temporary bridge.
Carey insisted that transportation and logistics cost were a part of the vendor selection process. “Quinn looked at more than a straight comparison of transportation quotes,” says Hüseyin Kizilagac, Director of Sales for BDP Project Logistics. “They considered total logistics costs.”
Cost also played a role in selection of modes, according to Carey. For example, water transport was used where possible, not just because it is less expensive, but because the size of the pieces simply eliminated the possibility of road transport for many of the moves within Germany.
The next move was by river barge. First was the 270-ton reactors being built in Bavaria. BDP Project Logistics loaded them on a barge on the Danube River in June 2007, then on Rhine-Main-Danube Canal via Nuernberg and to the small river port of Aken, 80 kilometers from the Leuna plant site. In November 2007, BDP picked up the two Japanese reactors in Hamburg and moved them by barge, which also picked up the Bavarian reactor transported in June, and transported all three closer to Leuna.
The longest land leg for all major pieces was from the Pfuetzhal river jetty to the Leuna site. The trailer for the 270-ton reactor had 21 axles. For the “smaller” 100-ton pieces, BDP used lowboy trailers with 10 axles. The narrow roads, power and telephone lines, small bridges, and other obstacles presented problems at every step.
“We went through a dozen towns in the middle of the night to avoid disruption and damage claims,” says Scerra. “The huge plant pieces had to underpass some of Germany’s most powerful high-voltage lines where the minimum security distance is five meters. To avoid areas with the most obstacles, BDP built a temporary bypass road out of aluminum panels across farmers’ fields.
To coordinate the moves, get permits and permissions from all parties impacted by the passage of the trailers, collaboration had to be face-to-face. “We found out very quickly that there is no substitute for sitting down with the people who have to give you permission,” Quinn’s Carey says.
No more windows
Unfortunately, the fabrication of the towers was delayed in China, well past the arrival dates, so BDP kept applying to the Deutsche Bahn for additional crossing windows. After the thirteenth extension, there were no more windows. When the towers finally arrived, BDP had two choices: wait 28 weeks for more railroad windows to open up, or ship the towers down river where the two of the three rail lines could be bypassed. “The water was almost too high,” says Scerra. “We under-passed a bridge by two centimeters of clearance having added 300 tons of ballast to lower the level of the barge to allow clearance.”
The final and most challenging obstacle for all 11 pieces was the ICE high-speed train line that bordered the industrial site. BDP again applied to the Deutsche Bahn for a special permit to perform work over the ICE lines. And again, the Deutsche Bahn would only grant a few two-hour windows and the application had to be made 28 weeks in advance.
With such a small window, the final obstacle seemed insurmountable. “The crane cannot operate when the wind is over Beaufort 4 (12-15 Km/hour),” says Scerra. “If we missed the window, we would have to wait an entire week.” BDP’s Hüseyin Kizilagac came up with another solution: build a temporary bridge across the rail line.
“We were able to deliver the pieces exactly when the customer needed them,” says Scerra, who adds that this concept had never been tried before in Germany. The main reactors were delivered a full month ahead of schedule, much to the delight of Carey and his team at Quinn. The final pieces of the project, the eight towers from Shanghai, were delivered to the Leuna site in May 2008.
The success of the move earned BDP Project Logistics Germany company respect in the world of project logistics. Not only was part of the project finished ahead of schedule, but it also came in on budget.
“Project logistics is unlike conventional transportation work,” says BDP’s Hüseyin Kizilagac. “You have to be willing to get your hands dirty. Plus, project logistics companies have to take on much more risk than other types of logistics providers. While our customer approved the temporary bridge concept, it was up to us to have it approved by all of the parties to include the railroads and local government agencies. The risk was entirely on us to get the bridge approved and built.”
As the project logistics leader, BDP also took the risk of not exceeding the original proposal cost. “We optimized every part of the plan including transportation, routing, engineering, permits, etc.,” says Scerra, “but we knew quite a few things could go wrong. We figured on the worst-case scenario to meet deadlines and avoid penalties. If the costs were higher, we would assume the risk of any cost overrun.
“While luck can play an important part in project logistics, I believe it is also true that the better you plan and execute, the more luck you have.”