Chemicals in the right hands

Is the chemical industry acting responsibly by transforming into an e-market place? Tania Coates asks how distributors are embracing change and how it will affect responsible care.

Road transport of chemicals is by far the most important way of moving chemicals, with 16 000 bulk tank vehicles on the roads of Britain today. Despite the usual traffic congestion on roads, a strong pound and rising petrol prices, distributors remain well placed at the sharp end of the chemical industry.

As the process of cutting out links in the supply chain increases, through Internet capabilities, distributors are cutting costs at both ends of the supply chain. Chemical e-marketplaces, such as Elemica, will act as a hub where information and 'paperwork' can be shared and processed between customers and suppliers. But will the responsibility for safe delivery of potentially hazardous chemicals be jeopardised if an e-market takes on distribution?

By 2005 about 25 per cent of global chemical sales is expected to move to electronic channels, according to data from Forrester Research. To address this market ChemConnect was founded in 1995 and has sucessfully traded chemicals over The World Chemical Exchange. Air Products announced in July it intends to facilitate global customer to supplier relationships by moving existing business processses onto the web via Elemica. However, industry has a long way to go before logistics is automated on the web, though it is recognised that the web may help rating and load matching.

Mixed feelings

Last year, British Chemical Distributors and Traders Association (BCDTA) members made more than 900 000 journeys to distribute 2.9 million tonnes of chemicals, accounting for over 85 per cent of chemicals distributed in the UK. But there are mixed feelings from BCDTA members. The high value speciality companies take a very different view about e-commerce. Reg Warren, managing director of Hawk Chemical Company, a specialist in organic intermediates, said : 'it does not suit us to 'go to town' as we do not have a set price list or a million transactions a month. It is also important to deal with customers face to face.'

According to Colin Wainwright, director of BCDTA, 'checks and balances for safety, health and the environment (SHE) will slip between the cracks in the wood', if an e-market place evolves. Last year there were six dangerous occurrences for every million tonnes of product distributed, a slight fall on the previous year. 'Chemical distributors will have to strike a balance between the right commercial decision and responsibility for health and safety,' said Brian Orange, managing director of Orange Chemicals.

However, change seems to be occurring at a running pace with many virtual markets springing up. For example, ChemPoint.com, an e-distributor of chemical products focuses on web-related telemarketing of specialities. It is already attracting growing interest from suppliers and users at comparatively low start-up costs. Air Products also maintains it will distribute products via existing routes with the same level of safety.

In 1999 the number of tanker movements made by BCDTA members increased from 99 000 to 116 000, which reflects the increase in 'just-in-time' deliveries made. So as a global market-place succeeds the local forum, distributors will continue to react to the marketplace. But it is up to them to remain accountable for their actions.