Leadership insights

With the bulk of ISO tank volumes tied to big customer contracts, large players are set to reap better rewards.

Where does this leave small and mid-sized operators? Because the industry is getting more crowded :

1. Non-contract, on-the-spot volumes still offer potential. But there's more competition as newcomers are always entering the market.

2. For current smaller operators, this rise in volatility reduces growth opportunities and profits. Also, the new operators operate on thin margins.

Have existing collaboration attempts helped? Not much.

Many have tried sharing resources or partnerships. However, these experiments often struggle to survive. Without financial commitments, there's fragmentation. Just short-term thinking hurts everyone.

Two possible paths worth considering:

1. Cross-continent partnerships with combined fleets can improve scale and synergy. Equity commitments can strengthen credibility.

2. Building global marketing and operating organically, although capital-intensive, makes you resilient. Investor options open up too.

Ultimately, the choices for smaller operators are less. As larger players tighten their grip over volumes, we need more creative solutions.

Working alone may not work anymore. Joining hands with others seems the strongest way forward.

Happy to chat about long-term collaborations. Please drop me a message.

Stepping into 2024, there’s an air of cautious optimism for the tank container industry grounded in wider economic positivity.

Predictions show increased manufacturing activity and global chemical shipments this year - welcome news after recent volatility. Macro indicators seem to point towards steadier times ahead :

- The west expects around 3% growth.

- India is projected to grow at 7%.

- Global estimates between 1-3%.

This is a strong signal for global trade flows.

But the last few years show seismic events can quickly throw projections off track. And, we’ve already had a taste of this recently :

1. Shipping routes were disrupted again as an important sea trade route faced issues - the Red Sea corridor - due to regional instability.

2. Vessels are now rerouted, and delivery timelines have been extended by 2-3 weeks more while fuel and charter costs also increasing.

Despite this, there are many opportunities ahead but also possible challenges.

As operators, it calls for staying agile, building contingency plans, and doubling down on what’s in our control. The path for growth looks clear but there are still rough spots ahead.

Let's hope all involved make better choices in the coming months to achieve widespread success.

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As 2023 ended, here are some of my top observations from an ISO tank operator POV :

1. The year started well as 2022’s momentum spilled into Q1. Yields and tank utilization looked decent to begin with.

2. But global affairs (Ukraine War, Sanctions, economic downturns, etc.) soon triggered a domino effect – production cuts, and shrinking demand in Europe. ISO tank inflows into the region dried up as sanitized Russian supply chains disabled key doors.

3. European depots filled with idle ISO tank capacity even as storage costs increased. Operators diverted equipment out of Europe, leading to increased competition and falling rates in high-volume trades like Asia-Indian Subcon-MENA and Intra-Asia

4. Inbounds into China, also contracted after years of growth. Overall a turbulent year for small and mid-sized tank operators relying on spot markets rather than long-term contracts.

The silver lining?

By Q4, there were signs of stabilization – yields and utilization improved slightly month-on-month.

The big challenge ahead?

For mid-sized tank container firms especially, 2023 emphasized the need for resilience through collaboration.

Pooling assets, expertise, and networks with others can help smaller and mid-sized operators withstand market turbulence. Some partnerships I trust are worth exploring:

- Co-bidding on contracts to have skin in the game across geographies

- Facilitating access to vetted, reliable partners across operating regions

- Offering combined capacity commitment to contracts out of reach for individual players

- Leveraging combined volumes to negotiate better freight rates and favorable terms with vendors

Essentially, cooperation models make the growth journey better in times of uncertainty.

For Deccan Transcon Group of Companies, the frame of mind is turning more cautiously optimistic for 2024 despite occasional speedbumps. It’s important to remember - Alone we shrink, together we grow.

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I’ve seen many aspiring tank operators hit walls at small fleets, struggling to sustain expansion. Reasons behind it :

1. Regional risks leave them vulnerable. For example, high dependence on few geographical areas or narrow customer segments.

2. Chemicals are commodities manufactured across continents. Supply sources swing based on pricing. Small operators may fall short because of their limited coverage

3. Larger players mitigate volatility via global diversification across regions to meet the demands of the supply chain.

If demand dips in one area, the larger players with their wider networks quickly reshape flows by tapping opportunities. This results in smaller firms concentrated in single regions facing a downturn in volumes and revenues.

Established leaders carefully built up their technical skills, assets, and networks over decades to smoothly customize services. This earns loyalty and trust.

It’s difficult for newcomers to replicate this agility quickly. In tank container shipping, longevity and scale enable adaptation when fluctuating cycles swing.

Lasting success relies on patiently constructing sturdy foundations using the blueprint laid out by organizations focused on the long game - slowly but surely

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Even after 25+ years, the tank container industry still sees a stark divide - European companies lead global tank container logistics while Asian players struggle to scale. Why?

Europe's early moves in cementing partnerships, networks, and financing set the foundation. Leading operators leveraged these platforms, steadily:

1. Accumulating technical skills and assets

2. Expanding into diverse worldwide regions

3. Forging ties across the value chain

It's difficult for newcomers to replicate the expertise and stability built over decades.

Chemical manufacturing saw a major shift from the West into East Asian countries like China, Korea, and India in the late 90’s. As capacities and volumes increased steadily, European operators moved quickly to fill emerging supply chain needs.

With this, the intra-Asia trade for chemicals started to build up which saw consistent expansion of business and volumes.

The Asian operators who latched on to this quickly tasted success. However many of them found it challenging to expand into the deep sea sectors of Europe and the Americas.

In recent times some Asian operators have ventured into Europe, establishing offices, and building strengths and capabilities.

A select few even participate in large MNC tenders, possibly paving a path for other Asian tank container companies.

Ultimately, those who balance growth strategy, patience, risk management, and service integrity tend to emerge stronger in the long run.

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The tank container sector has seen major operators succeed as well as smaller players struggle.

Industry leaders have grown substantially over decades. Their strategies fueled growth:

- Building versatile, modern fleets matched to demand

- Investing in depot infrastructure and maintenance

- Leveraging scale for cost advantages

- Delivering exceptional service and reliability

In contrast, new entrants often fail to gain traction and eventually exit the market. Challenges they face include:

- Building a customer base and relationships

- Managing assets and utilization

- Achieving margins with a smaller scale

Succeeding in tank container operations requires mastering complex logistics, shrewd asset management, and customer service excellence.

The most successful players have patiently built world-class capabilities tailored to this unique sector over 30+ years. Their deep expertise creates formidable barriers to entry.

But, there are secrets to success in this industry. They’re the reasons why one thrives and others struggle.

 Many new entrants have struggled to succeed in the specialized tank container sector. Why?

After 25+ years in the business, I've found success comes down to reach and relationships - the power of your network.

Some operators fail because they cannot expand fleet size beyond a few hundred tanks. This limited scale leaves them vulnerable.

Others stumble because they lack a network of reliable agents and partners to build reach and also struggle with identifying who can promote the operator's business in that country.

Very often they end up working with agents who promise but do not deliver. To thrive, an operator must:

1. Build relationships with customers

2. Develop connections with a wider base of reputable, vetted partners worldwide

This takes time and dedicated effort. A strong network opens access to business opportunities and generates crucial operational know-how. The most successful players have:

1. Patiently grown their fleet size

2. Broadened their partner network over decades

This helps them deliver reliability that keeps customers coming back. Ultimately to ensure profitability, operators need to:

1. Reach sufficient scale

2. Increase fleet size

3. Cover wider regions in their network

That allows them to increase the share of business of existing customers and add new customers to the portfolio

There are no shortcuts.

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The bulk liquid logistics landscape has changed very little over the decades. Safety improved, but the fundamentals stayed the same.

Let’s compare it to the apparel industry's supply chain revolution.

Remember when clothes took months to ship across oceans? Today, online retailers can promise delivery in days without blinking.

What changed?

- New tech smoothed handoffs between suppliers, transporters, and warehouses.

- Inventory buffers sped up restocking.

The apparel supply chain went from rigid to agile almost overnight. Consumer expectations completely reset.

Yet bulk liquid logistics operates much like it always has. We standardized early but got complacent. Stuck in the past.

Truth is, we’ve barely scratched the surface of what’s possible. There are tons of chances to improve our customers’ experience.

But it will take open minds and fresh thinking - a willingness to challenge the status quo.

Overall, I see a lot of potential for innovation and ideas that could reshape our industry.

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It’s been 50+ years since the Global emergence of tank containers transformed supply chains for bulk liquid transport.

Engineers introduced innovative ISO tank designs that offered major advantages over drums or other conventional shipping methods.

After a 25+ year career so far, We have witnessed first-hand the growth of tank container logistics

Tank containers revolutionized efficiency and safety by:

- Replacing drums

- Minimizing residue

- Labor-intensive loading/ unloading

New tank designs also enabled lighter structures and higher payloads.

Still, the fundamentals remain unchanged. Incremental innovation yes, but no major disruption.

Significant supply chain integration and efficiency improvements have yet to materialize. Both a challenge and an opportunity.

There’s much work left to unlock the full potential of tank container logistics. Excited for the journey ahead.

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Why are ISO tanks often considered more sustainable than other forms of bulk transportation?

They are designed to be reused many times over their lifespan. ISO tanks are made from durable materials such as stainless steel, which can withstand rough handling, extreme temperatures, and corrosive materials.

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Furthermore, because ISO tanks are standardized in size and shape, they can be easily transported via multiple modes of transportation, including ships, trains, and trucks, reducing the need for handling and transfer of goods between different types of containers. This reduces the risk of product contamination and waste.

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Finally, because ISO tanks can be cleaned and maintained easily, they are more hygienic and safe for transporting various goods, including food and hazardous materials. This reduces the environmental impact of transportation, as well as the risk of product contamination and waste.

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Do you need to transport hazardous cargo and require our expertise with ISO tanks? We provide services to over 50 countries, and counting!

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The ISO tank industry thrives on secure and efficient transportation of bulk liquids and gasses worldwide.

While standardized containers ensure seamless movement, managing the human aspect of this global operation is where the real challenge lies.

Apart from hiring the right people, building a strong, diverse, and motivated workforce is important while creating a culture of growth and collaboration.

The ISO tank industry deals with various cultures, languages, and legal systems. Aligning IHRM strategies with a company's global goals becomes crucial. This requires:

1. Staying updated on labor laws, regulations, and cultural norms in each country

2. Hiring talent with expertise in new markets and providing relevant training

3. Creating an inclusive work environment that celebrates diversity

Cultivating a world-class workforce needs to be a top priority and starts with :

- Investing heavily in training and development programs

- Ensuring employees have the skills and knowledge they need to excel in their roles.

- Creating a culture of open communication and collaboration

- Encouraging teams to share ideas and work together towards common goals

- Training in IMDG code which is crucial for safely handling hazardous/non-hazardous cargo when transporting chemicals to prevent collateral damage.

This is the first step. To succeed companies must also focus on retention.

This includes providing opportunities for growth and advancement, recognizing and rewarding top performers, and creating a work environment that values employee well-being.

It’s important to keep them engaged and motivated long-term because the company's workforce is its greatest asset.

Invest in people, and create a culture that values diversity, inclusion, and excellence. This can build a significant competitive advantage in the ISO tank industry.

Any strategies you found effective for building and retaining a strong workforce?

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