Supply chain design – Baku style

Supply chain design – Baku style

The following is an example of the Metro approach, in a region where we have operated for years, the Caspian Sea, which has oil and gas reserves in abundance. A major client operates an important facility in the nearby Azeri capital of Baku, one of Central Asia’s oil and gas hotspots, and invited us to redesign its supply chain that links the facility with Europe.

The chief difficulty in serving Baku is it’s infrastructure; it sits on the coast of the Caspian Sea, the world’s largest inland water. Understanding the available facilities and local requirements is essential.  The company previously shipped large volumes of ISOTANKs into Baku, using container shipping services to the Georgian port of Poti, which were then transferred to rail for onward carriage to a railhead in Garadagh, a suburb of Baku. At that point a local agent completed import clearance and transported the units to our client’s plant.

Metro subsequently found a number of opportunities to both improve the velocity of shipments and reduce cost. Critical to this was the previous lack of visibility, crucially including shipment status, so the first step was to deploy our MVT system to ensure full visibility for both Metro and the client. The next step was to remove the rail leg altogether and transport the containers to plant from Poti directly by road. While rail is often a cheaper transport mode than truck, especially over longer distances, it also involves more handling, as the final leg is almost always done by road anyway, as in this case. Inevitably the ISOTANKs waited days to transfer to a truck at the rail terminal resulting, in higher ISOTANK hire charges.

So the higher cost of road transport was mitigated by savings in these areas, among other changes that Metro was also able to introduce. We expect to create further efficiencies as we move forward with the project and our relationship with the customer develops. This is just one example of the sort of advantages we are able to offer.