Why ‘Shipper of Choice’ is a MUST in Chemical Logistics

Speaker 1 [0:00] But now entering Freeways Today, we’re going to have the one and only Mr. Rob McCray, the VP of Transportation here at Univar Solutions. Rob, hello, sir. How’s it going? Speaker 2 [0:12] Appreciate it. Speaker 1 [0:12] Appreciate you. Speaker 2 [0:13] Glad to be here. Speaker 1 [0:13] Glad you’re here. How’s, uh, first off, thank you so much for having us here. No, this is great. Speaker 2 [0:18] We’re in Chattanooga in your backyard, so it’s, uh, it’s the right move. Speaker 1 [0:21] It’s awesome. It’s fantastic. Speaker 2 [0:23] Yeah. Speaker 3 [0:24] So tell us, uh, The event is underway. Speaker 2 [0:27] Yep. Speaker 3 [0:28] First of all, how do you feel it’s going so far? Great attendance. Speaker 2 [0:31] Really well. Surprisingly, this is actually a little bit smaller of a crowd this year by design, but, but it’s going, going really well. As you can see, it’s all about getting everybody out mingling and talking to one another, and that drives that whole shipper of choice mentality. We want people to have the face-to-face connection. Speaker 3 [0:49] Tell us about the carrier kickoff. For people who aren’t familiar, haven’t been here, why do you guys do it? Speaker 2 [0:55] Sure. Speaker 3 [0:55] Do it every year, right? Speaker 2 [0:57] It’s a— it’s, it’s not cheap. It’s a big investment, as you can imagine. We, you know, the term Shipper of Choice, you guys give the great award out every year. It’s almost become synonymous with, you know, what’s your rating online and how many carriers, you know, look and want to do business with you. But the real, the real kind of connection for us is how we treat our carriers, right? So there’s, there’s typically 2 approaches. You can treat it as a commodity and just kind of chase the rate and go with wherever the wind is blowing, or you can establish some longer-term partnerships. And that last way is typically a little bit more expensive and it takes a lot more investment on the shipper’s part, but it pays dividends in markets like right now. When it contracts and it gets really difficult to find a truck, it’s all about all right. There’s a limited number of them. You have multiple customers or shippers calling into a carrier to say, “I need an asset,” and we operate you know with ninety-ish percent of our volume in the liquid bulk hazmat space. So it’s a very small niche of the registered DOT carriers. It gets very competitive. You know to get those those. those assets. And for us, being able to know who you’re talking to, for us as well as the carrier, putting a face and a name, it’s almost like you’re talking to a friend, you know, or you’re talking to somebody you’ve done business with and you know who they are, you know about their family, and you see them on a regular basis. And it makes it easier to get that asset when other companies, our competitors, aren’t necessarily investing in the carriers. And so when it’s that choice, do they make the short-term chase after rate and a higher margin load? Or do they say, you know what, this has been a long-term partnership for half a decade. These guys were always here consistently paying, you know, a small smidgen of inflation every year, even in deflationary markets. You know what, we’re going to give these guys the asset and it protects our customers and our suppliers. So that’s why we make the investment. Speaker 3 [2:58] Talk more about why it’s even more important, so important with Baltic Chemical and It’s a bit of a different market than regular van truckload. Speaker 2 [3:08] Yeah. You know, coming from the CPG space, you know, prior to my time at Univar, I can tell you trying to procure capacity in the liquid bulk space is a completely different animal. Most of the players are in that, you know, 10 to 50 asset range. And the commodities that we move, some are just standard steel drum tankers and you’ve got to worry about housing which are hazard placating, which limits the number of registered carriers, of course, first and foremost. But then as you start to get into your more specialty chemicals like hydrochloric acid, which requires a rubber-lined 53-foot tanker, you know, these are exceptionally expensive assets that require, you know, high utilization rates and require consistent business. And a lot of companies don’t want to make that investment because the market is cyclical. You might have a boom year, and then, you know, 2 years of a bust year, you know, 2 bust years in a row. And that’s very difficult to pay back the investment on that asset. So for us, you know, that’s one more reason why we wanna invest and we wanna make sure that, hey, we’re treating our carriers as best as we possibly can and inviting them here. Speaker 3 [4:13] Right. Speaker 2 [4:14] And it does, it does give us a bit of a competitive advantage when we’re going out to our customers. And you know what? Everybody’s competing for that asset. We have a large private fleet. They are fantastic for us, you know,