Tata Chemicals improves customer satisfaction and cost efficiencies while living up to its sustainability vision with Allcargo's coastal shipping solution
Allcargo Logistics forayed into coastal shipping in 2010. This move to diversify was backed by a strategic mindset to offer clients a fuel-efficient, environment-friendly and cost-effective transport solution by making good use of the 7,517km Indian coastline, one of the largest peninsulas in the world. Developing coastal shipping infrastructure would also build India's competitive edge internationally.
Since its inception, Allcargo's coastal shipping division has helped many of its clients bring efficiencies into their supply chains, reduce operational costs, and improve customer satisfaction.
One such client is Tata Chemicals, a market-leading international business, with operations in four continents. As a part of the $100 billion Tata Group, the company integrates sustainability considerations into its business decisions and processes to create value not just for its customers, but also for the environment and communities. Tata Chemicals has a comprehensive portfolio of consumer products, industry chemicals and agri solutions.
World's top soda ash producer faced hurdles in transport
Tata Chemicals is the world's second-largest producer of soda ash or sodium bicarbonate, a chemical with extensive industrial use in manufacturing soaps and detergents, glass, drugs, pulp and paper. For a long time now, the company has been supplying soda ash to FMCG major Hindustan Unilever Limited (HUL).
Tata Chemicals wanted to upgrade the quality of soda ash supplied to HUL by providing a very high-grade of the chemical from its facility in Okha, Gujarat. This variety of soda ash was produced from the finest limestone procured from Ras al Khaimah in the United Arab Emirates. The sheer bulk of the material — 3,000 tonnes per consignment — and the need to supply it regularly made it a challenge for Tata Chemicals.
Moving a 3,000 tonne cargo frequently by road or rail transport from Okha in western India to the Haldia port and HUL's warehouses in eastern India would turn out to be an expensive proposition. Also, the company's sustainability targets would get compromised by taking the polluting road route.
Tata Chemicals needed a cost-efficient and environment-friendly transport solution and hence turned to Allcargo Logistics.
Allcargo's solution for Tata Chemicals and its client HUL
After assessing the overall needs of the client, Allcargo decided to take its vessel Laxmi to Okha. The vessel has two holds, each with a capacity of 3,000 tonnes. At Okha, Tata Chemicals' 3,000 tonne soda ash cargo would be loaded into one of the vessel's holds. However, using only half of the vessel for the cargo was not bereft of challenges.
Keeping the second hold empty would affect the stability of the ship, exposing the soda ash cargo to risk. A half-empty vessel would also invite regulatory issues. The standard regulation is that when a ship enters a port, the trim (difference between the forward draft and the aft draft) should not be more than 2m. With a half-filled vessel, the trim of the ship could increase or decrease beyond the 2m limit, leading to regulatory violations. The only option to overcome these problems was to create a strong partition between the two holds and carry some other cargo in the second fold.
As a quality conscious organisation, Tata Chemicals had reservations about a second cargo being shipped along with its soda ash. There were apprehensions of contaminating it.
Allcargo worked around these challenges and found a suitable solution. It identified a second shipper— Rudraksh (Bajaj Salt) - that was transporting industrial salt to HUL at the same site in Haldia from Okha and immediately got the salt consignment on board its vessel, Laxmi. Transporting industrial salt along with soda ash would not be a challenge now as the end customer gave Tata Chemicals the nod to the arrangement.
To prevent any contamination, Allcargo created an impervious partition with the help of plywood and tarpaulin to keep the two cargos separate.
Allcargo provided end-to-end services, picking up the cargo from Okha and delivering it to the HUL warehouses about 6-8km from the Haldia port.
Three-fold impact on Tata Chemicals' business
Opting for coastal shipping as a means of transport has impacted Tata Chemicals' business at more than one level:
- Enhanced customer satisfaction for Tata Chemicals: With Allcargo's help, Tata Chemicals was able to transport superior grade soda ash to its customer HUL, ensuring higher customer satisfaction.
- Improved cost efficiencies: Opting for coastal shipping instead of road or rail transport helped to lower transport costs for Tata Chemicals.
- Boost to sustainability goals: Tata Chemicals integrates sustainability into all its business decisions. Moving to an environment-friendly transport option helped meet its sustainability goals.