MODULE C: TRANSPORT ECONOMICS AND CASE STUDIES … · DGF Industrial Projects Presentation Page 5...

This project is funded by the European Union

DORNIERCONSULTING

A project implemented by

MODULE C:TRANSPORT ECONOMICS AND CASE

STUDIES

EU-FUNDED LOGMOS PROJECTLOGISTICS PROCESSES AND MOTORWAYS OF THE SEA II

Zurab SapanadzeGeorgian Express LTD Official Agency of DHL GLOBAL FORWARDING and DHL EXPRESS in Gerogia

by

TBILISI, GEORGIA 12 APRIL 2013

DGF INDUSTRIAL PROJECTSPROJECT FORWARDING EXPERTISE

DGF Industrial Projects Presentation

DP DHL GROUPOVERVIEW

The groups wide service portfolio gives you access to end-to-end supply-chain solutions, regardless of the size of your shipment.

EXPRESS

Documents and Parcels

• Documents and Parcels service

• Export, Import & Domestic Products

• Time and Day Definite, and Same Day

Revenues (€m): 11,770FTEs: 85,000

• Air and Ocean Freight• Road Freight• Industrial Project – global

leading project forwarder. • International Supply Chain• Rail Transportation

GLOBAL FORWARDING / FREIGHT

Global Air and Ocean Freight &Europe-wide Road Transportation

Revenues (€m): 15,045FTEs: 42,000

• Warehousing, Distribution andManaged Transport Service

• Value Added Services

SUPPLY CHAIN

Contract Logistics

Revenues (€m): 13,225FTEs: 137,000

MAIL

German & Global Mail

Revenues (€m): 13,975FTEs: 186,000

• Delivers mail items to 40 million households in Germany

• DHL Global Mail largest network for mail distribution worldwide

12 April 2013 PROJECT FORWARDING EXPERTISE


1) Air Freight market share is based on airfreight volumes moved in 2012, figures stated are in export ‘000 tons2) Ocean freight market share is based on ocean freight volumes moved in 2012, figures stated are in ‘000 TEU’s3) 2012 data4) 2012 TDI Revenue: BE, CH, DE, ES, FR, IT, NL, PL, SE, UK, AE, RU, ZA, AU, CN, HK, IN, JP, KR, SG, US, BR, CA, MX

Logistics facilities in 3,370 locations About 275,000 people worldwide Revenues: + €43 billion (2012)

DHL GROUPMARKET POSITION

What it means to you: capacity availability and competitive prices.

Ocean Freight forwarder

2

2,783TEU’s2)

Contract logistics service

provider

1

8.3%Global MarketShare3)

European Road Freight

forwarder

2

2.4%European Market

Share3)

Air Freight forwarder

1

2,459Export Tons1)

International express parcel

providers

1

~30%Global International

Express Market Share4)

Global Market Position



DHL GLOBAL FORWARDINGAIR & OCEAN FREIGHT – FACTS AND BENEFITS

Service Features Customer Benefits

Over 7,000 operational airfreight experts in over 600 own integrated airfreight offices / terminals, worldwide.

>4mn tons handled annually Complete range of airfreight services Vast range and flexible service options (Air First,

AFR Plus, Air Premium, Air Value, Charter) Multimodal transport solutions (DHL SEAIR and

RAILAIR) Brokerage

Worldwide network of local experts Complete range of airfreight services from a single

source Standardized connections and fixed schedules Consistent service quality with selected preferred

carriers Secured capacity in volatile periods thru in-house

carrier Starbroker Flexibility through seasonal charter options or ad hoc

More than 4,000 operational experts worldwide 330+ operational locations Annual volumes 2.78mn TEUs1)

In excess of 45,000 weekly point pairs for LCL2)

globally A comprehensive range of services to suit your

ocean freight requirements.

Worldwide network of offices staffed by ocean freight specialists

Local connection to global ocean freight solutions Contract carriers and vendors undergo tough

screening process Defined and monitored processes to maintain and

raise quality Unlimited service combinations drawing on global

range of structured services Centralized global purchasing from DHL provides

competitive edge for customers

Ocean Freight

Air Freight

1. Twenty-foot Equivalent Unit. 2. Less than Container Load



Service Features Customer Benefits

Sizeable buying power and more favorable pricing than most shippers can command on their own

Broad range of insurance programs, including all-risk coverage across product portfolio

Insurance on a per-shipment basis or for your entire cargo program

Financial protection and peace of mind All-risk coverage at competitive rates Prompt claim handling and resolution One contract and partner for transportation and

insurance Easy payment and minimal administration

Import and export customs clearance services Regulatory and compliance support Consulting services Foreign trade zone Duty drawback and customs bond handling

Dedicated local experts ensure flawless and consistent customs related services

High automation virtually eliminating errors Consistent control via audits, quality and

performance metrics and best practices Single point of entry and simplified billing

Expertise and consultancy in all security-related questions (e.g. C-TPAT, CSI, NASP)

Tailor-made security solutions and risk analysis We manage security issues proactively by taking

preventive measures through effective investigation We ensure transparency with our internal security

audit, risk assessment and integrated security concept We guarantee quick response times to security-

related incidents

Security experts in the regions and countries Security measures are constantly adapted to the

changing needs of the business Security measures are differentiated and applied

to the specifically identified risks and dangers Pro-active emergency and crisis management

ensures your cargo and interest reach maximum attention

CustomsBrokerage

CargoInsurance

DHL GLOBAL FORWARDINGVALUE ADDED SERVICES – 1 / 2

Security



Division of DHL Global Forwarding Project Freight Forwarding & Logistics Solutions and Management Engineering Support Services for Heavy-lift / Out-of Gauge Movements Marine / Offshore Chartering

DGF INDUSTRIAL PROJECTSOVERVIEW

IndustrialProjects



DGF INDUSTRIAL PROJECTSSECTOR FOCUS

Customer knowledge & sector insight

Services tailored to specific industry needs

Leverage cross-sector experience and best practices

Core segment teams and pool of expertise

Oil & Gas

On- and off-shore locations, FPSO’s.

Platforms, LNG plants, Pipelines.

InternationalOil Companies

Refineries, Upgrades & Expansions.

Power & Renewables

Engines, turbines and transformers.

Power stations.

EPC

Factory Relocations. Paper, Steel,

Cement mills. Infrastructure

projects.

Mining

Heavy-equipment handling.

Mining developments at remote locations.



• Relentless pursuit of no harm to people & no incidents

HSSE Vision

Strategy • Clear HSSE procedures & standards• Compliance with Critical Safety Rules• Behavioural Based Safety• HSSE Risk Assessment & Mitigation

Health, Safety, Security, Environment

DHL Critical Safety Rules

Do not enter a confined space without authorization

Use specified personal protective equipment

Do not override or disable safety critical equipment without management authorization

No alcohol or drugs while working or driving

Verify isolation of energy sources before work begins (lock-out / tag out)

Do not smoke outside designated smoking areas

Prepare a Job Hazard Analysis when required

Do not walk under a suspended or elevated load

Do not enter a confined space without authorization

Use specified personal protective equipment

Do not override or disable safety critical equipment without management authorization

No alcohol or drugs while working or driving

Verify isolation of energy sources before work begins (lock-out / tag out)

Do not smoke outside designated smoking areas

Prepare a Job Hazard Analysis when required

Do not walk under a suspended or elevated load

JHAJHA

Do not position yourself in crush zonesWear your seat belt in motorized equipment

Use proper lifting techniquesInspect motorized equipment before use and do no operate motorized equipment unless you are properly qualified

Protect yourself against a fall when working at heights above 6 feet

While driving, do not exceed speed limitsand use cell phones only with hands-free feature and where permitted by law

Do not position yourself in crush zonesWear your seat belt in motorized equipment

Use proper lifting techniquesInspect motorized equipment before use and do no operate motorized equipment unless you are properly qualified

Protect yourself against a fall when working at heights above 6 feet

While driving, do not exceed speed limitsand use cell phones only with hands-free feature and where permitted by law 6f t6f t

_ _

CORE PRINCIPLE

Management • OHSAS Compliant HSSE • Management System• Development of Generative Culture via

nurturing of: - Personal interventions- Personal responsibility- Individual consequences



Drive a Zero accident culture throughout our organization Make safety part of the day job ‘every day’ Recognized by our employees, customers and industry as the

safest employer Deliver a clear and tangible H&S value proposition for our

customers

HSSE Vision

HSSEHEALTH, SAFETY, SECURITY, ENVIRONMENT

DHL Global Forwarding Industrial Projects is committed to the health and safety of people, and the protection of assets and the environment in which we live and operate

HSSE MANAGEMENT SYSTEM

POLICIES PROCEDURES SYSTEMS LEADERSHIP

DHL GLOBAL FORWARDINGINDUSTRIAL PROJECTS

ISO 9001 and ISO 14001 Quality accredited

OHSAS 18001 Occupational Health and Safety Management Systems in place

Motivating Tools

Company management and leadership commitment to HSSE.

HSSE risk assessment and management. Clear and communicated HSSE policies and strategic

objectives. Structured HSSE audits, assurance and management

review process. Standardized company operating procedures authored

into all project plans.

Principles of Safety

Transportation. Know The risk. Compliance. Communication. Lifting Operations. Environment. Security.



With our GoGreen program we aim to minimize the impact of our business on the environment

GoGreen focuses on the long-term goal to improve our CO2-efficiency by 30 % by 2020 (compared to 2007 levels), including our subcontractors

HSSEGO GREEN - ENVIRONMENTAL PROTECTION



With DHL Carbon Footprint Report and Carbon Offset it can also become your goal, differentiating yourself from the competition – today!

CARBON MANAGEMENTGO GREEN SOLUTIONS



COMPLIANCEOVERVIEW

Compliance hotline system for employees

Training of all employees via

eLearning courses

External & internal

compliance audits

Regular compliance

risk assessments

Use of a world wide

compliance incident tool

Comprehensive compliance

reporting for executive and supervisory

Board

Due diligence of business

partners

ActivitiesVarious

compliance agreements / solutions with

customers

Policies

Guideline

Documentation of Compliance Measures

“FCPA and UKBA (including related laws) are a top priority for the Company. The consequences of non-compliance would represent a huge and unacceptable risk… this is a zero tolerance issue.”

Hans ToggweilerCEO Industrial Projects



Source (map): Transparency International

Operating around the world means having a clear understanding of the compliance issues in any one country and strict adherence to international laws, policies and guidelines.

COMPLIANCECORRUPTION PERCEPTION INDEX 2012



Mandatory compliance online courses (completion is 100% within IP): FCPA, competition compliance/anti-trust, Anti Corruption, Business Ethics and DP DHL code of conduct incl. supplier code of conduct.

HSSE vendor audit process for Top15 vendors in each country + Level 4 compliance due diligence (performed by a specialized 3rd party) on all our agency agreements or Customs brokers.

Member of Dow Jones Factiva Risk & Anti Corruption (global compliance database)

Detailed and strict Customer Entertainment policy

FCPA Boot Camp required for our RVP’s (once a year)

Close collaboration with Legal and Global Compliance Office

Compliance is part of any Country/Regional/Global Management meetings

All DHL Global Forwarding offices are compliant with DHL’s Corporate Compliance Program which includes the following additions to the Logistics Code of Conduct to compliment the existing policy covering U.S. and international anti-bribery laws:

COMPLIANCEDHL PROGRAMS



Supporting:

Consulting on Duty Exemption prior to Project Start up RFID capabilities Export Packing and Crating Load-out and Discharge Management Simulation Modeling

Duty Exemption Processing Material Management Inventory Control IT Interfacing/EDI Carbon Management

OFFERINGSERVICE PORTFOLIO

Core: Out-of-Gauge Heavy Lift Cargoes Multimodal Transport: Road, Rail, Ocean & Air Domestic Transportation: Trucking / Air Customs Brokerage / Duty Drawback Warehousing (3PL / 4PL), Export Packing & Crating Consolidation, Storage & Marshalling Project cargo Tracking & Trace Systems Cargo Expediting / PO Management Ocean Chartering (time & trip charters, voyage & C.O.A.) Air Chartering (spot charters, wet lease & heavy lift) Transport Engineering: feasibility studies, route surveys Loading / Discharge Supervision Heavy Lift Transportation: Lifting, Ro-Ro, Inland, Barge, Ocean Marine Services: Tugs & barges, off-shore supply vessels



Project Logistics Planning - fully qualified, in-house engineering team.

OFFERINGENGINEERING & TRANSPORT DESIGN CAPABILITY

Feasibility Studies

Route Options from Fabrication Yard to Port

Technical Support Documents

Method Statements, operating procedures etc

Incorporate HSE standards, cost and time efficiency considerations

Stowage plan Transport drawing Heavy lift drawing Installation drawing

Technical Cargo Drawings

Route Surveys

Route A – KM 58.9 Bridge – Length 20m Bridge not supported by middle beams No weight restrictions indicated

Rehabilitation Studies

Route A – KM 60.1 onwards Road gets bumpy – Road holes along

the route up to site entrance

Optimal multi-modal transport option with lowest possible risks



SIMULATION MODELLINGOVERVIEW - WHY A SIMULATION MODEL?

To ask and assess “What if?” questions

The Simulation Model

Model logic is based upon your process description.

Animation of the process (provides dynamic insight into your system).

Statistics are calculated and displayed during model run.

Benefits: Show the system operating before building or changing it

Show the impact of variability

Identify > eliminate bottlenecks from your system

Show the complex system relationships in time

Demonstrate impact of change to others

Replaced “gut – instinct” with facts

Validate investment allocations

How many resources are required for a given workload?

Identify and measure key logistics elements Better understand, plan and schedule processes Optimize system performance Avoid unnecessary capital investments



VISIBILITY MATERIAL MANAGEMENT SYSTEM (MMS elite)

What it is MMS elite? MMS elite is an Internet enabled Material Management System providing robust “Real Time” Visibility, Document Distribution /

Depository, KPI-Reports and Freight Spend Reporting for Complex Logistics through all Continents and Mode of Transports.

What does MMS elite do? Standardized EDI-interfaces.

Purchase Order Management (Multiple Vendors, Pre-Alerts and Part Shipment Processing) with PO-line “Real Time” Item Track & Trace.

Ability to attach documents to POs (Customs Bills of Entry, Freight waybills, Engineering Drawings, video clips of load outs, etc).

Expediting and Container Location Management.

Document Distribution and Depository.

Pre-alerts.

Inventory Visibility.

Exceptions and Deviation KPI-Reports.

Net-Sales and Freight Spend vs. Revenue Reports.

Exception Report

mms elite

Analyze ReportDHL developed system



Freight Tons:

90,000 FRT over 5 years

Heaviest cargo:

180 Tonnes (Amine Shipment)

Transport equipment:

Air: AN124, B747, IL76

Road: all forms of trailers - low beds, tilts,mega trailers, heated & cranage

Rail: standard wagons/platforms & specialplatforms for heavy cargo

Challenges: HSSE, compliance,restricted sea/river access, monopolies,extreme weather/road conditions,unskilled labor, local legislation &authorities, complicated customsclearance procedures

Tengiz is the world’s deepest operatingsuper-giant oil field, with the top of thereservoir at about 12,000 feet deep (3,657m) flagship global (onshore) field ofChevron Corporation, producing 500,000bbls/day.

Tengizchevroil is a joint venture (formed in1993) between Chevron (50 % share in theconsortium), Exxonmobil (25 % share),KazMunayGas (20 % share) and Lukoil(5 % share) when the Kazakh governmentgranted an exclusive 40-year right toTengizchevroil (TCO) to develop the Tengizand Korolevskoye Oil fields located in thenorth-eastern reaches of the Caspian Sea inKazakhstan.

Largest single oilfield in Caspian / CentralAsia. Customer needed a project FreightForwarder to support their CAPEX andOPEX activities – including shutdowns.

In-House Expediting & VendorManagement Support reducingCustomer’s internal on time delivery from34% in year 1, to 80% in year 4.

Multi-modal heavy lift or out of gaugeshipments from world-wide locations tosite & deliveries from site to world-widedestinations, with zero lost timeincidents.

Services include:

Expediting. Project Forwarding. Heavy Lift / OOG. Charters – Air and Sea / River. Customs Clearance. On site team in Tengiz.

Customer Facts

Sector: Oil & Gas

Geography: Tengiz, Kazakhstan, EMEA

Duration: 5 years

Project Highlight Industrial Projects Scope

CASE STUDYOIL & GAS – OILFIELD

Project Synopsis



Customer Facts

Sector: Mining

Geography: Armenia EMEA

Duration: 1 Year

Project Highlight Industrial Projects Scope Project Synopsis

CASE STUDYMINING - GOLD

Freight Tons:

8,200 FRT

Heaviest cargo:

2x 42 MT Absorbers.17M x 4M Diameter


Transport equipment: combination ofsurface transport solutions from tri-axletrucks to 12 axle heavy duty low bedtrailers as well as containers

Challenge: Multiple geographies with avast distance to be covered from transitpoint to site of approximately 2500kmover rough terrain and a border crossing.Also bridge and road width restriction onroute to site.

Full door to door scope In-transit clearance for cargo on route to

site including port operations in Poti On forwarding services by road to site of

containers Transport of abnormal cargo from port to

site Global multimodal logistics Transit Clearance and Final clearance

at destination Full door to door deliveries.

Customer is gold producer with their miningoperation site based in Armenia

Due to Armenia being landlocked all cargoby ocean freight handled by DHL is routedthrough the port of Poti and Bandera bass

The challenge in this is that you are dealingwith transit cargo and multiple geographiesand teams.

The longest distance from port to site isapproximately 2500km with a bordercrossing, bridges and road widths tonavigate through.



Customer Facts

Sector: EPC

Geography: Czech Republic EMEA

Duration: 3 Month

Project Highlight Industrial Projects Scope Project Synopsis

CASE STUDYEPC - EXPANSION

Freight Tons:

10,000 FRT

12 meter pieces.


Road: all forms of trailers - low beds, tilts,mega trailers, heated & cranage

Rail: standard wagons/platforms & specialplatforms for heavy cargo

Sea: Vessel Charter

Challenges: HSSE, compliance,restricted sea/river access, monopolies,unskilled labor, local legislation &authorities, customs clearanceprocedures.

International Transportation Chartered vessels In-Country management - customs

clearance and transportation In-House Liaison in Project HQ Management (Creation, Submission and

Administration of Duty Exemption List –DEL)

The client is seeking visibility, cost controland efficient supply chain projectmanagement with the aim to shorteninglead-time through Customs, includingadministration for their DEL – DutyExemption List.

The project is located in Czech Republic - 3hours drive from Railway to Site.


This project is funded by the European Union

DORNIERCONSULTING

A project implemented by

Disclamer: This publication has been produced with the assistance of the European Union. The contents of this publication is the sole responsibility of Egis International / Dornier Consulting and can in no way be taken to reflect the views of the European Union.

Zurab Sapanadze, DHL Georgia 23

PROJECT FORWARDING EXPERTISE

MODULE C: TRANSPORT ECONOMICS AND CASE STUDIES … · DGF Industrial Projects Presentation Page 5...

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