Why aimINSIGHT for chemical distribution?
Major products are plastics materials, alkalis and chlorine, detergents and soaps, adhesives, and industrial gases. Plastics account for almost 25 percent of industry revenue.
In addition to selling and transporting chemicals, distributors offer other services including blending, packaging, technical training, and managing customer inventories. Waste removal is a particularly common service to offer. Many suppliers specialize in certain types of chemicals.
Products are bought from manufacturers of industrial chemicals, including petroleum refiners. Multiple suppliers exist for almost all chemical products. A large distributor typically buys from several dozen chemical manufacturers, such as DuPont, Dow, and BASF. Distributors may have long-term distribution agreements with suppliers that specify quantities and price formulas. Such agreements typically renew automatically each year.
Large wholesalers have multiple facilities around the country. Brenntag has over 100 locations, Univar has about 85, and Ashland Distribution has 70. Facilities include warehouses, tank farms, and custom blending facilities, and are usually located close to major industrial areas. A typical distributor has 3 million gallons of bulk storage capacity and 350,000 square feet of warehouse space. Distributors that offer waste removal and disposal services typically operate a centralized processing facility. Chemical waste is incinerated, blended into fuels, or recycled.
Products are distributed chiefly by truck, often in mixed truckload or less-than-truckload (LTL) quantities. A typical distributor has a fleet of 50 trucks and may operate a central maintenance and fueling site.
Computer technology plays an important role in improving the efficiency of inventory and distribution operations. Computer programs and truck global positioning systems (GPS) are used to minimize truck routes. Sensing systems at customer locations can be used for automatic replenishment programs.