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Following last year’s insightful discussion on the chemical logistics market in Southeast Asia, we reconnect with Jochen Krapp, Regional Director for South Asia and the Middle East, to review the ongoing developments and the future outlook for the industry.
Reflecting on the Past Year:
Q: Last year, you mentioned that the demand for chemical transportation in the region was stable despite macro-economic challenges and highlighted the importance of understanding these factors. How has the market evolved over the past year? Have there been any significant changes or new challenges, and how have they influenced the demand for chemical transportation?
A: Indeed, last year we saw stability in demand, and that resilience has continued even through a turbulent year. The ongoing disruptions in shipping, particularly due to the Red Sea crisis, and the high-interest rate environment, coupled with geopolitical tensions, have certainly posed challenges. However, our ability to adapt has kept demand for our products and services strong. This resilience is a testament to the robustness of the Southeast Asia market, underscoring its strategic importance in the global chemical logistics landscape. Despite these macro-economic pressures, we have remained agile, ensuring that we continue to meet the needs of our clients effectively.
Equipment Shortages and Competition:
Q: Last year, you pointed out a shortage of equipment and increased competition in certain countries. Has this situation improved, or have there been further complications?
A: Unfortunately, the situation with tank shortages across Asia remains unchanged, and we anticipate it could worsen. Longer transit times on vessels, largely driven by the disruptions in the Red Sea, are exacerbating the problem. In addition, we have observed local tank operators shifting their focus from Deepsea to Intra-Asia due to low rate levels into Asia, especially from Europe. This continues to be a critical area where we must focus our efforts to be able to supply sufficient equipment to our customers in the region.
Operational Strategies:
Q: You had planned to grow a dedicated Intra Asia fleet to enhance supply reliability. How has this strategy fared, and are there plans to expand further?
A: Our focus on the Intra Asia operations remains. The strategy has been effective in addressing supply reliability, especially in light of the longer transit times caused by the Red Sea disruptions. As a result, we remain committed to our approach and are considering growing the fleet further.
Depot Congestion:
Q: Depot congestion was a significant issue last year. Have there been any improvements, and what steps has Suttons taken to address this?
A: We’ve made significant strides in this area by enhancing our partnerships with the cleaning stations. By creating synergies and working closely with them, we’ve developed solutions to mitigate congestion and ensure faster tank turnaround. Our “preferred partners” scheme is a key initiative that’s helping us manage this issue more effectively, ensuring smoother operations for our customers.
Customer Feedback and Satisfaction:
Q: Last year, you implemented regular net promoter surveys to gauge customer satisfaction. How has this impacted your service delivery?
A: The feedback has been invaluable, particularly in Southeast Asia, where we’ve seen consistently high satisfaction scores. This positive reception encourages us to continue refining our services, ensuring that we not only meet but exceed customer expectations in this dynamic market.
Team and Network Expansion:
Q: You previously mentioned strengthening your teams and expanding your network. How have these efforts progressed over the past year?
A: While there haven’t been significant changes in our network, we’ve focused on keeping our teams highly engaged. Through regular engagement surveys, we gather feedback, identify areas for improvement, and ensure we have the right people in the right roles. This internal focus has been critical in maintaining our operational excellence.
Sustainability Initiatives:
Q: Given the growing focus on environmental responsibility, has Suttons introduced any new sustainability initiatives?
A: Sustainability is a key focus for us. We’ve made progress on our Ecovadis scores and are working on an ESG report, spearheaded by our SHEQ department. These initiatives reflect our commitment to environmental responsibility and sustainable practices in logistics.
Future Outlook:
Q: Looking ahead, what do you see as the key opportunities and challenges for the chemical logistics industry in Southeast Asia?
A: We’re cautiously optimistic about the future. A potential lower interest rate environment could boost demand in the chemical sector. Additionally, with GDP in the region expected to remain stable, we’re on course for a successful financial year in South Asia. However, we must remain vigilant in managing the challenges posed by ongoing global disruptions.
Partnerships and Collaborations:
Q: Finally, have there been any new partnerships or collaborations that have significantly impacted your operations in Southeast Asia?
A: Our strategic collaborations remain a cornerstone of our success. We continue to work closely with our key customers and partners in the region, which helps us manage upcoming challenges and mitigate unforeseen risks. These partnerships are crucial as we navigate the complexities of the current market environment.
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