Multidisciplinary engineering consultancy company Hatch Goba, in collaboration with third-party service providers, has successfully executed the delivery of project cargo in excess of three-million freight tons in the last five years to a variety of challenging destinations.

Delivery to sites in terrain ranging from the Canadian Arctic and the Sahara Desert to the forests of Central Africa often demands multimodal solutions such as barge beach-landing and vessel-to-barge transfers.

Early planning is important for remotely located projects, notes Hatch Goba director Francois du Toit.

“In many cases, this could be the difference between making or breaking the project. Global pressure within the mining, metals, power, oil and gas, energy and infrastructure development industries creates a great need for successful logistics implementation.

“Damaged or late materials and equipment can have a negative effect on a project’s schedule and the client’s bottom line. It is crucial for the client to have project logistics management support as part of the project team to ensure that the benefits envisaged by global sourcing are realised and both project cost and schedule are achieved,” he says.

There are several factors to consider in developing global suppliers, such as global sourcing that can lower costs without compromising quality and schedule. Consolidation and optimisation of the supply chain can further reduce costs. Also, proper materials management can provide visibility, which supports the construction schedule. Finally, modularisation and preassembled designs help reduce the complexity of work on site.

Du Toit adds that the Hatch Goba logistics team spends a considerable amount of time on developing an integrated logistics execution plan to ensure the optimal solution is developed for a project.

“This provides a clear understanding of logistical constraints on the project to all parties concerned, as well as a clearly defined strategy and plan to deliver the materials and equipment from the supplier to the site. Throughout the development of the logistics execution plan, it is critical to explore all options and solutions available to the project, with particular emphasis on innovative, cost-effective and practical solutions.

“Further, it is important to maintain a balance between the theoretical, practical and sustainable aspects of each project, and to think critically so that solutions are tailor-made for each project. Simultaneously, past experience must play a role in developing and executing the optimal plan,” he says.

There is a global drive within Hatch Goba to develop differentiating solutions, of which modularisation can offer a beneficial solution to companies, says Du Toit, adding that Hatch Goba provides an applied approach to modularisation, which has been well received by its clients.

Off-site modularisation and/or preassembly construction offers a solution to many projects which experience delays owing to the need for development of site access routes, pending the results of environmental-impact assessments and/or local community-related matters.

“However, it is important to consider the logistical constraints of any modular design, such as the transportable package, to ensure that the design is suited for on-site delivery,” says Du Toit.

To effectively manage freight logistics costs for materials and equipment, it is critical to adhere to international trade terms. Du Toit asserts that it is important to develop synergy between the engineered requirement, the procurement experts sourcing the materials and equipment, the logistics support operations, the site materials control and the on-site construction discipline.

“If suppliers’ delivery terms are not linked to international contract terms, or Incoterms, a number of complications can arise. This is especially the case if delivery arrangements are left in the hands of suppliers that are not familiar with the challenges of remotely located sites,” says Du Toit.

Hatch Goba manages the entire materials and equipment procurement process and acts for and on behalf of the client. The company ensures that the most suitable and capable third-party logistics service provider is on board and is appointed to support the project execution phase and that the Incoterms used are most suitable for the shipment.

Du Toit notes that Free Carrier (FCA) delivery terms – place of delivery named, either FCA vendor’s works or FCA point of export – apply under the majority of Incoterms. “This provides the client with optimal control and also offers benefits such no value-added tax payable in the country of origin, transparent and known freight costs, control of the mode of transport and compliance with insurance underwriter requirements.”

As a guide, key logistics factors to take into account during the front-end engineering design and, ultimately, the execution phase of projects are the:

• Remoteness of the job site;
• Fabrication locations of preassembly and modular yard facilities, and the related freight cost affecting the choice of the optimal fabrication point;
• Sensitivity of cargo, marine and in-transit insurance requirements;
• Port and infrastructure conditions on the supply chain route;
• Routings, carriers and transit schedules;
• Freight forwarder, packaging contrac- tors and harmonised system tariff-code consultants;
• Local customs regulations and phytosanitary requirements;
• Consolidation and improved efficiency of multimodal transportation resources;
• Inland transportation infrastructure and equipment (port of entry to job site);
• Land, air and marine operations;
• Determination of the transportable package – maximum size and weight – in support of engineering design;
• Identification and development of specialised equipment solutions and sourcing of specialised transportation equipment; and
• Coordination with the construction team – required on-site dates.

During the conceptual and prefeasibility phases for international remote projects with a more extensive freight scope, the cost of freight should be factored as a percentage of the total material and equipment cost, explains Du Toit.

“This factor is a function of the scope of freight and should be based and developed on historical data. This would include location, scope and execution of the project; source of materials and equipment; logistics execution plan; and warehousing and special handling.”