GE Transportation: managing volatile logistics operations in the Permian Basin
There is incredible demand right now for frac sand in the Permian Basin. Frac sand suppliers are under immense pressure to get sand delivered to West Texas and New Mexico as efficiently as possible. Much of the sand comes from Wisconsin, but providers are also turning to regional sand mines for supply. This is causing coordination challenges as sand suppliers seek to balance inventory storage with rail and truck shipments. In the recent past, manual, paper-based processes led to inefficiencies, time lags, and errors. Things have rapidly changed as newer technologies have been deployed to meet rising demand and to tackle supply chain weaknesses. For example, errors at one transloading facility have dropped 82% after eliminating manual processes.
GE Transportation (NYSE:GE) has been on the cutting edge of these new tech solutions to optimize deliveries, and Freightwaves had the opportunity to speak with Rob Cooper, Principal digital product manager of GE Transportation Transport Logistics to get a sense of the challenges—and the emerging solutions.
According to Cooper, there’s a huge economic advantage in taking out the long haul and the terminal handling—going from the sand source to the well basin where the sand is needed. “We help visibility in transit, the work-flow of the inventory, and the different types of storage. Many use our rail cars. Some use a silo. Some companies ship by barge, and that’s a different asset class as far as inventory goes. Beyond contract payment to execution. There are terminal handling fee agreements. Some are thinking about cost-plus. From our side, we’re managing all those workflows,” Cooper says.
“The well site needs the right amount of sand and the right quality. If it’s not right there’s extreme risk of shutting down—at a middle point just facing penalties. That’s the challenge,” he adds.