Case Studies

Bulk Logistics

Rail Transportation and Logistics

Energy and Chemical

Logistics Infrastructure Design

Investment Strategy

Bulk Logistics — Case Studies

oil field services company

The client is one of the largest oil field services companies in North America and has experienced substantial growth due to increased use of hydraulic fracturing in frac sand mining. Their logistics function has grown dramatically despite the use of standard processes and technology. The client has been able to achieve a high level of customer service through the despite inefficiency in their supply chain, but needs to cut costs dramatically to remain cost competitive.

Scope of Services

  • Process mapping of the order fulfillment process with focus on these key processes:
    1. Supply/demand planning
    2. Order execution — internally and externally
    3. Materials logistics via rail and truck
  • Cost analysis comparison to industry best practice
  • Organization structure review and comparison to best practice
  • Current technology utilization review
  • Review of current Key Process Indicators (KPI)

PLG Action and Results

  • Process mapping designed a plan for improvement recommendations for S&OP, procurement and logistics processes including a comprehensive supply chain assessment
  • Developed a plan for outsourcing uncompetitive internal functions with large potential cost savings
  • Designed modifications to organizational structure, technology platforms and KPI’s to improve efficiency and lower costs

Investment Analysis for Bulk Liquids Terminal Company

Client is a North American bulk liquids storage and inventory management company. The client serves many of the North American major population centers and marine ports through their extensive storage terminal network. Our client requested a strategic investment analysis of specific market regions and products relative to emerging bulk liquid storage opportunities, product export markets developments, marine transport capability advancements, and client strategy alignment.

Scope of services

  • Assess and identify 3 – 8 year market demand growth opportunities in three North American market regions relative to the shale oil and gas industry developments
  • Conduct value chain analysis of select oil and gas products with optimal client capacity and capability match, increasing international export volumes, and expanding international transport capabilities
  • Provide business development recommendations on market / product combinations with priority alignment to the client’s planned expansion initiatives and with emerging / expanding export market opportunities

PLG Action and Results

  • Delivered ranking options assessment matrix detailing North American market and product combinations identified for further client detailed analysis
  • Identified client marketing actions to strengthen client recognition with potential shale oil and gas product business partners and customers
  • Completed detailed product value chain analyses on select products and rated each product as high potential or low potential for further client analysis and strategic investment optionality
  • Detailed the capacity and capability advancements and plans within the international transport market, including projected volumes by trade lanes

Rail Transportation and Logistics— Case Studies

railroad holding company

The client is a North American regional/short line railroad holding company that also provides transload and facility operations services. Client needed strategic research and detailed information that would drive actionable business development and expansion opportunities within the Client’s core short line and regional freight railroad businesses. Client was especially interested in new opportunities presented by the North American energy revolution and potential US manufacturing expansion in the coming five years.

Scope of services

  • Strategic research and detailed information that drove actionable business development and expansion opportunities within the client’s core short line and regional freight railroad business with special emphasis on hydrocarbon gas liquids (HGLs), frac sand and transmission pipe
  • Analyses of the North American transportation supply / capacity dynamics so as to target client-accessible opportunities in the areas of chemical, petrochemical and downstream industry sectors with a focus on the HGL markets; predicted manufacturing expansion impact; potential geographic expansion opportunities
  • Identification, testing and proposal of strategic options that best leverage the client’s core competencies, competitive advantages, and market opportunities, working collaboratively with client leadership to vet and challenge each option to select the most feasible and profitable option or aggregation of options

PLG Expert Analysis and Results

Identified nineteen (19) tested, actionable business development and expansion opportunities in the areas of:

  • Product-specific transload facilities (crude oil, condensates, diesel exhaust fluids and sand)
  • Multi-use transload facilities, including one anchored by transmission pipe distribution and services
  • Multi-modal facilities, incorporating rail (bulk and intermodal), truck and waterborne

U.S. Heavy Crude Refinery

The client is a U.S. refinery that traditionally had received their crude oil via ship or barge and was beginning to receive crude-by-rail from western Canada. Client needed rail commercial, operational, regulatory and compliance advice in order to ramp up their incoming crude volume safely and with more efficiency. PLG worked with Client on a series of progressive engagements over approximately two years.

Scope of Services

  • Comprehensive Rail Logistics Training Sessions
  • Rail Hazmat Tank Car Inspection and Reporting Training
  • Rail Management System RFP Management
  • Rail Management System Implementation Support
  • Supply Chain Assessment and Improvement Planning
  • Interviewing and Job Candidate Assessments

PLG Expert Analysis and Results

  • Provided rail logistics training/orientation to newly-formed rail logistics team, as well as subsequent sessions for additional personnel
  • Provided hazmat tank car inspection and reporting training to both operations and logistics personnel
  • Supported change-out of existing rail management system by devising and directing a Request for Proposal process, facilitating vendor evaluation and selection, and supporting implementation of the chosen system
  • Assessed the rail-based supply chain to evaluate rail ratability and provide strategic direction regarding sourcing and rail fleet sizing
  • On an ongoing basis, support the evaluation and selection of candidates for logistics positions

Energy and Chemical — Case Studies

chemical facility site selection

Already the market leader in resins, Eastman Chemical developed a new proprietary manufacturing technology that would allow the production of another resin with significantly lower energy and labor costs. Project V was initiated in order to select the site of a brand new resin plant, which would become the world’s largest at an annual capacity of 1.7 billion pounds. Logistics was a critical consideration for the site selection process in order to fully capitalize on the potential of the new manufacturing technology.

Scope of Services

  • Site selection project for a $1B resin plant
  • Ton-center network analysis, preliminary screening of over 40 initial prospect sites
  • On-site logistics due diligence at 12 semi-finalist sites in four states
  • Carrier negotiations, detailed cost analysis, site layout engineering at two finalist sites

PLG Expert Analysis and Results

  • Combined raw material logistics costs, demand forecast data, site operating costs, and finished goods transportation costs to develop a logistics cost model for each prospective site
  • Performed on-site logistics due diligence at 12 semi-finalist sites, including cost and risk analysis of rail routes and service, highway access, pipeline access, and port facilities; uncovered hidden risk exposures within transport modes and prospective service providers
  • Negotiated advantaged rates, service commitments, and capital investments from logistics providers as a condition of site selection
  • Designed and engineered optimized site logistics plan and transportation infrastructure for new plant, including rail access and storage, loading racks, port access, and roadways

national bulk liquids transportation company

Client needed feasible growth initiatives in all three business units, but was challenged by the current individual market conditions. Client requested strategic growth options assessments for each business unit relative to the 5 year growth projection of the unconventional oil and gas industry.

Scope of services

  • High-level analyses of the changing NA product streams for ethane/ethylene and propane/propylene, the material flow networks, and the associated bulk liquid carrier capacity density
  • High-level analyses of the transportation supply and capacity dynamics by North American region: Ports, terminals, depots, supply corridors, transloading facilities, loading facilities, and distribution centers
  • High-level analyses of emerging fracking technologies, fracking chemistries, shale deposits, sand logistics, and process supply capacities vs. to and from oil field transportation opportunities
  • High-level analysis of business threats and opportunities as shale deposits mature, oil and gas extraction practices evolve, and transportation networks develop

PLG Expert Analysis and Results

  • Identified three specific high growth product streams with concentration in the bulk truck transport market
  • Identified and prioritized seven bulk truck service regions with expansion opportunities and strong correlation to the high growth product streams
  • Identified and detailed an emerging logistics management leadership position in the oil shale regions that aligned with the client’s core competencies
  • Identified and detailed a specific geographic expansion location that directly correlated to and enabled growth in a high margin services sector within a business unit

Logistics Infrastructure Design — Case Studies

wind farm

The Power Company of Wyoming (PCW) is in final permitting stages for what will be the largest wind farm in North America. The project entails a 3 gigawatt wind farm that will require approximately 1000 turbines in a remote part of southern Wyoming. Construction is to occur over a 4 year period. Permit conditions and weather allow for a compressed annual construction schedule. Large wind turbine components and construction materials will come from remote and multiple locations. This is a complex project that will require coordination of regulatory agencies, manufacturers, transportation systems, and construction contractors. PCW retained and re-retained PLG on a series of engagements to provide logistics service guidance and engineering services.

Scope of Services

  • Supply chain feasibility and cost evaluation for up to 1000 wind turbines
  • Design cost-effective delivery plan
  • Rail yard design and engineering
  • Engineering design and signalization interaction with serving Class I railroad
  • Turbine and materials receiving yard design
  • Rail facility permitting
  • Write site plan of development and schedule for rail facility
  • Traffic engineering analysis and management planning for local roadways

PLG Expert Analysis and Results

  • Analyzed multiple locations and configurations for efficient rail receiving of turbine components and other project-related construction materials
  • Final permitted design maximizes the use of rail on the project for materials and component deliveries
  • Rail shipping of a majority of components will save client a significant percentage of their transportation costs
  • Designed intermediate receiving facility to match receiving and pad delivery schedules in a very compressed annual turbine erection window
  • Rail facility in compliance with railroad guidelines and requirements
  • Traffic management plan engineered with mitigations designed to minimize impacts on local roadways during construction
  • Rail facility has received all necessary local, state, and federal permits

Manufacturer of Calcium Products

Founded in 1907, Mississippi Lime is the most diversified producer of high quality lime and calcium based products in North America. Built on one of the world’s richest limestone reserves, Mississippi Lime has thousands of rail shipments per year with a diverse mix of car types and fleets. With complex infrastructure requirements for in-plant and outside plant storage and switching, the client needed to reduce costs and optimize the operations and efficiency of the company’s complex rail activities, procurement, assets, and physical plant. PLG was contracted and provided a comprehensive rail assessment, including benchmarking and analysis of freight spend, fleet assets, switching operations, inventory control, rail-to-barge operations, in-plant infrastructure, technology, and carrier negotiations.

Scope Of Services

  • Comprehensive Rail Assessment, including benchmarking and analysis of freight spend, fleet assets, switching operations, inventory control, rail-to-barge operations, in-plant infrastructure, technology, and carrier negotiations
  • Identify, quantify, and prioritize cost reduction and efficiency improvement initiatives
  • Develop rail strategy to support client’s commercial objectives and long-term corporate planning

PLG Expert Analysis and Results

  • Developed objective and attainable goals for seven-figure cost reductions through review of all aspects of client’s rail activities
  • Deployed PLG team and rail operations experts to investigate multiple track layout options in order to optimize overall facility efficiency
  • Designed an operating plan that resulted in labor, locomotive, fuel and rail car storage and handling cost savings at client’s flagship, and world’s largest, limestone mine
  • Developed ROI and business case for various short line strategies, including new corridor construction to expand access to new modes and markets
  • Performed needs assessment, competitive bid process and implementation assistance for new technology system to provide fleet and shipment tracking and control

Investment Strategy — Case Studies

Global Investment Firm

The Goldman Sachs Special Situations Group sought to invest in one of the leading bulk rail transloading companies in the US. Client engaged PLG for operational and commercial due diligence on the target company

Scope of services

  • Assess operational capabilities, strengths, weaknesses, and risks
  • Provide competitor overview and analysis
  • Assess market position and reputation with current and future customers
  • Identify risks and potential mitigation strategies that could preserve the deal

PLG Expert Analysis and Results

  • Provided client with thorough analysis on target’s operational capabilities and limitations
  • Helped client justify valuation through assessment of target’s market position, pricing power, and competitive barriers to entry
  • Revealed key risk area in environmental and safety practices, while concurrently developing a mitigation plan consisting of training, protocols, and auditing
  • Transaction was successfully closed and PLG was retained for post-transaction services to mitigate primary risk. PLG developed new procedures for handling hazardous materials, developed new training and documentation for hazmat transloading, and then developed and executed a program of site audits for 18 months to ensure compliance and industry best practices

Private Equity Firm

A large, global private equity firm hired PLG to perform an independent and objective due diligence analysis of a target acquisition candidate (Western U.S. barge operator). PLG was selected based on past performance with the client for diligence work of a large logistics provider acquisition. PLG leveraged their broad talent network to bring specific market experts to analyze the current and future regional logistics market for the target’s three highest value commodities. PLG’s research was critical assistance for the client’s valuation and offer process.

Scope of Services

  • Reviewed and analyzed information provided via target’s data room
  • Provided in-depth market analysis of three key commodities that target company handled including addressable market size and potential modal share
  • Provided high-level market analysis for three additional commodities
  • Assessed competitive market dynamics with existing competition and potential new entrants

PLG Expert Analysis and Results

PLG’s work provided client with specific risk and opportunity analysis for the major commodities including current supply and demand market conditions, supply/demand balance conclusions, and future competitive landscape. PLG provided client with specific market and target growth analysis to enable client to finalize offer process.

Experience · Expertise · Excellence