Project logistics – Huge and heavy?

00:00:03
Gwen Dünner: Hello and welcome to a new English episode of Logistics People Talk, the official Rhenus podcast for everyone who wants to stay up to date on logistics. We are your hosts

00:00:14
Andrea Goretzki: Andrea Goretzki

00:00:15
Gwen Dünner: and Gwen Dünner. Today we are on location in Lehr on the German North Sea coast, where Rhenus operates a port logistics terminal. Across from us sit two experts for project logistics. Carsten Schröter, Global Director of Project Logistics at Rhenus, and Matthias Steffens, Head of Engineering at Rhenus Project Logistics. Thank you, both of you, for having us here in Lehr, and welcome to Logistics People Talk.

00:00:37
Carsten Schröter: Yes, welcome to my home here in Lehr, and I think we are very happy to have this episode together with you.

00:00:45
Matthias Steffens: Hi. Yes, thanks for being here and I hope we have a nice podcast.

00:00:49
Andrea Goretzki: Yes, I hope so, too. So, as you may have guessed, our topic today is project logistics. I remember an advertisement we did years ago: there was a ship carrying project cargo and above, the title said 'Heavy Metal'. That's now what I have in mind when it comes to project logistics: huge and heavy. But is it really always like this? Carsten, what exactly does a professional understand by project logistics?

00:01:19
Carsten Schröter: Heavy metal is nice and I remember this: it was a big shipment, I think to Tunisia, with two big cranes on board. So, this is part of the story, yes. This is how we, at least, see project logistics, but only part of it for sure. Nowadays, project logistics is engineering. It's mainly keeping in touch with our customers in a very close relationship and daily tasks: early in the morning, late in the evening, nearly 24/7. This is how project logistics is nowadays. Yes.

00:01:57
Matthias Steffens: Project logistics is, in my opinion, also something which is different for each customer. That's why you need to understand the demand of your customer. For some customers, project logistics means some smaller items or, for us, smaller items, shipped regularly over a year or two, and for others it's shipping a 2,000-3,000-tonne module for a gas manufacturing plant from A to B. So, we have to understand for each client what's his demand, what's his understanding of projects or heavy lift, and to fulfil this demand.

00:02:28
Gwen Dünner: Now, you've already mentioned that it is important to involve the customer as early as possible. What exactly does that mean and when do you think is the best time to do this?

00:02:38
Carsten Schröter: I think we stay in touch with our customers on a very regular basis, and I mean, just following up news from any paper or any kind of social media is not the real way to follow project logistics. Keeping in touch, talking about potential projects. Even our customers might be in a bidding stage only. It's already very helpful for us to at least get the full picture of what will happen in the future. There are plenty of examples with our big customers. I can mention a few of these, but it's mainly all the same, talking about petrochemical projects. Now, it's mainly to be in the picture, it's mainly to be in touch not only with the logistics but also with the engineering teams, to become really a partner for our customers.

00:03:27
Matthias Steffens: For us in the engineering, for example, as we are not only working for the Rhenus Group, but also can be booked directly for third parties, this also means the project can start at a very early stage, like an EPC or a big manufacturer is asking: 'What is the biggest cargo I can bring to the job site for a potential project?' So that means we can develop a route survey and check how big can, for example, the wind turbine be, which they can bring uphill to that wind farm. So before they even make their plans of what kind of wind farm they want to erect, they can start checking years before what cargo can get there. And this is something where they can involve already the RPL engineering, without having a contract with any forwarders or something like this, as a side project. Then of course, we can give the customer a big benefit over his competition to win the tender for this future project.

00:04:23
Gwen Dünner: Years in advance already! That's very early.

00:04:27
Matthias Steffens: Yes, some of the projects involve politics. Some of the projects involve very big planning and manufacturing. When you look at the chemical plant, for example, you have to develop every item. It has to fit for the chemicals they want to transfer and they want to produce there. And then they have a production phase, Carsten, of two years.

00:04:52
Carsten Schröter: It depends on the size. I mean, we are talking about big plans, and local circumstances are always different. Sometimes, they even need to prepare all the floor for these plans. That means the works do not start just with the production or with the assembling of the factory itself, but with the whole ground.

00:05:12
Matthias Steffens: Or to build a jetty somewhere. If you have a production plant somewhere near the coast or on a river, but there is no landing berths for the cargo to come, then we even have to develop a solution to build a lay-by berth or a berth where the vessel can call and things like that. So this takes time and also needs permits, and then you have the production, then you have the logistics concept. Some of our shipments are, for the whole project scope, two to three years for one project. We work several shipments already, so the pre-planning is much longer and starts way before that.

00:05:49
Gwen Dünner: Is it just pre-planning or does it even sometimes start earlier? Speaking about tender management, how does how does that work? How do you get orders or how do you get the customers to be your customers?

00:06:04
Carsten Schröter: Best case, they remember us because we have fulfilled a good job before. So we have many really long-lasting customers with our organisation, and I mean, it's a people's business, yes. It's about trust, and, next to the engineers, which we have with Matthias and his team, we also have really good local project managers, who have really big experience of 20 years or more, and they have built this trust with their customers locally. Each of our organisation consists of 15 countries and consists of at least 15 heads for these divisions in our organisation, and these people have, yes, they have the standing in the eyes of our customers. They involve us in the beginning, for example, with RFI, this is a technical kind of tender first to qualify for the real tender when it comes to pricing.

00:07:02
Gwen Dünner: Two tenders, a tender to be entered into the other tender.

00:07:06
Carsten Schröter: A kind of qualification, which is needed in the first round. There will be maybe 10 or 15 companies, at least, applying for a job, and later on, they will kick out a few and we will be hopefully in the last round of five or three. That depends and it is really case by case.

00:07:24
Matthias Steffens: For the last tenders and also for the ones we are working on at the moment, we developed a little different strategy, that means we split the tenders into a technical and a commercial part. That means, the local project team from the RPL Forwarding like Bremen or Hilden or in the US or wherever in the world will take the commercial part. We'll check with subcontractors and things like that, and we in engineering, we will provide a technical method or a development plan how this cargo can be moved. Then we send in not one, but sometimes two tender documents with the commercial and the technical part. The benefit of this also on the customer side, they have transport engineers or engineers who are not really interested in reading the commercial document, and the commercial guy is not really interested in reading the technical document, so by splitting it up, we have the best knowledge from our side in different documents, and also on the customer side, we have a very interested audience reading the documents and we avoid mixing it up. It's not for all customers that you can do this, this depends a little bit on knowing your customer. As Carsten said, we have to keep in close touch with them, but if you understand the demand of your customer, then this is also a way to share the work and also to put different knowledges and different efforts in different documents.

00:08:53
Andrea Goretzki: Matthias, you mentioned it earlier: there are many technical questions that have to be answered before a project can start. Does that mean you have your own engineering team that takes care of this, or is it also external capacities that you draw on?

00:09:11
Matthias Steffens: This is for us in our set-up, it's a mixture of both. As I said, we are our own profit centre inside the RPL. We are at the moment a team of three, with a former captain and seafarer, with a naval architect, who has also been working very long in the forwarding business. I myself am a former shipping merchant, but then trained to become a port captain and super cargo who takes care of cargo, and transport engineer, and for special tasks we have a very big team of freelance guys working with us and for us, who I've known for quite some years, also from my history at different companies. That means, we want to have the best expert for the right job. So when we have somebody to attend a loading, we can send the guy there who has done this kind of cargo several times before or knows this ship very well. When it comes to very complicated engineering and calculations stuff, we have a freelance guy we can call, and this is all for our customer very transparent, we tell them we use external staff, but it doesn't change their rate or their communication way with us, it's all through us, we recheck it and then we pass it on. So we can expand our team and close down our team as the demand needs it, to be very flexible, because we try to keep the overheads down as we are a profit centre. So we have a very big flexibility by knowing all the people and also we exchange knowledge with the people.

00:10:50
Gwen Dünner: Is every project completely different? Is that why you kind of upscale, downscale the team according to the needs?

00:10:57
Carsten Schröter: Yes, definitely. I mean the project logistics, this is maybe the main challenge, but also maybe the main motivation for our people. We do not have this day-to-day business, which allows us at least to do it only 50 per cent. It's really a job, it's a wording '24/7', but at least you need to concentrate on these projects when they are live. You'll need to be there in time, you cannot at least afford to lose time. You need to step in when the customer needs and this really means to be highly motivated. So I can really say all our people, globally, they have a special DNA. Some of them also came from the general air and ocean or general cargo business, but they decided to change because they were a bit bored maybe, don't not misunderstand that please, but they were really excited about having more of the big stuff and more the complicated stuff.

00:12:00
Matthias Steffens: Yes. This is something which is really unique, because you feel in the industry, not only in our company, but in the whole project and heavy-lift industry, like when you are on the fairs, like the Break Bulk, you feel a real special passion. That means everybody who's doing this, is doing this because he likes it, he likes this challenge every day. He likes finding a way to ship a container from A to B when there are no containers in the market, which can also be a very difficult project, especially nowadays. On the other hand, for example, we as engineering just supported a project here in Germany, where we loaded cargo with 110 metres length and 2,100 tonnes unit weight. So it's from small to large, everything, but it's always complex and if you just want nine to five or if you just want to follow standards and procedures and work like that, you can't mix these two and you can't find a solution. You have to have this passion, you have to have a lot of knowledge. You can't learn it in school, you can't learn it from scratch, it has all to do with experience, with talking to people, with learning from others, even from competition. You have to be in exchange, you have to talk to them. And, yes, the passion drives, I think, everybody in the industry, right?

00:13:17
Carsten Schröter: Correct.

00:13:18
Gwen Dünner: Yes. Okay. So, you know, we've talked about tender management. Let's say now that you've been successful, you've won the tender. Yes. So, Matthias, what is the next step? Can you give us an overview of, like, what does the transport look like, What does the project process look like?

00:13:38
Matthias Steffens: Yes, for us in the engineering, as I said, we are more or less a key feature, but we are on the sideline. The main part starts with Carsten's teams, where they decide who will be the project manager for this, who will be the subcontractors actually physically handling the cargo, and how is the process commercially and, of course, technically safe. How this is technically done, we normally prepare in a kind of document which is called a method statement, where you can see from A to B, pick up the cargo, bring it to the first port, handle it, which cranes, which slings, who's there, are we attending, things like that. Most of the time, we also go out ourselves with the team. We write a report, not like back in the days when we wrote a PDF report, but now we report in an app that means our customers get a link, and as soon as we make a picture or post a statement, half an hour later, we always have a delay in there for a good reason, they can see directly what's happening now. Also, at the moment, I have a guy in the port doing a survey like this, and I can check on my phone and the customer can check on his phone or computer what has been done. But with this method statement, we can go on and we can show the customer what to do, and also our project colleagues can show the subcontractors what they have to do. This is the demand, this is how it's working, and we talk to the subcontractors, okay, what material do you have so we can prepare it? Sometimes we get drawings from them, otherwise, we have to produce the drawings by their hints or by their ideas ourselves. Then it goes step by step. Then the method statement will be revised by the customer: we have different ideas; can you do it like this and like that? We have the next revision and on the commercial side, they also have to take care that it makes commercially sense and that everything is in line. And then the project will start, hopefully, and the project team will more or less take over, and control that everything runs as expected and communicate with the customer, communicate with us, with the subs and have a very close contact with all project participants involved.

00:16:02
Carsten Schröter: Maybe it let us know, I mean, Matthias' team is mainly involved in the very beginning in the early stage. Later on, after negotiations and getting the job done, for us, so we have signed the contract. Then, mainly the commercial starts or at least the project manager. We really have dedicated project managers and the customer is really expecting that. They don't want to switch these teams. They want to have one, at least, key person, the key manager, and then they have at least a team or a backup for this person. This is what they expect and they don't want to talk to any other people all the time. Which is also typical for other cargo. But in project logistics, it's about the trust, again. We talk about very high value of cargo, a lot of pressure. There are penalties from their end customers and so on. There can happen a lot of things. In this case, the key project manager is a key also for us for a successful delivery. In the background, Matthias and his team still go on. They support the operations manager and they also support in regards to live reporting, in regards to method statements, and they also...

00:17:12
Matthias Steffens: Also, for example, when they decide we want to book the ship now, there's the ship available in that time frame. Engineers, can you have a look? Can you maybe check if this ship is feasible of doing the job? We check the ship, we have a database with a lot of heavy-lift and project cargo ships, otherwise we ask the carrier to provide the data. We check the ship. Yes, it's feasible. We get a stowage plan from the carrier, for example, and then they can go on and sign their charter party because otherwise maybe they'll sign a charter party for a ship, which would be not feasible for the cargo, and then you have delays and additional costs and things like that. So this is what Carsten means. We stay in the process. We are always on the sideline as consultants, you could say. So that means whenever they have a question, they give us a call or write us a Teams message nowadays also, and we are there to support.

00:18:08
Andrea Goretzki: So perhaps we can now have a look at some of the current challenges in this field. You already mentioned the shortage of containers, but there are others, for example, changes in supply chains. What about project logistics? Carsten, do you have the same problems?

00:18:27
Carsten Schröter: The lack of capacities is for sure also influencing our job. I mean, every project also consists of container volumes, but also the case currently is that multipurpose ships or heavy cargo ships are also transporting container volumes, from Asia to the continent or to the US, so the capacities are reduced. The rates currently are very much in favour of the shipping lines, but there are also chances for us. We have customers who have always stuck to container solutions and maybe flat-rate solutions, and they are now more open also to break-bulk solutions. So at the moment, we are quite successfully transporting volumes, for instance, from China to Europe and also to the Americas, with break-bulk vessels, which were, further in the past, always transported by normal container ships and, pricewise, this also needs a good overview. I mean, we can compare for sure, but also the customer has expectations. They have calculated their projects. They have a cost range, a budget and then, later on, they for sure feel a lot of pressure. I mean, the prices went up drastically. I guess that 90 per cent of the projects nowadays are running out of the budget so we need to support them at least to keep this increase as low as possible. Therefore, our ideas and our network is quite important.

00:20:02
Gwen Dünner: In this context, I also have a question that doesn't just concern logistics, but also everyone really. How do you deal with the shortage of skilled workers? Is this also a thing that is noticeable in project logistics?

00:20:15
Carsten Schröter: Daily, we face this, not only with the key persons, but also with young staff. We really like to train our people, if they are just graduated from school or if they have already been in the business for ten years, it's a daily process. I mean, as Matthias mentioned earlier, we need to train our people, we need to at least bring them into a position to grow. And this is also something which is really getting confirmed in our air & ocean ideas, which we all follow. It's a matter of fact that we cannot find the cheap people on the road any more. The people have a value and our employees all know about that, and we try to keep them highly motivated by developing them, giving them opportunities to grow. And also it brings us into a position for the company itself to grow. I mean, it's a win-win for both sides. For sure, competition is strong and for sure, nowadays, the headhunters are really on top, they really try to catch our good people. So it's not only about the money, it's also about team spirit and, I mean, to bring this Rhenus idea into all these people.

00:21:32
Matthias Steffens: Training is really an important aspect. We see the lack of knowledge in some parts of the industry growing, for example, on the stevedoring side, more and more cargo is going to containers. That means experienced stevedores handling break-bulk cargo, heavy-lift cargo, are getting less and less, even in ports like Antwerp, for example. On the other hand, there was this downside in the shipping industry for ten years where they didn't earn much money, and nobody was training people because, also in Rhenus project logistics, people coming from the shipping side are very interested. They have a different point of view, but there are not too many. Now with the market booming, the shipping guys are desperately looking for employees themselves. But on the training aspect, as I said, you need to have a passion, you need to develop a passion. And there is a very big learning curve. That means you have to find somebody who is motivated in the long term. It's like learning to ride a bike. So you can't just hop on the bike and start, you have to have somebody who is really in the passion to learn something to see afterwards: I want to be in that business. I want to be in that area. I want to have every day new challenges. I want to move this big cargo. I want to see that. I want to be with it, but I need three, five, six years for that. I need to learn to talk to people and things like that. So finding younger guys to train them must be someone who understands. He can't just sit at a desk and be in a position where he makes decisions from day one or something. This is very difficult nowadays because some young people have demands and they want something, which is good, but in our industry, the learning curve is quite long, I would say, right?

00:23:26
Carsten Schröter: Yes, as a side note, maybe, also the young people nowadays are different than 20 years back.

00:23:31
Matthias Steffens: That's what they always say...

00:23:31
Carsten Schröter: Young people 20 years ago, they were..

00:23:33
Gwen Dünner: That's what they said about us.

00:23:34
Carsten Schröter: I don't know, but it's mainly about the young people graduating, maybe of five years experience, yes. They are settled. They have a family. They have a house. I mean, for us in project logistics, it's also very important to have the international kind of experience. To go out from home, from mummy, move to Asia, move to the US, move to Africa, wherever. There are opportunities in the Rhenus Group, we can set up offices, we can set up teams for project logistics worldwide. We are always following our customers' demands, but still we can also send our people there. It's not easy to find these people that flexible. I mean, we are not talking about a six weeks, a kind of traineeship. I'm talking about at least two years, for instance, because you need that time to also implement all this in your day-to-day work.

00:24:29
Gwen Dünner: I just have a supplementary question. You mentioned stevedoring just before and, you know, I think that is kind of securing the cargo, right? Like lashing and..

00:24:38
Matthias Steffens: Yes, lashing is sometimes a different team but actually it's loading the cargo on a ship, handling the cargo in the port.

00:24:46
Gwen Dünner: Yes. In connection with that, I just wanted to ask, like, what are these specialist skills that, you know, sometimes get lost when everything is containerised? Like, what kind of, you know, what are these specialist skills that they need to have?

00:24:58
Matthias Steffens: How to hook on the cargo, how to hook off the cargo, and as you said, also how to secure the cargo. Back in the day, there were stevedores securing cargo with 200 to 300 hundred tonnes just by dunnage in wood and putting some nails in and cutting the dunnage properly. Which is a safe way of stowage, don't get me wrong, it's one of the best ways even, by blocking this. But this knowledge how to build this inside a ship's cargo hold and things like that, this is fading out a little bit so.

00:25:27
Gwen Dünner: A couple of years ago, I was in Cuxhaven and I remember that while we were just looking at those, you know, they have paper and pulp and those kind of things, but then also some project cargo as well. And I remember, like, we turned a corner in this, you know, roofed storage area and there were these guys hanging from the ceiling, you know, securing cargo while abseiling, basically. So those kinds of things are unusual obviously.

00:25:55
Carsten Schröter: I think that's also one of the things I mean - the practical know-how, yes. The practical at least footprint which the people need, and this kind of people, they really they are more or less gone.

00:26:10
Matthias Steffens: Or too old to climb.

00:26:12
Carsten Schröter: Or too old to climb. This is also a reason.

00:26:13
Gwen Dünner: We need the young guys.

00:26:17
Carsten Schröter: It's also a matter of fact. I mean, we have lack of people in trucking. We have a lack of people also in barging, yes. And we have definitely also a lack of people in the ports.

00:26:26
Matthias Steffens: And a lack of water in barging.

00:26:28
Carsten Schröter: Currently, at the River Rhine, yes.

00:26:32
Andrea Goretzki: Now we've talked a lot about problems and challenges, but in order to reach a more positive conclusion, what do you both love about project logistics and what kind of person would you have to be to love it as much as you do?

00:26:47
Matthias Steffens: Yes, as I mentioned before, I love the passion and what I really love is the community. So I went to several companies before I went to Rhenus, and still when you go to the Break Bulk fair or when I visit Carsten in Lehr, I can visit my old colleagues. You are always in touch with old colleagues. You are in touch with the whole industry. If it's a competitor, if it's a subcontractor from you, if it's a customer, it doesn't matter. You exchange, you talk to people. It was like, yes, some years back, before I had kids, when we were sitting at a bar with some friends of mine, many of them are in the shipping and forwarding business. My wife and the others who are not in the industry, after half an hour they were totally annoyed, can you stop talking about the job? We are here now, it's Friday night and for us it was like, no, it's our life we like it, it's fun. And I think this is a very good example of how you feel in this industry because when you really have the passion, you really like it, you like the people, they are kind of kind of special, I would say, in a good way and in a bad way. But, yes, and you have every day something new. You can, when you are in the port or on the job site, you can play with big toys. There are cranes lifting 1,000 tonnes, there are trailers with 200 axle lines. So yes, there's so much interesting stuff.

00:28:12
Carsten Schröter: As per my opinion, maybe to add that it's to stay a kid somehow. I mean, that's why I mentioned that, we are talking about the really big stuff. Everyone, especially the boys, we always played with cranes and all this stuff in the past, and this is something which we have now, more or less not on a day-to-day basis, but quite frequently. And these challenges, I mean, who doesn't want to be challenged, huh? I mean, we want to at least fulfil targets. We want to reach goals. And this is, I think, something which is really also triggering me, and maybe also to add the team spirit globally. We have all our people globally and they are so much somehow into the yes day and the cooperation in between the teams. We have social media at least follow us, after one and a half years, 7,000 people following us, and this is really a community. You meet these people, they talk to you and even competitors like your posts. This is also something which is nice to see. It's not only about competition, it's also about somehow an exchange of knowledge, of information, and friendship sometimes, and sometimes really friendship after such a long time. I started my career at 34 years back in shipping, so I'm a child of shipping and with different types of cargo over the years, but I never left the port, so it's something which I really enjoy.

00:29:41
Matthias Steffens: You can see that the community in the heavy-lift and project area is really small and you see it on the fairs, like I mentioned on the Break Bulk or something. But also when you switch on the TV there are series like Mega Carriers, Discovery Channel is reporting this, many people are watching this and seeing this on the TV. For us, it's our daily life. So yes, it's really nice.

00:30:07
Gwen Dünner: Oh, cool. Yes, that certainly really doesn't sound like your usual nine-to-five day job.

00:30:14
Matthias Steffens: I wish.

00:30:16
Gwen Dünner: Yes. To all our listeners, if you are looking for an exciting job, I'm sure you can contact Carsten and Matthias.

00:30:23
Carsten Schröter: Yes, sure. We would be happy. I mean, at several times we have hirings. Yes, we are really looking for people who are interested. Yes, sometimes there is some background missing. But we should not be shy. Everyone can learn that, and I think also everybody will, at least after a couple of days, already feel that there's something different.

00:30:52
Gwen Dünner: Okay, so yes, that already concludes our episode today. Carsten and Matthias, it was really a true pleasure to be here and experience some of your day-to-day activities. Yes, I hope we were able to translate this for our listeners. Thank you for having us here.

00:31:08
Matthias Steffens: Thank you for being here.

00:31:09
Carsten Schröter: You're most welcome. It was nice to meet you in person.

00:31:12
Andrea Goretzki: Thank you both, and thank you also to our listeners. We hope you have enjoyed this episode. If you liked it or if you have ideas for new topics, please leave us a comment on our LinkedIn posts or on our blog Logistics People Community. You can also subscribe to Logistics People Talk on Spotify or wherever you listen to podcasts. Stay safe out there and tune in next time. We are your hosts.

00:31:40
Gwen Dünner: Gwen Dünner

00:31:40
Andrea Goretzki: and Andrea Goretzki.