MONSANTO, CARRIERS COOPERATE TO STREAMLINE TRANSPORTATION

MONSANTO, CARRIERS COOPERATE TO STREAMLINE TRANSPORTATION

Monsanto Chemical Co. saved money in 1987 by reconfiguring barge movements and streamlining other transportation modes under a new partnership program with barge lines and other carriers.

Richard L. Toler, Monsanto's domestic water transportation manager, said the new program with the barge carriers has improved communications and reduced delays in moving raw materials to Monsanto plants. In the process, Monsanto has adopted a number of changes the barge carriers themselves suggested.Monsanto spends about $16 million a year to move raw materials from suppliers to chemical production plants located on the inland waterway system. About 20 percent of the raw materials used by Monsanto plants move by barge.

While barge freight rates remain depressed, Monsanto must calculate into the transportation equation the cost of storing raw materials at the plants and maintenance of the barge dock.

Mr. Toler said it typically takes seven to 11 days to move the inventory along the inland waterway system and that timing also must be considered. When you get through with those, surprisingly, rail is extremely competitive, he said.

In 1986, Monsanto kicked off a new program, dubbed Total Quality, Total Partnership,to get its transportation carriers - barge, rail and truck - more involved in Monsanto's business. Under the ongoing plan, the carriers meet with Monsanto to learn about why particular demands are placed on them and Monsanto, in turn, learns a bit about the transportation side.

Mr. Toler said under a recent project operational delays were reduced at the Decatur, Ala., manufacturing plant. Monsanto had been moving two barge tows up the Mississippi in a single-file pattern. Instead, the tows changed to move side-by-side en route to Decatur along the Tennessee-Tombigbee Waterway, where there's no current.

Its takes less fuel, it takes less horse power on the boat . . . They go back down the Mississippi and ride the stream going down, he said. The result was a $1 million savings.

Today, Monsanto barges raw material out of the Gulf Coast and Houston area on the intercoastal waterway into Pensacola, Fla., up the Mississippi River and the Tennessee-Tombigbee Waterway into Decatur, Ala., up the Mississippi into Addison, Ohio, and out of the Gulf Coast area into Muscatine, Iowa.

Three years ago, Monsanto worked with almost 20 carriers, but the company has pared down the list to include Dixie Carriers Inc. and Hollywood Marine Inc., both in Houston; McKenzie Service Co. and International Barge Inc., both of Pensacola; American Commercial Barge Line Co., Jeffersonville, Ind; and Hines Inc., Bowling Green, Ky. A backup carrier is

Alamo Inland Marine Co., based at Houston.

While Monsanto is picky about the carriers it does business with, persistance does pay off in terms of supplier competition. Ingram Barge Co., Nashville, had been calling on Monsanto for months and was eventually allowed to bid, along with three other carriers, on a hefty contract for a $2 million to $3 million piece of business, Mr. Toler said. This pending contract is to move product in connection with an expansion of Monsanto's maleic anhydride plants. A carrier will probably be selected by May and will will have to adhere to rigid standards set by Monsanto.

Among other products moving along the waterways are acrylonitrile, anhydrous ammonia and styrene.

In directing the movements of such diverse materials on schedule, Monsanto has learned to change its own habits to help its suppliers improve services. Under the total quality program, the barge carriers said, for example, that they needed much better forecasting from Monsanto, and asked for projections on what materials were needed at which plants on a 90 to 120-day basis.

They weren't getting anything. We just said, 'Stop the tow. Take it down to Texas and tie it off. Lay it up for 30 days.' We wouldn't tell them why, Mr. Toler said. Under the new program, Monsanto now tells the carriers why certain demands are placed on them.

And benefits of choosing the most economic transportation mix lap over into other areas of corporate concern, Mr. Toler added. One of the features that usually stands out in my favor is that we consider barging transportation to be the safest method of handling hazardous chemicals. So that's a plus for us, if that's our No. 1 criteria for selection, he said.