Thought Leader: Supply Chain Crunches

By Mike Short

Renewables are expected to grow exponentially through 2022. However, the world’s demand for clean energy is running up against some hard realities in the global supply chain. Below are four key project logistics challenges we’re seeing in the renewable energy sector and how shippers can overcome them.


Special Equipment to Transport Goods

Today, the tallest wind turbine is 260 meters with blades as long as 107 meters. It’s no surprise that moving these oversized parts requires special equipment and expertise. Transporting just one wind turbine takes nine shipments, so lining up your equipment well in advance to protect your project timelines and budget is vital. Also, make sure you’re working with a project logistics provider who can flex with your needs when things change. If your freight comes into port 20 days later than expected and the trailers you counted on are tied up on another job, you’ll need your provider to flex, and quickly. Scale matters even more in a tight market.


Unpredictability in Today’s Logistics Market

The scenario where you could plan week-to-week is no longer an option. In fact, when the market is this volatile, one plan isn’t enough. Your vessel may skip a scheduled port and move on to the next, leaving your freight farther away from your project site than expected. A knowledgeable renewable energy logistics provider will have accounted for that. Switching between ports, modes or trade lanes may also be part of a more active strategy to adapt to unpredictability. For example, we’re helping some of our solar customers switch to breakbulk or roll-on, roll-off as an alternative to container ships. An ocean or air charter is another option.

When capacity is this tight, you need more foresight in planning. For shipping your wind farm components, count on booking a vessel as much as 180 days in advance and use a project logistics provider with a global suite of services so you’re not stuck without enough trailers to move your turbines and blades after they arrive.


Tighter Budgets for Renewable Energy Projects

Rising material costs and historically high freight rates can eat into the profitability of your renewable energy project. That makes it even more important to avoid unexpected costs in your project logistics. The supply chain for wind and solar farms is vast and complex, and you can go over budget quickly. For example, when you’re renting a crane for US$100,000 a day, you can’t afford for the wind turbines to be three days late.

These projects have too many moving parts and variables to try to piece it together yourself, and can expose you to too much financial risk to count on the disparate processes of multiple vendors. That expertise helps you avoid the unexpected costs that can easily erase your project’s profit margin.


Lack of Supply Chain Visibility

No one wants their supply chain to be a black hole – especially when you’re bringing in parts and equipment from across the globe, and everything needs to come together in one place in the right order at the right time.

One of the biggest favors you can do for your project is to take advantage of real-time visibility technology. It pulls data and status updates from all vendors and suppliers – plus weather, traffic, and geopolitical monitoring – to give you a real-time view of your supply chain. To keep these complex projects on track, it’s crucial to ensure that parts are where they need to be, the right transportation and specialized equipment are available, and the finished product arrives to the project site when on-the-ground teams are ready to receive and install.

Mike Short is president of global forwarding at C.H. Robinson.

PHOTOS:

Photo 1: A truck transports a wind turbine section. CREDIT: CH ROBINSON

Photo 2: Mike Short