Issue link: https://jocdigital.uberflip.com/i/1094998
12 The Journal of Commerce | April 2019 www.joc.com Breakbulk & Project Cargo Q: How has project logistics changed over your career? It's become much more intellec- tually challenging, from both a tech- nical and commercial perspective. As the total installed cost of projects has dramatically increased over the years into the multibillions, so have the size, quantity, and complexity of equipment to be transported. Engineers continue to push the weight and dimensional limits on what can be transported, some- times to the most remote locations, or locations where the transport infrastructure doesn't support the movement of the equipment. The move to modularization has been a game-changer since my early years. When I started in project logistics, a 100- to 200-metric-ton piece was considered a heavy-lift that required weeks or months to plan. Now, it's not unusual for modules to be the height of a 10-story building and weigh 5,000 to 6,000 metric tons. It's also common now for proj- ects to exceed a million total freight tons and require transportation via every mode [air, land, sea]. The days of logistics being considered nothing more than a necessary "cost center" are long gone. Today, logistics must have a seat at the table from the earliest planning of equipment and facilities design and into project proposal participation. With the size and complexity of projects increasing, so has the spend on logistics services. It's not uncommon for very large projects to have a freight budget that approach- es a billion dollars. Not that long ago, that was the total installed cost of a "mega-project." Bechtel is the market leader in constructing mega-projects such as LNG liquefaction facilities. Such a project could have hundreds of modules in addition to other project equipment to ship, and the spend on ocean transport alone could easily be hundreds of millions. The modules could be shipped long distances, and actually require shipping the equip- ment twice. Materials required to con- struct the modules are first shipped to the [module] fabrication yard, and then the module is built and shipped to the final construction site. Extremely large modules require specialized carriers — heavy-deck or open-deck ships where the modules are rolled aboard. These vessels can be hard to find, as can the heavy-lift ships capable of accommodating the smaller modules, say in the 1,000- to 3,000-mt range, which can be lifted with ship's gear. Both types of ships are expensive to operate and must be fixed well in advance of shipment to ensure module production and delivery schedules can be met. Q: What unusual challenges do today's project logistics execu- tives face? The move to larger projects and more technical and commercial complexity has also required an up-skilling of logistics contracting prowess. Negotiating the right price with the right terms and conditions that mitigates risk to the project and maintains cost competitiveness re- quires a different level and breed of abilities than what's been required in the past. Multibillion-dollar projects can have freight budgets that are half a billion to a billion dollars. The project logistics lead is taking on that responsibility. That bud- get — that's the size of a small-cap company! It's a whole different level of responsibility; you need talent who understand how to manage a budget, to be responsible to keep the spend within or under budget while Worth the challenge Global logistics consultant Dennis Mottola looks back on big changes in project logistics By Janet Nodar Dennis Mottola Global Logistics Consultant DENNIS MOTTOLA IS a global logistics consultant who has served his entire 45-year career in the supply chain and global logistics discipline. He retired March 1 from international engineering, procurement, and construction company Bechtel Corp., where he had a variety of roles and respon- sibilities over his 21 years with the company. These included corporate manager of logistics; corporate manager of expediting; corporate manager of supplier quality; manager of Bechtel global logistics; and oil, gas and chemicals manager of logistics. Mottola was instrumental in establishing Bechtel's export/ import compliance program. His professional career in global logistics and supply chain management includes managing mega-project logistics, marine shipping operations, export packing services, and manufacturing and trading operations. He holds a Business Logistics degree from Penn State Uni- versity, in addition to completing various executive programs and professional certifications. He is a member of the University of Houston Supply Chain Logistics Technology Advisory Board.