Industrial Mineral Transportation and Marketing (Part 2) James M. Barker Bureau of Geology and Mineral Resources A Division of New Mexico Tech 801 Leroy Place Socorro, NM 87801 USA

Key Concepts The Marketing Concept Just-in time Delivery Quality Retention Proactivity Expertise at all levels Global Customer Service

Industrial Mineral Export Competition Competitors near your distant market Pricing pressure Substitutes Political and cultural differences Communication problems Currency fluctuations Trade finance restrictions Transport imbalances

The Marketing Concept Used by some at least since the 1950’s Opposite of the technical approach Engineers develop product Sales force then convinces customers to buy Uses the people-oriented approach Sales force determines customer needs Engineers design product (with enhancements) Know customers, customer’s customers, and competition, plus all market factors

Transportation and The Marketing Concept Transport dominates IM delivered cost Customers respond to lowered cost Large transport costs often easier to lower Market location Transport mode or intermodal Contract type and negotiator Quality of service companies used Customer Service Quality retention Just-in-time delivery Proactivity

Transport modes Modes = Truck<Rail<Barge<Ship Containers ± Intermodal Stay on top of the transport market Transport market changes daily Operates 24/7 Think “outside the box” Hire a transport manager Periodic reevaluation of delivery chain Tie customer service closely to transport process

Transport Contracts Very complex area Risk is involved Rail, barge and ship contracts are tricky Use expert contract negotiators = brokers Understanding contract terminology can be crucial to success or failure Remember to focus transport contracts on customer needs as much as possible

Quality of Transport Service Companies Product handled many times during transport Long distance transport rarely all in-house Thus need brokers, traders, stevedores, service companies, etc. Value added, integrated, quality conscious Use highest quality/expertise at all stages Ensure greatest possible edge over better placed competitors

Transport Delivery Location For global market, transport can be very far Long distances = greater potential problems Intermodal Multiple handling Delays of various kinds Communication problems Some locales easier to serve than others Extra effort in difficult area can yield spectacular success to service-starved customers

Global Customer Service Global Customer Service is large undertaking Tracking all aspects at a distance is tough Need real-time data to rectify problems early Better that you solve a problem than have the customer ask “what happened” and you must ask the same question Be proactive, not reactive, at all stages of industrial mineral delivery chain

GCS continued Global trade is based on relationships, and is not entirely price driven Use local experts to limit cultural gaffes Typical problems Wrong product Transport delays and demurrage Government export-import interactions Quality damage Be there when the customer needs you

Summary Determine customer needs Meet these needs with a concerted and ongoing company-wide commitment Maintain quality and control at every stage of industrial mineral delivery chain Win customers around the globe through superior, proactive service at a distance