Steel Cost Reduction and Efficiency Increase Return to the Theme of Development, Steel Logistics is the Key Link

China steel logistics

In 2022, the steel industry had been hit hard. Facing the intensifying global geopolitical conflicts, slowing economic growth, and complex and severe international trade, the development of China’s iron and steel industry has generally shown a downward trend. Wang Lijuan, vice president of the Metallurgical Industry Planning and Research Institute, pointed out that at this stage, cost reduction and efficiency increase have returned to the development theme of the steel industry, of which logistics is an important part.

Steel logistics is pushed to the fore in the special period

steel logistics

After the stage of quantity and scale development, China’s iron and steel industry has entered the three-phase superimposed high-quality stage of “accelerated reorganization, enhanced environmental protection and low-carbon development”. Driven by control, oriented by low-carbon transformation, and intelligent manufacturing as a measure, it will develop in an all-around way in the direction of high quantity. Among them, intelligent manufacturing is one of the important technical paths for the iron and steel industry to achieve green, low-carbon, and high-quantity development.

The iron and steel industry is a process industry, and the high-quality and high-quality development of logistics must run through the entire process of iron and steel production. Among the ten key tasks to promote the high-quality development of logistics, it is mentioned “implementation of logistics intelligent transformation action”, “implementation of railway freight increment action”, “reduction of railway freight rate level”, “innovation of logistics land use support policy” and other work, respectively for China’s logistics intelligence, transportation guarantee, logistics cost reduction, and the construction of logistics parks have provided good support. Among them, site selection, overall layout optimization, and logistics facility optimization; logistics management optimization is a necessary means; logistics information planning and construction and standardization guidance are important supports; the factory environment promotion is a sustainable development path.

The situation of steel logistics

Steel-Cost-Reduction-and-Efficiency-Increase

At the specific operational level of the high-quality development of steel logistics, it mainly includes the following aspects: in ports, railways, and other transportation systems, integration has become the main theme. In recent years, the integration of regional ports has accelerated significantly, the situation of “one province, one port” has gradually formed, and the operation of the national railway has progressed rapidly.

Road transportation occupies the largest proportion of steel logistics. The establishment of a standardized and intelligent platform, factory management, low-carbon emission, and clean transportation are all the focus of building smart steel logistics. Controlling overcrowding in the highway system and implementing the National VI emissions are all important means.

The steel logistics should also be green logistics. The green development of the transportation sector is imperative. Winning the battle to defend the blue sky, promoting the three-year action plan for the adjustment of the transportation structure, and vigorously developing the construction of special railway lines for enterprises are important parts of it.

In the process of ultra-low emissions of the steel industry, clean transformation is an important sector. The new environmental protection situation puts forward new requirements for iron and steel logistics. Iron and steel enterprises should pay attention to transportation outside the factory, management of ex-factory vehicles, and improvement of transportation links in the factory.

At the same time, low-carbon logistics should be vigorously promoted. From a macro perspective, according to IEA data, carbon emissions in China’s transportation sector accounted for 9.7% of the country’s total terminal carbon emissions, of which road transportation accounted for 84.3%, water transportation accounted for 5.4%, and railways accounted for 1.3%. At the micro level, according to incomplete statistics, the carbon dioxide emissions in the internal and external logistics and transportation links of iron and steel enterprises account for 5%-8% of the total emissions of iron and steel enterprises, of which automobile transportation accounts for more than 90%, and the others are railways transportation, water transportation, and some pipelines transportation.

Countermeasures for high-quality development of logistics

Including project site selection, general plan payout optimization, logistics facility optimization, logistics management optimization, logistics information construction, standardization guidance, factory environment improvement, ultra-low emissions clean transportation, low-carbon development, etc.

The optimization of logistics facilities and equipment is a necessary means to improve logistics efficiency, while the integration and optimization of logistics management and refined management and control are the benefits of management. The real promotion of logistics management KPI performance can make logistics improvement detailed and practical. The standardization of steel logistics involves all aspects of the steel logistics supply chain, including procurement links, production links, sales links, logistics management, and logistics capital possession links. It is of great significance to build a steel logistics standardization system and play the leading role in steel logistics standards.

In addition, to build enterprise intelligent logistics by means of information promotion. Through intelligent technologies and means such as intelligent hardware, the Internet of Things, and big data, the analysis and decision-making, and intelligent execution capabilities of the iron and steel logistics system can be improved, and the automation, digitization, and intelligence level of the entire iron and steel industry logistics system can be improved. Waiting for pain points to achieve cost reduction and efficiency increase. Relying on comprehensive intelligent logistics integrates warehousing management, transportation management, logistics equipment (transportation, warehousing) management, and logistics personal management to achieve effective support for the production and operation of enterprises.

Faced with a downward price index, declining output, and declining profitability, steel companies in the entire industry should assess the situation and take “cleaning the situation, setting measures, fighting crises, and ensuring survival” as the strategic positioning for the second half of the year and the next 3-5 years. Reducing costs and increasing efficiency, reducing expenditures and tapping potentials, and streamlining logistics are measures that are “visible and tangible”.