By Lars van Wageningen, Research & Consultancy Manager
The past week in the ARA (Amsterdam-Rotterdam-Antwerp) barge freight market has been marked by a mix of strategic calm and logistical noise. From May 7 to May 12, Insights Global’s freight reports painted a picture of a market negotiating the dual pressures of terminal delays and diverging product demand, while still maintaining a relatively stable pricing environment.
Across the five days of reporting, ARA freight rates remained remarkably steady. While there were day-to-day rate adjustments on specific routes and products, the overall market tone was one of resilience rather than volatility.
Middle distillates experienced minor fluctuations, reflecting shifts in operational execution and barge availability.
Light ends, particularly gasoline and naphtha, showed stronger transactional consistency and kept rates buoyant.
Takeaway: The ARA market displayed maturity in its pricing behavior, reacting moderately to operational stressors without succumbing to major swings.
2. Light Ends Dominate Market Activity
The strongest momentum was observed in the light ends segment, with consistent volumes and transactional depth across routes:
From midweek onward, light ends consistently outpaced middle distillates in total traded volumes.
Finished gasoline and gasoline component shipments formed the backbone of this trend, showing robust demand as the summer season approached.
This demand differential also narrowed the historical spread between light ends and middle distillate freight rates.
Takeaway: ARA barge operators saw more action in gasoline logistics, highlighting the seasonal shift and refinery output alignment.
3. Persistent Logistical Bottlenecks at Terminals
A recurring theme throughout the week was the influence of terminal delays—particularly in Antwerp and Amsterdam—on freight negotiations and barge deployment.
Barge operators reported growing difficulties in planning and execution, with extended waiting times hampering day-to-day flexibility.
These delays added an invisible layer of cost and complexity, often limiting the number of new fixtures that could be concluded on any given day.
Takeaway: Infrastructure challenges are not only slowing operations but also muting market responsiveness. Freight deals were often shaped more by availability than by appetite.
4. Supply Constraints Cushion Against Demand Dip
Interestingly, while some freighters reported lower incoming requests, this was counterbalanced by limited availability of vessels ready for prompt loading. The result was a functional equilibrium that helped:
Maintain upward momentum in middle distillate rates on certain days (notably May 8).
Keep light ends rates stable despite an increase in cargo availability and fixture activity.
Takeaway: Even in the face of reduced demand, tight supply dynamics kept rates from softening significantly—underscoring the importance of barge positioning in short-sea logistics.
5. Weekends Bring Volume, Not Volatility
The week closed with a healthy volume of fixtures, particularly in the light ends category. Despite this, the market did not see large price adjustments—indicating that supply and demand are reasonably well-aligned for now.
Friday (May 9) and Monday (May 12) were both busy in terms of concluded deals, but neither saw dramatic shifts in price levels.
Freight rates on high-traffic corridors like Rotterdam–Antwerp and Ghent–Amsterdam held firm.
Takeaway: The freight market may be bracing for change, but for now, it’s moving with caution and control.
Conclusion: Operational Efficiency Over Opportunism
This past week in the ARA barge market showcased a logistics-driven equilibrium, where freight rates served more as a reflection of operational constraints than speculative price swings. For industry professionals, the key signals to monitor going forward will be:
Terminal throughput normalization, which could unlock more flexible freight supply.
Seasonal shifts in product demand, especially for motor fuels.
How operators balance vessel availability with reliability concerns.
In a climate where logistical execution increasingly determines commercial outcomes, staying close to the market pulse through platforms like Insights Global’s Barge INSIGHTS will be critical for forward planning.
By Lars van Wageningen, Research & Consultancy Manager
Over the past week, the Rhine barge freight market has demonstrated a delicate balance between operational resilience and environmental volatility. Insights Global’s daily freight reports from May 7 to May 12 reveal a market where water levels, logistical challenges, and booking behaviors shaped a nuanced trading environment. Below, we explore the main developments and what they signal for barge operators and traders moving forward.
1. Market Stability Masking Tactical Adjustments
At a glance, rates remained relatively stable throughout the week for most destinations, with only marginal day-to-day adjustments. However, a deeper look shows that this stability is underpinned by a series of tactical decisions by both importers and barge operators.
Early in the week, lower freight rates—particularly driven by a short-lived wave of higher water levels at Maxau—encouraged opportunistic bookings.
Later in the week, negotiations often stalled due to uncertainty about draft limitations as water levels began to recede again, affecting loaded volumes and contributing to more cautious planning.
Takeaway: The apparent calm belies a market where participants are carefully timing their engagements based on short-term hydrological shifts and terminal availability.
2. Water Levels and Freight Sensitivities
Water levels along key measuring stations like Kaub and Maxau remained a central concern. After a brief increase, forecasts indicated a consistent downward trend by week’s end, particularly at Kaub, where the draft is a critical factor for larger barges.
Water draft limitations directly impacted loadable volumes, which in turn influenced freight rates due to reduced economies of scale.
The variability in draft conditions contributed to a widening of rate differentials, especially for long-haul routes into Switzerland, where rate adjustments became more pronounced.
Takeaway: In a river system like the Rhine, where operational efficiency hinges on water depth, even minor fluctuations can result in noticeable shifts in freight economics.
3. Terminal Delays and Logistical Constraints
While ARA port congestion showed some signs of easing at the beginning of the week, significant waiting times persisted in key hubs like Amsterdam and Seatank Antwerp. As the weekend approached, new bottlenecks were reported in Bottrop and Gelsenkirchen, further complicating scheduling.
These delays continued to disrupt vessel turnaround and limited the availability of tonnage for fresh bookings.
The resulting uncertainty discouraged some participants from engaging in new freight deals, even when rates appeared attractive.
Takeaway: Port performance remains a critical external factor affecting freight market fluidity, and its ripple effect on pricing and availability should not be underestimated.
4. Basel: The Outlier Destination
Among all destinations, Basel stood out for its notable rate movements. Midweek saw a moderate correction, but by Monday, deals for Basel exhibited higher average values again, likely in response to reduced loading capacity caused by the river’s decreasing depth.
The week closed with Basel as the only destination with a marked uptick in rates, contrasting with the general trend of flat or softened pricing elsewhere.
Takeaway: Basel continues to act as a barometer for upstream logistical strain, often amplifying the effects of hydrological and operational constraints seen elsewhere on the Rhine.
5. A Week Defined by Selective Activity
With only a handful of deals concluded daily—ranging from four to eight across the week—the overall market was relatively quiet in transactional terms, but not inactive in strategic positioning.
Buyers focused on securing volumes ahead of the summer season, while barge owners looked for windows of improved loading efficiency.
Freight rates for gasoil and gasoline showed some directional divergence depending on product-specific demand and route characteristics.
Takeaway: Despite low transaction volumes, the week reflected a market in motion—quietly reshaping itself under the pressures of seasonality, river conditions, and infrastructure reliability.
Looking Ahead
As we move deeper into May, attention will remain firmly fixed on Rhine water levels and terminal throughput performance. For barging professionals, the key lies in maintaining flexibility—both in routing and in scheduling—to navigate this complex matrix of variables. In this dynamic environment, being well-informed is not just advantageous—it’s essential. As always, Insights Global continues to monitor and interpret these movements to support smarter, faster, and more resilient decisions in liquid bulk logistics.
As of April 2025, Europe’s refining industry is navigating a landscape of further diminishing margins, influenced by a combination of economic pressures, policy shifts, and global competition. This downturn is prompting significant strategic adjustments within the sector, which is already coping with various closures seen in the past months and more to come for 2025 and beyond.
Current State of European Refining Margins
In 2024, European refining margins experienced a notable decline. Northwest Europe’s ultra-low sulphur diesel margins, for instance, decreased from $42 per barrel in 2022 to $29.71 per barrel in 2023. Its cracking margins remained on low levels during 2023 and 2024 which means the region could no longer remain competitive compared to other key regions. This downward trend is also attributed to factors such as reduced local European demand due to the energy transition and electrification, increasing competition from new refineries worldwide, and elevated operating costs stemming from stricter emissions regulations.
Potential Consequences
The sustained pressure on margins is leading to significant restructuring. For example, ExxonMobil announced plans to downsize operations at its Port-Jerome complex in France while BP is scaling back its Gelsenkirchen refinery in Germany by a third (and open for interested buyers to acquire the facility). Ineos will shut down its Grangemouth refining this spring and Shell has turned off the crude distillation units at its Rheinland Wesseling site in March, which could drop total refining capacity in the Northwest European region by 650.000 bpd. This could weaken the European competitiveness of the region and increases its reliance on imports from other regions, increasing vulnerability to and volatility of prices, product availability and importance of the supply chain.
The introduction of tariffs and changing trade policies are reshaping global oil flows. European refiners may find opportunities in markets previously dominated by U.S. exports, but also face heightened competition from new refineries in regions like West Africa (Nigeria, Angola) and Latin America (Mexico, Argentina). This is already leading to a downturn in gasoline export out of key hubs in ARA and a steady flow of (more cost-effective) jet fuel from Nigeria’s Dangote refinery to the US Gulf Coast.
European refiners are increasingly investing in renewable energy projects to align with the energy transition. However, falling profits are testing the viability of these green initiatives, with various projects facing delays or cancellations due to economic constraints. The latest examples include postponing SAF production by BP in its Spanish refinery and various (green) hydrogen initiatives in the region.
In conclusion, Europe’s refining sector is at a pivotal juncture, contending with declining margins and the obligation to adapt to a rapidly evolving global energy landscape. Strategic decisions made now will be crucial in determining the future resilience and competitiveness of the industry.
Upcoming Webinar (May 27th, 2025)
Barge volumes, prices, & disruption: navigating the impact of NW Europe refinery closures
Refinery closures in North-West Europe are triggering significant shifts across the liquid bulk supply chain. With capacity reductions and structural changes taking place, market participants are facing growing uncertainty in product availability, trade flows, and barge utilization.
As the global push for decarbonization accelerates, clean ammonia has emerged as one of the most promising hydrogen carriers. Yet, beneath the optimism lies a complex and uneven market landscape—especially for those in the tank terminal industry.
During the Clean Ammonia Storage Conference in March 2025, we shared critical insights on the current state and future of clean ammonia, with a focus on storage dynamics. Here’s what tank terminal professionals need to know now.
Clean ammonia today: trade is decreasing
Ammonia is primarily used in fertilizer production—but clean ammonia (produced with renewable energy or low-carbon hydrogen) is increasingly eyed for applications in power generation, shipping fuel, and as a key enabler of the hydrogen economy.
Global demand has remained stable, with significant import needs across Asia, North-Africa, Europe, and North America. Independent storage infrastructure is still small compared to global trade of 15Mton. Our research shows that current global ammonia tank terminal capacity sits at approximately 1.35 million cbm, with Europe holding the largest share.
Trade flows are evolving—but terminal readiness is uneven
Ammonia trade flows remain concentrated, with major exports from countries like Trinidad and Tobago, Saudi Arabia, and Indonesia. Imports are dominated by India, Morocco, and the U.S.. This concerns mainly gray ammonia, produced from fossil fuels. The big promise is the development of green ammonia supply chains as part of the energy transition.
However, many planned terminal projects, aimed at facilitating these green ammonia flows, remain in early development stages—often lacking final investment decisions (FIDs), clear start dates, or capacity details. According to plans a wave of projects will come online between 2026 and 2030, adding at least 0.9 million cbm of capacity, particularly in Europe.
Market headwinds: Project realization rates are low
Despite aggressive decarbonization goals, less than 10% of green ammonia and hydrogen projects have been realized so far. Why? High production costs, limited offtake commitments, and an overall lack of willingness to pay premium prices.
Adding to the challenging investment environment is the recently installed Trump administration which is reshuffling priorities away from the energy transition to “drill-baby-drill”.
For tank terminal stakeholders, this translates into uncertainty—but also opportunity. The market may be slower than hoped or go in other directions, but those who anticipate infrastructure needs now stand to benefit most when momentum returns.
What’s next for tank terminals?
Terminal operators should carefully monitor developments in:
Storage players with flexibility and the ability to scale quickly will be best positioned to support the evolving ammonia supply chain.
Get the tools to stay ahead
At TankTerminals.com, we track ammonia terminal projects worldwide—planned, operational, and everything in between. Our platform gives professionals a data-driven edge in planning, benchmarking, and opportunity spotting.
The European liquid bulk sector, consisting of tank storage, tanker vessel and barging transport logistics, is dependent on global trade and is therefore influenced by geopolitics. Looking at current developments we conclude that there is a shift from globalization to global competition. The three major economic blocks, the US, China and the EU, are increasingly competing for economic power. In this race the EU is falling behind. The reason for this lag in economic development can be attributed to high energy prices, a strategic dependence on imports of critical raw materials, a poor track record of breeding high value innovative technology companies, and complicated, slow and indecisive decision making processes in the EU Council.
The report on EU competitiveness made by Draghi pinpoints three transformations that are needed to increase competitiveness: accelerate innovation and find new growth engines, bring down high energy prices while continuing to decarbonise, and cope with instable geopolitics by reducing dependencies and increasing defence investments. For Energy Intensive Industries and the transport sectors in Europe the report formulates a number measures along this line. Generally speaking the measures aimed at combatting high energy prices, aimed at supporting the automotive sector and aimed at spurring investments in chemical business and hydrogen are positive for tank storage and liquid bulk transport companies as business in chemical industries is supported. Hopefully these measures will be a priority for the European Commission and the European Council in the months and years to come. Much is at stake: our wealth, independence and way-of-life are under threat!
Short term market fundamentals are less favourable for tank storage and tanker transport markets. Oil prices are less volatile and the market is in backwardation. Natural gas prices are about four times as high compared to US markets leading to high marginal cost levels compared to other major competing regions. Petroleum refining and steam cracking margins are also depressed. The bearish market sentiment has translated into a lot of announced closures in Europe. Refineries and chemical plants across the continent are closing operations in a push to rationalize capacity. The effect on business is negative as this means less transport volumes and thus less need for tank storage capacity and shipping capacity. Our research has already confirmed decreasing tank storage rates and freight rates compared to previous periods. 2025 is set to become a difficult year for the liquid bulk supply chains and logistical operators in Europe.
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We are excited to announce that Insights Global is featured in an exclusive interview with Inspenet. This interview provides an in-depth look at our strategic initiatives, market insights, and our plans for expanding our presence in the U.S. market. Learn from our experts as they discuss the future of the liquid bulk and terminal industry, and how our advanced data-driven solutions are shaping the landscape. Don’t miss this opportunity to gain valuable knowledge and stay ahead in the industry.
In this interview, Patrick, our Managing Director, delves into the evolution of our company from its European origins to becoming a global leader. He shares insights on our commitment to innovation, the challenges and opportunities in the liquid bulk sector, and our vision for the future. This candid conversation is a must-watch for anyone looking to understand the dynamics of the industry and how we are positioning ourselves to provide unparalleled value to our clients worldwide.
For owners of terminals Market Intelligence (MI) can be the key factor to unlock pathways to cost reductions, smarter investments and growth. If the management team succeeds in predominantly making well-informed choices based on easily digestible structured information the whole outlook for the company could change. With strong MI it is also possible to zoom in on currently underperforming terminals where market adjustment and optimization will lead to better performance and profitability.
In the world of Market Intelligence there is a best practice developed by the Global Intelligence Alliance or GIA (currently active under the new company name M-Brain). It’s widely known as the GIA Framework for developing World Class Market Intelligence. The company published it in 2009 in a whitepaper titled World Class Market Intelligence – From Firefighters to Futurists.
Basically, it thoroughly explains a matrix with on the vertical axis 6 Key Success Factors (KSF) and on the horizontal axis 5 Stages of Market Maturity.
The 5 Stages of Market Intelligence Maturity
GIA gave the 5 stages frivolous yet insightful names like firefighters for the poorest, informal, last minute, ad hoc intelligence gathering and futurists for the world class MI of truly visionary companies.
Informal Market Intelligence – “Firefighters”
Basic Market Intelligence – “Beginners”
Intermediate Market Intelligence – “Coordinators”
Advanced Market Intelligence – “Directors”
Word Class Market Intelligence – “Futurists”
Let’s look at each stage individually:
Informal Market Intelligence:
Any tank terminal operation, and any company for that matter, handles various sources and streams of information of course. At this stage of maturity companies will probably not even use the label “market intelligence” for their information gathering and sharing activities. There is no predefined scope to these activities that will typically be done ad hoc when needed with little coordination and with little or no tools and resources.
Basic Market Intelligence:
Companies that have at least heard about Market Intelligence and its benefits may also be on a path with some “basic” first steps toward an actual MI program. Such a tank terminal operation might already engage an external service provider for some of their information needs. The activities are still mostly done ad hoc, like while preparing for a merger or an acquisition. There is however already some structure to how the intelligence is gathered, stored and shared.
Intermediate Market Intelligence:
At the intermediate stage a company is well aware of the benefits of market intelligence, has maybe seen some good case studies and is motivated to do better themselves. It is likely such a company will allocate some budget for services of external providers and a first set of software tools. At this stage the scope and the level of analysis of the MI remains rather limited, partly because the intelligence operation is only loosely integrated to business processes, if at all.
Advanced Market Intelligence:
Once a company has really internalized the need for the most insightful intelligence for its business processes, once it has assigned a network of employees who can spend a certain percentage of their time on MI and once it has established an external network of information sources and vendors such a company reaches the advanced stage of MI. A tank terminal operation in this stage will have defined concrete deliverables of the MI process that actually match the needs articulated by decision-makers. True and obvious benefits ensue, further deepening the commitment of the management to treat MI as a vital part of the organization.
World-Class Market Intelligence:
Beyond the advanced stage and benefits clearly translate into growth and profitability there is a route to move on to the “World-Class” level, where Market Intelligence will be established as an integral part of all corporate business processes and there is a deep focus on future topics and issues. The market leader in the tank terminal business has gone this route starting the implementation already back in 2007. The case study in the Handbook of Market Intelligence (describing the status in 2009) demonstrates that there is always room for improvement. But exactly that is where the greatness lies: once a true MI culture permeates an organization, remaining humble and continuing to improve becomes a second nature.
Let’s now look at the 6 Key Success Factors of Market Intelligence one by one.
The 6 Key Success Factors of Market Intelligence
Scope
In order to not drown in an ocean of information, it is important to limit the MI by clearly defining the scope of the intelligence. In principle a deep and wide scope is desirable, but in the beginning, you can juggle only so many balls. Scope then limits the specific intelligence topics that will be researched at all.
Process
So, with the defined scope, that may become ever wider and deeper, a tank terminal operation knows what information to dig for and who to deliver it to. The process aspect of the information flow looks at how information is gathered and delivered.
Deliverables
Market intelligence projects need to determine at the outset how the output of the information gathered will be delivered and shared. Think of deliverables like internal newsletters, documents, spreadsheets and presentations. They can also include workshops and seminars.
Tools
A corporate intranet is typically the first big company-wide tool that companies implement, and that allows for a basic level of MI in their organization. With that a tank terminal operation has at least moved away from the informal spaghetti of email threads. Beyond the basic level, there are more advanced generic or custom-built MI software tools that thoroughly and specifically embed the MI in the organization.
Organization
Putting someone at the helm of the MI operation is the logical starting point of allocating people and their time to the intelligence activity. Without that the MI naturally stays informal and ad hoc. With that first person appointed the MI can start to grow and internal and external networks can be built.
Culture
At the low end of MI maturity, a tank terminal operator has no “Intelligence culture”. There may be some intelligence gathering and sharing activity, but if the management or the employees don’t really cherish it, it will probably not go very far. Towards an advanced maturity level more and more employees are engaged via courses and training and see the benefits of strong MI. What may still be lacking then is the support of senior management or even the CEO. The high mark is when the CEO becomes the biggest internal promoter of MI.
The important thing to remember when trying to reach the next MI level is to assess what you need and what you want to accomplish. You have to assess your current level of Market Intelligence Maturity first and set a timeframe of progress towards the advanced stage. It is probably worthwhile to focus on some quick fixes and wins first if one or more of the 6 KSF’s are dramatically worse than others. Yet it’s also valuable to further strengthen the ones that are already at a high level.
World class MI might be out of reach for many smaller tank terminal operations, yet it is still a good idea to know about it. At the world class maturity level, a company has a broad, deep focus on future topics and a systematic process that continuously produces insights into the company’s operating environment. That company will also have a dedicated Chief Data Officer who’s in charge of structuring all intelligence activities across the company. This manager would typically be responsible for the annual “Intelligence plan” that is updated year by year with vision and metrics on dimensions such as sales, business development, operations and finance and management.
Advanced or world class MI for tank terminal operators specifically entails:
A profound knowledge of the market of liquid bulk shipping and storage
An in-depth knowledge of the current and future competitive environment
Essential knowledge of regional and global trade flows and trends
In an ideal situation MI will not remain an isolated function in the company but may rather inspire the whole company to become a learning organization open to and embracing new trends and ideas. In the end management can make better decisions at a quicker pace which increases revenue and reduces costs. Valuable new customers will be attracted and facilities will be built that are future proof.
This blog post is a shortened version of a chapter in the whitepaper “Market Intelligence for tank terminal operators” that can be downloaded via the banner below.
Whitepaper: Market Intelligence for Tank Terminal Operators Explained
What is the key factor, the bottom-line that determines the success of a terminal operator? Of course it is the percentage of tanks that are rented out over a given period of time and the fee or rate that these tanks generate. The people realizing this bottom-line day in day out are your sales and account managers. What can Market Intelligence do to help them reach their targets? And what can Market Intelligence do to secure future growth?
2: Investigating what mix of customer sizes and their desires and what mix of liquid bulk products will make the terminal operation run most smoothly over time
3: Via competitive intelligence giving each sales and account manager the right information at his or her fingertips when entering price negotiations
The first pillar lays the groundwork for all strategic decision making. It will guide your commercial team to where growth and value can be found. The second means that a company will not let sales managers just blindly hunt for any customer. It will guide them towards the right deals that will strengthen the terminal’s position and competitiveness and at the same time will guard against having a portfolio of clients that does not match with logistical capabilities and constraints. For instance part of the terminal can be reserved for customers who need strategic storage, like governments. The staff responsible for Market Intelligence can make calculations and show exactly why it could be beneficial to reserve a given percentage of the terminal for such a customer who pays a somewhat lower price but signs a long term contract and does not require a lot of throughput capacity.
Price negotiations
The third pillar with which Market Intelligence helps sales and account management is literally hands-on as a staff department giving the sales or account manager all key numbers, prices, competitor intelligence and other metrics needed to negotiate good contracts. A sales manager can only make good deals when they have superior market and customer information at their fingertips. A customer will notice when their negotiating partner is well informed and be more likely to accept an offer.
Logistics
When making such optimal sales strategy plans, a big consideration is the effective use of terminal installations like jetty’s and pipelines. It makes no sense to do a lot of sales for a certain product in certain volumes only then to note that logistically it’s impossible to service these customers without long and expensive waiting times. On the other hand with proper market intelligence it becomes possible to even plan investments in new installations when for instance it is known that a new customer, or a new product, will very likely grow strongly in the years to come.
Avoid chaos
Market Intelligence can “design” an optimal mix of good (i.e. growing) customers where you have enough diversity to respond to short term demand fluctuations, but still create a stable business with a hub function for certain preferred liquid bulk products and a number of larger dedicated customers. In this way day to day chaos at the jetties, caused by a multitude of hyper-active customers, can be avoided. And the customer benefits too from this smart planning since they hate to pay demurrage. Market Intelligence is there to make sure that everything in the terminal operation happens in the smartest way possible with the largest economies of scale!
Counter-intuitive
Sometimes good market intelligence can help a business spot counter-intuitive opportunities. For instance when globally investments in oil facilities go down, at the terminal level the effect might be contrary. Decreasing funding may lead to the phasing out of local refineries which in turn increases global shipping of refined products. So less investment in fossil fuels can in certain cases lead to increased demand for tank capacity. Without good Market Intelligence it is practically impossible to instruct sales and account management to look into such changing opportunities.
Competitive edge
To conclude we can say that, starting from current awareness, through strategy and business development, it is crucial that Market Intelligence extends deeply into the sales and account management. Only then the benefits of all the labor in the prior stages can be reaped. Only in this way a terminal operator will get the competitive edge over the competition, that will lead to sustained excellence, growth and profitability.
Whitepaper: Market Intelligence for Tank Terminal Operators Explained
Business development is what comes next in line from current awareness and strategic planning. It is basically the moment when a company says: “Let’s do it!” One would almost assume that all necessary research for this execution of the strategic plan has already been done and that now it’s just a matter pushing ahead come hell or high water. In reality Market Intelligence remains important in this phase too!
If we recap quickly we have seen that without market intelligence there can be no current awareness. Then we have seen that this current awareness can be expanded upon by applying further market intelligence to create well-founded scenarios and predictions. Only with those scenarios and predictions at hand strategic planning starts to make sense. In this blog post we will look at the next phase when the strategic plan needs to be decided upon and get executed.
Let’s look at an example. Currently, the terminal world experiences a shift towards sustainable fuel sources. Many terminal operators want to get clout in new fuels such as hydrogen (at minus 250 degrees Celsius), ammonia (transporting hydrogen chemically bound to nitrogen at temperatures and pressures comparable to LPG), and also SAF (sustainable aviation fuel). Lastly there is a growing demand for LNG due to the war in Ukraine and other geopolitical factors. Current awareness means to at least be aware of these trends and having current data at hand. Strategy means having a plan on how to capitalize on these trends under various scenarios. Business development then, is the stage where a desired position in these fuel supply chains is going to be built up.
In this new phase a good and constant intelligence flow remains critical for success. Market intelligence will now provide detailed knowledge and information about which concrete players would need what amounts of storage capacity. There can be absolutely no surprises regarding rules and regulations for these new fuels. Price movements need to be current at all times. These factors will then be taken into consideration when constructing of new tanks, jetties or pipelines. As in any construction project, these stages are feasibility study, design, licensing and permits and (preliminary) contract negotiations.
Investments in terminals are huge and therefore go hand in hand with long term contracts. Time spans of such contracts are usually between 5 and 15 years. So obviously most terminals and installations will not be built without a signed contract to cover a part of the lifespan of the asset. However, it is rarely the case that a client will be prepared to sign a deal for the whole lifespan of an asset. So there will always be a risk associated with such a project and market intelligence will enable you to estimate this risk and factor that into your decision. If the risk is acceptable you can go ahead, if too large then either you walk away from the deal or try to negotiate better terms. We can conclude that Market Intelligence continues to play a large role all the way into the business development phase.
And as we will see in another blog post it remains important up until the final stage of the asset’s lifecycle: the operational phase. In this phase the objective is to get a good return on investment by attracting and retaining valuable customers that pay premium rates for your terminal. With excellent market intelligence for marketing, sales and account management you can achieve these results.
We don’t deny it: some entrepreneurs keep getting lucky just basing their decisions on gut feeling. At the same time we claim that even these entrepreneurs and their companies would fare even better if they had ongoing smart and structured intelligence gathering about all aspects of their market. Let’s take a look why market intelligence is an equally vital support activity within a company just as IT, human resource management or accounting are.
Tank terminals are capital goods. Strategic decisions in the terminal business often result in investments worth millions of dollars. And these investments determine to a large extent the capabilities of a terminal for years to come. So obviously any reduction of long-term investment risk is welcome. Market intelligence, the systematic gathering and analysis of information about all things concerning your current and future business, is the way to do this.
The important of current awareness before strategy
In a first blog on current awareness we have explained that a company simply must have sufficient understanding of what’s currently happening in your industry. What are clients looking for? What are competitors doing? Which tech trends influence the market? How is the pricing of services changing? Which mergers and acquisitions are taking place? Is there news on the regulation front in any of the relevant geographic areas? Are there important changes in the political landscape?
The current awareness can be structured using a PEST-factor (macro-level: political, economic, societal, technological) analysis, competitive environment (industry-level: customers and competitors) analysis and SWOT (segment-level: strengths, weaknesses, opportunities and threats) analysis.
The next stage should offer a clear view on various realistic future scenarios for industry and market developments. Most often there is one strong trend dominating the market, but it would be foolish to always just follow the pack jumping on such a new trend. If you come in early it could prove demand is not yet as predicted. If you come in late you can’t win either.
Market intelligence allows a business to stand on its own two feet and make specific decisions independently. Better decisions. Quicker decisions. Better timing. The right partners. That’s what makes the difference!
The consequences of strategic decisions and what to do with them
A helpful way to analyse consequences of strategic decisions is to always consciously run through three scenarios:
worst case
most likely
best case
If your market intelligence is capable of providing this kind of “three-stage” realistic prognosis for each possible expansion or change of a terminal operation, then it is also likely that the management will be able to recalibrate the long-term corporate strategy and pick the best choices. The fact that various levels of management are involved in the information gathering, also ensures that strategic decisions are well supported by the whole organisation.
In the end what counts is to move away from the intuitive and short-term approach towards a systematically organized long-term form of Market Intelligence (MI) preferably with concrete roles for key staff members and with a proper embedding in the company culture.
The handbook of Market Intelligence (2009) offers a good example of world-class market intelligence as it relates to strategy:
“We are future-oriented in our approach and frequently use scenario analysis in combination with forecasting as methods to understand the future dynamics of our industry. One example is that we have a project focusing on as far as the year 2050. We have an intelligence network in place and are producing deliverables that have been tied into our strategic and operational business processes.”
In the end, world-class companies have proven that ongoing smart and structured intelligence gathering about all aspects of their market will enhance profitability and reduce risk. In the highly fragmented tank terminal business, servicing an ever-changing liquid bulk market, it is not possible to survive without a clear strategy. Market Intelligence (MI) ensures that this strategy is well founded and recalibrated frequently. In this way it is a vital internal support function.
Whitepaper: Market Intelligence for Tank Terminal Operators Explained
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