Aldrees petroleum & Transport Services
Aldrees is organized in two major divisions; the Petroleum Services Division and the Transport Services Division. The former owns and operates 478 petrol stations right across the kingdom, and is the retail arm of the business. The Transport Services Division is one of the major customers as well as one of the principal service providers to the retail side, but operates as an independent company. It is one of the largest logistics provider in the country – and currently very much in expansion mode.
Mohamed Yousri Hanno is Assistant General Manager of Aldrees Transport Services. The company is involved with local freight deliveries, as well as deliveries to GCC & middle east countries, he explains. With 1,340 tractor units and more than 2,700 road trailers in a huge array of different specifications, its primary concern is the movement of bulk cargoes between the kingdom’s industrial and petrochemical complexes, and its ports on the Red Sea to the west and the Arabian gulf to the east. “
To give a flavour of the size of the operation it is worth looking at some of the major contracts Aldrees services. The largest customers include Saudi Arabia’s leading petrochemical company SABIC, for which Aldrees transports liquid chemicals in stainless steel tanks and Solid Petrochemicals like polypropylene, polyethylene and PVC in bulk and bags, and the minerals group Maaden whose product includes sulphuric acid at 98 percent concentration as well as phosphoric acid& caustic Soda – hazardous chemicals that require stainless steel and rubber coated tanks. Aldrees also undertakes transportation of Maaden’s oil supplies moves minerals like copper, gold and zinc in containers to Jeddah port for export.
A new product line for Aldrees recently has been the transportation in tipper units of the refinery SATORP’s by-product of pet coke to Jubail Industrial Port, part of an ongoing expansion of the relationship between these two companies. For the National Industrialization Company Tasnee, a demanding new departure is transporting butyl acrylate in special insulated stainless steel tanks, again to Jubail Port.
Cement is an important export commodity for Saudi Arabia, and Aldrees is involved in moving Northern Cement Company’s product in bulk to their customers all over the kingdom as well as keeping the cement plant supplied with petrol, diesel and HFO, which calls for specialised insulated and heated tanks.
Other tasks include moving ilmenite and coke in bulk from Jazan Port to the National Titanium Dioxide Company’s plant 100 kilometres from Jazan Port and bulk sugar, liquid sugar and molasses to customers of United Sugar Company (Savola) in Jeddah & Riyadh. For the Grain Silo & Flour Mill Organization imported wheat is moved from Dammam Port to the silos in Dammam, Madinah & Tabuk. And let’s not forget the product that built modern Saudi Arabia - for Petromin and Shell Aldrees is trucking base oil from Jeddah, Yanbu & Dubai to blending plants in Jeddah & Riyadh, and finished product in bulk and drums to these customers’ clients.
As we mentioned earlier, a really important customer is Aldrees Petroleum Services Division, for which the Transport Division delivers petrol and diesel to every one of the 478 filling stations in 200 dedicated tankers in Aldrees livery. “We make almost 12,000 trips monthly for the fuel stations! They are one of our biggest customers, and of course we are one of theirs because we buy our diesel from them. We win both ways. We buy the fuel from them and they buy the transport service from us.
The entire fleet consists mainly of Mercedes units, though 24 percent are supplied by Volvo and six percent by MAN. These operate out of six strategically situated depots Riyadh (the head office with a 100,000 square metre warehouse); Jeddah, Dammam, Yanbu, Jazan, Haditha on the Jordan border, and Jubail. “Each of the facilities is run by a branch manager with full autonomy, and has its own maintenance facility for the trucks. Naturally they all have their own dispatch facility, plus accommodation for the operations, administration and maintenance staff and drivers. And they are all stocked with the spares needed to keep the trucks on the road.”
While the trucks are regularly updated with the latest fuel efficient models, diesel in Saudi Arabia is cheaper than anywhere in the world except Venezuela. Unlike freight companies in Europe for example Aldrees does not see fuel as a major cost. Tyres are another matter. A little over two years ago, says Mohamed Hanno, the company contracted with Michelin to run its Tyre Management System. “We now have control of every tyre on every truck at any time. At the click of a mouse we can tell the wear condition of that tyre, the mileage it has covered and which axles it has been fitted to.” This is an effective way of ensuring safety while keeping tyre costs down – since the implementation of the system in 2012, he says, average running mileage has increased by around ten percent, and overall tyre costs reduced by a similar factor.
To keep its network working seamlessly, and to manage the complex truck movements, Aldrees developed its own enterprise system together with a sophisticated Transport Management System (TMS), says Hanno. “Right across company all our operations are linked together and all the data is transmitted on line – the orders from the customer either coming to head office or to the branches are constantly tracked and because we have GPS satellite tracking throughout our fleet, from the Riyadh control room we can monitor the trucks wherever they are operating, even outside the Kingdom.”
Thus, with key costs under control and truck maintenance controlled by Aldrees’ own software a couple of key best practice boxes have been ticked. A third, vital to satisfying the OEMs and maintaining warranties, is the question of which oil to use in Saudi Arabia’s harsh conditions. After a long period of trialling approval was obtained from all three for engine oils developed by Petromin Corporation. This is consistent with Aldrees’ benchmarking policy, Hanno emphasises, which also dictates that all spare parts are sourced from the OEMs’ approved agents, in a market flooded by cheap replicated parts.
Just a year ago, there was a major change in the company’s centre of gravity when Aldrees opened its state of the art new depot in the fast expanding industrial city of Jubail. Because of its key location near to major clients, this is now the most important depot for the division, but there are more reasons for that investment. “We have two terminals there, each 100,000 square metres in area,” he says. “One is for the Transport Division operations and the other for the joint venture we have set up with our Swiss partner Bertschi group. The company is called Aldrees Bertschi Logistics Services Company.”
Bertschi AG is a specialist in logistics and the transport of chemicals by ISO tanks on road, sea and trains in Europe, China and Singapore. It should perhaps be explained that an ISO tank is a container built to the ISO (International Organisation for Standardisation) standard and designed to carry liquids in bulk. The frame which the tank sits in measures about 6 metres long, 2.4 metres wide and between 2.4-2.5 metres high. The tanks vary in size and type and can carry between 21,000 and 40,000 litres of liquid. The new company will be engaged in providing chemical logistics, transport management, warehousing management, cleaning of chemical tanks and related services: it will be managed by a joined team from Aldrees and Bertschi.
Another partnership will see intensive development this year of a completely new line of business for Aldrees – outsourced warehouse management. One major contract already secured by Aldrees together with South African logistics specialist Barloworld is to manage the warehouse operations of existing customer SATORP. “We hired the people and we’ve done thorough in-house training in conjunction with Barloworld. We have a trained multinational workforce.”
This is just the beginning says Mohamed Hanno. “We have also started the quotations and tendering process for several offsite logistics challenges, such as hosting bagging lines and drumming lines in our facilities because many of the new companies moving into Jubail, like Sadara Chemical Company for example, which is constructing the world’s largest chemical complex ever built in a single phase in Jubail Industrial City, and Sipchem simply don’t have the warehousing space and are keen to outsource non-core logistics.” It is a great opportunity for Aldrees as Jubail and other industrial complexes in the kingdom continue to expand, he emphasises.