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  December 14th, 2015 | Written by

Oil and Gas: Adapting to the New Normal

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  • Oil and gas stakeholders have to reconsider expenditures and optimize costs to readjust to the market situation.
  • Global logistics providers that can help oil and gas companies compete in global markets.
  • A logistics provider can support oil and gas customers with solutions for transportation and network optimization.

Tougher fuel economy regulations, more viable forms of alternative energy and new technologies in oil and gas production, are just some of the reasons for the dramatic downturn in oil prices that has challenged the oil and gas industry.

As the industry has been marked by a vast increase in supply but receding demand growth, all oil and gas stakeholders have had to adapt their structures, reconsider capital expenditures, and optimize their costs in order to readjust to the current market situation.

While there is no generic recipe for optimizing costs, oil and gas companies can start by creating strong partnerships with a global logistics provider that can help them compete effectively in various global markets. In difficult times like these, a knowledgeable and reliable logistics provider can better assist to engage in direct cost optimization initiatives for the benefit of the customer.

Effectiveness and continuous improvement have always been of the utmost importance in the oil and gas industry, but today efficiency must be driven to new levels and ambitions. Innovation and leveraging of the most advanced technology are key factors. A logistics provider can support the customer by setting up new cross-dock hub solutions for trucking, air, and ocean freight and offering consulting for network optimizations and best use of Free Trade Agreements, among other services. Working hand-in-hand with a global provider that offers the latest technology and most advanced supply chain visibility tools is also critical. If better planning helps to make better use of ocean freight, costs can be reduced.

Change is normal and better times will be ahead. While the focus on reducing costs is part of the solution, industry experts recommend companies to review the processes and implement new and sustainable logistics solutions. Improvements implemented today will benefit stakeholders once market conditions improve. For the oil and gas industry this just means adapting to the new reality and adopting new strategies.

Juerg Rohrer serves as the Senior Vice President of Global Business Development for DHL Global Forwarding’s Oil and Energy sector and brings more than 35 years of experience in the freight and logistics industry.