Home  |  About  |  Blog

Chorus Logistics Blog

Chorus Logistics Understands Plastics

Plastics Supply Chain

In the United States, plastics are manufactured from hydrocarbon gas liquids which are a byproduct of petroleum refining and natural gas processing. The export supply chain for plastic resin starts with the extraction of natural gas or oil from gas or oil wells. At the shale formations in Texas, natural gas is mined and transported via pipeline to a gas processing plant. 
To make plastics, a pipeline transports ethane and propane (among other petrochemical products) to a petrochemical plant known as a cracker facility. Here high-temperature furnaces crack the ethane and propane into ethylene and propylene. Another pipeline ships the product to a plastic converter where a catalyst is added to the ethylene and propylene. Small plastic pellets are then formed through a process known as polymerization. 
Plastic pellets are generally made in large batches to make the manufacturing of the product cost-effective. The plastic pellets are then transported to a storage-in-transit yard until the manufacturer is ready to sell and ship the product. 
Once they reach their markets, the plastic pellets are used to manufacture a wide range of plastic products through processes such as injection molding, blow molding, and extrusion. 
Since the raw materials for plastic resin are found in natural gas, plastic resin manufacturers are dependent on the supply and price of natural gas. As the mining of shale formations has increased in the United States and Texas, there has also been an increase in natural gas production and lower natural gas prices. This has allowed the petrochemical industry, especially the plastic resin subsector, to increase its competitiveness in global markets. 

Transportation Challenges and Opportunity

The industry relies heavily on an efficient transportation system in order to remain competitive. 

An important component of the plastic resin export supply chain is the Texas transportation system. To remain competitive, it is vital that plastic resin shipments be delivered in a cost-effective and timely manner. Now that the product lifecycle has decreased from years to months, the entire supply chain of plastic goods has been affected. Quick turnarounds are critical for plastic companies to stay competitive. 

Since plastics are mainly derived from oil and gas, they are dependent and at risk for the same price fluctuations as oil and gas. Increased competition and regulatory pressure in the plastics industry leads to increased customer expectations and greater operating costs. Plastics and chemical manufacturers must be more strategic in their economics of buying oil and gas and producing plastics and petrochemicals. 

The Chorus Logistics System

Chorus Logistics provides cloud-based real-time systems that manage both the supply and demand side of the commodity transportation industry. We offer customized digital systems with remote capabilities that will improve processing, provide real-time invoicing, and ensure your company is as cost-efficient as possible. In these challenging and unpredictable days, uptick and real-time systems provide much-needed optimism. Contact us today for more information on how our transportation management software can boost your company’s productivity.