Arrow Energy has signed DHL to provide logistics management to Arrow’s proposed coal seam gas developments in the Bowen Basin.
In a first for the Australian resources sector, DHL has been engaged as a fourth-party logistics (4PL) contractor, meaning it will effectively function as an Arrow department.
“We have great confidence that a 4PL relationship with DHL is the best way to achieve both safety and value outcomes for the logistics task of our Bowen proposals,” said Arrow CEO, Andrew Faulkner.
“We expect DHL’s decades of experience in logistics, gained around the world, to elevate the levels of service and safety on what is a very complex task that’s spread over thousands of square kilometres.”
“Arrow is an experienced coal seam gas company and DHL is the world’s largest logistics company. This arrangement will allow Arrow to concentrate on its core business, knowing its logistics requirements are in competent hands.”
The contract, signed for 1+5 years, began on November 17 and covers logistics services to the proposed Bowen Gas Project and the Arrow Bowen Pipeline.
The bulk of the 4PL contract depends on the two proposed projects proceeding to construction.
In September, Arrow announced it was progressing the Bowen Gas Project to the front-end engineering design phase.
The 4PL task will include services covering general and over mass/size freight, fuel, water and gravel distribution, waste services, and marshalling yard operations.
DHL will manage the second and third-party logistics providers, which perform the hands-on work like driving trucks, facilitating cargo through Customs, and running warehouses.
“Arrow’s owner’s team will be very small and DHL will manage the projects’ overall logistics,” Mr Faulkner said.
The benefits to Arrow of engaging a 4PL include:
- Reduced costs – DHL will use its market presence to secure the best rates for the Arrow business, and then optimise the engagement of second and third-party logistics companies to reduce costs; and
- Improved safety – DHL will bring improved control and coordination of logistics activities, and reduce the overall truck movements, leading to reduced health, safety, and environmental risks.