Tag Archives: oil and gas

3 Main Challenges of Oil and Gas Industry

The oil and gas industry is extremely volatile by nature. It is involved with many other industries and processes, and often must adjust to the dynamic environment. At the same time, upstream, midstream, and downstream oil and gas appear to be extremely complex and require a high level of management and responsibility to function properly. This puts oil companies under the pressure of high-quality maintenance and being flexible at the same time. Apart from traditional obstacles like fluctuating oil prices that cause spikes and drops of demand, there are a few other significant challenges.

Oil and gas industry challenges

Reducing costs

In oil and gas, reducing costs means optimizing processes as much as possible. It is an extremely complicated mission to reduce production costs and still maintain proper quality levels. Therefore, constantly monitoring operational processes and defining gaps is crucial to keep costs down.

Visibility into operations

With such a complex supply chain, it is a huge challenge for oil and gas companies to stay updated on everything happening within the business. Lack of transparency into operations and processes often results in disruptions and overspending. The key to overcoming this obstacle is investing in innovative software with rich functionality and integration capability. Real-time updates and data storage lets you see a wholesome picture and easily monitor every separate operation.

Improve communication with service parties

Obviously, oil and gas companies could hardly operate without any parties involved. From vendors and suppliers to logistics providers and customers, clear communication is a must at every stage. Outline a strategy and make sure to clearly communicate it to your partners. Emphasizing your company’s updates and changing needs will help speed up processes and increase performance efficiency.

Oil and Gas Shipping with PLS

PLS is one of the country’s leading industrial-focused 3PL providers. We can handle your oil and gas supply chain with our dedicated team, skilled carriers and committed capacity. Learn more about our Oil and Gas Shipping services!

Midstream Oil and Gas: What Is It & How Does It Work?

There are three essential stages in the oil and gas production industry: upstream, midstream and downstream. To understand the role of midstream oil and gas, let’s take a look at every stage.

Upstream is referred to all of the processes and actions connected to finding, exploring, drilling and producing crude oil and natural gas. Obviously, midstream is an intermediate link between the first and the last grade of the oil industry. As a final link, downstream encompasses refining and selling end products of oil and gas segment.

What is midstream oil and gas?

Consequently, as a median link between upstream and downstream, midstream is responsible for storing and transporting oil and gas supplies to their end distributors. It includes all the processes, equipment and facilities needed to distribute the materials.

It may seem like the easiest process, but it is way more complex than many can imagine. Arranging storage and logistics of fuel materials requires following safety guidelines and complying with strict regulations. Shipping speed also plays a crucial role in the oil and gas supply chain, which makes midstream transport an important branch to manage.

How does midstream supply chain work?

Oil and gas supply chains are very complex. There are many different processes within the stage of midstream oil and gas. Usually, it consists of three main stages:


Storing oil and gas plays a huge role in balancing supply and demand of the materials across the country. It is a part of midstream to secure supplies in large oil tankers and to prepare materials for distribution.

Primary logistics

Once crude oil or natural gas is ready for transit, the logistics stage begins. Primarily, most of oil and gas is transferred with special pipelines that are built across the country. Highly secured and protected, oil is pushed with an extremely high pressure to reach the necessary destination. Midstream pipelines are the best way to move energy products safely and quickly.

Secondary logistics

Essentially, when the supplies arrive at the hub, the next step is the delivery to a final destination (warehouse, plant, or facility). There are several transportation modes like trucks, rail, and barge that assist midstream companies with this task. It is a critical stage of transportation and requires proper planning and execution.

Midstream Transport: Oil and Gas Shipping with PLS

PLS is one of the country’s leading industrial-focused 3PL providers. We can handle your oil and gas supply chain with our dedicated team, skilled carriers and committed capacity. Learn more about our Oil and Gas Shipping services!

Oil and Gas Safety: 3 Practices for Safe Transportation

The oil and gas industry essentially involves exploring, utilizing and transporting hazardous materials. Therefore, oil and gas safety compliance and risk management are crucial in such a complex sector. Unfortunately, disruptions and breakdowns in oil and gas supply chain lead to devastating consequences, that apart from an environmental disaster often causes numerous injuries and death cases.

Risk management in the oil and gas industry has to be handled properly. However, it doesn’t always work the right way. Sometimes, companies may underestimate the importance of safety measures while exploring and transporting crude oil and gas. It is critical to regularly check if your operations are in compliance with safety guides.

3 Practices for Oil and Gas Risk Management

Risk management strategy

In the oil and gas industry, preventing an issue is much more important than solving the consequences. That’s why proper project analysis and forecast of all dangerous situations is essential for the risk management strategy. Potential issues can occur on every stage of the process. So, it is important to outline all the possible scenarios before the execution begins.

Operational safety control

Unfortunately, the majority of accidents in the oil and gas industry are the result of human error. The first step to ensure safety compliance is developing a proper safety culture. Often, company leaders dismiss small signs that later might lead to an unwanted outcome. Also, make sure that employees that are responsible for operations and safety measures are doing it on practice, not just in their paperwork reports. Companies certainly should pay close attention to any changes in the system or processes.

Proper communication and analysis

In industries like oil and gas, it always seems like the disaster occurs randomly and with no possibility to be predicted. However, after some time of analysis, many minor warnings of danger come to the surface. Despite these factors were known, there was no proper communication or the importance of them was just underestimated. Make sure to structure the efficient communication strategy within the company and with all the parties involved to diminish the risks.

Ultimately, regular control and accurate planning can reduce the risk rate to a very low level. It’s better to be safe than sorry, especially in the oil and gas industry, where being sorry costs a very high price.

Oil and Gas Shipping with PLS Logistics

Learn more about our Oil and Gas shipping services to ensure safe transportation!

4 Best Transportation Methods for Oil and Gas Shipping

It is hard to imagine our lives without fuel. Every day, we rely on the oil and gas industry to supply us with energy to keep multiple processes running. In order to provide us with necessary materials like oil and gas, companies must ensure they transport it in a convenient and reliable way. Choosing the right transportation mode and a robust strategy is crucial for efficient oil and gas shipping.

The role of transportation in the oil and gas industry

Transportation is an essential part of the oil and gas industry. However, due to the hazardous nature of transported products, it can be complicated. Crude oil, natural gas, and oversized drilling equipment all require special handling and increased safety regulations. Therefore, cargo security, delivery speed, and proper transportation equipment play a significant role in the oil and gas supply chain.

To ensure successful delivery, energy companies use various modes of transportation. Sometimes, it can be challenging to choose the proper mode.

Here are some of the most popular ways of transporting crude oil and gas across the world:


The easiest and most utilized form of transportation in the oil and gas industry is trucking. With on-the-road transportation, you can schedule shipments at any time and move them at any place. This advantage makes trucking way more beneficial than other transportation modes. Also, it moves smaller amounts of oil, meaning that the extent of damage in case of cracks or leaks is relatively small.

Additionally, there are various types of trucks that can perfectly suit the needs of the industry.

  • Flatbeds are open trailers that are commonly used for oil and gas equipment shipping because they let you move loads of any size and shape. Rigs, pipes, and drilling equipment are usually oversized and overweight, which makes it hard to move via any other transportation method except a specialized truck.
  • Hotshots are trailers connected to a pick-up truck that is made for moving small and urgent shipments. Whenever you need to quickly transport a piece of equipment to a remote site, hotshot is a perfect option.
  • Oil tankers are special cylindrical containers connected to trucks. Tankers are adjusted to moving liquids, and they are good for moving oil as well. Although you cannot ship a large volume of oil through the truck, the vehicle can take it to any destination you need.


This transportation method suggests that oil is gathered and then transported directly to the site or plant via a pipeline network. Despite pipeline shipping being a hot topic of discussions between industry experts, it is a fast and reliable way to distribute oil. New technology helps advance the safety of this mode, and pipelines have sensors for monitoring important indicators like temperature, pressure, etc.

Pipeline transportation has its disadvantages. Firstly, it limits areas and destinations you can ship to because the pipeline infrastructure is not developed enough. Additionally, pipelines move enormous amounts of oil, so when an accident happens, the damage is very serious and it’s often hard to liquidate the consequences.


Ships are a slow, inexpensive, reliable way to move extremely large volumes of fuel. Ocean transportation has one big advantage over other shipping methods, which is that you can transport materials globally. Despite longer transit, it is the most efficient mode for moving oil across the world. Essentially, ocean shipping is mostly used as a part of a large intermodal strategy.


Rail was a primary way to move oil for more than 150 years. Rail transportation makes oil containers less prone to damage compared to other shipping modes. This method doesn’t have enough flexibility to move oil at any point. But, when combined with other modes, rail can be extremely beneficial for a fairly fast and cost-effective way to move oil long distance.

Oil and gas transportation with PLS

Regardless of the shipping method you choose, it is essential to find a reliable transportation provider. At PLS, we have more than 27 years of experience and providing logistics services for oil and gas companies across North America. We can help you enhance your transportation strategy with our customized solutions, 45,000 carrier network, and a variety of modes.

Learn more about our oil and gas shipping services!

The 3 Main Oil and Gas Trends In 2019

Over the last few years, the oil and gas industry has faced numerous shifts and fluctuations, along with extreme price volatility. Technology, new energy policies, and trade agreements continue to affect the industry. The industry should expect to see even more transformation in 2019 and beyond. We have collected some valuable insights from the energy industry forecast and highlighted the main oil and gas trends in 2019 and beyond.  

Natural gas demand will increase

In fact, natural gas consumption is growing almost 3 times faster than oil consumption. Lately, companies have been promoting natural gas as a suitable and less polluting alternative. For now, natural gas accounts for 25 percent of the overall energy consumption. Also, experts forecast a 1 percent market growth until 2050.

The shift towards renewable energy sources

Many industries have experienced a huge shift because of sustainable and environmental movements. Oil and gas are considered one of the most harmful industries, however, the green shift has made its impact here too. One of the major oil and gas trends is switching to renewable energy sources. International Energy Agency (IEA) states that the renewable energy industry is anticipated to increase 13 percent until 2021, while the overall global demand for low carbon energy sources has jumped 85 percent. Large energy companies seek partners who will help them adjust to the industry shift and implement sustainable practices.

Technology impact

Innovations are making a substantial impact on the energy sector. In the oil and gas industry, digitalization works in the form of processes optimization, secured payments, advanced analytics, operational efficiency, and sales. According to Worldwide Oil and Gas 2018 Predictions, nearly 75 percent of oil and gas companies will deploy at least one innovation. Ultimately, big data, cloud services, IoT (Internet of Things) and software will drive efficient solutions into the energy sector over the next few years.

Bottom line

Presumably, innovations and sustainable fuel are not the only game-changers in the industry. Traditional factors, like OPEC output, oil supply and demand, changes in energy policy, and workforce challenges are making the largest impact on the industry. However, the oil and gas sector is surely going to adapt to the changing economic environment.

PLS Logistics provides efficient supply chain solutions to oil and gas companies. Learn more about our Oil and Gas services and get a free quote now!

How Oil And Gas Companies Can Save On Logistics

Just like every other industry, oil and gas supply chains are changing. However, these changes do not necessarily mean that energy supply chains are getting simpler. Despite all of the new technologies and advanced practices entering the sector, oil and gas companies still struggle with optimizing logistics and saving on transportation costs. The complex nature of oil and gas supply chains makes it difficult to manage processes, especially to maintain an efficient budget.

However, even such a complicated machine as an oil and gas supply chain is manageable when using the right solutions. Here at PLS Logistics, we have more than 27 years of experience in managing oil and gas supply chains, as well as logistics for many other heavy industrial areas. PLS has a few tips and tricks that can help you save costs on transportation within your supply chain.

How can oil and gas companies save on transportation?

Internal processes analysis

Before implementing any new strategies and solutions, you have to analyze your current processes and define errors. It may be difficult to adequately access operational efficiency within the company on your own, so it may be beneficial to hire an external analyst to make an accurate assessment. It is critical to figure out any waste spends and inefficiencies in the supply chain to proceed with setting up new cost-effective approaches.

Use a Transportation Management System

The transportation management system (TMS) is an automated tool to manage and streamline shipments. The TMS lets you increase visibility into your supply chain processes. It lets you gain transparency and valuable insights, and rethink internal processes in the supply chain. Additionally, an advanced TMS lets companies define gaps, capture negative spending tendencies, and track new savings opportunities. A TMS keeps all of the data together in one place, to simplify the analysis and interpret information. Supply chain transparency is extremely important to oil and gas companies. A TMS lets you track key metrics, see inconsistencies between rates and final bills, and compare data reports. It has the capability to drive savings through load optimization, freight consolidation, eliminating back hauls, and decrease extra miles.

Analytics and strategic planning

The truth about supply chain optimization is that it is mostly based on well-organized, planned operations. After a thorough analysis and usage of a TMS, your team will be capable of forecasting new approaches and eliminating unnecessary processes. The more your planning is based on accurate data interpretation, the more efficient it will be in practice.

Bottom line

To sum it up, oil and gas companies have possibilities to drive substantial cost savings within their supply chain. When using a robust TMS in combination with the proper analysis, you figure out new efficient approaches that enhance productivity and mitigate unnecessary costs.

Learn more about our Oil and Gas logistics services!

Expanding Your Oil & Gas Carrier Network

The oil and gas sector is one of those industries where partners need to gain extreme credibility to maintain sustainable working relationships. Energy supply chains are complex and look like knotted webs instead of a linear chain. There are multiple processes involved, remote sites, safety regulations and hazardous materials that all demand precise management and control.

Most of the oil and gas companies tend to work with the same narrow circle of carriers for years. However, the industry is expanding with more and more new drilling and mining locations appearing throughout the country. Considering the monstrous size of the energy sector, a single shipping operation may involve around a hundred trucks and combinations with other transportation modes.

Another major challenge in transporting energy assets is the demand for specialized vehicles. Moving rigs and drill pipes of extremely large sizes and shapes requires a wide network of reliable flatbed carriers. While there’ s the never-ending tight capacity on the truck market, the flatbed capacity can be even tighter.

Many oil and gas companies are afraid to outsource their freight management and expand their carrier network due to the complexity of building trusted relationships. However, stretching your carrier base can significantly benefit your business.

First of all, you’ll never be short of capacity. Oil and gas cannot survive delays and disruptions, so random rejection can cause a lot of stress and money loss. It’s always better to play it safe and have few alternatives available to you.

Switching to using a logistics company can also help increase your efficiency if your old carrier relationship lacks trust or suffer from disruptions.

And finally, constantly communicating with an enormous number of carriers on your own can be time-consuming and very stressful. Partnering with a reliable third-party logistics provider can help in that case. A good 3PL will not only manage your freight but will also take the hassle of communication and tracking by providing freight brokerage and track & trace services.

Here at PLS Logistics Services, we have more than 25 years of experience in serving mining and industrial companies. If you need expert consulting on your oil and gas supply chain and transportation, contact us now with any questions you have!

Learn more about Oil and Gas shipping services! 

How Oil and Gas Companies Can Benefit from 3PL

Unlike any other industry, oil and gas supply chains are incredibly complex. Supplying every operation with heavy equipment, rigs, pipes, and hazardous materials requires extreme organization and strategy. Transporting such materials in such large volume demands using multiple modes, high capacity, special vehicles, and strict regulatory compliance. Therefore, there are many benefits of using a 3PL for oil and gas companies.

outsourcing oil and gas

So, oil and gas supply chains cannot survive any delays, disruptions or poor management. Every mistake and missed deadline can cost a company thousands of dollars. the mismanagement of such global processes can cause worldwide issues because the entire world is highly dependent on energy supplies.

Read How to Optimize Your Oil and Gas Supply Chain

Handling logistics for oil and gas companies by yourself is an expensive and inefficient approach, which often lacks visibility. Since transportation is a large branch of the energy business, it requires tons of time, efforts and enormous responsibility. Just one rig site may involve equipment from 80 different carriers. Also, most of the drilling sites are located in inaccessible areas, it’s hard to imagine the volume of responsibility and costs involved in the process.

That’s why many companies apply customized shipping solutions to their supply chains by outsourcing logistics operations to third-party logistics providers, or 3PLs. Outsourcing offers many benefits to energy companies:

Customized solutions

Finding the right transportation mode and providing necessary equipment is crucial for on-time delivery. 3PLs partner with a wide range of experienced carriers and have a variety of options to offer for your shipping needs. Flatbed trucking, casing and tubing deliveries, rig site delivery, combining transportation modes, warehousing, freight management, and hotshot services – all of these options fall under 3PLs expertise.

Read Do I Need Logistics Help for Mining, Oil & Gas Operations?


Unlike many other industries, safety is a top priority for the oil and gas sector due to its specific nature. Cutting costs on safety compliance is unacceptable, and 3PLs consider this factor while managing your supply chain. Logistics experts will provide assistance with regulatory compliance and ensure the transportation runs smoothly.

Technology and visibility

Due to its complexity and time-sensitivity, oil and gas logistics operations require increased visibility. Multiple processes mean lots of data that needs to be stored and systematized efficiently. 3PLs leverage advanced transportation management systems (TMS), which give complete visibility into the supply chain and reports at all times.

Read Transportation Management in the Oil & Gas Industry

When choosing a 3PL for oil and gas logistics solutions, consider the experience they have in your sector. While technology and a variety of carriers are important, understanding the specifics of oil and gas industry challenges is a key feature to look for.

Learn more about Oil and Gas shipping services! 

How Digitization Impacts Oil and Gas Industry

It is hard to imagine how the oil and gas industry operates with all its complex, critical processes involved. And it’s even harder to think of all the challenges it faces in the modern, ever-changing world. The oil and gas sector is experiencing major shifts and transformations, and it’s all because of digitization.

Why digitization matters to oil and gas?

The Internet of Things (IoT), artificial intelligence, blockchain, and big data are all terms that are prevalent among many industries, and the energy industry is no exception. More and more companies are seeking innovative, data-driven solutions for production efficiency and workforce stimulation. Technology today is the main efficiency booster in oil and gas, which can reduce costs and escalate decision making. Although it is not clear enough for some businesses how exactly digitization transforms into financial profit, the right application of technology can take the company’s performance to an entirely new level.

How digitization benefits oil and gas companies?

Digitization opens a vast variety of benefits for oil and gas companies.

  • Improving the performance of oil and gas assets and equipment. With the help of connected devices like IoT (Internet of Things), remote condition monitoring of well-site equipment is possible. Sensor technology lets companies track and gather data about equipment usage and maintenance. This data analysis, consequently, gives the potential to define waste operations and optimize production. Reviewing equipment can also mitigate its failure, and therefore contribute to better safety and health conditions for site workers.
  • Faster decision making. The energy industry is very complex and requires useful, well-thought decisions to be made on a daily basis. In such a huge industry, it’s hard to make accurate predictions and choices. Big data analysis is believed to be a key solution for decision making in the oil and gas industry. The concept behind this technology is simply gathering large volumes of data, sorting it properly and making an advanced analysis. Conclusions give companies invaluable insights, lets experts make decent forecasts and defines gaps in business models.
  • Reducing costs. All the technologies mentioned above can significantly cut your operational costs. As the usage of IoT and big data lets companies detect gaps and anomalies in the production, the elimination or reformation of waste processes will lead to cost savings. Also, innovations bring improved efficiency, which results in more profit.
  • Attracting the workforce. Recruiting is one of the most underestimated benefits of digitization. Oil and gas companies constantly struggle to attract young, tech-savvy talents to the industry, and digitization is a very promising solution for the issue. The 2018 Global Energy Talent Index (GETI) report stated that opportunities for remote and flexible jobs are in-demand for young employees and 48 percent of respondents referred it as an attractive feature of job in the oil and gas sector. Apart from the flexibility and new workplaces, digitization can offer employees possibilities for growth and development.

Final thoughts

Digitization is believed to transform the oil and gas industry in many ways. It can impact every stage of production, boost efficiency, reduce costs and make the sector more attractive for a young and talented workforce. Oil and gas companies should pay more attention to technology-enabled solutions in order to develop their brand image and improve performance.

If you need help with the transportation of oil and gas equipment, assets or materials, check our Oil and Gas Services page or contact us now!

Market Update: Dangerously Low Fuel Costs

oil-gas-freight-shipping.jpgThe sharp and sustained decline in the price of oil has had far-reaching consequences across the U.S. economy. There are numerous factors that have caused oil prices to drop. And now, with excess oil supply, the effects are all-encompassing, with positive and negative impacts on carriers and shippers.

Low Oil Prices are Good for Some, Bad for Others

Some industries benefit from lower oil prices, and some are hurt. The energy industry is in a deep depression, and the industrial and manufacturing industries are following in its footsteps. Industries closer to the consumer, such as retailers, are taking advantage of lower shipping costs and higher levels of consumer spending. Consumers benefit from low fuel costs, too.

Transportation, as a fuel-intensive industry, has immediate, short-term benefits of lower operating costs, and is generally considered to be aided by low fuel costs. However, this doesn’t tell the whole story, and the transportation industry, like many others, is seeing lower revenues.

The Downsides of Low Fuel Costs

While it’s true that carriers, especially trucking firms, see lower operating costs due to lower fuel costs, it does not translate into higher revenues or profits. Fuel surcharge is typically a source of revenue for carriers, and now they must lower it significantly to stay competitive. Overall line-haul rates are lower too, further shrinking carriers’ margins.

The serious driver shortage in the over-the-road (OTR) industry exacerbates these problems. As drivers leave the industry, carriers must pay more to recruit new ones, and pay their existing drivers a higher salary to retain them. These additional costs eat up profit margins.

Low priced oil affects freight volume, which can hurt trucking companies. For example, flatbed carriers are being hit the hardest by current oil prices. The almost universal shutdown of oil drilling sites in North America, and resulting pain felt by steel manufacturers, mining companies and equipment manufacturers, has led to severely decreased flatbed freight tonnage. Demand for flatbed services is now just above recession levels in 2009.

Flatbed trucking companies may experience the worst side effects of low priced oil, but all of the transportation industry is being hurt one way or another. Despite all of these issues, we may only be beginning to see how badly the transportation industry will be hurt by oil prices.

The Prolonged Consequences of Low Oil Prices

Within the next few years, there will be an oil price spike. History tells us that the longer oil prices stay low, the sharper the price will spike. Members of OPEC are confident this will happen – with U.S. shale producers and others around the world scaling back on production, the glut of oil supply will be rapidly used up, leading to a shortage for demand. Then, it’s predicted that prices will more than double in a short time.

This price spike will cause higher fuel costs, leading to lower consumer spending levels, which means less freight tonnage and revenue for freight carriers.

The spike in oil prices is predicted to happen around 2018. Around this time, carriers will be making operational changes to comply with new regulations, as well as investing in newer, more fuel-efficient equipment to replace their aging fleets. The driver shortage is expected to get even worse by 2018, and carriers will be financially stressed trying to retain their current drivers while spending more than ever on driver recruitment.

Freight tonnage, fuel, and operating costs are shockingly similar to the 2008 market for freight carriers. In the first six months of 2008, 1,908 trucking companies closed their doors. While the future spike in oil prices may not cause quite as many carrier shutdowns, carriers will be under serious pressure to streamline operations and protect already razor-thin margins for the foreseeable future.

Higher fuel costs lead to higher freight rates, but with the challenges trucking companies will face, it’s doubtful they will be able to turn the spike into meaningful profit. With the anticipated sky high freight rates, many small carriers will go out of business, a large portion of freight tonnage will shift to rail and other modes, furthering the damage done to OTR trucking revenue. You can expect everyday products, like a head of lettuce, to rise in price or experience an altered supply chain focused on local sourcing and warehousing, once again eating at trucking companies profits.

Low carrier revenues are bad for shippers too. With the obstacles carriers will face, they will be continually raising rates to break even. This inflates logistics costs for shippers, shrinking their profit margins and likely causing increased product prices. This makes it more difficult to stay competitive in the market place, especially for small carriers, and can have compounding effects throughout a shipper’s organization – altered supply chains, staff reductions and/or lost market share.

What Can Shippers Do?

Shippers will feel the pain when fuel costs rise to similar rates seen in 2014. The best way to avoid paying top dollar for fuel surcharges is to work with a 3PL. 3PLs have large carrier networks which give them leverage to negotiate lower-than-market average fuel surcharges and lower base rates.

For industrial and manufacturing companies, now is a great time to find a transportation partner. When times are tough, 3PLs find creative solutions to save money on transportation. When times are good, as they should be when oil production picks up, and steel and other mining and drilling equipment is in demand, 3PLs provide surge capacity, help manage the complexities of high freight volume, and use powerful technology to optimize freight moves based on speed and safety.

Want to learn more? Keep reading: Do I Need Logistics Help for Mining, Oil & Gas Operations?