2018 CORPORATE RESPONSIBILITY REPORT
planet

Transportation Logistics, Efficiency, and Emissions

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The management approach and its components

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Evaluation of the management approach

GRI
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Covia’s goal is to meet our customers’ needs while moving full capacity loads as efficiently as possible. Transportation plays an important role in this goal as it can significantly impact timing and costs. Covia continually invests in our leading, comprehensive, and diversified logistics and distribution network. Our network accesses all major Class One railroads and extends into last-mile solutions. By managing and improving our logistics efficiency, we strengthen customer relationships, minimize costs, and reduce climate-related impacts from fuel consumption and emissions — helping us Deliver on Promise to our customers, shareholders, and communities.

Governance

Covia’s logistics optimization model simulates planning scenarios and provides a comparison analysis of supply plans. This tool aids in both short-term, tactical planning and long-term, strategic planning, allowing us to build a transportation vision over the next five years. On a weekly basis, we use this tool to evaluate our order book, which allows us to make targeted adjustments to delivery plans and maximize the efficiency of our available operational capacity. 

Covia transports the majority of our products by rail. Whenever possible, Covia uses unit trains to ship nonstop from origin to destination, thus saving fuel, time, and delivery cost. By loading railcars to full capacity, we reduce the number of railcars and shipments needed to transport our product. This reduces both transportation costs and carbon emissions. Our supply chain team and the Sustainable Mobility SD Team identifies methods to load railcars to maximum capacity. As we reach the point of maximum loading efficiency, we seek to maintain this level.

Additionally, we actively manage our transportation logistics in the following ways:

  • Build strong relationships and communication with our transportation partners;
  • Have full-time expeditors available 24 hours, seven days a week;
  • Communicate daily with key logistics partners; and,
  • Use efficient transportation of materials via conveyors between facilities when applicable.

Performance

The formation of Covia established a leading distribution network in our industry. Our extensive network of plants and terminals enables us to cost-effectively deliver proppant to North America’s oil and gas producing basins. Likewise, our industrial products network is positioned to meet the mineral, market, and geographic needs of a wide customer base producing such staples as glass, fiberglass, roofing and ceramics. The sales and operations function optimizes plant resources utilizing high tech software to ship products to all destinations.

Consistent with our commitment to exceed expectations, Covia added the ability to offer last-mile solutions, and deliver directly to well sites. The first shipments via last-mile partnerships are planned for deployment in the first quarter of 2019.

As demand for in-basin sand grew in West Texas and Oklahoma, Covia commissioned plants that added up to eight million tons of nameplate capacity; six million tons in West Texas and two million tons in Oklahoma when fully operational, positioning ourselves to serve customer demands for increased product volumes. We also made significant improvements in Truck Loadout Optimization (TLO) to reduce the time between a truck entering and exiting our property, which helps our customers and transportation partners operate more efficiently. Together, these competitive positions improve our efficiency and ability to meet customer needs.

 

2018

Covia Volume Sold (millions of tons)

35.22*

*This is on a pro forma basis and excludes legacy Unimin’s HPQ business

HIGHLIGHT STORY
Origination/Destination (OD) Pairing Optimization Garners Significant Savings

In 2018, Covia realized significant freight savings—synergies—due to Origination/Destination “OD” pairing optimization. The combination of our two legacy companies created a logistics leader in North America for industrial minerals. For example, we are now supplying the Loving Aventine terminal in New Mexico from Wedron, Illinois, which is a BNSF-only haul. Previously, it was supplied primarily from a plant in another state requiring a two-line haul. The cost savings reflect shorter distances traveled by the product and therefore reduced energy consumption to get product to market.

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Opportunity

Covia regularly evaluates our transportation network and destination terminals needed to best serve our customers. In coming years, we will continue to maintain high railcar utilization, optimize origin-destination pairs, expand last mile solutions, and focus on Truck Loadout Optimization (TLO)—increasing loadout and delivery efficiency. When it becomes economically viable, we will also consider incorporating liquefied or compressed natural gas into our truck vendor fleet.

HIGHLIGHT STORY
Kiosks Improve Truck Loadout Efficiency in Crane, Texas

Covia was proud to introduce a new kiosk system at our Crane, Texas, location. We have seen a gradual improvement in site times and truck loadout efficiency since we established this technology. The kiosks have allowed us to eliminate 90 percent of radio communication between our loadout team and truck drivers, as they can enter their data directly into the kiosk for the loadout operator to see what the driver needs. This alone has greatly improved efficiency and safety, as the kiosks reduce confusion during radio communication and help us plan for truck traffic volume. The kiosks have also enabled us to eliminate large quantities of manual data entry and hand-distributed bills of lading (BOLs). The process has developed into a ‘hands-off’ approach for deliveries in that the driver can collect their BOL at the exit kiosk and the sales data is immediately uploaded to IFS, our enterprise resource planning system.

We recently introduced a customer feedback system to help us collect data from drivers on their experience at our facility. This feedback mechanism gives drivers a voice and will allow us to address concerns and alert us to opportunities for improvement.

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