Sea Routes and Demand Projections: Navigating Unexplored Waters

Helping our industrial gas client assess demand and evaluate sea transport logistics for a prospective market entry.

Our Client’s Problem
Our client, a prominent industrial gas manufacturing company, had its sights set on expanding into new country markets within a region. Before committing to such an investment, they needed to gauge the demand for specific industrial gases in these markets with country level segmentation and comprehend the transportation and logistics costs of transporting gases via various sea routes. This was critical for determining the feasibility of their expansion.

Our Brief
Our client pinpointed several key country markets within their region of interest. Our mandate involved:

• Surveying and projecting the demand for specific industrial gases in these markets.

• Evaluating sea transportation logistics for industrial gases, focusing on costs, safety protocols, and transit times and the changes that happen over the course of a year.
   

Our goal was to gather insights that could inform our client’s decision on whether to expand into the targeted region and if so, how best to optimize transportation logistics.

Our Method
Pioneering insights are rooted in our founding principles of Depth and Verifiability at 4D Due Diligence. We employed comprehensive market analysis coupled with a wide-reaching network of industry insiders from the region to evaluate market demand and logistics costs. For the transportation component and estimating country-level market sizing, we collaborated with 15 maritime logistics experts from 3 leading maritime logistics companies to understand the nuances of transporting industrial gases by sea in the region.
 

Beyond just raw data, we leveraged our rapid-feedback mechanism, providing our client with interim insights as we progressed through our research, ensuring they were always in the loop and getting vital insights we gathered from each expert, in real time.
 

Client Outcomes
Our comprehensive research painted a multi-faceted picture of the region’s industrial gas market. Several of the targeted countries displayed growing demand for specific industrial gases, primarily driven by expanding industrial sectors and infrastructure development. However, certain countries within the region showcased saturated markets with dominant local players, indicating tough entry barriers.
 

In terms of sea transportation, while there were well-established routes, the logistics costs were higher than anticipated, especially when factoring in the stringent safety protocols required for transporting industrial gases. Additionally, certain routes faced seasonal disruptions, further complicating logistics planning.
 

Considering our findings, we proposed a phased approach for our client:

 

Phase 1: Prioritize entry into the countries we identified with demonstrable demand and limited competition in the region.

Phase 2: Consider establishing regional production hubs in the long term to mitigate long-term transportation costs.

 

Phase 3: Explore partnerships with local maritime logistics firms to optimize sea route transport efficiency and costs.

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Following our recommendations, our client decided to initially venture into two of the targeted countries, where demand was on the higher side and barriers were the lowest. Concurrently, they initiated discussions for potential regional production hubs, leveraging sea transport only for initial market penetration before they consider transitioning to localized production in the future.

With our insights, the client confidently navigated their expansion strategy, ensuring optimized investments and a clear path to move ahead in the new region.