I have always enjoyed the book “Who Moved My Cheese” by Spencer Johnson, regarding how to deal with life’s normal changes. Who knew that the 1998 book would, in 2020, become a daily playbook?
Just like every other business and every other industry, bentonite and drilling fluids manufacturers have had to adapt quickly to changing circumstances related to Covid-19. My company was already adding new tools and systems that would allow us to cover more territory and react to customers faster in an effort to better serve distributors and contractors. This turned out to be a blessing as the Covid-19 pandemic hit. We were fortunate to have systems and standard work practices in place for a remote environment; they just needed to be expanded and rolled out on a broader scale.
Mud folks cover large territories and typically rack up many miles during any given year. If we are on the right side of the territory, someone wants us on the left — and vice versa. The challenge for sales and technical support has been to continue to provide those supports to contractors while staying safe from Covid-19. Since this challenge began in March, we utilized tools like Microsoft Teams, Zoom and FaceTime to work with drillers and put virtual eyes on the jobsite and mud. This technology has allowed us to understand site conditions much better than a normal phone call and maintain our customer intimacy.
Each week our global teams teach multiple video mud schools and technical training sessions for distribution and contractors. Video calls from an office, of course, cannot replace actual jobsite visits. But, while we do still make face-to-face visits, video is the new normal. We have a social responsibility to protect the health and safety of our customers and our teams. Many times, it is our contractors who request the video format over face-to-face interaction — and for the same preventive measures.
We will all return to normal once the virus ceases and spread is no longer a concern. During this time, my company and all others have learned valuable new skills. We can leverage those skills and lessons to increase productivity and customer service for decades to come.
Covid-19 has forced changes in every area of our lives. Here are a few that relate to the drilling fluids you use daily.
Demand for hand sanitizers and disinfectants has affected product lead-times as drilling fluid manufacturers compete for packaging. In our horizontal directional drilling (HDD) business, we produce polymers and additives shipped in small pouches or jugs. Demand has made it a challenge to acquire this type of packaging in a timely manner.
Overnight, packaging companies pivoted production to accommodate the health industry. While necessary, this resulted in lead-time spikes for regular users of small packaging. Many manufacturers had to adjust to a very different inventory problem: plenty of product with no packaging on hand. Corporate purchasing departments have increased order lead-times as they, too, enter a “new normal” world.
Bentonite field operations have continued and, at plants, production has continued. Just like every other industry, how our employees work and the safety precautions in place have changed drastically. Health screenings as employees report for and during shifts, social distancing, face masks, disinfecting, cleaning, and staggered breaks are now the new normal at plants and warehouses.
Even the shipping department has a new feel. Drivers have temperatures taken and are asked health screening questions before we allow them to drive onto the property. Truck drivers stay in their cabs and have zero contact with the plant employees. Lastly, a no-touch, no-signature procedure makes their departure from our facility touchless. The product safely leaves our facility destined for job and distribution sites.
Due to less travel around the world, the energy market plummeted. Many thought trucking costs would follow this trajectory, but truck rates are comprised of two components: the line haul rate and the fuel surcharge. Diesel fuel costs have stabilized around the $2.40 per gallon level, with fuel surcharges remaining fairly flat. However, dry van line haul rates on average nationally have increased from $1.15 per mile in April to about $2.15 per mile in Q3. Flatbed rates have pretty much paralleled the movement in dry van rates and still seem to be increasing. The number of flatbed trucks, based in the western U.S. bentonite region, also decreased during this period due to falling demand in the oil field. We expect these higher rates to persist through Q4 and perhaps even increase going into 2021.
This article publishes in the fall and I hope that, by then, the information here is irrelevant and outdated. That would mean we have controlled the outbreak and global case numbers are falling. Over the past months, our world has changed fast and often. Being ready to “pivot” is the best posture for all businesses. As Johnson wrote in his famous book, “If you do not change, you can become extinct!” We will get through this, we will be stronger because of it, and it already has made us smarter and more effective.