Improving supply chain performance
The potential environmental impacts of fertilizer production, with the possibility of emissions, and of fertilizer use, with the risk of nutrient losses to the environment, are fairly evident. The issues are not as obvious in the distribution sector, but they should nonetheless be taken seriously and addressed accordingly.
The potential negative environmental impacts of mineral fertilizer distribution include accidents in storage facilities, spillage, dust from the handling of bulk products, misuse of the products and losses of nutrients to the environment during transport and storage. The distribution system can also have positive impacts: Fertilizer Best Management Practices depend on the ability of the farmer to access fertilizer at the time and in the form required for optimum use, which, in turn, requires an efficient fertilizer distribution system.
Consumer protection aspects should not be overlooked. Mineral fertilizers can easily be adulterated and the farmer is normally unable to check the quality. The quality and labeling of mineral fertilizers is carefully regulated in developed countries and regulations are enforced. In developing countries, even where regulations exist, enforcement is frequently inadequate, due to lack of institutional capacity and/or political will. The result is inefficient, wasteful and environmentally harmful use.
The fertilizer supply chain in its entirety is comprised of transportation by maritime shipping, rail, barges and lorries. During this long distribution chain, immediate responsibility for the movement of the products shifts among some combination of raw material producers, fertilizer manufacturers, shippers, traders, retail distributors and farmers.
During the past thirty years, both the size and the structure of fertilizer trade have changed significantly. Nitrogen products used in some major markets, such as North America, are now travelling longer distances than when there was greater domestic production. On the other hand, more mineral ores are being processed near their point of extraction, which means that the transported product has a higher nutrient content. Future growth in fertilizer consumption is expected to occur mainly in Asia, South America and Africa, where trucking is the primary means of domestic distribution.
In operational terms, methods to reduce the environmental footprint of fertilizer trade and distribution include shifting modes of transportation, using energy efficient fuels, freight consolidation services, optimizing warehouse and logistic systems, installing bulk handling equipment that captures dust and installing vehicle catalysts to scrub exhausts. There are also indirect methods to reduce the environmental impact of freight, such as shipping fertilizers in dry versus liquid forms or shipping higher-grade products that have a greater nutrient concentration.
Not only is the potential environmental impact of fertilizer distribution often under-estimated, but so too is its economic impact. Under favourable circumstances, the cost of distributing and marketing fertilizers equals about one-third of the production cost. Under unfavourable circumstances it can amount to three times the production cost. In the case of a modern, well-run, large-scale fertilizer plant the possibilities of further cost savings are minimal, whereas the possibility to increase efficiency in the distribution and marketing sector is often still significant, especially in developing countries.
The fertilizer industry is engaged with decision makers in developing countries, particularly in Africa, in order to contribute to the implementation of regulations, institutions and partnerships that will foster the development of an effective and efficient fertilizer distribution system.