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Global Pandemic Highlights Hazardous Locations Supply Chain Vulnerabilities

Trusted partners necessary for business continuity

Oil rig worker checking gauge

September 8, 2020

As demand for petroleum and its related oil and gas products used in hazardous locations wanes due to COVID-19, companies have had to prioritize business essentials and look for new markets. Businesses have to balance these critical needs all while maintaining the safety of their current operations and employees.

The global pandemic has highlighted an industry weakness in sourcing diversification abilities. In fact, it is common for operators to source from only three or four companies for 80% of their supply. Because of this, many manufacturers in China and nearby regions that utilize materials from China are working through months of backlogged orders. The China market is managing to rebound fairly quickly as they were the first region to close due to COVID-19 and the first to reopen for business.

According to Bloomberg, “China’s oil imports surged in May 2020 — that’s a 15% jump from April — more than the previous record set in November 2019.”1 This surge is partially due to increased local travel but also to increased strategic buying in the region.

For example, current demand for petroleum-based products and plastics used in medical products and devices has increased. With this the oil and gas industry has the opportunity to work rapidly to meet those needs. As the oil and gas industry focuses on which petroleum-based products are driving demand, the industry will see a strong recovery parallel to those markets.

As businesses begin to reopen, purchasing managers and buyers must be strategic in their selection of additional suppliers to help continue meeting increased production deadlines. It is critical to source products and materials quickly and know that they have necessary current, market-specific and trusted safety certification. Certified products have met the requirements of a specific standard, such as UL, c-UL, ATEX, IECEx, INMETRO and ECASEx. This will help manage supply chain risk and help ensure business continuity.

Manufacturers, integrators and end users should rely on a trusted certification body to help guide them to certified suppliers who will be able to meet their market-specific needs across the globe. The UL Product iQ online database allows you to locate a UL Listed product or verify a product is UL Listed by quickly and efficiently researching a UL listing, classification, or recognition, verify the use of a UL Listed/recognized product or component, or confirm a product safety standard. Registration is complimentary.

Today, trust matters more than ever. UL’s knowledgeable global experts, who have deep expertise on standards, testing, certification, inspection and advisory services, can help manufacturers, integrators and end users effectively manage safety and compliance while strengthening the supply chain in today’s global business climate. UL’s expertise spans certification of components as well as end products. We help to ensure the right components are being used in the right way to deliver a safer, compliant end product that meets market-specific regulations. Working with a trusted partner like UL can help you navigate the current landscape and be proactive, strengthening your business continuity. UL collaborates with local regulators and has a team dedicated solely to meeting the information needs of the regulatory community with the ability to deliver certification and Marks for North and South America, Europe, and Asia. With over 100 years of experience in explosion protection, UL is continually committed to working for a safer world.

Learn more about our global hazardous locations services.

 

  1. https://www.bloomberg.com/news/articles/2020-06-07/china-s-oil-demand-recovery-is-complete-with-record-import-haul

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