Creative distribution techniques can help market penetration of industrial minerals

During the 1980s, a revolution has been taking place in industrial minerals marketing. Transportation deregulation and a handful of creative marketing and distribution managers have completely changed the rules for marketing many industrial minerals. Minerals are being transported much farther than in prior decades and at much less cost. Bulk and package terminals are becoming increasingly common as a means to take advantage of freight rate savings and to provide enhanced service to faraway customers. Water and rail transportation are being used increasingly to penetrate markets considered unreachable just a few years ago. No longer do the textbook rules of thumb for industrial minerals marketing apply. This author recalls three of those rules he was taught in mineral economics graduate school in the 1970s. As recorded in class notes: • construction aggregates are seldom shipped more than 32 km (20 miles) from the quarry; • cement is sold within 240 km (150 miles) of the mill; and • industrial sand is sold regionally - it is freight constrained to a market radius of no more than 320 to 400 km (200 to 250 miles) from the plant. And yet, the author looks up in 1989 and observes overland movements of aggregates of many hundred miles, overland movements of cement and industrial sand of 1600 km (1000 miles) or more, and water movements of both aggregates and cement into the United States from sources halfway around the world. Truly, industrial minerals are in the midst of a marketing revolution. The companies that have led this revolution have enjoyed considerable financial success in the 1980s. They have enhanced their profitability by increasing market share, capacity utilization, and average selling prices by taking product to remote markets where premium prices are available. They have consistently outperformed their competition, many of whom remain unaware that the marketing revolution going on around them is actually a transportation/distribution revolution. The successful industrial minerals company of the next 10 to 15 years must participate in the transportation revolution as it continues to evolve. Additional human and capital resources must be committed to maximize the effectiveness of a company's transportation and