Helium Procurement Intelligence Report, 2024 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

The geographical location, scale of business, transportation and logistics, type of business, order volumes, and purchase frequency play a vital factor in analyzing the rate benchmarking of the helium category.

Transportation and logistics is a critical factor in this category since helium is an inert gas that is perfect for ultra-low-temperature applications. Helium turns into a liquid at minus 269 degrees Celsius. There are numerous difficulties involved in moving helium from its source to the site of application at temperatures near to absolute zero. Hence, companies such as Linde and Messer have developed their own special cryogenic transportation or special super vacuum insulated tank containers to address these challenges. Each of the containers can hold more than 40,000 Liters in capacity. As a result, fluctuations in transportation or fuel prices in different countries can impact prices dramatically.  

The European Road Freight Contract Rate Benchmark Index for the second quarter of 2023 was 126.9. This was 2.8 points higher than Q2 2022 but 0.2 points lower than Q1 2023. Due to diminishing demand and economic slowdown in the region, road freight transport prices in Europe continued to decline in the second quarter of 2023. However, as of September 2023, the prices of road transportation or road freight rates remained 12% to 15% higher on average in Europe compared to 2022. The increase is much higher than the pandemic, reflected by an increase in the haulier, fuel, and labor costs.

It was observed that at the end of August 2022, despite the growing demand for transportation services, there was still a labor shortage in the European region which in turn hiked up prices. For instance, in Germany, there were about 65,000 shortages of professional drivers, compared to 40,000 - 50,000 in France and between 10,000 and 15,000 in Spain in 2022.  

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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.

According to our research, chemical engineers at Linde and Messer Group receive a 20 - 25% higher base salary compared to the salary received by chemical engineers working in companies such as Iwatani Corporation and Taiyo Nippon Sanso Group. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the helium category over the last two years:

• In January 2023, Aspen Air US, situated in Billings, Montana, was acquired by Iwatani Corporation. The deal helped Iwatani to expand its specialty gas business segment and aimed to help customers in underserved areas in the North American region.

• In December 2022, The CERN laboratory in Geneva, Switzerland, received two identical helium cryogenic refrigeration units from Linde Engineering's Linde Kryotechnik division. More than 50% of the refrigeration capacity needed for the LHC (Large Hadron Collider) was provided by Linde. With the LHC, the researchers can test the predictions of several particle physics theories.

• In September 2022, a contract was awarded by NASA to Air Products & Chemicals, Messer Group, and Linde for the supply of helium. The gas is used by NASA on the International Space Station and in other otherworldly endeavors. The contract was estimated to be around USD 149 million. Helium would be purchased by NASA both in liquid and gas form. The total is estimated to reach 87.7 million standard cubic feet of gas and 14 million liters of liquid helium.

• In April 2022, to recover the helium stored in Freeport LNG's Texas production facility, Linde declared that it had struck a new, long-term helium off-take agreement. It would also develop a new processing facility in Freeport for the purpose of cleaning and liquefying the recovered helium to secure a second source of liquid helium in the U.S. It is anticipated that the project will begin operations in 2024. The deal will add about 200 million cubic feet of helium to Linde's supply line.