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GLOBAL CARGO IS LEAVING ON A JET PLANE

cargo

GLOBAL CARGO IS LEAVING ON A JET PLANE

With the ongoing threat of COVID-19, airlines have seen a precipitous drop in passenger travel and are focused on the possibility of a voluntary or mandated halt to U.S. passenger flights. In response, major carriers are finding ways to keep flying during the global health crisis.

American Airlines and United Airlines, for example, have offered their passenger aircraft for charter cargo flights. Even in normal times, the lower deck of passenger aircraft carries cargo to maximize the utilization of space. With the sharp scale-back in passenger travel, however, the companies are offering dedicated cargo runs to deploy their assets and replace revenue while helping to keep supply chains moving and facilitate the shipment of essential goods.

Attention All Passengers:

Many air travelers don’t realize that it’s not just their own and fellow travelers’ luggage that checked in for their flights. The big passenger airlines generally have a lot of available space in their bellies. With operating costs covered by passenger tickets, the airlines often generate supplemental revenue by carrying packages, freight or mail for the U.S. postal service on board passenger flights.

In turn, cargo shippers secure relatively cheap space and can get goods close to their ultimate destination given the dense network of airports serving passenger flights around the world. Even logistics players like UPS and FedEx partner with passenger airlines, particularly in emerging markets where trade volumes may not justify the deployment of their own regularly-scheduled aircraft. Technology tools enable precise coordination to ensure goods off-loaded from a freighter aircraft make their departure on a passenger aircraft and vice versa.

Cargo split

The trend is taking off. The International Air Transport Association (IATA) has been cited as estimating the split between cargo carried by passenger airlines and freighter aircraft at 60/40 and forecasts that will grow to 70/30 in the coming years.

In 2018, American Airlines moved 2 billion pounds of cargo and raised $1 billion of cargo revenue despite not operating cargo aircraft. Airlines based in Asia such as Korean Air and Cathay Pacific do have freight fleets, but still carry more than half of their cargo in the bellies of passenger aircraft. McKinsey has noted that with the expansion of the major Middle Eastern passenger carriers and new aircraft designs with large belly-cargo configurations, the belly capacity of Middle Eastern carriers flying into Europe in 2016 equaled the capacity of more than 100 weekly Boeing 777 freighter flights.

Open Skies

“Open Skies” agreements governing the transport of people, pallets and packages are designed to enable market forces to guide decision-making about routes, capacity, and pricing. Critically, Open Skies agreements also provide both passenger and cargo flights unlimited market access to partner markets and the right to fly to all intermediate and beyond points. The United States now has Open Skies agreements with over 100 partners around the world, including both bilateral agreements and two multilateral accords. So-called fifth freedom rights – also called beyond rights – are a core element of Open Skies agreements, permitting a carrier to fly to a second country, offload passengers and cargo, pick up new passengers and cargo, and continue on to a third country.

Over 100 Open Skies

While Open Skies agreements provide benefits to both passenger and cargo carriers, cargo carriers to a large extent fly international packages and freight themselves, while passenger carriers utilize codeshare agreements and worldwide alliances. The different business models and complex tie-ups can produce a divergence in interests. A prominent example was the dispute between the “Big Three” U.S. passenger carriers – American, Delta, and United – and the governments of the United Arab Emirates (UAE) and Qatar, who the carriers alleged were providing billions of dollars in subsidies and other benefits to their state-owned carriers: Emirates, Etihad, and Qatar Airways. Among other serious concerns, this raised red flags about subsidized fifth freedom operations (e.g., Newark-Athens-Dubai) and the potential for their expansion, negatively impacting U.S. passenger airline service to the Middle East and India.

U.S. Airlines for Open Skies, a coalition that included FedEx, Atlas Air, the Cargo Airline Association and JetBlue (which has a code-sharing agreement with Emirates), opposed the call of the Big Three for restricted Gulf fifth freedom rights (a violation of the U.S.-UAE and U.S.-Qatar Open Skies agreements if restricted involuntarily). The cargo carriers expressed concern that challenges to the Open Skies accords with Qatar and the UAE put at risk the fifth freedom rights that cargo carriers depend on for their complex global networks. They discounted the view that the U.S. could breach passenger fifth freedom rights without setting a dangerous precedent for the equivalent all-cargo rights.

The dispute was ultimately resolved in 2018 through U.S. government agreements with the Qatar and UAE governments under which the parties acknowledged that government subsidies adversely affect competition and committed to financial transparency and business on commercial terms.

Air Cargo Players

In the Upright Position for Takeoff

As passenger carriers step up to support cargo at this extraordinary time, you may not know that from 1997-2001, UPS also ran passenger operations. For a period of years, the company had contracts with tour companies and cruise lines to offer vacation flights as well as charters for college and pro sports teams, politicians, the press corps and others. In under four hours, a 727-100QC could be ready to carry 113 passengers. See here for the UPS Quick Change process.

Air cargo capacity is critical at this time of crisis and the airlines’ role is deemed a critical infrastructure industry by the Centers for Disease Control and Prevention (CDC). American Airlines reports that its recent cargo-only charter carried medical supplies, mail for active U.S. military, and telecommunications equipment and electronics to support people working from home. United’s wide-body charter cargo flights are likewise getting critical goods into the hands of businesses and people in need. Stakeholders across the cargo and passenger industries look forward to a post-pandemic era where all can return to their respective roles in transporting people and cargo globally, described well by United’s slogan “Connecting People. Uniting the World.”

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Leslie Griffin is Principal of Boston-based Allinea LLC. She was previously Senior Vice President for International Public Policy for UPS and is a past president of the Association of Women in International Trade in Washington, D.C.

This article originally appeared on TradeVistas.org. Republished with permission.

risk

How to Get a Handle on Risk in Uncertain Times: 10 Important Considerations

Risk: It’s the operative word on everyone’s mind right now. Whether it’s COVID-19 or oil prices, supply chain impacts or financial market concerns, understanding the impact of macro and micro-events, assessing their impact and putting in place the right action plans to mitigate that risk as best as possible is the priority task at hand.

Here we’ll examine ten steps to consider to ensure you’re being as thoughtful and rigorous as possible in your response to risk.

1. Take Care of Your PeopleHopefully, this has already been priority number one for your business after the past few weeks. How do we safeguard our people? How do we handle work from home – voluntary versus mandatory? What other flexible resourcing options do we provide – from sick leave to absenteeism considerations? What are the IT implications and subsequent human resource and capacity management concerns we need to consider and fully factor in? Err on the side of caution. Better to be safe than sorry.

2. Analyze Internal Risks – Before you can do that, you need to galvanize the right teams to be able to understand, assess and action against those risks. It’s critical to build the right cross-functional teams to be able to look at, and understand, the relevant issues to consider. This will involve finance, R&D (depending on your business) and marketing and sales. It will also involve teams like quality and sustainability leaders, as there will be implications and follow on ramifications despite your very best efforts.

3. Conduct Scenario Analyses – For critical categories, it’s important to get a handle on what alternative demand/supply options are. What are the pessimistic versus expected versus optimistic cases depending on what happens with the current situation, both in terms of the pandemic but also in terms of current and expected economic conditions? As part of any such assessment, you’ll need to score, assign probabilities and weights and adjust your thinking and actions accordingly.

4. Talk to Customers –This doesn’t tend to be the first thing people think about when it comes to procurement, but understanding the demand side implications for your business will be essential. How will demand be disrupted? Will there be specific products in your portfolio that will be more directly or severely impacted? Will this result in demand cutbacks or surges? Where will you source supply from? Can you cut back supply needs for others? How will buying patterns change – will there be channel shifts from offline to online? How does that play out in terms of critical suppliers and critical buys and requirements in the near to medium terms? Maintaining a dialogue with customers to understand their needs and issues and where all of this plays through for your team is essential.

5. Develop Plans for Strategic Categories –You’ll need to revisit your plans and the related risks around your most critical categories during a time of crisis. Make sure that these plans have been reviewed, the pressure points tested, the risk points analyzed and alternative plans considered. This could mean enhancing inventory levels (and rethinking inventory buffers based on the scenario planning we talked about earlier), assessing implications for delivery performance, gaining a view of multi-tiered supplier performance, increased inbound category visibility and more.

6. Examine Logistics Implications – By the same token, businesses must assess the logistics implications both inbound and outbound, either to make products or to ensure delivery. This has cost and timeline implications. All modes of transportation can be seen to be impacted, not least of which is shipping impacts – especially to and from China, but elsewhere, as well – whether these impacts are halts on movements, ramp downs, or the subsequently phased ramp back up. Or bypassing some of these options and going to airfreight which presents another level of cost to timeline tradeoffs.

7. Assess Liquidity – This will be critical and will call for a stronger partnership and alliance with finance. Looking at cash positions, assessing payables, and of course extending that into receivables, etc. will be essential. Add to this, talk of tightening credit markets and this makes it all the more important. Cash as always will be king if we need to endure near term instabilities, revenue disruptions, supply chain impacts, sourcing problems, and more

8. Assess Supplier Health – Part and parcel to all of this is assessing supplier health and evaluating who will be the most impacted. A clear view of your supplier segments – strategic versus mid-tier versus everyone else – is essential so you can focus your time and analysis accordingly.

For the most strategic suppliers, it’s critical to have a multi-tiered view of their supply base and related dependencies so you can adequately assess their performance and supply chain bottlenecks. This will involve structured risk analyses – looking across multiple variables beyond financials, to operational performance, to industry performance factors, to geographic and locational concerns and more. You’ll also need to identify alternate supply sources to shift production as and where needed, and as quickly as possible. Not all of this can be done at a moment’s notice. Some of it should have been done as part of a prior risk assessment exercise.

9. Think Ahead – Businesses can’t afford to simply think about today. Consider what the next three to six months look like. This is where scenario planning comes into play. It is critical to assess not only how you can react now but also how to prepare for eventualities later, when things are either fully back to normal or in some altered state based on longer-lasting ramifications from the events of today.

10. Work With Facts and Manage Emotion – Fundamentally, the most important thing you can do is to continuously monitor changes in a structured fashion. Have a programmed information collection and analysis mechanism. If we accept that the crisis is still unfolding and that the true impacts from a supply chain disruption perspective may not reveal themselves for months, we need to take tangible steps.  This can be done by establishing a process to monitor other regions outside the infected areas that could be impacted. Are ports outside the infected areas being impacted through disruption or through new regulations to protect against transmission of the virus?  Are suppliers struggling financially without access to the Chinese markets, jeopardizing their viability? Data will be important but data converted to relevant insight for your specific supply chain situation will be essential.

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About the author

Omer Abdullah is Co-founder and Managing Director of The Smart Cube and is responsible for managing the company’s Americas business.Omer has more than 25 years of management consulting, global corporate and industry experience across North America, Europe and Asia.

 Prior roles include A.T. Kearney (North America), Warner Lambert (USA) and The Perrier Group (Asia-Pacific). Omer has an MBA from the University of Michigan at Ann Arbor, USA and a BBA from the University of East Asia.

disruptions

How Companies can Rethink Supply Chains to Deal with Disruptions

The coronavirus has disrupted U.S. companies in many ways, and nearly three-fourths of them have seen their supply chain significantly affected.

While China has begun slowly reopening as the number of coronavirus cases there decreased in recent weeks, reports of the illness shot up in other countries, and the epicenter of the pandemic shifted to Europe and then the U.S. Thus, multiple supply chains have been compromised as the outbreak spreads, and there’s no telling when those links in the various chains will operate at normal capacity.

“There are waves of effects coming even if Chinese manufacturing gets back to full-go,” says Hitendra Chaturvedi, a professor at the Supply Chain Department of W.P. Carey School of Business at Arizona State University and an expert on global supply chain sustainability and strategy.“As the coronavirus has spread globally, drops in different trading partners’ ability to supply is felt everywhere.

“What this is showing, especially in the U.S., is we need to reassess supply chain strategy and make it stronger to withstand unforeseen, major disruptions.” Chaturvedi outlines some possible outcomes in U.S. supply chain strategy as a result of the coronavirus:

Learning that cost is not the only consideration. Chaturvedi says that when companies in the future plan their overall global supply chain strategy, they may decide that paying more to establish a more resilient and flexible process would be worth it by reducing risk. “Companies typically find the lowest-cost supplier, but if you have a single source, you’re vulnerable, and that’s what’s happening now,” Chaturvedi says. “This will move companies more toward mitigating risk. That requires making investments. They could stabilize their supply chains by enlisting alternative suppliers, boosting inventories or investing in more diverse ways of distribution.”

Localizing more manufacturing and transporting. “Dependence on China for their manufacturing has put small and midsize businesses in jeopardy,” Chaturvedi says. “The pandemic exposes the vulnerability of companies that rely heavily on a limited number of trading partners. What will result is businesses will look to restructure their global supply chains, and some companies will look at localizing more than they would have in the past. A shift in that direction had already started during the U.S.-China tariff fight.”

Planning for future disruptions. Another result of the pandemic’s impact on supply chains is it will compel companies to anticipate disruptions in the future and build in quick responses to their supply chain. This involves a process called mapping, in which companies engage suppliers in order to better understand their sites and processes. “It’s imperative for businesses running a global supply chain to be in the know about news that could cause disruptions,” Chaturvedi says. “You have to be proactive and not reactive. Knowing where the disruption will come from and how that will impact their products allows companies to lead time and the ability to create a mitigation strategy.”

Utilizing technology. Chaturvedi expects to see a rise in the use of AI, chatbots, the internet of things, and robotic process automation to facilitate supply chains. “This will be done not only as a pretext to bring manufacturing jobs back from China,” Chaturvedi says, “but also for purely selfish reasons because bots do not get sick.”

“The impact of the coronavirus pandemic on supply chains has given new meaning to the word ‘disruption,” Chaturvedi says. “We’ve never seen anything quite like this, and businesses can learn a lot from it that will help their supply chain process in the future.”

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Hitendra Chaturvedi  (www.wpcarey.asu.edu/people/profile/3541031) spent over 30 years in progressive technology leadership positions with Microsoft, Newgistics, E&Y e-Business and A.T. Kearney. Chaturvedi also built a $100 million software company in India, GreenDust, where he implemented proprietary reverse logistics software at Amazon, Flipkart (Walmart), Samsung, Panasonic and Whirlpool. A computer engineer with a master’s degree from Louisiana State University and an MBA from Southern Methodist University, Chaturvedi has been widely covered in the media and is a subject matter expert on global supply chain strategy, sustainability in supply chain, reverse logistics, ecommerce, artificial intelligence and machine learning. Now a professor at Arizona State University, Chaturvedi has been a visiting professor at Southern Methodist University, University of Texas-Dallas, Penn State and Purdue.

coronavirus

How Downtime Forced by Coronavirus Could Be An Entrepreneurial Opportunity

For would-be entrepreneurs who have longed to turn a side hustle into their main hustle, the shutdown created by the coronavirus may have provided that long-awaited opportunity.

Often, a lack of time is one of the major reasons people give for not starting their own businesses. But these days – with everyone urged to stay home and outside activities limited – those newfound extra hours could be invested in taking steps toward creating that business, says Shravan Parsi, CEO and founder of American Ventures, a commercial real estate company, and ForbesBooks author of The Science of the Deal: The DNA of Multifamily and Commercial Real Estate Investing (www.scienceofthedeal.com).

“It definitely takes effort, energy, and a willingness to step out there, but the rewards can be great,” Parsi says.

Parsi was a full-time pharmaceutical research scientist working 9 to 5 and dabbling in real estate on the side when he realized his regular job was hampering his real estate deals because he wasn’t available to talk with people or show a house during the day. Eventually, he bid farewell to his old career and launched his new one in commercial real estate.

Parsi has a few tips for those who long to shake loose from their current careers and venture into something that drives their passions:

Be bold and flexible. A willingness to take chances and adapt to changing circumstances is critical. Even in seventh grade in his native India, ambition boiled in Parsi. He realized that to become the kind of global leader he aspired to be, he would need to know English. So, he transferred to an English school. “My parents supported my decision even though they knew it would be challenging,” he says.

Be interested in everything and observe closely. You never know when opportunities to expand your knowledge – and be inspired by new ideas – will present themselves. Parsi says he learned this lesson at age 14. His father was a doctor who himself invested in real estate as a passive investment and was having a two-story house built – one story for the family and one as a rental. “He pointed out that I had time to kill over summer vacation and recommended I watch the process,” Parsi says. “So my brother and I watched the construction and supervised the contractors. It left a strong impression on me.”

Pivot when necessary. Life doesn’t always go as planned – as the coronavirus has shown – so you need to be prepared to change direction, Parsi says. As an example, Parsi originally planned to follow in his father’s footsteps and become a doctor. But admission to medical school in India is highly competitive and he missed the cutoff criteria by one-tenth of a point. That’s when he pivoted and became a pharmaceutical scientist instead.

Learn how to sell anything. At different periods in his life, Parsi worked in a cell phone store, sold Amway products, and sold nutritional supplements. Those experiences weren’t always the best, he acknowledges, but he did gain something from them. “I realized that if I can sell the products and a story and recruit others, then I can sell anything,” Parsi says. “Selling is a pivotal skill most entrepreneurs must have.”

Anyone who is inspired to get their entrepreneurial drive moving during the current downtime should not completely throw caution to the wind, Parsi says.

“I did not quit my pharmaceutical job right away,” he says. “I had an objective to stay in that job until the real estate income was twice the value of my salary. When I hit that objective – when real estate was no longer a side hustle – I decided it made sense to invest more time in real estate than the scientific position.”

Now American Ventures is a successful multifamily and commercial real estate investment firm with a proven track record.

“Never settle for less,” Parsi says.

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Shravan Parsi, CEO and founder of American Ventures, a commercial real estate company, is author of The Science of the Deal: The DNA of Multifamily and Commercial Real Estate Investing (www.scienceofthedeal.com). Parsi is an entrepreneur and innovator with a background in the diverse fields of real estate investing and pharmaceutical research. He has been involved in Texas real estate since 2003. Born in India, Parsi developed a life-long interest in business and investing from watching his father, a medical doctor, invest in real estate. Parsi has acquired several apartment complexes in aggregate of over 4000 units  and several commercial properties by co-investing with private equity groups, pension funds, sovereign wealth funds, family offices, and accredited investors.

response

Global Trade Magazine Launches COVID C.A.R.E. Business Response Program

Global Trade Magazine is ramping up efforts in supporting global businesses by utilizing a new set of tools found in its technology toolbox. Companies capable of adapting their technology through the crisis are doing so at a record pace as leading automotive giants are now churning out respirators instead of automobiles while whiskey producers scramble to make hand sanitizer to help meet demand. Global Trade Magazine is doing the same thing for global businesses and their customer base.

“Responding to global business leader and customer questions and concerns will be more critical than ever now. Doing so effectively is a monumental task for many global trade players, yet doing so will be the difference in businesses keeping their operations moving and laying off hundreds or even thousands. We’ve re-engineered our Artificial Intelligence product to meet customer demands,” stated Eric Kleinsorge, CEO and Publisher of Global Trade Magazine.

The Global Trade COVID C.A.R.E. (Coronavirus Automated Response Effort) Local Response Program takes a unique approach in supporting global businesses and their efforts in responding to customer concerns by utilizing AI response systems. This integrated system Records, Responds, Alerts, Prioritizes and Completes requests from customers that need information and answers from global businesses in the global trade community. Instead of fearing this change, the Global Trade Mag team linked arms and stepped up to the challenge. From receiving requests and concerns to automated feedback, request prioritization, and system follow-ups, the Global Trade Response Program offers an integrated system of checks and balances that captures every request from every customer.

“We have been in the business of helping global companies communicate with their customers and now it’s our turn to help these businesses communicate and update these customers,” Kleinsorge concluded.

To request information on how this program can help your business, please click here or call (469) 778-2606.

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About GSLI/Global Trade Magazine

Global Site Location Industries (GSLI) is the parent company of Global Trade Magazine and was founded in 1994 by Eric Kleinsorge with a very specific goal in mind: grow local and global communities while bringing business projects to life through strategic economic development partnerships and customer management strategies. He is recognized in over 110 articles as an industry expert and has conducted interviews with well-known figures including George W. Bush, Colin Powell, Jay Leno, Jerry Jones, Rudy Giuliani, Mike Dell, and many more.

Not only do the companies support community and global branding, but we bring company goals to life through a tailored approach to attracting sustainable businesses and customer partnerships. We take pride in our reputation as an expert in assisting expanding and relocating companies partner with the world’s finest companies. For more than 20 years, GSLI has been the premier partner of choice for companies– both big and small, looking to create a solid economic and customer foundation primed for growth and success.

maintaining

Maintaining Business-as-Usual When Nothing is Usual

As we watch the evolving global response to the COVID-19 pandemic, it is abundantly clear that organizations are facing a business continuity challenge for which most had not precisely prepared. With little to no strategic planning for it, organizations are being forced to shift from an on-premises employee base to a remote distributed workforce. The choice is clear, shift or shut down, and those trying to shift have significant hurdles to overcome. Enterprises need to protect their employees and ensure business operation continuity by making this immediate pivot to a remote workforce.

The aforementioned hurdles are numerous, indeed. A few key ones fall around maintaining compliance, ensuring security with developmental practices and keys, and maintaining visibility into risk when monitoring tools are overwhelmed with signals.

Uncompromised Compliance

Meeting compliance rules in a diverse IT ecosystem is arduous on the best of days but can be overwhelming for organizations dealing with the unanticipated tide of remote workers, non-controlled devices, and unmanaged locations. Yet without access to the business-critical and sensitive information required to perform job responsibilities, productivity would grind to a halt.  Organizations meet the competing priorities of employee access and regulatory compliance in spite of an ongoing pandemic. Compliance frameworks such as SOX, HIPAA, HITECH, and PCI, require implementing and monitoring a large number of controls to ensure compliance, even with remote workers. This is a herculean task, especially across multiple clouds, sites, and external work locations.

In order to establish compliance, many compliance frameworks require organizations to begin with a risk-based assessment of the ecosystem. The information gathered from this assessment determines what controls are necessary and how they can best be configured to integrate with the environment. For organizations needing to move swiftly, it is absolutely essential to utilize automated tools to manage this process and ensure that no controls are left out or partially implemented. Even after implementation, the ecosystem should be reviewed and monitored in order to maintain continual compliance.

Remote Development

Developers working from home come with the challenge of ensuring the codebase that they are working on is secure and that it can safely be moved through the development lifecycle. Fortunately, developers have already been moving down this path with the development lifecycle in the cloud using a CI/CD pipeline to streamline and automate the process from development to production. However, this requires the issuance of high-privileged keys to developers to move code between environments and execute the code. Protecting these privileged keys is challenging and can leave individuals with excessive rights that violate the principle of least privilege. In the worst scenario, a bad actor could insert malicious code, self-promote the code all the way into production, and have the code execute with a permanently issued privileged key, all without any checks along the way.

The best way to ensure that the CI/CD pipeline remains secure is to ensure there are zero standing privileges when they are not directly needed to perform functions in the environment. To aid in this effort, storing privileged keys and using a system to programmatically check them out at the time of code execution allows them to be available when needed but otherwise keeps them inaccessible. This can further be improved upon by using scoped keys that have an expiration built into them so that even if a high-privilege key was compromised, its ability to be utilized by bad actors is limited.

In order to maintain compliance, it’s also important for a solution to see and control when a developer may have a risky or toxic combination of access, such as the capability of both writing code and performing QA on that code. Keeping these duties separate is key to preventing poor code hygiene, and it also reduces the risk of a backdoor being written in and pushed into production.

Pinpointing Anomalous Behavior

When dealing with multiple external workers and the sudden change in traffic, the vast amount of real-time activity and behavior data coming in from different areas can complicate visibility into anomalous behavior. An IT ecosystem that ranges from on-premises assets to multiple clouds generates a huge volume of log data, and SIEM tools and vulnerability scans only add to the total. Each of these is generally contained in its own environment and has separate interfaces for reviewing and monitoring, and there is limited correlation to find anomalies that might not be readily apparent from any given individual interface.

While managing a strong remote work environment, an organization is going to need to double down on monitoring. In order to understand holistic risk and keep from missing trends only visible when broader data is analyzed, organizations should seek ways to integrate the data from these disparate systems to attain visibility not possible from looking at each as a silo. A quick response can make the difference between a bad actor being stopped cold and walking off with the keys to the kingdom.

When Business IS Usual

Whether adapting to a pandemic or evolving to follow the trend of offering remote work to attract top talent, ensuring your organization’s data is secure is top priority. Even when the IT landscape of your organization changes, you need to maintain business continuity with solutions that include automated response to risk while documenting continual compliance. Whether securing file access or enabling software development, ensuring only the right people have the right access to the right digital resources at the right time should be more than a clever catchphrase. It should be business as usual.

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Diana Volere is a strategist, architect, and communicator on digital identity, governance and security, with a passion for organizational digital transformation. She has designed solutions for and driven sales at Fortune 500 companies around the world and has an emphasis on healthcare and financial verticals.  In her role as Saviynt’s Chief Evangelist, she delivers Saviynt’s vision to the community, partners, and customers, addressing how to solve present and future business challenges around identity.  Her past twenty years have been spent in product and services organizations in the IAM space. Outside of work, she enjoys travel, gastronomy, sci-fi, and most other activities associated with being a geek.

small business

How to Lead a Small Business Through Coronavirus and other Troubling Times

With the coronavirus shaking up the economy and upending the day-to-day operations of businesses, it’s perhaps more critical than ever that corporate CEOs and small business owners summon up all their leadership skills.

Employees who usually are just down the hall are now working remotely from home. The supply chain is disrupted. And customers and clients may be changing their spending habits.

But, as important as business savvy and financial expertise can be in riding out all the economic effects of the pandemic, other traits also come into play and maybe just as essential, says Marsha Friedman, a successful entrepreneur who still leads a business she launched three decades ago.

“One of those essential traits is courage,” says Friedman, founder and president of News & Experts (www.newsandexperts.com), a national PR firm. “Thirty years ago when I started my company, I probably would never have said it takes courage to lead a small business, but without it, I assure you, you’ll fail.”

Friedman, who is also the ForbesBooks author of Gaining the Publicity Edge: An Entrepreneur’s Guide to Growing Your Brand Through National Media Coverage, understands this first-hand. Her firm, like many businesses, endured tough economic times after the 9/11 attacks. Revenue dropped and bankruptcy loomed as a real possibility.

“I had to figure out how to turn my company around,” she says. “It took courage, endurance, and perseverance, but I knew I could not go back, so I had no choice but to go forward.”

Courage is just one of what Friedman calls the 5 C’s for building and maintaining a successful business through good times and bad.

“They’re the guiding principles I’ve learned through the ups and downs and all the mistakes,” she says. “They can work during the difficulties we now face as well.”

In addition to courage, Friedman’s other C’s are:

Caring. First, care enough about yourself and your dreams to believe you can achieve success even in these daunting times, Friedman says. “Just as important is caring about your staff and creating a positive work environment for them despite the troubles we face,” she says. “Be supportive of them throughout this situation that is bringing additional stress to everyone’s lives.” Finally, a good business leader cares about customers, Friedman says. Be willing to listen to their concerns, take responsibility for mistakes, and correct them.

Confidence. Most people have faced and overcome challenges in life. The confidence that allowed them to prevail over those challenges needs to be brought into play in business more than ever right now, Friedman says. “Believing you can reach for and achieve your short-term and long-term goals is essential to getting you there,” she says. “Maintaining your confidence is important to get through these unsettling times.”

Competence. It’s critical to stay up on the disruptions in your industry that the coronavirus is causing. “If you’re forced to downsize, this may be the time to reorganize and tap into the skills and abilities of your remaining team that are different from the roles you hired them for,” Friedman says. “That’s why it’s always important to have hired competent people who you can rely on no matter what the situation.”

Commitment. Stay dedicated to your goals no matter how difficult that becomes during these challenging conditions. Friedman says there may be times when this will be not only difficult but downright painful. That was the case for her during those tough times after the 9/11 attacks. “I had to make drastic cuts, including letting go of beloved employees,” she says. “But I never wanted to suffer a failure, and so I stayed committed to the goal and succeeded in pulling the business through those rough times.” 

“As we face the current challenges, you have to stay the course, remain positive and show caring for everyone related to your business,” Friedman says. “Most of all, no matter how dismal it seems right now, you need to have confidence that you are going to get through it.”

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Marsha Friedman, ForbesBooks author of Gaining the Publicity Edge: An Entrepreneur’s Guide to Growing Your Brand Through National Media Coverage, is a successful entrepreneur and public relations expert with nearly 30 years’ experience developing publicity strategies for celebrities, corporations and professionals in the field of business, health and finance.  Using the proprietary system she created as founder and President of News & Experts (www.newsandexperts.com), an award-winning national public relations agency, her firm secures thousands of top-tier media placements annually for its clients.  The former senior vice president for marketing at the American Economic Council, Marsha is a sought-after advisor on PR issues and strategies, who shares her knowledge both as a popular speaker around the country and in her Amazon best-selling book, Celebritize Yourself.

business

Keeping Your Business on Track During the Coronavirus Outbreak

The coronavirus outbreak, which is severely affecting business operations around the globe, was recently declared a global pandemic by the World Health Organization. C.H. Robinson continues to monitor the situation in the U.S. and globally, staying close to our contract carriers and discussing continuity plans in the event shipping trajectories need to be adjusted due to disruptions or closures at any ports. Although this is not the first or the last event to disrupt global supply chains, unpredictable logistics require a proactive approach for importers and exporters to keep business running as usual.

The latest in air and ocean travel

As factories and production in China return to full efficiency, the whiplash in other areas is starting to take place, particularly in consuming nations such as the U.S. and Europe. We continue to see elevated cases in developed nations that have a heavy reliance on manufacturing outside of the U.S., specifically China. Given this continued volatility, global importers are eager to restock their inventory. As a result, available capacity on the Trans-Pacific will continue to be volatile due to the removed capacity in the market.  The empty container supply has also dwindled in regions where China trade has been a catalyst, primarily North America and Europe, this can have a ripple effect if these empty containers do not get repositioned back to China to support the increase demand that is anticipated at the tail end of March into April.

Similar to China, airlines have canceled majority of passenger flights in and out of Europe and South Korea due to safety concerns and lack of travel demand. Cargo space may be constricted as certain limitations are imposed on passenger travel resulting from adjusted flight schedules and capacity. Although passenger planes have been used to transport cargo more frequently in recent years, available capacity is not heavily impacted by the cancellations due to air charter operators and blank sailings diminishing from ocean carriers. However, contract rates and transit times may need to be adjusted as the airfreight market remains fluid.

As we continue to closely monitor the situation, below are important considerations that will help keep your supply chain moving and better navigate any shipping challenges associated with the latest travel restrictions and schedule shifts.

Assessment of inventory levels

Having an accurate assessment of your inventory is expected, but it’s important to understand how limitations on imports, not only from China but around the globe, will impact your current inventory and regular shipping cadence. If you haven’t already, start discussions with your freight forward around production planning and forecasting. It’s important to look ahead to determine your transportation needs as demand is expected to surpass available capacity in the coming weeks.

Planning ahead in production

There are numerous variables to consider when planning for production. Working through these with a supply chain expert will help you be prepared and proactive as the uncertainty around the virus continues.

-What will production look like and has there been any discussion with the vendors and factories?

-How are existing inventories compared to sales projections?

-What plans are in place in case there continues to be a shortage of workers in China or the demands are not being met within a specific window of time?

-Has there been a discussion about how the backlog will be addressed?

-Where are your warehouse locations in proximity to delivery locations? Ensure you have business continuity plans in place, so deliveries are not impacted.

-Do you have enough air capacity to address decreased passenger flights?

-Is an expedited ocean or sea-air being looked at as an alternate option?

Backup sourcing options

The current backlog in China is a prime example of the importance of a diversified supply chain – including modes of transportation, carriers and sourcing locations. When there is any kind of delayed start to production, keeping up with the workload poses a challenge, and backup sources may need to be considered. Additional sourcing options are not always easy to find and keeping up with the sheer demand and quality controls can be a challenge. Connecting with a global supply chain expert to vet reliable options is important to help ensure success.

While we may not know how long this global pandemic will last, C.H. Robinson’s global network of experts are dedicated to helping you get your shipments where they need to be. We continue to closely monitor the situation and provide updates through our client advisories as needed. We encourage you to reach out to your account manager or connect with an expert for additional questions.

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Sri Laxmana is the Vice President of Global Ocean Product at C.H. Robinson

pandemic

Global Trade After the Pandemic

The staggering impact of the coronavirus pandemic on world trade is still reverberating and will for many months. Businesses are struggling to adjust to the current challenges that travel bans and factory stoppages present to their firms. They are concerned about how to keep their employees safe, informed, and on the payroll in the face of a dramatic economic turndown. But once this pandemic is over, what will its lasting impact be on global trade? How will the trade environment change and how will successful companies respond?

The jury is still out

What the final economic and personal toll of the coronavirus will be to the U.S. and global economy remains to be seen. It may take several months or years to ride out the pandemic and sort out the first stage economic loss that it will leave in its wake. The coronavirus pandemic has already drawn comparisons to the 9/11 attacks and the 1987 and 2008 recessions as far as its overall impact on the U.S. and global economy. It is a uniquely painful moment for international business, especially in regards to the movement of people and products. The recent lock-downs throughout the European Union and the travel ban from Europe to the United States, for example, have no historical precedents. Much like the world looked to regulatory changes in the wake of 9/11 or the financial cascade of problems from 2008, they will again as this initial impact recedes and governments assess how they failed to prepare for this pandemic and how they can help curtail the damage of such occurrences in the future.

Worker safety and transportation screening will be promoted

Unions, companies, and government regulators are already looking at how working conditions will need to change to better protect employees who work in the global trade trenches. From airport workers to longshoremen, workers in many key industries are exposed to cargo and passengers from overseas that potentially could be carrying new diseases across borders. The potential costs of improved detection and phytosanitary procedures will eventually be passed to consumers, but these expenses will be difficult issues to negotiate for industries that have already been hammered by first the U.S.-China trade war and then the dramatic world-wide reduction of traffic flow due to the pandemic.

Much as the terrorist attacks of 9/11 and related incidents gave rise to a host of new security measures at ports and borders, the spread of the pandemic will eventually be the subject of substantial discussion, public hearings, and eventual regulatory changes.  Governments will look for systems that would help them to better screen for potential pathogens at transportation nodes, which may include longer periods of isolation for cargo, and longer lines at the airport for global travelers (not to mention more tax funds to set up these screening and control systems).

Air and cruise industries: only the strong will survive

Passenger airlines and the cruise industry will not likely recover from the economic impact of the pandemic without some substantial government assistance. Even with that financial support, both industries will face substantial challenges to get back to a healthy volume of traffic as the pandemic brought both cruise and air traffic to a standstill. Coming on the heels of ‘flight shaming’ and a wide-spread movement to reduce their carbon emissions, as well as the Boeing crashes and 737 MAX delays, the airlines were already in a delicate position. The pandemic was the knock-out punch.  In the short term, airline CEOs such as British Airway’s Alex Cruz have noted that this is a “crisis of global proportion like no other we have known.” Airlines are projected to lose as much as $113 billion in 2020 alone. Cruises have faced similar challenges, essentially given a ‘death blow’ by the U.S. State Department warning to avoid cruise ships and port lockdowns in the Mediterranean.

What will change as a result?

The economic results of the pandemic have had some additional first-tier effects beyond border safety and damage to the transportation industry. For example, commentators have already noted that the pandemic has forced us into a great virtual working experiment. Insurance companies and their clients will be looking closely into (and likely litigating over) the responsibility for losses as a result of the pandemic. Governments will look to fix the problems we are already seeing in regards to testing and readiness. But what are the secondary effects of the pandemic for businesses? How can companies position themselves to survive and possibly benefit from the changing business landscape that awaits us?

Invest in strategy and security expertise as well as sourcing flexibility

Is this the coronavirus pandemic an isolated incident? Not according to the World Health Organization (WHO), which warns that ‘global catastrophic biological risks’ may be seen on a more regular basis in the coming decades. On top of that natural risk, consider that terrorist organizations have also seen the remarkable disruption caused by the pandemic and may attempt to weaponize biological weapons. It is a risk that governments have known about for some time, but seems even more realistic now that we’ve seen a pandemic in action and the challenges that governments face in attempting to contain it.

This future risk should result in companies spending more time and energy on both corporate strategy and security. The increasingly volatile state of the global markets means that companies will need to beef up their existing forecasting and modeling capabilities. On the risk side, security of employees and far-flung assets will take on a new urgency in the wake of the pandemic. Preparing a company that can flex and adapt in volatile times will mark the difference between companies that thrive and those that go bankrupt. Many companies will also be doing a complex overhaul of their logistics and production concepts.

The US-China trade conflict, and other isolationist tendencies that will linger after this pandemic, will encourage companies to both look closer to home for their production as well as to value the benefit of having alternative sources.  Countries like Canada, Mexico or Latin America will seem more attractive after this experience to U.S. companies. In Europe, sourcing within the EU makes much more sense once the factors of reliability and local access are properly factored into cost comparisons.

The Bottom Line

This pandemic will break firms that cannot handle the financial strain of such a dramatic and abrupt downturn. Government investment and bailouts will allow some to keep their heads above water, but others will simply disappear. Those that do survive will find a different global trade environment: one that demands a greater focus on logistics flexibility and security and the ability to succeed in an international business environment that has new regulatory boundaries which will challenge ‘just in time’ concepts and put a greater value on diverse and more local sourcing. As with all challenges, this situation will also bring opportunities – companies whose products foster virtual communication in businesses and provide equipment that can identify and protect workers from biological agents will see a new surge in interest.  Global world trade will not be killed by this pandemic, but it will have a different and potentially more chaotic nature.

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Kirk Samson is the owner of Samson Atlantic LLC, a Chicago-based international business consulting company that offers market research, political risk assessment, and international expansion assistance. Mr. Samson is a former U.S. diplomat and international law advisor who lived and worked in ten different countries.

real estate

Global View of How the Coronavirus Affects Stock and Real Estate Markets

The coronavirus has already killed more than 3,000 people worldwide. Although most cases are concentrated in the Chinese city of Wuhan, the virus has left the country and has spread to up to 30 nations. On February 16, 2020, Kristalina Georgieva, managing director of the International Monetary Fund, warned that the growth of the world economy that is currently estimated at 3.3% for this year, could be cut between 0.1% and 0.2% due to the coronavirus.

The optimism at the beginning of the year for Asian markets has blurred in the shadow of the coronavirus epidemic.

In the medium term, so long as the epidemic is contained in the coming weeks, equity markets will probably rise again. This is partly because global growth should benefit from the delayed effect of the decline in fixed income yields and an improvement in the global industrial sector due to significant restitution of stocks.

Furthermore, uncertainty — an important risk aversion factor for investors — receded considerably with the truce in the commercial war and the adoption of an orderly Brexit, as investment firm Imperial Fund recently stated. There is confidence that the budgetary/credit stimuli in developed countries (mainly Europe) may continue with a change of stance of the German Government due to the pressure from recent external events.

China should also contribute its grain of sand. Its percentage of health spending remains much lower than that of developed countries, which will lead the Government to increase social spending and continue adding liquidity to support its economy.

Production chains are also much more interconnected, in a world that is still very globalized despite Donald Trump’s attempts to limit trade.

In the U.S., the favorable forecast of the economy persists despite some inconveniences derived from the potential spread of the disease and its effect in the manufacturing and services sector. The Fed made a mid-cycle adjustment before entering pause mode and there is some uncertainty about a possible increase in protectionism and fiscal regulation.

In essence (for now), there is no reason to panic. But, let’s face it, the market provides for a strengthening of corporate results, an increase in investment in capital goods and a greater willingness of investors to take risks. This is not really the intended scenario. At a minimum, we must protect ourselves against risk of an extended pandemic that affects the economy for a longer period than the planned months.

Does it affect the real estate market?

Yes. Housing is another sector that is affected by the coronavirus. For instance, in the first week of February alone, house sales plummeted 90% year-over-year in the 36 main Chinese cities and most real estate agencies are closed to the public. The price of housing in the country has registered the most moderate growth during the past year and a half.

The real estate industry in the U.S. has had to take its own challenges to keep the market moving as well. The presence of the coronavirus becomes a new hurdle to overcome within luxury real estate in cities like New York, Miami, and San Francisco.

The federal government suspended the entry of foreign citizens who have visited China in the last 14 days in an attempt to stop the spread of the virus, a situation that could affect the housing sector due to the blocking of access by potential investors.

Foreign entrepreneurs often get an idea of ​​their future homes with the offer presented on the internet; however, investors have less incentive to buy real estate if its uncertain he or she can visit the property. Therefore, in the short term, the virus could further reduce luxury sales. Time will tell.

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Imperial Fund is a mortgage investment fund formed in 2014 and headquartered in Hollywood, FL. Imperial seeks to achieve attractive risk-adjusted returns by exploiting inefficiencies in the residential and commercial real estate lending market.