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New Regulations to Boost Investments into Battery Recycling in the EU

battery

New Regulations to Boost Investments into Battery Recycling in the EU

IndexBox has just published a new report: ‘EU – Electric Accumulators – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The battery market in the EU is expanding on the heels of growth in the electric vehicle and renewable energy industries. In July 2021, the EU instituted new regulations that force battery producers to diminish greenhouse gas emissions throughout all stages of the product lifecycle. Increases in mandatory levels of recovered batteries and the share of recycled materials used in new ones will lead to a critical need for additional recycling capabilities and could drive an investment boom in the market.

Key Trends and Insights

The Global Battery Alliance projects that by 2030 worldwide demand for batteries will increase 14 fold due to the widespread implementation of electric transport methods and deployment in electricity grids. The EU may account for 17% of global demand. In 2030 demand for lithium batteries is forecast to surpass the current amount by a factor of 18, cobalt by 5 and in 2050 by a factor of 60 and 15 respectively.

In July 2021, the EU implemented new regulations to ensure safe use, recycling and disposal of batteries. These regulations could lead to serious changes in the accumulator market. From July 1, 2024, producers selling batteries in the European market will have to provide declarations indicating the carbon footprint created throughout production. Then from July 1, 2027, they must comply with maximum lifecycle carbon footprint thresholds for their products. This will push expenses for producers up as they implement technologies to reduce greenhouse gases. To help companies stay competitive, the new regulations outline developing a plan where governments are obligated to purchase products manufactured with green technologies.

In Europe, over 1.9 million tonnes of waste batteries are generated annually. The current level of recycled materials in the EU is significantly low: only 12% of aluminium, 22% of cobalt, 8% of manganese, and 16% of nickel used within the EU is recycled. Currently, almost no lithium is recovered in the EU because it is deemed to not be cost-effective.

In accordance with the new regulations, targets are set for recovering metals from waste batteries at 90% for cobalt, copper, lead, and nickel, and 35% for lithium by the end of 2025. By 2030 the recovery level should reach 95% for cobalt, copper, lead and nickel, and 70% for lithium. This will require a significant increase in capacity to recycle batteries and thus provide new opportunities for investors. The sector for lithium is one the fastest growing areas and is forecast to expand by 30% annually, experiencing the highest level of demand for recycling capacity.

Electric Accumulator Imports in the EU

In 2020, approx. 1.2B units of electric accumulators were imported in the EU; with a decrease of -8.1% against the previous year’s figure. In value terms, accumulator imports soared to $23.1B (IndexBox estimates) in 2020.

Germany represented the largest importing country with an import of about 386M units, which finished at 33% of total imports. It was distantly followed by Poland (199M units), Hungary (168M units), the Netherlands (96M units), France (65M units) and the Czech Republic (58M units), together achieving a 49% share of total imports. Italy (37M units) followed a long way behind the leaders.

In value terms, Germany ($7.5B) constitutes the largest market for imported electric accumulators in the EU, comprising 32% of total imports. The second position in the ranking was occupied by France ($2.4B), with a 11% share of total imports. It was followed by the Netherlands, with a 6.8% share.

In 2020, the average annual rate of growth in terms of value in Germany totaled +48.6%. The remaining importing countries recorded the following average annual rates of imports growth: France (+1.6% per year) and the Netherlands (+3.4% per year).

The accumulator import price in the EU stood at $20 per unit in 2020, growing by 43% against the previous year. In 2020, the most notable rate of growth in terms of prices was attained by the Czech Republic, while the other leaders experienced more modest paces of growth.

European Imports of Primary Cells and Primary Batteries

Germany represented the major importing country with an import of around 3.1B units, which amounted to 33% of total imports. It was distantly followed by Poland (1,470M units), Belgium (743M units), Romania (624M units), France (605M units), the Netherlands (495M units), Italy (474M units) and Spain (452M units), together constituting a 52% share of total imports.

In value terms, Germany ($534M) constitutes the largest market for imported primary cells and primary batteries in the European Union, comprising 23% of total imports. The second position in the ranking was occupied by France ($238M), with a 10% share of total imports. It was followed by Poland, with a 10% share.

In Germany, the value of battery imports declined by an average annual rate of -2.3% in 2020. The remaining importing countries recorded the following average annual rates of imports growth: France (+10.3% per year) and Poland (+22.0% per year).

Source: IndexBox Platform

sanctions

New Executive Order Authorizes Imposition of Additional Sanctions on the Government of Belarus and Certain Sectors of the Belarusian Economy

On August 9, 2021, President Biden issued Executive Order 14038 (the “EO”) which expanded the scope of the national emergency previously declared in EO 13405 of June 16, 2006. The EO imposes additional sanctions in response to conduct by the Government of Belarus (“GoB”) and the President Alyaksandr Lukashenka regime which the Biden Administration described as “long-standing abuses aimed at suppressing democracy and the exercise of human rights and fundamental freedoms.” As specific examples, the EO cites the “fraudulent” August 9, 2020 election administered by the GoB, in which Lukashenka was reelected, and the GoB’s forced grounding of an international flight to arrest Belarusian journalist Raman Pratasevich and his partner Sofia Sapega.

Among other things, the EO gives the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) the discretionary authority, in consultation with the U.S. Secretary of State, to impose blocking sanctions on GoB agencies, GoB leaders and officials, and individuals and companies operating in the defense and related materiel, security, energy, potassium chloride (potash), tobacco products, construction or transportation sectors of the Belarusian economy. The EO also authorizes OFAC to sanction individuals and entities “responsible for or complicit in” activities such as “actions or policies that threaten the peace, security, stability, or territorial integrity of Belarus,” suppression of human rights and freedom of the press, electoral fraud, deceptive transactions, and public corruption.

OFAC immediately used its authority under the EO in order to add multiple persons and entities to its Specially Designated Nationals & Blocked Persons List (“SDN List”). Those added to the SDN List under the EO include:

-BelKazTrans and Closed Joint-Stock Company New Oil Company, who were sanctioned for operating in the energy sector of the Belarusian economy;

-Inter Tobacco, Energo-Oil and Grodno Tobacco Factory Neman, who were sanctioned for operating in the tobacco product sector of the Belarusian economy;

-Cyprus-based Dana Holdings Limited, who was sanctioned for operating in the construction sector of the Belarusian economy; and

-Belaruskali OAO, who was sanctioned for being owned by the GoB and for operating in the potassium chloride (potash) sector of the Belarusian economy.

The U.S. Treasury Department published a separate press release which identifies all of the SDNs designated by OFAC under the EO. As a result of these designations, all property and interests in property of these SDNs that are or come within the U.S. or the possession or control of U.S. persons are blocked, and U.S. persons are generally prohibited from engaging in transactions involving such SDNs unless authorized by OFAC. OFAC’s “50% Ownership Rule” will also extend these blocking sanctions to any entities owned 50 percent or more, individually or in the aggregate, directly or indirectly, by one or more of these newly designated SDNs. Additionally, the EO gives OFAC the authority to impose blocking sanctions on any non-U.S. persons who provide material assistance to any SDN designated pursuant to the EO.

For Belaruskali OAO, OFAC issued General License 4, which authorizes the wind down of transactions involving Belaruskali OAO, or any entity owned 50% or more by Belaruskali OAO, through 12:01 a.m. eastern standard time on December 8, 2021. OFAC issued FAQ 918 to provide additional information regarding General License 4.

OFAC also issued FAQ 917 which clarifies the scope of the EO’s sector-based sanctions as follows:

The identification of a sector pursuant to E.O. of August 9, 2021 provides notice that persons operating in the identified sector risk exposure to sanctions; however, the identification of a sector does not automatically block all persons operating in that sector of the Belarus economy. Only persons designated on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List), and entities owned 50 percent or more, individually or in the aggregate, directly or indirectly, by one or more such persons, are subject to blocking sanctions.

As a result, the EO does not automatically sanction persons operating in the identified sectors of the Belarusian economy, but it does provide OFAC with the authority to impose blocking sanctions on such persons at any time.

_____________________________________________________________________

Cortney O’Toole Morgan is a Washington D.C.-based partner with the law firm Husch Blackwell. She leads the firm’s International Trade & Supply Chain group.

Grant Leach is an Omaha-based partner with the law firm Husch Blackwell focusing on international trade, export controls, trade sanctions and anti-corruption compliance.

Tony Busch is an attorney in Husch Blackwell’s Washington, D.C. office.

long beach

PORT OF LONG BEACH PLAYS THE LONG GAME

The Port of Long Beach has become a global leader in operational excellence, outstanding customer service, moving cargo with reliability, speed, and efficiency making it the premier U.S. gateway for trans-Pacific trade. 

As the second-busiest container seaport, the Port of Long Beach handles trade valued at $200 billion annually and supports 2.6 million trade-related jobs across the United States. This includes 575,000 in Southern California and one in five jobs in Long Beach, which is southwest of Los Angeles. 

Spanning across 3,200 acres with 31 miles of waterfront, 10 piers, 66 post-Panamax cranes, and amongst the deepest berths in the country, the port’s world-class facilities can accommodate the largest shipping vessels in the world. Goods moving through the port originate in or are destined for every U.S. congressional district. 

With a keen eye toward building a successful and sustainable future, the port is pursuing long-term capital improvement projects. In 2020, the port opened a new bridge built for the modern era of shipping and goods movement. This year, the port will complete the final phase of the world’s most technologically advanced container terminal, the Long Beach Container Terminal at Middle Harbor.

In the next 10 years, the port plans to invest $1.7 billion in modernization to further prepare for the demands of global trade. The strategy includes investing $1 billion in on-dock rail projects, aimed at substantially increasing reliability, adding capacity, strengthening competitiveness, improving speed-to-market, and allowing for the rapid movement of cargo throughout the harbor.

The Port of Long Beach operates Foreign Trade Zone 50 that lessens the impact of tariffs and eliminates Customs clearance delays by having shipments delivered directly to qualifying businesses within Orange County and parts of San Bernardino and Los Angeles counties.

Additionally, the port is proactively working to handle the ongoing surge in cargo shipments brought on by consumer demand for imports. Among other measures, the port has opened STOR (Short-Term Overflow Resource yard) to provide extra near-dock space to help importers and exporters cope with the cargo volume. 

The Business Recovery Task Force, which was established just over a year ago, serves as a key internal group to work with customers, industry partners, labor and government agencies to ensure terminal and supply chain operations continue without disruption.

Added investigations for locating funds to enable a 24/7 supply chain will put the port on the same footing here in the U.S. as they are in Asia and parts of Europe.

Customers choose the Port of Long Beach for the most dependable, cost-effective and fastest delivery of goods in the world, along with the strong relationships it maintains with industry, community, environmental advocates and partner agencies. In 2020, industry leaders named it “The Best West Coast Seaport in North America” for the second consecutive year. 

suppliers

Russian and Indian Suppliers Scale Up Packaging Paper Exports to China

IndexBox has just published a new report: ‘China – Wrapping Papers – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

China’s imports of wrapping paper, packaging paper and paperboard reached the highest level ever, picking up by +54% to 892K tonnes in 2020. Russia, India and Viet Nam constitute the largest suppliers to China. Last year, Russia and India boosted their exports to China threefold, while Viet Nam saw a 58%-spike in terms of volume of exported products to China. In 2020, the average wrapping paper import price dropped by -24.1% y-o-y.

Imports into China

In 2020, the amount of wrapping paper, packaging paper and paperboard imported into China surged to 892K tonnes, jumping by +54% on the previous year. In value terms, wrapping papers imports skyrocketed by +17.1% y-o-y to $627M (IndexBox estimates) in 2020.

The total imports of wrapping paper, packaging paper and paperboard to China grew from 350K tonnes in 2010 to 892K tonnes in 2020. Over the last decade, India recorded the most prominent growth rate of exports to China. India broke into the Chinese market and became the second-largest supplier, ramping up the supplies to China from 16K tonnes in 2017 to 100K tonnes in 2020.

Russia (125K tonnes), India (100K tonnes) and Viet Nam (77K tonnes) were the main suppliers of wrapping papers imports to China, together accounting for 34% of total imports. Canada, Japan, the U.S., Sweden, South Korea, Taiwan (Chinese), Brazil, Indonesia, Malaysia and Thailand lagged somewhat behind, together comprising a further 52%.

In 2020, Brazil featured the highest growth rate in terms of volume of supplies to China. Over the last year, Chinese purchases from Brazil increased from 7K tonnes to 42K tonnes.

Russia and India boosted their supplies to China threefold. Russia increased its exports to China from 41K tonnes in 2019 to 125K tonnes in 2020, while India ramped up its supplies to China from 34K tonnes to 100K tonnes over this period. Viet Nam increased its exports to China by half from 49K tonnes in 2019.

In value terms, Russia ($75M), Japan ($68M) and the U.S. ($58M) appeared to be the largest wrapping papers suppliers to China, together comprising 32% of total imports. Sweden, Taiwan (Chinese), Canada, South Korea, India, Viet Nam, Brazil, Indonesia, Malaysia and Thailand lagged somewhat behind, together comprising a further 47%.

In 2020, the average wrapping papers import price amounted to $703 per tonne, dropping by -24.1% against the previous year. There were significant differences in the average prices amongst the major supplying countries. In 2020, the country with the highest price was Japan ($981 per tonne), while the price for India ($323 per tonne) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Taiwan (Chinese), while the prices for the other major suppliers experienced a decline.

Source: IndexBox Platform

port of baltimore bridge global trade virginia

VERY EXCITING TIMES FOR THE PORT OF BALTIMORE

The Port of Baltimore continues expansion efforts following the completion of successful dredging operations for a second 50-foot-deep container berth at its Seagirt Marine Terminal on April 20. 

This project—supported by a partnership between the Maryland Department of Transportation Maryland Port Administration (MDOT MPA) and Ports America Chesapeake—started in January and will allow the simultaneous handling of two ultra-large ships. 

The 50-foot berth paired with the Howard Street Terminal expansion project will not only increase business opportunities but also grow the region’s workforce, adding more value to the $122.1 million investment. Of this amount, $105 million is from Ports America, $10.5 million from the state, and $6.6 million in federal funding.

The second, deep-container berth project was spearheaded and completed by Corman Kokosing of Annapolis Junction with the help of two dredges—Koko V and Koko VI. Additionally, more than 465,000 cubic yards of sediment were successfully removed by the company’s SN3 unloader barge for reuse in land restoration and more. With this new addition, the port announced the addition of four neo-Panamax cranes to arrive and be operational later this year at Seagirt.

“The Port of Baltimore and its skilled workforce have always played a key role in supporting Maryland’s economy and keeping the state’s supply chain open and reliable,” MDOT Secretary Greg Slater said. “Now, together with our public and private partners, we’re seeing the future of the port take shape. Additional berth capacity and the ability to move cargo on double-stacked rail cars with the Howard Street Tunnel expansion will attract new and expanded business to the port, boost revenue, grow jobs and lead the way in Maryland’s economic recovery.”

The expansion of the region’s Howard Street Terminal aims to improve capacity along the East Coast’s rail lines from Baltimore, pending the final approval by the National Environmental Policy Act. Construction at the 126-year-old terminal is projected to begin at the end of 2021 and is supported by public-private investments between the federal government, Maryland, CSX and others. These developments continue supporting the region’s workforce while increasing state tax revenue and funds for the Transportation Trust Fund.

“We’re moving forward in the Port of Baltimore,” said MDOT MPA Executive Director William P. Doyle. “We appreciate the on-time and on-budget dredging work completed by Maryland-based Corman Kokosing, a great U.S.-flag dredging and marine construction operator. This summer, we’ll welcome four new neo-Panamax cranes and later this year, we’ll break ground on the Howard Street Tunnel project, giving the port and CSX double-stack capability north, south and all the way out to Chicago. These are very exciting times for the Port of Baltimore.”

chromium

Chromium Ore and Concentrate Imports in China to Regain Momentum

IndexBox has just published a new report: ‘World – Chromium ores and concentrates – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2020, global exports of chromium ores and concentrates reduced sharply by -10.2% y-o-y to 16M tonnes. China, the major importer of chromium ores and concentrates, comprises over 70% of the total global imports. In Q1 2021, shipments to the country stood at a level slightly lower than in the same period of 2020. South Africa remains the largest exporter worldwide, accounting for 79% of the total global exports.

Largest Importers of Chromium Ores and Concentrates

In 2020, China (16M tonnes) represented the key importer of chromium ores and concentrates, constituting 71% of total imports. It was distantly followed by Mozambique (3.8M tonnes), generating a 17% share of total imports. Russia (896K tonnes) followed a long way behind the leaders.

In value terms, China ($3B) constitutes the largest market for imported chromium ores and concentrates worldwide, comprising 77% of global imports. The second position in the ranking was occupied by Mozambique ($386M), with a 10% share of global imports.

In Q1 2021, shipments to the country stood at a level slightly lower than in the same period of 2020. A sharp drop was recorded in Q2 2020 due to the pandemic, followed by a recovery, after which imports stabilized. Should the trend pattern remain flat in 2021, a slight growth against 2020 could be expected.

Chromium Ore and Concentrate Exports by Country

In 2020, approx. 16M tonnes of chromium ores and concentrates were exported worldwide; shrinking by -10.2% on the previous year. In value terms, chromium ore and concentrate exports fell rapidly to $2.5B (IndexBox estimates) in 2020.

South Africa dominates chromium ore and concentrate export structure, accounting for 13M tonnes, which was near 79% of total exports in 2020. The following exporters – Kazakhstan (676K tonnes), Turkey (672K tonnes), Zimbabwe (583K tonnes), Oman (378K tonnes), Pakistan (279K tonnes) and Albania (249K tonnes) – together made up 18% of total exports.

In 2020, average annual rates of growth with regard to chromium ore and concentrate exports from South Africa stood at -7.4%. Kazakhstan (-3.3%), Zimbabwe (-13.6%), Pakistan (-16.6%), Albania (-22.0%), Turkey (-33.4%) and Oman (-36.2%) illustrated a downward trend over the same period.

In value terms, South Africa ($1.8B) remains the largest chromium ore and concentrate supplier worldwide, comprising 74% of global exports. The second position in the ranking was occupied by Turkey ($126M), with a 5.1% share of global exports. It was followed by Zimbabwe, with a 4.4% share.

In 2020, the average chromium ore and concentrate export price amounted to $152 per tonne, which is down by -13.3% against the previous year. There were differences in the average prices amongst the major exporting countries. In 2020, the country with the highest price was Pakistan ($191 per tonne), while Oman ($100 per tonne) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Kazakhstan, while the other global leaders experienced a decline in the export price figures.

Source: IndexBox Platform

duck meat

Global Duck and Goose Meat Imports Grow Steadily with Increasing Demand in the EU

IndexBox has just published a new report: ‘World – Duck And Goose Meat – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2020, global duck and goose meat imports increased by +3.3% y-o-y to 268K tonnes and reached $1.1B in value terms. Germany and Hong Kong constitute the largest importers of these products worldwide. In 2020, Spain, Denmark, Belgium and the Netherlands saw the highest spikes in imports in physical terms. Over the last year, the average duck and goose meat import price rose by +6.5% y-o-y. Hungary, China, Poland and France are the key suppliers worldwide, with a combined 66%-share of the global export volume.

Global Duck and Goose Meat Imports

In 2020, approx. 268K tonnes of duck and goose meat were imported worldwide; picking up by +3.3% against the year before. In value terms, duck and goose meat imports expanded markedly to $1.1B (IndexBox estimates) in 2020.

Germany (67K tonnes) and Hong Kong SAR (46K tonnes) represented the major importers of duck and goose meat in 2020, finishing at near 25% and 17% of total imports, respectively. France (22K tonnes) took the next position in the ranking, followed by the UK (14K tonnes) and the Czech Republic (13K tonnes). All these countries together held approx. 18% share of total imports. The following importers – Belgium (9.9K tonnes), Spain (9.2K tonnes), Denmark (7.3K tonnes), Japan (7.1K tonnes), Austria (5.9K tonnes), Slovakia (4.5K tonnes) and the Netherlands (4.5K tonnes) – together made up 18% of total imports.

In 2020, Spain saw the highest spike (+25% y-o-y) in imports. Denmark (+19%y-o-y), Belgium (+10% y-o-y), the Netherlands (+5% y-o-y) moderately increased their purchases from abroad.

In value terms, Germany ($291M), France ($146M) and Hong Kong SAR ($103M) constituted the countries with the highest levels of imports in 2020, together accounting for 47% of global imports. These countries were followed by Belgium, Japan, the UK, Spain, the Czech Republic, Denmark, the Netherlands, Austria and Slovakia, which together accounted for a further 32%.

The average duck and goose meat import price stood at $4,257 per tonne in 2020, rising by +6.5% against the previous year. In 2020, the most notable rate of growth in terms of prices was attained by France, while the other global leaders experienced more modest paces of growth.

Major Suppliers of Duck and Goose Meat Worldwide

In 2020, Hungary (65K tonnes), China (47K tonnes), Poland (42K tonnes) and France (38K tonnes) was the key exporter of duck and goose meat in the world, mixing up 66% of total export. It was distantly followed by Germany (14K tonnes), making up a 4.7% share of total exports. The Netherlands (13K tonnes), Bulgaria (12K tonnes), the UK (8.1K tonnes), Thailand (5.4K tonnes), Belgium (5K tonnes) and the U.S. (4.9K tonnes) held a little share of total exports.

In value terms, the largest duck and goose meat supplying countries worldwide were Hungary ($283M), France ($262M) and Poland ($147M), together accounting for 58% of global exports. China, Bulgaria, Belgium, Germany, the Netherlands, Thailand, the UK and the U.S. lagged somewhat behind, together accounting for a further 33%.

Source: IndexBox Platform

nansha

PORT OF NANSHA’S LATEST INFRASTRUCTURE PROJECTS PROPEL LOGISTICS SERVICES ACROSS THE GLOBE

Port of Nansha, which is part of the Guangzhou Port Group, is now the fifth-largest port globally and the fastest-growing port in South China. Encompassing the Guangzhou, Foshan, Zhongshan, and Jiangmen regions, the Port of Nansha continues increasing its international presence through strategic infrastructure projects. 

The latest development, which was deemed the International Logistics Center, serves as a mega-warehouse complex accommodating dry and cold warehouses with new on-dock rail connections for incoming manufacturers and vendors.

As part of the overall goal driving the International Logistics Center, Shenzhen Warehousing is officially at max capacity, further reiterating the importance of port diversification to promote a balanced and agile supply chain. The cold chain warehouse will accommodate a total storage capacity of 460,000 tons upon completion–the largest cold chain facility in South China. 

“Port of Nansha Cold Logistics Warehouse, with rail access to/from the Hinterlands and Europe, will undoubtfully be a game-changer in our industry,” stated an International Logistics Center executive.

The port’s developing dry warehouse will support intermodal logistics and general-purpose warehousing services with 1.8 million square feet of total coverage. Nansha’s on-dock railway station will cover 1.05 million square feet of that area as well. Long-term goals for this development will support expansions in consumer goods, distribution, 3PL and e-commerce services.

“We were attracted to Nansha because of its strategic location and business-friendly approach to helping companies like ours to grow,” stated a 3PL anchor tenant. “The opening of this new dry warehouse will drastically save on warehousing cost, origin dray, and reduce lead times for our  e-commerce customers.”

Nansha’s $231 million railway project spans from the Guangzhou Nansha Port in the east, connecting the Beijing Guangzhou Railway via the Guangzhou-Zhuhai Railway to the north and the Guizhou-Guangzhou, Nanning-Guangzhou and Liuzhou-Zhao Qing railway to the west. This massive project is known as the only on-dock rail in South China and serves as a gateway into the Belt & Road Initiative.

Meeting unprecedented demand brought on by the pandemic inspired the latest addition of a fourth new terminal offering fully automated capabilities starting this year. The construction of the new terminal will support the addition of 5 million TEUs to Nansha’s container throughput capacity and increasing the total ship-to-shore crane count from 65 to 78.

Port of Nansha America CEO and Founder John L. Painter confirmed they will continue to capitalize on additional growth opportunities, particularly to and from the North American market, which is requesting more ocean services. In 2020, Nansha saw a 55.4 percent increase in TEU movement to/from North America compared to 2019 reports, bringing the total number of TEUs moved globally to more than 17.5 million of the 23.51 million TEUs Guangzhou Port Group moved globally in 2020.

career

LESSON FOR THE DAY: ONE PROFESSIONAL’S CAREER PATH 

In 2019, more than 11 billion tons of cargo were shipped internationally, according to the United Nations Conference on Trade and Development, and the dollar value of global trade that same year was approximately $19 trillion (U.S.).

The logistics required in the transshipment of products by sea, air, rail and truck are enormous, and the efficiency of the multitude of supply chains is equally as vital. Developing the logistical programs and building supply chain models require people with in-depth training in these sectors of cargo movement.

Patrick Bohan has been involved in supply management and logistics for several years. The director of Business Development with the Halifax Port Authority in Nova Scotia, Canada, Bohan says he would highly recommend a career path in these specific sectors.

He said his work in the area of supply chains has been “fascinating” and states that it is the supply chains that “make the world go around every day.”

Approximately 80% of global trade moves by ship and “even through the global pandemic, these supply chains had to keep functioning and were more important than ever,” Bohan stressed.

He said that, thankfully, with the necessary technology, “we had remote work capabilities and we had the devices we could get the work done from just about anywhere and that was important to keep lot of things going.”

After earning a business degree from Western University in London, Ontario, Bohan’s “first employee experience was in and around transportation,” he says. I knew how to use Excel (Microsoft) and spreadsheets plus other software programs.” 

With this background, he could see value in his training and felt “maybe I could work in this industry for the long term.” Bohan saw an opportunity in the transportation field. “To be quite honest,” trade globally was growing and getting more sophisticated in terms of overseas trade, as both inbound and outbound supply chains were being “connected around the world,” he said.

He started working in transportation in the 1990s and as his experience began to develop, he wanted to get more into logistics and supply chain management. So, he felt the best way for him to accomplish that was to become a Certified Logistics Professional (CCLP) through the Canadian Institute of Traffic and Transportation (CITT).

Bohan worked on correspondence courses at night and during weekends and studied “basically all different modes of transportation and warehousing and distribution topics. When I completed the courses and had five years of full-time work experience, I qualified for the designation and every year there is some upkeep required.

That was my first specific training in this field and it has served me well, to move up the learning curve in an efficient way and to get some clues about where the world is going in that industry,” he said.

Although his career was moving forward, Bohan said the shipping industry and his specific areas of supply chain and logistics are always evolving and changing and a mid-career refresher was important in his line of work.

“I had been out of school for about 10 years and working and by going back and doing my MBA [Master of Business Administration in International Business at Saint Mary’s University, Halifax], I had freshened up on the changes that had taken place in the world.”

The MBA program proved invaluable to Bohan because it had “an international project, too, which I was able to complete using work-related concepts.” He said the research project was related to his work at the port and involved some trade with China and Vietnam. “It was timely because in 2005,” when Bohan was doing his MBA, China and Vietnam “were coming into their own and the port had a lot of interest with what was going on in that part of the world with Asian trade.” 

He looked at the Asian market from the perspective of how this industry would change some of the trade patterns as well as logistics and supply chain habits.

Bohan, who was involved in the early stages of building Asian trade through Halifax, actually went to China and Vietnam for two weeks as part of his MBA project.

Southeast Asia seemed to be where the action was and the MBA project certainly helped,” he said. It was his first trip to those countries and it provided him with “good, direct connections” with the work he was doing at the port.

In a further comment on a refresher program for mid-career professionals, Bohan also suggested “some kind of specialized certification in your field.” He said an MBA or a certification program would provide “the best path to discover things that may have changed from early career to mid-career.” 

With the shipping industry and supply chains constantly evolving, updating in mid-career is also important in dealing with new technology and data streams, things which increase efficiency of supply chains, said Bohan. Early in his career, he had some ideas of where the world was headed based on training and technology and how it could be adapted to make supply chains more efficient. 

Looking into the future now, Bohan said there are discussions about artificial intelligence and other technologies, which seem to be moving to the next level where the machines might actually learn logistics and supply-chain models and update them.

So, he stressed, “I think it is very important for people in mid-career to touch base with the technology, get comfortable with it and find out what it can do so they don’t feel the world is passing them by.”

And in the shipping industry in particular, with the constant introduction of larger container ships, improved technology is vital with changing supply chains and logistics in handling cargo.

Without technology, it would be impossible to imagine if you had a 24,000 TEU ship and had to keep track of every single container plus the speed of planning, the arrivals, getting them unloaded to rail or truck and the transshipment to many locations,” Bohan says. “Without technology, can you imagine the volume of paper?”

In his work at the Port of Halifax, Bohan has occasionally been invited to speak to high school students about the port, his role there and how things get from one side of the world to the provincial capital of Nova Scotia. 

He believes that speaking to these students—or even providing business programs on supply chains and logistics as part of a curriculum—would be beneficial “because so many jobs and careers are somewhat related to supply chain.” Having their young eyes opened to the field early, Bohan added, may be advantageous compared to having to make last-minute decisions later in life.

WHAT THEY’RE LOOKING FOR

People looking to the transportation industry for a career with a focus on logistics and supply-chain management should know that many employers are looking for specific things from new recruits.

Take enVista, for example. Based in Kansas City, Missouri, the global software, consulting and managed services provider was founded by supply chain and technology experts in response to market demand for skilled consulting services.

“In terms of training for labor-management consulting roles, we do have a multi-phase training approach that consists of on-the-job training, introductory classroom training and specific vendor application training, i.e. Blue Yonder, Korber, etc.,” says enVista Vice President Tom Stretar. 

“In addition, for warehouse management, labor management, and transportation consulting roles, the common college degrees we keep an eye out for include, Supply Chain Management (BA/BS or MBA) and Industrial Engineering or equivalent type engineering degrees, like Mechanical Engineering (BS), Computer Science Engineering (BA/BS) and Data/Business Analytics (BA/BS).”

First published by Reuters

canadian

5 Ways to Ease Canadian Supply Chain Pain

Canadian businesses are facing a painful dilemma as they enter the second half of 2021.

A study released by the Bank of Canada in early July shows business confidence has soared across the country as vaccination programs have rolled out and reduced restrictions on public movement. Business leaders reported strong sales outlook, unprecedented levels of planned hiring and plans for greater investment. In fact, the monetary policy overseer’s quarterly survey showed confidence at its highest level since 2003.

There is good reason to be buoyed about the future. Canadian consumers have saved an estimated $220 billion during the pandemic that they are now looking to spend. Another Bank of Canada survey showed near unprecedent intentions amongst consumers to spend their savings once the economy opens. That is the good news.

The bad news is retailers, wholesalers and service-sector businesses reliant on the movement of goods are also facing unprecedented supply chain woes. Shipments of goods critical to the success of these businesses have been delayed by months due to backlogs at ports in Asia stemming for a global container shortage. In its survey, the Bank of Canada found 60% of businesses would have some difficult or significant difficulty meeting demand if there was a sudden increase. Commodity prices have soared to their highest levels since 2014 while factory-gate prices in China – where many manufactured goods are produced and exported to Canada – witnessed a year-over-year increase of 6.8% in April 2021. Shipping costs from China to the coast of British Columbia have tripled.

‘Just in Case’ Becoming the Norm

The delays and escalating costs of shipping are prompting businesses to stockpile inventory at rates not seen in recent years. The just-in-time supply chain model that has characterized the movement of goods throughout most of the 21st century is now being traded in for a just-in-case model. But the market has responded accordingly with warehouse lease rates up 25% and warehouse availability almost non-existent with little new capacity slated in the near term. In some cases, businesses have had to invest far more heavily in warehousing than they had planned when inventory arrived at port on time, along with delayed inventory and the oversupply that could not be contained within existing warehouse space. In addition, fiscal stimulus programs have tightened the labor market, driving down labor availability and driving up labor costs.

All the added expense is fuelling concerns about inflation as businesses pass down the additional costs to consumers. A spike in inflation could dampen consumer demand, which would then resolve the supply chain woes, but would also stagnate economic recovery. This leads to the greater challenge of whether to plan for a consumer boom or a more temperate market.

What is a Business Decision Maker to Do?

As the old saying goes, necessity is the mother of invention. Businesses have been finding creative solutions to supply chain problems as they have arisen – from alternative transport routes and methods to new suppliers and even alternative materials to build their products.

The reality, however, is there is no one-size-fits-all solution to the supply chain woes being faced by Canadian importers. Solutions will vary based on industry, pain points, sourcing markets, ports of entry and several other factors.

Gain Visibility: One of the key actions being taken by businesses is digging in to learn more about their suppliers’ suppliers. Doing so allows them to better identify potential disruptions where materials may be scarce, or transit routes are congested.

Call for Backup: Even businesses that have reliable suppliers should consider finding alternative sources of supply and ideally from a different country. In most cases, delayed supply is the result of congested ports or a regional dearth of cargo container availability. Finding backup suppliers in other markets means not only having an insurance policy for supply but also for transport.

Make Accurate Supply Projections: It is a tall order to know how consumers intend to spend in the wake of a global pandemic. But businesses that use analytics to gauge future demand will suffer fewer supply chain headaches as they will be able to plan better for anticipated inventory arriving from overseas.

Secure Freight: Cargo capacity is at historic lows as businesses around the world fight for space on ocean freighters. Even inland transport has become challenging. For businesses that have not secured space, finding available transport can be near impossible. Working with a freight forwarder can help not only to identify available capacity but also to secure space for future supply. This is particularly true for businesses that have a stronger gauge of upcoming demand.

Lower Landed Costs: Businesses searching for alternative suppliers can often find cost savings by leveraging free trade agreements to reduce duty outlay. Canadian businesses may find refuge in trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which gives importers free trade access to markets like Vietnam and Singapore. Other opportunities may be found with suppliers in Europe via the Comprehensive Economic and Trade Agreement (CETA). Of course, Mexico is a viable alternative to sourcing in Asia and is party to the recently enacted United States-Mexico-Canada Agreement (USCMA) that replaced NAFTA. Using Mexico could also remove the need to use ocean freight where congested ports are forcing weeks-long delays to bring goods to market.

When will it End?

Canadian importers are anticipating the day when business can get back to normal. After years of uncertainty over the fate of free trade in North America, conflicts with the U.S. over steel, aluminum, and lumber, and conflicts with China over agricultural goods, there is a desire to see things stabilize. The reality, however, is that Canadian importers will have to compete with their counterparts in the U.S. and other markets with recovering demand for cargo space. While more containers are being brought online, the shortage is anticipated to continue into the early part of 2022 or even later. That means rates will remain high for the foreseeable future, particularly for Asia-origin goods moving to North America’s west coast.

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Michael Zobin is a Canada-based director of global trade consulting at Livingston International. His expertise includes supply-chain optimization; duty deferral and drawbacks; conducting compliance program reviews; developing compliance procedures; voluntary disclosure; and post-entry review.