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To Develop Innovative Products, Update Your Situational Awareness. Here’s How.

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Archives, Global Logistics, Global Trade Daily, Software

To Develop Innovative Products, Update Your Situational Awareness. Here’s How.

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Product and organizational leaders can always rely on a dynamic business, tech, and regulatory market to challenge product innovation. So prepare to engage early with a process that provides unique insight into your business environment. How do you keep up on market timing and relevance? How do you spot a market shift with your customers? And how do you better align your organization and products with your market?

Developing B2B technology products fit-for-market and which customers will see as valuable is a process. And one ideally driven by applying a strategic approach to acquiring an essential situational awareness. On a battlefield, situation awareness, or situational awareness, is commonly referenced for knowing the environment in which you operate. In a business setting, I apply it to mean knowing your market, customer, and organizational environment.

While the term has also been used to explore other areas, like operations and crisis management, it is an approach I find potentially helpful to companies developing B2B technology products and services, as well as to organizations implementing such solutions to better serve their customers.

The following perspective is based on years of hard-won experience and observations from various roles in the business and technology arena having led development in Internet service infrastructure, supported sales, and presented business proposals to senior management; as well as having been a startup founder, professor of business and IT, radio frequency (RF) content developer and trainer; and presently in management consulting focused on product strategy and transformation in the data-connected cargo space.

I’ve learned that since individual business functions tend to be interconnected, where a fluctuation in one area can affect activity in another, engaging with a strategic process early to raise your situational awareness can be invaluable to innovation-minded product and organizational leaders. While the following illustrate some thoughts for consideration, they are not however meant as a directive. I strongly prefer trying to help others by presenting analysis and context that help them chart their own direction.

Tune Into Your Market. A major part of having an innovation-focused mindset is that not only do you remain closely in sync with your market, but also that you revisit ideas and projects for timing and relevance. Likewise, organizational flexibility, as a market response strategy, can also be helpful particularly when operating in a dynamic business, technology, and regulatory environment.

For example, an area widely covered over the past several years is a market challenge IoT manufacturers have faced on whether to develop pure-play (hardware) products, where they risk becoming a commodity or build products focused on delivering specific services tailored to a specific market. This area has also been a hallmark of the related hardware-as-a-service (HaaS) conversation. Pairing current market knowledge with what you can accept on flexibility can be influential on both an organizational and product level.

Be Curious. Practice tinkering on both a business and technical level as a routine. Gather ideas, challenge their assumptions, and look for key trends. Likewise, practice testing technical processes and functions for useful application. While “value” may not readily surface under this exercise, the point of having worked through some process on this level can serve you well when its opportunity arrives.

Perform a Product Stress Test. Conduct an internal assessment on your existing products relative to their technical capabilities and market applications. Doing so can shed potentially valuable insight on areas requiring attention as product design scalability, operational efficiency, and application limitations given your view of current market direction.

Develop in-house talent. Create an appropriate training strategy for management and technical teams to develop and maintain onboard expertise. At varying times, management needs to communicate with customers and vendors on product performance issues. And technical teams need the required skillsets to develop products and keep up in their field. As well, both should be able to comfortably convey ideas and feedback to one another and to key stakeholders.

Poll Your Customers. Use the relationship that you’ve built to call up customers and ask “how are things”? Ask about how your current product is working for them. Is the price right? Is the service right? Listen for any new features requests, ask how they will be applied, and in what markets will they need to operate? Evaluate requests for reasonableness in technical and cost expectations. Importantly, knowing the market ahead of the call can help you better filter the feedback, including whether any feature or product request is a one-off or, more broadly, signal a greater market shift.

Embrace A Sense of Purpose. Connecting more closely with the end application of your customers can help inspire a positive do-good company culture, and better align product strategy with the customer environment. In some cases, doing so may also lead to uncovering potential new market opportunities. Take, for instance, the food cold chain infrastructure challenges in emerging markets. Research analysis I’ve conducted on this conversation shows that over 40% food loss that occurs in the post-harvest and processing segments, forward-looking companies (in IoT and logistics arenas) interested in creating innovative partnerships in these markets can potentially expand market presence while also serving to reduce the food loss.

Time spent on updating your situational awareness can play an important role towards developing innovative products fit-for-market. The key is to start somewhere: get up to speed on current market trends, and connect with your sales teams on their overall customer interaction experience. They’re on the front lines of communicating with your customers. Assistance on these and other processes should be readily available in-house; if not, retain a professional.

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Sal Yazbeck is a technology strategist advising companies on product innovation and transformation in the data-connected cargo space. He also works individually with business leaders who prefer to receive personalized trusted remote advisory access on days and at times of their choosing. He has worked across several industries, and has taught at both university schools of business and technology. Connect with him on LinkedIn.

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Archives, Global Logistics, Ocean Carriers

LOOKING BACK WITH 2021 VISION: NAVIGATING THE EVOLVING OCEAN LOGISTICS INDUSTRY

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Nearly every business has experienced the effects of today’s global supply chain disruptions over the course of the COVID-19 pandemic, including product delays, shortages and rising costs. Pandemic-related challenges that were expected to be temporary are now predicted to last well into 2022—and potentially beyond.

The ocean freight industry has arguably shared the spotlight the most due to record-breaking prices, port congestion, container shortages and more. The average price worldwide to ship a 40-foot container has more than tripled from the beginning of 2021 and is 10 times pre-pandemic rates. Only a few months ago outside two of the biggest ports in the U.S. near Los Angeles and Long Beach, California (which manage 40% of all cargo containers entering the country), more than 70 vessels waited to dock. Before the pandemic, it was rare to see more than one.

Given today’s complexities, it’s important we examine the key 2021 learnings from the ocean logistics industry to incorporate lessons learned as we prepare to navigate the year ahead.

Lesson 1: Embrace Flexible Shipping Routes

As capacity shrank, container ships experienced record times to dock and labor shortages backlogged the unloading of cargo, 2021 highlighted that flexibility is key to a successful shipping strategy. For 3PLs and freight forwarders, this meant adapting plans in real time to manage limited resources in the most strategic way possible according to each customer’s specific product and goals.

For some large retailers and automotive manufacturers, for instance, we witnessed growing shifts from ocean to air cargo as an alternative. While air freight ensures a faster and more reliant shipment of goods, it is also a much more expensive option. According to Freightos, a $195 ocean shipment can comparatively cost $1,000 via air. Because of these major price discrepancies, we have largely seen the trend of shifting from ocean to air routes among big-box retailers and manufacturers of premium goods that can absorb the higher rates.

However, shifting from ocean to air is not feasible for most brands. Instead, flexibility in 2021 also meant pivoting to different ocean routes. Throughout the pandemic, many countries have closed or limited capacity at key shipping ports for reasons like worker shortages or limiting the spread of the virus. This presented 3PLs and freight forwarders with the opportunity to explore less traditionally traveled sea routes to try to mitigate delays. For example, closures in Australia due to COVID-19 significantly decreased capacity from the United States. As a result, some forwarders successfully rerouted to Singapore and finally to Sydney as a solution.

In 2021, we also increasingly saw shippers embrace a hybrid sea-air model. While transitioning wholly from ocean to air isn’t viable for most, shippers did strategically tap into air to move critical inventory to keep operations running smoothly on an as-needed basis. Ultimately, 2021 taught us that flexible, real-time adjustments to supply chain routes based on the current environment and each customer’s strategic goals is crucial to best navigate backlogs.

Lesson 2: Explore Agile & Visible Solutions

While the ocean freight industry has always experienced unplanned challenges beyond its control, such as severe weather, the impacts of COVID-19 have only exacerbated these preexisting issues. Now, it is more important than ever that shippers explore creative solutions to mitigate the effects of today’s both expected and unexpected challenges.

For example, in 2021, we saw the growing trend of major retailers and 3PLs chartering their own shipping vessels to combat capacity issues. Coca-Cola began chartering vessels typically reserved for raw goods like coal and iron to instead use for finished goods. Retailers such as Walmart explored chartering smaller container ships to dock at smaller ports to help side-step congestion. Also chartering vessels more and more were 3PLs seeking to guarantee capacity for clients in an ultra-tight sea freight market. While in the past this has traditionally been viewed as risky due to cost and capacity, chartering vessels became a creative solution for many this year to supplement carrier agreements.

For other shippers, particularly those unable to charter their own vessels, freight consolidation services became especially vital in 2021. Many brands leveraged Less than Container Load (LCL) services for reasons like the need to ship smaller and less-sensitive products on a more ad-hoc basis to keep up with fluctuating e-commerce demands. Partnerships with 3PLs became even more important thanks to fixed sailing schedules with space across all major routes, steady cargo volume to consolidate orders, and competitive rates and conditions.

This year also reinforced that incorporating sophisticated visibility technology into operations is imperative for maneuvering supply chain challenges. A 24/7 freight management application allows for real-time tracking and tracing and full control over shipments. Incorporating the latest visibility technology provides critical data across every stage of the supply chain—from tracking fluctuating customer demands to updates on freight in transit—to empower real-time, data-driven decisions. Visibility has proven to be particularly important during the pandemic to mitigate unforeseen disruptions by rapidly adjusting resources and strategies.

Lesson 3: Adjust Your Supply Chain with New Resources

The pandemic underscored just how critical it is to partner with supply chain experts amid times of severe disruption. In fact, a recent study predicts strategic relationships between shippers and 3PLs will increase from 28% to 45% over the next five years due to the effects of COVID-19.

There are several reasons behind this shift from transactional to relationship-driven partnerships between 3PLs and customers. First and foremost, a partnership with a skilled 3PL allows shippers to outsource supply chain management so instead, they can focus on their core competencies. Shippers found that working with a 3PL during the pandemic, when business decisions changed daily based on the fast-changing environment, was particularly significant in order to focus on running efficient operations. Deemed an essential service during the pandemic, 3PLs were also able to keep supply chains moving and businesses running.

Additionally, 3PLs are able to offer real-time adjustments to shipping strategies based on the current environment. Utilizing an international network across all modes of transportation, global 3PLs are equipped to provide comprehensive, 360-degree recommendations across the supply chain to source the best possible solution. For many businesses during the pandemic, demand was unpredictable and ever-changing. An advantage of partnering with a 3PL is its ability to quickly and easily scale operations up or down based on demand so customers can run their businesses most efficiently. With a massive network of transportation carriers, including vessels, planes, trucks and rails, 3PLs can tap into their strategic partners to best source capacity even during strained environments.

As we look ahead to 2022, it is important we learn from the ocean logistics challenges of the past year as these issues are not expected to end anytime soon. Because of this, it will be increasingly vital that businesses emphasize flexible and agile shipping strategies and relationship-driven, third-party partnerships to best navigate what is to come.

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Joshua Garee is vice president of U.S. Ocean Product at GEODIS in Americas. Previously the vice president of Operations at PAC International Logistics, Garee has a proven record of growing organizational talent and implementing innovative solutions through key leadership, best practice, strategic planning, continuous improvement, financial planning and cost management.

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Archives, Global Trade Daily, News

Growing Demand from China and Russia Drives Netherlands’ Baby Food Exports

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IndexBox has just published a new report: ‘Netherlands – Food Preparations For Infants – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

Last year, baby food exports from the Netherlands grew by +5.7% y-o-y in physical terms, driven primarily by rising demand from China and Russia. In 2020, the Netherlands supplied abroad 237K tonnes of baby food worth $2.7B. China and Russia constitute the largest importers, accounting for 54% of the total export volume.

Baby Food Exports from the Netherlands

In 2020, the amount of food preparations for infants exported from the Netherlands rose remarkably to 237K tonnes, with an increase of +5.7% compared with the year before. In value terms, baby food exports rose by +7.8% y-o-y to $2.7B (IndexBox estimates) in 2020.

China (129K tonnes) was the leading destination for baby food exports from the Netherlands, accounting for 54% of total exports. Moreover, baby food exports to China exceeded the volume sent to the second major destination, Hong Kong SAR (15K tonnes), eightfold. Russia (11K tonnes) occupied the third position in this ranking, with a 4.5% share.

In value terms, China ($1.7B) remains the key foreign market for baby food exports from the Netherlands, comprising 64% of total exports. Hong Kong SAR ($277M) occupied the second position in the ranking, with a 10% share of total exports, followed by Russia, with a 2.7% share.

In 2020, the value of supplies to China and Russia increased by +19.2% y-o-y and +4.1% y-o-y, respectively. By contrast, exports to Hong Kong SAR dropped by -32.3% y-o-y.

The average baby food export price stood at $11,318 per tonne in 2020, surging by +2% against the previous year. Prices varied noticeably by the country of destination; the country with the highest price was Hong Kong SAR, while the average price for exports to Greece was amongst the lowest. In 2020, the most notable growth rate in terms of prices was recorded for supplies to Poland, while the prices for the other significant destinations experienced more modest paces of growth.

Source: IndexBox Platform

fertilizer
Archives, Global Trade Daily, News

Fertilizer Prices Spike and Will Continue Rallying Next Year

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

Fertilizer prices continue to ramp up due to a shortage in supply caused by lower output in EU countries. High natural gas costs shape that growth because gas accounts for up to 80% of variable costs in nitrogen fertilizer production. Urea prices spiked exceptionally high to $900 per tonne in November 2021, gaining 30% against the previous month. Phosphate rock price rose by 4%, while diammonium phosphate and triple superphosphate were both up by 8%. Next year, fertilizer prices are projected to climb further due to a continued shortage in supply, but if costs for natural gas maintain their downward trend, they will hold the price increases back.

Key Trends and Insights

Fertilizer prices are continuing to rise. According to the December data from the World Bank, the urea price shot upward by 30% in November compared to the previous month, reaching $900.5 per tonne. This is already the second significant gain seen this year. Phosphate rock has also become more expensive by +4% up to $153 per tonne, while diammonium phosphate and triple superphosphate each increased by +8% to $727 and $665 per tonne, respectively.

The key factors driving fertilizer prices up were a supply shortage on the global market and the growing costs of natural gas, which account for up to 80% of variable costs in producing nitrogen fertilizers. Faced with more expensive energy resources, many European producers had to stop production as they couldn’t compete with counterparts in Russia, countries in the Persian Gulf and northern Africa. As a result, the global supply of fertilizer decreased and led to subsequent price increases.

According to the World Bank, in November, the prices for natural gas in the U.S. decreased by -8% to $5.02 per MMBtu, and by -11% in Europe to $27.6 per MMBtu, but despite that, they are still at record highs. If the cost for natural gas declines, it may reduce the rate of price increases in the upcoming months. However, this will not eliminate the long-term upward trend in fertilizer prices as there will still be a shortage in supply.

Global Fertilizer Exports by Country

In 2020, global fertilizer exports amounted to 204M tonnes, increasing by 2% from the previous year’s figure. In value terms, exports dropped to $52.7B (IndexBox estimates)

The largest fertilizer supplying countries worldwide were Russia ($7B), China ($6.3B) and Canada ($5.1B), together comprising 35% of global exports. These countries were followed by the U.S., Morocco, Saudi Arabia, Belarus, Germany, the Netherlands, Belgium, Israel, Oman and Algeria, which together accounted for a further 38%. The shipments of the three major exporters of fertilizers, namely Russia, China and Canada, represented more than a third of total export in physical terms.

Top Largest Importers Worldwide

Brazil (34M tonnes), India (25M tonnes) and the U.S. (23M tonnes) represented roughly 37% of total imports of fertilizers in 2020. It was distantly followed by China (10M tonnes), generating a 4.8% share of total imports. France (7.4M tonnes), Indonesia (6.2M tonnes), Australia (5.2M tonnes), Thailand (5M tonnes), Canada (4.4M tonnes), Turkey (4.3M tonnes), Germany (4.1M tonnes), Argentina (4M tonnes) and Belgium (3.9M tonnes) held small shares of total imports.

In value terms, the largest fertilizer importing markets worldwide were Brazil ($8.6B), India ($7.1B) and the U.S. ($5.6B), together accounting for 36% of global imports. These countries were followed by China, France, Australia, Thailand, Canada, Indonesia, Argentina, Turkey, Germany and Belgium, which together accounted for a further 24%.

Source: IndexBox Platform

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Archives, Global Logistics, Global Trade Daily, Ocean Ports, Site Selection, State Spotlight

PROPOSED CONTAINER-ON-VESSEL SERVICE TO THE ST. LOUIS REGION ADVANCES WITH NEW PARTNERS SIGNING ON FOR THE DEVELOPMENT OF A CONTAINER PORT FACILITY IN JEFFERSON COUNTY, MISSOURI

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Key stakeholders behind the efforts to launch innovative Container-on-Vessel (COV) service to the Midwest today announced that Hawtex Development Corporation is signing on as the lead developer for a new COV port facility in Jefferson County, to be developed in collaboration with Fred Weber/Riverview Commerce Park LLC and integrating a 300+ acre adjacent parcel owned by The Doe Run Company. The new port will be a critical link on the new, all-water, north-south trade lane connecting the Midwest and the St. Louis region to the lower Mississippi River and on to worldwide destinations. Representatives from the Jefferson County (MO) Port Authority, Jefferson County, Missouri, Bi-State Development, American Patriot Holdings LLC/American Patriot Container Transport LLC and APM Terminals joined the newest partners in this bold initiative on Dec. 17 in Herculaneum, Mo., where the port will be located, to provide details on the new facility and the service it will support.

Hawtex Development Corporation, a business development and consulting company with operations in Texas and Hawaii, has been working with American Patriot Holdings over the past several years to help in identifying and establishing market-ready locations for Mississippi River intermodal container facilities, with an initial focus on the Memphis and St. Louis regions. In the St. Louis region, the Herculaneum site that is already home to Fred Weber/RCP’s current port facility and adjacent to the parcel owned by The Doe Run Company emerged as the most advantageous site to develop a state-of-the-art intermodal container facility to serve this central Midwest region for both the export and import of containerized cargo.

“Through this new collaboration with our partners here in Jefferson County, Hawtex is looking forward to leading the development team for the planned facility on the Mississippi River at Herculaneum,” said James Hurley, President of Hawtex Development Corporation. “We will be leading discussions with RCP and The Doe Run Company principals to complete a comprehensive Development Agreement beginning early in the new year, and we will be meeting with and confirming service requirements for a number of St. Louis-based and regional beneficial cargo owners throughout Q1 of 2022. Our goal is to bring this facility to operating status in Q4 of 2024.”

The facility is in the early stages of development and the new partnership allows all parties to start planning efforts that enable final investment decisions. The total amount of the investment to be made at the new port is yet to be determined.

Sal Litrico, Chief Executive Officer, American Patriot Container Transport LLC (APCT), which is developing the patented new vessels that will carry the containerized cargo along the underutilized Mississippi, Illinois and Missouri rivers, also revealed at the event that APCT has issued a solicitation to seven US shipyards for construction of four of the patented container on vessels that will provide the new COV service, and an option for four more, another critical milestone in this initiative. The call for submissions was issued Dec. 14 and proposals are due at the end of February.

“The new partnerships being forged today and the advancements we’re making toward construction of the new vessels represent another huge step forward for this unique supply chain option that will reduce transportation costs for shippers by approximately 30 to 40%,” said Litrico. “The Mississippi River is ice free and lock free from the St. Louis region all the way south to the Gulf Coast, enabling us to bring our new vessels with the capacity to carry 2,375 20-foot long by 8-foot tall shipping containers right into the heart of the Midwest, and this new port facility will be developed specifically to be able to handle those vessels and containers.”

Mark Denton, Vice President of Fred Weber/Riverview Commerce Park, shared his enthusiasm for the proposed new service and the role that RCP will play in it.

“When Fred Weber, Inc. set out to start Riverview Commerce Park in 2013, our CEO, Doug Weible, told me that we would be handling containers here someday. While Doug has always had great foresight, I don’t believe even he could have envisioned what the APH team has put together with these amazing new vessels that will revolutionize the container shipping industry, not just in the Midwest, but throughout the world,” said Denton.

The announcement about the new Jefferson County facility follows news of other recent milestones met that are helping to move the new COV service closer to reality. In August of 2020, American Patriot Holdings LLC (APH) and Plaquemines Port Harbor and Terminal District (PPHTD) in Louisiana announced they had signed a letter of intent to develop a multimodal, state-of-the-art container terminal at its facility near the mouth of the Mississippi River, which would be the gateway port for the new COV service. APM Terminals North America was recently announced as the Container-on-Vessel terminal operator for the gateway port and is working with global shippers to integrate this proposed new logistics system with Midwest manufacturers and producers.

“The Plaquemines protected river port location and export/import market strength coupled with the strategic middle-America location of the Herculaneum port in the St. Louis region makes this a very unique supply chain offering for customers and our growth ambitions,” said Brian Harold, Managing Director of APM Terminals. “We look forward to working with all of the partners involved and with state and local leaders to ensure both ports are set up for long-term success.”

The Vessels & The Opportunity

The patented APCT vessels will be built in two sizes with the larger “Liner” vessel traveling between the gateway terminal in Plaquemines and the Mississippi River ports in Memphis, Tenn., and the new port facility in Herculaneum. The smaller “Hybrid” vessel will have a container capacity of 1,800 TEUs and is designed to move through locks and low-lying bridges on the tributary rivers, providing service from those two primary Midwest ports to feeder ports along the Mississippi, Missouri and Illinois rivers in the St. Louis region and other upstream ports, including ports in Kansas City and Jefferson City in Missouri and in Joliet and Cairo in Illinois and Fort Smith in Arkansas.

Both vessels are designed with a patented “Exoskeleton Hull Structure” designed to limit the vessels’ lightship weight to maximize cargo payload. The second patented feature is the “Minimal Wake Bow Structure” which minimizes hull resistance enabling upriver speed of 13 miles per hour with minimal wake.  Expected round trip times to Memphis is six days and St. Louis in 10 days, significantly faster than traditional barge tows. The vessels will also be environmentally friendly, utilizing LNG (liquefied natural gas) power, and cargo flexible with ability to carry a diversity of cargo, including refrigerated containers.

“Given the supply chain disruption we’ve seen over the past two years and the continuing congestion at the West Coast ports, there is no question that shippers need alternatives,” said Mary Lamie, Executive Vice President of Multi Modal Enterprises for Bi-State Development and head of the St. Louis Regional Freightway, which has been working to build relationships with other Midwest ports over the past few years to help advance the COV initiative. “This is a new option to transport freight. The state of Missouri and the St. Louis region already play a critical role as a reliever during supply chain disruptions and our freight advantages are fueling this new opportunity to elevate the Mississippi River and the Missouri River’s role in global trade.

The proposed new service will also be welcomed by members of the agriculture industry, who recognize that currently 50% of U.S. crops and livestock are produced within a 500-mile radius of the St. Louis region, including approximately 80% of corn and soybean acreage.

“Missouri’s river system is an invaluable means of transportation for our state’s number one industry – agriculture. This container-on-vessel service allows our supply chain to remain strong and reliable, delivering products in the most sustainable, efficient and cost-effective way to end-users,” said Gary Wheeler, Missouri Soybeans CEO and executive director. “As Missouri’s leader in agricultural exports, our organization and farmers have been involved and invested in American Patriot Holdings to move more product and aid the state’s economy and environment. Our soybean growers understand this immense value and is why we continue to devote dollars into modernizing our state’s infrastructure.”

To get more details on the new service or request a proposal, shippers can contact Sal Litrico via email at slitrico@americanpatriotholdings.com or phone at 813-924-9031.

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Archives, Global Trade Daily, News

Turkey Prices in the U.S. Keep Soaring Due to Strong Demand and Labor Shortages

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

This November, the price for fresh whole body turkeys surpassed November 2020 figures by 9%, while frozen whole body turkeys jumped 20% y-o-y. A short supply of workers led to lower turkey output and higher prices on the backdrop of consistently strong consumer demand. Turkey imports to the U.S. maintained the previous year’s levels. Canada and Chile remain the only turkey suppliers to America. Unprecedented inflation rates have struck the entire food sector; in October 2021, price increases for meats, poultry, fish and eggs became the highest recorded in the past 30 years.

Key Trends and Insights

Due to accelerating food inflation, Thanksgiving dinner this year will cost Americans significantly more than the previous one. According to the latest report from the USDA, the average price for fresh whole body turkeys in November 2021 was $1.46 per pound, which is 9% more than the previous year. The price for frozen whole body turkeys came to $1.36 per pound, a 20% increase in comparison to 2020.

The average cost of organic fresh whole body turkeys totaled $3.24 per pound (+4.8% compared to November 2020), while organic frozen whole body turkeys were $3.30 per pound (+23%). On average antibiotic-free fresh whole body turkeys cost $2.37 per pound (a decrease of 7%), at the same time, frozen whole body turkeys are going for $3.30 per pound (twice the gains compared to November 2020).

The increase in turkey prices is caused by solid demand running into a 6% y-o-y drop in butchered turkeys to 4.6M tonnes, due in part to a deficit of workers. The turkey market size in 2020 totaled 2.4M tonnes, while this year, it is expected to decrease to about 2.3M tonnes.

Higher turkey prices are occurring in the broader context of unprecedented inflation for food products. According to the U.S. Bureau of Labor Statistics, October prices for meats, poultry, fish and eggs grew by 11.9% in comparison with October 2020. That is the fastest rate of price increases in the past 30 years.

It is unlikely that imports will offset the short supply of turkeys in the US. In 2021, imports remained at comparable levels to the previous year and from January through September consisted of 7K tonnes, accounting for about 0.4% of US consumption. In monetary terms, imports totaled $19.6M, having grown by 7% in comparison with the same period in 2020. Canada makes up 80% of American imports, together with Chile being the only suppliers of turkeys to the U.S.

Turkey Exports from the U.S.

In 2020, exports of turkey meat from the U.S. contracted to 214K tonnes, with a decrease of -11.8% compared with 2019. In value terms, turkey meat exports shrank from $483M to $416M (IndexBox estimates).

Mexico (135K tonnes) was the main destination for turkey meat exports from the U.S., accounting for a 63% share of total exports. Moreover, turkey meat exports to Mexico exceeded the volume sent to the second major destination, China (17K tonnes), eightfold. The third position in this ranking was occupied by Guatemala (4.8K tonnes), with a 2.2% share.

In value terms, Mexico ($262M) remains the key foreign market for turkey meat exports from the U.S., comprising 63% of total exports. The second position in the ranking was occupied by China ($27M), with a 6.6% share of total exports. It was followed by the Dominican Republic, with a 2.6% share.

From 2010 to 2020, the average annual growth rate of value to Mexico (+0.2% per year) was relatively modest. Exports to the other major destinations recorded the following average annual rates of exports growth: China (-3.0% per year) and the Dominican Republic (+0.2% per year).

In 2020, the average turkey meat export price amounted to $1,945 per tonne, with a decrease of -2.4% against the previous year. There were significant differences in the average prices for the major export markets. In 2020, the country with the highest price was the Dominican Republic ($2,434 per tonne), while the average price for exports to Jamaica ($1,195 per tonne) was amongst the lowest. Over the past decade, the most notable rate of growth in terms of prices was recorded for supplies to China, while the prices for the other major destinations experienced more modest paces of growth.

Source: IndexBox Platform

global trade
3pls, Archives, Global Logistics, Global Trade Daily, Ocean Carriers

How to Prepare for Global Logistics in 2022

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2021 was a difficult year in global logistics due to ongoing volatility. We worked alongside customers navigating the Suez Canal block, hurricanes and cyclones, port and terminal closures due to COVID-19 outbreaks, customs and trade changes, labor shortages and more.

I’ve been in the industry since 1997 and I have never seen this level of continual disruption across the entire supply chain for this length of time. However, with this year’s volatility, I was also given a front-row seat to a new level of hyper collaboration –  including individuals going out of their way to help each other, more strategy sessions between shippers and forwarders, and continually leaning into historical data and current market insights to find smarter solutions.

As we approach another potentially volatile year, I wanted to provide key strategies for global shippers to consider.

Seek creative solutions across the entire supply chain

At year-end, we typically see a jump in demand as shippers meet quarter-end quotas and prepare for the upcoming Lunar New Year, during which many factories in China shut down. However, in early 2022, shippers will also be juggling potential delays from the Winter Olympics which will be hosted in Beijing throughout February. All of this is amid a strained supply chain market, which will take time to ease.

As you prepare for 2022, consider what different modes, trade lanes, or inland transportation strategies you can implement in your supply chain. For example, while it may not be feasible to transport 100% of your freight via air, air freight continues to be the fastest way to replenish inventory, so prioritizing specific freight can help keep cargo moving. In fact, C.H. Robinson is running on average 15-17 air charters a week globally for customers looking to avoid the congested ocean ports, and we don’t expect that number to decrease at the start of the new year.

Additionally, as demand and rates will likely continue to stay elevated through the beginning of next year, less-than-container load (LCL) shipping is a strategy to consider. Typically, space for LCL shipments is easier to find especially in a constrained capacity market, since you are only looking for some container space versus an entire empty container. We also continue to see large cost savings with expedited LCL services compared to today’s airfreight environment.

Keep in mind, LCL shipments are not going to bypass congestion at the ports, so inland strategies need to be considered. Currently, many ocean carriers are looking to move more IPI (interior point intermodal) cargo versus focusing on port-to-port. We were able to help increase the flow of cargo inland for our customers by sending more 53-foot containers so cargo on the smaller 40-foot ocean containers can be efficiently consolidated in the larger ones and loaded onto trucks or trains to be taken to inland destinations more quickly. Overall, this increased our container capacity by 25% in Southern California.

As you can see, looking at only one portion of the supply chain or one mode can only get you so far. It’s important to consider all areas to keep your cargo moving.

Utilize data and technology

Although this past year has rendered a lot of unique situations and 2022 may do the same, historical data can still help us find solutions. Finding common trends and themes in your cyclical data can give you an information advantage to make smarter decisions for your supply chain.

Additionally, the right technology tools can give you the visibility and predictability you need to adjust. For example, with the ongoing port congestion and delays, C.H. Robinson enhanced the vessel routing and tracking features within our transportation management system, Navisphere®, to increase the efficiency and accuracy of port ETAs and automatically send updates if changes were discovered. This is important because ocean shipping is only one piece of the equation. Having visibility to changes in real-time gives our team and customers a chance to react and adjust other tactics down the road.

Look to global trade opportunities

While congestion and shortages continue across transportation modes, one area where you may find opportunities for savings is in your global trade strategy. Since each country’s trade policies are unique and can change, it’s important to have regular meetings with your trade advisor to break through the complexity of your total landed costs, including understanding your costs to import, identifying duty recovery possibilities, and reducing your duty exposure via trade agreements.

For example, our team has helped shippers identify thousands to millions of dollars in tariff refunds alone. If you import into the U.S., you can easily check for potential savings and refunds with our online Tariff Search Tool. And, if you’re sourcing from other countries, our team can create a customized sourcing report sharing potential cost savings or avoidance opportunities.

Final Thoughts

While there is no one-size-fits-all approach, the above options provide shippers with strategies to help mitigate delays and identify potential savings as we enter another potentially unpredictable year.

Shippers have had to become increasingly nimble and informed over the past year, and going into 2022 it’s critical to remain agile, be open to alternative solutions, and stay informed on the latest market insights.

semiconductor manufacturing
Archives, Global Trade Daily, News

5 Major Trends Transforming Semiconductor Manufacturing Equipment Market Outlook over 2021-2027

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The expansion of the electronics industry, driven by the burgeoning demand for consumer electronics, the growing gaming industry, and increasing proclivity towards electric and hybrid vehicles, has created enormous lucrative opportunities for the semiconductor manufacturing equipment market. This can be attributed to the elevating demand for various semiconductor manufacturing tools for producing memory ICs, sensors, PMIC, microprocessors, system-on-chips, etc.

The industry landscape is being further enhanced by ongoing business expansion moves initiated by major semiconductor companies. A prominent example of such an initiative is the commencement of the construction of two new factories in the U.S. by the leading chipmaker Intel in 2021. These facilities will house the company’s highly advanced chipmaking technology.

According to the recent report by Global Market Insights, Inc., the semiconductor manufacturing equipment market size is projected to surpass USD 90 billion by 2027, in light of the following trends:

New product launches by key companies

Major companies operating in the industry are focusing on the development of innovative semiconductor manufacturing devices to effectively meet consumer demand and gain a competitive edge in the market. Quoting an instance, in 2020, Advantest Corporation launched two general-purpose hardware equipment, digital, and power supply modules to support the capabilities of the T2000 test platform. They are designed for use in the volume manufacturing of SoC chips, power management ICs, CMOS image sensors, and automotive sensors.

Heightened adoption of polishing & grinding equipment

Polishing & grinding processes are largely adopted for manufacturing MEMS sensors, integrated circuits (ICs), chipsets, optics, and compound semiconductors. The growing preference for miniaturized ICs in electronics requires frequent polishing & grinding for reducing subsurface damage and maintaining wafer flexibility. The rising demand for the process is encouraging the market players to focus on new product development which is positively influencing the business growth. To illustrate, in 2020, ACM Research, Inc. introduced the Ultra-Stress-Free Polishing tool for advanced semiconductor packaging and wafer processing. Reportedly, polishing & grinding equipment is projected to exhibit a robust CAGR of over 5.0% through 2027.

Mounting popularity of 2D technology

The growing popularity of 2D technology can be credited to the associated benefits such as robust built, less power consumption, and minimum cost of operations. It is being extensively used in the manufacturing of 2D-planar memory devices. Various companies and research institutes are forming strategic alliances to develop ICs based on 2D material. For instance, in 2021, TSMC partnered with the National Institute of Taiwan and MIT for developing 1nm chips using two-dimensional material. With increased adoption, 2D technology segment is expected to observe a lucrative CAGR of 6.0% through 2027.

Rising adoption of foundry supply chain process

Rising demand for power electronics and high-performance computing devices is prompting the foundry providers to improve their IC manufacturing through new technology nodes. Various companies are inclined on technical enhancements like application of laser-plasma as a light source in extreme ultraviolet printing devices to generate high-quality wavelengths. For instance, in 2021, Micron announced its plans of deploying extreme ultraviolet equipment in its manufacturing foundries. Considering these factors, the foundry supply chain process segment had captured over 25% share in 2020 and is expected to register a significant CAGR of over 6.0% through 2027.

Growing semiconductor-based projects in Europe

The increasing government initiatives and investments towards semiconductor-based projects in Europe are driving the expansion of the semiconductor manufacturing equipment industry in the region. To illustrate, in 2021, the European Union unveiled its plans of increasing the chip production capacity by 20% by 2030. The EU also declared investing USD 160 billion towards technological development involving semiconductor manufacturing and supply chain infrastructure. In addition, regional chipmakers are collaborating with diverse industry experts which, in turn, is favoring industrial growth. According to the report, the industry is anticipated to register a robust CAGR of 4.5% through 2027.

Briefly, the semiconductor manufacturing equipment market is gaining traction with the increasing investments in chip manufacturing facilities coupled with the emergence of technologically advanced solutions.

Source: Global Market Insights Inc.

inventory
Archives, Global Logistics, Global Trade Daily, Warehousing

Top 3 Performance Indicators to have in an Effective VMI

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To ensure effective inventory management, a supplier must have quality Vendor Managed Inventory (VMI). But how do you evaluate such software before purchasing and implementing it? What metrics should you look for?

Inventory Management

In a buyer/supplier relationship, the retailer and vendor are often jointly involved in inventory management, an approach called collaborative supply management. In the context of VMI (Vendor Managed Inventory), the delivery of goods to warehouses and stores is the vendor’s responsibility – they are required to deliver goods based on customer needs.

To successfully manage supply operations and ensure good processing speed, suppliers must keep track of their inventory levels. By getting up-to-date data on stock levels in warehouses and stores, suppliers can cover demand for goods and prevent costs and shortages.

The objective/goal: To have the right amount of goods at the right time, thanks to an adequate assessment of needs.

Demand Forecasting

For the most accurate supply management, suppliers make their forecasts based on the preliminary trends that VMI generates. To improve efficiency, the management tool should quickly and easily forecast demand. Additionally, the tool should provide the ability to check the reliability of the forecast at the end of the cycle (day, week, month) to assess future supplier needs.

For example, the software has predicted that customers will have demand for 200 security lockboxes. At the end of the cycle, we should be able to verify that all of the predicted items have been sold.

The objective/goal: Make the necessary changes in the next delivery cycle so that we don’t have to rely on chance.

Service Rate

Typically, retailers use a collaborative inventory management model when they intend to achieve an optimal service rate.

The objective/goal: no shortages and always meet store demands.

By sharing inventory management responsibilities, retailers aim to meet store demands while reducing inventory. Therefore, to optimize service rates, suppliers must be prepared to ship items coming in from different delivery points every day.

In a vendor-controlled supply chain model, a quality VMI solution is a key element in ensuring effective collaboration between all parties in the relationship. Only with fine-tuned inventory management and reliable demand forecasting is it possible to achieve optimal service rates. Which is simply necessary to build a successful vendor-implemented inventory management model.

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

This article originally appeared here. Republished with permission. 

holiday
Archives, Global Logistics, Global Trade Daily, Special Reports

Prep for the Holiday Season with Top E-commerce Strategies

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The most wonderful time of the year…is here. You already know that the holiday shopping season is the most critical period for retailers, both online and brick and mortar. How your business does during the last quarter of the year determines where things land for your bottom line.
 

This year, though, brand and e-commerce marketing managers are facing another wild ride, with uncertainty created by shifting trends. The pandemic brought on a surge in online buying, and many buyers are likely to continue to buy online. In fact, according to September 2021 survey data, consumers are planning a 50/50 split between online and brick-and-mortar buying. The retail giants—Amazon, Target, and Wal-Mart—are already capitalizing on convenience to hold onto their share of wallet.

 

There are other factors, though, to consider. Shopping trends are changing fast. News of supply chain pressures and worldwide shipping delays has spurred many shoppers to buy early or shift their buying behavior — 83% of shoppers intend to start before Thanksgiving this year, in a departure from the norm. In such an unpredictable market at such a high-stakes time of year, business intelligence has never mattered more. This is where the performance analytics platform Line Item can be the lifeline e-commerce marketers need right now to ensure they make the most of the holiday season.As we head into the heart of the 2021 holiday season, here are a few strategies to prepare and protect your digital shelf for the upcoming holidays.

Focus on organic search ranking. Whether they’re buying online or in person, many shoppers start their research online—on a smartphone or a tablet. This is why it’s essential to monitor and improve your online search ranking. Watch where you’re showing up, too. Moving from page 2 to page 1—and even into the top 10 listings—can significantly boost your sales. Improving your organic search ranking depends on visibility into what’s working—or not—for your brand. This is where Line Item can help, with detailed insight into what changes you could make to content, product descriptions, or imagery to affect your ranking in organic search results.

Analyze your paid search strategy. Shoppers are pressed for time, and you have only seconds to capture attention when it comes to search results. The holiday season is the time to invest in a robust paid search strategy, but you’ll want to be sure you understand what product attributes drive value. This is where Line Item can give you valuable campaign-level and product attribute insights. With them, you can better understand what’s driving the market and what your competitors are doing, so you can sharpen your edge and see ROI from a page-1 slot.Ensure your product detail pages are complete. This is a biggie. Incomplete or inconsistent product detail pages can harm you, whether we’re talking about Amazon listings or your own website. Across your e-commerce portfolio, all product detail pages should be complete, correct, and compelling. Line Item can help with this to make sure you aren’t overlooking clear areas or gaps that prevent you from meeting category bestseller benchmark standards.

Evaluate your SEO strategy and campaigns. During this volatile time of year, whims and demand drive the market in unpredictable ways. And that’s during a typical season, which 2021 is anything but. It’s essential to drill down to campaign elements, including CPCs, to ensure you have a read on how changing demand, sudden interest, or seasonality might be driving spend. E-analytics insight from Line Item can help you ensure your campaigns are profitable and that your overall marketing spend ultimately drives return on investment.

Watch out-of-stocks closely. Maintaining optimal inventory is key to profitability. When a customer is ready to buy and your product is out of stock, you lose the sale—and maybe the customer, too. Line Item helps you determine if out-of-stocks are hurting your revenue.

Track pricing. Many retailers are introducing new pricing strategies to drive sales this holiday season. Buy Now Pay Later is one of these, and it can appeal to segments like Gen Z and the unbanked, both of which are more price sensitive. The major retailers have already rolled out BNPL options; some have been in play since 2019. BNPL can affect pricing, so it’s important to monitor this. With Line Item, you can verify item pricing, selling price, and list price across platforms, ensuring that products are priced correctly even with new options like BNPL, and you can easily monitor third-party and competitor activity to protect your brand and products.

Of course, there are other strategies to consider, too—best practices like:

-Ensuring your checkout process is as easy as possible

-Providing access to customer service with tools like live chat, and with quick responses

-Creating engaging content, like gift guides

-Using targeting and segmentation to create personalized email campaigns

-Boosting sales with savvy retargeting

Using updated visuals and copy for featured holiday campaigns, and to ensure your site and product pages have that holiday look and feel, and more

This holiday season may be full of surprises, but your performance shouldn’t be one of them. The right insight can make or break your brand this holiday season, and business intelligence can give you what you need, when you need it. This is where Line Item really stands out as a single platform with insight into shopping trends and behavior, and what your competitors are doing—so you can finish 2021 in the black.