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U.S. and China Expand Caustic Soda Exports to Brazil

caustic soda
Archives, Global Trade Daily, Imports/Exports

U.S. and China Expand Caustic Soda Exports to Brazil

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IndexBox has just published a new report: ‘Brazil – Caustic Soda – Market Analysis, Forecast, Size, Trends And Insights‘. Here is a summary of the report’s key findings.

In 2020, Brazil’s caustic soda imports jumped by +17% y-o-y to 2.7M tonnes, or by +11% y-o-y to $507M in value terms. The U.S., followed by Peru and China, remains the key supplier of caustic soda to Brazil, accounting for 91% of the import volume. Last year, purchases from the U.S. and China soared in physical terms, while imports from Peru declined by -12% y-o-y. The average caustic soda import price dropped by -5.3% y-o-y to $185 per tonne in 2020.

Brazil’s Caustic Soda Imports 

In 2020, approx. 2.7M tonnes of caustic soda were imported into Brazil, increasing by +17% against the previous year’s figure. In value terms, caustic soda imports expanded by +10.6% y-o-y to $507M (IndexBox estimates) in 2020.

In 2020, the U.S. (2.5M tonnes) was the leading supplier of caustic soda to Brazil, with a 91% share of total imports. It was followed by Peru (65K tonnes), with a 2.4% share of total imports. China (63K tonnes) ranked third in terms of total imports with a 2.3% share.

In 2020, the volume of supplies from the U.S. totalled grew by +13.7% y-o-y. Imports from Peru dropped by -12.3% y-o-y, while purchases from China rose nearly twofold.

In value terms, the U.S. ($451M) constituted the largest supplier of to Brazil, comprising 89% of total imports. The second position in the ranking was occupied by China ($15M), with a 3% share of total imports, and it was followed by Peru, with a 2.6% share.

The average caustic soda import price stood at $185 per tonne in 2020, dropping by -5.3% against the previous year. Average prices varied somewhat amongst the major supplying countries. In 2020, the highest prices were recorded for prices from China ($244 per tonne) and Peru ($204 per tonne), while the price for Saudi Arabia ($165 per tonne) and the U.S. ($182 per tonne) were amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Saudi Arabia, while the prices for the other significant suppliers experienced mixed trend patterns.

Source: IndexBox Platform

cotton
Archives, Global Trade Daily, News

Cotton Prices Jump After U.S. Cut Exports Twofold

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

Cotton prices jumped by +13% to $2.59 per kg in October 2021, according to World Bank’s data. Global supply shows a sign of reduction, as American cotton exports dropped twofold from September to October. Droughts have wiped out a significant part of cotton crops across the U.S., especially in Texas. The U.S. remains the world’s leading supplier, accounting for 41% of global cotton lint exports. China, Viet Nam, and Pakistan represent key importers of cotton lint from America.

Cotton Price Trend

According to World Bank’s data, the cotton price (middling 1-3/32 inch, traded at the Far East) jumped from $2.29 per kg in September 2021 to $2.59 per kg in October. The reducing yields in the U.S. due to unfavourable weather forced American suppliers to slump exports, decreasing global market supply. The U.S. is the leading supplier, accounting for 41% of global cotton lint exports.

Since the beginning of this year, the global price increased from $1.92 per kg in January to $2.59 per kg in October. In 2020, the average cotton price estimated at $1.59 per kg.

American Cotton Exports by Country

Since the second half of 2021, American cotton exports have started to decline steadily. The most prominent drop was recorded in October when the supplies abroad fell from 209K tonnes to 122K tonnes over a month.

In 2020, the amount of cotton lint exported from the U.S. rose significantly to 3.8M tonnes, picking up by +7.3% compared with 2019 figures. In value terms, cotton lint exports fell slightly from $6.1B in 2019 to $6B (IndexBox estimates) in 2020.

China (1.2M tonnes), Viet Nam (782K tonnes), and Pakistan (507K tonnes) were the main destinations of cotton lint exports from the U.S., with a combined 65% share of total exports. In 2020, the supplies to China grew threefold, while shipments for the other leaders experienced mixed trend patterns.

In value terms, China ($1.8B), Viet Nam ($1.2B) and Pakistan ($788M) appeared to be the largest markets for cotton lint exported from the U.S. worldwide, together comprising 63% of total exports.

The average export price for cotton lint from the U.S. stood at $1,56 per kg in 2020, shrinking by -9.5% against the previous year. Average prices varied somewhat for the major overseas markets. In 2020, the highest prices were recorded for prices to India ($2,12 per kg) and Indonesia ($1,62 per kg), while the average prices for exports to Viet Nam ($1,5 per kg) and China ($1,54 per kg) were amongst the lowest. In 2020, the most notable growth rate in terms of prices was recorded for supplies to India, while the prices for the other significant destinations experienced a decline.

Source: IndexBox Platform

christmas
Archives, Global Trade Daily, News

Americans Are Paying More for Christmas Decorations This Year. Here’s Why.

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

This year, Americans have to pay more for Christmas lights, as the average import price for lighting sets soared by 7% compared to the figures of 2020, reaching $3.08 per unit. The reduction in global production of lighting decorations and skyrocketed freight rates, combined with the increased cost of raw materials and energy resources, led to this spike in prices. Throughout January-October 2021, U.S.Christmas lighting set imports totaled $511M, 10% more than in the same period a year earlier. In physical terms, the volume of supplies remained nearly unchanged against 2020’s figures, while shipment from China reduced significantly.  

U.S. Christmas Lighting Set Imports in 2021

The average import price for Christmas lighting sets in the U.S. soared by 7% y-o-y to $3.08 per unit. Over the ten months of 2021, the average prices of products purchased from major suppliers were the following: Cambodia ($3.10 per unit; increase of +5.0% y-o-y,), Philippines ($3.17 per unit; +25% y-o-y), China ($3.75 per unit; +5.0% y-o-y).

From January to October 2021, the U.S. imported 150M units of lighting sets worth $511M. In value terms, imports rose by +10% compared to the same period last year, while the purchases in physical terms remained nearly unchanged.

China’s supplies fell by -20% to 15.5M units or by -23% to $66.7M in monetary terms. This decrease was offset by rising imports from Cambodia, Viet Nam, Mexico, the Philippines, Malaysia, Australia, the Netherlands and Hong Kong. Compared to the same period in 2020, this year’s growths of shipments from major suppliers were the following: Cambodia (+1.4%, to 91.3М units), Philippines (+3.3%, to 24.7M units), Mexico (+2.9% to 12.7M units).

Imports from Viet Nam soared from 930K units to 3.2M units. Moreover, Malaysia, Australia, the Netherlands and Hong Kong have also significantly expanded their lighting set exports to the U.S.

U.S. Christmas Lighting Set Imports in 2020

Last year, imports of lighting sets for Christmas trees into the U.S. amounted to 149M units. In value terms, purchases shrank modestly to $479M (IndexBox estimates). The U.S. remained the largest importer, accounting for 22% of global import volume.

Cambodia ($288M) constituted the largest supplier of lighting set for Christmas trees to the U.S., comprising 60% of total imports. The second position in the ranking was occupied by China ($90M), with a 19% share of total imports. It was followed by the Philippines, with a 14% share.

The growth rate of value from Cambodia amounted to +21.5% y-o-y. The remaining supplying countries recorded the following average annual rates of imports growth: China (-36.4% y-o-y) and the Philippines (-20.1% y-o-y).

Source: IndexBox Platform

FTZs
Archives, Foreign Trade Zones, Global Logistics, Global Trade Daily

Demystifying Foreign-Trade Zones: Tackling 3 Myths to Leverage FTZs in 2022

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Bigfoot, the Boogie Man, the Loch Ness Monster, and… Foreign-Trade Zones? Despite the overwhelming advantages offered by U.S. Foreign-Trade Zones (FTZs), there are still many misconceptions — and sometimes a little fear — surrounding the program. Much like Bigfoot, the reality of FTZs is far less scary.

To better understand FTZs, let’s get back to the basics. Foreign-trade zones, also referred to internationally as “free-trade zones” (and formerly named “free ports”), are areas where goods may be received, packaged, manipulated, manufactured, processed, and re-exported without the intervention of the customs authorities. These zones are designated sites authorized by the U.S. FTZ Board. A site that has been granted zone status must be approved for FTZ activation by the U.S. Customs and Border Protection (CBP) to receive FTZ benefits. While FTZs are considered to be outside CBP territory, foreign-trade zones still fall under the supervision of CBP.

These guidelines and procedures allow domestic activity involving foreign items to take place prior to formal customs entry. As a result, businesses — typically manufacturers and distributors — that leverage these zones drastically reduce or eliminate duty costs, encourage U.S. trade, and improve supply chain productivity.

FTZs have been in existence since 1934, and despite the fact that the program offers distribution and manufacturing companies tremendous reductions in duties, customs fees, and even logistics costs, FTZs still seem to be a misunderstood or even unrecognized trade program. How prevalent are FTZs in the U.S.? Who uses them? Are they still a viable solution?

According to the 2020 FTZ Report to the U.S. Congress, there were 195 active FTZs across all 50 states and Puerto Rico, and 3,400 companies taking part in the program. Last year also saw $625 billion in shipments made through FTZs, despite the challenges the global supply chain faced in 2020.

It’s understandable for CSCOs and business leaders to have concerns when introducing a new trade program. Some companies may be dragging their feet due to the current strain on the supply chain, and others may believe common FTZ misconceptions. However, companies that are taking advantage of FTZs are realizing impressive savings, and in many cases, obtaining relief from a number of supply chain issues. It’s time to debunk some common myths to demystify FTZs, explore the benefits of the program, and learn how to leverage FTZs in an increasingly competitive world. Let’s get started.

Myth #1: “My entire company and supply chain will be disrupted if I start using an FTZ.”

Over the past 20 years, the FTZ program has changed significantly. These changes make it far easier to establish and operate an FTZ.  In fact, if an FTZ is implemented by a knowledgeable advisor, there should be little change to a company’s daily processes and procedures, including logistics.

With the right FTZ inventory and record-keeping system in place, the only changes a company will notice will be placed on the designed FTZ administrator. Today’s FTZ solution providers establish and manage the entire FTZ program and its inventory. Therefore, there is also no longer a need to physically separate foreign and domestic inventory between FTZ and non-FTZ areas within the facility.

Essentially, your supply chain will look and operate the same tomorrow in a foreign-trade zone as it did yesterday, with two notable exceptions. Firstly, the FTZ program can speed up your supply chain so that you receive foreign shipments quicker; and secondly, after implementing an FTZ, you will have access to all the benefits — which brings us to myth #2.

Myth #2: “Zones only benefit companies that have long inventory turns, or re-export. Our company turns inventory quickly and has limited exports, so the FTZ program will not benefit us.”

It is well-known that FTZs defer duty payment on merchandise brought into a zone and that duties are paid only when the goods enter into U.S. commerce. This holds a lot of value and can lead to additional cash flow, but that isn’t the only benefit to using an FTZ. Other benefits include:

Relief from inverted tariffs: There are many cases where a component or raw material is subject to a higher duty rate than the finished product. An FTZ allows the manufacturer to pay duty at the manufactured item rate, rather than the higher component rate. This helps U.S.-based producers serve the domestic market on a level playing field versus importers of the same finished product.

Duty exemption from re-exports: This one is pretty simple and a huge advantage for FTZ users: there are no duties on or quota charges on re-exports. Therefore, if you were to export goods to another country, they would generally be exempt from duties. Generally, with an FTZ, the only time you have to pay is when the item enters U.S. markets.

Savings with weekly entries: Under standard importing procedures, companies have to pay a Merchandise Processing Fee (MPF) for every Customs entry. As of October 1st, 2021, the MPF is capped at a maximum of $538.40 per entry. Under Weekly Entry procedures, zone users can group all imports within a week into a single customs entry and pay a single MPF. This can yield substantial cost savings and reduce processing time and labor. For instance, a company that has 2,500 Customs entries a year would pay $1,346,000, assuming each entry hit the cap. If the company utilized Weekly Entries, 2,400 entries would be reduced to only 52. This offers savings of $1,318,003 just on MPFs.

No duty on waste, scrap, and yield loss: Without a zone, an importer pays the Customs duty owed as material is brought into the U.S. In a zone, no duty is paid on irrecoverable yield loss, or merchandise that is scrapped or destroyed. This can lead to tremendous benefits with even a low scrap rate. There are also advantages for recoverable scrap that can be sold or recycled, as the most common duty rate for scrap sold into the U.S is zero.

The ability to fix damaged or non-conforming items: Savings can be further increased because when an item that is considered “damaged” or “non-conforming” is tested and repaired, no duties are owed. Items can even be altered, repackaged, or relabeled to meet U.S. requirements with no extra cost.

State and local benefits: Foreign and domestic goods held for export are exempt from state and local inventory taxes. In addition, FTZ status may also make a site eligible for state and local benefits that are unrelated to the FTZ Act.

Free zone-to-zone movement: More savings are to be had when transferring goods from one FTZ to another. In this scenario, regardless of the number of shipments you make, you are not subject to duty on the goods. A beneficial use of this would be the duty-free transport of raw materials and components, eliminating any fees until the finished product is officially shipped into the U.S. market.

These benefits can add up to millions of dollars in cost savings and offer a strong competitive advantage for U.S. manufacturers and distributors. What’s keeping companies from taking advantage of these benefits? Here we find myth #3.

Myth #3: “The process is too overwhelming.”

The process to implement an FTZ can seem overwhelming, but with the right advisor and software, implementing a zone comes down to four easy steps:

Step 1: Get an in-depth analysis. Contact a trusted provider of FTZ solutions and schedule a call to discuss your goals and challenges; request a complementary evaluation and cost/benefit analysis with a service provider (like this one). This will ensure you understand the net savings the FTZ program can offer your company.

Step 2: Choose an FTZ solution provider. Your selected partner should assist your facility to receive FTZ designation. If you are a manufacturer or producer, your partner will assist in securing FTZ production authority. In addition, they will help activate your facility with CBP.

Step 3: Implement the software. Probably the most important step in maximizing net FTZ benefits, is choosing the right FTZ inventory control solution. A comprehensive software solution will ensure you compliantly maximize FTZ savings while minimizing administration costs.

Step 4: Reap the benefits. It’s that simple.

Why now?

The supply chain and e-commerce underwent rapid transformation in the past several years due to COVID-19, Brexit, newly imposed tariffs, and other challenges. As consumer behavior evolves, the global e-commerce market is expected to grow by $1 trillion by 2025, too. These trends are causing global manufacturers to rethink the “just in time” lean manufacturing strategy into a “just in case” model. FTZs are the perfect solution, allowing them to store more inventory in the zone without incurring inventory costs and duty over time.

Debunking common FTZ myths helps unmask the many benefits they bring for manufacturers and distributors. As e-commerce grows and the world regains control of the supply chain, now is the time to get ahead and take advantage of them.

Corey Rhodes is the President of QAD Precision

masters
Archives, Executive Education, Global Trade Daily

MASTER OF YOUR DOMAIN: ADVANCE YOUR EDUCATION AND CAREER AT HOME OR ABROAD

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Whether you want to study at home or abroad, and/or in English or another language, there are numerous master-degree programs aimed at global trade professionals.

For our purposes, we have identified intriguing educational opportunities, first in the U.S. and then around the world.

DOMESTIC PROGRAMS

Lamar University

Beaumont, Texas

Master of Science in Port and Terminal Management

Lamar’s Department of Industrial Engineering, College of Engineering and College of Business have teamed with port and marine terminal leaders to offer port-management courses. The university claims its Master of Science degree program in Port and Terminal Management is unlike any other in the world. It’s aimed at working professionals in the public port and private marine terminal industry seeking to advance and enhance their careers by studying under field experts and scholars within the Southeast Texas Neches River ports and conducting cutting-edge waterfront community research.

Texas A&M University-Galveston

Galveston, Texas
Master of Maritime Business Administration & Logistics

The university, which was founded in 1876, claims its Master’s in Maritime Business Administration and Logistics “places students in a prime position for successful leadership roles within the field of maritime business administration.” Coursework came about through experienced experts having shared the latest advances within the industry. Students can pursue an online degree or an on-campus track that offers a license option, a five-year combined undergraduate-graduate program or a thesis option.

Maine Maritime Academy

Castine, Maine
Master of Science in Maritime Management

To be perfectly honest, we prefer this degree program’s other name: Master’s & Commander. Whatever you call it, the degree combines two programs: Small Vessel Operations and International Logistics Management. And students can also earn their U.S. Coast Guard Mate Less Than 200 Gross Tons, Near Coastal or Inland license as well as Maritime Port Manager certification from the International Association of Maritime and Port Executives. International logistics involves studying the process of planning and managing the movement of goods and products in a company’s supply chain from one point to another—and across at least one international border—until reaching the consumer. It must be noted that while a substantial portion of studies can be done online, some on-campus coursework is also required.

State University of New York Maritime College

Bronx, New York

Master of Science in International Transportation Management

The SUNY graduate program offers these five tracks: business of shipping; global transportation security; international logistics; marine insurance; or research in international logistics and shipping. But students can also select from a vast array of elective courses that cover liner and tramp shipping, port operations, international trade, economics, insurance, law and other topics so they may may design a track tailored to their specific needs and interests. Options include: a 34-credit, online, on-campus or hybrid degree program that involves four core courses, six electives and one culminating capstone course; a 40-credit, in-person only program that includes an Advanced Certificate in Supply Chain Management with the completion of four core courses, five supply-chain management courses, three electives and the culminating capstone; and a 96-credit, hybrid program that includes the 34-credit master’s degree as well as a U.S. Coast Guard third mate license. While the courses may be completed online, the license includes 62 credits at the undergraduate level that must be done on-campus. 

American Public University

Charles Town, West Virginia

Master of Arts in Transportation and Logistics

Conducted through APU’s Dr. Wallace E. Boston School of Business, the accredited online program teaches advanced logistics skills and technologies needed to manage enterprise-level manufacturing, shipping, retail, security, emergency management and disaster relief. Students are provided a higher-level examination of the principles, policies and trends in air, maritime and ground transportation; supply chain optimization; security; and sustainability. Portions of the program were developed in partnership with the U.S. Merchant Marine Academy Global Maritime and Transportation School. 

INTERNATIONAL PROGRAMS

Rotterdam University of Applied Sciences

Rotterdam, Netherlands, Rotterdam, Netherlands

Master of Science in Shipping & Transport

The one-year, full-time, English-language program will, according to the university, “give you an excellent opportunity to improve your skills in business administration in the maritime and logistics field.” Students will acquire in-depth knowledge of shipping management, economics and finance, logistics management and transport laws & policies. The program “guides students to make the link between understanding the fundamental maritime and transport concepts, tools and techniques and to apply them effectively and successfully in real-life situations,” boasts RU. “We practice a genuine ‘Rotterdam hands-on and make-things-happen’ approach, which is our distinctive strength.” 

Netherlands Maritime University

Rotterdam, Netherlands

Part-time Master of Science in Shipping and Transport

This 27-month, fully English program, which is aimed at shipping and transport management professionals, provides a multidisciplinary view on maritime, port, transport and logistics issues and complex management problems. Consisting of four core modules with various courses and a final module that is dedicated to thesis research, the program flips online learning on its head. Three-hour classes that are held two nights a week are expected to be completed on-campus. And every five or six weeks there is a full Friday of excursions or simulations. Your off hours can thus be devoted to your day job which, unless it’s real close to Rotterdam, will have to be performed online, from your student housing. When you’re not working, in class or off on an excursion, you are expected to discuss, analyze and share thoughts about your coursework with fellow students. Welcome to the brave new virtual world! 

University of Bamenda 

Bamenda, Cameroon

Professional Master in Transportation, Shipping Management & Logistics and Supply Chain Management

The two-year, English-language, on-campus program is under the umbrella of the university’s Higher Institute of Transport and Logistics, whose departments include General Studies, Customs, Land Transport, Maritime Transport and Transit and Logistics. The degree program covers Transportation and Logistics, Shipping Management, Logistics and Supply Chain Management and, besides courses, students must complete an internship and dissertation. 

Bureau Veritas Business School 

Alcobendas, Spain

Master in Shipping Business Administration & Logistics

This program is aimed at business people, naval engineers, civil engineers and other port and maritime professionals who want to conduct their studies online and in Spanish. (How’s that for niche programming?) “The primary objective of the course is to achieve a comprehensive knowledge of the management of maritime and port companies,” states Bureau Veritas , “as well as to develop the skills and capacities necessary to know how to analyze the maritime port, and logistics company from a managerial point of view.”

wine
Archives, Global Trade Daily, News

France’s Wine Exports Strongly Rebound After Last Year’s Drop

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

Wine exports from France are returning to pre-pandemic levels this year. Throughout January-September 2021, France’s supplies abroad reached $9.56B, increasing by +43% compared to the same period of 2020. Last year, the Covid-crisis hit the French wine trade, reducing exports by -9% y-o-y (based on USD values). Germany, the UK and the U.S. remain the major foreign buyers, accounting for 42% of total wine exports from France. The average wine export price dropped by -5.5% y-o-y to $7,026 per tonne in 2020. 

France’s Wine Exports by Country

From January to September 2021, France’s wine exports totaled $9.56B, exceeding by +43% the value of the same period in 2020. Last year, wine exports contracted to $10B (IndexBox estimates), dropping by -9% y-o-y. In physical terms, wine exports from France fell slightly to 1.4M tonnes, declining by -3.8% on the previous year’s figure.

Germany (232K tonnes), the UK (204K tonnes) and the U.S. (161K tonnes) were the main destinations of wine exports from France, with a combined 42% share of total exports. Belgium, the Netherlands, China, Canada, Japan, Sweden, Switzerland and Poland lagged somewhat behind, accounting for a further 40%. Switzerland (+63.7% y-o-y) recorded the highest increase in purchases as compared to other countries.

In value terms, the largest markets for wine exported from France were the U.S. ($1.6B), the UK ($1.3B) and Germany ($832M), with a combined 38% share of total exports. These countries were followed by Belgium, Japan, China, Switzerland, Canada, the Netherlands, Sweden and Poland, which accounted for a further 33%.

In 2020, the average wine export price amounted to $7,026 per tonne, dropping by -5.5% against the previous year. Prices varied noticeably by the country of destination; the country with the highest price was Switzerland ($10,788 per tonne), while the average price for exports to Poland ($3,149 per tonne) was amongst the lowest. Last year, the most notable growth rate 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 supply chains
Archives, Global Logistics, Global Trade Daily, International Trade

How Will Climate Change Affect Global Supply Chains?

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The world relies on global supply chains, but these networks are prone to disruption. Disease outbreaks, worker shortages, technological issues, and more can all cause substantial delays and expenses, but one factor is more threatening to supply chains than any other. Logistics professionals today must consider the impact of climate change.

Carbon dioxide in the atmosphere is increasing more than 250 times faster than in the last Ice Age, mostly due to human activity. That’s led to rising temperatures, glacial ice loss, sea-level rise, extreme weather events, and more. As climate change worsens, these factors will grow more severe.

Here’s how that could affect global supply chains.

Declining Supplies

One of the most disruptive effects climate change will have on supply chains is on the supply side. Rapidly warming oceans and increasingly extreme weather have already started to affect multiple industries, decreasing their output. As this trend continues, supply chains will have fewer and fewer reliable sources for some products.

For example, New York’s registered lobster landings decreased by 97.7% between 1996 and 2014, thanks to warmer oceans. Similarly, droughts have hampered agricultural production, with products like rice and coffee seeing dramatically smaller harvests. Supply chains will have an increasingly difficult time finding sufficient sources to meet demand as this problem grows.

Extreme weather events could reduce global supplies even faster. Wildfires in North American forests are a severe threat to the lumber industry, and they’ll become more frequent as climate change worsens. Hurricanes, flooding, and similar events will have a similar effect on oceanic and seaside industries.

Workplace Disruptions

Climate change also poses a threat to the workplaces that sustain global supply chains. The most straightforward way this would happen is through temperature-related worker exhaustion and illness. Every increase of 1° Celsius could reduce worker productivity by 1-3% for those outside or without air conditioning.

While those percentages seem small, they could add up to the equivalent of 80 million job losses by 2030. That would result in global losses of $2.4 trillion. Rising sea levels and extreme weather would also displace many workers, making it difficult for some warehouses and other facilities to maintain adequate staffing levels.

These facilities themselves could face physical damage as well. Inclement weather events like tornadoes, hurricanes, floods, and fires have all become more frequent and severe amid climate change. As those trends continue, the workplaces that supply chains rely on could see increased physical damage, disrupting workflows and lowering output.

Over time, some entire facilities could become unusable. If sea levels rise by just 1 meter, 80 airports could be underwater, limiting supply chains’ transportation options.

Transportation Risks

That leads to the next effect of climate change on global supply chains. Transporting parts and products across the world will become an increasingly challenging and even dangerous task. All of the previously mentioned severe weather events would delay transportation at best and endanger employees at worst.

Many of climate change’s effects on transportation aren’t dramatic but are still damaging. For example, climate change has increased the frequency and intensity of heavy rainfall. That alone can slow ground transportation, cause storms at sea, affect ocean transport, and delay flights, causing global disruptions.

Of course, the rising frequency of extreme weather events will also cause substantial transportation delays. Flooding will make ground transportation impossible in some areas until the waters subside and emergency responders clear the damage. Hurricanes and other storms will delay or reroute flights.

These delays will ripple throughout the supply chain and the industries that rely on it. Time-sensitive shipments could turn to waste in the face of slowed transport. Manufacturers will have to slow production in light of part shortages. Events like this already occur, and climate change makes them more common.

Rising Costs

Many of these factors will also contribute to rising operational costs throughout global supply chains. For example, as workplaces face rising worker shortages due to environmentally driven displacement, and suppliers decline, output will likely fall. As their output decreases and demand stays the same, they’ll have to raise costs to make up for it.

Supply shortages alone could have a tremendous impact on costs. The price of coffee futures nearly doubled in July 2021 as record droughts struck Brazil. Similar price hikes could affect the cost of items supply chain organizations need, like trucks, equipment parts, and fuel.

As extreme weather displaces employees, staffing costs may rise as well. Supply chains may have to offer higher wages to entice workers to remain in the area or move, raising their ongoing expenses. Some smaller companies may not be able to adapt in this way and face going out of business.

How Can Supply Chains Respond?

Climate change will undoubtedly have a tremendous negative impact on global supply chains. Many of these trends have already started to take shape. In the face of these threats, supply chain organizations must take steps to adapt to a changing world and lessen their environmental impact.

One of the most important changes is to decarbonize the supply chain. Switching to zero-emission vehicles would take a considerable amount of greenhouse gas emissions out of the equation, fighting climate change. With electric vehicles boasting ranges above 400 miles today, this option is becoming increasingly viable, too.

Switching to renewable energy in warehousing operations will further decarbonize supply chain operations. Logistics companies can encourage other businesses to follow suit by partnering with green manufacturing facilities, eliminating their third-party emissions as well.

Supply chains must also become more resilient to minimize disruptions from near-term environmental hazards. Distributed sourcing, asset and environmental monitoring, supplier due diligence, and creating formal disaster recovery plans can all help. Steps like this can cause a company to lose just 5% of its revenue amid a disaster, compared to 35% for an unprepared party.

None of these steps can happen in isolation. Supply chains are complex, interconnected networks, and climate change is similarly multifaceted. As logistics companies seek to improve their own operations, they must partner with other organizations for more cohesive, global action.

Climate Change Is a Serious Threat to Global Supply Chains

Climate change is the most significant threat facing global supply chains today. It’s already causing shortages and disruptions in some industries, and these challenges will only grow more frequent and severe if organizations don’t take action.

The threat of climate change is grave, but it’s not inevitable. If supply chain companies and their partners can embrace more sustainable operations, they can mitigate climate change and protect future operations. The world and the global economy will be better off for it.

solar
Archives, Global Trade Daily, News

Emerging Demand from Solar Battery Industry to Drive Global Cadmium Market

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

The global cadmium market is estimated at $122M for 2020. While the battery industry is currently the primary application for cadmium, the expanding demand from the cadmium telluride battery industry could provide a powerful boost to the market for the metal. Technological improvements and the introduction of new capacities for recycling solar cells will become an urgent need for the next decade and an attractive area for investment.

Key Trends and Insights

The global market for untreated cadmium, according to estimates by IndexBox, amounted to $122M in 2020. China (39%), India (22%) and Australia (4%) lead global cadmium consumption.

Most of the cadmium consumption in the world is used for producing batteries. The rapidly growing battery industry will remain the main driver of expansion for the cadmium market. The innovative nickel-cadmium battery is superior to its lead-acid counterpart in terms of service life. It is also lighter and can be recharged with the same systems commonly used for lead-acid car batteries. Intense competition from lithium-ion batteries remains the primary limiting factor to the rapid growth of the nickel-cadmium battery market.

The use of cadmium as a component of semiconductors for solar cells is likely to become a powerful stimulus for market development. In 2020, telluride-cadmium batteries quickly gained popularity and became the most frequently used among other kinds of solar cells. This modification of flexible batteries is characterized by low cost and high efficiency of 20-22% and a low temperature coefficient, which makes them suitable for mass use in countries with hot climates. In 2020, two new large-scale production facilities of telluride-cadmium batteries with a total capacity of 1.9 GW per year was launched in the U.S. in the state of Ohio.

The expansion of the cadmium-based solar cell industry could lead to increased investment in creating recycling and disposal facilities. If today 99% of cadmium is extracted from nickel-cadmium batteries for subsequent use, then the technology for processing solar batteries has not yet received sufficient development. According to a report jointly prepared by the International Renewable Energy Agency (IRENA) and the International Energy Agency Photovoltaic Power Systems Program (IEA-PVPS), global PV panel waste will reach 8M tons by 2030 and will increase to 78M tons by 2050.

Сadmium use in paint pigments, alloys, anti-corrosion coatings and PVC stabilizers stand out among other dynamically developing application areas. The latest development that could expand cadmium consumption is the production of ultra-precise clocks with a cadmium-based optical lattice, capable of operating at room temperature, in contrast to the currently widely used clocks that could expand cadmium consumption use cryogenic cooling.

Global Cadmium Production

In 2020, global cadmium production declined slightly to 34K tonnes, remaining constant against the previous year. The total output volume increased at an average annual rate of +1.8% from 2010 to 2020. In value terms, cadmium production fell to $92M in 2020, estimated at export prices.

The countries with the highest volumes of cadmium production in 2020 were China (10K tonnes), South Korea (5.2K tonnes) and Canada (2.4K tonnes), together accounting for 53% of global production. These countries were followed by Russia, Japan, the Netherlands, Australia, Kazakhstan, Mexico, France, Peru, Poland and the U.S., which together accounted for a further 37%.

Global Cadmium Exports

In 2020, after three years of decline, there was significant growth in shipments abroad of cadmium, when their volume increased by +9% to 16K tonnes. In value terms, cadmium exports fell to $35M (IndexBox estimates) in 2020.

In 2020, South Korea (4.1K tonnes), distantly followed by China (2.2K tonnes), Canada (1.6K tonnes), Japan (1.5K tonnes), France (0.9K tonnes) and Russia (0.7K tonnes) were the largest exporters of cadmium, together constituting 70% of total exports. Mexico (618 tonnes), Germany (526 tonnes), Poland (519 tonnes), the Netherlands (510 tonnes), Kazakhstan (477 tonnes), Uzbekistan (466 tonnes) and Peru (360 tonnes) held a relatively small share of total exports.

In value terms, South Korea ($9M), China ($5.9M) and Canada ($4.1M) appeared to be the countries with the highest levels of exports in 2020, with a combined 54% share of global exports.

China recorded the highest rates of growth with regard to the value of exports over the past decade. From 2010 to 2020, China’s exports rose from $1.2M to $5.9M.

In 2020, the average cadmium export price amounted to $2,219 per tonne, falling by -14.9% against the previous year. There were significant differences in the average prices amongst the major exporting countries. In 2020, the country with the highest price was China ($2,711 per tonne), while Kazakhstan ($1,605 per tonne) was amongst the lowest. From 2010 to 2020, the most notable rate of growth in terms of prices was attained by Uzbekistan, while the other global leaders experienced a decline in the export price figures.

Source: IndexBox Platform

WMS
Archives, Global Logistics, Global Trade Daily, Warehousing

Four Real-World Stories of How Generix WMS Creates Efficiency and Productivity

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Organizations focused on long-term growth strategies use digital transformation initiatives as a driving force for success. Technology investments have enabled organizations to improve processes and automate operations to find productivity and efficiency gains. A good WMS provides real-time inventory visibility for manufacturers and distributors and creates new efficiencies within inbound, warehousing, manufacturing, and outbound processes throughout a warehouse or plant.

SOLOCHAIN WMS is used by organizations in various industries (food, retail and consumer goods, manufacturing, and more) as a platform for growth and operational excellence. This blog post shares four success stories from customers who implemented SOLOCHAIN WMS to transform their operations and facilitate growth.

WMS gives granular control and recovers 35% in lost efficiencies

As a grower-owned network of family hops farms, Yakima Chief Hops required complete traceability, control, and visibility into their finished products from farm to kettle. The company was experiencing lost inventory and customer allocation challenges. The implementation of SOLOCHAIN WMS allowed Yakima Chief Hops to:

-Stabilize customer allocations with all inventory movements

-Track inventory and its movement in real-time

-Attain complete lot traceability and enable recall management for different finished products across the manufacturing process

-Increase accuracy with quick data entry using QR codes that stored multiple data points on the same barcode

-Improve shipping lead times by multiple days and 24-hour turnaround for eCommerce orders

-Automate processes and dramatically reduce paper usage with scan guns

-Realize a net gain of 83,861 cartons that were not required to be transferred before shipping out to customers

Through the WMS, Yakima Chief Hops achieved their visibility and safety goals and delivered the quality of service they strived for to their customers.

WMS increases productivity by 30% in less than a year

With 18,000 UPCs, 4,500 orders per day, and 22,500 pick lines in a single distribution center, Novexco, a national distributor of office supplies, needed to optimize operations across eight distribution centers to support its business model and allow them to compete with online retail giants. The implementation of SOLOCHAIN WMS provided Novexco the ability to:

-Successfully integrate SAP ERP for better inventory visibility and management at all stages of the process across Canada

-Manage all orders from retail stores, B2C, and B2B customers and track product and model numbers in each warehouse for quality assurance and returns

-Optimize and standardize processes that saved time, reduced human handling and human error, increased picking quality, and reduced non-essential warehouse travel

-Decrease backorders with better inventory visibility and forecast demand with access to real-time data

-Enabled faster delivery to customers and multi-site communication between distribution centers

Novexco can now guarantee next-business-day delivery in most regions in Canada and has seen a 30% increase in productivity in less than a year after implementation.

WMS doubles output capacity to support growth initiatives

Blue Streak Electronics, a supplier of remanufactured electronics and diagnostic solutions to vehicle manufacturers, decided to cut ties with their 3PL provider and build and open a new distribution center in less than four months which required the rapid deployment of a WMS. Exceptional inventory management and quality control were essential with a vast dealer network and a rapidly expanding eCommerce business. The implementation of SOLOCHAIN WMS enabled Blue Streak Electronics to:

-Gain real-time visibility and better order and inventory accuracy to support eCommerce growth

-Achieve substantial month-to-month operational performance gains

-Have real-time task management and transparency with SOLOCHAIN Back-Office project management system built into the WMS

-Meet the tight deadline with ease of configuration with Microsoft Dynamics Nav ERP and integration with ProShip for small parcel solutions

Blue Streak went live with the WMS in January 2020. Since then, the company has doubled its output capacity.

WMS enables 50% total sales growth and a 200% increase from eCommerce

Cameron’s Specialty Coffee, a coffee roasting, packaging, and distribution company, relied on paper-based processes in their warehouse operations. With the growing demand for eCommerce options and food traceability regulations, the company needed to change its inventory management operations. The implementation of the WMS transformed the business providing it the ability to:

-Remove paper-based processes and now manage every step in the process from roasting, flavoring, grinding, and packaging within the WMS+MES

-Achieve 99.5% inventory accuracy and increase order fulfillment to 99.3%

-Decrease cycle count downtime by eliminating the weekly shutdown period

-Report faster and close month-end sooner due to real-time data transmission into the ERP system

-Create mobility in the warehouse with handheld devices and run more production lines

-Address customer compliance requirements (Walmart, Target, Menards, etc.)

-Enter multi-stage production data into CRM to consider operation particularities to reduce waste and re-route production as needed.

The 50% growth meant that Cameron’s Specialty Coffee had to enlarge its warehouse space by more than 25% between 2018 and 2020. WMS and MES allowed the company to scale its operations in line with its growth without increasing headcount in its finance department.

As the only combined WMS/MES in the Gartner Magic Quadrant for WMS, SOLOCHAIN WMS delivers full-featured functionality that can address and integrate complex processes between the warehouse and the shop floor to scale operations and find new efficiencies and productivity improvements. Learn more by downloading the Gartner Report today.

About Generix Group

As omni-channel driven demands become the norm, with resulting customer satisfaction harder to achieve, supply chain professionals need to leverage advanced WMS technology to keep their operations nimble, efficient, and scaling – especially in these volatile times.

Given Generix Group’s completeness of vision and ability to execute, as recognized once again by the Gartner analyst community, their WMS is well-positioned to help companies needing a modern, flexible and agile solution that can easily adapt to their changing needs. We invite you to contact us to learn more.

This article originally appeared here. Republished with permission. 

desantis
Archives, Departments, Dispatches, Global Trade Daily, News

YES, VIRGINIA, THERE IS A DESANTIS CLAUSE

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Where some see a stocking full of coal, others see opportunity. Take Florida Governor Ron DeSantis—please! That might be the sentiments of officials at congested seaports outside of the Sunshine State. For instance, there are the ports of Los Angeles and Long Beach, California, where, at press time, Christmas presents remain stranded in around 100 vessels waiting for docks. While the intervention of President Joe Biden has led to plans for 24/7 loading and unloading of containers at impacted terminals in Southern California and elsewhere, challenges remained (again, at time of publication) to implement the strategy. Some have even suggested that open-all-day-and-night operations fail to address the real problems, like the lack of truck drivers and already packed-to-the-brim warehouses. 

And so, against that chaotic backdrop, DeSantis announced on Oct. 19 that Florida seaports have open capacity, can meet holiday demand and—hey, all you shippers muttering “Bah humbug”—come on down.

“Year after year we continue to invest in our seaports, in infrastructure and in workforce education to make sure our supply chain is resilient,” said Da Gov, who was flanked by officials from Port Everglades, Port Tampa Bay, Port Panama City and host Port of Jacksonville (JAXPORT). “I’m especially proud of Florida’s seaports. They are crown jewels in our state.”

Yes, and those jewels have been shined with $1 billion in state investments since 2019, according to his office. Controversial because of his ties to former President Donald Trump and the supposed “steal,” DeSantis may have distanced himself even more from certain other attendees of U.S. governor conventions by suggesting shippers and out-of-state businesses should choose Florida.

“While other U.S. ports are just now announcing around-the-clock operations, in Florida many of our ports are used to serving Florida farmers, families and businesses with 24-hour operations,” he said. “As the rest of the nation faces rampant inflation and businesses stare down unprecedented supply chain problems, our message is this: Florida is here, we have capacity, we have incentive packages to help businesses who want to move here and we are going to make sure Americans get their Christmas Gifts this season.”