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The Future of Ship Systems to be Smarter with Ship Bridge Simulators

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Archives, Global Logistics, Global Trade Daily, Ocean Carriers, Ocean Ports

The Future of Ship Systems to be Smarter with Ship Bridge Simulators

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The maritime industry is not new to the simulation technique and has, in reality, been using this technique in automation as well as numerous other applications. The rising implementation of advanced technologies & automation in the maritime sector has surged the need for ship bridge simulators. The Asia-pacific region has rising passenger traffic and massive import & export businesses; as a result, the region is likely to be in major need of marine systems equipped with ship bridge simulators.

The maritime sector is transiting toward autonomy by enabling assistance in navigation and decision support systems using simulations. At some point in time, if two autonomous vessels crafted by different producers come across each other, how will these vessels communicate? How intricate will the navigation be? Will the ships discuss intricate navigational maneuvers? Will the two autonomous systems be able to communicate in a proper way? Simulation or formulating mathematical models to impersonator trustworthy real-world effects can offer numerous solutions to these questions.

The marine industry is not new to the simulation technique and has, in reality, been using this technique in automation as well as numerous other applications. For example, simulation is used for coaching squads for new vessels before these vessels delivered for crane management and towing in seaports to check loopholes in ship systems and other purposes. For years, simulators are extensively used in training and certification mainly in the Maritime Education and Training (MET). They are used in numerous areas of the marine sector including cargo handling, crane operations, system control, offshore operation training on ships, bridge operations, and towing & anchor handling. Such a wide range of applications of simulators has propelled their demand in recent years. A report by Research Dive reveals that the global ship bridge simulator market growth is expected to skyrocket and the market is anticipated to garner significant revenue in the upcoming years.

Alexander Ozersky, the Deputy Director-Intellectual Systems at Wärtsilä Voyage Solutions, believes that simulation is a technique that permits to do mistakes without triggering any severe outcomes in the real world. A vessel can need nearly ten years to develop or redesign its system. However, by making use of simulation techniques one is able to do it more quickly, more safely, and at a reasonable price. This is why a simulation-based method was used to attest to the functionality of COLREGS (Convention on the International Regulations for Preventing Collisions at Sea) in Wärtsilä Navi-Harbour vessel traffic management system with ClassNK, a global leader in ship classification.

Panorama of the Ship Bridge Simulator Market:

There is a tremendous need for skilled ship operators or watch captains on a vessel for directing navigation, map plotting, weather monitoring, fire management, observation, search, and operation rehearsals. Also, there has been significant development in war systems and technologies; for example, electronic as well as network-centric wars use ship bridge simulators for testing systems. In addition, the rising implementation of advanced technologies & automation in the marine sector has surged the need for ship bridge simulators. Moreover, strict rules issued by maritime lawmakers for proficient coaching of electronic war workforces have propelled the demand for ship bridge simulators in recent years. All these factors portray that the global ship bridge simulator market is accelerating at a rapid pace and is expected to reach significant heights in the coming years.

In the past few years, ship makers have observed that the virtual reality simulation is considerably more proficient than conventional marine simulator training. In virtual simulation devices, a helmet is used that shows a video and is assimilated with sound effects and simulation sensor systems. With these sensors, the virtual simulation helmet can detect activities of the user’s extremities. The incorporation of such advanced technologies is opening doors to lavishing opportunities for market growth.

The Asia-pacific region has rising passenger traffic and massive import & export businesses. As a result, the region is likely to be in major need of marine systems and hence, be a major revenue contributor for the market growth. On the other hand, the North American region is projected to stand at a second position in terms of growth in the ship bridge simulator market. This is majorly owing to the stringent regulations issued by the governments in the region for upholding standard security. The LAMEA region is foreseen to witness continuous growth due to the evolving marine trades in these regions.

The Lookout of the Market during the COVID-19 Pandemic

The COVID-19 pandemic has struck the maritime industry with various unprecedented challenges that hampered its supply chain and compelled quicker implementation of digital technologies in numerous areas of maritime operations, including the area of MET. As the virus was capable to multiply at a rapid pace with person-to-person interaction, several processes that need the physical presence of working personnel have been either postponed or limited for averting human mobility, as a protection measures against the COVID-19 virus. The termination of physical training programs, lockdown, and travel restrictions have triggered several difficulties for seafarers to obtain or uphold their certificates of proficiency. As the MET industry is also experiencing various challenges in ensuring the endurance of the MET activities, and in coping and adapting to the restrictions imposed during the COVID-19 pandemic, the ship bridge simulator market growth is expected to decline to a certain extent until the pandemic relaxes.

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Aishwarya Korgaonkar holds a bachelor’s degree in Information Technology from the esteemed Mumbai University. Being creative and artistic, she leaped into the field of digital marketing and content writing. Her love for words makes her write creative and spellbinding content that adds colors to the world.

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Archives, Global Trade Daily, News

Cotton Prices to Rise Due to the Textile Industry’s Demand Booming Over the Supply

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

After stagnating during the pandemic, the textile industry has begun to strongly recover and the demand for cotton has risen. It is expected that consumption in 2021 will grow faster than the supply. This will lead to a reduction in global cotton stocks and higher prices. The issues of sustainability and ethical background become increasingly important in the transformation of cotton supply chains.

Key Trends and Insights

With increased demand from the textile industry, global cotton stocks fell to a three-year low. Although cotton production is projected to increase by 5% in 2021, the demand will outpace supply which will raise prices further. In the medium term, the main driver of growth in the cotton market will be the demand for textiles from the growing global population.

According to a recent report by the World Bank, the average price for raw cotton in the first quarter of 2021 was $1.64 per kg, which is 3% higher than the average price in 2020. In the fourth quarter of 2021, prices are projected to rise to $1.72 per kg.

Despite the positive dynamics, cotton production in 2021 will not return to the record levels of 2019. High cotton yields are projected in the U.S. (+523K tonnes), Brazil (+436K tonnes) and Australia (+239K tonnes), Pakistan (+174K tonnes) due to favorable weather conditions and the increasing harvested area. China, on the other hand, will lower cotton production and give way to India as the main producer with a 24% share of the world total.

The highest growth rates for the industry and demand for cotton are expected in Pakistan, India, Bangladesh, Vietnam, Turkey and China. The first four countries mentioned are becoming center points for the global textile industry due to cheap labor. In China and Turkey, the populations’ rising incomes will make production less competitive. It is assumed that domestic production will not be able to fully meet the demand of the industry in China, and the country will have to increase its imports.

Strong competition from other natural and functionally similar materials such as hemp or flax as well as synthetic textile materials will hold back market growth. Hemp is more convenient to grow than cotton as it consumes 5 times less water, while cotton production is considered “environmentally harmful” because it uses large amounts of insecticides. In some countries, forced labor is supposed to be used on cotton plantations. The environmental issues and labor rights violations lead to increased consumer attention to the ethical side of the cotton market. This forces major apparel companies to shift supply chains toward cotton suppliers with a proven and traceable environmental and ethical background.

The issue of creating a cost-effective recycling technology for cotton to be sustainable is now becoming increasingly important. The production of cotton fibers involves a huge amount of water consumption, and cotton recycling will significantly reduce these volumes and maintain the stability of natural water resources.

Cotton Exports by Country

In 2020, shipments abroad of cotton lint decreased by -9.2% to 8.1M tonnes for the first time since 2016, thus ending a three-year rising trend. In value terms, cotton lint exports shrank sharply to $13.1B (IndexBox estimates) in 2020.

In 2020, the U.S. (3.8M tonnes) was the key exporter of cotton lint, comprising 47% of total exports. It was distantly followed by India (965K tonnes) and Brazil (865K tonnes), together achieving a 23% share of total exports. The following exporters – Benin (292K tonnes), Greece (289K tonnes), Cote d’Ivoire (230K tonnes), Burkina Faso (217K tonnes), Nigeria (212K tonnes), Australia (170K tonnes) and Uzbekistan (137K tonnes) – together made up 19% of total exports.

In value terms, the U.S. ($6B) remains the largest cotton lint supplier worldwide, comprising 46% of global exports. The second position in the ranking was occupied by India ($1.4B), with a 11% share of global exports. It was followed by Brazil, with a 11% share.

In 2020, the average cotton lint export price amounted to $1,616 per tonne, shrinking by -6.9% against the previous year. Average prices varied somewhat amongst the major exporting countries. In 2020, major exporting countries recorded the following prices: in Nigeria ($2,222 per tonne) and Uzbekistan ($1,823 per tonne), while India ($1,501 per tonne) and Greece ($1,558 per tonne) were amongst the lowest.

Cotton Imports by Country

In 2020, after three years of growth, there was significant decline in supplies from abroad of cotton lint, when their volume decreased by -16.8% to 7.1M tonnes. In value terms, cotton lint imports contracted sharply to $12.2B in 2020.

In 2020, China (1.9M tonnes), distantly followed by Viet Nam (945K tonnes), Pakistan (819K tonnes), Bangladesh (726K tonnes), Turkey (655K tonnes) and Indonesia (627K tonnes) represented the largest importers of cotton lint, together generating 79% of total imports. The following importers – Malaysia (247K tonnes), India (174K tonnes) and South Korea (115K tonnes) – together made up 7.5% of total imports.

In value terms, China ($3.6B) constitutes the largest market for imported cotton lint worldwide, comprising 29% of global imports. The second position in the ranking was occupied by Viet Nam ($1.4B), with a 12% share of global imports. It was followed by Pakistan, with a 11% share.

The average cotton lint import price stood at $1,706 per tonne in 2020, shrinking by -5.3% against the previous year. Average prices varied somewhat amongst the major importing countries. In 2020, major importing countries recorded the following prices: in India ($1,979 per tonne) and China ($1,929 per tonne), while Viet Nam ($1,486 per tonne) and Turkey ($1,519 per tonne) were amongst the lowest.

Source: IndexBox AI Platform

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Archives, Global Trade Daily, International Trade, News

US-EU Suspend Large Civil Aircraft Tariffs and Take Aim at China in Framework Addressing Non-Market Practices

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The United States and European Union (“EU”) announced a “cooperative framework” to address and potentially resolve their long-running dispute over large civil aircraft subsidies, also commonly known as the Boeing–Airbus or Large Civil Aircraft disputes. Originally initiated in 2004 when the U.S. filed a case at the World Trade Organization (“WTO”) against the EU alleging illegal subsidies to Airbus SE, the Large Civil Aircraft dispute is the longest running dispute at the WTO. As part of the new understanding, the U.S. and EU will suspend their respective WTO-authorized tariff countermeasures, which affected a total value of $11.5 billion in trade. The U.S.-EU’s announcement is a major step towards potentially resolving the 17-year transatlantic dispute over aircraft subsidies.

As previously reported, the initial duties occurred in October 2019 when the U.S. imposed 15 percent tariffs under Section 301 of the Trade Expansion Act of 1962 on imports of civil aircraft and aircraft parts (under the HTSUS codes 8802.40.0013, 8802.40.0015, 8802.40.0017, 8802.40.0019, and 8802.40.0021). A rate of 25 percent was adopted by the U.S. for all other listed EU-origin imports, covering agricultural products, spirits, and luxury goods among other products. The EU retaliated in November 2020 with tariffs on approximately $4 billion worth of U.S. imports, with matching rates of 15 percent for civil aircraft and aircraft parts and 25 percent for all other U.S.-origin imports, covering agricultural products and industrial and finished goods.

As part of the Understanding on a cooperative framework for Large Civil Aircraft, the US and EU expressed their intention to:

-Establish a Working Group on Large Civil Aircraft led by each side’s respective Minister responsible for Trade, which will meet every 6 months or on request,

-Provide financing to large civil aircraft producers only on market terms,

-Provide R&D funding through an open and transparent process and make the results of fully government-funded R&D widely available, to the extent permitted by law,

-Not to provide R&D funding as well as specific support (such as specific tax breaks) to their own producers that would harm the other side,

-Collaborate on addressing non-market practices of third parties that may harm their respective large civil aircraft industries,

-Continue to suspend application of their countermeasures, for a period of 5 years, avoiding billions of euros in duties for importers on both sides of the Atlantic.

According to statements made by U.S. Trade Representative (“USTR”) Katherine Tai, the tariffs would remain suspended as long as the terms of the agreement are upheld and while they work on addressing issues including outstanding subsidies already paid.

The U.S.-EU cooperative framework also includes an “Annex on Cooperation on Non-Market Economies” to “more effectively address the challenge posed by non-market economies” in the civil aircraft sector. These cooperative steps include coordinating and exploring information-sharing regarding cybersecurity and other concerns, screening of inward and outward investments, and “joint analysis of non-market practices,” especially China’s, in the large civil aircraft sector. USTR Tai described the agreement as “a model we can build on for other challenges” related to “the threat from China’s non-market practices.”

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Emily Lyons is an attorney in Husch Blackwell LLP’s Washington, D.C. office.

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Archives, Global Trade Daily, News

Air Defense System Market: Top Trends Boosting the Industry Expansion through 2026

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The global air defense system market size is poised to expand at a substantial CAGR during the forecast period. With several countries across the world seeking to track, detect, intercept, and neutralize every kind of airborne threat from combat jets, missiles, and UAVs effectively, numerous industry leaders have been providing cutting-edge defense solutions including radars, jammers, warning systems, and decoys to protect against a wide range of threats.

The following seven factors have been aiding the expansion of the  global air defense system industry outlook:

C-RAM air defense systems in the Asia Pacific

The C-RAM or Counter Rocket, Artillery, and Mortar systems is poised for considerable demand through the next few years, stimulated by the efficiency of these systems in intercepting missiles at the same time, raising timely alarms for protecting the operating bases.

By 2026, the overall Asia Pacific air defense system market is expected to accrue over $13 billion, thanks to the high demand for these systems. The high firing range of over 2,000 meters offered by new solutions such as Centurion C-RAM has been promoting the adoption of these systems.

Rising concerns regarding aerial attacks in China

The Chinese industry for air defense systems has been prospering on account of the rising number of aerial attacks from enemy nations. The market share from the segment is projected to grow at a 4% CAGR through 2026.

In view of the growing number of intercontinental missiles, China has been boosting its combat preparedness. For instance, recently, in February 2021, China successfully conducted a mid-course antiballistic missile mechanical test, which is known to be the fifth land-based ABM technical test that is publicly announced by China. This demonstrates the maturity and higher reliability of the Chinese defense ministry.

Growing adoption of weapon systems in Asian countries

The countries in Asia have been embracing weapon systems such as missile launching systems and turret systems due to the development of the latest automated weapon systems including drones and missiles. The Asia Pacific air defense system market forecast has been receiving considerable impetus from the unavoidable necessity to protect one’s nation.

The segment is expected to surge at a 3% CAGR through the forecast years, pushed by the integration of advanced technologies such as accurate target location, GPS tracking, and real-time information updates offered by industry players in their products such as UAVs and decoys.

Land-based air defense systems to see higher adoption in Europe

The land-based air defense systems are set to command a considerable market share through the forecast times, pushed by the real-time updates offered by these systems during battles. Growing at a high CAGR, the segment was estimated to hold a staggering 70% of the overall European air defense system market share.

Russia and Germany particularly have been aggressively focusing on the development of advanced air defense systems through robust R&D activities. The growing deployment of land-based missiles across military and homeland security has been accelerating the expansion of the industry share in the region.

U.K. and EU likely to collaborate as threats from China and Russia loom large

In the wake of the economic problems faced by the United Kingdom and the European Union, experts opine that the two powers are likely to unite against enemy aggression and mounting military pressure.

A formal agreement is anticipated between the two as the threats posed by Moscow and Beijing have been escalating. This collaboration might prove to be favorable for the advancement of the European air defense system market, as the unit is expected to spawn newer designs with enhanced interoperability and integration.

Requirement of latest anti-aircraft systems in North America

The deployment of anti-aircraft systems in the North American region has been rising constantly. The segment accounted for more than 86% of the total North American air defense system industry share during the past and is slated to register a significant growth rate through 2026.

These systems play a vital role along the primary line of defense, ensuring that aerial attacks are prevented. Apart from boosting their in-house production capacities, several industry players have been importing these systems from other nations, while others have been engaging in international collaborations to enhance their product offerings.

Development of next-generation systems by the U.S.

According to recent reports, the U.S. is likely to deploy mobile short-range Avenger air defense systems for protecting its troops in Iraq and Syria. The Avenger air defense system is designed to provide optimal protection to infantry against drones, helicopters, low-flying aircraft, and cruise missiles.

Earlier last year in January 2020, the U.S. troops in Iraq possessed no air defense systems. They were subjected to a retaliatory attack by Iran in the form of a drone strike. The development of new air defense systems has been a key focus of the military since then, fueling the North American air defense system market size. Similarly, in collaboration with Israel, the U.S. has been developing an advanced interceptor, Arrow weapon system, which is expected to be one of the first to intercept ballistic missiles.

Boeing, L3Harris, Hanwha Corporation, Rafael, General Dynamics, Lockheed Martin, Kongsberg Gruppen, General Dynamics, Northrop Grumman, BAE Systems, and Rheinmetall AG are some leading air defense system manufacturers in the international landscape.

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Rapid Urbanization and Westernization of Diets in Asia Propel the Cheese Market

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

Although cheese consumption in Asia remains lower than in Europe and the U.S., the westernization of food habits of the Asian population leads to an increase in demand, especially from young more exposed to fast-foods. The boosting online sales channel and an early shift from the lockdown in China offset the negative impact of the Covid crisis on HoReCa and retail. 

Key Trends and Insights

Cheese consumption in Asia remains low compared with Western countries because the Asian population is more disposed to suffer from lactose intolerance, and there is a lack of established cheese production and consumption culture.

The process of rapid urbanization in Asia, combined with the rise in household incomes and the increasing popularity of the Western lifestyle amongst the middle- and high-income population, promote the cheese market. The increasing consumption of pizza and other European-style fast-foods appears as a fundamental consumer trend, particularly amongst young people. Thus, the cheese market in Asia is concentrated in large cities, where the average-high income segment of the population mainly lives. For the above reasons, and due to the growing population, IndexBox expects the Asian cheese market to expand with an anticipated CAGR of +1.4% from 2020 to 2030, which is projected to bring the market volume to 3.4M tonnes.

Imports buoy over 40% of cheese consumption in Asia. Although an increase in the demand is forecast in the medium term, the possibility of a sharp surge in output remains limited due to the lack of pasture land to expand milk production. High costs for producing cheese in Asia could become another restraining factor. China’s cheese costs may exceed those in the UK or U.S. near twofold.

The spread of Covid-19, to a certain extent, disrupted trade chains in Asia but did not impact dramatically on the major consumption trends. In 2020, cheese imports in China, Iraq, and Korea rose significantly despite the pandemic restrictions.

China constitutes the largest producer and consumer of cheese in Asia. Still, the per capita consumption remains significantly lower than in the other Asian major cheese-consuming countries and tangibly lower than in the U.S. or Europe. This indicates a weak market saturation and a robust potential for market growth. The rising demand in China, driven by rapid urbanization and a middle-class expansion, is to continue driving the Asian cheese market.

Cheese imports by the Republic of Korea have been increasing steadily, buoyed by a sharp increase in consumer demand for packaged meals containing cheese and rising demand from the food processing industry. Moreover, tariff reductions and increased tariff-rate quotas have lowered cheese prices, boosting imports.

Developed countries, such as Japan and Israel, are set to indicate only weak market growth. Per capita cheese consumption is already high, the population is stagnating, and there are currently no prerequisites for any sharp changes in consumer preferences. In Japan, the free trade agreement with the EU entered into force in 2019, which improves the availability of European cheese against that from Australia and New Zealand. In 2020, imports into Japan slightly decreased owing to reduced consumer purchasing power, which falls disproportionately on high-priced milk products such as cheese.

In the Middle East, moderate growth of the cheese market is forecast, driven by similar trends of the gradual rise in household incomes and the penetration of a western lifestyle. A certain potential remains relevant for the markets of Syria and Iraq, should both countries recover from the instability of recent years.

Albeit not affecting the market fundamentals dramatically, the pandemic led to significant shifts in sales channels. During the HoReCa sector was hampered by the lockdown, online sales emerged rapidly. Cheese is widely used in Western-style fast-foods that could keep the take-away services in operation, which mitigated the negative effect of the pandemic. China shifted from the pandemic earlier than other countries, which also contributes to the market recovery.

Cheese Consumption by Country

In 2020, the Asian cheese market increased by 0.6% to $12.1B, rising for the fourth year in a row after two years of decline. The market value increased at an average annual rate of +1.5% over 2012 to 2020. The most prominent growth rate was recorded in 2017 when the market value increased by 9% year-to-year. Over the period under review, the market reached the maximum level in 2020 and is likely to see gradual growth in years to come.

The countries with the highest volumes of cheese consumption in 2020 were China (506K tonnes), Japan (377K tonnes) and Iran (316K tonnes), with a combined 41% share of total consumption. These countries were followed by Turkey, Saudi Arabia, Israel, Myanmar, South Korea, Syrian Arab Republic, Azerbaijan, Kazakhstan and the United Arab Emirates, which accounted for a further 41%.

From 2012 to 2020, the most notable growth rate in terms of cheese consumption, amongst the main consuming countries, was attained by South Korea, while cheese consumption for the other leaders experienced more modest paces of growth.

In value terms, the largest cheese markets in Asia were China ($2.1B), Japan ($1.7B) and Israel ($1.1B), with a combined 41% share of the total market. These countries were followed by Iran, Saudi Arabia, Turkey, Myanmar, South Korea, Syrian Arab Republic, Azerbaijan, the United Arab Emirates and Kazakhstan, which accounted for a further 42%.

In 2020, the highest levels of cheese per capita consumption were registered in Israel (19 kg per person), followed by Azerbaijan (7 kg per person), Saudi Arabia (6.19 kg per person) and the Syrian Arab Republic (4.74 kg per person), while the world average per capita consumption of cheese was estimated at 0.62 kg per person.

Cheese Imports by Country

In 2020, Japan (292K tonnes), distantly followed by Saudi Arabia (181K tonnes), South Korea (148K tonnes) and China (129K tonnes), represented the largest importers of cheese, together committing 61% of total imports. The United Arab Emirates (52K tonnes), the Philippines (41K tonnes), Malaysia (35K tonnes), Kazakhstan (34K tonnes), Taiwan (Chinese) (34K tonnes), Kuwait (29K tonnes), Indonesia (27K tonnes), Jordan (25K tonnes) and Yemen (20K tonnes) followed a long way behind the leaders.

From 2012 to 2020, the most notable growth rate in terms of purchases amongst the key importing countries was attained by China, while imports for the other leaders experienced more modest paces of growth.

In value terms, Japan ($1.3B), Saudi Arabia ($683M) and South Korea ($629M) appeared to be the countries with the highest levels of imports in 2020, with a combined 49% share of total imports. China, the United Arab Emirates, Malaysia, Taiwan (Chinese), Kuwait, the Philippines, Indonesia, Kazakhstan, Jordan and Yemen lagged somewhat behind, accounting for 34% (IndexBox estimates).

Source: IndexBox AI Platform

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Archives, Global Trade Daily, Imports/Exports

American Pork Exports See Record Growth Due to Surging Demand in Asia-Pacific

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

Over the previous year, the U.S. has seen pork exports hit record highs, largely due to unprecedented demand from China and the Philippines, where livestock numbers have fallen dramatically after the outbreaks of African swine fever. The U.S. is forecast to achieve a 5% growth in pork production in 2021 and exports are projected to remain high, driven by robust both domestic and foreign demand.

Key Trends and Insights

In 2020, American pork exports reached a record 2.4M tonnes (IndexBox estimates), an increase of 26% against the previous year. The key foreign markets for American for pork include China (733K tonnes), Japan (350K tonnes) and Mexico (571K tonnes), together accounting for 70% of exports.

Pork supplies from the U.S. to China increased more than twofold in 2020. Following an outbreak of African swine fever in 2018, China’s pig livestock population decreased by 27%. It forced the country to offset these losses with ongoing meat supplies from abroad. The Philippines and Vietnam were also similarly affected by the spread of swine fever, and American pork exports to both countries surged in 2020. The reduction in import tariffs for American products under the current trading agreement between the U.S. and Japan have triggered a 10% increase in pork exports to this country.

Exports to Mexico, however, declined in 2020 due to a fall in the peso exchange rate and a slump in the country’s consumer purchasing power. Export supplies to Columbia emerged on a downward trend following the introduction of Covid restrictions.

A decline in American pork exports to China is projected in the near term, as China’s livestock numbers start to recover. Exports to Mexico, South Korea, the Philippines and Vietnam are forecast to increase, thereby securing promising prospects for American pork suppliers in 2021. According to the USDA forecasts, pork production is set to increase by 5% this year, driven by strong domestic demand and the above-mentioned export opportunities.

Pork Production in the U.S.

In 2020, pork production increased by 1.9% to 13M tonnes, rising for the sixth year in a row. The total output volume increased at an average annual rate of +2.4% over the period from 2012 to 2020; the trend pattern remained consistent, with somewhat noticeable fluctuations observed in certain years. Over the period under review, production hit record highs in 2020 and is likely to see gradual growth in the near future.

In value terms, pork production reached $32.7B in 2020. The pace of growth was the most pronounced in 2014, increasing 9.2% against the previous year. As a result, production reached the peak level of $34.2B. From 2015 to 2020, production growth remained at a somewhat lower figure.

Pork Exports by Country

In value terms, pork exports surged to $6B (IndexBox estimates) in 2020. The total export value increased at an average annual rate of +2.7% from 2012 to 2020; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. As a result, exports reached the peak and are likely to continue growing in the immediate term.

China (733K tonnes), Mexico (571K tonnes) and Japan (350K tonnes) were the main destinations of pork exports from the U.S., with a combined 70% share of total exports. These countries were followed by South Korea, Canada, Australia, Colombia, Chile and the Dominican Republic, which accounted for a further 21%.

In value terms, the largest markets for pork exported from the U.S. were China ($1.6B), Japan ($1.5B) and Mexico ($922M), together comprising 68% of total exports.

China saw the highest growth rate of the value of exports in terms of the main countries of destination over the period under review, while shipments for the other leaders experienced more modest paces of growth.

The average pork export price stood at $2,545 per tonne in 2020, equating to the previous year. Overall, the export price continues to indicate a slight downturn. There were significant differences in the average prices for the major foreign markets. In 2020, the country with the highest price was Japan ($4,291 per tonne), while the average price for exports to Mexico ($1,614 per tonne) was amongst the lowest.

Source: IndexBox AI Platform

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Archives, Global Logistics, Global Trade Daily, International Trade

What is Supply Chain Management – The Basics and the Process

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Supply chain management (SCM) is the system that manages supplies and processes through all of the steps of a project, product, or business deliverable. Getting over these various stages efficiently demands control—that’s where supply chain management comes in.

Every phase of business is directed to make the most of the resources associated and be as productive as possible. People are managed as well as trained and supplies also require management. Whether those supplies are goods or services, they must be valued for and carried through from start to finish with prudent control.

Supply chain management is used to represent several different ways that are used to combine the flow of materials, finances, and information efficiently. These items are normally outsourced from any number of places. These sources include suppliers, manufacturers, wholesalers, sellers, and retailers. Items can pass through many hands until they reach the customer.

SCM regulates and integrates this back and forth, inside and outside the organization. Its purpose is to improve service for the customer but not at the account of the organization, which is trying at the same time to reduce its supply chain costs.

There are many stops along this way, but the first thing that comes in is the design and plan, which when administered must be monitored as would any other project to map its progress and control any concerns that arise before they become obstacles that impact the cost of the operation.

The Process of Supply Chain Management

To get the most out of supply chain management entails looking at the big picture in the context of an organization’s management. No longer is managing an individual company satisfactorily. The mixture of all activities involved in the supply chain is essential: that means integration between various departments, such as purchasing and marketing.

To evaluate the performance till now, excel spreadsheets are being used. Despite all the advancements they are still error-prone. Excel solutions are designed to manage the supply chain of business including inventory flows in which operations, scheduling and monitoring can be done to reduce the ongoing process cost but all this needs to be done manually as supply chain spreadsheets have limited accuracy and user error is the most common issue. A cloud-based supply chain provides better performance, accuracy and data analytics.

Supply chain management also needs alliance and collaboration between buyers and suppliers, joint product development, common systems, and shared information. While ideally there should be a constant back and forth of information, it is more practical to think of this flow as a process. That process involves the following:

Customer-Relations Management: There must be a regulated approach to communicating with the company’s current and potential customers to know what they want and expect.

Customer-Service Management: This varies from customer-relationship management in that it concentrates on the interactions between the customer and the company rather than a more strategic management process. It helps expedite a commonly satisfying goal for customer and the company, as well as evoking customer feedback and managing communications between the two parties, so there are empathic feelings from both parties.

Demand-Management Style: A methodology to calculate, plan for and maintain the demand for products and services. This can speak both macro-levels, as in global economics, but also micro-levels inside the company.

Order Fulfillment: The method that includes everything from point-of-sale interest to delivery of that product or service to the client. It is the way a company acknowledges customer orders.

Manufacturing-Flow Management: Manufacturing is a method, and supplies feed that process based on important data surrounding how it has been performed and what was needed historically. But that method needs flexibility as numbers change. Therefore, one must control all activities related to planning, scheduling, and maintaining the manufacturing process.

Supplier-Relationship Management: Supplies likely are evolving from a third party, and those communications must be strategically planned for. This enhances the value and decreases risk.

Product Development and Commercialization: To decrease time to market, customers and suppliers are linked to the product vision and the product advancement process. Reducing the product life cycle keeps the firm competitive. This process involves coordinating with customer relationship management to identify customer needs, choosing materials and suppliers with the acquisition, and receiving a production technology in the course of manufacturing to integrate the most reliable supply chain flow for the market and product. When prosperous, this has a positive impression on cost, quality, delivery, and market share.

Returns Management: There will eternally be returns and the better they’re executed, the more fruitful and rival the SCM process. Management of this perspective of the SCM means fast and secure returns management, self-regulation, and choosing how to process returned materials. Make sure data is visible to capture early in the method. Then check the flow of products, including receipts and settlement, noting if there are any quality issues.

Process Management: The most important method of managing the business that plays a vital role in any organization is process management. Process management highlights the role of intra- and inter-organizational practices and clearly demonstrates the joint role and impact. It involves strategic planning that leads to successful workflow in a business.

To commence the way into a transformative future, the need to connect technical and business knowledge with collaboration and intelligence skills is what few organizations like Owl Solutions, 3PL Links, FMi Logistics do. The capability to control department leaders that partner with the supply chain is code, as well as the skills to communicate intelligently with leaders over the organization, is necessary because supply chain actions often reach across business units. And a strong business vision is a must-have—you’ll be more productive working with your equivalents in finance, sales, and marketing if you can speak their dialect. The efficient supply chain leader of tomorrow is tech-savvy and happy working beside the world of “machines.”

beef
Archives, Global Trade Daily, News

U.S. Beef Market Will Face Rising Prices Due to Expected Livestock Curbs

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

Despite prices remaining consistent in the first half of 2021, an increase is expected in the immediate term. The projected 2% fall in the American cattle population by 2022 threatens to increase beef prices by near 5%. Investment into the alternative protein sector has dramatically increased; and the emerging food inflation mitigates income growth from counter-covid support measures, which may hamper the beef market growth. 

Key Trends and Insights

In the first half of 2021, prices remained unchanged against the end of 2020. Previously, beef prices in the U.S. surged on average by 10-14% in May 2020 when the first outbreak of the pandemic was recorded. They remained high until June and then fell slightly in August, stabilizing at around $4 to $9.3 per pound, depending on the type of beef, through to the end of the year.

Beef production is set to fall by 2% in 2021, owing to the decline in the cattle population. The dry weather conditions have led to the depletion of grazing land and the increased cost of animal feed; farmers are now being forced to quicken cattle slaughter and curb the number of livestock. Against a sustained demand for beef, these factors may cause meat prices to rise by 5% on average in 2022.

Rising soybean prices could also accelerate the costs of cattle meals. Expectations of further price increases accelerate not only the price for beef but the overall food inflation in the U.S. Should the inflation not be curbed by monetary authorities, it is to offset the positive impact of the government support measures on income growth and hamper consumer spending, which will spill over to the beef market.

A significant volume of beef and lamb imports are sent to the U.S. from Canada, Australia and Mexico. Canada is also experiencing a fall in the number of head of cattle, while the Australian Department of Agriculture, Water and the Environment is forecasting an increase in the cattle population over 2021-2022, which is to propel exports and mitigate the beef price growth. These factors should consolidate Australia’s position on the American beef market.

The alternative protein market is currently seeing robust expansion. Investment into this sector in 2020 trebled, reaching $3.1В. This may also constrain the growth of the American beef market, particularly taking into account rising prices.

The growing population and the established culture of beef consumption remain key drivers behind beef consumption in the U.S. Despite the above-mentioned risks, the American beef market is forecast to expand gradually to 13.5M tonnes by 2030 (IndexBox estimates).

U.S. Beef Production

In 2020, beef production increased by 0.3% to 12M tonnes, rising for the fourth consecutive year after four years of decline. In general, production showed a relatively flat trend pattern. The most prominent growth rate was recorded in 2017 when the production volume increased by 3.8% y-o-y. Over the period under review, production reached the peak volume in 2020 and is expected to retain growth in the immediate term.

In value terms, beef production dropped slightly to $86.1B in 2020. The total output value increased at an average annual rate of +2.4% from 2012 to 2020; the trend pattern remained relatively stable, with noticeable fluctuations observed throughout the analyzed period.

U.S. Beef Imports

In 2020, supplies from abroad of cattle meat increased by 9.6% to 1.1M tonnes, rising for the third year in a row after two years of decline. In value terms, beef imports rose sharply to $6.4B in 2020.

Canada (282K tonnes), Mexico (239K tonnes) and Australia (219K tonnes) were the main suppliers of beef imports to the U.S., together comprising 69% of total imports. New Zealand, Nicaragua, Uruguay and Argentina lagged somewhat behind, accounting for a further 27%.

In value terms, the largest beef suppliers to the U.S. were Canada ($1.7B), Australia ($1.5B) and Mexico ($1.4B), with a combined 71% share of total imports. These countries were followed by New Zealand, Nicaragua, Uruguay and Argentina, which together accounted for a further 25%.

In 2020, the average beef import price amounted to $5,996 per tonne, increasing by 4.9% against the previous year. Over the last eight years, it increased at an average annual rate of +2.6%. The growth pace was the most rapid in 2014, an increase of 15% year-to-year.

Average prices varied somewhat amongst the major supplying countries. In 2020, the highest prices were recorded for prices from Australia ($6,912 per tonne) and Uruguay ($6,480 per tonne), while the price for Nicaragua ($4,952 per tonne) and Argentina ($5,340 per tonne) was amongst the lowest.

Source: IndexBox AI Platform

labor compliance
Archives, Global Logistics, Global Trade Daily, International Trade

Understanding Your Role in Forced Labor Compliance

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It was recently reported that U.S. Customs and Border Protection (CBP) at the ports of LA and Long Beach has “well over 100 shipments on hold pending determination of admissibility“ due to suspicion of forced labor. Despite being enforced since 1930, compliance with forced labor laws and regulations are still an ongoing problem.

A newly introduced congressional bill, U.S. Innovation and Competition Act (S. 1260), which focuses on several trade initiatives including 301 tariff exclusions, would specifically establish a Forced Labor Division within the Office of Trade of CBP. The Forced Labor Division would prioritize investigations and work closely with the Bureau of International Labor Affairs. With the establishment of a Forced Labor Division, there is more enforcement on this issue coming as resources are increased.

Importers must understand their responsibilities related to vetting suppliers for forced labor or face potential penalties for non-compliance.

What is forced labor and how are products flagged?

Forced labor is when a product is mined, produced, or manufactured, in a municipality that has unlawful labor practices such as slave labor or child labor.

The International Labor Organization (ILO) published a booklet identifying common signs that could indicate forced labor. They include:

-Abuse of vulnerability

-Deception

-Restriction of movement

-Isolation

-Physical and sexual violence

-Intimidation and threats

-Retention of identity documents

-Withholding of wages

-Debt bondage

-Abusive working and living conditions

-Excessive overtime

If any part of your imported goods were subject to forced labor, wholly or in part, anywhere throughout your supply chain, your goods could be detained or seized with a Withhold Release Order (WRO) or as a Finding.

Understanding Withhold Release Orders (WRO’s)

A WRO is issued against a foreign manufacturer by CBP when they have a reasonable suspicion of forced labor being used to produce the imported product including tracing back to the materials used.

If the product imported has a WRO issued against the manufacturer for that product, the importer can re-export the freight or must prove the cargo in question was not made with forced labor.

To contest the WRO, sufficient evidence is needed to prove the admissibility of the product from the manufacturer for a specific shipment. For admissibility, an importer has three months to demonstrate that detained merchandise was not produced with forced labor. The importer must also demonstrate that the supplier is not included on the WRO. Supporting documentation should be submitted in a clear and concise manner so that CBP can quickly and easily review it. Keep in mind that while this process is taking place the container is accruing storage, demurrage and detention charges.

Understanding Findings

Additionally, a foreign manufacturer can have a Finding action issued against them. This means CBP has determined there is probable cause that forced labor was used in the manufacturing of the specific imported good.

Upon arrival into the United States, the cargo is subject to seizure by CBP and treated as an importation prohibited by 19 U.S.C 1307. There is not an opportunity to export the goods under a Finding.

The freight will be seized, and the importer could face a potential penalty for importing goods made with forced labor into the United States. A potential mitigating factor is if the importer can show the due diligence they used to vet the supplier for potential forced labor actions which should include the use of a third-party auditor.

Your role as an importer in maintaining forced labor compliance

Remaining compliant and avoiding detained or seized cargo, penalties, and fees starts by understanding your role and responsibilities when it comes to forced labor laws.

Below are steps you can take to be prepared:

1. Review the Sweat & Toil app.

This free download to your phone can help you know about potential commodities that are suspected of forced labor or goods produced with child labor. It also includes useful information on forced labor efforts and initiatives.

2. Audit your supply chain suppliers and manufacturers.

The most effective way to do this is to develop a questionnaire based on the ILO forced labor indicators and outline the process for how your product is produced. If you catch any red flags through this process, discuss with your supplier how they will rectify the situation. You can also utilize the U.S. Department of Labor’s Comply Chain website.

3. Work on a modification process with suppliers that have a WRO or Finding against them.

The supplier will have to prove to CBP that the forced labor indicator no longer exists within the supply chain. Learn more about what this entails using CBP’s WRO Modification/Revocation Processes Overview document. 

4. Construct a process for implementing and monitoring for compliance.

Establishing an ongoing routine can help maintain and monitor compliance.

5. Find and review other helpful resources.

Visit the CBP website for many useful resources and information on forced labor, including:

–Forced Labor | U.S. Customs and Border Protection (cbp.gov)

-Responsible Business Practices on Forced Labor

-The Active WRO’s and Findings List

-Fact Sheet: Helpful Hints for Submitting Proof of Admissibility

-Reasonable Care Informed Compliance Publication

Final thoughts on forced labor compliance

Now is the time to ensure compliance, make changes as needed, and mitigate your potential risk and penalties from forced labor.

You’re not on your own. The steps to compliance can seem complicated and the consequences for non-compliance can be overwhelming, but our Trusted Advisor® trade experts are here to help.

At C.H. Robinson we have proven policies and procedures around forced labor compliance. We can help you develop the in-house procedures you need to become compliant and stay compliant.

As international trade topics continue to shift, stay up to date with weekly updates on our Trade & Tariff Insights page

outsource
Archives, Global Trade Daily, Special Reports

How Outsourcing Strategies Are Changing Over Time

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Outsourcing is not just about collecting cheap remote talent. Even if it’s truly cost-effective, most successful companies realize that outsourcing brings innovation and is well-suited not only for operational tasks but also for developing core products. To date, 64% of companies outsource software development in a traditional way and many of them are going to embrace disruptive technologies and hone their strategies towards outsourcing.

Brief History of Outsourcing: From the Beginning Till Today

When did outsourcing begin?

The history of outsourcing dates back to 1989. The first company to outsource was Eastman Kodak with their revolutionary decision (for those times) to outsource the IT systems. The company’s leadership were the pioneers to realize they don’t necessarily need to own all the processes and data. Kodak was soon followed by other companies which resulted in business process outsourcing flourish till today.

Two main reasons urging companies to outsource were: cutting costs and freeing up resources to focus on the core functions. The companies tended to engage third-party vendors for certain activities and in such a way focus on core services. Another great reason for outsourcing was just the fact that companies couldn’t afford to hire full-time employees inhouse. No matter what the reason was, over time business leaders realized that outsourcing — if organized well — can be really efficient and may directly improve customer satisfaction.

How outsourcing evolved over time?

Outsourcing in today’s understanding started as a pure business process outsourcing with booming BPO service companies providing accounting and finance, human resources, call center and other functions. The concept of BPO soon broadened and took a variety of forms: end-to-end solutions, staff augmentation and others.

Today, in 2021, outsourcing is the strategic decision to establish long-lasting partnerships with outsourcing suppliers to enhance the service or product and win the competition. And the main reason for outsourcing in 2021 is not cutting costs, but increasing innovation and winning the market.

Fats facts about outsourcing:

64% of all companies outsource their entire development process

66% of medium/large businesses outsource software development

37% of businesses with up to 50 employees outsource software development

43% of U.S. companies are outsourcing jobs from the IT industry

78% of businesses feel positive about their outsourcing relationships

Outsourcing Strategies – Which One is Popular in 2021

Outsourcing as a business strategy has been embraced by the majority of businesses globally. In the USA only, over 300,000 of jobs are outsourced annually.

The latest offshore data reveals that IT is the most widely outsourced sector, with application and software maintenance (54%) and data centers (40%) being the leading outsourced functions.

For 46% outsourcing provides access to a skilled workforce that is not available on the local market. The US and European companies choose IT outsourcing in Ukraine due to the country’s vast tech talent pool of highly skilled tech professionals.

Severe skill-shortage affected 54% of companies. 82% of workers expect digital transformation to transform their work in the next three years, but only 3% of executives plan to invest more in skills development programs. That said, building offshore strategic partnerships remains the most effective outsourcing strategy for businesses in 2021.

Disruptive outsourcing is the future

Technology adoption is expected to accelerate in the coming years. In addition to big data, cloud computing and e-commerce, new technologies are emerging, such as robotics, encryption and artificial intelligence. Therefore, the outlook for the future of outsourcing is also changing. Company leaders show interest not only in employee productivity, but in the automation of at least some parts of their operations as well. And this is where disruptive outsourcing will take the lead.

Disruptive outsourcing, bringing technological advancements to the industry, is a step forward in the outsourcing world competing with its traditional forms. Robotic process automation and cloud computing will gradually replace the human workforce and those outsourcing destinations that will grasp this trend first, will win in the long run.

93% of companies surveyed by Deloitte report that they have already started or are considering the usage of cloud computing. The companies also expect their outsourcing providers to embrace the same attitude towards disruptive technologies and implement them in the near future. Disruptive outsourcing solutions are expected in all functional areas: IT, HR, Accounting, etc. as they allow much more flexibility and scalability in comparison to conventional outsourcing strategies.

IT Outsourcing Success Stories

Google, WhatsApp, Alibaba, Skype, BaseCamp, AppSumo are the companies that have outsourced successfully to name a few.

All of them are a harmonious blend of in-house and remote workers. Depending on the company’s size, needs, budget and priorities, they find their own balance between outsourced and in-house work.

For example, WhatsApp is a world’s known successful outsourcing case study that couldn’t afford growing their inhouse team of 35 people. They decided to outsource software development to Russia. Remote Russian developers helped the company to scale and save the costs and in a while, as WhatsApp entered the global market, Russian developers were relocated to the USA.

Slack, an online collaboration tool, is another successful IT outsourcing case study. Founded by four smart guys, the company trusted their product’s beta testing to an outsourced team. As a result, after getting profound feedback on copy and design, Slack managed to win over competitors and become a $2.8 billion worth company.

Skype also chose outsourcing. While being at a rise, Skype had their apps’ back-end fully developed by outsourced Estonian developers. Who could imagine that the future worldwide tool for businesses would rely on these Estonian guys?

The key takeaway from these outsourcing success stories is that outsourcing gives access to world-wide highly skilled experts who can help businesses scale fast, keep costs down and develop high-end products and services.

Wrap-up

Outsourcing has become an integral part of the US and European businesses and a valuable asset in a value chain, no matter if this is a whole development center or a few bright experts in the augmented team.

And while traditional outsourcing has a proven track record of success globally, the advantages of disruptive outsourcing will be gradually adopted within the next five years, provided that outsourcing vendors will meet the security requirements of working with cloud computing, robotics and other disruptive technologies.

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Igor Tkach is a General Manager at Daxx, a software development and technology consulting service company, part of Grid Dynamics Group. Igor’s areas of expertise span leading tech businesses, building remote teams, scaling business processes, client success, management consulting, business analysis, Agile project management and product management.

Daxx is the Netherlands-based company with 20 years on the market. We help businesses solve the problem of local talent shortage. Build a cross-functional team with custom hired software engineers and benefit from our value-added services.