New to Working from Home Full-Time? Here’s How to Stay Productive.

Archives, Global Trade Daily, Special Reports

New to Working from Home Full-Time? Here’s How to Stay Productive.

April 7th, 2020 Jim Guilkey, PhD Leave a comment

As the coronavirus pandemic threatens public health and the U.S. economy, more people are working from home on a regular basis. The move follows social distancing guidelines as an attempt to slow the outbreak, but keeping scattered workforces connected and productive can be challenging for managers and employees.

“This is new terrain for all involved, but employees and their companies can come out of this stronger by learning how to work together even better while they’re physically apart,” says Dr. Jim Guilkey (www.jimguilkey.com), author of M-Pact Learning: The New Competitive Advantage — What All Executives Need To Know.

“Optimally, working remotely can sharpen the skills you have and open new avenues of training that broaden skill-sets and increase results. But technology alone can’t smooth the transition to remote working, and both employees and business leaders must learn how to implement new structures and some new or tweaked processes.”

Dr. Guilkey offers tips for both managers and associates to make working from home work out well for their companies:

For employees:

Get started early. “When going to the office, you normally get up and out the door early,” Dr. Guilkey says. “At home, this is more difficult. Get up, take a shower, and get started.”

Create a dedicated work space. People who haven’t worked remotely may need to experiment with different approaches to find what setting works best for them. “Just because you’re not going to the office doesn’t mean you can’t have an office. Dedicate a specific room or surface in your home to work,” Dr. Guilkey says. “You should associate your home office with your actual office. This creates the correct mindset for being productive.”

Structure your day like you would in the office. Workers need to adopt exceptional conscientiousness when it comes to dividing their day into intensive work, communications, personal time and family life,” Dr. Guilkey says. “Have an agenda. Schedule meetings and project time and stay on schedule.”

For managers:

Set expectations.“It is vital that employees know what is expected of them,” Dr. Guilkey says. “When will you be available? How long will it take to get back to someone?”

Create a cadence of communication. Without daily face-to-face interaction, there’s more importance on communication. “A rhythm of communication is vital – daily check-ins, weekly one-on-ones, weekly team meetings, etc. ” Dr. Guilkey says.

Take a video-first approach. “Video, with all the current technology, is the most effective means of remote communication,” Dr. Guilkey says. “Invest in reliable tools.”

Maintain company social bonds. One drawback of working remotely is the potential breaking of social bonds that are necessary for productive teamwork. “Video conferencing or a quick Google chat with a colleague is vital to keep relationships strong,” Dr. Guilkey says. “Employees miss face-to-face banter and impromptu discussions in the physical office, so seeing faces on the screen daily is optimal for morale and a sense of normalcy.”

“Employees and employers can take this unprecedented time as a time to improve individually and as a company,” Dr. Guilkey says. “Working from home and working well together can go hand-in-hand when everyone is pulling even harder in the same direction.”

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Jim Guilkey, PhD (http://www.jimguilkey.com) is the author of M-Pact Learning: The New Competitive Advantage — What All Executives Need To Know. He is the president of S4 NetQuest and a nationally recognized expert in instructional design and learning strategy, with extensive experience in leading the design, development, and implementation of innovative, highly effective learning solutions.

Under his leadership, S4 NetQuest has transformed the learning programs for numerous corporations, including Johnson & Johnson, McDonald’s, Merck, Nationwide, Chase Bank, BMW, Cardinal Health, Domino’s, GE Medical, Kaiser Permanente, Yum! Brands, and others. Guilkey is a frequent speaker at national conferences and corporate training meetings. Before co-founding S4 NetQuest, Guilkey served as the assistant director of flight education at The Ohio State University. He received a BS in aviation and an MA and PhD in instructional design and technology from Ohio State.

Archives, Global Trade Daily, Special Reports, Warehousing

WFH? Here’s How to Manage your Ecommerce Order Deliveries Successfully.

April 6th, 2020 AuditShipment Team Leave a comment

The outbreak of the novel coronavirus has turned the whole world upside down. No one is sure about anything anymore. And that scares us. Luckily, the culture of remote working has been catching on. There are a gazillion tools that help you get rid of the snags of WFH. Regardless, managing your team as an ecommerce business owner remotely is no joke. Especially during a time when you cannot afford to lose business or customers.

Here’s a cheat sheet to stay on top of your orders in the age of social distancing.

1. Real-time shipment monitoring: The good news is that there is a greater push for shopping online. More and more customers are seeking comfort in the ease of ordering products online. In the US, there has been a surge in the ecommerce order volume for health and beauty products. The real challenge is staying on top of order fulfillment. You need a unified portal that tracks and monitors your packages in real-time. While your logistics team may be efficient, it is prudent to have visibility into shipment details. A real-time shipment tracking system that feeds you with the total shipments, total deliveries, potential delivery exceptions for every single day at all times. A real-time tracker is a great way to oversee your team’s order fulfillment efficiency with zero manual intervention.

2. Real-time Delivery updates: Your customers are anxious about their orders. More than ever before. If you see a sharp rise in the “ Where is my order” calls to customer support, rest assured, it is the new normal. Instead of overburdening your lean support team, send delivery updates to your customer proactively. Inform your customers of the order location. Auto-set triggers to initiate notification for any change in the shipment transit activity. Your customer stays in the know of the order shipment status at all times.

3. Custom exception notifications: Delivery exceptions are a downer. Lost, delays, damages can ruin your customer’s delivery experience. When left unattended, a bad delivery experience could quickly spiral out of control. To salvage this situation, act immediately. Whenever your real-time tracker notifies you of a potential disaster, come clean and inform your customer.

“Hey Mike. We regret to inform you that your order [ tracking# 887676756454] is experiencing a delay. But we assure you that we are working with our shipping partner to get the order to you at the earliest. Thanks”

Surprisingly, buyers are quite understanding and more cooperative once they are informed of any issue beforehand. In fact, your customers appreciate your transparency.

4. Carrier performance monitoring: When your business is fulfilling orders using more than one shipping carrier, how do you evaluate them. Even global carriers such as FedEx, UPS or DHL have their share of strengths and weaknesses. How do you play to the carrier’s strength so as to benefit the most? Easy. Measure their on-time delivery performances. Categorize their OTD across different zones, different days of the week and different package dimensions. Or simply plug into an Audit tool that can generate all this for you.

5. Cost-saving recommendations: Companies across the world are laying off employees. There is a huge drive for cost-cutting across organizations. Brick and Mortar stores are brainstorming ways to omnichannelise their user experience. The least you can do as an ecommerce business owner is to audit your shipping invoices. If you have not automated your auditing process yet, time to reconsider. An in-depth invoice audit not only results in instant savings on your shipping costs by disputing service and billing errors, but they also unearth strategies to optimize your shipping spend. The need of the hour is to shave away all the payment excesses and billing overcharges.

AuditShipment is an automated invoice audit service that identifies more than 50 carrier errors across vendors, disputes billing errors, validate tariff rate against SLA and offers benchmark discount reports. They also help get you refunds on late shipments from vendors like UPS, FedEx, etc. In addition to offering post-order fulfillment audits, our advanced technology also offers real-time shipment tracking and custom delivery notifications. With AuditShipment, stay on top of your orders at all times.

Archives, Global Trade Daily, Imports/Exports

TOILET PAPER: A UNIQUELY AMERICAN OBSESSION

April 6th, 2020 Anne Kim Leave a comment

The sight of barren grocery store shelves in the first few weeks of the coronavirus crisis sent thousands of shoppers scrambling for basic supplies – including, in the United States, toilet paper. As of April 1, bathroom tissue remained a sought-after commodity nationwide, out of stock at big-box retailers like Costco and Walmart, and even online at Amazon.

This sudden scarcity has made toilet paper as valuable as any other paper currency. Neighbors using the NextDoor app are bartering toilet paper for eggs and other household essentials, reports Bloomberg, and a recently viral Tik-Tok video showed a man tipping delivery drivers with rolls of toilet paper instead of cash. There’s even been a wave of toilet-paper-related crime. In North Carolina, for instance, sheriff’s deputies found a stolen tractor-trailer carrying 18,000 pounds of bathroom issue, while in Florida, police arrested a man for stealing 66 rolls from a Marriott hotel. A surging number of price-gouging investigations have also focused on the exploitation of desperate shoppers; some chain stores, for example, have reportedly demanded $10 a roll, along with $26 thermometers and $40 for a single pair of face masks.

Americans, however, might be unique in their fixation on toilet paper, despite reports of toilet paper panic-buying in other parts of the world. Americans are not only the world’s largest producers of toilet paper, they are also its most prolific users. In fact in many places globally, toilet paper – along with basic sanitation – is an unimaginable luxury. Toilet paper shortages, it turns out, are truly a first-world worry.

In global toilet paper usage, Americans are on a roll

According to Tissue World Magazine (yes, there is such a thing), North American consumers used an average of 25 kilograms of toilet paper per person in 2018 – or the equivalent of 144 Charmin Mega-Rolls – far outstripping the average global per capita usage of just 5 kilograms a year. By comparison, consumers in western Europe and Japan used only about 15 kilograms per person, while toilet paper usage is close to negligible in Africa, the Middle East and many parts of Asia.

The vast bulk of the toilet paper Americans use is domestically produced. According to the market forecasting firm IndexBox, just 7.5 percent of Americans’ bathroom tissue is imported. Even so, the United States is still the world’s largest importer of toilet tissue, accounting for 9.4 percent of global imports, according to MIT Media Lab’s Observatory of Economic Complexity (OEC). China, meanwhile is the world’s largest exporter, followed by Germany, Japan, Poland and Italy. China, does not, however, export much of its toilet paper to the United States; rather, 80 percent of Chinese exports end up in other parts of Asia, Africa and Europe. What toilet paper the United States does import comes primarily from Canada and Mexico.

Unlike with other categories of consumer goods, Americans don’t rely on foreign toilet paper because its domestic production is so strong. Among the nation’s top manufacturers are global consumer products giants such as Kimberly-Clark (maker of Cottonelle and Scott); Procter & Gamble (the maker of Charmin and creator of Mr. Whipple); and Koch Industries’ Georgia-Pacific (maker of Quilted Northern and Angel Soft). Clearwater Paper Corporation, which reportedly operates one of the world’s largest toilet paper factories in Lewiston, Idaho, is the nation’s biggest maker of store-brand toilet paper, such as for the grocery chain Kroger and for Costco. (According to the Idaho Statesman, each of the factory’s 1300 workers received 36 free rolls of toilet paper, as well as 24 rolls of paper towels, in what another local news outlet described as a “pandemic bonus.”)

Why the world isn’t flush with toilet paper

Global trade in toilet paper totaled $24.4 billion in 2018 – a relatively small figure compared to other consumer goods such as cosmetics ($44.5 billion), shoes ($99.6 billion) or refrigerators ($43.1 billion). International trade accounts for about 22 percent of global tissue consumption, according to one market analysis.

One reason that toilet paper-dependent countries like the United States rely on domestic production is that it’s the cheapest option. The United States, for instance, has plentiful supplies of both virgin and recycled wood pulp, which are the raw materials for toilet paper. And because of its bulk, toilet paper is also expensive to transport, which means that foreign toilet paper would be more costly by comparison – at least as a finished product. In fact, more than a third of the global trade in toilet paper is in so-called “parent rolls” of tissue – giant rolls that are converted by paper mills into smaller rolls and then packaged into the plastic-wrapped six-packs you would (normally) find on the shelf.

But there are other reasons why there is no vast global market for toilet paper, despite the central role it seemingly plays in Americans’ everyday lives. One is the popularity of bidets in many parts of the industrialized world, including in Europe and especially in Asia. As Tissue World Magazine points out, today’s high-tech bidets are stiff competition for low-tech toilet paper. In Japan, for instance, “high-tech toilets based on water and/or air jetting with several additional functions, including automatic lid opening, music, ozone deodorant systems and urinalysis, seem to have had some negative impact on toilet tissue consumption.” Among the most popular of these luxury bidets is the Washlet “personal cleaning system,” manufactured by Japan’s TOTO. In October 2019, the company celebrated its 50 millionth sale of the Washlet.

Bidets are potentially even catching on in the United States – perhaps in part to the current toilet paper panic as well-heeled consumers look for ways to do without toilet paper altogether. Wired, for example, recently reported a spike in Americans’ interest in bidets, including a deluge of calls to domestic bidet manufacturing startup Tushy. “This could be the tipping point that finally gets Americans to adopt the bidet,” CEO Jason Ojalvo told the magazine.

But perhaps the most significant reason the rest of the world doesn’t share Americans’ attachment to toilet paper is that this most basic of human rights – access to sanitation – does not exist in vast swathes of the globe. Not only is toilet paper unavailable, so are toilets.

A global crisis in sanitation

According to the United Nations, more than half the global population – 4.2 billion people – live without access to “safely managed” sanitation, which the UN defines as access to a “hygienic, private toilet that safely disposes of people’s waste.” As many as 673 million resort to “open defecation,” which contributes enormously to the transmission of disease. More than 2 billion people drink water contaminated by feces, the UN further reports.

One tragic result is that 432,000 people die each year from diarrheal diseases as a result of inadequate sanitation, according to the UN, including 297,000 children under the age of five. According to Rose George, author of The Big Necessity: The Unmentionable World of Human Waste and Why It Matters, diarrhea kills a child every 15 seconds. In contrast, she writes, “Modern sanitation has added 20 years to the average human life.”

Unfortunately, just 40 out of 152 countries that have pledged to provide universal sanitation by 2030 are on track to reach this goal, the result of funding shortfalls, increasing water pollution, poor governance and conflict. The current global crisis with COVID-19, certain to ravage the developing world, will set back this progress even more. In fact, the lack of sanitation – including access to clean water for hand hygiene – could accelerate the spread of disease in many parts of the world, adding to the pandemic’s already shocking human toll.

While it’s only a matter of time before U.S. grocery store shelves are stocked again with what Americans consider the most basic of staples, many more nations have far to go before they can experience the luxury of that deprivation.

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Anne Kim is a contributing editor to Washington Monthly and the author of Abandoned: America’s Lost Youth and the Crisis of Disconnection, forthcoming in 2020 from the New Press. Her writings on economic opportunity, social policy, and higher education have appeared in numerous national outlets, including the Washington Monthly, the Washington Post, Governing and Atlantic.com, among others. She is a veteran of the think tanks the Progressive Policy Institute and Third Way as well as of Capitol Hill, where she worked for Rep. Jim Cooper (D-TN). Anne has a law degree from Duke University and a bachelor’s in journalism from the University of Missouri-Columbia.

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

Archives, Global Trade Daily, International Trade

Global Artichoke Market to Reach 1.9M Tonnes by 2030

April 6th, 2020 IndexBox Leave a comment

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

The global artichoke market revenue amounted to $2.5B in 2018, rising by 2.4% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

Over the period under review, the global artichoke market reached its maximum level at $2.6B in 2012; however, from 2013 to 2018, consumption failed to regain its momentum.

Consumption By Country

The countries with the highest volumes of artichoke consumption in 2018 were Italy (394K tonnes), Egypt (319K tonnes) and Spain (196K tonnes), together comprising 54% of global consumption. Peru, Algeria, Argentina and China lagged somewhat behind, together accounting for a further 28%.

From 2009 to 2018, the most notable rate of growth in terms of artichoke consumption, amongst the main consuming countries, was attained by Algeria, while artichoke consumption for the other global leaders experienced more modest paces of growth.

In value terms, the largest artichoke markets worldwide were Italy ($608M), Peru ($421M) and Egypt ($341M), with a combined 54% share of the global market. Spain, Argentina, Algeria and China lagged somewhat behind, together accounting for a further 26%.

The countries with the highest levels of artichoke per capita consumption in 2018 were Italy (6.62 kg per person), Peru (4.75 kg per person) and Spain (4.20 kg per person).

Market Forecast to 2030

Driven by increasing demand for artichoke worldwide, the market is expected to continue an upward consumption trend over the next decade. Market performance is forecast to retain its current trend pattern, expanding with an anticipated CAGR of +1.0% for the period from 2018 to 2030, which is projected to bring the market volume to 1.9M tonnes by the end of 2030.

Global Production 2009-2018

Global artichoke production totaled 1.7M tonnes in 2018, remaining constant against the previous year. The total output volume increased at an average annual rate of +1.1% over the period from 2009 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being recorded over the period under review. The general positive trend in terms of artichoke output was largely conditioned by a modest increase of the harvested area and slight growth in yield figures.

Production By Country

The countries with the highest volumes of artichoke production in 2018 were Italy (390K tonnes), Egypt (324K tonnes) and Spain (208K tonnes), together comprising 55% of global production. Peru, Algeria, Argentina, China, France and the U.S. lagged somewhat behind, together accounting for a further 34%.

Harvested Area and Yield 2009-2018

In 2018, the global artichoke harvested area stood at 127K ha, approximately mirroring the previous year. The global average yield of artichokes totaled 13 tonne per ha, picking up by 2% against the previous year. The yield figure increased at an average annual rate of +1.3% over the period from 2009 to 2018.

Global Exports 2009-2018

In 2018, the amount of artichokes exported worldwide stood at 34K tonnes, waning by -11.5% against the previous year. In general, artichoke exports continue to indicate a temperate contraction. In value terms, artichoke exports amounted to $51M (IndexBox estimates) in 2018.

Exports by Country

Spain was the largest exporter of artichokes exported in the world, with the volume of exports amounting to 13K tonnes, which was near 36% of total exports in 2018. It was distantly followed by France (6.2K tonnes), Italy (4.8K tonnes), Egypt (4.6K tonnes), Mexico (2K tonnes) and the U.S. (2K tonnes), together creating a 57% share of total exports. The Netherlands (895 tonnes) followed a long way behind the leaders.

Spain experienced a relatively flat trend pattern with regard to volume of exports of artichokes exports. At the same time, Mexico (+17.0%) displayed positive paces of growth. Moreover, Mexico emerged as the fastest-growing exporter exported in the world, with a CAGR of +17.0% from 2009-2018. France experienced a relatively flat trend pattern. By contrast, Italy (-4.4%), the U.S. (-7.1%), Egypt (-7.4%) and the Netherlands (-13.0%) illustrated a downward trend over the same period. While the share of Mexico (+4.4 p.p.) and Spain (+2.2 p.p.) increased significantly in terms of the global exports from 2009-2018, the share of the U.S. (-5.3 p.p.), the Netherlands (-6.5 p.p.), Italy (-7 p.p.) and Egypt (-13.4 p.p.) displayed negative dynamics. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, Spain ($16M), France ($11M) and Italy ($7.9M) were the countries with the highest levels of exports in 2018, with a combined 69% share of global exports. Egypt, the U.S., the Netherlands and Mexico lagged somewhat behind, together accounting for a further 26%.

Export Prices by Country

The average artichoke export price stood at $1,473 per tonne in 2018, going down by -2.2% against the previous year. Over the period under review, the average export prices for artichokes reached their maximum at $1,681 per tonne in 2014; however, from 2015 to 2018, export prices stood at a somewhat lower figure.

There were significant differences in the average prices amongst the major exporting countries. In 2018, the country with the highest price was the Netherlands ($3,423 per tonne), while Mexico ($1,006 per tonne) was amongst the lowest.

From 2009 to 2018, the most notable rate of growth in terms of prices was attained by the Netherlands, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

Archives, Global Trade Daily, In The News

The Human Factor of the Novel Coronavirus (COVID-19) and Corruption

April 5th, 2020 Frank Orlowski Leave a comment

With the explosive spread of Coronavirus (COVID-19) hospitals, healthcare providers and all citizens are finding a shortage of goods and services and employees are under increased pressure to preserve and excel in their current roles.

Unfortunately, in this time of crisis corruption is thriving and some aim to profit from others’ misfortune and push companies to the brink to maintain profits.

Around the world, countries are reporting shortages in both medicines and medical supplies due to COVID-19. All of these factors put additional strain on already fragile procurement processes and increases the risk that suppliers, knowing that government and individuals have little choice but to pay, demand higher prices.

In these challenging times having open and transparent contracting processes in place helps mitigate these risks. With nowhere to hide, corrupt actors are unable to practice price gouging and must charge governments and individuals reasonable prices.

The stockpiling of supplies such as masks, gloves, and hand sanitizers are also contributing to shortages in medical supplies. In attempts to profit from public panic, some traders have been inflating prices for ordinary consumers.

After pressure from the Department of Justice, Amazon has implemented an effort to remove tens of thousands of deals from merchants that it said attempted to price-gouge customers. The world’s largest online retailer has faced scrutiny over the health-related offers on its platform, and earlier this week, Italy launched a probe into surging prices around the internet for sanitizing gels and hygiene masks. At the same time, Italy battles the biggest outbreak in Europe.

There are lessons to be learned in health-sector Corruption elsewhere from prior epidemics such as Ebola and SARS where procurement and contracting wrongdoing led to deadly consequences. In prior epidemics, Corruption compromised containment efforts, when corrupt actors used petty bribes and other favors to avoid quarantines, roadblocks, and safe body collection procedures. Even ventilators and other medical oxygen-related equipment have been the subject of bribes and kickbacks, sometimes leading to the tragic deaths of patients. These examples demonstrate the worst case of what can happen without resilient anti-corruption policies.

In the first federal action against fraud involving the coronavirus outbreak, the DOJ obtained a temporary restraining order against a website selling a bogus vaccine.

The DOJ said Sunday, March 21^st, that operators of the website “coronavirusmedicalkit.com” were engaging in an alleged wire fraud scheme to profit from the confusion and fear surrounding COVID-19.

The website claimed to offer customers access to the World Health Organization (WHO) vaccine kits in exchange for a shipping charge of $4.95. There are currently no legitimate COVID-19 vaccines, and the WHO is not distributing any such vaccine.

Besides compliance issues with third party business practices with goods and services, companies are experiencing enormous business pressure. Many companies have salespeople who cannot travel due to precautions taken, canceled flights, or, worse, quarantines. They cannot visit customers or partners, leading to slower sales. Global supply chains are disrupted, with shortages of parts and products. Company events and conferences are being canceled, resulting in fewer opportunities to build relationships with customers and market products. Customer demand for company products may be falling, and companies may be declining to make revenue projections during this time of uncertainty about the spread and effects of the coronavirus.

These disruptions can increase the pressure on salespeople to meet their sales targets. Salespeople may feel additional pressure now, when sales may be sluggish, and again when business gets back to normal, and they want to make up for the time lost. That pressure can lead some people to make the wrong choices—to engage in bribery or other misconduct—to generate business. Besides, the heightened emphasis on business priorities due to the losses from the coronavirus can push anti-corruption compliance further down on the priority list.

If/when the DOJ and SEC discover bribery or Corruption, they assuredly will not be accepting a “coronavirus defense” from companies. Compliance officers should be aware of situations like the coronavirus that could raise corruption risks and try to guard against them. Compliance officers should refer explicitly to the disruption caused by the coronavirus and emphasize that the company is committed to complying with anti-corruption laws. The communications must be to the employees who need to see them, such as salespeople who interact with customers, or “gatekeeper” functions like finance who review financial transactions.

Most importantly, senior executives and the board, if appropriate, need to make sure that the business pressures resulting from the coronavirus do not overshadow the company’s commitment to compliance and that values and ethics are maintained.

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For more information or questions, please contact Frank Orlowski at frank@ationadvisory.com or +1917-821-2147 and please visit our website at www.ationadvisory.com

Air Cargo, Archives, Global Trade Daily

GLOBAL CARGO IS LEAVING ON A JET PLANE

April 3rd, 2020 Leslie Griffin Leave a comment

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

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

Attention All Passengers:

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

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

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

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

Open Skies

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

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

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

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

In the Upright Position for Takeoff

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

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

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

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

Archives, Banking, Global Trade Daily

How to Create an Enduring Workflow for AR

April 3rd, 2020 Alyssa Callahan Leave a comment

Please note: Vocabulary in the payment automation world varies. While customers (i.e., clients, buyers) and their suppliers (i.e., vendors, beneficiaries, sellers) are both considered customers to payment automation companies like Nvoicepay, this article will use the terms “customer” and “supplier” to distinguish between them.

Imagine having to switch out old railroad tracks while a rusted steam engine thunders across. Adopting modern electronic payments runs about as smoothly for banks.

When you think about how old banks are in the U.S., it’s an understandable plight. They’ve been running on the same tracks since the first bank’s founding. Additional features, like wire payments and credit cards, were added over time as a complement to the old system. But the rise of nimbler financial technology (fintech) companies has lit a fire under them. Now they face the challenge of converting their processes to electronic means without disturbing their clients’ day-to-day business.

In a way, fintechs have it easy. Their very nature makes competing against banks a breeze, primarily because banks were built to last, and fintechs were built to adapt. They can easily shift gears to meet demand and immediate needs. Meanwhile, banks are frequently caught up in bureaucratic processes that make it virtually impossible to react quickly to problems.

Financial and fintech industries feel the contrast most often when tackling payment security—specifically when it comes to cards. Even though check payments incur 25% more fraud instances than card payments, according to the 2019 AFP Payment Fraud and Control Survey, many companies hesitate to make the switch to more electronic means.

Kim Lockett—the Director of Supplier Services at Nvoicepay, a FLEETCOR company—offers a glimpse into why companies are hesitating to shift gears: “Fraud is not a new issue to companies,” she states. “But what we’ve learned is that fear of change overrides the fear of potential fraud loss, even among companies who have already incurred those losses.”

With almost 30 years of experience in payments and financial services, Lockett possesses a holistic perspective on supplier expectations for seamlessly receiving payments, with payment fraud protection listed as one of the highest priorities. She’s heard all the horror stories, from a small business whose checks were stolen out of their mailbox and cashed, to a company whose employee tried to use business deposit information to clear her personal checks.

That’s not to say that errors and fraud don’t occur for card payments as well. But they occur significantly less and are much easier and faster to resolve than check, ACH, and wire payment issues.

What’s the Holdup?

In the last decade, fintech companies have improved the tracks on which many accounts receivable (AR) teams function. From providing lower processing costs for card payments to offering user-friendly portals for reliable payment retrieval, fintechs transform painful AR workflows into a functional process.

Meanwhile, banks have just begun to offer pseudo-solutions that appear to be tech-friendly but still run on old tracks. An excellent example of this is lockbox technology, where banks mitigate the processing of check payments and their data for their larger customers by taking on the work themselves. This sort of offering likely extended the life of check payments. Still, it didn’t eradicate the underlying problem: that even though work has been lifted directly from their customer’s shoulders, someone at the bank still has to process checks and submit data for manual reconciliation. The process is hardly automated, and the advent of payment processing technology has all but made the entire process impractical.

Embracing the Future

Of course, the best way to avoid check issues is to avoid checks. These days, electronic payment methods offer higher levels of security. But if electronic options like virtual card numbers are such a fantastic option, why are so many companies avoiding them?

Lockett states: “In general, I think companies are afraid of handling credit card numbers because they feel there is risk involved.”

It’s not the dangers of check payments, but misconceptions about electronic payments that cause companies to refrain from accepting them. Many AR teams rationalize that they’d rather respond to the inevitable check fraud cases they understand than walk unprepared into the relatively unknown territory of card fraud.

When checks are stolen and cashed, there’s very little that can be done. At the end of the day, someone will be out that money. Other electronic payment types like ACH and wire are significantly safer, but can still experience fraud, especially internal instances, such as when a company’s employee submits their personal bank account information to receive company payments. Whether these issues are reversible is dependent on each unique scenario.

Card payments, particularly the virtual card numbers provided by fintech companies, are typically protected by two-factor authentication. Whether this means that AR is supplied with a login to access secure details or a portion of a card number, the information is much more difficult for bad actors to access, securing the payment process and reducing the risk of fraud.

In the end, not every company will have the capacity to accept card payments, so leaving alternate options open like check and ACH truly boils down to how much individual payment providers value customer service.

Taking Suppliers Along for the Automation Journey

In many cases, banks have rushed to cater to customer’s needs, leaving suppliers in the dust when it comes to follow-through on electronic payments. Despite these efforts to change, most larger banks still follow their old tracks, and their customers and suppliers experience the same lack of customer service they always did.

With over 10 years of support development behind them, fintechs have expanded their offerings to suppliers, catering to their specific needs, whether they require something as simple as customizable file formats or a more significant request like payment aggregation. Fintechs that follow through with supplier support are truly delivering on their promise of offering an end-to-end solution. They are building tracks that support the advanced bullet trains that companies have become.

“Ten years ago, companies were reluctant to add virtual card payments to their list of accepted payment types,” says Lockett. “Education, experience, and word-of-mouth have established virtual card payments as a mainstream and relevant way to conduct business.”

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Alyssa Callahan is the Content Strategist at Nvoicepay, a FLEETCOR company. She has five years of experience in the B2B payment industry, specializing in cross-border B2B payment processes.

Archives, Global Trade Daily, Imports/Exports

Papaya Market in Latin America and the Caribbean – Guatemala Emerges as the Fastest Growing Exporter

April 3rd, 2020 IndexBox Leave a comment

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

The revenue of the papaya market in Latin America and the Caribbean amounted to $4.1B in 2018, going up by 5.3% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

Overall, papaya consumption continues to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2013 when the market value increased by 10% y-o-y. The level of papaya consumption peaked at $4.3B in 2014; however, from 2015 to 2018, consumption failed to regain its momentum.