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THE EAGLERAIL HAS LANDED: CEO MIKE WYCHOCKI PUSHES A “NO BRAINER” WHEN IT COMES TO MOVING SHIPPING CONTAINERS AT CONGESTED PORTS

eaglerail

THE EAGLERAIL HAS LANDED: CEO MIKE WYCHOCKI PUSHES A “NO BRAINER” WHEN IT COMES TO MOVING SHIPPING CONTAINERS AT CONGESTED PORTS

It’s amazing where new logistics solutions come from. They are usually born by veteran shippers with visions on how to improve an existing operation. Or it can be a customer or customers seeking help in conquering a specific challenge that eventually resonates throughout the industry.

Then there is the inception of Chicago-based EagleRail Container Logistics’ signature solution. It can be traced to a pitch meeting for a new monorail in Brazil that was attended by a port authority official who was there more as a cheerleader than a participant.

Watching a Chicago marketing man’s PowerPoint presentation about his company’s passenger monorail system to local leaders in São Paulo eight years ago, the port representative, Jose Newton Gama, marveled at how the magnetic levitation (Maglev) trains holding people would be suspended under overhead tracks.

Then the Brazilian known by friends as Newton raised his hand.

“Excuse me?” he asked the Americano. “Could your system be adapted to hold shipping containers?”

That had never occurred to project designers, whose monorail cars for passengers are much lighter than would be required for cargo containers hauled by ships, trucks and freight trains. But the marketing man shared Gama’s question with his colleagues in the Windy City, and that planted the seed that eventually bore EagleRail Container Logistics.

Chief Executive Officer Mike Wychocki was an early investor who eventually bought out that marketing man, but the first EagleRail system is named “Newton” after the Brazilian who now sits on the company’s board of advisors. “He’s a great guy,” says Wychocki during a recent phone interview. “Newton is our biggest cheerleader.”

Wychocki’s no slouch with the pom-poms himself, having pitched EagleRail at 40 ports in 20 countries over the past five years. His company, which has offices around the world, is developing its first prototype in China, and studies are underway at six ports as EagleRail sets about raising $20 million in capital. (The window for small investments had just closed when Wychocki was interviewed. His company has since shifted its focus to large investors.)

The way ports have operated for decades left no need for a system like EagleRail’s. Big ships dock, cranes remove containers stacked on their decks and each box is then moved onto the back of a flatbed truck that either hauls it to a distribution center or an intermodal yard. Until recent years, no one really thought of disrupting the process because, as Wychocki puts it, “you could always find cheaper truck drivers.”

However, truck driver shortages, port-area air pollution and congestion caused by the time it takes to load and unload ever-larger ships have prompted serious soul searching when it comes to short hauls. Expanding the size of ports is often not an option due to the cities that have grown to surround them. This has led to the creation of large container parks for trucks and/or freight trains within a few miles of ports, but getting boxes to those remains problematic—at a time when megaships are only making matters more difficult.

“There is an old saying that ports are where old trucks go to die,” says Wychocki, who ticks off as problems associated with that mode of moving containers pollution, maintenance and fuel costs, as well as the issues of public safety because some drivers essentially live inside of their vehicles, which can attract prostitution and leave behind litter and human waste. Adding even more of these dirty trucks would necessitate more road building, which only adds to environmental concerns.

With ground space at ports a constantly shrinking commodity, tunneling underground may be viewed as an option. But Wychocki points out that many ports have emerged on unstable ground like backfill, and water, power and sewer lines are usually below what’s under the streets beyond port gates. The idea of a hyperloop has been bandied about, but it would require emptying shipping containers at the port, loading the contents into smaller boxes, sending those through to another yard, and then repacking the shipping containers on the other side. “That defeats the whole point” of relieving port congestion, the EagleRail CEO says.

Ah, but every port has unused air space, which is what Wychocki’s company seeks to exploit. “If an Amazon warehouse can lift and shuttle packages robotically,” he says, “why not do the same with a 60,000-pound package? Go to a warehouse. See how Amazon works with packages. They use overhead light rails. It’s an obvious idea, so obvious. It’s a no brainer when you think about it.”

Yes, Amazon also uses drones, but can you imagine the size it would have to be to carry a 60,000-pound shipping container? Wychocki sees a suspended container track as an extension of the cranes on every loading dock worldwide, which is why EagleRail systems are also all-electric and composed of the same crane hardware to avoid snags when it comes to replacing parts.

However, Wychocki is quick to note EagleRail is not a total solution when it comes to port congestion. He calculates that among the short-haul trucks leaving a port, 50 percent are going to 500 different locations, many of which are different states away, while the other half is bound for just a couple nearby destinations. EagleRail is geared toward the latter, and the problem with getting containers to them “is not technological; it’s who controls the five kilometers between the port and the intermodal facility,” he says.

Lifting equipment at ports “is exactly the same in all 200 countries,” he adds. “The part that is not the same is the back end. What is the port’s configuration? Where do the roads come in? What we do is form a consortium and build it with each local player, such as the port authority, the road authority, the national rail company, the power company. Getting everyone involved helps get procurement and environmental rights of way.”

He concedes that getting everyone on board “varies by location,” but when it comes to environmental concerns “everyone’s kind of wanting to do this because it means fewer trucks, and the power companies would prefer the use of electricity (over burning diesel). It sounds harder than it is to get everyone rowing in the same direction.”

Wychocki points to another bonus with EagleRail: It allows for total control of one’s intermodal yard because containers come and go on the same circular route—all day long. “We take this on as a disruptive business model,” he says, noting that short-haul trucks generally involve the use of data-chain-breaking clipboards and mobile phones. EagleRail systems track containers on them in real-time, rolling in all customs paperwork and billing invoices automatically.

“It’s amazing, I just came from the Port of Rotterdam, where I was a keynote,” Wychocki says. “Even the biggest ports in the world like Antwerp were saying, ‘This is great. Why isn’t anyone else doing it?’”

Actually, EagleRail accidentally created direct competition. Wychocki explains that during the initial design phase, his company worked with a foreign monorail concern whose cars used what were essentially aircraft tires rolling inside a closed channel. Concerns about maintaining a system that would invariably involve frequently changing tires—and thus slowing down operations—caused EagleRail to reject that design in favor of another third-party’s calling for steel-on-steel wheels. The designer with tires is pressing on with its own system and without EagleRail.

“I’m glad we didn’t go that route,” says Wychocki, who nonetheless expects more serious competition once EagleRail systems are up and running. Fortunately for the company, there are plenty of ports bursting at the seams that cannot wait that long. Wychocki says a question he invariably gets after pitching EagleRail is: “Where were you 10 years ago? Usually, there is an urgency.”

That’s why “our goal was to get out of the gate fast, build market share and our brand and create a quasi-franchise network,” says Wychocki, whose business model has EagleRail owning 25 percent of a system while the port and other local entities own the rest.

He estimates that within 10 years, 12 EagleRail systems will be operating. If that sounds like a pipe dream, consider that his company’s newsletter boasts 3,000 subscribers before a system is even up and running. Wychocki does not credit “brilliant marketing” for that keen interest. “It’s because every port’s problems are getting worse. Everyone is squealing about what to do with these giant ships that cannot be unloaded fast enough. They are desperate.”

response

Global Trade Magazine Launches COVID C.A.R.E. Business Response Program

Global Trade Magazine is ramping up efforts in supporting global businesses by utilizing a new set of tools found in its technology toolbox. Companies capable of adapting their technology through the crisis are doing so at a record pace as leading automotive giants are now churning out respirators instead of automobiles while whiskey producers scramble to make hand sanitizer to help meet demand. Global Trade Magazine is doing the same thing for global businesses and their customer base.

“Responding to global business leader and customer questions and concerns will be more critical than ever now. Doing so effectively is a monumental task for many global trade players, yet doing so will be the difference in businesses keeping their operations moving and laying off hundreds or even thousands. We’ve re-engineered our Artificial Intelligence product to meet customer demands,” stated Eric Kleinsorge, CEO and Publisher of Global Trade Magazine.

The Global Trade COVID C.A.R.E. (Coronavirus Automated Response Effort) Local Response Program takes a unique approach in supporting global businesses and their efforts in responding to customer concerns by utilizing AI response systems. This integrated system Records, Responds, Alerts, Prioritizes and Completes requests from customers that need information and answers from global businesses in the global trade community. Instead of fearing this change, the Global Trade Mag team linked arms and stepped up to the challenge. From receiving requests and concerns to automated feedback, request prioritization, and system follow-ups, the Global Trade Response Program offers an integrated system of checks and balances that captures every request from every customer.

“We have been in the business of helping global companies communicate with their customers and now it’s our turn to help these businesses communicate and update these customers,” Kleinsorge concluded.

To request information on how this program can help your business, please click here or call (469) 778-2606.

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About GSLI/Global Trade Magazine

Global Site Location Industries (GSLI) is the parent company of Global Trade Magazine and was founded in 1994 by Eric Kleinsorge with a very specific goal in mind: grow local and global communities while bringing business projects to life through strategic economic development partnerships and customer management strategies. He is recognized in over 110 articles as an industry expert and has conducted interviews with well-known figures including George W. Bush, Colin Powell, Jay Leno, Jerry Jones, Rudy Giuliani, Mike Dell, and many more.

Not only do the companies support community and global branding, but we bring company goals to life through a tailored approach to attracting sustainable businesses and customer partnerships. We take pride in our reputation as an expert in assisting expanding and relocating companies partner with the world’s finest companies. For more than 20 years, GSLI has been the premier partner of choice for companies– both big and small, looking to create a solid economic and customer foundation primed for growth and success.

ustr

USTR Considers 301 Tariff Exemption Requests for COVID 19 Medical Supplies

As the country faces the global health crisis caused by the COVID-19 outbreak, recent announcements by the Office of the U.S. Trade Representative (“USTR”) signal the possibility of some relief from special tariffs on imports from China. Since July 2018, as reported previously here, the Trump Administration has imposed tariffs under Section 301(b) of the Trade Act of 1974 on nearly all U.S. imports of Chinese goods, including medical supplies that are now in high demand because of the outbreak.

USTR based the tariffs on its findings in an investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. There have been four rounds of tariffs, broadening the scope of products that are affected. With each round, USTR allowed requests for exclusion of particular products that are not adequately available in the United States.  Prior to the most recent announcements, the opportunity to request exclusions from any or all of the four lists had lapsed, but USTR continued to consider whether to grant requests that had already been filed but remained outstanding.

National priorities have changed as the COVID-19 outbreak in the United States has worsened, increasing the need for medical supplies. On March 25, USTR published a notice of the opportunity to request additional exclusions for products expected to be helpful in responding to the crisis.

Requests can be made through the online portal regulations.gov, but the window closes June 25, 2020, unless extended. Requests “specifically must identify the particular product of concern and explain precisely how the product relates to the response to the COVID-19 outbreak. For example, the comment may address whether a product is directly used to treat COVID-19 or to limit the outbreak, and/or whether the product is used in the production of needed medical-care products.” Decisions will be made on a rolling basis. Any responses to exclusion requests should be submitted within three business days after a request is posted.

In addition, USTR states that it has been prioritizing, in consultation with the U.S. Department of Health and Human Services, the processing of previously filed exclusion requests “addressed to medical-related products related to the U.S. response to COVID-19,” granting approximately 200 separate exclusions on March 10, 2020, March 16, 2020, and March 17, 2020. Products excluded in this manner have included medical masks and other personal protective products.

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By Matthew R. Nicely, Joanne E. Osendarp, Eric S. Parnes, Dean A. Pinkert and Julia K. Eppard at Hughes Hubbard & Reed LLP

DACHSER

DACHSER’s New LCL Service Offers Expanded Connections for Shippers

Shippers seeking a consolidated access option along the route from Europe to Chile are now offered DACHSER’s latest weekly schedule of LCL services. This added service streamlines the process by collecting container shipments followed by consolidation at its Hamburg warehouse. Once consolidated, the items are shipped directly to San Antonio, Chile without interruption.

“Referring to ‘less than container load,’ our new LCL service is designed to meet the specific needs of our customers with smaller merchandise quantities. The service not only optimizes efficiencies and reduces costs, but the fixed weekly schedule improves the planning process,” said Guido Gries, Managing Director, DACHSER Americas.

“An effective LCL service comes down to timing—from the coordination of the grouping of goods and to the fixed container trips between ports. Our management of this timing allows our customers the benefit of improved planning and transit times as well as transparency of their shipments,” said Mr. Gries.

Markets including Germany, France, Austria, Switzerland, Belgium, Denmark, Netherlands, Czech Republic, Poland, and Slovakia are directly connected to the Chilean region thanks to this added service. DACHSER continues to showcase its dedication to expanding network capabilities while supporting the needs of its customers, particularly in a trying time for the supply chain and global logistics players.

“The service offers customers streamlined container coordination and management of all sea freight imports deployed on first-class carriers to Chile,” added Mr. Gries. “Thanks to our extensive European logistics network we can offer seamless visibility from the door of the supplier in Europe to the final destination.”

Additional service offerings include interlocked logistics solutions aimed to support road, air, and sea logistics through transportation and warehousing services as well as pre-carriage handling and transparent supplier tracking.

smart contracts

How to Save Time and Money with Blockchain Smart Contracts

Manufacturing processes are growing increasingly complex — especially as the coronavirus pandemic spreads — in today’s global marketplace. With so many moving parts, it’s becoming more difficult to reliably and efficiently track actions and data along the supply chain. Blockchain-enabled smart contracts are emerging as a solution — one that provides transparency and ensures everyone along the supply chain is following the same set of agreed-upon rules.

With everyone on the supply chain sharing the same logic and data, manufacturers can automate time-sensitive processes and avoid costly dispute resolutions. Blockchain is on the rise, and Gartner predicts that 30% of manufacturing companies making more than $5 billion in revenue will have invested in blockchain-powered projects by 2023.

Implementing the technology and data infrastructure to convert processes into smart contracts can seem daunting, and companies that don’t hit the $5 billion mark will be slower to catch up.

The fear of failing after the investment can be a serious deterrent. But smart contracts save enough time and money for manufacturers that the costs of waiting might be greater than the upfront investment needed to get started.

The Value of Smart Contracts

The core values of blockchain are transparency and trust, and smart contracts play a pivotal role in providing these benefits. Taken together in a business context, blockchain-based smart contracts make it possible to avoid disputes. A smart contract is software that automates a single trusted version of an agreement between parties. They might rely on one version of data about what’s happening (or has happened) and record the results of the contract, such as funds being transferred in exchange for using a piece of equipment.

Without smart contracts, businesses working together in manufacturing have to maintain separate systems that encode business rules with slight differences. The data they use might also vary from the data other companies use, making it difficult to reconcile any issues. These differences lead to disputes that require significant time and effort to resolve.

The automation and data standards that smart contracts provide allow manufacturers to consider different ways to work with partners along their supply chain. Their partnerships can be based on performance or quality in ways that would have been impossible to implement — much less trust — without the use of blockchain and smart contracts.

How Do Smart Contracts Work?

In a blockchain system, the word “contracts” doesn’t carry the same meaning as legal contracts. Instead, smart contracts are more broadly used to encode logic that often isn’t written explicitly in a contract. Unlike traditional software, they’re used to create business logic that multiple parties can rely on and trust.

Many of us are familiar with the concept of business rules in software systems. In the blockchain world, smart contracts are the business rules shared by the users of the blockchain. Think of blockchain like a shared database: Smart contracts are the rules that define how data can be entered or changed in the shared database. Within the supply chain, smart contracts are typically the rules shared by multiple businesses in the supply chain that are also users of the blockchain system.

For most applications, smart contracts can be executable versions of traditional business contracts, or they might be new logic that coordinates long-running processes and activities across different businesses. They’re trusted because they’re created and housed on a blockchain, which means the code is typically visible to system developers, business analysts, and auditors.

Although smart contracts are triggered by some external event, such as a user’s action or a change in external data (a commodity’s price, for example), the code they run is normally approved in advance by all businesses involved. Currently, businesses are already utilizing blockchain-secured smart contracts for a range of supply chain processes.

For example, some companies combine smart contracts with Internet of Things sensors to record the movement of supplies into a manufacturing facility. Then, they automate payment for those supplies. Others record the operating conditions of a machine to determine if maintenance is required or gauge the condition of manufactured products to ensure standards are met.

Such contracts produce equipment usage records and quality control checks in real-time, and parties on all sides of the contract can trust the data. How we handle everything — from securing supplies to monitoring equipment and manufacturing products — can be improved with the strategic use of blockchain-powered smart contracts.

Being Smart About Which Contracts to Convert

As companies convert more intrabusiness processes into smart contracts, the benefits of doing so grow easier to recognize. Shipments and payment approvals can be verified in real-time, and disputes are eliminated or resolved immediately with no intermediaries. The time and cost savings are substantial.

By using these strategies to determine where to use smart contracts, companies of all sizes have a better chance at reaping the benefits much sooner:

1. Break down costs before the converting starts. The first time a company implements a smart contract, the costs of establishing the blockchain system will be relatively high. These initial costs can often be the biggest deterrent, especially for smaller, less tech-driven companies. Over time, though, the incremental costs of automating smart contracts will go down. Account for this initial cost by taking time to identify the contracts that are currently the most costly to execute.

2. Prioritize external contracts over internal ones. Not every contract needs to be a smart one. In fact, the costs of executing some processes might not justify the investment in automating them. Focus on agreements, contracts, and other expectations that are between the company and another business (or better yet, where more than two businesses are involved), and rule out internal agreements between departments. Because trust is less of an issue, internal disputes can be reconciled relatively easily. Putting them on a blockchain would just be overkill.

3. Focus on contract difficulty — not frequency. Because the goal of automation is to create less work, it’s tempting to go straight for the contracts that are executed most often. Instead, focus on the amount of effort it takes to use each contract rather than how often it’s used. High-frequency contracts might be executed with few or no disputes, whereas low-frequency ones might be costly to manage due to complex and/or unclear terms. These are much better candidates.

4. Start with material sourcing for maximum impact. To know for sure which processes can benefit most from conversion into smart contracts, look for people throughout the organization who deal with reconciliation, quality control, and/or audit support. Also, consider the data used in each transaction. Between both parties, how important is trusting that data? Material sourcing is often ripe for improvement, and trust in data is critical to the relationship between manufacturer and supplier.

The ability to create smart contracts is becoming one of the best-known benefits of using blockchain technology in the manufacturing realm. Investing in the technology might be costly at first, but getting in on the ground floor will be easier if you use it to turn the right processes into irrefutable smart contracts.

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Alex Rosen is the vice president of business development at Chainyard, a blockchain consulting company focused on delivering production solutions that address financial services, supply chain, transportation, government, and healthcare pain points.

compliance

U.S. Regulators Focus on Compliance Efforts in Enforcement Decisions Involving International Companies

Over the past few years, U.S. regulators have made it clear that having comprehensive and effective compliance policies covering trade is a must, regardless of the company size, location or industry. The government’s move to formalize the importance of compliance programs is a clear signal of what it expects and a harbinger of what is to come.

Why Is Trade Compliance Important Regardless of the Company’s Location?

Trade compliance should be the goal of every global company, in particular as a risk mitigation measure and a positive value proposition. A compliance program serves as a security blanket for large financial institutions accustomed to dealing with regulations, small startups with a cloud-based platform, and even companies with no physical presence in the United States. A trade compliance program lays the groundwork for international companies on how to conduct business in or with the United States.

With changing industry regulations, it is critical to keep up to date and have a compliance program that is effective. Failure to have a strong compliance program could result in increased legal exposure, potentially leading to fines and penalties as well as negative publicity associated with an enforcement action. Maintaining an effective trade compliance program could help companies mitigate penalties for potential violations, and is ultimately cost-effective. For example, last year, the U.S. government imposed $1.3 billion in penalties on cargo firms, penalties that could have been mitigated with robust compliance programs.

 Avoiding U.S. Sanctions

Engaging in the complex global supply chain may be a financial win, but it requires formalized diligence procedures to ensure your company does not run afoul of the law. The Department of Treasury’s Office of Foreign Assets Control (OFAC) has released guidance encouraging organizations to employ a risk-based approach to sanctions compliance and focus on five essential components: senior management commitment, risk assessments, internal controls, testing and auditing, and training. To incentivize companies to engage in international transactions, OFAC also provides that in the case of a violation, it will give favorable consideration to companies with effective sanctions compliance programs and that the existence of such a program may mitigate a civil monetary penalty.

OFAC is not just issuing guidance, it is increasing its enforcement efforts involving both U.S. and foreign entities. It continues to designate more non-U.S. entities that have helped evade U.S. sanctions. For example, several Chinese shipping companies were found to have violated North Korean sanctions, and as a result, were blocked from doing business in the U.S. or with U.S. parties. In January 2020, Eagle Shipping, a Marshall Islands ship management company with headquarters in Stamford, Connecticut, agreed to pay $1,125,000 to settle its potential civil liability for 36 apparent violations of the Burmese Sanctions Regulations. The violations involved Eagle Shipping’s affiliate in Singapore entering into a chartering agreement with Myawaddy—an entity identified on OFAC’s List of Specially Designated Nationals and Blocked Persons. Eagle filed an application with OFAC requesting a license authorizing it to carry sand cargoes purchased from Myawaddy but continued its dealings while the OFAC application was pending. OFAC ultimately denied the license, but Eagle resumed its dealings with Myawaddy, carrying cargo from Burma to Singapore.

Among the aggravating factors, OFAC considered Eagle’s status as a sophisticated shipping company, which should have had expertise in international trade and global shipping transactions. Among the mitigating factors, OFAC considered Eagle’s efforts to develop and implement a formal sanctions compliance program with specific policies and procedures for compliance screening, transaction checklists, and red-flag identification tools.

Compliance Under Commercial Export Laws

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS), which administers U.S. commercial export control regulations, also has published comprehensive guidance for companies working to develop or shore up compliance materials. In its guidance, BIS identified the following elements as foundational in creating an effective Export Compliance Program (ECP): management commitment, completing regular risk assessments, obtaining proper export authorization, record-keeping, training, compliance audits, addressing export violations and taking corrective actions, and maintaining your ECP. Like OFAC, BIS emphasizes the importance of tailoring your ECP to your organization and business based on size, volume of exports, geographic location, and other relevant factors. Companies that fail to comply with regulations that govern export controls have experienced significant penalties.

The U.S. export control laws govern not only U.S. companies, but also certain export activities of foreign companies dealing with the export of certain products, technology, or services from the United States to a foreign country. For example, most recently, BIS imposed substantial export and reexport restrictions on Huawei, a Chinese company, and its 68 non-U.S. affiliates in connection with Huawei’s violations of U.S. export laws specific to the Iranian Transactions and Sanctions Regulations. As part of that action, BIS restricted any export, re-export, or transfer of U.S.-origin technology, commodity, or software to Huawei and its entities without an export license.

This enforcement action ultimately impacted both the U.S. and non-U.S. businesses, including big and small tech companies, suppliers, importers, shippers, and financial institutions. Separately, in 2017, the U.S. government imposed a $1.2 billion criminal fine against ZTE, a Chinese telecom equipment company, for shipping U.S.-origin telecommunications equipment to Iran and North Korea. These two cases have affected how U.S. and foreign companies view their compliance programs; they also have incentivized the development and implementation of more robust compliance programs, including vetting procedures and sanctions checks that ensure adherence to the U.S. export control regulations.

Recommended Steps for Ensuring Compliance and Mitigating Risk

-The benefits of having a compliance program in place when a mistake happens are significant. When creating your tailored trade compliance policies and procedures, remember the following:

-Compliance programs should include a comprehensive, independent, and objective testing or audit function to ensure that your business is aware of how its programs are performing.

-Programs should be updated regularly in light of constantly changing regulatory and business environments.

-Ensure that your compliance program has comprehensive coverage to track all parties involved in import and export transactions.

-Even products that seem harmless can be used in ways that companies do not intend. As an organization, you are responsible for knowing how your products will be used and for avoiding government-prohibited end uses.

-Watch for red flags on BIS’s published list.

-Watch for “deemed” exports, which are released in the United States of technology or source code to a foreign person. Such a release is deemed to be an export to the foreign person’s most recent country of citizenship or permanent residency, which may require a license or even be prohibited.

Now more than ever, government offices and agencies are providing the industry with guidance on how best to comply with trade regulations. However, this also means that companies can no longer claim ignorance of trade regulations. Today, companies participating in the global marketplace must take proactive preventive measures to ensure compliance, mitigate risk, and minimize potential penalties.

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 Doreen Edelman and Zarema Jaramillo are attorneys at Lowenstein Sandler.

company

Is Your Company’s Bench Deep Enough During Difficult Times?

In the uncertain times that the coronavirus produced, business leaders were forced to face the fact that employees might not be available every day to do their jobs – either because of their own health concerns or because they were scrambling to make childcare arrangements because of school closings.

And, as the economy takes a hit, some businesses may even need to downsize, leaving the remaining workers to take on duties they are unprepared for and weren’t hired to carry out.

That’s one reason why it’s always a good idea to cross-train employees, allowing someone else to step in when circumstances necessitate it, says Bill Higgs, an authority on corporate culture and the ForbesBooks author of the Culture Code Champions: 7 Steps to Scale & Succeed in Your Business (www.culturecodechampions.com/training).

“Ultimately, you want everyone who works for you to broaden their knowledge and expand the scope of what they normally do,” says Higgs, a founder and former CEO of Mustang Engineering who recently launched the Culture Code Champions podcast.

“The result is a more efficient and productive workplace.”

In his younger days, Higgs was an Army Ranger, where the need to cross-train was inescapable.

“If you are on a critical military mission and someone goes down, another Ranger needs to take over that person’s duties,” Higgs says. “Otherwise, the mission would be scrapped.”

The average business day may not be as severely distressing as a military mission, but just as in the military, cross-training comes with benefits, he says. It prevents mistakes. It improves accuracy. It saves time. It saves money.

And each additional duty an employee can take on during uncertain times could make the difference on whether a project or order is completed on time, and whether missed deadlines leave customers unhappy, costing the business money – or even leading to it going out of business.

“Some business leaders may say they just can’t work in the time for cross-training because they and their employees are too busy,” Higgs says. “They probably are busy, but it needs to be a priority and they need to figure out a way to find the time. We’re probably seeing right now just how important it can be.”

A few suggestions he has for working cross-training into harried schedules include:

Make use of downtime. Few people are busy every minute, so take advantage of any downtime to slip in cross-training, Higgs says. “That way no one is just sitting around waiting for the next project,” he says. “At Mustang, for example, if an instrument engineer’s work slowed down, then we moved him or her over to automation or some other functional area that was related to, but slightly different from, the person’s regular job.”

Schedule time. “I’m skeptical when people tell me they don’t have any downtime, but let’s assume that’s so,” Higgs says. “Then I recommend you set aside time specifically dedicated to cross-training. It’s that important.” Figure out who you need to cross-train, he says, and find the areas of your business where cross-training will pay off the most.

Implement “lunch-and-learns.” Nearly everyone eats lunch or takes a break at mid-day, and that’s a great time to set up some lunch-and-learn times when someone in the company can teach others about what they do, Higgs says. “At Mustang, we even had vendors come in and talk about their products and services,” he says.

“An added bonus to cross-training is people who don’t normally interact are brought together and develop a better appreciation for what others do,” Higgs says. “That helps to create an even greater sense of team throughout the organization, which is especially important during difficult times like these when everyone needs to pull together.”

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Bill Higgs (www.culturecodechampions.com/training), an authority on corporate culture, is the ForbesBooks author of Culture Code Champions: 7 Steps to Scale & Succeed in Your Business. He trains companies on how to improve their bottom line by improving their culture, and recently launched the Culture Code Champions podcast, where he has interviewed such notable subjects as former CIA director David Petraeus and NASA’s woman pioneer Sandra Coleman. Culture Code Champions is listed as a New & Noteworthy podcast on iTunes. Higgs is also the co-founder and former CEO of Mustang Engineering Inc. In 20 years, they grew the company from their initial $15,000 investment and three people to a billion-dollar company with 6,500 people worldwide. Second, third and fourth-generation leaders took the company to $2 billion in 2014. Higgs is a distinguished 1974 graduate (top 5 percent academically) of the United States Military Academy at West Point and runner up for a Rhodes scholarship. He is an Airborne Ranger and former commander of a combat engineer company.

businesses

How Businesses can Weather COVID-19: Start with Empathy to Employees

Major U.S. businesses are adjusting operations, laying off employees or reducing hours in response to the coronavirus outbreak.

It’s uncharted territory for the nation, and companies from large brands to small businesses, like everyone else, are operating without a playbook to deal with an unprecedented public health threat that will also have economic implications. How businesses adjust to the pandemic and respond to this “new normal” is critical to the future of their business.

“The most important part is showing empathy to employees – now more than ever in these uncertain times,” says Ed Mitzen (www.edmitzen.com), founder of a health and wellness marketing agency and ForbesBook author of More Than a Number: The Power of Empathy and Philanthropy in Driving Ad Agency Performance.

“While every company is dealing with the effects of the COVID-19 outbreak, it’s important to keep in mind that your employees are being affected in more ways than one. Added challenges to daily life now include your partner working next to you, your children being home from school, and having to keep an extra close eye on elderly relatives. In these unusual circumstances, people will notice which companies are treating their employees with empathy and compassion and which are not.”

A business leader’s response during a time like this defines who they are as a leader.

Mitzen thinks this challenging time could be used by business owners to assess their company culture and consider that how they treat employees is central to that culture and vital for business results. He explains how leaders can show empathy to employees, strengthen company culture and drive performance:

Lead with support, not force. “Culture starts at the top, and the best results come when leaders support their people and help them get the most out of life, rather than trying to squeeze them to work harder and harder,” Mitzen says. “People can sacrifice for the job for only so long before they burn out. It may sound counterintuitive, but sometimes prioritizing life over work actually improves the work product. Once you hire good people, you don’t have to push them with crazy deadlines to squeeze productivity out of them.”

Build a team of caring people. “Business is a team sport,” Mitzen says. “To have an empathetic culture, you need people who care for each other and work well together. Build teams by looking for people who lead with empathy.  Don’t hire jerks. People who are super-talented but can’t get along with others tend to destroy the team dynamics, and the work product suffers.”

Define a positive culture – and the work. Showing empathy to employees can be an engine generating creativity and productivity. “The internal culture at a company defines the work the company produces,” Mitzen says. “Culture influences who chooses to work for you, how long they stay, and the quality of work they do. And the core of the culture is empathy, starting with employees and extending to customers and the communities that you live in. There’s a strong connection between a healthy work culture, which inspires people, and the work customers are receiving. That kind of company makes sure customers are treated the same way they are being treated.”

“Now more than ever, empathy, kindness and compassion are important values to keep at the forefront of your organization,” Mitzen says. “Business leaders can take the lead in doing the right thing, starting with their employees.”

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Ed Mitzen (www.edmitzen.com) is the ForbesBook author of More Than a Number: The Power of Empathy and Philanthropy in Driving Ad Agency Performance and the founder of Fingerpaint, an independent advertising agency grossing $60 million in revenue. A health and wellness marketing entrepreneur for 25 years, Mitzen also built successful firms CHS and Palio Communications. Fingerpaint has been included on the Inc. 5000 list of fastest-growing companies for seven straight years and garnered agency of the year nominations and wins from MM&M, Med Ad News, and PM360. Mitzen was named Industry Person of the Year by Med Ad News in 2016 and a top boss by Digiday in 2017. A graduate of Syracuse University with an MBA from the University of Rochester, Mitzen has written for Fortune, Forbes, HuffPost, and the Wall Street Journal.

paper

Spain’s Production of Corrugated Paper and Paperboard Posted Solid Gains over the Last Decade

The revenue of the corrugated paper market in Spain amounted to $635M in 2018, flattening at 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, corrugated paper consumption continues to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in 2011 when the market value increased by 14% year-to-year. In that year, the corrugated paper market reached its peak level of $806M. From 2012 to 2018, the growth of the corrugated paper market remained at a lower figure.

Production in Spain

In 2018, the amount of corrugated paper and paperboard produced in Spain amounted to 947K tonnes, approximately reflecting the previous year. The total output volume increased at an average annual rate of +3.6% over the period from 2008 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The most prominent rate of growth was recorded in 2017 when production volume increased by 14% against the previous year. Over the period under review, corrugated paper production reached its maximum volume in 2018 and is expected to retain its growth in the near future.

In value terms, corrugated paper production totaled $624M in 2018 estimated in export prices. Overall, corrugated paper production continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2010 when production volume increased by 15% against the previous year. Corrugated paper production peaked at $832M in 2011; however, from 2012 to 2018, production failed to regain its momentum.

Exports from Spain

In 2018, the corrugated paper exports from Spain stood at 22K tonnes, going up by 40% against the previous year. Overall, corrugated paper exports, however, continue to indicate a pronounced contraction. The pace of growth was the most pronounced in 2018 when exports increased by 40% against the previous year. Over the period under review, corrugated paper exports attained their peak figure at 32K tonnes in 2008; however, from 2009 to 2018, exports failed to regain their momentum.

In value terms, corrugated paper exports amounted to $23M (IndexBox estimates) in 2018. Over the period under review, corrugated paper exports, however, continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2018 when exports increased by 40% year-to-year. Over the period under review, corrugated paper exports reached their peak figure at $25M in 2008; however, from 2009 to 2018, exports failed to regain their momentum.

Exports by Country

France (11K tonnes), Saudi Arabia (6.5K tonnes) and Portugal (3.6K tonnes) were the main destinations of corrugated paper exports from Spain, with a combined 97% share of total exports.

From 2008 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Saudi Arabia, while the other leaders experienced mixed trend patterns.

In value terms, France ($9.1M), Saudi Arabia ($7.9M) and Portugal ($2.3M) constituted the largest markets for corrugated paper exported from Spain worldwide, together accounting for 82% of total exports.

Portugal recorded the highest growth rate of exports, in terms of the main countries of destination over the last decade, while the other leaders experienced more modest paces of growth.

Export Prices by Country

The average corrugated paper export price stood at $1,045 per tonne in 2018, approximately mirroring the previous year. Over the last decade, it increased at an average annual rate of +3.1%. The pace of growth was the most pronounced in 2011 an increase of 36% year-to-year. The export price peaked at $1,202 per tonne in 2015; however, from 2016 to 2018, export prices failed to regain their momentum.

Prices varied noticeably by the country of destination; the country with the highest price was Saudi Arabia ($1,209 per tonne), while the average price for exports to Portugal ($631 per tonne) was amongst the lowest.

From 2008 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to Mauritania, while the prices for the other major destinations experienced mixed trend patterns.

Imports into Spain

In 2018, the imports of corrugated paper and paperboard into Spain stood at 5.6K tonnes, falling by -3.8% against the previous year. Over the period under review, the total imports indicated a mild increase from 2008 to 2018: its volume increased at an average annual rate of +1.6% over the last decade. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, corrugated paper imports increased by +114.3% against 2016 indices. The growth pace was the most rapid in 2017 with an increase of 123% year-to-year. Over the period under review, corrugated paper imports reached their peak figure at 7.1K tonnes in 2011; however, from 2012 to 2018, imports remained at a lower figure.

In value terms, corrugated paper imports amounted to $6.4M (IndexBox estimates) in 2018. Overall, corrugated paper imports, however, continue to indicate a notable increase. The growth pace was the most rapid in 2017 with an increase of 140% y-o-y. In that year, corrugated paper imports attained their peak of $7.3M, and then declined slightly in the following year.

Imports by Country

Germany (1.8K tonnes), France (1.4K tonnes) and Italy (1.1K tonnes) were the main suppliers of corrugated paper imports to Spain, with a combined 78% share of total imports. Slovenia, Portugal, China and the UK lagged somewhat behind, together accounting for a further 24%.

From 2008 to 2018, the most notable rate of growth in terms of imports, amongst the main suppliers, was attained by Slovenia, while the other leaders experienced more modest paces of growth.

In value terms, the largest corrugated paper suppliers to Spain were Germany ($2.7M), France ($1.7M) and Italy ($1.3M), together comprising 87% of total imports. Slovenia, Portugal, China, and the UK lagged somewhat behind, together comprising a further 24%.

Among the main suppliers, Slovenia experienced the highest growth rate of imports, over the last decade, while the other leaders experienced more modest paces of growth.

Import Prices by Country

The average corrugated paper import price stood at $1,144 per tonne in 2018, coming down by -8.3% against the previous year. Overall, the import price indicated a slight increase from 2008 to 2018: its price increased at an average annual rate of +1.4% over the last decade. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. The pace of growth appeared the most rapid in 2010 when the average import price increased by 26% against the previous year. Over the period under review, the average import prices for corrugated paper and paperboard attained their peak figure at $1,248 per tonne in 2017, and then declined slightly in the following year.

Prices varied noticeably by the country of origin; the country with the highest price was the UK ($1,536 per tonne), while the price for Slovenia ($900 per tonne) was amongst the lowest.

From 2008 to 2018, the most notable rate of growth in terms of prices was attained by Germany, while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox AI Platform

tyson foods

TRANSPLACE GETS BOOSTS FROM TYSON FOODS, DANA INTERNATIONAL

Springdale, Arkansas-based Tyson Foods, which is one of the world’s largest food companies, bestowed its 2019 Premier Carrier Award to Transplace, the logistics/transportation/technology company headquartered in Frisco, Texas, and operating offices all over the United States and overseas.

“Transplace has been a partner for more than 35 years with a superior track record of on time and on budget delivery across our entire North American network,” said Chris Kozak, Tyson’s associate director of Contract Carriers. “Over the years as we’ve expanded and developed new consumer-appealing food products, Transplace has adapted its transportation management technologies to support us in staying at the forefront of our industry. Transplace consistently rises to our toughest logistics challenges and remains flexible to the day-to-day changes in our dynamic schedules.”

“In the more than three decades that I’ve been leading our 3PL strategies for Tyson Foods, it truly has been a collaborative relationship,” says Jay Moss, president of Transplace Specialized Services. “We are grateful for the award and honored to work with an organization that’s continuously evolving to meet consumer demands. Our access to data from North America’s largest transportation management system allows us to offer cost management insights and unprecedented efficiencies of scale. The Tyson Foods teams are open to our recommendations and together we’ve overcome countless supply chain challenges over the years.”

In other news, Maumee, Ohio-based Dana International, which engineers solutions for passenger-vehicle, commercial-truck, off-highway and industrial-machinery clients, recently selected Transplace to manage its North American transportation network.