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Dear Shippers, It’s Time for Creativity

shippers
Archives, Global Logistics, Global Shippers 101, Ocean Ports

Dear Shippers, It’s Time for Creativity

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To offset many of the problems we are encountering today ― inflationary pressures, port delays and labor shortages ― shippers must think and act differently to ensure resilience. To be successful, leaders must take a new, more creative approach to minimize today’s adversities to increase revenues. Here are some new ways companies are successfully mitigating the plethora of challenges facing global trade today:

1. Creativity Within Modes and Port Selection: Presently, more than 100 container ships await dock space at the Los Angeles and Long Beach ports1, and the World Container Index price for 40 ft. containers stands at $9,669.472, 276% higher than a year ago. Shippers are not only struggling to secure capacity due to port inefficiencies but are paying premium prices even when they can secure containers. Once reserving container space, shippers then have to deal with long lead times. The door-to-door transit time for a container from China to Chicago is now 73 days versus 35 days in pre-pandemic times.

Minimizing the impact on your organization will require teams to think more creatively and collaboratively. For example, in the past, when Coca-Cola could not supply their production facilities due to limited vessel space, they refused to accept the current situation as their only option. Instead, their procurement and supply chain teams collaborated to leverage a nontraditional method of shipping. They decided to ship their manufacturing materials via bulk vessels typically used to ship dry cargo3. Coca-Cola safely shipped their products by securing the materials using plastic wrap and unloading at noncongested ports to avoid excessive demurrage fees being levied on shippers. Their priority was to keep the product lines running, and they accomplished it by actively seeking out alternatives.

Organizations need to think more broadly and explore the feasibility of using all available options, such as Coca-Cola did. Also, they must consider avoiding the West Coast ports whenever possible, as other ports, such as those on the East Coast, are currently less congested.

2. Seek Unconventional Partnerships: The boost in e-commerce sales and the growing driver shortage have negatively affected domestic trucking capacity. The result is like what we see in ocean shipping: premium prices and increased lead times. In pre-pandemic times, consumers took advantage of quick and reliable e-commerce delivery channels made popular by the likes of Amazon. Now, however, they are left hoping their products arrive within their expected delivery window, as shipping delays continue to become more common.

Understanding that customers have an insatiable appetite for fast and reliable delivery, Home Depot found a way to offer added convenience to its e-commerce business. Home Depot will become the first retail client in Walmart’s new delivery-as-a-service business called GoLocal. According to a Home Depot spokesperson, by leveraging Walmart’s existing delivery network, Home Depot will offer same-day and next-day delivery in select stores, with plans to expand by the end of the year.

In a market where capacity is hard to come by, Home Depot expanded its options by leveraging new partners who had capabilities that spanned beyond their own while offering convenience to the customer. As a result, they will reach more customers than before at lower costs to the consumer. Stephanie Smith, a senior vice president of supply chain for Home Depot, said, “This partnership brings us even closer to our goal of offering same-day or next-day deliveries to 90 percent of the U.S. population.”4 Seeking partnerships, even from those who may be competitors, is an excellent way to reduce the consumer’s expenses. Also, shippers should begin exploring alternatives in last-mile delivery to increase customer satisfaction, including added convenience and reduced shipping costs.

Difficulties in the supply chain are impacting shippers and consumers alike. On the one hand, consumers are experiencing inflation in certain products; on the other hand, shippers see their profits eroded. From either end, this situation is far from ideal. Labor shortages and capacity constraints are but two of several factors are contributing to higher costs. Organizations will have to wrestle with whether they will pass some of these costs on to consumers or allow them to affect margins. Either way, to overcome this dilemma, shippers must get creative to offset rising costs.

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Alex Hayes and Derrick Lopes are Senior Associates at GEP, a leading provider of procurement and supply chain solutions to Fortune 500 companies.

1 https://apnews.com/article/business-california-los-angeles-long-beach-shipping-ffbbf935495b0bbea064bcbb1ce330cb

2 https://www.drewry.co.uk/supply-chain-advisors/supply-chain-expertise/world-container-index-assessed-by-drewry

3 https://www.businessinsider.com/coca-cola-uses-bulk-vessels-amid-shipping-crisis-2021-10

4 https://www.forbes.com/sites/walterloeb/2021/10/11/could-home-depots-partnership-with-walmart-lead-to-other-close-working-arrangements/?sh=25aebd867b88

supply chain
3pls, Archives, Global Logistics, Global Trade Daily

WHY AND HOW BIG DATA IS A GAME CHANGER FOR THE SUPPLY CHAIN

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In its 2013 report titled Big Data in Logistics, DHL proclaimed that “The logistics sector is ideally placed to benefit from the technological and methodological advancements of Big Data” and predicted “huge untapped potential for improving operational efficiency and customer experience and creating useful new business models.”

Today, the transformation of logistics to a data-based model is no longer a futuristic fantasy. The ability to create a digital ID, carry it through the supply chain, capture all transactions along the way and implement action against that data has now become a reality. Intelligent identification solutions exist to optimize item-level data captured at the beginning of a product’s journey, enabling full inventory visibility and accuracy, as well as enhanced routing speed for all partners along the supply chain. With product-level data, supply chain execs are empowered to analyze and make intelligent real-time decisions with the ebbs and flows of demand.

As a global industry, 3PL professionals need to understand the promise of identity solutions and the key benefits they offer. The first step for leaders across the enterprise is recognizing that the supply chain is not a set of standalone “links.” On the contrary, supply chains should be viewed holistically to leverage advances in data infrastructure that enable a total ecosystem of item + shipping specific information across each touchpoint of a supply chain. 

The Importance of Accuracy 

Among the many advantages of assigning digital identities to products is speed—and the key to speed is accuracy. Think of it this way: The utilization of item data throughout the supply chain enables speed with accuracy. 

Consider a logistics scenario with an RFID-enabled intelligent label applied at the source of an item. As the item begins its journey, the data captured and carried in that label enables shipment verification. When the “intelligently” labeled products arrive at a facility or warehouse, the recipient can quickly confirm that what was received is precisely what was expected. 

The data contained in the intelligent labels also allow outbound verification to the store or e-commerce retailer. In turn, the same label gives the retailer the inbound verification they need to move the items directly into inventory, with data that assures its accuracy. At the end of the supply chain the retailer has confidence that they can show the customer exactly what is available.

Shipping errors are another logistics challenge that can be addressed through accurate data. Currently, up to 4% of shipping errors are due to misrouted items that must be returned to the distribution center for re-routing. Legacy operations that rely on separate processes (with the six to eight touchpoints that a product moves through) increase the chance of such errors. Therefore, there is an operational benefit to routing solutions that are based on item- or parcel-level data to allow cross-docking optimization within the supply chain that enables greater speed accuracy. Put simply, velocity increases as accuracy improves.

Moving Toward Sustainability

As the supply chain becomes more normalized post-pandemic, back-burnered sustainability goals are re-emerging, driven by consumers, regulations, and cost—not necessarily in that order. The supply chain as an industry is being specifically tasked with sustainability.

A report from the management consulting group BCG stated, “By implementing a net-zero supply chain (the state in which as much carbon is absorbed as is released into the atmosphere), companies can amplify their climate impact, enable emission reductions in hard-to-abate sectors, and accelerate climate action in countries where it would otherwise not be high on the agenda.” This report also noted that “in most supply chains, the costs of getting to net-zero are surprisingly low.”

On the consumer side, a research study from Deloitte found that “concerned consumers are adopting a raft of different measures to shop and live more sustainably. One of the most prominent lifestyle changes is “shopping for brands with environmentally sustainable values.” In fact, over a third of consumers surveyed indicated that they value ethical practices in the products and services they buy. 

The data captured and carried in intelligent labels provide real-world efficiency solutions for achieving sustainability in logistics. One of the areas in which supply chains can address carbon emissions is in the transport of goods. One factor that deters sustainability in 3PL is trucks not being loaded to their full capacity.

In fact, our own studies have shown that up to 14% more volume can be loaded into a truck by utilizing key data that consider size and weight of parcels, creates the most efficient delivery route and considers other variables such as perishability.  Clearly, such sustainability initiatives have the potential to lower costs as well.

Caution: Hazardous Materials

There is yet another issue that is becoming more urgent and that is the prevalence of hazardous materials in the supply chain. First, it is necessary to define hazardous materials. These are substances or materials that the U.S. Secretary of Transportation has determined are “capable of posing an unreasonable risk to health, safety and property when transported in commerce.”

These materials include hazardous substances and wastes, marine pollutants, elevated-temperature materials, and other materials designated by federal Hazardous Materials Regulations.

In supply chain operations, the Federal Aviation Administration (FAA) requires these items to have “Hazardous Material” markings and/or labels. There are significant financial penalties for incorrect shipping identification, including accruing fines that can amount to more than $78,000 per instance.

Among the many items on the FAA’s list are the lithium-ion batteries used in many consumer products, each of which require the special markings and/or labels and have their own specific requirements for placement in cargo. Sorting solutions that use digital product identities currently exist to alert shippers where certain items, such as these batteries, should and should not be placed.

The importance of data in logistics will only increase over time. Deploying RFID intelligent label solutions at the source of an item will carry it safely, sustainably and quickly through all of the touchpoints along the supply chain—and beyond. The future of a data-enabled logistics eco-system is here. 

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Michael Kaufmann is director, Market Development, Logistics with Avery Dennison. The company recently launched its the atma.io connected product cloud platform that gives unique digital IDs to physical objects for end-to-end tracking from the source to the customer and even beyond to take part in the circular economy. 

isocyanate
Archives, Global Trade Daily, Imports/Exports, News

Chinese Isocyanate Exports Skyrocket Due to Booming Demand from Brazil, Russia and Peru

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

China strengthens its leadership in global isocyanate exports. In 2020, Chinese supplies abroad grew by +20.4% y-o-y to $716M with rising purchases from Brazil, Russia, Peru, Viet Nam and India. In physical terms, Chinese exports rose by +38% y-o-y to 376K tonnes. Brazil, Viet Nam and Taiwan constitute the largest importers of isocyanates from China. Among the leading importing countries, Brazil featured the highest spike in purchases of Chinese isocyanates, boosting the imports by $45M. The average export price for isocyanates from China decreased by -13% y-o-y to $1,905 per tonne in 2020. 

Chinese Isocyanate Exports by Country

China leads in global isocyanate exports. In 2020, Chinese supplies constituted 19.6% of the total isocyanate volume exported worldwide.

In 2020, exports of isocyanates from China skyrocketed to 376K tonnes, increasing by +38% against the year before. In value terms, isocyanates exports surged by +20.4% y-o-y to $716M (IndexBox estimates) in 2020.

Brazil (46K tonnes), Viet Nam (44K tonnes) and Taiwan (Chinese) (28K tonnes) were the main destinations of isocyanates exports from China, with a combined 31% share of total exports. India, Indonesia, Pakistan, the U.S., Russia, Australia, the Philippines, South Korea, Peru and Singapore lagged somewhat behind, comprising a further 33%.

In value terms, the largest markets for isocyanates exported from China were Brazil ($76M), Viet Nam ($70M) and India ($57M), together comprising 28% of total exports. Taiwan (Chinese), the U.S., South Korea, Pakistan, Russia, Indonesia, the Philippines, Peru, Singapore and Australia lagged somewhat behind, accounting for a further 35%.

In 2020, the increased supplies to Brazil, Russia, Peru, Viet Nam and India provided most of the increment in Chinese exports. Brazilian isocyanate purchases spiked by $45M against the previous year. Russia ramped up its imports by $20M. The supplies to Peru, Viet Nam and India grew by $13M tonnes, $9M and $8M, respectively.

In 2020, the average export price for isocyanates from China amounted to $1,905 per tonne, declining by -13.1% against the previous year. There were significant differences in the average prices for the major export markets. In 2020, the country with the highest price was South Korea ($3,402 per tonne), while the average price for exports to Australia ($1,295 per tonne) was amongst the lowest. In 2020, the most notable growth rate in terms of prices was recorded for supplies to India, while the prices for the other major destinations experienced more modest paces of growth.

Source: IndexBox Platform

Ro-Ro
Archives, Global Logistics, Global Trade Daily, Ocean Ports

HOW TO PROMOTE HEALTH AND REDUCE HAZARDS IN RO-RO TERMINALS

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When it comes to the health and safety of your personnel, nothing should fall through the cracks. The port industry is no exception to this: If you are currently running roll-on and roll-off operations—from ports to terminals to vessels—you need to be mindful of the safety best practices round-the-clock.

Workplaces need to be free from accidents, injuries, and fatalities to optimally fulfill their operations. In which case, ro-ro operators are responsible for complying with safety rules that protect crewmembers, stevedores, longshoremen, and office-based employees. 

What Can Contribute to Ro-Ro Accidents?

There are several factors to watch out for when implementing safety hazards in ro-ro. The following are based on the guidelines set by the Occupational Health and Safety Administration (OHSA):

1. Lack of training. The inability of employees to perform their duties due to lack of training can be detrimental to worker safety. Without proper training in the field, serious injuries can occur to the employee and/or those around them.

2. Fatigue. Being overworked is common in the port industry because the operations are non-stop. Being overfatigued makes it difficult for any crew member to stay focused on the job and have the energy to perform at their best.

3. Inadequate traffic controls. Managing automobiles coming in and out of the vessel can be hazardous without a proper traffic control system in place. Arrangements should be made to ensure everyone’s safety, such as creating clearly marked walkways or putting stoplights to manage traffic.

4. Material failures. Worn-out machinery is prone to accidents. Some old systems may malfunction in the middle of high-intensity activities.

5. Unsafe walking surfaces. Tripping hazards are common in cargo holds. Working areas must be free from debris and lashing points, or at the very least, there should be signages that alert workers if they are in unsafe working areas.

6. Inadequate ventilation. Internal combustion engine-driven ships must have proper ventilation around-the-clock. If left unattended, this could exceed the allowable limit of carbon monoxide concentrations.

7. Improper use of—or failure to use—personal protective equipment. Protective equipment exists to keep hazards from inflicting further injuries, especially burns or electrocution. Protective equipment such as chemical hood respiratory masks also keep you from inhaling harmful chemicals.

How Ro-Ro Operators Can Promote Health and Safety

As the port industry continues to advance, changes have introduced new hazards. The occupation taken upon by port workers has very high accident rates, so doing at least the bare minimum health and safety protocols will go a long way in mitigating risks. 

That said, each ro-ro operator should be able to develop, manage and implement working initiatives that promote the safety of its workers no matter what circumstances they are in. Here are a few general principles to follow.

1. Design a protocol that prevents your worker from handling crucial tasks alone. Accidents can happen anytime, especially during critical activities. If you have enough manpower to handle port activities, make sure that everyone has an accountability partner. But in circumstances where only one person can do the job, make sure that there is good communication with a party chief or anyone within the port to check on your worker’s safety.

2. Set a working budget for protective gear and other safety materials. Estimate your budget allocation for protective gear, warning signages, alert systems and other precautionary items to protect your workers during operations. Set aside a budget for testing equipment as well. It’s helpful to use expense report software to help you manage and track costs, ensuring that all crucial gears are purchased first.  In addition, include a budget for repairs and inventory. 

3. Make sure air flows properly. Adequate ventilation ensures that port workers have access to clean and sustainable air while on deck. According to the International Labour Force (ILF) in Geneva: “When internal combustion engines exhaust into a hold, intermediate deck or any other compartment, the employer must ensure that the atmosphere is tested as frequently as needed to provide carbon monoxide concentrations from exceeding allowable limits.”

Tests should be made regularly to ensure that the area is conducive for workers to perform their duties in without worrying about inhaling harmful chemicals. Likewise, the ILF mentioned that managers should ensure that no papers are on the loose and are properly stored in a secure and organized fashion. Papers tend to be sucked into the exhaust ventilation system, which could block airflow.

4. Make safety protocols visible. While most safety protocols are common sense, some people can forget them or not be trained in performing them properly. Make all your safety efforts obvious to port workers so they have reference materials when they need them most. For example, print out catalogs that tell them a step-by-step process on how to put out a fire in case it happens.

All signage should be clearly displayed throughout the site, whether on the ship or at the port. This should include a 24-hour emergency hotline as well as a map to the nearest clinic, hospital, fire station or police department. Entry and exit points, first aid kits and other emergency equipment should also have signage so workers know where to find what they need.

5. Be mindful of vehicle stowage and lashing or unlashing. Make sure that all vehicles, trailers and other automobiles are secured before taking off. The best practice is to secure one vehicle before another is positioned behind it. Also, lashers should have their own lashing points, both on the automobile and the ship.

6. Beware of slips and falls. Onboarding the ship is hazardous due to inadequate lighting, frequent weather changes and fluctuating water conditions that can make the deck very slippery. Make sure to put clear warning signages in areas that are prone to slips and falls, and make sure that these are well-lit. Likewise, prepare an on-site emergency plan that outlines clear instructions on what workers need to do in case of a fall.

7. Double-check machinery before sailing off. For safety purposes, make sure that you have experts inspect the machinery, the schedules of the workers, the first-aid kits, and other equipment. Check if there are possible oil spillages and if so, avoid all contact unless they are deemed safe. Note that chemicals release toxic fumes that may cause injuries or even start a fire.

Prioritize Safety First at All Times

These are some of the most basic health and safety practices you can do in your ro-ro operations, but they are not intended to replace any national regulations. Rather, they should help give you a better idea of where to start improving your organization’s protocols.

toothpaste
Archives, Global Trade Daily, Imports/Exports, News

Despite Global Toothpaste Trade Slows Down, China Boosts Its Exports

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IndexBox has just published a new report: ‘World – Toothpaste, Denture Cleaners And Other Dentifrices – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

Global toothpaste imports reduced modestly to $4.1B in 2020. The U.S., Russia, and the UK constitute the largest dentifrice importers worldwide, while China leads global exports. China managed to increase its exports both in physical and value terms last year despite the drop in global trade. Russia remains the largest importer of toothpaste from China, accounting for nearly 14% of Chinese exports.

Global Toothpaste Imports by Country

Global toothpaste imports shrank to 928K tonnes in 2020, waning by -2% compared with the year before. In value terms, toothpaste imports reduced modestly to $4.1B (IndexBox estimates) in 2020.

The countries with the highest levels of toothpaste imports in 2020 were the U.S. (53K tonnes), Russia (46K tonnes), the UK (39K tonnes), Germany (36K tonnes), Canada (29K tonnes), Italy (28K tonnes), France (27K tonnes), China (27K tonnes), Malaysia (26K tonnes), Japan (26K tonnes), Poland (24K tonnes) and Hong Kong SAR (23K tonnes), together resulting at 41% of total import. The Netherlands (22K tonnes) followed a long way behind the leaders.

In value terms, the largest toothpaste importing markets worldwide were China ($223M), the U.S. ($200M) and Canada ($181M), with a combined 15% share of global imports. Germany, the UK, France, Russia, the Netherlands, Poland, Italy, Malaysia, Hong Kong SAR and Japan lagged somewhat behind, together accounting for a further 29%. Malaysia emerged as the fastest-growing importer of dentifrices in 2020, ramping up the supplies from $95M to $101M over the last year.

The average toothpaste import price stood at $4,418 per tonne in 2020, remaining relatively unchanged against the previous year. There were significant differences in the average prices amongst the major importing countries. In 2020, the country with the highest price was China, while Japan was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Germany, while the other global leaders experienced more modest paces of growth.

World’s Largest Toothpaste Exporters

In 2020, China (213K tonnes), distantly followed by Poland (95K tonnes), Thailand (68K tonnes), Slovakia (67K tonnes), Germany (66K tonnes) and the UK (43K tonnes) represented the main exporters of toothpaste, denture cleaners and other dentifrices, together constituting 62% of total exports. Mexico (34K tonnes), France (25K tonnes), the U.S. (23K tonnes), India (23K tonnes), Guatemala (15K tonnes) and Viet Nam (14K tonnes) took a relatively small share of total exports.

In value terms, the largest toothpaste supplying countries worldwide were China ($415M), Germany ($385M) and Poland ($370M), together accounting for 31% of global exports. These countries were followed by Slovakia, the U.S., Thailand, the UK, Mexico, France, India, Guatemala and Viet Nam, which together accounted for a further 39%.

Despite last year drop in global toothpaste imports, China exceeded to boost its exports by +9.3 y-o-y in physical terms and by +5.7% y-o-y in value terms. Russia became the key destination for toothpaste exported from China, accounting for nearly 14% of Chinese exports.

Source: IndexBox Platform

supply chain risk
Archives, Global Logistics, Global Trade Daily, International Trade

Integrating Risk Management Into Supply Chains: 5 Points to Cover

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Risk management is central to running any business, but it’s especially important for supply chains. Disruptions in the supply chain have far-reaching ripple effects, as the COVID-19 pandemic has made painfully evident. With logistics serving as the backbone of virtually every other operation, risks here are risks everywhere.

Supply chains must identify, document and respond to all potential dangers to maximize efficiency and resiliency. However, while many organizations are aware of this need, fewer understand how to implement proper risk management.

Why Supply Chains Need Better Risk Management

According to a PWC survey, 60% of supply chains pay only marginal attention to risk reduction processes. The study also revealed that most of these companies focus on maximizing profit, minimizing costs or maintaining service levels. Ironically, had they prioritized risk management, they’d be better equipped to meet those goals in the face of disruption.

Widespread supply chain issues amid the COVID-19 pandemic further illustrate the subpar state of risk management. Early in the outbreak, 75% of U.S. companies saw capacity disruptions from the pandemic, and many continued to face similar challenges throughout the year. The world’s supply chains were clearly unprepared to handle these risks.

Understanding the importance of risk management is the first step towards improvement. As supply chain managers start to create a risk management plan, here are five points to cover.

1. Identify and Organize Risks

Risk management in any operation begins with identifying the risks an organization faces. These can be internal, like poor user behavior leading to a data breach, or external, like a natural disaster. This may also take careful analysis, as some risks, such as changes in customer preferences, may not come to mind immediately.

Supply chain managers should break down every node and link to find risks. When recording these, it’s also crucial to determine their potential impact on the company, which is often more substantial than initially evident. For example, worker’s compensation claims can incur ongoing care expenses and disability payments on top of the original cost of care.

After compiling a list of risks and their potential impacts, supply chains should prioritize them. Weigh each hazard according to its likelihood and the size of its consequences. The most likely and most disruptive deserve the most attention in planning to prevent and mitigate them.

2. Create Response Plans for Known Risks

This organized list represents a supply chain’s known risks. These are the things that a company can predict and quantify, and as such, managers can create a response plan for them. Businesses may not be able to create a detailed plan for every item, but they should for at least the most threatening eventualities.

Some hazards don’t require extensive planning and preparation. For example, if a truck battery dies, drivers can start it without jumper cables if need be to take it to a repair shop. Even though the solution here is fairly straightforward, businesses should still write down what to do to ensure quick responses.

Other events need a more detailed and lengthy response plan. A supply shortage from an overseas supplier, for example, may require backup sources, a transition plan and steps to mitigate customer reactions. Creating these plans can take tremendous effort, but emergency responses will be slow and ineffective without them.

3. Ensure Flexibility for Unknown Risks

Of course, supply chain managers can’t predict every possible eventuality. In fact, unknown risks like the COVID-19 pandemic can be the most disruptive because businesses don’t have a specific action plan for them. While supply chains can’t predict the details of these events, they can prepare for them.

The key to preparing for unknown risks is to ensure flexibility. When a supply chain can’t predict a disruption, it must be able to adapt to it in the moment. If the chain is flexible by design, it can adapt more easily, minimizing the effects of unforeseen events.

Segment, stock and plan (SSP) strategies can reduce part shortages by 50 to 90%, helping supply chains become more flexible. Supply chains should also consider distributed sourcing, which mitigates the impact of a disruption in one location. Creating more transparency through internet of things (IoT) technology and data analytics will also help.

4. Build a Risk-Aware Culture

One easily overlookable point of supply chain risk management is cultivating a risk-aware culture. Supply chain managers can’t expect to discover every potential disruption on their own, much less fully understand their impact. Employees throughout the supply chain may have a more personal understanding of these things, making them indispensable assets.

Just as effective cybersecurity involves all employees, so does the rest of risk management. All workers should be able to report risks they notice, requiring easy and open communication tools. Similarly, management must be open to change and ensure employees that bad news is a welcome alert, not something to punish.

Some supply chains may even consider rewarding employees whose insights lead to meaningful risk management improvements. When everyone can report and discuss potential hazards, supply chains can get a more comprehensive picture of their risk environment. This communication will also improve flexibility for unknown risks.

5. Monitor and Review Risks

Finally, supply chains must understand that risk management is an ongoing process. Some experts claim that constant monitoring is the best way to strengthen the supply chain, as it enables quick, effective responses. The first step here is expanding visibility through data collection and reporting.

Regular reports from all supply chain nodes provide an updated picture of a supply chain’s risk environment. Similarly, IoT tracking and data analytics can enable real-time visibility across an organization and help predict incoming changes. When relying on data analytics, supply chains must ensure they’re gathering extensive, high-quality data, as poor or insufficient datasets can be misleading.

Monitoring this data to predict incoming disruptions is only part of the ongoing risk management process. Supply chains must also periodically review their risk management framework as their situation changes. What’s most threatening today may not be tomorrow, so these plans should evolve over time.

Risk Management Is Crucial for Supply Chains Today

The sheer size and complexity of supply chains today make risk management essential. Disruptions can come from anywhere and have far-reaching consequences if these organizations don’t prepare to counteract them.

As supply chain managers tackle their risk management framework, they must be sure to cover these five points. If not, they could fall short when an emergency arises. By contrast, following these steps can help them ensure ongoing efficiency and minimal disruption in the face of adversity.

ether imports
Archives, Global Trade Daily, Imports/Exports, News

China’s Ether Imports Soar to $1.3B

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

China’s import volume of ethers jumped from 1.2M tonnes in 2019 to 2M tonnes in 2020. In value terms, imports reached $1.3B. Saudi Arabia, Taiwan and Qatar dominate the Chinese imports, supplying 55% of the total volume. Last year, all these three countries ramped up their ether exports to China significantly. The average ether import price stood at $664 per tonne in 2020, dropping by -31.3% y-o-y.

China’s Ether Imports by Country

In 2020, the volume of ethers imported into China surged to 2M tonnes, increasing by +58% compared with the year before. In value terms, ether imports rose by +8.7% to $1.3B (IndexBox estimates) in 2020.

In 2020, Saudi Arabia (654K tonnes) constituted the largest ether supplier to China, accounting for a 33% share of total imports. Moreover, ether imports from Saudi Arabia exceeded the figures recorded by the second-largest supplier, Taiwan (Chinese) (209K tonnes), threefold. Qatar (199K tonnes) occupied the third position in this ranking, with a 10% share.

In 2020, Saudi Arabia increased exports to China by +38.8% y-o-y. Chinese ether purchases from Taiwan rose by +15.5% y-o-y, while Qatar’s supplies to China grew from 86K tonnes in 2019 to 199K tonnes in 2020.

In value terms, Saudi Arabia ($328M) constituted the largest ether supplier to China, comprising 25% of total imports. The second position in the ranking was occupied by Taiwan (Chinese) ($113M), with an 8.6% share of total imports. It was followed by South Korea, with a 7.4% share.

The average ether import price stood at $664 per tonne in 2020, reducing by -31.3% against the previous year. Prices varied noticeably by the country of origin; the country with the highest price was India, while the price for the United Arab Emirates was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by South Korea, while the prices for the other major suppliers experienced a decline.

Source: IndexBox Platform

DTC
Archives, Global Logistics, Global Trade Daily

4 Ways DTC Brands Can Beat Supply Chain Logjams

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With the holidays fast approaching, global supply chain disruptions are threatening to cast a shadow over the peak shopping season for both brands and consumers. COVID-19 related shutdowns, production delays, rising materials costs, labor scarcity, shipping container shortages, and port congestion could all leave retailers short of products to sell, and consumers without gifts to give.

That’s troubling for both digital and traditional retailers who rely on final-quarter sales to drive their revenues. For direct-to-consumer merchants, though, it isn’t all bad news. Despite the challenges, direct-to-consumer merchants have a real opportunity to leverage their brand equity, weather the storm, and come out ahead by capitalizing on supply chain disruptions this holiday season.

That’s partly because DTC sellers have less risk exposure than marketplace merchants or real-world retailers. More than half of Amazon’s sellers, for instance, are now based in China, meaning the marketplace could be especially hard-hit. Besides global shipping issues, China is also facing widespread power shortages that could curtail manufacturing operations and leave Amazon facing tremendous shortfalls in inventory — both for Chinese sellers and for U.S. sellers that import Chinese-made products into Amazon’s FBA network.

Traditional physical retailers face similar challenges. Their geographical footprint requires a multiple-step distribution process, creating greater costs, slowing down delivery times, and heightening the potential impact of logistical logjams and labor shortages. Full-truckload shipping is especially tough, with drivers in such high demand that high schools are now training teenagers to drive 18-wheelers. Inventory shortages are also likely to be more noticeable in brick and mortar stores, where empty shelves will impact customer experience and could dissuade shoppers from entering stores in the first place.

By comparison, DTC dropshippers have a much simpler task. Like any ecommerce operation, DTC brands have significantly lower fixed operating costs than brick-and-mortar retailers. That’s especially significant when inventory runs low: if nobody has products to sell, it’s far better to be on the hook for small, manageable hosting costs than to be stuck paying a sky-high commercial lease.

Better yet, DTC brands don’t just have lower costs and less risk exposure — they also have more control over the customer experience. While marketplace sellers have little option other than to simply remove listings for out-of-stock products, and real-world retailers are left with bare shelves, DTC brands can respond more creatively — updating their websites to guide shoppers to available products, say, or reducing SKU count to create a more focused browsing experience.

This agility, combined with deeper brand equity and a more loyal fanbase, gives DTC brands a path to generating revenue and deepening customer relationships even in the face of product shortages. The best approach will vary from brand to brand, but a few key strategies include:

1. Transparency. 

Be honest with your customers. Many will have read about global supply chain issues, but they may not be aware of how acute they are or how they are impacting your brand. While consumers will get frustrated by marketplace sellers or real-world retailers that don’t have the products they’re seeking, they will tend to be more sympathetic toward DTC brands that communicate about the challenges they’re facing in purposeful and honest ways.

Start by reaching out via your customer email list — an asset most marketplace sellers and real-world retailers lack, or fail to actively maintain — and follow up with a posting on your website. Strike a forthcoming and optimistic tone, and avoid defensiveness, and you’ll find your transparency will increase your credibility with your customers.

2. Assortment 

Because DTC brands often have lower SKU counts than other retailers, the impact of a single product being out of stock can be disproportionately large. To combat this, merchants should leverage their brand equity and promote available product-adjacent and brand-extension items, such as branded merchandise or related products and accessories.

Taken to excess, this could dilute your brand — but executed tastefully and in a way that’s still aligned with your core brand, it can be an effective strategy. Bringing new temporary products to market requires some additional research and investment, but it’s also an opportunity to learn more about your customers, and potentially identify new SKUs to incorporate into your permanent product lineup.

3. Promotions

Given the likelihood of shortages and delays, try to drive engagement by running one or more promotions. Easy options include gift cards and credits, discounts for late delivery, and freebies such as accessories and merchandise. You could also offer free gift-wrapping or small personal touches such as notes of thanks to customers whose gifts arrive later than expected.

The key is to offset late delivery or other inconveniences with an elevated experience — something that marketplace merchants simply can’t offer, but that can be a great option for DTC brands shipping high-value, high-demand items.

4. Pricing 

When supply issues cause order volumes to drop or COGS to rise, the easiest way to make it up is by increasing prices. This is harder to do in marketplaces where competitors’ products are only a click away, or in brick and mortar settings where overhead is higher, but DTC  merchants with strong brand equity are better-placed to command higher prices this holiday season.

If you pursue this strategy, distribute increases across your best-selling items to reduce the effects of price elasticity, and be forthcoming about why prices are going up to preempt sticker shock and underscore your commitment to transparency. Alternatively, consider pursuing a more aggressive bundling and up-selling strategy, including tailored product recommendations and checkout up-selling, to increase AOV without increasing item price.

Control your destiny

Of course, how well these recommendations will work for you depends on your brand and your customer base. The most important thing, though, is to realize that as a direct-to-consumer brand you have far more control over your destiny than pure-play marketplace sellers and traditional retail brands.

If there was ever a time to use the strengths of the direct-to-consumer model to your advantage, it’s now. The global supply chain disruptions will undoubtedly affect sellers of all kinds this holiday season. That makes it all the more important to use every tool in your arsenal to face these challenges head on, and to leverage your brand equity to strengthen customer relationships and drive revenues in the months ahead.

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Remington Tonar is the Chief of Staff at Cart.com, the first end-to-end ecommerce solutions provider delivering a fully integrated and owned suite of software, expert services, and infrastructure to scale businesses online.

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Archives, Global Trade Daily, News

Chapman Freeborn Transports Six McDermott Aviation Bell 214B Helicopters from Greece to Australia on Volga-Dnepr’s AN124 Aircraft

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Chapman Freeborn and Volga-Dnepr Airlines have successfully collaborated with McDermott Aviation to demobilize helicopters from Greece. This most recent operation involved the repatriation of 6 McDermott Aviation Bell 214B helicopters to Australia on an AN124 aircraft.

The helicopters, totaling 35 tonnes, were flown individually into Athens Airport (ATH) by a single pilot who landed them on the tarmac prior to them being dismantled airside and exported as IATA-compliant air cargo. Usually, exports would take place within a cargo terminal, however, the Bell 214Bs’ exceptional versatility enables a level of mobility that is invaluable when dealing with complex load planning, airport coordination and constraints pertaining to the COVID-19 pandemic.

Loading onto the AN124 was executed with the help of Volga-Dnepr’s internal cranes, external equipment and the highly-specialized expertise of Volga-Dnepr and McDermott Aviation crew.

It is a rare occurrence and colossal achievement for 6 helicopters to be transported in one aircraft simultaneously, and the success of this charter required all parties involved to embrace this challenging and dynamic situation. The Chapman Freeborn team worked closely with experts including McDermott’s helicopter engineers, Volga-Dnepr’s loadmaster and other crew from both organizations comprising of 24 people in total, to seamlessly coordinate the operation.

The team also navigated complexities presented by COVID-19 to ensure PCR tests, vaccinations and COVID-safe procedures were all prioritized.

Thanks to the hard work and dedication of everyone involved, this important and rare charter meant that the 6 helicopters arrived punctually at Perth Airport (PER).

Michael Amson, Cargo & Passenger Charter Manager at Chapman Freeborn, said, “Without the support and cooperation of all parties involved in this extraordinary charter, it would not have been the success that it was. We would like to thank Volga-Dnepr Airlines, McDermott Aviation, DNATA, Cargo Connect, and Signature Flight Support for their combined efforts, which ultimately enabled the client to continue their vital work in the emergency services sector without interruption.”

Ekaterina Andreeva, Commercial Director, Volga-Dnepr Airlines, highlights: “Some people might say – it is impossible to transport six helicopters aboard one plane, but here is what distinguishes air cargo specialists – we make impossible possible by bringing together the right people at the right time armed with competences, experience and equipment. We would like to thank everyone involved in this mega-project which will go down into the history of our life-saving logistics operations”.

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Chapman Freeborn Group

Chapman Freeborn combines over 45 years of experience with unrivaled global coverage to meet the air charter requirements of customers 24 hours a day, 365 days a year.

The company’s diverse client base includes major corporations, governments, non-governmental organizations (NGOs) and relief agencies, as well as high net worth individuals (HNWIs) and prominent figures from the entertainment world.

Chapman Freeborn’s depth of aviation expertise includes managing passenger and cargo charter operations, aircraft leasing, humanitarian airlifts, and much more.

The group’s subsidiary companies include Chapman Freeborn OBC, Chapman Freeborn Flight Support, Intradco Global, Magma Aviation, and Arcus Air Logistics.

Part of the Avia Solutions Group

Chapman Freeborn is a family member of Avia Solutions Group, a leading global aerospace services group with almost 100 offices and production stations providing aviation services and solutions worldwide.

Avia Solutions Group unites a team of more than 7,000 professionals, providing state-of-the-art solutions to the aviation industry and beyond.

For more information about Avia Solutions Group, please visit www.aviasg.com.

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Archives, Global Logistics, Global Trade Daily, International Trade

Leveraging International Multimodal Transportation in the Face of Globalization

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Transportation activity has expanded considerably in recent years with the globalization of trade. However, in the face of accelerating flows of goods and passengers, supply chain players have had to review their supply strategies, especially in terms of demand and regulatory standards. In this context, multimodal transport is a sensible solution to meet consumer needs and solve the problem of network saturation. With new methods that move lines internationally and stimulate innovation in the field of logistics and transportation, we won’t complain!

The new challenges of international transport

The supply chain today is subject to multiple factors to be considered to propose the right transportation solutions. But what are the points that must be respected to meet the needs of consumers around the world?

New consumption patterns

Consumer trends observed around the world have a very significant impact on logistics services: diversity of consumption habits according to countries and areas of residence, changes in customer expectations at the point of sale, and new delivery requirements.

The end of the “one size fits all” era

Contrary to what we had thought in the past, globalization is no longer synonymous with standardization. The era of “one size fits all” is over. Consumption patterns vary greatly from one country to another: it would be dangerous to ignore them.

Export companies must be able to meet local requirements as precisely as possible. The key to international success now lies in the customization of the offer.

Variable customer profiles according to culture

To be successful at the international level, brands must deal with different consumption patterns according to cultural habits. Regional specificities must be considered in companies’ commercial strategies.

Although it is shared in Europe and the United States, the e-commerce trend is taking shape, for example, in totally different ways in different countries, especially when it comes to services. In China, companies are confronted with the needs of two main categories of consumers: city dwellers, who want quality and services, and rural dwellers, who buy products in bulk at low prices.

In the promising African market, professionals expect a lot from the implementation of banking services and infrastructures to catch up. As for the Middle East and North Africa group, they are ideally located at the crossroads of international highways. On the other hand, the political and social changes currently taking place in Libya, Syria and Yemen bode well for the future.

Increasing urbanization and demand diversification

Sociologically, the global trend is towards urbanization. According to a UN study published in May 2018 in New York, the world’s population living in urban areas is expected to increase from 55% in 2018 to 70% in 2050. Therefore, consumer expectations and needs are inevitably changing. Customers now prefer smaller stores, which in turn also have less storage space, and are demanding more and more services such as home delivery or click and collect.

While convenience shopping is becoming increasingly common online, customers also want a different experience at the point of sale. As a result, brands that once focused on low prices and self-service must now question everything. They must also adapt to a growing middle class whose needs, homogeneous in terms of basic offerings and services provided, are diversifying into products that offer better margins.

One of the main challenges of global transportation is undoubtedly the issue of delivery times. A major problem for Supply Chain players, penalized by infrastructure capacity problems and difficulties in finding labor.

To learn more, consult our TMS Product Sheet here!

Transport infrastructure capacity: a major challenge

Regardless of the mode of transport they use, all carriers face network congestion problems. Therefore, new solutions remain to be invented to develop transport modes, especially in terms of capacity.

Globalization and its limitations

Shipping, which covers more than 90% of world trade, is still the cheapest mode of transport today. But it is less and less responsive to the challenges of today’s trade. The consequences? A capacity crisis causing many delays with unavoidable negative impacts.

And the increase in the capacity of container ships does not change this, as it also limits the possibilities of accommodating cargo ships in ports. There are few infrastructures capable of accommodating large vessels and with sufficient resources to load and unload them.

Always cost-effective and flexible, road transport is the essential option for door-to-door deliveries. But the shortage of truck drivers in Europe and North America is limiting its development.
Rail transport is also reaching its limits, with heterogeneous infrastructures in Europe generating a high rate of damage. In fact, a global trade route war is currently being waged, with significant financial investments.

How to overcome the problem of road transport?

Different approaches are being explored to address the problems encountered in road transportation.

Investing in autonomous vehicles

Autonomous vehicles are undoubtedly the future of transportation, provided that regulations are changed and that this new mode of transportation is accepted by the population. Although the technology is almost ready, there are still some bottlenecks. As proof: in the absence of benefiting from a regulatory framework for non-polluting vehicles, Deret electric trucks were recently blocked at the entrance to Paris during the first days of alternating traffic.

Evolution of rail transport

The railroad began its offensive with the commissioning of a new rail route between China and the Netherlands. The first train carrying cargo containers arrived at the port of Rotterdam in 2015. It took only 18 days to complete the journey, compared to 44 days by sea.

The problems of punctuality and tracking have yet to be solved, but the rail industries are testing new technologies to reduce these risks. Like the partnership between IDEO (a subsidiary of ID Logistics) and Lille-based start-up Everysens to produce connected wagons integrating IoT sensors on behalf of Danone Eaux.

Consider alternative solutions

Other interesting solutions have been developed to address specific issues. Take Steve Jobs, for example, who invested $50 million in buying air cargo space to ensure delivery of his new translucent blue iMacs by Christmas.

The revolution is underway. International companies cannot ignore it: to think globally, they must empower themselves to act locally, according to the context and characteristics of the market.

Multimodal transport: A response adapted to consumer needs?

Global trade also means international sourcing, distance from production sites and mass flows of goods. These are all challenges in terms of logistics. To meet these needs, actors in the supply chain are increasingly using multimodal transport, which has many advantages.

A bit of history

A small leap in time. In the 1960s, the advent of the container was a real revolution in transportation. Thanks to this invention, it was possible to transport goods all over the world without breaking the cargo. This could be done by sea, air, rail, road or water. In this context, multimodal transport was able to take off.

Today, although globalization and the large production centers located in Asia have accelerated the development of maritime transport of goods, alternative means of transport are still necessary to reach the end consumer. Thus, today, transport is mainly overseas (by ship or plane), but road transport is essential when approaching ports and for home deliveries.

So, it is not only maritime freight transport that has benefited from internationalization: road transport and other available means have managed to develop in its wake. But in addition to the complementarity between maritime and road transport, other forms of multimodality have emerged. Take the example of Switzerland and Austria, which have developed rail highways to transport complete road units by train to improve regularity and limit pollution.

The advantages of multimodal transport

As an alternative to 100% road transport of goods, multimodal transport combines at least two different modes of transport, from the departure of production units to their arrival as close as possible to the final consumer. The transfer takes place without load breakage since the same loading unit (the container) remains the same for the entire duration of the transport of the goods.

Its many advantages justify the enthusiasm it generates in the supply chain:

1. Improved delivery times.
2. Increased security of the goods.
3. Optimization of costs related to the transport of consumer goods.
4. Improved load capacity, which is higher than that of road transport.
5. Greater respect for the environment.

Reconciling urban logistics and quality of life

Last mile delivery, which represents about 20% of freight transport costs, is the current challenge for logistics professionals. New organizational schemes that respond to the commercial strategies of brands and meet the urban and ecological policies implemented in the territories have not yet been found.  Multimodal transport could once again play a key role in this area. Proof of this is the multiplication of multimodal transport experiences and the structuring of shared logistics platforms in urban areas.

Some examples of multimodal procurement

Several brands have already taken the next step by focusing on new multimodal transport solutions. Monoprix, for example, has chosen to combine rail and road freight transport for its supplies within Paris.

From the departure of the warehouses to a logistics platform based in Bercy, goods are first transported by rail. The products are then transported as close as possible to consumers by road: gas-powered trucks are used to supply the points of sale, in addition to electric vehicles for home deliveries.

Thanks to a partnership with XPO Logistics, Ports of Paris and Voies Navigables de France, the Franprix brand (Casino group) has entered the urban waterway shipping market.

Urban centers are multiplying

Logistics is not lagging in terms of multimodal sourcing: several initiatives underway in Lille, Saint-Etienne and Paris show a strong will to offer innovative solutions.

A multimodal urban distribution center opened in the port of Lille in 2015, for example, makes it possible to consolidate upstream transport and group deliveries in the city center. In the same spirit, the Saint-Etienne metropolitan area is a laboratory for urban delivery with the pooling of its goods distribution platform, transported to the city by a fleet of electric vehicles.

In Paris, the Chapelle International project is also proving to be a bold challenge in terms of urban logistics. Its objective: to reintroduce rail transport in the capital by building a 45,000 m2 logistics hotel on a former railway wasteland located at the Porte de la Chapelle in the 18th arrondissement.

Faced with the many challenges posed by the globalization of trade, multimodal transport now seems to be a solution of choice. Experiments are multiplying in this field, each one more innovative than the other. It remains to find the right level of regulation and innovative capacity for supply chain players to effectively implement the change.

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. From Warehouse Management Systems (WMS) and Transportation Management Systems (TMS) to Manufacturing Execution Systems (MES) and more, software platforms can deliver a wide range of benefits that ultimately flow to the warehouse operator’s bottom line. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

This article originally appeared here. Republished with permission.