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Manufacturing Facility Tours as Excellent Marketing Tools

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Archives, Global Logistics, Global Trade Daily

Manufacturing Facility Tours as Excellent Marketing Tools

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Whether you organize them for customers or investors, company tours can be an excellent way to showcase your professionalism and establish a bond with your audience. Many business owners understand that now, gladly giving tours to all interested parties. However, even when they do, one area tends to often be avoided or overlooked — the manufacturing facility.

Now, that’s not too surprising. After all, manufacturing facilities are noisy, large, and these tours take lots of planning and preparation. Still, there is much to be gained from taking your investors and customers to your manufacturing facility. Let’s take a closer look.

How Manufacturing Facility Tours Work As Marketing Tools

It may come to you as a surprise to hear that most suppliers, customers, and investors appreciate manufacturing facility tours. They present a unique opportunity to see where your products are made, what the process looks like, and how you handle everything. In a way, touring your manufacturing facility can make your audience feel like they know and understand you better.

And do you know what marketing is all about? Well, building relationships and a sense of familiarity with the audience. Your manufacturing facility tour would serve this exact purpose, proving to be one of the best marketing tools at your disposal.

Just think about it — do you prefer to invest in or buy products that come from a source you know or to have faith in something you understand nothing about? Most people, probably including you, would agree with the former. The same goes for your investors, customers, and suppliers — they want to feel like they can trust you.

On top of that, a clean and efficient manufacturing facility can greatly improve your audience’s impression of your company. Investors will be more willing to invest when they see their money is going into something worthwhile. Similarly, customers will be more likely to stay loyal if they know you have nothing to hide.

What’s more, a successful tour itself is sure to be impressive. After all, if you manage to present and explain everything even in such a busy, noisy environment, you’ll prove that you’re professional and resourceful.

How to Organize a Tour in Your Manufacturing Facility

Now that you see the benefits of giving a tour of your manufacturing facility, the question is only how to successfully organize it. As we said, that’s not at all simple — all the noise in the factory is sure to make it more difficult to talk. Still, there are ways to overcome these problems and organize an excellent tour. And here is what they are:

Use a High Noise Headset

When touring a noisy manufacturing facility, you have only one option — to shout and hope everyone hears you. That, of course, isn’t the best solution since those members of the group who stand further away are almost guaranteed not to understand anything. Yet, for a long time, it seemed that there was no other way.

Things have changed now, though. Now you can get high noise headsets for your tours and hand them out before you enter the facility. Thanks to these, even when you speak in your normal voice, everyone in the group will hear you clearly.

Unsurprisingly, that already drastically improves the experience. First of all, you won’t have to shout and strain your voice, which will help you sound more confident and collected. Instead of worrying if people can hear you, simply speak as you practiced, and you’ll surely get your point across.

What’s more, your audience won’t have to strain to hear or fight for a spot closest to you. Instead, they can comfortably spread out and still listen to you speak. Thanks to the noise-canceling features of the headsets, they will surely hear your every word.

Don’t Restrict Your Audience’s Movements Entirely

Of course, letting the tour participants wander wherever they want is out of the question. Some areas are out of bounds, and that’s perfectly fine. However, you should allow them at least some degree of freedom to look around or even touch things. That way, they’ll stay interested in your presentation longer and remember it better.

So, before you start the tour, tell them where they can and can’t go and what they can and can’t touch. Then you can do your tour in peace as you walk around, without fear that someone will get hurt or break something.

Don’t Promote Your Brand Too Much

Your tour may serve as a marketing tool, but that doesn’t mean you have to promote your brand every chance you get. Such obvious advertising can be quite off-putting and may do more damage than good.

What you want to do instead is promote your company by giving interesting facts and information, and showing how things work. Explain what your business stands for and its mission, show your vision and focus on your relationships with customers and employees. That’s sure to be far more engaging and create an overall positive impression of your company.

In Conclusion

Ultimately, with a bit of work and planning, you should be able to set up a great tour for your customers and investors. Of course, a manufacturing facility tour is almost impossible to have without high noise headsets for your audience. You’ll have to provide those, but view them as an investment. After all, tours of this kind can only help elevate your company’s reputation.

__________________________________________________________________

Author: Rick Farrell, President, Plant-Tours.com

Rick is North America’s foremost expert in improving manufacturing group communication, education, training and group hospitality processes. He has over 40 years of group hospitality experience, most recently serving as President of Plant-Tours.com for the last 18 years.  He has provided consulting services with the majority of Fortune 500 industrial corporations improving group communication dynamics of all types in manufacturing environments. 

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Archives, Global Logistics, Global Trade Daily, International Trade

3 Reasons Why it’s Going to Take Longer to Unravel the Current Global Logistics Mess

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If you’re involved in global shipping or even a consumer who recently purchased furniture or other bulky items, you’re well aware of the sorry state of global logistics. The pandemic and its knock-on effects have created global shipping chaos and driven astronomical shipping costs. While we are all enduring the consequences, the big question now is when will global logistics return to normal? Will it happen after peak season this year? I am less optimistic about a quick turnaround. Here are three data points that highlight why I believe the current situation will drag on longer than anticipated.

Inventories are way down and retailers want to hold more of it in the future.

The pandemic created a unique situation. Manufacturing and distribution capacity declined, but consumer demand didn’t. Retailers have seen their inventories cut as consumers continue buying, but they cannot replenish their stocks. According to the US Census Bureau, the inventory to sales ratio is down more than 25% since the beginning of the pandemic (see Figure 1).

The chart also shows a general decline over 2 decades in the inventory to sales ratio, which is a testament to retailers and their logistics partner continually improving their supply chain performance. That trend is about to change as many retailers are deciding to hold more inventory as a hedge against greater supply chain uncertainty. So, what does that mean? Retailers will be buying more than what they need in the short-term to build their stocks to larger acceptable levels. This will continue to put more pressure on supply chains and logistics operations—not reduce it—even after the peak season ends this year.

Figure 1: Retail Inventory to Sales Ratio

Inflation is up, but still viewed as manageable and history says it can go higher before stunting demand.

The Federal Open Market Committee (the Fed) just released its revised forecast for inflation. The forecast did rise by 1% to 3.4% for the year; however, that is more than manageable and unlikely to suppress consumer demand as longer-term inflation is being forecasted at 2%. In addition, if inflation were to go higher, that wouldn’t necessarily mean that US import volumes would decline and take pressure off the current situation. The last time inflation breached 5%, as it did in May, was in August 2008 when it reached 5.8%. As you can see from the US maritime import chart (see Figure 2), import volumes continued to increase.

Figure 2: US Maritime Import Volume

Source: Descartes Datamyne

The economy continues to reopen and the Fed expects robust job creation through the fall. This is a good news/bad news story. As states continue to relax or eliminate COVID-19 related restrictions, parts of the economy such as restaurants, tourism and other service industries will return to more normal capacity, increasing demand for goods many of them import. The Fed is also predicting robust job growth into the fall. The continued opening up of business will drive job growth and consumer spending as those hit hardest by the pandemic have more cash to spend. Again, more pressure on global supply chains.

The protracted situation means that short-term plans that increase costs but get goods to market may make more sense than waiting for the global shipping situation to get better on its own. However, retailers and other importers should evaluate their supply chains now for the alternate sources and paths their goods take to get to market. This evaluation should take into account the impact that highly concentrated and congested trade lanes have on the risk to fulfilling customer demand. For example, the concentration of manufacturing in countries such as China and the use of ports like LA/Long Beach. We can see today the delays that are happening and it won’t take much to see additional delays at some level with disruptions in the future. Now is the time for importers to engineer the risk out of the supply chain.

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Archives, Global Trade Daily, News

Trends Shaping the Future of Electronics Manufacturing

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The electronic manufacturing industry is one of the fastest-growing industries globally and has brought about changes in both businesses and personal life. It is estimated that the industry grew in revenue to about $2.4 trillion in the year 2020.

However, the growth is about to experience a new shift with the introduction of emerging and barrier-breaking trends that will shift the running of businesses, homesteads, and how electronic manufacturing is run. Although some trends and practices have been in the industry for years with emerging modern improvements and growth in the technology world, so has electronic manufacturing. Some of these trends take this industry to a new level.

Take a look at some future trends to watch out for in the electronic manufacturing industry and better understand how these trends manage to take top spots in shaping and directing the growth of the electronic industry.

Trends shaping the future of electronic manufacturing include:

1. Internet of Things

This is the connection of everyday devices through the internet, allowing easy sharing and receiving information through electronic devices. Internet of Things (IoT) has increasingly been embraced in electronic manufacturing with more companies, leveraging the benefits from IoT to increase device efficiency, improve consumer safety and cut costs.

2. Use of Virtual Reality (VR) and Augmented Reality (AR)

By using virtual reality and augmented reality, manufacturers can design consumer-friendly products. Computer-aided designs have helped designers and manufacturers make accurate and timely changes to the products. Also, the use of VR and AR helps in designing and eliminates error and reduces inspection time as workers are better able to identify errors.

3. Use of 3-D Printing

A report by Smithers estimates an annual growth of 23% in the next decade in 3-D revenue. The report also shows the 3-D printing revenue growth is estimated to grow from $5.8 billion to about $55.8 billion by 2027.

The 3-D printing marketplace has a vast share around Western Europe and North America, where cutting-edge technology developers are pushing for increased mainstream use of 3D printing among technology companies.

Electronic manufacturing companies are capitalizing on their technological abilities and emerging trends. To ensure they remain competitive, it is important to work closely with equally fast emerging trends such as 3-D printing. 3-D printing developments are not only focused on the physical aspects but are also working on the design, the application, and the overall satisfaction of the end-user.

4. Big Data

Corporations worldwide have been exclusively using big data. Much of this was because it was expensive to small and medium-sized enterprises (SMEs). However, advancements in IoT and other cutting-edge technologies have turned the tables. Now, businesses of all sizes can draw information from multiple sources. This has made big data more valuable than it was.

Consequently, electronic manufacturers are applying the information they receive from big data in various productive ways. For example, they apply it to minimize production costs while raising profit margins and market share. This is guided by the willingness of managers to gain more understanding of their businesses. This helps them to overcome various issues while projecting and preventing future challenges.

5. Use of Industrial Robotics

For years, the automotive industry was the leading driver in the growth of industrial robotics. However, this has changed, and industrial robotics have been used in electronic manufacturing to perform several tasks in recent years.

The widespread use of industrial robots in the electronic industries led to substantial growth in industrial robotics use in 2016, where global sales increased by about 16%. This number is estimated to grow over the years, leading to an increase in the global market.

The use of robots in electronic manufacturing has allowed miniaturization and reshoring. Moving forward in innovations, design, and the business running, manufacturers across the board are looking for ways to increase efficiency. The use of robots has proven an essential tool.

Besides future technological trends, manufacturing companies also need to look at some of the business trends that will influence the success and running of their business. Some of the future business trends to look out for include:

6. Use of ERP Systems

To keep a company competitive, companies need to enforce enterprise resource planning (ERP). Though this trend has been in use for some years, some worthy mention benefits of embracing this trend when looking to expand the electronic manufacturing industry include:

With the use of the internet in all operations, it is now more critical for a business to use real-time information; enterprise resource planning helps companies optimize and automate new information fast and in real-time.

Owing to fast access to real-time information, companies can act fast and make accurate and quick decisions. The enterprise resource planning has been through growth stages that have allowed its efficiency. However, with the growth of the electronic industry, the same is expected with the enterprise resources system with technological advancements working towards increasing reliability and ease in running the business.

7. Shift from B2B to B2B2C

For many years electronic manufacturing companies operated using the business-to-business (B2B) approach. But with more manufacturing companies looking for ways to cut costs. Companies are now turning to the business-to-business-to-consumer approach (B2B2C).

With the use of the B2B2C approach, companies are now working towards eliminating intermediaries, which helps them reach the clients directly; as a result, it increases company profits and, in turn, reduces purchase costs. Additionally, the B2B2C approach enables the manufacturers to collect accurate customer data, improving customer satisfaction.

Why these Trends

While these trends may seem like ordinary technological advancements, they have several things in common that make them unique. In a world full of innovations, new designs, and a desire to be effective, it is essential to have the following attributes in mind.

Working on cost reduction, most of the resources and trends making waves and promising success, reduces costs. Cost reduction will be beneficial to the manufacturing companies and cut the cost to the consumers.

Product efficiency, electronic devices are part of the world and the introduction and use of the internet across the globe. It is essential for manufacturing companies to not only provide functional products but increase efficiency. For instance, with the use of the internet, everything in electronic manufacturing, people can now have smart homes and have actual time footage on their homes or even offices. This is possible due to the electronic manufacturing innovations.

These trends have proven to help manufacturing companies achieve product precision, which improves quality and reduces costs and error.

Waste reduction, amid the technological innovations and significant electronic developments, is essential for companies to also focus on. This is not only a great way to cut company costs but is also an excellent way for these companies to preserve the environment.

Bottom Line

More people embracing electronic devices in their homes, places of work, and running businesses. Manufacturing companies have a massive task in ensuring consumer satisfaction by focusing on high-end innovation and working closely with other technology sectors to ensure they are competitive and efficient.

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Linda Liu is the overseas marketing manager for MKTPCB, a leading PCB manufacturer that offers high-quality PCB products and services. Since 2012, she has established “first-of-its-kind” industry-changing and transformational businesses initiatives that increased revenue growth, brand exposure and market expansion for MKTPCB. Linda graduated from Western University with a bachelor’s degree in marketing.

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Archives, EU Trade, Global Trade Daily

Economic Recovery in Germany Marked with Fierce Rise in Inflation and a Stronger Green Transition

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When examining a recovery for the German economy as the world rebounds from the events of 2020, it’s important to realize that many sectors will continue to struggle throughout this year. Although the response from the government was fast and strong at the start of the pandemic, three main challenges remain top of mind for Germany this year throughout the recovery process as businesses adapt to a withdrawal of government support and the economy reopens. Many of them took up debt last year and are more vulnerable than before the start of the pandemic. In addition, supply bottlenecks across several sectors will affect exports, and lastly, they will face rising inflation, which is forecast to rise to 4% later this year.

At the onset of the pandemic, the German government provided an immediate response to support businesses, which led to a sense of stability for most of 2020 and the beginning of 2021. Now, as vaccinations progress and cases go down, the government will evaluate its existing stimulus measures and begin to pull back on fiscal support. The German government’s generous support has already provided for approximately $400 billion in direct support (11% of GDP), higher than most countries in Western Europe. Much of what happens next will be decided during the September parliamentary elections but in the meantime, businesses are preparing to say goodbye to the generous financial aid provided.

One government support staying in place is the suspension of the Debt Brake Rule. This rule – which limits the federal deficit to 0.35% of economic output per year, by adding an investment rule to secure enough public money for climate protection, infrastructure, health care and education– has recently been officially suspended for 2022. Not only does this temporary suspension this rule ease the burden on German businesses and the wider economy, but helps transatlantic relations with the U.S., which has been running a trade deficit with Germany. The suspension of the rule has and will continue to help with the U. S’s high current account deficit with Germany, however, it is only predicted to be suspended through 2022.

Businesses globally are struggling with some of the worst supply chain issues to date. This is hitting German sectors particularly hard, as there is a national shortage of shipping containers and semiconductor chips. Supply chain issues are expected to be mainly short-term for the manufacturing industry, especially the automotive industry, and opportunity lies ahead in the medium-to-long term as demand grows for German exports in China and the U.S. The need to spend more on sustainability is the broad consensus among the German population and the main political parties and it is predicted the green party will be a strong contender in the September election. Demand for electric cars is growing, and the Germany car industry was able to play into this trend pretty well, helped by their strong financial position.

There are business opportunities in Germany for companies providing products or services for digitalization and sustainability, as Germany is striving to catch up in the digitalization process.

In general, the German economy is in good shape. While many businesses adapt as the stimulus pulls back, a few sectors will be struggling – such as textile and retail, where margins were already thin prior to the pandemic. The metal and steel industries are generally in good condition, with some upset from strong competition and small profit margins.

Keeping in mind that despite stimulus and support, businesses operating in Germany will have to protect their trade receivables in anticipation of the economic changes this year will bring.

________________________________________________________________

Theo Smid is a Senior Economist for Atradius based in the Netherlands.

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Archives, Global Trade Daily, News

Biogas Specialist WELTEC BIOPOWER celebrates Company Anniversary

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Germany is the global trailblazer in the field of renewable energies and the WELTEC group is one of the pioneers in this industry. Since the founding date on July 1, 2001, WELTEC BIOPOWER has focused and continued to develop from an AD plant manufacturer to an all-round specialist along the entire biogas value chain.

To this day, the group has been in the hands of a small group of powerful shareholders and has refrained from involving investors to this day. Not least on the basis of this stable ownership structure, the WELTEC Group has become one of the world’s leading providers for the construction and operation of biogas and biomethane/ RNG plants. The results and projects of the last two decades around the globe speak for themselves: To date, the company, which currently employs around 120 people, has planned and installed more than 350 stainless steel energy systems on 5 continents in 25 countries. In addition, the group has invested a three-digit million Euro amount in its own plant.

Thanks to an international diversification strategy and the high product and plant quality, WELTEC has also mastered challenging phases, such as the successful turnaround in the difficult years 2014 and 2015. In 2012 and 2014, the amendment of the German Renewable Energy Law (EEG) resulted in hard reductions of the feed-in tariffs, which lead to a massive decline in biogas plant construction. Not all market players survived this time. But even under these tougher framework conditions, WELTEC BIOPOWER was able to maintain and even expand its market position.

Jens Albartus, you have been the Managing Director of WELTEC BIOPOWER since July 2006. So you have been in charge of the group for most of the company’s 20-year history. What is the success story of WELTEC?

We have always remained faithful to our mission “organic energy worldwide” and to our corporate values over the years. Besides we offer technologies of very high quality from a single source. Another important success factor is that we design the main components of our plants ourselves and have them manufactured in our region. With this, we can guarantee a very high quality. We take the needs and framework conditions of our customers very seriously. Each plant is consistently designed for the requirements of our customers. Furthermore, our low staff turnover should also be mentioned. Many colleagues have been employed at WELTEC for over ten years. We stand out of the industry for twenty years due to the sum of this mixture of expertise, individuality, quality, resources and strategy.

That shows continuity. To what extent did you have to adapt or change in order to remain successful?

We have developed our products with a high quality right from the start. But we have steadily expanded our portfolio over time and adapted it to the market. Therefore we have been able to develop extremely successfully over the past twenty years – from a pure plant planner and builder to a biogas specialist along the entire value chain. Due to the expansion of our range of services with maintenance, permanent or interim plant operation, heat contracting and the production of biomethane as a fuel, our customer structure has also changed significantly. As a plant manufacturer and service provider, we work for companies in the food, waste, sewage and agricultural sectors. But we also supply horticultural companies and the real estate sector with sustainable heat. Recently added customers and partners are from the fuel industry. Heavy-duty vehicles and trucks are already driving with our biomethane as fuel.

Which projects of the last twenty years do you particularly remember?

In 2008 we built in Könnern, Saxony-Anhalt, what was then the world’s largest biomethane plant and have been operating it ever since. The project was and is an important milestone for our company group. We are all very satisfied with the successful construction and operation of this AD plant. But international pioneering projects such as the Waste-to-Energy plant for a large Australian water supplier near Melbourne and the biogas plant for the milk powder producer EDL in Uruguay are projects that I remember fondly. This plant has been providing a thermal output of six megawatts since 2018. The South Americans only use residual materials such as cattle manure and feed leftovers from 14,000 dairy cows and generate 30,000 standard cubic meters of biogas every day. This covers a third of the high heat demand of their own dairy. Just like the plant in Könnern, we have a high industrial scale there. This standard was also the reason for EDL to choose WELTEC. We’ve built the plant in Uruguay as a turnkey contractor, including all auxiliary works. After one year of construction, we could hand over the EPC project to the customer.

How do you build the bridge between this successful past and the future?

More than 350 WELTEC plants, around 70 percent of which are running successfully abroad, now testify to our remarkable story. In many countries we had the opportunity to do pioneering work in the field of biogas. For the future, it is important to remain to our mission and to continue the success story with our strengths as is currently happening. There is a huge potential of organic residues everywhere that can be converted efficiently and decentrally into green energy with the help of our process technology. So right now we have construction sites in Japan, Northern Ireland and Spain. And the saving of carbon emissions is an important topic worldwide. This also includes the use of biogas in the mobility sector. Therefore I am looking forward to the next 20 years very optimistically and with great anticipation. Now things really get going!

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Archives, Global Trade Daily, Imports/Exports

Israel: Transport Costs and Customs Duty – It’s On You

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In the past year, sea freight prices have risen sharply, an increase that has not been remembered for many years.

Thus, according to various publications, about a year ago, renting a container for sea transportation from China to Israel, costs about $2,000, and today, the same transportation costs about $15,000.

According to publications, the reasons for this significant increase are due to the COVID-19 crisis, global shortages of ships, declining competition in the field, and containers of contagious demand. In addition, there is a “Made of Israel” reason, due to the congestion at ports in Israel, there are ships that prefer not to dock in Israel, and the number of ships that can dock in Israel is even smaller[1].

Apart from the increase in transportation costs, which is expected to lead to a wave of price increases in the sale of products in Israel, there is another parameter that is slightly pushed to the margins. That is the increase in the value of goods for customs purposes, due to rising transportation prices. This increase in prices leads to further collection of customs duties, purchase tax, and import taxes, due to the increase in value.

As I will present in this review, in my opinion – Israeli law already allows the state to facilitate importers at this point – and similar other facilitations have been made in the past. All that is required is the flexibility and activation of goodwill on the part of the state when interpreting the law.

How is the value of the goods determined for customs and import taxes in the State of Israel?

Section 132 (a) of the Israeli Customs Ordinance [new version], stipulates that the value of the transaction is: “the price paid or to be paid for the goods, when sold for export to Israel … plus the expenses and amounts specified in section 133 …”.

Section 133 of the Ordinance, which refers to “assists” to the transaction price for customs purposes, enumerates a large number of examples, one of which, relevant to its case, relates to transportation costs, and subscribes to section 133 (a)(5)(a) of the Ordinance, which relates to:

“The following costs involved in bringing the goods to the port of import or place of import – (a) The cost of transporting the goods to the port of import or place of import, excluding such costs incurred due to special circumstances beyond the control of the importer and the Director determining not to include them in the transaction; This includes types of goods, types of transportation and other services”.

And subsection 133 (a)(5)(c) – “The cost of insurance“.

That is, if we try to compare this to the terms of sale of Incoterms, it seems that the State of Israel has determined that the customs duty will be levied on the value of CIF (cost, insurance & freight), i.e. the value of the goods including transport and insurance.

How is the value determined for customs, worldwide?

It should be noted that there is no uniform rule in this matter.

Most countries in the world are members of the World Trade Organization (WTO) and the World Customs Organization (WCO), and by virtue of their membership, have signed an international agreement on the valuation of goods for customs purposes[2].

The agreement sets out a number of rules regarding the way goods are valued for customs purposes, but it does not stipulate any binding rules regarding transportation.

There are countries where the value on which the customs duty is imposed is FOB (free on board), that is, without the sea transport, and there are countries where the value on which the customs duty is imposed is CIF, including the transport.

For comparison, in the United States, a different method is used than in the State of Israel, and in the United States, customs duties are imposed on the value without sea transportation. Thus, the corresponding section in American law to section 132 of the Customs Ordinance in Israel, which deals with the “transaction price”, states in US law that[3]:

“The transaction value of imported merchandise is the price actually paid or payable for the merchandise when sold for exportation to the United States ..”

As for transportation costs, American law goes on to state that the value to customs will not include them:

“(3) The transaction value of imported merchandise does not include any of the following if identified separately from the price actually paid or payable and from any cost or other item referred to in paragraph (1): (A) Any reasonable cost or charge that is incurred for—

 (ii) the transportation of the merchandise after such importation. “

Hence, it seems that in the US, an increase in freight rates does not increase the value of the goods for customs purposes.

In Israel, on the other hand, any increase in freight also embodies the increase in value to customs, and, accordingly, increases the customs burden imposed on the importer.

That is, if we assume for the purpose of the example, that a spare part for a car is subject to a purchase tax of about 20% of the value to customs, then any increase of $1,000 in transportation prices embodies an additional purchase tax of 200$ by the State of Israel. Since this is an indirect tax, it will, by its very nature, ultimately be passed on to the entire public, in the form of rising prices.

 How has the State of Israel dealt with such similar situations in the past?

Price increases in the field of transportation can be caused by a wide variety of reasons. Among other things, wars, closures, sanctions, strikes, and a host of other reasons may increase transportation prices.

In this regard, section 133 (a)(5) of the Customs Ordinance stipulates that in exceptional situations, the director of customs may not include in the value of customs certain transportation costs. The law calls them:

“such costs incurred due to special circumstances over which the importer has no control and the manager has determined that they should not be included in the value of the transaction”

These are, in fact, transportation costs that are a kind of “force majeure” that the importer did not have the ability to prevent.

It should be noted that the Customs Authority exercised this authority, and sometimes exempted transport costs, due to certain circumstances.

On April 24th, 2006, Customs ruled that transportation costs due to the Second Lebanon War would not be included in the customs entry:

“In accordance with my authority under section 133 (a) (5) (a) of the Customs Ordinance, I stipulate that war levies and additional transportation costs incurred by importers due to the security incidents in the north of the country, should not be included in the value of the transaction for the purpose of calculating the import taxes. It is clarified that these are additional transportation, unloading and loading costs listed in the cargo account that were caused due to the security incidents.”

On June 6th, 2008, the Customs ruled that the container demurrage fee beyond the agreed, will not be included in the customs entry:

“..The demurrage fee in the importing country, which is charged for the use of the container beyond the agreed period between the ship’s agent and the importer, will not be included for import taxes.”

On September 7th, 2008, Customs exempted certain transportation costs in respect of strikes from being included in the customs entry, stating:

“In accordance with my authority under section 133 (a) (5) (a) of the Customs Ordinance, I provide that additional transportation costs incurred by importers due to sanctions in the ports of Israel, will not be considered for the transaction value for the purpose of calculating import taxes. It is clarified that these are additional transportation, unloading and loading costs listed in the cargo account, which were caused due to the sanctions and the importer has no control over them. The importer must prove the existence of such additional costs.”

Can the state of Israel also help in the current situation?

According to the publications, the Israeli Chamber of Commerce recently appealed to the director of customs to exercise his authority, and set a type of ceiling on which customs would be imposed, even if in practice transport costs are currently more expensive, and this application was denied by customs[4].

Customs stated that this was a request to reduce the actual cost of transport – something that is not possible, noting that when it came to a request to reduce additions to the value of transport, such as vessels that declared “end of journey” in Cyprus and refrained from entering Israel due to the COVID-19 crisis. Customs further stated that it has not been proven that the increase in transportation prices is due to the COVID-19 or an unforeseen situation, therefore no reduction can be made under the exception in section 133 (a)(5) of the Customs Ordinance, and even claimed that if the State of Israel accepts the claim, this will be a breach of the International Agreement on the Valuation of Goods

**So the question is basically: can in the present case, transportation costs raised by tens or hundreds of percent, due to global COVID-19 crisis, shortage of ships, heavy loads in Israeli ports, shortage of containers, constitute “special circumstances beyond the importer’s control”?

** With all due respect, in my opinion, this point deserves further thought and discussion**

In my opinion, if the Second Lebanon War is an unforeseen event over which the importer has no control, as well as sanctions or strikes, then the interpretation of the law could be a little more flexible, and determined that a global COVID-19 crisis, shortage of ships, containers, To be considered as special circumstances over which the importer has no control.

In this regard, I would like to bring to the readers’ attention a ruling given in the Israeli court on another issue, but it was stated in it, in relation to the Corona crisis, that it is certainly an unexpected event[5]:

“It is hard to believe that the reasonable person could or should have expected the full far-reaching consequences of the Corona epidemic, including on the economy and commercial life, in Israel and around the world. We are dealing with an unparalleled epidemic which has no precedent in the last hundred years (at least since the Spanish Flu epidemic which caused many deaths around the world between the years 1918 – 1920)”.

** These right things, can and should be applied, in my opinion – also in the field of international trade and customs valuation.

Does anyone in the Customs Authority believe that the simple, lone importer, even if it is a wealthy business company, has any control over the changes in world freight rates? Could any importer have anticipated the corona crisis?

**In the end, if my opinion will be adopted, the legal solution is to relieve the importers of the customs duty imposed on the transport that has become more expensive – it already exists. The “invention of the wheel” is not required here.

Now only goodwill is required, and little flexibility in interpreting the law.

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[1] https://www.ynet.co.il/economy/article/rJrNcwAcd

[2] Customs Valuation Agreement (Implementation of Article VII of the GATT) https://www.wto.org/english/res_e/publications_e/ai17_e/cusval_e.htm

[3] Tariff act of 1930, 19. U.S.C. §1401 a(b)(1),(3)

[4] https://www.chamber.org.il/foreigntrade/1109/1111/116962/

[5] Hdlt (Tel-Aviv) 26076-02-20 Adv. Israel Bachar vs. comfortability systems (2007) Ltd. (July 8th, 2020);

solar panel
Archives, Global Trade Daily, News

The Global Solar Panel Market to Skyrocket on the Shift Towards Renewable Energy

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

The global solar panel market accelerates along with the unabated shift towards renewable energy. China, the leader in solar panel exports, will enjoy robust foreign demand while the domestic purchases may slow due to tariff subsidies cut. The U.S. experiences a surge in solar power generation, thanks to the increasing affordability of solar cells and robust suburban construction. The EU, Asia-Pacific, Mexico and Australia are also emerging as the most promising markets due to the swift adoption of solar generation capacities.

Key Trends and Insights

The global solar panel market is expected to skyrocket and exceed $130B by 2030, driven by the increasing shift towards renewable energy worldwide. In 2020, more than 80% of all the world’s newly commissioned electric power was from renewable sources, accounting for near 260 GW of the new capacity. Of this amount, almost a half comes from solar generation. The electricity production from solar generators, according to a forecast by the International Energy Agency, will increase 4.5 times over by 2030, which will be the primary stimulus for the growth of the solar panel market.

The Chinese solar panel industry will continue to thrive amid soaring global demand, despite removing tariff subsidies for new domestic solar energy projects. In China, the world’s leading renewable energy producer, the new solar power capacity grew by 49 GW, which accounts for 36% of the total renewable capacity. Starting from 2021, electricity generated by new solar capacities is to be sold either at local coal-fired power prices or at market prices. This may hamper the domestic solar panel market expansion, but Chinese manufacturers may offset this by rising exports because they dominate global solar panel supplies.

The increased availability of solar panels in the U.S. enables to accelerate the market growth. In 2020, the U.S. commissioned 29 GW of new renewable energy sources, up 80% from a year earlier, of which 15 GW came from solar power. Over the past decade, the cost of solar systems in the United States has dropped by 70%, and the cost of solar-generated electricity has become attractive against alternative sources. In 2020, the base overnight cost of solar photovoltaic energy ranged from $1.248 to $1.612 per kW, which is significantly lower than the base overnight cost of conventional hydropower electricity of $2.769 per kW or geothermal one of $2.772 per kW.

The deployment of distributed solar photovoltaic systems in homes as well as for commercial and industrial buildings appears as a budding market segment worldwide. In the U.S., it is expected to grow rapidly on the backdrop of a boom in suburban single-family construction, highlighting a bright opportunity for investors.

Vietnam is emerging as a promising market, having solar energy capacity skyrocketed over the last two years. To a lesser extent, this is also relevant for the EU, especially Germany, Spain, the Netherlands and Belgium. Australia, Mexico, the UAE and Chile also feature amongst the leaders of the solar energy adoption race. All these markets are to be in the particular focus of global solar energy solution providers who seek new opportunities.

Imports

Global imports of solar cells and light-emitting diodes stood at $54.2B (IndexBox estimates) in 2020. The most prominent rate of growth was recorded in 2014 when imports increased by 6.8% against the previous year. Over the period under review, global imports hit record highs at $55.4B in 2015; however, from 2016 to 2020, imports stood at a somewhat lower figure.

The U.S. ($10.5B) constitutes the largest market for imported solar cells and light-emitting diodes worldwide, comprising 19% of global imports. The second position in the ranking was occupied by Germany ($3.1B), with a 5.6% share of global imports. It was followed by Mexico, with a 2.2% share.

From 2007 to 2020, the average annual growth rate of value in the U.S. totaled +15.1%. The remaining importing countries recorded the following average annual rates of imports growth: Germany (-3.5% per year) and Mexico (+7.9% per year).

Exports

In 2020, solar cells and light-emitting diodes exports totaled $57.5B (IndexBox estimates).

China ($23.8B) remains the largest solar cells and light-emitting diodes supplier worldwide, comprising 41% of global exports. The second position in the ranking was occupied by Malaysia ($5.6B), with a 9.7% share of global exports. It was followed by Japan, with a 6% share.

From 2007 to 2020, the average annual rate of growth in terms of value in China stood at +12.3%. The remaining exporting countries recorded the following average annual rates of exports growth: Malaysia (+14.6% per year) and Japan (-3.5% per year).

Source: IndexBox Platform

Fire Protection Systems
Archives, Global Trade Daily, News

Fire Protection Systems Market Revenue to Observe 5.5% Gains to 2027

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Recent trends in the global fire protection systems market are driven by an upsurge in product launches by major fire safety equipment suppliers.

For instance, in October 2020, Honeywell rolled out the first tools from its new suite of CLSS (Connected Life Safety Services), the company’s first all-in-one cloud platform for fire protection systems. The organization’s CLSS line of tools, developed on the Honeywell Forge platform, allows fire technicians to provide compliance, minimize disruption, and decrease the time required for installation, design, maintenance, commissioning, and reporting of life safety systems.

According to Sameer Agrawal, Honeywell’s General Manager of Global Fire Software and Services, today’s global environment requires the life and fire safety industry to innovate solutions that allow system integrators and facility managers to diagnose issues and monitor their systems irrespective of the time and location.

Similar advancements are expected to boost the demand for fire protection equipment through the forthcoming years. On this note, the global fire protection systems market size is estimated to surpass USD 70 billion by 2027, cites the latest research by Global Market Insights, Inc.

This growth is attributed to the rising product demand in light of the surging number of fire accidents due to the lack of fire protection systems at heritage sites.

For exemplar, in 2019, the NCHA (National Cultural Heritage Administration) reported almost six fire accidents at heritage sites and buildings. For overcoming like issues, the Chinese government has started the deployment of fire protection systems as prevention measures.

Some major trends driving fire protection systems industry outlook comprise:

Increasing industrialization and urbanization in the APAC

The Asia Pacific fire protection systems market is set to exhibit an appreciable CAGR through 2027, considering the rising urbanization and industrialization in the region.

Various countries comprising India, Japan, and China are focusing on the implementation of numerous building guidelines and codes for the fire safety of structures, bolstering the demand for fire protection equipment in the region.

Rising corporate strategies by major industry participants

Prominent players in the fire protection systems market include Schneider Electric, Johnson Controls International PLC, Siemens AG, Fire Suppression Limited, Napco Security Technologies, Hochiki Corporation, Schrack Seconet AG, and others.

These fire safety equipment suppliers are focusing on various collaborative strategies such as acquisitions and mergers for the expansion of their geographical footprint.

For instance, in June 2018, Johnson Controls rolled out its fire protection system, Autocall, in the Middle East for its application in large as well as small projects in industries comprising oil & gas and chemical.

Surging product usage across the residential sector

An escalation in the loss of life and property damage on account of the rising residential fire accidents is slated to foster the growth of the residential segment in the fire protection systems industry through the ensuing years.

Furthermore, a rise in the demand for construction activities due to an increase in population is expected to boost the deployment of fire protection systems in buildings.

In a nutshell, surging government standards and regulations for the improvement of the safety of individuals and industrial, commercial and residential property during fire outbreaks will augment fire protection systems market share over the assessment period.

Source: Global Market Insights, Inc.

machine manufacturers
Archives, Global Logistics, Global Trade Daily

Want to Make Progress on Digital Transformation? Start With Machine Maintenance.

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Machines are at the heart of manufacturing. They affect every aspect of production — efficiency, output, quality, consistency — and form the basis of manufacturing performance. So it comes as no surprise that many use cases for digital transformation in manufacturing focus on machinery. It’s where the transformation manifests itself.

How it manifests itself is more complicated than it seems, however. Some may think that the primary goal of digital transformation in manufacturing is to make machines better at their intended purposes — by using digital technology to help them run faster, longer, or with greater precision. This is one goal, but digital transformation is also about much more than that. Another crucial component is giving machines new capabilities and greater purpose.

Here’s an example: When machines are equipped with internet-connected sensors that can collect machine health data and send it to a centralized platform, then each machine becomes an indicator of the overall health of the production line. Studying the parts reveals the condition of the whole, whether that’s a single production line, an entire factory, or a global supply chain.

This wasn’t possible prior to the new technologies of industry 4.0 because manufacturers had no way to monitor machine health remotely and comprehensively. But it’s possible now, and it’s changing expectations around digital transformation in manufacturing.

Driving Digital Transformation of Machine Maintenance

With additional machine capabilities should also come a rethinking of the role of maintenance technicians. They’re not just the on-site problem-solvers anymore — they’re the ones who move digital transformation forward as they keep machines up, running, and evolving. Technicians may not be the architects of digital transformation in manufacturing, but they are the drivers of it.

In that context, it’s time to consider upgrading the roles of the technicians closest to the machines. The maintenance of the past isn’t appropriate for the factories of the future. Technicians need new skills, tools, and processes to leverage the advanced capabilities being added to machines. They also need a new mindset, mission, and role within the factory. To put it differently, maintenance technicians need to transform as much as the machines they work on. Here’s how manufacturing leaders can help:

1. Change Your Mindset From Maintenance to Risk Avoidance

In the past, when technicians serviced machines because of a breakdown or because of a service schedule, the entire focus was on minimizing machine downtime. Fewer failures and faster fixes meant the maintenance department was doing its job.

Instead of focusing on solving problems after they occur, however, maintenance teams should focus on preventing them. When maintenance sees its primary purpose as risk avoidance, it puts everything technicians do into a new perspective. The team is focused on intervening early and effectively so that minor issues don’t develop into downtime.

Risk avoidance (rather than minimization) is possible when maintenance teams shift from reactive and preventive maintenance, which lag behind problems, to predictive and prescriptive maintenance, which lead ahead of them. Machine health monitoring sensors make that possible while also showing the maintenance team where, when, why, and how their agile efforts helped to prevent disasters.

2. Think About Digitizing Maintenance as a Skill Set Upgrade, Not Just Another Tool

Digital transformation in manufacturing is about more than just adding a bunch of new digital tools to your technicians’ tool belts. If you just give them better ways to do what they were already doing, you won’t see dramatic improvements from digital transformation efforts.

Instead, think of digitization as more than a bonus tool. Think of it holistically as a whole skill set upgrade for your team. Digital tools will allow maintenance technicians to spend less time on menial, repeatable tasks and transition that energy instead to higher-value knowledge work like prescriptive maintenance that can keep machines running better for longer.

3. Improve Your Collaboration Capabilities

Digital transformation in manufacturing maintenance is largely about improving collaboration capabilities. Maintenance teams are using technology to help them spread their resources around as quickly, widely, and effectively as possible. All three of those depend on maintenance teams working collaboratively.

In practice, that means each technician, team, and site has access to the same data and alerts. Everyone works from a single source of truth so that wires don’t get crossed, warnings never get ignored, and resources move everywhere efficiently. However digital transformation affects maintenance, increased collaboration should be the goal.

Every day, digital transformation in manufacturing becomes a bigger priority. Many manufacturers will discover that in their race to digitize, they forgot to update maintenance at the same pace. Those that do the opposite will discover something as well: Digitizing maintenance propels the broader transformation effort forward because it allows machines to do more than they ever have.

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Artem Kroupenev is VP of Strategy at Augury, where he oversees product, market, innovation, and ecosystem strategy. He has over a decade of experience driving the adoption of disruptive technologies and has previously co-founded companies in the United States, Israel, and West Africa.

heavy-duty truck
Archives, Global Trade Daily, News, Trucking

Heavy-Duty Trucks Market: Top Key Trends Fostering the Industry Outlook through 2026

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The heavy-duty trucks market size is poised to expand at substantial CAGR during the forecast period. With the incorporation of advanced technologies including IoT, AI, smart navigation systems, and accident prevention technologies, the heavy-duty trucks industry worldwide is sure to undergo expansion. Focus on emission reduction, environmental sustainability, and efficient engines is expected to drive the demand for these trucks over the forthcoming years.

The following ten major factors have been observed across the heavy-duty trucks industry outlook:

Government investments in infrastructural activities in the Asia Pacific

With the thriving construction and real estate sector of countries such as India, South Korea, and China, heavy-duty trucks are expected to see a greater deployment rate in the next few years. By 2026, the Asia Pacific market share should have gained substantially from the numerous government investments and initiatives toward the promotion of construction activities in the region.

This includes the allotment of a massive government expenditure toward digitalization, integration of artificial intelligence (AI), Internet of Things (IoT), 5G networks, and intercity transportation networks.

Scrappage policy to boost India’s expansion

As part of the focus on economic recovery, the Indian government has been intending to incentivize heavy-duty truck owners to purchase new heavy-duty trucks and other commercial vehicles, discouraging usage of old, polluting ones via its new scrappage policy in Budget 2021.

The move will not only ensure lower pollution rates but also encourage the advancement of the heavy-trucks segment of the commercial vehicle market, which has been witnessing a decline in the past two years across the nation. The Indian market is likely to gain considerable revenue, thanks to the proposal of the Ministry of Road Transport and Highways (MoRTH) to provide new heavy-duty trucks with a discount of road tax as well as a waiver of the registration fee.

Growing demand for diesel heavy-duty trucks

The diesel engine segment of the APAC heavy-duty trucks market is expected to witness a significant expansion through the projected timeline, by credit to the lower fuel consumption alongside the higher efficiency of these engines when compared with gasoline trucks. Integration with compression-ignition of these trucks ensures their fuel efficiency. The lower costs and easy availability of diesel are likely to boost the demand for diesel-powered heavy-duty trucks in the upcoming years across APAC.

Focus on product launches across the Asia Pacific

Several industry leaders in the APAC heavy-duty trucks industry have been seeking to expand their presence through product launches. For instance, in June 2020, Mahindra introduced its Blazo X, a commercial truck with optimized fuel efficiency, across India. Similarly, in January 2021, Daimler India Commercial Vehicles (DICV) launched its new heavy-duty specialized refrigerated truck for safely and efficiently transporting COVID-19 vaccines throughout India.

U.S. auto sector to flesh out higher gains

The heavy-duty trucks market in the U.S. has been exhibiting growth due to higher demand for transportation of cargo and goods, generating more revenue. The American Trucking Association (ATA) findings reveal that over 71% of the freight tonnage across the U.S. is transported using trucks. The thriving cross-border trade between the U.S. and neighboring countries is expected to boost the North American heavy-duty trucks market size.

Integration with ADAS technologies in North America

With technologically advanced heavy-duty trucks being developed by the leading manufacturers across the region, the market in North America is sure to soar. The focus on driver assistance and automation technologies has been a major trend defining the market’s progress. Recently, heavy-duty truck manufacturers have been prioritizing accident prevention and blind-spot monitoring through the adoption of ADAS systems in their product offerings.

Expanding demand for 4×2 axle heavy-duty trucks in Europe

Big trucks with multiple axles offer a better driving experience than single axle trucks. The demand for these vehicles has been spiraling across Europe’s heavy-duty trucks market. There is a growing utilization of 4×2 axle heavy-duty trucks, primarily triggered by the stringent regulatory policies of the European Commission. The EU has enforced permissible weight carriage as per the axle count of heavy-duty trucks.

300-400 horsepower trucks to gain traction across Europe

Owing to the advantages of 300-400 horsepower trucks, the demand for these vehicles has been witnessing an uptick. These trucks feature superior fuel efficiency alongside a lower engine weight. The segment is expected to surge at a high CAGR through the forecast years, due to their comparatively lower costs and enhanced abilities to haul heavy loads.

Hefty penalties for non-compliance with EU standards

Numerous heavy-duty truck manufacturers in Europe have been investing in the integration of innovative technologies aiming at achieving the zero-emission target from 2025 onward, in order to avoid payment of hefty penalties for non-compliance with EU standards. Recently, the EU has announced the adoption of carbon-neutrality targets and standards for heavy-duty trucks.

These include a 15% reduction from 2025, which will augment to 30% by 2030, attaining zero emissions by 2050. The implementation of such regulatory frameworks is certain to flesh out more demand for electrified trucks across the European region.