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Global Groundnut Oil Trade Intensifies on Booming China’s Demand

Groundnut Oil
Archives, Global Trade Daily, News

Global Groundnut Oil Trade Intensifies on Booming China’s Demand

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

Global groundnut oil imports reached $671M in 2020. In physical terms, global imports spiked by +15% y-o-y to 444K tonnes in 2020, mainly due to rising demand from China. China represents the world’s largest importer of groundnut oil, with a 61%-share of global import volume. In 2020, China’s groundnut oil imports jumped from $225M to $433M. Brazil and Argentina remain the key exporters of groundnut oil.

Global Groundnut Oil Imports

Global groundnut oil imports rose significantly to 444K tonnes in 2020, surging by +15% against the previous year’s figure. Over the period under review, total imports indicated a noticeable increase from 2010 to 2020: its volume increased at an average annual rate of +4.9% over the last decade.

In value terms, groundnut oil imports skyrocketed to $671M (IndexBox estimates) in 2020. In general, total imports indicated a buoyant expansion from 2010 to 2020: its value increased at an average annual rate of +4.9% over the last decade.

China dominates groundnut oil imports with a figure of 269K tonnes, which was approx. 61% of total imports in 2020. Afghanistan (43K tonnes) occupied the second position in the ranking, followed by Italy (39K tonnes). All these countries together took approx. 19% share of total imports. The following importers – the Netherlands (15K tonnes), Hong Kong SAR (15K tonnes), Belgium (11K tonnes), Benin (10K tonnes) and France (8.1K tonnes) – together made up 13% of the total imports.

In value terms, China ($433M) constitutes the largest market for imported groundnut oil worldwide, comprising 65% of global imports. The second position in the ranking was occupied by Italy ($66M), with a 9.8% share of global imports. It was followed by Hong Kong SAR, with a 4.6% share.

In 2020, China’s imports of groundnut oil spiked from $225M to $433M. From 2010 to 2020, groundnut oil imports into China grew from $87M to $433M, rising at an average annual rate of +17.4%. The remaining importing countries recorded the following average annual rates of imports growth: Italy (+2.6% per year) and Hong Kong SAR (+2.3% per year).

In 2020, the average import price amounted to $1,509 per tonne, picking up by +30% against the previous year. In general, the import price indicated modest growth from 2010 to 2020, increasing at an average annual rate of +1.2% over the last decade.

Prices varied noticeably by the country of destination; the country with the highest price was Hong Kong SAR, while Benin was amongst the lowest. In 2020, the Netherlands attained the most notable rate of growth in terms of prices, while the other global leaders experienced more modest paces of growth.

World’s Largest Exporters of Groundnut Oil

In 2020, Brazil (67K tonnes) and Argentina (56K tonnes) represented the key exporters of groundnut oil worldwide, reaching nearly 48% of total exports. India (36K tonnes) took a 14% share (based on tonnes) of total exports, which put it in second place, followed by Iraq (10%), Nicaragua (6.5%) and China (4.9%). Senegal (8.5K tonnes) followed a long way behind the leaders.

In value terms, Brazil ($112M), Argentina ($79M) and India ($59M) constituted the countries with the highest levels of exports in 2020, with a combined 63% share of global exports. These countries were followed by China, Nicaragua, Iraq and Senegal, which together accounted for a further 20%.

Source: IndexBox Platform

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

Resilience in the Global Supply Chain: Understanding 5 Key Ingredients

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Resilience is defined as follows:

re·sil·ience

/rəˈzilyəns/

noun

1. the capacity to recover quickly from difficulties; toughness. “the often remarkable resilience of so many British institutions”

2.  the ability of a substance or object to spring back into shape; elasticity. “nylon is excellent in wearability and resilience”

In terms of global supply chains, resilience is determined by an ability to adapt, survive and perform despite devastating and unplanned circumstances such as those we have been dealing with since the Covid-19 pandemic enveloped the world in February 2020.

The Covid-19 pandemic has been disruptive to every company, in every business vertical, in all countries, to all companies and for most people in the world.

The impacts of increased delays, cost escalations, unavailable space, reduced inventory balances, and lost sales continued to escalate through 2021, a year that we hoped would have positioned the pandemic in our rear-view mirrors.

By contrast, the economic impact, as well as the personal toll, have been devastating, and as we enter 2022 the residual concerns are lingering and in some business models are worsening.

Delays, cost escalations and uncertainty plague all global supply chains and have made for very difficult daily management and long-term planning.

All these issues are challenges that must be met by the supply chain executives who manage these responsibilities for the companies they operate in.

Having been through numerous disasters that have impacted supply chains, from hurricanes to tsunamis to winter storms … this pandemic has exposed corporations to new and extended vulnerabilities, never previously seen to this magnitude.

Over the last 35 years and especially in the last 20 months, I have witnessed and participated in various strategies, methodologies, and tactics to deal with these challenges.

An individual’s demonstration of “RESILIENCE” has been a key ingredient to surviving these challenges and keeping his or her organization on an even keel through these turbulent waters.

I believe there are 5 Key Ingredients to “Resiliency in Global Supply Chains”.

-Patience

-Pliability

-Information & Research Gain

-Creative Solutions

-Going Back to Basics

Patience

Those that are too quick to respond under the pressure of the issues and under senior management demands will likely make misjudgments that will make matters worse.

As an example: A logistics manager is losing patience with their service provider, who is having difficulty booking space. Instead of trying collaboratively to find a solution … moves the business to another freight forwarder … to only discover that the new forwarder’s senior management team is prioritizing space allocations to older clients and not new ones.

The logistics manager has now created a bigger hole to get out of.

Exercising patience, along with a collaborative approach, would more likely have brought a resolution that could now be in play. The impatience moved the potential resolution to the back of the line.

Patience comes with maturity, confidence, and experience. Junior-level supply chain personnel lacking tenure need to closely observe senior management – who are hopefully setting an example of a more balanced reaction and approach to disaster.

Reactions by instinct alone, hurried responses and not well-thought-out actions will typically lead to poor choices. Poor choices produce bad outcomes.

Through this pandemic, I have observed many company supply chain executives – both young and old – overreact and make some bad decisions, which placed their supply chain in further jeopardy.

“Patience is a Virtue” is part of an old adage that has never rung truer than in managing global supply chains in 2020, 2021 and into 2022.

Pliability

Pliability is the ability to bend, like a willow tree in the wind. It is all about flexibility, like a gymnast performing at this year’s Summer Olympics in Tokyo.

In Supply Chain, the meaning moves us in a direction where our strategies, tactics and decisions must become molded to the new circumstances we face where demand and capacity have been misaligned for over the past 20 months and likely to continue down that road well into 2022.

It means we must adapt to a completely new set of assessments, quantitative data input, expected outcomes, and circumstances mostly out of our control.

Specifically, in companies with a global footprint, this means underperforming suppliers, unreliable freight services, escalating costs and enormous frustrations in promises made by many and kept by few.

In addition to being patient, in this pandemic, the supply chain executive must take well-thought-out risks and approaches that can offer resolutions to all the obstacles and challenges.

And more importantly, it means that we must be pliable in our approach to attempt solutions not previously tried.

Information and Resource Gain

The Supply Chain Executives showing resilience will have to make better decisions. Better decisions will originate with quantitative data analysis, based on robust information flows.

As an example: A procurement manager for a perfume company that has a major supplier in Guangzhou, China, which accounts for 80% of a particular product line.

The Chinese supplier is having trouble meeting demand. The intuitive procurement manager dives deep with the supplier to find out who supplies them with the raw materials that they seem to be having trouble obtaining in the necessary quantities needed to fill their PO’s.

The procurement manager reached into their sourcing staff to see if they can find some alternative suppliers, which they were successful doing.

This new raw material supplier to their supplier made a big difference in having them mitigate the problems of meeting all the PO requirements.

Information, along with collaboration, resolved the problem.

In today’s world, information can make the difference between success and failure, profit or loss. Supply Chain Managers need to spend considerable time in developing resources to gain information.

Some of these resources could be:

-Friendly competitors

-Supply Chain Organizations: CSCMP, ISM, NIWT, etc.

-Consultants specializing in Global Supply Chain: Blue Tiger International & others

-Internet (search, networking)

-Media: Journal of Commerce, American Shipper & SupplyChainBrain

-Industry Trade Shows

-Advanced Colleges & Universities with Supply Chain Modules

Information that provides useful data comes from reliable sources, comprehensive structure, timely subject matter and from qualified expertise.

The “Gain of Information” is invaluable in making informed and well-thought-out decisions.  Resourcefulness is making clever use of the information gained.

Creative Solutions

This is a time one needs to raise the bar of performance in meeting the Covid-19 Pandemic challenges.

Solutions of the past may not have contemporary applications. Current practices may make the problems even worse.

One needs to “put on the thinking cap” and bring new and creative ideas to the table.

This is directly tied into being patient, pliable, and developing information sources and resources, previously discussed.

An example: A NY-based chemical company operating successfully for 40+ years is having difficulty moving cargo timely and cost-effectively from various Asian suppliers.

Their typical move is product in 25 and 50 Kilo bags and boxes, stowed in 20- and 40-Foot Containers.

They are feeling the pain of 90-120 delays in ocean freight and cost escalations from $2700/per 40’ to $22,500/per 40’ from March of 2020 till now in December 2021.

The delay and cost escalation are devastating the cost-effectiveness in an established supply chain that has worked well for more than 40 years.

The potential of customer loss is great along with margin depletion.

They collaborated with a supply chain consultant who suggested they load the product in 500 kilo super sacks at their supplier facilities and “charter” a Breakbulk vessel to move 20’ container volumes of freight.

This was very much out of their wheelhouse, but they diligently, along with their consultant reviewed the risks, quantified, assessed carefully and took steps to mitigate all the challenges that came to light.

Now, 8 months later, they have had 3 successful charters and have actually reduced landed costs by 10-12%. Their margins are in-line, the customers are happy.  The new and creative approach, with well-thought-out risk management steps, came to a favorable conclusion.

In another example: A Houston-based consumer electronics company purchasing finished products from all over the world, specifically from suppliers in Europe, Asia and the Middle East.

In their standard (pre-pandemic) process, they would bring the goods into their 750,000 sq.ft. distribution facility just outside Houston for quality control work before shipping product to customers in all 50 states, Mexico and Canada. Most customers were big-box retailers.

In this case, their supply chain consultant gave them two suggestions which they studied, assessed, and modified to fit their supply chain; both of which ultimately created favorable outcomes.

For the first option, they approached their larger retailers who were building their own consolidations in the countries they were sourcing from.

They offered the retailers pricing discounts to move the sales from CIF INCO Term to FCA Overseas Consolidation Point. Meaning they would deliver the goods to the warehouse/carrier at the outbound gateway of the country of origin. The retailer would take possession of the goods at their consolidation facility and combine it with other orders and ship as a “consolidated shipment”. The benefits could be freight cost savings and affording the control of the cargo directly to the consignee.

The second suggestion was to make the distribution facility in Houston into a Foreign Trade Zone (FTZ), where duties on sales to US entities were deferred until point of sale.  For goods exported to Canada and Mexico, no duties were paid, as the goods passed through the FTZ and never entered the U.S. economy.

This option took approximately 3 months to assess and implement, and an upgrade in their supply chain technologies became a favored solution.

Other creative solutions are as follows:

All these options present potential solutions to the global supply chain management teams to consider in mitigating the impact of disruptions and to lower landed costs.

Going Back to Basics

I was an athlete throughout my high school and college years, rising to “All American” status. I observed many times when athletic prowess waivered, winning subsided, and performance shattered how the coaches brought us back from the “dark side”.

Experience demonstrates that difficult times are likely to occur. Success is not a straight and smooth line. It is curved, bumpy and has roadblocks.

I observed over the years that quality coaches had the ability to turn circumstances around and bring guidance, solutions and resolve to the challenges we faced.

Their number one solution was to bring the team and the athlete back to basics. In soccer, it was dribbling, passing and running. In wrestling it was take-downs, grinding and stamina build-up, in lacrosse, it was throwing, cradling and scooping.

Practice those basic skill sets and once achieved again, move forward onto more robust capabilities and strategies.

It was a formula that worked over and over again. In my adult life, I utilize the same strategy in golf. When my game goes south I go back to basics: slow the swing, keep the head down and work on the short game.

The basics in global supply chain are:

Summary

We believe … like tragic forest fires that ultimately benefit the woodlands as old timber is destroyed allowing new and stronger growth to eventually flourish … that weak supply chains will potentially be lost and stronger supply chains will survive and prosper.

So it will be for global supply chains.  This latest unprecedented disruption will make supply chains ultimately operate with:

-Greater Efficiencies

-More cost-effective strategies

-Enhanced processes, protocols and SOP’s for future disruptions and affording proactive mitigation strategies

All leading to a mindset of “resiliency” … a great management quality allowing not only survival but growth and prosperity … in the most difficult of times.

 ______________________________________________________________________

Thomas A. Cook is a 30 year seasoned veteran of global trade and Managing Director of Blue Tiger International, based in New York, LA and West Palm Beach, Florida.

The author of 19 books on international business, two best business sellers. Graduate of NYS Maritime Academy with an undergraduate and graduate degree in marine transportation and business management.

Tom has a worldwide presence through over 300 agents in every major city along with an array of transportation providers and solutions.

Tom works with a number of Associations providing “value add” to their membership services and enhancing their overall reach into global sourcing and in export sales management.

He can be reached at tomcook@bluetigerintl.com or 516-359-6232

ocean
Archives, Global Logistics, Ocean Carriers

LOOKING BACK WITH 2021 VISION: NAVIGATING THE EVOLVING OCEAN LOGISTICS INDUSTRY

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Nearly every business has experienced the effects of today’s global supply chain disruptions over the course of the COVID-19 pandemic, including product delays, shortages and rising costs. Pandemic-related challenges that were expected to be temporary are now predicted to last well into 2022—and potentially beyond.

The ocean freight industry has arguably shared the spotlight the most due to record-breaking prices, port congestion, container shortages and more. The average price worldwide to ship a 40-foot container has more than tripled from the beginning of 2021 and is 10 times pre-pandemic rates. Only a few months ago outside two of the biggest ports in the U.S. near Los Angeles and Long Beach, California (which manage 40% of all cargo containers entering the country), more than 70 vessels waited to dock. Before the pandemic, it was rare to see more than one.

Given today’s complexities, it’s important we examine the key 2021 learnings from the ocean logistics industry to incorporate lessons learned as we prepare to navigate the year ahead.

Lesson 1: Embrace Flexible Shipping Routes

As capacity shrank, container ships experienced record times to dock and labor shortages backlogged the unloading of cargo, 2021 highlighted that flexibility is key to a successful shipping strategy. For 3PLs and freight forwarders, this meant adapting plans in real time to manage limited resources in the most strategic way possible according to each customer’s specific product and goals.

For some large retailers and automotive manufacturers, for instance, we witnessed growing shifts from ocean to air cargo as an alternative. While air freight ensures a faster and more reliant shipment of goods, it is also a much more expensive option. According to Freightos, a $195 ocean shipment can comparatively cost $1,000 via air. Because of these major price discrepancies, we have largely seen the trend of shifting from ocean to air routes among big-box retailers and manufacturers of premium goods that can absorb the higher rates.

However, shifting from ocean to air is not feasible for most brands. Instead, flexibility in 2021 also meant pivoting to different ocean routes. Throughout the pandemic, many countries have closed or limited capacity at key shipping ports for reasons like worker shortages or limiting the spread of the virus. This presented 3PLs and freight forwarders with the opportunity to explore less traditionally traveled sea routes to try to mitigate delays. For example, closures in Australia due to COVID-19 significantly decreased capacity from the United States. As a result, some forwarders successfully rerouted to Singapore and finally to Sydney as a solution.

In 2021, we also increasingly saw shippers embrace a hybrid sea-air model. While transitioning wholly from ocean to air isn’t viable for most, shippers did strategically tap into air to move critical inventory to keep operations running smoothly on an as-needed basis. Ultimately, 2021 taught us that flexible, real-time adjustments to supply chain routes based on the current environment and each customer’s strategic goals is crucial to best navigate backlogs.

Lesson 2: Explore Agile & Visible Solutions

While the ocean freight industry has always experienced unplanned challenges beyond its control, such as severe weather, the impacts of COVID-19 have only exacerbated these preexisting issues. Now, it is more important than ever that shippers explore creative solutions to mitigate the effects of today’s both expected and unexpected challenges.

For example, in 2021, we saw the growing trend of major retailers and 3PLs chartering their own shipping vessels to combat capacity issues. Coca-Cola began chartering vessels typically reserved for raw goods like coal and iron to instead use for finished goods. Retailers such as Walmart explored chartering smaller container ships to dock at smaller ports to help side-step congestion. Also chartering vessels more and more were 3PLs seeking to guarantee capacity for clients in an ultra-tight sea freight market. While in the past this has traditionally been viewed as risky due to cost and capacity, chartering vessels became a creative solution for many this year to supplement carrier agreements.

For other shippers, particularly those unable to charter their own vessels, freight consolidation services became especially vital in 2021. Many brands leveraged Less than Container Load (LCL) services for reasons like the need to ship smaller and less-sensitive products on a more ad-hoc basis to keep up with fluctuating e-commerce demands. Partnerships with 3PLs became even more important thanks to fixed sailing schedules with space across all major routes, steady cargo volume to consolidate orders, and competitive rates and conditions.

This year also reinforced that incorporating sophisticated visibility technology into operations is imperative for maneuvering supply chain challenges. A 24/7 freight management application allows for real-time tracking and tracing and full control over shipments. Incorporating the latest visibility technology provides critical data across every stage of the supply chain—from tracking fluctuating customer demands to updates on freight in transit—to empower real-time, data-driven decisions. Visibility has proven to be particularly important during the pandemic to mitigate unforeseen disruptions by rapidly adjusting resources and strategies.

Lesson 3: Adjust Your Supply Chain with New Resources

The pandemic underscored just how critical it is to partner with supply chain experts amid times of severe disruption. In fact, a recent study predicts strategic relationships between shippers and 3PLs will increase from 28% to 45% over the next five years due to the effects of COVID-19.

There are several reasons behind this shift from transactional to relationship-driven partnerships between 3PLs and customers. First and foremost, a partnership with a skilled 3PL allows shippers to outsource supply chain management so instead, they can focus on their core competencies. Shippers found that working with a 3PL during the pandemic, when business decisions changed daily based on the fast-changing environment, was particularly significant in order to focus on running efficient operations. Deemed an essential service during the pandemic, 3PLs were also able to keep supply chains moving and businesses running.

Additionally, 3PLs are able to offer real-time adjustments to shipping strategies based on the current environment. Utilizing an international network across all modes of transportation, global 3PLs are equipped to provide comprehensive, 360-degree recommendations across the supply chain to source the best possible solution. For many businesses during the pandemic, demand was unpredictable and ever-changing. An advantage of partnering with a 3PL is its ability to quickly and easily scale operations up or down based on demand so customers can run their businesses most efficiently. With a massive network of transportation carriers, including vessels, planes, trucks and rails, 3PLs can tap into their strategic partners to best source capacity even during strained environments.

As we look ahead to 2022, it is important we learn from the ocean logistics challenges of the past year as these issues are not expected to end anytime soon. Because of this, it will be increasingly vital that businesses emphasize flexible and agile shipping strategies and relationship-driven, third-party partnerships to best navigate what is to come.

_______________________________________________________________________

Joshua Garee is vice president of U.S. Ocean Product at GEODIS in Americas. Previously the vice president of Operations at PAC International Logistics, Garee has a proven record of growing organizational talent and implementing innovative solutions through key leadership, best practice, strategic planning, continuous improvement, financial planning and cost management.

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

U.S. Ethanol Market: Prices Are Soaring, Bioethanol Displaces Synthetic Alcohol

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

In November 2021, U.S. ethanol prices hit over $3.2 per gallon, doubling against the same period in 2020. Despite this, the last factory in the U.S. producing synthetic ethanol announced ceasing operations because it cannot compete with bioethanol in terms of costs. Government investments worth $26M will drive U.S. biofuel infrastructure development. A conflict between biofuel producers and the Environmental Protection Agency is coming to a head because the agency delayed issuing the 2022 Renewable Volume Obligation (RVO). This document was expected to propel the bioethanol market by elevating the standards for the biofuel percentage used in blends with traditional gasoline and diesel.

Key Trend and Insights

According to the USDA, the Eastern Cornbelt average ethanol price grew from $1.4 per gallon in January to more than $3.2 per gallon in November 2021. The most significant gains were seen past month when prices for the alcohol leapt up by more than 30%.

In the U.S., ethanol fuel production has rebounded since its downturn the previous year. According to the EIA, throughout the first eight months of 2021, there were 3.9M barrels of ethyl alcohol produced. In the same period of 2020 and 2019, 3.7M barrels and 4.0M barrels were manufactured, respectively.

Global demand for American ethanol is growing. In the first nine months of 2021, U.S. exports of ethyl alcohol consisted of $1.83B, which is 5.8% more than the same period in 2020. During the twelfth Ministerial-level meeting of the India-U.S. Trade Policy Forum, the Indian side expressed interest in obtaining a massive supply of the alcohol from the US. India’s national goals call for increasing the amount of ethanol blended with petrol to 20% by 2025.

Even though the growth in demand and increased prices are beneficial for U.S. ethanol producers, the last synthetic ethanol facility in the U.S., Tuscola Plant, owned by petrochemical giant LyondellBasell, announced that it would close at the end of 2021. Faced with rapidly increasing costs for resources and energy, specifically ethylene and natural gas, synthetic ethanol cannot compete with bioethanol. Meanwhile, prices for corn, which is widely used to produce the alcohol, have gone down this year: Eastern Cornbelt average corn price decreased from $7.60 per bushel in May to $5.60 in November.

Government policies will stimulate development in the bioethanol market. The U.S. Agriculture Department announced that it would invest $26M into building biofuel infrastructure in 23 states as part of the ‘Higher Blends’ program. The subsidies will stimulate replacing old-style fuel pumps and storage tanks with blended pumps and tanks suitable for E15 and E85 fuels, as well as biodiesel. The USDA projects that the grants will help increase potential sales for biofuels by 822M gallons per year.

The relationship between biofuel producers and government bodies worsens, threatening to become a severe conflict. Growth Energy, the leading American trade association advancing biofuel usage, submitted a notice of intent to sue the Environmental Protection Agency (EPA) for failing to issue on time the 2022 Renewable Volume Obligation (RVO), which regulates the blending standards of biofuels with traditional automotive fuels. By retaining the status quo for the RVO, current standards won’t be reevaluated to increase the percentage of green energy sources used and thus hinder growth in the biofuel market.

U.S. Ethyl Alcohol Exports

In 2020, exports of ethyl alcohol from the U.S. reduced to 6.5B litres, falling by -7.7% against the year before. In value terms, ethanol exports contracted to $2.4B (IndexBox estimates) in 2020.

Canada (1.5B litres), Brazil (946M litres) and India (898M litres) were the main destinations of ethanol exports from the U.S., together comprising 52% of total exports. South Korea, Mexico, the Netherlands, Colombia, the Philippines, Peru, Nigeria, the UK and China lagged somewhat behind, together comprising a further 37%.

In value terms, Canada ($596M), Brazil ($318M) and India ($312M) appeared to be the largest markets for ethanol exported from the U.S. worldwide, with a combined 51% share of total exports. South Korea, the Netherlands, Mexico, Colombia, Peru, the Philippines, Nigeria, the UK and China lagged somewhat behind, together accounting for a further 37%.

In 2020, the average ethanol export price amounted to $0.4 per litre, rising by 6.1% against the previous year. Prices varied noticeably by the country of destination; the country with the highest price was the Netherlands ($0.5 per litre), while the average price for exports to the Philippines ($0.3 per litre) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was recorded for supplies to the Netherlands, while the prices for the other significant destinations experienced more modest paces of growth.

Source: IndexBox Platform 

WMS supply chain
Archives, Global Logistics, Global Trade Daily, Warehousing

How SOLOCHAIN WMS Can Enable Your Growth Strategy

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Successful growth strategies require technology-enabled innovation. Manufacturers can look at various technologies to automate operations, improve efficiencies, and scale more efficiently throughout the entire supply chain. A WMS is one technology that can help manufacturers transform their warehouse or plant operations to scale for growth. 

A good WMS will provide real-time inventory visibility and create new efficiencies within inbound, warehousing, manufacturing, and outbound processes. SOLOCHAIN WMS combines warehouse management and manufacturing execution system capabilities to deliver a cloud-based, flexible platform with features and capabilities to enable efficiencies and support operational excellence.

Inbound Processes – Improve Receiving, Inspecting, and Put-Away of Inventory

The goal of a WMS is to reduce the number of steps in a process and the touches or movements of inventory. During inbound processes, SOLOCHAIN WMS optimizes inventory receiving.

-SOLOCHAIN WMS enables cross-docking by receiving, creating the picks, and staging the inventory to ship out within a cross-dock zone without putting the inventory into overstock or pick locations within the warehouse. Cross-docking can help move products more quickly based on sales orders and reduce overall handling and movement of inventory.

-Put-away logic in SOLOCHAIN WMS can help workers put inventory in the best or right location when it enters the warehouse. This is important for frozen, refrigerated, and other goods to ensure it is in the proper place. Likewise, put-away logic can bring additional efficiencies if it makes sense from a logistics standpoint to allow forward pick locations to be topped up during the receiving process while still respecting FIFO/FEFO rotation. Put-away logic will help optimize the picking process and improve inventory turnover.

Warehouse Processes – Improve Inventory Control, Accuracy, and Movement of Inventory

SOLOCHAIN WMS can improve inventory control and accuracy within warehouse processes and make inventory movement more efficient and productive.

-Cycle counting within SOLOCHAIN WMS allows for inventory control and accuracy. Inaccurate inventory is one significant way businesses lose revenue. A strong cycle counting process gives a warehouse an ongoing measurement of inventory accuracy while reducing stock shrinkage and shutdowns and the ability to identify out-of-sync inventory or mistakes more quickly.

-Warehouse movements are managed in SOLOCHAIN WMS. These can include put-away moves, replenishments, pre-emptive replenishments, manual moves, and picking. To improve operational efficiency within the warehouse, task interleaving can reduce deadheading and maximize travel time. For example, a forklift operator will complete the next closest task based on their location in the warehouse – it could be a pick, a cycle count, a replenishment, etc.

Manufacturing Execution Functionality – Support Kitting, Multi-Stage Manufacturing, and Recall Reporting

Unlike many WMS, SOLOCHAIN WMS has MES functionality built into the platform to give businesses real-time visibility and traceability throughout the supply chain.

-Kitting or multi-stage manufacturing processes can be managed with SOLOCHAIN WMS to produce finished products. The warehouse becomes connected with the production floor to ensure a consistent material flow.

-Traceability and recall reporting is made possible by SOLOCHAIN WMS. Throughout assembling or producing a finished product, detailed information about each material used is tracked, including lot numbers. As a result, manufacturers can trace forwards and backward. For example, if there was an issue with a single ingredient, the manufacturer can trace all finished products where it was used. Alternatively, if there was an issue with a finished product, the manufacturer can also identify all raw materials used to produce the good. Real-time traceability allows for recall reporting in instances where there are product issues. This functionality is ideal for industries with traceability regulations such as food, cosmetics, and nutraceuticals.

Outbound Processes – Manage Order Types, Fulfill Efficiently, and Meet Customer Compliance Requirements

As customer buying behaviors have shifted significantly, businesses strive to enable new channels to support customer needs, such as eCommerce and omnichannel experiences. How efficiently outbound logistic processes operate is critical to success. Outbound processes managed within SOLOCHAIN WMS are flexible and highly configurable.

-Multiple order types are managed within SOLOCHAIN WMS, and the solution looks to optimize the picking process for the specific order type. A warehouse can fulfill orders for direct eCommerce, omnichannel, and traditional wholesale more efficiently as WMS will direct the pick from the most efficient location. For example, if a large pallet quantity is in the order, the WMS may suggest picking the oldest pallets from bulk overstock rather than from forward pick locations. Likewise, customer compliance requirements can be generated through SOLOCHAIN WMS.

-From a shipping perspective, SOLOCHAIN WMS can be integrated with a TMS system. If the WMS is integrated with the TMS system, the platform can further optimize the picking process. For example, SOLOCHAIN WMS can wait for enough case quantities to create a picklist that will pull a full pallet shipped out by UPS. The UPS shipping labels are printed and applied in sequence during the pick creation as the worker picks the product. With a whole pallet of product, the worker can move and load it onto the UPS trailer versus taking it to a packing station.

The core capabilities of SOLOCHAIN WMS optimize processes – inbound, outbound, manufacturing, warehousing – and accurately capture data and use it to enable new efficiencies. To learn more about the features and capabilities of SOLOCHAIN WMS, download the Gartner Magic Quadrant for WMS Report today.

_______________________________________________________________________

About Generix Group

As omni-channel driven demands become the norm, with resulting customer satisfaction harder to achieve, supply chain professionals need to leverage advanced WMS technology to keep their operations nimble, efficient, and scaling – especially in these volatile times.

Given Generix Group’s completeness of vision and ability to execute, as recognized once again by the Gartner analyst community, their SOLOCHAIN WMS is well positioned to help companies needing a modern, flexible and agile solution that can easily adapt to their changing needs. We invite you to contact us to learn more.

This article originally appeared here. Republished with permission, 

leather
Archives, Global Trade Daily, News

China’s Leather Imports Post Solid Gains This Year

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

From January to July 2021, China’s leather imports totalled $1.3B, an increase of 34% over the same period last year. Brazil and Italy are the leading suppliers, comprising more than half of China’s leather imports. Over the past year, Italy (+34% y-o-y) significantly increased shipments to China, while supplies from Brazil (-24% y-o-y) declined. The average import price was $4,028 per tonne in 2020, rising by 19% over the previous year.

Imports into China

From January to July 2021, Chinese leather imports totalled $1.3B, exceeding by +34% the value of the same period in 2020. Last year, leather imports increased to $2.6B (IndexBox estimates), growing by +5.5% y-o-y. In physical terms, leather imports in China fell slightly to 650K tonnes, declining by 11.4% on the previous year’s figure. Over the last decade, imports attained the peak figure at 858K tonnes in 2014; however, from 2015 to 2020, they failed to regain momentum.

Chinese leather imports are expected to continue rebounding robustly, driven by the increased consumer demand worldwide. A downside risk comes from pandemic-related supply chain disruptions. Last year, many orders for leather production were cancelled or postponed, which put pressure on the manufacturing factories.

This year, regular shipments are deteriorated by the lack of shipping containers and the limited capacity of Asian ports that partially cease operations when COVID cases are found there. The uncertainty associated with possible pandemic outbreaks due to the emergence of new strains also poses a threat to the leather market and the global economy overall.

Imports by Country

In 2020, Brazil (204K tonnes), Italy (131K tonnes) and Viet Nam (55K tonnes) were the leading suppliers of leather imports to China, with a combined 60% share of total imports. These countries were followed by the U.S., Thailand, Argentina, Taiwan (Chinese), South Korea and Uzbekistan, which together accounted for a further 22%.

From 2007 to 2020, the most significant increases were in shipments from Uzbekistan (+66.1% per year), while purchases for the other leaders experienced more modest paces of growth.

In value terms, Brazil ($338M), Italy ($250M) and Thailand ($135M) constituted the largest leather suppliers to China, together comprising 28% of total imports. South Korea, the U.S., Viet Nam, Argentina, Taiwan (Chinese) and Uzbekistan lagged somewhat behind, together comprising a further 18%.

In terms of the leading suppliers, Uzbekistan (+69.3% per year) recorded the highest growth rate of the value of imports over the period under review, while purchases for the other leaders experienced more modest paces of growth.

Import Prices by Country

The average leather import price stood at $4,028 per tonne in 2020, growing by 19% against the previous year. Overall, the import price, however, showed a pronounced curtailment. Over the period under review, average import prices attained the maximum at $6,374 per tonne in 2013; however, from 2014 to 2020, import prices remained at a lower figure.

Prices varied noticeably by the country of origin; the country with the highest price was South Korea ($10,291 per tonne), while the price for Brazil ($1,657 per tonne) was amongst the lowest.

From 2007 to 2020, the most notable rate of growth in terms of prices was attained by Uzbekistan, while the prices for the other significant suppliers experienced a decline.

Source: IndexBox Platform

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Archives, Global Logistics, Global Trade Daily, Ocean Ports, Site Selection, State Spotlight

PROPOSED CONTAINER-ON-VESSEL SERVICE TO THE ST. LOUIS REGION ADVANCES WITH NEW PARTNERS SIGNING ON FOR THE DEVELOPMENT OF A CONTAINER PORT FACILITY IN JEFFERSON COUNTY, MISSOURI

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Key stakeholders behind the efforts to launch innovative Container-on-Vessel (COV) service to the Midwest today announced that Hawtex Development Corporation is signing on as the lead developer for a new COV port facility in Jefferson County, to be developed in collaboration with Fred Weber/Riverview Commerce Park LLC and integrating a 300+ acre adjacent parcel owned by The Doe Run Company. The new port will be a critical link on the new, all-water, north-south trade lane connecting the Midwest and the St. Louis region to the lower Mississippi River and on to worldwide destinations. Representatives from the Jefferson County (MO) Port Authority, Jefferson County, Missouri, Bi-State Development, American Patriot Holdings LLC/American Patriot Container Transport LLC and APM Terminals joined the newest partners in this bold initiative on Dec. 17 in Herculaneum, Mo., where the port will be located, to provide details on the new facility and the service it will support.

Hawtex Development Corporation, a business development and consulting company with operations in Texas and Hawaii, has been working with American Patriot Holdings over the past several years to help in identifying and establishing market-ready locations for Mississippi River intermodal container facilities, with an initial focus on the Memphis and St. Louis regions. In the St. Louis region, the Herculaneum site that is already home to Fred Weber/RCP’s current port facility and adjacent to the parcel owned by The Doe Run Company emerged as the most advantageous site to develop a state-of-the-art intermodal container facility to serve this central Midwest region for both the export and import of containerized cargo.

“Through this new collaboration with our partners here in Jefferson County, Hawtex is looking forward to leading the development team for the planned facility on the Mississippi River at Herculaneum,” said James Hurley, President of Hawtex Development Corporation. “We will be leading discussions with RCP and The Doe Run Company principals to complete a comprehensive Development Agreement beginning early in the new year, and we will be meeting with and confirming service requirements for a number of St. Louis-based and regional beneficial cargo owners throughout Q1 of 2022. Our goal is to bring this facility to operating status in Q4 of 2024.”

The facility is in the early stages of development and the new partnership allows all parties to start planning efforts that enable final investment decisions. The total amount of the investment to be made at the new port is yet to be determined.

Sal Litrico, Chief Executive Officer, American Patriot Container Transport LLC (APCT), which is developing the patented new vessels that will carry the containerized cargo along the underutilized Mississippi, Illinois and Missouri rivers, also revealed at the event that APCT has issued a solicitation to seven US shipyards for construction of four of the patented container on vessels that will provide the new COV service, and an option for four more, another critical milestone in this initiative. The call for submissions was issued Dec. 14 and proposals are due at the end of February.

“The new partnerships being forged today and the advancements we’re making toward construction of the new vessels represent another huge step forward for this unique supply chain option that will reduce transportation costs for shippers by approximately 30 to 40%,” said Litrico. “The Mississippi River is ice free and lock free from the St. Louis region all the way south to the Gulf Coast, enabling us to bring our new vessels with the capacity to carry 2,375 20-foot long by 8-foot tall shipping containers right into the heart of the Midwest, and this new port facility will be developed specifically to be able to handle those vessels and containers.”

Mark Denton, Vice President of Fred Weber/Riverview Commerce Park, shared his enthusiasm for the proposed new service and the role that RCP will play in it.

“When Fred Weber, Inc. set out to start Riverview Commerce Park in 2013, our CEO, Doug Weible, told me that we would be handling containers here someday. While Doug has always had great foresight, I don’t believe even he could have envisioned what the APH team has put together with these amazing new vessels that will revolutionize the container shipping industry, not just in the Midwest, but throughout the world,” said Denton.

The announcement about the new Jefferson County facility follows news of other recent milestones met that are helping to move the new COV service closer to reality. In August of 2020, American Patriot Holdings LLC (APH) and Plaquemines Port Harbor and Terminal District (PPHTD) in Louisiana announced they had signed a letter of intent to develop a multimodal, state-of-the-art container terminal at its facility near the mouth of the Mississippi River, which would be the gateway port for the new COV service. APM Terminals North America was recently announced as the Container-on-Vessel terminal operator for the gateway port and is working with global shippers to integrate this proposed new logistics system with Midwest manufacturers and producers.

“The Plaquemines protected river port location and export/import market strength coupled with the strategic middle-America location of the Herculaneum port in the St. Louis region makes this a very unique supply chain offering for customers and our growth ambitions,” said Brian Harold, Managing Director of APM Terminals. “We look forward to working with all of the partners involved and with state and local leaders to ensure both ports are set up for long-term success.”

The Vessels & The Opportunity

The patented APCT vessels will be built in two sizes with the larger “Liner” vessel traveling between the gateway terminal in Plaquemines and the Mississippi River ports in Memphis, Tenn., and the new port facility in Herculaneum. The smaller “Hybrid” vessel will have a container capacity of 1,800 TEUs and is designed to move through locks and low-lying bridges on the tributary rivers, providing service from those two primary Midwest ports to feeder ports along the Mississippi, Missouri and Illinois rivers in the St. Louis region and other upstream ports, including ports in Kansas City and Jefferson City in Missouri and in Joliet and Cairo in Illinois and Fort Smith in Arkansas.

Both vessels are designed with a patented “Exoskeleton Hull Structure” designed to limit the vessels’ lightship weight to maximize cargo payload. The second patented feature is the “Minimal Wake Bow Structure” which minimizes hull resistance enabling upriver speed of 13 miles per hour with minimal wake.  Expected round trip times to Memphis is six days and St. Louis in 10 days, significantly faster than traditional barge tows. The vessels will also be environmentally friendly, utilizing LNG (liquefied natural gas) power, and cargo flexible with ability to carry a diversity of cargo, including refrigerated containers.

“Given the supply chain disruption we’ve seen over the past two years and the continuing congestion at the West Coast ports, there is no question that shippers need alternatives,” said Mary Lamie, Executive Vice President of Multi Modal Enterprises for Bi-State Development and head of the St. Louis Regional Freightway, which has been working to build relationships with other Midwest ports over the past few years to help advance the COV initiative. “This is a new option to transport freight. The state of Missouri and the St. Louis region already play a critical role as a reliever during supply chain disruptions and our freight advantages are fueling this new opportunity to elevate the Mississippi River and the Missouri River’s role in global trade.

The proposed new service will also be welcomed by members of the agriculture industry, who recognize that currently 50% of U.S. crops and livestock are produced within a 500-mile radius of the St. Louis region, including approximately 80% of corn and soybean acreage.

“Missouri’s river system is an invaluable means of transportation for our state’s number one industry – agriculture. This container-on-vessel service allows our supply chain to remain strong and reliable, delivering products in the most sustainable, efficient and cost-effective way to end-users,” said Gary Wheeler, Missouri Soybeans CEO and executive director. “As Missouri’s leader in agricultural exports, our organization and farmers have been involved and invested in American Patriot Holdings to move more product and aid the state’s economy and environment. Our soybean growers understand this immense value and is why we continue to devote dollars into modernizing our state’s infrastructure.”

To get more details on the new service or request a proposal, shippers can contact Sal Litrico via email at slitrico@americanpatriotholdings.com or phone at 813-924-9031.

shipping
Archives, Global Logistics, Global Shippers 101, Global Trade Daily

How to Avoid 2021 Holiday Shipping Delays

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The question of how to avoid the 2021 holiday shipping delays is hot right now. Both logistics companies and their clients want to get an answer — how can we make this work?

People got used to the fact that they can order anything they want online, and it’ll be on their doorstep in a day or two. They got fond of convenience, so the demand kept growing. However, during the last two years, we’ve seen a shift in the logistics challenges facing the industry. The waits are longer than before, and we can’t expect that they’ll get shorter during the holiday season.

Luckily, things are going fine for now. People are getting their packages, but the real rush is yet to start. So, let’s see how customers can help the retailers, and then we’ll talk about how to prepare for shipping out.

How to Get Your Packages In Time

It’s only natural that you want to surprise your friends and family during the holiday season. If some of them live abroad, you might want to send them a package to unwrap on Christmas morning and share your love that way. However, you’re not the only one thinking this way.

As we’re getting closer to the end of the year, more and more people are sending parcels. Shipping companies are busy, and you need to account for that. Let’s go over a few things you want to keep in mind if you didn’t do your Christmas shopping just yet.

First off, expect delays. We know it sounds contrary to what we’re trying to achieve, but you want to stay realistic.

Secondly, plan ahead. Of course, if there’s a chance that there will be a jam near the end of the month, send or request your packages early. If you can, there’s nothing wrong with doing it right away. You’re better off if they arrive at their destination early than late.

Finally, be prepared to pay the premium. Planning so much in advance is often tricky, especially if you have a lot on your mind. Thus, if you see that you’re already behind, pay the premium to ensure your parcel will arrive when it should.

What Can Businesses Do?

Both retailers and eCommerce companies want to boost their sales, and the end of the year is the best time to do it. If you want to bring your sales up and keep your customers happy, you’ll want to learn how to avoid the 2021 holiday shipping delays. Here’s what you need to do.

Prepare Your Inventory and Packing Supplies

Go over your books and your inventory, and think once again about what is likely to sell a lot at this time. Predict the number of orders you’ll get and make sure you have enough stock to go around.

On top of that, you mustn’t forget about the packing supplies either. No matter how many orders you get, they won’t be of much use if you can’t send the items people want to buy. And according to Murphy’s law, you’ll run out of them in the worst possible moment.

Don’t let this happen to you, and get yourself a bit more packing supplies than you think you’ll need. These aren’t that expensive – so you can afford them, and even if you end up with some leftovers, you’ll use them later.

Set Up Delivery and Return Strategies

If you want to be carefree this holiday season, you must sort out and fine-tune your shipping system. Get in touch with a reliable company and see if you can get a deal. They’ll be more than busy for sure, but if you have a few big shipments to send out, you might even get some kind of discount.

You also want to sort out your return strategy. Some people won’t like what they get, and they’ll want to return it. If you want to improve your eCommerce business and retain customers, your job is to go out of your way and make that possible.

Why Do Holiday Shipping Delays Happen?

If you did everything we talked about, you did everything you could. It’s not like you can take each package and take it where it needs to go by yourself. You’ll have to rely on transport companies to do it for you, and they’re under a lot of stress at the moment. Here are some of the factors that you can’t influence and that can make your shipment run late.

Bad weather. The weather can be unpredictable in the winter, and the shipping company can’t do anything about it. A significant snowfall certainly can push delivery dates a bit further.

A high number of shipments. As we mentioned, more and more people are ordering things online, and the higher the number of shipments is, the higher chances for delays are.

Traffic jams. They’re unpredictable and happen in a split second. So, even if delivery companies know about the existing jams, they can’t predict where the next one will happen.

And that’s all you need to know about how to avoid the 2021 holiday shipping delays. Be honest with your customers, encourage them to order early, and do your shopping as soon as possible.

______________________________________________________________________

Tobi Hook is an experienced transport specialist and a freelance writer. At the moment, he’s working with City Movers on improving their processes and spreading the word about their company. He loves to spend his free time reading sci-fi novels and building model rockets with his son. 

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Archives, Departments, Dispatches, Global Trade Daily, News

YES, VIRGINIA, THERE IS A DESANTIS CLAUSE

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Where some see a stocking full of coal, others see opportunity. Take Florida Governor Ron DeSantis—please! That might be the sentiments of officials at congested seaports outside of the Sunshine State. For instance, there are the ports of Los Angeles and Long Beach, California, where, at press time, Christmas presents remain stranded in around 100 vessels waiting for docks. While the intervention of President Joe Biden has led to plans for 24/7 loading and unloading of containers at impacted terminals in Southern California and elsewhere, challenges remained (again, at time of publication) to implement the strategy. Some have even suggested that open-all-day-and-night operations fail to address the real problems, like the lack of truck drivers and already packed-to-the-brim warehouses. 

And so, against that chaotic backdrop, DeSantis announced on Oct. 19 that Florida seaports have open capacity, can meet holiday demand and—hey, all you shippers muttering “Bah humbug”—come on down.

“Year after year we continue to invest in our seaports, in infrastructure and in workforce education to make sure our supply chain is resilient,” said Da Gov, who was flanked by officials from Port Everglades, Port Tampa Bay, Port Panama City and host Port of Jacksonville (JAXPORT). “I’m especially proud of Florida’s seaports. They are crown jewels in our state.”

Yes, and those jewels have been shined with $1 billion in state investments since 2019, according to his office. Controversial because of his ties to former President Donald Trump and the supposed “steal,” DeSantis may have distanced himself even more from certain other attendees of U.S. governor conventions by suggesting shippers and out-of-state businesses should choose Florida.

“While other U.S. ports are just now announcing around-the-clock operations, in Florida many of our ports are used to serving Florida farmers, families and businesses with 24-hour operations,” he said. “As the rest of the nation faces rampant inflation and businesses stare down unprecedented supply chain problems, our message is this: Florida is here, we have capacity, we have incentive packages to help businesses who want to move here and we are going to make sure Americans get their Christmas Gifts this season.” 

Intradco Global
Archives, Global Trade Daily, News

Intradco Global Transports 89 Pigs Across Russia on Board a Dedicated Charter Flight

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In December, Intradco Global teamed up with ATRAN Airlines, an express carrier within Volga-Dnepr Group, to transport 89 pigs across Russia from Vnukovo International Airport (VKO) to Vladivostok International Airport (VVO) on behalf of their client, a pig breeding organization.

Despite the small shipment, the pigs traveled in a dedicated B737F aircraft within custom-made wooden crates designed for optimal comfort and loading.

The pigs were transported to Moscow for their flight in trucks from Denmark, but there were some transit delays. Intradco Global closely monitored the pigs’ journey and coordinated with the airport and airline to ensure that the animals were not subject to any further delays upon their arrival.

Heavy snow presented a further challenge during loading, as the pigs needed to be transferred from their truck to their crates as quickly as possible to prevent them, their crates and their bedding from getting wet. The client, Vnukovo Cargo staff and the Intradco Global team worked in close cooperation to ensure the pigs were loaded quickly and remained dry and comfortable despite the inclement weather.

Image: Chapman Freeborn

Intradco Global Senior Charter Broker, Dane Riecker, said, “Despite the smaller size of this shipment it did not come without complications for us to overcome along the way. The flight was slightly delayed, and the pigs gained size and weight during this period. Due to this, we had to be on our toes to make several changes related to the sizes and heights of crates. Also, customs on the Russian border were quite complex yet we managed to navigate this thanks to the constant assistance of our Russian Chapman Freeborn colleagues.”

This combination of efforts to overcome unavoidable challenges caused by the snow resulted in a successful and punctual flight, despite prior delays. Cargo preparation and loading went smoothly, and the flight departed on time with no further issues during the journey. Dane added, “We are very glad that all the pigs arrived well and are now settling into their new farm.”

Intradco Global is the world’s leading equine, livestock and exotics transportation air charter specialist, with over 30 years’ experience in providing the safest air charter logistics for animals of all shape and sizes. Part of the Chapman Freeborn family, Intradco Global is a member of Avia Solutions Group, a leading global aerospace services group comprising of more than 7,000 aviation professionals in almost 100 offices across the globe.