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Personal Protective Equipment for Infection Control Market to Hit USD 17.1 Billion by 2026

personal protective equipment

Personal Protective Equipment for Infection Control Market to Hit USD 17.1 Billion by 2026

The global Personal Protective Equipment for Infection Control Market should increase from USD 10 billion in 2019 to USD 17.1 billion in 2026.

The massive outbreak of COVID-19 has produced a significant rise in the revenue scale of global personal protective equipment for infection control market. Global Market Insights, Inc., predicts the personal protective equipment for infection control industry to garner appreciable gains over 2020-2026 while depicting a CAGR of -19.3 percent through 2026, perhaps due to the expanding number of surgical procedures and rising awareness about personal safety for infectious diseases.

The lucrative growth map of personal protective equipment for infection control market is evident from the surging importance of safety at vivid workplaces lined with stringent regulatory reforms pertaining to the safety standards. Numerous regulatory authorities have addressed safety standards during operations in manufacturing industries and various service organizations like hospitals and research laboratories.

Moreover, standard operating protocol developed for security and safety against infections at the workplace would favor the business growth over the due course of time. Although the PPE for infection control is unveiling new trends across the globe, the complexity and dearth of time in the production of these might hamper the industry growth to some extent.

Categorized into products, types, and end-use industries, the personal protective equipment for infection control market across the hand and arm product segment is poised to perform exceptionally well in the ensuing years. For the record, hand and arm personal protective equipment market acquired a business share of $4.2 million in 2019. The momentous growth of this segment can aptly be ascribed to the increased risk of infection worldwide. Besides, skin disorder, given the direct contact to toxic pathogens and radioactive materials would propel the industry growth in the years ahead.

Considering the type bifurcation, the disposable PPE market held a considerable revenue share of 74 percent in 2019 and is touted to witness appreciable growth during the mentioned timeframe owing to its ability to reduce risk of infection as it is disposed of after use.

Elaborating further, personal protective equipment for infection control market from the research and diagnostic laboratories segment is set to accrue phenomenal proceeds in 2020, fundamentally due to the growing R&D activities in order to bring forth advanced solutions for diagnosis and treatment. In addition to this, elevating COVID-19 cases worldwide has enunciated the massive demand for PPE in diagnostic laboratories for effective security and functioning.

Personal Protective Equipment for Infection Control market report provides a comprehensive landscape of the industry, accurate market estimates and forecast split by product, application, technology, region and end-use. All quantitative information is covered on a regional as well as country basis. The report provides valuable strategic insights on the Personal Protective Equipment for Infection Control market, analyzing in detail industry impact forces including growth drivers, pitfalls, and regulation evolution. The report also includes a detailed outlook on the Personal Protective Equipment for Infection Control market competitive environment, diving into the industry position of each major company along with the strategic landscape.

Personal Protective Equipment for Infection Control market report is an all-inclusive document, compiled and designed to provide best-in-class research, insightful analysis and accurate quantitative data. The coverage of this research is the most extensive when compared to other similar studies available on Personal Protective Equipment for Infection Control market. The industry ecosystem information presented in this report is next-to-none and aims to address all stakeholders of the industry, irrespective of their size and business function. Details of segmentation and cross reporting structure, wherever feasible, makes this Personal Protective Equipment for Infection Control market research one of its kind to offer the most in-depth, readily available data.

Speaking of the regional demographics, the United States is poised to emerge as one of the most remunerative growth regions for industry given the current coronavirus outbreak. It has been reported that the country captured an overall business share of more than 90 percent of the North America PPR for infection control market in 2019.

This growth is ascribed to the expanding development activities paired with rising healthcare spending. It is imperative to mention that, the ongoing disease spread has urged myriad companies to undertake development activities with an aim to offer effective and accurate solutions to abate the infection transmission across the country while boosting its stance in the global market.

Although the rising patient pool has produced a shortage of PPE, various organizations like 3M Company, Honeywell, and multiple others, have laid their focus on establishing M&As to manage the increasing demand for these. Thus, these strategic initiatives would enhance the industry outlook over the forecast period.

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Source: Global Market Insights, Inc.

risk

How to Get a Handle on Risk in Uncertain Times: 10 Important Considerations

Risk: It’s the operative word on everyone’s mind right now. Whether it’s COVID-19 or oil prices, supply chain impacts or financial market concerns, understanding the impact of macro and micro-events, assessing their impact and putting in place the right action plans to mitigate that risk as best as possible is the priority task at hand.

Here we’ll examine ten steps to consider to ensure you’re being as thoughtful and rigorous as possible in your response to risk.

1. Take Care of Your PeopleHopefully, this has already been priority number one for your business after the past few weeks. How do we safeguard our people? How do we handle work from home – voluntary versus mandatory? What other flexible resourcing options do we provide – from sick leave to absenteeism considerations? What are the IT implications and subsequent human resource and capacity management concerns we need to consider and fully factor in? Err on the side of caution. Better to be safe than sorry.

2. Analyze Internal Risks – Before you can do that, you need to galvanize the right teams to be able to understand, assess and action against those risks. It’s critical to build the right cross-functional teams to be able to look at, and understand, the relevant issues to consider. This will involve finance, R&D (depending on your business) and marketing and sales. It will also involve teams like quality and sustainability leaders, as there will be implications and follow on ramifications despite your very best efforts.

3. Conduct Scenario Analyses – For critical categories, it’s important to get a handle on what alternative demand/supply options are. What are the pessimistic versus expected versus optimistic cases depending on what happens with the current situation, both in terms of the pandemic but also in terms of current and expected economic conditions? As part of any such assessment, you’ll need to score, assign probabilities and weights and adjust your thinking and actions accordingly.

4. Talk to Customers –This doesn’t tend to be the first thing people think about when it comes to procurement, but understanding the demand side implications for your business will be essential. How will demand be disrupted? Will there be specific products in your portfolio that will be more directly or severely impacted? Will this result in demand cutbacks or surges? Where will you source supply from? Can you cut back supply needs for others? How will buying patterns change – will there be channel shifts from offline to online? How does that play out in terms of critical suppliers and critical buys and requirements in the near to medium terms? Maintaining a dialogue with customers to understand their needs and issues and where all of this plays through for your team is essential.

5. Develop Plans for Strategic Categories –You’ll need to revisit your plans and the related risks around your most critical categories during a time of crisis. Make sure that these plans have been reviewed, the pressure points tested, the risk points analyzed and alternative plans considered. This could mean enhancing inventory levels (and rethinking inventory buffers based on the scenario planning we talked about earlier), assessing implications for delivery performance, gaining a view of multi-tiered supplier performance, increased inbound category visibility and more.

6. Examine Logistics Implications – By the same token, businesses must assess the logistics implications both inbound and outbound, either to make products or to ensure delivery. This has cost and timeline implications. All modes of transportation can be seen to be impacted, not least of which is shipping impacts – especially to and from China, but elsewhere, as well – whether these impacts are halts on movements, ramp downs, or the subsequently phased ramp back up. Or bypassing some of these options and going to airfreight which presents another level of cost to timeline tradeoffs.

7. Assess Liquidity – This will be critical and will call for a stronger partnership and alliance with finance. Looking at cash positions, assessing payables, and of course extending that into receivables, etc. will be essential. Add to this, talk of tightening credit markets and this makes it all the more important. Cash as always will be king if we need to endure near term instabilities, revenue disruptions, supply chain impacts, sourcing problems, and more

8. Assess Supplier Health – Part and parcel to all of this is assessing supplier health and evaluating who will be the most impacted. A clear view of your supplier segments – strategic versus mid-tier versus everyone else – is essential so you can focus your time and analysis accordingly.

For the most strategic suppliers, it’s critical to have a multi-tiered view of their supply base and related dependencies so you can adequately assess their performance and supply chain bottlenecks. This will involve structured risk analyses – looking across multiple variables beyond financials, to operational performance, to industry performance factors, to geographic and locational concerns and more. You’ll also need to identify alternate supply sources to shift production as and where needed, and as quickly as possible. Not all of this can be done at a moment’s notice. Some of it should have been done as part of a prior risk assessment exercise.

9. Think Ahead – Businesses can’t afford to simply think about today. Consider what the next three to six months look like. This is where scenario planning comes into play. It is critical to assess not only how you can react now but also how to prepare for eventualities later, when things are either fully back to normal or in some altered state based on longer-lasting ramifications from the events of today.

10. Work With Facts and Manage Emotion – Fundamentally, the most important thing you can do is to continuously monitor changes in a structured fashion. Have a programmed information collection and analysis mechanism. If we accept that the crisis is still unfolding and that the true impacts from a supply chain disruption perspective may not reveal themselves for months, we need to take tangible steps.  This can be done by establishing a process to monitor other regions outside the infected areas that could be impacted. Are ports outside the infected areas being impacted through disruption or through new regulations to protect against transmission of the virus?  Are suppliers struggling financially without access to the Chinese markets, jeopardizing their viability? Data will be important but data converted to relevant insight for your specific supply chain situation will be essential.

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About the author

Omer Abdullah is Co-founder and Managing Director of The Smart Cube and is responsible for managing the company’s Americas business.Omer has more than 25 years of management consulting, global corporate and industry experience across North America, Europe and Asia.

 Prior roles include A.T. Kearney (North America), Warner Lambert (USA) and The Perrier Group (Asia-Pacific). Omer has an MBA from the University of Michigan at Ann Arbor, USA and a BBA from the University of East Asia.

compliance

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

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

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

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

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

 Avoiding U.S. Sanctions

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

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

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

Compliance Under Commercial Export Laws

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

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

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

Recommended Steps for Ensuring Compliance and Mitigating Risk

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

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

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

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

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

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

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

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

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 Doreen Edelman and Zarema Jaramillo are attorneys at Lowenstein Sandler.

U.S. Poultry Market – Consumption Grows Over the Fourth Consecutive Year

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

The revenue of the poultry market in the U.S. amounted to $24.5B in 2018, remaining stable against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +3.0% from 2007 to 2018; the trend pattern remained consistent, with somewhat noticeable fluctuations being observed over the period under review. The most prominent rate of growth was recorded in 2008 when the market value increased by 19% y-o-y. Poultry consumption peaked at $24.8B in 2017, and then declined slightly in the following year.

Production in the U.S.

In 2018, the amount of poultry produced in the U.S. amounted to 22M tonnes, approximately reflecting the previous year. The total output volume increased at an average annual rate of +1.2% over the period from 2007 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations throughout the analyzed period.

Exports from the U.S.

In 2018, exports of poultry from the U.S. stood at 1.9M tonnes, lowering by -10.3% against the previous year. In general, poultry exports continue to indicate an abrupt decline. In value terms, poultry exports amounted to $2.2B (IndexBox estimates) in 2018.

Exports by Country

Mexico (395K tonnes) was the main destination for poultry exports from the U.S., accounting for a 21% share of total exports. Moreover, poultry exports to Mexico exceeded the volume sent to the second major destination, China, Hong Kong SAR (128K tonnes), threefold. Angola (92K tonnes) ranked third in terms of total exports with a 4.9% share.

From 2007 to 2018, the average annual growth rate of volume to Mexico stood at +2.2%. Exports to the other major destinations recorded the following average annual rates of exports growth: China, Hong Kong SAR (+5.1% per year) and Angola (+1.2% per year).

In value terms, Mexico ($493M) remains the key foreign market for poultry exports from the U.S., comprising 22% of total poultry exports. The second position in the ranking was occupied by China, Hong Kong SAR ($202M), with a 9.1% share of total exports. It was followed by Canada, with a 6.1% share.

Export Prices by Country

The average poultry export price stood at $1,181 per tonne in 2018, falling by -3.7% against the previous year. Over the last eleven years, it increased at an average annual rate of +1.5%. Export prices varied noticeably by the country of destination; the country with the highest export price was Canada ($2,458 per tonne), while the average price for exports to South Korea ($598 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of export prices was recorded for supplies to Russia, while the export prices for the other major destinations experienced more modest paces of growth.

Imports into the U.S.

In 2018, approx. 114K tonnes of poultry were imported into the U.S.; growing by 5.4% against the previous year. Over the period under review, the total imports indicated a prominent expansion from 2007 to 2018: its volume increased at an average annual rate of +4.0% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, the poultry imports decreased by -34.0% against 2015 indices. In value terms, poultry imports stood at $262M (IndexBox estimates) in 2018.

Imports by Country

Chile (68K tonnes) and Canada (41K tonnes) were the main suppliers of poultry imports to the U.S., together accounting for 97% of total imports.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main suppliers, was attained by Chile.

In value terms, the largest poultry suppliers to the U.S. were Chile ($137M) and Canada ($115M), with a combined 96% share of total imports.

Import Prices by Country

In 2018, the average poultry import price amounted to $2,303 per tonne, growing by 4.4% against the previous year. Over the period from 2007 to 2018, it increased at an average annual rate of +2.3%. Average import prices varied somewhat amongst the major supplying countries. In 2018, the country with the highest import price was Canada ($2,771 per tonne), while the price for Chile totaled $2,007 per tonne.

From 2007 to 2018, the most notable rate of growth in terms of import prices was attained by Canada.

Source: IndexBox AI Platform

sanitary paper

U.S. Sanitary Paper Product Market – Chinese Imports Rose 15% to $677M in 2018, Despite a Trade War

IndexBox has just published a new report: ‘U.S. Sanitary Paper Product Market. Analysis And Forecast to 2025’. Here is a summary of the report’s key findings.

In 2018, the revenue of the sanitary paper product market in the U.S. amounted to $12B. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

Overall, sanitary paper product consumption continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2014 when the market value increased by 2.3% y-o-y. Over the period under review, the sanitary paper product market attained its maximum level at $12.2B in 2015; however, from 2016 to 2018, consumption remained at a lower figure.

Sanitary Paper  Production in the U.S.

In value terms, sanitary paper production (disposable diapers and similar disposable products, and sanitary tissue) totaled $11.1B in 2018.

Exports from the U.S.

In 2018, the amount of sanitary paper product exported from the U.S. amounted to 128K tonnes, going up by 5.6% against the previous year. Over the period under review, sanitary paper product exports, however, continue to indicate a mild reduction. The growth pace was the most rapid in 2014 with an increase of 8.7% against the previous year. In that year, sanitary paper product exports reached their peak of 153K tonnes. From 2015 to 2018, the growth of sanitary paper product exports remained at a lower figure.

In value terms, sanitary paper product exports amounted to $373M (IndexBox estimates) in 2018. In general, sanitary paper product exports, however, continue to indicate a measured decrease. The growth pace was the most rapid in 2018 with an increase of 8.4% year-to-year. Exports peaked at $443M in 2014; however, from 2015 to 2018, exports remained at a lower figure.

Exports by Country

Japan (17K tonnes), Belgium (16K tonnes) and the Dominican Republic (10K tonnes) were the main destinations of sanitary paper product exports from the U.S., with a combined 34% share of total exports.

From 2013 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Belgium (+77.9% per year), while the other leaders experienced more modest paces of growth.

In value terms, Japan ($50M), Belgium ($38M) and the Dominican Republic ($29M) appeared to be the largest markets for sanitary paper product exported from the U.S. worldwide, with a combined 31% share of total exports.

Belgium recorded the highest rates of growth with regard to exports, among the main countries of destination over the last five years, while the other leaders experienced more modest paces of growth.

Export Prices by Country

In 2018, the average sanitary paper product export price amounted to $2,904 per tonne, going up by 2.7% against the previous year. Overall, the sanitary paper product export price, however, continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2018 when the average export price increased by 2.7% year-to-year. The export price peaked at $2,943 per tonne in 2013; however, from 2014 to 2018, export prices failed to regain their momentum.

There were significant differences in the average prices for the major foreign markets. In 2018, the country with the highest price was South Korea ($3,747 per tonne), while the average price for exports to Belgium ($2,352 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to Guatemala, while the prices for the other major destinations experienced more modest paces of growth.

Imports into the U.S.

In 2018, the sanitary paper product imports into the U.S. stood at 451K tonnes, going up by 10% against the previous year. In general, the total imports indicated a strong expansion from 2013 to 2018: its volume increased at an average annual rate of +10.6% over the last five-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, sanitary paper product imports increased by +65.6% against 2013 indices. The most prominent rate of growth was recorded in 2014 with an increase of 15% y-o-y. Over the period under review, sanitary paper product imports attained their peak figure in 2018 and are expected to retain its growth in the immediate term.

In value terms, sanitary paper product imports amounted to $920M (IndexBox estimates) in 2018. The total import value increased at an average annual rate of +10.0% from 2013 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The growth pace was the most rapid in 2014 when imports increased by 18% against the previous year. Imports peaked in 2018 and are expected to retain its growth in the immediate term.

Imports by Country

In 2018, China (367K tonnes) constituted the largest sanitary paper product supplier to the U.S., with a 82% share of total imports. Moreover, sanitary paper product imports from China exceeded the figures recorded by the second-largest supplier, Indonesia (17K tonnes), more than tenfold.

From 2013 to 2018, the average annual growth rate of volume from China amounted to +10.3%.

In value terms, China ($677M) constituted the largest supplier of sanitary paper product to the U.S., comprising 74% of total sanitary paper product imports. The second position in the ranking was occupied by Indonesia ($25M), with a 2.7% share of total imports.

From 2013 to 2018, the average annual growth rate of value from China stood at +11.3%.

Import Prices by Country

In 2018, the average sanitary paper product import price amounted to $2,041 per tonne, surging by 4.7% against the previous year. Over the period under review, the sanitary paper product import price, however, continues to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2018 an increase of 4.7% y-o-y. The import price peaked at $2,171 per tonne in 2014; however, from 2015 to 2018, import prices failed to regain their momentum.

Average prices varied somewhat amongst the major supplying countries. In 2018, the country with the highest price was China ($1,842 per tonne), while the price for Indonesia totaled $1,454 per tonne.

From 2013 to 2018, the most notable rate of growth in terms of prices was attained by China.

Companies Mentioned in the Report

Johnson & Johnson, Georgia-Pacific, Marcal Manufacturing, Hoffmaster Group, Professional Disposables, Cascades Tissue Group – North Carolina, Attends Healthcare Products, Principle Business Enterprises, Royal Paper Converting, First Quality Baby Products, Orchids Paper Products Company, U.S. Alliance Paper, Associated Hygienic Products, Allied West Paper Corp., Cascades Tissue Group – Pennsylvania, Playtex Products, Leaf River Cellulose, Rose’s Southwest Papers, Playtex Manufacturing, Tambrands Sales Corp., The Procter & Gamble Paper Products Company, The Tranzonic Companies, Tz Acquisition Corp., First Quality Products, Marcal Paper Mills, Soundview Paper Mills, Soundview Paper Holdings, Omganics

Source: IndexBox AI Platform

imports

U.S. Imports of Fats And Oils Refining and Blending Doubled over the Last Five Years

IndexBox has just published a new report: ‘U.S. Fats And Oils Market. Analysis And Forecast to 2025.’ Here is a summary of the report’s key findings.

In 2018, the revenue of the fat and oil market in the U.S. amounted to $10.6B. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). Over the period under review, fat and oil consumption continues to indicate a decrease. The pace of growth was the most pronounced in 2016 when the market value decreased by -4% year-to-year. Fat and oil consumption peaked at $18.6B in 2013; however, from 2014 to 2018, consumption stood at a somewhat lower figure.

U.S. Fat And Oil Production

In value terms, fat and oil production totaled $10.5B in 2018. In general, fat and oil production continues to indicate a decline. The most prominent rate of growth was recorded in 2016 with a decrease of -4% year-to-year. Over the period under review, fat and oil production reached its peak figure level at $18.6B in 2013; however, from 2014 to 2018, production stood at a somewhat lower figure.

In value terms, shortening and cooking oils ($9.1B) constituted the leading product category. The second position in the ranking was occupied by margarine, butter blends, and butter substitutes ($1.3B).

From 2013 to 2018, the average annual rate of growth in terms of the production volume of shortening and cooking oils stood at -11.4%. With regard to the other produced products, the following average annual rates of growth were recorded: margarine, butter blends, and butter substitutes (-6.6% per year) and other fats and oils refining and blending (+20.4% per year).

Exports from the U.S.

In 2018, the amount of fats and oils exported from the U.S. stood at 22K tonnes, surging by 47% against the previous year. Over the period under review, the total exports indicated a strong expansion from 2013 to 2018: its volume increased at an average annual rate of +6.8% over the last five-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, fat and oil exports increased by +126.1% against 2015 indices. The pace of growth was the most pronounced in 2018 when exports increased by 47% year-to-year. In that year, fat and oil exports attained their peak and are likely to continue its growth in the immediate term.

In value terms, fat and oil exports stood at $26M (IndexBox estimates) in 2018. Over the period under review, the total exports indicated strong growth from 2013 to 2018: its value increased at an average annual rate of +6.8% over the last five years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, fat and oil exports increased by +115.0% against 2015 indices. The most prominent rate of growth was recorded in 2018 when exports increased by 39% against the previous year. In that year, fat and oil exports reached their peak and are likely to continue its growth in the immediate term.

Exports by Country

Libya (5.9K tonnes), Egypt (3.1K tonnes) and India (3K tonnes) were the main destinations of fat and oil exports from the U.S., with a combined 55% share of total exports.

From 2013 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by India (+270.1% per year), while the other leaders experienced more modest paces of growth.

In value terms, Libya ($5.1M) emerged as the key foreign market for fat and oil exports from the U.S., comprising 19% of total fat and oil exports. The second position in the ranking was occupied by India ($2.3M), with a 8.6% share of total exports. It was followed by Egypt, with a 8.2% share.

From 2013 to 2018, the average annual growth rate of value to Libya was relatively modest. Exports to the other major destinations recorded the following average annual rates of exports growth: India (+201.4% per year) and Egypt (0.0% per year).

Export Prices by Country

The average fat and oil export price stood at $1,210 per tonne in 2018, going down by -5.7% against the previous year. Over the last five-year period, it increased at an average annual rate of +3.1%. The growth pace was the most rapid in 2015 an increase of 23% year-to-year. The export price peaked at $1,283 per tonne in 2017, and then declined slightly in the following year.

Prices varied noticeably by the country of destination; the country with the highest price was South Korea ($4,008 per tonne), while the average price for exports to Egypt ($690 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to South Korea, while the prices for the other major destinations experienced more modest paces of growth.

Imports into the U.S.

In 2018, the fat and oil imports into the U.S. stood at 55K tonnes, increasing by 18% against the previous year. In general, fat and oil imports continue to indicate a skyrocketing expansion. The pace of growth was the most pronounced in 2014 with an increase of 42% y-o-y. Imports peaked in 2018 and are likely to continue its growth in the immediate term.

In value terms, fat and oil imports totaled $154M (IndexBox estimates) in 2018. Over the period under review, the total imports indicated remarkable growth from 2013 to 2018: its value increased at an average annual rate of +20.1% over the last five-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, fat and oil imports increased by +80.1% against 2013 indices. The pace of growth was the most pronounced in 2018 when imports increased by 18% y-o-y. In that year, fat and oil imports reached their peak and are likely to continue its growth in the immediate term.

Imports by Country

In 2018, Indonesia (16K tonnes) constituted the largest supplier of fat and oil to the U.S., with a 29% share of total imports. Moreover, fat and oil imports from Indonesia exceeded the figures recorded by the second-largest supplier, Spain (6.1K tonnes), threefold. India (5.9K tonnes) ranked third in terms of total imports with a 11% share.

From 2013 to 2018, the average annual rate of growth in terms of volume from Indonesia stood at +105.7%. The remaining supplying countries recorded the following average annual rates of imports growth: Spain (+81.4% per year) and India (+8.4% per year).

In value terms, Indonesia ($49M) constituted the largest supplier of fat and oil to the U.S., comprising 32% of total fat and oil imports. The second position in the ranking was occupied by Malaysia ($15M), with a 10% share of total imports. It was followed by India, with a 7.6% share.

From 2013 to 2018, the average annual rate of growth in terms of value from Indonesia stood at +113.3%. The remaining supplying countries recorded the following average annual rates of imports growth: Malaysia (+52.6% per year) and India (+9.8% per year).

Import Prices by Country

In 2018, the average fat and oil import price amounted to $2,774 per tonne, flattening at the previous year. Over the period under review, the fat and oil import price continues to indicate an abrupt decline. The most prominent rate of growth was recorded in 2016 an increase of 26% year-to-year. The import price peaked at $3,840 per tonne in 2013; however, from 2014 to 2018, import prices stood at a somewhat lower figure.

Prices varied noticeably by the country of origin; the country with the highest price was Germany ($7,513 per tonne), while the price for Ecuador ($1,043 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was attained by Malaysia, while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox AI Platform

5 KEYS TO EFFECTIVE PLANNING FOR CAT EVENTS

The National Oceanic and Atmospheric Administration (NOAA) recently issued its forecast for the 2019 Atlantic and Pacific Hurricane Seasons. Specifically, NOAA forecast 9-15 named storms, 4-8 hurricanes and 2-4 major (Category 3+) hurricanes between June and November for the Atlantic Basin. It also forecast 15-22 named storms, 8-13 hurricanes, including 4-8 major hurricanes, through November for the Eastern Pacific Basin.

Although NOAA indicated its forecasts are “near normal” for the Atlantic Basin and “above average” for the Pacific, even one storm making landfall in a populated area can have dire consequences for local residents and businesses, as well as their trading partners and customers. 

Business leaders and managers whose enterprises and key trading partners are located in areas vulnerable to catastrophes need to plan effectively and well in advance for any potential disaster. Here are five keys for effective disaster planning and management.

1. Develop and test an emergency response plan.

Create a team of key personnel and external resources needed to prepare for and respond to a disaster affecting your operations. Besides members from your risk management, executive, legal, accounting/finance, IT, HR, operations, and communications, the team should include your insurance broker, risk consultant, claims adjuster, and restoration contractors for emergency repairs of damaged facilities.

Have multiple contact information (including office, home and cellular phones; business and personal email) for each individual and create call trees to contact everyone on a timely basis.

Designate an internal leader, such as the risk manager or CFO, and alternates to coordinate  response and claims teams, and oversee the plan’s implementation.

Next, carefully assess the potential vulnerabilities of each facility, such as wind damage, flooding, and fire. Conduct a comprehensive evaluation of your organization’s facilities and locations situated in regions prone to hurricanes so you have a full understanding of business interruption and asset values at risk from these events.

A key lesson from past storms: Planning must address not only wind-related loss, but also storm surge, flooding, extended power outages, and interruption of land line, cell phone and internet access, as well as the potential for sustained site inaccessibility.

List all measures needed to prepare for such events in advance, as well as to respond at each stage as they unfold, including pending, immediately prior, during, following, preparation of the insurance claim, process management or repair and restoration through full recovery.

Develop a project flowchart or playbook so everyone involved understands the plan and their responsibilities. New planning “apps” on mobile devices can ensure all team members have ready access to all required details as storms approach and their actions are needed.

Rehearse the plan and test it using tabletop exercises. Be sure to update it regularly to account for any changes in personnel, operations, and activity.  

2. Know emergency procedures and resources.

Well in advance of any event, contact the local Emergency Management Office to gain an understanding of community evacuation plans. Have a citizen band radio system at each facility to track storms and obtain critical government notifications.

3. Engage employees.

Inform all employees of your hurricane and natural disaster plan and have supervisors explain elements that apply to them, including their individual responsibilities when storms occur in areas where they live and work. They should know facility shutdown procedures, including how, when and by whom they are to be implemented and communicated.

Prepare for events that occur when employees are at any facility; make sure they have access to adequate emergency supplies (such as 72 hours of nonperishable food, potable water, first aid kits, lighting and communications devices) and safe locations onsite if they need refuge from floodwaters or structural collapse.

4. Safeguard facilities and critical equipment.

Plan to protect or secure outside equipment and inventory. Safeguard windows against breakage with permanent storm shutters or cover them with marine plywood as storms approach. Divert water from holes in foundations, doorways and sills, and other openings. Inspect roofs, HVAC systems, elevators, and loading docks for potential exposures.

Be prepared to anchor or move yard structures and equipment (trailers, cranes, loose yard storage, high profile materials, storage racks, etc.) that may be vulnerable to high winds. If sites contain drums of hazardous chemicals, move them to sheltered areas.

If your inventory includes perishable goods, have back-up generators for refrigerators/freezers or arrange transport to another facility. If possible, move susceptible equipment to higher levels.

5. Create a detailed business continuity plan.

Building on the measures taken in the emergency response plan, work with your team to create a comprehensive business continuity plan. Set priorities by identifying critical operations where any downtime or outages will have the greatest impact on the company’s revenues and business, including potential loss of market share, customers and key employees.

Be prepared to move records, computer equipment, and other sensitive equipment/valuable items to other locations in the event of a pending disaster. Additional advance steps include:

-Create electronic back-ups of critical paper documentation.

-Prepare for disruptions in telecommunications, including email and internet access.

-Plan for electric power outages and utility service disruption. Fill diesel engine-driven emergency generators and fire pump fuel tanks. Maintain extra supplies of fuel.  

-Develop a system to advise customers and suppliers of a potential disruption in operations, as well as for keeping them informed of progress in restoring operations after an outage.

-Check key suppliers’ plans to address any disruptions in service or the supply chain.

All measures should be documented, communicated to individuals involved, and the entire plan should be reviewed and updated regularly.

Besides helping protect employees and properties, emergency response and business continuity plans are a key part of a company’s property and business interruption insurance application process. Often, evidence of comprehensive and robust preparation may have an impact on the availability and cost of related insurance protection.

With appropriate planning, businesses can help minimize the potential impacts of hurricanes and other disasters on their operations. As the 2019 hurricane season progresses, these measures can reduce the chances of storm-related employee injuries and property damage, as well as accelerate recovery and reduce potential losses.

__________________________________________________________________

Peter Jagger, a managing director, Aon Global Risk Consulting, works with the firm’s clients on their pre-loss and post-loss planning and risk mitigation. During an insurance industry career that has spanned more than 25 years, he has been involved in claims program design and development, and the preparation of property claims for a variety of industries. Previously, at Aon, he served as director of Property/Casualty Claims/Specialty Services responsible for the oversight and management of the property and casualty claim staff. Over the years, he advised clients around the world that have sustained losses due from such large-scale disaster events as Hurricane Georges, Super Typhoon Pongsona, Hurricane Katrina, Hurricane Wilma, Hurricane Ike, Thailand flood, and Super Storm Sandy. 

Fintechs

Excellent Service is the Hero of the Fintech World

Customer service isn’t what it used to be—in a good way. The financial world has witnessed rapid technological advancements over the last century, but customer service remains a steadfast priority through it all.

Ensuring a good experience for buyers not only gives companies an edge over their competition, but it has practically become a requirement for company growth. With the increasing popularity of information-sharing websites and apps like Facebook or Yelp, reputations can expand or shatter within moments.

Fintechs are in a unique position as the liaison between customers and their suppliers. However, they tend to limit services offered to suppliers in favor of a more customer-oriented focus. As such, supplier support remains a well of untapped potential. How is this important, and why should fintechs care about suppliers?

Redefining “end-to-end”

“End-to-end,” from a B2B payment perspective, defines the customer’s processes from the time they receive an invoice to final reconciliation. Fintechs that prioritize customer-focused solutions risk their reputations by not providing decent supplier support. In reality, suppliers are customers too. Though they may not be required to pay for the back-end services that fintechs offer, they are just as capable of leaving reviews of their poor experiences on social media.

Nvoicepay recognized this long ago and redefined what “support” meant in the B2B payments space by dedicating teams for both customer and supplier assistance. Our daily interactions with suppliers act as a valuable means for us to determine the most beneficial improvements to our solution. It has paid off so far: The services we provide to suppliers who seek payment assistance have earned our support teams a consistent satisfaction rating of 98%. Clearly, the need for AR services within AP solutions is out there.

Suppliers: The new customers

Fintechs often completely disregard supplier support. In some ways, this approach makes sense: customers pay for the service. This often means that suppliers are reduced to a “commodity” status. Tales of suppliers being strong-armed into accepting certain payment types are rampant. To no one’s surprise, this method for supporting customers does not encourage stable, long-term business relationships.

To improve our own services, Nvoicepay has explored ways to make suppliers feel like more than just a cog in their customer’s AP process.

Nvoicepay’s vendor enablement services offer a medley of benefits that ease the burden from both AP and AR teams. When a supplier joins our robust network, they become immediately payable by all current and future customers. When the supplier needs to update their information, a single call or email to Nvoicepay covers all bases, thus limiting touchpoints and mispayment risks. Customers aren’t required to maintain extensive payment details for their suppliers—it’s all done in-house by Nvoicepay’s supplier support team.

Making payments is also a breeze. Suppliers who are used to being pressured into specific payment types are pleasantly surprised to be offered alternatives. Credit card—commonly preferred by customers looking to limit their payment file count—can be a hardship for some suppliers. Nvoicepay’s holistic approach enables customers to submit a single payment file for all payment types, letting suppliers choose from credit card, ACH, or check options without extra work on the AP side. This symbiotic process maintains healthy business relationships and improves workflows for all parties involved.

A new industry standard

By choosing a SaaS that treats your suppliers well, you’re getting the whole AP support package. Without supplier services, any payment follow-ups wind up in the laps of your AP team—not exactly the groundbreaking automation you were promised.

While it’s likely not the first thing on your mind when you browse for AP solutions, choosing one that also benefits your suppliers gives you an overlooked advantage, and will leave you with both a happier AP team and satisfied suppliers. Ultimately, a solution without a holistic approach to the “end-to-end” process is no solution at all.

Alyssa Callahan is a Technical Marketing Writer at Nvoicepay. She has four years of experience in the B2B payment industry, specializing in cross-border B2B payment processes.

EXPORTING THE ALL-AMERICAN ROAD TRIP

Freedom and Community at the Same Time

Pull into a KOA (Kampgrounds of America) and you’ll find tremendous variety among recreational vehicles (RVs) parked there. Some are full on motor homes with big screen TVs and leather sofas. Others are utilitarian pop-up trailers for sleeping and tossing some cooking necessities into a small fridge. The ability to right-size and customize your temporary home makes RVs appealing and accessible to a wide range of customers on different budgets, whether they be renters for summer camping or retirees touring the country at a leisurely pace.

Generation X (the under 55 crowd) is taking over as the largest group of RV buyers among the 9 million or so Americans who own an RV. We don’t own an RV, but on our first RV family road trip this summer, we found bustling sites with bingo and kids on hover boards, sites with quiet s’more-makers and star-gazers, to downright serene sites on mountain tops where retirees gathered to train their miniature dogs on obstacle courses. The one thing they all had in common was respect for personal space combined with a sense of community. Hand waves are obligatory and people offered such genuine smiles that I thought I was supposed to know them already from somewhere.

RV Capital of the World

Elkhart County, Indiana is home to more RV production than anywhere else in the country – a full 80 percent of American-made RVs come out of Northern Indiana. The Recreational Vehicle Industry Association (RVIA) is bullish about the industry’s growth prospects. RV sales and rentals benefit not only the vehicle manufacturers and dealers, but also the hundreds of specialty component suppliers throughout the United States. The RV boom supports the tourism industry more generally (another competitive “export” of the United States) with positive indirect impacts on the more than 45,000 Americans working on campgrounds and elsewhere in the travel and tourism services sector. Overall, the RV industry estimates it has makes a $50 billion contribution through direct, indirect, and induced economic impact on the U.S. economy.

A New Frontier

Today, less than 10 percent of U.S. RV production is exported. Historically, and for the near term, 90 percent of those exports go north across the land border to Canada. But the U.S. International Trade Administration (ITA) thinks the camping grounds are fertile in some surprising new markets including China, the United Arab Emirates where demand is strong for high-end RVs, and Korea and Thailand, where camping is already very popular and being used to attract tourism from neighboring Asian countries.

Middle class incomes are rising in these and other emerging markets, and tourists are increasingly attracted to the American “RV lifestyle,” which in many of these countries is seen as a symbol of luxury and status. The ITA forecasts 2018 exports of $1.4 billion with a five percent annual growth rate.

RV exports updates

Paving the Road for Export Success

To pave the way for more exports of American-made RVs, the ITA is working to ensure other governments adopt favorable vehicle standards and road use and licensing regulations. Removal or reduction of import duties and reduction of high consumption taxes would make pricing of U.S. RVs more competitive in new markets. Redundant testing and certification requirements can also pose a barrier to U.S. exports if not addressed in trade policy discussions.

ITA brings foreign buyers to national RV trade shows to introduce them to U.S. vehicle manufacturers and component suppliers. Finding buyers, however, isn’t enough to grow potential exports. The industry and U.S. government are also working to stimulate investments at national parks and private resorts in new markets to build out campsite infrastructure including power, water, and sanitation hook-ups and expand rural roadways and parking to accommodate RVs.

China’s Market Might Get Cooking

China’s current Five-Year Plan for economic growth sets a goal of creating 1,000 RV campgrounds by 2020 to both “promote consumer spending on tourism and leisure activities” (and to support American competitors in the Chinese automotive industry).

Shanghai opened its first campground for RVs in October 2014 on Chongming Island and ITA reports that new campgrounds are springing up on a near monthly basis all throughout China. China’s city dwellers are catching on. RV camping is a great way to escape the congestion and smog of China’s cities while embracing the American coolness factor.

Chinese campers

RVs Support American Travel and Tourism Exports Too

According to the US Travel Association, international travelers spent $153.7 billion in the United States in 2016, directly supporting nearly 8.6 million U.S. jobs. On average, every $1 million in sales of travel goods and services directly generates nine jobs for the industry, which is adding new jobs at a faster rate (16.6 percent) than the rest of the economy (10.3 percent).

While RV manufacturers are chasing sales in China, the U.S. RV rental market is busy attracting Chinese tourists who want to see as much of the United States as possible on their holidays and do it American-style.

The opportunity is not lost on El Monte RV in Los Angeles, a company that caters to its growing Chinese clientele by offering instructional videos in Chinese, vehicles outfitted with rice cookers, and directions to conveniences like Chinese supermarket chains.

Overall, China is the #1 market for U.S. tourism exports (tourism sales in the United States are counted as a services export). The National Travel and Tourism Office calculates that Chinese visitors inject more than $95 million a day into the U.S. economy and that travel and tourism exports account for 65 percent of all U.S. services exports to China. Seems that great American road trip is increasingly a two-way road.

Download and share the full graphic.

Exporting the all-American road trip- RV

Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fourteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

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

Where Have You Been? Blockchain for Tracking Goods in Trade.

Why is it so hard to track the origin of a diamond, or take longer than we’d like to trace the source of a food safety outbreak? It turns out that we’ve been tracking the supply chain in some really antiquated ways, but that’s about to change thanks to blockchain.

Origins and Travels

The “provenance” of a good refers to its origin as well as a chronological record of its ownership, location, and other important information as it moves along a supply and distribution network.

Many companies are exploring the use of blockchain technologies to help track this information much deeper into their supply chains than previously feasible. A retailer, for example, might require detailed information about materials, components, and ingredients as would manufacturers sourcing from a variety of suppliers.

Using blockchain technologies to track the origins of raw materials and follow domestic and international supply chains can also help meet the increasing demand for consumer information about globally produced goods, providing more transparency and accuracy about a product’s long journey to the store.

How Blockchain Can Help

Blockchain works to track the provenance of a good thanks to digital tokens that are issued by each participant in the supply chain to authenticate its movement. Every time the item changes hands, the token moves in lockstep. The real-world chain of custody is mirrored by a chain of transactions recorded in the blockchain.

The token acts as a virtual “certificate of authenticity” that is much harder to steal, forge or hack than a piece of paper, barcode or digital file. The records can be trusted and greatly improve the information available to assure supply-chain quality.

Blockchain technology can also make the audit process more efficient. The ledger distributes responsibility to the owners of pieces of information while ensuring verification along the way. The transactions are transparent to parties on a permission basis.

Consumers Want to Know

Surveys show that consumers in the United States and around the world are becoming more aware and interested in the origins of the merchandise they buy and the food they consume. Many also want to know how production processes of the goods they consume impact the environment and society.

The Pew Research Center found that 75 percent of Americans are “particularly concerned” for the environment, and 83 percent make an effort at least some of the time to live in ways that protect the environment. Nearly three out of four Millennials surveyed by Nielsen say they would pay extra for “sustainable” products and brands with a reputation for environmental stewardship. When it comes to food products, 71 percent of people surveyed by Label Insight said they want access to a comprehensive list of ingredients when deciding what food to buy.

Sustainable Coffee, Genuine Brand Purses and Conflict Diamonds

Retailers are concerned that brand loyalty is on the decline. But with some products, high consumer demand for product information is associated with higher expenditures, meaning people might pay more for a product they believe is ethically or sustainably sourced or manufactured. Blockchain can be used by companies to verify the claims their customers care about.

Take Starbucks, for example. Since 2004, the company has worked to support farmer livelihoods through its Coffee and Farmer Equity (C.A.F.E.) program. In 2015, they announced that 99 percent of their coffee was “ethically sourced,” complying with a set of principles and practices at each step of the supply chain from farm to cup. Last year, they took traceability to the next level by piloting the use of blockchain to create a transparent and direct connections with tens of thousands of coffee farmers. Customers can now see up close a supplier’s sustainability practices.

Worried your designer handbag isn’t the real deal? The luxury goods industry is seeking to use blockchain to verify the authenticity of its product. Brand name shoes, dresses or purses would have specific codes that retailers and consumers could use to track changes in ownership. Given the decentralized blockchain platform and multiple authentication processes to update the ledgers, fraudulent entries will be nearly impossible. The auditable and tamper-proof records produced through blockchain technology could help combat trade in counterfeit goods, which is a $1.77 trillion problem for manufacturers according to the International AntiCounterfeiting Coalition.

Blockchain is a promising development for the diamond industry, which struggles to prevent so-called “conflict diamonds” from entering their value chains. A United Nations panel reportedly found that 140,000 carats of diamonds were still being smuggled out of the Central African Republic between 2013 and 2015 and traded illicitly to finance armed conflict despite an export ban. De Beers, which controls 37 percent of the global diamond market, reported earlier this year that it was able to track 100 high-value diamonds from mine to retailer using blockchain technology.

Food Safety and Quick Recalls

The Centers for Disease Control and Prevention estimate that each year roughly one in six Americans, or 48 million people, becomes ill as the result of a foodborne pathogen (e.g., salmonella, listeria, or E. coli). Blockchain technology will not necessarily prevent outbreaks but could be used to track their source more quickly and prevent outbreaks from becoming epidemics. Retailers and regulators could use the distributed ledger technology for accurate and rapid information about potentially contaminated food.

Walmart is pioneering the use of blockchain to maintain easily accessible records of food provenance. In a simulated recall, The company was able to trace the origin of a bag of sliced mangoes in 2.2 seconds compared with the 6 days, 18 hours, and 26 minutes it would take using a standard approach of working with suppliers.

Australian exporter InterAgri is experimenting with using blockchain to track the production and global delivery of its Black Angus Aussie Beef. Teaming up with JD.com, a major e-commerce site in China, InterAgri aims to detect and eliminate food fraud such as counterfeit Aussie beef illegally marketed in China. By some cost estimates, food fraud affects approximately 10 percent of all commercially sold food products, creating food safety concerns for the consumer and liability issues for producers.

Coming to a Shelf Near You

In principle, blockchain could be applied to tracking provenance information for virtually any good, from agricultural commodities to luxury goods. Although blockchain technology is still not prevalent or the industry standard, more producers and retailers are exploring ways to track their own supply chains to increase quality assurance and their ability to communicate information about their products to consumers.

It will take trial and error and significant work with suppliers to ensure interoperability and efficiencies, but such experimentation will be essential if the U.S. and global economies are to realize the benefits of blockchain in international trade.

This is the first in a three-part series by Christine McDaniel for TradeVistas on how blockchain technologies will play an increasing role in international trade.

ChristineMcDaniel

Christine McDaniel a former senior economist with the White House Council of Economic Advisers and deputy assistant Treasury secretary for economic policy, is a senior research fellow with the Mercatus Center at George Mason University.

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