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The Pros and Cons of Local Sourcing

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Archives, Global Logistics, Global Trade Daily, International Trade

The Pros and Cons of Local Sourcing

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The Pros and Cons of Local Sourcing

Local sourcing is the practice of contracting suppliers located within your country or even city. This term also applies to the suppliers in your home county. However, there is always considerable debate over whether to prioritize the local suppliers or cast your net wider. To help decide, it is wise to look at the pros and cons of local sourcing.

The pros of local sourcing

Local sourcing means faster and more predictable delivery times

The news of supply chain disruptions is prevalent. Also, planning for survival in the new normal the pandemic has left us with is complex. So, it is no wonder that perhaps the most significant advantage of local sourcing is its reliability. Considering that the distance your cargo would need to travel is vastly reduced, the problems it can run into are fewer as well. You would not need to worry about ports or airports closing down and leaving your goods stranded. And, with that increased reliability, it becomes much easier to handle the risk factors of high-profitability deals.

You can work with suppliers much more closely

Another of the advantages of local suppliers is that you can work with them more closely. When dealing with an international supplier a whole sea away, it is natural that you can have at most one or two meetings in person a year. On the other hand, a short trip is all that would take to reach and discuss business with a local supplier. Of course, this means that you can also get them to customize some of their services for you, particularly if you need certain parts that need to be custom produced for your needs or a similar demand.

You would not need to manage your warehouses as meticulously

When your supplier is just down the street or a city or two away, timing deliveries right becomes easier. It means that, instead of having huge shipments that take up lots of space and cause logistics problems, it is possible to have a string of smaller deliveries. And, with the reduced risk and delay factors that we have already discussed, you can also order them, so they arrive before you need to have them shipped out. In turn, this would ensure that your warehouse is kept busy but never overflows or has shipments clogging up space better used for something else. And you could even manage with much smaller warehouses.

You could more easily make last-minute orders

Making a last-minute order is not something you should turn into a habit. However, if any of your suppliers run into problems, or you have a sudden order of goods yourself, you would be able to resolve the situation much more easily. A quick trip or a phone call would allow you to check in with your partners and look for additional goods. And the proximity would make getting the goods to you a breeze, as well. In the end, this extra wiggle room would let you approach your business in a much more relaxed way than ordering goods from overseas. After all, a missing shipment in such cases might take weeks to make up for.

You would not need to deal with import taxes

It is impossible to avoid worrying about taxes when trying to import goods. For any legitimate business, it is not too difficult a hurdle to cross. However, it can be tough to manage when you are just starting, and they are cutting into your profits. That is why, especially for brand new businesses, local suppliers that allow them to bypass this expense are an excellent choice. There are plenty of rare and common U.S. customs clearance issues you would entirely avoid by choosing to go through a local supplier, too.

Enhancing Sustainability and Reducing Carbon Footprint

One of the most significant advantages of local sourcing is its positive impact on the environment. By reducing the distance that goods travel, you contribute to lower carbon emissions and minimize the ecological footprint of your supply chain. With growing awareness of environmental concerns and increasing consumer demands for sustainable practices, opting for local suppliers can significantly boost your company’s reputation and attract eco-conscious customers.

Fostering Community Growth and Support

When you source locally, you actively contribute to the growth of your community and support the local economy. By providing business to nearby suppliers, you help create job opportunities and stimulate economic development. This, in turn, can lead to increased consumer spending within the community, benefiting other businesses as well. Additionally, building strong relationships with local suppliers can foster a sense of camaraderie and collaboration among businesses, creating a supportive network for mutual growth.

The cons of local sourcing

The local supplier might grow over-dependent on your business

It might sound odd. But be it for the supplier or the business, over-dependence is not great. If a supplier starts to prioritize the demands of the company they rely on for the majority of their profits, it can seriously impact their competitiveness in the market. They can grow too specialized to grow their business, and it can be challenging to secure new contracts. There is also the matter of their new product development slowing or halting entirely. It means that they might eventually be left behind and lose their chief source of income as well. It would make demand planning for the buyers difficult as well if planning to branch out to new products.

Canceling a contract can incur a lot of backlash

Hiring local suppliers and helping the local economy is fantastic for PR. However, if you ever need to move on from those contracts, you would be facing an equal amount of backlash and ill-will. No matter how justified your decision might be. The public could still view it as abandoning those same businesses and economies you were lauded for helping.

You might not be able to obtain the best or latest products

Local suppliers might not be able to offer you top-of-the-line goods. They are likely solid and reliable manufacturers, yes. But with the world as a stage for your business, it is always possible to find someone producing better versions of the product you are interested in. So, you are more or less choosing between reliability versus quality. Of course, there are exceptions.

Local suppliers can be less efficient

Even though they are more reliable, local suppliers can have efficiency problems. They tend to be smaller and have a smaller production capacity. Of course, as you work together and prosper, they might expand their business and build more facilities. But then you run the risk of our first cons: their reliance on your purchases growing to the point they practically only cater to you.

It is hard to ensure objective supplier selection

You might, over time, develop a tight-knit bond with the local suppliers, especially if they have been there for you since the foundation of your company. That is natural. However, if your company is developing faster than they are, you might find yourself in need of new partners to keep up with the demand you are facing. At such a time, due to your friendship or perhaps fear of public backlash, it wouldn’t be easy to objectively select another supplier better suited to your needs.

Limited Access to Specialized Products

While local suppliers offer reliability, they may not always have the capacity or expertise to provide highly specialized or cutting-edge products. In industries where innovation is crucial, you might need to explore international options to access the latest advancements and unique offerings.

Higher Costs and Reduced Cost Competitiveness

Local sourcing might come with higher production and labor costs compared to countries with lower manufacturing expenses. This can affect the cost competitiveness of your products in the global market. As a result, careful cost-benefit analysis is essential to ensure that the benefits of local sourcing outweigh the potential price disadvantages.

Dependence on Regional Vulnerabilities

By relying heavily on local suppliers, your supply chain could be susceptible to regional vulnerabilities. Natural disasters, economic downturns, or political instability in the region could disrupt your supply chain and affect your operations. Diversifying your sourcing strategy can help mitigate these risks and ensure a more resilient supply chain.

Final word

Now you know the pros and cons of local sourcing, so it should be easier to make an informed decision. Whether you decide to pursue local or international suppliers, remember that your priority is always the development and future of your company.

 

Archives, Global Trade Daily, Imports/Exports

China’s Propene Imports Fall to $2B

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

China’s propene imports shrank from $2.9B in 2019 to $2B in 2020. In physical terms, purchases fell by -20% y-o-y to 2.5M tonnes. South Korea, Japan and Taiwan constitute the largest supplies, accounting for nearly 80% of China’s propene imports. Last year, all these countries decreased propene exports to China, while Taiwan recorded the most prominent drop in supplies.

China’s Propene Imports

Propene imports into China dropped remarkably to 2.5M tonnes in 2020, which is down by -19.8% on the year before. In value terms, propene imports reduced from $2.9B in 2019 to $2B (IndexBox estimates) in 2020.

In 2020, South Korea (1.3M tonnes) constituted the largest supplier of propene to China, with a 52% share of total imports. Moreover, propene imports from South Korea exceeded the figures recorded by the second-largest supplier, Japan (599K tonnes), twofold. Taiwan (Chinese) (294K tonnes) ranked third in total imports with a 12% share.

In 2020, the volume of purchases from South Korea dropped by -11.7% y-o-y. Imports from Japan and Taiwan reduced by -15.0% y-o-y and -56.7% y-o-y, respectively.

In value terms, South Korea ($1.1B) constituted the largest supplier of propene to China, comprising 52% of total imports. The second position in the ranking was occupied by Japan ($482M), with a 24% share of total imports. It was followed by Taiwan (Chinese), with an 11% share.

The average propene import price stood at $1,000 per tonne in 2020, approximately mirroring the previous year. Average prices varied noticeably amongst the major supplying countries. In 2020, the highest prices were recorded for prices from Japan ($1,000 per tonne) and Taiwan (Chinese) ($1,000 per tonne), while the price for South Korea ($1,000 per tonne) and the United Arab Emirates ($1,000 per tonne) were amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Japan, while the prices for the other significant suppliers experienced more modest paces of growth.

Source: IndexBox Platform

Archives, Global Trade Daily, Imports/Exports

Germany Expanded Lactam Imports More Than Tenfold to $6.8B in Past Decade

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

From 2010 to 2020, Germany boosted purchases abroad by thirteen times, from $0.5B to $6.8B, and became the world’s leading lactam importer in value terms. The U.S. ($3.4B) and Italy ($1.4B) followed Germany. Most lactam supplies come to the global market from Belgium ($1.7B), Japan ($303M) and China ($367M), which became the fastest-growing lactam exporter in the past decade.


 

Global Imports of Lactams from Heterocyclic Compounds

Total overseas purchases of lactams from heterocyclic compounds in the world grew from 1.1M tonnes in 2019 to 1.2M tonnes in 2020. In value terms, global lactam imports rose from $19.7 to $20.8B (IndexBox estimates).

The largest lactam importing markets worldwide were Germany ($6.8B), the U.S. ($3.4B) and Italy ($1.4B), together accounting for 56% of global imports in 2020.

Over the past decade, Germany (+30.4% per year) saw the highest growth rates of the import value, while purchases for the other global leaders experienced more modest paces of growth.

In physical terms, China (280K tonnes), Taiwan (Chinese) (209K tonnes) and Germany (195K tonnes) represented the leading importers of lactams from heterocyclic compounds in the world, committing 58% of total import. They were distantly followed by Italy (105K tonnes) and India (58K tonnes), creating a 14% share of total imports. The following importers – Switzerland (49K tonnes), South Korea (48K tonnes), Slovenia (34K tonnes), Belgium (31K tonnes), Viet Nam (27K tonnes), the U.S. (21K tonnes) and Indonesia (19K tonnes) – together made up 19% of total imports.

In 2020, the average lactam import price amounted to $17,538 per tonne, approximately mirroring the previous year. There were significant differences in the average prices amongst the major importing countries. In 2020, the country with the highest price was the U.S. ($162,254 per tonne), while Taiwan (Chinese) ($1,255 per tonne) was amongst the lowest. From 2010 to 2020, the most notable rate of growth in terms of prices was attained by Germany, while the other global leaders experienced more modest paces of growth.

World’s Largest Suppliers of Lactams from Heterocyclic Compounds

Belgium ($1.7B) remains the largest lactam supplier worldwide, comprising 10% of global exports. The second position in the ranking was occupied by China ($367M), with a 2.2% share of global exports. It was followed by Japan ($303M), with a 1.6% share.

China emerged as the fastest-growing supplier of lactams from heterocyclic compounds over the past decade. From 2010 to 2020, exports from China expanded from $0.1B to $0.4B.

Source: IndexBox Platform

supply chain
Archives, Global Logistics, Global Shippers 101, Global Trade Daily

Managing Crisis Within the Food and Beverage Supply Chain

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If there’s one thing France hasn’t experienced a shortage of recently, it’s supply chain issues. The pandemic affected food and drink availability in a number of ways, from issues with growth and production to a shortage of delivery vehicles. This has caused a number of issues for food and beverage manufacturers, who are struggling to keep up with demand as a supplier while also experiencing issues in their own supply chains.

The wine shortage in 2021, caused by unseasonably cold weather in key wine-growing regions, has also had a serious impact given France is the second-largest wine producer in the world. The l’Association Nationale des Produits Alimentaires attributed current and future expected shortages to price rises throughout the supply chain.

It’s clear that we’re likely to experience more supply chain issues in the near future. But there are ways food and beverage manufacturers can mitigate these risks. Here, we’ll explore the options.

Protect your existing supplies and production

At a time when food production is affected by issues such as the weather, protecting existing resources is essential. Many food manufacturers have had to recall products because of avoidable issues in the factory. Food manufacturing powerhouse Kraft Heinz made global headlines when it had to recall over 1.2 million containers of cottage cheese because they weren’t stored at the correct temperature.

Equipment maintenance is essential to prevent unnecessary product spoilage and recalls. Many manufacturers will operate on a reactive maintenance model, only maintaining machinery when it fails. Instead, switching to proactive maintenance and checking equipment regularly can help to identify issues before they become a problem. Predictive maintenance technologies are now more commonplace too and will monitor the health of systems automatically.

Food contamination is also an issue that can result in recalls and even affect the health of end consumers. It was reported in 2021 that foodborne illnesses increased between 2018 and 2019, with salmonella topping the list of pathogens. There are a range of processes that can threaten the hygiene of food – from handlers not washing their hands to unsanitary cabling. Many manufacturers use stainless steel goulottes métalliques because they’re easy to clean and decontaminate.

Diversify your suppliers

Access to, and costs of, the raw materials needed to make foodstuff is a key issue right now. it’s essential for manufacturers to diversify their suppliers in the wake of supply chain disruptions. If you rely on one or two suppliers for one key ingredient and they experience issues, you’ll feel this more acutely.

In the wake of COVID-19’s dramatic impact on small businesses, while global behemoths like Amazon increased their profits, we’ve seen a shift towards prioritising local businesses. To encourage this, the government introduced click and collect services for small businesses that didn’t have the resource to set up an ecommerce presence.

The same should go for businesses looking for new suppliers. Small businesses need support, and local suppliers can offer more security to your business because they’re more easily accessible. What’s more, with a renewed focus on sustainability in France in 2022, going local can boost a business’ green credentials.

Support the elimination of food waste

Consumer food waste is a real problem worldwide, but especially in France. Despite a number of legislations in place to prevent food waste, research by Statista has shown that bread is one of the food items French consumers waste the most often. The survey found that 16% of consumers were throwing bread away at least once a week. Given that flour is an ingredient that has soared in price, throwing away its end product is costly.

At a time of food shortages and soaring prices, the nation should be focusing on reducing food waste. France is a global leader in the reduction of business food waste, as well as helping consumers to recycle applicable soiled food. The government and businesses can build on this platform with educational campaigns on reducing the amount of food that is thrown away or recycled.

Food manufacturers can play their part too. Packaging should include information on how best to store the food, as well as tips on making it last longer – such as storing unused bread in the freezer, transferring dried food to airtight glass containers, and putting fresh herbs in water.

France’s supply chain issues are set to continue into 2022. While it’ll be difficult to completely prevent shortages and price fluctuations, there are a number of steps that food manufacturers can take to mitigate these issues and ensure they can continue to provide essential resources for businesses and consumers alike.

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Sources

https://www.statista.com/statistics/1143426/coronavirus-changes-to-supply-chain-retail-worldwide/

https://www.connexionfrance.com/French-news/Which-products-are-or-could-be-hit-by-stock-shortages-in-France

https://www.statista.com/statistics/1128445/most-frequently-wasted-food-in-france/

https://blog.winnowsolutions.com/4-ways-france-is-leading-the-food-waste-agenda

https://www.gardenersworld.com/plants/quick-ways-to-protect-plants-from-frost/

https://www.foodsafetynews.com/2021/04/france-sees-increase-in-foodborne-outbreaks/

https://www.nytimes.com/2020/11/03/business/france-shopkeepers-lockdown.html

https://www.thelocal.fr/20201102/click-and-collect-how-to-help-your-local-business-during-lockdown-in-france/

https://www.housebeautiful.com/uk/lifestyle/food-drink/a19417308/how-to-make-food-last-longer/

https://www.highspeedtraining.co.uk/hub/preventative-maintenance/

https://www.foodsystemsjournal.org/index.php/fsj/article/view/836/817

freight brokers
3pls, Archives, Global Logistics, Global Trade Daily

Three ways freight brokers can seize the endless opportunities in today’s market

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If you’re a freight broker or prospective freight broker, you should be seeing green right now, recognizing a deep well of market opportunity not only in 2022, but looking out over the next 5-10 years, too. The supply and demand imbalance is abundantly evident, and shippers increasingly are leveraging brokerages and 3PLs to manage their freight and shifting away from working directly with motor carriers.

That means billions — likely hundreds of billions, even — of dollars in transportation spending moving toward freight brokerages in the coming years.

To illustrate this point: Just over the past two years, the amount of truckload freight in North America moved through brokerages has jumped from about 10-12% on average annually to nearly 20% last year. That trend is here to stay, along with continually climbing freight demand, meaning the percentage equates to more and more loads.

In early February, the White House’s port envoy, John Porcari, said he sees the current freight volumes as a floor for the coming years — not a ceiling. If he’s right, the brokerage market likely will become one of the fastest growing sectors of the entire U.S. economy.

However, haste makes waste, and now’s the time for freight brokerages and 3PLs to be positioning themselves to take on new customers, build their carrier base, and figure out how to scale their operations to meet this demand and capitalize on the sea of opportunities they’re adrift in.

Without the right digital tools, particularly a robust TMS platform that can scale with your operation, integrate with your shippers’ tools, and seamlessly find capacity across freight modes, brokers will be leaving ripe profits on the table for their competitors to scoop up.

From finding customers and retaining staff in a highly competitive landscape, to offering new services, expanding modes, and maintaining a network of truckers — the modern freight broker simply can’t and won’t survive with just a rates sheet, some Excel files, and a well-worn iPhone.

Here’s why:

Meeting the demands of the modern marketplace.

In today’s brokerage market, no two days are alike, and customer needs change by the minute. Also, with the brokerage market bulging, logistics providers need the ability to add new customers efficiently and cost effectively. Technology has long been viewed as optional, not compulsory, on those fronts.

That’s no longer the case.

To acquire, support, and onboard new customers, manual procedures simply no longer work. Bringing on new customers manually can bog down operations, and it skips vital support in today’s market — properly integrating systems with shipper customers and other third-parties, like motor carriers.

Also, to adequately serve customers and compete in today’s brokerage market — but especially tomorrow’s market — the ability to scale quickly, to find capacity at a reasonable price with some level of automation, and to search across freight modes to keep shippers’ freight moving, brokers need the right tools. Those that have them will serve their shippers and attract new customers. Those that don’t will erode their own ability to compete.

Attracting and retaining the right employees.

Every business in every industry is trying to navigate the pressing issue of finding, hiring, and keeping the right people so their business can run effectively and continue to serve customers.

It’s increasingly difficult to retain employees if you’re not giving them the right tools and technology to do their jobs. For those trying to retain talent with a cumbersome, outdated, ineffective tech stack, you’re creating pressure for your employees to leave and find an organization that invests in those areas.

Also, people want to feel the rewards of the job they do, and part of that is supporting customers in a way they feel is effective and that they’re happy with. All stakeholders benefit from providing the best support and service, especially your employees.

Making scalable technology core to brokerage.

The technology access issue that’s plagued medium-sized and small brokerages has mostly vanished. As has the time it takes to set up new platforms and integrate them into your current operations.

What took months of painful and frustrating setup now takes weeks, if not days. Also, the upfront cost of platforms has become accessible to brokerages of all sizes, as has their ongoing total cost of ownership.

Adopting platforms like modern transportation management systems is no longer just about return on investment or streamlining processes. It’s not simply part of your business — it’s now core to your business.

The dollar cost is obviously an important part of this equation. But thinking of technology and digital solutions as integral, and core components of your business, you reframe the cost as a revenue opportunity. You realize what it means for your business, your personnel, and your customers to be flexible and to grow, to build new revenue opportunities, and to remain a viable competitor in this booming market.

Paul Brady is the CEO of 3Gtms.

sunflower
Archives, Global Trade Daily, Imports/Exports

Sunflower Seed Prices to Remain Stable with Record Production Expected in 2022

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

This year, sunflower seed prices are forecast to remain stable due to record global production, which is to reach the highest level of 57.3M tonnes.

Sunflower seed prices are projected to remain stable due to a significant increase in global production this year. The average sunflower seed price in the U.S. is estimated at $32 per cwt ($630 per tonne) in February 2022 (IndexBox estimates based on USDA data).

This year, global sunflower seed output is to rise by 20% y/y to 57.3M tonnes, the highest level ever. Favourable weather should further stimulate production growth in Ukraine and Russia. Last year, Ukraine’s harvests reached a record 23.2M tonnes, a 19%-increase compared to 2020. Production in Russia grew by 17% y/y, amounting to 15.5M tonnes in 2021. Higher outputs are expected in South America, where harvesting season begins. Steadily growing U.S. demand for trans-fat free high- and mid-oleic oils could stimulate farmers to expand sunflower seed acres.

Global sunflower seed exports are to rise by 4% y/y to 7.3M tonnes in 2022. The world’s ending stocks will expand by 12% y/y to 2.4M tonnes.

Global Sunflower Seed Exports by Country

In 2020, global sunflower seed exports dropped to 7M tonnes, reducing by -3.9% against 2019 figures. In value terms, supplies expanded sharply to $4.7B (IndexBox estimates).

Romania (1.5M tonnes) and Russia (1.4M tonnes) represented the largest exporters of sunflower seed worldwide, together amounting to approx. 42% of total supplies. Bulgaria (818K tonnes) occupied the following position in the ranking, followed by China (508K tonnes), France (424K tonnes), Moldova (381K tonnes) and Hungary (352K tonnes). All these countries together took approx. 36% share of total exports. Kazakhstan (257K tonnes), Argentina (206K tonnes), Ukraine (188K tonnes), Slovakia (154K tonnes), Serbia (145K tonnes) and Turkey (115K tonnes) followed a long way behind the leaders.

In value terms, the largest sunflower seed supplying countries worldwide were Romania ($699M), China ($648M) and Russia ($563M), with a combined 41% share of global exports.

In terms of the main exporting countries, Russia recorded the highest growth rate of exports, doubling the value in 2020.

Top Leading Sunflower Seed Importers Worldwide

The countries with the highest levels of sunflower seed imports in 2020 were Turkey (1,207K tonnes), Bulgaria (1,021K tonnes) and the Netherlands (762K tonnes), together recording 44% of total volume. It was distantly followed by Spain (403K tonnes), Germany (393K tonnes) and France (326K tonnes), together comprising a 16% share of total imports. Romania (251K tonnes), Portugal (223K tonnes), the Czech Republic (213K tonnes), China (181K tonnes), Italy (160K tonnes), Austria (156K tonnes) and the U.S. (156K tonnes) followed a long way behind the leaders.

In value terms, the largest sunflower seed importing markets worldwide were Turkey ($628M), Bulgaria ($498M) and the Netherlands ($366M), together comprising 31% of global imports.

Source: IndexBox Platform

chapman freeborn
Archives, Global Trade Daily, News

Global aircraft charter specialist Chapman Freeborn Airchartering has appointed NAQEL Express as its exclusive partner in the Kingdom of Saudi Arabia.

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NAQEL Express, as well as Chapman Freeborn, are both well-respected companies in the aviation industry. This partnership will enable clients to receive a complete end-to-end solution, delivering an entire range of logistics covering all industries. The collaboration will strengthen both partners’ presence and coverage in the Kingdom of Saudi Arabia as well as support the Kingdom across multiple industry verticals.

Neil Dursley, Chapman Freeborn Chief Commercial Officer Cargo comments:

“We believe that this new strategic partnership will allow us to grow and develop our offering to our global clients and suppliers. Chapman Freeborn has almost five decades of experience within the air charter industry globally, this new partnership with NAQEL will allow us to service our clients’ needs far more effectively and efficiently, now more than ever.

The combined strength of Chapman Freeborn, its parent company Avia Solutions Group, and NAQEL Express will give existing and new potential clients in the Kingdom a fantastic service offering. Capabilities include access to our family members’ fleets of both passenger and freighter assets globally and in the region.

Chapman Freeborn has decades of experience in the Middle East Region and neighbouring countries and has supported missions in many challenging environments for many years and continues today with innovative solutions to support our clients.”

Michael Harradine, NAQEL Express Director, Global Freight Forwarding Division says:

“NAQEL enables the world to do business in Saudi Arabia with simplicity and transparency. The new partnership with Chapman Freeborn enhances our offerings.

This strategic partnership gives our clients within Saudi Arabia a direct access to the vast cargo air charter, passenger charter, and on-board courier capabilities of Chapman Freeborn.

Now there will be direct control with transparency for the fulfilment of air charter needs of global and local firms in Saudi Arabia.

NAQEL Express is one of a select group of firms operating as Authorized Economic Operator (AEO) for Saudi Customs.

We are also the leading and largest overland express carrier with the largest reach among any express carriers in KSA.

NAQEL is a key player in building transparent connectivity between KSA and its global economic partners, as part of Saudi Arabia’s VISION 2030.

NAQEL is also a committed leader in developing its people by enhancing leadership (Future Leaders Program) and business management skills”.

__________________________________________________

About Chapman Freeborn:

The Chapman Freeborn group was established in the UK in 1973. The company has offices worldwide including North America, Europe, Africa, Russia, Asia, and Australia. In the cargo market, Chapman Freeborn Airchartering specialises in the charter and lease of aircraft for a wide-ranging customer base, including freight forwarders, multinational corporations, governments, humanitarian agencies, and a host of industries around the globe.

In addition to freight services, Chapman Freeborn offers specialist passenger services including private jet charters for executive travel and large aircraft for crew rotations and international group travel. As well as on-board courier services. Chapman Freeborn is a family member of Avia Solutions Group, a leading global aerospace services group with almost 100 offices and production stations providing aviation services and solutions worldwide.

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

For more information, please visit www.chapmanfreeborn.aero / www.aviasg.com

About NAQEL Express

NAQEL Express’s journey started as Hala Express in 1993 with 150 vehicles. In 2005, NAQEL Express was born as a joint venture between Saudi Post and Hala Express.

NAQEL Express is providing seamless end-to-end logistics solutions for most industrial sectors in the Kingdom of Saudi Arabia.

Being the largest logistics network in the Kingdom, with 5000+ employees and 4000+ vehicles, they serve the remotest locations and deliver to both businesses and individuals.

They offer door-to-door air and sea freight services from the rest of the world into Saudi Arabia and Middle Eastern countries.

Their freight service desk based out of the United States, Europe, United Kingdom, China, India, and Egypt ensures that you have a smooth and hassle-free experience in importing your goods from around the world.

NAQEL Express clears your shipments based on their multi-modal presence at the key airports, land ports, and seaports. They have own facilities at all the three key airports – Riyadh, Jeddah, and Dammam.

They are the first logistics company in the Kingdom that received a customs clearance license. They clear your shipments as well as deliver them to your doorstep.

NAQEL Express has now expanded their operations to 16 countries – Saudi Arabia, UAE, Kuwait, Oman, Bahrain, Jordan, Egypt, Lebanon, UK, Turkey, China & Hong Kong, USA, Germany, India, Russia, and Qatar. This presence helps their vision of uniting across borders and horizons a reality.

They are further expanding in line with their mission of giving you access to new markets and removing distance as a constraint for your business operations.

For more information, please visit www.naqelexpress.com

seed
Archives, Global Trade Daily, Imports/Exports

U.S. Rape Seed Prices to Spike 74% to Over $320 per tonne in 2022

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

This year, the average rape seed price in the U.S. is forecast to pick up 74% y/y to a record $320 per tonne owing to reducing supply. Unfavourable weather in North Dakota adversely affected yields, decreasing the total rape seed output.

The average rape seed price in the U.S. is forecast to skyrocket from $184 per tonne in 2021 to a record $320 per tonne due to lower supply. Although the area under canola was expanded by 328K acres to 2.15M acres, poor weather in North Dakota led to yields reducing sharply last year. Dakota’s production accounts for 85% of total American rape output.

An expected decrease in rape imports to the U.S. will be another driver of the price growth. Much like in North Dakota, Canadian farmers saw poor yields and produced a record-low canola seed volume. This eventually will make Canada, which shapes 92% of U.S. rape seed imports, reduce exports to the country. Suppliers from Ukraine and the EU will likely expand their canola shipments to the U.S., filling the gap after reduced availability in North America.

U.S. Rape and Colza Seed Imports

In 2020, the amount of rape or colza seed imported into the U.S. expanded rapidly to 567K tonnes, with an increase of 12% compared with the year before. In value terms, supplies rose to $254M (IndexBox estimates).

Canada (524K tonnes) was the leading supplier of rape and colza seed to the U.S., with a 92% share of total imports. Moreover, rape and colza seed imports from Canada exceeded the figures recorded by the second-largest supplier, Argentina (25K tonnes), more than tenfold.

In value terms, Canada ($226M) constituted the most significant rape and colza seed supplier to the U.S., comprising 89% of total imports. The second position in the ranking was occupied by Argentina ($13M), with a 5.3% share of total imports.

Top Rape and Colza Seed Suppliers Worldwide

Global exports of rape or colza seeds amounted to 25M tonnes in 2020.In value terms, supplies totaled $11.1B.

Canada was the largest exporter of rape or colza seed globally, with the volume of supplies recording 12M tonnes, which was approx. 47% of total exports in 2020. Ukraine (2.4M tonnes) took a 9.5% share (based on tonnes) of total exports, which put it in second place, followed by the Netherlands (7.8%) and Australia (6.7%). France (1,060K tonnes), Belgium (946K tonnes), Hungary (714K tonnes), Lithuania (675K tonnes), Russia (647K tonnes), Romania (542K tonnes), Latvia (501K tonnes) and Poland (410K tonnes) took a little share of total exports.

In value terms, Canada ($4.7B) remains the most significant rape and colza seed supplier worldwide, comprising 42% of global supplies. The second position in the ranking was occupied by Ukraine ($1B), with a 9.1% share of total exports. It was followed by the Netherlands, with a 7.9% share.

Source: IndexBox Platform

capacitors
Archives, Global Trade Daily, Imports/Exports

Germany Expands Electrical Capacitor Imports 40% to Over $2B

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

Germany, the second-largest importer in the global electrical capacitor market, increased purchases last year. In Q1-Q3 2021, its electrical capacitor imports totalled $2B, rising by 40% compared to the same period of 2020.

During Q1-Q3 2021, Germany imported electrical capacitors worth $2B, 40% more than in the same period a year earlier. Japan, China and South Korea remain the major providers of electrical capacitors to Germany. In Q1-Q3 2021, imports from China amounted to $333M, soaring by 55% against the same period in 2020. During that time, Japan expanded capacitor exports to Germany by 41% to $597M, while shipments from Korea surged by 34% to $147M.

Germany Electrical Capacitor Imports by Country

In 2020, the volume of electrical capacitors imported into Germany shrank markedly to 29K tonnes, which is down by -16.9% compared with 2019. In value terms, supplies fell markedly to $2B (IndexBox estimates).

Japan ($667M) constituted the largest supplier of capacitors to Germany, comprising 34% of total imports. The second position in the ranking was occupied by China ($319M), with a 16% share of total purchases. It was followed by South Korea, with a 7.7% share.

Overview of Global Electrical Capacitor Imports

Global capacitor imports totalled $31B in 2020. Multilayer ceramic capacitors ($19.1B) constituted the largest type of electrical capacitors imported worldwide, comprising 62% of global supplies. Aluminium electrolytic capacitors ($5B), with a 16% share of global imports, took second position in the ranking. Other types of capacitors comprised 22% of total supplies.

The largest capacitor importing markets were China ($8.8B), Hong Kong SAR ($5.4B) and Germany ($2B), together comprising 52% of global imports. The U.S., South Korea, Mexico, Singapore, Viet Nam, Malaysia, Thailand, the Czech Republic, Hungary and India lagged somewhat behind, comprising a further 29%.

Source: IndexBox Platform

supply chain
Archives, Commentary, Global Logistics, Global Trade Daily

HOW I LEARNED TO STOP WORRYING AND LOVE THE NEW NORMAL

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With so much having already been written on supply chain disruption over the past 18 months—beginning with the initial shut-down of production in China, to fascinating tales of toilet paper hoarding, and now to the current inability to get backlogged demand through our ports of entry—I was initially reluctant to add yet another article to the stack. So what changed my mind? There are actually two reasons, which I’ll explain.

First, the problems and lessons learned from the COVID-19 pandemic are now forcing companies to become more agile, reassessing every element of their existing supply chains in preparation for the “new/next normal.” It’s now blank sheet of paper time as previous playbooks regarding sourcing, inventory levels, placement and risk mitigation plans (if they even had one) —together with any supporting infrastructure of people, processes and enabling technology—are being tossed out the window.

And while COVID-19 can be credited as the catalyst for forcing companies to perform these assessments, it doesn’t take a pandemic to bring a supply chain to its knees. In addition to the exposure contributed by single-sourcing key goods or from maintaining lean inventory levels (i.e., “Just-in-Time” versus “Just-in-Case”), designing a more resilient, risk-averse global supply-chain will require the inclusion of a broader list of potential risks to consider particularly when selecting foreign suppliers. These should include geopolitical conflicts, socio-economic factors including labor, crime and corruption, limited port capacity/infrastructure, weather-related disruptions and even natural disasters (recall the 2011 earthquake and tsunami in Japan).

Take geopolitical risk, for example. The United States’ over-dependency on China for products ranging from personal protective equipment to rare-earth minerals has made it a growing concern from both a business and a national security perspective. A sobering report by the Hinrich Foundation (“Strategic U.S.-China Decoupling in the Tech Sector”), states that “the China-U.S. geopolitical competition has reached a competitive tipping point and morphed into a new ‘cold war,’” citing an increase in China’s bold hegemonic policies. The report further highlights China’s years of intellectual property theft, growing labor costs, and the more recent special tariffs levied by the Trump administration, as key reasons for an increase in U.S. supply chains decoupling from China and either moving into more risk-averse areas in Southeast China, near-shoring to Mexico or even re-shoring stateside.

In an actual side-by-side near-shoring exercise that compared China with Mexico, the advantages quickly fell to Mexico, citing a shorter supply chain with fewer physical touchpoints (damage/theft/service fees), lower freight costs and eligibility for duty-free entry under the USMCA Free Trade Agreement, as well as side benefits that included ease of communication with vendors and the convenience of traveling to vendor sites.

RISK MANAGEMENT MEETS INDUSTRY 4.0

The second reason for my writing is that there’s another movement afoot that aligns with supply-chain risk initiatives from the position of enabling technology capable of producing even greater resiliency. Labeled as “Industry 4.0,” this next industrial revolution is the result of the substantial transformation that is occurring through the digitization of manufacturing. For context, the first industrial revolution was through the introduction of water and steam power. Steam would give way to electrical power as the second industrial revolution, with the third being born out of the introduction of computers and their ability to automate previously manual tasks. Fast forward to today when the fourth revolution is now further optimizing that automation by connecting computers with smart machines and “disruptive technologies”—such as artificial intelligence (AI), machine learning, advanced business intelligence, predictive analytics and data lakes—capable of removing humans from decision-making processes, including applications capable of identifying and even predicting risk.

Where Industry 4.0 supports supply chain risk initiatives is that the 4.0 movement includes the digitization of global supply chains. This will translate into unprecedented transparency and connectivity across the entire end-to-end order and shipment process, where supporting business functions such as product engineering, procurement, sales & marketing, transportation, trade & customs and accounts payable traditionally operate in respective silos.

For example, take trade & customs operations. Their typical placement near the end of the supply chain process, together with a lack of early visibility to international order, has served for years as a recipe for reactive firefighting as shipments become “stuck in customs” upon arrival until data/documentation issues are resolved. Under a digitized model, silos are replaced with connected supply-chain visibility that would allow trade & customs’ participation to move upstream to the earliest stages of new product build/buy decisions. As a result, they’re now in a position to proactively contribute critical advice on regulatory issues, import admissibility requirements, duty/tax minimization strategies such as tariff engineering, foreign trade zones, free trade agreements or changes in source countries (e.g., avoiding a 25% special tariff on Chinese goods by switching the sourcing to Mexico)—all key factors capable of removing cost, risk and time from their supply-chain.

If you’re currently building a business case to launch your own risk initiative, “Resetting Supply Chains for the Next Normal,” an interesting report from McKinsey & Co., might give you some additional support. For instance, in their survey of 60 senior supply-chain executives across industries and geographies, 85% responded that they struggled with insufficient digital technologies, 93% plan to increase resilience across the supply chain, and 90% plan to increase digital supply-chain talent in-house needed to support that new technology. In short, you’re not alone.

Whether your current project is to address the exposure from disruptions to your supply chain or to digitize the entire enterprise as a result of the increasing disruption caused by technology-driven innovation, what’s becoming clear is that companies will be forced to become agile and adaptive—able to change business models at unprecedented rates of speed in order to survive and thrive in the “new/next normal.”

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Jerry Peck has more than 30 years of experience in global-trade management. His career has uniquely encompassed nearly every facet of GTM, including third-party logistics, trade operations within Fortune 300 multinationals and professional services consulting firms. Learn more about QAD Precision at precisionsoftware.com.