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German-Austrian Trade Transaction Successful on Marco Polo’s Blockchain Platform

blockchain

German-Austrian Trade Transaction Successful on Marco Polo’s Blockchain Platform

The S-Servicepartner, Sparkasse Bielefeld and the Austrian Raiffeisen Bank International, together with Dr. August Wolff GmbH & Co. KG Arzneimittel and its business partner, the pharmaceutical company s.a.m. Pharma Handel GmbH successfully completed a digital trade transaction with a receivables-based financing component on the Marco Polo platform. A special feature: the S-Servicepartner, currently the only back-office service provider worldwide within the Marco Polo consortium, the largest and fastest-growing trade finance network, was able to process a blockchain-based trade transaction for the first time together with a savings bank and its customer. Another highlight: Raiffeisen Bank International was the first Austrian bank to carry out a pilot transaction on the Marco Polo platform.

The Marco Polo network connects banks, corporates and technology-partners to streamline their working capital and trade finance activities through direct data exchange. It provides digital solutions for international trade and supply chain as well as receivables-based financing using R3 Corda Blockchain technology. Companies will be able to access the platform’s offerings via web portals, local and cloud-based platforms, and ERP-integrated applications.

The settlement and financing of trade transactions via a Distributed Ledger Technology (DLT)-based platform is of equal interest to companies of all sizes active in foreign trade. The S-Servicepartner participates in the development of the Marco Polo platform, representing all savings banks in Germany, and pursues the goal of providing the savings banks with access to the Marco Polo product offering. The service provider is, therefore, testing the functionality and experience of the products on the Marco Polo platform together with selected savings banks and their medium-sized corporate customers. “This is the first transaction in a pilot series with savings banks with which we want to make an important contribution towards production maturity,” says Jürgen Nagel, a member of the Management Board of S-Servicepartner Berlin. “The insights gained by all participants will be directly incorporated into the further development of the modules”.

Ralf Hüpel, Head of International Business at Sparkasse Bielefeld, states: “We are very happy and satisfied to be able to contribute the view of a savings bank at such an early stage in the development of this platform. As the first savings bank in Germany, we were able, together with our customer, to give important impulses for the further development of this international project”.

“The Wolff Group, which is always interested in cutting edge innovations, sees an opportunity for the future to raise considerable efficiency potentials and significantly improve transparency in the entire process, from ordering to payment”, confirms Tanja Niedenführ, Head of Finance and Accounting Department at the pharmaceutical manufacturer.

Raiffeisen Bank International (RBI) began looking at the existing blockchain-based trade finance solutions in 2017. Of all the available platforms, RBI ultimately opted for Marco Polo. “Marco Polo best suited our strategy as the platform combines traditional trade finance products with new blockchain-based solutions such as Payment Commitment,” says Stefan Andjelic, RBI Blockchain Hub Lead. The cooperation with S-Servicepartner and the two companies gave a good impression of the marketability of the Marco Polo platform. “The transaction showed how Marco Polo can make trade finance more transparent and efficient through automation,” says Andreas Zietz, RBI Teamlead Trade Finance.

Also for Michael Stanzig, Managing Director of s.a.m. Pharma Handel GmbH, the pilot has shown that the Marco Polo platform provides transparency and security to all sides. “The usability of the platform is relatively easy for our part and operated without any problems,” Michael Stanzig continues.

“This pilot demonstrates the benefits of leveraging blockchain technology for open account trade finance transactions. By using the Marco Polo Platform, we create a safe and digital environment, which provides the foundation for a global trade finance marketplace,” said Rob Barnes, CEO of TradeIX.

The parties to the transaction agree that the cooperative partnership not only provided a deeper insight into the innovative technology but also brought the conviction that the underlying visions can be put into practice in the near future.

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The S-Servicepartner is the largest back office service provider for the savings banks in Germany. As a process industrialiser, the S-Servicepartner supports the savings banks with standardization and automation solutions using modern technologies such as Robotic Process Automation (RPA) and Business Intelligence (BI). Today, the corporate group employs more than 2,350 people at 11 locations throughout Germany and generates annual sales of around 200 million euros.

Sparkasse Bielefeld is the market leader in its area of business for medium-sized corporate customers and the most important financing partner for medium-sized companies in Bielefeld. The bank handles more than 20,000 commercial customer relationships in Bielefeld and has provided around 550 million Euros in new commercial loans in 2018.

The Dr. Wolff Group, with brands such as Alpecin, Plantur and Alcina, as well as Linola, Vagisan, Biorepair and Karex, is a family business from Bielefeld, now in its fourth generation, with 675 employees and expanding worldwide. Since its foundation in 1905, the company has focused on research and the scientifically proven benefits of its products in order to find a solution for hair and skin problems. With its own developments, the company achieved a turnover of 309 million Euros (2018). Dr. Wolff is operating in more than 60 countries.

RBI regards Austria, where it is a leading corporate and investment bank, as well as Central and Eastern Europe (CEE) as its home market. 13 markets of the region are covered by subsidiary banks. Additionally, the RBI Group comprises numerous other financial service providers, for instance in leasing, asset management or M&A. 

Around 47,000 employees service 16.5 million customers through approx. 2,100 business outlets, the by far largest part thereof in CEE. RBI’s shares are listed on the Vienna Stock Exchange. The Austrian Regional Raiffeisen Banks own around 58.8 percent of the shares, the remainder is in free float. Within the Austrian Raiffeisen Banking Group, RBI is the central institute of the Regional Raiffeisen Banks and other affiliated credit institutions.

s.a.m. Pharma Handel is a small successful company founded in 2003 in the OTC pharmaceutical sector with the aim of marketing European pharmaceutical companies that are not independently represented in Austria.

trade

Trade and the Impact on Imports and Exports in 2020

Significant and sustained increases in the world trade index (an index measuring the number of times the word uncertainty or its variants are mentioned in Economist Intelligence Unit (EIU) reports at a country level) should be a worry for many as “the increase in trade uncertainty observed in the first quarter could be enough to reduce global growth by up to 0.75 percentage points in 2019”[1]

In August, the US Institute for supply management[2] latest report shows a contraction in production, purchasing, and employment indices.

Ahir, H, N Bloom, and D Furceri (2019), “The global economy hit by higher uncertainty”, VoxEU.org. https://voxeu.org/article/trade-uncertainty-rising-and-can-harm-global-economy

 

Uncertainty generated from Brexit, the US-China trade war, Japan – South Korea trade wars, and general discontentment with global trend towards widening income inequality is creating a toxic mix for politicians to deal with. The irony is the conventional approach of blaming your trading partners for your problems is only likely to exacerbate a general lack of confidence and increase further uncertainty.

The current round of the G7 summit in Biarritz concluded with support “to overhaul the WTO to improve effectiveness with regard to intellectual property protection, to settle disputes more swiftly and to eliminate unfair trade practices.” In essence, it’s signaling a need to strengthen the capabilities of the WTO to act faster and more decisively in resolving disputes that are even more political than structural in nature, requiring a more multi-faceted engagement approach. Whilst this may help in the long-run, in reality, companies will have to contend with uncertainty in global trade for some time to come as well as the impacts on the real economy from these disputes.

And all of this is happening as IMO 2020 approaches, the January 1, 2020, date by which the International Maritime Organization mandates a switch to lower sulfur fuels in order to achieve an 80% reduction in sulfur emissions leading to significant cost increases in the shipping goods via ocean freight (initial estimates between 180USD – 420 USD per TEU dependent on routing, base fuel costs, carrier).

So given the significant uncertainty around global trade agreements, the increasing use of trade as a political football, the increasing costs to trade and the shortening of product lifecycles as customers want faster, newer more differentiated offerings. Is it still worth it?

Of course this is very much dependent on what industry you are in. Whether you’re a global manufacturer or a wholesaler sourcing goods, your perspectives may be different based on investments made, sensitivity to current trade/tariff measures, customer demands, your markets, and the degree to which you are exposed to political debate and targeting.

However, I would offer that the benefits of specialization, economies of scale and unique factors of production that have underpinned global trade still exist as Adam Smith put it in 1776:

“By means of glasses, hotbeds, and hot walls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland?”[1]

Today this simple analogy still holds true in skills, competences, capabilities, and access to markets and insights so that over time the expectation is that trade will prevail.

While the recent outlook has been gloomy, opportunities for 2020 include a resolution to a number of ongoing disputes and a final settlement on Brexit (we hope). Additionally, the maturation in technologies such as blockchain, process automation, forecasting and demand management solutions can also offset costs associated with IMO and support greater agility in the uncertain supply-chain world that we currently live in.

Indeed, if 2019 was the year of trade uncertainty, 2020 could be a restorative year in our ability to execute global trade.

Partnering with an experienced supply chain leader will be essential to minimizing cost increases while ensuring the efficient flow of your company’s goods and services.

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[1] World Economic Forum:https://www.weforum.org/agenda/2019/07/how-trade-uncertainty-is-impacting-the-global-economy/

[2]https://www.instituteforsupplymanagement.org/ismreport/mfgrob.cfm?SSO=1

[3]Adam Smith: Wealth of nations 1776

Neil Wheeldon is the Vice Presidents Solutions, BDP International.

machine learning

How Machine Learning Is Transforming Supply Chain Management

Supply chain management is a complicated business. A lack of synchronization or one missing entity can interrupt the entire chain and result in millions in losses.

In a market environment where businesses are continually striving to cut costs, increase profits, and enhance customer experience, disruptive technologies like machine learning offer a window of opportunity. By exploiting the enormous amount of real-time data and leveraging the cloud power, it improves decision making, process automation, and optimization. It can create an entire machine intelligence-powered supply chain model. It also helps companies improve insights, mitigate risks, and enhance performance, all of which are crucial as the global supply chain war wages on.

Gartner recently announced that innovative technologies like blockchain and Artificial Intelligence (AI)/machine learning would significantly disrupt existing supply chain operating models. In addition to advanced analytics and Internet of Things (IoT), machine learning is considered one of the high-benefit technologies. This is because it allows dynamic shifts across industries and enables efficient processes that result in significant revenue gains or cost savings. 

So, it is no surprise then that, in another industry update, Gartner predicted that at least 50% of global companies would be using AI-related transformational technologies in supply chain operations by 2023.

There are three key ways in which these transformational technologies empower businesses:

Monitoring: By connecting equipment, products, and vehicles with IoT sensors, companies can monitor goods and operations in real time.

Analyzing: Advanced analytics convert data into actionable insights and help businesses understand the reason behind specific incidents and how they impact the business.

Acting: Valuable insights as a result of data crunching help businesses address planning challenges and automate processes to improve efficiency.

So, adopting machine learning in supply chains is critical for companies to stay competitive in the long run. However, what aspects of the supply chain will be impacted by machine learning? Let us find out.

A Myriad of Benefits to Supply Chains

If you get the algorithms right, the benefits of using machine learning are innumerable. The algorithms can predict supply trends based on human behavior, resulting in personalized customer service with lower inventories and better utilization of resources. We take a look at several such benefits of machine learning below.

Brings Real-Time Visibility Which Improves Customer Experience

According to a Statista survey, visibility is a significant organizational challenge for 21% of supply chain professionals. Visibility has been a buzzword in supply chain circles for more than a decade now and every technology so far has promised to improve visibility in some way. But, is machine learning contributing anything here? 

The combination of IoT, deep analytics, and real-time monitoring is improving supply chain visibility, helping businesses achieve delivery commitments and transforming the customer experience. By examining historical data from various sources, machine learning workflows discover complex interconnections between various processes along the value chain.

Amazon is a prime example as it is using machine learning to enhance its customer experience by gaining an understanding of how product recommendations influence customers’ store visits.

Cuts Costs and Reduces Response Times

As per Amazon’s regulatory filing in 2017, their shipping costs increased from $11.5 billion in 2015 to $21.7 billion in 2017. And, it’s not just Amazon. Many other players are struggling because of rising shipping costs. In fact, in one survey, more than 24% of supply chain professionals expressed that delivery costs are the biggest challenge for B2C companies.

By applying machine learning to handle demand-to-supply imbalances and trigger automated responses, businesses can improve the customer experience, while minimizing costs. Operational and administrative costs can also be reduced by integrating freight and warehousing processes and improving connectivity with logistics service providers.

Machine learning algorithms’ ability to analyze and self-learn from historic delivery records and real-time data helps managers and dispatchers optimize the route for each vehicle. This allows them to save costs, reduce driving time, and increase productivity. 

Machine learning can also be used to detect issues in the supply chain before they disrupt the business. Having an effective supply chain forecasting system means a business has the intelligence to respond to emerging threats. And, the faster a business can respond to problems, the more effective the response will be.

Streamlines Production Planning and Identifies Demand Patterns

When it comes to machine learning’s role in optimizing complex supply chains, production planning is just the tip of the iceberg.

Sophisticated algorithms are trained on existing production data in such a way that they start identifying future buying, customers’ ordering behavior, and possible areas of waste. This helps businesses tailor production and transport processes to actual demand as well as improve their relationships with specific customers.

For example, by anticipating and acting on the specific needs of your customers before they even arise, businesses can establish themselves as reputed brands capable of recognizing customer needs. 

There is so much volatility in global supply chains that it will be challenging to forecast demand accurately, without technologies like machine learning. However, reaping the full benefits of machine learning might take years. So, businesses should plan for the future and start taking advantage of the machine learning solutions available today.

Investing in machine learning and the related technologies today means increased profitability and more resources for your business tomorrow. Businesses that can use machine learning in their supply chains will have better plans, resulting in less “firefighting” and fewer inefficiencies.

 

technology

Competitors Link Arms and Embrace Technology’s Promise

Overcapacity. Low freight rates. Security problems. Data inadequacies. Stringent environmental regulations. When it comes to moving containerized freight around the globe, third-party logistics companies (3PLs) have a lot to deal with.

However, like a guardian angel, blockchain has arrived to solve all these issues and more for the 3PL industry, which stands to save billions of dollars annually through increased efficiency, improved processes and a digital transformation.

Blockchain technology, while still in its innovative infancy, has “a lot of potential” to facilitate trade, according to a report by Christine McDaniel, a senior research fellow at George Mason University’s Mercatus Center, Hanna C. Norberg, the founder of Trade Economista and the university that was released in May.

In “Can Blockchain Technology Facilitate International Trade?” McDaniel and Norberg explored blockchain technology’s usefulness in easing trade finance, improving customs procedures and tracking the provenance of goods. Their conclusion: “Adaptability, interoperability, and a policy environment that welcomes experimentation will be essential if the U.S. economy is to realize the potential benefits of blockchain technology across the international trade landscape.”

They also point out that numerous private- and public-sector efforts are underway to explore the benefits of blockchain technology. Financial institutions are experimenting with blockchain to increase access and decrease trade-finance costs.

The shipping industry is working with those along the supply chain and with customs officials to see how a distributed digital ledger can facilitate the transparent movement of goods across borders and seas. Companies and retailers are exploring ways to track their own supply chains so they can communicate tracking and origin information to consumers who increasingly demand such information.

Among those that are all-in with blockchain is Blockshipping, a Danish concern that was launched in May 2018 with a goal of developing the world’s first freight container registry. The startup claims its blockchain-based Global Shared Container Platform, which provides a real-time registry of 27 million containers, could save the industry $5.7 billion annually. For that to work, parties across the industry must apply sensors to all containers.

The same month that Blockshipping announced its arrival, global shipping giants CMA CGM and the Mediterranean Shipping Co. joined TradeLens, the blockchain-based digital shipping platform developed three years ago by A.P. Moller-Maersk and IBM. TradeLens is an open and neutral blockchain platform that promotes an efficient, transparent and secure exchange of information to improve collaboration between different stakeholders within the supply chain.

Ironically, CMA CGM and Hapag-Lloyd had criticized the workings of TradeLens in 2018, stating that for a blockchain-based platform to succeed within the industry, it would need to have a common standard. With CMA CGM and MSC now having joined TradeLens, the platform accounts for shipping data of over half the number of container lines that sail across international waters.

Surgere is a North Canton, Ohio-based digital supply chain and packaging specialist whose clients include Nissan and CEVA Logistics. In June, Surgere announced it had joined the Blockchain in Transport Alliance (Bita), a Chattanooga, Tennessee-based organization with nearly 500 members in more than 25 countries that collectively generate more than $1 trillion annually. The alliance helps develop industry standards, encourage the use of new solutions and educate its members who are mostly drawn from the freight, transportation and logistics sectors.

“Blockchain enables instant visibility of inventory transactions, captured by Surgere’s extremely accurate RFID solutions, which can be immediately and collectively processed throughout the supply chain,” said Rusty Coleman, Surgere’s vice-president of Digital Transformation, in the Bita announcement. “That visibility can remove artificially created demand patterns and make visible smooth and continuous demand for tier [suppliers] near real-time.”

Representatives from NBSF Railway, Daimler, Delta, J.B. Hunt, FedEx, Transplace and UPS are on the Bita board of directors, whose Standards Council chairman is Dale Chrystie, FedEx’s business strategist and blockchain fellow. “This is not a process improvement initiative; this is a breakthrough discussion,” Chrystie said from the stage of the Blockchain Revolution Global conference in Toronto on April 25. “This is a different way to think about how global clearance looks in the future.”

The notion that competitors are joining hands when it comes to the promise of blockchain was demonstrated by the fact that the FedEx executive was joined by Eugene Laney, head of international government affairs for DHL USA and Mahesh Sahasranaman, principal architect at UPS Supply Chain Solutions, in a discussion with Don Tapscott, executive chairman of the Blockchain Research Institute. Each agreed there is a common interest in embracing uniform standards for blockchain and getting governments on board with the technology.

“This is an issue that must be looked at with a global viewpoint,” Chrystie said. “These dots are going to connect. The question is how are you going to accelerate that process.”

Here is a deeper dive into ways blockchain can revolutionize the industry, according to the “Can Blockchain Technology Facilitate International Trade?” report from George Mason University’s Mercatus Center.

Trade and Finance

Blockchain could reduce the expense and time required to facilitate trade that depends on third-party lending or insurance. Such trade accounts for about 80 percent of global trade. This reduction of expense and time will be especially important for small and medium-sized enterprises that may face restrictions to accessing credit or for firms in countries with less developed finance markets.

Customs Procedures

The technology could reduce costs associated with obtaining import and export licenses, creating and verifying the accuracy of cargo and shipping documents, and making customs declarations. Blockchain could make a positive contribution to expediting customs procedures. The total impact of those procedures on global trade volumes and economic output is estimated to be greater than that of tariffs.

Tracking the Origin of Goods

Blockchain could improve how producers and retailers manage their supply chains by providing real-time information on the movement and origin of goods. Blockchain designed for trade should disallow anonymity. If such a design were to be widely adopted, it might improve detection of illicit trade flows and help deter illegitimate efforts to circumvent trade rules. A design without anonymity could aid customs and law enforcement while easing the flow of legitimate trade.

demand

Adapting Supply Chains for Increased Consumer Demand and Same Day Shipping

Same-day and next-day shipping options are increasing, and consumers are beginning to desire expedited shipping options with minimal delay. Through new technologies, space optimization, and supply chain auditing, there are various ways companies can adapt to this demand.

There used to be a tattered cartoon taped to every dry cleaner’s cash register. There’s a man laughing — holding his stomach, actually, as the joke is so funny — with a bold face caption that reads: “YOU WANT IT WHEN?!”

Faced with minimal competition, it was a time when companies held production and delivery control, with consumers at their mercy to indeed receive their press garments at a time of the dry cleaner’s choosing.

Those days are long gone. Armed with just a digital device, consumers have numerous options in finding suppliers who can provide things whenever they desire. As such, they expect — rather, demand —products and services on their terms.

As a result, companies must either adapt their supply chains to accommodate these expectations or find themselves with diminished market share. Below are key areas that companies must address to compete in today’s on-demand environment.

Take inventory of your inventory

As a first step, perform a comprehensive audit of your entire supply chain, even hiring a third-party specialist to develop the critical assessment. Such a deep-dive look will measure delivery accuracy, on-time performance, worker productivity and even call center effectiveness, all significant contributors to the overall efficiency of your suppliers and their impact on your supply chain.

Find a better mousetrap

Once the audit is complete, it’s time to take action, which may mean making fundamental changes to your supply chain. If you’re currently operating with a hub-and-spoke distribution model, for instance, the feedback may point to achieving greater efficiencies by adopting a decentralized distribution model (and vice versa). Especially when it comes to last-mile delivery, partnering with a third-party provider can also help, providing you with the fast turnaround that your customers expect without straining your existing operations.

Get your house in order

Any fundamental change to the supply chain must include enhancements to warehouses, adopting technological advances that deliver greater efficiencies. For some, this may mean incorporating a short-interval waving warehouse management system (WMS), which allows orders to be dispatched in clusters or waves. Other advances automate the sizing and selection of cartons, which makes packing more efficient while streamlining costs.

Taking things personnel-ly

Until supply chain logistics can all be outsourced to robots, bottom-line performance ultimately depends on the availability and performance of your employees. To those ends, leverage technology to minimize labor supply disruptions, especially during holiday seasons when demand peaks. (This is increasingly important as unemployment reaches record lows, further diminishing the labor pool.) Technology should also be used for scheduling and training, which delivers greater efficiencies and even job retention, as greater scheduling flexibility leads to increased employee satisfaction and loyalty.

Consumer demand for ever-shrinking delivery timelines makes ongoing supply chain refinements no longer optional, but mandatory. Your long-term success depends on it.

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Neil Wheeldon is vice president — solutions at BDP International in The Hague, Netherlands.

artificial

Artificial Guts Market in Poland Grows Tangibly for the Fourth Consecutive Year

IndexBox has just published a new report: ‘Poland – Artificial Guts (Sausage Skins) – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

The revenue of the artificial guts market in Poland amounted to $88M in 2018, increasing by 11% 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). Artificial guts consumption continues to increase noticeably over the last four years, accelerating by 2018.

Market Forecast 2019-2025 in Poland

Driven by increasing demand for artificial guts in Poland, the market is expected to continue an upward consumption trend over the next seven-year period. Market performance is forecast to expand with an anticipated CAGR of +1.8% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 6.8K tonnes by the end of 2025.

Production in Poland

In 2018, approx. 6.1K tonnes of artificial guts (sausage skins) were produced in Poland; picking up by 11% against the previous year. The total output volume increased at an average annual rate of +1.4% from 2007 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations in certain years. Artificial guts production peaked in 2018 and is likely to continue its growth in the near future. In value terms, artificial guts production totaled $77M in 2018 estimated in export prices.

Exports from Poland

In 2018, approx. 3.7K tonnes of artificial guts (sausage skins) were exported from Poland; approximately reflecting the previous year. The total export volume increased at an average annual rate of +1.6% from 2007 to 2018; the trend pattern remained consistent, with only minor fluctuations being observed in certain years. Over the period under review, artificial guts exports attained their peak figure at 4K tonnes in 2012; however, from 2013 to 2018, exports failed to regain their momentum.

In value terms, artificial guts exports totaled $50M (IndexBox estimates) in 2018.

Exports by Country

Ukraine (992 tonnes), Germany (666 tonnes) and Russia (603 tonnes) were the main destinations of artificial guts exports from Poland, with a combined 60% share of total exports. Spain, Italy, France, Kazakhstan, Bulgaria, Belarus, Slovakia and Turkmenistan lagged somewhat behind, together comprising a further 25%.

From 2007 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Bulgaria, while the other leaders experienced more modest paces of growth.

Export Prices by Country

In 2018, the average artificial guts export price amounted to $13,453 per tonne, surging by 3.3% against the previous year. Over the period under review, the artificial guts export price continues to indicate a relatively flat trend pattern. Over the period under review, the average export prices for artificial guts (sausage skins) attained their maximum at $16,203 per tonne in 2014; however, from 2015 to 2018, export prices stood at a somewhat lower figure.

Prices varied noticeably by the country of destination; the country with the highest price was Turkmenistan ($17,525 per tonne), while the average price for exports to Bulgaria ($8,797 per tonne) was amongst the lowest.

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

Imports into Poland

Artificial guts imports into Poland stood at 3.6K tonnes in 2018, lowering by -2.1% against the previous year. Over the period under review, the total imports indicated a remarkable expansion from 2007 to 2018: its volume increased at an average annual rate of +4.1% over the last eleven-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Over the period under review, artificial guts imports reached their peak figure at 3.8K tonnes in 2015; however, from 2016 to 2018, imports stood at a somewhat lower figure. In value terms, artificial guts imports totaled $51M (IndexBox estimates) in 2018.

Imports by Country

The Czech Republic (1.1K tonnes), Germany (965 tonnes) and Spain (701 tonnes) were the main suppliers of artificial guts imports to Poland, with a combined 77% share of total imports.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main suppliers, was attained by Spain, while the other leaders experienced more modest paces of growth.

In value terms, the largest artificial guts suppliers to Poland were Germany ($16M), the Czech Republic ($16M) and Spain ($8.4M), together comprising 80% of total imports.

Import Prices by Country

The average artificial guts import price stood at $13,978 per tonne in 2018, flattening at the previous year. Over the period under review, the artificial guts import price, however, continues to indicate a moderate slump. The pace of growth appeared the most rapid in 2010 an increase of 12% year-to-year.

Average prices varied somewhat amongst the major supplying countries. In 2018, the countries with the highest prices were Germany ($16,676 per tonne) and the Czech Republic ($14,152 per tonne), while the price for France ($11,250 per tonne) and Spain ($12,036 per tonne) were amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Germany, while the prices for the other major suppliers experienced a decline.

Source: IndexBox AI Platform

container

How to Take the Risk Out of International Container Logistics

Who is reliable enough to trust with my assets? This was the main question of people after my keynote about “How to take the risk out of container logistics” at Intermodal Europe in Hamburg. Trust is basically the most important ingredient when doing business with a partner: Will they return my containers on time? Do I have to follow up on my invoices? Can I easily reach my partner when I have questions? Without a certain level of trust, you would probably not make deals with a company, even though the offered price seems cheap.

Over the last decade we have built long-lasting relationships with partners where trust was not an issue, but now two things have changed: (1) Digital technologies allow us to collaborate with basically the entire world in no time and (2) stakeholders are increasingly asking for transparency e.g. to better understand where the products they purchase come from. To adapt to these changes, we have to redefine “trust” and find answers for how to make time-efficient and risk-free deals with partners you have never worked with before. 

Trust is an everyday problem in logistics 

The lack of trust is an everyday problem for most container owners and users with a high impact on the decisions they make. Let me give you a few examples: Imagine a container lessee returns your equipment too late or in bad condition. Of course, you might receive per diem fees to compensate you and the DPP (Damage protection plan) covers damages but how do you explain that to your next customer who is waiting for these boxes? How much time does it cost you to follow up, arrange container inspections and send emails back and forth?

Imagine if you bought a used car and the condition was completely different from what the seller had told you before, you would probably not work with the same seller again in the future (and I bet you would also advise your friends against buying his/ her cars). What happens is that operational costs increase due to the lack of trust, Maersk, for example, announced random container inspections because of misdeclaration of cargo. Increasing costs and high risk ultimately leads to something everyone probably has already said at least once: We only work with people we know.

What is currently being done to mitigate risk?

Most of the time decisions are made based on gut feeling or anecdotal evidence from your network, the press, Google or sometimes just a random Linkedin post about a specific company. In addition to that, personal meetings and extensive travel are still the standards for vetting a potential new partner before setting up bank guarantees, credits assessments and “triple-checked” watertight contracts by expensive layers. It’s not only incredibly difficult, time-consuming and expensive to collaborate with new partners but also not real-time, non-scalable and error-prone. Such partner vetting processes lead to fewer partnerships, less market transparency and slower speed- which makes no sense in times of real-time communication, cost pressure and the increasing need for market transparency.

In today’s digital age, there must be a better way. Why? Because you won’t have the time to initiate your traditional vetting process when a potential customer is reaching out. If you want to get new deals, you have to be the first one with a quotation.

Other industries rely on platforms as neutral data layers

To create trust, we can learn from how other industries have increased trust through platforms as neutral data layers, data standards as the common language, user-generated content and financial credit scoring models. May it be Amazon or Alibaba for buying and selling products online, Trustedshops for e-commerce or Delivery Hero for ordering food online – Other industries rely on platforms as neutral data layers. Take Alibaba as an example: Would you buy from a small, random company that you have never heard of just because the price is cheap? Most likely you would not. On Alibaba you do so because you trust their platform, the Alibaba insurance and their vetting process.

Moreover, you trust your peers and you look at how other partners have rated that company in past transactions on Alibaba. That’s why most online platforms have introduced performance reviews & ratings. You would probably rather buy from a seller on Amazon with thousands of 5-star reviews instead of someone with barely any ratings.

With Container xChange, we can see the same happening in container logistics. Since we introduced peer-to-peer reviews and ratings we have seen an increase in transactions by 17% for top-rated companies (>4 stars on average) and overall it has led to faster replies, release documents and a greater level of trust because members now have a bigger incentive to be a reliable partner. Another great example of how platforms in other industries leverage technology are payment and loan providers such as Klarna or even retailers like Ikea with next level credit scoring models. Instead of gut feeling, they can now, for example, even include signals from social media with their algorithms to forecast creditworthiness – which speeds up vetting processes and decreases human-made errors significantly.

May it be reviews, credit checks or vetting – I think we can do the same in logistics. Platforms like Freightos (for freight forwarders and shippers), Xeneta (freight rates) or Container xChange (asset-sharing in container logistics) already exist, but in the end, it comes down to your behaviour. Make credit checks for your partners as easy as possible, be reliable and stick to what you agreed on. Becoming a trustworthy partner yourself is the first step to a greater level of trust in logistics.

automation

Automation Won’t Destroy Trade – It Might Even Boost It

Alarm bells are ringing

Many industry observers are sounding alarms about the looming impact of automation, robots and 3D printing, which they fear will destroy jobsdisrupt value chains and maybe even reduce the need for international trade. Developing countries are particularly concerned because trade has been an avenue to economic development and growth for them. But a recent report released by the World Bank shows that the data and evidence don’t support the hype. Instead, automation, robots and 3D printing might actually increase trade as trade costs continue to fall.

Some business analysts have warned that automation and robots could disrupt and shorten global supply chains. The thinking behind the concern is that, if a computer can design it and a 3D printer can make it, then we won’t need to source it from countries abroad that have more abundant low-cost labor than we do. Instead, companies will drastically shorten their value chains, which could reduce international trade.

The anxieties have gotten the attention of development economists and developing countries. Trade and economic growth go hand-in-hand, both in economic theory and in practice. Multiple studies have shown that firms in developing countries that participate in global value chains outperform their local peers that solely focus on domestic markets. If robots eliminate the need for global value chains, this important avenue for economic development could be threatened.

Anxiety over automation may be overblown

Scare tactics about economic change are attractive because they get our attention. About 15 years ago, we saw headlines about “white collar outsourcing” (once attorneys were added to the list of jobs that could be moved offshore, the panic even spread into boardrooms). Some lawmakers called for restrictions on offshoring, and some of those calls are still alive today. But the mass exodus of white collar jobs did not occur.

The World Bank is a multilateral development agency that makes grants and loans to support capital projects and economic growth in the poorest countries. Anything that reduces the need for trade and global value chains would hit those developing countries hard, putting the automation concerns squarely on the World Bank’s radar.

In its annual World Development Report, the latest released on October 8, the World Bank does not take a definitive stance on the overall effects of automation, and it does not make any bold predictions. But it does make one thing clear: The anxiety over automation hindering trade is not supported by the data and evidence. In fact, the authors show that sectors with the largest increases in automation have also been those with the largest increases in trade. Yep, that’s right: We’re experiencing the opposite phenomenon to what so many are worried about.

Automation actually helping to expand trade

Specifically, the report shows that the percentage change in imports of parts from developing countries from 1995 to 2015 is higher in industries that are more automated. Agriculture and textiles are among the least-automated industries and have the smallest change. Metal, rubber and plastics, and automotive sectors have the highest rates of automation and the largest increases in trade.

Automation in industrial countries has boosted imports from developing countries

Why? Because automation, like robotic assembly and 3D printing, leads to an expansion in output and demand for material inputs. Automation can also lead to the creation of new tasks. So while it brings labor market adjustment pains — like technology and progress always do — automation will not necessarily reduce trade or shorten global value chains.

Meanwhile, investments in digital technologies continue to lower the costs of coordinating across long distances. These lower trade costs are expected to promote trade and lead to a continued expansion of global value chains, particularly for developing countries.

The big picture

Here’s the big picture: Change is the one thing in the economy you can count on. Improvements in how we make things and advanced production technologies are likely to continue, and workers and firms that adapt and embrace these changes are likely to outperform those that do not. But a wide-sweeping elimination of trade and global value chains due to automation and robots? Don’t believe the hype.

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The original version of this article was published in The Hill.

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 also appeared on TradeVistas.org. Republished with permission.

humanitarian

Amazon, Total Quality Logistics Among 2019 Humanitarian Logistics Award Honorees

Amazon and Total Quality Logistics (TQL) are among the 2019 winners of the American Logistics Aid Network’s Humanitarian Logistics Awards.

Disaster Relief by Amazon earned the Outstanding Contribution Award for leveraging its extensive services, operations and logistics technology to help advance the cause of effective and large-scale disaster relief. For instance, in the wake of Hurricane Dorian, the Disaster Relief by Amazon team mobilized two Amazon Air flights, full of tens of thousands of donated relief items such as tarps, buckets and water containers.

Total Quality Logistics also received an Outstanding Contribution Award for Moves that Matter, a program that provides funding to help nonprofits and businesses defray the cost of humanitarian shipments, as well as for TQL Cares, an in-house initiative that raises millions of dollars and contributes thousands of volunteer hours to various compassionate causes each year.

Nezih Altay of DePaul University received the Research and Academic Contributions Award for being one of the first U.S. academics to recognize the importance of applying operations research and supply chain management to the challenge of disaster relief. His 2006 paper, OR/MS Research in Disaster Operations Management, was one of the first papers to spark research in humanitarian logistics and remains the most cited article in its field.

Author and supply chain resilience expert Phil Palin received the Lifetime Achievement Award for his ongoing work to help government and businesses develop greater alignment when providing disaster relief. Over the years, he has worked closely with federal, state, local and private sector leaders to prepare for and respond to complex wide-area catastrophic events and served in a variety of capacities, most recently as the FEMA team leader for the supply chain Ecosystem Assessment. He has also authored numerous books and articles about supply chain resilience, including Out of the Whirlwind: Supply and Demand after Hurricane Maria.

“Each of these recipients is living proof that humanitarianism isn’t just a one-time event–and that true service extends well beyond a single disaster,” says Mark Richards, board chairman of the American Logistics Aid Network. “It truly is part of their corporate DNA and personal passion. We’re grateful to them for the many contributions they have made, and we are proud to recognize them.”

solutions

How Customized Shipping Solutions Benefit Your Supply Chain

Gone are the days when the one-size-fits-all approach to logistics is good enough to meet the exacting standards of every shipment. In fact, maybe those days were never really here.

Though they may seem like a good bargain, many of the out-of-the-box logistics services of today lack the flexibility to accommodate specialized loads like artwork, delicate medical equipment, and other sensitive or rush items. Seemingly innocuous errors with such shipments can cost thousands of dollars, or possibly more. 

SPECIALISTS IN FREIGHT FORWARD THINKING 

Today’s shippers and shipments demand more from their 3PL provider, but unfortunately, some providers still cannot rise to the challenge. Thankfully, there’s a solution for supply chains looking for individualized services. Nimble, more personalized 3PL’s operate with the specific goal of handling sensitive cargo. The Magnate Worldwide family of companies – comprised of TrumpCard and Masterpiece International – serves supply chains with a variety of customizable solutions for businesses big and small. They offer a boutique approach to logistics not possible with larger, more generic providers. 

Founded in 1995, TrumpCard specializes in domestic air and ground expedited shipments that are handling-sensitive and time-definite in nature – from medical equipment to aerospace parts to entertainment industry equipment. “We focus on domestic shipments routed by air and ground that have special handling requirements or rapid deadlines,” said Chris Zingrebe, President of TrumpCard, “The industries we serve typically have sensitive cargo that may require elevated service levels, such as White Glove or next day delivery.” TrumpCard offers a premier white-glove service for special deliveries into sensitive environments like hospitals or data centers. The company’s expertise in this type of mission-critical shipment has made them masters of proactive communication and efficiency when it comes to handling sensitive shipments and time-definite services. 

Founded in 1989, Masterpiece International specializes in logistics, freight forwarding, and customs brokerage of fine art for museums, galleries, and art fairs as well as offering services to private clients, and the entertainment and events industry. “Masterpiece has a rich history in providing premier logistics services to the fine art industry,” said Thomas Gilgen, President of Masterpiece, “…we’ve taken that and expanded across many other industries with specialized requirements.” Over the years, Masterpiece has developed an International Logistics Solutions Division which focuses on shipments for technology, life sciences, energy, marine, aerospace, retail, trade show, and household goods industries. Due to the highly specialized nature of their shipments, Masterpiece International has developed expertise in handling sensitive shipments and provides that high level of service across all cargo, whether they’re shipping priceless works of art, mission-critical aerospace equipment, concert, and event cargo, or temperature-controlled life sciences materials.

MINIMIZING RISK, MAKING DEADLINES, AND ADDING VALUE 

No matter what the cargo is, shippers are inherently taking a risk when transporting goods. Unfortunately, that risk only increases as the value of the cargo increases. Not only are you risking merchandise becoming lost or damaged, even the risk of delay can throw off an entire supply chain. The key to eliminating risk and guaranteeing a successful delivery is working with a 3PL partner that you trust to get your shipment where it needs to go, when it needs to be there. But nobody has a crystal ball, so how do you know you can trust your 3PL? It pays to do your homework. 

In logistics, time is money, especially when one delay can cost thousands of dollars and set off a domino effect of even more problems. That’s why it pays to select a provider that has the expertise to get your shipment where it needs to go on time, every time. When selecting a 3PL, a provider’s on-time rate is an excellent indicator of what you can expect for your own merchandise deliveries. TrumpCard, for example, boasts an impressive 99% on-time rate, in addition to a 24/7 team managing shipments. TrumpCard’s state-of-the-art tracking software ensures that all shipments are accounted for at all times, so there is no room for delay or loss, and you can always keep tabs on your merchandise no matter where it is in the supply chain. 

One optional service a business may want to consider is additional security measures for the supply chain. Though not necessary for all shipments, when shipping valuable or sensitive material, additional security services can offer peace of mind by minimizing security risks and blind spots. At Masterpiece International, teams specialize in minimizing risks when planning, routing and executing and have access to an in-house security and supervision team for protection of high-value goods. That team, the Masterpiece Security Group, is a licensed security organization with tarmac access at many major U.S. airports, their own dedicated vehicles, and a partner network of highly vetted agents and carriers. 

Ultimately, when it comes to selecting a logistics provider, added values like built-in security and customizable solutions only matter if your 3PL has the visibility and customer service skills to back them up. Both TrumpCard and Masterpiece believe that visibility and customer service are key from the moment they take possession of your merchandise to its final delivery at the end-user. Both companies offer online track and trace, shipment imaging, and supervision all designed to keep tabs on your merchandise and give you peace of mind. At Magnate, customer service is more than just a pleasantry, it means that experienced agents are problem solving, customizing solutions, and providing timely and important information to the client with a personalized touch that suits the individual needs of your business. 

In the end, a combination of many factors create value, not just a big name or a low price. Customizable solutions with additional features like an excellent on-time rate, added security, transparency, and expertise in sensitive and high-value shipments are all part of what adds value to a specialized supply chain. TrumpCard and Masterpiece International have been trusted to handle sensitive, mission-critical, and high-value shipments for over 50 years of combined service – continuously getting the job done right for your business.