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REPORT FROM BSI AND TT CLUB REVIEWS GLOBAL CARGO THEFT TRENDS

REPORT FROM BSI AND TT CLUB REVIEWS GLOBAL CARGO THEFT TRENDS

BSI Supply Chain Services and Solutions and leading international transport and logistics insurer TT Club recently launched their first joint 2018 Semi-Annual Global Cargo Theft Intelligence and Advisory Report.

Bringing together threat and intelligence data from BSI’s supply chain security country risk intelligence tool SCREEN and TT Club’s insurance risk management and loss prevention insights, the first edition reveals violent truck hijackings account for 24 percent of cargo theft incidents globally. Additionally, the report provides a detailed Regional Overview spotlighting cargo theft trends in China and India.

The food and beverage sector is the most targeted (at 27 percent). Consumer products and hi-tech electronics industries also suffer high rates of cargo theft. Warehousing is the second most vulnerable target at 19 percent. Transport by road is the most often targeted mode for cargo crime across the globe, at a whopping 75 percent. Warehousing is the second most vulnerable target at 19 percent.

The report includes several pieces of loss prevention advice to counter the identified threats. Download it here.

 

AND THE ENVELOPES, PLEASE

What do a U.S. manufacturer, a Swedish retailer and a South African pharmacy chain all share in common? Hillenbrand (U.S.), ICA Group (Sweden) and Dischem Pharmacies (South Africa) battled it out with four other global firms recently at the 2018 Supply Chain Finance Awards.

Held Nov. 29 in Amsterdam, sponsored by global financial institution ING and organized by the Supply Chain Finance (SCF) Community, a global entity of professionals, private firms and knowledge institutions, their annual awards not only recognize achievements in the larger SCF world but also promote greater unity and collaboration as it grows and matures.

With industrial value chains becoming increasingly complex, manufacturers in 2018 relied heavily on interlocking supplier networks. More actors equate to increased risk, principally because parties do not know one another, and many times they are working across time zones and borders where physical relationships are nearly impossible to foster. Through shared new research and best practices, the SCF Community is helping to reduce complexity and risk and keeping cash liquid, something that benefits both sides of a transaction.

A typical contract is comprised of a buyer and a supplier. Each have distinct interests but both desire at least one thing in common: optimized cash flow. This produces a natural conflict as the buyer seeks to delay payment (to retain their cash) and the seller needs to release the product and invoice the buyer to receive payment as quickly as possible. With SCF, there is a third actor added to the mix–the funder or financing institution–which buys receivables or invoices at a discount from suppliers. The suppliers get their cash quickly and the bank then deals directly with the buyer.

The SCF process encourages collaboration instead of fomenting competition, which is a natural extension of a relationship where both parties desire the same, individually advantageous outcome. And SCF works even better when the buyer possesses a superior credit rating to the seller. A savvy buyer will use this to negotiate better terms from the seller, but the seller can also capitalize immediately by selling its receivables to the financing institution for immediate payment.

 

SCF at a Glance

It is useful to understand the SCF concept at a macro level because it does a lot of things but not everything. As such:

1. Not a loan – For the supplier, a true sale of its receivables is on the books, so supplier finance is simply an extension of the buyer’s accounts payable. Thus, the process is not considered a financial debt.

2. Multibank capacity – More than one financial institution can take part in the process, which adds a tremendous amount of flexibility.

3. Not factoring – In most circumstances, the supplier receives payment on the invoice (minus a standard transaction fee). Once the invoice is settled, there is no recourse burden on the supplier.

4. Equal opportunity – The beauty with SCF is it provides value not just for large companies but firms of all sizes (and credit ratings). This also includes SME suppliers.

 

The Awards

The 2018 Supply Chain Finance Awards jury, composed of the leading minds from the Fraunhofer Institute, the Luxottica Group, Nestrade S.A. and Metso, had its hands full this year. On the Transport & Logistics side, Kuehne + Nagel Group took home the award for Best SCF Solution. The Swiss-based holding with 1,336 offices worldwide and more than 75,000 employees had bested DHL Global Forwarding, Panalpina and DB Schenker in accounting for roughly 15 percent of the word’s sea and air freight business revenue.

This year, Logistics Kuehne + Nagel added an SCF layer on an already efficient Tradeshift e-invoicing platform, which now provides an unparalleled amount of transparency with regards to invoice status as well as all relevant SCF information. For small and medium-sized suppliers, early payment options are critical, and the Kuehne + Nagel solution gives them the ability to create invoices quickly online, which can result in payment within a matter of days.

The cash-conversion cycle lies at the heart of the matter with, again, both buyer and seller seeking to either maintain liquidity or add liquidity as soon as possible. The jury recognized Kuehne + Nagel’s ability to not only improve on this cycle but also advance the relationship between buyer and supplier, a natural win-win and one that the SFC Community seeks to foster. Kuehne + Nagel works with Citi to offer early payment options to more than 16 North American and European countries, spanning eight currencies. Asian and the Middle East are next for 2019.

Speed is crucial, and this is an area where Kuehne + Nagel set itself apart, having been recognized in the 2017 Adam Smith Awards in the category “Best Trade/Supply Chain Finance Solution.”

To stay abreast on news surrounding the 2019 awards, visit the regularly updated SCF Forum website: www.scf-forum.com/venue.html.

Standardization Strategy impacting Flower Supply Chain Prepares for Second Trial Phase

Europe’s fourth largest air cargo hub, Amsterdam Airport Schiphol teams up with the Holland Flower Alliance to support efforts surrounding the Ideal Flowerbox initiative. The goal of the initiative is to create a system of standardization and space efficiencies in shipping flowers, benefiting the flower supply chain in the region.

“The shipment of flowers is an important activity at Amsterdam Airport Schiphol, so we are very supportive of the Ideal Flowerbox project and we are excited about the initial trial results showing how the box can improve sustainability in the supply chain,” said Roos Bakker, Director Business Development, Amsterdam Airport Schiphol.

“We actively encourage innovation within the air cargo community, and we believe that collaboration with the HFA partners will continue to yield positive results for all stakeholders involved in the shipment of flowers.”

After a successful first trial run led by Royal FloraHolland’s Senior Consultant Christo van der Meer,  a second phase for the trial period is in the works and could lead to future implementation of the strategy on additional flower routes in 2019.

“The initial trial was very successful with a 15 per cent increase of weight on airline pallets and boxes on the Nairobi to Amsterdam route, which demonstrates the value of collaboration between Amsterdam Airport Schiphol, KLM Cargo, and Royal FloraHolland,” said van der Meer.

“The results show that with the use of the Ideal Flowerbox we are able to optimise the aircraft’s load factor, which is beneficial for a sustainable and efficient operation.”

Source: Schiphol

Countdown begins for the 2018 Asian Logistics and Maritime Conference

If you haven’t already read or heard, the 2018 Asian Logistics and Maritime Conference kicks-off this week starting November 20 through November 21 at the Hong Kong Convention and Exhibition Centre. This is the eighth annual conference featuring some of the top industry leaders speaking to the topics of global logistics, supply chain management, block chain innovation, global trade, economic development and much more.

With over 2,100 participants from 36 countries at the 2017 conference, this year’s conference is sure to bring in just as many if not more participants from around the world.

“Asian countries and regions are now pushing forward various trade agreements and regional development strategies, including the Hong Kong-ASEAN [Association of Southeast Asian Nations]
Free Trade Agreement signed last year, the Guangdong-Hong Kong-Macao Greater Bay Area development plan, and the China-Singapore Initiative on Strategic Connectivity,” HKTDC
Deputy Executive Director Raymond Yip said in a press release. “Under the Belt and Road Initiative, many major infrastructure projects, including new road transport systems and port developments, have been kick-started, with a number of them already completed. Such projects foster the development of trade and logistics in Asia, driving better connectivity within the regional supply chain.”

Global Trade Magazine will participate in the conference covering the latest news and insights from key speakers and industry leaders, providing real-time updates, tips and news from the event.

Some of this year’s speakers include:

-Gail Chan, Vice President of Supply Chain Asia, Bloomin’ Brands

-Ken Chung, Chairman of The Chamber of Hong Kong Logistics Industry

-Dean Croke, Chief Analytics Officer of Blockchain in Transport Alliance

-Parash Jain, Head of Transport Research, Asia Pacific, HSBC

-Justin Kelley, Vice President of Operations at MSA Security

-Nicholas Kwan, Director of Research for Hong Kong Trade Development Council

To view the full lineup of speakers and conference details, visit: HKTDC.com

Hermes Logistics To Optimize Cargo Capabilities for Dubai World Central

Dubai World Central has decided to implement and designate Hermes Logistics Technologies and their Cloud H5 variant to ensure full optimization of cargo handling for logistics specialist RSA National’s new flagship air cargo terminal, according to a release this week.

Benefits the cargo management system provides stems directly from the joint venture between US-based National and UAE-based RSA Global. The integration of resources enables companies to utilize recommended supply chain solutions for e-commerce, perishables, government, humanitarian, and retail.

“RSA National is very pleased to partner with Hermes to provide a best-in-class platform, through which we can continue to provide seamless solutions to our customers,” said Abhishek Ajay Shah, Co-Founder and CEO of RSA Global. “Our steadfast goal is to steer our operations with utmost visibility and control, and to extend the same facility to our customers.

This Cloud H5 variant “Hermes 5 SaaS” offers high-performance and functionality along with a user interface and user experience all through the cloud-based system. This can also be utilized for messaging compliance, customs management and revenue accounting.

“This will be a full SaaS Hermes 5 implementation and we anticipate a quick implementation of fewer than three months from contract to go-live,” said Hermes Logistics Technologies CEO Yuval Baruch said. “We are particularly proud that RSA National selected Hermes after they identified our close fit to their vision and strategy as well as the high level of Hermes responsiveness.”

For more information, visit: meantime communications

Source: meantime communications

 

TOP DOWN INNOVATIONS

BluJay Solutions, a leader in supply chain software and services, and Adelante SCM, a research firm and peer-to-peer community for supply chain and logistics professionals, on Aug. 15 released the report, “Competing on Customer Experience: The Driving Force Behind Supply Chain Innovation.”

The research, produced by Manchester, England-based Adelante SCM and presented by Holland, Michigan’s BluJay Solutions, was conducted to explore the links between supply chain management innovation, customer experience, technology adoption and company performance.

The findings provide supply chain and logistics decision-makers with benchmarks and insights to develop informed strategies with regard to innovation and improving customer experience. The research highlights leading factors driving supply chain technology adoption and the next wave of innovation, as well as the barriers to innovation and influence of a customer-centric approach over others.

“The most important lesson learned from companies that have been disrupted is the danger of becoming too complacent with the status quo,” observes Doug Surrett, chief product strategist at BluJay Solutions. “Our hope is this research will provide insights to help companies determine actions they can take to implement market-leading supply chain solutions. As we move into the next evolution of supply-chain logistics, it’s not just about getting goods from point A to point B at the lowest cost, it’s about innovating with a clear objective to optimize the overall customer experience. This requires an approach that considers the entire supply chain ecosystem.”

Supply chain executives from industries including manufacturing, retail and logistic service providers (LSPs) were surveyed, with 140 qualified respondents answering a series of questions about innovation, customer experience and technology. Participants self-identified their company’s effectiveness and maturity (Above Average Performers v. Average or Below Average Performers, Innovators/Early Adopters v. Laggards/Late Majority). Key findings follow.

Customer Experience is King

The report uncovers the close affinity between above-average performers and innovators, who both measure customer experience and rank it as the top factor in supply-chain innovation. Conversely, average or below performers and laggards measure customer experience much less and identify cost reduction as the driving factor in supply-chain innovation.

The data indicates that logistics service providers (LSPs) are champions of enhanced customer experience as they look for ways to differentiate themselves, focusing less on competing on cost, which often leads to commoditization. Cost is a top factor among shippers (manufacturer, retailers and distributors) where cost reduction or competitiveness is still a key indicator for success.

Stop Navel Gazing

Innovators/Early Adopters seem to have matured to the point where they are less concerned about their existing systems and are now focused on outwardly focused needs (i.e. flexibility/innovation of supply chain, working with other functional groups). Additionally, they have adopted an integrated solution for managing their supply chain.

In contrast, laggards are still focusing on updating their antiquated systems and are trailing on adopting integrated solutions. A majority of laggards are still relying on Excel spreadsheets to manage their supply chain.

These findings suggest that to drive faster and more efficient supply chain innovation, leaders need to find flexible, future-proof solutions (i.e. cloud infrastructure, open architecture) to continue to innovate, while laggards must leapfrog ahead by replacing their outdated IT systems with modern ones that eliminate the silos that still exist between their systems and processes.

Future Shock

In terms of the future, the five supply chain investment priorities that received the greatest percent of overall top rank votes were Transportation, Supply Chain Visibility, Warehousing, BI/Analytics, and Trading Partner Connectivity. The results are not too surprising considering that many of the respondents are involved with transportation, and that many of these investment areas, especially Supply Chain Visibility, will continue to be of key importance as more companies look to optimize their operations, decrease costs, and improve the overall customer experience.

Despite all the hype surrounding blockchain, drones and driverless trucks, those technologies ranked near the bottom of the list in terms of which technologies will deliver the most innovative benefits to the supply chain in the next five years. Instead, companies believe technologies such as Mobile Devices and Apps, Control Tower Visibility, and Warehouse Automation/Robots will lead the way.

In general, the top three technologies are all further along the maturity curve and have more established records of delivering benefits than the technologies lower on the list. The findings suggests that perhaps there’s still a level of skepticism or “wait and see” attitude among supply chain executives when it comes to some emerging technologies.

The Whole Enchilada 

“Competing on Customer Experience: The Driving Force Behind Supply Chain Innovation” is available for free download at: www.supplychainresearch.info.

UPS Supply Chain rescues a UPS still struggling with costs

Supply Chain and Freight came to the rescue for UPS in the third quarter, with a strong performance in road freight and forwarding counter-balancing profitability problems elsewhere.

For the whole company consolidated revenue increased by 7.9% year-on-year, whilst stripping-out currency fluctuations, it was up 8.4% at $17.444bn. Net Income was up 19.8% at $1.508bn, a number slightly flattered by lower income tax costs. Operating profit was only 0.7% higher.

The core US Domestic Package revenue was good at $10.437bn, an 8.1% rise. Here the underlying picture was of strong demand from internet retailing in particular enabling a better pricing environment. However operating profit fell in the third quarter possibly influenced by higher transport subcontractor costs, which for the whole group climbed by 13.6% compared to the same period last year.

International Express was not quite as strong in revenue terms, up 3% at $3.47bn. Volumes fell slightly over the quarter by 0.2% but this was balanced by higher average revenue per package. However, fuel costs and currency effects conspired to drive down operating profits by 11% to $536m.

A much better performance was recorded by the Supply Chain and Freight business. It saw profits sharply higher at $242m, a 24.1% increase on revenue up 12%. In UPS Forwarding and UPS Freight a virtuous circle of higher volumes and better utilization improved margins as did better quality products. Presumably this must have been in the face of higher underlying transport costs.

This quarter’s numbers were roughly aligned with the trends seen through the rest of the year, that of good revenue growth but difficulties with the cost base. This is especially the case in the Domestic Express segment, for the first nine months revenue is up 7.2% but operating profit is down 17.8%.

The pre-Christmas period will be key to UPS in terms of whether it can match capacity to demand in both in terms of volume and cost effectiveness. UPS needs get on top of the problem of a cost base that is increasing faster than the market. A company with the resources of UPS ought to be able to achieve this.

Source:  ti-insight.com

Topics of discussion included: terminal overload and new technologies to increase throughput; tightened trucking capacity; needs of shippers and adaptive change in the supply chain

IANA Intermodal Expo 2018: Key takeaways and discussion topics

Beautiful Long Beach, California was the setting for IANA’s (Intermodal Association of North America) annual expo, the IANA Intermodal Expo 2018. Over 2,000 representatives from the intermodal and transportation communities touched down to present, converse, debate and exchange ideas surrounding trends and issues shaping the future of the larger intermodal supply chain community.

We had the pleasure of exhibiting and attending with those 2,000 plus attendees, and this year’s expo was chalk full of over 60 industry experts and a staggering 125 plus exhibitors showcasing some of the most technologically advanced products and services the intermodal industry has seen.

Day 1:

The morning of Day 1 kicked off with Bill Strauss, senior economist and adviser with the Federal Reserve Bank of Chicago. Mr. Strauss managed to bring an initial, collective smile to the room, noting that the 2018 expo is meeting at a time of strong economic growth. Consumer spending and GDP are up, the economy has been growing at an average annual rate of 2.3 percent (since 2009), and if this continues through July of next year new records will likely be reached.

The intermodal industry numbers support Mr. Strauss, as intermodal volumes were up 7 percent (as of August 2018) compared to last year with the third-party logistics sector also expanding – global estimates peg the market to reach $968 billion this year, compared to $869 billion last year.

IANA is a “connecting force” for the intermodal freight sector, bringing together the most relevant (and up and coming) players via the creation of spaces, such as the Intermodal Expo, to stay informed, drive industry success and strengthen the broader community. IANA members count on a wealth of resources, but most important, access to relevant trends that are shaping the sector at breakneck speeds.

Day 2:

A handful of truly remarkable innovations were on-hand at this year’s expo. A recurring issue year in and year out is terminal overload. Moderated by Taso Zografos, Principal at ZDEVCO, the panel, “Intermodal Terminal Overload: How Can Technology Help?” brought together a handful of expert panelists on the issue where autonomous vehicles, automated stacking cranes and similar “smart equipment” was presented. Warehouses, marine terminals and rail ramps are fantastic for “smart equipment” due to little vehicle traffic and confined areas. The next challenge however will be rolling this out to harbor drayage and the open road. As Wade Long, regional vice president of Volvo Trucks astutely noted, heavy-duty diesel trucks, many operated by living, breathing drivers, will still be around for at least the next 50 years.

Another recurring theme throughout the two-day event was productivity, especially in a time of truck driver shortages. This has been a troubling point for some time, where a shortage of drivers produces bottlenecks throughout the supply chain thus hampering productivity at a macro level. Larry Gross, president of Gross Transportation Consulting, moderated an engaging panel surrounding this very issue. Driver productivity has been on the decline, and Phil Shook, director of intermodal for C.H. Robinson, communicated it best noting that the industry standard used to be 500 miles per driver, and that has now dipped into the 400s. The room agreed that getting an extra half-a-load per driver per day is the proverbial Holy Grail.

Next year’s expo will be held September 15-17, 2019 in that same jewel beside the bay – Long Beach, California. Pack your swim-trunks, this is an expo you don’t want to miss! Register to exhibit before space fills up or if you are just looking to attend, registration opens up in March of 2019.

 

 

New Logistics Study Highlights Decline of Outsourcing

Los Angeles, CA – The relocation of manufacturing and product sourcing to emerging economies is no longer the gold standard for global businesses, according to a new study released by the Global Supply Chain Institute at the University of Tennessee – Knoxville (UT).

The rush to Asia in the past decade promised major cost reduction, but financial gains for many corporations have been short-lived.

The study delves into the downsides of outsourcing by putting the complexity and risk of the global environment into context.

Evidence from the research, compiled in Global Supply Chains, the fourth installment in the Game-Changing Trends in Supply Chain series of reports from the UT supply chain faculty, suggests that a more localized supply chain for many products may soon be making a comeback.

“Countless factors can harm performance when supply chains are stretched across the globe,” said Ted Stank, UT Bruce Chair of Excellence and one of the co-authors of the study. “The most successful companies evaluate the local variables before jumping into a global supply chain and design a dynamic network less vulnerable to the pitfalls of modern globalization.”

The report uses a framework of key national characteristics that appeared in Global Supply Chains: Evaluating Regions on an EPIC Framework, a book Stank co-authored with three other faculty from UT and the ESSEC Business School in Paris.

Ten companies, with industries ranging from materials refining to health care, were interviewed for the study. Real-world examples of their experiences are presented to demonstrate best practices in global supply chain network development.

Visibility “is the most pivotal and elusive element of a successful global supply chain network,” said Keith Sherry, general manager of supply chain for BT Global Services. “Our clients need reliable communication and an understanding of big data to make their businesses work.”

This practice, the report says, “promotes visibility between different areas of a corporation’s business, helping them more thoroughly evaluate indicators of risk within their supply chains.”

Streamlined global supply chains are still efficient for companies with complex technology and low logistical costs.

However, supply chain network design must change and adapt as the world changes. The report highlights communication and visibility across the entire supply chain as a consistent element in successful businesses.

The research suggests that supply chains throughout the world will eventually break into a series of “pods,” where regional procurement and manufacturing will supply the demand centers of the area with a significant percentage of its production needs.

12/05/2014

Long Beach Tackles Chronic Port Congestion

Long Beach, CA – Responding to the chronic congestion snarling the movement of cargo containers through one of the country’s busiest ports, the Long Beach Board of Harbor Commissioners has approved the use of port property as a temporary site for the storage of empty containers.

The “Temporary Empty Container Depot” will be operated on 30 acres of a vacant, undeveloped area on Pier S on Terminal Island in a move to “help to free up needed equipment to move cargo out of shipping terminals faster” and “put back into circulation more chassis,” the wheeled trailer-frames that trucks use to haul containers.

Truckers using the new will be able to deliver empty containers and remove them from a chassis, and then use the chassis to pick up and haul loaded containers to nearby intermodal rail facilities or their regional destinations.

The depot will be operated by a private company, Pasha Stevedoring and Terminals, under a permit that will expire at the end of March 2015.

Designation of the new depot is reportedly one of several measures the port is pursuing to relieve the congestion issues that have come with a surge of cargo in the last two months caused by the busy peak shipping season, the advent of larger ships and a change in the ownership system for chassis fleets.

In addition to the depot, the port has reportedly crafting a plan to operate its own chassis fleet for peak cargo shipping seasons and facilitate the introduction by private chassis fleets of an additional 3,000 chassis into the local equipment pool.

“We hear our customers loud and clear,” said Doug Drummond, president of the Long Beach Board of Harbor Commissioners. “This congestion is not acceptable, and the Long Beach Board of Harbor Commissioners is ensuring that the Port of Long Beach is doing everything it can to see that we clear up these issues now and forever.”

11/17/2014