Digital Supply Chain 2020: Here’s What Industry Players Should Know

January 6th, 2020 GT Staff Leave a comment

The new year is here and with it comes a new set of opportunities, challenges, technologies, and trends to keep a close watch on, regardless of what industry your business caters to.

In 2019, global businesses saw an influx of unpredictable economic and political changes directly impacting the supply chain and customers. This year kicked off with IMO 2020, spurring panic for those that waited until the last minute to launch compliance efforts.

Beyond these concerns remains a variety of changes on the 2020 horizon that Pervinder Johar, CEO of Blume Global shares with us and how global and domestic businesses can prepare for success in the new year. Here’s a peek behind this year’s logistics curtain.

While shipment journeys are complex and fragmented, efforts to improve the flow of products will take precedence.

All the data in the world doesn’t matter if you can’t execute on it. We’ve been talking about the potential of the digital supply chain for more than two decades. In 2020, the balance finally shifts from future potential to current benefits. Connected devices and IoT-enabled solutions are giving us more data than ever to make better decisions — connecting the legs of the supply chain path while simplifying information exchange. To improve the flow of products and information from point A to point B, we will see more shippers adding sensors on almost everything, not just the most expensive equipment.

Maximized capacity and minimized empty miles.

We will see a more concerted effort to reduce waste in the supply chain. Eliminating the empty miles and excess CO2 emissions will become a bigger focus for smaller companies as larger organizations use it as criteria when selecting supply chain partners. Major manufacturers, shippers, and carriers have the clout to move the rest of the market. Smaller companies will invest in sustainable initiatives and the reduction of carbon emissions as a cost of working with major companies.

Better technology and planning will close the gap between planning and execution.

Traditional, long planning cycles don’t align to the expectations of today’s consumers. In addition to moving products, companies must deal with the added expectations from customers around product availability and expedited delivery — and in short, customers want what they want, and they want it now. While the Amazon effect has elevated customer experience across the board, it has also resulted in companies stockpiling trillions of dollars of inventory – a cost that very few aside from Amazon can justify. As a result, we can expect to see fewer companies stockpiling inventory and more focusing on improving inventory management and execution.

The American Transport Research Institute (ATRI) conducts an annual report on the operational costs of trucking. In its 2018 report, ATRI found that trucking companies traveled over 9.4 billion miles in 2017 and 20.7 percent of all those miles were empty. The industry can do better.

It has become essential for LSPs to be able to securely collaborate with their customers, carriers, and other service providers on a neutral digital platform. Accessible data and predictive analytics will remain key competitive differentiators. By establishing a centralized, digital repository that provides the same access to all reliable data across the supply chain, retailers can promise improved customer experience, competitive prices and a higher quality offering.

Low- or no-cost TMS-like solutions will become a priority for motor carriers.

Motor carriers are a critical link in the supply chain — yet they are the most dispersed and least connected of transportation modes. While they carry a huge volume of cargo — more than 70 percent of domestic tonnage— the vast majority are part of small organizations: 90 % of firms operate six trucks or fewer (source: American Trucking Association). Carriers, LSPs and shippers need to embrace solutions that provide low- or no-cost TMS-like solutions that empower even a single-truck firm with access to logistics and supply-chain networks.

Smart technologies will decrease the amount of time it takes for an invoice to be processed.

Currently, LSPs, freight forwarders and shippers need to wait weeks/months for invoices to be processed, which impacts their bottom line. But, with the increased investment in and use of smart technologies by companies along the supply chain, the amount of time it takes for an invoice to be received and paid will significantly decrease. This will also lead to better and stronger relationships between companies along the supply chain.

Artificial Intelligence will reach its potential by becoming domain specific.

The potential productivity gains from AI are anticipated to be anywhere from $13.7 trillion to $15.7 trillion by 2030, according to the McKinsey Global Institute and PricewaterhouseCoopers, respectively. The next phase of AI success happens when technical capabilities are matched with industry-specific expertise. We are at a significant inflection point in the adoption of AI-enabled solutions. Linking domain expertise and data with technical innovation is necessary for technology to reach its full potential to deliver measurable, effective results to the companies that implement them.

Tariffs and trade woes mean new supply chain opportunities in Southeast Asia.

Bigger, more sophisticated supply chains will seek out new primary sources. In part due to the tension over tariffs with China, companies are moving their supply chains out of the country and building up new footholds in Southeast Asia. Aside from tariff concerns, companies are looking at overall cost of business and the availability of resources to meet their needs.

Global Trade Daily, Special Reports

IT Job Satisfaction: Six Keys to Keeping Your Top IT Talent

January 3rd, 2020 Jessica Greene Leave a comment

Technology roles are among the most difficult to fill. Demand exceeds supply in the industry, so talented tech workers can afford to be choosy when looking for work.

For IT teams, this makes retention crucial. When you struggle to replace employees who voluntarily leave the company, there are negative impacts to productivity, customer service, information security, and profitability. Employee loyalty is essential to your success.

So what inspires loyalty? Job satisfaction. Satisfied employees are less likely to look for new work and less likely to consider other opportunities. The latter is especially important in IT because the average IT pro receives 32 job solicitations each week.

To improve retention and loyalty and avoid the struggles that come with recruiting new employees, focus on boosting job satisfaction. We reviewed more than a dozen surveys and research studies to uncover the most important factors that contribute to IT job satisfaction. Here’s what we found.

Strong coworker relationships increase job satisfaction

In a survey conducted by Spiceworks last year, IT professionals ranked how 10 different factors contributed to their happiness at work. The results: strong coworker relationships have the biggest positive impact on employee satisfaction. Survey respondents rated coworker relationships as even more important than pay, stress levels, and work hours.

Unfortunately, improving coworker relationships is much more complicated than improving pay, work hours, or vacation time. Employees evaluate their coworkers independently, forming relationships based on compatibility of personality, shared goals and interests, and many other highly individualized reasons.

You can’t simply decide for everyone to become friends, but you can create an environment that encourages employees to form friendships. A few ways to do that is to:

Hire people you can see yourself being friends with. By hiring people compatible with your own personality, you build a team of people who are more likely to share interests and values.

Change your seating arrangement. Even if employees don’t have enough in common with their coworkers to form friendships, changing desks occasionally gives them an opportunity to meet people from other departments that might be worth befriending.

Provide opportunities for interaction outside of the office. It’s hard to get to know your coworkers on a personal level when all of your interactions center around work.

Boredom increases dissatisfaction

A survey conducted by TEKsystems found that only 48 percent of entry- to mid-level IT professionals feel as though they’re doing the most satisfying work of their careers. And while the numbers are trending upwards—from only 39 percent in 2014—more than half are not as satisfied as they could be with the work they’re doing in their current positions.

To prevent job dissatisfaction resulting from boredom, provide employees with plenty of opportunities to do interesting, meaningful, or challenging work:

Change things up. If employees aren’t challenged in their current roles, consider moving them onto a team where they can do something different or learn a new technology.

Encourage them to pursue other interests. Provide professional development funds that employees can use to learn something new, give them time to focus on pet projects that are outside of the scope of their day-to-day responsibilities, or make your employment contracts more flexible so they can work on a side gig in their own time.

Give them more responsibilities. When employees outgrow their current roles and find themselves bored and unchallenged, their natural inclination is to look for a new position.

Funding and awareness play a part in IT job satisfaction

A survey by Campus Technology looked at job satisfaction for IT professionals in higher education institutions and found that inadequate funding for projects and new technology and administrators not understanding what they do both created job dissatisfaction.

Lack of funding is often the direct result of poor communication between IT and the individuals who make funding decisions. If leaders don’t understand how investing in technology will benefit the entire organization, they’ll never sign off on the investment.

For many organizations, IT operates in a silo—and often with an us-versus-them mentality. This is usually the result of non-technical sponsors and leaders making unreasonable demands and failing to see issues from the perspective of those who understand the technology.

But eliminating employee dissatisfaction caused by these issues requires breaking down those silos and working as a team. Consider hiring someone to operate as a liaison between IT and non-technical departments and leadership. Choose someone who’s spent time on both sides of the fence who has the ability to present IT concerns in terms of overall business benefits.

Improving communication between technical and nontechnical divisions reduces the risk of IT employees becoming dissatisfied because they feel misunderstood and underappreciated. Additionally, it increases the chance that your department receives the funding needed to stay on top of technological advances and trends.

Salary matters, but not as much as you think

A survey conducted by TechTarget found that salary also impacts job satisfaction. However, the impact of salary on job satisfaction is much smaller than that of other, more important factors like work that’s intellectually challenging and a supportive work environment.

And while company culture and interesting projects may be more important than salary, you shouldn’t neglect the role that salary plays in keeping employees happy. Few people will stay in a job—even one that they love—if they don’t make enough to pay their bills.

If you’re concerned that employee salaries are contributing to dissatisfaction, follow the lead of other companies in the industry and take an innovative approach to setting salaries:

Pay Silicon Valley rates, even if you’re not in Silicon Valley. Basecamp’s headquarters is in Chicago, but the company employs people who live all over the world. While the company could get away with setting salaries based on cost of living where employees work—or cost of living in Chicago—all employees earn Silicon Valley rates.

Pay people to move somewhere with a lower cost of living. If you can’t afford Silicon Valley rates, consider an incentive for employees to move somewhere less expensive. Zapier offers its employees a $10,000 relocation package to move out of Silicon Valley and into an area with a lower cost of living.

Work with HR to personalize employee benefits. Even if you can’t increase salaries, there are opportunities to put more money in employees’ pockets with personalized benefits. For example, Student Loan Hero offers its employees student loan debt repayment matching. BambooHR employees get an annual $2,000 vacation stipend.

Job training is important for both employees and employers

A survey by The Conference Board found that one of the areas employees are least satisfied with at work is educational and job training programs. Data from a survey from CompTIA shows that this concern is particularly important for IT professionals because one of their top concerns is that their skills quickly become obsolete.

Wish list items for IT professionals further highlight the impact that training, education, and advancement have on job satisfaction.

More than half of IT professionals choose their careers because of their “passion/interest in technology.” That interest doesn’t subside when employees master a particular technology. IT pros are hungry to continue learning, experimenting, and innovating. When their job enables them to do so, they’re much more satisfied.

At the same time, employers expect that one of the most difficult hiring challenges they’ll face this year will be “finding workers with expertise in emerging tech fields.”

Professional development opportunities, on-the-job training, and education stipends increase employee satisfaction. Plus, they limit the need for employers to seek new hires who have experience with emerging technologies; you’re able to fill new roles with existing employees.

There are a number of ways to provide IT employees with development opportunities:

-Provide funds for employees to attend industry conferences, earn certifications, take courses, or pursue additional degrees.

-Distribute a list of local mentorship opportunities, trade organizations, and community IT groups, and subsidize any membership fees.

-Hire industry leaders/experts to host an on-site seminar or training for your group once a quarter, or host monthly lunch-and-learn events.

When work is meaningful, other factors are less impactful

In both 2017 and 2018, Elon Musk’s SpaceX landed a spot on Glassdoor’s “employees’ choice” list of best places to work. The company has an overall 4.4-star rating, 96 percent of employees approve of Musk as CEO, and 90 percent of employees would recommend working for SpaceX to friends. By all accounts, SpaceX employees are satisfied with their jobs.

But a recent study from PayScale shows that SpaceX employees earn less than employees of other top tech companies and experience the highest amounts of stress.

So why are employees who are underpaid and overstressed so satisfied with their jobs? SpaceX employees feel that their work is meaningful. SpaceX earned the highest rating of all of the companies PayScale compared in the “high job meaning” category.

Of course, when your job is to build the technology needed to colonize other planets, it’s not hard to find meaning in it. But not all companies have such inspiring goals. Even so, that doesn’t mean it’s impossible to make the work your employees do meaningful.

According to Michael G. Pratt, professor of management and organization at Boston College, “Meaningfulness is about the why, not just about what.” Help employees understand the “why” behind their day-to-day responsibilities to help them find meaning in their work:

-Connect IT’s tasks to overall company goals.

-Share stories of how IT projects helped end users.

-Publicize the company’s mission, values, and contributions.

The most important factors for IT job satisfaction

Like any employee of any industry, IT professionals want to earn a reasonable living, avoid unhealthy amounts of stress, and access important benefits. But those things are just the starting point for IT job satisfaction. True satisfaction stems from filling more complex needs.

People seek careers in IT because they’re good at what they do and interested in using their skills to build innovative products and solve complex problems. They seek challenges, are motivated by learning, and thrive when collaborating with like-minded people. They don’t mind dealing with stress if they’re contributing to something meaningful.

The companies that win the talent war will be those that work to improve the more fundamental aspects of IT job satisfaction. They’ll attract and retain top talent by building a department where employees find true fulfillment with their teams, work, and future prospects with the company.

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Jessica Greene is a staff writer at Spoke.

Global Trade Daily, Stories, Trade Cycle

The Countries Leading the Way in the Future of Production

December 31st, 2019 RS Components Leave a comment

The First Industrial Revolution dates back to the 18th century, with the manufacturing and production process evolving significantly to improve efficiency. Since then, the world has gone through a series of changes with the present-day seeing us in full swing of the world’s Fourth Industrial Revolution.

Using data from the World Economic Forum’s ‘Readiness for the Future of Production’ report, RS Components have taken a look at the countries that are leading the way when it comes to driving production forward. The six main drivers are ‘Technology & Innovation’, ‘Human Capital’, ‘Global Trade & Investment’, ‘Institutional Framework’, ‘Sustainable Resources’, and ‘Demand Environment’. See how each country compares when it comes to being ready to produce more products, technologies, and goods here.

The 21st century is a truly digital age, with technology now intertwined and cemented into both our personal and professional lives. Over the last two decades, in particular, technology has become increasingly advanced and has seen the emergence of the Fourth Industrial Revolution. Complicated and impressive technologies such as artificial intelligence (AI), robotics, the Internet of Things (IoT), 3D printing, genetic engineering, and quantum computing have all emerged and are being used across the globe in a variety of industries, businesses and processes.

As a result of the new technological age, the speed, efficiency, and accuracy of production levels have improved astronomically, with less room for human error as machinery takes over, making production levels much faster and hassle-free.

With the rise of these advancements, it is important for countries and businesses across all industries to be tapping into these changes to keep up with the future of production. But which countries are leading the way?

RS Components have produced a graphic analyzing data from the World Economic Forum’s Readiness for the Future of Production report, to reveal the countries leading the way when it comes to driving production forward. With each country analyzed by a series of metrics including global trade and investment, institutional framework, sustainable resources, demand environment, and emerging technologies, the top 10 countries leading production levels forward have been scored out of 10.

The top 10 countries driving the future of production include:

The US takes the crown as the leading country in the world driving the future of production forward. Scoring at the top of the leaderboard across all metrics excluding Sustainable Resources and Institutional Framework, the US holds an overall score of 8.16 out of 10. The US is renowned for its innovation and holds an advanced, connected and secure technological platform that allows production to drive forward in the most efficient way possible.

Singapore ranks as the second country driving the future of production and the UK sits at fourth place with a score of 7.84. Singapore sits as one of the world’s leading chemical manufacturing sites, with over 100 global petroleum, petrochemical and specialty chemical companies situated on 12 square miles of land. Singapore today sits as the world’s fifth-largest refinery export hub and amongst the top 10 global chemical hubs by export volume. Involved in these systems includes advancements in manufacturing from robots, to predictive analytics and artificial intelligence. Singapore, like the US, is a key driver in testing, experimenting and trialing the latest technologies. In addition, manufacturing continues to contribute around 20% to Singapore’s GDP.

The importance of having the right technological foundations

In order for production levels to thrive, it is crucial that technological foundations are cemented in supply chains across the globe. For example, in a warehouse, the speed and availability of the internet is crucial when the Internet of Things is being adopted on the factory floor. In addition, it is also greatly important for businesses and industries to have strong, connected cybersecurity systems to ensure digital security is maintained to a high standard. Having the technological foundations of this, like the US, allows the nation to drive forward technologies to increase production levels.

In addition, in order to ensure these new innovations are implemented effectively, it is crucial that employees have a good understanding of the technology they are interacting with on a daily basis, as the skills required of workers will evolve with the new advancements.

Combined, industries and countries will be able to adapt rapidly emerging technologies into their production lives, which will have a global impact on both businesses and consumers across the world.

Global Shippers 101, Global Trade Daily

Airfreight vs. Sea Freight – Which Works Better?

December 20th, 2019 Susan Daniels Leave a comment

Airfreight vs. sea freight has become a burning dilemma for all those in need of this type of services. While both solutions come with a set of advantages and disadvantages, the final choice one makes will depend on a variety of factors. We are willing to share our knowledge and findings with you so that you can make the best possible decision regarding your shipment in the given circumstances.

Airfreight vs sea freight – the costs can be a decisive factor

Undeniably, the amount of financial means necessary to afford airfreight services is considerably higher than that of sea freight. Moreover, the appearance of the largest cargo aircraft in the world announces great changes and improvements in this field. The Antonov An-225 could cause a further rise of the airfreight costs, but it will also guarantee higher quality. On the other hand, sea freight is much more affordable and, consequently, the number one choice of a vast majority of clients. Opting for sea freight provides clients with acceptable service but at a significantly lower price.

Time matters greatly!

Most often, clients want their shipment delivered as soon as possible, which can cause problems for those offering sea freight services. Not seldom do customs issues or hold-ups at ports cause serious delays. However, we must admit that a giant step forward is evident in this field. Firstly, high-quality, modern ships are much faster now than it was the case in the past. Secondly, there are some canal upgrades that can eliminate tedious and tiring delays on some routes. Finally, sea freight forwarders can guarantee delivery times, which is vital for business owners when it comes to organization.

The type of cargo affects the final choice on airfreight vs. sea freight dilemma

The type of cargo is one of the most important factors influencing the choice in the airfreight vs. sea fright dilemma. In this case, we must admit that sea fright seems like a much better solution since it has no limitations you have to be aware of. One of the crucial pros of the maritime shipping is that you can ship even the bulkiest and extremely heavy goods. Conversely, airfreight is limited in this discipline. Before you opt for this type of goods transportation, it is advisable to make sure that the type of your cargo is acceptable. In addition, there is a very long list of the items which are prohibited and those listed as hazardous materials. Depending on your final destination, the rules and laws may differ. Yet, getting sufficient information on the subject must still be the first step in the process.

Safety of your cargo is the top priority

Understandably, the safety of cargo is always the top priority. It is important to emphasize that air cargo has to be dealt with the utmost attention and in accordance with the regulations which are very strict and clear. All the crucial elements, including handling and securing your cargo as well as the proper storage, are defined by airport regulations. This is a great benefit and a guarantee that the safety of your goods will be at the maximal level. On the other hand, we cannot say that sea freight is a bad alternative either. In this case, the goods are transported in containers, but the human factor is crucial. Proper packing strategies are essential in order to decrease any chances of potential damage during transport. If this is not conducted appropriately, the chances are some of your goods might get seriously damaged or even cause further problems on the ship.

Do not forget about the accessibility of your goods

If we analyze the accessibility of your goods as one of the criteria, airfreight is a more favorable option by all means. The procedures are clear, cargo is in smaller volumes and there are no unnecessary waitings to receive your goods. Using sea freight for your cargo often results in additional costs due to heavy congestions in seaports. If your goods are not delivered at the arranged time, you are required to pay for detention and demurrage costs, which may be a heavy burden on your budget. However, we must not forget to mention an advantage sea freight offers comparing to airfreight. The accessibility to markets is much higher in case of sea freight. The reason is very simple. When unloaded from ships, containers can move further inland by using the services of intermodal shippers.

Eco-friendly practices

Finally, let us not forget about the environment when choosing between airfreight vs sea freight. Applying eco-friendly practices is becoming increasingly important, so it does not surprise this is one of the factors shippers base their decision on. According to this particular criterion, sea freight is a more reasonable option since it has a significantly better carbon footprint. Quite the opposite, airplanes are serious polluters and require special attention and measures to reduce their carbon footprint to minimal values.

Final words on airfreight vs sea freight dilemma

The decisions and choices you make concerning airfreight vs sea freight dilemma will depend on miscellaneous factors. It is of key importance to weigh the pros and cons of each of these options and then make your decision final. A serious effort is required to negotiate the best shipping terms and only then can you expect to ship your goods completely fuss-free.

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Susan Daniels is a passionate copywriter who loves exploring home improvement ideas and real estate market. Lately, she has gained considerable knowledge in the types of moving services and the qualities of respectable moving companies such as DA Moving NYC, for example. She enjoys giving advice on the best places to live and exciting places to visit. Traveling makes her happy as well as reading good books.

Global Trade Daily, Special Reports

European Greenhouse: What Climate Change and Green Politics Mean for Business in Europe

December 6th, 2019 Kirk Samson Leave a comment

France, Germany and the Netherlands broke 40-year temperature records this year. Traditional wine areas, such as Bordeaux, have had to accept new grape types into the area for the first time in 80 years to combat the devastating impact of new weather patterns. In Germany and other central European countries, large swaths of forest died off this summer due to climate conditions.

This summer of extreme weather follows on the heels of a dramatic gain in Green party popularity during and after the spring European parliament elections. What does this mean for companies that do business in the European Union? How will markets and regulations change in the near future as a result of rising concern over climate change across the Atlantic?

European voters (and consumers) and highly concerned about climate change, with many of them naming climate change as the greatest threat to world security. Equally important, there are substantially fewer people in European Union member states who doubt the impact that climate change is having on the world compared to countries such as the United States.

In a recent poll, thirteen percent of U.S. respondents expressed doubt over the existence of climate change or that it was due to human influence. This American response was the highest level of skepticism in the developed world; double that of Germany or France, and much higher than other countries such as Spain, where polls have shown as little as 2% of the population voicing any doubt as to the reality and danger of climate change.

Why Europe having fewer skeptics matters

Extreme weather in the summer is not a new issue in Europe. The heat wave of 2003 was estimated to have killed as many as 30,000 people in Europe due to the lack of air conditioning and infrastructure to care for those vulnerable to heat strokes, such as the elderly. The heat wave that broke records across the EU this summer was even hotter. These weather changes, hand-in-hand with the sudden surge in Green party success in EU and national elections, underscore that there is both pressing concern over climate change and a willingness to prioritize it among voters.

Without climate deniers across the political aisle to delay or weaken environmentally-oriented legislation, it is likely that the business environment will soon be dramatically changed as the EU and member state governments adjust policies and regulations to combat climate change and protect their populations from future extreme weather.

Why the ‘American solution’ won’t work and building styles won’t change

The U.S. has extreme heat on a constant basis in places like Arizona and Texas, but the classical solution – to air condition every building – will not work in Europe because energy costs are twice the U.S. average and likely to rise quickly as governments are forced to switch to more expensive (in the short-term) renewable sources. The EU’s renewable energy directive was modified in 2018 to establish a 32% renewable energy target for 2030, which will likely keep energy prices high as more investments are needed to help develop renewable sources such as solar, wave and wind energy ‘farms’.

Logical efforts to change building materials and styles to improve the ambient temperatures for residents are near impossible to implement in established cities in Europe. Traditional building styles that are intended to save on heating costs by trapping air inside often exacerbate heat waves since these buildings cannot effectively cool. New materials and building styles in the suburbs offer energy-efficient solutions to newer areas, but traditional architectural areas in downtown Prague, Rome and Paris are poorly positioned to embrace these options. It is inevitable that air conditioning use will increase (currently only 5% of European buildings are equipped with air conditioning, compared to 90% in the U.S.) but based on electricity costs and emission reduction goals in the EU, it is only a partial answer to the extreme weather problem. Europe must find its own solution, and this search for alternatives will open up new opportunities for innovative companies.

What business opportunities appear as Europe combats climate change?

How will consumer habits change in the face of public concern over emissions and fears over ever-worsening extreme weather? What new business opportunities can we expect to see in Europe as Green-leaning governments and climate-conscious voters bring wholesale changes to the regulatory structure of the European Union in an attempt to combat climate change? Three areas of interest jump out: new government and venture capital funding for innovation, sharply increased transportation costs which will change logistics patterns and purchasing habits, and dramatic shifts to the land use and building traditions which should open up opportunities to U.S. companies.

Innovation will be valued and funded as never before

According to the Global Innovation Index for this year, seven of the top ten most innovative nations are located in Europe, and yet the U.S. (number three on the Index) outspent Europe on research and development by 20%. That is not to say that Europe is not investing in climate change innovation. On the contrary, in 2018, the European Investment Bank committed over 16 billion Euros to combating climate change, a number which has increased each year for a decade. Over $23 billion (US) was invested in innovative new European companies through venture capitalism last year alone. These numbers will shoot up in the years to come as governments scramble to support new solutions to extreme weather challenges and climate change.

The EU has already announced plans to focus on battery innovation and production, and will legislate an increasing use of renewables; supporting wind, wave and solar power projects to reduce oil, gas and coal use. Cleantech and Greentech projects are surging in clusters such as Cambridge, Copenhagen and Rotterdam. But there is a need for even more venture capital, and a growing recognition that governments will have to step in and add to research and start-up funding, as well as help scale up successful companies to compete regionally and globally.

A dramatic increase in transportation costs will shift production and consumer habits

Much like in the U.S., many European companies have a tendency to source materials and production overseas to lower costs. Unlike the U.S., they have generally been able to avoid the impact of the U.S.-China trade war. However, this breather is short-lived, as the EU seems to recognize the cost of transportation to society in the way of pollution and congestion and is likely going to be forced to ramp up emissions taxes in the near future, which will impact both the external and internal movement of goods. This, in turn, will force companies to recalibrate their logistics and likely move production closer to the point of sale.

Companies will find that supporting local production becomes more reasonable as transportation costs go up, and EU member states with lower labor costs (under 10 euros an hour) such as Latvia, Lithuania, Romania, and Bulgaria should begin to see production facilities become more competitive compared to Asia as shipping costs increase in the face of emission taxes. Companies that were previously exporting goods into Europe will find that shifting production to Europe in support of EU clients is going to become substantially more cost-friendly (with the added advantage of avoiding import tariffs, should the global trade war broaden).

Land use and building codes are going to shift dramatically

A recent international climate change report supported what European farmers already have experienced: drought and extreme heat are forcing a rethink as to what is produced in Europe and how. Climate change activists and consumer groups are also dragging EU trade agreements into the spotlight as countries like Brazil are accused of dramatically harming the global environment through wasteful agricultural practices – in part to increase beef sales to Europe. Increasing focus on how land is used and food produced in Europe will open up opportunities for innovative producers and new products (such as meat alternatives) in the European market. At the same time, European builders of new developments are being forced by regulations and consumer sentiment to use more environmentally-friendly materials and styles.

The U.S. Green Building Council’s LEED certification has become a benchmark in Europe as well, and U.S. companies with know-how in this area of construction and building design can find robust new markets and development and construction partners throughout the EU who will be challenged by new regulations and public scrutiny to ‘green’ up their building projects.

Environmental challenges mean new opportunities for savvy companies

Changes in consumer demands and regulations imposed from the EU to the local level will open doors for companies that can bring in new, efficient and effective products. Governments attempting to be responsive to extreme weather challenges without taxing their voting population too directly (which is what sparked the ‘Yellow Vest’ protests in France) will demand more energy-efficient products and processes from businesses. Innovative companies, ready to expand and take on new challenges, will find it relatively quick and painless to register in the European market to take advantage of the possibilities that are manifesting due to environmental and consumer changes.

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Kirk Samson is the owner of Samson Atlantic LLC, a Chicago-based international business consulting company which offers market research, political risk assessment, and international negotiations assistance. Mr. Samson is a former U.S. diplomat and international law advisor who lived and worked in ten different countries.

Global Trade Daily, News

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

December 4th, 2019 Trade IX Leave a comment

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.

Global Site Selection, Global Trade Daily

Success in China: Market Opportunities & How to Get Started

December 3rd, 2019 George Foster Leave a comment

Are you an ambitious entrepreneur from the west seeking to expand to China? Or are you interested in opening a new business in China? If yes, this article is for you. We will explain the 5 most viable business openings in China today and the 5 most reliable tips on how to get started in this highly-competitive market. Please be our guest.

Which Viable Market Opportunities Can You Pursue in China?

As the affluent middle class continues to expand in China, solid economic transformations in the country are being realized day by day. The biggest beneficiaries of these transformations are multinational companies who have set up or are planning to open a shop in China. There are now bigger and better market opportunities to pursue, more advanced industries to invest in, and more tech-intensive manufacturing opportunities to consider. As a matter of fact, China now boasts of a 50% bigger manufacturing economy as compared to the USA.

If you are looking to tap into the continued increase in high value-added production, increased globalization of the service sector, as well as the increased outbound investment in China, these 5 market opportunities would be lucrative enough for you:

Healthcare

Rising wealth often comes with an increase in lifestyle diseases. An increase in manufacturing, on the other hand, brings forth many environmental concerns. These two factors have made the healthcare industry very lucrative in China. You will create a reliable cash cow if you could invest in a business that deals with herbal supplements or small health products- or a mainstream pharmaceutical company, so to speak. Also, the use of skincare products is on the rise in China. It’s best to set up a wholly foreign-owned enterprise for such operations.

Import and export trade

China is currently the largest exporter of tech goods and importer of processed foods globally. That means you can build a profitable importing and exporting business here in a heartbeat.

Supplementary education

Many middle-class Chinese are keen on improving their English and expanding their knowledge of different aspects of business and politics. If you can offer them after-school private tutoring services, you will be making impressive annual returns on a consistent basis. Moreover, online tutorage is on the rise in China, which enables you to tutor more people in a more cost-effective way.

Food production

This goes without saying: Everyone needs food, everyone loves good food. And now that the middle-class in China is welcoming new entrants in huge numbers, there is a significant supply gap within this class for as long as the food is concerned. A rise in class obviously comes with a change in lifestyle, and food is at the center of every lifestyle.

Mobile phones and accessories

The whole world has in the recent past turned to China for all its tech needs. The nation is the largest producer and importer of affordable mobile phones and accessories, meaning that a business in this industry would be extremely profitable.

What kind of structure to choose when expanding to China

IF you are considering expanding your business to China, establishing the right business structure is crucial. There are several types of business structures:

-Representative Office – allows foreign companies to open their offices in China and hire staff under their own legal entity. However, the offices are not allowed to perform any business, rather it is done by the parent company which is abroad.

-Sales Office- this business structure enables foreign businesses to rent an office with a Chinese address for conducting business, without the necessity to establish a separate legal entity. All the activities and costs incurred in this office, are paid by the parent company.

-Foreign Invested Partnership- For this business entity, there is no need for minimum capital requirements. Depending on agreements, two or more investors can be joined and form this type of structure.

-Wholly Foreign-Owned Enterprise- Through a wholly foreign-owned enterprise, two or more foreign partners can come together and establish the company which has the same liability as domestic companies. Moreover, it provides the owner with autonomous control and ownership.

How to Get Started In China

As lucrative as China could be, many investors from the west talk about it with fear. Some of these foreign entrants tried and failed, or struggled to find their footing in this Asian economic giant. But what would render you unable to compete and survive here? For starters, the business environment here is too unforgiving and the competition too stiff for the faint-hearted. Also, cases of language barriers, cultural differences, and bureaucratic government regulations have led to the peril of many.

In the middle of all these, how do you defy the odds and succeed in China? Here are 5 actionable tips on how to get started in China:

Don’t just translate your content for China; ensure that everything about your business is localized for China.

It is important to understand and comply with all business regulations in China. The hiring process can be tricky to a new entrant, which necessitates the services of a Chinese recruitment agency. Such an agency will help you with all employment laws, privileges, and remuneration.

Ensure that you understand and respect the cultural differences that exist between the west and the east.

Never underestimate the power of customer opinion in China. Let the customer tell what their experience with your product is, respect their opinion, learn from your mistakes, and ensure that you find lasting solutions to all their concerns.

As much as possible, try to work with a local partner in order to benefit from the many favors local entrepreneurs get from the government.

Commentary, Global Trade Daily

5 Tech Trends That Businesses Can’t Afford To Ignore

November 28th, 2019 Chris Hoose Leave a comment

With technology evolving at such a rapid pace, some business owners are left digitally disoriented as they try to figure out which of the latest innovations they need to invest in and what they can ignore.

It can make for confusing times.

All that bewilderment aside, though, these fast-developing advances also create opportunities that can help small and medium-sized businesses become more competitive – if they understand how to seize them.

“Technology exists today that at one time was available only to large corporations with huge technology budgets,” says Chris Hoose (www.choosenetworks.com), an IT consultant who works with small businesses.

“Every year, technology becomes even more accessible to companies of all sizes.”

Hoose says businesses that want to stay on top of their games should make sure they invest in these technological trends, if they haven’t already:

The Internet of Things. Many Internet of Things-connected devices, such as smart refrigerators and thermostats, are designed for home use, but there are also applications for small businesses, Hoose says. Some examples: smart locks use digital keys that can’t be lost or stolen, and log a record of who uses a door and when; RFID tags on merchandise can prevent theft and automatically update inventory; and mobile-card readers can replace cash registers.

Artificial intelligence. Don’t be fooled into thinking that AI is something only the big organizations can afford to use, Hoose says. “It’s making inroads into technologies accessible for businesses of all sizes,” he says. “AI can help you offer increasingly personalized experiences to customers by maximizing your time and automating manual tasks, like data entry.” AI also can be used to improve decision making, Hoose says. Essentially, AI will help you take that jumble of data most businesses have and analyze it in a way that allows you to make better-informed judgments on the actions you need to take.

Telecommuting. The office world is changing and more workers spend at least a portion of their work week telecommuting. “In many cases remote employees use their own equipment, which can eliminate some of the company’s costs with purchasing and maintaining computers, printers and mobile phones,” Hoose says. Video conferencing, instant messaging and other advances are helping to make telecommuting a viable option, he says.

Customer-relationship-management (CRM) software. Any application that a business uses to interact with customers, analyze data, or recommend products and services to customers is “part of the CRM family,” Hoose says. “This type of software helps your team manage, control and build customer relationships,” he says. “It can log your team’s touchpoints with prospects, including emails, phone calls, voicemails and in-person meetings. You can have a complete record of your team’s interaction with a prospect that’s easy for anyone to access.”

Voice search. Consumers increasingly are making use of such AI assistants as Siri or Alexa to help them do internet searches using their voices. “Voice search is changing the way people find information because these queries are structured differently than when we type terms into a search engine,” Hoose says.

“Organizations of all types can benefit from optimizing their content to improve where they fall in a voice search.”

“To help propel your business going forward, it’s important to stay abreast of technology innovation,” Hoose says. “These technologies will help you expand your customer base, create more efficient in-house processes, and increase engagement from both customers and staff.”

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Chris Hoose (www.choosenetworks.com) is the president of Choose Networks, an IT consulting firm for small businesses. Hoose started the company in 2001 to give large-scale solutions and support to businesses that can’t afford their own in-house IT department. He earned a Master of Information Systems Management from Friends University.

Global Trade Daily, Software

FinTech: 5 Automation Trends That Are Impacting the Industry Right Now

November 28th, 2019 Christopher Grey Leave a comment

The FinTech industry is rapidly moving toward automation as a source of efficiency. The move to specific tools and software programs increases speed and accuracy of processes. It also keeps employers on their toes as they need to quickly evolve and learn. Many of these programs previously required specialized training and adaptability.
Automation helps with repetitive procedures and simplifies complicated tasks. It increases accuracy and safety measures, while minimizing human error. Expectations indicate that the FinTech industry will extend its tech integration significantly over the next four years.

Here are 5 automation trends that are impacting the Fintech industry right now:

1. Human Resources Management: This used to be one of the least automated components, but now software like Workday and 15Five are building platforms to assist workflow with related systems that support employee management. Finance companies increasingly recognize that their people are the most valuable resource and need to be managed more thoughtfully as well as efficiently.

2. Mobile: Finance companies now consider mobile oriented tech as part of the core work-flow. The industry relies heavily on its ability to get work done efficiently. FinTech continues to utilize software which speeds up communication and productivity. Mobile used to be considered a security risk by the financial industry. Now it is considered a way to enhance productivity as well as provide more flexible workflow for employees.

3. Customer Support: More automation is taking over customer service. This support has advanced tremendously with certain software programs that include internal systems to support customers. Software systems such as Fresh Desk and Zen Desk are cutting down on the head count needed for customer service departments in some companies. But more importantly these new systems are improving the customer experience and the lives of the people working in those departments.

4. Billing/Invoicing: Payments systems like Stripe, invoicing and billing systems like Freshbooks, and more advanced ERP systems Netsuite are examples of programs that continue to reinvent the way FinTech is automating business functions. Although many companies are still at least partially stuck in the past of creating manual invoices and payments, these automated systems are increasingly taking over. Both the customer and the vendor win with greater automation in this area. Vendors cut costs and get paid faster. Customers benefit from this greater efficiency of vendors with lower prices or higher value delivered for their purchases.

5. Accounting: Xendoo, Zoho, Quicken online and other systems automate are automating the accounting, bookkeeping, and tax filing functions of businesses. Traditional accounting software, and human bookkeepers and accountants, still have an important role to play in this area, but the accounting business is rapidly changing as well due to technology. The number of people involved with these activities is likely to shrink dramatically as automation takes over more of these functions. Ultimately businesses and their customers will benefit from this via lower operating costs that allow for better value to be delivered rather than spent on administrative functions like accounting.

It is crucial for companies of all sizes to be knowledgeable about this trend and keep their business updated as automation continues to reinvent Fintech industry jobs. You have to be able to adapt quickly to these changes. Our previous ideas and habits of doing business are changing, and we have to keep up with those changes or be left behind by competitors who will adapt more quickly

Automation is impacting Fintech employees in a variety of complex ways so it’s critical for employees to have a greater understanding of and training on different software systems to ensure they keep up with the automation and benefit from it rather than viewing it as a potential threat to their jobs. There is no way to stop technology. All of us need to work hard to stay on the right side of its inevitable progress.

Global Trade Daily, News

Marco Polo Network Welcomes BNY Mellon

November 26th, 2019 Tradeix Leave a comment

The Marco Polo Network, a trade and working capital finance network powered by blockchain technology, welcomed The Bank of New York Mellon (“BNY Mellon”) onboard to conduct an evaluation program. BNY Mellon’s collaboration is aimed at developing a more open and connected trade finance environment that powers global trade and economic growth.

Marco Polo is a consortium working to make international trade more efficient. The network includes financial institutions, their corporate clients, service providers and the blockchain technology firms TradeIX and R3, leveraging R3’s Corda blockchain.

By engaging with Marco Polo, BNY Mellon is positioning itself to explore trade financing powered by blockchain, in an industry where many participants still rely on costly and inefficient paper-based systems to conduct trade.

“We recognize tremendous potential to harness digital, data and advanced technology capabilities to transform essential trade finance processes to make them more efficient and secure. Collaborating with Marco Polo members is one more measure of our commitment to provide innovative opportunities to improve the client experience throughout the transaction lifecycle,” said Joon Kim, Global Head of Trade Finance at BNY Mellon. “To achieve our goals, we seek to work with forward-looking organizations, like the Marco Polo Network, that are harnessing digital to truly transform industries,” he added.

The move reflects BNY Mellon’s focus on fully digitizing the business to deliver new capabilities faster, unlock the power of data and put clients at the center of their ecosystem. BNY Mellon remains dedicated to broadening the scope of its digital ecosystem both by actively advancing its own products and services as well as seeking opportunities to collaborate with best-in-class external companies.

Already strong in Europe, Asia and the Middle East, the Marco Polo Network now bolsters its U.S. presence with the addition of BNY Mellon. “We are accelerating the network’s growth and reach while our members are preparing and running programs with their corporate clients,” said Daniel Cotti, Managing Director, Centre of Excellence, Banking & Trade at TradeIX.

BNY Mellon joins Bank of America, BNP Paribas, Commerzbank, ING, LBBW, Anglo-Gulf Trade Bank, Standard Chartered Bank, Credit Agricole, Natixis, Bangkok Bank, SMBC, Danske Bank, NatWest, DNB, OP Financial Group, Alfa Bank, Bayern LB, Helaba, S-Servicepartner, Raiffeisen Bank International, Standard Bank, Intesa Sanpaolo, MUFG, National Bank of Fujairah PJSC, National Australia Bank, and Bradesco as a member of the largest network of financial institutions leveraging blockchain for trade finance.

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About BNY Mellon

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries. As of Sept. 30, 2019, BNY Mellon had $35.8 trillion in assets under custody and/or administration, and $1.9 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.

About TradeIX

TradeIX, is an award-winning technology platform provider driving innovation and driving change in facilitating the flow of goods, money, and credit in the $8 trillion trade finance market. Its TradeIX Platform is delivered to banks and their corporate clients via ERP-embedded applications. The TradeIX Platform is integrated with the Marco Polo Network, the world’s fastest growing trade finance network.

Some of the smartest financial institutions and companies in the world work with TradeIX, including ING, BNP Paribas, DHL, AIG, Oracle, and many other Fortune 500 companies from various industries. TradeIX is headquartered in Dublin with offices in London, Kettering and Singapore. For more information visit: www.tradeix.com

About R3

R3 is an enterprise blockchain software firm working with a broad ecosystem of more than 300 members and partners across multiple industries from both the private and public sectors to develop on Corda, its open-source blockchain platform, and Corda Enterprise, a commercial version of Corda for enterprise usage.

R3’s global team of over 180 professionals in 13 countries is supported by over 2,000 technology, financial, and legal experts drawn from its global member base.

Learn more at r3.com.