GHY Tradelines

(Alex Lennane – The Loadstar)

The air freight industry could prevent further modal shift – and even boost volumes – if it responded better to the needs of the shipper, delegates at TIACA’s Executive Summit in Dallas heard last week.

In a speech littered with the word unprofessional, Robert Mellin, head of distribution logistics for Ericsson, revealed that the air freight industry is failing to make itself attractive and failing to compete on service levels with other modes of transport.

Top of the shippers’ wish list, he said, is shipment visibility and electronic communication, something that other modes of transport have already put in place. Read more here.
 

(Fabrizio Brasca — Logistics Viewpoints)

The lasting image of the supply chain in 2012 is one of a consumer with a smartphone engrossed in making an online purchase. The story that goes with that image is all about the rapid changes that this new “connected consumer” has injected into our industry in 2012. So let’s take a deeper look at this evolution and some key things to watch for in 2013.

Historically, transportation has been treated as an ancillary function, but due to its importance in providing value to customers, organizations are increasingly taking a holistic view of the entire chain. They are looking for ways to reduce cost, retain service levels, and create agility and resiliency. In the past, businesses spent more time focusing on up-front challenges such as the customer’s web experience, while leaving transportation as an afterthought. Now, organizations need to look at the impact and opportunity that the connected consumer brings to the supply chain. Read more here.
 

(Tradecard.com)

A guide has been published by Sourcing Journal Online and TradeCard to help supply chain executives in the apparel industry take advantage of sourcing locales in the Latin America as they pursue strategic initiatives requiring faster turnaround and more reliable delivery of goods.

“We see strong growth in the Americas in the next three years as the global economy bounces back. Latin America is fast becoming a major sourcing destination for savvy brands and retailers based in the U.S. and Canada,” said Patrick Lamson-Hall, managing editor of Sourcing Journal Online.

From 2009 to 2011, total volume of apparel, footwear and household goods sourced to the United States from Latin America grew by 17 percent, while volume from China has stagnated and begun to fall in some categories.

“Brands and retailers are taking a holistic approach to sourcing and leveraging different regions to counter rising pressures from consumers, costs and trade regulations,” said Ted Barba, vice president of business development for TradeCard in the Americas. “The quality of goods in the Americas, and the infrastructure to deliver these goods, has drastically improved in recent years.

However, each country poses a series of opportunities and risks. It’s important to do your homework and have a clear understanding of how Latin America fits into your business strategy before making a major investment.”

Click here to download the white paper, Sourcing in Latin America: Strategies.
 

(China Daily)

China’s role in the global supply chains saw a key change in 2009 when authorities started to push for economic restructuring and sustainable growth, said William Fung, chairman of Hong Kong-based trading firm Li & Fung Group.

Addressing a business forum in Singapore on Wednesday, Fung said China started to be part of the global supply chains after its opening up in the late 1970s and gradually came to be known as the “world factory” over a course of three decades.

A key change came in 2009 when authorities started to push for economic restructuring and more sustainable growth, as it is clearly not sustainable to rely on cheap labor and cheap exports.

Fung said he sees a change for China to be eventually both a source of exports and a global consumer market over the next three decades as authorities try to boost domestic demand. He also said at the forum that both Hong Kong and Singapore are among the world’s leading trade and logistics hubs in terms of the supply chains. Hong Kong is the gateway to the Chinese mainland, while Singapore’s hinterland is the Association of Southeast Asian Nations. Read more here.
 

(The Loadstar)

While shippers wait for more news to come out of the battered north eastern US, Dave Shepherd, global head of sales for IAG Cargo, told The Loadstar: “Cargo is of course backlogged and will take some time to recover, but it will not take very long to alleviate the system, mainly as the affected days were the weaker part of the week.

“Because the on-ground logistics is severely disrupted ex-US, backlogs are not really occurring in the airport warehouses, as the whole supply chain has simply frozen, with electric out in many places and people unable to work.

“That is not true on the inbound side and freight is ‘on-hand’ in many places globally for the north eastern US. While this will cause a demand spike for a period of days, it will still resolve itself relatively quickly and the system will return to normal in a number of days, unless power shortages make acceptance of inbound freight impossible for longer than the next day or two.”
 

(Gavin van Marle — The Loadstar)

A week after Maersk announced that it would withdraw capacity from the troubled Asia-Europe trade, Hanjin and Evergreen are also to partially cut winter capacity with the decision to drop three sailings of its recently launched CEM/CUS Asia-north Europe service.

But observers and forwarders involved in the trade believe that the liner shipping industry will need to take further action if it is to return rates to profitable levels.

One forwarder told The Loadstar: “If the market is going to turn it’s going to need more than a couple of loops coming out. I would think around 20,000teu per week will have to come out before capacity will be in line with demand and rates can go up.”

A statement from Hanjin said that it and Evergreen will skip three of the 13 sailings scheduled on the service between now and the end of December, which it said represented a 23% cut in capacity, and added that further capacity cuts were under consideration. Read more here.
 

(DCVelocity –  Mark B. Solomon)

Group to work with multiple federal agencies in effort

The Commerce Department said it has formed a supply chain “advisory committee” that will counsel the federal government on the role that freight transportation and logistics can play in helping U.S. businesses increase their exports.

The committee will be comprised of 40 senior-level private-sector executives representing multiple industries as well as supply chain experts appointed by the Commerce Secretary. The committee will work with multiple federal agencies – including the Department of Transportation –on supply chain issues that affect the international competitiveness of U.S. businesses. The first meeting will be held tomorrow at Commerce headquarters in Washington. Read more here.
 

(Lloyds Loading List – David Badger)

A peak season seems less likely while global economic conditions remain challenging, suggests survey

Overall confidence of players in the logistics sector has declined for the sixth consecutive month, according to the latest Stifel Nicolaus Logistics Confidence Index survey by Transport Intelligence (TI).

The index is generated from an extensive survey of global logistics professionals, asked to provide their views on current levels of volumes in the industry and their expectations for six months’ time.  An index value of 50 indicates no change in the volumes currently being experienced for the time of year; above 50 indicates higher volumes, while below 50 indicates lower volumes. Read more here.
 

(Laurie Sullivan — EBN)

The US Patent and Trademark Office granted Google a patent this month for securing, monitoring, and tracking cargo shipping containers. The abstract describes a two-way communication system supported by an electronic bolt, a network gateway, a Web-based platform, and a mobile device.

The wireless system would augment the mechanical seals used today. It would enable nearly real-time, end-to-end monitoring of the location and status of secured shipping containers through a series of gateways connected to a network. Each gateway is associated with a location that would transmit information to a cloud server.

The patent makes no mention of using Google’s Android operating system to run the platform, but it does highlight the ability to access the platform from a handheld device. The application was submitted in 2009; this suggests Google’s plans to build a mobile enterprise service started long before the Motorola Mobility acquisition or the launch of the Nexus 7 tablet manufactured by Asus in Taiwan and China. Now that Google offers a hardware line, the patent supports its emerging business model. Read more here.
 

(Alex Lennane – The Loadstar)

The CEO of CEVA Logistics, the likeable Scot John Pattulo, has called on the logistics and supply chain industries to keep pressure on governments to negotiate and stand by free trade agreements.

“International freight has grown faster than GDP because of the ending of trade barriers,” he said. “There’s a real danger that that momentum will stall in the present economy. We need to be active spokespeople in making sure that lanes stay open.”

Speaking about the future of global transport at the Council of Supply Chain Management Professionals annual conference in Atlanta, he also forecast considerable consolidation among forwarders. “In the global logistics industry, the top 10 players have less than 30% of the market share. That is not sustainable, so there will be some meaningful consolidation in the coming years. Over the next 10 I’d expect to see significant consolidation.”

He added that he expected to see a major Chinese company present in logistics within that time. “As a managed economy, clearly they want to build the service sector as manufacturing becomes less competitive.” Read more here.
 

(Carolynne Wheeler – Globe and Mail)

Business is still slow at the Beijing Fortune building, home to several major Japanese companies operating in China.

The offices of concerns like Hitachi Ltd., All Nippon Airways Co. Ltd. and Japan Airlines Corp., which were closed during the height of street protests in Beijing, are open again. But the slow foot traffic is a reminder of how a handful of uninhabited islands in the East China Sea are drawing the world’s second- and third-largest economies into a standoff threatening major disruptions to two-way trade worth more than $340-billion (U.S.) last year.

“Japan is China’s second-largest trading partner, China is Japan’s largest trading partner, and Japan has a lot of investment in China,” said Yao Yang, a professor at the China Centre for Economic Research at Beijing University. “In that case both countries are going to be hurt. The thing that has been most affected is Japan’s investment in China.” Read more here.
 

(Supply Chain Digital)

Supply chain executives in large companies are struggling to hire and retain talented white-collar employees in China, according to a new report by SCM World.

In their annual Chief Supply Chain Officer Report, published today, a global study of nearly 1,400 executives found that rising labour costs and poaching are the biggest concerns in China, and that the country is regarded as by far the riskiest market for talent worldwide.

Almost two-thirds of those surveyed are concerned about the rising cost of knowledge workers in China, particularly within the hi tech, industrial, chemicals and retail sectors. It’s a similar picture on staff retention, where more than half of supply chain executives say they are concerned about their most talented employees being poached. Read more here.
 

(Gavin van Marle – The Loadstar)

Maersk Line’s announcement yesterday that it intends to raise reefer rates across the board by $1,500 per feu – or $750 per teu – on 1 January next year provoked a wide range of emotions from shippers, forwarders and other carriers, with predictions that other lines would follow suit.

In a keynote speech to the Cool Logistics conference in Antwerp, Maersk Line chief executive Søren Skou, flanked by a platoon of Maersk executives, told delegates that the hike represented a 30% increase in prices globally, but argued that the carrier may have to rethink its participation in the reefer trades were it not able to secure better returns.

He said that over the last seven years reefer rates had not been able to cover the increases in inflation or bunker costs, and added that between now and 2015 the industry would need to invest $3.5 billion in new equipment, which would not be covered by current rates. Read more here.
 

(Winnipeg Free Press)

Canada’s economic competitiveness on the world stage is being pulled down by – among other things – government handling of the innovation file, says an annual report from the World Economic Forum.

Canada slipped two notches to 14th place in the forum’s ranking of global economic competitiveness, released Wednesday.

While the survey finds Canada benefits from highly efficient markets and excellent infrastructure, it is “being dragged down by a less favourable assessment of the quality of its research institutions and the government’s role in promoting innovation through procurement practices.” Read more here.
 

(BBC News)

The UK has risen to eighth from 10th place in an annual study of global competitiveness.

The World Economic Forum’s (WEF) survey said the UK had benefited from a more efficient labour market compared with more “rigid” European economies.

The U.S. economy fell from fifth to seventh place, although WEF said it remained the top innovator. Switzerland topped the table, followed by Singapore and then Finland in the survey of 144 economies. The ratings are compiled using public data as well as executive opinion. The survey placed China as the most competitive major emerging economy. Read more here.

Note: Canada ranked 14th in the survey. Click here to review the complete report online.
 

(DCVelocity)

United States has ninth-best performing logistics system in world, according to survey of freight forwarders.

Singapore leads the world in providing logistics capacity to facilitate trade, according to a recent report by the World Bank: Connecting to Compete 2012: Trade Logistics in the Global Economy.

The United States scored ninth out of the 155 national economies ranked by the Logistics Performance Index (LPI), a compilation of six metrics to measure a nation’s logistics performance. The U.S. was ranked 15th in the last report, which was issued in 2010. The first report was published in 2007.

Germany held the top spot in the 2010 report, but it fell to fourth in the most recent finding.

To develop the rankings, World Bank economists gathered 6,000 individual country assessments from nearly 1,000 international freight forwarders. Each freight forwarder rated the eight foreign countries that it serves most frequently. Read more here.

Note: Canada ranks 14^th in the 2012 report.
 

(Handy Shipping Guide)

Heavy Lift and Break Bulk Cargoes Rarely Run Exactly to Plan

For many project freight forwarding companies the shipping of materials supporting the energy sector is ‘the new black’ as the saying goes. At a time when tonnages can be uncertain the heavy lift and break bulk cargoes have provided a more stable income for many logistics companies within departments that hitherto were often regarded as the icing on the financial cake rather than the daily breadwinners.

Tuscor Lloyds has actively pursued its interest in logistics projects for the Oil, Gas and Energy Industry of late and the policy is paying dividends illustrated by their latest specialist movement between Japan and Mexico when the request arrived to deal with the multimodal transport of parts needed to repair a transformer which had been damaged. The suppliers, the Mitsubishi power generation division in Kobe, Japan, readied the cargo as 63 packages weighing in at 45 tonnes and 125 m3 and Tuscor Lloyds divided the consignment into two phases. Read more here.
 

(Alex Webb – Bloomberg)

Shipping lines that carry generators and giant trucks for General Electric Co. (GE) and BHP Billiton Ltd. (BHP) are becoming takeover targets amid a lack of funding for the vessels needed to tap one of the most resilient cargo markets.

The withdrawal of lenders such as Commerzbank AG, Lloyds Banking Group Plc (LLOY) and Societe Generale SA (GLE) from maritime finance as credit policies tighten is making life tougher for specialist lines that dominate heavy-lift shipping, while arousing interest from potential consolidators including private-equity firms.

A merger last week between U.S-based Intermarine LLC, owned by New York buyout specialist New Mountain Capital, and Scan- Trans Holding of Denmark created the world’s No. 2 heavy-lift shipper and may herald a spate of takeovers in the sector, according to Al Stanley, who will head the enlarged company. Read more here.
 

(Lloyds Loading List – Mike Weir)

Freight survey returns gloomy short-term results but points to positive six-month outlook

Freight forwarders on the world’s main trade routes have expressed falling confidence for the month of June in both the air and sea sectors.

According to the latest Stifel Nicolaus Logistics Confidence Index, sea freight confidence fell to 45.7 from 45.9 in May, while air sector confidence now stands at 43.5 compared with 44.4 the previous month.

A result below 50 is regarded as negative sentiment while a result in excess of 50 implies that survey participants are more optimistic. Read more here.
 

(Handy Shipping Guide)

NOL Publish Gloomy Q1 Figures with an Honest Appreciation of the Situation

It is rare for us to see a financial statement which not only shows a parlous situation but indicates that, unless there is a major change in fuel prices and freight rates improve substantially the outlook remains poor and, when the forecast comes from the world’s sixth biggest container shipping company, one has to admire their candour and appreciate the seriousness of the situation. The first quarter figures from Neptune Orient Lines (NOL)hold very little good news for the industry.

NOL Group, the Singapore-based container shipping company which includes APL and APL Logistics, published Q1 figures today showing a jump in net losses from US$10 million for the period in 2011 up to a massive $254 million this year. The cause was put down purely to the drop off in freight rates due to the now inherent overcapacity which is plaguing the industry plus the rapid rise in fuel prices, figures achieved despite the estimated $100 million in costs saved by the group in the first three months of 2012. Read more here.