GHY Tradelines

(Today’s Trucking)

Openness and honesty: two important factors between shippers and truckers, and, according to the Ontario Trucking Association (OTA), was the tone at a recent meeting with the Canadian Industrial Transportation Association (CITA).

The talks, which took place earlier this month, were aimed at opportunities for getting waste out of the transport system; the pros and cons of the bid/tender process for gaining long-term efficiency improvements; the challenges of the driver shortage and more. Read more here.
 

(Dan Flynn – Food Safety News)

You, the consumer, are at the end of a long line of stops food makes before reaching your plate. Being able to trace this food back to its origins can be crucial to government and industry during a food-related recall or outbreak. But you may also want to know whether what you are about to consume is organic, whether it’s vegetarian, or maybe because of your beliefs you are looking for food that’s kosher or halal.

So while food companies might benefit from traceability and government may eventually demand it, food chain traceability is in large part about building relationships with consumers and giving them what they really want – the ability to trust that they know what they are eating.

Knowing what’s in your food and where it comes from sounds simple enough, but food chain traceability is a complex worldwide issue. It requires consistent standards and adequate technology in an ever changing world. Read more here.
 

(Richard M. Locke – Salon)

To do so, the public will need to hold companies like Apple and Nike accountable for fair labor standards

When Jia Jingchuan, a 27-year-old electronics worker in Suzhou, China, sought compensation for the chemical poisoning he suffered at work, he appealed neither to his employer nor to his government. Instead, he addressed the global brand that purchased the product he was working on. “We hope Apple will heed to its corporate social responsibility.”

In the past, his appeal would probably have fallen on deaf ears. But today, throughout the world, buyers in many industries have acknowledged a degree of responsibility for workplace conditions in supplier factories and pledged to ensure that the goods they eventually market are not made under abusive, dangerous, environmentally degrading, or otherwise unethical conditions. These businesses have committed to using private, voluntary regulation to address labor issues traditionally regulated by government or unions. And for the most part, the companies have acted on these commitments.

But have these private efforts improved labor standards? Not by much. Despite many good faith efforts over the past fifteen years, private regulation has had limited impact. Read more here.
 

(The Canadian Press)

Canadian clothing line Joe Fresh, sold in Loblaw stores, was among the customers of the factories operating in the building and has faced fierce customer backlash this week.

Loblaw Inc. will also be one of several major Canadian retailers to take part in an “urgent” meeting Monday with the Retail Council of Canada.

The retail council’s president and CEO wouldn’t confirm what other companies will be involved in the meeting, other than to say it will be a strong representation of retailers across the country, including those who usually participate in the council’s responsible trade committee. Read more here.
 

(Gavin van Marle – The Loadstar)

Big box shippers are increasingly looking at developing more formal contractual arrangements with container shipping lines, delegates at this year’s Multimodal show in Birmingham have learnt.

The era of gentlemen’s agreements between carriers and shippers is likely to draw to a close, said Matthew Gore, senior associate at law firm Holman Fenwick Willan, as increasing numbers of both parties look to develop legally binding ocean shipping contracts as a way of developing partnerships.

“Legally binding contracts give a framework to manage the relationship between the two sides – this fosters greater understanding and means that once the question of rates has been settled, the conversation can then move away from price and on to service.” Read more here.
 

(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.
 

(World Cargo News)

Following its post-DSC/17 workshop in London last October, ICHCA will convene another one on 16 April, which it says will be the last opportunity for interested parties to influence matters before DSC/18.

“The guidelines have been through several drafts and we are awaiting a second final draft,” said ICHCA International’s director Richard Marks. “The final submission of comment papers for DSC/18 is in June, but substantive papers, including the guidelines, have to be submitted earlier. We will be making our final comments on the guidelines after the April workshop, so in order to be able to influence the guidelines we need to get our comments in by May.”

Next week’s workshop takes place against a backdrop of a widening gap between shippers’ and carriers’ perspectives. In February the European Shippers’ Council (ESC) issued a statement that the problem of misdeclared wieghts would be “largely solved by setting a mandatory deadline for delivery of final shipping instructions.” According to the ESC, carriers often use shippers’ booking data to determine their stow plan, which in turn forms the basis of the terminal’s loading plan. The changes a shipper makes to the approximate weight of the container as declared in the booking data are regularly not processed in a timely manner, and this “leads to a gap between the registered loaded container weight on a ship and the real loaded container weight.” Read more here.

*International Convention for the Safety of Life at Sea
 

(eTravel Blackboard)

The seventh World Cargo Symposium (WCS) concluded in Doha with a renewed commitment to improve air cargo competitiveness across the supply chain. This includes industry consensus on moving e-freight forward and on pursuing a risk-based approach to supply chain security.

e-freight

A major milestone was reached on e-freight with the approval by the Cargo Services Conference of the Multilateral e-Air Waybill (e-AWB). This removes the need for individual bilateral e-AWB agreements between airlines and freight forwarders and will be a major boost to e-AWB penetration.

“The most important thing that we can do to improve the competitiveness of the air cargo industry is e-freight. It is a top focus for the Global Air Cargo Advisory Group (GACAG) which produced a roadmap to coordinate industry efforts. The IATA Board of Governors recognized the importance of the e-AWB to achieving e-freight and set ambitious targets. At the end of 2012 e-AWB penetration was 6.8%. By the end of 2013 the target is 20. And the big challenge is to reach 100% by the end of 2015,” said Des Vertannes, IATA’s Global Head of Cargo. Read more here.
 

(Lee-Anne Goodman – Leader Post)

Lengthy lineups at the Canada-U.S. border. Long flight delays. A loss of lucrative American business contracts. The much-heralded Beyond the Border initiatives placed on the back burner indefinitely.

Canada will feel the sting if U.S. Congress fails this week to avert what’s known as sequestration, an array of massive, mandated spending cuts to a host of federal departments and agencies aimed at slashing America’s $16-trillion U.S. national debt. On Thursday, $85 billion U.S. in cuts for this fiscal year alone are slated to kick in. All told, sequestration would amount to $1.2 trillion U.S. in budget reductions by 2021.

For Canadians, that means quick shopping trips to nearby border communities will almost immediately become a hassle as they’re confronted with waits of several hours at busier entry points. They’ll also feel the long hand of sequestration when they fly given there will be a ripple effect across North America as U.S. officials cancel flights and shutter some control towers and airports.

Canadian exporters, meantime, will face far longer cargo processing times at border entries as well. Business travellers will be ensnared in long lines at the border. And Beyond the Border, the Canada-U.S. plan aimed at intelligence-sharing, easing and streamlining cross-border trade and harmonizing regulations, could also be shelved with U.S. Customs and Border Protection poised to cut the equivalent of almost 8,000 positions. Read more here.
 

(Gavin van Marle – The Loadstar)

A new 20ft shipping container design could result in shippers being able to increase the number of pallet loads inside boxes by as much as 36%.

Developed by UK company Container Group Technology (CGT), which includes key executives who were behind the development of GESeaCo’s SeaCell units, the 20-20 SeaCell is the first unit which actually measures 20ft inside the container – existing standard 20ft boxes actually only measure 19ft 10½ inches long, and 7ft 7¾ inches wide internally.

The difference in distance may not actually be much – 6,096mm by 2,426mm for the 20-20, compared to the existing 6,058mm by 2,330mm – but the net result is the ability to load an extra four euro pallets – or 15 per tier compared to 11 – and two ISO pallets more – 12 compared to the current 10 per tier – inside the box Read more here.
 

(Alex Lennane – The Loadstar)

The aircraft parts supply chain could be disrupted if ICAO bans the transport of aircraft batteries on passenger planes. Media reports have stated that ICAO’s dangerous goods committee is in the process of revoking an exemption for lithium ion aircraft batteries which allowed them to be transported in the bellyhold, with immediate effect.

Aircraft batteries as heavy as 34kg were previously exempt from a ruling covering other types of lithium ion batteries on passenger aircraft.

However, concerns flagged by recent incidents on Boeing’s new 787 Dreamliner aircraft have forced ICAO to re-consider the exemption.

Other rules introduced with immediate effect have generally not been warmly welcomed by the industry. But Michael Steen, chairman of The International Air Cargo Association (Tiaca), told The Loadstar: “There has been a lot of dialogue between ICAO and the industry. Batteries have been on the agenda for some time. The dialogue has escalated because of the 787, but this only concerns one particular type of metal battery.”

The batteries will still be able to be transported on freighters, but there is some concern that any ruling will hit the aircraft parts market. “If that is the final decision then yes, it will impact the supply chain,” acknowledged Mr Steen. “The industry and suppliers will need to look at the best way of transporting the batteries, and make sure that the documentation is correct. Read more here.
 

(DCVelocity)

Adopting best practices would expand GDP at much faster rate than tariff cuts

Reducing global supply chain barriers through the adoption of best practices could increase annual world GDP by 4.7%, expand world trade by 14.5%, and be far more effective in promoting growth than removing all import tariffs, according to a study released yesterday at the World Economic Forum (WEF) in Davos, Switzerland.

The study, conducted by consultancy Bain & Co. and the World Bank, found that even taking “half-measures” toward implementing best practices would be six times more beneficial to global growth than eliminating all tariffs. By contrast, the removal of all tariff barriers would stimulate global GDP by only 0.7% and world trade by 10.1%, according to the report.

The study affirms the broad consensus that supply chain best practices, while well established in North America and western Europe, are very much alien concepts in other parts of the world, notably in fast-growing emerging markets.

The report, called “Enabling Trade: Valuing Growth Opportunities,” identified 18 examples of poor supply chain practices, and defined, in broad terms, how cost overruns, product delays and administrative inefficiencies could be reduced by implementing Best Practices. The 18 case studies cut across multiple regions, countries and industries. Read more here.
 

(David Badger – Lloyd’s Loading List)

For high-value goods air is a justifiable alternative when the reliability of the ocean supply chain is threatened, says analyst

Air freight rates slipped in December as the trade returned to business-as-usual following the volume boost of earlier hi-tech product launches, according to Drewry’s new monthly report, Sea & Air Shipper Insight.

Drewry’s recently launched East-West Air Freight Price Index, a weighted average of air freight rates across 21 east-west trades, fell by 1.4 points from November to reach 110.8 in December, bringing to an end four consecutive months of gains in the index.

“The waning effect of new hi-tech product launches on traffic demand was the primary contributor to declining rates from Asia into North America and Europe,” said Simon Heaney, research manager at Drewry. Read more here.
 

(The Financial)

Seventy percent of companies believe that climate change has the potential to significantly affect their revenue, a risk which is intensified by a chasm between the sustainable business practices of multinational corporations and their suppliers, according to research published today by the Carbon Disclosure Project (CDP) and Accenture.

“Reducing risk and driving business value” is based on information from 2,415 companies, including 2,363 suppliers and 52 major purchasing organizations who are CDP Supply Chain program members. These members include Dell, L’Oreal and Walmart, and they represent a combined spending power of US$1 trillion. The research marks CDP Supply Chain’s most comprehensive annual update on the impact of climate change on corporate supply chains.

Climate change presents near-term risks to businesses, according to the report. Fifty-one percent of the risks that disclosing companies associate with drought or extreme rain are already having an adverse effect on company operations, or are expected to within five years, say those businesses. Additionally, the destructive nature of extreme weather is likely a catalyst for company action on climate change, with physical climate risk identified in the report as a greater driver of investment than climate policy. Of the 678 companies investing in emissions reduction initiatives, three quarters (73%) say they feel that climate change presents a physical risk to their operations; just 13% identify regulation as a sole driver. Read more here.
 

(International Chamber of Commerce)

ICC’s new Uniform Rules for Forfaiting (URF) came into effect on 1 January after more than three years of intensive drafting. The rules, which were approved at the last ICC Banking Commission meeting in Mexico City, will govern a market estimated at more than US$300 billion a year.

Forfaiting, a form of international supply chain financing, provides a vital finance component for a number of trade instruments, including letters of credit, bills of exchange, promissory notes and invoice purchases. The new URF provide the contractual framework to transform these instruments into viable banking investments.

The URF, developed in cooperation with the International Forfaiting Association (IFA) complement other ICC uniform rules, notably the Uniform Customs and Practice for Documentary Credits (UCP), ICC’s universally used rules on letters of credit. Letters of credit are largely forfaited, especially in China, where forfaiting constitutes the bulk of transactions. 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.
 

(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.”
 

(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)

Shippers are becoming more reliant on the ‘credit’ extended by forwarders, and many are reneging on or delaying payment terms.

Documents seen by The Loadstar show that some major high street names are failing to pay their logistics providers on time, and can run up bills into the millions of dollars. Others are extending the terms of the credit, increasingly using forwarders as banks.

While several forwarders contacted by The Loadstar said they hadn’t seen an increase in non-payment, they had noticed a lengthening of the payment period, while some had even put a stop on shipping major retailers’ goods until outstanding invoices had been settled.

“In general I see that in particular bigger, global customers, when tendering their business, are apparently trying to gain further savings by extending their credit period,” agreed Nikolas Dombrowski, product director airfreight for Geodis Wilson. Read more here.