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LSCMS Blog

Blog for updates and happenings in logistics in the Asia-Pacific region

August 25, 2011

Global Upswing Faltering According to ICC

Filed under: Logistics,Newsletter — admin @ 4:20 am

The global economic upswing is faltering with only the Latin America and Oceania escaping doldrums, seeing stable performance in one case and a slight upturn in the other, according to the Paris-based International Chamber of Commerce (ICC).

The ICC’s quarterly World Economic Survey – complied by the ICC and Munich’s Ifo Institute for Economic Research – fell 10 points to 97.7 in the third quarter of 2011, reported London’s Containerisation International. Principle declines were in Asia, the US and Western Europe.

In Asia, the fall was attributed to endeavours by most nations to moderate their rapid growth to stem rampant inflation, whereas the climate in Europe dimmed due to the once robust economies of Germany, Sweden and Switzerland losing momentum.

In the US, the ICC said, the economy is still fragile, the recovery weak and not at all strong enough to lead to a substantial improvement in the labour market.

The survey report was based on the assessment of 1,080 economic experts in 117 countries.

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August 22, 2011

Agility Pleads Not Guilty

Filed under: Logistics,Newsletter — admin @ 12:06 am

KUWAIT’s big logistics company, Agility, has pleaded not guilty to charges of overbilling US military for food supply services for US troops in Kuwait, Iraq and Jordan, amounting to US$68 million on two contracts worth $8.5 billion.

The company stands by its prices, suppliers and business practices for its vendor food contract between 2003-2010 which it says were approved and routinely reviewed by the US government auditors, inspectors general and oversight authorities even after indictment in 2009.

The company continues to backs its case that it is a civil contract dispute and should not be a criminal matter, reports London’s International Freighting Weekly. Agility’s Defense Government Services subsidiary said that its services provided for an additional 3,000 to 5,000 troops, over a war zone supply chain of 1,000 miles, “assumed all risk for inventory, infrastructure and equipment, and absorbing millions in losses for damaged vehicles and lost cargo.”

Thirty-three Agility employees were killed and 262 wounded in performance of their duties, said the company statement.

“Agility delivered unparalleled value for American taxpayers,” added the global logistics company which reported a second quarter net profit decline of 57 per cent despite its attempt to claw back revenue from its private sector contracts.

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August 18, 2011

Say Goodbye to Tiger Airways in Australia

Filed under: Newsletter — admin @ 2:11 pm

There’s no future for the grounded airline in Australia even after resuming operations on Aug 12, says Royal Bank of Scotland Asia Securities (RBS) as reported in the Singapore Business Review (SBR).

“To be honest, I would expect it to close down probably not within the year but I would say within maximum of 18 months. The decision to re-operate in Australia is just to demonstrate to the world that flying with Tiger Airways is safe.” RBS analyst John Rachmat said over the phone.

“Since the operation of Tiger Airways Australia in 2007, it has never made a profit. I think the best that they have delivered is I think a loss of $200K+. Not having a single year of profit is obviously not a good operating environment and I don’t think it is worth to waste money and effort in Australia anymore.” he added.

Tiger Airways have already closed its Adelaide base and according to Mr. Rachmat it will only be just a matter of few days before we see it shutting its Avalon base as well.

Moreover, the aviation expert said that Tiger Airways will just have to re-focus to markets where they actually make profits.

“I think Tiger is doing much better profitability in Southeast Asia. While half of its concentration is focused to Singapore, the other half will be directed to other countries in the region like Philippines, Indonesia and Vietnam.” noted Mr. Rachmat.

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August 16, 2011

RFID gaining traction

Filed under: Logistics,Newsletter — admin @ 11:59 pm

A recent study of RFID trends by bar code and RFID solution provider CYMBRA has found that a third of all companies surveyed are using or have implemented a pilot RFID project. Three years ago the figure was only 21 percent. For those companies that have implemented some RFID technology there were two main reasons for their decision; improvement of inventory accuracy and EPC (Electronic Product Code) compliance.

The CYMBRA survey also highlighted the expected benefits that respondents expected, such as improved inventory accuracy, indicated by 29 percent, 26 percent expected increased profits while overall increased efficiency was anticipated by 24 percent.

Compared to a few years ago, where there was a lot of hype created by RFID – but with little or low adoption and success, this is a healthy trend and is probably an indication that RFID is starting to gain traction as a technology to be used by industry.

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August 10, 2011

Aircraft Engineer sucked into aircraft engine and Killed

Filed under: General,Newsletter — admin @ 1:28 am

AN aircraft engineer was killed after he was sucked into a plane engine during a routine maintenance check which turned horribly wrong.

The man had reportedly entered the testing engine enclosure when the engine was running at Woodbourne Airport, near Blenheim, New Zealand.

Police would not immediately confirm how the man died but said officers were “assisting an Occupational Safety and Health investigation” into the matter.

Emergency services were called to the airport just after 8am (6am AEST) on the 9th of August but the man was already dead by the time ambulance crews arrived.

Ironically the engineer was working for a company called Safe Air – an aviation maintenance, repair, overhaul (MRO), design and manufacturing business which works on both commercial and military aircraft.

 

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LogiPharma Asia 2011

Filed under: Events — admin @ 12:22 am

The 3rd Annual LogiPharma Asia is the strategic platform where pharmaceutical supply chain and logistics professionals meet to discuss the key challenges of the life science industry in Asia.

4 reasons why you shouldn’t miss LogiPharma Asia 2011:

  • It tackles the latest regulation changes in Asia that will impact the entire supply chain of both pharma and logistic vendors in 2012 and beyond
  • It provides more case studies from key pharmas instead of vendors as this is what the customers have asked for
  • It tackles the latest changes in the supply chain industry in Asia and brings solutions to help pharma firms and vendors enhance their SCM performance to stay competitive
  • It is the only event that looks at the entire supply chain issues including the healthcare/FMCG consumers

Featured Topics

  • Deploying effective strategies to reduce your supply chain cost without compromising your services
  • Tackling your supply chain challenges with the increase of M&As and patent cliffs
  • Updates on the GSP and GMP regulatory requirements and changes for 2012 in China and India
  • Updates on China’s 12th five-year plan of the pharma distribution industry
  • Examining the pharmaceutical supply chain infrastructures in China and India
  • Implementing continuous improvement in your cold chain that optimises processes whilst maximising consistency and security
  • Managing transportation / supply chain during disasters
  • Debate on the pros and cons of outsourcing and in house manufacturing
  • Understanding the needs of the healthcare consumers and best practices to improve the entire supply chain management

The Logistics & Supply Chain Management Society is a  supporting organization for the event. Members who sign up enjoy a discounted price to attend and for more information just click on the LogiPharma link on the home page of our website at www.lscms.org

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August 9, 2011

Greener shipping method creates ripples in Asia

Filed under: General,Logistics,Newsletter — admin @ 5:25 pm

It was reported in the Singapore Straits Times that Asian businesses are being affected by slow steaming – a method developed by shipping lines that reduces fuel consumption but increases traveling time – a recent survey shows.

Some 110 Asia-Pacific firms responded to the survey conducted by American logistics management firm BDP International to study the impact of slow steaming on their businesses.

A total of 58 per cent reported snags in their customer service because they could not deliver goods on time or meet their commitments, while 51per cent felt the impact on their inventory because they were unable to get parts on time or were forced to hold more inventory. About 49 per cent had changes to their production schedules, while 27 per cent said cash flow was hit as billing and payments were delayed.

Despite the negative effects highlighted, slow steaming is gaining popularity among shipping lines. The method, used since the economic slowdown in 2009, involves ships travelling slower on long-haul routes.

This greatly reduces fuel consumption and greenhouse emissions, and improves the unilisation rates of ships as fewer are left unused.

Slow steaming raises the shipping time from Singapore to Los Angeles from 15 to 22 days, and from Singapore to European ports like Rotterdam from about 17 to 24 days, according to Mr Arnie Bornstein, BDP’s executive director for marketing and corporate communications.

“Companies affected by slow steaming are doing what they can to adjust,” he said. “Nearly every industry is affected by slow steaming, and the managers of import- and export-focused businesses want a say in how the practice affects them.

Some 48 per cent of the firms said they responded to the longer travelling times by doing more advance planning, while 38 per cent increased the number of carrier companies they use to get the best combination of prices and travel times.

About 73 per cent of the firms feel that ocean carriers should pass on the cost savings of slow streaming by reducing their rates, while 36 per cent want to see the savings used to offset future increases.

The survey included firms in consumer goods, retail, health care and electronics. Another 180 firms from the Americas, Europe and the Middle East were also studied in the same survey, and they reported similar problems and responses.

But container liners have defended slow steaming by highlighting the environmental benefits and fuel savings amid rising oil costs and weak freight rate. “Customers are not enthralled, but they understand,” said a Neptune Orient Lines (NOL) spokesman. NOL has added more vessels to its services to maintain its schedule of weekly port calls and to “better manage schedule reliability”.

To improve transparency in rates and charges, the firm has adopted a new formula for the calculation of fuel surcharge for its trans-Pacific routes that reflects the financial impact of slow steaming. This includes the savings from reduced fuel usage as well as the additional capital costs for adding more vessels and containers to NOL’s services.

Maersk Line’s Asia-Pacific chief executive Thomas Knudsen said his firm sees slow steaming as the “new norm”: “Our customers accept the speeds that we have now and the cost picture that we face, in view of rising bunker (fuel) prices.”

He said slow steaming creates a “buffer” in Maersk’s network that allows it to speed up if something unforeseen happens. He also pointed to lower greenhouse gas emissions, which will help firms reduce their carbon footprint as end consumers start to make it part of their purchasing criteria.

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Sri Lanka plans to become Asian shipping hub

Filed under: General,Newsletter — admin @ 5:21 pm

Sri Lanka plans to expand its ports with a US$3.4 billion investment from China in a bid to transform into an Asian shipping hub along the ranks of Singapore and Dubai.

Sri Lanka has a goal to create a trade gateway to emerging markets after the end of its 26-year civil war, with port revenues expected to triple to 72 billion rupees from 2010 to 2015, according to president Mahinda Rajapaksa.

The country’s container volumes hit a record level last year with a 22% increase to 4.16 million TEUs, Sunday Observer reported. It is expected to increase 10% this year, and as much as 20% next year.

Sri Lanka Ports Authority chairman Priyath Wickrama believed its Hambantota port is well-positioned to feed the Indian subcontinent, and a combination of Colombo and Hambantota will be able to compete with Dubai, Salalah, and Singapore.

With its natural deep sea ports and with more post-Panamax ships of over 14,000 TEU’s coming on line in the next few years this vision could well become a reality as Sri Lanka is ideally positioned between the Middle East and Asia.

China will be involved in the development of Sri Lanka’s ports with its commitment of at least US$3.7 billion since 2005. In 2007, it offered US$306.7 billion to the initial phase of the Hambantota port with another US$808 million loan expected from Export-Import Bank of China.

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August 2, 2011

LSCMS endorses SCMLogistics World 2011

Filed under: Logistics,Newsletter — admin @ 12:39 am

LSCMS has participated in SCM Logistics World since its inception and this year is no different. Understanding how to operate differently and profitably, in this time of complex operations, may well prove to be the very knowledge that will give you the competitive edge and we believe that events such as this will help Logisticians do this.

SCM Logistics World 2011 – Asia’s No. 1 supply chain and logistics conference will provide you insights and tools to achieve sustainability, technology, customer-centricity and performance in your supply chain.

Apart from focusing on the supply chain strategies within the High-Tech, Retail & CPG, Chemical, Oil & Gas, and Automotive & Heavy Manufacturing verticals, the conference also breaks out to examine entry barriers and infrastructural challenges of key markets such as ASEAN, China, India and Northeast Asia.

Four Different Industry tracks, 4 Different Supply Chain Strategy tracks and 4 Different Country Focus tracks all happening at the SAME TIME. Attractive group booking discounts are available. So bring along your team to maximise the learning.

Contact Aaron at +65 6746 2250 or email him at aaron@lscms.org for more information.

As LSCMS is an Endorsing Association for SCM Logistics World 2011, members qualify for a 30% discount off registration tickets.

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NYK, K-Line, CSCL and Mitsui Latest Carriers to Post Significant Losses

Filed under: Logistics,Newsletter — admin @ 12:35 am

CHINA Shipping Container Lines (CSCL) has announced it expects to post a net loss for the first six months of the year, citing the European debt crisis, rising oil prices, the earthquake in Japan and the influx of additional shipping capacity.

This news corresponds with reports from Japan’s top three largest carriers.

Mitsui OSK Lines (MOL), has posted its results for first quarter of fiscal 2011 from April to June, suffering a net loss of US$103.17 million with a 12.1 per cent decline in revenue to $4.48 billion.

MOL recorded an operating loss of $110.81 million between April and June versus an operating profit of $462.81 million a year ago.

Japan’s second largest carrier Kawasaki Kisen Kaisha (“K” Line) has announced that it suffered from a net loss of US$47.78 million in the first quarter of fiscal 2011 from April to June compared to a net profit of $202.6 million in the same period of last fiscal year.

Similarly, Nippon Yusen Kabushiki Kaisha (NYK Line) has announced a loss of US$91.68 million in the first quarter of fiscal 2011 from April to June against a net profit of $294.79 million the same period of last year.

Revenue declined 11.3 per cent year on year to $5.74 billion, suffering an operating loss of $133.49 million against a profit of $513.6 million a year ago.

CSCL said in a company statement: “Profits deteriorated due to a decline and stagnation in the ocean shipping market, further appreciation of the yen, and rising bunker prices.”

Having a pessimistic outlook, it forecast “a significant deterioration in profits due to factors such as the current declining demand in the containership segment, the current downturn of the dry bulker market, and appreciation of the yen.”

MOL predicted full-year revenue will stand at $19.23 billion, down 2.8 per cent from fiscal 2010; $448.71 million in operating profit, down 71.6 per cent year on year; and $217.95 million in net profit, down 70.8 per cent from the past fiscal year.

NYK cited the continuing appreciation of yen, rise of bunker prices, adverse impact of the Japanese earthquake on the broken supply chains, as well as softening freight rates and overcapacity problem attributed by deliveries of mega vessels as the reasons for the poor performance. “Reviewing the global economy, the US failed to show a clear recovery, while Europe was beset by concerns over debt and other fiscal issues, and China continued its credit-tightening policy,” said the NYK’s statement.

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