LSCMS Blog

We attended an industry symposium earlier this week and the presenter from K Line shared some interesting facts with us. Many of our readers are probably aware of this information but we thought it interesting enough to share this with those, who like us, were not.

- It cost carriers US$ 1 million each time one of their vessel transit the Suez Canal

- A container vessel burns about US$88,000 per day or around $4,500,000 in fuel per round voyage

- Asia Europe Capacity growth stands at about 13 – 15 % but the market is growing at about 5% (which is down from the forecast of 7% growth earlier this year). Coupled with news that we have been hearing elsewhere, it looks like carriers could have to resort to withdrawing capacity like they did in 2009.

ED

The concept of CDN’s or Combined Distribution Network developed by LSCMS President, Raymon Krishnan, is gaining growing interest in industry.

Hershey and Ferrero, two of the world’s largest candy makers announced recently that they will work together to sweeten their supply chains and reduce their carbon footprint in North America. The two companies launched a collaborative warehousing, transportation and distribution initiative in North America this week.

Hershey, a $6 billion U.S. chocolate and candy maker, and Ferrero, the almost $9 billion manufacturer of brands such as Nutella and Ferrero Rocher chocolates, will join to reduce truck miles, carbon dioxide output and energy use.

Although details of the initiative were not released, the shippers are expected to share warehousing and distribution facilities and truck capacity. The alliance does not encompass manufacturing, selling or marketing activities, the companies said. They hope to realize gains from the pact as early as 2012.

Scoot Airlines, Singapore Airline’s (SIA) new low-cost long-haul airline, is expected to start operating next April with one Boeing 777-200 aircraft, according to local reports.

The airline will later expand to four planes within the first three months, The Straits Times reported.

In the longer term, Scoot Airlines will aim to operate 14 of the twin-aisle Boeing aircraft by mid 2016.

This is part of SIA’s strategy to fit each of its B-777 with roughly 400 seats, in a bid to establish itself as a premium carrier among increasing competition with rival carriers

Singapore is offering a US$1 million cash prize for a global challenge in a bid to find the best new design for the next generation of container ports.

Announcing this on Wednesday at a maritime forum at Fusionopolis, Minister for Transport Lui Tuck Yew said the Singapore Maritime Institute (SMI) and the Maritime and Port Authority of Singapore (MPA) will be organising the “Next Generation Container Port Challenge” in April next year.

He said those in the industry would know that the basic design of a container port has remained largely unchanged for decades – a simple plot of land with stacks of containers surrounded by cranes to lift boxes on and off ships.

He added while there have been some improvements in port technologies, these have been mostly incremental changes.

On the demand side, Mr Lui said, things have changed much more dramatically with container ships carrying more loads per trip.

Safety, security and the need to put in place environmentally-sustainable practices are also putting more demands on port infrastructure.

He said these are presenting real challenges for land-scarce Singapore.

Mr Lui said Singapore wants to source ideas from the brightest and the best from all over the world through the “Next Generation Container Port Challenge”.

“We want them not only to think out of the box, but around and even ahead of the box!” Mr Lui said.

The winning concept is expected to embody innovation, efficiency, productivity and sustainability.

A consensus that has been oft-repeated lately is that Peak Season is likely to fall short of previously promising expectations. That was one of the main takeaways from a recent report published by the Tompkins Supply Chain Consortium, entitled Peak Season Trends and Strategies Survey Report.

The report was based on feedback from roughly 80 retailers, manufacturers, and wholesalers and distributors, and the findings were initially released at Tompkins’ Supply Chain Leadership Forum in last month.

When looking at Peak Season strategies, the report found that more than 40 percent of the report’s respondents have lowered the amount of SKUs (stock-keeping unit) they are selling.

The report’s authors explained that this reduction is because “wounds from the 2008 and 2009 holiday season are still fresh in the minds of retailers and consumer product manufacturers.” And they added that more than 1 in 3 respondents reported plans to stock fewer items in an effort to hedge against past situations like the deep end-of-season discounts of 2008 and the willingness to incur stock-outs in 2009.

When it comes to building up inventory levels in advance of Peak Season, the survey found that 11.1 percent plan to do so in June or earlier, with another 13.3 percent in early August and 22.2 percent in late August, and 15.6 percent in late October or November. Rounding out the top five were early September, late September, and early October, each coming in at 8.9 percent. And early July and late July hit 4.4 percent and 6.7 percent, respectively.

At last week’s Council of Supply Chain Management Professionals (CSCMP) Annual Conference in Philadelphia CEVA Logistics CEO John Pattullo said that at the moment there is only a modest upturn occurring as a result of Peak Season activity and is less than a conventional Peak Season.

This sentiment also rang true in recent research by Drewry Consultants, which stated that Transpacific ocean spot rates are declining, with rates down more than 30 percent compared to a year ago.

Drewry noted that while inbound volumes are better than expected, rate decline signals a soft peak season for pre-holiday imports from Asia. What’s more, vessel capacity continues to outpace cargo growth, leaving cargo interests with plenty of space on ships and depressed spot rates.

The current scenario regarding Peak Season is decidedly different from a Logistics Management readership survey conducted in early June. That survey found that 78 percent—or 367 of the 469 respondents expected a Peak Season this year, with another 45 percent—or 195 respondents—expecting it to be more active than a year ago, followed by 20 percent (87 respondents) calling for it to be less active, and 34 percent (147 respondents) expecting it to be the same as last year.

Looks like a bumpy ride ahead

A recognised regional South East Asian Infocomm Industry Outsource Provider for volume rework, contract personnel supply, turnkey service solutions, call center management, and repair and refurbishment for IT data communications and AIDC products is looking for a Warehousing/Logistics Executive, to work in one of the centers in Singapore.

The company was established in 1985 and is ISO 9001:2000 certified in both Malaysia and Singapore, and is a quality third party service provider.

This company takes ownership of after market service needs as well as presales rework, irrespective of brand or manufacturer. These services are indispensable in the supply chain, which supports a product’s life cycle and contributes significantly to achieving total customer satisfaction. The group operates four service depots in Singapore, Malaysia, & Hong Kong, and maintains strong strategic alliance with Service Providers throughout the Asia Pacific region. The Group sees an increasing need for expanding its resources to cater for the increasing business, and is looking for suitable candidates to fill this position in Warehousing/Logistics Executive in one of the centres in Singapore.

(more…)

We all know this but in a recent study, researchers at the Texas Transportation Institute at Texas A&M University have determined that a driver’s reaction time is doubled when distracted by reading or sending a text message. The study reveals how the texting impairment is even greater than many experts believed, and demonstrates how texting drivers are less able to react to sudden roadway hazards.

In addition to the reaction-time element, researchers also measured each driver’s ability to maintain proper lane position and a constant speed. Major findings further documented the impairment of texting when compared to the controlled driving conditions.

Drivers were less able to:

Safely maintain their position in the driving lane when they were texting and their swerving was worse in the open sections of the course than in barrelled sections.
Maintain a constant speed while texting, tending to slow down in an effort to reduce the demand of the multiple tasks.

By slowing down, a driver gains more time to correct for driving errors (such as the tendency to swerve while texting).

Speed variance was also greater for texting drivers than for non-texting drivers.

The fact that the study was conducted in an actual driving environment is important, the researchers say. While simulators are useful, the dynamics of an actual vehicle are different, and some driver cues can’t be replicated in a simulator.

US Federal statistics suggest that distracted driving contributes to as much as 20 per cent of all fatal crashes, and that mobile phones constitute the primary source of driver distraction. Researchers point to two numbers to illustrate the magnitude of the texting while driving problem: an estimated 5 billion text messages are sent each day in the United States, and at least 20 per cent of all drivers have admitted to texting while driving.

MEMBERS of National Shippers Strategic Transportation Council, NASSTRAC, met congressmen to argue against proposed regulations limiting truck drivers’ hours, and vehicle sizes and weight limits.

“The recession, high fuel prices, road congestion and a shortage of drivers have led to reduced capacity and increased transit times for our most critical transportation mode – trucking. Neither our economy nor our country can afford more of the same,” said NASSTRAC’s executive director Brian Everett.

More than 70 per cent of freight shipments, by value and by tons, move by truck which means any cuts in trucker hours will increase costs up to 10 per cent, he said.

The 20 NASSTRAC shippers met with aides and Minnesota Democratic Congressman Tim Walz, Wisconsin Republican Tom Petri, Tennessee Republican John Duncan and a number of others to oppose more stringent limited on truck driving hours. The Federal Motor Carrier Safety Administration (FMCSA) will decide the service rules during October.

Australia implemented rigid fatigue management laws a few years ago and this has certainly affected costs for shippers and eventually consumers with what some would argue little or no benefit to safety.

In the latest round of crackdowns on freight price fixing, six Japanese freight forwarding firms have been found guilty for conspiring to fix fees charged for transporting air cargo from Japan to the US, and will be paying almost US$47 million in fines.

According to the US Justice Department, this case came out of a separate price-fixing investigation of airlines with freight services.

Twenty-one executives from a number of airlines were charged and imposed fines of US$1.8 billion, AP reported.

The companies involved in the conspiracy from September 2002 to November 2007 include Nippon Express, Kintetsu World Express, Nishi-Nippon Railroad, Hankyu Hanshin Express, Vantec Corp., and Nissin Corp.

Until the last few years, such practices amongst freight forwarders and carriers was quite common but under newer laws these are considered anti-competitive.