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LSCMS Blog

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

February 27, 2012

Dolphin cargo raises ire of animal welfare groups

Filed under: Logistics,Newsletter — admin @ 7:42 pm

Hong Kong Airlines is facing harsh criticism after an internal memo describing its recent delivery of live dolphin cargo from Japan to Vietnam was leaked.
The dolphins are believed to be from the Japanese town of Taiji, depicted in the Oscar winning documentary “The Cove”.

More than 2,800 people have since signed the online petition at Change.org to stop the act.

The petition wrote that five Taiji dolphins were transported on a cargo flight on 16 January for seven hours.

An internal memo to its airline staff said the flight was a success, earning HK$850,000 (S$137, 618) in cargo revenue, the Daily Telegraph reported.

Hong Kong Airlines said in a statement no dolphins were harmed during the shipment, as the carrier kept to the government rules and International Air Transport Association regulations on live animal transportation.

The airlines also said they are fully committed to the protection of animal welfare and thanked animal welfare groups for their comments

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Singapore economy worse than feared

Filed under: Newsletter,Singapore — admin @ 7:37 pm

Singapore’s manufacturing output faced an 8.8% fall in January, a drop more severe than what economists had initially predicted.

The decline in manufacturing output, taken from the Economic Development Board, was steeper than the median 0.7% fall expected by 11 economists in a Dow Jones Newswires poll, Wall Street Journal reported.

The fall in January was attributed to the decline in manufacturing demand from the weak global economy, with the long Lunar New Year break further aggravating the industry’s situation.

The drop has been reported to be the biggest decline in the last eight months.

Electronics output dropped 28.4% from last January, while precision engineering output experience a fall of 13.3%. Chemical manufacturing output also fell 12.4%. However, biomedical manufacturing output saw a 27.9% increase.

With the exclusion of biomedical manufacturing, the total manufacturing output saw a 15.3% decline, compared to last year.

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Qantas denies breach

Filed under: General,Newsletter — admin @ 7:31 pm

Qantas denies claims by the Transport Workers Union it has failed to meet Fair Work Australia requirements after announcing it’s shedding 500 jobs.

On Friday the TWU said Qantas had failed to meet Fair Work Australia requirements in shedding 500 jobs and should be prosecuted with the full force of the law.

Qantas on Thursday announced it was making 500 jobs redundant after the airline reported an 83 per cent slump in half-year profit due to rising fuel costs and losses related to the grounding of its fleet last year.

Transport Workers Unions national secretary Tony Sheldon said the TWU was prepared to “fight for the heart and soul of Qantas”.

“The company clearly breached its requirements under the Fair Work Act and we’re calling on the Fair Work Ombudsman to prosecute Qantas with all the strengths of the law,” Mr Sheldon told reporters in Sydney on Friday.

“They have an obligation to consult, negotiate and have proper conversations and engagement with their work force when restructuring occurs.”

But Qantas spokeswoman Olivia Wirth dismissed Mr Sheldon’s comments as “baseless”.

“Qantas has complied fully with its obligations under the Fair Work Act and collective agreements with employees,” Ms Wirth said in a statement.

“Qantas has spoken to affected employees and briefed the relevant unions.

“Qantas is working to reduce the number of redundancies and we will provide generous packages and assistance to those affected by the changes.”

Ms Wirth said the comments were part of Mr Sheldon’s ongoing campaign against Qantas.

“This week the TWU failed in its appeal in the Federal Court, meaning it will be forced to pay Qantas over $700,000 for delaying flights and disrupting passengers when it undertook an unlawful strike at airports around Australia in 2009,” she said.

Mr Sheldon said it was clear the airline was planning to outsource the jobs, despite Qantas denying such a plan.

“It’s clear the Australian people have got one foul liar running a company and destroying the company,” Mr Sheldon said of Qantas CEO Alan Joyce.

“It’s become clearer and clearer from both statements within Qantas management privately, and from our politicians in Canberra on both sides of the house, that Qantas intends to strip the flying kangaroo and Jetstar in an operation to maximise profits for the executives.”

Qantas had consistently breached undertakings it had given to the workforce in the last 12 months, Mr Sheldon said.

The ongoing dispute between the TWU and Qantas is expected to be heard before FWA in March, after the industrial umpire intervened when the airline was grounded for two days last October.

“What (yesterday’s announcement) does is put another nail in the coffin of our working relationship with the Qantas/Jetstar group,” Mr Sheldon said.

“This is a company that has ruthlessly decided that the kangaroo has to be slaughtered in this country and we’re not going to let that happen.”

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February 26, 2012

China to use rare earth to boost manufacturing

Filed under: China,Newsletter,Supply Chain Management — admin @ 8:47 am

To boost domestic manufacturing capacity of rare earth, China has made plans to develop new rare earth-based materials from 2011 to 2015.

In a statement by China’s Ministry of Industry and Information Technology, the government aims to make full use of its rare earth resources to create new materials from rare earth and boost output of the country’s new material industry to 2 trillion yuan (S$398 billion).

The government will aim to develop functional materials and increase efforts to improve them, which promotes its application in high-end manufacturing and adds value to the product, China Daily reported.

Part of the plan to boost the industry involves developing manufacturing centres in Beijing and in the autonomous region of Inner Mongolia.

The plan also includes efforts to protect energy resources and promote integrated utilisation. In the fourth quarter of 2010, China had implemented stringent rules governing rare earth exports to meet environmental protection laws and international strandards.

This news will cause further concern of users of rare earth globally as the rare earth industry in China accounts for almost 90% of total global sales.

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February 20, 2012

Maersk launches shipping biofuel experiment

Filed under: Newsletter — admin @ 1:26 pm

Maersk Line is testing algae-based biofuels to see if they are successful as a means of cutting emissions from a vessel. The testing will be on a shipping route from northern Europe to India.

The Maersk Kalmar container ship will be making a 6,500 nautical mile, month-long voyage, and will be testing different blends of biofuels in its auxiliary test engine.

During the journey, it is expected that the Kalmar will use up to 30 tonnes of biofuel. Onboard engineers will analyse emissions data on nitrogen oxides, sulphur oxides, CO2 and particulate matter, along with effects on power efficiency and engine wear and tear. The tests are scheduled to conclude this month with results following soon after.

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February 18, 2012

The Logistics Society on Channel News Asia

Filed under: Education,General,Logistics,Newsletter,Singapore — admin @ 4:14 am

Commncing Monday 20th February, the Logistics & Supply Chain Management Society will be featured on Channel News Asia’s, Invest In Me show that airs at 8.30 p.m. Singapore time with repeat telecasts being shown throughout the week. Episodes can also be downloaded from the Channel News Asia website.

In this programme, the Society shows its support in helping social enterprises in the region by providing Logsitics advice and hands on expertise to an events company with Logistics issues. Follow us as we make this journey with the Society’s President, Raymon Krishnan and other individual and corporate members towards resolving some of the common Logistics issues faced by SME’s.

Past episodes of the programme can also be viewed online at – http://www.channelnewsasia.com/investinme

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APL to phase out US container chassis in 2012

Filed under: Logistics,Newsletter,Supply Chain Management — admin @ 3:54 am

In line with what most MLO’s are doing, Singapore Neptune Orient Lines (NOL) has announced that its container shipping arm, APL, will begin phasing out its US fleet of container chassis during the first half of 2012.

The carrier is expected to complete the disposal of the fleet by 2014, a statement said.
Chassis are the skeletal truck trailers used to haul shipping containers over the road. The shipping line said it will turn its fleet over to organisations that specialise in providing chassis to drayage companies.

“This is the direction the container shipping industry is moving,” said Americas president Gene Seroka from the company’s US headquarters in Scottsdale, Arizona. “By relying on providers who specialise in chassis management, equipment is deployed more efficiently.”

Disposal will begin with a pilot programme at terminals in Denver and Salt Lake City, which could begin as early as March. Chassis will be phased out at most of the company’s inland terminals by the end of this year, then extended to US east coast seaports in 2013, and is expected to be completed nationwide by early 2014.

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Amazon open 1 million sq ft DC in Delaware

Filed under: Logistics,Newsletter — admin @ 3:52 am

Amazon is opening a 1 million-square-foot fulfillment center in Middletown, Delaware, which is the e-commerce giant’s second facility in the state. Amazon says that the new center will create 850 full-time jobs, and will cost $90 million.Amazon’s fulfillment centers enables the company and third-party merchants to store inventory and fulfill orders.

The Middletown center joins Amazon’s New Castle fulfillment facility, which was opened in 1997. Amazon says that the New Castle center currently employs “hundreds of full-time workers,” but it sounds like the new facility will be larger.

The Middletown facility is expected to be complete this fall. In December, the Delaware Economic Development Office awarded the company $3.47 million from the Delaware Strategic Fund to support the expansion, of which $2.12 million will help create new jobs at the site. The fund will also contribute to the company’s infrastructure investment, equal to 3 percent of the total capital expenditures, or a maximum of $1.35 million. A separate grant for up to $4 million from the Delaware New Jobs Infrastructure Fund will be used to build extensions of public roads to serve the project, improve traffic flow and provide access to additional properties for future economic development. Amazon will also benefit from a real estate tax abatement from the town of Middletown for the next 10 years.

Amazon has been ramping up the development of its fulfillment centers over the past year. In 2011, the e-commerce company opened 15 new centers worldwide. As of last July, Amazon had roughly 65 centers worldwide. And this year, the company opened a new center in India and in South Carolina.

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TNT rejects UPS advances

Filed under: Newsletter — admin @ 3:19 am

Reports out of Europe are stating that Netherlands-based TNT NV, a provider of mail and courier services and the fourth largest global parcel operator, rejected an offer by UPS for TNT’s express business.

Bloomberg reported that the unsolicited bid was for $6.43 billion ($4.89 billion euros), which is 42 percent above TNT’s stock price. The report said that this offer was turned down by TNT’s board, citing a company statement, which added that the companies still remain in discussions.

UPS officials confirmed in a statement that in February 11, following discussions with TNT, it made a revised, increased and comprehensive proposal to acquire the entire issued share capital of TNT for EUR9 per share in cash.

Like TNT, UPS confirmed that the discussions between the companies remain ongoing, although there is currently no certainty that any agreement will reached. UPS added that further details will be provided when appropriate.

These developments represent a change of heart for UPS to a degree. In December 2010, shortly after TNT first announced its plans to sell off its Express unit, it indicated it would not be a potential buyer of the unit.

UPS Chief Financial Officer Kurt Kuehn told a German newspaper, the Boersen-Zeitung, at that time that the UPS did not intend to make any large acquisitions in the future. But he did say that the company may be more inclined to focus on small and medium-sized acquisitions in Europe rather than buying TNT’s Express unit.

Using DPWN DHL as an example, Kuehn explained that expanding too quickly into a region—as DPWN DHL did when DHL Express acquired Airborne Express in 2003 to establish a U.S. domestic presence—can be dangerous. DHL Express eventually pulled out of domestic operations in the U.S., due to severe financial losses and facing myriad challenges keeping up with the more established and larger UPS and FedEx.

In December 2010, TNT announced its plans to it plans to “demerge” operations by separating its Express and Mail operations into two independent companies, effective January 2011. Company officials said that the main reasons for an internal separation were the increasingly divergent strategic profiles of the two units and the limited existing synergies between them.

In May 2011, TNT NV’s shareholders approved the spin-off of its Express unit. As a result of this initiative, TNT NV said it would demerge Express and only focus on Mail activities, and will retain a 29.9 percent financial stake to cover separation agreements, which will be returned to shareholders.

Industry pundits all agree that the deal is not dead yet and look forward to further developments to be announced.

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February 1, 2012

New Vietnam airlines saves 40-hour bus trip

Filed under: Newsletter — admin @ 9:35 pm

VietJet Aviation Joint-Stock Co., the budget carrier that began flights in Vietnam last month, may double its fleet to six planes by the end of the year as it lures passengers from bus trips taking as long as 40 hours.

The carrier’s 122-seat Airbus SAS A320s are 90 percent full on its first route, Ho Chi Minh City-Hanoi, said Chief Operating Officer Pritam Singh. The average fare including taxes is 1.03 million dong ($49) one way, according to the airline. That’s about 25 percent less than the cheapest ticket offered on Vietnam Airlines’ website.
VietJet also intends to challenge the state-owned carrier on international services as soon as the third quarter as an economic growth rate that the government expects to reach 6 percent this year spurs travel demand. The number of Vietnamese living in poverty declined to about 11 percent in 2010 from 58 percent in 1993, based on U.S. government figures.

“The market for a budget carrier has to be developed, but it’s there — if they have enough capital and run a good marketing campaign,” said Paul Stoll, who helped set up the Vietnam Tourism Association and is the chief executive officer of Celadon International Hotel Management Joint-Stock Co. Still, “it will be tough.”

On the Ho Chi Minh City-Hanoi route, a VietJet flight takes about two hours compared with 30 to 42 hours by rail and 34 to 40 hours by bus. A one-way rail trip in mid-February costs 486,000 dong for a hard seat, according to the website of the Hanoi train station. The cheapest ticket on a bus operated by Vinamotor Investment Joint-Stock Co. is about 400,000 dong.

“Many people think an airplane has to be expensive, and that a bus will be much cheaper,” said Singh on Jan. 27 by phone. “We are trying to reach out to this segment, to introduce the idea of using an airline instead.”

VietJet also intends to start services by April to Danang, the biggest city in central Vietnam.

VietJet flies from Hanoi to Ho Chi Minh City three times a day. Other operators on the route include Jetstar Pacific Airlines Joint- Stock Aviation Co., a Vietnam Airlines-Qantas Airways Ltd. venture, and closely held Mekong Aviation Joint-Stock Co.

As the carrier expands overseas, possible destinations may include Singapore, Kuala Lumpur or Bangkok, Singh said.

The airline, which has leased planes from Kuwait-based Aviation Lease & Finance Co., expects to be profitable by 2014 and it may list on Ho Chi Minh City’s stock exchange within the next few years, Singh said. Losses before the carrier breaks even are expected to exceed $10 million, he said.

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