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LSCMS Blog

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

March 28, 2012

SIA fined US$3.1 million

Filed under: General,Newsletter,Singapore — admin @ 9:09 am

South Africa’s Competition Commission has fined Singapore Airlines ZAR25.1 million along with South African Airways ZAR18.8 million (US$2.35 million) for price-fixing on routes between Johannesburg and Hong Kong.

The fine settles another investigation into South African Airways, which was accused of collusion over domestic fares and international freight rates during the 2010 football World Cup, citing a statement from the anti-trust authorities, reported Agence France-Presse.

“SAA has offered its full cooperation to the commission in its ongoing investigations and prosecution of both the matters,” the statement said.

“Similarly, Singapore Airlines undertook to do the same with regards to the Far East matter.”

No separate ruling was made against South African Airways in the World Cup enquiry, however, the Competition Commission was cited as saying that the fine will settle the matter.

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March 21, 2012

Amazon buys mobile-robotic solutions provider

Amazon.com, Inc. has announced that it has reached an agreement to acquire Kiva Systems, a developer of mobile-robotic solutions that automate eCommerce order fulfillment and warehouse operations.

“Amazon has long used automation in its fulfillment centers, and Kiva’s technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow,” said Dave Clark, vice president of global customer fulfillment for Amazon.com. “Kiva shares our passion for invention, and we look forward to supporting their continued growth.”

“For the past 10 years, the Kiva team has been focused on creating innovative material handling technologies,” said Mick Mountz, CEO and founder of Kiva Systems in a statement. “I’m delighted that Amazon is supporting our growth so that we can provide even more valuable solutions in the coming years.”

Following the acquisition, Kiva Systems’ headquarters will remain in North Reading, Mass.

Under the terms of the agreement, which has been approved by Kiva’s stockholders, Amazon will acquire all of the outstanding shares of Kiva for approximately $775 million in cash, as adjusted for the assumption of options and other items. Subject to various closing conditions, the acquisition is expected to close in the second quarter

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UPS buys TNT!

Filed under: Logistics,Newsletter,Supply Chain Management — admin @ 7:34 pm

UPS has agreed to pay US$6.77 billion in cash to acquire TNT Express about one month after TNT Express shareholders rejected UPS’ earlier offer of $6.4 billion.
The offer would create a per-share price of slightly less than $12.50. But the deal is subject to approval from European anti-trust regulators, reported Rosewell, Georgia’s Air Cargo World.

“The combination of UPS and TNT Express will create a global leader in the logistics industry, with annual revenues of more than EUR45 billion [US$60 billion] and will deliver significant benefits for the shareowners, customers, employees and other stakeholders of both companies,” said UPS.

The deal has been approved by the supervisory and executive boards of TNT Express and PostNL, with the latter agreeing to tender its 29.8 per cent stake to UPS.

The deal is expected to help UPS gain a bigger share of business outside the US as 36 per cent of total group revenues will be generated outside the US, up from UPS’ current 26 per cent.

UPS said it will finance its offer with $3 billion in cash from its balance sheet and the remainder will come from new debt arrangements.

UPS expects its acquisition to boost profits in the first year and realise annual pretax cost savings of between $525 million and $725 million by the end of the fourth year after the deal is closed.

The combined company will control about 17.3 per cent of the European express market, placing it just behind Germany’s DHL Express.

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TNT deploys electric vans in Hong Kong

Filed under: China,Newsletter,Supply Chain Management — admin @ 7:23 pm

In a great marketing coup, TNT has launched in Hong Kong two 3.5-tonne electric delivery vehicles, making the company the first player in the territory’s express market to have electric vehicles in operation with “zero emission” as the most significant feature of the electric cars.

“As a good corporate citizen, TNT is working together with customers, suppliers and subcontracts to continuously improve our overall CO2 efficiency to fight against climate change,” said TNT China express chief Peter Langley. “We are proud to play a leading role in spearheading electric vehicles in Hong Kong.”

TNT’s current project is being supported by the Pilot Green Transport Fund under the Hong Kong Government’s Environmental Protection Department (EPD).
“We applaud the Hong Kong Government’s Environmental Protection Department (EPD) for providing support to TNT to trial electric vehicles in the territory,” added Edward Lau, managing director of TNT Express Hong Kong.

“The transport sector can make a significant difference by adopting new technology to reduce carbon emissions and roadside air pollution. We hope that TNT’s innovative initiative will inspire other companies to follow suit to do their part to improve Hong Kong’s air quality,” said an EPD statement.

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Soaring freight rates cripple Vietnamese exporters

Filed under: Newsletter,Supply Chain Management — admin @ 7:20 pm

Steep increases in freight rates and surcharges by shipping lines on key trade lanes are forcing Vietnamese exporters to suffer profit loss, reports VietNamNet Bridge news agency.

As of March 1 container rates will increase by more than US$500 per TEU in freight for those containers to the Middle East, an increase of $400 more from April 1. Rates for freight to America will increase by $300 per TEU from March 15 and $400 per TEU from May 1.

Hapag-Lloyd has raised its shipping fees for routes to South America by $600 per TEU and routes to Panama and Caribbean by $560 per TEU and $800 per FEU. Hong Kong’s OOCL will increase its rates $600 per TEU on its routes from Vietnam to North European and Mediterranean countries along with CMA CGM, Maersk and NYK increasing rates by $800 per TEU to $1,000 per TEU.

Crippling freight rates are biting into profits for exporters of fresh fish companies like Hung Vuong Seafood Company already paying as much as $10,400 in additional costs for 13 containers of its frozen tar fish products shipped to Europe, America and South America on a monthly volume of 500 TEU.

This works out as a shocking $800 to $1,000 per container in fees which adds to per kilo costs for the tar fish products, said its general director Duong Ngoc Minh, the news agency reported.

Port fees on services and surcharges are up, accounting for 70 per cent of a sum for one garment business with more costs loaded on trailer transit from port to factory from March 10 at VND200,000 (US$9.60) to VND300,000 per trailer.

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March 15, 2012

Carriers implement RRP’s and GRI’s

Filed under: Logistics,Newsletter,Supply Chain Management — admin @ 5:03 pm

Since February we have seen a number of carriers embarking on RRP’s (Rate Restoration Programmes) and GRI’s (General Rate Increases). The feedback from shippers have understandably been negative but the response from carriers have been that current rates, given increased bunker and operating costs is untenable to long term operations.

What will happen next is hard to say. The indication is that we can expect to pay more for Asia Pacific origin cargo from March along these lines

  • Asia – India – $150 – $300 per container
  • Asia – Australia – $300 – $600 per container
  • Asia – Middle East – $50o per container
  • Intra-Asia – $50 – $100 per container
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March 13, 2012

Check out our Facebook Page for news and jobs!

Filed under: Logistics,Resources — admin @ 6:16 pm

We post news and job information to our Facebook page.

If you are interested in keeping up with the latest and greatest from the LSCMS via Facebook, point your QR code reader at the image on the right, or click to go straight through to our page.

We post job vacancies, news from around the region, and information on upcoming events on our Facebook timeline.

Stay informed!

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S’pore Government Commits $42 Million To Improving Productivity Of Logistics, Transportation Industry

Filed under: Logistics,Supply Chain Management — admin @ 6:10 pm

The National Productivity and Continuing Education Council (NPCEC) has endorsed a $42 million (US$33 million), five-year productivity roadmap to lift the long term productivity of the logistics and transportation industry.

The logistics and transportation industry is an important economic sector, contributing eight percent of Singapore’s GDP in 2011 and employing almost 205,000 workers, and as such companies in the logistics and transportation industry can look forward to greater government support for productivity-driven growth.

The National Productivity and Continuing Education Council (NPCEC) has endorsed a $42 million (US$33 million), five-year productivity roadmap to lift the long term productivity of the logistics and transportation industry. As logistics is a key enabler to other industries, these efforts will also boost our productivity in both our manufacturing and services sectors.

Drawn up by the Singapore Economic Development Board (EDB) and SPRING Singapore in consultation with companies, partner agencies and industry associations, the roadmap focuses on two key areas and would increase the value-added (VA) per worker in select segments of the logistics and transportation industry by about 30 percent to $130,000 by 2015.The two key areas are:
(i) Enhancing Supply Chain Management Expertise
(ii) Enhancing Innovation and Efficiency at Enterprise and Industry Levels

You can read more about this at the LSCMS endorsed magazine: LIA.

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March 8, 2012

Dell opens Supply Chain Institute

Filed under: China,Education,Newsletter,Study & Reference — admin @ 7:08 am

In what seems to be a trend in large organisations nowadays, Dell has jumped on the bandwagon and set up its Dell Supply Chain Management Institute in Xiamen, China with the claim to improve the country’s supply chain management practices.

The school will work with Tianjin University and Antai College of Economics & Management of Shanghai Jiaotong University, focusing on theories, concepts and challenges faced in supply chain management.

Charles Cheung, managing director of Dell China and executive director of its global supply chain operation, told China Daily that the new institute will generalise the company’s supply chain management cases into theories and provide supply chain management cases for research.

Dell’s supply chain school will focus on supply chain management, corporate strategies, application of information system models, partnership on the whole supply chain, change management and risk control.

“The cooperation between Tianjin University and Dell marks a good example of the combination of theory and practice in China’s supply chain field, and will actively promote the improvement of supply chain management in China,” Zhao Daozhi, director of the Institute of Modern Manufacturing and Logistics at Tianjin University, told China Daily.

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March 7, 2012

Aussies choose Air NZ over Qantas

Filed under: General,Newsletter — admin @ 8:35 am

Not surprisingly, Air New Zealand has trumped Australia’s own national airline in a survey of customer satisfaction across the ditch.

It was named the International Airline of the Year in the inaugural Roy Morgan Customer Satisfaction Awards in Australia last week.

Roy Morgan surveyed nearly 4000 people who’d used an international airline in the previous 12 months. Air New Zealand won more months than any other airline in 2011 and achieved an average satisfaction rating of 89 percent.

Air New Zealand Australia general manager Cam Wallace says the award is a great honour.

“For years we’ve pursued a strategy that recognises that our people rather than planes are our most valuable asset and it’s really pleasing to see that acknowledged by the people who fly with us.”

He says the award reflects the company’s commitment to delivering customers a uniquely Kiwi experience in what is one of the world’s most competitive industries.

Roy Morgan Research chief executive Michele Levine told news.com.au Qantas also rated highly in the international category, despite the negative publicity surrounding November’s grounding.

“In 2011 we saw pan-Asian airlines performing well with Cathay Pacific, Malaysian Airlines and Singapore Airlines performing well throughout the year,” Ms Levine says

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