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LSCMS Blog

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

April 28, 2012

Industrial Property Industry looks to Logistics [Australian update]

Filed under: Newsletter — admin @ 12:14 pm

LOGISTICS has clearly emerged as the dominant driver of industrial property markets in Australia, with increasing fuel costs being one of the drivers that is influencing the decision on where to site warehouses, according to a new report.

Industrial property is also increasingly characterised by the trend towards fewer but larger central distribution centres, supported by multiple smaller regional centres for cross-docking and rapid turnaround of goods. Cross-docking is where incoming goods are already packaged for the customer and re-routed without being stored.

The increasing complexity of international supply chains has resulted in this trend, said the report, Supply Chain Trends: Implications for Industrial Property, by Colliers International and Logiworx.

The report said increasing globalisation and consolidation of mass manufacturing in emerging regions – Asia and Eastern Europe – meant businesses had to manage their supply chains better. This had resulted in consolidation into fewer and larger distribution centres, which were traditionally a main warehouse or storage centre.

The report found that from 2009-2011, the size of an average property transaction had grown from 21,000 square metres to 27,000 sq m. Over the past 10 years, the new role of cross-docking had emerged at smaller, downstream centres.

Source: SMH

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April 23, 2012

Supply Chain Management Dictionary

Filed under: Education,Newsletter,Study & Reference — admin @ 7:29 pm

The most popular search result when you google “Supply Chain dictionary” on the internet is the LSCMS website. Readers will be pleased to know that more than 5,000 terms and definitions are available FREE, off the Logistics & Supply Chain Management Society website at – www.lscms.org

This resource took a number of years to compile and is an excellent tool for students and professionals who want to clarify the meaning of a term or word. We strive to constantly upgrade the content and welcome feedback and contributions.

We are also looking for sponsors who want to work with us to print hard copies of this online resource. Whilst on-line searches are getting more and more popular, we do from time-to-time receive enquiries as to whether a physical, hard copy of this glossary is available. If you are interested to find out how to go about supporting or sponsoring this initiative, please contact the Secretariat at peter@lscms.org

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Cooking oil powers Qantas aircraft

A Qantas flight between Sydney and Adelaide on April the 13th used a 50-50 mix of conventional fuel and refined cooking oil. The biofuel costs far more than conventional fuel, partly due to its importation from the United States but Qantas says it is absorbing the one-off cost because it is keen to highlight the need for an Australian biofuel source, at a time when airlines and passengers around the world are dealing with high jet fuel and carbon emission costs.

John Valastro of Qantas says the flight is a commercial first in Australia. “It’s actually really significant because it’s the first commercial flight to be powered by sustainable aviation fuel in Australia and that’s a big step for this country,” he said. He says the flight will produce far less carbon emissions than if conventional jet fuel were used. “We’re talking about a 60 per cent reduction in the overall life cycle of the fuel, so that’s a substantial improvement,” he said. The biofuel component of the fuel used for the flight is from refined cooking oil.

Biofuels are sometimes criticised for cutting into potential food supplies but Qantas says it has used a product that is not a food crop. The oil came from and was refined in Houston before it was shipped to Australia. It has cost more than four times an equivalent flight using normal fuel, partly because of the shipping distance involved. Mr Valastro went on to say that passengers are not paying a surcharge. “We’re actually using this opportunity to highlight what needs to be done, getting people on board,” he said.

Aviation industry analyst Tom Ballantyne says Qantas and other airlines want governments to invest in the biofuels push. “We know we can make them, we know they’re exactly the same as jet fuel and have absolutely no impact on the operation of the aircraft,” he said. “The trick is making enough and building the infrastructure to provide that. “What is actually needed is money. A lot of the big airlines’ argument is that governments should invest money in the refineries which are required to produce these biofuels. They argue that very strongly, but so far many governments have been a bit slow in coming forward.” The hope is that biofuels will eventually cost about the same as current jet fuel. Peter Zurzolo heads the Future Farming Co-operative Research Centre. At Narrogin, south-east of Perth, he and others are trialing whether the common mallee eucalypt is a viable biofuel source. “Not only is it a common tree but it’s well understood. In WA alone, we know there’s about 13,000 hectares on about 1,000 farms,” he said. “We’re providing what we’re hoping is a long-term sustainable and regionally-based feedstock supply that can be competitively grown into different processing units, hopefully around regional Australia,” he said.

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April 22, 2012

Australian carbon tax to impact operators in 2014

In a country already plagued with high costs, trucking operators will pay almost 7 cent more for diesel from July 1, 2014 under the Federal Government’s carbon tax package.

Unveiling the reform recently, Prime Minister Julia Gillard announced that the trucking industry would be exempt for two years when the tax begins on July 1, 2012.

The scheme will begin at $23 per tonne of carbon, rising to $24.15 the following year and $25.40 in July 2014 before moving to a market-based emissions trading scheme in 2015.

The $25.40 tax will increase diesel prices by 6.85 cents through a reduction in the fuel tax credit rate, which will continue to decline as the cost of carbon increases.

Once implemented, trucking potentially faces a double whammy on diesel prices from July 2014 because the fuel tax credit is reduced at the beginning of each financial year to account for government expenditure on the road network.

These costs could be further compounded by higher wages as CPI will move upwards as cost of food and other items will increase. Overall sad news for the competiveness of Australia’s trucking industry.

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April 21, 2012

Panalpina CEO admits un-competitive deals

Filed under: Logistics,Newsletter — admin @ 1:48 pm

Swiss forwarding giant Panalpina has admitted that the sector has earned its reputation for anti-competitive behaviour, but argues that the image is outdated, according to London’s Financial Times.

Panalpina, the 4th largest forwarder in the world after DHL, K&N and Schenker, together with 13 others were recently fined EUR169 million (US$225 million) by the European Commission for participation in cartels in international air freight forwarding services.

Panalpina was fined EUR46.5 million, while Kuehne & Nagel, also based in Switzerland, was told to pay EUR53.7 million. Deutsche Bahn and subsidiary Schenker were fined 34.9 million. The various companies operated one of the international cartels based on meetings at an unpretentious Italian restaurant near London and used code words like “fresh marrow” and “asparagus” to disguise illegal surcharges.

In an interview, Panalpina’s chief executive, Monika Ribar, admitted that her company and its peers had a record of cartels and other anti-competitive practices. “It is true our industry has gained a poor record, based on problems in the past. But companies have learned to deal much more seriously with the situation in recent years.”

Mrs Ribar argued change had been triggered by much tougher laws in Europe and the US, and a greater emphasis on ethics among freight companies.

She pointed out that the latest EU fines reflected past problems that had taken years to investigate fully. “The EU Commission has taken five years to get somewhere. The whole story happened between 2000 and 2005. Our company has changed dramatically in the meantime.”

Panalpina, has had various brushes with regulators. In addition to the latest European crackdown, the group has previously paid almost $82 million in a deferred prosecution agreement under the US Foreign Corrupt Practices Act, after probes into its Nigerian activities prompted it to pull out of the country.

Panalpina has also lost business from government departments and big companies whose policies forbid them from trading with partners sanctioned for anti-competitive or corrupt practices.

“Now as a chief executive in freight you deal more and more with lawyers than with your core business”, said Mrs Ribar. Among the changes she has instituted in the company include elevating compliance, with the appointment of a chief compliance officer reporting directly to the CEO, creating much bigger local compliance teams and increasing focus on corporate ethics.

“Companies have learned to deal much more sensibly with the situation,” Mrs Ribar said. “At Panalpina, we haven’t left a single stone unturned in re-examining the way we do business.

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Singapore challenges Shanghai as world’s busiest port

Filed under: Newsletter,Supply Chain Management — admin @ 1:30 pm

The ports of Singapore and Shanghai are again neck and neck for the world’s top container port title with the latest first quarter figures putting them each at 7.5 million TEU.

Singapore had the title until 2010 when its container throughput was eclipsed by Shanghai’s. But in March alone, Singapore’s box volumes reached 2.6 million TEU, compared with 2.5 million TEU in the corresponding month last year.

Shanghai container volume in the first quarter was slower year on year, according to the Shanghai International Port Group (SIPG), which did not divulge comparative growth figures.

Chinese shipping industry officials have warned of slowing box throughput at Shanghai port this year, forecasting that turnover in the world’s largest container port will be hurt by sluggish trade because of the European debt crisis, weak overseas demand and the development of alternative ports in China.

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April 20, 2012

Reinventing your business with RFID solutions

Filed under: Events — admin @ 10:48 am

RFID World Asia provides the opportunity to do business with organisations who are looking to improve manufacturing & operational efficiency, supply chain efficiency, increase productivity, minimise theft and improve customer service, through the adoption of RFID technologies.

  • Exhibition – leading RFID technology solution providers from all over the world
  • Seminars – Over 60 FREE educational seminars across 3 days.
  • Conferences – 1 dedicated conference
  • Awards – Best RFID Project Implementation & Most Innovative RFID Application categories at the 1st Smart Card Awards Asia

RFID World Asia exhibition entry is free – register online

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April 13, 2012

BDP not for sale

Filed under: Logistics,Newsletter — admin @ 9:02 am

Although rumours have been circulating over the future of US-based global forwarder BDP International, the company has moved quickly to deny it is up for sale. A news story had earlier appeared on Reuters quoting a source close to the company as saying it was looking for a buyer.

However, the Philadelphia-headquartered company has issued a rebuttal, saying that BDP’s ownership, the Bolte family, believes in the company’s future and is exploring opportunities with private investors to raise capital. The statement went on to say that it was seeking additional funds that would enable it to build on its technology and expand its global presence. BDP has revenues in the region of $1.6bn.

Management commented that, “The infusion of capital through outside investment is a normal course of activity for privately owned companies. In essence, our owners are working to make BDP a stronger and even more effective force in the international logistics sector for our customers. BDP will continue to be owned and operated by the Bolte family and incumbent management team.”

Over the past couple of years, BDP has followed a strategy of expansion, developing a presence in key emerging markets as well as in Europe. It positions itself as a specialist in the chemical industry, and on the back of the sector’s development in markets in Asia and the Middle East, it has established a series of joint ventures and partnerships; including in India, Bahrain and Vietnam. Over the last 6 – 12 months BDP has seen quite a high number of senior management changes in it’s Asia Pacific operations.

The company has preferred an asset-light, low risk approach to global growth, seeking to build partnerships with established local companies, rather than to develop its own operations. Despite this, BDP has not totally eschewed acquisition, buying companies in Germany, France, Belgium, Spain and the UK in the past decade.

Mergers and acquisitions activity in the transport and logistics industry is recovering following the Eurozone crisis in 2011. According to Thomson Financial, deals in the first quarter of 2012 were at a higher level than at any point in 2011. With balances high and a more certain economic environment predicted, further consolidation in the express and logistics industry is likely.

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April 9, 2012

Apple and Microsoft at war with Motorola

Filed under: Newsletter,Supply Chain Management — admin @ 10:00 am

Apple and Microsoft have lodged a patent war against Google’s Motorola Mobility, resulting in the European Commission launching two antitrust investigations.

Apple and Microsoft has accused the American telecommunications company of blocking product competition with the unfair use of its patents. Both tech giants alleged that Motorola is abusing its market position by filing lawsuits against them, AFP reported.

Microsoft and Apple accused Motorola Mobility of not being fair, reasonable and non-discriminatory in licensing its standard essential patents on competitors.

The European Commission has since acted on these accusations, opening two formal investigations on Motorola to check if it has indeed abused its dominant market position by violating competition rules.

In a press statement, the Commission said it will investigate Motorola “by seeking and enforcing injunctions against Apple’s and Microsoft’s flagship products such as iPhone, iPad, Windows and Xbox on the basis of patents it had declared essential to produce standard-compliant products.”

“The commission will assess whether Motorola has abusively, and in contravention of commitments it gave to standard-setting organisations, used certain of its standard-essential patents to distort competitions,” it added.

A similar investigation was conducted with Samsung in January this year

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LogiChem Asia 2012

Filed under: Education,Events,Newsletter,Singapore,Supply Chain Management — admin @ 9:03 am

The Logistics Society will this year once again be a supporting organisation of LogiChem Asia.

LogiChem Asia is the only event specifically for those working in the chemical supply chain area. Featuring over 250 attendees, 70 speakers, 14 hours of roundtables and five streams, LogiChem Asia is the only event around able to give you the in-depth chemical specific supply chain analysis you need.

Eddy Setiawan, President, South East Asia of Dow Chemical will open our focus day on sustainability and discuss how sustainable supply chains impact directly on your bottom line.

LogiChem Asia will also devote individual roundtables to China, India, Vietnam, Indonesia, Singapore, Thailand and so much more.

The entire Asian chemical logistics supply chain will be here. A few speakers are listed below, for more check out our website www.logichemasia.com.

· Eddy Setiawan, President, South East Asia, Dow Chemical

· Berthold Alfes, Managing Director and Senior Vice President of Supply Chain Center APAC, Bayer MaterialScience Ltd

· Mary Scheibner, Global Supply Chain Director, BASF

· Adam Balarin, Vice President, Supply Chain, Unilever Vietnam

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