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LSCMS Blog

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

May 31, 2012

Qantas Restructures

Filed under: Logistics,Newsletter — admin @ 8:18 am

Australia’s Qantas Airlines is to be restructured with its international and domestic services to be run as two distinct businesses starting July 1.

The Qantas Group also announced that changes are to be made to its executive team as it enters the next phase of the five-year transformation plan launched in August 2011.

After being restructured over the coming months, Qantas International and Qantas Domestic – currently combined as ‘Qantas Airlines’ – will be formally managed as two distinct businesses. Each will have its own CEO and its own operational and commercial functions. Their financial results will also be reported separately. This change will enable a greater focus on the priorities of turning around the Qantas International business and enhancing the strong Qantas Domestic business, as part of the overall group strategy.

A number of changes will be made to the Qantas group’s executive management under chief executive officer Alan Joyce. This will hopefully help the problematic national carrier improve profitability, service and reliability issues.

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Singapore beats Germany in Logistics Index

Filed under: Newsletter — admin @ 8:15 am

Singapore tops the latest edition of the World Bank’s Logistic Performance Index (LPI) from 155 countries, followed by Hong Kong, Finland and Germany which dropped from top spot with the Netherlands and the US making the biggest leap from ninth rank from 15th two years ago, and UK slipping to tenth.

The logistics gap is widening between those in the bottom 10, all low-income countries with eight in Africa, and the top 10 high-income countries since 2010 following three years of improvement by lower performing countries to improve LP scores. This trend was attributed to logistics reform being assigned less importance in favour of global events like the recession, and the European debt crisis.

For these bottom 10 ranked African countries, all are hindered by conflict and natural disasters affecting access to markets outside of those of independent republic Djibouti and Burundi in central Africa, said the World Bank report.

The impact of this on developing countries, and particularly those that are land-locked and poor, means that the cost of transport and logistics bumps up food prices between 20 and 60 per cent. US imported corn to Nicaragua is marked up by as much as 48 per cent, said the World Bank’s logistics survey ‘Connecting to Compete 2012’.

“Transport and logistics directly affect the price and local availability of food through the performance and resilience of food chains, especially in African and Middle Eastern countries that depend heavily on food imports,” the bank said, cited American Shipper.

But Morocco, which was able to implement a comprehensive strategy to its logistics and connectivity to nearby Europe, has since jumped from 113 in 2007 to 50 in 2012. Other countries improving performance included BRIC nations of China and India with Chile, South Africa, Turkey and the US succeeding ahead of others.

Infrastructure is key to progress for those top performers with logistics services, and customs and border management coming close second and third, said World Bank’s International Trade manager Mona Haddad: “All top performers show strong cooperation between the public and private sectors, and a comprehensive approach in the development of services, infrastructure and efficient logistics.”

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Manufacturing jobs slowly returning to the US

Filed under: China,Newsletter,Supply Chain Management — admin @ 7:52 am

The tide has begun to turn on the flow of manufacturing jobs from the U.S. to China and other low-cost countries, according to a new study from The Hackett Group, Inc.

Some companies are already reshoring a portion of their manufacturing capacity, and this trend is expected to reach a crucial tipping point over the next two to three years, as the total landed cost gap between the two nations continues to shrink, driven in part by rising wage inflation in China and continued productivity improvements in the U.S.

At the moment, China remains a manufacturing powerhouse, with nearly 75 percent of the companies surveyed having some manufacturing capability in China for at least three years, either directly or through contract manufacturers. The Hackett Group estimates that Chinese manufactured exports to the U.S. currently support between 15 and 20 million jobs in China.

Rosemary Coates, President of Blue Silk Consulting, and a columnist for Supply Chain Management Review, said U.S. companies may be tired of exercising the diligence needed to start a business in China.

The Hackett Group’s study offered significant hope for the U.S. jobs market. The study found that companies are exploring reshoring as an option for nearly 20 percent of their offshore manufacturing capacity between 2012 and 2014. This repatriated capacity could roughly offset the jobs that will otherwise move offshore, indicating that the great migration of manufacturing offshore over the past several decades is stabilizing.

Reshoring is expected to become more viable with each passing year, as the total landed cost gap of manufacturing offshore shrinks. The Hackett Group’s research found that the cost gap between the U.S. and China has shrunk by nearly 50 percent over the past eight years, and is expected to stand at just 16 percent by 2013. This trend is largely driven by rising labor costs in China, as well as rising fuel prices globally, which affects shipping costs.

“This is good news for the American worker as growth in the U.S. manufacturing sector keeps more high-paying jobs at home,” said David P. Sievers, Principal, Strategy and Operations Leader for The Hackett Group.

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May 26, 2012

Liquidation of 1st Fleet begins

Filed under: Newsletter,Supply Chain Management — admin @ 9:38 am

Automotive and industrial auctioneer Manheim and insolvency and auction specialists Hymans will be conducting one of the largest liquidation auctions ever held in Australia, on behalf of De Vries Tayeh in the matter of 1st Fleet Group of Companies (in liquidation).

A series of auctions will be held across the country. Commencing in Melbourne, the auction will provide interested parties with the opportunity to secure large fleets of late-model line haul and general freight assets.

The demise of first fleet is just another symptom of what ails the Logistics industry in Australia. Continued service issues with Qantas, high operating and fuel costs, the introduction of the carbon tax coupled with extensive legislation, makes many wonder how the industry and Australia as a whole can compete competitively on a global scale.

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May 25, 2012

5 articles to get you thinking about SCM’s role in Trade Compliance

Filed under: Logistics,Newsletter — admin @ 10:33 am

An important aspect of international trade and goods movement is to ensure that business partners, shipping countries and products being shipped meet the import and export regulations of countries the products are moving through.

This post is a round up of articles that look at the importance of trade compliance to the company and the entire supply chain.

  • Import/export compliance management is part of the fabric of today’s global business world, helping to keep the supply chain and the country secure. February 2012, Inside Supply Management® Vol. 23, No. 1, page 26.
    Excerpt: Your supply management organization has just learned important machine parts from a Brazilian company have been flagged at the Port of Los Angeles for intensive investigation by U.S. Customs and Border Protection (CBP). You’re then notified that a shipment of the company’s latest product to a new customer in Hong Kong is being delayed because all the licensing requirements have not been met. If these supply management headaches sound familiar, welcome to the complicated, ever-changing world of import/export compliance. [Read the full article]
  • White Paper: Three Common Global Trade Compliance Deficiencies that Affect Your Bottom Line. Supply Chain Management Review, May 15, 2012.
    Excerpt: Today, the benefits of sourcing from low cost countries and selling into new foreign markets are driving the vast majority of enterprise-class companies to go global. However, many of these companies are still making due with sub-standard global processes and technologies borrowed from domestic organizations. [Download the full white paper – information required in exchange for free download]
  • Trade compliance is not good for trade, or is it? Supply Chain Asia, Accessed May 23, 2012.
    Excerpt: In a recent news, a shipper trade facilitation group claimed that trade compliance requirements are holding back international trade. The Sage group, which includes members such as Sony and Pfizer, claimed traders should be given the right to control their own trade compliance, rather than have it controlled by governments. It described current practices as “costly, inefficient and unnecessarily bureaucratic”. [Read the full article]
  • International Trade Compliance: 6 Basic Products Questions A Company Should Answer (Part I), Corporate Compliance Insights, Oct 10, 2011,  ROBERT SHAPIRO, TERESA POLINO, JAMES SLEAR & SEAN MCGOWAN.
    Excerpt: The touchstone of any international trade compliance program is the development of a strong and accurate database of the company’s products, services and technology. The ability to gather this information is central to determining classification for export and import purposes, export control requirements, origin and customs valuation.  [Read the full article]
  • International Trade Compliance: 6 Basic Products Questions A Company Should Answer (Part II)Corporate Compliance Insights, Oct 12, 2011,  ROBERT SHAPIRO, TERESA POLINO, JAMES SLEAR & SEAN MCGOWAN.
    Excerpt: Following on from part 1, where the Thompson Coburn team explored the first three questions that outline the process of gathering the information necessary to understand a product for purposes of international trade compliance. This post shares the final three, where the same methodology may also be used to evaluate supply chain, pricing, and customer and supplier issues. [Read the full article]
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May 23, 2012

Manchester United’s Champ19ns Trophy Tour is Championed by DHL

Filed under: Logistics,Newsletter — admin @ 10:14 am

DHL delivered Manchester United’s Champ19ns Trophy Tour to Singapore for an exclusive event with customers.

Denis Irwin and Paul Parker were the Manchester United legends-of-honor at the Champ19ns Trophy Tour event hosted by Jerry Hsu, chief executive officer, DHL Express Asia Pacific, at Shangri-La Hotel Singapore.

A total of 120 guests had the opportunity to meet the legends up close and personal, receive signed autographs and memorabilia, as well as gain insights into what it’s like to play for the most popular club in the world, Manchester United.The guests and DHL staff also had the opportunity to have their photographs taken with one of the most coveted prizes in the world of football – the English Premier League trophy.

“Singapore is one of the five South East Asian stops on Manchester United’s DHL Champ19ns Trophy Tour. The arrival of the trophy and the Manchester United legends has been the talk of the town for many weeks and had created much anticipation amongst our customers and staff. We are glad to play a part in bringing this special moment to the fans here in Singapore,” Yasmin Aladad Khan, senior vice president for DHL Express, Southeast Asia, said.

[Read More…]

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May 14, 2012

$799 MacBook Air: It’s that Apple supply chain again

Filed under: Newsletter,Supply Chain Management — admin @ 5:55 pm

Apple is rumored to have a $799 MacBook Air in the works and you can thank the company’s supply chain clout should that price come to pass.

In the end, Apple’s pricing has everything to do with its supply chain. MacBook Air rides with solid-state storage and Apple has those supplies locked up. After all, the iPad, iPhone and iPod Touch use a lot of Flash supply. Meanwhile, Apple can call its shots with screens too.

It’s quite possible that Apple is just passing along some of its savings on the MacBook Air bill of materials. In any case, a less expensive MacBook Air is going to squeeze the ultrabook market.

[Read More]

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RFID Technology give SME logistics companies the edge

Filed under: Logistics,Newsletter — admin @ 5:53 pm

Technology makes the difference for the logistics sector, which demands efficiency and needs an edge to overcome the manpower crunch.

The technology necessary to provide this edge is not cheap, and requires time and money to implement.

One firm, which decided to take the initiative to be outstanding from the competition, is Mr Koh’s Addicon. Addicon serves the garment industry and medical device companies, and wanted to be able to do “big volumes without mistakes” for better margins.

Five years ago, Addicon splashed $300,000 to enter a new technological age of radio frequency identification tags (RFIDs), which look like simple rubber tags, and are attached to the wooden pallets on which boxes of goods are loaded.

The tags contain data that details the contents of boxes, strings of product and batch numbers, destination and origin information. This information is available 24/7, and is detected by Addicon’s wired up warehouse at Old Toh Tuck Road.

It was a big change from the use of barcodes, where a worker had to scan each box in a tedious effort to account for its location.

[Read More]

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PwC survey show optimism in Australia despite carbon tax challenges

Filed under: Newsletter — admin @ 5:39 pm

Finding competent staff, low margins and cash flow issues lead the key challenges for Australian business, according to the Private Business Barometer released by Pricewaterhouse Coopers (PwC) today.

Interestingly, with 64 percent of those surveyed expecting the carbon tax to impact on their businesses, 42 percent of those believe it will come through increased transport costs, followed by 22 percent who expect an increase in the price of products and services.

PwC quotes Suzie Wright, CEO of machinery attachments firm Digga Australia, as saying:” “The carbon tax is going to drive a lot of our supply chain offshore.

“As much as we want to use our local suppliers, product that’s being made here is going to be affected through price increases on transport, fuel and materials.”

[Read More]

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Damco Joins Cargo 2000

Filed under: Newsletter — admin @ 5:36 pm

Already representing over 70 percent of the global air cargo market, Cargo 2000’s quality management system has been strengthened further by Damco’s decision to join the group.

Cargo 2000 now has over 80 members representing the airline, freight forwarding, ground handling, road transport, IT and airport sectors, all working to improve the quality of air cargo by implementing Cargo 2000’s Master Operating Plan. It defines an industry standard process for moving goods from the door of the shipper to the door of the consignee with shipment planning and measurement systems which pro-actively monitor progress and alert operators to deviations to the plan. The program also generates the data needed to drive the quality management process.

[Read More]

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