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LSCMS Blog

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

July 31, 2012

All A380’s to be grounded for up to 8 weeks until 2013

Filed under: Newsletter — admin @ 8:15 am

Massachusetts based Design News reported last week that European plane manufacturer Airbus announced last week that it will modify its superjumbo A380 by early 2013 to fix crack problems on its wing-rib feet (or brackets) that it claims are created by composite material issues.

The process will ground aircraft currently in service by up to eight weeks with a short-term fix of replacing brackets to take five days to be done on a third of superjumbos in service.

The Airbus retrofit that will cover modification of the 30 A380s it plans to deliver end of year will cost US$330 million. It will involve replacing up to 2,000 brackets per wing with 7010 Aluminum rather than the composite material without creating extra payload, said the report.

For those at assembly line, the re-design will not be approved by the European Aviation Safety Agency until next year and therefore only on those finished aircraft in 2014.

The delayed retrofit will cost the Toulouse-based company in slow delivery and numbers of A380s and its single-aisle A320, said the report.

According to Design News, the A380 cracks and Boeing’s fuselage problems in its Dreamliner 787 design is at fault rather than the composite materials itself

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Freight rate decline attributed to BAF cuts, not supply or demand

Filed under: Newsletter — admin @ 8:11 am

The recent decrease in freight rates has been prompted by the reduction in fuel surcharges rather than a supply and demand imbalance, according to Copenhagen-based consultancy SeaIntel Maritime Analysis.

On average, bunker prices have fallen over the last couple of months by US$150 per tonne, it said, and since the carriers’ bunker adjustment factor (BAF) is based on past bunker price developments, it means that the effect is now beginning to impact the overall freight rate levels.

“In the Asia-Europe trade, the decline in oil prices will result in freight rates declining by US$165 per TEU in total across the months of June, July and August compared to the peak levels in May. In July we have seen rates decline for the past three weeks, however, 26 per cent of the decline is purely due to declining BAF and is hence not a reflection of supply/demand fundamentals or of carriers’ rate discipline. Going from July into August, we expect a further rate decline of $90 per TEU due to declining BAF levels – possibly to be offset by the newly announced rate increases,” said the report.

London’s Containerisation International reported that in the transpacific eastbound trade, the BAF is only adjusted quarterly, hence the sharp decline in oil prices will only be reflected in the BAF in the fourth quarter. Should the present oil prices levels prevail, then the transpacific BAF will decline by $84 per FEU in the fourth quarter

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July 24, 2012

Vietnam worst in wildlife crime trafficking

Filed under: Logistics Social Responsibility,Newsletter — admin @ 11:28 am

The World Wildlife Fund (WWF) has ranked Vietnam as the worst country for wildlife crime in its first ranking survey of how well 23 countries in Asia and Africa protect rhinos, tigers and elephants.

It said Vietnam is the main destination for rhino horns trafficked from South Africa. Even China, which is viewed by many as the world’s largest market for illegal wildlife products was ranked second worst  by the WWF.

Vietnam appears to be at a cross roads as it opens up to international trade and commerce. Highlighted as the country with the most barriers to trade in the Asia Pacific region due to barriers to entry and difficulties in operating, having the worst ranking when it comes to wildlife trafficking is just another area that the country needs to work on, if it intends to improve how it is viewed and ranked on the international stage.

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July 15, 2012

IKEA’s sourcing plans in India delayed – yet again!

Filed under: General,Newsletter,Supply Chain Management — admin @ 8:54 am

Ikea’s plans to establish outlets in India have once again been delayed due to a dispute over the country’s sourcing policies.

The Swedish home furniture company has been challenged by policies that insist it should source 30% of its supplies from small and medium-sized enterprices (SMEs) in India, according to AFP.

The India government is currently looking to relax its local sourcing and brand ownership norms, Times of India reported.

The local paper added that the 30% requirement could apply to costs instead of sales, and would allow retailers to comply over a period of time.

Purchasers would also not be required to buy from vendors with less than $1 million investment in plant and machinery, according to the same news source.

Modifications to its policies have not been confirmed.

The furniture retailer had initially held back its plans at the beginning of the year, citing concerns over local sourcing from SMEs.

In June however, Ikea had finally decided to open up its trademark blue and yellow stores in the country, setting aside €1.5 billion for investment but due to this latest hurdle it has had to delay its plans.

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Vietnam still poses many barriers to trade

Filed under: Education,Newsletter,Supply Chain Management — admin @ 8:49 am

In the 2012 Agility Emerging Markets Logistics Index, Vietnam was highlighted as the only country in the Asia Pacific region where there are significant barriers to entry and difficulties in operating. As Vietnam becomes more mature de-regulated and better connected with the global markets they should be able to move towards the upper quartiles.

It is imperative that Vietnam starts taking the steps necessary to do this if it hopes to continue to attract foreign investment as an alternative to the BRIC (Brazil, Russia, India and China) economies and it is well positioned to do so as it is considered an economy with increasing opportunities for Logistics companies.

Among the findings in this years index:

  • Poor transport top corruption and government policies as the main barriers to business in emerging markets
  • Arab spring countries are “open for business” in the opinion of industry professionals
  • Intra-Asian trade holds the most potential for growth in the near future.
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Asian Manufacturing Awards 2012

The Manufacturing Group of publications at Ten Alps Communications Asia will be hosting the inaugural Asian Manufacturing Awards (AMA) ceremony to recognize products, solutions and services that are enabling excellence in manufacturing performance in the region. There are more than 30 awards across the seven themes of Control & Automation, Manufacturing Software, Packaging Industry, Logistics & Supply Chain, Food & Beverage Industry, Pharmaceutical Industry and Corporate Social Responsibility. The winners will be selected by an international panel of expert judges including the Logistics Society’s President –  Raymon Krishnan, who will analyze and rank the nominations received.

The final winners will be announced at the Grand Awards Ceremony & Gala Dinner on 27 September 2012 at Shangri-La Hotel Singapore. To find out more about the event visit – http://awards.manufacturingasia.co/

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July 13, 2012

Try a Logistics Find-A-Word!

Filed under: Logistics — admin @ 10:12 pm
Make Your Own Word Search
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July 7, 2012

NOL sells headquarters building to raise capital

Filed under: Newsletter — admin @ 8:59 am

Neptune Orient Lines (NOL), a Singapore-based global container shipping and logistics company and one of the core portfolio companies of Singapore inc’s Temasek Group, has announced that the group intends to sell its headquarters building in the Lion City in a bid to free up capital for “strategic investment” without providing further details.

A statement from the group said a selling price had not been settled for the 26-storey, 29-year-old tower at the foot of Alexandra Road in Singapore.

The company said a decision on whether to relocate the 500 staff housed in the building, or to keep them there with the group acting as a tenant, will wait until a buyer is identified.

Commercial real estate firm Jones Lang LaSalle has been tasked with marketing the property for sale, which will be made subject to customary terms and conditions, required regulatory and/or any other approvals.

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World’s top 10 air cargo carriers rated by Digital Supply Chain

Filed under: Newsletter — admin @ 8:54 am

Digital Supply Chain has supplied its reckoning of the top 10 air freight companies in the world.

1) FedEx Express has a fleet of 688 aircraft with more than 37 on order, serving 375 destinations. FedEx Express handles the highest volume of air freight and has the largest dedicated fleet, operating the fourth highest number of aircraft of all airlines. Operating from Memphis, the company has a diverse fleet that includes light aircraft like the Cessna 208 Caravan to the larger Airbus A300. FedEx Express also flies 12 Boeing 777 freighters and FedEx Feeder deploys prop aircraft to feed packages to larger airports from remote locations.

2) UPS Airlines has a fleet of 519, including chartered aircraft with 21 planes on order, serving 766 destinations. Operating out of Louisville, UPS Airlines has dedicated air freight fleet, and is said to be pursuing orders for Boeing 777 freighters.

3) DHL Aviation has a fleet of 75 aircraft and 13 on order, serving 150 destinations. Working out of Leipzig, DHL Air UK, and SNAS/DHL, claims to be the global leader in air freight, carrying 12 per cent of the total worldwide market.

4) Cathay Pacific Cargo has a fleet of 22 aircraft with 18 on order, serving 59 destinations. Operating out of Hong Kong, Cathay has plans to add 10 Boeing 747-8Fs and eight 777Fs.

5) Korean Air Cargo has a fleet of 24 aircraft with 12 on order, serving 116 destinations. Operating out of Seoul-Incheon, it has announced the coming of seven Boeing 747-8F freighters and five Boeing 777Fs.

6) Lufthansa Cargo has a fleet of 18 aircraft and five on order, serving 39 destinations. Operating out of Frankfurt, the German flag carrier has announced that five Boeing 777s are joining the fleet. The company still operates 18 McDonnell Douglas MD-11F freighters.

7) China Airlines Cargo has a fleet of 19 aircraft, serving 38 destinations. Much of China Airlines Cargo operations are shrouded in mystery, but it is often rated in the top 10 worldwide in terms of freight volume. China Airlines Cargo’s fleet is made up of 19 Boeing 747-400F planes and is expected to expand with the addition of Boeing 777s or Airbus A330s.

8) Singapore Airlines Cargo has a fleet of 13 aircraft serving 72 destinations. Singapore Airlines has thorough-going operations throughout Southeast Asia, and has expanded into North America, Europe and the Middle East.

9) Emirates SkyCargo has a fleet of 10 aircraft with 16 on order, serving 21 destinations. Operating from Dubai, Emirates SkyCargo volume increased between 2008 and 2009 when most cargo airlines were in decline. With 10 Boeing 747 8Fs and six more Boeing 777Fs on the way, Emirates SkyCargo is well positioned for the future in air freight.

10) Cargolux has a fleet of 14 aircraft and 14 on order, serving 64 destinations. Operating from Luxembourg, Cargolux is focused in Europe but serves every continent. The company has Boeing 747s. Cargolux, along with Japan’s Nippon Cargo Airlines, will serve as launch customers for Boeing’s 747-8F aircraft.

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July 3, 2012

Japan Airlines fined $1.79 million for price fixing

Filed under: Logistics,Newsletter,Supply Chain Management — admin @ 8:38 am

In yet another case of price fixing in the Logistics industry, the High Court of New Zealand has ordered Japan Airlines (JAL) to pay a NZ$2.275 million (US$1.79 million) fine for air cargo price-fixing regarding fuel and security surcharges in services from Europe, the US and Asia to New Zealand as well as from New Zealand to Asia.

Since JAL admitted the price-fixing charge and cooperated with the Commerce Commission’s investigation, such amount of penalty included a 30 per cent reduction, reported New Zealand’s voxy.co.nz, adding that JAL also consented to pay costs.

JAL is the fourth of the 13 airlines to settle the case with the commission, which sued those airlines in December 2008 for price fixing of fuel and security surcharges on air cargo shipment into and out of New Zealand.

Other airlines that have settled the case are British Airways, Cargolux International Airlines and Qantas Airways.

The commission’s case against the defending airlines will continue in the High Court in Auckland in March 2013, following a first-stage hearing that was held in August 2011.

The defending airlines include Air New Zealand, Cathay Pacific Airways, Emirates, Korean Air Lines, Malaysian Airlines System, Singapore Airlines Cargo, Singapore Airlines and Thai Airways.

Including the JAL penalty, the total amount paid by airlines in settlements has reached NZ$16.375 million.

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