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LSCMS Blog

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

November 29, 2012

Vietnam to limit operations of foreign ships

Filed under: Newsletter — admin @ 11:15 am

In yet another move that makes outsiders question the openness of international trade and future viability, it was recently reported by Vietnam News Brief Service that Vietnam’s Ministry of Transport has issued a document to temporarily halt foreign ships’ operations in the container transport market to support local firms which are losing in the domestic market.

Under this decision, Vietnam will suspend licensing for foreign container ships on local routes in three or six months from January 1.

About 20 foreign ships with a total carrying capacity of 500,000 DWT will be affected by this new policy.

The ministry’s decision is expected to create opportunities for the local ship fleet to regain market share in the local container-transport segment, which generates  about US$47.6 million for foreign ships.

In the past, Vietnamese ships neglected the domestic market and actively participated in the flourishing international transport market. To meet the demand in the domestic market, the ministry had to allow foreign ships to penetrate the domestic maritime transport market. The international transport market has however waned due to the prolonged global economic crisis, so Vietnamese ships are returning to the home market.

According to the Vietnam Maritime Administration, the country’s container shipping fleet has 24 vessels, some of which are capable of carrying 13,000 DWT. Only 50 percent of their carrying capacity is being utilised.

The domestic ships are capable of replacing the foreign ships operating on domestic routes, including at important ports such as Haiphong, Cai Lan, Sai Gon Port and  Cai Mep-Thi Vai however, replacing the foreign ships with local ones is not that easy. Foreign ships are operating effectively in the local market and have advantages that local ships do not possess.

Aside from competitive pricing, the service quality of the foreign-flagged ships are superior to domestic vessel operators. Due to these limitations, many cargo owners have doubts about the ministry’s  policy to temporarily halt foreign ships’ operations in the domestic market.

Many shippers are concerned about the capacity of Vietnamese ships to ensure delivery of cargo on schedule. Others believe that Vietnamese ship owners might eventually have a market monopoly, which could lead to an erosion of quality of services

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November 21, 2012

IKEA uses forced labour to manufacture products

Filed under: Logistics Social Responsibility,Newsletter — admin @ 5:50 pm

IKEA was recently identified as having used inmates in correctional facilities in the former communist country of East Germany. An audit by Ernst and Young, which was commissioned by IKEA, found that some IKEA suppliers in the 1980’s used prison inmates as forced labor in the manufacturer of IKEA products.

The E&Y audit found that state-owned companies in East Germany often used prisoners as workers because of labor shortages and that IKEA purchased items from these companies. The audit suggested that IKEA did raise concerns with the Eat German government about the use of forced labor, but no action was taken. The audit has also raised the question that some of the manufacturing on the items sold to IKEA was subcontracted to Cuban manufacturers

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Failed US$1 Billion Logistics Project

Filed under: Newsletter — admin @ 5:44 pm

It was reported on About Logistics / Supply Chain that the US Air Force has cancelled its its ambitious next generation logistics system, called the Expeditionary Combat Support System (ECCS) program after spending $1 Billion on its implementation. Seven years ago, the Air Force hired Computer Sciences Corp (CSC) to develop the ECCS which was supposed to streamline the USAF supply chain and providing an integrated approach for buying, moving and managing equipment, thus saving billions of dollars.

So fast forward seven years to 2012 and the USAF decides to fire CSC after the USAF reviews the progress and declares that the software gives “negligible” value, which doesn’t sound like it was worth a billion dollars. The USAF said that if it was to continue with the project it would have only got 25 percent of the original requirements for almost double the original contract price, $628 million. In addition it would have not implemented anything until 2020, six years after the project due date.

The ECCS project was to retire more than 400 legacy systems, according to a CSC, and was to support 250,000 users, managing $33 billion in assets at over 600 locations globally. Instead the USAF will keep using these 400 or so aging systems for the foreseeable future, with no replacement options in sight.

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November 17, 2012

16,000 TEU vessel calls at Hong Kong

Filed under: Logistics Social Responsibility,Newsletter — admin @ 9:25 am

The world’s biggest container ship, the 16,000-TEU CMA CGM Marco Polo, has called at Hong Kong before sailing on to Shenzhen’s Chiwan and Yantian terminals and then to Malaysia’s Port Kelang before setting off for the Middle East and Europe.

Built by Daewoo Shipbuilding and Marine Engineering (DSME) in South Korea, this giant of the seas is 396 metres long, 54 metres wide and has a draft of 16 metres. The vessel sails under the British flag.

This is the first of three 16,000-TEU vessels that are named after great explorers.

The ship is being deployed on the French Asia Line (FAL1) service that calls at Ningbo, Shanghai, Xiamen, Hong Kong, Shenzhen-Chiwan, Shenzhen-Yantian, Port Kelang, Tanger, Southampton, Hamburg, Bremerhaven, Rotterdam, Zeebrugge, Le Havre, Malta, Khor Al Fakkan, Jebel Ali and back to Ningbo on January 23.

The FAL1 operates the largest vessels in the CMA CGM fleet and offers its customers a fixed-day, weekly connection between Central/South China and Northern Europe. The direct service to Southampton and to Hamburg also offers European importers fast transit times.

The FAL1 is part of a global network of eight services connecting Asia to Europe Atlantic, operated by 29 vessels from 11,400- to 16,000 TEU.

Nicolas Sartini, group senior vice president Asia-Europe lines, said: “It is with great pride that the CMA CGM Group launches this new vessel, which is the largest in the world. It shows the expertise of the group’s teams, who are able to handle not only the very technical piloting of the ship but also its commercial operations. Our entire network of 400 agencies all around the world is active to ensure the successful launching of this ship.”

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INDUSTRY LEADERS DEBATE PORTS, LOGISTICS AND SHIPPING on ASIA EUROPE TRADE in Hong Kong

Filed under: China,Logistics,Newsletter,Supply Chain Management — admin @ 9:22 am

At the heart of world trade, senior executives from the world’s leading shipping lines, cargo owners and logistics companies recently gathered for a Maritime Leadership Forum in Hong Kong to explore challenges and opportunities on one of the world’s largest trade routes, Asia-Europe.

Convened by Mark Millar, managing partner of M Power Associates and sponsored by DP World London Gateway, the forum gathered industry thought-leaders for an exclusive dinner event in the historic Gun Room at the Royal Hong Kong Yacht Club.

The select group of over 30 senior executives included cross-sector representation from major cargo owners, forwarders and carriers such as DB Schenker, DHL, Hapag-Lloyd, Home Retail Group Asia, “K” Line, Kingfisher Sourcing, Kuehne + Nagel, Maersk, MOL, OOCL and Pentland Asia, as well as several other industry leaders.

The participating freight forwarders and beneficial cargo owners together represented over 500,000 TEU on the Asia-UK trade, which provided all attendees with an excellent insight into industry challenges facing global leaders.

Guests enjoyed presentations from eminent speakers, followed by knowledge sharing and open discussions exploring the key trends, developments and challenges facing companies involved in Asia Europe trade, which is undergoing massive change as ships dramatically increase in size.

In a presentation entitled Navigating Stormy Waters, leading industry analyst Dr Jonathan Beard articulated “with weakness in all short-term leading indicators, compounded by economic and political uncertainty within the Eurozone, we expect to see weak container volume growth on Asia Europe trades through both 2012 and 2013. The softness in the market represents additional challenges for the container port sector, coinciding with the need for facility upgrades and dredging in order to accommodate the larger vessels.”

The ensuing discussion considered key issues such as capacity utilisation, supply chain optimisation, environmental protection and industry stabilisation.

Simon Moore CEO of the DP World’s USD2.5bn investment into the UK at London Gateway, explained how supply chain leaders in Asia will soon reduce their costs by shipping closer to the point of the consumption in the UK. Mr Moore said: “London Gateway enables global shippers to reduce costs from supply chains. London Gateway Port is closer to key UK markets such as the Midlands, the North and the South-East and so inland road haulage will be much cheaper. London Gateway will save UK and Asian based supply chains hundreds of millions of dollars every year. Shippers who are looking to reduce costs in 2013 are now talking to shipping lines to lock in savings before London Gateway, Britain’s new deep-sea port, opens in Q4 2013”.

Representing cargo owners and exporters, Sunny Ho, Executive Director of the Hong Kong Shippers’ Council, commented “Shippers share the view presented by some carriers that the high volatility of freight rate is damaging. Indeed, the adverse impact of slow steaming has often been understated. Shorter transit time means less inventories, lower capital cost and faster response to market”.

Reflecting on the gathering, industry thought-leader Mark Millar commented: “It was a privilege to convene this gathering of maritime industry leaders, enabling a neutral and convivial platform through which to explore the critical challenges and opportunities on the Asia Europe trade. Based on the enthusiastic feedback from the participants, I plan to formalise this Asia Maritime Leadership group as a quarterly forum through 2013 and beyond.”

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November 15, 2012

Fat bus drivers to hit the gym!

Filed under: Logistics,Logistics Social Responsibility,Newsletter — admin @ 1:42 pm

From next week, bus drivers who weigh more than 130 kilograms in Tasmania, will be taken off the job and sent off to reduce weight.

Drivers who exceed Metro Tasmania’s weight limit will be put on other duties and given six months to slim down.

Metro will also give its heavier drivers a free medical consultation and pay them to attend a gym.

Metro’s chief executive Heather Haselgrove says it is a safety policy because the bus driver seats have a limit of 130 kilograms.

“This is now an occupational health and safety issue for us,” she said.

“If the bus say, bottomed out and went over a dip, the seats could break and that could put the driver at risk so we can’t let this happen.”

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Is Asia Behind the Supply Chain Curve?

Filed under: General,Logistics,Newsletter — admin @ 1:30 pm

While supply chain management is becoming an increasingly important part of corporate strategy, many companies in Asia do not yet demonstrate a mastery of how to utilize best practices to improve their performance, according to Patrick Burnson, Executive Editor, Supply Chain Management Review.

Modern supply chains frequently stretch around the world using complex linkages to connect companies and cultures. The uncertainty and risk present in today’s current global business climate therefore has become a priority for supply chain leaders worldwide.

To discuss recent research and best practices in dealing with this risk and uncertainty, executives gathered in Singapore this past fall during the inaugural Asian meeting of the Global Supply Chain Forum. There were three major observations from forum participants:

  • While supply chain management is becoming an increasingly important part of corporate strategy, many companies in Asia do not yet demonstrate a mastery of how to utilize supply chain best practices to improve their performance, especially as it relates to operational-level activities.
  • One of the primary reasons why Asian-based operations are not yet fully utilizing supply chain management principles is that there is a significant lack of available talent who are trained to a global standard in supply chain management.
  • Many companies still do not have a well-developed strategy for the managing and developing of supply chain talent. In addition, supply chain career paths are not well-defined, and no major improvement appears to be on the horizon.

[Read the full article here…]

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Warehouse Simulator Recognised By Logistics Industry

Filed under: Logistics,Newsletter,Supply Chain Management — admin @ 8:59 am

Yale’s recently released warehouse simulation program has received a finalist award at the highly regarded Logistics and Material Handling Mercury Awards. The award was in the ‘Materials Handling Solution’ category and was presented at the annual presentation night in Sydney.

The Yale warehouse simulator is an extremely accurate software program designed to provide operators of medium to large warehouses with a sophisticated consultancy solution. It can show how a particular forklift fleet in a particular warehouse scenario will perform and provides a platform for trying out different approaches and strategies for a warehouse operation.

The input interface breaks down the sections of the largest warehouse into atomic parts including marshalling, parking and staging areas, the exact type of racking, storage and the fleet to be used.

[Read more here]

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November 12, 2012

Airlines plan to make us pay more

Filed under: Newsletter — admin @ 10:48 am

The world’s biggest airlines are expected to pocket $36.1 billion in passenger fees this year. That includes charges to check in bags, buy food and drinks and use online Wi-Fi.

According to IdeaWorksComany, an American consultant on airline revenues, that total has grown 11.3 per cent since 2011.

Making passengers pay for things that were once free is a success. It’s so much of a success that airlines are planning to make passengers do more of it.

Here’s how.

Joe Brancatelli travel writer for business travel website JoeSentMe predicts airlines will ramp up costs for onboard Wi-Fi access. Then there’s luggage delivery services, travel insurance in case you need to rebook a flight, and hotel and car rental package deals.

“The low-hanging fruit is gone,” Mr Brancatelli told the LA times. “They are going to have to invent products.”
“Airlines are looking for anything they can do to raise revenue.”
Later this month Budget carrier Easy Jet will introduce paid seating. Family and friends who want to sit together will have to pay at least $4.50 each for the privilege. The better the seat on the plane, the more you pay.

Passengers will be able to choose between free, $4.50, $12.25 or $18.30 depending on where they want to sit on the aircraft.

The most expensive seats will be in the front row and exit positions with extra leg room. The first few rows will cost$12.25. Any other pre-booked seat will cost $4.50 extra.

Or you can refuse to pay and fight over what is left. That is free.

Why is it happening?

According to IdeaWorksCompany, the internet is to blame. It’s easy to make passengers pay for extra charges when they book their flights online rather than asking them to fork out extra when they arrive at the airport or inflight.

For example, travel website Orbitz currently offers a $50 deal that allows passengers to check two bags at no extra charge and sit in a roomier seat at the front of the plane.

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November 7, 2012

Recycling Gone Wild

It was recently reported that Sweden now finds itself in a situation where less than five percent of all waste is shipped to landfills. On top of that amazing achievement, Sweden uses the landfill waste to create heat and electricity as part of its “waste to energy” incineration scheme. And there’s the issue; with Swedes being super efficient in recycling, the country has run out of landfill waste to generate electricity.

Sweden has now resorted to importing waste from its Scandinavian neighbor, Norway, to use as fuel in its incineration plants. The Norwegian government pays the Swedes to take the waste, burn it, and then return the toxic ashes back to Norway, where they are buried in landfills. Good deal for Sweden, and a good deal for Norway. Sweden is looking for less environmentally friendly European countries to import waste from so they can help those countries from burying their waste in landfills. This example set by Sweden is certainly an example for many Asia Pacific countries to emulate.

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