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LSCMS Blog

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

May 30, 2013

Electric Trucks Coming to Australia

Filed under: Logistics Social Responsibility,Newsletter — admin @ 10:36 am

While truck builders around the globe have been moving towards hybrids, Smiths, bought by a US group in 2011, has been quietly building and selling all-electric six to 12-tonne medium duty trucks in the northern hemisphere for the best part of three years, and as reported in the national transport magazine, Transport and Trucking Today, they are coming to Australia.

Three plants in North America build trucks in left-hand drive while the right hand drive versions are still built in the UK.

Some of the most environmentally aware, global blue-chip companies, including TNT, Coca-Cola, DHL, Sainsbury’s, and PepsiCo own and operate Smith vehicles in either the UK or the US.

PepsiCo has perhaps the largest fleet of Smith trucks in their Frito-Lay division with 176 units and report their diesel fuel savings with those trucks will amount to 1.8 million litres annually.

Simon Harper, TNT Express’ director of operations in the UK, says the addition of 20 Smith Newton trucks to their fleet will reduce annual emissions by about 40%.

The company intends to have up to 60% of its 3500-strong fleet all-electric by 2020.

The magazine reports plans are well underway to have these zero-emission, near noiseless right-hand drive trucks on the Australian market this year, and Tony Fairweather, chief operating officer of the importers Avia Oceania, has confirmed a right-hand drive Smith electric truck, the Newton model, will be put on display in Australia.

Czech manufacturer Avia builds trucks for Smiths in its Prague- based plant minus the engine, gearbox and fuel tanks.

RHD units are shipped to the UK where the installation of the electric motor, single reduction gearbox and a sealed 120kW Lithium-ion battery pack is completed.

The motor, which includes a regenerative braking system, is a liquid cooled, brushless permanent magnet design to minimise size and weight.

Maintenance is uncomplicated – the motor needs a single litre of oil each year. The trucks use all of the original Avia truck running gear, ABS brake system, suspension and steering.

The trucks will have a range of up to 250 kilometres on a single charge from the 120kW battery, making them ideal for fixed-route deliveries in the cities and suburbs. Recharge time is eight hours, but depending on usage could be as little as five hours.

A top speed of 120 km/h will allow the occasional use of motorway or link roads, but constant high-speed running depletes the battery rapidly.

Pricing is not yet available but given how things work in Australia there will no doubt be a premium for the new technology.

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May 13, 2013

Supply Chain Strategies in the Asia Era – Mark Millar

Amidst rampant globalisation and the never ending pursuit of low cost labour, supply chain ecosystems have become elongated, complicated and frustrated with challenges arising from Velocity, Volatility and Vulnerability.

The most important impact we are seeing during this year is a renewed supply chain focus that moves beyond the traditional performance metrics of speed, cost and quality, to incorporate much more emphasis on three critical R’s of supply chain – Regional, Rationalisation and Responsibility:

Regional – with increasing labour costs, especially in mainland China, the volatility in oil prices, and the trend towards regional free trade agreements, companies will seek to rebalance some of their supply chain complexity by adopting a more regional approach – for example ‘Made in Asia, for Asia’. Hence, some production will migrate closer to home, such as Eastern Europe or Latin America. This will not however be a mass migration – largely because of the well-established supply chain infrastructure, but also because the potential in the domestic markets in Asia is so enormous.

Rationalisation – within the 3PL sector, we will see increasing consolidation amongst and between logistics companies, both at global and local levels, as providers seek to leverage scale economies, expand geographical footprints and further develop service offerings. Within the customer base, we will also see more rationalisation of their supply base of logistics service providers – with companies reducing the number of outsourced partners to a handful of best of breed providers, likely specialised by geography, transportation mode or specific service offering.

Responsibility – sustainable supply chains are firmly back on the corporate agenda, driven by confirmed trends that buyers are placing much more emphasis on the suppliers’ perceived environmental reputation when making purchasing decisions – both for consumers and also in the B2B world. Environmentally Responsible supply chains will incorporate particular emphasis on green initiatives, carbon footprint measurement, recycling and waste management programs. There could well be progress towards the development of independent sustainability standards in the shipping and logistics sector for measurement and reporting of a supply chain’s carbon footprint.

Mark Industry thought leader Mark Millar has been engaged by clients as Speaker, MC, Moderator or Conference Chairman at more than 275 events in 20 countries and is recognised by the Global Institute of Logistics as “One of the most Progressive People in World Logistics”. Mark serves on the Advisory Board of the Logistics and Supply Chain Management Society (LSCMS)  mark@markmillar.com

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Top 10 Logistics Companies in the World

Filed under: Logistics,Newsletter,Resources — admin @ 9:56 pm

The world’s top ten logistics firms account for billions of dollars in revenue each year, but, often being divided into a number of operations; it is sometimes difficult to ascertain which are the largest. SJ Consulting group has recently published a list of the world’s Top Ten and they are as follows:

10. Having fallen from number nine in the previous year, UPS Supply Chain Solutions made tenth on the list with its freight forwarding and logistics segment only, making a recorded $6,058 million dollars in 2011.

9. Expeditors International have risen one place from tenth position last year, with revenues of $6,150 dollars in 2011. Headquartered in Seattle, the company has a worldwide network comprising of over 250 locations across six continents, employing over 13,000 professionals worldwide.

8. Retaining its position for a second year running, SNCF Geodis grew following acquisitions in 2010. In 2011, the company acquired US-based One Source Logistics and France-based Pharmalog, in addition to the night delivery business of GLS France. The figure represents the estimates revenue from the Freight Forwarding, Supply Chain and Contract Logistics operations only.

7. Swiss-owned company Panalpina earned $7,331 during 2011, following the acquisition of Australian company Apollo Forwarding at the beginning of the year, and Norwegian company Greig Logistics a few months later. Panalpina currently operates a network of some 500 branches in more than 90 countries, employing 15,000 people worldwide.

6. Following the acquisition of Finnish company Wasa Logistics OY, DSV earned £8,162 in 2011. With offices in more than 70 countries all over the world and an international network of partners and agents, DSV employs approximately 22,000 DSV people worldwide.

5. One of Europe’s leading freight forwarders, C.H. Robinson Worldwide recorded $8,741 during 2011 from their Transportation segment, which accounted for roughly 88% of its gross net revenues for that year. C.H. Robinson handles more than 10 million shipments for more than 37,000 customers annually, with over 235 offices outside of North America.

4. Formed in August 2007 as a result of the merger of TNT Logistics and EGL Eagle Global Logistics, CEVA Logistics employs more than 51,000 people worldwide. The Netherland-based company made $9,593 in 2011.

3. German logistics giant DB Schenker Logistics had a total revenue of $19,865 in 2011, excluding the asset-based portion of its Land Transport. Part of the DB Group, the company occupies around 2,000 locations in all of the world’s most important economic regions, with a huge 94,600 employees.

2. German grandfathers of logistics Kuehne + Nagel made second position with global revenues of $22,104 for 2011. Founded in 1890 in Bremen, Germany, the Kuehne + Nagel Group currently has more than 1000 offices in over 100 countries, with over 63,000 employees and boasts the title of Number 1 global sea freight forwarder in the world.

1.In the top spot for the second year running is another German company; DHL Logistics, whichearned the biggest total revenue for 2011, at $37,780 for its global operations, excluding its Corporate Information division Williams Lea.

Present in over 220 countries and territories around the globe, DHL claims to be the most international company in the world, with a workforce exceeding 280,000 people worldwide. DHL is part of the world’s leading postal and logistics Group, Deutsche Post DHL, which was founded in 1995 as the successor to the German mail authority Deutsche Bundespost, which was privatised. The company encompasses three divisions: DHL Express, DHL Global Forwarding, Freight and DHL Supply Chain, in addition to a vast mail delivery service.

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May 10, 2013

Coca-Cola pulls out of re-cycling scheme

Coca Cola Amatil (CCA) has attacked Australia’s, Northern Territory state government’s cash-for-containers recycling scheme, saying it’s old fashioned and inefficient, and will increase the price of soft drinks.

CCA chairman David Gonski said the company’s own scheme will be much more effective and cost less.

Mr Gonski said at the company’s annual general meeting in Sydney on Tuesday that the NT’s scheme would not be as effective as the industry’s own plan to reduce waste and would raise the prices of their products. This involves using lighter bottles and more recycling bins.

“We do not support container deposit schemes because they are old fashioned, inefficient and very costly for families. In our view, the last thing Australia needs is a tax on beverages,” Mr Gonski said.

CCA’s AGM was attended by a number of protesters who had bought shares in the company in order to be able to attend the meeting and question senior management.

On the eve of Coca-Cola Amatil’s AGM, Greenpeace has launched a television advertisement, highlighting the beverage giant’s efforts to sabotage a national ‘cash for containers’ scheme.

“Coca-Cola has relentlessly bullied politicians, spent hundreds of thousands of dollars silencing recycling advocates and taken the Northern Territory (NT) Government to court to crush the Territory’s community-supported scheme,” said Reece Turner, senior campaigner at Greenpeace Australia Pacific.

“Behind Coke’s slogans and sunshine, the beverage giant is trashing Australia.”

The crowd-funded ad also seeks to encourage Australians to tell state Premiers to stand up for the environment by supporting a national ‘cash for containers’ scheme.

“Coke’s efforts to crush this scheme are brazen and damaging to the environment.  State premiers must stand up to Coke’s bullying by making their support for an effective ‘cash for containers’ scheme loud and clear.

“With the support of Australians who want to see the health of our waterways and wildlife put ahead of corporate arrogance, we aim to get this advertisement on television screens across the country.”

Australians use between 13-14 billion drinks containers a year and Clean Up Australia estimates that 45% of the rubbish collected every Clean Up Australia Day is beverage industry-relate

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May 8, 2013

Panama Canal expansion not likely to make shipping greener

Filed under: Logistics Social Responsibility,Newsletter — admin @ 8:27 am

On paper, it would seem that a shorter ocean transit route would have a positive impact on the environment. But several scientists contend that the shift of some freight from the U.S. West Coast to the East Coast will represent no more than “a push,” when it comes to cleaning the air and addressing climate change.

Indeed, studying the relationship between climate change and the ocean cargo shipping sector immediately uncovers a series of apparent contradictions, says Elena Craft, a prominent health scientist with the Environmental Defense Fund.

“Of all the modes of transport, containerized shipping uses the most unrefined fossil fuels, yet is the least CO2?intensive way to move goods around the planet,” she says.

In a recent interview, Craft notes that containerized shipping has a successful legacy of propulsion using renewable sources yet remains wedded to fossil fuels in the modern age.

It contributes around 3% of global CO2 emissions while, historically, its contribution to climate change has been a cooling effect. And, despite a strong association with “national pride and identity,” it remains omitted from national efforts to tackle greenhouse gas emissions in nations where mitigation is high on the agenda.

It is against this backdrop that Craft has contributed her insights to a special issue of Carbon Management Journal examining “Panama Canal Expansion: Emission Changes from Possible U.S. West Coast Modal Shift.”

The expansion of the Panama Canal presents many opportunities for the intermodal container shipping industry, she says. Larger vessels will be able to transit the canal and take advantage of economies of scale in part to reduce CO2 and criteria pollutant emissions associated with goods movement.

But quantifying emissions changes associated with Panama Canal expansion depends on routing, size of ships, integration of short sea shipping, equipment profile and port of entry decisions (East Coast, Gulf Coast or West Coast).

So while substitution of larger ships can reduce the CO2 footprint of cargoes carried by containership through an expanded Canal, diversion of current cargoes from modes known to be higher emitting per TEU-mile may not provide emissions benefits where waterborne route distances offset modal efficiencies.

The conclusion posited by Carbon Management Journal:

“Using our assumption of future cargo volumes and a 10% diversion from the West Coast to the East Coast, the effects of Panama Canal expansion on CO2 emissions are negligible due to longer distances travelled.”

Researchers add that diversion distance offsets vessel size efficiency gains and reductions in inland transportation miles. Changes in emissions of air quality pollutants could be regionally significant in air-quality terms due to the localized nature of their environmental and health impacts.

But there’s an alternative that has yet to be properly explored say Environmental Defense Fund experts – short sea shipping.

“Short sea shipping is one way to possibly mitigate some emissions increases in regions with higher container traffic volumes,” says Craft, “revealing the importance of system-wide and intermodal consideration to improve freight transport from origin to destination, not just from port to port.”

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Drawing the line between Corporate and Personal Responsibility

Filed under: Logistics Social Responsibility,Newsletter — admin @ 7:19 am

1317065_peanutThe author often laments the lack of personal responsibility in the Supply Chain or in business in general and today he was presented with a perfect example. It was reported by BBC News recently that British supermarket chain, Booths, has been forced to withdraw bags of Whole Hearted Roasted Monkey Nuts from its shelves. The reason for this drastic action is that the packaging for the peanuts failed to contain a “peanut allergy warning”. A spokesman for the supermarket said the peanuts were removed “because the presence of peanuts is not declared on the label. This makes the product unsuitable for anyone with an allergy to peanuts”.

So if you have a peanut allergy and pick up a bag of peanuts, by which time you may have already gone into anaphylaxis, always check that there is a notice warning you that the bag of peanuts, may contain the presence of peanuts.

The supermarket’s technical manager noticed that the bags of peanuts did not have the “allergy to peanuts” label and immediately informed the British Food Standards Agency (FSA). To top off the ridiculousness of this situation, Booths supermarket has advised “that customers with an allergy to peanuts should not eat the nuts and return the bags to their nearest Booths store for a refund”.

Where do we draw the line where individuals need to be personally responsible for their actions and companies held liable in the chain of responsibility scenarios and appropriate social responsibility standards set? This is just one instance where it appears to be inappropriate.

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May 4, 2013

English charity ladies embarrassed by jocular treatment of real piracy

Filed under: Newsletter — admin @ 10:14 am

IN a bit of a funny tale, members of a North Devon Women’s Institute (WI) charity were left embarrassed after a number of them had dressed up as pirates for a talk by a former sea captain who had been held hostage by Somali pirates for several weeks, reports the North Devon Journal.

Local WI treasurer Stephanie George had suggested they dress up for the talk. “I suspected it was a general talk about piracy or something to do with the Appledore Pirates, the fundraising group,” she said.

“I work in a bookshop and on the morning of the day the meeting, I noticed Colin Darch’s book and put two and two together. I thought, ‘Oh god, how awful!’ By then, it was too late, and I just thought we would have to go with it. It was lucky Colin was such a good sport. There he was delivering this harrowing story about how he was held hostage and feared for his life, and we were all were dressed as Captain Hook,” Mrs George said.

“Of course I didn’t take offence. It was more like the Pirates of Penzance,” said Capt Darch, referring the 1890s Gilbert & Sullivan set in Penzance, a town in the neighbouring county of Cornwall.

“I must admit I quite enjoy giving talks to such groups. They are really lovely ladies. They made me judge who was the best dressed which was a difficult choice. In the end I decided to choose the one with who had a fluffy parrot on her shoulder. Of course there weren’t any parrots near the real pirates.”

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May 1, 2013

Nearshoring in the US looking more attractive

Filed under: China,Economics,Jobs,Newsletter,Supply Chain Management — admin @ 10:39 am

In another sign that America is becoming more competitive in manufacturing, the U.S. is now equal to Mexico in “attractiveness” as a source for manufacturing operations and is on track to achieve cost parity with manufactured imports from China by 2015. These are among the findings from new research released by AlixPartners, a global business consulting firm.

According to the survey, 37% of manufacturing executives said they would choose the U.S. as their preferred location for nearshoring. An equal percentage of respondents cited Mexico as the most attractive nearshoring locale, but in the firm’s survey just two years ago, 63% chose Mexico, while only 19% said they would choose the U.S.

Foster Finley is managing director at AlixPartners and director of its Supply Chain Practice. In a recent interview, Finley spoke about the research and what it says about nearshoring and reshoring efforts among global manufacturers. He stressed the report’s statements on the attractiveness of various regions for the production of U.S.-bound goods is a projection – not a prediction – based on straight-line extrapolations from 2013 trends.

“If the United States reaches parity with China in 2015, that would be more about luck than any statistical certainty,” said Finley. “A lot could happen in the next few years.”

The cost gap with China has on average been closed by approximately 70% for the products AlixPartners analyzed. If current trends remain in place, on average, by 2015 the cost of importing manufactured products from China will be about the same as manufacturing them in the U.S, said Finley. However, other key low-cost countries, such as Mexico and India, will remain highly competitive.

With a resounding 84% of the C-level executives saying that the decision to nearshore their manufacturing would be an important one during the next year (versus just 53% who said the same last year), it is clear that nearshoring and reshoring decisions are moving to the front burner in 2013. Approximately 58% of the respondents said for production that has either already been nearshored or is being considered for nearshoring, they have either reduced or expect to reduce their total “landed cost” by 5% to 20%.

The third annual survey captures the sentiments of executives, but AlixPartners has also been tracking the raw macroeconomic data in seven key factors related to global manufacturing costs. They are:

Direct Labor
Direct Material
Overhead
Territory (time in transit between place of manufacture and destination market)
Harmonized tariffs
Transportation
Exchange rates

Generally, the raw numbers line up very well with the sentiments expressed by survey respondents, but Finley was careful to note that there are no direct lines between any one of these costs in a given country and the advantage of manufacturing there.

“Some of the less sophisticated companies are almost entirely focused on labor,” he said. “Depending on the product or mix of products made in a facility, labor could be inconsequential. It’s about an analysis of the products, not the facility, that will make the justification for relocation.”

For example, while the “China cost” for items analyzed such as machined aluminum parts, plastic molded parts, non-denim slacks, and knit apparel and sweaters is indeed on the rise, that cost is still lower than Mexico’s in each case – and is forecast to remain lower through at least 2015.

The one-time costs associated with a move are also critical to such a decision. Tax incentives, utility incentives and other governmental programs might help ease the transition to the U.S. or ensure a company doesn’t leave, but the U.S. is not alone in considering and implementing such incentives. “We think China will get into that as well, as they realize they need to get competitive to grow manufacturing or keep it in China,” said Finley. “China has its work cut out for it, because it has to deal with an export-based economy with a rising wage rate and a small consumer market.”

Automation will continue to play a big role as manufacturing welcomes what Finley called the “democratization of robotics.” In the list of economic factors above, automation seeks to transfer labor costs to overhead, which improves predictability. As the costs for automated technologies fall to the point where more small manufacturers can afford them, it increasingly places control of the labor costs in their hands

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