|
|
 |
BDP's new solution for tanks | |
November 22, 2010 - PETALING JAYA: BDP International has developed a new comprehensive solution for the optimal management of ISO tanks and multiple element gas containers (MEGCs) - one of the core assets of chemical as well as oil and gas (O&G) companies.
An ISO tank is a term used to describe a steel 'pill shaped' container which complies with the International Standards Organisation regulations for the transportation of bulk liquid.
The global logistics and management firm's new solution, dubbbed 'The BDPSmart Tower', is expected to address the long-standing problem of the industry by simplifying and improving the management of the flotilla of the industrial tanks used for shipping chemicals and other industrial liquids or gases.
It is estimated that under-utilisation of these containers could be costing chemical and O&G companies more than US$1.5bil a year in unrealised revenue.
BDP (Malaysia) Sdn Bhd general manager Ng Kar Yit said this new system would realise untapped revenue and yields of the asset due to a better a turnaround time.
"BDPSmart Tower provides end-to-end visibility from the port of departure to the port of desination, its status at the clients' venue until the tanks are returned to their owners.
"We got people on the ground all around the world that render real-time update on the status of the tanks and advise on the next step of action," he told StarBiz.
Of the approximately 250,000 tanks worldwide, 100,000 are owned or leased by chemical or leased by chemical, petrochemical and O&G companies, which are the target market of the solution.
BDP regional director of business development Asia Pacific Hoo Ching Dew said under-utilisation of tank assets occurred because no single source in the supply chain was responsible for tracking and controlling the tanks, particularly during their destination's dwell time and return leg.
"As a result, these assets often sit idle for weeks if not months awaiting for their next move. In one of the cases, an ISO-tank was discovered sitting at customer's site for 14 years," he said, adding that the profit of each tank content was conservatively estimated to be about US$15,000 per trip. So, getting just additional trips a year from each tank could earn the industry a projected US$1.5bil annually," he said.
According to BDP, companies also pay hidden costs of extended idle time when customers hold the tanks and use it as a form of free storage, as well as unnecessary port charges associated with delays in moving the tank back to its owner.
By SHARIDAN M. ALI
The Star
|
|
There's Not Much Local in 'Glocalized' Products That West Makes for Developing World | |
November 18, 2010 - Typically, multinational companies create stripped-down versions of products developed for Western consumers. They then offer these products in the developing world at a reduced price. To do this requires removing certain premium features or bells and whistles, and perhaps substituting lower-cost materials. Even so, the prices such products command are often unaffordable by all but a small percentage of people at the top of the local markets' income pyramid.
This strategy is called "glocalization", and the wisdom of it is in question. While the word "local" is embedded in the name, in truth there is very little locally relevant insight reflected in the design of glocalized products. Thus, after an initial flurry of sales made largely on the cachet of the multinational's global brand, the approach fizzles. As one Indian executive put it: "Emerging nations used to aspire to have rich-world products. Now they want rich-world quality in their own products."
Business Week
|
|
Air cargo security threat a challenge for industry | |
Logistics costs could soar if airline cargo security measures pile up
November 24, 2010 - FOR an industry already struggling with huge security issues on the passenger side, the latest threats on the air cargo front is nothing short of a nightmare.
The appearance of two similar packages in late October containing explosives hidden in printer cartridges - one in England's East Midland's Airport bound for Chicago, and another US bound package on Qatar Airways flight in Dubai - adds a new headache to an industry struggling to deal with terrorist threats to passenger jets following the events of September 11, 2001.
This latest scare comes less than a year after a young Nigerian tried to set off his explosives loaded underwear on Northwest Airlines Flight 253, en route from Amsterdam to Detroit, Michigan, on Christmas Day last year.
The December incident happened despite rigorous security screening regime at airports requiring passengers to discard all fluid-containing packages, empty their pockets, present laptops for screening and literally shed nearly all items of clothing and accessories, except shirts/ blouses and pants/skirts.
The threats on the cargo front come at a time when questions are being raised on the effectiveness and efficiency of the passenger security screening regimes.
Just days before the discovery of the packages, British Airways chairman Martin Broughton complained about the procedures which required separate checks of laptop computers and forcing people to take off their shoes for checking, saying that such measures are 'completely redundant'.
Besides the time wastage, inconvenience and anxiety to travellers, the whole security at airports rigmarole costs the airline industry US$6 billion a year.
But if anything, the latest threats on the cargo front may simply underscore his point - that while passengers have been put through the screening mill, cargo has been left largely unattended.
It is a point pilots have highlighted before. The British Pilots Association had warned for years of the threat to cargo.
And in December 2009, a US government report noted that 30 per cent of all cargo shipped on passenger planes had inadequate security screening because of insufficient background checks of freight handlers.
'Air cargo is vulnerable to the introduction of explosives and other destructive items before it is loaded onto planes, potentially creating risks for the travelling public,' Richard Skinner, the Homeland Security Department's inspector general wrote in that report.
The threat to air cargo comes at a time when this part of the business has picked up to its highest levels in three years, thanks to the global inventory re-stocking cycle. Last year, airlines carried 26 million tonnes of international cargo, and this is expected to rise to 38 million tonnes by 2014.
And about 40 per cent of all air cargo is transported on passenger planes. How these airlines will be impacted by the inevitable tightening of the global air cargo security regime remains to be seen.
As Paul Ng, the global head of aviation at Stephenson Harwood pointed out, safety is paramount for airlines.
'Typically airlines are prepared to pay whatever it takes for safety,' he said. 'They may cut back elsewhere.'
Industry insiders say that one major challenge for the industry arises from the fact that the International Civil Aviation Organisation (ICAO) does not currently have specific guidelines for air cargo security.
This, they contend, leaves open the door for a myriad layers of uncoordinated security regimes imposed by individual airports and regulatory authorities around the world.
Given that not every piece of air cargo can be scanned or X-rayed, many airlines could also resort to 'country profiling'.
Not surprisingly, all this raises the spectre of higher costs, not just for airlines but also the logistics/supply chain industry. Analysts note that logistics already represents 15 per cent of the value of goods that come to the market. This could rise to 20 per cent and beyond if the cost of airline cargo security measures pile up.
Who will ultimately bear this cost increase?
'In the past five or six years we saw logistics costs go up due to the movement of production plants to other areas in the world. A big security focus might put the costs up further,' noted Nicole Geerkens, top executive at the European Logistics Association, recently. 'Now there is a trend where people are considering whether to in-source, or repatriate production.'
There are no easy solutions.
But in the absence of a coordinated global regime for air cargo security, the alternative will be a messy and expensive array of measures which can be repetitive and painful not just for carriers, but also for global trade.
After all, international air cargo accounts for 35 per cent of the value of goods traded internationally, and is an integral part of a multi-billion-dollar logistics industry responsible for keeping global supply chains running smoothly.
By VEN SREENIVASAN
The Business Times
|
|
S'pore, Colombia discuss FTA | |
November 23, 2010 - SINGAPORE has begun negotiations with Colombia on a free trade agreement (FTA), Colombian press said on Monday.
The agreement may be signed in 2012 'if talks go well', Colombian Commerce, Industry and Tourism Minister Sergio Diaz-Granados told the La Republica newspaper.
The negotiations were launched not long after Colombia announced the establishment of a commercial office in Singapore, Xinhua news agency reported.
Mr Diaz-Granados said that the FTA with Singapore would bring Colombia closer to the Asia-Pacific Economic Cooperation Forum (Apec).
'Colombia has more than 1,300km of coast in the Pacific, it has more than 45 million consumers and with an economy recovering. When our country joins it, it will be the 16th biggest economy of the Apec and the 12th in size,' he said.
The Straits Times
|
|
|
Using an Asian currency for regional trade | |
November 24, 2010 - THAI Prime Minister Abhisit Vejjajiva recently proposed the use of the Chinese yuan as the currency of choice to conduct intra-Asian trade. While it may be premature at the moment, the proposal should not be dismissed out of hand. Like several others in the Asia-Pacific region, Mr Abhisit is worried by the current appreciation of the baht and other regional currencies.
The strengthening of regional currencies began seriously worrying some leaders when the US Federal Reserve recently announced its US$600 billion quantitative easing (QE2) programme. Whatever stimulus it may provide the US economy, the easing will also obviously push down the US dollar relative to current account-surplus countries such as Thailand, Malaysia and South Korea. Thus central bankers from Seoul to Bangkok to Kuala Lumpur are contemplating new capital controls to deter hot-money inflows.
To be sure, Fed chairman Ben Bernanke chose this path because he had no better options left for stimulating the US economy, and he fears the possibility of Japanese-style deflation taking hold if he fails to act. But that is cold comfort to the emerging countries in the region. The flow of some of that money into their countries will push up prices and create asset bubbles. Worse, when sentiment turns sometime down the road, all that hot money will head for the exits all at once. We all know what happened in South-east Asia in 1998.
Mr Abhisit's call echoes a similar one made by the Asian Development Bank (ADB) to use the yuan as a regional trading currency to reduce the impact of currency volatility. Of course, such a move is easier said than done. To begin with, it needs Beijing's approval; China would have to relax its tight control over the renminbi, over its current and capital accounts for the yuan to have any kind of meaningful role in regional trade transactions. But China didn't send any signal that it would be prepared to take these necessary steps either during the recent G-20 meeting in South Korea or at the Apec summit in Japan. At the same time, it is abundantly clear that recent statements - from World Bank president Robert Zoellick, who wrote a remarkable article calling for nothing less than a renegotiation of the global monetary order, to the ADB's yuan proposal to German Finance Minister Wolfgang Schauble's warning on QE2 - suggest some sort of denouement to the problem is approaching.
So it is time to prepare the groundwork. Let currency issues be deliberated, ventilated and discussed intensively. Perhaps, Asean could take the lead on this front. The alternate currency for intra-Asian trade could be the yuan. But it could also be the yen or the South Korean won that is the next regional trade currency.
But a start should be made because, as it stands, 90 per cent of Asia's trade is conducted in US dollars and if a tsunami of that currency heads to this part of the world, many in the region are going to be hurt.
The Business Times
|
| A 24-Hour Nightmare |
With the EU's advance-filing rule just weeks away, carriers and shippers are searching for answers
November 22, 2010 - Shippers, you're on notice: Even if your cargo isn't destined for Europe, effective Jan. 1 you'll be obligated to file cargo data 24 hours in advance to meet the European Commission's new cargo security rule.
The regulation, which covers any shipment landing at a European port for inland destination, transshipment and even freight remaining aboard the vessel, is similar to the 24-hour rule U.S. Customs put into effect for imported ocean cargo in November 2002 - except that instead of a single U.S. agency responsible for regulatory oversight, enforcement will come from the 27 individual EU members.
With less than six weeks until the regulation takes effect, that's a major concern for shippers and carriers still waiting for EU countries to come out with specified penalties for violations - or even instructions for shippers if their cargo is held up when carriers receive a "do not load" message.
Christopher Koch, president of the World Shipping Council, said carriers have "significant" concerns about where and how they will transmit the required manifest data. "When the U.S. did this, you were dealing with one system, and one government," Koch said. "There you have the European Commission writing a regulation, and 27 countries with 27 different information systems to enforce it. There's not a single European system - each nation has to have its own data-reception system.
"If you're asking is there concern within the industry about how this is going to roll out on the first of January, at the present time you have to say yes," Koch said.
That concern centers around the requirement that carriers file an EU Entry Summary Declaration 24 hours before containers are loaded aboard ship. Air carriers must file data four hours before a plane lands at a European airport, or on departure for flights lasting less than four hours.
The rule will push back cutoff times when carriers will accept cargo and export documentation from shippers, and intermediaries worry not enough shippers have received the word, which will result in a lot of angry customers when their cargo doesn't get aboard.
"The shippers need to know this information, because we're the ones who have to meet the deadlines, and we can't meet those deadlines unless the shippers are aware of the penalties," said Johnny Ramos, an export manager with freight forwarder Tradewinds International in Hillsdale, N.J.
Under current practice, ocean carriers won't load cargo without an Internal Transaction Number generated by the Census Bureau's Automated Export System. Under export rules Census set in 2005, all export documents must be filed electronically. Carriers must have complete bill of lading information 24 hours before departure, but an exporter must file documentation set by the carriers' deadline for compiling the manifest, which often is ahead of the deadline for containers to be delivered to the port. The export rules allowed shippers to amend an AES filing to fill in gaps, such as the count and weight of the shipment, information that's only known after a container is stuffed.
Now shippers will have to have all of their data at the time of filing, said Geoff Powell, director of operations for customs broker C.H. Powell. "Since the export regulations went into effect, the submission of an AES ITN number would suffice to meet the manifest requirements. Now you're going to need full bill of lading information at the same time."
Powell said the EU's requirements may require shippers to deliver cargo data before they deliver cargo to carriers to give carriers time to file bills of lading with the EU member state.
The earlier cutoff times at the gates mean there may be more inventory in the pipeline to assure timely delivery to customers. That adds to costs. "If we had a vote, we wouldn't vote for this new rule," said a shipper who requested anonymity.
The European Commission's policy commission will meet Dec. 3, and "we hope we get a lot more clarity as to whether or not, or how this is going to be rolled out," Koch said. The 24-hour rule was to take effect in 2008, and the commission extended the deadline. European Commission officials haven't indicated whether another extension is being considered.
Koch said EU countries have the specifications and have built the systems, "but they haven't opened them up and tested them yet with the carriers. Until that process is done, and people know the results, and can say that when they can transmit data the system works, obviously there is a significant level of uncertainty."
|
| Peru deal opens sea route to landlocked Bolivia |
November 16, 2010 - Bolivia and its neighbor Peru signed a deal this week allowing landlocked Bolivia access to four square kilometers of Peruvian shoreline, in essence making Bolivia a maritime nation again, according to international media reports.
Bolivia President Evo Morales and his Peruvian counterpart, Alan Garcia, signed a deal at the end of October giving Bolivia a 99-year lease on the strip of shoreline near Peru's southern port of Ilo.
Bolivia was last a maritime nation in 1884, when Chile captured and kept the country's mineral-rich coastline in the 1879-1884 War of the Pacific.
"This opens the door for Bolivians to have an international port, to the use of the ocean for global trade and for Bolivian products to have better access to global markets," Morales said during the ceremony, according to a report in the Vancouver Sun.
According to Viviana Caro, the Bolivian minister for planning and development, direct access to the ocean will cut the distance goods have to travel to Asian markets by 40 percent.
Most of those products are natural resources such as zinc, tin and silver, according to the report.
|
| Europe's ports will see increased volumes next year |
Analysts predict more traffic despite austerity measures by EU governments
November 24, 2010 - Volumes through European ports are expected to grow next year, despite the austerity measures being introduced by EU governments.
According to Global Port Tracker: North Europe Trade Outlook, a report produced by analyst Hackett Associates and the Bremen Institute of Shipping Economics and Logistics (ISL), container volumes at six of Europe's top ports grew by an average of 12.6%, year on year, in September.
Although volumes are expected to increase again next year, despite government cuts that some have warned would halt consumer spending, the analysts said growth would be weaker than this year.
Hackett said: "Our view is that the growth will continue; perhaps a bit slower than we have seen in 2010, but nevertheless, after the seasonal downturn, we project volumes will increase."
Transhipment volumes from North European ports to facilities in the Baltic Sea are expected to report strong growth, following on from this year.
Sönke Maatsch, of ISL, said: "The turning point was reached in the second half of 2009, and since then container traffic in the Baltic Sea has almost doubled.
"This trend is confirmed in the October 2010 data from the port of St Petersburg, which shows a 48% increase in teu from the same month of 2009 and 8% more than in October 2008, the previous record."
The report reveals that imports at the six ports had recovered from their 2009 lows by March 2010, and then settled in a narrow range of monthly flows of 1.2 million teu - the only exception being August, when they reached more than 1.25 million teu.
In September, container volumes remained steady across the six ports tracked by Global Port Tracker.
The 2010 forecast for the six - Hamburg, Zeebrugge, Rotterdam, Bremerhaven, Le Havre and Antwerp - is a total of 15.2 million incoming teu (a 12.6% gain on 2009), and 15.8 million outgoing teu (an 11.6% gain).
The short-term incoming forecast projects small decreases until a rebound in March.
European imported deepsea volumes are expected to reach 21 million teu next year, a 13% increase on 2009, while exports are forecast at 15 million teu, up 8% on 2009.
International Freighting Weekly
|
| Shippers Face CSA 2010 Uncertainty After Changes |
Truckers hail 'adjustment' to safety initiative, while shippers seek clarity
November 22, 2010 - Last-minute changes to the Comprehensive Safety Analysis 2010 initiative announced last Thursday will benefit truckers, but will leave some shippers wondering how to assess their carriers' safety performance.
But CSA 2010 initiative is a work in progress, with a rulemaking and other potential changes still coming from the Federal Motor Carrier Safety Administration.
On Nov. 18, The FMCSA said it is revising its CSA 2010 Safety Measurement System, dropping the word "deficient" from its vocabulary. Carriers that exceed threshold levels in any of seven categories instead will be placed on "alert."
The FMCSA said an "alert" in a carrier's SMS results simply means the company is prioritized for an FMCSA "intervention" - starting with a warning letter - and that "alerts" do not signify or imply a safety rating or safety fitness determination.
That's a relief to the trucking industry, which was concerned that shippers could misread SMS data by equating it to the old FMCSA safety rating system, in which a carrier was either "satisfactory," "conditional" or "unsatisfactory."
A carrier's seven "BASIC" category scores are not the equivalent of a final safety rating, and aren't meant to be used as such, the agency and truckers both stress.
To further underscore the difference between the systems, FMCSA said it will change the color used to highlight carrier "alerts" from red to orange.
The FMCSA will also "recalibrate" one of it BASIC categories by adjusting the severity weightings for violations of rules on how to properly secure cargo. The agency will also keep carriers' intervention status private.
The FMCSA found its weightings disproportionally affected certain types of carriers.
"ATA continues to support the objectives of CSA 2010 ... and we are pleased with the agency's decision to continue working on its Cargo-Related BASIC to get it right before it's made public," ATA President and CEO Bill Graves said.
However, that means FMCSA will withhold information on alerts in two categories - the cargo-related and crash BASICs - when it makes much of its SMS public Dec. 5. That information will be accessible to the FMCSA and motor carriers only. That could pose a challenge for shippers and third-party logistics companies trying to assess their exposure to legal liability when contracting a trucker. Shippers and 3PLs are concerned they could be held liable by juries in accident lawsuits if their carriers have "alerts" in one or more BASICs. Shippers and logistics providers at the recent National Industrial Transportation League annual meeting said they need a system that will give them a clear indication of a potential supplier's safety status and help them differentiate between carriers. The agency opened its SMS and BASIC records to motor carriers in August. It said it will continue to adjust and refine its system as it rolls it out over the next year.
|
| GDP Rose 2.5 Percent in Third Quarter |
Inventories, consumer spending contribute to higher estimate November 23, 2010 - The U.S. economy expanded at an annual rate of 2.5 percent in the third quarter, spurred by increased personal consumption, inventories, exports and business investment in new equipment.
The increase in real GDP topped the 2.4 percent consensus of economists in separate surveys by Bloomberg and Dow Jones, and was up from the 2 percent in a preliminary Commerce Department estimate last month. GDP rose at an annual rate of 1.7 percent in the second quarter.
Economists said the numbers pointed to continued slow growth that won't be enough to make a quick dent in the 9.6 percent unemployment rate.
Commerce Department numbers show that consumer spending, accounting for 70 percent of U.S. economic demand, rose at a 2.8 percent rate, compared with a previously estimated 2.6 percent. the revision reflected an increase in purchases of used cars, the Commerce Department said.
Inventory accumulation contributed 1.3 percentage points to third quarter growth. The increase reflected new information on natural gas, coal and petroleum stockpiles for utilities, the Commerce Department said.
Retailers also have been adding to pared-down inventories in anticipation of stronger holiday sales this year. The National Retail Federation forecast that November-December retail sales will be 2.3 percent above last year's levels.
Journal of Commerce
|
| Container lines eye transpacific rate hikes of $400-$600/feu next year |
TSA members claim they need to claw back two years of heavy losses
November 22, 2010 - Fifteen of the world's largest container lines plan to seek rate hikes of US$400 per feu on eastbound transpacific trades to US west coast ports from next May.
Member shipping lines in the Transpacific Stabilisation Agreement (TSA) claimed the early end to this year's peak season had left the trade "lagging, relative to other Asia container markets, while operating costs continue to rise".
The TSA's voluntary guideline contract recommendations for new contracts, most taking effect from 1 May, also call for a rate increase of $600/feu on all other destinations, full recovery costs of other equipment sizes and stricter collection of fuel charges as well as Panama Canal, Alameda Corridor and other fixed access charges.
The TSA also recommended a peak-season surcharge of $400/feu from 15 June through to 30 November 2011- "dates subject to adjustment based on changing market conditions".
Despite sizeable profits recorded by most members in 2010, the TSA claim further revenue recovery is needed to restore liner financial stability.
The lines are predicting cargo growth of 6% to 9% from Asia to the US in 2011.
"Maintaining a stable infrastructure for the movement of goods is no less important today than in past years, and that will take sustained levels of carrier investment over time," said Kim.
International Freighting Weekly
|
| Chemicals Sector Rail Traffic Rises 8.6% |
November 18, 2010 - North American chemicals sector rail traffic rose 8.6% year-on-year last week, to 46,217 cars, according to the Association of American Railroads (AAR; Washington). U.S. traffic was up 4.1%, to 29,409 cars. Canadian traffic rose 19.2%, to 15,837 cars, while Mexican traffic fell 6.6%, to 971 cars. Traffic rose from the prior week's totals in the U.S. and overall, though it fell in Canada and Mexico.
Overall, North American freight rail traffic rose 6.4% year-on-year last week, to 388,820 cars. Year-to-date, the North American chemicals sector has generated 2,002,991 cars of rail traffic, a 13.4% increase from 2009 levels.
Chemical Week
|
|
|
|
|
