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Day: 16 November 2021

‘Nirvana’ for nervous importers

Posted on by Keith McKinley

As supply chain disruptions continue to dominate news headlines, a noted inbound supply chain software specialist is making sure that nervous importers are guaranteed a good night’s sleep. Logistics Business magazine editor Paul Hamblin meets Setlog.

In the logistics industry, much of the noise around Digital Integration and Real-time Visibility (RTV) software and their ability to improve both service and efficiencies has been focused on the last-mile sector, on the journey of goods around a warehouse and then out to the end consumer. Indeed, end-consumer comfort with the technology is a key component of its raison d’être.

But what about the much longer, more complex and decidedly uncertain route taken by the goods before they even arrive at the warehouse? In other words, their journey from a producer or supplier in Asia or Africa to, say, their European-based importer? In a world where disruption has been perhaps the most common word in the global supply chain lexicon over the past 24 months – and with no likelihood of unexpected disruptions ceasing any time soon – ­importers will be happy to hear about a software provider able to offer solutions aimed at full collaboration and visibility of the total inbound supply chain.

Founded 20 years ago, now with offices in New York and Bochum (Germany) serving over 150 customers and brands, Setlog offers a digital ecosystem in which every stakeholder in the supply chain takes part. It includes the importer’s WMS and ERP and all constituent parts, plus suppliers, factories, forwarders, laboratories, buying offices, warehouses and quality control mechanisms, all linked to a common, easy-to-use, 100% integrated Digital Independence and visible gateway that enables all parties at all locations to see all data and all workflows at all relevant times. And all managed by easy-to-use, downloadable software.

It’s called Online Supply Chain Accelerator, or OSCA. “Data silos are everywhere, and they are killing businesses,” Guido Brackelsberg, Setlog co-founder and MD Sales, tells me. “Those businesses need shorter lead times. It’s driven by the Amazons of this world and it’s leading to more decentralised supply chains that are not optimally connected. To achieve the agility they need, our view is that businesses need digital independence, a digital core to manage sourcing, procurement and their global logistics processes. It’s why we focus on API integration and better movement of data. Collaboration of inbound supply chains is going to be a must for everyone, whether you are in fashion or frying pans.”

The obvious immediate benefit is faster lead times – 2-4 months, rather than the 8-12 months of a traditional or not fully integrated supply chain. Put that win against an autumn of doom-laden headlines about global shortages, blocked ports and stranded container ships and you have a story to make a Setlog target customer sit up and take notice.

As supply chain disruptions continue to dominate news headlines, a noted inbound supply chain software specialist is making sure that nervous importers are guaranteed a good night’s sleep. Paul Hamblin meets Setlog. “Let’s not even talk about how bad it is out there,” agrees Guido Brackelsberg.

“The benefit we offer against this backdrop is security, reassurance. You have a much better grip on your supply chain because your supplier is sharing all of his/her information. Our customers say to us: ‘I can sleep at night now, because of OSCA. If something goes wrong in my supply chain outside my control – and I know it’s going to – I can alleviate the pain. I can act, rather than react.’” Clearly it is a highly intricate network, but for the core user it is easy to operate via the software. “That’s what 20 years of experience gives us,” says Brackelsberg. “Knowing what a warehouse worker in Bangladesh is confident about operating intuitively in the same way as counterparts around the world. Everyone sees the same screens.”

A SaaS business model, Setlog is migrating OSCA to a platform approach so a supplier will only need to be added to the ecosystem once. That same supplier might work with five different customers with five different workflows. In each case, full end-to-end visibility with integrated API and data analytics are promised, all with nirvana in mind for the importer – digital independence.

Automation for all

Posted on by David Priestman

A UK specialist is bringing a new business model to the automation and integration sector, which could be good news for SMEs.

Until now, automation projects have largely been for the mega players only. Only the Amazons, Tescos and Wal-Marts of this world have had the heft in terms of investment, capacity, footprint and staff resource to take expensive projects on with a clear ROI goal in mind and without disrupting their massive day-to-day operations.

But now the world is changing. Customer service requirements in terms of delivery speed, accuracy and personalisation are requiring SMEs to think like the big players – and that means automation and digital transformation. The problem for smaller concerns and ecommerce start-ups embarking on such projects often lies in not having the staff bandwidth and expertise to make the jump with any confidence and without incurring damaging disruption to the core business.

This is where Big Box Group comes in. Initially a strong business as a storage and racking specialist, some five or so years ago its founder Iain Gillard began to embrace a new vision of where warehousing was going, in which scanning efficiencies, AGVs and robots and a greater automation emphasis were front and centre. He forecast that SMEs would need someone to help them through the process, to be a reliable expert partner guaranteed to get the job done – and, crucially, to be a single point of contact.

Jason Dyche, the company’s Head of Automation, is himself a veteran of the German warehousing logistics optimisation field. He bought fully into Gillard’s concept, joining Big Box Group in summer 2020, at the height of the pandemic and in the full knowledge that the need for such skills as Big Box could offer would be accelerated by the world emergency.

“What I liked about the Big Box concept was that, with our wide expertise, we could walk into almost any business and we could help them with anything, within reason,” he reveals. “It could be racking, it could be a mezzanine floor, it could be a temporary building, it could be a scanning solution.”

Does that not make them just another consultancy service, though? “Absolutely not,” he shakes his head. “We are not consultants. We don’t charge a consultancy fee. The idea is that we work in partnership, that we are trusted to get the job over the line. And for the client, the beauty is that they have one phone call to make each time, because we will do the rest for them. If the project is a small one, we know we can go back in confidence a few months later and they will want us to do another, larger job.”

Big Box Group’s automation suite of solutions has led to partnerships with AGV supplier Balyo, narrow-aisle UK forklift specialist Flexi and goods-to-person AMR provider GreyOrange. A fruitful relationship has been established with fast-growing Munich-based wearables innovator ProGlove (pictured).

“The beauty of ProGlove is that it can provide a very quick fix in terms of ROI, perhaps 3-6 months compared to other automation solutions,” explains Jason Dyche. “There’s a fast turnaround, too – orders can be ready in a matter of weeks, whereas AMR and AGV implementation can be, say, 12-18 months.”

He says the company will look at any project within the warehouse, from Goods-In to Goods-Out. With that flexibility in mind, how does he go about assessing what is right for a new client?

“I’ll start by asking, ‘What are your objectives as a business?’ Let’s be honest, the answer is usually going to be: ‘We want to increase our turnover without adding to our overheads, in fact we would prefer to reduce those overheads’. My job is to establish how to do that for them most cost-effectively and appropriately,” he says.

It means no two projects are the same. Currently he is working on a large asset-tracking project for a successful manufacturer which has grown so fast that its inventory has become haphazard; on developing a way to move butter from a pallet to a conveying system more efficiently; and on a scanning project (with ProGlove) for a major British supermarket chain.

Automation for all

Posted on by David Priestman

A UK specialist is bringing a new business model to the automation and integration sector, which could be good news for SMEs.

Until now, automation projects have largely been for the mega players only. Only the Amazons, Tescos and Wal-Marts of this world have had the heft in terms of investment, capacity, footprint and staff resource to take expensive projects on with a clear ROI goal in mind and without disrupting their massive day-to-day operations.

But now the world is changing. Customer service requirements in terms of delivery speed, accuracy and personalisation are requiring SMEs to think like the big players – and that means automation and digital transformation. The problem for smaller concerns and ecommerce start-ups embarking on such projects often lies in not having the staff bandwidth and expertise to make the jump with any confidence and without incurring damaging disruption to the core business.

This is where Big Box Group comes in. Initially a strong business as a storage and racking specialist, some five or so years ago its founder Iain Gillard began to embrace a new vision of where warehousing was going, in which scanning efficiencies, AGVs and robots and a greater automation emphasis were front and centre. He forecast that SMEs would need someone to help them through the process, to be a reliable expert partner guaranteed to get the job done – and, crucially, to be a single point of contact.

Jason Dyche, the company’s Head of Automation, is himself a veteran of the German warehousing logistics optimisation field. He bought fully into Gillard’s concept, joining Big Box Group in summer 2020, at the height of the pandemic and in the full knowledge that the need for such skills as Big Box could offer would be accelerated by the world emergency.

“What I liked about the Big Box concept was that, with our wide expertise, we could walk into almost any business and we could help them with anything, within reason,” he reveals. “It could be racking, it could be a mezzanine floor, it could be a temporary building, it could be a scanning solution.”

Does that not make them just another consultancy service, though? “Absolutely not,” he shakes his head. “We are not consultants. We don’t charge a consultancy fee. The idea is that we work in partnership, that we are trusted to get the job over the line. And for the client, the beauty is that they have one phone call to make each time, because we will do the rest for them. If the project is a small one, we know we can go back in confidence a few months later and they will want us to do another, larger job.”

Big Box Group’s automation suite of solutions has led to partnerships with AGV supplier Balyo, narrow-aisle UK forklift specialist Flexi and goods-to-person AMR provider GreyOrange. A fruitful relationship has been established with fast-growing Munich-based wearables innovator ProGlove (pictured).

“The beauty of ProGlove is that it can provide a very quick fix in terms of ROI, perhaps 3-6 months compared to other automation solutions,” explains Jason Dyche. “There’s a fast turnaround, too – orders can be ready in a matter of weeks, whereas AMR and AGV implementation can be, say, 12-18 months.”

He says the company will look at any project within the warehouse, from Goods-In to Goods-Out. With that flexibility in mind, how does he go about assessing what is right for a new client?

“I’ll start by asking, ‘What are your objectives as a business?’ Let’s be honest, the answer is usually going to be: ‘We want to increase our turnover without adding to our overheads, in fact we would prefer to reduce those overheads’. My job is to establish how to do that for them most cost-effectively and appropriately,” he says.

It means no two projects are the same. Currently he is working on a large asset-tracking project for a successful manufacturer which has grown so fast that its inventory has become haphazard; on developing a way to move butter from a pallet to a conveying system more efficiently; and on a scanning project (with ProGlove) for a major British supermarket chain.

Two new ambient DCs in Le Havre port

Posted on by Keith McKinley

Seafrigo Group is inaugurating a 60,000 sq m (650,000 sq ft) ambient temperature logistics platform in Le Havre, in the port area and in the immediate vicinity of its PLS flagship (Parc Logistique Seafrigo), in partnership with Haropa Port.

The two new buildings, 30,000 sq m each, owned by AG Real Estate and operated by Seafrigo for a fixed 12-year period, will be operating at full capacity by the end of the year and will accommodate logistics flows for large retailers and manufacturers in the food industry.

This new complex is designed as a true multimodal hub that will enable the company to strengthen its CSR strategy: the buildings will soon be connected to the railway network and a quay will be created to boost river traffic and encourage modal transfer to the ports of Paris.

On the social front, dozens of jobs will be created in the Le Havre economic basin, positioning the company as a leader for local development.

Eric Barbé, Chairman and CEO of the Seafrigo Group, said: “We are proud to share this joint project with Le Havre regional management and to offer our customers this new multimodal logistics park, ideally located in the heart of the port’s shipping areas. Seafrigo Group will continue to grow in the years to come, with other projects currently under study both in France and abroad. Our commitment is to master the entire logistics chain for the global and continued satisfaction of our partners.”

Baptiste Maurand, Managing Director of Haropa Port, added: “We are pleased to support this ambitious project. Seafrigo is currently one of the main employers in the port area and this new facility is a strong marker of growth and stability for our sectors. In this we share a common ambition: to contribute towards making Le Havre a maritime metropolis and the Seine axis a multimodal corridor.”

Two new ambient DCs in Le Havre port

Posted on by David Priestman

Seafrigo Group is inaugurating a 60,000 sq m (650,000 sq ft) ambient temperature logistics platform in Le Havre, in the port area and in the immediate vicinity of its PLS flagship (Parc Logistique Seafrigo), in partnership with Haropa Port.

The two new buildings, 30,000 sq m each, owned by AG Real Estate and operated by Seafrigo for a fixed 12-year period, will be operating at full capacity by the end of the year and will accommodate logistics flows for large retailers and manufacturers in the food industry.

This new complex is designed as a true multimodal hub that will enable the company to strengthen its CSR strategy: the buildings will soon be connected to the railway network and a quay will be created to boost river traffic and encourage modal transfer to the ports of Paris.

On the social front, dozens of jobs will be created in the Le Havre economic basin, positioning the company as a leader for local development.

Eric Barbé, Chairman and CEO of the Seafrigo Group, said: “We are proud to share this joint project with Le Havre regional management and to offer our customers this new multimodal logistics park, ideally located in the heart of the port’s shipping areas. Seafrigo Group will continue to grow in the years to come, with other projects currently under study both in France and abroad. Our commitment is to master the entire logistics chain for the global and continued satisfaction of our partners.”

Baptiste Maurand, Managing Director of Haropa Port, added: “We are pleased to support this ambitious project. Seafrigo is currently one of the main employers in the port area and this new facility is a strong marker of growth and stability for our sectors. In this we share a common ambition: to contribute towards making Le Havre a maritime metropolis and the Seine axis a multimodal corridor.”

Timber pallet sector tackling ‘severe’ challenges

Posted on by David Priestman

The packaging and pallet sector is battling major ongoing pressure as the result of Covid, Brexit and other factors, according to the Timber Packaging and Pallet Confederation (TIMCON).

Delegates at the organisation’s GM, which was held in person in Manchester at the end of October 2021, heard how industry-specific and wider general influences were impacting heavily on the supply and demand of wood and products such as pallets and packaging.

TIMCON President John Dye said while the annual increase in demand related to Christmas has started, there remains a shortage of used pallets in the UK – with recycling and biomass diverting some stocks away from the market – coupled with strong demand for reconditioned pallets in the EU market. Brexit continues to have an impact on the business with additional administrative, time and cost burdens for goods crossing between the UK and the EU.

In general, several interlinked crises in related industries were deepening the issues, he added. These include the ongoing global imbalance of container locations around the world, which has pushed the price of shipping to new highs; the difficulty in logistics, haulage and related industries in recruiting and retaining staff; and continued pressure on supplies due to a post-lockdown rebound in demand for timber in several markets, including China and the US.

Dye said: “While the pallet and packaging industry is fully operational, ongoing challenges for logistics-focused industries in general and our sector specifically, is placing intense pressure on our members. We are continuing to monitor the situation and communicating with other industries and the government to ensure keep the supply chain updated.”

TIMCON recently wrote to MPs including Business Secretary Kwasi Kwarteng, asking for urgent assistance to address staff shortages; and to reinstate both the mothballed Renewable Heat Initiative to allow the industry to invest in kilns and the subsidy for red diesel. The organisation has also engaged fully with the recent Extended Producer Responsibility (EPR) and Packaging Waste Regulations (PWR) consultation processes.

Also at the meeting, TIMCON launched its annual UK Wood Pallets & Packaging Market survey for 2020, which it publishes jointly with the Forestry Commission. The latest study showed a 1.5% growth in reuse of wooden pallets, to a total of 49 million; while, despite the pandemic, production of new pallets remained similar to the previous year, at a total of 44.9m.

“Who would have ever imagined that in a year that saw our supply chains being decimated and the main customer of our products, the construction sector, shutting down for four to five months, the wooden pallet and packaging sector has actually ended up manufacturing the same quantity of pallets as 2019,” said Dye. “After this incredibly difficult time this is a really positive outcome. And we are pleased to see further growth in the recovery, repair and reuse of pallets; this is part of a welcome trend that further still improves our sector’s unrivalled environmental credentials.”

TIMCON gave the meeting an update on projects including the production of a document on safe pallet stacking heights, further engagement with government, and its communications activity.

It also reported on extremely high membership retention (98%) and the addition of seven new members during the past year, which Dye said is evidence of the industry’s desire for strong representation in the face of multiple challenges in the market.

Timber pallet sector tackling ‘severe’ challenges

Posted on by David Priestman

The packaging and pallet sector is battling major ongoing pressure as the result of Covid, Brexit and other factors, according to the Timber Packaging and Pallet Confederation (TIMCON).

Delegates at the organisation’s GM, which was held in person in Manchester at the end of October 2021, heard how industry-specific and wider general influences were impacting heavily on the supply and demand of wood and products such as pallets and packaging.

TIMCON President John Dye said while the annual increase in demand related to Christmas has started, there remains a shortage of used pallets in the UK – with recycling and biomass diverting some stocks away from the market – coupled with strong demand for reconditioned pallets in the EU market. Brexit continues to have an impact on the business with additional administrative, time and cost burdens for goods crossing between the UK and the EU.

In general, several interlinked crises in related industries were deepening the issues, he added. These include the ongoing global imbalance of container locations around the world, which has pushed the price of shipping to new highs; the difficulty in logistics, haulage and related industries in recruiting and retaining staff; and continued pressure on supplies due to a post-lockdown rebound in demand for timber in several markets, including China and the US.

Dye said: “While the pallet and packaging industry is fully operational, ongoing challenges for logistics-focused industries in general and our sector specifically, is placing intense pressure on our members. We are continuing to monitor the situation and communicating with other industries and the government to ensure keep the supply chain updated.”

TIMCON recently wrote to MPs including Business Secretary Kwasi Kwarteng, asking for urgent assistance to address staff shortages; and to reinstate both the mothballed Renewable Heat Initiative to allow the industry to invest in kilns and the subsidy for red diesel. The organisation has also engaged fully with the recent Extended Producer Responsibility (EPR) and Packaging Waste Regulations (PWR) consultation processes.

Also at the meeting, TIMCON launched its annual UK Wood Pallets & Packaging Market survey for 2020, which it publishes jointly with the Forestry Commission. The latest study showed a 1.5% growth in reuse of wooden pallets, to a total of 49 million; while, despite the pandemic, production of new pallets remained similar to the previous year, at a total of 44.9m.

“Who would have ever imagined that in a year that saw our supply chains being decimated and the main customer of our products, the construction sector, shutting down for four to five months, the wooden pallet and packaging sector has actually ended up manufacturing the same quantity of pallets as 2019,” said Dye. “After this incredibly difficult time this is a really positive outcome. And we are pleased to see further growth in the recovery, repair and reuse of pallets; this is part of a welcome trend that further still improves our sector’s unrivalled environmental credentials.”

TIMCON gave the meeting an update on projects including the production of a document on safe pallet stacking heights, further engagement with government, and its communications activity.

It also reported on extremely high membership retention (98%) and the addition of seven new members during the past year, which Dye said is evidence of the industry’s desire for strong representation in the face of multiple challenges in the market.

BSI launches significant global intelligence report

Posted on by Keith McKinley

Today (16th November 2021), BSI, the business improvement and standards company and leading global provider of supply chain intelligence, unveiled its annual Supply Chain Risk Insights Report – the new report lands at a time when supply chains are dominating discussion both in boardrooms and households.

The report identifies the trends and associated risks impacting global supply chains over the coming year and highlights five key themes to enable organisations to achieve resilience:

  • Supplier transparency as a key decider of business success
  • A shifting Environmental, Social and Governance (ESG) regulatory environment
  • A holistic understanding of ‘pain points’
  • Adapting to ‘convergences’ of business challenges
  • Identifying opportunities in emerging trends

Crime, climate and a convergence of threats emerge as dominant risks to the global supply chain. The report, which is powered by analysis of the global data in BSI’s proprietary web-based intelligence system, Connect Screen, provides valuable insight into the significance of these threats while offering analysis and practical guidance to organisations on best practices to mitigate and counter risks.

Susan Taylor Martin, BSI Chief Executive, said: “The past few years have put a spotlight on global supply chains and reinforced their crucial role in our day-to-day life. Because of this unprecedented moment, the supply chain is about to have a make-or-break year and needs to be right at the top of the C-suite agenda. It’s clear that the importance of supply chains will only increase as we head into 2022, and the steps organisations take now will ultimately determine their success or failure.”

Harold Pradal, BSI Chief Commercial Officer, said: “Supply chain threats will remain one of the most serious issues global businesses will face in 2022. Widespread product shortages and scarcely qualified operators, including lorry drivers, are only the tip of the iceberg when it comes to the ongoing global supply chain crisis.

“With manufacturers and freight companies already spending much effort to address these issues, organisations along the supply chain increasingly fall vulnerable to a convergence of additional threats. Those include more frequent and damaging natural disasters and more opportunistic criminal cartels. Unless these threats are addressed holistically and quickly by supply chain leaders, consumers are likely to see current challenges continue and worsen over time.”

Jim Yarbrough, BSI’s Global Intelligence Program Manager, added: “As we continue to manage a multitude of challenges, including COVID, climate change and natural disasters, we have seen the convergence of impacts on organisations and the global community, illustrating the broad-brush consequences of disruptions and threats to our supply chains and the importance of not underestimating their complexities.

“To protect the integrity of this vital part of our global way of life, business leaders must stay ahead of the latest trends that threaten to disrupt it. We’ve published a supply chain risk report every year since 2013, but there has never been a more vital time for business leaders and decision-makers to take note.”

The threats highlighted in the report include:

Crime: The importance of verifying, then trusting

The pandemic showed companies of all sizes from around the world the importance of adaptability, and criminal organisations were no exception. Over the past year, BSI has observed a significant number of criminal organisations trying to infiltrate the logistics supply chain, masquerading as legitimate companies working in warehousing, transportation and distribution. BSI has also noted the issue of fake carriers in an increasing number of countries. Additionally, over 2021, BSI reported that increasing unemployment closely correlated with an increase in organised crime and cargo truck hijackings in South Africa; as unemployment rates increased to 32.6% in the first half of 2021, hijacking crimes also increased by approximately 24.6%.

Similarly, drug cartels around the world are becoming more creative. BSI saw the numbers and quantities of cocaine seizures in Europe increase steadily in 2020 and 2021, and they are expected to continue to rise in 2022. Criminal organisations in Ecuador, Brazil and Colombia ship large quantities into ports in Europe. Although the ports of Antwerp in Belgium and Rotterdam in the Netherlands generally record the most and largest seizures of cocaine from Latin America, there have been notable shipments stopped in Ireland, France, Montenegro and Greece, further showcasing the cartels’ ability to diversify routes.

BSI says these issues underscore the need for organisations to ensure they undertake proper due diligence when onboarding their suppliers. Critically, an end-to-end risk assessment of a company’s supply chain will mitigate the risks inherent to partnering with separate companies from around the world.

Climate: Green-proofing the supply chain

From all corners of the globe, companies are seeking to both protect their supply chains from the effects of climate change and ensure they play their role in a greener future. Maintaining ESG compliance in evolving regulatory environments should now involve considering the impact on the entire supply chain. For example, BSI noted that this year, at least 18 companies-spanning several industries were identified as sourcing products from companies contributing to deforestation in the Amazon. This type of association has the potential to bring significant reputational damage to an organisation and could ultimately result in a drop in revenue.

Additionally, while 2021 has seen a trend of higher-than-average shipping delays rebound, disruptions to the global supply chain like Hurricane Ida in August in the US and Typhoon Chanthu in September in China, have cumulatively caused various delays of shipment volume arriving infrequently at Californian facilities. This has put renewed stress on the ports of Los Angeles and Long Beach, which account for about one-third of all US imports. With climate change likely to increase the frequency of natural disasters, it is against this volatile backdrop that organisations need to reassess and look beyond traditional supply chain partners, methods and technologies.

Convergence: Problems piling up

An overarching threat to supply chains is the risk that individual considerations such as business continuity, sustainability, Corporate Social Responsibility (CSR) and security are not addressed comprehensively, and that organisations fail to acknowledge that they are interrelated. Business continuity threats can lead to security threats and vice versa.

The global shortage of semiconductors exemplifies this convergence. Taiwan holds roughly 90% of the world’s manufacturing capacity to produce semiconductor chips, an over-reliance that contributed to a global shortage of this component. In addition, factors such as droughts and COVID outbreaks in Taiwan between April and July impacted operational capacity, compounding the global shortage. This shortage also created security concerns; for example, a group of criminals attacked a truck driver’s assistant as he was transporting a high-value cargo of semiconductor chips in Hong Kong in June, stealing $650,000 worth of goods.

Convergence can be addressed by companies doubling down on collaboration, ensuring that all parts of an organisation and their partners understand the integrated threats to a supply chain and that teams work together to address them.

It’s essential that organisations have clear insight into the global supply chain landscape and how its ever-evolving dynamics will impact the future.

CLICK HERE to read the full report

BSI launches significant global intelligence report

Posted on by David Priestman

Today (16th November 2021), BSI, the business improvement and standards company and leading global provider of supply chain intelligence, unveiled its annual Supply Chain Risk Insights Report – the new report lands at a time when supply chains are dominating discussion both in boardrooms and households.

The report identifies the trends and associated risks impacting global supply chains over the coming year and highlights five key themes to enable organisations to achieve resilience:

  • Supplier transparency as a key decider of business success
  • A shifting Environmental, Social and Governance (ESG) regulatory environment
  • A holistic understanding of ‘pain points’
  • Adapting to ‘convergences’ of business challenges
  • Identifying opportunities in emerging trends

Crime, climate and a convergence of threats emerge as dominant risks to the global supply chain. The report, which is powered by analysis of the global data in BSI’s proprietary web-based intelligence system, Connect Screen, provides valuable insight into the significance of these threats while offering analysis and practical guidance to organisations on best practices to mitigate and counter risks.

Susan Taylor Martin, BSI Chief Executive, said: “The past few years have put a spotlight on global supply chains and reinforced their crucial role in our day-to-day life. Because of this unprecedented moment, the supply chain is about to have a make-or-break year and needs to be right at the top of the C-suite agenda. It’s clear that the importance of supply chains will only increase as we head into 2022, and the steps organisations take now will ultimately determine their success or failure.”

Harold Pradal, BSI Chief Commercial Officer, said: “Supply chain threats will remain one of the most serious issues global businesses will face in 2022. Widespread product shortages and scarcely qualified operators, including lorry drivers, are only the tip of the iceberg when it comes to the ongoing global supply chain crisis.

“With manufacturers and freight companies already spending much effort to address these issues, organisations along the supply chain increasingly fall vulnerable to a convergence of additional threats. Those include more frequent and damaging natural disasters and more opportunistic criminal cartels. Unless these threats are addressed holistically and quickly by supply chain leaders, consumers are likely to see current challenges continue and worsen over time.”

Jim Yarbrough, BSI’s Global Intelligence Program Manager, added: “As we continue to manage a multitude of challenges, including COVID, climate change and natural disasters, we have seen the convergence of impacts on organisations and the global community, illustrating the broad-brush consequences of disruptions and threats to our supply chains and the importance of not underestimating their complexities.

“To protect the integrity of this vital part of our global way of life, business leaders must stay ahead of the latest trends that threaten to disrupt it. We’ve published a supply chain risk report every year since 2013, but there has never been a more vital time for business leaders and decision-makers to take note.”

The threats highlighted in the report include:

Crime: The importance of verifying, then trusting

The pandemic showed companies of all sizes from around the world the importance of adaptability, and criminal organisations were no exception. Over the past year, BSI has observed a significant number of criminal organisations trying to infiltrate the logistics supply chain, masquerading as legitimate companies working in warehousing, transportation and distribution. BSI has also noted the issue of fake carriers in an increasing number of countries. Additionally, over 2021, BSI reported that increasing unemployment closely correlated with an increase in organised crime and cargo truck hijackings in South Africa; as unemployment rates increased to 32.6% in the first half of 2021, hijacking crimes also increased by approximately 24.6%.

Similarly, drug cartels around the world are becoming more creative. BSI saw the numbers and quantities of cocaine seizures in Europe increase steadily in 2020 and 2021, and they are expected to continue to rise in 2022. Criminal organisations in Ecuador, Brazil and Colombia ship large quantities into ports in Europe. Although the ports of Antwerp in Belgium and Rotterdam in the Netherlands generally record the most and largest seizures of cocaine from Latin America, there have been notable shipments stopped in Ireland, France, Montenegro and Greece, further showcasing the cartels’ ability to diversify routes.

BSI says these issues underscore the need for organisations to ensure they undertake proper due diligence when onboarding their suppliers. Critically, an end-to-end risk assessment of a company’s supply chain will mitigate the risks inherent to partnering with separate companies from around the world.

Climate: Green-proofing the supply chain

From all corners of the globe, companies are seeking to both protect their supply chains from the effects of climate change and ensure they play their role in a greener future. Maintaining ESG compliance in evolving regulatory environments should now involve considering the impact on the entire supply chain. For example, BSI noted that this year, at least 18 companies-spanning several industries were identified as sourcing products from companies contributing to deforestation in the Amazon. This type of association has the potential to bring significant reputational damage to an organisation and could ultimately result in a drop in revenue.

Additionally, while 2021 has seen a trend of higher-than-average shipping delays rebound, disruptions to the global supply chain like Hurricane Ida in August in the US and Typhoon Chanthu in September in China, have cumulatively caused various delays of shipment volume arriving infrequently at Californian facilities. This has put renewed stress on the ports of Los Angeles and Long Beach, which account for about one-third of all US imports. With climate change likely to increase the frequency of natural disasters, it is against this volatile backdrop that organisations need to reassess and look beyond traditional supply chain partners, methods and technologies.

Convergence: Problems piling up

An overarching threat to supply chains is the risk that individual considerations such as business continuity, sustainability, Corporate Social Responsibility (CSR) and security are not addressed comprehensively, and that organisations fail to acknowledge that they are interrelated. Business continuity threats can lead to security threats and vice versa.

The global shortage of semiconductors exemplifies this convergence. Taiwan holds roughly 90% of the world’s manufacturing capacity to produce semiconductor chips, an over-reliance that contributed to a global shortage of this component. In addition, factors such as droughts and COVID outbreaks in Taiwan between April and July impacted operational capacity, compounding the global shortage. This shortage also created security concerns; for example, a group of criminals attacked a truck driver’s assistant as he was transporting a high-value cargo of semiconductor chips in Hong Kong in June, stealing $650,000 worth of goods.

Convergence can be addressed by companies doubling down on collaboration, ensuring that all parts of an organisation and their partners understand the integrated threats to a supply chain and that teams work together to address them.

It’s essential that organisations have clear insight into the global supply chain landscape and how its ever-evolving dynamics will impact the future.

CLICK HERE to read the full report

Congestion is not just for Christmas

Posted on by Keith McKinley

Shippers across the globe might have to battle the effects of supply chain congestion and record high ocean freight rates for some time to come. The question remains – when will they get relief?

The wave of congestion that is sweeping through global supply chains delaying deliveries of seasonal goods and essential commodities, stranding many shippers between meeting impossible delivery deadlines while paying record shipping rates is not set to subside anytime soon

“This is proving to be the ‘peak season like no other’, just as we predicted,” says the Global Shippers Forum, the voice of cargo owners in international trade.

Speaking at a High-Level Maritime Dialogue, hosted recently by FIATA, James Hookham, GSF’s Director, highlighted the challenges that importers and exporters face in getting their goods on shelves and in warehouses for the winter holiday season. They are struggling with historically poor levels of service from shipping lines, ports and terminals, and inland logistics providers, yet paying the highest shipping rates and surcharges seen for decades.

Hookham said: “Global shippers are riding a tidal wave of congestion this peak season that started in exporting countries and is now arriving on the shores of importers and sweeping inland. First, we had lockdowns in Chinese ports, then an inexplicable shortage of empty containers, then the ships suddenly all maxed out and slots were like gold dust (and costing as much). Now our goods are queuing to get into ports, waiting for a crane to unload the box and then for a driver to move it inland to where we need it. It’s been a tough ride and it’s not yet over, but most of us are still standing, although, sadly, there will be ‘wipe-outs’.

“The most vulnerable businesses are the importers and distributors fighting to meet delivery deadlines, set by their retailer customers.  They simply cannot predict when the goods they have paid so much to have transported actually will be available. Not only have they blown their logistics budgets this year, but they are facing stiff penalty charges for late delivery, and possible loss of future contracts. These are the businesses that are the victims of the maritime industry’s collective struggle to manage the ‘Great Shipping Crisis of 2021’.

“But with most deliveries expected to land in the next few weeks, and Thanksgiving and Christmas probably safe for this year, big questions remain – Will this congestion continue well into next year. Will tight market conditions persist through 2022? Or will consumer demand slacken and will capacity and resilience improve service levels prices become more predictable?”

To continue the surfing analogy, was 2021 a freak wave or a permanent rise in sea level?

“Just about every shipping line is predicting the latter,” continued Hookham. “And why wouldn’t they when they are collectively expecting to turn profits exceeding $150bn this year? But there is good reason to query the hype of continued congestion.

“The expectations for consumer inflation levels in most developed countries are hardening and most central banks are expected to increase interest rates next year. That won’t affect retail prices immediately, but it could trigger a rapid change in consumer sentiment that means the ‘click-fest’ of on-line shopping that has reportedly fuelled the surge in shipping demand for the past 18 months could be extinguished as quickly as it ignited.

“Sure, maritime congestion will take some time to unwind, but if the ‘Great Shipping Crisis of 2021’ proves to be just that, then the speed at which shipping rates shadow the drop in demand will be a critical indicator of the responsiveness and competitiveness of this market.”

Hookham concluded by reflecting on the fact that amongst its global membership, GSF now includes operators of container ships.

“There is, of course, that small heroic band of shippers out there who made the trip to the Dark Side during 2021 and hired their own vessels to move their own goods, because shipping line predictability had got so bad, and rates so out of kilter with actual operating costs. I don’t know what their charter terms are, or what their experiences have been, but I expect they will soon be needing to decide whether to ‘give up the hobby’ or make it a part of their routine operations. These endeavours have been dismissed as an aberration by most shipping industry observers, but it tells you something when a few guys in the audience think they can whistle a better tune than the full orchestra!”

 

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