In the latest Baltic Exchange market round-up, Chan said that despite a year on year drop in demand over recent months, supply chains remain congested and there could be a surge in production when factories in China re-open following Covid curfews.

“Early in the year, I expressed some level of surprise that we were not seeing even more upward rate trajectory based on the removal of air cargo capacity due to ongoing conflict in Ukraine,” said Chan. “I posited that upward pressure there was being offset, in large part, by a production vacuum in China as a result of widespread Covid-related lockdowns.

“For context, the percentage of the population under lockdown in China right now is estimated to be larger than the entire population of the US.

“And, while critical economic functions are still technically operational, the systemic nature of the quarantine restrictions means that production output from some of the country’s largest manufacturing centers are at their lowest levels since the initial shutdown in early 2020.”

He said that as well as a clearing of backlogged China freight, other factors that could again disrupt the market include ongoing capacity reductions related to the conflict in Ukraine and if US west coast port and labour negotiations result in strike action.

“Assuming no sharp and sudden deterioration in baseline demand levels (which cannot be guaranteed), there is a distinct scenario in which airfreight rates spike again, even from these elevated levels,” Chan said.

He pointed out that even though the market has softened on the demand side in recent weeks, due to pressure on consumer spending and a post-Covid rotation from goods to services, rates in April remained at historic high levels – although there have been some signs of pricing easing on some trades since then.

The latest figures from the Baltic Exchange Airfreight Index (BAI) show that in April the average rate from Hong Kong to North America reached $9.57 per kg, which is 12.9% up on a year earlier.

From Hong Kong to Europe average rates in April stood at $6.01 per kg, which is up 30.4% compared with last year.

“Logistics networks remain very congested and there is a real possibility that any temporary pull back in bottlenecks and rates are ‘head fakes’ and volatility will continue to be an issue until the core problems are resolved,” Chan said.

Peter Stallion, head of air and containers, at derivatives broker Freight Investor Services, agreed that many had expected prices to have weakened in April, although he said spot market prices are likely to be lower than index rates which also incorporate pricing on longer term deals.

“While we may have expected a drop off in rates from the first quarter of this year, the removal of Russian-owned airfreight capacity has artificially levered up the constraints for airfreight shippers,” he said.

“Asia to US rates have also seen a sharp increase, posting double digit rate percentage point increases following a collapse of available airfreight demand. However, this increase is still quite muted versus the true spot price.

“Transatlantic prices continued to jostle as they have done all the way through since second-quarter 2020.”

Stallion added that higher fuel prices are also likely to impact rates.

“The impacts of this fuel demand is reasonably clear, with Singapore Jet Fuel closing back up towards its previous high of $150.39/barrel (now $138.73/barrel).

“This will feed through into fuel surcharges and forms a component of general inflation that bleeds through into the cost of running airfreight operations.”

Source: www.aircargonews.net

Image: www.pexels.com

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It has been well documented that most maritime accidents (~80%) are caused by human error. Still, most of the focus on learning is rooted in technical causes and adding procedures and checklists.

Despite this bias, many accident investigation reports pinpoint that the leadership or safety culture was the root cause of more recent accidents such as the Bulk Jupiter, El Faro, Helge Ingstad and Costa Concordia, as well as older accidents such as the Exxon Valdez, Bow Mariner, Herald of Free Enterprise and Amoco Cadiz.

Industry blind spot

The critical failures leading to the accident were in most cases known before the accident took place. This demonstrates that failures which are not handled properly may develop into critical situations and accidents. This is a blind spot because the biased focus on technicalities and “impeccable” safety inspections makes people reluctant to be open about their failures, concerns and mistakes.

We at SAYFR think shipping companies, and the whole industry, needs to change its focus. Thousands of auditors and inspectors across the world are engaged by classification societies, flag and port state authorities, vetting and insurance companies and HSEQ departments. They verify that ships do the right thing and comply with technical and procedural requirements. However, ticking boxes never made anyone safer.

Cover-up culture

Also, and worryingly, there is a cover-up culture causing errors and unsafe practices. There are now so many procedures and checklists that, in some cases, it is impossible to comply with all of them. The fear of failure is driving accident statistics, and surveys reveal that 45% of seafarers admit that they regularly do not comply with procedures.

I firmly believe that human factors are key to prevent threats and failures from escalating. Yet improving safety or performance is about improving not only individuals but also the collaboration between sea and shore staff, between officers and crew and between different nationalities and cultures on board ships.

Huge potential to reduce accidents

Although this is recognized, it is not always addressed, so I believe a new approach is necessary to improve collaboration and reduce risks. Indeed, collaboration is strongly correlated with the risk of accidents and business interruption. Our experience of working on multiple projects over the years shows that it is possible to reduce the risk of major accidents by up to 75%.

However, there is no quick fix to improve collaboration and implement behavioral changes through, for example, training courses. Changing the culture is key and that process takes time. To help operators improve their approach to safety, proven methodologies must be used.

Safety leadership behaviors

Put simply, it involves observing and identifying working methods on board and then working with all the officers and crew in teams and as individuals to deliver the eight-point safety leadership behaviors, namely:

• Giving feedback
• Speaking up
• Building trust
• Creating openness
• Showing care
• Facilitate learning
• Promoting teamwork
• Managing dilemmas

Experience shows that the focus on the eight behaviors work because they address the blind spot. By encouraging the participants to openly share errors, failures and concerns, they are able to break the chain of events that can lead up to a major accident. Also, this approach helps to move beyond the culture of punishment to the positive safety-enhancing culture where crew members help each other.

Culture assessments key to improving safety

In order to understand how the organization culture influences safety, there is a need to use methodologies specialized for this purpose. One thing that many people are ignorant of is that a key professional competence of organizational psychology is advanced mathematics and data analysis. The evaluation of organizational culture relies on interviews, observations and questionnaires applying psychometric instruments that are tailor-made to ensure valid and reliable results. The professionals drive the process while the data provides the results. As a consequence, the more and better the data on these topics, the more valid, reliable and to-the-point are the results.

However not all the instruments used in the industry are valid and reliable. In a recent review of safety culture maturity instruments, only 3 of 43 instruments were valid. Indeed, there is not one single test alone that can demonstrate the validity of a survey instrument. Therefore, SAYFR has developed tailor-made psychometric instruments to assess these topics and has a database of responses from about 300 000 seafarers.

When it comes to the qualitative and quantitative tests that can be made to verify validity, the basic one is content validity. This dictates how well a safety instrument addresses a safety issue. It specifies that the survey instrument adequately covers the topic being studied as well as having sound scientific grounds and references.

This is important because so many historical examples show risks that were identified well ahead of time but were not addressed. These include the Deepwater Horizon blowout, which claimed 11 lives and caused huge environmental damage, rig personnel had knowingly by-passed safety barriers. In this case, failures were identified but the root cause of the problem – i.e. human neglect, whether cultural or circumstantial – was not factored in.

Reliability of survey instruments through data

Reliability of the survey instrument is also key and that is ensured statistically by use of data. Factor-analysis is a statistical method used to describe variability among correlated items in terms of a potentially lower number of unobserved variables, called factors. For our instrument, the eight factors are equal to the eight SAYFR leadership behaviours (8SLBs) mentioned above.

Moreover, predictive validity is the instrument’s ability to predict something in the future such as an event, or correlations with instrument measurements made by other instruments. If an organization scores low in terms of the 8SLBs, it is a good indicator of future problems. This has been shown on a number of occasions when departments, units or suborganizations have received low 8SLB scores only to have accidents occur in the intervening time, before action was taken.

Predictive validity can also be applied to solutions. When action was taken based upon a low 8SLBs score, a shipping company experienced a 60% reduction in the frequency of serious accidents, to a level which was maintained five years subsequent to the investigation.
Concurrent validity and construct validity are also important elements. Concurrent validity measures the correlation between two independent measurements performed at the same time. An increase in the ability to manage failures, for example, will necessarily correlate with the number of incidents that occur.

Construct validity is when a theoretical model of cause and effect – for example, do the improvements prescribed following appraisal of the 8SLBs – accurately replicate the real-world scenarios they are intended to represent? Construct validity is the ultimate validity measurement, and necessarily incorporates all other validity factors.

Reduction in the frequency of serious accidents

Also, it’s not only the psychometric instruments that rely on data. The use of digitalization, the internet of things (IoT), sensor data, machine learning, and big data has picked up in recent years. The idea is that those with the most data can create the best analytics and forecasts. With the use of more quality data, risk assessments and worst-case scenario simulations provide reliable predictions and identify effective interventions to prevent accidents.

In short, what we at SAYFR see is that the best shipowners and operators have a proactive organizational culture that goes beyond ticking the ‘compliance boxes’ and instead applies a collaborative, trusting approach from top to bottom in the company’s organization. This also includes assessing culture using valid and reliable survey instruments. This is what really helps to improve safety.

Source: www.maritimeprofessional.com

Author: Dr. Torkel Soma, Chief Scientific Officer, SAYFR

Image: www.pixibay.com

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The zero-emissions vessels, which will be constructed for New York-based Zeeboat and available for charter from 2025, will run entirely on battery power, without the use of diesel engines—a first for towboats in North America. Vancouver, B.C.-based Shift Clean Energy will deliver the battery energy storage systems.

ISS, which was selected in 2021 to provide general contract, project management and vessel support services for the manufacture and delivery of the first-of-their-kind vessels, said its request for proposal (RFP) will be open form May 15 through June 30, 2022 and is for construction of the first hull, with options for up to three additional hulls.

The fully-electric vessel is based on The Shearer Group, Inc.’s (TSGI). proven 95- by 34-foot  towboat hull design, which is said to increase water flow to the propeller and improve overall efficiency of the barge/towboat combination by more than 10% compared to traditional towboat designs. When coupled with an azimuth thruster pod drive system, the hull design will improve overall efficiency by more than 30% when compared to conventional towboats, the Houston-based naval architecture and marine engineering firm said.

The project partners said their first goal is to enable greener transit with zero-emissions towboats, but they will later work toward a joint development of electrification technologies to further reduce the carbon footprint of ports and harbors.

“Moving carbon-intensive processes, like shipping and port management, to electric power sources is a critical step to meeting net-zero emissions targets,” said Wade Stockstill, ISS CEO. “Our electrification technologies and track record dovetail neatly with innovations from partners like Shift Clean Energy, enabling ISS to deliver turnkey solutions to some of today’s biggest green energy challenges.”

ISS said interested shipbuilders should contact its director of business development, Jessica Lewis, at Jessica.Lewis@iss-na.com for RFP submission information and detailed project specifications.

Source: www.marinelink.com

Image: www.pexels.com

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The international freight transport insurer said it is calling for increased vigilance to ensure secure and safe lithium battery supply chains following a number of recent fire incidents affecting container transport, ro-ro ships and air cargo movements allegedly involving lithium batteries.

E-commerce consumer demand for a wide variety of rechargeable products is driving increased shipments of lithium batteries, but these batteries now carry more energy, and aren’t always being tested.

However, the company added that revised regulatory restrictions regarding the carriage by air of lithium batteries, which took effect from April 1, may result in greater volumes being transported by surface modes.

“Understanding the risks is crucial,” commented TT’s risk management director, Peregrine Storrs-Fox. “As with many successful technologies, market demand has outpaced the development of safety regulations. Since the mid-1980’s lithium batteries have been classified under dangerous goods regulations for transport based on the weight of lithium contained in the cells or batteries and the potential hazard presented by a given battery is also related to the amount of lithium it contains.

“However, as technology has advanced, the amount of energy derived from the active material has increased by up to 50%, leading to regulatory mismatch where provisions are essentially framed around mass and energy output.”

Lithium batteries are required to be certified to an international standard involving a rigorous series of tests performed by an approved independent testing laboratory, to ensure they can both withstand everyday use through their expected lifetime and the rigours of transport, explained TT Club.

Responsibility for testing and achieving certification rests with the shipper and/or manufacturer. The sharp rise in demand has been accompanied by supply of cheaper, poorer quality and untested batteries, including refurbished and even homemade power banks. E-commerce platforms have facilitated a global trade in potentially lethal products, often circumventing global standards and regulations.

Throughout their intermodal journey the primary risks exist when batteries are poorly manufactured, untested or defective; these have a higher propensity to malfunction.

However, supply chain risk – at any point of handling, storage and transport – is compounded by used, fully or partially charged batteries. As such the reverse logistics of batteries must be carefully managed; damaged and faulty products being returned or shipped as waste for disposal or recycling present increased risk.

The consequences of lithium fuelled fires can be more extensive than others.  They are very difficult to extinguish, prone to thermal runaway and present an explosion risk. Due to the heat generated, re-ignition once a fire has been extinguished is an additional risk.

The UK government’s Zero Emission Flight (ZEF) Delivery Group recently confirmed it aims to make use of battery and hydrogen technology to make zero-emissions flights feasible.

US ULD manufacturer Satco also recently opened a $10m air cargo safety research centre (ARC) for Unit Load Devices (ULD) featuring a fire safety test facility, in response to the increase in products using lithium-ion batteries.

And Qatar Cargo recently invested in Safran Cabin’s new Fire Resistant Containers (FRC) as it aims to take a lead in countering the risk posed by lithium battery shipments.

Source: www.aircargonews.net

Image: www.pexels.com

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The Xeneta-owned data provider’s latest numbers show that air cargo volumes decline by 8% year on year in April following on from a 4.5% fall in March.

Meanwhile, capacity increased by 1% year on year in April, resulting in a nine percentage point fall in the global dynamic load factor – taking into account both weight and space –  to 62%.

However, load factors were “exceptionally high” in April last year at 71%.

CLIVE said that the conflict in Ukraine and Covid restrictions, and the rising cost of living were all having an impact on air cargo.

The fall in demand is likely “exacerbated by the staff shortages jolting airport handling services and manufacturing production”.

Despite the lower volumes and load factors, airfreight rates in April increased by 26% on last year.

“The rationale behind lower load factors and higher rates is the bottleneck on the ground – which appears to be being caused now by not only the shortages of people handling cargo at airports around the world and the severe lack of truck drivers to move the goods, but also by a wider shortage of people for lower paid logistics jobs,” said Niall van de Wouw chief airfreight officer at Xeneta. “We are now seeing this larger theme impacting the entire supply chain.”

Shortages of goods in stores or available online, longer lead times for some products, higher shipping costs, and flight delays and cancellations are all consequences of these market conditions, he added.

“The hike in living costs and lower disposable incomes for consumers are other undoubted contributors to the slowdown in volumes.”

Looking ahead, van de Wouw said that the re-introduction of passenger services for the summer season would also begin to impact the market.

On the transatlantic, for example, load factors dropped by 12 percentage points in one month.

“This was caused by a big jump in North Atlantic passenger capacity as airlines stepped up their summer schedules,” CLIVE said.

Additional passenger flights are also expected to “takes some of the heat out of the demand/supply market,” he said, and potentially lead to a downward pressure on rates.

“During the last week of March, capacity increased by 15% compared to the previous week,” said van de Wouw. “This significant increase in space reinforces our previously stated forecast that the North Atlantic market will most likely be the first to return to some kind of normal, because of the high share of belly capacity on this lane.

“In terms of the dynamic load factor, we are seeing this shift starting to happen as we move from a Seller’s market to a Buyer’s market for air cargo. However, the issues on the ground might delay the Buyer’s market a bit longer.”

Source: www.aircargonews.net

Image: www.pexels.com

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Intelligent supply chains. Intelligent technologies, such as automation, remote fleet management, and cargo tracking, are transforming supply chain technology to provide in-depth, real-time insights into locations and cargo status.

Cloud-based GPS and RFID technology provides instantaneous updates on cargo location, whether in warehouses or in transit, and assessing transportation performance and efficiency.

Digital thread. A digital thread is a communication framework that can share information to data consumers in a continuous feedback loop. A communication framework can ensure the entire supply chain is responsive as shifts in volumes, manufacturing, design, and through-life service occur.

For this to be effective, workflows and people need to be integrated. This marks the evolution from supply chain network to integrated value chain, allowing suppliers and customers to achieve collaboration and efficiency while reducing costs.

Demand-driven supply chain management. In transportation and logistics, decisions need to be made quickly and agility is essential. Demand-driven supply chain management has been part of the industry for some time, but the high volumes of data and deep insights require a step up from traditional methods. In the past, forecasting was based on historical demand, but that may not be enough with the influx of data and current demands.

IoT-embedded sensor technologies enabled with predictive analytics and machine learning can gather, analyze, and report insights from the environment and provide real-time responses to stay agile in the face of increasing demands. Data also offers insights to inform decision-making and build strategies and contingencies to adapt to future obstacles and maintain high levels of customer service, sales, and efficiency.

Cyber threats. Bad actors have more opportunities to exploit vulnerabilities in a digital supply chain, especially with third-party vulnerabilities that grant access to the real target. Conversely, manufacturers can have gaps that provide access to suppliers, destroying brand relationships across the entire ecosystem.

Suppliers and manufacturers need a rigorous protocol and evaluation process to assess risk and create stringent security across organizations and partnerships.

Meeting customer expectations. Customers have become used to fast order processing and deliveries and have little patience for delayed orders. To respond to these demands, some manufacturers are switching to centralized distribution and real-time inventory management.

The increasing demand for hyper-customization is also fueling shifts and linking the customers to the supply chain. Rapid prototyping and additive manufacturing are restructuring supply chains and more manufacturers are choosing on-premises manufacturing capabilities with lower waste.

Digitization holds promise for addressing current challenges in the supply chain environment and creating more opportunities moving forward.

Author: David L. Buss , CEO, DB Schenker

Source: www.inboundlogistics.com

Image:

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As we enter year three of the COVID era, companies worldwide are grappling with an all-too-familiar array of supply chain challenges—supply uncertainties, capacity and labor shortages, long transit times, and sky-high transportation rates. Tough times call for fresh strategies. As companies seek to reboot their supply chains for better success in 2022, here are some tips on how to navigate the new normal.

1. Digitize to Manage Uncertainty. Before you develop a supply chain plan, you first need to establish certain parameters—for example, how much lead time a supplier requires to produce a product, and how much demand you expect. Unfortunately, right now, the figures that underlie supply chain plans are anything but solid.

“Supply chain organizations are faced with tremendous disruptions, just trying to respond to the variability that’s occurring,” says Mark Balte, executive vice president, supply chain innovation, at Atlanta-based supply chain solutions provider Logility.

To manage variability, collect as much data as you can about supply and demand and apply machine learning to develop a sophisticated picture of changing conditions over time.

Take demand sensing, for example. “If we put a plan in place four or six months ago, the demand pattern is going to change as we get closer to that demand date,” Balte says. The more data the company collects, the better it can predict actual demand.

“We can begin planning earlier, perhaps make a change,” Balte explains. Maybe a company expects a shipment at the Port of Los Angeles. “I was planning to move it to a distribution center in Colorado,” he says. “Now I may only want to move part of it to Colorado and some to Dallas.”

Opportunities abound to collect data that supports decisions, with new Internet of Things (IoT) devices coming on the market all the time. “But companies should begin the journey now, at least collecting data within their own enterprise, and then extending that outside the enterprise,” Balte says.

Data from publicly available sources, carriers, and IoT devices in company-owned or supplier factories can enhance the knowledge base, producing better forecasts.

2. Rate Sources for Risk. Data analytics can also help you develop more resilient sourcing strategies. For instance, Stanley Black & Decker, based in New Britain, Connecticut, analyzes risks its suppliers face due to COVID infections or various other challenges. Those risks point to potential supply chain disruptions.

“We’re able to quickly narrow down the list of higher-risk suppliers that we can evaluate much more carefully to see if their production rates have been hit,” says Guru Bandekar, chief supply chain officer for the company’s Global Tools and Storage business.

Stanley Black & Decker dual-sources or multi-sources components whenever possible. If supply from one vendor starts to look uncertain, the company can shift more order volume to a different supplier.

When dual- or multi-sourcing isn’t possible, Stanley Black & Decker maintains safety stock, setting the volume based on how long it would take to recover from a disruption. “If it will take us five weeks to re-source that part, because it takes time to get a new supplier up and running, then, to put it simplistically, we want to have five weeks of safety stock,” Bandekar says.

3. Move Your Manufacturing. Supply chain disruptions have dramatically driven up freight rates and lengthened transit times. A container shipment from Asia to the United States that would have cost less than $2,000 a few years ago cost as much as $20,000 in 2021, according to Bloomberg.com. And capacity shortages and port congestion have added weeks to the crossing.

“A shipment from Asia to the United States used to take four weeks by ocean,” says Mustafa Hossaini, business development manager at Westec Plastics Corporation, a contract manufacturer of plastic parts in Livermore, California. “Currently we see transit times of six to eight weeks.”

Since the start of the pandemic, Westec has experienced an uptick in inquiries from U.S. companies that might want to move their production from overseas to the United States.

While labor costs in the United States are relatively high, in some cases, domestic production cuts shipping costs so much that the math works out in favor of reshoring.

Hossaini cites a company whose drug delivery product uses plastic parts made in Europe. “They told us that on the last batch of products they received, the shipping costs were $8,000,” he says. “Our shipping rate to them would literally be $150, because they’re located a half hour away from us.”

Companies might also embrace domestic manufacturing to gain convenience and peace of mind, since they can easily visit a contract manufacturer to oversee quality issues and resolve problems, Hossaini says.

In addition, reshoring might eliminate language barriers. And many U.S. companies want to promote their products as “Made in America.”

Stanley Black & Decker strives to source components and assemble products as close as possible to the markets where they are sold. When local labor rates make this hard, the company controls costs through automation. Although the company has used this strategy since the advent of new tariffs in 2016, localization has grown even more important since the start of the pandemic, Bandekar says.

4. Get Flexible with Carriers. In an era of scarce capacity, shippers that strive to accommodate truckers’ needs have an easier time getting freight on the road. “We advise companies to be as flexible as possible with transit times, hours of operation, and trucks they would accept,” says Dave Menzel, president and chief operating officer at Echo Global Logistics, a third-party logistics (3PL) company based in Chicago.

Say a shipper wants a load picked up at 9 a.m., but the carrier can’t supply a truck until 1 p.m., Menzel says. If the shipper really wants that truck, it might adjust its schedule.

Shippers should also strive to get trucks loaded and unloaded quickly, to minimize downtime for truckers. “If a facility has a reputation for long lines and difficulty getting loaded or unloaded, then that facility is a lot less attractive, and trucks will choose different options,” Menzel says.

Fast loading and unloading are especially hard these days, when a tight labor market and COVID-related absences can leave shippers short-handed. Logistics managers should keep that in mind when they book appointments with truckers.

“They should be realistic about what they can load in a given day,” Menzel advises.

Shippers should also provide leeway when drivers arrive a bit later than planned. “Instead of telling them they need to get a new appointment, and the next available one is in two days, you might say, ‘If you miss your appointment by an hour, we will work you in,'” Menzel says

5. Collaborate. Good relationships with carriers and customers can also help shippers better deal with challenges such as uncertain transit times and shortages of crucial resources.

For instance, Stanley Black & Decker relies on strong partnerships with carriers and logistics providers to gain a steady flow of information about the progress of containers on the water.

“We can use that information to predict when we will get the product and then make commitments to our customers, to the best extent possible,” says Bandekar. “Customers want speed, but if they can’t have speed, they want predictability.”

The company also works with over-the-road providers to manage mutual challenges. “What can they do to get more chassis, or attract more chassis toward our supply needs?” Bandekar asks. “What can they do to attract more drivers?”

Stanley Black & Decker and its carriers hold many more conversations on such topics these days. “We are helping them prioritize, and they’re helping us understand the challenges so we can prioritize based on the changing dynamics,” he says.

Shippers may also overcome obstacles by sharing information with customers. “Don’t be afraid to discuss with customers the problems you’re facing, because they are going to face the same problems,” says Lewis Black, chief executive officer of Almonty Industries, a Toronto-based mining firm that is a major producer of tungsten.

Almonty serves customers in the electronics, medical device, aerospace and other industries. The company’s challenges these days include trouble procuring consumables such as drills, explosives and various grades of oil, as well as slow shipping, tight capacity, and high freight rates.

Sometimes, asking for a favor can help. “We ask our customers to send us a spare container if they have one,” Black says. Or, they might ask a customer that manufactures drill bits to send some half-finished drill bit or ones they are going to recycle. “Send them to us and we’ll use them,” he says.

6. Retain Your Talent. The Great Resignation has hit supply chain organizations hard. Companies, especially those involved in e-commerce, are trying to add front-line workers and new facilities to meet increased demand. “But at the same time, you have constant and accelerating workforce turnover,” says Dan Johnston, co-founder and chief operating executive of WorkStep in San Francisco.

WorkStep addresses the supply chain labor shortage with two technology platforms—Hire, a recruitment tool, and Retain, which employers use to gain insights to reduce employee turnover.

Companies have traditionally treated warehouse associates, drivers, and other supply chain workers as cogs in a machine, easy to replace, Johnston says. But in today’s tight employment market, that mindset has changed.

“If you can keep the talent you have, you have to compete less for this incredibly hard-to-find new talent,” he says. “And you can deliver more goods at a better pace to your end customers.”

WorkStep’s customers use Retain to collect feedback from employees periodically, asking their opinions on factors that affect job satisfaction. Using a mobile phone or similar device, the employee takes a minute or so to answer a survey. Retain aggregates and analyzes the results, spotlights areas of concern, and then, when the company makes corrections, tracks how those changes influence turnover.

Using Retain, a 3PL that runs 350 warehouses learned that managers in some of those buildings weren’t following correct orientation procedures for new employees. “You might see an average satisfaction with orientation of 90% across the organization, but in 10 buildings it was 50%,” Johnston says.

By correcting those and other problems Retain uncovered, the 3PL cut turnover among new hires by 36%.

7. Improvise. Beyond strategies to help navigate the current supply chain environment, companies might also benefit from tactical creativity.

Black recalls a time in the 2000s when Almonty Industries struggled with a shortage of rubber tires, which the mining company’s underground vehicles consume in large quantities. “What we came up with was very rudimentary, almost medieval,” he says. “We started making steel wheels with wooden tires.”

Almonty improvises in a similar way to beat today’s shortage of shipping containers. These are especially hard for Almonty’s European operations to get hold of, since the shipping lines focus so heavily today on their lucrative Asia-to-North America lanes.

“There are no containers around, but there are lots of old shipping containers in scrap yards,” Black says. Almonty retrieves those old containers, welds them back together and installs new, government-approved security latches.

“We have someone driving around who rings us up and says, ‘I saw an old shipping container in pieces in a scrap yard,'” Black says. “We send a truck down there, buy it, and bring it back.”

Unfortunately, once Almonty uses the recycled container to ship tungsten to the United States, someone there grabs it and the company never sees it again.

LONG-TERM SHIFT

While pandemic-related disruptions have prompted many changes, companies are not likely to revert to the old ways as the virus finally runs its course. “These capabilities we are building will be the way we operate in the new normal,” says Bandekar. “It’s a long-term shift.”

COVID has thrown a spotlight on issues that have always existed. But when normalcy comes back, other environmental issues, such as global warming and forest fires, will continue to disrupt the flow of goods.

Says Bandekar: “The way we manage our supply chains in the future will be much different from how we managed them in the past.”

Source: www.inboundlogistics.com

Image: www.pexels.com

The post 7 Strategies to Reboot Global Supply Chains appeared first on Cargo News Today.

Many corporations have taken proactive steps toward improving customer and employee satisfaction and have appreciated the rewards of taking this stance. At Legacy, we found that truck drivers truly enjoy and value their job despite recent challenges and there is a good reason for this.

In contrast to an office, drivers spend their days on the open road enjoying the beauty of the countryside or the bustle of the city. They experience the freedom of working on their own and the reward of delivering valuable products to customers every day.

Maintaining a strong driver workforce to meet demand has become increasingly important. Acute shortages of front-line truck drivers have directly impacted the supply chain. It is critical that companies nurture these valuable team members for long-term retention.

Ensuring employees, particularly drivers, are happy is an initiative that every employer should take seriously. Legacy identified the following five key factors that contribute to improving and optimizing truck driver retention rates.

2. Understand the market for quality drivers and build compensation packages accordingly. Wages, as well as bonus structures, are accelerating rapidly as demand increases. You must remain continually competitive to attract and retain good drivers. Creative benefits, like providing streaming services, can help round out your offerings.

3. Stay in communication with drivers. This ensures that they understand the value of their job, can provide powerful feedback, and bring new ideas to management from their on-the-road perspective. Listening often is a valuable way to keep drivers happy and engaged.

4. Recognize high performance. When drivers go above and beyond in terms of safety, service, and productivity, provide incentives and formalized recognition programs to show your appreciation. It also makes sense to establish highly visible key performance indicators so both management and staff are working toward the same goals.

5. Use technology more effectively. Technology is a powerful tool that can help drivers find routes, use safer roads, and minimize traffic jam situations. Fleet tracking devices and transportation management systems can be used to optimize their drive. AI-powered dashcam programs that proactively help protect drivers from potential accidents can drive safety and compliance improvements.

The individuals on the road ensure customers’ products make it to their destination safely and on time. This is vital to our economy’s livelihood.

Manufacturers, consumer goods companies, and retailers must get creative, smart, and strategically savvy when it comes to overcoming the challenges of supply chain demand through transportation effectiveness, and that includes a major consideration of how they attract and retain quality drivers.

While it’s becoming a balancing act between higher costs and meeting demands, one fact is certain—without a strong transportation system, backed by happy drivers, customers would not receive their products on time.

Author: Mike Glodziak, President & CEO, Legacy Supply Chain

Source: www.inboundlogistics.com

Image: www.pexels.com

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For more than a month, the Ukrainian army has been resisting Russian occupation in a bloody battle. Although the people of Ukraine and Russia suffer most directly from the war, the rest of the world has also indirectly fallen victim to Putin’s decisions. I have already explained the impact the war in Ukraine has had on the freight sector as a whole, but I would now like to highlight the ongoing air transport sector. It is currently suffering not only from soaring fuel prices, but also from a lack of capacity, which is also having an irreversible effect on consumer wallets around the world.

Capacity is affected not only by ban but also by destruction

In early March, two weeks after Russia’s invasion of Ukraine, Northeast Asia-Europe’s transport capacity had fallen to 22% since the pre-war period. Now, almost a month later, it is even lower. The capacity of air carriers is most affected by the sanctions imposed on Russia. As a result, the delivery of goods to Europe is banned for the largest Russian cargo airline operator Volga-Dnepr, whose subsidiary AirBridgeCargo has more than 800 different cargo aircrafts. However, this is not the only aspect that affects the capacity of hauliers. Aircrafts destroyed as a result of war, which rubs salt into the wound of the industry, also play an important role. For example, in the battle against Hostomel Airport, the industry lost a historically unique specimen – the world’s largest cargo plane, the Mriya. Although the Ukrainian government has announced that every effort will be made to rebuild the plane, it will take time and at least $ 3 billion. It has also recently been confirmed that AN-26 and AN-74 aircrafts have been destroyed as a result of the Russian invasion.

To Asia around Russia

Due to the war, many air carriers have decided not to cross the airspace of Russia, Ukraine and also Belarus, citing the safety factor of employees as the main reason. This position has been publicly confirmed by industry giants such as UPS, DHL and FedEx, which own about 1,000 cargo planes. I believe that not only the issue of security, but also the image and political pressure of the company played a major role in making this decision. Now that most companies in various sectors are leaving Russian territory, thus clearly expressing their political position, the big logistics and freight companies must not lag behind either. It is clear to them, as to any other business expert, that the image of a company is easy to tarnish but hard to polish, and the smartest way to avoid becoming a black sheep right now is to turn your back on Russia.

Consumers become the victims

A series of all the above decisions and events will inevitably increase the costs for air cargo carriers, which will not only hurt market players but also consumers. There are already companies in the industry that are increasing the additional costs for international freight. One of them is FedEx, which took such a step in March. Although the company is one of the first to change its pricing policy as a result of events, it will certainly not be the last.

The most logical solution – more cargo planes

Once again, as in the Covid-19 outbreak, when the industry was struggling with a lack of capacity, the most effective solution is to transform passenger planes into freight transport. Such restructuring of airlines would significantly increase the capacity of air cargo carriers. Moreover, according to Insider, it is more profitable than buying new cargo planes. According to the media, such a move could save companies hundreds of millions of dollars. Airlines such as Qatar Airways and the Emirates Group, known to the general public as passenger airlines, took this step in early 2020. At the end of March, Alaska Airlines joined them, adapting five different passenger planes for cargo transportation.

Whatever the future decisions of air carriers, one thing is clear: only by working together in a crisis situation will it be possible to meet the needs of both the industry and the customer.

Author: Roland Peterson, logistics expert

Image: www.pexels.com

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The past year has opened the door to many risks—and response strategies—that supply chain leaders must now keep top of mind when making critical inventory, demand, logistics, and pricing decisions.

STOCKPILING AND DEMAND VOLATILITY

A wave of organizations took up the practice of stockpiling over the past year to mitigate demand and offset transportation shortages and rising prices. However, this practice can often create more headaches than it alleviates. There are costs associated with stocking extra inventory, which may very well end up being passed on to the consumer.

In this scenario, supply chain leaders should look to a more active approach to demand management to help mitigate excess inventory and avoid passing added costs on to the consumer. Identify the demand signals that are critical to your business—whether raw point-of-sale data, social sentiment, or socioeconomic data—and then align on the actions you can take to actively shape demand to account for your increased inventory.

The challenges of the past year have also demonstrated how reliant organizations across industries are on a well-run ecosystem of suppliers, manufacturers, and logistics providers.

This ecosystem is often a global one, and while that can help with supply chain diversification, it can also lead to bottlenecks and disruptions—from tariffs and political negotiations that impact trade routes, unplanned weather events, or COVID flare-ups that can lead to factory or border closures, or temporary reduction of capacity.

Supply chain leaders can better prepare for unplanned disruptions by embedding more agility and visibility into their global ecosystem. Leveraging end-to-end supply chain management technology to share data across the supply chain in real time can help replan if downtime hits a supplier, or a factory is closed in a region. It is easier to change course on the fly, mitigate potential risk, and drive forward.

FREIGHT AND LOGISTICS

While it may have worked in the past, making assumptions at the beginning of the year about freight capacity, driver and warehouse availability, or associated costs, is no longer an option. Instead, supply chain leaders are tasked with navigating increases in shipping volume and diesel prices, a capacity squeeze, and a driver shortage—and that doesn’t account for unplanned disruptions.

Strong forecasting capabilities can help supply chain leaders more accurately predict their freight needs, and when combined with real-time visibility, can help make trade-off decisions to expedite or change lanes. They can also use more accurate forecasting to make pricing and promotion decisions that shape prime shopping windows and alleviate a potential logistics crunch in the future.

INTERACTION EFFECTS AND SCENARIOS

Often, these risks are scored or assessed independently, but never frequently compounding at the same time. Traditional risk management approaches often do not assume interaction effects, which leaves businesses more exposed when their often linear, discrete assumptions interact and produce far higher, or lower, outcomes than anticipated.

To counter, a robust and configurable scenario management approach that hinges on identifying “potential” interactions and elevating them for CXOs to review can help business leaders understand potential interactions and prepare for destabilizing options.

Author: Evan Quasney, Global VP of Supply Chain Line of Business, Anaplan

Source: www.inboundlogistics.com

Image:

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