Global Cargo News

Global Cargo

News

September - October 2019

Gartner top 8 technology trends 27

How blockchain can create

opportunities 29

Automated warehouses 31

Global Outlook

US-China

tension

adds to

slowdown

EDITOR’S COMMENTARY

Editor Wael Elazab explores how

businesses are adapting operations 2

LOGISTICS: NEWS IN REVIEW

Americas 5

EMEA 7

APAC 9

GLOBAL OUTLOOK

US-China tension adds to global

slowdown 9

TRANSPORTATION: AIR

IATA: Air cargo continues to face

difficulties as trade tensions increase 11

According to IATA the period Q2 2019 saw

air freight tonne kilometres (FTKs) fall by

1.8%, down 3.3% in year-on-year terms.

Emirates SkyCargo expands its

pharma capabilities 12

Following up on the success of its pharma

corridors initiative, Emirates SkyCargo has

expanded its initial network of 12 pharma

stations to 20.

Swissport targets growth in the

pharma sector 14

Swissport is investing in a new air cargo

facility at Brussels Airport as it targets

growth in the pharma sector.

TRANSPORTATION: MARITIME

Container market disruption seems

likely as uncertainty mounts 15

Global shipping consultancy Drewry

highlights concerns of a slowing global

economy.

May sees decline in contracted ocean

freight rates 16

May saw an eye-catching 11.5 percent rates

surge, with US container rates for imports

climbing by close to 20 percent.

World’s largest container vessels

cement Hong Kong’s status 18

The Hong Kong Seaport Alliance (HKSPA)

welcomed OOCL Hong Kong on its maiden

call to Hong Kong.

TRANSPORTATION: RAIL

CN and CSX announce new

intermodal service offering 19

CN’s greater Montreal and Southern

Ontario areas, and the CSX-served ports

of Philadelphia, New York, New Jersey

and the New York City metropolitan area

working together.

FESCO and JSC launch Korea to

Europe service 20

The new service serves different cargoes,

including car parts and equipment, from

the Republic of Korea to the European

countries.

Locomotive delivery boosts Tupras

Refineries 22

Wabtec completed delivery of five dieselelectric

PowerHaul® series locomotives to

Körfez Ulastırma, the subsidiary of Turkey’s

largest refinery Tüpras operating in railway

transportation.

TRANSPORTATION: ROAD

Predicting an efficient and cleaner

journey ahead 23

optiTruck teProject puts predictive fuel

optimisation to a long-haul test, driving

from Turkey to Italy; 5,000km later,

numbers were totted up and the journey

assessed.

The Great White North welcomes

truckers 24

PrePass Safety Alliance and British

Columbia Ministry of Transportation

and Infrastructure allow PrePass users

to bypass weigh stations in British

Columbia.

Maintaining Turkish trade lanes 26

Despite the ongoing economic

uncertainties in the country, combined

with currency volatility and inflation,

Turkey remains one of Davies Turner’s most

important trade lanes

TECHNOLOGY

Gartner top 8 technology

trends for 2019 27

AI, digital twins and blockchain are some

of the trends transforming supply chains.

How blockchain can create

opportunities 29

For companies reliant on strategic

partnerships or those seeking to

increase the transparency of interactions

between consumers or business

partners, blockchain presents a world of

possibilities.

WAREHOUSE

How to build an automated warehouse

system: which new technologies do you

need and why? 30

Building an efficient automated

warehouse system requires careful

selection of the right technologies

14

19

23

29

September - October 2019 www.globalcargonews.com

1

EDITOR’S COMMENTARY

Global Cargo News

Managing Editor

Wael Elazab

Email: editorial@globalcargonews.com

Deputy Editor

Lisa Head

Email: deputy@globalcargonews.com

Production Manager

John Farrell

Email: production@globalcargonews.com

Accounts Manager

Iris Brown

Email: accounts@globalcargonews.com

Subscriptions Manager

Natalie Kramer

Email: subs@globalcargonews.com

Advertising Manager

Ed McCauley

Email: advertising@globalcargonews.com

Subscription Rates

£300/€370/USD480

Contact

subs@globalcargonews.com

Global Cargo News,

80-83 Long Lane

London EC1A 9ET ,

United Kingdom

Tel: +(0) 20 395 0227

Fax:+(0) 20 395 0228

www.globacargonews.com

Whilst the information and articles in

Global Cargo News are published in

good faith and every effort is made to

check accuracy, readers should verify

facts and statements directly with official

sources before acting up on them, as the

publisher can accept no responsibility in

this respect.

Global Cargo News is published by

Vickard Limited. It is available on a

subscription package basis only and is

distributed by air mail bi-monthly.

All contents copyright 2019 Vickard

Limited. No part of this publication may

be reproduced or stored in any form by

an mechanical, electronic, photocopying,

recording or other means without the

prior written consent of the publisher.

Vickard Limited | Registered in

England:11909757 | Registered Address:

80-83 Long Lane London EC1A 9ET United

Kingdom |

With US-China trade tensions continuing

to focus opinion, in this issue we take

a look at the impact on the global

economy and explore how businesses are

adapting operations in response.

For some businesses, adaptation involves

acquiring a competitor or forming a joint venture,

and for others it means launching a new service

or targeting a new market segment.

Across the global cargo community, there’s

evidence that this process of adaptation is

currently underway — DSV acquiring Panalpina,

eBay launching a managed service, Maersk

entering online trucking, and Amazon Air

expanding its cargo fleet.

This issue of Global Cargo News magazine

also looks at transportation providers targeting

pharma in the air sector, cargo diversification

in the rail sector, and predictive technology for

fuel optimisation on roads.

Supply chains are becoming increasingly

globalised and complex, included is a review

of the top eight technology trends that Gartner

has identified as having broad industry impact,

but are yet to be widely adopted. There’s also

blockchain on the agenda, and its potential to

create opportunities for joint ventures between

customers or business partners.

Finally, with the growing interest in automated

warehouse systems, we highlight some of the

new tech you need, and why you need it when

building an automated warehouse.

We hope the news and insight in this issue

adds to your understanding of the opportunities

and challenges in the global cargo sector, and

as always, we welcome your feedback.

Editor

Wael Elazab

2

www.globalcargonews.com September - October 2019

AMERICAS

XPO Logistics announces second quarter 2019 results

XPO Logistics second quarter revenue

was $4.24 billion, compared with $4.36

billion for the same period in 2018, while

operating income was $258 million,

compared to $228 million for the same

period in 2018.

Bradley Jacobs, chairman and chief

executive officer of XPO Logistics, said,

“We’re implementing innovations in

North American LTL to drive the next leg

of profit improvement. Our workforce

eBay is introducing Managed Delivery, a

cost-effective fulfillment service to launch

next year, beginning in the U.S., that will

provide shoppers faster and more reliable

delivery on millions of popular products.

The initiative will enable sellers with

high-volume inventory to meet rising

productivity tools are returning positive

results in 18 pilot service centers ahead

of the national roll-out to all 290 LTL

centers this year. In addition, we’re

developing an entire suite of proprietary

tools that utilize machine learning for

dynamic pricing, route optimization of

pickup and delivery, linehaul efficiency

and yard management. We’re on track

to deliver at least $1 billion of EBITDA

in LTL in 2021.”

consumer expectations while reducing

cost and complexity.

Managed Delivery will provide sellers

the ability to store, pack and ship their

products through expert logistics partners

managed by eBay. The new service allows

sellers to store inventory closer to buyers

in strategically located warehouses across

the country, resulting in faster delivery

time and lower shipping costs.

eBay will power the Managed Delivery

experience through a global technology

platform and third-party partners will

run the operations, creating a seamless

end-to-end fulfillment process for sellers

that will allow them to manage their

inventory through Seller Hub and other

industry-standard solutions. The new

LOGISTICS : NEWS IN REVIEW

eBay to launch Managed Delivery, an end-to-end fulfilment service for sellers

service will give sellers the ability to offer

the free shipping buyers want with a more

reliable and faster delivery promise – and

hence drive their sales on eBay.

“A common request we hear from

our high-velocity sellers is to help make

delivery of high-volume items easy and

fast,” said Devin Wenig, eBay President

and CEO. “Managed Delivery will be a

competitively-priced logistics solution

for businesses selling high-volume goods

in popular categories like electronics,

home and garden, and fashion. The

implementation of this service will

dramatically lessen the shipping burden

on sellers, while improving the shopping

experience and making unboxing fun

for buyers.”


3


Amazon Air expands its cargo fleet

Amazon continues to invest in ways

to provide fast, free shipping for

customers. The company announced a

partnership with GE Capital Aviation

Services (GECAS) to lease an

additional fifteen Boeing 737-800

cargo aircraft. These fifteen aircraft

will be in addition to the five Boeing

737-800’s already leased from GECAS

and announced earlier this year. The

aircraft will fly in the United States out

of the more than 20 air gateways in the

Amazon Air network.

“These new aircraft create additional

capacity for Amazon Air, building on

the investment in our Prime Free One-

Day program,” said Dave Clark, Senior

Vice President of Worldwide Operations

at Amazon. “By 2021, Amazon Air will

have a portfolio of 70 aircraft flying in

our dedicated air network.”

“We’re delighted to support Amazon

Air’s dedicated air network,” said Richard

Greener, GECAS Cargo’s Senior Vice

President. “The capability of the 737-800

freighter will further Amazon’s ability to

provide reliable and regional delivery to

its customers for years to come.”

Amazon Air’s operation launched in

2016 supporting package delivery to the

rapidly growing number of customers who

love fast delivery, affordable prices and

vast selection. With advanced algorithms

and software used for capacity and route

planning, the Amazon Air operation

can transport hundreds of thousands of

packages per day. Amazon will open new

air facilities this year at Fort Worth Alliance

Airport, Wilmington Air Park, and Chicago

Rockford International Airport. The main

Air Hub at the Cincinnati/Northern

Kentucky International Airport will open

in 2021. Since its launch, Amazon’s air

cargo operation has invested millions

of dollars and created thousands of new

jobs at locations across the U.S.

AMERICAS

DHL invests $150m in

pharma and medical

device network

DHL Supply Chain is expanding its

pharmaceutical and medical device

distribution network by 40 percent this

year with an investment of $150 million.

With the ultimate goal of bringing

critical healthcare products closer to

trade partners and patients, DHL Supply

Chain plans to build nine new facilities

by the end of 2019.

“This expansion allows DHL Supply

Chain to continue to deepen the

connections between our customers

and the patients they serve,” said Scott

Cubbler, President of Life Sciences &

Healthcare at DHL Supply Chain. “This

most recent expansion also helps us

leverage differentiated routes to market,

driving even greater efficiency and

productivity across the supply chain for

our customers. With this expansion, DHL

Supply Chain will have a total of 30 sites

designed to support pharmaceutical,

biotech, and medical device companies.”

These facilities, strategically located

within the United States, are fully licensed

with temperature controlled space

that supports pharmaceutical storage

requirements. The facilities also allow for

packaging and managed transportation

for integrated solutions.

Kuehne + Nagel continues expansion of its perishables network

Kuehne + Nagel successfully completed

the acquisition of Worldwide Perishable

Canada Co. (WWP). The company is one of

the largest freight forwarders in Canada,

in particular perishables cargo. With a

strong footprint on the East Coast, WWP

will strengthen the existing Kuehne +

Nagel perishables network in Canada.

Perishables logistics is one of our

strongest growth drivers at Kuehne

+ Nagel,” says Greg Martin, Regional

Airfreight Manager Kuehne + Nagel North

America. “Thus, we have been continuously

investing in the expansion of our dedicated

network: through selected acquisitions and

by connecting key production countries

to major markets. Setting up global

certified standards which are reflected

in our KN FreshChain solution, has further

strengthened our perishables network

worldwide, making it the largest in the

industry.”

“We are looking forward to joining the

Kuehne + Nagel Group. Combining the

strengths of both companies, we will add

outstanding value in the regional and

international perishables business. For

both, our customers and our employees

this will generate growing perspectives and

services,” comments Doug McRae, Chief

Operating Officer Worldwide Perishables

Canada Co.

4


EMEA

CEVA announces revenue increase for first half of 2019

CEVA Logistics, part of the CMA CGM

Group, announced its results for the

second quarter and the first half of

2019.

For the first half of 2019, revenue

increased by 2.5 percent in constant

currency to US$3,514 million.

On a reported basis, revenue in the

first half declined by 3.4 percent yearon-year

due to negative translation of

foreign currencies such as the TRY, the

EUR and the GBP into USD. Group’s

EBITDA was US$281 million, which

on a pre-IFRS 16 basis represented

US$85 million (same period of 2018:

US$119 million) resulting in an EBITDA

margin of 2.4 percent (same period in

2018: 3.3 percent).

Nicolas Sartini, CEO, CEVA Logistics,

commented: “CEVA went through

significant and structural changes

in the first half of 2019 against a

challenging macroeconomic backdrop.

We are currently focusing on the

turnaround of the Company through

deep operational changes and on

achieving positive free cash flow as

early as the fourth quarter 2019.”

The new management team is

focusing on top line improvement

with stronger business development

structures and stronger contractual

protections, a quicker resolution of

situations currently holding back

performance: underperforming

contracts in Contract Logistics,

including Italy, Ground operations,

notably in North America, quicker

roll-out of technology both in Freight

Management and Contract Logistics

in order to achieve more automated

processes and better standardization.

Finally, actions are underway to

reinforce internal processes, more

systematic sharing of best practices,

performance measurement tools

and employee engagement with the

objective of higher retention.


Kizad cuts fees to attract

investors

Khalifa Industrial Zone Abu Dhabi

(Kizad), has waived the charges for over

75 percent of its services, in line with

the Abu Dhabi Government directive

to encourage further investment into

the emirate.

CEO of Abu Dhabi Ports Captain

Mohamed Juma Al Shamisi said, “We

continue to support the government

initiatives to build an investor-friendly

environment by providing our partners

and customers with the incentives they

need for their businesses to thrive and

grow. We are committed to Abu Dhabi’s

drive to become a global gateway for

businesses from all parts of the world.

The cost of setting up and maintaining

a successful business at Kizad is more

achievable now than ever before. It is

an ideal opportunity for companies of

all sizes to benefit from such incentives

for either growing their business or

entering new markets.”


5


Maersk enters Indian online trucking market

DSV completes

acquisition of

Panalpina

EMEA

Maersk has announced its partnership with BlackBuck, India’s largest online

marketplace for trucking, to provide an online marketplace for containerised trucking

in EXIM logistics in India.

Announcing the collaboration with BlackBuck, Arjun Maharaj, Head of Sales,

Maersk South Asia, said, “Our customers are dealing with fragmented vendors with

varying service levels of communication, geographical, financial & infrastructural

dis-parities resulting in suboptimal supply chains. We have committed our-selves

to working with partners who understand these challenges, match our set of values

and have expertise in both logistics & technology.”

Speaking about the collaboration with Maersk, Ramasubramaniam B, Co-Founder

& COO – Strategic Initiatives said, “At BlackBuck, over the last 4 years, we have

developed our robust product & technology that maximises the billable kilometres

of a truck, delivering higher realization to the truck owners & driving a low-cost

transportation network to the shippers. Our product will add significant value to the

EXIM containerised trucking industry in India that has the additional complexity of

meeting the timelines of sea freight connections, apart from other regular trucking

related challenges. Maersk with their industry specific knowledge and expertise, will

help us trans-form this space through digitization.”

Aramex announces rise in second quarter revenue

Aramex announced a 4 percent rise

in second quarter revenue to AED

1,279 million, compared to AED 1,232

million for the same quarter in 2018,

while net profit reached AED 123 million,

compared to AED 122 million for the

same period in 2018.

Commenting on the results, Bashar

Obeid, Chief Executive Officer of Aramex,

said:

“Strong demand from e-commerce

continues to spur growth in volumes

we handled over the second quarter.

Our Domestic Express registered outstanding

performance and International

Express also enjoyed double

digit growth. This is a testament to

our strong brand, efficient services and

increasingly competitive positioning.

However, lower yields, mainly on the

cross-border International Express

business and changes in fulfillment

models, moderated our top line figures

and profitability. Freight-Forwarding

business performance came below

expectations as it was affected by

the regional economic uncertainty,

however, today our efforts continue

to be focused on commercial restructuring,

which will enable us to grow

that business line over the long term.

Our Integrated Logistics and Supply

Chain Management business had another

great quarter, as a result of our

efforts to capitalize on the growing

demand for those services, especially

from regional retailers wanting to tap

omni-channel sales.”

DSV has completed the acquisition of

Swiss logistics group Panalpina.

Panalpina is among the globally

leading providers of supply chain

solutions with approximately 14,500

employees in 70 countries. The

combination with DSV creates one of

the world’s largest transport and logistics

companies with a pro forma revenue

of approximately DKK 118 billion and

a workforce of 60,000 employees in 90

countries.

Jens Bjørn Andersen, DSV’s CEO,

commented; “We are very excited

to welcome Panalpina’s customers,

employees and shareholders to DSV.

Our two companies will achieve more

together, creating even more value for

all our stakeholders. The settlement of

the deal marks the beginning of the

integration process, during which we

will strive to provide the high level of

service our customers know and rely on.”

Pending the approval at an

extraordinary general meeting, DSV

A/S will change its registered name to

“DSV Panalpina A/S”. As the integration

progresses, all subsidiaries and

operational activities, however, will be

united under the DSV name and brand.

DSV expects to achieve annual cost

synergies of around DKK 2,200 million.

The cost synergies are expected to have

full-year effect by 2022 and will primarily

be derived from the consolidation

of operations, logistics facilities,

administration and IT infrastructure.

6


APAC

China to reduce logistics costs by $17.8 billion


UrbanFox expands to

Vietnam and Malaysia

China aims to reduce logistics costs by

nearly 121 billion yuan ($17.8 billion) this

year, the Ministry of Transport announced

at a news conference of the State Council

Information Office.

Spokesman Wu Chungeng said the

ministry will unveil a string of measures

not only to cut costs but to promote

innovative development of the industry.

China will continue to increase railway

freight volume, upgrade its water

transportation system, regulate highway

freight transport and speed up multimodal

transport in a bid to improve its logistics

network and optimize its structure, Wu

said.

The country will also expand the use

of pilot programs to deepen reform of the

administrative law enforcement system

in the logistics industry to improve its

efficiency; and it will streamline certain

fees related to ports, highways and

airports, he said. In addition, the ministry

will step up its efforts to manage the

effects of eliminating highway toll stations

at provincial boundaries.

The ministry also called for small

and medium-sized enterprises to forge

alliances for common development to

consolidate the fragmented logistics

sector.

UrbanFox – whose parent company

is Keppel Logistics - is expanding to

Vietnam and Malaysia with support

from Enterprise Singapore.

The company worked with Keppel

Land to establish online-to-offline (O2O)

capabilities at Estella Place shopping

mall in Ho Chi Minh City, Vietnam. The

O2O features allow shoppers to purchase

the mall’s products at its physical stores

or webstore. Customers can also opt for

in-mall collection or home delivery.

In Malaysia, UrbanFox was recently

appointed as a cross-border e-commerce

initiative partner by the Malaysian

Digital Economy Corporation (MDEC).

The company plans to set up a corporate

office and digitally enabled warehouse

in Shah Alam, Selangor.


7


JD Logistics posts breakeven

result in 2Q 2019

JD Logistics, the logistics arm of

Chinese e-commerce giant JD, which

had previously reported losses in its

operations, has broken even.

“Four years ago, JD Logistics marched

into the third- to sixth-tier cities. At the

beginning, the number of orders was

small, so the logistics cost was high,”

said Liu Qiangdong, chairman and chief

executive of JD

“However, along with our rapid

expansion into the lower-tier cities,

especially the flocking of a large number

of third-party orders, the cost of logistics

is dropping dramatically,” the CEO added.

“Meanwhile, we will continue to invest

in new categories, such as fresh food and

supermarkets,” Liu said.

JD reported its net revenue for the

second quarter of 2019 at 150.3 billion

yuan, 22.9 percent higher when compared

to the same period last year, while net

profits surged 644 percent year-on-year

to 3.6 billion yuan.

Xu Lei, chief executive officer of JD

Retail, said the users’ growth rate from

third-to sixth-tier cities is higher than

that from first- and second-tier cities,

and nearly 70 percent of new users are

from lower-tier cities.

JD Logistics CEO Wang Zhenhui said

the unit will ramp up efforts in low-tier

cities and would focus on enhancing users’

experiences in first-to third-tier cities.

Indian tech-enabled logistics firm Rivigo

announced that it has been granted

patent rights by the United States Patent

and Trademark Office (USPTO) for its

unique driver relay system.

The system uses “intelligent driver

Ryan McDaniel, Senior Vice President of

Walmart China Supply Chain, announced

that Walmart will increase its investment

in its supply-chain logistics.

In addition to building the first

customized perishable food distribution

centre, the South China Fresh Food

Distribution Centre, the company plans

to increase investment in its supply-chain

logistics in China by RMB 8 billion, or

about $1.2 billion, building or upgrading

more than 10 logistics distribution centres

over the next 10-20 years.

Walmart invested more than RMB 700

million to build the South China Fresh

Food Distribution Centre, which has been

in operation since March 2019. It currently

serves more than 100 Walmart stores

in Guangdong and Guangxi, with daily

distributing capacity of up to 165,000

APAC

Rivigo receives US patent for its driver relay system

allocation system” through algorithms,

developed by the firm, to pick the right

driver for a duty based on multiple

parameters including equitable

distribution of driving hours, rest hours

and transit hours.

“This is yet another milestone for us at

Rivigo. Our global first relay model being

recognized by the United States Patent and

Trademark office is an endorsement of our

pilot-first model predicated on innovation

at a technological and human level,” said

Gazal Kalra, co-founder, Rivigo.

Walmart invests $1.2 billion to upgrade

logistics in China

cases of products.

The new fresh food distribution centre

passed the Brand Reputation through

Compliance (BRCGS) Warehousing and

Distribution Global Standard Certification,

making it the first distribution centre

in China’s retail industry to attain this

certification.

Walmart South China Fresh Food

Distribution Centre is Walmart China’s first

distribution centre specially designed and

built according to leading international

standards.

At 33,700 square meters, it is the

largest, multi-temperature perishable

distribution centre in the domestic retail

industry that can store and process

more than 4,000 kinds of temperatureregulated,

refrigerated or frozen goods

simultaneously.

DHL implements first smart warehouse in Asia-Pacific region

DHL Supply Chain has successfully

implemented an integrated supply chain

for Tetra Pak in Singapore. The project

includes one of the largest Tetra Pak

warehouses in the world and is also the

first smart warehouse for DHL, in the Asia-

Pacific region, that exists as a digital twin.

The digital doppelgänger of the Tetra Pak

warehouse is continuously fed with realtime

data from the physical warehouse in

Singapore and maps changes in real time.

“The joint implementation of such a

digital solution to improve Tetra Pak’s

warehousing and transport activities

is an excellent example of the smart

warehouses of the future. This enables

agile, cost-effective and scalable supply

chain operations.” commented Jerome

Gillet, CEO, DHL Supply Chain Singapore,

Malaysia, Philippines.

8


GLOBAL OUTLOOK

US-China trade tension adds to global slowdown

As US-China trade tensions intensify, momentum in the global economy was hit by a slowdown in

manufacturing activity. Ed McCauley reports.

Against a difficult backdrop

that included intensified

China-US trade and

technology tensions as well as

prolonged uncertainty on Brexit,

momentum in global activity

remained soft in the first half of

2019, according to the International

Monetary Fund (IMF).

Growth was better than expected

in the United States and Japan,

and one-off factors that had hurt

growth in the Euro area in 2018

appeared to fade as anticipated.

Among emerging market and

developing economies, the first

quarter GDP in China was stronger

than forecast, but indicators for

the second quarter suggest a

weakening of activity. Elsewhere

in emerging Asia, as well as in Latin

America, activity has disappointed.

From a sectoral perspective,

service sector activity has held

up, but the slowdown in global

manufacturing activity, which

began in early 2018, has continued,

reflecting weak business spending

and consumer purchases of durable

goods.

In July 2019, automobile and

parts producers saw the sharpest

drop in global output of all sectors

for the fourth successive month,

followed by machinery and

equipment makers, according to

the Global Sector PMI Output Index.

Both sectors are seeing the

sharpest downward trend in

production since the global

financial crisis ten years ago. The

best performing sectors in July

were often those considered to

be non-cyclical, such as insurance,

pharmaceuticals, and food and

drink. Eight of the top nine sectors

were all service sectors, led by other

(non-bank) financials. The topranking

manufacturing sector, other

than food and drink production,

was household and personal use

products. See Table 1.

Business sentiment and surveys

of purchasing managers point to

a weak outlook for manufacturing

and trade, with particularly

pessimistic views for new orders.

While global growth is projected

at 3.2 percent for 2019, on the

trade front, the forecast reflects

Table 1

the May 2019 increase of US tariffs

on $200 billion of Chinese exports

from 10 percent to 25 percent, and

retaliation by China.


9

10


TRANSPORTATION: AIR

IATA: Air cargo continues to face difficulties

Latest figures from IATA highlight continuing difficulties for air cargo as trade tensions increase.

Industry-wide freight tonne

kilometres (FTKs) fell again this

quarter, down 3.3 percent in yearon-year

terms, as shown in Table 1.

The decline is broad-based

across all of the four major air

cargo trade lanes. Most notable

is the decline for international

traffic within Asia where FTKs

are down 12.6 percent year-onyear.

International freight tonnes

flown have also fallen by a similar

magnitude as FTKs, currently 3.2

percent down year-on-year.

Market drivers

There has been an ongoing

softening in a number of key

demand drivers which have been

adversely impacted by trade

protectionism and trade wars.

World trade volumes are currently

0.4 percent higher year-on-year.

In addition, global consumer and

business confidence have both

been trending downwards for

around a year and the new export

orders component of the global

PMI remains weak. Downward

revisions to the near-term global

growth outlook are doing little to

support business confidence or

demand for air cargo.

Capacity, costs and yields

The growth in available freight

tonne kilometres (AFTKs) has

halved over the past year, to around

3 percent currently. The slowing is

most pronounced in Asia Pacific

where AFTKS are up just 0.0 percent

year-on-year. Widebody freighter

utilisation has fallen significantly

in recent months, since its peak at

the start of 2019. The industry-wide

freight load factor has trended

downwards since around mid-

2017 and cargo yields are almost

6 percent lower in year-on-year

terms.

Heads of cargo back to

optimism on yields

Despite the weaker prevailing

conditions, IATA’s April 2019 Business

Confidence Survey showed that

around 40 percent of respondents

expected higher cargo yields in

the next twelve months, up from

20 percent in January. This is

reflected in a higher weighted

score in Chart 1.

Respondents also maintained

their optimism in relation to

cargo volumes, with the majority

expecting to see higher volumes

over the coming twelve months.

However , the weaker than

expected start to 2019 has resulted

in a downward revision to IATA’s

forecasts for air cargo volumes

this year; FTKs are now expected

to be unchanged over the year as

a whole compared with 2018.

Table 1. Key Data Overview

Chart 1. IATA survey of heads of cargo


11

TRANSPORTATION: AIR

Emirates SkyCargo expands its pharma capabilities

Following up on the success of its pharma corridors initiative, Emirates SkyCargo has expanded its

initial network of 12 pharma stations to 20.

Emirates SkyCargo has

commenced handling

pharmaceutical cargo at

a new purpose-built facility in

Chicago. The facility, dedicated

solely for pharmaceutical

shipments, is spread over

1,000 sq. metres, with scope

for additional expansion

and provides comprehensive

protection for pharma cargo

through temperature controlled

zones for acceptance and delivery,

pharma cargo build up and break

down, storage and direct ramp

access. Developed in partnership

with ground handling company

Maestro, the facility has a capacity

of 15,000 tonnes of pharma

shipments per annum.

“Emirates SkyCargo is

committed to the safe and secure

transportation of temperature

sensitive pharmaceutical

shipments. Having a dedicated

Emirates SkyCargo unveils new

purpose built facility for pharma

cargo in Chicago

facility for pharma at one of our

busiest stations for pharma in

our network is a big boost to our

pharma handling credentials and

capability,” said Nabil Sultan,

Divisional Senior Vice President,

Emirates SkyCargo.

The facility offers temperature

controlled zones (2-8 degree

Celsius and 15-25 degree Celsius)

for acceptance and delivery,

pharma cargo build up, breakdown

and storage. The proximity of the

facility to the ramp also means

that cargo has to spend lesser

time in transit to and from the

terminal to the aircraft.

Expansion of global pharma

corridor network

The dedicated pharma facility

in Chicago is part of Emirates

SkyCargo’s broader strategy

to enhance protection for

temperature sensitive pharma

shipments not just at its hub

in Dubai but from origin to

destination.

Following up on the success of

the pharma corridors initiative

which was announced in Jan 2018,

Emirates SkyCargo has expanded

its initial network of 12 pharma

stations to 20.

As part of pharma corridors,

Emirates SkyCargo works with

ground handling partners and

other local stakeholders at the

stations that are important

origin or destination points for

pharma, in order to ensure a high

standard of handling operations

for pharmaceuticals in line with

Emirates SkyCargo’s stringent

norms.

GDP Recertification for

Emirates SkyCargo’s hub

operations in Dubai

Emirates SkyCargo first received

GDP certification in 2016 which

was then revalidated in 2017 and

2018. In 2019, the air cargo carrier

went through a rigorous audit by

Bureau Veritas where its pharma

handling facilities and processes

were evaluated completely from

the ground up.

With over 8,000 square metres

of dedicated pharma storage and

handling space, Emirates SkyCargo

operates the world’s largest multiairport

GDP certified hubs in Dubai.

During the financial year 2018/19,

the carrier transported more than

75,000 tonnes of pharmaceuticals

through its network.

“Emirates SkyCargo is

committed to the safe

and secure transportation

of temperature sensitive

pharmaceutical shipments.”

Nabil Sultan

Divisional Senior Vice President,

Emirates SkyCargo

Above: The pharma

corridors initiative

was announced in

Jan 2018.

12



13

TRANSPORTATION: AIR

Swissport targets growth in the pharma sector

Swissport is investing in a new air cargo facility at Brussels Airport as it targets growth in the

pharma sector.

Swissport is investing in

a state-of-the-art air

cargo facility at Brussels

Airport. While Brussels Airport

Company is constructing the

building, Swissport has signed a

long-term lease and is investing

several million euros in equipment

and fittings for the new facility.

The building will consist of a

25,000 sqm warehouse, a material

handling system, office space

and 3,620 sqm of end-to-end

facilities in the new Swissport

Pharma Center.

An advanced warehouse, a

brand-new, four-story office

building for Swissport and its

customers and state-of-theart

pharmaceutical facilities

will provide Swissport with the

necessary infrastructure to take

its cargo service delivery at

Brussels Airport to the next level.

Warehouse will be equipped with

an automated Material Handling

System (MHS)

The brand new Swissport Pharma

Center will feature an increased

surface area for pharmaceutical

products. Ambient pharma space

(+15° to +25°C) will more than

triple from 800 sqm to 2,620

sqm. Additionally, a 1,000 sqm

cooling facility (+2° to +8°C) will

be available. With its new end-toend

cool chain, Swissport intends

to further grow its share in the

pharma air transport business in

Brussels and worldwide.

“Our new warehouse and the

state-of-the-art Swissport

Pharma Center will be the

benchmark for modern and

efficient air cargo and pharma

logistics”, says Luzius Wirth,

Executive Vice President Europe,

Middle-East & Africa (EMEA)

for Swissport. “The investment

underlines our commitment to the

Belgian market. In parallel we are

working to improve the profitability

of our Belgian business activities

in order to create long-term job

security for our staff.”

Construction of the new

Swissport facility started in

January 2019 and will take about

two years to complete, following a

phased approach. Both demolition

and construction works are in full

swing. The 25,000 sqm warehouse

will be equipped with an automated

Material Handling System (MHS)

and is set to meet the highest

industry standards. Landside

it will feature 50 truck loading

bays in a closed perimeter and a

highly efficient acceptance zone.

Airside there will be “speed gates”,

enabling time efficient logistics

processes from the warehouse

into the aircraft cargo hold.

Swissport Belgium, with

a workforce of some 2,000

employees, handles more than

550,000 tons of air cargo.

Its ground services division

serves approximately 7.5 million

passengers per year.

In 2018, Swissport International

AG provided best-in-class

airport ground services for some

282 million airline passengers

and handled roughly 4.8 million

tons of air freight in 115 cargo

warehouses worldwide. Several of

its warehouses have been certified

for pharmaceutical logistics by

IATA’s CEIV.

“The state-of-the-art Swissport

Pharma Center will be the

benchmark for modern and

efficient air cargo and pharma

logistics.”

Luzius Wirth

Vice President, EMEA, Swissport

Above: Swissport

Belgium handles

more than 550,000

tons of air cargo.

14



Container market disruption seems likely

Global shipping consultancy Drewry highlights concerns of a slowing global economy.

The recently published

Container Forecaster

from global shipping

consultancy, Drewry, highlights

concerns of a slowing global

economy, stoked by the

ongoing US-China trade war,

escalating geo-political tension

in many regions of the world

and an industry grappling

with challenging new emission

regulations.

Beyond these, however,

a series of existential fears

are also beginning to present

themselves that could dent

demand for shipping in the future;

namely, the regionalisation of

manufacturing supply chains

and growing momentum behind

a low carbon, environment-first

campaign that has the potential

New emission regulations as of

January 2020

to fundamentally change global

consumption habits.

It is for all these reasons

that Drewry has downgraded

its forecast for global port

throughput growth in 2019 to

3.0 percent, from our previous

prediction of 3.9 percent.

“We remain confident that

world trade will rebound in

2020, but much will depend on

developments outside of carriers’

control,” said Simon Heaney,

senior manager, container

research at Drewry and editor

of the Container Forecaster.

“Further spreading of

protectionist policies could stunt

growth, particularly if the US

aims its tariff target at other

trading partners. However, there

could be some upside for trade if

more manufacturing production

is relocated outside of China.

The Asian export powerhouse

has progressively reduced

its requirement for foreign

inputs, choking off demand for

intermediate goods, so any shift

to less self-reliant economies

should give trade a bit of a kickstart,”

Heaney said.

In such unpredictable times,

Drewry believes the risk of

temporary supply disruption is

heightened.

In the Transpacific market, for

example, differences of opinion

over the strength of the third

quarter peak season have led

to divergent strategies from

carriers. Some lines are placing

extra loaders into the trade,

indicating they expect a repeat

of last year’s cargo rush, while

others are more circumspect,

announcing blanked sailings to

protect load factors and spot

freight rates.

“Carriers can be forgiven for

not having all of the answers

in such times. One suspects

that even Nostradamus would

throw his hands up in despair;

such is the volatility of the

leading characters. There will

undoubtedly be some errors

along the way and the risk

of temporary supply issues

has undoubtedly been raised,

either from too many cancelled

sailings or misplaced capacity

transfers between trades,” said

Heaney.

“Carriers can be forgiven for

not having all of the answers

in such times.”

Simon Heaney,

senior manager, container research,

Drewry


15


May sees decline in contracted ocean freight rates

May saw an eye-catching 11.5 percent rates surge, with US container rates for imports climbing by

close to 20 percent. We take a closer look at the factors in play and get a commentary from Patrik

Berglund, CEO, Xenta.

After an unexpected leap

in long-term contracted

ocean freight rates in May,

June was a calmer month for the

container industry, with a slight

decline of 1.7 percent in global

rates. According to the latest

XSI® Public Indices report from

Xeneta, the leading ocean freight

rate benchmarking and market

analytics platform, performances

were mixed across the major trade

corridors, with strong import

results for the US and Far East

offsetting falls in exports, and

across the board In Europe. The

index currently stands 7.2 percent

up year-on-year.

Calmer waters?

May saw an eye-catching

11.5 percent rates surge, with

US container rates for imports

climbing by close to 20 percent.

China-US ‘trade war’ is continuing to

exert an influence on the market

This reversed previous falls on the

XSI® – compiled from the very

latest crowd-sourced shipping

data, covering over 160,000 portto-port

pairings, with 110 million

data points – neatly showcasing

the constantly fluctuating nature

of the global rates landscape.

June’s performance, however,

shows something of a return to a

‘pattern’. Or, as Xeneta CEO Patrik

Berglund points out, as near to

a pattern as the unpredictable

segment gets.

“I don’t think any industry

commentator could put their

hand on their heart and say

they expected what happened

in May,” he notes, “but I think a

few will have predicted this slight

‘correction’ in June.

Influential figures

As with last month, US imports

were the star performer, with a 2.7

percent month-on-month climb in

the benchmark – a small increase,

but significant as it maintains the

upward trajectory. The US export

figure declined by 3.7 percent. A

similar pattern was identified

in the Far East, as the import

indices rose 2.5 percent against

a 1.4 percent decline in exports.

Both import and export figures

fell for Europe, by 1.7 percent and

0.8 percent respectively, but the

benchmarks remain above the

2018 year-end levels.

The value of intelligence

It is, as ever, ‘too complex to

call’, says Berglund. He notes: “One

of these days I’d love to declare,

‘this will happen on corridor x next

month, while trade y will develop

in this direction’, but I’m afraid I

may be waiting some time.

“The reality is there are too

many factors, with too many

actors, feeding into the segment to

predict with any certainty. Trump’s

trade war is an obvious culprit,

but even if that were resolved

reaching any degree of clarity

on long-term fundamentals at

present would be challenging.

We have Brexit, the future of the

EU, wider geopolitics, the carriers

themselves, macroeconomics –

who can tell how these issues

and players will evolve.

“Stay informed of the very

latest rate developments and

you’ll get the best value for your

assets, cargoes and businesses.

That’s the only thing any of us

can say with any certainty.”

“Nothing can be taken for

granted in this increasingly

dynamic segment.”

CEO Patrik Berglund

Xeneta

Above: US container

rates for imports

surged close to 20

percent.

16



17


World’s largest container vessels cement HK’s status

The Hong Kong Seaport Alliance (HKSPA) welcomed OOCL Hong Kong on its maiden call to Hong Kong.

The Hong Kong Seaport

Alliance (HKSPA) welcomed

OOCL Hong Kong, one of the

world’s largest container vessels,

on its maiden call to Hong Kong at

the HKSPA’s facilities at Terminal

8. The vessel, together with ten

other mega vessels from Orient

Overseas Container Line Limited

(OOCL) and Cosco Shipping Lines

Co., Ltd (Cosco Shipping), has been

deployed on the Ocean Alliance’s

Asia-North Europe Service since

late June. The inclusion of Hong

Kong as a port of call in this service

re-affirms the city’s status as an

international shipping hub and a

key gateway to Mainland China.

In welcoming the Ocean

Alliance’s new service and Cosco

Shipping Galaxy to Hong Kong,

Angela Lee, Commissioner for

Maritime and Port Development

and Deputy Secretary for Transport

Hong Kong has been in the league of

the world’s top ten ports for the past

30 years

and Housing (Transport),

emphasized the multi-faceted

appeal and new prospects for the

Hong Kong Port.

“Hong Kong, despite being

small in size, has been in the

league of the world’s top ten ports

for the past 30 years or so. This is

an enviable achievement not easy

to accomplish. Credits must go to

our port operators for the provision

of highly efficient and professional

services to the international

shipping community. Coupled

with our sound fundamentals built

over the years, including our free

port status, strong international

connectivity, trusted common law

system, and a level playing field

for business, I am confident that

our port would be able to further

leverage on new opportunities

presented by the Greater Bay Area

Development, the Belt and Road

Initiative and the New Land-Sea

Corridor, and continue to thrive as

a regional transshipment hub,”

Lee said.

Andy Tung, co-chief executive

officer of OOCL said, “As a Hong

Kong company deeply rooted

in the city, OOCL Hong Kong’s

maiden call has a very special

place in many of our hearts.

Containerships like the OOCL Hong

Kong are important ambassadors

of world trade and as a home

carrier, we are very proud to have

this vessel carry the name of Hong

Kong, flying the flag of Hong

Kong, and continue serving the

industries of Hong Kong. OOCL

is very blessed to call Hong Kong

our home and being an integral

part of the city’s vibrant business

community over the last 50 years,

providing a vital link to global

trade. We like to thank the HKSPA

for the wonderful hospitality and

celebrating this milestone event

together with us.”

Chen Xiang, deputy managing

director of Cosco Shipping said,

“The Port of Hong Kong is an

important hub in our network.

In 2017, the reorganized Cosco

Shipping adjusted the South

China network and strategically

shifted more cargoes to Hong

Kong. At the same time, the strong

support of Hong Kong terminals

on schedule reliability and service

quality has contributed to our

rapid and sustained growth in

Hong Kong.”

“Containerships like the OOCL

Hong Kong are important

ambassadors of world trade.”

Andy Tung

Co-chief executive officer of OOCL

Above: The biggest

container ship in the

world; OOCL Hong

Kong in the Port of

Rotterdam.

18



CN to acquire New York Massena rail line from CSX

CN announces strategic acquisition from CSX in the State of New York.

CN announced the signing of

an agreement that will see

it acquire the Massena rail

line from CSX, which represents

more than 220 miles of track

between Valleyfield (Quebec),

in Canada, and Woodard (New

York), in the U.S. The Massena

rail line also serves many cities in

the province of Quebec, including

Beauharnois and Huntingdon,

and in the state of New York,

including Massena, Norwood,

Potsdam, and Gouverneur.

“CN is excited to be expanding

its reach in New York. With this

acquisition from CSX, we are

opening up new opportunities

for our existing customers and

local businesses who will be

able to access new markets

through CN’s unique three coasts

network,” said JJ Ruest, president

and chief executive officer at CN.

CN and CSX announced a new intermodal

service

“By acquiring the Massena rail

line, CN continues to expand our

network and foster additional

supply chain solutions. CN is

pleased to welcome communities

along the Massena rail line to

its family and we look forward

to meeting our new neighbors.”

On August 8, 2019, CN and CSX

announced a new intermodal

service offering between CN’s

greater Montreal & Southern

Ontario network, and the CSXserved

ports of Philadelphia,

New York, New Jersey and the

New York City metropolitan area.

This agreement will come into

effect on October 7, 2019 and will

help move freight from trucks to

rail, reducing congestion in New

York in a sustainable manner.

“Over the long term, the

freight market will increasingly

depend on demand driven

by the consumer economy

and the rail industry must

create new intermodal services

that can successfully rival

the over the road options,” said

JJ Ruest, president and chief

executive officer at CN. “This

interline service fits perfectly

with our strategic focus on

feeding our unique network

through organic and inorganic

growth opportunities, including

extending our reach into new

geographic markets.”

“This new intermodal offering

aims to convert long-haul

trucks to interline rail services,”

explained Keith Reardon, senior

vice-president of consumer

product supply chain at CN.

“Trains will run directly into

the heart of the metropolitan

markets of Toronto and Montreal

via CN intermodal yards, making

this partnership a natural

opportunity for both railroads.”

“CSX is pleased to work with

CN to deliver superior all-rail

intermodal service into the

Montreal and Toronto markets,”

said Jim Foote, president and

chief executive officer at CSX.

“Answering a need expressed by

our customers, this new service

positions us to capture market

share from trucks and increases

capacity in these expedited

lanes, as larger container ships

call at the Port of Philadelphia

and Port of New York and New

Jersey.”

“We are opening up new

opportunities for our

existing customers and

local businesses.”

JJ Ruest,

President and Chief Executive officer, CN

Above: CN transports

more than CAN $250

billion worth of goods

annually, across 20,000

miles of track.


19


FESCO and JSC launch Korea to Europe service

The new service serves different cargoes, including car parts and equipment, from the Republic of

Korea to European countries.

As part of the development of

transit cargo express delivery

service, Trans-Siberian

LandBridge, JSC RZD Logistics,

subsidiary of JSC Russian Railways,

and FESCO Transportation Group

are expand its geography to the

route from the Republic of Korea

to Europe.

The first container was sent

from Busan on June 25, from where

it was delivered by sea to FESCO

Korea Express to the Vladivostok

Commercial Sea Port (VMTP, part

of the FESCO Group), then with the

help of Russian Railways Logistics

it proceeded by rail to Brest

station, then after 1435 containers

were loaded onto the gauge

rolling stock; the container was

transported to the Brzheg Dolny

FESCO provides sea and truck delivery,

port handling and container fleet.

railway station (Poland). The goods

were delivered to the customer’s

warehouse in Wroclaw (Poland)

by truck. The total transit time left

21 days, which is twice as fast as

when transported by sea through

the Suez Canal.

As part of the joint transit

product, FESCO provides maritime

and auto delivery, handling at

the port and the provision of a

container fleet, while Russian

Railways Logistics is responsible

for organizing transportation by

rail. From the Republic of Korea

to European countries, goods of

various nomenclatures, including

auto parts and equipment, will

be delivered.

“Europe is one of the largest

consumer markets in the world, in

addition there is a large number

of manufactures of high valueadded

goods, components and

components for which are supplied

from countries in the Asia-Pacific

region. For them, the speed of

delivery is of great importance, and

taking into account the peculiarities

of logistics, the route through

the Far East is one of the most

promising in terms of opportunities

to save time and ensure the rhythm

of deliveries, ”said FESCO President

Alexander Isurin.

“The test shipment within the

framework of the Trans-Siberian

LandBridge service implemented

with FESCO from Japan to Europe

has already demonstrated the

promise of the route through

the VTSP and the Trans-Siberian

Railway. Shippers became

convinced of the safety and

quality of such transportations,

and most importantly, they saw

a significant saving in delivery

time by rail in comparison with

transportation on deep sea. Now

we offer to use the new service

to customers from the Republic

of Korea, who will also be

able to evaluate its economic

efficiency. After all, the more cargo

will be transported using Trans-

Siberian LandBridge, the more

accessible it will be for shippers

from countries in the Asia-Pacific

region, ”said Vyacheslav Valentik,

Director General of JSC Russian

Railways Logistics.

“The route through the Far East

is one of the most promising in

terms of opportunities to save

time and ensure the rhythm of

deliveries.”

Isurins Alexsandrs,

President of FESCO

Above: Korea to

Europe via Trans-

Siberain Railway

20



21


Locomotive delivery boosts Tupras Refineries

Wabtec completed delivery of five diesel-electric PowerHaul series locomotives to Körfez

Ulaştırma, the subsidiary of Turkey’s largest refinery Tüpraş operating in railway transportation.

Körfez Ulaştırma is the first

private operator in Turkey to

make such a purchase since

the government began issuing

licenses to use its mainlines two

years ago. The locomotives will

provide faster and more efficient

transport of products between

Tüpraş refineries and related fuel

terminals.

“We have been working

to increase the speed and

productivity of our logistics as

we expand our operations,” said

General Manager Körfez Ulaştırma

Tufan Başarır, “Now that we have

five powerful new locomotives

added to our fleet, we are able

to move goods between Tüpraş

Refineries and the fuel terminals

more efficiently and better meet

our customers’ needs.”

Sirkeci Train Station in Istanbul City,

Turkey.

The PowerHaul series is a

top-performing mid-weight

locomotive, compliant with EU

Stage IIIa emissions and TSI

interoperability standards. It is

equipped with a technologically

advanced 16-cylinder 3,700 HP

PowerHaul P616 engine with

common-rail fuel injection. The

locomotive can achieve maximum

power output, while providing

an 18-percent reduction in fuel

consumption. It also has improved

reliability and tractive effort with

high-performance AC tractioncontrol

technology and individual

axle-control.

“We have a long-standing

partnership with Turkey that will

continue beyond the delivery of

these new locomotives,” said

Gökhan Bayhan, Middle East and

North Africa Regional General

Manager, Wabtec RussiaCIS. “With

the locomotives in operation,

Wabtec will be providing service

support and technical expertise

to maximise performance

throughout their lifecycle.” he

added.

The diesel electric locomotives

were built by Tülomsaş, Wabtec’s

strategic regional business partner,

at its plant in Eskisehir, Turkey.

Tülomsaş produces Wabtec’s

PowerHaul locomotives for the

European, Middle Eastern and

North African markets. Under the

partnership agreement, Wabtec

provides leading technology and

design, while Tülomsaş provides

local manufacturing, assembly

and final testing.

“The delivery of these firstclass

locomotives is an important

milestone,” said Tülomsaş

General Manager Hayri Avcı, “At

Tülomsaş, we are supporting the

production of the cutting-edge

locomotives on the basis of our

knowledge, qualified workforce,

and skills.” Avcı also expressed

that the production of locomotives

contributes to the strengthening

of the subsidiary industry and

creates a real added value for

the national economy.

Körfez Ulaştırma, Tülomsaş

and Wabtec originally announced

the order for these locomotives in

September 2018 at the InnoTrans.

The delivery is double the size

of Körfez Ulaştırma’s fleet,

which consisted of five leased

locomotives.

“The delivery of these firstclass

locomotives is an

important milestone.”

Hayri Avcı,

General Manager Tülomsaş

Above: Diesel electric

locomotives supplied

by Wabtec

22



Predicting an efficient and cleaner journey ahead

optiTruck Project puts predictive fuel optimisation to the test with a long-haul drive from

Turkey to Italy.

This summer, the EU-supported

project optiTruck carried out

real-life tests of its innovative

fuel optimisation module, as part

of a long-haul delivery mission

across Europe.

The project is aiming to reduce

greenhouse gas emissions of

heavy-duty vehicles by up to 20

percent, and the international

transport mission through

Turkey, Greece and Italy will carry

shipments for Ikea Transport &

Logistics Services and Electrolux

in a baseline truck and a testbed

truck equipped with the optiTruck

Global Optimiser.

Ford F-Max Comfort Plus tractor used

in the test drive

Two Ford F-Max Comfort Plus

tractors with Otokar semi-trailers

departed from Uşak, Turkey on 18

July carrying a shipment for Ikea

Transport & Logistics Services, who

supported optiTruck during the

test phase. After taking the ferry

from Igoumenitsa (GR) to Brindisi

(IT), the drivers reached the Ikea

logistics centre in Piacenza, near

Milan, on 23 July. For the return

journey, optiTruck partnered with

Electrolux: after loading cargo

at the Electrolux plant in Porcia

(IT), near Treviso both trucks

travelled back through Brindisi

and Igoumenitsa, reaching Istanbul

on the 30 July and completing a

5000km, 11-day journey through

three countries.

Bringing together the most

advanced technologies from

powertrain control and ITS to

improve fuel efficiency in heavyduty

road haulage, the optiTruck

partners have created a global

optimiser consisting of a set of

dynamic, intelligent control and

prediction components for effective

powertrain management. Based

on a predictive control system,

the optiTruck global optimiser is

expected to deliver a reduction

in fuel consumption of up to 20

percent on a typical road transport

mission for a 40-tonne truck,

while achieving Euro VI emission

standards.

The objective of this experiment

is to test and fine-tune the fuel

optimiser, the driver interface,

and the algorithms underpinning

the system. Throughout the

journey, sensors will record fuel

consumption, urea consumption

(AUS 32), CO2 and NOx emissions,

as well as impact on driver

workload and comfort.

“In addition to the ten

Innovation Elements developed

by optiTruck, our biggest challenge

is to test the system with a real

mission on this international route

that will highlight the importance

of our work,” says Jean-Charles

Pandazis, project coordinator for

optiTruck.

“We are very excited to add to

our portfolio another sustainable

solution in transport and continue

our strong commitment of reducing

emissions,” says Marcelo Marcal,

Electrolux logistics purchasing

director BA Europe.

“We are very excited to add

to our portfolio another

sustainable solution in

transport and continue

our strong commitment of

reducing emissions.”

Marcelo Marcal,

Logistics Purchasing Director, Electolux

Above: The optiTruck

team in Piacenza,

Italy


23


The Great White North welcomes truckers

PrePass Safety Alliance and British Columbia Ministry of Transportation and Infrastructure allow

PrePass users to bypass weigh stations in British Columbia.

The most utilised truck-weigh

station bypass platform with

over 620,000 trucks enrolled,

PrePass®, is now expanding into

Canada and helping trucking

fleets and drivers save more time

and money than ever before.

A new agreement between

PrePass Safety Alliance and

British Columbia Ministry of

Transportation and Infrastructure

allows PrePass users to bypass

weigh stations in British Columbia,

adding 11 locations to PrePass

bypass sites. PrePass users who

want to bypass at Weigh2GoBC

locations only need to visit the

PrePass drivers and fleets operating

in British Columbia previously had to

obtain a Weigh2GoBC transponder from

the Canadian government.

Weigh2GoBC website, www.

weigh2gobc.ca, to register for the

BCeID (British Columbia electronic

ID), and enrol their truck(s) with

the PrePass transponder for the

Weigh2GoBC service.

No additional fees are required

for carriers to enrol PrePass

transponders in or to participate

in the Weigh2GoBC program.

However, service at Weigh2GoBC

sites is available through

transponder-based bypassing

only and is not compatible with

cellular bypass services.

The agreement also allows

Canadian-based trucks and fleets

that are using Weigh2GoBC to

fully use PrePass bypassing in

the United States, subject to

individual states’ PrePass bypass

criteria. These same trucks and

fleets can also use PrePass’

electronic toll payment services

within the program’s area of

operation.

Transponders allow qualified

trucks to bypass weigh stations

by electronically verifying a

truck’s legal weight, safety

rating and credentials while

the truck operates at highway

speeds. Based on the carrier’s

safety score, credentials and

truck weight, drivers receive on

their transponder either a green

light to continue driving or a

red light indicating they must

report to the weigh station for a

possible inspection or weighing

on a static scale. Transponder use

keeps safe and compliant trucks

on the road, reduces travel time,

improves overall highway safety

and reduces fuel consumption.

Previously, PrePass drivers

and fleets operating in

British Columbia obtained a

Weigh2GoBC transponder from

the British Columbia government,

meaning some drivers had to

carry two transponders. The

new agreement means drivers

can carry just one transponder

— PrePass or Weigh2GoBC —

because the systems are now

fully interoperable.

“Over 600,000 commercial

vehicles from pre-qualified

fleets utilise PrePass services.”

PrePass Safety Alliance

Above: The PrePass

Safety Alliance and

British Columbia

Ministry of

Transportation and

Infrastructure have

agreed PrePass users

can bypass weigh

stations in British

Columbia, Canada.

24



25


Maintaining Turkish trade lanes despite uncertainty

Despite the ongoing economic uncertainties in the country, combined with currency volatility and

inflation, Turkey remains one of Davies Turner’s most important trade lanes.

The UK’s leading independent

freight forwarder says that

Turkish trade fluctuations

have been a challenge to

operations on its largest overland

and multimodal routes, but

careful management of traffic

flows has enabled Davies Turner

to maintain regular services and

even to increase revenues in very

challenging market conditions.

Davies Turner operates daily

two-way overland and trailer, ferry

and rail services between the UK

and Turkey with Ekol Logistics,

typically moving around 70 to

110 trailers a week between the

two countries, mainly groupage,

plus air cargo and sea freight

containers.

The company reports that

southbound business has fallen

since the onset of Turkey’s

currency volatility leading to an

Davies Turner operates daily services

between the UK and Turkey

imbalance in north-south trade

that was heightened by European

importers seizing the opportunity

for increased purchases from

Turkey.

Company chairman Philip

Stephenson explained that

export-import imbalances were

a long-standing feature of the

UK-Turkish trade lane, but the

company’s historic experience

of the country’s trade with the

UK and the EU has helped it to

manage successfully in the current

market.

“The business model has to be

very flexible both inbound and

outbound and there has to be clear

and constant management of

the volumes moving, particularly

northbound loads, in order not

to worsen the imbalance,” he

added, “Equipment availability

northbound had become an issue,

but with careful planning and

control, we’ve been able to contain

it. Volumes carried by ourselves

and by our partner Ekol, both in

the past and present, show that

we’ve handled any weakness in

southbound volumes well, thanks

to some large contracts we share

with our Turkish partners and this

provides excellent coverage to

collect shipments from not just the

UK but also the rest of the EU to

maximise our southbound traffic.”

Commenting on the outlook

for the service, Stephenson

said, “You can get various and

many analyses from different

authorities on the way ahead

and there will be conflicting

views. We didn’t anticipate the

improvement we witnessed in

the first quarter of 2019, but the

[political uncertainty] remains

problematic, making it difficult to

forecast long-term. Despite high

levels of inflation and interest

rates affecting investment and

hindering sustainable economic

growth, Turkey continues to be

a strong and pivotal market

which, although subject to

fluctuations, certainly should

never be underestimated as a

trading partner. As for Davies

Turner, we’ve managed to retain

both our northbound and

southbound business at a high

level. Continuing success will

depend on the resilience and

openness to trade of the UK and

EU economies as much as on

Turkey in isolation.”

“Turkey continues to be a

strong and pivotal market”

Philip Stephenson,

Company chairman, Davies Turner

Above: Trucks waiting

on the Bulgarian

-Turkey border.

26


TECHNOLOGY

Gartner top 8 technology trends for 2019

IoT, AI, digital twins and blockchain are some of the trends transforming global supply chains.

Supply chains are becoming

increasingly globalised and more

complex. Gartner has identified eight

top strategic supply chain technology

trends that have broad industry impact,

but haven’t yet been widely adopted.

These technologies are experiencing

significant changes or reaching critical

tipping points in capability or maturity.

Artificial intelligence

AI supports an organisation’s vision

for broader supply chain automation.

The level of automation could be

semiautomated, fully automated or a

mix, depending on the circumstances.

Through self-learning and natural

language, AI solutions can help automate

various supply chain processes such as

demand forecasting, production planning

or predictive maintenance. Along with

automation comes augmented human

decision making, because the human is

then no longer involved in the decision

making.

Advanced analytics

The impact of advanced analytics on

supply chain is significant. Advanced

analytics are increasingly being deployed

in real time or near-real time in areas

such as dynamic pricing, product quality

testing and dynamic replenishment.

The availability of supply chain data

— such as Internet of Things (IoT) data,

dynamic sales data and weather patterns

— provides the ability to extrapolate the

current environment to better understand

future scenarios and make profitable

recommendations.

IoT

IoT adoption is growing in select

supply chain domains, but rarely as

part of a complete end-to-end supply

chain process. Some manufacturers are

assessing the business value of expanding

beyond their current use of operational

technology, OT — digitised devices often

having closed or proprietary connectivity.

Logistics groups already use sensors to

track assets or containers.

Robotic process automation (RPA)

RPA tools cut costs, eliminate keying

errors, speed up processes and link

applications. RPA has proven to be very

effective in simple use cases, mainly

where a third party in the supply chain

will not provide an API or other means

for automated data integration. However,

the potential to achieve strong return on

investment is entirely dependent on the

applicability of RPA in each individual

organisation.

Autonomous things

The rapid explosion in the number of

connected, intelligent things has given

this trend a huge boost. Robots, drones

or autonomous vehicles enable new

business scenarios and optimise existing

ones. Autonomous things are often

physical devices operating in the real

world, such as robots carrying out jobs in a

coordinated fashion to create a seamless

and connected process in manufacturing

facilities or by using drones for inventory

quality assurance through taking images

with the drone’s camera to reduce time

for inventory checks.

Blockchain

Blockchain is aligned to potentially

fulfil critical and long-standing challenges

presented across dynamic and complex

global supply chains that traditionally

have held centralised governance models.

Current capabilities offered by blockchain

solutions for supply chain include a loose

portfolio of technologies and processes

that spans middleware, database,

verification, security, analytics, and

contractual and identity management

concepts.

Digital supply chain twin

A digital twin is a digital representation

of a real-world entity or system. A

digital supply chain twin is a digital

representation of the relationships

between all the relevant entities of

an end-to-end supply chain — such as

products, customers, markets, distribution

centres/warehouses, plants, finance,

attributes and weather. It creates endto-end

visibility by being in sync with the

real-world supply chain.

Immersive experience

The user experience will undergo a

significant shift in how users perceive

the digital world and interact with

it. The integration of virtual reality

and augmented reality with multiple

mobile, wearable, IoT and sensor-rich

environments and conversational

platforms will extend immersive

applications beyond isolated and singleperson

experiences.

Contributing author, Christy Pettey,

Gartner


27

TECHNOLOGY

How blockchain can create opportunities

For companies reliant on strategic partnerships or those seeking to increase the transparency of

interactions between consumers or business partners, blockchain presents a world of possibilities.

Most people recognise blockchain

as an underlying technology for

cryptocurrencies, but few truly

grasp the potential for it to substantially

reduce operating costs for companies,

and enable new ways of creating value.

Ultimately, as companies co-invest in

blockchain solutions, we will see supply

chains and business partner ecosystems

become increasingly interconnected,

enhancing a sense of shared fate and

creating opportunities for joint ventures.

To understand the value of blockchain

to companies, both as a cost savings

and value creation mechanism, we will

explore three key use cases. As we lay out

these three examples, it will become clear

how blockchain can enable a substantial

evolution of partnerships along the

supply chain. Our three use cases are

how blockchain can:

• increase transparency in the

supply chain by validating provenance;

• reduce costs and complexity in asset

tracking and smart contracts; and

• drive upsell opportunities through

data purity.

Understanding what blockchain

does and what it looks like in practice

First, it’s important to understand what

blockchain does, how companies can

cooperate to implement blockchain

solutions and what that looks like

in practice. Blockchain is a digital,

distributed transaction ledger shared

across a public or private computing

network. Transactions are added to the

blockchain only after the computers

in the network confirm their validity

through cryptographic challenge-response

authentication. This feature eliminates

the need for third-party intermediaries, as

the network uses a consensus mechanism

to execute transactions. Transactions

are stored on the blockchain in groups

called “blocks.”

The blockchain ledger is immutable and

append-only, meaning new transactions

can be added to the ledger but previous

transactions can never be edited or

deleted. Each block that is added to the

blockchain contains a cryptographic

reference, called a hash, to the previous

block in the chain. The hash ensures the

immutability of the blockchain. To tamper

with any transaction in the chain, the

hashes of all subsequent blocks would

need to be decrypted — a feat that many

consider to be virtually impossible.

While this may sound technologically

advanced, it is relatively easy for

companies to join a public blockchain

or even build out their own. Blockchain

runs over the Internet, with each computer

in the network maintaining the identical

database of transactions. To join a public

blockchain, one simply needs a computer

to download and run the open-source

code. Running the code sets up the

computer as a node in the network. To

set up a private blockchain, the easiest

approach is to use a Cloud service to

host the network. These services allow

you to define the number of nodes in

the network and connect each device

accordingly.

Use Case 1: Increasing transparency

by validating provenance and handoffs

along supply chain

The first supply chain use case, that

illustrates how companies can reduce

expensive audit and compliance

operations and greatly enhance their

transparency, is monitoring provenance.

Validating points of origin and handoffs

along the supply chain has become

increasingly difficult, with greater numbers

of diverse stakeholders in a global business

ecosystem. With shifting and often

tightening regulations, companies have

a greater financial incentive to minimise

compliance costs, as well as to control the

operating costs of reconciling transactions

between an ever-widening network of

partners. Simultaneously, transparency

has become a key attraction for consumers

who are increasingly demanding ethically

sourced goods and transparent business

practices. Block- chain has the unique

ability to create a perfect, un-hackable

and accessible single source of truth for

every transaction along the supply chain.

A blockchain-based system can help

improve transparency and monitor

provenance by amassing trustworthy

and verifiable data on how goods are

made, where they originate from and

how they are managed. Sales receipts

and other records exist today. However,

their legitimacy rests on whether the

party can be trusted to record accurate

information. Blockchain ensures that

data can be trusted through automated,

immutable records. One example of how

blockchain can help validate provenance


29

TECHNOLOGY

is in preventing the use of banned conflict

minerals in high-tech microchips. US

regulation requires American microchip

manufacturers to audit their supply chains

to ensure compliance. Using blockchain,

each transaction would be validated by

and visible to each participant in the

network, substantially reducing the cost

of compliance while also reducing the risk

of inadvertently supporting illegal and

unethical practices.

Use Case 2: How blockchain can reduce

costs and complexity in asset tracking

Another key example of how blockchain can

reduce costs and complexity for companies

can be seen in the example of asset tracking.

Asset tracking has long been an expensive,

time-consuming process with significant

leakage, especially for telecom and products

companies. The bureaucracy and paperwork

meant to safeguard players in the case

of reneged contracts is a core source of

unnecessary complexity and introduces

room for error as supply chains scale. Just

as blockchain can help validate a point of

origin and handoffs along the supply chain

above, so can blockchain create a record

of handoffs between OEMs, maintenance

partners and consumers. That record not

only significantly reduces leakage but also

creates a clear set of data, mutually agreed

upon, that can be used as the foundation

for performance analysis and maintenance

partner optimisation efforts.

A use case that illustrates the benefits

of blockchain can be found in customerpremises

equipment (CPE) tracking for

telecom companies. A complex ecosystem

of leases, maintenance and transfers

surrounds CPE, which is essentially any

terminal or related technology in end-user

possession but connected to a carrier’s

telecom network. In addition to the telecom

company itself, there are also multiple third

parties involved that lease and manage CPE

owned by carriers. The result is suboptimal

utilisation of assets, poor visibility into

asset location and status and leakage as

physical assets disappear in the system,

leading to higher capex for the CPE original

equipment manufacturers.

Blockchain can lower data costs, generate

insights and reduce friction across the

partner network. By tagging CPE devices

with unique identifiers and logging each

handoff, carriers create exceptional supply

chain visibility. Device transactions, CPE

taken off-line for maintenance and reintroduced,

are recorded. This prevents

asset loss and de facto creates a utilisation

log as well. Now, the length of time an

individual asset spends undergoing

maintenance is visible to the telecom

carrier. This enables them to proactively

manage both their asset pool and their

supplier contracts, informed by visibility

into the time and success of service from

different maintenance providers.

Use Case 3: How blockchain can drive

upsell opportunities through data purity

With blockchain comes pure and immutable

data, creating a strong foundation for

analytics and insights that can identify

upsell opportunities. The use case outlined

above, of the server manufacturer that was

able to reduce leakage in maintenance

contracts, provides a perfect example.

Through their blockchain solution, the server

manufacturer had newly clean, accurate

records of all maintenance performed for

customers, the amount of maintenance

required by each user, and other critical

lifecycle data. These records created the

opportunity for the server manufacturer

to identify customers to target with better

service packages, important CLV data for

each customer and finally insight into the

optimal service packages to offer, as well

as the packages that were costly to offer

but underutilised by customers.

Blockchain: An opportunity in

the age of mutual investment

and the conscious consumer

The digital revolution has resulted in

increased connectivity and innovation,

preventing companies from existing in

a siloed world. Strategic partnerships

and mutual investments have become

necessary to boost competitive agility in

almost every industry. Furthermore, the

digital revolution has left consumers with

higher expectations surrounding brand

engagement and transparency. The new

conscious consumer is demanding visibility

into the origin and handling of all products

to assess the social, environmental and

political implications across the production

and consumption chain.

Blockchain is the technology that will

alleviate the pain points that the digital

revolution has brought upon businesses.

The distributed, immutable ledger will

enable trust between stakeholders,

regulators and consumers due to its

transparent and secure nature. This trust

will lead to a substantially greater level

of joint investment, communication and

collaboration. Overall, blockchain has

the potential to evolve today’s increasingly

complex network of diverse, independent

stakeholders toward more frictionless,

cost-effective and transparent partnerships.

Theoretical or tangible?

Blockchain is still in the early stages of

development and few companies have

pushed beyond the proof of concept stage

to full implementation. This is largely

because implementing blockchain inhouse

through open source code has proven

to be expensive. Investment in server

infrastructure and the necessary addition

of specialised resources for development

and governance has deterred companies

from exploring it further.

However, 2019 is poised to see a significant

increase in blockchain adoption due to the

blockchain-as-a-service offerings of the

largest cloud providers. These Cloud-based

services eliminate the need for investment

in supporting infrastructures and blockchain

developers.

Regardless of the route chosen for

implementation, it is important to note that

the cost of blockchain will be dependent on

the number of transactions that are being

processed and required transaction speed.

Furthermore, IoT integration will drive up

costs because of the sensors needed to

track physical goods and environmental

conditions.

Blockchain has tremendous potential

to transform the way entire industries

operate, beyond the use cases detailed

above. As more companies adopt blockchain

technology, it will become even

more valuable as a digital connector

between companies. To allow it to reach

its full potential, companies need to first

look internally to adopt a collaborative,

technology-first mindset to push for

organisational change.

This piece was co-authored by Alex

Olea, Accenture Strategy functional senior

manager with contributions from Madeleine

Stanich, Bernice L. Hsu and Madeleine

Cooney.

30


WAREHOUSE

How to build an automated warehouse system:

which new technologies do you need and why?

How to build an automated warehouse system: which new technologies do you

need and why?

Building an efficient automated

warehouse system requires careful

selection of the right technologies.

Many warehouses are seeking ways to

leverage automation for better efficiency,

but achieving efficiency requires choosing

technologies that integrate well and work

seamlessly together to fully optimize your

processes. Let’s take a look at the new

technologies you need — and why you

need them – when building an automated

warehouse system.

Interoperability between warehouse

systems and software

First and foremost, interoperability

is key. Your warehouse systems and

software need to be able to share data

between them, but those systems are

not all the same and may have different

data formats. Interoperability solves this

challenge by allowing applications to

seamlessly share data, such as inventory

data, shipping information and purchase

orders. Without interoperability, data

remains siloed and you can’t benefit from

a comprehensive, bird’s-eye view of your

warehouse operations.

Cloud computing and storage

Cloud computing and storage offers

several benefits, including reduced

infrastructure and maintenance costs.

Rather than setting up and maintaining

an on-site data centre, cloud computing

provides a more scalable solution while

reducing the need for an in-house IT

department. Cloud computing also makes

system integration possible, meaning

you can integrate multiple systems for

ease of access.

Real-time tracking mechanisms

Modern warehouses use real-time

tracking mechanisms like RFID, which use

radio waves to transmit data between tags

or labels and computer and information


31

“The benefits

include increased

visibility into your

inventory throughout

the supply chain,”

systems. The benefits include increased

visibility into your inventory throughout

the supply chain, including shipping and

delivery, ensuring that the right items

get to the right customers at the right

time. Real-time tracking mechanisms

like RFID improve stock and demand

generation visibility, allowing warehouses

to maintain leaner inventory to

reduce overhead costs. Some innovators

are experimenting with pairing RFID with

drones to automate delivery processes.

Collaborative mobile robots

In 2016, CBRE Group released a report

exploring the impact of robotics

and automation, autonomous trucks

and 3-D printing on supply chains,

predicting that these three technologies

would have a transformational impact

on distribution over the next decade.

Adoption of automation in warehouses

and on highways is driven by the growth

of faster fulfilment cycles and e-commerce,

according to CBRE, noting that these three

technologies are on track to achieve

widespread use by 2025.

Access to on-demand warehousing Ondemand

warehousing gives companies

access to additional warehouse

space that’s used, rented or leased on

a temporary basis to accommodate

short-term capacity needs. Warehouse

matching services connect companies

in need of warehouse space with those

that have space available, serving as a

middle-man of sorts to facilitate shareeconomy

warehousing. The benefits of

on-demand warehousing are obvious:

it allows warehouses to adapt more

readily to shifts in market demand, while

reducing or eliminating the need to invest

in additional infrastructure that would

otherwise go unused for part of the year.

Conversely, the on-demand warehousing

model also enables warehouses who have

unused infrastructure to monetize that

space and reduce overhead costs.

Data analytics and artificial intelligence

Collecting raw data with real-time

tracking and other tools is useful, but data

analytics and artificial intelligence (AI)

are the solutions that turn raw data into

actionable insights. Data analytics and

AI tools enable operators and managers

to make timely data-driven decisions,

responding to existing information in realtime

and even taking proactive measures

in response to predictive analytics data.

Cartonisation software

It’s not always easy to estimate the

correct carton size, even for seasoned

packing associates. When an associate

chooses the wrong carton size, they end up

back-tracking and repeating tasks for the

same order. If the carton isn’t too small for

the order, associates may pack the order in

the too-large carton anyway, which isn’t

an efficient use of resources. Cartonisation

software calculates the ideal carton size

for each order based on SKU dimensions,

product weight data and other factors.

That means associates don’t need to guess

the right carton size, eliminating wasteful

spend on too-large shipping boxes and

subsequent shipping costs and the labour

spent repacking orders. Cartonisation

software supports lean, single-touch pick

and pack processes, especially when it’s

paired with an efficient picking technology

like collaborative mobile robots.

Drones

While they’re not yet considered an

essential technology for an automated

warehouse system, there’s a lot of hopeful

speculation about the role of drones in

the future warehouse. Some companies

are already experimenting with drones for

inventory management and delivery. For

example, drones can speed up inventory

counts by scanning barcodes and recording

item location information in the warehouse

management system up to 50 times faster

than manual data capture.

Automated forklifts

While they’re not among the newest

warehouse automation technologies,

the use of automated forklifts has

grown in recent years. Like collaborative

mobile robots, automated forklifts don’t

require investing in new infrastructure,

particularly newer models that don’t

require special floor tape or other fixed

infrastructure to direct them throughout

the warehouse. For the most part, they

can operate in the same routes used by

your human workers but handle tasks

that would typically require a long walk

for stock picking or put-away tasks.

Typically equipped with sensors

that detect activity in their path, automated

forklifts can avoid collisions with

other vehicles or human associates. As

many forklift accidents are attributed

to inadequate training or human error,

automated forklifts can improve safety

assuming sensors and other safety

mechanisms are functioning properly.

Thanks to these same sensors, automated

forklifts offer more precise and secure load

handling, resulting in reduced product

damage from handling. They can also

improve productivity by handling timeconsuming

and repetitive tasks, freeing

up your associates up for more valueadded

tasks.

Older automation technologies

Automation technologies as a whole

aren’t new; warehouses have been

embracing them for years. As such, there

are older automation technologies that

are being replaced by flexible collaborative

picking robots, such as:

• Automated Storage and

• Retrieval Systems (ASI RS)

• Pick-to-light and put-to-light systems

• Voice tasking technology

• Automatic guided vehicles (AGVs)

• Automated sortation systems

Contributing author John Gomez,

6 River Systems

32



33

34


Global Cargo News

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?