Third Party Logistics News - 3PL wire » Uncategorized

Twitter Weekly Updates for 2010-08-15

3plwire — Mon, 16 Aug 2010 02:52:00 +0000

For the latest on the Mumbai port situation: http://www.3plwire.com/2010/08/10/mumbai-vessel-collision-update-ports-to-reopen-august-15th/ #
Original Mumbai post – http://www.3plwire.com/2010/08/09/cargo-ships-collide-at-mumbai-all-inbound-and-outbound-sailings-suspended/ #
China inflation – the KFC index. So true. http://chovanec.wordpress.com/2010/08/10/the-kfc-index/ #

“The KFC Index” – One way of looking at China inflation statistics

SwizStick — Tue, 10 Aug 2010 20:49:19 +0000

I’ve mentioned Patrick Chovanec’s blog before, today he has an interesting post that illustrates how inflation can very much be a psychological phenomenon: by way of his personal experience with rising local KFC prices:

How does my KFC experience in Beijing compare? A year ago, my standard meal cost RMB 21.50. A couple of months ago it rose to RMB 25.50. Today, for the first time, it set me back RMB 28.50. For those keeping track, that’s a 32.6% price hike in a single year.

There’s nothing scientific about this sample. It’s purely anecdotal. Perhaps KFC, or the Beijing market, is an aberration (I’m eager to hear anyone’s theories). But I think it’s a data point worth noting, such caveats aside. KFC isn’t some outlier in the Chinese economy, like high-priced Starbucks that still caters mainly to young, cosmopolitan latte-sippers. KFC is incredibly popular with the laobaixing (the “common people:), who find chicken — especially the localized versions offered at KFC — far more familiar and appetizing than either coffee or burgers. It outnumbers McDonald’s 2:1, with over 2,000 outlets and a reach that extends far into 3rd and 4th tier provincial cities.

As he states in his post, it’s ridiculous to challenge the Chinese government’s official inflation statistics based on this one simple example. But I think it is a very common occurrence and something we see and experience more often than not. When I talk to my relatives living overseas, they could care less what the official line is on prices – they talk about how much a cup of coffee or tea costs, or why rice has gotten so expensive, or, like Professor Chovanec, the rise or fall of prices at their favorite fast food restaurants. Those perceptions often shape how we view inflation (or deflation, for that matter).

Twitter Weekly Updates for 2010-08-08

3plwire — Mon, 09 Aug 2010 02:52:00 +0000

New Incoterms announced…http://bit.ly/cRARpg #

Today’s Integrated Approach to Global Logistics and Fulfillment – Free White Paper

3plwire — Wed, 10 Feb 2010 03:10:27 +0000

From time to time we offer various publications and white papers to our readers. The latest offer, entitled “Today’s Integrated Approach to Global Logistics and Fulfillment”, comes from SAP. Click on the below link to access the report.

Free Business and Tech Magazines and eBooks

Twitter Weekly Updates for 2009-07-12

3plwire — Mon, 13 Jul 2009 02:52:00 +0000

JAL looking to raise cargo rates by 30%??? http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSBNG52914320090702 #

So-Cal port fees sending cargo to alternate ports

Splatty — Sat, 14 Mar 2009 04:14:28 +0000

I just read a great article from the JOC regarding the negative effects that the increasing list of port fees at the ports in Los Angeles/Long Beach are having on cargo volumes. The latest fee to be instituted at the ports is the “Clean Trucks Fee” which went into effect in February. The CTF is a $35 per TEU fee levied as part of the port’s clean air action plan.

Other fees currently charged by the So-Cal ports are the Alameda Corridor Surcharge and the Pier Pass fee. With the increasing fees and burden put on importers, many of my customers are looking at alternate options to bring their cargo into the States. Working in an inland destination, I find it much more cost effective to route containers via the ports of Oakland and Seattle. The importer might lose a day or two in transit, but the cost savings typically outweight the addtional days in transit.

Wow!

Splatty — Mon, 20 Oct 2008 13:47:41 +0000

Via Air Cargo Asia Pacific:

A US woman has been found guilty of embezzling more than US$480,000 from her employer, Swiss airfreight company Panalpina, the US Attorney’s office says.

She pleaded guilty to charges of unauthorised access to a protected computer, wire fraud, money laundering and aggravated identity theft over a 16-month period.

The high cost of fuel – The tipping point

Splatty — Wed, 27 Aug 2008 10:00:02 +0000

Let’s face it, there is absolutely no bigger topic in the world of logistics than the current price of fuel.

With the price of crude oil recently down from it’s high of $140 per barrel, the cost of gasoline now just under $4.00 per gallon, and the price of jet fuel causing airlines to jettison aircraft, reduce jobs, and eliminate unprofitable lanes, at what point will high energy prices cause companies who outsource manufacturing to offshore locations start bringing manufacturing back closer to home?

According to a report by MIT’s David Simchi-Levi, the tipping point for many companies to start looking at “nearshoring” is directly tied into the price of oil. Once oil reaches a certain threshold, companies may benefit by sourcing closer to home. Although the manufacturing unit costs are in many cases higher, those costs are offset by the increased shipping costs from offshore locations.

Many of the customers I currently deal with are still manufacturing all or at least a great majority of their products in China, especially those companies dealing in retail goods. However, over the past couple of months I have seen a slight increase in companies requesting quotes for transportation out of Mexico and South America. These companies are mostly looking to benchmark South America based supply chains and the corresponding total landed cost of goods with their current China based supply chain.

Drop us a comment and let us know if the high cost of fuel has warranted a look into “nearshoring” options within your company. We would be interested to know.

IATA paints gloomy picture for air cargo

Splatty — Thu, 07 Aug 2008 05:16:05 +0000

IATA’s recent report on international traffic data for June paints a fairly ominous picture of the state of the air cargo market. According to the report, air cargo declined 0.8 percent during the month of June, which marked the first decline in air cargo since May of 2005. Asia Pacific airlines took the biggest hit posting a decline of 4.8 percent. IATA attributes the main reasons for the decline to falling consumer and business confidence, and sky high oil prices.

Via IATA.org:

“The airline sector is in trouble. Losses this year could reach US$6.1 billion, more than wiping out the US$5.6 billion that airlines made in 2007. Falling demand and rising costs are re-shaping the industry,” said Bisignani. “To survive the crisis, urgent action is needed. Airports and air navigation service providers must come to the table with efficiencies that deliver cost savings. Labour must understand that efficiency is the only path to job security. And governments must stop crazy taxation and give airlines the freedom to merge and consolidate where it makes business sense.”

U.S. Ports Container Growth: Year over year growth to be achieved by October?

SwizStick — Tue, 10 Jun 2008 02:22:11 +0000

Just after posting this tidbit, on the decline in U.S. railroads’ intermodal volume and the declining import figures from the Ports of Los Angeles and Long Beach, did I read this article from Logistics Management in reference to yearly container volume growth being achieved by October:

The ports surveyed in the report—including Los Angeles/Long Beach, Oakland, Tacoma, Seattle, New York/New Jersey, Hampton Roads, Charleston, and Savannah, and Houston—handled 1.26 million TEU (Twenty-foot equivalent units) in April, the most recent month for which numbers are available. This monthly performance is 8.9 percent better than March’s 1.16 million TEU, which was the lowest volume recorded since February 2006’s 1.1 million. Despite the month-to-month gain, April was down from April 2007 by 4.9 percent.

In order for U.S.-based container ports to sustain monthly growth and return to year-over-year growth patterns by the end of October, various things need to occur to ensure that is the case, with consumer spending at the top of the list, according to Paul Bingham, Global Insight analyst and Port Tracker author. The reports calls for October volumes to come in at 1.48 million TEU, representing a 2.7 percent yearly increase and what would be the first year-to-year increase since July 2007—at 1.44 million TEU compared to 1.4 million in July 2006.

“Consumers will have to at least maintain their current, weak pace of retail spending, and not be forced to divert too much more of their income to just paying for gasoline and diesel fuel,” Bingham told LM. “The economic stimulus checks have had some impact on retail sales but less than originally expected due to the spiking fuel prices and marked decline in overall consumer sentiment.”

Another factor at play according to Bingham is that overall inflation is up due to the higher increases in oil and food prices, thus reducing the purchasing power of consumers, especially for imports other than petroleum. And as retailers are closely managing inventories to not get caught with unsold goods if demand should fall further, he explained that predicted import volumes still depend on consumers spending more in the second half of the year than in the first two quarters of the year.

I certainly hope they are correct, but the biggest issue on consumers’ minds these days is the seemingly non-stop rise in oil and fuel prices. I think the psychological impact of the daily barrage of fuel price news is having a greater impact on consumer behavior than most think, but then again I’m not in marketing or consumer behavior, so what do I know. But based on conversations I’ve had with my own family and friends, it certainly seems to be having a far more negative impact than I would have thought.

Of course, it’s not all bad news when it comes to high fuel prices – demand for gas-saving hybrid automobiles is outstripping supply:

While customers in early spring were able to drive new hybrids off lots, dealers now brandish waiting lists for the Toyota Prius, Honda Civic, and Ford Escape hybrids. Wait times range from a few weeks to several months, depending on the model and the dealership. Some customers are waiting up to six months for a Prius, the first hybrid to enter the US market and still the most popular.

Hat tip to RealClearPolitics.