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Category: Logistics

Retail News Asia is committed to providing both local and global retailers with the latest Logistics news throughout the Asian market. This on a daily base.

  • Fuel price hikes a great burden on transport businesses

    Fuel price hikes a great burden on transport businesses

    It is among many businesses that are suffering due to the surge in fuel prices, which threatens to cause inflation and eventually slow down the recovery of the economy hit by two years of Covid-19.

    RON95 gasoline saw its price increased by another 2.5 percent to a new peak of VND32,370 ($1.39) on June 13.

    This means it has risen by nearly 39 percent since the beginning of this year. For Tuan Duyen bus company, which operates on the Hanoi-Ho Chi Minh City route, this means diesel costs have doubled since before the pandemic to VND30 million for a round trip.

    But the number of passengers has fallen by 40 percent in the two years, Dao Ngoc Tuan, the owner of the company, said.

    He said he is considering selling the buses but it is difficult to get reasonable prices as there are few buyers amid the rising gasoline prices.

    Raising prices is an option, but business owners are concerned about its effect on sales.

    Some companies have however decided they cannot sustain losses any more.

    Viet Tan Phat bus company this week raised fares on routes between HCMC and Central Highlands provinces by 29 percent to VND400,000.

    Another transport company, Vintrans, sold some of its buses that require a lot of fuel and bought 20 new fuel-efficient ones.

    The company is also increasing the number of deliveries per trip to lower costs though this means speed is reduced.

    Airlines are set to face continued difficulties with rising fuel prices.

    Dang Anh Tuan, Vietnam Airlines’ communications head, said at a recent event in Thailand that oil prices have surged to $120-160 per barrel as against $80 the company had budgeted for.

    This means expenses could be VND8 trillion higher than estimated, and fares have been hiked as a result, he said.

    Companies are doing all they can to ensure smooth operations amid inflationary pressures.

    Ride-hailing firm Gojek, which has seen its drivers’ operating costs rise by 10-15 percent, is offering new bonuses to the most productive drivers to offset their increasing expenses.

    It has been seeking to increase recruitment of drivers to ensure demand is met during peak hours.

    Between April and May, its number of car drivers increased by 20 percent in HCMC and doubled in Hanoi.

    Transport industry insiders are seeking further tax cuts to help reduce their costs.

    Bui Danh Lien, deputy chairman of the Hanoi Transport Association, said fuel costs used to account for 40 percent of expenses, but have now risen to 50 percent for many companies.

    They could hike prices but end up losing passengers, he said.

    The government should further cut taxes such as the special consumption tax to bring down fuel prices, he said.

    Nguyen Duc Nghia, deputy director of the HCMC Business Association’s small and medium enterprises support center, proposed a tax break on gasoline for three to six months.

    Meanwhile, the government has been saying the increase in gasoline prices in Vietnam is lower than in other countries, only rising by 24-62 percent since the beginning of this year, while in Singapore, which Vietnam often uses as a benchmark, they have risen by 41-84 percent.

    This is because Vietnam has used its fuel stabilization fund and cut environmental tax on gasoline by half to VND2,000, Le Viet Nga, deputy head of the Ministry of Industry and Trade’s domestic market department, said recently.

    The ministry has proposed scrapping the tax altogether to bring prices down further.

    For now companies are caught between a rock and a hard place as continued operations means accepting low profits or even losses while increasing prices could mean losing customers.

    Tu of Nhat Tin Logistics said his company is doing all it can to ensure prices are not raised, but if inflation continues, it would have no choice but to make further adjustments to prices.

     

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  • Innovative logistics models in great demand

    Innovative logistics models in great demand

    Hardy Diec, Managing Director of FedEx Express Indochina, predicts greater demand for innovative logistics models to enhance online to offline customer experience and support swift pivot businesses.

    What’s the status quo with the logistics industry?

    Supply chains have never been more important. More than that, reliability and accuracy in these supply chains have now become even more paramount. During this pandemic, the logistics industry has proven to be vital, whether in delivering critical healthcare shipments including vaccines and medicine, or delivering huge volumes of e-commerce shipments to end consumers.

    The pandemic has shifted consumer behavior greatly. The boom in e-commerce will continue to be a powerful engine of the global economy. We’re witnessing how essential supply chains are to business survival, success and growth – they are not just an opportunity to reduce cost.

    Businesses are rethinking their supply chains, moving to a “just in case” approach for inventory management to counter unplanned scenarios. Being able to receive products and critical components either by 10:30 a.m. or noon from overseas suppliers means businesses can now improve their competitiveness in the marketplace. In turn, it is driving demand for early-in-the-day delivery of time-sensitive shipments services like FedEx International Priority Express (IPE).

    Demand for cross-border e-commerce is expected to grow even post-pandemic in Vietnam and the region. Vietnam’s e-commerce market is forecast to grow by a staggering 300 percent, from $13 billion in 2021 to $39 billion in 2025, with more consumers shopping online. There will be greater demand for innovative logistics models for a seamless online to offline customer experience and to support the swift pivots businesses are taking to sell online, in step with customer demand.

    What solutions does FedEx provide, given the above insights?

    Firstly, investing in our air network enables us to move quickly to changes in supply chains. When we saw high demand for express air cargo, we were able to add six new flights, starting in August 2021, to enhance connectivity to Europe and the U.S. for customers in Asia Pacific -including Vietnam businesses – adding nearly 2,700 tons in capacity every week.

    To cater to different e-commerce shipping needs, we’re offering businesses in Vietnam more options using different modes of transport through our air, sea and road networks. This includes connecting regional and domestic cities through our FedEx Asia Road Network (ARN) – spanning more than 7,000 km – delivering to eight major locations: Hanoi, Guangzhou, Bangkok, Da Nang, Ho Chi Minh City, Penang, Kuala Lumpur and Singapore.

    We continue to enhance our regional and global network to enhance connectivity with other competitive markets for our customers to access and we are building solutions that will empower Vietnamese businesses to participate in cross-border trade particularly in the dynamic e-commerce marketplace.

    What advice do you have for business owners in Vietnam? What are the opportunities at the moment?

    Firstly, take advantage of free-trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Vietnam – EU (EVFTA), and the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement, which can boost investment access and freer trade with these trading partners. These FTAs enable Vietnam businesses to take advantage of reduced tariffs and at the same time attract companies to relocate or expand manufacturing in Vietnam and export to partners. Improved trading access will offer greater opportunities to grow cross-border trade for Vietnam.

    E-commerce and digitalization are key opportunities for Vietnam businesses particularly for small and medium-sized enterprises (SMEs) to spur growth. Vietnam has more than 870,000 enterprises, with SMEs accounting for more than 98 percent. While SMEs have been some of the hardest hit during the pandemic, by shifting to online business models and digitalization they have also been the community who stand to benefit the most and stay ahead and boost competitiveness.

    A key factor to winning in e-commerce, identified in our FedEx whitepaper “E-commerce Megatrends to watch” is making online shopping a more “connected” experience across platforms. This requires a smooth end-to-end shopping experience from the moment they enter the website or social channels all the way to fulfillment and finally delivery.

    To help Vietnam’s businesses, including SMEs, deliver a seamless e-commerce experience from online to offline, we’ve teamed up with more than 20 e-commerce platforms and marketplaces. Enabling customers and e-tailers to select our range of shipping capabilities and easily generate FedEx shipping labels or use additional specialized FedEx features without leaving those e-commerce platforms has become our priority.

    Moreover, we’re using digital solutions to make shipping smarter and easier. Our goal in digitization is to give greater control and visibility for businesses to manage e-commerce shipments. For instance, FedEx Delivery Manager International allows e-tailers to offer their customers the freedom to customize their delivery preferences. In addition, we improving easy-to-use online tools like FedEx ship manager, manager, online billing (FedEx Billing Online); FedEx electronic trade documents, helping both e-tailers and consumers save time when preparing shipments and stay competitive.

    What is the FedEx vision for the future?

    Trade, while being an important driver of Vietnam’s remarkable economic growth over the past two decades, is carbon-intensive – accounting for one-third of the country’s total greenhouse gas emissions. Addressing climate challenge is a very real need today, and an important and collective effort which will impact the future of the country and the health of our communities.

    That’s why we’re using our expertise in logistics to build more sustainable transportation solutions. In fact, we’re working our way toward delivering a more sustainable future including our goal of carbon neutral operations by 2040, which will outpace the targets set by the Paris Climate Agreement by a decade. To achieve this ambitious goal, we’re investing US$2 billion into three key areas that matter the most – vehicle electrification, sustainable energy, and carbon sequestration.

    At the same time, we’re looking to innovative technologies and Artificial Intelligence, including robotics and unmanned vehicles – to reduce road transportation costs and help tackle traffic congestion in cities. For instance, we’re testing zero-emissions autonomous delivery vehicle in China through collaboration with Neolix and battery powered robotics Roxo™, the SameDay Bot® to explore new ways of delivering to our customers’ door-step more sustainably. We will continue to look at ways to connect the world responsibly and resourcefully.

    As one of the world’s largest transportation providers, what role does FedEx play in terms of social responsibility?

    Using our network to deliver for good is what we do and who we are. Not only are we connecting trade and moving the world forward every day, but one of our most important roles is delivering critical aid. Since the start of the pandemic, we have transported more than 14,000 Covid-19 humanitarian aid shipments throughout the world including moving vaccines and test kits to support Vietnam’s fight against Covid-19. Most recently, we delivered 76 tons of critical medical aid for Ukrainian refugees to Poland via a FedEx humanitarian relief flight in March.

    Fostering future entrepreneurs in Vietnam is important to us because we see small business as a driver to creating new jobs, support their families and contribute to thriving communities. For more than a decade, we’ve been inspiring the next generation of leaders in Vietnam through the FedEx/Junior Achievement International Trade Challenge (FedEx/JA ITC) program. FedEx was founded by an entrepreneur with an innovative business idea, which is why we believe in giving resources to people with great ideas that have the potential to change the world for the better.

    Moreover, we support improving healthcare access for remote areas in Vietnam. Through the FedEx delivery heartbeats outreach clinic program, in collaboration with VinaCapital Foundation (VCF), we are bringing free specialty healthcare and medical treatment for congenital heart disease to children in rural areas of the country. We’re proud that our efforts are improving the lives of more than 200,000 children. To add, in May, we’re teaming up with Orbis to train eye care professionals across Vietnam on ways to prevent the worsening of vision loss due to glaucoma in our new virtual Flying Eye Hospital project. By combining online and practical training, we will enable more skilled eye care professionals to offer access to quality eye care for patients particularly in rural areas.

    Through collective efforts we will continue to deliver positive changes to help local communities, businesses and economies prosper.

  • China’s JD Logistics seals US$1.1bn capital increase, stock drops

    China’s JD Logistics seals US$1.1bn capital increase, stock drops

    China’s JD Logistics priced new shares issued on Friday (Mar 25) in a US$1.1 billion capital increase at a steep discount to their previous close, triggering a slump in its stock early in the Kong Kong trading session.

    According to a Hong Kong Stock Exchange filing, JD Logistics priced the shares at HK$20.71 each, a discount of about 10 percent to Thursday’s closing price, to raise HK$8.53 billion (US$1.09 billion) on Friday. The stock fell by up to 11 percent on Friday in early trade to HK$20.35.

    The deal consisted of a placement of about US$700 million worth of shares to its parent company JD.com, and about US$400 million in a primary share sale, according to filings on Thursday.

    It was the first follow-on share sale in Hong Kong since Feb. 21, and the biggest since Sunac China carried out a US$580 milllion top-up placement in early January.

    It was also the third-largest follow-on deal in Asia and fifth globally this year, according to Refinitiv data.

    The share sale came despite ongoing volatility in regional equities markets, with Hong Kong’s Hang Seng Index down 6.5 percent this year.

    The top 15 investors who bid during the bookbuild were allocated 80 per cent of the stock that was on offer, according to a source with direct knowledge of the matter, who declined to be identified because he was not authorised to discuss the deal.

    JD.com did not immediately respond to a request for comment on the deal’s composition.

    JD Logistics said it would use the money raised to help fund potential acquisitions and build up its cash reserves.

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  • China’s JD Logistics agrees to buy courier company Deppon

    China’s JD Logistics agrees to buy courier company Deppon

    Chinese e-commerce giant JD.com on Sunday said that its subsidiary JD Logistics has agreed to buy domestic courier Deppon Logistics.

    Under the deal, JD Logistics will acquire 99.99% equity stake in Deppon Holdco for a total consideration of about 9 billion yuan ($1.42 billion). Deppon Holdco owns a total of about 66.50% of Deppon Logistics.

    JD Logistics will then make an offer for all the issued shares of Deppon Logistics not held by Deppon Holdco, for 13.15 yuan per share.

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  • First cargo airline gets aviation authority green light

    First cargo airline gets aviation authority green light

    The Civil Aviation Authority of Vietnam has recommended that the Ministry of Transport should issue an air transport license to Vietnam’s first proposed cargo carrier, IPP Air Cargo.

    It said the airline meets all requirements, including 100 percent funded ownership by Vietnamese entities.

    IPP Air Cargo has a charter capital of VND300 billion ($13.13 million), with Imex Pan Pacific Group holding a 70-percent stake and the family of Johnathan Hanh Nguyen, the company chairman, the rest.

    Nguyen had mooted the establishment of the airline last year, but the CAAV said it was not considering applications amid the Covid-19 outbreak.

    With Vietnam now resuming international flights, IPP Air Cargo is set to become its first full-fledged cargo airline.

    After the air transport license, the company has to get other permits to fly, including the aircraft operator certificate.

    IPP Air Cargo plans to start with five freighters (Boeing 737 or 777 or equivalent) and double the number in the fifth year.

    It targets revenues of $71 million in the first year of operation.

  • J&T Express Expands Global Network Coverage to Include Mexico

    J&T Express Expands Global Network Coverage to Include Mexico

    J&T Express, an international express logistics company, announced last week that it has officially entered the Latin American market and successfully launched its network in Mexico.

    This latest expansion brings J&T Express’ global network coverage to a total of eleven countries, enabling the logistics leader to support its customers to further tap into the e-commerce boom by reaching global markets beyond Asia.

    With 12 sorting centers and 26 distribution centers in Mexico, the network covers key regions in all 32 Mexican states. As an important aspect of its courier service, the Mexican version of the J&T Express mobile application will also be launched soon.

    “As part of a new generation of express logistics companies with increased focus on internationalization, J&T Express attaches significant importance to the Latin American market,” said Charles Hou, Group Vice President of J&T Express. “The launch in Mexico is an integral step in the expansion of our global network, which further demonstrates the benefits of the regional sponsorship model in our global expansion. In the future, we hope to continue building our competitive advantage through refined local operations, our unique management model and technological improvements, to provide customers with quality logistics experience.”

    Ryan Zhang, Head of J&T Express Mexico, said, “Mexico is a logistics hub in Latin America, and home to the headquarters of many Latin American companies. It serves as an important strategic channel for J&T Express to continue its expansion in the market. This network launch is another milestone in J&T Express’ international strategy, and we hope to create a pleasant courier and shipping experience for our Mexican customers through efficient and high-quality services.”

    Previously, J&T Express’ delivery network covered ten countries and regions including China, Indonesia, Malaysia, Thailand, the Philippines, Cambodia, Singapore, the UAE and Saudi Arabia. Following the successful launch of the network in Mexico, J&T Express’ first stop in Latin America, the company aims to further cultivate emerging markets and expand its global footprint in the future to connect the world with greater efficiency and bring the benefits of logistic services to all.

    Andrew Sim, CEO of J&T Express Singapore, said, “With e-commerce becoming more cross-border, the expansion of J&T Express’ global network coverage to include Mexico will bring greater opportunities for J&T Express customers in Singapore. Alongside strengthening our international delivery capabilities here, our expanding network will enable our customers to ride a growing wave of e-commerce internationally by opening new doors to reach wider markets beyond Asia.”

    This milestone is one of several strategic initiatives undertaken by J&T Express recently as it aggressively expands its global coverage to offer customers extensive e-commerce reach. In Singapore, as the one-stop e-commerce solutions expert, J&T Express has built its current suite of offerings including last-mile delivery, fulfilment, sales channel management, and international shipping which has been enhanced to cover over 220 countries and regions worldwide. The newly launched warehouse at Changi Airfreight Center will ensure greater efficiency and security of quality international delivery services offered to both local and regional customers.

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  • Hellmann responds to the global eCommerce boom: Easy eComm

    Hellmann responds to the global eCommerce boom: Easy eComm

    Hellmann Worldwide Logistics introduces a new cost-effective and seamless solution facilitating order fulfillment for international businesses who wish to enter the US market without the need for a domestic fulfillment center or storefront presence. The new Easy eComm model, which is slated to launch this month, serves as a turn-key solution that makes it possible for businesses to fulfill their customer’s online purchases in the US, swiftly and cost-efficiently.

    Operating as a virtual order fulfillment center, this market entry solution developed by Hellmann requires no capital investment or local distribution center set-up for customers. It utilizes the new informal “Type 86” customs entry that enables importing of merchandise valued up to USD 800. In this way, the new solution allows manufacturers of fashion apparel and fast-moving consumer goods to leverage the global freight forwarder’s gateway and warehouse network to expand their reach to a customer base of over 320 million US consumers.

    The Easy eComm solution is ideal for online merchants of lower-value goods to test the US market space without the need for local presence. The model employs a three-phased approach that makes it possible for new importers to scale their business gradually, with Hellmann’s established team of experts managing the implementation of each phase of the US market entry strategy. Launching with international fulfillment from the point of origin and returns logistics in phase one, the inbound journey continues with the set-up of an international returns consolidation center in phase two. It culminates with the establishment of a full-fledged US distribution center in phase three. The Easy eComm implementation process is designed to activate US market fulfillment in just a few weeks, with the ability to reach full deployment of in-market operations within twelve months of inception.

    “Our Easy eComm Solution enables international businesses to easily reach US customers. As part of the full-service offering, we handle the entire process and provide customized solutions – from the consolidation of the goods in the country of origin to door-to-door delivery in the USA. By providing our local expertise and infrastructure, we support our customers to successfully implement and evolve their business plan in the US market,” says Patrick Oestreich, Chief Commercial Officer, Hellmann Worldwide Logistics.

    “We are here to welcome new companies to the US. Our team is looking forward to assisting them in their transition into the US market, and we will work very closely with each business to understand where Hellmann as a partner can further support their journey to reaching this US customer base,” adds Peter Huewel, Regional CEO North America, Hellmann Worldwide Logistics.

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  • AirAsia X signs cargo deal with Teleport in bid to boost freight

    AirAsia X signs cargo deal with Teleport in bid to boost freight

    The announcement came just days after Capital A revealed plans to reorganize the airline division and diversify in an online press conference. During the conference, Capital A’s chief executive Tony Fernandes said that for the foreseeable short-term future, the focus of AirAsia Aviation Group will be on short-term travel within the Southeast Asian region.

    The Teleport deal comes as AirAsia X tries to boost its cargo revenue to make up for the lack of revenue on the passenger side as a result of the COVID-19 pandemic.

    On January 26, 2022, AirAsia X announced that it had partnered with French transport, logistics, and supply chain GEODIS to increase cargo capacity in Asia Pacific.

    AirAsia X CEO Benyamin Ismail said that the company is in talks with other “major global clients that have air cargo requirements”.

    “We are also in discussions with several other major global clients that have air cargo requirements, particularly to where we have established bases and flying rights. It’s just two months post our restructuring and the appetite for expansion of our cargo operations is significant. This dovetails neatly into one of the core pillars of our combination carrier strategy. For the foreseeable future, cargo revenue will underpin our route strategy and passenger revenue for the first time, will be ancillary,” Ismail said in a statement.

    COO Captain Suresh Kumar Bangah said that the airline will only fly when it’s profitable and that AirAsia X hopes to bring back more aircraft over the course of the year.

    “We will only fly if it’s profitable to fly. With our restructured low-cost base, we can fly profitably where other airlines may not be able to and this is a significant advantage to us.  We intend to add a further one plane a month to full service from now and we hope to have our full fleet operational by the end of the third quarter. As more aircraft are brought back into service, we are able to recall back pilots and crew who have been through a tough period during this pandemic,” Bangah said.

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  • J&T Express celebrates two years of strategic growth and expansion in Singapore

    J&T Express celebrates two years of strategic growth and expansion in Singapore

    International express logistics company J&T Express celebrated its second anniversary in Singapore on 9th January 2022, recording two years of exponential growth and progress, including a year-on-year double digit growth for parcel volumes, and an approximately three-fold increase in the total size of all its warehouses.

    Tapping into Singapore’s potential as a regional logistics hub, J&T Express established its operations in the country in January 2020, and has since accelerated its growth plans and invested significantly into its infrastructure. Starting off with just one sorting hub, the company now operates two sorting hubs across Singapore, a fulfilment centre at Penjuru and a warehouse at the Changi Airfreight Centre, and has also expanded its fleet four-fold.

    In addition to its infrastructure development, J&T Express has been actively growing its talent pool across the various departments in Singapore to continue driving success, including building new roles and upskilling employees through regular training programmes. Since 2020, J&T Express’ Singapore team has grown six-fold across a diverse range of roles such as software development, data analytics and automation.

    Andrew Sim, CEO of J&T Express Singapore, said, “J&T Express is in a unique position of not only playing the role of a logistics provider, but also serving as a one-stop e-commerce specialist across each and every touchpoint in the supply chain. Our tremendous growth and fast-paced expansion in Singapore reflects the shift we have seen in the market with an increasing number of Singaporeans embracing e-commerce.”

    With technology and innovation as its strategic priorities, J&T Express continues to strengthen its capabilities to improve operational efficiency and service quality. This includes upgrading its system of operations management, enhancing the technology support for seamless e-commerce experiences, and further optimising its fulfilment and warehousing solutions. In May 2021, the J&T Express mobile app was also launched to enable consumers and small business owners to arrange for door-to-door delivery in just a few clicks.

    J&T Express is also committed to supporting the growth of its e-commerce partners and Singapore’s e-commerce industry as a whole. As part of its efforts, the company launched its inaugural virtual J&T Fashion Week in August 2021 to provide a public platform for local e-commerce businesses to reach a wider audience, successfully helping them reach 3 million Singaporean consumers through online platforms.

    Looking ahead, as e-commerce becomes more cross-border, J&T Express aims to invest further in growing its network to help its customers reach wider markets, building on its current suite of offerings which includes international shipping to over 220 countries and regions worldwide.

    Mr Sim noted that as customers increasingly expect businesses to adapt to their needs and challenges, it is crucial that J&T Express continues to introduce new services and solutions that can meet the latest market demands.

    He added, “We are proud to be one of the key partners of Pick Network and the Locker Alliance, which will help us further enhance our last mile delivery services. We are also excited to have launched J&T Points, an island-wide network of service points that provides sellers greater flexibility by enabling them to drop off parcels at their own convenience and receive real-time tracking. Moving ahead, we look forward to expanding this network to provide even greater access to all Singaporeans.”

    Reflecting on J&T’s achievements over the last two years in Singapore, Mr Sim said, “J&T Express prides itself in being at the forefront of the industry, enabled by our focus on leveraging technology to advance our offerings, as well as our customer-first approach to be the partner of choice. We look forward to further driving our efforts in the market, strengthening our position as a one-stop e-commerce solutions specialist and constantly evolving and improving our services with a focus on agility and innovation.”

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  • DB Schenker and Lufthansa Cargo welcome Lenovo on their CO2-neutral flights

    DB Schenker and Lufthansa Cargo welcome Lenovo on their CO2-neutral flights

    Another major global player joins DB Schenker and Lufthansa Cargo on their way towards greener supply chains: Global hardware technology provider Lenovo decided to let fly 20 tons of chargeable weight per week from Shanghai (PVG) to Frankfurt (FRA). The carbon-neutral freighter flight is the only regular full charter connection worldwide which is 100 percent covered by sustainable aviation fuel (SAF). SAF is produced out of renewable waste and residue raw materials such as used cooking oils. The transported Lenovo products include laptops, notebooks, and PCs for both private and corporate clients. 

    Thorsten Meincke, Global Board Member for Air & Ocean Freight at DB Schenker: “Our unique SAF full charter flights help corporates to make their shipments more sustainable. Lenovo is a major customer for this game-changing initiative and an example how shippers are keen for real change towards greener transports. We look forward to seeing further companies who would like to prioritize decarbonizing their supply chains together with us.”

    Gareth Davies, Head of Global Logistics at Lenovo: “Sustainability is critical to our business and mission of delivering smarter technology for all. We are proud that we are further enhancing our solutions through this collaboration with DB Schenker and Lufthansa Cargo. For all businesses and individuals, adopting programs that improve sustainability is incredibly important and we are delighted about this new partnership.”

     Ashwin Bhat, Chief Commercial Officer at Lufthansa Cargo: “Our joint effort with DB Schenker to avoid CO2 emissions is continuously growing stronger. An increasing number of customers realizes that we need to work together across industries to achieve our shared goal. Only together, we can make a real difference. With our SAF-covered flights, we are doing pioneer’s work.”

    DB Schenker and Lufthansa Cargo started the world’s first regular SAF-covered full charter air cargo connection between Frankfurt and Shanghai in April 2021 and extended the joint mission throughout the entire winter flight schedule. The CO2 released during combustion in the engine is only the CO2 removed from the atmosphere during the photosynthesis phase of the plants that were utilized to produce the oils SAF is refined from.

    By opting for the SAF based way of transportation offered by DB Schenker in cooperation with Lufthansa Cargo, Lenovo saves around 20 tons of conventional kerosene per flight and, thus, 62 tons of greenhouse gases (CO2e Well-to-Wheel) weekly. In addition, the around 16 tons CO2e resulting from the production and transport of the SAF (upstream emissions) are offset by compensatory measures. Overall, full carbon neutrality is achieved.

     

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  • Supply chain issues to worsen as virus impacts transport sector

    Supply chain issues to worsen as virus impacts transport sector

    Thanks to the rollout of coronavirus vaccines, the global economy is slowly starting to emerge from the pandemic.

    But Covid-19 has left one very destructive economic issue in its wake: disruption to global supply chains.

    The rapid spread of the virus in 2020 prompted shutdowns of industries around the world and, while most of us were in lockdown, there was lower consumer demand and reduced industrial activity.

    As lockdowns have lifted, demand has rocketed. And supply chains that were disrupted during the global health crisis are still facing huge challenges and are struggling to bounce back.

    This has led to chaos for the manufacturers and distributors of goods who cannot produce or supply as much as they did pre-pandemic for a variety of reasons, including worker shortages and a lack of key components and raw materials.

    Different parts of the world have experienced supply chain issues that have been exacerbated for different reasons, too. For instance, power shortages in China have affected production in recent months, while in the U.K., Brexit has been a big factor around a shortage of truck drivers. The U.S. is also battling a shortage of truckers, as is Germany, with the former also experiencing large backlogs at its ports.

    Unfortunately, experts like Tim Uy of Moody’s Analytics say that supply chain problems “will get worse before they get better.”

    “As the global economic recovery continues to gather steam, what is increasingly apparent is how it will be stymied by supply-chain disruptions that are now showing up at every corner,” Uy said in a report last Monday.

    “Border controls and mobility restrictions, unavailability of a global vaccine pass, and pent-up demand from being stuck at home have combined for a perfect storm where global production will be hampered because deliveries are not made in time, costs and prices will rise, and GDP growth worldwide will not be as robust as a result,” he said.

    “Supply will likely play catch up for some time, particularly as there are bottlenecks in every link of the supply chain—labor certainly, as mentioned above, but also containers, shipping, ports, trucks, railroads, air and warehouses.”

    Supply chain bottlenecks — congestion and blockages in the production system — have affected a variety of sectors, services and goods ranging from shortages of electronics and autos (with problems exacerbated by the well-known semiconductor chip shortage) to difficulties in the supplies of meat, medicines and household products.

    Amid higher consumer demand for goods that have been in short supply, freight rates for merchandise coming from China to the U.S. and Europe have soared, while a shortage of truck drivers across both the latter regions has exacerbated the problem of getting goods to their final destinations, and has led to high prices once those products hit store shelves.

    The pandemic has only served to highlight how interconnected, and how easily destabilized, global supply chains can be.

    At their best, global supply chains lower costs for businesses, often due to reduced labor and operating costs linked to the manufacturer of the products they want, and can spur innovation and competition.

    But the pandemic has highlighted deep fragilities in these networks, with disruption in one part of the chain having a ripple-down effect on all parts of the chain, from manufacturers to suppliers and distributors with disruptions ultimately affecting consumers and economic growth.

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  • Trade rises to new high

    Trade rises to new high

    Foreign trade surged 22.6 percent in 2021 to a new high of $668.5 billion despite the supply chain disruptions caused by Covid-19.

    Exports were up 19 percent at over $336 billion, but domestic companies only accounted for 26.4 percent of it.

    Over 35 categories of goods saw exports of over $1 billion.

    Imports grew by 26.5 percent to $332 billion, with domestic companies accounting for 34 percent.

    The U.S. was the biggest market buying goods worth $95.6 billion, while China was the biggest source of imports ($109.9 billion).

    There was a trade surplus of $4 billion, the sixth straight year in which exports have exceeded imports.

    But the trade deficit with China not only continued but increased by 53 percent to $54 billion.

  • Maersk agrees US$3.6 billion deal to buy LF Logistics

    Maersk agrees US$3.6 billion deal to buy LF Logistics

    Container shipping giant Maersk on Wednesday agreed to buy Hong Kong-based LF Logistics for $3.6 billion in an all-cash deal, as it seeks to expand beyond its core ocean freight business.

    The deal is one of the group’s largest takeovers to date and follows a series of acquisitions including e-commerce firms, a freight forwarder specialising in air freight and its smaller rival Hamburg Sud.

    “The acquisition will further strengthen Maersk’s capabilities as an integrated container logistics company, offering global end-to-end supply chain solutions to its customers,” the company said in a statement.

    Maersk will buy LF Logistics from controlling shareholder Li & Fung, a Hong Kong-based supply chain manager, and from Singapore state investor Temasek which bought 22 percent of the company in 2019. The deal is expected to close in 2022.

    With a network of 223 warehouses and around 10,000 employees in 14 Asian countries, LF Logistics provides land-based logistic services such as warehousing and trucking to over 250 global customers.

    The company had revenue of $1.3 billion last year. Maersk said it expects to more than double the revenue and operating profit at the company by 2026.

    Record high container freight rates stemming from the impact of the pandemic have boosted big shipping companies and prompted deal-making by Maersk and its rivals, including CMA CGM and Mediterranean Shipping Company (MSC).

    With chaotic conditions in the global supply chain, big companies have been willing to pay a premium for more reliable and integrated freight solutions.

    The price implies that the valuation of LF Logistics has more than doubled since the Temasek deal valued the company at nearly $1.4 billion two years ago.

    French billionaire Vincent Bollore received a 5.7 billion-euro ($6.43 billion) offer from MSC for his African logistics assets, his company Bollore SE said on Monday.

    This month, French rival CMA CGM accelerated its push into warehouses and end-to-end logistics by agreeing a $3 billion deal to buy assets from US technology group Ingram Micro. In November, it bought a container terminal in Los Angeles for around $2 billion.

    Since breaking up its conglomerate in 2016, including selling its oil and gas business, Maersk has transformed into an integrated logistics company.

    Although container shipping accounted for 73 percent of its revenue last year, Maersk aims to offer customers such as Walmart and Nike shipment of goods from factory to store, even offering last-mile delivery to end-customers.

  • 4,000 container trucks stranded at China border by stringent inspections

    4,000 container trucks stranded at China border by stringent inspections

    Vietnam’s agriculture exports are taking a hit as China maintains a very strict inspections regime at northern border gates as a Covid-19 prevention measure.

    As of Friday, as many as 4,000 container trucks were stranded at the border gates in Lang Son Province, said Le Thanh Hoa, deputy head of the Department of Processing and Trade for Agro-Forestry-Fisheries products under the agriculture ministry.

    At the three border gates of Huu Nghi, Tan Thanh and Chi Ma, the current customs clearance speed has fallen by more than half to about 220 container trucks per day, Hoa said at a conference on agriculture trade held Saturday in Hanoi.

    For each truck carrying dragon fruit, jackfruit, and other fruits stuck at the Tan Thanh gate, it was taking 10-14 days on average to get customs clearance.

    At the Mong Cai border gate in Quang Ninh Province, just one truck gets cleared every week, Hoa said.

    The management board of the Mong Cai gate said Saturday morning that as many 800 trucks of frozen seafood and 300 trucks of fruits were stranded there.

    Hoa recommended that businesses carefully check agricultural products exported via border gates because China has been strengthening its Covid-19 disease control regime, resulting in careful, stringent inspections of products entering its territory.

    To cope with this situation, exporters have to carefully prepare the packaging of their goods so that they can get through the customs easily and at fast pace, he said.

    On the other hand, to avoid congestion and save costs, businesses need to arrange a reasonable clearance time and not send many trucks to the border gates at the same time, he added.

    After the fourth Covid-19 wave hit Vietnam in late April, China has been increasing inspections and disinfection of goods and means of transport and drivers from the country.

    They are also tightening the management and traceability of goods, which has contributed to lengthening the customs clearance procedure.

    In September, China had temporarily ceased the import of dragon fruit from Vietnam after detecting the novel coronavirus on its packaging. It had also reported a similar detection on Vietnamese mangosteen in early August.

    Hu Suo Jin, Economic and Commercial Counselor of the Chinese Embassy in Vietnam, said the pandemic in Vietnam was developing quite complicatedly and exporters need to disinfect the means of transport and drivers also need to increase adoption of preventive measures to avoid leaving the virus on goods.

    In addition, if possible, Vietnamese goods should be labeled with a negative test certificate on their packaging, he said.

    China is one of Vietnam’s top trading partners. The import-export turnover of agro-forestry-fishery products between the two countries had grown strongly from $8 billion in 2015 to $11 billion last year.

    China was Vietnam’s second-largest export market for agricultural, forestry and fishery products behind the U.S., posting an export turnover of $8.4 billion in the first 11 months of the year, accounting for 19.2 percent of Vietnam’s total agricultural exports.

  • Germany’s DB Schenker To Order 1,500 Electric Trucks From Sweden’s Volta

    Germany’s DB Schenker To Order 1,500 Electric Trucks From Sweden’s Volta

    Deutsche Bahn’s logistics unit Schenker will order almost 1,500 electric trucks from startup Volta Trucks to transport goods from European terminals into city centres and urban areas, the companies said on Tuesday. DB Schenker will use prototype electric trucks in the spring and summer of 2022 in distribution operations, findings from which will be used in the production of 1,470 electric trucks. Those trucks will be made at a former MAN truck plant in Austria that was taken over by Steyr Automotive. The electric trucks will operate at 10 DB Schenker locations in five countries.

    The companies didn’t immediately provide details on the transaction’s value.

    Stockholm-based Volta Trucks, which also operates in the UK, plans to start production of the Volta Zero, a 16-tonne electric truck, in 2022. Bans on fossil-fuel commercial vehicles will take effect in some European cities over the next few years, putting pressure on logistics providers to find zero-emission alternatives.

    “The large-scale partnership with Volta Trucks allows us to significantly increase the pace of electrification of our fleet and invest in greener transport solutions,” Cyrille Bonjean, DB Schenker’s executive vice president for land transport in Europe, said in a statement. DB Schenker has around 74,200 employees in over 130 countries. The latest order brings Volta Trucks’ order book to around 4,500 electric trucks. It previous biggest public order was for 1,000 trucks, from French refrigerated truck firm Petit Forestier.

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