Singapore will ride out the shipping storm

We may (hopefully) be seeing the green shoots of a shipping recovery, companies are still under a huge amount of pressure. Shipping is cyclical, and right now, we still seem to be on the wrong side.

Why Singapore is well-positioned to ride out the storm?It became clear that there are a number of key, long-term, strategic efforts underway to position Singapore as the shipping hub for the next 50 years. The future of the industry is looking very different and to a large degree will be dependent on a series of key developmental initiatives.

1.) Investment in technology and innovation

If there is one industry which is ripe for technological disruption, it is shipping.  Automated vessels are probably a little further off than some are predicating, but there is a lot of tech advancement to be excited about.

While vessels will have specific use-requirements (containers, bulkers, LNG carriers etc.), the technology that goes into ocean-going and onshore operations, performance monitoring, and increasing efficiencies is evolving at a rapid rate.

Listening to the ideas that are in the market, it is clear that change is in the air. The countries which can best attract tech experts, ideas, and innovators are the ones who will come out on top. Like in any competition for high-tech R&D and startups, supporting infrastructure is vital. In this regard, Singapore has invested heavily in innovation and technology—and we will continue to do so to stay ahead of the technological curve. This is the key race that needs to be won as this is the very future of shipping.

2.) Investment in education

As the shipping and offshore sectors develop and digitize, the required skillsets of current and future employees will also change. Delivering high quality, industry-relevant, education will be vital to meeting the needs of business. Singapore was recently named one of the top five national education providers and the academic infrastructure is already in place to meet the needs of the industry.

The maritime education qualifications provided by the government are already being expanded and internationalized to attract high-quality students. This is not something that is easily or quickly replicated by other countries, and positions Singapore strongly as the leading source of operations and managerial leaders.

3.) Investment in people

Although only sporadically covered in the shipping trade, the shipping industry has some major demographic issues. Decades of simply ignoring the need for the industry to have an employment brand strong enough to compete for the best talent (or second best, or third…) means a rapidly ageing workforce won't be replaced easily. Getting people into the sector is critical to the ongoing development of the local industry. The Singapore government has put in place a number of measures to provide pathways into the sector and to promote shipping as a viable career. We are attractive and will continue to be so.

4.) Government and institutional support

The Singapore government's continued support for the shipping and offshore sectors is key to Singapore retaining its position as a maritime leader. Countries like Singapore, China, and even Greece have made a strategic decision to develop the industry as an economic priority. The above points all need state support in one form or another. Additionally, tax incentives, rule of law, and investment in infrastructure are all crucial to keeping Singapore on the shipping map. All efforts are currently in place in this little island (government, regulatory, as well as private sector) to maintain our status as a leading shipping hub.

Here, again, Singapore comes out on top. If we gaze into the foggy future, and autonomous vessels are indeed commonplace, where will these ships be run from? Huge datacentre, satellite, and telco facilities will be needed. Software development and cybersecurity services will be part of day-to-day business.

For Singapore, what shipping looks like may be less vessels in the anchorage (but maybe not), but this may not be the future of shipping. As Singapore well knows, being a leader means making bold strategic decisions, driving what the future is going to look like, and providing the resources to achieve this.

The Singapore maritime sector is changing. And it has to because the future of shipping will be different. Our critics will, no doubt, point out every local company struggling, and cheer on new ports in Malaysia and Silk Roads; but this is just the ebb and flow of business-as-usual. Singapore is looking ahead, and is well placed to lead the future of the shipping industry

Higher demand for Backhaul on China – Europe spurs new services

Higher demand for Backhaul on China – Europe spurs new services

Huge investments in rail infrastructure, improved cooperation between the railways, relocation of production facilities to inland locations, growing trade between China and C.I.S. countries, and increased environmental awareness make rail transportation a viable transport option. Rail nowadays offers highly competitive solutions even to companies with very high demands on speed, reliability and safety. Therefore a growing number of electronics, automotive, industrial and consumer goods companies use the respective service.

For shipments between China and Europe rail fills the wide cost and lead time gap between air and ocean transport and is particularly attractive to companies with high value cargo or shipments between inland locations. In addition, it is the environmentally most friendly transport mode. For shipments between China and Russia as well as Central Asia rail often offers by far the best solution in terms of lead time and pricing

Backhaul demand: the game changer

The momentum that has been developing steadily on the rail freight link between China and Europe is spreading to the backhaul route with eastbound volumes rising sharply in the past year, according to DHL Global Forwarding.

DHL Global Forwarding has even opened a China rail competence center in the German city of Stuttgart to handle the increasing demand and now operates seven rail services a week between Germany and China.

“Rail freight volumes between Germany and Asia have increased 10-fold in just one year,” said Volker Oesau, CEO of DHL Global Forwarding Germany and Central Europe. This has required the expansion of its Stuttgart operation to primarily provide support to German customers in the automotive, technology, mechanical engineering, and retail sectors.

The 7,500-mile rail route connects 16 cities in China with 15 cities in Europe with forwarders building the mode into their regular services offered on the Asia-Europe trade and are now starting to do the same on the return journey. Trains of more than 40 wagons follow either the trans-Kazakh western corridor or the trans-Siberian northern corridor, connecting with the dense network of rail hubs in China, and linking with Taiwan, Japan, and South Korea.

DHL’s Stuttgart center will provide the multi-modal solutions required for the end-to-end transport processes such as collection, export, and transit formalities; the Euro-Asian rail service; customs clearance in the land of arrival; and delivery by truck or combined rail transport.

Challenges for the container train services

Challenges for service providers on the route include tracking and tracing the containers and ensuring their security. With such vast distances being traveled through remote areas, and multiple gauge changes en route, maintaining the integrity of the cargo is a key factor. DHL said track and trace and temperature information was available and its team was also developing tailored security concepts for high quality goods.

Simplified Customs Procedures

Customs procedures have been simplified with the introduction of the standardized CIM/SMGS waybill — international conventions that apply in Eastern Europe and Asia to the international carriage of passengers and goods by rail — and has minimized the administrative effort required at border crossing points.

The CIM/SMGS document is recognized by customs authorities and facilitates faster clearance of goods transport. The waybill can be used for wagon load traffic and combined transport, and improves the flow of documents at border crossings between two legal jurisdictions.

Less-than-container-load (LCL) shipments are expanding rapidly on the headhaul and backhaul China-Europe rail trades, opening up the routes to a much wider customer base. DHL Railconnect is an LCL service that the forwarder started in 2016 that uses the German rail hub of Duisburg, and in February, Kuehne + Nagel launched its KN Eurasia Express LCL service for shipments heading westbound and eastbound.

Otto Schacht, member of the management board of Kuehne + Nagel International responsible for sea freight, said with transit times of between 14 and 18 days from departure to destination terminal, delivery times were much faster than maritime transport and at lower costs compared with airfreight.

German logistics provider Dachser has also begun to offer a weekly scheduled LCL service connecting Wuhan with Hamburg with fixed weekly departures.

DB Schenker’s pioneering efforts

A pioneer in the development of block trains between China and Europe was German forwarder DB Schenker that started operating regular block trains eastbound and westbound in 2011 with FCL and LCL shipments.

DB Schenker was involved in bringing the first train from China to London in January, taking charge of the locomotive on the Duisburg to London leg via the Channel Tunnel. In the test run, the train originated in Yiwu in the eastern Chinese province of Zhejiang and reached London in around 18 days, making it twice as fast as transport by sea. The train was loaded mainly with textiles and other consumer goods.

A record number of containers, around 40,000, were transported by train along the legendary Silk Road in 2016, according to DB Schenker, which expects the volume to increase to more than 100,000 containers by 2020. Some estimates put the 2020 prediction as high as 500,000 TEU, with concerns being raised that congestion at key points, such as rail gauge change stops, could become a problem.

The AirBnB of warehousing

Thanks to new technologies, traditional businesses have been revolutionised, for example the hotel industry and temporary housing industry with AirBnB. The same concept is now being applied to warehousing by a Seattle based start-up named Flexe. It is a cloud based platform that connects organizations that need warehousing space to organizations with extra space.

Technology enablers

Multi-user warehouse have been owned by 3PL for long, but as for today, there is no tailor-made, highly flexible warehousing service offer for a company willing to pay. By focusing on profitable service offer (transshipment, picking, order preparation) rather than on stock holding would probably enable new offers to emerge.

With fast e-commerce development to be expected, related logistic needs will become more common, such as same-day deliveries and highly flexible charge. More and more retailers want to go online, but don’t always have the necessary operational knowledge. The new wave of multi-user warehouses will have to address these needs and likely focus on high-turnover items. Economies of scale and good optimisation can allow to locate new high-turnover, multi-user warehouses near the cities, to massify last-mile deliveries and reduce their distance.

This new warehousing offer could attract small e-commerce retailers who don’t have their own facility, companies that want extra-fast delivery for a special offer or expect a high demand for promotional and featured items.

Flexe : the AirBnB of warehousing

In less than five years, Flexe has created a marketplace of spare storage space in 550 warehouses, quickly establishing better geographic coverage than the vast delivery network that Amazon.com Inc. spent decades and billions building. Flexe did it without spending a nickel on facilities and already has 25 million square feet of storage, about 25 percent of Amazon’s capacity, and expects to add 10 million square feet this year. Merchants book storage space via a simple-to-navigate website; Flexe is essentially the AirBnB of warehousing.

Flexe approach

Shoppers' accelerating shift online is straining warehouse space around the U.S., pushing the vacancy rate to the lowest level in 17 years. Flexe is tapping into an inventory of unused space that doesn't show up in the vacancy measure. That space is tied up in long-term contracts, but much of it goes unused for months at a time. Beverage companies and home-improvement stores build warehouses with capacity for the summer months when their business peaks, leaving them with extra space the rest of the year. Warehouses operated by Halloween costume wholesalers empty out just as the holiday shopping season hits and most retailers need more space. Flexe is arbitraging the mismatch between supply and demand, taking a commission for each transaction.

Today, the company has 200 partners. Iron Mountain, which provides document storage for financial, legal, healthcare and government clients, signed on with Flexe two years ago to sell extra space in its 1,000 facilities in 90 markets.

Final thoughts

New players like Flexi have succeeded in bringing collaborative economy to warehousing. Flexe has redefined the warehousing industry by finding spare warehouse space for e-commerce merchants, and is now set to offer overnight delivery all over the U.S.

Going forward, new entrants like Flexe will be the market maker in warehousing space. These players will certify new warehouse providers that want to list their services, provide for standard business terms, prescribe an operational system that provides warehouse management capabilities, bill the customers on behalf of the warehouse operators, collect the fees (inclusive of a markup to pay for their services), and monitor transactions to ensure customers are getting quality service.

THE ROAD AHEAD FOR CONNECTED VEHICLES

Imagine a car ( who will be like your friend), well acquainted with your lifestyle; calling out, “your favorite cafe is just 2.3 KM away to grab your morning tea and toast.” Imagine a car, reminding you an extra mile in advance, to fill your tank with precious fuel; so you never run out of it. Imagine reaching your destination on time and already being directed to a free parking spot; to make your regular Monday routine a bit more peaceful.

Well, the good news is connected cars offer you all of the above and much more. The connected vehicle technology marvel brings this synergy through Vehicle-to-Vehicle, Vehicle-to-Infrastructure and Vehicle-to-Smartphone models. This is done by connecting your car to the cloud through internet/4G or an upcoming 5G connection and sending a request to smartly navigate the road through GPS, find your favorite restaurant or just play music you choose. Moreover, it guides you through the best routes, assesses any potential hazard or accident-prone sites along the way and communicates the potential issues in the vehicle using on-board diagnostics, before any of those leave you stranded.

Why are connected vehicles so important?

1. The biggest priority is to save lives. There are hundreds of deaths a day on roads of each  continent. A high percentage of these deaths occur because of human error. When you take the human out of the loop the vehicle and the vast array of sensors, infrastructure and data will prevent many of these deaths from happening.

2. Secondly, congestion costs billions of dollars a day. By removing traffic jams and inefficiencies on the street and highways there will be an economic gain as well as a better quality of life for populations.

3. Thirdly, even if vehicles are still powered using combustion engines, there will be a positive environmental impact through the more efficient use of vehicles and infrastructure. However it is envisioned that more and more vehicles will be electric thus adding substantially to a greener environmental impact.

Facts

Global consulting firm KPMG anticipates that as early as 2030, a new mobility services segment will emerge worth well over $1 trillion dollars for products and services related to autonomy, mobility and connectivity. According to KPMG’s 2017 Global Automotive Executive Study, which polled nearly 1,000 executives with the world’s leading automotive companies, 76% say just one connected vehicle generates more revenue streams than 10 conventional vehicles. At the center of this revolution are emerging deep learning and artificial intelligence (AI) tools; sensor technologies that let trucks, vans or material handling equipment “see”; on-board supercomputers that allow them to become autonomous; near-ubiquitous over-the-air connectivity; and a set of new business models that unlock value from all of that technology. 

Even in advance of autonomous vehicles we are beginning to see the early impacts of these technologies in the e-commerce and delivery sectors. Following the success of Uber (which today can get a car to 67% of the U.S. population within 10 minutes), Amazon launched its Amazon Flex application, which opens up last-mile parcel delivery to everyday vehicle owners as a similar transportation service on-demand. In conjunction with an expanding footprint of regional distribution centers and a growing fleet of Prime Air freighters, Amazon promises to change the game in parcel delivery—lowering delivery costs while simultaneously enabling same-day delivery in major metro markets. Already, Amazon-owned assets selectively service up to 44% of the U.S. population.

India and connected vehicles technology

India is relatively new to the connected cars segment, but the future holds promise because we need connectivity on-the-go. This connectivity is required for the basics, like tracking vehicles and the essentials like providing travelers with customized services.

World over, the focus on autonomous vehicles and the need for alternative fuels is pushing cutting-edge innovation in the automotive industry. Although companies are investing heavily to make these technologies relevant today, there are pertinent issues to address before these modern innovations become part of our daily lives.

 

Autonomous Vehicles as Both a Sustaining and Disruptive Innovation – The Evolution

There’s always been a debate on innovation creating new markets versus evolving in existing markets and improving value. Disruption by its nature takes people by surprise. The Connected Self-driving car will be both sustaining and disruptive. In order, to keep up with the pace of advancements, there’ll be the need for more detailed maps, driver assist features like real-time traffic and road conditions, bridges, local signs, buildings and more.

It’s not that the Connected Vehicles arena became popular in a few months. It has been there for a while and it took all those baby steps which any innovation usually encompasses.

- Stage one was stop and go autopilot allowing cars to drive themselves in traffic jams by analyzing the lane ahead of them and moving appropriately.

- Stage two was the remote valet assistant, the ability to park in a small space through a smartphone or a smartwatch. 

- Stage three was highway autopilot with lane changing, which included blind spot technology to shift lanes.

- Now, Stage 4 is set for exciting features, which is self-driving cars. Next stage may well be totally driverless vehicles not needing even a steering wheel at all.

App Integration

Just like any other disruptive technology, integration with existing eco-system is the key to penetrate the markets seamlessly. App integration is becoming commonplace in today’s vehicles. Google Maps and other navigation tools have begun to replace built-in GPS systems. Apps such as GasBuddy show the driver where he or she can find the cheapest fuel in their area. Music apps such as Spotify remove the need for traditional or even satellite radio. Apple’s “CarPlay” runs through a car’s onboard entertainment system when an iPhone is connected and is working to extend far beyond car software.

How IoT and Data Analytics: Making Smart Cars ‘Smarter’

Keeping any computerized system secure begins with keeping operating systems and software updated. For assets like phones, computing stations like desktops, servers, laptops, etc. are relatively easier, considering they operate within defined geo limits. But for movable assets like a phone or better still moving cars, expecting owners to bring their vehicles into the shop for updates is not the way to keep their vehicle systems updated. Only feasible way to keep connected vehicle platforms and applications updated is to use Over-the-Air, or OTA technology, where updates are downloaded wirelessly. Think of an OTA system; a corollary of a Smartphone. OTA upgrades are similar to how we get Software and firmware upgrades Over-the-Air from Phone Manufacturers like Android L to Android M and beyond.

Another corollary between Connected Vehicle and Mobile phone eco-system is 3rd party applications which can run on such systems. Just like Android Play-Store or Apple App-Store provide a choice of applications which can be downloaded at will, similar platforms are available for Connected Vehicles which allow car companies to release different kinds of applications and software updates in real-time. The updates mechanism is extremely important during a recall as well as to cross-sell the products and services to customers.

Security & Privacy Concerns

In order to avail the benefits of a connected car eco system, the owner may have to agree to share vehicle data with the IT-infrastructure of governments, utility providers and corporations. In return, the consumer or owner accepts services in the form of a free, paid service or contract from governments and the corporate. With so much rush to equip vehicles with all the technology for diagnostics, navigation, driver assistance, autonomous driving, safety features, plus infotainment, there lies the risk of hacking. The risk can vary from controlling access to firmware, impairing communication between back-end servers and vehicles, to all the way controlling cruise control taking full control of the vehicle. Contrary to popular projections like cyber-attacks stopping cars or causing vehicles to change direction, such attacks are not likely because they wouldn’t be profitable. A more likely scenario is to scrape identity, banking or other payment information, medical information, financial information and any other information user would want to keep private.

Aftermarket Analytics May Increase Uptime

Need for connected intelligence in the automotive world is paramount owing to a need for avoiding breakdowns, reduce fake warranty claims, tracking the fleet etc. An advanced analytics platform combined with historic performance information, can produce predictive models. They combine the data extracted from location, sensory data like engine temperature, oil pressure, airflows, brake fluids, hydraulics, tyre pressure, electric systems, event data like vehicle maintenance records, trip history as well as contextual data like navigation information, traffic volumes, predicted weather conditions along the route and garage locations.

Predicting Failures Early Can Boost Profits

Using predictive analytics, automotive players are improving the product before it leaves the factory. Needless to say, such predictive analytics allows enhancements in product quality, improving customer loyalty and satisfaction, ultimately in-turn increasing profitability for auto makers. Imagine this technology in ridesharing, in transportation & logistics, solving the last mile. According to a Gartner report by 2020, 50% of motor vehicle manufacturers will apply advanced analytics to connected-vehicle data to identify and correct product defects.

The growing connectivity and the Internet of Things (IoT) will have positive impact on the growth of the industry. The mobility industry will increase, as people will opt for shorter commutes with multiple modes. With regards to the progress of driverless vehicles in India, it has already started and is likely to come much faster than one would expect. Electrification of public transport is around the corner and will be affordable too, given a faster payback from 10 years of vehicle life and 250km of average running a day.

This is big business, indeed, and the next wave is already witnessing software-driven companies focusing on building connected vehicle platforms and services from India, which is great news. In future, companies also plan to simulate and test autonomous heavy vehicles and those vehicles meant for the farm sector. Of course, it will take quite a while for autonomous driving to become a commonplace reality on our highways, but the journey has already begun.

MAERSK SHATTERS THE WORLD RECORD BY ADDING THE WORLD’S LARGEST BOXSHIP TO ITS FLEET

MAERSK SHATTERS THE WORLD RECORD 

BY ADDING THE WORLD’S LARGEST BOXSHIP TO ITS FLEET

MAERSK MADRID

Maersk Line welcomed its latest box ship Madrid Maersk this week  which turns out to be the largest vessel in the world. MOL was triumphant in announcing the delivery of 20,179 TEU MOL Triumph which measures 400 meters in length and 58.8 meters in beam. It is the first of six 20,000 TEU-class ULCVs MOL ordered from SHI back in February 2015.

20,568 TEU MADRID MAERSK

According to the maritime analyst Alphaliner, the Madrid Maersk has a capacity of 20,568 twenty-foot equivalent units (TEUs), making her the world’s largest ship by TEU carrying capacity. The vessel is the first of Maersk’s 2nd generation Triple-E’s, known officially as the EEE Mark II. Maesrk ordered 11 of the vessels in 2015 for a rumored $1.8 billion.

Delivery of the remaining 10 Triple-E Mark II’s is expected to take place between now and the second quarter of 2018. The Madrid Maersk is reportedly measures 399 meters in length and has a beam of 58 meters.

Maersk Line made headlines in June 2013 when it took delivery of the first Triple-E, the Maersk Mc-Kinney Møller, which was the first Ultra-Large Container Vessel to surpass 18,000 TEUs. The company was delivered a total of 20 of the Triple-E vessels between 2013 and 2015 from DSME.

Difference between Maersk’s first generation 18,340 teu Triple-E and the new second gen EEE

The main change from the original design was moving the bridge two bays forward and the engine room and funnel section one bay aft. Thus, the container intake is increased under deck as well as on deck, due to improved visibility from the bridge.

Another difference from their 18,340 teu Triple-E predecessors is that the new ships sit deeper in the water, by 50 cm, to 16.5 metres, raising the deadweight to 206,000 tons, from the previous 194,500, and enabling an extra tier of containers to be stowed on deck from 11 to 12.

Furthermore the engines are lighter, improving deadweight limitations, having been downsized from eight to seven cylinders.

Meet MOL Triumph : World's Largest Containership @ 20,170 TEU

Meet MOL Triumph : World's Largest Containership @ 20,170 TEU

Mitsui O.S.K. Lines, Ltd. announced in this week that the world's largest containership, MOL Triumph was delivered from Samsung Heavy Industries Co., Ltd. (SHI) on March 27, 2017.

MOL Triumph’s deployment on Asia – Europe tradelane

MOL's newest vessel, the first of a fleet of six 20,000 TEU-class containerships was named MOL Triumph in a ceremony at SHI in South Korea on March 15, 2017. At 400 meters in length and 58.8 meters in width, MOL Triumph is currently the world's largest containership. With a capacity of 20,170 TEU, the vessel is the first 20,000 TEU-class containership deployed in THE Alliance's Asia to Europe trade via the FE2 service.

MOL Triumph will set off on her maiden voyage from Xingang in April 2017 and will sail to Dalian, Qingdao, Shanghai, Ningbo, Hong Kong, Yantian and Singapore. She will then transit through the Suez Canal and continue on to Tangier, Southampton, Hamburg, Rotterdam and Le Havre. She will then call at Tangier and Jebel Ali on the way back to Asia.

MOL Triumph loaded with new sustainable technologies

In line with the eco-sailing initiative of MOL, the new 20,000 TEU-class containerships are equipped with various highly advanced energy-saving technologies including low friction underwater paint, high efficiency propeller and rudder, Savor Stator as a stream fin on the hull body, and an optimized fine hull form which together can further reduce fuel consumption and CO2 emissions per container moved by about 25-30% when compared to 14,000 TEU-class containerships. Additionally, the vessel has also been designed with the retrofit option to convert to LNG fueled ship in view of the implementation of the International Maritime Organization's new regulation to limit SOx emission in marine fuels which will come into effect in 2020.

MOL will take the delivery of the second 20,000 TEU-class vessel in May 2017. Eventually there will be six of the 20,000 TEU-class containerships unveiled and they will be phased in gradually on the existing trade routes of MOL.

Vessel Particulars of MOL Triumph

Length  : 400m

Breadth                : 58.8m

Depth   : 32.8m

Deadweight Tonnage     : 192,672MT

India to start intercontinental container train on Iron Silk Route

India to start intercontinental container train

In January this year, China sent a container train from East China’s Yiwu all the way to London via Germany, covering a distance of 12,000 km and demonstrating that it can be cheaper, even faster mode of freight movement between the Asian giant and countries in Western Europe and all in between. In the recent past, countries across the world have realised the potential of carrying out trade through land routes which existed in ancient eras and much is being done to revive the same!

Taking a leaf from China’s run to Europe, India is going to start an inter-continental train. India will showcase its might in freight movement by running a trans-continental container train full of goods from Dhaka to Istanbul, covering a 6,000-km journey across five countries — Bangladesh, India, Pakistan, Iran and Turkey.

New lifeline in South Asian regional (rail) connectivity
Codenamed the ITI-DKD-Y corridor, the container train’s route is scheduled as Dhaka-Kolkata-Delhi-Islamabad-Tehran-Istanbul.

Yangon will also be connected to Dhaka. The missing Tamu-Kalay link in Myanmar is still to be built.

This project will open up a new chapter in South Asian regional connectivity project. It can provide a new lifeline and much needed impetus for trade in South and South West Asia.

What has changed?

What has changed and also energized the project is that a long missing link of 150 km in Zahedan, in the Baluchestan province of Iran, has now been established, connecting the country to the Pakistan Railway network on the border. So the Trans-Asian Railway Southern Corridor, as it is formally named, under the aegis of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), is good to go all the way to Turkey after certain operational exchange of notes and coordination between the nations concerned, which India is anchoring this month.

“The demonstration run will happen very soon in 2017 and we will sort out all the issues with the countries concerned. It’s a great leap for South Asian regional connectivity in the rail sector. This will also demonstrate to the world that there can be a real, commercial trans-Asian container corridor of this magnitude in the rail sector,” informs Mohammad Jamshed, Railway Board Member (Traffic)

The long route will be cut short: Challenges addressed?

Currently, goods take a long, roundabout route from Ludhiana to Lahore which otherwise are just a few hours apart by rail. The March 15-16 meeting is aimed at discussing some common technical and operational parameters between the railway systems of the countries involved. So far, in communications between the railway systems, all countries have on paper endorsed the project and have said that the demonstration is technically feasible.

There are Political and logistical roadblocks, however. Pakistan, for instance, isn’t keen on containers from India crossing over into its railway network.

The railway networks of India and Bangladesh are connected by one weak bridge over the Padma river, according to the Indian Express, which means only lightweight cargo can be transported. So, in all likelihood, the first bit of cargo on this stretch of the Iron Silk Route will comprise cotton garments.

Past the Dhaka border, there is the inland container depot in India which will service the rail cargo train on its way to Kolkata. From Kolkata to Delhi and then to Attari and Lahore will be smooth sail, as per railway officials.

Free Trade Zone Locations of Today’s Global Supply Chains

Free Trade Zone Locations of Today’s Global Supply Chains

A free trade zone (FTZ) is defined as a “specific class of special economic zone. It is a geographic area where goods may be landed, stored, handled, manufactured, or reconfigured, and re-exported under specific customs regulation and generally not subject to customs duty”. Designed to stimulate economic growth, FTZs are often found throughout the world and around major seaports, international airports, and other locations with strong transportation ties.

Shifts in trade are placing an emphasis on such geographies as India, Singapore, UAE and Africa. Indian government plans to open a special economic zone at its largest port, JNPT. Despite the bright outlook for Africa, risks remain and the need for infrastructure investment is great.

While most of the focus has been on Europe and the US, drivers of global economic trade since World War II, a shift in trade is occurring as domestic spending power expands in such emerging markets as Africa, Dubai, India and Singapore.

India

India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965. With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000.

India has had its ups and downs with using these zones to stimulate economic growth due to government bureaucracy, poor infrastructure and the lack of foreign investment. However, through the years, the government has worked to improve these zones by cutting government red tape as well as investing in infrastructure.

In late 2015, the government announced development plans for a special economic zone at Jawaharlal Nehru Port Trust (JNPT), the country’s largest container handler. JNPT accounts for 60% of the total container cargo moving via India’s twelve major public ports and about 40% of the nation’s overall containerized ocean trade.

Singapore

Often viewed as a gateway into Asia as well as its financial center, Singapore continues to serve in not only these roles but also as a gateway for the AESAN Economic Community. The Community which is a collection of Southeast Asian countries including Malaysia, Indonesia, Thailand and Vietnam, is investing heavily in infrastructure projects to link each country in a seamless manner as well as to meet growing domestic needs of its rising middle classes.

Singapore is generally a free port and an open economy. More than 99% of all imports into Singapore enter the country duty-free. Singapore has three Free Trade Zone (FTZ) authorities, PSA Corporation Ltd, Jurong Port Pte Ltd and the Changi Airport Group (Singapore) Pte Ltd. and nine free trade zones.

UAE

Located along the Persian Gulf within the Middle East, the UAE has benefited from global trade as a transshipment location between Asia and Europe. In addition, as the region lessens its dependence on oil exports, it is encouraging diversification into other industries such as pharmaceuticals and telecommunications.

Among the free trade zones available in the UAE is Jebel Ali, one of the largest such entities in the world. Established in 1985, Jebel Ali is home to about 7000 companies from 150 countries around the world. The port is situated between Jebel Ali Port, Dubai, a global top 10 container port and Al Maktoum International Airport, described as “the world’s largest cargo airport”.

Africa

The “Sleeping Giant” is awakening and as such many infrastructure projects are underway. Despite the many risks – political, economic and natural – the interest in this continent is real as foreign investors such as General Motors, Procter & Gamble and Roche Holding expand operations to the continent. Indeed, Africa is seen not only as an outsourcing location but also one with great promise for its rising middle class. According to the African Development Bank, Africa now has the fastest-growing middle class in the world. Some 313 million people, 34% of Africa’s population, spend USD 2.20 a day, a 100% rise in less than 20 years (Note: The bank’s definition of middle class in Africa is people who spend the equivalent of USD 2 to USD 20 a day).

As interest in Africa grows, so too does the need for free trade zones as a means to attract investors. With financial assistance from China, Djibouti has begun construction of what has been described as Africa’s largest free trade zone. The agreement was signed in early 2016 as an initiative to stretch its “One Belt, One Road” strategy into Africa. The free trade zone will be 48 square kilometers and according to the agreement, the zone is expected to handle $7 billion in trade within two years. In addition, Djibouti will create a unified customs system with China, establish a transit trade center and set up a currency clearing system.

What’s Next?

As the focal point of global trade shifts away from Europe and US in favor of Southeast Asia, India, Middle East and Africa, the need for free trade zones will only grow further to support the growth. In addition, the need for logistics and transportation providers will also grow and with this growth, the need for technology and automation will be great to maintain efficient operations.

Technology Trends Changing Supply Chain in 2017

Technology Trends Changing Supply Chain in 2017

2016 sparked a long-term shift in the way we transport goods. Tech giants have penetrated the commercial freight market. Big-time shippers overhauled distribution networks to capture a share of the growing e-commerce pie and cater to lofty consumer expectations. Technology advancements drove unprecedented innovation by logistics providers and shippers alike.

It’s been a dizzying year for supply chain and logistics managers, and that’s likely to remain the case in 2017. While we may not be ready for autonomous trucks to take over the roads, we are also not as far off as some might think. We know one thing for sure: Technology will continue to innovate the industry worldwide, and all players will be forced to adapt or be left behind.

Here are a few trends every stakeholder in the supply chain should watch closely in 2017:

1. Growth of the Tech-Enabled Logistics Provider

Technology permeates every area of the supply chain. Tracking solutions, sensors and other devices embedded in cargo and vehicles provide a real-time picture of assets (of all types, not simply trucks) in the field. On the backend, transportation management systems (TMSs) are becoming increasingly sophisticated, providing comprehensive transportation management from end to end.

Shippers and carriers will continue to lean on providers in 2017 as the tech leaders. Both parties, along with receivers, will look to smart logistics providers to tie seamless TMSs together with onboard tracking platforms and inventory management. The goal is optimized supply chains connecting in transit based on a real-time inventory snapshot.

2. Constricting Freight Market?

For much of the past year or so, shippers enjoyed favorable rates thanks to relatively highly available capacity. As a result, those who honed in on spot rates may have seen short-term cost savings, while those who focused on strategic carrier relationships traded potentially higher rates for long-term mutual benefits.

Recent reports indicate the pendulum may swing back in favor of the strategic approach, as capacity tightened modestly over the past few months. Several factors will influence whether this is a long-term or seasonal shift. Shippers and their logistics providers should keep a close eye on potential spikes in fuel cost, and pending hours of service and driver wage regulation, which will impact capacity in the coming years. In the case of market constriction, those with locked-in, long-term carrier relationships will reap the benefits—greater access to consistent and reliable capacity, more stable rates, and the ease and efficiency which come with familiarity.

3. Mastering E-Commerce Logistics

Online purchases continue to account for an increasingly large portion of overall retail sales. In fact, the U.S. recently experienced the highest e-commerce penetration in history, according to the U.S. Department of Commerce. This completely reset consumer expectations and, in turn, retailers’ delivery policies. Next-day and even same-day delivery are fast becoming the norm and retailers now have more stringent delivery deadlines (not to mention fees for late deliveries).

The e-commerce pie only continues to grow and retailers will continue to grapple for their share. We’ll likely see retailers establish a continuously broad network of distribution and fulfillment facilities near dense population centers. Enhanced business intelligence and in-vehicle technology will also be key, as retailers and their logistics providers seek ways to trim the e-commerce-related factors that historically drive costs higher, like high fuel consumption and inefficient routing.

Many retailers already established e-commerce delivery networks. Conquering the art of cost containment will be the next step.

4. Digital Freight Matching versus Driverless Trucks

Uber’s acquisition of self-driving trucking platform Otto sent a message to supply chain stakeholders: Silicon Valley has commercial transportation and logistics in the crosshairs. Reaction varied, and many set their sights on the potential for driverless or co-piloted trucks. But it’s another aspect of the deal—Uber’s long-term goal to establish a national digital freight matching (DFM) network—that may be more intriguing in the short term for logistics providers.

The two don’t necessarily fall hand in hand. Though driverless trucks may have more curb appeal, DFM apps could change the way shippers connect with carriers (and how logistics providers do business). In their current form, DFM apps could work for smaller-scale shippers, but not those with a large, regional and national footprint. More importantly, DFM apps will drive the industry at large (including third-party logistics or 3PLs) to innovate and develop more advanced TMSs, as well as challenge providers to diversify services.

5. Advent of Omnipresent Web Services leading to Better information sharing in freight.

The supply chain industry is dangerously reliant on antiquated platforms to transmit data. Compared to other industries, the freight industry truly is stuck in the stone ages when it comes to sharing information between technology platforms. This isn’t necessarily a hit on supply chain technology in general, a lot of companies are building brilliant capabilities to analyze data, optimize transportation decisions and do things of the like, but when it comes to sharing that information from one system to another we are woefully dependent on technologies like EDI, email, phones and fax.

This will literally change our capabilities overnight. There’s such a tremendous amount of waste in the supply chain industry because of unreliable or slow-moving data transmission that we just don’t need to deal with anymore. This is going to change the way that companies charge for their services, how they perform advanced demand analysis, reduce the number of electronic “touches” on each shipment and so much more.

We will finally catch up to where so many other industries are today and reduce millions of dollars of waste in the process.

6. Globally Connected Supply Chains will create a Flat World

The proliferation of technology will continue to disrupt the global supply chain in 2017. It will change the way that importers/exporters are able to manage their connections with transportation vendors of all different shapes and sizes to be able to service customers anywhere in the globe. It will reduce our dependency on having innumerable intermediaries throughout the world to handle our shipping and – as a result – decrease the cost of logistics that companies have to spend to get their products in front of new markets.

The challenges in the global supply chain market are many, but the rise of these types of technology platforms will allow us to overcome them and build better and stronger supply chains.

It changes everything. This technology and its impacts will create the ‘Flat World’ and foster a global marketplace unlike anything we have ever seen.

Technology advances will continue to drive seismic shifts in the logistics industry in 2017 and we’ve only scratched the surface for what that could look like. Each stakeholder within the supply chain will address these areas in different ways, but ultimately, with the same goals: To provide higher quality customer service and more efficient, secure transportation.