CONTAINERS ARE THE NEW GOLD

“It seems like containers are the new gold these days,” says Nerijus Poskus, global head of ocean freight at Flexport. "Container availability in Asia is extremely limited right now,” added Flexport Head of North American Ocean Freight Jan Hinz during a company webinar on Tuesday. “It’s causing a lot of hardship for our customers and the shipping industry as a whole.

“We are currently seeing a ‘black swan’ and are experiencing the strongest increase in 40-foot [container] demand following one of the strongest decreases in demand ever,”  “Almost three out of four containers in our 40-foot fleet are currently deployed … and therefore not available,” says Nico Hecker, director of global container logistics at Hapag-Lloyd.

The trans-Pacific eastbound market is in the thick of a record-setting bull run. The California port system is buckling, with delays tying up even more containers and making the equipment shortfall even worse. Imports appear set to remain at peak levels at least through this month, and probably into Q1 2021, due to holiday cargoes and inventory restocking.

But shippers can’t get all their cargo to the U.S. if liners don’t have not enough empty boxes in China.

What’s driving the container crunch?

“It’s not really a shortage. It’s more that the containers are out of position,” Ocean Audit founder Steve Ferreira told FreightWaves.  “Because of strong growth in places like Africa and South America — the more minor trades — the containers are out of position.

“They have to go on another leg, to a neutral place like the U.S., where they are gathered up and sent back over to Asia.”

Lars Jensen, CEO of SeaIntelligence Consulting, told FreightWaves, “It’s a confluence of two events. One clearly being the sharp uptick in demand growth. The other is the time-delayed effect of the many blank [canceled] sailings a few months ago. The blank sailings led to severe disruption in the normal repatriation flow of empty containers. The impact of that is being felt at the same time as demand has heated up.”

According to Peter Friedmann, executive director of the Agriculture Transportation Coalition, “Ocean carriers offer the major importers into the U.S. virtually unlimited free time. While U.S. exporters typically get three to five days of free time, the so-called ‘champion’ accounts — the big-box importers — are keeping their containers, without detention penalty, for weeks on end.

“Many of the containers are not open and emptied. They’re being used for storage,” said Friedmann. He maintained that this practice is a “significant contributor” to the today’s box-capacity squeeze.

Finding more containers

A Maersk spokesman told FreightWaves, “We have leased all the equipment we could find in the market during July-October. But the leasing market has now dried up. There are no more containers available in the market.”

Meanwhile, box manufacturers are maxed out for at least the next four and a half months. Normally, it might take six to eight weeks from contract to delivery. Not so today. Factories are sold out through Q1 2021 and even into Q2 2020.

On the latest conference call of box-equipment lessor CAI International (NYSE: CAI), CEO Tim Page said “the factories aren’t really quoting [price offers]. All of the factories are not quoting for much of the second-quarter deliveries. It’s hard to order when you can’t get a quote.”

Regarding previously ordered new boxes, Page said, “customers today are basically waiting for the paint to dry to pick them up.”

Competition between trade lanes

For cargo shippers, it doesn’t matter whether there are not enough boxes because they haven’t been built yet or because they’re in South American when they need to be in China.

For carriers, container availability is a zero-sum game. It can make sense for them to deploy more scarce resources in trade lanes where they reap the highest returns.

One example of switching scarce container capacity among trade lanes involves Hapag-Lloyd.  U.S. agricultural groups have criticized the carrier since last month for opting to transport boxes empty from the America to Asia instead of loading export goods. Critics allege the carrier is doing so because it can make more money if it gets the empties to China quicker and restuffs them with high-paying exports to the U.S.

A Hapag-Lloyd spokesperson told FreightWaves on Wednesday, “We continue to serve the agricultural exporters in the U.S. Due to some significant supply chain bottlenecks … we have temporarily reduced our export volume. 

“This is primarily impacting business that consumes excessive container days at origin and destination, but is not limited to agricultural products. We are taking measures to overcome these constraints but expect that the challenges will persist for some months.”

Changing equation for carriers

This week, Alphaliner highlighted the huge shifts in carrier income — measured in cents per nautical mile per forty-foot equivalent unit (NM-FEU)  — among the top trade lanes over the past two months.

As of Sept. 4, carriers earned 64 cents per NM-FEU on the Shanghai-Los Angeles, making it the biggest money-earner among the largest trades at that time. As of last Friday, carriers earned 66.5 cents per NM-FEU, up 3% since Sept. 4.

In contrast, Shanghai-Melbourne, Australia, jumped to 86.5 cents per NM-FEU as of last Friday, up 79%, putting it in the top spot. In second place, Shanghai-Santos, Brazil, rose to 75 cents per NM-FEU (+83% versus Sept. 4) and Shanghai-Lagos, Nigeria, was at 70 cents (+21%). Shanghai-Los Angeles is now in fourth place.

According to Hinz of Flexport, “It’s a global competition for equipment. Like a global bidding war for equipment. The U.S. had been the best-paying trade a couple of months ago. And now it’s more or less in the middle. That will drive decisions on where to allocate equipment.”

Limitations on carriers

There are several caveats, however. First, if a carrier opts to earn more by taking advantage of Shanghai-Santos rates and switches that container from Shanghai-Los Angeles, it’s harder to get that container back to Shanghai from Santos than from Los Angeles.

“Even if you have higher profit per nautical mile, the question is how quickly you can get the empty box back to Asia again. This would favor a trade with a fast round trip over a longer trade,” explained Jensen.

In addition, contract-customer requirements constrain carrier-equipment allocations. It’s not necessarily a higher rate per NM-FEU that moves containers between lanes. As Ferreira put it, “If Goodyear imports tires from Thailand to the U.S., they’re also sending tires from Thailand to Melbourne and Santos.”

As for carriers pulling container equipment from Asia-U.S. and shifting it to more lucrative trades, Ferreira responded, “I think they have to [keep them in Asia-U.S.] for commercial purposes, even if they’d love the boxes in another locale.”

What are the solutions?

If there are not enough 40-foot high-cube containers to service U.S. imports, there are other options. According to Hapag-Lloyd, “40-foot reefer containers that have been switched off — so-called non-operating reefers — are [being] filled with dry goods like textiles, shoes and electronics.” The carrier predicted that “20-foot and 45-foot containers will likely be the next types offered as substitutes for 40-foot containers.”

“From an availability perspective, it’s all about [40-foot] high cubes,” said Hinz. “So, we are asking our clients to be flexible. If there are no high cubes, use the [standard] 40-foot container. Or a 20-foot container. Look at non-operating reefers. Or even increase frequency and start to ship LCL [less than container load] to keep going and not build up a backlog.”

Looking forward, Hinz advised, “As we head into the RFQ [request for quotation] season next year, expect to see a major role in contract negotiations around equipment guarantees, pressure on free time and high interest among ocean carriers in trade lanes with high equipment turnaround times. That’s something to watch out for.”  

Container shortage in India  

Shippers and forwarders have been struggling with a serious lack of containers in recent months, but a Maersk spokesman told The Loadstar the shortage “in certain parts of the country” had improved over the last few weeks.

“We have taken a number of measures to overcome the challenge; tripling the repositioning of empty containers from the Middle East,” he explained. “Within the country, too, we are repositioning empty containers where there is higher demand.”

As well as the growing trade imbalance, another factor exacerbating India’s lack of equipment has been the slow turnaround time for imports. For example, local business groups have complained that a new digital customs clearance system – designed to make importing more efficient – was in fact making the process take longer.

But Maersk’s spokesman said India’s lockdown was to blame for the import slowdown, bringing a lack of manpower. “As the lockdowns started easing, clearance has been gradually improving. We are working with our import customers and relevant authorities to fast-track clearance of import containers,” he added.

The capacity crunch ex-India has prompted CMA CGM to announce a $200 “emergency space surcharge” on cargo heading for ports in Europe, Africa and Latin America, prompting a backlash from shipper groups.

Mark Fernandes, director of the IMC Chamber of Commerce and Industry, said shippers were feeling the brunt of mounting freight costs.

“Freight rates have jumped on all routes in the range of 20% to 100%, depending on the sector. Exporters are operating on losses at times, as their customers are not ready to absorb the hikes.”

Logistic control tower explained

Logistic control tower explained

Insights in the industry of transport and logistic services by our experts.

According to the trade press and 3PL presentations, ‘control towers’ are springing up like daisies all over Europe. Anyone who is anyone in the supply chain arena has at least one, if not more. The control tower concept is one that is easy to visualize, as a hive of activity staffed by multi-lingual traffic controllers. One could imagine that the central point of the control tower hosts a vast screen depicting an integral overview of all freight flows and clearly pinpointing any problem areas. Is that really what a control tower is about? Are you missing out by being stuck with your ‘old-fashioned’ freight management desk? This article will bring the control tower back down to ground level, explain its functionalities and try to identify situations in which the concept really adds value.

1. What is a logistic control tower?

To clarify what a control tower is, we will start with a brief summary of what it is not:

It is not actually a tower

It is not in direct communication with truck drivers, captains or pilots

It does not control the production, storage, replenishment and order process

It is not a synonym for a 4PL

The essence of the control tower concept is to provide supply chain visibility across divisions, countries and modalities. The heart of the control tower is an information hub supported by a set of detailed decision-making rules and a trained team of operators. The big advantage of this central information hub is that it gathers and integrates data from a variety of sources and subsequently distributes it in a consistent format. This integrated overview allows the control tower operator to detect risks or opportunities at an earlier stage.

The actual scope of a control tower differs from one company to another, ranging from the orchestration of raw material supplies to a factory to an end-to-end control center. Management of spare parts and returns is always done separately (figure 1).

2. What is the difference between a control tower and ‘good old’ freight or distribution management?

Contrary to the traditional way of managing freight and distribution flows from either origin or destination, the control tower is not physically or hierarchically linked to one specific location.

Furthermore, a control tower is usually focused on ‘event management’. Status information from suppliers and logistic service providers is collected and stored in a structured way; it is used to provide the control tower team with insight into the actual status of orders, products in stock and shipments. This information is used to make informed decisions when planning, monitoring and analyzing the supply chain.

In comparison, freight management only focuses on the transport or distribution part. Freight management activities typically include freight forwarding activities, tracking and tracing as well as pick-up and delivery scheduling.

Control tower

Figure 1: Typical activities of control towers and relationship with freight management

3. Who needs a control tower?

Control towers are used to improve visibility in ‘complex’ supply chains. Your supply chain qualifies as complex when:

the scope is global or inter/intra-continental;

the dependency is high;

many supply chain activities are outsourced;

and your customers’ service requirements are increasingly challenging.

Complex supply chains have fast and fact-based information requirements. Questions about the status of an order, the logistic costs of a product, the performance of a supply chain partner or a root cause analysis need a quick, integral response. A control tower concept with the right data -centralization solution has proven to be effective in providing answers to such questions.

Some of our case studies show that even highly fragmented supply chains can also benefit significantly from a control tower function. Nevertheless, companies that are heavily structured around local organizations may expect some resistance when suggesting a control tower solution. As with most centralization efforts, local organizations will object to losing direct contact in their local language and to having reduced influence in ad-hoc problem-solving. If your local organizations currently have a large degree of independence, a balanced scope and implementation phased over a longer period of time will ensure sufficient local control combined with the benefits of a centralized approach.

4. Can I set up a control tower internally or should I outsource it?

To set up and run a control tower, you need specific capabilities in the areas of:

Planning: typically people with a background in supply chain

Event management: typically people with a background in transport operations

Business intelligence: typically people with a background in operational improvement

Management of supply chain partners: typically people with a background in 3PLs

IT management: handling IT tools to exchange data with supply chain partners (suppliers, manufacturers, 3PLs and carriers) as well as internal system management to store the data in a structured way and provide information to support the control tower functions.

A shipper’s decision on whether or not to outsource a control tower depends first of all on whether it is feasible to develop the abovementioned operational and IT capabilities in-house. Secondly, the business case behind the investment required for an in-house solution compared against the indirect costs associated with outsourcing will have a big impact on this decision. Volatility of the workload and a certain critical mass will further influence the benefits of an in-house versus outsourcing strategy.

The trade-off between the increased control and in-house expertise when insourcing a control tower needs to be critically balanced with the increased flexibility offered by outsourcing. Depending on the scope and volume of typical control towers, a small to medium-sized team of FTEs is needed to cover the skills listed above. Holiday seasons, peak seasons or staff illness can pose a serious risk to business continuity. Insourcing, at least in the early stages, tends to favour process quality whereas outsourcing provides a solution with greater long-term flexibility with regard to resources and systems.

5. What are the typical benefits of a control tower?

As the term suggests, a control tower helps to keep situations under control. Ultimately it should enable action to be taken to prevent potential problems up ahead. Without a central team and an integral overview, a lot of time is spent on local fire fighting. A control tower can identify patterns in local issues and develop structural countermeasures based on processes that fit the big picture.

This should all sound like music to the ears of any supply chain manager, but it is nevertheless essential to assess the expected benefits carefully. Firstly, it is key to align expectations and take a reality check, not only internally but also externally towards the providers. Secondly, the benefits should form the basis of the set-up in terms of processes, systems and resources.

Most benefits of a control tower come from increased supply chain visibility. It enables better planning, decisionmaking, proactive event management, improvement of the performance of supply chain partners, and more sophisticated supply chain analytics. In the end, this will result in:

Savings on logistics costs

Reduction of inventory

Improvement of service levels such as total cycle time and on-time delivery

Ca

CONCOR STAKE SALE MAY BE PUSHED TO FY22

CONCOR STAKE SALE MAY BE PUSHED TO FY22

The strategic divestment of state-owned Container Corp of India Ltd may be pushed to the next financial year starting April because of delay in finalising a policy on fee for using Railways’ land, a senior finance ministry official said.

Though the disinvestment department is ready with the expression of interest for Container Corp, it is waiting for the railway ministry to finalise the land licensing fee policy, the official told Cogencis.

The land licence fee policy will need the approval of the Cabinet, which may delay the divestment process, the official said.

“Typically, we avoid coming out with new transactions from mid-December to mid-January as new investment decisions are considered by global investors only after February,” the official said.

Following the news, the company’s share fell nearly 2% on the National Stock Exchange. At 1319 IST, the shares were down 1% at 401.10 rupees.

The railway ministry had demanded 12.8 bln rupees from Container Corp as annual land licence fee for 2020-21 (Apr-Mar) for 13 terminals as against 4.7 bln rupees projected by the company.

Unless the wide gap on the land licence fee is addressed by a clearly defined policy, it will be difficult for investors to gauge the value of the company, Nomura Financial Advisory and Securities India said.

In November last year, the Cabinet Committee on Economic Affairs had given in-principle approval for strategic divestment of Container Corp and Shipping Corp of India Ltd.

The government plans to sell 30.80% of its 54.80% stake in Container Corp.

At the current market price, the government can raise about 75 bln rupees by selling part of its stake in Container Corp.

The government has set an ambitious target to raise 2.1 trln rupees through divestment in 2020-21, more than four times of what it raised last financial year.

However, the pandemic has delayed several big-ticket disinvestment proposals, including strategic stake sale of Bharat Petroleum Corp Ltd and initial public offering of Life Insurance Corp of India.

The government has so far raised only 61 bln rupees through divestment this year. End

Source: Cogencis

How Indian airlines, airports are preparing for distribution of the Covid vaccine

How Indian airlines, airports are preparing for distribution of the Covid vaccine

As some of the coronavirus vaccine trials across the world are in their final stages, Indian airports and airlines have geared up to to handle the distribution of temperature-sensitive vaccines in the country.

Delhi's Indira Gandhi International Airport and GMR Hyderabad airport's cargo are set to play a pivotal role in the distribution of COVID-19 vaccines as they are equipped with the state-of-the-art time and temperature-sensitive distribution system.

"Delhi Airport has two cargo terminals with world-class infrastructure that provides Good Distribution Practices - certified temperature - controlled facility for handling temperature-sensitive cargo. With the capacity to handle over 1.5 lakh MT per annum, this facility has state-of-the-art temperature-controlled zones with separate cool chambers ranging from 25 to -20 degree Celsius, which would be extremely conducive for the distribution of COVID-19 vaccines," a Delhi International Airport Limited spokesperson said.

"There are Cool Dollies at the airside that ensure unbroken cool chain during temperature-sensitive cargo movement between terminal and aircraft. The terminals have separate gates dedicated for fast movement of vehicles carrying vaccines in and out of the airport," he added.

The emphasis has been laid on quick and efficient transportation and delivery of COVID-19 vaccines whenever they are available.

GMR Hyderabad airport said the terminal is equipped with various temperatures ranging from -20 to 25 degree Celsius with state-of-the-art equipment and cool containers to cater to product-specific requirements.

"GMR Hyderabad Air Cargo (GHAC) boasts of India's first Pharma Zone with GDP-certified temperature-controlled facility for handling temperature-sensitive cargo... The Freighter Parking stands are just 50 metres away from the terminal thereby minimizing the ramp exposure timing and ensuring quick turn-around of the aircraft.

"We have recently launched the latest Cool Dollies -- which is a Mobile Refrigeration Unit for Airside Transportation designed to eliminate any temperature excursions and to maintain the Unbroken Cool Chain. The GHAC also boasts of one of India's largest storage facility for Cool Containers like Envirotainer, C-Safe, Unicooler, and Vaqtainer within our premises to make sure the service is available for customer 24x7," Hyderabad Airport said.

An official of SpiceJet said the airline is fully prepared and ready to handle the COVID-19 vaccine. The airline spokesperson said the airline has extensive experience in the past and already carries blood samples, which require a temperature-controlled environment.

"Today we have the facility of both our aircraft and our ground support vehicles. We have sufficient capacity to cater to the rise in demand for the COVID-19 vaccine shipments and have prepared the capacity keeping in mind the future. We have been transporting vaccine shipments to various international as well as domestic destinations," SpiceJet spokesperson told ANI.

"The transportation of these consignments requires cold chain facilities. SpiceXpress offers cargo shipment with a controlled ambient temperature between 25 degrees C to freezing -40 degrees Celsius. The service is suitable for sensitive drugs, vaccines and blood samples and with the extra protection of thermal blankets in the world-class active RKN and RAP containers." SpiceJet spokesperson said.

Medical experts have said the upcoming coronavirus vaccine will require specific cold storage and controlled temperatures.

The Robot Ships are coming

Sometime in April 2020, a 50-foot-long autonomous ship will shake loose the digital bonds of its human controllers, scan the horizon with radar, and set a course westward across the Atlantic. The Mayflower Autonomous Ship will get orders from an “AI captain” built by programmers at IBM.

The Mayflower’s computing system processes data from 30 onboard sensors and six cameras to help the ship sail across the ocean, obey shipping rules (like how to pass other ships at sea), and control electrical and mechanical systems like the engine and rudder. There won’t be anyone on board if something goes wrong, although it does have to send a daily report to a human operator back in the UK. Today, the Mayflower is a remote-controlled craft chugging around Plymouth Harbor. Transforming it into a fully autonomous sailing vessel by next April will be a big deal for Andy Stanford-Clark, IBM’s UK and Ireland chief technology officer. Stanford-Clark and colleagues have been building the AI captain for the past few years, training it with more than a million images of ships, buoys, and natural features such as cliffs and icebergs. The algorithms that allow it to make navigation decisions may include some wildcards as well, Stanford-Clark says.

The Mayflower Autonomous Ship and its silicon-based captain will sample the ocean for plankton and microplastics. That’s part of its scientific mission for the project’s sponsor, US-based nonprofit research organization ProMare, which is leading the $1.5 million project along with IBM and UK maritime tech startup Marine AI. Clark is crafting a set of commands to allow the software that runs each experiment to ask the AI captain to divert the ship to accommodate something the experiment wants to measure.

The Mayflower 

The Mayflower is undergoing sea trials this month to integrate the AI captain with the rest of the ship, a trimaran made of lightweight aluminum and composite materials that resembles a trident-shaped dagger slicing through the water. The central hull contains the ship’s AI brain (several Nvidia Jetson AG devices that operate locally and don’t require large-bandwidth satellite connections to process data and make decisions), a cargo bay with room for 1,500 pounds of scientific gear, and deck-mounted solar panels that charge lithium-ion phosphate batteries to run the engines and other electrical systems. It has a backup diesel engine in case the sun doesn’t shine. If all goes well, the Mayflower will make test runs to Dublin, Ireland, and Rotterdam, the Netherlands, in early 2021 before its trans-Atlantic voyage in April 2021.

Although the ship won’t carry passengers or cargo, the artificial intelligence and advanced autonomy that it is testing is now slowly making its way into commercial ships. From the Baltic Sea to Singapore, shipping companies are plugging in new AI-based navigation systems to take humans off the bridge, or at least make life easier if they stay on board. Like airplanes, nearly all big ships have an autopilot that navigates from point to point when there's not much going on. But the new programs would allow ships to sail autonomously or with little control through crowded shipping lanes or at ports, as well as reacting to hazards at sea.

AI-driven tugboats and tenders are parking cargo ships, ferries that dock by themselves are moving cars and people across waterways, and soon small cargo ships will be hauling fertilizer and groceries around Scandinavian fjords with little or no crew. This maritime transformation is being led by advancements in AI and sensor technologies, as well as a general rethinking of how to move goods across the globe with fewer people to both save money and avoid the pandemic. Some ships are being retrofitted, some are being built from scratch, but it’s likely that smaller ones will be first to sea with AI at the helm.

These new seaborne systems are facing the same hurdles as autonomous vehicles—liability fears, uncertain regulations, and concerns about cybersecurity. At the same time, companies developing AI-based ships and navigation systems are seeing growing demand for their technology. Shippers want to avoid their cargo getting stranded at sea or in port because sailors have contracted the coronavirus. One marine executive said harbor pilots, the locally based navigators who steer big ships the final miles, are reluctant to board because of coronavirus risks. That is slowing down what used to be a routine procedure when massive ships enter crowded ports or treacherous river mouths.

For these commercial shippers, the near future is not a self-driving Uber, but more like a driver-assisted Tesla. They don’t expect AI to replace captains of larger ships, but to augment them.

“In the open sea, there are situations where the person is quite bored,” says Hendrik Busshoff, product manager for autonomy at Wärtsilä Voyage, a Helsinki-based maritime technology firm that is providing high-resolution radar equipment to the Mayflower project as well as several other autonomous ships.

“We may not remove the person from the ship, but we will remove them from the bridge and have them do more high-value work and call the person in when they are needed,” Busshoff says.

That kind of high-level planning by an AI-captain is being deployed today in Norway, where Kongsberg Maritime has built a 260-foot-long autonomous, zero-emissions ship called the Yara Birkeland.

When Kongsberg first began discussions with Norway-based global fertilizer giant Yara back in 2017, the plan was to build a completely unmanned vessel that could load, sail, and unload its cargo in between three Norwegian ports with no human intervention. But that changed after Kongsberg officials realized that they would have to convince Norwegian and international regulators to draft an entirely new set of rules to allow bigger ships like the Yara Birkeland to operate without a human captain on board.

“In 2017, there was no question that [our ships] were going to be unmanned,” says An-Magritt Tinlund Ryste, Kongsberg’s autonomy project manager. “But you also realize there are no rules and regulations, they are all based on having a human on board. You either need permission or you have to change the rule set.”

So Kongsberg shifted gears. After the hull of the Yara Birkeland was built in a Romanian shipyard and launched in February 2020, Kongsberg decided to add several crew members on the fertilizer transport vessel while keeping the autonomous systems. The humans would act as an insurance policy if something went wrong. The Yara Birkeland’s sea route would have replaced the 40,000 trips a year the company’s trucks make hauling fertilizer around the fjords by land, reducing both diesel pollution and making those rural roads safer. But the pandemic has delayed the ambitious project, according to an October 20 earnings call by Yara International CEO Svein Tore Holsether.   

Yara Birkeland 

While the Yara Birkeland is on hold, Kongsberg is moving ahead with two additional autonomous ships to deliver 16 electric grocery supply trucks each from a warehouse on one side of Oslo’s main fjord to a distribution site on the other. Kongsberg signed a contract with grocer ASKO on September 1, and the ships are expected to be delivered in 2022. The two vessels will initially operate with a reduced crew before moving toward unmanned voyages. Norwegian maritime officials have given the thumbs up and will be overseeing the project.

Kongsberg’s Ryste says that after satisfying regulators, the biggest challenge in building autonomous ships is planning for something going wrong with the weather, the ship, or communication systems. “How do you meet your minimum-risk conditions? How does the vessel operate if you lose all connectivity to shore and how do you build that into the architecture?” Ryste says. “How do you make the right decisions? You need to be mindful of a dynamic picture around you.\

The consequences are enormous if the autonomous systems fail on a big cargo ship like the Yara Birkland or the ASKO freight ferries and they collide with a smaller vessel or the dock. Which is why some marine autonomous companies are starting small.

Boston-based Sea Machines has put its autonomous control systems on more than 50 vessels, including tug-pushed oil barges along the East and Gulf coasts, small workboats, and oil-drilling support and supply boats, according to founder and CEO Michael Johnson. These control systems automate many functions and identify hazards more quickly for the human captain on the bridge. None are running by themselves yet.

At the same time, the firm is testing a new, 29-foot-long workboat for the US Coast Guard that can be operated by remote control from shore or switched to a fully autonomous mode. Johnson says the pandemic-related shutdown is good for his business. He’s getting calls from shippers wanting to move cargo without worrying about the latest lockdowns.

“You have large shipping companies that can’t change out their crews and hundreds of thousands of sailors that were trapped in March on their vessels because they couldn’t get flights out or because of the overall risk of bringing a new crew on board,” Johnson says. “Executives at these companies are looking to de-risk this.”

As the rise of the machines at sea continues, regulators are taking notice. The International Maritime Organization, a UN-agency that regulates international shipping, is in the middle of a “scoping exercise” to come up with new rules for autonomous ships sailing across the sea. It has identified four levels of autonomy for ships: The first is a ship with automated processes and decision support, with a human crew ready to take control; the second is a remote-controlled ship with a human crew; degree three is a remote-controlled ship without a crew; and level four is a fully autonomous ship that is able to make decisions and determine actions by itself.

Mahindra exports Bolero pickups to Bangladesh on Indian Railways

The Indian automotive industry has been intensifying its ties with the Indian Railways and making quick progress in adopting more sustainable and faster modes of transporting newly-built vehicles.

After Kia Motors India's recent news of having shipped 5,000 SUVs on the 50th railway rake that left Penukonda junction in Andhra Pradesh on October 13, homegrown automaker Mahindra & Mahindra (M&M) is now seen leveraging the expansive network of the Indian Railways that goes beyond borders.

The company loaded 87 Mahindra Bolero pick-up vans in Navi Mumbai in Maharashtra, outbound to Benapole in Bangladesh – a 2,100km journey. This is the first time the operation has been conducted. 

Union Minister for Railways, Commerce and Industry, Piyush Goyal, in a tweet on October 25, said, "Boosting automobile exports: Railways loaded 87 Mahindra Bolero pick-up vans from Navi Mumbai in Maharashtra to Benapole in Bangladesh. Offering safe, swift and economical logistics solutions, Railways has emerged as a preferred mode for automobile transportation."

Indian Railways bullish on automobile freight traffic

The Railways Minister had recently met representatives from the Society of Indian Automobile Manufacturers (SIAM) as well as professionals from OEMs such as Maruti Suzuki India, Tata Motors, M&M, Honda Cars India and Ford India to announce several measures to make the railroad beneficial for the auto industry. He gave an assurance and committed to meet the industry's demands, including opening more loading terminals across the country as well as facilitating exports to Bangladesh and Nepal – two of the neighbouring markets for vehicle manufacturers in India.

With its efforts and expansion plans, the Railways is targeting a 20 percent share of automotive logistics by FY2021-22 and has a roadmap to grow it further to 30 percent by FY2023-24.

Demand for Mahindra Bolero picking up

The hardy Bolero, which is M&M's flagship pickup brand, has been soldiering along for over two decades now. In August 2019, the company crossed the milestone of producing 1,500,000 units of the rugged pickup which is available in four-wheel-drive pickup, CBC pickup, CNG as well as customised forms.

The Bolero pickup is used for diverse applications including the delivery of agricultural products, dairy products, consumer goods, construction equipment, logistics, fisheries, cash vans and some vans are also deployed in Swachh Bharat initiatives. With a 58 percent market share in FY2019, it continues to enjoy a leadership position in the pickup segment in India.

Congestion at Colombo Port becomes a boon for Cochin Port : Transshipment business gets boosted at Cochin Port Trust

Congestion at Colombo Port becomes a boon for Cochin Port : Transshipment business gets boosted at Cochin Port Trust

The congestion at Colombo Port has turned out to be an excellent opportunity for Kochi at least in terms of gaining transshipment business following the diversion of some ships.

Of late, the International Container Transshipment Terminal (ICTT) at Vallarpadam has started receiving additional mainline ships on ad hoc basis with transshipment volumes following the diversion of MSC (Mediterranean Shipping Company)  to Kochi. The rising number of Covid cases among port workers in Colombo, has aggravated the existing congestion in that port.

Besides Kochi, Kamrajar Port near Chennai has also received one mainline vessel from Colombo with transshipment cargo, highly placed sources in the shipping fraternity said.

Advantage Kochi

The pandemic condition has not yet eased and this coupled with an earlier strike by workers at Colombo has worsened the situation, resulting in the delay in turnaround of many mainline vessels prompting them to look at alternatives, the sources said.

Cochin Port Trust received first vessel MSC Stella on November 7, followed by MSC Qindao (November 9) and Anton Schulte (November 11) and ER Yukohama (November 14) Calls for two more vessels during this month have been finalised. Discussion are on for bringing more vessels.

Kochi has so far handled about 2,856 teus (Twenty-foot equivalent units) of foreign transshipment containers. The anchoring of these vessels has translated into a revenue earning of ₹2 crore by way of vessel related charges apart from 33.3 per cent of revenue sharing from DP World, the terminal operator, the sources said.

Volumes are UP

According to Praveen Joseph, CEO, DP World Kochi, the terminal has been seeing a steady increase in its transshipment volumes due to diversion of vessel calls from Colombo. These transshipment cargoes from MSC’s trans-continental services are to destinations such as Beira (Mozambique), Mersin (Turkey). “We are equipped to deal effectively with the customers’ needs and are constantly striving to create the competitive advantages to attract both gateway and transshipment volumes to Kochi”, he said adding that the terminal has clocked a 16 per cent rise in transshipment volumes in the first 10 months of 2020.

The handling of these mainline vessels will definitely boost Kochi’s image in wooing transshipment cargoes especially at a time when the port is positioning itself as a transshipment hub of India to reduce the dependency on foreign ports for transshipment of Indian cargo.

During the difficult and challenging periods of Covid-19, box traffic was down by five per cent. However, the difficult period is over and traffic started picking up after the easing of lockdown, reporting an all-time high monthly traffic of 62,472 teus in September, port officials said.

Truck OEMs are excited about Trucking-as-a-Service

Truck OEMs are excited about Trucking-as-a-Service

Technology is transforming the logistics companies we’re so used to working with.

Autonomous trucking, artificial intelligence (AI), and the internet of things (IoT) are really making a big dent in the way the industry works, but they’re also fuelling other changes in the industry, all aligned with the ultimate goal of moving to a Trucking-as-a-Service (TaaS) or Transportation-as-a-Service (TaaS) model.

In its simplest form, TaaS is about supply chain operators gaining access to trucks on-demand, be it an autonomous truck or one that is driven by a human. In either case, however, the truck will need significant telematics and support to ensure tracking, mapping, management, and optimization of routes.

In fact, according to Frost & Sullivan, the surge in service and solution based revenue streams following the rise in digital transformation, autonomous trucking, urban trucking, platformization, and dealership evolution is expected to propel the US$11.2 billion TaaS market toward US$79.42 billion in 2025.

Further, according to the team, digital freight brokerage is expected to be the biggest market segment with revenue potential of US$54.2 billion, while the telematics devices segment is anticipated to grow from 25.7 million units in 2018 to more than 73.1 million in 2025.

What’s most interesting to note, however, is that the rise of TaaS will make life much easier for small businesses looking for new, innovative, and cost-effective ways to transport their goods, within the city and outside the country.

With the e-commerce boom in the APAC coming quickly, TaaS will be a game changer for small and mid-sized businesses looking to reduce costs and provide more timely and better delivery experiences to customers.

 

Truck OEMs keen on helping TaaS take-off

Truth be told, truck original equipment manufacturers (OEMs) such as the Traton Group (formerly Volkswagen Truck & BUs), Daimler Trucks, and Volvo Trucks are driving the industry’s move to TaaS as a result of their investments in connected, autonomous, digital, and smart services,

Volvo, for example, recently introduced Volvo Connect, a new customer portal that offers a single interface for digital services and functions, Volvo Trucks makes it even easier for customers to access the full benefits of digitalization and connectivity.

“Volvo Connect will also contain a marketplace where additional services can be subscribed to and activated. Users can adapt the interface so that the information and services most important to them are quickly and easily accessible,” explained Volvo Connect Product Manager Carina Holm.

 

Traton and Daimler are making similar efforts and also trialing subscription services in certain localities and regions.

 

In the future, Frost & Sullivan believes Truck OEMs will generate new sources of income as a result of the digital services they offer.

 

“OEMs will be looking to deliver new services, such as automated freight aggregation, as a value-addition to their fleet customers,” said Frost & Sullivan Mobility Analyst Silpa Paul.

 

 

Here are five new revenue opportunities that TaaS will create for OEMs (and dealers):

# 1 | Collaborate with startups

Investing in start-ups involved in digital technologies. This will help OEMs cope with a highly integrated ecosystem of real-time diagnostics, online booking of services and repairs, remote repairs, assisted repairs, remote diagnostics, and prognostics.

 

# 2 | Build a better omnichannel CX

Leveraging omnichannel customer touchpoints to develop a seamless, personalized customer experience across digital and brick-and-mortar channels.

 

# 3 | Score bigger deals online

Developing a robust CRM program that can convert digital sales leads, build customer loyalty, and sell after-sales services and maintenance.

 

# 4 | Collect customer data post-sale

Differentiating through a connected after-sales offering. This will enable OEMs and dealerships to gain additional insights into customer behavior.

 

# 5 | Offer new technologies as upgrades

Servitizing new technologies such as advanced driver assistance systems (ADAS), safety, health, wellness and wellbeing (HWW), and driver training.

 

Investors and occupiers to (re) imagine India industrial real estate

Investors and occupiers to (re) imagine India industrial real estate

Investors and occupiers are reimagining India logistics real estate strategies to take advantage of ongoing structural shifts and evolving market maturity across the country, according to JLL’s  ‘The Road Ahead – The Logistics Sector in Asia Pacific’ report.

“India logistics sector remain firmly on the radar of investors globally. Recent signs show the market becoming increasingly sophisticated. The inflow of capital into logistics has resulted in more complex transactions and greater participation by both established and new investors into the sector, which we expect to continue in the future as well,” said Ramesh Nair, CEO & Country Head (India), JLL.

As investors continue to reimagine their logistics strategies throughout the COVID-19 environment, JLL forecasts several key themes to gather momentum in India and reinforce the structural shift occurring in the sector.

Pursuit of platform deals: There is an increasing trend towards acquiring logistics platforms rather than individual assets in India including the recent Blackstone–AllCargo and Blackstone-Hiranandani transactions. Investors will increasingly pursue this route to gain captive tenant networks and achieve scale quickly in India.

Rapid institutionalisation: The world’s largest investors are investing more into logistics real estate. Blackstone’s acquisition of the GLP portfolio in the US during the third quarter of 2019 for USD 18.7 billion is the largest real estate deal in history.

Value upside: While growth in values is likely to slow in coming few years, investors’ confidence in the structural drivers for the logistics sector is expected to remain intact. Capital values are forecasted to stay relatively firm, with modest yield compression expected in some markets across the region.

The pandemic and lockdown, as expected, has affected the India logistics sector with overall leasing or absorption in top eight cities in India standing at 11 mn sq. ft. in H1, 2020 (Jan-Jun) as against a 12-quarter average or 7.3 mn sq. ft. However, there has been additional spike in short-term demand / temporary warehouses, (lease tenure of 6 – 11 months) demonstrating the underlying strength of the sector looking for substitute locations or business continuity planning locations for occupiers to mitigate for delays in delivery of under construction projects.

E-commerce continues to drive a reimagination of the Indian logistics sector. According to e-Marketer, online retail sales as a proportion of total retail sales stands at 14% globally in 2019. India has a huge growth opportunity with the e-commerce penetration rate standing at close to 5%. To fulfill potential, e-commerce and other sectors will increasingly push the sector in a three-dimensional growth path:

•           Length - Across the length of a city (suburban and in-city warehouses)

•           Breadth - Across the breadth of the county (tier 1 & tier 2)

•           Height – Early shoots of multi-storied warehousing

“The pandemic will accelerate trends already in play across the sector, such as increased internet penetration rates, expansion of online grocery, omni-channel retailing, rise of temperature-controlled storage and the integration of technology into logistics and warehousing. Led by occupier and investor commitments, the sector is well placed to respond to the post-COVID-19 recovery,” said Yogesh Shevade, Head - Industrial Services, JLL India.

Key shifts influencing occupier decision-making, expected by JLL to accelerate, include:

The evolution of last mile logistics: Faster last mile delivery focus of e-commerce boosts the in-city / urban logistics sector where conventional retail spaces, sheds, banquets, marriage halls are being considered for alternative usage for in-city warehousing across top cities.

Rise of third-party logistics: Outsourcing of logistics will be evaluated by many companies to achieve efficiency.

Frozen is the New Fresh: Temperature Controlled storage requirements will be gaining with consumers looking for ‘hygienic and safer’ frozen commodities.

On the manufacturing front, India is also experiencing the dual thrust of two major reform initiatives – Atmanirbhar Bharat (Self Reliant India) and Make in India. While, Atmanirbhar Bharat boosts domestic manufacturing and reduces imports, Make in India is expected to capitalize on regionalization of international supply chains and reimagine India as a global manufacturing hub.

“Manufacturing firms, especially in the ancillary and assembly space, will find solace in built manufacturing spaces on lease. Additionally, manufacturers will be positioned to realize the benefits of conversion of CAPEX (land & building) to OPEX (rent), ready-to-occupy and built-to-suit industrial spaces, higher specifications, faster entry, and pre-approved usage associated with built spaces,” said Chandranath Dey, Head - Industrial Operations & Business Development, JLL India.

Engineering goods exporters flag shortage of shipping containers, high freight rates

Engineering goods exporters have written to the Commerce Ministry complaining about an acute shortage of shipping containers and arbitrary increase in freight rates and have suggested that a regulator be set up to deal with the “monopolistic’’ practices of shipping companies.

Declining imports, especially from China, resulting in lower inward traffic, is one of the reasons cited by shipping lines for the shortage in containers for outward traffic and increase in freight, explained EEPC India in a letter.

''We understand that one of the reasons cited for such acute shortage (of containers), perhaps, is that as imports into India, especially from China are declining, shipping lines have told some exporters that for only outward traffic, freight rates will have to increase as there is less inward traffic. Further, such a large increase in freight charges is also impacting the competitiveness of exporters, apart from the non-availability of containers," the letter said.

EEPC further said the government should seriously consider its proposal, made at a recent high level meeting in the Ministry, for setting up a regulator which can combat arbitrary increases in shipping freights.

The engineering goods exporters body appreciated the government’s decision to extend five per cent exemption of GST on freight charges at a time when exporters are facing high cost of containers.

Engineering exports witnessed a sharp fall this fiscal so far although things have somewhat steadied recently, the EEPC said. In August, engineering exports dropped by 8.03 per cent. ''The outlook remains choppy, though global trade is opening up sequentially despite the Covid-19 pandemic,' the release stated. 

An overview of the Indian frozen food industry

Good food is something that everyone likes and with the growing trend of attempting a hand at fancy dishes right in the comfort of your house, growing culture of food influencers sharing their tips and tricks to try when trying out your favourite recipes, a lot of people have discovered their hidden culinary skills. But leading a busy household and professional life, the passion for cooking has become difficult to indulge in nowadays and that’s where frozen foods come to the rescue.

The Indian frozen foods market was valued at around Rs 74 billion in 2018 and is further projected to reach a value Rs 188 billion by 2024, expanding at a CAGR of around 17% from 2019 to 2024. They are gradually becoming more and more popular among consumers in India due to the increasing self-awareness among consumers of its easy availability and high quality.

Research states that frozen snacks dominate Indian frozen food market due to their high demand especially frozen potatoes-based products in metro, tier I and tier II cities. Even though statistics indicate otherwise, the category is still in its nascent stage in India as consumer penetration in the category is approximately only 1% which makes it more interesting since it presents a great opportunity to exploit in the Indian market.

The frozen food’s standard product offerings were limited to options like green peas, smileys, nuggets, French fries and sausages. But, the unique Indian palettes require a different taste and therefore companies have come up with new and more Indian variants within frozen foods with items like samosas, cutlets, kebabs, and parathas among others. This provides a great opportunity for companies to capture the Indian market while offering standard staples that comprise fruits like strawberries, vegetables like peas and corn, bakery and dairy products along with ready-to-cook meals, diet snacks, healthy frozen alternatives, drinks and so on.

Ready-to-eat frozen foods are also majorly used in dessert application like ice cream and frozen yogurt which are further increasing the growth. But initially, the industry only offered frozen vegetables and fries. Today, it delivers wide variety ranging from fruits, vegetables to frozen meat, read-to-cook snacks, full meals, desserts and so on.

Among these, frozen snacks and vegetables are the largest categories in terms of sales volume summing up to 65% among the Indian customers. Urban areas account for 80 per cent of the demand which include bakery, dairy, canned, frozen, ready-to-eat meals, diet snacks, health products and drinks among others.

With the whole country on lockdown and most people working from home, frozen-food products have been flying off the shelves over the past few weeks. Corona virus having affected the restaurant business, has left the public in fear of ordering in thus, adding to the picking momentum of frozen foods. The latest trend that can be seen is that since there is no school, children’s demand for Maggi and pasta along with parathas has increased multifold.

Further, many bachelors and students are stranded in PGs and do not have access to a kitchen to prepare meals. Since frozen food is simple to prepare, it has become one of the best meal alternatives. For example, if a young woman is staying as a paying guest in a city, not only does she have to manage a demanding job which takes up most of her time but also manage household work, buying groceries and preparing meals that leave her exhausted. To add to that, deciding what meal to prepare apart from the very low ingredient availability due to Covid-19, frozen foods have proven to be a saving grace in their routines.

Thus, the scenario for Indian frozen food industry is projected to grow by 17 per cent annually during 2020-24 as the Corona virus pandemic has made people conscious about healthy choices while buying daily essentials. It can therefore be assumed that consumers will change their brand preference and move towards those brands which display guaranteed safe, regulated plants and processing properties for manufacturing, clean and pure ingredients and safe handling of products. Post-Covid-19, frozen food brands shall get more acceptance from consumers and the consumer penetration into the category is going to thus rapidly increase in India. The same trend is now visible not only in the Indian market but also in all the Asian markets.

However, Covid-19 is not the only factor that has contributed to growth of the frozen food category in India. From the influence of Western culture having changed food habits and lifestyles, to the booming e-commerce sector which offers online platforms that have a high product visibility compared to traditional platforms, have all facilitated greater penetration of frozen food products in India.

Moreover, rising urbanisation has given rise to organised retail sector which are equipped with cold chain facilities making a variety of frozen foods available. Thus changing psychologies and shifting shopping patterns, shortage of time and hectic lifestyles and rising disposable incomes of the middle class are greatly benefiting demand of frozen foods.

While frozen food is generally considered as convenient it is often perceived to be unhealthy, a consumer misconception the sector has grappled with for a while now. Often consumers assume what is available as fresh is better, but it is not necessarily true since fresh foods also take time from getting harvested, packed, shipped to being bought by the customer and finally eaten later.

Freezing is known to increase the shelf life of the food without compromising with the nutritious components. Thus the act of freezing does not make food any less healthy. The health aspect of food depends entirely on its nutritional content and how it’s preserved while being frozen. Therefore, without compromising with any of the content, frozen food undoubtedly becomes a healthy companion of ours.

Frozen food offers a practical alternative to busy households but preserving the original quality of the ingredients remains a challenge and primary concern of food producers and consumers. Therefore, businesses have invested in new technologies like IQF, quick freezing and high quality of inputs to protect the freshness and nutritional properties of fresh.

In response to Covid-19 pandemic, the Food Safety & Standards Authority of India i.e. the FSSAI, has taken several steps to facilitate the industry during lockdown. Some of the guidelines included expediting work related to licensing on the online portal, creating robust complaint handling mechanism and only essential inspections among others.

Realising the need for training food handlers, FSSAI has started training food handlers under its flagship Food Safety Training & Certification programme. Besides training the FSSAI has also undertaken to counter myths and misinformation related to the food category including frozen foods. FSSAI has communicated them to be false along with instructing states/UTs to follow a non-discriminatory approach while dealing with food businesses in the lockdown and even post-lockdown. It has also issued detailed guidelines on food safety and hygiene for food businesses during the Covid-19 pandemic which are being followed by companies because the industry understands the requirements of its customers and their need for eating healthy.

With the world having changed around us forever, the demand for frozen foods is only going to increase. Awareness around how frozen foods are not only easy, convenient, quick snacking and full meal options but also that their freshness and food composition remains intact will create a new thought process that will lead to more frozen foods consumption and higher consumer preference. As more consumers open up to include frozen foods into their lives, it is going to get easier to manage their busy lives along with doing justice to their taste buds.

Source :fnbnews