Industry News (659)
China’s domestic healthcare market attracts logistics providers
Written by SCA Editorial Team
According to a recent Wall Street Journal article, UPS has big plans for the Chinese healthcare market. Indeed, according to Jim Barber, President of UPS International, UPS is interested in acquisitions to broaden its healthcare supply chain within the country. In particular, the company appears to be in search of domestic transportation companies.
While much of the focus has been on the export market, China's domestic market holds great opportunities for logistics providers such as UPS. In 2011, China's government adopted a national strategy to expand and improve the country's healthcare system. With a population of over 1.3bn, the potential is great and opportunities abound for all involved in the healthcare industry. However, according to Barber, one of the biggest challenges in China's healthcare sector is delivery. True, infrastructure connecting cities, towns and villages is problematic. The unevenness of the transportation infrastructure, for example, has resulted in regionalised networks. Because of this, Barber noted that UPS is considering multiple acquisitions of domestic competitors that have regional advantages.
While the opportunities are great, the competition is strong and fragmented. Domestic express providers such as SF Express and STO Express have been working towards expanding their reach across China by acquiring regional providers. Meanwhile, pharmaceutical manufacturers/distributors, such as Sinopharm, are also expanding their geographic reach. Sinopharm has built out both its national distribution and retail network by focusing on acquiring regional distribution leaders, expanding into second and third tier cities and into traditional retail channels, as well as emerging channels such as e-commerce. Since 2009, the company has made over 60 acquisitions.
CMA CGM, Maersk Line and MSC to establish an operational alliance
Written by SCA Editorial Team
CMA CGM, Maersk Line and MSC Mediterranean Shipping Company SA have agreed to establish a long-term operational alliance on East – West trades, called the P3 Network. The aim is to improve and optimise operations and service offerings.
The P3 Network will operate a capacity of 2.6 million TEU (initially 255 vessels on 29 loops) on three trade lanes: Asia – Europe, Trans-Pacific and Trans-Atlantic.
While the P3 Network vessels will be operated independently by a joint vessel operating center, the three lines will continue to have fully independent sales, marketing and customer service functions.
Ecommerce Europe, the European umbrella organisation for online retailing, has announced its latest member: the newly established Polish e-commerce industry organisation e-Commerce Polska.
Poland is one of the fastest-growing e-commerce markets in the EU, with goods and services worth €4.2 billion in 2012 sold online to consumers, up 25 per cent on the previous year. Nearly 50 per cent of Polish Internet-users have already made purchases online, amounting to 9 million active e-shoppers in Poland. However, at €464 in 2012, the average annual amount spent per e-shopper is still below the European average.
E-Commerce Polska was founded by 33 major e-commerce companies based in Poland and already represents the interests of nearly 100 members. It claims to reach “over 500 e-commerce market influencers” through the Digital Market Development Foundation’s Digital Economy Club.
IndoSpace Luhari industrial logistics park starts operations
Written by SCA Editorial Team
IndoSpace Luhari, a 1.6 million square feet industrial and logistics park developed by Realterm Everstone Development Management Private Ltd has commenced operations at Luhari, near Gurgaon. IndoSpace Luhari is part of the industrial and logistics parks developed by Realterm Everstone across India and is being constructed at an estimated cost of Rs 300 crore.
The industrial park houses warehouses and light manufacturing facilities designed to meet the logistics and supply chain needs of global companies. The site is within close proximity to several large industrial clusters, including IMT Manesar, Daruhera, Bhiwadi, and Bawal industrial areas.
Good regional connectivity makes the site an ideal location for third party logistics services (3PLs), consumer goods companies and retailers to establish their distribution centres to service Gurgaon, Delhi and northern India.
The shifting balance of world trade from developed economies towards rapid growth markets such as India, China, Brazil and Africa has led Indian and multinational companies to shift focus accordingly. These changing patterns of world trade have a significant influence on the supply chain, which is inextricably linked to indirect taxes — cross-border (customs duty) and country taxes (value added tax or VAT/ general sales tax or GST, excise and service taxes). Effective management of these taxes, from compliance and cost perspective, is paramount.
Though companies have achieved exponential growth in these countries, there is room for improvement in the management of indirect taxes. India is a classic example of a growth market with a complex indirect tax structure, comprising both Central and State taxes, leading to inherent cascading effects. The chorus for GST to address this issue is well articulated, but it is still a distant dream owing to our divided polity and federal structure. Most people, even in mature economies, believe indirect tax is a pass-through tax, but it is not.
This is more so in India, where there is a significant amount of leakage, and when managed improperly can lead to loss. Unlike income tax, indirect taxes apply to procurements, manufacture, supply and sale, irrespective of whether a business is profitable or not. Yet, it does not receive the required attention from many business leaders.
As continual technology development provides a seemingly inexhaustible range of business-enhancing initiatives, the logistics sector is under threat of falling behind, as it not only has to forecast consumer demand but also the potential effects of technology on the supply chain, whether enhancing or detrimental.
In the face of potentially damaging developments in the supply chain as 3D printing and online retail force traditional manufacturing and distribution methods to adapt, it makes sense that DHL, the world’s largest logistics firm, is standing strong at the very centre of developments. Given the unique opportunity to explore their Innovation Centre in Triosdorf, Germany, Supply Chain Digital checks out the company’s multi-million euro development programmes, which are rapidly outlining the future of logistics.
Bill Meahl, Chief Commercial Officer at DHL, is part of the central management team at the Innovation Centre, where the company is embracing the challenges and opportunities in the future of logistics.
After a two month decline, the Stifel Logistics Confidence Index rebounded in June. Compiled by Transport Intelligence, the overall index, which combines the current situation with future expectations, increased 0.7 points from 50.7 in May to 51.4 in June. In addition, the index was 0.1 points higher compared with the same month in 2012. Furthermore, June marks the fifth consecutive month the overall index registered above the 50 threshold, indicating growth in the overall European freight forwarding market.
Optimism appears to be on the increase as signs of an economic improvement in Europe emerge. There are also signs of possible stabilisation within the airfreight market. While for sea freight, carriers' attempts to raise rates are proving futile as overcapacity remains a concern.
In terms of sea freight, the index for the current logistics situation increased 1.2 points to 48.2 for the current month; compared to last year, the index was 2.5 points higher. Meanwhile, the overall index for air freight noted an increase to 42.0 in June, up 0.6 points from May; compared to last year, the air freight index is 0.9 points higher. Despite both air and sea indices remaining below the 50-level threshold, the improvements are probably due to seasonal rebounds in volumes as well as the launch of Samsung's newest smart phone and other high tech gadgets. Whether these increases are sustainable is unknown due to the fragility of the current environment.
Ti’s latest report says contract logistics 'needs a new mindset'
Written by SCA Editorial Team
The global contract logistics market grew by 3.4 per cent in 2012 to €159.35bn, the latest report 'Global Contract Logistics 2013', from industry experts, Transport Intelligence, has found. However this figure hides an increasing divergence in the performance of regional markets, with growth in emerging markets much higher than those in Europe or North America. For example, the Middle East grew at 5.7 per cent, whilst the Asian contract logistics market grew at 6.0 per cent; due to an emphasis on intra-Asian trade. This contrasts with growth in North America which was only 3 per cent, and an even weaker 0.9 per cent growth rate in Western Europe.
This gap in performance is set to widen with the outlook for emerging markets through 2016 remaining strong. Europe's 37 per cent share of the market is likely to fall to just 31 per cent in 2016, whilst Asia's share will increase by 5 percentage points to 36 per cent over the same time scale.
According to the report's lead author, Cathy Roberson, the changing market dynamics will require a new mindset from contract logistics providers, with the need to focus their strategy on these emerging markets.
Better logistics needed for growing cross-strait trade
Written by SCA Editorial Team
Experts have called for improved logistics services to handle growing trade between Chinese mainland and Taiwan during a two-day forum on cross-Strait logistics that concluded Monday.
Logistics have become a major challenge in expanding trade, experts attending the forum said. The coordinated development of logistic services on both sides of the strait will facilitate the flow of goods and further stimulate cross-strait trade.
Trade between the Chinese mainland and Taiwan surged 46.5 per cent in the first quarter to US$51.44bn, according to the General Administration of Customs. East China's Fujian Province, which is located across the strait from Taiwan, has been a major destination for goods imported from the island for further distribution across the Chinese mainland.
Supply chain issues may stall auto industry’s resurgence
Written by SCA Editorial Team
Automotive supply chains are struggling to keep pace with a surge of sales and new car models this year leading large automakers such as Ford Motor Co. and Nissan Motor Co. to brace themselves for the worst. The news is leading many observers to wonder whether the automotive chain will snap.
New car sales are estimated to eclipse 15 million this year with 500 vehicles launched by 2016 — a new record. However, because of the economic downturn, many suppliers were forced to close plants, lay off large numbers of workers, and reduce the capacity of their operations by as much as 30 per cent. Now that the auto industry is seeing a huge rebound in the realm of 22 per cent, the supply chain and automakers are in a huge bind due to delays, disruptions, material shortages, and quality issues.
In order to increase capacity, Ford has added shifts at their plants resulting in an additional 400,00 vehicles with plans to add another 200,000 this year. Ford’s purchasing staff, which works directly with suppliers, has been in constant damage-control.
