Canada’s Electronic Logging Device (ELD) Mandate is set to affect intermodal transportation favourably in rates, fuel prices and capacity. This is based on the Intermodal Competitive Index (ICI) of the freight transportation forecasting firm FTR.
Earlier this week, the condition of intermodal versus truck was described as ‘moderately favourable’ according to freight transportation forecasting firm FTR. Their Intermodal Competitive Index (ICI) showed a slight increase in November to a level of 5.0.
The ICI looks compares North American intermodal sector and over-the-road trucking. A negative number indicates conditions are unfavourable. The higher the positive number, the better the favourability for the intermodal sector. Factors affecting the level are intermodal rates, fuel prices and truck capacity.
Despite the current state, FTR predicts that the ICI may deteriorate soon because of normal seasonal factors. Thankfully, the ICI is anticipated to start rising again until the end of the year. The rise will be due to the truck Electronic Logging Device (ELD) federal mandate.
“While the new administration’s more restrained philosophy with regard to regulation may have some eventual downstream effects on the trucking environment, we believe that the ELD regulation, which has already been formalized into law, will not be recalled…[]..While the extent and precise timing of the capacity effects of the ELD mandate are open to debate, there seems to be little doubt that its capacity effects will result in some tightening of truck availability which should work to the benefit of intermodal” said Larry Gross, Partner at FTR and principal author of its Intermodal Update, in a statement.
Canada Soon to Implement ELD Mandate
The Canadian Council of Motor Transport Administrators (CCMTA) is expected to have a final rule on its own ELD mandate early this year. A Canadian compliance date will likely occur for early next year.
The mandate received a lot of enthusiasm from the CCMTA as discussions about implementing a ELD mandate in Canada has been ongoing for nearly ten years.
“Though safety and consistency with U.S. guidelines were primary factors behind the change, Canada’s ELD mandate was also motivated by financial considerations as its trucking industry hopes to compete with U.S. carriers who have seen the economic benefit of using electronic logging devices” writes Keep Truckin, a blog about fleet management.
“Canadian fleets who implement and train drivers on ELDs well before the 2018 deadline will be more competitive with U.S. fleets already reaping the benefits, including fewer hours-of-service and form and manner violations and improved Compliance, Safety, and Accountability (CSA) scores.”
Although the Canadian ELD mandate will be a year behind it’s American counterpart, the decision is the right step to improve competitiveness. A high volume of trade is conducted between Canada and the U.S. In fact, the two countries trade around trade $662 billion worth of goods and services with one another annually.
What the ELD Mandate Will Mean for American and Canadian Fleets
Having ELDs be the standard will benefit fleets in a few different ways. For one, the amount of paperwork will be greatly reduced. Secondly, dispatchers will be kept up-to-date with the condition of the drivers, helping them with planning better loads. Thirdly, it will eliminate paper logs and with that, the headache that comes with maintaining it.
The American ELD mandate is only 11 months away, but is already predicted to have a positive impact on the intermodal sector. Canada will follow suit next year. Fleets in both countries will benefit in regards to increased safety, planning and efficiency. The North American Intermodal sector has a lot to look forward this year and the next.
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Earlier this week, newly inaugurated president Donald J. Trump withdraws from the Trans-Pacific Partnership (TPP). Hence, the U.S withdrawal from the 12-country agreement effectively rendered seven years of negotiations a waste.
Pulling the U.S out of TPP was one of Trump’s campaign promises. Though, aside from the possible global-political ramifications of the action, what many are wondering now is if he’ll do the same to NAFTA and what all this will mean for the logistics industry.
Consequences of the Withdrawal
To say TPP was controversial would be an understatement. Several protests around the world were held throughout the negotiations.
There are many reasons for and against TPP, with both sides passionate about their position. But, the trade agreement would have created a network encompassing 40% of all world trade and affected millions of people across the world. Other global concerns would’ve been impacted as well, including cyber security, environmentalism and free trade.
Fallout of the withdrawal is being hotly debated across the professional and media landscape. So we have detailed the three key concerns that are being discussed:
- Loss of North American competitiveness — TPP would’ve eliminated more than 18,000 taxes and trade barriers across its member countries. By pulling out of the trade agreement, the U.S and by extension Canada, is losing out on a large section of the global market. Farming manufacturing, and the services and technology sectors will be impacted the most. While Canada and Mexico can still negotiate on their own, they lose a lot of bargaining power without U.S backing.
- Loss of North American influence over global trade — One notable absence from TPP was China. Some experts theorized the exclusion was intentional. TPP they argue, was an attempt to counter China’s growing economic influence on global trade. China has pushed its own trade pact, called the Regional Comprehensive Economic Partnership (RCEP), which currently has 16 members. By backing out of TPP, Trump may’ve pushed some countries that originally signed to seek other trade agreements, like RCEP.
- Risk of protectionism — The U.S is not part of the RCEP. If it goes through, experts are worried that it will have tariffs against the U.S. This, along with the shaken confidence of TPP members may raise the number and cost of tariffs.
What Will Happen with NAFTA?
Trump promised Americans to either renegotiate or outright end NAFTA during his campaign. His actions with TPP indicate he’s serious about his promise.
When asked on Monday, White House press secretary Sean Spicer said Trump would rather renegotiate NAFTA rather than tear it up.
“Mr. Spicer said Mr. Trump’s complaint is with “multinational” trade deals because they are more complicated to renegotiate. But he said the President was open to bilateral deals – a sign that he might be willing to keep a deal with Canada, even if he makes good on his pledge to change the terms of NAFTA to make it harder for American companies to move to Mexico” wrote Adrian Morrow, reporter for the Globe and Mail.
Trump will be meeting with Prime Minister Trudeau and Mexican President Enrique Pena Nieto in the coming weeks to discuss a renegotiation.
If NAFTA were to end, it would have serious negative repercussions for the transportation, manufacturing and logistics industries across the three nations.
The end of TPP is already having an impact on offshoring efforts. Thus, the coming weeks will see if nearshoring efforts will be upturned as well.
That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.
The Port of Rotterdam tests blockchain logistics which can kickstart a revolution in the level of transparency within the industry.
The Port of Rotterdam, Europe’s largest shipping port, is taking part in a Blockchain consortium which is focusing on logistics, reported Coin Desk. The project has the support of more than fifteen public and private sector companies based in the Netherlands.
Consortium members will spend the next two years designing and developing applications for blockchain technology in the logistics sector. There have been similar efforts in the past, but according to the founders, this blockchain project is unique because of its scale in the logistics chain.
What is Blockchain Technology?
According to the Economist, a blockchain is a distributed database that maintains an ever-growing list of records called blocks. The information in a block cannot be altered retrospectively as each block contains a timestamp and a link to a previous block. The nature of blockchains makes it function like a public, digital, distributed ‘ledger’.
The technology is relatively recent having first been put into practice by Satoshi Nakamoto in 2009 as a core component for the digital currency known as bitcoins.
Since its debut, blockchain technology has had a disruptive impact on several industries. Financial technology was the first to start adopting blockchains, but its started to move into the logistics sector as well.
How Blockchain Technology Can Benefit Logistics
There have been several articles published online about the benefits blockchain technology can bring to the logistics and supply chain sector. Here are a few ways the technology can improve the industry.
- Transparency for customers. For most people, little is known about the products they use. As LetsTalkPayment.com phrases it, “an almost incomprehensible network of retailers, distributors, transporters, storage facilities and suppliers stand between us and the products we use.”
With blockchain technology, customers will be able to see every part of the journey their product took before arriving in their hands. The network behind the store shelf will no longer be hidden, allowing the customer to make better informed decisions.
- Transparency for auditors. Because the history of transactions is locked into each block, auditors will have an easier time understanding where items and resources have gone. This, as Adam Robinson of Cersasis puts it, “help[s] supply chain leadership, such as C-level executives understand how to make the supply chain more efficient and productive.”
- Greater security. The technology will enable supply chain companies to identify attempted fraud more easily.
“For example, an employee that goes into the system to change past events will alter the coding of the event” writes Robinson. “However, the altered coding appears so differently that it would be practically impossible to not notice the change. This will allow companies to recognize the fraud and who initiated the change almost immediately.”
The two-year project undertaken by Port of Rotterdam will give insight into the scope of the benefits, but the technology has already shown promise.
“With a world that is becoming more connected on a daily basis, blockchain technology will inherently develop into a symbiotic relationship with the Internet of Things and today’s advanced logistics and supply chain management systems” concludes Robinson.
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The long road to commercially available autonomous cars is almost at an end. A number of things will be changing when that happens. Chief among the changes is the way automotive manufacturers invest and sell their products.
What separates an autonomous car from a regular car is the onboard computer. Behind that technology are companies such as Intel, Qualcomm Inc. And Nvidia Corp. which provides the chips necessary for the computing power. Cars will need to be turned into essentially mobile data centers meaning that the competition for the future of autonomous cars isn’t only among car manufactures. It’ll also be with and between the world’s largest biggest tech companies.
There’s Big Business in Little Parts
As we approach the final lap on the course towards autonomous cars, automotive manufacturers have already started to change their sale tactics. Where manufacturers used to talk about horsepower, they’ve now started talking about processing power.
According to data compiled by Bloomberg, the total value of automotive supplier deals in 2015 and 2016 were $74.4 billion. For some context, each of those years far exceeded the $17.7 billion annual average of the previous 10 years.
“The number of transactions valued at $500 million or more also skyrocket to 18 last year, triple the level of the previous decade” writes Elisabeth Behrmann, Polina Noskova, and Aaron Kirchfeld from the same Bloomberg article. “There have been 11 such deals so far this year.”
An example is Intel. Its automotive business is currently involved in 30 vehicle programs on the road. By 2020, the company is set to increase that number to 49 with orders worth $1 billion according to the Wall Street Journal.
Many of the deals are still done with makers of powertrain and chassis components. However, electronics-related acquisitions are growing the fastest. Some estimates have the cost of electronics in car manufacturing growing to 50% by 2030, up from around 30% in 2015. A portion of resources have also gone into securing the proper know-how to ensure that their cars have the necessary sensors, cameras, radar, and computing power necessary to safety assess traffic conditions and see their environment as a driver would.
Phone to Pocket PC, Car to Mobile Entertainment Hub
One of the biggest innovations over the last two decades has been in finding new uses for old products. TVs grew ‘smart’, watches and shoes graduated into personal trainers, and cell phones evolved into pocket PCs. Today’s new technology is sold with the promises of greater efficiency and consolidation. Autonomous cars will be no different.
For as useful as cars are in our everyday lives, they spend close to 95% of the time unused. This means there is a big opportunity for the manufacturers of autonomous cars. Captive consumers will be surrounded by the technology for an average of at least five hours a week. The challenge will not just be how to commercially manufacture autonomous cars, but also in building a platform that connects software developers with the passengers.
As Nokia and Blackberry demonstrated in the past, consumers need more than just an effective product. They also need their devices to consolidate their consumption of media.
That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.
To most job seekers, a career in logistics or supply chain is just misunderstood — or invisible. This is why we’ve compiled 10 reasons why a career in logistics and supply chains can be the dynamic and rewarding career so many look for!
Have you ever wondered how a package or an item gets to where it needs to go? You should—the system that ensures that it happens is called a supply chain. The industry that ensures that it runs smoothly is called logistics. And the reason why this industry is so exciting is because without it, no other industry would be able to operate!
Despite the critical role logistics plays behind consumer goods, military supplies and personnel, it’s an industry with a recruiting problem.
Here Are Our Top Picks for Why This Career May be Right for You
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Research and Markets recently announced the release of its “Bio-Pharmaceutical Logistics Global Market Report 2016.” The report has a detailed strategic analysis of the bio-pharmaceutical industry on a global level and provides a growth forecast for the markets of North America, Europe and Asia-Pacific from 2012 to 2020.
The scope of the report involves an analysis based on the type of transport used and in the type of product used(/transported?). The Porter’s Five Forces analysis included in the report provides an insight into market dynamics and industry competition.
The Bio-Pharmaceutical Industry Hurdles Obstacles to an Exponential Growth
The major take away from the report is that the global market for bio-pharmaceutical logistics has had major growth over the last few years. In 2014, the industry was valued at $61.1 billion USD and by 2020, it is expected to be at a value of $91.0 billion USD, growing at a CAGR of 6.9% between of 2015 and 2020.
Despite the rapid industry growth however, temperature control, regulatory compliance, security, safety and chain of custody remain the key obstacles for pharmaceutical manufacturers. It is through effective logistics that management pharmaceutical companies are able to have a constant supply of drugs, devices and equipment from various dealers and distributors in different locations.
The report also highlights some other issues that are impacting the bio-pharmaceuticals logistics industry:
- Patent rights for several leading drugs are set to expire, meaning that large portion of sales will shift from original brand manufacturer to generic manufacturers.
- The global pharmaceutical market has more than doubled in the past 10 years and is expected to reach 942 billion by the end of 2016.
- Markets like Asia, Latin America and the Middle East are becoming more attractive to these pharmaceutical companies, however, these markets have the most challenging supply chains.
- The distribution structure in European and American markets are heavily inclined towards national warehouses both regionally and centrally.
Pharmaceuticals See the 3PL Salvation
Developing warehouse structures and outsourcing to logistics service providers is the key focus with some pharmaceutical manufacturers. Low cost and greater visibility in the supply chain are the main advantages of outsourcing logistics services and is becoming an integral part of strategy for the pharmaceutical industry.
A few key findings from the report with regards to pharmaceutical logistics include:
- Geographically, Asia-Pacific dominates the market, which is evident from the presence of key players and lower logistics costs.
- Panalpina, DHL, FedEx and UPS are amongst the leading logistic service providers in the industry.
The report has more value than just a global industry overview. It also contains growth strategies, describes entry barriers to be considered and has competitive profiling of leading players, recent corporate developments in the industry and various business strategies adopted by them.
This makes the report an excellent tool for people looking to enter the industry and those already in the industry seeking to plan and implement their strategies in different market areas such as emerging geographies and new technologies.
That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.
It’s been two weeks since the United Kingdom European Union membership referendum was held in the UK. In what surprised many political analysts and commentators, a majority of British citizens voted to leave the EU with 52% percent in favour of leaving and 48% in favour of remaining.
This month, we’re focusing our eBook on how this change will affect the logistics industry both now and in the future as the United Kingdom prepares to leave the EU.
Looking at Current and Future Cost of Brexit for the Logistics Industry
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Nine years ago, several coffee beans of the higher quality Arabica variety were stashed away and forgotten about. At the time, there was a period of oversupply you see.
As the coffee beans sat in the warehouse, they lost their quality and with it their value. In fact, the value of the coffee beans has dropped so much that they are essentially free for anyone that can find a use for them.
“For instance, coffee that’s been certified by the ICE Futures U.S. exchange that goes unsold for 121 days costs half a cent cheaper per pound, according to the Journal. For three years, the cost falls 35 cents per pound. Coffee that’s nine years old is a whopping $1.55 less per pound, which makes it pretty much free since arabica coffee futures were at $1.37 a pound as of Monday” writes this article in Fortune.
Good ‘Ol Coffee Bean Logistics
For some context, 2007, when the oldest of the beans became stored away, was an interesting year. The Writer’s Guild of America went on strike impacting many popular shows, Vladamir Putin was announced as Time magazine’s Person of the Year, and Steve Jobs revealed the first generation of the iPhone to the public.
The coffee beans and their journey from valued commodity to essentially chaff is an example of the problem of inefficient supply chains. Because of a mismanaged glut, old coffee beans circa the Bush administration are just now leaving their home warehouse.
Coffee connoisseurs don’t fret! You’ll likely not have to worry about stale coffee the next time you go for a cup of Joe at your local Starbucks or Starbucks equivalent. Despite the super sale on these beans, they are ultimately not destined to for Starbucks (or any other upscale caffeine providing establishment). This is because many coffee roasters said they wouldn’t purchase beans that were more than a year old because they lose their flavor.
“You’re not going to see this in your Starbucks, ” according to Jorge Cuevas, chief coffee officer at Sustainable Harvest, a coffee importer, in an interview with the Journal. “It’s mostly going to be in generic brands that you might get at an institutional level.”
These beans will go to bulk and instant-coffee roasters, and eventually to companies that supply most institutional coffees for places like hotels, schools, and vending machines. They may also combine older beans with newer ones, or roast them longer to mask the taste.
The use of older beans isn’t uncommon. However, coffee beans are not usually this old. The quantity of these beans has also had an impact. “According to exchange data, 18% of exchange-certified beans were more than three years old at the end of May this year, compared with 11% in May 2013” points out this article from the Consurmerist.com.
At least the beans are being put to use. The cups of Joe made from them may not have the flavor of brews made from newer beans, but at least a person in need will be getting some caffeine.
That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.
Nominated during OWIT (Organization of Women in International Trade) Toronto’s Annual Awards Ceremony, where Kelli Saunders of Morai Logistics Inc. wins Woman Exporter of the Year.
Toronto, ON (June 16,2016)
On Thursday, June 9th 2016, Kelli Saunders, President of Morai Logistics Inc., an Authorized Agent of Mode Transportation, was the recipient of The Woman Exporter of the Year Award from OWIT-Toronto (Organization of Women in International Trade-Toronto). Nominees had to have at least 50% ownership of a profitable business registered and operating in Ontario for more than 3 years. Nominees also had to have earned their primary income from the business and must have been responsible for its daily operations. A significant portion of her company’s business had to have come from exporting products or services.
The Woman Exporter of the Year Award honors an outstanding woman entrepreneur who, through her exporting endeavors, is advancing women and the image of Canadian business women in the international community.
Network and Cherish Those Around You.
Kelli was presented this award for her company’s work with major fast-moving consumer goods companies as a third-party logistics provider with expertise in cross-border intermodal logistics in the US and Mexico.
Jim Damman, President of Mode Transportation, said:
We are all very excited for Kelli. She is an outstanding businesswoman, and she and her team do a great job of providing the best export solutions to her valued customers. This award is very well deserved. Her hard work in receiving this award is something that makes all of us very proud.
Kelli’s advice to other women is to network and cherish those around them. Surrounding yourself with energetic high achievers will give you the foundation for a strong, career-long network from which to grow.
Shown above is Kelli’s acceptance speech.
ABOUT OWIT TORONTO: OWIT-Toronto (Organization of Women in International Trade) is a non-profit professional organization designed to promote women doing business internationally, by providing networking opportunities, export education and global business contacts. Members include women entrepreneurs, service providers and business women involved in international trade.
That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.
Transparency within the supply chain used to be quite the grey area. With consumers more interested than ever in knowing exactly where their products come from, the need for supply chain transparency is vital.
Consumers today demand to know the origins of the products they are purchasing. Knowing a product has been ethically sourced or produced in a sustainable manner increases value, and creates loyalty and trust between consumers and companies. While it may seem like creating total supply chain transparency would be a no brainer, many businesses worldwide still turn a blind eye and fail to place importance in this necessity. Scandals continue to arise each year as company after company is faced with the consequences of hiding how their goods are produced.
According to The Toronto Star, more than 40 Canadian drug companies have been cited for serious manufacturing violations, putting patients at risk by selling prescription drugs that companies sold with knowledge that they were defective. In this case, not only were companies hiding test data about the production of their goods, but they were additionally putting consumers at risk. In February of this year, Bloomberg News reported finding many popular Parmesan cheese brand manufacturers were using wood pulp and cellulose as cheap fillers in their products. While the FDA in the USA regulates that companies can legally use cellulose as a filler, consumers were outraged at the lack of supply chain transparency in the manufacturing of this product.
From Cotton to the Tech Industry
Although there are continuous reports of problematic companies, there are many industries working and moving towards supply chain transparency:
- Cotton Industry – Although the apparel production still has a long way to come in terms of total supply chain transparency (with a specific regard to manufacturing), this industry is working harder to be completely transparent with consumers and the exact methods of production for the products they are purchasing.
- Floral Industry – Companies in this industry are beginning to take charge and are pushing for more transparency. With a large reputation for permitting unsafe working conditions, companies are now providing information to consumers about how they are creating ethical farming practices to ensure the well being of their farmers.
- Organic Foods – The food industry has major strides to make in terms of transparency, however the farm to table movement has helped in leap starting that transition. Informing consumers about more local products gives them a connection to those producing their food. With clearer supply chain transparency, farmers are receiving better fair wages and safe working conditions, while consumers benefit from ethically sourced and fresher products.
- Technology – While this industry has faced major backlash for using unregistered workers, unfair wages and poor working conditions, many startups and technology companies are utilizing tools that allow complete transparency with consumers. These tools offer product traceability so consumers can determine exactly where and how a product was manufactured, and if it was produced in an ethical manner.
Although there are major adjustments that need to be made in numerous industries worldwide, more companies are beginning to understand the importance of supply chain transparency and are developing methods to better inform consumers. Better supply chain transparency increases value for businesses, and in return increases consumer loyalty and overall brand strength. Not only can a lack of transparency be damaging to business, it can also put consumers at risk.
That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.