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Exclusive Interview: Chris Jones, EVP, Descartes Systems Group

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Exclusive Interview: Chris Jones, EVP, Descartes Systems Group. Image: Unsplash
Exclusive Interview: Chris Jones, EVP, Descartes Systems Group. Image: Unsplash
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Chris Jones, EVP Industry & Services, Descartes Systems Group. in an exclusive interview with Freightcomms talking about the consumer behavior in the US and present shipping crises.

1. Other than the present statistics on the spike of import volumes for the month of May, what factors do you think are responsible for the global shipping crisis?

The high import volumes are a symptom and not the root cause. Consumer behavior and an overloaded logistics infrastructure are the larger influences. Consumers have not really slowed down their purchasing of durable goods. If you look at the chart below you will see that the February 2020 figure for personal expenditures of durable consumer goods is $1,550 billion. In April 2022, the most recent published numbers from the U.S. Federal Reserve, the figure is $2,179 billion or a 41% increase in a little over two years. If you take into account that the U.S. port infrastructure was already capacity constrained at the end of 2019, it’s easy to understand why there has been so much disruption.

Exclusive Interview: Chris Jones, EVP Industry & Services, Descartes Systems Group

Exclusive Interview: Chris Jones, EVP Industry & Services, Descartes Systems Group. Image: Descartes Systems Group

2. While there is a spike in import volumes, many retailers are now with excess inventory. How do you think the balance of demand and supply will be maintained?

There isn’t a balance of demand and supply and probably won’t be for quite some time. The challenge is that there are multiple factors at play and the situation varies by industry. For example, the chip supply is still heavily constraining automotive manufacturers and other industries. China is bringing on manufacturing capacity as it emerges from the recent COVID lockdowns, which will help address the backlog for many goods and increase exports to the U.S. Logistics assets (e.g., containers) are still not in the right positions to maintain efficient flow of goods. Some retailers are indicating high inventory levels, but not necessarily the right inventory. There are many popular items that still have extremely limited availability such as gaming consoles.

3. How will the supply and demand balance impact volumes in the next quarter? If there’s an excess inventory situation, what do you think the peak season will look like?

There are a number of counter balancing factors that are making peak season shipping volumes hard to read, but we are likely to see a continuation of port supply chain disruptions. High inflation and rising interest rates could depress retailers’ plans to import goods. However, China opening up will drive more imports for items that have been in backlog and there are still items in high demand that will need to come in to support peak season shopping. Whether import volumes in the summer and early fall continue their record pace is up for debate, but they would have to decline considerably to make a difference. Given that the container import volumes are so high, even if they do not continue the record trend or surpass 2021 volumes, there is likely to still be congestion and disruption. We have been tracking container import volumes through the pandemic and, since the U.S. broke 2.4 million containers in April of 2021, port congestion has been a significant problem. May was over 2.6 million containers, a new all-time record.

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Freight Forwarding

DHL inaugurates a new transhipment hub in Johannesburg

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DHL inaugurates a new transhipment hub in Johannesburg. Image: Pixabay
DHL inaugurates a new transhipment hub in Johannesburg. Image: Pixabay
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DHL Global Forwarding, the leading international air, ocean, and road freight services provider, has inaugurated a new transhipment hub and head office in Johannesburg, South Africa. The sustainable, primarily solar-powered complex was officially opened on Thursday, 22 September 2022. Located in the Sky Park Industrial Estate it provides easy access to “OR Tambo International Airport”.

The facility’s temperature-controlled chambers and Good Distribution Practices-trained personnel enable the new hub to cater to the unique needs of Africa’s rapidly advancing life sciences and healthcare sector. The facility’s opening marks a significant addition to DHL Global Forwarding’s extensive logistics network, further strengthening its positioning on the African continent and in South Africa while enabling the group to handle its customers’ requirements more efficiently.

Amadou Diallo, CEO of DHL Global Forwarding Middle East & Africa, said: “We are proud that this new facility was built to the highest standards of sustainability and energy efficiency in line with DHL Global Forwarding’s goal of reaching net-zero logistics-related emissions by 2050. Already, our climate protection initiatives and CO2 emissions reduction programs have had a positive impact on logistics supply chains globally and building sustainable infrastructure like this solar-powered facility takes us closer to our goal.”

The new EUR 7-million facility includes offices and a 10,000 m2 warehouse. It will serve as a hub for transport, logistics, and warehouse solutions, as well as international freight expertise for different industries. This includes a strong focus on Africa’s life sciences and healthcare sector, which with an expected annual growth rate of 6.3% and anticipated revenue of EUR 7.1 billion by 2023, is one of the booming industries in the country. To serve the needs of the LSH sector, the site has been designed to meet the DHL Global GxP Pharma standards and the highest Transported Asset Protection Association security standards.

At the facility’s opening ceremony, Clement Blanc, CEO of DHL Global Forwarding for South Africa & Sub-Saharan Africa said: “A new facility in Johannesburg is a natural next step in our efforts to support economic growth and accelerate the pace of supply chain transformation undergoing in South Africa. This facility expands global connections to Africa, ensuring that sectors like LSH can operate smoothly, access an efficient and reliable logistics network, and continue to grow.

Blanc continued: “The strategic location of our new facility at ‘OR Tambo’ will enable us to enhance our service offering to clients. We are excited to be able to transport both time- and temperature-sensitive pharmaceutical goods and health products, among other services. I am confident in our ability to assist our customers in developing and expanding their businesses and continuing to aid the socio-economic growth of South Africa and the greater Sub-Saharan African region.”

The new facility will also create skilled jobs in Johannesburg. DHL Global Forwarding has expanded its total workforce in South Africa by 11% since 2021. The company also has a strong commitment to supporting and driving the participation of SMEs in the economy and ensuring that they have a place in global supply chains.

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Container Terminal

DP World completes implementation of of the CARGOES TOS+

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DP World completes implementation of of the CARGOES TOS+. Image: DP World
DP World completes implementation of of the CARGOES TOS+. Image: DP World
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DP World, the leading global logistics company and provider of smart supply chain solutions, has completed the implementation of the CARGOES TOS+ Terminal Operating System at DP World Southampton in the UK.

DP World Southampton is one of the UK’s major deep-water ports, with an annual throughput of 2 million TEU, and the new terminal operating system implementation comes following DP World’s £40m investment into the port last year.

The CARGOES TOS+ solution is designed to optimise operations for efficient cargo and container handling at port and terminal facilities. Among the host of new features now available to DP World Southampton with CARGOES TOS+ is a highly accurate simulation modeling capability, where terminal operations and the results of planning can be seen in advance and fine-tuned before changes are made in the production environment.

Other new features include deadline handling for rail yard moves and dynamic zoning of quay cranes. This allows improved planning of discharge operations and empty container selection, to minimise travel distance and congestion.

Since the go-live of CARGOES TOS+ at the start of April 2022, quay crane gross moves per hour has increased, whilst truck turnaround time has decreased. Additional features of the CARGOES TOS+ platform will be enabled at DP World Southampton over time to bring further productivity gains to the port.

The switch to CARGOES TOS+ from the legacy Navis N4 TOS system is a particular milestone for the CARGOES Ports & Terminals team as it is the first time CARGOES TOS+ has been rolled out at a port running straddle carrier operations.

DP World Southampton has garnered industry accolades for achieving the fastest landside turnaround time in the UK as well as being the most reliable rail feed, with dual track access to the country’s main rail network feeding 22 trains a day. Southampton has the highest percentage of containers moved by rail in the country, and together with its sister terminal London Gateway, takes the equivalent of 300,000 trucks off British roads each year.

The terminal is a pure straddle carrier port, operating a fleet of hybrid straddle carriers that service 14 quay cranes. Southampton has recently replaced diesel with vegetable oil-based HVO biodiesel, cutting net emissions from the terminal by over 80%.

Matt Stride, Business Optimisation Manager – Operations, Project Lead, DP World Southampton, said: “As the first straddle carrier terminal and one of the first big European terminals in the DP World portfolio, the leap from the Navis platform to CARGOES TOS+ represented a significant milestone for us and also for the CARGOES TOS+ group .

“As a highly competitive terminal, DP World Southampton embraced the prospect of a new TOS in order to increase productivity, reduce delays and build a platform for the future.

“The team in Southampton look forward to the next stages where more of the terminal operations will fall under TOS+ management and control.”

Steve McCrindle, Port Operations, DP World Southampton, further stated: “This was a fantastic team effort, not only to develop and deliver the first straddle carrier module, but the go-live was a resounding success, resulting in a seamless migration, no unplanned downtime and zero impact to our customers. The two teams have worked extremely well together. Full credit goes to CARGOES for understanding our requirements and ensuring we had the correct people and expertise throughout the project journey.”

Mohammed Rahmah, VP CARGOES Ports & Terminals, said: “The Southampton terminal is a new success story for the team. At CARGOES, we focus on adding value to terminals by developing the most advanced features possible. We have end-to-end solutions catering for all elements of terminal operations, from gate systems to internet of things capability. With a host of tools to choose from, we aim to deliver the solutions that ports and terminals need as they adapt to the future of global trade.”

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Logistics & Supply Chain

Maersk inaugurates two new warehouses in India

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Maersk inaugurates two new warehouses in India. Image: Maersk
Maersk inaugurates two new warehouses in India. Image: Maersk
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Strengthening its position as a global integrated logistics company, A.P. Moller – Maersk inaugurated two new warehouses in India, that are strategically located near the National Capital Region in the northern part of the country. Soren Skou, CEO, A.P. Moller – Maersk, Navneet Kapoor, Executive Vice President, A.P. Moller – Maersk, Richard Morgan, Managing Director, Maersk West & Central Asia, and Vikash Agarwal, Managing Director, Maersk South Asia, inaugurated the facilities from New Delhi.

“Logistics is moving up the strategic agenda of organisations. Our conversations with customers are turning into holistic, partnership-based discussions through which they seek resilient solutions to their supply chains that are insulated from unforeseen disruptions.” said Soren Skou, CEO, A.P. Moller – Maersk. He added, “An important element of end-to-end logistics is warehousing & distribution. Expanding the warehousing footprint is fundamental to our strategic growth, especially in an important market such as India and helps us offer our customers truly integrated logistics solutions.”

The 420,000 sq. ft. Farrukhnagar Warehouse is a brand new, state-of-the-art warehouse connected to the busy manufacturing hub of North India. With close proximity to the Western Direct Freight Corridor, Farrukhnagar Warehouse will be a key facility for retail, FMCG and large eCommerce customers. The 100,000 sq. ft. Maersk Dadri Warehouse, located within the Inland Container Depot, offers customers bonded warehousing solution. Being at the confluence of Western and Eastern DFC, having a rail head connection, proximity to eight national highways, and Jewar Airport coming up within 60 km range, this warehouse has all the prime attributes that will add value to customers’ supply chains.

“Today, we have inaugurated our sixth and seventh warehousing facility in India this year. Our ambition to support our customers with truly integrated logistics solutions is taking the right shape. Our customers have already utilised around 75% of the capacity of our existing warehouses, showing their faith and trust in our solutions. This also encourages us to keep investing in our warehousing expansion in India.” said Richard Morgan, Regional Managing Director, Ocean & Logistics.

As an integrator of logistics, Maersk is developing and providing solutions ranging from ocean transportation to landside and air transportation, contract logistics including warehousing & distribution and depots, custom clearances, visibility solutions and so on. When supply chains were impacted due to the disruptions caused by the pandemic, Maersk’s resilient end-to-end solutions ensured customers’ cargo kept moving. The integrated solutions allow Maersk to have greater control over the movement of the cargo throughout the journey and thus bring resilience to the supply chains. With the expansion of W&D facilities, Maersk is strengthening its position further by providing a larger array of services through a single window to its customers.

Earlier this month, Maersk completed the acquisition of LF Logistics, a Hong Kong-based contract logistics company with premium capabilities within omnichannel fulfilment services, e-commerce, and inland transport in the Asia-Pacific region. LF Logistics has seven warehouses in India, which have been added to Maersk’s network. The total warehousing footprint offered by Maersk to its customers in India now stands at around 3.3 million sq. ft. from over 20 warehouses.

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