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Thursday, June 19, 2008

World Wide Trucker's Strike - Thailand - Turns to Blockade in Bangkok

In Thailand the trucker's strike took the direction of both a protest and a blockade.  Not only did truckers in the capital not deliver their products, but they used their large trucks to blockade the traffic of the capital.  Similar, but smaller protests of this nature have been seen elsewhere including in the United States where truck drivers drove significantly below the speed limit through the Washington DC area snarling traffic during the spring of 2008.

BANGKOK (Reuters) - A major Thai truckers group that is threatening to blockade the capital this week is due to meet energy and transport officials on Monday over its demands for government help against rising fuel prices.

Thongyu Khongkan, head of the Land Transport Federation of Thailand, which has 400,000 trucks under its banner, said he hoped the meeting would yield "positive results", but said he was not yet backing off his call for action on the streets.

"Our stance is clear that if we don't get what we want, our member organisations will start moving their trucks to Bangkok," Thongyu told Reuters.

"Imagine what will happen to Bangkok traffic when you have thousands of trucks driving very slowly into the capital and police can't stop us."

Last week, thousands of truckers nationwide went on a half-day strike demanding help against rising fuel prices, the latest in a series of protests that have swept across Asia and Europe as oil prices have soared to above $130 a barrel. Their specific demands included a discount of 3-baht ($0.09) per litre of diesel for six months, as well as cheap loans to convert engines to compressed natural gas.

State-run refineries agreed last month to sell diesel to Bangkok bus companies at an 8 percent discount under a cheap fuel scheme that has ample scope to incorporate other sectors such as fishermen and truckers.

Reuters

It is one thing for truckers to not deliver food or mp3 players or even swimsuits but quite another when all other traffic is blocked from going about their business making the strike and the situation all the more immediate for the people present in the area.

World Wide Trucker's Strike - Spain

In Spain last week, a trucker's strike that started as truck drivers were demanding a minimum payment for services as fuel prices continue to spike wiping out truck drivers opportunities to make money, ended just as similar strikes were ramping up in other countries around the world.

MADRID, Spain—Spain gradually recovered from food shortages as a five-day-old truckers' strike appeared to lose steam, government officials and merchants said Friday.

Officials at Madrid's main wholesale market, Mercamadrid, said supplies were more abundant but still not back to 100 percent.

Luis Alberto Carrillon, president of a fruit wholesalers association, said supplies were at 60 percent of normal, which he called a big improvement. "The strike is winding down," he told Associated Press Television News.

The strike is being waged by self-employed drivers who make up a small sector of the Spanish trucking industry.

They want the government to establish minimum, guaranteed rates for their services, and say otherwise they cannot compete with large trucking companies, which are better able to cope with diesel fuel prices that have risen 36 percent in a year.

San Jose Mercury News

Food supplies were the most noticeable items impacted by the Spanish trucker's strike while other supplies, equipment and products from repair parts to ac compressors were delayed in their shipment with rumors of some items being sold from the back of trucks.

World Wide Trucker's Strike - South Korea Week Two

The trucker's strike in South Korea reached its second week this week and is heading into the third week as the strike already poses to further damage the Korean economy by $4.3 billion.

SEOUL, June 17 (Reuters) - A top South Korean trade body said on Tuesday an ongoing truckers' strike had caused $4.3 billion in damages and urged workers to halt the protest, which has paralysed the export-dependent country's ports.

"The ongoing strike has started hitting production at many manufacturers, with chemical companies in particular on the brink of completely stopping operations as shipments out of major petrochemical complexes have fallen below 10 percent," the Korea International Trade Association said in a statement.

The strike by thousands of truckers, which started last week and was joined by other unions such as construction this week, has cast a shadow over Asia's fourth-largest economy and is one of many by truckers around the world against soaring fuel prices.

Reuters

The second week of this strike will definitely hurt both consumer electronics manufacturers as well as car manufactures all the way down to biomed producers of supplements and diet pills.

World Wide Trucker's Fuel Strike - Columbia

A strike among truck drivers this week has spread from country to country and could become a world wide event before the month of June is out.

BOGOTA (Reuters) - Colombian truck drivers went on strike on Monday to protest high fuel prices, tolls and freight payments, but the government said the shutdown would have only limited impact as many drivers kept working.

Colombian truckers joined demonstrations by transporters from Europe to Asia who are demanding help in managing costs as world oil prices soar to record highs.

President Alvaro Uribe planned to meet with the striking drivers on Monday to work out an agreement to end the protest. But the government said so far the strike had a minimal effect on deliveries to ports and supply centres.

The Colombian Truckers Association said around 140,000 vehicles had joined the strike, which started at midnight on Sunday after talks with the transport ministry fell apart. But the government disputed those figures.

"We will start to feel the impact of this from Tuesday onwards," truck drivers' association president Nemesio Castillo told reporters.

Freight agreements, fuel costs, toll prices and access to credits were among the points the truckers wanted to address with the government, he said.

Coffee exporters in the world's No. 3 grower had sent some deliveries to port early in anticipation and expect no impact if the strike lasted three or four days, said Jorge Lozano, president of the Asoexport coffee exporters association.

Transport Minister Andres Uriel Gallego said reports from early morning showed the strike had limited impact and no roadways were blocked by protesters. The Pacific port of Buenaventura had some reduced traffic, he said.

"Ports on the coast in Santa Marta, Cartagena and Barranquilla are absolutely normal with some reductions in Buenaventura and fuel transportation is normal. So the strike so far has had a minimum impact," he said.

Reuters

Supplies from SD cards to food to oil and clothing will be stranded in warehouses, on trucks along the side of the road and in ports before its over as truck drivers fight for the higher wages needed to cover their fuel expenses to keep freight moving on the road.

Sunday, June 15, 2008

Transportation Costs to increase 5 - 15 Percent in India due to Oil Prices - Manufacturing Re-Localization Trends

Several executives of transportation companies in India were recently questioned about the potential for increases in freight costs.  India like the rest of the world is reacting to higher oil prices and in the last three months this has translated into a 10 -12 percent increase in costs with expectations that the even more recent oil spikes could push transportation costs up another 5 - 15 percent.

This increase in freight cost in India is likely to be similar in China as well, which is rapidly building factories across the South and South East part of the country.  That means that more products have to be transported by rail and by truck to get to the ports before they can then be shipped to America and Europe where they must be shipped again.

This almost continuous freight cycle is going to have a magnifying impact on the cost of products that on the surface will not be directly apparent to American buyers that only see the most recent freight charges on the bill.  For companies that have the reach into their Chinese partners books and costs, the decision to move some manufacturing out of China and re-localize it may become more urgent.  In fact, Toyota has been making a number of moves to establish additional US plants to make cars closer to the areas where they will be sold.

We could see a similar trend in other products from Consumer Electronics to consumer goods to inflatable boats or sporting goods even.  Labor intensive products such as textiles and clothing which may not need to be staged and worked on in multiple locations might remain strong built outside of the US where labor rates may still compensate for extremely high fuel rates.

Perspective on Business Styles Contrasting UPS and Fed Ex

In case you missed the article in Forbes this month by Ruthie Ackerman titled "Big Brown's Logistics Business Flowing Black," I highly recommend it.  It does less to paint a picture of UPS's growth or improvement in finances than the title implies. 

However, it does provide in the background of the article some very good perspective on the two different business models employed by UPS and its sometimes rival Fed Ex.

Fed Ex's model is to be the perfectionists of delivering small packages overnight.  They work to integrate with other best in class partners for other services including logistics, warehousing, reverse logistics and more.

UPS on the other hand works to be a logistical jack of all trades providing both warehousing, logistics, reverse logistics and repair services to add value for its customers.

The differences between the two customers actually provide a good example to potential business partners that are looking to make the right choice between the two.

The different approaches tend to differentiate the two delivery companies, making UPS more attractive to companies looking to ship bigger, heavier shipments around the globe and those that want to outsource their supply chains, while FedEx does better with companies that ship small pieces that don't weigh as much, such as semiconductors. The strategy is likely taking market share from smaller competitors such as UTI, Kuehne + Nagel, Freight Expediters and Panalpina rather than from FedEx.

Forbes

So if you are looking to ship important documents or even silicon wafers, fedex might be a good option, but if you want to send products to be bundled into baby gifts from Mexico to the US, and some of those bundles might end up in odd sizes, and shapes destined for retailers that need to pay up as well, the UPS may be your best bet.

If you are looking to ship truck loads or a large number of pallets at a time via ltl, then neither company may be a good bet for you, but knowing when to choose the right one for your job and having the confidence that you made the right choice, could definitely help you sleep better at night.

Sunday, June 08, 2008

Burton Snowboards Opens West Coast Distribution Center

Burton Snowboard distribution  Burton Snowboard distribution is expanding with a partnership with Menlo Worldwide Logistics in Southern California.

Based in Walnut, Calif., the new distribution center will enable Burton to expand product availability and provide faster fulfillment of orders for its retail customers on the West Coast.

Beginning next month the new facility will handle the distribution of ANON sunglasses, Analog, Gravis, Burton Apparel and Channel Islands non-surfboard product lines. Burton will continue to distribute ANON goggles, Burton outerwear and snowboards from its existing North American and Asian distribution centers.

Burton Snowboards Opens West Coast Distribution Center

Combining logistics of Snowboards with other gear likely to go to similar retail outlets should better enable all parties involved from manufacturers, licensees and the distribution team of Menlo to achieve greater efficiency of scale and save on logistics costs.  It makes more sense than putting snowboards in a warehouse next to computer memory, car parts or fresh produce.

Wednesday, June 04, 2008

FDA issues warning to NM consumers about raw tomatoes - New Mexico Business Weekly:

image
The FDA is issuing a consumer warning against tomatoes in New Mexico and Texas but has not yet issued a recall in relation to Salmonella poisonings.
A recall would not be likely until a strain of product can be linked at which time the FDA will be more aggressive about communicating a recall. Until then no press conferences are planned and the microphones, podium and
speaker mount is still locked up in ready reserve.

The FDA is warning residents of New Mexico and Texas to limit consumption of most raw types of tomatoes both purchased and grown at home.  They are specifically recommending that consumers not eat tomatoes with the vine still attached.

The FDA said a salmonellosis outbreak appears to be linked to consumption of raw red plum, red Roma or round red tomatoes, as well as products containing raw red tomatoes. The federal agency recommends limiting consumption to other tomatoes, including cherry, grape and tomatoes sold with the vine still attached, as well as tomatoes grown at home.

From April 23 through June 1, there have been 57 reported cases of salmonellosis caused by Salmonella Saintpaul in New Mexico and Texas, including 17 hospitalizations. Saintpaul is an uncommon type of Salmonella.

FDA issues warning to NM consumers about raw tomatoes

Tuesday, June 03, 2008

Third-party logistics firms Riding High on Economic Down Turn

Many Third party logistics firms that do not own their own trucking firms are doing very well in the US downturn that has yet to move in to recession.  Their efficient operating models are helping them to hold their own and pick up more business from other companies trying to cut costs.

Shares of some of the established third-party logistics companies like C.H. Robinson Worldwide Inc (CHRW.O: Quote, Profile, Research) and Expeditors International (EXPD.O: Quote, Profile, Research) have been trading around their lifetime highs.

Analysts believe specific third-party logistics providers will remain attractive not only because they are immune to rising fuel prices, but also because they are steadily grabbing market share from companies that have their own carriers.

Third-party logistics firms escape slowing economy | Special Coverage | Reuters

 

One of the keys to success here seems to be the lack of vertical integration with trucking firms owned internally.  Firms that do own their own trucking groups are hurting as oil prices continue to rise, and they are losing money from oil as they simultaneously try to stop the flow of business to third party logistics groups that are taking the baby along with the bath water right out of the glass sink that bathe them to nurture a business that would otherwise seize up.

Oakmont plans 849,000-sq.-ft. Distribution center in Jacksonville

Oakmont Industrial Group is working to meet demand for warehousing in the Jacksonville area, which expects increase Asian shipping to a port and market that has relatively low vacancy rates for warehousing and storage.

Oakmont Industrial Group paid more than $10 million for the New Berlin Commerce Park in April. It plans to break ground in September on NorthPoint Logistics Center, which will include more than 200 dock-high doors and four drive-in doors with ramps.

The distribution center will be 2.5 miles from the future Mitsui O.S.K. Lines Ltd. container terminal and 3.5 miles from the Blount Island Marine Terminal. The arrival of Mitsui to the Jacksonville market and the planned addition of another Asian shipper, Hanjin Shipping Co. Ltd., made Jacksonville an attractive market for Oakmont to enter.

Oakmont plans 849,000-sq.-ft. distribution center - Jacksonville Business Journal:

Construction at regional ports around the South East has been booming for yeas and despite the real estate correction and possible oncoming recession shows no sign of letting up as Asian manufactures ship and deliver everything from tooth paste to weight benches to meet American demand.