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The Official Journal of The Logistics & Supply ChainManagement Society

SEPTEMBER/OCTOBER 2017this issue

ACHIEVING THE RIGHT BALANCE & LEVERAGING ON DEFENSIVE STRATEGIES 29

ONE BELT ONE ROAD – OPPORTUNITIES AND RISKS FOR SINGAPORE 22

LATEST MERGER AND ACQUISITIONS NEWS AND LISTINGS 19

AVERTING A HUMAN CAPITAL CRISIS IN LOGISTICS AND SUPPLY CHAIN MANAGEMENT 32

INNOVATIVE APPLICATIONS OF TECHNOLOGY IN INTERNATIONAL TRANSPORT & LOGISTICS 35

One Belt One Road

Opportunities and Risks for Singapore

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Feature Articles22 One Belt One Road – Opportunities and Risks for Singapore29 Achieving the Right Balance & Leveraging on Defensive Strategies32 Averting A Human Capital Crisis in Logistics and Supply Chain Management35 Innovative Applications of Technology in International Transport & Logistics

Contents From the Editor 04 A Word From the President 06 Contributors 08 Air News 10 Maritime News 12 Logistics News 14 Supply Chain News 16

E-Commerce/Technology 18Market Moves 19

Events 39

32

35

29

22Contents Page

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4 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | FROM THE EDITOR

Dear Readers,

I spent the last 3 weeks of September in London. During which I used quite extensively the railway and underground systems. Apart from some symbolic protests, I met with hardly any delays in my arrival times to destinations.

I travelled the networks at different times of the day and on different days of the week – the results were consistent. Whilst on the trains, I thought of the huge complexity involved in managing the various networks. From Monday to Friday millions of business people were moved to and from their work locations. On the week-ends thousands of people were moved for leisure and holidays.

I thought, what if I was the Supply Chain manager responsible for these networks, where would I begin? When you think about it, a railway network is a massive people & cargo supply chain. It involves infrastructure management & maintenance, planning & scheduling, operating processes, timetables & service schedules, signaling systems, IT structures, suppliers, people who are also customers, with the many variables to trip the system like – weather, unforeseen outages, breakdowns, delays & the ever new challenge of sustaining safety & security of millions of people & assets!

These supply chains are the oldest in the world. They would have also been the ones to pioneer breakthroughs in technology, with probably great resistance. The results we see however, are on-time services, faster delivery times for passengers with up-to-date equipment to serve new age transportation links.

Why I do choose to talk about people supply chains and network businesses?

…..what can we learn from complex “people supply chains”?

from the editor

The first observation, is because these supply chains are also exposed to the same risks, vulnerabilities, people dependencies and disruptive technologies to those of commercial supply chains. Yet they successful manage thousands of routine processes.

The second observation, is that the challenge of change and adoption of technology has been more difficult to deploy. Yet once deployed, the results are self-evident.

The third observation, is that these supply chains could not survive without robust technology systems, operating procesess and discipline of execution. Any failures in the key areas would result in major breakdowns with dire consequences.

I am not suggesting we emulate rail, bus and airline supply chains, but learning how the high complexities are managed, could help improve our supply chain robustness.

Some food for thought – there are always some with bigger challenges than Ours!

In this month’s issue, the featured articles by Raymon Krishnan on One-Belt-One-Road (OBOR), Averting A Human Capital Crisis in Logistics and Supply Chain Management by Kim Winter and a look at Balance & Defensive Strategues - Risks in the supply Chain by yours truly, make very intersting reading into the challenges of our industry.

As usual I look forward to receiving your feedback at [email protected] and even publishing an article of yours.

Joe LombardoEditor in Chief

A TRAGIC EARTHQUAKEIN GREECE; DEXIONDONATED 20,000FTOF SLOTTED ANGLEFOR A PROTOTYPE HOUSE

PRODUCT EXPANSIONS INTO:

HEAVY DUTY PALLETRACKING THROUGH THE ICONIC KEYLOCK RANGE

MAXI BINS

IMPEX SHELVING RANGE

ESTABLISHED AUSTRALIANOPERATIONS IN

SILVERWATER, NSW

CONSTRUCTED THEMAIN SCOREBOARDAT THE WINTER OLYMPICS SKISTADIUM AT CORTINAD’AMPEZZO, ITALY

TO OFFER ITS CLIENTS A FULL

SIGNED JOINT BUSINESS DEVELOPMENTPARTNERSHIP WITH UNILEVER GLOBAL

LAUNCHED SPEEDLOCK PALLET RACKING RANGE

ICONIC PROJECTS:

KONG’S LARGEST LOGISTICS WAREHOUSE

SISTEMA NZ, THE COUNTRY’S MOST ADVANCED & INTEGRATED WAREHOUSE SYSTEM

REGISTERED AS A COMPANY

1937 1947

STARTED PRODUCING SLOTTED ANGLEIN UK

HAMILTON PERRYLICENSED TO SELLDEXION IN NEW ZEALAND

1950 1953

1956

1960s& 70s

ENTERED MALAYSIA UNDER LICENSE

WITH DIETHELM MALAYSIA SDN BHD

MAJOR PRODUCT LAUNCHES OF CONVEYORS, RAISED STORAGE AREAS & TOOL CABINETS

ICONIC PROJECTS:

ORIGINAL & FIRST FRANKLINS WAREHOUSE

FIRST COLES DCS

WELLA 80FT HIGH RISE WAREHOUSE, DEXION’S TALLEST IN THIS PERIOD

1980s

ICONIC PROJECTS:

WOOLWORTHSAUTOMATED DCS IN MINCHINBURY& HUME

ARNOTTS BISCUITSAUTOMATED WAREHOUSE IN SYDNEY

LAUNCHED PICK TOLIGHT & THE DEXIONREAL-TIME DISTRIBUTIONSYSTEM

DEXION SUPPLYCENTRES ESTABLISHED

1990s2000s

ICONIC PROJECTS:

NATIONAL LIBRARY INCANBERRA WITH56KM OFLONGSPAN SHELVING

INTEGRATED DCS FORKIMBERLEY CLARK, ABC TISSUE & KELLOGGS

STATE OF THE ART DCFOR FONTERRA IN NEW ZEALAND

ENTERED CHINA

2006

PURCHASED HAMILTON PERRY & CAPITOL RACKING, COMMENCING DEXION NEW ZEALAND

2007

2017

For over 80 years we have successfully transformed industrial and commercial storage space, underpinned by our values, engineering capabilities and trusted partnerships. From the invention of the slotted angle that shaped an industry; To pioneering innovation, safety leadership and storage efficiency; Creating Australasia’s most expansive supply centre network; And developing an extensive supply chain footprint throughout South East Asia, Middle East & North Africa. We are stronger than never before.

2010s

A TRAGIC EARTHQUAKEIN GREECE; DEXIONDONATED 20,000FTOF SLOTTED ANGLEFOR A PROTOTYPE HOUSE

PRODUCT EXPANSIONS INTO:

HEAVY DUTY PALLETRACKING THROUGH THE ICONIC KEYLOCK RANGE

MAXI BINS

IMPEX SHELVING RANGE

ESTABLISHED AUSTRALIANOPERATIONS IN

SILVERWATER, NSW

CONSTRUCTED THEMAIN SCOREBOARDAT THE WINTER OLYMPICS SKISTADIUM AT CORTINAD’AMPEZZO, ITALY

TO OFFER ITS CLIENTS A FULL

SIGNED JOINT BUSINESS DEVELOPMENTPARTNERSHIP WITH UNILEVER GLOBAL

LAUNCHED SPEEDLOCK PALLET RACKING RANGE

ICONIC PROJECTS:

KONG’S LARGEST LOGISTICS WAREHOUSE

SISTEMA NZ, THE COUNTRY’S MOST ADVANCED & INTEGRATED WAREHOUSE SYSTEM

REGISTERED AS A COMPANY

1937 1947

STARTED PRODUCING SLOTTED ANGLEIN UK

HAMILTON PERRYLICENSED TO SELLDEXION IN NEW ZEALAND

1950 1953

1956

1960s& 70s

ENTERED MALAYSIA UNDER LICENSE

WITH DIETHELM MALAYSIA SDN BHD

MAJOR PRODUCT LAUNCHES OF CONVEYORS, RAISED STORAGE AREAS & TOOL CABINETS

ICONIC PROJECTS:

ORIGINAL & FIRST FRANKLINS WAREHOUSE

FIRST COLES DCS

WELLA 80FT HIGH RISE WAREHOUSE, DEXION’S TALLEST IN THIS PERIOD

1980s

ICONIC PROJECTS:

WOOLWORTHSAUTOMATED DCS IN MINCHINBURY& HUME

ARNOTTS BISCUITSAUTOMATED WAREHOUSE IN SYDNEY

LAUNCHED PICK TOLIGHT & THE DEXIONREAL-TIME DISTRIBUTIONSYSTEM

DEXION SUPPLYCENTRES ESTABLISHED

1990s2000s

ICONIC PROJECTS:

NATIONAL LIBRARY INCANBERRA WITH56KM OFLONGSPAN SHELVING

INTEGRATED DCS FORKIMBERLEY CLARK, ABC TISSUE & KELLOGGS

STATE OF THE ART DCFOR FONTERRA IN NEW ZEALAND

ENTERED CHINA

2006

PURCHASED HAMILTON PERRY & CAPITOL RACKING, COMMENCING DEXION NEW ZEALAND

2007

2017

For over 80 years we have successfully transformed industrial and commercial storage space, underpinned by our values, engineering capabilities and trusted partnerships. From the invention of the slotted angle that shaped an industry; To pioneering innovation, safety leadership and storage efficiency; Creating Australasia’s most expansive supply centre network; And developing an extensive supply chain footprint throughout South East Asia, Middle East & North Africa. We are stronger than never before.

2010s

6 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | A WORD FROM THE PRESIDENT

a word from the president

Industry 4.0, Blockchain Technology, the Internet of Things and a whole range of other buzzwords are being bandied about the industry. All of these developments will have a significant impact on our industry, in ways I can only imagine – and I look forward to this.

What is disconcerting and perhaps even distracting is the fact that there are some ludicrous ideas being touted as ‘the next big thing’. We had one start-up recently who wanted to use bitcoins to collect payments from shippers who cancelled bookings with carriers and tried to raise $5 million in funding. Thankfully, the industry could separate the wheat from the chaff and these guys only managed to raise ten percent of their target amount.

We also recently met with one of the largest on-line payment providers in the world and these chaps want to implement a payment and document solution that facilitates information and payments across the supply chain. Great idea except for the fact that they think they do not need to first get the nod from local customs and trade authorities in the countries in which they want to operate. The belief is that if they implement such a solution, the governments and the respective authorities in each of these countries will simply accept it. This is wishful thinking if you ask me.

Is this petulance or sheer incompetence? Frankly, I am not sure but as Logisticians we are a skeptical bunch anyways and I am sure that whilst we will continue to keep an eye open for things that could help us improve supply chain performance, we will look at all solutions from every angle and only implement what we are quite certain will work. Unfortunately, there will be distractions along the way.

Being aware of this ‘noise’ in the marketplace was one of the reasons why we set up LogiSYM – to provide a platform for Logisticians and industry partners to learn, share and discuss opportunities as they presented themselves and we hope to continue doing this in the years to come. Our next event will be in Malaysia later this month and I hope to see many of you there!

Raymon Krishnan, FALAPresidentThe Logistics & Supply Chain Management Society

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logisym.indd 1 19/4/2017 8:09:53 AM

Petulance or Incompetence?

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WHO GIVES YOU THE BEST STORAGE SYSTEM SOLUTION?

· Space saving

· Increased efficiency

· Improved ergonomics

· Extra capacity

logisym.indd 1 19/4/2017 8:09:53 AM

8 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | CONTRIBUTORS

PUBLISHER

EDITOR IN CHIEF

EDITOR-AT-LARGE

DIGITAL EDITOR

LAYOUT/GRAPHIC DESIGNER

PRODUCTION

Peter Raven

Joe Lombardo

Raymon Krishnan

Myla Morales

Myla Morales

Ambiguous Designwww.ambiguous.design

COPYRIGHTAll material appearing in LogiSYM Magazine is copyright unless otherwise stated or it may rest with the provider of the supplied material. LogiSYM Magazine takes all care to ensure information is correct at time of printing, but the publisher accepts no responsibility or liability for the accuracy of any information contained in the text or advertisements. Views expressed are not necessarily endorsed by the publisher or editor.

LogiSYM MagazineLevel 15, Langham Place

8 Argyle Street,Mong Kok, Hong Kong

Tel: +852 3958 2313Fax: +852 3958 2300

Email: [email protected]

ADVERTISING Andi BlackwoodEmail: [email protected]: +65 8700 6179

contributors

Dr. Raymon KrishnanPresident

Logistics and Supply Chain Management Society (LSCMS)

Dr. Raymon Krishnan is President of the Logistics and Supply Chain

Management Society and Director of Corporate Advisory at the Asian Trade Centre, Singapore. He has more than

25 years of experience in logistics and supply chain management.

Bhargav Sriganesh Research Assistant

Asian Trade Centre

Bhargav Sriganesh is currently a Research Assistant at the Asian Trade

Centre, Singapore and will be pursuing a Masters in Political Science and

Political Economy at the London School of Economics and Political Science

(LSE). He recently completed his undergraduate studies in International

Politics with a First Class Honours at King’s College, London.

Kim Winter Chief Executive Officer

Logistics Executive Group

The founder of Logistics Executive Group, Kim possesses 35 years of executive leadership experience

spanning Executive Search & Recruitment, Corporate Advisory, Trade

Facilitation, Executive Coaching & Leadership Development, across Supply Chain, Aviation, Maritime, E-Commerce,

F&B, Logistics, FMCG and Retail.

Dr Ferry JieAssociate Professor in Supply Chain and

Logistics ManagementSchool of Business and Law, Edith

Cowan University

Dr Jie is an Associate Professor at School of Business and Law, Edith

Cowan University. Dr Jie has maintained a high quality of research in the areas

of supply chain management and logistics.

Ian L. Burns Teacher – Logistics and International Trade

RMIT University

Ian has engaged businesses throughout Australia in the areas of Logistics, Lean, Retail, Light and Heavy Manufacturing

and Supply Chain. Ian now works at RMIT University as well as other

Education facilitators, using his skills to education future leaders in the field.

Joe LombardoFounder

ESP Consult

Founder of ESP Consult, Joe Lombardo, has advised CEOs on change

management through a supply chain focus. The need-for-change is a very likely and necessary step

for their business development and sustainability. However starting a

journey of transformation within their organisation can be hugely daunting.

9LOGISYM MAGAZINE JANUARY 2016 | AIR NEWS

10 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | AIR NEWS

Qatar Blockade Broadens Horizons for Air PartnerGlobal aviation services group, Air Partner, expects to see first-half pre-tax profits rise to £4m from £3m during the same period last year.

The company reported that its broking division, comprising aircraft charter and remarketing, "performed well across all product lines" during the first half, while the consulting and training division is delivering solid results with an "encouraging pipeline of opportunities to be secured in the second half of the financial year".

Investment bank Liberium noted that the freight division had performed

well, albeit against a weak first-half 2016. It further stated, "The blockade of Qatar by several of its neighbours has created new opportunities for air freight to bypass surface transport alternatives that are now closed.”

Gerald Khoo of Liberum said: “Air Partner’s strong start to the year has continued. All parts of the group have performed well.

"As ever, visibility for the broking divisions remains limited, although the Consulting & Training division has an encouraging pipeline for [the second half ]."

Looking ahead, the company said it would continue to seek out acquisitions to help grow the company.

"We are on a journey of transformation, with the clear objective to become a more balanced business, with two market leading divisions - Broking and Consulting & Training - providing exceptional service and value to our customers globally and delivering high quality and increasingly visible earnings to our shareholders," said Khoo.

Qatar Airways Chief Executive Elected Chairman of IATA’s BoGQatar Airways Group chief executive, His Excellency Mr. Akbar Al Baker, has been elected Chairman of the Board of Governors (BoG) of the International Air Transport Association (IATA), effective June 2018.

The rotating one-year term will commence at the end of IATA’s 2018 annual general meeting (AGM) in Sydney and will continue until the end of its 2019 AGM. H.E. Mr. Al Baker will succeed current IATA BoG Chairman Mr. Goh Choon Phong, chief executive officer of Singapore Airlines.

H.E. Mr. Al Baker said: “I am honoured to have been chosen by my fellow board members to head this important body, at a time when the industry faces numerous challenges on a multitude of levels. To represent and lead the IATA Board of Governors is a tremendous privilege, and I am grateful for the opportunity to represent an industry that plays such a vital role in the global economy.

“For more than two decades I have lived and breathed aviation, and I look forward to working alongside the Board of Governors to champion

passenger rights and improve security standards across the industry, as well as continuing to promote the rights of freedom of flight for all.”

IATA represents some 275 airlines comprising 83 per cent of global air traffic. The election of H.E. Mr. Al Baker to this prestigious post is a clear recognition of the leading role that he plays in a dynamic and highly competitive industry.

H.E. Mr. Al Baker is one of the most recognizable figures in international aviation. His vision and commitment enabled the development of Qatar Airways from a small regional carrier into a major global airline in a span of just 20 years. Under his leadership, Qatar Airways has become one of the world’s most highly-respected airlines, competing on a scale very few airlines achieve.

11LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | AIR NEWS

Photo Courtesy: Emirates

Emirates SkyCargo Launches New Temperature Protection Solution

Air cargo extends agreement with DuPont to expand cold chain transportations solutions

As part of its endeavour to offer customers with a wide range of innovative cool chain temperature solutions, Emirates SkyCargo, the world’s largest cargo airline is rolling out a new white cover solution developed in collaboration with DuPont. Featuring DuPont’s Tyvek® Xtreme™ W50 material, the new White Cover Xtreme will offer enhanced protection for temperature sensitive cargo in hot, cold and wet weather conditions.

The collaboration between Emirates SkyCargo and DuPont on the new White Cover Xtreme is part of an existing agreement between the two companies to develop new temperature protection solutions, in particular thermal covers, for the air

cargo industry. The agreement was renewed for an additional two years in May this year.

Tyvek® Xtreme™ W50 builds on DuPont’s patented Tyvek® high density polyethylene material used in Emirates SkyCargo’s White Cover and White Cover Advanced solutions to offer more robust protection in changing and extreme weather conditions. The new triple layered White Cover Xtreme acts as a shield reflecting solar heat when temperatures are high and as a barrier for conduction preventing heat from escaping when temperatures are low thereby helping maintain cargo internally at the right temperature. White Cover Xtreme is also breathable, thus acting as a holistic solution for high level cargo protection through extreme weather throughout the year. White Cover Xtreme is the latest innovation in the ‘White Cover’ line-up to be offered by Emirates SkyCargo through its partnership with DuPont.

White Cover is primarily used for protecting perishables such as fruits and vegetables having a higher temperature tolerance, whereas ‘White Cover Advanced’ is used for securing packaged pharmaceuticals shipments which are more susceptible to increase in heat.

Emirates SkyCargo is the first air cargo carrier globally to be introducing DuPont’s Tyvek® Xtreme™ W50 material in its White Cover protection solutions focused on ground handling. Working together with the world’s leading air cargo carrier with a global network of over 155 destinations, DuPont gets critical feedback to refine the research and development for new products & solution in cargo cool chain. The two companies worked extensively on ground trials for White Cover Xtreme and roll out for customers will begin in late August 2017.

12 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | MARITIME NEWS12

DP World Expands Indonesian Port InvolvementDP World and the Indonesian government have signed an agreement for the port operator to advice on the development of the Kuala Tanjung greenfield port and logistics zone and Belawan port in North Sumatra. DP World will share its expertise and experience in increasing efficiencies, training and development for employees and developing multi-modal transport hubs as part of the Technical Assistance Contract.

The agreement was signed by DP World group executive vice president and chief operating officer Anil Wats and state-owned port operator PT Pelabuhan Indonesia (Pelindo) President Director, Bambang Eka Cahyana. “This partnership highlights Indonesia’s efforts to accelerate development of its ports and trade

infrastructure, something we can help with given our global experience of advising governments on connecting with international markets,” said DP World group chairman and CEO Sultan Ahmed Bin Sulayem.

“In growing our global portfolio of 78 terminals in 40 countries we have become a knowledge exporter with insights on how to link countries with the goods they need,” he added. “Our existing operations at PT Terminal Petikemas Surabaya (TPS) give us an added advantage of understanding local and regional markets and we look forward to working with the Indonesian port authorities on developing international and domestic trade.”

DP World will be reviewing operations

at Belawan port and advising on efficiency improvements, and plans for the Kuala Tanjung greenfield port and logistics zone to reduce costs, which will positively impact prices of goods sold in the local market. The agreement is expected to have a far-reaching positive impact on the social and economic growth of the region.

DP World’s PT Terminal Petikemas Surabaya (TPS) is located on the northern shore of eastern Java along the edge of Madura Strait. TPS is the gateway to Eastern Indonesia delivering world class efficiencies, customer service and operational standards.

Trade between Dubai and Indonesia in the first quarter of 2017 totalled AED 1.45 billion.

Mitsui O.S.K Joins Consortium to Establish Trade Data Sharing Platform Using Blockchain Technology Japanese Shipping company Mitsui O.S.K. Lines has joined a consortium of 14 trade-related companies to develop a trade data sharing platform using blockchain technology. Current trading practices rely heavily on bills of lading and other documents. This creates burdens such as additional time to complete procedures as well as additional labor and operational costs. The program currently under development aims to increase convenience for customers by using

blockchain technology to make information flow more smoothly through corporations and across business categories and making trade-related office procedures swifter and more efficient.

The formation of this consortium is Japan's first initiative on using blockchain technology on trade-related operations. NTT Data Corporation currently serves as an administration office for the

consortium Other parties include major Japanese corporations spanning the banking, logistics, insurance and import/export trade cluster, such as Kawasaki Kisen Kaisha, Marubeni Corporation, The Bank of Tokyo-Mitsubishi UFJ and Toyota Tsusho Corporation. As stated in its "Rolling Plan 2017" management plan, MOL emphasizes closely monitoring trends in ICT technology and takes a proactive stance in introducing cutting-edge technologies.

13LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | MARITIME NEWS

Xiamen’s First Regular China-Europe Freight Train to Boost Economic and Trade with RussiaThe first regular two-way China-Europe freight train connecting China’s southeastern port city of Xiamen, Fujian province with the Russian capital of Moscow has officially opened, reported Yicai Global.

The first train departed Xiamen's Haicang railroad freight yard bound for Moscow on the night of August 25 after undergoing quick customs clearance formalities in Xiamen, China News Agency reported.

The train will travel via Erenhot in China’s northern Inner Mongolia Autonomous Region and Dzamiin-Uud, Mongolia with a total journey of 9,960 kilometers lasting about 13 days. In the initial operation, a train with 40 to 50 carriages will depart from Xiamen approximately every 10 days, and will then embark on a journey back every week starting from October.

Xiamen's total imports and exports to Russia reached USD802.5 million

(CNY5.35 billion) in the first seven months of this year, up 53 percent from last year. The opening of the regular two-way China-Europe freight trains will further expand Xiamen’s import and export trade to Russia, and form a Xiamen-centric logistics hub for trade with the northern giant, data show.

To give full play to the advantages of Xiamen's port and guarantee the smooth operation of China-Europe freight trains, Xiamen Customs has optimized its ‘sea-railway combined transportation’ supervision mode, which has greatly improved the efficiency of customs clearance between maritime ports and railroad ports. Local customs also provides clearance consulting services to guide enterprises on customs clearance.

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HP logisym.pdf 1 6/14/2017 1:41:13 PM

14 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | LOGISTICS NEWS

APL Introduces New Asia Latin America Express 3 Service

Deutsche Post DHL Group Sells Williams Lea Tag to Advent International

APL has announced the addition of a new weekly Asia Latin America Express 3 (AE3-AW3) service that is now connecting China, Hong Kong, Taiwan and other key Asian markets to Mexico and the West Coast South America.

“The Asia Latin America Express 3 service further enhances our Asia-Latin America service coverage, extending it in West Coast South America. Offering the most competitive transit times, the new service underlines APL’s commitment to widen our Latin America presence and take our

Deutsche Post DHL Group further streamlines business portfolio, strengthens its focus on logistics

The leading global mail and logistics company has finalized a deal with its Advent International to sell

Deutsche Post DHL Group, the leading global mail and logistics company, has agreed to sell its UK-headquartered provider of marketing and communications supply chain services, Williams Lea Tag to Advent International (“Advent”). Advent will assume all assets of the Williams Lea Tag business, pending regulatory

shippers’ cargo to places with a focus on speed to market,” said Adeline Franger Chouraqui, APL Head of Latin America.

Designed with the industry’s fastest transit time from Ningbo to Mexico, Panama and Colombia in just 18, 24 and 27 days respectively, the AE3-AW3 service also facilitates market access to the South Chilean market with its port of call at San Vicente. Likewise, westbound shipments on the service from Mexico, Colombia and Panama to Qingdao will require a mere 17, 24 and 26 days respectively.

approval for the deal. The agreement will enable Deutsche Post DHL Group to strengthen its focus on its core logistics service offering. Williams Lea Tag will benefit from Advent’s expertise in building outstanding global businesses, enabling it to explore further development opportunities. The two companies will retain a close business relationship globally.

Andy Dawson, Managing Director at Advent International, said, "We see great future growth potential in Williams Lea Tag on a global scale. Advent will support the company through targeted investment in people, technology and systems and strengthen its customer proposition

The eastbound rotation of the service include Kaohsiung – Hong Kong – Shekou – Nansha – Ningbo – Manzanillo, Mexico – Lazaro Cardenas – Balboa – Buenaventura – Callao – San Antonio – San Vicente – Kaohsiung.Port rotation for the westbound lap include Balboa – Buenaventura – Lazaro Cardenas – Qingdao – Yangshan – Busan.

The first sailing of the eastbound service departed Kaohsiung on 23 August while the westbound leg from Balboa will commence on 22 September.

and help its clients to realise the true potential of their brands. Advent’s expertise in executing complex carve-outs combined with our deep sector experience will ensure William Lea Tag’s transition to an independent company is smooth and will put it on a solid foundation from which it can grow and prosper.”

The operations and assets of Williams Lea Tag are expected to transfer to Advent by the fourth quarter of 2017. The business currently employs over 10,000 people and operates in more than 40 countries globally.

15LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | SUPPLY CHAIN NEWS

IKEA to establish ASEAN Supply Chain Hub in Malaysia

IKEA has announced plans to build a $212mn regional distribution and supply chain centre in Malaysia. The100,000m2 facility will be one of the Group’s 10 largest regional distribution centres globally, capable of managing an inventory of 9,500 stock keeping units worth $1.54bn per annum.

The structure and technology of the state-of-the-art centre will be modeled after IKEA’s biggest regional distribution centre in Germany. The facility will additionally feature integrated ICT systems and automation that will reduce its dependency on labour and significantly increase the efficiency and accuracy of inventory management processes.

The center will cater to 12 retail stores in Southeast Asia upon opening, and 20 stores by 2026.

YB Dato’ Sri Mustapa Mohamed, Minister of International Trade & Industry said, “The project, which resulted from continuous engagements and facilitation by the Malaysian Investment Development Authority, represents a significant

milestone for both IKEA and Malaysia.

“IKEA’s decision of selecting our country as a base to support retailers in Malaysia, Singapore, Thailand, Indonesia, Vietnam, Philippines and India underscores the strategic fit of this country in supporting IKEA’s overall growth strategy in the ASEAN region.” The Malaysian Government has been actively encouraging large local conglomerates to set up their regional establishment in Malaysia through various business models

including the Principal Hub (PH) scheme that allows companies to centralise their global activities such as procurement and distribution.

Such establishments bring along many multiplier effects to the country, ranging from creating high-value jobs, incurring high business spending, intensifying usage of local ancillary services, increasing the flow of foreign exchange as well as strengthening the value chain in targeted industries.Till date, 26 PH projects have been approved since the program was introduced in May 2015.

Over the next 10 years, these projects are poised to contribute $3.93bn (RM16.8bn) in business spending, utilise local ancillary services worth $510mn (RM2.2bn) and generate more than 1,800 high value jobs for Malaysians.

Other renowned companies that the country has attracted through the PH scheme include Honeywell, Super Group, Avago Technologies, Lotte Chemical Titan, Daikin and Sharp.

Photo Courtesy: The Edge Makets

IKEA’s decision of selecting our country as a base to

support retailers in Malaysia, Singapore, Thailand, Indonesia, Vietnam, Philippines and India

underscores the strategic fit of this country in supporting

IKEA’s overall growth strategy in the ASEAN region

YB Dato’ Sri Mustapa MohamedMinister of International Trade &

Industry

“

16 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | SUPPLY CHAIN NEWS

Logistics Executive Group and Sharaf Aviation Academy Announce a Partnership to Deliver First-Class Logistics Training to the Middle East & AfricaLogistics Executive Group and Sharaf Aviation Services Academy have entered into a long-term partnership to deliver specialist supply chain and logistics E-learning and facilitated programs across the MENA region.

For over a decade, Logistics Executive Group has dedicated its expertise to the development and enrichment of -a global community of supply chain and logistics professionals via its Logistics Academy education platform.

Together, Sharaf Aviation Services Academy and Logistics Academy will broaden the range of specialist education that will help organizations in the region to meet the gap in training of their workforce, giving them a ‘best in class’ service.

Over the years, surveys have shown the increasing need for trainings dedicated to the supply chain industry. This partnership with Sharaf Aviation Services Academy will help enable Logistics Executive Group to reach out to more professionals in the MENA region for its Logistics Academy range of logistics and supply chain educational courses.

“Since expanding our Training, Development and Business Coaching services across all business units in the Group, we have seen a sharp increase in demand for specialist expertise from the wide range of courses and programs offered. This is particularly the case in Logistics and Supply Chain Management expertise as the industry experiences further consolidation, change management and business transformation. Also, companies are exploring growth opportunities in emerging markets of the GCC and Africa” said Mr Darryl Judd, Chief Operating Officer for Logistics Executive Group. “The partnership with Sharaf Aviation Services Academy will

help strengthen the- delivery of enhanced training, development and knowledge across the logistics and supply chain markets with specialist courses to upskill, commencing with key programs in August”.

In signing the long-term partnership agreement, Sharaf Aviation Services Academy’s Mr.Jayaram – Managing Director commented that “this partnership will enable the parties to more effectively deliver specialist logistics and supply chain training and business support to industry customer organizations and individuals, drawing on a rich base of experience leveraged across the global reach of Logistics Executive Group offices”.

Sharaf Aviation Academy will offer two of Logistics Academy’s leading supply chain and logistics courses – the Australia Logistics Academy Diploma along with an Advanced Diploma in Logistics Management and CSCMP’s Supply Chain Quick Courses for entry level employees. The range of programs will be progressively expanded to the complete portfolio of 34 courses, complimenting those already offered by Sharaf Academy.

The Australian Logistics Academy will be offered as a fully accredited Diploma and Advanced Diploma;• ALA Diploma in Logistics Management • ALA Advanced Diploma in Logistics & Operations Management.

Both courses upskill professionals with effective technical and management skills, necessary to becoming efficient Logisticians at the supervisory and managerial levels. In addition, the programs aim to provide the essential knowledge and prerequisites needed for the pursuit of further education

in business or logistics management. As part of a flexible workplace training initiative, the ALA Diploma in Logistics Management is available as an online six-module diploma. It incorporates various areas of logistics functions including electives in Purchasing, Warehousing & Distribution, Transportation, Supply Chain Management and Logistics Technology.

The ALA Advanced Diploma in Logistics & Operations Management further develops student learning with a ten-module advanced diploma, incorporating further electives from the various Logistics functions and a Business Research Project to illustrate competency in understanding how all the various components of the Supply Chain fit together. The ALA Advanced Diploma offers an accredited pathway to a Certified Professional Logistician (CPL) certification.

In addition to the ALA Diploma Programs, Sharaf Academy will market and offer Logistics Academy’s CSCMP Quick Courses.

Logistics Academy CSCMP Quick Courses offer immediate, affordable best-in-class training. Consisting of 13 modules designed for entry to mid-level professionals, each course is an instructional web-based videos running between 45 minutes to 75 minutes, with teaching notes coordinating terminology and definitions, test questions, an answer key and providing recommended further studying material depending on topic.

Council of Supply Chain Management Professionals (CSCMP) is the preeminent worldwide professional association dedicated to the advancement and dissemination of research and knowledge on supply chain management.

Both courses are respected and recognised by professionals in the Supply Chain and Logistics Industry worldwide and have seen thousands of professionals enrolled in the programme over the last 17 years. The key advantage for fulltime working students is that both are designed to fit in with fulltime work and hands-on industry experience is considered of great advantage.

ALA and SCMP course offerings can be accessed via the Logistics Executive Group’s Logistics Academy website at: http://www.logisticsexecutive.com/academy/ or by contacting Sharaf Aviation Academy.

17LOGISYM MAGAZINE MAY 2017 | LOGISTICS NEWS

18 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | E-COMMERCE AND TECHNOLOGY NEWS

PIL, PSA and IBM to Innovate Supply Chains Using BlockchainPacific International Lines (PIL), PSA International and IBM Singapore have signed a Memorandum of Understanding (MOU) to explore and trial proof of concept (POC) blockchain-based supply chain business network innovations.

The three parties will work together to explore POCs using technologies like blockchain to achieve better security, efficiency and transparency in regional supply chain business networks, as well as connect to trade finance solutions that can facilitate faster approval and fraud prevention.

Randy Walker, Chairman and CEO of IBM Asia Pacific iterated the benefits of blockchain as an “an immutable, security-rich, highly auditable and transparent shared business network” that can improve transparency, data security, and workflow productivity in complex business networks.

“IBM will leverage the Hyperledger Fabric platform, its Supply Chain Business Network, and expertise from the IBM Center for Blockchain Innovation in Singapore to pioneer projects with the potential for widespread impact across industries in China and Southeast Asia.”

“A more transparent, secure and robust certification system and document flow will benefit the whole supply chain as well as have enormous potential for application in sectors such as food, pharmaceutical and trade finance,”

stated Tan Chong Meng, Group CEO of PSA, which will contribute its expertise and knowledge in managing ports and advancing supply chains to the endeavor.

“Across the global movement of goods and cargo, many activities continue to operate in silos. Blockchain has the potential to reduce inefficiencies and gaps within the supply chain, promote more cost-efficient transactions and facilitate the continued growth in world trade,” the executive added.

PIL aims to contribute its intermodal and shipping industry expertise to the venture, and, in the long term, utilise the technology to enhance its projects, including the Chongqing Connectivity Initiative, the Southern Corridor connecting Western China to

Southeast Asia via Guangxi, as well as Southeast Asia trade corridors, stated Managing Director Two Siong Seng.

Blockchain is a decentralised ledger technology used by a business network to securely exchange digital or physical assets. Each member of the network is granted access to an up- to-date copy of this encrypted ledger so they can read, write and validate transactions.

Once a transaction is validated using a consensus process, it is instantly committed to all ledgers in the network. The net result is faster, private, confidential and auditable business-to-business interactions among suppliers, distributors, financial institutions, regulators or anyone wishing to make a secure exchange. Blockchain creates a permanent, digitised chain of transactions that are grouped in blocks and cannot be altered.

The signing of the MOU took place during the Singapore Regional Business Forum (SRBF), which is organised by the Singapore Business Federation to explore regional cooperation, connectivity and emerging business opportunities in the 21st century Maritime Silk Road.

This year’s event was attended by business leaders, academia, policy makers, diplomats and government officials from Singapore, China and over 40 regional countries.

Across the global movement of goods and cargo, many

activities continue to operate in silos. Blockchain has the potential to reduce inefficiencies and gaps

within the supply chain, promote more cost-efficient

transactions and facilitate the continued growth in

world trade

Tan Chong MengGroup CEO

PSA

“

19LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | MARKET MOVES

Global Mergers and Acquisitions NewsIn conjunction with Logistics Executive Group Corporate Advisorywww.LogisticsExecutive.com

M&A in the transportation and logistics sector continued to pick up steam in Q2 2017 as the sector under goes further consolidation and expansion. PwC in its Q2 Insights publication reported that the sector recorded its highest quarterly deal value in the past three years.

Mega deals in shipping such as the recently announced acquisition of Orient Overseas International

by China’s Cosco Shipping for $6.3 billion and Maersk deposal of the Oil business for US$7.45bn indicates that the shipping sector will continue to undertake structure change and consolidation.

The level of deal making activity in the UK and Eurozone region and the number of cross border deals also hit three year highs in the quarter. Whilst Africa, the Middle East and

specialist sectors F&B, Cold Chain and E-commerce remain in strong demand.

Logistics and Industry property is in high demand from capital investors (REIT and/or PE) in the regions of the Middle East (Dubai and Saudi Arabia) and parts of Asia. This is mainly driven by yield returns.

Maersk agrees to sell oil unit to Total in $7.45 bln dealTotal is buying Maersk Oil in a $7.45 billion deal which the French oil major said would boost its earnings and cash flow, and bolster its dividend prospects. Danish company A.P. Moller-Maersk is selling its Maersk Oil division to Total to focus on other activities including its shipping business. Under the terms of the deal, A.P. Moller Maersk will get $4.95 billion in Total shares and Total will assume $2.5 billion of Maersk Oil's debt. Maersk said it plans to return a "material portion of the value of the received Total S.A. shares" to shareholders in 2018 and 2019 in the form of extraordinary dividend, share buyback or distribution of shares in Total.

Bahri, Bolloré Logistics launch logistics joint ventureBahri has signed an agreement with the international Group Bolloré, to establish a new logistics joint venture between the company and Bolloré Logistics, one of the largest transport and logistics companies in the world. This new cooperation will serve the needs of customers in Saudi Arabia and the wider region. The agreement marks another step of Bahri’s and Bolloré Logistics’ expansion into the fast-growing logistics and supply chain management market within the GCC. Bahri will be the majority stakeholder with a 60% stake in the joint venture, which will operate under the name ‘Bahri Bolloré Logistics’, while Bolloré will own the remaining 40%.

Chinese buyout group wins $11.6 billion bid to buy Global Logistic PropertiesA leading Chinese private equity consortium backed by senior executives from Global Logistic Properties (GLPwon a bid to acquire GLP for US$11.6 billion, marking Asia’s largest private equity buyout in a buoyant sector. GLP, which is Asia’s biggest warehouse operator and boasts a $41 billion portfolio of assets spread across China, Japan, Brazil and the United States, is benefiting from rising demand logistics facilities driven by a boom in e-commerce from clients such as Amazon.com Inc and JD.com Inc. The winning bid of China’s Hopu Investment Management, Hillhouse Capital Group, real estate developer Vanke Group and the financial service investment arm of Bank of China was backed by GLP CEO Ming Mei, which trumped an offer by a Warburg Pincus-led consortium - the only other short-listed bidder. The group is offering S$3.38 in cash per share, representing an 81 percent premium over its 12-month volume weighted average price and a 25 percent premium over its last full trading day before the announcement.

M&A in the transportation and logistics sector continues to pick up steam.

20 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | MARKET MOVES

CH Robinson has acquired Canadian forwarder Milgram & Co CH Robinson has acquired Canadian broker, forwarder and transport operator Milgram & Co for a reported $62m (US$50m). The deal follows a poor second quarter for the US-based 3PL. The firm hopes the integration of Milgram into the global forwarding unit will help build on this success. CH Robinson said the purchase, financed through a revolving credit facility, is expected to be neutral to 2017 earnings, with growth expected next year.

Chelsea Logistics to acquire 100% of Starlite FerriesChelsea Logistics Holdings Corp has announced an agreement to acquire 100 percent of Starlite Ferries Inc., in an effort to boost operations. Publicly-listed CLC said it signed a memorandum of understanding (MOU) to acquire 100 percent of the shares of stocks of Starlite and all its subsidiaries. “The planned acquisition will bring us a step closer to fulfilling our commitment to growth in order to realize more value for our stakeholders, from the investors to the consumers,” CLC chairman Dennis Uy said. The transaction value—while not yet disclosed—should be at least P1 billion as it needs the approval of the Philippine Competition Commission (PCC).

58‘s logistics unit and GOGOVAN merge to take on Asia's intra-city logistics market58 Home, the on-demand service subsidiary of Chinese classifieds giant 58.com, announced that its freight business unit 58 Suyun has entered into a merger with Hong Kong start-up GOGOVAN. Once rivals in the space, the two companies will combine to become the largest intra-city logistics and freight online platform in Asia, according to a statement by 58 Home. 58 Home will hold a majority stake in the combined company, which will continue to be branded as 58 Suyun in China and GOGOVAN outside of China. To date, 58 Suyun has a presence in more than 100 Chinese cities with over one million registered drivers. GOGOVAN has expanded to 14 cities across six Asian countries and regions with 180,000 registered drivers.

M&A INSIDER Merger & Acquisition Deals & Transactions

BUSINESS FOR SALE

A Very Rare Opportunity - Well Established International Project Management Firm in the UAEUnited Arab Emirates USD$7,500,000 (Furniture / Fixtures included)

10+ year old International Project Management firm specialising in the full spectrum of construction and project management services. Strong forward customer contracts (guaranteed backlog of projects for 2017-2019) and stable staff of 60+ employees across the GCC region. Revenues more than USD$6.5m+ and cash-flow of USD$2.25m+. Profit margin 31%+. Financial Audit Reports from one of the big four international auditors are available.

JAFZA based Logistics WarehouseJafza South, Dubai United Arab Emirates Plot size 13,316 m2. Built up area 7,736 m2 USD$4,000,000

JAFZA South based Logistics Warehouse for sale. 4 years old with Civil Defence approvals, EHS approved overhead sprinkler system, four roller shutter doors – three of which have dock levelling facilities, 540 m2 of open plan office accommodation split over two floors and 6.5m Eaves height at lowest point.

Regional contract transport company with locked in customer contracts.Transportation / TruckingUnited Arab EmiratesUSD$40,000,000 - $48,000,000

Regional transportation business with more than 30 years’ profitable track record in the UAE. Excellent growth prospects with new customer contracts locked in and implementation for 2017-2018. Large mixed fleet including more than 60 prime movers and 100+trailers. Good average age of assets and excellent safety management programs.

21LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | MARKET MOVES

MERGERS, ACQUISITIONS & MERGER INTEGRATION STRATEGYIntegrated approach. Accelerated value. Synergy realisation.Logistics Executive Group Mergers and Acquisitions Group combines deep market and industry expertise to create and execute robust M&A, alliances, integration and divestment strategies while mitigating risk.

Across 14 global offices, Logistics Executive Group provide a suite of mergers, acquisitions and merger integration services that can help companies capitalise on today’s opportunities and position themselves for high performance.

Contact one of our experienced principals for more information.

DARRYL [email protected]

(Global)

LARRY [email protected]

(United Kingdom)

PETER [email protected]

(Middle East & Africa)

JOANNE [email protected]

(Australasia)

ED [email protected]

(Europe)

SYDNEY | MELBOURNE | PERTH | SINGAPORE | HONG KONG | SHANGHAI | DUBAI | LONDON | MUMBAI | NEW DELHI | CHENNAI | BANGALORE | NAIROBI

SEEKING TO BUY

BUSINESS FOR SALE

In addition to those listed, Logistics Executive Group has mandates for similar businesses from trade buyers and investors. Please contact us for more information.

Small to Medium size freight forwarding and warehouse business in East AfricaLogistics / Freight ForwardingTarget Geography: East Africa (Kenya / Rwanda / Tanzania)

Seeking small to medium size forwarding business or businesses complete with business licences to be part of a new market entry for a Regional Logistics Services provider. Could be a small regional operator with multiple offices or a single business.

Globally known MNC seeking 3PL, Trucking and Warehousing Assets to support strategic growth and diversification Logistics / Freight Forwarding / Warehousing Target Geographies: United Arab Emirates / United Kingdom / Saudi Arabia / Australia / Russia / Germany / India / Vietnam / Indonesia / China / South America

Publically listed MNC seeking a range of supply chain related assets across its global footprint and to meet strategic initiatives. Annual revenues greater than USD$10mio.

Medium size freight forwarding business in the UAEFreight Forwarding or likeTarget Geography: United Arab Emirates

Regional logistics firm seeking medium size acquisitions in the areas of logistics, warehousing and freight forwarding. Ideally seeking businesses with solid financial history and annual revenues greater than USD$5mio.

Capital RaisingManufacturing: Building MaterialsGermany / UAE Capital Sought: AED100,000,000

Seeking a strategic investment partner for a sustainability / bio-energy. MOU’s in place with major European Distributors.

3PL Logistics Warehousing Business Logistics / Freight ForwardingTarget Geography: United Arab Emirates

Prominent UAE organisation seeking to expand its logistics operation through strategic acquisitions in areas of 3PL warehousing, transportation (trucking) and cold chain. Strong investor in growth.

European 3PL sought by Asian 3PL expanding internationally Logistics / Freight ForwardingTarget Geography: Benelux region / Germany

Seeking solid stand-alone 3PL business in the Benelux region as part of an international expansion being undertaken by a major Asian based 3PL.

ADR Hazardous Chemical Logistics Company3PL / Transportation Chemical Logistics | Spain

Asset-light specialist 3PL company with annual revenues in excess of 8m€ (with a 9% EBITDA margin), 25 employees, two dedicated warehouses (leased) and has all required ADR licences. YoY double digital growth with strong profitability and the company generates material free cash on a consistent basis. The company possesses the main required

licences (registration of Industry No. 3070, Environmental management ISO 14001, Quality Management ISO 9001, SQAS Certificate of Transport and Logistics certificate, Certificate for Animal Feed). The ADR logistics company works for a few high quality chemical manufacturers with whom it has long term contracts that have just been renewed.

Well Established Freight Forwarder Freight Forwarding & Logistics Solutions Provider | United Arab Emirates + Saudi ArabiaUSD$13,000,000

Independent, premium logistics solutions provider in the UAE & Saudi markets. Established in 2007, the company has consistently grown to revenues of USD$30 million (2016) with a workforce of 100+ employees and a stable market position build on an excellent reputation in UAE & KSA. Solid margins and track record of profitability.

22 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | ONE BELT ONE ROAD – OPPORTUNITIES AND RISKS FOR SINGAPORE

One Belt One Road – Opportunities and Risks for Singapore

23LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | ONE BELT ONE ROAD – OPPORTUNITIES AND RISKS FOR SINGAPORE

The “One Belt One Road Initiative” (OBOR) is one of the key geopolitical and strategic developments shaping the world today. Touted as the 21st century Maritime Silk Road, OBOR aims to connect the eastern part of China’s coastal cities with Europe via the Indian Ocean and South China Sea.

OBOR, officially announced by China in 2013, stretches through 65 countries that collectively have 60% of the world’s population. These 65 countries also produce around 33% of global GDP. The China Development Bank has already set aside close to $900 billion to finance 900 projects. Some commentators misguidedly add to the hype by including infrastructure projects that are not part of the OBOR initiative in their analyses. Still, regardless of the monetary figures and actual number of official projects, this trading network will deepen and broaden the country’s strategic engagement with Southeast Asia, Central Asia and Europe. Figure 1 illustrates the maritime trade routes, economic corridors, rail networks and gas pipelines that will connect these key markets.

With OBOR, China is attempting a bold recreation and expansion of the ancient Silk Road. The Silk Road, first established during the Han dynasty in China, consisted of trade routes that linked great commercial cities of the past including Samarkand, Bukhara (Uzbekistan), Merv (Turkmenistan). The Silk Road did not just connect traders. While its key aim was to boost connectivity, ideas pertaining to science, technology, religion and culture also spread. For instance, Buddhism’s birthplace might have been in India but its germination and growth to China was facilitated by the Silk Road.

China’s rise and involvement in the OBOR initiative is inexorable. The Euro-centric model of economic relations that have predominated discussions since the Renaissance and Industrial revolution is beginning to be displaced. In the 1980s, China’s share of world GDP was only 2.7%. However, over the past three decades, China’s share of world GDP has risen to almost 16%. China’s investment in infrastructure has expanded its global footprint. It is currently the largest

trading network with many countries and has already overtaken US GDP in terms of Purchasing Power Parity.

Countries have reacted to OBOR in a varied manner. Some have welcomed it. Others have expressed suspicion that OBOR acts as a pretext for China to dominate the Asia-Pacific and beyond. Regardless, the strategic imperatives for states located along the evolving trade route and potentially affected – directly or indirectly – by OBOR are clear. For a tiny trading nation like Singapore, adapting and leveraging on these changing circumstances are key to long-term prosperity.

So, how is OBOR going to impact Singapore? Leaders in Singapore have taken turns to repeatedly state that there are significant opportunities for Singapore and Singaporean businesses. Nevertheless, there are concerns, in some quarters, that OBOR will adversely affect Singapore, especially if there is a perceived deterioration of diplomatic relations with China due to a variety of reasons (E.g. Singapore speaking out on the recent tribunal ruling on the South China Sea that ruled against China’s “historic rights” claims over vast swaths of sea and conspicuous absence of Prime Minister Lee Hsien Loong at the OBOR summit in May this year).

Many of these fears were blown out of proportion and have been allayed by subsequent diplomatic engagements.

Still, there is a pivotal question that this article seeks to examine further: Can Singapore maintain its maritime dominance amidst the development of OBOR infrastructure projects?

Figure 1: “One Belt One Road” Map (Source: Mercator Institute for China Studies)


Currently, Singapore, as the world’s leading transhipment port and regional oil node, facilitates trade traffic worth almost US$5 trillion. The port, strategically located at the southern tip of the South China Sea, also ships oil in bulk valued at around US$600 billion annually.

Malaysian Port Developments – Threats from across the Causeway?

This section will examine how port developments in Malaysia could impact Singapore’s maritime hub status. Currently, Singapore, as the world’s leading transhipment port and regional oil node, facilitates trade traffic worth almost US$5 trillion. The port, strategically located at the southern tip of the South China Sea, also ships oil in bulk valued at around US$600 billion annually. There has been some mention of how the construction of a new deep-sea port off Malacca (jointly developed by Chinese and Malaysian companies) and extensions in Port Klang will challenge Singapore’s maritime hub status. The US$10 billion

project in Malacca and developments in Port Klang could position Malaysia to be a key element of China’s bold OBOR initiative in Southeast Asia.

The developments of these Malaysian ports raise two primary concerns for Singaporeans. First, if these ports, positioned to the north of Singapore deliver to their full potential, fewer ships will need to pass through Singapore.

Also, the deep-sea ports will have the operational capacity to serve both containerised and bulk cargo using Malaccamax1 vessels. Whilst Malaysian ports have previously tried to rival Singapore, they have not had the generous fiscal backing that

current maritime developments enjoy from Chinese investors. The Chinese, pragmatic and hard-headed as they are, have backed up their promises by opening up the purse strings.

In light of these developments, there are four counter arguments as to why these fears are misplaced. First, it is crucial to probe deeper into why the Chinese are so keen on building a port in Malacca. For China, up to 80% of its energy needs pass through the Straits of Malacca. This over-reliance was characterised as the “Malacca Dilemma” and identified as a strategic issue by former President Hu Jintao fifteen years ago. The Straits of Malacca is a vital sea lane especially since it is patrolled by the US navy and was previously used by Americans to send warships to Taiwan at a time when tensions between China and Taiwan escalated in 1996. While China and the US are searching for a peaceful modus vivendi in the Asia-Pacific, there is no guarantee that the Straits of Malacca will be devoid of flashpoints in future. Hence, while there are crucial strategic interests for China, it is questionable if commercial imperatives are foremost priorities for them. Possibly not. Additionally, a World Bank study commissioned by the Malaysian government concluded that a port in the Western coast of Malaysia is unnecessary especially while operations in Port Klang are currently expanding. Therefore, since there seems to be little commercial value derived from the construction of the Malaccan port, it remains to be seen if the port can rival Singapore’s maritime dominance in the region.

Second, the growth in the size of container ships must be matched by the expansion of ports as well. For instance, when giant ships arrive at ports, there needs to be a complementary infrastructure that

1 Having a length of 333 metres and tonnage of 300,000 DeadweightTonnage (DWT), Malaccamax carriers are often used to ship oil.


enables more storage space, wider distribution channels and enhanced container gantry cranes. Currently, only twenty ports in the world can accommodate 19,000 TEU (Twenty-Foot Equivalent Unit) cargo vessels. There are only two in Southeast Asia. One is in Tanjung Pelapas while the other one is in Singapore. While this does not give reason for Singapore to be complacent or take its place for granted, the port nation enjoys a significant head start over its competitors.

Third, PSA is not resting on its laurels either. The expansion of the Pasir Panjang terminal by 50% will enable it to reach a capacity of 50 million TEUs. PSA is investing S$3.5 billion to use the latest port technology and reduce the manpower needs of managing the port. For instance, there will be automated container yards and unmanned rail-mounted gantry cranes that will support intelligent systems. It will be a state-of-the-art, modern and “smart” port that will stay ahead of the competition. Furthermore, when the next-generation port in

Tuas is completed by 2040, it will be able to handle 65 million TEU of cargo annually. This is twice the capacity that the port is currently handling.

Fourth, the port in Malacca is primarily designed to add oil storage and bunkering facilities. It does not seem to offer container handling services and could thus have a more minimal impact on Singapore’s operations. Furthermore, the planned oil storage capacity of the Malaccan port is 1.5 million cubic metres. Meanwhile, Singapore’s current capacity is 20.5 million cubic metres. Hence, the Malaccan port, due to its capacity constraints and focus on bunkering facilities, rather than on transhipment of cargoes, might not displace Singapore’s maritime dominance.

The port in Malacca is only one of the challenges to Singapore’s hub position. The East Coast Rail Link (ECRL), as shown in Figure 2, will link ports on the Eastern and Western peninsulas of Malaysia. The ECRL, akin to the “Mini Land Bridge” in the US, could alter regional trade routes that are currently used to ply the busy Straits of Malacca and the South China Sea via Singapore. The ECRL will enable China-bound goods from Port Klang to be transferred to Kuantan using freight trains without having to go south to Singapore.

There are commercial factors that could deter the ECRL project from becoming a success. It remains to be seen if the economic value of shipping cargoes to Port Klang, unloading it and then re-transporting it via another railway, unloading it again at Kuantan and reshipping from there will provide a significant cost differential. Also, there are still doubts about the projected estimates of annual freight transport via the ECRL once it is fully built. For instance, the cost

Figure 2: Malaysia’s East Coast Rail Link (Source: Spad.Gov.My, Straits Times Graphics)

The ECRL will enable China-bound goods from Port Klang to be transferred to Kuantan using freight trains without having to go south to Singapore.


justification for the ECRL is premised on the estimate that it will carry almost 50 million tonnes of freight by 2030. By 2035, it is expected to carry 60 million tonnes. However, this could be a significant overestimation since Keretapi Tanah Melayu (KTM) only carries about 6 million tonnes every year on its nationwide network. Furthermore, to complicate matters, McKinsey and Company has estimated that the costs of mega rail projects are 45% more than the projected amount. Meanwhile, expected demand is usually overestimated by two times.

Therefore, if the high expectations of this project are not fulfilled by tangible commercial gains, the ECRL will incur a significant loss that will have to be borne by Malaysian taxpayers paying back Chinese loans.

Competition from Regional Maritime Developments

Even if Singapore staves off competition from Malaysian ports, regional developments could adversely affect Singapore’s pole

position.

First, the Kra Canal has often and repeatedly been labelled as a potential competitor to the Singapore port. As demonstrated in Figure 3, the Kra Canal, if it is ever built, would cut through the Southern Isthmus of Thailand, connecting the Gulf of Thailand with the Andaman Sea. It would provide an alternative to transiting through the Straits of Malacca, thus shortening transit distance for shipments of oil to East Asian countries by 1,200 km. In turn, this can save time and cost.

Previously, China has referred to this project as part of its plans for OBOR.Nevertheless, the commercial considerations for the construction of the Kra canal do not look promising. First, constructing canals like the Suez and Panama were more feasible. They were surrounded by waterbodies that could be connected to form larger canals. Conversely, constructing the Kra canal is significantly more cumbersome and costly since builders have to hew solid mud and rock. Additionally, the benefits accrued are

rather marginal. While the Suez and Panama canals cut travel distances by 8,000km and 5,000km respectively, the distance saved by the construction of a Kra Canal is only slightly more than 1,000km. Therefore, considering that that the benefits due to the construction of the canal are marginal, it remains to be seen if this project will genuinely pose a threat to Singapore’s maritime hub status.

Some commentators have argued that the port in Hambantota, once fully developed, could also pose a challenge to Singapore’s port. Hambantota’s port will be an excellent transshipment waypoint across the Indian Ocean, stretching to the Far East and Europe. The pendulum of trade could, in theory, swing from Africa and South Asia through Sri Lanka into the west coast of Malaysia and up into the hinterland of Southeast East Asia. The construction of the Kra canal could also expedite the movement of goods into the hinterland. Either way, with or without the Kra canal, the change in trading routes could result in ships bypassing Singapore altogether.

In July 2017, a deal was signed between two state firms – the Sri Lanka Ports Authority (SLPA) and China Merchants Port Holdings – to handle the commercial operations of the loss making Hambantota port, located approximately 240km from the South of Colombo. On top of the sale price, the Chinese firm will also invest another $600 million to develop Hambantota port and a 15,000 acre industrial zone. This is a similar modus operandi, albeit on a reduced scale, to what China has done to Piraeus port in Greece, where as much as 60% of China’s exports are shipped through to the rest of Europe. Hambantota could potentially become the gateway to expanding economies in South Asia and Africa.

Figure 3: Kra Canal Route (Source: Picsora)


Dr. Raymon KrishnanPresident

Logistics and Supply Chain Management Society (LSCMS)

Dr. Raymon Krishnan is President of the Logistics and Supply Chain Management Society and Director of Corporate Advisory at the Asian Trade Centre, Singapore. He has more

than 25 years of experience in logistics and supply chain management.

Still, Hambantota could be blighted by the same issues that might affect the Malaccan port. The rationale for the involvement of China in the construction and operation of the port in Hambantota is primarily strategic to counter-balance India’s maritime strength in the South Asian region. Furthermore, the operation of the port is also in the hands of China Merchant Ports Holdings. Since Colombo was not able to repay the loans of around $1.6 billion to China Merchants Ports Holdings, the Hambantota port operators were forced to sell a 70% stake to their counterpart. Therefore, it is unclear if regional developments – construction of Kra Canal and Hambantota port – can dislodge Singapore, considering the thorny issues that they would have to overcome. Meanwhile, Singapore enjoys a healthy head start over its competitors and is poised to capitalise on this.

Conclusion

To conclude, one should be mindful that physical infrastructure alone will not be enough to displace Singapore from its prime position. Recently, Singapore’s Minister for Home Affairs and Law, Mr K Shanmugam said that the Chinese understand infrastructure. Yes, this is true. However, operating a port and making it a success is not just about cranes, gantries and dockyards. This is the “hard” infrastructure. The harder part is to replicate the “soft” infrastructure.

In Singapore, investing in infrastructure has been combined with creating a supply chain ecosystem that develops technological, financial, legal, banking and a myriad of other supporting mechanisms. These capabilities are overlaid with a stable, corruption-free government and competent workforce. In a recent article about

Bhargav SriganeshResearch Assistant

Asian Trade Centre, Singapore

Bhargav Sriganesh is currently a Research Assistant at the Asian Trade Centre, Singapore and will be pursuing a Masters in Political Science and Political Economy at the

London School of Economics and Political Science (LSE). He recently completed his undergraduate studies in International Politics with a First Class Honours at

King’s College, London.

Singapore’s hub status, the author pointed out that these capacities are interlocking and complement each other effectively. When working in tandem, it might be hard for OBOR projects to displace this “soft” infrastructure.

Reinventing and adapting to changing circumstances is a ceaseless

strategic imperative for Singapore. It is notable that the decline of the port in most major cities has often precipitated their fall from grace. In fact, some of the commercial capitals that flourished during the ancient Silk Road period have lost their lustre today. This is a salutary warning that Singapore’s maritime dominance can never be taken for granted.

Reinventing and adapting to changing circumstances is a ceaseless strategic imperative for Singapore.

28 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | ACHIEVING THE RIGHT BALANCE & LEVERAGING ON DEFENSIVE STRATEGIES

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29LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | ACHIEVING THE RIGHT BALANCE & LEVERAGING ON DEFENSIVE STRATEGIES

Achieving the Right Balance & Leveraging on Defensive StrategiesIt is the dream of most Companies to achieve great business success through their highly enabled supply chain strategies. Well defined supply chains with clear focus and adequately resourced enablers are important to attain leadership in achieving the business vision. Today Supply chains

are expected to deliver the best results despite the many challenges and variable conditions that face global Enterprises.

No matter how complex the business strategy maybe, it is usually clear and logical in its design. But the higher

the complexity, the greater will be the difficult in the execution. The challenges of dealing with unforeseen variables and the expected deliverables with short time horizons, is the real challenge of managing dynamic supply chains.

Business leaders define their key priorities that enable them to effectively compete within their market sector. To achieve a sector or market leadership also means developing differentiators between them and their competitors. A strategy of differentiation, whilst creating real competitive advantages, necessary to gain market share, can also create risks and vulnerabilities for an Enterprise.

It is precisely because differentiators are specific to individual companies

30 LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | ACHIEVING THE RIGHT BALANCE & LEVERAGING ON DEFENSIVE STRATEGIES

that the risks and vulnerabilities emerge. The related contributing disruptors are unique to such supply chain characteristics which reflect the business needs. The issue is not the inability to meet the challenges. But it is about understanding the dimensions of risk and exposure that business strategies can create. Even a well defined supply chain model could have limitations to digest such challenges. By virtue of executing such a uniqueness, is where risks need to be identified. And here is where the relevant defensive strategies need to be deployed to achieve the right balance between performance goals and resilience to vulnerabilities.

Supply chain models are well recognised as being the “life blood” of any organisation.

The competitive advantage is derived from the execution of the key business strategies. The sustainability and balance of the supply chain is the resilience of the model in the way risks and exposures are managed. It is therefore not by chance that the risks and vulnerabilities have to be managed with focused defensive strategies. These may be quite different to the normal operational strategies that are managed on a daily basis.

Developing defensive strategies to mitigate vulnerabilities and sustain resilience, whilst maintaining a competitive edge in a dynamic landscape, is not a trivial task.

“The most crucial point is to understand what exactly is it that we are trying defend against?”

Knowing what is required to sustain the resilience that is required to execute the business strategies, is a crucial point. It is often this knowledge

and understanding where we find gaps in the organisation and yet it is a critical area the often gets the least proper attention. The span and vision of control can be made more complex with multi-layered organisations. This is further complexified by a lack of clarity of departmental responsibilities, that tends to also cloud the effectiveness of balance. It is for this reason that organisational governance is necessary to ensure that the right balance is attained between business priorities and resilience effectiveness.

“But who should lead this challenge of balancing the priorities and achieving the necessary protection and robustness?“

As the supply chain represents the life-line of the business’s strategic realisation capabilities, the drivers of the supply chain are focused on high performing business results. In this area there are many enterprise stakeholders who drive, control, support & strive for excellent business results. But there is also another dimension that must be considered. The notion of the shared responsibilities of every stakeholder,

is to give equal priority to address the elements of resilience & defensive mechanisms into the supply chain processes.

In the real world, the lack of an integrated approach to the idea of shared responsibilities is often the cause of the imbalances & exposures to business risk as well as unforeseen vulnerabilities. The benefits of globalisation and trading across international borders is great, but it does not come without a price and specific obligations. For Enterprises large and small, who have harnessed an integrated methodology of process and lower risk exposure, in their supply chain, are undoubtedly in a far better situation.

How can you achieve this tall order and still be competitive across your business’ global markets?

Achieving the right balance and leveraging on the right defensive strategies, should be an embedded Company culture. This can only be achieved when business leaders can achieve a balance in their thinking and adaptive capabilities. A supply

Figure 1

31LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | ACHIEVING THE RIGHT BALANCE & LEVERAGING ON DEFENSIVE STRATEGIES

Joe Lombardo Founder

ESP Consult

Founder of ESP Consult, Joe Lombardo, has advised CEOs on change management through a supply chain focus. The need-for-change is a very likely and necessary

step for their business development and sustainability. However starting a journey of transformation within their organisation can be hugely daunting. This introduction to a transformational journey, illustrates that it is not as complicate or as expensive as it may seem. The rewards and benefits will be significant. ESP

Consult advises on structuring the model to facilitate and successfully implement Adaptive Supply Chain driven organisation. For those involved it has been an

enlightening and motivating experience.

For more information about the about the article and publications to improve your supply chain refer to [email protected]

chain leader and stakeholders have a priority to achieve the best performing results with the resources they have. However this cannot be done at the expense of creating exposures and vulnerabilities to parts or the whole of the organisation.

As such the supply chain leaders and stakeholders must recognise that sharing the responsibility for reducing risks & vulnerabilities is very important. This recognition is not only for their area of functional responsibility but also to related functions to which they can also contribute and benefit the supply chain.

The methodology to achieve such balances are not complex. Good communications is by far a key enabler. But a more structured approach is based on key business process mapping and review. The illustration in figure 1, shows an example of some of the processes, functions and relationships in a typical core supply chain business model. This is a very effective tool that highlights and identifies the critical risks and vulnerabilities in the supply chain. This is illustrated in figure 2 (highlights in salmon colour).

Such a collaborative approach not only addresses the problem in a direct manner but also eliminates internal process collisions and conflicts. The Business Process Mapping methodology, considers all the enterprises functions and processes – this includes the internal as well as the external.

Risks and Vulnerabilities can emerge from both internal and external sources. The model will include 3rd party suppliers, outsourced services and outside locations that support internal functions like proximity Hubs

& logistics support. Identifying alone is not enough, there needs to be continuous review, updates of process mapping and updates of mitigation plans (defensive strategies) to effectively achieve the right balance.

A supply chain driven organisation establishes the platform that links and integrates many business functions

Figure 2

and people in the organisation. This has a powerful effect to create a more coherent and aligned operating structure that optimises resources and delivers better performance. But this does not happen by itself, there needs to be strong leadership, competency and collaboration to drive and sustain this business platform.

32LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | AVERTING A HUMAN CAPITAL CRISIS IN LOGISTICS AND SUPPLY CHAIN MANAGEMENT

Averting a Human Capital Crisis in Logistics and Supply Chain ManagementAs technological innovation and automation takes centre stage in the world of logistics, there is one crucial component of success in the industry that is alarmingly in danger of being overlooked. The first of its kind investigation on the effectiveness and competencies of human capital in logistics and supply chain

management by the World Bank has revealed that the shortage of qualified labour is one of the key constraints facing the sector in both developed and developing countries. Moreover, there is little attention being paid to the strategic management of human resources necessary for effective recruitment, retention and training

of staff. Authored by experienced academics at the Kühne Logistics University in Hamburg, Germany, the report notes that between 2001 and 2005, HRM issues were discussed in less than 5% of the articles published in the three leading logistics journals.

33LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | AVERTING A HUMAN CAPITAL CRISIS IN

LOGISTICS AND SUPPLY CHAIN MANAGEMENT

The research, which utilized data from an online survey of logistics companies worldwide as well the World Bank Logistics Performance Index from 2016, confirmed that the shortage pervades all occupational levels in the industry. However, there seems to be little uncertainty about the factors that contribute to this shortage. The lack of prestige and perceived lower status of operational logistics workers seems to be an almost universal phenomenon, making it difficult for the sector to attract the cream of the crop in terms of talent. Moreover, this poor cultural perception also affects the retention and performance of existing workers, who seem to demonstrate lack of discipline, motivation, attention to detail and commitment to learning necessary for consistently effective performance.

At the administrative and operational (‘blue-collar’) level, survey results indicate that staff tend to be particularly lacking in their knowledge and receptiveness to training. Most interestingly and pressingly, however, the report highlights that the lack of personal skills, as well as leadership and management skills is especially acute on the managerial and supervisory levels. Since staff at these levels are often recruited from the lower rungs based on technical skills and knowledge, they often lack the training and leadership experience necessary to make strategic decision and long-term plans.

The problem is of special concern to emerging markets with rapidly expanding logistics sectors, and current leaders are aware of it. “The World Bank reports highlights a problem that isn’t necessarily unknown to the industry,” noted Darryl Judd, COO of Logistics Executive. “However, it provides profoundly useful insight into the depth of the

crisis that makes it clear that a more proactive approach to human capital development is integral to meeting year-on-year growth targets for the industry,” he added.

The clear majority of survey participants highlighted recruitment at the managerial level to be the biggest HRM challenge they expect to face in both developed and emerging regions in the future. This is seconded by concerns about the ability for firms to keep salaries and benefits competitive in order to attract the best talent. Succession planning and the provision of adequate training follow.

Based on these findings, the authors of the report discuss numerous potential strategies and solutions to help leaders in the industry cope with these human resource challenges. They urge managers to invest in employee retention through training, the improvement of working conditions, more competitive salaries and benefits as well as defining a clear and lucrative path for career advancement.

They also propose significant adjustments to training endeavours, especially in developing markets, with input from 36 experts in logistics education and training from major world regions who were also interviewed for the project. One of the most important among these is the move away from internal training to a healthier mix of both internal and external resources. While most firms in both emerging and developed regions indicated that they already offer such a mix, evidence suggests that developing countries tend to more frequently opt for internal programs that deviate little from ‘on-the-job’ instruction. Materials, resources and approaches utilized in most training programs also tend to be outdated, and do not focus on preparing employees for the adoption of new technologies that must inevitably be introduced for the business to remain competitive in the current landscape.

However, the quality, accreditation and applicability of external resources must also be carefully gauged before they are utilized for training

They urge managers to invest in employee retention through training, the improvement of working conditions, more competitive salaries and benefits as well as defining a clear and lucrative path for career advancement.

34LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | AVERTING A HUMAN CAPITAL CRISIS IN LOGISTICS AND SUPPLY CHAIN MANAGEMENT

purposes. As is an established best practice in the industry, the researchers encourage managers to seek programs offered by reputed logistics associations, including the Chartered Institute of Logistics and Transport (CILT), European Logistics Association (ELA) and The Association for Operations Management (APICS). Such programs offer the additional benefit of association membership, which can be an effective motivator and also facilitate career development for company employees. Industry associations such as the Logistics Supply Chain Management Society (LSCMS) also offer numerous training and certification programs that are up-to-date and incorporate a wider range of specialist expertise that can be offered through an internal program.

Another increasingly popular avenue for external training is private enterprises that offer tailored programs for a variety of crucial skills and competencies in logistics. An example is Logistics Executive Group’s Logistics Academy, that offers internationally accredited training programs ranging from specialized short courses, certificate based and diploma e-learning products to MBAs in collaboration with reputed partners including the Australian Logistics Academy (ALA), Council of Supply Chain Management Professionals (CSCMP) and SMC University.

While hand-on learning experience can be gathered on-the-job, it can be further facilitated through games and simulations, such as McKinsey’s famed Model Warehouse approach, and even VR technology. Such measures can help business maximize efficiency in the longer run through the prevention of costly mistakes as well as faster gains on worker efficiency. Nonetheless, the upfront cost of investing in such training

endeavours remains debilitating for most firms in emerging markets. This is especially given the dispersed nature of these markets, in that they are often dominated by MSMEs who do not have adequate resources to spare and cannot reap the benefit of economies of scale in the long run. Furthermore, smaller companies are also often bootstrapped to the point where they cannot afford to divert employee time and attention from revenue-generating activities. However, a recent surge in M&A activity in many of these regions, including MENA, China, India and Latin America suggests that these markets are already in the process of responding to these pressures through consolidation.

The rise of international 3PLs also bodes well for addressing the lack of adequately trained staff in the sector. In order to offer specialized services and expertise for various regions, 3PLs already have the incentive, and increasingly, the scale, to set aside relatively generous training budgets for their employees that also prepare employees to adjust to local and environmental factors in different regions. However, since logistics is a “boundary-spanning” activity, human

capital errors and inefficiencies at any point in the supply chain have consequences for the overall performance of the firm. Therefore, firms must be cautious about relying on outsourcing part of their activities to iron out human capital inefficiencies across the entire pipeline of their operations.

Finally, given the crucial role logistics and supply chain management plays in the performance of most economies, the public sector in both developed and developing regions cannot afford to remain detached from the sector’s current and, most likely prolonged, human capital crisis. Among the most useful steps governments could take include establishing coherent regulatory frameworks and competence standards for the sector as well as investing in vocational programs and public-private partnerships that promote training and skill development. In fact, the latter (establishing quality vocational training and apprenticeship programs) is cited as the main factor behind the success of various European countries, including the UK and Germany, in mitigating their human capital crunch.

Kim WinterChief Executive Officer

Logistics Executive Group

The founder of Logistics Executive Group, Kim possesses 35 years of executive leadership experience spanning Executive Search & Recruitment, Corporate

Advisory, Trade Facilitation, Executive Coaching & Leadership Development, across Supply Chain, Aviation, Maritime, E-Commerce, F&B, Logistics, FMCG and Retail.

A professional public speaker and event MC and regular contributor to industry media, Kim is a Director of companies in Australia, Asia, India, and the Middle East

and is the Founder of Australian registered charity Oasis Africa Australia www.oasisafrica.org.au providing freedom from poverty through education to over 8000

orphaned children in Kenya’s slums since 2006.

35LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | INNOVATIVE APPLICATIONS OF TECHNOLOGY IN

INTERNATIONAL TRANSPORT & LOGISTICS

Innovative Applications of Technology in International Transport & LogisticsThe International Transport and Logistics Industry is growing in capability and complexity as a result of the demands that are being placed on it by the globalised economy. The volumes of work, product mix and the sheer scale of modern day operations is increasing daily, and this drives the requirement for more accurate and faster processes to be employed, to meet the demands of an ever increasing population and the need for instant gratification. The development of capabilities utilising the internet, movement and transfer of operational and manufacturing capacity, is resulting in higher customer demand for goods and services, not previously experienced.

36LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | INNOVATIVE APPLICATIONS OF TECHNOLOGY IN INTERNATIONAL TRANSPORT & LOGISTICS

Mr Ian Burns has recently organised a professional seminar on behalf of the Chartered Institute of Logistics and Transport Australia – Victoria (CILTA) – on ‘Innovative Applications of Technology in Transport & Logistics’. Where Industry professionals addressed an audience in the development of IT technology and the uses within the Industry. Among the various discussions and presentations involved the following:• Internet of things • Block chain and;• Autonomous Vehicles

The Internet of things involves the merging of smart technologies with our every-day operations. This is achieved through the deployment of technologies in sensors, readers, transmitters and information technologies. By these applications, Industry has real time data to use in the monitoring of transport and storage conditions and other vital metrics throughout the supply chain.

These technologies include smart pallets that can sense storage location, temperature control conditions and other vital parameters for operational efficiency. This coupled with BlockChain data generation, as well as enhanced interpretation and data interoperability, enables new secure ways to share and analyse information between various stakeholders within the supply chain.

Sharing information and developing business relationships within a

business framework is a challenging concept for a number of companies. This is especially true for those in direct competition. But there seems to be a trend of collaborative working relationships being developed. Successful supply chain management is all about building models and building relationships. The interdependability on various stakeholders throughout the supply chain are imperative to the overall success of the venture. It requires an objective view to the business being conducted that will enrich the quality of the service and productivity of transactions.

Information sharing requires trust and security controls to be developed. However it also requires a mine field of other, more human developed issues such as collaborative working mechanisms. It is crucial that information sharing is in an equal footing and not a tool for leveraging power.

Power is the result of politics and politics is the result of two or more people within a relationship that want to dominate and control the process. Politics is a natural phenomenon and

as with many other aspects of a supply chain operation, this too needs to be recognised and managed. The uptake of new technology into our logistics and supply chain operations has been and always will be influenced by the political will of our company and countries leadership.

The survival of our business operations and the pressure of competition offer a substantial impetus towards accepting the need for urgent change. This in turn will drive the adoption of technologies, the education and training requirements and the financial investments required.

The alignment and full integration of operational requirements within a real-time framework is now being referred to as the Internet of Things. The diagram above (see Figure 1) demonstrates, the capability of the system is to align, track and generate data capture points throughout supply chain operations, whether it be local, national or international. For this to occur it will require system capability guarantees throughout the supply chain and standardised equipment and technologies to be used.

Figure 1: source: http://www.logisticsbureau.com/6-key-supply-chain-and-logistics-trends-to-watch-in-2017/

37LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | INNOVATIVE APPLICATIONS OF TECHNOLOGY IN

INTERNATIONAL TRANSPORT & LOGISTICS

Looking forward, Australia and its international trading partners need to develop our National and International Supply Chain capability, whilst operating within a challenging regional environment.

These challenges include; changing economic relations and power base development in the South East Pacific region. The threat of increasing climate change events such as what we are seeing in the US at the moment with Cyclones, rain events, flooding and earth quakes. Australia’s own varying economic position in light of a fluctuating $US, and operating to develop sustainable business plans that can take the Logistics Industry into the future. Operating sustainably requires a metric focus on the Triple Bottom Line which includes; economy, environment and social aspects.

To assist in the process, a huge amount of research and product development has and is being undertaken around the world. Local examples of this are the development and opening of Victoria International Container Terminal and Port Klang maritime ports that both now have world’s best practice operations and leading technology in their fields.

Some of the practical developments include the development of electric truck technologies that are aimed at deliveries for the ‘Last Mile’ deliveries within our urban environment. We need to do this urgently because as Sophie Vorrath wrote in July 2015: “Australia’s “do-nothing” approach to the uptake of electric vehicles could cost the economy more than $350 million over the next 20 years, at an environmental cost of one million tonnes in added carbon emissions.” “Electric vehicle uptake in Australia has been painfully slow,][ with recent reports suggesting just over 1000

EVs were currently driving Australian roads, representing just 0.01 per cent of the market.”1

Considering this, Australia cannot afford not to get involved in electric fuel cell technologies because as this technology is taken up; not only will it enhance our competitive advantage but also allows us take to take advantage of economies of scale as far as prices are concerned. Interest in Autonomous Vehicles in Australia is developing quickly with large savings in transport costs being forecast and discussed. Some numbers being quoted are that savings of up to 40% per kilometre can be obtained. The implementation of the automated vehicle sector in Australia “is projected to be swift with Government reports predicting that AVs will be introduced by about 2020 and by 2030 they could account for about 30 per cent of light vehicles.

The United States, Japan, South Korea, China, Singapore, the UAE and many member countries of the European Union are moving to ensure the adoption of autonomous technology is not only unhindered but encouraged. The Australian Government, if it is to follow suit, “should initially focus its attention on seven key areas that may present regulatory barriers to the introduction of increasingly automated vehicles including:

1. Australian Design Rules2. Australian Road Rules3. Radio communications licencing and associated transmission of data4. Consumer law and product liability5. International standards for autonomous technology testing6. Privacy laws; and7. Access to suitable Global Navigation Satellite Systems”2

These points are going to present a significant challenge for the Australian political leaders. Considering especially, the time frames being discussed with a roll out of automated vehicles being forecast by 2020.

In Europe, developments for heavy vehicles by one company such as the: German Federal Ministry of Education and Research (BMBF) who are developing an axle mounted module for commercial vehicles, consisting of a motor, gearbox and power electronics. That can be retro-fitted to new technology to existing vehicles.

The combination of these new technologies being developed and IT based solutions, will enhance our sustainability and Triple Bottom line (TBL), will also allow us to integrate our logistics services into a digitally compliant and standardised platform.The rate of change of international competitiveness, complexity of globalised supply chains, coupled with the need for compliance, traceability as well as meeting designed metrics, all influence our daily operations. We therefore need to embrace cut these innovative changes that are being developed.

These developments are both exciting and are also an area of concern. With these changes comes great opportunity to move into a new paradigm. But they also presents risks of disruption, economic change and social issues which include unemployment and employment dislocation and change. The skill requirement for these new technologies presents challenges to education and training providers. Big data, data mining and analysis, block chain and the utilisation of these technologies across borders will generate the need for specialist skills. This is particularly important to

38LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | INNOVATIVE APPLICATIONS OF TECHNOLOGY IN INTERNATIONAL TRANSPORT & LOGISTICS

Ian L. Burns Teacher – Logistics and International Trade

RMIT University

Ian has engaged businesses throughout Australia in the areas of Logistics, Lean, Retail, Light and Heavy Manufacturing and Supply Chain.

Ian now works at RMIT University as well as other Education facilitators, using his skills to education future leaders in the field.

Dr Ferry JieAssociate Professor

School of Business and Law, Edith Cowan University

Dr Jie is an Associate Professor at School of Business and Law, Edith Cowan University. Dr Jie has maintained a high quality of research in the

areas of supply chain management and logistics.

an Industry that already has problems with successional planning and developing the talent for the future.

These technologies are certainly going to move the operations of our business into new and unchartered territory. But to maintain our international competitiveness, these challenges must be met with the vigour and dynamism that matches the people who are designing these tools.

1 http://reneweconomy.com.au/slow-electric-vehicle-uptake-costing-australian-economy-millions-72963/

2 http://www.ntc.gov.au

39LOGISYM MAGAZINE SEPTEMBER/OCTOBER 2017 | EVENTS

LOGISYM MALAYSIA 2017October 24th - 25th, 2017Hilton Petaling Jayawww.logisym.com/events/logisym-malaysia-2017/

3RD MARACAD CONFERENCE & EXPO 2017October 30th - 31st, 2017Sheikh Maktoum Hall, Dubai World Trade Centre, UAEhttps://maracad-uae.comTHE 12TH RESPONSIBLE

SUPPLY CHAIN SUMMIT EUROPEOctober 17th - 18th, 2017Park Plaza Victoria Hotel, London, UKevents.ethicalcorp.com/supplychain/register.php

INDONESIA TRANSPORT, SUPPLY CHAIN AND LOGISTICS (ITSCL)October 10th - 12th, 2017Jakarta, Indonesiawww.transport-supplychain-logistics.co.id

GULFOOD MANUFACTURING 2017October 31st - November 2nd, 2017Dubai World Trade Centrewww.gulfoodmanufacturing.com/

October

EVENTS

SUPPLY CHAIN FACT & FICTION:Tackling Today, Preparing for Tomorrow!

24 - 25 OCTOBER 2017 | Hilton Petaling Jaya

THE 12TH ANNUAL GPCA FORUMNovember 27th - 29th, 2017Dubai, UAEwww.gpcaforum.net

THE 4TH ASIA-PACIFIC 3PL & SUPPLY CHAIN SUMMITNovember 20th - 21st, 2017Novotel Clarke Quay, Singaporehttps://events.eft.com/3pl-asia/

EMERGING AIRPORTS CONFERENCE & EXHIBITIONNovember 29th - 30th, 2017Jeddah, KSAwww.emergingairports.com

SUPPLY CHAIN AND LOGISTICS ARABIANovember 1st - 2nd 2017The Address Hotel, Dubai Mall, UAEwww.sclarabia.com

THE 8TH INTERNATIONAL SAUDI TRANSTEC EXHIBITION & CONFERENCEDecember 5th - 7th, 2017Dhahran International Exhibition Center, Dammam, Kingdom of Saudi Arabiawww.sauditranstec.com

November December

http://www.logisym.com/events/logisym-malaysia-2017/

http://www.logisym.com/events/logisym-malaysia-2017/

40 LOGISYM MAGAZINE JANUARY 2016 | AIR NEWS

One Belt One Road - The Logistics & Supply Chain ...lscms.org/logisym/LogiSYM-2017-SepOct-Issue23.pdf · The Official Journal of The Logistics & Supply Chain Management Society ...

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