Global Logistics – November 2010

Heineken Tests Beer Float

Heineken’s business is all about flow—from the brewery to the beer tap, and all logistics touches in between. Thanks to the new Alpherium inland container terminal in Alphen aan den Rijn, Netherlands, the beverage manufacturer’s supply chain flows a whole lot smoother.

Heineken now ships export containers from its Zoeterwoude brewery to the United States via barge service between Alpherium and the Port of Rotterdam. The company expects to eliminate 100,000 truck moves annually by transporting about 200 containers a day by barge.

Prior to using the inland water system, Heineken would truck 70 percent of its shipments to Rotterdam, with the remainder going to Antwerp. Since the introduction of the Alpherium intermodal connection, road haulage distances between the brewery and Rotterdam have been cut in half. Moving forward, water transportation will replace 95 percent of road movements.

As energy costs and road congestion threaten transport efficiency and economy in heavily trafficked corridors surrounding Europe’s low country ports, freight routings through a well-developed inland water system are a welcome option. Apart from adding capacity to the system, Heineken expects to cut CO2 emissions by 35 percent, and barge transport is roughly three times more energy efficient than motor freight.

Fighting Piracy on the High Seas

Like a tale out of the golden age of piracy, merchant traders are circling their ships to defend against rampaging buccaneers and protect their treasures. The world’s three largest container shipping companies are rallying to fight against Somali pirates terrorizing the Gulf of Aden and the Indian Ocean. CMA CGM, MSC, and Maersk Line have agreed to share information on safety measures, piracy policies, and procedures in areas where Somali pirates continue to attack and hijack vessels.

“The aim of our partnership is to have a consensus on the issue of piracy and to be able to trade without special protection as we do in most parts of the world,” says CMA CGM spokesperson Catherine des Arcis in an interview with Inbound Logistics.

“We share individual procedures and policies, but do not hold the same opinion on all measures— for example, the use of armed guards in connection with piracy. But this does not stand in the way of us sharing knowledge about security measures or raising awareness about the piracy challenges we face as an industry,” she says.

CMA CGM and the other carriers are also engaging governments to fight piracy by establishing a naval presence in the Gulf of Aden and pursuing appropriate legal frameworks to ensure pirates are prosecuted and held responsible for their crimes.

“The root causes of this problem cannot be addressed overnight,” explains des Arcis. “Therefore, it is imperative that the naval forces have a strong and dynamic mandate to match the constantly changing situation in the area. It is also vital that acts of piracy do not go unpunished, which is why appropriate legal frameworks for prosecuting pirates are necessary.”

Coronating Emirates’ Logistics Corridor

The United Arab Emirates has a reputation for architectural grandeur, and its transportation and logistics infrastructure is no less awe-inspiring. Emirate officials recently cut the ribbon on the Dubai Logistics Corridor, a transportation gateway that links ocean, air, and land modes over an area spanning 77 square miles —roughly the size of Cleveland.

The corridor includes Jebel Ali Port, the sixth-largest container port in the world; Jebel Ali Free Zone, host to more than 6,500 companies; and Dubai World Central, home to Al Maktoum International Airport, which will be the world’s largest airport when completed.

The debut of the Emirates’ premier transportation and logistics portal cements the Middle East region’s status as a global distribution hub. The logistics corridor brings together all the components necessary to create a multimodal logistics platform, facilitating increased and more efficient trade flows into and through the region.

One key to the corridor’s success is the improvement of sea-to-air cargo flows by eliminating the processes of exit and entry from one zone to another, including double customs inspections. Officials expect the corridor’s opening to attract even further foreign investment and economic development, which already represents more than 25 percent of Dubai’s GDP.

PepsiCo Grows Sustainable Spuds

Amid recent news that Walmart and H&M are exploring efforts to green their supply chains at the point of origin, PepsiCo UK and Ireland announced plans to cut carbon emissions and water usage among British and Irish farm suppliers by 50 percent over the next five years.

PepsiCo is a major buyer of potatoes, oats, and fruit. Since switching to 100 percent British-grown potatoes in 2007 for use in its Walkers potato chips brand, PepsiCo has become the largest purchaser of spuds in the region.

Under the initiative, local farmers will have access to i-crop precision farming technology. This new Web-based crop management tool, developed in conjunction with Cambridge University, allows growers to track harvest inputs and outputs, and accurately calculate water use and carbon emissions. The company is also piloting low-carbon fertilizers with Spearhead Farms— one of Walkers’ largest suppliers— and plans to replace more than 75 percent of its current potato stock with varieties that will significantly improve farmers’ yields and reduce waste by 2015.

Potato farmers will also be able to use The Cool Farm Tool, a computerized carbon calculator that shows how much CO2 is emitted during each part of the agricultural cycle to help growers understand how much carbon results from different practices.

Land of the Rising Yen

Japanese manufacturing confidence has held steady over the past few months. But as companies contend with the yen’s surge, expectations will likely deteriorate, according to a new Reuters poll.

Still, Japan’s economy shows some signs of realignment as it gradually diversifies beyond core industries such as automotive. Toyota reportedly is looking to push more production offshore; Mexico is a likely expansion target. This comes after the company scaled manufacturing capacity in the United States during the auto industry meltdown and brought more production back to Japan.

More telling, robust air cargo volumes between Japan and Europe reflect shifts in demand from the country’s manufacturing industry. For example, Lufthansa Cargo recently expanded services to and from Japan, boosting flights to 12 times a week, doubling its existing frequencies. The electronics, entertainment, automotive, and optical and photographic industries produce the majority of goods flown to Europe. But the volume of solar technology products and components transported by air has also increased.

Taiwan Targets Logistics

Taiwan is set to become an Asia-Pacific logistics hub, thanks to a US $3.27-billion global logistics development plan recently approved under the joint auspices of the Council for Economic Planning and Development, Ministry of Economic Affairs, Ministry of Finance, and Ministry of Transportation and Communications.

Beginning in 2010, the three-year project aims to sharpen the country’s economic competitiveness by upgrading airport and harbor infrastructure, boosting Customs clearance efficiency, and promoting cross-border cooperation.

Opportunities brought about by the Economic Cooperation Framework Agreement with China and expanding cross-strait links make strengthening logistics services a must for Taiwanese companies looking to carve a niche in the global market. The development plan also aims to help Taiwan move up in the World Bank’s Logistics Performance Index. In 2010, Taiwan ranked 20th out of 155 economies.