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Showing posts from November, 2007

The Inspection Chimera

The US Congress has mandated that all Containers be tested for radiation prior to dispatch for export to the US by 2012. Many in Congress have advocated 100% inspections of all Containers bound for the US, for all threats. None of this makes any sense nor will it ever be realized. 100% inspections of Containers for any threat will drive cost exponentially and bring trade to a halt while not markedly improving US safety. Calls for such stringent inspections is political pandering at its worst, insulting to the trade community and to the American voter. The technology to inspect is flawed and the process of inspecting every container will impede trade. No one denies that the US (and EU and Asia) needs to protect itself and that protecting global trade is critical. Nor dose anyone in the Trade Community discount the need to improve the security of ocean Containers. The debate is not about the need, but about the how. Knowledgeable people in the Customs and the Trade Community know that

Networked Supply Chains Require Better Visibility

As manufactures and retailers increasingly depend on extended rosters of sourcing companies, the resulting networked supply chain requires improved visibility. Importers are using multiple sourcing vendors to improve their ability to respond to market demand and opportunities. With this increased sourcing agility comes the increased risk of delivery failure due to a supply chain disruption and, concurrently, the increased importance of visibility into each step of the supply chain. The ability to in real time identify the location and status of the sourced goods gives the importer the ability to fine tune its distribution channels, its inventory management and its ability to fulfill commitments to its end users. The ability to real time monitor the status of goods requires a combination of container based technology, back-end business applications and an extended network of logistics fulfillment partners. In response to this emerging demand, many companies are offering RFID, GSM and si

Compliance with regulations requires visibility

In response to the growth of global trade, as our economy is more dependent on the global trade, it is more vulnerable to threats and disruptions caused by increasing terrorism and differing quality standards. As a result, customs, regulatory and public safety officials have imposed new and complex regulations on trade fulfilment; materials transit management, financial controls and stricter reporting (such as US customs introduced the 24 hour advance manifest rule). Compliance with these regulations requires end-to-end visibility, accurate and timely data capture, custody audit trails and effective control of traders’ global supply chain. As an example: Customs tariffs remain a critical revenue source. In the EU, Excise fraud for alcohol amounts to €1.5B yearly, or approximately 8% of total excise receipts on alcoholic beverages, and VAT fraud is estimated to be 10% of VAT receipts.With such a large exposure, customs around the globe are demanding real-time reliable end to end data. I

Greater Globalization with tighter control

Globalization is accelerating at a phenomenal rate. Global trade is projected to grow at 10% plus, year over year for the foreseeable future. Businesses in the EU and US are increasing their investment in manufacturing and sourcing offshore. This trend raises critical challenges for international supply chain, quality control, traceability and logistics management. Off shore sourcing provides lower cost, higher agility and greater performance advantages. At the same time, considerations on these advantages have to be balanced against higher logistics costs, supply chain fulfilment and supplier management risks. Many sourcing strategies underestimate the magnitude of the hidden costs of a longer international supply chain, including increased transaction cost and complexity, reduced flexibility, potential lost gross margin from delivery delays and cargo loss, resulting in production delays and or missed sales. As an example: The trade thumb rule indicates 3% more container traffic volum