Intermodal 2

Supercharging supply chains for growth

Jun 21, 2023 | ,

The pandemic laid bare the critical importance of supply chains and executives tasked with managing them are much more significant figures in their businesses, as continuing success is highly dependent on improving supply chains.

For too many businesses the gap between supply chain planning, and the execution of that plan continues to grow, because the environment has already changed.

The pandemic, Brexit and Ukraine are the most recent examples of external factors having profound impacts on supply chains without warning.

At the same time, customer expectations are evolving, with increasing demands, including rapid delivery times and a growing number that want more focus on sustainability, so they can reduce the environmental impact of their supply chain. 

Supply chain resilience is essential for organisations to overcome the black swan events which are becoming more frequent and severe, and while over 54% of respondents to a CapGemini survey acknowledged that their supply chains have altered significantly in the past two years, only 27% are implementing end- to-end supply-chain transformation.

Businesses that want to thrive against the backdrop of a complex supply chain environment must pivot towards technology that provides end-to-end visibility, with purchase order management and transparency of inventory throughout the supply chain.

Synchronising inventory across all transport modes and locations, with accurate real-time dashboards and reports, provides executives with the data they need to assess and react to supply chain challenges.

Many supply chains have become too long and difficult to manage in an increasingly disrupted world and where once concentration was on scale and lowest transport cost, this generation of supply chains is characterised by resilience, sustainability and a broader definition of value.

To improve the quality and speed of decision making Metro’s MVT platform provides supply chain visibility and control, with the additional benefit of providing transparency to consumers, that products are on schedule and sourced with sustainably assured.

Metro’s supply chain audit embraces every event, process and participant, to uncover opportunities in five specific areas: Efficiency | Existing/new markets | Cost savings | Enhancing quality | Agility.

The audit is designed to add efficiencies, cut costs, increase profit and free up cashflow, by simplifying the end-to-end process. From raising the initial PO, through production, shipment, delivery and receipt to stock, we map the product flows, events and milestones, so that the customer can intercede on an order, at any time through the supply chain process, to SKU level.

Metro’s cloud-based supply chain management platform, MVT, helps our customers remove supply chain risk in challenging economic conditions, by managing their supply chain effectively, while tightening their control over inventory and suppliers. 

MVT helps companies adapt vendor and production strategy, by expanding procurement control and evolving their supply chain to match the future, with PO management, visibility and communication tools that manage and integrate new suppliers into the supply chain.

EMAIL Simon George, Technical Solutions Director, to learn more or arrange a demo.

EV charging

Automotive trends – We are in lockstep 

Jun 21, 2023 | , , ,

In a sign of the growing strategic significance of supply chain management for carmakers, two major manufacturers have appointed chief supply chain officers (CSCO) this month. Their appointments come after the industry has battled disruption to production and supply chains, shortages in semiconductors, and supply and logistics cost and capacity challenges.

The Ford and Renault appointments come as automotive manufacturers increasingly put top priority on efficiency, capacity, quality and digitalisation across their supply chains, with UK car sales recovering from their slump in the pandemic and Ford reclaiming the best-seller title.

Keeping up with demand
New car registrations rose by 16.7% in May, the 10th consecutive month of growth as supply continues to improve. Large fleet registrations continued to drive the growth, up by 36.9%, which has been attributed to greater availability following challenging supply issues in 2022.

British car manufacturing continues its resurgence, with output growing 9.9% in the latest monthly figures and exports up 14.7%, with 80% of UK-made cars being exported

UK car production is up 13.1%, driven by uplift in exports, with the EU the largest market, followed by the US, China and Australia.

The global volume challenges of RoRo PCC and  PTCT services are well-document in the trade press and are likely to remain a serious challenge for several years.

Metro is supporting exports by shipping cars in containers, with significantly lower port to port freight costs, to avoid the long wait for delayed RoRo services, which have seen freight rates spiral due to congestion and shortage of space.

Standard 40’ containers can accommodate two large cars, properly secured and, with a rack, four small vehicles can be loaded which, with container rates falling to new lows, offers massive efficiency gains and costs that are in line with historic RoRo levels.

Digitalisation
David Leich, executive director of global supply chain at General Motors said last year that those working in supply chain faced up to 200 unique global supply chain disruptions a week impacting the delivery of inbound parts and the delivery of finished vehicles, while only 6% of them have full visibility of those supply chains.

To monitor its supply chain for potential risks that could delay or halt shipments JLR is planning to use a combination of Artificial Intelligence, predictive analytics and machine learning in combination with “human intuition”, to help avoid industrial disruption that could affect production and increase costs.

The introduction of the technology, by JLR and other manufacturers, is part of a wider move to digitally enable supply chains, with end-to-end visibility and security.

Metro is increasing use of predictive and AI technology, to collate real-time carrier updates, to maintain accurate vessel ETA’s, data for purchase order management, route optimisation and supply chain visibility. 

We are developing our telematics capability, to offer shippers a much more effective alternative to the data aggregators, who are quite simply compiling data from open APIs and screen scraping historic data. We favour the ‘smart container’ technology that a number of carriers are developing, and are actively involved with UN CEFACT in creating industry standards for sharing this data.

In addition to creating visibility along the supply chain, Metro’s technical solutions team have worked hard to ensure the quality of data and provide a suite of reporting tools that make it easier to interpret and implement actions in a meaningful way.  

Lithium Batteries
Growing demand from consumers and government incentives are driving demand for EVs globally and with more EV models coming out from more brands over the next two or three years, the added growth in battery demand means that manufacturers and supply chain infrastructure will struggle to satisfy demand. 

Bloomberg Intelligence, told Automotive Logistics that while the semiconductor supply constraints are now beginning to ease, battery supply to meet demand will be the next problem, with potential bottlenecks from 2025 for the supply of lithium batteries into electric vehicle (EV) production.

Metro’s automotive teams handle the movement of thousands of EV’s and battery components every month, by all modes of transport including - when appropriate - the use of refrigerated equipment, to maintain ambient temperature levels, for additional safety precautions.

We started developing our Lithium battery logistics platform over six years ago and since then we have invested in the resource to serve this vertical, including training to cover all modes. 

Our Li-ion transportation expertise is increasingly recognised as market-leading, with our automotive team’s manager invited to address the International EV battery conference.

If you would like to learn more about our automotive logistics capability, or to discuss any of the issues raised here handling, please EMAIL Ian Tubbs, Automotive Manager at our Birmingham HQ.

food visibility

Visibility in the food supply chain

Jun 21, 2023 | , ,

For many importers, the underlying problem that prevented them from pivoting their supply chain as the pandemic’s impact became more pervasive was lack of visibility and control upstream. 

The food supply chain has stabilised since the pandemic, but new macro events continue to create disruption, including the war in Ukraine and the cost of living crisis and where there is a lack of visibility, it prevents the timely, proactive action that optimises operations in the face of disruption.

Participants across the food and drink sector still need that greater transparency and control, to ensure an effective, resilient and flexible supply chain is available, whatever challenges arise.

End-to-end visibility removes uncertainty in the supply chain, by providing the wider business with a view of inventory supply upstream and when they can expect to receive particular product batches. 

With clearer visibility and transparency between production, shipping, storage and distribution, it is easier to anticipate any supply shortages or delays, so they can immediately overcome the issue, or update the business, so that alternative sources may be accessed and implications for customers avoided. 

Delivering visibility in the food supply chain

This importer of food products and raw materials is a major international manufacturer of branded grocery products, that includes many market-leading household names and consequently has a vast integrated global supply chain, with many layers of complexity.

The supply chain visibility solution that has been developed for them by Metro comprises seven core functions, and a users portal with dashboard, which provides a real-time view of the entire supply chain, together with drill down options for each of the seven functions.

  • POMs (Purchase Order management)
    • We receive a feed of PO/SKU data, with suppliers confirming quantities, dates and place a booking at origin. Tolerances are set and approvals required for anything outside of certain dates or other values.
  • EBSA (E-booking space and allocation)
    • Vessels bookings are allocated to POs and carrier contracts.
  • Track and Trace with AI powered ETA
    • SKU level tracking with market leading predicted dates. Vessel AIS images and automated delay logging - with reasons.
  • Report centre
    • Key KPI reports such as average days a container is at port, transit and delivery times within SLA agreement, bookings per week by carrier split.
    • Bespoke reports also built around financial reporting and inbound forecasting.
  • DCM – Distribution centre management for 3rd party DCs
    • The DCM has been tailored to their requirements and includes integration with Port Health. Container landing, customs clearance, and released for collection are timed, so client can specify containers for priority, or ‘drill in’ to see the SKUs inside and prioritise collection accordingly.
  • My Notifications
    • Client is closely monitoring inbound vessel movements based around a strict tolerance.
  • MVT Eco
    • ECO tool measures emissions and GHG output, by individual shipment, within their supply chain.

EMAIL Simon George, Technical Solutions Director, to learn more.

Coronavirus update 24th March

Low speed containerships are propping up rates

Jun 7, 2023 | , ,

Last year the shipping analyst Drewry’s forecast that the container shipping lines earnings would be down 64% for 2023, but added that there were strategic choices available to the carriers, to protect their revenues, with slow steaming a proven method of removing capacity, to protect rates and comply with environmental regulations.

In the first quarter of 2023, the global container fleet accordingly moved at all-time slow speeds, with analysts suggesting that vessels could go slower still which, despite massive falls, will help carriers keep rates higher than pre-pandemic levels.

During the covid pandemic the container shipping lines increased average sailing speed by 4% to meet strong demand and create spare time, because of widespread port congestion. 

In the first quarter of 2023 the average sailing speed has come back down 4% year-on-year and could drop a further by 10% before 2025, to absorb capacity that would otherwise be surplus. 

Across the global container fleet average speeds went down by about one knot, in the last two years, which does not sound like much, but Alphaliner data shows that is about 6% slower overall, which means you need proportionately more tonnage to carry the same cargo volume. 

For the past couple of decades carriers have adopted slow-steaming whenever there is structural overcapacity or high fuel prices - or both - as is the current situation.

At the same time the shipping lines have ordered record amounts of new vessels and additional capacity is now being delivered into a market with minimal demand growth, new environmental regulations, carbon taxes and rising fuel prices.

Maersk and MSC announced last month they would be adding nine new vessels into the Asia-Europe trade, but that these services would be moving up to three days slower than before, thus absorbing all the new capacity. 

As part of plans to conduct field tests of an onboard carbon capture system (OCCS) for container ships in 2024, South Korea’s HMM will replace the propellers on six of its containerships with more efficient ones specially designed for slow steaming, with HMM also expecting to increase energy efficiency by 8-9%.

The transition to new fuels such as LNG, methanol and ammonia also favours slow speeds, since these fuels will be much more expensive than current ones, which makes sense to deploy extra ships and save fuel.  

Despite a 70-80% fall in freight rates over the last two years, and a worsening of the supply/demand balance, it is quite clear that the container shipping lines have been successful in matching capacity to cargo demand, in keeping rates higher than pre-pandemic levels.

Slow-steaming and evolutions in shipping alliances change competitive dynamics on all the major trade-lanes, which is why we stay close to our carrier partners and contacts, to keep track of changes and identify opportunities for our customers.

If you have any questions or concerns about the developments outlined in this eBulletin, please EMAIL our Chief Commercial Officer, Andy Smith, for the latest insights and intelligence.

Category: Supply Chain

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