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LONDON: A report by the Carbon Disclosure Project (CDP) says companies on the S&P 500 index that plan for climate change produce a 67 percent higher return on equity (ROE) than companies who don't.

For the past nine years the world's largest investors, now representing US$92 trillion in assets, have asked the CDP to administer their request for climate change disclosure from S&P 500 companies in the form of a Climate Disclosure Leadership Index (CDLI).

The bar for admission to the CDLI has risen from a minimum score of 61 in 2008 to 97 in 2014.

Analysis over the last three years reveals that those who lead on climate disclosure and performance have produced 18 percent higher ROE than their sector peers and a 50 percent lower volatility of earnings and are 21 percent more likely to increase shareholder dividends.

CSX 2CDP CEO Paul Simpson noted: "With this comprehensive analysis of S&P 500 companies, the market has new, compelling evidence of the link between industry leadership on climate change and corporate profitability. There is only upside for corporations acting in a prudent way to address the challenges of climate change – for which disclosure through CDP lays the foundation."

CSX, one of the few S&P transportation companies on the CDLI, says it raised its performance score to "an all-time high" of 98 this year after five years on the index.

"CSX is dedicated to investing in the safe, reliable, environmentally-friendly rail network of the future to continue to drive profitable growth and shareholder value creation," said Fredrik Eliasson, executive vice president and chief financial officer. "This commitment to sustainable growth includes aggressive measurement and transparency to benefit shareholders and employees alike."

According to Eliasson, 40 percent of CSX traffic is now intermodal. It's principal customers are APL, CMA CGM, Hapag Lloyd, Hyundai, JB Hunt, Maersk, Mediterranean Shipping, Pacer, Schneider National and UPS – which is also on the CDLI for the fourth consecutive year. With a score of 100 it is ranked in the top 10 percent of reporting companies and one of only 14 to receive such a score.

"This year, being among the first U.S. companies to adopt the Global Reporting Initiative's new comprehensive level of reporting further advanced UPS's commitment to integrating sustainability into its business decisions," said Rhonda Clark, UPS chief sustainability officer. "It's another way to hold our company to the highest standard of transparency and disclosure. This recognition by one of the world's most respected organizations evaluating environmental performance affirms the success of UPS's dedicated sustainability efforts."

BOCA RATON, FL: As the European Commission continues its discussions on cargo security at Russia's airports, the Transported Asset Protection Association (TAPA) has announced new standards for manufacturers and the logistics industry to combat organised crime.

Truck theft FloridaTAPA says the new requirements are a response to coordinated attacks by organised gangs that involve armed and violent hijackings of vehicles, facilities and employees as well as fraudulent pick-ups, fake police stops, bogus personnel, slashing open trailer curtains and attacks on moving vehicles.

Paul Linders, who leads TAPA's global standards committee commented: "Cargo crime as a whole is increasing and one of the biggest challenges we face is getting businesses and law enforcement agencies to report loss data to help us understand the true scale of the problem and to provide intelligence that helps companies plan their supply chains using the latest market information. The cost of a single loss can be between 4-11 times its original value, hence the TAPA standards can significantly contribute to measurable supply chain risk management."

TAPA says 2013 figures for Europe, the Middle East and Africa (EMEA) region showed an increase of 66 percent with an average loss for the 1,145 recorded crimes of €235,000. The value of the 10 largest cargo losses last year was over €55 million.

For the first quarter of 2014 some of TAPA's 800 worldwide members reported 216 incidents for the EMEA region, including 32 with an average loss of over €210,000. The biggest single crime was the theft of €5-6 million of smartphones near Charles de Gaulle airport.

In the U.S., the same period produced 196 thefts with an average loss per incident of $216,208. The largest single crime was the hijacking of a truckload of cowboy boots in Carrolton, Texas with a declared value of US$2.26 million.

In Asia last year, TAPA members recorded 215 thefts with an average loss value of US$621,000.

WASHINGTON, DC: American manufacturers, wholesalers, Customs brokers and logistics providers have endorsed a two-year extension to the deadline mandating 100 percent screening of U.S. imports by ocean container.

In a letter to Department of Homeland Security (DHS) head Jeh Johnson, over 100 organisations and associations representing a large cross-section of U.S. trade and industry, say the U.S. Congress needs to repeal the mandate and focus on practical supply chain security solutions.

US CBPDeclaring the law calling for 100 percent container scanning has always been impractical and does not improve security, the group says if enacted it would not only have a "significant" negative impact on global commerce but cause considerable conflict with foreign governments.

The group says U.S. Customs and Border Protection (right), has developed an effective risk-based strategy to screen all containerized cargo and unlike the 100 percent mandate, does not impair the efficiency of the global supply chain. "This strategy is fully embraced by industry as well as our foreign trading partners and has proven to be highly effective," it adds.

The letter to Johnson also re-states questions that Congress refused to address when passing the original law.

They are: "The statute does not define what 'scanned' means and without such analysis, the 'scan' would be pointless. What are the standards for the applicable scanning technology? Who is to pay for the capital cost of the scanning equipment? Who is to operate, maintain and monitor the equipment? Who is to pay for the operation and maintenance of the equipment? What protocols are to be used in the foreign ports when a container is scanned? What is the role of the Customs and other relevant governmental authorities in all those nations around the world that ship goods to the United States? Does DHS have the consent of these foreign governments to such a mandatory regime? And what would the United States' response be if and when foreign governments insist on a reciprocal or 'mirror image' requirement that all U.S. containerized exports be scanned?"

The group says Congress passed a statute that it knew was wholly impractical and that Johnson's waiver is the only action to take without threatening the U.S. and global economy.

"However, instead of going through this exercise every two years, we urge you and the Administration to recommend to the Congress that the statutory 100 percent container scanning requirement be repealed. That would be the most appropriate way to address this flawed provision and allow the Department, industry and our trading partners to focus on real solutions to address any security gaps that remain in the global supply chain," the group concludes.

ALEXANDRIA, VA: The Electronic Industry Citizenship Coalition (EICC) has published a guide to the business case for supply chain sustainability.

The publication includes case studies from Alcatel-Lucent on corporate ethics; Cisco Systems on sustainable packaging; Deutsche Telekom on China labour relations; and PCH International on upgrading supply chain manufacturing efficiency in China.

Alcatel-LucentProduced in conjunction with the Global e-Sustainability Initiative (GeSI), the goal of the guide is to provide a review of challenges and field-tested solutions designed to help suppliers new to Sustainability improve their triple bottom line.

"[Our] members have a long history of working with their suppliers to achieve responsible and sustainable practices that have long-term benefits, to both companies and societies," declared Luis Neves, chairman of GeSI.

Rob Lederer, executive director of the EICC added: "While the supply chain sustainability movement has grown tremendously in the past decades, we need to ensure that all companies – large and small, experienced and inexperienced – have the basic tools to begin successful sustainability programmes. This report is a straightforward, step-by-step guide designed to help CSR professionals gain internal and external support for sustainability activities, and ensure those activities yield great results."

Research published last year by Harvard Business School showed that companies with integrated sustainability policies and practices achieve better financial performance in the long-term. A return-on-assets (ROA) analysis demonstrated that a US$1.00 investment in a company with a fully integrated sustainability programme could result in US$7.10 gain over an 18-year period, compared to a US$4.40 gain for an organization with little or no sustainability activities.

The EICC is a coalition of nearly 100 leading global electronics companies working together to improve efficiency and social, ethical and environmental responsibility in the global supply chain. The
GeSI is a 36-member strategic partnership between the information and communication technology sector and the UN Environment Programme and the International Telecommunications Union.

SAN FRANCISCO: With world energy consumption set to rise by around 40 percent by 2030, Business for Social Responsibility (BSR) has produced a guide to help companies transition to climate-friendly fuels.

BSR says transport fuel is projected to be one the leading sources of greenhouse gas emissions through 2050. The guide, produced with the support of Coca-Cola, CSX, GE, Nike, Pepsi, Shell, UPS, Volvo and Walmart, is designed to help companies migrate to fuels that will reverse this trend.

CSXBased on input from companies, research institutes, civil society organizations, and government agencies, BSR has identified five challenges that have hindered efforts to adopt low-carbon fuel, and then offers a four-step approach to address them.

The challenges are profound marketplace change; sustainable fuels are not yet scalable; the issues are complex and multifaceted; sustainability standards are underdeveloped; and key stakeholders have different ideas about the way forward.

In response, the guide outlines four steps: "Understand your total fuel footprint; optimize your use of available fuel and vehicles; collaborate to enable new low-carbon solutions; and advocate for a better policy environment."

BSR claims "getting fuel sustainability right is good for business" because in addition to addressing climate change, it can reduce costs by lowering lifecycle fuel prices, shape public policy and marketplace choices, prepare companies to respond to rapid changes to markets and technologies, and generate goodwill from customers and stakeholders.

The organization notes that while clean and renewable transportation technologies are gaining ground, fossil fuel will remain the backbone of fuel resources for decades to come. At the same time the increasing reliance on unconventional sources including the Artic, shale and fracking is creating more pressing climate, human rights, and other sustainability challenges.

BSR works with more than 250 member companies to develop sustainable business strategies and solutions through consulting, research, and cross-sector collaboration.

The guide is downloadable below.

BSR_Future_of_Fuels_Transitioning_to_Low_Carbon_Fuel.pdf


DORTMUND: Dinalog, the Dutch Institute for Advanced Logistics and EffizienzCluster LogistikRuhr, a research and innovation cluster, have signed an MoU to expand their existing partnership.

DinalogThe signing at the Fraunhofer Institute for Material Flow and Logistics in Dortmund coincided with a visit by the King of the Netherlands King Willem-Alexander (standing third from right) and Queen Maximá.

The objective of the Royal visit was to promote "mutual trade relations and cooperation in fields such as sustainable energy, the creative industry, innovation, the labor market and education," according to Dinalog.

Dinalog and EffizienzCluster have already worked together on several EU research projects and have developed a joint roadmap within the scope of the European technology platform ETP ALICE.

''With this MoU, we provide our bilateral activities with scope for the future'', said Thorsten Hülsmann, managing director of EffizienzCluster Management. "Our objective is to reinforce high-tech industry logistics internationally and to position it globally as an integrated solution provider."

The two logistics clusters are going to concentrate on developing the use of modern information and communication technologies in logistics, intelligent logistics systems, synchromodality in the transport of goods and in urban logistics.

''Closer collaboration between the Netherlands and North Rhine-Westphalia is of strategic importance as the gateway to Europe," added Henk Zijm, scientific director at Dinalog. "And if we want to establish a future-oriented modern and sustainable logistics sector, it is of paramount importance that we bundle our strengths and stimulate innovation in research and development."

EffizienzCluster LogistikRuhr is supported by 160 companies and 12 academic institutions. Dinalog includes 300 representatives from industry, logistics companies, research institutes and government.

ISTANBUL: The International Air Cargo Association (TIACA) is to launch a series of professional development workshops this summer in the Netherlands.

TIACA says its new three-day Air Cargo Professional Development Programme is tailored for the air freight logistics industry to develop management and decision-making skills, financial analysis and marketing and team-building leadership expertise.

TIACA ISTThe course is the result of a collaboration between TIACA and Strategic Aviation Solutions International (SASI). One of the company's executive directors is Stan Wraight, previously a KLM Cargo executive and contemporary of TIACA's 49th and latest Hall of Fame recipient, former KLM Cargo head Jacques Ancher.

"The new programme addresses the specific needs of the air freight industry and will give students the practical information and skills they need to succeed on a day-to-day basis," said Doug Brittin, TIACA secretary general (seated left of TIACA chairman Oliver Evans and Jim Edgar). "The workshops will also provide the perfect backdrop for raising questions and thoughts, creating the process of change required for industry development and growth. Students will build connections and support through networking."

Up to 25 participants are expected to attend the first session beginning on June 25 that aims to fill the management knowledge-gap identified in a report by TIACA's Education and Research Committee (ERC) in conjunction with the International Air Transport Association (IATA), the International Federation of Freight Forwarders Associations (FIATA), and the International Civil Aviation Organization (ICAO).

"Worldwide air cargo traffic is expected to continue growing and our industry is going to need a new and increasing source of suitably-qualified managers to support this," said Jim Edgar, TIACA ERC Chairman. "These workshops are designed to develop that next generation of leaders and are a tangible example of TIACA's important leadership role in the air freight supply chain."


 

 

COPENHAGEN: The Clean Shipping Index (CSI) and the Clean Cargo Working Group (CCWG) —two environmental reporting initiatives for ships and ship operators—are to create a single global initiative that provides a uniform set of environmental reporting and assessment tools for logistics procurement.

The two organisations say the recent proliferation of market-oriented environmental initiatives and standards for the maritime industry, while a positive development for sustainability, has bred confusion for shippers and carriers.

Volvo hybrid bus"Alignment behind one initiative is of great importance to the industry and our members, and this will help us more quickly reach our common goal of improving the environmental performance of the transport and logistics supply chain," said Angie Farrag-Thibault, project director of CCWG and associate director of the Business for Social Responsibility (BSR) transportation and logistics practice.

Commenting on the move, Susanna Hambeson, environmental manager at Volvo Group Logistics Services said: "For Volvo it's important to be a part of such a proactive environmental project and to work together with so many prominent environmentally focused companies. The [CSI] database is easy to understand and to work with – it's a flexible tool and a great way to work with the shipping companies. It makes my work easier."

Hambeson added that if its major logistics suppliers don't submit their data, Volvo won't use them: "If they submit data and the environmental performance is good we might extend our collaboration." Currently, Electrolux, Heineken, IKEA, Marks & Spencer, and Nike are using CCWG metrics and tools to review and compare ocean carriers on their sustainability practices and set expectations with transport providers for continuous improvement.

The CCWG has 40 member companies with an equal spread of carriers and shippers, including 18 liner fleet operators and 18 global shippers and freight forwarders. The CSI is used by shippers as a benchmarking tool to evaluate the environmental performance of 19 of the world's largest container carriers.

According to the BSR, transport accounts for about a quarter of global energy-related carbon emissions and it works with SmartWay, GreenFreight Europe, and GreenFreight Asia in a bid to align global standards. In addition, Kühne Logistics University researchers are now using CCWG data to analyse operational decisions that can improve environmental performance.

GENEVA: The World Trade Organisation says world merchandise exports rose 2.1 percent to US$18.8 trillion last year. Meanwhile, the value of world commercial services exports rose 5.5 percent to US$4.6 trillion.

At US$900 billion, the growth rate for transport services was two percent last year and has averaged six percent per annum since 2005.

The WTO's 2014 forecast of 4.7 percent growth in world merchandise trade is below the average rate of 5.3 percent for the last 20 years (1993–2013) and also below the pre-crisis average rate of 6.0 percent between 1990 and 2008.

At 6.9 percent, Asia is expected to grow faster than any other region this year followed by North Cargolux 14 LRAmerica (4.6 percent), South and Central America (4.4 percent) and Europe (3.3 percent). "Other regions", an aggregate that includes Africa, CIS and the Middle East, are expected to grow 3.1 percent.

The WTO says exports will be supported by rising import demand on the part of developed countries as the US economy gains momentum, and by improving economic conditions in Europe.

"For the last two years trade growth has been sluggish. Looking ahead, if GDP forecasts hold true, we expect a broad-based but modest upturn
in 2014, and further consolidation of this growth
in 2015," said WTO director general Roberto Azevêdo. "I know that just waiting for an automatic increase in trade will not be enough for WTO Members. We can actively support trade growth by updating
the rules and reaching new trade agreements. The deal in Bali last December illustrates this."

The WTO says North America's merchandise exports rose 1.9 percent in 2013 to US$2.42 trillion (12.9 percent of the world total) while imports remained essentially unchanged at US$3.20 trillion (16.9 percent).

South and Central America's exports fell by 1.8 percent to US$737 billion (3.9 percent of world exports) but the region's imports grew by 2.4 percent to US$773 billion (4.1 percent).

European exports rose 4.0 percent to US$6.64 trillion (35.3 percent of the world total), the strongest growth of any region. Meanwhile, Europe's imports recorded a small increase of 1.0 percent to US$6.59 trillion (34.9 percent).

CIS exports declined 2.8 percent to US$778 billion while imports grew by 0.7 percent to US$575 billion in 2013. The region's exports and imports represented 4.1 and 3.0 percent respectively of world trade.

Africa's exports suffered a large decline of 6.3 percent to US$599 billion (3.2 percent of world exports). Meanwhile imports grew a modest 2.2 percent to US$628 billion (3.3 percent).

Middle East exports declined by 1.3 percent to US$1.33 trillion (or 7.1 percent) and the region's imports rose by 4.3 percent to US$770 billion (4.1 percent).

ChinaShippingFinally, Asia's exports grew by 2.8 percent to US$6.29 trillion (33.5 percent of the global total) in 2013. Meanwhile, imports grew by 2.1 percent to US$6.37 trillion (33.6 percent).

The top five merchandise exporters were unchanged in 2013 with China No.1 at (US$2.21 trillion, 11.8 percent of world volume); followed by the U.S. (US$1.58 trillion, 8.4 percent); Germany (US$1.45 trillion, 7.7 percent); Japan (US$715 billion, 3.8 percent); and the Netherlands (US$664 billion, 3.5 percent). Japan's exports suffered a sharp decline of 10.5 percent during the year.

The leading importers were the U.S. (US$2.33 trillion or 12.4 percent of the world total); China (US$1.95 trillion, 10.3 percent); Germany (US$1.19 trillion, 6.3 percent); Japan (US$833 billion, 4.4 percent) and France (US$681 billion, 3.6 percent). France replaced the U.K. at number five on the list of leading importers.

The WTO notes the trade picture changes if the European Union is counted as a single entity and intra-EU trade is excluded: Then the EU becomes the largest exporter at US$2.30 trillion or 15.3 percent of world volume, followed by China (14.7 percent), the U.S. (10.5 percent), Japan (4.8 percent) and the Republic of Korea (US$560 billion, 3.7 percent).

On the same basis, the leading importers last year were the United States (15.4 percent), the EU (US$2.23 trillion, 14.8 percent), China (12.9 percent), Japan (5.5 percent), and Hong Kong, China (US$622 billion, 4.1 percent).


ISTANBUL: The future direction of, and involvement in, shipping by air will depend on the rise of middle class spending in developing countries and what type of supply-side company is going to meet their service requirements.

Brian Clancy PhotoSpeaking at TIACA's Executive Summit in Istanbul on April 24, Brian Clancy (left) a founder of aviation consulting company MergeGlobal and now a partner in Logistics Capital & Strategy, echoed the observation of FedEx chairman Fred Smith who told IATA's Cargo Conference in March: "The future ain't what it used to be".

Both men seem to think the golden age of airport-to-airport cargo shipping and its associated business infrastructure is all but over for some types of players.

Clancy told conference attendees that the supply-side is facing four major challenges in a post-Great Recession era: slow growing episodic demand; a declining length of haul; rising shipment density and a shift to what he describes as "hybrid inventory strategies" prompted by shipment consolidation and modal shift.

So by 2018 who will be the winners? Clancy comes to a similar conclusion as Smith: "The integrators are in a better strategic position relative to forwarders and will further improve their market position in intercontinental small package, divert the highest yield emergency air freight shipments away from airlines, and re-capture downgraded air freight demand with their vast ground package and LTL networks in North America and Europe."

Forwarders, meanwhile, "will manage modal substitution of planned air freight users by re-capturing pallet-sized shipments as LCL sea freight or consolidated FCL shipments. Net revenue margins per kilo will likely drift down forcing [them] to explore new initiatives to reduce unit costs."

Clancy reassured his largely airport-to-airport sector audience by suggestemiratesing non-integrated airlines operating belly capacity will always have what he euphemistically describes as "pricing flexibility" due to the passenger revenue contribution to operating costs. At the same time operators of fuel-efficient B777/B787 passenger aircraft will benefit from increased cargo payload per departed seat; and those airlines that can afford next generation freighters will gain from an industry with fewer competitors.

So potentially good news for airlines like AirFrance-KLM, the Lufthansa Cargo Group, Emirates or even Cargolux but not so good for "freighter airlines, including ACMI carriers, that have based their fleet strategies on low capital cost used aircraft and cannot afford to replace their fleets. [They] will be forced to exit the industry – [and the] military downturn will accelerate this process in 2014," he says.

Clancy thinks the survivors in this new era will need to achieve a deeper understanding of costs and prices to manage slow and volatile demand; embrace cloud-enabled IT cost reduction while simplifying their service offerings to anticipate changing shipper requirements; and increase "share of wallet" with their best customers rather than trying to acquire new customers from their competitors.

Finally, in a reminder that not much has really changed in the past 25 years apart from lower margins, Clancy told his audience that "human resources becomes even more strategic as highly variable compensation models risk talent flight in many forwarding companies."

Or, in an echo of that immortal catchphrase from Burlington Air Express: "People, not planes, deliver".

CHARLOTTE, NC: A new study by supply chain trade association MHI and Deloitte says supply chain executives want to invest in new technologies and business innovations but are hampered by a shortage of talent and relentless cost reduction.

MHI says the top two strategic priorities of supply chain executives are analytics and multichannel fulfillment. Three emerging innovations expected to be top-of-mind soon are sustainability, mobility/machine-to-machine technology and 3-D printing.

 scott sopher"Respondents clearly identified the need to rethink their approach to supply chain management," said Scott Sopher (right), principal, Deloitte Consulting LLP and the leader of its Supply Chain & Manufacturing Operations practice.

"In the past, organizations addressed supply chain challenges primarily through cost reduction and operational efficiency efforts. Today's global supply chains require a new focus on technology and innovation as well as a willingness to invest in these areas for the long term. A true commitment to innovation will help organizations better prepare for the future, manage supply chain risks and stay ahead of the curve," he added.

Survey results show nearly 80 percent of respondents think supply chain analytics is a "very important" or "moderately important" strategic priority, and 74 percent of retailers expect their investments in multi-channel fulfillment to increase over the next three years.

More than 65 pgeorge prestercent of survey participants indicated that process, technology and skillset gaps exist within their company. "Unfortunately, the right kind of supply chain talent is extremely difficult to come by these days," said MHI which expects the supply chain field to add 1.4 million new jobs by 2018.

Over 70 percent of respondents across sectors said that controlling costs is more important than innovations in sustainability, even though executives believe these investments are important.

MHI found that 79 percent of respondents think sustainability is "moderately important" while more than 60 percent noted significant capability gaps in their companies and clients to prevent them from effectively implementing sustainability programmes.

"For nearly 70 years, MHI has been working to improve global supply chains." noted CEO George Prest (left). "The findings of this study have significant implications for how companies design and manage their global supply chains."

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