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Strike Aviation Group

Strike Aviation Group

 

Ai Logistics Network

 

LONDON: January 20, 2016. Control Risks, a consultancy that helps organizations manage risk and recognize opportunities, says business and politics now face increasing “insurgency” - a common challenge that is capable of rapidly upsetting the status quo.

In its 2016 ‘Risk Map’ survey of the year ahead, company CEO Richard Fenning notes that this new insurgent model – “makeshift, audacious and willing to seek out unconventional funding” – applies as much to Libyan militia gangs as it does to Palo Alto start-ups.

Yemen WFP“Beware the disrupter who is handed the reins of power” he declares, citing the example of Russian president Vladimir Putin: “Russian foreign policy has been built on a strategy of disruption – a skillful ability to unsettle the West in eastern Ukraine, Crimea and Syria with the aim of restoring Russia’s international prestige. 

“Nobody should underestimate the ability of Putin and foreign minister Sergei Lavrov to continue to outmaneuver their opponents in this game of geopolitical chess, or the amount of genuine sentiment that underpins their domestic support” says Fenning, who nevertheless warns that at the current price of oil, Russia’s reliance on a hydrocarbon-based economy cannot be ignored forever.

He claims another disrupter is prime minister of India Narendra Modi who, he says, must live up to his promise to change the way the country is governed: “Having swept to power with his own brand of Gujarati radicalism on a wave of iconoclastic popular support that shattered the Congress-dominated consensus, he now faces the same popular intolerance of inaction that he exploited so cleverly in opposition,” observes Fenning.

But behind the ego and ideology, the latest Control Risks report suggests the biggest potential disrupter this year is another financial crisis triggered by any combination of the end of cheap money, the migration (or another) EU crisis, or a Chinese hard landing. “The prospect of a repeat variation of 2008 may only be lurking in the shadows, [but] the prospect of presidents Barack Obama, Xi Jinping and Putin coming together to avert financial peril seems sadly remote,” the company adds.

Despite the dire possibilities Fenning concludes: “Each year we are at pains to emphasize that, for all the apparent insecurity that surrounds us (Yemen/WFP above), the world remains full of promise for the well-prepared investor. Risk is a necessary precondition for opportunity, and 2016 will be no exception.”

DAVOS, Switzerland: January 20, 2016. PwC says CEOs are most concerned about government over-regulation (79 percent) and geopolitical uncertainty (74 percent) according to its latest survey of over 1,400 individuals in more than 80 countries.

As a result CEOs are less positive about the global economy in 2016 with survey optimists declining 10 points to 27 percent this year, while the pessimists have grown in number from 17 percent to 23 percent overall.

According to Dennis Nally, chairman of PwC International, many CEOs are looking to “play things safe” with the U.S. and China offering the best prospects in 2016, with Germany and the U.K some way behind.

Respondents said they also see potential in India and Brazil in 2016 - despite the latter’s “political and economic struggles” - while CEOs have also noticed new opportunities in Mexico and the UAE.

PwC survey 2PwC thinks the world is shifting from globalization to one with many dimensions of power, growth and threats – a transition it calls “multi-polar”. It notes the majority of CEOs agreed, with 59 percent expecting multiple economic models in future, 75 percent anticipating increasing trade regionalization, 81 percent experiencing growing divergent systems of laws and liberties, and 83 percent predicting differing fundamental belief systems underpinning societies.

Accordingly, PwC expects customers increasingly will judge companies on how they live up to their own values for the greater good. Unilever is cited as an example of consumers choosing ethical and sustainable products and services, with the company’s ‘sustainable’ brand portfolio now half its total growth and expanding twice as fast as its other products.

“It’s just one of nine companies globally that generate a billion dollars or more in annual revenue from sustainable products or services. Indeed, in 2015 sales of consumer goods from brands with a demonstrated commitment to sustainability grew more than 4.0 percent globally, adds PwC.

Acknowledging this trend Denise Morrison, president and CEO of the Campbell Soup Company observed: “Purpose is something you carry in your heart, not something an ad agency makes up. So we pulled the company’s purpose out of our people’s hearts and manifested it in seven words: ‘Real food that matters for life’s moments.’ We validated those words with consumers and our employees. Consumers told us stories about how our brands really matter to them. That’s led to an umbrella over all of our brands, that purpose can encompass and motivate our people around why what we do every day matters.”

Ajay Banga, president and CEO of MasterCard U.S. added: “You’ve got to run a company for profit, you’ve got to run it for revenue growth, but you also have to run it to be around ten years from now doing the right things. That’s one of the biggest issues most CEOs face today.”

PwC concludes from its latest survey that CEOs are focusing on developing three core capabilities to ensure they will survive an increasingly complex social and business future: addressing greater expectations by stakeholders and customers; harnessing technology, innovation and talent to meet these expectations; and developing methods of measuring and communicating success.

DAVOS, Switzerland: January 20, 2016. A new report by the World Economic Forum (WEF) and the Ellen MacArthur Foundation (EMF) claims that without applying circular economy principles, by 2050 the world’s oceans will contain more plastics than fish by weight, and the plastics industry will consume 20 percent of global oil production and 15 percent of the annual carbon budget.

Circular economy plasticAssessing global plastic packaging flows comprehensively for the first time, the report finds that most of it is used only once and 95 percent of the material’s value, worth US$80-120 billion annually, is lost to the economy. Additionally, plastic packaging generates negative externalities, valued conservatively by UNEP at US $40 billion.

With analytical support from McKinsey, the three-year study provides a vision of a global economy in which plastics never become waste, and envisages a new approach based on creating effective after-use pathways for plastics; drastically reducing leakage of plastics into natural systems, in particular oceans; and decoupling plastics from fossil feedstocks.

To do this, the WEF proposes an independent coordinator to establish common standards and foster innovation opportunities, while the EMF says it will provide a platform for cross-value-chain dialogue and drive a shift to a new plastics economy.

“Linear models of production and consumption are increasingly challenged by the context within which they operate - and this is particularly true for high volume, low value materials such as plastic packaging,” said EMF founder Ellen MacArthur. “By demonstrating how circular economy principles can be applied to global plastic flows, this report provides a model for achieving the systemic shift our economy needs to make in order to work in the long term.”

Dominic Waughray, member of the WEF executive committee and head of its public-private partnership added: “The report demonstrates the importance of triggering a revolution in the plastics industrial ecosystem and is a first step to showing how to transform the way plastics move through our economy.”

The report producers say achieving such systemic change will require major collaboration by all industry stakeholders including consumer goods companies, plastic packaging manufacturers, recyclers, policymakers and NGOs.

NEW YORK: January 20, 2016. Global PR and marketing firm Edelman says its latest survey on trust, covering 33,000 people in 28 countries, shows businesses have the best opportunity to bridge a growing gap between the informed and uninformed.

According to Edelman results from its 16th annual survey, released during the World Economic Forum in Davos this week, suggest respondents view business (61 percent) as the institution most trusted to keep pace with rapid change, far more than they do government (41 percent) and NGOs (55 percent).

WEF Davos 2016Business is also significantly more trusted than government in 21 of 28 countries, with large gaps in South Africa (44 points), Mexico (44 points) and the U.S. (12 points). And 80 percent believe companies can increase profits while improving the economic and social conditions in the communities in which they operate.

Edelman said the public is also responding positively to CEOs trying to realize "the dual mandate of profit and societal benefit", as CEO trust has risen substantially in the past five years to 48 percent. But respondents are more likely to trust an employee compared to a CEO for information on treatment of their peers (48 percent versus 19 percent) and information on business practices and crises (30 percent versus 27 percent).

“Business can be a big part of the solution because it is apolitical, fast, and tracks its progress,” explained Kathryn Beiser, global practice chair of Edelman’s corporate practice. “Now is the time to lead from the front with the support of their employees and passionate customers. No longer can business leaders focus on short-term goals. The new model CEOs are taking action by addressing the issues of our time, and taking a personal interest in the success of society. Stakeholders expect business to have a solid and steady focus on financial returns, but also on actions around key issues such as education, healthcare and the environment.”

The Edelman results also indicate respondents want to see CEOs shift from short-term results and lobbying, to job creation (49 percent) and positive long-term impact (57 percent).

With government remaining the least trusted institution for the fifth year running according to the survey, Richard Edelman, company president and CEO noted: “We are now observing the inequality of trust around the world. This brings a number of potential consequences including the rise of populist politicians, the blocking of innovation and the onset of protectionism and nativism.”

LONDON: November 26, 2015. A report from HSBC produced by Oxford Economics forecasts global exports will reach US$68.5 trillion by 2050 – nearly four times the expected figure for 2015. Developments in technology, logistics, public policy and operations will provide new opportunities for businesses as physical borders become less important.

Bank note HSBCAsia will be a big beneficiary with the region's share of global exports predicted to reach 46 percent by 2050, compared with 33 percent in 2015. HSBC expects China to extend its lead as the world's top exporter followed by India with Western Europe and North America seeing their share of global exports decline.

According to Simon Cooper, HSBC chief executive Commercial Banking: "Today we are on the cusp of a third wave of globalization anchored by new technologies and increasing economic integration. It promises to take nations out of poverty and improve quality of life across the world. Radio took 38 years to achieve 50 million users; a target achieved in just three years by the Internet and in a single year by Facebook. When we consider the future in this context, there are many great opportunities but also uncertainties for the business world."

The Oxford Economics research finds that the third stage of globalization will be driven by continued industrialization coupled with a sharp drop in transport and communication costs. It predicts new markets will open up and changes in trade policy will lead to a fall in the cost of trade. The study defines the first stage between 1865-1913, the second between 1950-2007, and the third between 2015-2050.

Stuart Tait, HSBC global head of Trade and Receivables Finance added: "There will be a huge change in current supply chains. Logistics will become even more efficient as each element becomes trackable."

The report says other trade influences over the next four decades include multilateral efforts to counter climate change and the development of 3D printing enabling customized "build to order" production.

BAAR, Switzerland: January 18, 2016. Supply chain executives surveyed in Agility Logistics’ latest emerging market index for the first time think India not China has the most growth potential. They also see oil prices and China’s economy as the leading risks to the global economy this year

In the overall rankings, which are based on economic and social data, India climbed two places to No. 3, behind China and the UAE on strong economic performance and initial reforms launched by the government of prime minister Narendra Modi.

According to Agility’s survey of 1,100 industry executives, 61 percent are unclear on the direction of the global economy, or they expect more volatility in 2016. Almost the same number (59.4 percent) say the International Monetary Fund’s forecast of 4.7 percent growth in emerging markets is “about right”, after growing between 3.6-4.2 percent in 2015, down from 4.5 percent in 2014.

Agility Top 20 Emerging Markets Index 2016“It was a volatile year for emerging markets, and you see that in the index. Eight of the top 10 emerging markets shifted places,” said Essa Al-Saleh, president and CEO of Agility Global Integrated Logistics. “Despite the turbulence, the fundamentals driving growth remain consistent – a rising middle class with spending power, progress in poverty reduction, growing populations. That’s why we are still positive on the outlook for emerging markets and see them driving global growth.”

Among the countries at the top of the new Agility index the UAE, India and Malaysia (4th place) lead the commodity-dependent economies of Saudi Arabia (5), Brazil (6) and Indonesia (7), followed by Mexico (8), Russia (9) and Turkey in 10th place.

From a logistics perspective Agility says countries in Latin America are losing ground as a result of recession and political turmoil in Brazil, and depressed prices for commodity exports. Of the 10 countries that slipped furthest in the index for 2016, six are in Latin America: Peru, Argentina, Uruguay, Brazil, Colombia and Venezuela.

On the other hand, Iran has moved up 12 places to No.15 among emerging countries with major logistics potential.

Executives see “economic shock” as the top risk in Asia Pacific with 38 percent saying they are reassessing their China strategies. Previous Agility surveys had natural disasters and corruption as the top risks in Asia.

For the first time, consumer spending is viewed as more important than energy and minerals for driving growth in Africa with Nigeria, South Africa, Ghana and Kenya as the continent’s most promising markets. However, despite recent growth and investment, executives still view Sub-Saharan Africa as a “frontier market” and only 21.2 percent say they have operations there, according to Agility and its research organization Transport Intelligence.

COLUMBUS, OH: November 24, 2015. Amazon.com, reportedly testing an overnight B767 freighter operation out of former DHL Express hub at Wilmington Air Park, Ohio, is to open two fulfillment centers in Obetz and Etna – close to Rickenbacher airport, Ohio.

Aircraft leasing company Air Transport Services Group (ATSG), based at Wilmington, has a contract with DHL to provide 30 B767 freighters for the company's U.S. and global operations through March 2019.

ATSGAs of January this year, ATSG operated 45 B767 freighters under multi-year lease agreements with various clients.

Commenting on the new Amazon investment, the company's vice president of North America operations Mike Roth said: "We are very pleased to continue investing in Ohio by building our first fulfillment centers in the state. This investment will create thousands of jobs that will have comprehensive benefits on day one."

Etna and Obetz respectively will have one million and 800,000 sq.ft. Amazon fulfillment centers - providing full-time employment for 2,000 people. Both towns are less than half an hour by truck from Rickenbacher and just over an hour from Wilmington.

Earlier this month ATSG reported a 3.0 percent increase in third quarter revenue to US$142.3 million, including a 6.0 percent rise in freighter leasing.

ATSG president and CEO Joe Hete said: "We deployed three B767 cargo aircraft under new arrangements during the third quarter, and will deploy others, five of those under dry lease arrangements, in the fourth quarter."

The company said it bought three 767-300 aircraft this year, one more than in 2014, and plans to purchase one more 767-300 this month to modify and deploy with an existing customer in 2016 under an eight-year dry lease. ATSG said capital expenditure would total US$165 million by the end of 2015.

During Q3 ATSG also invested in United Star Express, a new joint venture to provide air services in China and other points in Asia from Tianjin beginning in mid-2016.

HAMBURG: December 11, 2015. Hapag-Lloyd says the planned purchase by CMA CGM of Neptune Orient Lines (NOL), parent company of G6 Alliance member APL, will have no immediate effect on the G6 service through 2016.

The G6: APL, Hapag-Lloyd, Hyundai Merchant Marine, Mitsui O.S.K. Lines, Nippon Yusen Kaisha and Orient Overseas Container Line said they would "make further announcements should there be any development".

APL PhoenixNOL/APL owner Temasek, Singapore's sovereign wealth fund, has signaled acceptance of CMA CGM's US$2.4 billion offer, subject to regulatory approval that is expected by mid-2016.

CMA CGM vice chairman Rodolphe Saadé said the acquisition would leverage the complementary strengths of both lines and reinforce the privately-held French company's position as a leader in global shipping with combined revenue of US$22 billion and 563 vessels.

"At a time when the shipping industry is facing strong headwinds, scale is more critical than ever to capitalize on synergies and capture growth opportunities wherever they arise. I firmly believe CMA CGM will enable NOL to address the industry's new challenges. We recognize the strategic importance of Singapore as a key hub for the maritime industry and we are committed to reinforcing its regional leadership," he added.

Tan Chong Lee, head Portfolio Management at Temasek added: "We are supportive of this transaction as it presents NOL with an opportunity to join a leading player with an extensive global presence and solid operational track record. We also note and welcome the commitment of CMA CGM to enhance Singapore's position as a key maritime hub and grow Singapore's container throughput volumes."

CMA CGM said it expects to retain the APL brand and strengthen its position in key routes to the U.S., intra-Asia and Japan. The combined entity will increase its global market share from 8.8 percent to 11.5 percent.

Noting the industry is facing "significant challenges with strong pressure on capacity and pricing", the company said scale provides a strategic advantage in order to deliver sustainable performances in the mid-term. CMA CGM added it plans to open a regional head office in Singapore and has committed to putting more box volume through the port.

XPONEW YORK: Based on a November 10 filing with the U.S. Securities & Exchange Commission, Bermuda-registered Orbis Investment Management is now a major shareholder in XPO Logistics.

As of November 11, the company owned 12 percent or nearly 13 million shares in XPO with a market value of around $420 million.

According to its web site, Orbis was founded in 1989 by former Fidelity fund manager Allan Gray to provide clients with investment advice based on "fundamental, long-term and contrarian thinking".

With more than $40 billion under management his firm Allan Gray Proprietary, based in South Africa, shares "a close business relationship with Orbis".

On November 06, XPO Logistics reported Q3 2015 revenue of US$2.4 billion and net revenue of US$1.1 billion – year-on-year increases of 256.5 percent and 542.4 percent respectively due largely to earlier acquisitions.

The net loss was US$93.1 million compared with a net loss of US$12.3 million for the same period in 2014. Adjusted EBITDA rose from US$24.2 million to US$166.1 million year-on-year.

Current liabilities in Q3 totaled US$3.948 billion – up from US$725 million in Q3 2014. Despite increased losses over the past year, brokers continue to assign a "buy" recommendation for the company's 107 million unassigned shares.

NEW YORK: December 10, 2015. The UN estimates the global economy will have grown just 2.4 percent by the end of 2015, a drop of 0.4 percent from a forecast six months ago.

A new study says growth in developing and transition economies has slowed to its weakest pace since the global financial crisis of 2008-2009 amid lower commodity prices, large capital outflows and increased financial market volatility.

Identifying five factors affecting future global growth, the report cites persistent macroeconomic uncertainties; low commodity prices and diminished trade flows; rising volatility in exchange rates and capital flows; stagnant investment and productivity growth; and a continued disconnect between finance and real sector activities.

World Bank competition citiesThe UN says the "pivot of global growth is partially shifting again towards developed economies" - given the slowdown in China and persistently weak economic performances in Russia and Brazil. It projects the global economy will grow 2.9 percent in 2016 and 3.2 percent in 2017, with growth in developed economies surpassing 2.0 percent next year for the first time since 2010.

"Stronger and more coordinated policy efforts are needed to ensure robust, inclusive and sustainable economic growth, which will be a key determinant to achieve the 2030 Sustainable Development Goals," commented assistant secretary-general of the UN Department of Economic and Social Affairs, Lenni Montiel.

The report notes that global energy-related carbon emissions showed no growth in 2014 for the first time in 20 years, with the exception of 2009 when the global economy contracted. This suggests the possibility that the world might start to see some de-linking between economic growth and carbon emission growth, the UN adds.

A just-released related study by the World Bank has analyzed 750 cities to determine what makes them competitive and how they have grown their economies.

The report looks at global and regional trends and compared different types of cities by income, sector, region, and industrial mix. It finds that the more competitive centers are often secondary cities experiencing rapid industrialization such as Saltillo, Mexico; Meknes and Tangier, Morocco; Coimbatore, India; Gaziantep, Turkey; Bucaramanga, Colombia; Onitsha, Nigeria; and Changsha, China.

The report concludes their success is due to becoming better at what they already do: leveraging their comparative advantage to export tradable goods and services to other cities and countries.

LONDON: Peter Bakker, president and CEO of the World Business Council for Sustainable Development (WBCSD) and former CEO of TNT Express, says the introduction of low carbon technology could create up to 45 million new jobs worldwide over the next 15 years.

Bakker said analysis by PwC confirms the WBCSD's Low Carbon Technology Partnerships initiative could deliver 65 percent of all CO2 reductions needed to meet the UN global warming target of below +2°C, while attracting US$5 trillion-US$10 trillion of new investment – half of which would be in developing countries.

LCTPi PwC analysisWith Exxon-Mobil now a target of an investigation by the New York Attorney General's office for reportedly misleading investors over climate change statements, Antoine Cahuzac, group senior EVP Renewable Energies of power company EDF said: "Being a responsible partner of, and committed to, a low-carbon world, it was obvious and natural for us to join the WBCSD's Low Carbon Technology Partnerships initiative (LCTPi).

"To tackle climate change we need to develop renewable energies to reduce the CO2 footprint of the electricity sector, and hence to decarbonize our economies," he added.

LCTPi includes 140 companies and 50 partners who are developing plans to deploy low-carbon technology worldwide. However, Bakker said they can't do it alone: "We can only safeguard the earth's future when business and policymakers act together. We urgently need an ambitious climate agreement in Paris to set the policy framework that will enable us deliver on our mutual goals."

The initiative has nine working group covering renewables, carbon capture and storage, chemicals, cement, energy efficiency in buildings, climate smart agriculture, forests and forest products as carbon sinks, low carbon transport fuels and low carbon freight transport.

According to the PwC analysis, implementation of low carbon transport fuels could attract investment of US$30-40 billion in construction and machinery technology split 50:50 across developing and developed countries.

With just over three weeks to COP21 in Paris where governments meet to decide on targets for keeping global warming below +2°C, Bakker added: "Never has the necessity of building a sustainable world been so real and so urgent. I have been inspired to see an increasing number of businesses stepping up to tackle the climate challenge and lead governments in adopting ambitious measures."

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