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LONDON: April 12, 2018. As the two largest gig-economy express delivery companies fail to deliver, David Jinks from ParcelHero asks what happened to the demand for on-demand deliveries?

“Back in 2015 express same-day deliveries from local retailers looked to be the next big revolution is shopping. Uber was valued at US$50bn as it launched its UberRush merchant delivery service, and the express local delivery company Shyp rocketed to a $250 million valuation.

“But demand has failed to match the hype and both companies have reached the end of the road this year. Both UberRush and Shyp were based on the brave new world of the gig economy that now seems to be faltering.

“In a world of increasing instant gratification, Shyp seemed a great idea as a one size fits all delivery company; delivering, for just US$5, anything from a computer to a bike. And ‘an Uber for things’, as Uber’s General Manager described UberRush at its launch, made even more sense given its vast network of cab drivers waiting for pick-ups, who could also be used for deliveries.

“Both UberRush and Shyp were part of a wave of start-ups based on the idea that many consumers were happy to pay an ‘impatience premium’ to get items fast: hence the success of Amazon Prime Now. But this assumption seems to have been false. The demand for instant local deliveries of purchases is there, but it’s not yet large or consistent enough to be a viable business model.

UberRush“Looking first at Shyp, its one-size-fits-all delivery eventually ended up being its Achilles heel. Moving a large PC for the same cost as an egg cup makes no sense, so its US$5 flat fee was doomed. By 2017 it was adding fees on returns and charging up to US$25 for extra-large packages. But with its entire business model radically altered the sinking Shyp eventually foundered in January.

“Uber’s recent announcement that UberRush is also closing, on June 30th, reveals similar problems and begs some questions about Uber’s future financing. (See ParcelHero’s report The Uberfication of Deliveries).

(Pictured: A trial UberCargo service delivery in Hong Kong. ParcelHero says Uber has never realized its full on-demand delivery potential.)

“Uber needs to break into wider markets such as the logistics industry to meet its investors’ expectations. Uber may have been valued at $69bn by 2017 - but our report revealed many analysts believe the entire global taxicab market is worth just US$22 billion. So where was Uber’s extra income potential to come from?'

“Logistics seemed to be the solution. It’s an industry that accounts for 12 percent of global GDP, so it’s potentially a lot more lucrative than cabbing. Small wonder Uber rushed into launching UberRush

“It took a long time for the truth to hit that creating a reliable delivery network is expensive and needs considerable scale to be cost effective. Just as Shyp found, a network based on delivering small express items for local merchants - such as flowers and dry cleaning - isn’t hugely profitable: and larger items such as furniture and fridges won’t fit on a cycle or in a Prius.

“The final straw was when Uber introduced UberEats in 2016– which stole many of UberRush’s most lucrative food delivery contracts. So why did UberEats eat Uber’s own lunch? Because with UberRush, Uber only received delivery fees but with Eats, orders go through Uber's App, so it earns more on every order.

“When Uber told its restaurant and catering business contracts to switch from UberRush to UberEats last year, UberRush effectively reached the end of the road.

“As our report reveals, there are still some logistics options open to Uber, such as further developing its UberFreight business, matching loads to truck drivers. But for now, it seems the lack of real demand for on-demand deliveries will leave Uber looking elsewhere for new revenues.”

HANGZHOU: April 11, 2018. In an open letter to the U.S. political community and by inference Donald Trump, Alibaba executive chairman Jack Ma says a trade war with China kills jobs, opportunity and hope:

“As a businessman, I have been encouraged by the U.S. administration’s pro-business policies, like lowering corporate taxes. Now, like many in the business community, I am struggling to understand why a trade war with China would be good for the U.S. economy.

“The U.S. has a structural trade deficit with China because of the market forces of comparative advantage: Economies produce what they are best at making and import other things. Dollars earned from trade surpluses in China have been recycled to finance American borrowing, keeping U.S. interest rates low with favorable economic conditions. American unemployment stood at 4.1 percent in March, a 17-year low. All these economic indicators suggest that the U.S. economy is doing well, regardless of the trade deficit.

“American economic policy for the past 30 years encouraged U.S. companies to outsource labor-intensive manufacturing to China and other Asian countries while retaining the most valuable parts of American ingenuity: innovation, technology and brand.

“China embraced this American-led globalization because it was also the best path for China’s development as an emerging economy. To raise living standards for 1.3 billion people, the Chinese government promoted foreign investment and built the economy on the strength of its large and increasingly skilled labor force. As a result, China became the world’s largest exporter, with a significant trade surplus. American consumers benefited from low prices and American corporations made giant profits.

“There’s no better example of a beneficiary of this symbiotic relationship than Apple. The company designs the iPhone and develops proprietary chips and software in California. It makes the units through contractors that hire millions of workers in China, assembling components manufactured in South Korea. Through smart marketing, Apple products capture consumers’ hearts, making its brand more valuable.

“While countries like South Korea and China collect revenue from selling components and assembling the final product, Americans make almost all of the profits. Apple’s $48 billion of profits in its 2017 fiscal year will not make it into the balance-of-trade calculation.

“Under a symbiotic U.S.-China relationship, America became a preeminent technology leader, and its brands are today the envy of the world. China improved the standard of living of its citizens with a tenfold increase in per capita gross domestic product over the past 20 years.

“But U.S.-China trade relations in the next 20 years will look very different from the past two decades. The benefits of globalization since joining the World Trade Organization in 2001 have opened China’s mind to the idea of open markets.

“China is shifting its economy from the world’s largest exporter to the world’s largest consumer. Chinese citizens now have the wealth and income to pursue discretionary spending. They want to buy high-quality imported food, cosmetics, fashions and health and wellness products for themselves and their children.

“With average urban income growing at almost double digits and an emerging middle class of 300 million, Chinese consumers are already driving massive demand for imports from all over the world. Last year, president Xi Jinping said at the World Economic Forum that over the coming five years, China would import US$8 trillion of goods.

“It is therefore ironic that the U.S. administration is waging a trade war at a time when the largest potential consumer market in the world is open for business. Is America going to forfeit this opportunity?

“Instigating a trade war is the wrong solution because it will only provoke retaliation. The Chinese government responded to U.S. tariff threats with its own tariffs on American agricultural products, such as soybeans. China is the largest export market for American soybeans, worth US$14 billion annually and accounting for 65 percent of all U.S. soybean exports.

“The U.S. has been a consistent defender of free and open markets, but this time it is resorting to protectionism that will not improve American competitiveness. Any country seeking to increase exports would do better to focus on developing good products and channels to access foreign markets rather than putting up trade barriers.

“At the heart of Alibaba’s mission—to make it easy to do business anywhere—is our support for small businesses. A vibrant small-business sector is good for any economy, because small businesses create jobs.

“This trade war will hurt millions of American small businesses and farmers. I feel for these men and women, because I met many of them when I toured the U.S. last year to host our “Gateway” trade showcase in Detroit.

“Small-business owners and farmers traveled from all over the country to learn how Alibaba could connect them to the massive Chinese consumer market. Those attending Gateway saw what the future could hold for their business. I saw the entrepreneurial gleam in their eyes.

“Through our digital-commerce platforms, where more than 500 million Chinese consumers shop, Alibaba will continue to help American small businesses and farmers access the China market.

“If we encounter trade barriers, we will have to work harder. While we may face setbacks in the current protectionist environment, I remain confident and look forward to the next 20 years.”

AMSTERDAM: April 03, 2018. Analyst WorldACD says air cargo yields climbed to US$1.91 in February 2018, one percent above the previous month and 23.1 percent higher than February 2017:

“Given the aftermath of Chinese New Year (CNY), worldwide year-over-year (YoY) volume growth in February (+4.4 percent) was way below the growth reported for January, resulting in a combined growth for the year's first two months of 6.95 percent YoY: a good start of the year by any standard (except by the standard of the extraordinary year 2017!).

“Yet, we still reserve our final judgment, as past experience has taught us that the post-CNY effects may last as long as three weeks, in other words into March. The origin [traffic] Asia Pacific and Americas grew more than average in these two months (+9.3 percent and +8.4 percent YoY respectively). Europe, Central & South America and Africa were the best destinations (+9.5 percent, +8.5 percent and +8.4 percent YoY respectively).

“Colombia, Ecuador and Kenya - in this order - are the world's flower growing powerhouses; together exporting about 75 percent of the world's airborne flowers. February, the month of Valentine's Day, brought the largest volume increase in flower exports from Ecuador (+11 percent YoY), followed by Kenya (+9.2 percent) and Colombia (+7.1 percent) – the last realizing the largest YoY US$ yield increase of 14.6 percent.

“More than 85 percent of these exports went to the USA and Western Europe.

“Worldwide yields rose by 19.9 percent in US$ and by 3.8 percent in € in the first two months. The YoY oil price increase, as well as the lower value of the US$, remain important elements in this comparison. But there is more to interpret [in] these figures.

“Take the high-yielding markets from Asia Pacific to Europe & North America. Strong pre-CNY demand caused these large markets to grow much more in February than in January, thus boosting the average yield worldwide.

“Thus, the lower YoY volume growth in February was certainly not caused by the abovementioned large markets. The main reasons were (1) Asia Pacific as a destination showed a negative growth YoY, in particular to Hong Kong, Eastern China and Taiwan; and (2) originating Europe [traffic], having shown a 12 percent YoY increase in January, fell back to a paltry 0.5 percent YoY in February.

“WorldACD is one of the few organizations researching GSA-performance, which enables us to report on GSA-developments worldwide. Around 23 percent of air cargo volume is sold via GSA's. This percentage has remained fairly stable over the past years.

“Not surprisingly the percentage is much lower for the world's top 100 country-level O&D [lanes] - some 13 percent - than for the smaller markets (27 percent). We have data for 800 GSA's on record, together operating under more than 1,000 different brand names.

“In the world's latest Top-10, accounting for 35 percent of all GSA-business, we find ECS, ATC Aviation Services, Air Logistics, Kales, Aviation Solutions, FlyUS, Worldwide GSA, Nordic GSA, ScanPartners and Global GSA.

“They are mainly active in Europe and North America, where they take over 50 percent of all GSA-business. As the GSA-market is much more fragmented in Asia Pacific and the Middle East & South Asia, they take only about 14 percent and 19 percent respectively, whilst they are virtually non-existent in Africa and Central & South America.

“The largest group of GSAs remains WFC (World Freight Company), with brands like Air Logistics, ATC, Kales and Hermes Aviation. Number 2 (ECS) has lately been most active in acquisition. YoY volume growth for the top 10 in 2017 varied from 1.0 percent to 54 percent.

“In the top 100 country pairs, in 2017 GSAs produced yields for their principals on average 12 percent below the yields generated by airlines doing their own sales. In 2016, the gap was 10 percent.”

 World ACD data

ZURICH: March 01, 2018. According to Alain Guerlin, director  and head of Products, Services & Technology Management at Swiss International Air Lines, air cargo is entering a new era. Digitalization and new technologies are creating the foundation for new business ideas and models. However with all the players in the supply chain now demanding high quality services, he wonders whether there's more to it than just technology:

Digital transformation is happening everywhere: travel and tourism, retail, education, automotive, you name it. Where do we stand in the air cargo industry? Even though air cargo players are quite slow on the digital uptake, technologies such as electronic messages, smart data sharing platforms, blockchain, IoT, augmented reality, artificial intelligence are already a fact today and are changing the way we are doing business.

Startup companies and micro trends are also shaping our future (and they are doing it much faster than us!). Online marketplaces already exist where shippers and logistics providers can meet, based on preferences, requirements, budget...

But is it really all about technology? Technology alone is not enough. It is a matter of connecting technology with processes, data and, ultimately, people.

It takes intelligent process co-ordination to ensure the right info is reaching the right person at the right time. And it takes smart data to ensure smart decision-making.

At Swiss WorldCargo we have started our digital transformation with a focus on projects that can really enhance the customer experience and enable us to go for smart decision-making. For instance, we are looking at use cases driven by the Internet of things (IoT): there is potential to connect virtually anything (e.g. high-end sophisticated pharma containers) to the internet and accelerate data-driven logistics.

We are also looking at big data analytics and machine learning systems, which will allow to digitalise logistics processes and, at the same time, will bring about new ways of gaining in process efficiency, new opportunities to interact with our customers and ultimately also drive new business models.

Two growing business segments have especially been on our radar that are very much driven by this absolute necessity of modernization and meeting specific customer needs: Pharmaceutical & Healthcare and eCommerce. But we have also been looking at the whole subject of customer experience: we want to create an advanced level of customer service that extends beyond basic service activities, to include a more personalized and customized approach that creates value in a customer-centric business setup.

All in all, at Swiss WorldCargo we definitely support the call for modernization and digitalization, because we believe it will help us increase productivity and gain in efficiency, stay connected with our customers and meet their needs, offer the required visibility and transparency and, most important of all, enhance the customer experience.

Listening to our customers, as well as anticipating their needs, is the most crucial thing, because this is the only way we can remain relevant as a premium service provider.

Alain Guerin is the former head of Cargo Marketing for Swiss WorldCargo.

AMSTERDAM: January 31, 2018. According to the latest data from analyst WorldACD, global air cargo yield, including charges, reached US$2.05 by December 2017, 2.5 percent above November and 23.5 percent higher than the same month a year earlier:

"December 2017 saw a year-over-year (YoY) growth of 4.5 percent in worldwide air cargo volumes. Main contributors were the origin regions of Asia Pacific (plus 8.0 percent) and North America (plus 5.1 percent). Europe's growth was 2.2 percent only, whilst air cargo originating in Africa contracted by 7.5 percent.

"MESA (Middle East & South Asia) and Central & South America saw an increase in step with the worldwide average. It was Europe that grew most as a destination (plus 6.8 percent). Yield developments, however, drew most of the attention: Worldwide yields were up by 10 percent YoY, measured in €, and by a whopping 23.5 percent in US$.

"Compared to November, US$ yields rose by 2.5 percent, another noteworthy feature, as yields usually drop between November and December.

"For the four quarter as a whole, YoY volume growth was 6.6 percent, impressive in the light of the fact that air cargo - after years of a lackluster performance - started to grow again from September 2016. Of course, this fact made it more difficult for the industry to record strong year-over-year volume growth figures in the latter part of 2017. However, that difficulty did not stand in the way of serious revenue growth for the airlines in Q4, as yields in US$ started to grow with double-digit percentages from September 2017. "Capacity shortages in a number of markets, rate-of-exchange fluctuations, and rising oil prices all had a role to play in the resulting worldwide airline revenue growth of over 25 percent in the last quarter of a truly remarkable air cargo year.

"We can safely call 2017 a real bumper year. Many records were broken, and most signs remained on green for almost the entire year. Yet, the year was no different from other years in the sense that 2017 also knew winners and losers: Origin & Destination cities, sectors and companies that grew, others that lagged behind. Here is our top level YoY overview:

"While general cargo increased by 10.5 percent, specific cargo products grew 7.4 percent, making for an overall volume growth of 9.6 percent or 10.8 percent in Direct Tonne-Kilometers (DTK). Yield improvement in US$ was also larger in general cargo - plus 9.4 percent versus plus 5.9 percent.

"The categories with the highest volume growth were Valuables & High Tech., Pharmaceuticals and Flowers, with US$-yield increases of 8.0 percent, 5.4 percent and 1.0 percent respectively.

"The Top-20 forwarders in the world remained an exclusive club in 2017, not allowing new members to join them, and their expansion was in line with the overall market growth although the Top-5 - DHL Global Forwarding, Kuehe + Nagel, DB Schenker, Expeditors Int'l and Panalpina as a group outgrew their colleagues with rises of 16 percent versus 14 percent.

"GSA's fared best in the Asia Pacific region with volume growth of 15 percent followed by Europe at 12 percent and MESA 11 percent.

"Of the 50 largest origin cities, four recorded increases of well over 20 percent: Hanoi led at 25.5 percent followed by Brussels, Colombo and Ho Chi Minh City. Hong Kong remained the No.1 origin point, expanding at 16 percent.

"Of the Top 10 origin points, Amsterdam and Los Angeles showed slightly less growth than the worldwide average. Among the largest destinations, Doha, leading with 42 percent, Shanghai, Osaka, Hanoi, Mexico City, Chennai and Campinas (São Paulo) all grew their incoming volumes by more than 20 percent.

"The shares of total business for the individual airline groups remained reasonably stable with the exception of airlines from Africa. While business from their region lagged behind, their overall growth was much higher than the growth realized by other groups. Carriers based in Asia Pacific grew a bit more than average in 2017, while airlines based in Europe, the Americas and MESA lagged behind, albeit only slightly, thus giving up a tiny part of their overall share of the pie.

"With positive trends continuing throughout the past year, the big question is of course how long all this will continue. As Mark Twain reportedly once said, it is difficult to make predictions, particularly about the future."

Just-released IATA figures show that 2017 demand, measured in freight tonne kilometers (FTKs), grew by 9.0 percent overall – more than double the 3.6 percent rise for the previous 12 months. Meanwhile capacity rose 3.0 percent in the same period, the slowest increase since 2012, suggesting one explanation for the "remarkable" WorldACD data – FW.


AMSTERDAM: February 28, 2018. Air Cargo analyst WorldACD says the average global air cargo yield dropped to US$1.89 in January 2018 - 7.8 percent below the December level, but 16.8 percent higher than in January 2017:

"Taking the year-over-year (YoY) figures for January 2018 at face value, 2018 would seem to be off to a very good start.

"Virtually all airlines recorded US$ revenue growth, more than one third of all reporting airlines realized volume increases from 10 – 50 percent, and worldwide volumes were up by 8.5 percent (from Europe and Latin America even by more than 11 percent).

"The origin Africa was the month's outlier (exception) on two counts. It showed a negative volume growth YoY of [minus] 6.7 percent, [and] it was also the only region showing a positive US$ yield change month-over-month of 1.8 percent.

"All other origin regions recorded US$ yield drops from 1 – 10 percent MoM, bringing yields back from the lofty peaks they reached towards the end of 2017.

Top growth percentages YoY among the largest origins in Africa came from Ghana (23 percent); in Asia Pacific from Australia (26 percent) and Japan (21 percent); in Latin America from Chile (22 percent) and Colombia (14 percent); in Europe from Germany (18 percent) and the UK (10 percent); in the Middle East & South Asia from Bangladesh (9.0 percent) and India (3.0 percent); and in the USA from the Midwest (12 percent) and the Atlantic South (10 percent).

Yet, it is too early to qualify this year's start. We have the straightforward information that the worldwide US$ yield rose by 16.8 percent YoY in January, helped considerably by a devaluing US$ [as] the YoY yield increase was a mere 1.6 percent in €.

"Volume trends, however, are difficult to interpret as Chinese New Year (CNY) - a sizeable influence on overall trade – [began] on January 28 last year and on February 16 this year. CNY normally has two effects on trade: a spike in trade before, and trade diminishing afterwards. And although the negative influence is usually felt during the two weeks following CNY, the first four days (January 28-31 in 2017) bore the brunt of the decrease.

"Thus, with GDP-growth in the world continuing, one would expect January to be much better in 2018 than in 2017 - but by how much?

"Based on FTK-data for the first three weeks of January, we believe that YoY volume growth in this 'pre-CNY-period' may well have been in the range of 4-6 percent. A serious growth, surely, but hinting at an overall growth pace lower than the increase shown in the full January figures.

"Once February data will be in, we will be able to judge how the start of 2018 has really been.

"Looking one more time at 2017, we recorded the following trends in the various air cargo product categories. Average worldwide yield for special cargo (excluding perishables) was 45 percent higher than for general cargo; a year earlier, the difference was 50 percent. General cargo grew with 11 percent vs. 7.0 percent growth for other cargo categories, [while] the figures for 2016 were 3.0 and 5.0 respectively.

"High tech, flowers and pharmaceuticals showed the highest absolute growth of all special cargo. Biggest contributors to the growth in these categories were Hong Kong & Singapore, Colombia & Ecuador and India & Belgium respectively. Put differently, the biggest contributors to the growth in these three categories were DB Schenker, Cargomaster and Kuehne + Nagel respectively."

KUWAIT CITY: January 23, 2018. According to Tarek Sultan, the CEO of Agility Logistics, when the World Trade Organization released a report on small and medium-sized businesses in 2016, its biggest revelation was how little is known about them:

"SMEs, which employ most workers and account for 95 percent of all firms, are the lifeblood of the world's economy. Yet they remain understudied, underappreciated and underserved, little understood even by the larger companies that count them as customers and suppliers. What's more, they have been consistently ignored by negotiators writing international trade rules.

"The WTO says SMEs – companies with fewer than 250 employees – have been 'largely absent from the broad trade debate.' One result, it says, is that cross-border trade is more difficult and costly for smaller businesses than for larger companies.

"Beyond that, the WTO study reads like a confession or self-indictment. 'Relatively little is known about SME participation in trade, ... their decisions to start exporting, or the benefits they may derive from internationalization,' the report says. 'In the WTO context, SMEs have not figured very prominently over the years. A relatively small number of agreements have provisions that refer explicitly to SMEs.'


"In some ways, SMEs defy efforts to study them. A 'born global' start-up – say, a German firm selling digital wares – has little in common with an African micro-enterprise that lacks Internet connectivity and can't make bank transfers or count on reliable delivery of goods.

"Available evidence suggests a strong correlation between the technological savvy of small companies and the likelihood they will take part in cross-border trade. eBay data from 22 countries shows that 97 percent to 100 percent of 'technology-enabled' small firms export but indicates that only two percent to 28 percent of 'traditional' SMEs are exporters.

"Indeed, technology is the great leveler for SMEs. When it comes to trade, their biggest obstacles are access to distribution networks, information about border regulations and standards, trade finance, trusted payment mechanisms, and reliable, cost-effective shipping.

"A soon-to-be-published survey of 800 small and medium-sized companies by the digital freight platform ShipA Freight highlights the vital role of technology in the success of these businesses and hints at the rise of the global SME. Some 86 percent of those surveyed said technology is 'leveling the playing field' to allow them to operate globally. They identified high shipping costs, lack of visibility into those costs, and the complexity of international shipping as the main obstacles to selling across borders.

"Today, public sector and private sector actors are at last trying to solve those problems for SMEs. Governments are scrambling to create online resources with everything from how-to guides to matchmaking services to single-window export-import portals. E-commerce platforms are helping SMEs reach customers at low cost, share product information, establish trust and engage in web-based sales across borders. Digital platforms such as ShipA Freight are giving small businesses a secure, easy way to manage shipments online, walking them through compliance issues, providing payment mechanisms, and offering port-to-port or door-to-door delivery.

"Taken together, these developments give SMEs a 'virtual' scale they could never attain before or achieve on their own. And as both the platforms and the enterprises using them get more sophisticated, SMEs will improve their productivity, lower their costs and gain the ability to plug into global value chains dominated by larger businesses.

"The data on SMEs and trade is incomplete but fairly conclusive. Whether in developed or developing countries, smaller enterprises that do business across borders generally grow, profit, increase productivity, diversify – and survive – at higher rates than those that don't."

LONDON: February 26, 2018. With Britain's Conservative government continuing its attempt to cherry-pick a future EU relationship, David Jinks, head of Consumer Research at UK express shipping company ParcelHero, says its time to clarify the difference between retaining a Customs Union with the EU and remaining in the Single Market:

"Signing up to a permanent Customs union means no new tariffs on UK- EU goods and ends the threat of new red tape and border delays.

"In a speech at Coventry University Labour Leader Jeremy Corbyn said: 'we have long argued that a Customs union is a viable option for the final deal. So Labour would seek to negotiate a new comprehensive UK-EU Customs union to ensure that there are no tariffs with Europe and to help avoid any need for a hard border in Northern Ireland.'

"Without getting into party politics, as an international company that ships thousands of parcels a month to the European Union, we strongly support Britain remaining in a Customs union with the EU.'

"Membership of a Customs union means we will continue to share external tariffs with all EU member countries post Brexit – meaning no new tariffs and taxes between the UK and EU, and no border delays and complicated Customs Invoices just to send parcels and goods to France or Germany.

"Britain currently shares a common set of tariffs with EU on imports from outside the EU, for instance there is a 10 percent tariff on cars and a 2.7 percent duty on golf clubs from outside the Union. Continued membership of a Customs union with the EU will end the threat of new tariffs and taxes being imposed on UK exports to Europe and visa-versa.

"This means British goods won't suddenly become far more expensive and uncompetitive in Europe, and EU-manufactured products won't suddenly go up in price for British consumers.

"Signing up for a permanent Customs union is very different and less contentious than continued membership of the Single Market.

"A Customs union is not at all the same as the Single Market, which used to be known as the Common Market. While a Customs union is about what happens at the borders of the EU, the single market is about free movement of goods and services within the European Union.

"The Single Market applies not only to goods but also services, investments and people.

"It is the Single Market which requires the free movement of people within the European Union, to allow for the exchange of services such as plumbing. That is likely to be far more of an issue with Brexit voters than border tariffs.

"We hope that all sides come to realize that remaining within a Customs union with the EU doesn't go against the spirit of the vote in favor of Brexit and won't impact on discussions around immigration or remaining under EU legal jurisdiction."

LONDON: January 04, 2017. Over the December holiday period reports surfaced of U.S. DIY retailer Home Depot considering the acquisition of XPO Logistics in a bid to compete with Amazon.com. According to David Jinks, head of Consumer Research for UK delivery company ParcelHero, the takeover is "highly unlikely" as it would harm XPO's many UK retail and manufacturing clients:

"Speculation was rife just before Christmas that Home Depot – the American equivalent of B&Q - was considering buying XPO Logistics – in part just to ensure that Amazon doesn't snap it up first!'

"Some retail analysts believe Home Depot's mooted XPO take-over would actually help it become an Amazon in its own right; controlling not just the sales but the means of delivery of a huge range of items.

"Home Depot is presumably mostly after the final mile/home delivery side of XPO, which is probably only around six percent of what the logistics giant does. Equally XPO probably only gains around five percent of its overall income from Home Depot - so there is precious little synergy.

"Most importantly, XPO is a logistic provider for many of the UK's major brands. It runs UK supply chain operations for companies from Ford to B&Q to Iceland.

"Three years ago U.S.-based XPO took over the huge European logistics company Norbert Dentressangle, which [had already] absorbed two British transport giants, Christian Salvesen and TDG. The company is so integrated into many British retailers' and manufacturers' operations that it has become what's known as a '4PL' – running fourth-party logistics and supply chain services for many of its business customers: from handling their returns and refurbishing products to operating their customer-help lines.

"This enormous supply-chain knowledge is likely to be undervalued by Home Depot - which would consider the takeover very much in the light of domestic U.S. furniture and DIY deliveries. This is a flawed idea and it's to be hoped it was nothing more than the result of pre-Christmas excitement."

XPO Logistics employs 91,000 people at 1,444 locations in 32 countries to help 50,000 customers manage their supply chains.

At the end of its third quarter last year, Home Depot operated 2,283 retail stores in 50 U.S. states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam plus 10 Canadian provinces and Mexico. The company employs more than 400,000 people.

LONDON: February 08, 2018. Many British companies have already moved on from the EU and are looking at Australia as a major export market according to David Jinks, head of Consumer Research at shipping specialist ParcelHero.

"Ignore all the talk of the US or BRIC nations (Brazil, Russia, India and China) being at the forefront of British exports post Brexit. Since the vote, ParcelHero has seen a huge 54 percent rise in interest in shipping to Australia.

"Australia seems to have been overlooked in all the excitement about new emerging markets. Yet ParcelHero has seen a surge in shipments since June 2016. This is not surprising considering Australia is now the world's 13th largest economy, and our two countries have a shared language and Commonwealth heritage.

"Britain already ships £4.1 billion of goods to Australia, making it our 21st largest export market – but there is enormous potential to drive that up considerably further. It's not so long ago that Britain and the U.S. were almost entirely dominant in the Australian marketplace; now we are only its tenth largest importer.'

"Australia boasts one of the highest thresholds before there are any tariffs to be paid on imported goods, making it a highly tempting market for UK manufacturers and retailers. The AU$1,000 level means goods worth up to around £560 can be exported into Australia without incurring any duties or taxes – that's a very generous limit.

"Donald Trump's short-sighted decision to pull the U.S. out of the Trans-Pacific Partnership (TPP) that Australia was to launch with 11 other trading partners (including Japan, Canada and Singapore) has left the remaining TPP potential members regrouping and making very encouraging noises about including Britain in the Partnership, post-Brexit. This would lead to what amounts to a significant free trade deal with Australia and the other signatories.

"Australia's three major cities, Sydney, Melbourne and Brisbane, hold half its entire population. That makes targeting export sales to Australia easier than you might think, given how large the country is.

"ParcelHero is shipping products Down Under in ever greater numbers, from clothing and lighting to car parts and books. UK retailers and manufacturers are clearly building relationships and investigating markets in Australia in readiness for Brexit. We've also shipped quite a lot of distinctly British niche products recently, from ketchup and pickles to Highland dancing items – not surprising since 1.2 million Brits. have made Australia their home.

"So who knows what other markets remain untapped?"


AMSTERDAM: December 31, 2017. According to air cargo analyst WorldACD, November traffic figures confirm what most people in the industry already suspect: 2017 was a record year for airfreight:

“The record volume worldwide, as seen in October, has already been relegated to the history books one month later: November beat October by 1.3 percent.

“For the third month in a row, the year-over-year (YoY) yield increase in US$ had to be written in double figures, this time the highest since the recovery after the 2009-crisis: +17.3 percent YoY (note that the price of jet fuel increased by 35 percent over the same period).

“With volumes growing YoY at 7.8 percent in November and 8.9 percent in Direct Tonne Kilometers (DTKs), airline revenues in US$ for the month were more than 26 percent higher than in November 2016.

“The WorldACD volume index, showing every month the moving average for the then last 12 months, steadily increased over the course of 2017, from just over 120 in January to 131.6 in November (year 2008 = 100).

“The most striking feature of the November figures was the yield increase from Europe. Measured in euro, yields jumped by almost 19 percent YoY to all destinations worldwide. The Americas played an important part in this jump: YoY yields from Europe to destinations in North America rose by 28 percent and to Central & South America (C&SA) by 25 percent (40 percent and 36 percent respectively in US$).

“Other origin areas shared in the US$-yield bonanza with the exception of C&SA, which saw its overall yield decrease slightly YoY; while yields to its most important destination - North America - showed a marginal improvement of 1.3 percent YoY.

“In terms of November volumes, a number of markets showed double digit growth figures YoY. In the larger markets, these were Asia Pacific to North America (+11.5 percent), Europe to Middle East & South Asia (MESA) (+11.3 percent), and MESA to Europe (+21.1 percent).

“Of the smaller markets we should mention C&SA to Europe (+12.2 percent), North America to MESA (+19.5 percent), and MESA to Africa (+20.1 percent). Asia Pacific strengthened its position as a prime growth market.

“Looking at the various groups of airlines, we noted that airlines from Africa, North America Asia Pacific and Europe contributed more than average to the YoY volume growth of 7.8 percent with increases of 14.5 percent, 11.4 percent, 9.4 percent and 8.7 percent respectively.

“Airlines based in MESA grew by 5.2 percent YoY, whilst airlines from Central & South America saw their total volume decrease by 6.4 percent. Of the airlines growing more than 20 percent YoY, three are based in Africa, three in Europe and two in MESA.”


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