Friday, 17 December 2010

Britain's MoD shambles plays into Talebans' hands

A potential £36 billion shortfall of spending against funding over the next decade would be impossible in any commercial enterprise but for Britain's Ministry of Defence (MoD) it seems de rigueur. In Parliament's 10th Public Accounts Committee (PAC) 2010-2011 report the Committee's chair person, Margaret Hodge, MP, complains: "It is astonishing that the MoD has hitherto failed to develop a proper, long-term financial strategy linking its funding to its core priorities and providing a clear basis for making cuts. Instead, it has managed to stay in budget each year by making short-term and ad hoc, in-year decisions to cut programmes and defer the acquisition of kit. These have led to inefficiency and even greater costs in the longer term." In the case of the two delayed aircraft carriers such delay has cost over £1 billion.

Mrs Hodge should not have been so entirely astonished as the MoD has been out of financial control for many years, while its logistics record is lamentable. As mentioned on this blog site last April, the Defence Select Committee excoriated the MoD for its "Failures in the administration of service personnel and sensitive equipment." This led the National Audit Office to qualify the department's resource accounts for the third consecutive year.

The MoD's financial debacle could become even more onerous on long-suffering taxpayers. The size of the budget shortfall, admittedly, is highly susceptible to assumptions regarding future spending review settlements but further cuts in funding without cuts in outputs will cause the deficit to rise.

The PAC calls for an immediate change to the situation and welcomes the MoD's appointment of a professionally qualified financial director, the erstwhile absence of which beggars belief in an organization spending over £42 billion a year. But without much help from a cadre of similarly qualified staff he is unlikely to restore sanity to the MoD's finances any time soon. He will also be stymied by a civil service mentality that breeds a culture of timidity. Senior officials, for example, failed to challenge unaffordable decisions about equipment procurement by referring matters to ministers.

Finance is only one lamentable issue with the MoD. The department would also profit from highly experienced logisticians. This would reduce the likelihood of repeating past embarrassments, like the Army's relatively new £1.3 billion BOWMAN project. This tactical communications system which provides integrated, secure radio, intercom and internet services left a black hole of another kind which could even compromise national security, namely the apparent disappearance of £155 million of battlefield radios. "Having an effective audit trail is the only way to ensure that all equipment is accounted for," remarked the defence committee chairman, James Arbuthnot, MP, earlier this year.

It would also be helpful if cabinet politicians took a few lessons in logistics, for when war beckons sound logistics advice will be drowned by jingoistic politics. The war in Afghanistan is a good example. This country not only poses nightmarish logistical problems, it also has an ideal guerrilla warfare terrain favouring the Taleban, whose logistics costs per capita are less than one tenth of the coalition's forces.

Britain is not only bleeding on the human front but is moving closer to financial ruin as the war in Afghanistan reportedly hits $2 billion a week. The war is also of a nature that cannot endear local people to the occupying forces. During World War 1, 10% of all casualties were civilian. In World War 2 that percentage rate soared to 50%. By the time of the Iraq and Afghanistan wars a tragic 90% of all casualties were civilian, reportedly leaving 750,000 women widowed, hardly a strategy designed to win over the hearts and minds of local populations, without which there can be no durable peace in that much vexed land. Rather, it will bequeath a long, festering hatred of the West translated into tragic, violent outbursts on Western soils, the cost of which will not be cheap.

Tuesday, 7 December 2010

Container payload scams end in sight?

Mandatory container payload weighing may be one step nearer following the recent urging of the International Maritime Organization (IMO) to make weighing of all export container cargoes legally binding at all ports. Following the Dutch research institute MARIN's research project, "Lashing at Sea," the World Shipping Council (WSC) and the International Chamber of Shipping (ICS) have urged the IMO to establish an international legal requirement for all loaded containers to be weighed before loading a vessel.

MARIN's research project found that the shipping industry's guidelines have had little discernable effect on minimising the occurrences of incorrect weight declaration. MARIN says that there have been severe cases where the total cargo weight of a ship was 10% higher than declared. Accident investigations by the UK's Marine Accident Investigation Branch (MAIB), however, suggest that the problem could be far worse.

When investigating the beaching of the container ship, MSC Napoli, in 2007, MAIB found that 20% of all on deck containers were over three tonnes heavier than their declared weights, i.e. more than 10%, and in one case it was 20 tonnes. Such discrepancy, said the MAIB report, "is widespread within the container ship industry and is due to many packers and shippers not having the facilities to weigh containers at their premises. It is also due to shippers deliberately under declaring containers' weights in order to minimise import taxes calculated on cargo weight, allow the overloading of containers, and to keep declared weights within limits imposed by road and rail transportation.

The temptations to falsify cargo declarations are high because not only do the exporters and/or container packers save money on import duties but they also swindle the container shipping lines, who lay down specific payload limits in different-sized boxes. No figures, of course, exist on this global scam but the 141 million TEUs transported by sea in 2007, or 1,272 million tonnes, suggests the scams cost billions of pounds every year. Just as serious, however, is the risk to seamen's lives, their ships and the environment. Without correct container payload declarations, port crane operators cannot stow containers correctly and so risk destabilising a ship in rough weather as well as place intolerable stresses on ships' hulls.

The risks of losses are not confined to sea, but can affect inland businesses geared to Just-in-Time deliveries. When a container crane in Southampton collapsed on a ship in 2007 it brought the Honda car plant at Swindon to a halt because car parts on board ship were delayed. Some 19 months on, the Health & Safety Executive (HSE) report into that accident had still not been issued when a second container crane of the same make and design, on the same berth and subsequently altered by the same company also collapsed, with near fatal consequences. On both occasions the weather was benign, and overloaded containers were considered a possibility. Container ships have also been known to list while berthed during unloading, tipping their containers into harbours.

Clearly, the word of container packers and consignors on payload declarations which has been taken on trust for so long can no longer be trusted. Weighing must be the answer but how pervasive should that be? Kalmar, a leading port handling equipment supplier, believes that the best place for weighing to be done is where the lorries and trains have their containers transferred to a stacking area by reach stackers, RTGs and straddle carriers. Weighbridges at port entry would only cause bottlenecks and ship-to-shore cranes should be ruled out as this would be too late in the process.

Nearly all of the straddle carriers and RTGs delivered in the last seven years by Kalmar can be retrofitted with optional modules. It would then only remain to include the weighing information in the data exchange between the machine and the terminal operating software and for the TOS to compare the declared weight with the actual weight that has been recorded by the port handling equipment.

It makes sense, however, to extend the weighing function to container packers by having them fit their own forklifts or pallet trucks with weighers. A container packer being told by a port operator that his containers' payload declarations are erroneous and must be resolved by him before shipment will not endear him to his principals if his container shipment misses the boat. Such forklift and pallet-mounted scales start at £2,000 and £800 respectively in the UK.

Container packers, however, who do not wish to invest in forklift-mounted scales have an alternative in companies like Containerlift whose container-lifting vehicles can be fitted with weighers, thus avoiding the need to visit weighbridges and risking a roadside spot check.

On August 20, 2008 this writer warned in of the need to install weighers at ports and at container packing premises to combat fraud and make the seas safer. It reflects badly on the IMO that little has been done since then to eradicate this odious, callous fraud that treats seamen's lives so contemptuously. Ignoring that old Royal Navy expression, "Get your fingers out," is no longer an option, and could be equally applied to the HSE over its tardy accident investigations.
UK suppliers of forklift/pallet truck-mounted scales include: Avery Weigh-tronix, Novaweigh, Ravas UK, RDS Technology, Timotex, Weightron UK.

Wednesday, 1 December 2010

Articulated Forklifts Could Save Cold Stores Millions

As the public's food buying patterns change, articulated forklifts could become the economic saviour of cold store operators. Compared with ambient stores, cold stores are far more costly to build and run. In environments where operating temperatures are typically minus 25 C, energy costs average between 20% and 30% of total warehouse running costs, but it can be far worse. One study by Bristol University, for example, found that initially efficient freezing plant can become very inefficient over a few years, consuming more than eight times the energy of the most efficient cold stores. As if that were not bad enough, owing to the high use of electricity or fossil fuels cold stores get pilloried by environmentalists, an unwarranted criticism that will be touched on later.

There are many factors influencing cold store energy costs, particularly warehouse size, and some are cheap and easy to improve, like dealing with energy losses at unsuitable doors which lead to ice build up on floors, slipping accidents and more frequent, costly defrosts. A fast payback solution here would be rapid roll PVC doors with crash-out facilities. But even in the best run cold stores, the cost of energy influences the choice of racking in which the overriding consideration is to maximise storage density.

Currently, the most popular forms of cold store pallet racking are drive-in, mobile and live (flow) storage. They all have the advantage of high storage density but all will be compromised by the public's changing food buying patterns if those patterns continue to grow.

One clear trend in the UK over the last five years has been the increase in frozen food sales, thought to be worth about £7.5 billion today. Whatever the reasons for this, like changing public health perceptions that show frozen food in a more favourable light than fresh and chilled food, it is clear that existing pallet racking configurations will not cope as efficiently as before. This is because cold stores need to be able to adopt the storage and picking methods of the chilled and dry grocery product sector, says John Maguire, sales director of Flexi Narrow Aisle, who have been providing articulated, cab-equipped forklifts to the cold store sector for five years. That means much faster access to all pallet loads.

Drive-in racking offers instant selectivity of a poor average of only 30%, based on first in last out. It is also notorious for high damage levels owing to tight tolerances in which forklifts must work. Mobile racking offers 100% selectivity but is ponderously slow as drivers must wait until the appropriate aisle has been opened and only pallets in that aisle can be accessed at any one time. Mobile racking is also three times more costly per pallet stored than conventional, fixed pallet racking (APR). Flow storage is likewise relatively costly and lacks 100% instant pallet access.

Given that frozen food storers now face growing demand for greater and faster pallet selectivity, additional pick face replenishment activity and customer case quantity order assembly, the racking most suitable for that activity is very narrow aisle racking (VNA), which offers 100% instant pallet accessibility. In the light of high energy costs, the most cost-effective choice of forklift must be the articulated truck.

Currently, reach trucks with heated cabs dominate the truck of choice for cold store whole pallet load work, followed by dedicated, man-down VNA machines. Reach trucks, however, need at least 2.5 mt wide aisles in which to work compared with just 1.6 mt for articulated trucks. That means the articulated truck can typically store 33% more pallets in any given cube and 50% more than conventional counterbalanced trucks, which need minimum aisle widths of 3.5 mt. There is also not much price difference between a heated, cab-equipped articulated truck and reach truck, claims Translift Bendi, who have just launched their first heated cab model, the Arctic, for cold stores. Such a truck will cost about £40,000 compared with a reach truck's £35,000 to £40,000. VNA man-down trucks, however, start at around £60,000, plus the cost of rail or wire guidance. They are also slow and inflexible.

The big advantage of heated cabs is that drivers can work a full eight hour shift. Otherwise, accepted practice means drivers should take a 15-minute break in every hour. Cabs are also likely to reduce time lost through driver illness.

In ambient storage, such has been the impact of articulated forklifts that many warehouse operators design their racking arrangements around them. For cold stores now faced with changing food buying patterns, it would be foolish to rely always on previously selected cold store trucks and racking methods.

Environmentalists and food retailers could also take comfort if the trend to more frozen food buying continues. It would mean, for example, less waste than other choices because at present much chilled food fails to sell by its 'best before' or 'sell by' date. Unsold produce, if not drastically cut in price on the sell by date, goes to landfill sites and its disposal costs the food industry millions of pounds every year. Organic foodies may also feel kindlier towards frozen foods as they contain fewer chemicals and preservatives than chilled food because freezing in itself is a preservative.

In the British Isles there are only three manufacturers of articulated forklifts: Translift Bendi, Flexi Narrow Aisle and Aisle Master. In America there is a version of the Bendi produced by Landoll, of Kansas.