Beware fiddling your container load declarations

 Taiwanese container shipping line, Wan Hai Lines, has announced large fines and other costs for shippers whose container load declarations are inaccurate, as part of a crackdown on maritime crime that has bedevilled the industry for decades. For hazardous cargo the fine will be $30,000 per container and $20,000 for non hazardous. 

Container load discrepancies are widespread, despite an IMO compromise in 2013 on making weighing containers mandatory, a watering down that infuriated various governments and interested marine bodies . The beaching of the MSC Napoli container ship off the Devon coast in 2007 showed the breathtaking scale of fraud involved that also imperils ships, seamen road safety and the environment. Britain's Marine Accident Investigation Branch found that 20% of all deck containers on board the ill-fated ship were three tonnes heavier than their declared weights and in one case was 20 tonnes. 

Such discrepancies may have been partly due to many packers and shippers not having the facilities to weigh containers at their premises but the incentive to fiddle is huge. By deliberately under declaring container load weights shippers can minimise import taxes calculated on cargo weight, but it also allows overloaded containers to keep declared weights within limits imposed by road and rail transportation. Container shipping lines are also swindled. Other container lines will doubtless follow suit so shippers and packers should treat this as a warning shot across the bows.  

The ill-fated container ship, Napoli, beached on a Devon coast after a storm that exposed arguably shipping's greatest fraud.

Innovation on Sany's reach stackers yield one-year payback

 It is rare to find innovation giving costs and environmental advantages that repay the initial investment within one year yet that is what Sany has done with its energy recovery system (ERS) on its H9 20ft and 40ft container handling reach stackers.

Sany uses ERS that has been around for 20 years but only recently has it used the technology on its reach stackers, ostensibly the first and only to do so. Unlike many reach stackers it uses four cylinders for lifting and lowering, two of which are placed behind the driver's cab. These rear cylinders use the downward gravitational forces to charge nitrogen accumulators which in turn provide extra power over and above the available engine power for the next lift. The result is that theH9 stackers give more than 50% fuel savings over an identical machine without the ERS. Competitors use another system called flow drive transmissions with smaller engines but achievable fuel savings are only 25%.

How, though, do the investment figures stack up to justify the extra £25,000 to £30,000 for fitting the ERS? First consider the impact of the UK's abolition of red diesel for off road vehicles on April 1st this year. The lower duty on red diesel was only 11.14p per litre compared with the full duty rate of 57.9p for regular diesel, a huge difference. Now let's assume that a £380,000 yard reach stacker consumes 20 litres of diesel per hour. The ERS technology consumes only 9 litres of fuel per hour. Assuming a saving of 11 litres at £1.20 per litre and 2,000 hours work a year that equates to a saving of £26,000 every year, hence the one-year payback. 

Not to be left out of the advantages is the environmental one that means far less exposure to diesel fumes and a cleaner, greener atmosphere. David Cooper, MD of Cooper Specialised Handling, the sole UK importer of Sany lift trucks, claims the H9 technology is the most radical change in reach stackers in the last 20 years. The technology certainly bears consideration.

A Sany H9 container handling reach stacker with the fitted ERS system for cutting fuel costs by over 50%

 

 

In praise of articulated forklifts

When first launched in Britain in the 1980s* the articulated forklift was derided by the competition as a Heath Robinson contraption that would go nowhere. Today it has found universal acceptance through the dramatic transformation of warehouse economics but is there still market reticence and ignorance of such trucks' full potential?

One hears a great deal about how space efficient the artics are over the conventional counterbalanced and reach trucks and understandably so because saved space can have knock-on benefits of reduced rates, rents, heating, transport costs, etc but is there much more to it than that? Yes, a great deal more. 

Take, for example, the artics' flexibility which leads to big productive gains, especially when they are fitted with RDTs. Such add-ons allow them to unload lorries in yards, where reach trucks are not really suitable, to deliver pallets directly into racking, and directed by the WMS then go straight to extract a pallet load for delivery to a waiting lorry. This can sharply reduce forklift fleet sizes and maintenance costs. 

I mentioned transport cost reductions as an advantage. This can be considerable when artics eliminate satellite warehouses through their space savings and the transport costs of running between them and a main warehouse which could be part of a production facility. 

So next time when strapped for storage space why not consider the artics as the answer to your prayers? UK suppliers of the artics are Translift Bendi, Flexi Narrow Aisle, Combilift and Mima (Wilmat Handling)

*The functionally limited Towmotor of the 1960s excluded.  

An articulated forklift shows the incredible 

space savings over a cb truck (up to 50%) and 

up to 30% over a reach truck 

Will Ukraine crisis cripple global logistics?

 Politics can disrupt logistics big time and so all logisticians should be concerned over the political crisis enveloping the Ukraine and making contingency plans accordingly. How events will turn out is unclear but is there something of double standards at work and a sense of deja vu, at least in part which hopefully will concentrate minds before it is too late?

Russia has genuine security concerns about the Ukraine becoming a NATO member, which if enacted would allow NATO in certain circumstances to park nuclear weapons on Russia's doorstep. If NATO is encouraging the Ukraine to join them that would be irresponsible because NATO does not need the Ukraine as a member, other than its ostensible desire to encircle and contain Russia as much as possible. So what do I mean by double standards and a perilous deja vu possibility?

In 1962 the Cuban missile crisis brought humanity to the brink of a nuclear third world war. Cuba, a sovereign country on America's doorstep, had allowed Russia to install nuclear-capable missiles but America, invoking its own Monroe doctrine, used force of arms to stop Russian freighters at sea. Evidently, it was acceptable for America to have a Monroe Doctrine excuse but not for any other countries expressing genuine, similar security concerns, hence the double standards at work and sense of deja vu. 

One possibility for a solution is that if the Ukraine became a NATO member then NATO should give an unconditional guarantee that no nuclear weapons and their delivery systems would be placed on its soil. The NATO camp should also not forget the huge debt the free world owes Russia for its appallingly high sacrifices to rid the world of its worst political scourge, namely Nazi tyranny. 

                                          Russian tanks ostensibly massing on Ukraine's border

Real culprits in UK lorry driver shortages

 Logistics has long been the poor relation of Britain's economy and despite all the breast beating by interested parties not much has changed but who are the real culprits who have given the industry a reputation for low pay, which is a key driver for workplace shortages?

Right now there is a clutch of problems plaguing global logistics but many of these, like the chaos surrounding container shortages and long shipping delays, are short-term. Years before Brexit and Covid 19 the seismic change in the way we all shop exposed the perennial problem of driver shortages, currently estimated at 60,000 in Britain. The ingredients of this shortage were low pay, long unsocial hours, dreadful roadside facilities for drivers to wash, eat and feel secure in their parking compounds, all experiences unknown on the Continent where drivers are treated with more respect.

The factors that led to this parlous state ultimately lie at the door of manufacturers and retailers whose obsession with maintaining good profit margins was at the expense of the 3PLs' margins which were often wafer thin, causing bankruptcies. This is important because much of Britain's goods movement is done by 3PLs often locked into 5-year contracts where they have little room for manoeuvre when their costs rise. In short the 3PLs were screwed long term by their clients and were helped in this by their exploitation of cheaper, foreign drivers.

It has been aired that the labour shortages are being blamed for distress in other areas outside logistics, like in food production, and here the post Brexit return of EU nationals, including drivers to their native countries, is blamed. Such distress, however, is short-term and can be addressed by a mixture of automation and better pay and conditions. In the broccoli picking fields of England, for example, a robo veg picker has been successfully trialled and while costing £400,000 it can replace seven human pickers who can earn up to £30 an hour and such robots are likely to fall in cost when economies of scale improve. 

So if we see driver and warehouse operators' incomes rise would the downside by significant inflation? This is a difficult one to call but we should remember that logistics (distribution and storage) forms less than 10% of a product's retail price and when the current, transitory logistics upheavals have normalised it should not be too worrisome. Meanwhile some mea culpa would be in order by the ultimate culprits, namely manufacturers and retailers, who are hoist by their own petard.

More respect for drivers would see less of this

Britain's first electric general cargo port crane proves 'green' economics

 As a UK general cargo port Ipswich may not be big league but it surely ranks with the best when proving the case for 'green' port economics. Ports going fully electric when handling container movements, particularly on mainland Europe, have been around for over a decade but when handling a wide range of general cargoes they are much scarcer but the owners of Ipswich, Associated British Ports, saw not only the business case for going all electric with their cranes but also listened to their customer's desires.

Hitherto, Ipswich, which handles over two millions tonnes of general cargo a year, worth over £600 million, making it the biggest export port for agricultural products, relied on a Mantsinen 95R diesel crane. Its two new, free-ranging cranes on order, the 95RE, part of a £4 million investment, are due to begin service next year and are believed by Cooper Specialised Handling, Mantsinen's UK partner in the supply contract, to be the first fully mains electric powered hydraulic cranes in a general UK port application. What's more they have been configured around the idiosyncrasies on the quays of the Orwell river. 

The new models, for example, will benefit from a 4mt centre undercarriage, some 2.5mt narrower than the standard crane yet does not compromise operational speed. They will be capable of handling over 500 tonnes an hour and its Insight telematics system will work out the cost per tonne moved. 

So what of the economic case? ABP has already reduced its greenhouse gas emissions by 35% at Ipswich since 2014 and its latest investment will mean all its cargo handling operations will be fully electrified within five years, much reducing its CO2 emissions and noise. This is helped by the existing 4,000 solar panels which will generate enough energy for the two new cranes. Its investment in an electricity sub station infrastructure will future-proof it to accommodate up to four electric cranes working concurrently on the same quay. ABP, which plans to decarbonise all its ports, estimates the electric cranes will save over 40% in energy costs and to quote a company spokesman: "Going green does not cost the Earth."

A Mantsinen 95ER electric crane at work in Rauma

  

Very narrow aisle working gets safer

 Long-known for their space-saving advantages, articulated forklifts, however, require higher safety-conscious drivers when working in aisles 1.6mt-1.8mt wide than needed for drivers of conventional, counterbalanced and reach trucks in much wider aisles. This is one reason the more conventional forklift drivers need to retrain on articulated trucks. 

Collisions between forklifts and racking are a major cause of the worst kind of accidents after fire, namely domino-style rack collapses. Many of these collisions may be minor but how often are they reported to management? Accumulated, unreported damage of that nature if left ignored can lead to a disastrous collapse eventually. 

Now, however, that risk can be significantly cut if the trucks are fitted with Smart Stop, 'touch-sensitive' sensor, a recent, innovative device from Narrow Aisle fitted to their Flexi trucks which disables a truck after a collision with racking or pallets when in aisles. The drivers cannot override the system and so are forced to report the accidents to management for appropriate action. 

Smart Stop is quickly fitted to a truck's left and right-sided flanks and should go a long way to negating the problems of drivers who fail to pass on details of racking collisions. In Britain alone there are about 100 domino-style racking collapses, some involving fatalities.

To cut the risk of this with articulated forklifts consider adding touch-sensitive Smart Stop sensors to Flexi trucks.  

Why climate change solutions may fail

 Throughout history Man has faced many threats but none has reached the global level posed by climate change today. The many causes have been highlighted and solutions proffered but are we shying away from one cause because it is considered almost taboo to discuss it? 

It will surely never be enough to rely on cleaner energy technologies alone to stem Nature's indifference to Man's proposes. The source of the problem, Man, will not only need changing of long-treasured habits like meat-based diets but a much greater effort to control population numbers responsibly. 

We all know that in developed countries the social fabric and high incomes have seen reproductive rates  fall to at or below replacement levels but that is far from so in developing countries where social and religious mores play a role. There is no reason to believe that if these countries reach a higher level of prosperity that they too will not feel the need to maintain higher reproductive levels but it will need non-economic changes. The migration flows, for example, are not only fuelled by economic pressures but political and religious clashes. The former will not be relieved until misgoverance and corruption have been excised and the latter will hold back economic progress. 

Comprehensive policies to fight climate change should, therefore, include demographic, political, social and religious changes if the cleaner energy technologies proposed are to have any chance of success. If not, Nature may do it for us in frightful ways.     

    Nature reflects the four horsemen of the apocalypse?

Reform e-commerce habits or face road gridlock?

 If humanity is to pay more than lip service to the need for a sustainable environment it seemingly has no choice but to reform its attitudes towards e-commerce or face the perfect storm that could lead to the UK's road network , in particular, grinding to a halt by the end of this decade. That, at least, is the view of Colliers' UK head of research and economics, Walter Boettcher, and is one hard to gainsay. 

When some 40 years ago I wrote in Materials Handling News on e-commerce potential I said that the coming of e-commerce could deliver an environmental boon by reducing weekly car journeys to supermarkets and accidents. What I had not envisaged was the way that boon would be undermined by the fatuous way online shopping has been allowed to develop, namely consumers ordering just single, small low-value items and multiple items with every intention of returning all but one, a practice today that most online retail suppliers admit can be loss-making through reverse logistics costs. 

The current e-commerce distribution model has a substantial environmental footprint that may equal, if not exceed, that to traditional bricks and mortar retailing, averred Mr Boettcher, adding that the anticipated large scale repositioning of these assets into other uses could unwittingly exacerbate the problem and undermine the path to net-zero.

Colliers predicts that more than 38,000 additional HGVs will be required in Britain to satisfy existing demand, impacting all pledges to reach net-zero. This predicted increase in HGV movements risks counteracting any decarbonisation of transport seen in the shift to electrifying vehicles and highlights the challenge of balancing economic growth, our changing way of life post Covid and the increasing, pressing needs to counteract the climate emergency. 

Unless consumers become more aware of how their e-commerce deliveries affect their carbon footprint so their decisions go beyond the most convenient or cost effective, then Nature's recent warnings will surely be just a mild foretaste of far worse to come. 

                Recent devastating flood destruction in Germany a foretaste of things to come?

Climate change poses new logistics problems

 Much has been said about climate change remedial action but little progress has been made. Climate change deniers still point to much bigger changes long before the advent of Man and while that is true there are still, nevertheless, uniquely new conditions today, in particular a huge number of people totally dependent on global logistics for survival through trade. 

The threat to humanity from climate change is, perhaps, greater than most people imagine. There are basically two kinds of threats: the destruction of the means of production and the damage to infrastructure that facilitates the distribution of that production. Droughts, floods, heat, typhoons and hurricanes can all damage food production as well as destabilise society through mass migrations and conflicts over resources, like water. 

The second threat, namely damage to the infrastructure like roads and railways, is no less worrying. Extreme heat can buckle train rails, melt roads and close airports, making them unusable while extreme floods can wash away roads, bridges and railways. Rising temperatures will also raise the risks of forest fires while melting permafrost would release methane gas far more harmful than CO2 emissions. 

There is one other uncomfortable problem which is almost taboo to discuss. We cannot deny that growing population numbers is part of the climate change problems and if we do not address that properly Nature's insouciant ways may do it for us savagely. 

                                           The effect of heat-buckled rails

Beware the banksters

As global wealth grows so does the level of rapacious greed and nowhere is this more evident than among the global banks which took on a new dimension following their role in the American sub-prime housing mortgages scandal that burst in 2008.

Pressed to rebuild their weakened balance sheets, they egregiously embarked on criminal devices helped by complicit lawyers, accountants, land valuers and insolvency practitioners to steal an estimated £100 billion from their own customers with viable, profitable businesses.  

Labelled the biggest bank robbery in history, the ruses used were vehicles euphemistically described as global restructuring group, specialist manning devices and restructuring business experts brought in by the banks who, once in control of companies after suddenly calling in their loans would sell them off at a fraction of their worth to American vulture funds. Just one senior UK bank manager was found guilty of defrauding the bank's customers of £1 billion.

In this monstrous culture of "sometimes you let customers hang themselves because missed opportunities mean missed bonuses" it is hardly surprising that the banks left a swathe of SME owners suffering from marriage breakdowns, homelessness and suicides. 

The lesson is choose the smaller banks if feasible and always check the small print, even if it needs bringing in independent contract assessors.

London's towers to mammon the new reptilian dinosaurs?

 

New articulated forklift entrant promises UK market shake-up

The UK articulated forklift market faces its biggest potential upset in years as a new entrant makes its debut with truck prices that could undercut its three rivals by up to 30%. The company is MiMA, founded in China 27 years ago and offering a broad range of electric handling trucks, tow tractors and specials like die-handling trucks of up to 30t lift capacity This last expertise is what particularly attracted Wilmat Ltd,* newly appointed UK agent for MiMA, who produces similar specials but only up to 15t capacity. They will be handling the MiMA articulated product range roll out across the UK and Ireland in the second half of this year.

MiMA developed its articulated forklift range last year with rated capacities between 1,500kg and 3,000kg but only the 2,000kg model will be available in the UK at present in two versions: 1) narrow aisle up to 10mt lift in safe working aisle widths of 1.9mt (800mm x 1200mm pallet) and 2) a wider version for 2.1mt aisle widths. All models will be electric only with lithium-ion offered as an option. There is optional fingertip control with the hydraulic steering.

Wilmat is currently looking for UK and Irish agents to sell and service in their areas. Truck provision will be through a range of options, including purchase, lease purchase, long-term contract hire and full maintenance and short-term hire.

While the articulated MiMA trucks will be the flagship of Wilmat's new Chinese venture its product profile will be greatly enhanced by other MiMA trucks, including reach, electric pallet trucks, stackers tow tractors, counterbalanced forklifts, order pickers, stand on-and seated man-down VNA trucks, and sideloaders, both stand-on and seated. 

When the articulated forklifts appeared on the UK market in any meaningful form back in the 1980s the perception was that they were expensive in relation to reach trucks, a hopelessly wrong approach to truck comparison values because it underestimated the productivity gains and huge savings from interface costs like rent, rates, utilities, truck numbers and servicing that the artics' versatility ensured. The true coast of any forklift is its life-cycle costs in which productivity rates play a key role. No other type of forklift has transformed warehouse economics so much. In certain circumstances where the space they save in a main warehouse allows the closure of satellite warehouses the added savings in transport costs could yield truck paybacks in under one year. 

* sales@wilmat-handling.co.uk    

                                         MiMA articulated forklift set to shake up UK

                                         market 

Why pallet rack collapses need not be worst warehouse nightmare

 Unique system offers full protection

After warehouse fires every manager's worst nightmare is a domino-style racking collapse but in one sense the latter is worse. Fires can be quickly detected and contained by sprinklers and other devices but total racking collapses cannot when, for example, forklifts hit upright posts (legs) and that is where RCP's* patented, unique Rhino system comes in. Until five years ago all pallet protection measures outside of best practices depended  on post protectors, bollards and guard rails but these offered very  limited post protection to no more than about 1.2mt above ground. The Rhino system, however, suitable for both new-builds and retrofits, uses steel cables suspended from roof structures to the upright aisle posts so that it does not transfer the compromised rack load but stops it leaning past the point of no return, thus preventing progressive rack collapse. 

One of RCP's latest Rhino contracts is for garden shed supplier Kybotech, of Worksop, whose 20,000+ pallet store typically has a top beam height of 14mt, served by Bendi articulated forklifts in 2.6mt wide aisles. Pallet weights are typically 600kg and some pallets are special sizes for abnormal loads. Kybotech sell to the trade on timed deliveries, which stresses the importance of uninterrupted deliveries. Before the Rhino installation Kybotech's racking safety measures comprised routine inspections and rack leg guards, very common throughout warehousing. Previous rack damage was dents from small impacts on the lower legs, which if undetected can cause rack failure. So why did Kybotech feel the necessity to step outside the safety norm?

"Safety for its employees was paramount above all else," explained Craig Atwell, RCP's MD. This is commendable but it also makes sound financial sense. Whatever extra safety measures may cost the cost of an accident like total racking collapse is far worse and not fully covered by insurance. In certain situations like a large charity's warehouse responding to an emergency call, a total racking collapse would be unthinkable.

Trying to measure the immediate cost of a total pallet racking collapse is easy enough and will largely be covered by insurance but will the insurance pay out for the consequential costs like permanently lost business through failed timed deliveries. And if it can be shown that the management was negligent in a fatality any hefty fines would likely not be covered. Moreover, future insurance premiums would soar. "Insurance companies would look to the bare minimum and challenge continuation costs," added Craig. But with a Rhino system in place warehouse operators could expect noticeable insurance premium reductions given that total stock loss has been eliminated and therefore this should be reflected against risk.  

UK fatal racking collapses are rare, about one a month, but serious injuries are measured in their hundreds and there is at least one major rack collapse every week. The main causes or rack collapses can be summarized as: 1) Inadequate design, 2) Incorrect installation, 3) Overloading at pallet locations, 4) Damage, 5) MHE impacts, 6) Supporting floor failure, 7) Environmental or chemical deterioration, 8) Change of configuration away from which the racking was originally designed, 9) Poor weight distribution on pallets or pallet failures. There is a 10th but that only applies in earthquake-prone zones. 

Good advice on all the angles of racking safety can be had from the UK's Storage & Equipment Manufacturers' Association (SEMA) and HSE. 

*Rack Collapse Prevention Ltd. www.rcpsystem.com 

Rhino at Kybotech gives far more than peace of mind

 South China Sea tension rises

Any plan Bs international logisticians may have for dealing with disruptive political events in the South China Sea should be re-examined for their resilience as events in that sea took a turn for the worse in late January. 

Having spent considerable sums illegally developing and militarising shoals, reefs and atolls in the Spratly and Paracel islands since 2013 China has just passed a new law that for the first time explicitly allows its coastguard to fire on foreign vessels around these islands, said to be rich in oil an gas reserves. It has also sent its coastguard to chase away fishing vessels from other countries, sometimes sinking them. The law allows the coastguard to use "all necessary means" to stop or prevent threats from foreign vessels. The law also allows coastguard personnel to demolish other countries' structures built on Chinese-claimed reefs and to board and inspect foreign vessels in waters claimed by China. 

Responding to international concerns, the Chinese foreign spokeswoman, Hua Chunying, said the law is in line with international practices and needed to guard China's sovereignty, security and maritime rights, despite the Permanent Court at the Hague ruling against China's so-called Nine Dash Line claiming about 90% of the South China Sea, through which about two thirds of world trade passes, worth over US5 trillion each year. China has indicated that it has no intention of respecting the Court's ruling.

Brinkmanship rises 

On January 23 China cranked up the tempo when it sent a large group of bomber and fighter jets into Taiwan's air defence zone near the Pratas Islands. On the same day, America sent a carrier group headed by the USS Theodore Roosevelt into the South China Sea to conduct routine operations "to ensure freedom of the seas, build partnerships and foster maritime security," said the fleet's rear admiral Verissimo, adding "it is vital that we maintain our presence and continue to promote the rules-based order which has allowed us to prosper."

Losing face in the Chinese psyche is akin to committing hara-kiri, a mindset that like a fever in the blood can ignore powerful economic reasons to steady the boat in the interests of all parties. China will continue to probe with its military might, testing the resolve of others, and its recent history of success, as when it bayonetted its way to Lhasa when the international community just indignantly huffed and puffed in response, leaves no cause to be unworried. Yet, the matter may be resolved without man's proposes, for just as man proposes Nature disposes. 

China's illegal artificial islands are badly exposed to the frequent threat from regular typhoons and tsunamis, with the latter deriving from megathrust earthquakes generated by the Manila Trench. These could easily overwhelm such low-lying islands. Longer term, global warming's cause of rising sea levels combined with huge wave surges will leave much of China's densely-populated coastal cities at grave risks. China's wealth would be better spent here than in military threats, but when politics clashes with economics the former usually wins to the harm of the people.   

                                                                         END

                                                     USS Theodore Roosevelt exercising

                                                     its "rights of passage" in the South

                                                     China Sea.

Container ship insurers ignoring the warning signs?

Since my last blog in December on the growing problem of container ship sizes chasing the economies of scale ("Container ship sizes need rethink") the problem has been emphasised by more worrying container losses at sea, which now far exceed the average annual loss of 778 over the three-year period 2017-2019. On January 16 the 13,100 TEU-capacity Maersk Essen, on route from China to Los Angeles, lost 720 containers in severe weather. This comes only one month after the ONE Apus lost 1,816 containers overboard, also after hitting stormy weather on a similar Pacific voyage.

Evidently insurance companies have become complacent over containers lost at sea because they represent less than 1,000th of 1% of the roughly 226 million sea-borne containers transported in 2019. While it is true that such losses can be diminished by toughening up on cargo securing equipment and practices, et al, marine insurers are now worried that more action is needed to reduce container stack heights but are they oblivious to the signs blowing in the wind? If growing container ship sizes of 20,000+ TEU containers combine with climate changes' taste for more and greater storms abetted by rogue monster waves, believed to be the major cause in many such mysterious losses with all hands, then the marine insurance market must expect much diminished reserves to come.

About two thirds of the world container ship trade passes through the South China Sea, an area highly prone to typhoons and earthquake-generated tsunamis. The latter can generate waves over 100ft high, leaving container ships at high risk of capsize. Such waves are also quite able to punch a hole through both sides of the hull. The total loss of a 20,000 TEU container ship with, perhaps, many smart mobile 'phones on board could easily run to well over £10 billion losses.

If the marine insurance industry does not call time soon on the unwise pursuit of ever-bigger container ships chasing the economies of scale then they will have only themselves to blame for the inevitable mega losses to come, especially as they should have the same concerns for mega cruise ships also drunk on the lure of economies of scale

 

The Maersk Essen loses 720 containers to Davy Jones' bosom

                                                                  END  

Air pollution legal landmark pressures forklift users

In a new study* of forklift users by Calor some 38% of those surveyed said they were coming under increasing pressure to reduce carbon from their forklift (FLT) fleets. That pressure will now likely rise following a landmark legal ruling over the death of a nine-year old asthmatic London girl who is the first UK person, and possibly the world, to have "air pollution" listed on her death certificate as the cause of death. Such a ruling will undoubtedly galvanise insurance companies to pressure warehouse operators of diesel trucks who are already under a legal obligation to make the warehouse a safe place but what are the problems and remedies for users of all diesel and LPG forklifts, whether used inside or outside premises?

Although at 54% of those surveyed recognised that carbon reduction was a very important consideration when choosing how their FLT fleet should be fuelled, regardless they have to juggle with other operational and commercial priorities. Above carbon concerns were cost (65%), fuel efficiency (64%), machinery downtime (63%), security of supply (59%) and level of customer service from the fuel provider (57%) when it comes to FLT fuel selection. Surprisingly, only 51% of respondents rated cleanliness as a very important issue and only 8% of those surveyed in the retail, leisure and catering industries have said that their business had been very effective in lowering its carbon emissions over the last 12 months. 

The report shows that there are wide regional and industry differences over fuel choice which reflect tougher technological barriers to carbon reduction. In manufacturing and utilities, for example, they felt restrained over dumping diesel because of the energy required for their processes, the limitation of electric and battery technology and the grid's current inability to satisfy demand fully at peak times. 

Companies in manufacturing, utilities, retailing, catering and leisure need vehicles with enough torque to lift and shift heavier products which dissuades them from using electric trucks which they claim underperform in such circumstances. Users of outdoor fleets also find that electrics are not suitable for their needs as the damp conditions can case issues with wiring circuitry and electrical components. Another dissuader is that 62% of respondents felt that they don't have enough charging points for their electric forklift fleets, which have to be recharged daily and left to cool for hours before use. 

The great strides in electric chargers and batteries, however, have diminished these concerns, with claims by manufacturers of electric forklifts, particularly those powered by lithium-ion and iron-phosphate batteries, that recharging times are no longer a challenge and that they can equal the performance punch of diesel and LPG and perform well in outdoor conditions. 

There are, of course, other forklift fuels, like LPG, which though cleaner than diesel (no benzene) are still not squeaky clean at point of use, but they have made a big improvement lowering carbon emissions by offering a bio LPG fuel that cuts 20-32% of carbon compared with conventional LPG. 

Encouragingly, some 94% of respondents agree that more can be done to cut carbon emissions and this is one area where Government help can make a big difference, especially as it would be unfair to expect industry players, many struggling on wafer thin profit margins, to bear the entire cost burden of switching to electric. Government financial incentives can change end user behaviour. Cash grants could be made to companies which prove how much they have cut their carbon footprint. Financial help for UK companies has long been available through the Carbon Trust scheme. There are also operational methods companies could consider which would not only improve their efficiency but also their 'green' credentials. For example, the amount of truck distance travelled, including lifting and lowering, governs the amount of fuel consumed. Depending on one's operational set-up, there may be scope to reduce truck travel times by switching to articulated forklifts# which save up to 50% of warehouse space against conventional counterbalanced trucks and 30% compared with reach trucks. Adding RDTs to these artics could also save much time, which boosts productivity. 

*www.calor.co.uk/fltreport

#www.translift-bendi

 #www.flexi.co.uk

#www.aisle-master.com

Rethink on container ship sizes?

Economies of scale are one thing when it comes to ever-rising container ship sizes but should that outweigh the expected soaring rise in insurance costs and disruption to JIT deliveries if ship sizes continue ever upwards?

Already, 20,000 teu ship sizes are in the pipeline but container losses at sea show no signs of moderating. The latest disastrous loss is the ONE Apus, which lost 1,816 containers after hitting rough weather on November 30th, 1,600 nautical miles north-west of Hawaii on a voyage from China to Long Beach, California. The ship is a 14,000 teu vessel built only last year and operating under the Japanese flag. It looks like the worst loss in container ship history and comes only one month after another ONE Line-operated ship of 14,000 teu capacity, the ONE Aquila, also suffered collapsed containers in severe weather on a similar voyage. 

There are many reasons that contribute towards such losses at sea, namely poor internal packaging and load distribution and deliberate under declaring of cargo weights to save costs and freight duties, among others. When, for example, the MSC Napoli container ship was beached on the English Devon coast in 2007 MAIB found that one of the contributory causes for the total hull write-off was overloading of 20% of the containers, including one by as much as three tonnes. There is also the ever-present risk from rogue killer waves over 100ft high which can slice through both sides of a ship's hull and sink the largest of ships in  just a few minutes, with the loss of all hands. 

The IMO has toughened weighment rules since then to reduce such nefarious misdeclarations but there are still supply chain gaps and loopholes in weighing containers. If insurance companies don't call a halt on behemoth ships soon they will only have themselves to blame for the inevitable multi-billion pound losses ahead. Nature is a hard act to beat.

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Britain sees reshoring boost 

from Covid and Brexit

If global logistics teaches anything it teaches us to expect the unexpected but can the unexpected consequences be pre-empted? Those logisticians who must deal with global risks should be familiar with the fact that lean operations are structured to create vulnerability owing to JIT practices that affect most of world trade. The numerous vulnerability risks were, nevertheless, deemed acceptable because of the wide production costs gap between those in developed countries and those in the Far East, in particular. In 2000, for example, costs in China were estimated at 31% cheaper than in the West. By 2012 that gap had closed to about 16%. Add in between 5% and 10% to account for distribution costs and the gap becomes much narrower to convince western importers that the outsourced lower production costs no longer justify the vulnerability and inflexibility of global supply chains, especially in view of the paradigm shift in consumer expectations detonated by online shopping. Seemingly, it took Covid 19 and pending Brexit to ram home that lesson.

The reshoring of production away from the Far East back to the West began falteringly about 10 years ago, fired by concerns over staggering intellectual property theft, poor quality, demands for large orders which imposed higher costs on importers and long delivery times, thus negating JIT principles. It is hardly surprising, therefore, that British importers, with retailers in the van, are moving to save up to £4.5 billion a year initially as the Corona virus and Brexit prompt businesses to bring home production. This figure has been mooted by Alvarez and Marsal and research group, Retail Economics, in a report which they believe will see UK-sourced rising orders largely in food and fashion clothes, but potentially including DIY products and homewares. Signs of the trend have already emerged with online fashion site Asos which will be making its new, lower-priced brand at approved factories in Leicester, and Ted Baker announcing its Made-in-Britain range this month. 

Why EU suppliers face "interesting times"

The reasons have a familiar ring. Retail businesses are making changes after the Corona pandemic highlighted structural weaknesses in global supply chains, which can be slow to adapt to sudden increases or drops in demand caused by shock events or rapidly-changing consumer tastes. But there is a new worrying development for them ---the possibility of a no-deal Brexit which would see tariffs as high as 80% on some UK meat and dairy imports, 12% on clothing and 16% on footwear. Retailers, unsurprisingly, are now considering alternative options, something that ought to concentrate EU negotiators' minds because in the 2-way trade between the EU and the UK they have far more to lose in specific industries. 

A good example of unilateral retailer action is the multi-billion pound pub group, J D Wetherspoon, which has banned French champagne from all its taverns and hotels. It also became clear that as the biggest consumer of Swedish-made cider, the producer felt it prudent to build a production factory in Britain. What all this means is that UK retailers call the most powerful shots, for they will not risk overpriced EU imports hitting their profits.  

There is, however, more to the reshoring trend than overseas production costs. Seven in 10 of the retailers surveyed for the report said they had already started changing the way they sourced goods to meet green and ethical targets. Shipping goods half way around the world is a huge pollution concern, though the carbon neutral ships, particularly sail-powered, will diminish future pollution levels. The appalling human rights abuses in foreign countries have also heaped odium and embarrassment on UK fashion retailers, in particular. 

At the grass roots level there are many encouraging reshoring moves. Jennifer Holloway, chief executive of Fashion Enter, said business was up over one third this year, citing retailers were looking for more responsible suppliers close to home after the pandemic uncertainties highlighted the inflexibility of shipping clothes from Asia. "It's commercial suicide to back long lead times stock at the moment. Retailers are cutting closer and closer to the season. There is no way I would have opened a factory in Wales unless I was certain there was a long-term trend in coming back to the UK. It's exciting. 

Pollution is unacceptable

Meanwhile, Over Fifties fashion brand, David Nieper, is hiring 30 new dress makers and investing £4.5 million in a textile factory. The company's chief executive, Christopher Nieper, said: "Manufacturing in Britain makes business accountable and allows control over each step of the production process. Offshoring manufacturing is essentially offshoring responsibility and, indeed, pollution. Currently two thirds of emissions from UK clothing occur overseas. It's not acceptable to shift the problem overseas where it is out of sight and out of mind."

In Wales 71 former Laura Ashley sewers have returned to the clothing industry at a new factory in Powys where ethical supplier, Fashion Enter, is making clothes for Asos and has just landed a contract for online clothing specialist, N Brown, the owner of Simply Be.

The shift by retailers is only part of wider supply chain changes prompted by Covid and Brexit. Tony Haig, chief executive of PP Control and Automation, is part of the UK Manufacturing Unite Group* which offers a "dating service" for manufacturers to work together to bring production home. Started in response to the Covid ventilator challenge, the group now has 300 members. "It's not a short-term thing," he said. "It takes a lot of time and effort to move a supply chain back to the UK. You don't just do it for a few months."

*ukmfgunite.co.uk

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UK retailer bullying of suppliers ramps up

For may years the consequences of intensifying competition among the UK's grocery retailers have been visited on their hapless, bullied suppliers through up to 60 odious ploys designed to squeeze the last drop from suppliers. Matters had seemingly improved in 2013 when the code of conduct was enforced by the Groceries Code Adjudicator but now that is all out the window following Tesco's resurgent, macho stance as it prepares a price war with the leading discounters, Aldi and Lidl.

Past apologies by Tesco's chief executive, Dave Lewis, for his company's "naked pursuit of growth" that led to an investigation into its bullying of suppliers account for nothing as Tesco delivers an ultimatum for draconian price cuts of up to 50% within a few weeks' deadline. But what is behind this move, which can only be expected to be followed by other big grocery retailers, could it have been foreseen and who are likely to be the winners?

David Sables, chief executive of Sentinel Management Consultants which trains suppliers to negotiate with supermarkets, put his finger on the pulse when he claimed that suppliers were being asked to fund deficiencies in Tesco's business model relative to the discounters, but without going into reported specifics. So what are those specifics and can and should Tesco win and if so what would be the consequences for the consumers?

Part of Tesco's problem is its refusal to cut its relatively high profit margins of 4%+ compared with the 2% the discounters are happy with so how can these upstart Continental challengers continue their remorseless rise in market share at the expense of the big four supermarkets?

Stock control is paramount

The recent paradigm shift in retailing sees value for money as the new mantra pursued by consumers which the discounters have delivered in spades, typically undercutting the big four's prices by 30% on a typical shopping basket. They have partly achieved this through a no-frills approach to shop openings which are much cheaper and quicker to commission than the big superstores but far more important has been its approach to inventory control. Warehouses put money to sleep so much so that inventory holding costs can dwarf all other logistics costs combined. A typical Tesco superstore could house about 40,000 SKUs compared with around 1,600 for the discounters, most all of which would be fast movers. Any that became slow movers would be promptly dropped and replaced with anticipated fast movers. This puts the big grocers at a serious disadvantage because most of their stock would be slow and medium movers.

The big retailers must now see their superstores as albatrosses but their online side of the business could bring relief if and when they decide to trim down their costly, giant property portfolio. But internet shopping could also be a threat if many of the big food, etc suppliers band together to build huge shared order picking warehouses for direct deliveries to consumers, thus disintermediating the traditional retailer. Amazon has shown success in this by acting as a wholesaler, but it still represents a cost layer that could be eradicated if suppliers banded together. Meanwhile, sole traders with a slick website working from home can already place orders with manufacturers for direct home deliveries to their customers. 

There is a risk that yet more attempts may be made by the grocery giants to beat the discounters through mergers, like the recent Sainsbury overture to Asda, a move that undoubtedly would have harmed consumers' best interests had it been allowed to go through. There are risks, too, that many of the smaller suppliers will fail over what has been described by one of Tesco's suppliers as a straightforward money grab. If Tesco succeeds and reverses the discounters' fortunes then the ultimate losers could also be the consumers because they would once more be in the grip of the big four who will have more leeway to raise their prices while keeping the suppliers squeezed.

Could all this have been foreseen? Nearly 40 years ago I warned of trouble ahead for the big UK grocers following my visit to Netto in Denmark, a food discount retailer with 120 shops supplied by just one national distribution centre (RDC). Their slick business model, supported by EPOS and EDI, saw all sales replaced at each store every 24 hours. This meant that the NDC, equipped with fast sortation conveyors, saw 90% of all its stock pass through it every day, partly because Netto stocked only 600 SKUs, nearly all fast movers. In my report to Materials Handling News I warned that if this business model crossed the North Sea to Britain it would give Britain's big supermarkets "nightmares." The rest, as they say, is history.
 
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Pallet rack netting demands safety look

How safe are your pallet racking safety devices? Not safe enough, it seems. No matter how well designed, installed, regularly maintained and correctly aligned with the most appropriate MHE, accidents will always happen and one of the five key causes of warehouse accidents involves moving or falling objects.

Protecting the storage medium has long been the poor relation in terms of warehouse safety priorities but such is the risk to business survival from the worse kind of racking collapse, namely domino- style, it almost beggars belief that this aspect of racking safety attracts such relative insouciance. Next to the risk of racking collapse itself is falling objects on personnel.

For many years the only defence against pallet collapses from collisions with MHE has been the upright post protectors and various truck guidance measures but these were restricted to heights of no more than about 4 ft. Then, three years ago, RCP Ltd* patented its Rhino system that connects the upright racking posts to a ceiling structure via steel ropes. This addressed the problem of domino-style racking collapses that could be so serious as to jeopardise the future of companies, especially those geared to e-fulfilment functions when failure to make timely deliveries could see permanent loss of future business. In some domino-style collapses it is worrying how little contact there is between a forklift and a horizontal beam which causes virtually all of the racking to collapse. But what of the more confined peril from falling objects from the racking?

There have been two main measures to protect from this peril, namely racking safety netting and steel mesh containment panels. Of the two, netting creates a safer working environment and risk reduction solution when used as part of a suitably safe system of work, says Chris Hopkirk, sales director of Warehouse Partners, a trading division of Westbrook Industrial.** Available in various sizes and strengths, RackNets are strong and lightweight and easy to install (up to 2 to 3 times quicker than steel mesh). They are made to measure so there is no cutting down or edge working on site. Unlike steel mesh, RackNets will not dent or corrode and life ownership cost is much reduced. Retrieval of goods/pallets is made easier and they are designed to contain and restrain 1 tonne loads within the net envelope. Easy net removal enables beams to be adjusted and rack repairs to be carried out quickly.

The nets are normally used where there is pedestrian access to the rear of a single run of racking and is particularly important where employees are picking off the rear of the rack. The risk of pallets being inadvertently pushed through the rack are greatly increased where a support system such as timber or mesh decks are used. In-flue netting, therefore, provides increased protection from product or pallets being pushed through from one rack to another.

So why is so little netting sold in relation to steel mesh panels? Chris Hopkirk suggests the racking industry could be educating the industry more about the inherent risks of falling objects from pallet racking and that as a minimum a risk assessment and safe system of work should be carried out to ascertain their requirements. The fact is that steel mesh is designed to retain only boxes of up 50 kg and no more.

**www.warehouse-partners.co.uk
*www.rcpsystem.com




RackNet in place