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.   

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                                                     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

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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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