DHL to support global supply chain for Castrol oil

Transport and logistics provider DHL will help provide the supply chain for Castrol’s new cellular oil system technology, NEXCEL.
According to DHL, the company will be responsible for delivering NEXCEL to the automotive industry and its aftersales market, while also developing a global supply chain strategy for the Castrol technology.
NEXCEL is intended to replace conventional oil change by simplifying the process and facilitating the collection and recycling of used engine oil.
“Based on our established supply-chain expertise, we aim to provide high service delivery capability, balanced with cost and working capital optimisation to support NEXCEL’s rollout,” said Steve Harley, President – Energy Sector, DHL Customer Solutions & Innovation.
“With this new agreement, we are building on the existing relationship with BP and we are proud that our expertise will support the launch of a sustainable, fair and potentially profitable service for both consumers and businesses within the automotive sector.”
Mark Atkinson, Castrol’s Global Logistics Category Manager, added, “DHL’s impressive track record in designing, implementing and operating automotive supply chains on a global level combined with our long-term relationship makes them a natural choice. Both DHL and BP are actively engaged in the development of environmentally friendly and forward looking solutions and thus are a perfect fit.”

Deakin surveys supply chain and logistics industry

The Centre for Supply Chain and Logistics (CSCL) at Deakin University is keen to hear from the supply chain and logistics industry about pallet usage.
“Researchers at CSCL are hoping to establish a regular Australian pallet survey about user requirements and usage patterns nation-wide,” said Dr Hermione Parsons, Director of CSCL.
“We found that Australian information on pallet usage is not readily available, and we have nothing in Australia that compares with the US Pallet Survey, for example,” she added.
“Pallets may not seem a very glamorous topic for research but they are crucial to Australian supply chains.
“We are hoping to pick up on trends such as ‘less-than-pallet-load’ requirements, as freight becomes much more granular, and the trends in requirements for pallet tracking.”
The Australian Trucking Association is encouraging its members, as well as other key industry manufacturing and transport and logistics peak bodies, to take the anonymous five-minute online questionnaire.

New Pacific National CEO appointed

Dean Dalla Valle has been appointed CEO of Pacific National.
Dalla Valle brings with him four decades of experience with BHP Billiton, most recently as its Chief Commercial Officer with responsibility for marketing and distribution of commodities, the global Health Safety and Environment program, technology and the Samarco recovery project in Brazil. Prior to this, Dean was President of BHP Billiton’s international coal business.
“With his depth of background in the successful management of large, capital intensive businesses, his knowledge of supply chain dynamics and his extensive hands-on operational knowledge and experience, Dean is an excellent fit for Pacific National,” said Russell Smith, Executive Chairman, Pacific National.
“As CEO, Dean will be extremely well placed to lead Pacific National as we continue to deliver on the company’s plans to strengthen and grow the business, leveraging the expected expansion in the national freight task over coming years.”
Dean will commence his role at Pacific National on 17 July 2017 and current Pacific National CEO David Irwin will step into an advisory role with the company, supporting the Board and Dean.
“I would like to express my gratitude to David Irwin for his many years of service with Pacific National,” Smith added. “The company is stronger for his leadership and I know we will continue to benefit from his deep knowledge of the freight and logistics sector in future.”
The Australian Logistics Council (ALC) welcomed the appointment.
“At a time of considerable change in the Australian freight logistics industry, Dean Dalla Valle’s will be a welcome addition to the policy debate around supply chain efficiency and safety and the requirements of the National Freight and Supply Chain Strategy,” the ALC said in a statement.

Melbourne’s second port to be built – in 2055

Infrastructure Victoria has made recommendations to the Andrews government that Melbourne’s second major container port should be built near Werribee, but not for another 40 years, The Age reports.
The suggested site, Bay West, is located between Werribee and Point Wilson, though Infrastructure Victoria notes that it will not be needed until container traffic outgrows capacity at the Port of Melbourne, estimated to happen by 2055.
The port’s container terminal would offshore a four-kilometre industrial island connected via a 1.5-kilometre road and rail bridge.
Road and rail links would need to be established across Melbourne Water’s Western Treatment Plant, a protected site for birdlife.
Infrastructure Australia decided to remove another contender from the running, the Port of Hastings in the south-east of Melbourne, due to to the estimated $5 billion cost of connecting it to Melbourne’s rail network via the Pakenham-Cranbourne line, and the risk of increasing shipping traffic in the ecologically delicate Western Port.
The advisory body did add that the Port of Hastings could perform a supporting role, dealing with shipping of non-containerised goods.
The Australian Logistics Council (ALC) welcomed Infrastructure Victoria’s advice on securing Victoria’s future ports capacity.
“[The] ALC provided a submission to Infrastructure Victoria which stated that the Port of Melbourne should be able to operate as efficiently as possible for as long as possible,” said ALC Managing Director, Michael Kilgariff.
“[The] ALC will continue to advocate that the recent lease of the Port of Melbourne should ensure it has an operational life of 50 years. Significant long-term investments made by those in the freight logistics industry must be respected and supported by all governments.
“The fact that a second container port has been mooted for operation post-2055, should not prevent much-needed infrastructure, such as the port rail shuttle, from being planned, financed and built as soon as practicable,” he added.
“We also look forward to the Victorian Government’s response to Infrastructure Victoria’s 30-Year Infrastructure Strategy, which incorporated practical measures such as protecting freight precincts, improving rail access at the Port of Melbourne and progressing the Western Interstate freight terminal.”

Good investment, bad investment

This column first appeared in the February/March 217 issue of Logistics & Materials Handling Magazine.
There has been much talk recently about budget repair and ‘good’ and ‘bad’ debt. It comes at a time when government debt and interest rates are very low by historical standards, and when Australian governments still have excellent credit ratings compared to other countries. In that environment, surely it would be a good time to borrow to fund infrastructure?
It is an important question, but it carries the danger of over-simplification: The oversimplification is the suggestion that all borrowing for spending on infrastructure is ‘good’ and all borrowing for other purposes is ‘bad’.
In reality, however, it is more important that any borrowing or, indeed, any spending by government, be a good investment, whether it is spent on infrastructure, on one hand, or on education or health, on the other.
The tale of the two trains illustrates the point. One train is the Very Fast Train between Sydney-Canberra and Melbourne for passengers.
The other is the Inland Rail Project between Melbourne and Brisbane for freight.
The former is glamorous and attractive to people who might use it, but has an extremely weak economic case, particularly as the route is already well served by air, something which will only get better with the building of Sydney’s second airport.
The latter gets little public attention and very few people will actually travel on it, but its economic case is convincingly sound and ultimately it will greatly benefit many people.
Alas, freight does not vote, even if its efficient delivery improves the lives of those who do.
To build the former would be worse than useless. It would take valuable resources away from more worthwhile ones. Recently, the respected Grattan Institute produced some sobering and disheartening research on how badly Australia evaluates transport infrastructure. It looked at all 836 projects that cost $20 million or more since 2001. Premature announcements – when a politician promises to build a road, bridge or rail line without a funding commitment, often in the run-up to an election – caused three-quarters of the $28 billion in cost overruns, yet they comprised less than a third of the projects, the research found.
In short, when proper analysis is done before a commitment is given, projects generally run on time and on budget. The Grattan Institute said, “All main political parties have committed to sound planning of infrastructure, and to making decisions with broad social benefit, yet in practice they continue to promise projects that Infrastructure Australia (IA) has not evaluated or has already found to be not worth building.”
The Australian Logistics Council (ALC) has long supported IA and the need to do proper cost-benefit analyses, particularly as infrastructure funds are getting harder to find and the freight task in Australia is growing rapidly.
The ALC has a major role in making the public aware not only of the need to build the infrastructure required, but also of the need to avoid diverting precious funds into projects that have low or even negative economic return.
Ultimately, politicians in a democracy must make the decisions on what infrastructure to build. However, by ensuring the information is out there on how wasteful and irresponsible bad decisions can be, they can be constrained from making them.
Former Infrastructure Minister and Deputy Prime Minister John Anderson has made a spirited case for the Inland Rail Project because IA has, on the most conservative projections, proved its economic value. Even such an obvious candidate as Inland Rail – connecting not just Melbourne and Brisbane but also, via Parkes, Adelaide, Darwin and Perth – faces political difficulty through lack of national coordination.
Anderson’s environmental and safety case for Inland Rail was also impressive, but without a national strategic context the argument is in danger of being lost.
Of course, Australia faces an extra difficulty beyond identifying economically sound infrastructure projects: a three-tier federal system of government – each having the capacity to make things difficult for the development of national infrastructure.
Local governments can impose load limits and curfews on their roads to appease their ratepayers, but at a cost to the national supply chain. They can also oppose freight-related proposals and allow development in places that should be preserved for future transport corridors.
A classic example is the opposition to the development of the Moorebank Intermodal Terminal in Western Sydney.
State governments can also change land uses and produce transport plans that end at their borders with the aim of serving their own cities and towns, without reference to national freight requirements.
This state of affairs cries out for the development of a coordinated national freight and supply chain strategy to embrace not only new infrastructure but also the uniform regulation of all transport modes to reduce compliance costs.
When people bemoan the lack of national productivity reform, the logical industry to take on a national focus is Australia’s freight industry, which represents 8.6 per cent of the national economy.
It obviously has to be led by the Federal Government, which raises about 70 per cent of revenue in Australia. If it lacks constitutional power to legislate, it can use its financial power to persuade. It can also persuade the states to rein in local governments’ predilection for ratepayer interests over national freight needs.
Some progress has been made with the National Heavy Vehicle Regulator whereby a national scheme has begun using mirror state-by-state legislation.
Last year, further progress was made with the abolition of the Road Safety
Remuneration Tribunal, something ALC opposed from the beginning. The tribunal had less to do with road safety than with being an industrial-relations exercise on driver pay. Progress like this, however incremental, requires sustained, industry-wide, evidence-based advocacy. But there is a long way to go.
The crying need for a national freight and supply chain strategy has prompted ALC to make the theme of its annual ALC Forum this year: Getting the Supply Chain Right. This is not about ‘players’ in an industry. It is a highlevel, intelligent discussion about national functionality. In the past, the ideas emerging from the Forum have significantly influenced national thinking, and will continue to do so.
When issues are fleshed out in detail the results usually carry more weight.
A national freight and supply chain strategy must also deal with financing.
Corridors cannot be preserved and bottlenecks removed without money. There is no point in building a grand piece of infrastructure if the linking bits are missing.
In 2014 and 2015, ALC and others were promoting the use of ‘asset recycling’ as a means of getting more into the infrastructure funding pool. The idea was that governments would sell existing working assets and then use the money to invest in new infrastructure where the private sector was not willing or able to.
The advantage of governments doing start-ups is that it can get the finance using low interest rates and high credit ratings. It can sustain the great risk in any new infrastructure project. But once built and functioning, the government is often not especially good at running such infrastructure. Rules-based bureaucracies avoid risk, cover their patch and are not especially interested in seizing opportunities to innovate and expand. At that stage, governments should sell and use the money for the next initiative.
A national freight and supply chain strategy would provide a better framework for asset recycling.
The ALC has constantly urged that the provision of supply-chain infrastructure and logistics be above politics. The supply chain is national – the freight task is national. It does not stop at state borders and it requires vision that can be delivered by a national freight and supply chain strategy.

New container system to save industry $2+ billion

A new system which treats lifting four or six empty containers as a single block using the same principles as the lifting of a six pack of beer cans has been developed to save the industry billions while also improving safety for terminals and shipping lines.
The shipping container has revolutionised international freight transport and continues to account for a greater share of cargo moves every year but the handling of empty containers is a continuing problem.
Repositioning empty containers costs the shipping industry $20 to $27 billion (US$15 to US$20 billion) per year – up to eight per cent of a shipping line’s operating costs – according to Boston Consulting Group (BCG).
“Moving relatively light empty boxes, which represent over 20 per cent of total in-port container moves, often one by one with powerful cranes and vehicles is incredibly inefficient,” said Selwyn Rowley, Sales and Marketing Director, BLOK-Container Systems (BCS).
“By deploying BLOKs of containers linked with BLOK-Locks and specially developed BLOK Spreaders and Trailers the whole container handling system can be speeded up dramatically using existing cranes and terminal infrastructure which will save money, speed up vessel turnaround, ease congestion and make the whole operation safer on land and sea,” he added.
Martin Clive-Smith, CEO, BCS added, “This is a rare project in which the whole industry will benefit from improved safety and commerce, with minimal changes in infrastructure and practices required.”

Amazon: logistics industry should employ from outside

At the Transport Logistics show in Munich in early May, Bernd Schwenger, Director of Amazon Logistics and General Manager of Amazon Deutschland Transport, stated that in order to keep up with the pace of change in the industry, recruiters will need to look at other sectors.
Schwenger added that Amazon differs in its approach to talent when compared to conventional logistics companies, due to its customer-centric focus, The Loadstar reported.
“Everything we do comes from the customer,” he said. “I don’t like this term ‘supply chain’, because for Amazon it is very much a ‘demand chain’. It’s very important to work backwards from the customers’ perspective – logistics needs to approach and interact with the customer. We have to understand what they want and how we integrate with that.
As a result, he shared, 70 per cent of Schwenger’s team – including him – comes from an operational research and mathematics background, while just 30 per cent brings logistics experience.
“But I’m learning a huge amount from the tech people, and I would say it is much easier to teach them about logistics than vice versa,” he added.
The CEO of Panalpina, Stefan Karlan, was also taking part in the panel discussion. He said, “We might soon be able to handle shipments without any human involvement, but you will still need humans with logistics experience to deal with customers and supply chain exceptions.”
Ryan Petersen, CEO of San Francisco-based freight forwarder Flexport, said his company’s talent attraction strategy “simply focused on hiring super-smart people,” with logistics proficiency a later consideration.
“If we do employ people from the logistics industry, we generally tend to go for those with limited experience, because we don’t want people locked in the old ways,” Petersen said.

ALC announces safety and compliance summit

The Australian Logistics Council (ALC) has announced that its 2017 Supply Chain Safety & Compliance Summit will take place 5–6 September at ICC Sydney.
With the Government continuing to develop the National Freight and Supply Chain Strategy, this year’s Summit will consider how the Strategy can be used to improve safety outcomes in the freight logistics industry.
Another key focus at the Summit will be the significant extension to Chain of Responsibility, set to come into force in 2018, that will extend the legal obligations and liabilities of executive officers and company directors.
The 2016 Summit brought together over 300 industry representatives to benchmark, share best practice and identify gaps where improvements are needed. The 2017 Summit will again attract representatives from all parts of the supply chain, including customers, suppliers and logistics providers.
“The Supply Chain Safety & Compliance Summit is a valuable opportunity to raise awareness of changes to CoR obligations and advise industry on improving safety and compliance levels,” said Michael Kilgariff, Managing Director, ALC. “The event will serve as a platform for policy discussions, workshops and consultations and we look forward to an active and engaging series of discussions.”
Find out more.
 

Inland Rail funding could be spent on shipping, says MUA

The Maritime Union of Australia (MUA) has stated that it feels that some of the money earmarked for the $8.4 billion Melbourne-to-Brisbane Inland Rail project could be better spent on investment in Australia’s coastal shipping sector.
MUA National Secretary Paddy Crumlin said that while the MUA agrees Australia should be trying to get trucks off the roads, the sea offers the best alternative.
“Port infrastructure already exists in Australia and coastal shipping leaves the lowest carbon footprint when it comes to moving goods around our coast,” Crumlin said.
“This package from the Government looks a lot like pork-barrelling by the Coalition to protect their inland seats through regional Victoria, NSW and Queensland as they desperately try to stave off the threat from One Nation and other parties.”
“A strong domestic shipping fleet makes absolute sense from a national security, fuel security, and environmental standpoint,” Crumlin added.

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