Shenzhen Resumes Production with Technological Tools

February 26, 2020

Shenzhen, known as the “heart of science and technology” in the Guangdong-Hong Kong-Macau Greater Bay Area, has gradually resumed production with the help of digital and telecommunication tools.

While continuing with measures aimed at controlling the Covid-19 epidemic, Shenzhen is using a series of government relief measures to get back to work.

The city’s central business district of Futian has been the preferred place for enterprises to set up their headquarters.

Science and technology enterprises are the core industries in Shenzhen and there has been a push to get them back into production.

Huawei Technologies, a Shenzhen-based company, recently launched an online daily attendance system and a website plus an online quiz about epidemic prevention for its staff. It has also set up special areas for disease-control staff within its production sites.

Huawei has been using new information and communications technology to closely monitor its staff.

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Source: Asia Times

US Factories in China Are Open, But With ‘Severe’ Worker Shortage

February 20, 2020

Most U.S. factories in China’s manufacturing hub around Shanghai will be back at work this week, but the “severe” shortage of workers due to the coronavirus will hit production and global supply chains, according to the American Chamber of Commerce in Shanghai.

While about 90% of the 109 U.S. manufacturers in the Yangtze River delta expect to resume production this week, 78% of them said they don’t have sufficient staff to run at full speed, according to a survey by AmCham. The biggest reasons for that were travel restrictions on their staff returning from holidays and the requirement to quarantine them for two weeks once they do come back.

“Most factories have a severe shortage of workers, even after they are allowed to open,” Chamber President Ker Gibbs said. “This is going to have a severe impact on global supply chains that is only beginning to show up.”

Almost 60% of the firms expect demand to be lower than normal over the next few months, nearly half said their global supply chain had already been affected by the business shutdown, and about a third of them will consider moving operations out of the country if this continues, according to the survey.

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Source: Bloomberg

Shippers Brace for Capacity Squeeze as Chinese Manufacturing Resumes

February 18, 2020

Export freight volumes are beginning to return to China as the country’s production picks up slowly, with shippers likely to face an increasing squeeze in air and ocean outbound capacity – accompanied by higher rates – in the weeks to come, according to an update yesterday from global freight forwarding and logistics group Agility.

Agility’s latest China coronavirus operational update noted that pressure on capacity was currently affecting inbound air freight and China domestic trucking in particular. And on the production side, it highlighted that “many large exporters, including original equipment manufacturers (OEMs), are not immediately resuming full production either due to manpower shortage, in response to or as a precaution to ensure quarantine measures for returning workers”.

Based on preliminary assessments, it said an estimated 30% of major suppliers remain closed, with major OEMs indicating “the delay to reach full production could last well into March”.

Commenting on the situation for air and ocean freight in greater detail, the update notes that airport and port operations are currently relatively smooth. But Agility expects “possible challenges” at Shanghai Pudong (PVG) Airport as outbound cargo volume picks up, while low manpower is impacting service levels and operating efficiency at certain locations.

“A prime example is PVG, where stringent rules for workers returning from holidays have been implemented,” it noted. Stringent restrictions for carriage into and out of Shanghai Province could further impact cargo flow, particularly affecting PVG airport, it added.

The update goes on to note that the number of flight cancellations and blank sailings is on the rise. There have been almost 7,500 outbound flight cancellations, it estimated, but freighter operations are gradually being resumed.

Ocean carriers have begun implementing extra blank sailings, reducing transpacific eastbound (TPEB) capacity by an estimated 25% and China-EU capacity by as much as 60%.

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Source: Lloyd’s Loading List

New Track and Trace Standards for Container Shipping

February 5, 2020

In an effort to transform inefficient practices and accelerate digitalization through a unified industry effort, on Jan. 28 the Digital Container Shipping Association (DCSA), in conjunction with its nine-member carriers, published a common set of processes, as well as data and interface standards for Track and Trace (T&T).

“We are thrilled to introduce T&T standards for the industry that enable its customers to reduce complexity, cut costs and, over time, better manage their end-to-end supply chains,” remarked Thomas Bagge, CEO of DCSA. “As DCSA standards are technology- and vendor-neutral, every organization providing shipment tracking information to its customers today will benefit by adopting our T&T standard because it will simplify data integration with carriers and improve information quality.”

The standards can be implemented by carriers, shippers and third parties to enable cross-carrier shipment tracking.

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Source: MH&L News

Company Leaders Often Overlook the Importance of Distribution

November 15, 2019

In the business world, the term “distribution” refers to the channels, logistics and processes to move products and services from the point of manufacture, production, or creation to the ultimate end-users. When “distribution” is linked to “strategy,” the question becomes: How can distribution serve as a component or variable to support a company’s overall business and marketing strategy?

Distribution is often an unrecognized and underappreciated element of strategy, yet it is almost always an important factor in a winning strategy. Some examples will illustrate this premise:

● Starbucks created a new distribution system for coffee, featuring its own stores and coffee shops, although the economics might have been better if Starbucks had simply sold its coffee in grocery stores and supermarkets. In the beginning years, however, it’s likely that Starbucks did not have the financial wherewithal for the heavy advertising, slotting allowances and sales development expenses required to achieve distribution in the supermarket channel. Nor did Starbucks have the brand awareness and reputation that would have allowed it to challenge the major national coffee brands in supermarkets. So, Starbucks wisely chose to develop its own distribution system and its own retail stores. This distribution strategy has been a key element in Starbucks’ success…

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