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Martin Murray

Logistics

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Air Cargo Still Volatile

Monday April 14, 2014
Airlines Fight For Cargo Although there is some evidence that the air cargo market is making some kind of improvement, many airlines that operate air freighters are having a terrible time. Cathay Pacific has four older freighters parked in the US, Singapore Airlines have four 747-400's sitting in the Mojave Desert. Cathay Pacific has lost money on air cargo in the last three years, while Qantas is seeing profits melt away.

So who is making money from moving cargo? The answer may be surprising. It is the passenger airlines who seem to be doing well in the cargo market. The trick is not to try to fill a whole freighter of cargo, but to have passenger aircraft that can hold reasonable amounts of freight. The new Boeing 777's can hold up to 20 tons of cargo, double that of the 747, so it can make flights profitable if the cargo hold is full. A number of airlines are using this tactic including Emirates, American, JAL, and British Airways.

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Damaged Roads

Wednesday April 9, 2014
Potholes If you thought your local roads here in the US were bad, give a thought to the situation in the UK, where the Asphalt Industry Alliance (AIA) has released a survey that found that estimated cost of getting roads in England and Wales back into a "reasonable" condition has increased to 12 billion ($20 billion). The estimated time to complete the current work could be as much as ten years.

Over 65 percent of local authorities in England and Wales have roads that were damaged by the bad winter weather this year, including massive flooding. The AIA says that it costs at least 20 times more per square meter to fill a pothole than it does to resurface a road. Despite this, the British government has chipped in a paltry 183 million ($305 million) to help fix the areas worst affected by the flooding.

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Shipping Lithium Batteries

Tuesday April 8, 2014
lithium metal battery ban The International Civil Aviation Organization (ICAO) has been looking into the dangers of lithium metal batteries on passenger and cargo aircraft. The US and some foreign carriers already ban lithium metal batteries on passenger flights, but many airlines still ship these potentially dangerous goods. A working group from the ICAO, called the Dangerous Goods Panel, has been looking at lithium metal batteries and has performed a number of tests using a test Boeing 727 airframe.

If a lithium metal battery overheats, it can reach temperatures exceeding 760 degrees Celsius. If one battery ignites, it can quickly ignite others. Passenger flights use halon fire suppressant, but this has no effect on lithium metal battery fires. Tests using the 727 airframe found that that smoke caused by the fire engulfed the flight deck within eight or nine minutes of detection, while others caused an explosion that ripped through the aircraft, blew the flight deck door off its hinges and buckled the 727. The ICAO will consider the results of the test and make a decision on the future of carrying lithium metal batteries on any aircraft.

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More Food Safety Issues

Monday April 7, 2014
Food Safety Issues Tyson Foods is reported to be recalling more than 75,000 pounds of chicken products after it was found that some was contaminated by particles of plastic. A number of consumers have been finding small plastic particles in chicken nuggets that they purchased from Sam's Club across the country. The USDA has issued an notice that this is a Class II recall, as it presents a health hazard that has a remote probability of affecting consumers.

Tyson Foods stated that the issues are due to one particular piece of equipment and that a scrapper in a blending machine was the source of the plastic particles. The company has also said that they are implementing corrective measures in all of their facilities to ensure that this type of food safety issue does not occur again. Although there is no estimate of how much the recall will cost the company, it does once again show that the food supply chain in the US can be susceptible to contamination and it may take a couple of months, as in this case, to find out things have gone wrong.

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Jobs Created, But Unemployment Unchanged

Friday April 4, 2014
Labor statistics Statistics from the Labor Department shows that 192,000 new jobs were created in March, and that relates to 8.9 million jobs created over the last 49 consecutive months of employment growth. This figure means that there are now more jobs than before the beginning of the recession in 2008.

Other statistics from the Labor Department shows that at the height of the recession, there were six people applying for every open position, but now this has now fallen to 2.5 for every position. Other optimist figures showed that the average workweek in the manufacturing industry rebounded to 42.0 hours, which tied for the highest since July 1945. Unfortunately, with more people entering the workforce as the population grows, the unemployment rate remained at 6.7 percent.

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UPS Fire NY Drivers

Wednesday April 2, 2014
UPS Fire NY Workers UPS may have stepped into a political firestorm by telling 250 of its drivers in Queens, New York that they are fired for a ninety-minute protest in support of an employee who was fired after 24 years with the company. The long-term employee, Jairo Reyes, was in dispute with the company over hours, but was fired, which sparked the protest. UPS have told 230 of the drivers that they will be let go when new employees are trained.

The fallout from the driver dismissals could be significant for UPS on two fronts. The company has a $43 million contract to supply delivery services to city and state agencies. A growing number of lawmakers are unhappy about UPS tactics and want a resolution. The other downside for UPS is the benefits it gets from the city on parking fines that it racks up every year. The city allows UPS to participate in a scheme where they can expedite the ticket payment and in some cases, this halves or wipes out penalties. As a result, UPS parking fine's fell from $20 million in 2006 to around $4 million in 2013. Any changes to this arrangement could be costly for UPS.

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New Shipping Containers

Tuesday April 1, 2014
carbon fiber container A new type of shipping container could revolutionize the shipping industry. For almost fifty years, the steel shipping container has been responsible for moving millions of products around the world. Last month a new type of container made from carbon fiber composites could change everything. The new type of container is significantly lighter than a steel container, almost half the weight.

The carbon fiber container is lighter, but more expensive than a traditional container. The cost differential is around $5000, so the initial investment is far greater, but at current diesel prices, the new container would only have to be used for around 75,000 miles to break even. In addition, the carbon fiber container is resistant to corrosion, scanned with a low power x-ray, and potentially be stored flat if not required.

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SAP Training Survey

Friday March 28, 2014
2014 SAP Training Survey The third annual independent SAP training survey has just been published by Michael Management Corporation (MMC) and it looks at the opinions of 1230 SAP professionals. MMC is an award winner for online SAP training solutions so it has a lot of knowledge and experience in what SAP professionals require to perform their jobs at the highest level. Some of the key findings of the report found that more professionals were obtaining their training online rather than in a classroom environment. This trend should rise as companies look to not only reducing training costs, but also the travel and time associated with being out of the office.

Other findings of the report show that although almost a fifth of responders received in excess of thirty hours of training, over sixty percent received no training whatsoever. As such a significant number found that their overall job performance was suffering. It does appear quite shortsighted of companies who employee talented workers in a sort after profession to not offer even the most basic of online training considering the relatively low cost of training per person. You can get your own personal copy of the survey by clicking here.

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AWS Wins DoD Approval

Thursday March 27, 2014
AWS win DoD approval Amazon Web Service (AWS) has finally received provisional operating authorization from the Department of Defense (DoD), to sell cloud services involving low-risk unclassified data. AWS has needed to wait because of the need for security certification. Currently over 600 use government agencies use AWS services, so the approval from DoD will surely increase that number, and profits for Amazon.

Obviously Amazon's major cloud rivals are none too pleased with the inclusion of AWS in the mix. Microsoft Azure, Cisco, and Google are Amazon's main rivals in the government cloud business, and to make sure Amazon looks like an attractive deal, the company lowered its cloud prices in response to Google's latest price cuts. Amazon will have to be careful not to lower its prices to an unprofitable level and hurt other parts of the business. Google has deep pockets and could continue cutting prices to hurt AWS.

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Fishing Waste

Monday March 24, 2014
Fish Waste Oceana is the largest international organization focused on ocean conservation. They have complied a report called "Wasted Catch: Unsolved Problems in US Fisheries" that takes data from the National Marine Fisheries Service (NMFS) to show that US fisheries are throwing around 2 billion pounds of fish back in the ocean each year. The fish that is being discarded is mostly edible, but does include marine life not intended to be caught for food.

Oceana highlight that the problem is this "bycatch" which can lead to fisheries discarding more than they actually bring back to port. There are no accurate figures on how much is discarded but this could be as much as a quarter of US fisheries catch. There is no doubt that fisheries will catch fish that are not for food, but the massive waste that is estimated, if continued, would seriously deplete fish stocks and continue to harm marine life unnecessarily.

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