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Supply Chain by the Numbers

- June 2, 2016 -

  Supply Chain by the Numbers for Week of June 2, 2016

Nike's State of the Art Euro Logistics Campus; eCommerce Grocery Deliveries All the Way to the Fridge; Time for Global Rules on Supply Chain Labor, Rights Group Says; China-Euro Cargo Train has Issues



Astoundingly, that is the percent of containers from offshore that enter Nike's newly expanded European Logistics Campus in Belgium via water, versus a series of canals that extend to from the campus to ocean ports. In addition, there are expanded rail lines connected to the campus, which are used extensively for outbound shipments to retailers across Europe. All that will lead to CO2 reductions of 30% versus the previous more truck-centric approach to logistics. The campus includes six 150-meter-high wind turbines and solar panels with a surface area equivalent to three soccer fields. Eric Sprunk, Nike Chief Operating Officer, said last week that "Our growth ambitions and meeting the rising expectations of our consumers are only possible with a smarter, faster and more sustainable supply chain. That's why this new facility is critical to enabling us to process orders with incredible agility, flexibility and speed - from a single product order to ten thousand."



21 Million

That's how many workers worldwide are trapped in forced labor, according to the United Nations' International Labour Organization (ILO). That's a bad number if true, but more controversial may be the a human right group called HRW, which in a new report published last week said that legally binding global regulations on business are the only way to solve this problem. HRW further adds that the ILO should get the ball rolling by drafting a new treaty under which governments would require companies to have human rights safeguards throughout their supply chains. Citing "lax government regulations," Juliane Kippenberg, associate children's rights director at HRW, said last week that "Legally binding rules are the only realistic way to ensure that companies don't exploit workers or contribute to labor abuses." She added that "Voluntary standards on human rights and business are not enough." So if you run a global supply chain, watch out - the UN may be looking at your suppliers' labor practices soon.


That's the number of households in Stockholm, Sweden area that have signed up for a new service that will deliver groceries all the way to inside a refrigerator when the home owner is absent. The service is being piloted by logistics company PostNord, in conjunction with grocery chain ICA. For the service to work, home owners must install a special lock on one of their doors that a PostNord delivery person can open with a smart phone. Promising that their delivery drivers will first remove their shoes, the
groceries will be unpacked, and as appropriate, placed in the refrigerator. The goal is to end the current inconvenience to both consumers and delivery companies with home service: consumers waiting around for the delivery to arrive and the cost and hassle for courier firms from finding no one at home, requiring a costly second stop later. This approach negates the need to drive to a store or other location for a "locker pick-up," which doesn't work for temperature-sensitive groceries anyways. One barrier to overcome: the specialized lock will set you back more than $275.00, but we are certain that price will decline with increased volumes.



That's about how much it costs for food and olive oil exporters to ship a container from Spain into East China through the much ballyhood rail service that has emerged in China as part of its ambitious "One Belt, One Road" project. There's just one problem: that's about twice what it costs to ship that same container by ocean freight. The rail trip takes 18 days, crossing France, Germany, Poland, Belarus, Russia, and Kazakhstan, offering a modest 10 days or so advantage in speed versus ocean transport. What's worse, Spanish exporters say the train cars are not well climate controlled when passing through Russia in the winter and other areas in summer months. While some shippers use thermal blankets to protect their goods, the blankets can only keep the temperature of products within 10 degrees Celsius of the outside cold or heat, not nearly enough protection when temperatures are well below the zero level or when they soar, meaning shipping by rail is only feasible in the mild weather of spring and autumn. Will this ever really Asia-Euro train shipping ever really pan out? We have our doubts.

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