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Reducing the cost of trade

The cost of physically moving a container is less than 50% of handling the information related to this transport. Improving information flows can reduce the cost of trade for shippers as well as for carriers.

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A very fragmented and grossly ineffective information exchange infrastructure is costly and risky for Maersk Line customers.

Thomas Emil Jensen recently did an industrial PhD study with Maersk Line IT. He counted 30 to 40 “different actors” involved in trading avocados from Kenya to Netherlands, all exchanging information with each other. The high number surprised him, since global trade usually is considered to involve mainly the importer and exporter.

“The physical transport of the fruits and vegetables is a chain of various processes with different means of transport and barriers by authorities. Some of the reasons for the variation in lead time are error prone information, missing communication, and lack of coordination due to lack of precise logistic information,” reads the paper, titled “Avocados Crossing Borders: The Missing Common Information Infrastructure for International Trade.”

Fragmented landscape of information

Jensen, who wrote the paper with co-researchers Professor Niels Bjørn-Andersen, and Ravi Vatrapu, collected data in Kenya and Netherlands where there are 300 Dutch importers.

Aside from barriers in moving the goods from one place to another, Jensen et. al said the “information and documentation” in exporting fruits and vegetables from East Africa to [the] European Union (EU) “shows a fragmented landscape of information and documents.” This ranges from telephone calls, faxes, e-mails to physical papers.

“Lead time is critical for movement of fresh fruit and vegetables from farmer via exporter to importer and to the consumer. Too long lead time decreases the quality of the fruit and vegetables. This makes the business risky for the importer who might lose a shipment with several containers of fruit and vegetables (e.g. a shipment of five containers holds ½ million avocados),” the study continues.

“Green corridor” in East Africa

Based on their findings, they suggest the implementation of a common integrated information infrastructure (a Shipping Information Pipeline) which could “significantly contribute to reducing costs especially by speeding up processes, by providing transparency in the flow and reducing the lead time for international trade of fruit and vegetables.”

As part of a larger effort aimed at improving the overall trade environment in East Africa – a project sponsored by the Group Sustainability Council and Maersk Line in East Africa –the concept of a green corridor for perishable products from East Africa to Europe is being piloted.

In practical terms, this means enabling all actors in a flower trade lane from Kenya to Rotterdam to exchange digital information and thereby bring down the administrative costs of trade. If successful, the pilot will demonstrate the potential impacts of reducing administrative barriers to trade in an economy like East Africa where the costs of trade far exceed those in other, more developed economies.

“Initiatives that can help reduce the costs of trade in a developing economy like East Africa are important for the continued economic development of the region,” says East Africa Cluster Top Steve Felder. “By collaborating with customers, authorities and other organisations on a green corridor solution we have the potential to help our East African customers become more cost competitive and, down the line, contribute to the continued growth and resilience of the East African import and export business.”

Author: Henrik Hvid Jensen, Senior Enterprise Architect, MLIT Technology Innovation

 

Why sustainability is not (just) a Western concept

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There is a common perception that corporations interested in sustainability are mostly those based in US and EU where consumers generally ‘care more’ about the societal and environmental footprint of the products they buy and the food they eat.

The latest research on consumer behaviour indicates that this may not be the whole truth with consumers in emerging markets such as India, China and Brazil showing an increasing interest in the environmental impact of their purchasing decisions as opposed to Western consumers.

At the same time, governments in emerging markets are tightening regulations to encourage companies to minimize pollution and play a more active role in solving sustainability challenges in their local context. For example, Chinese legislators recently passed the first amendments to the country’s environmental protection law in 25 years, promising greater powers for environmental authorities and harsher punishments for corporate polluters.

Another example is India. Recently, the Government of India passed a new law requiring companies to invest 2% of their net profits in local community projects. While many companies, including Maersk Line, have been involved in local community projects in India for years, the law is sparking renewed conversations among corporate India on how private companies can best support the government and civil society in accelerating India’s economic, social and environmental development objectives.

Discussing shared sustainability challenges & opportunities with Indian customers

In order to better understand how customers in emerging markets like India are addressing the sustainability challenges and opportunities specific to their sectors, Maersk Line in India recently hosted a roundtable discussion with eight of its key customers across Indian based multinationals covering industries such as steel, automotive, textiles and chemicals. The roundtable which included representatives from Mahindra & Mahindra, TATA, Reliance, ITC Ltd-PSPD and Aditya Birla Group included presentations from Maersk Line’s global sustainability advisor, Mette Olsen, and the NGO, Forum for the Future, and involved lively exchanges between the participating companies on their respective sustainability challenges.

“The roundtable discussion was a unique opportunity for Maersk Line to learn what some of our most important customers and business partners are doing in this important area and also share some of the work we have been doing at a global level,”  Explains Franck Dedenis, Managing Director for Maersk Line in India.

“At the same time it was a good opportunity to explore concrete areas where we as local companies with global outlooks and strong values can work together to address some of India’s core sustainability challenges.”

Dr Vidya Tikoo, Vice President, Sustainability Framework, from Aditya Birla Group, adds:  “This was a good forum for us to discuss and explore opportunities for how we as private companies can contribute towards sustainable development in India.  We look forward to taking these discussions further with Maersk Line and the other participating companies in the roundtable.”

Introducing SLICE – Sustainable Logistics Initiative by Conglomerates in Emerging Economies

At the end of the roundtable, a number of concrete actions were identified where the participating companies committed to collaborating on concrete sustainability initiatives, including sharing data on environmental impacts across the supply chain and joint community investment projects aimed at improving the livelihood for Indian truck drivers.

In order to effectively follow through on these – and future – ideas, the participating companies agreed to formalise the initial discussions into a regular roundtable format focusing on advancements in sustainable logistics in India. The new initiative which will convene on a regular basis on the initiative of each of the member companies has been named SLICE: Sustainable Logistics Initiative by Conglomerates in Emerging Markets.

Beroz Gazdar, Senior Vice President of Sustainability at Mahindra & Mahindra explains:  “The enormity of the challenges businesses face today dictates that no single entity, however large, can successfully tackle them on its own. It is quite clear that true sustainability can be achieved only through collaboration. The initiative by Maersk Line in India of bringing its Indian stakeholders together to collectively work towards sustainable logistics is a step in the right direction. Addressing common concerns through regular interaction will be a win-win for all.”

Concludes Geeta Uppal, Head of Ocean Logistics, Reliance Industries Limited: “I am pleased to be invited as a participant in this initiative by Maersk Line. I look forward to some common goals and learnings that will continuously look at improvements in the supply chain towards a more sustainable environment.”

India’s new “CSR law” explained

After years of debate, the Indian Parliament passed its first update of the country’s corporate law in more than 50 years, which includes several important provisions that modernize India’s corporate governance rules. The provision that has gotten the most attention is the so-called “2 percent” requirement, which has made India the first country in the world to mandate companies to invest in philanthropic causes in their local communities, e.g. activities that promote poverty reduction, education, health, environmental sustainability, gender equality, and vocational skills development. The requirement will apply to all companies over a certain size that are incorporated in India, whether it is domestic or a subsidiary of a foreign company. In practical terms, this means that about 8,000 companies will be spending a combined total of up to US$2 billion annually on local community activities in order to comply with law. The law will apply to all Maersk companies incorporated in India.

‘I was far from anywhere, alone’ – A rescue story

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Sailor Stephen Collins was rescued in the Tasman Sea by the vessel Lars Maersk

When Stephen Collins set out on a journey from Brisbane in Australia to bring his sailing boat home to New Zealand, he knew there were certain risks but he never expected the trip to turn into a life-changing experience. On September 3, a few days into his journey, Collins suddenly experienced a diesel leak which made the boat extremely slippery. At a position 20 nautical miles northwest of Elisabeth Reef in the Tasman Sea, Stephen Collins furthermore found himself losing control over the boat as his mainsail was ripped by fierce winds.

During the following 36 hours, Collins struggled to save his boat, his equipment – and his life. Despite the fact that his radio died, Collins was able to send out an SOS signal and entered the water where he waited for assistance. 48 hours after his initial problems began, Collins was picked from the Tasman Sea by Lars Maersk which had been alarmed by the rescue services and had deviated from its route to carry out the rescue.

A letter of thanks 

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Safely back on land, Stephen Collins sent out an emotional and heartfelt letter to his rescuers:

‘I would like to express my gratitude. From the bottom of my heart I would like to thank the Australian Rescue Coordination Centre, the Australian Maritime Safety Authority, the Australian Customs, the Australian Air Force and especially the Captain and crew of the Danish vessel Lars Maersk.

I was far from anywhere, alone. Conditions were terrible, hopeless really.

In the middle of the Tasman Sea, 40 knots of winds, rough seas, dusk then darkness. Thanks to the Rescue Coordination Centre, the Maritime Safety Authority, Customs and the Air Force, after six hours hard running the Lars Maersk got to my position.

I was in the water. It was dark and cold. Yet they saved me. During a three and a half hour fight for my life, the skills of the Captain and crew of the Lars Maersk somehow got me on board. Thanks to everyone who helped.’

Lars Maersk picture courtesy: c2.staticflickr.com

Maersk Line opens a new state of the art container depot at Salta Properties’ Nexus Industrial Estate

Maersk Line’s new state-of the-art container depot has been opened at Nexus Industrial Estate in Altona, Australia. The depot was officially opened by Victorian Minister for Ports and Major Projects, the Hon. David Hodgett MP.

Min Hodgett Sam Sr Nicolaj at plaque (Medium)

Through taking over a 5ha facility, Maersk Line has become the anchor tenant at Salta Properties’ 40ha Nexus Industrial Intermodal Terminal at Altona. Salta Properties is developing two Nexus Industrial Intermodal Terminals, one in Altona and the second is a larger 180ha site at Dandenong South, which will open in the coming months.

Maersk Line’s Container Depot houses a 20,000 litre container wash bay facility with a state-of-the-art ‘first-flush diversion’ water treatment system; a provision to ‘pre-trip’ up to 180 TEU refrigerated containers prior to distribution; a 2,500 sq. m container repair workshop facility plus a 1,500 sq. m container survey area; and a sealed yard of 43,000 sq. m. “We have been able to configure the layout of the depot ensuring we optimise the space available which in turn allows us to cater for future volume growth in the area” says Anthony Randell, Operations and Customer Service Manager, Maersk Line – Australia. “The new depot will also ensure we are more efficient in our container handling helping reduce truck and fork lift miles inside the depot which equates to improvement in truck turn times. We believe that we now have the most sophisticated and technologically advanced container depot set up in Australia.”

Nexus Industrial Estate

Salta Properties’ Executive Chairman, Sam Tarascio Snr said the new Maersk Line facility sets a benchmark for container parks. “Salta Properties welcomes Maersk Line to Nexus Industrial and has valued the opportunity to work with the international shipping line to develop an innovative solution to its business operations.”

“The wider community will also benefit from Maersk Line shifting to Nexus Industrial in Altona from its previous site at Francis Street in Yarraville where traffic congestion has been an issue,” said Mr Tarascio.

Nicolaj Noes, Managing Director – Maersk Line, Australia and Papua New Guinea says “Successful logistical solutions are holistic logistical solutions and that is what we have achieved here, with a solution that offers a platform for productivity gains for Melbourne based importers and exporters, superior turn times and access for the transportation community”. Nicolaj adds “It presents a future proof platform for a continued optimisation of metropolitan rail solutions, a safe and inspiring work environment for the team on the ground and it is a location chosen with due consideration ensuring no disruption to the local community. It is a new standard in depot operation in Melbourne that is future proofed while offering immediate value”.

Naval exercise on Mary Maersk

Mary Maersk provided the backdrop for the Royal Danish Navy in an anti-piracy training mission recently.

It was a dramatic evening for Mary Maersk last Sunday. Sailing through the Fehmarn Belt dividing Denmark and Germany, 30 soldiers were suddenly lowered from helicopters to board the vessel. Members of the Frogman Corps – an elite commando unit of the Royal Danish Navy – their mission was to defeat the pirates who had taken control of the large container vessel.

It was all an exercise, of course, and piracy in the Baltic Sea has been non-existent for centuries. For the Royal Danish Navy, however, the rescue operation was designed to be as realistic as possible in preparing them for anti-piracy missions in the Gulf of Aden, where Danish troops are regularly posted as part of an international force.

Role playing to secure maritime intersts

The operation included a wide number of actors in a role-playing setting, including paramedics, military police and the pirates themselves. The frigate Niels Juel was close at hand throughout. After having successfully freed the crew, the elite unit proceeded to search the ship for any remaining threats before they could the mission a success.

Night Hawk is a multinational exercise for elite units, held every other year in Denmark since 2000. More than 1,300 soldiers from seven different countries take part in the exercise with support from helicopters, aircraft and ships.

Chief of the Frogman Corps Stefan Neubauer Andersen says: “The mission is absolutely serious in terms of what we have seen happen in the area off of Somalia. And it is an important part of securing Denmark’s maritime interests globally.”

Maersk Line contributed by offering access to the vessel, but makes it clear that the participation does not indicate any changes to the current threat assessment.

Video credit: Royal Danish Navy