Pentalver Cannock sails onward after strong year of trading


Container haulier Pentalver Cannock said a rise in turnover and pre-tax profit during 2017 was essentially down to the continuing improvement in trading conditions since the economic downturn. The company, with depots in Felixstowe, Southampton, London Gateway and Cannock, reported a 7.6% increase in turnover to £45.2m in the year ending 31 December 2017; up £3.2m on 2016’s £42m. It put the rise down, quite simply, to an increase in haulage activity. Pre-tax profit jumped to £1.2m, an increase of […]

Integrator heavyweights making light work of the e-commerce boom

The vertiginous rise of e-commerce is benefiting integrators rather than traditional air cargo handlers, conference-goers heard today.

Handlers need to “wake up” to the needs of e-commerce or risk losing business to integrators that are shipping ever heavier pieces of cargo.

While e-commerce is commonly associated with packages no larger than a suitcase, the likes of DHL are now handling consignments of up to 150 kg said Hans Van Schaik, sales manager at Saco Airport Equipment.

“E-commerce growth is tremendous,” he said. “Consignments are increasing in weight and integrators are handling 100 kg, 150 kg packages”.

Integrators are building up five-tonne pallets just like traditional handlers but with the added advantage of both speed and track-and-trace. Traditional operators should “wake up” and “take a look at what’s in the express parcels business”, Van Schaik said.

At integrator hubs in Brussels and Liege there are now 300 to 400 workstations, while at Leipzig there are 700, attendees at the Brussels Air Cargo Handling conference heard.

“It’s going to go worldwide,” Van Schaik warned. As well as off-airport distribution centres, tech giants Alibaba and Amazon will soon have their own on-airport sorting centres, he predicted.

Massive shippers such as these will make current attempts to “digitalise” the air cargo industry look ridiculous in that they will take market share with read-made in-house digital solutions.

Whereas legacy handlers often still rely on brawn, integrators and tech giants operate warehouses run by robots. Robotics is still “not typical for normal cargo industry handlers,” said Van Schaik.

The fitful path towards the creation of an electronic air waybill will be made to seem all the more anachronistic by these high-tech players. “This is not a problem for those guys,” he said. “If you can do it for parcels, then why not for pallets?”

Much of the discussion over the two-day event centred on data and the extent to which the different players in the air cargo chain are willing, or rather unwilling, to share it.

While representatives of airports, handlers and shippers (freight forwarders were light on the ground) agreed that they should share more, and in some cases were sharing more, they also realised they were not doing enough to compete.

Some simply don’t have the financial clout. Experiments with robotics were sometimes trialled and then discontinued because there was not enough revenue to support the investment, attendees heard.

“If you’re not at the table, you’re on the menu,” said Rogier Spoel, airfreight policy manager at the European Shipper’s Council.

This could well turn out to be very true. Alex Labonne, chief technology officer at cargo management systems develop Hermes, predicted that without a change in mind set towards data sharing, disruption by the likes of Alibaba could turn into a race not to compete, but to be bought out.

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Oil firms as U.S. crude inventories fall, products gain

LONDON (Reuters) – Oil prices edged higher on Friday as a rise in stocks of refined petroleum products offset a big fall in U.S. crude inventories to the lowest level since 2015.

Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford

Brent crude futures firmed 32 cents to $76.82 a barrel by 1204 GMT. U.S. West Texas Intermediate (WTI) crude futures rose 11 cents at $67.88 per barrel.

Both contracts were set for their first weekly loss in three.

U.S. commercial crude oil inventories fell by 4.3 million barrels to 401.49 million barrels in the week to Aug. 31, the lowest since February 2015, U.S. Energy Information Administration (EIA) data showed on Thursday.

But sentiment suffered due to a rise in refined product stocks coupled with relatively weak demand for fuel during this summer’s U.S. driving season – when consumption normally peaks.

Gasoline stocks rose by 1.8 million barrels, while distillate stockpiles, which include diesel and heating oil, climbed by 3.1 million barrels, the EIA said.

“(Gasoline) stocks … are now 3.5 percent above the year-ago level. More worryingly, the surplus to the five-year norm now stands at 5.4 percent, the highest since June 2017,” Stephen Brennock of London brokerage PVM said.

“This bears all the hallmarks of a disappointing summer driving season. As a result, the alarm bells are now ringing that a gasoline glut will persist for the foreseeable future,” he added.

On the supply side, U.S. crude oil production last week remained at a record 11 million barrels per day (bpd), a level it has largely been at since July.

Outside the United States, U.S. sanctions against major oil producer Iran are fuelling expectations of a tighter market towards the year-end.

“The main driver of oil prices, in our view, remains the reimposition of U.S. … sanctions against consumers of Iranian oil,” Standard Chartered said this week.

“We have cautiously subtracted only 500,000 bpd from Iranian supply, assuming its production at 3.3 mln bpd for 2019 and 2020,” SEB Markets commodities analyst Bjarne Schieldrop said.

Saudi Arabia will need to keep production between 10.5 million bpd and 10.7 mln bpd to the end of 2020 “to prevent oil prices from spiralling higher”, he added.

Washington has indicated it may offer temporary sanction waivers to allied countries that are unable to cease imports immediately from Iran.

Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson and Louise Heavens

E-commerce fuels XPO’s second quarter

E-commerce helped XPO Logistics record a 16% year-on-year revenue rise to $4.36bn in 2018’s second quarter, as the acquisitive US giant also gained $2.1bn of new business in the first six months of this year.

Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) increased to $436.7m for the second quarter, excluding integration and rebranding costs of $7.8m. This compared with $370.8m of adjusted EBITDA for the same period in 2017.

The company’s logistics segment generated revenue of $1.51bn for the quarter, a 19.1% increase on 2017.

The company said that segment revenue growth was led by “growing demand for e-commerce logistics globally, as well as by the consumer packaged goods and technology sectors” in North America and the fashion sector in Europe. A revenue benefit of 4.7% came from favorable foreign exchange rates.

Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “Our strong second quarter performance was highlighted by record results for revenue, net income, adjusted EBITDA, cash flow from operations and free cash flow. We grew profitability faster than revenue, with a 178% increase in net income and an 18% increase in adjusted EBITDA on organic revenue growth of 11%.

“In logistics, we implemented a record 37 customer start-ups in three months – and once again, the big driver was e-commerce. In transportation, we increased freight brokerage net revenue by 46% with a lower headcount. North American last mile and European transport were also standouts.

“In our North American less-than-truckload business, we achieved the best adjusted operating ratio in 30 years at 84.3%.”

Operating income for the logistics segment increased to $67.3m, compared with $49.4m for the same period in 2017. Adjusted EBITDA for the segment improved to $134m, an increase of 20.6% from a year ago.

The increases in operating income and adjusted EBITDA in logistics were primarily were due to revenue growth and site productivity improvements, partially offset by higher direct operating costs related to a record number of quarterly contract startups: 19 in North America and 18 in Europe.

Jacobs continued: “Our expanded sales force signed $2.1bn of new business this year through June. We have innovations underway in every corner of the company. They include the ramp-up of our XPO Direct distribution network, the build-out of our digital freight marketplace, the expansion of our last mile footprint, and the deployment of dynamic analytics for workforce planning.

“These are secular growth drivers that create sustainable value for our customers and shareholders.”

The company reaffirmed its full year 2018 target for adjusted EBITDA of at least $1.6bn, and 2017-2018 target for cumulative free cash flow of approximately $1bn.

XPO Logistics also announced that John Hardig will step down as chief financial officer (CFO) on August 15, 2018,  to spend more time with his family.

Hardig, has served as XPO’s first CFO since February 2012 will remain available to the company in an advisory capacity through September 15, 2018. Sarah Glickman, senior vice president, corporate finance, will assume the role of acting chief financial officer.

Jacobs said, “I’m immensely grateful to John for helping us grow XPO into a $15bn company over the last six-and-a-half years. John’s legacy at XPO is one of integrity and accomplishment. We wish him the very best.”

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Transport Industry Gradually Gaining Recognition as Employer for Skilled Trainees

Apprenticeship Numbers in Overall Sector Rise but Road Freight Lags Behind

Shipping News Feature
UK – According to the Strategic Transport Apprenticeship Taskforce’s (STAT) ‘Transport Infrastructure Skills Strategy: Two Years On’ report, the transport industry is leading the way in unlocking careers and tackling the need for the engineers of the future in the UK. 2,784 apprenticeships have been created in road and rail in the past year, despite a wider fall in in the total number of apprenticeships embarked on since the new levy was introduced. Mike Brown MVO, Commissioner, Transport for London and Chair of STAT, said:

“The power of collaboration on skills from transport employers who are committed to creating more high quality skills and training opportunities for people of all ages has already provided great results across the sector. The increase in transport apprenticeships is vital to addressing current skills shortages, helping to fill gaps in future skills, improving productivity and driving growth in Britain for the future.”

In 2016, STAT’s first year of analysis, over 2,000 apprenticeships were reported in roads and rail and the taskforce set out its trajectory for 27,000 to 35,000 by 2022, as well as commitments to many thousands more across the sector, including increasing the diversity of the transport workforce, with a strong focus on encouraging more women and Black, Asian and Minority Ethnic (BAME) people into the industry

In its second year, STAT saw a 22% increase in apprenticeships created in roads and rail. Looking ahead, there are an additional 8,000 opportunities each year in express delivery, 1,200 in maritime and 10,000 apprenticeships before 2030 at Heathrow. Whilst the road freight industry did not meet its aspiration to deliver 15,000 apprenticeships in 2017-18, the sector is hopeful that it will see significant uptake in 2018-19 now the LGV driver level 2 apprenticeship has been approved. Nusrat Ghani, Transport Minister with responsibility for Skills and Apprenticeships within the Industry, commented:

“This report shows that significant government investment in transport is playing a key role in creating life-changing opportunities through its high quality apprenticeships – helping us lead the way in unlocking new jobs and ensuring this country has the skilled workforce it needs for the future.

“Although we are seeing evidence of better BAME representation in the sector, our ambitions are clear. From road to rail, maritime to aviation, we must all redouble our efforts to bring more women into technical and engineering roles, remove barriers, ensuring we bring talented people from all backgrounds together to tackle the skills gap.

“We are committed to strengthening links between employers in our sector and young people, particularly in the creative, innovative world of engineering through our Year of Engineering campaign. I look forward to even more apprentices starting brilliant careers in years to come.”

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Maersk: India Recording a 14% Upturn

India´s containerized trade with the BRICS´ nations trademarks a rise of 14 percent. Export trade from India to Brazil, China, Russia and South Africa in Q1 2018 increased 7,5 percent YOY from same period last year. South Africa turned to be Indian´s top trade partner.

BRICS EXIM trade registers steady growth of 1.5 percent in Q1 2018 compared to Q1 2017. “Last year, the BRICS´ joint contribution to the world economy was 23.6 percent, and according to the International Monetary Fund’s predictions this is set to rise to 26.8 percent by 2022. The BRICS countries’ share of the world’s population is even higher: 41 percent in 2015. With these numbers on the table, it is clear that the BRICS will keep on playing an important role in the future of global trade,” says Steve Felder, Maersk Line Managing Director for India, Sri Lanka, Bangladesh, Nepal, Bhutan and Maldives.

In volume terms, India -followed by China- leads the EXIM trade whilst Brazil, South Africa and Russia witness a slump in the trade as compared to Q1 2017.

India has the highest exports in Q1 2018 pegged at 13 percent in the past five years. Owning close to 80 percent of EXIM, China leads the EXIM trade among the BRICS nations with approx. 9 – 10 million FFE (Forty-Foot Equivalent Unit) followed by India between 1.5 million to 2 million FFE.

On the import front, while occupying the largest chunk of imports for the BRICS countries, China has witnessed a downfall in imports of 4 percent YOY. India is the second largest importer among BRICS’ nations after China and has a buoyant double-digit import growth rate trade at 15 percent. This growth is due to an increase in volumes from Russia and South Africa at 37 percent and 28 percent respectively, making them the fastest growing import trade partners for India.

“India’s bilateral trade relations with China have received much needed impetus in Q1 2018 with China offering greater access for Indian exports in pharmaceuticals, food grains, cotton and petrochemicals. As for the Western markets, the repercussions of Brexit resulted in USA becoming the third largest car importer from India in FY 2018 and affected the Indian exports to UK and Europe. In addition, the recent Cabotage policy relaxation in India has led to a healthy competition among shipping lines and will further open up transshipment opportunities for Indian ports,” explains Steve Felder.

Over the last 12 months, India has made significant improvement in the ‘ease of doing business’ ranking, moving from 130th position in 2017 to 100th position in Q1 2018. “We believe, that the change is a clear evidence of India’s resolve to bring reform to its logistics sector and thereby enhance its ease of doing business and cost competitiveness ratings,” adds Steve Felder.

The upcoming 10th BRICS Summits due in Johannesburg, South Africa, 25-27 July 2018, might be the right scenario to further discuss the best way to boost trade among BRICS´ nations among them and with the rest of the world.

WLTP deadline and diesel sales downturn heighten auto industry premium freight dependence

The rise in prominence of Low Emission Zones (LEZ) in major cities and the future banning of older diesel vehicles is driving a downturn in diesel sales and a sharp rise in the popularity of gasoline and electrified vehicle powertrains. This shift in consumer buying habits is placing added strain on OEMs and suppliers of key emissions reduction components for gasoline engines, resulting in an increased reliance on emergency logistics expertise to sustain progressively lean supply.

The change in consumer buying is further compounded by New Worldwide Harmonized Light Vehicle Test Procedure (WLTP) standards, which all new vehicles must adhere to from September 1st. All new vehicles will publish new WLTP-measured fuel consumption figures from January 1st 2019 and are required to meet stringent new CO2 emissions targets 12 months later. According to emergency logistics expert, Evolution Time Critical, some large-scale vehicle manufacturers are facing additional downtime while switching to WLTP, while major Tier suppliers are expediting shipments using premium freight in order to meet the rising demand of components that enable reduced emissions and greater efficiency under the new standards.
“Suppliers of components that are vital to achieving reduced emissions under WLTP procedures have experienced an increased demand and an expectation for reduced lead-times as manufacturers battle to meet new legislation and consumers are physically buying more gasoline-powered cars,” says Evolution Time Critical managing director, Brad Brennan. “This has led to a perfect storm scenario whereby manufacturers are facing two separate requirements for increased short-term capacity: preparation for new legislation and the growing consumer demand for non-diesel powertrain. Put simply, nuanced new car demand exists that could not have been previously accounted for. We have consequently been working proactively with a number of suppliers who are seeking premium freight options that accelerate shipments through air charter to manufacturers.
“In recent years,” concludes Brennan, “vehicle manufacturers have identified the vital safety net provided by working with an ultra-responsive logistics partner; such safeguarding can become a vital competitive advantage when the industry is adapting to new legislation. We will continue working proactively with manufacturers to avoid prolonged interruptions that could lead to finished vehicle shipment delays.”

cargo-partner sees revenues rise on airfreight growth

Austria-based logistics firm cargo-partner has posted a 2% rise in its consolidated turnover for 2017, at €698m. Net profit for the year totalled €6m.

Chief executive Stefan Krauter said: “We had a successful start into the business year and have achieved volume growths in all our business areas. The general upward trend was further strengthened by the global economic upswing.”

Cargo-partner handled a total of 1,001,500 shipments in 2017, 90,000 more than in the previous year.

The logistics provider’s airfreight volumes rose by 23% to 171,000 tonnes over the 12-month period. Its sea freight and trucking divisions also registered growth, handling 1,831,000 tonnes and 1,018,000 tonnes of cargo respectively.

cargo-partner highlighted several developments that contributed to “substantial growth” in its contract logistics activities. For example, it recently invested in a new 1,500 sq m warehouse in Sofia and expanded its logistics centre in Dunaiska Streda from 7,200 sq m to 14,200 sq m. The latter will grow by a further 4,000 sq m by the end of this year.

 The company has built a new 12,200 sq m iLogistics Centre near Vienna Airport; that facility is set to open this Autumn. This Winter will see the opening of a new 3,000 sq m warehouse in Hong Kong while a 25,000 sq m warehouse in Ljubljana will commence operations in 2019.

New warehouse locations added in 2017 included Hamburg (4,900 sq m), as well as Clarksville, Tennessee and Chicago, Illinois (14,000 sq m each).

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76% of employees in the travel, transport & logistics industry are looking for better physical and mental wellbeing support in the workplace

With a rise in workplace-related stress, illnesses and mental health issues, 52% of working adults in the travel, transport and logistics industry believe that businesses are not doing enough to support the physical and mental wellbeing of their employees, according to a new study.

Current treatments such as health check-ups, cognitive behavioural therapy and chiropractic treatment are provided by the NHS, through National Insurance contributions, but 80% of those surveyed by Westfield Health stated that the NHS does not have the budget to provide wellbeing services like these.

So is National Insurance becoming unfit for purpose? Employees in the travel, transport and logistics industry don’t seem to know, with only 24% of employees knowing how much National Insurance they pay and only 40% knowing how much of the contribution goes where, be it the NHS, social security or their state pension.

With an ageing workforce and more hours spent in the office than ever, should the NHS’s frontline resources continue to be used for wellbeing services? The research found that 72% of workers in the travel, transport and logistics industry would like to see the Government do more to promote their physical and mental wellbeing. And the vast majority 76% believe that their employers are specifically not doing enough to help employees deal with work-related stress, anxiety and other mental health issues.

Similar to the recent rollout of the workplace pension opt-out, could a government-backed auto-enrolment scheme for wellbeing programmes – funded by employers and by a portion of employees’ National Insurance contributions – be one of the solutions to address the NHS’s long-term financial needs?

Certainly the appetite is there in the travel, transport and logistics industry with employees particularly prone to sedentary behaviour, poor nutrition and sleep deprivation, impacting on their overall health and productivity. As a result, 68% of employees stated they’d use wellbeing services if their employer provided them.

The top things they would like to be offered are:

  1. Health check-ups 53%
  2. Back care and posture 53%
  3. Access to a gym 41%

David Capper, Commercial Director of Westfield Health, said: “The total number of UK working days lost to stress, anxiety and depression resulting from long working hours is 12.5million days. Therefore, it makes sense for employers to relieve some of the pressure through wellbeing initiatives. Not only would they be supporting our economy, they’ll make huge cost savings by looking after their staff’s health, with presenteeism now costing businesses up to three times more than absenteeism**.

“From sleep to nutrition and mental health to physical fitness, there are so many elements that contribute to your overall wellness, happiness and healthiness. In the travel, transport and logistics industry, staff are particularly prone to being sedentary for long periods of time without a break at work, which puts them at serious risk of developing health problems such as heart problems, diabetes, cancer and weight gain.

“As business leaders, we need to create a culture where our people’s health and wellbeing is prioritised to drive confidence, capability, inspiration and ultimately prosperity.”

Research conducted by Westfield Health in April 2018, surveying 2,025 UK employees.
*Source – Active Working Survey, 2017
**Source – Deloitte UK Mental Health Monitor, October 2017