Global Logistics – September 2010

Audi Stops For Green Light

Audi is pushing the accelerator in its pursuit of greener cars and a more sustainable supply chain. For example, in December 2009, Green Car Journal honored the German automotive manufacturer’s 2010 Audi A3 TDI as its Green Car of the Year.

But the carmaker doesn’t stop there. Audi transports its carbon-friendly cars in a green manner, too. In August 2010, the company became the first shipper to use DB Schenker Rail’s Eco Plus product, which guarantees CO2-free rail transportation. As part of the new service, the German railway operator sources renewable energy to power transport within its domestic rail network. Audi bears the additional costs incurred, compared to using conventional electricity.

Using DB Schenker Rail’s green trains will enable Audi to eliminate 5,250 tons of CO2 emissions per year, or more than 77 pounds per car transported.

Mexico Taxes U.S. Imports

Mexico’s agricultural industry has been hard hit by a recent spate of drug-related violence and theft. The U.S. government’s unwillingness to restore a 2007 pilot program that allowed Mexican trucking companies, compliant with U.S. safety rules, to haul cargo north of the border adds further insult to perceived injustice—so much so that Mexican authorities recently imposed a second round of tariffs on U.S. imports such as pork cuts, ketchup, cheese, sweet corn, and fruit. The country will charge duties, ranging from five to 25 percent, on a rotating list of 99 U.S. products valued at about $2.5 billion.

After the United States placed a moratorium on the trucking program in 2009, Mexico responded by placing tariffs on U.S. goods including vegetables, wine, juice, sunglasses, and toothpaste. The dispute first erupted in 1995 when the United States refused to implement a cross-border plan agreed to under the North American Free Trade Agreement amid opposition from U.S. labor groups.

Australia Labors Over Transport Expansion

Transportation infrastructure has emerged as a major election issue in cash-strapped New South Wales, Australia, as the government struggles to balance population growth with record trade at Sydney Airport and Port Botany.

The Labor Party wants to build a second airport in Sydney, but Green Party constituents, concerned about noise and pollution, prefer an alternative airport location, not a second one. The debate has one Labor minister, no stranger to rocking the establishment, voicing his support in favor of further intermodal transportation investment.

"I have worked with my colleagues in Canberra to deliver on the upgrade of rail infrastructure at Port Botany to improve access to the port, as well as deliver $71 million to get the planning right for an intermodal terminal. This will ease congestion on the M5 and around Port Botany" says Peter Garrett, Minister for Environment Protection, Heritage, and the Arts, and former lead singer of Australian rockers, Midnight Oil.

Labor will no doubt be burning the midnight oil on this issue.

Diagnosis Positive: UPS Heads East

UPS plans to open two health care logistics hubs in Singapore and China to tap rising regional demand for medical devices and drugs. The Singapore facility will handle Southeast Asia demand and open in 2010, while the China operation is expected to start up in 2011.

The decision comes as UPS boosted its annual profit forecast after second-quarter earnings and amid spikes in Asian and European shipments.

The company anticipates steady demand for air and ocean freight within Asia, which precipitated the opening of a $180-million logistics hub in Shenzhen earlier in 2010.

U.S. Football Imports Spiral

With yearly regularity, the gridiron preseason kicks off every August, and football imports spike in the preceding months to meet forecasted demand.

Historically, China exports the majority of footballs, according to Zepol Corporation, a trade intelligence company based in Minneapolis. The graph (bottom right) represents U.S. imports from China where the word "football" was used in the product description on the bill of lading (BOL). 2010 shipments to the United States (in yellow) began to increase in the spring, topping out in July 2010 with 277 shipments. There was also a noticeable increase in October 2009, with 263 shipments, due to holiday demand.

The seasonal trend of U.S. football imports has remained relatively consistent during the past three years, with the same characteristic increase in the spring and lull in the winter months. The data shows that the 2,753 shipments between August 2009 and July 2010 surpassed the previous two periods, with 2,349 and 2,227 shipments respectively, an indicator of the economy’s gradual return to pre-recession levels.

There is one slight fumble with the data, however. Outside the United States, football often refers to soccer. So depending on who filled out the BOL, some of these recent shipment increases may also include soccer balls, which corresponds with continuing demand following the 2010 World Cup.