All posts tagged 'risk'

Global Economic Optimism

by Cliff Lynch
27. January 2014 08:30


Image: WORLD ECONOMIC FORUM / swiss-image.ch / Photo Christof Sonderegger

At last week's annual World Economic Forum in Davos, Switzerland, most of those attending were very upbeat about the global economy. The World Bank, International Monetary Fund and others have predicted that 2013 will show the most significant growth in three years; but that is based primarily on the strengthening U.S. economy. But what about the emerging markets, the ones in which many firms have a significant interest?

Also last week, Agility published the Agility Emerging Markets Index which assessed 45 emerging markets on their attractiveness as logistics markets. The study considered three metrics – market size and growth potential, market connectedness and market compatibility. (An emerging market, according to the World Bank, is a country making an effort to improve its economy and achieve the same level of sophistication as a "developed" country.) Only 15 of the 45 had a 2012 GDP of over $300 billion.

According to the survey, logistics professionals were very optimistic about the prospects for most of these markets as well, with the Asia Pacific countries having the brightest perceived outlook. The top six markets, according to the respondents, are China, India, Brazil, Russia, Indonesia, and Mexico. Mexico rose two rankings from 2013, no doubt a result of "nearshoring" interest. Even though China remains a strong market, 63% of the respondents agreed that manufacturers could likely move away from China with Vietnam, India, Mexico, and Indonesia seen as the most likely destinations. When asked to identify the most significant factors affecting potential emergence, respondents listed economic growth, growing trade volume, Foreign Direct Investment (FDI), cheap labor, potential consumer spending and geographic location.

Not surprisingly, there are risks to conducting business in many of these markets. In Asia the major risks were identified as natural disasters, economic shocks and corruption in that order. In Latin America, 42% saw corruption as the major obstacle, followed by poor infrastructure. In the Middle East, government instability and terrorism were the major concerns, and in Sub-Saharan Africa, poor infrastructure and government are significant issues. Other problems noted were such things as difficult customs procedures, government policies, difficulty in setting up and doing business, security, and difficulty in repatriating profits.

From the results of this study it seems clear that economic growth is the driving force behind the most popular markets. While factors such as cheap labor, location, and population are important, growing economies are viewed as having the greatest logistics potential. For the complete report, see www.agilitylogistics.com.

How safe are your funds?

by Misty Farmer Koopman
11. April 2013 15:19

How safe are your funds?

There are billions of dollars being circulated around the world for the movement of goods. Some companies spend more on transportation costs than any other expense.

Accounting departments should treat invoices from carriers much differently than the ones from any other vendor. To pay freight bills, it requires knowledge in logistics -- tariffs, bills of lading, carrier contracts, etc.

These invoices need special attention because 3-5% of the time there are overcharges and duplicate charges. Also, by outsourcing freight bill audit and payment, companies pay one-tenth of the cost and get the reconciliation and reporting to better manage their shipping activities.

With that being said, companies must carefully choose the freight bill audit and payment provider. There are a number of areas to review, but most importantly, financial stability. Performing due diligence on the vendor's financials not only protects the company's funds but also gives reassurance that they will not lose money and be indebted to any carrier.

This white paper, "Trust & Verify: Best Practices - Financial Due Diligence and the Outsourcing of Freight Bill Audit and Payment," highlights a number of steps that can be taken to ensure a successful relationship, protecting and minimizing the financial risk to the outsourcer.

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Whitepaper authored by Clifford F. Lynch and sponsored by CTSI-Global.

INFOGRAPHIC: More broken bridges than Golden Arches

by Marly Hazen McQuillen
14. November 2011 09:35

Recently, Transportation for America released a report with a startling statistic: "There are more deficient bridges in our metropolitan areas than there are McDonald's restaurants in the entire country."

More Broken Bridges Than Golden Arches

View all sizes, and embed from Flickr. Available for reprint (optimized for 8.5x11 inches).


- Transportation for America: The Fix We're In For: The State of Our Nation's Busiest Bridges | PR
- Daily Kos Labor: Americans cross 18,000 structurally deficient bridges 210 million times a day
- Images: Las Vegas, by Jess1820 | Pittsburgh, by daveynin | US map, by Theshibboleth


What should be done to address the problem of aging infrastructure in the US? What topics would you like to see for future infographics? Please share your comments!

Silverfin: How remarketing Asian carp could manage the risks of invasive species

by Marly Hazen McQuillen
19. October 2011 13:55

ag 10

Invasive Asian carp are devastating the North American fishing industry. At the same time, widespread unemployment and underemployment have created unusually great need for low-cost, nutritious food.

  • Why isn't there a way to distribute the tasty catch?
  • What are the market opportunities and misconceptions?
  • What's being done to manage food supply chain risks?

Read my guest post at Supply Chain Operations: Asian Carp: How Remarketing Could Mitigate Food Supply Risks


Image by kartfamily

Perspectives on the earthquake: Facebook at fault

by Marly Hazen McQuillen
23. August 2011 15:20

From my high-rise office near the New Madrid Fault Line, it's unsettling to consider the unusual activity to my west and east in Colorado and Virginia. Within a day, each state shattered its seismic silence.

Measuring 5.3 on the Richter scale, the former was Colorado's strongest earthquake in nearly 40 years. At 5.8, the latter was the strongest that Virginia had witnessed in over a century. Thankfully, midnight's earthquake near New Mexico's border caused little damage.

Earthquake

The East Coast / Mid-Atlantic region has been on shakier ground. According to the US Geological Survey, "Earthquakes east of the Rocky Mountains, although less frequent than in the West, are typically felt over a much broader region... as much as ten times larger than a similar magnitude earthquake on the west coast."

In areas of safety, officials have shown caution by evacuating buildings and shutting down a nuclear plant. In other respects, concerns were mild. For example, nearby Alexandria, Virginia, is dealing with minor damage and disruptions, including relocating (only) one of its polling stations. More...