Mar 16, 2021

Nippon Express launches halal air cargo network in Japan

Supplychain
Halal
NipponExpress
Logistics
Rhys Thomas
2 min
Nippon Express’s domestic service taps into this growing market of muslim and non-muslim consumers attracted to halal’s sanitation laws living in Japan
Nippon Express’s domestic service taps into this growing market of muslim and non-muslim consumers attracted to halal’s sanitation laws living in Ja...

Nippon Express will expand its position in the growing Sharia law-compliant logistics market with the launch of a new halal-certified domestic air cargo transport service in Japan. 

The service, which began on 8 March, will tie into the firm’s Express Hi-Speed domestic air cargo transport service, and will serve the roughly 200,000 Muslims living in Japan. Nippon Express expects that market to swell once borders re-open and the country begins to welcome tourists from around the world. The logistics giant has also identified a secondary market for halal-certified goods: a growing group of consumers who are attracted to the strict sanitation and hygiene compliance of halal - perhaps driven by concerns over the coronavirus - despite not adhering to the religious requirements. 

Nippon Express’s halal transport brings a number of new features to its Express Hi-Speed, specifically tailored to compliance with Islamic law. These include greater visibility for halal products throughout transit, including a special labelling and tracking system, as well as an educational programme for employees engaged in the network. Customers can also track the status of their delivery through up to seven transit points using the company’s website, and tailor their delivery to specific needs, such as next-day or a specified time and date. 

In a statement the company said: "With interest in halal products growing in Japan, Nippon Express has been constructing a halal logistics service network to support customers' supply chains and provide safety and peace of mind to Muslim customers and others." 

This is not the first foray into halal logistics for Nippon Express. Most recently the company’s subsidiary PT NEX Logistics Indonesia received halal certification from the LLPOM-MUI, Indonesia's governing body for halal certification, for a second halal compliant logistics centre in the country. Islam is the largest religion in Indonesia; more than 85% percent of the population identify as Muslim. 

Halal market growth 

The Halal market is expected to grow significantly in the next five years. Valued at $286.96bn in 2019, a recent report by Grand View Research forecasts the halal logistics market to expand by a CAGR of 8.4% until 2027 - further compounded by a rise in the spending power of muslim communities and the fact that more young people are actively involved in Islamic practice compared to other major global religions. 

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The market is also expanding beyond food and beverage, the category most often associated with halal practices. New verticals include halal fashion, among other lifestyle sectors including travel and hospitality.

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Jun 19, 2021

Driver shortages: Why the industry needs to be worried

Logistics
SCALA
supplychain
Brexit
Rob Wright, Executive Director...
4 min
Logistics professionals need urgent solutions to a shortage in drivers caused by a perfect storm of Brexit, COVID-19 and compounding economic factors

While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks. 

A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so. 

What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.

"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"


That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.

But where has this skills shortage stemmed from? 

Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.

COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.

It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing. 

So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done? 

Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change. 

Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.

Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line. 

On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains. 

Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months. 
 

Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector

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