Sedex supply chain risk briefing's spotlight on Latin America
The key supply chain risks in Latin America include the impact of industry and agriculture on the environment, health and safety risks, and working hours, according to Sedex’s latest Responsible Sourcing Insights briefing.
Latin America offers many opportunities perhaps most critically as a major provider of natural resources – it holds 17 percent of the world’s known oil reserves – but also as an up-and-coming manufacturing location. With a rapidly expanding middle class and increasingly stable democracies, growth in intra-regional trade and also boosted consumer markets are being seen in the region.
Drawing on unique insights informed by data from Sedex and global risk analytics company, Maplecroft, the briefing explores finds that supply chain risks are particularly high in the major economies of Mexico, Brazil, Colombia and Peru. Other briefing insights include:
A lack of proper health and safety management, as well as environmental issues relating to a lack of compliance to local and international laws and inadequate environmental management systems;
With major countries enjoying democratic political systems, limits on freedom of association are less of a challenge than in the past. Instead, inadequate working conditions, discrimination, and prevalence of forced and child labour are the key risks;
Institutions for labour rights enforcement and monitoring have failed to keep pace with economic growth, and are particularly weak outside capital cities;
A lack of, or improper implementation of, management codes or systems to meet local law, ETI Base Code and customer requirements is recorded as the highest occurring issues by external site audits, at 7.8 percent of all single issues recorded.
“With upcoming major events – the 2014 World Cup and 2016 Olympics - taking place in Latin America, there is increasing scrutiny on the region. There is greater need than ever for better understanding and transparency of supply chain challenges and opportunities such as this briefing provides” said Emily Pearce, report author and Stakeholder Manager at Sedex.
“The briefing outlines many of the reasons why the region is set to become more and more important in terms of global supply chains” said James Lockhart-Smith, Head of Latin America at Maplecroft.
Sedex risk briefings focus on different regions, issues or business topics relating to supply chain sustainability and features insights and viewpoints alongside case studies of best practice. The briefings include companies’ achievements and examples of good practice, their impact, collaboration and convergence in responsible business.
Sedex briefings are available from the Sedex Publications webpage.
Cainiao Network Launches Customer-Centric Logistics
As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.
Who Is Cainiao?
According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00.
For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’.
What’s Part of the Upgrade?
Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments:
- Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions.
- Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture.
- Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency.
- Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311).
Where is the Company Headed?
From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’.
Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’.