UK supply chain threatened in Middle East, Africa
It’s safe to say the UK has its hands full dealing with a couple of potentially deadly supply chain problems.
On the same day that the country’s foreign affairs committee asked the British government to allow ship guards to shoot to kill Somali pirates, Defence Secretary Philip Hammond was dealing with his own crisis off the coast of Iran.
The Middle East nation has threatened to cut off the Strait of Hormuz, a vital shipping lane that directly links the Arabian Sea with the Persian Gulf. Hammond warned Iran that any attempt to block the waterway would be “illegal and unsuccessful,” and that military force would be used if necessary.
Iran has been toying with the idea of closing the strait to outside ships over a dispute on its nuclear program. More than a dozen oil tankers carrying roughly 15.5 million barrels of crude oil pass through the Strait of Hormuz each day, which is about a third of the world’s seaborne oil shipments.
“It is in all our interests that the arteries of global trade are kept free, opening and running,” Hammond reportedly will say in a speech to the Atlantic Council. “Our joint naval presence in the Arabian Gulf, something our regional partners appreciate, is key to keeping the Strait of Hormuz open for international trade.
“Disruption to the flow of oil through Strait of Hormuz would threaten regional and global economic growth. Any attempt by Iran to do this would be illegal and unsuccessful.”
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With the situation in the Middle East oil supply chain reaching a boiling point, the threat posed by the Somali pirates to ships off the coast of Africa has yet to reach its high water mark. The British shipping industry as a whole is worth £10.7 billion (US $16.57B), and while armed guards have been helping to disrupt pirate activity, the UK’s committee of foreign affairs wants clearer guidelines on the use of lethal force.
Over $300 million has been paid to Somali pirates in the past four years, according to the committee’s numbers, which they view as unacceptable.
“The government's guidance on the use of force, particularly lethal force, is very limited and there is little to help a ship's master make a judgment on where force can be used,” the committee said in a statement. “The government must provide clearer direction on what is permissible and what is not.”
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’.