Automation and reusability core to future supply chain success, says PSE
From multimodality to leading-edge truck platooning trials, few sectors are as open to embracing innovative concepts and technology as the supply chain and logistics industry.
Here, Jane Gorick, co-founder of Packaging Services Europe, a frontline support service provider for returnable transit packaging (RTP), looks ahead at the key concepts she believes will shape the logistics sector across 2018 and beyond.
Warehouse automation and RTP
“In a sector always looking to drive efficiency without compromising quality, automation plays an increasingly important role within the supply chain. Looking ahead, I would expect to see the role of traditional supply chain elements – such as pallets and other load carriers – further evolve to meet the demands of automated storage and retrieval systems.
“Automated handling requires that the unit load – be it a carton, crate, tray or pallet – be uniform for effective orientation of the load carrier in the system. The properties of plastic have more consistent dimensional accuracy ensuring that goods are being stored, racked and transported in the safest possible way. With that in mind, I’d expect to see an increasing number of businesses opt for plastic pallets and packaging.
“The manufacturing industry has already whole-heartedly welcomed mechanisation and automation, and I’d expect to see other industries follow suit. Today, increasing use of robotics in the warehousing environment is adding more pressure on the quality of the load carrier in the system. Dimensional integrity, as well as its cleanliness are key and this means that the transit packaging condition has to deliver the consistency needed for the automation and robotics to work to optimum effect.”
Reuse and Recycle
“According to a report recently published by technology and business consultancy the Smithers Group, the global RTP industry will be worth $271bn by 2019. This equates to a yearly increase of 4% since 2012, thanks in part to initiatives such as the Packaging Waste Directive, which obligates businesses to minimise packaging waste across the supply chain.
“But, historically, the Packaging Waste Directive has meant that there was a similar value associated with recycling and reusing. Going forwards, I’d expect to see more businesses look to promoting reuse over recycling. In terms of RTP, this will require companies to investigate different operational solutions.
“There are a number of key benefits to utilising the reuse option. A significant amount of energy is expended in the manufacture of a plastic pallet or crate, so it makes sound environmental sense to maximise the lifespan of the RTP. Reuse also results in less potentially hazardous waste, as there are limited by-products of the reuse process.
“Operational solutions for the recovery inspection and cleaning of RTP will continue to evolve, as more businesses look for ways to maximise the life of their packaging.”
“In an increasingly diverse marketplace, supply chains are becoming ever more complex to meet the needs of offline and online sales channels, which are not always compatible. Online-offline integration efforts are challenging for companies, and impact inventory systems, warehouses, marketing campaigns and pricing strategies. This same integration can also drive a change in supply chain and warehouse network solutions.
“With leading manufacturers constantly working to streamline delivery options, for example managing returns efficiently or introducing 90-minute delivery options, customer expectations are being raised, and smaller businesses are having to work hard to keep pace. It can be daunting for SMEs, which don’t always have access to the same supply chain support mechanisms as larger or more established businesses.
“As we see the increasing integration of IT systems, and the adoption of automated technology in the supply chain, order fulfilment and delivery times will become faster. Businesses large or small will increasingly need to have the appropriate services in place to meet the needs of their supply chain. Ensuring the necessary national coverage to support their maintenance in a highly automated supply chain that demands fast turnarounds will be key.”
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”