May 17, 2020

From A-Z, how a football reaches a consumer's doorstep, by Kewill

kewill
Supply Chain
logistics news
Brazil World Cup 2014
Admin
4 min
How does a football make its way to the World Cup? Supply Chain Digital investigates
Written by Evan Puzey (pictured, right),CMO ofKewillConsumers rarely think about how a product- such as a football- makes its way from parts in a factor...

Written by Evan Puzey (pictured, right), CMO of Kewill

evan puzey, kewill cmo.jpg

Consumers rarely think about how a product- such as a football- makes its way from parts in a factory all the way to their doorstep. They think about how quickly they can get hold of their preferred brand and model, but never consider all of the complicated steps that make up the transportation and logistics process that gets stock to the store or warehouse. This article provides insight into the many steps that a product as ubiquitous as a football must go through on its journey from the factory to the consumer’s home.

Approximately 40 million footballs are sold each year around the world, and sales are expected to increase significantly during the two month period leading up to the World Cup, which is being held in Brazil currently. The World Cup is regarded as one of the most watched tournaments on the planet and draws the attention of billions of viewers around the world, who don’t often think about how footballs make it to the World Cup pitch or to their home.

The football goes through three key phases on its trip to the consumer.

Manufacturing stage:

Most often today, footballs are typically manufactured in a Far East location with good logistics links and proven manufacturing expertise, yet (relatively) low labor costs - such as Shenzhen, China, which is located about 25 miles outside of Hong Kong. There, manufacturing is typically undertaken by a sourcing partner rather than by the recognisable brand owner itself.

The logistics process is further complicated by the fact that the components required to manufacture the ball will need to be shipped from various locations via road, rail and air. When all of the components are added together, the total distance travelled could be up to 10,000 miles, before the product is even assembled. These components are subject to customs compliance and governmental checks, even within China, where even different provinces have their own regulations and procedures.

Multimodal transportation stage:

Producing the goods is only the first step. Once the footballs clear the production line and the quality testing process is complete, the distributor’s logistics partner then tackles the long journey to the point of sale. Goods are loaded at the factory in Shenzhen onto trucks where they will be shipped and stored at the logistics service provider’s (LSP) warehouse located close to the Hong Kong Container Port or Airport. The containers are carefully stuffed to protect the product against damage (in line with the distributor’s strict requirements), with the correct quantities for each destination. Once the shipment clears customs, the appropriate documentation must be completed and submitted. Then, the consignment of balls will be sent to port services where it will be loaded for onward transport by land, air or sea. It will need to clear customs again once they reach their destination. Advance notification and filing of declarations to U.S., European and a growing list of other countries customs authorities is required under the U.S. Importer Security Filing (ISF) and the EU Import Control System (ICS) and others.

Delivery & distribution stage:

Once the goods have arrived in the destination country, they need to be distributed to the right location for fulfilment (in a large country like the U.S. this could be a long distance). The ‘final mile’ is frequently the most complex part of the entire transportation process.

The containers are first de-stuffed and sorted from the carrier that they arrived in. The trucks are then loaded with goods, which are transferred to a warehouse (either owned by a distributor or by an LSP carrying out value-added services on their behalf) for storage and finishing (i.e. packaging, labelling). The packaged soccer balls are then distributed to regional distribution centers, where they will be shipped to stores and online fulfilment centers. The balls are finally inflated and put on shelves or packaged for online fulfillment for delivery to the consumer’s doorstep.

The process outlined above is complex and typically involves the coordination of multiple global, regional and local transportation partners and will certainly require an in-depth knowledge of international logistics, security and customs procedures. Delays can occur due to bad weather, customs checks or even civil unrest disrupting carrier schedules. These delays can have significant impacts, by creating a domino effect that can delay each subsequent stage of the process, leading to increased costs. Ensuring goods arrive on schedule, and that all of the local partners are kept informed at each stage, is a major undertaking.

As global trade continues to grow, it’s becoming increasingly difficult to adhere to the ever increasing and changing rules and regulations, especially when goods are crossing international borders.  However, a multimodal transportation management solution that integrates supply chain processes such as multimodal transport, warehousing and compliance can help companies ensure that they are able to more efficiently transport goods, like soccer balls, from one destination to another. A single platform can provide global levels of visibility and control allowing you to manage processes and take action that is critical to the success of business operations. 

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Jun 16, 2021

EU and US agree end to Airbus-Boeing supply chain tariffs

supplychain
Boeing
Airbus
tariffs
3 min
Supply chains embroiled in Airbus-Boeing dispute will no longer be impacted by $11.5bn tariffs imposed on food and beverage, aircraft and tobacco

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.”

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