DO YOU KNOW WHAT IS THE DIFFERENCE BETWEEN LOGISTICS AND FREIGHT FORWARDING COMPANIES?

While freight forwarders and logistics companies may seem similar or even synonymous, there are some differences between the two to keep in mind. Unlike logistics companies, freight forwarders might be partners with a network of logistics companies, but they do not have any assets themselves.

WHAT IS A FREIGHT FORWARDING COMPANY?

Freight forwarders tend to partner with several logistics companies either nationally or internationally, which means that price checking capabilities are far better and more thorough than what you would get when working directly with a logistics company. Freight forwarders also have more knowledge and experience around specialty companies, which often vary greatly regarding types of transport, house moving, fragile goods, and lead times, among other elements.

WHAT IS A LOGISTICS COMPANY?

Logistics companies, unlike freight forwarders, own all of their own assets including intermodal fleets of trucks, boats, or planes, but without any access to actual shipping routes. Logistics companies often specialize in specific areas such as dry box, long haul, cold storage, intracity, or large scale. At the same time, they’ll attempt to cover every aspect of the supply chain.

Generally, a logistics company is responsible for managing goods’ physical movement along the supply chain. In some cases, they may also manage documentation.

WHAT ARE THE BENEFITS OF A FREIGHT FORWARDER?

There are multiple benefits of working with a freight forwarding company as opposed to a logistics company. The advantages include:

  • A network of multiple logistics companies that helps reduce prices with more diversity
  • Technology-based freight forwarders can provide instant quotes
  • Pricing is more transparent, as most freight forwarders will provide customers with in-depth breakdowns of all costs
  • Maintain data regarding specialty routes along with route optimization to help minimize delays and ensure timely arrival of goods
  • Have a good understanding of logistics companies in many different specialty areas, including household goods, fragile goods, cold storage, and others

In addition to these benefits, freight forwarders can also handle all of the paperwork associated with freight forwarding, including customs documentationbills of lading, shipper’s export declarations, insurance forms, and letters of invoice.

WHY YOU SHOULD TURN TO MEKONGZON FOR RELIABLE FREIGHT FORWARDING

Supply chains need freight forwarders that have a good understanding of the goods involved, along with the various suppliers and trade routes. Mekongzon can give you top-tier customer service and dependable solutions regardless of your needs. Some of the specific advantages you’ll get with Mekongzon include:

North American Coverage

With strategic partners located in Toronto, Montreal, Washington, and Vancouver, Mekongzon can meet all international freight needs.

Global Coverage

Mekongzon has a dedicated network of logistics partners all over the world, which provides optimal international coverage via all major global logistics hubs.

Asia-Pacific Specialists 

Mekongzon specializes in cargo management through the Asia-Pacific logistics hub, with many years of experience using this trade lane.

Best-in-Class Tracking Software

We also maximize visibility across the supply chain using some of the best tracking software available. You can easily access and view all shipment documentation, reports, and billing information using our convenient web app.

Customizable Solutions

Depending on your specific needs, we can customize our solutions to proactively identify and address any potential issues anywhere in your supply chain.

All of these advantages make Mekongzon a potentially invaluable asset to your operations as a leading freight forwarder.

Cainiao Launches Airline between Singapore and Hainan to Meet Growing Chinese Demand for Luxury Goods

Alibaba’s logistics arm Cainiao started running daily freight flights between Singapore and China’s Hainan Island on Sunday to transport duty-free beauty products, as Covid-19 travel restrictions have trapped Chinese consumers’ booming demand for high-end purchases on the mainland.

Cainiao Smart Logistics Network plans to operate seven return flights per week between Singapore and Hainan, which also serves as a free trade port due to its relaxed tax policies. The company is also considering opening direct cargo routes between Hainan and other destinations including Japan, South Korea, Australia and New Zealand this year, said James Zhao, Cainiao’s general manager for global supply chains.

Cainiao’s move aims to satisfy burgeoning domestic demand for luxury goods as free-spending Chinese consumers are unable to travel to the fashion capitals of Europe for shopping during the pandemic, and they are increasingly spending their money at home and online.

According to the company, the imported goods will be able to arrive in Hainan from Singapore within three hours, ready for sale at duty-free shops within 12 hours after clearing customs and dispatched from the warehouse. The process normally took two or three days before these direct flights were launched.

To boost domestic consumption, the Chinese government last year tripled the value of duty free goods that consumers could buy annually in Hainan to 100,000 yuan ($1540) and removed a cap of 8,000 yuan ($1232) for a single item. It also expanded the number of duty-free product categories from 38 to 45. Three licenses were issued in a single year, which allowed new retail players to jump into the market and operate duty-free shops on the island, compared to just seven licenses that had been given since the 1980s. These stimulus efforts have turned the tropical vacationland into a shopping paradise. In 2020, sales at Hainan’s duty-free shops reached 32.7 billion yuan ($5 billion), an increase of 127% year-on-year.

Earlier this month, French luxury goods group LVMH reported sales of €13.96 billion ($16.91 billion) in the first quarter, up 30% from the same period in 2020, blowing past analysts’ estimates. Demand from Chinese consumers has rebounded, with LVMH’s sales in Asia, excluding Japan, jumping 86% higher in the first quarter year-on-year. Overall, LVMH’s revenue was up 32% compared with a year ago and 8% higher than in 2019, driven by demand in Asia and the US.

According to a report by consulting firm Bain & Company, the global luxury market shrunk by 23% in 2020, but the consumption of luxury goods in China rose by 48%. China’s share of the world’s luxury market has grown from 11% in 2019 to 20% in 2020.

The consultancy also predicted that China is on track to become the world’s biggest luxury market by 2025, and e-commerce channels like Alibaba’s Tmall will continue to lead online growth. China’s annual luxury online penetration increased to 23% in 2020 from 13% in 2019, according to the report.

Source: Pandaily.

How Alibaba’s Cainiao Bonded Warehouse Handle During The Biggest Shopping Season in China?

For overseas brands selling to China during 11.11 Global Shopping Festival, the bonded warehouse operated by Alibaba’s logistics arm Cainiao is a key facility to transport products to minimize delivery times. Over 30 bonded warehouses across China will process overseas products and clear customs in seconds. Take a look inside how these warehouses operate.

Sneak Peek: Alibaba’s Cainiao Bonded Warehouse. Source: Alibaba Group.

How the Apple Supply Chain Stays Top Ranked in the World

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Apple Premium Retailler in Mekong

Known around the world for its sleek, modern designs and cutting-edge products, Apple has remained at the forefront of its industry for years. While many people are familiar with the tech giant’s offerings and branding, the inner workings of its supply chain are lesser-known.

In the supply chain sector, Apple is widely regarded as an innovative leader, providing inspiration for other brands and forcing the competition to keep up or fall behind.

Below, we take a look at a few defining features of Apple’s supply chain.

Strong Supplier Relationships

By focusing on maintaining strong relationships with its supply chain partners, Apple can provide great flexibility in response to demand surges. This, paired with Apple’s large production capacity, allows them to provide products when and where customers want them.

The company maintains extremely strict standards for its numerous suppliers, which are named each year in Apple’s Supplier List. The top 200 suppliers in this list make up 98% of the business’s procurement. Demanding a high-quality service from these partners helps ensure the final products are reliable and long-lasting.

Because Apple is consistently innovating, its suppliers enjoy a certain degree of stability – even if one Apple product doesn’t succeed or suffers from setbacks, suppliers can rest assured that another request, for another product, will likely be coming down the pipeline.

To ensure these suppliers have the skills and experience they need to continue succeeding in an ever-shifting market, Apple offers educational and upskilling opportunities. More than 3.6 million supplier employees have participated since 2008.

Although the efficacy and efficiency of outsourcing have come into sharper focus in recent years, Apple provides proof that it can be a sound strategy — the company outsources much of its manufacturing to China, which has provided them with the revenue needed to launch new and updated products very quickly over the years.

Strategic Inventory Management

Tim Cook, Apple’s CEO, is well known for his focus on inventory and the supply chain as a whole.

It’s no wonder given that retaining a lean, streamlined inventory management system is especially important in the tech industry, where new items can practically eliminate consumer interest in older models.

“Inventory is fundamentally evil,” Cook once said of the tech-device sector. “You kind of want to manage it like you’re in the dairy business. If it gets past its freshness date, you have a problem.”

Apple keeps as little inventory as possible, providing them with the agility they need should a competitor release an innovative new product, thereby decreasing the value of any items in stock at that moment. Furthermore, having fewer SKUs to keep track of allows for more accurate forecasting.

Cook’s inventory-tracking mechanisms have also provided the company with a strong competitive edge, reducing the number of suppliers and warehouses and helping to hold partners accountable for their quotes.

Sustainability Focus

Apple has introduced various initiatives throughout the years to improve sustainability across the supply chain.

Three years ago, for example, Apple announced its goal of creating a closed-loop supply chain, meaning that eventually every product would be made solely from recyclable or renewable products.

Today, every one of its global facilities is powered by renewable energy, while newer products, such as the MacBook Air, are made from 100% recycled aluminum.

The company has also invested heavily in a mix of clean energy technology, such as solar and wind. Its online Clean Energy Portal allows suppliers across the globe to identify renewable sources. In 2018, Apple and its suppliers’ clean energy generation equaled approximately the amount of electricity needed to power more than 600,000 homes in the United States.

Not only do these efforts benefit the environment, but they also provide customers with peace of mind that they’re supporting ethical businesses — an increasingly important factor for today’s consumers.

Lessons to Learn From Apple’s Supply Chain

Businesses looking to draw from Apple’s supply chain successes would do well to follow the three points outlined above — strong relationships, strategic inventory management, and sustainability initiatives.

While most companies don’t operate on the vast scale that Apple does, there are certainly ways to incorporate these factors into your business model. For example, streamlined inventory may make sense for other tech businesses, and strengthening relationships with suppliers makes sense for companies of all kinds, helping to ensure end-to-end reliability and transparency.

As consumers become increasingly conscientious, companies focusing on environmental and social responsibility will benefit from a heightened reputation and boosted brand image — all while remaining well-positioned for the future and preparing for any potential changes in regulations or consumer demands.

The Impact of COVID-19 on the Apple Supply Chain

Apple relies on many suppliers in China, which means it has faced challenges in bouncing back from the global coronavirus pandemic.

Operations slowed in the wake of lockdowns across much of the world, and some areas are experiencing longer shipping timelines. Analysts have largely reduced their shipment estimates for the first half of 2020, with projections for the rest of the year still uncertain.

It remains to be seen if the disruption will affect the launch date of the iPhone 12, with some reports claiming the production is on track and others saying it may be delayed by several months.

As far back as January, Apple announced plans to donate to organizations focused on COVID-19, with Cook later pledging to double the company’s donations. Apple partnered with suppliers to source more than 20 million N95 masks for U.S. health care workers on the frontlines, along with more donated across Europe. The company has also been manufacturing face shields for medical workers.

As we progress into an uncertain future, Apple’s innovative supply chain is facing the ultimate test, with experts and fans alike watching to see how the company fares – and how its supply chain adapts to this unprecedented disruption.

Source: Thomas Insights.

Alibaba Belongs to The 10 Best Supply Chain Companies of 2021

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Amid severe and ongoing disruption, organizations capable of juggling conflicting priorities to operate agile, robust, transparent, and ethical supply chains are impressive, to say the least.

Gartner’s Supply Chain Top 25 for 2021 celebrates companies whose supply chain strategies have shown them to be purpose-driven, disruptive, and early adopters of innovative technologies.

To recognize the most sustained examples of supply chain excellence, Gartner lists Apple, Amazon, McDonald’s, P&G, and Unilever as Supply Chain Masters — an accolade earned as a result of having attained top-five composite scores in the Gartner Supply Chain Top 25 for at least seven out of the past 10 years.

These five aside, here are the top 10 supply chain companies of 2021.

1. Cisco Systems

For the second year running, telecommunications technology conglomerate Cisco Systems tops Gartner’s Supply Chain Top 25.

Thanks to its commitment to creating a dynamic, distributed supply chain, focussing on dual sourcing to build resiliency, and fostering meaningful relationships with its suppliers, Cisco has continued to thrive despite the disruptions of the past 18 months.

The company has also made a concerted effort to integrate sustainability initiatives with its supply chain business. Cisco has pledged to reduce its greenhouse gas (GHG) emissions by 30%, while 80% of its component, manufacturing, and logistics suppliers will have a GHG emissions reduction target.

2. Colgate-Palmolive

Colgate-Palmolive, which provides household and consumer products to millions of households around the world, has demonstrated agility, resilience, and commitment to supply chain sustainability.

Earlier this year, Colgate-Palmolive featured on Fast Company’s 2021 list of the World’s Most Innovative Companies. This was thanks to its development of a first-of-its-kind recyclable plastic tube, a technology it has also shared with third parties.

Colgate-Palmolive has consistently invested in new digital capabilities, including factory automation and advanced network modeling. For example, in a bid to connect manufacturing operations to its supply chain and boost supply chain reliability, the company is moving toward a predictive maintenance model. Wireless sensors and AI-powered data analytics will enable Colgate-Palmolive to monitor equipment health 24/7 and optimize its performance.

3. Johnson & Johnson

Johnson & Johnson has proven itself to be an MVP since the outbreak of COVID-19. In March 2020, the Johnson & Johnson Family of Companies and the Johnson & Johnson Foundation pledged $50 million to support frontline health workers with meals, personal protective equipment, training, and mental health support.

A partnership with not-for-profit company Prisma Health saw Johnson & Johnson won Gartner’s Power of the Profession Award for Customer or Patient Innovation of the Year. The pair developed a 3D-printable device, which allowed for a single ventilator to be fitted for use by two patients.

Part of the company’s Healthy Lives Mission includes a commitment to using 100% recyclable, reusable, or compostable plastic, recycled paper, and pulp-based packaging by 2025.

4. Schneider Electric

Schneider Electric, a global specialist in energy management and automation, operates a diverse supply chain in more than 100 countries.

Driving sustainability throughout the supply chain is a top priority for Schneider Electric, which includes embracing an approach known as “embedded sustainability,” to ensure that integrating environmental, health, and social value with core business activities does not impact price or quality.

At present, more than 73% of the company’s investments are being directed toward developing new and even more sustainable solutions.

In addition, Schneider Electric’s EcoStruxure platform is helping the company build a coalition of partners committed to driving innovation in the energy management industry.

5. Nestlé

For the second year running, Nestlé scored a perfect ESG score in the Gartner Supply Chain Top 25.

Its efforts include the development of simplified packaging and biodegradable and compostable materials and upping its use of recycled content. In addition, Nestlé launched an interactive video platform Beneath the Surface last month, which aims to raise awareness among consumers about the complex sustainability issues associated with the palm oil supply chain.

The company is also expanding its e-commerce business and developing new direct-to-consumer (DTC) capabilities across its entire supply chain, such as customized products and packaging, and fulfillment services.

6. Intel

Amid a worldwide chip shortage, Intel announced in March 2012 that it would be spending $20 billion to build two new chip plants in Arizona. This signaled the company’s continued focus on manufacturing and demonstrated its ability to deliver innovative supply chain solutions under difficult circumstances.

Intel’s RISE (responsible, inclusive, sustainable, enabling) strategy includes the goal of developing “the most sustainable and energy-efficient PC in the world, eliminating carbon, water and waste in its design and use.”

In its 2020-21 Corporate Responsibility Report, Intel reports is has increased its use of renewable energy from 71% to 81%, conserving 7.1 billion gallons of water in the process.

To drive sustainability throughout its supply chain, Intel requires its 9000+ tier 1 suppliers, to comply with the Intel Code of Conduct, the Responsible Business Alliance (RBA) Code of Conduct, and develop their own corporate responsibility strategies, policies and processes.

7. PepsiCo

One of PepsiCo’s top priorities is investing in digital tools and advanced technologies to create a more efficient, streamlined supply chain. Focuses include data integration to help the company better meet consumer demands and sophisticated data analytics to drive a more streamlined and cost-efficient chain.

Following the outbreak of COVID-19, PepsiCo showcased its agile supply chain by quickly launching two direct-to-consumer (DTC) offerings. Pantryshop.com and Snacks.com enable customers to customize a range of its products.

The company is also committed to driving sustainability through its supply chain. Last month, for example, PepsiCo revealed its plans to become net water positive, or replenish more water than it uses, by 2030. If successful, the company will be among the most water-efficient food or beverage manufacturers operating in high-risk watersheds.

8. Walmart

Walmart’s supply chain is often touted as one of the most effective in the world. In the past two years alone, Walmart has invested $11 billion in e-commerce, supply chain, and technology.

The company launched Walmart+, which rivals Amazon Prime, implemented a range of new fufilment options — such as curbside pickups — and is upgrading its warehouse management system (WMS) to drive efficiency through its supply chain.

The company has also committed to achieving zero emissions by 2040.

9. L’Oréal

L’Oréal has made it into the top 10 of the Gartner Supply Chain Top 25 for the first time thanks to its agile, customer-centric, and ethical supply chain practices.

“Digital Beauty” is a key focus of the company’s supply chain strategy. This includes a shift towards technology-augmented logistics and increased use of data to accommodate the rise of e-commerce.

L’Oréal also has a fantastic track record for CSR. Not only is it the only company to rate Triple-A in the client data protection (CDP) ratings for four years in a row, but it was also featured in Ethisphere Institute’s 2021 list of the World’s Most Ethical Companies. In addition, the L’Oréal for the Future program includes the goal of reducing the greenhouse gas emissions linked to the transport of its products by 50% between 2016 and 2030.

10. Alibaba

Alibaba features in the Gartner Supply Chain Top 25 top 10 for the second year running having significantly expanded its supply chain offerings to deliver manufacturing efficiencies.

For example, the company launched Alibaba.com Freight in 2020. This is a supply chain-as-a-service initiative allowing SMEs to compare, book, manage, and track bulk ocean and air freight in real-time.

The Chinese retailer has also collaborated with Unilever on The Waste Free World Initiative to accelerates the process of returning high-grade plastic back into a closed-loop recycling system within China.

Source: Thomas Insights.