Archive for the ‘Transport’ Category

Air transport and the economy of disaster

Friday, April 8th, 2011

The effects of the March 11th earthquake and subsequent tsunami in Northern Japan are still accumulating as the country sifts through the debris of entire communities while struggling to contain deadly radioactive material from the critically damaged Fukushima nuclear power plant. The death toll has surpassed 10,000 with speculation that the figure could triple when all is accounted for.  The journey back to normality for countless families will be long and arduous, and in many cases will never truly reach a positive conclusion. There is no consolation for loss of life that a disaster such as this brings, but this forum is perhaps not the place to attempt an explanation of the emotional cost of disaster.

Japanese earth quake damage

Northern Japanese infrastructure was heavily damaged

Economically speaking the scale of the destruction is immense. Houses, cars, businesses and infrastructure are all left in ruins. While it may seem logical to think that this devastation will have a permanent impact on the economic strength of the region, economists Eduardo Cavallo and Ilan Noy have suggested that in developed countries even massive disasters like this are unlikely to affect the economic growth rate of the country in the long run. Prime examples of astounding post-trauma economic growth recoveries are the Northridge, California community after the 1994 earthquake, the port city of Kobe, Japan after its 1995 earthquake and the Sichuan Provence in China after its 2008 earthquake. All of these well developed comparatively wealthy regions returned to somewhat higher economic growth rates than were being experienced pre-disaster.

Economists Mark Skidmore and Hideki Toyo attribute the phenomenon to the fact that the regions take the opportunity to move away from older, less productive industry and upgrade technology and infrastructure. It is much easier to change dramatically when you have to start from scratch. Disasters catalyse an accelerated depreciation for slow and failing industry, giving it a chance to either cut and run, or start over new.

Skidmore and Toyo also point out that the rate of economic recovery is highly dependent on the mode of natural disaster and the type of economy the disaster is affecting. If an economy that has the ability to redistribute resources (through insurance, government aid, manageable infrastructure) is hit with a geological disaster like an earthquake, it will typically regenerate quickly out of necessity. If that same geological disaster was to hit an economy incapable of redistributing resources (perhaps because adequate resources are scarce in the first place, such as that of a third world country), the economy will typically suffer and perhaps never regenerate to pre-disaster economic growth.

Japan Airlines Freighter

Japan Airlines domestic services were briefly crippled by the disaster

Damage to infrastructure and supply businesses will always directly impact the air transport industry, irrespective of the economy it is operating in. While the region affected by the earth quake and tsunami only accounts for a small proportion of Japanese industry (roughly 12.4%), figures from IATA suggest that the impact of the momentary holt to industry on the Japanese transport industry (both passenger and freight) has propagated to significant percentages of air transport industries worldwide, as these fractions are driven by the Japanese market. Most significantly 23% of China’s transport industry has suffered, with South-East Asian countries experiencing a similar impact. The USA 15%, individual European nations and Australia 6-7% and 3% of the UK air transport industry has been affected by the downturn in supply from Japan.

Japan is also a significant refiner of jet kerosene on the world stage, commanding around 3-4% of the global industry. Until the slack is picked up by other regions, upwards pressure on the jet kerosene margins over crude oil prices can be expected.

The losses incurred from this unavoidable natural disaster are significant, especially for the air transport industry, more so for Japan. But as history has shown Japan will reconstruct and absorb the losses, it will return to normality, so too will the growth rate of its economy and the economies effected by its initial downturn.

Airlines Price Fixing Freight

Friday, August 6th, 2010

[source: http://www.arabiansupplychain.com ]
Luftansa – the start of the saga
Source: http://www.arabiansupplychain.com

The price fixing scandal in the freight world, which has been ongoing since 2006 has been getting a reasonable amount of press in the recent months.

- American Airlines is to pay $5m in its freight case [Google News]

- Delta is fined $38 Million For Air Cargo Price Fixing [Journal of Commerce]

- BA is dragging Qantas into its lawsuit additional to the lawsuit Qantas is currently facing and which the airline has already been fined $20 Million and $61 Million. [The Australia]

- SAA, BA and others in dock for fixing cargo freight rates [Business Report]

For the consumer and small business the fear is that with so little visibility on the price of sending freight, will this investigation yield any tangible benefits? or will the long chain of couriers, freight forwarders and freight companies absorb the benefits from the dismantlement of these cartels?

Wrap a Package in Bubble Wrap

Friday, July 23rd, 2010

Roll of Bubble Wrap

Good ol' Bubble Wrap

Did you know there was a right and wrong way to wrap a package using Bubble Wrap?

When wrapping a package of delicate contents up in Bubble Wrap, the correct method is to direct the bubbles inwards, towards the package.

Right and wrong way to use Bubble Wrap

The wrong (Left) and right (Right) way to use Bubble Wrap

The surface of Bubble Wrap is made up of semi-spherical pockets of air separated by uniform distance.  Importantly, these bubbles only appear on one face of the Bubble Wrap sheet. The opposite face is completely flat. This feature provides the Bubble Wrap with malleability, whilst maintaining its layer of air cushioning.

If you were to lay the Bubble Wrap on a flat surface with its bubbles facing downwards, the Bubble Wrap would not make full contact with the surface. If you were to lay the Bubble Wrap with its bubbles facing upwards, the Bubble Wrap would make complete contact.

Each side of the Bubble Wrap

Sides without (Left) and with (Right) bubbles

The idea is that when the package you have wrapped correctly in Bubble Wrap comes into contact with another object, the force is distributed evenly over the packing, thereby reducing potential damage, no matter where the point of contact is. If wrapped incorrectly and an object was to impact a point between the bubbles, then the force will remain concentrated on that point, and the risk of damage is greater.

Fun fact: 2010 marks the 50th anniversary of Bubble Wrap

Unaccompanied Baggage – Send Your Luggage Cheaply

Thursday, July 15th, 2010

Unaccompanied Baggage

Unaccompanied Baggage is becoming increasingly cost-effective

Unaccompanied baggage is luggage that is transported in an aircraft without a passenger. It is checked with an airway bill as cargo and is typically delivered to the end destination using a shipping firm. Unaccompanied baggage is becoming one of the best ways for thrifty passengers to save money while traveling.

Since the Global Financial Crisis has wreaked havoc on the industry, airlines have been looking for new ways to increase profits. One of these strategies has been to greatly increase the cost of carry-on and checked-in luggage. This can lead to an unfortunate shock when you arrive at the airport only to find you are slightly over the weight limit for your flight.

Flying is definitely one activity where it pays to plan – and organising your luggage is no exception. By planning ahead and organising your excess items to be taken via a shipping service offering unaccompanied luggage, you can save quite a deal of money on your next journey.

With the increase in demand for Unaccompanied Baggage services, naturally there are a number of different shipping firms fighting for your business. Some things to remember when thinking about sending your luggage unaccompanied with a shipping company are:

  • Don’t send anything you wouldn’t ordinarily take with you via checked-in luggage. Your item will still need to clear customs, so pay attention to things like food, plant material, flammable liquids and legally ambiguous items.
  • Research the unaccompanied luggage restrictions for the source / destination country as well as the shipping company itself. Certain companies will restrict the kinds of items they will accept as unaccompanied luggage based on the country. For example, a lot of companies are very strict about what they will and will not ship into/out-of America after the introduction of post September 11 shipping laws.
  • Choose only reputable companies to handle your items. There are a lot of larger companies from other freight-centred industries now offering this service. It’s worth paying a little extra to go with a reputable company.

So remember next time you fly – it pays to be prepared.

Rain, Hail or Volcano?

Friday, April 16th, 2010


Eruption

The culprit - Eyjafjallajökull volcano (SMH/AP)

On Saturday the 20th of March, 2010, smoke began billowing from the volcanic crater beneath the Eyjafjallajökull glacier icecap in southern Iceland for the first time in 187 years, causing localised evacuation and air authorities to place proximity restrictions on aircraft as a safety precaution. On Wednesday the 14th of April, less than one month later, the Eyjafjallajökull volcano erupted again, only this time the eruption was thought to be up to 20 times the strength of the last.

The eruption sent ash and debris thousands of feet into the air, with the wind patterns in the surrounding atmosphere dispersing it approximately 1,800km over Northern European airspace – right in the path of airliner traffic. As such, British and European navigation advisory services have restricted all air traffic over a large portion of Northern Europe:

The cloud of volcanic ash is now spread across the UK and continuing to travel south. In line with international civil aviation policy, no flights other than agreed emergencies are currently permitted in UK controlled airspace. Following a review of the latest Met Office information, NATS advises that these restrictions will remain in place in UK controlled airspace until 0600 tomorrow, Friday 16 April, at the earliest. We will review further Met Office information and at 2000 today (local) we will advise the arrangements that will be in place through to 1200 tomorrow.

Icelandic volcanic ash over Europe

The path of the volcanic ash and debris

What’s more, is that historically the Eyjafjallajökull volcano’s activity is merely a precursor (the latest activity measuring around 2-3 in the Volcanic Explosivity Index (VEI)) to the activity of its bigger volcanic brothers Katla and Laki. This potentially spells disaster on a grand scale, as throughout history Katla and Laki have been far more powerful (capable of a VEI rating of 5-6 or more) and utterly lethal volcanoes.

Modern aircraft can tolerate all sorts of adverse weather thanks to advanced navigation systems and GPS tracking, however when mother nature amplifies her wrath to a brilliant crescendo by spewing out plumes of smoke, ash and debris 50,000ft into the atmosphere, the ensuing fallout can be catastrophic not only for those unlucky enough to live nearby (you have to wonder about people who choose to reside under a live volcano), but for the air transport industry as a whole.

The immediate threat to aircraft is that the ash and particularly small fragments of glass debris can be ingested by the engines. The operating temperature of the combustion chamber of the jet engine is high enough to melt the glass particles and clog the engines up with molten glass. The only real way to decongest the engines is to drop altitude significantly while reducing engine power to allow cold air flow to quickly cool and shatter the glass. This is obviously a tremendous safety concern and an adequate reason to ban aircraft from taking off in the first place.

As evidenced by the total shutdown of Northern European airspace, this type of natural disaster has the capacity to heavily disrupt the movements of thousands of travellers and temporarily cease all air transport operations, including air freight operations.

Just how much of an effect such a show stopping natural event can have on the air transport economy can be illustrated quite well by looking at the average air movement statistics of England (a good example in light of recent events).

On average 376,000 people per day are flown to and from London airports both internationally and domestically, while over 650,000 people per day are flown to and from airports all over England.

Think of the price you pay for an airline ticket to anywhere and multiply it by those figures to estimate the potential passenger revenue loss of a single day of down time for the airline industry.

On average, over 4,800 tonnes of air cargo (excluding passenger baggage and mail) per day is flown to and from London airports, while over 6,300 tonnes of air cargo per day is down to and from airports all over England. It is handy to note that due to the nature of aircraft design and operation, air freight deals in mainly low volume, high value freight so the value of a tonne of average air freight is comparatively higher than any other mode of transport. That said it is not a stretch to envision the type of revenue loss generated by a single day of down time in the air freight industry.

Taking these figures into consideration, it can be estimated that the recent 6 day grounding of aircraft due to the Eyjafjallajökull eruption will have stopped over 3,900,000 people and over 37,800 tonnes of air cargo reaching their destinations on scheduled time. The event sent hundreds of thousands of stranded passengers (and their families) and customers into a frantic spin over the arrival and where abouts of their loved ones and packages. This was the effect of shutting down England alone, not to mention the other parts of Europe that were disrupted.

This time we seem to be getting off lightly. When Eyjafjallajökull erupted in 1821, the eruption lasted over a year, and if Katla or Laki blows the ramifications may be more severe than just a bit of volcanic dust in the upper troposphere.

Are we prepared for such massive natural disasters? Can the world of transport really continue to operate rain, hail or volcano?

Google Maps Distance Calculator

Monday, April 12th, 2010

This simple tool enables you to calculate the distance between any two addresses. It will calculate both the straight line, and the approximate driving distance between the two provided addresses.

This tool is particularly useful for those in the freight and courier industries; when generating quotes from your transport providers, check the driving and straight-line distance to gauge how expensive it might be for a company to move items between the locations.

If you have problems with your addresses being found, try putting your address in the following format:

<street number> <street address>, <suburb>, <country>

For example:

12 George St, Sydney, Australia

To use the tool, simply enter the From and To addresses, and click the Get Directions button.


From
To
 

 
 




Problems or suggestions? Just contact us at the following address:


iPhone, catalyst for consumer freight expansion?

Monday, March 29th, 2010

iPhone by Apple

The iPhone is not going to take over as the main communication device for companies anytime soon.

Firstly, current devices are too closely intertwined in the business environment and as seen with other technology like computers and software, businesses are conservative and are not willing to easily change to other technologies.

Additionally the iPhone has security and encryption issues which put any business using it as their mobile device at risk, as reviewed in the following articles: iPhone 3GS Encryption Is ‘Useless for Businesses’, iPhone encryption is a must for the security-conscious enterprise.

This is not to say the iPhone is not useful to businesses in other areas and therefore should not be overlooked. The Apple App store provides a powerful user base for companies to tap into for very little cost. Apple is at the forefront of the mobile consumer market, prompting other companies to play catch up.

One example of a company taking advantage of Apple’s mobile consumer base is Emirates which just released an iPhone application called iLingual for Emirates. iLingual is an audio phrase-book for travelers, allowing them to play phrases in different languages (French, German, Arabic).

Another is Metlink in Melbourne, which launched a very successful app which puts public transport information at your fingertips.

Moving forward, it would be nice to see further integration between companies and consumers via mobile devices. The iPhone has the most potential to deliver this, due to Apple’s powerful App store and the iPhone’s user-friendly interface and wireless features. The App store offers companies the ability to create specific apps to target consumers, regardless of the consumer’s location.

In the freight world, mobile devices are essential information tools for companies and consumers alike, whether is for showing where a parcel is, where the nearest post office is, or which shipping fees are the best deals. This already exists readily on the internet, but due to complicated and slow website interfaces, it has yet to reach consumers. Development of more user-friendly websites as well as mobile applications would enhance the freight industry’s relationship with its existing customers, expand its customer base globally and maintain its competitiveness.

How’s your Commute?

Thursday, March 25th, 2010

Facing the onslaught of the daily commute is fast becoming the greatest challenge of my working day.

Like what seems to be an infinite legion of people, I endure Sydney’s M5 every morning and afternoon with frustration. Luckily my work-living arrangement has me headed in the opposite direction to the worst of the dead-lock; however I still consider my weekly drive time of seven to ten hours significant.

The daily battle to make it to work.

Should I really be complaining though?

If I consider the cost of the daily drive to work on not only my wallet, but my productivity and health, then yes, I should definitely be complaining.

According to Australian commuting data, the  average commute time of a city is proportional (more or less) to the population of the city. As the national population grows so does the national average commute time. Inevitably the average modern commute is now longer than it has ever been. Being the most populous city in Australia, Sydney lucks out with the highest average weekly commute time of 4 hours and 48 minutes. This is over an hour more than the national average of 3 hours and 37 minutes per week!

If these numbers don’t resonate, it might be more relevant for you (and your wallet) to convert your commute time to its equivalent wage value. That is, the amount of money you would receive if you were remunerated for your commute at your hourly rate. Sydneysiders would receive an additional $123.36 per week on average, or an additional $5921 per year if they were paid for their commuting hours. The national average is much lower, at $83.64 per week, or $4015 per year.

It seems that the time and cost of the increasing average commute are just two of many metrics that can be used to describe a worsening situation in Australia. While the commute time and expense is increasing, it is the impact on health and the environment that is a cause for far more serious concern.

In 2001 78% of the national work force travelled to work by car. This is a staggering figure, and the reason given by most commuters for this was that the alternatives (being public transport, cycling and walking) are just not time effective.

But hang on, is spending almost 5 hours each week doing nothing but driving (slowly) in traffic really an effective use of one’s time?

The answer is a definitive no.  There are a few key reasons for this.

Firstly, it has been found that the psychological stress of having to navigate a congested motorway can have a significantly detrimental effect on a person’s mental health and emotional wellbeing. Interpersonal relationships can suffer due to the adversely affected mood of a person who has had to endure highly frustrating and unpredictable traffic. The long commuting times also detract from one’s ability to spend time with family and friends. This directly contributes to unreasonable ‘road rage’ and irritability that a reasonable person does not normally experience. Think about how often you find yourself yelling and cursing at other drivers for their clumsiness on the road, even if it is in the private confines of your own car. Is this behaviour consistent with your normal interaction with people?

Secondly, the increased pressure exerted on a person’s spine and cardiovascular system is experienced after extended periods of sitting. These effects are amplified through the constant vibration of the car engine. Another health hazard associated with heavy traffic congestion which is not altogether apparent in the short term is the increased risk of cancer due to exposure to carcinogenic car pollution.

Finally (however the list could go on) the impact of your daily commute on the environment should now more than ever be a significant consideration. It is widely accepted that cars are one of the major producers of air pollution in the world today. It stands to reason that in a country in which such a high percentage of commuters drive cars, the environmental impact of the daily commute should be a consistently ‘hot’ topic in public discourse. The commuters who choose to drive cars should be reminded to hold themselves accountable to some degree and feel it necessary to reduce their individual impact on the environment. As it stands, a sustainable quality of life and environment cannot be maintained if the rate of pollution emitted from cars is not reduced.

Knowing that prolonged exposure to detrimental health factors could potentially shorten your life, it is really worth considering whether or not you will actually save time in the scheme of things by driving to work. On the other hand, if everyone else continues driving to work, the environment might degrade enough for it not to make a difference in the average quality of life.

Having said this, it would be pertinent to consider at least one of the alternatives for making the long commute to work by car and the reasons why it may assist in alleviating the associated psychological, physiological and environmental strain.

Public transport is the most blaringly obvious alternative to driving to work. At present, only ~7% of Australian workers get to work via public transport. Having been driving to work via my current route for 6 months now, it is apparent to me that the average commute time would not be significantly greater if I was to take the train. A benefit would be that for almost 2 hours each day I could read or catch up on work – something made all the more possible with the emergence of smart phones and wireless multimedia devices. These things are just not possible while driving. Surely I can’t be the only person, who if they were to weigh up the pros and cons of their available commuting modes, would find that public transport would actually be more beneficial than driving. This is not to mention the extra exercise one might get by walking to and from the train station/bus stop.

Of course it isn’t possible for all of working Australia to simply change their mode of commuting to public transport, as the current transport infrastructure would catastrophically buckle under the increased volume and the average commuter experience would be detrimentally affected. The resolution would involve a gradual expansion and development of the public transport infrastructure to cope with commuters. This could only be achieved by the focus of the state and federal governing bodies. Why this isn’t a more seriously actioned issue is beyond me, but it could be politically viable (and fundable) if the tax-paying public was aware of just how much of their money and lives, and the environment could be saved if they were to use an effective and efficient public transport system more often than not.

While it seems like a simple problem to diagnose, the process of first building adequate public transport infrastructure and then convincing the commuting public of its benefits surmounts to a logistical and political nightmare. Or just an all too distant dream.

For now, I might just start catching the train.