Thursday, 18 September 2014

Forklift training could save billions of pounds

It is well known that adequate forklift training brings quick returns through lower accident and damage costs to racking, trucks, stored goods and less business disruption/losses but how many operators know that good training can prevent sting-in-the-tail cost shocks when long-term contract hire agreements end? In Britain the issue is particularly important because contract hire accounts for about 65-70% of all trucks supplied.

The disturbing fact remains that despite stringent safety legislation and all efforts by truck makers to improve their truck safety and ergonomics, accidents remain woefully high along with ignorance among supervisors tasked with the job of enforcing best safety practice. According to one of Britain's leading forklift training outfits, Mentor, more than half of managers they meet have never driven a forklift or received any kind of truck training and up to 90% are woefully ignorant of their legal responsibilities for safe truck operation and the consequences of an accident that results in prosecution. Little wonder, then, that there is still much room for safety improvement.

There are, of course, many causes of forklift accidents, which in Britain is the largest, single combined cause of major and over 3-day injuries regarding workplace transport. Disturbingly, many are related to a company's perception of a trade-off between safe practice and the need to meet delivery schedules, compounded by fear-fuelled, staff reluctance over whistle blowing. Even among blue chip companies there is a resignation that accidents are part of doing business. One such British company, for example, routinely forks out £3 million a year for pallet racking damage. Others often tolerate high loading bay door damage caused by truck collisions, typically running in to the high thousands of pounds every year.

A clue to the sting-in-the-tail costs at hire contract expiry is the lax attitude to good housekeeping practices. Poorly maintained and cleaned floors riddled with potholes and crumbling joints raise truck maintenance costs, and in very narrow aisle (VNA) operations even incur racking damage costs, in particular. Poor lighting also features significantly in the accident toll. Such costs are normally budgeted for but the sting-in-the-tail costs are not. When a truck is returned to its supplier at the end of a hire contract a detailed inspection will normally be carried out. Provided a truck needs no more than a lick of paint and a normal service to make it suitable for onward hire there should be no contract termination costs. The one exception could be the exceeding of hours used clause in the hire contract. This issue can be avoided if care is taken to define 'hours of usage' and extra agreed cost for such excess at the beginning of contract negotiations.

It is estimated that these contract expiry costs of this nature are equal to 5% of the total hire cost for a 5-year contract, though not all forklift suppliers levy them. In one sense it is easy to see why. A nick in a driver's seat would mean a new seat costing at least £400. A damaged overhead guard could run into thousands. There is doubtless an element of cost padding in these charges, too, partly because truck suppliers are anxious to encourage customers to renew their hire contracts and for this they will promise to forgo these remedial costs entirely if the client renews the contract. Succumbing to this thinly disguised form of blackmail by renewing on these terms could be a far costlier mistake because it may be possible to get a much better deal with a different truck supplier, especially if switching from counterbalance and reach trucks to articulated forklifts.

A back-of-the-envelope exercise, based on a UK national truck population of 350,000, with 65% under hire, shows if that 5% sting-in-tail cost could be entirely avoided the annual UK savings would run into hundreds of millions of pounds. Add in the many millions more from accidental damage, injuries and business disruption/losses then the need and urgency for a robust truck training regime is blindingly obvious. Perhaps just one example will suffice to convince the doubters and chancers. One UK retail company paid Mentor £50,000 for a training scheme. The result was savings of £130,000 every year. Blindingly obvious or not, there seems to be too many purblind safety enforcers.

Tuesday, 16 September 2014

Can Mediterranean's tragic migrant harvest be stemmed?

Scarcely a day passes in the Mediterranean's calm season without illegal migrants landing on Italy's shores, having trekked from far-flung African countries and, latterly, the Middle East, exacerbated  by the political upheavals in that much vexed region. This human tide has now reached crisis levels on several fronts, including the tragic loss of life at sea and the implications throughout Europe for harmonious development and relations.

The latest migrant tragedy occurred on September 15th when more than 160 African illegal migrants bound for Italy perished when their overloaded vessel capsized off Libya's coast, but details are emerging of a far greater tragedy a few days earlier where the death toll could be 500. According to a few survivors the indications are that it was mass murder at the hands of traffickers who wanted to move some migrants to a smaller boat while at sea. Incensed by the migrants' refusal to comply, the traffickers deliberately rammed and sunk the overcrowded vessel.

                                                 Broken heart

One of the hundreds of migrants who drowned was a young Egyptian boy who had hoped to earn enough money in Europe to pay for his father's heart operation, said one Palestinian survivor, who watched the boy finally slip beneath the waves from a life buoy, overcome by exposure and hypothermia. Now his father will have two broken hearts. If confirmed, this will mean total migrant fatalities at sea will have reached about 3,000 so far this year, up from 1,500 in 2011. The total tally since 1988 is over 20,000 adults and children, according to Fortress Europe, which tracks the Mediterranean fatalities.

In the long march of everyman mass migration has been a recurring theme and, on the whole, a necessary precursor for benign development. European countries, in particular, have benefited enormously over the centuries from immigration waves that enriched the gene pool and hastened economic development but can it be legitimately claimed today, when circumstances are dramatically different, that further substantial waves are in Europe's best long-term interests and if not what, if anything, can be done to deny the Mediterranean its growing graveyard status?

On the remedial front, Italy's foreign minister, Emma Bonino, is not sanguine for a solution. She reportedly said: "There is no miraculous solution to the migrant exodus issue. If there were we would have found it and put it into action." To give Italy its due the country has borne the brunt of the exodus from North Africa, with scant help from elsewhere for what is a Euro-wide problem, and has tried various attempts at repatriation, having saved more than 100,000 boat people since last October when it launched a humanitarian effort called Mare Nostrum to intercept and rescue the migrants trying to reach the islands of Lampedusa and Sicily, the nearest landfall to North Africa. Italy has been criticised by the human rights body, Council for Europe, for being ill-prepared for a new surge of mixed migration on its coasts, claiming that its system for receiving and processing migrants and asylum seekers was not fit for purpose. All would argue, however, that the best place to deal with the problem would be at the migrant's last point of departure, and today that largely means Libya.

                                             Target the traffickers

Between 2008 and 2010 Libya received 60 million Euro for sending over Italian police to Tripoli to link up with their local counterparts, which also included six patrol boats, vehicles and training. This meant that migrants intercepted at sea by Italian and Libyan patrol boats were immediately landed back in Libya but it turned into a public relations disaster as Libyan security forces began beating vociferous migrants and herded them into containers for transport to one of 20 detention centres scattered around the country before being sent back to their original countries. Given that since Gadaffi's overthrow Libya has sunk into lawlessness, any such cooperation would be impossible under current conditions. However, serious consideration should be given to funding covert operations to infiltrate trafficking gangs operating along the entire North African coast and perhaps elsewhere to alert authorities when illegal operations are about to begin. While it is possible that solo migrants could make it to Europe and thus avoid the ruthless gangs, the vast majority of migrants would prefer to spend thousands of pounds with the traffickers. If their operations could be destroyed, with draconian sentences for the guilty, it could go a significant way to stemming the tide. Such a scheme would have to be funded by all EU nations.

Other possible solutions are of a long-term nature. If the EU wants to reduce the migratory pressure it will have to provide more development aid, debt relief and fair trade that would see non European agricultural produce, in particular, less discriminated against. There are signs, at last, that Africa's economic development is gathering pace from a position where it was long considered an economic basket case held back by ubiquitous corruption at all levels of society, not to mention fratricidal tribal hatreds. Such growing GDP, in theory, should relieve the desire to migrate to Europe but is unlikely to have much impact unless effective population control measures are in place. If a a nation's GDP rises by, say, 5% per year while population growth is higher than that then incomes per capita will fall and so the temptation for families to encourage their children to emigrate to Europe will remain as strong as ever.

                                     A distasteful trade off?

There is a body of opinion that suggest Europe should take in far more immigrants than it does presently because indigenous European populations, particularly in France, Italy, Holland and Germany are declining to a level that will see too few working people burdened with supporting an ageing population. According to one estimate, Europe is expected to lose 28% of its population by 2050. Such purblind beliefs, however, betray faulty elements of Malthusian doctrine. Like many economists his analysis was correct but the assumptions on which it was based were flawed. Malthus could not foresee the impact on food production that improving agricultural techniques would have and the opening up of vast agricultural lands in the New World to support a growing European population. Could it not be equally said that the population 'experts' forecasts will prove equally unsound because science does not stand still. Robots and other forms of automation will dramatically raise productivity and release labour for rechannelling into social care occupations to support a growing, ageing population. The next 50 years will also likely see stupendous medical science breakthroughs that through a combination of eliminating debilitating ailments that come with ageing and the arresting of the ageing process itself will allow workers to work much longer.

Distasteful though it may seem to maintain, if not strengthen border controls against illegal immigrants, most of whom are unskilled, economic migrants, it is a question of a trade off between the lower level of misery from migrants still pushing on Europe's doors and the potential for much greater misery within Europe that most assuredly would arise if immigration controls were relaxed substantially. The signs are already blowing in the wind. Country after country within Europe is moving ominously to the right, fuelled largely by people's concerns over immigration issues that are now clearly showing signs of harming social services and raising social costs. Even legal immigrants now settled in Europe and contributing a net benefit to society express fears over the potential of immigration issues to destabilise their countries' social harmony. If that tragic scenario unfolded would it not dwarf qualms over maintaining robust border controls?

Saturday, 30 August 2014

Will Alibaba steal the retail prize?

In the race to win the world's first, truly online marketplace, Chinese e-commerce giant, Alibaba, promises a boon to consumers around the globe who for the first time will be able to buy anything from anywhere in the world in a frictionless, cross border commerce, a development which should depress and standardise prices around the globe. It will mean, for example, that consumers will no longer have to tolerate paying the widely different prices for the same item, such as Apple products. They can effortlessly source from the cheapest, national market and their payments are 100% secure through Alipay. But what will it mean for bricks and mortar shops and what, if any, are the major, long-term risks to the supply chains and meeting consumers' desires?

Alibaba may not be as well known in the West as other e-commerce outfits like Amazon and EBay but all that is about to change as it seeks a US$20 billion IPO on New York's Stock Exchange. In some ways the Chinese parvenu already outranks its western rivals like, for example, in the volume of merchandise sold through its various properties which hit $248 billion in 2013 compared with only abut one half and one third of that from Amazon and EBay respectively. At facilitating 5 billion package deliveries from transactions on its retail web sites it surpassed UPS's 4.3 billion packages and documents. The scope of product offering through Alibaba's tailored sites also leaves it competitors looking highly vulnerable. Apart from all the usual everyday household items like food, clothing and furniture, some of the more bizarre products include an animatronic dinosaur, MRI scanners, rental boyfriends and, for those overawed by political panjandrums, a life-size Vladimir Putin wax figure.

The implications from all this are that once people know just what is effortlessly available out there from anywhere in the world it will likely boost international trade, leave more money in buyers' pockets through cheaper products, which can then be spent on even more goods, but at the same time it sounds the death knell for all those manufacturers and suppliers who are relatively uncompetitive or for whatever reasons do not have the law of comparative costs working in their favour. As reported by this writer 30 years ago it will also hasten the disappearance of high street shops as online shopping takes the retail market by storm. In Britain, for example, forecasts suggest that within five years some 40% of all shops will disappear and many have already done so. In theory, traditional bricks and mortar shops could also face disintermediation by major manufacturers of food, clothing and common household items joining forces to build huge order picking centres to supply buyers' homes directly, thus cutting out all the costs incurred by retailers, but such collaboration would be difficult to achieve if past experience is any guide. Yet if they could overcome their suspicions of shared resources it would the return of pricing control to the manufacturers and end the bullying retailers place on them.

For Alibaba, the key concern will be to get its logistics right, for a lousy delivery regime resulting in many mispicks and returns will not only cost them dearly but risk permanent loss of business from irate customers. To this end, Alibaba is investing heavily in getting the logistics right. The whole issue of online shopping is also already beginning to affect how loading bays are designed and equipped to handle smaller delivery vans for home deliveries. In Britain, van sales are now booming. But what of the longer term risks over which Alibaba has no control?

These risks are both natural and human and perhaps exacerbated by the concentration of manufacturing in China which is Alibaba's most important market. China is highly susceptible to risks from earthquakes, flooding and internal political turmoil which could wreck delivery promises. There is also the global risks to communications from huge solar storms. The most obvious human risk in the Far East is martial in nature. The growing military build-up and frictions in the Far East could lead to trade boycotts, or worse, of the kind already discommoding consumers throughout Europe and Russia over the Ukraine crisis. Such risks, however, have often been part of the business scene but they are unlikely to deter Alibaba from transforming the online retail landscape for the better.

Sunday, 27 July 2014

How logistics undermines big UK retailers

Many moons ago this writer warned in the logistics press how Continental, no-frills, food retailers would give Britain's retail giants nightmares if their business models ever crossed the North Sea. The occasion was my visit to Denmark's food discounter, Netto, but what has changed since then to upset the British retail model that seemingly served the market so well for so long? In summary, three events now favour the Continental model where small is beautiful but also nimble at giving the shoppers what they now favour most of all -- permanently low prices. These are a changing economic climate, the rise of online shopping and the public's attitude to the cynical pricing ploys used by all the big food retailers. But by far the greatest of these is economic pressure brought on by the credit crunch that sees many shoppers putting value for money at the top of their shopping list, without compromising on quality.

One might well ask how is it that the British retail giants like Tesco (world's number 4), Asda, Sainsbury and Morrison with their huge buying power and long experience could not easily see off the much smaller, but nimbler Continental arrivistes like Lidl, Aldi and a re-appearing Netto. The answer can be given in one word --logistics. This is not to say that Britain's retailers are logistics slouches, far from it. Many years ago, for example, Tesco created its own stock forecasting program geared to changes in the daily weather forecasts. This gave them a crucial advantage because a pending heatwave, for example, could send demand for drinks soaring four-fold in a few days, as well as spiking demand for certain kinds of clothing and food. Before such stock forecasting programs, taverns ran out of beer in heat waves, surely a most pitiable site.

What is it, however, that sees the Continental newcomers seizing market share from the big boys that sends shudders up their spines? The obvious reason, of course, is the permanently, much lower prices, typically by up to one third, but how is this achieved? There are common features to all the foreign-owned discounters which cannot be easily and quickly replicated by the big British retailers because of the latter's legacy investments. What this means is that a big British retailer like Tesco would stock up to 40,000 SKUs (stock keeping units) as against up to 1,600 for Lidl or Aldi. Such a huge difference gives the smaller discounters a great logistics advantage. Another common feature for the discounters is their no-frills food displays, with much food simply stacked on pallets and very little individual shelf pricing. Store start up costs, therefore, are much lower, especially as they have much smaller car parks. Not lost on the shoppers is also the knowledge that all prices will be permanently low, which is a potent marketing tool. But where does logistics fit into the equation that so favours the Teutonic invaders?

To return to my Netto Danish experience over 20 years ago, this writer was impressed by their slick storage and handling. Netto then had about 125 shops throughout Denmark but only one NDC (national distribution centre) to supply all their needs. All shops were EPOS*-connected to the NDC so that at the end of each trading day all details of items sold would be electronically sent to the NDC to initiate replenishment picking. A fast sortation conveyor played a key role in despatching all replenished items to all 125 shops before opening the next day. Netto's business model then was to have no more than 600 SKUs, over 90% of which were fast movers. Any fast mover that became slow was quickly dropped and replaced by another, expected fast mover. The effect of all this was that 90% of all stock at the NDC passed through it every 24 hours, thus drastically cutting the high cost of holding inventory, which can dwarf all other warehouse costs combined. Such a high throughput rate also has implications for construction costs of big NDCs since there are no large areas given over to slow movers. Obsolete stock losses would also be smaller.

The business models the big British retailers are now stuck with have been made obsolete because of the shoppers' change in habits. The retailers tried to become all things to all men by selling far more than food and regular household consumables all under one roof so as to enhance customer convenience. That model held good for many years when incomes were steadily rising but when the recession hit six years ago a sea-change in consumer sentiment saw price become king as the convenience factor flew out the window with the remorseless rise of online shopping. Arguably, that business model of relatively high prices, wide product range and convenience is now broken.

Lumbered with the legacy costs of huge stores, the British retailers have obliquely admitted that the Continental upstarts have a better business model for a changed shopping climate. They will not, of course, take matters lying down. Sainsbury, for example, have got into bed with Denmark's Netto to open small shops with permanently low prices. Tesco are pushing ahead with openings of convenience stores but so far their prices remain uncompetitive with Lidl and Aldi. It is also possible that the big retailers will enter an unholy cabal to lower all of their food prices for long enough to drive the invaders back across the North Sea. It would mean taking a hit on their profits but it could be a price worth paying to restore the status quo of comfortably high margins that they have enjoyed for so long at shoppers' expense. Such an event would be a bleak day for consumers who have been held in the grip of just four retailers controlling around 80% of the UK food market for far too long.

*Electronic point of sale

Tuesday, 22 July 2014

Food supply chain professionals admit 'slavery' complicity

In what is, perhaps, the most damning indictment of food supply chain 'slavery' complicity, the respected British Chartered Institute of Purchasing and Supply's latest survey found that nearly three-quarters of supply chain professionals admitted they had "zero visibility" on the earlier stages of their supply chains. Eleven per cent said this meant it was "likely" slave labour was used at some point in the supply chain. Turning the screw, the Institute's chief executive, David Noble, claimed "Consumers and business leaders have entered into a 'don't ask, don't tell' pact and that they "are content to remain ignorant of the malpractice that could be operating throughout their supply chains." Company leaders were also twice as likely as purchasing managers to say their supply chains are transparent.

David Noble did not include in "consumers" the end consumer, i.e. the public who buy their food mainly from big retailers, for they are totally ignorant of each bought product's supply chain pedigree and while they may know the food manufacturer's name from the packaging they would be unaware as to whether or not the manufacturer has subsidiaries operating in countries where food production slavery is rife and the company is part of it. Yet the public has shown its concerns over such issues and even mobilised public opinion to boycott certain companies profiting from 'sweatshops', as they were euphemistically known, operating in emerging countries where regulations of all kinds are lax or routinely ignored. It is a pity that culpable corporations do not share the public's concerns on a meaningful scale.

The stench of the Atlantic slave ships before abolition may have long gone along with the shackles, and all countries have outlawed the institution but slavery's stench remains in more subtle, less public forms but where the shackles of fear are just as binding. The most common form of slavery today is called collateral debt bondage, which involves people who have borrowed money pledging themselves and their family as bonded labourers to the loan sharks or slave holders, which can carry on for generations until the debt is paid.

According to the 2012 International Labour Organisation report on slavery, the world's forced labour total is 20.9 million, with Asia having the most at 11.7 million. Another measurement of global slavery, however, the The Global Slavery Index, puts the total at 29.8 million, half of which are in India. The Index, which ranks 162 countries, puts China, Pakistan and Nigeria along with India as the four countries with the largest number of slaves. But even the most developed of western countries, like America, have tainted hands, where the slave population estimate is 60,000, among them temporary visa holders and domestic servants. In Britain, where a modern slavery bill is before parliament, the figure is put at a more modest 4,426. There may well be an element of double counting and other flaws in the various surveys' methodologies but any amended figures would still be grotesquely alarming.

While Britain is to be commended for proposing a modern slavery law, the only country in Europe to do so, Britain's Home Secretary, Teresa May, warned that its proposed slavery bill could not solve the slavery issue by legislation alone, and its remit would not extend effectively beyond the country's shores. John Manners-Bell, of the consultancy, Transport Intelligence, said that "many manufacturers and retailers believe that when they outsource the production of their goods to remote suppliers, often based in emerging markets where there are fewer regulations, they outsource the moral responsibility for the conditions in which their goods are manufactured."

Such cynical buck passing is unforgivable and food retailers, in particular, have consistently shown that their own feeble attempts to clean up their supply chains have failed miserably. Like the UK police forces, they cannot be trusted to self regulate. For proof of that one need look no further than the horse meat scandal 18 months ago where horse meat was found in many products labelled as beef. Half of the supply chain professionals say that the scandal has not led to the risks being taken more seriously.

David Noble believes that if the slavery bill passing through Britain's parliament is "to have a chance of eliminating slavery from the British supply chain and we are to avoid repetition of the horse meat scandal then we must empower supply chain procurement professionals. " Such action would be better than nothing, one supposes, but to whom would the procurement professionals be answerable? If it is to the boards of companies with dubious links to slavery then the suggestion is touchingly naive. Perhaps more effective would be partly government/business financed, independent watchdogs with the resources to research areas of suspected supply chain slavery and then effectively publishing the results nationwide so that the public would have the ammunition to invoke the ultimate weapon all company boards fear and cannot withstand --- sustained, concerted boycotts. There are many precedents where such consumer action has been efficacious in many industries. Retailer Primark reportedly paid $9 million in compensation to try to salvage its reputation, Samsung Electronics recently said it halted business with a supplier in China over suspected use of child workers and Starbucks, pilloried over its insouciant tax avoidance schemes, caved in temporarily to public condemnation.

Slavery has never gone away because greed has never gone away. It may have changed its tactics and cloaks but so long as greed remains so, too, its handmaiden of corruption will flourish, and it is in emerging countries where corruption is worst. If concerned countries unite to make life much more difficult through naming and shaming, as well as boycotts of miscreant or unconcerned corporations, then the prayers of the oppressed women, children and men may at last be heard and their tears wiped away.
Google my blog headlines:
Thailand's trawlers of terror shame food supply chains
Slavery shames British food supply chains

Sunday, 15 June 2014

Thailand's trawlers of terror shame food supply chains

Logisticians have to cope with many variables in their global supply chains but how many realise how intractable, ubiquitous corruption has the potential to wreck their best laid plans, or appreciate that their purblind directors' acceptance of corruption issues perpetuates unimaginable misery involving people trafficking, slavery and murder? The reaction of an outraged public to the results of such corruption and crime can quickly lead to global boycotts of JIT-supplied goods and so without a robust plan B already in place to source elsewhere, logisticians will have nightmares. That is why corruption in their supply chains should concern them deeply.

It is a true axiom that for evil men to triumph it only takes good men to look the other way, and there is far too much of looking the other way in the global food supply chain, in particular. Just such a scenario is being played out in the seas around Thailand where many thousands of trafficked migrants face brutality and murder on trawlers serving the vast Thai prawn farming industry while simply trying to earn a higher standard of living to support their families in relatively poorer countries like Burma and Cambodia. But it is not a new phenomenon, nor is it confined to Thai waters. Such trawler slavery also extends its brutal, corrosive grip to New Zealand's fishing grounds, where cooperation between New Zealand-based fish processors and foreign-owned trawlers crewed by exploited migrants has allowed the trade to flourish for years. Britain and Ireland's trawlers have also tainted hands in this tide of misery.* 

The household name retailers at the end of this odious supply chain have often extolled their roles as responsible citizens eschewing all forms of slavery and exploitation in their supply chains yet the problem remains and worsens, indicating that consumers can no longer rely on such ineffectual protestations. Just how bad the Thai prawn industry is for criminal behaviour can be gauged by the UK Guardian newspaper's revelation based on its own, just released, six-month undercover investigation. It is a damning indictment of supply chain apathy, and Thai Government corruption, without which this vile trade could not survive. 

Torn apart by the limbs
The investigation found that slaves were forced to work for no pay on trawlers for years at a time under extreme threats of violence. Large numbers of poor migrants told by their hired brokers that they would be found jobs in manufacturing or on building sites ended up being sold to trawler captains by the brokers for as little as £250 each. This ruse has also been used for British and Irish trawlers. Shifts could be grindingly-long, 20-hour stints, helped by frequently-offered energy-boosting drugs. Beatings are regular and there is torture and execution-style killings. Some trawler escapees reported seeing fellow slaves murdered in front of them. One trafficking victim claimed he had witnessed as many as 20 slaves killed, including one who was tied limb by limb to the bows of four boats and pulled apart at sea. "We were beaten even if we worked hard", said another. 

Farmed prawns are big business for Thailand, with exports of 500,000 tons, of which Britain and America take about 10%. Overall fish exports are worth about $7.3 billion a year. The largest Thai-based prawn farmer is CP Foods, with reported annual sales of £20 billion. They buy fish meal made from 'trash fish' (too small and inedible) which is caught in huge amounts during pursuit of tuna. Ground into meal, the trash fish is then fed to the farmed prawns, and the company also supplies the feed to other prawn farms. Their products end up on British and American shop shelves as frozen and cooked prawns and ready-made meals like prawn stir fry. Apart from the big four food retailers, Walmart, Carrefour, Costco and Tesco, the Guardian also identified the Co-op, Aldi, Morrison and Iceland as stocking CP Foods' products. 

CP Foods makes no pretence about not knowing that slave labour is part of its supply chains. "We are not here to defend what is going on," reportedly said Bob Miller, CP Foods' UK managing director. "We know there are issues with regard to raw materials that come in but to what extent we just don't have the visibility," he added. 

Thailand a slavery node point 

The brutal fact is, however, that alarm over Thailand's fishing slavery has been sounded before by NGOs and in UN reports. Thailand is considered a major source, transit and destination country for slavery and nearly 0.5 million are enslaved within the country. There is no official record of how many men are enslaved on fishing boats but the Thai Government believes that up to 300,000 work in its fishing industry, 90% of whom are migrants vulnerable to being duped, trafficked or sold to the sea. Rights groups have long pointed to Thailand's big labour shortage in its fishing sector, which along with increased demand from America and Europe for cheap prawns, has driven the need for cheap labour. "We would like to solve the problem of Thailand because there is no doubt commercial interests have created much of this problem," admits CP Foods' Miller. 

A key culprit in preventing any meaningful progress in this vile trade is the Thai Government, long known for its endemic corruption. In the global corruption rankings for 150 countries Thailand is a poor 81st and 97th in democracy rank. One high ranking Thai official who did not want to be identified said: "The Thai authorities could get rid of the brokers and arrange legal employment but the Government does not want to do that. It does not want to take action, and as long as boat owners still depend on brokers and not the Government to supply workers then the problem will never go away."

Others, however, disagree. Two international union federations, the International Transport & Workers Federation (ITF) and the International Union of Food, Agricultural and Hospitality Workers (IUF) are working in Thailand to fight the slavery there. Liz Blackshaw, programme leader for the joint ITF/IUF From Catcher to Counter initiative, says the Guardian's findings show the need to audit the entire supply chain to ensure that all products are sourced ethically and responsibly. "Consumers deserve and demand rigorous checking and transparency. There is a dramatic need for action in Thailand also," she said. 

At a Bangkok meeting last month in a multi-stakeholder forum on labour conditions in the Thai fishery sector, the ITF informed the Government and all stakeholders that it is irresponsible to refuse to ratify the ILO Work in Fishing Convention No 188. "It is shocking that Thailand's new military government was this week the only one to vote against a new ILO protocol to fight forced labour. We would expect the USA to put the country in the worst category of its human trafficking blacklist." 

Many dark secrets

The ITF and IUF claim that the fishing sector has many dark secrets, not just in Thailand, and that there are improvements that could drastically change it for the better. Some of them include:
  • All ILO member states should ratify the new protocol to the ILO "forced labour convention."
  • Full audits by retailers of fishery products supply chains to ensure ethical and responsible sourcing. (Some leading food retailers admit that their audits lack depth)
  • Transparency and comprehensive information on where fish was harvested and the whole chain of processing to enable consumers to make ethical and socially responsible decisions.
  • Aggressive programme of international criminal investigations into criminal activity and criminal failure to act.
  • Company registration of fishing vessels over 20 mt long or 100 GMT.
  • In regional fisheries management organisations and governments the leveraging of licencing allocations and catch quotas against compliance with human rights obligations and labour standards.
  • Fishing vessels to have collective agreements on board to protect crews.
  • Processing plants to have genuine union recognition and the rights to collective bargaining. 
The Thai Governments have already been warned on four consecutive occasions that it was not doing enough to tackle slavery, which belies their claims that great progress has been made in tackling the slavery issue. The latest Guardian investigation further undermines the Government's claims. Its undercover investigators unearthed a lawless and unregulated industry run by criminals and the Thai mafia, facilitated by Thai officials and sustained by the brokers who supply cheap migrant labour to boat owners. 

Human rights activists believe that Thailand's sea food export industry will probably collapse without slavery. This is highly unlikely. Paying agreed wages on time and respecting the rights of migrant crews would at most only add a few pence or cents to a prawn stir fry meal. Yet it is clear that in the light of the Thai Government's refusal to act then more screw tightening should be applied by retailers and consumers. Norway has led the way with one leading retailer, ICA, announcing that it is removing scampi related to CP Foods from its shelves, a move actively backed by ITF and the Norwegian seafarers union. Surely now the time has come for all UK retailers to follow suit by banning all Thai-sourced prawns.

A threat to incomes is the greatest incentive to concentrate business minds to counter the threat with righteous action. If businesses take no action then they should remember that the ultimate weapon lies in the hands of consumers -- concerted, indefinitely-sustained product boycotts. Hopefully it will not come to that and spread beyond fishing slavery issues to other industries, like tourism which accounts for over 7% of Thailand's economy. It would be tragic if many of Thailand's jobs disappeared, for trade is the hand maiden of prosperity and prosperity the surest guarantor of peace. Ultimately, however, trade must rest on the pillars of honesty, decency and respect for the rule of law. If any proof were needed of that then just consider what lack of good governance did for the global banking sector in 2008, the repercussions of which are still being sorely felt. 

* Google my blogs: 
New Zealand's commercial fishing 'slavery' shames the nation
Britain's trawler fishing shame intensifies
Ireland's shameful role in migrant fishermen exposed

Tuesday, 10 June 2014

Time to eschew diesel forklifts?

Thanks largely to EU directives, forklift diesel engines have drastically cut their toxic emissions since the first European legislation got underway in 1996 with Stage I, designed to regulate emissions of nitrogen oxides (NOx), particulate matter (PM), carbon monoxide and hydrocarbons from non road diesel engines. This year sees the latest EU regulation, Stage IV, come into force, which will cut non-road NOx exhaust emissions by 80% compared with Stage IIIB standards they replace. Engines will also be required to use ultra low sulphur diesel, and in the struggle to meet ever-challenging targets engine makers use two main technology options -- selective catalytic reduction (SCR) and EGR, which dilutes the amount of oxygen in the combustion chamber. Both options, however, have their drawbacks and the fact is that the new legislation is not retrospective, so dirtier diesel forklifts, even when fitted with catalytic converters and soot filters, will continue to expose workers within their premises to serious health risks for years to come.

Should we, however, be concerned by air pollution from diesel powered vehicles in general, and is there still an economic case for supporting diesel forklifts over electric, leaving aside, for the moment, the health issues? Yes, we should and the economic case for diesel no longer holds as true as it once did.

In the pursuit of less carbon dioxide (CO2) emissions to ease the perceived threat of climate warming, the European Union favoured diesel over petrol because diesel engines burn fuel more efficiently and emit less CO2. But a by-product of burning diesel is nitrogen dioxide (NO2) and for more than 10 years governments knew that diesel was producing such harmful pollutants. "It's been a catastrophe for air pollution," said Simon Burkett, founder of Clean Air in London. The WHO says that NOx is linked to asthma, now affecting around 6 million people in Britain and killing 1,200 a year, with huge medical costs, and other pulmonary diseases, especially in children. Diesel combustion also generates easily-inhaled fine particulate matter, which probably killed 3,389 people in London during 2010, according to the Government agency, Public Health England. This kill rate equates with some of the worst smogs back in the 1950s, which belatedly ushered in the Clean Air law in 1956. Researchers also think that NO2 has harmful effects independent of particulate matter.

Deadly deal

In 2012, the EU's NO2 limit -- a maximum of 40 micrograms per cubic metre of air -- was breached at 301 sites in the EU, including 7 in London, which is the most NO2-polluted of all the sites and greater even than in Beijing, where smog alerts are common. Owing to a deal between car makers and the EU in 1998 to lower the average CO2 emissions in new vehicles, car companies chose to make more diesel -powered cars, now accounting for about half of all cars against under 10% 10-15 years ago, and diesel fuel was also made cheaper than petrol for some years. So what began as a well-meant EU policy to curb carbon emissions has proved a serious health failure.

Diesel forklifts would or should not be seen operating inside food and pharma premises, including their warehouses, and the same should apply to LPG, despite being cleaner than diesel, but their favourable performance level against electric trucks, and other economic factors, mean they are still found working inside premises, particularly warehouses. But technical advances in batteries and chargers mean that electric trucks are at the same performance levels as diesel, says Matthias Fischer, President of Toyota Material Handling Europe. Hitherto used mainly for loads up to 2 tonnes, electric forklifts and/or AGVs can now be used in ports, for example, moving 60 tonne loads. Electrics were also disfavoured because of the need to recharge batteries over long periods, have costly standby batteries for multi-shift work and the need to set aside charging areas, adversely impacting the total cost of ownership. Recent technology advances, however, have diminished those disadvantages, while the latest EU Stage IV regulation will only raise the cost bar for diesel engines, thus weakening their economic case.

A good example of this is BYD's battery that uses lithium-iron phosphate technology. BYD is a Chinese company that also makes forklifts and its claims for its batteries are impressive. According to Javier Contijoch, forklift director at BYD Europe, users will enjoy 25-30%savings on operating costs. The battery chemistry requires less time and energy than lead-acid batteries for recharging and it can extend total battery life to the point where users never have to replace their truck's original battery. It also eliminates battery maintenance, avoids the emissions associated with traditional battery charging and removes the expense of buying and maintaining spare batteries, a hugely significant cost factor. Charging is also fast (one to two hours) and energy consumption during charging up to 40% less. The battery can be charged incrementally rather than all in one go, so they allow drivers to extend driving times by recharging during break times. The battery is said to be cleaner and safer than alternative lithium-ion solutions.

These and other advances in forklift motive power alternatives should concentrate the minds of all diesel truck users, whether used internally or outside. The question uppermost in their minds should be: "Can we continue to justify diesel forklift usage at the risk to our employees' health and even lives?"