Thursday, 26 March 2015

Thailand's filthy human trafficking remains untrammelled

A four-strong delegation from the International Transport Workers Federation (ITF) investigating labour rights abuses in Thailand this week have found that little has changed in that country's fishing industry, so notorious for its trafficking in migrant workers, slavery, torture, brutality and murder, despite media exposure last year and the laudable lead by America to downgrade Thailand to Tier 3 in its annual report on human trafficking. Tier 3 is the worst level for nations that fail to meet the minimum standards to protect workers as laid out in the Victims of Trafficking and Violence Protection Act of 2000.

The ITF team found that the fishers on board vessels it investigated were subject to poor working conditions, cramped accommodation and long contracts, some of them with no hope of returning home with any pay. ITF inspector, Keith McCoriston, commented on conditions aboard one vessel he inspected. "The crew was scared to talk to us. They had no contracts, no toilet, no shower and no mattresses. Cooking facilities consisted of an open flame and basic utensils. The 24-crew slept in cramped accommodation. We spoke to one fisher who had been on board for 10 months although we expect this is a gross understatement."

Apinja Tajit from the Stella Maris seafarer centre in Sriracha remarked: "We are dealing in many cases with abandoned fishers in Thailand and of the abandoned fishers outside of Thailand. We know of one fisher who was abandoned in hospital with no pay for breaking his leg while on board a vessel. Another fisher was so traumatized by his experience of abuse that he needs trauma counselling. He struggled to explain to us that he was chained like a dog for trying to escape the vessel he was on."

The fishing industry is big business in Thailand. Overall fish exports are said to be worth US$7.5 billion a year, of which canned tuna accounts for $2.3 billion or a 20% share of the world market. The farmed prawn export market is also huge, itself the offspring of the tuna industry. In the pursuit of tuna vast amounts of 'trash fish', too small to be edible, are scooped up and ground into meal for sale to the Thai prawn farmers, where it often ends up on shop shelves around the world as part of dishes like prawn stir fry. According to the Thai government 300,000 work in the fishing industry, while in the canneries they rely on foreign migrants for 80% of their labour needs. In all there are reportedly four million migrants working in Thailand's factories, fishing fleets and brothels. Most migrants in Thailand are undocumented. The ITF states that there are 40,000 Thai fishing vessels operating with only 10,000 registered, many with fake licences, and crewed by unregistered migrant workers. This "cloak of invisibility," says the ITF, "allows the boat captains to treat workers like modern day slaves."

Supporting these captains is a network of odious brokers who for extortionate fees promise migrants, many from poorer countries like Myanmar and Cambodia, jobs in factories and construction, while all the time planning to sell them to trawler captains for as little as £250 each. Helped by energy-boosting drugs, these duped, hapless fishers work 20 hours a day. Beatings are regular and there is torture and execution-style killings. One trafficking victim claimed he saw 20 slaves killed, including one whose limbs were tied to four trawler bows and torn apart at sea.

Thailand's fish worth more than fishers

Mark Davis, ITF deputy regional secretary for the Asia Pacific region, added: "The industry is facing huge challenges throughout the region but is is the workers who are suffering because of this. Neglect and abuse are rife for migrant workers and Thai nationals, too. How have we got to a position where a fish has more value than the worker who catches it?"

In my blog headed: "Thailand's trawlers of terror shame food supply chains," I implied that western buyers of Thailand's prawn-based exports, namely the big food retailers like Walmart, Carrefour, Costco and Tesco, often extolled their roles as responsible citizens shunning all forms of slavery and exploitation in their supply chains yet the problem remains almost untrammelled, indicating that consumers can no longer rely on such ineffectual protestations. Since then it would be fair to say that leading retailers like the UK's Tesco, a wholesale buyer of Thai canned tuna, are under pressure to improve worker protection following America's downgrading of Thailand to Tier 3, but what are they really doing to hit the insouciant, mega Thai industries who are still wanting in cleaning out their Augean stables of worker abuse in their supply chains? Certainly not, it seems, as much as Norway which, for example, has led the way in applying pressure, with one leading Norwegian retailer removing CP Foods' scampi-related products from its shelves, a move actively backed by the ITF and the Norwegian Seafarers' Union. CP Foods is a giant straddling the Thai fishing industry, with annual sales reportedly in the tens of billions of dollars.

It may seem blinkered and irresponsible to urge foreign consumers to boycott Thailand's seafood exports indefinitely, given that such action could hit the workers harder than their employers but there is a good chance that when faced with looming collapse these mega corporations, and the corrupt military government supporting them, will back down quickly, for nothing concentrates business minds better and so quickly than the power of the purse.

There are signs that Thailand's downgrade to Tier 3 has damaged its reputation, increasing pressure on big food retailers to improve worker protections in their supply chains, says Max Tunon, senior programme officer in Bangkok with the ILO, which monitors worker conditions worldwide. There are claims from the Thai tuna industry association that Tier 3 status has prompted improvements in the working conditions. The canneries have cut down on child labour and papers are being provided to workers which makes arbitrary detention more difficult. But critics say that the Thais have not addressed the crushing debt loads that workers take on to pay the brokers who land them jobs. The Government remains as corrupt as ever while the corrosive hand of the Thai mafia is ubiquitous. Until all this changes Thailand should remain firmly in Tier 3. Concerned consumers, meanwhile, could help by encouraging food retailers to source sea food products outside Thailand by boycotting all Thai-labelled products.

Sunday, 15 March 2015

Britain's new "Google Tax" threatens Irish recovery

A new British "Google tax" could threaten Ireland's impressive economic recovery, with unimaginably adverse consequences for both countries, so should Britain think again and wait for the OECD's reforms, know as the "base erosion and profit sharing (BEPS) project? The risks of Britain's unilateral approach suggests that it would be safer to adopt the OECD joint approach, even if that process would take years compared with the British "diverted profits tax" that will be levied next month on foreign companies that use "contrived arrangements" to avoid having a taxable presence in the UK and route profits to a foreign tax haven. The tax will be 25%, some 5% more than Britain's corporation tax. It is designed to sidestep Britain's treaty obligations by introducing a charge that would fall outside the corporate tax system.

The UK Treasury has denied that its new "Google tax", described as "a highly aggressive piece of legislation" by the Association of Chartered Certified Accountants, conflicts with the OECD's reforms and says that its diverted profits tax is complementary to BEPS and is consistent with the principle of aligning taxing rights to economic activity. Australia has indicated that it may follow Britain's lead.

                            Mine's a double Irish

The  UK Treasury cited the "Double Irish" as an example of the tax dodging arrangements in its cross hairs. This legal tax avoidance ploy, used mainly by American technology and pharma companies, routes profits to tax havens like Bermuda, where they hold intellectual property rights. The Double Irish (DI) exploits the different definitions of corporate residency in Ireland and America. Ireland taxes companies if they are controlled and managed in Ireland, while America's definition of tax residency is based on where a corporation is registered.

Companies exploiting the DI put their intellectual property into an Irish-registered company that is controlled from a tax haven such as Bermuda. Ireland considers the company to be tax resident in Bermuda while the US considers it to be tax resident in Ireland. The result is that when "royalties" go to the company they go untaxed, and these royalties can be so substantial and manipulable that they sharply reduce or eliminate profits in a relatively higher taxing country like Ireland, even though Ireland has the EU's lowest corporation tax rate of 12.5%. Ireland, too, therefore, does not reap much corporate tax revenue from global corporations. In 2013, for example, Facebook, who employ about 425 in Ireland, saw its revenues there rise from Euro1.798 bn to Euro2.997 bn, but its corporate tax bill fell to a derisory Euro5.2 million. 

Ireland does, however, benefit substantially from the tens of thousands of jobs created by US multi-nationals, which generates employee and VAT taxes and excise duties, which has a trickle down effect that boosts the many dependent industries. It also strongly boosts tangible exports provided by the likes of Apple and Pfizer. Foreign-owned firms, mainly American, are responsible for about 90% of Irish tradeable exports, and this rises to the mid 90s in respect of services exports. Much of that, however, could be put at risk, even though the foreign technology companies have invested heavily in Ireland and therefore, according to some, unlikely to move. Facebook's customers in Ireland, however, are dwarfed by those in Britain so it might find that paying 25% rather than 20% UK corporation tax if registered in Britain would be incentive enough to up sticks from Dublin to Britain, followed by others if the law of comparative costs, including tax, are in Britain's favour. 

Well on the road to economic health, Ireland has done well, having suffered years of austerity, albeit brought on largely by themselves through their naivety over an unsustainable property boom. In 2014, for example, Irish tax payers paid Euro 3.5 bn more than in 2013, thanks to rising employment. But it is not out of the woods yet, and there is a real chance of a second Irish banking crisis related to high, non-performing mortgage loans. Now is not the time for Britain to risk harming that recovery, given the billions of pounds it stumped up to tide Ireland over its economic crisis and the importance of the Irish market for its exports. 

The Institute of Chartered Accountants in England and Wales was right to say that the rush to push the legislation through ahead of the General Election meant it was unlikely to be "afforded the scrutiny it needs." Sod's law may always be at work but the law of unintended consequences, though far less common, can be far more ruinous.

Friday, 13 March 2015

Was Afghanistan's war worth the cost?

Rarely, if ever, in the annals of military logistics have operations in Afghanistan cost so much and achieved so little. Underlying much of this tragic waste was the arrogant belief that concerns about the logistics problems of supplying a land-locked country, ideally suited to guerrilla warfare, with highly vulnerable supply lines stretching thousands of miles, could be tossed aside, given the overwhelming fire power and manpower of the invading allies.

Figures just released by Britain's Ministry of Defence (MOD) on the cost of the Afghan war for their financial year 2013-2014 show that supporting the 5,200 military personnel cost £232,225 per head, or £1.212 billion overall. That, however, was a year when operations in the 13-year war were beginning to be wound down. In the year 2012-2013 the comparable cost of supporting 9,000 military personnel at £297,025 per head was £2.673 billion. To these figures must be added the additional cost of new equipment, described as urgent operational requirements, which were £57.5 million in 2013-2014 and £333.3 million in 2012-2013.

Those figures are far from the end of the tally. Supporting the British military personnel in Afghanistan were 8,529 and 11,476 civilians for the years 2013-2014 and 2012-2013 respectively. And finally, one must not forget the high, tragic cost of supporting the permanently maimed personnel and the wives and children of the 450-plus killed in action, a figure that will inevitably grow given the expected suicides to come over years which, if previous recent military entanglements are any guide, will exceed the numbers killed in battle. At one stage the total costs of all the allied involvement was estimated to be US$2 billion a week, with the Taliban support costs calculated to be less than one tenth of the coalition forces.

Leaving aside the ignored historical lessons from previous super power invasions of Afghanistan over the last 200 years or so, any logistician worth his salt could see just how nightmarish and difficult the costs would be in supplying the allies in Afghanistan, surrounded by potentially hostile or ambivalent countries like Iran and Pakistan who lent succour willingly or otherwise to the Taliban. This meant that most of the supplies had to be airlifted from western Europe at a cost of US$14,000 a tonne compared with only $500 a tonne if Russia had allowed rail-borne supplies through its territory. The alternative to airborne supplies was the dangerous land supply line up from Karachi and through the mountainous passes. In just one attack in these passes, however, 40 oil tankers were destroyed by the Taliban.

So now that the last battle flags are being furled as the coalition forces depart, leaving only a small advisory contingent, could it be said that the allies' costs were worth it and what are the lessons for military logistics?
As far as the British financial cost goes, estimates will vary, the only certainty being a rising cost over years to come to support the wounded and their families. Sir Sherard Cowper-Coles, Britain's former ambassador to Afghanistan, who believed that there could never be a military victory, estimated the British cost running at £6 billion a year, while the MOD claimed that between 2001-2010 the cost was only £11.6 billion, but it subsequently admitted that the Afghan war was absorbing about 30% of the £35 billion UK annual defence budget. The true total British costs may never be known, especially as much depends on how the costs are calculated. But based on the MOD's last two accounting years, a total cost to date of the 13-year war of over £30 billion looks decidedly conservative.

The mooted positive effects of the Afghan war are broadly political and economic. On the political side, one of the reasons for the Afghan invasion was to prevent Afghanistan from becoming a safe haven for Al-Qaeda to prosecute its mischief abroad. In that regard, at the best this goal has been only partly successful. Al-Qaeda still has a presence in the country and the Taliban, estimated at 20,000 strong, are a long way from being defeated. Many question how the much bigger Afghan army would fare against the Taliban insurgents without the help of a departed NATO force.

On the socio-economic front, there seem to be more positives. Various polls show many Afghans in a positive mood about their future. Education for both sexes is now available and women are allowed to play a much fuller role in all branches of the economy. But even on this front nothing is certain, because the cause of their oppression remains in the wings. Meanwhile, the wealthy Afghans are taking no chances. They are quietly moving their wealth abroad.

In the wider scheme of things the economic ramifications of debt-fuelled war are like the sins of the fathers being visited on future generations. Soaring government debt means soaring interest costs, and that means two things: money diverted from pressing social needs and possible cuts in Government social security budgets. Back in the 6th century BC, the Chinese sage, Sun Tzu, summed up the economic problem of war succinctly: "Where the army is prices are high. When prices rise the wealth of the people is exhausted." Trying to put a price on such repercussions is incalculable but the outcome unarguably very pernicious.

Military logistics is not just about controlling the supply chain effectively to deliver all that is required to the war theatre at the right time. It is also about how the chosen battlefield can be used to degrade an enemy's military ambitions. In this respect, the Taliban had the country's geographical and climatic conditions working in their favour. That, perhaps, more than any other factor ensured the allies could not win a military victory. It is to be hoped that in future before nations consider going to war in distant lands they will think of all the costs against the perceived benefits and leave arrogance at the door.

Tuesday, 24 February 2015

Ireland facing second mortgage-related banking crisis?

A showdown is brewing up in Ireland between bank lenders and mortgage debt defaulters which if not properly handled could lead to far more than ugly scenes between the public and law enforcement agencies. It could threaten the fragile Irish banking system and even undermine Ireland's return to economic health, so the stakes are disturbingly high. The defaulters' movement draws its oxygen from historical precedent in the late 19th century when Ireland's Land League was formed to resist British landlords seeking to evict cottagers behind with their rents.

The land League movement won a major victory in restricting the rights of landlords in Ireland but a change to the law in 2013, at the behest of the EU, means that the Government has closed a loophole that had made foreclosures on certain mortgages almost impossible. The legal change now makes it much easier for lenders to recover their loans and is designed to cut the troubled banks' debt loads.

Home repossession is a highly charged, emotive subject and perhaps nowhere more so than in Ireland, given its long-standing culture vehemently opposed to evictions and repossessions. "Irish culture is opposed to evictions and repossessions for good historical reasons and that will not change," opined Brian Lucey, a finance professor at Trinity College Dublin. "Culture will always trump strategy," he added but the professor should remember that like God economics will not be mocked indefinitely and when abused too much can destroy empires. So what are the chances of delinquent home owners besting the bankers and ushering in a second banking crisis?

The sums involved are disturbingly high. According to Ireland's Central Bank the mortgages in arrears totalled 117,889, or 15.5% of all outstanding loans at the end of September 2014. While this was a 6.4% decline on the second quarter the number of accounts over 90 days in arrears was 84,995, while those over two years behind, valued at Eur 8 billion, continued to rise and was 7.6% of total outstanding balances on primary dwelling home properties. In addition, at the same time the buy-to-let delinquent mortgages over two years in arrears were 15,435, with an outstanding balance of Eur 4.8 billion, equivalent to 16.6% of total outstanding balances on all buy-to-let accounts. Moreover, the Central Bank's figures do not include the sale of mortgage loans to non-regulated entities, who like sharks smelling blood are now circling to profit from the misery of mortgage defaulters.

The modern Land League of resisters is, as part of its strategy, aligning with politicians to target those industries that have grown up around the mortgage crisis, including hedge funds, private equity, auctioneers and carpet baggers. One such example was when 60 Land League activists were prevented by police from reaching the home of a Dublin accountant said to be working for banks so that they could present him with a wreath commemorating the suicides of people weighed down by debt. The activists are well organized, harnessing cyberspace to interpose their bodies when beleagured home owners text them for help to prevent bailiffs entering their homes. "Our slogan is that we'll be there faster than an ambulance," said Jerry Beades, a former real estate developer who helped found the National Irish Land League last year. The activists' negative publicity is clearly adversely impacting those agencies helping in debt recovery, including disruption of real estate auctions. "From what we hear , they have a problem. They can't get sheriffs to repossess properties and they can't get get auctioneers to sell them," says Beades.

Just how effective the legal loophole was before closure in 2013 can be seen by the fact that despite the six figure number of serious mortgage arrears in the last three months of 2012 there were only 38 foreclosures. Now, however, banks have lodged 10,000 applications to foreclose on homes in the year through to September, four times as many as in the preceding year.

It is natural for aggrieved mortgage defaulters to blame others for their predicament and while there is some merit in taking this stance against lenders who acted imprudently in their exhuberance to lend the borrowers themselves cannot escape some blame for their naivety in financial matters and so should share some of the pain with the banks. That naivety would have been less if economics had been made mandatory in all schools from secondary level and should certainly be made so to prevent history repeating itself. It is an immutable law of economics that every boom precedes a bust.

There may be trouble ahead

It could be argued that already some of the banks involved in the Irish domestic real estate debacle, especially some British banks, have already taken their fair share of haircuts. The Royal Bank of Scotland, for example, while deciding to keep its Ulster Bank going has lost £15 billion since the financial crisis, while Lloyds' latest deal to sell its Irish mortgage portfolio to Goldman Sachs and the private equity group, CarVal, for £1.6 billion has reportedly led to a purchase price of less than half the face value of the underlying assets. Lloyds still has £1 billion of net exposure to Irish non performing loans but just six of Ireland's leading banks represent 90% of the total mortgage market.

Clearly, borrowers should share the pain, especially as, according to one leading Irish bank, up to 20% of the arrears are so-called "strategic defaults" because the borrowers are unwilling rather than unable to make repayments. In a land famed for its chancers such a percentage is not implausible. Both sides are talking tough. AIB, Ireland's second biggest bank by assets, said that their market was preparing to step up enforcement action. "For someone just not paying their mortgage we will take a robust line," said the bank's chief executive. "There is no rent-free option any more." Karl Deeter, of Irish Mortgage Brokers, said the banks need to reconsider repossession of homes in long-term difficulties. "Once people get into long-term arrears it tends to be a one-way journey," he said. Economists have warned that any escalation in the mortgage crisis could force Ireland's fragile banks to raise more capital and delay the country's recovery. Ellen McQuaid, economist at Merrion Stockbrokers, warned: "As things currently stand banks are probably OK but if things continue to worsen on the arrears front then the banks could be in trouble."

It is impossible to calculate how much money is at risk but given the size and longevity of loan arrears the sums could easily run to many billions of Euros if a solution attempt is bungled. It is clearly not an option to allow reckless, naive borrowers to continue their debt welching unscathed. To do so would simply add to the burden of taxpayers and those at risk of more social security cuts.

Wednesday, 4 February 2015

Does Greece deserve more debt relief?

The growing consensus in parts of the British Press and global business media is that Greece should be released from much of its US$272 billion sovereign debt in the interests of ending the country's obvious social pains and restoring its economy to health, and by extension preserve the economic equanimity of Europe but is it a wise course of action, given the risks of contagion down the line and the likelihood that Greece will not take on board the absolute necessity for good political and economic governance?

The country's record of financial governance does not inspire optimism. Over the last 200 years Greece has defaulted on its sovereign debt obligations at least five times and the first recorded debt default goes back to the 4th century BC when 13 Greek city states borrowed money from the Temple of Delos, which ended with the temple nursing an 80% loss of principal. Clearly, Greece is a recidivist debt welcher of the first magnitude. Much of this malfeasance derives from the Greek psyche that drives the population to think it is their God-given right to evade taxes at all cost, thus forcing the Government to borrow ever-more huge amounts, which is not then spent honestly and wisely.

In terms of Government spending, for example, pensions are a good case in point. Although the official Greek retirement age is 65 early retirement is widespread and the average age of labour market exit is 62.4 years for men and 60.9 years for women. An OECD 2009 report discusses the early retirement problem in Greece by asserting: "The comparatively lax conditions to qualify for a minimum pension tend to increase incentives for early retirement. Despite their low level minimum pensions they are relatively generous in relation to the contributions paid by their beneficiaries which creates perverse incentives for certain workers to retire early without any reduction in benefits." These perverse incentives for workers to access early retirement schemes even included bizarre cases. For instance, pensions were given by the Greek State to daughters of military officers and various civil servants if they were not married!

The ubiquitous tax dodging problem is even more disturbing. Greece has suffered serious weakness in tax collection because of its large shadow economy and the real loss from tax evasion can hardly be calculated. One analysis, however, based on prestigious American institutions, suggests Euro28 billion in lost tax revenue in 2009 just from the self employed.  The highest tax evaders are doctors, lawyers, accountants, engineers, private tutors, artists and journalists.

There is no denying the enormity of the unprecedented shrinkage of the Greek economy, which has shrunk 25%, perhaps the worst in modern times, but neither is there any gainsaying of Greece's colossal economic mismanagement, corruption, cronyism, damaging labour restrictions and ineffectiveness at righting these parlous proclivities, which has brought it to its current parlous state. It is true that Greece has cut bloated pensions and raised taxes but their attempts to institute the bailout conditions from foreign creditors are evidently failing, though it seems that the Greek economy has started to grow again, albeit very feebly.

The public sector suffers substantial integrity gaps in both law and practice. A 2010 report, for instance, showed that only 2% of misbehaved civil servants were subjected to disciplinary procedures. A poor system of tax collection, helped by an opaque tax code, allows individuals and companies to bribe tax inspectors and evade taxes. According to a 2011 survey the cost of bribing tax inspectors to "arrange" tax audit activities is reported to range from Euro 100 to Euro 20,000. In such a climate as this it is hardly surprising that Greece is the lowest scored country in Europe for corruption in 2013. A global corruption index of 176 countries placed Greece at 94th position, with one being the cleanest and the 176th the foulest.

In support for the case to forgive a significant slice of Greek sovereign debt, perhaps one third to a half, the point is made that there are plenty of historical precedents for relief on such a scale. Most notably, Germany is cited after World War 2, when in 1953 Germany's creditors recognized that full payment of the country's debts would make revival harder and could destabilize all Europe. Consequently the creditors wrote off half of Germany's debts and made the rest contingent on economic performance. Such debt relief was in all parties' best interests but the comparison of Greece today with Germany after World War 2 is a crass one. The fact is, Germany's industries were shattered, its cities laid waste by war, and given its pre-war position in Europe as an economic power house it was absolutely essential to help Germany back to health. Germany's post war recovery proved an economic miracle, not least because of its business drive from a people imbued with an industrious spirit and respect for clean government and economic good governance. Those key attributes are still lacking in Greece, and without them any more debt relief on top of the billions of Euros already written off by private creditors and banks, would almost certainly be throwing more good money after bad.

Ireland and Finland have already voiced their concerns that Greece should not receive any more debt write-offs and it is plain to see why. Ireland received a bail out and endured much austerity for years as a pre-condition for loans. By following those conditions Ireland is now well on the road to economic recovery. Spain, too, has taken its medicine and is showing good signs of recovery. If Greece were let off scores of billions it would set a dangerous precedent. Other countries in the Mediterranean sphere, like Spain, Italy Portugal and even France whose economic integrity has left much to be desired, could clamour for similar relief, and that could herald the irremediable collapse of the Eurozone currency, and much worse.

This is not to argue that Greece should no longer he helped. There is a good case for extending the loan repayment periods and even, perhaps, suspend interest payments for a few years. But Greece should also help itself, but how? Greece has many islands in a balmy, desirable location. It could, for example, let these islands on 99-year leases, with favourable tax incentives, which alone would bring in billions of Euros in the short term. Longer term, Greece could make better use of its inexhaustible free sunshine by harnessing solar energy to supply the energy-hungry countries to the north. The infrastructure could be paid for by the energy importing countries like Germany provided the energy charges were low enough long term to justify the investment. It would also provide a much-needed boost to employment.

All efforts to help Greece back to prosperity and growth will, however, fail unless Greece is prepared to burn the canker of lousy governance from its soul forever. Perhaps the country would do well to learn a lesson from British history concerning the need to pay their taxes in full. From the late 17th century Britain had two key assets in its empire-building clashes with much larger empires: its system of Government credit, rested on confidence, and a fair tax burden, leading to a remarkably high level of compliance -- a situation that did not exist among England's enemies and so led to their downfall.

Sunday, 1 February 2015

Changing how history is taught could change its course benignly

History, quipped Henry Ford, is more or less bunk, meaning not that it is garbage but rather that one should make history today by living in the present and ignoring tradition. "The only history that is worth a tinker's damn is the history that we make today," he said. Yet if humanity is to progress righteously by making history today it is manifestly clear that history's lessons must be learned if its mistakes are not to be repeated. As the Spanish philosopher, Santyana, remarked: "Those who cannot remember the past are condemned to repeat it." Tragically, such ignorance of the past leads to continuation of modern and ancient ills like extremism, intolerance, pogroms, oppression, discrimination and xenophobia -- proving that history's valuable lessons are routinely ignored. Yet could a difference be made if history were taught differently in schools from secondary level and made mandatory?

The perceived problem with history teaching, it seems, is that it tends to confine students to study only their own country's history and only then for a very short history period. Moreover, there is always a risk that in closed, undemocratic societies the subject will be distorted and perverted for political and religious ends. The subject could also be viewed by many students as boring and dry. If, however, much more emphasis was placed on how history was fundamentally changed over the long term, ultimately for the better, embracing many nationalities and groups that mixed to cause and enrich such changes it would surely give students a less prejudiced view of other nationalities, religions and cultures -- cutting the risks from xenophobia, religious bigotry and racism. It would also make history more interesting.

Even today, invasions and wars begin which show why, if history's lessons had been given due cognizance, they could have been avoided and arguably no better current example of that, in logistics terms particularly, is the Afghan war. This harsh, arid, unforgiving, landlocked country, perfectly designed to confound invaders, made the logistics of supply not only breathtakingly costly but a nightmare. Twice before over the last 200 years the Afghans have humbled two world powers, Britain and Russia, whose arrogance seemingly ignored appalling logistical problems, and again, today, a coalition of world powers has been humbled as they leave with little to show for the blood and gold shed and an uncertain future for the Afghans.  

The teaching of world history spanning millennia does, of course, present its own kind of logistical problems for students, like finding the time and teachers, who themselves may lack understanding of the vast scope of historicity. The problem could be eased, however, if national history was downplayed in favour of global, human and natural events that fundamentally changed the course of history far more than emperors, monarchs and other panjandrums.

Henry Ford himself could have done with such history lessons that might have tempered his well-known anti-Semitic views and their odious connexion involving use of slave labour in Nazi Germany's Ford factories, even before America entered the war. Great men also make great mistakes and the greatest of these often stem from ignorance of history and its disturbing infant of arrogance.

Friday, 30 January 2015

New combi-style articulated forklift transforms warehouse economics

The world's leading developer of articulated forklifts, the UK-based Translift Bendi,* has perfected a unique, man-up, combi-style forklift that delivers substantial cost savings when compared with conventional, dedicated, very narrow aisle (VNA) trucks. The label unique is well deserved because no other truck in the world can handle both order picking and pallet stacking functions concurrently.

This articulated, stand-on truck with working aisle width capability of only 1.6 mt has a separate, independent set of forks at the back which allows the driver to pick and stack concurrently without having to drop a pallet down to floor level to change from picking to stacking mode or vice versa. The standing position allows the driver when facing forwards to use the truck as a normal Bendi with a 1.2 tonne lift to 8 mt and the rear forks can be folded up out of the way if required. Turning round to face the back, the operator can place loads onto the pick pallet and raise or lower the forks as required to keep a comfortable and safe working height. Maximum lift for the order picking function is 6 mt.

This dual functionality on the go is the main unique selling point. The problem with conventional, man-up, combi-style trucks is that in order to change between order picking and full pallet load stacking functions the driver must return forks to ground level to change pallets. With the Bendi, however, the driver could be half way through an order picking list when he reaches an empty pallet location, which he can refill with the Bendi forks facing the forward direction of travel even though it already has a load on the order picking forks. Moreover, when leaving the racking aisles the driver can deposit two loads on the warehouse floor, thus doubling productivity.

Translift Bendi has made it clear that this unique development is not designed to replace ordinary, man-up order picking trucks, but rather to give warehouse operators the chance to gain big cash savings through space-saving gains, lower wage bills and fewer trucks over their current operations using order pickers and reach trucks in the same aisle. Where that happens the aisle must be at least 2.6 mt wide but the new Bendi man-up truck needs only 1.6 mt when carrying two pallet loads. Only at the aisle ends when changing aisles is more transfer space needed than a conventional, one-load Bendi.

The cost implications of this truck are remarkable. If, for example, a warehouse can reduce aisle widths from 2.6 mt to 1.6 mt it can gain up to 30% more pallet locations. It can also dispense with having two different types of truck -- Bendi and reach truck, and save £20,000 per reach truck driver. The Bendi asking price is £45,000 whereas similar spec VNA combi-style trucks would cost 60% more. Translift Bendi claims that in comparison their order picker is also 60% faster but in certain circumstances it could double, and not only for internal work. If, for example, when leaving a racking aisle with two pallet loads, one for picked goods and one with a full pallet load, it could deposit the order-picked load on the warehouse floor and then proceed straight out into the yard to load a lorry. Very few reach trucks have yard work capability and VNA trucks none at all. Productivity, therefore, could be doubled in such circumstances.

There is also an important safety issue. Many warehouses use both pedestrian order picking machines and reach trucks operating in the same aisle at the same time. This can never be an entirely safe scenario. The new Bendi picker, however, dispenses with that risk entirely.

Every now and then there is a major step change in forklift capabilities and cost effectiveness. This must surely be one of them.
                                             Translift Bendi's unique order picker could transform warehouse economics