FX International Payments
By Karen Lynch
Here's one way to catch up. What follows are seven questions that let supply chain managers test their smarts on facts and trends from last year (2017) that may well affect their jobs.
A. Longer than a city block
B. Longer than the Empire State Building is tall
C. Not even half as big as future ships
D. All of the above.
ANSWER: D. The Empire State Building reaches 1,250 feet into the sky (380 meters, not counting the antenna). The OOCL Hong Kong, christened in October 2017, is nearly 1,312 feet in length1 (400 meters, or longer than a standard 900-foot city block in Manhattan). At the christening, C.C. Tung, Chairman of Orient Overseas (International) Ltd., explained that, "While our industry seems to have the knack to ‘outdo' one another in building larger containerships relatively quickly these days, this project is nonetheless an important moment for us. Faced with increasing competition and un-ending pressure on costs, we need to take the bold step in operating larger-size ships of quality and high efficiency in order to stay relevant and compete effectively as a major container shipping company."2 Did he say "outdo"? A McKinsey & Company report suggests that 50 years from now, container ships will carry 50,000 Twenty-Foot Equivalent Units (TEUs).3 The OOCL Hong Kong today carries just over 21,000 TEUs.
A. 65 percent
B. 75 percent
C. 90 percent
ANSWER: C. It's said to be 90 percent, and port congestion is growing worldwide, as increasing container traffic and ongoing consolidation in the shipping industry compound other problems such as inefficient transfer to inland transportation, customs delays, and episodic weather- and labor-related slowdowns.
ANSWER: False. Global supply chain expansion has plateaued in recent years, analysts say, for reasons ranging from global politics to international businesses' desire to reduce complexity and accelerate time to market. Company executives are adjusting to the changing environment by analyzing their supply chains to optimize the mix of local adaptation, global or regional aggregation, and cross-border arbitrage of factors such as labor costs.
D. Not going to happen
ANSWER: A. That's according to the IDC market research firm,4 which also projected that robots will be in use in 50 percent of fulfillment centers by 2019, driving down the cost of operations.
B. Adverse weather
C. Skills shortage
ANSWER: B. While all of the above are in the index's Top 10, adverse weather is highlighted here as a rising concern, now ranked fifth (up from eighth). Today, more companies around the world see weather disrupting everything from product-demand planning to effective supply chain management. They are deploying sophisticated new technologies as well as time-tested best practices to minimize business losses.
A. 65 percent
C. 35 percent
ANSWER: C. Cloud-based software as a service (SaaS) will drive the global supply chain management software market to over $19 billion by 2021, according to the Gartner market research firm. (That's up from a projected $13 billion in 2017). Since SaaS is an operational (not capital) expenditure, it is becoming more attractive to small and midsize enterprises, Gartner says. Still, the cloud will account for only about a third of the total spend by 2021.5
A. 10 percent
B. 25 percent
C. 60 percent
D. It's maxed out
ANSWER: A. According to McKinsey, there is considerable potential for broader adoption of supply chain finance, with an estimated $2 trillion in readily financeable payables worldwide. But confusion on the subject is hindering more rapid adoption.
Karen Lynch is a journalist who has covered global business, technology and policy in New York, Paris and Washington, DC, for more than 30 years. Karen also is a principal at Content Marketing Partners.
1. “OOCL Japan named, sister vessel OOCL Hong Kong achieved a Guinness World Records Title,” OOCL; http://www.oocl.com/eng/pressandmedia/pressreleases/2017/Pages/01sep17.aspx
2. “New Largest Containership in the World ‘OCCL Hong Kong’ Christened,” Marine Insight; https://www.marineinsight.com/shipping-news/new-largest-containership-world-oocl-hong-kong-christened/
3. “How Container Shipping Could Reinvent Itself for the Digital Age,” McKinsey & Company; https://www.mckinsey.com/industries/travel-transport-and-logistics/our-insights/how-container-shipping-could-reinvent-itself-for-the-digital-age
4. “IDC FutureScape: Worldwide Supply Chain 2018 Predictions,” IDC; https://www.idc.com/research/viewtoc.jsp?containerId=US43146317
5. “Gartner Says Supply Chain Management Market Will Exceed $13 Billion in 2017, up 11 Percent from 2016,” Gartner; https://www.gartner.com/newsroom/id/3747517