Supply Scan

News from across the food supply chain


China Unfairly Blocking US Chicken Imports, Rules WTO

A World Trade Organization (WTO) dispute panel has ruled in favor of U.S. chicken producers who claimed China’s imposition of antidumping and countervailing duties on U.S. chicken “broiler products” was illegal under global trade rules.

China began assessing tariffs as high as 105.4 percent on the price of the chicken broiler products in 2010, prompting the U.S. to file a WTO complaint the following year and causing U.S. exports of those products to drop by 80 percent.

U.S. poultry exporters, including Tyson Foods, Sanderson Farms Inc., and Pilgrim’s Pride Corp., a unit of JBS SA of Sao Paulo, Brazil, had backed the case.

 

Going Green Only to Save Some Green

One of the most interesting items to come out of this year’s Executive Survey on Supply Chain Sustainability is the fact that while a large portion of the industry has embraced the sustainability movement, the biggest incentive is to lower costs rather than reduce their environmental impact.

The annual survey put out by New York-based advisory firm Alix Partners LLC, found that while 72 percent of the respondents said their companies have corporate policies or objectives in place, 84 percent indicated lower costs are more important than is improved global impact. Those numbers are even higher among European companies, with 88 percent saying they had sustainability efforts in place, with 89 percent saying it was more about costs than impact.

The survey, comprised of mostly high level executives based in Europe and the U.S. from 10 different industries with a majority of them in shipping, represents what Alix Partners is calling their first global effort to measure the behavioral impact of sustainability initiatives.

The lack of adequate financial return is the main roadblock toward greater progress in sustainable initiatives, according to the survey. Almost 43 percent said they were undecided as to whether their companies would invest in a sustainability plan next year.

The survey also points out the different viewpoints of executives on opposite sides of the globe. According to the European respondents, recycling raw materials, energy conservation and switching to alternative energy are the main drivers behind their efforts, while in the U.S. consolidating LTL shipments into fewer, larger shipments was the main impetus.

 

Mondelez Supply Chain Overhaul to Save $3 Billion

Mondelez, the owner of Cadbury Chocolate and Kraft Foods Mondelez International, is making major changes in its supply chain, which the company says will save $3 billion over the next three years.

For starters, upgrades to the company’s Oreo cookie manufacturing lines will reduce operating costs by $10 million per line. In addition, Mondelez is investing in 14 greenfield plants by 2020 that will also improve efficiency and reduce supply chain costs.

Chairman and CEO Irene Rosenfeld said, “In North America, we’re targeting a 500-basis-point improvement in operating income margin, and we now expect to reach that target by 2016, a year earlier than originally anticipated.” She added that, “In Europe, we’re targeting an improvement of 250 basis points in OI (operating income) margin, which we also expect to reach by 2016.”

 

Is AmazonFresh Just a Front to Expand Same-Day Delivery?

That’s the question some reporters are posing, including FastCompany’s J.J. McCorvey in a recent article, which said the Internet giant’s AmazonFresh online grocery ordering and home delivery was launched to help the company put the infrastructure in place to handle not just groceries, but books, electronics and just about anything else consumers purchase online.

It’s difficult and expensive to manage a fleet of urban delivery trucks, especially if those trucks aren’t moving maximum volumes. Tom Furphy, a former Amazon executive, claimed to have said the idea for AmazonFresh was sold as a way to build economies of scale and justify the massive investment in same-day delivery capabilities.

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