Category: Logistics

The International Air Transport Association (IATA) broke out in seasonal goodwill on Dec. 11, predicting that a new year will bring fresh cheer for the cargo sector.

Cargo traffic is expected to grow 2.0% in 2020 after a year of slowing economic growth, trade wars, geopolitical tensions, uncertainty over Brexit and social unrest contributed to a 3.3% contraction in airline freight business, Director General Alexandre de Juniac said in an annual address to media at the group’s Swiss headquarters.

It was the first downturn for the sector in seven years. The 3.3% annual decline in demand was the steepest drop since 2009, during the global financial crisis.

IATA is forecasting 62.4 million cargo tons in 2020, a 2% increase over the 61.2 million tons carried in 2019, as world trade rebounds. The 2019 tally represents the lowest aggregate tonnage figure in three years. The IATA forecast values international trade shipped by air next year at $7.1 trillion.

Yields will continue to slide, with a 3% decline forecast for 2020, an improvement from a 5% decline in 2019. Cargo revenues will slip for a third year in 2020, with revenues expected to total $101.2 billion, down 1.1% from 2019, according to IATA.

The worldwide freight load factor, measured as a percentage of available freight ton kilometers (AFTKs), is forecast at 46.3%, down slightly from 46.7% estimated for the current year and 49.3% posted for 2018.

IATA estimates the global airline industry will produce a net profit of $29.3 billion in 2020, up from $25.9 billion expected in 2019 (revised downward from $28 billion forecast in June.) Achieving that would make 2020 the industry’s 11th consecutive year in the black.

Airlines in Asia Pacific were the most exposed to weakness in world trade and cargo this year. The modest recovery in world trade will support profits next year in the region, according to the forecast.

2019 was a difficult business environment for airlines, “yet the industry managed to achieve a decade in the black, as restructuring and cost-cutting continued to pay dividends. It appears that 2019 will be the bottom of the current economic cycle, and the forecast for 2020 is somewhat brighter,” de Juniac said.

IATA and the World Bank anticipate global GDP to expand by 2.7% in 2020 (marginally above the 2.5% growth in 2019). World trade growth is expected to rebound to 3.3% from 0.9% in 2019, with easing of some trade tensions expected.

IATA reported in October that airline CFOs and heads of cargo were positive about future growth in air travel but less positive about cargo due to the slowdown in world trade as a result of trade disputes. However, central banks have reacted to the slowdown by easing monetary policy, and governments have used fiscal policy to stimulate domestic demand, limiting the risk of recession.

The regional profit picture is mixed in both 2019 and 2020. Africa, the Middle East and Latin America are all expected to lose money in 2019, with carriers in Latin America returning to profit in 2020 as regional economies strengthen. Airlines in North America continue to lead on financial performance, accounting for 65% of industry profits in 2019 and around 56% of aggregate earnings in 2020. Financial performance is expected to improve or remain the same compared to 2019 in all regions except for North America, where expected capacity growth owing to new aircraft deliveries could put pressure on earnings, according to IATA.

The rise of e-commerce has led businesses to reinvent and expedite their logistics operations. The last-mile delivery segment is under considerable scrutiny in particular, primarily because it is the link companies have with their end customers, with consumer satisfaction making or breaking their businesses.

Customer expectations are a principal driver behind supply chains of today, which has led to a push toward visibility to ensure businesses run a tight ship and customers get to track their products’ provenance.  

That said, a niche within the last-mile segment that is seldom discussed is product packaging. Generally packaging can be considered good if customers barely notice it while they unwrap their products. However, complicated packaging can lead to consumer frustration, which can lessen the overall buying experience. 

Freight forwarding giant DHL recently came out with a report on the future of packaging in the logistics industry, detailing specific packaging needs based on sector and demographics and the innovation that the niche requires in balancing sustainable packaging with ensuring customer satisfaction and product safety while in transit. 

“In 2018, the global packaging industry was worth $886.1 billion. Asia-Pacific countries are the largest consumers of packaging, accounting for 44% of the world total. North America and Western Europe take second and third places, accounting for 23% and 19%, respectively,” said the report. 

Packaging as an industry has naturally evolved over the years, but the core tenets of what packaging should entail have largely remained constant. A quintessential package will need to provide a specific brand experience, be robust and easy to handle, efficient to store and stack across pallets and be recyclable once its purpose is lived out. 

DHL pointed out the effect e-commerce has had over the packaging industry. The experience created in business-to-consumer (B2C) transactions via e-commerce has overflowed into the business-to-business (B2B) transactions as well, with manufacturers keen to provide a B2C-like experience in B2B activities. This forces the packaging ecosystem to adapt to e-commerce processes in which packages cross more stakeholders’ thresholds than a shipper-to-retailer process before they reach the customers’ doorsteps. 

“An e-commerce package is handled 20 times more frequently on a journey from the distribution centre (DC) to the consumer’s home than when it is transported on a pallet to a retail store. With each of those touchpoints presenting an opportunity for the item to be dropped or damaged, e-commerce supply chains create much higher requirements for packaging robustness and product protection,” observed the report. 

Futuristic delivery methods can employ drones to drop packages over attics and on front porches, which would require packages to be a lot more durable. New delivery models also warrant packages to be delivered and left outside customer homes, which can leave the packages exposed to inclement weather and also be prone to theft. Packaging would have to play a role in thwarting these uncertain conditions and circumstances. 

DHL’s survey showed customers were increasingly agitated with wasteful and inefficient packaging. Large packaging for small items leads to packers stuffing boxes with excessive void-fill material. This is met with consumer derision — and dents to company reputation.

“Analysis of e-commerce parcels shows that around 24% of their volume is empty space. In the fast fashion industry, this number tends to be even higher due to the lack of structural rigidity of clothing and accessories,” said the report. 

DHL pointed out that increasing the package utilization rate will benefit all parties in the e-commerce supply chain — from operations to the customer to the environment. “Simultaneously optimizing fill density and package protection, while operating at high speed and large scale, remains perhaps the most significant packaging-related challenge to date,” it said. 

Financially struggling Hong Kong Airlines, the second-largest carrier in the Asian financial hub, has received a $568 million cash injection from a group of state-owned banks after being warned of a possible shutdown by the Hong Kong government. 

In deciding not to revoke or suspend the carrier’s license, the territory’s Air Transport Licensing Authority (ATLA) is requiring the carrier to maintain an adequate level of available cash. The regulator has been closely monitoring the airline’s financial situation for more than a year. In late February, the authority expressed “grave concerns” after aircraft lessor AerCap sued the carrier for $20 million over late lease payments on several aircraft.

Privately held Hong Kong Airlines, which operates to more than 30 regional and international destinations in Asia and North America using passenger and cargo aircraft, does not disclose financial details.

It is controlled by heavily indebted Chinese conglomerate HNA Group. The carrier reported, in a filing with the Shanghai Stock Exchange on Dec. 8, that it received the loan from a syndicate of eight state-owned banks after announcing plans to defer the November salary payments to almost half of Hong Kong Airlines’ employees until Dec. 6. The filing indicated that the cash injection could be used for aviation fuel, aircraft supplies and materials, takeoff and landing fees, staff salaries, and aircraft leasing payments. According to the stock exchange filing, the funds can be used for any of HNA’s affiliate airlines.

HNA has been selling down assets, including airline stakes, to reduce debt, which is estimated to have peaked at around $90 billion as a result of a global spending spree. In HNA’s latest cash-raising exercise, the company earlier this month announced plans to offload low-cost carrier West Jet as part of efforts to pay down its massive debt.

Hong Kong Airlines recently announced suspension of its last long-haul flight, effective in early 2020.

“As weak travel demand resulting from the social unrest in Hong Kong has continued to affect our business and revenue, Hong Kong Airlines has reduced its capacity and flights in the coming months as well as further consolidated its network under the challenging business environment,” the carrier said in a Dec. 2 news release.

All carriers serving Hong Kong have been battered by the six months of anti-government protests that have deterred tourists, pushing the territory into recession. As early as August, flag carrier Cathay Pacific Airways issued profit warnings amid deteriorating conditions.

The latest figures from Hong Kong International Airport covering the month of October show 34,300 flight movements for the month, a year-on-year decline of 6.1%. Cargo traffic is also down this year.

German-based chemical company BASF has reportedly planned to build a cathode factory to the tune of €500 million in the state of Brandenburg, Germany, that will cater to materials for the battery production of electric cars. The existing BASF plant in Schwarzheide, Brandenburg, accommodates 1,973 workers, and the new cathode factory is expected to employ close to 8,000 people once set up. 

That said, there has not been a formal announcement from BASF in this regard, but the news was indirectly confirmed by Dietmar Woidke, the prime minister of Brandenburg. This is a huge boost to the electric vehicle plans of Germany, where automakers have relied on conventional vehicle production for the better part of a century. 

The BASF plans for the cathode factory come in the wake of Tesla’s Elon Musk announcing a Gigafactory at Brandenburg in November. Tesla’s first production centre in Europe also would be a huge benefit for Germany, as it suffers from a dip in foreign trade brought about by a stumbling auto industry that is shedding jobs in the thousands. 

Meanwhile, the European Commission (EC) approved €3.2 billion in state aid on Dec. 9 that will be injected into the research and development of battery technology, with projects selected across Belgium, Finland, France, Germany, Italy, Poland and Sweden. The EC expects this funding to vitalize the electric vehicle segment and bring in an added €5 billion in investment from private entities. 

“Battery production in Europe is of strategic interest for our economy and society because of its potential in terms of clean mobility and energy, job creation, sustainability and competitiveness,” said Margrethe Vestager, the executive vice president of EC’s Europe Fit for the Digital Age. “The approved aid will ensure that this important project can go ahead without unduly distorting competition.”

In its statement, BASF mentioned that it intended to set up a cathode factory in Germany, which will work along with BASF’s Finnish factory to yield batteries for the production of 300,000 electric cars annually. 

Brandenburg is a preferred destination for setting up new factories as the region has a lot of available workforce and because the average wages in the state are considerably lower compared to its West German counterparts. That apart, the inception of a Gigafactory in the same state will, in all likelihood, lead BASF to strike a partnership with Tesla to supply its cars with their much-needed batteries.

Currently, Tesla partners with Panasonic for its battery needs, with the Japanese electronics giant jointly investing and operating several battery cell production lines within the Tesla factory. However, there have been several misgivings between the two companies in the recent past, mostly due to the friction in working styles between Tesla and Panasonic. With a battery production factory close to the upcoming German Gigafactory, BASF could hope to cash in at the expense of Panasonic.  

That apart, increasing battery production in Europe at-large is a priority for the EC, as it fully understands the massive gulf that exists between Asian and European battery production. Asia accounts for 80% of the world’s battery production, while Europe accounts for a meager 3%. The EC expects the €3.2 billion grant to push the continent to greater prominence over the next decade.  

Thieves are now stealing an average of $324,000 (293,000 euros) every single day by targeting products moving by road, air, ocean and rail services in Europe, the Middle East and Africa, according to the latest data from the Transported Asset Protection Association’s (TAPA) Incident Information Service (IIS).

TAPA said cargo worth more than 80 million euros ($88.5 million) was stolen across transport modes in the Europe, the Middle East and Africa (EMEA) region in the first nine months of 2019.

However, the organization said the actual figures due to theft were probably far higher, with the majority of cargo crimes not reported to its IIS database. “Losses in Europe alone are estimated to now be costing businesses billions of euros a year when all factors are taken into account,” said a TAPA statement.

Parking insecurity

The most-recorded types of incidents reported to TAPA’s IIS in the third quarter made clear how vulnerable trucks are in Europe, not least because of the serious lack of secure parking facilities.

TAPA said 85% of goods moving in supply chains were now targeted by thieves while loaded on trucks instead of being stored in facilities, with vehicles continuing to be seen as the “weakest link in the supply chain process.”

This included 259 crimes in the third quarter involving Theft from Vehicle losses, followed by 113 cases of Theft from Trailer.

“The lack of secure parking places for trucks in the EMEA region remained one of the biggest causes of product losses,” said TAPA.

Target cargoes

In total, over 26.5 million euros of goods were recorded as stolen by IIS in the third quarter.

Thieves targeted goods in 19 TAPA IIS product categories, led by 60 crimes involving losses of food and drink products. In the third quarter there were also double-digit thefts of furniture and household appliances, tobacco, trucks and/or trailers, metal, clothing and footwear, tools and building materials, cash-in-transit, car parts, computers and laptops, and cosmetics and hygiene goods.

TAPA recorded freight losses of more than 34.2 million euros in its first quarter intelligence report and and 21 million euros in the second quarter.

National offenders

France and the Netherlands recorded the highest number of crimes in the third quarter, largely to the support and crime information given to TAPA EMEA by law enforcement agencies in both countries.

France saw 146 actual or attempted cargo thefts, 24.5% of the third quarter total, while the Netherlands accounted for 136 or 22.8%.

Seven other countries recorded double-digit incident rates:

• United Kingdom – 70 incidents or 11.8% of the third quarter total

• Russia – 66 or 11.1%

• Germany – 38 or 6.4%

• Spain – 37 or 6.2%

• South Africa – 36 or 6%

• Italy – 15 or 2.5%

• Belgium – 11 or 1.9%

The largest third quarter losses

Third quarter data shows 18 major cargo thefts with a value of 100,000 euros or more. “The highest value crime in the quarter involved a seven-figure loss of diamonds, earrings, necklaces and watches after thieves forced their way into a luxury goods warehouse in South Africa and overpowered the staff,” said TAPA.

“The incident took place at an Origin Facility in Sandton, Gauteng province, on Aug. 9.”

Other major losses included:

• 778,972 euros – the theft of a trailer loaded with computers and laptops on Sept. 1 in Oss in the Netherlands’ North Brabant province.

• 350,000 euros – the loss of a trailer and cargo of alcohol products from an unclassified parking location in Haaften, Gelderland in the Netherlands, on July 27.

• 250,000 euros – thieves stole a shipment of toys and games from a trailer parked overnight in Le Roeulx in Hainaut province, Belgium, on Sept. 20.

• 220,000 euros – another theft of computers and laptops, this crime on Sept. 3 occurred after offenders cut open the curtain side of a trailer parked at a service station on the A14 in Cambridgeshire, U.K.

• 199,808 euros – a deceptive stop and hijacking of a truck carrying a cargo of beverages on the R21 highway in Irene, south of Pretoria, South Africa, on Aug. 27 by men reportedly dressed in police uniforms.

• 187,000 euros – three pallets of computers stolen from a truck in Haarlemmermeer in North Holland on Sept. 28.

Fighting back

With cargo crime already at a record level in 2019, TAPA claimed more global brands were joining. “Our membership is at its highest-ever level because cargo crime is also at its highest-ever level,” said Thorsten Neumann, President & CEO of TAPA EMEA.

“We are helping companies to understand the geographic areas where cargo thieves are most active, the locations they target, the modus operandi they are using, and the goods most at risk.”
More FreightWaves and American Shipper articles by Mike

In the context of alternative mobility, the market is witnessing a deluge of mobility-as-a-service startups that provide people a myriad of options for local transit, like e-scooters, car-sharing and e-cab hailing. The overarching idea here is to create a society that slowly inches away from the concept of owning vehicles for transit to more sustainable versions, wherein mobility is looked at as a service rather than as ownership. 

Cities are generally the hotspots for mobility-as-a-service systems, which sits well with commuters who end up battling traffic bottlenecks on their way to and from work every day. FreightWaves spoke with Melika Jahangiri, the vice president of business development at Wunder Mobility, a mobility services startup headquartered in Germany, to discuss the advantages of going vehicle-less in an urban setting. 

Jahangiri, who lives in Los Angeles, started by saying she practices what she advocates, by not owning a car and using the various alternative mobility options to get around Los Angeles. “For me, the e-scooter is a very interesting and exciting transport solution, as it has allowed me to get rid of my car and be able to get around the city quite easily. I also make use of public transit options like the Metro, as I live right beside one,” she said. 

From the users’ perspective, having different mobility options and increasing the density of their availability can go a long way to users dropping the idea of owning a vehicle and shifting to mobility services for their first-mile and last-mile transit. 

“If I’m going to the city center or do a couple of errands around the city, I usually take out a scooter,” said Jahangiri. “This has changed the way I get around the city and is also my favorite way of seeing a city when I’m traveling. Because I get these scooters through the app, I know there’s going to be a scooter waiting for me at the stop before I get there.”

Another visible trend is the growth of dealership networks. Original equipment manufacturers (OEMs) have realized the importance of leveraging the relationship they have with their dealers to expand into the mobility-as-a-service segment. This translates into rental cars that have grown in significance and business models like station-to-station car-sharing and the aggregation of dealers into a network that makes car-sharing more transparent and accessible. 

In her capacity as a head of business development in Wunder Mobility, Jahangiri has come across several customers who seek to develop micro-mobility solutions that encompass a wide array of services like e-bikes, mopeds and car-sharing. Cross-mobility services are attractive, as it allows users to pick and choose their method of transit based on their immediate needs. 

Jahangiri also pointed out the need to create a visibility tool for mobility services. Wunder Mobility has developed applications that allow cities to have cognizance over the different private entities that operate in their markets, the location of the vehicles within the city boundaries, and if they are strategically placed for maximum impact. 

Overall, mobility-as-a-service moves from being just about ease of use to making sense from a financial perspective. “When I did a cost-benefit analysis between how much I was paying per month for my vehicle versus how much I was actually utilizing it, it was not penciling out properly. I had a Mini Cooper and was paying close to $1,500 per month, including parking in my building that was $250 a month, for a vehicle that I wasn’t even utilizing as much,” said Jahangiri. 

In big cities like Los Angeles or New York, micro-mobility options are cheaper and readily available, while doing away with the hassle of paying for maintenance, insurance or taxes associated with owning a vehicle. 

Jahangiri contended that these mobility companies could also try to incentivize services by working with commercial businesses to encourage more people to adopt mobility-as-a-service. For instance, a scooter company could partner with a large developer that owns several apartment buildings and shopping centers around a city to bury scooters around their properties and let people who stay there utilize them at a discount. 

“Such collaborations would help provide people with new forms of mobility, while also benefiting real estate developers as it helps keep their tenants happy. Companies can also look into the usage patterns to see if people are using it for commuting to work or if they are using it for leisure,” said Jahangiri. Understanding the local demographics will help as companies can tweak their business models to service their customer base better, improving retention in the long run.

European air cargo operators for the first time are calling on the European Union to establish policies that help strengthen the industry against competition from foreign rivals.

The trade association Airlines for Europe (A4E) says harmonized customs and security rules, as well as support for development of alternative aviation fuels and efforts to digitize the entire supply chain, are necessary for the industry to effectively meet business and consumer needs for efficient transport.

“Given its high operational and infrastructure costs, commitment from EU leaders to the air cargo sector is increasingly important to streamline complex EU regulations and implement them at national level,” said A4E Managing Director Thomas Reynaert in a statement. “Policy-makers can also make a lasting contribution to carriers’ transformation efforts by enabling funding for digitalization and innovation projects, as well as incentivizing sustainable aviation fuel use.”

Members of Europe’s largest airline association transport more than 5 million tons of goods each year to more than 360 destinations in over 120 countries either by freighters, combi aircraft or in the bellies of passenger aircraft. 

Although European air cargo represents 2.6% of trade volumes, it accounts for nearly 30% of exports and 21% of imports by value, according to the International Air Transport Association (IATA).

Lufthansa Airlines CEO Peter Gerber in recent remarks said a new regulatory framework for air cargo is necessary to ensure the industry’s sustainable growth, according to the trade group.

The A4E policy mandate says national authorities often implement EU directives and regulations in conflicting ways, which benefits some carriers over others.

The document calls for:

• alignment of standards and practices between member states regarding air cargo or mail carriers operating into the EU from a third country airport to avoid double inspection regimes and unnecessary burdens for national authorities and transport operators. 
• developing a list of recognized security technologies and methods that could be proposed at the International Civil Aviation Organization for common use by EU approved carriers.
• adoption of a holistic approach to preloading advance cargo information, using existing EU and international transport standards to inform customs and security processes. 

A4E members also stressed that implementation of the Union Customs Code (UCC) should be harmonized across member states and line up better with international customs standards.

To speed up processing, they said, government and industry should collaborate on new digital infrastructure so that customs and security documents can be more easily reported to authorities than with manual methods. 

The EU also should fund research and development related to increased efficiency of ground operations, such as security scanning full pallets, and use electronic methods to collect necessary data about air cargo movements, A4A said. It asked the EU to support IATA’s ONE Record project, aimed at creating an end-to-end digital supply chain in which data is easily and transparently exchanged among air cargo stakeholders through digital platforms. 

The A4A supports updating the Single European Sky (SES) regulatory framework, saying a performance-based air-traffic control regime could lead to a reduction of CO2 emissions and benefit all airlines.

Volvo Group Venture Capital has invested in Autotech Ventures, a venture capital firm located in Silicon Valley.

A spokesman said the deal was expected to yield near-term results in fields of specific focus for Volvo including connected, autonomous, electrified vehicles and related mobility services.

“That is where the future leans towards,” he told FreightWaves. “We will absolutely explore those opportunities.

“We are interested in investing in a lot of future-oriented companies and [Autotech] is one of those.”

The spokesman would not disclose the size of the investment in Autotech Ventures, which currently manages over $200 million and focuses on the $3 trillion ground transportation sector.

However, a Volvo Group statement said the transaction would have “no significant impact on the Volvo Group’s earnings or financial position.”

Volvo Group Venture Capital was established to make investments in innovative companies at “the forefront of service orientation as well as product differentiation” and support collaboration between startup companies and the Volvo Group. The division’s scope is global with a focus on Europe and North America.

Earlier this month (December 5) the division invested in California-based Apex.AI, a leading software company in autonomous mobility. The investment will fund the development of a safety-certified software framework for autonomous systems.

Volvo is also at the forefront of alternative propulsion truck manufacturing. As reported in FreightWaves, in November Volvo Trucks started selling a new range of “urban” electric trucks in key European markets. The manufacturer claims the models, which have no exhaust emissions and reduced noise levels, will help meet the increasing demand for sustainable transport solutions in city environments.

A statement from Volvo said the Autotech Ventures team combined “deep knowledge and insights from the ground transport sector with vast experience from venture capital investing.”

“Through the cooperation with Autotech Ventures we look forward to interact with more world-class start-ups transforming our industry,” said Anna Westerberg, acting CEO of Volvo Group Venture Capital and Senior Vice President, Volvo Group Connected Solutions.

Dan Tram, Investment Director of Volvo Group Venture Capital who is based in Silicon Valley, added, ”The investment provides Volvo Group Venture Capital with an enhanced deal flow but also access to deep industry knowledge and relevant networks.”

More FreightWaves and American Shipper articles by Mike

Shareholders of beleaguered U.K. trucking company Eddie Stobart have gone ahead and accepted a £55 million rescue deal that would help the company come out from the brink of administration. This stop-gap measure just ahead of Christmas will help Eddie Stobart save 6,500 jobs, ending several months of uncertainty behind the company’s seesawing fortunes.

The trucking firm was in trouble over £200 million in debt that it owed several banks, with the financiers giving Eddie Stobart a year to clear its obligations while also providing it with £20 million in fresh loans to expedite the process. The company was rocked by a financial scandal in July – its 2018 operating profits were artificially boosted by roughly 4% – which led the company to postpone its first-half 2019 results by a few weeks to deal with the situation. 

Then CEO Alex Laffey was asked to step down, followed by a temporary suspension of its shares from trading on the FTSE. Expectedly, Eddie Stobart’s shares continued to slide, with its present value 40% lower than in April this year. 

The £55 million funding was secured from private equity firm DBay Advisors and will allow the company to acquire a 51% stake in the trucking firm. However, this investment does come at a hefty price to Eddie Stobart, as DBay will receive 18% in annual interest on the loan from Eddie Stobart, which worker rights union Unite termed as “bandit capitalism.”

The deal shaves off more than half of what Eddie Stobart was worth before it was suspended from trading – it is valued at only £107 million now; in August its value was £269 million. Even more intriguing is DBay’s continued association with the company. 

In 2014, Eddie Stobart sold a majority stake in Eddie Stobart Logistics (ESL) that was then acquired jointly by DBay and William Stobart, the son of the company’s eponymous founder, who took over as its head. DBay ended up making millions during the brief period it owned Eddie Stobart, and with its return to the company, it is poised to make a lot more. 

That said, the Unite union has cautioned that it will not allow DBay to make high profits at the workers’ expense. “Unite hopes that early discussions will pave the way for an improved industrial relations climate with Stobart’s. However, the new owners need to be fully aware that Unite will not allow profits to be ramped up at the expense of our members’ jobs, pay or conditions,” said Adrian Jones, national officer for road transport at Unite. 

Andrew Tinkler, the former CEO of Eddie Stobart, was also putting together a package that rivaled DBay’s proposal. He sought to raise £80 million from shareholders along with a bridge loan of £20 million. However, it was turned down by the company’s board in favor of the deal with DBay. 

“We would like to thank shareholders for supporting our transaction, which will bring immediate stability to the business. Eddie Stobart’s loyal staff are the best in the industry and we are pleased to be able to provide certainty over their jobs throughout the Christmas period and beyond,” said DBay in its statement. “We would also like to thank the lenders to the company for their flexibility, which will be invaluable in returning Eddie Stobart to a stable footing.”

The deal gives relief to thousands of shareholders who would have seen their investments vanish overnight if the company had been put into administration. The company still reels under huge losses, with initial estimates putting the number at £12 million this year. 

New demands for transparency and ethical sourcing are shaking up the food supply chain. For the first time since the packaged food revolution, consumers are now learning more about where their food comes from and how it gets to them. And for a large swath of the public it is raising some questions.

Consumers now living in a world of constant content and accessible information are pushing for a change. In a recent poll conducted by consulting firm AlixPartners of consumers in Europe, China and the U.S., around 60% of all shoppers place a heavy emphasis on the source of the ingredients of their food.

Data about food sourcing and transport that was once inaccessible to the average consumer is now much easier to find. And it is also easier for environmental and human rights advocacy groups to leverage against the biggest players in the food business.

JBS, a Brazilian company that is the world’s largest provider of red meat, lost some of its key contracts earlier this year after the discovery of its forced labor practices. These included workers living in inhumane and degrading conditions without shelter, toilets or drinking water. Unfortunately, the situation is not particularly rare. Within the past quarter-decade more than 13,000 modern-day slaves have been liberated from the proverbial plantations of Brazil’s red-meat magnates.

But food production companies now face consequences for not addressing these issues in their supply chains. Inappropriate supply chain practices are resulting in costly litigation from governments that are stepping up their vigilance against humanitarian crises. Moreover, negative publicity is impacting hard-won market share.

Palm oil is the world’s most widely produced plant-based oil. The high demand has threatened rainforests, especially in Malaysia and Indonesia, where 90% of the world’s palm oil is produced. Some experts estimate that an area as large as 300 football fields of rainforest is destroyed every hour, creating a devastating chain reaction with potentially disastrous consequences for the future of these nations’ economic sustainability.

It is precisely because of problems like this that Mondelez, General Mills, Kellogg Co., Unilever and Nestle have begun to list the companies that produce the palm oil that they buy. “When empowered individuals have the ability to search and learn more information, we were forced to up our game and to understand the complexity and intricacies of supply chain in a way we hadn’t before,” said John Church, chief supply-chain officer at General Mills.

Wilmar International, Asia’s leading agribusiness firm, learned this first-hand when allegations about worker treatment in Africa and Southeast Asia came to light. Satellite photos revealed the company had illegally deforested large swaths of Sumatran jungle. It was later discovered that Wilmar used forced child labor and exposed workers to dangerous pesticides.

Wilmar customers still include Colgate-Palmolive, Kellogg’s, Nestlé and Procter & Gamble, none of which are eager to be associated with what has been called “the biggest and dirtiest palm oil trader in the world” by environmental advocacy groups. There is intense pressure for Wilmar to reform, with strict deadlines to meet and protocols to follow. “We wanted to stop this kind of negative perception of the food industry, Nestlé, everybody, that this is a black box that nobody understands,” Benjamin Ware, global head of responsible sourcing at Nestlé, told The Wall Street Journal.