Global Relogistics Blog

Due to the recent crisis in Japan, many of the world’s supply-chain systems will be disrupted and many major companies will have to change the source and transport of essential products.  The New York Times tells us how some specific companies have already been affected:

Supply Chain Disruptions

Tony Prophet, a senior vice president for operations at Hewlett-Packard, was awakened at 3:30 a.m. in California by the newsthat an earthquake and tsunami had struck Japan. Soon after, Mr. Prophet had set up a virtual “situation room,” so managers in Japan, Taiwan and America could instantly share information.

Mr. Prophet oversees all hardware purchasing for H.P.’s $65-billion-a-year global supply chain, which feeds its huge manufacturing engine. The company’s factories churn out two personal computers a second, two printers a second and one data-center computer every 15 seconds.

While other H.P. staff members checked on the company’s workers in Japan — none of whom were injured in the disaster — Mr. Prophet and his team scrambled to define the impact on the company’s suppliers in Japan and, if necessary, to draft backup plans. “It’s too early to tell, and we’re not going to pretend to predict the outcome,” Mr. Prophet said in an interview on Thursday. “It’s like being in an emergency room, doing triage.”

The emergency-room image speaks volumes. Modern global supply chains, experts say, mirror complex biological systems like the human body in many ways. They can be remarkably resilient and self-healing, yet at times quite vulnerable to some specific, seemingly small weakness — as if a tiny tear in a crucial artery were to cause someone to suffer heart failure.

Day in and day out, the global flow of goods routinely adapts to all kinds of glitches and setbacks. A supply breakdown in one factory in one country, for example, is quickly replaced by added shipments from suppliers elsewhere in the network. Sometimes, the problems span whole regions and require emergency action for days or weeks. When a volcano erupted in Iceland last spring, spewing ash across northern Europe and grounding air travel, supply-chain wizards were put to a test, juggling production and shipments worldwide to keep supplies flowing.

But the disaster in Japan, experts say, presents a first-of-its-kind challenge, even if much remains uncertain.  Cargo shipping companies will have to adjust their routes and schedules to adapt to new suppliers throughout the world.

Japan is the world’s third-largest economy, and a vital supplier of parts and equipment for major industries like computers, electronics and automobiles. The worst of the damage was northeast of Tokyo, near the quake’s epicenter, though Japan’s manufacturing heartland is farther south. But greater problems will emerge if rolling electrical blackouts and transportation disruptions across the country continue for long.

Throughout Japan, many plants are closed at least for days, with restart dates uncertain. Already, there are some ripple effects worldwide: for example, a General Motors truck plant in Louisiana announced on Thursday that it was shutting down temporarily for lack of Japanese-made parts. More made-in-Japan supply-chain travails are expected.

“This is going to be a huge test of global supply chains, but I don’t think it will be a mortal blow,” says Kevin O’Marah, an analyst at Gartner-AMR Research. “I think that over all we’ll see how resilient and quick-learning these networks have become.”

THE good news for the world’s manufacturing economy is that the sectors where Japan plays a vital role are fairly mature, global industries. Consider computing and electronics. For major components, like semiconductors, production is now spread across several countries. By contrast, in the early 1990s, virtually all 486-microprocessors — the engines of the most powerful personal computers of the time — were made at a single Intel factory near Jerusalem.

Japan’s importance in the semiconductor industry as a whole has receded in recent years, as more production has shifted to South Korea, Taiwan and even China. Japan accounts for less than 21 percent of total semiconductor production, down from 28 percent in 2001, according to IHS iSuppli, a research firm.

Still, Japan produces a far higher share of certain important chips like the lightweight flash memory used in smartphones and tablet computers. Japan makes about 35 percent of those memory chips, IHS iSuppli estimates, and Toshiba is the major Japanese producer. But South Korean companies, led by Samsung, are also large producers of flash memory.

Apple, like all major companies these days, treats its supply-chain operations as a trade secret. But industry analysts estimate that Apple buys perhaps a third of its flash memory from Toshiba, with the rest coming mainly from South Korea. The lead time between chip orders and delivery is two months or more. A leading customer like Apple will be first in line for supplies, and it has inventories for several weeks, analysts say. So there will be little immediate impact on Apple or its customers, but even Apple will likely be hit with supply shortages of crucial components in the second quarter, predicts Gene Munster, an analyst at Piper Jaffray.

[Source: New York Times]

Rubble has been scattered across wide areas of the town of Minami Sanriku, northeastern Japan.

As usual, after a disaster, the logistics of rescuing survivors as well as getting basic necessities and clean water to those trapped in the aftermath, is one of the biggest problem facing Japan today.  Cargo transportation companies are struggling with a very broken infrastructure as The Guardian tells us:

The Japanese government has dispatched 100,000 troops, 190 planes and 45 boats to search for survivors amid fears that the death toll from the earthquake and tsunami could reach tens of thousands.

They have been joined by about 500 search and rescue experts and more than 30 rescue dogs from 10 countries, but the effort is being hindered by battered transport infrastructure, water shortages, aftershocks and the threat of a nuclear crisis.

One charity worker said even Asahi – which escaped the worst of the damage – contained sights reminiscent of the devastation wrought on Aceh in Indonesia by the 2004 tsunami. “I saw similar scenes of devastation there: houses destroyed, upturned vehicles, broken buildings,” said Ian Woolverton of Save the Children.

The United Nations Office for the Co-ordination of Humanitarian Affairs (OCHA) said rescue operations were being hampered by continual aftershocks, tsunami alerts and fires, while the Japanese Red Cross – which has deployed more than 600 people in 86 teams – said medical relief would be a “longtime battle”.

An OCHA report said at least 1,600 people were dead, 10,000 were missing, 380,000 had been evacuated from areas affected by the tsunami and quake, and 210,000 had been moved outside a 12-mile radius of the Fukushima nuclear plants.

“The main humanitarian needs are food, drinking water, blankets, fuel and medical items which the government and private sector in Japan are urgently mobilising and sending,” said the OCHA.

Freezing temperatures

According to the Japanese government, 1.4 million people have no access to water, 2.6 million households are without electricity and nearly 3.2 million people are running out of gas as the winter temperature hovers around freezing.

Those rescuers who managed to reach the battered north-eastern coast pulled bodies from mud-covered jumbles of wrecked houses, shattered tree trunks, twisted cars and tangled power lines.

The Red Cross and Save the Children both reported problems getting into the most battered areas. “In Miyagi prefecture, which is the worst affected, the logistics have been quite difficult,” said Steve McDonald, who was co-ordinating Save the Children’s team from Tokyo.



“We’ve got a couple of people who got up there today by taking a circuitous route around and back in from the north of Miyagi prefecture into Sendai. We do know the roads have cleared somewhat so we’ll be sending more members of our team up there tomorrow to get our forward operations base up and running properly. We are able to get in by road but railways are still difficult, certainly into Sendai.”

McDonald said there were “an awful lot of people who still haven’t been reached” in areas cut off by seawater or isolated after bridges were swept away.

Although 145 of the 170 designated emergency response hospitals were said to be fully functioning, the situation in some medical centers was dire.

At Sengen general hospital in the small town of Tagajo in Miyagi, staff had to drag bedridden patients up the stairs one at a time as water surged around the first floor. Those who were well enough left the hospital for the community center. “There is still no water or power and we’ve got some very sick people,” said a hospital official. A third of patients at a hospital in the town of Minamisanrikucho – where 10,000 people are missing – were rescued by staff.

Blankets and rice

In the town of Iwaki, there was no electricity, shops were shut and residents left as food and fuel supplies dwindled. Police took in about 90 people and gave them blankets and rice, but there was no sign of government or military aid trucks.

In many schools and gymnasiums that have been converted into some of the 2,050 evacuation centers across Japan, things were far from ideal. Conditions in the centers in Chiba prefecture were “quite bad and deteriorating,” according to McDonald. “The biggest problem is that there’s no reticulated water, so the toilets don’t flush and they can’t have showers.

“The kids in the evacuation centers are clearly distressed, they’re scared and we’re getting regular aftershocks.”

While the government doubled the number of soldiers deployed in the aid effort and sent food, 120,000 blankets, 120,000 bottles of water and 110,000 litres of petrol, the prime minister, Naoto Kan, warned that electricity would take days to restore. In the meantime, he said, electricity would be rationed with blackouts in several cities, including Tokyo.

Two US aircraft carrier groups were off Japan’s coast and ready to provide assistance, with helicopters flying from one of the carriers, the USS Ronald Reagan, to deliver food and water in Miyagi.

China’s defense ministry – which normally wastes little time in reminding people of the country’s military exploits against the Japanese – has also offered its assistance through a rare telephone call from the defense minister, Liang Guanglie, to his Japanese counterpart.

Rescuers, including a 63-strong British team, have had to contend with a potential nuclear hazard after power station reactors were damaged. “We have barred any of our staff from working in or near the [nuclear] exclusion zones but we’re trying to get an understanding of where people who have been evacuated from those zones have gone so that we can assess what their needs are,” said McDonald.

The International Federation of Red Cross and Red Crescent Societies said that search and rescue operations would continue “to be the top priority for overall disaster response” adding: “We remain hopeful.”

McDonald said: “It’s a situation that’s bad at the minute and will probably get a little bit worse before its gets better, simply because of the scale of it. But I think we’ll start to see gradual improvements over the next few days.

“We’ll also, unfortunately, see more sad stories emerging and the official death toll is still quite low for the nature of the disaster. I think, realistically, we’re talking a death toll in the tens of thousands.”

[Source: guardian.co.uk]

The production facilities of Wintershall, a German oil company, in Libya

Rumors of gas prices expecting to rise this weekend aren’t a fable, they are true. The turmoil in Egypt is negatively affecting issues in all ranges, from political to economical, as well as, socially. Boat transportation through the Suez Canal was being affected causing cargo shipping companies to panic. Well, now it’s crude oil at stake. Crude oil prices reached $100 a barrel in the United States on Wednesday, the highest price in more than two years. This is the first time the Middle East oil flows were interrupted since the turmoil began.

Analysts estimate that as many as a million barrels of Libyan oil a day have been removed from world markets in recent days, and investors fear that more oil production could be disrupted if the unrest spreads to other crucial producing nations, like Algeria.

More broadly, economists are concerned that if oil prices stay high this year, they could slow the already fragile global economic recovery. As a general rule of thumb, every $10 increase in the price of a barrel of oil reduces the growth of the gross domestic product by half a percentage point within two years.

Libya produces less than 2 percent of the world’s oil, and exports little to the United States. But the high quality of its reserves magnifies its importance in world markets.

Should the turmoil in Libya last for more than a few weeks, oil experts predict that European refiners will be forced to buy sweet crude from Algeria and Nigeria, two principal sources of sweet crude for the United States. That would probably push up American gasoline prices, which have already risen 6 cents a gallon over the last week to an average of $3.19 for regular grade.

“It will force all sweet crude refiners into a bidding war,” said Lawrence J. Goldstein, a director at the Energy Policy Research Foundation, an organization partly financed by the oil industry. “Quality matters more than quantity.”

Europe is most immediately affected by the Libyan crisis. More than 85 percent of Libya’s exports go to Europe, with more than a third of that going to Italy. Most of the rest goes to Asia. About 5 percent is sent to the United States.

Most Middle East oil production is controlled by national oil companies that operate as virtual state agencies and coordinate their security needs with the national militaries.

But that is not the case in either Libya or Algeria, where American and European oil companies have invested heavily over the last decade to bolster production that had been lagging. Foreign companies have shown in Libya, and to a lesser extent in Egypt, that they will shut down exploration and production and close their offices rather than jeopardize the safety of their employees.

Source: [Nytimes.com]

That weather-related catastrophes cause a lot of destruction is well known. But the prospect that increasing floods, droughts and storms will prompt many millions of people to migrate to safer areas is still poorly understood and anticipated, according to a forthcoming report from the Asian Development Bank.

“In the past year alone, extreme weather in Malaysia, Pakistan, the People’s Republic of China, the Philippines and Sri Lanka has caused temporary or longer-term dislocation of millions,” the organization, which is based in Manila, said on Monday, citing the study, which is to be released in early March. “This process is set to accelerate in coming decades as climate change leads to more extreme weather.”

No international cooperation mechanism has been set up to manage these migration flows, the bank warned, and protection and assistance plans remain “inadequate, poorly coordinated and scattered.” It urged national governments and the international community to urgently address this issue. This is why the Asian Development Bank is urging that everyone be ready, including transportation companies, which will be needed in the event of big businesses relocating.

Forecasts of global migration related to environmental factors range from 150 million to 300 million people by the middle of this century, the Asian Development Bank said Monday, and the Asia-Pacific region is expected to be at the epicenter of this trend.

In a report in October, the bank warned that Asia’s coastal megacities would “flood more often, on a larger scale and affect millions more people,” if climate change brings rising sea levels, more intense tropical cyclones and storm surges.

Of the 10 most populous cities with heavy exposure to coastal flooding in 2005 that were cited in that report, five were in Asia: Mumbai; Kolkata, also known as Calcutta; Shanghai; Ho Chi Minh City, Vietnam; and Guangzhou, China. By 2070, nine of the top 10 cities in terms of population are expected to be in developing countries in Asia.

The resultant migration flows need to be addressed with “greater urgency” and receive “more attention from the region’s decision-makers,” the bank said on Monday.

“We still have an opportunity to get ahead of the curve on this issue in Asia and the Pacific,” said Bob Dobias, head of the Asian Development Bank’s climate change team.

Source: [Nytimes.com]

The Energy Department has offered a Texas company a loan guarantee for a $1 billion project to build four small factories that would turn wood chips into an oil substitute. This program, if successful, could possibly transform energy as we know it. Cargo shipping companies and other transportation companies would also feel the effects of this change.

The loan guarantee, if finalized, would be about four times larger than any previous guarantee for biofuels. Its aim is to spur industrial-scale production of substitutes for gasoline and diesel from renewable sources beyond food crops like corn and sugar, a goal that many companies are chasing but none has yet achieved.

Federal law provides a quota for such fuels, which are meant to reduce both oil imports and carbon dioxide emissions, but for the last two years the Environmental Protection Agency has had to cut the quotas for lack of commercial production.

KiOR, based in Pasadena, Tex., said Wednesday that it has received a “term sheet,” or contract laying out terms for a loan, for two plants that it wants to build in Mississippi, and one each in Texas and Georgia. A company spokesman said KiOR would enter negotiations with the Energy Department on the details.

The company is already working on a small commercial plant in Columbus, Miss., using $50 million borrowed from the state. It has had a small pilot plant operating in Pasadena, Tex., since 2009 and a larger demonstration plant since 2010.

Each of the four plants would produce a synthetic crude oil the company calls “Re-crude,” and one of them would convert that to materials that could be blended directly into gasoline and diesel fuel.

KiOR’s process heats wood chips in a chamber with a controlled amount of oxygen and catalysts to produce a liquid and gases that can be turned into fuel. Several companies have pilot-scale plants that turn wood chips into liquid fuels of various kinds, but none has yet reached the point of industrial-scale production at an acceptable price.

The exact size of the loan guarantee is still under negotiation, but it may be as high as $1 billion. If that is the case, it would be “definitely the largest I’ve ever heard in the bioenergy space, by fourfold,’’ said Nathaniel Greene, a bioenergy expert at the Natural Resources Defense Council.

In January, the federal government announced it would make loan guarantees totaling $571 million to three companies that would produce fuel from waste.

Coskata, a start-up with backing from General Motors, was offered $250 million by the Agriculture Department to help with a plant that would make ethanol.

The Agriculture Department offered Enerkem, of Calgary, Alberta, a guarantee on an $80 million loan for a plant that would make ethanol from garbage. Enerkem also received an Energy Department grant of $50 million.

The Energy Department also awarded a loan guarantee of $241 million to Diamond Green Diesel, of Norco, La., which will make fuel from animal fats and used cooking oil.

Source: [Nytimes.com]

Cargo Shipping Companies

Energy efficiency and cautious gasoline consumption has become the goal for shipping companies. The push for shipping companies to reduce emissions and improve the energy efficiency of their fleets is coming in part from stricter environmental regulations, at both the national and international levels.

With the changing methods of fueling ships, cargo shipping companies are expected to be effected by this, especially the environment.

With this in mind, some of the industry’s leading companies formed the Sustainable Shipping Initiative in September. Working with nongovernmental organizations, the Forum for the Future and the WWF, the group — whose participants include Cargill, which operates a 300-vessel charter fleet; Daewoo Shipbuilding & Marine Engineering; Rio Tinto Marine, the shipping arm of the international mining giant; the marine insurer RSA; and the Greek tanker operator Tsakos Energy Navigation — says it hopes to address “what it really means for shipping to be sustainable and create a vision of industry in 2040 which is socially and environmentally responsible, resilient and profitable.”

Among the measures the group is considering, to help cut costs and reduce shipping’s environmental effects, is a shift to liquefied natural gas as the primary energy to power engines, Jaakko Eskola, a vice president of the Wartsila Group, said in an e-mail.

“The cost, as well as the improved efficiency it provides, makes it an attractive option for ship owners and operators, and the environmental benefits are obvious,” he said.

So far, the use of L.N.G. as fuel has been driven by environmental concerns and tightening regulations. In 2015, the International Maritime Organization’s ceilings on permitted sulfur oxide emissions from ships sailing within Emission Control Areas will be reduced drastically. In 2016, the organization’s new regulation, known as Tier III rules, will set a low cap on permitted nitrogen oxide emission levels for new ships.

Lars Eikeland, executive vice president for marine business development and strategy at Rolls-Royce, who is based in Singapore, called L.N.G. “a marine fuel of the future.”

South Asia has not adopted the Tier III restrictions, but it could still be an ideal region to push forward the use of cleaner energy. The region has numerous short freight routes where volume is increasing and thousands of small islands linked only by ferries. “We expect that L.N.G. will emerge over the years, initially in coastal and short-sea shipping vessels, as continued pressure on shipping emissions is exerted,” said Christer Farstad, head of shipping at the DNV Clean Technology Center in Singapore.

It will require significant infrastructure investments, but Mr. Farstad said there were already a few L.N.G. production plants in the region and more were being constructed or are planned.

“Singapore is the world’s No.1 bunkering port, and we are continuously looking at ways to enhance the quality of Singapore’s bunkering operations,” said Lawrence Wong, chief executive of the Energy Market Authority in Singapore.

While the new L.N.G. terminal is primarily designed to store L.N.G. for domestic gas demand, as well as to reload L.N.G. onto L.N.G. vessels for physical trading, it would be technically and physically possible to configure the terminal to provide L.N.G. as bunkering fuel for ships, “provided there is market demand for such service,” Mr. Wong said.

Source: [Nytimes.com]

Intel has never been one of those technology companies where employees had beanbag chairs, designer desks and pinball machines. It was always more of a swivel chair, small cubicle and gloomy office kind of place to work. Intel has quietly been trying to inject a little more fun into its offices and make them places where employees can be more collaborative.

At its campus here outside of Portland, where it designs computer chips, gray walls have been repainted yellow, purple and white, cubicle walls are lower so employees can be seen, and lounges have been outfitted with flat-screen TVs, armchairs and sleek kitchens that would not look out of place in a design magazine.

The changes are being made for more than cosmetic reasons. To promote innovation, Intel wanted to create plenty of space where people could work in groups, rather than be isolated at their desks.

Neil Tunmore, the director of corporate services at Intel, who oversees the company’s 30 million square feet of office space, said, “We realized that we were inefficient and not as collaborative as we would have liked.”

“The office status symbol seems not to be as important. People are living for more flexibility in their lives,” said Peter Miscovich, a managing director for corporate solutions at Jones Lang LaSalle.

It sometimes came to a point where two employees that were constantly traveling would have to share a desk and cubicle.

Of course, sometimes the downsizing in office space is not voluntary. Companies that went through rounds of layoffs are renegotiating leases, moving into smaller offices by using office relocation companies and mothballing large real estate projects to save money. In the last three years, companies have given up 137.8 million square feet nationwide, according to the real estate research firm Reis.

Saving money, though, is not the only reason to downsize. Opening up an office makes people interact more and, the thinking goes, be more productive. It also makes it possible to eliminate some seldom-used desks or turn them into shared work spaces.

“A lot of thinking about the office has changed. The work setting was a reflection of your status,” said Jim Keane, the president of Steelcase. “A job focuses more on collaboration than on the individual now.”

Source: [Nytimes.com]

Snow Plowing in New York City

The recent record-hitting weather has hit society hard and placed a lot of northern residents into frenzy. The National Weather Service issued a winter storm warning and forecasters predicted 8 to 12 inches of snow beginning Tuesday night and falling through Wednesday morning. The architects of snow removal, accused of mishandling the Dec. 26 storm, sat through a daylong hearing before the City Council on Monday, in an event broadcast live.

The city of New York is earnestly working to develop a secure disaster plan with large vehicle transportation companies ready and able to transport necessary moving equipment.

“People want to make sure the city has in place a system to deal with emergency situations,” said Sharyn O’Halloran, a professor of political economy at Columbia University. “It’s the anticipation.”

Anticipation may be greater than normal for this storm, with its possible double-digit depth. Anecdotal evidence of presnow jitters was visible Monday. Outside the Pathmark Superstore in Downtown Brooklyn, it was easy to find amid carts loaded with bottles of water, milk, soup, chicken and toilet paper.

Lee Plummer, 62, of East New York, Brooklyn, pushing such a cart, said he ignored the city’s promises after the storm last month. “Just because Bloomberg says he’s going to do a better job; he might, but I don’t trust him,” he said.

“I listen to the news, the forecast, everything,” he said. “I want to make sure nothing happens because I was very inconvenienced last time.”

William Dionisio, president of Atomic Fuel Oil in Astoria, Queens, which delivers oil to homes, said requests for visits were up this week. “We get a couple nervous Nellies who call ahead of time for deliveries,” he said.

FreshDirect posted a notice on its Web site announcing it had canceled its grocery deliveries on Wednesday.

This was not always the case. It is worth noting that the second edition of the Encyclopedia of New York City does not have an entry for snow. The entry for John Butler Snook, the architect, is followed by one on the Snug Harbor Cultural Center. (However, the Blizzard of 1888, which dropped 21 inches of snow, brought 60 m.p.h winds and led to an order that all overhead wires be buried, did earn its own entry.)

The heightened awareness that follows a failure of infrastructure after extreme weather is not unusual and not confined to winter. For example, since the blackouts of 2003 and, in Queens, 2006, officials and residents have sought reassurance from Con Edison that it was up to the task of keeping the energy flowing with the forecast of every heat wave.

“It’s service provision,” Ms. O’Halloran said. “You can’t just wait. You can’t let garbage build up. You have to deal with it. Can your city function and provide the services necessary for you to get home, for children to get home, for cars not to be damaged and so forth?”

The answer this week, and perhaps for weeks and storms to come, is: we shall see. Only one thing will decrease snow jitters in New York to levels closer to plain old snow fatigue.

“You’ve got to get it right,” Ms. O’Halloran said. “Then people move on.”

Willie Jenkins, 62, another Pathmark shopper, has already moved on.

“It’s going to melt eventually,” he said, adding that the contents of his cart were merely the result of his latest monthly shopping excursion.

“I’m not worried,” he said. “I’m a native New Yorker. There are storms every winter.”

Source: [Nytimes.com]

Rare Earth Exports

China’s commerce ministry announced on Tuesday in Beijing a steep reduction in export quotas for rare earth metals in the first months of next year. This is said to directly affect cargo shipping companies.

The reduction in quotas for the early months of 2011 is the latest in a series of measures by Beijing that has gradually curtailed much of the world’s supply of rare earths.

China mines more than 95 percent of the global supply of the metals, which are essential for smartphones, electric cars, many computer components and a range of military hardware. In addition, the country mines 99 percent of the least common rare earths, the so-called heavy rare earths that are used in trace amounts but are crucial to many clean energy applications and electronics.

 “We will be considering the production of rare earths in China, domestic demand and sustainable development needs to determine” the full quotas for the entire year, the ministry Web site quoted its foreign trade department director as saying, without naming the director.

Earlier this month, China’s finance ministry raised export taxes to 25 percent from 15 percent for some of the most crucial rare earths. The ministry also extended taxes to exports of some rare earth alloys that previously were not taxed.

Starting next year, industry executives said, exports of some additional alloys will face restrictions as well, which will have the effect of tightening quotas by about 6 percent.

China’s latest restrictions drew a quick response from the Office of the United States Trade Representative in Washington.

“We are very concerned about China’s export restraints on rare earth minerals,” a spokeswoman for the office, Nefeterius Akeli McPherson, said. “We have raised our concerns with China and we are continuing to work closely on the issue with stakeholders.”

Business leaders and officials in Europe have also raised the alarm, especially in Germany, where a large manufacturing sector relies heavily on imports of Chinese rare earths.

Until a few months ago, Chinese officials said that their rare earth policies were aimed at forcing foreign industries to move high-tech factories to China so as to have access to Chinese rare earths. But as trade frictions have increased, they have given greater emphasis to environmental concerns.

A Chinese official said on Tuesday that pollution worries about rare earth mining were sincere.

“The government is paying more attention to environmental protection, and is retiring older facilities and older technologies,” said the official, who insisted on anonymity because of the political implications of rare earth policies, and declined to discuss specifics of the quotas.

Dudley Kingsnorth, a longtime rare earth industry executive and consultant in Perth, Australia, said China’s long series of restrictions, together with uncertainty about Chinese policies, were making it increasingly likely that mines would be opened in the next three years in other countries.

“It’s only a matter of time before China is not the major supplier to the rest of the world,” he said, while adding that there might be supply problems before the other mines can open.

Japanese companies account for half the world’s consumption outside China and have some stockpiles, but have kept secret the size of these stockpiles.

 “If this continues, it becomes a big issue for all of the Japanese auto manufacturers, and not just auto manufacturers, but electronics manufacturers and others,” Mr. Shiga said.

The commerce ministry said on its Web site on Tuesday that it had awarded export quotas totaling 14,446 tons to 31 Chinese-owned and foreign-owned companies.

The Chinese commerce ministry denied earlier this month that it would reduce export quotas in 2011. Mr. Kingsnorth said that it was still theoretically possible for this to be true, if the government sharply increased its quota allocations for the second half of 2011 to offset the steep drop in quotas allocated at the start of the year.

The ministry typically makes a large allocation of quotas in December that can be used at any time in the following year, and then a supplemental allocation of quotas the following summer. In July of this year, the ministry made a supplemental allocation of 7,976 tons to Chinese-owned and foreign-owned companies.

World consumption outside China totals about 55,000 tons of rare earth minerals a year, and is rising about 7 percent a year, with increases at twice that pace for the particularly high-price minerals needed for clean energy. Annual production outside China is around 7,000 tons but poised to rise to at least 50,000 tons a year within three years. A quirk in how China calculates quotas means that two tons of quota must be used to export a ton of rare earths for some alloys.

The ministry also said that one company previously receiving quotas, not identified as foreign or domestic, had temporarily lost its rights to quotas because it was replacing equipment.

Source: [Nytimes.com]

Combatting Invasive Species in the Great Lakes

Marine Highways are becoming more popular as the world begins to see them in a new light. Despite its rising popularity, it still has some minor setbacks, and we’re not talking about the human kind. You may remember the Carp invasion that is currently problematic for the Great Lakes in Michigan. This is definitely a problem for cargo shipping companies and also poses a problem for those transportation companies that use these marine highways for transporting goods. According to MARAD, the U.S. Department of Transportation has announced a four million dollar investment which will combat some of the invasive species in these Great Lakes to help provide better transportation services.

The U.S. Department of Transportation’s Maritime Administration (MARAD) announced November twenty second that it is providing four million to help prevent the spread of aquatic invasive species found in cargo ships plying the Great Lakes and America’s inland waterways.

“This funding demonstrates the Obama Administration’s commitment to protecting the Great Lakes while supporting economic revitalization of the entire region,” said Secretary of Transportation Ray LaHood.

The funding is part of the Administration’s Great Lakes Restoration Initiative, the largest federal investment in the Great Lakes in 20 years. The initiative’s priorities for action are combating invasive species, cleaning up toxics, protecting wetlands from pollution, and restoring wetland and habitats.

“As the largest freshwater system on Earth, the Great Lakes are a national treasure, and the foundation of a multi-billion dollar regional economy. Working together, we will protect this essential resource for the benefit of communities throughout the region, and the Nation as a whole,” said Maritime Administrator David T. Matsuda.

Through a cooperative agreement with the Northeast Midwest Institute, MARAD is providing funding and technical expertise to help upgrade the Great Ships Initiative (GSI) ballast water treatment technology testing facility. The GSI facility, located in the Duluth-Superior Harbor of Lake Superior and the only freshwater facility in North America, is being used to test promising water treatment technologies designed to remove unwelcome species “hitch-hiking” in ballast water tanks onboard cargo ships.

This initiative is innovative, and will help the Economy from Marine Transportation Companies and beyond.

Source: [Marad.Dot.Gov]