Stuart O'Brien, Author at Total Supply Chain Summit | Forum Events Ltd
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Stuart O'Brien

Petrostates ‘need to bridge $9 trillion gap’ in energy transition

Oil and gas producing countries face a multi-trillion dollar hole in government revenues over the next 20 years as the world decarbonises, with some needing strong international support to diversify their economies and avoid social and political instability.

That’s according to a report from Carbon Tracker, which calculates that 40 petrostates could face an average 46% drop in expected revenues from oil and gas if demand falls in line with tightening global climate policy and technological advances – a shortfall of $9 trillion.

Over 400 million people live in the 19 worst affected countries where declining fossil fuel revenues could see total government income fall by at least 20%, leading to cuts in public services and job losses. Half live in Nigeria, where a 70% drop in oil revenues would cut total government income by a third. Angola, home to 33 million, could lose over 40% of government income.

Many of the world’s biggest oil and gas producers including the US, UK, Netherlands, China, India and Brazil also face major falls in revenues but they are not a focus of the analysis because their economies are less dependent on oil and gas. Worldwide, all oil producing countries risk collectively losing $13 trillion by 2040 compared with industry expectations, a 51% drop.

Report author Mike Coffin, senior analyst oil, gas & mining said: “It’s in the interests of all nations to minimise global temperature rise and this means rapidly reducing our use of fossil fuels. But many countries are heavily reliant on oil revenues – the time to act on rebalancing their economies is now. Waiting for demand to fall will be leaving it far too late.”

Andrew Grant, head of climate, energy & industry and co-author said: “Government oil revenues will shift dramatically as the market shakes out during the energy transition. Understanding the scale of the challenge and which nations are most vulnerable will help policymakers focus their efforts. Cushioning the landing for hundreds of millions will deliver better outcomes for both climate and human development.”

Beyond Petrostates: The burning need to cut oil dependence in the energy transition calls on petrostates to act now to reduce their dependence on oil and gas revenues, by cutting public spending, raising new taxes, and restructuring their economies. It warns that continuing to invest in new oil and gas projects risks creating stranded assets and wasting capital that would be better spent on developing sustainable new industries.

Hospitality supply chain ‘on verge of collapse’

The UK’s hospitality sector supply chain is facing devastation with 324,000 jobs at risk unless businesses receive immediate financial support from the Government, according to new research.

UKHospitality’s Supplier Alliance has released data highlighting the impact of the COVID crisis on the hospitality supply chain and the lack of financial support that has been received by businesses.

Key findings from the report:

  • 1 in 5 jobs in the supplier workforce have already been lost (workforce now just 82% of February 2020 level)
  • 1 in 3 businesses have received no Government grants or loans
  • Without support, 2 in 5 businesses will have to close, with 1 in 5 facing insolvency – 324,000 redundancies likely
  • Hospitality venues will need to return to 59% of normal trading levels to make supplier services viable.

UKHospitality has called on the Government to use the forthcoming Budget to ensure that supplier businesses receive the necessary financial support. This includes:

  • A meaningful, national grant fund for the hospitality supply chain to allow viable businesses to invest in goods/services critical to a successful restart
  • A Government backed invoice factoring scheme to free-up funds for investment and mitigate some of the risk of trading through the restart.

UKHospitality Chief Executive Kate Nicholls said: “It cannot have escaped many people over the past year that hospitality businesses have been completely devastated by the COVID crisis. Much less visible, but by no means less terrible, has been the destruction heaped upon those businesses that supply restaurants, pubs, hotels and the entirety of hospitality.

“The pain of the past year has filtered right down the supply chain and many of those businesses are now staring ruin in the face. One in five jobs have already been lost in the supply chain and another 324,000 are now at risk of being lost unless there is immediate financial support. One-third of businesses have not received any support whatsoever from the Government and the sector is clinging on.

“The totality of hospitality is dependent on its supply chain. If supplier businesses fail, then the entire sector grinds to a halt and we are at risk of the whole thing collapsing. We are hopeful that hospitality businesses can lead the recovery of the UK’s economy this year. That cannot happen if businesses are not supplied to do the job. The supply chain is everything and it must be supported.

“The Government has to understand this and provide the support that these businesses desperately need at the Budget. Otherwise, our sector will rapidly become a house built upon sand and the terrible damage that has been felt over the past twelve months will only be compounded.”

5 Minutes With… Richard Aldridge, National Accounts Manager, UniCarriers UK

In the latest instalment of our supply chain industry executive interview series we spoke to Richard Aldridge, National Accounts Manager at Unicarriers UK, about the company, the joint impacts of COVID-19 and Brexit, market opportuities and the potential for automation…

Tell us about your company, products and services.

UniCarriers have been a global supplier of forklift trucks for over 50 years. We are totally committed to developing the most cost-effective materials handling and storage solutions for our customers. Our ultimate goal is to match operational requirements with materials handling solutions. We have an extensive product portfolio that enables us to fully consider the options without having to streamline our proposals due to a limited product range.

What have been the biggest challenges the Supply Chain industry has faced over the past 12 months?

Both Covid-19 and Brexit have challenged the industry and continues to do so. These unpredictable times have allowed businesses to demonstrate outstanding resourcefulness and flexibility whilst adapting and altering the way they work; in order to come through the other side. The challenges have highlighted and promoted the importance of the Supply Chain Industry.

And what have been the biggest opportunities?

The opportunities have arisen from the necessity for businesses to adapt and we have found the Food Industry, as a whole, has been extremely busy. This has resulted in the increase demand for Short Term Hire solutions and projects that provide increased storage on existing building footprints. 

What is the biggest priority for the Supply Chain industry in 2020?

For UniCarriers, it is to support our new and existing customer’s supply process, whilst ensuring product arrives on shelves in a timely and efficient manner; endeavouring to limit the effects of Brexit and the Pandemic on consumers.

What are the main trends you are expecting to see in the market in 2020?

2020 provided a record year for industrial and logistics real estates and the trends suggest that it will continue into 2021.  Traders are wanting to hold more stock to mitigate the risks of both Covid and Brexit, as warehouses are close to being full, more sites will need to be built. 

What technology is going to have the biggest impact on the market this year?

With the increase of Ecommerce and small part picking operations, Automated operations will be on the increase in 2021.  End users will be focusing more on energy usage and cost – therefore, Lithium Ion solutions could also be on the increase. 

In 2023 we’ll all be talking about…?

Much more Automation to suit the part picking nature of the industry in the future.

What’s the most surprising thing you’ve learnt about the Supply Chain sector?

The ability to adapt and change.  During this unusual time, many companies have had to diversify and react to the new markets. It has been really encouraging to see how businesses are targeting a positive result from what has been a difficult year.

You go to the bar at the Total Supply Chain Summit – what’s your tipple of choice?

Gin and Tonic.

What’s the most exciting thing about your job?

Being involved in materials handling projects from an embryonic stage and seeing it through right until the end.  The investment in time and working close with the customer, makes you feel part of their company and operation; when a project comes to fruition, it’s very rewarding.

And what’s the most challenging?

The vast majority of our time is spent in face-to-face meetings with our customers.  However, due to the current challenges, the transition to having meetings over Microsoft Teams and Zoom has been a difficult one.

What’s the best piece of advice you’ve ever been given?

‘Stick to the Process’ – our process is designed to create a robust solution for the customer.  Short cutting this may result in the customer not maximising opportunities from a new operation or a fleet replacement scenario.  

Peaky Blinders or Stranger Things?

Peaky Blinders 

For more information about Unicarriers UK, click here.

CALL FOR SPEAKERS! Would you like to talk at our supply chain industry events?

We’re looking for supply chain industry thought-leaders to share their knowledge at the upcoming Total Supply Chain Summit, which is taking place on November 1st & 2nd.

If you’re available on those dates, have an internet connection and would like to take part in this unmissable industry event, simply contact Nick Stannard on 01992 374092 / n.stannard@forumevents.co.uk.

Alternatively, if you’re an industry professional, we don’t want you to miss out on a place at November’s big supply chain industry event – so here’s all the key information.

Date & Time: 1st & 2nd November – Hilton Deansgate Manchester

Event Type: Live Event – Virtual attendance options are available

Free pass includes: Overnight accommodation, all meals and refreshments throughout the event.

Key Benefits: Building business connections for your end-to-end supply chain needs and gaining insight into the future challenges within warehousing, supply chain and distribution.

Multiple Seminars Sessions: Throughout the day you can enjoy two insightful seminar sessions about the current and future challenges within the industry

Format: Around your seminars we will create a bespoke itinerary designed just for you. The itinerary will include short, relaxed, 1-2-1 meetings with the suppliers you would be interested in meeting and those who would like to connect with.

This event saves you time by helping you to build all the business connections you need in one-day for 2021 and the future of your business, so that you can prepare for every eventuality.

(all socially distancing measures are in place, including clear meeting patrician screens – virtual attendance options are also available)

Register your interest here via our online form.

Do you specialise in Supply Chain Forecasting? We want to hear from you!

Each month on Supply Chain Briefing we’ll be shining the spotlight on a different part of the logistics market – and in March we’ll be focussing on Forecasting.

It’s all part of our ‘Recommended’ editorial feature, designed to help supply chain industry buyers find the best products and services available today.

So, if you’re a Forecasting specialist and would like to be included as part of this exciting new shop window, we’d love to hear from you – for more info, contact Nick Stannard on n.stannard@forumevents.co.uk.

Here’s our features list in full:

Mar – Forecasting
Apr – Warehouse Management Software
May – Total End-to-End Solutions
Jun – Cost Reductions
Jul – Supply Chain Software
Aug – Logistics & Operations Management
Sept – Labelling & Packaging
Oct – 3PL & 4PL
Nov – Order Fulfilment
Dec – Transport Planning & Load Optimisation

Oxfordshire sees record take-up of industrial space in 2020

According to Savills, take up of industrial space in Oxfordshire hit 1.6 million sq ft (148,644 sq m) in 2020, a record year for the region and a 113% increase on the long term average. This can be attributed to a significant increase in demand, particularly from online retailers who accounted for 70% of all market transactions.

Savills notes that most activity took place in Bicester, Banbury and Abingdon, followed by Didcot, Witney and Thame. Key deals included two transactions of 60,000 sq ft (5,574 sq m) and 163,664 sq ft (15,204 sq m) at Symmetry Park Bicester to DPD and Ocado respectively, whilst 3PL Great Bear took 333,760 sq ft (31,007 sq m) at Central M40 in Banbury.

Locally there has also been an increase in appetite from technology and life science companies looking for good quality industrial space. Accounting for 15% of take-up last year, firm’s including Arrival, the electric vehicle developer, took 168,000 sq ft (15,607 sq m) at Link 9 in Bicester, whilst life science occupier The Native Antigen Company agreed to 50,000 sq ft (4,645 sq m) at Oxford Technology Park. Savills has seen premium rents of up to £15 per sq ft (£161 per sq m) being paid for high specification units that can accommodate these types of businesses.

As a result of strong transactional activity there has been downward pressure on supply, meaning that there is now less than 0.4 million sq ft (37,161 aq m) of Grade A space currently available in the region. This will see recently completed schemes and those that can be delivered within the next 12-18 months benefit from ongoing demand. Examples include; Savills IM’s Didcot Quarter totalling 310,000 sq ft (28,799 sq m) across two units, which has already reached PC as well as Westhall Estates scheme at Thame on the M40 corridor which totals 180,000 sq ft (16,722 sq m) and will be delivered mid-2022.

Jan Losch, associate director in the business space team at Savills Oxford, said: “The Oxon region saw exceptional take-up in 2020, surpassing both last year’s figure and the long term average. In line with the rest of the UK, demand remains high from occupiers looking for good quality, modern accommodation and those who chose to build speculatively will benefit from favourable market dynamics.”

Environmental supply chain risks to cost companies $120 billion by 2026

Companies face up to $120 billion in costs from environmental risks in their supply chains by 2026, according to new research released today by CDP.

The report, Transparency to Transformation: A Chain Reaction, analyses data from 8,000+ supplier companies disclosing to their corporate customers via CDP in 2020 and finds a combined $120 billion of increased costs among those companies alone within the next five years from environmental risks.

The sectors that report the most potential cost increase are manufacturing (US$64 billion), food, beverage & agriculture (US$17 billion), and power generation (US$11 billion).  

Due to most supply chains running on very tight profit margins, increased costs are expected to be passed up the chain in a domino effect to their buyers. In turn, these companies are likely to pass the cost onto consumers. 

Sonya Bhonsle, Global Head of Value Chains at CDP, said: “With US$120 billion at stake, addressing environmental risks through supply chain engagement is vital for companies to be competitive and resilient in the changing market. Leading companies that address these risks will benefit from lower costs and better reputations. This gives them a more competitive edge today and helps them become more resilient for the economy of tomorrow. Meanwhile, laggard companies risk being left behind. As the climate and ecological crisis worsens and the economy shifts, it’s essential for both business and society that we have a Green Recovery from COVID-19 and build back better. Smart business procurement is key to that transition.”

The environmental risks causing cost increases stem from climate change, deforestation and water-related impacts. These cover physical impacts, for example increased severity and frequency of cyclones and floods, increased cost of raw materials; and regulatory and market changes as the world addresses environmental crises, such as carbon pricing and increased spending on product innovation due to changing customer demands.

Corporate buyers could be impacted by this looming cost increase. To address this risk, increasingly buyers are demanding transparency and action from their suppliers to tackle environmental impacts in their supply chains. These include 150+ major buyers with over US$4.3 trillion in purchasing spend, such as Google, L’Oréal, Walmart, Braskem and Toyota. As CDP supply chain members, they request thousands of their key suppliers to disclose their environmental data through CDP each year and use this data in their procurement decisions and supplier engagement.

Other key findings from the report include:

  • Supply chain GHG emissions are 11.4 times as high as operational emissions on average. This is over twice as high as previous estimates, due to more comprehensive emissions data. 
  • The ratio varies drastically by sector: E.g., in retail, supply chain emissions are 28 times as high as operational emissions.
  • The number of supplier companies disclosing data has increased from almost 7,000 to over 8,000 in 2020, despite the disruption from COVID-19 (a 16% increase) 
  • Suppliers undertook activities that cut emissions by 619 million metric tons of C02e in the last year and saved US$33.7 billionin the process. This is equivalent to emissions from 159 coal power plants running for a year [1]
  • However, climate action is not yet cascading through the supply chain as needed: only 37% of suppliers are engaging their own suppliers to cut emissions. 

The demand from big corporate buyers for their suppliers to be transparent on environmental impacts and take action to address them is growing, despite the pressures from COVID-19. In 2020, the number of buyers requesting disclosure through CDP’s system grew by 24% and they collectively requested data from 15,600+ suppliers, a 19% increase on the last year. In part this increase in market demand has been driven by the large companies increasingly setting science-based targets, which usually require them to cut their supply chain (Scope 3) emissions. Achieving their targets depends on engaging their suppliers.

Total Supply Chain Summit: Everything you need to know!

We don’t want you to miss out on a place at this May’s big supply chain industry event – so here’s all the key information.

Date & Time: 17th & 18th May – Radisson Red, Heathrow

Event Type: Live Event – Virtual attendance options are available

Free pass includes: Overnight accommodation, all meals and refreshments throughout the event.

Key Benefits: Building business connections for your end-to-end supply chain needs and gaining insight into the future challenges within warehousing, supply chain and distribution.

Multiple Seminars Sessions: Throughout the day you can enjoy two insightful seminar sessions about the current and future challenges within the industry

Format: Around your seminars we will create a bespoke itinerary designed just for you. The itinerary will include short, relaxed, 1-2-1 meetings with the suppliers you would be interested in meeting and those who would like to connect with.

This event saves you time by helping you to build all the business connections you need in one-day for 2021 and the future of your business, so that you can prepare for every eventuality.

(all socially distancing measures are in place, including clear meeting patrician screens – virtual attendance options are also available)

Register your interest here via our online form.

Fleets ‘need to be aware of growing impact of pandemic on driver mental health’

Fleets need to be aware of the growing impact of the pandemic on mental health and any subsequent safety risks to drivers, FleetCheck is warning.

Peter Golding, Managing Director at the fleet software specialist, pointed to a new poll that showed 40% of people believed their mental health had become worse during the crisis.

He said: “This is just the latest in a series of polls and pieces of research showing how the last nine months have had a very negative effect on the mental health of many, many people.

“We know that mental health problems of all kinds can have an impact on driver performance on the road. With people saying that feelings of anxiety, stress and depression are particularly apparent, there is a genuine case for fleets to take action.

“Essentially, employers should be fulfilling their basic requirement of checking that drivers are fit to drive and of course, their mental wellbeing should arguably be as much part of this assessment as if they had a physical problem.

“It should be taken as a given that anyone who feels that their mental health has deteriorated to a point where they should not be driving should be taken seriously, and employers should also make it clear that such situations will be dealt with sympathetically.

“Probably the starting point for most fleets would be to seek professional human resources and medical guidance in order to ask drivers a few questions regularly in order to flag up any immediate issues that need attention.”

Golding added that FleetCheck was examining the introduction of basic mental health tools into its Vehicle Inspection App, which included not just daily walkaround safety checks but also incorporated questions about the driver’s health.

“We modified the app last year to cover coronavirus symptoms and now seems like a good moment to add further questions about mental health. We are taking advice and hope to be able to do this soon.” 

Big changes ahead as supermarkets embrace smart tech

A study has found that nine in ten Brits now believe the average supermarket will be significantly different in just nine years’ time, with many of the changes that people predict being once the stuff of sci-fi films. 

The ThoughtWorks research showed that just over a quarter of adults (26%) believed the supermarket checkout will have disappeared by 2030, while around a fifth of respondents (18%) believed shelves would be stacked by robots. A further 13% of people believed there would be no human staff in stores at all by 2030, rising to 21% of students about to enter the world of work. 

The research was conducted by MaruBlue among a nationally representative sample of 2,007 adults. The research was conducted online.

Many also saw a big future for AI – with a fifth (19%) of people believing their food and drink for the home would be automatically re-ordered by our fridges, cookers and cupboards by 2030. 

These findings are from a new ‘2030 Britain’ study commissioned by ThoughtWorks. Following a home isolation era that has largely re-defined the consumer’s relationship with food, retail, work and home-life – the new study on food retail suggests the evolving use of technology in powering people’s lives has resulted in many seeing it as having a far more widespread role in shaping people’s everyday routines in tomorrow’s Britain. 

In terms of physical presence, while a quarter of those surveyed (25%) believed that the size of the average supermarket would likely grow – selling a range of additional items beyond just food – one in five (19%) believed the opposite: that supermarkets would only exist online, or that food would come direct from the food producer and, in doing so, would bypass the retailer.  

Asking about what supermarkets would sell, a third (32%) of people believed local food producers would take up more shelf space than they currently do, reflecting the current trend to support local suppliers and farmers. One in six people (17%) went further, suggesting that supermarkets would become centres for local artisan food producers and farmers to sell their produce, while one in seven (15%) believed the supermarkets would start to operate new local farms. 

As a result of almost 12 months of lockdown restricitons, the ThoughtWorks study saw a rise in expectations prompted by a year of acclerated digital skills. Technology has become the enabler for many many challenges presented, with earlier research from ThoughtWorks finding that over a third of people in the UK (24%) believed local producers will deliver straight to their door by 2030. 

Kevin Flynn, director of retail strategy at ThoughtWorks, said: “Crystal ball gazing tends to say more about our current times than it does about the future. Supermarkets have enjoyed a boom in activity during the lockdown, and consequently many can see them continuing to grow and expand over the next decade. However, as many people have been forced to look further afield for different products, they have new and better ways to meet their demands, and support causes that matter to them. This is a watershed moment for the retail industry which will have long lasting effects.”