Anti-equilibrium Archive

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Oil and Product Logistics in 2022 – Radical Changes in Routes, Ports and Freight

By Marek Grzybowski

The year 2022 brought radical changes to the transport routes of crude oil and products. After Russia’s invasion of Ukraine, importers experienced a record increase in freight rates for operators of oil tankers and its products. The local war changed the macroeconomic picture of the world economy.

 

Last year marked a new era in the global logistics of crude oil and petroleum products. December 5 last year With the extension of the European Union’s sanctions package and the entry into force of the EU ban on trade in Russian oil, a new era of oil at sea and on land has begun.

– The year ends with critical macroeconomic challenges regarding the future of VLCC and crude oil freight rates. There is uncertainty about the evolution of the oil supply given the current increase in oil demand and the impact on trade flows, as Europe continued to rely on Russian oil imports until the end of the third quarter, says Sue Terpilowski of SeaNews, using data compiled by Signal Ocean.

In 11 months of 2022 [excluding December], the global supply of crude oil in sea transport increased by 8.6% y/y to 1,866.8 million tonnes, excluding cabotage transport, Refinitiv experts calculated. This means higher demand than in the period January-November 2021 (1,718.3 million tonnes), but it was slightly lower than in the same period of 2019, when it amounted to 1,926.9 million tonnes.

As the geography of crude oil and petroleum product imports changes, fuel terminals in Polish ports play a greater role. We still imported 51% of crude oil from Russia to Poland (January-October 2022). Crude oil from outside this market also reached Poland by sea. The main suppliers were: Saudi Arabia (28%), Norway (8%), Great Great Britain (5%), USA (4%), Kazakhstan (3%), Guyana (1%), Nigeria (1%) – Forum Energii experts calculated.

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Sea coal logistics in 2022. A radical change in supply routes

 

By Marek Grzybowski

Russia’s attack on Ukraine and the sanctions introduced by EU countries resulted in radical changes in coal transport chains in 2022 on a global scale. Polish ports also joined the new system of sea connections under the influence of decisive changes in the sources of coal acquisition on the international market. The bulk terminals of Gdańsk, Gdynia, Szczecin and Świnoujście quickly adapted their technical and organizational potential. Polish ports joined the transshipment of coal in import relations.

Periodic shortages of gas and oil on the international market resulted in increased demand for coal. Global coal consumption increased by 1.2% and reached a record level of demand in 2022, according to a report by the International Energy Agency (EIA).

A new record for coal consumption reached 8,025 million tonnes in 2022. This was slightly above the level of 2013, when 7,997 million tonnes were used for energy, industrial and consumption purposes. The lower demand growth in 2022 is largely a reaction to the economic slowdown in leading industrial regions, including China.

The World Economic Forum highlights that only “about a third of the world’s electricity generation capacity now comes from low-carbon sources, with 26% coming from renewables and about 10% from nuclear power. The other two-thirds come from fossil fuels that emit greenhouse gases, such as coal, gas and oil.”

Coal ships will sail for many more miles and ports will handle millions of tons of coal before economies switch to renewable or nuclear power.

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The quantum revolution in the maritime logistics

By Marek Grzybowski

Maritime transport has recently experienced great turmoil. The new mutations of the coronavirus pandemic and the sanctions imposed on Russia after that country invaded Ukraine have caused disruptions in global logistics. Congestion at the last mile in a port, logistics center or container terminal causes global turmoil in leading industrial markets, both on the supply and demand side.

The world’s merchant ship fleet reached a capacity of around 2.3 billion dwt in January 2023. This is about 60 million dwt more than a year earlier and over 120 million dwt than in January 2021. Tonnage has increased significantly in all segments except general cargo operators in the last two years.

Bulk carriers recorded a particularly rapid increase in overall carrying capacity. The share of bulk carriers in the total capacity increased from 41 to 43 percent, the share of tankers decreased from 30 to 29 percent, and the share of general cargo ships from 5 to 4 percent. in the years 2012-2022.

Over 500 LNG tankers transported liquefied gas across the oceans in 2021. About 650 LNG tankers transported LNG on sea routes in 2022. By the end of 2023, their number will increase to about 690 LNG tankers.

Quantum technology for the logistics industry

What can a forward-thinking organization do with the current state of technology? – asks Dr. Christopher Savoie, CEO of Zapata Computing in Forbs and answers: “It’s best to start with making the most of this technology.”

“We’re seeing a steady evolution of quantum hardware, which is becoming increasingly fault-tolerant, and existing technology is slowly becoming more widely available,” said CEO Zapata Computing.

“Quantum technology is an exciting development for the logistics industry as it allows us to solve the recurring problem of finding the most efficient route between multiple hubs, which is becoming increasingly difficult in a complex environment,” said Justin Baird, Head of Innovation, DHL, Asia-Pacific Center. DHL portal.

Logistics in storms need support

Turmoil in sea and land logistics networks will require the support of efficient tools. These include the already widespread use of IoT and the management of ship and car fleets, traffic control in ports, on railroads and on rivers.
The smallest yacht or even a boat moving on inland waterways is supported by satellite technologies.

No one can imagine the movement of ships, cars and even couriers without the support of satellite technologies. Tracking a package purchased in a store by an individual customer is already a standard. It can therefore be expected that according to the predictions of IBM and DHL and the services introduced by UPS, quantum algorithms will enter global and local logistics at a rapid pace.

If large and small ports, terminals and logistics centers, sea and land connections are to participate in the logistics networks of the global economy, then we must be prepared to introduce innovative solutions based on quantum, information and space technologies today. Otherwise, we risk marginalization or even falling out of the market.

Sources: Forbs, Zapata Computing, IBM, DHL, UPS

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BCG: How the Metaverse Will Remake Your Strategy

 

By Rony AbovitzSumit BanerjeeGuy GillilandChristy LiuEdwardo SackeyAlexey Timashkov, and Rob Trollinger

The metaverse is already a big part of business. It will only become more central.

As digital technologies move to the next stage of advancement—the metaverse—there are two questions companies should ask: How will the metaverse change our business? And how can we get ahead of the change and shape it to our advantage? This is our perspective on both.

The Data and Technology Universe

There’s plenty of debate about the definition of the metaverse, but we find it more useful to take a practical view and focus on the productive use cases that it enables. The metaverse is based on the convergence of multiple technologies and the proliferation of data and content, which combine to create value for users. In the case of consumers, the result might be a virtual-reality (VR) gaming platform, while for business it could be a machine-learning algorithm that incorporates multiple diverse data sets to provide better insights and improve decision making.

In this sense, the metaverse encompasses broad categories of technology (including computing, connectivity, artificial intelligence, and machine learning) that come together in rich ways to create new and unprecedented value. It’s an aircraft engine technician connecting via the company’s help line to an expert 3,000 miles away. It’s the digital twin of an electrical grid that highlights maintenance needs or security vulnerabilities. It’s a smartphone app that integrates with an augmented-reality-enabled windshield to serve up driving directions, which it feeds to the car’s self-driving algorithms. It’s the technology that enables emergency services to respond when a phone or watch belonging to an injured person automatically sends an SOS.

It’s hard to pinpoint where the metaverse ends. It is flourishing, in part, thanks to continuing advancements in technologies such as augmented reality (AR) and VR, big data, artificial intelligence, machine learning, and blockchain. Just as our understanding of the universe and what it encompasses has been vastly expanded by the Hubble space telescope, the nature of the metaverse is a work in progress. Were we able to define its boundaries today, some future technological advance would almost certainly cause us to reassess.

If the metaverse seems a bit amorphous, its use cases are easier to spot and are multiplying fast. (See Exhibit 1.) Many companies already see the metaverse as an opportunity to connect with consumers in new ways. But for both B2C and B2B enterprises, it really represents a new way to do business and an opportunity to reinvent everything from customer journeys to operational processes. We can point to dozens of use cases for companies in all sectors and industries—and the technology underlying these applications is still only in its infancy. Their impact ranges from greater convenience and efficiency (remote maintenance, for example) to the life-changing and disruptive (enhanced surgical assistance and in-home health care). The new use cases can lead not just to quicker and easier ways of doing things but to whole new industries and business models.

More: BCG Metaverse Services

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BCG – When Innovation Has No Borders, Culture Is Key

By Johann D. HarnossAnna SchwarzFrançois CandelonMartin ReevesAshley GriceRyoji Kimura, and Nikolaus Lang

Where do new ideas come from? Innovations that propel our societies forward often come from people who look at the familiar with fresh eyes, connecting and combining what’s previously been separate. For such innovators, crossing boundaries—not only mental boundaries, but sometimes actual physical borders—is the key to imagining new possibilities.

Talented, creative people can be found in every part of the world. Bringing together that diversity of talent enables companies and countries to see things in a new way and, our research shows, ignites the much-needed innovative spark that drives sustainable growth.

A Moral Cause with a Business Case

Reducing the obstacles to global migration, and building bridges to opportunity for talented people regardless of where they were born or what their circumstances might be, is a moral cause that also has a strong business case. The war in Ukraine, along with ongoing conflicts in Afghanistan, Syria, and elsewhere, reminds us that not all migration is voluntary—which only makes the moral cause that much more urgent.

In this “Innovation Without Borders” report, we lay out a pragmatic way forward for business executives who intend to drive creativity and innovation through global diversity. The report is based on a first-of-its-kind survey of executives in 20 industries and 10 countries, the personal beliefs that guide them, and the operational tactics they use. The report also includes the in-depth perspectives of four executives who have seen how rewarding the journey to global diversity can be for an organization—and the struggles that can occur along the way. Here are a few of their insights:

From Aspiration to Action

Our survey found that, while 95% of executives plan to embrace globally diverse teams, only 5% have fully scaled such teams across their organizations. This gap between ambition and execution is mostly a result of one thing: culture. Senior executives, especially in large, established firms, told us they worry about the significant cultural change a globally diverse workforce brings with it. Leaders of large companies who express a strong intent to pursue global diversity (and many who already are) also voice a healthy skepticism that they can get thousands of employees to follow them without ruffling some feathers.

Four Clusters of Maturity

We found that the firms in our survey fall into four distinct clusters of global diversity: companies we refer to as question marks, companies that see diversity as a tool, those who see diversity as a celebration, and those for whom diversity is a part of their DNA. Identifying the cluster a company occupies is a prerequisite for ambitious executive teams to drive action.

Managing Three Moments of Culture Shock

The four clusters above serve as beacons in the journey to global diversity, with higher creativity, growth, and innovation output the ultimate rewards. Each step on this journey offers benefits from a value creation perspective: firms that start as question marks can significantly increase their chances of becoming world class innovators by taking one or two steps in the journey to global diversity.

More: The BCG Henderson Institute is Boston Consulting Group’s strategy think tank, dedicated to exploring and developing valuable new insights from business, technology, and science by embracing the powerful technology of ideas. The Institute engages leaders in provocative discussion and experimentation to expand the boundaries of business theory and practice and to translate innovative ideas from within and beyond business. For more ideas and inspiration from the Institute, please visit our Latest Thinking page and follow us on LinkedIn and Twitter.