A renaissance for railroads

Railroad traffic is growing worldwide at such a rate that most of the rail systems in the industrialized world are struggling to carry all the freight and passenger traffic being pressed on them.

So, across the world, corporations and countries are spending large sums of money to keep up with the demand.

For the first time the annual market for railroad equipment, infrastructure and technology will soon surpass €100 billion, if it has not already done so.

In 2003, the latest year for which figures are available, the market for railroad locomotives and other rail vehicles accounted for 61% of total spending. But infrastructure was the fastest-growing market at 32%, led by new rail lines and line upgrades in the Middle East and Asia.

In the United States, the surprise has been in freight traffic, which began to surge in late 2002 and has not let up. One factor is that freight rates have fallen so low that it is often cheaper to cross an ocean to Asia to turn raw material into finished products than it is to build a nearby factory.

Railroads in the United States have also been greatly aided by crowded highways and a shortage of truck drivers.

U.S. rail companies are spending billions of dollars each year for new freight capacity but are still hard-pressed to keep up.

The International Herald Tribune, October 19^th, 2006

№ 36

Western retailers shift their supply chain tasks to china

Retailers and consumer goods companies in the developed world are increasingly shifting logistics operations from their home countries to China. Goods are stored and labeled for direct shipment to individual stores before leaving Chinese ports.

Shipping lines, logistics companies and warehouse operators say costs spur customers to move the sorting process away from consuming countries, continuing the outsourcing trend to lower-wage economies that began with manufacturing going to China.

The process is known as “distribution centre bypass” because it cuts out distribution centres in the destination country.

Distribution jobs were once thought less likely to go overseas because it is complex to arrange supplies of goods for stores in the right quantities.

Companies not phasing out distribution centres at home are cutting handling costs by paying for processing in China. Boxes of goods for Tesco’s UK supermarkets from NYK Logistics in Shanghai are shrink-wrapped in quantities needed by each store to reduce UK handling.

Many expect Chinese processing to become more sophisticated. Erxin Yao, managing director for China at OOCL, a Hong Kong shipping line, said his company’s logistics arm hoped to attract imports of goods not made in China for sorting at its warehouse to distribute to Japan and Korea.

The Financial Times, March 27^th, 2007

Unit VII

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Soaring prices boost recycling of computers

As copper prices hover near records, companies are looking high and low for new sources of the metal. They might do well to start looking in the attic.

Many computers, monitors and other electronic equipment that fall into disuse each year end up either in attics or rubbish dumps, where toxins, contained in the machines present a danger to the environment and to human health.

But the soaring price of copper is giving renewed impetus to flagging efforts to recycle electronic waste. According to the Silicon Valley Toxics Coalition, an antipollution watchdog, copper accounts for about 7 per cent of the total weight of an average PC.

Mining companies and specialized recyclers have been expanding their services to recover valuable metals and safely isolate contaminants from electronic waste.

But companies seeking to cash in on this opportunity still face challenges.

Hewlett-Packard, the world’s second biggest computer-maker, has been especially critical of a recent California recycling law that requires retailers to charge customers an upfront recycling fee whenever they buy a computer or other electronic product.

Another challenge is the difficulty of extracting valuable commodities from used equipment.

That is because machines where such metals are most abundant, such as high-end servers, frequently find second homes rather than ending up a part of the waste stream.

The Financial Times, May 27/28^th, 2006

№ 38