Daily Archives: August 21, 2009

Oil Prices Will Soar Again

Share This on Linked In

And it will happen sooner than you think. Are you ready?

A recent piece in Supply Chain Digest states that oil prices (are) set to soar according to Dr. Fatih Birol, the chief economist at the International Energy Agency, and Dr. Birol is right. About every decade we get a new peak, and the last two decades have seen faster boom and bust cycles. Plus, now that international shipping is now consuming 20% of all oil production, we’re not only draining reserves faster than expected, but getting close to the point where we will be consuming oil at full production capacity. There are only so many fields and so many rigs and we can only pump it so fast.

Now, I don’t think the “oil crunch” will start as early as 2010, primarily due to the fact that this recession is going to linger a little longer, but I do think we could see it as early as 2012, which, of course, will make the new age conspiracy theorists (or is that the true believers) squeal with delight, especially if it peaks at the end of the Mesoamerican (Maya) Long Count Calendar on December 20, 2012.

It’s not that unlikely, given that IEA’s recent assessment of over 800 major oil fields, that cover three quarters of the global reserves, found that most have already seen production peaks and that the rate of oil production decline is now running at nearly twice the pace that was calculated a mere two years aga. These are unsustainable levels, and with the lack of new exploration and development by the major oil companies, it is extremely likely we could see oil prices skyrocket within two years.

So, are you ready?

Do You Know Where Your Cargo Is?

Share This on Linked In

Recent articles on cargo theft from eSide Supply Management and S&DC Executive highlighted a 2008 study from LoJack Supply Chain Integrity that uncovered 299 cargo thefts in 2008 (in the US) at truck stops, parking lots (including drop yards), facilities, warehouses, store locations, vehicles parked on the street, airports, casinos, ports and hotels across less than 600 organizations who belong to SC-ISAC. In other words, over 50% of organizations surveyed experienced cargo theft in 2008.

What does this mean? Simply put, if you move goods — you’re a target.

What can you do? First, identify your areas of highest risk. According to the study:

  • 65% (194/299) of incidents occurred at truck stops, in parking lots, (parked) on the street, and in store lots
  • 56% (168/299) of incidents occurred on the weekend
  • 52% (155/299) of incidents occurred in Texas, Georgia, Tennessee, and Florida

This says that:

  • your trucks are more likely to be targeted when they are in public areas which are less secure
  • your trucks are more likely to be targeted on the weekend when traffic and workforces are low / non-existent
  • your trucks are much more likely to be targeted in certain states, indicating the likely presence of organized crime rings

This says that you should:

  • avoid parking in un-secured public ares and, if you must, insure the trucks are monitored constantly
    (either through the use of a second driver who stays with the vehicle or real-time locator technology and software that immediately triggers an alert if the truck is moved without a clearance)
  • insure sufficient, if not extra, security is present on weekends
    on weekdays, you’ll have staff around who would notice a missing truck
  • minimize routes / stops through trouble zone
    and only use trucks that are well-secured and monitored in real-time

And follow the advice of LoJack Supply Chain Integrity which noted you should:

  1. Arm yourself with information
    What methods are criminals using to access the trucks, where are they most active, and what products are they targeting? The higher your risk, the more security you’ll need.
  2. Have a plan in place
    Be sure you’ve covered your supply chain end-to-end and that you:
    • review high-value shipper security requirements
    • developer corporate supply chain security guidelines
    • contact your insurance carrier about resources at your disposal
    • regularly evaluate and audit your transportation partners
    • establish contractual security requirements for partners
  3. Use deterrents
    Make sure your trucks have immobilization devices such as wheel locks, fuel shut-offs, air cuff locks, ignition locks, battery-disconnect switches, covert cargo-tracking, monitoring, and vehicle recovery systems.