Mining in Australia and Canada...It's normalising, not crashing!

From my perspective as a mere shipping bloke, my view of what's happening with mining in Australia and Canada isn't a crash as some of my younger clients think, it's actually a "normalisation". At the risk of showing my age I have been through a downturn or cycle like this before and it's deja vu for me.

The mother of all mining booms has played out over the last ten years or so driven by big demand from China, which is still large, however the accompanying investment boom in mining has slowed radically to what I consider to be more normal non-boom dynamics.

Commodity prices are down and while most contracts are written in US dollars, miners in Canada and Australia are suffering from historically high exchange rates when they repatriate their profits. On top of that, the OH&S environment is out of control and salaries have been too. I am not saying safety isn't important but insane and completely noncommercial things have been going on that only serve to increase production costs and feed the voracious "Safety" industry.

In Australia sadly we are seeing lots of people losing their jobs and salaries "normalising" too. Paying plant operators circa $140k+ is simply not sustainable and anybody on these sorts of salaries surely must have considered this wouldn't last for them?

From a shipping perspective the amount of mining equipment moving is well down. No wonder really with the amount of gear parked up or mothballed currently. A client in Perth told me there are over 500 mining trucks idle right now in Western Australia. We are seeing increased exports of equipment which could gain pace if the AUD would normalise too BUT...which market in the world could possibly consume this much gear? 

The Depth Logistics Shipping Index for May and June is very telling. May recorded a 68% drop from the previous twelve month high and the index just released for June recorded the lowest import value of equipment into Australia in the history of the index. Only $147m! To put this into perspective some of my clients bigger trucks can cost $4m each.

I was talking to a mate in Canada this morning. He is very nervous about the Canadian stock market as basically the Canadian index overall is doing well but the miners, who traditionally have contributed greatly to the strength of the index are not. He and his buddies are waiting for the correction and with a "seemingly" recovering US economy they think the next move up with US interest rates will be the trigger. Perhaps Australia will be the same?

Meantime, space on ships for my clients is pretty easy to come by and freight rates are still at historically low, 1980's type levels.

All for now,

+Brad Skelton 

Why investment in commercial office space is risky...

More companies are allowing their team members to work from home or remotely and adopting a "results" based approach rather than a "presence" based approach thus leading to less of a need of office space. 

With video conferencing, VOIP, smartphones and internet paperless tech these days, what is "presence" anyway? The young members of my team at Depth would argue they are just as "present" if not more via the net as they are in the office and our tech makes this possible. 

The fact is that research actually supports that people are more productive(between 9-20%), they are generally happier and far more attracted to work for companies that allow them this freedom even if only sometimes. This stands to reason with no time wasting, vibe sucking traffic or public transport for them to contend with for starters. Client satisfaction is the winner from happier team members.

Attracting and retaining great people is one of the cornerstones of success of any business. These days one of the biggest attractions to working for a company is the culture of "Freedom" they have particularly for Gen Y and Millennials. 

I am not saying you can abandon a traditional office totally but I am certain it at least doesn't need to be as big as it used to be if you embrace modern management philosophy, outsourcing and technology. A good meeting space and a hot desk environment for most companies is all you need now...and...if you really want to go one step further, you can rent space like that by the hour or for the cost of a latte at your local cafe that probably has free WiFi to boot.

Working remotely has never been easier and it will get easier still as companies learn how to train their team and foster their corporate culture and teamwork in this environment. It is possible!

So...if you are looking at investing in office space, think again. The landscape is changing fast and it isn't the investment it once was. Companies with a results based management approach won't need much office space that's if they need an office at all.

All for now,

+Brad Skelton 

Now you can travel with Depth Travel - We're live and taking bookings online NOW!

Depth Travel is now live and taking bookings online.

In creating Depth Travel, my goal was to build a travel booking portal that is easy for our clients to quickly and competitively make their travel bookings whether they are going for business pleasure.

Our platform is a no nonsense, high tech, cloud based travel booking engine that instantly scans the web for the very best available prices and options on flights, hotels, car hire and travel insurance.

You can create your own profile and our system will automatically save your preferences, passport details, frequent flyer numbers or hotel loyalty programme numbers. This will allow you to get in and out faster the next time you book with us.

For inspiration of great places to visit and to be the first to get access to some special offers you can follow +Depth Travel on Google+.

I hope you will try Depth Travel next time you need to travel. 

We Go Deeper!

Thank you and all for now,

+Brad Skelton 

Click>Ship>Save with myCargo by Depth Logistics

People are increasingly internet savvy and seeking quicker, easier, more affordable and enjoyable ways to do business. Depth Industries DNA is to strive to meet our clients needs and revolutionise the way they can access services while engaging with them as deeply as possible.

The vision that my team and I at Depth Logistics have had for myCargo has just been realised with the deployment of a quantum leap making upgrade to the platform last Friday. myCargo is now a true game changer that creates competitive advantage by allowing clients to arrange 100% of their shipping needs digitally if they chose in the same manner you can make travel bookings these days.

It enables us to offer myCargo members radically lower rates in a simple, personalised and easy to use platform. A "Best Price Guarantee" is one of the pillars of the myCargo service offering and so are the special offers we will constantly deliver. Currently members can get a customs clearance done for as low as A$80.00!

The depth of resources available go way beyond an "old school" track and trace facility. By the way myCargo offers this but in true real time! It is packed with tools that enable members to monitor, analyse, compare and consequently partner with us in reducing their logistics spend right from within their own personal dashboard.

Online quotes, marine insurance, quote history, shipping document archives are just a few more of the capabilities available.

+Julie Magnone or I would like to do a demonstration for you or otherwise feel free to sign up now and start making your shipping easier, more enjoyable and cost effective.

myCargo - Click>Ship>Save

All for now,

+Brad Skelton 

Leadership From A Dancing Guy

Check out this 3 minute YouTube clip for a great example of Leadership.

Classic!

All for now,

+Brad Skelton 

How does global business flow now? A MUST READ if you are in business.

In this blog I have been regularly talking about global business changing rapidly and how the internet and modern transportation methods have impacted the landscape of competition for numerous industries. Distance does not matter anymore!

If your overhead structure and prices are not GLOBALLY competitive you better get your skates on and make them so before the freight train runs you over.

To say it again, regardless of international borders, overseas competitors are now able to take you and your company on at home and are doing so. 

I follow the McKinsey Global Institute and this month they released a research report with some stats that you cannot afford to ignore. 

Here they are:
-There was a $26 trillion flow of goods, services and finance in 2012 which is equivalent to 36% of global GDP.
-By 2025 it is estimated that cross border business flow will reach $85 trillion.
-Global GDP will grow by an estimated $450 billion each year.
-18x increase in internet traffic from 2005 to 2012.
-90% of commercial sellers on eBay export their goods to other countries vs 25% of traditional businesses.
-500% increase in Skype call minutes since 2008
-In 2012 China accounted for 12% of global trade in goods which was up from 2% in 1990.
-In 2012 emerging economies accounted for 38% of the total cross-border flow of goods, services and finance which was up from 14% in 1990.

These confirm the trend I have been writing about in this blog for quite some time now about how global competition is developing.

All of the businesses I am growing in Depth Industries are geared to help companies stay globally competitive by accessing the goods and services that will help them not only survive, but prosper in this landscape of truly international competition.

Time to face the brutal fact. International competition is commoditising goods and services more than ever before in history and whether you like it or not price is increasingly the driver in the decision making process.

Are you globally competitive and chasing down international markets? If not, why not?! There are some great opportunities if you are rigged the right way.

I'd like to help you develop a strategy for your business and would welcome you contacting me.

All for now,

+Brad Skelton 

Is marine cargo insurance essential?

I was talking to a Depth Logistics client yesterday who has asked us to ship a container of parts for her.

As is our standard operating procedure, I asked her whether she had marine insurance cover for the shipment? She told me that they wouldn't worry on this shipment as it wasn't big enough...or in translation to me, not worth enough that if it were lost or damaged there would be a serious financial impact on their company.

To most people it would seem commercially astute to save the small cost of an insurance premium where they believe the risk of loss or damage to their cargo is negligible. Sound logic if it were just the cargo that is at risk but it isn't!

Centuries of maritime law precedents have established an entirely different principle that make it important to have marine transit cover in place on even the seemingly small and low risk shipments. Shipping has numerous uncontrollable risks at sea and is inherently a high risk activity for any business.

Maritime law tends to side with the ship owner whether you like it or not. Most people don't realise that when they ship their cargo on any ship for a particular voyage then at law, they are considered to be in a joint venture for that voyage. What this means for shippers is that should the vessel get into distress, suffer a mishap, be forced to jettison cargo to save the ship, be lost at sea or hypothetically require salvage to remove it from a shipping channel then each shipper with cargo on board proportionately shares in these costs. That is the spirit of a joint venture after all and maritime law precedents support this regardless of fault or blame.

Therefore cargo even with a low value can end up costing the shipper a literal fortune for their share of costs incurred to deal with the mishap properly. In my career there was one occasion where a client had a single container on a ship that ran aground in a shipping channel. The vessel had to be cut up at sea and removed from the channel as it presented a risk to other vessels and the environment. My client got a bill in the region of $400,000 for their share of costs even though their cargo was worth only a fraction of this. Had they not taken been prudent enough to ask me to take out marine insurance for them this would have been a ruinous event for their company.

So you should ALWAYS ALWAYS ALWAYS...(have I shouted it enough?) ALWAYS have marine cargo insurance. It is false economy not to.

Feel free to contact me or my team if you would like some free advice on this critical aspect of shipping.

All for now,

+Brad Skelton