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Supply Chain Weekly Wrap-Up 11/25/2022-12/02/2022

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Qatar failing to keep its climate pledge for the 2022 World Cup

Before the start of the 2022 FIFA World Cup, Qatar pledged to make this the first carbon neutral event in the tournament’s history. Unfortunately, this has not been the case with the largest contributor of CO2 emissions being travel. The organizers expected, as a whole the World Cup would produce a figure of 3.6 million tons of carbon dioxide, travel was forecasted to account for 52%.

On the other hand, independent researchers say the figure was outrageously underestimated. Greenly (a carbon accounting firm) CEO Alexis Normand believes the final count will be 70% higher at a minimum, in addition to say the 2022 tournament will be “the most emissive ever.” Qatar is a small country, comparatively it is slightly smaller in area than the U.S. state of Connecticut. It does not have the infrastructure to house the expected 1.2 million fans. Qatar only had 30,000 hotel rooms, 80% of which were booked in advance by FIFA for the football teams, officials and sponsors. This meant fans had to find accommodation in neighboring countries such as Bahrain, The UAE and Saudi Arabia.

A product of this, is that a shuttle flight service was set up to take fans to the games with an average of 500 flights per day in and out of Doha, Qatar’s capital. This has seen neighboring Dubai in the UAE operate nearly 120 flights per day. It’s estimated by Greenly that the shuttle flights have resulted in between 6,000 and 8,000 tons of carbon dioxide (CO2) emissions every day since the tournament started.

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Nestlé to invest $1.86B in Saudi Arabia’s food business

Nestlé plans to invest in Saudi Arabia’s food business and signed a deal with the kingdom’s investment ministry. The food and beverage manufacturer is putting in $1.86 billion over the next 10 years. The ministry signed the memorandum of understanding (MOU) agreement this week, as they seek foreign investors in the effort to diversify the nation’s economy and move away from being a mono economy.

It stated that Nestlé will be setting up a factory as well as a research and development (R&D) center for food industries. This will create 3,500 new jobs through the construction and when the center is in operation. The manufacturing plant is expected to open in 2025 and be the main hub to export Nestlé products to the Middle East and North Africa.

Once the factory is in operation, the company will build a regional facility with a research and development program next. Nestlé hopes this could be the start of international investment in Saudi Arabia and in turn attract other corporations and start-ups to the area. The longer-term goal is the growth of the food and beverage market in Saudi Arabia first and then expand its influence throughout the Arab world. For Saudi Arabia this partnership can lessen their dependence on oil.

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A new route for Lufthansa Cargo to cut delivery times

Lufthansa Cargo is set to create a weekly route from northern Norway to speed up shipments for salmon farmers. They launched an A321F connection from Frankfurt, Germany to Evenes in Norway in partnership with salmon exporters Nordlaks and Salmosped.

This new route is expected to slash delivery times to less than 24 hours compared to four to six days, according to Ashwin Bhat the chief commercial officer at Lufthansa Cargo. Bhat went on to say, “Thanks to the flexibility of the A321 freighter, we are able to build a customized supply chain solution for individual customers.”  The A321F has a carrying capacity of 27 tons. The aircraft will also be customized for faster loading and unloading to optimize the supply chain process.

This isn’t the first partnership of this type as a competitor of Lufthansa Cargo, FarCargo, a new air cargo subsidiary of salmon company Bakkafrost, closed a deal with Boeing to purchase a 757-200 aircraft back in August. Their route goes from New Jersey, USA to the Faroe Islands and should provide Lufthansa Cargo with healthy competition.

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