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A vaccine for the Zika virus, transmitted by mosquitoes and possibly linked to severe birth defects in thousands of infants, could be ready for emergency use before year-end, one of its lead developers says. That timetable is well ahead of estimates from U.S. officials.


Canadian scientist Gary Kobinger, part of a consortium working on the vaccine, told Reuters in an interview that the first stage of testing on humans could begin as early as August. If successful, the vaccine could be used during a public health emergency, in October or November. Reuters also reports that while the U.S. has two potential candidates for a Zika vaccine and may begin clinical trials on humans by the end of this year, U.S. officials say there will not be a widely available vaccine for several years.


The Zika virus could infect as many as four million people in the Americas—including the southwest U.S.—the World Health Organization (WHO) said this week. Director-General Margaret Chan told members of the U.N. health agency’s executive board that the “level of alarm is extremely high,” concerning the spread of the disease.


“Last year, the virus was detected in the Americas, where it is now spreading explosively,” Chan said. “As of today, cases have been reported in 23 countries and territories in the region.”


Dr. Anne Schuchat, principal deputy director of the federal Centers for Disease Control and Prevention, said there have been 31 cases of Zika infection in 12 states and the District of Columbia among U.S. citizens who traveled to areas affected by the virus.


“It’s possible, and even likely, that we will see limited outbreaks in the United States,” Dr. Schuchat says.


There is no proven vaccine or treatment for Zika, a close cousin of dengue, which causes mild fever and rash. An estimated 80 percent of infected people have no symptoms. However, most troubling is that there are serious concerns about the dangers pregnant women and their babies face.


In areas where the virus is present, there has been a corresponding “steep increase in the birth of babies with abnormally small heads and in cases of Guillain-Barre syndrome,” Chan from WHO says, CNN reports. Having small heads can cause severe developmental issues and sometimes death. Guillain-Barre is a rare autoimmune disorder that can lead to life-threatening paralysis.


The WHO’s Dr. Bruce Aylward cautions there is no definitive link between Zika and these disorders but he does see a legitimate reason for concern. Dr. Schuchat from the Centers for Disease Control and Prevention says there is a “strong” suggestion they are connected, CNN reports.


Considering the widespread path of the disease’s infection rate and potential complications for pregnant women, it is good to see progress made so quickly on a possible vaccine—even if it will only be available for emergency use in the short term.


“The first thing is to be ready for the worst,” Kobinger, who helped develop a trial vaccine that was successful in fighting Ebola in Guinea, says in the Reuters article. “This vaccine is easy to produce. It could be cranked to very high levels in a really short time.”


Kobinger, the lead scientist on this project from Quebec City's Laval University and head of special pathogens at Canada’s National Microbiology Laboratory in Winnipeg, is working with the University of Pennsylvania, led by scientist David Weiner, Inovio Pharmaceuticals and South Korea’s GeneOne Life Science.


The candidate vaccine Kobinger is working on mimics the virus, triggering the body's immune system, he said.


“When the real thing comes in, the antibodies are there, the immune system is primed and it’s ready to attack right away,” Kobinger says.


Given the serious nature of potential risk for pregnant women and their babies, I am hopeful the Canadian consortium, and other companies, can create an effective Zika virus quickly.

The Panama Canal expansion project is now expected to be finished “around the month of May,” President Juan Carlos Varela said earlier this month in an address to that nation. As the project moves into its final stages, it does make me wonder about other ports’ expansion projects so they too will be able to accommodate increasingly larger ships.


The most work is taking place in Cuba, which, according to its government, is the “key to the Gulf” due to its geographic position. With that in mind, Cuba continues to move forward with a project to transform the northwestern Port of Mariel into the country’s largest port as well as a regional trading hub. The containers terminal being built at Mariel, 28 miles west of Havana, will be an important entry and departure point for merchandise and the heart of the Special Development Zone at the port complex, state television said in a recent report, a Latin American Herald Tribune article reports. The expansion is estimated to cost $900 million, and is financed in part by a $640 million Brazilian loan.


Expansion and renovation of the Port of Santiago de Cuba is also planned. Santiago de Cuba is Cuba’s second largest city, and the port is expected to be the country’s second largest. Thanks to a $100 million (U.S.) line of credit from the Chinese government, construction will begin in the second half of 2016, Juan Carlos Gonzalez, an official at the Cuban Transport Ministry, said earlier this month on Cuban TV, The Jamaica Observer reports.


The expansion work, to be carried out by China Communications Construction Company Ltd., will include building a new pier with high-tech cranes to speed up cargo services, as well as building railways and logistic centers to help connect the port with the rest of the country, according to the Chinese company and the Cuban government.


The Port of Santiago de Cuba’s current maximum capacity is for 25,000-ton ships. However, the expansion includes dredging the bay to accommodate larger ships of up to 55,000 tons, says Leonardo Naranjo, head of Santiago de Cuba port services, the Observer article notes.


Construction and expansion to enable larger ships to visit U.S. ports continues as well. For example, two new, larger cranes are on their way to Port Tampa Bay in Florida. The new cranes are much larger than the ones currently at the port, and will enable larger ships with more capacity to do business in the Bay area, Port Tampa Bay CEO Paul Anderson says in a Florida News 13 article.


“We can be a port where large ships come into Panama through the new canal,” says Anderson in the article. “They can offload to ships which are smaller that can then come to [our] port.”


Then again, it isn’t just construction that’s taking place. The state of Virginia’s port authority recently signed a memorandum of understanding agreement between its Port of Virginia and Cuba’s Port of Mariel to bolster the relationship between the two port authorities.


“Virginia enjoys a uniquely productive economic relationship with Cuba, and this MOU will generate additional opportunities for economic and cultural exchange,” Virginia Governor Terry McAuliffe says in a Richmond Times-Dispatch article.


The agreement “establishes a platform for cooperation and information sharing aimed at developing links between Cuba and Virginia to support waterborne trade and investment, improve customer service, enhance collaboration to achieve improved business practices and increase the level of vessel services available between the two entities,” according to a State of Virginia announcement.


It’s interesting to see how other ports continue to prepare for changes after the Panama Canal expansion is finished, and larger ships move through the canal. What will prove more interesting, however, is the impact on supply chains. Certainly many U.S. ports on the Gulf Coast and Eastern seaboard will see increased business, as will some regional distribution hubs. Will that have an impact on your supply chain?

Although business executives still worry about the impact of direct property loss due to natural catastrophes or fire, their primary concern now is possible business and supply chain interruption from such events. They also say increasing competition in their markets and cyberthreats are critical business risks, according to the results of a new survey.


Indeed, a report, the Allianz Risk Barometer 2016, summarizing the results of the fifth annual survey on corporate risks conducted by specialty insurer Allianz Global Corporate & Specialty (AGCS), notes that business and supply chain interruption (BI) is considered the top risk for businesses globally for the fourth year in a row. The firm surveyed more than 800 risk managers and insurance experts from more than 40 countries, and found that BI was cited as the chief business risk by 38 percent of the respondents. That stands to reason because BI losses for businesses are increasing, typically accounting for a much higher proportion of the overall loss than a decade ago—and often substantially exceeding the direct property loss, AGCS explains in the report.


According to responses, major causes of BI feared most by executives are natural catastrophes, cited by 51 percent of the respondents, followed by fire/explosion, cited by 46 percent of the respondents. Nonetheless, many executives also believe that new “non-physical damage” causes of disruption will increasingly be driven by cyberattacks, technical failure or geo-political instability.


Interestingly, slightly more than a third of the responses (34 percent) cited market developments such as intensified competition or market volatility/stagnation as one of the three most important business risks in 2016, which moved the category into second place. Market developments are a particular concern in engineering, financial services, manufacturing, marine and shipping, pharmaceutical and transportation industries, the report notes.


Another risk of increasing concern for businesses globally is cyber incidents, which includes cybercrime or data breaches, as well as technical IT failures. This year, 28 percent of the survey’s respondents cited the risk of cyber incidents as one of their top three business risks. What’s interesting is that while cyber incidents are now seen as the third largest business risk by survey respondents, last year the respondents had the risk ranked in fifth place. Even more telling, five years ago, cyber incidents was identified as a risk by just one percent of the respondents. Loss of reputation (69 percent) is the main cause of economic loss for businesses after a cyber incident, according to responses, followed by business interruption and liability claims after a data breach.


Furthermore, executives are increasingly concerned about the growing sophistication of cyberattacks, according to the Allianz Risk Barometer. Since this type of attack is increasing both in frequency and severity, companies should not underestimate the impact of an operational failure in today’s highly digital and connected industries, the report notes.


“The corporate risk landscape is changing as many industrial sectors are undergoing a fundamental transformation,” explains AGCS CEO Chris Fischer Hirs. “New technologies, increasing digitalization and the ‘Internet of Things’ are changing customer behavior, industrial operations and business models, and bringing a wealth of opportunities, but also raising awareness of the need for an enterprise-wide response to new challenges.”


The problem is that while companies are aware of and test for internal risks, many fail to assess risk across their supply chain. Often, only Tier One suppliers are considered, and little thought is given to those further downstream. Assessing every supplier across every tier may not be necessary, but if companies identify and concentrate on higher-risk suppliers, they may become more effective and confident in risk mitigation.


What I would like to know though, is if you agree with the results of the Allianz survey. Do you consider the top three business risks to be business interruption, sudden market developments and cyberthreats?

It usually is a bad sign when antimicrobial resistance—drug-resistant infection—is in the news. Antimicrobial resistance is the ability of microbes to resist the effects of drugs so the germs aren’t killed and their growth isn’t stopped. Last week, however, there was good news: 85 companies and nine industry associations in 18 different countries from across the pharmaceutical, diagnostics and biotechnology industries jointly called on governments and industry to work in parallel to take comprehensive action against drug-resistant infections.


At the World Economic Forum in Davos, Switzerland, they presented the “Declaration by the Pharmaceutical, Biotechnology and Diagnostics Industries on Combating Antimicrobial Resistance.” The Declaration—signed by global leaders including AstraZeneca, Merck, GlaxoSmithKline, Johnson & Johnson, Novartis, Pfizer and Sanofi—details how governments and industry need to work together to, as they say, support sustained investment in the new products needed to beat the challenges of rising drug resistance.


Specifically, signatory companies call on governments to work with them to develop new and alternative market structures that provide more dependable and sustainable market models for antibiotics, and to commit the funds needed to implement them. These mechanisms, the signees explain, are needed to provide appropriate incentives, coupled with safeguards to support antibiotic conservation, for companies to invest in R&D to overcome the formidable technical and scientific challenges of antibiotic discovery and development. These include mechanisms to ensure that, where appropriate, the pricing of antibiotics more adequately reflects the benefits they bring, according to the Declaration. It would also require novel payment models that reduce the link between the profitability of an antibiotic and the volume sold. An integral part of these models is a reduced need for promotional activity by companies.


The importance of antibiotic development and a need to fight antibiotic-resistant bacteria has been an international problem for some time. The Center for Disease Control estimates drug-resistant bacteria accounts for two million illnesses and approximately 23,000 deaths in the U.S. each year. The situation is even worse in other countries, particularly in developing countries.


Last year, the White House issued a National Action Plan for Combatting Antibiotic Resistant Bacteria, which explained the steps the government should take to prevent drug resistant bacteria in the U.S. Although its primary purpose is to guide activities by the U.S. Government, the National Action Plan is also designed to guide action by public health, healthcare and veterinary partners in a “common effort to address urgent and serious drug-resistant threats that affect people in the U.S. and around the world,” according to a White House statement.


While that plan moves in the right direction, what’s interesting about the Declaration by the Pharmaceutical, Biotechnology and Diagnostics Industries on Combating Antimicrobial Resistance is not only that so many companies are in agreement, but that they also come from so many countries. Indeed, Lord Jim O’Neill, chairman of the Review on Antimicrobial Resistance (AMR), says the Declaration is a major step forward in establishing a global response to the challenges of drug resistance because such a wide range of companies agree on a common set of principles and commitments.


“This is a level of consensus that we have not previously seen from the industry on this topic,” O’Neill says.


What’s also encouraging is the companies’ willingness to work with governments to develop alternative market structures to enable sustainable investment. “That’s necessary if we are to overcome the formidable technical and scientific challenges of antibiotic discovery and development,” Pascal Soriot, chief executive of AstraZeneca plc, says.


I look forward to seeing how industry and governments can collaboratively address the challenge, but what about you? Whether you are in the pharmaceutical or biotech industry or not, what are your thoughts on stopping antimicrobial resistance?

Melting sea ice in the Arctic has increased shipping traffic and could open the region to more shipping, mining and oil drilling—increasing the potential for ships to be stuck in ice that still covers the region much of the year. To be prepared, the U.S. Coast Guard recently announced plans to acquire two new heavy icebreakers that could cost $1 billion each.


To be sure, increased mining and oil drilling will call for additional icebreakers, but so will the use of new shipping lanes. For example, Chinese cargo-shipper COSCO has announced plans to launch regular Asia-to-Europe sailings through the Arctic Ocean, which will significantly reduce travel time and fuel cost. Other countries, including Japan, Singapore and South Korea, reportedly also are preparing for future trans-Arctic shipping.


“Enormous expenditures on fuel, canal transit, security guard, personnel and vessel wear and tear can be saved,” Chinese state-run Xinhua news agency said, a Japan Times article reported last fall. “Cost-friendly routes will be extremely significant to COSCO Group in the current difficulties of (the) global maritime industry.”


The problem is that the U.S. Coast Guard’s operational polar icebreaking fleet currently includes one 399-foot heavy icebreaker, Coast Guard Cutter Polar Star, and one 420-foot medium icebreaker, Coast Guard Cutter Healy. These cutters are designed for open-water icebreaking and feature reinforced hulls, specially angled bows and a system that allows for rapid shifting of ballast to use the cutters’ weight to provide leverage when ramming thick ice, the Coast Guard explains. The Coast Guard also has a second heavy icebreaker, Polar Sea, which is inactive.


President Barack Obama in September called for the United States to accelerate plans to buy at least one new heavy-duty icebreaker by 2020 after a visit to Alaska. That plan accelerates the timeline from a previously planned acquisition by 2022. The icebreaker’s ability to provide robust, polar-icebreaking capability will ensure “the U.S. can operate year-round in the Arctic Ocean,” the White House said.


As has been widely reported, while speaking at a recent event hosted by the Center for Strategic and International Studies in Washington, Coast Guard Commandant Admiral Paul Zukunft said a recent study concluded that the Coast Guard needed three heavy and three medium-sized icebreakers, but the current floor was at least two heavy icebreakers so one vessel could free the other if it became trapped in ice. It would also be too costly to buy and build just one icebreaker, he said.


With that in mind, Zukunft announced that the Coast Guard has plans to get information from companies about their ability to build and develop icebreakers which would be in use for 40 years, as well as to explore options such as leasing. He further noted that the Coast Guard has not finalized an acquisition strategy, but it hopes to release a draft request for proposals in the first quarter of fiscal 2017, and award a contract in the last quarter of fiscal 2018 or fiscal 2019.


Huntington Ingalls Industries, which built the newest U.S. icebreaker and delivered it in 1999, said it was “absolutely interested” in building icebreakers for the U.S. Coast Guard, Reuters reports. General Dynamics, another large U.S. military shipbuilder, has also expressed interest in the program, as have other shipyards, according to the Coast Guard.


What are your thoughts on shipping through the Arctic Ocean? Would use of these new shipping lanes have an impact on your supply chain?

Although a growing number of companies are increasing IT security to address cyberthreats, it appears considerably more needs to be done to safeguard industrial systems, such as those used in power plants and refineries, as well as factories. Indeed, a U.S. government cybersecurity official warned last week that, over the past year, authorities have seen an increase in cyberattacks that penetrate industrial control system networks, which are vulnerable because they are exposed to the Internet.


“We see more and more [cyberattacks] that are gaining access to that control system layer,” Marty Edwards, who runs the Department of Homeland Security’s Industrial Control Systems Cyber Emergency Response Team, or ICS-CERT, said at the S4 supervisory control and data acquisition (SCADA) and industrial control system (ICS) security conference, a Reuters story reports. ICS-CERT helps U.S. firms investigate suspected cyberattacks on industrial control systems as well as corporate networks.


The U.S. government has in the past previously accused China and Russia of cyberattacks. Furthermore, in 2013, the U.S. government also accused Iran of orchestrating a number of cyberattacks against U.S. energy companies, which officials described as “worrying.” However, interest in critical infrastructure security has certainly surged since Ukraine authorities recently blamed a power outage on a cyberattack from Russia—which would make it the first known power outage caused by a cyberattack. Experts attending the S4 conference of some 300 critical infrastructure security specialists said the incident has caused U.S. firms to question whether their systems are vulnerable to similar incidents.


What’s troublesome is that industrial operations leverage SCADA systems to control remote equipment and collect data on that equipment’s performance. Not only are attacks against SCADA systems on the rise, they tend to be political in nature since they target operational capabilities within power plants, factories and refineries.


Edwards said he believed the increase in attacks was mainly because more control systems are directly connected to the Internet but security is weak. “I am very dismayed at the accessibility of some of these networks... they are just hanging right off the tubes,” he said in an on-stage interview with conference organizer Dale Peterson, Reuters reports.


None of this is much of a surprise, though. Last year, Dell released its 2015 Dell Security Annual Threat Report, which compiles research from the company’s Global Response Intelligence Defense (GRID) network and telemetry data from Dell SonicWALL network traffic, to identify emerging threats. According to Dell’s research, cyberattacks against SCADA systems more than doubled from 2013 to 2014.


“Everyone knows the threats are real and the consequences are dire, so we can no longer blame lack of awareness for the attacks that succeed,” said Patrick Sweeney, executive director, Dell Security. “Hacks and attacks continue to occur, not because companies aren’t taking security measures, but because they aren’t taking the right ones.”


What’s also interesting that, according to Dell’s report, the majority of the cyberattacks against SCADA solutions took place in Finland, the United Kingdom and the U.S. It’s believed that a likely reason is because SCADA systems are more common in these countries and they are more likely to be connected to the Internet than systems in other countries.


“Since companies are only required to report data breaches that involve personal or payment information, SCADA attacks often go unreported,” said Sweeney. “This lack of information sharing combined with an aging industrial machinery infrastructure presents huge security challenges that will to continue to grow in the coming months and years.”


Based on the recent data coming from the Department of Homeland Security, it seems not much has changed. Considering not only the importance of power plants and refineries, but also their vulnerability, there is much work that needs to be done.


What are your thoughts on the growing number of cyberattacks against industrial control systems?

In 2015, reshoring of manufacturing activities to the U.S. failed to keep up with offshoring, for the fourth consecutive year, according to the A.T. Kearney U.S. Reshoring Index. The index dropped to –115, down from –30 in 2014, and it represents the largest year-over-year decrease in the past 10 years, Patrick Van den Bossche and Pramod Gupta, both partners at global management consulting firm A.T. Kearney and report co-authors, write.


"The reshoring phenomenon, once viewed by many as the leading edge of a decisive shift in global manufacturing, may actually have been a one-off aberration,” Van den Bossche and Gupta write. “Indeed, the 2015 data confirms that offshoring seems only to be gathering steam, while the U.S. reshoring train that so many predicted has yet to leave the station."


Industries vulnerable to rising labor costs in China have been successfully relocating to other Asian countries, rather than returning to the U.S., according to Van den Bossche and Gupta’s research. Furthermore, those companies have done so without incurring significantly higher supply chain costs, despite the weaker infrastructure and supporting ecosystems of these new low-labor-cost destinations, the authors continue. The recent increase of nearshoring to Mexico also seems to indicate that, even if U.S. companies consider leaving Asia, executives have some reservations about reshoring.


There is good news for U.S. manufacturing workers in the report. Although reshoring of manufacturing by U.S. companies is on the decline, non-U.S. companies, including Chinese companies, increasingly invest in establishing or expanding their manufacturing footprint in the U.S., according to the authors. That’s because the U.S. consumer market, the stable political and economic environment, and the benefit of tapping into American engineering skills and manufacturing know-how are main draws, Van den Bossche and Gupta explain.


There are, of course, countering perspectives. For instance, last month, Boston Consulting Group released a report noting that 31 percent of manufacturers planning to add production capacity over the next five years for goods consumed in the U.S. will add that capacity in the U.S., while just 20 percent of the companies planning to add capacity will do so in China. Furthermore, the number of executives saying their companies are actively reshoring production increased by 9 percent since 2014, and by about 250 percent since 2012. This suggests that companies which were considering reshoring in the past three years are now taking action, the BCG report explains.


“These findings underscore how significantly U.S. attitudes toward manufacturing in America seem to have swung in just a few years,” says Harold L. Sirkin, a BCG senior partner and a coauthor of the research. “The results offer the latest evidence that a revival of American manufacturing is underway.”


After seeing the A.T. Kearney Index, Harry C. Moser, founder and president of the Reshoring Initiative, said a database maintained by his organization shows a smaller 40 percent reduction in reshoring activity rather than the 70 percent drop cited in the A.T. Kearney findings, but adds that “reshoring is still at about twice the 2011 level.” He further argues that the A.T. Kearney Index does not actually measure reshoring but rather the trend in imports. He also adds that since “the U.S. has one of the world’s fastest growing economies now, it tends to import more.”


In the end, it took many companies years to decide to offshore, and—if they do reshore—it may take years for such a decision to be made. However, considering rising labor costs around the world, quality control concerns, and potentially long shipping times, a case can be made for reshoring—although it still may not be best for all.


What are your thoughts on reshoring? If your company has offshored operations, does it have a reshoring strategy? What about your key suppliers?

Recent news from research firms as well as automotive companies shows that the companies listen to consumers, and are quickly moving to meet demands for autonomous and connected cars. They do, however, also realize limitations, and are forming partnerships to deliver these new capabilities.


KPMG International recently surveyed 800 C-level global auto executives, and 38 percent of them said autonomous vehicles are an “extremely important” trend in the industry. What’s remarkable is that in the firm’s Global Automotive Executive Survey last year, only three percent of the respondents said such vehicles were extremely important. Furthermore, 50 percent of global execs said connected car technology is extremely important, compared with just eight percent of the executives last year. The belief is even stronger among U.S. automotive executives: 46 percent of the U.S. respondents say autonomous vehicles are extremely important and 58 percent of them say connected cars technology is extremely important.


“New entrants, from technology giants to startups, are accelerating the pace of innovation, particularly in the area of connected and autonomous cars,” says Gary Silberg, national automotive leader for KPMG in the U.S. “Most of the traditional automotive players have been slow to recognize the power of this trend, but they’re catching on now.”


I was also interested to recentlysee another report, which found that automakers are heavily investing in autonomous cars—although it also notes that driverless-car development will ultimately require alliances among automakers and technology companies. The report, by the Intellectual Property and Science division of Thomson Reuters, is based on a detailed analysis of patent filings by automakers and tech companies for autonomous-car technology.


“Automakers aren’t as good as technology companies in tooting their own horns,” Tony Trippe, principal author of the report, told Reuters in an interview. “But when you look at the patent data, the automakers are all over this.”


The report explains that Toyota is, by far, the global leader in the number of self-driving car patents, with more than 1,400 patents on autonomous-driving devices. That’s more than twice as many patents as any other company, the Reuters article reports. Also leading the way in number of patents are Robert Bosch, Denso, Hyundai and General Motors. Surprisingly, the tech company with the most autonomous-driving patents, Alphabet Inc.’s Google, ranks 26th on the list.


It’s important to note, however, that the sheer number of patents doesn’t necessarily equate to leadership in developing self-driving cars, Trippe says in the article. Non-U.S. companies tend to be more aggressive in filing patent applications than American companies. The quality of patents is also important because not all patents have equal importance.


The report also notes that it’s crucial for automakers to form agreements with technology companies to develop self-driving cars. For instance, Tesla and Apple would make logical partners because they have complementary, not duplicative patents. Tesla’s strength is propulsion technology, notably batteries, while Apple’s is in electronic navigation and communication systems, Trippe says in the article.


Automakers are also forming partnerships with tech firms to develop new capabilities for connected cars. Earlier this week, for instance, Ford announced it’s forming an alliance with Amazon to enable customers to connect their cars into “smart home” networks.


The partnership, unveiled at the Consumer Electronics Show in Las Vegas, will enable Ford’s connected car technology hub—known as Sync—to integrate with Amazon’s Echo smart home hub. Ford says some 15 million cars on the road use Sync, and it expects the figure to grow to 43 million by 2020.


Partnerships and alliances will help speed development of both self-driving and connected cars since both automotive and technology companies can leverage the capabilities and products of the other company. It will be interesting though to see how such partnerships are formed as well as their impact on the industry and supply chains.