Valentine’s Day for most people means romantic dates with flowers, chocolates and meaningful cards. While the biggest problem on February 14 is pleasing your loved one, logistics managers and suppliers start stressing much earlier to provide you with all of the gift options you need.
Roses are not grown at your florist’s home garden and heart-shaped boxes don’t appear in the store by accident. Before Valentine’s Day, all of Valentine’s gifts travel a long and well-planned out journey thanks to logistics.
Valentine’s Day is one of the biggest holidays in the logistics industry. Just in the U.S. alone, nearly 60% of the population celebrates it. Moreover, considering the emotional meaning of the holiday, failing to deliver gifts on-time is unacceptable. And that’s why logistics makes the show go on by supplying retailers and flower shops.
However, flowers are not the most popular surprise among Valentine’s present buyers. According to the National Retail Federation stats, the top gift option is candy (55%), followed by cards (45.9%) and flowers (35.6%).
Logistics is not just about importing goods from one country to another. After chocolates or flowers are imported, they are forwarded to the importer’s distribution center, where all the items are separated before departing to the retailer’s warehouse. At the retailer’s facility, hundreds of people unpack the boxes, label them, pack them again, and move them to stores. Finally, products are shelved and the gifts are ready for selling. Quite a long journey, right?
Moreover, chocolates and flowers are perishable and require special handling and freeze protection. Chocolate is especially temperature sensitive and can survive neither excess heat nor cold, otherwise, it will spoil and disappoint many people. Special conditions make Valentine’s Day even more complex, yet the delivery deadlines are still met thanks to the logistics and retail industry.
2018 has brought some major changes to the logistics industry. We can expect to see a continued focus on technology and innovations, which will bring the most significant changes in the upcoming year.
The Influence of Big Data Will Grow
Companies try to incorporate IT resources into their supply chain to increase productivity, efficiency, and safety, and this trend will continue to grow in 2019. Technology allows small and midsize businesses to compete with larger players and take their performance to the next level. Apart from blockchain, big data is estimated to play the most significant role in improving logistics and supply chain management. The deployment of big data and data-centered innovations like IoT has already gained significant popularity within the industry. Data analysis and proper interpretation enable logistics managers to figure out gaps in the supply chain and implement working strategies to boost the company’s performance. Big data deployment is a huge step towards reaching freight visibility and understanding how to eliminate waste from the supply chain. In combination with IoT, it allows companies to track and analyze freight conditions, truck characteristics and other important measures that impact transportation. The experts forecast almost a three times growth in connected devices usage from 2018 and estimate it to reach 75 billion. This means the Internet of Things and big data will become game changers in the logistics industry in 2019. Apart from big data and IoT, other technology like blockchain and AI will also invade the transportation industry.
The Driver Shortage and Capacity C May Become a Permanent Problem
In 2018, there has been a lot of talk about the capacity crunch and issue of the driver shortage. There’s no wonder that shortage problem is still in effect as the demand for drivers increases and the core of trucking workforce plans to retire in 10-15 years. According to the World Bank of Data, the United States’ import and export traffic almost doubled between the years 2000 and 2016, but the number of truck drivers didn’t. As the global economy is growing faster, the problem of the shortage will become permanent despite the fact that solutions are coming to help. Driverless trucks and new technology for route optimization will roll into 2019 to eliminate the pain from the capacity crunch and shortage.
Improved Payment Systems and Cybersecurity
In the new age of digitalization, logistics companies need to provide more flexibility and transparency into payment systems. Blockchain technology and the usage of cryptocurrency lets companies simplify the process of sending and receiving payments and provide protection for online transactions. Increased attention to cybersecurity is another predicted trend in the industry for 2019. As digitalization continues to affect various industries and businesses, it is especially important for logistics and transportation companies to steer towards increased safety of their databases and websites. The devastating ransomware in Maersk in 2017 has shown that even industry giants are in jeopardy of cyber attacks.
Consolidation Among Companies
Competition between companies becomes fiercer every year. In 2018, many shipping giants have joined forces and formed the alliances, and the rate of consolidation will be even higher in throughout 2019. The trend of consolidation is especially popular among ocean shipping companies. For instance, A.P. Moller Maersk, CMA CGM, Hapag-Lloyd, MSC and Ocean Network Express (ONE) recently confirmed their plan to set a global association. The main point of merging is to balance prices on the market and let smaller businesses operate.
To sum it up, 2019 will be a year full of technology and optimization. Improved supply chain and inventory management, data analysis, technology, better freight visibility and a focus on cybersecurity will be the main game changers in the logistics industry.
2018 is coming to the end, and we are taking the time to look back on the most relevant news and notable events that took place throughout the year. 2018 was a busy year and has shaped the logistics and supply chain industry in many ways.
This year has proved that AI, IoT, blockchain and digitalization will only keep expanding and changing the way logistics is done. One of the most interesting topics in supply chain management was the blockchain, causing numerous discussions on its impact on industry. In fact, since the big players have switched to blockchain-enabled supply chain management, it is safe to say blockchain will stay here for a long, long time. The primary consolidation of logistics companies that utilize the blockchain is centered in the Blockchain in Transport Alliance. The organization was started in August 2017 and quickly became the main conglomerate of progressive logistics and supply chain companies. Such industry giants like UPS, Penske, FedEx, Uber Freight and Evans are already the members of the tech community.
The same is going on with AI and the Internet of Things, and this means that technology is not the future – it is the present. Industry players like DHL actively develop and implement AI innovations into their company’s performance, from mobile apps to tracking technologies that collect and analyze data.
Ultimately, 2018 has proved that digitalization is not a replacement of humans by robots and technology, but rather a big step towards progress and increase of supply chain efficiency.
Driver Shortage and Capacity
The issues of the tight truck capacity and driver shortage have been on everyone’s mind for a long time. In 2018, economic growth and intense developments in the retail industry have put even more pressure on logistics managers. However, the dilemma is slowly unraveling itself. According to the data by the Bureau of Economic Analysis, the gross of domestic product rate increased by 2.2% in the first quarter of 2018 and added in 4.2% in the second quarter. The high pressure and driver shortage caused carriers to revise drivers’ salary, and it resulted in remarkable growth. According to the American Trucking Association, the average salary for the truck driver has risen to $53,000, which is $7,000 (15%) more from the last survey in 2013. As for private fleet truckers, the pay rise reached 18%. In a nutshell, 2018 has shown that modern logistics solutions are able to deal with global problems in the industry.
In April, the grace period for carriers to switch to electronic logging devices (ELDs) has ended. As 2018 is coming to the end, we can finally make some conclusions about how the new rule influenced the trucking industry. The new technology definitely created more sustainability and visibility into data, but caused many problems among the trucking community. A survey by Cortex stated that 33% of carriers admitted difficulties with retaining drivers due to the strict hours of service policy. Nevertheless, experts believe the innovation is going to strengthen the usage of data and optimize the industry in general.
The talk of autonomous vehicles was very prominent in 2018. At the very start of 2018, the US Department of Transportation formed a policy to remove barriers of autonomous vehicles deployment. Now it’s safe to say one thing: autonomous vehicles will keep rolling into the industry, but they certainly won’t replace truck drivers. Self-driven trucks would rather be the start of the new age of logistics, and will organically fit and improve the existing trucking environment.
2018 was full of many significant events. Let’s go back to our previous monthly report blogs and outtake the most important events from the logistics industry that occurred the latest year:
The United States and Mexico reached an agreement on key NAFTA issues including auto rules and access to the Mexican energy sector
Rolls Royce collaborated with Intel for a self-driven vessels project
Uber announced “Powerloop” and plans on drone delivery
To sum it up, 2018 was a big year for the logistics industry, holding victories, losses, and lots of transformation. Logistics and supply chain management will continue to develop throughout 2019 to change the industry.
Almost 90 percent of goods and food are shipped to us on overseas journeys. Ocean freight shipping lets manufacturers and suppliers move an enormous amount of freight to opposite parts of the world.
10 Interesting Facts about Ocean Freight Shipping
All of the goods on an ocean shipment are moved in containers that usually are 20 – 40 feet tall in size.
Sea shipping is not the fastest option but can be one of the cheapest options for transporting large amounts of goods. For example, you will pay almost the same cost for 200 kg shipment and 2000 kg one.
As truck shipment types differ, ocean delivery options also differ and provide shippers with options. There are two main kinds of container fulfillment: full container load (FCL), which means your freight takes all the container capacity, and less-than-container load (LCL), which suggests partial load and therefore partial payment.
The largest ship can transfer up to 18,000 containers, and to put that into perspective, it would equal 745 million bananas. The ship carrying that number of containers could give every single European a banana, and there would still be some leftover.
Ocean shipping is one of the most sustainable types of transportation. A vessel from China to France emits less gas than a truck going from Houston to Oklahoma City.
Pirates are a real danger. On average, there are two ships stolen by pirates every day. Somalian pirates’ attacks occur more often than violence in South Africa, making there an extremely high level of crime.
98 percent of seafarers are male. One-third of them are Filipinos.
There are nearly 55,000 commercial ships covering the water surface.
The biggest fleet owners are Germany, Japan, and Greece. The industry is rather private and keeps information on the inside of associations. The official association of ship owners in Greece, for instance, does not even disclose the number of members in the organization.
Surprisingly, almost 33 percent of freight ships have no means of communication with the outer world while in the ocean.
Ocean shipping is one of the oldest and most convenient methods to move goods across the world. Despite its low cost, there is a lot of work to do when arranging pick up from the port or to the port for delivery.
The oil and gas supply chain is an irreplaceable part of people’s lives: they warm houses and offices, fuel cars and other vehicles and make the world go around. It is incredible how many processes depend on energy supplies. The logistics behind the oil and gas supply chain has many moving parts. Logistics providers help companies maintain the efficiency of their supply chains to help keep projects and shipments in order. The oil and gas industry can be complicated when it comes to logistics due to shipping items like bulky equipment, hazardous supplies, and strict delivery deadlines. Although it can be complicated, there are many ways to optimize an oil and gas supply chain.
How to optimize oil and gas supply chain?
Due to constant changes in the transportation and logistics industry, it is even more important to be up-to-date with shifts and adjustments during energy service shipments. Here are some strategies that will help optimize your business:
The first step in solving a problem is to define it. Run through all of your operations and use an expert help detect where you could possibly reduce costs, eliminate waste and increase productivity. Further investigation will give you a clear image of your company’s current situation, letting you make profitable decisions.
Use advanced technologies
Staying up to date with new technology innovations is essential for the progress of the oil and gas supply chain. Supply chain technology, such as transportation management systems (TMS) is an online system for companies to use for data storage and analysis. A TMS allows companies to save time, money and gain visibility into their supply chain processes. A robust TMS lets you see details and get insights about any part of the shipment. It is an excellent solution for oil and gas companies to use when managing their shipments and moving important loads from one location to the next.
The energy services industry is a very fast-paced environment and experiences new shipment modifications all the time. Government regulations, including the import/export laws, drilling policies, and environmental regulations are vital things to track to renew offers for your customers and to function correctly.
Use effective communication
Getting feedback from your customers, suppliers and business partners will help you understand which parts of your operations are working well and which ones are going poorly. Be as transparent as possible on your shipments needs to ensure all involved parties understand goals clearly and work towards reaching them.
Working with experts and outsourcing energy logistics services is a smart decision for the companies who want to focus on their core goals and keep their oil and gas supply chain running smoothly. We understand how critical time and precision is for oil and gas transportation, and offer customers various solutions for problems of any level of complexity.
There are many new technologies affecting the logistics industry, and one of the most promising among new technology is blockchain. Blockchain successfully changes many different industries that have nothing to do with cryptocurrency. Technology like blockchain is believed to dramatically change the company’s supply chains and save billions of costs on operations.
What is blockchain?
The blockchain is a digital register with advanced encryption mechanisms. It lets companies track and record transactions and securely store data, making it almost impossible to steal, delete or change information. Also, every transaction or record is a single block. After verification, it becomes a part of the sequence.
This technology allows companies to keep every transaction, documentation and any manipulation made on an object in one place. This allows companies to have complete transparency on every single action or data unit. Also, it assures protection from ransomware and cyber attacks.
How can blockchain be used for supply chain needs?
A supply chain is a very complex structure with hundreds of transactions and modes of communication involved. Verifying and maintaining information that flows through the supply chain can be time-consuming and expensive. Blockchain technology allows companies to immediately verify and lock each data unit. This supplies robust protection against data stealing, deleting or unwanted modifications. In a nutshell, blockchain provides transparency on every transaction. Additionally, it allows managing the data in a systemized and easily accessible way. Any manufacturer, auditor or supplier can access required data or payment in no time, which makes operations processes much faster and more efficient. The difference in supply chain performance could potentially be incredible after the blockchain contribution. All because it drastically reduces extra interactions, increases data security and authenticity, apart from significant time and cost savings.
How it affects the logistics industry?
Apart from supply chain needs, blockchain can be utilized for many other needs of the logistics industry. Temperature-sensitive shipments often suffer from delays and temperature deviations, and lots of them may become damaged during transit. It happens because of poor temperature tracking, customs delays and more. Blockchain can help solve these problems. It allows fast access to any data and transaction on a certain shipment. When combined with connected devices (Internet of Things), the data from trackers is transmitted to the blockchain, where it is stored and used for analysis.
In conclusion, blockchain is one of the most up-and-coming innovations to grow, develop and enhance the performance of the logistics industry. Companies that invest in such technologies would certainly be ahead of the competitors and will save a significant amount of money.
Today, brand image plays a noble role in a company’s presence. So, it is crucial for companies to move from the traditional corporate model to a sustainability-focused business model. As companies aim to be more customer-oriented, there is a need to respond to your audience’s wants and needs. Customers become more interested not only in your product, but in your company’s philosophy, values, and concerns. It is essential for companies to help the surrounding environment and put in an effort to help combat the world’s global issues in any way that they can. One of the industries main concerns is green logistics – a trend that became extremely widespread in recent time.
What is green logistics?
Green logistics includes a company’s effort of lowering emissions, implementing more sustainable operations processes and reducing environmental pollution. Also, there is a variety of solutions that companies can apply to be greener, from simple to very advanced, progressive actions. The environmental issues in the world are only getting worse. So, it is now more important than ever for companies to get involved.
How green logistics can reduce your supply chain costs?
An eco-friendly strategy can allow a company to remain focused on bringing in profit while helping the environment. A sustainability approach can help companies have better brand representation and fewer expenses. Integrating current processes and strategies to be more “green” and environmentally friendly can help companies increase efficiency and possibly decrease costs. A great example of how companies can join green initiatives is our partnership with SmartWay Transport program.
Pool distribution helps reduce the wasted use of trucks and helps save costs. Pooling means consolidation of shipments from a single shipper that is collected altogether and then dropped off at one point (normally at the shipper’s distribution center). Benefits of using such an approach are evident. Gathering shipments with the same route let you save costs on fuel. Additionally, it can help reduce human labor expenses, and efficiently use truck capacity.
Optimize packaging materials
One of the best ways to make shipments more “eco-friendly” is picking recyclable packaging materials. However, the point is not only in the package itself but in the way you use it. Optimizing the way shipments are packed is a great consideration not only for the environment but for a company’s budget as well.
Implementing energy management systems
An energy management system is a set of tools for tracking, control, and optimization of the generation and use of energy. Such solutions work best for warehouses and can significantly reduce the expenses on transmission systems performance.
Efficient use of warehouse spaces
People often associate pollution and inefficient use of resources with trucks, but things such as warehouse space management play an influential role in environmental awareness as well. The point of optimizing warehouses is using less capacity, packaging materials, and maintenance resources for the same amount of assets. The benefits of optimizing warehouses help companies save costs on electricity, create more space for new items, and have better management.
Whether you are taking small steps forward a greener policy or planning major changes, green logistics is a successful decision. Green logistics work to improve your brand ideology and eliminate waste from your companies supply chain.
The holiday season remains one of the busiest times for retailers, and each year, the volume of shipments continues to grow. E-commerce continues to make advancements for supply chain needs and service requirements, making it harder to compete with big companies like Amazon. This year, e-commerce sales are estimated to obtain 52 percent of total orders made during the season.
Here are some key trends to look for this year during the holiday season:
Optimizing mobile applications
Almost all consumers have smart phones with access to mobile applications. It is essential to provide your customer with a convenient way to use your mobile application so that they can easily carry out their supply chain function or make purchases online. As more people are shopping on their mobile device, your mobile version should be as polished as the website. If customers can make purchases through your app, make sure that the checkout process runs smoothly and that the site will handle technical obstacles during the peak days of sellouts.
Offer free shipping
Many retailers are offering free shipping to customers during the holiday season to produce more sales and customer loyalty. When shopping for the holidays, many customers are more likely to shop at places that offer free shipping deals instead of companies that do not. The companies that are offering free shipping should prepare for the holiday season in advance and have all of their shipments in before the big shopping days arrive to ensure they have enough product for the volume of orders they will be receiving.
Focus on supply chain efficiency
Handling the stress of the holiday season can be challenging. Businesses need to control and monitoring their supply chain at every stage of operations to make sure all the processes run smoothly. Reviewing warehouses, reading over contracts with 3PL providers or fleet owners can help companies run a successful, organized supply chain during the busiest season.
Extensive sales period
Extending the sales period is a popular and efficient way to take the pressure off of the company and logistics providers, as the general volume of orders is pushed back and given more time. In addition, elongated selling time means more purchases. According to statistics and experts forecast, the period between Thanksgiving and the end of Cyber Monday week represents 37 percent of the total U.S. holiday retail sales.
Every year, the preparation process for the holiday shipping season becomes more complex. New technology and solutions are constantly being developed to help companies overcome the peak season. A proper analysis, research, and preparation in advance will do a lot in reaching aspired goals.
The holiday season is a tough time for retailers and the transportation industry, and the time between Black Friday and Cyber Monday can be the peak period of the rush. Large volumes of e-commerce purchases are putting more and more pressure on businesses and their logistics managers every year. Today we will look at how the crazy shopping day known as Black Friday came about to change the holiday shopping season forever.
What is the origin of Black Friday?
There are many stories about how Black Friday got its name, but the main story says the origin of the term “Black Friday” came from 1960’s retailers’ slang. After Thanksgiving, the stores went from being “in red,” which meant having no money, to being “in black,” which implied making a profit. Black Friday also stands for the extreme rush caused by the beginning of the shopping season.
Interesting facts about Black Friday and Cyber Monday
Usually, buyers and retailers do not see the details of a company’s logistics and supply chain processes, but there is a huge engine running behind the scenes to keep companies organized and keep shipments coming in and out properly. The journey a package takes from a warehouse to your front door is far more complex than you may think. In honor of Black Friday later this week, here are some interesting facts and insights about the busiest shopping day of the year:
Almost 74 percent of Americans plan to spend big on Black Friday sales in 2018.
The average purchase amount is estimated to be $483, which equals $90.14 billion of total expenses between Black Friday and Cyber Monday.
Surprisingly, men will spend twice as much as women, reaching an average $626.44 for men compared with $342.50 for women.
To handle the mass amount of shipments and demand, UPS and FedEx are hiring 95,000 and 50,000 people accordingly as additional workforce.
On average, 6 people deal with a package directly before it reaches its final destination.
Since 2006, 7 deaths and 98 injuries occurred during Black Friday shopping.
Most companies start holiday preparation in the summer or even earlier.
The most wanted objects for gifts or personal purchase are gift cards, clothes, electronics, and jewelry.
Almost 52 percent of Americans have said they regret their purchases during Black Friday, and nearly 30 percent end up returning items they bought.
In 2017, Amazon took 54.9 percent of all online transactions during Black Friday.
People shop online more than in stores during Black Friday.
As the competition among logistics companies and retailers becomes fiercer every year, it is important to analyze the data and watch the trends to stay relevant and competitive. If you are a large company that needs help with your Black Friday shipment preparation, reach out to a third party logistics provider like PLS today to let us move your loads for you!
“The line between disorder and order lies in logistics.” – Sun Tzu
Logistics and supply are one of the most essential functions for any military, modern or historical. Operational logistics for a military refer to the set of activities carried out in order to satisfy the needs of those involved. This includes food, transportation, war materials, medical services, and much more.
Dawn of War
Since the first recorded war in history took place in Mesopotamia, there has always been a need to supply the troops fighting it. Some of the first kings and generals had two simple choices for supply chain management when they chose to send their army out on a campaign.
The first method was simple, bring what you need however you can. Pack animals, wagons, and ships were the leading means of transport in antiquity. This has one major fault in that bringing supplies on a campaign leads to long lines of ‘baggage’ following the army. Movement is slowed and the supply train becomes a prime target for enemy forces.
Option two was the practice of foraging and looting supplies, primarily fodder. This method was efficient but by no means perfect. No guarantee on supplies could lead to a very unsettled army and too much pilfering could lead to a very unhappy populace in the surrounding countryside. Nothing spurs an armed insurgency better than an occupying army raiding civilian food stores and warehouses.
An Age of Empires
As the size of armies grew and the scope of conflicts greatly increased so did the need for supplies. Alexander the Great’s army of 65,000 men required 195,000 pounds of grain and 325,000 pounds a water every single day. Following in the footsteps of Alexander, the Romans needed to master supply chain management to ease the burden of their massive empire. The Romans saw the importance of supply and created a highly sophisticated logistical system that allowed them to provision large armies at long distances. The reach and organization of the Roman Legions were unparalleled in the ancient world.
Supply chain management for an army remained relatively unchanged up until the 16th and 17th century when the logistics of overseas campaigns nearly bankrupted the Spanish Empire on several occasions. A new world to explore meant logistics needed to change again. Reforms would highlight the next era of military logistics as armies continued to grow.
Over the Hills and Far Away
The global wars that started to arise in the 17th century posed a multitude of new problems for military logisticians. Supplying a fighting force overseas in a hostile country was a monumental task for the technology at the time. Even after reforming processes the sheer scale of the operations needed was sometimes too much for a nation.
The British faced a horrendous supply situation during the American Revolutionary War. A 3,000-mile journey between ports in Ireland and the colonies was a massive undertaking in its own right. The distance coupled with bad weather, American privateers, and food going bad hampered the British at every turn. Foraging and using the colonies for supplies only further enraged the populace and embroiled the cause that the British were fighting. Ultimately it can be said that supply chain management was a major factor in the British loss.
Major reforms followed the defeat just as the dawn of a new force in military logistics came to power, and his name was Napoleon Bonaparte. Before him, military supply was based on contracts with private companies, looting, and requisition. Logistics became a major internal function of the Grande Armée and was extremely successful during the Ulm campaign in 1805. France’s German allies turned entire towns into supply depots ready for the dedicated supply personal of Bonaparte’s imperial army. Despite early successes at Ulm and Austerlitz, the French mastery of supply and logistics faltered under the British blockade and in the face of guerrilla warfare in the Peninsular War in Spain.
The next major advance came in the form of a new transportation method, railroads. Rail transport greatly expanded an armies mobility and reach. The American Civil war was a hallmark moment for military logistics. Railways were used to great effect, but they became yet another target for guerrillas and raiders. Men, weapons, and supplies could now be moved across vast distances in a very short amount of time compared to traditional methods. The Prussian use of railways during the Franco-Prussian War is often cited as a prime example of logistic modernizations where the Germanic army crushed the French Empire in a very short period of conflict.
Industrialized and Mechanized Warfare
The turn of the century and the beginning of the Great War led to yet another shift in military logistics. Conscription led to absolutely massive armies numbering in the millions and battlefronts that spanned an entire continent. Industrialized firepower such as massed artillery, machine guns, and airplanes led to an increased demand in munitions. Most logistics strategies during the war relied on 19th-century techniques.
The First World War saw the capabilities of rail and horse-drawn supply stretched to their limits. The German Army had an initially successful spring offensive in 1918 devolve into utter failure when the logistics failed to keep up with the army’s advance over the destroyed landscape. The failure of Operation Micahel was the final nail in the coffin for the Central Powers.
The Second World War saw an increase in mechanization with the widespread usage of trucks replacing horse-drawn supply lines. While they require better roadways they are much faster than their animal counterparts. The lack of infrastructure and climate greatly affected the logistics of any troop movements in the North African Campaign, Burma, and elsewhere. Germany’s invasion of the USSR, Operation Barbarossa, lost momentum due to poor logistical planning despite victories on the battlefield.
Air power targeting supply lines, submarines attacking shipping, and the island-hopping campaigns of the Pacific Theater made logistical planning a vital part in the Allied victory in the war on all fronts.
Modern military logistics is now a high tech field with predictive forecasting, operations research, and the most efficient means to get the supplies where they need to be. Technology coupled with a global playing field has made the task even larger than before. Military logistics techniques have become widely deployed in the commercial world and vice-versa.
Conflicts, resources, and technology continue to evolve and so will the need to supply armies in the field. Military logistics is a key component in any fighting force on the planet. As often seen throughout history the victor is typically the one that can keep their troops supplied.
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