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GLOBAL MANUFACTURERS THAT ROLL PLANET PRESERVATION INTO THEIR BUSINESS PLANS

manufacturing

GLOBAL MANUFACTURERS THAT ROLL PLANET PRESERVATION INTO THEIR BUSINESS PLANS

Sustainability is undoubtedly the critical issue of our time. 

With the global population expected to reach 9.6 billion by 2050, the United Nations estimates that the equivalent of almost three planets would be required to provide the natural resources needed to sustain that many modern lifestyles.

While consumption and production are critical to the global economy, current volumes and unsustainable practices are placing a massive strain on the environment and its resources, leading to some already catastrophic impacts.

For instance, Deloitte reports that between 2000 and 2020, CO2 emissions released by global fossil fuel combustion and industrial processes rose by roughly 35%, to 34.07 billion metric tons. Given the need to address climate change and meet net-zero targets, this trend must be reversed.

Thankfully, many manufacturers are now recognizing the strong business case behind pursuing more sustainable practices. Indeed, operating in a sustainable manner can improve energy efficiency, reduce waste, lower costs, increase operational efficiency, enhance brand reputation, boost recruitment and staff retention practices, provide competitive advantages, futureproof for regulatory constraints and opportunities, and unlock access to government grants and funding.

Of course, sustainability is not a case of one-size-fits-all. Every manufacturer is different, and each will have to make sustainable changes that match unique criteria. Yet this diversity is resulting in an abundance of commendable innovations. 

What follows are some leading global manufacturing companies that are taking proactive and progressive approaches toward sustainability.

CANADIAN PACIFIC

Canadian Pacific (CP) is one firm leading the sustainability charge in the rail arena, having introduced a hydrogen locomotive program back in December 2020.

Many railway operators globally use diesel-powered locomotives at present, representing the industry’s most significant source of greenhouse gas emissions. 

Recognizing this, CP has introduced a host of sustainability initiatives that have been successful in improving its fuel efficiency by more than 40% in the past three decades. Should the hydrogen program prove to be successful, it will help the firm take a further leap toward sustainable practices and serve to revolutionize energy consumption for the industry as a whole.

CP is in the process of retrofitting a line-haul locomotive with hydrogen fuel cells and battery technology to power the locomotive’s electric traction motors. The company will then conduct rail service trials and qualification testing to evaluate the technology’s readiness for real world use. 

To accelerate the program, the company also recently received a CA$15 million (US$12.1 million) grant from Emissions Reduction Alberta to increase the number of hydrogen locomotive conversions from one to three, as well as developing more hydrogen production and fueling facilities at CP’s rail yards in Calgary and Edmonton.

The former will comprise an electrolysis plant that will produce hydrogen from water, this process powered by solar panels at CP’s headquarters campus to keep emissions at zero. The latter, meanwhile, will see a small-scale steam methane reformation system being used to generate hydrogen while tapping into Alberta’s abundant natural gas resources.

RIO TINTO, POSCO, METSO OUTOTEC

Over in the mining and metals sector, organizations are also tapping into the potential of hydrogen to unlock similarly transformative solutions.

Rio Tinto, the world’s third largest mining company, has partnered with POSCO, the largest steel producer in South Korea, for the exploration and development of technologies capable of contributing to a low-carbon emission steel value-chain.

Both firms have outlined ambitions to reach carbon neutrality by 2050, the integration of Rio Tinto’s iron ore processing technology and POSCO’s steelmaking technology set to be pivotal in helping them to each reach such their intended sustainability targets.

In addition, Finnish metals specialist Metso Outotec is equally championing sustainability in the sector thanks to its unique Circored process, this involving the use of hydrogen to decarbonize the production of steel.

The flexible Circored process produces highly metalized direct reduced iron or hot briquetted iron which is then in turn used directly as a feed material in electric arc furnaces for carbon-free steelmaking.

Not only does this not require any fossil fuels, but it also helps Metso Outotec to minimize its costs by eliminating the need for energy-intensive pelletizing.

PACCAR, DAIMLER TRUCKS NORTH AMERICA, VOLVO GROUP

Back in the transportation sector, automotive manufacturers PACCAR, Daimler Trucks North America and Volvo Group recently sealed $127 million of $199 million in U.S. federal funding made available for the development of advanced battery-electric and fuel cell electric truck projects.

According to the International Energy Agency, transport accounts for approximately one fifth of all CO2 emissions, with 74.5% of this contribution stemming from passenger vehicles (45.1%) and road freight vehicles (29.4%).

Known as SuperTruck 3, the federal funding initiative is a five-year dollar-for-dollar investment matching program designed to accelerate the development of pollution reducing electrified medium- and heavy-duty trucks and freight system concepts that will either achieve zero emissions or improve energy efficiency. 

PACCAR secured $33 million of the funds to develop 18 class 8 battery-electric and fuel-cell trucks, as well as a megawatt charging station.

Daimler Trucks North America has received $26 million to develop two class 8 fuel cell trucks that have a 600-mile range and 25,000-hour durability–providing similar operational output compared with a diesel vehicle.

And Volvo Group North America will use $18 million in SuperTruck 3 funding to manufacture a 400-mile class 8 battery-electric tractor trailer that will focus on optimizing performance in relation to aerodynamics, tires, braking, automation and route planning. Further, the firm will also develop a megawatt charging station.

This is not the only commitment the manufacturers have made towards sustainable automotive solutions. Equally, Daimler and Volvo previously signed a joint venture to develop fuel cell vehicles during the current decade that would be sold under both brands. 

THE MARISURF CONSORTIUM

Pharmaceutical and chemical manufacturing might seem like a sector less ripe for sustainability initiatives. However, the MARISURF Consortium is demonstrating that this is equally an area where much progress can be made.

The Consortium, backed by several companies and funded by a grant of 4.8 million euros (or about US$5.4 million) from the European Union’s Horizon Europe research and innovation program, aims to develop alternatives for petrochemicals in pharma products using marine microorganisms.

It comprises a selection of esteemed academic institutions, end-users and industrial companies, including manufacturers such as Bio Base Europe Pilot Plant VZW, EcTechSystens Srl, Nanoimmunotech and Marlow Foods Ltd.

The goal is to produce marine microorganism-based products for personal care, food and pharmaceutical formulations, with promising progress having been made in the five years since the research project first launched. Given that the consumer industry accounts for more than 70% of demand for all petrochemicals, this is significant. 

Indeed, common petrochemical use cases include drug production, soaps, plastics, fertilizers, pesticides, paints, and build materials such as flooring and insulation. However, it is hoped that marine organisms will become a viable, natural replacement, owing to the consortium’s research. 

EN+ GROUP

While En+ Group is renowned as the world’s largest producer of low-carbon aluminum, it is also an active player in green energy solutions through several environmentally conscious initiatives. 

Many of these are driven by the firm’s New Energy program, focused on expanding clean energy generation and access. This seeks to modernize En+’s power plants through the implementation of new technologies capable of achieving greater hydropower energy efficiency and a reduced environmental impact, without increasing the water volumes passing through its hydropower turbines.

Further, the program aims to reduce En+’s environmental impact in other ways–namely through curbing the emissions of its coal-fired power plants. Initially launched in 2007 in tandem with the company’s plans to conduct the large-scale overhaul and replacement of core equipment at its largest hydropower plants based in Siberia, the project will continue to run until 2046. 

Through New Energy, it has also become the first Russian firm and just one of 28 companies globally to achieve a UN recognized Energy Compact–an initiative launched by UN Energy to acknowledge voluntary commitments by countries, businesses, and cities in supporting the Sustainable Development Goals by accelerating the transition to clean energy and improving energy access.

TRAFIGURA GROUP AND NYRSTAR

In Australia, global metals manufacturer Nyrstar and physical commodity trading company Trafigura Group have committed to a joint investment that will see the construction of a commercial scale green hydrogen manufacturing facility in Port Pirie, in partnership with the State Government of South Australia.

Currently the project is in the midst of an AUD$5 million (US$3.65 million) front end engineering design study that is expected to be concluded come the end of 2022, with construction then set to commence in 2023.

In total, the project will cost an estimated AUD$750 million (US$534 million), set to be rolled out in phases. Initially it will produce 20 tons of green hydrogen per day for export in the form of green ammonia, with plans to ramp up to 100 tons per day at full capacity, powered by a 440MW electrolyzer.

The manufacturing facility will become a key backbone of green hydrogen for Port Pirie and the surrounding region, providing significant benefit to local businesses while propelling the decarbonization of transport and industry.

The oxygen created in the hydrogen production process will also be utilized by the Nyrstar Port Pirie smelter. As part of the agreement, Trafigura will source 100% renewable energy to deliver the electricity needed to run the project’s electrolyzer, which will also contribute to decarbonizing the existing smelter’s power supply.

DEMATIC AND ASPIRE FOOD GROUP

Intelligent automation specialist Dematic and Aspire Food Group have partnered on a unique venture, constructing a flagship, state-of-the-art facility that will be used for the purpose of enhancing the production and manufacture of food-grade insect protein.

Anticipated for completion in Q1 2022, the facility will be the world’s first fully automated food-grade insect protein manufacturing site, powered by Dematic’s innovative technology. 

Its Unit-Load Automated Storage/Retrieval Systems will be implemented through the 11-story building and use 96,000 totes to breed crickets, ready to be processed for either human or pet consumption.

Industrial IoT sensors, and artificial intelligence will also be deployed to unlock key data and insights that will be used to help optimize the conditions for cricket maturation, breeding and incubation. The project will also mark the inaugural use of such technologies in the enhancement of indoor vertical agriculture with living organisms.

In total, it is estimated that the totes will be able to produce up to 20,000 tons of cricket protein and waste for fertilizer and soil supplements annually. 

HONDA AND KUEHNE+NAGEL

In China, logistics specialist Kuehne+Nagel and Honda have worked together to cut 16,000 tons of CO2 out of the supply chain of the automotive manufacturer through an ambitious road-to-rail project, reducing the regional division’s carbon emissions by as much as 70%.

Developed through KN Sincero–a joint venture between Kuehne+Nagel and Chinese logistics specialist Sincero–the initiative has seen Honda China move significant portions of its domestic long-haul trucking operations to train lines.

Tapping into regional hubs to optimize the performance of its supply chain, the manufacturer has unlocked several benefits. It has drastically reduced supply chain efficiencies and dramatically enhanced productive reliability, the project also delivering a range of value-added services spanning sorting, scanning, repackaging, GPS track and trace, and recyclable container management.

As a key partner, the project aligns with Kuehne+Nagel’s Net Zero Carbon initiative that was launched in 2019, geared toward not only lowering its own footprint but equally those of other organizations. Indeed, the firm resultantly achieved carbon neutrality globally in 2020, further turning attentions to supporting its partners thereafter through initiatives such as these.

incentives

OUR ANNUAL GOVERNOR’S CUP PROVIDES A STATE-BY-STATE REVIEW OF THE BEST SITE INCENTIVES FOR MANUFACTURERS

Manufacturing is a critical component of the U.S. economy.

In 2020, the sector directly contributed $2.2 trillion to the nation’s income, accounting for 10.8% of total GDP. If you include direct and indirect value-added activities (such as purchases from other industries), this rises to 24%.

Manufacturing is an equally critical employer. Indeed, current population survey statistics show that there are 15.7 million employees working in U.S. manufacturing roles–10% of the country’s entire working population. 

It is no surprise, therefore, that the industry is at the cutting edge of innovation. 

Within this active and pioneering landscape, many firms are embracing Industry 4.0 with open arms, recognizing it as the future of the sector and vital to unlocking competitive advantages. 

Resultantly, it is an industry attracting significant private investment, and states are jostling in an attempt to get their slice of the pie, doing so by providing a range of different incentives, from tax credits to grants.

It’s easy to see the logic from the state perspective when looking at the economic spillover. Indeed, one paper estimates that the average automobile manufacturer receiving state subsidies promises to create 2,700 jobs and receives $290 million–more than $100,000 per role created.

Here, we’ll take a look at some of the U.S. states offering the most attractive incentives for manufacturers. 

CALIFORNIA

As the most populated state in the country, it is of little surprise that California is a hotbed of manufacturing innovation, having successfully drawn in large numbers of manufacturers through a series of initiatives.

Notably, California provides a dedicated incentive in the form of the Manufacturing and Research & Development Equipment Exemption. Available to all manufacturers and businesses engaged in research and development activities relating to biotechnology, physical sciences, engineering and life sciences, a partial exemption in state sales and use tax is provided, capped at $200 million a year.

The state also promotes green manufacturing practices through its CalRecycle programs that include grants and low interest loans for the development of critical infrastructure. Examples include manufacturing projects that proactively reduce landfill waste and minimize carbon footprints, with $11 million in grants having been provided in FY 2018-19.

This is alongside a range of general incentives that manufacturing firms can tap into. All qualifying companies may receive corporate tax income credits up to 24% of their basic research expenses, and 15% on R&D expenses. 

Equally, the state offers discounted electricity rates to companies bringing new jobs and loads of at least 200kW annually. Typically, these discounts are between 12-30%, spanning a five-year period. 

NEW YORK

New York also offers a variety of dedicated incentives for manufacturers. 

Through the Manufacturer’s Real Property Tax Credit initiative, qualifying firms can apply for a credit equal to 20% of the real property taxes paid on their business properties in each given tax year. Further, the state’s Investment Tax Credit (ITC) scheme provides 5% credit to those companies that placed qualified property into service during any given tax year, with new companies able to receive this as a refund instead of carrying it forward. 

Beyond property, New York also runs the Excelsior jobs program that provides five refundable tax credits for up to 10 years. This includes a credit of up to 6.85% of wages per net new job and a credit valued at 2% of qualified investments, among others, with qualified green projects receiving even more favorable percentages. 

There are also special benefits for those operating within the food and beverage industry specifically, namely through the Alcoholic Beverage Production Credit. 

Those companies producing 60,000,000 or fewer gallons of beer or cider, 20,000,000 or fewer gallons of wine, or 800,000 or fewer gallons of liquor within a tax year may be eligible to receive a credit equal to 14 cents per gallon for the first 500,000 gallons produced in New York state, with 4.5 cents per gallon credits offered thereafter.

TEXAS

As the second-largest state, Texas has a buoyant manufacturing sector with plenty of commercial space available and a series of attractive incentives for businesses.

As the largest deal-closing fund of its kind, the Texas Enterprise Fund is one that particularly stands out, providing cash grants to companies considering new projects in an attempt to win out over other competing states. Indeed, it is critical in helping the state to secure new projects that stand to offer significant capital investment, employment opportunities and other benefits.

The Industrial Revenue Bonds scheme also benefits manufacturing firms more specifically, used to provide tax-exempt financing (of up to $10 million for $20 million-plus projects) for land and property to manufacturing and industrial developments. 

This is a central draw alongside Chapter 313 within the Texas Economic Development Act. Specifically, Chapter 313 was instated to incentivize leaders of capital-intensive investment projects, such as large-scale manufacturing and research and development facilities, to select the state. Meanwhile, like California, Texas offers tax exemptions on utilities to manufacturing companies that manufacture, process, or fabricate tangible property.

FLORIDA

Those companies operating in the advanced manufacturing sectors are deemed to be eligible for two different programs run in the state of Florida.

The first of these is the Capital Investment Tax Credit (CITC) that aims to bolster the state’s capital-intensive sectors. Here, an annual corporation tax credit is provided for 20 years for qualifying projects that invest $25 million and create at least 100 jobs.

The second is the High Impact Performance Incentive (HIPI) that instead provides grants to businesses operating in high-impact sectors, such as transportation equipment manufacturing. Eligible companies must make a cumulative investment of $50 million, with this money being used to create a minimum of 25 full time jobs in the region over three years.

Beyond these two flagship initiatives, the state also provides a series of other special incentives. The Rural Community Development Revolving Loan Fund and Rural Infrastructure Fund has been deployed to “meet the special needs that businesses encounter in rural counties,” for example. And the Brownfield Redevelopment Bonus Refund is used to “encourage Brownfield redevelopment and job creation,” with applicants receiving tax refunds of up to $2,500 for each job that they create.

INDIANA

Indiana is often touted as the beating heart of U.S. manufacturing. According to 2020 figures, the industry accounted for more than a quarter (27.84%) of the state’s total output, employing 17.07% of its working population, with more than 8,500 manufacturing firms operating in the Hoosier State.

Indeed, Indiana lays claim to the highest concentration of manufacturing jobs in the country, with 80% of the world’s RVs manufactured in the state. 

To sustain such a position, Indiana offers a variety of tax incentives and economic development programs to stimulate the creation of jobs and investment locally.

Its Skills Enhancement Fund supports the training and upskilling required to make capital investment viable for businesses, typically reimbursing half of all eligible training costs over a two-year period. 

Further, Indiana offers two tax incentives targeted at encouraging investments in research and development. These initiatives stand alongside its Patent Income Tax Exemption, Redevelopment Tax Credit, Venture Capital Investment Tax Credit, Headquarters Relocation Tax Credit, Hoosier Business Investment Tax Credit and Community Revitalization Enhance District Tax Credit. 

ILLINOIS 

Illinois offers a variety of competitive incentives, from tax credits to grant and loan programs, in the aim of attracting businesses of all kinds, including manufacturers.

The latter sector benefits specifically from the Manufacturing Machinery & Equipment Sales Tax Exemption that provides a 6.25% state tax exemption on consumables purchases made in relation to the manufacturing process.

Economic Development for a Growing Economy is a general initiative, acting as one of the state’s primary incentivization programs. Those firms investing $5 million and the creating 25-plus jobs can benefit from 10-year tax credits on their expanded payroll. 

Similarly, the High Impact Business scheme is available, providing a sales tax exemption on manufacturing equipment purchases among other activities to those businesses making $12 million investments to create 500 full-time jobs, or $30 million to ensure the retention of 1,500 full-time jobs.

Illinois’ other primary incentive programs include its Tax Increment Financing policy and New Markets Tax Credits, among others, while the state also operates dedicated enterprise zones and the U.S. Empowerment Zone Program, each offering a cohort of benefits to companies.

NORTH CAROLINA

The Economic Development Partnership of North Carolina offers a range of incentives spanning discretionary grants, building demolition and reuse, public infrastructure, transportation, workforce training and development and tax exemptions, among other programs.

Within this broad net, manufacturers can benefit directly from several dedicated tax exemptions. 

The state offers a Machinery and Equipment, Sales and Use Tax Exemption for general manufacturing machinery, with an additional Raw Materials, Sales and Use Tax Exemption ensuring that component parts or ingredients of manufactured products are also exempt (this including those packaging items for wholesale and retail products delivered to end customers).

A third sales and use tax exemption can be found on electricity, fuel and natural gas when they are used in manufacturing operations, while the state’s Inventory, Property Tax Exclusion ensures that North Carolina and its local governments do not levy a property tax on inventories.

MASSACHUSETTS

In Massachusetts, manufacturers are eligible for a variety of tax benefits. Be it exemptions on local personal property taxation, sales/use tax exemptions on properties purchased for manufacturing, or a 3% investment tax credit for newly purchased machinery and equipment, there are several reasons why the Bay State’s manufacturing industry is thriving. 

Indeed, it is estimated that manufacturers account for 9.39% of the total output in the state that is home to 243,000 manufacturing employees (as of 2019).

Pharma and medicine is the largest sub-sector, driven by the Massachusetts Life Sciences Initiative that offers such companies a 10% credit on depreciable property as well as a special sales and construction sales tax exemptions. Equally, the Life Science Company Jobs Credit provides corporate income tax credits to those firms creating a minimum of 50 new employment opportunities.

Beyond life sciences, a greater variety of manufacturers may also tap into a two-category R&D tax credit, the first (10%) relating to qualified expenses, and the second (15%) relating to basic research payments.

The state also offers critical grants via two key programs–the Massachusetts Transition and Growth Program, as well as the Regional Economic Development Organization Grant Program.

OHIO

The city of Mason, Ohio, lists advanced manufacturing as one of its targeted business sectors, providing a variety of incentives via REDI Cincinnati, CincyTech, TechOhio, VentureOhio and JobsOhio.

The latter of these agencies is responsible for the JobsOhio Economic Development Grant for projects requiring significant capital investment in the areas of manufacturing, R&D corporate headquarters, distribution and advanced technology.

JobsOhio also offers a Research & Development Center Grant to organizations with $10 million in annual turnover and a five-year operating history, as well as its Revitalization Program that offers funding of up to $1 million to those looking to redevelop the state’s underutilized sites.

Tax credits and exemptions are equally in abundance, some of the most notable including the Research & Development Investment Tax Credit, Job Creation Tax Credit and Sales Tax Exemption on machinery and equipment used in manufacturing processes.

LOUISIANA

Recent incentives offered by the state of saw Coca-Cola Bottling Company UNITED commit to a $42 million investment that will be used to expand its bottling facility in Baton Rouge–a project that will not only safeguard 550 jobs, but equally create an additional 15 with an average salary of $43,000.

The state is providing the firm with a competitive package that includes a $300,000 modernization grant, as well as support from LED FastStart–Louisiana’s workforce development program that delivers customized employee recruitment, screening, training development and training delivery at no cost. Further, the firm is also expected to utilize the state’s Quality Jobs Rebate and Industrial Tax Exemption Program.

The former offers up to a 6% rebate on annual payroll expenses for up to 10 years as well as a state sales/use tax rebate on capital expenses or 1.5% project facility expense rebate for qualifying expenses.

The latter, meanwhile, offers an attractive tax incentive in the form of an 80% property tax abatement for an initial term of five years for manufacturers who make a commitment to jobs and payroll in the state, with option to renew for an additional five.

ports

GLOBAL COMMERCE’S LIFEBLOOD: PORT CITY REVIEW 2021

While maritime trade can be traced back to ancient civilizations in previous millennia, sea freight and ports have never been more important than they are today.

The lifeblood of global commerce, seaports handle almost 811 million TEUs every year, supporting industries of all shapes and sizes all over the world. Indeed, many of the United States’ maritime logistics hubs are some of the largest, their associated economic development corporations (EDCs) having helped to accelerate their growth and value to regional, national and global economies.


In this 2021 roundup of 15 U.S. port cities, we analyze the role of some of the country’s key logistics hubs—as well as the role their economic development engines play in ensuring their continual progression.

Los Angeles, California

Los Angeles is arguably the West Coast’s most important intermodal transport hub, the beating heart of which is the Port of Los Angeles–a seaport covering 7,500 acres of land and water along 43 miles of waterfront. It is the nation’s No. 1 container port, with its state-of-the-art facilities seeing it move 9.2 million TEUs in 2020. Port of Los Angeles also adjoins to the Port of Long Beach, another one of the busiest seaports in the world, moving around 7.5 million TEUs every year. Both ports are supported by the efforts of the Los Angeles County Economic Development Corporation, the regional EDC combining economic research with industry programs, workforce development, business assistance and policy changes that promote a thriving local economy, for which these two ports are vital. 

New York City, New York

New York City Economic Development Corp. (NYCEDC) is the EDC for the nation’s most highly populated city, home to more than 8 million people. A mission-driven non-profit, it aims to support the city by creating prosperity through investing in neighborhoods, building sustainably, creating workforce opportunities and advancing company growth. In achieving these goals, it works closely with the Port of New York and New Jersey. Recently, it has been helping to develop a visionary freight system, supported the major South Brooklyn Marine Terminal project and completed a 2019 survey of the NYC and NJ maritime community. “Through PortNYC and other initiatives, we’re working to ensure both the long-term health of the maritime industry in NYC and the city’s economy as a whole,” NYCEDC states.

New Orleans, Louisiana

With the simple mission of creating a region with a thriving economy and an excellent quality of life, Greater New Orleans (GNO) pursues a two-pronged strategy as the EDC for the region. This includes helping to attract, retain and develop key businesses (Business Development), and propose, promote and facilitate policies and programs that improve business conditions (Business Environment). Such efforts have assisted in securing a new ground-breaking Lineage Logistics project at the Port of New Orleans, the organization having committed $42 million to the expansion of the Jourdan Road cold-storage facility in New Orleans East in April 2021. “The cold-storage complex at Jourdan Road along the Inner Harbor Navigation Canal will grow from 160,000 square feet to 304,000 square feet,” an announcement from GNO reads.

Oakland, California

While Oakland is home to fewer than half a million people, its maritime logistics hub–Port of Oakland–is renowned as a key gateway to U.S. commerce. It oversees 1,300 acres of maritime-related facilities serving a local market of more than 14.5 million consumers, with 34 million people located within a seven-hour drive of its facilities. Supporting Port of Oakland’s thriving economic activity is the East Bay Economic Development Alliance (EDA). The two have an intertwined relationship, the EDA having previously supported harbor dredging activities in 1991 and 2009, and assisted stakeholders in resolving the transportation impacts created by the port’s growth in 2003. In 2020, it also recognized the port at its Innovation Awards for its significant contributions as a long-standing generator of jobs and economic vitality in the region.

Norfolk, Virginia

The city of Norfolk, Virginia, is home to a vibrant intermodal transport scene, in large part thanks to a formidable maritime history centered around the enormous naval base on Chesapeake Bay and the Port of Virginia. The port boasts of the largest percentage of rail arrivals and departures on the East Coast, is directly responsible for nearly 40,000 jobs, and managed 2,327 vessel calls and departures in 2019, equating to around 3 million TEUs and 55 million tons of cargo worth almost $75 billion. The Hampton Roads Economic Development Alliance (EDA) has long assisted both domestic and international firms wishing to invest in the Norfolk area, offering three lucrative tax incentives to companies using the port: The Port Volume Increase Tax Credit, Barge and Rail Use Tax Credit and International Trade Facility Tax Credit.

Savannah, Georgia

The Savannah Economic Development Authority (SEDA) is the EDC for Savannah, its goal being to help create, grow and attract new job opportunities and investment in the region. It attracts and supports a variety of organizations through customized services that include anything from infrastructure and real estate opportunities to incentives and tax abatements. Much of Savannah’s draw stems from the Port of Savannah, where 85% of the world’s top 3PLs operate in Georgia. To maintain this competitive advantage, SEDA actively supports several logistics-related projects, including the Savannah Harbor Expansion Project, the Mid-American Arc Initiative & International, and The Center of Innovation for Logistics for the state of Georgia.

Houston, Texas

Originally founded in 1840, the Greater Houston Partnership (GHP) strives to make the region the best place to live, work and build a business, serving a thousand-member companies and 7.1 million people in the 12-county Houston region. It is a fervent supporter of the Port of Houston, hosting an annual State of the Port conference, outlining the logistics hub’s performance, future growth opportunities and capital investment plans to regional economic players. The overall impact of the port on a national level includes 3.2 million jobs, $801.9 billion in economic value and more than $38.1 billion in tax revenue. “As the largest port in foreign tonnage in the nation, Port Houston is an economic engine supporting the Houston region, the state of Texas, and the nation,” GHP states. 

Tampa, Florida 

The Tampa Bay Economic Development Council (EDC) has remained the designated economic development agency for Hillsborough County for 12 years, also serving the surrounding cities of Tampa, Plant City and Temple Terrace. Currently it is delivering upon a 2020-2022 strategic action plan geared toward achieving business development, talent attraction and placemaking. As part of this vision, the EDC provides several incentives to business, creating high-wage jobs in high-value industries. In terms of its engagements with the ports, logistics and supply chain industry, it supports those organizations seeking real estate opportunities not only at the Port of Tampa Bay, but equally in Port Redwing and Port Ybor. 

Chicago, Illinois

The Windy City is extremely well connected, in large part thanks to what is North America’s largest inland port–the CenterPoint Intermodal Center. Located in the Joilet and Elwood area, it is a 6,400-acre, master-planned intermodal development which handles approximately three million TEUs every year. The site is also home to more than 30 economic powerhouse tenant companies that between them occupy over 14 million square feet of space. The Chicago Regional Growth Corporation plays a key role in supporting the city and region’s buoyant logistics activities, priding itself on a “history of working together” with key partners to developed projects leading to growth, investment and the creation of quality jobs.

Philadelphia, Pennsylvania

The Port of Philadelphia, also known as PhilaPort, holds several impressive accolades. Not only is it the fastest growing port in the U.S., having achieved a 7% increase in container volumes in 2020. Equally, it generates roughly 55,000 jobs for the local region, handles 6.4 million metric tons annually, is the largest refrigerated port in the country and helps to generate $30.5 billion in trade every year. The Philadelphia Industrial Development Corp. (PIDC) continues to play a crucial role in helping the port to reach new heights. The city’s EDC, the PIDC has leveraged $30 billion in total investment and assisted in retaining and creating hundreds of thousands of jobs in Philadelphia since its foundation 62 years ago. The local seaport industry’s latest venture, announced March 2021, will see the development of a $23 million distribution center that is set to add more than 200,000 square feet of flexible, food-grade storage within one mile of Packer Avenue Marine Terminal.

Mobile, Alabama

The Port of Mobile is a significant contributor to the city’s economy. Indeed, the figures speak for themselves. According to the Alabama State Port Authority, its economic impact includes roughly 155,000 direct and indirect jobs, $559.3 million in direct and indirect tax impact, and a total economic value $25.4 billion. The Economic Development Partnership of Alabama (EDPA) has supported the growth of these numbers over many years, having worked to support companies compete not only locally but on a global stage. The EDPA helps various free trade zones (FTZs) to flourish while also providing tax incentives, support for startups and management of the region’s transport links that are vital to its intermodal abilities and more. 

Matagorda County, Texas

Matagorda County is privileged enough to be the home of two ports: Port of Bay City and Port of Palacios. The former has approximately 150 acres of land available for commercial development, providing access to the Colorado River Channel, while the latter equally provides opportunities and parcels for long-term lease and development. Both ports are backed by the Matagorda County EDC that provides key economic contributors with incentives including employee recruitment and training, tailored services to help locate or expand, tax abatement policies and tax-free industrial and environmental bonds.

Baltimore, Maryland

The City of Baltimore is home to one of Maryland’s four FTZs. Serving as the administrator of the FTZ is the Baltimore Development Corporation (BDC), which is  mandated to grow the city’s economy in an inclusive manner by retaining, expanding and attracting businesses and promoting investment. Port of Baltimore forms a large part of these activities, being one of the 10 busiest ports in the U.S. and serving a significant part of the East Coast. The bulk of the products that pass through the port, and indeed the FTZ, includes cars, paper and steel, with BDC itself reporting that the total value of shipments through Baltimore’s FTZ was more than $19.9 billion in 2017.

Cleveland, Ohio

The Greater Cleveland Partnership (GCP) is a particularly active EDC, supporting the city and its 12,000 members as a catalyst for business growth and development in its various forms. It works closely with the Port of Cleveland, the latter responsible for more than 20,000 jobs and $3.5 billion in annual economic activity tied to the 13 million tons of cargo it handles per annum. With support from GCP, the port announced in May 2012 that it would be moving ahead with $20 million in projects that will include dock improvements, main gate enhancements and the construction of a state-of-the-art customs processing facility. This latest investment follows the completion of a $1.1 million cruise terminal processing center and $10.36 million extension of the Cleveland Bulk Terminal iron ore tunnel in 2020, the latter anticipated to bring another 1 million tons of cargo each year to the port. 

Memphis, Tennessee

Memphis is an interesting proposition, being the home of one of the country’s most active intermodal freight hubs and the thriving Port of Memphis, despite being in a landlocked state in Tennessee. The port serves 150 industries and handles a rich variety of goods, from petroleum and cement to grain and steel. It is able to connect these vital goods with the rest of the country thanks to the Mississippi River, five Class 1 railroads, major north-south and east-west interstate highways, and the nearby airport. Such is its critical role in accelerating economic activity, it carries an annual economic impact of more than $9.2 billion. Created in 2011, the Economic and Development Growth Engine (EDGE) for Memphis and Shelby County helps to support the region’s buoyant logistics industry, managing its foreign trade zone, providing business loans and tax incentives, and overseeing the Memphis Port Commission. 

Logistics

SIX THINGS TO CONSIDER IN PICKING THE BEST THIRD PARTY LOGISTICS OUTFIT

Logistics is the lifeblood of commerce and e-commerce. For companies that have built their foundations and business models in the process of producing, selling, shipping and delivering goods, it is arguably the most vital cog in the entire machine.

Get logistics right, and a business can thrive. Get it wrong, however, and the effects on any company’s brand reputation and bottom line can be catastrophic.

The challenge for many firms looking to deliver goods to customers is the simple fact that they will lack the resources or know-how and are unable to effectively handle large-scale logistics in-house. To maximize commercial opportunities, products must be deliverable across large geographies, yet this is almost impossible to achieve singlehandedly.

As a result, many will turn to third-party logistics (3PL) providers–supportive organizations specializing in the provision of cost-effective fulfillment and distribution services.

Indeed, logistics is big business. According to estimates, roughly 10% of the United States’ $21 trillion annual GDP can be attributed to the industry.

Given the size of the opportunity, the market continues to become increasingly competitive, resulting in rampant logistics-centric innovation among 3PL providers who today provide a range of highly effective, bespoke services.

For those seeking the help of a 3PL, this innovation is hugely beneficial. Yet not all 3PLs are created equal. Within such a crowded environment, the challenge for many companies is finding the right provider that is capable of unlocking as many otherwise unattainable benefits as possible.

Here are six things to consider when choosing a third-party logistics provider.

Track record

While many services a company utilizes can be somewhat transactional, a 3PL-client relationship must be built on trust. Such providers will become a vitally important part of your business’s success, so it is important that you know they have a proven ability to support your specific needs. 

There are a variety of ways in which you can determine this track record:

-Are they an established player in the market?

-Do they hold accreditations from recognized industry bodies?

-Do they have case studies with example success stories working with companies similar to your own, in your regions of interest?

-What sort of results are they delivering for those clients, and how do these compare with your expectations?

-Take the time to understand a potential providers’ areas of strengths and weaknesses to ensure they are able to deliver upon their promises. 

Expertise

Despite broadly catering to the same demands, the individual offerings of 3PLs will often vary. While one provider might offer a limited number of services but specialize in your specific industry and/or geographies of interest, another might offer an expansive range of services that could help to make your supply chain more scalable, yet only do so on a generalized basis without the ability to meet a stringent set of bespoke needs. Rarely will one company’s model mirror that of another. 

Consider your specific business needs and goals, understand how logistics will best support these, and then you can work to understand what kind of 3PL provider and services you will need. In following these steps, you are more likely to benefit from 3PL services that are relevant to your organization.

Location

The footprint of a 3PL is just as important, if not more so than its services. The best providers will have a well-established network that is able to uphold a seamless logistics operation across multiple locations, either regionally or perhaps globally. 

Indeed, this is a further question: Are you looking to sell your goods locally, regionally, nationally or internationally? One 3PL may have an unrivaled footprint in one state, but not be able to compete with others who specialize in country-wide services. 

Again, consider your own needs and find a 3PL that can meet those requirements.

Compatibility

While cost will often be the primary factor worth considering for any company, it should not be the be-all and end-all. Cheaper doesn’t always mean better value. With 3PLs, it is equally worth considering the company’s cultures and values to understand how they work with your business and cater to your customers. 

-Are they willing to communicate with your company on a regular basis?

-Are they a good cultural fit?

-Do they demonstrate a willing commitment to data sharing that can demonstrate your ROI?

-Do they have a track record of going the extra mile for their customers?

It is worth remembering that your 3PL provider will be an extension of your business, and the quality of their offering will reflect on your own brand. Ensuring you create a truly embedded partnership with a close working relationship is, therefore, vital.

Scalability

With the support of a good 3PL, it is likely that your business will be able to grow more quickly. But does that same 3PL have the flexible and agile characteristics necessary to support that growth?

Scalability is a fourth important element to consider when selecting such a provider. If the answer to the above question is no, then you may find that you will be forced to change 3PL provider in the near future, causing unnecessary administration, stress, costs and disruptions.

Equally, it is not just about whether a 3PL can scale with your business, but what impact this might have.

-What would this mean for your costs?

-Will the services and value for money improve, reduce or stay the same? 

Place your roadmap front and center and ask yourself whether a 3PL would be able to support this. 

Innovation

As has already been mentioned, competition in the logistics space continues to spur an ever-increasing amount of innovation among 3PL providers who are deploying state-of-the-art technologies and cutting-edge services to both cut above the noise and benefit their customers on a daily basis. Some 3PLs will be more committed to innovation and technologies than others, however. 

To identify those that will value innovation and bring plethora of benefits to your business not only now but in the future, consider their current offering.

-Will their software and systems integrate with your own?

-How do they track metrics, data and deliver analytics? Can they provide this information to you easily?

-How usable and up to date are their website, dashboards and alike?

Those that can deliver positive answers to these questions will likely be companies that are committed to continually enhancing the service they bring to their customers and will likely maximize industry innovation to the benefit of your business.

Ultimately, it is important to do your research. Don’t just settle on the cheapest provider. For something as important and integrated as a 3PL, which will become an extension and representation of your own brand and business, it is important to focus on quality in all aspects. 

By considering these six simple factors, you will be well placed to find a more suitable, more relevant 3PL capable of meeting your organization’s needs. 

banks

TOP 10 BANKS FOR GLOBAL TRADE 2021

It is strange to think that there had been an optimistic outlook for global trade ahead of 2020. Circle back to the end of 2019, and that was the case, with global recovery expected off the back of a sluggish year.

The COVID-19 pandemic, described by IHS Markit as the largest black swan event since The Second World War, quickly dashed any chance of such a rebound being realized. Instead, lockdowns, restricted movement across borders and sweeping economic and social uncertainty—coupled with uncertain U.S. trade policies, Brexit and other external factors—saw 2020 become a year like no other.

Indeed, global trade was forced to adapt and continued to serve as a vital lifeline that helped to keep supply chains flowing and boost confidence wherever possible.

Banks played a vital role. They accelerated digitization strategies, with technologies such as blockchain and artificial intelligence further coming to the fore over the past 12 months. As ever, they altered their offerings, and each became more or less attractive to those corporations partaking in global trade. 

Here, we reflect on these offerings and rank the top 10 banks for global trade in 2021. 

The banks in this list are not acclaimed based on the volume or value of transactions. Rather, they have been recognized owing to their commitment to service–through innovation, targeted solutions and meeting the specific cross-border trade needs of those corporations that they serve.

Size and stature do not always equal best-in-class. Many of the banks listed here are indeed major players, but we have focused on those institutions harboring some of the key qualities to look for when selecting a provider.

A series of different criteria have factored into this, including:

-Competitive advantages

-Pricing

-Product and service innovation

-Financial robustness and security

-Knowledge of local requirements and conditions

-Customer satisfaction

-ESG compliance

Citi

Citi is globally renowned, currently operating in more than 90 markets and transacting in over 130 currencies. 

The company prides itself on a knowledge and understanding of local markets–a skillset that is particularly useful to those embarking on expansion across borders or looking to ramp up trade activities in new countries. It tailors its services to each region and country rather than taking a one-size-fits-all approach. 

Citi is also a key figure in driving global industry technological transformation. Its digital toolkit comprises key connectivity solutions such as integrated APIs (application programming interfaces), and it has also positioned itself as leading innovator in the usage of blockchain. 

HSBC

Where global trade is mentioned, HSBC is never too far behind. The bank recently took the top spot in Euromoney’s Trade Finance Survey for a fourth year running, testament to its ongoing investments into further financial skills, digital capabilities, and product innovation. 

The bank actively positions itself as a thought leader with the publication of key export insight reports, while its Trade Forecast Tool imparts crucial short- and long-term knowledge on prospects in key markets whilst prioritizing user-experience. 

Its services include a renowned Ex-Im Bank Working Capital Guarantee Program alongside currency exchange, documentary collections, export collections, FX trading, trade credit insurance and more. 

UniCredit

UniCredit offers a wide variety of global trade finance services including global securities services, export finance, internet banking and transactional sales via its Global Transaction Banking business. Despite being built on a network of more than 4,000 key banking relationships that span 175 territories globally, the bank primarily caters to its core customer base in 14 core Central and Eastern European markets alongside 18 other countries worldwide.

The firm is renowned for its innovative attitudes toward product development including its award-winning Trade Finance Gate client portal, and market leading customer service. 

Deutsche Bank

With 130 years under its belt, Deutsche Bank is one the most experienced providers of finance for global trade. Its integrated global network spans 80 locations in 40 countries, its primary area of expertise being the navigation and management the risks associated with import, export and domestic trade transactions. 

The company has a strong presence in key emerging markets spanning Asia Pacific, Central and Eastern Europe and Latin America. Here, it imparts key services including advisory and distribution services, documentary collection, documentary remittances, financial supply chain solutions, letters of credit, standard remittances, structured commodity trade finance, syndicated trade loans and trade receivables finance.

Standard Bank

Plaudits can be paid to South African figurehead Standard Bank in the realm of technological innovation. The firm leverages APIs to connect its internal systems with those of its clients. As a result, approximately 80 percent of its issuance procedures for lines of credit and guarantees are automated, with average execution time of just one minute.

The company excels in trade document management. Its core services include trade finance open account and supply chain solutions, documentary trade finance and international payments, and it’s also working closely on product development with fintech partner Traydstream.

Santander Group

Santander has positioned itself as a leading light on environmental, social and corporate governance, and is a truly valuable player in the global trade community. During the pandemic, the company sought to deliver solutions that would dampen economic hardships by addressing the needs of the individual countries in which it operates, offering financial assistance to SMEs that reached a peak of $1.2 billion daily between April and May 2020.

The company also reacted dutifully in other ways, namely through the development and deliverance of various digitization projects that prioritized public health. 

ING Group

With its 57,000 employees serving 39.3 million customers, corporate clients and financial institutions in more than 40 countries, the vast majority of ING’s business is conducted in European markets. The company offers an array of international payments, cash management and trade finance services including letters of credit, documentary collections and guarantees.

ING Group is an initiating member and key investor in Contour–a trade finance project seeking to transform the status quo through the deployment of blockchain-based technologies. 

Bank of America

As the name would suggest, Bank of America remains a stalwart and fan favorite serving the North American market. During the pandemic, the firm introduced its Intelligent Treasury Roadmap–an initiative built to optimize client treasury operations and working capital.

Through operational simplification and ongoing advisory expertise, the bank’s Global Transaction Services team was able to successfully help clients mitigate risk and detect and manage fraud during what was both a turbulent and opportunistic period.

BNP Paribas

BNP Paribas remains one of the top trade finance banks globally, operating more than 100 dedicated trade centers in 60 countries. Among its core specialties are the bank’s export and import services and solutions built to optimize cash conversion cycles.

The firm primarily prides itself on imparting key knowledge and expertise. Its network of 350 trade finance experts is readily leveraged to provide tailored training programs based on the location and requirements of individual client companies.

Commerzbank

Commerzbank’s headline figures include 50 billion pounds in trades spanning 150 markets and 50 currencies annually. Albeit an established player with a 150-year legacy, the firm has proactively invested in new technologies including that of blockchain. 

To this end, 2020 saw the company mastermind the first Turkish-German trade finance transaction of the Marco Polo blockchain network alongside Isbank.