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FOREIGN TRADE ZONES, PORTS AND ECONOMIC DEVELOPMENT FORCES CREATE AMERICAN SUCCESS STORIES

foreign trade zones
Archives, Features, Global Trade Daily

FOREIGN TRADE ZONES, PORTS AND ECONOMIC DEVELOPMENT FORCES CREATE AMERICAN SUCCESS STORIES

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The U.S. Foreign Trade Zones Board’s Annual Report to Congress is bullish on FTZs, finding that after several years of decline in zone activity largely related to a downturn in the petroleum sector, strong increases in all major categories were logged in 2017, the last year for which data are available.

Foreign trade zones provide economic incentives to companies importing or exporting international goods. Duty-free treatment is accorded to items that are re-exported, and duty payment is deferred on items sold in the U.S. market, thus offsetting customs advantages available to overseas producers who compete with producers on American soil.

Businesses can use FTZ space a variety of ways, including warehousing and distribution of non-ferrous metals for sale on the London Metal Exchange, warehousing spirits and alcohol and storing vehicles before they are sold in the domestic marketplace.

The value of merchandise received at America’s FTZs increased by 9.6 percent in 2017, to $669.2 billion, according to the report that was presented to Congress this past December. Merchandise received at warehouse/distribution operations increased by 15.5 percent, to $259.1 billion, while that received at production operations increased by 6.2 percent, to $410.1 billion.

Foreign-status inputs to FTZs increased by 11.2 percent, to $250.6 billion, and the value of FTZ imports accounted for 10.6 percent of all goods imported into the U.S. in 2017. The majority of merchandise admitted to FTZs (63 percent) is of domestic origin. The value of exports from America’s FTZs increased by 15.1 percent in 2017, to $87.1 billion, which represents 5.6 percent of the value of all goods exported from the U.S. Exports from FTZ production facilities accounted for two-thirds of all exports from FTZs. Employment at America’s 191 active FTZs increased by approximately 7 percent in 2017, to a new record of 450,000 workers at 3,200 firms that used FTZs during the year.

“The FTZ Board’s latest report confirms that the program continues to be a vital component of America’s trade policy,” says Erik O. Autor, president of the National Association of Foreign-Trade Zones (NAFTZ), which boasts 650+ members. “The competitive advantage for companies operating in an FTZ has enabled them to boost exports and employment, continuing their strong recovery from the recession.”

The Trade Partnership, a Washington, D.C.-based trade research firm, in February provided case studies on the success of FTZs as part of an NAFTZ-commissioned report. “This study measures, both quantitatively and qualitatively, the economic effects of FTZs on the communities in which the zones operate, which we refer to as Zone Economic Communities (ZECs),” states The Trade Partnership introduction to the research, which examined the economic impacts of FTZs in community employment, wages and value added. 

The study concluded the economic impacts of the U.S. FTZ program on communities in which FTZs are located are positive,” The Trade Partnership President Laura M. Baughman said during NAFTZ’s annual Legislative Summit in Washington on Feb. 12. “Many companies have the option to operate inside or outside the United States,” she noted. “They will make that decision based in part on the relative costs of doing business in the United States or abroad. To the extent the Foreign-Trade Zones program can provide positive financial reasons for a U.S. location, it should merit the support of U.S. policymakers.”

“We are very pleased that The Trade Partnership’s analysis has concluded that the U.S. Foreign-Trade Zones program has demonstrable positive economic impacts on the communities in which FTZs are located,” says NAFTZ Board of Directors Chairwoman Eva Tomlinson, who is also director of FTZ Solutions for UPS Trade Management Services Inc. “These real community impacts are in addition to the value that U.S. firms realize from using the FTZ program.” 

The survey included some individual success stories that follow:

FTZ-38 

(Spartanburg, South Carolina; Inland Port Greer; Port of Charleston) 

BMW broke ground on its first American automobile factory in 1992 in Greer, South Carolina, and the first cars rolled off the line in 1994. Before the German automaker’s arrival, Spartanburg was a ghost town of former textile plants and roughly 60,000 lost manufacturing jobs. BMW’s investment in South Carolina changed all that. Today, BMW employs more than 10,000 workers and produces around 400,000 vehicles annually, more than 70 percent for export to 140 global markets (with China the largest foreign destination, followed by Germany). Inputs imported by BMW duty-free under the FTZ program supplement inputs from 235 U.S. suppliers, 40 of whom are in South Carolina.

“As a consequence of this investment, BMW directly and indirectly adds $6.3 billion annually to South Carolina’s economy and leads to the employment of 36,285 people there,” says the German automaker. “The overall footprint in the U.S. is even larger, with value added by BMW of $15.77 billion and employment of 120,855. In each case, this includes both the direct contribution of BMW and the contribution via purchases of BMW and its employees that would not exist if BMW were not established in the United States.”

Earlier this year, BMW Manufacturing, citing Commerce Department data, said it led the U.S. in automotive exports by value for the fifth consecutive year. More than $8.4 billion in cars and SUVs were assembled in Spartanburg before passing through the Port of Charleston in 2018.

FTZ-154

(Baton Rouge, Louisiana; Greater Baton Rouge Port; Port of South Louisiana)

ExxonMobil is a leading example of a company making use of FTZs to import crude petroleum and process it into downstream products, mainly for domestic use in the U.S. but also for export. The oil company has three FTZ subzones in operation, two in Texas (Baytown and Beaumont) and one in Louisiana, where within FTZ-154, ExxonMobil operates a main refinery complex, a petrochemical plant, a tank farm storage facility and a plastics plant in East Baton Rouge Parish, a lubricants plant and a tank farm in West Baton Rouge Parish and the Sorrento Salt Dome in Ascension Parish. The company employs more than 6,600 employees and contractors in the Baton Rouge area, with payroll totaling $491 million.

Despite the exemptions from state and local ad valorem taxes made possible by the FTZ, ExxonMobil’s activities in the Baton Rouge generate millions in annual state and local tax revenue, from property taxes ($33.2 million in East Baton Rouge alone in 2015), to direct sales taxes ($26.3 million in East Baton Rouge), to other state and local taxes (more than $100 million, after credits and rebates). According to a 2017 study, one out of every eight jobs in the Baton Rouge area can be traced back to ExxonMobil. 

FTZ-26

(Newnan, Georgia; Georgia Ports Authority; Port of Savannah)

Yamaha Motor Manufacturing Corp. of America (YMMC), which has corporate offices in Cypress, California, and Kennesaw and Marietta, Georgia, decided in 2011 to take advantage of more efficient production that would result from a centralized location, including one that benefits from the efficiencies offered by the FTZ
program. Thus began the transfer of nearly all YMMC mid- and large-engine ATV production from overseas facilities to Newnan, Georgia. Yamaha directly employs about 3,400 workers in the U.S., but more than 2,000 of them are in Georgia alone, with approximately 1,600 within FTZ-26.

Newnan’s factories spend over $170 million annually at more than 100 U.S. parts suppliers, 30 percent of which are located in Georgia. By 2018, Yamaha had invested more than $354 million in its Newnan facility, with that spending rippling through the local community and beyond. Meanwhile, savings YMMC reaps within FTZ-26 have been fed back into the local community, including Yamaha-sponsored environmental projects for schools, youth character-building initiatives, scholarships for high school students and support for local teachers. 

FTZ-86

(Tacoma, Washington; Northwest Seaport Alliance; Port of Tacoma)

Helly Hansen imports from Asia specialty water-resistant cold weather apparel and footwear for professionals working in extreme environments. The Helly Hansen brand had a strong presence in Canada when its Norwegian owners looked to expand beyond the Great White North to all of North America. Savings afforded by the U.S. Foreign-Trade Zone program tipped the scales in favor of making Auburn, Washington, which is within the Port of Seattle’s FTZ-5, the location for Helly Hansen’s U.S. warehouse in 2011.

Four years later, growth spurred the need to open a bigger warehouse and a location was found within the Port of Tacoma’s FTZ-86, where all operations consolidated. About 55 percent of Helly Hansen’s imports into Tacoma are re-exported to Canada, and the company pays no duties on those products. It does pay U.S. import duties on products destined for the U.S. market, when they exit the FTZ for U.S. sale, but while products wait at the warehouse, the company saves money from deferred duty (the value of tighter cash flow and reduced interest costs) and reduced processing fees. The Canadian Tire Corp. purchased Helly Hansen in 2018, and the company now employs 103 people in Tacoma, up from about 50 in Auburn in 2011. Indirectly, the company supports jobs at the port processing 400-500 containers a year, containers that would otherwise go directly to Canada. 

FTZ-18 and FTZ-45

(San Jose, California; Port of Oakland; Portland, Oregon; Port of Portland)

Fremont, California-based Lam Research Corp., a global supplier of innovative wafer fabrication equipment and services to semiconductor manufacturers around the world, creates, assembles, repairs and distributes equipment within San Jose’s FTZ-18 (since 2010) and Portland’s FTZ-45 (since 2016). Around 6,000 employees work in zone-based activities. Components and materials sourced from abroad are admitted free of duty under the FTZ program; those duties would otherwise range from zero to 10.7 percent. Lam estimates that program benefit alone saves the company a significant amount of its import costs. But the FTZ has also helped Lam manage fluctuations in supply chain and international trade. The company has poured zone savings into research and development throughout the U.S.

FTZ-25

(Oakland Park, Florida; Port Everglades)

ProdecoTech, which makes electric bicycles that retail for $1,000 to $5,000 each, was founded in 2008. It would not now employ about 100 people in Oakland Park, Florida, were it not for the FTZ program. ProdecoTech bikes used to be finished abroad, but that changed in 2015, when the company began taking components imported from China, Japan, Taiwan, Korea, Vietnam and elsewhere in the U.S. to assemble the rides in Oakland Park.

Thank the benefits from being within FTZ-25, which allowed ProdecoTech to avoid paying import duties that can range up to 10 percent. Keeping final assembly stateside as opposed to overseas is now saving the company about 4 percent per bike. And that has allowed ProdecoTech to sell goods 30 percent below what its competition charges. Because American workers are doing the assembly, ProdecoTech has a tighter rein on quality control. 

FTZ-272

(Bethlehem, Pennsylvania; Port of Philadelphia)

Piramal Critical Care Inc. was a U.S. pharmaceutical manufacturer that could no longer compete paying tariffs on imported inputs while its foreign competitors shipped finished products here duty free. That put a target on the jobs of 95 employees in Bethlehem, Pennsylvania, where they manufactured and distributed inhalation anesthetics from chemicals and other materials sourced from abroad, primarily India.

After toying with eliminating 70 high-skilled positions and moving production abroad, Piramal launched a Hail Mary by applying for FTZ benefits in 2012. The application was approved, and it has saved Piramal hundreds of thousands of dollars annually in duties. Not only was the company able to stay in Bethlehem, it went on to add even more jobs, modernize its facility and increase capacity three-fold. Piramal today employs about 120 workers and exports to more than 100 countries. 

FTZ-176

(Rockford, Illinois; Port of Rockford)

UniCarriers Americas, which was previously known as Nissan Forklift Corp., sought approval to manufacture rider-type forklift trucks in Rockford, Illinois’ FTZ-176 in 2005. Imported components, which accounted for about 48 percent of the finished forklift truck’s value, were charged duties as high as 9 percent. After contending FTZ benefits would improve UniCarriers’ competitiveness in export markets, the company won approval in 2006. That has gone on to save UniCarriers about $2 million a year, according to the company, which adds employee time spent on handling and filing documents daily for U.S. Customs and Border Protection was eliminated. That’s a win-win when you consider a booming U.S. economy and e-commerce have created strong demand for forklift trucks.

Fortunately, UniCarriers has redirected some duty savings into adding space and employees as well as funding training for a workforce operating ever more sophisticated new equipment. Whereas many manufacturers are replacing workers with robots, UniCarriers is retraining and redeploying employees to work and train alongside automation, according to CEO and President James J. Radous III. He cites figures that show UniCarriers has increased its automation capabilities by 50 percent while doubling its number of employees from about 300 to 600 over the past five years. 

The preceding were the success stories cited in The Trade Partnership report, but there are also other foreign trade zone success stories out there that include the following:

FTZ-84

(Houston, Texas; Port Houston)

FTZ-84 was on a roll in 2017, adding 13 companies, which is no surprise when you consider the Houston region’s rapid growth. As a result, more large importers and exporters are taking the advantage of the financial benefits of using FTZ-84.

One company reaping such benefits is Houston-based Dixie Cullen Interests, which specializes in steel, machinery and other industrial materials. “We are excited about the opportunity that it has opened up for us,” says Dixie Cullen’s President Catherine James. “And we know that Port Houston is where we need to be.” That’s especially true when you consider Port Houston, which owns or operates eight terminals, has committed to invest $1 billion-plus during the next several years in expansion and improvement projects. About two-thirds of all containers in the U.S. Gulf move through Houston, whose port is one of the world’s largest.

FTZ-87

(Lake Charles, Louisiana; Southwest Louisiana Economic Development Alliance; Port of Lake Charles)

The five parish area bordered by Southeast Texas and the Gulf of Mexico is anchored by Sulphur and Lake Charles, where companies from the U.S., Europe, Africa and Asia have staked claims in industrial growth expansion totaling $97 billion.

An extensive rail network makes its way through Southwest Louisiana with Union Pacific and Kansas City Southern servicing the area. Interstates 10 and 210 service a combined 100,000 motorists a day and complete routes between America’s Pacific and Atlantic Coast. And Lake Charles Regional Airport is served by United Airlines, whose hub is in Houston, and American Airlines with its Dallas/Fort Worth hub. But the region has more going for it than simply location, according to George Swift, CEO and president of the Southwest Louisiana Economic Development Alliance. “Our people and companies are making history,” he says. “Each day that passes, companies from across the globe are calling to learn about development and expansion possibilities while others call about the tens of thousands of temporary and permanent jobs that are going to be generated by industrial expansion.”

FTZ-74

(Baltimore, Maryland; Baltimore Development Corp.; Port of Baltimore)

FTZ-74 is one of the most active and largest zones in the United States, which is fitting considering the Port of Baltimore is among America’s 10 busiest ports. With merchandise such as cars, paper and steel, total FTZ-74 international revenue rose from $44 million in 2016 to more than $396 million in 2017, a whopping 800 percent increase! The total value of shipments through Baltimore’s FTZ was more than $19.9 billion in ’17. That only figures to rise as Maryland recently approved a contract to complete the fill-in of a wet basin at the Helen Delich Bentley Port of Baltimore’s Fairfield Marine Terminal.

That project will create more land to help handle the port’s surging auto and roll on/roll off (farm and construction machinery) cargo. Among those as pleased as a Baltimore Bang cocktail over this development is Maryland Governor Larry Hogan. “The Port of Baltimore is the number one auto port in the nation and continues to break cargo records every month,” Hogan says. “Our administration is committed to furthering this growth and strongly supports our great port and its thousands of hardworking men and women handling the millions of tons of cargo coming in throughout the year.”

FTZ-196

(Fort Worth, Texas; AllianceTexas; Dallas/Fort Worth International Airport)

Known as the Alliance Foreign-Trade Zone, FTZ-196 in North Fort Worth sees more action than any other general purpose FTZ in the country. AllianceTexas is a 17,000-acre, master-planned community anchored by the world’s first industrial airport. Also within its boundaries are the Alliance Global Logistics Hub, Circle T Ranch, Heritage, Alliance Town Center, Saratoga and Monterra Village projects. A total of 265 companies that have created more than 30,000 jobs. Among them are Cinram, Hyundai, LEGO, Motorola, GENCO ATC, Callaway Golf and Alliance Operating Services.

Since its inception, AllianceTexas has generated a $40.65 billion economic impact for the North Texas region. Steve Boecking, vice president of Hillwood Properties, the Perot company that developed the Alliance brand, says of the $4 billion in annual FTZ-196 imports: “Regional efforts to strengthen international relationships and to build new global trade partnerships have also resulted in an increased volume of foreign goods being shipped through North Texas.” 

THE POWER OF POSITIVITY

The National Association of Foreign Trade Zones study found the following positive economic measures when examining each of 251 Zone Economic Communities (ZECs) to determine the impact of foreign trade zones:

-Employment, wages and value-added increased in the broader zone community following the establishment of an FTZ. Those gains are the greatest in the early years for employment and wages, and throughout the period for value added. This increased economic activity is also evident once a decision is made to form an FTZ.

-The establishment of an FTZ caused a positive increase in employment growth in the surrounding ZEC (up 0.2 percentage points), wage growth (up 0.4 percentage points), and value-added growth (up 0.3 percentage points), typically eight years and later, after establishment of the FTZ. The impacts begin sooner, in years six and later, for wages and value added in small- and medium sized ZECs.

-Company access to FTZ benefits had a substantial ripple effects through the companies’ supply chains, which are typically located nearby. 

Downloaded the complete report at www.naftz.org.

FedEx
Archives, Uncategorized

FEDEX, UPS, & AMAZON SCRAMBLING IN THE AIR FOR FAST, FREE SHIPPING

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Christmas came in May for Amazon Prime subscribers, who were informed the platform’s tens of millions of items would be available for free same-day delivery and two-day shipping. 

“Prime Free One-Day is possible because we’ve been building our network for over 20 years,” reads a company statement. “This allows Amazon to work smarter based on decades of process improvement and innovation, and to deliver orders faster and more efficiently.” 

Customers reap the benefits as Rakuten Intelligence research shows that over the past two years, the time from purchase to delivery has been slashed from 5.2 days to 4.3 days on average. And yet, Amazon is faster still, at 3.2 days.

Other retailers took the Amazon news like a lump of coal, with Walmart scrambling to unveil free one-day shipping without a membership fee. Target already had such a program for card-carrying loyalty shoppers. FedEx revealed it was parting ways with Amazon for “strategic reasons.”

Meanwhile, industry watchers caution about the hidden baggage that comes with rapidly delivered packages.

Competition is Fierce

Despite the cheery one-day news, Amazon still faces competition from Walmart, which boasts more than 4,700 store locations and an extensive network of warehouses from which it can deliver packages. Another worthy contender is XPO Logistics, which is among the largest third-party logistics providers with 90 facilities across the country. 

During his December earnings call, FedEx CEO and founder Fred Smith said his company views Amazon “as a wonderful company and service and they’re a good customer of ours. We don’t see them as a peer competitor at this point in time.” 

Mere months later, FedEx severed ties with Amazon and partnered with Dollar General on package delivery services, with expectations to offer the service in more than 1,500 stores by late in the summer, building to over 8,000 stores by 2020. 

“We believe this move is an attempt to increase delivery density in lower population areas,” states the Morgan Stanley Research on the move. “… The Dollar General partnership follows a series of headlines including FDX’s AMZN customer loss, move to seven-day ground delivery, and incentive compensation modification ahead of their June 25th fourth quarter earnings release.

So much for not seeing Amazon as competition. FedEx’s annual report, which was released on July 16, mentioned Amazon six times and included this context: “We face intense competition.”

“[I]f customers, such as Amazon.com, further develop or expand internal capabilities for the services we provide, it will reduce our revenue and could negatively impact our financial condition and results of operations,” the FedEx report states. “News regarding such developments or expansions could also negatively impact the price of our common stock.”

And how is this for sounding completely opposite to what Smith had said just seven months prior? “[S]ome high volume package shippers, such as Amazon.com, are developing and implementing in-house delivery capabilities and utilizing independent contractors for deliveries, and may be considered competitors.”

Look! Up in the Sky!!

“Amazon.com is investing significant capital to establish a network of hubs, aircraft and vehicles,” the FedEx annual report notes.

That’s striking when you consider the far fewer times FedEx rival UPS is mentioned in the same report. Keep in mind that UPS currently has 564 cargo jets and thousands of facilities and fulfillment centers around the world, while Amazon has one air hub and options on 100 planes—by 2021, according to a June announcement. 

Ditching Amazon as an air customer led to FedEx slashing prices to fill its planes, according to numerous reports.

As the shipping giants fight for the skies, benefits are being reaped on the ground. Hillwood, developer of the 26,000-acre master-planned AllianceTexas development near Fort Worth, announced in June it has acquired control of 600 acres of additional contiguous land. Strategically located between Fort Worth Alliance Airport and the BNSF Railway Alliance Intermodal Facility, the new Alliance Westport property increases Hillwood’s potential for more manufacturing, large-scale logistics facilities and aviation sites adjacent to the airport’s recently expanded runways.

Alliance Westport is already home to more than 8 million square feet of industrial and aviation development, including key logistics facilities for UPS, FedEx and Amazon Air. When combined with BNSF Railway’s intermodal facility volumes, these three hubs will offer Alliance Westport customers unparalleled access to rail, highway and air shipping options, all within a one-mile radius. The railway and roads have direct routes to Mexico and expedited transit times to the West Coast ports of Los Angeles and Long Beach.

“This is one of the most significant land acquisitions in the history of AllianceTexas,” says Tony Creme, senior vice president of Hillwood. “As Alliance Airport and the BNSF Railway Alliance Intermodal Facility continue to expand and strengthen the foundation for AllianceTexas’ commercial growth, this new property in Alliance Westport will serve as a strategic link between these two pieces of critical logistics infrastructure and offer unparalleled connectivity to our customers.”

 But What About the Planet?

As efforts intensify to move products faster, speedy deliveries are taking a toll on the environment, according to Patrick Browne, director of Global Sustainability at UPS. 

“The time in transit has a direct relationship to the environmental impact,” Browne told CNN Business on July 15. “I don’t think the average consumer understands the environmental impact of having something tomorrow versus two days from now. The more time you give me, the more efficient I can be.”

A van schlepping goods to e-commerce customer doors does remove from the road the vehicles of those who would otherwise be driving to brick and mortar stores, but a 2012 University of Washington story found that advantage is erased if the delivery route begins far away and items are coming immediately, because the ability to lump orders together is diminished. 

Last-mile services such as Amazon Flex and Walmart’s Spark Delivery often deliver only a few items at once in personal vehicles or small vans. A new option called Amazon Day, which offers discounts and rewards to customers who choose “no-rush shipping,” does allow for the consolidation of orders, however.

Amazon’s competition can take solace in the fact that Amazon was already absorbing added costs for fast deliveries before the Prime one-day announcement, which included news of an additional $800 million investment in logistics infrastructure.

Archives, Global Trade Daily, Special Reports

How Innovation is Changing the Pace for Industry Players

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Westerville, Ohio-based DHL Supply Chain, a leader in contract logistics in the Americas and a part of the Bonn, Germany-based Deutsche Post DHL Group, issued a report that found 65 percent of responding companies believe technology is having a significant impact on their supply chain.
That begs the question: Who are the other 35 percent? Because keeping up with technology is critical for just about any business these days, but most especially for those that rely on supply chains, which are tasked with moving everything from retail products and industrial equipment to perishable foods and critical medicines.

Essentially, we are at a point in the 3PL industry where companies must decide whether they are going to continue being the equivalent of hotels, taxis and encyclopedias or Airbnb, Uber and Google. The future is not now, we are already blazing in the fast lane.

DHL was already leveraging emerging technologies at 85 of its 430 North American facilities in November, when the 3PL announced it was making another $300 million technology investment to create the next generation supply chain. The goal now is to have emerging technologies deployed in 350 of DHL’s North American facilities and transportation control towers.
These technologies are going to vary by customer needs, based on the outcomes of research and pilot programs completed by DHL’s internal innovation teams and collaboration with dozens of external innovators. But it is already being played out in the acceleration of robotics, augmented reality, robotics process automation, IoT and DHL’s proprietary end-to-end visibility solution MySupplyChain.

“This investment is about a holistic view of emerging technologies that enables our customers to achieve their growth and profitability goals,” said DHL Supply Chain North America CEO Scott Sureddin in the announcement. “Our customers’ needs are not homogenous as each business and segment has unique challenges and levels of maturity. Therefore, it is important that our customers can benefit from our experiences and expertise with a variety of emerging technologies.”

This summer, DHL’s 24,000-square-foot Americas Innovation Center is scheduled to open just outside Chicago, where technologies and innovations the business is already implementing across the region will be exhibited. And the 3PL began 2019 by implementing innovative processes to improve the hiring and retention of warehouse workers across its network. That rapidly paid off in the form of 445 daily applications and nearly 32,000 fewer hours spent on administrative hiring tasks.

“Our customers rely on us to provide talent that consistently meets their needs; and to accomplish that, we apply the same level of operational excellence to talent acquisition and retention as we do in developing supply chain solutions for our customers,” says Tim Sprosty, senior vice president of Human Resources at DHL Supply Chain. “Using a combination of innovative thinking and disciplined execution to attract and retain the people our business depends on is resulting in significant benefits.”
Profound (and rapid) change is indeed a result of innovation. What follows are just some of the developments you should be paying attention to lest you get left behind with the supply chain equivalents of stale mints under your pillows, sticky cab seats and out-of-date World Books.

DB Schenker and IAM Robotics’ Warehouse of the Future

Last fall brought the announcement that DB Schenker Americas, which is headquartered in Miami, Florida, and serves this side of the globe for Essen, Germany-based logistics solutions and supply-chain management giant DB Schenker, and IAM Robotics of Sewickley, Pennsylvania, are pooling together their respective expertise to develop the “warehouse of the future.”

DB Schenker Americas is utilizing IAM’s mobile, piece-picking robotic technology because, as the companies’ reps will tell you, the modern-day supply chain does a lot more than move products from one place to the next. Automation is key to meeting customer demands for flexibility, visibility, and transparency.

MHI, the nation’s largest material handling, logistics and supply chain association, as well as the presenter of the ProMat and MODEX expos, reports that 34 percent of companies are looking to robotics and automation to improve overall supply chain efficiencies by handling previously manual tasks such as picking, sorting, inspecting, storing, handling and classifying products. Within five years, MHI expects robotics and automation adoption to rise to 53 percent.

“This expected rise in adoption suggests that firms recognize robotics and automation as integral tools to maintain and increase competitive advantage through NextGen supply chains,” the MHI report states. “As automation becomes smarter, safer, and more accurate, it is also becoming less expensive and easier to implement—helping to drive adoption.”
Which brings us to the DB Schenker-IAM Robotics smart warehouse. “This is a true collaboration in the sense that DB Schenker knows the logistics industry inside and out, and IAM Robotics has an incredible depth of technological knowledge and innovation,” says John Stikes, DB Schenker America’s director of Innovation and e-commerce. “By bringing these two powerful forces together, we can challenge one another and come up with solutions that literally take warehousing to the next level.”

A warehouse of the future or “smart factory” concept folds nicely into Industry 4.0, which is the current trend of using automation and data exchange (i.e., the Internet of Things, cloud computing, cognitive computing, etc.) in manufacturing technologies.

“In the warehouse, fully-automated applications will be the key to sustainability and competitiveness in the new marketplace,” Stikes says. “Through automation, companies can achieve compelling economic advantages while alleviating their labor issues, and then redeploy that labor to more thought-involved processes and gain enhanced flexibility in their operations.”

Schneider and Trucker Tools’ Load Track and Smart Capacity Software

Schneider generated $4.4 billion in revenues in 2017 and is routinely named among the best third-party logistics companies in the United States. But success can bring headaches, and the Green Bay, Wisconsin-based company’s brain trust was chomping aspirins over the need to support its growing network of carriers and freight brokerage operations, which just happen to be among the nation’s largest.

What’s a mighty 3PL to do? Look to another third party, which is what Schneider’s Transportation Management division did when it latched onto Trucker Tools. Specifically, Schneider adopted the Reston, Virginia-based company’s load tracking, carrier engagement, capacity visibility and predictive freight-matching software.

“We are growing our capabilities with Trucker Tools to deliver a better experience for carriers and easier access to the high-quality loads they expect from Schneider,” beams Erin Van Zeeland, Schneider’s senior vice president and general manager of Logistics Services.

As Schneider moves loads and interacts with thousands of carriers daily that include small trucking fleets and owner-operators in North America, the 3PL is incorporating Load Track and Smart Capacity, two of Trucker Tools’ principal, cloud-based software applications. “With Load Track, our carriers have an easy-to-use platform for delivering quality information on the progress and status of loads in transit as well as visibility to available loads,” says Van Zeeland. “This allows us to more efficiently connect the right loads with the right carriers while enhancing the visibility shippers want.”

Meanwhile, the Smart Capacity platform provides brokers with predictive freight-matching tools and real-time, trusted visibility into when and where trucks are available. Schneider is also leveraging Trucker Tools’ mobile driver app, which can be accessed by the expanding network of small carriers and micro-operators. Indeed, Van Zeeland concedes the app was “a big selling point” because of its popularity with small and micro-carriers, who appreciate having at their fingertips “a variety of useful driver-centric tools, information and resources.”

The mobile app, which has been downloaded by more than 500,000 truck drivers, allows the Load Track feature to use a smartphone’s GPS software to continually update and deliver precise location data, which is sent from the driver’s device to the broker over Trucker Tools’ confidential, secure network.

BNSF Logistics and Blume Global’s Digital Supply Chain Platform

BNSF Logistics, a multi-modal, 3PL services provider specializing in the movement of freight around the globe, obviously figures even bigger is even better. So to fuel a major worldwide expansion, the 3PL recently adopted Blume Global’s digital supply chain platform.

Pleasanton, California-based Blume Global, which was formerly known as REZ-1, is a high-growth company with a 24-year history of delivering innovation in the global supply chain ecosystem. Its digital supply chain solutions now help BNSF Logistics—a subsidiary of Burlington Northern Santa Fe, LLC, a Berkshire Hathaway company—optimize the intermodal transport services it offers to customers across the globe.

Specifically, Blume Global has tightly integrated BNSF Logistics’ distributed supply chain—collecting and analyzing data to optimize every touchpoint between the 3PL, its logistics providers and its customers. This data-driven approach includes powerful end-to-end global visibility for cargo and containers around the world, across every mode and provider, down to the last mile.

BNSF Logistics is also tapping into Blume’s vast global network of more than 4,200 motor carriers for its customers and using Blume Finance to streamline the entire freight audit and pay process across its network of suppliers.

“Blume Global is a critical digital supply chain platform that will allow us to deliver an exceptional logistics experience to our customers while driving aggressive global expansion goals,” says Dan Curtis, the BNSF Logistics president. “For our customers, Blume’s capabilities enhance our ability to manage our customers’ complex supply chains. This addition will help take us to the next level, arming us with critical real-time information and powerful, data-driven capabilities to measure and optimize our entire process while maximizing efficiency, as well as leveraging Blume’s comprehensive network of motor carriers.”

“BNSF Logistics has moved cargo across the country and around the world for years,” notes Blume Global’s CEO Pervinder Johar. “As they continue to extend their capabilities into new markets, geographies and modes, Blume Global is dedicated to helping BNSF Logistics deliver excellent, consistent logistics experiences for its customers. Blume’s capabilities will power BNSF Logistics’ data-driven approach to integrate, measure and ultimately optimize every interaction within its customers’ supply chains.”

Blume Global’s track record obviously stood out for BNSF Logistics (which does, after all, know a thing or three about tracks). Among Blume’s other happy clients are Union Pacific and Norfolk Southern Corp. Blume, which unveiled its name change from REZ-1 during last September’s IANA Intermodal Expo in Long Beach, announced in January that it is now being listed as a Representative Vendor in Gartner’s “Market Guide for Real-Time Visibility Providers.”

USPS and Tive Inc.’s Return-By-Mail Tracker

Tive Inc., a leading provider of in-transit supply chain tracking solutions, has partnered with the U.S. Postal Service on a return-by-mail tracker that enables seamless return logistics for shipments within the 50 states. The new capability significantly simplifies return logistics for manufacturers and shippers that rely on Tive’s tracker and software solution to maintain end-to-end visibility into their in-transit goods, boasts the Cambridge, Massachusetts-based company.

“With our new return-by mail tracker, we have significantly accelerated tracker reuse and reduced the complexity of return logistics for our customers,” says Tive CEO and founder Krenar Komoni. “As Tive works with more and more companies to bring a new level of visibility to their supply chains, we are committed to making it as easy as possible for our customers to use our solution and integrate our trackers and software into their existing operations.”

Tive provides a sensor and software solution that allows supply chain managers to track and analyze the location and condition of their shipments in real time. The company’s proprietary low-power multi-sensor tracker uses cellular connectivity to provide real-time monitoring and analysis of the location, climate and integrity of shipments. Supply chain managers access this data and analysis through the Tive software platform, where they can set up custom alerts like ETA warnings, temperature deviations or geofences. They can also use the Tive API to pull data into external SCM, TMS or ERP systems and gather insights into their supply chain.

Tive’s newly developed return-by-mail tracker can be placed directly in any postal box in the U.S. without the need for any special labeling or packaging. This means that trackers can be placed with shipments going anywhere in the country, and the recipient can just collect the trackers and put them in any standard mailbox to get them back to Tive or the origin address. The tracker comes with a sturdy mailing sleeve that has been approved for use by the Postal Service.

Meanwhile, Tive is pursuing a similar service with international postal services that would enable companies to take advantage of global return logistics at limited additional cost.

Archives, Departments, Executive Getaways, Global Trade Daily

EXECUTIVE DESTINATION: CALIFORNIA

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California is a big state, one of the biggest, actually, with its 163,696 square miles making it the third largest in the United States in terms of area and its 39.5 million residents making it the most populous in America.

When it comes to travel to or within the Golden State on business, there is no single destination that is a central location to the hubs of industry, unless that industry is agriculture, in which case just about anywhere in the Central Valley should work just fine. Direct flights there on major airlines could be an issue, however.

Otherwise, you would not fly into, say, Los Angeles International Airport—the world’s fifth busiest and second only to Hartsfield-Jackson Atlanta in the U.S.—if your business meetings were in Silicon Valley. Nor would you stay in, for instance, San Francisco—whose $878 billion GDP gave it America’s third largest urban economy in 2017—if your trade convention was in sunny San Diego.

Getting There

For our business travel purposes, we are going to focus on San Diego, Los Angeles, San Jose (which is in the heart of Silicon Valley) and San Francisco.

The international airports in all four of those cities are served by Air Canada, Alaska, American, British Airways, Delta, Frontier, Hawaiian, JetBlue, Southwest, United and Virgin. Allegiant, Condor, Japan Airlines, Spirit and Sun Country fly in and out of all except San Jose.

Chances are that American and United are airlines that use your nearest airport for flying across the continent. Both figured prominently in the 15th annual Tested Reader Survey in December’s Global Traveler. More than 22,000 frequent business and luxury travelers named the best in a variety of travel-related categories.

American was named the Best Airline in North America and, for the third consecutive year, the Best Airline for Domestic First Class. American Airlines AAdvantage was deemed the Best Frequent-Flyer Customer Service.

United Airlines MileagePlus was deemed the Best Overall Frequent-Flyer Program for the 15th straight year and Best Frequent-Flyer Bonus Program for the sixth consecutive year.

The airline also just announced that its new Boeing 787-10 Dreamliners will fly United “Premium” transcontinental routes between Newark and California beginning Jan. 7. The newest and biggest version of Boeing’s 787 widebody, the jets will also start flying from Newark to San Francisco on Feb. 14.

Seating 318 passengers, the 787-10s include 44 lie-flat business-class seats and 21 of United’s new “Premium Plus” recliner seats that split the difference between business-class and typical coach seating. Also onboard are 54 extra-legroom Premium Economy seats and 199 in standard coach.

Staying There

U.S. News & World Report identified the top business hotels of 2018 in large American cities by considering amenities, reputation among professional travel experts, guest reviews and hotel class ratings.

What follows is a rundown of each of our target California cities, with the nightly rates being what was quoted on Dec. 10, 2018 (meaning current prices may vary).

LOS ANGELES

-The Peninsula Beverly Hills

Stars: 5

Critic rating: Excellent

Nightly rate: $605

Amenities: Business center with a few computers, color printers, executive desks and a fax machine. Six meeting spaces accommodate events of up to 250 people.

-Montage Beverly Hills

Stars: 5

Critic rating: Excellent

Nightly rate: $545

Amenities: 24-hour business center. On-site meeting planners. Variety of rooms, including ballrooms, are configurable to all types and sizes of events.

-The London West Hollywood

Stars: 5

Critic rating: Great

Nightly rate: $339

Amenities: Meeting and event coordinators. Media equipment to facilitate audiovisual presentations. 24-hour business center. Access to printers, personal computers and an ATM.

SAN DIEGO

-Hotel del Coronado (Coronado Island)

Stars: 4

Critic rating: Excellent

Nightly rate: $268

Amenities: 47 indoor event venues ranging in size from 300 to 12,500 square feet. Event planners. Full-service FedEx Center with computer workstations with Internet access, fax and copy service, shipping and postal services and more.

-La Valencia Hotel and Spa (La Jolla)

Stars: 4

Critic rating: Great

Nightly rate: $299

Amenities: Four meeting rooms, including a ballroom with a terrace, a boardroom and The Galeria, which can hold up to 40 participants. The Med and Patio Sol can also be booked for many types of meetings.

-Omni San Diego Hotel (Downtown)

Stars: 4

Critic rating: Great

Nightly rate: $144

Amenities: Space for up to 1,200 people. 27,000 square feet of meeting space. Grand Ballroom measures 9,266 square feet.

SAN FRANCISCO

-The Ritz-Carlton

Stars: 5

Critic rating: Excellent

Nightly rate: $359

Amenities: 18 event rooms. Up to 500 attendees can enjoy the ballroom, which can also be divided into four smaller spaces. On-staff event planners.

-The St. Regis

Stars: 5

Critic rating: Great

Nightly rate: $356

Amenities: 22,000 square feet of indoor and outdoor event space. Board meetings or business receptions for up to 600 attendees can be handled.

-Fairmont

Stars: 5

Critic rating: Great

Nightly rate: $195

Amenities: 72,000 square feet and dozens of meeting rooms. Event of any kind for up to 2,300 people can be handled. Sustainable meeting options.

SILICON VALLEY

No U.S. News & World Report data was available for the region, so we turned to Oyster.com (“The Hotel Tell-All”), which boasts of knowing “what business travelers look for in hotels.” Instead of relying on guests and professionals, Oyster reviews properties around the world in person.

-Four Seasons Hotel Silicon Valley at East Palo Alto

Stars: 5

Nightly rate: $469

Amenities: 24-hour business center with secretarial services, translation and interpretation services and well-equipped meeting rooms.

-Rosewood San Hill (Menlo Park)

Stars: 5

Critic rating: NA

Nightly rate: $485

Amenities: Rooms have large work desks with several power outlets and comfortable seating. Nearly 17,000 square feet of indoor and outdoor meeting space with high-tech amenities and private dining rooms.

-Aloft Silicon Valley (Newark)

Stars: 4

Critic rating: NA

Nightly rate: $134

Amenities: Comfortable work desks. Quiet area, which is a 20-minute drive away from Palo Alto, the W hotel boasts “a mellow vibe perfect for unwinding after a day of work.”

 

Archives, Global Trade Daily, Ocean Carriers

Everyone’s Breaking Into Breakbulk

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Time was breakbulk, project cargo and multipurpose/heavylift were their own niche sector on the global shipping spectrum, but many of today’s carriers are taking it all, from MPV/HL to roll-on/roll-off (ro-ro) to go along with their regular old vanilla container hauling (not to suggest said containers are filled with vanilla, although they could be).

The “Big Three” carriers—MSC, CMA-CGM and Maersk—continue competing with one another by each entering the comparatively lucrative breakbulk and project cargo market, which has also drawn such ro/ro specialists as Grimaldi, NYK and MOL.

For its “global out-of-gauge and breakbulk services,” MSC advertises “first class project cargo management, no matter whether you have a requirement for heavy lift cargo, or for oversized cargo which cannot fit inside a standard container.” MSC can point to more than 40 years of experience in shipping oversized freight and their “expert project cargo logistics team” that can help with the planning and execution of special loadings.

Not to be outdone, the CMA CGM website states, “Our dedicated experts will take pride in providing you with our Special Cargo services and will find with you reliable shipping solutions, whether you’re shipping sensitive materials or heavy and bulky equipment but also will take extra care of Aid and Humanitarian cargo that often exceeds the size of standard containers.”

Size matters, of course, as CMA CGM can rely on the expertise of its 755 agencies in more than 160 countries all around the world as well as an extensive network of ports, terminal operators and suppliers. “Our teams can deliver a seamless door-to-door service and integrated one-stop-shop solutions for your Special Cargo anywhere in the world,” the promo boasts.

COSCO Shipping also relies on a large fleet and experience in extra-heavy hauling. This was demonstrated in February, when the sound section of the Maersk Honam was successfully loaded aboard COSCO’s heavy-lift vessel Xin Guang Hua on open waters outside Dubai. The 228.5-meter long item arrived in March at Hyundai Heavy Industries in South Korea.

Maersk has been accepting breakbulk as well, with company officials pointing to the opportunity to be able to carry an entire project as opposed to select components that fit neatly in traditional containers. The carrier does assess breakbulk or project cargo on a case by case, depending on available space and vessels, the length and width of the cargo and the terminals to be called.

“We’ll use special gear, extra labor, and oversee operations,” Karen Hicks, Maersk’s global client manager, told JOC.com in March. “There are no cut and dried solutions.” Her company is searching for more solutions with the creation of special project cargo teams and online booking tools, however.

Wallenius Wilhelmsen Ocean (WW Ocean) is occupying the space in between containers and lift-on/lift-off (lo/lo) or geared MPV/HL, stowing cargo under the deck of ro-ro ships where less packaging and handling is required. WW Ocean officials say they see growth potential in being able to handle a single piece of breakbulk cargo, multiple pieces or pieces and materials for large, multimillion-dollar projects handled over several voyages.

Customers should be warned that pricing can be tricky. As opposed to a standard container rate, carriers have to factor in trade lanes, weight and volume, cargo type, and any special equipment needed, such as mobile loading platforms (mafis) or jack-up trailers. Surcharges for bunkers, port costs, and other assessorial charges must also be factored in. And then there are the costs for securing different types of cargo along the trade routes.

The variety of elements to consider has not swayed Höegh Autoliners away from offering transportation for all types of breakbulk cargo, as the carrier handles close to 6 million cubic meters of high and heavy and breakbulk cargoes annually worldwide. For breakbulk, project and other “out-of-gauge” cargo, Höegh relies on modern and specialized rolltrailers, which are specially designed for smooth and safe transportation of heavy and/or long breakbulk cargo.

G2 Ocean is only two years old, so most would consider the carrier new to the breakbulk game. But company officials want you to know that they actually have 50 years of experience in the sector thanks to G2 Ocean being a joint venture of two of the world’s leading breakbulk and bulk-shipping companies: Gearbulk and Grieg Star.

“We operate the largest fleet of open hatch vessels worldwide,” proclaims the G2 Ocean website. “In addition we operate a substantial fleet of conventional bulk carriers. With 130 vessels and 13 offices on six continents, we can serve all our customer’s needs. Our vessels are tailor-made for breakbulk cargoes like forestry products, steel and project cargoes. Advanced systems make shipping with us easy. The passion and expertise of our people put our customers at ease. This is the basis for reliable, efficient, flexible, high-quality and innovative services.”

However, you do not have to be a large, global conglomerate carrier concern to specialize in breakbulk and project cargo. On the other end of the roster is Florida Barge Corp. (FBC), whose 150- to 400-foot long tubs were engineered and constructed to transport heavy and concentrated cargo loads.

Routinely operating in the waters of the U.S. East Coast, the Gulf Coast, Mexico, the Caribbean and Central and South America, FBC offers project cargo, heavy-lift, and module transportation services—at rates that are less or at least competitive with the big boys.

Founder Brendan Moran boasts more than 15 years of experience in the marine transportation and project cargo industry. “Whether your needs include loading and transport of bridge beams or dredge related equipment,” states Moran’s online bio, “FBC will provide all aspects of the movement from inception to completion.”

Archives, Global Trade Daily, Ocean Ports

Agility & Speed Essential for East Coast Port Growth

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When the Evergreen Triton arrived at the Helen Delich Bentley Port of Baltimore on May 24, it became the largest container ship ever to visit Maryland. The vessel that can handle 14,424 twenty-foot equivalent (TEU) containers surpassed the 11,000-TEU Gunde Maersk, which as of the previous October had been the largest container ship to ever visit Maryland. The Gunde Maersk had one upped a 9,700-TEU Mediterranean Shipping Co. vessel, which in 2017 became the Maryland record-setter.

Exactly 30 days before the Evergreen Triton milestone, the Jacksonville Port Authority set a record when the ZIM vessel Kota Pekarang became the largest container ship to ever call JAXPORT. The 11,923-TEU vessel transited the Panama Canal from Northeast Asia before reaching the U.S. East Coast and discharging and loading cargo at JAXPORT’s Blount Island Marine Terminal on April 24. Less than a month before that—on March 18, to be precise—the 11,000-TEU ZIM vessel Cape Sounio had become the JAXPORT record-holder when it docked at Blount Island.

To say that the biggest of the big ships have been coming fast and furious to select East Coast ports lately would be an understatement, not that any of these calls caught anyone off guard. “Thanks to Maryland’s investment in a 50-foot berth, every year we are seeing larger and larger container ships choosing the Port of Baltimore,” Governor Larry Hogan said upon the Evergreen Triton arrival. Likewise,  JAXPORT, which is Florida’s No. 1 container port complex by volume, is deepening its harbor to keep up with the biggest-of-the-big-ship demand.

According to recently released rankings of America’s top 30 ports by TEUs in 2018, the Port of Los Angeles and its Southern California sister the Port of Long Beach hold the top two spots respectively, just as they did in 2017. But LA’s TEU growth of 5.40 percent in 2018 from 2017, as well as Long Beach’s 6.80 percent jump over the same period, were below the 7.80 percent combined average of the nation’s top 30 ports. Meanwhile, though the Port of New York and New Jersey and Port of Savannah (Georgia) maintained their 2017 slots as the country’s third and fourth top ports in 2018 respectively, those East Coast ports saw TEU year-to-year growth rise by 12.80 percent and 10.80 percent.

“New York came closer than ever to overtaking Long Beach as the second largest port for imports after the raising of the Bayonne Bridge and investments by Maersk in new cranes allowed a 12.8 percent rise in shipments, leaving it with a 14.5 percent share of all seaborne imports to the United States,” writes Patrick Burnson, executive editor with Logistics Management, in a piece crunching the top port numbers. Burnson goes on to credit the widening of the Panama Canal in 2016—which led to East Coast ports deepening their channels and erecting massive cranes to accommodate Post-Panamax vessels—with the Eastern Seaboard’s continued rise.

Savannah’s upgrades are credited with drawing shipping business away from others in the East. Among those who have taken notice is Seaboard Marine, which in May launched a new direct, all-water service that will have both refrigerated and dry container service to and from the Port of Savannah and North Central America, including Honduras, Guatemala, El Salvador and Nicaragua.

A different public-private partnership is credited with spurring the growth enjoyed by the state of Maryland, whose Department of Transportation points to its Maryland Port Administration and Ports America Chesapeake. So far that pact has brought about a 50-foot deep channel and 50-foot deep berth to accommodate the mega-ships traveling through the Panama Canal and past other ports before pulling into the Old Line State, which may be compelled to change its nickname to the “Old and New Shipping Line State.”

As Bayard Hogans, vice president of Ports America Chesapeake, said upon Triton’s arrival, “The partnership between the Port of Baltimore, Ports America Chesapeake and Evergreen will continue to allow the world’s largest container ships to deliver the goods and commodities that power America’s economy through Maryland.”

A different partnership is paying dividends at another East Coast port. The rearrangement of services prompted by container alliances forged overseas has been cited as a factor in the Port of Miami experiencing 20.80 percent TEU growth in 2018 compared to a year before.

There are 1 billion reasons PortMiami shows up on the international shipping radar—namely $1 billion in infrastructure projects that have created an on-dock intermodal rail system, dredged the deep-water channel to welcome Post-Panamax vessels and carved a direct-access tunnel leading to the interstate highway system. And don’t forget PortMiami Foreign Trade Zone 281. PortMiami’s cargo and container ship operations, coupled with its world-famous luxury cruise line industry, are credited with generating $43 billion in economic activity countywide and statewide.

The gulf side of Florida is also getting attention from abroad, as proven by French container shipping giant CMA CGM having launched service to Port Tampa Bay in late May. The new Pacific Express 3 service rotation is: Singapore; Vung Tau; Hong Kong; Shekou; Ningbo; Shanghai; Busan; Panama Canal; Houston; Mobile; New Orleans; Tampa; Miami; and back to Singapore.

Port Tampa Bay, which was at the ready with two Post-Panamax cranes to complement three existing gantry cranes, is currently investing in new facilities to further diversify its service and implementing a phased build-out plan to quadruple capacity over the next few years.

Another move that began outside the U.S. that is expected to help East Coast ports is the London-based International Maritime Organization imposing its low-sulfur fuel rule that takes effect on Jan. 1, 2020. The resulting number crunching spurred by the higher fuel costs is expected to ultimately draw ships away from the Suez Canal in favor of the shorter route from Asia to the American East Coast through the Panama Canal. This is despite the Central American waterway’s transit fees being higher than what the Suez Canal Authority charges.

As the larger ports along the Eastern Seaboard make the billion-dollar moves aimed at luring the world’s largest container vessels, smaller operations are also finding success filling niches. Take, for instance, the Connecticut Port Authority, whose main port at New London is about halfway between New York and Boston. Though the CPA was only formed in 2016, it has already filled a niche when it comes to wind energy. In yet another public-private partnership, the CPA; Gateway, which operates terminals in New Haven; Eversource, the regional energy provider previously known as Northeast Utilities; and Denmark-based Ørsted are the players in the Bay State Wind joint venture. Among Bay State Wind’s upcoming projects is the $93 million redevelopment of State Pier in New London.

Archives, Global Logistics, Global Trade Daily

TESLA’S CEO DISRUPTS LOGISTICS TRANSPORTATION

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For proof that Elon Musk is an innovator when it comes to logistic transportation—as opposed to, in this exercise, space travel, electric cars, solar power, hyperloops, artificial intelligence, neurotechnology, tunnel boring and flame throwers—we turn not to his associated company (Tesla) but a competitor (Volvo).

“Tesla shook up the whole industry and made it go a little bit faster,” conceded Volvo Trucks North America President Peter Voorhoeve late last year of the race to get electric big rigs on the road.

He is referring to Musk’s January 2018 announcement from a stage displaying a Tesla Semi that shortly thereafter delivered battery packs from his Gigafactory 1 in Sparks, Nevada, to Tesla Factory in Fremont, California,

After that maiden 239-mile cargo trip, Tesla Semi prototypes were spotted sporadically last year, although it was unknown whether there was anything inside the trailers they were hauling. The suspense ended this past January, when Jerome Guillen, Tesla’s president of Automotive and vice president of Truck programs, shared on LinkedIn a photo of a Model X sedan being loaded on a car carrier trailer attached to a Tesla Semi.

The Tesla Semi is promised to deliver a far better experience for truck drivers, while increasing safety and significantly reducing the cost of cargo transport. Without a trailer, it is said to achieve 0-60 mph in five seconds, compared to 15 seconds in a comparable diesel truck. It does 0-60 mph in 20 seconds with a full 80,000-pound load, a task that takes a diesel truck about a minute. Most notably for truck drivers and other travelers on the road, it climbs 5 percent grades at a steady 65 mph, whereas a diesel truck maxes out at 45 mph on a 5 percent grade.

Semis require no shifting or clutching for smooth acceleration and deceleration, and its regenerative braking recovers 98 percent of kinetic energy to the battery, giving it a basically infinite brake life. Overall, the Tesla Semi promises more responsiveness, covering more miles than a diesel truck in the same amount of time, while more safely integrates with passenger car traffic.

Reservations of $20,000 per Tesla Semi are being taken, with production slated to begin this year. But other car makers are not taking those prospects lying down. Volvo Trucks on Dec. 12 announced it will introduce all-electric Volvo VNR regional-haul demonstrators in California later this year, operating in distribution, regional-haul and drayage operations, with sales of the VNR Electric in North America scheduled to begin in 2020.

“The Volvo VNR Electric leverages the versatility of the new Volvo VNR series with a proven fully-electric powertrain, and represents a strategic stride toward a comprehensive electrified transport ecosystem,” Voorhoeve said at the time. “Cities prioritizing sustainable urban development can leverage electrified transport solutions to help improve air quality and reduce traffic noise. Cleaner, quieter, fully-electric commercial transport also creates opportunities for expanded morning and late-night operations, helping cut traffic congestion during peak hours.”

Mack Trucks, Peterbilt, Freightliner and Navistar are also in various stages of testing with electric trucks, and Ryder recently ordered 1,000 battery-electric Chanje panel vans to be put in service in the next two years. UPS and Thor Trucks as well as Canadian food retailer Loblaw and Build Your Dreams (BYD) are teaming up on electrics. Phoenix, Arizona, hybrid designer Nikola has pre-orders for hydrogen-electric trucks, and Kenworth and Toyota are developing a Zero Emissions Cargo Transport fuel cell truck prototype.

If Elon Musk’s bold EV semi moves represent the stick, California Air Resources Board grants are the carrot. Most manufacturers are focusing their efforts in and around the Golden State, leveraging the grants that fold into the Port of Los Angeles’ goal to ban anything but emission-free trucks by 2035.

Archives, Global Trade Daily, In The News

Port of Seattle Aims to Heat Sea-Tac Airport Entirely with RNG

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The Port of Seattle is pushing to make Seattle-Tacoma International Airport the nation’s first airport heated entirely by renewable natural gas. The port recently announced a Request for Proposals for RNG service to supply Sea-Tac’s boilers and bus fueling system, which is responsible for more than 80 percent of the port-owned emissions.
All of the current fossil natural gas would be replaced by RNG, which is also known as biomethane and is produced by the decomposition of organic matter, typically produced by landfills, wastewater treatment plants and food and animal waste digesters.
“The port can play a major role in creating a renewable natural gas market because we offer a stable, long-term use of gas,” says Arlyn Purcell, the port’s director of Aviation Environment and Sustainability. “If we can attract a project developer to supply the airport, this will spur more opportunities to feed the current gas pipeline with RNG rather than have landfills or digesters flare the gas on-site or allowing their methane emissions to escape into the air.”
The port previously adopted aggressive greenhouse gas reduction goals under its Century Agenda, with the aim to reduce greenhouse gas emissions from its own operations by 50 percent from 2005 levels by 2030, and to be carbon neutral or carbon negative by 2050. Ranked as the ninth busiest U.S. airport, Sea-Tac International served 46.9 million passengers and more than 425,800 metric tons of air cargo in 2017, producing a regional economic impact pegged at more than $22.5 billion.

Archives, Dispatches, Global Trade Daily

American Airlines Cargo to Utilize New Service Between DFW and Dublin

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Starting this summer, American Airlines will offer a new nonstop flight from Dublin to Dallas Fort Worth, directly connecting the two for the first time in the history of the world’s largest carrier.
The seasonal flight, which will operate from June 7 through Sept. 28 of this year, will be flown on cargo-friendly, fuel-efficient Boeing 787-9 aircraft. That should make it a welcome addition for the cargo community wishing to serve Texas, the second largest importing state in America, where the manufacturing sector is projected to continue growing in the coming years.
Customers with a diverse range of commodities are already expressing interest in the flight, according to American Airlines, which adds potential commodities including computer parts, medical devices, machinery, oil industry equipment, aviation parts and pharmaceuticals.
 “This first, direct, scheduled service from Ireland to Texas will open up a number of new markets for both Irish and multinational exporters with freight destined for Dallas and beyond,” says Andy Cornwell, regional manager of AA Cargo-Northern Europe.
American also offers flights from Dublin to Charlotte, Chicago O’Hare and Philadelphia, as well as seasonal service from Shannon to Philly.

Archives, Dispatches, Global Trade Daily

Happy (Belated) Birthday, Team Worldwide

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Winnsboro, Texas-based Team Worldwide, which bills itself as “a global yet locally-minded freight forwarder and 3PL company,” in January proudly celebrated is its 40th anniversary in the biz.
Father and son Joe and Bobby Brunson established Team Worldwide in 1979 as a small, regional freight forwarder in the Dallas/Fort Worth area. The company’s mission was “to develop a long-term relationship with each customer by providing a logistics network that offers a variety of innovative and reliable services now and for the future.” Under the third generation of family leadership, the company remains committed to the same principles.
Of course, from humble beginnings Team Worldwide built itself up to the point where its corporate headquarters in Winnsboro boasts of more than 100,000 square feet of office and warehouse space, on grounds that accommodate a state-of-the-art data and technology center that supports 40-plus locally owned branches in North America and a global customer base.
 “We appreciate this opportunity to say ‘Thank You’ as we celebrate 40 years of service,” says Team Worldwide. “We proudly remain large enough to serve you but small enough to know you!”