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Wanted: Transportation and Logistics Workers

Archives, Global Trade Daily, News

Wanted: Transportation and Logistics Workers

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Job openings at U.S. transportation, warehousing, reached and utility companies reached 269,000 on April 31. That’s a jump of over 70 percent compared to last year, according to numbers released earlier this month by the U.S. Bureau of Labor Statistics.

The number of employees hired by those companies increased only 18.9 percent in April to 189,000, while 165,000 workers left their positions with those same companies, 18.7 percent more than last year.

That means that transportation and warehousing companies filled about 70 percent of job openings in April.

The growth in job openings in the logistics sector shows companies are confident they will be handling more goods in the coming months, an indication of a continued robust recovery. Transportation job openings grew by 28.7 in April over March, the strongest month-over-month increase since January, when job openings rose 36.1 percent over December. Job openings dropped 8.7 percent in February and grew 16.8 percent in March.

Year-over-year increases in job openings in the first quarter of 2015—including a 48.2-percent spike in March—compare to the first quarter of 2014, when a harsh winter contributed to a 2.2 percent decline in gross domestic product. But the April 2015 numbers compare favorably to the start of an economic surge in 2014.

A Federal Reserve System report showed stronger economic growth across the U.S. in April and May.

The truck driver shortage remains a key concern for the logistics sector, according to the recently-released “State of Logistics Report,” from the Council of Supply Chain Management Professionals. The American Trucking Associations estimates the current shortage ranges from 35,000 to 40,000 drivers. The driver turnover rate was a whopping 95 percent on an annualized basis.

It remains to be seen how far and fast the U.S. economy will grow this year. Transportation and logistics companies need to beef up their labor forces to help make it happen.

Archives, Global Trade Daily, International Trade, News, U.S. Ports

Los Angeles and Long Beach Ports Cooperate on Supply Chain

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The ports of Los Angeles and Long Beach have established a series of joint working groups desgined to optimize facilities and operations and smooth the flow of cargo through the San Pedro Bay port complex during the peak season.

The seven working groups are Peak Season 2015, Container Terminal Optimization, Chassis, Off-dock Solutions, Key Performance Indicators/Data Solutions, Intermodal Rail, and Drayage. Members of the working groups have been drawn from across the spectrum of port stakeholders, including shippers, shipping lines, railroads, trucking, equipment owners and labor.

The Supply Chain Optimization Steering Committee, which is composed of port leaders, will oversee the activities of the seven working groups.

The ports of Los Angeles and Long Beach, the two largest ports in the nation, and the tenth largest port complex in the world, handle 40 percent of total U.S. containerized import traffic and 25 percent of the nation’s total exports.

The Peak Season 2015 working group will be the first to meet and plans a series of intensive sessions that will study this year’s peak demand needs at the port complex.

The ports’ supply-chain optimization initiative flows from a ruling approved earlier this year by the Federal Maritime Commission that allows neighboring ports to discuss improvements to improve competitiveness, environmental sustainability, and security.

The kickoff to the effort came last April, when the ports hosted a joint meeting in Long Beach attended by drawing dozens of industry representatives who weighed in on their most pressing needs.

In addition to the working groups, the ports will convene advisory groups of environmental, industry, community, and government representatives to provide input on proposals set out by the working groups.

Archives, Global Trade Daily, Imports/Exports, International Trade, News

Obama Signs Two Global Trade Bills

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President Barack Obama signed two pieces of legislation addressing issues of international trade at a White House signing ceremony yesterday.

The first bill granted the president trade promotion authority (TPA), a provision which will impact negotiations over the Trans-Pacific Partnership (TPP).

The second bill, the Trade Preferences and Extension Act, included support for job training for displaced U.S. workers, reauthorization of the the Generalized System of Preferences (GSP), provisions for fighting unfair trade practices, and other provisions relating to economic development in Africa and Haiti.

Trade promotion authority allows the president to present trade agreements to Congress for an up-or-down vote and without amendments or reservations. TPP is a proposed trade and investment treaty among twelve countries in the Asia-Pacific region: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.

TPA was opposed by labor and environmental groups who argue that the TPP will not include adequate protections for workers and the environment. Obama dismissed these concerns.

He added: “I would not be signing these bills if I was not absolutely convinced that these pieces of legislation are ultimately good for American workers. I would not be signing them if I wasn’t convinced they’d be good for American businesses. I would not be signing them if I did not know that they will give us a competitive edge in this new economy, and that that new economy cannot be reversed.”

The Trade Adjustment Assistance (TAA) provisions of the second bill supports a Department of Labor program that provides job training, income support, and other benefits to American workers displaced by globalization.

GSP, a program which has been around since 1974, expired in 2013. The president’s signature reinstituted a program designed to promote economic growth in the developing world by providing duty-free entry into the U.S. for 5,000 products from 122 designated countries and territories.

The Level the Playing Field (LTPF) provisions strengthen remedies under U.S. trade for companies injured by dumping and other unfair and unlawful trade practices.

Other provisions included in the legislation signed by Obama extend aid to Africa for regional integration and supply chain development and duty-free benefits on apparel exports from Haiti.

Archives, Global Logistics, Global Trade Daily, Imports/Exports, News, Ocean Ports, Rail, U.S. Ports

ROI on Pacific Northwest Channel Deepening Project: Over 5 to 1

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The economy in the U.S. Pacific Northwest has enjoyed a handsome return on the investment made deepening of the Columbia River navigation channel.

The U.S. Army Corps of Engineers spent $180 million deepening the 110-mile channel from 40 to 43 feet. Since the dredging was finished in 2010, public agencies and private companies have invested over $1 billion in infrastructure and facilities along the Columbia and Snake rivers, much of it focused on facilitating exports.

The Pacific Northwest Waterways Association and the Port of Portland recently released a study outlining the $1.08 billion in public and private investments. The Columbia-Snake river system includes the ports of Portland, Vancouver, Longview, Kalama, Woodland, and St. Helens.

Nearly half the value of the total investments went toward seven grain export facilities on the Lower Columbia River, to ensure that the system can handle an increase in wheat, corn and soy products. Other investments include improved rail and freight handling facilities, additional tugs and barges, and construction of the largest floating dry dock in the United States.

The $230 million Export Grain Terminal at Longview, Wash., was the first new grain export facility in North America in 25 years. Other projects include $228 million to expand rail freight infrastructure at the Port of Vancouver, Wash., $100 million invested by Temco LLC to increase grain handling capacity, and $140 million to improve shiploading efficiency at the Port of Portland by potash exporter Canpotex.

Over three-quarters of the Port of Portland’s current business is related to the movement of agricultural and mineral bulk cargoes, noted Curtis Robinhold, the port’s deputy executive director. “The deepening of the channel has led to an increase in volumes of bulks at our facilities since ships can travel more fully loaded,” he added.

Over $5 billion in future investments in the area are proposed, according to the study. These include a $600 million coal terminal at the Port of Longview and a $500 million propane export terminal at the Port of Portland.

Archives, Global Logistics, Global Trade Daily, International Trade, News, Ocean Carriers, Software

UK Ocean Carrier Kestrel Starts Offering Capacity Online

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Kestrel Liner Agencies, an ocean freight provider based in the UK and serving the U.S., Caribbean, and Latin America, has started offering capacity on the Haven Platform. Haven is a private marketplace for buying and selling ocean freight capacity.

The Haven Platform enables shippers to search, compare, and reserve slots across 10 leading ocean carriers at over 1,500 ports. Companies like Kestrel that offer capacity on the site use Haven’s technology to reach new customers and to streamline their operations. Traditional spot-rate negotiation between carriers and shippers often involves a chain of phone calls, faxes, and emails. Haven’s online marketplace streamlines the process by connecting shippers with carriers on a neutral platform. This facilitates a more efficient booking process.

Haven is part of a growing phenomenon of online tools, siuch as those from iContainers and Xeneta, that help shippers and freight forwarders research ocean carrier rates and get quotes.

Kestrel and other carriers use the Haven Platform to serve customers more efficiently, and to generate revenue from excess capacity. Haven charges a transaction fee per container and reservations are automatically uploaded to back-office systems. Shippers and freight forwarders can access the marketplace without a monthly commitment or any IT investment.

Jones Act requires US-flag vessels for internal shipments of shipments of export cargo and import cargo.
Archives, Global Logistics, Global Trade Daily, Imports/Exports, News, Ocean Carriers, U.S. Ports

Crowley adding sailings from New Jersey to Puerto Rico

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Crowley Maritime Corp. will add sailings between Pennsauken, N.J., and San Juan, Puerto Rico, this summer. The move comes in response to customers’ needs for additional service in the Northeast, according to a company statement.

The 580-series, triple-deck Ro/Ro barge capable of carrying 345 loads will alternate between the South Atlantic and North Atlantic services, and generate one southbound and one northbound sailing each month between Pennsauken and San Juan.

Trade between Puerto Rico and the mainland has been on the rise this year. Puerto Rico’s exports to the U.S. mainland, mostly pharmaceuticals and medical devices, increased 11.2 percent increase in 2014 and are slated to go higher this year, government data.

Total exports to the U.S. mainland were $49.1 billion in 2014, $5 billion more than in 2013, and the highest since 2010. The second half of 2014 showed double-digit increases every month. The latest available monthly export numbers, from February, showed an 18.4 percent increase year over year. Imports have increased slightly, up by $500 million from 2013 to $20.8 billion in 2014.

Earlier this year, Crowley added a vessel to its Jacksonville-to-San Juan service, inceeasing those sailings to four times a week.

Air Cargo, Archives, Global Logistics, Global Trade Daily, News, Ocean Carriers, Rail, Warehousing

Logistics Trends Reflect Recovering U.S. Economy

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Logistics trends in the United States mirror an economy that is recovering and growing. That was a key observation in the recently-released 26th Annual “State of Logistics Report” from the Council of Supply Chain Management Professionals (CSCMP).

One indicator of the trend was growing transportation revenues fueled by increases in shipments rather than rates. Another was the growth in U.S. consumer spending, a factor absent until last year from the recovery from the Great Recession.

Total U.S. logistics costs rose to $1.45 trillion in 2014, a 3.1 percent increase from the previous year. The the transportation sector grew by 3.6 percent.

As consumer spending increased, retailers replenished inventories and inventory-carrying costs rose 2.1 percent. The cost of warehousing rose 4.4 percent because of shrinking capacity and a worker shortage, both of which pushed costs up.

Railroad revenues grew 6.5 percent as rail traffic reached its highest annual total on record. The 4.5 percent increase in traffic volume brought the rail industry close to its pre-recession volumes. Total carloads increased 3.9 percent, hitting their highest total since 2006. Intermodal volume increased 5.2 percent, surpassing 2013’s record.

The maritime sector increased 8.9 percent. Shipments through the nation’s ports increased, with East Coast ports seeing the largest gains due to congestion and delays caused by labor issues at West Coast ports.

Air cargo declined 1.2 percent as competition from other modes kept rates down. However, a record $968 billion of merchandise was moved by air—$443.8 billion in exports and $543.3 in imports.

Archives, Commentary, Global Trade Daily, Software

Security Through Software

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Supply-chain security can be segmented into two buckets: government compliance and internal risk assessment. Software can help with both.

Governments have instituted security-related shipment regulations, such as the Importer Security Filing and Additional Carrier Requirements (commonly known as “10+2”) in the U.S., which requires ocean carriers to forward information to U.S. Customs 24 hours before cargo is loaded. The Customs-Trade Partnership Against Terrorism (C-TPAT), a voluntary program which allows participating shippers expedited treatment of their freight, requires an extensive compliance program.

The World Customs Organization adopted a new framework last year endorsed by 180 countries. “That means that practically every country in the world will implement security filing programs that will require information from carriers, forwarders, importers and exporters,” says Jos Nuijten, vice president for Network Integration Strategy at Descartes.

Besides government programs, companies need insights into supply-chain risk to keep shipments running smoothly and to minimize shrinkage. “Risk is predictive,” says Dan Purtell, a senior vice president at BSI Supply Chain Solutions. “It shouldn’t come as a surprise.”

“Paying attention to supply-chain security involves implementing good business practices,” adds Karen Lobdell, director of Global Solutions at Integration Point.

Programs like C-TPAT require importers to query their suppliers as part of a supply-chain security self-assessment. “Our system publishes questionnaires to suppliers, collects their responses and memorializes the information,” says Ty Bordner, vice president of Solutions Consulting at Amber Road. “The software also screens names against companies blacklisted by world governments and identifies security concerns before an order is accepted.”

QuestaWeb developed a technology platform that provides users with visibility into their supply chains, so that they can manage by exception. “Our software interfaces with enterprise systems to automatically create checks and documents and give users visibility on a daily basis on how their products are moving around the world,” says Wayne Slossberg, the company’s vice president of Sales. “It automates the entire procedure and the user is sent an alert only when there is an issue.”

Descartes helps companies with their U.S. Customs filings by extracting data from enterprise systems and automatically formatting it to the specifications of government agencies. “In the European Union alone, there are 20 different required messaging formats,” says Nuijten. “It’s impossible to do it yourself.”

Integration Point has expanded software developed to automate compliance with C-TPAT into a risk-assessment tool for business-partner management. “The tool allows users to automate what is usually an administrative chore to identify vulnerabilities with business partners so that they can understand the biggest potentials for risk,” says Lobdell.

BSI provides a supply-chain intelligence system with analysis on 203 countries around the world and 22 proprietary security indicators. “These indicators look at factors such as cargo theft, smuggling and terrorism,” says Purtell. “Companies use this to assess risk and to develop procurement strategies.”

Aluma Tower Co. is in the midst of a strategic transformation. The company, based in Vero Beach, Fla., has the goal of quadrupling its revenues this year alone and is already well on its way toward achieving that goal.
Archives, Commentary, Global Trade Daily, Site Selection, State Spotlight

State of Emergence

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Aluma Tower Co. is in the midst of a strategic transformation. The company, based in Vero Beach, Fla., has the goal of quadrupling its revenues this year alone and is already well on its way toward achieving that goal.

“By end of February, we booked a quarter of all of what we made last year,” says Angela Ledford, the company’s president and general manager. Aluma, which produces portable aluminum towers used for communications, surveillance and meteorology, exports 60 percent of its products to more than 30 countries around the world.

Ledford’s growth strategy involves several prongs. “We are becoming more of an assembler than a fabricator,” she says. “We’re outsourcing fabrication to other vendors. We are also expanding our product line by capitalizing on our experience working with aluminum.”

Aluma’s growth will require additional space and personnel, and it is executing its strategy in Indian River County. From 32,000 square feet in two facilities, the company is looking for a consolidated 50,000-square-foot facility. Employee headcount will grow from 35 to as many as 75 by the end of this year.

Logistics and incentives are two of the advantages to Aluma’s current location. “Many of our shipments go through the ports of Jacksonville and Miami,” Ledford explains. “Good rail connections also enable us to ship out of West Coast ports to customers in the Philippines. We choose the route based on the customer’s time needs and the costs.”

Florida is all about logistics, agrees Bill Johnson, the state’s secretary of commerce and CEO of Enterprise Florida, a public-private partnership. “We are right in the center of the hemisphere,” he notes. “Our 15 deep-water ports are often the first inbound and last outbound call. Over the last four years, the state has invested more than $700 million in the port system.”

Indian River County is on Florida’s central east coast, one hour north of West Palm Beach and one and half hours southeast of Orlando. “I-95 runs right through Vero Beach,” notes Helene Caseltine, Economic Development director of the Indian River County Chamber of Commerce. “Several industrial areas adjacent to I-95 make distribution easy. We are within three hours of 90 percent of Florida’s population.”

The county’s jobs program provides grants of between $3,000 and $7,000 per job created. The county and its three largest municipalities have real estate tax abatement programs for new or expanded facilities.

Local incentives were important to Aluma’s decision to stay in Indian River County. “Local government officials have come to visit and to help us with tax benefits,” says Ledford. She expects Aluma to benefit from employment incentives and to enjoy 10 years of tax relief at its new facility.

The new plant will also allow the company to benefit from a state capital investment tax credit. “We have not used state incentives yet,” says Ledford, “but we expect to get the tax credit this year.”

Archives, Site Selection, State Spotlight

Utah Hits The Market For Outdoor Companies

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HOYT ARCHERY IS AMONG BUSINESSES WELL-SUITED TO THE BEEHIVE STATE’S UNIQUE LANDSCAPE

In 1989, Peter Metcalf bought the assets of a defunct outdoor equipment manufacturer and started Black Diamond Equipment. Then he systematically researched western communities to find a new home for his company until, 25 years ago, Metcalf moved the company from Ventura, Calif., to Salt Lake City, Utah.

“We needed the accoutrements of a city but access to the mountain environment,” says the president and CEO of the outdoor equipment and apparel maker, “and this place was unique.”

Utah has become a Mecca for aficionados of outdoor sports: skiers, mountaineers, hikers and bikers all make their way to Utah’s unique vistas. So are growing numbers of manufacturers of outdoor equipment. Part of the attraction has to do with the availability of outdoor recreation, but that’s just the beginning.

“Outdoor companies come here because of the unique blend of natural assets, a business-friendly environment, cultural opportunities and the availability of transportation and other infrastructure,” says Metcalf.

“Our main asset is our people,” adds Randy Walk, president of Hoyt Archery. “People love to work and play in the same sport. We are able to pull talented people to Utah because of everything Utah has to offer.” Hoyt Archery enjoys a 70-percent market share among Olympic archery athletes and exports to 33 countries.

The Utah state government runs a special office to attract and retain outdoor companies. “Utah is an ideal environment for testing new products,” says Brad Petersen, director of the Utah Office of Outdoor Recreation. “Our location also offers supply-chain efficiencies, with rail and truck access to Southern California ports and a local free-trade zone.”

“Logistics is damn easy,” affirms Metcalf. “I was shocked how small the cost differential was from Ventura to the port of Long Beach versus Salt Lake City to Long Beach.” Sixty percent of Black Diamond’s sales come from outside the United States.

State incentives for companies relocating to Utah come in the form of tax credits of up to 30 percent over 20 years. “The threshold is to create a minimum of 50 high-paying jobs,” says Val Hale, executive director of the Governor’s Office of Economic Development.

Black Diamond, although headquartered in Utah for decades, is currently reshoring the bulk of its manufacturing activity from Asia to Salt Lake City. “You have a fairly sophisticated subcontract manufacturing base and an educated workforce here,” says Metcalf.

“The University of Utah has an excellent engineering school and Brigham Young University has a great design program. There is a sophisticated banking community that serves smaller companies playing globally.”

Utah also enjoys a surprisingly international culture for an unusual reason: Those who practice the dominant religion, Mormonism, send their youth on missions abroad for two years where they become fluent in foreign languages. “Our people speak 130 different languages,” says Hale. “I was surprised to learn on a recent trade mission that we have 12,000 native Brazilians living in Utah and 19,000 people who speak Portuguese fluently.”