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US Electric Vehicle Sales still have a lot to do with China

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Global Logistics, Global Trade Daily, Technology

US Electric Vehicle Sales still have a lot to do with China

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The United States wants to lessen its reliance on China when it comes to electric vehicle (EV) production. A proposed $7,500 tax credit set to kick in come 2024 is held by most to be the key to increasing EV sales stateside. Yet, US law dictates the credit cannot be used to purchase cars with battery components that come from a “foreign entity of concern.” The interpretation of that phrase will likely dictate the future of the US EV rollout. 

At the heart of this struggle are Ford and General Motors (GM). While there are other EV manufacturers to be certain, Ford has caught the eye of lawmakers and members of Congress with its proposed plans for a $3.5 billion battery factory. The Michigan plant would be one-of-a-kind, but it would also depend heavily on the Chinese firm Contemporary Amperex Technology Co. Ltd (CATL). Ford is interested in CATL’s technology to make lithium-iron-phosphate batteries. At an industrial scale, these batteries are cheaper than the alternatives and would greatly reduce production costs. Yet, an agreement like this would likely run against the “foreign entity of concern” clause. 

Meanwhile, crosstown rival GM does not have any planned partnerships with Chinese battery firms and is making this position known. Should Ford be able to move ahead and offer EVs with the $7,500 tax credit, the automaker would gain a relevant technological and cost advantage over GM. Understandably, GM is calling for a strict adherence to the “foreign entity of concern” rule while Ford is positioning its deal with CATL as a licensing agreement and not a joint venture. This means the subsidiary that operates the Michigan plant would be owned by Ford and they would then pay CATL royalties for the use of their technology. 

China is a prominent player in the lithium-ion battery supply chain. Last year roughly 65% of all graphite mined in the world (key raw material for batteries) was from China. In terms of chemical refining and production, all spherical graphite and nearly all manganese refining occur in China, and the Asian giant controls 70% of battery-cell production. Ford defends its position by citing that a deal with CATL could bring substantial advanced technology knowledge to the US and that cutting the US off completely to Chinese partnerships could set the domestic battery market back for decades. 

On the other end, should Ford be allowed to move forward as planned, some in Congress fear this will simply push GM and others to form similar partnerships with other Chinese firms thus further integrating the two nations. Both Democrats and Republicans have enough folks on both sides of the aisle that agree on ridding the US of excess Chinese reliance. But without the $7,500 tax credit bridging the gap between a new EV and a new gas-powered car, a gas-powered option will likely win out for most consumers.    

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Global Logistics, Global Trade Daily, Ocean Ports

Russia-China Trade Dynamics in a Post-War Era: Navigating Challenges and Opportunities

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As Russia grapples with the western sanctions one year after the invasion in Ukraine, China supports by bolstering bilateral trade between the two nations. Container xChange investigates the intricacies of the China-Russia trade and how it impacts the container logistics industry, now and in future. 

China – Russia trade ties 

“There is significant cargo movement from China into Russia but very scarce movement back to China from Russia. Containers are piling up in Russia which means that the secondhand container prices are very low in Russia. You see a 40ft high cube container being on sale in Moscow for less than $1,000, while in other parts of the world it is almost double or even more. This is significant and has tremendously detrimental impact on the business of container logistics because of the high imbalance of demand and supply of containers.” said Christian Roeloffs, cofounder and CEO, Container xChange. 

In February 2022, the average price of a 40ft high cube container in Moscow was $4,175, which is now $580 as of 25 September 2023. (See graph below) 

Similarly, the average price of a cargo worthy 20 ft DC was $1,961 in February 2022, which has consistently declined and bottomed out to $675 as of 25 September 2023. 

“Currently there are around 150,000 surplus containers in Russia, and everybody is looking for an opportunity to return containers back to China. All containers from Russia to China go with a pickup charge. Regarding container trading, many Chinese companies are selling containers below market price to get rid of the boxes since it doesn’t make sense to send them back to China. From Moscow to Shanghai, the offline market offers around $1,500 for new containers. If cargo worthy containers are in good condition and cost less, they prefer to sell the boxes in the local market. 

But this doesn’t mean that the market is bad. There are still many companies exporting as many as 4,000 SOC containers from Russia to China. The transactions between China and Russia are still very significant.”  a customer of Container xChange shared. 

China, traditionally a substantial purchaser of Russian energy, has now emerged as a vital source of imports, encompassing a wide range of products such as machinery, pharmaceuticals, auto parts, consumer goods, smartphones, cars, and agricultural equipment, from China. This shift has created a shortage of closed cargo containers, further intensifying the logistics challenge. 

This shift is a direct result of numerous international companies exiting the Russian market amid ongoing geopolitical tensions and the conflict in Ukraine.

Trade between China and Russia witnessed substantial growth of 36.5% in the first seven months of 2023, totaling $134.1 billion, according to Chinese customs data. China’s exports to Russia surged by 73.4%, reaching approximately $62.54 billion, while imports from Russia also grew significantly by 15.1%, totaling $71.6 billion.

Soon after Russia’s invasion in Ukraine last year in February 2022, the bilateral trade between China and Russia dipped for a brief period of time and then picked up to reach record levels. 

Russia anticipates that its trade volume with China will surpass $200 billion this year, a notable increase from the approximately $185 billion recorded in 2022.

Surge In trade causing container imbalance 

As imports from China to Russia continue to surge, it is leading to a significant trade imbalance and container congestion. According to a report from the VPost, Russian railway depots are grappling with an overwhelming accumulation of empty shipping containers originating from China. Managers at Russian shipping companies have expressed concerns about the severity of the situation, describing it as “almost critical” in regions like Moscow and central Russia.

This container crisis is primarily a consequence of the deepening trade imbalance between Russia and China. Russia is flooded with more containers carrying goods from China than it can dispatch back. Furthermore, the commodities exchanged between the two countries play a role in exacerbating the problem, as Russian raw materials are primarily transported to China via rail tanks and open wagons rather than in containers.

In an attempt to improve the container congestion, Russian shipping companies have started offering discounts to expedite the return of containers to China. 

Overloaded Russian ports and roads are causing transportation inefficiencies. Although some investments have been made to improve infrastructure, fiscal constraints and the use of the National Wealth Fund to cover budget shortfalls complicate matters. Russia seeks Chinese investors to address these issues, but uncertainty stays due to recent actions against Western companies. However, Russia’s pivot to Asia hinges on substantial infrastructure development.

China-Russia trade: Current trends and prospects 

As we look ahead to the future of China-Russia trade, it becomes evident that despite recent declines in shipping rates, operators providing container shipping services are pressing forward with their expansion plans on this trade lane.

One noteworthy development is the entry of CStar Line, a newcomer in the industry, into the China-Russia trade arena. In a parallel development, Yangpu New New Shipping has expanded its Northern Sea Route service, connecting China to St. Petersburg. This expansion follows the successful eastbound trial voyage by the 1,638 TEU Newnew Polar Bear, which departed from Xingang in August. 

Despite recent rate declines in shipping to Russia, operators like CStar Line and Yangpu New New Shipping are finding profitability, especially during the summer peak season. Notably, cargo volumes from Busan to Russia’s Pacific ports saw a robust 6% increase in July, reaching 13,600 TEU compared to the previous month. However, the market faces pressure from new Chinese entrants, leading to a month-on-month decrease in the average freight rate for the Busan-Far East Russia route, ranging from $1,000 to $2,200 per TEU—a drop of approximately $100. These developments underscore the shipping industry’s resilience and adaptability as the China-Russia trade landscape continues to evolve.

 

Additional Data: 

Strengthening trade Ties with Central Asian nations

In 2022, trade between Russia and Central Asian countries increased by 15%, reaching more than $42 billion. This growth is attributed to strong trade partnerships among countries in organizations like the Shanghai Cooperation Organization (SCO), BRICS, and the Eurasian Economic Union (EAEU). Central Asian nations, such as Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, collaborate closely with Russia on technology and independence-related matters. This expansion of trade bolsters Russia’s regional influence and strengthens its ties with Central Asian partners.

The compatibility between Russia and China’s foreign policy objectives, emphasizing multipolarity and resisting control, may strengthen their partnership in Asia, impacting the region’s geopolitics. This shift towards Asia represents a clear trend for Russia towards establishing better trade partnerships with Asian countries.

Russia’s European trade challenges

Russia, a key euro area trade partner, experienced a 50% dip in trade with the region. While euro area exports to Russia initially dropped quickly, they have since partially recovered for non-sanctioned goods, while sanctioned goods exports remain low. Russia also reduced natural gas flows to Europe, causing a 90% drop in gas imports. Europe compensated by importing gas from Norway, Algeria, and Azerbaijan while increasing liquefied natural gas (LNG) imports, substantially diminishing Russia’s influence in European energy markets.

EU trade with Russia has been strongly affected by import and export restrictions imposed by the EU following Russia’s invasion of Ukraine.  

Both exports and imports have dropped considerably below the level prior to the invasion. Seasonally adjusted values show that Russia’s share in extra-EU imports fell from 9.6% in February 2022 to 1.7% in June 2023, while the share of extra-EU exports fell from 3.8 % to 1.4% in the same period.

European sanctions and voluntary boycotts have redirected Russian trade away from the euro area, increasing dependence on non-sanctioning partners and leading to discounted commodity exports. This shift has reoriented Russia’s global trade, making it heavily reliant on China and other Asian countries. 

It is clear that Russia does not foresee agreement with the US and the West, making Asia, particularly China and India, its top priorities in economic and military cooperation.

 

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Global Logistics, Global Trade Daily

A Sour Outlook for Q4: Crude Supply Cuts and Refinery Challenges

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The Organization of the Petroleum Exporting Countries (OPEC) and its allies are tightening the crude oil supply. This follows OPEC’s 2022 strategy and will likely continue through the fourth quarter of 2023. The US sectors most heavily affected are farmers, construction companies, and transportation businesses. 

The benchmark Brent crude price surpassed $90 a barrel for the first time in September while 1.3 million of estimated barrels have been cut daily. Crude prices are at a 10-month high and the heavy refined fuels that ships, planes, and trucks rely upon have skyrocketed in price. Diesel is up 41% while jet fuel registered a 24% increase (year over year). The latter has been rising steadily since May and Spirit Airlines, American Airlines, and Delta Air Lines all suffered a slide in their respective stock prices. The US Global Jets exchange-traded fund also declined 19% over the last three months. 

OPEC crude oil production is at its lowest since August 2021. Global economic contraction had led to slumping oil prices prompting OPEC’s (and its allies) response as one of aggressive supply restraint. On the other end, output increases by Venezuela and Iran have been notable. Iranian production reached a nearly 6-year high at 2.76 million barrels per day and Venezuela hit a 5-year peak at 810,000 barrels per day. Relaxed US sanctions post the Russian invasion of Ukraine were the likely catalyst behind the production uptick. 

Apart from supply, the world’s capacity to make diesel is also driving prices northward. Refineries are the engine and the Middle East and Africa have experienced delayed refinery startups while European refiners are struggling to make enough trucking fuel. One sector that is thriving is US refiners. Phillips 66, Marathon Petroleum, and Valero Energy are trading at near-record highs. Healthy refining environments are in excellent condition based on tight supply and ever-increasing demand. 

At a macro level rising energy prices pose serious risks for consumer inflation. Everything from meal deliveries to everyday goods and services is affected. Contracting inventories will likely maintain crude oil prices elevated until 2024 and the surplus that was enjoyed in the first quarter of 2023 is expected to reverse.  

 

      

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Global Logistics, Global Trade Daily, Trucking

6 Innovative Techniques to Maximize Trailer Space Utilization

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Empty trailer space may be small, but in reality it’s a significant waste. Fleets must use all available truck capacity to become as cost-effective as possible. Many understand the need to maximize trailer utilization, but irregular loads, fragile items and other complications make it difficult.

In other cases, fleet operators may not realize they have underutilized space left in their trailers. Whatever the specifics, most logistics providers can improve in this area, and thankfully, there are many potential solutions. Here are six innovative techniques fleet owners may have missed to use more of their trailer space.

Use More Vertical Space

Capitalizing on vertical space is one of the most common ways to increase warehouse capacity, and it works for trailers, too. When fully loaded, the average stacked pallet is 48 inches tall, and dry van trailers’ doors are around 9 feet tall. That leaves enough room for two layers of fully stacked pallets.

Of course, some goods aren’t ideal for stacking. Soft boxes and fragile items can’t support additional weight on top of them, but crews can place these items on higher layers. Ratchet straps or similar tools can secure higher-level items in place to prevent shifting in transport.

Another way to use more vertical space is to install decks within the trailer. Several companies now offer both pre-built double-decker trailers and aftermarket shelving solutions. This hardware lets employees safely stack at least two layers in each trailer, regardless of the load’s fragility.

Use Drop Deck Trailers

A similar way to maximize trailer utilization is to use more below-deck space. Drop deck trailers offer more space by lowering the floor below the height of the wheels where possible. That can provide at least two feet of additional storage area without creating a dangerously tall vehicle profile.

Most people are familiar with drop deck trailers in the form of open beds, but enclosed drop decks are another option. Loaders won’t be able to fit an entire additional pallet in this space, but it’s enough for a few boxes. If the trailer also utilizes a racking system, the weight on top of these items isn’t a concern, either.

Shipments in drop deck trailers can also stack in multiple layers on top of the dropped section to maximize space. However, fleets should keep their trucks’ maximum load weights in mind when filling trailers this much.

Choose Boxes Carefully

Fleets can also use more of their trailers’ space by rethinking the boxes they store shipments in. Crews can free a surprising amount of room by using different packages, compiling smaller containers into larger ones and assigning products to other package types.

An often-missed but important rule of thumb is to pack heavier items in smaller boxes and lighter objects in larger ones. This strategy ensures crews can fill every package as much as possible without making them too heavy to carry. Boxes are also more unstable the smaller they are, so the additional weight will help prevent excess movement.

Logistics providers can also account for smaller boxes’ instability by packing several of them in larger containers. This box-in-box strategy lets crews standardize larger package sizes, making it easier to create an even level for stacking additional layers.

Find Inefficiencies With Route Optimization Software

Another unique but effective strategy is capitalizing on route optimization software. These solutions have gained popularity for their cost reduction, as some fleets have attained 25% efficiency boosts through them. Fewer fleet operators realize the same software can reveal trailer underutilization.

Route optimization software will show when vehicles can make more deliveries per day than operators initially expected. When teams know they can complete more deliveries, they can pack more in the truck without fear of overloading. Fleets can also match vehicles to specific routes more effectively, ensuring they use vehicles that fit the exact size of their daily delivery schedule.

Efficiency gains from route optimization help, too. Underpacking often results from running out of time at the loading bay, leading trucks to leave before they’re full to meet deadlines. When this software makes routes more efficient, teams will have more time to load trucks, ensuring they don’t leave anything for a second trip.

Identify Gaps With Cargo Sensors

Similarly, fleets can maximize trailer utilization through cargo sensors. In most cases, fleet owners use Internet of Things (IoT) sensors to monitor shipment locations and quality throughout shipment. The same technology can also identify potential room for improvement in loading practices.

Cargo sensors can monitor the interior space of a trailer, detecting empty areas where additional boxes could fit. Over time and over the whole fleet, this data can reveal which regular routes are the most prone to under-packing. AI algorithms could analyze this data to find where the gaps arise and suggest new packing techniques to maximize the available space.

Cargo sensors can also help by leaving more time to load trucks, just as route optimization software does. Fleets can use this software to automate cargo inspections instead of performing them manually. As a result, routes will become more efficient, providing more packing time.

Rethink Fleet Sizes

Sometimes, maximizing trailer space is less about putting more items in one truck and more about using a smaller truck for fewer items. Fully packing a large trailer is only useful if the driver can still deliver all those items in one route. Alternatively, some fleets may use several fully loaded small vehicles when they could use fewer large ones to deliver the same amount in fewer trips.

If fleets are struggling with high operating costs and use a larger fleet of smaller vehicles, they may benefit by using fewer larger trailers instead. Studies show double-decker trailers cost less per year to operate than using multiple single-deck trailers to transport the same amount of goods.

By contrast, if fleets struggle to fill large trailers but don’t move enough goods to reasonably deliver more in one trip, smaller vehicles may be the answer. Fleet owners can compare trailer fill rates, delivery routes and fuel costs to determine if they should use bigger or smaller trailers.

Maximize Trailer Utilization to Maximize Throughput

If fleet operators follow these tips, they can ensure they don’t leave any excess room in their trailers. As a result, they’ll accomplish more work with the same resources, boosting their operating margins.

To maximize trailer utilization is to increase the company’s throughput. Before buying any additional trucks, fleet owners should ensure they use the ones they have as efficiently as they can.

 

Global Logistics, Global Trade Daily, News, Trucking

FERNRIDE Raises $50M Series A to Scale Autonomous Yard Trucking

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FERNRIDE, a German autonomous trucking innovator, has raised $50M in Series A funding to scale its human-assisted autonomous yard trucking technology. The funding round was led by Deep Tech and Climate Funds (DTCF), a $1BN venture fund backed by the German government, and Munich Re Ventures, the venture capital arm of Munich Reinsurance.

FERNRIDE’s unique approach to autonomous trucking involves using teleoperations to keep a human in the loop, which allows the company to deploy its technology more quickly and safely than other fully autonomous trucking startups. FERNRIDE has already partnered with leading industry players such as Volkswagen, DB Schenker, and HHLA to test and deploy its autonomous yard trucks.

The new funding will be used to accelerate FERNRIDE’s growth and technological development. The company plans to expand its operations globally and invest in its human-assisted autonomy platform. FERNRIDE is committed to using its technology to promote sustainability, increase productivity, and improve worker safety in the global supply chain.

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Global Logistics, Global Trade Daily

Maximizing ROI with Transportation Management Software: Understanding Features and Benefits

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The post-COVID world of logistics and supply chains has seen drastic changes. Keeping those in mind, you are probably no stranger to the constant evolution of transportation management software (TMS) and its impact. These days, supply chain businesses are pushing the boundaries of their freight networks with the help of some seriously advanced TMS software. Studies have showcased that Best transportation management Software features can give you an 8% return on investment (ROI), but hold on tight because the right software could go above and beyond that.

Speaking of savings, here’s a stat: Transportation management solution features have been known to reduce the time spent on tracking and tracing inquiries by a whopping 60%! Now, that’s some serious efficiency right there.

As we sail through changing times, with e-commerce booming left and right, the pressure’s on for retailers and supply chain leaders to up their game. And that’s not all – we’ve got sustainability in the spotlight too.

There are new government schemes that are passed with talks about electric vehicles and charging stations buzzing around. We are surely in for a wild ride that will ensure smoother operations in the supply chain. So, what’s the secret sauce? It’s all about strategic supply chain management. You’ve got transportation management software in your corner, but here’s the catch – it’s only as good as the magic it weaves through its features. 

Adapting to multi-route delivery: Can you guess what’s the most preferred TMS functionality for users? Its predictive estimated time of arrival (ETA). Without ETA knowledge, your delivery operations can become daunting. We’re talking about upset customers, restocking delays, and the whole downward spiral of operations. Every move matters, especially when you’ve got deliveries and pickups spread along the route. A transportation management system helps you find the most fuel-efficient paths, lowering operation costs by 25-30% annually.

Fewer miles = Lesser spend on fuel = Cost Saving = Rise in ROI

Unleashing the power of data analytics: The use of data is crucial to enhance ROI using TMS. It helps you access performance data like the use of owned-fleet vs outsourced fleet. Find bottlenecks in operations, details related to delivery operations, inventory management, and more. When you make decisions based on data, you can be assured of raising above your targets. 

Data Analytics = Cost-effective decisions = Optimized Processes = Better ROI

Automating delivery management: Finding the right balance between shippers and carriers is essential for seamless logistics operations. Ensure maximum capacity storage for shippers. While carriers ensure maximum deliveries are completed with minimum fleet requirements. The use of automated delivery management helps to adapt to current trends and fluctuating economic conditions. Additionally, transportation management software helps with compliance and documentation. This helps avoid penalties due to missing or expired documents and reduces manual paperwork that complies with enhanced ROI.

Maximum Storage Capacity = Lower Fleet Utilization = Rising ROI

Streamlining last mile operations: The use of a modern and advanced TMS ensures a plan to avoid disruptions and sail through any issues that may arise.  With a transportation management system and real-time visibility, you’ve got the tools to smooth out those last-mile wrinkles. The result? It improves delivery times, results in happier clients, and boosts ROI. This helps the leaders to boost the efficiency of last-mile operations.

Real-time Visibility = Improved Delivery Time = Happier Customers = Boost ROI

Planning for order returns: Delivering the parcel to the customer’s doorstep is not the end of the customer’s life cycle. Managing order returns is another headache that most companies fail to optimize. The use of modern transportation management software can reduce annual order return costs by up to 5%. In a world of ever-shifting markets, communication is the glue holding it all together. Add real-time alerts and notifications to the mix and ensure streamlined operations to enhance your ROI.

From the first mile to savings on order returns, it’s a data-driven symphony that’s transforming the supply chain game. The use of advanced TMS functions helps improve throughput and efficiency while deriving a stronger ROI. A transportation management system will not only streamline operations but helps improve ROI to new heights, leading your business to scale uncharted heights.

Summary

This blog focuses on key features and benefits offered by transportation management software. The benefits are tied up with the key metric C-level executives look for when purchasing any logistics software- Improved ROI. 

Author Bio

Matt Murdock works for a leading SAAS-based platform called LogiNext Solutions. Where he helps businesses optimize their logistics operations and improve their delivery performance. With a passion for innovation and technology, Matt is always looking for new ways to streamline logistics processes and enhance customer experiences. In his free time, he enjoys writing blogs based on his experience in the logistics industry. Happy reading!

 

Shipping 3pl
Global Logistics, Global Trade Daily

The 4 Pillars of a Successful 3PL Partnership

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Managing a supply chain is a full-time job. Without consistent oversight, your supply chain process could easily end up with excessive levels of inventory, delays in shipping or transportation, and all sorts of inefficiencies. In today’s convenience-obsessed economy, companies cannot afford to let supply chain issues go unnoticed or unresolved.

That’s why I believe an increasing number of business leaders are choosing to outsource logistics to a third-party logistics provider (3PL). 3PLs offer an array of essential supply chain management services, such as warehousing, transportation, order fulfillment, and inventory management. Think about it: did you decide to start your business so you could spend your days chasing down deliveries, both incoming and outgoing? Outsourcing logistics enables you to focus on the tasks you truly enjoy, like building a distinctive brand identity, growing your operation, and better understanding your customers’ needs.

Now that outsourcing logistics has become more commonplace, more 3PLs are popping up left and right. This can make it difficult to find the right partner for your business.

Track record and reputation 

One of the most important factors to consider when choosing a 3PL is your potential partner’s reputation. This isn’t one of those situations when there are advantages to partnering with a younger business with fewer customers. When it comes to a responsibility as crucial as logistics, it’s imperative to choose a 3PL that has a strong track record and can produce good references from numerous satisfied customers. 

You also want to find a 3PL who has experience working with companies in your industry. Every industry has its own challenges and regulations, and a 3PL that has worked with other companies like yours will be familiar with these challenges and regulations and know exactly how to navigate them. 

To that end, a 3PL with more experience is also more likely to have a larger network of partners. In the likely event of a supply chain disruption, a 3PL with more partners to count on can keep your supply chain running until the issue is resolved. In fact, you can get an even better idea of a 3PL’s reputation by reviewing references from vendors, carriers, and employees, not just customers.

Customization and flexibility 

Again, every industry has its own specific characteristics, and you want to partner with a 3PL that understands what makes your industry distinct. And due to the notorious complexity of supply chains, it’s important that 3PLs consistently adapt their services to meet the needs of each individual customer. A good 3PL will possess the resources to accommodate specific challenges of your business, such as unforeseen spikes in demand, or the need to maintain a certain level of inventory for a certain item throughout the year.

With this in mind, it’s also important to consider how your needs will change as seasons progress. Will there be times when you require additional services that you don’t need at this particular moment? Will the extent of your needs for each service change significantly? For example, at certain times of year, you may eventually require more storage space, or you may need to ship your items to further geographical distances. Your new logistics partner must be able to quickly scale up and meet these needs at any given time.

Finances and technology

Lots of 3PLs might say they are well-positioned for the future. Only some, however, will be able to prove it. When speaking with potential partners, be sure to determine whether the 3PL is in good financial shape and has made the necessary investments to succeed in the logistics industry of 2023. For example, if the 3PL has been able to consistently add new customers, has it simultaneously been making key investments in infrastructure and staff?

Another way to tell if a 3PL is ready for the future is the prevalence of advanced technology in its services. Does the 3PL consistently harness the latest transportation management systems, warehouse management systems, and freight forwarding software to improve efficiency and profitability for its customers? To what extent has the 3PL automated its fulfillment processes? A good 3PL should be able to rattle off all sorts of different ways it has stayed up to date with the latest developments in this ever-changing industry.

Customer service protocols

A reputable 3PL will have many customers, but that shouldn’t stop them from giving the same amount of attention to every single one. This is only possible if each customer has a designated point of contact who is fully prepared to field questions or concerns at any given time. 

As you’re well-aware, supply chains tend to become disrupted at the most inconvenient moments, and every minute that goes by could cause more orders to be delayed. For this reason, your new partner should have someone who will always be available to respond to communications and work with you to resolve sudden issues.

As you’re speaking with potential partners, ask them how they typically handle supply chain disruptions, and how you would contact them for support. A 3PL that understands the importance of customer service will have protocols in place for resolving different types of issues such as delivery errors or product recalls. It’s the 3PL’s job to help you maximize efficiency and profitability, so the last thing they should do is put you in a situation where you’re wasting time and money.

Final thoughts

Choosing the right 3PL comes down to determining whether a potential partner possesses the resources to simplify your business’s logistics-related challenges while also meeting the changing standards of the logistics industry. Once those boxes are checked, it’s just about getting the impression that the 3PL is ready to treat this new partnership as a top priority and can truly help you succeed.

 

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3pls, Global Logistics, Global Trade Daily

Supply Chain Challenges in Offshore Wind Industry

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The challenges facing the supply chain in the offshore wind industry are expected to be significant. According to experts, there are multiple aspects that need to be addressed for successful project implementation. While Pier Wind is one such component, there are other crucial factors like manufacturing ports and vessel construction that need to be considered.

One advantage of the West Coast in terms of offshore wind development is that, unlike the East and Gulf coasts, there is no requirement for specialized Turbine Installation Vessels to install wind turbines into the seabed. These vessels are large and expensive, primarily used for fixed-bottom installations. Floating wind turbines offer an alternative approach that eliminates the need for such vessels, making the process more cost-effective.

However, meeting the U.S. built/Jones Act construction mandates poses a significant challenge. The Jones Act requires vessels involved in domestic transportation to be built in the United States. Plezia, an industry expert, acknowledges this hurdle, particularly regarding vessel construction and compliance with the Jones Act. To gain a comprehensive understanding of the supply chain infrastructure, Plezia suggests referring to the California port readiness plan. This plan provides valuable information on the manufacturers of blades, towers, foundation assemblies, and staging integration required for the development of 25 gigawatts of offshore wind capacity and domestic manufacturing.

Regarding component sourcing, initial plans indicate that sourcing components from Asia is a possibility. This approach would allow for the importation of necessary components for early deployment and integration. However, it is essential to note that over time, the focus will likely shift towards domestic manufacturing to ensure a sustainable and self-reliant supply chain.

In conclusion, the offshore wind industry faces significant challenges in its supply chain. These challenges include addressing vessel construction and compliance with the Jones Act, as well as sourcing components for initial deployment. However, with strategic planning, collaboration, and investments in domestic manufacturing, these challenges can be overcome to unlock the tremendous potential of offshore wind energy.

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Global Logistics, Global Trade Daily, News

AIT Worldwide Logistics joins Smart Freight Centre community

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Membership in nonprofit organization to accelerate decarbonization journey in collaboration with fellow logistics, shipping companies.

As part of the company’s evolving sustainability commitments, global supply chain solutions leader, AIT Worldwide Logistics, recently became a Smart Freight Centre (SFC) member.

SFC is an international nonprofit focused on reducing the emissions impacts of global freight transportation. The organization provides a forum for collaboration among top companies in the logistics industry. Members in the SFC community work together by consolidating existing knowledge and developing new approaches to foster emissions reductions throughout the global supply chain.

According to AIT’s Chief Information Officer and Executive Vice President, Ray Fennelly, partnerships developed within the SFC will help strengthen efforts to achieve the company’s goal of net-zero emissions by 2035.

As a result of becoming an SFC member, AIT is now participating in the Global Logistics Emissions Council, Clean Cargo, and Clean Air Transport programs.

In 2023, AIT expanded its supply chain solutions to help customers avoid emissions as efficiently and cost effectively as possible. For example, in its most recent sustainability report, the company included updates on pilot programs involving sustainable aviation fuel and electric delivery vehicles in multiple locations on three continents.

AIT also became a signatory of The Climate Pledge in 2022, joining more than 400 other companies around the world in an agreement to measure and report greenhouse gas emissions, implement decarbonization strategies, and neutralize remaining emissions with credible offsets.

Email AIT’s experts at sustainability@aitworldwide.com to discover how the team forms partnerships that help customers achieve their environmental goals.

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Global Logistics, Global Trade Daily, News

Partnership Between St. Louis Region and Port of New Orleans Continues with Joint Support for Infrastructure Investment

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St. Louis regional ports and the St. Louis Regional Freightway are jointly supporting the Port of New Orleans’ (Port NOLA) efforts to strengthen the flow of inland river cargo with the development of the Louisiana International Terminal (LIT). The LIT is a new container terminal project on the Gulf Coast that will benefit not only residents and businesses in south Louisiana, but also advanced manufacturing operations, agribusinesses and farmers, as well as other port operations throughout the Southeast and Midwest regions. Port NOLA’s new $1.8 billion state-of-the art container terminal will eliminate air-draft restrictions that limit the size of vessels that can currently call on the Port NOLA, allowing it to serve vessels of all sizes and dramatically increasing Louisiana’s import and export capacity while fostering strategic inland growth.

The St. Louis region signed a Memorandum of Understanding (MOU) with Port NOLA in 2017 aimed at growing trade with a commitment to building existing and new business relationships between the two region’s critical ports of call. The establishment of the MOU led to increased traffic flow of cargo between the middle of America and Port NOLA, which is strongly rooted in container-on-barge service. The container-on-barge service moves an average of 30,000 TEUs per year between New Orleans, the Port of Greater Baton Rouge, Memphis and now St. Louis.

To further these efforts, the St. Louis Regional Freightway is supporting the Port of New Orleans in their development process to seek federal infrastructure funding for LIT.

The St. Louis region’s ports include America’s Central Port in Granite City, Illinois; Port Authority of St. Louis in the City of St. Louis in Missouri; Kaskaskia Regional Port Authority in southwestern Illinois; and the Jefferson County Port Authority in Missouri, south of St. Louis. 

Intermodal river transportation has become an increasingly viable option for shipping containerized freight via traditional barge or new liner vessels. Maximizing one of the nation’s most important and underutilized trade routes and growing the volume of containerized freight moving on the inland waterways are two ways the St. Louis region and Port NOLA are working together and helping to solve global supply chain disruptions.

The St. Louis region is the nexus of six Class I railroads, four interstates located within 500 miles of one third of the U.S. population, and the most strategic location on the inland waterway system – ice-free and lock-free to and from the Gulf of Mexico. 

The St. Louis region has been branded the “Ag (Agriculture) Coast of America” as home to a 15-mile stretch of the Mississippi River that has the highest level of grain and fertilizer barge handling anywhere along the inland waterway system, efficiently moving those commodities between barge and truck and barge and rail. Fifty percent of the U.S. crops and livestock are produced within a 500-mile radius of the St. Louis region, including approximately 80% of corn and soybean acreage. With the world population expected to grow by 25% and exceed 10 billion over the next 30 years, the Midwest will play a key role in feeding the world, and being able to efficiently move ag products out of America’s heartland will be increasingly important.

The Louisiana International Terminal builds on past federal investments in dredging the Mississippi River to 50 feet and locates the new terminal within the protection of the $14 billion Hurricane and Storm Risk Reduction System, which was constructed in the New Orleans region following Hurricane Katrina. The new terminal will allow the container-on-barge service to expand with a dedicated berth space designed for use. Container-on-barge volumes nationwide are expected to grow above 200,000 TEUs by 2050. This necessary, efficient transportation access allows U.S. shippers to compete in global markets and offers expanding trade opportunities for urban and rural communities.

New Jersey-based Ports America, one of North America’s largest marine terminal operators, and Geneva, Switzerland-based Mediterranean Shipping Company, through its terminal development and investment arm Terminal Investment Limited (TiL), have committed $800 million toward the project. In addition to the partners’ investment, the construction of the terminal will be supported by a substantial commitment from Port NOLA, as well as state and federal funding sources. The project is currently in the design and permitting phase of the U.S. Army Corps of Engineers’ environmental review process. Construction is slated to begin in 2025 and the first berth to open in 2028.