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TOP 10 STATES FOR MANUFACTURING 2019

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Archives, Global Trade Daily, State Spotlight

TOP 10 STATES FOR MANUFACTURING 2019

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It’s safe to say that most of the products we use daily were manufactured somewhere. From the clothes we wear to the cars we drive, a long line of wheels must be set in motion before the things we own end up in our hands. That’s why manufacturing and the people who manufacture are so important. 

Whether you have a product that needs manufacturing or need a manufacturer to make that product, finding the best team for the job is paramount to your product’s success and your businesses survival. These 10 states have an edge over the rest when it comes to manufacturing. From incentives to low tax rates to education programs that encourage students to consider manufacturing careers, these states are leading the country in manufacturing. Here’s why.

OHIO

With manufacturers in Ohio accounting for 12.56 percent of the state workforce, this Rust Belt state remains a manufacturing powerhouse despite recent shifts in the manufacturing landscape. Though smaller in size than many other states, Ohio is still the third largest in American when it comes to manufacturing, with a total output of $107.95 billion in 2017, and $50.40 billion in exports in 2018. To date, Ohio is home to more than 12,000 manufacturing firms, with 89 percent of those exporters being small businesses. 

MICHIGAN

Boasting total manufacturing output of $96.22 billion in 2017, Michigan has seen a significant resurgence in manufacturing in the past decade. Still king in the motor vehicle and vehicle parts manufacturing marketplace, the Wolverine State has also begun to earn a reputation for manufacturing quality machine parts, chemicals and pharmaceuticals. A small business friendly state, nearly 90 percent of all exporters in Michigan in 2018 were from that sector. Manufactured goods exports in 2018 alone totaled $55.35 billion.

CALIFORNIA

Consistently ranked among the top 10 states for manufacturing in the U.S., the Golden State workforce has nearly 8 percent of its employees working in that sector. California’s total manufacturing output was more than $300 billion in 2017, and 2018 saw nearly $155 billion in exported manufactured goods. With over 25,000 manufacturing firms (of which 93 percent are considered small to medium-sized businesses), California boasts a skilled workforce that is in it for the long haul, with many workers considering manufacturing a career, not just another job. California manufacturing jobs pay an average of over $100,000 in salary and benefits, compared to the U.S. average of $54,329.


TEXAS

Home to its own power grid and no personal or corporate income taxes, Texas is about as business friendly as you can get among the states. With $247.46 billion in manufactured goods exported from the Lone Star State in 2018, manufacturing accounts for 13.33 percent of the total Texas output while employing 7.04 percent of the state’s workforce. They say everything’s bigger in Texas, and the incentive programs in the state are no exception. Between the ample Texas Enterprise Fund, which has invested more than half a billion dollars since 2004, and major cuts to the state’s franchise tax, Texas is poised to remain one of the top manufacturing states in the nation.

NORTH CAROLINA

The second-largest food and beverage manufacturing state and the overall fifth-largest manufacturing state in America, North Carolina is home to the largest manufacturing workforce in the Southeast. The manufacturing industry employs 460,000 skilled workers in North Carolina–nearly 11 percent of the state’s workforce. North Carolina manufacturing makes up about 20 percent of the state’s gross state product, to the tune of $102.48 billion in 2017 and $31.06 billion in exports in 2018. North Carolina has experienced tremendous growth in manufacturing goods in recent years, with a nearly 35 percent increase in exports from 2010 to 2018. North Carolina’s pro-business climate and expert workforce make it an ideal state for manufacturers.

INDIANA

Manufacturing accounts for nearly 30 percent of the output in Indiana, where $102.59 billion was generated in 2017. Manufacturing accounts for almost 20 percent of the state’s workforce, with 516,900 workers employed in the sector statewide–an estimated one in five workers. In fact, Indiana has the highest concentration of manufacturing jobs in America. With more than 8,500 manufacturing firms already in the state, Indiana is the second-largest automobile manufacturing state in the nation. Along major truck routes and freight lines, goods manufactured in Indiana can reach 75 percent of the U.S. and Canada’s populations within a day’s drive.

FLORIDA

With more than 12,000 manufacturing firms in Florida, the state has made a big push in recent years to encourage more manufacturing. With the fifth-lowest corporate income tax in the country, the Sunshine State employs more than 331,000 workers in the manufacturing sector. Your manufactured goods can get to their destination with ease, because Florida’s multi-modal transportation system offers everything from air and rail to deep-water shipping and highways, all at a low cost of living and a low cost of doing business.

GEORGIA

Another  Southeast state that’s blazing trails in the manufacturing industry, Georgia boasts more 480,000 manufacturing jobs, ensuring that the future remains bright for the industry. That’s why the Peach State developed the Quick Start program and partnered with many in-state universities to teach rising students the skills they need for careers in manufacturing. Industry employs nearly nine percent of Georgia’s workforce across 6,600 firms. In 2018, manufacturers in the state generated $36.81 billion in exports, with a total manufacturing output of $61.06 billion in 2017.

TENNESSEE

According to the Tennessee Department of Economic and Community Development, the state’s growth in advanced manufacturing is higher than anywhere else in the nation; in fact, it’s 42 percent higher than the U.S. average. Manufacturing accounts for 16.13 percent of the state’s total output, which was $55.70 billion in 2017. Tennessee has numerous initiatives to help train its manufacturing workforce, including the NIST Manufacturing Extension Partnership, which provides small to medium-sized manufacturers with training and consulting, all with the goal of helping Tennessee-based manufacturers increase competitiveness in the marketplace via workplace initiatives to increase productivity and lower costs.

SOUTH CAROLINA

Over the past decade, South Carolina has seen manufacturing growth of 18 percent, the second largest jump in the Southeast. Manufacturers in the Palmetto State account for a total of nearly 17 percent of the state’s total output and 11.55 percent of South Carolina workers are employed in the manufacturing industry. In 2018, South Carolina’s exported goods totaled $33.89 billion. In 2018, South Carolina earned an A grade in the Manufacturing and Logistics Report Card by Ball State University’s Center for Business and Economic Research and Conexus Indiana. The report rated each state on criteria such as how desirable it is to site selectors, and the share of Income earned by manufacturing workers within the state.

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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.

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Archives, Global Logistics, Global Trade Daily

BLOCKCHAIN COULD REPLACE MOUNDS OF PAPER AT THE BORDER

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This is the third in a three-part series by Christine McDaniel for TradeVistas on how blockchain technologies will play an increasing role in international trade.

What’s Even Better Than No Tariffs?

Smoother and faster customs procedures could boost global trade volumes and economic output even more than if governments were to eliminate the remaining tariffs throughout the world – up to six times according to an estimate by the World Bank.

Blockchain is a promising technology that, if widely adopted by shippers and customs agencies, could reduce the current mounds of paperwork and costs associated with import and export licenses, cargo and shipping documents, and customs declarations.

Below the Snazzy Surface of Trade Policy

Trade agreements work when the people who want to buy and sell across borders can use them. Engaging in international trade transactions requires diving into the rules and regulations of international customs processes. Businesses either have someone in-house to handle this or they hire companies whose business it is to manage these processes.

Moving goods through the customs process means preparing the relevant paperwork for import or export at each step in the process. The paperwork at each step must be confirmed and verified, sometimes separately by different people. These procedures — in rich and poor countries alike — can be complex, opaque and laden with inefficiencies that raise costs and cause delays at best. At worst, less automated processes can leave the door open to corruption and security breaches.

paperwork in shipping

Trade policymakers have increasingly focused on simplifying and modernizing customs procedures — a policy approach commonly known as “trade facilitation.” Nearly all modern free trade agreements have a trade facilitation chapter and the World Trade Organization has an entire Trade Facilitation Agreement devoted to eliminating red tape at national borders to streamline the global movement of goods.

Too Much Paperwork

The international shipping industry carries 90 percent of the world’s trade in goods but is surprisingly dependent on paper documentation. In a New York Times article, Danish shipping company Maersk commented that tracking containers is straightforward. It’s the “mountains of paperwork that go with each container” that slow down the process.

A shipping container can spend significant time just waiting for someone to cross the t’s and dot the i’s on the paperwork. Delays pose real costs to traders and represent a deadweight loss of resources that could have been spent elsewhere in a more productive manner. The cost of handling documentation is so high that it can be even more expensive than the cost of transporting the actual shipping containers.

Beginning in 2014, Maersk began tracking specific goods such as avocados and cut flowers to determine the true weight of compliance costs and intermediation. The company discovered that a single container moving from Africa to Europe required nearly 200 communications and the verification and approval of more than 30 organizations involved in customs, tax and health-related matters. Maersk’s office in Kenya has storage rooms filled from floor to ceiling with paper records dating back to 2014.

single container paperwork v2

Lost Opportunities

Inefficiencies in customs processes create chain reactions, extending the costs and inefficiencies throughout the transportation industry and all the way to the consumer. In just one example, as many as 1,500 trucks might be lined up on a given day on both sides of the critical border crossing between Bangladesh and India. Many trucks wait up to five days before crossing. Examples like this are not hard to find in developing countries.

Delays for perishable items are painfully costly for traders, but also for consumers. Economist Lan Liu and economist and horticultural scientist Chengyan Yue examinedlettuce and apple imports in 183 countries. They determined that reducing delays from two days to one would increase lettuce imports in those countries by around 35 percent, or an additional 504,714 tons of lettuce, increasing in world consumer welfare by $2.1 billion. The same improvement would increase apple imports by 15 percent, enabling shipment of an additional 731,937 tons and increasing consumer welfare by around $1.1 billion.

Complexity Makes Corruption Easier

Fraud constitutes a major threat to the customs process. Fraudulent behavior can involve the forgery of bills of lading and other export documentation such as certifications of origin. A fraudulent shipper could claim “lost” goods, underreport the cargo, and steal the difference. Or a shipper could misrepresent the amount or quality of shipped goods and pay less than the required amount for their imports.

Fraud can be perpetrated by a shipper, by the receiver of goods, a customs official, or an interloping third party. The greater the complexity of customs procedures and the more discretion granted to customs officials, the more likely corruption will be present at the border, creating both risk and costs for companies working to avoid corruption.

Indeed, corruption acts as a “hidden tariff” for companies and reduces legitimate customs revenue for governments. The World Customs Organization estimates the loss of revenue caused by customs-related corruption to be at least $2 billion.

Blockchain Makes Corruption Harder

Blockchain is a digital distributed ledger that is secure by design. Each transaction in the shipping process is uploaded to the chain if (and only if) it is agreed upon by the other users. It is nearly impossible to make a fraudulent claim or edit past transactions without the approval of the other users in the network.

Blockchain could discourage corruption by simplifying procedures and reducing the number of government offices and officials involved in each transaction. Each transaction can also be audited in real time, allowing users to see exactly when and where disputes arise and exactly what the discrepancies are.

This level of transparency enables participants in the network to hold each other accountable for mistakes or purposeful deception. Though blockchain does not prevent false information from being entered into the system, it does reduce opportunities for the original information to be corrupted by intermediaries involved in the shipping process. Rather than parties relying on the good faith of shippers and customs agents, blockchain greater assurance of the integrity of each transactional record.

Blockchain technology in customs and border-crossing procedures could also be used to prevent circumvention and transshipment—that is, when shippers send goods to a neighboring country before the destination country in an attempt to avoid tariffs on goods from the real country of origin. The importer ends up liable for duties and penalties. (For example, some exporters from China are now sending finished products through Vietnam to avoid new U.S. tariffs on goods from China.)

All In on Blockchain?

The use of blockchain in customs processing is still nascent. An advisory group for U.S. Customs and Border Protection is broadly exploring the role of emerging technologies like blockchain.

IBM and Maersk have partnered to demonstrate how blockchain can simplify shipping. Their plan would allow all parties involved in a container’s shipment to observe and track the container from inception to endpoint. For example, after a customs agent verifies the contents of a container, they can immediately upload information to the blockchain with a unique digital fingerprint that visible to all other users. The ease of access to information throughout the blockchain system reduces time-consuming correspondence among the parties.

For all this to work, customs agencies, shippers and suppliers will have to cooperate to integrate blockchain technology along the supply chain and across borders. By reducing time and cost, blockchain could be a boon to the majority of honest global shippers. By providing greater accuracy and transparency, blockchain would be a bust for dishonest brokers who manipulate the current inefficiencies in customs procedures to commit fraud or gain from corruption.

ChristineMcDaniel

Christine McDaniel a former senior economist with the White House Council of Economic Advisers and deputy assistant Treasury secretary for economic policy, is a senior research fellow with the Mercatus Center at George Mason University.

 

This article originally appeared on TradeVistas.org. Republished with permission.

Archives, Global Trade Daily, Trucking

Trucking Training & Safety Evaluated Following Multi-Fatality Crash

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A devastating crash involving 28 cars and a long-haul truck driver has left the trucking industry re-evaluating safety protocol involving trucker training and vehicle inspections.

The accident – which occurred in April in Lakewood, Colorado, turned deadly when a driver for Castellano 03 Trucking LLC of Houston stated to police the breaks of the truck failed on a downhill grade. The driver – who has a clean driving record, was charged with three dozen felony counts and could face prison time.1 According to records from the Federal Motor Carrier Safety Administration, 30 violations were reported out of 19 inspections spanning two years – some of which were directly related to brakes.2

“Exactly what happened and how remains a matter for the courts to determine,” said John Kearney, CEO of Advanced Training Systems, a leading designer and manufacturer of virtual simulators for truck driver training. “This tragic incident makes clear the importance of stringent enforcement of truck safety regulations and the best possible training for operators.”

“Trucking is thus a linchpin of the economy,” Kearney said. “It is also an industry under intense pressure to manage explosive growth within tight financial margins.”


With trucking moving a reported 70 percent of total freight in the U.S. by American trucking associations, 3 trucking companies are undoubtedly feeling the pressure to provide training while meeting market demands. Additionally, it’s reported the industry is in need of 50,000 more full-time drivers.4 The challenge is recruiting, training, and deploying drivers quickly and safely.

The real question asks if simulator training is the next best step in addressing the challenges and extreme pressures present within the industry. Simulator training provides room for learning without incurring damages and risking lives on the road.

“It’s a key component of training, but not the only component,”  Kearney said. “Classroom instruction still is essential, along with behind-the-wheel training with an experienced operator in a real truck. This is exactly the mix of mandatory training modalities used by the airline industry, which also should be mandatory in the trucking industry. As delivery schedules shorten, highway congestion and the demand for highly skilled truck operators will only increase. It’s to everyone’s benefit to make sure those drivers have had the best training possible.”

This report was provided by Advanced Training Systems LLC and includes the following references:

1 Helsel, Phil, “Truck driver in fiery Colorado crash charged with 40 counts, may face decades in prison,” NBC, May 3, 2019.

2 Miller, Blair, “Company that I-70 crash driver works for has past federal violations for brakes, English proficiency,” The Denver Channel, April 29, 2019.

3 “Reports, Trends & Statistics,” American Trucking Associations, 2019.

4 “Pressure’s on the Trucking Sector,” Insurance Journal, November 15, 2018.


Archives, Global Trade Daily, Trucking

Integrated Solutions & Dedicated Fleets—How They can Maximize your Supply Chain

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As the demands facing manufacturers, wholesalers, and distributors continue to evolve, so must the services transportation and logistics companies provide their customers. All parties involved are recognizing that integrated solutions—a blending of multiple transportation and distribution options—can enable companies to maximize their resources and streamline their supply chains. With one-dimensional measures proving inadequate for overcoming what are often very particular supply chain challenges, transportation and logistics companies have implemented various custom services which take into account the distinct business characteristics of their clients and effectively provide an even greater value proposition.

Companies are wise to consider choosing a service provider offering an integrated business model which encompasses their transportation and logistics needs. By partnering with an integrated solutions provider, companies are afforded the opportunity to implement an assortment of options specifically designed for meeting all of their transportation needs with a single point of contact. These services can range from value added warehousing and less-than truckload offerings to freight brokerage options, all of which can be sourced accordingly to satisfy the complex demands placed upon businesses’ supply chains. An integrated solution thus permits shippers enormous flexibility and convenience in their operations.

One of the most advantageous services integrated providers can offer is dedicated contract services.  Utilizing a dedicated option, business owners are alleviated from the stressors and costs that correspond with owning and managing a truck fleet. A custom dedicated supply chain solution is more adept at incorporating specialized equipment demands and can execute unique delivery requirements especially well. For example, companies in many industries require turn-key or after-hours delivery, while some may require heated or refrigerated transport, tankers, or other distinct equipment.

Custom supply chain solutions are engineered to accommodate these unique circumstances for many client verticals. Equipment and maintenance issues, complying with updated federal and state regulations, recruiting qualified drivers and being exposed to liability claims are just some frequently encountered issues a custom dedicated solution can help resolve.

Even if a company owns a private fleet or outsources their transportation or distribution to a third party, there may be hidden opportunities to add value, at which point a cost-benefit analysis weighing options such as fleet supplementation and other integrated solutions should take place. There are many different needs and expectations involved when it comes to addressing the specific demands within an industry or company.

Custom services in the transportation and supply chain industry can take many forms, but there are common pain points which often exist across industries. These include: recruiting qualified drivers and warehouse specialists; ever increasing customer service and shipment velocity demands – later pickup and quicker transit times; better visibility and communication enabled by technology; the need for continuous process improvement, unencumbered by internal company politics or relationships; and opportunities to curtail rising transportation and distribution costs.

Even though each industry has unique supply chain challenges, integrated providers can draw upon their knowledge of these common areas when analyzing the needs of customers. A successful collaboration must include a partner with demonstrated experience and understanding of these key components.

Utilizing an asset based supply chain provider; with expertise in operating dedicated fleets, LTL networks, brokerage services, and engineered integrated solutions throughout the supply chain, enables organizations to focus on their core competencies while enjoying the efficiencies derived from optimization.

Frank Granieri is Chief Operating Officer of A. Duie Pyle and a member of the company’s Board of Directors. He joined Pyle in 2012, bringing more than 15 years of transportation industry, logistics and executive management experience to his role with the company. Facilitating company activity in marketing, sales, technology and logistics consulting, he is also responsible for A. Duie Pyle’s Custom Dedicated, Warehousing & Distribution and Brokerage business units, which comprehensively serve a wide-array of industries. 

Archives, Global Trade Daily, Special Reports

Integrating Air and Inland Transportation Solves Unique Challenges

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Plenty of challenges can surface in the course of executing global logistics, no matter what industry you’re in. The ability to work with one company to service all your transportation needs – including ocean, air, customs brokerage, trade compliance, vendor management, and surface transportation is vital for having immediate and integrated alternatives to solve problems. This capability may be most valuable when it comes to air cargo solutions—where the clock is always ticking, and time is not on your side. Here’s how some companies have collaborated with C.H. Robinson to develop their integrated air-and-surface-transportation solutions.

Merchandising support for retailers

For retailers, launching a new video game successfully requires more than just the game itself. Merchandising support—in the form of posters, kiosks, and other materials that promote the product—is absolutely essential. So, when one company won a licensing agreement to merchandise a hot new video game to retail centers, they looked for an integrated logistics program that would help them meet the release deadlines.

As is true of any bid for logistics services, the company could only share so much information in their request for proposal (RFP). The RFP had called for air charter lift services, but once they awarded the bid to us, we learned more. While the ship dates for the merchandising were uncertain, delivery deadlines were firm, and the company faced stiff penalties from retailers if they missed delivery deadlines. This information led to a review of cost and available commercial air lift options and recalibration of the initial plan.

The resulting plan was fully integrated and lasted for roughly three months. It included a seven-day air transport, airport to door, from Asia into our warehouses at Los Angeles International Airport or Chicago O’Hare International Airport. The plan had to be flexible, and required extensive coordination. So, C.H. Robinson flew in personnel from our Miami office to the distribution centers in Los Angeles and Chicago to oversee all aspects of the handling and ensure that any last-minute problems could be resolved in real time.

At the warehouses, shipments were broken down, repackaged, and segregated for delivery. Working backward from the in-house delivery date to ship dates, once known, the team selected the best transportation type to deliver to retailers in time.

The challenges that surfaced in these moves required flexibility so that shipments could be moved via a variety of transportation modes. As products arrived at the warehouse and were segregated, faster or slower forms of transportation would be selected to hit the firm delivery dates. If there was sufficient lead time, less than truckload (LTL) shipments might be the best, most cost effective option; if time was tight, the freight might be shipped by the full truckload with team drivers. Wherever possible, LTL shipments would be consolidated and be delivered by multi-stop full truckloads for greater savings.

Overall, the project required coordination of air freight and warehousing, plus full truckload, consolidation, or LTL deliveries from the warehouses to 30 U.S. destinations to meet delivery deadlines. With onsite coordination, the company had an on time delivery percentage of 99% at the retail locations.

Shipping urgent product to bring an automotive plant back online

Automotive production lines have rigorous delivery requirements. Shipments are timed precisely so they arrive just in time for production. If anything goes wrong and materials don’t arrive as expected, entire plants can shut down, putting hundreds of people out of work and costing companies millions.

So, when an automotive plant in the United States went down, they contacted another original equipment manufacturer (OEM) for help. The OEM needed to obtain product from six European suppliers and get them to the plant as soon as possible.

At the time, air capacity was not as accessible. So, our team looked for the next-best alternative: partial charter for several skids of critical materials. The product was flown into Chicago, where a team of drivers was waiting. Due to pre-clearing customs, our team was able to breakdown the aircraft and load the trucks within two hours. Once the trucks were loaded at the warehouse, they headed inland to complete the delivery.

Speed and efficiency were vital in delivering the product to our customer. Our skill is to find and offer different solutions to achieve the client’s goals and get the plant back in operation as quickly as possible.

A solution for urgent heavy-lift shipments in the automotive industry

Sometimes urgent freight comes in big packages. A company in the automotive industry urgently needed to ship machinery from Chicago to Liuzhou, Guangxi, China. Because this was a last-minute request, however, their regular crating company in Michigan was unable to complete the job in time. That’s when the company contacted the C.H. Robinson project logistics team to find alternatives.

Our team not only had a long-time relationship with the company, but also with crating companies in the Chicago area. The team used their knowledge, flexibility, and connections to find outside-the-box solutions, arranging for crating to take place the following day. As the crating was underway, the company also awarded the transport portion to C.H. Robinson.

The urgently needed freight had to be shipped by air. Thirteen crates totaling 166 cubic meters and 44.6 metric tons were transported for the company, with the largest piece weighing 14 metric tons. Cranes were used to load the 13 crates onto the aircraft for transport from O’Hare in Chicago through South Korea to Guangzhou Baiyun International Airport in China. From there, the crates were transported inland to the customer’s door in Liuzhou, Guangxi, China.

The company’s decision to work with one company to service all their transportation needs—including crating, air freight transport, and inland transportation service, provided a solution for their urgent deadline. The cargo was able to be delivered safely and quickly.

What it takes to integrate air and inland transportation solutions

In logistics, there’s simply no substitute for integrated problem-solving. Nowhere is that truer than with urgent freight requirements that require a multi-pronged transportation solution.

When freight absolutely positively has to be there, challenges are sure to arise. Companies can work closely with their logistics provider to select the best, most flexible options to meet their goals. With proper coordination, and by working together, shippers can easily achieve their supply chain objectives—in the long and short term.

Matt Castle is Vice President of global forwarding products & services at C.H. Robinson

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, Trucking

Digital Diesel Pricing Engine Launched for Carriers

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Carriers are now enabled to easily estimate digital diesel fuel costs in real-time with the newly released Digital Diesel Pricing Engine by Genesis Fuel Corporation.

“This new online pricing engine gives carriers a tremendous tool that when fully used will not only outline their contract details but will break out critical information that can be used to offset or fully recover their Digital Diesel surcharge,” states Genesis Fuel’s COO Bruce Dean. 

The Pricing Engine serves as an online platform that provides carriers access to lock in fuel prices, price fuel for the States in their lanes, and gives access to critical information for fuel surcharge recapture.Carriers seeking contract totals can easily do so with Digital Diesel by setting desired fuel quantities and average MPG for their fleet.

“Since Digital Diesel is such a new concept to the industry, we felt we needed a way for customers to kick-the-tires and set up their own scenarios to determine their potential savings and profits. This Pricing Engine also helps carriers understand how they can lock-in their diesel fuel costs and recover the cost of the contract at the same time,” Dean concluded.


Archives, Global Trade Daily, News

Women in Logistics: Kim Maready, VP of Accounting and Finance, Old Dominion Freight Line

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When it comes to exemplary leadership, Old Dominion – a leading provider in LTL and transportation logistics, takes implementing its core values of integrity and greatness to the next level. Through its strong relationships both externally with its customers and internally with each individual working for the company, these values are what keep its employees working towards the Old Dominion vision. With her passion for mentoring and leadership, Kim Maready, Vice President of Accounting and Finance for the company, is a prime example of the way Old Dominion takes her position in leadership one step further by shaping employees through a fresh, unique approach. It was this very approach combined with the culture at Old Dominion that ultimately peaked her interest to join the team in 2014.

“I think the Old Dominion culture places a tremendous amount of value on its people. It is a family-oriented culture and once you join the family, you really feel that. I felt that as an outside service provider. They not only cared about their own success, but they cared about my success as a provider,” she said. “A lot of other large public companies haven’t found that magic really. It’s all about the business and I think that comes through the profitability, or lack thereof, of some companies because ODFL recognizes that it’s profitable because of its people and the amount that they give to our customers every single day.”

Kim has served Old Dominion for five years, bringing with her over 20 years of experience in the middle market Fortune 1,000 space. Prior to her onboarding with Old Dominion, she worked as a partner. It was through her time serving the company that convinced her the Old Dominion culture was different.

“They were a client of mine for six years, so I knew the company well, the leadership team well, their environment, and core values. I spent time serving a lot of different companies across a lot of different industries from banking to manufacturing, to retail, consumer products, technology, and other transportation companies,” she said. “What interested me in Old Dominion was the culture – the leadership team, the value they place on their people, and the integrity that’s here at the company.”

In her role as VP of Accounting and Finance, she does a lot more than oversee the financials. Mrs. Maready takes her passion for mentorship and aims to create a strong team that feels valued and respected by challenging them to take their ideas and concerns to the leadership team. Old Dominion prides itself in its “Open-Door” Policy that gives every person at the company a voice. This approach bolsters the company’s vision to create the next generation of employees that carry on the core values of integrity, honesty, and transparency while managing risks. This policy serves as another differentiator among competitors.

“If you’re trying to innovate and get processes that aren’t working anymore to change, and you’re having roadblocks with those changes or don’t know where to take your ideas, you can come in to any of these 20 or so people and have a discussion and get action around that discussion while having someone that can champion it with their authority or help remove those roadblocks. I think that really mitigates a lot of our risk and it really is unique to this organization. I’ve seen a lot of companies and I haven’t heard of other companies embracing that quite like we do,” she adds.

Beyond the company’s robust customer base and successful operations, Old Dominion boasts a large organization of employees that value excellence day in and out. It’s through these valued employees that Old Dominion serves its customers while creating competitive advantage. The value Old Dominion places in its employees follows the wise saying from Richard Branson: “Whatever industry a company is in, its employees are its biggest competitive advantage.”

“In the short term it’s my responsibility and my team’s responsibility to really grow the next generation of leaders and to help them understand our culture, our core values of integrity, and ensure that we have the right leaders in place two decades down the road from now to maintain the culture and the unique environment that we have. It’s beyond just looking at the debits and the credits that some expect us to be talking about and thinking about every day,” she added.

Kimberly S. Maready currently serves as Principal Accounting Officer for Old Dominion Freight Line, Inc., a position she has held since May of 2017. Mrs. Maready joined ODFL in February of 2014 as the Vice President – Accounting and Finance and is responsible for directing ODFL’s accounting operations, financial reporting, payroll, tax and financial planning. Prior to joining ODFL, Mrs. Maready spent 21 years with Ernst & Young LLP, including 9 years as partner in the Assurance and Advisory Services practice. Her finance and accounting experience spans across multiple sectors including banking, retail, technology and transportation. Mrs. Maready holds an accounting degree from North Carolina State University and is a licensed CPA in the state of North Carolina. She has served as an active board member of Goodwill of Central North Carolina and the Winston-Salem Children’s Museum and the advisory boards of N.C. State’s Poole College of Management and Appalachian State University’s Walker School of Business.

Archives, Global Trade Daily, News

Old Dominion Celebrates Growing Capacity

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Old Dominion announced its success during the first half of 2019 following the opening of six service centers across the nation. Reduced shipping times, increased daily volumes and enhanced delivery flexibility are key benefits the service centers offer for customers.

Locations for the new center upgrades include:  Mobile, Ala., Pompano Beach, Fla., Houston, Texas, Otay Mesa (San Diego), Calif., Texarkana, Ark., and Anaheim, Calif.

“Our 2018 results confirm that strategically opening new and renovating existing service centers to accommodate customer demand is helping to grow our business,” said Terry Hutchins, Vice President of Real Estate. “We will continue that strategy of searching for new sites to increase capacity and grow our network to continue to deliver premium service that exceeds customers’ expectations.”

The implementation of new service centers are carefully considered in terms of location, network capacity opportunities, and access to the highest quality workers. Each center is equipped with the highest quality technology in anticipation of increased customer demand.

“We search for locations in growing markets where we have access to quality workers to expand our network capacity. Expanding our network allows us to immediately accommodate customer needs, and is critical to maintaining our award-winning low claims ratio and guaranteed on-time delivery,” said Hutchins.

The company announced scheduled open houses for each of the new locations to celebrate their success:

Mobile – March 13

Pompano Beach – March 20

Houston – April 11

Otay Mesa – April 24

Texarkana – April 25

Anaheim – April 25

 

Source: Old Dominion Freight Line