BlogOnLog

10 TIPS FOR A SAFER WAREHOUSE

2010-07-14T09:49:00.005-04:00

10 STEPS FOR A SAFER WAREHOUSE
Injury prevention starts with leadership, training, communication, risk assessments, and metrics.

1. START AT THE TOP
While everyone is responsible for their individual safe behavior, the company's leadership team must own, lead, and participate in safety management. It's not enough for leadership to merely support safety; they must exhibit behavior that clearly demonstrates to all associates that safety is critical to the success of the organization.

2. TRAINING IS PARAMOUNT
From the first day of an employee's tenure with a company, training is key to safer warehouse operations. Educate all associates on safety-related practices, requirements, and responsibilities. Once the organization's vision and safety requirements are explained, the groundwork has been laid for continuous training.

3. OBSERVE ASSOCIATES IN ACTION
After associates receive basic safety training, reinforcing workplace safety behavior is ongoing. Managers should observe, for example, how an employee drives a forklift during the first few days following forklift training, and be prepared to offer immediate and meaningful feedback. Good managers point out the positives of safe behavior, and coach areas that need improvement, often on an ongoing basis.

4. GET EMPLOYEES INVOLVED
Create cross-functional, in-house safety teams that meet at least monthly to focus on preventing accidents and injuries by identifying hazards and unsafe conditions in the warehouse, and ensuring proper controls are in place to bring all hazards within acceptable levels of risk. Teams should include warehouse workers, forklift drivers, supervisors, vendors, and customer liaisons.

5. WORK SCHEDULES TO MATCH DUTIES
It is important for employees to be safe, and for employers to create a reasonable workday and safe workplace to facilitate their duties. To avoid unsafe behaviors caused by fatigue, consider implementing ergonomic improvements; rotating job assignments; supplementing shifts with temporary or part-time employees; adding a shift; and providing adequate rest and beverage breaks, especially in hot and humid conditions.

6. ASSESS RISK
Identify individual job activities, the potential hazards associated with each activity, and their existing controls. Then assign a risk rating to each activity by using a numeric formula that considers the probability of loss, the severity of loss, and the frequency of each activity. The risk rating will determine if additional controls are needed

7. PERFORM SITE ASSESSMENTS
A group of health and safety professionals should work hand-in-hand with site management to seek out unsafe conditions and hazards, and create action plans to bring risk within acceptable levels before employees are injured or property is damaged.

8. INVESTIGATE ACCIDENTS
After an incident, identify immediate and upstream root causes, and implement better controls to prevent a repeat occurrence.

9. COMMUNICATE
Frequent and consistent communication between all levels of management and associates regarding safety processes, performance, and expectations is critical to building an effective safety culture and successful safety performance.

10. GATHER MEANINGFUL AND TIMELY METRICS
Create metrics that reflect the presence of safety (leading indicators), not just the absence of safety (trailing indicators). Metrics must also be designed based on their intended audience. For example, metrics for safety managers will need to be very detailed and facilitate analysis of correlations and trends. Metrics for operating managers need to be at a higher level and help identify deficiencies the team can address.

A tip of the hat to Inbound Logistics and thank you!

Looking Beyond Rates: Fundamentals of good contract negotiations go far beyond mere pricing

2010-05-04T15:34:00.003-04:00

Pure data can provide valuable insight, but it doesn’t tell a complete story.

Hiding behind pure numbers will only create a one-sided, noncompetitive, zero-sum contract winner — and doom the negotiations, to failure.

The recovery is here, and not a moment’s too soon. Shippers and carriers across all transportation modes that have struggled through the Great Recession, suffering billions of dollars in losses and setting back their business by years, are feeling better about the economy and trade environment than at any point in the past two years. Retail sales are surging, and dramatically depleted inventories are being rebuilt.

And, after a rare high-profile public eruption over winter cargo backlogs wrought by capacity constraints resulting from carriers’ survivalist mentality, shippers and carriers appear to have found middle ground in attempting to resolve their differences instead of bickering about them.

It is, indeed, a new world order — or appears to be. But the true test of how both sides react will come in the next several weeks, as shippers and carriers wrap up what could be the most important contract negotiations in years, if not more.

Will carriers be true to their word and end the slash-and-burn rate-cutting wrought by their pursuit for market share? Will shippers become true partners in a market where success and speed to market can be determined by the success of their transportation providers?

Will the empathy and collaboration that both sides have long pursued but seldom achieved finally have staying power, or will both sides retreat into their business-as-usual mentality when the inevitable recovery picks up steam?

It is this last point that should be the start of the healing process, and the starting point in the negotiation process, because in an ever more complex supply chain, a good contract goes far beyond mere price.

Why? Because to be successful in this new economy, empathy and collaboration need to ride on the same vessel toward the mutual destination of profitability. Collaborating creates value, and executive empathy makes money for both.

To a certain degree, almost everything in business has become data-driven. It’s common practice today that if you can’t measure it, it doesn’t impact the bottom line. Pure data can provide valuable insight, but it doesn’t tell a complete story. The news is filled with businesses that have used numbers — real or manufactured — to justify prices and volumes that are no longer with us.

From my perspective, I’ve noticed some cracks in this data-driven, numbers-only foundation on which our industry used to build and expand profits. Carriers, importers, exporters and freight intermediaries no longer can base their relationships solely on slot commitments, no-roll clauses, general rate increases, “no show fees” and local charges. Vested collaboration, empathy for both partners’ profitability and efficiency is tantamount to long-term success.

We are moving into the “conceptual age” of business, where the right price is not necessarily the lowest price. It’s no longer enough to be a great numbers person. We now expect more of our leaders, and empathy and collaboration are among those qualities.

Understanding the feelings of others is good behavior, but empathy particularly pays off when organizations — that is, the executives who represent companies — understand what their customers and partners are feeling during the decision-making process.

How does empathy and collaboration impact the success of organizations during negotiations? The strongest point to be made is that both qualities involve focusing less on purely statistical internal issues, and more on a collective way to gain mutual benefit. The opposite of collaborative behavior is internally competitive, command-and-control behavior. This is a form of corporate self-absorption that remains from the Enron days of blind selfishness.

It is easy to hide behind pure numbers and cold-hard metrics, but hiding now will only create a one-sided, noncompetitive, zero-sum contract winner — and doom the negotiations to failure in 2010.

Too often, business leaders focus their attention on rate structures during carrier-contract negotiations while ignoring other important facets of a business relationship. Failure to address the entire scope of the relationship can cause a business to fall short when trying to meet certain goals. Empathy and collaboration will bring to light these more subtle issues that should be addressed to create mutual profits. The following are numerous strategies your business should employ to achieve success in contract negotiations for this year and beyond.

1. Pickup Performance.
How can your delivery be on time if your pickup isn’t? Late pickups cost you more money, sometimes at overtime rates. Before agreeing to a contract, you should know your partner’s on-time pickup percentage and how the carrier calculates that measurement on a customer-specific basis. On-time delivery statistics are calculated in a similar way and should be readily available on customer reports — by customer and/or terminal.

2. Invoicing Accuracy.
This important metric is often overlooked but can be the key to saving a company time and money. Companies that invest in an imaging system allowing them to use information directly from a customer’s bill of lading can ensure accuracy while improving invoicing efficiency. If this isn’t one of the measurements you expect to receive from your carrier, it should be.

3. Claims Structure and Response Time.
Getting a shipment to its destination on time doesn’t matter much if it doesn't get there in one piece. How quickly are claims settled? What is the percentage of claims-free service? What is the claims ratio of the terminal that will serve your customers? Partners should make these performance statistics available for individual customers and terminals.

4. Interactive Web Presence.
Examining your partner’s Web site can help you determine the availability of customer service when you need it. Is the Web site interactive in a number of ways to provide the information you need? The site should allow you to enter pickup requests and download imaged documents and customized reports. It also should offer a variety of track-and-trace capabilities, rate quotes, transit times, and terminal information.

5. Solid Communication and Open Dialogue.
Determining how much customers are involved in their partner’s decision-making process indicates the level of interest a company has in delivering quality service. Initiating a good communications program and creating collaboration with customers is essential. The open dialogue will reveal positive and negative qualities of each organization.

6. Responsiveness.
You should be able to talk with experts in each of your partner’s departments when you need them. Is the line of communication open and results-oriented? Maintaining a strong communication link goes hand-in-hand with developing a strong, effective partnership.

7. Customer Service.
A quick and readily available information resource is invaluable to you and your customers. This resource should provide an answer to any question you or your customers might have about transporting or tracing your shipments. The debate can rage about whether the customer service presence should be “in the market” and the costs associated with same, or if a centralized approach is more consistent, and less costly. The mutual goal, however, must be that the core of a long-term, mutually beneficial partnership is excellent customer service.

8. Empathy and Proactive Account Management.
A partner should know when and why a service failure occurred. If it delivers its shipments on time 98 percent of the time, your partner should be able to elaborate and explain what went wrong with the other 2 percent. Organizations should follow up on every service failure, not only to find out what went wrong, but also to initiate corrective action plans to ensure the same problem does not happen again. Taking this stance will make the company a better partner, and, in turn, provide you with better performance. Ask your supply chain organizations how they analyze service defects.

9. Continuous Improvement Mentality and Training.
The kind of training available to your partner’s employees, how often they are trained and the degree to which they are trained should be part of any organization’s strategy in providing superior service to its customers. Asking questions about the training process will give you an indication of the company’s emphasis on quality performance. Does the carrier have an operations training program in place that emphasizes freight handling? Are its drivers trained? Does the carrier offer hazardous materials training to its employees? What about general safety training measures? In addition to these training processes, an organization should have accountability procedures in place at each facility to help reduce costs and waste.

10. Multiyear contracts.

More industries are moving toward multiyear contracts, just as the major third-party logistics providers have over the years via “open book” forecasting, budgeting and costing. A multiyear deal will create an even playing field for each organization to drive out costs (through continuous improvement plans), and increase mutual, long-term profitability. Week-to-week capacity, no rolling, peak-season surcharges, local charges, no-show or dead freight charges become archaic terms of the past, and these tired phrases will become non-issues when looking at the long-term picture of growth, efficiency and profitability.

11. Vested collaboration.
Does your partner organization promote an open, sharing environment or is it merely a transactional workplace? How much does it share with customers via popular social networks such as Twitter and Facebook, or through business-focused networks such as LinkedIn? Creating an atmosphere that has an “open-source” mentality will allow for new ideas to be shared freely and will present an attractive corporate culture to experience. Vested collaboration creates empathy, empathy ensures mutual understanding, and mutual understanding will generate a collective beneficial result.

If you take the time to think critically about these often-ignored aspects of the collaboration process, your company will be equipped with the knowledge and trust it needs to achieve the best possible results far into the future. Consistency, preparation, collaboration and common sense should be your guiding principles when negotiating with your partners.

Successful partner organizations that build mutual empathy and vested collaboration need to establish a committed leadership structure — creating insight, foresight and trust, not just oversight of the annual negotiations. By consistently collaborating on budgets, forecasts and modeling scenarios, with all of the above points taken into consideration, your organization will enjoy long-term fiscal success by being prepared for the best of situations, and to forestall the worst. Empathy will create a collaborative atmosphere during the negotiation phase and will chart a course for a lasting, mutually beneficial business platform into the future.

Michael Stolarczyk is president of Kontane Logistics in Charleston, S.C., and has held various supply chain management roles with Exel and A.P. Moller-Maersk. He can be contacted at michael@kontanelogistics.com.

You can follow him on twitter at http://twitter.com/mjstolarczyk

Register for the EyeForTransport's 3pl Summit in Atlanta - Save a 100 bucks!

2010-03-24T15:18:00.006-04:00

I just registered for the 8th Annual 3pl summit in Atlanta, from June 21st to June 23rd. If you use the code "MIKES100" you can get an additional $100 off your registration fee. I hope to see you there in June! It is my goal to start talking about locative logistics with many of the participants. Additionally, let's create some platforms for future collaboration with Kontane Logistics.

Registration Link: 8th Annual 3pl Summit

DAIMLER TRUCKS NORTH AMERICA SIGNS MULTI-YEAR CONTRACT WITH KONTANE LOGISTICS

2010-03-08T09:54:00.005-05:00

Carolina-Based Third Party Logistics Leader to Perform Sub-Assembly and Sequencing Services for Freightliner Manufacturing Facilities

STATESVILLE, N.C.—March 1, 2010— Kontane Logistics, an industry leader in Third Party Logistics with offices in North and South Carolina, has signed a multi-year contract to perform wheel and tire assemblies for Daimler Trucks North America’s Freightliner Group, the largest heavy-duty truck manufacturer in North America and a leading manufacturer of medium-duty and specialized commercial vehicles. The Kontane facility in Statesville, NC, will support Freightliner locations in Cleveland and Mt. Holly, NC, and Gaffney, SC. Activities included in the contract subsist of the mounting, balancing, and sequencing of over 200,000 tires per year for Freightliner models such as the Argosy, Columbia, and Cascadia class trucks, as well as Freightliner-made school buses and recreational vehicles.

In February, Kontane Logistics, in collaboration with Daimler Trucks North America and Freightliner, took over operations at the existing Alcoa Subassembly Logistics (ASL) plant in Salisbury, NC. Prior to the take-over, ASL was in the midst of a company-wide consolidation and potential relocation to Ohio. As a result of Kontane’s ability to meet the Freightliner service level requirements, the company will be able to ensure a smooth transition, retain long-term business in NC, and maintain employment for existing staff of ASL. Full sub-assembly and sequencing production is scheduled to begin in April 2010.

“The opportunity for Kontane Logistics to create a long-term, vested partnership with Daimler and Freightliner will poise our organizations for growth and profitability in this evolving economy,” said Michael J. Stolarczyk, President of Kontane Logistics. Ed Byrd, CEO and owner of Kontane, Inc. and NC resident, went on to say, "Kontane continues to make local investments in response to a resurgent commercial vehicle market. Our investment in Iredell County will maintain opportunities for the local community, such as sales to state and local vendors as well as an expansion of the state and local tax base. We are thrilled to have the opportunity to keep this vibrant operation in North Carolina.”

The new facility will add to Kontane's presence in the Carolinas, where the company has locations in the cities of Hickory, Troutman, and Statesville, NC, along with a large distribution center and Foreign Trade Zone in Charleston, SC.

Kontane Logistics
Kontane Logistics was established in 1995 as a separate operating division of Kontane Inc., the southeast’s premier packaging design and builder based in Hickory, NC. The Logistics division was originally formed as a dedicated third party logistics provider involved with packaging and exporting to several countries around the globe. Since 1997, Kontane Logistics has expanded to include warehousing and distribution, cross-docking, freight consolidation, import material receipt, line sequencing, parts distribution, development of logistics information systems, sub-assembly, and foreign trade zones services. Kontane Logistics currently has four locations in throughout NC and in Charleston, S.C. For more information, visit www.kontanelogistics.com or call 843-352-0011.

Containership Company Launches in April

2010-02-26T17:00:00.004-05:00

A startup container shipping line based out of Norway said Friday it will launch a direct service from the Chinese port of Taicang to Southern California in April.

The service will be operated with five vessels, ranging in size from 2,600 TEUs to 2,900 TEUs, said Franck Kayser, chief operating office of the new line, The Containership Company. Transit time will be 16 days from Taicang to Southern California.

Kayser said in an interview with American Shipper that the idea to base the service out of Taicang was to reduce costs for shippers in China’s Jiangsu province. Taicang sits on the Yangtze River about 30 miles upriver from Shanghai. Kayser said calling directly at Taicang would reduce $150 to $200 in trucking costs shippers generally have to pay to move containers to Shanghai.

“It’s the first direct service from Taicang, so it gives us first mover’s advantage,” he said.

To emphasize the potential uniqueness of the service, American Shipper affiliate ComPair Data has no listing for Taicang for any direct services to North America. However, Taicang is a growing port with more than 1 million TEUs of volume and a diverse base of shippers, including BP, DuPont, Unilever and Nike.

Reports of the emergence of The Containership Company surfaced in 2009 amidst the worst crisis in the history of container shipping. The idea for the company was reportedly born out of the idea of taking chartered tonnage at attractive rates in a depressed market, then passing the savings on to shippers.

Kayser said the five vessels for the service have been chartered for three to four years.

“Of course, when you take them on a longer-term basis, you pay a little bit over the market rate, but we have got a reasonable rate,” he said.

Kayser said it has yet to be decided whether the service will call in Los Angeles or Long Beach, and that the line is in negotiations on where to call. He also said The Containership Company will launch a service between China and northern Europe at some point in 2010.

The company is backed by a group of 30 investors, none of which own a “significant part,” Kayser said. The company will be based in Norway, with startup capital of $25 million.

Note: This is a great opportunity...good luck to Captain Franck and the whole Containership team! God speed!

10 Fundamentals Beyond Price in Contract Negotiations

2010-02-05T11:20:00.002-05:00

Michael J. Stolarczyk

Kontane Logistics
www.kontanelogistics.com

It’s that time of year again — time to negotiate carrier contracts! Too often, business leaders focus their attention on rate structures during carrier-contract negotiations while ignoring other important facets of the carrier process. Failure to address the entire scope of the carrier process can cause a business to fall short when trying to meet certain goals. Below are tips your business should employ to achieve success as it dives into its carrier-contract negotiations in 2010 and beyond.

1. Pickup performance.
How can your delivery be on time if your pickup isn't? Late pickups cost you more money, sometimes at overtime rates. Before agreeing to a carrier contract, you should know the carrier’s on-time pickup percentage and how the carrier calculates that measurement on a customer-specific basis. On-time delivery statistics are calculated in a similar way and should be readily available on customer reports — by customer and/or terminal.

2. Invoicing accuracy.
This important metric is often overlooked but can be the key to saving a company time and money. Carriers that invest in an imaging system that allows them to use information directly from a customer’s bill of lading can ensure accuracy while improving invoicing efficiency. If this isn’t one of the measurements you expect to receive from your carrier, it should be.

3. Claims structure and response time.
Getting a shipment to its destination on time doesn’t matter much if it doesn't get there in one piece. How quickly are the carrier’s claims settled? What is the percentage of claims-free service? What is the claims ratio of the terminal that will service your customers? Carriers should make these performance statistics available for individual customers and terminals.

4. Interactive Web presence.
Examining your carrier’s Web site can help you determine the availability of customer service when you need it. Is the Web site interactive in a number of ways to provide you with the information you need? The site should allow you to enter pickup requests and download imaged documents and customized reports. It also should offer a variety of tracking and tracing capabilities, rate quotes, transit times, and terminal information.

5. Good communication and collaboration.
Determining how much customers are involved in a carrier’s decision-making process indicates the level of interest a carrier has in delivering quality service. Initiating a good communications program and creating collaboration with customers is essential.

6. Responsiveness.
You should be able to talk with experts in each of your carrier’s departments when you need them. Is the carrier’s line of communication open and results-oriented? Maintaining a strong communication link goes hand-in-hand with developing a strong, effective partnership.

7. Centralized customer service.
A quick and readily available information resource is invaluable to you and your customers. This resource should provide you with an answer to any question you or your customers might have about transporting or tracing your shipments.

8. Empathy and proactive account management.
A carrier should know when and why a service failure occurred. If it delivers its shipments on time 98 percent of the time, a carrier should be able to tell you what went wrong with the other 2 percent. Carriers should follow up on every service failure, not only to find out what went wrong, but also to correct the problem so it doesn’t happen again. Taking this action will make the carrier a better company, and, in turn, provide you with better performance. Ask your carrier how it analyzes service defects.

9. Continuous improvement mentality and training.
The kind of training available to your carrier’s employees, how often they are trained and the degree to which they are trained should be part of the company’s strategy in providing superior service to its customers. Asking questions about a carrier’s training process will give you an indication of the company’s emphasis on quality performance. Does the carrier have an operations training program in place that emphasizes freight handling? Are its drivers trained? Does the carrier offer hazardous material training to its employees? What about general safety training measures? In addition to these training processes, a carrier should have accountability procedures in place at each facility to help reduce costs and waste.

10. Vested collaboration.
Does your carrier promote an open, sharing environment or is it merely a transactional organization? How much does it share with customers via popular social networks such as Twitter and Facebook, or through business-focused networks such as LinkedIn? Creating an atmosphere that has an “open-source” mentality will allow for new ideas to be shared freely and will present the carrier as an attractive corporate culture to experience.

If you take the time to think critically about these often-ignored aspects of the carrier process, your company will be equipped with the knowledge and trust it needs to achieve the best possible results for the year to come. Consistency, preparation and common sense should be your guiding principles when negotiating with your carrier partners. Revisit these tips in the years to come to ensure that all of your company’s requirements are covered. Good luck this year!

This is being featured on the JoC website... http://www.joc.com/node/416514.

Thanks to Marsha from the JoC and to LP for a great assist on the edit!

Kontane Logistics Initiates Daimler 3pl Sequencing Project

2010-02-01T10:24:00.003-05:00

We started the Daimler Truck North America tire sequencing project today, February 1, 2010. Our first truck was loaded around 10:15 with tires going to the Freightliner plant in Cleveland, NC. We will be mounting, sequencing roughly 800 tires per day, bound for the three Freightliner truck manufacturing plants in the Carolina's (Gaffney, Mt. Holly, and Clevelend). Kontane Logistics and DTNA have collaborated for over 12 years, but this new program will define the long-term rapport we have shared, and will share in the future. Nice work!

KONTANE LOGISTICS IN CHARLESTON NAMES NEW COMPANY PRESIDENT, MICHAEL J. STOLARCZYK

2009-12-21T11:00:00.000-05:00

CHARLESTON, S.C.—December 21, 2009— Kontane Logistics, an industry leader in Third Party Logistics located at 1000 Charleston Regional Pkwy, is pleased to announce the addition of industry veteran, Michael J. Stolarczyk, to its leadership team. Stolarczyk has joined the company as President and will be based in the company’s Charleston, S.C., location. Kontane Logistics currently operates in four locations within North and South Carolina and is a division of Hickory, N.C., based Kontane Inc.

“We are extremely excited to have a dynamic leader like Mike as part of our growing team,” said Kontane Inc. CEO Ed Byrd. “His wealth of experience will help us maintain our leadership in providing client-aligned supply chain solutions for our various clients throughout the world.”

Prior to joining Kontane Logistics, Stolarczyk served as CEO of the Toledo-Lucas County Port Authority in Toledo, Ohio. Stolarczyk’s past work experiences include serving as Senior Director at Exel Logistics in Westerville, Ohio, and holding various management positions within the A.P. Moller/Maersk Group, including Maersk Hong Kong Limited and Maersk Agency Sro, in Prague, Czech Republic. In 2002, Stolarczyk was named to Fast Company magazine’s debut list of “Fast 50: Global Innovators Whose Achievements Helped Change Their Company or Society.”

“I am honored to join the Kontane organization and to have the chance to work with the Byrd family,” said Stolarczyk. “Collaboratively, we are going to continue to provide logistic solutions and build upon our local, regional reputation as a client-focused supply chain partner. I think the right time to take some aggressive steps is when the economy is in flux, so when the new economy bounces back, Kontane and our customers will be ahead of the curve.”

Stolarczyk received his Bachelor of Science in Business Administration from West Virginia University, and has studied at University of Pennsylvania’s Wharton School of Business and University of Virginia’s Darden School of Business. For more information about Kontane Logistics or to contact Stolarczyk, visit www.kontanelogistics.com or call 843-352-0011.

Kontane Logistics
Kontane Logistics was established in 1995 as a separate operating division of Kontane Inc., the southeast’s premier packaging design and builder based in Hickory, NC. The Logistics division was originally formed as a dedicated third party logistics provider involved with packaging and exporting to several countries around the globe. Since 1997, Kontane Logistics has expanded to include warehousing and distribution, cross-docking, freight consolidation, import material receipt, line sequencing, parts distribution, development of logistics information systems, sub-assembly, and foreign trade zones services. Kontane Logistics currently has four locations in throughout North Carolina and in and Charleston, S.C. For more information, visit www.kontanelogistics.com or call 843-352-0011.

Port Authority Board Selects Michael J. Stolarczyk as New President and CEO

2009-05-11T14:52:00.002-04:00

TOLEDO, Ohio, March 26, 2009 – The Toledo-Lucas County Port Authority Board of Directors approved a contract with Michael J. Stolarczyk, selecting him as the new President and CEO for the Toledo-Lucas County Port Authority at their board meeting held today.

A news conference with Michael J. Stolarczyk and members of the Board of Directors will be held on Wednesday, April 1, 2009 at 9:30 a.m. at the Toledo-Lucas County Port Authority offices, located at One Maritime Plaza.

Mr. Stolarczyk will begin his employment on April 1, 2009. “Mike has an impeccable background and brings a new perspective and the cohesive management skills and expertise that our board sought after in a new leader”, says William J. Carroll, Toledo-Lucas County Port Authority Chairman. “The opportunity that lies within the Port Authority is remarkable and the board expects Mike to not only embrace this but to create an environment of synergy among our staff, our partners and our community to allow us to capitalize on our past success and achieve a new level accomplishments.”

Michael Stolarczyk was most recently employed by Exel Inc., (www.exel.com) a contract logistics provider in the Americas with over 500 sites throughout the U.S., Canada and Latin America. He resigned from his position as Senior Director, Business Development – Americas to take the position with the Toledo-Lucas County Port Authority.

In his role with Exel, Mr. Stolarczyk helped create client alligned solutions, from warehousing through to distribution. The bulk of his career was spent with the A.P. Moller Group (Maersk Line) where he served in various positions in the U.S. and spent five years managing their operations in Prague, Czech Republic. While in the Czech Republic he focused on public/private partnership projects in Eastern Europe and created an inland multimodal terminal that handles 150,000 loads per year.

He has experience in building strong organizations and driving growth and business development. He has a background in transportation, shipping and ocean transport and port operations and has experience with international and multimodal operations. Mr. Stolarczyk and his family will be relocating from Upper Arlington, Ohio

Launching VisibleLogistics, the on-line solution for demanding customers

2008-02-08T21:39:00.001-05:00

Where is my stuff?

Isn't it all to often the question? If you have a small business shipping what it sells, or if you buy from one, this is happening all the time: once a shipment has left your premises, it is most of the time completely invisible for you or your customers. You are depending on the efficiency and good will of a transporter with whom you often have no direct communication, should anything go wrong. Your customer is just as left in the dark as you are. But it is not better for the party
organising the transport: it has no way of making sure that the delivery address is correct, that there will be someone to receive the package or simply to warn that his trucker is blocked in a trafic jam.

This was the first idea behind VisibleLogistics. For people running small businesses, keeping tracks of orders and shipments is vital but it can also be very time consuming. Phone calls, sending email and faxes are all important for managing communication with suppliers, transporters or customers.

And very often, these people have to copy all these exchanges of information in spreadsheets again.

This requires duplication of efforts and it takes precious time. The ideal tool for small and medium businesses.

With VisibleLogistics, smaller business can save themselves these tedious aspects and unreliable ways of communicating. VisibleLogistics merges in one on-line and on-demand application all the processes linked to orders, deliveries, inventory and communication with the other partners of the supply chain. It monitors orders and shipments status, and automatically sends e-mails to the relevant parties when important changes occur.

Unlike the track and trace systems provided by the express carriers and large shipping companies, VisibleLogistics monitors orders and shipments across different carriers and transport modes. This can be useful if agents are moving shipments with a variety of different carriers. Indeed VisibleLogistics is being used by some small forwarders to provide shipment monitoring and status updates to their customers, enabling them to provide service levels that match those of their larger competitors.

Sell it, Ship it, See it.

The benefits of VisibleLogistics are improved accuracy, round the clock availability of information for customers and a single view of all order and shipment activity.
VisibleLogistics is designed to support small businesses by:

- Managing orders using an easy to use application controlled through any standard web browser

- Giving buyers and carriers on-line access to information about orders, status and catalogues

- Notifying business partners by e-mail or SMS when orders are created and when statuses change

- Adding comments to orders, communicating with business partners and vice-versa

The basic features of VisibleLogistics are free to use and can be found at www.visiblelogistics.com.

I love it..."where is my stuff?"

Don't we always ask this of ourselves, and plenty of times during our daily work life...this is an awesome tool for you gonzo supply chain executives out there...

Ken Lyon and crew are onto something here...give it a try...tell me what you think.

youship.com - powered by Maersk Line

2008-01-27T23:01:00.000-05:00

A.P. Moller - Maersk affiliate www.youship.com, an online site through which shippers can directly book cargo, is in the midst of a publicity drive in which it offers shippers freight rates for as little as $1.

The company said for the second week in a row, it would offer the $1 freight rates to a limited number of customers on Monday and Tuesday as part of its "Week of Fortune" promotion.

The rate is on 20-foot containers moving from Hong Kong to Japan, Australia and Rotterdam as well as from Antwerp to Turkey and Rotterdam to Morocco.
The company said it would offer the rate on "a number of bookings both Monday and Tuesday, but it is first come, first served."

The site, which is using consumer marketing techniques to sell freight also offers "to send flowers to your loved one" for shippers who book freight on Wednesday.

Got questions about the site? The company said those who register at its site in advance can participate in a teleconference on Jan. 23 with the site's director, Lars Jensen, and other executives.

Thursday and Friday? That's Happy Hour High Cube day, youship said.

But the selection is limited -- you can only get boxes that are dry, and nothing on the rocks -- youship doesn't do reefers!

Okay, okay, maybe I am a little too APM focused this month, but lets give credit where credit is due. 20 years, and I never thought they would be this forward thinking...but damn. Here it is. I just registered on youship.com, and suggest you do the same. You never know when you might need to ship a 20 footer of Palm beer from Belgium to Turkey!

Aldridge Joins CEVA, Creates Biz Unit Under International Logistics Solutions Moniker

2008-01-19T23:43:00.000-05:00

CEVA Logistics said it has appointed Bill Aldridge as executive vice president for its newly created business unit, International Logistics Solutions.

ILS aims to provide end-to-end supply chain services from purchase order to point of sale, focusing in the Asian and other emerging markets.

Aldridge, who is based in New Jersey, was international supply chain president at DHL/Exel Supply Chain and served as managing and regional director for companies including American President Lines and Hapag-Lloyd (America).

“He has a unique understanding of the complexities of this business, and has had remarkable success in managing trade between Asia and the West,” said Vittorio Favati, CEVA’s chief operating officer for the Asia Pacific, in a statement.

Bill will have this new biz cooking in no time...look for an aggressive growth strategy. In this unstable market, a strong leader, presence in China could sway many clients to finally outsource their origin needs, and then some, across the full supply chain.

ShipsandBoxes.com Launched

2008-01-12T22:34:00.000-05:00

Two-dozen container shipping companies on Thursday launched a publicity drive to showcase the industry's crucial role on the global economy to a wider audience.

The Container Shipping Information Service initiative was unveiled in London by Maersk Line Chief Executive Officer Eivind Kolding and Adolf Adrion, Hapag-Lloyd's executive board member.

One of the first steps is a new Web site, www.shipsandboxes.com, that contains a history of containerization and highlights its impact on globalization and the environment and security, among other things. The 24 participating companies will invest more than $1 million each year as other projects are being planned to take it "beyond the Web," said Adrion, who is also chairman of a variety of industry groups including the Far Eastern Freight Conference, World Shipping Council and the Box Club.

Adrion and Kolding conceded the liner industry has remained publicly silent for too long and that it generally only registers in the public consciousness when things go wrong such as when a ship is involved in an accident.

"The choice of goods that consumers have and their availability is largely down to the container shipping industry," Adrion said. "However the wider world is not, on the whole, aware of this. So it is important that as an industry we make them aware of this and explain the wider role and impacts that our industry has on the world."

The London event was attended mainly by shipping journalists. But executives from a number of the participating carriers will over the next few days reach out to the mainstream media.

Companies participating in Container Shipping Information Service are: Atlantic Container Line, China Shipping, CMA CGM, COSCO, Crowley Maritime Corp., Compania Sud-Americana de Vapores S.A.(CSAV), Evergreen, Hamburg Sud, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, "K" Line, Maersk Line, MISC Berhad, Mediterranean Shipping Co., MOL, Neptune Orient Lines/APL, NYK, OOCL, Pacific International Lines, United Arab Shipping Co., Wan Hai Lines, Yang Ming and Zim.

Wow...the shipping lines are finally getting into the 21st century! And along with that, they are dealing with a sharp sense of fear...that all those leviathan class size boats could soon be ghost ships. 2008 is going to be a wild year!

Happy New Year!

Merry Christmas! Happy New Year!

2007-12-23T22:56:00.000-05:00

Joyous Holidays!

Merry Christmas!

Happy New Year!

Thank you for checking out my blog this year!

I going to take a few weeks off to enjoy the holiday season with my family. I hope you all will do the same!

I will start posting again in January 2008!

Many sincere thanks, Michael J. Stolarczyk

Beluga builds first cargo vessel with innovative auxiliary propulsion system

2007-12-17T22:42:00.000-05:00

“You have to have the courage to try out something new,” as Niels Stolberg, CEO of Beluga Shipping GmbH, comments the first application of the innovative SkySails towing kite propulsion system on a cargo vessel worldwide. This courage is based on the certainty that the SkySails system is the only sail system in the maritime shipping sector to date that can be used in commercial operation without any restrictions in vessel use.

The cross-sectoral relevance of this innovation in the field of propulsion technology at sea is also indicated by the social position of the ship’s godmother, Eva Luise Köhler, wife of the Federal German President. She will award the vessel her name, MV “Beluga SkySails”, during the christening ceremony at Überseebrücke in Hamburg on Saturday.

Of all known concepts for effective and sustainable alternative propulsion of merchant vessels, SkySails represents the only suitable model: no bothersome masts on deck, no restriction of stowage space, no hindrances to loading and discharging, no risk to the crew, cargo or ship as well as reliable overall performance.

Utilisation of wind energy by means of the towing kite makes it possible to provide relief to the main engine – 10 to 15 percent less bunker consumption is expected in the initial phase of operation. The MV “Beluga SkySails” is equipped with a kite measuring 160 square metres. Later, when the sail is scaled up to 320 square metres in the course of the coming year in order to increase efficiency on the high seas, potential savings of 20 to 30 percent are definitely feasible and realistic. Beluga Shipping GmbH initially reckons with a reduction in the existing bunker costs for the vessels diesel fuel within a low four-digit US dollar range per day of operation of the towing kite system.

In the case of two larger multi purpose heavy lift project carriers of the Beluga P1- series, which are to be equipped with SkySails systems in the near future, too, and are currently under construction, kites having a sail area of as much as 600 square metres will then be used. On this basis, fuel savings in the dimension of up to ten tons daily can be anticipated according to present-day estimates, corresponding to a reduction in ship voyage expenses of over 6,000 US dollars.

Application of the innovative auxiliary propulsion technology is a response to the constantly increasing oil prices, which have been climbing from one record high to another for some time now. According to world economic experts in the field, further price increases can be expected in the future and will have to be coped with in the course of the growing volume of world trade. The former threshold of 100 US dollars will soon be surpassed in all likelihood.

Application of the towing kite propulsion system points to a sustainable way out of direct dependence on the oil price. Furthermore, the MV “Beluga SkySails” even combines ecology and economy on the high seas. The carrier serves as an up-to-date link between economic efficiency and preservation protection of resources. The maritime sector numbers among the most important and most advanced branches of industry, especially in Germany. On the other hand, shipping contributes greatly to pollution of the environment worldwide. The first multipurpose heavy-lift project carrier to draw propulsion power from wind energy is almost revolutionary.

Even before her maiden voyage from Bremen to Venezuela with project cargo on board the MV “Beluga SkySails” opens a new chapter in shipping history. The new vessel will be practical proof that the hybrid propulsion system is possible on water and is able to achieve what many felt was absurd in this combination, i.e. reducing emission and at the same time lowering the voyage costs. The MV “Beluga SkySails” is the visible result of a pioneering spirit that creates innovations, promoting economy and ecology. You just have to have the courage to try out something new.

I met Niels a few times while posted in Europe, and upon my return to the USA. The dude is simply a visionary. To think he is going back to "original technology" to create an innovative, environmentally aware form of fuel conservation in the shipping business is no suprise. Wow, this is just great stuff.

CSI and SS/L Will Create NASA COTS Proposal

2007-12-11T14:41:00.000-05:00

CONSTELLATION SERVICES INTERNATIONAL AND SPACE SYSTEMS LORAL TEAM ON NASA COTS PROPOSAL USING A U.S. VERSION OF CSI’S LEO EXPRESSSM CARGO SYSTEM

Laguna Woods, CA, December 11, 2007 — Constellation Services International, Inc. (CSI) is collaborating with Space Systems Loral (SS/L) to pursue a funded Space Act Agreement with NASA’s Commercial Orbital Transportation Services (COTS) program. The two companies are working together, with SS/L as the prime, to produce a commercial cargo system to re-supply NASA’s International Space Station (ISS), and to create new commercial space services and applications.

Charles Miller, CSI’s Chief Executive Officer stated “CSI is pleased to announce that Space Systems/Loral has baselined our space transportation intermodal approach for the current COTS competition. We are very excited by this relationship”. Bill Nations, SS/L Vice President added, “SS/L is the market leader in the GEO commercial satellite business and CSI has a unique, patented system for delivering cargo to the ISS. Together we bring NASA a flexible, low-cost solution based on highly
reliable existing technology and a commercial business approach.”

The SS/L version of CSI’s LEO ExpressSM cargo system uses the SS/L 1300 satellite bus as a tug, while retaining most of the original intermodal spacetug advantages. SS/L is currently the world leader in commercial GEO comsats with 40% of the world market for satellites of 8 kW or higher.

Forty-eight spacecraft based on the SS/L 1300 satellite bus are currently operating on orbit, four are awaiting launch and fourteen more are in production. SS/L has also produced 129 Orbital Replacement Units for the ISS to date, including Batteries, Battery Charge/Discharge Units and Sequential Shunt Units.

According to Miller, “Because of recent problems with generating private capital for ISS cargo servicing projects, the question on everybody’s mind now is ‘Can any company really raise all the money needed to complete a high-risk commercial space project in partnership with NASA?’” Miller continued “As a well-established company that is known for its technical and commercial excellence as well as its entrepreneurial approach, Loral is probably better positioned to achieve the COTS goals than any other bidder in the competition.”

SS/L publicly announced the details of its COTS proposal at the Space Investment Summit 3 on December 6th in San Jose, California. SS/L distributed a “SS/L COTS Fact Sheet” that summarized the SS/L COTS concept, and which can be found at http://www.constellationservices.com.

Tom Moser, CSI’s Vice President for Government Programs and a former NASA Space Station program director stated “Space Systems/Loral is trusted and respected in the commercial space industry, and has been involved in several successful NASA programs. SS/L provided eight GOES weather satellites and was awarded the Goddard Contractor Excellence Award in the process”.

Moser continued “Tommy Holloway, another former NASA Space Station program manager, recently testified to Congress that ‘If a proven logistics support system is not available, I would commit to the future capability that is determined by engineering analysis to have the highest chance of success’.

Based on sound engineering and business analysis, SS/L probably has the highest chance of success among all of the current COTS competitors.”

Constellation Services International, Inc. is an entrepreneurial orbital spaceflight services company that is focused on commercial opportunities in Earth orbit. CSI has raised over two million dollars in private investment, and has received over three million dollars from three NASA contracts to further develop the patented LEO ExpressSM Space Cargo System, including its role as prime contractor for
the NASA Alternate Access to Space program (AAS). The LEO ExpressSM Space Cargo System completed a NASA System Design Review in July 2003. NASA’s AAS program concluded “CSI provided convincing evidence that both designs were feasible.”

For more information on CSI or CSI’s LEO ExpressSM Space Cargo Service, visit
http://www.constellationservices.com.

"LEO Express" is a trademark and service mark of Constellation Services International, Inc.

Retail Container Traffic Is Falling...

2007-12-09T22:35:00.000-05:00

As discussed previously, within this blog...we have plenty of big ships...but the market will not have the space/container demands matching the the past few years...

Traffic at U.S. ports that handle most of the nation's retail traffic fell below last year's levels for the fourth month in a row in November, estimates the National Retail Federation and the economic consulting firm Global Insight.

They produce the monthly "Port Tracker" report, and attribute the decrease to careful management of inventories by retailers in anticipation of a restrained holiday shopping season.

"The slow pace of container traffic growth is forecast to continue due to weakness in the U.S. economy," said Paul Bingham, Global Insight economist. "All covered U.S. ports are operating without congestion from the harbors to the gates and are rated low for congestion through spring."

"Retailers are carefully managing their inventories so that they won't be forced into unplanned discounts," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Matching supply to demand is a basic principle of sound business practices."

The ports surveyed handled 1.46 million TEU of container traffic in October, the most recent month for which actual numbers are available. That's down 1.3 percent from September's 1.48 million TEU, and 3.5 percent from the record high 1.51 million TEU set in October 2006.

October is traditionally the peak month of the year as retailers stock up for the holiday season, but the figures left September as the peak month for 2007.

November was estimated at 1.36 million TEU, down 3.5 percent from a year ago. If the estimate holds true when actual numbers come in, it will mark the fourth month in a row that cargo failed to meet last year's levels. (August was down 1.4 percent from August 2006 and September was down 1.9 percent from September 2006.)

Ports covered by Port Tracker are Los Angeles/Long Beach, Oakland, Tacoma and Seattle on the West Coast; New York-New Jersey, Hampton Roads, Charleston and Savannah on the East Coast; and Houston in the Gulf. All the ports are rated "low" for congestion, the same as last month.

CMA-CGM To Purchase U.S.Lines

2007-12-03T23:11:00.000-05:00

U.S. Lines is set to become the latest small-scale carrier to join France's CMA CGM Group after the Marseilles company announced today that a takeover agreement has been reached. Financial details of the deal were not disclosed.

U.S. Lines was established in November 2003 after Ed Aldridge, a former APL and Sea-Land executive, and other managers bought the famous brand. The original U.S. Lines run by Malcolm McLean ceased trading in 1986.

The company has an estimated annual turnover of $145 million, employs 113 staff and moves about 100,000 TEUs each year on a U.S. West Coast/Australasia/Hong Kong triangular service in partnership with CMA CGM subsidiary ANL.

U.S. Lines also has seven chartered vessels, mostly in the 1,100-TEU range and one of 1,350 TEUs, a leased container fleet of 23,600 TEUs and offices in Los Angeles, Australia, New Zealand and Hong Kong.

CMA CGM said U.S. Lines would continue to operate under the same name and be managed by its existing global management team.

Earlier this year, CMA CGM, the world's third-largest container line, acquired Taiwanese Intra-Asia carrier Cheng Lie Navigation Co. Ltd. (CNC) and Moroccan state-owned Compagnie Maroccaine de Navigation (Comanav) to continue its strategy of buying strong regional players such as Delmas and ANL.

"The acquisition of U.S. Lines is in line with the aim of reinforcing the position of the ANL offer. The complementarity of U.S. Lines with ANL allows a more global solution on the triangular trade connecting the U.S. West Coast, Australia, New Zealand and Southern China," CMA CGM said in a statement.

Hmmmm...I knew Ed Aldridge liked French food...but not the management style. This is kind of shocking news. I thought it was really cool that Ed resurrected the brand made famous by Mr. McLean...and he and his crew did a great job of building the brand and operation. I'm kind of bummed that it will go to one of the big carriers as a "small-carrier" acquisition. Old school thinking I guess...which I still share, respect...as homage to the dwindling cast of characters from the ocean carrier days of yore.

West Liberty State College Board Post

2007-11-30T21:52:00.000-05:00

November 30, 2007

Michael J. Stolarczyk Appointed to the West Liberty State College Board of Governors

West Liberty State College recently welcomed Michael J. Stolarczyk to serve as a member of its Board of Governors. Stolarczyk is a senior director for Exel, the North American leader in supply chain management and contract logistics. The company is headquartered in Westerville, Ohio.

“I am honored to have been chosen to serve on the board of West Liberty State College. My parents attended West Liberty and talk so fondly of their time here, as well as speak eloquently of the education they received. It is my hope to support the college in its continued effort to offer an affordable, quality education, such as the ones my parents enjoyed. As this wonderful institution achieves university status in the near future, I know this memorable student experience will be preserved for generations to come. It is an honor and pleasure to serve Governor Manchin, the State of West Virginia, and the students of West Liberty,” said Stolarczyk.

In addition to his work at Exel, Stolarczyk is a member of the Board of Advisors for the West Virginia University’s School of Business and has held board positions with Ceske Pristavy, Maersk Logistic Czech Republic and Maersk Intermodal Europe. In February of 2002, Mr. Stolarczyk was named on Fast Company magazine's inaugural "Fast 50" global innovators list, which honors individuals whose achievements helped change their companies or society.

“We are pleased to announce the appointment of Mr. Michael Stolarczyk to the West Liberty State College Board of Governors. Stolarczyk has strong family ties to the college, as both of his parents graduated from WLSC. Although he lives a distance away, he is very eager to be an active member of the governing board and we look forward to working with him in the future,” said Lynne Exley, chair of the WLSC Board of Governors.

The West Liberty State College Board of Governors, consisting of representatives from the campus and surrounding communities, was established to provide oversight and direction on policy issues of the college.

This is a great honor for me...with both my parents being WLSC grads...also, by next year West Liberty will move up to University status. This is a great step forward for the campus and the region in general.

Samskip Buys Reefer Company Icepak

2007-11-27T23:59:00.000-05:00

Samskip agains makes an acquisition that finds one more puzzle piece to finish their long-term vision...Hassing, Winther, and the Icelandic crew continue to tactically evolve the Samskip brand...

Samskip has acquired the reefer logistics company Icepak, which has offices in the United Kingdom, Australia, and New Jersey and Seattle in the United States. Financial details were not disclosed.

Icepak has been operating for 15 years under the primary ownership of Debbie Woodliffe, Holly Coble and Paul Dean. All three will stay with the business and on the company’s board, which will now also include Peder Winther, chief executive officer of Samskip Reefer and Forwarding Logistics, and Simon Dwyer, managing director of Samskip U.K. Woodliffe will join the Samskip Reefer and Forwarding Logistics board based in Rotterdam.

“The Icepak business, its staff and shareholders will bring considerable experience and knowledge to our expanding global reefer logistics product," Winther said.
"Icepak will strengthen our global footprint and assist with our overall development plans, particularly within the U.S., Australia, Asian, South American and U.K. markets.”

Icepak shareholder Woodliffe said of the sale: “We feel the time is right for our business and the shareholders to have a like-minded partner to enhance our network and provide the necessary platform to complement our future growth plans.”

The acquisition of Icepak follows other recent Samskip purchases including Dutch multimodal transport company Geest North Sea Line, British short sea operator Seawheel and reefer centers from the Netherlands-based Kloosterboer in 2005.

Previously, Samskip had acquired Van Dieren Maritime and a 40 percent share in Silver Sea.

DP World raises $4.9 billion in stock sale!

2007-11-25T00:07:00.000-05:00

DP World, the ship terminal operating company that U.S. politicians shunned, got a warm welcome from investors today as it was able to raise $4.9 billion through a sale of a 23 percent stake to the public.

Far more investors wanted to buy shares in the company than was available – the issue was oversubscribed by 15 times. With that strong demand, the company was able to sell stock for $1.30 per share, the top end of the range that investment bankers had set.

DP World paid $6.8 billion for P&O, the British port operator last year, but was later forced to sell assets in United States after a political firestorm erupted because of security fears raised by an Arab company owning marine terminals in the heart of major American cities.

DP World has 42 existing terminals and 13 new developments across 27 countries and has reportedly said it plans to double its capacity to 90 million containers by 2017.

DP World’s shares are slated to begin trading on the Dubai International Financial Exchange on Monday.

DP world continues to impress...just take this into consideration...

DP World agreed in early October to do a feasibility study to build a $250 million container terminal in Mariel that would start operating in 2012, this is a Havana port! Cuba! Big gamble!

"A deal is in the works. It is moving forward and they have signed various agreements," another person familiar with the plan told many press outlets.

DP World became is the world's third-largest container port business last year when it bought Britain's Peninsular &Oriental Steam Navigation Co. But, as you remember, it was forced to sell P&O's U.S. assets when the Bush administration came under fire for allowing an Arab-owned company to control U.S. ports. (Laughable!)

Critics said the deal involving the ports of New York City, Newark, Philadelphia, Baltimore, Miami and New Orleans posed a threat to U.S. national security. (Weak!)

P&O had planned for several years to rebuild Mariel port, 30 miles west of Havana on the north coast of the Caribbean island, and turn it into a modern container port.

The port of Mariel was the site of a massive boat lift in 1980, when a flotilla of vessels from Florida picked up 125,000 Cubans wanting to leave the Communist-run island.

Its strategic proximity to the United States makes Mariel an attractive investment looking ahead to a time when Cuba is no longer under a U.S. trade embargo, given limited port capacity in the United States, and could give whomever operates it a "first-mover" position in the very near future. Bring the big-ass boats (leviathan class) into Cuba...then feeder the US Gulf and East Coast...great connection for the Suez services I would think...

What would Tony Montana say? "You know what capitalism is? Getting -choose your expletive-!" Maybe that is what the other port operators will be saying about DP World in the very near future!

What do you think?

New JoC.com Section - My JoC Tens post:

2007-11-19T23:28:00.000-05:00

Companies often think their picking operation is efficient as long as products roll out on time and customers are happy. But most picking operations in warehouses across America could use a reorganization, and its all about the process you know ... and training, and people, and systems!

The following are 10 tips to improve your warehouse operation.

1. Profile your orders.
Your most popular SKUs likely change with the seasons, so re-slot your warehouse to accommodate your business model, and review the setup at least once a year. This ensures that your “A” SKUs are in the correct storage media and physical location, reducing unnecessary travel for your order pickers. Your warehouse management system (WMS) should have a dynamic “slotting” module.

2. Analyze your current picking methodology.
Make sure your picking methodology suits your organization. Whether you choose single order, multi-order, batch picking with a single picker, or zone picking, the correct picking methodology is critical for optimizing productivity. Hey, you can always ask a 3PL to analyze it!

3. Use software to sequence orders.
Sequencing your orders by pick path, and batching together single lines, same-zone orders, and difficult picks — such as non-conveyable items — saves tremendous time on the distribution center floor. Again, your WMS software should be able to organize the workflow, and optimize sequence performance.

4. Create a warehouse within a warehouse.
On the one hand, you can gain tremendous efficiency by grouping together the 20 percent of your SKUs that complete 80 percent of your orders. This cuts travel time for your pickers. Be sure, however, that the 80-20 area or zone is properly designed to accommodate high-volume activity. On the other hand, this is kind of old-fashioned thinking; in this day and age of the Long Tail, you may not have the ability to utilize the 80-20 rule, because you may be selling “few of many,” instead of “many of the few!”

5. Evaluate your storage equipment to ensure proper application.
Placing slow-moving, low-cube items in bin shelving and fast-moving items in carton/pallet flow — or other appropriate storage options — improves storage density and picker productivity. This also allows you to better utilize the DC’s cube. Seasonal and other promotions can mess with this idea, so beware.

6. Create “wheelhouse” zones in your picking area.
You can increase picking productivity and improve order picker ergonomics by slotting your fastest-moving SKUs in the waist-to-shoulder or “wheelhouse” area of your storage media.

7. Designate only two or three standard shipping cartons.
With only two or three boxes to choose from — plus a few custom sizes if necessary — pickers will put orders together faster. Cutting down on sizes optimizes freight expenses and reduces corrugated spend. It also makes it easier to support a pick-path methodology.

8. Consider automation.
Order pickers spend about 60 percent of their time walking product or moving product around. Consider an automated solution, such as conveyance, to reduce their extensive travel time. Multi-level pick towers also save travel time and are quite innovative.

9. Understand your technology options.
Plenty of options are available to increase efficiency — including bar codes, radio frequency, pick-to-label, pick-to-light, and voice-activated technologies. These technologies are designed to provide different levels of increased picking productivity and improved accuracy.

10. Implement an incentive program for pickers.
Incentive programs can be extremely valuable to an organization. To ensure your program is effective, you must guarantee that productivity measurements are accurate, fair and equitable. Use key performance indicators (KPIs) to drive productivity.

Finding the right balance between these 10 suggestions is quite a task. Perhaps the best way to accomplish this is to secure the services of 3PL. However, significant strides can be made through consistent, common-sense approaches to your warehouse picking operations.

This is my entry for the new www.joc.com web site. Its called the JoC Tens and I am very proud to me in the first batch of posts. Check it out!

Drewry: Labor costs deflate China's bubble, near-sourcing on the rise

2007-11-15T22:38:00.000-05:00

Hey, I just reviewed this white paper and its pretty interesting...Drewry has always been a subtle shill for the ocean transport industry (and there is nothing wrong with that...the industry needs the support)and they remain bullish on China. I am more skeptical...going back to my "why not outsource in our back yard" posts earlier this year...Check out the link below and read the white paper.

So, the case can be made for "near sourcing" and China's cost structure may become much more expensive than anticipated (plus you have to add risk factors in having such far-flung supply chains). I still believe we are closer to outsourcing in states like West Virginia and Ohio than many people think.

But in the future that shirt stands a better chance of being produced in Mexico as rising labor costs in the Asian superpower are making companies consider shifting the sourcing of men's shirts and other products with short life cycles to countries closer to market, according to Drewry Supply Chain Advisors, a new division of Drewry Shipping Consultants.

A white paper from the London-based firm, Will China's Apparel Supply Chains Become Uncompetitive?, suggests that China has virtually no cost advantage relative to Mexico or Vietnam for the export of men's shirts when factoring in "logistics opportunity costs," such as loss of income from higher inventory, stock outs/lost sales and obsolete stock.

The decision to outsource to low-cost but remote countries has increased supply chain costs and reduced their performance due to longer lead times and greater risk for delays, said Drewry associate David Charlesworth at the white paper's launch in London on Thursday.

"Underestimation of opportunity costs skew the retailers' understanding of the price/reliability of logistics providers. It also leads to incorrect sourcing decisions -- although assessing all these variables is complicated and critically dependent on the specific market and products concerned," said Charlesworth, a former P&O Nedlloyd manager.

Spanish retailer Zara is a famous proponent of "near-sourcing." It makes a high proportion of its clothing in relatively high-wage locations in its home country and across Europe so that it can get a new range onto shelves in less than two weeks from design.

Drewry Research Director Philip Damas said supply chains need to be more responsive as product life cycles get shorter. The life cycle for men's shirts, he said, is on average about three-to-four months long, and importers and shipping lines are seriously underestimating the opportunity costs by not paying more attention to transit times or schedule reliability. The consultant's latest liner shipping schedule reliability study found that about half of all vessels tracked arrived in port later than advertised.

Damas said companies are contemplating sourcing to less remote countries than China because of the weakening of its traditional pillars of low labor costs, favorable exchange rates and low maritime costs. He also highlighted concerns over product quality, the environmental impact of longer transport distances and infrastructure bottlenecks as factors that could see a production shift away from China.

While maritime shipping carries the vast majority of the world's manufactured goods, Drewry's Sourcing/Mode Model assesses alternative transport modes.

A day saved in shipping a China-made shirt into the United States results in an estimated reduction in opportunity costs of about 1.8 cents, or about 0.2 percent of the product value. This is not sufficient, Drewry said, to swing the balance towards air transport, which it estimates carries about 10 percent of U.S. imports of Chinese shirts. Air freight becomes a viable option when the opportunity cost exceeds 5 cents per day.

High-value men's shirts imported into the Unites States from Italy for example have such high opportunity costs they warrant choosing the faster but much more expensive air transport option.

Mexico's combination of relative low wages, geographical position and absence of import duties is resulting in some companies switching production back there, and as such trucking into the United States is becoming more competitive, Drewry said.

Because logistics costs are a tiny fraction of the "delivered to DC" total cost -- Drewry estimates the ocean logistics chain cost for a shirt made in China for the U.S. market at just 1.5 percent of the DC cost, or 12 cents per shirt -- companies will continue lowest-cost sourcing unless they sense a very significant marketing disadvantage.

The consultants added that for big consumer markets like the United States and United Kingdom, foreign production of goods "is a fact of life for generations to come" due to the wide gap in labor costs.

Drewry said that based on information received from manufacturers the labor costs of a mid-priced shirt from China is about 10 percent to 30 percent of the ex-factory price. A 30 percent increase in relative labor costs in China, possibly triggered by a revaluation of the Yuan, would make China less competitive in terms of total product cost for men's shirts than Vietnam and Mexico for U.S. imports, when opportunity costs are taken into account.

"Our analysis shows that supply chains based on vendors located in intermediate offshore countries allow an effective combination of faster delivery times and relatively low labor costs," Damas said.

"We expect this near-sourcing logistics strategy to become more common, although it will not work for all products."

Drewry's white paper on China's apparel supply chains is available for free download by visiting www.drewrysupplychains.com.

CHaINA Awards

2007-11-09T23:15:00.000-05:00

Couple of weeks ago, the China Supply Chain Council presented its CHaINA Awards for the third times to celebrate superior achievements that are enabled by supply chain management in China.

Over 150 supply chain senior executives gathered to give recognition and compliments to five outstanding winners at a prestigious gala dinner held at the Shanghai Regent Hotel on November 8.

Here are some of the winners in this year's gathering:

The Best Supply Chain IT Solution was given to Seeburger for its recent JIT/JIS supply chain solution implemented at Benz Daimler Chrysler in Beijing. Over 150 suppliers are now live and using the system daily giving the manufacturer a competitive advantage in the China Automotive market and it has forced other OEM's to re-evaluate their SCM solutions.

The Award for China's Supply Chain Executive of the Year went to Dr. Dittmar Nerger, Head of Strategic Sourcing Healthcare at Bayer Healthcare for his years of management leadership and recent sourcing achievements in China.

The award for the Best 3PL Supply Chain Provider was presented to Kerry EAS for its innovative distribution solutions provided to Alfred Dunhill all over in China. Alfred Dunhill first started its business in China through 3rd party sales channel without self-owned shops and has now 39 self-owned stores and 27 wholesale stores all over China in less than 2 years.

The Award for Best Supply Chain Consulting Partner in China was awarded for the first time to IBM Global Business Services for the procurement transformation of Haier Group in Qingdao. Through the partnership with IBM, Haier managed to set up infrastructure for procurement innovation such as strategic sourcing, procurement engineering that paved the way for a dramatic cost reduction and supplier base optimization.

Amway China received the top Supply Chain Operational Excellence Award this year for its outstanding supply chain initiatives in China and abroad that resulted in a 20% logistics cost reduction, successful VMI operations between China and overseas factories and the rationalization of the number of logistics service providers.

When are they going to give out Best Supply Chain Blog Award? Who would you vote for? Lately, my vote would go to Eric Joiner...the Dawg is having his day...HA!

53's On The High Seas

2007-11-01T23:05:00.000-04:00

Big box stores will now be able to ship their goods to the United State in bigger boxes.

APL said that it will begin offering shippers the option to move cargo in 53-foot containers, a move it says could "make a significant difference to the economics of transpacific trade."

The Singapore-based carrier said it will take delivery of what it called the "world's first ocean-capable 53-foot boxes" on Nov. 7. It said the reinforced boxes are 200 pounds heavier and have stronger corner posts than domestic 53-foot boxes.

The boxes will be available to shippers using APL's premier weekly South China to Los Angeles service. The company plans to also look at deploying them elsewhere.

"Our objective is to move big-box economics farther back in the supply chain to the point where products are manufactured in Asia," said Ron Widdows, chief executive officer of APL. "We're responding to customers who want new levels of efficiency in their containerized trade."

While 20- and 40-foot containers are the most common size box used by container carriers, APL and other carriers also offer a variety of other size boxes, including 45-foot and 48-foot ocean containers.

Fifty-three-foot containers, which are the same size as domestic trailers pulled by 18-wheelers, are widely used domestically.

Trailer Bridge, a company that provides container service between the U.S. and Puerto Rico, has used 53-foot containers in its service for a decade.

Importers commonly ship cargo to the U.S. West Coast in 20, 40 or 45-foot boxes, then transload cargo into 53-foot containers or trailers at U.S. ports for truck or rail transport to the final destination in order to take advantage economies of scale of moving freight in bigger boxes.

A 53-foot box has 60 percent more capacity than a standard 40-foot container, and at nine feet, six inches high and 102 inches wide, are six inches wider than standard boxes. Two 53-foot boxes will hold about the same amount of cargo as three 40 foot containers.

Because more cargo can be moved by fewer trucks, APL said 53-foot boxes could reduce transportation costs, road congestion and pollution.

It predicted they "could become the transport method of choice for customers moving cargo to inland U.S. destinations," allowing cargo to be transported in the same container from Asian factory to U.S. stores without transloading.

APL's press release included laudatory comments about the larger boxes from executives at retailer Toys ‘R’ Us and New Balance, the athletic shoemaker.

The benefits touted by APL were familiar to John McCown, chief executive officer of the Puerto Rico carrier Trailer Bridge.

His company began using 53-foot containers in regularly scheduled ocean service to Puerto Rico in 1998, and since then "fundamentally all of our liner freight has moved in 53s and our customers have experienced the various benefits that come with these superior units."

Trailer Bridge has 3,800 53-foot boxes in service, and McCown said they've been specially designed for ocean use. The company also instituted regular service using 53-foot containers to and from the Dominican Republic earlier this year.

Vikings! Put your oars in the water and row like a Mother_____r!

2007-10-29T22:10:00.000-04:00

Maersk Line Monday once again denied it is planning to unleash an express 18-day service from the Far East to New York, when American Shipper asked to confirm information received that the shipping line has booked slots with the Panama Canal Authority for its 4,150-TEU B-class ships believed to have service speeds of about 29 to 30 knots.

Six of the seven ships in the Panamax series have been delivered from German subsidiary Volkswerft Stralsund. The last of which, Maersk Brownsville, was named on Sept. 3.

The ships are owned by London-based Maersk Co. Ltd. and are presently deployed on Maersk's Asia/U.S. West Coast TP8 loop. It is said that once all seven are available, Maersk will divert them through Panama to launch a market leading Hong Kong/Yantian/New York service that should attract lucrative time-critical cargo.

Not for the first time, Maersk said it has no such plans. "We review our network on an ongoing basis, including vessel deployment, to ensure the best service to our customers. However, we have at this point not made any decisions as to future changes in the vessel deployment of our B-class vessels," Maersk said in an e-mail.

Okay, just so you know...I think I asked the line to create just such a service back in 1994, when Maersk had some extra tonnage to throw around. Hmmm...its about time they deny (then deploy) this type of service.

Dubai Ports in Cuba! The saga continues...

2007-10-22T23:35:00.000-04:00

The plans are a holdover from Peninsular & Oriental Steam Navigation Co., which DP World bought for $6.8 billion in 2006, according to Reuters. The state-owned company was forced to divest its U.S. port assets after a domestic political row about whether the DP World terminals would be a potential entry point for terrorists.

The United States currently embargoes most trade to the island nation in an effort to change the communist regime of Fidel Castro.

DP World, the world's third-largest container terminal operator, has ambitious plans to grow in other locations around the world besides Cuba. Chairman Sultan bin Sulayem publicly confirmed earlier reports that the company would sell about 20 percent of the company on the public market next month to raise at least $3.5 billion for its ventures, Bloomberg News said. DP World previously called off an initial public offering and speculation about privatizing the company has followed it for years.

Sulayem said the money would be used to repay two bonds worth $3.5 billion the company issued last summer and provide cash to the government. He said the company has completed all "major acquisitions and investments" and plans to grow by expanding its existing terminal facilities, according to Bloomberg. But a top official told Shippers' NewsWire last week that the company would not rule out a return foray into the U.S. market if conditions change.

The initial public offering is the largest in the Middle East open to all investors. Shares will be sold on the Dubai stock exchange and will help the emirate's drive to become a global financial center, Sulayem said. The Dubai exchange will be affiliated with the Nasdaq Stock Exchange after Dubai bought a stake in Nasdaq several weeks ago.

Last year, the company handled 42 million TEUs and said it plans to handle 84 million TEUs a year at ports around the world by 2016.

Stay tuned...

Maxwell A. Stolarczyk / Attends Young Leaders State Conference

2007-10-21T23:21:00.000-04:00

Maxwell A. Stolarczyk
Hastings Middle School Student Selected For State Leadership Conference
National Your Leaders State Conference in Ohio Honoring Area’s Most Highly-Acclaimed Students to be held October 25th through the 28th

Columbus, OHIO – This October, Upper Arlington middle school student, Mr. Maxwell A. Stolarczyk, will join a very select group of highly-acclaimed students in Ohio to take part in an extraordinary leadership conference sponsored by the Congressional Youth Leadership Council (CYLC).

The National Young Leaders State Conference (NYLSC) in Ohio honors and recognizes outstanding middle school students for their scholastic achievement and leadership potential. Enrollment requirements to attend the Conference are strict, mandating that every scholar who attends must be personally nominated to attend by a teacher or selected based upon extraordinary academic achievement. Mr. Stolarczyk was nominated for the NYLSC by Ms. Linda Citino of Hastings Middle School.

“The aim of NYLSC is to inspire students to recognize their own leadership skills, measure their skills against those of their peers and return home with newfound confidence in their ability to serve as future leaders,” said Michael Lasday, Executive Director of the Congressional Youth leadership Council.

CYLC is an educational organization dedicated to identifying and nurturing leadership in the nation’s highest-achieving students. Since 1985, the Council has inspired more than 200,000 young people to achieve their full leadership potential. Currently, close to 400 members of the U.S. Congress serve on the CYLC Honorary Congressional Board of Advisors and more than 50 embassies participate in the Council’s Honorary Board of Embassies.

For additional information on the National Young leaders State Conference in Ohio, visit www.ohiostatescholar.org.

Okay...yeah, I am putting in a plug here for my kid...he deserves the nod. This will be a great experience for him. Yes, I am proud...

Samskip Inks Deal With Alcoa

2007-10-16T22:05:00.000-04:00

Alcoa Fjardaál, a new Icelandic plant for Canada's Alcoa, one of the world’s largest producers of aluminum, has contracted Samskip to handle shipments to Europe over the next five years.

The planned annual production capacity of Alcoa Fjardaál is 346,000 tons, of which about 80 percent is expected to go to European customers. Samskip will be responsible for shipments to Rotterdam and for organizing on-carriage to customers throughout Europe.

Financial details of the agreement were not disclosed but using current aluminum prices and currency exchange rates the annual export value of Alcoa Fjardaál's production could reach 60 billion ISK ($997 million), Samskip said.

The shipping company, which has management offices in Reykjavik and Rotterdam, said the deal would increase its Icelandic export volume by nearly 25 percent.

"This agreement with Alcoa Fjardaál will clearly lead to enlargement of our shipping fleet and even increased general shipping capacity when the shipments reach their normal level," said Ásbjörn Gíslason, Samskip's president.

Samskip is aiming to build up its facilities in East Iceland following the agreement, and the company has already been allocated a plot in the operations area of Mjóeyrarhöfn Harbor.

TI Confirms More M&A Via GLS Report

2007-10-12T22:57:00.000-04:00

The disclosed value of mergers and acquisition deals in the global transport and logistics industry during 2006 rose 8.6 percent over 2005 to £36.7 billion ($73.4 billion), London-based Transport Intelligence said in a new report.

The report, Global Logistics Strategies 2007, tracked more than 290 deals in 2006, with the largest investment being made in ports, airports and other transport infrastructure operations. Private equity backed deals amounted to £10.7 billion ($21.4 billion), one-third of the total.

The contract logistics, freight forwarding and express sectors accounted for 8 percent of the total with the largest deals being private equity company Apollo’s acquisition of CEVA (TNT Logistics) from TNT and DSV’s acquisition of Frans Maas.

"Acquisitions are being driven by the ambitious growth plans of large and small companies alike. This will ensure that M&A activity remains at a high rate for the foreseeable future," said John Manners-Bell, Transport Intelligence's chief analyst.

"The recent acquisitions of Christian Salvesen by Norbert Dentressangle and Rohde & Liesenfeld by Geodis are evidence of such ambition in both companies’ desire to build regional or even global operations.

"The combination of market fragmentation and ambition will also continue to make the sector attractive for private equity companies looking for arbitrage deals … despite an uncertain economic outlook, we expect many more deals in the near future."

New insects discovered in Colombian Export shipment

2007-10-10T22:45:00.000-04:00

Agricultural specialists at San Juan International Airport in Puerto Rico have detected a new species of insect entering the United States during inspections of cut flowers, the U.S. Customs and Border Protection agency said last week.

The new species were identified by Smithsonian Museum experts as Neoxaba sp. and Monolocoris. They were found in a shipment of 42 boxes of foliage from Colombia.

Oh yeah, but they missed the five keys of Colombian marching powder in the "reefer" container full of bananas...

CSI Signs Deal with ULA

2007-10-07T22:13:00.000-04:00

United Launch Alliance's Lockheed Martin Atlas V rocket could form part of a bid for funds from NASA's Commercial Orbital Transportation Services (COTS) demonstration programme, if they become available following October's expected departure of Rocketplane Kistler (RpK) from COTS.

California-based Constellation Services International (CSI) has signed a memorandum of understanding with ULA to pursue the potential launching of CSI's LEO Express cargo cannister by an Atlas V for International Space Station resupply and other missions. The COTS programme is intended to provide ISS resupply services after the Space Shuttle fleet is retired.

The LEO Express cargo cannister could deliver up to 13,000kg (28,600lb) to ISS because it does not need propulsion and guidance systems to reach the station. This is because it would be met in its low Earth orbit by a Energia-built Progress vehicle that would have already been docked with the ISS. The Progress would automatically dock with the cannister to act as a space tug and take it to the station.

"The Progress would only have to have a few software upgrades to cope with the characteristics of the new combined [Progress/CSI cannister] vehicle. We know this because we paid Energia for the analysis in 2002," says CSI chief executive Charles Miller.

He adds that should COTS funds be available he would "engage NASA". In COTS RpK was competing with Space Exploration Technologies to demonstrate a cargo transportation system by 2010. RpK failed to meet required COTS financing and technical milestones, NASA could end its involvement by 8 October.

Charles Miller, a colleague I met during Esther Dyson's first FlightSchool(2005), continues to get close to deploying his "space container" technology for the ISS and beyond. Cool stuff...

BitLogistics Blog

2007-10-02T01:18:00.000-04:00

My old buddy Ken Lyon continues to be ahead of the logistics curve with VisableLogistics and its partner site BitLogistics. He was gracious enough to list me on his new blog role, so I am returning the favor. Check it out “logheads!”

BitLogistics provides solutions for monitoring and managing supply chains, both large and small, simple or complex.

Supply chain visibility
Supply chains are a vital support for the global economy. Outsourcing, 'Just in Time' operations and supplier choice, all depend on responsive and reliable supply chains. BitLogistics provides the technology platforms that help to meet these challenges.

Shippers now expect instant access to shipment information, which, up until now, was only available from the large global carriers. Thanks to solutions provided by BitLogistics, any organisation providing supply chain services can do the same.

Regulatory complianceGovernments are increasing the demands for detailed order and shipment information to enhance security and improve Customs clearance processes. Major corporations are expecting more detailed information from their suppliers and trading partners to enhance performance and also ensure legislative compliance. (e.g. Sarbanes Oxley regulations)

More information + More Collaboration = Improved Performance

This builds trust between trading partners and strengthens business relationships.
BitLogistics solutions help customers to reduce cost and improve service. They can show where bottlenecks are reducing operational performance and where excess inventory is absorbing working capital. These solutions can alert customers to problems enabling them to correct issues before they impact the customer.

Read more about what we are up to on the BitLogistics Blog (you can navigate to this blog via the link listed to your right).

Locative Solutions and a brief history of Logistics

2007-09-28T23:51:00.000-04:00

I had the pleasure of hosting Dr. Charles Brown’s Marketing Club here at Exel’s Americas Support Center this morning. Yes, this group is from West Virginia University’s Business and Economics School. Since these soon-to-be executives were here to experience the real world, it got me to thinking about the history of logistics and the supply chain…damn! Am I starting to sound like an old man, or what?

Logistics has always been a critical part as one of the 4 P’s in Marketing: Product, Place, Price and Promotion. (Hey, someone tell me…do they still use the four P’s? That’s what I remember from my days at WVU’s B&E School). The “Place” component ensures the product is at the right place, at the right time, in the right quantity and the right quality. So, let’s take a stroll back in time to read about how the logistics discipline started and where it may be headed.

Military Roots
Logistics received recognition in military operations during World War II. It gained its momentum as it contributed to the effective distribution of machinery and supplies to troops. A service delivery failure here may mean an increase in unnecessary fatalities. Peter Drucker (a business guru in the 1960’s, who’s business acumen never seems to get old) identified logistics as a growing concern within business.

This generated more prominence towards the practice of logistics in the late 60’s.

DeregulationAs the economies in North America evolved in the 1970’s and 1980’s, transportation deregulation changed the competitive landscape of business. Carriers were free to charge their customers (Shippers) a competitive rate for their shipments. Warehousing companies that typically acted as surplus inventory storage locations, married up with transportation companies to offer customers full-service solution capabilities. This formed the beginning of the 3rd party logistics (3PL) business and paved the way for outsourcing logistical activities.

This was also a time when companies started to loose a ton money sourcing domestically…hence the boom to the economies of the BRIC markets…Brazil, Russia, India, and China…

GlobalizationWith the advent of globalization, firms began to seek ways of cutting their production costs. Thus, multi-national corporations re-located their factors of production to low-wage countries to gain a competitive advantage. Increasingly, more and more countries are joining the World Trade Organization (WTO) and opening their country to foreign capital investment. Retail giants like Wal*Mart exploit these new efficiencies and increase their imports from new emerging economies to reduce product prices in their stores. Thus, the new challenge is how to manage the product and information flows around the world. The increased pressure on managing these operations further underscored the importance of logistics as an area for optimization.

Ha! The advent of 3pl’s…organizations like Exel…and a drive to create PO to POP visibility in the supply chain. You know, Purchase Order to Point of Purchase.

Information Technology
Another contributor that led to an increased presence for logistics was the explosion in information technology and use of computers throughout the 1980’s and onwards. The cost of computing has decreased year after year since then and computing power rose exponentially. The use of the Internet and increased bandwidth capacity further enhanced and enabled quick connectivity and collaborative relationships that reduced inventories and created a Just-In-Time operating opportunity for organizations. These efficiencies reduced errors, increased fill-rates and cut overall operating costs for organizations. The 90’s created the need for fast info, and faster supply chains.

So, where do we go from here? Well, this is when the Balance Sheet shell game became popular. You know, the Dell model of production, and VMI. Oh yeah, and Enron…SarBox…etc.

Supply Chain ManagementAs the above factors fuelled efficiencies, logistics gained more prominence in organizations. A natural extension was to link the logistical operations from each firm to the entire supply chain. The new paradigm became known as the ‘systems approach’ to supply chain management and introduced the concept of trade-offs. In order to achieve least total supply chain cost, operational integration of the five main areas of logistics must be simultaneously optimized: Warehousing, Transportation, Inventory, Order Processing and Lot Quantities. Optimizing any one of these areas individually will sub-optimize the system as a whole. For example, a single warehouse in a network would achieve the lowest warehousing cost. This would create high transportation costs as suppliers ship over greater distances to ship products into the warehouse and conversely, outbound to its market distribution area. The addition of a second warehouse in the network would reduce transportation costs more than the marginal cost of operating the second warehouse, which would reduce total supply chain costs.

Flow Centers, Origin management, Control Tower over-site, and yes PO to POP fiscal visibility run rampant…who is leading the charge to create further supply evolution?

Future ChallengesAs the business landscape constantly changes with mergers & acquisitions and as globalization grows, there are corresponding changes in the supply chain that need to continuously be optimized to ensure least total supply chain costs. Radio Frequency Identification (RFID) and other technologies will continue to drive down inventories as better information is made available in a timely manner. Since supply chain activities cross over all functional areas in an organization (such as Marketing, Finance and Human Resources), new metrics must be developed to track true supply chain costs and identify the impact on new costs as corporate strategies change. Organizations that measure and benchmark these costs will have a sustainable competitive advantage going forward.

Yes, RFID, GPS, Smart Boxes, RF / Scan technologies are all evolving. Check this one idea into the back of your mind though…they will all blend into a new science supporting LOCATIVE Logistics or Solutions. What does locative mean?

Definition of LOCATIVE
Locative (also called the seventh case) is a case which indicates a location. It corresponds vaguely to the English prepositions "in", "on", "at", and "by". The locative case belongs to the general local cases together with the lative and separative case.

Further, there is a new usage of the word in Locative media….the Wikipedia definitions is:

The term 'locative media' was coined by Karlis Kalnins. Locative media is closely related to augmented reality (reality overlaid with virtual reality) and pervasive computing (computers everywhere, as in ubiquitous computing).

The technology used in locative media projects is e.g. Global Positioning System (GPS), laptop computers, the mobile phone, Geographic Information System (GIS), Google Maps. Whereas GPS allows for the accurate detection of a specific location, mobile computers allow interactive media to be linked to this place. The GIS supplies arbitrary information about the geological, strategic or economic situation of a location. Google Maps give a visual representation of a specific place. Another important new technology that links digital data to a specific place is RFID(Radio Frequency IDentification), a successor to Barcode (like Semacode).

William Gibson used this locative media angle in his latest book, Spook Country.

My suggestion to you though is this…the same basics (building blocks) of technology will not only drive the media, but our need to know where products are in the supply chain. Locative logistics will be born very soon…and we will need to create locative solutions/platforms to support the client’s needs.

Wow, even my head is hurting from this thought…any insight to share?

Logistics M&A Still Going Strong, According to LT...

2007-09-22T23:11:00.000-04:00

Looking to build a foundation for further growth in both the US and international freight markets, New Zealand’s global logistics supplier, Mainfreight Ltd., will spend $53.7 million to acquire US-based Target Logistics. Ranked as one of New Zealand’s top 20 companies, Mainfreight has 3,000 employees based in that country, Australia, Asia and the US. Target Logistics offers domestic and international time-definite freight forwarding and logistics services. It has 335 offices within the US as well as a worldwide network of agents that cover more than 70 countries. The deal is expected to close in November.

Adding drivers and equipment and extending the reach of its flatbed business, West Motor Freight has acquired Sanger Trucking LLC. "Adding capacity allows us to be more responsive to our customers who recognize the value in this expansion," says Bob Petruzzi, West president. "We will continue to grow our fleet organically, and, when the right opportunities exist, through acquisition. Sanger Trucking brings a professional team of drivers and customers, both of which merge well with our flatbed business." West focuses on the Middle Atlantic, New England and Atlantic states with its van and flatbed services.

Hub Group’s subsidiary, Comtrak Logistics, Inc., is acquiring DNJ Transportation, Inc. for $12.1 million. DNJ is a trucking company with primary focus on international drayage in the intermodal market. Approximately 70 of DNJ’s 116 drivers are owner-operators. With headquarters in Cicero, the company has four terminals located in Illinois and Indiana. In commenting on the acquisition, David P. Yeager, Hub's CEO, said, "We are excited about adding DNJ to our Comtrak drayage business. DNJ's international intermodal business will provide us with immediate growth in this key market. The acquisition is consistent with our strategic plan to increase the amount of drayage we perform."

Looking to grow its domestic air and expedited capabilities C.H. Robinson Worldwide, Inc., one of the world’s largest non-asset based third party logistics suppliers, has acquired the operations of and certain assets of LXSI Services, a provider of domestic air and expedited services. Not only does the acquisition deepen Robinson’s core capabilities, it adds customers in key vertical markets, including finance, entertainment, medicine and print manufacturing. “LXSI Services is a great fit for our expansion plans. Our customers have shown a growing demand for air and expedited services,” says Mark Walker, C.H. Robinson vice president, “and LXSI brings management depth, skilled employees, and domestic air and expedited knowledge, all of which will be necessary for us to expand this service into a core offering.”

China’s COSCO is buying the world’s largest dry bulk fleet for $RMB 35.6 billion (US $4.7 billion). The integrated shipping provider will acquire total equity in the bulk shipping assets of COSCO Group (COSCO Bulk Carrier Co., Qungdao Ocean Shipping Co., Golden View Investment and Shenzhen Ocean Shipping Co.). With the acquisition, the carrier’s fleet will grow from 144 vessels to 556 with capacity growth from 5.68 DWT (Deadweight Tonnage) to 37.7 DWT. With the additional assets China COSCO will broaden its offerings as an integrated shipping company with container and dry bulk shipping, logistics, port terminal operations and container leasing.

The acquisition of UK-based GF-X (Global Freight Exchange Ltd.) by Descartes Systems Group adds electronic air freight booking capability that creates a global network for managing the entire air cargo shipment lifecycle. The combined company will provide shippers with the ability to electronically manage bookings, air waybills, house waybills, status messages and customs fillings. Descartes offerings include the ability to manage shipping rates from initial booking trough invoice presentation, bill of lading rating and audits. “In combining with GF-X,” claims Art Mesher, Descartes CEO, ‘we now have a customer-endorsed, comprehensive shipment management service that standardizes and automates the entire shipment management process and can improve efficiencies for the air freight community.”

This was posted on Logistics Today...

SafMarine "Containerizes" Education in Zambia

2007-09-19T22:06:00.000-04:00

I think this is really cool on behalf of SafMarine...more organizations should take a lead by using their older container fleets this way...nice work Saf!

Zambia’s Amano Christian School today (Tuesday, September 18, 2007) celebrated the official opening of new school facilities constructed entirely from shipping containers donated by multi-trade shipping line, Safmarine. Twenty-five (25) containers were used to build 10 modern classrooms, one science laboratory and one assembly hall. Safmarine also funded the conversion of the containers, which was done by skilled Zambian artisans.

According to Philip Grove, Chairman of the Amano School’s Board of Trustees, construction of the Amano container school - which takes its name from the Bemba word for ‘wisdom’’ – first began in 2003 and was completed in 2007. Thanking Safmarine for its support, Grove said: “You have invested in the lives of the many children who will pass through Amano School in the years ahead.”

The school currently has 78 students in Grades one to 12 and aims to have 350 learners upon completion of its facilities.

According to Safmarine Africa Region Executive, Alan Jones, “Seafreight containers play an important role in growing trade between Zambia and the rest of the world, and it is therefore appropriate that shipping containers no longer required at sea are able to add value to the Zambian community by providing its children with safe, secure premises in which to further their education.” Jones said it was an honour for Safmarine to partner its customer, the Christian Mission in Many Lands (CMML), in this project. Sunny Brook Christian Trust (a joint venture of CMML and Liebenzell Mission International) coordinated the building project and also provided books and stationery for the school’s learners. The ‘recycling’ of seafreight containers no longer required at sea into permanent, land-based infrastructure is considered an important part of Safmarine’s activities, said Jones. “As global trade grows, so too does the world’s container fleet, which makes it important to find permanent, innovative and sustainable uses for retired shipping containers.” Jones says an estimated 90% of the world’s goods are currently transported in seafreight containers.

The Amano Christian School is situated in Chingola, a mining town in the heart of Zambia’s copper belt and home to a community of around 2.5 million and the world’s largest open-cast copper mine. The school - which provides an education for mainly Aids orphans, children of Zambian Christian workers, missionaries’ children and other Zambian children – has plans to extend its activities beyond childhood education.

Philip Grove says the school is hoping, as part of its future community outreach programme, to provide job opportunities for unemployed people from the local community. “Future plans include building a medical health centre with the emphasis on the care and support of AIDS sufferers, a Christian Conference Centre and youth camp facilities.”

The container-based Amano Christian School is one of several container schools built in Africa by Safmarine as part of its renowned ‘Containers in the Community’ programme, which was established in South Africa in 1991.

China Leads RFID Utilization

2007-09-14T23:26:00.000-04:00

A massive national identification card program will allow China to leap forward this year as the world’s largest market for radio frequency identification devices, or RFID, by value, according to a new industry study.

The study, compiled by IDTechEx, found that China would account for the largest single portion, $1.96 billion or 38 percent, of the $4.96 billion to be spent globally on RFID in 2007. The study also found that East Asia, including China, would account for more than half of the world total of RFID spending, with $2.7 billion projected for all of this year.

The Chinese surge in the global RFID market, according to the study, is due to a peak in delivery of national identification cards in the country prior to the 2008 Beijing Olympics. The study cites statistics showing that about $1.65 billion of the 2007 Chinese total is being spent on 300 million of these cards plus their associated systems. The 2007 card deliveries are part of a larger multiyear $6 billion national project, by far the largest RFID project in the world. An additional $250 million in other RFID tags and their systems, most related to transport, cash replacement and secure access cards, rounds out the Chinese totals.

The study noted that as the Chinese national ID cards system concludes, China will again drop below the United States and probably Japan in value of its RFID market, though its market share will continue to grow rapidly. IDTEchEx analysts found that within 10 years this rapid growth will more than compensate for the RFID market share drop expected when the national card program wraps up. RFID sectors expected to see large increases in China include animal tagging, transport, cash replacement cards, secure access, manufacturing, military and supply chain applications.

The top dozen RFID firms in China will account for $722 million, or nearly 37 percent, of the nation’s entire $1.96 billion RFID market for 2007. IDTechEx found that the top eight RFID firms in China were all contractors of the national ID card program. Two hundred other local and foreign suppliers share the remaining $1.3 billion slice of the Chinese RFID market value.

Samskip Doubles ScanBalt Presence

2007-09-09T22:16:00.000-04:00

Samskip has doubled the frequency of its ScanBalt service, which links the United Kingdom and Benelux ports with Sweden, Russia and the Baltic.

The 366-TEU Ute S has been added to the service calling only at the Swedish port of Helsingborg (Friday), Hull (Sunday) in the United Kingdom and Rotterdam (Tuesday) in the Netherlands. The 803-TEU Samskip Explorer maintains its regular weekly schedule linking Helsingborg (Monday), Varberg (Tuesday), Hull (Thursday), Zeebrugge (Friday) and Rotterdam (Saturday).

In Rotterdam, Samskip offers connections to its European multimodal network while over Helsingborg, it has established links to the Baltic states and Russia Swedish shipping line Transatlantic European Services AB, which previously had the Ute S on charter, has entered into a space charter agreement with Samskip on the ScanBalt.

“We are now able to offer end of the week sailings from both Helsingborg and Rotterdam, allowing deliveries to customers in the U.K. and Sweden on Mondays. This makes us highly competitive with road trailer transit times," said Jens Holger Nielsen, chief executive officer of Samskip Multimodal Container Logistics.

Some reading suggestions, while you wait in the airport!

2007-09-01T23:28:00.000-04:00

A lot of business books get popular, but the most useful don’t always stay on the corporate radar. Sometimes this is because the contents, if put into practice, would force you (and often your firm) to make major changes in day-to-day behavior. It’s far easier to just skim these “challenging” books on the cross-country flight. These eight books might not tell you want you want to hear, but they will give you information you need to significantly revise your personal and business strategies.

1. “The Tipping Point: How Little Things Can Make a Big Difference” by Malcolm Gladwell (Back Bay Books, 2002)

Publisher’s Blurb: “The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire.”

Excerpt: “The Stickiness Factor says that there are specific ways of making a contagious message memorable; there are relatively simple changes in the presentation and structuring of information that can make a big difference in how much of an impact it makes.”

Why it’s underrated: Most business books are about how managers and employees should think and behave. This book explains how people (managers and employees alike) actually do think, and how those thoughts govern their personal and organizational behavior.

2. “Freakonomics: A Rogue Economist Explores the Hidden Side of Everything” by Steven D. Levitt and Stephen J. Dubner (William Morrow, 2006)

Publisher’s Blurb: “Through forceful storytelling and wry insight, [the authors] show that economics is, at root, the study of incentives — how people get what they want, or need, especially when other people want or need the same thing.”

Excerpt: “How any given expert treats you will depend on how that expert’s incentives are set up.... In a medical study, it turned out that obstetricians in areas with declining birth rates are much more likely to perform cesarean-section deliveries than obstetricians in growing areas — suggesting that, when business is tough, doctors try to ring up more expensive procedures.”

Why it’s underrated: The subject matter is sociological rather than organizational, but the book teaches people to differentiate between valid statistical analysis and public relations b.s. — and consequently make better-informed decisions.

3. “Nickel and Dimed: On (Not) Getting By in America” by Barbara Ehrenreich (Holt Paperbacks, 2002)

Publisher’s Blurb: “How can anyone survive, let alone prosper, on six to seven dollars an hour? To find out, Ehrenreich moved from Florida to Maine to Minnesota, taking the cheapest lodgings available and accepting work as a waitress, hotel maid, house cleaner, nursing home aid, and Wal-Mart salesperson.”

Excerpt: “It’s not easy to go from being a consumer, thoughtlessly throwing money around in exchange for groceries and movies and gas, to being a worker in the very same place. I am terrified of being recognized. Happily, though, my fears turn out to be entirely unwarranted: during a month of poverty and toil, no one recognizes my face or my name, which goes unnoticed and for the most part unuttered.”

Why it’s underrated: You’ve got a good job (otherwise you wouldn’t be reading business books). After reading this eye-opener, you’ll be incredibly grateful that you do.

4. “The Long Tail: Why the Future of Business Is Selling Less of More” by Chris Anderson (Hyperion, 2006)

Publisher’s Blurb: “Our world is being transformed by the Internet and the near limitless choice that it provides to consumers; tomorrow’s markets belong to those who can take advantage of this.”

Excerpt: “For too long we’ve been suffering the tyranny of lowest-common-denominator fare, subjected to brain-dead summer blockbusters and manufactured pop. Why? Economics. Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching — a market response to inefficient distribution.”

Why it’s underrated: Entire industry sectors are collapsing under the pressure of the Internet; this explains how to survive by catering to niche markets.

5. “The New Rules of Marketing and PR: How to Use News Releases, Blogs, Podcasting, Viral Marketing and Online Media to Reach Buyers Directly” by David Meerman Scott (Wiley, 2007)

Publisher’s Blurb: “Shows you how to leverage the potential that Web-based communication offers large and small companies, nonprofits, entrepreneurs, political organizations, consultants, even rock bands and churches.”

Excerpt: “Forced to compete with new marketing on the Web that is centered on interaction, information, education, and choice, advertisers can no longer break through with dumbed-down broadcasts about their wonderful products. With the average person now seeing hundreds of seller-spun commercial messages per day, people just don’t trust advertising.”

Why it’s underrated: Most professional marketers — and the groups in which they work — are on the edge of becoming obsolete, so they’d better learn how marketing is really going to work in the futur

6. “Managers Not MBAs: A hard look at the soft practice of managing and management development” by Henry Mintzberg (Berrett-Koehler, 2005)

Publisher’s Blurb: “Calls for a more engaging approach to managing and more reflective approach to management education [and] outlines how business schools can become true schools of management.”

Excerpt: “It is time to recognize conventional MBA programs for what they are — or else to close them down. They are specialized training in the functions of business, not general educating in the practice of managing. Using the classroom to help develop people already practicing management is a fine idea, but pretending to create managers out of people who have never managed is a sham.”

Why it’s underrated: The cult of the MBA thrives within the corporation, frequently putting degree-holders into positions for which they aren’t qualified. This book is the antidote that they don’t want you to read.

7. “The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It” by Michael E. Gerber (Collins, 1995)

Publisher’s Blurb: “Dispels the myths surrounding starting your own business and shows how commonplace assumptions can get in the way of running your business.”

Excerpt: “In the throes of your Entrepreneurial Seizure, you fell victim to the most disastrous assumption anyone can make about going into business. That Fatal Assumption is: if you understand the technical work of a business, you understand a business that does that technical work.”

Why it’s underrated: This is the antidote to 20 years of relentless hype about the value of “entrepreneurism” in a world where most “entrepreneurs” fall flat on their face.

8. “Influence: The Psychology of Persuasion” by Robert B. Cialdini (Collins, 2006)

Publisher’s Blurb: “Cialdini combines evidence from experimental work with the techniques and strategies he gathered while working as a salesperson, fundraiser, advertiser, and in other positions inside organizations that commonly use compliance tactics to get us to say ‘yes.’“

Excerpt: “There are many situations in which human behavior does not work in a mechanical, tape-activated way. What is astonishing is how often it does. For instance, consider the strange behavior of those jewelry-store customers who swooped down on an allotment of turquoise pieces only after the items had been mistakenly offered at double their original price.”

Why it’s underrated: Books about selling tend to be long on anecdotes and short on science. “Influence” is the opposite, because it’s based on decades of Cialdini’s research.

Also, a few more I'm reading, or have read:

"The Three Signes of a Miserable Job" by Patrick Lencioni
"The No Asshole Rule" by Dr. Robert I Sutton
"The Box - How the Shipping Container Made the World Smaller" by Marc Levinson
"Mavericks at Work" by William C. Taylor and Polly LaBarre
"The World is Flat" by Thomas L. Friedman
"It's Alive - The Coming Convergence of Information, Biology, and Business" by Christopher Meyer and Stan Davis

Oh yeah...William Gibson's new book..."Spook Country" is awesome! Yeah, its a fiction book, but you can learn quite a bit from his unique perspective.

The observations on this post are from Geoffrey James of www.bnet.com...my additions notwithstanding.

Enjoy the reading...I pity us all for the waiting in the airports though!

Yeah, It Is Already August and I haven't Posted Squat!

2007-08-11T21:20:00.000-04:00

Don't worry, I will have time to get back into the posting mood very soon. I hope your summer has been a good one.

I have noticed that plenty of people keep visiting my blog...I owe you guys big time.

Thanks for checking in and I will get back to work this month.

All the best...MJS

NAFTA's New Trade Highs...Are You Suprised?

2007-07-16T23:15:00.000-04:00

The United States, Canada, and Latin America have the potential to form the world's next great trading bloc - as long as the nations move quickly to improve transportation infrastructure and simplify customs requirements.

Such is the opinion of UPS Chairman and CEO Mike Eskew, voiced in June at the U.S. Commerce Department's inaugural Americas Competitiveness Forum, which brings together North American government, private sector, academia, and non-governmental organization leaders to develop strategies for optimizing trade.

"Latin America, home to a half-billion people south of the U.S.-Mexico border, has the potential to be the next hotbed of trade and economic growth," said Eskew.
In addition, Latin America's real GDP is expected to grow 4.4 percent annually - a faster rate than Asia (3.6 percent) and the global average (2.8 percent) - making it certain to be a major global trade focus.

The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico already has created the second-largest trading bloc in the world behind the European Union, and accounts for far more trade than the United States conducts with China, the CEO noted.

Recent numbers from the Bureau of Transportation Statistics (BTS) support his assertions: Trade using surface transportation between the United States and its NAFTA partners reached $69.8 billion in March 2007, the highest monthly level ever recorded. In April, the most recent month for which statistics are available, U.S.-NAFTA trade tallied a solid $65 billion, 5.3 percent higher than in April 2006.

And, since NAFTA's implementation in 1994, trade growth between the United States and its northern and southern neighbors has increased steadily. The value of U.S. surface transportation trade with Canada and Mexico jumped 97 percent from March 1997 to March 2007, with imports growing 110.4 percent and exports increasing 81.6 percent during those 10 years, according to BTS.

But continued, uninterrupted growth among the three nations is not necessarily a sure thing. "Although we're neighbors, we have so many complicated customs and security requirements in place that it is often easier to import goods from Europe or Asia," Eskew noted at the Americas event.

These trade issues are particularly nettlesome, he said, because they impede the region's built-in advantages, such as geographic proximity.
Extensive delays in cross-border shipments between NAFTA partners, for example, threaten the proximity advantage over other hot trading regions such as Asia.

Eskew's advice? U.S. and Latin American governments should take several steps aimed at shoring up trade stability:
Develop a single, streamlined customs clearance system.
Identify "trusted shippers" and let them get in the "fast lane" for customs processing.
Raise the minimum dollar value at which imported goods must receive customs clearance, and separate the release of shipments from the collection of duties and fees.
Increase spending on transportation infrastructure, particularly the road and rail networks. Latin America spends less than 2 percent of GDP on infrastructure, compared to 3 to 6 percent in China and South Korea.
Improve the communications infrastructure, both wired and wireless.

Viking Blood Spilled / A Brewer Takes the Helm

2007-06-22T22:06:00.000-04:00

Carlsberg's Nils Smedegaard Andersen named as CEO

As from 1st December 2007 Nils Smedegaard Andersen (CEO of Carlsberg A/S) will take up the position as Group CEO of A.P. Moller - Maersk A/S. At the same date Jess Søderberg will resign as Group CEO of A.P. Moller - Maersk A/S.

Originally Jess Søderberg was supposed to retire in 2009, but by making an announcement in advance, the Board of Directors hope to clarify the future direction of the company. Jess Søderberg has been employed in the group since 1970, since 1993 as Group CEO.

By choosing Nils Smedegaard Andersen the Board also wishes to add new, yet experienced capacity, which jointly with the other members of the management will constitute a strong team to lead on A.P. Moller - Maersk A/S and create further development and higher profitability.

Furthermore a number of changes in Maersk Line have been decided. There will no longer be a dual CEO function, and the continuing CEO will be Eivind Kolding. Knud E. Stubkjær will thus withdraw as CEO of Maersk Line. Knud E. Stubkjær has not wished to continue in alternative position within the Group and has consequently decided to leave the Group as from 1st July 2007.

In future APM Terminals will report to the Group CEO and Tommy Thomsen's other responsibility areas will be included in Maersk Line. Tommy Thomsen has not wished to continue in alternative position within the Group and has therefore decided to leave the Group as from 1st July 2007.

Taking a Hiatus - I'll be back in July

2007-05-28T10:27:00.000-04:00

Well, I guess you have noticed that I have not been posting since late April. There has been quite a bit going on from a professional and personal perspective. So, for the time being...I guess until mid-July...BlogOnLog is on hiatus. Aside from a few press releases, quick observations, and maybe some reprints, I will not be producing any posts. For now, I will concentrate on my day job, and use the rest of the time to spend with my family. I hope this does not bum too many people out. Thank you for checking in, and it is not my intention to loose any readership (or momentum for that matter), but I've got to prioritize baby! Focus!

I wish you all a great summer! Good luck in all your endeavors! ABC! Best regards, MJS

CSX Follows NS With CMH Investment

2007-04-20T23:08:00.000-04:00

This article appeared in the Columbus Dispatch this morning. Check out the investment numbers and also the amount of warehouse&distribution space currently in the Columbus area...along with the growth estimates. The question for me is this...Where are we going to get the people to staff these facilities?

Have a great weekend!

Each morning, dozens of steel truck trailers filled with goods arrive on flatbed rail cars at the CSX intermodal terminal on the West Side.

One by one, the trailers are hoisted off the track and onto truck chassis by a side loader. Semi tractors then hitch up to the trailers and carry the goods to their final destinations.

Scott Movshin, who manages the operation at 2351 Westbelt Dr., looks up at one 40-foot steel box as it is wiggled into place.

"Retail goods, production parts for appliances, auto parts, you name it. How’s it all getting there? In these boxes."

CSX has a grand plan for these containers, one that local business advocates say will bolster central Ohio’s already strong position as a distribution hub. CSX wants to close its overloaded West Side terminal and build a $113 million facility at its South Side rail yard, a "port" of sorts that the company says will reopen long-closed rail links and enhance others.

CSX says the plan, being hammered out at the company’s Jacksonville, Fla., headquarters, would create hundreds of jobs at its rail yard and at spin-off businesses taking advantage of the increase in distribution activity.

Columbus businesses and the Ohio Rail Development Commission are backing the idea, helping the railroad tap federal and state dollars to make it happen. CSX spokesman Dan Murphy said the cost is unknown, although the company last year asked ODOT for $43 million.

That request of ODOT’s Transportation Review Advisory Council was denied. Now, the railroad is preparing a terminal-layout plan showing how the project might be financed.

The terminal construction would require paving about 80 percent of its 136-acre compound near the southeast corner of Groveport Road and Parsons Avenue. CSX would move Sills Park, a 23-acre ball-field complex run by the Columbus Recreation and Parks Department.

"It could be a really big project," said John Ness, president of ODW Logistics, 1580 Williams Rd., near the CSX rail yard. "It’s good for the city to try to revitalize the south end of town."

Ness thinks the CSX facility, similar in concept to Norfolk Southern’s 300-acre intermodal facility near Rickenbacker Airport, would solidify the city’s reputation as an international distribution center.

At intermodal yards, shipping containers can be moved back and forth from railroad cars to tractor-trailer trucks.

"We compete with Indianapolis in logistics, and they’ve got a significant FedEx hub at their airport that has no equivalent in Columbus," Ness said. "If we have a new intermodal yard, with Norfolk Southern and CSX, we can service much more of the New York and New Jersey market and the (Florida) market."

Those areas include major ports through which many overseas goods enter the country.

Central Ohio is a major player in the distribution industry. There are 35 million square feet of industrial development under roof in the Rickenbacker area. The Columbus Regional Airport Authority said that space could double in the future as rail yards are expanded and improved.

The Norfolk Southern yard would create an estimated 20,000 jobs, the authority said.

And last year, the Marion Intermodal Center opened, increasing distribution between that city and Kansas City, Mo. The center is a collaboration involving Schneider National trucking company, CSX Intermodal and the Kansas City Southern railroad.

Columbus officials are expecting job growth to come from the CSX yard because it would be so much bigger than the current one. Movshin said it would be busier simply because it would have more rail lines.

Movshin said there would be little comparison between the company’s current rail yard and the one it’s planning. The West Side facility is on 16.5 acres and handles about 125,000 loads per year. Cargo can be loaded only from the track that abuts the paved yard. There are only two lines at the West Side facility, and they’re not long enough to keep up with demand, Movshin said.

The new yard would be designed to handle 500,000 loads annually, opening it up to CSX markets in Florida and to Portsmouth, Va. Movshin said it also would increase the railroad’s business between New York and Columbus.

"We’re over capacity (on the West Side)," he said. "We need to construct a large facility in Columbus to handle demand."

The Ohio Rail Development Commission is sponsoring the concept for CSX. The Columbus Chamber is backing the idea, as is the Columbus-Franklin County Finance Authority.

The rail commission has been trying to identify state or federal funding sources for the project, Assistant Director Matthew Dietrich said.

"This is a huge project," Dietrich said. "If we can’t bite the whole apple at once, how can we phase it in? "

CSX’s plans come during a railroad renaissance. Demand for railroad traffic is increasing as gasoline prices continue to rise, highways become overcrowded and freight volumes increase.

"We have to invest to stay ahead of demand in global shipping," CSX lobbyist Nick Zimmers said. "In the past, railroads basically went their own way when it came to financing infrastructure projects."

The trend is not lost on investors: Warren Buffett’s Berkshire Hathaway recently filed with the Securities and Exchange Commission to buy nearly 11 percent of Burlington Northern Santa Fe, one of the country’s two major railroads west of the Mississippi River.

CSX also plans to expand operations in northwestern Ohio, Florida, Georgia and Pennsylvania.

Movshin and others at CSX say it’s time to strike now.

"If you’re not in position now, you’re too late," Movshin said. "That’s the position all railroads are taking."

LTL ROI PDQ via NMFC & FAK

2007-04-15T22:48:00.000-04:00

How efficient are you at less-than-truckload (LTL) shipping? The solution to reducing freight costs and lag times could lie right at your own docks. Here are 10 tips to maximize your LTL efficiency:

1. Accurate information is key. When obtaining price quotes for upcoming shipments or bidding out future business, it is always important to know how much weight you will be shipping and the number of pallets your product will move on. Having this information will save you money and help you stay one step ahead of your competition.

2. Ship out of areas close to major metropolitan areas. Chicago, Los Angeles, and Philadelphia have a substantial concentration of LTL trucking firms and terminals. Generally, the farther you are from these areas, the more expensive your freight charges will be. The likelihood that your freight will be delayed also increases.

3. Use third parties (of course). If you ship out of multiple locations, third parties may save you time and money, especially if you move more than four pallets or LTL shipments weighing more than 5,000 pounds. Brokers use independent trucking companies throughout the country that often look for extra freight to fill out their trailers. These trailers are already heading to where the broker's customer is shipping, so they usually offer savings on this available space. The broker will then pass these savings on to the customer. Not only is it more cost effective, but transit time is usually faster because there is less handling.

4. Be flexible with time. This should be obvious, but the more time you can give a carrier to move your product, the more money you'll save.

5. Max out your pallets. If you can consolidate your product on fewer pallets without sacrificing its integrity, you can often save money when shipping through third parties.

6. Consolidate orders. If you know you will have multiple orders going to the same location, try shipping them at the same time. Brokers can pass savings on to their customers when they ship multiple orders to the same general location, even if you cannot put them on one bill of lading (BOL). Standard common carriers sometimes bill customers on each BOL even if the freight is destined for the same place.

7. Do not idly accept annual rate increases from common carriers. When rate increases are unavoidable, try to offset them by having your commodity reclassified to a lower National Motor Freight Classification (NMFC) class, freight-all-kinds (FAK). Get a 4Pl to manage the network!

8. Know the carriers and agents who are handling your shipments. Most LTL carriers do not service the entire country. They "service" those areas outside the range of their own equipment by securing agents based in those areas. Make sure you know these agents and they know you. If your less-than-truckload carrier uses multiple terminals, get the telephone numbers and names of those people who are accountable at each facility. Re-evaluate your dock procedures.

9. Get your freight ready prior to the driver's arrival and if possible, devote one or more dock doors to LTL pickups and deliveries. Coordinate a pickup system with your LTL provider to eliminate delays. LTL carriers assign multiple pickups to each driver and sometimes instruct drivers to leave after 15 to 20 minutes with or without your freight. By having an efficient loading system, both parties come out ahead.

10. Take the time to learn about the industry, and recognize trends. LTL shipments account for the majority of revenue generated by the transportation industry as a whole. Invest resources in making sure that your staff is knowledgeable about LTL practices and procedures. Also, stay abreast of mergers, acquisitions, and closings as these events can dramatically affect your service and pricing.

Communicate, collaborate, share, and be ready to take some risks as well...

3PL Market Leaders Continue Growth

2007-04-11T23:40:00.000-04:00

The market for third-party logistics grew at double-digit rates domestically and internationally in 2006, according to a just-released study.

Much of the international growth was due to rising economies in China and the Asian Pacific region. Domestic growth in the United States was slower than last year because of a slowdown in freight movement but still hit record dollar values, said Armstrong & Associates in their “U.S. and Global Third-Party Logistics (3PL) Market Analysis”.

Third-party logistics gross revenues for the United States hit $113.6 billion, a 9.5-percent increase and an historic high. Net revenues were $53.1 billion. Pre-tax margin was 8.6 percent and net income margin in relation to net revenue was 5.4 percent. Margins for the year were down slightly due to the fourth quarter economic slowdown, the report found.

Armstrong & Associates estimates the global 3PL market at $391 billion. European 3PL revenues are estimated at $139 billion.

Net revenue in the United States for international transportation management, including freight forwarding and global supply chain management, increased 17.7 percent. Top players were Kuehne & Nagel, Expeditors International, DHL Worldwide and APL, all with net income margins of 10 percent or greater compared to net revenue.

Net revenue for domestic transportation management, including freight brokerage, rose by 12 percent. Gross revenues were $33.8 billion. Revenue for BAX Global, BNSF Railway, C.H. Robinson, Meridian IQ and NFI grew by more than 20 percent. At Hub Group, Penske Corp., Ryder and Werner Transportation, revenue grew by 10 percent or more. After-tax net margin for domestic transportation management was 11.1 percent, according to the report.

Domestic transportation management net revenue growth slipped from 18 percent in 2005 and net income margin dropped by 1 percent. The researcher attributed the changes to the economic slowdown but said they are only temporary and have no significant long term importance for key players.

Well...I better put down the coffee and get my game face on...cause it has to be ABC time! Always Be Closing boys

I'm on it!

Newgistics Makes A Move In Mississauga

2007-04-07T21:44:00.000-04:00

Newgistics Inc., a supplier of returns management software, on Monday announced the acquisition of Logistics Management, Inc., a provider of transportation brokerage services optimized for less-than-truckload shipping based in Mississauga, Ontario.

Newgistics, based in Austin, Texas, will leverage LMI’s transportation management capabilities to expand the set of services it offers beyond Newgistics’ traditional business of returns management. Incorporated in 1982, Logistics Management provides freight cost containment services to manufacturers, distributors and associations.

Hmmm...any thoughts on why they bought LMI? Maybe some GTA target accounts? Keep an eye out...

Retailers predict record container volumes...maybe...

2007-04-02T22:34:00.000-04:00

Retailers and large importers are being urged to plan ahead for their logistics needs as this year's peak shipping season is shaping up to be the busiest ever.

”This is going to be a very busy summer at the ports and it's important to keep those goods moving toward the store shelves,” said Eric Autor, vice president and international trade counsel at the National Retail Federation.

Autor’s comments came as the retail organization and the economic consulting firm Global Insight released the April Port Tracker, which forecasts monthly container flows at the top North American ports. The publication stated that container volumes are increasing rapidly and in July the United States will set a new monthly record for containerized imports, surpassing the previous record set in October, 2006 during the height of the peak season.

Container volumes will continue to build after July, most likely spiking in August and then again in October as retailers stock their shelves with merchandise for the holiday shopping season.

Despite the strong growth in cargo volumes, though, the port, rail and trucking industries appear prepared to handle the traffic without any serious congestion problems. Global Insight said U.S. ports are currently congestion-free and service levels in the rail and truck industries are adequate.

The ports will release their March container volumes soon, and Global Insight projects that they will show an increase of 4.7 percent compared to March, 2006. Volumes will continue to build, with July expected to show an increase of 11.4 percent from the year-ago month.

Growth at U.S. ports will be somewhat uneven through August, with Los Angeles-Long Beach and New York-New Jersey projected to experience the fastest growth.

Weather-related problems affected rail performance during the winter months, but soft traffic volumes reduced pressure on the rail network. Rail performance will return to previous levels as the weather improves across the country.

The port trucking industry has performed well throughout the winter months. Diesel fuel prices remain high, however, and implementation of the federal Transportation Worker Identification Credential program is scheduled to take place later this year. Truckers will have to pay fees to secure their TWIC cards, and eventually the background checks and proof of legal residency requirements in the program could reduce the driver pool.

Vancouver, Canada, has been the only North American port to experience congestion and delays this year. Weather-related problems this winter and a strike by Canadian National Railway workers caused lingering congestion problems at Canada's busiest port. Global Insight projects that the port will be back to normal by the end of April.

Any thoughts on the peak season this year? My guess is that it is going to be light/smooth transportation and port operations in North America this season...unless we get a major strike or an act of god situation...

Supply Chain Blogs Come of Age...we are getting critiqued!

2007-03-31T22:39:00.000-04:00

This is an on-line article from Amy Roach Partridge, who is the assistant editor for InboundLogistics.com. She checked out the logistics blog community and critiqued her favorites...

Say what you will about blogging -- that it democratizes information dissemination, or, adversely, that it is killing well-edited, fact-checked journalism -- logistics professionals have embraced it.

Because of their low-tech, easy-to-use nature, blogs have exploded not only as forums to discuss celebrity and political goings-on, but as a resource tool for finding solutions to real business challenges.

While blogging about inventory turns and LTL shipping rates might not be a sanctioned workday activity at all companies, many logisticians use these web destinations as a way to share solutions and experiences, and spark interesting conversation about a variety of supply chain concerns.

The downside is that you can easily spend hours clicking through blogs and posting comments instead of, say, optimizing your inventory or developing a new vendor management program. The upside? You might learn something you can use to make your job easier.

Hundreds of logistics blogs are now in operation; some are quite informative, while others offer little more than a cluster of links to other web sites.

Here is an informal roundup of some logistics blogs that are worth checking out:

BlogonLog

blogonlog.blogspot.com

Blogger: Michael Stolarczyk, senior director, business development, for global 3PL Exel.

Audience: SCM professionals interested in third-party logistics and transportation.

Content: Although Exel does find its way into some articles and Stolarczyk drops a few snarky comments about his competitors, the blog is more than a promotional vehicle for Exel. Stolarczyk clearly knows his stuff, offering insightful commentary about key logistics trends and issues. While it falls a bit short of its dramatic tag line -- "insight, foresight for the dawning conceptual age in the global logistics, transportation, and supply chain markets" -- the blog is a useful tool that generates a healthy amount of user interaction.
--------------------------------------------------------------------------------

China Logistics News

chinaeconomicreview.com/logistics

Bloggers: Writers for The China Economic Review.

Audience: Anyone interested in China's burgeoning logistics prowess.

Content: China Logistics News tracks all things China, offering information on transportation infrastructure developments, news on the Chinese economy, and updates on services available for companies importing and/or exporting from China. The site is light on user interaction, however; only a few articles inspire commentary.

--------------------------------------------------------------------------------

Lean Blog
kanban.blogspot.com

Blogger: Lean manufacturing consultant Mark Graban.

Audience: Devotees of lean manufacturing and supply chain philosophies.

Content: In addition to Graban's interesting posts -- which run the gamut from dispelling Dell's lean myth to analyzing Boeing's "elegantly screwed-up supply chain" -- the blog includes book reviews, podcasts, and a collection of user-contributed lean quotes, such as "If lean is common sense, it would be more common." Eight other manufacturing professionals write frequently for the site, which is updated regularly and has an active user community.

--------------------------------------------------------------------------------

Logistics List
www.logisticslist.com

Blogger: Not identified on site.

Audience: Logistics professionals seeking information on how to outsource logistics capabilities.

Content: Logistics List, which debuted in September 2005, bills itself as a "comprehensive third-party logistics directory for supply chain and logistics decision-makers." In addition to 3PL-focused articles from a variety of logistics sources, the blog includes regional provider directories, a job board, and links to logistics associations and 3PL companies. The site is updated regularly, but does not include user feedback or discussion boards.

--------------------------------------------------------------------------------

SCM Pulse
scmpulse.wordpress.com

Blogger: Rick Ankrum, who has worked in procurement, supply chain management, and strategic sourcing since 1978.

Audience: General supply chain and logistics professionals, as well as procurement specialists.

Content: This blog provides a compilation of news, resources, and commentary about supply chain management and strategic sourcing, gleaned from a wide variety of web-based sources. The blog's clean, uncluttered design makes for a user-friendly experience, but the site does not have an active visitor base. It also includes links to other procurement blogs and news pages.

--------------------------------------------------------------------------------

Supplychainer
www.supplychainer.com

Blogger: Ehsan Ehsani, a technology author and SCM expert, who also contributes to several other blogs.

Audience: Tech-savvy logistics and transportation professionals.
Content: Supplychainer covers a wide range of logistics topics, with an emphasis on logistics technology news. Ehsani's point-of-view entries are particularly interesting, with recent postings covering the financial supply chain, the year's top supply chain technologies, and Wal-Mart's "RFID disruption dilemma." While the blog provides interesting user commentary and useful links to logistics information sites, it also includes a distracting number of irrelevant links.

--------------------------------------------------------------------------------

Who Said Supply Chains Are Boring?
supplychainsrock.blogspot.com

Blogger: Chris Sciaccia, media relations manager, integrated supply chain and logistics, for IBM.

Audience: Logisticians looking for a dose of humor with their information.

Content: This well-written blog is Sciaccia's personal crusade to convince the world that supply chains are not boring, while providing useful industry insights along the way. The blog scopes out unusual ideas -- finding logistics tie-ins in video games and hit movies, for instance -- while keeping users informed of industry developments, research, and trends. Some of Sciaccia's postings highlight IBM products or services, but he is candid about it, offering disclaimers where necessary. The site also includes book reviews, and a fun "supply chain rumor mill" news feed.

@Supply Chain Management

at-scm.com

Blogger: Chris Abraham, supply chain management consultant.

Audience: General logistics and supply chain professionals.

Content: The newly redesigned blog provides Abraham's insightful take on news articles, trade publication features, and research reports pertaining to SCM and logistics. It also includes a comprehensive list of recommended logistics blogs and a fun map showing the location of site visitors throughout the world. (Kudos to Abraham for drawing visitors from as far away as Africa and New Zealand.) The blog is updated regularly and provides a moderate amount of user commentary.

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3PL Wire
www.3plwire.com

Bloggers: "Swizstick" and "Splatty," who claim 20 years of third-party logistics experience between them.

Audience: Logistics professionals seeking a resource for trends, news, and information related to third-party logistics providers.

Content: Divided into a variety of detailed sections -- including air freight, contract logistics, warehousing, and "odd news" -- the site provides commentary on industry happenings, new product and service releases, and best practices for selecting a 3PL. The site also features a weekly poll (which appears to be more sporadic than weekly), a bookstore, and guest bloggers.

What logistics blogs do you log on to every day? Have thoughts or comments about the ones mentioned here?

Okay, so she called me "snarky." I can accept that, because in my circles...this is a supreme compliment...a la the Urban Dictionary:

"Snarky (adjective) describes a witty mannerism, personality, or
behavior that is a combination of sarcasm and cynicism. Usually
accepted as a complimentary term. Snark is sometimes mistaken for a
snotty or arrogant attitude.

Thanks for the props Amy...you will always have space here to air your insight and opinions as well...

However, just so you know...what I really aspire to be is...SNIDE!

WVU Mountaineers - 2007 NIT Champs!

2007-03-29T23:11:00.000-04:00

NEW YORK -- West Virginia has a championship to help lessen the disappointment of missing the NCAA Tournament.

Frank Young and the Mountaineers shot past Clemson to their first NIT title in 65 years.

Young scored 24 points, including six 3-pointers, and De'Sean Butler added 20 points to help West Virginia beat Clemson 78-73 in the National Invitation Tournament final Thursday night.

The Mountaineers thought they had a good case to receive an NCAA bid, with a 9-7 mark in the tough Big East and a victory over UCLA. But they didn't make the cut.

"It's been a lot of fun to play in this tournament and all the emotions just built up as it went along," Young said. "Of course we wanted to be in the NCAA Tournament, but to win this tournament, all the joy is still there. We're still happy about finishing our season with a win"

Young averaged over 22 points in the five games of the NIT and was named the tournament's most outstanding player.

The IT Factor - Continued via THE Freight Dawg!

2007-03-27T22:19:00.000-04:00

Eric Joiner, who has created a great resource for the logistics world, Freight Dawg Blawg, has posted my article and also added some valuable comments as well. Listed below is his full post for your review. Thank you Eric for allowing me to join the rest of the Dawgs...

Michael, having worked for a company that sold supply chain visibility tools (Celarix) and having implemented them (Tradebeams suite in another past life!)... I can add:

1. There is no visibility without trading partners who can contribute the data elements. Write data compliance into your transportation contracts with clearly stated data transmission requirements and the data elements you need. Not all carriers will be able to give you the same info on the same timing. Thats a factor in carrier selection as a balance against rates and transit times.

2. Clearly determine what milestones are important for YOUR supply chain. And they may be different depending on which product chain you are talking about...

3. Determine the ability of all your vendors to provide that information. This will vary by market and mode. You may well get PO invoices hand coded in China for some visibility tool, but you will NEVER get them done in France or the Benelux. Too much bitching, incomplete data and big expense. It just won't happen.

4. Have a hard look at 3PL solutions for visibility. Make Supply Chain visibility tools provision be a cornerstone of your 3PL/4PL contracts. Make the 3PL provide the technology because their potential install base, and carrier integration points may be better due to volume. Technology and visibility should be a key element in 3PL selection.

5. Strongly consider use of XML as a data communication format rather than EDI. Much more flexible and it can be customized easily. Most big carriers and integrators vastly prefer it to use of ANSI or EDIFACT messaging because it is readily tweaked and is cheaper to develop.

6. Develop your own SDK (software Development Kit) for XML for use by your carriers. Many integrators like UPS or DHL can provide these for their own tools. Decide what elements work for you, then ask all your carriers to develop to that standard. XML can feed everything from ERP systems to Excel spreadsheets if managed properly.

7. Avoid directly integrating to massive ERP systems like Oracle or SAP. Instead, think about having the messages go into some middleware database that can be easily hooked to a report writer, rather than trying to get special reports from SAP etc. Let the middleware feed SAP, but use a report writer against the database, not the ERP system.

Eric

The IT Factor

2007-03-26T23:32:00.000-04:00

The globalization of commerce has made it necessary for companies both large and small to have a world view – a big-picture, global perspective that helps them see the possibilities for their business in their entirety. It’s particularly essential for manufacturers whose markets demand that they source from overseas.

A U.S. apparel company might source fabric from China, manufacture garments in Vietnam, send them to Italy for customer design work, then ship final product to a stateside warehouse for retail delivery. There’s no pulling off that complex, unbelievably urgent piece of multi-party commerce without a world view – and some fairly sophisticated logistics technology.

Pulling it off in an economical way – and I mean economical in every sense – comes down to far more than technology. It comes down to having a world view of the supply chain. A view that extends well beyond the physical means of moving products and considers the impact the supply chain has on corporate finance.

Technology is a good place to start, though. The need for advanced IT solutions may seem obvious, but The Aberdeen Group’s research suggests that a surprising number of companies still have a long way to go when it comes to having the kind of sophisticated global supply chain technology that can help them make crucial and timely financial decisions.

According to EyeForTransport’s 2006 Fortune 500 Supply Chain & Logistics Challenges Report, many Fortune 500 companies report their global supply chain technology is inadequate to provide the kind of timely information required for budget and cash flow planning. They’ve got cargo visibility but no fiscal visibility, if you will.

The global supply chain has been relatively ignored because it traditionally has been a small part of a company’s business mindset. The world has changed, though, and companies now realize that neither their IT systems nor their fiscal models are set up to support globalization.

With international sourcing growing at a rapid clip, companies have been caught off guard and are now scrambling to close the technology gap. Without fiscal models to account for costs throughout these systems, and, in most cases, without additional staff, global supply chain managers face the daunting task of managing this activity using makeshift systems, faxes and phones.

Because the supply chain technology void affects logistics managers’ ability to deliver crucial financial data, some CEOs and CFOs have noticed and are now joining the technology crusade. This may open a window of opportunity for logisticians who can tie technology investments to a business case outside the supply chain in order to secure needed funding for global commerce tools.

After a company decides to invest in technology, the next question is whether to develop solutions in house or partner with a technology or logistics provider. According to The Global Institute of Logistics Global IT Council, organizations are increasingly choosing to forego proprietary solutions and seek outside help.

Upfront investment and implementation costs are primary factors. Maintenance is another. So is speed to market. Most supply chain departments don’t have the budget to buy external technology, and multi-party, collaborative practices are not a core competency. They also can’t be confident that the technology solution they build today will support their needs five years from now. They need to be able to combat supply chain inefficiencies now and into the future.

How do they do it? By having fiscal visibility within their supply chains.

It’s unrealistic to try to solve every problem at once. For most organizations, achieving fiscal supply chain visibility should be both the immediate and ultimate goal, and it can be accomplished in steps.

First, pinpoint the area of the global supply chain that can benefit the most from a quick technology upgrade and make that change. Keep in mind that technology is not the magic fix for global logistics problems. Technology for technology’s sake is nothing. It has to be accompanied by skilled people and efficient processes in order to work. That may make it a larger investment, but it will reduce risk and improve return.

The next and most important step is to fiscally account for the total supply chain – not just international inbound or domestic distribution, but every aspect from Purchase Order to Point of Purchase (PO to Pop). Fiscal visibility, from PO to PoP, is the essence of supply chain efficiency. It quickens cycle times and reduces inventory investment. It also draws interest and excitement from CFOs, who invariably come knocking on logisticians’ doors asking, “What’s next?”

The edited version of this was published in the Journal of Commerce this week...in the March 26, 2007 edition. Thanks to Scott R and Brian N for the guidance/support/editing of the original post. Chris Brook of the JoC also deserves a thank you as well...he was the guy that gave me the shot to do this.

So, what do you think?

Mix & Match Ship Components With CREATE3S

2007-03-20T22:39:00.000-04:00

Trade between European countries is rapidly increasing, great demands are being made on Europe’s transport infrastructure. The implications and costs associated with expanding road and rail capacity are well understood by politicians and the general public alike.

The only freight transport mode that has virtually unlimited potential for expansion, and which is considered environmentally friendly, is coastal shipping, hence the current EU focus on encouraging more cargo to move by water.

However, the increasing volumes of cargo being shipped over relatively short distances must be reconfigured via the shipping companies and ports. Larger ships are required and for them to be efficient, faster cargo handling concepts are needed.

Otherwise ships will end up spending more time in port than at sea.

Lo-lo container vessels have, so far, proved to be very cost effective, but over short distances, larger ships become less rather than more efficient. An example: a 350teu ship can round-trip in 48 hours between Holland and the UK, typically making the sea voyage at night and loading/ discharging during the day. Containers arriving in the morning can be on the road (or rail or barge) within hours, en route for consignees, while containers arriving at the port can be loaded and heading across the North Sea the same day.

But if you want to increase the size of a vessel beyond 350/400teu, you have to make a major jump in size, say to 800teu, so that you can use two cranes and achieve similar turnround times to the smaller ships. However, the turnround times are lengthy in relation to time spent at sea and containers are still being handled one at a time.

Reducing dramatically the time a ship spends in port has become a challenge for all SS carriers, so Samskip has decided to take the lead co-ordination role in developing the Create3S concept. Create3S is an acronym for Creative concepts REalised by Advanced design and production to improve Total Efficiency of new-generation Short Sea Shipping.

The three-year project, which started on 1 November 2006, has a budget of €4.2m (US$5.5m) and EU funding amounting to €2.5m ($3.3m) has been secured.

This concept envisages a vessel consisting of two principal modules: a ship hull, including machinery and accommodation, and a cargo-carrying unit. It is intended that the cargo-carrying unit, which in the case of containers might be considered as a giant pallet, could also be designed to carry dry bulk and liquid cargo.

When the vessel arrives in port, it will be possible to separate quickly the cargo module from the ship section, placing it on the quay.

The ship module is then mated with a new cargo module for the return voyage.

In this way, time in port for the more expensive component - the ship module with its crew, machinery and bridge/navigation systems - will be minimized.

The cargo unit can then be unloaded and made ready for the next vessel call.

This approach will combine the ability of a "standard" ship design to be tuned to very different trades and commodities, while using advanced construction techniques such as the industrial pre-fabrication of large standardised components. This is expected to reduce both operational and manufacturing costs and could see production lead times trimmed by about 10%.

The most revolutionary feature of Create3S is the potential to transfer the complete cargo load in just one move. However, for certain vessel applications, it is possible that there may be more than one cargo module - for example, in the case of bulk liquids, more than one commodity may be moving on the same vessel, or it may even be practical to mix bulk and container modules on the same sailing.

The key feature remains that the individual cargo unit being discharged in one move will be far bigger than today, where the maximum size unit is typically a 45ft container or 20ft ISO tank. It is intended that the Create3S modular concept could be applied to a variety of cargo types, such as intermodal load units (containers), dry bulk and liquids, including petroleum products, chemicals and liquefied gas.

Safety and sustainability are also being investigated and accommodated through a comprehensive risk assessment and integration of solutions which facilitate reduced energy consumption, emissions and waste. The new generation vessels will be assessed on their operational and ecological performance in relation to total cost of ownership (including production cost) using advanced design and exploiting simulation techniques.

Frankly speaking, this could be the most innovative concept to hit the shipping industry since the shipping container was created. Wonder what the author of The Box, Marc Levinson would say? What do you say? Can this be created? Will it work? How will the very evironmentally aware EU react? Samskip is taking the lead...who will follow?

Samskip Heads Up New EU-Funded Project - CREATE3S

2007-03-19T00:18:00.000-04:00

CREATE3S is a new research project funded by the European Commission. Bringing together some of the leading companies in short sea shipping and ship design, CREATE3S aims to develop a new generation of short sea vessels utilizing advanced design and manufacturing techniques, enabling Europe to strengthen its shipping and shipbuilding competitiveness. The project is being coordinated by Samskip Multimodal Container Logistics BV in Rotterdam and the company says it intends to be a prominent user of the concept.

The CREATE3S concept visualizes a vessel consisting of two principal modules: a ship hull module and one or more large cargo modules. The CREATE3S concept is intended to be equally applicable to container, dry bulk and liquid cargoes. When the vessel arrives in port, it will be possible to separate quickly the cargo modules from the ship section, placing them on the quay. The ship module is then mated with other cargo modules for the return voyage. In this way, time in port for the more expensive component, the ship module with its crew, machinery and bridge/navigation systems, will be minimized. The cargo units can then be unloaded and made ready for the next vessel call.

This approach will combine the ability for a standard ship design to be tuned to very different trades and commodities whilst using advanced construction techniques such as the industrial fabrication of large series of standardized basic modules. This is expected to reduce both operational and manufacturing costs. Production lead-times should also be trimmed by about 10%.

Mix and match cargo options for the 21st century! Stay tuned to see if this concept will flourish...it looks like it has some sea legs, to me!

Cargo Trams are the "Wave" of the Future

2007-03-12T23:07:00.000-04:00

Amsterdam tries cargo trams

A pilot scheme is underway to run cargo trams through Amsterdam, which could help reduce particle air pollution in the Dutch city by 15 percent.

City Cargo Nederland is carrying out the trial, which runs March 7-31. The trams will use the existing tram system of the Municipal Transportation Co. (GVB), but is restricted to lines with sufficient free capacity to avoid conflicts with passenger trams. The cargo trams operate from 7 a.m. to 11 p.m. to avoid nocturnal noise.

City Cargo Nederland calculates that the air pollution in the inner city can be reduced by up to 20 percent if the number of freight trucks in the main city area can be halved.

The city's council will decide in May whether to continue or expand the project.

Keep an eye on these type of projects...our US port system will need this very thing in the near term.

Not Again!

2007-03-09T22:03:00.000-05:00

100% inspection proposal pops up again in Senate

Sen. Robert Menendez, D-N.J, is taking another bite at the apple with a new amendment designed to create a system for conducting image scans on all cargo containers at foreign ports to detect terrorist smuggling of mass destruction weapons.

Last week the Senate voted down an amendment from Sen. Charles Schumer, D-N.Y., that would have required the Department of Homeland Security to deploy automated inspection systems and scan 100 percent of inbound cargo overseas within five years. The new proposal differs in that it doesn't set any deadline, but requires the department to establish a plan to achieve 100 percent scanning. It mirrors an amendment that was blocked from being attached to last year's SAFE Port Act.

In a letter to Senate Finance Committee Chairman Max Baucus, the National Customs Brokers and Forwarders Association of America urged defeat of the scan-all proposal because of the enormous cost of trying to inspect the vast majority of legitimate cargo. The trade association said the current approach of focusing resources on shipments for suspicious sources is more effective.

"Advocates of 100 percent scanning are deceived by the notion that theirs is a path to fully assured security. Moreover, they presume that the resources and technology will be there, at some arbitrary time in the future," the trade association said. "NCBFAA believes that the Menendez amendment … is a backdoor mandate for what Sen. Chuck Schumer's amendment attempted to accomplish last week."

Industry groups have been vigorously lobbying Congress for weeks to oppose attempts to require non-intrusive inspections of ocean containers, saying the technology and processes are not developed yet that can handle more than 11 million containers per year.

The use of the phrase "backdoor mandate" couldn't be more approriate!

Supply Chain Strategy - What's dat?

2007-03-06T22:52:00.000-05:00

Creating a supply chain or logistics strategy in 2007 is an old fashioned boondoggle… you all think you know what your organization needs, but in reality, uncertainty reigns supreme. How should you go about it? Good question…May I present some guidance?

What is it? Logistics…supply chain…international transport????

Supply chain strategy and logistics projects, from concept to reality, start and end with your organization’s vision or business strategy.

So, ask yourself, what is the optimal supply chain design to help drive business results?

Your outcome must be a framework that is used to assess current and future needs, while detailing a process to build capabilities and supply chain efficiencies. Oh yeah, don’t forget to create a system of metrics that help drive continuous improvement as well.

Your plan must detail relationship strategies and processes for demand, supply, and innovation over five to 10 years that work to accomplish business goals. A cool design, that reflects changes in market dynamics, like power shifts in relationships, risk assessments and emerging constraints (workforce, logistic challenges, and governmental regulations, etc). This plan also outlines a clear organizational design with supporting processes mapped out for an extended period of time.

You must set clear milestones.

The audience that is perusing this strategy must be convinced that your goals and objectives are clear and actionable. Please assesses, review the right balance of risk, complexity, and opportunity. This business case will lead your organization to the ultimate plan.

What it is not? Your plan…that is…

To alleviate misconceptions, here’s a look at what the strategy should not be:

-- Focused solely on the supply chain or company operations--supply chain strategy is not just about supply, operations, or manufacturing. It is a holistic view of demand planning, product and supply processes aimed at maximizing opportunity and mitigating risk across your whole business. Psst…this will get the C dudes to buy in…!!!

-- Internally Focused—an excellent strategy looks beyond the corporate reservation. You have to analyze all the supporting ecosystems. This will ensure that your business strategy and objectives come to fruition.

-- Point in time—your idea is not at the fulcrum point in time. This is a multiyear plan, that will build the capabilities, infrastructure, process, and people to carry out the strategy.

-- Elitist or “company-centric”--no company is an island, so a good plan focuses on the ecosystem, the market dynamics, and the power shifts in all these relationships. It details how these shifts can be used to better support the over-all business strategy.

-- Technology Only--it is not a technology project or the output of a network design optimization project. While technology supports the business processes in the supply chain strategy, it should never be confused with the development of a supply chain strategy. People and process!

-- A substitute for business strategy--a company can only have a successful supply chain strategy if, and only if, its purpose is to support the business strategy.

-- A fiscal plan--the financial impact of the supply chain strategy is one output, and should not be confused with the development of a financial plan.

-- Dawn of the Dead Buzzwords--a good plan defines each term to make it actionable: flexibility, agility, demand driven, visibility, paradigm shift, quantum leap, AAARGH! Void yourself and the project of trite, hackneyed phrases and buzzology.

Check out Wired, Tired, Expired in Wired Magazine or any FastCompany article for the newest words. Go beyond the buzzwords!

What does a good one look like?

A solid plan is realistic and clear. You can ensure that it is actionable, and that it will get approval of the board and the leadership team.

The plan must be based on realistic market performance, the emerging market dynamics, and how well it will support the overall business strategy of your company.

Don’t be afraid to reach past what you may think will be acceptable within your company. Go for it!

100% Scans Downed By Dems

2007-03-02T21:18:00.000-05:00

Senate drops 100-percent inspection proposal

Twelve Democrats and Independent Joseph Lieberman of Connecticut joined Republicans to defeat a proposal that would have required all containers to be scanned before they were shipped to the United States from a foreign port.

The Senate late Thursday voted 58-38 to table an amendment offered by Democrat Charles Schumer of New York requiring 100-percent scanning of all U.S.-bound containers within five years of the completion of the Secure Freight Initiative pilot program that Congress ordered last October in the SAFE Port Act.

The amendment would have become part of the “Improving America's Security by Implementing Unfinished Recommendations of the 9/11 Commission Act of 2007” (S. 4). In January the House of Representatives passed a companion bill that includes the scan-all provision.

Four of the opposing senators were members of the Senate Homeland Security and Governmental Affairs committee, which drafted SAFE Port. They were joined by senior lawmakers including Robert Byrd, D-W.V., and Daniel Inouye, D-Hawaii. Byrd said he supported 100-percent scanning, but the technology was not available to achieve it. Arlen Specter of Pennsylvania was the only Republican to vote in support of Schumer’s amendment.

Peter Gatti, executive vice president of the National Industrial Transportation League, said that senators from the Pacific Northwest were pivotal in defeating Schumer’s amendment, since they had been under intense political pressure to support it. They included Democrats Patty Murray and Maria Cantwell of Washington, and Ron Wyden of Oregon.

“This is the second round of debate on this particular question,” Gatti said. “Nobody in principle is against the concept of scanning, it’s the question of can we do it in a way that doesn’t cripple the very system we’re trying to protect.”

The Senate may pass its bill as early as Wednesday or Thursday of next week. The next step will be the conference to reconcile differences between the two bills before it is sent to President Bush for signing. Alison O’Donnell, director of government relations for the National Retail Federation, was optimistic that the scan-all provision would remain out of the conference report.

On one hand, the Senate gave the bill closer scrutiny through the committee process, while the House did not, O’Donnell said. In addition, the scan-all issue already has previously come up six or seven times as an amendment, and it has been defeated each time.

“Anything can happen in conference,” O’Donnell said. “Certainly our job isn’t done.”

Allen Thompson, vice president for global supply chain policy for the Retail Industry Leaders Association, agreed. “This is not a sprint, it’s a marathon.”

**Calmer heads prevailed here...if passed, the reality of scanning every container coming into the country would have cost millions! Thank you Senator Byrd and the rest of the Senate for taking a pragmatic approach to this issue.**

Have a great weekend! MJS

100% SCANdalous!

2007-02-28T22:21:00.000-05:00

Fear and Loathing in a Port Near You!

You have got to be kidding me...there is no way this legislation should be approved. Get on the phone and start talking to your Senators!

After the private sector successfully killed legislative efforts last year to require technology-based exams of all inbound ocean containers, the ghost of 100-percent inspections has returned to frighten importers and maritime interests once again.

The Senate began debate Tuesday afternoon on legislation to implement the unfulfilled homeland security recommendations of the September 11 Commission, and an industry source with close ties to the Homeland Security Committee confirmed that Sen. Charles Schumer plans to introduce an amendment today to require that every incoming sea container undergo an automated inspection at an overseas port.

Senate leaders stripped any reference to maritime security from their version of H.R. 1 that the House of Representatives swiftly passed in January because the Department of Homeland Security is already moving to implement last year’s port security mandate for a pilot scan-all program at a handful of ports. The Senate bill, S. 4, also includes aviation, rail and highway security sections incorporating legislation proposed by Sen. Daniel Inouye, D-Hawaii, chairman of the Commerce, Science and Transportation Committee.

But Schumer is expected, along with fellow New York and New Jersey Democrats Hillary Clinton, Robert Menendez and Frank Lautenberg, to offer an amendment that closely tracks the H.R. 1 requirement for radiation detection and cargo imaging, and tamper-notifying electronic security seals for every container when the technology becomes reliable, according to several Washington-based industry representatives.

Nervous observers said the vote could go either way.

Meanwhile, other senators are preparing second-degree amendments to soften any Schumer provision, the sources said. One potential draft amendment would extend by two years the deadline in H.R. 1 to scan all containers at large ports within three years and at smaller ports within five years. The bill would allow two-year follow-on extensions if the DHS certifies that scanning technology is not available for purchase or installation, or if technology or processes do not meet the standards set in the 2006 SAFE Port Act.

In a Feb. 23 letter, Republican Sens. Susan Collins of Maine and Norm Coleman of Minnesota, warned their colleagues that scanning all containers within five years at 700 or more foreign ports is not feasible.

“It is very unlikely that these deadlines can be met with current technology and port infrastructure … Given the significant impact the requirement would have on our economy, it would not be responsible to impose arbitrary deadlines for deployment of 100 percent scanning,” the members of the Senate Homeland Security and Governmental Affairs Committee wrote.

Schumer’s office did not respond to phone and e-mail requests for information about his plans.

The U.S. Chamber of Commerce was rushing late Wednesday to draft a letter urging senators to oppose comprehensive container inspections.

The issue has unified the business community, which has been engaged in a concentrated lobbying campaign to defeat a scan-all mandate because of concerns that it would slow down the flow of trade and potentially lead other countries to make similar demands on the U.S. government to examine its exports.

The Retail Leaders Industry Association, National Industrial Transportation League and the National Customs Brokers and Forwarders Association of America are among several groups fighting legislative attempts this session to impose requirements for wholesale X-ray style screening and sealing of containers. The legislative provision last year to conduct comprehensive inspections on a trial basis was a negotiated compromise that helped defeat 100-percent inspection amendments during the previous session.

Industry groups are incensed that lawmakers are moving to impose scan-all requirements when the wet cement of the SAFE Port Act has yet to dry. It’s premature for Congress to consider a container scanning rule covering all trade lanes until the results are in later this year from DHS’s Secure Freight Initiative pilot project that will run containers through detection equipment at several foreign ports, they say.

A number of governments have also weighed in against the inspection requirement in foreign ports, viewing it as a unilateral attempt to impose requirements on their countries.

The Consultative Shipping Group (CSG) said in a recent letter to Sen. Joseph Lieberman, chairman of the Homeland Security and Governmental Affairs Committee, that mandatory scanning of U.S.-bound containers in foreign ports is not feasible.
The CSG represents the shipping ministers of Belgium, Denmark, Finland, France, Germany, Greece, Italy, Japan, the Netherlands, Norway, Portugal, Spain, Sweden and the United Kingdom. The European Commission also supported the letter.

“No customs administration has the resources to scrutinize the scans of the many millions of containers that pass through the world’s ports annually. Indeed, at present, more than 90 percent of the images of those containers that are scanned are used for forensic purposes only, not as a real-time means to prevent illicit activity,” CSG Chairman Brian Wadsworth wrote.

Wholesale imaging regimes “have the potential to undermine a risk-based approach by misallocating resources,” the CSG said, and urged Congress to assess the Secure Freight pilot initiative before requiring more extensive measures.

“Positive results would, of course, be welcome and might constitute the basis for implementing the scheme on a reciprocal basis to exports from other parts of the world,” Wadsworth said.

In a separate letter to DHS Secretary Michael Chertoff last month, European Commissioner for Customs Lazlo Kovacs said that if Congress passed the inspection proposal “it could well give the impression that the United States is not willing to work side by side with the international community to tackle the terrorist threat to the international supply chain. This impression would inevitably have negative consequences for the substantial ongoing cooperation between the U.S. and the EU.

“If the EU and the U.S., the two largest trading blocs in the world, were to introduce measures of the type now proposed, our abilities to trade fairly would be severely limited and we would be threatening world growth, investment and employment.”

Some Negotiation Tips...Yeah, its that time of year!

2007-02-24T23:52:00.000-05:00

Well, its getting to that time of year when carrier contracts will be negotiated...and the rate structure is just one issue that should be reviewed. Here are some tips for your upcoming negotiations:

Pickup performance. How can your delivery be made on time if your pickup isn't on time? Late pickups cost you money, perhaps at overtime rates. Find out your carrier's on-time pickup percentage and how it calculates that measurement. Carriers should also be able to provide this measurement on a customer-specific basis.

On-time delivery is calculated in a similar way as pickup performance. This statistic should be readily available on customer reports --by customer and/or terminal.

Invoicing accuracy. This important metric is often overlooked, but can save your company time and money. Carriers that invest in an imaging system that allows them to use information directly off a customer's bill of lading can ensure accuracy while improving invoicing efficiency. If this isn't one of the measurements you expect to receive from your carrier, it should be.

Interactive web site. Examining your carrier's web site can help you determine the availability of customer service when you need it. Is the web site interactive in a number of ways to provide you with the information you need? The site should allow you to enter pickup requests and download imaged documents and customized reports. It should offer a variety of tracking and tracing capabilities, rate quotes, transit times, and terminal information.

Good communication. Determining how much customers are involved in a carrier's decision-making process indicates the level of interest a carrier has in delivering quality service. Initiating a good communication program with customers is essential.

Responsiveness. You should be able to talk with experts in each of your carrier's departments when you need to. Is the line of communication open and results-oriented? Maintaining a strong communication link goes hand-in-hand with developing a strong, effective partnership.

Centralized customer service. A quick and readily available information resource is valuable to you and your customers. This resource should provide you with an answer to any question you might have about transporting or tracing your shipments.

Empathy and Proactive Account Management. A carrier should know when there are service failures and why. If your customer receives 98 percent of deliveries on time, what about the other two percent? Every service failure should be followed up on, not only to find out what is wrong, but also to correct the problem so that it isn't recurring. Taking this action will make the carrier a better company, and in turn, provide you with better performance. Ask your carrier how it analyzes service defects.

Continuous Improvement Mentality and Training. The kind of training available to your carrier's employees, how often they are trained, and the degree to which they are trained should be part of the company's strategy in providing superior service to customers. Asking questions about training will give you an indication of the company's emphasis on quality performance. Is there a dock workers'training program in place that emphasizes freight handling? Are drivers trained? Is hazardous material training available for all employees? What about general safety training measures? Additionally, the carrier should have accountability procedures in place on each dock to help reduce the number of claims.

Claims Structure and Response time. Getting a shipment to its destination on time doesn't matter much if it doesn't get there intact. How quickly are claims settled? What is the percentage of claims-free service? What is the claims ratio of the terminal that will service your customers? Your carrier should make all these performance statistics available for individual customers and terminals.

Invoice accuracy. This important metric is often overlooked, but can save your company time and money. Carriers that invest in an imaging system that allows them to use information directly off a customer's bill of lading can ensure accuracy while improving invoicing efficiency. If this isn't one of the measurements you expect to receive from your carrier, it should be.

These are just a few things that should be reviewed on a consistent basis...good luck this year! You guys are going to need it!

DPWN Net Income Down, but Express Starts To Impress

2007-02-22T23:29:00.000-05:00

DHL parent’s profit down in 2006

German mail, express and logistics giant Deutsche Post World Net, owners of DHL, reported a group net income of 1.9 billion euros ($2.5 billion) in 2006, down 14.3 percent compared to 2.2 billion euros in the previous year.

“One reason for this decrease was that the group reduced its stake in Postbank to 50 percent plus one share during the past year,” Deutsche Post said in a statement.

Operating profit at Deutsche Post’s enlarged logistics unit, comprising DHL Exel Supply Chain and DHL Global Forwarding, more than doubled in 2006 to 762 million euros ($999.3 million) from 346 million euros in 2005.

The express division posted an operating profit of 325 million euros ($426.2 million), compared to a loss of 23 million euros a year before.

Group operating income increased 2.9 percent to 3.9 billion euros ($5.1 billion) while annual group revenue soared 35.8 percent to 60.5 billion euros ($79.4 billion).

The company’s management will present the full accounts for 2006 on March 20, when a guidance for 2007 will be made.

A Fiduciary Catch-22? Or, DP World Goes on a "Sheikh Down Cruise!"

2007-02-16T22:10:00.000-05:00

DP World says port authority could sink AIG deal

Dubai Ports World’s purchase last year of U.S. marine terminal businesses created a huge controversy because of allegations that an Arab company’s operation of the terminals might make the nation more vulnerable to terrorism. Congress stepped in and forced DP World to divest the U.S. holdings acquired from British ports operator P&O.

Now Dubai Ports World’s plan to sell those same businesses to an arm of the U.S. insurance company AIG is creating another brouhaha.

This time the dispute seems to be more about money than security, as well as AIG’s lack of experience in the port business.

Thursday, DP World and AIG complained in a letter to the Port Authority of New York and New Jersey that the agency has not yet granted “consent” to the deal, which includes the right to operate the port authority’s Port Newark Container Terminal (PNCT) in New Jersey.

DP World and AIG also released copies of their letters to media outlets such as the Associated Press.

The letter from Mohammed Sharaf, chief executive officer of DP World, and Christopher Lee, managing director of AIG Global Investment Group, said: “the port authority has indicated that it will not give this consent unless the parties pay a fee of up to $84 million.

“The lease does not provide for any fee for this consent,” the letter continued. “Indeed, we are not aware of any such consent fee for ports anywhere else in the U.S. or globally. The fee being requested by the port authority is far in excess of any reasonable administrative fee.

“If the port authority continues with its unreasonable request, the sale will fail.”

In an interview with the Financial Times, Sharaf said, “On the one hand you’re telling us to sell. On the other you’re making it difficult to sell. It’s very disappointing.”

Richard M. Larrabee, director of the port authority’s Commerce Department, responded with a letter of his own Thursday afternoon. He said DP World and AIG abruptly walked away from negotiations and asked them “to return to the bargaining table, rather than extracting benefits through the press.”

The port authority sees the dispute as a landlord-tenant matter.

“Dubai Ports undertook to sell its PNCT interest with full knowledge that the PNCT lease expressly provides the PA (port authority) with an unconditional consent right in the event of a change of control,” Larrabee wrote. “Dubai Ports elected to proceed with the sales process without in any way discussing with the PA what requirements would need to be satisfied to obtain the PA’s consent.

“This consent right is intended to ensure both the suitability of any terminal operator, as well as to ensure that change of ownership does not occur continually to simply pull the value out of the public investments made without benefiting the long-term interests of the port,” he added.

Larrabee said the agency asked for due diligence information from DP World and AIG in December, and renewed those requests in January and this month.

Only in the last 48 hours at the port authority’s insistence, have DP World and AIG “begun to share any of the information that the PA requires in order to exercise its fiduciary responsibility,” Larrabee said.

Instead of satisfying “due diligence requests and continuing good faith discussions,” Larrabee said DP World and AIG have “chosen instead to voice their position in the public arena.

“The PA has a fiduciary responsibility to ensure that it receives all the information necessary to determine that this transfer does not cause any detriment to the security of this port or to the bi-state region. Among other things, the PA has a fiduciary responsibility to ensure that the proposed change in PNCT’s beneficial ownership, from a shipping operator to a financial investment company, has no adverse impact on future capital investments made in the terminal or on container throughput,” he said.

In addition, Larrabee said that based on public information “Dubai Ports will generate at least $450 million of proceeds on the sale of PNCT, based on a total investment of approximately $140 million. This represents an annualized rate of return of more than 40 percent.”

He noted, “this extraordinary windfall was greatly supported by capital expenditures by the PA into the terminal. The PA’s expenditures of public funds were made to increase capacity of the terminal and thereby directly enhanced the value that Dubai Ports will receive upon a sale of PNCT.

“The PA's request that its capital expenditures be recovered out of Dubai Ports' extraordinary gains is intended to ensure the continuing strength and viability of regional port facilities,” he added. “Recovery of expenditures would be reinvested in the port facilities to ensure the continued competitiveness of the New York and New Jersey port system.”

Meanwhile, the politicians at the center of the opposition to DP World’s takeover last year of P&O, quickly jumped into the fray, criticizing the port authority and asked it to abandon its request for $84 million as a condition for giving approval to the lease transfer.

“I wouldn't call it a shakedown in the traditional sense, but (they are acting) in an unseemly way,” Sen. Charles Schumer, D-N.Y., told the Financial Times.

Representatives from DP World and AIG have resumed negotiations this morning at the port authority's office, an agency spokesman said.

At a press conference Thursday, Sen. Robert Menendez, D-N.J., threatened political payback against the port authority.

“I've carried a lot of water for the port authority. I have no intention of carrying any water for the port authority if they cannot consummate this deal for the national security of the people of our region and our nation,” the AP quoted him as saying.

A formal statement issued by Menendez’s office late in the day seemed more moderate, however, saying simply that concerns about foreign ownership of port assets expressed a year ago are still valid today.

“All parties involved in these negotiations should remember that this is not just a business transaction and isn’t just about a quick payday. This is, most importantly, a matter of national security and about protecting the American people,” Menendez added.

Anybody think that this might be a leaked script from the last season of the Soprano's...think again! Just when you thought the DP World saga could not get any worse...

A.P. Moller-Maersk Loses Negotiation Tool!

2007-02-10T23:46:00.000-05:00

A.P. Moller-Maersk sells rubber hose company

The A.P. Moller-Maersk Group today sold Codan Gummi A/S and its subsidiaries to Italy’s Maflow Group for an undisclosed amount. Codan Gummi manufactures and sells high-technological rubber hoses, mainly to the car industry. The company employs about 900 staff, including 225 in Denmark.

What motivational tool will the Maersk executives resort to using now...since they can't wield the "old rubber hose" in back room negotiations anymore! Don't say it...its a cheap shot...I know.

Supply Chain Disruptions - Survey Results

2007-02-05T23:43:00.000-05:00

Supply chain disruptions cause major headaches for shippers, carriers, and customers, often resulting in lost productivity and profits. The effects of supply chain disruptions also reverberate beyond the initial event, as companies scramble to fix problems and get back to business.

More than two-thirds of companies that experience supply chain disruptions say it takes more than one week to recover from the disruption, finds a new Accenture study that surveyed 151 logistics executives in U.S. firms with revenues of more than $1 billion.

Seventy-three percent of the executives surveyed report experiencing supply chain disruptions in the past five years. Of those, more than one-third (36 percent) say it took more than one month to recover, and 32 percent needed between 1 week and 1 month to recover.

Additionally, the vast majority of respondents (94 percent) say disruptions -- which are most often caused by problems associated with supply chain partners, raw materials, and natural disasters -- impact profitability and the ability to meet customer expectations.

When asked to rate the impact of disruptions on profitability and customer service, 50 percent and 56 percent, respectively, say disruptions have a "moderate or significant" impact.

Respondents, however, are upbeat about the future risk of supply chain disruptions. Nearly two-thirds (68 percent) say their supply chains are secure from potential disruptions, while 48 percent expect their level of supply chain risk to increase in the next three years.

Their investment plans, though, imply a lower degree of confidence: Nearly two-thirds plan to increase spending on supply chain risk mitigation, using logistics technology, forecasting/planning, and increased logistics capacity.

The study also gauged executives' expectations about upcoming supply chain disruption risks in specific areas.

Respondents replied as follows when asked which specific factors will have an increased level of risk associated with them over the next three years:

* 50 percent expect risks associated with supply of raw materials or parts to increase.
* 36 percent expect risks associated with port operations and customs delays to increase.
* 36 percent expect risks associated with service failures due to longer supply lines to increase.
* 35 percent expect risks associated with geopolitical instability to increase.

Any thoughts from your perspective? If so, let me know with a comment...