The 21st Annual “State of Logistics Report ® ” released this week by the Council of Supply Chain Management Professionals (CSCMP) , showed an economic slip in the U.S. logistics industry. The annual report, presented by Penske Logistics, cited that lower inventory levels, a drop in modes of transportation and interest rates (which hit historic lows) contributed to the decline which dropped to 7.7 percent of U.S. Gross Domestic Profit in 2009. A sharp decline considering the 2008 rate was at 9.3 percent.

By mid-year in 2009, warehouses, which were full of inventory earlier in the year, dropped 2 percent due to inventory relocation or movement. These empty spaces combined with a fall in inventory-carrying costs and plummeting interest rates were to blame.

Additionally, the report revealed that out of all the modes of transportation, trucking (which accounts for a large percentage of transportation) dropped 9 percent in the amount of tonnage transported. Other modes of transportation such as rail and ocean carriers were also hit hard. In spite of lowering their rates, some ocean carriers continued to report historic losses. However, by the close of 2009, the air cargo industry showed a stronger finish. Elements such as a large amount of space and a lack of freight to move, has caused shippers to continue to drop their rates.

But not all the report’s findings are doom and gloom. According to Penske Logistics President, Vince Hartnett, the trucking and supply chain industries are showing signs of turning around in the right direction. If this positive ripple effect continues, trucking and logistics firms will need to add capacity resulting in additional jobs for drivers.

The “State of Logistics Report ®” released their first report and findings back in 1988 and continues to provide valuable information related to the U.S. supply chain process. Each year the report factors in key measurements such as transportation, freight volumes, inventory-carrying costs and revenues.

Tags: logistics | industry | report | warehousing | supply chain | air freight

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Tags: magento | application | fulfillment | outsourcing | georgia | packaging | supply chain

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Are Supply Chains Becoming More Regional?

Tags: operations | supply chain | fulfillment | georgia

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Annual logistics report shows Georgia as top shipping port in nation

Georgia''s shipping industry is a bright spot in a dark economy, says the Council of Supply Chain Management Professionals (CSCMP) in its annual report released this month.

The Port of Savannah was one of only three international ports to see gains and experienced the largest increase of TEUs of all top ten ports. The logistics industry uses twenty foot equivalent units or TEU''s-a term of measurement used in intermodal transport. Savannah''s port traffic increased its TEU volume by an impressive 3.65%.

According to Georgia Port Authority (GPA) over the next 10 years, Savannah''s container terminal will be adding more efficient equipment designed to move cargo at much higher speeds.  Additionally, the Savannah channel depth will rise from 42 to 48 feet to make room for larger ships carrying heavier loads of international cargo.

The CSCMP report found a decrease of over 11% in air freight volumes for Georgia, and 9.4% nationally. A major reason for this decrease can be blamed on a financially flopping economy and inflated fuel costs in 2008. International cargo was impacted slightly less than domestic freight. However, in May of 2009, Atlanta''s Hartsfield-Jackson received the coveted World Air Cargo Award for "Airport of the Year" - bragging rights for Georgia''s logistics industry.

Other promising factors for continued growth in Georgia include $932 million in highway stimulus funds, and the pressure to create more efficient ways of moving goods throughout the world.

Tags: supply chain | import | export | operations | warehousing | georgia

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I read this grat article today on "How to select a 3PL." It is written by David Blanchard.

Link

Here is a summary

Before selecting a third-party logistics provider (3PL), Marc Tanowitz, principal with Pace Harmon, an outsourcing advisory services firm, suggests that manufacturers consider these five fundamentals:

Know Your Demand

Master (and Own) the Forecast

Set Clear and Fair Expectations

Measure Business Impact

Tags: outsourcing | fulfillment | operations | warehousing | supply chain

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The Peach State can expect the logistics business to keep on trucking, according to a new study. Independent research firm GrowthEconomics Inc. ranked Atlanta fifth among the largest logistics employers in the U.S., and outlined reasons for continued upward trending in Georgia this year. The state’s tremendous stretches of roadway, high-volume seaports and the world’s busiest airport are big factors for growth.

The 92-page report takes a look at Georgia’s 21,200 miles of highway that supports over one million trucks each week. Savannah''s container terminal shipped over 2,616 million tons of TEUs last year making it the third largest terminal in the nation. Atlanta’s Hartsfield-Jackson International Airport handles approximately 53,700 metric tons of cargo and more than 60,000 metric tons of mail on airliners and cargo aircraft operated by 19 different companies.

Atlanta-based logistics firm SBC Fulfillment, which provides warehousing, packaging, logistics, and fulfillment services to businesses, is poised to take advantage of new opportunities in Georgia. President and CEO of SBC, Brian Schoenbachler says, “I think that people are just now starting to think of Georgia as a larger center of logistics.” Schoenbacheler hopes that Savannah’s major international shipping port continues to play a key role in the support and expansion of Georgia’s logistics market and industry.

The videos of the presentations from the 2009 Georgia Annual Logistics Summit held on April 16^th are now available for viewing online.  The direct link to the videos is:

http://link.brightcove.com/services/player/bcpid21135945001

Each presenter is recorded separately so you may view any or all of the presentations in the order that you choose.  To access copies of the presentation slides as well

As the full logistics report go to: http://logistics.georgiainnovation.org/documents/list and select the folder “2009 Georgia Logistics Summit.”

Tags: supply chain | georgia | air freight | export | import

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ATLANTA–The Georgia Center of Innovation for Logistics introduced the first-ever statewide logistics industry report at a gathering of 400+ industry leaders in Midtown Atlanta. View the full Report. The report, titled 2009 Georgia Logistics Report: A Focus on Providers is the first comprehensive profile of Georgia’s logistics industry and was conducted by an independent research firm.

“Not only is logistics a priority for us, but it is also a key draw for foreign investment into our state,” remarked Kenneth Stewart, Commissioner, Georgia Department of Economic Development. “From our deepwater ports in Savannah to our busy Atlanta airport, the state of Georgia gives companies global reach.”

The logistics summit was held at TWELVE Atlantic Station from 11 a.m. to 1:30 p.m. on Thursday, April 16. Following an opening message from Governor Perdue, speakers included Curtis Foltz, chief operating officer of the Georgia Ports Authority; Dick Anderson, executive director, Georgia Regional Transportation Authority; Mark Holifield, senior vice president, global supply chain, Home Depot, Inc.; and Page Siplon, executive director, Georgia Center of Innovation for Logistics. “There are many moving parts in this ecosystem of companies we call the ‘logistics industry’. Georgia is focused on feeding this ecosystem with innovative tools and information, highlighting its success around the world, and showcasing its unique assets and advantages,” said Page Siplon, executive director of the Center of Innovation for Logistics. “This in turn attracts new jobs, investment and business opportunities. It’s a unique business development cycle of which GDEcD and the Center of Innovation for Logistics are proud to be a part.”

Key facts from the 2009 Georgia Logistics Report: A Focus on Providers:

• Georgia is ranked 5th in the nation for business process (logistics-related) patents issued.
• Georgia’s container terminal in Savannah is the 3rd largest in the nation, shipping over 2,616 million TEU’s in 2008.
• Each week, a combined 12 million tons of cargo moves on Georgia’s 21,000 miles of highways.
• The direct total value of output from logistics providers was $11.2B in 2007 dollars.

The 2009 Logistics Summit was presented in collaboration with the Georgia Motor Trucking, Georgia Railroad and Georgia Economic Developers Associations (GMTA, GRA, GEDA), the Savannah and Atlanta Maritime Associations, the Metro Atlanta Chamber Logistics Council and both the Savannah and Atlanta chapters of the Council of Supply Chain Management Professionals (CSCMP). A video of the 2009 Logistics Summit is available upon request.

The Center of Innovation for Logistics is Georgia’s leading resource for accelerating logistics growth and competitiveness in the state. The Center connects and works directly with all logistics sectors to identify common problems and innovative solutions. The result is a competitive edge for Georgia companies gained through access to applied university research, product commercialization and matching grant funds. ###

Link to 2009 Georgia Logistics Report

Tags: supply chain | warehousing | import | export

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Great article today in Supply an Demand Chain Executive Magazine By Richard Gillespie.

The article discusses the 7 critical factors for choosng an order picking system.

The 7 factors are:

1. Minimize picker travel time and distances

2. Minimize product touches

3.  Use of "golden zoning" principles.

4. Incorporate dynamic work zones or flexible picking zones.

5. Utilize slotting principles and techniques

6. Use of task interleaving.

7. Use of picking technology aids.

Tags: supply chain | operations | fulfillment | outsourcing

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Here’s a very interesting new report from Pricewaterhouse Coopers (PwC) entitled “From vulnerable to valuable: how integrity can transform a supply chain” (free download via the link).

The report touches on many of the issues that impact the supply chain, many of which we’ve blogged about recently, and argues that investors are rewarding companies that are taking the necessary steps to improve the integrity of their supply chains. PwC’s analysis shows that supply chain disruption can destroy shareholder value and corporate profitability. Companies must invest in enhancing the integrity of their supply chains, in a manner, which balances operational objectives with reputational risks. This requires developing leading risk indicators in addition to the typical Key Performance Indicators (KPI), in order to measure supply chain performance.

As the report states, this has created an opportunity for companies that can sieze it.  PwC believes that consumers and investors increasingly reward companies that manage the environmental and social impact of business while delivering high quality products and services.  Some leading companies see their supply chain as a source of competitive advantage.

Definitely a report worth checking out.

Tags: supply chain

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This article in Publishers Weekly, brings to light a serious issue that could be affecting the supply chains of textbook publishers.

"The Consumer Product Safety Improvement Act, enacted in August 2008 as a response to the high-profile 2007 recalls involving Chinese-made toys containing lead, covers not just playthings but all consumer products intended for use by children 12 and under. That includes books, audiobooks and sidelines, no matter where they are manufactured, even though most books have lead levels that are well below the Act’s most stringent safety standards. The industry is fighting to have most books exempted, but there may not be a resolution by the time the Act kicks in on February 10, so publishers and retailers are proceeding as if books will be included."

The article also states,

The CPSIA dictates that each children’s book SKU, shipped to retailers, catalogues and e-commerce sites as of February 10, must have been tested by a third-party lab to ensure that lead levels are below 600 parts per million. (Acceptable levels drop to 300 ppm in August and 100 ppm in 2011.) Some books also must be tested for phthalates, an acid used to soften plastic. The importer or domestic manufacturer must provide a Certificate of Conformity (usually posted on the Internet), and the product must be labeled appropriately. Older products on shelf must fall within acceptable safety standards but do not need to be accompanied by a Certificate, according to recent comments by the Consumer Products Safety Commission.

The Association of American Publishers, BMI and several other industry trade groups are trying to convince the CPSC to exempt traditional (ink-on-paper and ink-on-board) formats. Books historically have been unregulated, meaning that publishers alert the CPSC when they discover an item that poses a risk. Of just a dozen book-related reports in 20 years, only one has had to do with lead (a spiral binding) and the rest with choking hazards due to toys attached to books, according to Allan Adler, AAP’s v-p for legal and government affairs. “So we were rather shocked to find out that now we’re going to be possibly broadly testing books for unacceptable levels of lead,” he said.

This could have a tremendous impact on textbook publishers as they have warehouses and supply chains full of product that will need to be certified or destroyed.

Tags: supply chain

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This article today in the WSJ, titled "China Imports, Exports Tumble"

It appears China is next up on the global recession.  It just goes to show how interconnect our economies are today.  We truely have a global economy.  The world contines to get smaller and smaller.

"China's exports and imports both fell for the second consecutive month in December, with an accelerated contraction in trade offering a bleak outlook for the world's third-largest economy and highlighting the need for Beijing to rely more on potent fiscal stimuli.

The weak trade data, especially that of imports, showed China isn't just suffering from a global economic slowdown but also from a deterioration in local demand, an engine that the authorities have hoped would keep the economy going and unemployment in check."

Tags: import | export | supply chain

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I found this over at SourcingMag.com.

According to Avinash Vashistha, CEO, Tholons, “Service buyers will need to re-assess their outsourcing strategies and implement a better mix of multi-sourcing, nearshore and offshore models, while service providers will look to tap growing domestic markets (such as China, India, Argentina, Brazil and even US) as a means to hedge against the volatility of existing offshore contracts.”

These shifts will significantly induce a high degree of consolidation - smaller and less efficient providers may face difficulties in tapping new revenue streams and will be prone to acquisition or outright dissolution. Paul Santos, Managing Director, Tholons Capital says, “It’s an opportune time for the larger players to continue their string of strategic, niche acquisitions.  In an increasingly competitive market, and improbable economic state, the mantra of only the strong will survive has never been more relevant.”

1. The market downturn will impact revenues during the first 2-3 quarters
2. Focus on domestic market to increase
3. Global economic downturn will lead to increased outsourcing in Healthcare, Education, Retail, Telecom and Legal Process Outsourcing (LPO)
4. Governments to take special initiatives in promoting destinations
5. Clients will increase geographic diversity in their service delivery locations
6. Pricing pressures will result in reduced rates and new measures to achieve cost savings and higher productivity
7. Consolidation imminent for small players - focus away from large deals
8. Outsourcing revival by 2009 end - driven by small to mid sized (SME) clients
9. Strong focus on innovation, R&D and technology adoption will be key differentiators for providers.
10. Sourcing deal sizes will increase for large clients

A copy of this report is available at:  http://www.tholons.com/Trends_2009.pdf

Tags: supply chain | outsourcing

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Tags: supply chain | risk management

Hits: 415 | Read more...

1. Supply-chain risk mitigation 
2. Searching for working capital
3. Resurgence in letters of credit 
4. Shortening the supply chain
5. Improved speed and savings in Mexico 
6. More free-trade agreements — and more scrutiny
7. China clamps down on oversight
8. New import challenges:The amended Lacey Act
9. A global eye toward consumer product safety

Tags: supply chain | import | export

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