Earthblog

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

Hits: 2031

On April 20, 2010, an explosion occurred on a BP drilling rig causing 11 deaths. As of today, the leak, located in the Gulf of Mexico continues to reek havoc on our natural resources and could potentially threaten shipping, production and natural gas in Alabama, Louisiana and Mississippi. Industry experts are nervous about the spill spreading west towards New Orleans, which will obstruct ships entering and leaving the Mississippi River-the largest waterway for U.S. commodity ships.

The logistics industry could feel the impact and additional risks associated with this disaster. Ships moving cargo through this major port face the dangers of tracking oil and potentially impeding clean-up efforts, says one BP official.

The danger of fire is always imminent when oil slicks are present in the water. The slicks could also give off toxic fumes, which would put workers in danger.  So far, two gas platforms and one drilling rig has been evacuated.

The leaks, which are located 5,000 feet from the surface of the water are currently spewing approximately 210,000 gallons per day, according to an earlier estimate by The National Oceanic and Atmospheric Administration. A staggering amount when compared to the Alaska Exxon Valdez disaster that occurred in June of 1989. So far, a more accurate estimate has not been established.

As of today, ship traffic has been not been affected, says a Port of New Orleans official. Two clean-up stations have been posted by The Coast Guard close to the Mississippi River for vessels that may encounter the spill. So far, the main channel to the river (The Southwest Pass) has not been affected by the spill and no commercial ships have had to use them.  The Mississippi River has anywhere from 5,000 to 6,000 ship calls annually.

BP (which is financially responsible for the clean-up) continues to seek ways to plug the leaks.    NOAA's website provides updates where you can track and view photos and videos of the Gulf of Mexico oil spill.

Tags: shipping | logistics | oil spill | import | export

Hits: 2201

by Angela Cavallari Walker

In the wake of Haiti's deadly earthquake on January 12, 2010, an estimated three million people are in need of food, water and medical supplies. The unconfirmed homeless rate is anywhere from 200,000 to 1.5 million, says the American Red Cross. So far, fundraising campaigns have been successful, but that is just the first step of many when it comes to the tedious task of delivering these products into the hands of those in dire need.

Logistics volunteer organizations such as the American Logistics Aid Networks or ALAN play a critical role in the herculean effort to get these items into areas ravished by disaster. ALAN acts as the primary contact for donated products, equipment, and services such as warehousing, material handling, and transportation. The non-profit organization was founded in response to the aftermath of Hurricane Katrina.

Back then, there was not a system in place to communicate and distribute disaster donations to areas most impacted by devastation. “I saw most of the relief groups have things that they did not expect to arrive," says ALAN President, John Menzies. ALAN developed a system using an Aidmatrix platform that enables both state federal relief agencies to post supply chain needs. The portal matches NGO needs to ALAN sponsors and volunteers. An NGO or a non-governmental agency refers to any group with no representation of government. “As an organization we want to support a specific need by an NGO," says Menzies.

Currently, military and government agencies control most of the supplies that go in and out of Haiti.  Menzies describes Haiti's logistical status as a pull situation rather than a push. For Haiti, the real challenge right now is priority setting and getting supplies there. Overall, Menzies has been pleased with the progress in Haiti as donations continue to flow in through product matches. “We''ve helped our NGOs connect and helped some people on the ground by enabling relationships to get things done.”

Click here to view and track the logistical progress of these supplies delivered to Haiti

Tags: Haiti | logistics | operations | air freight | shipping

Hits: 2085