November 18, 2015

Recently, in our order fulfillment review for October, we made brief mention of an intriguing new report from Colliers International on global logistics trends.

Titled “From First Mile to Last Mile,” – a concept that aligns perfectly with our outlook on business – it chronicles the rapid rise of container shipping and its impact on international trade. The report holds some intriguing stats about logistics on a global scale.

Let’s take a closer look at some of those statistics and what they mean for our industry.

Continue reading 7 Striking Stats About Logistics, Global and Local

May 28, 2014
English: Yangshan Deep-water Harbour Zone, Por...
Yangshan Deep-water Harbour Zone, Port of Shanghai. (Photo credit: Wikipedia)

Last year we wrote about the logistics of globalization, examining the challenges that 3PL providers face whether goods from the next state over, or a country on the other side of the world.

That proved to be one of our more popular posts, so we thought we’d see what things look like almost a year on.

Rather than delve into any one topic (which we’ll probably end up doing in several future posts anyway!), though, here’s a look at global logistics through the lens of statistics.

 

Six Statistics Reflecting the State of Global Logistics

1. The top five U.S.  trading partners in terms of cargo containers in 2009 were all Asian countries, of which China accounted for almost half (48%) of the shipments in question. This means that American trade with China has almost doubled since the turn of the century. [Source: RITA, 2011]

 

English: A 20-foot long ISO container Русский:...
A 20-foot long ISO container (1 TEU) | Photo credit: Wikipedia

2. Containerisation was associated with an increase in bilateral trade of 790% over 20 years. A bilateral free-trade agreement, by contrast, boosted trade by just 45% in the same period. Membership of GATT raises it by 285%. In other words, containers have boosted logistics globalization significantly more than trade agreements in the past 50 years. [Source: The Economist, 2013]

 

3.  On a typical weekday, U.S. container ports handle around  70,000 TEUs (twenty foot equivalent unit containers – see right) of freight from all around the world. [Source: RITA, 2011]

 

4. Container ships seem to get larger every year. The biggest container vessel currently sailing the seas can hold a whopping 18,000 TEU [Source: BBC, 2013]. Contrast that with statistic number 3 and multiply it by hundreds of bustling ports in countries across the globe. That’s a lot of cargo on the move on any one day!

 

5. Expenditure on U.S. logistics was $1.1 trillion in 2009, which is larger than the national GDP of every country in the world, except for the top 12. [CSCMP,2009]

 

6. Container trade with the top 10 countries made up nearly three-quarters (71
percent) of global import container shipments and over half (56%) of exported container shipments. [Source: RITA, 2011]

 

 

Which stats strike you as the most representative of global economic expansion and logistics globalization?

Let us know on Facebook or Twitter!

 

 

 

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February 11, 2014
Panama Canal
The Panama Canal | Image Credit: Wikipedia

We wrote last year about the important ongoing expansion work being done on the Panama Canal. Well it goes on no longer, for the moment at least, as a labor dispute worth a mammoth $1.6 billion halts operations.

The disagreement centers on costs that appear to have run over-budget and the associated bills that are outstanding. A Spanish-led group of engineers tasked with completing the expansion work is becoming increasingly frustrated at what is sees as underpayment and a lack of commitment, while the Panama Canal Authority is reportedly saying that the claims “amounted to blackmail.”

As with most labor disputes the truth behind the latest Panama Canal strike probably lies somewhere in the middle, but that’s of no comfort to the many global businesses counting on a project that is running over on many counts.

Checking the other box true of most projects, the expansion is already expected to run over its previous deadline of August this year. This would have seen the Panama Canal celebrate its centenary – the first navigation of the waterway was on August 15th, 1914 – in fine style, but work isn’t now expected to be completed until some time in 2015.

Any extended delay now risks pushing the project into a second year of delay, not something acceptable for a channel that the ASCE describes as one of the seven wonders of the modern world.

Though happening thousand miles away, the disruption isn’t something that tri-state area businesses can ignore. The route is a vital one for global trade, affecting goods both in and out of the United States to the tune of hundreds of millions of dollars. The expansion will allow passage for vessels carrying more than 2.5 times the current maximum capacity, bringing down supply chain costs for import and export businesses alike.

English: George Washington Goethals, photo sca...
George Washington Goethals – Image Credit: Wikipedia

And historically-speaking we have even deeper reason to take an interest locally.

The supervision and completion of the Panama Canal was under the control of none other than George Washington Goethals, the very same man for whom the bridge connecting Staten Island, NY to New Jersey is named.

Goethals has a storied place in U.S. history, both engineering and military, so it’s just one more item to add to the laundry list of reasons hoping that one of the world’s most important waterways gets its act together, before the project sails into more dangerous waters.

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December 18, 2013
Made in USA tag
Image Credit: Phil Roeder

There’s pride in that “Made in the U.S.A.” sign, and the reshoring trend is making U.S. businesses realize that there are advantages to sourcing products closer to home.

After decades of sending more and more manufacturing work to Asia – and particularly China – research on both sides of the Atlantic suggests that companies are reevaluating those decisions.

‘Reshoring’, the process of returning some previously offshored production  to a company’s home country, is beginning to take hold in not only the business world, but also the wider media.

Bringing Manufacturing Back Home

The stats support this notion, somewhat.

Across the pond in the United Kingdom, the Manufacturing Advisory Service (MAS) found that one in six U.K. manufacturers is bringing a proportion of its production home in 2013. Although quality and supply chain complexities factored into these decisions, the primary driver is, as always, cost. The massive expansion of the manufacturing business in popular Asian locations has permitted many suppliers to continuously nudge up their rates, helping to make domestic suppliers attractive again.

Back home on this side of the Atlantic, popular news segments such as ABC’s ‘Made in America’ mix with good old fashioned patriotism to encourage business owners big and small to think global but buy local. Domestic production has not widely reached a cost at which it can compete outright with countries like China and India, but reports suggest that the U.S. has already reached parity with neighbor Mexico, and could hit that status with its Chinese rivals as early as 2015. No mean feat for a supply chain proposition that would have received little attention just a few years ago.

Expectation vs. Reality

In reality, the dream of a resurgent U.S. manufacturing base is still some way from becoming a reality, as companies prefer to balance between domestic and foreign suppliers. This is a prudent supply chain decision that mitigates risk while managing fluctuating costs. Even so, the pendulum is undeniably swinging back in favor of U.S. suppliers.

In the longer term, public opinion and public officials may play a critical role in just how much business is brought back home. The realization that China is more of a competitor than a supplier these days has helped the movement gather steam, as had the desire of politicians to rekindle a sluggish economy.

If these factors continue to grow, and if consumers feel pride swelling within them and swaying them to buy American, reshoring could make “Made in the U.S.A.” a common sight once again. And as a proud American company, Capacity LLC will be happy to move those products to feed that demand!

 

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September 10, 2013

 

USNS Comfort transits the Panama Canal.

The Panama Canal has long been a crucial route for U.S. supply chains, with around 70% of all cargo moving in and out of the country passing through it every year. Next year sees the waterway’s centennial and some significant events will mark the occasion, not least of which is the targeted completion of its expanded capacity.

 

The improvement, which has been ongoing since its approval in 2006, will double the capacity of the route and allow three times as much cargo to pass through it every year. In reality the project is likely to go into overtime, perhaps into early 2015, but the ramifications of the work are already the subject of much speculation. Logistics analysts are assessing how this is likely to change the logistics business in the U.S.



For over 60 years the Pacific coast ports have seen greater growth than their Atlantic coast peers, boosted primarily by the vast volume of imports utilizing the North America-Asia trade routes. The combination of relatively unrestricted transit conditions and efficient intermodal transport solutions from the west coast inland have proved to be a winning formula. As the Panama Canal expands to allow for increasingly large container vessels, and North America’s imports are sourced from more diverse locations around the world, growth is beginning to swing in favor of the Eastern seaboard.



Rather than pit this as a good old fashioned East vs. West grudge match, however, logistics professionals around the country are likely to embrace these developments. Anyone who has spent time in the industry knows how uncomfortable it is for businesses to be heavily reliant on just one transportation route, so anything that opens up new options and redistributes the balance of goods flowing in and out of the country should be seen as a positive. A flexible supply chain allows for alternate routing, which is something that the Panama Canal will be better able to accommodate in the near future.



Any major expansion in one mode of transport tends to necessitate improvements in others, meaning that the knock-on investment in transportation infrastructure provides a boost to businesses up and down the supply chain. This can already be seen in the Tri-State area with the increases in height of the Bayonne Bridge in New Jersey. Though we can expect the usual construction grumbles in the short term, the longer term efficiency improvements will be a boost to a wide range of businesses.
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