August 15, 2014

An interesting online article from Area Development magazine takes a look at just how likely it is that we’ll see a rapid move to intermodal supply chain solutions by North American companies.

Map of the North American Class I railroad net...
North American Class I railroad network from 2006. (Photo credit: Wikipedia)

To support this theory the writer points to an impressive 30 new inland port operations that are now functioning or in the works since the turn of the century. Two-thirds of these are also new as of the past five years, showing the increasing vitality of the trend.

Where unloading facilities open, storage and distribution centers are sure to follow, and the fact that rail freight volume has quadrupled in the last 25 years makes the resurgence of rail connections a very real phenomenon.

The domination of shipping ports and trucking companies has made the coasts the center of attention for as long as most supply chain professionals can remember. Of course goods move all over the country from there, including plenty of internal distribution points, but the promise of rail is that there are towns all along the lines in desperate need of economic regeneration.With development funds being channeled as widely as Ohio and Pennsylvania to Tennessee and New Mexico, a majority of the country stands to compete for the potential new business that new inland facilities bring.

Some of the driving factors here are positive, others less so. We wrote last year about the potential to bring back the true appeal of “Made in the USA,” which many Americans value and would help to kick the economy on to the next step of its recovery.

On the downside, the lack of investment in our roads and bridges is forcing supply chain planners to reevaluate the risk and costs associated with trucking, which helps to make planners pause for thought when it comes to taking advantage to train moves.

In reality, the future of cargo movement will be a carefully crafted blend of sea, rail and road freight (with air reserved for those vital, valuable items that your purchaser simply must have tomorrow!)  The revitalization of the country’s railroads and internal distribution points is nonetheless something to be celebrated, and a trend that the industry will be watching intently.

 

January 24, 2014
Interstate sign value
U.S. roads helped to contribute almost $800 billion to the economy in 2012

Logistics is an extraordinary business. It touches almost every element of our personal and professional lives, yet often remains in the background for  all except those of us who work in the field.

Each part of the supply chain contributes in some way to bringing products into homes and businesses around the country, with a massive contribution to employment and the wider economy.

To understand just how much this is true – and what goes into making everything run smoothly – consider these 7 surprising logistics statistics:

  1. 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]
  2. America’s roads generated total revenues of $791.3 billion for the country’s economy in 2012. [Marketline, 2013]
  3. The U.S. transport infrastructure includes:
    • 47,000 miles of Interstate roads,
    • 94,313 miles of Class I freight railroads,
    • 25,320 miles of navigable sailing channels.
    • [2008 US Government Bureau of Transportation Statistics, RITA]
  4. U.S. rail freight grew by 4.6% in 2013, with the value of the sector up to more than $60 billion. [Association of American Railroads, 2013]
  5. The average container vessel calling along the Pacific Coast, which is the busiest port area of the U.S.,  is 4,345 TEU. This is equivalent to a maximum potential weight of more than 100,000 tonnes, or in excess of 230 million lbs! [RITA, 2011]
  6. Transportation and warehouse employment alone represents 3.2% of the total US workforce, more than 4 million people. [Bureau of Labor Statistics, 2010]
  7. Companies that use sophisticated supply chain methods have been found to achieve profit levels 12 times greater than those with less sophisticated solutions. [Bain & Company]

For more on where we see the profession going this year, read our summary of supply chain management trends for 2014.