Tag Archive: trucking

The Global Logistics Landscape

February 15th, 2019

In the past two weeks, I attended the CSCMP State of Logistics event, am preparing for the Future of Supply Chain & Logistics reception event as part of the leadership team and have debriefed with LMA Associate, Elizabeth Warren who attended the State of the L.A. Port and the State of Long Beach Port events. To summarize, I’ll borrow from the Port of L.A.: “Busier, safer, greener”.

Still number 1 and 2 in the U.S., the ports of Los Angeles and Long Beach increased volume last year to 9.5 million TEUs (twenty-foot equivalent units) and 8.1 million TEUs respectively.  With the threat of tariffs, there was a surge of imports around the holidays, creating record-breaking days in both locations and the second busiest month in history at Long Beach.

Significant progress has been made in terms of air emissions. From 2005 to 2017, diesel particulate matter has decreased by 88%; nitrogen oxide has decreased by 56%; sulfur oxide decreased by 97%; and greenhouse gas by 18%. In terms of targets, there is a goal to reduce greenhouse gasses by 40% in 2030 and 80% in 2050. Certainly, California leads the way when it comes to green and sustainability.

Logistics is around 7.7% of GDP or $965 billion. It has increased around 20% since 2006 yet decreased as a percentage of GDP by 30%. In comparison to other countries, we are far lower with Japan the closest around 11% and China the furthest around 18%. E-commerce is increasing around 15% per year, and it carries high supply chain costs around 25-30% of e-commerce sales.

All modes of transportation were up (airfreight, rail, trucking)! With that said, trucking is 76% of transportation spend and is the 100 pound gorilla. Rates have been on the rise, capacity is tight and shippers have to be more proactive. There are lots of technologies being explored but no near-term, viable solutions to resolve the issues. Again, similar to the ports, there are countless conversations about sustainability.

What Should We Consider and/or What Impacts Could Arise?

Global logistics is relevant to GDP and to every business that produces, distributes and sells products. Whether an aerospace manufacturer with multiple outside service steps all requiring transportation or Walmart, requiring a supply chain sourced both locally and from afar as well as grocery delivery on the customer side, without logistics, business will cease.

In today’s Amazon-impacted marketplace where quick turnaround, short lead times and frequent order changes are the norm, re-thinking your manufacturing and extended supply chain footprint is becoming a necessity. Whether re-evaluating make vs. buy decisions, re-configuring sales channel structures or revising inventory fulfillment practices, logistics is one component that can no longer be an afterthought.  

In our view, those clients with a resilient supply chain will thrive in this new normal business environment.

To learn more about how to create a resilient supply chain to navigate disruption and achieve peak performance, check out our new series or contact us for customized expertise.



Fully Autonomous Vehicles Will Be Here by 2020

June 26th, 2017

Autonomous vehicles seem to arise at every corner. Last week, I heard a presentation on autonomous vehicles by the executive VP of Hyundai, and earlier this week, I participated on a panel at Future Ports Annual Conference with a Caltrans researcher on autonomous vehicles. What is clear is that self-driving cars are going to occur. There is substantial testing, money and efforts going into the development of autonomous vehicles. Amazon, Uber, UPS….all the big names are investing. Certainly, this new technology will revolutionize the trucking and transportation industry.

transportation industry

What Should We Consider and/or What Impacts Could Arise?

Start by not burying your head in the sand. Although there are certainly bumps in the road, there is an amazing amount of investment and effort going into autonomous vehicles. The bugs will be worked out eventually. Thus, start thinking about the potential impacts on your industry, your company and your career.

The positive news is that self-driven vehicles will undoubtedly reduce traffic deaths. As they get closer to practicality, the transportation landscape will change. The truck driver shortage may not matter. The amount of time a truck driver can drive at once to avoid getting tired won’t matter anymore. This will speed up transit times. There will also be radical implications on industries and companies. Do you know whether you are likely to become a winner or loser in this reality? What should you be doing to come out on the winning side? There will also be substantial infrastructure and legal changes. Changes abound. Start by taking stock of how autonomous vehicles are likely to impact you.