On Monday, the Partnership held our annual State of Logistics event. Before a crowd of 70, Jack Ampuja, President of Supply Chain Optimizers, revisited his predictions from last year’s event and gave us a look forward to what the coming year holds for the industry. Jack hit the nail on the head when he predicted that cost control would be the #1 industry issue in 2010 as the year forced logistics providers to continue their emphasis on supply chain management and network optimization to increase efficiencies and reduce costs.
Reflection on the year brought with it some good news – the industry has seen 12 consecutive months of increasing truckload revenue, in-bound ocean cargo was up 21% at year end, intermodal volume is back to pre-recessionary levels and Yellow Road (a internationally renowned trucking & logistics company) survived the recession – all indicators that allow the logistics industry, who has been severely battered by the recession, to breathe a collective sigh of relief. Want even more good news? Year end reports from National Association of Purchasing Management indicate that the U.S. manufacturing economy is back (!), U.S. factory utilization is up, and truck tonnage has made a significant recovery.
With 2010 over, what does 2011 hold in store for truckers, distributors, customs brokers, 3PL firms and supply chain management professionals? Jack indicated that fuel costs will again be a crucial issue (oil has again reached $90/barrel), the enforcement of regulations such as the ISF, CSA, and the 100% air cargo screening mandate will continue to make it more onerous to ship freight and trucking capacity will remain tight as equipment and driver shortages continue. Despite these challenges, the New Year brings with it increasing opportunities in international markets as the U.S. embraces the President’s export initiative to double exports to 20% of GDP by 2015. For comparison, our northern neighbor exports 50% of its GDP annually – an export-orientated model that the U.S. must study closely as we strive to achieve economic recovery through export growth. For more on Jack’s predictions for 2011, please click here.
With that overview, Jack turned things over to our panel: Jim Manno, Vice President of Sonwil Distribution Center, Damon Piatek, President of Welke Customs Brokers USA, and John Soos, General Manager at Empire State Shippers Association. As Jim started the conversation in response to a question from the audience regarding the increasing role of technology in logistics and supply chain management, it quickly became evident that one emerging trend – the use of RFID (Radio Frequency Identification Devices) is revolutionizing the industry by providing a means to manage assets in a way that reduces cost, increases control and availability, and boosts customer satisfaction. At Sonwil, Jim uses this technology to track inventory for his customers, allowing him to find any asset, from a truck to a single SKU in less than 60 seconds!
Damon continued with a discussion of what the recent expiration of the GSP or Generalized System of Preferences, a U.S. program that provides preferential duty-free treatment for products from 130+ developing countries, will mean for the industry - a headache for importers as they will have to pay duty on these goods and then apply for a retroactive reimbursement once Congress reauthorizes the legislation!
John touched on something Jack had introduced in his 2011 outlook as he signaled that regulatory issues will seriously affect rates as the year progresses. One of the biggest problems for the trucking industry will be the recently reduced number of “hours of service” – a number that indicates how long a trucker can be on the road each day. These reduced hours of service coupled with the driver shortage and the 200,000 – 400, 000 drivers that the new Comprehensive Safety Analysis (CSA) program will take off the road will result an additional 10% decrease in trucking capacity.
As the panel continued to answer questions from Jack and the audience, each touched on the importance of moving forward with the Peace Bridge expansion project so our region can maintain its competitive advantage, increased understanding about regulatory issues, continued investment and focus on infrastructure, and increased awareness of the benefits of greening your supply chain.
As the program wrapped up, each panelist offered his “takeaway” for 2011:
Jack: It’s all about people (hire & train the best talent) process (streamline internally & do more collaboration externally) and technology (cloud computing & RFID)!
Jim: The U.S. MUST invest in transportation infrastructure!
Damon: Buffalo Niagara holds many advantages for logistics stakeholders – namely, access to domestic markets, Toronto and world market so we can only go up from here. Most importantly, [with the right investment] logistics can spur growth here!
John: Buffalo Niagara is only 90 miles away from Toronto but comparatively much less expensive – a statistic we need to capitalize on!
All in all, it was a fantastic event. A big thanks to Jack Ampuja for a great presentation and Jim, John and Damon for their industry insights.
To see what else the Partnership is doing on behalf of the logistics industry, click here to see our 2010/11 Action Agenda. Looking for support with a specific logistics issue, problem or opportunity? Contact Craig Turner for one-on-one assistance for you and your company!