LFS is proud to be Certified™ by Great Place to Work®! This prestigious award is based entirely on what current employees say about their experience working at LFS. We consider employee experience a top priority every day and this year, 93% of LFS employees said LFS is a great place to work – 34% points higher than the average U.S. company. We celebrate and thank our employees for all they do to earn this incredible recognition.
Great Place to Work® Certification™ is the most definitive “employer-of-choice” recognition that companies aspire to achieve. It is the only recognition based entirely on what employees report about their workplace experience – specifically, how consistently they experience a high-trust workplace. Great Place to Work Certification is recognized worldwide by employees and employers alike and is the global benchmark for identifying and recognizing outstanding employee experience. Every year, more than 10,000 companies across 60 countries apply to get Great Place to Work-Certified.
By: LFS Marketing
August 30, 2021
Navigating the world of shipping can be hugely complex. From finding the right carriers to ensuring that packages are delivered promptly, there are plenty of moving parts that can go wrong. Understanding common shipping pitfalls can significantly aid your company’s shipping strategy and catapult you toward lasting success.
Here are some of this year’s top shipping mistakes to avoid.
A limited number of carriers. There’s no denying that large national carriers can help increase a retailer’s operational efficiency. But when was the last time you evaluated your carrier mix to see which options exist? You’re likely tapping into national carriers for around 80% of your freight volume, but you might have difficulty with the remaining 20%. With 97% of U.S. truckload carriers operating with 20 or fewer trucks, it can be difficult for large carriers to deliver to niche locations.
Companies should evaluate their parcel programs regularly to ensure they’re maximizing capacity, speed, and cost. Carrier diversification and the use of smaller, regional carriers can help you deliver efficiently to remote locations, in addition to ironing out issues surrounding inconsistent demand and short lead times.
Use of a third-party logistics (3PL) provider is an ideal way to begin incorporating multiple carriers into the mix, increasing shipping elasticity and transportation options. You’ll be able to maintain a single relationship with the 3PL while it works directly with national and regional carriers on your behalf.
On-premise or outdated technologies. Advanced technology has infiltrated every industry imaginable, and the shipping industry is no exception. Modern inventory management systems, application programming interfaces (APIs) and other cloud-based systems offer long-term benefits in the logistics and shipping space. Companies today have no choice but to keep up with the pace by leaning on this technology.
If you’re currently using outdated technology or technological systems that don’t communicate with one another, the result could be miscalculated shipping times, inconsistent consumer demand, and automation issues. Such problems ultimately taint consumers’ experience with your brand, potentially discouraging them from placing future orders.
Modern shipping technology can lay a strong foundation in harnessing data, leading to optimized routes, external systems integrations, faster fulfillment, more automated tasks and overall reduced inefficiencies.
Lack of shipping data. From finance to healthcare, big data is an ever-growing part of industry operations. As ships and trucks make deliveries, they provide data that’s aggregated into cloud technology and can be utilized to help shippers adapt quickly to new environments.
Big data in the shipping industry can:
Inaccurate weight or classification. If you classify a single package incorrectly, it isn’t a huge financial loss. But multiply inaccuracies across hundreds of thousands of packages and you’ll quickly realize how expensive this problem can be. Shippers want to send packages as cheaply as possible, but forcing packages into inappropriate weight ranges or classifications will only cost more in the long run.
The choice of the correct weight and speed can also impact the safety of each shipment, as it helps ensure that trucks are properly loaded, with weight evenly distributed throughout. Take the time to accurately weigh shipments and classify them properly for consistent and affordable deliveries.
Wrong shipping addresses. This also results in out-of-pocket costs to the shipper. Even the smallest change in the package’s zip code, state code and the like can have a huge impact on cost, especially if the package is being shipped internationally.
Triple-check that each package is properly addressed, to save money and uphold your brand’s hard-earned reputation.
Peak shipping season is right around the corner. By addressing current weak points in your shipping approach now, you can make for your most successful shipping season yet.
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: Supply Chain Brain
August 24, 2021
We are proud to announce that LFS has made the prestigious Inc 5000! After a challenging year with the Pandemic and lots of industry changes, we are part of the Inc 5000 list for 2021. The Inc. 5000 is a list of privately held American companies that have recorded immense growth over any given year. Our CEO, Andres Lopera, was interviewed about this achievement and we would like to share some of his thoughts:
How does it feel to be in the Inc. 5000, as one of the fastest-growing companies in the U.S.?
Andres Lopera, LFS´ CEO - “I am extremely grateful since this achievement took place thanks to the great talent we have in our company. I feel that our logistics experts have reached a maturity level, providing great customer service while being detail-oriented. This sets us apart and has allowed us to achieve significant growth”
How have you managed such quick growth in the last few years?
Andres Lopera, LFS´ CEO - “You always feel there is something else to be done, mainly with the multiple technological improvements that are feasible and necessary nowadays. So, I think that having clear blue ocean strategies that improve our process and lead our growth is the key. That along with our focus and persistence are what has helped us reach this great achievement. There is something we are 100% sure of and it is that we don’t want to follow, we want to lead, and each strategic step is to get us closer to this dream.”
What has been the most rewarding part of your journey as a business owner?
Andres Lopera, LFS´ CEO – “I have seen how everyone in the company has overcome and managed big challenges, providing positive results and smiling while sharing learnings with others. I think this is one of the most rewarding feelings a company and a company leader could have. It is not a secret that the logistics industry is very competitive and nowadays there are worldwide limitations, so having a team that looks for solutions with the best attitude is rewarding.”
Now that LFS is part of the Inc 5000 list, what’s next for the company?
Andres Lopera, LFS´ CEO - “The company is investing in digital improvements that will provide a big improvement for shippers and freight forwarders, evolving their logistics process with an easy and friendly platform. They will be able to make better decisions thanks to the insightful information they could get of their shipments and the industry.”
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: LFS Marketing
August 20, 2021
According to Freightwaves:
The National Retail Federation is calling for the start of peak season to kick off with a bang. The group sees imports to the nation’s largest retail container ports increasing 12.6% year-over-year in August to 2.37 million twenty-foot equivalent units, ahead of the recent monthly record established in May of 2.33 million.
“August is the beginning of the ‘peak season,’ when retailers stock up on holiday merchandise each year,” the report stated. “Many retailers are moving up their shipments this year as part of their risk-mitigation strategies to ensure that sufficient inventory will be available during the holidays.”
What happens when the boxes get here remains an issue.
The freight will land on U.S. shores as freight markets enter a second year of unprecedented disruption brought on by record consumer demand and a transportation network suffering from a lack of labor and equipment to fill the need.
“The strain of the continuing economic expansion is putting considerable pressure on the logistics supply chain,” said Ben Hackett, founder of Hackett Associates, which works with the NRF to produce the monthly container forecasts. “We’re seeing a lack of shipping capacity combined with port congestion as vessels line up to discharge goods from both Asia and Europe.”
Numbers from the NRF show first-half 2021 imports increased 35.6% year-over-year to 12.8 million TEUs. The first half of 2020 included the peak of demand destruction that was caused by the pandemic, which closed many sectors of the economy for months.
The NRF is calling for a new record in 2021 with full-year imports up 17.5% year-over-year to 25.9 million TEUs. Even with the COVID overhang last year, container imports came in at a record pace, 1.9% ahead of 2019 at 22 million TEUs.
July numbers haven’t been finalized but the expectation is imports increased 15.7% year-over-year to 2.22 million TEUs. September is expected to see a 4.9% year-over-year increase to 2.21 million TEUs. But the tough comps created by last year’s record container landings will be evident during the fourth quarter as imports are expected to decline 3% in October, 1.5% in November and 4.1% in December.
“Delays are stretching to landside as port terminals struggle with space shortages, and labor challenges are affecting ports, railroads and trucking companies alike. This part of the recovery is not a pretty sight,” Hackett added.
Ships waiting longer for berths at ports and delays unloading freight once it’s there are just part of the supply chain headwinds. Once routed inland, container shortages are being exacerbated by slow rail service and labor challenges at shipper facilities, which has resulted in delayed equipment turn times, further pressuring rail service.
“The continuing lack of labor, equipment and capacity has highlighted systemic issues and the need to create a truly 21st century supply chain to ensure resiliency against the next major disruption. Passage of infrastructure legislation currently pending in Congress is a key step in that direction. We need continued focus by the administration to help address these issues as well,” Gold stated.
The recent spate of records set for imported containers have been the highest recorded since the NRF started the dataset in 2002.
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: Freghtwaves
August 16, 2021
Southern California, presents a very tight availability of Hazmat and Tanker endorsement trucks in Q3 2021, according to DAT Freight analytics. Considering the total number of trucks available in Los Angeles, there are 9.6 loads requests per truck available. Thus, the availability is already limited to consider only the Hazmat and Tanker Endorsement Trucks which are close to 25% of the trucks available. This is the current situation and several reasons support this limited truck availably and price increase in the trucking industry.
1.California has become a key entry point for freight entering the U.S. in the post-COVID-19 market. There is a notable shift in shippers moving freight in through the eastern ports in late 2019, so, they have scrambled to recover lost time and manage inventories in what has become the new normal. According to the Freightos Baltic Index, Maritime spot rates have grown 84% from China to North America’s West Coast over the previous year as maritime carriers have cut capacity in anticipation of a decline in demand. Truckload volumes have grown 19% out of the Los Angeles market year-over-year (y/y), while domestic intermodal volumes have also increased 10% over the previous year.
2.The high increase in the Spot Market Loads and Van Rates (Spot) from Jun 2021 vs June 2020, when the rise of the Spot Market Loads was 101.5% and for Van Rate (Spot) was 47.1% showing a saturated market with new loads that were out of the radar and change the behavior of the market, impacting the pricing.
3.The rise of Fuel Prices in the US, especially in California. Comparing Aug 2021 vs Aug 2020, the fuel price has increased by $0.943 per gallon, reaching a price of $4.271 per gallon. This price is highly superior to the average fuel price in the U.S. which is $3.367 per gallon. This means that there was a general fuel price increase in The U.S. but specifically, California is one of the States with the highest fuel price increase, making more expensive the transportation services from this State
4.The truck availability is affected by the double brokering. Double brokering is the unauthorized re-brokering of a load to another trucking company and this situation has taken place in California reducing hundreds of possible carrier companies that can work for LFS. Here at LFS, we request specific information to verify the carrier company and provide qualified carriers for our customers. However, this impacts our truck availability and may affect the pricing as well.
More detailed information can be found in Freightwaves as a source of global freight news.
This California Freight Market Analysis: Q3, 2021 is built considering two sources: DAT Freight & Analytics and Freightwaves to keep you updated about the latest news and market trends. If you have any questions, please don’t hesitate to contact us.
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: LFS Marketing
August 16, 2021
According to Freightwaves:
A bipartisan group of senators negotiating with President Joe Biden boosted new funding for highway and port infrastructure each by $1 billion from an initial framework announced in June, according to a new fact sheet released by the White House.
The “Bipartisan Infrastructure Deal” announced on Wednesday increases new funds for roads, bridges and major projects from $109 to $110 billion, with port infrastructure investment increasing from $16 billion to $17 billion.
The $550 billion in total new funding in the package dropped by $29 billion from the $579 billion June framework, with $10 billion of the decrease shaved off public transit, which was cut from $49 billion to $39 billion.
The $110 billion in surface investments included in the package, which would reauthorize the surface transportation program for the next five years, includes $40 billion of new funding for bridge repair, replacement and rehabilitation — “the single largest dedicated bridge investment since the construction of the interstate highway system,” according to the fact sheet. It also includes $17.5 billion for major projects “too large or complex for traditional funding programs.”
The deal invests $66 billion in rail to eliminate the Amtrak maintenance backlog, modernize the Northeast Corridor, and bring world-class rail service to areas outside the Northeast and mid-Atlantic. Within these totals, $22 billion would be provided as grants to Amtrak, $24 billion as federal-state partnership grants for Northeast Corridor modernization, $12 billion for partnership grants for intercity rail service, including high-speed rail, $5 billion for rail improvement and safety grants, and $3 billion for grade crossing safety improvements.
The bipartisan bill also invests $7.5 billion to build out a national network of electric vehicle (EV) chargers to help accelerate the adoption of EVs.
“The bill will provide funding for deployment of EV chargers along highway corridors to facilitate long-distance travel and within communities to provide convenient charging where people live, work, and shop,” according to the plan. “Federal funding will have a particular focus on rural, disadvantaged, and hard-to-reach communities.”
Biden proposes to pay for the deal through a combination of corporate user fees, tax enforcement on crypto currencies and redirection of unspent emergency relief funds, but those funding measures have yet to be agreed on. Shortly after the deal was announced, Senate lawmakers voted to begin considering the bill.
A prominent safety group said the bipartisan package falls short of the Democrats’ INVEST in America Act, which passed the House earlier this month along party lines and included $343 billion for roads, bridges and highway safety programs.
“In its current form, the bill not only falls short, it also disrupts the historical precedent of substantial safety strides being incorporated in major infrastructure bills,” said Cathy Chase, president of Advocates for Highway and Auto Safety.
“Without a course correction, an estimated 183,000 people will be needlessly killed and 14 million more injured over the next five years. The comprehensive costs of motor vehicle crashes during the same period is expected to be more than $5 trillion.”
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: Freightwaves
August 4, 2021
According to Freightwaves:
Canada is beginning to reopen its borders for nonessential travel after a 16-month shutdown in response to COVID-19. Starting Aug. 9, fully vaccinated U.S. citizens and permanent residents can enter the country.
Even though trade has been exempt from the restrictions — allowing trucks to move freely between Canada and the U.S. — the reopening of the border still has significant implications for freight. And not just because more congestion and wait times will undoubtedly accompany the return of passenger traffic.
It stands to be a big driver for freight demand.
“The opening of the border will be a boon for the transportation and logistics industries as a whole,” said Peter Stefanovich, managing partner at Left Lane Associates, a Toronto transportation mergers and acquisitions advisory firm.
It will come from an expected influx of visitors from the U.S. Ahead of the pandemic, in 2019, 25 million U.S. residents visited Canada, including 15 million tourists, according to Statistics Canada.
Just how fast they’ll return remains to be seen. But they will be spending money at restaurants, hotels and events. And that spending will drive demand for freight, Stefanovich said.
Visitors from other countries will be allowed to come to Canada in September, adding to the momentum.
In short, it will drive demand in the hospitality sector, which has struggled from the absence of foreign visitors. The only challenge may be to secure capacity in big markets like Toronto, particularly for temperature-controlled freight.
For now, the United States is keeping its land border closed for nonessential travel. But when it does open, U.S. border communities will undoubtedly see the welcome return of Canadians and their penchant for cross-border shopping, in search of deals on everything from milk to shoes.
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: Freightwaves
February 8, 2021
According to Safety+Health:
Law enforcement officers will target speeding and other unsafe driving behaviors during the Commercial Vehicle Safety Alliance’s Operation Safe Driver Week, slated for July 11-17.
They’ll be on the lookout for passenger and commercial motor vehicle drivers following too closely, driving distracted, making improper lane changes, failing to use a seat belt and driving while impaired.
Preliminary estimates from the National Safety Council show that, in 2020, the rate of motor vehicle deaths in the United States climbed 24% compared with the previous year, even as the estimated total number of miles driven fell 13%.
During last year’s Operation Safe Driver Week, citations and warnings related to speeding were most common among both groups of drivers: CMV drivers were given 2,339 citations and 3,423 warnings, while passenger vehicle drivers received 14,378 citations and 11,456 warnings.
“Data shows that traffic stops and interactions with law enforcement help reduce problematic driving behaviors,” CVSA President John Samis said in a press release. “By making contact with drivers during Operation Safe Driver Week, law enforcement personnel aim to make our roadways safer by targeting high-risk driving behaviors.”
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: Safety+Health
December 7, 2021
According to TTnews:
Trucking and oil industry experts are warning of possible delays in fuel deliveries during the peak of the summer driving season as the pinch from the driver shortage — particularly among tanker truck drivers — could slow down service to fueling stations.
“We’ve been worried since May that the one issue that will rear its head in July and August would be the difficulty of getting the fuel from the petroleum terminals the last miles — the last 60 miles to the stations,” Oil Price Information Service Founder and industry analyst Tom Kloza told Transport Topics. “We’ve only had cases — where there have been outages — where it’s been, maybe, someone is out of unleaded for six or 12 hours, but the driver shortage is real.”
Kloza said tank truck companies have enough equipment to move fuel to fueling stations, but industry officials tell him the sector is short about 16% of the drivers it needs on a day-to-day basis to keep stations supplied.
Kloza said he worries that if a station is without fuel for just a few hours, the news could spread through social media and lead to panic buying like that seen in the aftermath of the Colonial Pipeline shutdown. After suspected Russian hackers on May 7 took control of the computer network that ran that company’s pipeline — which supplies gasoline and diesel shipments along the East Coast — panic buying of fuel set in.
“I see a huge swath of the American public that’s prone to apoplexy this year,” Kloza said. “I’m not predicting widespread outages — it’s transitory — but what will the reaction be? Predicting human behavior is impossible.”
A report from the U.S. Energy Information Administration said gasoline demand is virtually identical to what it was during the same period of 2019, but is up 16% from the end of 2020 when many Americans were still staying home amid the pandemic.
The increased demand for fuel is coming at a time when the price of both gasoline and diesel continues going up. According to the EIA, gasoline averages $3.06 a gallon nationwide, up 93 cents from a year ago. Diesel averaged $3.29 per gallon on June 21, 86 cents higher than a year ago.
American Trucking Associations Chief Economist Bob Costello noted that many tanker companies laid off drivers last year as the economy plunged into recession and fuel demand plummeted. Now demand is picking up and those companies are hiring again.
“Gas stations weren’t taking nearly as much fuel, and tank truck companies laid off drivers a year ago. Now, you don’t just flip a switch and say, ‘Hey we’re back.’ They have to rehire and train these drivers,” Costello said. “It takes a lot of training. It’s one thing to drive a truck, but it’s another thing to put the fuel in the tank.”
Ryan Streblow, the new president and CEO of the National Tank Truck Carriers, said his group is facing several challenges with getting new drivers into the industry. He cites the COVID-19 pandemic and an associated rash of retirements, pandemic-related closures of state departments of motor vehicles that slowed the flow of new drivers, restrictions on driving schools and additional hazmat qualifications that tank truck drivers need before being allowed to deliver fuel or chemicals.
“Families going on vacation, volleyball tournaments, camping, baseball tournaments — the demand is there. We just don’t have the available resources to move that commodity from point A to point B,” Streblow said. “It extends well beyond fuel. Our chemical haulers, our food grade, our dry bulk aggregate — they’re all in the same boat, searching for qualified drivers. We do believe this is an issue we are going to be battling for some time.”
Streblow said between 10% and 25% of tanker trucks are idled because of the driver shortage.
Wharton, N.J.-based Carbon Express is a liquid bulk carrier that transports fuel and other commodities. CEO Steve Rush told TT the driver shortage in the tanker industry is a very difficult challenge, and noted his company has raised driver pay numerous times recently to keep and attract drivers. Rush said his company pays drivers by the hour plus bonuses — instead of by mileage — and this has boosted their overall pay and kept his driver turnover rate in single digits. He said many of his drivers are making more than $95,000 a year.
“Pay them by the hour. It’s not what you pay, it’s how you pay,” Rush said. “The driver shortage is awful. The competition for drivers is intense. We know what’s going on.”
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: TTnews
December 7, 2021
According to Frobes:
2020 exposed the cybersecurity industry’s fundamental data problem. For years, cybersecurity was thought of as a problem only for the technology sector. However, as industries spanning education to government accelerated digital transformation with a focus on remote workforces, the data these organizations generated increased — and thus, so did the opportunity for cyberattacks.
In the last few weeks, we saw hackers target everything from a computer system at a Tampa, Florida, water facility and an entire county’s public school system in Baltimore, Maryland, to a medical center in Burlington, Vermont.
While there are certainly many lessons we can learn from these recent examples, one thing is clear: the way we think about cybersecurity must change.
Prioritizing The Security Of Our Supply Chains
When adding a new piece of software to an organization's network, very often we overlook the risk and security maturity that software carries. This may not seem like a huge oversight, but keep in mind most software vendors still view security as a liability, and they will do the bare minimum to be secure. In today’s cybersecurity landscape, are you comfortable only having the bare minimum protection? We didn’t think so.
To keep your organization secure, it’s imperative to take the security of your supply chain into your own hands. Ask yourself the following: Do you know every Chrome extension your employees download on their laptops that could possibly be opening your network up to unwanted exposure? To keep your supply chains secure, it’s important to embrace a “zero trust” security philosophy in which device, cloud and identity layers are closely controlled. Ensuring devices are protected with predictive and AI-powered technologies, coupled with a powerful visibility layer, is the bedrock of securing an organization's data.
Shifting Our Perception Of Ransomware From “If” To “When”
In 2020, a company was hit with a ransomware attack every 11 seconds. And the costs from these attacks are expected to reach around $20 billion by 2021.
We need to shift our mentality from what we should do if ransomware infiltrates our networks to what we should do when ransomware infiltrates our networks. To catch ransomware early on, it’s imperative to understand everything that is on your network. While that might seem daunting, AI-powered technology can help organizations fingerprint and profile devices across the network to not only enable complete visibility, but they can also help identify weak links and minimize risk over time. By understanding what’s on your network, your security team will be better equipped to identify malware and ransomware binaries before they have the opportunity to wreak havoc and stop the attack before it ever occurs.
Going Beyond Legacy Technologies
Legacy antivirus solutions simply haven’t kept up with the rapidly changing cybersecurity landscape. Most legacy solutions only rely on scanning files to detect known attacks, which makes them extremely vulnerable to new attack techniques. While standard vendors only look for the known — a known hash, IP address, vulnerability or behavior — next-generation technologies go a step above, providing organizations complete visibility into all activity across the network.
Once upon a time, signature detections might have been “good enough,” but today, any solution that doesn’t encompass behavioral AI and machine learning will be easily outwitted by attackers in seconds. With ransomware, phishing and malware all on the rise, the modern enterprise needs a modern solution.
2020’s cyberattacks taught us that hackers' techniques are advancing at an alarming rate. Security can no longer be viewed as a liability, but instead must be viewed as essential infrastructure. We must embrace technology to bolster our security efforts, which isn't nearly as daunting as it sounds. To begin, it can be helpful to catalog the capabilities your organization needs new technology to address — those that were overlooked by the old. From there, it can be as simple as mapping those capabilities to current processes, procedures or workbooks that need to be updated and selecting the new technology that maps to the capabilities you’ve listed.
We must do better and prioritize security together. Adapting our views on enterprise security will enable us to take on cybercriminals head-on and, hopefully, be in the position to beat them at their own game — especially on the day your organization is under attack.
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: Forbes
June 25, 2021
According to Supply Chain Dive:
Dive Brief:
- Recent data from the American Forest and Paper Association suggests the containerboard industry is producing close to full capacity, as the operating rate for containerboard companies was 98.4% in March (up 2.8% YoY), according to a statement from Terry Webber, the association's executive director of packaging.
- As production ramps up, corrugated packaging manufacturers, such as WestRock, are raising prices. During the company's Q2 earnings call, Ward Dickson, WestRock's executive vice president and CFO, said the "implementation of these price increases and improved business mix drove $88 million in year-over-year earnings improvement."
- The index measuring cardboard prices increased to 369.4 in May, compared to 342.1 for the same month in 2020, according to the Bureau of Labor Statistics' Producer Price Index for corrugated and solid fiber box manufacturing. Prices shot up during the first half of 2021, after remaining fairly flat in 2020 despite an uptick in demand.
The PPI for for corrugated and solid box manufacturing shot up
The Producer Price Index for primary products related to corrugated and solid fiber box manufacturing, since Jan. 2019.
Chart: Edwin Lopez / Supply Chain Dive Source: U.S. Bureau of Labor Statistics Get the data Created with Datawrapper
Dive Insight:
Although American Forest and Paper Association found that containerboard production increased 9% in March compared to March 2020, the boost in supply was not enough to keep prices from going up this month.
Rising containerboard prices could be a threat to companies that rely on packaging to deliver goods ordered online to their customers. If prices continue to shoot up, companies will have to pay even more for shipping boxes and figure a way to balance out the additional cost. That could mean setting higher prices to absorb the increase.
"Boxes are the most widely used packaging for e-commerce shipments," Webber said. And to meet the rising demand, manufacturers have "steadily increased over the last decade" by expanding capacity by 14% between 2010 and 2019, he added.
Manufacturers are now operating at almost full tilt. Many investments are geared toward recovering product fibers for reusable packaging to secure supply.
"Boxes are ... the most recycled packaging in the United States providing a versatile and sustainable packaging solution for retailers and consumers alike," Webber said.
American Forest and Paper Association expects the industry's capacity expansion to continue with billions in investments lined up through 2023.
This story was first published in our weekly newsletter, Supply Chain Dive: Procurement. Sign up here.
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: Supply Chain Dive
June 25, 2021
According to Supply Chain 247:
Time to Modernize Supply Chain Design
In light of the dramatic changes that supply chains have undergone over the last 20 years, companies need new, innovative approaches to supply chain design that shifts the focus from cost-minimization toward value creation.
And the design process must mature to capture the complexity, volatility, and uncertainty of the competitive environment in which modern supply chains operate.
These challenges can be met with the support of advanced methods that combine the power of analytical models with the implicit knowledge of expert human-decision makers.
The new approach improves decision-making transparency, enriches design solutions, and reflects the real-life challenges that companies now face.
A New Supply Chain Environment
The field of supply chain design is rooted in conventions developed through studies carried out in the 1990s. These studies primarily focused on the physical configuration of supply chains, such as facility location and customer allocation decisions. Supply chains were designed to minimize costs such as those associated with facilities, warehousing, and transportation.
Also, in the conventional approach, the design of a supply chain is typically reviewed once every few years; these exercises are rarely linked with tactical planning decisions.
Such conventions are no longer adequate. The competitive environment in which firms operate has changed over the last two decades. During this time, the acronym VUCA has been employed to describe the increasing volatility, uncertainty, complexity, and ambiguity of business conditions.
Today, operating in a VUCA environment is no longer the exception but the reality to which companies must adapt daily. Globalization, multi-outsourcing, and the proliferation of brands are driving the structural and organizational complexity of contemporary supply chains. Increasing economic and political volatility creates uncertainties on the demand and supply side of global operations.
Furthermore, new models such as omnichannel retailing and shifting customer expectations in terms of service responsiveness and flexibility are radically changing the way we think about supply chain design. As supply chains have become a major competitive differentiator, design has moved center stage in the development of corporate strategy.
Traditional supply chain design approaches fail to capture these realities in several ways.
First, conventional methods fail to capture the complexity of contemporary supply chains. The decisions that underpin these designs were historically constrained by limits on computational power and data availability. Also, traditional design processes rarely incorporate factors such as demand uncertainty, supply chain disruptions, and multi-channel distribution.
Second, the focus on cost minimization is outdated. Traditional approaches mainly focus on decreasing the logistics costs under a given demand, which often results in the use of centralized facilities in areas with low real estate costs. Today, proximity to the end customer and delivery speed are major drivers of competitive advantage.
Consequently, when deciding on the deployment of logistics assets, companies must consider aspects of revenue management. Design approaches need to implicitly consider trade-offs between the ability to capture additional revenue by meeting customers’ increasing delivery expectations and the need to keep fulfillment costs under control.
Third, given the highly volatile and uncertain conditions that now prevail, success in contemporary markets requires decision-making agility and speed. As a result, supply chain design must be evaluated much more frequently than before. Thus, supply chain design must become an ongoing process that involves continuous updates of the variables and methods used, rather than one-shot exercises carried out every few years.
And fourth, in addition to these changes, in recent years there have been significant advances in data science and a massive increase in the amount of data available to supply chain professionals. Data analytics and machine learning tools make the structure and performance of complex supply chains more visible
Furthermore, advanced network science methods enable companies to characterize the complexity of relationships between multiple suppliers, manufacturers, distributors, and retailers.
A Supply Chain Fresh Approach
With the benefit of these developments, traditional optimization and simulation models can be extended to include more information and complexity. Consider, for example, a network design study carried out recently by the MIT Center for Transportation & Logistics (MIT CTL) for a major e-tailer that looked at multiple sales channels. The study explored the integration of direct sales and third-party flows as well as multiple distribution channels with deliveries to customers or traditional stores. Additionally, multiple delivery services, including same-day and instant delivery and customer and transport infrastructure information at the level of each neighborhood, were part of the study.
The shift toward value creation also extends supply chain, design models. In addition to traditional decisions such as the number, location, and size of facilities, models can now incorporate go-to-market decisions including distribution channels, tactical asset deployment, and operation governance rules.
Importantly, studies no longer need to be confined to decision-makers within logistics and the supply chain function; executives from strategy, finance, sales, and marketing can now participate in design projects, bringing a level of cross-functional collaboration that is rare in traditional modeling exercises.
The ability to include other disciplines in the design process is a hugely significant development that will enrich supply chain designs and make companies more responsive to an ever-changing competitive environment.
For example, in a project carried out recently in MIT CTL’s CAVE Lab, a team of executives from a leading manufacturer modeled iterations of a supply chain design. Participants from various disciplines, including logistics, finance, sales, and marketing, worked jointly on defining key features of the design.
See the video here --> https://youtu.be/9_YyVFG88AM
The exercise revealed that increasing the density of warehouse and asset deployment throughout the United States enabled the company to increase its market share significantly. This increased revenue more than compensated for the additional logistics costs incurred. Direct engagement of sales and marketing executives in the design process injected critical knowledge of market conditions. The co-design event was essentially a sales and operations planning exercise at a strategic level, quickly aligning intuition and accelerating the market response.
Given the central role that supply chain design now plays in corporate strategy, the modeling process must reflect the corporate goals of each company and the decisions needed to implement design changes. This level of specificity requires a shift from generic supply chain design solutions to a highly customized approach. Rapid prototyping and software development enables companies to implement tailor-made design solutions at a lower cost and update them more frequently.
Supply Chain Visualization Adds Value
These analytical advances are a promising avenue for capturing the structural and organizational complexity of contemporary supply chains - but are not sufficient. The sheer amount of data now available can lead to information overload and decision-making paralysis. Furthermore, “black box” model solutions can cause a lack of engagement, especially in the context of decision-making in cross-functional teams.
To address these challenges, it is necessary to provide intuitive interfaces with analytical models as well as the underlying data. Here, interactive visualization enables human decision-makers to grasp all of the information contained in large datasets, identify trends and patterns and build data narratives to support decision-making and engagement.
Also, decision-makers often have knowledge about implicit constraints or objectives that are not comprehensively captured by the analytical tools. Interactive visualization was essential in capturing local salesforce expertise in the previously mentioned case. Decision support systems utilizing mixed-initiative approaches - which combine the inputs of expert users and the analytical power of the machines - allow design teams to arrive more quickly at solutions that address more realistic challenges.
For example, a company was investigating better network configurations for its global distribution network that comprised hundreds of facilities and tens of thousands of customers. For each of the thousands of products manufactured by the company, researchers used network science methods to identify the best warehouse locations. Using a visual analytics tool, users selected the most promising locations based on their knowledge of the specificities of each product. Finally, a machine learning algorithm recomputed the performance metrics for the newly constructed network, and a visual interface enabled the participants to fine-tune the analysis and arrive at appropriate designs quickly.
Accepting Supply Chain Change
Today’s supply chain design processes must capture both structural and organizational complexities that have emerged over the past two decades. The focus needs to be broader, to emphasize value creation based on the ability to serve customers speedily and flexibly. Moreover, the design process must be more inclusive, tailored, and carried out regularly.
We have the technology and the data to redefine supply chain design - but we also need companies to acknowledge that conventional methods are outmoded, and to seek the development of new design paradigms.
About the Authors
Milena Janjevic is a research scientist at the Megacity Logistics Lab in the MIT Center for Transportation & Logistics (MIT CTL) and can be reached at mjanjevi@mit.edu.
*Jarrod Goentzel is director of the MIT Humanitarian Supply Chain Lab at MIT CTL, and is an early developer of supply chain design technology. He can be reached at goentzel@mit.edu.
Matthias Winkenbach is director of the MIT Megacity Logistics Lab at MIT CTL and can be reached at mwinkenb@mit.edu.
Collectively together, they are spearheading the launch of the Supply Chain Design ab at MIT CTL.
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: Supply Chain 247
June 25, 2021
According to DAT Freight & Analytics:
Due to record-high lumber prices, there’s a disposable pallet shortage, which further stresses already strained supply chains.
The cause for the high lumber prices?
Low interest rates and urban flight are fueling the housing boom. According to the National Association of Homebuilders, the unprecedented spikes in lumber prices have added nearly $36,000 to the average price of a new single-family home, and nearly $13,000 to the price of a multifamily home since April 2020.”
DIY backyard projects also soared during the pandemic. The frenzy bit deep into the 2020 summer lumber inventory, resulting in a historic lumber shortage.
While pallets are used in many sectors, the produce industry is especially impacted now that its peak harvest season.
In a recent letter to members, the United Fresh Produce Association who represent the full breadth of the produce supply chain, highlighted a multitude of issues impacting pallet availability including:
- A lack of pallet availability and rising pallet prices add to the stress of already squeezed supply chains
- Pallet costs are up 400% due to several factors, including high demand and rising lumber costs
- Wood pallets increased 8% in April (up 14% this year) in the latest Producer Price Index — the largest increases recorded in the last decade.
- Pallet manufacturers are competing for raw materials with the home construction industry, which has boomed in recent months
The shortage of lumber and wood products has increased the cost of raw lumber 200% to 350% and is making the cost of wood pallets increase incrementally
- Repositioning pallets is a challenge with a strained trucking capacity — not enough trucks and drivers are available to move the pallets from one location to another
- Pallets may be circulating in the supply chain, but not necessarily in the right place at the right time
- Dwell time is up for non-perishable inventory, which indicates pallets may be sitting longer at warehouses or loading docks.
Growers need to keep the pallet shortage in mind as they meet the escalating demand for produce. For carriers and brokers, the pallet shortage will also increase loading delays. We may even see hand-stacking cartons and bags of produce like we did in the days before pallets.
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: DAT Freight & Analytics
June 17, 2021
According to Supply Chain 247:
If your factory is the heart of your organization, then your supply chain is the veins and arteries and your operational efficiency depends on everything being connected to deliver a reliable service.
Supply Chain Automation
Today, many organizations have built operational efficiencies based on a patchwork of legacy systems, with gaps between applications leaving a disconnect in the supply chain, which can lead to inefficiencies, lack of visibility, and general uncertainty.
Supply chain automation provided by a low-code automation platform can automate tasks within the end-to-end supply chain and connect systems for a 360-degree view of operations.
What is Supply Chain Automation?
Supply chain automation is the use of digital technologies to improve efficiencies, connect applications and streamline processes within supply chain operations.
It usually incorporates intelligent technologies such as Digital Process Automation, Robotic Process Automation, Artificial Intelligence, and Machine Learning.
What Are the Benefits of Supply Chain Automation?
There are multiple benefits that can be seen when supply chain automation software is introduced to operations. Here are the four primary benefits:
1. Automate menial, manual tasks
A connected supply chain supported by automation technologies provides the opportunity to free employees from these menial, manual tasks.
“Supply chain management processes contain various documents such as delivery order, dock receipt, bill of lading (B/L), sea waybill, etc,” states AIMultiple.
“Employees in the supply chain department continuously store and process these documents for various reasons, yet, this is a time-consuming, manual task that inhibits businesses to reach operational excellence.”
These tasks are often carried out on pen and paper by employees in the warehouse, taking up valuable time and often leading to human error when recording and submitting information. The benefits of automation, both in and out of the warehouse include increased efficiency - manifested by increased fill rates and decreased cycle times, as well as increased warehouse throughput time, reduced labor and operational costs, elimination of human error, and improved inventory management.
The benefits of automation were realized by Bizagi customer, adidas. The largest sportswear manufacturer in Europe needed to transform its supply chain across 400 factories. Using Bizagi and an agile methodology allowed for less development, more efficiency, and cost reduction. They created standardized, reusable processes to deliver automation across departments.
These automated processes eliminated manual tasks and reduced operational costs, such as eliminating a million emails per year through system integration. They also halved factory onboarding time and sped up the two-month sports asset contract approval cycle to just one week.
2. Transparency and visibility of operations
Traditional supply chains often face unpredictable lead times and lack the transparency to know how inventory is progressing. Digital technology means that now even the everyday consumer is used to being able to see where their online delivery is in its journey from the warehouse to their front door. So why shouldn’t businesses expect the same visibility earlier on in the supply chain?
The reason for the lack of transparency in the past couple of decades has been due to poor connectivity. As more systems and applications were introduced to increase efficiency, they created silos and left gaps between systems, which meant that information could not be passed between them and it was hard to follow the status of a process end-to-end.
A low-code automation platform can connect all systems and create a centralized location for your employees to access information, providing complete process visibility and orchestration. This provides real-time data to employees, not only giving them up-to-date status updates but also allows them to act with certainty when executing tasks that rely on important information.
Transparency not only benefits employees but also customers as they can easily get an overview of how their order is progressing through the supply chain. Traceability is now essential for customer satisfaction and a low-code automation platform can provide appropriate visibility.
3. Agility to respond to the unexpected
If 2020 taught us anything, it’s to expect the unexpected. For some organizations, the COVID pandemic meant scaling operations back and operating on a bare-bones basis. For others, it meant ramping up production and shipping capabilities to meet increased demand.
Using a low-code automation platform provided the benefit of adaptability to respond to unforeseen circumstances, which is built-in when you connect information and data across your organization.
“Low-code platforms let technology teams build enterprise applications substantially faster to meet rapidly changing business objectives,” reports BM Magazine.
“To respond quickly to business needs, using low-code platforms with an API-driven approach can help you to create auto-responsive apps for websites, tablets, and smartphones at the desired speed.”
4. Ensure regulations are always met
Diminishing risk and meeting compliance standards are particularly hard in a post-COVID world. Even more so for manufacturers and suppliers with global sites observing different regulations, ranging from health and safety to best business practices. Auditing is then required to prove these standards have been met.
Establishing business processes that are then executed, either in part or fully, by automation technology can help improve both risk management and the overall supply chain management. All stakeholders can ensure best practices are followed while integrating compliance for effective and risk-averse operations.
Documenting and automating workflows is the ideal way to ensure specific requirements are met, and that operations can be agile enough to evolve. Additionally, the real-time visibility brought to the supply chain by a low-code automation platform can help organizations to mitigate risk and ensure compliance by identifying issues as they arise and preventing them from escalating further.
Connectivity and Automation
Connectivity and automation bring the efficiency and agility that so many supply chain operators crave. If you would like to find out more about how a low-code platform can help transform your supply chain, download the ebook, The Essential Guide to Automation in Manufacturing.
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: Supply Chain 247
June 17, 2021
According to American Shipper:
Companies are unlikely to reshore their supply chains from Asia to North America between now and 2025 due to high production costs, concerns about the business climate in Mexico, and fears of the loss of access to close-by markets of billions of consumers, according to a report released Wednesday by the Economist Intelligence Unit (EIU), the business intelligence operation of London-Based The Economist Group.
The conclusion goes against the widely held belief that businesses selling into North American markets would shift their supply chains from Asia in an effort to counter the massive and continuing supply chain disruptions caused by the COVID-19 pandemic. However, the EIU report said that as pandemic-related concerns fade with more people getting vaccinated and countries reopening, the emphasis on business resiliency that was a key discussion point during 2020 and in the early part of 2021 will fade with it.
Andrew Viteritti, the EIU’s commerce and regulations lead, said in a Wednesday interview that most multinational firms with long-standing Asian operations will return to their pre-COVID-19 behavior of basing supply chain decisions on operational cost-effectiveness and maximum revenue opportunities rather than on the need to establish supply chain redundancies. This means, for the most part, a continued reliance on low-cost Asian production, Viteritti said.
Shifting production and distribution operations thousands of miles is a costly and complex investment, and relocating supply chains to North America would deprive businesses of cost-effective means of penetrating Asian markets with consumers possessing more disposable income than ever before, Viteritti said.
Production of critical supplies like personal protective equipment and medical supplies may be reshored for national security and public health reasons, Viteritti said. However, the notion that businesses will leave Asia in droves is far-fetched, he said. The return to the status quo is likely to become clear once the current supply chain disruptions, largely a byproduct of the pandemic, begin to dissipate and supply-demand scales return to balance, he said.
Ironically, the report was accompanied by a chart that projected Canada and the United States as the highest-performing countries through 2025 across seven metrics of international business. Canada and the U.S. had the highest and second-highest overall scores, respectively, among 11 countries analyzed by the EIU. China ranked eighth overall.
North America boasts a deeply integrated marketplace, a large free trade area, short-distance travel times and new opportunities for policy integration under the United States-Mexico-Canada Agreement (USMCA) on trade, Viteritti said. Still, those qualities won’t be enough to move the reshoring needle in a substantial way through mid-decade, he said.
In particular, worries about Mexico will prevent North America from becoming a realistic substitute for reliable and established Asian production, according to the report. With the exception of the category of “foreign trade and exchange controls” where it scored very high, Mexico scored poor to slightly above average across the other six EIU metrics. It ranked ninth overall among the 11 nations surveyed.
Mexico’s lowest reading came in the category of “political effectiveness,” a reflection of market concerns that Mexico is adopting a more protectionist stance toward international trade. The country also scored low in the category of “private enterprise policy,” which may reflect an adversarial approach to business in general. Mexico’s labor costs are lower than in the U.S. and Canada, though it is an open question as to whether that will be enough to encourage foreign investment in the continent.
Other concerns are the ongoing bilateral squabbles between the U.S. and Canada, and whether President Joe Biden’s push to encourage purchases of U.S.-made goods squares with foreign firms’ desire for truly free and open markets, the report said.
The EIU builds its intelligence model from a broad array of data sources. Created in 1946, it is one of the world’s most respected business intelligence operations.
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: American Shipper
June 17, 2021
According to The Wall Street Journal:
Global shipyards that were retrenching and consolidating in a faltering maritime market barely more than a year ago are now flush with new orders, boosted by efforts by shipping lines to add capacity to meet resurgent consumer demand in Western economies.
Orders for new container ships in the first five months of this year were nearly double the orders for all of both 2019 and 2020, according to London-based maritime data provider VesselsValue Ltd., with the biggest gains going to shipyards in South Korea and China.
The order tally has been so strong that some yards have stopped giving quotes for new vessels and are trying to renegotiate existing orders for more than 20 ships as the price of steel plates used to build vessels has doubled since the end of 2020, according to people involved in those deals.
The resurgence in ordering is being driven mainly by container ships as Western retailers such as Walmart Inc. and Amazon.com Inc. scramble to restock after a year of supply-chain disruptions from the coronavirus pandemic.
The rush to replenish depleted inventories, along with congestion at major ports in North America, Europe and Asia, has left cargo space hard to find and sent freight rates soaring. That has spurred big profit gains at operators like A.P. Moller-Maersk A/S, CMA CGM SA and Hapag-Lloyd AG , as well as triggered moves to renew and expand their fleets.
“They are making bucketloads of money and when that happens, owners invest in new ships,” said Peter Sand, chief shipping analyst at Denmark-based shipping trade body Bimco.
“Orders have doubled so far in 2021, nearly reaching the total tonnage ordered for all of last year. I won’t be surprised if there is another wave of ordering.”
The strong orders are in contrast with the past couple of years, when a long downturn in maritime trade left a dwindling backlog of orders at shipyards and forced some to consolidate.
Data from London-based shipping broker Braemar ACM Shipbroking show that in the first five months of this year, ships totaling capacity for about 2.6 million containers—measured in 20-foot equivalent units, a standard maritime measure—are on order, putting the business on track to surpass an annual record of 2.8 million containers’ worth of capacity ordered in all of 2007.
“It’s been our busiest period in years and it’s very much about container ships,” said a senior executive of South Korea’s Hyundai Heavy Industries Co. , the world’s biggest shipbuilding facility in terms of capacity. “The orders are mostly for bigger ships with all the extras to emit less, which is good for margins. We are almost out of slots to build new ships until late 2023.”
“I’ve never seen such demand in 20 years,” this executive said.
South Korea’s three big yards—Hyundai Heavy, Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. —account for more than a third of all shipbuilding orders for all types of vessels.
The other shipyards with big shares of global orders are China State Shipbuilding Corp., China Shipbuilding Industry Corp. and Japan’s Imabari Shipbuilding Co.
In the first five months of this year, 208 container ships worth $16.3 billion were added to the global order book, compared with 120 ships valued at $8.8 billion for all of last year and 114 vessels worth $6.9 billion in 2019, according to VesselsValue.
The South Korean shipyard executive said the boxship orders are mainly for vessels that can move around 14,500 containers and behemoths with a capacity of more than 20,000 boxes that are mainly deployed on Asia-Europe trade lanes.
An executive at one of China’s big state shipbuilders said owners of roughly two dozen ships are being asked to pay more if they want their vessels delivered because of rising steel prices.
“If the yards adhere to the original contract, they will be delivering the ships at a loss,” said this executive. “A big cargo ship needs around 25,000 to 30,000 tons of steel and that’s an additional $15 million on average from last year in terms of cost. There are at least 22 ships on order that are being renegotiated at big Asian yards.”
Steel can account for up to 30% of a vessel’s cost, depending on the type of ship. Tankers and dry-bulk movers need more steel than container ships. A very large crude carrier now costs around $100 million, up from $85 million last October.
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: The Wall Street Journal
June 9, 2021
According to SupplyChain:
1. IDENTIFY RISK
It is very beneficial for project managers or risk managers to carry out assessments of risk regularly. The events of Covid-19 have highlighted some key issues that supply chain leaders should become aware of as they plan for the future. There are various risks along the supply chain, especially for large logistics companies. Some of these include:
- Health and safety risks.
- Crime incidents involving transport vehicles.
- Regulation changes.
- Cybersecurity threats.
2. ACQUIRING SKILLS
As digital transformation becomes a critical focus for supply chains, companies aim to acquire more skills to manage sophisticated supply chain systems. Predictive operations systems are becoming more popular as the development of AI and machine learning manages menial tasks, which allows personnel to focus on the wider operations and procurement tasks. However, managing these systems requires new skills like any new system.
3. USING BIG DATA
Data analytics and business intelligence is a big trend in 2021. Many supply chains are moving towards big data usage, which is definitely important for keeping up with the industry. But only around half of supply chains are using technology to their advantage, despite them understanding its long-term benefits.
4. COMPETITION AND FINANCIAL MANAGEMENT
Competition in the supply chain involves maintaining supplier relationships, understanding the need for fast operations and providing personnel with the equipment and skills to carry out their jobs.
A particularly attractive financial strategy for supply chain companies in 2021 is cost reduction. As the use of big data widens, businesses can focus their attention on reducing production costs and tackling much-needed price negotiations.
5. COLLABORATION
Collaboration happens throughout every stage of the supply chain process, from sourcing and negotiations to product or service delivery. Providing the tools for personnel to collaborate will streamline each process. The Industrial Internet of Things (IIoT) is an excellent example of how a digital ecosystem can be used to monitor and collaborate in manufacturing and can even be used to manage robotics
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At LFS, we provide tailor-made logistics solutions to manufacturers, distributors, importers, and exporters across the United States, Canada, and Mexico. We are a 3PL company lead by a team of experts who will help you evolve your logistics through advanced technological platforms, providing you great efficiency, cost savings, and delivery speed in every shipment.
LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin, Facebook, and Twitter.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
By: SupplyChain
June 9, 2021
According to Forbes:
Last week I bought t-shirts and shoes from a well-known online fashion store in Europe. The very next day, I had three different tracking codes for my parcels which would be delivered on the same day, at different times. From a consumer perspective, it is impressive to see how fast big supply chains work. But from a sustainable logistics perspective, it seems more like our world is drowning in a sea of packaging waste and smothering the carbon emissions for the cost of rapid delivery.
Does it really have to be like this?
The answer is definitely not. Finding cost-effective sustainable solutions today is much easier for businesses compared to the past. Especially in the post-COVID-19 world where society became more conscious about the responsibility to the environment, we hear everyday news about corporations stepping in the game of being carbon neutral from design to operate. In this alignment, achieving sustainable logistics operations should and must not be an exception.
What practices can businesses apply to increase sustainability within logistics operations? Here are five tips to consider.
1. Harness data for end-to-end visibility
I don’t know if it is just me but whenever leave home for 5 minutes, the delivery guy will turn up in the same time slot! Are they hiding around the corner waiting for me to leave? Recently, I discovered one logistic provider that enables me to live-track the truck which carries my parcel and gives me the chance to change the delivery time up until the last hour. This helps the driver to plan the route to simultaneously lower last-mile carbon footprint, and eliminate a wasted trip, not to mention putting less stress on the customer.
Placing the data at the heart of supply chain operations enables businesses to work more efficiently and effectively. Improving freight collaboration, material, and goods tracking with an open logistics ecosystem connects business partners to manage logistics operations better by monitoring the transport methods in real-time and identifying the best alternatives. Also, businesses can eliminate the risk of empty milages by loading vehicles to optimum capacity, which is both environmental and profit-friendly.
2. Get closer to the customer with pop-up warehouses
Think about a quick win-win-win solution for businesses, consumers, and the environment at the same time. The answer is pop-up warehouses.
Last-mile delivery emissions associated with e-commerce are increasing, and logistics providers are under pressure to find ways to reduce the carbon footprint, which is one of the key measurements of truly sustainable supply chain logistics.
Setting up a pop-up warehouse brings the businesses closer to customers; which means it is an excellent way to reduce last-mile emissions. It helps businesses reduce delivery time and cost; as well as gives more flexibility to mitigate supply chain disruptions.
You can not only using the warehouses for storing inventory close to the demand but also combine on-site retail and pick-up point to cut down the shipping cost completely. Plus, considering the fact that the cost of renting a small warehouse is less than the shipping cost from centrally located facilities, it is a great way for businesses to optimize the supply chain operations while helping the environment.
3. Use alternative vehicle or fuel technologies
Looking out of my window, every day I see delivery vans driving to my neighborhood. Most of those delivery trucks use diesel as a fuel source since it is an affordable option. Not that gas engines are good for the environment, but compared to gas engines, diesel trucks increase the carbon footprint by exhausting %13 more CO2.
Using lower carbon fuels such as biofuel instead of fossil fuels, replacing the old trucks with eco-friendly vehicles would be the measures taken toward ecological and social sustainability goals. There is a wide range of eco-friendly solutions in the market which challenges traditional ways. Sea shipping, eco-friendly train solutions, hybrid or electric vehicles are available green alternatives.
Also, the emissions associated with the distribution facilities can be eliminated via clean energy-powered electricity, solar systems, and water recycling systems. One of the vertical farming companies, &ever, is helping the world minimizing the carbon footprint while producing sustainable and soil-free food. By changing the traditional way of farming, they use 85% less water and can grow 18 cycles a year instead of having 7 cycles a year. Protecting the planet and feeding the world in the most sustainable way possible can be the most profitable path if you take smart steps.
4. Optimize on-site resources, planning, and execution
Have you ever wondered how those huge containers are being carried and transported in between rail, ship, and trucks? What kind of truck is going to carry those pallets or boxes? How those containers will be moving to the next step and transported to the yard?
This is the point businesses use yard logistics to run smooth logistics operations with higher throughput and minimal environmental impact.
Yard logistics is part of the supply chain execution platform which businesses can use to strengthen the bridge between warehouse and transportation management. Efficiently planning the steps and activities in the yard helps to avoid long breaks or processing gaps in between the logistics operations; results in eliminating the waste, transport, and labor cost, and of course carbon emissions.
5. Utilize IoT for simple improvements
Did you know that driving on the highway at 80 kilometers per hour can save about 10 % of fuel? Eco-driving education is another significant way to reduce fuel consumption. It also minimizes the risk of possible damages to the driver, overall vessel, and products in it. As a part of the education, IoT and sensors can be used to monitor and collect the data on speed, fuel consumption, and breaking behavior of drivers.
Also, keeping tires at optimal pressure is an effective tool for keeping fuel consumption under control. With sensors mounted to the rim of the wheel, drivers can monitor the current tire pressure on the display. Using tire pressure sensors helps fuel consumption by up to 12 % at lower speeds, as well as extending the tire lifetime.
There are many ways to make businesses sustainable from design to operate: using sustainable materials, reducing waste, adopting clean energy resources, investing in eco-friendly technologies, and more. Implementing environmental friendly logistic solutions is one of the important building blocks of creating a sustainable supply chain in a journey to become carbon neutral.
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By: Forbes
June 9, 2021
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By: LFS Marketing
June 3, 2021
According to Freightwaves:
Staying on the leading edge of technology requires time and capital investments, along with innovation and a corporate culture that values iteration.
We recently caught up with Jim French, chief technology officer at Transplace, to get an inside view on high-impact trends in logistics tech. He says Transplace has been increasing its technology investments 25% each year for the past four years.
“We take innovation and invention seriously and encourage our employees to push the envelope on what’s possible with our advanced technologies,” French said.
With all of the logistics and supply chain advancements now available, it can be confusing for shippers to identify high-impact technology investments that will help them stay competitive in 2021 and beyond. French offers three areas of logistics tech to consider.
Data-driven decision-making
Investing in a robust transportation management system (TMS) is one of the most important decisions for a shipper. A cloud-based TMS provides real-time clarity of transportation networks, data insights, dashboards, reporting and analytics. Having the right TMS results in 6-10% transportation cost savings within six to 12 months.1
“I realize that a TMS is not new tech,” said French. “In fact, the hottest innovations in logistics and supply chain technologies right now may not be the newest, but it’s tech that continues to get sharpened and more sophisticated. Through iteration and continuous improvements, we are refining our technology platforms and processes to provide a competitive advantage for our clients.”
For shippers with a legacy TMS, a new logistics solutions platform provides shippers access to emerging technology like real-time visibility, service prediction, service performance benchmarking, network collaboration and optimization and more. These stand-alone offerings are a quick, cost-effective way for shippers to take advantage of Transplace’s leading-edge logistics technology, intelligence and visibility to optimize supply chain operations in concert with their current TMS infrastructure.
With the democratization of data, logistics technology specialists are able to minimize risks and spot opportunities to save costs to help shippers make smarter decisions for better business outcomes. TMS apps are making the dashboards and analytics accessible from any device anywhere in the world.
French advises shippers, “If you haven’t explored the latest upgrades to TMS platforms, make a point of finding out what’s new. For example, Transplace is leading the TMS industry by enabling ‘instant price’ quotes from multiple providers, while still allowing carriers without this capability to directly interact through the more traditional carrier portal for spot shipments.”
Contingency planning and business continuity
Expect logistics and transportation to continue experiencing volatility in 2021. In addition, retailers are demanding more visibility into the entire supply chain to avoid empty shelves. Invest in technology that boosts contingency planning and business continuity.
Artificial Intelligence (AI) and machine learning (ML) are supporting intelligent inventory demand forecasting, production scheduling and predictive analytics. Through AI and ML, a task that could take humans days or weeks to unravel can be completed in mere minutes. More and more logistics execution will be automated, saving time and increasing efficiencies within the supply chain.
For example, Transplace upgraded its tracking portal and control tower as a central source for managing dynamic and complex planning. The display shows hot spots in addition to weather and traffic incidents to help shippers avoid disruptions in their transportation network. Combined with powerful integrations for real-time location and status updates, AI can accurately predict problems before they occur, allowing for mitigation to minimize impact.
Near real-time data processing continues to advance through IoT devices, APIs and potentially blockchain shared ledgers. The newest tech surpasses geo-location visibility, allowing logistics plans to be adjusted to avoid delays and disruptions by the superior accuracy and timeliness of the data. The smarter, automated supply chain analytics will minimize risks, identify root causes, improve procurement performance and accelerate forecasting. With automated data processing and predictive analytics, workstreams will be more aligned across supply chain and transportation departments, as well as logistics partners.
Multi-shipper collaborations
Increased collaboration among shippers, carriers and the logistics and transportation communities will enhance agility. The newest technologies upgrade the usual digital brokerage relationships. Now supply chain professionals can improve capacity and cost management by taking advantage of multi-shipper collaborations, planned and dynamic continuous moves, LTL pools and other strategic carrier partnerships.
To be responsive to rapidly changing circumstances, Transplace developed its Network Services to support shippers with capacity challenges and demands. Network Services delivers significant advancements in multi-shipper collaborations leveraging Transplace’s $11 billion in freight under management. Through AI, ML and industry-leading technology, Network Services identifies optimization opportunities that generate significant transportation cost savings for both the shipper and carrier communities.
Transplace is also launching a set of APIs to connect carriers with its Freight Allocation Module (FAM). This is an auction and bid technology within Transplace’s logistics platform, allowing carriers to bid on lanes. These APIs will significantly shorten auction timing without compromising the ability to find a true market price in near real time. Accessible through Transplace’s API Portal, the solution is an easy, low-cost way for shippers and carriers to integrate with Transplace.
French concludes, “Shippers should partner with supply chain experts who will tailor their solutions to meet their specific needs. The technology must be customizable and flexible to changing circumstances and business evolution.”
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By: Freightwaves
June 1, 2021
According to Supply Chain Dive:
The energy inside of stores in March 2020 was rushed, strained and infused with the weighty gaze of shoppers and workers that asked, "Should we even be here? Are we going to be OK?" At that point, a lot was up in the air. Sports, shopping, supply chains and society at large were changing — adapting — to the coronavirus pandemic.
Soon, stores temporarily shuttered as the result of lockdowns. And consumers flocked to digital buying channels.
E-commerce sales boom in pandemic
E-commerce retail sales, % of total sales
Chart: Matt Leonard / Supply Chain Dive Source: U.S. Census Bureau Created with Datawrapper
When stores closed and customers moved online, retailers looked for a way to get in-store inventory moving. Fulfilling online sales from retail locations was an obvious solution. And it was one that some companies were better positioned to tackle. Target, for example, has been perfecting its ship-from-store model for years.
"Ship from store, depending on the retailer, can be incredibly efficient," said Moody's Retail Analyst Charlie O'Shea. "And in Target's case, it is because they so locally curate their stores."
Retailers ship from store to move inventory
Count of annual or quarterly reports mentioning "ship from store"
Includes filings up until March 19, 2021
Chart: Matt Leonard / Supply Chain Dive Source: Securities and Exchange Commission Created with Datawrapper
Other retailers that largely rely on brick-and-mortar sales had to stand up infrastructure quickly to be able to handle e-commerce and ship from store.
"We expedited the infrastructure to be able to buy online and ship from store in order to supplement e-commerce fulfillment while leveraging labor that we would already have available in retail stores after they have reopened," Build-A-Bear CEO Sharon Price John said on the company's earnings call in June.
The effort might not have been enough to make up for Build-A-Bear's store network: its sales fell 23% YoY to $249.2 million for the full year 2020. But e-commerce demand was up 133% YoY.
"We were able to support this growth through our efforts of improving throughput in our warehouse, accelerating omnichannel initiatives in ... our last-mile delivery, including buy online pick up in store or ship from store programs," CFO Voin Todorovic said this month.
Whether this strategy will stick around after the pandemic is up for debate.
"I think every retail analyst right now is kind of scratching our head trying to figure out what's next," O'Shea said, adding that no one knows what normal will look like going forward.
Retailers move to the curb
Count of annual or quarterly reports mentioning "curbside pickup"
Includes filings up until March 19, 2021
Chart: Matt Leonard / Supply Chain Dive Source: Securities and Exchange Commission Created with Datawrapper
The other option for shuttered retailers was to get customers to pick up at the curb. This simplifies the supply chain for the retailer compared to ship from store — and is cheaper for the retailer.
Bed Bath & Beyond, Dick's Sporting Goods and Hudson's Bay were among the retailers utilizing the curb as a result of the pandemic. But there are questions about how companies will shift and improve these offerings going forward.
"I think ... retailers are going to focus on this sort of whole curbside thing, trying to make that experience not just painless, but actually enjoyable," said Dave Gill, vice president of insights and analytics at Rakuten Intelligence.
More shoppers choose to pick up orders
Order for pickup as % of all buyers
Chart: Matt Leonard / Supply Chain Dive Source: Rakuten Intelligence Created with Datawrapper
Retails experienced demand for these omnichannel offerings. Grocers have highlighted the success of their curbside programs months into the pandemic.
"More than 50% of our BOPIC orders for the fourth quarter were delivered curbside," BJ's Wholesale Club CEO Lee Delaney said on the company's earnings call this month, referring to the retailer's buy-online-pickup-in-club option.
While retailers have seen benefits from the e-commerce pivot, it wasn't easy. Amazon, which had, arguably, the most mature e-commerce supply chain, struggled to keep up with demand in the early days of the pandemic, according to figures from Rakuten. (It is worth noting that these figures are an average that includes marketplace sellers for which Amazon doesn't control the supply chain.)
Amazon's network struggles to keep up
Click to ship and click to door, measured in days
The increased ship and delivery times highlight some of the labor challenges Amazon had in the early days, Gill said. The company did eventually bring on hundreds of thousands of workers to bolster its ranks.
"People that work in Amazon warehouses got sick, and went home and called in sick," Gill said. "So they actually had sort of a compounded problem in that they're trying to fulfill all this demand and their workforce, which is gigantic, was pretty hard hit by all that stuff."
Amazon's orders start showing up late
Percentage of Amazon orders arriving late
Chart: Matt Leonard /Supply Chain Dive Source: Rakuten Intelligence Created with Datawrapper
The slowdown in Amazon's network resulted in an uptick in late shipments, but the retailer has seen these figures largely recover. Some areas have already seen a return of one-day shipping.
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By: Supply Chain Dive
June 1, 2021
According to Freightwaves:
The multibillion-dollar North American automotive sector, which includes one of the largest components of U.S.-Mexico trade, could dramatically change as many automakers make a substantial shift to manufacturing electric vehicles.
On April 30, General Motors (NYSE: GM) became the first U.S. automaker to announce it would build electric vehicles in Mexico. GM said it would invest $1 billion in its factory in Ramos Arizpe to produce electric cars.
As U.S. automakers pivot into the electric, autonomous vehicle era, cross-border operators say Mexico is more than ready to seize the moment.
“GM’s announcement is really exciting news for Mexico because it’s one of the very first electrical vehicles that’s going to be made in Mexico,” said Jordan DeWart, managing director at Redwood Mexico based in Laredo, Texas. Redwood Mexico is part of Redwood Logistics, headquartered in Chicago.
GM’s facility in Ramos Arizpe currently makes the Chevrolet Blazer and Equinox SUVs, along with engines and transmissions. GM aims to manufacture two electric Chevrolet SUVs in Ramos Arizpe starting in 2023, according to Reuters.
GM said it will have 30 all-electric vehicles by 2025, including the Chevrolet Bolt and Silverado electric pickup truck, Cadillac Lyriq EV SUV, GMC Hummer EV SUV and Hummer EV pickup, and the Cruise Origin.
The Ramos Arizpe plant will be GM’s fifth electric vehicle factory, joining plants in Spring Hill, Tennessee; Factory ZERO in Detroit and Hamtramck, Michigan; Orion Assembly in Orion Township, Michigan; and CAMI in Ingersoll, Ontario.
The Ramos Arizpe factory employs 5,600 workers and could expand its workforce, according to Francisco Garza, CEO of GM Mexico.
“We trust that the necessary economic conditions will be met so that eventually the complex can grow the workforce one more shift in some operations,” Garza said in a statement.
In addition to building electric vehicles in Mexico, GM plans to convert its entire portfolio of vehicles to an all-electric platform by 2035.
“GM’s announcement will bring a lot of new suppliers to that marketplace that haven’t been there before,” DeWart said. “Suppliers typically set up in Asia, in China, obviously, and even some in the U.S., but they will definitely come to Mexico to set up plants.”
Deepak Chhugani, founder and CEO of Nuvocargo, said GM’s announcement that it will build electric cars in Mexico shows that the cross-border market is only going to grow. Nuvocargo is a digital logistics platform for cross-border trade between the U.S. and Mexico.
“We think it’s proof of the thesis behind Nuvocargo, which is that bigger and bigger firms in the U.S. are finding that Mexico is a very attractive place to manufacture,” Chhugani said. “Anywhere in Mexico, whenever there are tier one companies from the U.S. setting up manufacturing, that’s attractive for carriers, because that means that they’re typically going to have larger and more predictable volumes.”
In Mexico, Ford Motor Co. (NYSE: F) recently began producing the Mustang Mach-E at the company’s assembly plant in Cuautitlan, just north of Mexico City. The Mach-E is Ford’s first all-electric crossover vehicle.
Ford also announced in March two additional midsize electric crossovers — one Ford and one Lincoln (Ford’s luxury vehicle line) — will be built in the Cuautitlan plant.
Joshua Rubin, vice president of business development at Javid LLC, said more electric vehicle production in Mexico could lead to increased cross-border freight. Javid is a Nogales, Mexico-based firm that helps facilitate foreign manufacturers that want to move operations to Mexico.
“As GM grows and needs additional suppliers, there is a good chance that we are going to see more companies looking to move into Mexico to nearshore their operation closer to GM’s,” Rubin said.
US-Mexico auto industry is big business
In 2020, the U.S. automotive industry accounted for about $630 billion, 3% of gross domestic product (GDP), according to a report, “State of the U.S. Automotive Industry,” by the American Automotive Policy Council (AAPC).
“Automakers and their suppliers are America’s largest manufacturing sector,” according to AAPC’s report. “They are also America’s largest exporters. Over the past 10 years, automakers have exported more than $1.1 trillion in vehicles and parts — nearly $36 billion more than the next largest exporter (aerospace).”
The U.S. automotive industry — which includes automakers and their suppliers, as well as vehicle dealerships and auto parts retailers — employs more than 4.1 million people, according to AAPC.
Mexico’s automotive industry accounted for about $32 billion (3%) of the country’s GDP in 2020, according to the Mexican Automotive Industry Association (AMIA). Mexico is also the world’s sixth-largest producer of cars and light trucks and fourth-largest exporter of vehicles.
The Mexican automotive industry employs around 900,000 people, according to Mexico’s National Institute of Statistics and Geography.
Roy Austin, business development manager for The ILS Co., said the U.S. and Mexican automotive industries have been linked for decades. The ILS Co., based in Tucson, Arizona, is a third-party logistics provider serving the U.S. and Mexico.
“GM, Ford and other automakers have already been in Mexico for over 50 to 60 years or more,” Austin said. “They have enjoyed a relationship with Mexico to great success.”
Ford has been building cars in Mexico since 1925, when it opened a plant in Mexico City to manufacture Model A cars, which replaced the Model T in 1928. GM opened its first plant in Mexico in 1938.
Other carmakers, like Toyota, Nissan and Volkswagen, began opening factories in Mexico during the 1950s and 1960s.
Mexico currently has 26 automotive plants across the country, including plants belonging to GM, Ford, FCA U.S., Toyota, Volkswagen, Honda, Nissan, Mazda, BMW and BAIC Group, according to AMIA. There are also more than 600 tier 1, 2 and 3 auto suppliers/manufacturers in Mexico.
Austin said since U.S. automakers already have long ties with Mexico, more suppliers and supply chains should be moving south of the border.
“I think the trend is only going to continue to grow,” Austin said. “The traffic and the complications with having shipments, vessels on the sea, this is a world that demands things yesterday. The only way to shorten the times is to have cars built and assembled closer to the U.S.”
Jorge Canavati, principal at J. Canavati & Co., said Mexico also has the engineers and qualified workforce to compete with anyone. J. Canavati & Co. is a San Antonio-based company that provides international logistics and trade consulting.
“This is a good move for GM and speaks volumes of the high caliber of the workforce and logistics in Mexico,” said Canavati, who is also chairman of the Global Chamber of Commerce, San Antonio Chapter.
“Mexico has vast experience in advanced manufacturing, which includes aerospace and of course automotive. There are very developed automotive and aerospace clusters throughout the country. The supply chain and logistics platforms, which already exist, play a key role in the manufacture and sourcing in/from Mexico,” Canavati said.
Boost in cross-border trucking and freight
While DeWart is located in Laredo now, he also worked for over 20 years in automotive logistics in the Bajío region of central Mexico in the Mexican state of Guanajuato.
Guanajuato is home to one of Mexico’s largest automotive manufacturer clusters, representing 11% of the national production of auto parts, behind only the states of Coahuila (16.7%) and Chihuahua (12.4%), according to Mexico’s National Autoparts Industry Association.
“When the big three Japanese automakers came in there — Honda, Mazda, Toyota — we saw just a slew of new suppliers pour into Mexico from all over Asia that had not traditionally been in that marketplace,” DeWart said.
GM’s Ramos Arizpe plant is located in the state of Coahuila, about 180 miles south of the U.S.-Mexico border crossing in Laredo.
“I think off the start, you’ll see GM get its supplies from factories around the world. But Mexico is so competitive to set up, that’s something that can be done so quickly now that they’ll definitely be setting up their own plants to supply the GM plant,” DeWart said.
Laredo and Otay Mesa, California, just south of San Diego, are the two busiest U.S.-Mexico border crossings for imports of assembled vehicles and auto parts. According to FreightWaves SONAR platform, freight volumes in Laredo (OTVI.LRD) and San Diego (OTVI.SAN) are up significantly compared to last year.
(Chart: FreightWaves SONAR. To learn more about FreightWaves SONAR, click here.)
(Chart: FreightWaves SONAR. To learn more about FreightWaves SONAR, click here.)
Rahul Oltikar, chief operating officer of Laredo-based Jamco Group, said GM wouldn’t be investing $1 billion in Mexico without already talking to automotive suppliers that will follow GM.
“I think when you have people like GM investing a billion dollars, they’re doing that because they already know that the infrastructure is going to follow. Just as tier 1, 2, 3, 4 manufacturing followed suit after your larger OEMs moved down there 25 years to 30 years ago, the same thing is going to happen,” Oltikar said.
Oltikar said Mexico has the infrastructure for more electric car factories. He pointed out that China-based Ganfeng Lithium, one of the world’s top producers of the lithium used in electric vehicle batteries, owns and operates lithium mines in Sonora, Mexico. Ganfeng’s customers include Tesla,Volkswagen and BMW.
“You have Chinese manufacturers already making investments on battery recycling and battery manufacturing in Sonora, Mexico,” Oltikar said.
Oltikar also said that Tesla CEO Elon Musk chose Austin, Texas, as the site for the company’s newest electric vehicle factory for several reasons, one of the main ones being its proximity to Mexico.
“You know, Elon Musk isn’t just moving down here [to Texas] just to take advantage of the tax situation in Texas versus California, he’s moving down here to be closer to Mexico,” Oltikar said.
In July, Musk announced that Tesla (NASDAQ: TSLA) will build its newest gigafactory in Austin. The factory, which is estimated to cost more than $1 billion, will build Tesla’s new electric Cybertruck pickup, as well as semi-trucks.
“Once you see Tesla, GM and Ford and everybody kind of moving in this direction, momentum will shift and there’ll be more and more infrastructure in Mexico, which has done a really good job of being able to adapt,” Oltikar said. “I think in the next 24 to 36 months, we’ll be talking about a very different game, especially as suddenly some of these dollars start flowing into Mexico.”
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By: Freightwaves
May 26, 2021
According to Supply Chain Dive:
Material shortages are curtailing construction's recovery before it's even gotten started.
While contractors are still optimistic about projects coming back online in the second half of 2021, and the Architectural Billings Index, a key leading indicator of demand, notched up its first two-month win streak since the beginning of the pandemic, one leading construction economist has now pushed out recovery until at least next year.
"I think the nonresidential construction market, as measured by spending and probably headcount, will stay flat," said Ken Simonson, chief economist for the Associated General Contractors of America, during a webinar this month. "It will be 2022 before I expect a significant increase."
He cited spiking material prices and shortages, continued supply chain bottlenecks and hesitancy among owners to build in the current environment as reasons why.
First-quarter quagmire
Material costs and supply chain issues are taking the wheels off the recovery, even before they get rolling. Q1 2021 results have already started to paint a bleak picture.
According to Dodge Data & Analytics, supply chain delays took a heavy toll on civil contractors in the first quarter, with nearly three quarters experiencing serious issues getting materials to projects. Moreover, more than three quarters of civil contractors are now concerned with cost increases for construction materials over the next six months, whereas about half had similar concerns in late 2020.
US contractors' concern over the cost of construction materials has grown
Respondents to recent Dodge Data & Analytics surveys have expressed growing worries about the cost of construction materials.
Those results caused Dodge, which has been tracking construction data for more than 100 years, to question how quickly recovery will come.
"While it is unclear whether this would impact the large infrastructure investments currently recommended by the Biden administration, they may impact the degree to which the civil construction sector can successfully bounce back in the first half of 2021," the Dodge report read.
Leveraging technology
Contractors are taking various approaches to keep projects moving forward in the face of these challenges.
Some are scaling back the initial phases, to make use of the equipment and materials they can get. Others are changing the sequencing of their builds to put the materials they already have in place first. Still, some are using technology to track what supplies they have where to plan accordingly.
Take Matt Gramblicka at Graham Construction & Engineering, based in Calgary, Ontario in Canada, which focuses on commercial construction throughout the U.S. and Canada. As vice president of information technology and enterprise applications, Gramblicka has been trying to leverage technology to stay one step ahead of supply chain and material challenges.
Where projects had been booming in Alberta in Canada pre-pandemic, he's seen a shift to Seattle and Ontario, simultaneously, since then. That has caused him to have to pivot to get more equipment and materials in those markets from the suppliers who have them.
"It's really about having visibility into where that market shift is, and making sure that we have the right connections with people to actually get the supply in the first place," Gramblicka said.
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By: Supply Chain Dive
May 17, 2021
According to SupplychainDive:
During the pandemic, when many consumers opted to stay clear of physical stores, the importance of having a loyal customer base grew. And so, keeping customers engaged through rewards and highly personalized experiences was top of mind for many retailers.
Keeping loyal customers meant retailers also had to invest in tools that made their supply chain more efficient and their delivery faster while also grappling with sustainability. Retailers looked to fund micro-fulfillment centers and on-demand delivery methods in recent months.
Target has been running trials on a faster delivery method using its sortation center in Minneapolis. Walmart recently invested in Cruise — an autonomous vehicle startup — to help the retailer develop a low-cost last-mile delivery ecosystem. Meanwhile, grocery store Albertsons was testing an automated micro-fulfillment technology in late March.
"With more e-commerce fundamentals in place, retailers and brands are turning their attention to tools to manage online content and reach consumers more efficiently across digital platforms," the report said.
Tech investments in retail accelerated in mid-2020 during the pandemic, and the report shows that it doesn't appear to be slowing down this year as in-store traffic returns.
In fact, the report predicts executives will integrate more technology to improve the shopping experience throughout the consumer journey on both online and in-store channels.
The number of times retailers mentioned the word "omnichannel" during earnings calls increased from less than 100 in the first quarter of 2016 to over 400 for the same period in 2021.
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By: SupplyChainDive
May 17, 2021
According to Container News:
There are signs of a reduction in the backlog of ships waiting to get into major US ports, but chronic congestion is moving inland, threatening further headaches for carriers seeking to redress the global equipment imbalance, said online freight forwarder Flexport.
While the number of vessels waiting to dock in Los Angeles/Long Beach has dropped below 20 for five consecutive days, getting boxes in and out of the terminals is becoming one of the key bottlenecks according to Flexport’s trucking procurement manager, Adam Parish.
“Terminals have longer waiting times and this translates into fewer boxes being moved a day. Drivers used to be able to move seven-eight boxes a day. This is now maybe two-three and in some ports like Los Angeles drivers might move one or two in a typical day,” he said.
Parish said drayage carriers were reporting a 40% decrease in productivity on the US east coast ports. Drayage rates have spiked as it becomes more difficult to get boxes in and out of the country’s leading terminals.
“Ocean imports are up 15-20% and the US just doesn’t have the infrastructure to operate with that sort of growth,” said Parish.
As well as delays getting boxes into and out of the terminals, there is a widespread shortage of chassis with an average street dwell time of 17 days inland causing “chronic issues” at the ports and contributing to the ongoing issue of mounting demurrage fees being billed to shippers.
"Issues around unreasonable detention and demurrage continue to plague the trucking and shipping community,” said Weston LaBar, CEO of the Harbor Truckers Association. “Many of the challenges we have experienced for the last year continue to be an issue today and the bills keep piling up," he said. Last year delays in the ports of Los Angeles/Long Beach and New York/New Jersey cost shippers and freight forwarders US$150 million in demurrage fees.
Delays are expected to persist throughout May as the consequences of the Suez shutdown continue to be felt throughout the supply chain. “This level of delay means trucking equipment is as tight as ocean equipment. It’s getting close to gridlock,” said Parish.
Flexport’s senior associate for trade lane management, Rohit Kundurthi, said even the most optimistic scenario would see the tight supply being felt until Golden Week in October. Flexport is preparing for a “Tsunami” of cargo due to hit US ports in the next month.
The blockage of the Suez Canal resulted in liner capacity to US east coast and west coast ports being reduced by 16% to Los Angeles/Long Beach, 23% to Seattle and Vancouver, and 20% on the US east coast ports, but there has been no slowdown in demand from US consumers leading to a backlog of cargoes that needs to be delivered next month, said Kundurthi.
He added there were 3 million TEU of import cargoes moving to the US on all the main trade lanes in March, up 80% year-on-year. Imports from Asia to the US hit 1.7m TEU in the same month, compared to 1m TEU in March 2020.
The surge in volumes was placing strain on all inland transport modes as desperate shippers explored all options to get cargoes to their final destinations. Severe congestion and bottlenecks were being felt in supply chains to all the major cities, said Parish. “Rail transit times had increased 300%-400% in the last three-four weeks.”
Joanna Zhang, Flexport’s manager for Ocean Trade Lane Management transpacific eastbound said that there was little that can be done to alleviate the problems being felt for shippers other than tightening up on forecasting of volumes - to become a more reliable client for shipping lines - exploring the option of transloading containers between the different intermodal options and being open to using less than container loads as a way to ship urgent cargoes to destination.
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By: Container News
May 3, 2021
Today, we have been recognized as part of The Financial Times list of The Americas’ Fastest Growing Companies 2021. This prestigious award is presented by The Financial Times and Statista Inc., the world-leading statistics portal and industry ranking provider.
The Americas’ Fastest Growing Companies is comprised of the enterprises that contribute most heavily to economic growth, which was announced today and can currently be viewed on the FT website.
Out of the millions of active companies in North and South America, only 500 firms were awarded in the list, and we are ecstatic to be recognized as one of FT’s inaugural list of The Americas’ Fastest Growing Companies 2021.
We want to congratulate our team and thank the growing number of customer who trust us with their logistics.
THANK YOU!.
LFS.
By: LFS Marketing
April 13, 2021
According to JOC.com:
The cost differential between intermodal rail and truckload shipping is greater than at any point since 2014, but shippers have largely been unable to capitalize on any potential savings because of inconsistent rail capacity in the first quarter, according to intermodal marketing company (IMC) executives who spoke to JOC.com.
Shortages of containers, chassis, terminal appointments, and draymen limited freight rail capacity in major intermodal markets such as Chicago, Dallas, Memphis, Jacksonville, and Kansas City at various points throughout the first three months of 2021. If it weren’t for those labor and equipment issues, an average shipper could have saved 33 percent on contract intermodal business and 28 percent on the spot market last month compared with trucking, according to the latest reading of the JOC Intermodal Savings Index.
Realizing those savings, however, requires patience. Rail dwell times on Norfolk Southern Railway have risen to between 12 and 24 days at the Port of New York and New Jersey, according to a chemical shipper. Railroads have reported a 32 percent increase year over year in the number of intermodal cars idling for more than 48 hours in the last six weeks compared with the same period in 2020, according to weekly filings with the US Surface Transportation Board.
NS, for example, reported 113 intermodal cars did not move for more than 48 hours between March and the second week of April 2020. This year, NS said 1,296 cars were idle during the same six-week period. Union Pacific Railroad reported an increase from 284 cars last year to 860 this year. BNSF Railway, meanwhile, had 5,293 cars idle during the period, 66 fewer cars than in the previous year.
At the same time, domestic intermodal volume is up 7.7 percent between June 2020 and February 2021 compared with the same nine months a year prior, according to the Intermodal Association of North America. Until February, domestic intermodal volume had risen on a year-over-year basis for eight consecutive months, and demand is likely to return to positive growth again in March thanks to more favorable comparisons during COVID-19 lockdowns that began in March 2020.
The railroads are in a difficult position; metering how many containers move per day causes boxes to idle longer in busier times, but running more trains could exacerbate the already overtaxed chassis and drayage network, the IMCs acknowledged.
Shippers that don’t want to wait have turned to longhaul drayage or one-way truckload, paying record-high spot market rates that are above $10,000 in some cases.
“We have so many potential opportunities based on low prices today, but it’s a struggle to find the capacity. We are consistently inconsistent on service,” said Rick LaGore, CEO of InTek Freight and Logistics.
Containers, appointments, and drivers are hard to get
Chad Schilleman, intermodal specialist with Watco Companies, an IMC, said draymen, chassis providers, IMCs, and railroads are doing the best they can in a tough situation.
“We're seeing waves of available appointments, container availability, and dray power. It's just going in waves across the US, so some weeks you can find capacity, and the next week, nothing,” he said.
UP and CSX Transportation require appointments to bring in containers, but two IMC executives based on the West Coast who did not want to be identified said they were having difficulty securing appointments in Portland, Oregon; Lathrop, California; Chicago, and Seattle.
CSX told JOC.com in January its reservation system is designed to “align terminal capacity with train capacity” and “to maintain a fluid network,” which is why appointments may be unavaiiable for a few days on high-volume lanes.
Finding railroad-owned 53-foot containers — known as UMAX and EMP boxes — has also been challenging, according to the two West Coast IMCs. Because it’s difficult to get an empty UMAX or EMP container directly from the railroad in Chicago, Los Angeles, Lathrop, Portland, and Seattle, both said they are street turning containers, a cumbersome and inefficient process. Street turning refers to reusing an empty container of one shipper for another shipper, rather than returning the box to the railroad, which often requires the IMC to arrange for a second truck to move the container from the first shipper to the second.
Even for shippers able to secure a container and an appointment, their cargo can’t get to the railyard without a drayage driver. Finding those drivers has become far more difficult of late, as a rise in truckload spot rates and a growing number of load posts for expensive longhaul drayage have trimmed the local driver pool, Schilleman said.
With turn times up in 16 out of 18 terminals in Chicago, according to the Illinois Trucking Association, drivers are getting fewer jobs done per day and placing a premium on price, according to draymen. They also have their choice of what jobs to accept because there is so much freight to deliver.
Equipment problems on key ramps
Draymen have reported equipment issues in Atlanta, Charlotte, Chicago, Jacksonville, Memphis, and Kansas City since late December, several of which were on the NS network. Some have been related to chassis shortages, while others have been related to malfunctioning cranes, which tend to happen during a polar vortex, snowstorm, or widespread power outage, all of which took place across the US during the first quarter.
In February, UP and BNSF had to ground containers in a number of cities because of a chassis shortage affecting both international and domestic loads. Chassis shortages frustrate drivers, who are paid per completed job rather than on a per-mile or hourly basis, and shippers, who are ultimately responsible for paying any rail demurrage (storage) penalties.
Chassis providers have said a combination of record volume and rail networks being hampered by severe winter storms in February have caused the equipment shortages in those cities.
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By: LFS Marketing
April 13, 2021
According to Transport topics:
The Biden administration is prioritizing the Gateway rail tunnel project between New York City and New Jersey with urgency because of its “national significance” to the economy, Transportation Secretary Pete Buttigieg told lawmakers.
“This is a regional issue, but one of national significance because if there were a failure in one of those tunnels, the entire U.S. economy would feel it,” Buttigieg told members of the House Transportation and Infrastructure Committee on March 25.
Buttigieg provided lawmakers with his first update of the project, stalled by former President Donald Trump who in 2018 threatened to shut down the government if a spending bill directed federal funding for the tunnel. Gateway was ineligible for federal taxpayer money, the Trump administration said, because New York and New Jersey hadn’t pledged enough cash.
Buttigieg said the Federal Rail Administration and Federal Transit Administration are working with New Jersey Transit and the Port Authority of New York and New Jersey, as well as with Amtrak and the Gateway Development Commission, on updates to a draft environmental impact statement issued in 2017.
The impact statement is “a big part of what needs to be completed in order to get there,” Buttigieg said. The process involves reviewing anything that might have changed since the draft was issued, and coordinating with other federal agencies such as the U.S. Army Corps of Engineers, as well as state agencies that might have jurisdiction, he said.
Angelo Roefaro, a spokesman for Senate Majority Leader Chuck Schumer, said Buttigieg has indicated to the New York Democrat that the environmental review will be approved in May.
The Transportation Department did not immediately respond to a request for comment on the timeline for approval of the Gateway environmental review.
The tunnel would carry Amtrak and New Jersey Transit commuter trains under the Hudson River. Amtrak said it will allow for twice as many trains to run under the Hudson River, including those that are part of its Northeast Corridor service that connects Boston, New York and Washington.
Buttigieg’s comments came in response to a question from Representative Albio Sires, a New Jersey Democrat. “I represent a district in New Jersey with a lot of old infrastructure,” he said. “We have two tunnels — two commuter tunnels that are over 100 years old.”
“During Superstorm Sandy, a lot of salt water got into these tunnels and now the salt water is eating the cement,” Sires said. “I’m concerned that if we don’t address this issue, it’s going to be catastrophic.”
The corridor serves a region that’s home to 17% of the U.S. population, is home to some 97 Fortune 500 company headquarters, and contributes 20% of the national gross domestic product, Sires said.
Buttigieg said the Biden administration is fully engaged on expediting the Gateway Project, but there’s much that needs to be done before any ground is broken.
“The FTA is working closely with project sponsors as it advances through the capital investment grant process prescribed in law, which is obviously an important part of the picture when it comes to funding,” Buttigieg said.
The Gateway Development Commission said in a statement after the hearing, “We applaud Secretary Buttigieg’s public commitment to the Gateway Program, particularly confirming that the Hudson Tunnel Project is a project ‘of national significance’ and setting a rapid timeline for completing the project’s environmental review.”
The commission said it is working with local and federal partners to complete the environmental review and improve the project’s grant rating “so we can start full construction and finally replace a 110-year-old one-track-in one-track-out, delay-prone tunnel with a 21st-century rail link between New York, New Jersey and the rest of the Northeast Corridor.”
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By: LFS Marketing
March 29, 2021
According to Transport topics:
Ship congestion outside the biggest U.S. gateway for Asian imports worsened from a week ago, highlighting a headwind facing American companies just as a pileup around the Suez Canal had threatened to tangle Europe’s supply chains.
A total of 26 containerships were anchored waiting to offload at the twin ports of Los Angeles and Long Beach, Calif., as of March 28, compared with 20 a week earlier though still below a peak of 40 in early February, according to officials who monitor marine traffic in San Pedro Bay. Another 20 are scheduled to arrive over the next three days, with 14 of those expected to drop anchor and join the queue.
The average wait for berth space was 7.9 days, compared with 7.7 days a week ago, according to the L.A. port. That figure had reached 8 days in February, which was about triple the average delay in November.
The bottleneck, which started to form in late October, has been tough to clear because of shortages of both equipment and labor needed to handle an unprecedented wave of imports. American companies are trying to pad inventories as consumers buy more goods online.
Combined, the L.A. and Long Beach ports handled 1.59 million inbound 20-foot containers in the first two months of 2021, up about 29% from the same span a year earlier. March is typically one of the slowest months for imports, but the steel boxes this year keep coming.
RELATED: February Container Volume High at Most Ports
Meanwhile, disruptions may only worsen and container rates globally may stay elevated in coming weeks as the ocean freight market tries to smooth out a logjam involving about 450 ships around the Suez Canal, where a vessel had been blocking transit in both directions since March 23.
The ship, the Ever Given, was re-floated early March 29, though it wasn’t immediately clear how soon the waterway would reopen.
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By: LFS Marketing
March 29, 2021
According to Freightwaves:
Kansas City Southern expands Mexico rail service
The proposed $29 billion merger between Canadian Pacific (NYSE: CP) and Kansas City Southern (NYSE: KSU) aims to capitalize on an expected increase in the flow of trade among the U.S., Canada and Mexico.
The merger would create the first company with a rail network spanning all three countries and enhance the facilitation of the movement of goods across the three nations.
“The new competition we will inject into the North American transportation market cannot happen soon enough, as the new United States-Mexico-Canada Agreement (USMCA) trade agreement among these three countries makes the efficient integration of the continent’s supply chains more important than ever before,” Keith Creel, CP president and CEO, said in a statement announcing the proposed merger.
The proposed CP-KCS merger comes against the backdrop of Kansas City Southern’s $167 million investment in Mexico last year.
Kansas City Southern de México (KCSM), KCS’ Mexican operations, include railways serving northeastern and central Mexico as well as key port cities including Veracruz, Tampico and Lazaro Cardenas.
One of KCS’ major projects was the completion of part of a 12.11-mile double-track line that connects Mexico’s port of Veracruz on the Gulf of Mexico.
KCSM ran the first revenue train over the new double-track access into the expanded Port of Veracruz in February, company spokeswoman Doniele Carlson told FreightWaves.
“This new rail infrastructure is anticipated to make the port more competitive and productive for imports from the U.S., South America and Europe,” Carlson said. “The project was completed in coordination with the Integral Port Administration of Veracruz (APIVER) to improve rail and ship asset utilization, efficiency and connectivity. Before the bypass, KCSM did not have direct access into the Port of Veracruz.”
The 12.11-mile rail connection starts at KCSM’s Santa Fe connection point in the state of Veracruz, which is already covered by the company’s rail network, and extends to the expanded Port of Veracruz.
The Mexican government invested over $19 million to build two new terminals at the Port of Veracruz last year. Veracruz is a key strategic point for trade on Mexico’s east coast as well as the largest seaport located near Mexico City.
“KCSM’s new rail connection is part of a large expansion carried out by the [Veracruz] port authority, including the construction of new intermodal, refined products, grain, automotive and general merchandise terminals,” Carlson said. “Direct access into the new terminal complex will allow KCSM to grow its business between central Mexico and the historically important port of Veracruz.”
Carlson said KCS will continue to focus on more capacity projects during 2021, including beginning construction on a second international rail bridge at the Laredo, Texas-Nuevo Laredo, Mexico, border crossing.
After dipping in late February from the winter storm, Laredo outbound domestic intermodal volume (ORAILDOM.LRD) have risen above year-ago levels.
(Chart: FreightWaves SONAR. Using a seven-day moving average, domestic loaded intermodal container volume outbound from Laredo is shown for 2021, 2020 and 2019 in blue, green and orange, respectively.)
KCS’ route through Laredo connects to Mexico City as well as the ports Veracruz, Tampico and Lazaro Cardenas.
“Today, KCS processes an average of 26 trains in a 24-hour period. Adding the second bridge will enable the Laredo gateway to accommodate 65 to 80 trains per day,” Carlson said. “KCS continues working with relevant government entities on permitting while doing preliminary design work toward a second cross-border bridge at Laredo.”
Furniture maker expands in Laredo
Palliser Furniture Upholstery Ltd. recently leased 117,191 square feet of manufacturing and logistics space at the Sophia Industrial Park in Laredo, Texas.
“We simply outgrew our old location. We were spread out amongst multiple buildings and this move allows us to merge our facilities into a single location in Laredo,” Mike Hofmann, COO of Palliser, said in a release.
Palliser Furniture recently moved into a 117,191-square-foot manufacturing and distribution facility in Laredo, Texas. (Photo: Forum Commercial Real Estate)
Palliser Furniture is based in Winnipeg, Canada. The company has operations in Canada, the U.S. and Mexico and employs more than 2,000 people.
Palliser’s new building is located on 20 acres just off Interstate 35 and about 10 miles from the World Trade Bridge. It was developed by Humphrey Development, a new branch of Gontor Group, an international trade company primarily providing customs and logistics services in North America.
“Our vision was to be ready for a tsunami of logistics operations that the Laredo corridor will experience in the next couple years because of the updated United States-Mexico-Canada Agreement,” Alejandro Gonzalez, COO of Humphrey Development, said. “We envisioned a need for a new real estate development in the area that could service multinational companies.”
Vitromex USA, a tile manufacturer headquartered in Saltillo, Mexico, also recently moved into a 230,900-square-foot building at the Sophia Industrial Park.
“This new location is exceptionally larger, allowing us for increased inventory capacity,” Virgilio Ayala, Vitromex USA’s operations manager, said.
PGT Trucking opens new terminals in Arizona and Arkansas
PGT Trucking Inc. recently announced the opening of facilities in Phoenix and Fort Smith, Arkansas.
The addition of the Phoenix terminal and the relocation of the Poteau, Oklahoma, staff to Fort Smith will allow the company to expand its transportation services, according to company officials.
“We are excited to offer additional shipping solutions into the Southwest by way of our new Phoenix location,” Chad Marsilio, COO of PGT, said in a release.
The Phoenix terminal is located near the Phoenix Sky Harbor International Airport at 2625 E. Air Lane.
PGT Trucking, founded in 1981, is based in Aliquippa, Pennsylvania. The multiservice transportation firm offers flatbed, dedicated, international and specialized services.
PGT operates about 1,000 power units and over 1,500 trailers serving the steel, machinery, oil and gas, raw materials, aluminum and automotive industries.
CBP seizes $1.4M in drugs in Laredo
U.S. Customs and Border Protection (CBP) in Laredo, Texas, seized over 70 pounds of methamphetamine in two separate, unrelated incidents.
The first case occurred March 18 at Laredo’s World Trade Bridge cargo facility. CBP officers were checking a tractor hauling a shipment of multipurpose rock panel paste from Mexico. The officers discovered four containers with 48.58 pounds of alleged methamphetamine inside. The narcotics have an estimated street value of $971,787.
The second seizure occurred March 19 also at the World Trade Bridge. Officers checking a tractor-trailer manifesting a fiberglass decorative figure from Mexico discovered 23 pounds of alleged methamphetamine. The narcotics had an estimated street value of $451,502.
The narcotics have a combined street value of $1.4 million.
CBP seized the narcotics and the cases were turned over to Homeland Security Investigations.
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By: LFS Marketing
March 29, 2021
According to Transport topics:
SUEZ, Egypt — Workers have successfully set free a colossal containership that for nearly a week has been stuck sideways across the Suez Canal, one of the world’s most crucial arteries for trade, a canal service provider said.
Leth Agencies said that the vessel had been refloated on March 29. Helped by the peak of high tide, a flotilla of tugboats managed to wrench the bow of the skyscraper-size Ever Given from the sandy back of the crucial waterway, where it had been lodged since March 23.
Tugboats were pulling the vessel toward the Great Bitter Lake, in the middle of the waterway, where it will undergo inspections.
On March 23, the 220,000-ton Ever Given got stuck sideways in the crucial waterway, creating a massive traffic jam. The obstruction has held up $9 billion each day in global trade and strained supply chains already burdened by the coronavirus pandemic. At least 367 vessels, carrying everything from crude oil to cattle, still were waiting to pass through the canal, while dozens were taking the lengthy alternate route around the Cape of Good Hope at Africa’s southern tip — a detour that costs ships hundreds of thousands of dollars in fuel and other costs.
With canal transits stopped, Egypt already has lost more than $95 million in revenue, according to data firm Refinitiv. Still, clearing the backlog of ships waiting to pass through the canal could take more than 10 days, Refinitiv added.
The freeing of the vessel came after intensive efforts to push and pull the vessel with 10 tugboats when the full moon brought spring tide, Leth Agencies said, raising the canal’s water level. Videos shared widely on social media showed tugboats in the canal sounding their horns in celebration.
Even as salvage work was ongoing, Egyptian President Abdel Fattah el-Sissi portrayed the development as a victory in his first comments on the stranded vessel.
“Egyptians have succeeded in ending the crisis,” he wrote on Facebook.
The price of international benchmark Brent crude dropped some 2% to just over $63 on the news.
An Egyptian TV channel aired live footage of five tugboats with ropes around the ship’s bow, their engines churning, struggling to nudge it away from the shore. Weather forecasts showed strong winds, gusting up to 20 mph.
Shoei Kisen Kaisha Ltd., the vessel’s owner, said that the ship’s engine was functional and would head north. It wasn’t decided whether the Panama-flagged, Japanese-owned ship, would continue to its original destination of Rotterdam, Netherlands. or if it will need to enter another port for repairs, the Shoei official said. The vessel will undergo technical examination at Great Bitter Lake, a wide stretch of water halfway between the north and south end of the canal, according to canal authorities.
Ship operators did not offer a timeline for the reopening of the canal, which carries more than 10% of global trade, including 7% of the world’s oil. Millions of barrels of oil and liquefied natural gas flow through the artery from the Persian Gulf to Europe and North America.
The unprecedented shutdown had threatened to disrupt oil and gas shipments to Europe from the Middle East and raised fears of extended delays, good shortages and rising costs for consumers.
Canal authorities had desperately tried to free the vessel by relying on tugs and dredgers alone, even as analysts warned that 400-meter-long ship may be too heavy for such an operation. Fears had grown that authorities would be forced to lighten the vessel by removing the ship’s 20,000 containers — a complex operation, requiring specialized equipment not found in Egypt.
DeBre reported from Dubai, United Arab Emirates. Associated Press writers Mike Corder at The Hague, Netherlands; Mari Yamaguchi in Tokyo and Jon Gambrell in Dubai, United Arab Emirates, contributed to this report.
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By: LFS Marketing
March 29, 2021
According to Transport topics:
Severe winter weather took a toll on truck tonnage in February, according to American Trucking Associations.
The ATA For-Hire Truck Tonnage Index for the month declined a seasonally adjusted 5.9% to 110 compared with 119.1 a year ago, and fell 4.5% compared with January. That month, the index measured 115.2.
For purposes of the index, the year 2015 = 100.
ATA Chief Economist Bob Costello said the February declines are more an indication of the troubles trucking companies faced during winter storms that hit the country last month than they are a sign of weak economic conditions. “February’s drop was exacerbated — perhaps completely caused — by the severe winter weather that impacted much of the country during the month,” Costello said. “Many other economic indicators were also soft in February due to the bad storms, but I continue to expect a nice climb up for the economy and truck freight as economic stimulus checks are spent, and more people are vaccinated.”
For almost a week in February, large parts of Texas and other southern states battled freezing temperatures, snow and ice that caused severe damage to the Texas power grid and left millions of people without electricity. While the power has been restored, State College, Pa.-based media company AccuWeather Inc. estimates the storm’s total economic damage at $130 billion in Texas alone. That figure is up from its earlier estimate of between $50 billion to $60 billion. For the entire nation, it estimates $155 billion in losses.
“In February, we saw one of the most intensely cold and stormy patterns of winter weather not seen in decades, with extreme record low temperatures and ice spread out across a very large area in multiple states,” AccuWeather CEO Joel Myers said in a statement.
He noted that Texas “bore the brunt of the impact,” with lives lost, power outages, water disruptions, burst pipes and, from a business perspective, destroyed citrus crops.
While FedEx Corp. announced record fiscal third-quarter earnings on March 19, the Memphis, Tenn.-based company noted the February weather took a $350 million bite out of its operating income as storms impacted operations at its Memphis headquarters and FedEx Express hubs in North Texas and Indianapolis.
Costello told Transport Topics on March 18 that he is especially optimistic about the prospects for the U.S. economy in the second half of 2021. He is forecasting the nation’s gross domestic product will increase by 7%, up from his 5% forecast just a few weeks ago.
“We are going to have some insane growth rates for GDP,” he said. ATA’s For-Hire Truck Tonnage Index is dominated by contract freight, as opposed to spot market freight. Trucking represents 72.5% of tonnage carried by all domestic freight transportation modes, including manufactured and retail goods, ATA said. Trucks hauled 11.84 billion tons of freight in 2019.
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By: LFS Marketing
March 23, 2021
According to American Shipper:
China was the United States’ top trading partner for the 10th consecutive month in January, and was No. 1 overall in 2020, according to U.S. Census Bureau data released Friday.
Mexico was No. 2, as its total trade with the U.S. fell 1.3% to $48.5 billion in January, compared to the same period in 2019. Canada was third with $45.8 billion.
China’s total trade with the U.S. rose 28% to $52 billion in January, with imports to the U.S. increasing 18% to $39 billion. Cell phones, related equipment, computers and plastic articles were the top three imports, according to Census Bureau data analyzed by World City.
U.S. exports to China increased 79% to $13 billion in January compared to the same period in 2020. The top three U.S. exports to China in January were soybeans, computer chips and oil.
China was the top U.S. trading partner with the U.S. in 2020, recording two-way trade amounting to $560 billion. Mexico was No. 2 at $538 billion, followed by Canada at $525 billion.
Mexico was briefly the No. 1 trading partner with the U.S. during the end of 2019, but the COVID-19 pandemic has disrupted the commercial supply chains between the two countries.
U.S. exports to Mexico decreased 6.5% to $19.4 billion in January compared to the same period in 2020.
The top three U.S. exports to Mexico in January were gasoline and other fuels ($1.6 billion), motor vehicle parts ($1.1 billion), and computer chips ($935 million), according to World City.
U.S. imports from Mexico rose 2.5% to $29 billion in January, led by passenger vehicles ($2.7 billion), commercial vehicles ($2.1 billion) and motor vehicle parts ($2.1 billion).
With Mexico’s automotive industry regaining momentum, cross-border trade in Laredo, Texas, rose 4.9% to $18.9 billion in January compared to the same period last year.
Port Laredo remained No. 3 among the nation’s 450 airports, seaports and border crossings in January. Port of Los Angeles ranked No. 1 among U.S. gateways, followed by Chicago O’Hare International Airport.
Laredo’s top trading partner country in January was Mexico, which accounted for 98% of total trade, or $18.5 billion, followed by China at $103 million and France at $45 million.
Exports passing through Port Laredo fell almost 2% to $7.5 billion in January. Those included motor vehicle parts ($805 million), gasoline and other fuels ($363 million), and internal combustion engines ($333 million).
Imports passing from Mexico through Port Laredo rose 10% to $29 billion in January and included motor vehicle parts ($1.5 billion), passenger vehicles ($1.1 billion) and commercial vehicles ($511 million).
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By: LFS Marketing
March 23, 2021
According to American Shipper:
In ocean shipping, present success often breeds future failure. Across the decades, freight-rate spikes have spurred newbuilding sprees, wiping out freight rates. Which brings us to today: Container freight rates are spiking and container-ship newbuild orders are surging at yards in China, South Korea and Japan. Is the ending of this story inevitable?
Not necessarily. There have been a very large number of orders in Q4 2020 and Q1 2021. Yet container shipping’s orderbook was historically low before this new wave of contracts hit.
What happens next will be important to watch. Not only for investors in container shipping, but for tanker and dry bulk investors, as well.
It has long been argued that shipowners are abstaining from orders because they fear future decarbonization rules won’t grandfather in today’s carbon-emitting newbuild designs. What’s happening now in container shipping implies that owners can overcome this fear if returns look high enough.
“Turns out, when things are good, people will still order even if they are concerned what type of fuel to use,” wrote Stifel analyst Ben Nolan.
Orderbook-to-fleet ratio still low
According to the latest figures from Alphaliner, the orderbook as of Friday was 401 container ships totaling 3.63 million twenty-foot equivalent units (TEUs). The orderbook is 15.3% of the on-the-water fleet’s capacity measured in TEUs, up from a multi-decade low of just 9.4% in mid-2020.
However, today’s ratio pales in comparison to an orderbook-to-fleet ratio of over 60% in 2008. “An orderbook of 15% of the fleet is normal,” assured Stefan Verberckmoes, shipping analyst and Europe editor at Alphaliner, in an interview with American Shipper. This is an orderbook level that makes sense to renew the fleet and handle annual cargo growth.
Rolf Habben Jansen, CEO of Hapag-Lloyd, made the same point during his company’s call with analysts on Thursday. “We are nowhere near the situation we saw in when we saw the orderbook that was more than half the global fleet. Today, we are concerned when we look at 12% [his estimate was below Alphaliner’s current number]. I would say it’s probably going to hover around a number that’s slightly better than that. But that would still allow us to be in reasonably healthy territory.”
The problem for container shipping would arise if the orders keep coming. Verberckmoes warned, “If the orders continue at the same pace in Q2 and if we see speculative orders coming in, and it goes from 15% to 20%-30%, then it becomes worrisome. Because we don’t have any visibility on the cargo demand a few years from now.”
A tale of two quarters
As previously reported by American Shipper, Q4 2020 container-ship orders were dominated by so-called “megamaxes,” vessels with capacity of over 18,000 TEUs and 23-24 container rows on deck. Most of the 25 orders were for carriers that didn’t have enough megamax capacity. These were mostly orders that had been previously expected.
For 2020 overall, almost all of the orders were for megamaxes or for smaller ships (2,500 TEU or below) used primarily for intra-Asia trades. There were only a few “neo-Panamaxes” — ships of 12,000-16,000 TEU with 20 container rows on deck that can traverse the new Panama Canal locks. There were virtually no orders in the midsize 5,000- to 9,000-TEU categories. Newbuilds were either very big or very small.
In contrast, Q1 2021 has seen four more megamax orders and ongoing orders for smaller ships, but a surge in orders for neo-Panamaxes — 60 so far with at least nine more possible by the end of March. “There is a very clear preference for neo-Panamax ships,” reported Verberckmoes.
The new workhorse
“Some are 13,000 TEU but most are 15,000-15,900 TEU. We can now see that these ships are going to be the workhorses of the sector, comparable to the maxi-Panamax [up to 5,100 TEU] ships that went through the old Panama locks.
“Carriers are asking: What is the ideal ship of the future, versatile enough to be used in a lot of trades? The answer, mostly, is the biggest ship possible to transit the Panama Canal.”
In the larger categories, owners are ordering either megamaxes or neo-Panamaxes, “but nothing in between,” he continued. “Nobody is ordering 18,000-TEU ships. And I strongly feel that nothing will be ordered [in this size], simply because it doesn’t make sense.
“You will have ships in Far East-Europe and you’ll want the biggest ships — 24,000 TEUs. Or you’ll want the flexibility and you’ll go for 15,000-15,900 TEUs, which you can deploy on virtually all trades.
“You can put them in the trans-Pacific via Panama, on Asia-Latin American, on Asia-West Africa. There is even a 15,000-TEU ship now going from India to the U.S. East Coast.”
Orders despite decarbonization specter
The common wisdom is that new orders in any shipping segment favor designs allowing for liquefied natural gas (LNG) as fuel. LNG is viewed as a transitional choice before the switch to the new generation of fuels necessary to meet the International Maritime Organization’s 2050 decarbonization goal.
But this theory is not playing out in container shipping, the one segment where current fundamentals justify large-scale newbuild orders.
“We have only seen three carriers going for LNG: CMA CGM, Hapag-Lloyd and ZIM,” said Verberckmoes. ZIM (NYSE: ZIM) opted for LNG fuel for newbuilds chartered from Seaspan, a division of Atlas Corp. (NYSE: ATCO).
“All the others are scrubber-fitted,” he said.
Scrubber-fitted newbuilds allow the consumption of cheaper 3.5% sulfur fuel known as high sulfur fuel oil (HSFO), whereas non-scrubber ships must consume more expensive 0.5% sulfur fuel known as very low sulfur fuel oil (VLSFO). It is much more economical to install scrubbers in newbuilds than to retrofit them into existing ships.
Asked why so many container-ship owners would order ships despite the looming specter of decarbonization rules, he replied: because “there is no alternative.”
“Methanol ships are in development. There are trials with ammonia. There are studies of ships with hydrogen. None of these ships are orderable yet. If you are a carrier like MSC that expects 3% [demand] growth per year, you need to add to your fleet. And the only options right now are LNG or scrubbers and using dirty fuel oil. Some may look at LNG and say it’s still a fossil fuel, so they just decide to go with scrubbers.”
“Maersk said, ‘OK, we are not going to expand the fleet [until there is a carbon-neutral newbuild option].’ But they are the only ones in the industry taking this approach.”
Liners opt to lease not own
Liner companies own a portion of their fleets and charter in the rest from non-operating owners (NOOs).
U.S.-listed NOOs include Atlas Corp., Danaos (NYSE: DAC), Costamare (NYSE: CMRE), Global Ship Lease (NYSE: GSL), Navios Containers (NASDAQ: NMCI), Navios Partners (NYSE: NMM), Capital Product Partners (NASDAQ: CPLP) and Euroseas (NASDAQ: ESEA).
According to Verberckmoes, “The main orderers are the NOOs, companies like Seaspan, Zodiac, Eastern Pacific and Capital Maritime. Carriers such as Evergreen, OOCL and Hapag-Lloyd accounted only for about one-fifth of all orders in Q4 and Q1. This is the same tendency we’ve seen for a number of years.”
Atlas Corp.’s Seaspan has been particularly aggressive. It has ordered 31 newbuildings since December with an aggregate capacity of 451,000 TEUs, all with charters attached for durations ranging from six to 18 years.
“For the carriers, there’s a very good case for time-chartering these neo-Panamaxes from the NOOs,” explained Verberckmoes. “If you charter them, you don’t have to pay for them all at once. You can replace your 8,000-TEU ships that are 20 years old and are obliged to burn more-expensive VLSFO with a 16,000-TEU ship with a scrubber, so you can burn heavy fuel oil [HSFO].
“And if you replace two 8,000-TEU ships with one 16,000-TEU ship, economies of scale not only give a lower per-slot cost. They also reduce CO2 emissions per TEU. That is why MSC says its biggest megamaxes are its most environmentally friendly ships.”
Are speculative orders next?
Newbuilding orders by liner companies — or by NOOs with long-term charters to liners — do not raise red flags. What will raise red flags is speculative orders by NOOs with no charters attached.
The Alphaliner analyst emphasized, “The big question is whether there will be speculative orders, whether Greek or other companies will just say, ‘OK, we feel there will be a market for these ships. We will order them even though we don’t have a charter yet.’
“That is the big question that still remains unanswered. We have some orders where we cannot yet see the charterer, so they could be speculative. But we don’t have any evidence yet of speculative orders.”
He cautioned, “We could see the repeat of the old mistake of carriers [and NOOs] ordering too many ships. We should not forget that the shortage of ships is also partly due to congestion, with an average waiting time at anchor in Los Angeles/Long Beach of over seven days. If only the problem in Los Angeles/Long Beach is solved, it will already bring around 30 big ships back on the market. That’s a lot of capacity coming back.”
What this means to ports
Today’s orderbook trends offer an important signal to the world’s ports. If you’re handling mostly midsized 5,000- to 9,000-vessels, expect to service ships twice that size in the years ahead.
“Nothing is being scrapped,” said Verberckmoes. “All the ships are being chartered. All the ships are still around. But if the market falls down or when a new wave of neo-Panamax ships hits the waters, there are candidates for scrapping,” he noted.
“It’s clear that most ports are ready to handle 15,000-TEU ships. And there are a lot of 7,000-, 8,000-, 9,000-TEU ships still active in the trans-Pacific. They are getting older and they can easily be replaced.”
What this means to cargo shippers
There are not enough ships in existence to handle today’s containerized cargo demand. Thus, every new vessel order is a plus for importers and exporters. “Cargo owners would hope that there are even more orders and there will be overcapacity and prices will go back down again,” said Verberckmoes.
But recent orders are mostly for delivery in 2023. Shippers still face years of the vessel-supply status quo before a big wave of fresh capacity hits.
Fearnleys Securities estimates that global volumes will increase 6% this year, while capacity will only increase 3%. Alphaliner net expects fleet growth of 3.7%. Clearly, this supply-demand outlook offers no relief from historically elevated spot rates.
As of Thursday, Asia-West Coast spot rates (SONAR: FBXD.CNAW) were at $4,292 per forty-foot equivalent unit (FEU), up 191% year-on-year, according to the Freightos Baltic Daily Index. Asia-East Coast rates (SONAR: FBXD.CNAW) were $5,716 per FEU, up 109% year-on-year.
(Chart: FreightWaves SONAR. To learn more about FreightWaves SONAR, click here.)
The longer-term question for cargo shippers is whether larger fleets will compel liners to go for market share and compete more on price, i.e., whether liners’ current capacity-management discipline will ultimately break down.
What this means to stock investors
The NOOs face the highest long-term risk from overcapacity. When markets collapse, as most recently occurred in 2016, charters get renegotiated or canceled.
“In the past, when volumes went down, the first thing carriers did was return chartered ships. So, the problem was not with the carriers, it was with the NOOs,” said Verberckmoes.
Given newbuild lead times, this potential risk is still years away. Furthermore, the orderbook is actually still too low, according to Fearnleys. It estimates that the orderbook-to-fleet ratio needs to grow to 17% just to cover cargo demand through 2023.
For dry bulk and tanker investors, the container-ship ordering spree raises the question: What if the thesis that owners won’t order because of fear of decarbonization rules is actually owners “talking their book?” What if bulker and tanker newbuilds will be ordered regardless of regulatory concerns, whether to enhance vessel efficiency to comply with looming efficiency rules, to add LNG fuel capability or to install scrubbers and take advantage of the re-widening VLSFO-HFO spread?
As Deutsche Bank transportation analyst Amit Mehrotra told American Shipper in a recent interview, for commodity ship owners to go on an ordering binge, “rates would need to be much stronger for much longer than people think today,” “secondhand asset values would need to be a lot higher,” and consequently, “equities would have to be significantly higher.”
In other words, dry bulk and tanker markets would have to be as red-hot as container markets are now — which would be a highly lucrative “problem” for dry bulk and tanker investors to have. Click for more FreightWaves/American Shipper articles by Greg Miller
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By: LFS Marketing
March 23, 2021
According to Freightwaves:
After the winter storm disruptions, freight tender volumes have stabilized and moved horizontally this week. The Outbound Tender Volume Index is up ~16% yoy when adjusting for the high level of rejected tenders. Yearly comps will soon become tougher given the 30% volume surge last March on the backs of consumer panic buying and hoarding of grocery and household staples.
We are entering the seasonal second-gear freight markets find toward the end of Q1. Not only does the warm weather bring about elevated consumer demand, but retailers have quarterly results to report, and lagging inventories are not applauded by Wall Street.
In this week’s special topic report, the Passport Research team covered asset operators with a piece titled “It’s good to be a trucker” and highlighted that carrier key performance indicators (KPIs) are at the healthiest levels in years. The team wrote, “There was some seasonal giveback in operating ratios but this is to be expected. The bull market for freight is alive and well; the question is how long it will last. At this point, our answer is longer than we previously thought.”
Over the past week, there were a swath of stock upgrades in the transportation sector from various sell-side shops. As I wrote last week, since the market was already so tight and imbalanced, any event that removed trucks from the roads would have an outsized and lasting impact. Retailers and their transportation partners are finally working through the winter storm-induced glut just as the spring season heats up. To add fuel, President Biden said this week the U.S. will have enough vaccinations for every American by the end of May. It will take several months past that date to dole out the inoculations, but consumer behavior will change.
In this week’s “COVID and the Consumer” report from Bank of America, the team highlighted airline and lodging spending by generation to show the oldest cohort (the most likely to receive vaccines thus far) has begun spending much more on flying, but minimally more on lodging. The team suggests the eldest generations are flying to visit family rather than vacation. But vaccines are beginning to hit the younger generations, who will be more likely to vacation and spend on services than their elders did upon vaccination.
The generational pent-up demand for services is the only headwind to freight volumes in the short to midterm. The industrial economy is recovering at a solid clip, the housing market is soaring and consumers continue to do their part, aided by the hopes of further stimulus. So although year-over-year comps will tighten over the next few weeks, there is no sign of slowing down soon.
On a positive note, eight of the 15 major freight markets that we monitor as a broad, representative benchmark were positive on a week-over-week basis. This ratio weakened modestly from the stronger levels it has become accustomed to in recent months as the freight market rallies. The markets with the largest gains this week in OTVI.USA were Laredo, Texas (12.07%), Memphis, Tennessee (5.37%), and Cleveland (5.08%). The markets with the largest declines this week in OTVI.USA were Chicago (-5.83%), Seattle (-4.66%) and Miami (-4.26%).
Tender rejections hover near peak
The Outbound Tender Reject Index also moved horizontally this week, stable at a very high level of 27.6%. OTRI has ranged up toward 30% four times over the past year, but never quite touched the handle. I believe we are near the natural ceiling for tender rejections, and this is evidenced by surging spot rates.
Capacity remains scarce across many regions of the country, especially the Midwest and upper Midwest. Carriers have realigned more capacity to West Coast markets as rejection rates have fallen considerably in California while tender volumes have risen. This week, Old Dominion Freight Lines announced it would be hiring 800 drivers to expand its operations. This isn’t the first such announcement and Old Dominion won’t be the last carrier to do so. The length of this bull market seems to be extending with every passing week. Equipment orders are at multi-decade highs, so it’s a matter of time before some capacity is added to the market. However, bottlenecks at driver training schools have not been relieved and the Drug and Alcohol Clearinghouse has removed tens of thousands of drivers, so seats are difficult to fill.
It is unlikely that there will be a material change to capacity through the middle of the year. We may see some downward pressure on tender rejections as routing guides are recalibrated and contract rates market toward spot, but capacity will remain difficult to source.
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For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
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By: LFS Marketing
March 16, 2021
According to Freightwaves:
Big changes planned for Texas border bridge
Speeding up commercial truck traffic will be a priority when the Pharr-Reynosa International Bridge’s largest expansion project in history is completed in 2023, said Luis Bazán, the bridge’s general director.
The expansion includes building a second international bridge in Pharr, Texas, along the U.S.-Mexico border to add cargo capacity and reduce wait times for commercial trucks.
“With the second span for the bridge, we’re adding another bridge, we’re adding four additional lanes,” Bazán told FreightWaves.
Bazán said the second span will give Pharr additional lanes to separate commercial trucks and cars, as well as dedicating specific lanes for empty trucks, full cargo trucks and certified cargo.
The bridge expansion also includes adding Free and Secure Trade (FAST) lanes from Mexico to the United States.
The 3.2 mile Pharr-Reynosa International Bridge currently has four lanes, handling commercial and passenger vehicles. The expanded bridge could accommodate another 800 trucks a day, according to Pharr officials.
The project received a boost Dec. 31 when former President Donald Trump issued a presidential permit authorizing the expansion.
The Pharr-Reynosa International Bridge was the second-busiest commercial truck crossing in Texas during 2020 and the third busiest on the Mexican border.
The busiest U.S.-Mexico border commercial land ports for trucks in 2020 were:
-Laredo, Texas, 2.3 million trucks in 2020.
-Otay Mesa, California, 927,714.
-Pharr, 665,435.
-Nogales, Arizona, 352,037.
-El Paso, Texas, 286,434.
The Outbound Tender Volume Index (OTVI), published by FreightWaves and available on the SONAR market dashboard, measures volume out of key freight markets.
As of Thursday, McAllen, Texas – which includes the Pharr-Reynosa market – had seen a 28% increase in outbound load volume year-over-year.
Outbound Tender Volumes in McAllen declined moderately from a week ago but climbed moderately year-over-year. SONAR: OTVI.MFE
For carriers, the Pharr international bridge is also notable for how much longer the average length of haul is from McAllen versus the rest of the country, 930 miles versus 630 miles. SONAR: OALOHA.MFE
The Pharr-Reynosa International Bridge, which connects Texas to the Mexican city of Reynosa, totaled $33 billion in trade for all of 2020.
“It was a record year for us in 2020, especially for produce,” Bazán said. “Even with the pandemic, throughout the summer months we were bringing in around 15,000 shipments per month, which is kind of unheard of for a summer period.”
The Pharr bridges’ top three imports for 2020 were TVs and computers at $2.31 billion; avocados, dates, figs and pineapples at $1.43 billion; and electrical boards, panels, switches at $993 million, according to data from the U.S. Census Bureau analyzed by World City.
The Pharr bridges’ top produce imports in 2020 included:
-Avocados, dates and pineapples, $1.4 billion.
-Strawberries, blueberries and raspberries, $955 million.
-Tomatoes, $593 million.
-Peppers, asparagus and squash, $428 million.
-Oranges and grapefruits, $355 million.
-Pickles and cucumbers, $84 million.
-Melons and papayas, $46 million.
Bazán said the next step is getting the environmental clearance needed to proceed with construction.
“Once we get the environmental clearance, then we get into the conceptual plans on both sides of the [U.S.-Mexico] border to finalize plans,” Bazán said. “It’s looking like we’re going to start construction within the first quarter of 2022. It’s a 14-month construction period to build the entire second span of the bridge.”
Bazán said connecting lanes on both sides of the border from the existing bridge to the new span will be built for emergency and contingency situations.
“We are looking at 2023 by the time we’re done building the new bridge. It’s a very aggressive timeline,” Bazán said. “The trucks keep coming, they never stop.”
Team Worldwide opens office in southern Arizona
Team Worldwide, a global third-party logistics provider company, recently opened a branch office in Nogales, Arizona.
The new location is the company’s fifth along the U.S.-Mexico border. It will serve Team Worldwide’s clients in Tucson, Arizona, focusing on integrating international business from Mexico as well as growing domestic business in the Tucson market.
Eleazar Romero will be the general manager of Team Worldwide’s Nogales office.
“The strength of our business model lies in our network of locally owned and operated branch offices. By adding Tucson to our network, we look forward to providing additional cross-vertical solutions to clients,” Randy Sinker, president of Team Worldwide, said in a statement.
Established in 1979, Team Worldwide is a freight forwarder and third-party logistics provider. The company operates more than 45 branches across the U.S. Team Worldwide is headquartered in Winnsboro, Texas.
Amazon to open fulfillment center in Texas Panhandle
Amazon Inc. (NASDAQ: AMZN) recently announced plans for a fulfillment center in Amarillo, Texas.
The fulfillment center is expected to create more than 500 full-time jobs in the 1 million-square-foot fulfillment center. Employees will work to pick, pack and ship bulky or larger-sized customer items such as furniture, outdoor equipment or rugs.
The facility is scheduled to open in early 2022. Since 2010, Amazon has invested $16.9 billion in Texas, creating more than 70,000 jobs, according to the company.
CG Railway launches bigger, faster vessels
CG Railway (CGR) announced the launch of the first of two new rail ferries that will transport railcars between Mobile, Alabama, and the Port of Coatzacoalcos in southern Mexico.
The two ferries will replace CGR’s two existing vessels, which have transported over 200,000 rail cars in more than 1,400 sailings between Mobile and Coatzacoalcos.
The 590-foot-long ferries are designed to carry 135 railcars each, up from 115 railcars on the existing ferries, with an expected top speed of 14 knots, up from 7 knots, according to a release.
Mobile-based CGR operates a Class 3 railroad and ferry service transporting approximately 10,000 annual carloads of diversified commodities across the Gulf of Mexico.
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LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.
For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.
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By: LFS Marketing</
