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Transportation News Bulletins - Logistics

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World Trade Suffers Biggest Drop Since WWII
Wednesday, 24 February 2010 00:00

WTO says 2010 will be better but the number of unemployed people—200 million on a global basis—will be a huge obstacle to overcome.

At an unprecedented 12% drop, according to new figures, global trade last year suffered its biggest collapse since World War II.

And it is a steep downwards revision from the WTO's most recent estimate in December of 10%, said Pascal Lamy, director general of the World Trade Organization.

While he would give "no forecast" for 2010 trade growth, he insisted a "pickup" is underway, but led by an "overheating" China, could not say whether it is short-term or sustainable.

The massive contraction makes it "economically imperative to conclude" stalled international free trade talks in 2010, Lamy told business figures and policymakers at the European Policy Centre, a Brussels think-tank.

The Doha Round of trade negotiations that began in 2001 with a focus on dismantling obstacles to trade for poor nations has been dogged by intractable disagreements. These include how much the United States and the European Union should reduce farm aid and the extent to which developing countries such as India and China should lower tariffs. Deadlines to conclude the talks have been repeatedly missed, with the latest being the end of this year.

Lamy said getting agreement on Doha is a "challenge" but said the world was "80%" there. He also said he "wouldn't venture any prediction" on when Russia would come on board.

Along with Brazil, China and India, Russia makes up a quartet of developing economies said to hold the key to conclusion of a deal that would cut agriculture subsidies and tariffs on industrial goods.

On Feb. 24, Australia resumed bilateral free-trade talks with China after a 14-month gap.

Lamy blamed last year's trade "freefall" on a reduction in demand "across all major world economies" as well as the drying-up of trade financing and rising tariffs or national subsidies.

Some protectionist response "was to be expected," he said, although he maintained that worries of "runaway protectionism" had proved an exaggeration.

Amid vast government deficits, he said the biggest enemy to a sustained pick-up was "intolerably high" unemployment that the International Labor Organization estimates has hit 200 million people worldwide— 20 million of whom have lost their jobs since the crisis began on Wall Street.

"The political consequences in my view are still to come," Lamy warned of the so-called jobless recovery, underlining that "keeping international markets open is vital" if negative global economic growth of minus 2.2% in 2009 is to be reversed.

Lamy said getting agreement on Doha is a "challenge" but said the world was "80 percent" there.

Industry Week, 2/24/2010

How Uncle Sam Helps Exporters
Tuesday, 23 February 2010 11:06

“I’m from the government, and I’m here to help you.” That’s a common joke, but U.S. government officials can be an exporter’s best friend, especially for those new to exporting or who are looking to expand into new markets. Government agencies serve exporters in numerous ways, including educating them about opportunities outside the U.S., obtaining financing, and helping them to overcome hurdles in foreign markets.

Less than one percent of American companies export, and of those companies, 58 percent sell in only one market. One reason for this weak performance is that most companies are afraid to dip their toes outside the U.S. Part of that fear is because they are unaware of the help they could get from Uncle Sam. If more companies took advantage of the services offered by government agencies, U.S. exports could grow by hundreds of billions of dollars. Those exports would create millions of jobs, slash the trade deficit, and bolster national security.

Here are brief descriptions of key U.S. agencies and the services they provide:

U.S. Commercial Service— This is the export arm of the U.S. Department of Commerce. The Commercial Service’s primary goal is to help small and medium enterprises, but its services can be very valuable to large exporters, too. It has trade specialists at export assistance centers in 109 U.S. locations and at U.S. embassies and consulates in 77 countries. They will help you find out which markets offer the best opportunities and identify prospective customers, distributors and partners. They will even arrange appointments for you.

The Commercial Service also helps with trade missions and trade shows, including bringing foreign buyers to U.S. trade shows.

“I don’t know of a single company that has a competitive product, that is really interested in selling to new markets, and that has used Commerce Department services that has failed—as long as they work at it,” says Frank Vargo, Vice President-International at the National Association of Manufacturers. Vargo said one of the best ways to stimulate the economy would be to triple the Commercial Service budget, which was a relatively paltry $257 million in fiscal 2009.

Its Trade Information Center (1-800-USA-TRADE) is a single point of contact for potential exporters and provides basic export counseling and information on all U.S. government export assistance programs.

The Commercial Service’s Web site——is a fabulous resource, and a great starting point for any company that is new to exporting or that wants to expand into new markets.

The Commercial Service is part of the Commerce Department’s International Trade Administration— ITA’s other units include:

Market Access and Compliance— It identifies and overcomes trade barriers, resolves trade policy issues, and ensures that U.S. trading partners fully meet their obligations under trade agreements.

Export-Import Bank— The bank is the official export credit agency of the U.S. government. Its services include working capital guarantees, loan guarantees, and export credit insurance, which help minimize the risk of non-payment. Most of Ex-Im’s efforts have been geared to exporters of large capital goods such as aircraft, but recent years have brought a heavy focus on small and medium exporters. In fiscal 2009, for example, it approved 2,540 transactions that were made available for the direct benefit of small-business exporters, of whom 515 were first-time users of Ex-Im Bank services.

For the most part, it works through commercial lenders, but it also provides direct loans. Most of these have gone to foreign buyers of U.S. goods and services, but in response to the credit crisis it has stepped up direct loans to U.S. companies. Ex-Im Bank brought its message to the public last fall with seminars in eight U.S. cities, which were attended by 1,500 business owners. It plans to conduct another road show early this year.

Small Business Administration— Its services to exporters include working capital guarantees, which helps companies obtain financing from commercial lenders to pay for raw materials, supplies, labor and overhead, so they can fulfill export orders. SBA’s Export Express program provides exporters and lenders a streamlined method to obtain SBA-backed financing for loans and lines of credit up to $250,000.

Foreign Agriculture Service— This is the export promotion agency of the U.S. Department of Agriculture. Its services include a foreign market development program, a market access program, and export credit assistance.

U.S. Trade Representative— This is the lead agency on trade policy, negotiation of international agreements, and coordination of existing agreements. It represents the U.S. at the World Trade Organization.

Cargo Business News, 2/2010

Transportation Firms Must Improve Recruiting to Satisfy Customers’ Desires, Leaders Say
Monday, 22 February 2010 00:00

The transportation and logistics industries must do a better job of recruiting employees and upgrading the skills of current workers to meet the increasing needs of shippers, said several leaders in those industries.

Supply-chain efficiency is so vital to the overall performance of many companies that transportation executives must have a broad understanding of how businesses operate, those leaders said. And those new executives also must be proficient in the use of technologies for processing information on the global movement of goods, those leaders said.

In response to those market realities, some companies are beginning to push for certification of logistics workers, and many have formed close ties with schools to provide training and conduct research. Likewise, more colleges and universities are offering undergraduate and graduate-level logistics programs.

However, despite good job prospects for graduates, many business leaders said they are finding it difficult to “sell” logistics as a preferred career option.

“A university is similar to a manufacturing company,” said Joel Sutherland, managing director of the Center for Value Chain Research at Lehigh University in Bethlehem, Pa. “To survive and prosper, it must produce a product that is in demand. For universities, this means we must understand industry’s evolving supply-chain management needs and develop a curriculum that produces talent that supports those needs.”

Sutherland knows the logistics end of the trucking industry. In the late 1990s, he was hired by J.B. Hunt Transport Services to develop a non-asset-based logistics concept for Hunt and four other truckload carriers. It ultimately became third-party logistics and technology provider Transplace Inc.

At Lehigh, Sutherland said, logistics students are required to work outside the classroom “in a job that increases their understanding of supply-chain practices and enhances their value to a firm.”

“Real-world experience matters,” he added.

Logistics educators said companies are asking for help in providing training and certification to employees.

“We see schools increasing the number of programs,” said Chris Moberg, a marketing professor at Ohio University, who serves as co-chairman of the education committee for the Council of Supply Chain Management Professionals.

While more programs are being offered, Moberg said schools also are battling negative perceptions among students about careers in transportation and logistics.

Steve Sienkiewicz, a senior vice president of Agility Logistics in Baar, Switzerland, shared similar sentiments.

“It’s a challenge to bring people into this business,” he said. “It’s still considered blue collar.”

Though careers in finance or law may have greater appeal to college students, Sienkiewicz said that people who are trained in supply-chain management are landing more executive-level corporate jobs.

“It’s a pathway to top management because [the supply chain] touches so many aspects of the business,” he said.

To attract more people to logistics, business leaders are working with educators and government officials to raise the profile of transportation and logistics among school-age children and the public.

“We’ve made some gains,” said Cathy Langham of Langham Logistics, a company she started with her sister 22 years ago in Indianapolis. A graduate of Indiana University with a degree in business and marketing, Langham was working as a retail buyer when she got her first taste of transportation working in sales for P-I-E Nationwide, a prominent less-than-truckload carrier in the 1970s and 1980s.

“It gets into your blood and stays,” Langham said of her interest in transportation and logistics.

Langham applauded the efforts of Indiana Gov. Mitch Daniels (R) to develop more logistics expertise as a way to support the growth of new manufacturing jobs.

“There is a shortage of people with [logistics] skills,” Langham said. “We can train, and we can teach the business, but I don’t see a lot of people coming in the door with those qualifications.”

In a 2009 report by researchers at Ball State University in Muncie, Ind., its home state received high marks for having a highly developed manufacturing and logistics sector, good transportation infrastructure and relatively low taxes. But the state also ranked poorly in other categories, such as benefit costs, productivity and innovation. It also scored the worst—a D+—for human capital.

“Indiana, to a higher degree than many states, has an aging manufacturing and logistics workforce,” said Steve Dwyer, president of Conexus Indiana, an initiative formed by a group of business and government leaders in central Indiana to address the state’s workforce issues.

“If the region cannot offer firms a reliable source of educated workers,” Dwyer said, “we will see a dwindling presence of manufacturing, as business seeks workers with the right set of skills and education.”

A similar partnership including business, educators and public officials in North Carolina has targeted logistics education as a way to spur economic development in a region hit hard by job losses in the textile, furniture manufacturing and tobacco industries.

“Our objective is to make this area very attractive for manufacturing and distribution for the East Coast market,” said Don Kirkman, president of the Piedmont Triad Partnership in Greensboro. “We want to make sure there is a pipeline of available workers.”

The 12-county Triad area in North Carolina has lost 50,000 jobs in the past four years, said David Hauser, director of logistics and distribution for PTP.

“Objective No. 1 is to stop the bleeding,” Hauser said. “Furniture manufacturing is not coming back, but design work can, and distribution. Components can be made in China and assembled and shipped from here.”

PTP garnered support for the establishment of a Center for Global Logistics near the airport in Greensboro.

The center, which is slated to open in 2011, will feature a working warehouse, exposing local students to inventory management systems, material handling equipment and the radio-frequency identification technologies used in modern distribution centers.

In Dallas, warehouse operator John Ward said he is working with state and local officials to develop curricula for high school, community college and university students to spur interest in logistics careers.

“I need skilled people,” said Ward, who leads Dallas Transfer and Terminal Warehouse Co. “Right now, we pick up whoever we can and we train them.”

Ward said he supports the idea of offering a certification test for logistics workers using a process similar to the one used to test and certify automotive mechanics.

For example, Ward said, federal regulations now require forklift training, but the license is not transferable and is equipment specific.

With a logistics certification, employers would have a way to easily judge the skill level of prospective employees, while workers could use the credentials to advance their careers.

“Warehouses are thought of as a dark, dirty place where you pick up boxes,” Ward said. “Most of my people work with computers. Brawn only gets you so far.”

The need for more highly qualified personnel reflects the pressure on transportation service providers to do more for shippers.

“Rather than simply calling to pick up a load, they are looking for the motor carrier to be more involved in scheduling, working the dock—more logistics-type work,” said Tom Bray, a training consultant with J.J. Keller & Associates Inc.

“Firms have created new positions to deal with what used to be the traffic department of the shipper.”

With supply-chain issues becoming more important to the overall performance of many companies, schools and businesses are finding new ways to extend learning from the classroom to the board room.

Samuel Campagna said when he was global transportation and logistics manager for United Technologies Corp., Farmington, Conn., he was asked to develop a logistics curriculum for the company after officials identified a “real skills gap in logistics.”

Using a video instruction program from the Georgia Institute of Technology’s Supply Chain & Logistics Institute, more than 200 people received instruction.

“It made a difference,” Campagna said. “Awareness of logistics has increased. We identified $100 million in savings last year through process improvements and waste reduction.”

Campagna left his job with UTC on Feb. 5 to join Albany International Corp. in Albany, N.Y., as vice president of supply chain.

At Fox Valley Technical College in Oshkosh, Wis., Anne Haberkorn directs five instructors who work full time providing training in “lean logistics” concepts and sustainability to employees on the job.

“It has always been tough trying to interest high school graduates in this field,” Haberkorn said. “Many people that find themselves in these positions are promoted from other jobs.”

One of Haberkorn’s recent training assignments was at School Specialty Inc., a company that sells educational materials and supplies based in Greenville, Wis. The company had just completed implementation of an enterprise resource management program and needed to bring its 2,700 employees up to date.

“We needed to help our associates understand the basic processes and principles of what we are trying to do, and to create a general level of lean literacy throughout the organization,” said Michael Killoren, vice president of School Specialty Inc.

Fox Valley also has more than 1,000 students enrolled in online courses, and it provides certification courses for the Chicago-based Association for Operations Management.

Jeffrey Arnold, executive director of the North American Transportation Management Institute, which provides certification courses for safety and maintenance managers, said interest remains strong in such programs despite the downturn in the economy.

“We have seen a fair amount of folks in management lose their jobs. A number of those folks are looking to professional development to keep themselves marketable.”

At the Intermodal Transportation Institute at the University of Denver, the focus is on helping transportation executives learn from each other.

Each five-week course has about 25 people and features a mix of classroom instruction and trips to ports and other important transportation facilities.

“There is a need for the next generation of leaders to acquire the skills to take their organization to the next level,” said Ted Prince, a prominent rail industry consultant and instructor at the ITI.

Prince said that most transportation executives develop expertise in just one mode—truck, trains, air or ocean—and have little opportunity to consider the economics of intermodal transportation.

“There’s no textbook for this,” Prince said.

Tom Finkbiner, another ITI instructor—and a former truck and rail executive—said the need for executive education is all the more pressing because the pace of change is accelerating.

“In transportation, a right decision yesterday could be a wrong decision now,” he said. “Most successful shippers don’t view their business in terms of mode. They’ve got a commodity going from point A to point B, and what’s the best way to get it there? It’s an open-ended question.”

Transport Topics, 2/22/2010

DOT allocates $777 million in stimulus money
Thursday, 18 February 2010 00:00

KANSAS CITY, MO—One year to the day after President Obama signed the American Recovery and Reinvestment Act into law, Secretary of Transportation Ray LaHood has announced Recovery Act awards to states, tribal governments, cities, counties and transit agencies across the country to fund 51 innovative transportation projects.

Projects funded with the $1.5 billion allocated in the Recovery Act include improvements to roads, bridges, rail, ports, transit and intermodal facilities.

The DOT reported it received more than 1,400 applications from all 50 states, territories and the District of Columbia requesting funding for almost $60 billion worth of projects—40 times the amount available through the program.

The TIGER (Transportation Investment Generating Economic Recovery) Discretionary Grant Program was included in the Recovery Act to spur a national competition for innovative, multi-modal and multijurisdictional transportation projects that promise significant economic and environmental benefits to an entire metropolitan area, a region or the nation.

“TIGER grants will tackle the kind of major transportation projects that have been difficult to build under other funding programs,” said LaHood. “This will help us meet the 21st century challenges of improving the environment, making our communities more livable and enhancing safety, all while creating jobs and growing the economy.”

The announced funding is designed to create jobs and spur lasting economic growth, reduce gridlock for the traveling public, and provide Americans with “more safe, affordable and environmentally sustainable transportation choices,” the DOT said.

The projects are also meant to help factories, farms and businesses across the U.S. move goods more efficiently and better compete in the global economy. Sixty percent of the funding will go to economically distressed areas, which are home to 39 percent of the U.S. population.

Awardees were selected based on their contribution to economic competitiveness of the nation, improving safety and the condition of the existing transportation system, increasing quality of life, reducing greenhouse gas emissions and demonstrating strong collaboration among a broad range of participants, including the private sector, according to the DOT.

The DOT said it required rigorous economic justifications for projects more than $100 million and will require all recipients to report on their activities on a routine basis. A complete list of recipients can be viewed here, 2/18/2010

Report Indicates More Shippers are Going Green and Expect Suppliers to Follow
Tuesday, 16 February 2010 00:00
Green logistics: Report indicates more shippers are going green and expect suppliers to follow

Not only are corporations getting on the green bandwagon, but they are beginning to demand the same from their suppliers, to the point of cutting loose any suppliers that don't have carbon management plans of their own, according to a new report from the non-profit Carbon Disclosure Project and consultant firm A. T. Kearney.

If your company acts as a supplier to larger corporate clients, you'd better be prepared to discuss sustainability and environmental business practices, because you can bet your clients will want to.

That's the message of the results of a new survey conducted by the Carbon Disclosure Project (CDP), a nonprofit organization that collects climate change data from the corporate world. The CDP conducted the survey with the help of global management consulting firm A. T. Kearney, which released the results last week.

The survey contacted 44 of the CDP's member companies, and the responses from these companies show a strong interest in carbon foot printing and management. According to the report, 63 percent of the companies have "a formal, documented corporate climate change strategy." Even the remaining 37 percent, according to the report, have "general guidelines" in place, and 90 percent of the member companies have plans in place to reduce carbon emissions.

But corporations don't exist in a vacuum, and these same respondents, the report shows, are looking to their partners to follow their "green" example. According to the survey, 89 percent of respondents have "an established strategy" for working with suppliers on carbon-related topics. In addition, 91 percent of members have high-ranking executives dedicated to climate change-related issues within their respective companies.

A. T. Kearney Principal Stephen Easton told SCMR that the strong response from the corporate community on this issue is telling. While the jury remains out on whether or not the December 2009 climate change conference in Copenhagen was a success, Easton said the corporate world has already begun addressing carbon management needs, regardless of what governments are doing.

"We've actually got private sector companies who are driving carbon awareness," he said. "They're getting on with it because they know it's important."

Easton said companies should continue to build that dialogue, along with offering incentives to suppliers to become more environmentally friendly.

In the worst-case scenario, it's certainly possible to take a heavy-handed approach and threaten to deselect the supplier, but "You shouldn't jump to that too quickly," he said.

If it comes to that level of negotiation, Easton said, "There's an element of threat, but also there's an element of collaboration."

But some of the member company respondents are already preparing for that possibility. According to the report, 6 percent of the companies already are ready to de-select suppliers who won't manage carbon emissions, and 56 percent said they planned to do so in the future.

"It is clear that some companies are now requiring their suppliers to address carbon management as a core business issue," said CDP CEO Paul Dickinson. "This is no longer a ‘nice to have' for the leaders, it is becoming a ‘need to have' and we expect to see this trend growing across the whole business sector."

So are the suppliers listening? Easton said he believes they are. The firm invited 710 suppliers to take part in the survey. Of those, 51 percent responded, a much larger number of respondents than anticipated. "I think suppliers are taking this seriously," he said.

Easton said the suppliers are taking the right steps, too. He advised they begin exploring carbonreduction plans. According to the survey, 60 percent of the responding suppliers have appointed a board member to be responsible for climate change issues.

So far, though, only 38 percent of the respondents indicated they have set targets for carbon management and stuck to them.

Suppliers looking to be proactive, Easton said, should be taking these steps. Most important of all, he said, suppliers need to communicate with their customers. In particular, he said, they need to let customers see what their future plans are for carbon management.

"I think they need to be showing customers that this is what they're doing," he said.

Logistics Management, 2/16/2010

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