Eric Joiner's Freightdawg.com - The Logistics and Supply Chain Blog!

The Real Meaning of the Pledge

Tomorrow is America's birthday.   We live in a difficult and tumultuous world with difficult economic circumstances.  However, I am intensely proud and humbled to be an American.   I know that I and my family are lucky to live in the greatest country in the world. 

 Red Skelton I think is one of the most talented American comedians of the 20th century.  In 1969, he did following bit on his CBS television show.  It's one of the greatest renditions of the American Pledge of Allegiance ever done.  

For those who visit here who are not American, the Pledge is an oath that used to be a part of the start of every school age child's day.  It has meaning beyond the understanding of children. 

Enjoy.  

Eric

Bruce at the Beach

In an earlier post, I mentioned the impact that Bruce Alexander is having posting youtube videos of daily beach conditions down in south Alabama at Orange Beach, Gulf Shores and Fort Morgan.  He is providing a service, but if you watch whats happening, a community is being built.  People now rely on Bruce for honest news.

Now heres whats interesting.

He also now has people wanting to meet him when they visit Gulf Shores.   That has significant impact in terms of his ability to build his real estate business.  It also has significant impact relative to his political significance as an alternative source of news on this issue.  Bruce will sooner or later be considered a defacto authority on whats going on in his community.

I'm fascinated to watch the internet benefit people.  Check out the value of what Bruce brings to the web daily.  

There is no doubt that the BP oil spill is going to damage the communities of the southern United States (and later, other countries I'm sure.)  However, I suspect Bruce is doing some very smart things to not only help his community, but also his business.   I don't think that was Bruce's first thought, but its a great benefit. 

This is why the internet and blogging just fascinates me.

Eric

Clarification: Jones Act and the Oil Spill

Following on yesterdays article on the oil spill mess in the Gulf of Mexico,  I got a very good comment from a reader who pointed me to a site called Deep Sea News that breaks down the Jones Act issue and its impact on the BP Deep Water Horizon oil spill clean up.

The Jones Act does prevent use of foreign vessels in US domestic commerce, but apparently is not directly preventing clean up activities in the Gulf by foreign owned skimmers etc.   The Jones Act involves those domestic waters out to 3 miles from the shore.  Activities conducted beyond the 3 mile limit, in international waters, are still open to use by any ship of any flag.    In fact the Deep Water Horizon well itself is beyond 3 miles from the coast of Louisiana.

I will stand corrected (and updated) in my comments on the concerns on the Jones Act, though I still think the President should set it aside for this particular catastrophe.  Thanks TG for your excellent post in response.  I'll admit I got suckered by Fox News on this one.  

Eric

The Mess In the Gulf of Mexico

Last week we took the kids to the beach down in Gulf Shores, Alabama.  My bride's sister and brother in law own a condo that we get a chance to use periodically.  We had a BLAST.  

The water was beautiful, the sand was sugar and the weather was great.   Just the kind of break we needed after a long winter and busy spring.  We were fortunate because we don't pay anything to use this family owned condo overlooking the beach.  Gulf Shores was also fortunate, because if we had been paying a typical rental of as much as $1500.00 a week, there is a very high likelihood that we wouldn't have made the trip.  Too much money for the risk of an oily mess on the beaches.   Lucky for us, it was free and the beach was great.  So we went and spent our money in restaurants, shops, movies and the outlet mall.

Interestingly, if you listen to the locals, its not the oil that's killing the Gulf tourism business.  it's the national news.   We heard multiple stories of news folks getting out of their satellite equipped vans in their pressed suits and making a news video with the ocean in the background.   The only thing is, they didn't get within 100 yards of the actual water. They had no clue as to the actual water conditions that day.  This goes out over national airwaves (and probably gets picked up internationally too.) and everybody thinks the Exxon Valdez ran up on the beach.  The truth is, there is more oil afloat in the Gulf of Mexico than the Exxon Valdez ever held.   But its not ashore everywhere.   Beaches are dynamic ecosystems.  Its different every day.  One day may be great, and 4 days later, there may be tar balls. 

There is a guy doing one HELL of a job in keeping would be vacation travelers honestly informed.   Bruce Alexander is a local Realtor in Gulf Shores, who runs a web site called Bruceatthebeach.net.   Bruce goes down to the ocean daily and makes a youtube.com video reporting daily on water conditions, oil clean up etc.   For folks like our family, considering and anguishing over whether to go to the beach, this guy is doing yeoman's work.    I will say this, not only is he helping his community and would be tourists,  I'd buy a property from him.  Anybody who cares this much, must be a good guy to trade with.

This isn't a post about Bruce or the beach really.  This mess is going to take my 2 year old grandsons life time to clean up.  And with millions of gallons of oil now in the global ocean currents,  its a global problem.  Two years from now, I will not be surprised for some of this oil to be found fouling landmasses in Ireland.  The clean up effort is an environmental and economic nightmare writ large.   Who knows how many whales and other lifeforms have died and nobody knows?  

The video below shows what this oil really looks like at sea.  Its a mess, and its everywhere.   From thousands of feet below the surface of the sea to tar balls on the beach.  In thicknesses ranging from heavy brown tar to a viscous shine, this junk permeates the ocean at all levels.  A hurricane would just stir it up like salad dressing in a shaken bottle.

Deepwater Horizon oil spill flyover

There is a large flotilla of ships and activity throughout the northern Gulf of Mexico right now.  It's costing the American people billions of dollars.  (Like we need that with the War in the Middle East, the recession and Obama trying to nationalize healthcare)  People are losing their livelihoods, but at the same time, somebody is making money.  I'd like to own a company that made oil booms or did heavy marine engineering.  Own a septic tank pumping business with pump tanker trucks?  Send em to the Gulf.   The government is paying $50.00 an hour 24 hours a day to move oil from recovery ships to holding tanks and tankers.   Now there is a Logistics Business. 

I believe we borrow the environment from our children.  My children and grandchildren will be paying for this one for their generations lifetime.   That is the real tragedy. Hopefully, the oil companies, the governments and the people will be able to clean this mess up.   To the extent the logistics business plays a role, I hope as an industry we step up and play our part.  God knows, if any shipping company has assets useful in the clean up of oil, they are needed.

To this end an open appeal to Mr. Obama:  Please issue an executive order temporarily suspending the Jones Act restricting foreign vessels in US trade.  There are Dutch and Scandinavian ships specifically designed to collect oil etc. These ships are needed in US waters doing what they are designed for. If you are leading on this issue, lets suspend the bullshit and get with the program for the good of our people and the environment.

Eric

Dang it. Clinton May be Right.

This blog is about logistics. You will find almost 500 posts here and only one or two that are politically related.  That's on purpose.  I try to stay within the boundaries of my business.

In this case however politics is my business. Former President Bill Clinton gave a speech recently at the University of California, Berkeley,  warning about the power of words and the potential of rhetoric to incite harm.  Specifically Clinton referred to the strong negative discourse today between Tea Party Republican /conservatives and supporters of the current government over a host of issues, with healthcare being at the center.  

In this case, I think Clinton meant to align the Tea Partiers with radicals, which I disagree with, but I think he still has a bigger point worth noting. 

Clinton reminded the audience that in 1995 similarly strong sentiments were running when Timothy McVeigh and accomplices bombed the Federal building in Oklahoma City.  His point was that words have strong meaning and what may be political rhetoric for elective purposes for some, may incite violence from others with a more literal interpretation.  Speech is free, but it is not without cost. 

The key point with which I agree with a president I did not support,... is that the words we say to each other matter.  As Americans, political balance is one of the  reasons our democracy has been successful. I also believe it's the reason our economy has been as successful as it has for almost 235 years.  Weights and balances allow dialog, even difficult dialog, to take place.  Political dialog allows a free market economy to work.

What happens nowadays though, especially amongst we bloggers, is that information and opinions, regardless of viewpoint, are now as free as electrons.  Crazy can travel as freely as traditional.  Words incite actions, even unintended actions.  What's dangerous is that what's crazy to you may be both sane and logical to me.  Even more so, cultural collisions now happen instantly thanks to the Internet.

Where that comes back home to my world is that it costs the global economy serious money to scan freight shipments and packages for explosives.  It also costs big money in airline and shipping company practices and policies on security.   Doubtless, much of this is borne on the back of 911 related terrorism, but domestic terrorism is also a factor.   I suspect your office building has different security measures now than it did in 1990.   That's a result of both domestic and international attacks on our country. 

Ultimately, I think this comes down to respect.   Difficult to enact other than through restraint. I'm not talking about being politically correct.  That's only a way of masking true feelings with obtuse words.  What I'm talking about is being educated on the issues and speaking in a way that engages discussion.

I'm about driving costs out of supply chains, which means finding a safer world.  I hate to think the only way to do that is to ramp up the security investment while the rhetoric takes the same arc.

I don't have all the answers here, nor am I sure my opinion is completely coherent.  But I know that the ramped up conflict increases risk, and risk costs money.

Eric

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C&W comments on Commercial Property Trends

Cushman & Wakefield are global commercial real estate brokers specializing in commercial real estate space.  Their interests in both commercial office space and warehouses are substantial.  As a result, C&W have produced an interesting white paper that documents trends in commercial warehouse space in both the Americas and globally.  

Interesting findings include:

• Global industrial rents declined by an average of 5.5% in 2009
• While the Asia Pacific region saw the largest decline in rents (-6.4%), it is also the first to show signs of stabilizing due to an up tick in exports and rise in production
• Ottawa now replaces San Francisco as the most expensive city for industrial space in the Americas
• In the US, an increase in consolidation has caused a trickle down effect including an increase in supply of space and a downward pressure on rental rates
• Upturn in domestic consumption and regional trade will be the determining factors in the strength of recovery in occupational demand

The global info in the C&W white paper didn't surprise me.  However, some of the trends in the Americas were of interest. In particular the expense of commercial property in Canada and Mexico.  Both are growing markets, but the cost of commercial buildings surprised me given the downturn in the global economy.

Download the white paper here.

Eric

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Logistics will Save Haiti

George Clooney and Wyclef Jean have their hearts and minds in the right place.  Both championed and created the "Hope For Haiti" Telethon that debuted tonight on HBO.   I watched the show and was impressed with the number of TV and movie stars that donated their time and money to the cause.  Common folks calling in donations but getting the phone answered by Julia Roberts, Steven Spielberg, Mel Gibson, etc. were impressed.  No doubt MILLIONS will be donated.  

Then tomorrow will come.   The money will be contributed to major charity and relief organizations who will convert the cash into usable materials and food.  All that stuff will then need to be delivered to the island nation of Haiti. 

Haiti is one of the poorest nations on earth. Its poor people are known to eat mud cakes just to have something in their bellies.  I know this because our church has a twin parish in Haiti.  Take that poverty and add a very thin layer of social infrastructure in terms of electric power, gas and communications as well as fuel, and what you have is a little crust of a society that can be broken with a strong wind.   Much less a 7.0 earthquake.

Despite politics, people are sympathetic to anything that puts children at risk.  Images of little children being rescued from collapsed buildings will immediately interest anyone who has had a kid of their own  (and rightly so!).  Our humanity is called to action!   Many nations have sent medical and rescue teams to Haiti to save victims.  Companies, including my own employer, DHL, have sent Disaster Response Teams to help with the efforts.  For the most part, these are very brave volunteer forces.

Lets break down what needs to happen.   The Port au Prince airport normally handles about 35 flights a day.  The American aircraft carrier, USS Carl Vinson is now near shore and with her Navy air traffic controllers as well as USAF controllers, inbound flights are up to 100 per day. The inbound freight is staged in the open air, which is a risk, but it's on the ground, which is at least a positive.  Canadian forces are working to open a second airport at Jacmel but the time table to get that organized is not firm.   Port infrastructure at the port of Port au Prince was heavily damaged in the quake, with the container cranes there being knocked off their rail mounts or knocked over. The US Navy is engineering the reopening of the port now to allow relief aid to enter the country.

There is no aviation fuel on the island.  This means that inbound flights must have at least enough fuel to redeploy to a near by airport.    The crux of this is that an airplane that has to carry extra fuel to repatriate to another country can carry less in the way of relief goods.  For this reason the United States has set up a staging base at Guantanamo Bay in Cuba.   For more nefarious reasons, the world at least knows exactly where Gitmo is.  I suspect Miami, San Juan and perhaps airports in Cuba and other Caribbean nations will serve similar roles.  

Given the tactical nature of this rescue effort, I think the hero of the campaign will be the venerable C-130, which has been ideally suited to tactical materiel delivery since the 1950's.

Once goods are on the ground, the key will be how efficiently they are distributed to those who need them.   This is an area where I feel our industry has expertise to share.  Shipping lines, airlines, trucking companies, contract logistics (warehousing and TMS) firms all have expertise gained by handling the worlds global commerce can help Haiti.  Haiti has no distribution network.  For this reason a green field opportunity exists to put this little impoverished nation on a new footing. 

The world will provide Haiti with billions of dollars in assets and infrastructure it would never have had access to before this earthquake.  Despite its chronic poverty,  Hollywood stars weren't concerned with Haiti until it hit a world stage.  For this reason I take at least some of the "stars" with a big grain of salt.  In my opinion however, Wyclef Jean is a Haitian patriot.  He stands for his countrymen as a voice in the west.

It will take years and many global dollars, but I wonder in the end, if this earthquake will not turn out to be a blessing of sorts for the nation of Haiti?  Many of her citizens have perished tragically, but I can think of no other event that might have pushed the worlds "first world" countries to be so forceful in helping the least of the third world.

Almost assuredly, the Hollywood movie stars had their minds on other things...as did we all.

Eric

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A Merry Auburn Christmas!

I'm an AU grad in marketing and transportation...granted a few years ago now... 

Im also given to putting quite a few Christmas lights on our house, however this is inspirational for we Aubies.  

Enjoy because there is some actual engineering involved in this one!

2009 Lights On Merrimac Ridge Animated Lights from Merrimac Ridge on Vimeo

How to Get Obama to pay for my fishing trip

 I have a birthday coming up in the next couple of weeks.   I usually go fishing a couple of times a year with a great uncle of mine and other family members.   This fall it happens to coincide with my birthday.  Given that these trips are not cheap and that we employ guides who do not work for free,  I figured I'd solicit my parents and brother and sister to kick in some escarole (money) to offset costs and as my birthday present.   My family likes to give electronic gifts like Amazon gift certificates, so this is right up their alley.  Anyway...so I send an email to my tribe...

My brother Harry, who is a very successful executive recruiter and general contrarian, gets the gmail thread started by saying he'll match funds with any relative who kicks in a certain amount.  My Dad, who is a brilliant guy but another comodian, says he will kick in $10.00.  Sis says she'll match.   My mother is a willing participant but has no idea how to play. (typical.)  So brother Harry gives her this idea.  How about lets use the Obama Stimulus plan to pay for Eric's trip?

   H-man sends the following:

Send Eric a check for $300 and then file a $250 stimulus voucher with the federal government.  your tax deferred gift will be $50, which you can deduct on a straight-line basis through 2014.  in about 10 weeks, you should see a rebate check from the Obama administration.  I will match your first $50 and include that with my contribution.  my total contribution of $150 will then be grossed up for tax purposes and filed with a W2 to the IRS, "Department of Fish and Game Tourism, Special Programs."  this tax deduction will be used to offset the TARP funds that were allocated to Freddie and Fannie under the bush administration.

For more info or to get a copy of the form for this plan, please call the Department of Fish and Game Tourism, Special Programs at 1-800-366-2661.

Now here is the question Freightdawg readers:  Will this work?   Harry says he made this up, but its just clever enough that with the right twist...who knows.

If it does I might just vote for Obama next time around!

Eric

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Jerry goes to Yellowstone

My friend Jerry Hempstead has been traveling out west with his bride and yesterday emailed me something that was a cross between a travel log review and a rant.  I found it humorous, but somehow reflective of Obama administration pending policy on health care.    Read on.

"In an effort to help stimulate the economy and to keep the Mrs. happy we spent the first 10 days of July touring Mt. Rushmore, Little Big Horn, Yellowstone and Grand Teton.

The trip had been one of my wife's dreams as she is a fairly accomplished photographer and this part of the country offers opportunities for great photos. I was taken aback while here to find that our government through the contractor here has learned the art of improving yield the way the transports do.  Accessorial fees...and not small ones.

When you check into your hotel at Yellowstone, for example, they offer you the use of a card so that you can charge things to your room such as meals in the dining facility. Well if you do use the card they charge a fee. I learned my lesson after the second day when I came to find out that the fee for a dinner of $56.06 was $8.50 and the fee for using the card for a $27.40 breakfast was $4.

Now that's not the best of it. They charge a "Utility Fee" for just about everything you buy here at the National Park. An it appears the utility fee is in some instances subject to a minimum charge just like the transports do. So that breakfast for $27.40 had a $1 "utility fee" applied to it. There was also the sales tax of $1.55. Now recall that I charged this to my room and got hit with the $4 fee for doing that. To add insult to injury when I checked out they charged me tax and a another utility fee on the grand total.

When I inquired as to what this utility fee was (at all three Yellowstone hotels I stayed at) nobody could explain it. They handled me a card with some mumbo jumbo about environmental stewardship and thats why I need to "participate" in the utility fee.

The reality here is that the services in the national parks are a monopoly managed by our government for "we the people".

The hotel room prices are some of the highest I have ever paid, and I've traveled the world over in 32 years of peddling freight.  The hotel at Lake Yellowstone is in my humble opinion a dump that should be demolished and rebuilt. It is past the point of repair for historic sentimentality.  $216 a night for a small room with the wallpaper pealing and a bathroom so dirty even the bugs would not go in it.

In an effort to be good stewards the light bulbs in the room I think were 25 Watt, just enough that you would not bump into things but not bright enough to recognize who was in the room with you.

Gasoline costs $3 a gallon here because there is no competition. That's true of the overcharging for everything.  All the stores are managed by the same company that manages the hotels and the dining. All overpriced.  So here I am on independence day in our national parks - which I as a citizen am told belongs to me, and I'm being ripped off by the government that I have elected to run the place."

Somehow this makes me think the Obama health care plan will be similar.

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