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

July 4th, 1776...The Logistical Tail of a Revolution

Given my heavy business travel, I read a lot.  I read mostly non-fiction and a lot of history, so when I got an email from a Freightdawg reader about an interesting "infographic" put forth by Derby Logistics on the supply chain challenges of the American Revolution, I was interested.   Most interesting of all were the challenges the British faced in fighting a war 3000 miles away by sea.

The "logistical tail" of an army is the supply chain that keeps the beans, bandages and bullets flowing to the front.   This has been a strategic element of armies from the beginning of time.  It was critical to the defeat of Napoleon and later, the Nazi's in Russia.  It was physical limiter that ultimately contained the Roman Empire.  It's also why some of the finest minds in Logistics today are in the United States military.   It's also one of the key reasons a bunch of farmers and militia folks lead by an aristocratic professional leader like Washington could challenge then eventually defeat the greatest superpower of the age.  

Check this article out on the supply chain that won the American Revolution.   Our country owes much to those who worked to move the materiel that General Washington needed but we also owe our fortunes to the Atlantic Ocean, which forced great hardship on the British.    

Eric

PS: As a guy who spent years working for a British shipping company, I find this fascinating. 

CSX: Tomorrow Moves Project

One of the cool things about Freightdawg is that I get to meet a lot of people in our industry.   This includes the PR and marketing folks at various transportation companies.   I have followed CSX Railroad for some time, not only for their transportation services in the US, but also their very forward thinking marketing on the Green value of railroad shipping. 

 CSX may be the vanguard for the industry on this topic.  At least they have made the effort to spend the money to advertise on TV, Internet and in print on the economic and environmental aspects of rail transportation.  Every railroad from short line to class 1 benefits from that message.  

I was recently invited by CSX to participate as a judge in a very cool contest called the "How Tomorrow Moves" project.   This contest awarded prizes to contestants who best described  CSX's message of how to protect the environment.  Winning contestants would win $5000.00.  Not bad for a 200 word submission!   

Thousands of entries were ranked by followers of CSX on Facebook.   Finalists were then reviewed by a team of judges composed of various industry and media representatives.   Some good ideas were suggested from the contestants and two lucky winners will be selected.  Here is the video CSX used to introduce the contest, which closed May 13th. 

While the contest was cool, what I really liked was that CSX continues to promote not only their marketing message but uses it to promote ideas that go beyond railroading. 

"When CSX launched this campaign around the environment, I really questioned how this effort would help CSX move freight.  

Over time I've reckoned there are a few ways. " 

First, it raises the image of railroads as a viable domestic long haul transportation option vs trucks.  I think many younger people simply do not think about railroads.  Main stream passenger services are largely a thing of the past, so unless you have specific interest to do so,  rail isn't the first way most young professional transportation people think to move cargo. 

Second, I think the green aspect raises the profile of the railroad as an important societal infrastructure component.  This impacts government and political opinion over whether the railroad is a nuisance or a vital, economic and environmental asset to a community.  Trains moving on rail lines near your home could be seen as noisy, dirty and potentially dangerous.  However, when considering they take many, many trucks off the roads every time they move a train,  the trade off begins to have balance.   Considering that alternatives to foreign oil such as coal and ethanol move primarily by rail, the railroad now becomes an important national asset.  

By raising the positive aspects of rail freight transportation, CSX is doing a great thing for the industry.  Why would a politician vote against rail transportation or right-of-way when such vital interests are being raised to the public?    Voters are being educated here.   Given that, this whole message becomes strategic to CSX and the industry. 

By connecting with the public in new media like Facebook,  CSX is attracting the attention of young people.  Transportation is an asset heavy business with relatively few people in it given the size of the businesses involved.   When I started at United States Lines in the early 1980's,  graduates from ivy league schools interviewed with shipping companies.  Not so much any more.  That stopped being cool in the mid 80's when everybody who looked good in a pinstripe suit figured they could be a stockbroker during the Reagan years.   Reconnecting youth, particularly net savvy young people with brains to transportation is a way to bring new talent to the industry at a time when we need it.  

Lastly,  investors look at the media as well as the general public. CSX stock has climbed steadily since the 2009 economic crisis.  I think there is good reason for this.  The rails move the base commodities that power our country and many exports.   Warren Buffet thought railroads a good enough idea that he bought one.  Moreover, he decided to vertically integrate by buying a rail tank car manufacturing company.  If you are an old technology company wanting to impress a new technology investor base, why not use a forward thinking message like the environment to communicate that CSX stock is a good buy?  

All I know is that if I had bought CSX stock when I started in this business (stock in the single dollars) to now (stock in the 80 dollar range), I wouldn't be sitting in Atlanta.  I'd be in the Bahamas posting this! 

This second video is available on the CSX web site, but I think communicates the green value of rail transportation well.

Eric

I left a week ago to go to China for business. What the heck happened with Gas Prices?

I left a week ago to go to China for business. Gas near me in the Atlanta area was $3.10 a gallon at the time. One week later, today...its $3.45 a gallon. Its enough to make one seriously pissed off. I've always suspected the oil companies of price gouging. How can the price of oil go up 1.00 a barrel on Tuesday and have it show up in the price at the pump on Wednesday?

Well, there is apparently a lot more to it that that, though the net effect is about the same. Check this good article out on how gasoline prices work.

http://news.yahoo.com/s/ap/20110307/ap_on_bi_ge/us_pricing_gas

In the meantime, check out one of my favorite sites, gasbuddy.com to find the lowest prices in your area.  For those of you who like me, find Twitter only marginally useful, one of the better ways it can be used is to share immediate gas price changes amongst local peers.

Fuel prices are going to rapidly show up in transportation emergency surcharges and later in the prices of goods.  Look first for these to show in the price of food.   

Somebody settle Libya and the folks in Egypt down because its making my veggies too expensive.

 

Maritime Risk Management

My old colleague from APL,  Don McKay presents an informative talk on maritime risk management in association with the American Public University.   Don's talk focuses on port and cargo security.  He also discusses ways to learn from previous incidents in order to mitigate cargo and safety risk in the future.   It's an interesting talk but I wish it were video instead of just voice over PowerPoint.

Maritime Risk Webcast from American Public University on Vimeo.

Holy Containership Batman!! Maersk Triple-E vessels Announced.

Maersk Line is once again leading the container industry with the order of 10 18,000 TEU vessels designed as Triple-E class ships.  Triple-E stands for Energy efficiency, Economy of scale and the Environment.   These ships will be built in Korea and set for delivery between 2013 and 2015.   They will ply the Asia - Europe trades.   Only Rotterdam, Felixstowe and Bremerhaven have ports deep enough to accommodate ships of this size, which will be bigger than an aircraft carrier.   At well over a billion dollars, its the worlds biggest container ship order ever.  

Maersk used to build all their ships in their own shipyards in Odense, Denmark.  No more,  The Danes finally threw in the flag in 2009 realizing that vessels could be built cheaper in Asia.  Daewoo Shipbuilding will construct the 3E ships.  

These ships are said to be quite green ecologically.  Maersk says the Triple-E class vessels will reduce CO₂ emissions by more than 50% per container moved, compared to the industry average. 

 

The size of these ships to an old steamboater like me is mind blowing.   I started at United States Lines in 1983 back when USL was touting their then new 4400 TEU "Econoships" which were built to travel around the world in an eastbound direction.  

Those vessels failed for a variety of reasons, not the least of which was container repositioning back to westbound origins, USL's newcomer status in the Europe-Asia market, old closed FEFC conference system, limited port calls in Europe and the advent of cheap oil in the early 80's.  It was the cheap oil that killed the deal in reality though.  These were ships that were ahead of their time, being built for slow steaming and economical container movement.   While considered small by today's standards, the USL ships would have been right at home in today's economic environment.

The Maersk Triple E ships are the USL Econoships idea writ large.   Designed for massive container movement, Maersk claims these ships will move a load from Asia to Europe at 30% less cost than current vessels, which are already massive in scale.   I remember when I thought Emma Maersk was huge...at a mere 11000 TEU.    What will be interesting will be to see what the load factors are on the eastbound voyages back to Asia.   I suspect a lot of empty containers will be the main business and a very cheap rate on a revenue load.   NVOCC's will love these ships because there is NO way Maersk is filling these ships up without help from the major NVOCC's. 

The ships this class of vessels will replace won't be going away.  The classes represented by Regina Maersk and Emma Maersk at 7000 and 11000 TEU's will have to go somewhere. The Triple-E's will have swallowed one of each.   I suspect that will be the eastbound transpacific trades.   This could easily bring major new capacity and rate compression to this and other global markets as the big ships cascade to the lesser trades unless Maersk takes a new view about vessel sharing.

Check out Maersk's web site specifically made for the Triple-E Class.   

worldslargestship.com.

Eric

Obama 2012 budget lacks Infrastructure for US Ports

Check out this excellent analysis from Maritime Professional, on the Obama administrations 2012 budget as it regards US maritime port and logistics infrastructure.  

Beltway Blunder(s) - and what to do about them...

Joseph Keefe

Feb 16, 2011, 10:01AM EST

The six-year surface transportation spending plan, as a part of the President’s Fiscal 2012 budget request, focuses largely on roads, air and rail improvements. Federal efforts to improve transportation infrastructure continue to ignore the key maritime part of the equation and crime on the docks also takes center stage. If you work on the waterfront, this is your cue to sit up and take notice.

No Ports: No Commerce
As President Obama asks Congress to approve his $556 billion, six-year surface transportation spending plan, he argues that transportation spending will create jobs and thereby strengthen the economy. A key facet of the proposal calls for $8 billion to be spent in the coming year for Obama's intercity passenger rail program and a total of $53 billion over six years. Monday’s U.S. Department of Transportation press release also fleshes out the massive initiative, calling it “targeted investments in safe, efficient transportation that will spur growth. Nowhere in the statement is there any reference to the ports that carry and handle virtually 99 percent of the supply chain’s output.

U.S. Transportation Secretary Ray LaHood, in a prepared statement, said President Obama’s $129 billion budget for the U.S. Department of Transportation, the first year of a comprehensive six-year transportation plan, will lay a new foundation for economic growth and competitiveness by rebuilding the nation’s transportation systems, enabling innovative solutions to transportation challenges and ensuring the highest level of safety for all Americans. The press release also mentions “moving people, goods, and information more quickly and reliably than ever before.”  He then goes on to talks about rebuilding our crumbling roadways and runways, modernizing railways and bus systems, the “high-speed rail lines of America’s future,” repairing bridges and more than 55 separate highway programs. Conspicuously absent from any of that dialogue is any mention of the waterfront.

Maritime Professional - Beltway Blunder(s) - and what to do about them...

Home from Europe. An Old Friend Revisited.

Yes, boys and girls, Freightdawg is still an active blog, for those of you who have written me.   I took on some newly increased job responsibilities in December and those have kept me running all over the place, including Latin America, Europe and China (next week). I got home from Europe on Friday, having spent the week on planes, trains and automobiles all over the Netherlands and Budapest, Hungary.   I had not been to Budapest before, but this is one beautiful city that I look forward to visiting again once the snow stops flying. 

I've been to Europe many times, but I am always amazed at the efficiency and low cost of the Dutch railways.   I commuted over several days between Amsterdam, Maastricht, Rotterdam, Utrecht and back to Amsterdam Schiphol throughout the week.   Quick, on time and very efficient.   I wish we had these kinds of trains even regionally in the US.  Granted, Holland is a small country with short distances between metropolitan areas.   The citizens are also motivated by very high fuel prices, which push them to seek public transport as well as old fashioned means of commuting, included bicycles.  Of course, it doesn't hurt that the whole country is flat, making biking an easy business.

While I have been an international traveler for years,  for the past 3-4 years my job has put me mostly in the Americas.   I spent my time in North and South America.   I had not been back to Europe since 2003.  On that basis, returning was like visiting an old friend.   When I was with P&O and later P&O Nedlloyd, I spent considerable time in the UK and on the continent.  At one point I had more friends in England than I did in Atlanta.  In fact I once took a weeks vacation in the UK where I had drinks or a meal with different former colleagues daily.

From a logistics point of view, Europe has always been complex.  Historically, you had different countries, different currencies, different customs regulations and different market constituencies based on geographical location within the European continent.  Today, much of the same complexity remains, but now with different twists.  These include a common currency and customs regulations within most of the EU, but still geographical market pressure based on location, whether eastern or western Europe.

New security regulations governing the EU's Import Control System (ICS) are now burdening shippers whose freight is either destined for European consumption or transiting through Europe to other markets.   Following the US lead,  the EU is now requiring additional information on European shipments.   Both air and ocean carriers are putting surcharges on these shipments in order to cover the administrative cost of governmental reporting.

Russia is continuing to grow as a major market in Europe, but also remains complex due to factors that include high inflation, changing tax and customs codes, and security around product transportation.  One area I am now just learning about is the Pan-European trucking market, whether FTL, LTL or Part load shipments.   This business is somewhat different from the US version.  I have little knowledge of that trade, but one of the nice things about working for a major European logistics player is that we have an extensive network and lots of product expertise to draw from.

I look forward discussing some of these Euro focused topics in more detail soon.  Living in a global economy, its a good idea to understand that regional differences and nuances still exist.  Understanding those differences is critical to understanding and designing global supply chains that work, both physically and culturally.   The goal is still satisfying the end customer, whether he lives in Moscow, Russia or Moscow, Idaho.

I'm off to Beijing on the 27th of February.  I'll have more to post from that trip and more in between. 

Eric

An Old Dawg Talks about New Tricks. 2011 awaits.

My friend and former colleague Jerry Hempstead spent 32 years in the parcel business.  He "retired"...and I use that term loosely... in 2006.  In the meantime Jerry and his consultancy practice have been busier than most non-retired people I know.   Jerry possesses a passion for people, intellect for our business and street savvy that make him simply fun to be around if you are a freightdawg like me.  

I've been working in this field for 25 years and I learn every time I talk with Jerry.   Below he shares his thoughts for 2011.  This will be a challenging year in rebuilding the global economy.  Logistics players will be challenged across the board, ranging from carriers to 3PL's and forwarders to the integrators.   Nothing is as it was.

_____________________________________________________

I get a lot of what I would call "negative mail". Items that complain about the decisions being made by politicians. The state of the economy, the housing crisis, the dollar, our taxes and so on. Taken without context, its enough to make one depressed.

Today we are on the verge of entering a brand new year. Most who know me, realize right away that I'm an optimist. Just ask me how I'm doing when you call me... you'll know immediately.  I believe that no matter how bad things are,  I have a daily obligation to determine how I will relate to you. I choose to do so positively.

My life's passion is Logistics.   When I think about it and the future, I get excited.   I've been doing this for years, and I remain motivated about our field of endeavor. While I am retired from the firm I served for many years, I remain active in the industry I love as a consultant, enthusiast and confidant of supply chain professionals worldwide.

I'm a parcel guy first and I remain amazed at our postal system. We in the United States have the greatest postal service on the planet. I have lived overseas and can attest that our service is second to none, when you consider that every citizen has the right to home delivery six days a week. The Postal Service is actually one of the few things our Constitution says the government must provide.

The United States Postal Service employs over 500,000 people. Relative to any other postal service, ours is a bargain. $.44 for one to three day service just about anywhere in the USA is amazing. I think its the most complex logistics provider on the planet when you consider all the classes of mail, the number of pieces they handle and the myriad of sizes and shapes they transport.

As weird as it sounds, the USPS is one of the biggest customers of FedEx and UPS. Conversely two of the largest customers of the USPS are FedEx and UPS. I suspect that FedEx Smartpost gives the USPS more parcels today than any other mailer, and Smartpost has been the fastest growing FedEx service.

Two of the largest logistics players in the parcel world are U.S. companies FedEx and UPS. Take a look at how these two firms performed financially in 2010.  Fedex stock rose by 11% year to date and UPS is up 26%. I think between the two there are over 600,000 people employed globally. We can be proud of both these companies and be thankful they are American flag carriers.

I thought about our road system after seeing a television program on how our infrastructure is crumbling and that we are in crisis. I spend a lot of time "on the road", both here and abroad, and I can share with you that with all its faults our interstate and local road systems are the best there is in the world.

I have been on every continent except Antarctica and I can say that we are blessed to have the network we have today. No other country has invested like we have in our roads, with the possible exception of Germany. We have the most available and largest domestic trucking industry in the world and a workforce that for all its issues generally cares for the customer and about their mission in the transport and delivery process.

The United States has more technology, more ports, more rail track and more modern and sophisticated aviation infrastructure than any other country.  We are blessed.

I have had the opportunity to work for over three decades with a group of people who have passion for their work and for building enterprises that offer services that delight customers. I've witnessed incredible, exciting changes over those decades that have increased the speed, visibility and the consistency of the services being offered. Most of all I have shared my life with a community that has a tremendous work ethic and a wonderful sense of camaraderie that the logistics industry seems to engender.

I have made lifelong friends as a result.

So as we enter 2011 let's focus not on what the press is saying about how bad things are, and let's get to work making a difference each and ever day to make the situation better. Even if its just the pride at the end of the day, that you did your best and for those tasks to which you were assigned that day, you made a difference.

Do these Eight things in 2011.  They will not only improve your business, but your life.

1. Make every encounter with your peers, your customers, your family, your friends a positive one. Brighten up a room when you enter and not when you leave. 


2. Make an effort every day to improve yourself. don't let time get wasted away without content. Use the commute to listen to a book on tape, read a book or article, for goodness sake, what you are thinking is important, write an article. This will make you more valuable to your employer or when you might be seeking new employment or a promotion.


3. Dress like you care about how you look. People make judgements based on first impressions. Sorry but that's just life. Always look like you are enjoying the experience...over time you will.


4. Everyone wants to be assured that they are important, worthwhile and accepted. This includes your family and your colleagues. Take the time to send an email or better yet call or speak face to face and tell them they did a good job, or that you really appreciate something they did.  You will make friends for life.


5. Focus on doing the right things, doing them right and not having to do them over. Do everything as if your job depends on it. Have a sense of urgency and a sense of pride in what you produce. Be thankful you have meaningful work and know there are 400 people out these that would love to have your job (no matter how bad you think your job might be).


6. Get involved. if you are in the freight/logistics business you are remiss if you are not at least attending the local roundtable events hosted by CSCMP. There are other inexpensive and or free organizations that will expand your circle of contacts and if you pay attention will increase your knowledge of the business. Organizations like Toastmasters will help you in may ways to improve who you are and how you communicate and also make you some great friends.


7. Know what's going on with federal and local issues that impact your employer and your continued employment. Then get involved. You can communicate for free with your elected officials. Believe it or not,they keep track of what constituents are saying. You can be on the bus or under the bus. Your choice.


8. You are bright, intelligent, articulate, and motivated if you got this far in the article. Take that power and create a mission for yourself for 2011 and then put it on an index card and post it on your bathroom mirror. Make a decision that 2011 is going to be the best year of your life. List those things that are important to you and to which you will actually devote some time and create one or more things on your bucket list to accomplish in this coming year. My wife has always wanted to go to Poland, the land of her fathers ancestors. Number 1 on our list for 2011 is to get to Eastern Europe. What do you think my odds are of getting that accomplished?

Happy New Year

Jerry

MyProgressiveRailroading.com

I usually don't spend a lot of time promoting other groups, but thought I would recommend MyProgressiveRailroading.com.   This is a professional blogging site for the railroad industry.  It provides good insights particularly into the North American rail market, light rail and industry trends. 

I get daily updates emailed to me from progressive railroading magazine, and this blog site is an extension of that excellent service.

Eric

 

Already Gone...

I've been in a rail fan kind of mood lately and reloaded Microsoft Train Simulator on my PC.  This is an old sim from almost 10 years ago, but being a transportation geek, I enjoy virtually moving trains around, especially Double Stack Trains and the old F and E unit car body locomotives... However, this is a French Duplex high speed train.  Speed to BURN baby.

That looks pretty cool...but this is a game. Check this video out. This is the real deal absolutely screaming across France.

Here's another video that compares the French TGV against the Japanese Shinkansen.  I've had the pleasure several times of riding the Japanese bullet trains.  They are fabulous.

And yes, I have a fairly current gaming computer.  I get over 50 frames per second in this old sim.