June 2007 • Vol

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TRANSPORTATION SOLUTIONS FOR BUSINESS EXPEDITED I GLOBAL I SPECIALIZED I TECHNOLOGY I EXHIBIT I STANDARD GROUND I REGIONAL I NEXT DAY June 2007 • Vol. 27 • No. 6

THE MAGAZINE FOR DEMAND DRIVEN LOGISTICS

INBRIEF INDEPTH 8 10 TIPS How to get involved with  Air Cargo Navigates Uncertain Skies transloading. Criss-crossing issues such as high fuel prices, new security regulations, 17 GLOBAL LOGISTICS and competition from other modes, the air cargo industry ﬂ ies on to 21 TRENDS what it cautiously hopes will be a strong future. 108 NEW SERVICES  Who’s Who in Airfreight Forwarding 112 TECH UPDATE To get your search for an airfreight forwarder off the ground, check out 120 THE LAST MILE: this list of leading players. IMPORT/EXPORT TIPS A Special Supplement from Inbound Logistics and Chemical Week

Industry Outlook: SPECIAL SUPPLEMENT: Faring Well, Despite Challenges page 40 Taking Responsibility  For Responsible Care page 46 Shippers and Chemical Logistics Carriers Commit to Best Practices page 50 Producers, Providers, Technology Merge page 56 What is the state of today’s chemical Chemical Logistics A Study in Terra page 61 C06.2007L logistics market? How do hazmat shippers and carriers deal with safety concerns? What logistics best practices are chemical producers embracing? Find out in this informative resource from Inbound Logistics and Chemical Week.

June 2007 • Inbound Logistics 39

SPECIAL SUPPLEMENT:  Race to the Border: Catching Up With Latin American Logistics Progressive trade policies and foreign investment, developing transportation infrastructure, and a growing 3PL presence in Brazil and Mexico are heating up Latin American logistics.

June 2007 • Inbound Logistics 1 June 2007 • Vol. 27 • No. 6

THE MAGAZINE FOR DEMAND DRIVEN LOGISTICS

MEET THE TEACHERS page 85

INSIGHT INDEPTH 4 CHECKING IN A new look at logistics in the  CAREER SOLUTIONS Meet the Teachers New World. Meet three professors using creativity, technology, and real-world 24 VIEWPOINT experiences to educate the next generation of logistics leaders. Learn to love sourcing in a seller’s market. 26 RISKS & REWARDS Should you use a foreign or INPRACTICE domestic insurance company?  READER PROFILE Steve Lash: Loco Like a Fox Steve Lash, director of supply chain management for chain restaurant INFO El Pollo Loco, is no chicken when it comes to plucking away at corporate 92 CAREER SOLUTIONS logistics challenges. RESOURCES 102 WEB_CITE CITY  SUPPLY CHAIN TECHNOLOGY What Are Your Tech Vendors Up To? Missed this year’s D/C Expo? Here is the latest from the top logistics IT 115 CLASSIFIED vendors at the conference. 116 RESOURCE CENTER

 LIT TOOLKIT Box Ho! RFID Replaces Telescopes Searching high and low for containers wasted time for CIMC. So the company turned in its telescopes for an RFID-based yard-tracking system.

2 Inbound Logistics • June 2007 Plumbing ﬁ xtures from Memphis, TN. Delivery by Stethoscopes 11:45 a.m. from Miami, FL. Delivery by 2:45 p.m. Camera equipment from Boston, MA. Delivery by Computer games 2:15 p.m. from Shanghai, China. Delivery by 1:35 p.m.

Automotive parts Nose landing from Monterey. gear from Toronto, Mexico, Delivery by 1:30 p.m. Canada. Delivery by 12:45 p.m. Flash drives from Chicago, IL. Delivery by 12:25 p.m.

MRI machine from Philadelphia, PA. Delivery by Plasma TV from 2:25 p.m. San Diego, CA. Delivery by 12:15 p.m.

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Vol. 27, No. 6 June 2007 THE MAGAZINE FOR DEMAND-DRIVEN LOGISTICS www.inboundlogistics.com

STAFF

PUBLISHER Keith G. Biondo by Felecia Stratton | Editor [email protected] EDITOR Felecia J. Stratton [email protected]

ASSISTANT MANAGING EDITOR Amy Roach Partridge [email protected] Sailing Into the New World EUROPEAN EDITOR Joseph O’Reilly EDITORIAL ASSISTANT Mark Rowan

CONTRIBUTING EDITORS Merrill Douglas he Spanish and Portuguese sailed into the New World half a millen- John Edwards Lisa Harrington nium ago seeking fame and fortune. Today, a new breed of intrepid Amanda Loudin business explorers is ﬁ nding safe anchorage in Latin America, target- Deborah Ruriani T Lisa Terry ing the area’s abundant potential for manufacturing and logistics activities in CREATIVE DIRECTOR Michael Murphy hopes of achieving fame and fortune of their own. [email protected]

Inbound Logistics ﬁ rst made editorial inroads into Latin America in 2004 PRODUCTION/DESIGN ASSISTANT Shawn Kelloway with the debut of Inbound Logistics Mexico, a monthly publication that [email protected] reaches 15,000 transport and logistics professionals in Mexico. In this issue, PUBLICATION MANAGER Sonia Casiano we are extending our editorial coverage in Latin America and beyond, with [email protected] a special Latin America logistics supplement available in English, Spanish, CIRCULATION DIRECTOR Carolyn Smolin and Portuguese, in print (page 63) and online (to subscribe visit: www. SALES OFFICES

inboundlogistics.com/mx or www.inboundlogistics.com/br). NORTHEAST: Keith Biondo Asia and Eastern Europe currently command the immediate purview of (212) 629-1560 • FAX: (212) 629-1565 [email protected] global sourcers and outsourcers. But Latin America remains in peripheral sight WEST/MIDWEST/SOUTHWEST: Harold L. Leddy and is gradually turning heads in high places as transportation and logistics (847) 446-8764 • FAX: (847) 446-7985 infrastructure continues to mature. Recent U.S. investment in Latin America, [email protected] largely attributed to NAFTA and CAFTA trade agreements, conﬁ rms this trend. Marshall Leddy (763) 416-1980 • FAX: (763) 201-4010 Between 2003 and 2005, U.S. foreign direct investment in Latin America grew [email protected] from $297 billion to $353 billion, with Mexico ($57 billion to $71 billion) MIDWEST/ECONOMIC DEVELOPMENT: Jim Armstrong and Brazil ($30 billion to $32 billion) capturing the lion share of U.S. outlay, (815) 334-9945 • FAX: (815) 334-1920 according to the U.S. Bureau of Economic Analysis. [email protected] While globalization opens new avenues for trade such as Latin America, it SOUTHEAST: Gordon H. Harper (404) 350-0057 • FAX: (404) 355-2036 also places greater burdens on transportation connections, often requiring the [email protected]

expertise of third-party intermediaries. The air cargo industry, for example, is MOBILE, AL: Peter Muller rife with questions about consolidation, security, and rising fuel prices, yet still (251) 343-9308 • FAX: (251) 343-9308 [email protected] continues an upward climb as you will read in Lisa Terry’s article, Air Cargo SPECIAL ACCOUNTS: Joseph T. Murphy Jr. Navigates Uncertain Skies (page 28). Not surprisingly, airfreight forwarders are (203) 254-9595 • FAX: (203) 259-4447 capitalizing on this uncertainty. Our annual Who’s Who in Airfreight Forwarding [email protected] (page 34) offers some clarity, with detailed snapshots of some leading players SALES MANAGER: Rachael Sprinz (212) 629-1560 • FAX: (212) 629-1565 to help you make informed decisions about potential partners. [email protected] Rounding out this month’s editorial coverage is our annual Chemical FREE SUBSCRIPTIONS Logistics supplement (page 39). In concert with ChemicalWeek, Inbound Logistics www.inboundlogistics.com/free offers an in-depth look at the fast-growing chemical industry, complete with shipper case histories, logistics best practices, and profi les of available services Inbound Logistics welcomes comments and submissions. Contact us at 5 Penn Plaza, NY, NY 10001, (212) 629-1560, and solutions for companies involved in the chemical supply chain. Fax (212) 629-1565, e-mail: [email protected]. Whether you are looking for low-cost sourcing locations, trying to keep For advertising, reprint, or subscription information, call (212) 629-1560, or e-mail [email protected]. Inbound pace with the air cargo sector, or perplexed by ever-changing hazmat protocol, Logistics is distributed without cost to those qualifi ed in North America. Interested readers must complete and return the this issue offers a comprehensive overview of trends shaping the new global qualifi cation card published in this issue, or may subscribe world – and perhaps a little more incentive to fl aunt your company’s global online at www.inboundlogistics.com/free. Subscription price to others: in North America: $95 per year. Foreign subscriptions: conquests. Has your company made a successful leap into Latin America? $129. Single copy price: No. Amer. $10, foreign $12, back issues E-mail your discoveries to [email protected]. ■ $15. Periodicals postage paid at New York, NY, and additional mailing offi ces.

4 Inbound Logistics • June 2007 Find opportunities in your global supply chain. Without feeling like a fish out of water.

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Loco Like a Fox

chicken is actually corn with the cost of chicken,” says Lash, who’s feathers,” Steve Lash says. He responsible for buying and moving “A should know. Lash is direc- about 700 items for the company’s retail tor of supply chain management for El locations. “That’s the key to business: Pollo Loco, a restaurant chain that built anticipating costs, and making logistics its success on citrus-marinated, fl ame- decisions about the what, when, and grilled, Mexican-style chicken. With how many, and ways to pay for it all.” more than 360 stores in seven states, Lash left Burger King to join El Pollo and a 12-state expansion underway, Loco, where he was charged with cre- El Pollo Loco (Spanish for The Crazy ating a new supply chain management Chicken) runs through a whole lot of group for the chicken chain, after a LASH IN A FLASH drumsticks, breasts, and wings. spin-off by its former corporate owner That’s why Lash’s fi rst stop on the left it without that piece of infrastruc- NAME: Steve Lash web each day is the Chicago Board of ture. He reports to the chief fi nancial TITLE: Director of supply chain Trade’s site, to check the price of what, offi cer. management, since 2000 from his point of view, is basically Along with purchasing and distri- chicken feed. bution, Lash also used to run quality COMPANY: El Pollo Loco, Irvine, Calif. “As goes the price of corn, so goes assurance, but El Pollo Loco recently PREVIOUS Armored cavalry offi cer, U.S. EXPERIENCE: Army; operations manager, Carolina Freight; buyer, Ralston The Big Questions Purina, Commodities and Consumer Products Group; What do you do when you’re Business motto? logistics manager, Rich Foods; not at work? Make it happen. director, supply and distribution, I’m an avid skier and sailor. On Saturdays in the fall, my wife of 35 years and I What makes for a great day on the Burger King Corp. job? cheer for the University of Tennessee EDUCATION: No unhappy customers, internally or B.S. in logistics, University of football team and for any team playing externally. Tennessee, 1972 against the University of Alabama. What’s in your briefcase? Ideal dinner companion? A copy of Kitchener’s War: British If I had the opportunity to have dinner Strategy From 1914 to 1916, by with Jesus, he’d probably say prophetic George H. Cassar. Lord Kitchener was things that I wouldn’t understand. Then responsible for Great Britain’s supply I’d torture myself the rest of my life efforts during World War I. It’s amazing, trying to fi gure out what he said and but logisticians today can read this how to live that every day. So instead, I book and say, “Oh my gosh, I face the think I’ll just have dinner with my wife. same challenges!” Her, I understand.

6 Inbound Logistics • June 2007 established that as a separate depart- “If you don’t have a direct backup, at ors of corporate expansion. “At Burger ment, staffed by people Lash hired and least have a contingency plan in mind,” King, we opened new territories in the trained. Lash advises. United States and expanded interna- One big logistics issue for El Pollo El Pollo Loco’s current expansion tionally as well,” he says. Loco is the fact that many of the prod- also poses a logistics challenge – espe- That posed some interesting difﬁ cul- ucts it uses have a shelf life of only cially when the company ﬁ rst enters a ties. “It was a challenge, for example, to seven to 10 days. new market, before it starts to realize expand into areas where products have “Managing products that are sourced economies of scale. to be Halal-certified (manufactured in California, and have to be served on “If a store requires 700 items, I have according to Islam’s dietary restrictions),” the East Coast before they expire, is more to make sure all 700 items are there,” he says. And in some countries, health challenging than handling products with Lash says. That’s Lash’s job whether El departments require pages of docu- a more extended shelf life,” Lash says. Pollo Loco operates one or 100 stores in mentation on a single product. When One key to meeting that challenge an area. But the more stores, the sim- a restaurant uses hundreds of products, is redundancy – in suppliers, products, pler his task. “It’s a lot easier to buy a those pages pile up fast. and anything else that might require an truckload of chicken than it is to buy “But in the United States, you just alternative if demand suddenly outstrips two cases,” he explains. have to answer who, what, when, supply, or events diverge from plan. Lash doesn’t shy away from the rig- where, and how many,” Lash says. ■ 25Celebrating Years Aeronet is currently celebrating its 25th Anniversary of consistently delivering excellence in logistics services across the nation and around the world. Its strong company culture based on three pillars of Integrity, Commitment and Passion, together with a “Make It Happen” attitude by all its associates, is the source of most of our success in business.

42 Corporate Park, Suite 150 • Irvine, CA 92606 (800) 552-3869 • Fax: (800) 559-7090 • [email protected] www.aeronet.com

June 2007 • Inbound Logistics 7 10TIPS STEP-BY-STEP SOLUTIONS

by Deborah Catalano Ruriani

Getting Involved in Transloading

hen executed correctly, trans- tents of three standard 40-foot ocean destined for one location, deconsoli- loading goods from one containers ﬁ t in two 53-foot domestic date the contents into separate trailers W transport mode to another trailers. So, using transloading, your bound for several destinations, and can help shippers increase flexibil- company pays for two inland ship- combine the goods with other ship- ity and supply chain velocity, reduce ments instead of three. ments bound for the same destinations. cycle times, effectively plan distribu- Or, consider a DC bypass/direct-ship tion to meet market demands, and Use transloading to offset supply program: ship a portion of inbound reduce shipping costs. But transload- 3 chain volatility. As supply chains freight directly from your transload ing can be a tricky practice, warns Dan become increasingly global, they facility to your end customer, then Bourcier, deconsolidation manager also become more volatile in terms transload and ship the balance to your for APL Logistics, a logistics provider of delivery reliability. The flexibil- distribution center. Transloading also based in Oakland, Calif. To help you ity transloading affords can help. For provides the opportunity to perform avoid common pitfalls when getting example, you can fit reloaded ship- value-added services such as labeling involved in transloading, Bourcier ments into an intermodal trailer or for direct-to-customer shipments. offers these 10 tips. truck, depending on which has the capacity to meet your speed-to-mar- Set your clock. Unloading, han- Steer clear of a “one-track” approach. ket needs at that particular time. Or, 5 dling, and reloading shipments 1 Remember, transloading is mul- you can expedite shipments by using can be time-consuming. Expect timodal; it does not only involve trucks with team drivers instead of a transload turnaround to take 48 to rail. Many transloading operations intermodal to make sure hot orders 72 hours from the time an ocean con- help shippers blend ocean and ground meet customer shipping expectations. tainer is available at the port to the transportation by pairing international You not only offset volatility, but you time it leaves the transload facility. Be ocean shipping with domestic truck- also can shave 25 to 40 percent off sure to factor transloading time in your ing or intermodal rail, depending on transit time with this method. total transit estimates. which offers the best combination of cost and speed to market. Combine transloading with cross- Realize that transloading is not 4 docking and deconsolidation. 6 a one-size-fits-all solution. The Become familiar with transloading Embracing transloading means added costs associated with re- 2 economics. Convincing manage- you already rehandle shipments, so hand ling product may outweigh the ment that extra shipment handling why not add cost-cutting supply chain transportation savings that come with and transfers will reduce supply chain functions to the process? Instead of transloading for East Coast importers, costs may be difficult. Arm yourself transferring all goods from one ocean who are usually closer to their end users with the facts: on average, the con- container into one domestic trailer and have shorter ground transit times

8 Inbound Logistics • June 2007 NO TWO SUPPLY CHAINS ARE ALIKE. THAT’S WHY WE APPROACH THEM ALL THE SAME WAY.

First, we get busy analyzing the way your goods and information ﬂow from here to there. Then we determine what, if anything, can be improved. Then, we improve it. Whatever the challenge, if it involves transporting goods across town, cross-country, or overseas, we’ll partner with you and together we’ll create solutions for your supply chain that are uniquely yours.

When pre-packaged solutions just won’t do, think red instead.

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THINK RED INSTEAD 10TIPS ‹ CONTINUED FROM PAGE 8

than West Coast importers. Also, con- Invest in technology. Transloading pare a request for proposal, sift through sider product characteristics, size, shape, 8 improves the way you transfer responses, and make your selection. and weight when deciding whether to goods – make sure your informa- adopt transloading. Awkwardly shaped, tion transfer practices are equally agile. Include your trans loading fragile, or heavy cartons are poor can- Create a web-based supply chain visi- 10 provider early on in the shipping didates for transloading. bility platform where you can integrate process. Many companies assume electronic data interchange information trans loading starts when a drayage Choose your transloading providers and advanced shipment notices (ASNs) operator drops a load off at the facility. 7 carefully. If you decide to transload with your enterprise resource planning Companies that allow their transloading shipments, you will likely work system. You may also want to consider provider to become involved earlier in with a 3PL, an intermodal market- UCC128-compliant label printing and the shipment process, however, often ing company, a drayage provider, and carton-level bar-code scanning. receive a higher level of service and a carrier. Do your homework when reliability. If you let your transloading screening providers. Consider their Plan ahead. It’s never too late to facility coordinate drayage, for example, transloading experience and whether 9 begin transloading operations, but it can prioritize which containers should they have enough capacity to handle the longer you wait, the more likely leave ports ﬁ rst, and alert dray operators your throughput volumes. Examine the you are to face stiff competition for the to the best time of day to make a delivery. transloading center’s proximity to your best transloading space and the most Or, if you communicate with your entry port. Look closely at the level of reliable carriers. When partnering with provider by sending electronic ASNs integration the providers can achieve. a single-source provider to coordinate while goods are in transit, the provider Check out their technology and what and integrate your transloading needs, can plan accordingly and get goods out kind of visibility they provide. allow nine months to one year to pre- the door faster. ■

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10 Inbound Logistics • June 2007

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Amy Roach Partridge is assistant managing editor of Inbound Logistics. E-mail her at [email protected] SUPPLY CHAIN TECHNOLOGY by Amy Roach Partridge

What Are Your Tech Vendors Up To?

wenty-fi ve years after its initial launch, ing to service providers. The increasing the annual Distribution Computer Expo complexity of managing transportation has T is still an important event for preview- led many shippers to outsource the func- ing the latest in logistics and supply chain tion to 3PLs; 3PLs, in turn, often need TMS technology. The conference is a one-stop technology above and beyond what they shop for catching up with the various pro- can develop in-house, explains Strata. This viders that power supply chain technology. is where SAP comes in. Here are highlights from my meetings The new TMS product integrates seamless ly with technology companies that attended with SAP’s existing software, making it a fairly this year’s conference, which took place easy sell for the many providers already using May 22-24 at Chicago’s Navy Pier. SAP’s enterprise management tools. A sampling of new A bigger challenge for the company is fi ghting off its best-of-breed rivals, who are offerings from the SAP Spies Provider also gearing up to win over logistics service providers. Strata cites a “build, partner, or top technology Opportunities acquire” approach to fi ghting off competi- WHILE SAP HAS LONG SERVED A VAST tion. “We look at capabilities we are missing, providers attending number of shippers, it is now grabbing users then decide the best approach for plugging D/C Expo. from the 3PL and carrier worlds as well. those holes,” he explains. SAP’s upgraded, provider-focused product, Supply Chain 6.0, is set to debut this fall. The application contains a robust trans- PINC Solutions Makes portation management system (TMS) geared toward 3PL, freight forwarder, and Tracks in the Yard carrier users, says Rod Strata, industry prin- WHILE MANY IN THE LOGISTICS SECTOR cipal for SAP’s transportation and logistics have snubbed passive RFID tags in favor of segment. Strata has been helping shape active RFID applications, Berkeley, Calif.- SAP’s push into the service provider fi eld. based PINC Solutions is embracing passive It is not hard to imagine SAP building on RFID as an inexpensive way to deliver real- its current success with shippers by appeal- time yard visibility. The company, started in

June 2007 • Inbound Logistics 13 SUPPLYCHAINTECHNOLOGY ‹ CONTINUED FROM PAGE 13

2004 with seed funding from Siemens, enables companies to proactively moni- delivers the fi rst real-time yard visibility tor equipment warranties, maintenance Best Transport Plays solution free of expensive hardware and agreements, and service commitments; signifi cant manual intervention, says automatically notify customers of con- Online Matchmaker Dr. Aleks Göllü, CEO and founder. tract expirations; and manage pricing MUCH LIKE ONLINE DATING, ONLINE The company’s signature application, issues such as subscription, cancellation, freight matching and transportation YardHound, uses passive RFID tags com- and usage charges. transacting has gone mainstream over bined with positioning sensors to track “We manage complex issues that aren’t the past few years. The newest entrant trailer location and status, trace yard addressed well by an ERP system,” says to the fi eld is Best Transport’s BestMatch, truck movement, and provide a real- Ken Ramoutar, Sterling’s director of which bills itself a combination search time picture of all yard activities via a applications product marketing. That engine/business-networking site for the web-based application. The goal, says complexity is playing out in companies’ transportation industry. Göllü, is to offer DC owners real-time, desire to connect the way they sell prod- The web-based, on-demand tool, 24-hour access to key yard data such ucts and services with how they fulfi ll which debuts this summer, grants carri- as trailer positioning, check-in and them, he notes. ers and shippers access to a community check-out times, fuel status, and trailer Sterling’s new solution and its of partners with whom they can con- temperature readings, among others. Comergent acquisition have nicely duct real-time shipping transactions PINC also offers users a complete positioned it to support this trend. and view transportation opportunities. yard management system through a After joining BestMatch, shippers invite partnership with Montreal-based C3 their carriers to become members; car- Solutions. Combining real-time yard Psion Teklogix Steps Back riers can then extend the invitation to visibility with strategic yard manage- MOVING BACKWARD IS NOT USUALLY their other customers. ment helps users reduce operations something businesses are proud of – but it In a crowded field of web wan- costs, and achieve return on invest- is exactly what Greg Evans, senior prod- nabes, what makes BestMatch unique? ment in less than one year, says Göllü. uct manager for Psion Teklogix, boasts “Shippers and carriers use BestMatch as about. “Backward capability” is a key a wide-angle lens into optimal service selling point for Psion’s new genera- and customer matches, by lane or by Sterling Commerce Serves tion of Workabout Pro rugged handheld load. BestMatch protects the private computers. shipper-carrier relationship through Up Services Solutions “We are leveraging existing expan- individual controls over the exposure LOOKING TO BULK UP PROFIT sion modules from the fi rst generation and use of information, instead of sim- margins, many companies have Workabout Pro, which are fully comply publishing that information to a embraced aftermarket services as a patible with the second generation,” board,” explains CEO Mark Shary. new source of revenue. The problem, explains Evans. This approach provides A demo highlights the simple user however, comes in managing and users an industrial tool that doesn’t experience: shippers search for avail- automating these services as part of a need to be replaced whenever new able trucks by lane or by shipment, and normally product-based supply chain. requirements emerge. results display carriers with available One solution comes from Sterling A thorough demo of the new tool capacity matching their criteria. Using Commerce, a Dublin, Ohio-based from the Mississauga, Canada-based the site helps shippers optimize carrier software provider. Its just-announced company shows off its many add-on utilization, compare rates from a vari- Sterling Service Contracts offering aims capabilities: scanners, imagers, RFID ety of carriers, improve tendering, and to administer and automate the entire modules, wireless LAN/WAN radios, match to actual truck capacity, notes lifecycle of service, subscription, and and even a passport reader. The new Bill D’Amico, vice president of sales. other duration-based products. models also possess increased ability to The capacity shortage of recent years The solution, which Sterling gained survive multiple drops from as high as works to BestMatch’s advantage, but as part of its recent acquisition of e- fi ve feet, as well as a higher-resolution with capacity loosening up, will ship- business software provider Comergent, screen, a new operating system, and pers still go the extra mile and check integrates order capture, order fulfi ll- ergonomic improvements. online for freight opportunities? ment, and CRM applications to help The new handheld is part of Psion’s Even with more available capacity, users define, manage, and build ser- move to appeal to users outside the shippers still want to fi nd the best price, vice bundles throughout the duration four walls – it is expanding with appli- D’Amico notes. “If capacity contin- of the contract. cations for meter reading, ticketing, ues to loosen up, the site will instead Specifi cally, Sterling Service Contracts and livestock, for example. become carrier-driven,” he says. ■

14 Inbound Logistics • June 2007 Landstar Global Logistics Welcomes Our Newest Stars...

Genex LP of Northfield, Illinois is one of the nation’s oldest original intermodal marketing companies with over 40 years’ experience in transporting their customers’ goods via the railroads of yesterday and today. Genex, utilizing the tools and services available through their new status as an independent agency for Landstar Global Logistics, will be able to bring additional value to their customers by offering truckload and LTL, transportation brokerage, air, ocean, and expedited ground services and warehousing, in addition to maintaining and growing their intermodal activities.

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No Containing Container Growth

ort congestion remains a common container traffic – an estimated 46.3 container ports accounted for 85 per- Pconcern for U.S. companies import- million 20-foot equivalent units (TEUs) cent of U.S. containerized traffic in ing goods from overseas, and for good passed through U.S. ports in 2006, up 2005, up from 78 percent in 1995. reason: one in nine of the world’s mari- from 22.6 million in 1996. Overall, nearly 26 million contain- time containers are either bound for or Interestingly, U.S. container traffi c ers of various sizes entered the United coming from the United States, accord- is becoming more concentrated as an States via all modes of transportation ing to America’s Container Ports: Delivering increasing number of large, fast, spe- in 2005, up 37 percent from 19 million the Goods, a new report from the U.S. cialized vessels call at a decreasing in 2000 (see chart). Of those contain- Bureau of Transportation Statistics. number of ports capable of handling ers, more than 15 million entered the The report ranks the United States them, fi nds the report. The top 10 U.S. nation by truck and rail from Canada as second to China in world maritime and Mexico, while the remaining 11 million were imported as ocean freight. Other interesting fi ndings include: ■ Taken together, U.S. container trade in 2005 and 2006 more than double corresponding trade numbers from one decade earlier. ■ Since 1996, total world container trade more than tripled, resulting in a decline in the U.S. share of world container trade from 16 percent to 11 percent. ■ China has exceeded the U.S. share of world container trade since 1998.

U.S. International Maritime Containerized Activity: 1995-2005 (Thousands of TEUs) Nearly 26 million containers entered the United States via all modes of transportation in 2005 — up 37 percent from 19 million in 2000.

June 2007 • Inbound Logistics 17 NameRingsBells_HalfPageSpread.aiPage 1 12/23/2006 11:53:30 AM

GLOBALLOGISTICS ‹ CONTINUED FROM PAGE 17

In contrast, SME leaders across Asia cite a desire to capital- China vs. India: ize on India’s rapid growth by leveraging its continued rise as a manufacturing base (30 percent) and outsourcing loca- The Debate Continues tion (25 percent). They also seek to become an outsourcing hough China receives the most buzz when it comes to destination for India (20 percent), and an exporter of raw Tlow-cost logistics, manufacturing, and technology capa- materials to India for manufacturing (19 percent). bilities, some Asian business leaders are more excited about Eighty-ﬁ ve percent of respondents say India is or has the growth opportunities in India, according to the UPS Asia potential to be a regional economic leader, and 81 percent Business Monitor. feel certain that India’s economy will grow in 2007. Small Respondents to the UPS study rank China as the area business leaders in India are optimistic about their country’s with the greatest prospects for economic growth, followed trade growth – 83 percent of Indian respondents project strong by India and Hong Kong. But they report ambivalence about U.S.-India trade growth this year. In terms of overall prosperity, China’s growing economic power, ﬁ nds the survey of 1,200 89 percent of Indian SMEs expect greater economic prospects small and mid-sized enterprise (SME) executives in Asia. for their businesses in the year ahead. Asian SME leaders are equally divided between viewing Other survey highlights include: China’s continued dominance as a boost (34 percent) and ■ Respondents widely agree that China will surpass the perceiving it as both a boost and a threat (34 percent). Many United States as the world’s largest consumer economy in 10 also feel they are unable to compete with Chinese compa- years or sooner. nies in terms of low labor and production costs (38 percent), ■ Small business leaders expect intra-Asia trade growth to and express growing concern regarding increased price com- continue its upward climb, with 74 percent of respondents petition (25 percent). saying that regional trade will grow strongly in 2007.

18 Inbound Logistics • June 2007 NameRingsBells_HalfPageSpread.aiPage 1 12/23/2006 11:53:30 AM

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Last Mile Delivery & A 3PD Company Logistics Solutions

■ A majority of small business leaders in India (85 per- 2. Environmental sustainability: To ensure sustainability, cent) say that globalization brings benefi t to their businesses, China’s aviation industry will need to use technology to fur- whereas 55 percent of business leaders in Japan say it is a ther improve fuel effi ciency, avoid taxes and charges, and disadvantage. adopt global solutions for emissions trading. 3. Cost-effi cient airport infrastructure: China currently maintains among the highest infrastructure charges in Asia, Five for the Air which could hinder further progress. “IATA is working with hough China plays an increasingly important role in the the government to develop a charges regime that challenges Tair transportation industry, the country faces fi ve specifi c airports on effi ciency, provides a reasonable return to inves- challenges on its road to leadership, according to Giovanni tors, and supports a competitive industry,” notes Bisignani. Bisignani, CEO of the International Air Transport Association 4. Internal cost control: Though China’s aviation industry (IATA). “China is at a critical moment, and to build a success- is growing, ignoring productivity issues could come back to ful future it has to avoid mistakes made in other parts of the haunt it. China can turn to cost allocation to understand world,” he explains. where cost and productivity gaps occur, and identify areas The challenges, according to IATA, are: for improvement, says IATA. 1. Effi cient air traffi c management: China’s goal is to use 5. Commercial freedoms: China has made significant global standards to make its airspace among the most effec- commercialization progress recently through U.S. and EU tive in the world at meeting demand safely and effi ciently. open-skies agreements, but it still has a way to go. China’s Current traffi c management challenges include congestion fast-growing economy demands effi cient air transport links, delays in the Golden Triangle region and an ineffi cient air- and China has the opportunity to shape policy where space design in the busy Pearl River Delta. America and Europe have failed to do so, fi nds IATA. ■

June 2007 • Inbound Logistics 19 Components from China.

Finished goods from Mexico.

Deadlines from Illinois.

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©2007 Sterling Commerce, Inc. ALL RIGHTS RESERVED. Sterling Commerce, Business Without Borders, and the Sterling Commerce logo are trademarks of Sterling Commerce, Inc. Sterling Commerce is an AT&T company. TRENDS NEWS & EVENTS SHAPING THE FUTURE OF LOGISTICS by Amy Roach Partridge

New War Bill DHL Wins Other Amazing Race While most people watch episodes esting to send them via different carriers Impacts Supply of The Amazing Race on TV, Georgia to compare results,” recalls Bartholdi. Tech students devised their own “Afterward, a UPS vice president visited my Chain Security race – they tasked FedEx, UPS, and DHL class and explained the company’s global egardless of their political affil- with delivering packages to Tikrit, Iraq; freight network design and local issues in Riations or opinions on the Iraq Harare, Zimbabwe; Yangon, Myanmar; delivering shipments to Singapore.” war, logistics and transportation pro- Floranopolis, Brazil; and Apia, Samoa, as This year marks the fi rst time a clear fessionals paid close attention to the part of the annual Great Package Race. race winner emerged. DHL was the only compromise Iraqi war appropriations Sixty students from the Supply Chain carrier to complete deliveries to all five supplemental bill signed into law by and Logistics Institute at Georgia Tech, locations. It also logged the fastest deliv- President Bush in May. The bill con- with their professor, Dr. John Bartholdi, ery time for three locations, and the tained two provisions impacting supply sent identical boxes containing Georgia second-fastest time for the other two. chain security: funding for port secu- Tech material to these out-of-the-way FedEx delivered to three locations, while rity measures, and further details on locations to learn which major express UPS delivered only to two. UPS also did not the hotly debated pilot plan to open carrier could deliver fastest and cheap- recognize the country Samoa, which it still the border to Mexican truckers. est. The carriers had no idea a competition listed as Western Samoa, despite the coun- The bill, known as H.R. 2206, includes was in progress. try’s name change in 1997. $110 million in additional fi scal 2007 The event is important, says Bartholdi, Each carrier’s prices varied greatly. For funding for the federal Port Security because it shows ideas the students study example, UPS offered the least expensive in the classroom – such as network design, rate to Tikrit – $67.34 – even though the Grant program, hailed by the American scheduling, and packing – being used to package was returned to sender. FedEx Association of Port Authorities (AAPA) as make real-world decisions. “The sense of charged slightly more than $100, while “a giant leap forward” to help U.S. ports relevance is further heightened because DHL was the most expensive, at $125.26. secure their facilities against terrorism. some of the destinations are home to our Shipping to Harare via DHL, however, only Given the high cost of enhancing international students,” says Bartholdi. cost $126.18, while FedEx charged $244.48, facility security at U.S. ports, including “We also discuss the logic of where car- and UPS’s tab totalled $336.60. implementing the new Transportation riers locate their sortation centers, and “The Great Package Race is more of Worker Identifi cation Credential pro- examine the dominant freight routes.” an event than a serious study,” notes gram, AAPA advocates a $400-million Georgia Tech’s Great Package Race Bartholdi. “The main message for students appropriation in fiscal 2008. The started in 2003, when Dr. Bartholdi needed is that sending packages to such distant amount is an increase from 2007’s to ship two boxes to Georgia Tech’s sister countries requires a lot more than just air- $320 million funding total – an origi- organization in Singapore. “When I packed planes and trucks.” nal $210 million plus the $110 million the two boxes I thought it might be inter- -Mark Rowan granted in the new bill. ON YOUR MARK, GET SET. Georgia Tech’s Great Package While the ports were seeking addi- Race pits UPS, DHL, and FedEx against each other to see who tional funding from the war bill, delivers fastest and cheapest to three remote locations. Congress sought additional safeguards for the proposed cross-border trucking pilot plan announced in April by the Department of Transportation (DOT). The Bush Administration remains committed to implementing the cross-border program. President Bush, however, did allow the new spending bill to require that DOT get approval from its inspector general that the

June 2007 • Inbound Logistics 21 TRENDS ‹ CONTINUED FROM PAGE 21 experimental program is in compli- SOUNDBITE ance with more than one dozen safety Logistics is by far the single most signifi cant element in conditions laid out by Congress before “determining the speed and effectiveness of delivering the food, it can move forward. The war bill also includes a provi- medicines and supplies that are critical to alleviate suffering sion sponsored by Rep. Duncan Hunter during disaster recovery efforts. (R-CA) requiring the government to ” publish its plans to enforce require- — LYNN FRITZ, founder of the Fritz Institute, a nonprofi t relief management organization, announcing its Certifi cation in Humanitarian Logistics program. ments that Mexican drivers be able to communicate in English. The provision also compels the agency to publish easing peak traffi c congestion. Today, peak daytime hours pay a traffi c miti- details of U.S. safety audits of Mexican it is an essential part of port opera- gation fee, which helps fund the cost of trucking companies authorized to par- tions, and has diverted more than the night and weekend shifts. ticipate in the program. fi ve million truck trips from peak day- Government offi cials and business time traffi c since inception. OffPeak is leaders lauded OffPeak’s five-million also credited with removing a weekly truck trips milestone, citing the program PierPass Passes average of 60,000 truck trips from the as a model for industry-led initiatives freeways during commuting hours. to eliminate costly bottlenecks, reduce 5 Million Milestone The PierPass program uses a conges- gridlock on area freeways, and curtail air hen it debuted in July 2005, the tion-pricing model that provides an pollution from idling traffi c. WPierPass OffPeak program at the incentive for cargo owners to move “OffPeak has helped keep the eco- ports of Los Angeles and Long Beach shipments at night and on weekends; nomic engine of the ports running, was an experimental remedy aimed at those that move containers during while reducing the impact on Los

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Angeles residents,” says Los Angeles Mayor Antonio Villaraigosa. The two ports recently announced THE CHAIN another environmental initiative – the “San Pedro Ports Clean Air Action Plan,” UP PEOPLE ON THE MOVE which aims to cut particulate matter pollution from all port-related sources Glass tableware manufacturer Libbey Inc., Toledo, Ohio, recently by more than 50 percent within the named Jonathon S. Freeman to the new position of vice president, next ﬁ ve years. global supply chain. Freeman will maintain direct responsibility for all domestic operations including warehousing, distribution, logistics, plant operations, materials The plan, which launches Jan. 1, and ﬁ nished goods purchasing for all businesses, production planning, customer service, and 2008, will phase out the use of old, import procurement and sourcing. ● Dr. Ralf Sonnberger (pictured), senior vice president “dirty-emissions” trucks under the fol- of global supply chain management for German chemical company BASF Aktiengesellschaft, lowing timetable: starting next year, 18 is now managing director of BASF IT Services. Sonnberger, a physicist, has managed BASF’s percent of trucks from 1989 or earlier global supply chain since 2004, and started his professional career at BASF as a researcher will no longer be permitted to operate in the ammonia laboratory in 1986. ● Vehicle brake manufacturer Carlisle Motion Control in the ports; by Jan. 1, 2009, the ban Industries, Charlottesville, Va., has appointed Joseph La Varra president. An experienced will extend to trucks older than 1994; lean manufacturing, operational performance, and inventory systems manager, La Varra is by 2010 to trucks older than 1996; and now responsible for all operations functions, and will spearhead the company’s aggressive by 2011, to vehicles older than 2004. growth plans ● Michael J. Metheny has joined chain retailer A.C. Moore Arts & Crafts, The ports, along with the South Ardmore, Pa., as vice president of supply chain. Prior to joining A.C. Moore, Metheny worked Coast Air Quality Management District, for Federated Department Stores. He also served for 15 years with the May Department propose allocating more than $200 mil- Stores Co. until the company was acquired by Federated. — Mark Rowan lion toward this effort. ■

#1 LOCATION FOR NEW DISTRIBUTION CENTERS. #1 Every strategic partner is aligned. Every logistics challenge answered. Over 240 major MID-ATLANTIC companies have set up DCs here. Maersk, the world’s largest shipping line, is building INTERNATIONAL their own port terminal to supplement the large capacity of the Port of Virginia. The U.S. GATEWAY headquarters of Zim-American Israeli Shipping Co., “K” Line America, Inc. and CMA CGM VIRGINIA’S WASHINGTON DULLES (America) Inc. are also here. Better, faster intermodal connections to two-thirds of the INTERNATIONAL AIRPORT U.S. population. Competitive labor costs. Abundant sites for development. All this is here in NON-STOP, SINGLE PLANE SERVICE TO 38 INTERNATIONAL DESTINATIONS the #1 state for business. Shouldn’t you be, too? For a prime location, contact the Virginia Economic Development Partnership at 804-545-5700 or e-mail to [email protected].

LOGISTICS YESVIRGINIA.ORG VIEWPOINT

Carrie Ericson is managing director, Ariba [email protected] • 925-367-3832 by Carrie Ericson Leron Baum is an Ariba consultant & Leron Baum [email protected] • 415-786-5387

Sourcing in a Seller’s Market

ising commodity prices, grow- els (see chart at right for details). The more important a product is to ing global consumer demand, Like all sourcing strategies, smart a company, the more important it is R and increased political instabil- sourcing in a seller’s market requires to develop a fl exible, robust sourcing ity have put an end to the buyer’s market analysis of not only the supply market, strategy that balances supply market in procurement. Today, buyers are just but also specifi c factors related to the competition with supply market risks. as likely to be “fi red” by their suppliers products or goods being sourced. Companies should consider the follow- as they are to experience supply chain A supply market characterized ing when analyzing products: shortages or out-of-stock notices. by little competition, full produc- ■ Size of current spend and future So what is this new “seller’s market” tion capacity, specialized products, spend forecast. like? And is the sourcing professional long lead times, and/or difficult or ■ Product complexity. really captive to it? localized fulfillment issues requires ■ Switching costs. A seller’s market exists when demand a well-thought-out, proactive, flexi- ■ Total cost of ownership. for a certain product is strong and prices ble sourcing strategy that takes into ■ Product’s impact on the current remain relatively high. Several other fac- account a variety of factors, including: supply chain. tors – capacity constraints, unexpected ■ Supplier competition. supply disruptions, proprietary compo- ■ Production capacity and/or supply NEXT STEP, EXECUTE nents or materials – can lead to the perfect chain issues. Typically, the most productive sourc- storm that creates a seller’s market. ■ Specialization. ing strategy for improving negotiating ■ Pace of industry change. leverage in a seller’s market is to expand BEATING THE ODDS ■ Geographic impact. the traditional supply base. Common Despite these factors, sourcing pro- For certain products or goods, under- methods for developing alternate sup- fessionals with the right strategy can standing the buyer’s specifi c, internal ply sources include direct investment overcome the odds that are stacked organizational factors may be critical in or acquisition of suppliers, develop- against them. The trick is to anticipate to deciding which suppliers to work ing low-cost country supply sources, or the forces that create a seller’s market with and which sourcing methods to insourcing products. These strategies, and organize supply chains in advance choose. Among the factors infl uencing however, are also among the most dif- to ensure minimum disruption. buyers’ sourcing strategies are: fi cult to deploy, and require signifi cant Applying information from key ■ Strategic importance. investment. market indicators can help sourcing ■ Infl uence of incumbent suppliers. If up-front investment is not an professionals do just that. Sources to ■ Subject matter. option, buyers should implement a consider include Producer’s Price Index, ■ Buying power. sourcing strategy well before supplier capacity utilization, and inventory lev- ■ Stakeholder impact. negotiations begin. Developing strong

24 Inbound Logistics • June 2007 relationships with the supply base will Sample Supply Market Indicators help buyers negotiate advantageous pricing. Although pricing may increase INDICATOR DEFINITION MARKET RELATIONSHIP over time due to constrained supply Producer’s A monthly measure of PPI infl ation means rising prices; PPI market conditions, suppliers in deep Price Index producers’ selling price defl ation indicates falling prices. Reviewing relationships have incentive to ensure (PPI) changes. PPI for your given category and related categories will keep you updated on pricing that their valued customers remain trends. strong and viable. They may even be willing to sacrifi ce short-term margin. Capacity Ratio of production The key threshold is 85 percent — capacity In some cases, buyers face a sell- Utilization output to available utilization higher than this level is seen as er’s market without the benefit of capacity; gauges how infl ationary and yields a seller’s market. The much slack exists in opposite is true for capacity utilization less available investment capital or solid the economy. than 85 percent. working relationships with suppliers. Companies in this position can use Inventories Inventory levels Excess inventory indicates a recession several tactics to strengthen their nego- defi ned as stocks environment. Sellers need to reduce of goods held by inventory, which drives prices downward. tiating position with suppliers: businesses either for Low inventories signal a growth market for ■ Link purchase of one product to further processing or sellers. They need to produce more goods, another. sale. which drives prices higher. ■ Enact long-term contracts with SOURCE: ARIBA forecasts. ■ Reduce payment terms. results, even in a constrained supply Finally, when buyers are considering ■ Leverage supply continuity. market. Auctions including two sup- more than just price, an optimiza- ■ Make credible threats. pliers typically yield 9 percent average tion strategy may enable them to sort savings, while those with three or more through and compare competing seller NEW TOOLS FOR BUYING suppliers increase savings to more than offers. This technique is effective when Recently, buyers have also begun to 13 percent on average. buyers want to parse an award among incorporate online tools into their sourc- The trick to running an auction in various sellers – it allows buyers to test ing strategies. The traditional Request for a seller’s market is to generate compe- multiple award scenarios to optimize Proposal delivered online can certainly tition. The specifi c set-up of an online their best interests. help buyers gather supplier qualifica- auction event can dramatically infl u- In addition, optimization gives tions and start prices for negotiations, ence the perception of competition sellers flexibility to craft a proposal but doesn’t offer much incremental among suppliers. Example set-up strat- that best meets their sales objectives, benefit or power to drive negotiating egies include: thereby providing more incentive to leverage in a tough supply market. ■ Provide suppliers with visibility compete for the buyer’s business. If it is apparent that competition will into rank position only. be limited, buyers should consider sac- ■ Low bid wins all. PLAY TO WIN rifi cing the liquidity derived through ■ Creative lotting. Strategies such as these, however, an online market or auction for a more Another auction format gaining don’t easily come together. traditional, offl ine negotiating strategy. acceptance with buyers in a seller’s To win in a seller’s market, sourcing Traditional negotiations protect the market is a Dutch Auction, which lets professionals must keep current on all buyer’s position by ensuring that the the buyer set the initial price and price factors that affect their strategic sup- number of bidders and interest in the increments, while suppliers bid on the ply markets. They must also anticipate business remain confi dential. quantity of product they will provide at changes. Then, when a seller’s market If several suppliers compete in the each given price. This format encour- does occur, they can quickly execute same market, however, buyers should ages seller participation by focusing innovative strategies that allow them consider the potential impact and on volume versus price. It also allows to level the playing fi eld and make sure value of an auction. Where multiple multiple sellers to compete for business, they receive the most competitive pric- suppliers exist, an auction can drive increasing surety of supply. ing possible, given the circumstances. ■

June 2007 • Inbound Logistics 25 C. Daniel Negron is vice president, TT Club •201-557-7320 [email protected] RISKS REWARDS& ISSUES AFFECTING LIABILITY MANAGEMENT by C. Daniel Negron

Buying Insurance: Domestic or Foreign?

I am a logistics operator who ance for loss or damage during transit. to offer insurance in that state. Non- handles inbound and out- Shippers running worldwide oper- domestic insurers are not less capable Q: bound shipments for ations face the challenge of insuring than domestic insurers; if a company partners around the world. I am cur- their companies for professional and opts to use one, it simply means the rent ly reviewing insurance options to operational liabilities both within desired insurance is not otherwise ensure that my cargo and company are the United States and throughout the available in the state where the com- protected against accidents or dama- world. They need insurers that under- pany operates. ges that may occur during transit. My stand their industry, provide seamless Domestic insurers contribute to their broker recently sent a proposal that insurance programs, and possess the state’s solvency funds, which are ear- fi ts my needs, but I feel uncomfortable resources to handle global claims. marked for paying bankruptcy claims. because the broker uses a non-U.S. Unfortunately, only a small pool of While foreign insurers do not normally insurance company. What if it refuses to insurers offers coverage for these com- contribute to a state’s fund, they some- pay a claim? What if it goes bankrupt? plicated risks. times establish separate funds with How do I protect myself? When a particular type of insurance the National Association of Insurance The United States has a well- is not readily available, many buyers Commissioners, an organization rec- developed insurance industry look to the international insurance ognized by all states. A: comprised of companies that market for cover. This may seem risky, can address the needs of most business but safeguards exist. CHECK WITH THE AGENCIES enterprises. So it may come as a surprise The best way to measure the quality that certain types of international trade STATE YOUR DIFFERENCES of an insurer – domestic or foreign – is insurance are often placed with insurers Each U.S. state regulates its own to check its agency ratings. Agencies located outside the United States. insurance industry. Although laws dif- assign insurers a series of letters, sim- Both historical and commercial rea- fer from state to state, certain concepts ilar to a school grade, based on their sons explain this. Since the days of are common to all states. Every state, financial strength. An insurer that mercantilism, steamship lines have for instance, considers an insurer to receives any variation of an “A” rating insured their shipside risks with insur- be “domestic” if it is either consti- is usually fi nancially solvent. ers known as protection and indemnity tuted or licensed with an offi ce in that Ultimately, whether your company (P&I) clubs. Only one P&I club operates state. Insurers domiciled in other U.S. chooses a domestic insurer or one based in the United States, so the majority of states or other countries are consid- in another country, your broker should steamship lines are insured with for- ered foreign or alien. These insurers conduct background checks as part of eign P&I clubs. are known by various names such as its analysis. If the broker feels it can Conversely, because of the huge “non-admitted”, “excess lines”, or “sur- meet your requirements with a properly volume of goods transported within plus lines.” qualifi ed and fi nancially sound insurer, the United States and abroad, many These insurers must qualify sep- you can be confi dent that your interests American insurers offer cargo insur- arately with each state for authority will be protected. ■

26 Inbound Logistics • June 2007

28 Inbound Logistics • June 2007 Navigates Air Cargo Uncertain

BY LISA TERRY W Delivery Services, anAtlanta-basedtime-criticaldelivery Services, Delivery try ascarriersseekwaystocopewith fuelcostuncertainty,try to-Chicago route,forexample,that reduced capacitycould resulting inunusedbackhaul,andcompetitionamongthem- increased regulation,fi response topressuresfacedbythe$55-billionaircargoindus- and ocean shipping. and oceanshipping. a shipment. selves aswellfromexpedited,time-defi send Aeropointscrambling foradifferentwaytotransport courier. ThatmeansAeropoint isheavily impactedbyair cargo trends:whenacarrierdownsizesplaneonBoise- critical legalorfi Unfortunately, suchaircraft downsizing hasbeenone Skies hen it’s imperativethatfreightarrivesovernight,or ing donororgans,emergencyairplaneparts,or even sooner, shippersoftime-criticalgoodsinclud- nancial documents often turn to Aeropoint nancial documentsoftenturn toAeropoint nancial struggles, trade imbalances nancialstruggles,tradeimbalances June 2007 •Inbound Logistics nite ground services nite groundservices 29 Analysts place the international industry growth rate at a modest 2.3 percent year-over-year as of March 2007, according to the International Air Transport Association (IATA), but note high variability behind those numbers. Some international routes, such as Asia to North America, are growing much faster than well-established routes such as North America to Europe, while domestic air cargo is slightly down overall. “Three cargo trends are key right now: the concentration of growth in Asia, an increasing trade imbalance, and losing business to ocean shipping,” said Giovanni Bisignani, director general and CEO of IATA, at the recent IATA Cargo Symposium 2007, held in Mexico.

Dealing with Globalization The globalization of manufacturing has strongly impacted air cargo. In concert with their customers, air cargo carriers and integrators continue to grapple with the right distribution of capacity and services to manage growing output from China and other Asian markets. “The TransPacifi c market has been chaotic in the last year – supply outpaced demand, and the industry endured a weak peak season and signifi cant capacity ramp-up,” says Brian Clancy, managing director of MergeGlobal, a Washington, D.C.-area consultancy. “Many carriers have eliminated frequency or pulled out of certain city markets entirely.” By 2010, Intra-Asia will account for 26 percent of total international freight, according to IATA. But concerns are growing over how well the infrastructure can handle that volume, as well as possible bottlenecks at export gateways. Despite these challenges, “transporting global freight via air still makes sense for many products – including apparel, footwear, high- value consumer electronics, and high-tech computer components – to offset demand variability,” says Clancy. The shorter transit times more Not-So-High-Flying than offset the cost of air freight for these products because they are Growth diffi cult to forecast over the long term, he notes. “Long-term price defl ation, however, is occurring across all consumer Despite large gains in the Middle East product segments,” Clancy says. “At some point, it will be a challenge and Asia Pacifi c, international air cargo volume increased only modestly from for these companies to continue using air freight on a planned basis.” March 2006 to March 2007. That infl ection point could arrive sooner rather than later due to rising fuel prices and a widening trade imbalance. For many shippers, FTK ATK REGION GROWTH* GROWTH** ocean transportation is becoming a viable option. Middle East 12.7% 14.7% “Companies currently transporting medium-value SKUs via air freight may switch to ocean to take advantage of new consolidated Asia Pacifi c 4.5% 5.5% ocean/trucking services,” says Clancy. Africa 3.1% 8.7% “Direct sailings and expedited inbound options have increased and Industry infrastructure at ports is improving,” adds Eric Bond, COO of Mach 1 Air 2.3% 4.3% Average Services, a freight forwarder based in Phoenix, Ariz. “Ocean carriers are fi lling capacity quickly and getting creative with inbound services.” North -0.9% 4.5% America From 2000 to 2005, ocean container freight grew at twice the rate of Europe -1.0% 3.1% air cargo and will grow at a 7.2-percent rate through 2010, compared with air freight’s 5.3 percent, according to IATA. Latin -6.9% -1.5% America In addition to luring away scheduled air shipments, consolidated ocean offerings may even siphon off some last-minute shipments that * FTK: Freight ton kilometers measures actual freight traffi c. typically go via air, in cases where certainty of delivery outweighs speed. ** ATK: Available ton kilometers measures This trend away from air cargo isn’t limited to international freight total available capacity (combined passenger movement; expedited trucking is making signifi cant inroads in domes- and cargo). tic shipping as well. Source: International Air Transport Association “The industry is undergoing a mode shift,” says Neel Shah, vice president of sales and marketing for United Air Cargo. “Domestically, freight moving within 1,500 miles is usually shipped via truck. The domestic market for air cargo today is limited to transcontinental shipments and to states unreachable by truck.”

30 Inbound Logistics • June 2007 Domestic air carriers’ financial make the process seamless. We want to technology, while kicking off interna- struggles have created uncertainty in work with a known entity, not a part- tional expansion – adding its own planes the market, which has many freight ner of a partner of a partner.” and forming targeted partnerships. forwarders engaging in contingency That need is accentuated as Avnet’s Couriers such as Aeropoint rely on planning, and carriers seeking to secure business continues to grow globally. express service to satisfy customers’ their place in the industry. To ensure its forwarders meet Avnet’s time-critical shipment needs. “If we “Air carriers are being tested now,” demands, the company rates its pro- send a customer shipment to a location says Matt Buckley, senior director viders each month. more than 200 to 250 miles away, we of cargo, Southwest Airlines Cargo. transport it by air,” explains Stephen “Carriers that want to stay in business Express Cruises Ahead Divine, president of corporate sales for must invest in the resources to provide Air express service, which the Atlanta courier. “Customers dictate cargo customers high service levels.” MergeGlobal expects to account for their time parameters and we decide Cushioning themselves from such 25 percent of the airfreight market in how best to ship.” The company sends uncertainty is one reason shippers such seven to 10 years, is less vulnerable to 95 percent of its shipments via air, as Avnet, a Phoenix electronics distrib- the industry’s troubles. International largely through scheduled service with utor, rely on freight forwarders for both express volumes grew 9.5 percent from commercial airlines such as Southwest, domestic and international service. On mid-2005 to mid-2006, dominated by though its own 17 aircraft are available any given morning, Avnet’s scheduled integrated express companies, accord- for charter ﬂ ights. shipments account for only 20 percent ing to the most recent numbers from One issue even express providers of what it will ship that day. Air Cargo Management Group, Seattle. are not immune to is fuel surcharges. “Being able to call a forwarder at 4 Southwest Airlines Cargo, for exam- With oil prices skirting $67 a barrel (as p.m. Saturday and arrange a shipment ple, reports its scheduled airfreight of press time), and the summer travel to Warsaw, Poland, is more common- business is flat, but posts greater than season looming, fuel surcharges are place now,” says Mike Madeleine, 20-percent annual growth for its next- expected to continue, impacting all director of global transportation for available-guaranteed and rush services. sectors of the air cargo industry. Avnet. “To meet customer needs, we This growth has enabled Southwest to “We now examine fuel surcharges have to work with a ﬂ exible provider invest in new POS/booking, capacity weekly,” says Divine. “Two years ago, we that offers a variety of services and can management, salesforce, and security checked them only once per quarter.”

Because only 20 percent of daily shipments from its Phoenix warehouse are scheduled, electronics distributor Avnet relies on airfreight forwarders for their ﬂ exibility and service variety. The company uses forwarders for both domestic and international shipments, and rates them each month to benchmark service quality.

June 2007 • Inbound Logistics 31 eign lading. The plan would require two data sets from ocean carriers. CBP intends to expand the concept to other modes in the near future, a prospect that worries air cargo executives. “Pre-notifi cation will change all our procedures,” says Aeropoint’s Divine. “We’re very concerned.” Bond of Mach 1 predicts both a cost and a time impact if pre-notifi cation becomes a reality, delaying airfreight movement by as much as one day. “The information CBP is requesting is often not available until the time material ships,” he explains. Increased security regulations are expected to have a signifi cant effect on shippers such as Avnet. For electronics distributors, being able to commit to delivering orders fi rst often means winning the sale, and overnight service is the norm. Avnet is not waiting on the outcome of pending legislation to act, however; the company has already attained Customs-Trade Partnership Against Terrorism (C-TPAT) certification and supports Technology Asset Protection Association (TAPA), the group behind a set of freight security requirements in the high-tech industry.

Connecting a Disconnect Security is also one of IATA’s top pri- Despite challenges from ocean and expedited ground services, air is still the logical mode orities. The organization has formed choice for many products, including fresh seafood. Carriers such as United Cargo specialize in effi cient handling to ensure seafood is delivered on time, at maximum freshness. an Air Cargo Security Action Group to better convey to governments what it Surcharges are currently at increased pricing. “China grows at the expense of believes is a disconnect between the levels because carriers expect continued other markets in Asia,” he notes. current direction of regulation and volatility and high prices for the remain- Like all shipping modes, air cargo measures that would actually accom- der of the year, says United’s Shah. businesses continue to absorb security plish security goals. Hedging is one strategy to counter the measures imposed over the past few Meanwhile, IATA’s e-freight program impact. “Ninety percent of Southwest’s years and anticipate stringent require- aims to ensure security and improve fuel is hedged at $50 a barrel,” says ments ahead. air cargo’s competitive position by Buckley. “We’re trying to hold fi rm.” The numerous – and ongoing – eliminating the need to produce and Shipping rates are similarly in fl ux. attempts to pass legislation requiring transport paper documents for air Some markets are experiencing strong 100-percent screening of cargo on pas- cargo shipments. Its goal is to switch price swings thanks to the ongoing senger fl ights poses the biggest threat. to an industry-wide, electronic ship- dance between capacity and demand. IATA opposes 100-percent screening ping environment. Speculation ensues over whether rate because it believes the expense – an Despite the industry’s many chal- increases and surcharges will start to estimated $3.6 billion over 10 years – lenges, air cargo executives are cautiously box out some shippers. Companies is prohibitive. optimistic about the future. Carriers and importing and exporting with China Also concerning the industry is a integrators are continuing to invest in may be in for a tough ride. proposed pre-notification plan from fl eets and equipment, and are expand- MergeGlobal’s Clancy expects over- U.S. Customs and Border Protection ing service offerings. All involved in the capacity in China will result in a (CBP) that will require importers to pro- industry share a common goal: to retain tightening of prices there this fall, while vide 10 additional data elements about customers and keep competition from other Asian markets experience weaker their shipments 24 hours prior to for- other modes at bay. ■

32 Inbound Logistics • June 2007 .EXT$AY%VERY$AY3INCE

h2ELIABLENEXT DAY SERVICEISWHAT %STESDELIVERS AND )MDEDICATEDTO THISTRADITIONv 4ONY9OUR.EXT $AY$RIVER 9EARS

0HONE %34%35 WWWESTES EXPRESSCOM

¥%STES%XPRESS,INES 3ERVICE)S7HAT/UR0EOPLE$ELIVER To get your search for an airfreight forwarder off the ground, check out this list of leading players. Who’sin Airfreight Who Forwarding

SERVICES MANAGED: WEB SERVICES:

COMPANY NAME OTHER OTHER WEB ADDRESS PHONE ASSET- OR NON-ASSET-BASED CUSTOMS CLEARANCE COMPLIANCE SERVICES MANAGED QUOTES RATE REAL-TIME TRACKING DOCUMENTS WEB SERVICES

Ocean freight forwarding, warehousing & A.N. Deringer 888-612-6239 N 00 00Online PO management www.anderinger.com distribution

Agility 714-513-3000 B 00Supply chain management 00 www.agilitylogistics.com

AIT Worldwide 800-323-6649 N 00Transportation & warehousing management 0 PODs, scanned document images www.aitworldwide.com

BDP International 215-629-8900 N 00Import/export, warehousing & distribution 000 www.bdpinternational.com

Bellair Expediting 206-241-7710 B 00Warehousing & distribution 000POD tracking www.bellair.com

CFF World Freight 516-825-0106 B 00Import/export, distribution 000 www.cffworldfreight.com

Shipment booking & dispatch, bills Concert Group Logistics 866-CGL-SHIP N Trans-border 00 www.cglship.com of lading

DHL Global Forwarding 800-234-2778 N 00Duty drawback, Free Trade Zone 000 www.dhl-dgf.com

Cross-border trucking (Hong Kong-South Dimerco Express Group 404-684-9188 N 00 00B2B e-commerce www.dimerco.com China), 3PL, hand-carry

Ocean, documentation services, customs EA Logistics 800-863-5948 N 00 000 www.ealogistics.com brokerage

EGL Eagle Global Logistics 800-888-4949 N 00Import/export 00 Shipment booking, payments www.eaglegl.com

Expeditors International 206-674-3400 N 00Order, vendor & cargo management 00Shipment booking, quote monitor www.expeditors.com

Management reports, signature POD, Hassett Air Express 800-323-9422 N 00Documentation 0 www.hassettair.com EDI

NVOCC licensed, customs brokerage, letters ICAT Logistics 800-572-1324 N 00 00 Customized solutions www.icatlogistics.com of credit, charters, couriers

IJS Global 203-504-9760 N 00Export licensing, consulting, consolidation 000Report downloads www.ijsglobal.com

Kintetsu World Express 800-275-4045 N 00Logistics & supply chain management 00 Shipment reports, inventory visibility www.kwe.com

Shipment & order visibility and Kuehne + Nagel 201-413-5500 N 00Inbound logistics, aftermarket logistics 00 www.kn-portal.com monitoring

Reports on activities, payments, Lynden Air Freight 206-777-4650 N 00Supply chain and logistics 000 www.laf.lynden.com invoicing, deliveries

34 Inbound Logistics • June 2007 KEY: Asset- or Non-Asset-Based: N = Non-asset-based; A = Asset-based; B=Both Compliance: shipments comply with government, security, and trade regulations Documents: shippers can book/create customs or import/export documents online

SPECIAL SERVICES: SERVICES OTHER THAN AIRFREIGHT FORWARDING

OTHER OTHER

HEAVY FREIGHT HEAVY HAZMAT DOOR-TO-DOOR PERISHABLE OVERNIGHT FLIGHT OUT NEXT CHARTER HIGH VALUE SPECIAL SERVICES NVOCC OCEAN BROKER CUSTOMS CONSOLIDATOR LOGISTICS NON-FORWARDING SERVICES CERTIFICATIONS

Customs consulting, USDA meat 0 0 0 0 0000 Proprietary quality program inspection

Defense & government Chemical logistics, humanitarian 00000000 00000 services, project logistics relief

Carrier management, inventory 0 00000 White glove, government svcs. 00000 IATA, TAPA, C-TPAT control & receiving

C-TPAT, Six Sigma, ACC Responsible 00000000Chemical logistics 00000Humanitarian aid Care Partner, ISO

0 0 0000Hand-carry, expedited 00Trade show/convention services

00000000Ocean, trucking, customs 00000Warehousing

0 0 0000Time-critical & time-sensitive 00 00Trade show service, returned assets shipments management

000 000 Consolidated distribution 00000Project cargo ISO 9001:2000

Personal effects & household 000 00 00000VMI, warehousing & distribution IATA, C-TPAT, ISO 9002, OTI/FMC, TAPA movement 000 0000Trade show and event freight 000No. America LTL, TL, hotshot/ forwarding exclusive truck

Residential white glove, local VMI, warehousing & distribution, 00000000 00000 ISO 9001:2000 and ISO 14000 pickup & delivery packing & crating, project cargo

00000000Distribution planning 00000Site selection, risk management ISO 9000, C-TPAT , IATA,

Time-sensitive, oversized Expedited ground, trade show 0 0 000 00 IS0 9001, IATA cargo shipments

00000000Courier 00000 NVOCC, HazMat, Dangerous Goods

00000000 00000Consolidation, consulting C-TPAT

Aerospace, medical freight, TAPA, C-TPAT, ISO 9001, 9002, 14000, 00000000 00000VMI, inspection & repack automotive 14001

Emergency & relief logistics, hotel 00000000Product-speciﬁ c services 00000 C-TPAT, ISO9001 , Cargo 2000 logistics 000 0000Warehousing & distribution, 00000 Quality business reviews, customer RMAs, pick/pack satisfaction surveys

June 2007 • Inbound Logistics 35 To get your search for an airfreight forwarder off the ground, check out this list of leading players. Who’sin Airfreight Who Forwarding

SERVICES MANAGED: WEB SERVICES:

COMPANY NAME OTHER OTHER WEB ADDRESS PHONE ASSET- OR NON-ASSET-BASED CUSTOMS CLEARANCE COMPLIANCE SERVICES MANAGED QUOTES RATE REAL-TIME TRACKING DOCUMENTS WEB SERVICES

Mach1 Global Services 480-921-3900 N 00Warehousing 000EDI www.mach1air.com

Domestic transportation management, OIA Global Logistics 800-938-3109 N 00 0 www.oiaglobal.com 3PL services

Panther Expedited Services 800-685-0657 N 0 Time-critical, custom-critical transportation 00 Order entry www.pantherexpedite.com

Pegasus Logistics Group 800-997-7226 N 00Warehousing, supply chain management 0 EDI, handheld POD www.plg.cc

Warehousing & distribution, vendor Shipment status information, Phoenix International 800-959-9590 N 00 00 www.phoenixintl.com management printable forms

Pilot Air Freight 800-447-4568 B 00Inbound logistics 0 E-mail alerts www.pilotair.com

Priority Worldwide Services 410-766-7470 N 00Bonded warehousing 000 www.priorityworldwide.com

Supply chain management, contract Schenker/BAX Global 516-377-3000 N 00 000EDI www.baxgoesschenker.com logistics

Cross trade in 88 countries, international PO management, business SDV International Logistics 718-525 8100 N 00 0 www.sdvusa.com logistics intelligence, WMS, EDI

Air & ocean import/export, transborder, Shipment reports, interactive SEKO Worldwide 800-228-2711 N 00 000 www.sekoworldwide.com carnets, AES/SED ﬁ ling, letters of credit shipment calendar

Service By Air 800-722-0402 N 00Remote location ﬁ ling, import/export 000 www.servicebyair.com

Target Logistic Services 310-900-1974 N 00Custom packaging and crating 000Forms library, claims status www.targetlogistics.com

Team Worldwide 800-527-1168 B 00Warehousing 0 Create shipments online www.teamww.com

U-Freight America 650-583-6527 N 00 0 www.ufreight.com

Consolidation, transload/crossdock, UPS 800-443-6379 B 00 000 www.ups-scs.com DC bypass

US Express Freight Systems 800-328-8000 B 00Convention freight services 000Automatic e-mail updates www.usexpressfreight.com

Worldwide Express 610-521-5450 A 00 00 www.worldwideexpress.com

WPX Delivery Solutions 800-562-1091 B 0 On-demand & logistics services 00 Place orders online www.wpx.com

36 Inbound Logistics • June 2007 KEY: Asset- or Non-Asset-Based: N = Non-asset-based; A = Asset-based; B=Both Compliance: shipments comply with government, security, and trade regulations Documents: shippers can book/create customs or import/export documents online

SPECIAL SERVICES: SERVICES OTHER THAN AIRFREIGHT FORWARDING

OTHER OTHER

Hot shot/ground expedite, ISO 9001:2000, C-TPAT, CBSA-ASFC, 000 0000 00000Repackaging, crating truckload, local cartage FAST, PIP, CSA, BASC

Creative packaging & design, value- 0 00 0 00000 ISO 9001:2000 added warehousing

Recoveries, transportation 00000000 0 Ground expedite, air charter ISO 9001:2000 protective services

Freight optimization, reverse 000 0000 0 Entertainment industry specialist logistics

Project moves, global textile 00000000 00000Vendor assembly & consolidation C-TPAT logistics

00000000Government services 000Home delivery

Packaging, crating, 00000000 00000Purchasing & invoice auditing warehousing

Land operations, ocean Reverse logistics, temp-control, 3PL, 00000000 00000 ISO 9001:2000, C-TPAT freight crossdock

Aerospace, oil & gas, projects, ISO 9001:2000, ISO 14001:2004, 00000000 00000Warehousing & distribution, crating health care, cosmetics, NGO ISO 18001: 2004, C-TPAT, IATA, FMC

Trade shows, pharmaceutical Warehousing & distribution, 00000000 00000 ISO 9001: 2000, C-TPAT, HazMat, IATA sample distribution inventory, PO & vendor management

0 0 000 Government services 000 0

2/4-man deliveries, reverse 00000000 00000Warehousing, pick/pack C-TPAT logistics, white glove services

Hot shot, airport-to-airport, 000 0000 00000Compliance training, banking ISO 9000:2001 full truckload

00000000 00000 ISO 9002, C-TPAT

Hand-carry and various value- 00000000 00000Rail intermodal, ground freight Internal quality review process added services

0 0 00002-day service, 3-5 day service 0000Warehousing & distribution AFA

00000 00Duty drawback 00000Consultation

00 00 00 00WMS, inventory control

June 2007 • Inbound Logistics 37 Moving Freight Smarter SM

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Industry Outlook: Faring Well, Despite Challenges page 40 Taking Responsibility For Responsible Care page 46 Shippers and Carriers Commit to Best Practices page 50 Producers, Providers, Technology Merge page 56 Chemical Logistics A Study in Terra page 61 C06.2007L

June 2007 • Inbound Logistics 39 A JOINT SUPPLEMENT FROM

CChemicalL Logistics All articles written by Gregory DL Morris Industry Outlook: Faring Well, Despite Challenges

Advances in safety and technology contend with stubborn tactical challenges.

he spectacular tanker fi re that melted an access ramp to the San Francisco Bay T Bridge dominated the news for only one day. Never mind that it was a gasoline tanker and not a chemical tanker that crashed and burned – the incident provided an opportunity for the popular press to pry into the millions of shipments and billions of pounds of chemical products transported throughout North America every year. SAFE AND STRONG: Chemical producers and shippers report strong business growth But the next morning, it was and a continued commitment to safety. Overall, the industry posted fewer safety back to partisan politics and incidents for more ton-miles, largely due to Responsible Care initiatives. American Idol. Chemical producers and carriers practice – invented in Canada and ty logistics providers (3PLs) are likely gasped upon seeing the foot- quickly adopted in the United States leading the way in this arena. 3PLs age of towering fl ames and smoke and worldwide – includes a provision have realized that the power of on the highway, then heaved sighs for carriers and logistics providers enterprise resource management of relief when no one began an to become partners. Th e program databases lends itself well to exposé on hazardous materials has received mixed reviews, but supply chain effi ciencies. transport. Th e industry, in fact, has the American Chemistry Council, At the other end of the supply a good story to tell: fewer safety an industry trade group based in chain, Elemica, a global network incidents for more ton-miles, and Arlington, Va., plans to begin track- for chemical buying, selling, and improved effi ciency throughout ing and publishing data on the supply chain management, has the chemical supply chain. degree to which member companies advanced the cause of e-commerce Some of the credit for these use RC-partner carriers. since its formation in 2001. improvements goes to producer ini- Technology also deserves credit Software standardization, tiatives, notably Responsible Care for chemical logistics advances, say however, remains elusive among (RC). Th is code of management shippers and carriers. Th ird-par- Continues on page 44

40 Inbound Logistics • June 2007 :I<8K@E> FGGFIKLE@K@CF98C :FDD

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Th e Business of Chemistry Th e U.S. chemical industry is the nation’s largest export sector, accounting for 10 cents of every dollar of U.S. exports. Because chemicals are now manufactured in many production locations around the world, international trade has grown.

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Shipments (billion $) $377.1 $385.8 $415.6 $416.7 $420.3 $449.2 $438.4 $461.5 $486.5 $526.5 $558.0 Production (index where 1997=100) 84.4 86.1 91.2 92.7 94.6 96.0 94.3 100.0 99.7 102.8 102.5 Exports (billion $) $60.8 $61.8 $69.5 $68.0 $70.5 $79.9 $80.2 $81.1 $91.6 $109.5 $119.5 Imports (billion $) $40.3 $44.9 $50.3 $54.6 $62.2 $73.6 $78.9 $86.1 $101.1 $112.9 $128.3 Trade Balance (billion $) $20.5 $16.9 $19.1 $13.4 $8.3 $6.3 $1.3 -$5.0 -$9.5 -$3.5 -$8.8

Sources: Bureau of the Census, Bureau of Labor Statistics, National Science Foundation, American Chemistry Council

44 Inbound Logistics • June 2007 © Penske Logistics 2007

What if no one took the road less

CHARLES traveled? GOODYEAR

Charles Goodyear’s ingenuity and steadfast resolve resulted in the re-invention of the wheel. At Penske, we approach logistics management with that same dedication, and we’re fueled by a determination to help you achieve profitable growth. So from transportation management to integrated logistics, we’re always looking ahead, seeking new ways to find even greater efficiencies in our clients’ supply chains. To see how our dedication has helped others profit, visit PenskeLogistics.com. Northwest Tank Lines is among four truckers on CCPA’s Responsible Taking Responsibility Care partners list. urged carriers and other service For Responsible Care providers to adopt RC in its en- tirety. Railroads were more willing than truck lines, given the time Shippers and industry (3PLs) to become RC members. and expense of adoption. Carriers, organizations help push North of the border, the manufacturers, and associations Canadian Chemical Producers’ were frustrated, however, because carriers and 3PLs to Association (CCPA) is taking a tar- while the RC ethic was easily trans- become RC partners. geted approach to spreading the ferred, the practices that applied to RC ethic and processes to the ser- manufacturing were not readily ad- aybe it was the vice sector. Th e association and opted by the service sector. motivation to put their member producers are carefully money, and movements, selecting specifi c carriers and work- Proactive Partners M where their mouths ing closely with them. In response, both ACC and CCPA are. Maybe it was the mojitos. Th e RC codes of management created partner programs, with At the annual Responsible Care practice for process safety, health, codes adapted for service providers. (RC) conference in Miami last and environmental compliance were Th e initial response was promis- May, the American Chemistry fi rst developed by the CCPA in 1978. ing, but when early adopter service Council (ACC) announced a plan Th ey were soon adopted by ACC, providers did not gain much new to begin surveying all members and both organizations have contin- business, some soured on the idea on the extent to which they use ued to expand and adapt the codes. and others put off joining. Responsible Care partner carriers ACC developed Transportation “Th e partner program started to transport their shipments. Community Awareness and as a marketing tool for carriers,” Th is major development is one Emergency Response in 1985, says Debra Phillips, manager of of several important new trends in which CCPA quickly adopted. Th e Responsible Care for ACC. “Th e the safety and security of hazard- U.S. codes of management practice idea was that carriers would earn ous materials in commerce. Beyond contain an explicit product stew- more business by adopting the the ACC plan, some member com- ardship code, and CCPA developed codes. Th at was a success to a cer- panies are developing their own specifi c product stewardship guide- tain degree.” She admits, however, initiatives to convince carriers lines at the end of 2004. that the bump was likely less than and third-party logistics providers Initially, both associations early partners had hoped.

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Global Logistics & Transportation Solutions ©2007 BDP International, Inc. ACC cannot require members to more of them will become partners.” common to carriers and 3PLs. work only with RC partners, “which ACC is meeting them halfway. CCPA is also working with the would violate anti-trust regula- “Until two years ago, we did not Canadian Trucking Association tions,” Phillips notes, but starting have a sector in the codes for 3PLs. to enhance the motor-carrier next year the association will begin As we discovered how far into the evaluation process. polling its members to determine chemical supply chain they have Both the CN and CP railroads how much business they give to RC moved, and what decisions they are have become CCPA RC partners; so partners. making for chemical producers, we have two of Canada’s leading railcar “We will ask members if they realized 3PLs are an important part leasing operators, Procor and GATX consider partnership status when of our industry,” Phillips explains. Canada. CCPA’s partner list also seeking bids, then publish the re- Individual producers are also includes four truck lines: Harmac sults,” says Phillips. “We cannot Transportation, Northwest Tank obligate producers to use partners, Lines, PDI, and Harold Marcus. but making the survey results pub- ACC cannot obligate Harmac, based in North York, lic will generate peer pressure.” Ontario, has been involved with RC producers to use RC for six years and has just complet- Setting the Standards partner carriers, but ed its re-verifi cation. Producers can select their “One of our core customers, own metrics – total value and/or it will begin polling Ashland Canada, approached us in number of shipments, tons, and members to determine early 2000 about becoming a part- ton-miles, for example. Obviously ner,” says Curt Roush, director of that allows a great deal of leeway how much business security and compliance for Harmac. to choose the most fl attering light. they give to partners. “We knew it would be a challenge, But Phillips says the industries will but with Ashland as a sponsor, we eventually develop standards. started the three-year cycle to our Indeed the response has been fi rst verifi cation, ensuring that we strong. fostering the partnership program, had the codes of practice in place.” “We have received an onslaught according to Phillips. She declined Th at verifi cation came in October of new partnership applications to name specifi c fi rms, but says 2003, with re-verifi cation last since the RC conference,” says many are actively off ering to spon- October. In that time, the partner- Phillips. “We are trying to grow the sor their carriers. ship codes have evolved. “In the fi rst portion of shipments for which our “One member has off ered to verifi cation we were scrutinized as a members use partner carriers, and pay the partnership dues – which manufacturing company would be,” this is an important component of can total tens of thousands of says Roush. “It was cumbersome. that eff ort.” dollars – for its top-performing car- How could we show, for example, ACC currently claims 70 partners riers,” she notes. In addition, some that our research and development of all types, largely railroads and RC members plan to phase out complied with RC requirements?” bulk truck lines, and has received their non-partner carriers over the close to 20 recent partnership ap- next few years. Verifying the Process plications. All U.S. Class 1 railroads For its part, CCPA is taking a Since then, CCPA formed the have become partners; Canadian tightly focused approach to recruit- Transportation Partners Council, National (CN) and Canadian Pacifi c ing service provider partners. which developed a verifi cation pro- (CP) are partners of both ACC and “Joining RC is not a universal val- tocol specifi cally for carriers. Th e CCPA. Fewer LTL carriers and 3PLs ue proposition,” says Brian Wastle, 151 verifi cation elements were con- have pursued membership, a fact vice president of Responsible Care solidated into 37. that is not likely to change given the at CCPA. “We have simplifi ed the “Th e other elements were not nature of the LTL business, Phillips membership process, and added eliminated,” says Roush, “they says. She is confi dent, however, that value for carriers. But we complete were aligned with transportation signifi cantly more 3PLs will enter a needs assessment with each car- operations. It makes the re-veri- the fold. rier to determine if it makes sense fi cation process more meaningful. “3PLs are market driven,” says to pursue partnership.” Not easier – it’s not supposed to be Phillips. “Producers have outsourced Last year CCPA held a workshop easy – but more sensible. a good portion of logistics services, to kick off the new partnership “Internally,” he adds, “we recog- and chemical logistics is a grow- initiative, and has formed a new nize that becoming an RC partner ing business for 3PLs, so we expect committee to pull together issues makes us a better company.” CL

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Best practices keep effi ciency gains and cost reductions our supply chain, geography, and chemical shippers and as a result of outsourcing,” says infrastructure.” To emphasize the Mathes. “We had to tweak certain logistical nature of the TIH re- carriers thriving. processes, but in general, we duction push, Dow will measure s a case study, Dow are pleased with the results. We progress by the number of ship- Chemical is an able proxy work with some 3PLs on site, but ments as represented by ton-miles. for the bulk of the process our partners vary based on local Dow’s carriers and 3PLs need A industries. Th e Midland, markets, union rules, and work not worry about the business im- Mich.-based fi rm transports 125 councils.” pact of reducing overall volumes billion pounds per year of raw ma- With such wide range and scope, through these eff orts. Reducing or terials, intermediates, and fi nished it is not surprising that Dow con- eliminating hazmat shipments is products around the globe. Half of stantly identifi es, implements, and likely to lead to a concentration of its outbound shipments are trans- manufacturing for certain prod- ported by truck, one quarter by rail, ucts – with the probable result of and one quarter by bulk marine. a greater volume of safer fi nished- Th at excludes Dow’s inbound pipe- goods shipments. line deliveries, and a fragment of Dow’s desire to reduce TIH small-volume specialty chemicals shipments isn’t simply strategic, it ships by air. Dow’s annual freight however. Th e company suff ered bill alone equals $2 billion. a rail-switching accident at one Further down the supply chain, site a few years ago. “We worked Dow maintains 45 diff erent busi- with our railroads in Europe and nesses, called “value centers,” that North America and revised our ship products to 140 countries – procedures based on that incident,” about three-quarters of all coun- Mathes says. tries in the world. In developing Best practices fl ow both ways, countries, Dow uses a mix of local he adds, noting that highway car- distributors and logistics providers, “ We have experienced riers in Brazil are using Dow as well as international fi rms with protocols to improve their driving a strong presence in a given coun- effi ciency gains and under a program called “Sharp Eyes try, to handle its shipments. cost reductions as a on the Road.” “One challenge for Dow is to fi nd Worldwide, Dow has at least international service providers result of outsourcing.” one dozen GPS/RFID pilot projects that can meet our minimum sup- — Dana Mathes, underway covering TIH railcars, ply chain requirements,” says Dana Director of Global Logistics, Dow Chemical containerized freight, tank truck Mathes, the fi rm’s director of glob- hauls, and cylinder gas shipments. al logistics. “In China, for example, we use a mix of local over-the-road disseminates its best practices. At Getting Connected carriers, global terminal companies, the strategic level, for instance, Another group focused on and marine pre-pack fi rms.” Dow plans to reduce shipments of industry best practices is the Domestically, Dow completed toxic inhalation hazards (TIH) 50 chemical consortium Elemica. Th e outsourcing most of its transporta- percent by 2015. After all, the saf- organization, which includes 22 tion – including its truck fl eet, and est possible hazmat shipment is no major producers and distributors one of the largest tank-barge fl eets hazmat shipment. such as BASF, Rohm & Haas, and on the inland waterways – four Th e plan might sound more like Shell Chemical, has been devel- years ago. It began leasing its huge a health, safety, and environment oping a standard electronic order railcar fl eet some time ago. initiative, but, according to Mathes, tendering and status check system. “We have experienced both “it requires strategic thinking about “Th is kind of electronic tendering

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TO LEARN MORE ABOUT OUR SERVICES AND PUT OUR TRUSTED EXPERTISE TO WORK FOR YOUR COMPANY, CALL 1-866-720-5871 OR VISIT US ONLINE AT WWW.LTSLOGISTICS.COM. is common in the van world, but of the largest chemical distribu- for highway use taxes.” does not yet exist in the chemical tion fi rms in the country, and also Ashland is one of the few large world,” explains George Grossardt, consumer goods such as Valvoline chemical producers that has re- vice president and general man- motor oils. It recently consolidated tained its proprietary truck fl eet: ager for Schneider National Bulk all its operations into a single logis- 450 power units and 900 trail- Carriers, based in Green Bay, Wisc. tics group. ers – about 60 percent van and 40 “Th is kind of digital connection is “We now have one supply chain percent bulk liquid. Th e company diffi cult because chemical loads inbound and outbound, across primarily uses its proprietary fl eet have their own idiosyncrasies.” all business divisions,” says Brian for outbound shipments, while com- Schneider, however, is current- Brockson, Ashland’s director of mon carriers deliver inbound loads. ly developing standards, and hopes global logistics. “We are an asset to “We have also improved our ca- to have a pilot operating by the end the entire corporation.” pacity planning,” adds Ed Kelly, of the year. “Th en we can plug into Ashland’s director of global logis- Elemica and have access to all 20 Gaining Global Visibility tics central support. “Some carriers shippers. Because we predict cost As part of that consolidation, are still struggling to implement savings as high as 18 percent, we the company is implementing a homogeneous systems or deliv- are committed to the program,” single system based on SAP. er the information we need. But Grossardt explains. “We will soon possess global vis- within the next two to three years, Committing to logistics best ibility into all volumes and sales we will get down to one standard. practices was a mission Ashland information,” says Brockson. “Th at Electronic load tendering is the real Inc., based in Columbus, Ohio, be- visibility will allow us to imple- prize; some carriers can do it today.” gan roughly one year ago. Th e ment modern technology, such On the rails, a classic case of parent company comprises a range as GPS in all our fl eets, electron- shared best practices is the awards of process industries including one ic driver logs, and mileage tracking railroads now give to recognize

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www.aclines.com NASDAQ: ACLI producers that have achieved zero shipper-caused non-accident releases. All of the Class 1 railroads now bestow such awards, and the number of recipients each year grows as the number of shipper-caused releases decreases. BNSF Railway, one of the largest chemical-carrying railroads in North America, celebrated the 10th anniversary of its Product Stewardship Award by recogniz- ing 60 shippers – one more than it recognized last year, and 16 more than in the program’s fi rst year. “In the stewardship meetings we often review basic functionality,” says Mark Stehly, assistant vice president for environment and research and development for BNSF. As in sports and business, the fundamentals are often where problems arise fi rst, he notes. “Preparing the car for shipment, making sure no damage occurs, ensuring bolts are tight – these are the basics,” says Stehly. “We have found that checklists and examples of damage are helpful. Often, entry-level employees go fi rst to the loading rack. Th ey do receive some training, but don’t have the experience to know what to look for. “Schedules are also very eff ective,” he continues. “Changing gaskets regularly, for example, rather than after someone notices damage or wear, is a best practice.” “Companies are getting the message that safety is a collaborative SHARED RESOURCES: Chemical producers and their carriers now collaborate closely eff ort,” adds Katie Farmer, vice to implement transportation and supply chain management best practices, such president of industrial products as electronic order tendering and status check systems. sales for BNSF. “In our last stewardship meeting we discussed BNSF’s Emerging Growth Team the most effi cient and eff ective way new Department of Homeland is another example of doing well to transport chemicals. When ship- Security and Federal Railroad by doing good. Th e team’s prima- pers choose to do business with us, Administration rules. We empha- ry mission is to fi nd new customers they recognize our safety record.” sized continuous improvement for the railroad, but by extension, it Th is new BNSF business through best practices. BNSF also brings new shippers into the initiative is also involved with the has transported nearly one mil- fold for the Stewardship Award and Assess-Improve-Maximize (AIM) lion hazmat shipments without Responsible Care initiative. initiative, which is allied with the incident. But we know it is that “We have an opportunity to National Industrial Transportation one-in-a-million case that will build relationships with shippers,” League’s “First Mile Last Mile” cause problems for everyone.” says Farmer. “We are looking for program. CL

54 Inbound Logistics • June 2007

Producers, Providers, Technology Merge

3PL technology hits the abled shippers and carriers often is a tendering, tracking, and trac- juggle multiple legacy systems. And ing system that integrates business chemical market. shippers and carriers with single processes and allows shippers to hemical production is one systems often fi nd them incom- optimize logistics across multiple of the most varied and com- patible with those of other carriers trade lanes and transport modes. plex industries that carriers and consignees. C and logistics providers serve. Many shippers with technology Automate Everything Major chemical producers comprise needs turn to 3PLs, some of which “We automate all processes,” some of the largest companies in have made important inroads into says Kinnard. “Our systems are the world, operating manufac- the chemical industry in the past completely database-driven. We turing complexes that sprawl for few years. Th e second batch of 3PLs receive orders from our customers’ miles. Other chemical fi rms are making a push into the chemical SAP or Oracle systems, then family-owned businesses in niche sector is being carried on a wave of tender and review the data – all markets, or major global producers technology. behind the scenes. Th is drives with tiny production units. “We have doubled our business the process automation that is Moreover, a small company with the chemical sector over the key to lean logistics, supply chain is just as likely to be the shipper, past two years, and are on track management, and manufacturing.” and the huge multinational the to triple our business this year,” Th e lean aspect capitalizes on consignee, as the other way says Mike Kinnard, CEO and co- intelligent communication. “It is around. And because of the founder of SCO Logistics, based in essential to keep systems scalable,” specialized nature of the business, Northbrook, Ill. says Sreelatha Surendranathan, di- it is served by the major Class Th e key to that growth, Kinnard rector of technology for SCO. 1 railroads, as well as dozens of says, is SCO’s web-based plan- Automation and communication shortline railroads; and the largest ning and execution tools for both are also available in less elaborate bulk highway haulers, as well as inbound and outbound transpor- systems. “Even small shippers and single owner-operators. tation. “Some customers ask us customers can send e-mail or a Some producers and carriers to provide a complete solution, so spreadsheet,” she notes. “Th e object boast the latest in enterprise re- they can outsource several services is to automate so they only have source management and logistics to us. Others in-source our tech- to manage exceptions. A business software, while many others still nology by licensing our systems,” rule-driven engine should handle employ a cadre of clerks to keep he explains. routine workfl ow.” paper records. Even computer-en- At the core of its technology Logistics automation in action

56 Inbound Logistics • June 2007 WEKNOWCHEMICAL

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© 2007 LeSaint Logistics produces defi nitive results. “Using a own customers, but they share of proprietary eff orts by DuPont to web-based tool, for example, carri- space, reduce duplication, and take manage its global supply chain, but ers can plug their data directly into cost out of the system. As long as is now an independent third-party a shipper’s loading schedule,” says they are not sharing cost, price, or service provider. Mike McGuigan, SCO’s executive customer data, everyone benefi ts. “Once we know what customers vice president of sales and market- “LTL carriers are already col- need, we examine where produc- ing. “With this system, shippers laborating this way, and they tion and inventory are positioned, know what trucks to expect when, are reaping the benefi ts. Why and fi gure out how to meet that and carriers are not waiting to load, shouldn’t shippers do it themselves demand profi tably,” says Singh. so they can better manage driver and share in the savings?” he adds. “Starting with their needs and de- hours of service.” Some consignees LMS uses an SAP-based ERP ciding what is required of each now require delivery appointments, system to centralize planning in- plant and carrier is a basic idea, but which can also be reported back formation. By receiving orders the trick is knowing how to execute with web-based tools. three or four days in advance, it can that detailed plan, all the way down Logistics Management optimize transportation and con- to scheduling.” Solutions (LMS), a 3PL Until recently, chemical based in St. Louis, also producers might reevaluate relies on technology. It logistics every three years started as a traditional 3PL or so; now they do it an- serving Monsanto when it nually, Singh notes. “Th e was a chemical company, chemical market has be- and has continued to serve come a dynamic market,” that fi rm as well as others he explains. that still operate in the pro- SCC’s technology so- cess industries. lution, which includes LMS has been a forecasting and optimi- Responsible Care part- zation engines, is called ner provider for about Zemeter. Some shippers three years, and was one hire the fi rm to conduct of the fi rst 3PLs to join a one-time supply chain the program. Th e compa- HIGH-TECH TOOLS: Maintaining a analysis; others license the production schedule in the face of ny manages LTL and truckload constantly shifting priorities is a software for continuous use. shipments in the United States, challenge for chemical companies. Canada, and Mexico for BASF, and Solutions such as Supply Chain Back to basics was recently hired by plastics dis- Consultants’ Zemeter can help. Two common problems persist tributor M. Howland in Chicago. as shippers and carriers attempt solidate several LTL moves into one to improve operations and service Collaboration in Action truckload shipment. through technology, notes Singh. LMS focuses on collaboration, “Th is process does not require “Many companies have not mas- says Dennis Schoemehl, president much fl exibility from carriers – only tered the basics. If the systems and CEO. Collaboration does not the ability to make stops en route, inside are not under control, open- mean sharing markets or custom- which they likely already do. Th at ing technology connections to the ers, he says, but rather logistics incurs a small additional charge, outside world will hurt,” he says. capacity. Rival producers still com- but still costs less than a separate Even for producers and carriers pete aggressively for markets and LTL shipment,” Schoemehl says. that have the basics under control, customers, but agree to cooperate On a global level, chemical pro- applying technology intelligent- on shipments and storage, he ex- ducers are starting to incorporate ly can be a challenge. “Even with plains. After all, it is wasteful to technology-driven logistics plan- a good understanding of informa- duplicate warehouse space or mul- ning into their strategic thinking. tion technology, you cannot leave tiple carrier dispatches. “We start developing supply processes and people out of the “Our technology allows us to chain strategy by asking custom- equation,” says Singh. “Software is manage collaboration without di- ers what they need,” says Sujit thought of as an answer to every- vulging shippers’ proprietary Singh, chief operating offi cer of thing, but merely throwing tools at price or volume information,” says Supply Chain Consultants, based in a problem doesn’t help. Companies Schoemehl. “Everyone serves their Wilmington, Del. Th e fi rm grew out must think holistically.” CL

58 Inbound Logistics • June 2007 ( $!# &#( $ "#

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A Study in Terra

Four questions for Joe our inspection practice with our methods that you would consid- carriers and the Department of er a new standard for chemical Giesler, senior v.p. of Transportation to be sure we meet logistics best practices? best practice standards. Safety and commercial operations for Terra and its main carriers inspection practices over the last chemical company Terra work diligently with Th e several years, specifi cally for haz- Industries, Iowa. A Fertilizer Institute, along ardous materials, have become with the rest of our industry. It standard – any risk of a carrier hav- is not appropriate to say that What transport modes ing its operating license revoked is Terra specifi cally has designed does Terra use and too high for Terra to contract with new best practices; however, we have you made any ma- that carrier. Q and our truck, rail, and barge car- jor changes to that mix or to riers are continually involved in your carrier base? What about Have any of your updating industry best practices third-party logistics services? carriers or customers re- for loading, unloading, safe- To deliver fi nished products Q cently implemented any ty, environmental, and training to customers, 29 percent of procedures. A shipments move by truck, 50 percent by rail, 13 percent by How has technology barge, and eight percent by pipe- Chemical Logistics RFP helped Terra improve The logistics specialists advertising in this line from six originating points safety and effi ciency or supplement have agreed to examine your Q in North America. One major dif- reduce costs? ference to our transportation chemical logistics challenges and operations is that we diversi- needs, and provide free, no-obligation Terra has partnered with fy equipment as customers and advice, solutions, and information. technology provider products change. For instance, we Your request is totally confi dential. A Supply Chain Consultants. needed to add specialized tankers Ask your questions, Its software package, Zemeter, to our rail and truck fl eets. Terra you’ll get answers. Go online to integrates our internal supply uses third-party logistics servic- www.inboundlogistics.com/rfp planning and record-keeping with es to automate freight rating, and logistics tracing and freight rating, providing an effi cient tool implemented tracing software to A Special Supplement from Inbound Logistics keep up with railcar movements. and Chemical Week for pulling information from our

Industry Outlook: Faring Well, Despite third-party logistics packages Challenges page 40 Taking Responsibility For Responsible Care page 46 and operating system. Th e ability How important is it to Shippers and Carriers Commit to Best Practices page 50 to view and analyze forecasting, you that a service pro- Producers, Providers, Technology Merge page 56 Chemical Logistics A Study in Terra page 61 supply, and production planning C06.2007L vider be a Responsible Q against actual demand and replen- Care partner? Can you compare the safety auditing process for ishing needs is a must for Terra as carriers that are and are not we diversify our product mix and partners? customer base. As our supply chain and cus- It is diffi cult to say how tomer demand model has become many of our carriers are more intense, a software pack- Responsible Care partners. age that provides the fl exibility to A June 2007 • Inbound Logistics 39 Before entering into a contract integrate with other solutions is with a truck or barge carrier, how- necessary. After reviewing several ever, we thoroughly investigate Let’s Get Digital! alternatives, we chose the Zemeter the carrier’s safety, maintenance, Want an easy way to distribute this demand planning and supply chain and compliance records. We also special supplement to your colleagues package because it provides this inspect each truck, railcar, or and partners worldwide? capability effi ciently, and is less barge before and after loading. costly than going through a single Check out the digital edition: We conduct an annual review of system upgrade. CL www.inboundlogistics.com/digital

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Race to the Border: CATCHING UP WITH LATIN AMERICAN by Joseph O’Reilly LOGISTICS and Kathleen Hickey

With so much focus on the Far East and the West Coast, Progressive trade policies and to a lesser degree the Near East (Eastern Europe), and foreign investment, U.S. consignees and shippers need only look due south developing transportation to ﬁ nd one of the world’s emerging commercial and infrastructure, and a growing outsourced manufacturing and logistics markets. In 3PL presence in Brazil and terms of geography and logistics development, Latin Mexico are heating up Latin America is on the periphery of U.S. distribution American logistics. networks – and on the minds of forward-thinking global supply chain executives.

June 2007 • Inbound Logistics 63 Race to the Border: CATCHING UP WITH LATIN AMERICAN LOGISTICS

Given Latin America’s proximity to the two leading economies – Mexico and Th e convergence of logistics and U.S. market; the institutionalized diffi cul- Brazil – are making a concerted eff ort to trade compliance functions is becom- ties of pulling Asian-origin cargo through transform Latin America into an emerging commonplace and companies are congested West Coast ports; ongoing ing logistics hotspot. fi nding amenable locations to base their development of transportation and logis- operations in Brazil and Mexico, says tics infrastructure in the region, thanks Alvaro Quintana, the business leader in part to 3PL penetration; and grow- for JPMorgan Chase Vastera’s trade and ing foreign direct investment from the logistics operations in Mexico. Th ese United States and elsewhere, the region’s centralized facilities are elevating logistics standards across the board for Latin American countries and companies alike. Aside from its location, Mexico’s low manufacturing costs and develop- Mexico ing transportation capabilities make it Tracking Trade an excellent option to consider when placing logistics and supply chain oper- GDP: $742 billion ations. Historically, Mexico has been 2005 U.S. Foreign Direct Investment: passive about investing in and growing its $71 billion transportation connections, but new government leadership is dictating a more 2006 $249 billion (manufactured goods, oil and oil products, silver, Export to U.S.: progressive and committed approach to Exports: fruits, vegetables, coffee, and cotton) 85.7% driving infrastructure improvements, as 2006 $253 billion (metalworking machines, steel mill products, agri- Import well as intermodal partnerships and trade Imports: cultural machinery, electrical equipment, car parts for assembly, from U.S.: agreements with the United States and repair parts for motor vehicles, aircraft, and aircraft parts) 53.4% other leading economies around the world. “Recently Mexican President Felipe INFRASTRUCTURE SNAPSHOT: Benito Juárez International Airport (Mexico City) Calderón said that we need to increase border crossings. Th at is not a typi- CARGO VOLUME (2006) RUNWAYS cal statement from a president. It’s very 380,397 tons 05R/23L: 12,795 ft. 05L/23R: 12,966 ft. encouraging,” observes Quintana. AIRLINES SERVED: Aero California, Aeromexico, Air Canada, Air France-KLM, Alaska Airlines, American, British Airways, Continental, Delta, Grupo Taca, Japan Airlines, LAN Airlines, The Beat Goes On Lufthansa, Mexicana, Swiss International, United, US Airways, Varig Brazil’s economy, too, is dancing to the beat of rapidly increasing com- DID YOU KNOW? Mexico City Airport is the largest airport in Mexico, ranking 44th in the world mercial growth, anchored by a strong in total tonnage. The airport links the Mexican capital to 48 cities nationwide and 55 cities commodities export market that totaled abroad. $138 billion in 2006. Export volumes are expected to grow because of Brazil’s INFRASTRUCTURE SNAPSHOT: Port of Manzanillo strong currency compared to the U.S. dollar, and low labor costs, says Carlos Main Channel Depth: up to 46 feet Container Volume (2006): 1.3 million TEUs Gonzalez, director of SEKO Brazil, a CARGO FACILITIES: Specialized facilities for handling grain, vegetables, cement, and raw branch of global logistics company SEKO. materials; refrigerated facilities for handling, transporting, and warehousing perishable Th is growth potential has given the products; multiple-use facilities for handling and storing general and container cargo. government and private sector more reason to develop transportation infra- DID YOU KNOW? The Port of Manzanillo is the only port in Mexico able to double-stack structure to meet pulsating demand. containers onto railcars. As U.S. businesses continue their quest Sources: CIA World Fact book; AAPA; Airports Council International; U.S. Bureau of Economic Analysis; U.S. Direct Investment Abroad; World Aero Data to fi nd the most economic and reliable global sourcing and outsourcing locations, Mexico and Brazil are gradually catch-

64 Inbound Logistics • June 2007

# & ! & ! ! # $ # ! # % " # # # # ! ! 2 " ! Race to the Border: CATCHING UP WITH LATIN AMERICAN LOGISTICS

ing up with other emerging logistics and a Brentwood, Tenn.-based third-party increased freight volume. From 1993 to distribution markets. Progressive trade logistics provider. 2005, trade among the nafta nations policies and increasing foreign investment, “Ongoing trade policy changes climbed 173 percent, says J. Anthony improvements to transportation infra- throughout Latin America are moving Hardenburgh, vice president global trade structure, and a growing 3PL market have trade from restrictive to open,” he adds. content, Management Dynamics, an East many U.S. companies considering a run Th ese free trade agreements will continue Rutherford, N.J.-based global trade soft- for the border. to accelerate the maturation of Latin ware provider. America’s logistics capabilities. Th e Americas may even become its THE FIRST STEP: Latin America’s trade growth will own trading bloc – operating in a similar › Liberating American Trade continue over the next ﬁ ve to 10 years, format as the European Union – within Free trade agreements have dramati- spurred not only by open trade poli- the next 10 years, says Hardenburgh. cally changed the logistics landscape in cies but increased political stability and “Free trade agreements within the Latin America and opened the doors continuing investment in infrastructure, Americas will absolutely help the region to greater trade within the region and Benki predicts. compete with the European Union,” he with other countries, especially the For example, the North American Free asserts. United States, says Al Benki, senior vice Trade Agreement (nafta), which cov- Other major free trade agreements president of international services at ers trade among Canada, the United impacting Latin America include Ozburn-Hessey Logistics (OH Logistics), States, and Mexico, has dramatically Mercosur and the Dominican Republic-

Public-private partnerships aimed at creating and connecting U.S. and Mexican logistics facilities are key to increasing cross-border trade efﬁ ciencies. A newly announced partnership between the State of Nuevo Leon, Mexico, and U.S. developer The Allen Group will link the Dallas Logistics Hub (below) with an intermodal facility in Monterrey-Saltillo, Mexico. The Dallas facility will include BNSF and Union Paciﬁ c intermodal terminals and key road and airport access points.

66 Inbound Logistics • June 2007

Central America Free Trade Agreement, the Dominican Republic. It comprises As a result of these agreements, U.S. commonly called dr-cafta. Mercosur the second-largest U.S. export market in foreign direct investment in Mexico spe- is a regional trade agreement founded in Latin America, behind Mexico, and is cifi cally, and Latin America in general, has 1991 among Brazil, Argentina, Uruguay, currently the biggest free trade agreement accelerated. Since nafta was ratifi ed in Venezuela, and Paraguay. Bolivia, Chile, in the region. 1994, U.S. outlay to Mexico has increased Colombia, Ecuador, and Peru currently “A free trade agreement can be the from $17 billion to $71 billion in 2005, hold associate member status. deciding factor in whether a company according to the U.S. Bureau of Economic dr-cafta encompasses trade among locates a plant in a certain country, or Analysis. In Latin America, U.S. invest- the United States, Costa Rica, El Salvador, imports/exports to other countries that are ment has more than tripled from $117 Guatemala, Honduras, Nicaragua, and part of the agreement,” says Hardenburgh. billion in 1994 to $353 billion in 2005. 3PLs Lead the Way In May 2007, Reading, Pa.-based Penske Logistics partnered with Penske penetrated the Brazilian market in the mid- to late 1990s Belgian freight forwarder ABX Logistics to create a joint company that through a joint venture with Cotia Trading S.A., then the largest independent provides international freight management services to companies in Brazilian trading company. We entered this partnership to leverage Cotia’s Brazil. The ABX-Penske Air & Sea venture refl ects the growing maturity in-country knowledge and expertise to serve Brazil’s growing consumer mar- of Latin American markets and the demand for complementary logistics ket, while also gaining access to other trading partners in the region. Since expertise to meet the shifting challenges of companies in the region. then, Penske has bought out Cotia and doubled business in Brazil. Penske’s inroads into Latin America began in the 1980s when it fol- Because business opportunities and needs in Brazil are more domestic lowed automotive manufacturing customers south of the border to and distribution oriented, leveraging Cotia’s knowledge of the market and Mexico. In the two decades since, the 3PL has expanded its presence in understanding of tax issues in different areas has been vital. When Penske Mexico, while targeting logistics partnerships partnered with ABX Logistics, our customer base required that we develop and acquisitions to cement its footprint in Brazil. greater competency managing intercontinental product movement, so its Inbound Logistics spoke with Joe Gallick, freight forwarding capabilities complemented our contract logistics exper- senior vice president of sales for Penske tise. Likewise, ABX Logistics was looking for a logistics counterpart to its Logistics, to parse out the different contexts of forwarding business. This joint Brazilian venture brings to bear both com- doing business in Mexico and Brazil, the growing panies’ specialized capabilities as we go to market. outsourced logistics market, and the challenges IL: What types of customers and what industries are leveraging facing companies establishing manufacturing Penske’s resources to target the Latin American market for manufac- and distribution competencies in the region. turing, distribution, and logistics activities? IL: How has Penske Logistics grown its busi- JG: The automotive industry brought Penske into Mexico; since then ness in Brazil and Mexico to serve U.S. and we have expanded our footprint into the truck manufacturing vertical as global customers? well. Penske has also been able to move successfully into the automotive JG: Penske’s business in Mexico and Brazil has supply base, and horizontally into more diversifi ed industrial and dura- evolved for different reasons. In Mexico, we oper- ble goods manufacturing. The sheer scale and volume of North America’s ate six facilities serving seven customers. Much automotive sector requires logistics service providers to design effective of this activity originated in northeastern Mexico material fl ow networks, and adapt information technology systems to when some manufacturing customers migrated support OEMs’ lean manufacturing processes. Penske has leveraged this there in the mid-1980s. So we naturally followed their lead into Mexico. expertise into other supply chain verticals. Because of Mexico’s proximity to the United States, our customers’ Brazil has some overlap in its automotive sector. For example, Penske business strategies were largely driven by U.S. interests – exporting manages inbound moves for 50 General Motors automotive suppliers. intellectual capital and management resources, then marrying that with Elsewhere, many customer needs focus on domestic distribution and requisite labor needs in Mexico. Penske has created a foothold in the consumer electronics market for

68 Inbound Logistics • June 2007 Race to the Border: CATCHING UP WITH LATIN AMERICAN LOGISTICS

Central American countries are optimistic they begin embracing new, and poten- petitiveness, and investment practice for that the 2005 cafta legislation will have tially unfamiliar, free trade agreements, InfoAmericas, a logistics consultancy a similar impact on foreign investment. Quintana reports. Th ese issues are miti- based in Coral Gables, Fla. While these free trade agreements are a gated somewhat by the similar structure of “A truck in Colombia can transport goods boon to importers and exporters, compa- treaties over the last 10 or 15 years, many to Ecuador but can’t move goods from nies still need to develop mechanisms to of which are based on nafta language. Ecuador to Columbia,” he says. “Without fully take advantage of and be in compli- Still, enforcing these treaties can be enforcement, companies don’t achieve ance with these policies, says Quintana. challenging, and without enforcement regional consolidation, and the market Many importers and exporters face ini- beneﬁ ts are minimal, says John Price, remains fragmented with small players that tial diﬃ culties with trade authorities as president and director of the trade, com- can’t invest in modern logistics facilities.”

companies such as Sony and Samsung. IL: What are the logistics and transportation advantages for companies doing business in Brazil and Mexico? JG: Mexico’s manufacturing capacity and proximity to the United States are obvious advantages. Most of its consumer demand is still in the United States, but as the economy strengthens it will create more opportunities to target the domestic market as well. Brazil’s Through complementary logistics partnerships and acquisitions, Penske Logistics cemented its footprint in Brazil. explosive consumer growth and From its warehouses there, Penske serves global corporations such as GM and Sony. position as South America’s most progressive economy have created a space for logistics service and facilitate inland distribution to the United States? providers and companies to make inroads there and help build it into a JG: Penske is urging more customers to look at some emerging inter- major manufacturing hub. As economic growth slowly fi lters out to other modal options. In Kansas City, for example, we bring product inbound South American countries, companies will be able to support these mar- from Asia into the Port of Manzanillo, and the Port of Tampico can kets from Brazil as well. accommodate European and Brazilian freight volumes. Penske manages this freight from the ports, using stack trains for transport to Kansas IL: What areas need to be addressed? City, where it can then be offl oaded and deconsolidated for U.S. redistri- JG: Infrastructure improvements are shared concerns for both Brazil bution. This option makes sense for certain types of manufacturers. and Mexico. Companies in Brazil are not only importing product into market for resale, but are beginning to more comprehensively establish IL: Are Brazil, Mexico, and the U.S. governments talking and working manufacturing operations in locations such as Manaus, a port city on the with private enterprises to support growth initiatives in Latin America? edge of the Amazon that relies on river-fl ow transport to deliver product JG: I see activity that indicates ongoing conversation across the polit- to Brazil’s larger consumer markets. More effi cient transportation options ical and business community. Academic and policy forums foster much are needed to meet growing domestic demand. In Mexico, developing the of this dialogue. Whether or not this discourse is trickling down to the necessary infrastructure to ease port congestion and safely and securely regional and local level, I don’t know. Ongoing discussions about world facilitate transportation across the border are areas being addressed. trade’s ebb and fl ow, and the challenges of doing business globally, are meaningful. At the very least, these types of discussions are beginning IL: Do you expect to see more companies locating distribution to take root, enabling companies in Brazil and Mexico to continue invest- facilities in Mexico to circumvent U.S. West Coast port congestion ing in and growing their businesses.

June 2007 • Inbound Logistics 69 Race to the Border: CATCHING UP WITH LATIN AMERICAN LOGISTICS

As more liberal trade policies become intermodal corridors, 62,137 miles of two- land border crossings,” notes Quintana. standard rules for engagement, Latin lane roads, and more than 6,213 miles of Currently, public and private sectors American countries will have even greater four-lane highways, Mexico is poised for within the United States and Mexico are incentive to invest in the necessary trans- supply chain growth, according to a recent collaborating to improve cross-border portation infrastructure and modern Council of Supply Chain Management trade operations and link Mexico’s ports logistics facilities to accommodate greater Professionals (cscmp) report. with U.S. inland port facilities. trade volumes and lure additional foreign In order to compete with developed For example, in May, the State of business. In Mexico and Brazil, the race nations’ logistics operations, how- Nuevo Leon, Mexico, which is developing has already begun. ever, Mexico must overcome several an inland port and manufacturing facil- challenges, including infrastructure ity, and Th e Allen Group, architect of the MEXICO: issues – especially its rail network – and 6,000-acre Dallas Logistics Hub in Texas, › Making Inroads and Laying Track customs delays. Currently Mexico’s port signed a memorandum of understand- Currently, 70 percent of Mexico’s trade delays are twice that of international ing to create a new trade corridor between with the United States is shipped via land, standards, reports cscmp. Mexico and the United States. and 37 percent of that moves through Despite these shortcomings, Mexico’s Laredo, Texas. But if current nafta and ports are a pivotal component of its supply In the Zone Th e agreement includes designating a customs pre-clearance zone for developing integrated logistics systems linking the Interpuerto intermodal facility in Monterrey-Saltillo, Mexico, and the Dallas Logistics Hub. Th eir shared objective is to increase trans-border transport effi ciency and improve trade competitiveness among enterprises located in both areas. “Customs pre-clearance is important for both parties because it will expedite the fl ow of goods between Nuevo Leon and Texas and provide additional security for enterprises operating within the facilities,” says Ambassador Francisco Javier-Alejo, Nuevo Leon’s executive coordinator. Th e Dallas Logistics Hub adjoins Interstates 35, 45, and 20, and is in close proximity to Dallas/Fort Worth International Airport. Current plans for both BNSF and Union Pacifi c to build and operate intermodal facilities in and Shipments from Mexico’s Port of Cardenas can be delivered directly to America’s heartland via Kansas near the hub will off er U.S. consignees City Southern’s rail corridor into the Kansas City SmartPort. and shippers a full complement of intermodal resources to move shipments to inbound Asian freight volumes are any chain prospects. Transportation authori- and from Mexico. indication, Mexico’s potential as a logistics ties are laying the groundwork to improve Elsewhere, Kansas City SmartPort, an hub is equally predicated by comprehensive intermodal connections and infrastructure inland port supported by both public and transportation capabilities from the ports to accommodate Asian-origin overfl ow private sectors, has created a rail corri- to the highways, and all modes in between. volume increasingly diverted from the U.S. dor with Kansas City Southern Railroad With several globally competitive ports, West Coast. linking the Port of Cardenas on Mexico’s a top-50 global air cargo hub in Mexico “Mexico needs to continue to build West Coast to the heart of the American City, 16,156 miles of railroad track, four infrastructure and grow its seaports and Midwest. With the convenience of an

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...a team you can Trust!

Salvador Magaña [email protected] (52) 55 5093 2795 Juan José Méndez León [email protected] (52) 55 5093 2785 Paola Cruz [email protected] (52) 55 5093 2784 Andres Bello 10, 4th Floor, México D.F. México 11560 Race to the Border: CATCHING UP WITH LATIN AMERICAN LOGISTICS

on-site Mexican customs facility, state- “Brazil is still a young logistics market increase over 2005. Global air carriers are side consignees can clear goods moving worldwide,” says SEKO Brazil’s Gonzalez. taking notice. through the Mexican port in Kansas City, “It is moving out of the undeveloped Delta Air Lines, for example, started streamlining transit and circumventing category.” its Latin American operations in 1998. It congested ports in the United States. Brazil’s airfreight sector is on a fast Th ese developing projects should help ascent. São Paulo is Latin America’s num- boost effi ciency on the motor freight ber-one air cargo hub, pulling in 475,182 side as well. Mexico’s trucking network is tons of freight in 2006 – an 8.3-percent currently comprised largely of single operators, reducing effi ciency and exposing security and theft concerns. “Diffi cult traffi c patterns in Mexico create routing and security issues. Hijacked Brazil trucks, for example, are prevalent in Latin America,” says Nancy Troutman, vice Tracking Trade president of distribution and logistics for GDP: $943.6 billion Neoris, a Miami-based consulting fi rm. But these pain points are easing 2005 U.S. Foreign Direct Investment: as U.S. over-the-road carriers such as $32 billion Schneider National, Roadway, CFI, and Exports: $138 billion (transport equipment, iron ore, soybeans, Export to U.S.: Swift Transportation penetrate the footwear, coffee, autos) 19.2% Mexican market, bringing with them Imports: $91 billion (machinery, electrical and transport equipment, Import from U.S.: modern equipment and IT capabilities chemical products, oil, automotive parts, electronics) 17.5% that enhance customer service and raise transportation expectations for Mexican businesses. INFRASTRUCTURE SNAPSHOT: São Paulo/Guarulhos International Airport For its part, Mexico’s transportation CARGO VOLUME (2006): RUNWAYS: and logistics competencies are complemented by ongoing initiatives to 475,182 tons Runway 09R/27L: 9,843 ft. Runway 09L/27R: 12,140 ft. minimize challenges for consignees and CARGO FACILITIES: Five cargo terminals; free Port/Foreign Trade Zone; refrigerated storage; shippers, as well as the cross-border Free fresh meat inspection; livestock handling; X-ray equipment; dangerous and radioactive goods and Secure Trade project (FAST) imple- handling; large/heavy cargo mented by Mexican and U.S. authorities AIRLINES SERVED: ABSA Cargo Airline, Aerolineas Argentinas, Aeromexpress, Air Canada, to reduce customs delays between the two Air France-KLM, Alitalia, American, British Airways, Continental, Delta, FedEx, Iberia, Korean countries. Air, Lufthansa, Nippon Express, Panalpina, Polar Air Cargo, South African Airways, Tap Air BRAZIL: Portugal, Tristar Air, United ›Joining the Global Stage DID YOU KNOW? São Paulo ranks 36th in the world in total tonnage. From the Amazon River in the northwest to the coastal cities of São Paulo and INFRASTRUCTURE SNAPSHOT: Port of Santos Rio de Janiero in the southeast, Brazil Main Channel Depth: up to 44 ft. Container Volume (2005): 2.3 million TEUs lays claim to a fast-developing network of port facilities. Tubarão, Itaqui, Santos, and CARGO FACILITIES: Special warehouses for inspecting and sorting coffee; facilities for han- Sepetiba rank among the world’s top 50 dling bulk corn, bagged sugar, bulk sugar, bulk wheat, and cotton; cold storage warehouse; ports in terms of cargo tonnage. Current three wheat grain silos; 101 tanks for liquid fl ammables. eff orts to better connect the ports and DID YOU KNOW? The Port of Santos ranks 38th globally in total tonnage, and is the largest develop Brazil’s expanding railroad net- port in South America. work will help reduce logistics costs and Sources: CIA World Fact book; AAPA; Airports Council International; U.S. Bureau of Economic Analysis; enhance the country’s competitiveness on U.S. Direct Investment Abroad; World Aero Data the global stage.

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Race to the Border: CATCHING UP WITH LATIN AMERICAN LOGISTICS

began with fi ve fl ights a day to Central GLOBAL SHIPPERS: company they don’t know,” says Price of and South America, mostly on nar- ›Outsourcing in a New World InfoAmericas. row-body aircraft, reports Abimael For global businesses still wary of going With Latin America’s accelerating Ortiz, regional director, cargo sales, Latin it alone in Latin America, a growing pace of change, companies require guid- America, Caribbean, and Asia for Delta. cadre of 3PLs with strong competencies ance as they adapt their go-to-market Its cargo operations continue to grow, par- in Latin American trade are prepared to strategies and the logistics resources and ticularly in perishable shipments. Today, facilitate introductions. capabilities necessary to support end- Delta operates a Boeing 757 medium- to Outsourcing logistics functions to consumer demand. long-haul aircraft out of Lima, Peru, to 3PLs averts risky capital investment, “One typical problem for Latin handle the country’s expanding perish- off ers greater fl exibility in engaging in American companies is that their sup- ables export business. or disengaging from a market as needed, ply chain infrastructure didn’t grow in a Delta transports perishables including plants, fl owers, fi sh, and vegetables globally from Latin America. It also ships apparel, automotive parts, and electrical equipment to a range of customers in Latin America, including freight forwarders, and local and international companies. Because of its proximity to the United States, Latin America is an ideal location from which businesses can ship U.S.- bound perishable and time-sensitive cargo. “In contrast to Asia and Europe, shippers can move goods into the United States from Brazil within four to six hours,” Ortiz adds.

Consumers Drive Change Moving forward, Brazil’s fast-growing, consumer-driven market will demand a more concerted eff ort on the part of both transportation and government sectors to create better connections and While consumer demand in Brazil is growing, infrastructure has not kept pace. Companies still rely on more fl uid movement of goods within the operations such as this river port in Manaus to transport products to Brazil’s larger consumer markets. country. Th is will help reduce ineffi ciencies and drive down costs, making Brazil’s and allows businesses to grow their pres- planned manner. Th ey may have intro- burgeoning manufacturing regions even ence organically. duced a new product or acquired a new more accessible and attractive to global In Latin America, where transportation company, but haven’t adjusted their sup- outsourcers. and warehousing/distribution infra- ply chain infrastructure to that changed While infrastructure growing pains structure development has been patchy, reality,” reports Jose Nava, president are certainly cause for pause, public and companies are compelled to consider out- of Latin America’s DHL Exel Supply private enterprises in Latin America are sourcing options to gain effi ciencies and Chain. coming together to stimulate funding reduce costs from the start. For many, the Given challenges such as this, 3PL and facilitate improvements across the fi rst step is overcoming the anxiety associ- expertise in Mexico and Brazil is vital for board. Brazil’s coastal port development ated with outsourcing. businesses looking to make inroads there. and capacity to accommodate signifi cant “Fear of outsourcing in Latin America Th ere is, however, growing indica- volumes of inbound container freight vol- stems from a weak legal environment tion that outsourcing anxieties in Latin ume is a huge boon to the country’s future and a lack of security. Many companies America are wearing off – thanks in large economic reckoning – as is its burgeoning are slow to outsource because they don’t part to the forward-thinking initiatives air cargo sector. want to trust inventory management to a of several trans-national corporations.

74 Inbound Logistics • June 2007 O]egn]Yogjd\g^ljY\]¡ Egn]egkmfemf\g\]afl]j[YeZag[ge]j[aYd

>mddK]jna[];mklgek:jgc]jkKgml`]jf:gj\]j Dg_akla[k;gfkmdlYflk EYimadY\gjYHal]pHjg_jYek9kkaklYf[] Aee]p! EPM&K&;mklgek;gehdaYf[];gfkmdlaf_ Fgjl`9e]ja[Yf>j]]LjY\]9_j]]e]fl=ph]jlk ;MKLGEK:JGC=JK=JNA;= 9^ÕdaYlagfoal`M&K&;mklgek:jgc]j ooo&YdeYrgdaf]&[ge Race to the Border: CATCHING UP WITH LATIN AMERICAN LOGISTICS

Within the last fi ve years, Latin American- “ I can count on one in turn, creates outbound effi cien- based companies have begun supply cies – and reduce inventory and costs chain improvement projects to com- hand the number while increasing productivity. pete globally. While the automotive and In March 2007, Cummins’ Mexico consumer goods industries sit at the fore- of Latin American division partnered with JPMorgan front, “today almost any industry in Latin universities that Chase Vastera to help manage freight America is outsourcing at some level,” transportation to and from manufac- notes Nava. offer logistics turing plants in Juarez and San Luis General Motors de Mexico (GMM), Potosi, Mexico. Th ese facilities manu- for example, turned to Penske Logistics degrees. We have facture and distribute diesel engines and in 2002 to act as lead logistics provider. to do extensive handle approximately 60,000 import/ Th e companies created a three-phase export transactions per year. As part of plan to reduce costs and ineffi ciencies for work internally to the agreement, JPMorgan Chase Vastera the automobile manufacturer’s expand- handles import/export compliance, duty ing inbound transportation network, develop talent.” and broker management, and U.S./ enhance overall supply chain visibility, — Jose Nava, president of Latin Mexico border logistics management. and create benchmarking processes to America’s DHL Exel Supply Chain In Mexico and Brazil, where 3PL drive better accountability among suppli- penetration is approaching a level of ers and carriers. maturation, global companies such as Prior to bringing Penske Logistics Cummins and GM are successfully on board, GMM’s eight operations in adapting their outsourced logistics opera- Ramos, Toluca, and Silao were manag- tions and strategies to account for their ing transportation and logistics activities own growth, forcing local companies to independent of each other, creating become more competitive, while also pav- myriad ineffi ciencies and redundancies. ing the way for other enterprises to make GMM implemented Penske’s proprietary inroads into Latin America. Logistics Management System (LMS) to create a collaborative platform for its sites No Pain, No Gain and logistics partners to access and share While these successes in Mexico and real-time information. Brazil point to the overwhelming capacity for increased manufacturing and distribu- Higher Visibility, Lower Transport Costs tion/logistics activity in the region, both Th e initiative helped GMM improve private and public sector businesses are supply chain visibility, which increases addressing the following growing pains communication among the plants and elsewhere in Latin America as they get up their carriers; holds carriers account- to speed: able for performance; and drives accurate › Th e 3PL market in Latin America, capacity forecasting. Within six months In 2004, Cummins Latin America, a while consolidating, continues to be of rolling out the project, GMM reduced São Paulo, Brazil-based diesel engine fragmented with many small to medium- transportation costs 15 percent. manufacturer and distributor, began using sized 3PLs operating in niche markets, “LMS is more than a cost-reduc- the Tradesphere management solution says OH Logistics’ Benki. Shippers that tion plan. It has changed the way we from JPMorgan Chase Vastera to facili- operate across Latin America need to manage inbound transportation at the tate and expedite import/export cargo work with multiple providers or with a individual level. GMM operates with a through Brazil’s Linha Azul (Blue Line) large provider that has partnerships in new degree of accountability – the sys- trade program. place throughout the region. Countries tem has enabled us to maximize our best Utilizing the global trade manage- and companies are developing programs performers, while weeding out the lia- ment software, the manufacturer is able to address these concerns and these bility of low-performers,” reports Roger to expedite information exchange with issues shouldn’t stop companies from Peterson, director of production control Brazil’s trade authorities, create supply doing business in Latin America, he says. and logistics, General Motors. chain visibility of inbound parts – which, › In some cases, outsourcing needs

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Race to the Border: CATCHING UP WITH LATIN AMERICAN LOGISTICS

are growing faster than the logistics ser- to develop additional security capabilities business interests, and Latin America at vice providers capable of meeting them. and constantly review security practices.” large, is the capacity to connect existing “I can count on one hand the colleges cargo portals with modern transportation and universities in Latin America that MOVING FORWARD: Growing links and distribution facilities. As these off er logistics degrees. Logistics providers ›Consumerism, Collaboration transportation and logistics competencies struggle to obtain talent at the speed the One reality for Brazil and Mexico is that continue to develop and mature, com- market requires. We have to do an exten- increasing trade – a result of investments panies are becoming more comfortable sive amount of work internally to develop in transportation and logistics infrastruc- operating in Latin America and will inev- talent,” says Nava. ture – is driving economic growth. itably expand their footprints into other › Credit and wealth distribution is Brazil already has a viable and hungry emerging markets. another factor impacting Latin American consumer base that is luring manufactur- For Payless ShoeSource this is already logistics operations. Credit-based trans- ers and retailers to set up operations. In the case. Th e Topeka, Kansas-based foot- actions are expanding and gaining on Mexico, domestic consumption is growing wear manufacturer opened its fi rst retail once prevalent cash-based purchases, at a slower clip, but trending in the right location in Central America – a store notes Benki. direction. in San Jose, Costa Rica – in 2000. Since Wealth distribution also aff ects trade. Consumption has outpaced GDP then it has partnered with a third-party Ten major Latin American cities, rep- growth in Mexico since 2000, when inter- service provider to open a distribution resenting 20 percent of the population, nal consumption, rather than exports, center within the free trade zone in Colon, Panama, that supports inventory replenishment to all its stores in Latin America. While growing consumerism is a positive Payless now operates 185 stores across six countries in Central America, two sign of economic stability, the real potential countries in the Caribbean, and one coun- for Latin America is the capacity to connect try in South America. existing cargo portals with modern Blazing Their Own Trails Countries such as Panama (which has transportation links and distribution facilities. the added bonus of global trade moving through the Canal), Chile, Colombia, Costa Rica, Argentina, and Puerto Rico control 60 percent of the purchasing power began driving Mexico’s economy. are picking up the trail blazed by both for the region. Trade is concentrated in Th e real driver of internal consump- Mexico and Brazil to create their own eco- these areas rather than across broader geo- tion growth is the rapid expansion nomic paths for the future. In some cases graphic regions, as is the case in the United of consumer credit from a very nar- 3PL penetration already exists; elsewhere States. But as the middle-class consumer row base, according to data collected by U.S. companies are taking their third-party sector grows in Latin America, so will geo- InfoAmericas. logistics partners along for the ride. graphic trade regions, Benki predicts. “In spite of the fact that consumer As a developing region, Latin America › Customs clearance can be an issue credit has grown at more than 25 per- still needs to address a range of issues to for companies considering doing busi- cent per year in Mexico since 2000, the improve its logistics potential. Questions ness in Latin America. “An express economy remains one of the most under- concerning infrastructure, trade policies, package delivered in Argentina can still banked among large global economies,” and the importance of transportation and take up to one week to clear customs. If the report notes. “In Mexico, consumer logistics initiatives in the public sector are the same package arrived in Taipei it credit equals 20 percent of GDP, versus legitimate, but these concerns materialize would clear customs in 18 minutes,” says U.S. consumer credit, which is equal to in other promising logistics locations in Price. about 105 percent of GDP.” Asia and Eastern Europe as well. › Supply chain security is an addi- Continuing eff orts to drive private/ tional concern. “Ten years ago, it was rare Making the Connection public sector collaboration are optimis- for trucks to be hijacked. Today it happens While growing consumerism is a posi- tic signs for Latin American trade and more frequently,” says Nava. “Th is fear tive sign of economic stability, the real ambitious U.S. businesses. Th e run for the has pushed Latin American businesses potential for both Brazilian and Mexican border may soon become a sprint. ■

78 Inbound Logistics • June 2007 The First US Carbon Footprint Event To Set Out Roadmaps For Rationalizing, Planning & Establishing Cost-Effective Carbon Reduction Programmes Presenting Understanding The Business The 2nd Event In Expert Speaker Panel Featuring Our International Contributions From North America’s Case for Series Of Carbon Top Brands & Retailers Footprint Supply Betsy Cohen VP for Sustainability Chain Events Nestlé Purina Measuring and Ben Packard Director of Environmental Affairs Starbucks Coffee Company Chuck Bennett Reducing Your VP, Earth & Community Care Aveda Wayne S. Evans VP of Procurement Carbon Footprint DHL Neel Bradham VP, Business Development Across Operations And The Supply Chain Interface, Inc Dave Newman Head of Global Sustainable Logistics The Inaugural Summit For US Retailers & Consumer Nike Dave Guernsey Product Manufacturers On the Practical Tools, Knowledge & Corporate Environmental Affairs Program Manager UPS Key Measurements Required To Initiate Carbon Reduction Dr Michael Walsh Executive Vice President Programmes & Mitigate Future Climate Change Legislation Chicago Climate Exchange Dave Stangis Director, Corporate Responsibility September 13-14 2007 Intel Corporation Brian Glazebrook Manager of Supply Chain Social Responsibility Marriott Chicago Midway, Chicago Cisco Erin Meezan Practical Pre-Conference Workshop Wednesday September 12 2007: Director of Sustainable Development Interface, Inc. How To Grow Your Business While Reducing Your Workshop facilitated by Eric Olson, Vice President, Bryan Lembke Carbon Footprint Advisory Services, Business Senior Manager, Sustainability for Social Responsibility Pepsico Andrea Asch Manager of Natural Resources Sponsor: "Excellent Ben & Jerry’s content and speakers with Ryan Boccelli practical tools. I'm thrilled that it will Director of Logistics be coming to the US. We'll be there Stonyfield Farm, Inc. for sure!" Paul Comey NANCY HIRSHBERG, VP NATURAL RESOURCES, VP of Environmental Affairs STONYFIELD FARM INC. Green Mountain Coffee Roasters For further information visit www.carbonfootprint-consumerproducts.com Buddy Polovick Chief Shipping Coordinator EPA Smart Way Transport Partnership Allison Hannon Ensure You Attend This Unique And Timely Event To: Corporate Engagement & Research • Understand Why Reducing Your Carbon Footprint Is Crucial To Your Business The Climate Group Dr. Mark C. Trexler • Learn How To Measure And Set The Most Accurate And Efficient Reductions Within Your Director Internal Operations And Across Your Supply Chain EcoSecurities Global Consulting Services • Examine The Cost Benefits Of Carbon Offsets vs Carbon Reduction Programmes To Ellen W. Feeney Identify The Greatest Impact On Business Sustainability VP Responsible Livelihood WhiteWave Foods Company Tim Smith Lead Media Partner Media Partners Senior Director, Business Development & Market Research

BUSINE Shaklee Corporation LE SS B A A L N L I I A A T N Edward A. Klein S

U + E S VP Environmental Affairs THE MAGAZINE FOR DEMAND-DRIVEN LOGISTICS C HICAGO Tetra Pak, Inc.

Call: (1) 800 721 3915 Fax: (1) 800 714 1359 Email: [email protected] Marriott Chicago Midway, Chicago, September

Day One Thursday September 13, 2007 www.carbonfootprint-consumerproducts.com

08.00 Coffee and Registration PANEL SESSION 08.45 Chairman’s Opening Remarks – Defining “Carbon Footprinting” 11.30 Comparing The Payback Of Genuine Carbon Reduction & “Carbon Neutrality” Into Clear & Actionable Business Terms Programs vs Carbon Offsetting Assessing the context for thinking about Carbon Footprints? Where N Evaluating the business benefits and acceptance of prestigious and cost has this issue come from since it started more than a decade ago effective offsets vs realistic and direct emission reduction and where is it going? Carbon footprinting as such is not the N Comparing the payback of carbon reduction in the supply chain vs objective, it is to change the way companies do business, to carbon offsetting initiatives N educate employees and consumers and set the stage for effective Analyzing investment data to indicate the most beneficial way of spending your money policy on climate change. How do all these things fit together? N Considering the “intangible” PR benefits of offsetting and measuring the Why Take Action? Demonstrating The Benefits Supporting impact on the brand A Business Case For Measuring Your Carbon Footprint Facilitated by Dr. Mark C. Trexler, Director, EcoSecurities Global Consulting Services OPENING KEYNOTE PANEL SESSION Paul Comey, VP of Environmental Affairs, Green Mountain Coffee THINKING WIDE ABOUT THE OVERALL BUSINESS BENEFITS Roasters ASSOCIATED WITH REDUCING YOUR CARBON FOOTPRINT Erin Meezan, Director of Sustainable Development, Interface, Inc. 09.00 Why Take Action To Measure Carbon Reduction In The Björn Fischer, Managing Director, 3C The Carbon Credit Company LLC Absence Of Regulation – What Are The Economic, 12.20 Followed by 10 Minutes of Q & A Environmental And Risk Management Benefits? 12.30 Lunch and Exhibition N Why managing your carbon footprint is important How To Get Started! Defining A Reference Point To Focus Your N Demonstrating the key economic, environmental and risk management benefits Carbon Footprint Reduction Investments N Examining the interplay between the latest business thinking and the 2.00 Defining The Scope For Measuring The Boundaries Of Your emerging state, regional and possibly future federal legislation Carbon Footprint Internally & Across The Supply Chain N Defining the key stakeholders – consumers, retailers, manufacturers, the N Determining the current size of your footprint supply chain players N Calculating carbon reduction through your business’ direct emissions Betsy Cohen, VP for Sustainability, Nestlé Purina from operations & logistics or via indirect emissions across the supply Ben Packard, Director of Environmental Affairs, Starbucks Coffee chain Company N Evaluating where to mark the boundaries against the potential returns Chuck Bennett, VP, Earth & Community Care, Aveda across different distribution & energy networks and your specific product environment 09.35 Followed by 10 Minutes of Q & A N Understanding the priorities of the consumer if they expect to see the RATIONALE 1 - MANAGING REGULATORY RISK carbon reductions in the finished product 09.45 Making Sense Of The Latest Regulatory Trends To Predict The N Positioning the carbon message to the consumer in a simple and easily Most Likely Future Legal Framework Over The Next 5–10 Years understandable manner In the US, the regulatory framework is currently led by individual US states. Dave Newman, Head of Global Sustainable Logistics, Nike With such a divergence of requirements, this session will help companies 2.20 Followed by 5 Minutes of Q & A plan for the future through a detailed analysis on the key developments on PRACTICAL CASE STUDY the horizon. N Analysing the existing and emerging systems in place today 2.25 Setting Up Systems And Decision Making Processes For N How are companies preparing for a carbon-constrained world Measuring Your Carbon Footprint N What is the interplay with emerging policies and businesses N Outlining the initial start-up costs and payback periods for the expected N The role of standardization and price discovery on the emerging cost efficiency benefits emissions market N Understanding the costs of developing data management systems Dr Michael Walsh, Executive Vice President,Chicago Climate N Communicating the message across the organisation Exchange N Starting the process of engaging the supply chain Timothy D. Juliani, Markets & Business Strategy Fellow, 2.45 Followed by 5 Minutes of Q & A Pew Center on Global Climate Change MANUFACTURING OPERATIONS CASE STUDY 10.05 Followed by 5 Minutes of Q & A 2.50 Transferable Principles For Measuring The Carbon Footprint Of RATIONALE 2 - EVALUATING THE COST EFFICIENCY SAVINGS Your Key Manufacturing Processes 10.10 Demonstrating The Cost Efficiency Benefits Of Reducing Your N Identifying the areas with the biggest carbon impact with the greatest Carbon Footprint potential for energy reduction N Financial incentives for energy efficiency N Integrating an energy efficient carbon strategy into the business and N The benefits of using renewables suited for your location economic planning N Practical steps for defining a reference point for carbon reduction within N How to maximise and realize cost benefits through more efficient manufacturing operations processes and products Andrea Asch, Manager of Natural Resources, Ben & Jerry’s N Motivating employees to stimulate creativity & the value of carbon footprinting throughout the business 3.10 Followed by 5 Minutes of Q & A Dave Stangis, Director, Corporate Responsibility, Intel Identifying Your Strategic Leverage Points In The Supply Chain Corporation 10.30 Followed by 5 Minutes of Q & A 3.15 Applying The “Lowest Hanging Fruit” Concept To Your Supply RATIONALE 3 - BRAND EQUITY Chain – Focusing Your Communication Efforts To Maximise 10.35 How Superior Carbon Efficiency Performance Builds Brand Carbon Reduction Impact And Reputation N Assessing your priorities - deciding where in the supply chain to apply N Capping into the intrinsic value to the brand your efforts N Identifying best practice on engaging upstream as well as downstream N Investing in the future with a carbon conscious mentality N Developing mechanisms for reporting results N Building internal alignment N Demonstrating the cost efficiency drivers and environmental benefits Ellen W. Feeney, VP Responsible Livelihood, WhiteWave Foods Allison Hannon, Corporate Engagement & Research, The Climate Company Group 10.55 Followed by 5 Minutes of Q & A 3.35 Followed by 5 Minutes of Q & A 11.00 Networking Break and Exhibition 3.40 Networking Break and Exhibition

Call: (1) 800 721 3915 Fax: (1) 800 714 1359 Email: [email protected] 13-14, 2007 Pre-Conference Workshop: SEPTEMBER 12, 2007

Day Two Friday September 14, 2007 www.carbonfootprint-consumerproducts.com

PANEL SESSION 10.35 Defining A Baseline For Measuring Different Transportation 4.10 Designing Carbon Emissions Out Of The Supply Chain - Modes Practical Strategies For Engaging Your Supply Chain To N Practical steps for defining the scope across container shipping and rail Disclose Commercially Sensitive Data N Defining the geographical regions of your operations N Assessing the degree of your control over transportation modes or N Overcoming data ownership issues to promote a genuine commitment to whether you need to collaborate with others carbon reduction across the supply chain N Working with soft and hard targets 11.00 Followed by 5 Minutes of Q & A Tim Higgs, Environmental Engineer, Intel Corporation 11.05 Networking Break and Exhibition Brian Glazebrook, Manager of Supply Chain Social Responsibility, Cisco 11.35 Developing Collaborative Data Management Systems To Leann Speta, Director of Supply Chain Social/Environmental Gather The Most Accurate Information and Save On Inventory Responsibility Program, Sun Microsystems In Transportation 4.40 Followed by 10 Minutes of Q & A N Understanding all of each unit of freight movement to identify the baseline 4.50 Building Business Relationships With Trading Partners, N Compiling a loading report to discover what the baseline is to understand Retailers, Manufacturers And Carriers To Find The Specific the actual current footprint Leverage Point To Deliver Hard Reduction Targets N Sharing more demand information - what kind of data, industry-specific or geographic data? CPFR N Evaluating the different carbon reduction options and targeting the areas N Partnering with the service providers to choose low carbon intensity with the lowest carbon intensity to ensure the greatest carbon reductions alternatives - green renewable and hybrid technology – are these sectors the most attainable too? Raj Sapru, Manager, Advisory Service, Business for Social N Identifying why the size, history and nature of the business relationships in those key areas is also important Responsibility N Establishing clear baseline figures and what the trade-offs will be for cost 12.05 Followed by 10 Minutes of Q & A vs. quality for each measurement to identify the priority areas of the 12.15 Defining Best Practice For Measuring The Carbon Footprint business for reducing emissions Within The Refrigerated Distribution Environment N Setting goals and targets with suppliers and working for future best N Analysing set point optimisation of systems practices N Refrigerant choice Eric Olson, Vice President, Advisory Services, N Life cycle cost analysis of synthetic vs natural refrigerants Business for Social Responsibility Andy Campbell, Head of Refrigeration UK, TESCO 5.20 Followed by 10 Minutes of Q & A 12.35 Followed by 5 Minutes of Q & A MATERIALS PROCUREMENT CROSS-FERTILIZATION CASE STUDY 12.40 Lunch and Exhibition 5.30 Developing Systems For Measuring The Sustainability Of Your 2.00 Understanding What The Utilities Can Do To Help Lower Your Materials Procurement Processes – Identifying The Key Carbon Footprint Metrics N Why the utilities are important – the role they play N N Where do you start? How do you start? Offering energy incentives or premiums to customers N N Examining the sustainability of key materials – defining the key metrics How to set up renewable energy programmes N Neel Bradham, VP Business Development, Interface, Inc Overcoming difficulties of establishing a footprint calculator 2.20 Followed by 5 Minutes of Q & A 5.50 Followed by 5 Minutes of Q & A Understanding The Need To Demonstrate And Carefully Position 5.55 Close Of Day One Followed By Networking Drinks In The Carbon Footprinting To The Consumer Exhibition HOW DO YOU EXPLAIN THE CARBON IMPERATIVE TO CONSUMERS? Day Two September 14, 2007 2.25 Making Carbon Labelling Real For Consumers - Understanding Consumer Perception And Priorities To Maximize Business 08.30 Coffee and Registration Benefit 09.00 Chairman’s Welcome To Day Two and Recap of Day One N Why carbon labeling is important for consumers and which products are LOGISTICSPANEL SESSION of prime importance 09.10 Optimising Efficiency Within Distribution & Logistics Networks N Assessing the consumer reaction to product price increases as a result of To Reduce Carbon Emissions products being carbon friendly N Clarifying how consumers perceive one carbon friendly product offering N Gaining clarity on the cost efficiency and carbon effectiveness of new from another vehicle and route optimization technologies Tim Smith, Senior Director, Business Development & Market N How different transportation strategies can have an impact on reducing Research, Shaklee Corporation CO2 from transport 2.45 Followed by 5 Minutes of Q & A N Examining carbon impact and financial costs of different fuel types N Introducing hybrid technologies or bio-fuels to reduce carbon emissions 2.50 Networking Break and Exhibition further 3.20 Optimizing Packaging To Reduce The Carbon Impact N Minimizing the amount of empty miles that transportation providers go to N Evaluating the business case for more sustainable packaging fill up the trucks quicker N Analyzing the life cycle costs Facilitated by N Approaches that will motivate the supply chain to seek out optimized Buddy Polovick, Chief Shipping Coordinator, EPA Smart Way packaging and to reduce food waste entering the household garbage Transport Partnership Edward A. Klein, VP Environmental Affairs, Tetra Pak, Inc. Wayne S. Evans, VP of Procurement, DHL 3.40 Followed by 5 Minutes of Q & A Dave Guernsey, Corporate Environmental Affairs Program 3.45 Lowering The Carbon Quantities In Materials & Packaging To Manager, UPS Reduce The Carbon Footprint & Engage The Consumer Ryan Boccelli, Director of Logistics, Stonyfield Farm, Inc N Ensuring the package system adds value across product protection, 10.00 Followed by 10 Minutes of Q & A consumer functionality and environmental performance N Evaluating the environmental benefits of using different types of materials 10.10 Improving Transportation and Supply Chain Efficiency While N Developing consumer insights to influence communications and Reducing Your Carbon Footprint purchase behaviour N Quantifying the baseline to judge the degree and direction of improvement Bryan Lembke, Senior Manager, Sustainability, Pepsico N Aligning distribution locations with production and customer demand 4.05 Followed by 5 Minutes of Q & A N Maximizing the efficiency of the dedicated fleet 4.10 Chairman’s Closing Remarks and Close of 2007 Summit Ryan Boccelli, Director of Logistics, Stonyfield Farm, Inc Mark Swenson, VP, Business Development, Ryder Logistics 10.30 Followed by 5 Minutes of Q & A

Call: (1) 800 721 3915 Fax: (1) 800 714 1359 Email: [email protected] Measuring And Reducing Your Carbon Footprint: A Roadmap To Achieving Cost Efficiency Benefits And Supply Chain Collaboration

Breaking down the complexities of carbon footprint reduction into easy to follow steps… PRE-CONFERENCE

With rises in the costs of fuel and widespread media coverage on the threats of WORKSHOP global warming, reducing your carbon footprint is increasingly at the forefront of Wednesday September 12, 2007 the sustainability agenda for retailers and consumer product manufacturers. 09.00 – 12.30 Together with the potential for standards and upcoming regulation in the US, the whole value chain must start thinking about how to effect and deliver carbon How To Grow Your Business reductions within their life cycle costs as a serious commercial and environmental While Reducing Your Carbon proposition, if they have not already done so. Footprint

Yet, where do you start? With so much uncertainty about what a carbon footprint Businesses are already being affected by or even a carbon-rated product is, there is a primary need to define the concept climate change and the challenge is how to and understand why measuring your carbon footprint is important, what it is respond in a way that makes sense for your exactly and how to even embark on such an initiative, whether in the first instance it is being eco-efficient and lowering greenhouse gas emissions within your own company. Through interactive operations, or whether it is mapping out the baselines across your supply chain discussions and practical case study and setting targets to make the greatest carbon reductions as cost-effectively as examples the workshop will focus on the possible. following key questions:

The Carbon Footprint Consumer Products Summit is the first ever conference to N What are the components of a smart demonstrate the business case for measuring your carbon footprint. After corporate strategy for companies that are dissecting the WHYS the event will then show you how to get started, literally taking you step by step to define a reference point for your carbon reductions serious about climate change? investments, both internally and across the supply chain. N How does carbon footprinting support the understanding of a spectrum of options that American Business Conferences is a division of London includes energy efficiency, offsetting and a Business Conferences Limited, a UK-based company specializing in hosting industry-specific global summits for end-users of new technologies, including shift to renewables? government, research and private sector organizations. Our mission is to combine the traditional values Workshop Moderator of program integrity and quality as well as excellent customer service with outstanding value for money.

The Carbon Footprint Consumer Products Summit follows the Carbon Footprint Supply Chain Eric Olson Summit, which was organized by London Business Conferences and attracted over 200 international Vice President, delegates across the Retail, Product Manufacturing, Transportation and Logistics and Packaging Advisory Services sectors. The Carbon Footprint Consumer Products Summit is part of a series of Carbon events staged Business for Social internationally by both sister divisions, including the Carbon Footprint Construction Summit and Carbon Responsibility Footprint Finance Summit. Eric joined BSR in January 2005 with fifteen years of work in the consulting field, Supported by: including significant experience both in SMARTWAY TRANSPORT PARTNERSHIP supply chain management and issues related Higher energy costs and the need for reduced carbon footprints are encouraging to sustainable development. Eric leads shippers and freight carriers to find new ways to optimize the transportation BSR’s growing advisory services practice networks in their supply chain. The SmartWay Transport Partnership addresses these concerns with an innovative delivering consultation on the design of public-private initiative focused on improving the fuel efficiency of goods movement. Participating companies are successful CSR strategies, and the benchmarking their current freight operations, identifying technologies and strategies to reduce their carbon integration of those strategies into core emissions, documenting emissions reductions and projecting future improvement. business practices at BSR’s member In doing so, these Partner companies are demonstrating to customers, clients, and investors that they are taking companies and other clients. responsibility for goods movement emissions throughout their supply chain. SmartWay Transport Partners are leaders in their industries, demonstrating their commitment to corporate social responsibility and sustainable business practices. Partners who demonstrate superior environmental performance Most recently Eric served as Vice President, qualify to use the SmartWay logo to enhance their visibility as good corporate citizens, working to reduce their Advisory Services, with The Natural Step in carbon footprint. San Francisco, where he led that organization’s work to deliver advice and Who Will Attend? Senior Retail Experts including: Vice Presidents for CSR, Heads of counsel to a broad range of companies on Environmental Affairs, Health, Safety & Environment Directors, sustainability matters. Prior to that he served Directors of Sustainability as a Vice President at the Boston Consulting Group, and was a Partner and Founding Leading Directors from Consumer Product Manufacturers Member of the Mitchell Madison Group, a including: VPs of Sustainable Development, Heads of Natural global consultancy focused on strategic Resources, Directors Environmental Stewardship, Corporate Affairs sourcing and supply chain management. Directors Top Logistics & Transportation Providers: Directors of Procurement, Vice Presidents Business Development, Directors of Supply Chains Eric currently serves as Board President for the Climate Neutral Network. Key Packaging Directors and Suppliers: Marketing Directors, Sustainable Packaging Directors, Heads of QA, Energy Managers

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THE MAGAZINE FOR DEMAND-DRIVEN LOGISTICS C HICAGO CSRwire is the leading source of Material carried via CSRwire covers Inbound Logistics mission is to Since 1992, Business for Social The Chicago Sustainable GreenBlue (www.greenblue.org) corporate social responsibility such issues as corporate governance, provide today's business logistics Responsibility (BSR) has been Business Alliance serves a stimulates the creative redesign of (“CSR”) press releases, reports, socially responsible investing (SRI), managers with the information they providing socially responsible growing community of businesses in industry by focusing the expertise of news, and information. business ethics, diversity, philanthropy, need to speed cycle times, reduce business solutions to many of the the Chicagoland area that strive for professional communities to create the environment, human rights, and inventories, and use logistics world’s leading corporations, such as economic success while reducing practical solutions, resources, and “CSR” is defined as the integration of community development. expertise to get closer to their markets Coca-Cola, Starbucks, HP, Time their environmental footprint and opportunities for implementing business operations and values and customers. Through the use of Warner, GE, Disney, Sony and more. contributing positively to social well- sustainability. GreenBlue supports the whereby the interests of all stakeholders CSRwire's parent company, inbound logistics techniques, readers Headquartered in San Francisco and being. This mission is served primari- practical realization of a positive future - including investors, customers, Meadowbrook Lane Capital, LLC has discover and create wealth for their with offices in Europe, China and ly through facilitated peer-based for economic and industrial systems: employees, the community, and the been described as a 'socially companies by matching demand Hong Kong, BSR is a business learning, networking, resource … that purify air, land, and water. environment - are reflected in the responsible investment bank' by the signals to supply and aligning their membership organization that serves dissemination, promotion and … that use only current solar income. company’s policies and actions. Wall Street Journal. The company business process to support a its 250 member companies and other advertising, and other programs. … that generate no toxic waste. specializes in turning values into demand-driven logistics philosophy. Global 1000 enterprises. Through … that align economic, social, and The company distributes full-text valuation while concentrating on IL readers serve a number of strategic advisory services, convenings and environmental benefit. news releases through its syndication succession issues for mission driven functions acting change agents research, BSR works with … whose materials replenish the network, News Alerts, Web site, RSS companies. We are a carbon neutral across their organizations, and use corporations and concerned earth or can be infinitely recycled. feeds, news aggregators, “send to company committed to sustainable supply chain practices to drive stakeholders of all types to create a … whose products contribute to the friend” feature, and search engines. environmental and business practices. efficiencies that impact their more just and sustainable global beauty and abundance of life. customers, vendors and within their economy. As a non-profit business GreenBlue asks: How can we design, CSRwire reaches a global audience of own companies. Inbound Logistics association, BSR is uniquely prototype, and realize this positive journalists, corporate executives, Magazine provides the informational positioned to promote cross-sector future? GreenBlue asks this question analysts, investors, public relations resources to enable that process. collaboration in ways that contribute in specific contexts and industry and advertising professionals, to the advancement of corporate sectors to reveal practical design and academics, and activists in over 200 social responsibility (CSR) and business opportunities. GreenBlue countries. business success. For more achieves success through industry information, visit www.bsr.org. sector-based partnerships that CSRwire Members range from convene stakeholders, establish Fortune 500 companies to NGOs, ambitious objectives, and develop from investment funds to mission- practical design tools and resources driven organizations - all interested in to achieve meaningful change. communicating their corporate citizenship, sustainability, and socially responsible initiatives. Engage Senior Decision Makers On The USPs Of Your Carbon Reduction Solutions

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Who better to comment on the future of the supply chain than the people educating the next generation of logistics executives? Inbound Logistics proﬁ les three dynamic professors on the front lines of logistics education.

amara Chapman By T

June 2007 • Inbound Logistics 85 Th omas Corsi took a curious route to his professorship at the Robert H. Smith School of Business at the University of Maryland in College Park. His undergraduate studies at Kent State University, Ohio, and graduate work at the University of Wisconsin, Milwaukee, focused on transportation geography. If anything, he was primed for a career in urban planning. But Corsi opted for a less- traveled fork on the geographer’s career path, joining the Smith School in 1976 as professor of logistics and transportation at a time when business schools were Thomas Corsi typically staffed by business scholars with fi rsthand experience. Professor of Logistics & “I had never taken a business class in my life when I was hired by the University Co-Director, Supply Chain of Maryland,” he says. “I learned about business on the job.” Management Center, Robert During his 30-plus years at the Smith School, Corsi has watched logistics emerge H. Smith School of Business, as a priority in the corporate world and as a key component of the business school University of Maryland curriculum. “In the 1970s, fi rms regarded logistics as an afterthought,” he recalls. In the aftermath of transportation deregulation, and with the advent of new markets, logistics has risen from the backroom to the boardroom, Corsi notes. Today, as co-director of the university’s Supply Chain Management Center, Corsi focuses on the challenges of globalization and the strategic importance of a well-managed supply chain. For these front-and-center issues, his non-business background gives him an advantage. “Globalization is all spatial,” he says, draw- ing on his geographer’s vocabulary. To help students contend with global realities and bring value to their future employers, Corsi and his colleagues strive to introduce the technology and real- world challenges that await them in the workplace. “We replicate the modern corporation’s systems and applications,” he says. Corsi’s latest tool for spot-on replication is the real-time, continuous-play Global Supply Chain Game, which he and his Smith School colleagues developed in conjunction with researchers at Delft University of Technology in the Netherlands, known for its simulation and graphics capabilities. The Smith researchers supplied the supply chain know-how, while the Delft team created an interactive gaming environment to engage even the technophobic student. Corsi uses this game at the beginning of his core classes at both the undergraduate and graduate levels. Well before students delve into their fi rst case studies, they plunge into the supply chain game, getting a taste for the complex decision-making that facilitates effi ciency and profi tability.

86 Inbound Logistics • June 2007 Played over a four-hour block of time, “The game creates excitement about HE’S GOT GAME: Professor Tom Corsi (standing) prepares logistics students for the game simulates several months in the supply chain,” Corsi says. “Students the real world by playing the Global Supply the life of an international company. It gain experience operating in the fi eld, Chain Game. asks competing two- and three-person facing a whole range of decisions. When teams to devise and deploy strategies they directly experience supply chain But persistence paid off, and to date more that create an efficient supply chain complexity, they understand it faster.” than 320 Smith School MBA students while increasing profits and expand- What’s more, the game supports have tackled the simulation. In addi- ing market share. Along the way, each future learning. “We use the game at tion, the game is now the centerpiece team confronts the consequences of its the beginning of the semester because of a global supply chain competition, decisions, as well as unanticipated sna- all the subsequent cases and lectures which includes student teams from the fus. At game’s end, the team with the then fall into place,” he notes. United States, Europe, and Asia, all com- strongest fi nancial position wins. peting over the Internet. In actual play, each team represents The A-Ha Moment As Corsi sees it, the game is the perfect a competing firm – computer manu- It’s not uncommon for readings and complement to class readings, including facturers, for example. The team must lectures to lead to post-game epipha- The World is Flat, by New York Times col- decide what types of computers to nies – “a-ha” moments when students umnist Thomas Friedman. Like Friedman, make; where to source parts and sell realize they could have altered their Corsi believes globalization will require the product; and how to transport and game standing had they grasped a cer- American companies and business lead- price the merchandise. After making tain concept. They also learn how other ers to adjust nimbly to ever-changing these decisions, the team must analyze teams’ decisions affect their own per- realities. In the future, supply chain man- market conditions to forecast sales and formance. These lessons remind them agement will require executives skilled in place orders. One bad decision, and the they are facing a highly competitive everything from information technology company can fl ounder. marketplace, says Corsi. and fi nancial planning to real-time event Because of all the variables, the game Five years in the making, the Global monitoring and business intelligence. does not lend itself to easy formulas or Supply Chain Game grew out of For that, Corsi says, there’s no better standard approaches. Once the game is research originally fi nanced by the U.S. preparation than hands-on experience over and the winners identifi ed, Corsi Department of Defense. In time, the afforded by tools such as the Global asks the teams to compare results and Smith/Delft team partnered with Sun Supply Chain Game. Apart from its strategies. What worked? What failed? Microsystems to refi ne the simulation suitability for classroom instruction, Why? What should have been done dif- model, enhance its fl exibility, and adapt the game may have applications in ferently? The teams usually can’t wait it for competition. corporate education. “We like to think to test their new knowledge in another “There were times when I didn’t think the model we’re developing here is the round of competition. the game would take off,” Corsi recalls. trend of the future,” Corsi says. ■

June 2007 • Inbound Logistics 87 As Leslie Pagliari sees it, constant change is the only constant facing logistics educators. An assistant professor in the department of technology systems at East Carolina University in Greenville, N.C., Pagliari is coordinator of the school’s undergraduate logistics program. Her job is to prepare students for never-ending, all-encompassing, head-spinning change. “The ideas we teach students as freshmen will be obsolete by the time they become juniors,” says Pagliari, known to her students as Dr. P. Leslie Pagliari Coping with unplanned obsolescence turns a professor’s life topsy-turvy. How Assistant Professor & Coordinator, do you prepare students for a future that deﬁ es predictability? Pagliari does it by Industrial Distribution and Logistics embracing the few certainties that characterize the ﬁ eld: The technology in use Program, East Carolina University today will be quaint and outmoded tomorrow. The workforce that greets you this week will look vastly different next week. And the conditions shaping business operations could change dramatically with one international crisis. So how can a scholar keep up with, if not stay ahead of, non-stop change? Pagliari, who has a Southerner’s gift for easy exchange, insists on building and maintaining personal ties with the companies that hire her graduates. Her courses – which range from freshman-level Introduction to Distribution and Logistics to senior-level Distribution Research – feature the requisite case studies and textbook readings. But they also incorporate on-site visits to the front lines and guest speakers from all facets of logistics. Pagliari counts on these delegates from the trenches to supply lessons in Reality 101, lessons that not only instruct her students, but also keep her in tune with the latest industry developments. Face-to-face contacts, along with ongoing research, ensure that she doesn’t fall back on old classroom tricks. “Some professors teach a supply chain class the same way year after year,” Pagliari says. They hammer home spreadsheet analysis and insist on a mastery of certain software programs. Pagliari incorporates these into her syllabus, too, but she also trains her students to scan the horizon for approaching trends, technologies, and market demands. Pagliari, who hails from the North Carolina foothills, came to her current post after earning her undergraduate degree and a master’s in occupational safety and health from East Carolina University (ECU). A job with Procter & Gamble, as well as on-site experience associated with her continuing studies, landed her

88 Inbound Logistics • June 2007 in numerous manufacturing and ware- With ECU’s undergraduate enroll- house/distribution settings. ment on the rise, Pagliari is working With these experiences under her on curriculum enhancements that belt, Pagliari decided to pursue studies ensure her students’ preparedness for that would marry her long-time interest change and even for catastrophe. She’s in safety and health with her emerging currently developing a syllabus and with a swelling population of Spanish- interest in logistics challenges. Mixing conducting research to support a class speaking immigrants. How should online classes with periodic residen- on security risk analysis and logistics. the relevant health and government cies at different businesses, she earned Scheduled to debut in 2007-2008, the agencies communicate with all sec- a PhD in applied management and course will be taught in the undergrad- tors of the population? And assuming decision sciences, with an empha- uate program and eventually become the agencies will need to coordinate sis in engineering management, from part of the graduate curriculum. response, where should they post Walden University, Minneapolis. The course stems from Pagliari’s inter- translators, dispatch health care work- Pagliari no sooner ﬁ nished her doc- est in the safety and logistics challenges ers, and distribute medicine? toral course work when her old alma the business community grappled with In addition to keeping the curric- mater offered her the opportunity to in the aftermath of Sept. 11. ulum current and change-sensitive, help convert its undergraduate logistics To prepare, she’s studying the way Pagliari also wants to diversify her stu- concentration into a full major. The various companies respond to chang- dent population. Currently, female proposal was too intriguing to pass up. ing homeland security regulations students account for less than 25 per- Since the program’s launch in the regarding everything from transporting cent of all ECU logistics majors. 2002-2003 academic year, the number oil and gas to warehousing chemicals. As Pagliari sees it, women are miss- of ECU logistics students has grown How do they track the location of haz- ing out on a career that plays to from 80 to 185. Each semester, the ardous materials? How do they know if their strengths: problem-solving, lis-

THE TIES THAT BIND: Dr. P (fourth from right) maintains personal contact with the companies that hire her graduates. department graduates about 40 stu- a shipment has been hijacked? How do tening, and big-picture thinking. dents, most of whom are hired before they respond if a worst-case scenario Unfortunately, she says, too many the ink dries on their diplomas. “We materializes? women think logistics is only about have more job requests than graduates,” She’s also examining the logistics warehouses, and overcoming these Pagliari says. challenges that face the public-health perceptions is not easy. Many of these graduates refi ne their sector. In collaboration with North “It takes me twice as long to interest classroom skills on the job, then return Carolina’s health agencies, Pagliari a female student in this program as it to ECU for graduate degrees that pre- has analyzed possible responses to does a male student,” she explains. pare them to assume leadership roles. a hypothetical radiation scare. This That will change once more women, This leads to the kind of two-way opportunity drew on her relish for solv- her students among them, permeate knowledge exchange – professor to ing logistics puzzles and her interest in the fi eld and spread the word. In the student and student to professor – the human side of her discipline. meantime, Pagliari says, “you don’t that Pagliari considers essential for the The study explores the logistics of hear much about females in the fi eld.” development of the logistics fi eld. communication, especially in a state Present company excluded. ■

June 2007 • Inbound Logistics 89 In the spreadsheet-fi xated, technology- focused world of logistics, Mark Barratt is a self-described heretic. Mark Barratt At Arizona State University in Tempe, where he is an assistant professor of sup- Assistant Professor, Supply Chain ply chain management, Barratt ventures into touchy-feely territory. He extols the Management, W.P. Carey School of importance of cultural awareness and preaches the virtues of collaboration – all, Business, Arizona State University he insists, in the name of preparing students for a radically different future. If his students are to have productive careers in an increasingly competitive marketplace, they certainly need to master the latest software and conquer the art of managing inventory. Just as important, they need to understand how people think and behave in foreign countries, says Barratt. And they need to embrace the possibilities of collaborative partnerships, both inside and outside their organizations, and up and down the supply chain. “Sometimes my students get sick and tired of me rattling on about collaboration,” he says, but that doesn’t dampen his enthusiasm. Barratt traces his affection for the softer side of logistics to his graduate school days in London. He grew up in England and worked for several years in the legal profession, specializing in property conveyance. “I decided I wanted to do something more honest for a living,” he jokes, so he enrolled at Cranfi eld School of Management, not sure specifi cally what he wanted to do. A few chance encounters with one of Europe’s leading logistics professors, Martin Christopher, captured Barratt’s imagination. Christopher’s maverick approach to logistics – a topic that seemed downright uncongenial to eccentric- ity – inspired Barratt, and for the next fi ve and a half years, he immersed himself in logistics studies, particularly the possibilities for maximizing effi ciency through collaboration. “At the time, collaboration was a dirty word,” he explains. Dirty word or not, collaboration has become an imperative in today’s world. But that doesn’t mean collaborating is easy, particularly within organizations, notes Barratt. Too often, when logisticians analyze supply chains, they fall back on models that stipulate how people will behave: Person A in Department B will provide data to Person C in Department D, who will then activate Plan E. Neat as that scenario appears on paper, it seldom corresponds with reality. Savvy logistics professionals need to understand organizational behavior and develop strategies for dealing with it, he says. To illustrate this point to MBA students, Barratt asks them to look in the mirror. “I ask: How many of you trust all

90 Inbound Logistics • June 2007 CULTURE SHOCK: Many of Mark Barratt’s students are puzzled when he emphasizes culture in his global logistics classes. But Barratt strongly believes culture is a business issue.

we don’t even know culture is a business issue.” At the beginning of his class, Barratt typically asks how many students speak more than three languages, and how many have traveled to more than 10 countries. Few hands rise, and those that do often belong to international students. To illustrate his point about cultural awareness, Barratt draws upon an anec- dote from his own experiences. On a recent trip to Bahrain, he witnessed a business encounter involving an American, an Australian, and a Bahraini. The American was informal and talked assertively about business deals. The Bahraini, Barratt recalls, was clearly uncomfortable with the American’s casual manners and the hard-driving nature of his business talk. He was more at ease with the Australian, who adopted a formal approach and mixed business talk with conversation about family. “Students need to grasp the cultural differences that exist throughout the world,” Barratt explains. “If you understand what happens in these countries, then you can do business with them.” With that in mind, Barratt urges his students to take internships in Hong your colleagues 100 percent?’ Maybe ease, but too many American busi- Kong, to travel the world between one person will raise their hand,” he nesses cling to a competitive model semesters, or to volunteer with a non- says. From there, they analyze how the that prizes short-term advantage – deals governmental organization in Africa models fall apart when trust is eroded that squeeze suppliers or place unrea- and study how aid is distributed. and the possibilities for collaboration sonable burdens on carriers, he notes. Many students catch his conta- are derailed. “It scares me when I hear companies gious curiosity, but others hesitate to Collaboration outside the organiza- still perceive collaboration as unneces- leave their comfort zones. Too many tion is just as essential for supply chain sary,” Barratt says. “I don’t think they remain mired in the assumption that success, Barratt says. To achieve maxi- will be around in 10 years.” people everywhere want to do busi- mum efﬁ ciency, players up and down the Nor will they be viable if they fail ness with American companies, that chain have to pool resources and focus to prepare for the challenges of the the American tradition of innovation on outcomes desirable to all. That may human side of globalization. will secure U.S. companies a perma- mean sharing information once regarded In his undergraduate and gradu- nent advantage, he says. as a trade secret. It certainly means win- ate global logistics classes, Barratt tells As Barratt sees it, that’s a prescription win deals and numerous partnerships students they will spend much of the for obsolescence, a mindset that invites with outside players, he notes. semester talking about cultures. Most stagnation. “The rest of the world,” he European and Japanese companies of his students are dumbfounded. says, “is not sitting around waiting for are adopting this model with relative “Half the problem,” he says, “is that America to lead the way.” ■

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• Listed in the ACE Directory of Post-Secondary Institutions •I Website: S I 3 • • Dun & Bradstreet # 07-944-9307 N C E 1 9 2 ® www.logisticseducation.edu • DANTES Affiliated

94 Inbound Logistics • June 0607 JON FRICKE TRANSPORTATION/LOGISTICS RECRUITER HIGH ROAD PARTNERS, INC. Leading the transportation, logistics, distribution and supply chain vertical by identifying, recruiting and placing superior talent.

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June 0607 • Inbound Logistics 95 CAREERSOLUTIONS

TIA’s CERTIFIED TRANSPORTATION BROKER PROGRAM

*IM#HADBOURNE -ANAGING0ARTNER sWWWMRIEXECUTIVESOLUTIONSCOM To learn more Be Professional. or sign up for TIA’s CTB Be a Top Performer. program today, Be a Leader. contact us: Be CTB Certified. PHONE: SHEY-HARDING.COM 703.299.5700 Shey-Harding Associates Inc. Executive Recruiters WEB: TRANSPORTATION • LOGISTICS • AIR • OCEAN • RAIL www.tianet.org The Mark of ROAD • HIGH TECH & RELATED INDUSTRIES Respect Among Intermediaries. Confidential Searches – Corporate Rates EMAIL: 562-799-8854 • Fax: 562-799-6174 [email protected] E-mail: [email protected] Seeking an employee? Looking for a position? Visit our web site: www.shey-harding.com Transportation Intermediaries Association STUDY LOGISTICS IN ANCHORAGE, ALASKA Air crossroads of the world! Undergraduate Programs Occupational Endorsement, Logistics Operations Undergraduate Certiﬁcate, Logistics Associate of Applied Science, Logistics Operations BBA Global Logistics Management Post-Baccalaureate Programs Graduate Certiﬁcate in Supply Chain Management Entirely online. Become your company’s expert in RFID or Lean Operations. M.S. Global Supply Chain Management Executive-style classes meet 4 weekends per semester at Anchorage campus.

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96 Inbound Logistics • June 0607 INCREASE YOUR SALARY East Carolina University 15-20 PERCENT Online degree programs from a leader in distance education.

Professional certification will increase your income Enhance your knowledge and career potential in the and provide you with a valuable credential fields of supply chain management, sales, and logis- for your organization. tics management through online study. Other online MS programs include digital communications, network management, information security, manufactur- Certified in Transportation ing systems, and occupational safety. and Logistics (CTL) Build on your associate degree to complete your BS Professional Designation degree online in this dynamic field. Other online bachelor’s degrees include information and computer in Logistics and Supply technology (including concentrations in networking Chain Management (PLS) and network security) and industrial technology. For more information, contact INDIVIDUALS ORGANIZATIONS Dr. Leslie Pagliari Why become certified? Why certify employees? Distribution and Logistics Program Coordinator Because your career Investing in people today Department of Technology Systems matters pays dividends in Science and Technology Complex the future East Carolina University Greenville, NC 27858-4353 252-328-9663 [email protected] www.tecs.ecu.edu/tsys For additional information contact AST&L today. An equal opportunity/affirmative action employer, 202.580.7270 • www.astl.org which accommodates the needs of individuals with disabilities.

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June 0607 • Inbound Logistics 97 Join us for supply chain’s ™ premier event! NO REGIST RATION RATE INCREASE! You p ay 2006 rates in 2007! Things To Do: The 2007 CSCMP Annual Conference kicks off on October 21st in Philadelphia. Join your colleagues in this historic city and take advantage of all that CSCMP 2007 has to offer! See what’s new this year—new speakers, fresh topics, and all the latest Register information every supply chain professional needs to know. And, with no registration rate increase from today! 2006, it’s that much easier for you to attend!

What did last year’s conference attendees have to say about their Don’t miss keynote speaker experiences? Carly Fiorina “It would be difficult to find a more cost- Former Hewlett-Packard CEO effective way to interact with so many clients and colleagues, not to mention the educational value of the various tracks.”

“This conference was well beyond my expectations. With the constantly changing business environment, it’s important to hear new ideas regularly.” L.I.T.TOOLKIT

by Merrill Douglas

Box Ho! RFID Replaces Telescopes

nearly endless variety of prod- a forklift driver who takes it to a storage ucts moves around the globe zone. The driver writes down the con- A in shipping containers. For tainer ID and location, and yard staff China International Marine Containers enter that data in CIMC’s information Group (CIMC), though, the container system. When it is time to retrieve the itself is the product. And just like any container for delivery to a customer, a other product, the shipper needs to driver hunts for the box in the location keep track of its location. noted on the pickup list. The world’s largest manufacturer of shipping containers, headquartered in SCOPING THE YARD Tired of playing hide and Shenzhen, Guangdong, China, CIMC Workers use telescopes to locate con- moves its product out of more than 20 tainers in the yard. But that method seek with its containers, manufacturing plants and 40 container doesn’t always work well. storage yards across China. It delivers to “The containers are so packed in, CIMC ﬁ nds a new RFID major shipping and leasing companies even a telescope is sometimes not able system to help locate in Asia, Europe, and North America. to make out the container ID,” says Although each container is made to Shouquin Zhou, director of CIMC product in its yards. order, the boxes look an awful lot alike. Smart and Secure Container Group. And in a yard that relies on workers The manual process presents other to manually record ID numbers from challenges. When a worker writes the sides of containers, then spot and down a container ID, for example, it retrieve the right containers as needed, might take one or more days for that similarity breeds inefﬁ ciency. data to be entered into the computer In the typical CIMC facility, workers system. Or, a worker writes a num- receive a container at the storage yard ber incorrectly, sending a driver to the gate, record its arrival on a shipping wrong storage location. And, the extra list, direct it to a quality checking zone time needed to hunt for misplaced and, if it passes inspection, assign it to containers while all the other work of

June 2007 • Inbound Logistics 99 L.I.T.TOOLKIT ‹ CONTINUED FROM PAGE 99

To improve yard visibility, CIMC implemented a passive RFID tracking system from Laudis Systems. Benefi ts include less time spent searching for containers and performing yard checks, improved shipping accuracy, and fewer lost containers. the yard continues can translate into high-volume products that are suscep- ers installed on the material handling higher costs. “Sometimes the yard has tible to being misplaced or lost,” says equipment used to put away and to rent extra forklifts,” Zhou notes. Laudis CEO Frank Ritota. retrieve product.” Further problems arise because In the United States, PPG Industries At fi rst, CIMC considered using an supervisors and employees use two- uses the Laudis Sequor system to locate active RFID tag, which is powered way radios to communicate across materials and products in its Tipton, continuously by an internal battery. storage yards. “Misunderstandings Pa., auto glass plant. Laudis is also Instead, Laudis helped it design a rug- occur because voices don’t always developing a system for a New Jersey gedized passive tag, which powers up come across clearly,” Zhou says. “And computer recycling and asset manage- only when it receives a signal from the workers have to rely on memory to ment company. reader. “The passive tag costs $5; an complete assignments correctly.” active tag costs $50,” Ritota says. Not surprisingly, CIMC executives COME TOGETHER A flexible plastic housing protects wanted to implement technology For the container yard application, the tag. “The tag can be applied to a that would capture information about the two companies collaborated to container, then forgotten,” Ritota says. container movements in real time, elim- adapt Laudis’ system to CIMC’s require- “It was designed to withstand the rigors inate paper, regulate daily workfl ow, and ments; CIMC designed the RFID tags. of shipping.” improve the ability to plan work. CIMC chose to work with Laudis in One factor contributing to the imple- CIMC has achieved those goals at part because it was impressed by the mentation’s success is the use of passive two of its facilities, and hopes to imple- vendor’s RFID experience and three- RFID tags on metal containers. “Metal ment similar changes at the others over dimensional location capabilities. can defi nitely wreak havoc by creating the next three years. The improvements Laudis’ software provides a 3D interference challenges for the wireless come thanks to a yard management graphical view of a company’s assets. RFID technology,” Ritota says. Strategic system using passive RFID tags that In the PPG plant, for example, four pal- use of insulating materials solves this CIMC developed with Laudis Systems, lets of product might be stacked one on problem, he adds. Edison, N.J. top of another. Along with the forklift readers, which Founded four years ago, Laudis “The system can zoom down into the scan the tags as containers are put away Systems provides RFID-based tech- third pallet from the top and identify and retrieved, the system uses readers nology for tracking assets through the its contents,” Ritota says. “It also can at the yard and factory gates to scan supply chain. identify the height of the pallet stack IDs as containers pass in and out. “The system works for high-ticket, through RFID readers and comput- CIMC started using the system at

100 Inbound Logistics • June 2007 one storage yard in September last alarm notifi es the driver.” lease forklifts for the yard during peak year, and at a second this April. Under Because the system records the con- demand times. the new process, as a container passes tainer’s location, the driver knows ■ Improved shipping accuracy by out of the factory gate, an RFID tag is exactly where to look when it’s time to nearly 100 percent. attached and a reader records its ID. At retrieve it. As the container leaves the ■ Eliminated one hour’s worth of the yard gate, a second scan notes that yard, the reader there scans it for a fi nal yard checks per day. the container has arrived for storage. time to note its departure. Then the tag Over the next three years, CIMC Using a CDMA wireless network, the is removed for reuse. plans to install the system in about 40 reader transmits the ID to a system on The new system provides more accu- of its yards, as well as in seaport facil- a forklift truck, which then displays rate and current information than the ities. “CIMC’s goal is to make RFID instructions to the driver. When the previous process. By eliminating man- tags an essential part of the container driver places the container, the system ual procedures, it allows CIMC to check to increase global supply chain man- records its location. containers in and out in less time, saves agement efficiency and reduce asset Forklift drivers don’t have to enter time spent searching for misplaced con- management costs,” Zhou says. data as they work. “We’ve kept them tainers, and reduces labor. Laudis is pursuing other contracts in out of the loop, eliminating human CIMC expects to see a return on its China, including one aimed at tracking error,” Ritota says. Drivers could make investment within one year. To date, barge traffi c as it travels from the inte- a mistake, though, by failing to follow the system has produced these results: rior to the coast. The company already instructions displayed on the screen. If ■ Eliminated four searches for mis- has a contract to implement a system at that happens, the system sends an alert. placed containers per month. one port. “If we do well with it,” Ritota “The system tells drivers what to do ■ Eliminated the loss of about eight says, “we have an opportunity to track and where to go,” Ritota notes. “If a containers in transit per year. barge traffi c down the Yangtze River, all container is put in the wrong place, an ■ Reduced by 50 percent the need to the way to Shanghai.” ■ 8)0¤4.07*/( :063130%6$5 It was the hottest roll-out of the year. Hundreds of shoppers lined up in front of your stores...

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Datatrac Corporation >> 800-827-2677 >> www.datatrac.com IN THIS SECTION: 3PLs • Air/Expedited

3PLS

Averitt Logistics • www.averittexpress.com

Averitt’s years of experience with Fortune 500 companies across diverse industries enable its top-notch logistics professionals to provide built-to- fi t solutions for effective sourcing, order fulfi llment, and transportation services. A balanced equation of technology, facilities, equipment, and personnel is how Averitt determines the best options for you to gain time and cost effi ciencies in your supply chain. Learn more about Averitt’s capabilities in warehousing services, portside distribution, dedicated fl eet management, transportation network design, and transportation management by visiting this web site.

Peninsular Warehouse • www.pentrans.com

Solving Your Logistics Challenges. Peninsular Warehouse and Penser Transportation believe in the “Correct Approach” – developing the right solution to the unique logistics challenge you face. From our headquarters in Jacksonville, Fla., to our terminals in Miami and Orlando, we reach a service area enabling us to serve most of the Southeast and much of the Caribbean. Our full range of logistics services includes warehousing, inventory management, pool distribution, import/export, and more.

AIR/EXPEDITED

BAX Global • www.baxglobal.com

The integration of Schenker AG and BAX Global has created a new global logistics and transportation solutions powerhouse. Enviable rankings in strategic industry mobility and logistics service sectors include: No. 1 in European land transport, No. 2 in worldwide air freight, No. 3 in worldwide ocean freight, and No. 3 in integrated heavyweight freight in North America.

Lynden • www.lynden.com

Over land, on the water, in the air – or in any combination – Lynden has been helping customers solve transportation problems for almost a century. Operating in such challenging areas as Alaska, Western Canada, and Russia, as well as other areas around the globe, Lynden has built a reputation of superior service to diverse industries.

102 Inbound Logistics • June 2007 IN THIS SECTION: Auto ID • Chemical Logistics

AUTO ID

SATO America Inc. • www.satoamerica.com

SATO America Inc. is a pioneer in the Automatic Identiﬁ cation and Data Collection industry, and the inventor of the world’s ﬁ rst electronic thermal transfer bar-code printer. It revolutionized the bar-coding industry by introducing the Data Collection System and Labeling concept – a total bar-code and labeling solution providing high-quality bar-code printers, scanners/handheld terminals, label design software, and consumables.

CHEMICAL LOGISTICS

BDP International • www.bdpinternational.com

Some of the world’s most respected companies rely on BDP International to handle their demanding air, ocean, and ground shipments, and logistics challenges. Browse BDP’s web site to learn how it has helped companies reduce costs, improve efﬁ ciencies, and streamline processes using its global network of operations spanning 120 countries, including more than 20 ofﬁ ces in the United States. BDP’s broad spectrum of services and customer support make it a trusted company for a full range of integrated solutions.

BNSF Logistics • www.bnsﬂ ogistics.com

Find out more about BNSF’s four service specializations – modal solutions, transportation execution, supply chain services, and consulting – on its web site. The site includes an eTools link, which allows shippers to request a quote, view load status, or view load document images. Companies can also request additional information through the site’s contact page. BNSF offers an array of logistics services, from single shipments to complete network analysis and redesign.

Dupré Transport LLC • www.dupretransport.com

Dupré is a $100-million, asset-based 3PL based in the Gulf South. Our logistics solutions are designed for your specifi c needs. You save time and money, and experience world-class execution. We work to understand your business and measure how our system meets your expectations. With specifi c emphasis in the chemical, consumer products, and beverage industries, our unique solutions provide expertise in the following areas: dedicated fl eets, transportation management/brokerage, materials handling, and reverse logistics. Experience Dupré. We meet your needs.

June 2007 • Inbound Logistics 103 IN THIS SECTION: Chemical Logistics

Jevic Transportation • www.jevic.com

Jevic Transportation offers a wide range of services, and so does its web site. Shippers can access a variety of secure applications and services through Jevic’s online ToolBox, or quickly calculate transit times on its home page. With Jevic’s real-time tracing feature, site visitors simply enter the provided account code and receive detailed tracking information. Users can also access up to two years of shipment data through the freight cost report and other customized reports. A real-time rate engine, PreSys transaction notiﬁ cation, and the Jevic Desktop Tracer are among the site’s other features.

LeSaint Logistics • www.lesaint.com

LeSaint Logistics’ overall objective is to provide customers with the opportunity to focus on their core business by offering the full range of third- party logistics services: contract warehousing, public warehousing, hazardous materials management, common carriage, dedicated transportation, transportation management, information management, customer call centers, inventory management, and fulfi llment. We provide value-added fulfi llment services such as pick/pack and ship, repack, labeling, subassembly, kitting, and returns management, to name a few. We’re fl exible to our customers’ requirements, providing them with the option of selecting from our menu of services, and choosing the capabilities that meet their specifi c needs.

LOGISCO Transportation Services (LTS) • www.teamlogisco.com

LOGISCO has been providing logistics services to the chemical and food and beverage industries for 30 years. Three decades of service has helped the company develop the necessary skills to provide exceptional solutions and added value to a wide range of businesses. LOGISCO’s high level of knowledge, responsibility, performance, and security make it a leading service provider to the chemical industry.

Maersk Logistics • www.maersk.com

At Maersk Logistics, we combine our international transport and logistics experience, innovative information technology, worldwide reach and strong local operations to help you improve the effectiveness and efﬁ ciency of your supply chain. To cater to your unique needs, we offer decades of industry leading supply chain experience in the retail, wholesale, apparel, electronics, refrigerated goods, consumer healthcare, and furniture industries. Our worldwide infrastructure includes over 20.6 million sq. feet of strategi- cally located warehousing and consolidation space in Asia and Europe. Our acclaimed visibility solutions, offering end-to-end supply chain visibility, blended with our experience, bring you a truly effective product.

104 Inbound Logistics • June 2007 IN THIS SECTION: Chemical Logistics

Miller Transporters • www.millert.com

With a commitment to quality, and dedication to satisfying customer needs, Miller Transporters has moved to the forefront of the bulk transportation industry. Its customers in the chemical and process industries can use its web site to request a rate, place an order, and check shipment status – all with a click of the mouse.

Odyssey Logistics & Technology • www.odysseylogistics.com

Odyssey Logistics & Technology combines deeply skilled industry professionals with a leading technology solution to provide multimodal logistics management services to the chemical industry and other process manufacturers. Odyssey Logistics & Technology enables these companies to outsource any part of the management and transportation of their raw materials and ﬁ nished goods. They achieve savings through reduced transportation and infrastructure costs, measurable customer service and process improvements, and improved data quality and management.

Old Dominion • www.odﬂ .com

Old Dominion is a leading national less-than-truckload carrier providing direct service to 47 states, including 100-percent full-state coverage to 38 states. Old Dominion offers a variety of online capabilities, such as free rate estimates for domestic shipping, speed service, and international shipping. Site visitors can also track shipments and calculate transit times through the site’s easy-to-use interface.

Penske Logistics • www.penskelogistics.com

Whether you need an LLP partner to oversee all logistics operations or you just want to optimize your warehouse design, Penske Logistics offers a full spectrum of transportation, warehousing, inbound/outbound, supply chain management, and freight forwarding solutions. Its collaborative “best teams” approach enables Penske to be more than a logistics service provider. Penske provides practical success stories online through case studies.

June 2007 • Inbound Logistics 105 IN THIS SECTION: Expedited Ocean/Land — Recruiting

EXPEDITED OCEAN/LAND

APL • www.apl.com

APL’s containership fl eet is among the most modern and largest in the world. Together with its alliance partners, APL is able to provide worldwide coverage across all major trade lanes. And at a time when control can make the difference to how smoothly cargo fl ows through the supply chain, customers benefi t because APL operates its own marine terminals at eight strategic points around the world, including three on the U.S. West Coast. In addition, APL has priority access in major ports in Singapore and China. Details are available on the APL site.

FREIGHT MATCHING

Courierboard.com • www.courierboard.com

Courierboard.com is the company-to-company online exchange designed speciﬁ cally for the messenger and courier industry. Looking for a car, van, sprinter, or small truck (up to 24 foot)? Courierboard.com is the place to ﬁ nd a courier company, anywhere in the nation, to move your freight. Posting freight is always free on Courierboard.com. Register for our free Premium Account trial membership and enjoy all features, including unlimited freight postings, vehicle searches, and e-mail alerts when available vehicles are posted in your area. Find a courier company meeting your delivery requirements on www.courierboard.com.

RECRUITING

The Everest Group • www.mrglendora.com

For 15 years, The Everest Group, an afﬁ liate of Management Recruiters of Glendora, has operated as a full-service executive recruiting ﬁ rm working with both domestic and international clients. We recruit executives for all positions within the supply chain and place an emphasis on: transportation – all modes; 3PLs – asset and non-asset based; supply chain software solutions; pharmaceutical and medical device – regulatory affairs and quality assurance; retail; consumer products; and the food industry. Visit www.mrglendora.com, call (626) 963-4503, or e-mail Matt Albanese at [email protected].

Franzetta & Associates Inc. • www.franzetta.com

Franzetta & Associates, Inc. is an all-encompassing supply chain consulting ﬁ rm. One of the services we provide for our clients is specialty focused recruiting. Through the years, our impressive list of clients includes Fortune Top 10 as well as mid-market and small ﬁ rms. We know the business and understand your needs. We have access to many top-notch logisticians, and will be able to more than accommodate your requirements. We nurture close relationships with both our clients and recruits to ensure success for both. E-mail: [email protected] or call (814) 466-9010.

106 Inbound Logistics • June 2007 IN THIS SECTION: RFID — Warehousing

RFID

SATO America Inc. • www.satoamerica.com

SATO America Inc. is a pioneer in the Automatic Identiﬁ cation and Data Collection industry, and the inventor of the world’s ﬁ rst electronic thermal transfer bar-code printer. It revolutionized the bar-coding industry by introducing the Data Collection System and Labeling concept – a total bar-code and labeling solution providing high-quality bar-code printers, scanners/handheld terminals, label design software, and consumables.

TRANSPORTATION MANAGEMENT

Peninsular Warehouse • www.pentrans.com

Solving Your Logistics Challenges. Peninsular Warehouse and Penser Transportation believe in the “Correct Approach” – developing the right solution to the unique logistics challenge you face. From our headquarters in Jacksonville, Fla., to our terminals in Miami and Orlando, we reach a service area enabling us to serve most of the Southeast and much of the Caribbean. Our full range of logistics services includes warehousing, inventory management, pool distribution, import/export, and more.

TRUCKING – LTL

Peninsular Warehouse • www.pentrans.com

Solving Your Logistics Challenges. Peninsular Warehouse and Penser Transportation believe in the “Correct Approach” – developing the right solution to the unique logistics challenge you face. From our headquarters in Jacksonville, Fla., to our terminals in Miami and Orlando, we reach a service area enabling us to serve most of the Southeast and much of the Caribbean. Our full range of logistics services includes warehousing, inventory management, pool distribution, import/export, and more.

WAREHOUSING

Peninsular Warehouse • www.pentrans.com

Solving Your Logistics Challenges. Peninsular Warehouse and Penser Transportation believe in the “Correct Approach” – developing the right solution to the unique logistics challenge you face. From our headquarters in Jacksonville, Fla., to our terminals in Miami and Orlando, we reach a service area enabling us to serve most of the Southeast and much of the Caribbean. Our full range of logistics services includes warehousing, inventory management, pool distribution, import/export, and more.

June 2007 • Inbound Logistics 107 NEWSERVICES YOUR BUSINESS LOGISTICS RESOURCE

Network Global Logistics garment-on-hanger containers, and WHAT’S NEW: A merger between 20-foot standard and 40-foot high- Network Courier and Commodity cube refrigerated containers. Crowley’s Logistics. vessels now leave Gulfport on Tuesday, THE VALUE: Same-day shipping com- Friday, and Saturday. pany Network Courier has merged with u www.crowley.com ✆ 228-865-4340 3PL Commodity Logistics Inc. (CLI) to form a new organization, Network A. Duie Pyle Global Logistics. The merger combines WHAT’S NEW: A Rhode Island terminal. Network Courier’s core strengths in THE VALUE: Johnston, R.I., is home same-day/next-flight-out services with to A. Duie Pyle’s new 60-door distri- CLI’s integrated warehousing and logis- bution facility. The facility, which is tics services. Network Global Logistics expandable to 110 doors, is expected provides complete supply chain solu- to be completed by the fourth quarter tions – from shipping raw materials to of 2007. Construction on the terminal e-commerce fulfillment. began early this spring. u www.nglog.com ✆ 888-285-7447 u www.pyleco.com ✆ 610-696-5800

University of Michigan FedEx Corporation WHAT’S NEW: A master’s degree in WHAT’S NEW: An agreement designed supply chain management. to boost exports and simplify interna- THE VALUE: The Stephen M. Ross tional trade for U.S. businesses. School of Business at the University THE VALUE: FedEx and the Commerce of Michigan will offer a new Master of Department’s U.S. Commercial Service Supply Chain Management program have entered a five-year agreement beginning January 2008. Admission to boost U.S. exports, specifically deadline for the inaugural class is among small and medium-sized busi- Aug. 1, 2007. The one-year program nesses. The two organizations use free includes courses in supply chain man- resources such as market research, agement, logistics, strategic sourcing, trade leads, and export seminars to and IT. Electives in operations man- help businesses develop successful Serco Company agement are also available. export and supply chain management WHAT’S NEW: New dock leveler design. u www.bus.umich.edu/mscm strategies. The Commercial Service has THE VALUE: Serco’s SafeTFrame design ✆ 734-763-5796 trade specialists in more than 100 U.S. improves long-term structural integrity by cities and 80 countries, while FedEx adding more steel and structural strength Crowley Maritime Corporation provides access to more than 220 to the dock leveler’s rear frame, resulting WHAT’S NEW: A third sailing launched countries and territories worldwide. in fewer service calls. The structural design in the U.S. Gulf. u www.export.gov/cspartners/fedex_partner.asp also ensures an even transition from THE VALUE: Crowley now offers a third, ✆ 800-USA-TRADE the warehouse floor to the dock leveler. weekly, fixed-day sailing between SafeTFrame is standard on all Kelley and Gulfport, Miss., and the Central Kuehne + Nagel Serco brand dock leveler models up to America northern zone countries of WHAT’S NEW: An ofﬁ ce in Japan. 50,000 pounds capacity. Guatemala, Honduras, Nicaragua, and THE VALUE: Kuehne + Nagel has u www.sercocompany.com El Salvador. The new ship can accom- opened a new office in Yokohama, ✆ 800-933-4834 modate 45-foot trailers, 20- and 40-foot Japan. The facility offers ocean

108 Inbound Logistics • June 2007 To learn more, contact these companies directly. Remember to mention this issue date and page to get the right information.

freight import and export services, the food products industry through- leading events, and WERC’s extensive including in-house customs out North America, has opened library. clearance. Paradigm Transport Group Canada u www.werc.org ✆ 630-990-0001 u www.kuehne-nagel.com ✆ +81 (45) 662-7421 Ltd. The company’s offices are located in the Toronto business district. Liquid Transport Corp. Intermodal APL, CMA CGM, and Hapag-Lloyd u www.paradigmlog.com ✆ 866-941-7400 WHAT’S NEW: Intermodal operations WHAT’S NEW: Ocean container carri- expand in Charleston, S.C. ers coming from Sri Lanka now stop in Warehousing Education and THE VALUE: LTC Intermodal has Savannah, Ga. Research Council (WERC) expanded local drayage and linehaul THE VALUE: APL, CMA CGM, and WHAT’S NEW: A program designed to operations. It now offers in-house Hapag-Lloyd extended their Indian help companies develop high-poten- cleaning, and complete one-stop Subcontinent Service down the U.S. tial young employees in warehouse depot services, as well as 2.5- and 5- East Coast. The three carriers run seven and distribution management. year tank inspections, repair work, vessels – ranging in capacity from THE VALUE: The Warehousing and competitive loaded-storage rates. 3,800 to 4,500 TEUs – in the service. Education and Research Council has u www.liquidtransport.com ✆ 317-841-4200 u www.apl.com ✆ 800-999-7733 established a new program called Mentoring Membership, which allows Agility Paradigm Logistics companies and managers to accel- WHAT’S NEW: A San Diego ofﬁ ce to WHAT’S NEW: The launch of Paradigm erate learning and development of serve the United States and Mexico. Canada. young workers through exposure to THE VALUE: The new facility is located THE VALUE: Paradigm Logistics, a non- WERC expertise. Resources include a few miles from the U.S./Mexico bor- asset-based logistics provider serving new information on trends, industry- der and manages customer freight

ADT, Salpomec, UPM Rafl atac WHAT’S NEW: The opening of the fi rst Apparel RFID Solution Center. THE VALUE: Based in Lahti, Finland, this new facility is a joint venture that brings together all the elements of an RFID-enabled apparel supply chain — source tagging, automatic goods reception, an RFID-based sorting system, replenishment and store inventory management, and point-of-sale analytics and security — to demonstrate a complete end-to-end solution. The Apparel RFID Center opened to garment manufacturers, brand owners, retailers, logistics providers, and other visitors at the beginning of May. Visits can be arranged by contacting any of the three partners. u www.upmrafl atac.com ✆ +358 40 740 9588

June 2007 • Inbound Logistics 109 NEWSERVICES ‹‹ CONTINUED FROM PAGE 109

Jungheinrich Lift Truck Corp. WHAT’S NEW: An energy-efﬁ cient 3-wheel high-rack stacker. THE VALUE: Jungheinrich introduces a new version of its EKX 513-515 electric man-up turret truck, which allows for more hours of work output per battery charge. The new truck also includes an electrically adjustable operator’s console, which can be used to lift and lower loads depending on need. The company can configure the truck’s mast in two or three different stages for various lift heights, and provide the potential to handle a variety of pallets. u www.jungheinrich-us.com ✆ 804-737-7400

needs in the San Diego area and between the two countries. The new branch contains warehouse facilities and operational and sales staff, and handles air, ocean, and road freight forwarding and customs clearance. u www.agilitylogistics.com ✆ 619-661-6456

BNSF Railway States later this year. The 110,300- Nippon Yusen Kaiska (NYK Line) WHAT’S NEW: Enhancements to square-foot logistics center will WHAT’S NEW: A 200,000 deadweight the proposed Southern California support five Caterpillar dealers in the ton bulk carrier. International Gateway (SCIG). region. The center will stock more THE VALUE: NYK Line will put its new THE VALUE: BNSF Railway has made than 23,000 Caterpillar parts and pro- vessel, Ocean Prometheus, into service new improvements to the SCIG provide an integrated logistics solution under an 18-year contract with Korea gram. All BNSF trucks servicing SCIG including inbound, outbound, claims, East-West Power Company for the will now be 2007 models or newer and return services. transportation of coal from Australia upon facility opening. These trucks will u logistics.cat.com ✆ 630-743-4101 to Dangjin, South Korea. Prometheus is also be limited to traveling on speci- the largest coal carrier in the world to fied non-residential truck routes, which Dean Warehouse serve under a long-term contract. will be monitored and enforced by GPS. WHAT’S NEW: A division to provide u www.nykline.com ✆ 201-330-3000 BNSF will also plant an “urban forest” logistics solutions. at the site, and will fund construction THE VALUE: Dean Warehouse, one of A-B-C Packaging Machine Corporation of a sound wall to diminish freeway New England’s largest warehousing, WHAT’S NEW: A pick and place packer/ noise. logistics, and transportation unpacker for cans, cartons, glass, or u www.bnsf.com ✆ 800-795-2673 companies, has launched a new plastic containers. division, Dean SupplyChain THE VALUE: A-B-C’s Model 101 Pick & Caterpillar Logistics Services Management (DSM). The division Place Packer/Unpacker offers precision WHAT’S NEW: A parts distribution creates customized solutions for any control and improved product han- center to open in Moscow. logistics and transportation need, dling. The machine allows packagers THE VALUE: Cat Logistics will open coordinating and managing freight to thinwall containers and improve its first parts distribution center in both domestically and internationally. bottle stability for lightweight plas- the Commonwealth of Independent u www.deanwarehouse.com ✆ 401-334-4677 tic containers. The Unpacker offers

110 Inbound Logistics • June 2007 YOUR BUSINESS LOGISTICS RESOURCE To learn more, contact these companies directly. Remember to mention this issue date and page to get the right information.

secure handling for heavy, indus- color imaging Vantage Point System to inland points. While primarily trial-sized containers, as well as glass. speeds and simplifies pallet tag iden- dedicated to transloading services, Other features include broad speed tification when working with high the new facility also provides addi- capability, and a full-color touch- racking, thus increasing productivity tional capacity to Pacer’s previously screen panel that allows for revising and accuracy in warehouse opera- existing warehouse operations that production parameters, running self- tions. The Vantage Point System already occupy more than 800,000 diagnostic programs, or executing a provides a 52-degree view in all direc- square feet. These facilities support changeover. tions, and is an available option on transload, cross-dock, and customized u www.abcpackaging.com ✆ 727-937-5144 new or retrofitted Raymond 700 Series freight distribution services in the Los Reach-Fork and Deep-Reach trucks, as Angeles area. Raymond Corporation well as tall EASi Reach-Fork and Deep- u www.pacerdistribution.com WHAT’S NEW: A visual assistance sys- Reach trucks. ✆ 323-568-8055 tem for lift truck operators storing and u www.raymondcorp.com ✆ 800-235-7200 retrieving pallets at greater lift heights. Averitt Express THE VALUE: Raymond Corporation’s Pacer Distribution Services Inc. WHAT’S NEW: An expansion into West WHAT’S NEW: A Los Angeles transload Palm Beach, Fla. and distribution warehouse. THE VALUE: Averitt Express has THE VALUE: Pacer Distribution Services expanded its presence in the West Inc. has expanded capacity by open- Palm Beach area by opening a new ing a new 52-door transload center service center. The 7,000-square-foot in Carson, Calif. Located on 5.4 acres facility offers 26 bay doors dedicated adjacent to the ports of Los Angeles to Averitt’s operations, resulting in and Long Beach, the facility supports improved delivery times for shippers increased demand for transloading in the area. services for international freight ship- u www.averittexpress.com ments moving from the West Coast ✆ 1-800-AVERITT

Pelican Products WHAT’S NEW: A 17-hour, off-road LED work light. THE VALUE: Keep your fleet ready for any emergency with Pelican’s 9450 Remote Area Lighting System (RALS), a rapid-deploying, emergency-area light built to go off-road where vehicles can’t. The RALS features a multi-angle telescoping light tower that can reach up to eight feet. It assembles in minutes and allows for nine hours of peak light. u www.pelican.com ✆ 800-473-5422

June 2007 • Inbound Logistics 111 TECHUPDATE THE LATEST IN LOGISTICS TECHNOLOGY

partnerships and support, while OATSystems software covers the RFID process – from Savi Technology and Unipart Logistics tagging to data capture and analysis. WHAT’S NEW: A partnership in u www.tycoelectronics.com ✆ 800-522-6752 Europe. u www.oatsystems.com ✆ 781-907-6100 THE VALUE: The partnership will market Savi’s RFID-based sup- rfid/wireless ply chain solutions to European businesses. Under the agreement, PeopleNet Unipart is able to sell and imple- WHAT’S NEW: A handheld platform ment Savi’s products, services, and that integrates PeopleNet’s g3 system solutions to its commercial customers with ruggedized handhelds. in Europe. In turn, Unipart Logistics THE VALUE: PeopleNet’s new handheld will provide supply chain expertise platform creates a hybrid of onboard to enhance the value of Savi’s RFID and portable technologies, extend- solutions. ing capabilities from behind the wheel u www.savi.com ✆ 800-428-0554 to wherever a driver actually works – u www.unipartlogistics.co.uk ✆ 01788 514000 at customer facilities and around the truck. Using the handheld platform, Trans-Soft and CargoWise edi drivers can quickly fill out essential Zebra Technologies WHAT’S NEW: A strategic alliance. business and regulatory forms, docu- WHAT’S NEW: A mobile and wireless THE VALUE: The strategic alliance ment deliveries, and photograph and on-demand bar-code and label printer. combines the sales and development document damaged merchandise THE VALUE: The Zebra MZ series strategies of these two freight with the built-in digital camera. All provides on-demand mobile printing forwarding software companies. handheld data can be electronically housed within a compact, economical, The partnership delivers the next transmitted via PeopleNet’s g3 mobile easy-to-use unit. The lightweight mobile generation of software applications for communications system. printers fit comfortably in the palm global freight forwarding and logistics. u www.peoplenetonline.com ✆ 888-346-3486 of the hand, and offer a wide range of Trans-Soft is also expanding services connectivity options from IrDA and USB at its managed data center in Phoenix, Mikoh 2.0 connectivity to optional Bluetooth Ariz., which will become the preferred WHAT’S NEW: The Smart&Secure retail and 802.11b/g. The MZ series also features hosting hub for CargoWise edi users. RFID tag. Zebra’s advanced networking support u www.cargowise.com ✆ 847-364-5600 THE VALUE: Mikoh’s new tag balances and security protocols. u www.trans-soft.net ✆ 866-508-0800 the need for RFID in the retail envi- u www.zebra.com ronment with the need for customer ✆ 847-423-0442 Tyco Electronics and OATSystems privacy. Retailers can decrease the WHAT’S NEW: A partnership to provide read distance of the Smart&Secure tag RFID solutions. after an item is purchased, and reac- THE VALUE: The strategic alliance tivate the read distance if the product will help companies in a variety of is returned. This allows products to industries – including aerospace and be reintroduced into inventory and defense, and transportation – effi- tracked in the same way as an unsold ciently implement RFID solutions. item, while alleviating shopper fears Tyco Electronics provides RFID labels, of privacy invasion. readers, antennas, and integration u www.mikoh.com ✆ 571-258-0530

112 Inbound Logistics • June 2007 To learn more, contact these companies directly. Remember to mention this issue date and page to get the right information.

PINC Solutions facility using the search mechanism, Space Utilization Guide; pre-owned WHAT’S NEW: Yard Hound, an RFID- shippers have the ability to send a vehicle inventory listings; expert based real-time yard visibility request for information to the main resources; and specifications, photos, application suite. contact at each member location. and videos of Raymond lift trucks. THE VALUE: Combining advanced Listings include location, services, a u www.raymondcorp.com sensor and passive RFID technolo- company profile, and a link to the gies, Yard Hound offers yard managers provider’s web site. The tool also Ultra Logistics automatic yard checks, alerts, and allows users to access overhead views WHAT’S NEW: Online demo of Ultra’s documentation for all yard activi- of facilities, street names, and other Private Carrier Network solution. ties, as well as numerous reports used pertinent facility information. THE VALUE: Shippers interested in to increase operational efficiency. u www.logisticsservicelocator.com learning more about Private Carrier Optional components include: Yard Network, a web-based, private net- Hound Director, which communicates The Raymond Corporation work tendering tool, can now view an assignments to drivers; Reefer Monitor, WHAT’S NEW: A re-designed web site. online demo at Ultra’s web site. The which observes temperature and fuel THE VALUE: Equipped with educa- demonstration explains the software’s levels in refrigerated units; and PINC tional resources and ﬁ nancial and capabilities, and details how shippers Gate, which expedites check-in and planning tools, Raymond’s new site can notify carriers of exception loads check-out processes. helps materials handling professionals in real-time and award loads based on u www.pincsolutions.com ✆ 510-845-4900 make informed purchasing decisions. price; and how carriers can place bids Features on the site include: the Reach on loads they want. web Truck Performance Calculator and u www.ultralogistics.com/privatecarriernetwork Caterpillar Logistics Services WHAT’S NEW: The launch of a newly designed web site. THE VALUE: CatLogistics.com now MagicLogic’s offers improved navigation tools, valuable new business content, and Cube-IQ: upgraded maintenance capabilities. The redesigned site integrates Cat the Ultimate Logistics’ capabilities with potential industry solutions and client benefits in Load Planning in a clear, easily navigated format. u www.catlogistics.com software. International Warehouse Logistics Association (IWLA) WHAT’S NEW: A redesigned Logistics Services Locator (LSL). THE VALUE: IWLA has redesigned For information and to download a free trial version: its 3PL search tool, LSL. The locator www.magiclogic.com allows shippers to search IWLA mem- www.magiclogic.com MagicLogic Optimization Inc. ber warehouse logistics providers by Email: [email protected] ZIP or postal code, company, and key- +1-206-274-6248 (GMT-8, International) word. Upon finding an IWLA member 1-888-274-8616 (PST, North America)

June 2007 • Inbound Logistics 113 TECHUPDATE THE LATEST IN LOGISTICS TECHNOLOGY To learn more, contact these companies directly. Remember to ‹‹ CONTINUED FROM PAGE 113 mention this issue date and page to get the right information.

Onset Computer Corp. WHAT’S NEW: The Alarm and Readout Tool, for use with Onset’s temperature data loggers. THE VALUE: The new tool, a plug-in software module for use with HOBOware Pro software, automatically notifies users via cell phone, text message, or e-mail when temperature, humidity, and other conditions exceed user-defined limits. It also enables data from networked HOBO data loggers to be automatically offloaded and stored on a centralized computer. This is particularly useful in applications where numerous locations are being monitored throughout a facility. u www.onsetcomp.com/hobo ✆ 800-564-4377

and customer service follow-ups, and keeps detailed inspections notes. Nebraska Department TradeCard u www.syspro.com ✆ 800-369-8649 Of Economic Development WHAT’S NEW: Upgrades to the global WHAT’S NEW: The launch of a new trade platform and visibility suite. Accellos economic development web site. THE VALUE: The new enhancements WHAT’S NEW: The release of Accellos THE VALUE: The site provides easy add logistics tracking capabili- Enterprise 3PL Version 2.8. access to information about economic ties across TradeCard’s global trade THE VALUE: This new release encom- development programs and services in platform and visibility suite. This inte- passes enhancements including an Nebraska. New features include: scroll- gration provides trading partners an operational board that lets managers ing photographs, simplified categories in-depth view of their transactions, view labor requirements for a given and links, greater accessibility to and enables unique control of prod- facility or across multiple facilities; departmental programs and services, uct and money ﬂ ow. Other updates indirect time tracking; and voice- and readily updated information. include: enhanced adjustment capa- directed picking. It also features an u www.neded.org bilities, new options for early payment improved user interface and menu- programs, improved invoice naviga- optimizing system navigation. software tion, new inbound logistics tracking, u www.accellos.com ✆ 719-433-7000 and new shipment restructuring and National Private Truck Council (NPTC) ASN features. Catalyst International WHAT’S NEW: Member Match, a back- u www.tradecard.com ✆ 212-405-1800 WHAT’S NEW: CatalystCommand haul networking program for NPTC Labor Management, which shows member companies. SYSPRO real-time performance, progress, and THE VALUE: MemberMatch provides a WHAT’S NEW: Upgrade to SYSPRO Lot production information for mul- free information exchange that lets Traceability. tiple warehouses, yards, and other NPTC members fill empty capacity in THE VALUE: In addition to enabling applications. their own fleets with shipments from manufacturers to trace goods from THE VALUE: This release includes other fleet companies, or to utilize their source to current location while Catalyst’s new BestPath technology, other private fleets to haul their com- tracking expiration dates, SYSPRO which maps work paths in facilities, pany’s shipments. The program is for now offers one-to-one tracking and offers real-time graphical displays fleet managers seeking strategic, long- between component serials/lots and and alerts to reveal performance term partnerships with peer private parent-item serials/lots. The upgraded bottlenecks and capacity. fleet operations. solution also maintains a history of u www.catalystinternational.com u www.nptc.com ✆ 703-683-1300 traceable items for accountability ✆ 800-236-4600

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June 2007 • Inbound Logistics 115 RESOURCE 06.07 CENTER INBOUND LOGISTICS WORKS FOR YOU!

3PLs Air Cargo ■ 3PDelivery pgs. 18-19 ■ National Air Cargo pg. 111 Does the name 3PDelivery ring a bell? It should – Need to ship anything, anywhere, anytime? its employees ring bells every day as part of the National Air Cargo delivers. company’s 3 million last-mile deliveries each year. www.nationalaircargo.com 800-635-0022 www.3pdelivery.com 866-373-7874 Career Development/Education ■ Agility Cover 3 Agility’s affi liated companies are now under one ■ American Society of single, global identity. Let Agility help you meet all Transportation and Logistics (AST&L) pg. 97 the challenges of global trade. Invest in AST&L’s Certifi ed in Transportation and Logistics program because your career matters. www.agilitylogistics.com 714-513-3000 www.astl.org 703-524-5011 ■ Averitt pg. 9 Customized, end-to-end solutions are the future ■ California State University, Long Beach pg. 92 of logistics. Let Averitt take you there. For a Master‘s or professional designation in global logistics, turn to California State University. For a specifi c www.averittexpress.com 800-AVERITT response, contact www.uces.csulb.edu/citt 562-296-1170 these advertisers ■ Landstar Global Logistics pg. 15 directly. Please tell Landstar’s unique network of third-party trans- ■ Columbus State Community College pg. 95 them you saw their ad in portation and warehouse capacity owners delivers Columbus State Community College offers certifi - Inbound Logistics. cost-effective solutions for your business. cates in global trade, purchasing, and logistics. www.landstargloballogistics.com 904-390-1078 www.cscc.edu 800-621-6407 For general questions about ■ Lynden pg. 11 ■ East Carolina University pg. 97 particular industry Lynden International offers services and solutions Enhance your logistics career potential with a segments, use to help you master your part of the world. degree from East Carolina University. the card between www.lynden.com 888-596-3361 www.tecs.ecu.edu/tsys 252-328-9663 pages 12-13 and pages 108-109. ■ Meridian IQ pg. 5 ■ Elmhurst College pg. 93 Meridian IQ helps you fi nd opportunities in your Elmhurst’s Master of Science in Supply Chain global supply chain. Management offers real-world experience. For faster service, www.elmhurst.edu 800-581-4723 go online: www.meridianiq.com 877-232-1845 inboundlogistics.com/rfp ■ Ozburn-Hessey Logistics Cover 4 ■ Institute of Logistical Management pg. 94 You’ll know exactly where your shipments are The Institute of Logistical Management offers when you have OH Logistics as your global supply distance learning in supply chain management. chain management partner. www.logisticseducation.edu 609-747-1515 www.ohlogistics.com 800-401-6400 ■ Lion Technology pg. 92 ■ Schenker/BAX Global pg. 3 Lion’s unique online hazmat training brings your Schenker and BAX’s integration creates a global team up to speed on DOT regulations. logistics powerhouse highly ranked in worldwide www.lion.com/hazmat 888-546-6511 air, land, and ocean transportation. www.baxgoesschenker.com 800-CALL-BAX ■ Logistics Horizons pg. 92 With 40 years of successful personnel recruiting, let Logistics Horizons be part of your team. www.logisticshorizons.com 201-507-8880

116 Inbound Logistics • June 2007 Use our Resource Center and let the information you need ﬁ nd you.

■ Maine Maritime Academy pg. 97 Chemical Logistics Maine Maritime Academy offers certifi cate and graduate diploma programs in logistics. ■ American Commercial Lines (ACL) pg. 53 http://ibl.mainemaritime.edu 800-227-8465 ACL’s barge and towboat fl eets offer chemical shippers maximum fl exibility to meet schedule and delivery requirements. ■ Snelling Transportation Group pg. 95 Snelling places superior talent in the logistics, www.aclines.com 866-288-6225 transportation, and distribution segments. www.snellingtrans.com 479-271-0505 ■ BDP International pg. 47 No matter what you ship, BDP increases your bottom line. BDP’s proven knowledge of specialty ■ Sullivan University pg. 94 chemicals shipping works to your advantage. Sullivan University’s e-learning program is the perfect solution for your career goals. www.bdpinternational.com 888-999-BDP9 www.sullivan.edu 866-755-7887 ■ BNSF Logistics pg. 55 With expansive knowledge and integrated technol- ■ Syracuse University, ogy systems, BNSF Logistics puts your logistics Whitman School of Management pg. 96 pieces in place so you can focus on business. For a specifi c Whitman is supply chain — it has the oldest supply response, contact chain management program in the nation. www.bnsfl ogistics.com 877-853-4756 these advertisers whitman.syr.edu/scm 315-443-3751 ■ Canadian National pgs. 42-43 directly. Please tell Canadian National salutes its Responsible Care them you saw their ad in ■ Transportation Intermediaries Association pg. 96 partners with the 2006 CN Safe Handling Awards. Inbound Logistics. TIA’s certifi ed transportation broker program helps you to be a leader. Sign up today. www.cn.ca 888-MOVIN-CN www.tianet.org 703-299-5700 For general ■ Dupré Transport pg. 59 questions about Dupré Transport designs logistics solutions for ■ U.S. Merchant Marine Academy pg. 94 particular industry your specifi c needs, so you save time and money. The U.S. Merchant Marine Academy offers training segments, use and education for the transportation industry. www.dupretransport.com 800-356-3659 the card between pages 12-13 and www.usmma.edu 516-773-5120 ■ Jevic pg. 38 pages 108-109. With 25 years of chemical transport experience, ■ University of Alaska, Anchorage pg. 96 Jevic is the best — and safest — carrier choice. Study logistics at the air crossroads of the world. For faster service, UAA offers undergrad, grad, and online programs. www.jevic.com 888-GO-JEVIC go online: http://logistics.alaska.edu 907-786-4171 inboundlogistics.com/rfp ■ LeSaint Logistics pg. 57 Looking for a logistics provider that knows the ■ University of Denver, Intermodal chemical industry? Turn to LeSaint Logistics. Transportation Institute (ITI) pg. 95 Transport your career to a higher level with ITI’s www.lesaint.com 847-783-4940 Executive Master’s program. www.du.edu/transportation 215-247-2162 ■ LTS Logistics pg. 51 LTS Logistics’ forward-thinking approach to logistics management yields innovative solutions ■ University of Wisconsin — Madison pg. 97 for chemical companies. The University of Wisconsin — Madison offers transportation planning and quality modeling www.ltslogistics.com 866-720-5871 programs. www.uwexeced.com/transportation 800-292-8964 ■ Maersk Logistics pg. 41 Maersk Logistics helps the country’s leading chemical companies create new opportunities in global commerce. www.maersklogistics.com 973-514-5187

June 2007 • Inbound Logistics 117 RESOURCE 06.07 CENTER INBOUND LOGISTICS WORKS FOR YOU!

■ Miller Transporters pg. 52 Latin America Logistics Miller Transporters celebrates 65 years of award- winning service to the chemical industry. ■ Almazo Line pg. 75 www.millert.com 800-MILLERT Almazo Line offers full-service customs brokerage and border logistics services. ■ Odyssey Logistics & Technology pg. 60 www.almazoline.com 899-922-06-63 Chemical and process companies turn to Odyssey Logistics & Technology for their multimodal global ■ Delta Cargo pg. 67 transportation needs. With continued international expansion, Delta www.odysseylogistics.com 203-448-3900 Cargo makes it easier than ever to send cargo all over the globe. ■ Old Dominion pg. 49 www.deltacargo.com 800-352-2746 Old Dominion’s full range of services offers logistics solutions that chemical companies count on. ■ InfoAmericas pg. 77 www.odfl .com 336-889-5000 InfoAmericas is Latin America’s transportation and logistics business intelligence leader. ■ Penske Logistics pg. 45 www.infoamericas.com 305-569-9133 For a specifi c Penske approaches logistics management with response, contact dedication and determination, helping chemical ■ Intramerica pg. 73 these advertisers shippers achieve profi table growth. Intramerica provides strategic locations and directly. Please tell excellent working environments in Mexico. them you saw their ad in www.penskelogistics.com 800-221-3040 Inbound Logistics. www.intramerica.com.mx 52 (818) 153-6430 Environmental Partnerships ■ Menlo Worldwide pg. 65 For general ■ SmartWay Transport pg. 12 Menlo Worldwide’s customer-specifi c solutions questions about The EPA’s SmartWay Transport program helps help global shippers cut waste and cost from the particular industry shippers reduce emissions, while giving the supply chain. segments, use average truck a fuel savings of $2,000 per year. www.menloworldwide.com 650-378-5200 the card between www.epa.gov/smartway 734-214-4767 pages 12-13 and ■ Prudential Financial pg. 71 pages 108-109. Events Looking for a real estate team you can trust in the Mexican market? Look to Prudential Financial. ■ Carbon Footprint Summit pgs. 79-84 www.prei.com (52) 55 5093 2780 For faster service, Learn about the business case for carbon reduc- go online: tion at the fi rst-ever Carbon Footprint Consumer inboundlogistics.com/rfp Products Summit, Sept. 13-14, 2007, in Chicago. Logistics IT carbonfootprint-consumerproducts.com 800-721-3915 ■ Datatrac pg. 101 Datatrac offers real-time shipment tracking, ■ LogiChem 2007 pg. 62 wireless mobility, and compliance analysis. Attend LogiChem, Sept. 24-27, 2007, at the Hyatt www.datatrac.com 800-827-2677 Gainey Ranch Resort, Scottsdale, Ariz. www.logichem2007.com 888-482-6012 ■ MagicLogic Optimization pg. 113 Magic’s Cube-IQ Load Planning software helps you Expedited Air/Ground optimize your inbound and outbound shipments. www.magiclogic.com 888-274-8616 ■ Pilot Air Freight pg. 25 When you need to track down the fastest route to anywhere, Pilot Air Freight’s online shipping navi- ■ Sterling Commerce pg. 20 gator helps you get the job done in no time. Eliminate the barriers to bottom-line success with Sterling Commerce’s technology solutions. www.pilotair.com 800-HI-PILOT www.sterlingcommerce.com 800-299-4031

118 Inbound Logistics • June 2007 Use our Resource Center and let the information you need ﬁ nd you.

Ocean Site Selection ■ APL Logistics & Con-way Freight pg. 16 ■ Virginia Economic Development OceanGuaranteed, APL & Con-way’s port-to-door Partnership pgs. 22-23 TransPaciﬁ c service, has been expanded to Japan, More than 240 major companies have set up DCs Singapore, South Korea, and Taiwan. in Virginia. Shouldn’t you, too? www.apllogistics.com 866-896-2005 www.yesvirginia.org 804-545-5700

Ports Trucking ■ Port of Baltimore pg. 27 ■ Yellow Cover 2 Why does so much cargo come through the Port of You will out-think, outperform, and outshine the Baltimore? Because the Port provides world-class competition when Yellow takes care of your trans- services. portation needs. www.marylandports.com/il7 800-638-7519 www.myyellow.com 800-610-6500

INDEX For a speciﬁ c ADVERTISER PAGE ADVERTISER PAGE ADVERTISER PAGE response, contact 3PDelivery 18-19 Institute of Logistical Penske Logistics 45 these advertisers Management 94 directly. Please tell Agility Cover 3 Pilot Air Freight 25 them you saw their ad in Almazo Line 75 Intramerica 73 Port of Baltimore 27 Inbound Logistics. American Commercial Lines 53 Jevic 38 Prudential Financial 71 Landstar Global Logistics 15 American Society of Transportation Schenker/BAX Global 3 For general and Logistics (AST&L) 97 LeSaint Logistics 57 SmartWay Transport 12 questions about particular industry APL Logistics & Con-way Freight 16 Lion Technology 92 Snelling Transportation Group 95 segments, use Averitt 9 LogiChem 2007 62 Sterling Commerce 20 the card between BDP International 47 Logistics Horizons 92 Sullivan University 94 pages 12-13 and pages 108-109. BNSF Logistics 55 LTS Logistics 51 Syracuse University, Whitman California State University, Lynden 11 School of Management 96 Long Beach 92 Maersk Logistics 41 Transportation Intermediaries For faster service, Canadian National 42-43 MagicLogic Optimization 113 Association (TIA) 96 go online: inboundlogistics.com/rfp Carbon Footprint Summit 79-84 Maine Maritime Academy 97 U.S. Merchant Marine Academy 94 Columbus State Menlo Worldwide 65 University of Alaska, Anchorage 96 Community College 95 Meridian IQ 5 University of Denver, Intermodal Datatrac 101 Transportation Institute (ITI) 95 Miller Transporters 52 Delta Cargo 67 University of Wisconsin — National Air Cargo 111 Dupré Transport 59 Madison 97 Odyssey Logistics & East Carolina University 97 Virginia Economic Technology 60 Development Partnership 22-23 Elmhurst College 93 Old Dominion 49 Yellow Cover 2 InfoAmericas 77 Ozburn-Hessey Logistics Cover 4

Inbound Logistics (ISSN 0888-8493, USPS 703990) is published monthly for approximately 60,000 business professionals who buy, specify, or recommend logistics technology, transportation, and related services, by Thomas Publishing Company LLC, 5 Penn Plaza, NY, NY 10001. José E. Andrade, chairman; Carl T. Holst-Knudsen, president. Periodicals postage paid at New York, NY, and additional mailing ofﬁ ces. All rights reserved. The publisher accepts no responsibility for the validity of claims of any products or services described. No part of this publication may be reproduced or transmitted in any form or by any electronic means, or stored in any information retrieval system, without permission from the publisher. POSTMASTER SEND ADDRESS CHANGES TO: Inbound Logistics, 5 Penn Plaza, New York, NY 10001

June 2007 • Inbound Logistics 119 THE SUPPLY CHAIN IN BRIEF THELAST MILE To take full advantage of your 3PL’s import/export capabilities, inform them of your organization’s long-term goals. Choose a 3PL that Craft a compliance policy based on maintains long-standing relation- your company’s size, product type, ships in multiple markets, which transaction volume, and country breadth. could include your next target. Small export companies that deal in non-con- Also, be sure your 3PL has the exper- trolled products may only need to implement an tise to manage ﬂ uctuating import/export online restricted-party screening tool; while large volumes and changing distribution organizations might need to design and deploy a requirements. global solution to help manage and automate import/export transactions. Compliance policies also help shippers gain visibility into their import/ export transactions details, which brings addi- Companies don’t tional beneﬁ ts. necessarily need to invest in complex or expensive import/export technology; with on- Many shippers leave millions of dollars in demand software Import/Export duty savings unclaimed because they fail to delivery, shippers gain Expertise understand and leverage free trade agreements. access to vast data Before you move your Shippers need to determine trade program management power via next international eligibility, review new trade programs for the web. Pay as you go, shipment, check out these applicability, manage complex documenta- only for the capabilities suggestions from the tion requirements, and use auditable you use. import/export experts. processes and technology to quickly identify and capture duty savings.

— Ty Bordner, vice president, — Carey Treadwell, solutions consulting, director of global business, Mallory Management Dynamics Alexander International Logistics

— Greg Johnsen, GT Nexus — Bernie Hart, global product executive, co-founder, JPMorgan Chase Vastera

CONVENTIONAL WISDOM– MORE ADVICE FROM THE PROS: Select global forwarders/carriers wisely. Determine your overall requirements by analyzing imports, exports, distribution, and brokerage needs. Identify your shipment requirements – such as destination shipment schedule, transportation methods, and special requirements or restrictions – up front. Consider total cost, not just transportation cost by lane. Fill out import/export documents completely and accurately. Integrating technology systems with trading partners can help ﬂ ow data through the import/ export and documentation process and eliminate manual rekeying errors. Standardize business processes around the world. Investigate automated solutions that get all parties in a global supply chain to follow consistent, compliant procedures and processes. Get familiar with U.S. Customs and Border Protection (CBP) policies and procedures before you import or export your goods. You should also be aware of any entry requirements, including those of other federal agencies, speciﬁ c to the particular commodity you are importing/exporting.

120 Inbound Logistics • June 2007 A NEW LOGISTICS LEADER MEETING THE CHALLENGES OF GLOBAL TRADE.

Our name is new, but our reputation is proven.

agilitylogistics.com I need to know the location of my shipments.

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You’ll know exactly where your shipments are whether they’re on the water, in the air, in a warehouse, on a truck or on a train when you have OH Logistics as your global supply chain management partner. www.ohlogistics.com/countonus.html or 800-401-6400