The recent outcry over the Dubai Ports World proposal made clear that most have yet to grasp what DC VELOCITY 's readers and other logisticians already know: We don't have control of our own supply chain and haven't for some time.
As much as we cherish the notion of a United States that opens its arms to immigrants ("give us your tired, your poor ..."), many Americans remain wary of foreigners, particularly those of Middle Eastern origin. For evidence, you need look no further than the political and media firestorm that erupted over Dubai Ports World's recent purchase of P&O Steam Navigation of London—which operates ports in New York/New Jersey, Philadelphia, Baltimore and New Orleans.
On the day this column was written, Dubai Ports World (DPW) announced it would sell the P&O U.S. operations to American interests to keep the deal from collapsing under congressional opposition. If nothing else, the furor demonstrates how little many of our politicians and media people know about the U.S. supply chain. It couldn't have been more clear that most have yet to grasp what DC VELOCITY's readers and other logisticians already know: We don't have control of our own supply chain and haven't for some time.
To be sure, we must do all we can to protect our ports. Other than railroads, the ports are probably the most vulnerable node in the global logistics network. Containers from around the world flow daily into our ports, where only about 5 percent of them are inspected. If I had concerns about security and Dubai Ports World (and I really don't), it would be more about containers originating at DPW-operated ports like Manila, Hong Kong, Sydney, or Shanghai than those containers received at Philadelphia or New Orleans.
In December, I wrote about the increasing foreign ownership of companies that provide warehousing service in the United States—who would have thought Schenker would be running a distribution center in West Branch, Iowa?—but warehousing is hardly an isolated case. The truth is, other than FedEx, UPS, and one or two smaller firms, no U.S. owned company has emerged as a major global service provider, particularly when it comes to port operations. (CSX, which did have some foreign port operations, sold them to Dubai Ports World in 2004.)
We have embraced the global economy. Millions of Americans flock to Wal-Mart every day to load up on Chinese-made goods. We're falling all over one another in the race to establish manufacturing and logistics relationships in China, a country with a dubious human rights record and a government that hasn't proved overly friendly when one of our ships or planes strays into its territory.
Whether we realize it or not, we have also embraced the global supply chain. In my hometown of Memphis, it's not uncommon to see a foreign container being hauled from the intermodal hub by a Chinese-owned drayage company to a distribution center owned by Kuehne & Nagel or Exel. No American company ever touches the product until it comes time to load it onto a truck for distribution.
Having said that, it's also important to note that most of the people who would have worked at U.S. ports in the employ of DPW are Americans—the folks next door. Even the COO of Dubai Ports is a guy from New Jersey.
We can't have it both ways. If the United States wants to participate in the global supply chain, we must learn to play well with others. We must accept that the emirate of Dubai will also participate, as will other foreign countries. We must acknowledge that we may be required to stray from our comfort zone now and then. If we were to limit our dealings to our closest allies, it would be a pretty truncated supply chain. And to be fair, most of our problems have less to do with our trading partners than with our own inability to secure our borders.
By the way, Dubai owns several nursing homes in the United States. I hope our grandmothers are OK.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.