I could not agree with you more! I just hope the powers that be are listening to all the logistics providers, large and small, and to industry experts such as DC VELOCITY. Your view mirrors what the rest of us are thinking—we average people who are also feeling the pinch and want something real to be done toward gaining energy independence. MJ McDonald, Indianapolis, Ind.
Opening Alaska, the Pacific Coast, or the Atlantic Coast to more oil exploration is not the solution. Even if projects started today, it would be five to 10 years before any new domestic oil hit the market. Increasing production will only prolong the agony and suffering of the patient (trucking and logistics companies).
What about ridding the industry of load brokers? That way, the actual cost of moving freight would go to the trucking companies and then, hopefully, to the drivers. How about reducing supply chains from 15,000 miles to more domestic networks? What about moving manufacturing plants back to North America and away from Asia? There are huge fuel savings to be had there.
Our reliance on oil, make that "cheap" oil, has led us to this predicament. How about buying locally instead of getting fruit from California shipped to New York? How about banning all plastic bags? How about mandatory recycling programs? There are an infinite number of ways to cut back on the amount of oil we use. We must stop being oil pigs and reduce our consumption. Will that cause some to suffer? Absolutely, but think of all the innovation that will be produced because of this. Job losses today will be replaced by jobs of tomorrow that haven't even been thought of yet. Kevin Lee, Roaring Express
In his column "the patient is not well," Mitch Mac Donald states that "there's no short-term solution at hand" and "we must wean ourselves off those [expensive fossil] fuels." He goes on to support only one "solution" that helps nobody but oil companies: "remove roadblocks to domestic oil exploration and drilling." This populist and political solution to produce more fossil fuel at home is, by all serious accounts, not a short- or long-term solution (our relatively small incremental U.S. supplies can't significantly affect world oil prices). And this does not wean us off oil.
It would be better to remove import restrictions on alternative fuel imports (like Brazilian ethanol) and subsidize efficiency improvements now as we restructure distribution networks to accommodate permanently higher transport/fuel costs. Rather than political fixes, a more realistic view of our options and potential solutions to high fuel/transport costs would better serve your readers. Bret Andersen, Palo Alto, Calif.
real "Rainmakers" at last
First, I think DC VELOCITY is the premier magazine covering our industry. Layout, stories, graphics ... the complete product is high quality all the way.
Having said that, when I received the July issue today, I was primed to drop you a nasty note. Over the last two years, I have felt that the "Rainmakers" issue was dominated by academics and software providers. While important to our industry, they are not "Rainmakers" by definition (or at least by my definition). This does not mean that my definition is correct, but with over 30 years in this industry, at least it is a firm definition in my mind.
I was pleasantly surprised to find that the 2008 version actually has operations people highlighted—real people actually providing a quantifiable service. So, instead of expressing indignation, I'd like to say, keep up the good work! Michael Sims, Jacobson Companies
a silent majority?
Re: "a step backward?" FastLane (July 2008)
Cliff Lynch's treatise on rail regulation and deregulation was a fine and historically accurate version of this chapter in American history. As a co-author—with David DeBoer—of An American Transportation Story, I can verify what Mr. Lynch has stated.
It is only certain shippers, however, that are calling for measures that would re-regulate the railroads despite their protestations that they want nothing of the sort. These are the shippers of bulk commodities that saw during the debate on the Staggers Rail Act that they would pay a larger portion of system fixed costs than they did under the Interstate Commerce Commission's public utility-type regulation. They opposed passage of Staggers and have been seeking to negate it ever since.
Meanwhile, shippers that are receiving much improved service at market rates are relatively silent because there is nothing for them to say—yet. When and if re-regulation legislation makes any headway in Congress, I would expect many shippers to speak out. They have been the beneficiaries of deregulation every bit as much as the railroads have been. Larry Kaufman, Golden, Colo.
Editor's note: The writer was vice president of public affairs for the Association of American Railroads when the Staggers Act was debated and passed.
create your own network
Re: "let's make a deal" (July 2008)
I really enjoyed Mark Solomon's article about social networking. Being from a marketing—as opposed to a material handling—background, I might be more familiar than some of your readers when it comes to social media. There is a great deal of power in social networking, but it is not always easy to harness and can be confusing to the first-time user. The article was a good introduction to those who see social networking as "private networking."
Besides the social networking sites mentioned in the
article, another that I have recently become interested in is "Ning." Ning allows you to create your own social networking site, be it for your customers or sales team or any group. It makes it easy to create a "closed circle" network.
Thanks for the article and for the magazine. Travis A. Baker, SSI Schaefer Systems International Inc.
a vote for nuclear and wind power
Re: "a far less dismal alternative," SpecialHandling (July 2008)
In his column, George Weimer stated that we (our country as a whole) haven't built a new nuclear power plant in a generation and a half, have done nothing to promote coal, and haven't allowed ourselves to drill for new oil or build new refineries for decades.
I consider myself an environmentalist, but I am also a realist. As energy costs continue to rise with virtually no prospect of retreating, I think we need to invest more in nuclear power. Stop allowing the injunctions that stop or delay construction, adding millions to the cost of a plant. If nuclear plants are designed properly, located on stable ground, and allowed to be built without interruption, I'm positive it would be a great benefit to this country. The only downside, of course, is the waste. I do not have a good answer for that.
I'm not that convinced that coal is the way to go. With burning coal, you get mercury and sulfur—two things I would rather not have added to the planet's surface in mass quantities. They're best left underground undisturbed.
On his point about oil, it is not "we" who control the money for drilling or building new refineries; it's the oil companies. By not doing these things, they achieve exactly what they wanted: super high oil prices so they can make unheard-of record profits. The oil companies have more than enough money to drill more wells on existing leased land or build at least one new refinery in this country. But they would rather pay the stock holders huge dividends and watch the rest of us suffer.
I think wind power should be the new "Apollo" program. Yes, it would require a huge up-front investment, but I believe the payoff would be worth it. Mark C. Miller, Brook Park, Ohio
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."