Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
Listen to supporters of plans to move long-haul freight off the highways and onto coastal, inland, and intracoastal waterways, and you come away thinking that the nation's marine network is a severely underutilized asset.
According to proponents, the 25,000 miles of navigable U.S. waterways handle just 1.4 billion tons of freight each year, equal to 2 percent of the nation's domestic shipments. Because one barge tow can accommodate 456 containers that might otherwise move by truck, shifting even a modest amount of cargo to water would be both cost-effective and environmentally friendly, backers say.
But listen to skeptics and they'll tell you that for all their environmental and infrastructure-related benefits, "marine highways" will always be a slower and less-efficient means of freight transportation than over-the-road trucks or intermodal services, especially on short to intermediate hauls. They maintain that coastal transport's snail's-pace transit times are a poor fit for many industries, that the additional cargo handling needed will actually drive up costs, and that the Jones Act, an 89-year-old law requiring that vessels used in domestic trades be U.S.-built, -registered, and -crewed, will make marine highway services uncompetitive.
The debate over the merits of marine highways—commonly known as "short-sea shipping"—may intensify as the clock ticks closer to a Sept. 30 deadline for reauthorizing funding for the nation's highway system. Rep. James L. Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee, has called for an integrated and holistic national transportation policy to accompany the funding. However, the reauthorization bill sponsored by Oberstar contains no language addressing the nation's coastal shipping network.
That doesn't mean the situation is, or has been, static. A December 2007 law directed the secretary of transportation to establish a program aimed at expanding the use of coastal highways to mitigate road congestion. The law also requires the creation of a "Marine Highway Advisory Board," which is just now taking shape.
The $787 billion economic stimulus plan signed into law in February gives the DOT secretary $1.5 billion in discretionary funding to make capital investments in the nation's road infrastructure. Marine highways would be eligible for funding; at this writing, the funds had not been disbursed.
The Senate Commerce Committee in early July reported out a $397 million reauthorization of maritime programs that includes language mandating new grants to promote a marine highway system. The bill, sponsored by Sen. Frank R. Lautenberg (D-N.J.), only requires a mechanism for funding. It does not allocate money to the effort.
Meanwhile, Transportation Secretary Ray LaHood has been talking up the concept. Speaking in late July before the Marine Transportation System National Advisory Council, LaHood said the country "must find ways to take better advantage of our existing waterways" to reduce its dependence on foreign oil, reduce congestion and emissions, and create an alternative to the cost of building and maintaining highway systems.
The Maritime Administration, an agency within the Department of Transportation, has teamed up with carriers, maritime labor, and academia to launch a marine highways cooperative to promote the greater use of coastal shipping. Noel P. Comeaux, an analyst in MarAd's Office of Marine Highways and Passenger Services, says the cooperative is signing up on average one new member per year. "We're still in the education process," he says.
Getting shippers on board
The marine highway concept is not new. There are an estimated 25 short-sea shipping services across the United States. These services cover traffic-congested regions like the Northeast and areas like the Pacific Northwest-Alaska trades, where highway transport may not be viable.
If marine highways are to be fully embraced, however, backers must get users of transportation services to buy into the plan. So far, that has been a struggle. "We need shippers, and we need 3PLs (third-party logistics companies)," admitted Mark Yonge, acting chair of the Marine Highways Cooperative, at a recent conference in Atlanta.
Yonge says shippers and 3PLs have yet to be convinced that a marine highway system will help them meet their customers' demanding and precise delivery targets. Peter J. Gatti, executive vice president of the industrial shipper group National Industrial Transportation League, adds that the biggest challenge in making marine highways work is the cost and time involved in transloading cargo between barges and truck or rail.
Gatti says the service will rise or fall not on its ability to ease road congestion or pollution but on its economic value. "It really comes down to the economics of the movement and the needs of the shippers," he says.
Peter V. Stone, principal in the consultancy IHS Global Insight, says marine highway services can succeed only on longer lengths of haul and if there are sufficient containers aboard each barge tow to make it cost effective. Stone estimates that at least 175 containers need to be tendered daily per barge in each direction in order for the service to be viable.
"The bottom line is how you divert traffic to a system like this," Stone says. "Not every commodity can take a chance on slower transit times, but some can."
Kevin R. Mack, vice president of Columbia Corp., a Liberty Corners, N.J.-based company that operates short-sea services in the Northeast and mid-Atlantic, says trucking rates on many corridors are so low that it would make little economic sense to consider even an inexpensive shipping alternative like barge transport. Mack urged Congress to offer tax credits to encourage shippers to divert cargo to water.
Mack adds that Columbia has in recent months held preliminary discussions with truckload giants J.B. Hunt Transport Services Inc. and Schneider National Inc. about shifting containerized shipments to waterborne transport. Mack says the companies expressed some interest, but that is as far as the talks have progressed.
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.