Northern Distribution Network to shore up Afghan supply chain
Escalating threats to Afghan supply routes spurred U.S. military officials to begin searching for alternatives back in 2008. It took some doing—and some help—but they found another way.
Steve Geary is adjunct faculty at the University of Tennessee's Haaslam College of Business and is a lecturer at The Gordon Institute at Tufts University. He is the President of the Supply Chain Visions family of companies, consultancies that work across the government sector. Steve is a contributing editor at DC Velocity, and editor-at-large for CSCMP's Supply Chain Quarterly.
The U.S. military may be winding down its operations in Iraq, but it's a whole different story in Afghanistan. Shortly after taking office in 2009, President Obama ordered the deployment of an additional 21,000 troops to Afghanistan. That number swelled to more than 30,000 over the following months, and in December, the president ordered another 30,000 troop bump by the summer of 2010. That will push the total to an estimated 98,000 U.S. troops, almost triple the number stationed in that country when President Bush left office.
The troop increase in Afghanistan might look manageable compared with the peak deployment in Iraq, which has been estimated at 170,000. But there's a lot more to the story than the numbers. In fact, looked at from a purely logistics perspective, military officials say, Afghanistan in many ways represents a worst-case scenario.
To begin with, there's the sheer volume of material that has to be brought in to support Afghan operations. Because Afghanistan offers little in the way of basic infrastructure, the military has to build things like housing. That means that in addition to moving people and their equipment into the country, it also has to bring in construction materials, food, medicine, and munitions, along with support contractors and everything else needed to survive in one of the most difficult environments on earth.
Then there's the challenge of finding a way to bring all that stuff into the country. Afghanistan has only 16 airports with paved runways, and only four are capable of handling international cargo traffic. There are no seaports—it is a landlocked nation. And there are no railroads in.
Under the circumstances, it's little surprise that military logisticians consider providing support to troops in Afghanistan to be the ultimate test. "If you [were asked] where's the last place you'd like to be fighting a war, other than Antarctica, you might well pick Afghanistan [for its] landlocked, very austere environment," said Dr. Ash Carter, under secretary of defense for acquisition, technology, and logistics, at a recent conference on defense logistics modernization in Washington, D.C.
No entrance
In the absence of solid alternatives, the U.S. military has been forced to rely mainly on roads to bring supplies into Afghanistan. But the situation there isn't much better. Because the United States is barred from moving goods through Iran, points of entry into Afghanistan by ground are limited to a handful of mountain passes.
Until very recently, the only ground route judged usable by the United States and NATO was one that went in by way of Pakistan. After the fall of the Taliban government in 2002, the United States began sending truckloads of supplies picked up at Pakistan's Port of Karachi into Afghanistan through the Khyber Pass. At the time, the Khyber Pass was considered to be much safer than the alternative, a crossing in the Hindu Kush mountains at a town called Spin Boldak.
But the military has since been forced to revise its assessment of security on the Khyber Pass route (as military leaders often quip, "The enemy gets a vote."). In December 2008, 12 percent of the Afghanistan-bound freight crossing Pakistan's Northwest Frontier Province en route to the Khyber Pass disappeared, most of it in flames, according to Vice Adm. Mark Harnitchek, deputy commander of the U.S. Transportation Command.
The attacks on the freight convoys led logisticians to reroute shipments destined for the southern part of Afghanistan to the crossing at Spin Boldak. But Spin Boldak hasn't proved much better where security is concerned. On Aug. 30, 2009, a NATO convoy was attacked, and 20 fuel tankers and other supply trucks were destroyed.
The search for Plan B
Given the risks presented by the Pakistan ground routes, it's probably no surprise that the U.S. Central Command (CENTCOM) has been actively seeking other options. In 2008—well before the surge—Gen. Duncan McNabb, the commander of the U.S. Transportation Command, handed down orders directing the Surface Deployment and Distribution Command (SDDC) to start working with CENTCOM to find alternatives.
To understand what happened next, you have to know something about how military logistics has changed since the end of the Cold War. What many people don't realize is that the military is no longer in the business of moving freight. When it has cargo to move, it does exactly what a lot of its private-sector counterparts do—it hires a common carrier. "We have a worldwide presence without owning a truck, or a train, or a ship," says Maj. Gen. Jim Hodge, the commander of SDDC. "We do it all through our commercial partners."
So when it came time to get the project rolling, the military's first move was to get in touch with some of those commercial partners. "We decided to call in the guys who do this for a living and leverage them the best we could," says Col. Stan Wolosz, the SDDC's chief of staff. Military personnel quickly began contacting some of their primary carrier partners—including Maersk Line Ltd., APL, and Hapag-Lloyd—to solicit their help. As Kevin Speers, Maersk's senior director of marketing and administration, recalls, the central question the military posed to them was: "How can we bring in cargo overland to Afghanistan without touching Pakistan or Iran?"
The New Silk Road
What the military and its partners came up with is what's now known as the Northern Distribution Network (NDN), a set of multimodal routings that enter Afghanistan from the North, bypassing Pakistan completely. In some cases, these journeys incorporate parts of the old trade routes used for centuries by merchants, explorers, and warriors—routes collectively known as the Silk Road.
Although the partners identified nine options in total, most are variations on two basic approaches. One route crosses the Baltic Sea to Riga in Latvia, where the freight is loaded onto rail for the journey through Russia, Kazakhstan, and Uzbekistan, where it's offloaded onto trucks and hauled into Afghanistan.
The other route goes east through the Mediterranean and up the Dardanelles into the Black Sea, with the freight offloaded to rail at Tbilisi in Georgia. The cargo then moves overland through Georgia, Armenia, and Azerbaijan, before being loaded onto ships again at Baku for passage across the Caspian Sea to Kazakhstan. In Kazakhstan, it's loaded back onto rail for movement to Uzbekistan, where it's ultimately offloaded to trucks and hauled into Afghanistan.
The main destination hubs for cargo rolling into Afghanistan from the north are Bagram Air Force Base, Kabul, and Kandahar. In total, there are 32 direct delivery locations in Afghanistan.
As daunting as it might sound, coordinating the various legs of these complex multimodal moves is only part of the challenge. The other part is working with the various jurisdictions involved to make sure the shipments comply with each country's rules and requirements. "You have to tie together the governments, the carriers, the shipper, and the ground force," says Col. Wolosz. To help smooth the process, SDDC has taken the step of placing liaison officers in consulates and embassies across the NDN.
Mission accomplished
The first shipment to move via one of the northern routes departed in February 2009 and was delivered in May. Based on the success of that venture, the NDN was declared operational in May 2009, less than a year after the project began. As of the end of March 2010, over 10,000 containers had moved through this new set of routes.
The primary user of the NDN, which is reserved for non-lethal supplies, is the Defense Logistics Agency (DLA). So far, that agency alone has moved more than 8,000 containers through the network. "I think it has gone very well," says Air Force Col. Deirdre Mahon, the DLA's division chief for combatant command support. "Through time, the NDN has proven to be very reliable. We've seen the transit time continue to decrease and the capacity continue to increase. It's doing the job it was intended to do."
One of those jobs, of course, was to reduce the volume of freight brought in through Pakistan. And on that count, the project has been an unqualified success. Today, less than half of all Afghanistan-bound freight moves through Pakistan.
Alan Estevez, the principal deputy assistant secretary of defense (logistics & materiel readiness), credits the private sector with much of that success. "We could not do this without the great support we have from the contractor community, our partners, and transportation providers through some third-party logistics providers," he says.
The military has come in for its share of praise as well. "It's worked very well because whenever we've had an issue, we've been able to go right back to SDDC for help," says Rick Boyle, vice president, U.S.-flag transportation services at Maersk Line Ltd. "Together, we have an ability to get things done very quickly."
Leaders at American ports are cheering the latest round of federal infrastructure funding announced today, which will bring almost $580 million in Port Infrastructure Development Program (PIDP) awards, funding 31 projects in 15 states and one territory.
“Modernizing America’s port infrastructure is essential to strengthening the multimodal network that supports our nation's supply chain,” Maritime Administrator Ann Phillips said in a release. “Approximately 2.3 billion short tons of goods move through U.S. waterways each year, and the benefits of developing port infrastructure extend far beyond the maritime sector. This funding enhances the flow and capacity of goods moved, bolstering supply chain resilience across all transportation modes, and addressing the environmental and health impacts on port communities.”
Even as the new awardees begin the necessary paperwork, industry group the American Association of Port Authorities (AAPA) said it continues to urge Congress to continue funding PIDP at the full authorized amount and get shovels in the ground faster by passing the bipartisan Permitting Optimization for Responsible Transportation (PORT) Act, which slashes red tape, streamlines outdated permitting, and makes the process more efficient and predictable.
"Our nation's ports sincerely thank our bipartisan Congressional leaders, as well as the USDOT for making these critical awards possible," Cary Davis, AAPA President and CEO, said in a release. "Now comes the hard part. AAPA ports will continue working closely with our Federal Government partners to get the money deployed and shovels in the ground as soon as possible so we can complete these port infrastructure upgrades and realize the benefits to our nation's supply chain and people faster."
Supply chains are poised for accelerated adoption of mobile robots and drones as those technologies mature and companies focus on implementing artificial intelligence (AI) and automation across their logistics operations.
That’s according to data from Gartner’s Hype Cycle for Mobile Robots and Drones, released this week. The report shows that several mobile robotics technologies will mature over the next two to five years, and also identifies breakthrough and rising technologies set to have an impact further out.
Gartner’s Hype Cycle is a graphical depiction of a common pattern that arises with each new technology or innovation through five phases of maturity and adoption. Chief supply chain officers can use the research to find robotic solutions that meet their needs, according to Gartner.
Gartner, Inc.
The mobile robotic technologies set to mature over the next two to five years are: collaborative in-aisle picking robots, light-cargo delivery robots, autonomous mobile robots (AMRs) for transport, mobile robotic goods-to-person systems, and robotic cube storage systems.
“As organizations look to further improve logistic operations, support automation and augment humans in various jobs, supply chain leaders have turned to mobile robots to support their strategy,” Dwight Klappich, VP analyst and Gartner fellow with the Gartner Supply Chain practice, said in a statement announcing the findings. “Mobile robots are continuing to evolve, becoming more powerful and practical, thus paving the way for continued technology innovation.”
Technologies that are on the rise include autonomous data collection and inspection technologies, which are expected to deliver benefits over the next five to 10 years. These include solutions like indoor-flying drones, which utilize AI-enabled vision or RFID to help with time-consuming inventory management, inspection, and surveillance tasks. The technology can also alleviate safety concerns that arise in warehouses, such as workers counting inventory in hard-to-reach places.
“Automating labor-intensive tasks can provide notable benefits,” Klappich said. “With AI capabilities increasingly embedded in mobile robots and drones, the potential to function unaided and adapt to environments will make it possible to support a growing number of use cases.”
Humanoid robots—which resemble the human body in shape—are among the technologies in the breakthrough stage, meaning that they are expected to have a transformational effect on supply chains, but their mainstream adoption could take 10 years or more.
“For supply chains with high-volume and predictable processes, humanoid robots have the potential to enhance or supplement the supply chain workforce,” Klappich also said. “However, while the pace of innovation is encouraging, the industry is years away from general-purpose humanoid robots being used in more complex retail and industrial environments.”
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.
The Boston-based enterprise software vendor Board has acquired the California company Prevedere, a provider of predictive planning technology, saying the move will integrate internal performance metrics with external economic intelligence.
According to Board, the combined technologies will integrate millions of external data points—ranging from macroeconomic indicators to AI-driven predictive models—to help companies build predictive models for critical planning needs, cutting costs by reducing inventory excess and optimizing logistics in response to global trade dynamics.
That is particularly valuable in today’s rapidly changing markets, where companies face evolving customer preferences and economic shifts, the company said. “Our customers spend significant time analyzing internal data but often lack visibility into how external factors might impact their planning,” Jeff Casale, CEO of Board, said in a release. “By integrating Prevedere, we eliminate those blind spots, equipping executives with a complete view of their operating environment. This empowers them to respond dynamically to market changes and make informed decisions that drive competitive advantage.”