The toughest job on the planet? interview with Stephen Cahill
If something goes amiss with one of your shipments, you might have an irate customer on your hands. If one of Stephen Cahill's World Food Programme shipments goes awry, people could die.
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.
We all have demanding jobs. But it's all relative.
If one of your shipments is lost, diverted, or delayed, you might have an angry customer or a ticked-off boss, but that's about it. If one of Stephen Cahill's shipments goes awry, people could die.
Cahill's official title is head of contracting, ocean transportation services, for the Rome-based World Food Programme (WFP). Each year, the group coordinates the distribution of more than 4 million tons of relief supplies to over 100 million people who might otherwise go hungry. Half of the food distributed by WFP is transported by ocean to 78 world ports; the rest is sourced in either the country or region where it is needed.
Cahill's role is to ensure that WFP—an arm of the United Nations—is getting the most bang for its food investment buck, and that the food supply chain functions as predictably as possible given the enormous obstacles in its way. The stakes are high: Each night, nearly 1 billion people go to sleep malnourished, according to estimates.
His challenging job is bound to get more so. Global food prices hit record highs in January, the U.N. reported, and are expected to climb 30 percent this year from already-elevated levels. The global population is expected to reach 9 billion people by the year 2050. And a host of issues from geopolitical unrest to climate change to natural disasters show no signs of receding from the world landscape.
The Irish-born Cahill spoke recently with DC Velocity Senior Editor Mark B. Solomon about the myriad challenges facing WFP, and how he manages the enormous, and often life-saving, task in front of him.
Q: In a nutshell, can you describe your mission statement? A: To feed the hungry poor by getting the right commodity to the right place, at the right time, and at the lowest cost.
Q: Do you ever wake up and say to yourself, "The lives of thousands of people—even the fate of governments and nations—may depend on how I do my job today"? A: In some ways, yes. Fortunately, we usually keep three months of in-country stock at any one time to provide a safety net for emergencies. We also have, on average, 30 vessels afloat on any given day that can be used as "floating stock" and can be diverted quickly. I focus more on the fact that, for every dollar saved, we can feed four additional children, and with our annual shipping budget of $250 million, there is a lot of scope to push for additional savings and efficiencies. I also want to ensure that we're getting the best possible value for our money. The difficulty, on a personal level, is measuring the potential cost savings against risks of delays that can directly impact people's lives.
Q: Grain commodity prices have spiked in recent months, and few expect pressures to abate any time soon. How much of this increase is due to traditional supply-demand factors—the needs of a growing global population outpacing production levels—and how much is related to supply chain and logistics challenges? A: I think there are a number of reasons for this. Demand is certainly a factor, with the increased buying power of emerging countries like India and China. However, increased commodity speculation is also a factor. Also, since 2008, financial markets have been very much on edge, so even relatively minor climatic or political events can have a dramatic effect on prices. Further, export restrictions have made the flow of food supplies erratic and unpredictable. This has also impacted prices.
From a supply chain perspective, the market volatility is difficult to deal with, and it has been a negative for the cargo owners and the transporters. Long-term rate stability is essential for owners to invest with confidence and at the same time give shippers the ability to plan properly.
Q: What are the biggest problems you face in getting foodstuffs to market? And how does the tight supply situation make your work more difficult? A: We do not think in terms of "markets." Our focus is on our beneficiaries and the difficulties in reaching them. We work in some of the most remote and difficult places in the world. We are very visible in countries like Somalia, Afghanistan, Haiti, and Democratic Republic of the Congo. In many of those countries, the infrastructure is very poor, and the security situation is often unstable. Bureaucratic red tape is an obstacle, especially as it concerns cargo clearance.
Also, more than 70 countries impose some form of export restrictions that hamper our supply chain. For example, last year when Ukraine imposed an informal export ban, we suddenly had to change our preferred area of supply for Sudan and the Horn of Africa by sourcing from Northern Europe. This increased our lead times considerably.
Q: What steps is your organization taking to mitigate the problems, especially in light of the growing scope of your responsibilities? A: We are involved in a number of initiatives, from local and regional procurement, to rainfall-based insurance in Ethiopia. WFP purchases more than 2 million metric tons of food every year. At least three-quarters of it comes from developing countries. This is because it is WFP's policy, whenever possible, to buy locally produced food. It's close to where we want the cargo, and it provides the local economy with much needed funding.
Q: In 2009, WFP began using a global visibility system from GT Nexus to monitor your network and match supplies with need. How effective has the system been, and what do you see as information technology's role in supporting your work? A: We saw that the platform could offer us a much better insight into our pipeline, and by having that insight, we could adapt our supply chain quickly to the ever-changing environment we work in. An example would be the recent events in Libya, which we use as a corridor to Chad when the corridor through Cameroon is not reliable due to the rainy season. We needed to be able to quickly divert cargo to alternative ports; GT Nexus gives us the visibility to do that.
IT is essential for us. We operate in more than 70 countries, many of which have poor infrastructures and communication systems. We are always looking for better ways to gather and distribute information on our supply chain. Cloud technology certainly seems to me to be the way forward.
Q: Would it be accurate to say that, due to climate change, political unrest, and other factors, nations or regions that were once self-sufficient in food must now import their foodstuffs? If that is true, what additional pressure does this place on the supply chain? A: Climate change is forecast to have a dramatic effect on "rain" irrigated crops. And it's not only about lack of rain, it is also changes in rainy season patterns. Piracy is also affecting our supply chain, especially to countries such as Somalia and Ethiopia, and to one of the ports that we use as a main entry point to Democratic Republic of the Congo, Burundi, Rwanda, Uganda, and Kenya.
We are prepared to work in politically unstable and underdeveloped countries, and our supply chains are designed accordingly. Climate change and food price instability will stress them, but to what extent is difficult to predict.
Q: The U.S. Food Safety Modernization Act signed into law in January imposes new requirements on the food supply chain and gives the Food and Drug Administration more powers to develop a system that will minimize the risk of food-borne illnesses. Do you see, over time, similar programs being implemented globally, and how does this complicate your life? A: As someone involved in food aid, I do not see this as an issue. That said, though, recipient countries have become stricter in the cargo certification process. In some countries, we have to run up to six tests, everything from radiation to bacteriological screening.
Q: If you look at global food needs five years out, what do you expect will be the biggest problem facing the supply chain? A: I look more toward opportunity at the moment. I think "cloud" technology will have a major influence on the supply chain by improving visibility and highlighting actionable bottlenecks. Of course, there will be challenges, most obviously as it concerns the price of oil and petroleum products. In addition, elevated food prices, in and of themselves, have political and commercial consequences. The recent events in Egypt highlight this; the effects on the worldwide food supply chain were negligible. However, had the Suez Canal been closed, the situation would have changed dramatically.
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."