Nearly three months after Hurricane Sandy devastated the northeast United States, the supply chain is struggling to gain the traction needed to help the nation's most populous region get back on its feet.
As the calendar turns, the recovery work that might have otherwise been further along has instead been frustratingly slow to take shape, according to the American Logistics Aid Network (ALAN), a group formed after Hurricane Katrina in 2005 to connect disaster relief agencies with individuals, companies and associations looking to provide logistics capabilities and resources to stricken areas.
In New York City, Long Island, and northern and central New Jersey, areas that bore the brunt of Sandy's wrath, there have been few long-term requests for the transport of building materials necessary to support a normal recovery, according to ALAN officials.
"There is progress. It's just not moving as quickly as we hoped," said Kathy Fulton, ALAN's director of operations.
Sandy made landfall along the New Jersey shore on October 29, packing a lethal combination of rain, wind and snow. Dubbed a "superstorm" for its enormous 900-mile width and a near-record low level of barometric pressure, Sandy spawned massive wind gusts, tidal surges, and blizzard conditions that meteorologists said were unheard of for a tropical storm.
Sandy killed more than 200 people in the U.S. and the Caribbean, and caused about $62 billion in damage. It is the second-costliest natural disaster in U.S. history behind Hurricane Katrina, which cost about $125 billion in inflation-adjusted dollars.
Several factors have slowed the recovery process. Bureaucratic red tape has frustrated homeowners and businesses that have filed insurance claims. There is also Congressional delay in appropriating billions in federal dollars. The House of Representatives, which has been sharply criticized for dragging its feet on voting for relief funding, approved $50.7 billion in aid last week, less than the $60.4 billion bill the Senate passed late last year.
As of Monday, however, final legislation had not been sent to President Obama's desk for signature, meaning that it's been 82 days from the storm's first day and its victims have yet to receive federal aid.
Fulton said the funding should brighten the prospects for recovery and get the wheels of commerce grinding again. "Anything that helps boost the economy for the region will improve the supply chain situation," Fulton said.
But the flow of federal funds may do little at this point to help areas so devastated that relief workers are still in "response" mode to provide food and shelter to those who lost everything. There are even some areas of the region still recovering from Hurricane Irene, an August 2011 storm that hit the Northeast and New England with significant flooding but was nowhere near the magnitude of Sandy.
Temporary housing remains inadequate for the densely populated region living in such a wide area affected by Sandy. Even many relief workers can't find shelter, according to ALAN officials. The supply chain's biggest immediate challenge is to find some type of lodging for those workers so they are capable of helping survivors, Fulton said.
Sandy wreaked such widespread devastation that many trucks have not been able to navigate around the rubble to make deliveries. Perhaps the most enduring images of the enormous physical damage are aerial photos of a seemingly endless line of damaged cars parked January 9 at a Long Island air park waiting to be auctioned.
Another issue is how to dispose of thousands of items sitting in a decrepit warehouse in central Islip, Long Island, about 50 miles east of New York City. The facility houses in-kind donations for multiple relief agencies that lack their own warehouse space, and were donated by individuals, businesses and groups from across the nation. The in-kind donation programs for New York and New Jersey are managed by Adventist Community Services, a highly regarded organization that works through memorandums of understanding with the two states.
However, the aging facility has no heat or running water. The building is set for demolition, and Adventist has until Feb. 8 to remove the goods from the warehouse and find homes for them.
Adventist has sufficient material handling equipment to remove the goods from the facility. However, other agencies are facing a void in available lifttrucks. Many lifttrucks were damaged beyond repair by the storm, and there is a lack of adequate replacement quantities, Fulton said.
Today, ALAN is doing what it can to assist in what has become its biggest disaster relief effort since its inception. For example, it is linking relief groups seeking to replace so-called durable medical equipment like examination beds with a medical surplus recycling program, and will also connect the agencies with transportation providers to get the goods to their destinations.
No one knows how quickly or completely the Northeast will recover from Sandy. John T. "Jock" Menzies, ALAN's president, said a full recovery will take three to five years. Yet Menzies characterized Sandy as a "disaster" but not a "catastrophe," the distinction being a catastrophe creates a totally new way of life and commerce, and that the affected region never returns to what it was like prior to the event.
Before Sandy, ALAN's two biggest involvements were the January 2010 earthquake in Haiti, and the March 2011 earthquake and tsunami in northeast Japan. While the two events may have been somewhat similar, the responses couldn't have been more different, Menzies said.
Haiti, a poor country with socio-economic instability, was virtually flattened by its quake, which killed an estimated 230,000. Three years later, about 600,000 Haitians still live in tents, compared with about 750,000 in the disaster's immediate aftermath.
In contrast, Japan, a wealthier, more advanced society with strong cultural homogeneity and proven resiliency in addressing natural disasters, recovered almost fully within three months after the earthquake and tsunami, even though the World Bank listed it as the costliest natural disaster in recorded history at about $235 billion.
The recovery in Japan was so remarkable, Menzies said, that he had difficulty distinguishing photographs taken after the disaster with those that were taken before the quake.
Fulton said the post-Sandy recovery will be "uneven" across the region, and it will depend on the allocation of funds, the level and effectiveness of political leadership, and the involvement of the respective affected communities. Still, the powerful socio-economic forces in the U.S. give it "great capacity to recover" from the disaster.
Menzies said ALAN, like all those involved in Sandy relief efforts, will learn from the disaster, enabling the group to more effectively deal with future events. Of the many challenges confronting logistics planners, he said, the overarching question may be "if we are going to support the building in areas that are susceptible to these kinds of events."
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."