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.
Every industry has its "bible," a trade publication that wields major clout among the sector's practitioners. Within the big money and politically driven world of corporate real estate and regional economic development, arguably the bible is Site Selection magazine.
So when the publication ranked Georgia as the state with the best business climate in 2013, it was more than a "sit-up-and-take-notice" moment. It was a validation of years of promotion and investment designed to make the state the country's best place to work, live, and move goods to market.
Mark Arend, the magazine's editor-in-chief, said half of the ranking is based on a survey of site selectors who were asked to choose the top 10 states in terms of attractive business climates. The survey's methodology, Arend said, does not include logistics-specific criteria. "States' logistics assets might have figured into how [site selectors] ranked states, but we can't quantify that," he said.
Still, quality of transportation infrastructure is the second most important criterion in site selection decisions, trailing only the skills of the local workforce, according to the magazine. That plays right into Georgia's strengths. For all the elements that make the Peach State attractive—a pro-business government, reasonable living and business costs, a temperate climate, and a topography bracketed by mountains to the west and in the center, and a seacoast on the east—perhaps no quality elevates it to the top rung in site selectors' eyes as its logistics capabilities.
Georgia offers five interstate highways, 20,000 miles of federal and state roads, and a metropolis in Atlanta that straddles the Eastern and Central time zones and is situated within two days' driving or flying time of 80 percent of all U.S. major markets. The state's "right-to-work" labor climate lessens the influence of unions, a factor for businesses that might be concerned about organized labor's gaining a foothold inside a warehouse or DC. Its logistics apparatus is anchored by the Port of Savannah, the country's fourth-busiest containerport; its sister port in nearby Brunswick that specializes in the handling of roll-on, roll-off cargoes like automobiles; and Hartsfield-Atlanta International Airport, the world's busiest airport. It doesn't hurt that UPS Inc., the nation's largest transportation company, is headquartered in Atlanta and that the company's successful "We Love Logistics" advertising campaign has raised the visibility of the craft, and to a certain degree, the state's role in it.
HIGH-PERFORMING PORTS
At a harbor depth of only 42 feet, Savannah is not and will never be the deepest port on the East Coast. The state has struggled for 14 years to dredge Savannah's harbor to 47 feet; it has budgeted $231 million for the project, but the federal government has yet to come through with the balance. The dredging project won't be completed for another two to three years at the earliest.
But what Savannah lacks in harbor depth, it makes up in a logistics network that is the envy of virtually every port on the continent. It is the only Southeast port served by the two Eastern Class I railroads, CSX Corp. and Norfolk Southern Corp. Those operations are augmented in part by the services of 25 short-line railroads spread out across the state. Savannah's port operations are a model of efficiency, turning at 41 crane moves an hour, second only to the Port of Charleston (S.C.) with 43. Its Garden City facility is considered a jewel among the nation's terminal operations.
An agreement was reached last July to build an inland port in Cordele, Ga., about 186 miles southwest of Savannah, that will spawn a rail route mostly for agricultural products moving to and from the Garden City terminal. The Cordele facility, located about one mile from I-75, will serve as a gateway to southwest Georgia and adjacent regions of Florida and Alabama, according to the Georgia Ports Authority. It will provide agricultural exporters with rail access to Savannah and to export markets without the cost of draying the goods from Cordele. In addition, trucks can drop off loads at Cordele and pick up arriving freight without having to make the trip to the coast.
K.C. Conway, chief U.S. economist for Colliers International, an industrial real estate concern with a strong port practice, named Georgia the "Best in Logistics" in his spring 2013 port outlook. In particular, Conway cited Brunswick for its excellence in the auto trade. "Georgia ports do logistics incredibly well. They are the best in North America," Conway said.
By contrast, the ports of Los Angeles and Long Beach, the nation's busiest port complex, do a commendable job, but they are hamstrung by a web of state regulations and environmental issues that Savannah is spared from, Conway said.
INTANGIBLE ASSETS
John H. Boyd, head of The Boyd Co. Inc., a site selection concern based in Princeton, N.J., said DC activity in Georgia should remain strong as business improves at Savannah and Florida markets rebound following the financial meltdown and the subsequent recession. Boyd said Georgia is a finalist in many of his company's projects because of its deep and sophisticated information technology (IT) support infrastructure. The state's high-tech prowess is taking on greater importance as more companies co-locate e-commerce functions at a less-expensive DC site than at a head office, Boyd said.
Then there are Georgia's intangible assets, namely an understanding by officials, from Gov. Nathan Deal on down, of the supply chain's importance in facilitating trade and commerce, and in enhancing the value of the DC site that companies have invested millions of dollars in. Perhaps nowhere is the commitment more evident than at the Georgia Center of Innovation for Logistics, a unit of the state's department of economic development. Led by Page Siplon, its executive director, the center acts as a year-round advocate for Georgia's freight-related trade, transportation, and logistics interests, and advances the state's role in U.S. and global commerce.
The center's work culminates each year in the Georgia Logistics Summit, a one-day event held in Atlanta that is expected to draw more than 2,000 attendees when the fourth edition convenes in March. The attendee list is expected to include executives and officials from multiple states and countries.
Another valuable asset is the state's "Quick Start" program, which provides free training services to new and expanding companies. Kia Motors, the fast-growing Korean automaker, took advantage of the program after it decided to build its sole U.S. production site on 2,200 acres in West Point, a once-flourishing south Georgia textile hub that fell on hard times along with the rest of the textile industry. Randy Jackson, vice president, human resources and administration for Kia Motors Manufacturing Georgia Inc., said the company was aware that the West Point area employed thousands of workers who knew their way around a factory. With help from the Quick Start program, Kia retrained many of them to assemble cars.
The training began in the 2006-2007 time frame; the first car rolled off Kia's assembly line in November 2009. Today, Kia directly employs 3,000 people and has another 11,000 dedicated suppliers. "And we are still working with the program," Jackson said.
The venture-backed fleet telematics technology provider Platform Science will acquire a suite of “global transportation telematics business units” from supply chain technology provider Trimble Inc., the firms said Sunday.
Trimble's other core transportation business units — Enterprise, Maps, Vusion and Transporeon — are not included in the proposed transaction and will remain part of Trimble's Transportation & Logistics segment, with a continued focus on priority growth areas following completion of the proposed transaction.
Terms of the deal were not disclosed but as part of this agreement, Colorado-based Trimble will become a shareholder in Platform Science's expanded business. Specifically, Trimble will have a 32.5% stake in the newly expanded global Platform Science business and will receive a Platform Science board seat. The company joins C.R. England, Cummins, Daimler Truck, PACCAR, Prologis, RyderVentures, and Schneider as a key strategic investor in Platform Science along with financial investors 8VC, Activant Capital, BDT & MSD Partners, Softbank, and NewRoad Capital Partners.
According to San Diego-based Platform Science, the proposed transaction aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings.
From Trimble customers’ point of view, they will continue to enjoy the benefits of their Trimble solutions, with the added flexibility of the Virtual Vehicle platform from Platform Science. That means Virtual Vehicle-enabled fleets will receive access to the Virtual Vehicle Marketplace, offering hundreds of new and expanded applications, software, and solution providers focused on innovating and improving drivers' quality of life and fleet performance.
Meanwhile, Platform Science customers will enjoy the added choice of Trimble's remaining portfolio of transportation solutions which will be available on the Virtual Vehicle platform, the partners said.
"We believe combining our global transportation telematics portfolio with Platform Science's will further advance fleet mobility and provide our customers with a broader portfolio of solutions to solve industry problems," Rob Painter, president and CEO of Trimble, said in a release. "Increased collaboration between the new Platform Science business and Trimble's remaining transportation businesses will enhance our ability to provide positive outcomes for our global customers of commercial mapping, transportation management, freight procurement, and visibility solutions. This deal will result in significant synergies along with tremendous opportunities for employees to continue to grow in a more-competitive business."
The acquisition comes just five months after Platform Science raised $125 million in growth capital from some of the biggest names in freight trucking, saying the money would help accelerate innovation in the commercial transportation sector.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
With the economy slowing but still growing, and inflation down as the Federal Reserve prepares to lower interest rates, the United States appears to have dodged a recession, according to the National Retail Federation (NRF).
“The U.S. economy is clearly not in a recession nor is it likely to head into a recession in the home stretch of 2024,” NRF Chief Economist Jack Kleinhenz said in a release. “Instead, it appears that the economy is on the cusp of nailing a long-awaited soft landing with a simultaneous cooling of growth and inflation.”
Despite an “eventful August” with initial reports of rising unemployment and a slowdown in manufacturing, more recent data has “calmed fears of a deteriorating U.S. economy,” Kleinhenz said. “Concerns are now focused on the direction of the labor market and the possibility of a job market slowdown, but a recession is far less likely.”
That analysis is based on data in the NRF’s Monthly Economic Review, which said annualized gross domestic product growth for the second quarter has been revised upward to 3% from the original report of 2.8%. And consumer spending, the largest component of GDP, was revised up to 2.9% growth for the quarter from 2.3%.
Compared to its recent high point of 9.1% in July of 2022, inflation is nearly back to normal. Year-over-year growth in the Personal Consumption Expenditures Price Index – the Fed’s preferred measure of inflation – was at 2.5% in July, unchanged from June and only half a percentage point above the Fed’s target of 2%.
The labor market “is not terribly weak” but “is showing signs of tottering,” Kleinhenz said. Only 114,000 jobs were added in July, lower than expected, and the unemployment rate rose to 4.3% from 4.1% in June. Despite the increase, the unemployment rate is still within the normal range, Kleinhenz said.
“Now the guessing game begins on the magnitude and frequency of rate cuts and how far the federal funds rate will be reduced,” Kleinhenz said. “While lowering interest rates would be good news, it takes time for rate reductions to work their way through the various credit channels and the economy as a whole. Consequently, a reduction is not expected to provide an immediate uplift to the economy but would stabilize current conditions.”
Going forward, Kleinhenz said lower rates should benefit households under pressure from loans used to meet daily needs. Lower rates will also make it more affordable to borrow through mortgages, home improvement loans, car loans, and credit cards, encouraging spending and increasing demand for goods and services. Small businesses would also benefit, since lower intertest rates could lower their financing costs on existing loans or allow them to take out new loans to invest in equipment and plants or to hire more workers.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.