The Pentagon is in the midst of the largest reverse logistics operation in history—the return of enormous amounts of military equipment and goods from Afghanistan.
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.
At the start of the Cold War in 1948, the Soviet Union blocked access to rail, road, and canal traffic to the sectors of Berlin controlled by the Allies. In response, the air forces of the United States, Great Britain, Canada, Australia, New Zealand, and South Africa began delivering supplies to the city by air. After nearly a year and 200,000 flights, the Soviets gave up. The Berlin airlift had worked. It remains one of the most notable achievements of U.S. policy in that period—a triumph made possible by an enormous and well-coordinated logistics operation.
Now, at the end of a very different war, the U.S. and its allies are undertaking an even greater logistics effort. After more than a decade of moving goods and people into Afghanistan, the military has only a few months to move things out to meet a year-end deadline set by the president. When the operation is complete, it will have been the single largest logistics effort, military or otherwise, in history. According to Alan Estevez, the most senior logistics official at the Pentagon, "Afghanistan is a logistician's nightmare." But in an interview with Bloomberg, he also expressed excitement about the challenge, calling it a dream.
As for the scope of the endeavor, last April, The Economist estimated the military had to move out "as many as 28,000 vehicles and 40,000 shipping containers of equipment. In military jargon, the whole action is 'the retrograde.' Shifting that much kit, with an estimated value of $30 billion, is daunting enough. The retrograde itself will cost as much as $6 billion and involve about 29,000 personnel, for the American part alone ..."
THE NETWORK
Accomplishing a project of that scale requires more than a little innovation. To pull it off, the military has assembled the most complex logistics network the world has ever seen. And as formidable as its lift capability may be, the days when the U.S. military had enough equipment to make it happen by itself are long gone. The plan is to make heavy use of commercial carriers.
Unfortunately, the effort does have one thing in common with the situation in Berlin—there are no good surface movement alternatives. Military logisticians have to launch the retrograde from a starting point within a landlocked country bordered by Iran on one side, Pakistan on another, and the Central Asian Republics (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) on a third.
Relations with Pakistan have settled down enough to allow surface movement to Karachi. Still, the government of Pakistan can shut down that route at any time, as it has in the past, so there is risk.
Even if the government of Pakistan doesn't interfere on this leg, the Taliban often does.
To create a safety net, another route has been developed. A newly built 50-mile-long railroad spur drops down into the country from Uzbekistan in the north, increasing the capacity of what used to be just a truck route. But much of the freight moving north through the Central Asian Republics ends up crossing Russia en route to the Latvian port of Riga.
Lately, things have been a little tense with Russia.
So, air freight figures heavily into the exit. Bagram Airfield has been improved and improved again, and it is now the busiest flight line operated by the Department of Defense anywhere in the world. One of the Bagram runways is over two miles long, able to land any aircraft in existence.
THE MULTIMODAL PROGRAM
The runway is the anchor for an extraordinary multimodal program, operating under the understated handle of the "Multimodal Contract." The military couldn't rely on the surface lanes to get everything out and it couldn't afford to fly everything all the way home, so it has put together a hybrid multimodal program that includes air, sea, rail, and truck.
In all, five teams are participating in the program. Among them is a team led by Liberty Global Logistics, a U.S.-based multimodal transportation and logistics company that specializes in heavy equipment and rolling stock, with its partner, UPS's global government operations group, which provides logistics and technology services to government customers.
The multimodal program includes a surface leg to get goods to an aerial hub in Afghanistan, most often Bagram, then an air leg to get them out of Afghanistan to a trans-shipment point, usually Dubai. From there, the move includes a journey by sea back to the United States, where the cargo may move by rail, but more often truck, and sometimes both, to the final destination. The only mode missing is a pipeline.
Army Colonel Glenn Baca, chief of operations for military surface deployment and distribution command, says the multimodal program "allows us to meet the president's timetable." He adds that considering that we're "in the middle of a conflict in a landlocked country on the other side of the world, it's been a big success."
The thousand-mile hop to Dubai enables the military to bypass the risks associated with surface movement out of Afghanistan. The port in Karachi wasn't designed for the volume and type of cargo it has been handling for more than a decade, and therefore, is extremely inefficient. The flight also dodges the border crossings, where hundreds of trucks can be backed up in either direction. It avoids the risk of ambush or attack. And, of course, the uncertainty of Russia is not a factor when you are airborne and headed southeast.
As for how much cargo is being flown out, Lloyd Knight, director of UPS's global government operations group, reports that the volumes in the program change frequently. "At times, we'll handle several dozen aircraft in a two-week period, and other times, we'll manage just one or two flights per month." These are not small aircraft. They're often 747s, or IL-76 and AN-124 aircraft that can handle oversized loads that won't fit in a 747.
"Since the beginning of the program, we have moved more than 150 million pounds," Knight continues. "If it fits on an aircraft, it's moved in the program." Since the multimodal contract was awarded in 2012, Liberty and UPS, just one of five teams transporting freight, have moved thousands of pieces of equipment out of Afghanistan.
Knight offers some advice to those considering doing business in unusual locations. "Find the right partners. We found partners who are reputable, safe, and reliable." Liberty Global Logistics echoes this advice. Bob Wellner, Liberty's executive vice president, and Mike Chapell, its director of operations, emphasize the strength of their partnership with UPS. "Our standards for business are very similar to theirs; both parties set the bar for performance and compliance very high. There is a substantial level of trust."
Wellner and Chapell also salute the partnership with the Department of Defense. "What the United States government has been able to accomplish in conjunction with private partners is incredible."
One guy can make a difference
Over a decade ago, Jay Cziraky set out in an SUV to cross the border into Afghanistan. There is no cold like the cold rolling off the Hindu Kush mountains, but his survival concerns had nothing to do with the weather. Operation Enduring Freedom was in full swing and he was traveling the Ring Road deep in Afghanistan.
In the vernacular of those who work "outside the wire" in what the United States calls "nonpermissive environments," he was "low profile." In other words, anonymity was his only real protection.
Cziraky pulled up at a checkpoint at the gate of a muddy former Soviet airbase. A squad of soldiers guarding the entrance—a pair of Humvees outfitted with .50 caliber machine guns aimed his way—looked at him like he was nuts. He may well have been, but the forwarding agent had a job to do and he was where he needed to be.
It was December 2001. Emery Air Freight had arrived to set up commercial operations at Bagram Airfield, north of Kabul in Afghanistan. Just two months before, a mix of strikes from land-based B-1, B-2, and B-52 bombers; carrier-based F-14 and F/A-18 Hornet fighters; and cruise missiles had marked the launch of the assault on Southwest Asia. The American war in Afghanistan had begun.
And Jay Cziraky was now in the middle of it.
Over the course of the next 12 years, Emery's forwarding operations became Menlo Worldwide Forwarding, which was itself eventually folded into UPS. But through it all, that little freight forwarding office, launched out of the back of an SUV, survived and thrived. UPS now has an Authorized Service Agent organization on the ground, 70 employees strong, managing operations across Afghanistan.
Today, you may see a familiar brown truck driven by somebody in that iconic brown uniform making deliveries at Bagram Airfield. In the middle of a war zone.
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."