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.
If New York Gov. Andrew Cuomo has his way, the air cargo apparatus in and around Kennedy International Airport will
pull up stakes and relocate to a new regional distribution hub at Stewart International Airport, located some 60 miles north
in the Hudson Valley town of Newburgh, N.Y.
If the air cargo community has its way, the idea will die a quick, quiet death.
On Oct. 20, Cuomo, a Democrat, announced at an event in Albany that the state would establish a regional hub in Newburgh
that would relieve JFK of most of its air cargo operations. Affected would be about 600 air freight forwarders whose business
depends on the all-cargo and lower-deck—or bellyhold—traffic that moves in and out of North America's sixth largest
facility by
volume, according to 2013 data from the Airports Council International—North America (ACI). Ground-handling and customs services
would presumably be impacted, as would over-the-road truckers that provide surface transport services linking JFK with other
airports.
To facilitate the transfer, the state would establish a tax-free zone at Stewart known as "START-UP NY" that would provide
incentives to companies to move manufacturing operations into one large distribution center, Cuomo said. FedEx Corp. and UPS Inc.,
the country's two largest parcel carriers, have regularly scheduled flights at Stewart, and the U.S. Postal Service and the
Department of Agriculture have facilities there, Cuomo said. Stewart is "strategically positioned to expand into a larger air
cargo role," Cuomo said. In his remarks, he offered no specifics on the relocation plan other than the creation of the tax free
zone.
The relocation of JFK's cargo operations is designed to make room for a host of travel-related amenities that is part of a
total redesign of the airport. Among the changes would be an enhancement of the airport's passenger mobility network, construction
and expansion of hotels surrounding the airport, and offering airport guests an array of dining and shopping options, Cuomo said.
The governor also announced major changes at LaGuardia Airport and Republic Airport on Long Island, which along with JFK and
Stewart fall under the operation of the Port Authority of New York and New Jersey.
Cuomo announced in his "State of the State" address in January that New York would take control of construction at JFK and
LaGuardia in an effort to reduce gridlock around the airports and make what he called "necessary improvements" to the facilities.
JFK was built in 1960, and LaGuardia opened in 1939.
DISASTER LOOMS?
For those in JFK's deep-rooted and extensive air cargo community, the proposal smells like disaster. About half of JFK's cargo
traffic moves in and out in the bellies of passenger airlines, and it is an open question as to whether these carriers, whose
primary revenue source is passenger traffic, would be willing to divert flights to Stewart to accommodate freight flows, according
to Brandon Fried, executive director of the Airforwarders Association, a trade group.
Then there is the existing JFK cargo apparatus, comprised of a labyrinth of providers that for years have endured the area's
worsening air and road congestion, and the airport's high operating costs, because that is where the aircraft and cargo are. Fried
doubts that many of the forwarders at JFK, many of whom have been there for decades and constitute a tight-knit village, would
move to Newburgh.
Asked what his group would do to block the proposal, Fried replied, "I'm not sure what we will be fighting since the idea is so
bad that it will fall on its face." Fried called the plan "half baked" and "impractical," adding that Cuomo did not consult with
the forwarding industry before announcing it.
Fried said he saw a story about 10 days ago on the proposal but said it "seemed so ridiculous" that he didn't pay attention.
Fried said he grew more concerned last Friday. At this point, Fried said his group is trying to obtain more details about the
proposal.
The governor's office did not reply to two requests for comment at press time. A cargo representative from ACI did not reply to
a request for comment.
JFK—like Miami International Airport, Chicago's O'Hare International Airport, and Los Angeles Airport—is classified
as a "gateway" because it receives so much international air cargo traffic and has the network required to support it.
No one doubts that Stewart has the network and capacity to accommodate more business that it handles. An Air Force base until
it was closed in the early 1990s and transformed into a commercial facility, Stewart has long runways capable of handling the
biggest aircraft. It is at the juncture of Interstate 87—which runs southbound into New York, and Interstate 84, which connects
Pennsylvania, Connecticut, Massachusetts, and New York.
Besides Stewart's close proximity to New York City, it is within 250 miles of seven major U.S. and Canadian cities. Its website
touts Stewart as "perfectly situated for efficient distribution of air cargo to and from...the Northeast, mid-Atlantic, and the
Midwest."
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.