In Person interview: Ed Bowersox of CJ Logistics America
In our continuing series of discussions with top supply-chain company executives, Ed Bowersox of CJ Logistics America discusses peak season, the benefits of lean, and the need for resiliency.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
Ed Bowersox is CEO of CJ Logistics America, a third-party logistics service provider (3PL) and supply chain consultant. Formerly known as DSC Logistics, the company was acquired by South Korean giant CJ Logistics Corp. in 2018 and is now being integrated into the CJ Logistics family. In his capacity as CEO, Bowersox leads the company’s strategy and has executive oversight of its development and management.
Bowersox joined DSC as senior vice president, customer strategy in 2015. Prior to that, he worked for Kimberly-Clark, where he led global supply chain transformation initiatives and oversaw operating and manufacturing facilities. Bowersox holds a bachelor’s degree in packaging engineering and logistics from Michigan State University.
Q: How do you view the current state of the logistics market?
A: The Covid-19 pandemic has certainly underscored the criticality of logistics and supply chain. Our organization has long emphasized the importance of being out in front of dynamic change; we are focused on providing thought leadership and insights to inform strategies. We’re rethinking global supply chains, redefining supply chains. E-commerce is the most rapidly growing 3PL segment, and the industry is experiencing a very intense, constrained fourth quarter. Retailers and logistics providers are playing critical roles in keeping the supply chain moving and evolving through unprecedented times.
Q: Your company is going through a rebranding, moving to CJ Logistics. What are you hoping this new identity will provide?
A: We are coming together as one company, with all the brands aligned with our vision for a connected customer experience, integrated global solutions, and accelerated innovation. Our focus is on customer value creation and continuous improvement. Now, as CJ Logistics, we are able to provide expanded capabilities that truly span the supply chain from end to end and to integrate those services across the globe. Our ability to optimize sustainability, efficiency, and visibility are greatly increased. Further, we see this as a huge step in our continuing efforts to develop world-class talent, with an increased ability to provide robust global career-development opportunities for existing and new team members. Becoming one with “CJ Logistics, The SCM Innovator,” is also symbolic of our commitment to continue to invest in technology and information systems that translate into data-driven strategies. It’s a very exciting time.
Q: CJ Logistics offers a full range of supply chain services, including transportation, warehousing, logistics, and consulting. Are there advantages to providing customers with that full-service approach?
A: Yes, when you approach the supply chain holistically, you can be much more effective in optimizing the total system. When you only manage a myopic portion of the supply chain, there is always a risk of sub-optimization. In our customer engagements, even when we are only playing a singular role in a customer’s supply chain, we step back and attempt to model and consider as much of their total picture as we can, evaluating the impacts of our solution up and down the chain. Every solution has our customers’ broader goals and end-customer in mind. Whether customers are hoping to identify quick wins or design for total network optimization, we keep the big picture in sight and assist customers in mitigating risk and making key business decisions.
Q: Supply chain capacity is very tight right now, especially in the midst of this holiday season. What effect has that had on operations?
A: On the warehouse side, attracting and retaining talent is more critical than ever. Our employees have shown tremendous dedication as we work to keep the supply chain moving, providing some of the food, medical, and consumer supplies that have been most critical throughout the pandemic. In view of the increased activity, we are focused on providing flexibility, recognition, and incentives to help sustain and retain our team members through this challenging period.
Regarding transportation, capacity and rising rates are a critical concern, and constraints are increasing across all modes. In this challenging market, our customers are starting to evaluate the feasibility of dedicated asset solutions and are receptive to more aggressive collaborative shipping consolidation programs to optimize existing capacity.
Q: You have been a proponent of lean. What are the main benefits that lean provides to operations?
A: Lean principles serve to help drive operational efficiency and accuracy, which in turn transforms business processes to reduce total cost and improve service. Our continuous improvement (CI) philosophy is much broader than lean, however. Our CI approach emphasizes accountability and empowerment to drive results. Our framework drives continuous improvement at the local operations level, at the customer network level, and across our North American enterprise. We apply our industry expertise to help our customers reach levels of performance they could not reach alone, leveraging innovative technology and business intelligence (BI) tools to enhance performance and calibrate results. We challenge ourselves to be out in front, adapting to change and advancing industry thinking and practices.
Q: What do you think is the most important thing that companies should focus on now in their supply chains?
A: Companies must focus on strategies for building robust, resilient supply chain networks that can respond quickly to dynamic change. It is time to accelerate plans and strategies focused on increasing visibility, innovation, and automation, and a high-performing, collaborative supply chain partnership can serve as a critical enabler to success in these areas.
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."
Global trade will see a moderate rebound in 2025, likely growing by 3.6% in volume terms, helped by companies restocking and households renewing purchases of durable goods while reducing spending on services, according to a forecast from trade credit insurer Allianz Trade.
The end of the year for 2024 will also likely be supported by companies rushing to ship goods in anticipation of the higher tariffs likely to be imposed by the coming Trump administration, and other potential disruptions in the coming quarters, the report said.
However, that tailwind for global trade will likely shift to a headwind once the effects of a renewed but contained trade war are felt from the second half of 2025 and in full in 2026. As a result, Allianz Trade has throttled back its predictions, saying that global trade in volume will grow by 2.8% in 2025 (reduced by 0.2 percentage points vs. its previous forecast) and 2.3% in 2026 (reduced by 0.5 percentage points).
The same logic applies to Allianz Trade’s forecast for export prices in U.S. dollars, which the firm has now revised downward to predict growth reaching 2.3% in 2025 (reduced by 1.7 percentage points) and 4.1% in 2026 (reduced by 0.8 percentage points).
In the meantime, the rush to frontload imports into the U.S. is giving freight carriers an early Christmas present. According to Allianz Trade, data released last week showed Chinese exports rising by a robust 6.7% y/y in November. And imports of some consumer goods that have been threatened with a likely 25% tariff under the new Trump administration have outperformed even more, growing by nearly 20% y/y on average between July and September.