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Kathy Fulton is executive director of the American Logistics Aid Network (ALAN). She leads the organization in facilitating donations of logistics services and equipment to enable delivery of millions of dollars’ worth of humanitarian aid. Fulton served as the organization’s director of operations from 2010 until her promotion in 2014.
Fulton’s passion is the intersection of supply chain and emergency management, focusing on the critical role logistics and supply chain professionals play in disaster relief. She serves on national workgroups focused on efficient coordination of logistics activities during disasters, including those hosted by the National Academies of Science, Engineering, and Medicine, the Department of Homeland Security, the Transportation Research Board, National Voluntary Organizations Active in Disaster, and the National Emergency Management Association.
Preceding her work with ALAN, she was senior manager of information technology services at Saddle Creek Logistics Services, where she led IT infrastructure implementation and support, corporate systems, and business continuity planning. Fulton holds a bachelor’s degree in mathematics from Northwestern State University of Louisiana and master’s degrees in business administration and management information systems from the University of South Florida.
David Maloney, Editorial Director, DC Velocity 00:00
The logistics industry facilitates Ukrainian relief. With higher costs for everything, sustainability efforts are taking a backseat. And what needs to change to reduce volatility in global trade?
Pull up a chair and join us as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast. Hi, I'm Dave Maloney. I'm the group editorial director at DC Velocity. Welcome.
Logistics Matters is sponsored by Aptean. Aptean is a global provider of mission-critical, industry-specific logistics and transportation management solutions. Aptean routing and scheduling delivers advanced transportation management systems to world-leading brands, helping them streamline daily operational processes. If you're ready to make savings of up to 30% and unlock the value of your transportation operation, Aptean can help. For more information, visit Aptean.com and discover what's next now.
As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be along to provide their insights into the top stories of this week. But to begin today: the logistics industry is in a unique position to help aid Ukraine during this time of need. At the center of the coordination of the flow of relief goods within the supply chain industry is the American Logistics Aid Network—or better known as ALAN. I spoke yesterday with ALAN's executive director, Kathy Fulton, about how the logistics community is helping refugees and others during the current crisis in Ukraine and what more needs to be done. Here, now, is our conversation.
Welcome back to Logistics Matters. It's great to have you with us, Kathy.
Kathy Fulton, Executive Director, American Logistics Aid Network 01:48
Hey, David, it's always great to be with you.
David Maloney, Editorial Director, DC Velocity 01:51
ALAN, of course, has been involved with helping crisis areas around the world for many years, but usually your efforts are in response to natural disasters and not wars, like we're seeing right now in Ukraine. So how does that make the Ukraine crisis different?
Kathy Fulton, Executive Director, American Logistics Aid Network 02:05
Yeah, that's a terrific question, and actually, I'll start by telling you what we're seeing, that's the same, and that is the outpouring of support from people around the globe who want to help. And there's good and bad to that, right? The good part is that aid is flowing in both from government and corporate and individual sources. The bad thing is that tends to lead to some clogged supply chains. In fact, the the Ukrainian Logistics Cluster support team and put out a notice that they really want people to be able to coordinate amongst the responding organizations, because they're having service impacts, right? You know, just like, we have a driver crisis here in the U.S., Europe has that, you know, those same challenges, and especially within the country of Ukraine, because of all the displaced population. So, that's, you know, that's kind of what is the same—that outpouring of support and the challenges it brings. What's different is, you know, whenever you deal with a disaster caused by a natural hazard, you have those dangerous conditions, but they tend to resolve themselves within a few days, right? So, a road or bridge may be covered in debris, let's say, from from a hurricane or tornado, but they can clear that and that route can be passable. What's happening here is, day to day, those conditions are changing, right? Just because a road or bridge is safe and passable today doesn't mean that you'll be able to take that same route tomorrow. The other challenge that we see that's different is, you know, the number of displaced persons is, you know, 10 million plus now, right? The largest evacuation we've ever seen in the U.S. was in response to Hurricane Irma in 2017, and that was like six and a half million people who left the peninsula of Florida to get out of the way. So, when you're dealing with the complex, changing infrastructure, and then dealing with trying to feed and clothe and shelter and provide medical care for a population that's on the move, that becomes a very daunting task for the humanitarian organizations who are responding.
David Maloney, Editorial Director, DC Velocity 04:39
Usually you have set partners that you work with. Obviously, in a situation like this, where the war is changing continuously, are you finding it difficult to to be that matchmaker that ALAN typically is in finding those people who have resources and those people who have needs?
Kathy Fulton, Executive Director, American Logistics Aid Network 04:56
So, what's really interesting is that a lot of the folks who we work with on an ongoing basis are also the same folks who have had long-term relationships in Ukraine and in Eastern Europe. So, a lot of the names who are familiar to you—obviously, Red Cross and Salvation Army, and groups like that, but we also work with groups like International Medical Corps, who has a long history of working directly in Ukraine, as is another, smaller partner of ours, World of Giving, who has been in country, both in Poland and in Ukraine, and has those, that deep network. So, really, it's just exposing them to partners they may already know, but also building those connections and those bridges where they—just to fill their gaps, which is a lot of what we end up doing in our domestic disaster response as well.
David Maloney, Editorial Director, DC Velocity 05:57
Sure. And, of course, beyond the boycotts of Russian products, and resulting higher energy prices, there are a lot of other supply chain effects from the Russian invasion of Ukraine. What are some of the major concerns that ALAN is addressing?
Kathy Fulton, Executive Director, American Logistics Aid Network 06:11
Yeah, so I know Treasury Secretary Yellen recently spoke to Congress and talked about the enormous economic repercussions for the world. That has to do with both sanctions and inflationary pressure that we've already seen, but those things are also challenges for kind of long-term sustainability of food security challenges, right? So, if you look at Ukraine and Russia as the, kind of the world's breadbasket, right?, so we're talking about wheat and barley and rye. So, those items become not just, you know, at risk because of destruction of crops—and we've not really seen that, but, you know—the more expensive to get them exported. They have to take different routes, because, you know, ports that were previously available, or logistics routes that were previously available, suddenly aren't anymore. We also are looking at things like the challenges with precious metals, you know, the nickel that's used in in batteries, and platinum, aluminum, steel. Neon that—you know, I didn't even know that neon was a really useful component in making chips, you know, electronic chips, until recently, but now everyone is concerned about that—especially because we've had this chip concern, you know, for a couple of years now through the pandemic. And then you think about a different kind of chips, and that being, you know, snacking potato chips, and a lot of the sunflower oil that's used in that production comes from Ukraine and Russia. So, those are, you know, why are we concerned about these thing, right? So, well, those materials are very critical to food security, right? or to logistics, activities. We're already in a challenging time for supply chains, let's say—I don't know am I allowed to use the word "unprecedented" still?—and this is just more friction on top of that's going to make it harder for equipment to be produced or materials to be moved. So, all of those things are very much a concern to ALAN, because we understand that supply chain resiliency is key—that those pre-existing supply chains are key to serving communities after a crisis. So, we keep our eye on those things pretty closely.
David Maloney, Editorial Director, DC Velocity 08:59
Sure. And I think the issue of food insecurity is a concern moving forward, too, and looking at the fact that in the U.S. the harvest is down due to drought and things like that. Can the world make up some of that deficit from Ukraine if they're not able to harvest their wheat, and what kind of implications will that have, especially on poorer sections of the world?
Kathy Fulton, Executive Director, American Logistics Aid Network 09:22
Yeah, exactly. You know, at that point, you start to wonder about, not just availability, but price point, right? Are the communities in the countries that are already food insecure, who purchase a lot of their materials from Eastern Europe, purchase a lot of those commodities, are they going to be priced out of the market suddenly? And so, it's a cascading crisis at that point, because, you know, the war is not taking place in sub-Saharan Africa, but sub-Saharan Africa is very dependent on Ukraine for their food. So, thinking about those global implications—which, you know, that's why we're looking across, you know, people's supply chains and looking at, you know, who are your suppliers knowing that—and most companies don't, right? So, I was at the Modex event last week, and we happened to have the good fortune to do a panel with David Shillingford from for Everstream Analytics and Alan Amling from University of Tennessee. We kind of asked the audience, hey, you know, how many of you think you have exposure in Ukraine or Russia, and maybe five or 10 people in the audience of 50 or so raised their hands, but honestly, the numbers are probably much higher. You know, Alan found some statistics from Dun and Bradstreet that, say, you know, there's about 374,000 businesses worldwide that rely on Russian suppliers, and about 241,000 businesses that rely on Ukrainian suppliers, and 90% of those, 90-plus percent of those, are based in the U.S. So, we have, you know, this half-a-million-plus U.S. businesses who have some risk exposure to Ukraine and Russia with this conflict.
David Maloney, Editorial Director, DC Velocity 11:27
And with our interconnected supply chains, as we've learned through the pandemic, it doesn't take much to send a ripple through everything.
Kathy Fulton, Executive Director, American Logistics Aid Network 11:34
Yeah. 100%, you know, and it has to do not just with the connectedness and the tier one and tier two kind of supplier concerns, but also just, you know, thinking about the connectedness between the products—you know, what does a forklift, what does a forklift have to do with insecure—food security, right? Or what does, you know, what does a shipping route have to do with food security? But as we know, even things that that may not seem connected, somehow we end up with with problems on the other end when we never knew that there was, that there would be an issue, I think, you know, maybe the pandemic has taught us a few things there.
David Maloney, Editorial Director, DC Velocity 12:27
So, what kind of activities is ALAN involved with, and what are some of the ways that people in the logistics community can help?
Kathy Fulton, Executive Director, American Logistics Aid Network 12:35
Yeah, so, you know, our strategy has always been supporting the initiatives for the demand-driven response work. So, we want to, we're working with our nonprofit partners who are already on the ground, who've done their assessments, who know what is needed, where it's needed, when it's needed, and the quantities it's needed in. So, I've mentioned a couple of those groups: International Medical Corps, World of Giving, and others that we're working with. So, as they need those connections or those resources, we're helping to provide those connections for them. You know, we also know that there are businesses out there, there are coalitions out there that want to help, and who are, you know, kind of banding together to say, Hey, we have these resources, let's offer them. So, as we can, we're helping to connect them with those, the demand side with the nonprofits who are already in the region who can take those services that are being offered, and put them to use. We want to help wherever we can when we know that the activities are going to help those who are in need. Yeah, that's kind of what we're what we're up to right now.
David Maloney, Editorial Director, DC Velocity 13:52
Sure, what kind of needs are there that someone might be able to help with?
Kathy Fulton, Executive Director, American Logistics Aid Network 13:56
Well, there are always, you know, logistics, transportation needs are always a big one. And even if, you know we post those needs to our to our website, ALANaid.org. But if someone doesn't see a need right then and there, they can always pre-offer it. They can give, they can say, hey, we want to help with transportation. Transportation's a big one. We have had a couple of conversations about warehousing in Eastern Europe. We think that those have have gotten resolved as of now. The World Food Program is very active and has set up their warehouses, their shared warehouses, so we think that those kind of, those warehousing needs are taken care of. But this is, you know, even if the war ends today, but we still have 10 million-plus displaced people that are going to need food and shelter and medical care, so we're kind of looking at this from a long-term perspective. You know, let us know how you can help now and maybe we call you in a few weeks or a few months,
David Maloney, Editorial Director, DC Velocity 14:59
So they should check the ALAN website, and then if they do have something that they can offer, you will help them to be able to put those resources to use.
Kathy Fulton, Executive Director, American Logistics Aid Network 15:07
Absolutely, and we know, like, people also want to give products—especially products that are coming from the U.S., you know, there's long supply chains to get them there, they have to match them with the right people. They may not be in the right quantity or type of product that, you know, the Ukrainian population is accustomed to, to eating or utilizing, but there may be need for it. So, for example, a shipment of face masks that's going from a U.S. distributor to a U.S.-based nonprofit, we're kind of helping with those first-mile logistics. So, there are opportunities, whether it is here in the U.S. or abroad, to be one link in that chain that ultimately ensures that, you know, a refugee or displaced person gets what they need.
David Maloney, Editorial Director, DC Velocity 16:01
And again, the website is ALANaid.org.
Kathy Fulton, Executive Director, American Logistics Aid Network 16:05
That's correct, ALANaid.org, and you can see, you know, there's a big bright blue and yellow banner that everyone will recognize as the colors of the Ukrainian flag that will help you connect to you the best way to to offer support right now.
David Maloney, Editorial Director, DC Velocity 16:21
Kathy, it's always a pleasure. Thank you again for being with us and keep up the good work.
Kathy Fulton, Executive Director, American Logistics Aid Network 16:26
Thanks, Dave. It's always a pleasure for me as well.
David Maloney, Editorial Director, DC Velocity 16:29
We've been talking to Kathy Fulton, the executive director of ALAN, the American Logistics Aid Network. We would also like to make a mention that in addition to helping the great work of ALAN, we also received a note from the Council of Supply Chain Management Professionals, or CSCMP, that that organization and its Ukraine Roundtable have established the CSCMP Talent Center Ukraine Logistics Operations Relief Fund in support of service providers who deliver medical and food relief to the millions of people affected by the war in Ukraine. Go to CSCMPTalentCenter.org for details and to make a donation. And now let's take a look at some of the other supply chain news from the week. And Victoria, you wrote this week that rising costs are forcing many companies to slow their climate change initiatives. Can you give us some details from that report?
Victoria Kickham, Senior Editor, DC Velocity 17:22
Sure, happy to. Yeah, so businesses are scaling back investments due to inflation, and supply chain decarbonisation efforts are among the first on the chopping block, and that's according to a recent report from procurement and supply chain consulting firm Proxima. The companies surveyed 2000 CEOs in the United States and in the UK for its Supply Chain Barometer 2022. And the inflationary environment we're in really rose to the top of the key issues companies are facing. 91% of the CEOs surveyed said their companies are experiencing inflation. Not a huge surprise. We're all dealing with that. But one in 20 said they're seeing inflation above 10%. Nearly half said their businesses have raised prices as a result. Other tactics for dealing with the rising costs include nearshoring—so we're seeing companies bring their supply chains closer to to home; delaying business investments, as I said at the outset; and also reconfiguring products and services to sort of better align costs. But, as I said at the beginning, when it comes to scaling back investments, sustainability is among the hardest hit. The research found that a quarter of businesses have had to delay their plans to decarbonize their supply chains due to inflation, and another 13% said inflation had changed their decarbonization plans altogether.
David Maloney, Editorial Director, DC Velocity 18:45
Victoria, did the study mentioned how those plans are changing?
Victoria Kickham, Senior Editor, DC Velocity 18:49
Not specifically. The CEOs surveyed seemed more concerned about getting costs back under control in general, and they made it pretty clear they think the government should be doing more to address the problems businesses are facing. 89% of CEOs expressed concern that government should be doing more to tackle inflation, for instance, and about half said government leaders should be taking steps to cap energy prices for businesses. A similar number said the government should be actively intervening by sourcing certain goods, so, helping to get costs in line that way. So, in general, there's a lot of concern out there about rising prices, which is something we've talked about a lot in the past year, and in recent months, especially, and the issue doesn't seem to be going anywhere anytime soon.
David Maloney, Editorial Director, DC Velocity 19:34
Yeah, definitely Inflation affects everyone. Let's hope it returns a little bit to somewhat normal in the future. Thanks, Victoria.
Victoria Kickham, Senior Editor, DC Velocity 19:41
You're welcome.
David Maloney, Editorial Director, DC Velocity 19:42
And Ben, you wrote this week about the continued volatility in global trade and what needs to change to get things back to normal again. What more can you tell us?
Ben Ames, Senior News Editor, DC Velocity 19:53
Yeah, just so, and I was also hearing about some of the impacts of those rising prices. They come from a variety of sources, and really, the primary thing is just the pure volatility, really, in global trade right now. We've been tracking ripples in global logistics for some time that's being caused by these major events, like China's strict Covid lock downs, like, of course, the Russia-Ukraine war and those high oil prices. This week, one expert said that a better analogy than ripples for those problems would actually be to call it a traffic jam. So, this was from the German container, the German company called Container xChange, which tracks the flow of containerized goods, of course, and they said they're seeing delivery delays and reduced capacity on some of those cargo lanes, and it compared the cause of that to start-and-stop highway traffic that we've all been in. So, Christian Roeloffs—he's Container xChange's CEO—said it's almost like in a traffic jam: Some people stepped on the brakes really heavily, and the problem is that that will lead to a significant bulk up in demand for freight services, which will be essentially unleashed once factories reopen—he's talking about China there. And when demand is back, the carriers will again not have enough equipment on the ground, because not enough equipment went into China during the port lockdowns, and so not a lot of vessels are available, and that will push up prices once again. So, according to Roeloffs, that kind of cycle in global logistics will really not return to normal pace until all the various links in the chain begin to work in concert again. In his view, he said the way that you remove the traffic jam is not by stopping something violently and then hitting the accelerator again; it's more making sure that traffic flows at a certain speed.
David Maloney, Editorial Director, DC Velocity 21:49
Well, Ben, that sounds like good advice for the market overall, but how are individual companies faring?
Ben Ames, Senior News Editor, DC Velocity 21:55
Great question. It's one thing to talk about how to fix the market, of course, but in the meantime, even large firms are finding it really hard to forecast business conditions right now. As an example, the German logistics provider Kion AG—they make Linde and Still forklifts, and they own Dematic, the system integrator—so, a very large corporation. They said this week that they're withdrawing their 2022 fiscal outlook. Now, it had released that forecast just a month ago, but now, citing the military conflict in Eastern Europe and China's very strict Covid lockdown policies, the company said it expects that its first-quarter earnings and its free cash flow could fall significantly short of the same quarter last year. The reason is that Kion is struggling with a lack of parts availability and a sharp rise in material costs, and those procurement bottlenecks are likely to last much longer than previously anticipated, they said. Now, we should say the company said there's no reason to panic. They said their fundamentals are still good and expect its results to fall within market expectations, but, still, it goes to show, it's rough sailing out there.
David Maloney, Editorial Director, DC Velocity 23:08
Right, and it will take more than just a good compass, I think to keep everything on course. Thanks, Ben.
Ben Ames, Senior News Editor, DC Velocity 23:14
Glad to do it.
David Maloney, Editorial Director, DC Velocity 23:15
We encourage listeners to go to DCVelocity.com for more on these and other supply chain stories. And check out the podcast Notes section for some direct links on the topics that we discussed today.
And our thanks again to Kathy Fulton of the American Logistics Aid Network for being our guest today. We welcome your comments on this topic and our other stories. You can email us at podcast@dcvelocity.com.
We also encourage you to subscribe to Logistics Matters that your favorite podcast platform. Our new episodes are uploaded each Friday.
And speaking of subscribing, we encourage you to check out our new sister podcast series, Supply Chain in the Fast Lane, coproduced by the Council of Supply Chain Management Professionals and Supply Chain Quarterly. This past Tuesday we discussed the state of warehousing, and next Tuesday we'll look at the air freight market. Subscribe to Supply Chain in the Fast Lane wherever you get your podcasts, and be sure to catch up on the past episodes.
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We'll be back again next week with another edition of Logistics Matters, when we will look at the impact of China's zero-tolerance Covid policy on cargo movement, so be sure to join us. Until then, please stay safe and have a great week.
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