What does the future hold for logistics?

future for logistics

The COVID-19 pandemic has shown what an important component the logistics sector is to the world. At the end of May 2020, e-commerce sales achieved record growth (£2.1bn up from £1.3bn from the year before) as organisations adapted to coping in the challenging social and economic environment. According to the Office for National Statistics, the last and first time online sales broke the £2bn mark was in December 2019. As companies seek to make their supply chains more efficient, the adoption of digitisation, mechanisation and automation into operations is becoming more prevalent.

Having dealt with the unprecedented global circumstances well, the logistics industry will have to monitor the upcoming challenges that manufacturers face over the next 12 months. This is due to the current environment where the global demand for some products has diminished. It is expected that in the short-term, this will restrict the industrial space to reach the record levels of occupational activity that were anticipated in 2020.

According to Colliers International, it is expected that online demand will outstrip demand for warehouses. Consumers are thought to be more used to purchasing goods online and occupiers must be able to adapt accordingly, and will see supply chain models reviewed in a bid to scale capacity.

Demand for urban logistics has significantly increased over the past five years up until the outbreak of COVID-19. Due to the initial disruption, there was reduced activity for smaller distribution warehouses as some occupiers took a pause from their expansion plans. However, despite this, the market grew as larger distribution warehouses reached 100,000 sq.ft or greater during Q2 2020. Colliers expect demand for units sized between 30,000 sq.ft and 150,000 sq.ft located in proximity to urban town areas, will return as businesses transition from crisis management mode to future planning.

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Chick-fil-A and Starbucks Distributor to Move California Headquarters to Texas

Distributor to Move California Headquarters to Texas

A distributor to move its corporate headquarters to Texas from California to centralize its operations. The organization is a distributor to major restaurant chains such as Chick-fil-A, Chipotle and Starbucks.

Quality Custom Distribution is a part of Golden State Foods, and a global supplier to the quick-service restaurant and retail industries. The organization is leasing 10,784 square feet of office space at 2801 Network Blvd. in Frisco, Texas. Frisco is 27 miles north of downtown Dallas, for its headquarters. It sets the new office to open in January 2020.

The company expects some employees to move from California to Texas with the corporate headquarters. Also, they have plans to "provide a variety of new jobs," at the Dallas-area office.

The company has already begun posting job openings in Frisco, which include finance, accounting, customer service and purchasing positions. Quality Custom Distribution has 17 active job postings on online job websites. Officials were not immediately available to comment beyond a statement.

The move from Irvine, California, helps centralize the company's corporate operations. It better aligns and supports its distribution center market and its customers, said Ryan Hammer, corporate vice president and president of Golden State Foods Logistics.

The distributor to move from California Headquarters to Texas will grow its distribution network and secure its position as a main player in the food industry. The Dallas-area's central location, large talent pool, and business-friendly community fed into the decision to move to the North Texas region said, Hammer.

The company's distribution network includes two centers in Texas, one in the Dallas area and another in San Antonio. The Dallas-area location sits in Lancaster at 3900 N. Dallas Ave., which is 14 miles south of downtown Dallas. According to CoStar data, Quality Custom Distribution leases about 55,000 square feet of industrial space in the building.

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Ventus Global Logistics is strategically located in Laredo, Texas and specializes in land, air, and ocean freight. Ventus Global Logistics maintains a brokerage presence in all of Mexico's main customs offices. Get comprehensive data on your material inventory whenever you need it thanks to our web portal. Contact us today for a free consultation.

Warehouse or store? Picking the wrong place to unpack can cost you

warehouse or store

Retailers can see "considerable savings" if they unpack case packs (packages shipped by the supplier) into the individual consumer units at a distribution center before shipping the product to the final store, according to a 2017 paper published in the European Journal of Operations Research that focused on grocery retailers in the Netherlands and Germany. The amount of savings will vary depending on the SKU, and they are even greater if a model is used to determine the "optimal solution" for a given retailer.

The paper examined two different scenarios for a given SKU:

  1. Stores are sent case packs of the SKU and unload them onsite.
  2. Store are sent a custom number of consumer-level packaging units based on their inventory needs.

The researchers developed a model to determine the best unpacking location for a given SKU. This was then tested in a "hypothetical environment" that used data from a European retailer (referred to as Delta in the study), information on its current operations practice and cost data from a second retailer. When the researchers tested their model in the hypothetical environment, they found a 5.3% drop in the overall cost when the retailer moved from its current operating model to what the paper referred to as the "optimal solution."

The optimal solution in this paper was a model in which all stores follow the same unpacking method for a given product (either delivering case packs to the store or unpacking it into consumer units at the distribution center) depending on what is the lowest cost for all stores. Retailers must determine the lowest cost option for each product.

Marginally more cost savings were seen if each store used the unpacking method that reduced its individual cost (as opposed to the cost to the entire retailer) but this can be especially hard to put in place at the distribution center level, Rob Broekmeulen, the paper's author and assistant professor at the Eindhoven University of Technology, told Supply Chain Dive in an interview.

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Experts say Nuevo Laredo should focus on becoming a logistics and foreign trade hub

Laredo Texas

The Mexican border city of Nuevo Laredo should "bet more on logistics and foreign trade" than on attracting more maquiladoras, according to trade experts.

"Nuevo Laredo no longer needs to invest in maquiladoras, because it is a city more oriented towards customs and services," said Cirila Quintero, a professor at El Colegio de la Frontera Norte (College of the Northern Border) in Tijuana, Mexico.

The college is a prestigious Mexican institute specializing in teaching and research on border issues. Quintero specializes in the research of Mexico's maquiladora industry.

Quintero was part of a recent study conducted by the Mexico City-based Economic Information Bank (BIE), which indicated in recent years the number of export maquiladoras in Nuevo Laredo has decreased.

Quintero said one reason not to rely too heavily on maquiladoras for economic growth in the future is changing technology.

"I think that if local governments want to bet on the maquiladoras, they should understand that the maquiladoras have already changed and are something else," Quintero said in an interview with Primerahora.com.

Quintero added, "the only ones [maquiladoras] that are going to exist are the ones that are going to export, and many of those are going to be robotized, and the point is that if you want to invest in maquiladoras, you should no longer see them at the local level, but in the case of Nuevo Laredo you have to see Laredo, Texas, and see which sectors in Laredo are developing the most."

Nuevo Laredo – located directly across the U.S.-Mexico border from Laredo, Texas – has 35 maquiladoras that employed 29,878 workers, according to the BIE study. In contrast, in the Mexican cities of Reynosa and Matamoros, maquiladoras are still trending upward.

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Ventus Global Logistics is strategically located in Laredo, Texas and specializes in land, air, and ocean freight. Ventus Global Logistics maintains a brokerage presence in all of Mexico's main customs offices. Get comprehensive data on your material inventory whenever you need it thanks to our web portal. Contact us today for a free consultation.

U.S. Senators introduce $287 billion highway bill

$287 billion highway bill

A $287 billion highway bill proposal reauthorizing funding to maintain and repair the country's roads and bridges includes a first-ever title addressing carbon emissions and supporting electric vehicle infrastructure.

The legislation, a five-year reauthorization of the Fixing America's Surface Transportation (FAST) Act to be called America's Transportation Infrastructure Act of 2019, was introduced on July 29 by the Senate Environment and Public Works (EPW) Committee. The proposed funding for federal-aid highway programs is a 27 percent increase from the $226 billion authorized in the current legislation, which expires in October 2020.

"The [EPW proposal] is the most substantial highway infrastructure bill in history," said the committee's chairman, John Barrasso (R-Wyoming). "The bill cuts Washington red tape, so road construction can get done faster, better, cheaper and smarter. It will help create jobs and support our strong, growing and healthy economy. Infrastructure is critical to our country and we should responsibly pay for this legislation."

Tom Carper (D-Delaware), the committee's ranking member, said addressing air pollution in a highway bill will help move the country "toward a safer, more connected, efficient and climate-friendly transportation system" to keep up with the global economy.

"We're just getting started, but I look forward to moving this bill out of committee this week and the work ahead of us to get it across the finish line." The bill must be paired with a version from the U.S. House of Representatives that is not expected to be introduced until the fall of this year, at the earliest.

The Senate legislation increases funding for the Infrastructure for Rebuilding America (INFRA) grant program for freight projects to $5.5. billion, a 22 percent increase from the $4.5 billion authorized in the FAST Act. It increases the minimum amount of INFRA funds to go towards smaller projects from 10 to 15 percent, and sets aside $150 million per year for a pilot program that prioritizes projects offering a higher non-federal match. It would also create new transparency requirements for administering the grants.

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Transportation Secretary Elaine Chao Stresses Benefits of Long-Term Highway Bill

Secretary Elaine Chao

June ended with the country's top transportation officer emphasizing that a multiyear highway policy directive from Washington is more beneficial to state agencies than a series of short-term extensions of federal guidelines.

Secretary Elaine Chao drilled down on this point, admittedly obvious to stakeholders, during an in-depth conversation with Hugo Gurdon, editor of The Washington Examiner, on June 26.

"The general pattern is in fact to just have extensions, not full reauthorization. But clearly, the certainty of having a longer time frame is very important to those who are involved in infrastructure," said the secretary, sitting across from the journalist on stage at the Heritage Foundation. "State and local governments, you know, if they know they're going to have this money for five years rather than six months, they can actually plan for the future. So a longer-term horizon is better."

The conservative think tank is a few blocks from the Senate side of the Capitol, where the surface transportation panel on July 10 ideally will kick off the obvious task of determining a strategy for reauthorizing surface transportation policy. The current highway law expires in less than 15 months.

By now, a consensus has been established inside the Beltway that advancing comprehensive infrastructure policy is unlikely this year. Separate press conferences in May from President Donald Trump and Speaker Nancy Pelosi announcing their failed negotiations on a $2 trillion infrastructure measure cemented the notion that top-level infrastructure talks had collapsed.

Since then, Trump has focused on immigration policy. Pelosi has pressed forward with investigations into Trump's political and business worlds. The Republican leadership in the Senate has not proposed an infrastructure measure during Trump's tenure.

Reacting to Gurdon's suggestion that comprehensive infrastructure policy would not advance in the foreseeable future, Chao exclaimed, "I haven't given up hope yet."

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Making the Autonomous Supply Chain a Reality

Supply chain

Supply chains are evolving in the face of greater customer demand, soaring expectations, and endless purchasing opportunities. Retailers, manufacturers and third-party logistics companies are having to move quicker and produce more with shorter turnarounds and greater transparency. Companies are digitizing their supply chains to meet these new challenges, but this alone isn’t enough to answer the questions businesses are asking every day: what’s going to happen tomorrow, next week, next month and next quarter?

An autonomous supply chain can help businesses respond with immediacy and decisiveness. This technology is designed to deliver on-demand, navigate disruptions months in advance and help keep your business ahead of any changes in customer buying behavior. The three core tenants for an autonomous supply chain are:

Reading the signals

The more information a business has access to and uses, the more it can help understand any changes in supply and demand. In the past, the main challenge was having the processing capability necessary to collect reliable data and harness it to represent the realities of changing conditions. The capacity to measure and recognize external conditions is critical to predicting supply and demand. The autonomous supply chain requires a significant increase in external signals, which relies on the reporting of evolving climate and market conditions in real time.

So how can you read the signals? Using artificial intelligence (AI), machine learning (ML) and IoT, you can manage and interpret signals such as weather events, temperatures jeopardizing fresh products and any online social trends influencing customer demand. Businesses need to make use of as many signals as possible, because if dimensions are missing it will difficult to get a clear picture.

It sees everything

To truly understand their entire supply chain, businesses need to manage the complexity and volume of intelligence — billions of pieces of information that are time-stamped with their own varying amounts of information. Let’s set the stage: imagine sensors inside a lorry, which is on its way to deliver fresh goods to a grocery retailer. Sensors are able to detect the temperature inside and outside of the lorry, the speed it is travelling at, and if there are any road works which will slow the delivery down. Every detail is pinpointed with time and date stamps.

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Mexico Trade Spurs Largest Regional Spec Build

Laredo, TX

Laredo, TX is the third largest port in the U.S. after Los Angeles, and New York City and 60% of U.S. / Mexico trade occurs in Laredo, TX. Last year trade in Laredo surpassed $300 billion. This robust trade has driven the need for the largest regional class-A industrial spec space to be developed. It is no wonder why international companies are looking to Laredo to establish logistics operations.

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Published in GlobeSt.com