Logistics Charlie Zidek Managing Director SEKO Logistics State of Logistics 2014 Total Logistics Costs 145 Trillion Logistics Costs as a of GDP 83 Inventory Carrying Costs Increased 21 in 2014 ID: 290145
Download Presentation The PPT/PDF document "Hot Topics in International Business" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Hot Topics in International Business
Logistics
Charlie Zidek
Managing Director
SEKO LogisticsSlide2
State of Logistics
2014 Total Logistics Costs = $1.45 Trillion
Logistics
Costs as a % of GDP = 8.3%
Inventory Carrying Costs Increased 2.1% in 2014
Transportation Costs up 3.6%
- Strong
Shipment VolumesSlide3
State of Logistics
Trucking Capacity is Tight
Reduced Productivity Due to Regulations
Positive Economic Signs – GDP Growth, Unemployment and Labor Participation Rates
Strong Dollar – Lower Exports, Strong Imports
Interest Rates Still Low – Below 1%
Inventories Growth Slowed in 2014
Industrial Production Strong 2014
Retail E-Commerce Sales Continued Growth
Rail Demand Grew in 2014 – 4.5% (Highest on Record)
Freight Forwarding Revenue Up 5.4% in 2014Slide4
West Coast Issues
Port Congestion Caused Problems for Retailers and Manufacturers Across the Board
Underlying Issue at Ports Trucks, Chassis and Labor
Large Vessels Bringing More Cargo with in a Condensed Time with Equipment Shortage to Move Products
Congestion Created Longer Times for Drayage Companies – Making Lesser Turns per Day
Lack of ILWU Contract Contributed to Slowdown
US Importers Implemented Emergency Plans to Manage Critical Freight Destined to US –
Canada/Mexico
Air
East CostSlide5
Panama Canal As an Option
Panama Canal Expansion Purpose to Reduce Transit Time
$5.25 Billion Cost
Scheduled Opening 20015 – Now it is April 2016
Increased Vessel Size from 965 ft. to 1,200 ft. (Length)
Increased Width from 106 ft. to 160 ft.
5,000 TEU/Vessel to 13,000 TEU/Vessel
218% increase in Annual Tonnage
Today 66% US Bound Containers goes Through West Coast, 20% PC and 14 Suez Canal
Best Case 10% of Current West Coast Freight Could Shift to the PC by 2020 (Reality is 6-7%)
East Coast Port Competition will Increase – Rail, Truck, Chassis Shifting
East Coast Port Expansion will force Shippers and Carriers to Modify Strategies and OperationsSlide6Slide7Slide8Slide9
Tianjin Explosion
August 12, 2015
Tianjin
Shipping Point for Chemicals Used in Electronics Production
Electronics, Retail and Numerous Industries Will be Impacted
Explosion Happened at a Chinese Logistics Company
Over
173
People Killed, Hundreds Missing, 6,000 People Homeless
1.8 Square Miles Around the Blast Destroyed
Companies Lost Millions of Inventory
Product from the Region Trucked to Qingdao and Shanghai
Product Was Air Freighted to Arrive on Time for
4
th
Quarter
Sales Slide10
Tianjin Explosion What Have We Learned?
The Logistics Challenge
Manufacturers Have Inventories Destroyed
Lost Revenue
What is the Backup Plan?
Did The Organizations Have Redundancies?
Haven’t We Seen
This
Before?Slide11
Hot Topics in International Business
Logistics
Charlie Zidek
Managing Director
SEKO Logistics