October 11, 2013
Logistics a “Critical Issue” for Area
By Mary Mayle
Frank Casaine’s daughter came home from school recently with a questionnaire designed to help her determine what line of work she might want to pursue down the road.
“Of all the options listed on that paper, not one was in the logistics field. Yet we have one of the leading ports in the country fueling thousands of good logistics jobs right here in our own backyard,” said Casaine, distribution center director for Pier 1 Imports.
“If we want to draw the talent to grow our logistics industry here, that has to change.”
Casaine, along with Georgia Ports Authority’s Curtis Foltz and Jay Neely from Gulfstream Aerospace composed the panel for Thursday’s Savannah Critical Issues Forum on Logistics.
Rick Blasgen, president and CEO of the Council of Supply Chain Management Professionals, served as moderator.
“Last year, the cost of logistics in the United States alone was $1.3 trillion, representing some 8.5 percent of our GDP,” Blasgen said. “And as we slowly but surely come out of this tough economy, that number will be closer to 10 percent as we move more freight in and out of the country.”
Transportation remains the largest component of logistics costs at about $850 billion, he said.
Despite, or possibly because of, huge strides over the years, logistics still has serious challenges, Blasgen said.
“While logistics jobs are growing, the pool of qualified applicants is not,” he said. “And that’s at all levels.”
The shortages are particularly apparent in the transportation sector, Blasgen said, where 75 to 85 percent of goods still move by truck somewhere along the supply chain.
“You don’t hear kids these days saying ‘I want to grow up to be a truck driver,’ yet many of our current drivers are Baby Boomers getting ready to retire.”
Among the top trends in logistics is the return of manufacturing to the United States, with Caterpillar establishing a presence in Georgia and Apple and Lenovo announcing production centers in the U.S., for example.
“It’s great to see that happening,” he said.
Another major trend is e-commerce and the growth of online purchasing.
“Amazon is growing revenue by 30 percent a year and adding 18 new distribution centers around the country,” Blasgen said. “For a lot of companies, the newest trend is ‘order this morning, get it this evening.’ It’s crazy what’s going on out there.”
Citing statistics to support this need for almost-instant gratification, Blasgen said 74 percent of consumers will wait no longer than 5 seconds for a Web page to load before they leave it.
“We have the attention span of a gnat.”
Perhaps even more telling is that, by the end of this year, there will be more mobile devices on earth than people.
To stay ahead of the demand, companies have to invest in people, technology and the process, he said. “And we must continue to collaborate.”
To that list, Curtis Foltz would add infrastructure.
The executive director of the fourth-largest deepwater port system in the country, Foltz acknowledged that his organization was, in many ways, ahead of the game.
“We are fortunate in that we get great support across the board,” Foltz said. “There is no state that ‘gets’ logistics like Georgia. That support helped us get back to pre-recession levels in 2010.”
Nationally, Foltz said, the logistics industry faces an aging infrastructure, a lack of capacity at many ports and no national strategy to move the country forward.
Closer to home, GPA’s major issue can be summed up in one word — depth.
“We are the shallowest major port in the world, and it’s limiting our competitiveness,” he said.
After nearly 15 years of study, the U.S. Army Corps of Engineers got the go-ahead to deepen the Savannah Harbor from 42 to 47 feet last fall. The project now awaits congressional approval of the revised costs, which Foltz hopes will come by the end of the year.
The importance of logistics to Savannah-based Gulfstream Aerospace may not be as obvious as it is to the ports and companies like Pier 1, but it is critical, Neely told the group gathered at Savannah Technical College for the forum.
“While Savannah is our home, ours is an international business with a supply chain spread all over the world, from Tennessee and Texas to the Netherlands and Japan,” he said.
Gulfstream not only builds the world’s most advanced business aircraft, it also services them, requiring service and parts inventory centers around the globe, Neely said.
“So it’s easy to see how logistics plays a major role in our business.”
Sponsored by HunterMaclean in partnership with the Savannah Economic Development Authority, the Savannah Area Chamber of Commerce, the Georgia Center of Innovation for Logistics and the CSCMP of Supply Chain Management Professionals, Thursday’s logistics forum marks the 17th discussion in an ongoing series of major issues affecting the Savannah community.
