So, it’s not surprising that Canada, Mexico, and the United States are among each other’s top trade partners. Canada and Mexico have been one of the top three merchandise export markets for 49 states in the United States, the U.S. Chamber of Commerce reports.

“Cross-border trade with respect to Mexico, the United States, and Canada is more relevant than it ever has been. We have a stable geopolitical environment, free trade, and half a billion people between the three countries,” says David Cox, chief executive officer of Polaris Transportation Group, a provider of less-than-truckload (LTL) service between Canada and the United States, and other services. Each of the countries also boasts an educated workforce, making cross-border trade even more efficient, Cox says.

The focus on business opportunities within North America has grown over the past few years. “After 2008, we saw a lot of companies open up shop across the world, but predominantly Asia,” says Andreea Crisan, president and chief executive officer with ANDY, a provider of transportation and supply chain solutions, based in St-Laurent, Quebec.

For example, annual foreign direct investment (FDI) into China grew from around $40 billion in 2000 to $124 billion in 2011, and then growth rates dropped. In 2022, FDI into China hit about $189 billion—a massive number, but up just 4.5% from the previous year.

Rising costs for shipping, labor, and other expenses, along with the push for sustainability, have prompted companies to consider a wider range of countries when locating operations. Many organizations based in North America are assessing opportunities closer to home.

“It’s a natural transition, given all that’s going on, to come back on to the North American continent,” says Crisan. It’s also good for the planet to manufacture closer to the market for a company’s products, cutting the distance items have to be transported, she adds.

A growing number of U.S. companies are turning to nearshoring, typically in Mexico, for greater visibility, shorter delivery times, and a greater ability to influence the quality of their products, says Jose Minarro, managing director with Sunset Transportation’s Cross-Border Operations.

Mexico’s proximity to the United States, its availability of skilled labor, competitive labor costs, favorable trade conditions, and tax exemptions make it attractive for manufacturing, he adds.

The shorter transportation times are especially significant for products that are seasonal and/or time sensitive, like fashion items, says Jerry Haar, professor of international business at Florida International University. In addition, by shifting some operations from other parts of the world to Mexico, companies diversify their supply chains, lowering risk, he adds.

Boosting Nearshoring Benefits

Trade agreements between Canada, Mexico, and the United States further boost the benefits of nearshoring and cross-border trade. The most prominent, the United States Mexico-Canada Agreement (USMCA) went into effect July 1, 2020, replacing the North American Free Trade Agreement (NAFTA). The USMCA contributes significantly to stability in rules and norms, reducing the risk to trading and investing across North America, Haar says.

The USMCA allows for a wide variety of duty-free items that can be exchanged among the United States and Mexico, Minarro says. An added benefit: Many manufacturing companies that set up shop in Mexico end up selling a portion of their production into the domestic market of approximately 130 million people, he says.

Surging Trade

“Since the inception of USMCA, trade throughout North America has experienced a surge, accompanied by a substantial uptick in investment within industries capitalizing on this opportunity,” says Rachel Honbarger, project manager with Tompkins Solutions, a provider of supply chain solutions.

In 2022, exports of U.S. goods with the USMCA were $680.8 billion, up 16% from 2021 and a 34% jump from 2012, according to the Office of the United States Trade Representative. Imports of goods through the USMCA also grew, rising 20.5% between 2021 and 2022, to total $891.3 billion.

Cross-border trade and nearshoring within North America offers companies based in Canada, Mexico, and the United States greater opportunity for profit and growth. At the same time, companies need to consider potential risks.

One is potential changes to trade agreements or policies. Even minor adjustments can profoundly affect the functionality or expenses associated with operating such a supply chain.

An example is recent efforts by some policymakers to amend aspects of Section 321, which allows many imported items to enter the United States free of duties and taxes, so long as the aggregate retail value of the products imported in one day and exempted from the payment doesn’t top $800. A slight modification to the scope of duty-free exemptions could lead to substantial shipping expenses, making nearshore distribution economically unviable, Honbarger says.

In addition, locating manufacturing operations across the border from distribution networks increases transportation expenses due to tariffs, longer travel distances, and a rise in shipment volumes to compensate for extended travel times.

Pulling Off Cross-Border Operations

Executing a cross-border operation requires complex technological integration to ensure seamless oversight and control of the entire supply chain process.

Without this, businesses face potential product loss, challenges in restocking distribution centers or meeting customer demands, and expenses stemming from inadequate visibility into operations.

Achieving the benefits of cross-border trade and nearshoring within North America—including increased profit and accelerated growth—demands an in-depth knowledge of the relevant regulations and documentation requirements to minimize the risk that shipments are held up by the authorities.

Working with a logistics provider with expertise and a commitment to this trade area is essential. “We’re in a 24-hour industry,” Cox says. Partnering with a quality broker that can support its clients around the clock cuts the chance of border mistakes and delays, he adds.

These providers can help shippers navigate trade across North America.

ANDY: High Standards and Customized Services

Supply chain solutions provider ANDY is well equipped to manage cross-border shipments, relying on its experience and expertise on the processes and requirements.

From its start with a single, burgundy-colored delivery truck, ANDY has grown into one of the 250 largest fleets in North America, as well as one of the fastest growing companies in Canada.

It also holds the distinction of being one of a handful of women-owned companies in the supply chain and transportation sector. “We try to empower women and place them in pivotal roles where they’re decision makers,” Crisan says.

At the same time, the men who are part of ANDY also contribute to its success. “Great men work here as well,” Crisan says. “It’s a diverse place. Our success boils down to our company culture.”

The culture has helped fuel ANDY’s tremendous growth since its start in 2001. That’s when Crisan and her father, Ilie Crisan, emigrated from Romania to Canada. A former bus driver, the older Crisan tried to find a job as a truck driver in Canada but was unable to. With savings running low, he purchased his own truck and got to work. “That’s how it started,” Crisan says.

Then 11 years old, Andreea Crisan has been key to ANDY’s growth. Among other responsibilities, she helped her father translate documents. “I grew in parallel with the company and so did my responsibilities,” she says.

ANDY now operates out of 15 locations across Canada, including eight terminals that are CTPAT and PIP certified, as well as a fleet of about 300 trucks and 800 trailers.

Its clients range from industrial and natural resource firms to retailers and manufacturers, and they can choose from drayage, transportation, logistics, distribution, and warehousing, and other transportation and logistics services.

Shippers also can choose from flatbeds, less-than-truckload and full truckload, and dedicated transport, among other options, as well as brokerage, warehousing, cross-docking, and other services. “We can act like a one-stop shop,” Crisan says. All trucks are outfitted with live tracking technology, providing clients with visibility into the movement of their shipments. They also can assess performance through reporting and analysis.

Building Cross-border Expertise

Since its earliest days as a company, ANDY has been handling cross-border shipments. “We’re experts on the processes and requirements, and well equipped to manage cross-border shipments, so there are no delays,” she says.

Because of its commitment and responsiveness to its clients, ANDY earned all the transportation business of one of its clients, in a dedicated contract arrangement. “We’ve become this company’s outsourced, dedicated private fleet,” Crisan says. For this company, ANDY provides planning, cross-docking, and daily deliveries and other services.

It’s an important and challenging role, and ANDY is more than up to the task. Because the client ships every day, its customers can place orders until late afternoon, and be confident their products will be shipped the next day.

“That’s our client’s promise to its customers, and our partnership makes us a very integral part of that promise,” Crisan says. Through the dedicated contract arrangement, the client gains quality service, predictability, and cost savings, she adds.

To achieve these benefits, ANDY worked with the company to truly understand its needs, and then tailored its services to meet them. “It’s a true partnership, and we’re working together to provide the services that can help our client achieve its objectives,” Crisan says.

Polaris Transportation Group: Customer-Focused Logistics Specialists

Along with its cross-border service, Polaris Transportation Group offers third-party logistics, warehousing, distribution, and supply chain management services.

Over the past three decades Polaris, one of the largest privately held Canadian LTL carriers, has moved 6 million shipments between Canada and the United States. “At Polaris, our principal activity is quick, transparent, cross-border transportation,” Cox says.

To ensure it can continue providing this, Polaris has cultivated an in-depth understanding of customs regulations, as well as strong relationships with customs and border protection agencies in both Canada and the United States, Cox says.

He and his team also have been very deliberate in investing in technologies that enable Polaris’ clients to work in a digitally transparent fashion.

Polaris ships a range of commodities, with a specialization in dry goods and high-value products. It also works in all transport modes. Along with its cross-border service, Polaris offers third-party logistics, warehousing, distribution, and supply chain management services.

Customers come in all sizes. “Smaller companies may move a handful of shipments a month, but those shipments impact their business, their well-being, and their reputation. I am equally in love with those businesses as much as I am the larger ones,” Cox says.

Four companies make up Polaris; three are Polaris Transport, Polaris Global Logistics, and Polaris Commercial Warehousing. In 2019, with the launch of NorthStar Digital Solutions—the fourth Polaris company—the head office housed a state-of-the-art digital lab. Among other initiatives, NorthStar Digital Solutions has explored artificial intelligence and machine learning, enabling it to continue searching for efficiencies within its processes.

Making Strategic Investments in Technology and Workforce

Polaris has also invested in robotic processing automation, artificial intelligence, and blockchain. By deploying a mobile driver application (FR8Focus) and integrating it into their TMS, clients can check the location of their freight through the customer portal in real-time.

“Everyone wants to know where their shipments are. This needs to be transparent,” Cox says. That holds true even when Polaris is working with supply chain partners, such as other carriers. “It’s seamless, transparent, and digital,” Cox says.

The use of systems like intelligent document workflow for order entry, accounts payables, and other functions, offers a “wealth of insight that enables the Polaris team to focus on managing complex situations,” Cox says.

Polaris operates a consolidation program for several U.S.-based clients that are shipping products to Canada from various regions within the United States. For this program, Polaris directs the companies’ shipments to a hub in the central United States, and then transports the cargo across the border on a single trailer.

“Shippers gain savings and certainty,” Cox says. They can be confident of the date their inventory or merchandise will arrive in Canada. This is harder to predict when products move in a piecemeal fashion.

Along with technology, Cox has been deliberate about searching for top employees, implementing best-in-class processes, and making sustainability a foundation of Polaris. “Whether it’s the environment or the social issues that affect business and the communities we’re working within—these are important to me as a business owner,” he says.

Sunset Transportation: Family Roots and Global Reach

Sunset Transportation offers all the services shippers need to conduct cross-border trade, from import/export transportation management to warehousing and transloading services.

The employee roster at Sunset Transportation includes a farmer, an Emmy winner, an Arabic speaker, a hometown pageant queen, and an amateur tractor pull competitor, along with several military veterans. The range of interests and experience among Sunsetters, as the employees are known, mirrors the broad roster of transportation and logistics services Sunset offers.

Sunset Transportation was founded in 1989 by Jim Williams. However, Sunset traces its start to 1861, when Jim Williams’ grandfather opened Williams Paper Company, which remains in operation today. Williams Paper Co. expanded its operations in 1970, when Jim Williams began managing the business’s fleet of trucks and established a thriving backhaul program.

In 1989, Sunset Transportation launched. In 2022, Sunset joined Armada Supply Chain Solutions, a food and restaurant logistics company.

For companies looking to do business between the United States and Canada, Sunset offers transportation services in all 10 Canadian provinces. It also provides import/export transportation management, truckload and LTL service, international export and import management, customs filing and management, financial support of goods and services tax (GST), and warehousing and transloading services. “We offer everything you need for cross-border trade,” Minarro says.

Working Between Mexico and the United States

Sunset also provides expertise and services for companies looking to trade between Mexico and the United States.

To help clients streamline their supply chains, Sunset takes a strategic approach to mapping their flows for inbound and outbound shipments, analyzing historical shipping data to identify sustainable opportunities to optimize freight, enhance service, save money, and improve technology. Using this insight, the Sunset team then presents a cross-border logistics solution that incorporates all the services needed for a streamlined supply chain.

In 2019, Sunset added a branch office in Laredo, Texas, offering cross-border logistics and border warehouse solutions. This was bolstered in 2021 with the opening of a cross-border office in Querétaro, Mexico, which includes an airport customs office, as well as a sales office.

Today, Sunset Transportation offers a range of services, including expedited freight, cross-border and customs solutions, international logistics, logistics management, and domestic, Mexico, and drayage carrier solutions. It also provides a comprehensive line of customs, warehouse, and freight brokers.

As important, Sunset internally handles every link of its supply chain services. “We don’t outsource customs and compliance functions,” Minarro says.

With CTPAT-certified warehouses in Laredo and Nuevo Laredo, Sunset can offer shippers solutions that keep them CTPAT-compliant from a warehousing and transloading perspective.

Sunset Transportation continues to innovate and adapt. Over the past three years, the company has collaborated with companies from Europe, Asia, and North America that are looking to establish new operations in Mexico. “Different industries, but all have the same goal: choose the best location within Mexico to manufacture a finished product or sub assembly that will be shipped into the United States,” Minarro says.

The Sunset team interacts with the customers from the planning stage onward and takes a holistic approach with every engagement.

“The deliverable at the end of the process is to provide suggestions on how to set up the logistics strategy, incorporating import and exports flows, technological requirements, and process automation,” Minarro says. “We listen to our customers and their needs, in addition to listening to the market, so we can provide the best, most efficient, and tailored solutions for our customers.”

One thing stayed the same: Alaska remains a broad region presenting an array of unique logistics challenges. “I like to say that if you can manage logistics to, from, and within Alaska, you can manage logistics anywhere in the world,” says Dr. Darren Prokop, professor emeritus of logistics in the College of Business and Public Policy at the University of Alaska Anchorage.

Resourceful and resilient logistics professionals are meeting Alaska’s challenges, handling logistics over the roughest terrain, and the state is significantly better for it. “Alaska’s socio-economic fabric is highly dependent on logistics,” Prokop says. “The largest state in the United States (more than double the size of Texas) is separated from the rest of civilization and surrounded by the vast Pacific and Arctic oceans and the Yukon wilderness.”

While it is one of the country’s least populous states, Alaska’s population is widely dispersed across an environment subject to earthquakes, tsunamis, volcano eruptions, blizzards, and floods. “On top of all that, Alaska’s transportation infrastructure is concentrated in the center of the state between Anchorage and Fairbanks,” says Prokop. Given the population concentration, the Port of Alaska has become the principal gateway for large-volume freight deliveries to those cities.

Alaska’s distinctive configuration means logistics professionals must know their way around and through the state’s demanding land and water obstacle course. “You can’t fake logistics,” Prokop says. “Either the shipment is on time, or it isn’t. This is especially crucial for Alaska.”

About 90% of Alaska’s inbound freight arrives by water. The Port of Alaska’s share of this serves about 85% of all Alaskans. “Importantly,” Prokop says, “of the amount that arrives in Anchorage, only half is for local residents.”

Navigated by specialists experienced in the logistics challenges of Alaska, freight makes its way to the state’s bustling cities as well as remote villages and towns. (The state’s name is derived from the Aleut word “Alyeska,” literally meaning “the object towards which the action of the sea is directed.”)

Feeding the Flow

The state’s own abundant natural resources are shipped throughout the world. For example, Alaska’s fisheries—the source of such delicacies as halibut and king crab—are in the world’s most treacherous waters.

Additionally, “Alaska’s oil helps power the nation and is transported from one end of the state to the other by the 800-mile engineering marvel known as the Trans-Alaska Pipeline System (TAPS),” notes Prokop.

The state’s impressive logistics infrastructure includes highly valuable assets such as Ted Stevens Anchorage International Airport, one of the top air cargo facilities in the world. The airport’s geographic advantage is that it is within 9.5 hours flying time to 90% of the industrialized world. Being at the center of the great circle route between U.S. and Asia markets, it is not surprising most cargo planes stop in Anchorage to refuel.

“Apart from this geographic advantage is the airport’s operational advantage,” Prokop adds. “Its special air cargo transfer rights are unique to the airport and these allow foreign planes to transfer their cargo between them. It is a variation of a form of trade liberalization known as cabotage and it makes a rare example of unilateral trade liberalization by the United States for the benefit of Asia-Pacific trade flows.”

Meeting All Tests

Span Alaska moves more than 400 million pounds of freight annually throughout Alaska, offering chill/freeze services for perishables, food and beverage, and medical/pharmaceutical shipments.

The transportation and logistics infrastructure of Alaska has been tested over time and terrain, and through all types of severe weather, yet it remains resilient and able to serve all Alaskans, no matter how central or remote they are.

“The transportation infrastructure is one of the most resilient—and geographically dispersed—in the country,” says Michael Johnson, president of Span Alaska, which connects Alaska to the rest of the United States, and the world, with a weather-tested transportation network over land, sea, and air.

“Due to Alaska’s size, its weather, and lack of road infrastructure, delivering products can be complicated and challenging,” says Johnson.

But as the state’s largest freight forwarding company transporting freight and shipments to, from, and around Alaska, Span Alaska meets the challenges and ships more than 400 million pounds of freight annually throughout the state. The company utilizes ocean container service, barges, and trucks ranging from semi-trailers to step vans, flatbeds, and air and rail service to deliver to its customers.

Span Alaska, launched in 1978, opened the largest DC and service center of its kind in the state in Anchorage in 2019. The facility has 88 dock doors, a lay-down area for breakbulk cargo, and an in-house maintenance shop.

Expanding Services

In 2023, the company opened a new and expanded service center in Fairbanks, Alaska’s second-largest city. Span Alaska has additional service centers in Wasilla, Juneau, Soldotna/Kenai (in the Kenai Peninsula Borough), and Kodiak.

Span Alaska direct loads containers to service centers from its consolidation center in Auburn, Washington, near the Port of Tacoma. “That means customers’ shipments are loaded into shipping containers destined directly for one of the six service centers or the Anchorage air cargo facility,” Johnson explains. “This eliminates rehandling and costly delays. The shipments are not rehandled or devanned and reloaded along the way.”

Span Alaska offers expanded chill/freeze services for perishables, food and beverage, and medical/pharmaceutical shipments.

The company offers Keep From Freezing (KFF) options, usually from late September to April, for products that would be compromised or damaged if they freeze in transit.

Johnson is enthusiastic about Alaska and Span Alaska’s place in it. “Alaskans live here because they love the natural beauty, the wilderness steps from their door, access to fishing, hunting, and hiking, and the pristine environment,” he says. “Whether they are in metro cities or a remote bush village, they need reliable availability of food, clothing, and everything else for everyday life. Because of the commitment and service of Span Alaska and other logistics providers, Alaskans can enjoy the same access to goods and services that those in the Lower 48 have.”

Span Alaska continues to invest in technology and provides instant tracking and delivery confirmations. “Shipment visibility is vital for customers, especially as their products can be shipped via several modes—ocean, road, rail, and air,” he adds. Span Alaska offers delivery throughout Alaska, from metro Anchorage to the North Slope to remote villages in the bush.

Customized solutions are available for the commercial and industrial sectors, including oil and gas, construction, food and beverage, and retail/tourism.

Making Tracks

Alaska Railroad provides critical freight service, bringing freight from the lower 48 states through its gateway of Seattle, Washington, and into the port of Whittier, Alaska.

Contributing mightily to the transportation and logistic solutions of Alaska is the Alaska Railroad, which provides passenger service to most of the population with routes traveling some 500 miles between Seward, Anchorage, and Fairbanks.

The railroad also provides critical freight service, bringing freight from the lower 48 states through its gateway of Seattle, Washington, and into the port of Whittier, Alaska.

“We operate two distinctive services to meet the needs of the people and business in Alaska—rail freight and passenger service,” explains Dale Wade, the railroad’s vice president, marketing and customer services. While best known for its passenger service, Alaska Railroad freight is the larger of the railroad’s two business segments.

“The Alaska Rail Marine Barge, operated under a long-term contract to the Alaska Railroad, connects the lower 48 states to Alaska via a port operation just a stone’s throw from downtown Seattle on Harbor Island,” Wade says. “There, rail carloads that originated deep in Texas and Mexico move seamlessly without transloading onto a rail barge for the seven-day trip to Whittier, a few miles from Anchorage. This is the most cost-effective way to move container and full railcars to and from Alaska.”

Maintaining a Critical Energy Link

The railroad is mindful of its responsibility to the critical chain of the energy and mining industries as well as to consumers in the expansive commerce center of Alaska, says Wade.

While the challenges presented by the state’s terrain are numerous—including extreme cold, flooding, rockslides, and avalanches—Wade says there are no obstacles the railroad cannot overcome.

“Because we are remote, we don’t rely on third-party services that are available to railroads in the lower 48 states,” he explains. “If it happens, we handle it. This requires us to be prepared, well-planned, and extremely resourceful.”

A common misconception is that the Alaska Railroad is connected to the lower 48 states via a railroad in Canada. “While there have been several big resource projects that have looked at building a connection between the Alaska Railroad and the Canadian National Railway, none has taken the process beyond the planning phase,” he says. “The barge connection between Harbor Island, Washington, and Whittier, Alaska, continues to be the only method to get railcars to south central Alaska from the lower 48.”

Unless delayed by weather or other circumstances, the barge sails weekly on Wednesday and arrives in Whitter one week later. Each barge can carry 40-50 railcars.

Due to current demand, the Alaska Railroad has contracted an extra sailing every Friday in addition to the weekly scheduled sailings.

The future of the Alaska Railroad promises to be as rewarding as its past. “We just completed our centennial year in 2023,” Wade says. “The first 100 years were both challenging and exciting. The next 100 years will bring so many more opportunities for us. Alaska is rich in culture and resources but has limited infrastructure. No doubt our next chapter will be about expanding the system in a responsible and sustainable way to meet market demands as they arise.”

Flying High

Alaska Air Cargo serves 20 communities across Alaska and is set to launch a dedicated freighter service between Anchorage and Los Angeles, through Seattle, in spring 2024.

Alaska’s air carrier infrastructure is vital so that both passengers and essential cargo can be transported into remote communities. Playing a crucial role in transporting people, products, and supplies to and from Alaska is Alaska Airlines, the fifth-largest airline in North America when measured by scheduled passengers carried. Through its airline partners and the oneworld global alliance, Alaska Airlines passengers can travel to more than 1,000 destinations on more than 20 airlines.

Headquartered in SeaTac, Washington, just outside Seattle, Alaska Airlines is now the only passenger airline in the United States with dedicated cargo planes, and it connects with large international and integrated carriers to carry ecommerce goods and other critical supplies into and around Alaska. Alaska Air Cargo is the largest scheduled cargo carrier in the Frontier State.

Alaska Air Cargo’s growing freighter fleet will expand its reach to Los Angeles (LAX) in spring 2024—the first time its dedicated freighters, which serve 20 communities across the state of Alaska, will connect to cities beyond Seattle (SEA) in the lower 48.

The two newest 737-800BCF freighters can carry 10,000 more pounds than the airlines’ three 737-700 freighters. Many of the groceries, household goods, and essential medicine shipping into the state of Alaska come from Southern California, and this new freighter route will streamline that supply chain, says Adam Drouhard, managing director for Alaska Air Cargo.

The bigger freighters will also be in full service in time for the height of the salmon fishing season, allowing fresh sustainable sockeye from Bristol Bay and other fisheries to reach markets across the lower 48 more quickly. “We are excited to build on our long history serving the state of Alaska and forge new connections between communities there and cities across the United States,” Drouhard says.

More freighters in the schedule serving the state of Alaska will also improve the reliability of that service. “Our markets in the state will get more dedicated service that’s not shared,” Drouhard says. “We’ll be able to spread that schedule across more aircraft.”

Bethel (BET), Juneau (JNU), and Sitka (SIT) will be among the first communities to benefit from the bigger freighters and more frequent service. The aircraft’s expanded range also will allow the cargo team to explore other new routes, such as a possible nonstop from King Salmon (AKN) to Seattle.

Prospects for continued growth are excellent, especially against the backdrop of the state’s overall logistics strengths. For example, Alaska Air Cargo’s services are facilitated by Ted Stevens Anchorage International Airport, which has long played an integral role in the growth of Anchorage and the state.

The airport’s geographic location provides unlimited potential for moving goods, services, and infrastructure to be used in the global marketplace. For Alaska Airlines, that means easier connections from rural Alaska to global markets, which is particularly important for the efficient and fast export of wild Alaskan seafood. There is potential for ecommerce and other goods coming into the state to be transported around Alaska more quickly as well, which is very good news for communities that are not on the road system, allowing faster delivery of goods around the state.

Seeing Possibilities for Innovation

Where others may see only roadblocks, the logistics specialists at Lynden—a family of companies providing transportation and logistics solutions in Alaska, as well as Canada, the Pacific Northwest, Hawaii, and around the world—see opportunities to create innovative solutions.

“Alaska logistics are different, but not insurmountable,” says Alex McKallor, Lynden’s executive vice president and COO.
Offsetting the state’s logistics challenges is its strategic location, offering literal and figurative “top-of-the-world” access to Asian, European, and North American markets.

“The strategic location of Alaska is very advantageous,” McKallor says, emphasizing both its air cargo assets and its “incredible” coastline.

“Alaska has over 6,000 miles of coastline, and if you count the islands, almost 50,000 miles of actual coastline,” he notes. Some 2,670 named islands help contribute to Alaska’s rank as the state with the largest land mass in the United States.

“Alaska’s coastline’s proximity to its natural resources is a tremendous advantage,” McKallor says. “Our business model is built around filling the gaps in infrastructure, which reaches only a small fraction of the vast area of Alaska.

“We build our business strategy around filling those gaps in the best way possible. Where you don’t see a road, you see a marine, air, or another solution. We use interesting things like PistenBully snowcats (used in heavy snow and ice), hovercrafts, and Hercules aircraft to access areas unreachable by other methods.”

Lynden’s experience in Alaska is applicable in other hard-to-navigate places too. “Some of these issues are not necessarily unique to Alaska,” McKallor says. “What makes us especially effective is that as an asset-operating transportation company we know the pitfalls and risks of proposed logistical plans. What may be theoretically possible may not be practically possible and have a high risk of failure. If a certain part of the plan for a logistics project doesn’t pan out it could have catastrophic effects on the success of the project.”

In those instances, Lynden has the practical knowledge and ability to turn to alternative methods. “That’s where we add a lot of value when it comes to advice and helping customers,” he says.

Looming energy and mining projects bode well for Alaska’s continued strategic importance throughout the world. “We’re bullish on Alaska,” he says. “Alaska is very well positioned to be a critical natural resource supplier, especially with the focus on trying to develop secure supply chains for strategic minerals.”

He refers to the current era as “the century of the Pacific,” and he believes the next five years will see greater investment in the energy and mining sectors. “Our focus is to support these projects wherever we can.”

“Large projects with large swings in volume can be disruptive to existing supply chains,” McKallor says. “The most important thing to Lynden is to make sure we can continue to serve our existing customers with reliable service.”

Fortifying the Future

Alaska’s presence as an American state gives the country an enhanced definition. “Alaska makes the United States an Arctic nation,” notes Prokop. “As such, it is on the frontier of the wealth of resources that are being discovered in the Arctic Ocean. In the decades ahead, Alaska will also play a major role in opening the Arctic to transportation via the Northwest Passage and the Northern Sea Route.”

He is proud the University of Alaska Anchorage contributes to the state’s assets through its logistics and supply chain management programs.

“We teach students how to plan well and use their imagination,” he says. “It took a lot of imagination and daring to build Alaska into the logistics powerhouse it is today.”

Alaska on Top of the World?

Myths about Alaska are as vast and meandering as the area itself. Much of the confusion arises from the state’s appearance on a typical map of the world, says Dr. Darren Prokop, professor emeritus of logistics in the College of Business and Public Policy at the University of Alaska Anchorage.

Where is Alaska? Most people would likely answer the question after conjuring up a map in their heads, Prokop says. They might say: “Alaska is at the top of the world.”

Well, everyone does say that, even many who regularly write about the state. Not so?

“Well, they would be right—but only to the extent that a flat earth wall map is an accurate depiction of a round, three-dimensional earth,” Prokop says. “With apologies to the Flat Earth Society, such maps are not accurate. There is no ‘top’ of the world. In fact, Alaska is equidistant between the major population centers of Far East Asia and the Lower 48 if one travels the shortest distance between them. But one could never tell that by looking at a wall map.”

In this case, the reality is better than the myth.

“The consequence of these ‘great circle routes’—the shortest distance between two points on a sphere—is that all airplanes using them would fly over Alaska,” Prokop says. “Also, ocean vessels traveling from Asian ports to those along the U.S. West Coast use shipping lanes that follow great circle routes which are not too far off Alaska’s shores.”

So, perhaps surprising to those who are not logisticians, a more accurate answer to the question is: “Alaska is at the center of world trade.”

Whether it is for Georgia’s favorable cost of living, business-friendly policies, superior workforce, educational assets, or solid air, land, and sea resources, logistics and other companies consistently choose Georgia because they know they can rely on the state’s pro-business culture and infrastructure to sustain growth.

“Successive governors, local and community elected leadership, and the Georgia General Assembly have consistently supported our partnership approach to economic development, allowing our state and local teams to be responsive to business,” says Pat Wilson, commissioner of the Georgia Department of Economic Development.

“Our university system and technical college system of Georgia have been ahead of the curve in working with us to prepare Georgians for the workforce needs of tomorrow, giving Georgia a competitive advantage,” Wilson adds.

Reflecting this growth trajectory, Gov. Brian Kemp announced in February 2024 that Doowon Climate Control America, a South Korea-based auto parts manufacturer and supplier, will invest more than $30 million in a new manufacturing facility in Metter, in eastern Georgia. The company will be a key supplier for Kia Georgia and Hyundai Motor Group.

“Georgia’s growth as a national leader in auto manufacturing continues to pay dividends for communities in all four corners of Georgia,” Kemp said.

Georgia’s vast business network goes well beyond automaking, embracing everything from tourism to health care. The support of the state’s logistics providers is as strong as the network they serve.

Technology and Workforce Are Major Draws

For Duane Kalinowski, founder, owner, and CEO of All Points, a multi-faceted 3PL based in Atlanta, the greatest logistics asset of the state he adopted as his home 30 years ago is the quality of its workforce—particularly those who work for All Points. “We have an unbelievable workforce here,” he says.

Kalinowski opened the company with a mattress—he lived inside his warehouse—and a fridge, a TV, his dog Baxter, and an entrepreneurial spirit on June 1, 1995. All Points has now grown into an industry leader in fulfillment and distribution, print and promotional product management, ecommerce, direct response project management, retail display production, and 3PL services.

Several members of his executive team began with the company more than two decades ago—Controller Sandra Duncan, for example, and IT Director Adam Zawacki, a Georgia Tech industrial engineer grad who spearheads constant evaluations of fulfillment processes, looking for ways to improve efficiencies and reduce costs.

Kalinowski puts a high premium on All Points’ tech stack, believing it is a vital key to logistics success. “If you’ve been in business 30 years,” he says, “you have to stay on the cutting edge of technology—or you’re not going to be in business.”

Those two keys—technology and workforce—make Georgia an ideal logistics home, Kalinowski believes, citing the outstanding logistics degree programs offered by the state’s colleges and universities. All Points hires many graduates of Georgia Tech, “which is in All Points’ backyard,” he says.

Building on Logistics Advantages

All Points provides fulfillment and distribution, print and promotional product management, ecommerce, direct response project management, retail display production, and 3PL services.

“Think about both the culture and tremendous education resources for logistics in Georgia,” Kalinowski says. “Not only that, think of all the trade shows and economic forums, the Atlanta Chamber of Commerce and how they all work in unison for the logistics hub that Atlanta has become.

“These are efforts that start at the governor’s level and work their way down to the local level,” he adds. “It’s no mistake that Atlanta has the largest airport, the most trafficked in the world, and that UPS is located here.”

Additionally, he says, “Georgia’s miles and miles of actual freeway help us with time to market. All these things—from the support of the governor’s office to the logistics infrastructure and economic forums—work together to perpetuate Georgia’s logistics advantage. It has taken off to the point it’s hard for other regions to catch up to what we have here.”

Since he landed All Points’ first major contract with Coca-Cola shortly after he opened the company—leading to a contract to distribute some $80-to-$100 million of Olympic pins for the 1996 Summer Olympic games held in Atlanta—Kalinowski has capitalized on Georgia’s rich logistics resources to achieve remarkable growth.

He believes the strength of the Georgia logistics environment—along with treating his team members as partners in the business—will keep the company thriving long into the future.

“When I meet with prospective companies, I sell the culture of our workforce and our ability to solve problems,” Kalinowski says. “Atlanta has such a great logistics network. It really gives us an edge, being here in Atlanta. There’s a lot of opportunity here.”

Focusing On Ports and Progress

Georgia’s logistics assets acted quickly and effectively to meet the pandemic-related challenges of all types of infrastructure faced with surging consumer demand. Case in point: Georgia Ports.

Aside from the period affected by the pandemic, 2023 was the best calendar year on record for containerized trade for Georgia Ports, according to the Georgia Ports Authority (GPA), which oversees the state’s two deep-water ports and three inland terminals. “Georgia Ports’ demand for containerized imports normalized since the end of the pandemic,” says GPA President and CEO Griff Lynch, who adds that GPA is using this time to invest in capacity for future needs.

“GPA is committed to investing $4.2 billion in the next 10 years,” Lynch says. “With the new year, we are beginning to see renewed strength in container volumes, which should result in more favorable comparisons moving forward the next six months.”

In terms of roll-on/roll-off (Ro/Ro) cargo, the Port of Brunswick handled a record 775,565 units of autos and machinery in calendar year 2023, an increase of 15.6% over the previous year. At its current rate of growth, the Port of Brunswick is poised to become the nation’s busiest gateway for Ro/Ro cargo.

Expanding both trade and capability at the flagship ports of Savannah and Brunswick is part of a two-pillar strategy at GPA, with Savannah focused on containers and Brunswick focused on Ro/Ro trade. Both pillars of GPA’s business will be positively impacted by the growth of manufacturing in Georgia, such as the new Hyundai Meta Plant now under construction in Elabell, on the outskirts of Savannah.

Boosting Capacity

Because the threat of supply chain disruption is a constant, GPA’s infrastructure investment philosophy is to have 20% more capacity than the current cargo demand, thus enabling its terminals to better absorb sudden influxes, Lynch says.

Capacity-building projects include Garden City Terminal West at the Port of Savannah, which will add 100 acres and 1 million TEUs of annual capacity adjacent to Garden City Terminal proper. Now 70% complete, the yard will offer a new, long-term storage option for port customers to help them flex to supply chain demands.

GPA also is expanding its inland port offerings. Along with the existing Appalachian Regional Port in Northwest Georgia, GPA is building the Blue Ridge Connector rail terminal near Gainesville, Georgia. Additionally, North Carolina importers and exporters can tap into a faster supply chain through a direct rail connection between Savannah and Rocky Mount, North Carolina, via the CSX Carolina Connector (CCX) intermodal terminal. Supporting GPA’s intermodal cargo expansion is the Mason Mega Rail Terminal in Savannah, a foundational gateway terminal component.

Lynch credits state infrastructure improvements for making the ports’ growth possible. “GPA has been able to add capacity because of unmatched room for expansion on the 1,500-acre Garden City Terminal in Savannah and the 1,700-acre Colonel’s Island Ro/Ro Terminal at the Port of Brunswick,” he says.

“GPA has strong partners in the Georgia Department of Transportation and the Georgia Department of Economic Development in terms of building a robust statewide freight transportation system, and attracting companies to build or expand in Georgia,” Lynch adds. “Both help to drive business through Georgia Ports. Georgia is a truly integrated state when it comes to attracting and keeping business.”

Providing Knowledge and Power

Prominent among the vast array of Georgia’s unique logistics resources is SMC³, a one-stop knowledge hub for everything less-than-truckload (LTL). Shippers, carriers, logistics service and technology providers rely on SMC³ to translate intricate LTL transportation pricing and transit detail into data-centric solutions, spanning the entire shipment life cycle.

A trusted industry partner for more than 88 years, SMC³ is an established thought leader, hosting premier supply chain conferences and educational events across North America.

“Our status as a trade association provides close connections to all less-than-truckload carriers across North America,” says Brian Thompson, the organization’s chief commercial officer. “SMC³ utilizes our proprietary technology infrastructure to connect asset-based providers with their customers, shippers, and logistics service providers, with high-speed connectivity around the clock.”

Leading the LTL Industry

Based in the master-planned community of Peachtree City, just south of Atlanta, SMC³ is at the center of the $50-billion LTL industry, managing more than 4 billion pricing and transit transactions per month. To help accomplish its goals, the organization accesses the knowledge and power of the state’s leading logistics innovators and thinkers.

For example, SMC³ partnered with logistics professor Dr. Karl Manrodt at Georgia College & State University to develop and launch a new online educational program focused on the LTL industry.

“The educational program is a self-paced, online program leveraged by some of the largest logistics providers across the country,” Thompson explains. “So many new people have entered the industry in the past four years that educational programs are imperative to prepare them for these careers.”

The infrastructure—from fiber cable to roads and bridges to the busiest international airport in the country—all enable SMC³ to be effective in reaching its audience across the country, he adds.

Post pandemic, SMC³ has shifted from requiring all employees to work from the office to allowing them to work either in the office or remotely. This policy has allowed SMC³ to attract and retain top talent from across the state and the country, Thompson says.

SMC³ has greatly increased the use of videoconferencing and online media in its new educational programs for the freight industry. Additionally, it hosts monthly hybrid learning programs with panels of guest speakers discussing critical issues facing the freight industry and solutions to those issues.

SMC³ now offers Dynamic PriceBuilder®, a new application that lets carriers develop rates dynamically and enables them to make better pricing decisions. Through the tool, carriers can manage yield versus volume with on-demand control pricing and access levers, including location, weight, density, day of the week, and calendar date.

“With this dynamic solution, carriers immediately feel the impact of enhanced visibility into load-level costs, pricing, and profitability paired with their custom business rules engine to provide the data needed to quickly offer customer-specific pricing on a shipment-by-shipment basis,” Thompson says.

SMC³ continues to develop integrations to connect shippers, logistics service providers, and their asset-based providers across the freight industry.

“There is a tremendous demand to digitally connect and leverage data to create automated solutions that result in savings and more effective management across the supply chain,” Thompson says. “SMC³ is the premier provider of API and EDI integrations for the less-than-truckload industry.”

Recruiting the Best

Atlanta Bonded Warehouse is a leading provider of temperature-controlled 3PL warehousing, co-packaging, and LTL/TL transportation services in the Southeast.

For Atlanta Bonded Warehouse (ABW), the Southeast’s leading provider of temperature-controlled 3PL warehousing, co-packaging, and LTL/TL transportation services, the new year has brought about a heightened focus on recruiting and hiring the best of the best among Georgia’s superior logistics workforce.

Hal Justice, ABW’s vice president of sales and operations, says this focus means finding new ways to attract a new generation of technology-savvy employees.

“Our wage and benefit packages are exceptionally competitive for our industry and for the markets in which we have operations,” he says. “But today we are recruiting a different generation of 18-to-26-year-olds who do not respond as well to the recruiting efforts that have been historically successful.”

Both the demands of the industry and the skills and expectations of potential employees are putting a premium on applications of technology.

Enhancing Technology

“We’re enhancing our technology beyond just pure materials-handling movement and engaging automation where it makes sense and is cost-effective,” Justice says. “It’s not just moving pallets. Paying people for hours to move pallets from one end of the warehouse to another does not add value to our business process, and does not develop the skills our employees want or need. It’s not a good use of resources.”

Such tasks are not especially attractive to upward-bound workers either. Having almost halved the progression from starting wages to mature wages was helpful but still not enough.

ABW is aggressively recruiting online for new employees for positions in warehousing, transportation, and co-packaging. The growth in the company’s business means opportunities for new employees and for promotion for existing employees.

“We get lots of online inquiries every day,” Justice says. “We get from four to six inquiries every day regarding employment. When you think 20 a week or 1,000 a year is pretty good, you need to realize this is only the top of the funnel. Successfully recruiting, training, onboarding, and ultimately retaining is a long way from the top of the funnel.”

ABW is considering hiring a full-time recruiter to enhance its efforts to keep its workforce on top. At the same time, the company continues to measure productivity through “engineered standards”—using technology to carefully measure workers’ time management. The combination of these efforts enables ABW to mitigate cost increases—and, as a result, its costs to customers.

Automation is not a panacea, Justice says. Equipment must be carefully selected to fit the application, then calibrated and continually monitored to make sure it is doing what you tasked it to do. “Quality and safety remain most important,” he says. “Nothing suffers.”

ABW pays keen attention to industry measurements of success. “We’re holding our own in the industry with KPIs (key performance indicators),” Justice says. “I would put our numbers up against any of our competitors and we have some great competition.

“We focus on being a high-performance, low-noise operator. We’re in the top 50 of U.S. 3PLs. Everyone says size has its advantages and we would agree,” he continues. “Smaller has its advantages. Our size makes us more agile. We can make decisions quicker, make changes to our technology quicker, and change mid-course a lot easier. We don’t have to go through management hierarchy for approvals. We make two calls, meet for five minutes, and just do it.”

All of this takes place in the environment of an extraordinarily business-friendly state. “Georgia has done an incredible job of making the state a preferred location for industry,” Justice says. “Georgia has done a solid job of attracting business. We’ve got a good workforce and we’re always attracting more manufacturing. More and more of our customers are looking at how they can manufacture or process their products here and not rely on someone 8,000 miles away and where it takes five or six weeks to get here on a container. The pandemic taught everybody the value of shortening their supply chains.”

Forging Ahead

Syfan Logistics Executive Vice President Steve Syfan (left) credits Gov. Brian Kemp (right) and others in state government for their ongoing support of business in Georgia.

Steve Syfan, executive vice president of Syfan Logistics, is equally bullish on both the field of logistics and the company’s Georgia home.

“Georgia is a very forward-thinking state,” says Syfan, whose company is located some 50 miles northeast of Atlanta in Gainesville, Georgia.

Syfan Logistics specializes in the transportation of refrigerated/frozen foods and manufactured automobile parts as well as the transportation of pharmaceutical products. The company moves many pharmaceuticals that have special temperature regulations and specifications.

The critical importance of the company’s specialized services was made manifest at the height of the pandemic, and Syfan says the business-friendly environment of the Peach State was especially helpful during that challenging time.

“Georgia did not shut down like some other states did,” Syfan says.

He credits Gov. Brian Kemp and others in state government for their ongoing support of business. For 10 years in a row, Georgia has been recognized as the country’s best state for business.

Syfan Logistics, in turn, invests heavily in the future of Georgia logistics. Steve’s father and company founder Jim Syfan serves as a member of the University System of Georgia’s Board of Regents.

The company has established internship programs with several of the state’s leading colleges and universities, including the University of North Georgia, North Georgia Technical College, Georgia Southern, and University of Georgia. The company also works with Appalachian State University in North Carolina and the University of Tennessee.

“The majority of the population doesn’t even know this industry exists, except that they see the trucks on the road,” Syfan says, adding that he believes the next generation should be educated on how logistics represents a rewarding career path with rich opportunities for growth. Syfan Logistics offers a mentorship program and currently has one dozen employees in its training department.

Nurturing Entrepreneurs

Syfan is proud that as many as 17 other logistics companies have been spawned by individuals who began their careers at Syfan Logistics. “There’s enough for everybody,” he says, “and they make us better.”

He points out that his father was an entrepreneur, and the company encourages individual success. “We don’t have non-competes; I don’t believe in them,” Syfan says. “It would be wrong to say you can’t better yourself if this is what you believe you need to do.”

Another expression of the company’s culture is the fact that employees are not described as working “for” the company but rather “with.”

“It’s just a word but it’s a big word for us,” Syfan says. “We work with each other.”

It all goes back to the code his father put in place when the company was established. “My dad said back in 1984, our number-one principle is we’re going to do the right thing and we’re going to do it every time. And because we’re human, if we don’t do the right thing, we’re going to make it right.

“We do that internally and we do it externally. That’s always our goal,” Syfan adds.

Syfan believes a persistent challenge for logistics and other industries is the need for tort reform, and once again he is buoyed by the forward thinking of Georgia’s state officials.

“I’m very encouraged by what our legislators are doing,” he says. He is optimistic that “substantive decisions” are being formulated to further help Georgia continue to compete and grow.

Room to Grow and Flourish

Savannah-based JIT Warehousing & Logistics delivers just-in-time service with responsiveness and a personal touch.

Asked for her perspective on the most important assets of Georgia that help qualify the region as ideal for logistics, Anna Lockwood, vice president of Savannah-based JIT Warehousing & Logistics, doesn’t hesitate.

“A large port with steady growth is essential,” she says. “And so is having lots of options to move the cargo and containers from the port, particularly rail. That’s important too, as well as having ample warehouse space.

“Fortunately, we have all of that and more in Georgia,” she adds. “Our warehouse space is constantly expanding to meet ever-increasing demand.”

Evie Goldberg-Davis, JIT’s executive vice president, agrees. “Having the space geographically to grow is vital,” she says. “And not just the Georgia Ports Authority, but private terminals and warehouses in Savannah and throughout the state; developing inland ports and expanding the rail infrastructure and roadways connecting the Savannah terminal hub to the entire region.”

Ben Goldberg, the company’s president, adds this key ingredient to the region’s success: “Rapid expansion of manufacturers building plants in Georgia.”

In other words, it’s all about growth. And when it comes to logistics, growth not only defines Georgia in general but JIT specifically.

A family business, JIT was founded more than three decades ago by Ben Goldberg with the idea that companies in the Southeast, particularly those that receive seaborne products via the Port of Savannah, need world-class logistics support.

The company has five locations, all of which are within 3.5 miles of the Savannah port’s Garden City Terminal and one of which is within a half mile of the port’s Garden City Terminal.

Providing Responsive and Personalized Customer Service

As the company’s name suggests, JIT’s mission is to deliver just-in-time service to its clients. It accomplishes that mission by having big-company capabilities while providing small-company responsiveness.
Its experience, family ownership, and flexibility set it apart. “We’re big enough to support some of the world’s largest companies, and small enough to give small and mid-sized companies the very best in personalized customer service,” Goldberg says.

Adding greener low-emission trucks (CNG trucks) to the company’s asset fleet and building rail capacity are examples of JIT’s forward-thinking decision-making that enables the company to keep pace with the growth of Georgia itself.

A new location with Norfolk Southern and JIT’s expanded heavy-haul/cargo fleet to accommodate new facilities and plants being built in the region further solidify the company’s standing as a star in the logistics constellation of Georgia.

Establishing A Solid Foundation

For more than a century, Georgia has fostered healthy industry practices, encouraged collaboration and innovation, and positioned itself as a leader in developing and harnessing emerging technologies, including for the evolving automotive and mobility industry.

As the electric vehicle market continues to grow, for example, Georgia has pursued the entire supply chain, creating more than $25.7 billion in investments and 30,200 jobs since 2018.

Other industries thrive as well. For example, Gov. Kemp recently announced Gerresheimer, a manufacturer for the pharma and life science industry, will invest more than $88 million in expanding its manufacturing operations in Peachtree City in the southern Atlanta metropolitan area. Dusseldorf-based Gerresheimer currently supports more than 260 jobs in Georgia, and its existing manufacturing facility will support an additional 180 jobs with operations beginning in April 2024.

“Employers from across the globe can find a skilled workforce here that we continuously invest in through innovative programs like the GEORGIA MATCH Direct College Admissions Initiative,” Kemp said.

The program, officially launched in 2023, is intended to make higher education more accessible to Georgia’s youth, and it helps pave the way for a new generation to continue Georgia’s leadership in logistics.
The state’s pursuit of this type of leadership in logistics, together with its other assets, continues to successfully attract business and drive growth.

Georgia Logistics: 7 Stunning Stats

Port of Brunswick (photo courtesy of the Georgia Ports Authority)

Across every category, Georgia’s advantages as a logistics hub can be quantified with eye-popping numbers. Here are a few:

1. Georgia has a labor force of 5.3 million, with an especially strong talent pool in transportation and material moving.

2. The state’s logistics sector is powered by more than 15,000 logistics establishments employing more than 181,000 people in direct logistics industry jobs.

3. The University System of Georgia is made up of 26 higher education institutions, of which 25 offer concentrations and degrees in logistics and supply chain.

4. Georgia has 327 public and private airports, including 105 public-use airports. Two international airports—Hartsfield-Jackson Atlanta and Savannah/Hilton Head—and nine of the top 10 cargo airlines in the world call Georgia home.

5. The state has 1,244 miles of interstate highways, 81,829 miles of country roads, 19,095 miles of state highways, and 13,731 miles of city streets.

6. With more than 4,600 miles of active rail lines, Georgia has the largest rail network in the Southeast. The railroad system in Georgia includes 28 freight railroads, including two Class I railroads—Norfolk Southern and CSX. Georgia provides direct rail access to the Mid-Atlantic, Northeast, and Midwest regions of the United States.

7. Georgia’s two deep-water ports in Savannah and Brunswick, together with inland terminals in Chatsworth, Bainbridge, and Columbus, are gateways to the world. Sitting on 85 acres at the Port of Savannah, Mason Mega Rail is the largest on-terminal intermodal facility in North America.

Sources: Georgia Department of Economic Development, Georgia Center of Innovation for Logistics, University System of Georgia, Georgia Department of Transportation, Electric Cities of Georgia (ECG) Office of Economic and Community Development, Georgia Ports Authority.

With planned and unplanned cargo that ranges from fashion to finished vehicles to delicate flowers and produce, Sea-Air Logistics provides savings in either lead time or cost. Companies can leverage Sea-Air as a primary mode for forecasted volume or cost-effectively meet an unexpected spike in demand.

Each Sea-Air shipment is pre-booked onto an ocean vessel, within dedicated containers that enjoy high priority for equipment and space.

During the sea transport stage, the shipment is assigned air freight space, ensuring it is uplifted without dwell time. Once the vessel reaches its hub destination, shipments are transloaded to an aircraft, typically within 8 to 12 hours.

“Even during COVID, the Sea-Air product maintained an on-time performance level of 95%.”

-Leo Qvarnström
Director, Sea-Air Logistics
and Air Sustainability,
North America
Kuehne+Nagel

Because Kuehne+Nagel works only with premium carriers and requires their adherence to stringent performance requirements, it can confidently forecast transit times. “Even during COVID, the Sea-Air product maintained an on-time performance level of 95%,” says Leo Qvarnström, Director, Sea-Air Logistics and Air Sustainability, North America with Kuehne+Nagel.

A cross-functional team within Kuehne+Nagel oversees each shipment. “One ‘control tower’ team handles the whole shipment from origin to destination and across modes, providing an integrated, controlled operation that’s also scalable,” says Robin Knopf, Global Head of Sea-Air Logistics with Kuehne+Nagel.

The experts on the Sea-Air team boast decades of experience and speak the language of both modes. “They are magicians,” Knopf says. They leverage their sea and air freight knowledge, using Kuehne+Nagel’s global network and the latest technology to predict movements and track shipments. Because the handling processes are so tightly managed, the damage rate on shipments is close to zero.

“One ‘control tower’ team handles the whole shipment from origin to destination and across modes, providing an integrated, controlled operation that’s also scalable.”

-Robin Knopf
Global Head,
Sea-Air Logistics
Kuehne+Nagel

The Sea-Air product often works in lanes with an imbalance of trade—that is, more cargo typically comes into a hub than exits it. These markets tend to experience less volatility than many other trade lanes, and the shipments capture capacity that would otherwise sit empty on a return flight, Qvarnström says.

Shippers of all sizes and verticals use the Sea-Air product to save time and money, and minimize carbon emissions, when compared to air freight alone.

Some also use the solution as a kind of mobile warehouse, avoiding the cost of warehousing freight while it’s in transit. Kuehne+Nagel’s Sea-Air Logistics also helps companies diversify their supply chain and logistics operations, boosting flexibility and resilience. It works year-round as a true alternative to other transport modes.

“That’s the beauty of the product; it’s something that everyone can take advantage of,” Qvarnström says.

Every year lately, “a big unknown” has impacted supply chains, says Leo Qvarnström, director, Sea-Air Logistics and air sustainability, North America with Kuehne+Nagel, a provider of logistics services. Recent examples include the war in Ukraine, the ecommerce boom, and the current conflict in the Red Sea.

The acronym VUCA, which has its roots in the military and stands for volatility, uncertainty, complexity, and ambiguity, is now being used to describe the world of commerce, says Tom Goldsby, executive director of the Global Supply Chain Institute at the University of Tennessee, Knoxville. Supply chain and logistics professionals can gain an edge by understanding the trends and shifts contributing to the current global logistics environment.

Geopolitical Upheaval

In addition to exacting a human cost, conflict impacts supply chain and logistics operations. For instance, Red Sea attacks are forcing more shipments around the horn of Africa, lengthening cycle times and driving up fuel costs and carbon emissions, says Ted Stank, co-executive director, with Tom Goldsby, of the Global Supply Chain Institute.

Between November 2023 and February 2024, container leasing rates on the China-to-U.S. trade route more than doubled, finds Container Xchange, an online container logistics platform.

Challenges in the Red Sea will even indirectly impact shippers whose cargo doesn’t travel this route, says Robin Knopf, global head of Sea-Air Logistics with Kuehne+Nagel. The reason? As carriers move to avoid the Red Sea, they create disruptions or container shortages along other routes, he adds.

Other trade lanes are also at risk, says the Boston Consulting Group (BCG). One is the Strait of Hormuz, which accounts for 20 to 30% of oil trade. If Iran is drawn into the conflict in the Middle East, vessels navigating this strait could be at risk.

Another lane, the Strait of Malaca, accounts for 30% of global trade. An ongoing dispute between China and several members of the Association of Southeast Asian Nations (ASEAN) over an area in the South China Sea may impact this strait, BCG says.

Along with rising transit costs, it’s likely that confirming bookings will be more difficult by summer 2024. “Companies will need to plan longer lead times for getting goods to their final destinations,” says Christa Pitts, co-CEO with The Lumistella Company, the firm behind Elf on the Shelf.

China Plus One

To offset rising labor and other costs in China, many companies are employing a “China + One” strategy. “Firms are reducing their concentration in China and adding capacity in Southeast Asia, India, and Mexico,” says Marc Gilbert, managing director and senior partner with BCG.

Countries in Southeast Asia, for instance, currently supply multiple regions of the world, including China and North America, Gilbert says. In India, leadership has taken steps to address corruption and enhanced the country’s ability to move goods around, he adds.

Nearshoring/Reshoring

More North American companies also are looking to locate operations closer to home. In early 2023, Mexico replaced China as the United States’ top trading partner, benefiting from its geographic proximity, strong manufacturing-based economy, skilled workers, and free-trade pacts, reports research firm MSCI.

Along with Mexico, all of Latin America offers strong potential for nearshoring, says Rick Jordon, senior managing director with FTI Consulting. Many companies will still need to rely on supply networks based in Asia. However, as Latin American companies implement new technology, it’s possible they’ll leapfrog ahead of their Asian counterparts.

Regionalization

A major gateway for global cargo shipments, the Oakland Seaport in Northern California serves a local market of more than 14.5 million consumers and 50% of the U.S. population by rail.

Interest in regional supply chains is growing. The idea is to “move away from thinking that we have one manufacturing hub for the whole world,” Stank says. Instead, companies can set up regional supply chains, which tend to be more agile, to support their major markets. If operations are disrupted in one area, other locations can compensate.

Artificial Intelligence

“The biggest impact to the global supply chain will continue to be the use of artificial intelligence (AI),” Pitts says. Among other benefits, AI allows supply chains to maximize efficiency in ways that hadn’t been possible previously, such as maximizing space utilization on a container or a pallet.

“AI allows companies to work smarter,” she adds.

Given ongoing disruptions, supply chain transparency and visibility to the sources of goods will factor in planning. “AI can enhance that power,” says Melinda McLaughlin, global head of research with logistics real estate company Prologis.

One company employing AI in the supply chain is Good360 is a nonprofit that distributes product donations through its network of 100,000+ vetted nonprofit partners.

The company is trying to use AI to help determine if it can efficiently move products where they’re needed after an event occurs, says CEO Romaine Seguin.

For example, Seguin has been working with a donor to determine how Good360 can help in areas impacted by wildfires. “We’re bringing in AI technology for mapping weather and identifying how much damage is in an area and what’s needed, such as water or hygiene products,” she says.

Cybersecurity

As supply chains digitalize, the risk of cyber attacks increases. “It’s the flip side of the digitalization and automation coin,” Stank says. Some chief information officers are even throttling back supply chain initiatives because of cybersecurity concerns, he adds.

A criminal may act as a carrier, broker, or even a customer to break into a system and then try to hijack freight or access customer or employee data. “Any system is open to attack,” warns Nathan Johnson, founder and CEO of transportation consultancy GLCS.

Sustainability

While it’s difficult to pin a single weather event on climate change, the drought at the Panama Canal is capturing the attention of supply chain experts. Drought cycles used to occur once every five years, but now are happening every three years, said Ricaurte Vásquez Morales, administrator of the Panama Canal, in a statement.

Another sign of the emphasis on sustainability is the European Commission’s Carbon Border Adjustment Mechanism. CBAM, which will be phased in between 2023 and 2026, is intended to fairly price the carbon emitted during the production of carbon intensive goods entering the EU.

CBAM will initially apply to some goods whose production is carbon intensive and at most risk of carbon leakage, such as cement, iron, and steel; additional goods will be added.

Navigating Evolving Global Logistics

As global logistics evolves, here’s how shippers can adjust.

Strengthen Agility
Resilience remains essential, but it doesn’t mean trying to create bulletproof supply chains. “There is no such thing as being bulletproof,” says Goldsby of the University of Tennessee. Instead, resilience should take the form of agility, or developing options before they’re needed. Plasticity, or the ability to make rapid structural changes, such as sourcing in new locations, is also necessary, he says.

Understand Geopolitics
Supply chain leaders today need to understand a range of subjects, including geopolitics, economics, and cybersecurity, Goldsby says. “They have to be global citizens and understand that what takes place in, say, Indonesia could very much influence their supply chains and business,” he adds.

Create a Task Force
More than three-quarters of respondents to BDO’s Global Risk Landscape 2023 indicated that the risk landscape is shaped more by connections between risks than individual risk factors. Addressing these connections requires a company-wide focus.

Assemble an enterprise-wide task force to take a control tower view of the supply chain, advises Tony Nuzio, founder and chief executive officer with ICC Logistics Services Inc. It should be cross-functional and include employees from all levels. Employees on the ground might be best suited to identify, for instance, suppliers that are critical to production, even if the company purchases relatively small amounts from them. Task force members can run scenarios and assess how prepared the company is for them, he adds.

Beef Up Cybersecurity
Nearly three-quarters of cyber incidents include a human element, such as an employee clicking a phishing link, according to Infosec, a cyber security training company. Employee education is key to preventing attacks.

“All it takes is one person in the organization to click on something they shouldn’t, and then the entire company is exposed,” says Nathan Johnson from consultancy GLCS. Another essential safeguard is multifactor authentication, or requiring users to present two pieces, or factors, that show their identity before they can access a system.

Find Partners or Platforms
The very largest companies may have the resources they’ll need to manage the evolving global logistics environment by themselves. Many other organizations will need to work with partners and/or platforms to achieve the benefits of scale, says Prologis’ McLaughlin.

Global Trade Management Solutions

Technology tools can help shippers tackle the challenges of global logistics operations. Here are a few of the many available solutions.

Descartes: Datamyne™ is a searchable trade database that provides real-time access to import and export information from customs authorities and trade ministries across 230 markets.

e2open: Features on e2open’s global trade management software include due diligence screening, the ability to automate export compliance and import management, as well as a database of government trade regulations.

ImportKey: The AI-driven algorithm leverages global and U.S. import and export data, as well as U.S. customs data and records, to identify top products, sellers, and buyers for given time periods.

Oracle Global Trade Management: This solution allows companies of any size and in all geographies to centrally manage global trade operations and to optimize, automate, and monitor cross-border transactions from a unified trade and transportation platform.

PartnerLinQ: This supply chain platform integrates with more than 70 TMS, WMS, and ERP systems using industry best practices, common workflows, and data structures.

SAP Global Trade Services: This platform integrates trade services across the entire enterprise and automates and streamlines trade processes.

Trademo: This solution connects billions of supply chain data points and leverages software to provide organizations visibility into their global supply chain networks.

Zonos: The platform provides a range of cross-border solutions, like Landed Cost, which offers the ability to show guaranteed duty, tax, and carrier fee calculations on all orders.

Distribution centers were “a back-closet kind of operation,” says Gary La Point, professor of supply chain practice at Syracuse University. “That has all changed now.”

“Today, the DC is the gem in the crown for a lot of companies,” says La Point, a former warehouse supervisor for Xerox. “It’s where a lot of supply chain technology—robotics, new picking systems, new warehouse designs—is being developed. It’s a showcase for what you can do.”

Multiple factors contribute to the DC’s increased prominence. One is that “inventory is very expensive and companies realized they weren’t paying much attention to this huge expense item,” La Point says.

Another factor, which has particularly accelerated the advances DCs have made in recent years, is the transformational shift that has occurred in consumer expectations.

Ecommerce Intensifies Focus on DC Efficiency

DC efficiency intensified in importance with the rise of ecommerce and increased expectations for faster and more accurate order fulfillment, especially after the pandemic.

“Many companies feel the pressure to optimize operations and increase productivity to meet customer expectations,” says Abdil Tunca, senior principal analyst, Gartner Supply Chain Practice.

“Also, inefficiencies started turning into capacity issues,” he says. “Growing demand for faster response, increases in volume seasonality, and the introduction of new products are pushing the limits of warehouse capacity.

“Warehouses are under pressure to process more inventory faster than before, leading in many cases to capacity constraints,” Tunca adds.

Technology Enables Improvements

A host of developments are helping to create much-sought-after DC efficiencies.

“After the pandemic, businesses started investing more in process standardization, error and waste reduction, and technology such as automation, robotics, inventory management systems, and labor management systems,” Tunca says.

“We also see some of the early AI use cases such as dynamic warehouse slotting, predictive maintenance, and advanced analytics in logistics through warehouse management systems,” he adds. “In today’s competitive market, these solutions have started becoming a necessity rather than an option.”

Historically, distribution centers have faced major inefficiencies in the amount of travel required to operate inside their walls—including workers both walking and driving equipment, such as forklifts, great distances, La Point says.

Particularly problematic is when deadheading occurs, meaning neither the worker nor machine is carrying any product during their travel. “Someone driving a forklift with nothing on the fork is not productive—they’re inefficient,” La Point says.

“In the old distribution centers, all kinds of deadheading took place, but there is a lot of effort now to reduce walking time, travel time, and deadheading time,” he says. “You find a lot of DC efficiencies from there.”

In addition, mistakes are one of the most serious causes of inefficiency. For instance, when workers pick the wrong part and that part is then shipped, it’s “a disaster,” says La Point, leading to labor hours and costs to fix the error.

“The most important efficiencies in distribution centers now are about picking the right part and minimizing missed picks,” La Point says. Technologies—such as pick-to-light systems, smart glasses, and RFID solutions—play a key role in those efforts.

Here’s a look at two providers of equipment solutions that demonstrate the importance of combining technological advances and improved processes to solidify efficiency gains in the distribution center.

Gorbel’s Dock Door Solutions Provide Far-reaching Benefits

Gorbel’s portable ergonomic conveyor systems—Restuff-it™ and Destuff-it™—help workers unload floor-stacked products from trailers and containers.

The dock door area is a critical focal point of the distribution center. In fact, it helps set the tone for the entire operation. If the process at the dock door is an efficient one, it bodes well for the rest of the DC and can create new efficiencies elsewhere in a facility.

Gorbel, a crane, ergonomic lifting, and fall protection manufacturer based in Fishers, New York, offers portable ergonomic conveyor systems—Restuff-it™ and Destuff-it™—that are built to maximize efficiency at this deceptively complex juncture in the shipping journey.

Both systems help workers unload floor-stacked products from trailers and containers, and Restuff-it™ is a bi-directional unit that also helps with loading products.

The Restuff-it™ and Destuff-it™ systems help clients unload trailers much more quickly than before, reducing the number of workers needed for the process and cutting labor hours by approximately 50%—supercharging efficiency and creating a clear return on investment, says Anton Sawatzky, warehouse solutions sales manager for Gorbel.

“We work closely with our customers, and we know how much speed and safety at the dock door matter to them,” Sawatzky says.

Gorbel’s solutions are the only ones in the dock door field that have both a pivoting conveyor that ensures easy access to the conveyor and a platform that raises and lowers to ensure operators never have to reach above their heads for lifting, Sawatzky says.

Together, those features make unloading and loading at the dock door not only markedly safer but also markedly more efficient, he adds.

Flexible Solutions Boost Safety

In addition, the solution is fully mobile. So, instead of needing to dedicate the system to a single dock door, clients can use the solution at multiple doors, moving from trailer to trailer without the down time of waiting for a truck to pull away an empty trailer and restage the dock with a full one.

The solutions also boost safety. The dock door remains the place where the largest percentage of warehouse injuries occur, Sawatzky says. The difficulty of the work can limit the labor pool for open positions. Gorbel’s solution makes the work more appealing and provides a competitive advantage with the workforce.

“Using a machine to reduce the strain of lifting and twisting when workers are carrying a box—all while they’re under duress because they’ve got to move as quickly as possible to meet the budgeted timing for the work—helps a great deal with employee retention,” Sawatzky says.

“Warehouses can differentiate themselves with a focus on making the work safer and easier,” he adds.

Restuff-it™ and Destuff-it™ are drop-in solutions, but Gorbel team members walk clients through the systems and how to incorporate them into their unique operation to take advantage of the efficiencies they can introduce, Sawatzky says.

Often, Gorbel will provide a solution on a rental basis, helping clients to get acquainted with it and understand how quickly products come out of the trailer so they can make necessary adjustments elsewhere in their operations to maximize their gains.

“From a customer service perspective, right from day one we bring a lot of experience with dock door solutions to the table and bring ideas to the customer that will make them as efficient as possible,” Sawatzky says. “We know the difference that our solutions can make for them.”

Engineering Innovation: Emphasizing Agility and Efficiency in Automation

Engineering Innovation’s Chameleon parcel-processing solution can shift and change as volume and market requirements fluctuate.

The advance of innovation is constant and rapid in today’s distribution centers, and those who operate DCs must be ever prepared to accommodate that progress, says Don Caddy, CEO of Engineering Innovation, an Indiana-based provider of automated mail and parcel sorting equipment.

“Whatever you’re doing today, in one year or two years it’s going to be different,” Caddy says.

“There’s just too much changing in the world for that not to be the case,” he notes. For that reason, Engineering Innovation’s products each have a modular design that makes them readily adaptable.

Companies operating DCs should emphasize a dynamic approach in today’s climate. “You need to work with vendors that can be responsive so that you can make incremental changes to your process more rapidly,” Caddy says. “You don’t want to be stuck with a solution that becomes outdated and you say, ‘Yeah, we could do it better, but we’re still paying off this project so we can’t throw it away yet.’

“Change is constant—processes change, people have new ideas, and the industry is just moving too rapidly for people to get locked into a huge investment that starts out with a benefit but ends up being an albatross,” he says. “That’s why while we’re helping our customers automate, we also have to make sure we’re helping them be agile.”

For example, an Engineering Innovation customer bought one of the company’s automated sorting machines solely to scan and sort packages but later developed a need to weigh those packages before scanning them.

Instead of requiring a new machine, Engineering Innovation spent a day adapting the equipment, and “that machine suddenly became a different machine,” Caddy says.

Rather than eliminating labor with automation, Engineering Innovation focuses on multiplying the effectiveness of labor, including by improving accuracy.

Engineering Innovation integrates its solutions with customers’ existing processes rather than attempting to change the way they operate and asking them to rearrange their approach around Engineering Innovation’s equipment.

“We tend to be more targeted, and we go in and ask, ‘How can we help without disrupting your entire operation? How can we make the people you have be more effective and then leverage your available staff to get more done?’” Caddy says.

Engineering Innovation offers solutions that can provide “the most bang for our clients’ automation dollar,” says Caddy.

Spotlighting Long-term Success for Customers

“We want to focus on things that machines do well that can help people do what they do better and more accurately,” Caddy says.

“One of the big keys is establishing a relationship with customers and actually visiting and talking to them about what they do, how they do it, and what their goals are. Because we understand that, it allows us to help them as much as possible,” he notes.

In that way, Caddy says Engineering Innovation emphasizes long-term success for its clients.

“Sometimes, customers will come to us wanting product A and then we go and look at their operation, and we see that there’s a way bigger opportunity to do something with product B,” Caddy says. “We take the consultative approach, so that we can find those opportunities for them. We play the long game of supporting customers and helping them succeed as much as possible.”

Take a Strategic Approach

Gorbel and Engineering Innovation each stress the importance of integrating new solutions with a strategic purposefulness. Too many DCs are transformed without that considered intent.

“I’ve seen companies that spend tens of millions of dollars reconfiguring their DCs, but fail to consider that culture aspect of it,” says La Point. “They never achieve the level of productivity they were supposed to achieve.”

Similarly, some companies take large existing buildings designed for another purpose—often manufacturing—and adapt it as a distribution center. The building inevitably will not have been designed in a way that allows for maximizing DC efficiency.
For instance, a former manufacturing plant likely will have dock doors on opposite sides of the building—a problem for a distribution facility.

Technology brings opportunities but companies must be smart and strategic in how they adopt those solutions.

“Technologies have different maturity and adoption levels, benefits, and risks, and they mean different things to different supply chain domains and participants,” Tunca says.

“Companies struggle to find, evaluate, and prioritize the most relevant innovative technologies for their needs,” he adds. “Once they prioritize their needs, the goal should be to look for the best fit for the business rather than the best solution in the market.”

A concerted and complete effort is necessary to identify and realize new DC efficiencies.

“The correct approach maintains a balance between people, processes, and technology,” Tunca says. “Organizations sit on this three-legged stool; achieving a balance requires a holistic and strategic approach. Businesses should align their goals, communicate effectively, and continuously adapt their strategies to optimize their DC operations.”

In the logistics arena, the real estate mantra sets up the winning play. Pinpointing the right location determines the effectiveness or failure of all that follows.

As basketball star LeBron James, who knows a thing or two about picking his spots, once said: “If I’m on the court and I throw a pass, the ball that I’ve thrown will lead my teammate right where he needs to go, before he even knows that that’s the right place to go.”

The same is true in logistics. Knowing where your products need to go and how to get them there as quickly and efficiently as possible—whether through road, rail, intermodal, air, or sea—is at the essence of the supply chain playbook.

Understanding the critical factors a company needs to consider in determining where to locate a warehouse, distribution center, or manufacturing facility is essential to the decision-making process.

Site selection experts tell us those factors include access to customers, transportation modes, workforce, utilities, and business services. All these factors must be weighed in the context of cost and potential revenue.

In addition, the “soft” factors of lifestyle—such as climate, culture, recreation, and available educational opportunities for families—are likewise intrinsic to the process both formally and informally.

If you work where you live, you—that is, employees and management—want to work in a community that brings you comfort, fulfillment, and pleasure as well as business success.

Getting in the Zone

Is there one “perfect” spot that satisfies all your individual and company goals? Fortunately, there are plentiful resources to help you sort out the options—site selection consultants, community economic-development organizations, commercial real estate firms, and professionals from logistics providers such as ports—as well as the leaders of your company’s own internal operating departments.

Working in tandem, your site selection team should have the expertise to review all the critical location factors, sift through the data, and reach a consensus.

The winning move is finding consensus. Unless all disciplines within the organization are fairly consulted, the potential that the process—and, therefore, the result—will be flawed is dramatically increased.

Moving from a long list of possibilities to a short list of finalists will involve extensive research as well as financial modeling, location analysis, and site visits, all of which will have the bonus of helping you achieve a better understanding of your company’s strengths, weaknesses, and goals across the entire organization.

You may be tempted to believe the importance of physical location has been diminished in the digital age. That notion is far removed from reality, according to Edward (Ned) Hill, a site selection authority and professor of economic development in the John Glenn College of Public Affairs at The Ohio State University.

“Location is the gateway to talent, customers, knowledge, and suppliers,” Hill says.

Whether virtual, actual, or a combination of the two, your tours of potential sites are likely to introduce your team to location possibilities that were not at the top of the list when the selection process began. For that reason, it is vital to trust guides who know the territory.

Offering businesses increased supply chain efficiencies, the newly redesigned Container Berth 1 at the Port of Savannah’s Garden City Terminal can simultaneously serve seven ships, including four vessels with a capacity of 16,000+ TEUs. The upgraded berth boosted capacity by 25%.

Winning Ways: Georgia’s Ports

The southern region of the United States is of keen interest to site selection teams due to its strategic logistics location and assets, not the least of which are its port assets represented by the Georgia Ports Authority (GPA).

“The population of the U.S. Southeast is growing faster than any other region of the country, and manufacturers are flocking to the area’s business-friendly states,” says Griff Lynch, the GPA’s president and CEO. “Overseas, production is shifting to locations such as India and Vietnam that favor delivery via Savannah.”

From 2020 to 2022, the population of the U.S. South increased by 2.3 million people, according to U.S. Census data. Comparatively, the population of the Western United States grew by only 92,000.

“As the nation’s fastest-growing region, the South is seeing increased consumer demand, which translates into higher port volumes,” Lynch says.

“The area has also seen strong growth in manufacturing, including the recent announcement of the Hyundai Metaplant,” he adds. “The carmaker is poised to establish a whole new ecosystem of auto manufacturing and ancillary suppliers moving cargo through Georgia’s deep-water ports.”

Lynch says producers are drawn to the Port of Savannah’s market area by the South’s lower operating costs, growing population base, and logistical advantages.

Stacy Watson, director of economic and industrial development for Georgia Ports Authority, points out, for example, that 45% of the U.S. population is accessible via intermodal rail service from the Port of Savannah. The port’s service area ranges in an arc from Dallas to Chicago.

“No other port community in the nation provides more targeted workforce training or more room to grow than Savannah,” Watson says. “With multiple universities in the region and the state’s Quick Start program, industries can rely on Georgia for well-trained employees at every level.”

Quick Start is one of Georgia’s most important economic development incentives for attracting new investment to the state and promoting job creation. The internationally acclaimed program provides customized training free of charge to qualified new, expanding, and existing businesses.

Another important factor that businesses should consider in their site selection deliberations is the superior connectivity to global markets available through the Port of Savannah.

“With the most weekly vessel calls of any port in the mid-Atlantic, Southeast, or Gulf coasts, the Port of Savannah offers more options to more locations,” adds Watson. “On-terminal rail and direct truck routes from the terminal gates to interstates 95 and 16 mean greater efficiency in cargo flow from the port to industrial corridors and retail markets.”

There is ample land permitted for private development within 30 miles of the port, and in a developing market of properties an easy 40- to 45-mile drive from the port.

At 1,500 acres and nearly 10,000 feet of contiguous berth space, the Port of Savannah’s Garden City Terminal is the Western Hemisphere’s largest single-operator container terminal.

Its gates process approximately 12,500 truck transactions per day. It takes only 34 minutes for drivers to drop off an export container and depart the terminal. Dropping off an export container and picking up an import takes only 53 minutes.

The Port of Savannah’s Mason Mega Rail Terminal offers 85 acres of on-port rail capacity. Georgia Ports Authority and CSX provide 7-day-a-week rail departures between the Mason Mega Rail Terminal and the railroad’s terminal in Rocky Mount, North Carolina.

Calling the Shots

When all is said and done, it is vital that everyone on your site selection team has a comprehensive understanding of precisely what it is the company is seeking to accomplish in its new or expanded location.

“Is the search strategic or tactical?” asks Ohio State’s Ned Hill. “If it is a ‘fire drill’ to solve an immediate production or space problem, the dangers of making a long-term mistake are increased. If the goals are part of a long-term strategy, the entire location team needs to share the same vision.

“Is everyone clear on the purposes of the proposed facility?” Hill asks. “Another way of saying this is to ask what problem will be solved or what opportunity is being taken.”

Once you answer those questions, and establish and understand your goals, you can tackle the more specific and practical questions about individual potential sites—including environmental factors, zoning issues, and site-preparation costs—with the help of the government, as well as the utility, commercial real estate, and transportation leaders in the community.

Just as in logistics itself, if you properly execute the site selection playbook, you will score exactly the right location for your new facility.

Play-by-Play

How consensus drives the process of selecting a location

Whether for a distribution center, warehouse, or manufacturing facility, the community site selection process usually can be completed within three to four months. Edward (Ned) Hill, professor of economic development in the John Glenn College of Public Affairs at The Ohio State University, cites the following key 10 steps in the selection process:

1. Assemble your team (internal and consultant).
2. Define goals, objectives, and key operational concerns.
3. Establish consensus on steps 1 & 2.
4. Define your business model and corporate culture.
5. Create a project timeline.
6. Establish consensus on steps 3 & 4.
7. Identify factors and variables critical to the company’s success.
8. Establish consensus on step 7.
9. Rank the regions under consideration.
10. Establish consensus on step 9 before commencing to identify specific potential properties.

The heightened uncertainty and unpredictability that has characterized the supply chain in recent years only increases 3PLs’ importance.

Shipping is “undoubtedly under stress,” says Douglas Kent, executive vice president of corporate and strategic alliances for the Association for Supply Chain Management (ASCM). The capabilities 3PLs offer, particularly through increasingly sophisticated technology solutions, are central to shippers’ efforts to combat that stress.

“With the combination of some of the macroeconomic factors and workforce shortages, and the dynamic nature of supply and demand over the course of the disruptive events we’ve seen over the past few years, shippers have to rely on some advanced technology to make their services effective and efficient,” Kent says.

The onset of just-in-time shipping and the complexities of global commerce have increased technology’s importance, says Zach Jecklin, chief information officer for Echo Global Logistics.

“Because transportation remains fragmented, technology is key to sourcing and tracking the best options to fit a shipper’s needs and ensure the right product gets to the right place at the right time,” Jecklin says. “Technology has brought efficiencies and support at a level not previously seen.”

Providing Advanced Solutions

The two largest categories of technology that shippers are embracing today are data and analytics, and track and trace.

Data and analytics focus on gaining insight into creating a more efficient supply chain, such as through optimized routes, predictive fleet maintenance, and inventory management controls, among other efforts. Track and trace means a detailed view of where goods are in the supply chain.

Transportation management systems—software systems that help manage the logistics of distributing goods—are a core IT solution that 3PLs often bring to shippers to encompass a range of these purposes, from planning to executing and optimizing.

Big data and analytics has been at the top of ASCM’s annual top 10 trends list in recent years, and that emphasis is not likely to lessen anytime soon, particularly as artificial intelligence (AI) becomes more widely used, notes Kent.

For third-party logistics providers and shippers to move products quickly, particularly in light of the growth of ecommerce, inventory positions across their networks must be expertly managed to maximize efficiency.

“Our expectation as consumers is that when we order things we’ll get them in 48 hours or less—that’s the Amazon Prime effect,” Kent says. “The accuracy of those deliveries are important, and so is being able to optimize cost-efficiency. The balance between reducing the time and increasing the accuracy of delivery, managed alongside the cost of those transportation activities, is key.”

Tracking and tracing allows 3PLs to monitor time, temperature, and integrity in the distribution of goods and to share that invaluable information with shippers.

“Shippers want to know if the power in a refrigerated truck gets shut off somewhere in the middle of a highway,” Sinha says. “That is the kind of transparency we are seeking and that the technologies are providing now.

“The data does not just tell you what happened, but also where it happened, when it happened, and why it happened,” he says.

Disruption-Proof Supply Chains

The ability of 3PLs to process and learn from data is the key to help their shipping clients thrive in an era “when supply chain disruptions are more of a norm than an exception,” Sinha notes.

“The better you understand the risks and come up with contingency plans that allow you to deliver on the promise you made through a contract, the better off you are,” Sinha says. “The technology becomes consequential when you factor in macro issues that are well outside the control of any company or country.”

Some of the largest technology-driven shipping organizations are employing artificial intelligence and machine learning to develop models to predict supply and demand. This not only helps with pricing but also with getting “the right equipment to the right place where the freight is located,” notes Jecklin.

“Many trucks roll across the country with little or no freight on their backhaul, so whatever efficiencies can be developed not only save time and money, but also cause less wear-and-tear on equipment and roads, as well as reduce the impact on the environment,” Jecklin says.

The example of Echo Global Logistics helps demonstrate how a service provider can serve shippers no matter where they are on their “technology journey.”

Rather than take a “one-size-fits-all” approach, Echo Global Logistics provides a variety of technology solutions to tackle any shipper or carrier challenge. For example, the 3PL offers EchoShip, a self-service shipping platform for less-than-truckload (LTL) and truckload shippers.

Echo Global Logistics: Blending Tailored Tech Solutions with Expert Support

“Technology at your fingertips, and experts by your side.” That tagline has endured for more than a decade at Echo Global Logistics, a leading provider of technology-enabled transportation and supply chain management services. It is at the core of the company’s approach to empowering shippers and carriers and providing sophisticated tech solutions and expert, high-touch support in synchronized step together.

“We recognize that technology, while powerful, is not 100% of the equation for being a great brokerage and managed transportation solution for a shipper or carrier,” Jecklin says. “It’s our people’s expertise and the relationships that they have that add that extra variable to drive our service and competitive advantage in the marketplace.”

Tackling All Challenges

In addition, Echo, which is based in Chicago, doesn’t take a “one size fits all” approach to offering technology solutions. Instead, the company is built around a variety of solutions to tackle any shipper or carrier’s challenges.

Those solutions for shippers include instant quoting on Echo.com, as well as EchoConnect, a suite of tech offerings that include EchoTMS; EchoShip®, a self-service web portal for LTL and TL shippers; and EchoSync, the company’s EDI and API integration program.

“When it comes to technology, we understand the industry is incredibly large, and technology adoption across the different players is vast and differentiated,” Jecklin says. “So we don’t have one offering that we try to go to every player in that space with. We have many offerings to suit the needs of different shippers and carriers, depending on where they are in their technology journey.”

Jecklin says Echo emphasizes solutions and services tailored to the individual client rather than trying to treat everyone’s circumstances, goals, and preferences the same.

“The way a very large shipper wants to integrate to create efficiencies with technology is very different from the way a small business shipper would look to do that for their two or three LTL loads a month,” Jecklin says. “Both of those customers are very important to us, so we want to go to market with a solution for both shipper profiles.

“While the technology we use to do that looks different for each, both types of shippers can experience the same great levels of service and competitive pricing that comes with the Echo brand.”

Jecklin notes that Echo has been multimodal from day one, adding crucial value to its customers.

“Since our founding in 2005, Echo has focused on providing value to shippers through optimizing their transportation spend,” Jecklin says.“Having industry-leading capabilities across all modes gives us a leg up in executing this vision.

“Echo is focused on automating many tasks within the lifecycle of a shipment. But ultimately, when an issue arises, we want to make sure that our experienced employees are enabled by the tech to make sure the problem is solved for the shipper,” he adds.

“We understand the serious implications that can arise for a shipper when something goes wrong,” Jecklin says. “This is where the combination of people and technology becomes so powerful. Echo’s employees treat those issues with the same sense of urgency that our customers do, and we utilize our technology to drive both efficiency and transparency of the solution.”

Echo Global Logistics emphasizes the importance of providing rapid, expert personal support for clients. Since its founding in 2005, the 3PL has focused on providing value to shippers by optimizing their transportation spend with industry-leading capabilities across all modes.

Building on Expertise and Cementing Trust

Echo’s emphasis on offering services that fit the needs of a range of shippers helps serve a supply chain that comprises a range of players. “Everybody recognizes that technology is a tide that will lift all boats, whether you’re a small, medium, or large institution,” Sinha says.

“A 3PL’s ability to be an egalitarian to ensure that it has not only advanced technologies, but also the technologies that can integrate a large network of service providers with varying degrees of technological capabilities is very important,” Sinha says. “They have to be able to connect with all of them.”

Sinha says 3PLs today understand that they need to invest not only in technology but also in technological expertise, prioritizing hiring the types of experts that Silicon Valley covets.

“They make sure that the people they recruit are not just hotshot computer scientists, but that they also have the ability to talk to both senior management and the people on the front line,” Sinha says.

As tech solutions assume a central role in the way 3PLs serve shippers, Sinha says it will be critical that the human element of those relationships does not fade into the background. In fact, he says, the quality of those relationships will be more important than ever, and the 3PLs who emphasize them will stand out.

“Technology is not meant to replace trust,” Sinha says. “Technology is there to strengthen trust.”

Even as it grows, the FBAP industry remains resilient, providing technology, software, and service offerings that transcend traditional freight audit and payment, says Keith Snavely, senior vice president, global sales with nVision Global Technology Solutions. “As shippers are challenged to do more with less, freight audit providers are helping them reduce supply chain costs,” he adds.

The importance of these efforts has become more apparent over the past few years. “The supply chain is of significant interest because there is so much expense typically associated with it,” says Jeff Carlson, vice president of global sales and marketing with Cass Information Systems. Freight bill audit and payment companies can play a significant role in helping to rein in these costs.

As they do, some FBAP companies are transitioning to the term “transportation spend management.”

“We don’t think the term ‘freight bill audit and payment’ will go away, but it’s a myopic name for the solution, when there’s so much more to it, especially the data,” says Melia Cothran, director of marketing, also with Cass.

The value of the data assembled during freight audits can be seen in clients’ growing requirements for greater data analysis and business intelligence that’s reported in real time, often through tools like dashboards and using key performance indicators, or KPIs, says Allan J. Miner, chief executive officer with CT Logistics.

The desire for data and analysis also reflects companies’ need not only for savings—which remains key—but for the insight that will help them take intelligent correction action, says Vikki L. Van Vliet, senior vice president of sales and marketing with Trans Audit.

Globalization Grows

Another shift is the growing focus on capabilities that cross national boundaries. “Over the past year, we’ve seen more shippers looking for services that are global in nature,” Van Vliet says.

Demand for a comprehensive logistics solutions provider is also increasing, says Elizabeth Nolan, vice president of contracts and compliance, CTSI-Global.

Shippers are looking for providers that integrate data, the user experience, and visibility within a single platform.
Supply chain challenges have shifted over the past few years from port congestion and material shortages to increased costs and staff shortages. With so many factors at play, having a logistics partner that can reduce transportation costs and increase visibility in the supply chain is vital.

FBAP Providers Meet a Changing World

Since 2020, the sudden increase in direct-to-consumer shipments is continuing to drive growth in parcel deliveries. Partnering with a freight bill audit firm that offers parcel management is crucial to streamlining processes, Nolan says.

The cost of financing in today’s environment of rising interest rates, inflation, and fears of recession is of concern for all parties in the supply chain.

“It could have repercussions in our industry by impacting contract terms between shippers and carriers,” says Scott Burglechner, senior vice president and head of freight payment product management with U.S. Bank.

Additionally, the void created by the retirements of many experienced traffic and transportation managers has left a knowledge gap in many companies, Miner says. The upside for freight audit providers is that many of these companies will need their services.

As the logistics and supply chain functions change, so do FBAP providers. The importance of technology continues to grow.

This includes emerging technology like artificial intelligence (AI). “Freight bill providers and their clients have to remain diligent and aware of how AI can impact the market,” says Peter Kerwin, head of audit operations with Trans Audit. “AI is taking over everything we do.”

The growing role of technology is also prompting structural changes. A number of acquisitions occurred in 2022, resulting in a consolidation of service providers.

“The majority of FBAP services are now performed in association with other transportation or financial technology (fintech) offerings,” says Scott Matthews, president, freight audit and payment, AFS Logistics.

Other changes include the bankruptcy of Yellow Corporation and the new contract reached between UPS and its drivers. “In the short term, these might offer an opportunity for slightly more attractive parcel rates, as other carriers try to increase their business,” says Nick Fisher, director of sales and partnerships with ARTC Logistics. Within a year, however, it’s likely rates will increase again.

The data assembled during freight audits has become more valuable, with clients seeking greater data analysis and business intelligence reported in real time, often using key performance indicators (KPIs) and through tools such as dashboards.

The Future of the FBAP Sector

Looking ahead, it’s probable the number of freight bill providers will continue to shrink. Some providers that struggle to find the resources needed to invest in technology probably will leave the industry, whether by selling themselves off to another company or simply closing their doors, Carlson says. Conversely, the large ones likely will get larger.

There has also been considerable activity around sustainability and how advanced analytics solutions that leverage FBAP data can support reporting and inform decision-making related to climate impacts, Burglechner says.

Even as the FBAP industry continues to consolidate, both providers and clients will look for technology and services that go beyond simply processing and paying invoices, to encompass strategies that help shippers better manage their transportation spend, Snavely says.

The companies featured here are leading this change.

A3 Freight Payment: Customized Transportation Spend Management Delivers Superior Returns

A3 Freight Payment, which recently was recognized as one of the Inc. 500 Fastest Growing Companies, focuses on delivering value to its clients through customized, quality spend management.

“Freight bill audit and payment has become a tactical function,” says Craig Cameron, VP of sales and marketing. “A3 adds value for clients by pursuing savings and identifying spend management opportunities from within their supply chains,” he adds.

To that end, A3’s experienced team conducts in-depth analyses of clients’ freight invoices to help them reduce expenses and increase efficiency. They evaluate routes, freight class, modes, and carriers, among other factors.

Their comprehensive analyses provide insight into shippers’ freight operations, support more effective business decisions, and identify strategic changes that can lower expenses, streamline operations, and boost profitability. By using data from shippers’ transportation costs and payments, A3’s spend analytics services help them avoid overpaying in the future.

“Freight bill audit and payment has become a tactical function. We add value for clients by pursuing savings and identifying spend management opportunities from within their supply chains.”

Craig Cameron
VP Sales & Marketing
A3 Freight Payment

Finding Savings Opportunities

A3 leverages scenario modeling and the statistical analysis capabilities found in artificial intelligence to quantify and identify trends, as well as small, but costly anomalies, like inaccurate oversized charges on parcels.

“Even if there aren’t many of these charges, the dollar amount of savings opportunities can be sizable,” Cameron says. As important, shippers often can achieve the savings with minimal effort. “You get a lot of bang for the buck,” he says.

Once a shipper is an established client of a freight audit provider, ongoing savings on the audit itself generally are around one-half of 1%, Cameron says. The reason it’s generally not higher? The audit provider should be correcting errors, so more transactions proceed accurately and savings from mistakes decline over time. Of course, transportation costs should also decline.

It’s on the spend management side—where A3 focuses—that the savings opportunities can be significant, Cameron says. “We find and highlight operational problems, like expedited shipments that don’t need to be expedited, or poor carrier selection,” he says. When these are addressed, the savings can range from about 5% to as high as 20% of freight spend, he adds.

Another unique feature of A3 is its bankruptcy remote structure.

This provides clients an additional layer of protection, in the unlikely event A3 should run into financial problems.

As shippers increasingly look for enhanced services and added value from their FBAP providers, A3 Freight Payment continues to meet their needs. “Our direction and focus are on using freight data to help companies identify and leverage opportunities for cost savings and efficiencies,” Cameron says.

AFS Logistics: Data-Driven, Time-Tested Logistics Expertise

Now in its fifth decade, AFS Logistics has expanded from one location in Shreveport, Louisiana, to eight locations in North America. It manages more than $11 billion in freight spend and helps more than 1,800 clients across 35 countries save more than $180 million from their annual transportation expenses.

In 2023, for the fourth time, AFS Logistics was added to the Inc. 5000 list, a recognition that it remains one of the country’s fastest-growing private companies. Its growth is a result of both organic client growth and acquisitions, says Scott Matthews, president, freight audit and payment.

Even as it has grown, AFS retains the flexibility to support small shippers, global enterprise organizations, and most companies in between. Its client list spans consumer packaged goods companies, retail and ecommerce firms, medical and healthcare enterprises, and consumer electronics companies, among others.

“We provide scalable freight bill audit and payment services with the flexibility to handle everything,” Matthews says.

AFS’ audit process typically identifies errors that account for up to 8% of clients’ transportation expenses, Matthews says. The mode of transportation and audit rules established by the client may impact what an individual client may observe, he adds.

“We provide scalable freight bill audit and payment services with the flexibility to handle everything.”

Scott Matthews
President, Freight Audit and Payment
AFS Logistics

Establishing a Continuous Improvement Process

AFS partnered with a large consumer electronics and technology client that has significant global transportation spending, as well as complex business rules, coding logic, and match payment criteria.

AFS established a continuous improvement process, including identifying and prioritizing transaction types that were falling into exceptions and required manual interventions.

AFS then worked with the company and its carriers to define the root causes of the process failures, and then implemented corrective action to prevent future transactions from moving into exceptions. “This improved the first pass process yield and the invoice audit cycle time,” Matthews says.

AFS will continue to grow both organically and through acquisitions, Matthews says. “The acquisitions provide access to a greater volume of market data that can be leveraged to the benefit of our clients, while continued investments in our AFSmart technology suite ensures that cutting-edge solutions remain as a foundation to provide excellence in client deliverables,” he says.

ARTC Logistics: Trustworthy and Transparent

ARTC Logistics, formerly AR Traffic Consultants, brings more than five decades of transportation experience and expertise, as well as a proprietary suite of technology tools to help its clients manage their freight expense.

The company’s flagship software, CalcRate, streamlines shipping processes and reduces shippers’ costs by storing all its clients’ carrier rates and supporting carrier selection information. It also provides rating and freight audit/payment and tracking functions.

ARTC Logistics’ CalcRate Shipping Portal combines all elements of the company’s other products, including rate shopping, carrier selection, load tendering, shipment rating, advance ship notification, and tracking and reporting functions. Shippers can easily use all products from one site.

Over the past year, more shippers have focused on managing their inbound freight spend, says Nick Fisher, director of sales and partnerships. However, they typically don’t control these shipments, which are tendered by their vendors, he adds.

To help manage this expense, ARTC’s Vendor Portal enables them to easily let their vendors know which carriers they should use.

“The vendors can use it to access open orders for their customers (ARTC’s shipper clients) and then the portal will automatically select the appropriate carrier and tender the load,” Fisher says.

The Vendor Portal also provides advance shipment notices (ASNs) so shippers can track shipments and immediately account for freight costs, he adds.

ARTC Logistics studied the inbound routing expense for a long-term client. The analysis revealed that vendors were misrouting when shipping collect to the company, with the extra costs totaling about $20,000 per month.

Based on this information, and to minimize the likelihood of future overcharges, the client decided to use the inbound routing portal.

“When it comes to freight payment and audit, having access to the stored contracted rates will allow you to be more effective in auditing the freight bill.”

Nick Fisher
Director, Sales and Partnerships
ARTC Logistics

Conducting In-Depth Analyses

Shippers looking for in-depth analyses of their freight expense can work with ARTC Logistics to conduct a range of studies.

These include analyses of routing compliance to identify shipments that weren’t tendered to the shipper’s preferred carrier; carrier report cards to measure on-time performance; evaluations of LTL and truckload shipments to determine those that can be combined into multi-stop, multi-origin truckload shipments; and inventory supply point studies to determine the most cost-effective sourcing locations.

To ensure carriers are charging ARTC’s clients the amounts to which both parties agreed, ARTC enters the contractual amounts within its own database. This runs counter to some organizations, who rely on accessing carriers’ rates in real time.

“There are some advantages to getting the rates in real time when you’re rate shopping for load planning,” Fisher says. “However, when it comes to freight payment and audit, having access to the stored contracted rates will allow you to be more effective in auditing the freight bill,” he adds.

By continually working with its customers and their carriers, and maintaining ongoing investments in technology, ARTC Logistics is helping its shipper clients more effectively compare and contrast shipping options.

Cass Information Systems Inc.: Expense Management Expertise

Cass Information Systems leverages its more than six decades in the freight audit business to move beyond traditional freight audit and payment and provide transportation spend management.

“Audit and paying freight bills remain our foundation, but we also offer other services that can help both shippers and carriers,” says Jeff Carlson, vice president of global sales and marketing.

An example is the Cass Financial Suite®, which offers unique working capital programs to benefit both shippers and carriers.

Through the Cass Trade Finance Network™, in which Cass acts as an intermediary between shippers and carriers, shippers can support a low-cost early payment program to help carriers optimize cash flow in the wake of payment terms extensions.

While other quick payment solutions can be found, they typically don’t involve the shipper and are expensive for the carriers, says Melia Cothran, director of marketing.

Each year, Cass’s 1,300-plus employees manage more than $90 billion in disbursements, and process and pay 50 million invoices covering transactions that span 185 countries and 114 currencies. “A major differentiator for us is the fact that we’re global across all modes,” Carlson says.

One Cass client is a shipper operating in 100 countries and producing 300,000 products. Management needed to roll up the company’s global, multi-modal freight data into one platform to gain global visibility to freight movement and costs.

“It was a monumental undertaking because they had been very decentralized and had numerous other ERP and TMS systems to integrate with,” Cothran says. Working with Cass, the company rolled out a global freight payment program by region. Cass handled the onboarding of ocean, air, and parcel carriers.

Since going live, the company has enjoyed savings of 1 to 5% of its transportation costs; the exact rate varies with the transportation mode, the carrier, and the region of the world. The company has gained global and regional views of its shipments, costs, carriers, and other information. It has also been able to execute master global freight rate agreements, further driving savings and simplifying rate management.

“A major differentiator for us is the fact that we’re global across all modes. We’re seeing growth because we’re evolving with our customers.”

Jeff Carlson
VP Global Sales and Marketing
Cass Information Systems Inc.

Securing Transactions

Cass Commercial Bank, a wholly owned subsidiary, offers Cass clients confidence that their payment transactions are secure, audited, and regulated. As a public company, Cass’s financial and corporate information is readily available and shippers can be confident Cass employs the controls needed to protect their funds. Its sophisticated financial exchange capabilities provide additional benefits, such as precisely timed payments to carriers.

And, the team at Cass continues to drive forward. It’s investing heavily in artificial intelligence and machine learning. “It makes us more efficient and smarter, which in turn makes our shippers and carriers more efficient and smarter,” Carlson says. “We’re seeing growth because we’re evolving with our customers,” he adds.

CT Logistics: 100 Years of Freight Audit Services

Few companies survive to celebrate a century in business. CT Logistics can claim membership in this impressive group.

From its headquarters in Cleveland, Ohio, and regional offices in the United Kingdom and around the world, CT Logistics serves small firms and global enterprises. “Our global locations are essential for understanding and best serving international clients,” says Allan J. Miner, chief executive officer.

At the core of CT Logistics’ success is its history and expertise in the freight bill audit and payment niche. “The real thrust of FBAP business today is actionable, real-time information that shippers receive via the web or create from their FBAP provider’s website,” Miner says. CT Logistics’ sophisticated reporting tools allow clients to easily view graphics, generate pivot tables, and email reports on a scheduled basis, among other capabilities.

CT Logistics employs web services to help its clients streamline the exchange of information, and to obtain management information and reporting. In addition, CT Logistics offers an experienced team of logistics professionals that provide value-added consulting and project management for spend analyses for benchmarking and cost comparisons, Miner says.

Even after a century of success, CT Logistics continues to innovate. To enable shippers to make more informed decisions, many of its offerings are focused on predictive analytics. “Our Qlik® powered reporting system allows clients to create or drill down into any field or data element in any report 24/7,” Miner says. These interactive data visualizations enable clients to more easily identify performance issues and apply corrective actions immediately, he adds.

“The real thrust of FBAP business today is actionable, real-time information that shippers receive via the web or create from their FBAP provider’s website.”

Allan J. Miner
Chief Executive Officer
CT Logistics

Enabling Visibility

When CT Logistics begins to work with a new client, typical freight bill savings tend to run approximately 3 to 7% of freight spend, Miner says. While these savings are clearly important, “the more intangible, but invaluable savings for shippers come with visibility to their shipping data and the predictive analytics that’s possible because of all the data captured,” he adds.

CT Logistics worked with one of the largest and most widely respected technology companies in the world. Prior to this partnership, the company was operating within a decentralized structure, and its business processes were managed on a regionalized basis. The company had only limited—and in some cases, no visibility—to its global transportation spend.

CT Logistics, working from its offices in the United States and the U.K., partnered with the company to deliver a global transportation invoice validation and visibility solution across 41 countries, dozens of currencies, and hundreds of millions of dollars of transportation spend.

“The solution dramatically improved their global logistics and supply chain groups, delivering centralized control, standardized processes, and a global database and repository of shipment activity by country and region,” Miner says. The two companies recently signed another multi-year agreement.

As this example shows, CT is continuously expanding its universe of value-added products and services up and down the supply chain, to provide the visibility and data capture that can help companies make more informed decisions and boost performance.

What’s more, CT Logistics is not done yet. “We continue to expand beyond the core FBAP services to meet the needs of our clients and the market,” Miner says.

CTSI-Global: Logistics Technology and Intelligence

CTSI-Global offers its clients freight audit and TMS solutions across all modes of transportation, industries, and carriers, both domestic and international.

Its world-class technology, refined over decades, fully automates audits for all duplicate, rate, discount, ancillary, and performance metrics. “Because our solutions are fully customizable, we can address logistics needs for any size or type of company,” says Elizabeth Nolan, vice president of contracts and compliance.

Every year, CTSI-Global processes more than 2 billion freight transactions, totaling more than $15 billion in freight dollars.

By leveraging this experience and knowledge, CTSI-Global can catch freight invoice errors that would otherwise go undetected. And because it has personnel in multiple countries, CTSI-Global understands the languages, customs, regulations, and complexities of global business.

Along with saving clients money by identifying carrier overcharges and duplicate billing, CTSI-Global can handle shippers’ freight payment functions, freeing shippers’ employees for other responsibilities, Nolan says.

“Insight from our business intelligence tools is invaluable. It can be used for increased efficiencies and forecasting.”

Elizabeth Nolan
VP Contracts and Compliance
CTSI-Global

Providing Supply Chain Insights

CTSI-Global’s robust Business Intelligence tools can be used to create dynamic reporting, drawing on freight data received from both carriers and shippers. Clients have full transparency into carrier rates, coding logic, and invoices. “This insight is invaluable. It can be used for increased efficiencies and forecasting,” Nolan says.

By leveraging its extensive experience designing customized coding techniques, CTSI-Global can accommodate virtually any request and allocate costs by a range of criteria. In addition, the experts at CTSI-Global review all billing exceptions to modify, reject, or approve them for payment processing—with audit and cost allocation requirements customized to meet each shipper’s needs, Nolan says.

CTSI-Global recently earned the distinction as a Top 25 Regional Supplier to a global technology manufacturer and member of the Fortune 500. They were chosen from about 12,000 supplier candidates.

Even as it earns accolades, CTSI-Global is improving and expanding its offerings to address the ever-evolving needs of its clients. Among other capabilities, CTSI-Global’s Parcel Management solution validates global addresses, prints labels, and tracks shipments with predictive analytics, Nolan says.

CTSI-Global also is taking steps to reduce its environmental impact and that of its clients. “So far this year, the company’s global headquarters has increased energy generated from sustainable sources by 25%,” Nolan says.

“Additionally, we are adding new sustainability management tools for our clients to help them meet sustainable development goals for the three pillars of economy, society, and the environment.”

Fortigo: Leveraging Automation to Optimize Your Supply Chain

For more than 20 years, Fortigo has pioneered the one system—any shipment transportation management system (TMS) and freight audit solution. By marrying its TMS and its freight audit and payment (FAP) service in a closed-loop ecosystem, Fortigo can offer its clients maximum visibility and hard-dollar savings.

Historically, TMS solutions have been geared to a specific geography. Shippers who operated in different regions of the world would need to work with multiple systems, and often lacked macro visibility into their global operation.

Through its cloud-based TMS, Fortigo can cover any shipment, any mode, and any geography. The solution also removes limits on the number of carriers, rates, or shipping data, so companies can maximize efficient shipping both regionally and globally, a step towards complete transportation network optimization.

They can also rely on one system of record for full visibility into their global supply chain. Similarly, Fortigo’s freight audit system can pay carriers in any geography and with any currency.

Pairing Fortigo’s freight audit service and TMS in a single, closed-loop system means shippers gain access to thousands of carriers and are able to enforce business rules and easily identify incorrect charge codes throughout the shipment process. This can compound savings for customers, while providing maximum visibility, cutting costs, and improving overall supply chain efficiencies.

“Fortigo’s one-stop system offers a proven track record of transportation savings and provides features that simplify all aspects of a global, enterprise supply chain.”

George Kontoravdis
Founder and President
Fortigo

Logistics Technology—On Demand

On-Demand logistics technology enables companies to deploy Fortigo’s solutions in less than six weeks thanks to minimal IT resource requirements. Fortigo’s TMS and freight audit solutions are trusted by large, multinational companies with complex constraints and global shipping across all geographies, using multiple modes of transportation. Their customers include the world’s largest airlines.

Fortigo’s freight audit service eliminates overcharging and identifies incorrect charges based on multiple criteria, including carrier service level agreement, negotiated rate sheets, and volume discounts.

Fortigo also guarantees the accuracy of its freight audit process—an industry first feature that customers love. Through its expansive investment in data security, Fortigo safeguards all customer data.

In mid-2022, Fortigo was named an inaugural FedEx Certified Freight Bill Audit and Pay (FBAP) provider. Fortigo once again received this prestigious certificate in 2023. Additionally, Fortigo is the only multimodal TMS provider that is also a certified FBAP provider by FedEx for both parcel and freight (LTL).

To adapt to the changing logistics environment, Fortigo continues to expand its offerings. Over the past year, it has added more than 80 new features and enhancements, such as integrations with quote-based carriers and cargo airlines, to its solution.

First-year savings for customers switching from manual processes to Fortigo’s freight audit solution can range from 7 to 12%. Established customers typically see annual savings ranging from about 1 to 5%, with the exact rate depending on the volume of shipping and complexity of their transportation network. Fortigo is a value-add solution with customers seeing return on investment on day one of activation.

From the early days, the team opted to grow organically and focus on delivering customer-oriented solutions. This past July, Fortigo announced the opening of a new operations center in Greece.

The new team will include supply chain and software development experts and is expected to double in size over the next two years.

“As demand for cloud-based supply chain solutions rapidly grows in Europe, we are excited to expand our presence,” Founder and President George Kontoravdis said in a statement.

The new operations center will tap into the highly educated and experienced local talent pool, Kontoravdis added.

nVision Global Technology Solutions, Inc.: Complete and Global Freight Management

“It’s often said that today’s differentiating features are tomorrow’s minimum expectations,” says Keith Snavely, senior vice president, global sales. With that in mind, nVision Global is preparing for this shift through its ability to provide extensive data capture, to clean and normalize data, and to offer strong analytical tools.

“Our nSight Global Freight Management Analytics Tool is a robust, evolving solution featuring hundreds of key performance indicators with thousands of variations that allow the user to streamline and optimize their global supply chains,” he says.

Over the next few years, nVision Global will build on its success by partnering with its clients and acting as an extension of their logistics and accounting departments, and providing a one-stop, all-inclusive freight audit, payment, and transportation spend management solution. This will encompass several systems.

One is nVision’s Global Payment Solutions. With the onset of the Sarbanes-Oxley Act and as transportation expenditures receive closer scrutiny, companies are looking to partner with a single-source provider that can provide payment solutions on a global scale, Snavely says. “nVision Global has seven corporate-owned, strategically placed, full-service processing centers on three continents to accommodate our customers globally, as well as meet their regional requirements,” he says.

In addition, nVision Global will continue to evaluate customers’ global needs and open additional centers as needed to meet them.

“As shippers are challenged to do more with less, freight audit providers are helping them reduce supply chain costs.”

Keith Snavely
SVP Global Sales
nVision Global Technology Solutions, Inc.

Expanding Capabilities

nVision is also working to maintain its edge in transportation spend management, building on its extensive, internet-based information analytical tools, as well as its data cleansing/normalization and harmonization processes. These initiatives will add greater value to shippers’ data analysis, Snavely says.

Additionally, as companies need to do more with less, nVision’s clients have come to rely on the company’s analytical tools to help them optimize and streamline their overall supply chains.

Along with global mapping, trending, benchmarking, ad-hoc report writing, and other capabilities, nVision Global continues to expand its nSight Global Freight Management Analytics Tool.

By building on its transportation management services and solutions, nVision Global is moving beyond simply processing and paying invoices and capitalizing on the extensive operational business intelligence (OBI) captured from clients’ freight invoices.

nVision helped a leading supplier of automatic test equipment and interconnection systems to efficiently manage global freight invoices for transportation providers across multiple countries and currencies. To accomplish this, nVision designed a global solution that allowed the company to roll up each division’s total transportation spending into one global database, providing worldwide visibility in a real-time environment.

This capability enabled the company to cut its pool of suppliers to a more manageable number, while continuing to serve its customers. It also achieved savings through the freight invoice audit, as well as reduced internal administrative costs and transport costs.

“Through the utilization of nVision’s web-based applications, the company is able to realize year-over-year savings, supply chain efficiencies, and productivity gains,” Snavely says. “We strive to accomplish this for all our customers.”

U.S. Bank Freight Payment: Freight Audit and Payment Made Easy

As a full-service, federally regulated financial institution and provider of FBAP services, U.S. Bank focuses on technology, security, and reliability while delivering solutions that satisfy clients’ needs. Data dashboards, analytics, and self-service capabilities, which the bank co-creates with its clients, remain areas of focus as well.

“We have multi-year investments in technology and data analytics to provide actionable insights that will help our customers improve their operations,” says Scott Burglechner, senior vice president and head of freight payment product management. Depending on a shipper’s current FBAP operation or methodology, savings in the first year can be up to 10%, he says.

“U.S. Bank’s FBAP platform enables shippers to deliver dependable and predictable payments to carriers and helps resolve exceptions quickly and reduce errors by collaborating online, in real time.”

Scott Burglechner
SVP & Head of Freight Payment Product Management
U.S. Bank

Enhancing Shippers’ Working Capital

In today’s uncertain economic environment, an increasingly important differentiator is U.S. Bank’s ability to help shippers enhance their working capital by extending transportation freight payments to 60 or 90 days, or even longer, without having to renegotiate contracts, Burglechner says.

At the same time, U.S. Bank provides carriers accelerated payment options to meet their cash flow needs.

The FBAP platform U.S. Bank has developed provides end-to-end visibility for both shippers and carriers. “The platform enables shippers to deliver dependable and predictable payments to carriers and helps resolve exceptions quickly and reduce errors by collaborating online, in real time,” Burglechner says.

As a result, shippers can focus on collaborating for strategic supply chain improvements, instead of spending time resolving invoice and payment disputes.

Within its world-class, Tier IV data center, which offers one of the most reliable, fault-tolerant, and secure environments available, U.S. Bank employs segregated builds to prevent co-mingling of customer data. “We also safeguard sensitive supply chain data to help protect partners and suppliers from cybercrime,” Burglechner says.

A large apparel retailer set a goal of reducing costs by millions of dollars, and needed a trusted partner to provide a reliable, efficient, and sustainable FBAP process that featured robust reporting and strategic business intelligence. U.S. Bank’s small parcel tool provided an audit program to identify savings opportunities across millions of packages per year; it also offered insights on delivery service and mode selection that provided additional savings. In the first year alone, the retailer’s savings topped 50% of its initial 10-year savings goal.

U.S. Bank Freight Payment will continue to invest in products, services, and solutions that make clients’ lives easier, including automation, APIs, faster payments, and advanced analytics solutions for more forward-looking decision making.

It will also continue to make it easier to audit and approve transportation expenses when it is important to conduct a manual review of the invoice prior to payment. And as part of the larger U.S. Bank enterprise, FBAP services will continue to benefit from investments and innovations in cloud computing, AI, security, reliability, payments, and sustainability solutions for customers, Burglechner says.

Choosing the Right Provider: 10 Questions

The following questions can help you determine if a freight bill audit and payment provider is the right fit for your organization.

1) Do the provider’s capabilities and technology investments line up not only with your organization’s needs today, but its likely needs five or 10 years from now?

2) Can the company help you improve your FBAP processes?

“Companies should expect recommendations from a trusted FBAP provider that can improve transportation expense control, increase automation with quality data and intelligent automation, and provide greater working capital,” says Burglechner from U.S. Bank.

In contrast, the short payment model, which is common in the FBAP space, allows problems to continue, says Craig Cameron, VP of sales and marketing, A3 Freight Payment. Say the audit detects an error of $50, and the provider short pays the carrier by $50 and then lets the carrier know the reason for the short payment. However, this information often doesn’t get to the correct person. So, the carrier’s system continues to bill for the $50. “To truly fix the problem, you need a front-end resolution process,” he says.

3) How does the provider store freight rates?

A growing trend among shippers and logistics companies is to access carrier rates in real time, says ARTC Logistics’ Fisher. While this can offer some advantages, it comes with a significant disadvantage: Real-time rates won’t necessarily match the rate in your contract. For example, the freight bill says a shipment cost $1,000, and when the shipper checks the carrier’s website, it also shows $1,000. However, if the contract has a rate of $900, the shipper likely will overpay without realizing it.

4) How strong are the provider’s relationships with carriers?

“Shippers rely on carriers to move freight,” says Dani Funk Heimsoth, senior director of development, Trans Audit. “You (and your audit provider) need to maintain healthy relationships with them to ensure the process runs smoothly.”

5) What steps has the company taken to ensure its processes and controls are secure and effective?

FBAP providers should have complete policies for information security and network security, including data segmentation measures as well as standards for disaster recovery, incident response, change management, and physical security, says CTSI-Global’s Nolan.

You also want to look for current externally audited financial statements, as well as a fidelity bond and cybersecurity protections and insurance, Cameron says. (Fidelity bonds protect against losses caused by someone else’s acts, such as acts of forgery or fraud.)

In addition, freight bills contain reams of valuable information about supply chains. “The company should have established processes and procedures in place to ensure online security and maintain the integrity of trusted transactions,” Burglechner says.

6) Does the firm offer both flexibility and scalability?

“Ideally, the firm will have expertise, the resources needed to regularly upgrade its technology, and the agility to respond quickly to clients’ needs,” says Matthews from AFS Logistics.

7) Will the provider offer a list of client references?

“Also ask for the tenure of the provider’s top 20 clients, as well as its client termination rate over the prior year,” Matthews says.

8) How long has the company been in the core FBAP business?

Some history suggests it will have staying power.

9) What expertise does the provider have in handling the growing volume of regulatory requirements from governments and clients?

Companies need to evaluate and adapt to shifting requirements, such as those focused on SOC, data protection, and ESG reporting, Nolan says.

10) Does it have full-time resources in the regions, time zones, and languages in which your company has transportation activity?

This can streamline communication and problem solving, nVision’s Snavely says. Similarly, in-country accounts can help in providing efficient and cost-effective remittance to transportation providers, he adds.

How AI Will Transform the Freight Payment Market

By Hannah Testani, CEO, Intelligent Audit

Unlocking artificial intelligence’s vast potential starts with impeccably cleaned, labeled, and indexed data. Without this bedrock of standardized and reliable datasets, even the most advanced AI can fall flat.

When evaluating FBAP providers, shippers should prioritize providers who are deeply committed to data normalization, cleansing, and meticulous labeling. Only then can they be assured of data that’s not just formatted but fine-tuned for immediate, insightful action.

Forging Strong Relationships with Carriers

The vitality of fostering and sustaining deep, respectful relationships with carriers transcends mere advice—it’s a non-negotiable foundation for our operation’s continued success. These fortified relationships not only pave the way for advantageous negotiations and bolstered trust but also lay the groundwork for collective problem-solving.

The synergy between shippers and carriers underpins our operational success, and trust is its cornerstone. But trust doesn’t magically appear—it must be deliberately cultivated. At Intelligent Audit, our approach to building trust is anchored in transparency. Leveraging our extensive experience, we’ve honed assets such as our logistics network optimization suite, advanced business intelligence tools, and cloud-enabled carrier payments.

How Intelligent Audit Approaches the FBAP Market

At Intelligent Audit, our primary mission is to empower our customers, transforming them into more impactful and influential players in their industries. Our foundation is built on a robust technology-first ethos, allowing us not only to scale rapidly but also to furnish our diverse clientele—from startups to industry titans—with sophisticated analytics. This empowers them to derive invaluable insights and make decisions that significantly bolster their bottom lines.

In the complex realm of FBAP, what sets us apart is our profound understanding of our shippers’ nuances. While many navigate their operations using standard KPIs like cost per mile or shipment, these traditional yardsticks, especially for heavy spenders in transportation, often overlook subtle data anomalies. Our challenge, and indeed our strength, lies in harmonizing these KPIs with the intricate nuances of expansive shipping operations.

Acknowledging that no single team can master the full operations of a vast shipper, we’ve embraced advancements in computerized intelligence. Our proprietary machine learning algorithms are engineered with an acute sensitivity, designed to spot even the slightest deviations in massive datasets, ensuring comprehensive oversight for even the most extensive shippers.

But data alone doesn’t tell the entire story. The vastness of many shippers’ transportation networks means variations are par for the course. Here, the true magic happens when industry expertise marries technological innovation. At Intelligent Audit, this union is our cornerstone. By intertwining our machine learning prowess with decades of FBAP experience, we confidently discern any dataset variations that raise red flags.

Our proactive approach goes beyond mere detection. We prioritize alerting our shippers about these anomalies at lightning speed, allowing them swift rectification. A testament to our capability is our detection of a discrepancy where shipment weights were erroneously logged in a European format, preventing a client from incurring substantial unwarranted charges.

Yet, our commitment is holistic. Leveraging our advanced platform and unmatched expertise in data normalization, coupled with our innovative analytics and visualization tools, we ensure shippers are primed for rapid, results-driven decision-making.

Gain Peace of Mind with a Post-Payment Audit

Utilizing the latest data security measures and emerging technologies, Trans Audit performs transportation post-payment audits for hundreds of Fortune and Global 1000 corporations worldwide across every industry.

Recovering overbillings and overpayments addressing all modes of transportation and all payment points, Trans Audit has delivered more than $1 billion in benefits to its Clients.

“As a privately held company solely focused on post audit, Trans Audit is Client-centric and provides a holistic approach,” says Vikki Van Vliet, senior vice president of sales and marketing with Trans Audit. This experience is simple, swift, and straightforward from onboarding through claims resolution.

A crucial component of the onboarding process is data ascertainment. Clients either process their transportation payments internally, or they employ a freight audit and payment provider (FAP). Trans Audit works with a large number of Clients that process their data both internally and with virtually all FAPs, creating a strong knowledge base for a variety of payment platforms.

Clients find the post audit process complements the pre-audit and payment process, whether outsourced or internal. “Our onboarding process is refined, requiring minimal Client resources at the onset, as well as for the ongoing support of the post audit,” says Dani Funk Heimsoth, senior director of development.

Positive relationships with carriers are extremely important to the post audit process. Shippers rely on carriers to move freight. Healthy relationships with carriers must be maintained by shippers and their post audit provider to ensure the process runs smoothly.

Carriers have described Trans Audit’s claim filings and refund process as “clear, concise, and complete,” Funk Heimsoth says. According to Funk Heimsoth, “Carrier feedback touts Trans Audit as the largest post audit provider submitting more claims and ascertaining more refunds in the industry.”

Analytics and metrics are critical aspects of any audit process. Trans Audit’s proprietary technology platforms are crucial to its ability to efficiently and effectively perform post-payment audits around the world. “The desire on the part of many shippers for data and analytics reflects their need not only for recouping overpayments and overbillings which remains key, but for the insight that will help them take intelligent corrective action,” says Van Vliet. Trans Audit’s cloud-based technology TransPortal+™ driven by Microsoft Power BI provides interactive dashboards and analytics on claims and refunds for its Clients.

Staying at the forefront of the industry, Trans Audit looks to continuously improve its offering through emerging technologies like artificial intelligence (AI). “Transportation providers and their Clients must remain diligent and aware of how AI can impact the market,” says Peter Kerwin, head of audit operations. “The integrity and protection of Clients’ data is of the utmost importance to Trans Audit, and thus Trans Audit employs the latest security protocols for all Client data.”

With a keen emphasis on the end-to-end management of the entire post audit process, Trans Audit does not outsource any element of its services, provides its Clients with analytics and insight, and monetary benefits, with an intense focus on technology and security, giving their Clients peace of mind™.

When to Engage an FBAP Provider

How large does a company’s transportation spend need to be before engaging a freight bill provider makes sense? While no single number will apply to all organizations, it’s possible to draw a few guidelines.

An FBAP provider tends to start making sense when shippers are spending about $500,000 annually on freight. “At this point, inefficiencies in back-office process exist and an FBAP service provider can automate the process and lessen the cost for the shipper,” Matthews says.

Looking at shipment volume, a shipper with more than about 30,000 shipments annually will typically realize economic benefits by outsourcing freight audit, Snavely says.

These include freeing internal resources from handling this function, enhanced data capture, and automated general ledger account coding, among others. In addition, the shipper will gain access to the freight bill provider’s technology and services, such as rate negotiation preparation and transportation management solutions.

Instead of spending time resolving invoice and payment disputes, shippers can focus on strategic supply chain improvements with freight bill audit and payment platforms.

“The Port of New York and New Jersey saw an enormous spike in volume during the pandemic,” says Patrick Thrasher, the port’s senior program manager for capital program delivery. The port hit volume levels that had been projected for five to seven years in the future, he adds.

Across the country, employees at many ports worked tirelessly to meet the increased demand. In addition, many carriers diverted ships to less-congested ports on the Gulf and East Coasts, or deployed smaller ships that could more easily navigate into ports, says Doug Thiessen, ports and maritime leader in the western United States for HDR, Inc., an engineering services firm.

While necessary to keep goods moving, the steps required to correct for the backlogs highlighted the aging infrastructure and lack of capacity at some ports, and the need for investments in infrastructure, technology, and environmental solutions.

“U.S. seaports need continued large capital investments in modernization to repair and replace older docks and piers, deepen channels, install larger and improved rail yards, improve electrical service, and improve landside road links,” Thiessen says.

Other needs include larger and faster cranes; electrified yard equipment; and zero-emission and autonomous street trucks.
Now, several years from the height of the pandemic, port congestion is easing and many shipping costs have dropped. While these changes sound positive, the main driver is weaker consumer demand, says Edward Hertzman, CEO of Hertzman Global Ventures, a supply chain intelligence and solutions firm.

Some investments to address the recent challenges have begun. “Almost all ports are making some type of investment in improvement,” says Spencer Shute, principal consultant with Proxima, a supply chain consultancy.

Targeting Efficiency and Visibility

“Everybody is aiming to become more efficient,” Shute says, adding that automation allows ports to respond more nimbly as demand shifts without jeopardizing safety.

Investments in connections to rail service remain critical in many West Coast ports, says Kenneth Cochran, managing director in the consumer and retail group of Alvarez and Marsal, a global professional services firm.

Continuing investments in chassis management and repair services are also a focus, as chassis availability remains a key constraint. Overall investment in automation in the United States still lags the rest of the globe due to resistance by some labor groups, Cochran adds.

Although still nascent, the growing preference for East Coast ports by many carriers highlights the importance of a diversified supply chain, not just overseas at the factory level, but locally at the port level. “Diversification will be part of the go-forward strategy for most organizations,” Hertzman says.

As ports consider their capital needs, part of their funding may come in the form of federal dollars from programs like the National Infrastructure Project Assistance (Mega) program.

This program “supports large, complex projects that are difficult to fund by other means and are likely to generate national or regional economic, mobility, or safety benefits,” according to the U.S. Department of Transportation (DOT). Eligible projects are of national or regional significance, and could include bridges, ports, and other structures.

Both private and public sectors also are investing in advanced data capabilities and platforms. The goal? “To provide real-time visibility for ports, shippers, freight forwarders, brands, and retailers so everyone knows exactly where the goods are and how to plan accordingly,” Hertzman says.

The Freight Logistics Optimization Works (FLOW), which launched in March, is an effort by the White House and multiple supply chain companies to develop a digital tool that provides information on the condition of a node or region in the supply chain.

Through the FLOW pilot, the DOT acts as an independent steward of supply chain data across shipping lines, ports, terminal operators, truckers, railroads, warehouses, and beneficial cargo owners. With this information, participants can make more informed supply chain decisions.

Addressing Environmental Concerns

Along with efficiency, port investments are addressing environmental concerns and climate change. Numerous electric vehicle (EV) demonstration projects are underway, with a goal of cutting emissions from port facilities and the transportation options serving ports.

In addition, greater use of intermodal rail can cut emissions while helping to address the truck driver shortage.
Hertzman recommends monitoring California and the California Air Resources Board (CARB).

“Companies will have to be CARB compliant in the years to come,” Hertzman predicts, adding that he believes other states will mirror their regulations.

In 2020, for instance, CARB approved a new regulation that builds on the At-Berth Regulation adopted in 2007, adding new vessel categories that will be required to control pollution when they run auxiliary engines or boilers while docked.

California isn’t alone in tightening environmental regulations. “It’s worth noting the investment the Port of Shanghai is making in carbon emissions,” Hertzman says, adding these investments likely are attempts to get ahead of expected requirements from importers, retailers, and brands.

In short, ports are preparing for a changing future. “Port infrastructure projects take years to plan, design, fund, and construct,” Thiessen says. “Planning ahead with ports and marine terminals to ensure modern, cost-effective facilities are available to handle your cargo is important.”

The Port of New York and New Jersey saw cargo volume hit nearly 9.5 million twenty-foot equivalent units (TEUs) in 2022, up 5.7% from 2021. That moves the port into second place in national port rankings, behind the Port of Los Angeles.

Port Authority of New York and New Jersey

Building 21st Century Infrastructure While Keeping the Region Moving

Cargo volume at the Port of New York and New Jersey hit nearly 9.5 million twenty-foot equivalent units (TEUs) in 2022, up 5.7% from 2021. That was enough to move the port into second place in national port rankings, behind the Port of Los Angeles.

Helping to speed movement of the growing number of goods arriving at the Port of New York and New Jersey is a range of equipment, including six state-of-the-art container terminals that can handle nine 14,000 TEU-capacity vessels at the same time, one billion square feet of warehousing and distribution space within 50 miles of the port, and an ExpressRail intermodal network with an annual lift capacity of 1.5 million containers.

At the same time, the seaport continues to add to its capabilities, improving infrastructure and driving toward its climate goals.

The pandemic, for all the financial and human misery it wrought, also provided “a real snapshot of the demand to come,” Thrasher says.

The seaport’s leadership gained a solid idea of the investments needed to meet expected growth in cargo volume over the next 15 or 20 years, he adds. One example is the $220-million Port Street Corridor Improvement Project, slated for completion in mid-2028. This will modernize one of two main highway interchanges into the complex and provide easier access to the New Jersey highway system—a key feature for the approximately 60,000 to 80,000 trucks that serve the port weekly.

In addition, a freight rail line that runs through the interchange, providing service to the northern portion of Port Newark, will be elevated in order to mitigate flooding.

The work will occur while maintaining adequate service levels for the trucks currently traveling to and from the port. “Much of the complexity and cost of the project comes not from the concrete and the steel, but from managing around operations,” Thrasher adds.

Meeting Climate Goals

The Port Authority of New York and New Jersey, a signatory to the Paris climate accords, has been aggressive in reducing greenhouse gas emissions from the bistate agency’s own operations, as well as those of its users, Thrasher says.

The installation of four direct current (DC) fast chargers at the Truck Welcome Center will help the port drive toward that policy goal, as truck emissions account for about half of the port’s Scope 3 emissions. (Scope 3 emissions are those from the port’s users.)

“The chargers are forward-looking and part of modernizing our legacy infrastructure to today’s standards,” Thrasher says. The project is expected to be completed in 2024.

Multiple other projects are in the planning stages. One is the Port Authority’s southbound connector intermodal project, which will enable trains heading into the ExpressRail Elizabeth facility to exit and enter to the south; currently, freight trains can only enter and exit to the north.

“This will add fluidity and flexibility to that part of the network,” Thrasher says.

The Port Authority also is partnering with the U.S. Army Corps of Engineers to deepen the federal navigational channels into the port from 50 to 55 feet in most areas, and to 58 feet in one channel, as well as to widen the channels at key points.
The project will improve safety and efficiency for vessels currently calling the port and is designed to accommodate vessels with a capacity of up to 18,000 TEUs, allowing them to efficiently navigate to and from the port. Planning is currently underway; the work itself will take about 15 years.

As important as these and other projects are to the port’s continued success, close collaboration and coordination among all stakeholders remain just as critical. “It’s what makes the infrastructure work,” Thrasher says.

The Port of Baltimore handles the majority of the East Coast market’s share of roll on/roll off (Ro/Ro) cargo annually. The port is refurbishing its Ro/Ro berths to better accommodate today’s larger and heavier pieces of Ro/Ro equipment. Photos by Bill McAllen. 

Maryland Port Administration

Building on Centuries of Serving Shippers

Some ports measure their history in decades. The Port of Baltimore, which is managed by the Maryland Port Administration, can look back centuries. It started in the 17th century as an access point for Maryland’s tobacco trade with England. It was designated a port of entry by the General Assembly in 1706.

In the decades since, the port has continued to grow. In 2022, it handled a record $74.3 billion worth of foreign cargo.

To ensure it can continue to serve shippers for centuries to come, the Port of Baltimore continues to invest in its infrastructure and operations. Among the most significant projects are these:

• The Howard Street Tunnel (HST) Project. This project will improve vertical clearance along CSX’s I-95 Rail Corridor, enabling double-stack trains to travel between Baltimore City, Maryland, and Philadelphia, Pennsylvania, and providing the East Coast with seamless double-stack capacity from Maine to Florida, as well as the ability to send double-stacked containers by rail into the Ohio Valley and on to Chicago.

The Howard Street Tunnel, a 1.7-mile-long railroad passage under the heart of Baltimore City, was constructed in 1895. Its vertical clearance is up to 18 inches less than the 21 feet necessary for double-stack trains, making it one obstacle restricting the ability of these trains to move along this section of the CSX network.

The HST Project, which is underway and slated for completion in 2026, will eliminate the remaining double-stack obstructions in Maryland, Delaware, and Pennsylvania between Baltimore City and Philadelphia. It’s expected to increase the port’s business by about 160,000 containers annually, generating about 6,550 construction jobs and an additional 7,300 jobs from increased business.

• Mid-Chesapeake Bay Restoration Project. To maintain the depths and widths needed for safe navigation, the U.S. Army Corps of Engineers annually dredges nearly 5 million cubic yards of material from the channels and anchorages serving the Port of Baltimore. Once the material is removed, it needs to be contained or disposed of in an environmentally conscious manner.
This project will reuse dredged material to help rebuild James and Barren islands, restore coastal shorelines, and provide a long-term placement site for dredged material.

It also will restore 2,072 acres of lost remote island habitat on James Island and 72 acres of remote island habitat on Barren Island.

• Rail Capacity Modernization Project. This project will reconstruct and update the Seagirt Marine Terminal’s intermodal rail yard infrastructure to support increased demand for double-stacked trains of containerized cargo.

Along with providing more seamless and efficient rail operations, these updates will improve air quality around the port by increasing rail usage and converting existing diesel-fueled rail yard operation to electrified equipment.

Additional rail usage will also help alleviate ongoing logistical bottlenecks on major interstate highways.

Scheduled for completion in 2025, the project includes the building of four new rail tracks totaling 17,670 track feet, as well as two crane rail beams totaling 7,000 linear feet within the Seagirt Terminal.

• Refurbishing Roll On/Roll Off Berths. The Port of Baltimore is refurbishing its roll on/roll off (Ro/Ro) berths to better accommodate today’s larger and heavier pieces of Ro/Ro equipment, like farm and construction machinery.

“Baltimore handles more of this cargo than any other U.S. port,” says spokesperson Richard Scher. In 2022, the Port of Baltimore handled a record-setting 765,019 tons of imported Ro/Ro cargo, besting its previous record of 603,516 tons in 2019.

This is part of a larger berth reconstruction plan to address the impact of predicted climate change by including storm drain improvements and the construction of a sea curb, or short seawall that protects against sea level rise and storm surge, at the Dundalk Marine Terminal, and eventually, at each newly reconstructed berth. Dundalk will be the first terminal in the nation with this arrangement.