Manufacturers advised to change logistics strategies

In his address before the Conveyor Equipment Manufacturers Association’s 78th Annual Meeting in Palm Springs California last week, Richard Thompson said the Panama Canal Expansion will be “transformational.”

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A prominent industry analyst maintains that several key infrastructural events will shape the global supply chain in the coming years.

In his address before the Conveyor Equipment Manufacturers Association’s (CEMA) 78th Annual Meeting in Palm Springs California last week, Richard Thompson said the Panama Canal Expansion will be “transformational.”

“It will have huge consequences for U.S. West Coast seaports,” he said Thompson, executive vice president, global supply chain practice for Jones Lang LaSalle in Chicago. “And it will mean many of you will be shipping and sourcing through alternative ports in the East and Gulf.”

Indeed, Thompson maintained that Panama has aspirations to become a “logistical hub” as it completes its widening process. That means more traffic for gateways like Charleston, Savannah, and Miami.

“We can already see companies like Wal-Mart moving part of its supply chain away from LA/Long Beach,” he said. “The concentration of Asian imports will not be as intense there has it has been in the past.”

Thompson was the featured speaker at CEMA’s “global supply chain” session. CEMA is a small but highly influential shipper association comprising the most prominent multinational companies in the conveyor equipment sector – a group that literally moves the world’s goods. Although his remarks provided a general overview of the intermodal arena, he stressed that private investment in U.S. infrastructure would continue to inform shipper decisions.

“While we all wait for the government to spend money repairing our highways and roads, rail providers are using money from investors like Warren Buffet and Bill Gates to get the job done,” he said.
Buffet, who owns BNSF, and Microsoft founder Gates, who owns part of CN, are just two examples of “visionary” businessmen who see the future in rail.

“Given all the energy and regulatory issues related to trucking, the smart money is on direct rail service or intermodal in the future,” said Thompson. “All the major U.S. retailers are reconfiguring their supply chains to be aligned with rail hubs now.”

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About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
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