Some Quick Observations on the week of the ProMat show…

As our new president is “installed” in office this week, the talk continues about the new stimulus plan and how big it grows to. I have some quick observations to make to think about in regards to the state of our supply chain nation.

This past week I rode Amtrak out to Chicago for the ProMat Materials Handling Show. Rolling through Harrisburg the Norfolk Southern intermodal yard was full of trains loaded with domestic containers and trailers. There were very few sea containers to be seen. In fact, for the rest of the trip it was rare to see a sea container on any trains. It looks like the imports are down, way down.

Rolling into Pittsburgh the steel plants were warm in the below freezing weather. But the blasts were not running. I did not see any blast plumes in Cleveland, or in Gary, or in South Chicago. You could smell the smell of steel being poured into molds in the foundries as we rolled past the big US Steel plants in Pittsburgh and Gary, so some production was in action.

If the big bridge building infrastructure projects get rolling the hot mills should see an increase in business. Perhaps the American steel industry will get a shot in the arm if the infrastructure bill of the stimulus package contains language that says that the steel in the government funded projects comes only from the American mills.

Pulling into south Chicago we rolled past the Union Pacific and Norfolk Southern intermodal yards. Back in October these were busy places. This time there were quite a few empty multi-use “spine” cars parked in the yards. There were many empty double stack well cars too. In the background was a massive stack of empty EMP containers, it looked like it was a solid city block, stacked 5 and 6 high. Based on my quick calculation I think that there are over 4,000 empty domestic containers stacked up in one block of south Chicago. Talk about some capacity sitting in storage, I wonder if there are other huge city block stacks sitting around?

The ProMat show itself was hustle and bustle; just not as much hustle and bustle as years past. All the usual suspects in the material handling world were there, except for Interlake Materials Handling. Interlake filed chapter 11 bankruptcy just the week before. Crown Lift Trucks again were not at the show, having made the decision many years ago that ProMat was just not worth the money. 

I found that some companies were very aggressive, going after business because of a new product or a opening in the competitive field. I did not remember seeing a Chinese forklift company in 2007, there were three this year, all with competent people who spoke very good English. And those booths had attendees engaged, doing more than kicking the tires.  One aggressive Chinese sales manager literally pulled on my sleeve and asked me to come back to his booth with him. Three aisles later he and the general manager, neither who could speak English were showing me a catalog of different steel stacking frames and bins. Except for this one example, each other Chinese booth I stopped at had people who spoke English, and were aggressive with promises to have a quote back to me in just a few days. No quotes yet for the unit that I would sketch out to them. Perhaps they needed to get home first.

What was interesting about the show was there really was business going on. One fellow that I was walking the show with on Monday ended up getting two deals at the show, and he did not have a booth. Some of the exhibitors that I know well said that they were happy with the traffic, that the people coming to the show were not tire kickers but people with a project and a green light to proceed. Life was very busy at the Kiva booth, and at many of the integrated automation vendors. Even some of the shelving and storage folks reported good leads and conversations.

It appears that light directed picking systems are really lighting up. There are new iterations, lights on carts, and a combination of lights and audible instructions coming from a cart that uses proximity logic to the pick locations and a hand held RF to light the lights on the rack and the cart. No massive logical wiring of the lights to a central server, only a simple low voltage power supply to the lights on the pick.

The after-hours watering hole over at the Chicago Hilton, Kitty O’Shey’s was not as hopping as in years past. A few of us noticed that the back bar shelves were empty of the usual array of Irish Whiskey, (along with Scotch and other hard stuff). We only saw two lonely bottles of “protestant” Bushnell’s sitting on the shelf. When my friend asked for a Jamison 18 the barkeep did not have a clue what he was asking for. Sad.

I had been talking to some of the truckload carriers in the past few weeks about the drop in business. I had a lunch with the owner of a good broker based in the area. Volume is down, but not for his operation as I was hearing from the carriers. January is usually slow, but a 60% book at the start of the day is a rather sobering metric to face. 

Chicago is always cold in January. But it got really cold mid week. All of the train traffic out of Union Station stopped when the rear wheel set of a car in the departing Amtrak Southwest Chief decided to jump the frozen switch points and continue straight and not follow the rest of the train through the turnout. It did not take long for the train to stop, the car straddling three tracks and choking the access for the westbound commuter trains and the remainder of the Amtrak trains. No one was hurt in the mess, and no cars actually derailed, but it was a mess that added to the afternoon business in the bar underneath the station as thousands of people waited to get out.

My own train was late departing. Still, a restful ride. Most of the passengers were on their way to Washington DC for the inauguration. There were some of us that were traveling on business, but most of the excitement were from the passengers who were on the way to DC to see their guy take office. Still, the train to DC was not full, there were empty seats in the coaches and empty rooms in the sleepers. The packed trains of this fall were not the order of the season. 

I got home to hear the amazing story of US Airways flight 1549. There is something to be said about having a veteran hand on the stick at a time like that, 28 years with the airline (going back to his PSA service) and over 19,600 flight hours. The Second Officer has 26 years and 15,600 flight hours; and he was the most junior crew member. Flight Attendant Doreen Welsh joined USAir predecessor Allegheny Airlines in 1970. What that whole crew did to get everybody out, and the way the river workers of New York responded was inspiring.

Friday marked my return to the grind of the office. Mixed into the happy news of the USAir 1549 was the expected news of Circuit City having to go the road to liquidation.  Some associates of mine had been at the National Retail Federation show in New York while I was in Chicago. They reported that the NRF show was “s-l-o-w”. A comment that they got from one of the private equity guys that they know that they saw at the show was that there was “no money” for retail. That was the story at Circuit City, no money for a deal, and that was it.

I still have not put it all into perspective. This week was a view of what a friend called a “bipolar economy”, where some parts are declaring that Armageddon has arrived, some are saying that “we the people” have to spend an incredible amount of money that we don’t have to make it right, and some are saying “what problem?” When I mentioned that was “three poles” to my friend he corrected me: “It’s only two poles, one side wants the meds and the other side needs the cash to keep things running.”

What do you think? Is the glass half full, or is it getting drained?