Despite Stormy Weather The Future Is Bright

Some wait for their ship to come in, the logistic community surrounding the Georgia Ports Authority waits for the prior year’s numbers to sail in! The waters were rough, and the storms raged during 2020 but the Port still managed to not only endure but still grow. By moving 4.68 million twenty-foot equivalent container units they outpaced 2019 by 1.8 percent. This may be significantly less growth than anticipated in 2019 without all the criteria we now have available. Pivot, adapt, COVID-19, and zoom are on the top of everyone’s “words I wish I never had to hear again” list but the logistics community did all that and not only maintained the survival of a grateful nation, but still managed to grow. The nation faced its most challenging year and there is still a road to recovery, however it is important to take the time to acknowledge the positive developments and the people who made that possible.

Counting Containers

The year started off strong despite a slowdown in shipping due to trade concerns and covid hitting overseas in late 2019. The Savannah Georgia Port Authority still started the year off by tallying the record-breaking movement of 4. 6 million container units. 2019 saw an increase of 250,000 TEUs from the year before totally 5.6 percent growth.

Global Trade

February continued strong with Georgia Foreign Trade Conference where the impact of trade relations with China were addressed and the positive way the Georgia was positioned was highlighted by Gov. Brian Kemp “With low unemployment, strong consumer confidence and a new trade deal with China that has already resulted in new poultry exports, Georgia is poised to be a bright spot for the nation in the coming year,” Kemp said. “In 2020, we expect port activity, and the logistics industry in general, to remain a strong economic driver, and an important support network for farms and factories across the state.”

In like a lion out like a lamb

March delivered three Neo-Panamax ship-to-shore cranes to the Port of Savannah bringing its total to 36. (highest number in any single terminal in north America) The cranes will make it possible to handle four 14,000-TEU vessels at the same time by 2023. Due to an increased need for storage options the port added 400,000 TEUs of container capacity.

Mega Rail Milestone

A project that has been in the works for four years accomplished a major milestone in April. The GPA added 9 working tracks! GPA Executive Director Griff Lynch took the time to acknowledge the U.S Maritime Administration and the grant that made it all possible, “On behalf of the Authority, I would like to thank Admiral Mark Buzby at MARAD for his support of our vision for the Mega Rail terminal,” Lynch said. “We are also grateful for the leadership of Gov. Brian Kemp, and to the Georgia Congressional delegation, particularly Sen. David Perdue, former Sen. Johnny Isakson and Congressman Buddy Carter for their unwavering support throughout the grant application process and implementation of this critical project.”

Go deep

The dredging of the Savanah is a vital project that has continued during the pandemic.  There is an extraordinary four dredges are working in tendendum 24/7 and they have reached a new depth of 47 feet.  This takes the entire project to approximately 62% complete. The outer harbor has been deepened to 49 feet at low tide. According to Col. Daniel H. Hibner, commander of the Corps’ Savannah Distict “The cooperation we receive from GPA, our dredging contractors, the harbor pilots, the Coast Guard and others demonstrates the dedication this community has for deepening the Savannah harbor.”

Two Cranes

The GPA increased its container-handling and berth capacity when two new mobile harbor cranes were received.  The cranes have a lift capacity of 125 tons and can move containers or breakbulk cargo. The arrival of the cranes via barge signifies an ability to grow container handling services.

Big Ships

In September, the CMA CGM Brazil sailed into Savannah.  This is the largest ship we have hosted so far with a capacity of 15, o72and the arrival was celebrated by the entire city of Savannah include GPA Executive Director Griff Lynch. “As the largest ship ever to call the East Coast moves 5,600 TEUs on and off the largest single container terminal in North America, it is clear that our efforts to expand capacity and reach are taking hold,”

Christmas Miracles

The challenges of delivering Christmas and keeping toilet paper on the shelves resulted in the busiest December ever. 447,525 TEUs passed through the port for an increase of 24 percent! Rail volumes also grew 16.4 percent and helped to cap a successful year in our rail system.

Our Moment

The businesses surrounding and supporting the port were all a part of fostering the growth and keeping Americans supplied during the pandemic.  The entire logistics community should take a moment to be proud of their team and all that they have accomplished. Outsource Logistics rolled into 2020 by rolling out Savannah’s first Semi-Autonomous trucks.   We were featured in the Savannah Morning News and on several news stations. (check it out at the following link: https://www.savannahnow.com/photogallery/GA/20200103/BUSINESS/103009992/PH/1)  Next month we will feature a look at those trucks and how they have impacted our fleet. March brought obvious challenges, but we took the opportunity to make positive safety changes and found innovative was to overcome the challenges. In April Outsource added 500,000 feet of temperature-controlled space in the Pooler,GA area! In July our new updated website hit the internet, please check us out on Outsourcelogistics.com We had many employees start the path of owner operators and several cross the finish line! We celebrated years of service from one to twenty and we could not be prouder.  Kevin Jaynes celebrated 5 years as did David Kugelmann and David Nelome. John Ghee celebrated 10 years and Tony Zeman celebrated 20 years with Outsource Logistics. Thank you for all your hard work and dedication! When Lee Smith, Co-Owner of Outsource Logistics was asked what the key to success for Outsource was he answered, Outsource Logistics Savannah operation has grown in 6 years from 28,000 sq ft to presently 1,440,000 sq ft. Great employees and good customers have allowed Outsource Logistics to continue to grow. The latest addition at Outsource Logistics 1 Knowlton Way Savannah Ga is a pinnacle moment at Outsource. A 785,000 sq ft warehouse. Our entire team is very proud and excited about the future of Outsource Logistics. Our core value is to be good at what we do and to do it well. The future is bright, and we are looking for new members to add to the Outsource Team.” Paul Everett, Co-Owner of Outsource Logistics also expressed gratitude for the team, “The Valdosta and Tifton operations continue to grow at a record pace as well.  We added another 240,000 square feet in Valdosta and 90,000 square feet in Tifton to accommodate our customer’s needs.  We continue to onboard quality CDL drivers and owner operators to get our customer’s products delivered in a timely manner even in the wake of a tremendous capacity shortage.  I am so proud of the teams at all 3 locations!  Our growth is an illustration of what happens when you always put the customer’s needs first and provide a quality service.”

In the Wake 

Now is the time for the logistics community and our world community to come together and rebuild.  The growth here is a light house that we can all strive to reach.  The teams that have produced this growth are incredible and will be up to the challenge.

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A Second Wind for a Second Wave

Novel, unprecedented, no one could have planned for are all words and phrases we have been hearing since the beginning of the pandemic early last year. The optimism we had in March misled us into believing that we would be back to normal by summer, or by fall, or by 2021. Now we are hitting the predicted second wave of the virus and it is no longer novel. While the news about vaccines and treatments is a bright spot for the future currently the hospitals are filling, and the panic buying has resumed. Last March changed the way consumers viewed the supply chain.  Most of us just bought the things we needed without a second thought to how they arrived on the shelves, and then it all changed.  Suddenly a system we took for granted had to be replaced with a new way of doing things. We learned how much we rely on the supply chain to sustain everyday life.  According to a survey done by the Capgemini Research Institute 66% of supply chain organizations say that their strategy will need to change significantly to adapt.  The first wave caused disruptions and issues that are not yet resolved, with 80% of global companies have reporting a negative impact from the pandemic. How can the lessons we have learned help us through the second wave?

Staff Safety First

When covid hit in March essential business had to remain open or our world would have completely collapsed, and this mandated new safety procedures.   Like most businesses Outsource Logistic implemented new policies to operate with little to no contact, created sanitation bags to keep drivers safe and even provided snacks for drivers so they would need to make less stops into convenience stores.  They hired extra staff just for sanitation and did everything they could to ensure the safety of their staff. The logistics industry has always made safety a top priority, but some businesses are more stringent than others.  While we have not seen relief from the virus a combination of distraction from the election and fatigue from distancing has caused many to let their guard down.  Hopefully, this is not true of the essential logistics industry, but if its waned even slightly now is the time to revisit those best practices.  Companies that stay vigilant now will save the health of their staff and incite loyalty from a staff that feels cared for. There are so many facets of covid that are beyond our control, keeping our staff as safe as possible is in our hands.

Change was going to come

The shift to online shopping was increasing year over year prior to covid, the pandemic just accelerated it to a point of no return.  Hold outs that enjoyed retail shopping are now proficient at online shopping, they are likely to convert to this for future use.  Its not just the United States that has shifted to online ordering due to the pandemic, according to forecasts 55% of consumers in China will continue shopping online even after the restrictions are lifted. The retail businesses that have fared the best have already shifted to buy online, pick up in store models which created a new challenge for the logistics industry.  The rapid fulfillment and delivery demands were met with changes to storage.  Closer proximity of warehouses to the products destination is now key and many stores are turning into their own distribution centers for pick up and delivery orders. Retail stores are quick to blame the supply chain for any issue’s consumers are running into which fuels the panic buying. While the interruptions may be a significant issue retailers are facing there are elements that they can control. Retailers are still struggling to know what to order so items are not sitting on the shelves taking up space or running out of desired items. They can tighten up their inventory and ordering process for instore items and time their orders more proficiently.  One option many retailers are utilizing is the limit of items each customer can buy on items like toilet paper and water.  It is likely these restrictions will continue through the next wave.

Global Logistics

One thing the pandemic highlighted is how connected we really are.  While the rest of the country learned about covid in March the shipping industry, which accounts for almost 90% of the global trade volume, was already feeling the effects of the pandemic in the fall of 2019.  China was the origin of the virus and the first country to shut down its manufacturing warehouses.  Most people think of “made in china” items as being trinkets or other trivial items and that could not be further from the truth.  In just one example multiple countries are affected: India is the top producer of generic prescription drugs and 70 percent of the raw the materials come from China. On the opposite end of the spectrum the United States fashion industry which may appear frivolous to some, is a 380 billion dollar a year industry (in the trillions globally), also acquires 70% of its raw materials from China. With less being produced in China less is being shipped and yet those in demand items need to travel so the shift has been to air cargo.  The secondary issue of air cargo is that much of the cargo transported is combined with passenger travel which halted due to the pandemic and has only been slowly returning, this creates a shortage of freight capacity for air cargo. Certain higher end products utilized air cargo to ship the essential electronics for an influx of work from home transitions.  The second wave should not see another dramatic spike in headsets due to many offices not returning to on-site offices and for those who did its likely the equipment was held on to anticipating another shut down. However, the limited space and higher demand also raised prices, so only cost-effective cargo will be shipped by air. Beyond shifting to air there was also more use of trains and long-haul trucks adding pressure to those industries to deliver and as always, it’s not possible to instantly add more trucks and trained drivers.  The demand for drivers is always stronger than the supply.  Companies may want to start training in house to produce more drivers because they will be needed.  These issues have some companies looking at manufacturing closer to home, however the closest option is Mexico who gets 90% of their raw materials from . . .China.  Finding other markets that are not affected by the disruption in China is nearly impossible in the short term, and a long, but necessary road in the long term.

The Key

Building relationships is always important, but especially now. This is the time for businesses who are figuring it out as they go to share vital information with each other.  Logistics industry professionals sharing information with each other is nothing new but sharing those best practices could literally be the salvation many businesses require. Communication is key because the delays are inevitable despite the endless hours and effort being put in right now.  From a consumer side they need to adapt and adjust as well.  Right now, electronics have an estimated 10-week delay, customers need to understand they can have toilet paper or a new I-phone-the logistic industry can only do so much. Informing consumers will be hit or miss in terms of understanding, some people will not be soothed by information while the rest will accept that everyone is doing their best.  Venders and client’s knowledge about the struggles will respond to honest time projects and accept explained delays.  As a nation we are exhausted, and the logistics industry has been working non-stop, but we all must find our second wind for the second wave.

 

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How turkey goes from “farm to table”

Around 88% of Americans will sit down on Thursday for Thanksgiving with turkey as the center of attention. The main thing most people think about when it comes to turkey is what size to get. Senior analyst at the ARC advisory group, Chris Cunnane says, “a pound and a half per person is a good rule of thumb” and then people move on the side dishes.  The logistics world is required to think a little harder since in a typical year over 46 million turkeys are devoured on just Thanksgiving Day alone and Christmas consumes 22 million more.  These few days produce over a billion dollars (average American spends $185.00 per thanksgiving) and turkey farmers depend upon it especially in the four largest producing states, Minnesota (18%), North Carolina (14%) Arkansas and Missouri. Retailers plan 6 months in advance to make sure they have the needed supply to meet the Thanksgiving demand. The road from the farm to the store goes from giants like butterball and local farmers then travels to the consumer via the supply chain.

Keeping it Fresh

There is a ratio of fresh to frozen turkeys for retailers to evaluate.  Frozen turkeys are purchased 90% of the time so the fresh turkeys only must represent 10% of the market. The retailers formulate their strategy and then must work with the turkey farmers so they can schedule accordingly.  The farmers focus on the timing the incubation of the eggs and the raising the turkeys to a suitable size.  Like everything else 2020 has the turkey growers concerned that the market has shifted due to the pandemic.  It is just not the amount of turkeys they sell, but also the size.  They anticipate smaller gatherings equating smaller turkeys. The CDC has recommended that people do not travel and only have small gatherings with those in their own home. Wal-mart, the nation’s largest grocer, is adding boneless and bone-in turkey breasts to this year’s selection.  This year the smaller product is going to move faster and there may be surplus of big birds left over.  Fresh turkey creates another issue because it only has a 21-day shelf life so in addition to the timing for the farmers the carriers have an equally important timing factor to contend with. Carriers mush be ready the exact moment the turkeys are ready for the refrigerated transport to take place. Then the retailers and distributors must take these products in right when consumers are ready to purchase them.  Once the turkeys hit the stores, they are generally only good a few days after.

Let it Go

Frozen turkeys are easier for the supply chain as they can be transported to and stored in refrigerated storage facilities. The turkeys can be stored there until retailers are ready for them. Turkeys are bred and processed all year, so production does not have to increase so dramatically.  Frozen turkeys can be up to three years old before they are sold to consumers!  There is additional pressure on the warehouses to processes orders promptly and it requires more workers and longer hours. Whether fresh or frozen they both must be transported in refrigerated trucks which become scarce this time of year.  Not only are the trucks in high demand so are the drivers behind the wheel.  Due to federal limitations and for the safety of the drivers they cannot extend their hours, so dispatchers work tirelessly to schedule these deliveries to the minute.

Can you pass the . . .

Everyone has their favorite side dish, and it can vary from region to region.  Google searches in all fifty states reveal the areas top thanksgiving choices yielding both expected and unexpected results.  Mashed potatoes topped the search in 10 states followed up by mac n cheese in 6 states, and rolls or biscuits not far behind.  The interesting factor is the 6 mac and cheese states are all connected.  Someone in logistics has to know this information and make sure that there is a sufficient supply of mac and cheese headed to the macaroni belt. The amount of additional foods transported during this time is staggering. Cranberries topped very few searches but last year 80 million pounds of cranberries traveled though the supply chain.  Pumpkin pie is the most common and 50 million pumpkin pies were transported.  Then there is beer for the football and the list goes on. The stores also must manage additional staff or longer hours for existing staff to unload all the incoming trucks and labor to move the product onto the shelves.

Cannot Forget it’s 2020

The farmers have valid concerns that the demand for smaller turkeys may leave the larger birds unbought, but they are not only part of the industry that could see a loss to expected revenue. 10% of a billion-dollar industry comes from exporting turkeys to other countries that may not have the demand of feel comfortable ordering from the United States due to our covid numbers. The shipping industry has already seen loss this year but will rebound stronger than ever as we all rebuild together.  For every role mentioned in the logistics chain here there are so many more.  The efforts behind the scenes deserve more recognition and due to the pandemic more people than every understand the importance of the supply chain.  This Thanksgiving in addition to all that you already have to be thankful for, and as hard as this year has been just being here today is a reason to be thankful, please take a moment to thank the tireless workers of the supply chain.

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The Show Must Go On-the 2020 Holiday Retail Season

Every year the logistic industry works tirelessly to meet the demands of the holiday season and normally one would say this year is no different, expect that this year it is.  With years of data to study analysts have been able to accurately project the revenue thus allowing the industry to prepare for what lies ahead.  Last year the National Retail Federation forecasted about 729 billion and the actual numbers came in around 730 billion.  This year’s projection is a 1-2% increase for those numbers but a myriad of factors makes last year’s accuracy improbable. The logistics of logistics in the holiday season is always a balancing act, but this year there are additional factors and challenges.

 

Supply Chain Interruptions

 

Prior to covid there were households across America that had never heard the words “supply chain”.  We went from a golden age of immediate access to all our hearts desire to fist fights over toilet paper.  Panic buying and a dramatic increase to online shopping increased the demand upon the logistics industry tremendously. Although the industry stepped up in a major way the challenges were significant, and we are still seeing hurdles. While there is still some debate over the election, most have resolved that Biden will be the next President.  Although Biden has stated that he will not shut the country down, many people believe that he will (some areas like Pennsylvania are voluntarily upping their restrictions now), and the panic buying is starting to set in. Most retailers already have their holiday orders in route or on shelves, however when it comes time to restock mid-December the focus may have to be on essentials rather than trinkets.  Retailers attribute 20% to 30% of their annual sales to the holiday season, they will certainly want those items on the shelves.

 

The Online Shift

 

The trend over the years has been shifting to online shopping, but the holiday season was still seeing high numbers of brick and mortar shoppers. Deloitte predicts that holiday e-commerce sales will skyrocket up to 35% compared to a 14% increase last year. A portion of the shift is the entertainment and restaurant factor.  In 2019 12% of holiday budgets went to dining, sport events and restaurants. $450 billion in revenue that is now considered risky behavior, many consumers will be ordering online items instead this year. Coresight conducted a poll and 7 out of 10 responders stated that they would be shifting their spending because of Covid-19 restrictions.  This influx of orders is bound to bottleneck the supply chain.  Shoppers may have gotten away with last minute orders in Christmas past but that is impossible in these new times. Last year two days before was a reality and now shipping cuts-offs are likely perhaps as early as Dec. 15th.

Last Mile Relief

The last mile in logistics is a potential nightmare when it comes to bottleneck issues. The only relief insight is the push from big box retailers for consumers to buy online and pick up in the store. The BOPUS angle has benefited those big boxers significantly during the Pandemic and they expect the trend to flourish this holiday season. Target plans to spend an extra $50 million over the holiday season training and staffing the pick-up department. CEO Brian Cornell spoke on a Q2 earnings call about the success the company has had with this program,   “In our digital channels, we continue to see the most rapid growth in our same-day fulfillment options, in-store pickup, Drive-Up and Shipt, which together have more than doubled their sales in the last year,” Cornell said. “These options offer speed, convenience and reliability, and as a result, they are quickly becoming the preferred fulfillment choices for our guests.”

 

 

Forecast

This year is up in the air because there is no prior data on a year like 2020.  Retailers have already taken a harsh hit this year and many did not survive the crash, this is a make or break it moment for many out there. Without data there is no telling what this year will bring so instead let us just prepare for the miracles that the logistics community can create. There is no doubt that without the tireless work of the logistic community though this pandemic all lives would have been lost.  (THANK YOU FOR YOUR SERVICE LOGISTICS PERSONELL YOU ARE ESSENTIAL).  Also thank you in advance for the work that you are doing now and will continue to do this holiday season!

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Georgia Ports Authority Scores with GAME DAY

 

 

When I heard the news that this year’s Georgia Ports Authority State of the Port Address would be virtual I immediately heard the clink of a white porcelain cup.  For the past 10 years as the escalator delivered me to the top of the convention center that was the sound that I would hear and smile.  I had arrived at Game Day!.  The Georgia Ports Authority State of the Port Address is the most important event of the year for not just those in logistics, but every industry in Georgia. Savannah is the perfect arena for this event because it is where a handshake and smile are where most connections  start.  The meet and greet portion prior to the address provides stations of coffee service, hence the little white porcelain cups.  Even the networking novice can score some points at stations provided with flavors, sugars and creamers.  The petite size of the cups provides several opportunities to meet a new contact and connect with valued associates. The information given at the State of the Port Address is such a gold mine that even the busiest CEO finds a way to attend. People literally come from all over the world even though the information will be posted directly after the meeting.  In Savannah’s hotel industry  knowing what is happening at the Port before your competitors by even 10 minutes can make all the difference in the world for your company.  Seven of the game days I I attended were as the DOS for a hotel company and we would do our annual budget meeting directly after I returned from the address. Many of the contacts I make at the address are from a myriad of industries. All of this to say I was disappointed, but clearly understood that it had to be done virtually as it was too important to not take place.  Game day was the perfect name for the virtual event and the GPA always puts together an amazing production but I was blown away by the effort that the GPA put into this year’s address.  They found a way to make the best of these adjusting times that we are in.

 

Game Day

The GPA Game Day Charting the Course was an outstanding way for Griff Lynch and Will Mcknight to kick off the State of the Port Address.  They used birth 5 of the largest container terminal in the Eastern Hemisphere as the background and were set up like sports casters. They even had port statics at the bottom of the screen like the sports shows do!  Guest “stars” to the panel were offered a baseball cap upon departure and the video segment to speaker segways were done broadcast style. GPA video segments are always amazing and this was certainly not an exception. The only minus was that I missed the sound of awe from the crowd, the applause and the laughter.  The State of the Port Address is always my favorite event because it’s the one place where all the news is good and everyone is really excited about what comes next.  That is one thing that is the same, although this year has not been what was expected, the overall news is still good for the GPA and the state of Georgia. The summary of the address came in the beginning when the discussion turned to the fact that even in a pandemic we are still breaking records. I feel like those words are worth saying again.

 

Even in a pandemic we are still breaking records

 

Just like any good coach Griff Lynch, GPA executive director took the time to praise the team:

“We appreciate the decisions of cargo owners to place their trust in Georgia. As our economy recovers, customers continue to be attracted by Savannah’s strong fundamentals – including the people who make our ports work,” Lynch said. “I want to thank our GPA employees, the International Longshoremen’s Association and our many partners across the logistics industry for their dedication to service.”

 

Well deserved praise for the success of the Georgia Ports is a team effort and its strength comes from the collaborative spirit that we have here. In the month of September the  Port of Savannah set a monthly record growing TEU’s by 11.4% During the first quarter of the 2021 fiscal year. Georgia Gov. Brian Kemp also had positive remarks . “Over the past year, our nation has faced unprecedented challenges that have impacted our daily lives and our economy. We’ve had to rethink how we handle the logistics of healthcare, retail, manufacturing – and the global trade that supports these endeavors,” Kemp said. “Through it all, our ports have remained steady, keeping cargo moving, attracting investment, and building market share.”

 

The full State of the Port Address can be found on the GPA website gaports.com and it’s worth the watch if you missed. Game day was a brilliant idea and indicative of the spirit of the Georgia logistics community.  This year proves under every circumstance we keep winning the game!

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The Last Mile for Retail

The Last Mile for Retail

Has brick and mortar retail taken its last breath? When the internet became public in 1991 it dramatically changed the way we shop. Almost 20 years later online shopping is preferred by a little over half of consumers, this has taken its  toll on the brick and mortar stores. Over the years even some of the major retailers like Sears and Kmart failed to evolve and perished. According to the U.S. Department of Commerce, in 2019 alone, U.S. consumers spent $601.75 billion online, an increase of 14.9% from the previous year.  This is almost double from the number in 2016 and the projections naturally showed a percentage growth f0r 2020 and then. . .

 

Covid-19 effects on retail

Projections for 2020 went out the window when Covid-19 shut down stores in March and the on-line demand skyrocketed. Now that we are in the aftermath, the only retail survivors have been forced to adapt.   Big box retailer Best Buy is a great example of a business who has adjusted their business practices and also how the end is coming for the bricks.  When the ability to reopen was presented Best Buy was among the first to open its doors, but only partially.  They had a station set up outside their doors so consumers could order products online and pick them up curbside.  Now they have opened the stores back up with mandatory masks and a check in at the front of the store. Shoppers let the associate know which department they need and provided it isn’t at its covid max they are able to go browse that section. Best Buy seems to be doing all they can until consumers are actually doing the browsing. Many stores, Best Buy included, are limiting their inventory.  The associates are telling customers if they want more selection they should look online. Even Wal-mart who was able to remain open during the pandemic has thinned out their inventory and placed pick up lockers in the entrance for online purchases in some locations.  For the younger generation this is a welcome shift according to studies 55% of the 17-34 crowd prefer online shopping.  Prior to corona there were still a few generations of shoppers that prefered shopping in a store, 57% of people over 34 to be exact. Now with masks, rules and less inventory those online hold outs are more likely to convert. 

 

Last Mile Delivery

How does a dramatic shift in shopping habits affect the supply chain?  In the past 3 years there has already been a shift in the supply chain and a hyper focus on last mile delivery.  What retailers need from the supply chain are flexible delivery options from the warehouses to the consumer. Consumers want products delivered immediately and have come to expect it. The challenge is that the last mile is both the most expensive (53% of the overall shipping costs) and time consuming part of a goods journey.  Consumers not only want fast shipping they are increasing their demand for free shipping.  Companies who offer flexible options are the most likely to succeed, such as offering same day at a cost delivery, free shipping for broader time periods and cost for specific time deliveries. Giving the consumer more options actually saves failed deliveries thus saving cost. Optimizing routes will also reduce time and costs for companies helping them deliver the expected customer service experience (55%of consumers said they would switch companies for faster delivery, however 73% said that a convenient delivery time was more important than speed). Many businesses will need to rely on automated software programs to coordinate routes and drivers just to keep up with demand. Target, Wal-mart,  and many others are pushing easy options to help consumers drive the last mile.  Special parking and curbside delivery are the new norm.  They are basically distribution centers that allow pick up and consumers are embracing it. There is also an entire third party industry now with companies such as post mates outsourcing the last mile to independent drivers. 

 

The ball is in motion

The ball that started rolling in 1991 has been picking up speed over the years and the virus just motorized it. Forbes put out a list of major retailers that closed stores this year and the total was over 14,000 stores closed so far in 2020 up from 2019’s 9,879 closures. Many of the companies shuttered in the first month of the pandemic were already in turmoil. If the big boxers are not going to survive is there hope for the independent retailers? A percentage of retailers can survive by focusing on the customer experience. There is still 57% of a large demographic that craves an in person experience. With the shopping at the remaining big boxes becoming more of a distribution center to pick up items small businesses can capture those seeking an experience or connection. 

The playoff season for retail and the supply chain has always been the holiday shopping season This year’s predictions, may really be just that with covid-19  being a novel factor. According to Deloittes annual holiday retail forecast  sales are likely to be an increase of 1% and 1.5% over last year. (between $1,147 billion  and $1,152 billion). Both industries must brace themselves for impact.  Staggering unemployment may reduce spending this year significantly and yet holiday shopping is often an emotional pick me up for many people which could increase spending. Perhaps the holidays can revive retail for another year but it seems like brick and mortar may be on its last mile. 

 

 

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Congratulations to Allen Johnson!

Congratulations to Allen Johnson, owner operator for Outsource Logistics for making his final truck payment!  Allen has overcome huge adversity in the past year and has not only succeeded but paid his truck off early. Thanks Allen for your loyalty and all you do. The endless hours on the road out there are much appreciated as you keep America rolling!

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Turn Applicants into Interns

Even though unemployment is at all time high finding qualified employees remains a challenge for the logistic industry. The question is how to take untrained applicants and prepare them for success in a new industry. Many companies engage in internship programs and are finding great success. According to Lee Smith from Outsource Logistics “the advantage of an intern is that you have someone full of energy, a willingness to learn and you can mold them into the type of employee that your company needs.  If an intern comes in with a strong work ethic and great attitude it generally leads to a job offer.  The intern needs to task themselves with adding value to a company in every way possible”. Internships provide more than just future employees, they can also enhance your companies public profile and educate the community about opportunities in logistics.

 

Creating an internship

Creating an internship program is fairly simple. The first step to creating an internship is evaluating your company’s areas of need and available staff to foster the potential intern. Determine how many interns your company can take at one time and how long a valuable program will take. Keep in mind that the intern should be given an education about the company and what happens there as well as learning a position. Make sure you have all the resources and tools ready to help them make the most of the program. 

Legal compliance 

States may vary on the legal aspect of internship programs and whether they may be considered employees or not. According to theThe Fair Labor Standards Act for an intern to be not financially compensated  certain things must be true: A job is not guaranteed when the internship is over, the intern must not be replacing an employee, the intern needs to benefit the most via academic requirements, and the intern clearly understands the terms. In the case the intern does not meet those requirements they will be considered an employee and a pay rate must be determined. Since there are legal problems if an unpaid intern performs work assignments it is generally better to create paid internships. The pay scale should be relative to the purpose of the program.  If the internship is merely to educate then a minimum wage may be appropriate. However if the goal is to groom a potential long term employee then it might be advantageous to pay a more competitive rate to attract a stronger candidate.

Setting them up for success 

After consulting with your legal team it’s time to set up the core of the program. If the internship is for a college or high school student then educational goals should be in the forefront. All interns should have an orientation and then a tour of the facility. Then they should be given a written guide with policies and expectations. The intern should have a direct supervisor or mentor even if they will be working in different departments and should be given periodic evaluations. If possible they should be given an outline about their daily duties and any projects they will be working on.

 

Where to find interns

 When it comes to finding an intern there are several ways to locate one. There are still traditional routes such as contacting your local colleges (technical or academic) and working with the logistics programs to find motivated interns or hosting a booth at a career. There are also new methods for finding interns. Utilizing web sites like Internships.com or www.collegerecruiter.com is a great place to find interns, most of today’s students are seeking internships though sites like these. Another option is to look for local programs with internships, such as Savannah’s Maritime Education Taskforce (MLET). This mission of MLEt is to educate high school seniors about the logistics and maritime industry. Every year they partner with twenty businesses to place an intern and then they monitor the progress throughout the process.

 Beyond Interns

Coastal Work Source is an organization partnered with the American Job Center network whose main focus is helping businesses find qualified workers. AJCs bridges the gap by providing free help to job seekers in a variety of ways. There are over 2,000 locations in the United States and the Coastal Work Source is Georgia’s version.  They specialize in pairing the right employee to a company that fits their skill set and are funded by a myriad of state and federal programs. The range of services they offer job seekers and businesses is quite impressive. Coastal Worksource offers business service representatives that specialize in logistics and work with companies with everything from creating job descriptions to on the job training. The training plan and time frame up to six months is developed in tandem with the representative. Companies are reimbursed 50% of the wages paid to the trainee during the program.

Last week I suggested that existing employees could be trained and promoted into more technical position’s free entry level positions for displaced workers. Another one of Coastal Workforce’s programs can help with this transition as well. They have a program called incumbent worker training that assists with training employees that have been in the workplace for at least 6 months. 100% of the direct training cost may be provided by Coastal Workforce depending on the size of the company.

A great way to backfill some of the more entry level positions is to take advantage of the Work Experience program. The employees have already been trained in a classroom and the program covers the cost of drug screens and background checks. The employer will actually be refunded 100% of the employee’s wages for up to 12 weeks. The employer is not obligated to keep the employee for the duration if they do not work out and on the opposite side of the coin they can extend the time or hire the employee.

 The logistic industry can certainly benefit from the boom in applicants if it maneuvers correctly. There are great resources out there to help! If you are in the Savannah, Georgia area contact Coastal Workforce at 912-659-4271 or email them at [email protected] and email can be reached via facebook at https://www.facebook.com/maritimelogisticseducationtaskforce/.

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Hiring Advantages During the Pandemic

Georgia boasts having the fourth largest port in the nation and now more than ever we are focused on the supply chain in general. One thing the logistic industry has struggled with is to fill vacant positions especially in the last few years with record low unemployment rate. The covid-19 pandemic shuttered businesses and has displaced entire industries of employees, thus swinging the pendulum severely in the other direction.  In the past 7 weeks 33 million people have filled for unemployment benefits bringing the unemployment rate to 20%.  We have not seen numbers like these since the great depression.  The question is how the logistic industry utilizes this shift to not just find talented employees but also retain them when other opportunities present themselves again.

Restructure existing positions

The issue with the newly unemployed is they may have advanced skills in their current industry; however, logistics may be completely new to them.  Many of the positions in logistics require technical skills so now might be a good idea to promote from within.  Training existing employees to fill advanced roles will free positions in the entry level category.  This gives you an opportunity to capture a talented employee who is can be brought up to speed quickly. Now might be a good time to start an internship or training program. There are high school and college seniors who are eager to join the work force and transitioning employees who might feel more comfortable applying if they are certain adequate training will be provided. The WOTC tax credit will apply to more applicants now and will help offset the cost of additional training. These programs would introduce logistics that would motivate those ready to enter and remain in the industry. The more skilled employees can delegate the simpler tasks to the interns allowing them to complete more of the difficult tasks.

Finding the diamonds in the rough

With a sea of candidates, how do you determine which ones to hire? Start with alignment. One of the best features of an entry level logistics position is the room to grow has no limit.  If you find someone who values growth with a company or an industry they will flourish.  If the industry they came from collapsed they will be looking for a position with growth potential. Many interviews start out with a list of questions and as they wrap up the interview, they ask “do you have any questions for me?”. If you flip that around and start with “before we get started do you have any questions about the company or the position?”  that will give the candidate a chance to show you what is important to them. What you want to hear are questions about the potential for career advancement or job security.  In addition to direct questions general questions about the team, management and work itself are a good sign. The best hires care about the environment they are going to be working in since they hope to stay long term. When it is time to ask them questions really take the time to find out as much about there core beliefs as you can.  Their experience is not as important with a transitioning employee. Determining if they are open to learning a skill and starting from square one is more important in this instance.  Especially for candidates that were managers or executives in their past jobs, this will be a major change for them. Ask the candidate to give examples of how they have been able to adapt, grow or embrace change in their last position.

Reaching a new audience

Job boards are a helpful tool in finding employees but relying on job boards may not pull all the possible applicants. This is time to get creative about reaching a broader audience.  Facebook has a job section that is easy to access through your business page and can draw in a surprising number of applicants. In addition to the job posting it is a good idea to post about open positions on the man page as well and encourage your audience to share it with their network. Now is a good time to use the boost feature to reach past your network.  Two ways to really drive results is to offer a referral program or promote a job fair with “same day hiring process”. Another way to appeal to those who have been out of work for some time is to offer more immediate pay. Typically, people will have to wait two weeks for a paycheck and that can present challenges for those who have taken a finical hit. Paying for transportation to work, new work clothes and lunches away from home may be a struggle for some employees. There are a few different ways employers could appeal to candidates. Company’s could offer next day or weekly pay, provide a gas card for a new hire or provide employee meals for the first week or two.

Retention is the name of the game

Hiring right now has never been easier, but how do you keep those new hires once they have more options? Proper onboarding is a key to keeping employees’ long term. Statistically more than 50% of employees leave their job in the first and site lack of training as the reason. Introduce employees to the company, remind them of the benefits of staying with the company long term and engage them with other employees who have been promoted from within.  Check in with new employees often to make sure the foundation of their employment is solid. Recognize employees good work, every level of employee wants to be shown they are appreciated. Employees who feel valued work harder and stay longer.  If the candidate came onboard based on room to grow, make sure to they can achieve that. Offer ongoing training and provide promote from in opportunities to keep your staff motivated and loyal.

The covid-19 virus has impacted our way of life in so many negatives ways and that makes finding silver linings crucial. The logistic industry has taken hits as well, but in general has fared better than many industries and people looking for stability will now gravitate towards logistics. Finding and keeping great employees is a challenge we can overcome during this difficult time, take the opportunity to enhance your staff and help people flourish in a new industry.

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Immunity in our Hands

Georgia made national news when Brian Kemp, Georgia’s governor made the decision to lift restrictions on the shelter at home order.  Businesses were given the green light to re-open if they choose to with restrictions to the way they conduct business. There has been heated debate about when and how the country should be opening again, but ultimately the decision has been made and now we have personal choices to make. Businesses that are opening will have mandated regulations to adhere to keep their staff and customers as safe as possible. The reality is we come into contact with germs and viruses all the time, the best way for us to protect ourselves from this virus or from anything (according to the CDC 80,000 people died from the flu last winter) that could make us sick is to boost our own immune system.

How the immune system works

The immune system is made up of cells, tissues and certain organs that work together to combat pathogens.  Pathogens can be viruses, bacteria, and parasites. When working correct the immune system can prevent sickness even if we are exposed to germs. There are factors such as sleep, diet, stress and hygiene that boost or detract from the immune system.

Factors that weaken the immune system

The immune system can compromise by taking certain medicines so checking in with your doctor about any medications you is worth making a call.  Smoking can be a factor in a weaker immune system as well as alcohol, poor nutrition, stress, and a lack of sleep.  Most of these factors are completely within our control and even small modifications can make a difference.

Boosting the immune system

The same factors that can be negative for the immune system when changed are the same factors that boost the immune system.  The best ways to boost the immune system are to not smoke, only consume alcohol in moderation, get at least 7 hours of sleep, get regular exercise, reduce stress, and maintain a healthy diet.  There are many items on this list but today we are going to focus on two of the easiest and simultaneously hardest items from this list.

Changing eating habits

There are a thousand meme’s joking about the “Corona 15” circulating on social media right now.  They are referencing all the food people are eating while sheltering at home.  Although this is meant to lighten the mood, the truth is overeating junk food is the worst thing you can do for immune system right now. In addition to diminishing the immune system, diabetes is one of the underlying diseases that are leading to deaths impacted by the Corona virus. Focusing on what to eat is always a better way to modifying your eating habits.  There are foods (more than just citrus fruits) that enhance the immune system and can be easily added to average diet.

Mushrooms

Mushrooms are high in B vitamin, riboflavin, niacin, and selenium.  In addition to these minerals and vitamins that help the immune system work they are also high in polysaccharides a sugar-like molecules that boost immune function.

Oysters

One 3-once serving of oysters contains selenium, iron, zinc, vitamin A and vitamin C.  The oyster is also a great source of protein and its easy to see why the call them the superfood of the sea.4

Watermelon

Not that anyone needs an excuse to eat watermelon, but there are many good reasons to do so. Potassium, vitamin A, vitamin C, Vitamin B6 and glutathione can all be found in just 2 cups of watermelon.

Yogurt

Yogurt has more benefits than just the vitamin B12, vitamin D, and riboflavin found within it.  Probiotics help boost the immune function, but they also provide beneficial gut flora that increase digestion, fight bacteria and detoxify the system. There are many ways to use yogurt in savory dishes if mixed with fruit is not favored.

Spinach

Spinach has earned its reputation for being a superfood due to high content of iron, fiber, magnesium, vitamin A, folate, vitamin C.  All of these work together to aide cell division and DNA repair and boost immune function.

Garlic

Garlic has antibacterial, antiviral, and anti-fungal properties and antioxidants that combat free radicals that cause Alzheimer’s disease, heart disease cancers and other conditions.

How to quit smoking

In a list of easy changes to make this one seems so simple and yet it is the hardest item for most people to achieve.  The many benefits of this daunting task outweigh the challenge.  Quitting smoking increases oxygen levels, lowers inflammation and improves circulation.  The good news is there are so many resources available to smokers now if cold turkey is not a viable option.

Medications

The FDA has approved 7 types of medications to help people quit smoking and they should all be discussed with a health care provider.  The medications include: nicotine gum, patches, lozenges, inhalers, nasal sprays, Zyban (an antidepressant) and Chantix which blocks the effects of nicotine in the brain.

Support

Smokers who want to quit can improve their chance of success by asking for support from their co-workers, family and friends. By telling your network about your plan and ask them to hold you accountable. There is in-person counseling from doctors or health care providers and support groups. All 50 states have telephone quit lines and the American Cancer Society can supply the numbers, they can be reached at 1-800-227-2345. The National Cancer Institute has a quit smoking app that can provide encouragement 24 hours a day.

While some people continue to shelter at home most of us are either still working or heading back to work. People are starting to go public places again and doing their best to find a new normal. Taking care of ourselves should always be a priority not just for ourselves but for the people who care about us. There is more information on the websites for the American Heart Association and the National Cancer Institute.

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