Logistics Viewpoints

A complete analysis of logistics trends, technologies, and services

Mexico – The Land of Sunshine, Tequila, and.…Automated Warehouses?

Warehouse Automation | By •

mexico-imagesI am currently in the final stage of updating ARC’s Warehouse Automation & Control (WAC) Global Market Research Study. I have expanded the number of segments analyzed and made a few other changes to the scope and the content since the 2014 study. One of the changes reflected in the content of this study is a downgrade in ARC’s warehouse automation growth expectations for the Latin America region. Since 2014, commodities prices have plummeted and many Latin American countries reliant on oil and other commodity exports have experienced substantial economic downturns leading to devaluations of their currencies. This macroeconomic downturn appears to have restrained investment in warehouse automation by companies in the region.

Mexico was frequently noted as the strong spot within Latin America during my discussions with warehouse automation suppliers and WMS suppliers. Granted, it is the second largest economy in the region, after Brazil, and is therefore likely to account for a large percentage of the region’s economic activity. But investment activity remains strong. Warehouse automation vendors didn’t really point to an overarching factor driving sales to companies in Mexico. But WMS suppliers informed ARC that the WMS selling environment in Mexico remains favorable due to increased nearshoring efforts by US companies. Multinationals care more than ever about agility in their supply chain, as China’s costs increase, Mexico’s proximity is becoming more appealing. But the trend back to nearshoring in Mexico isn’t new. In 2015, Menlo Logistics discussed the lead time benefits and supply chain visibility concerns when nearshoring to Mexico. More recently, Transplace discussed how the weakening Mexican peso is making the country’s products cheaper for US consumers, leading to transportation capacity constraints going North. But currency exchange rates are volatile and are unlikely to influence long-term capital decisions such as warehouse automation purchases or large-scale WMS implementations.

I decided to conduct some additional secondary research to obtain greater insights about the factors that are likely driving warehouse automation investments in Mexico at the same time other countries in the region are pulling back. Macroeconomic data on trade show the degree to which automotive, automotive parts, and electronics account for US imports from Mexico. Automotive parts warehouses often utilize warehouse automation, but the anecdotal evidence I received from vendors doesn’t support this as the primary factor driving warehouse technology investment in Mexico.  Similarly, macroeconomic data on US exports of industrial automation equipment shows that Mexico’s purchases of US conveyors and elevating equipment grew at a 12.9 percent CAGR between 2009 and 2015. This provides confirmation of my estimates and projections, but doesn’t provide additional color.

I dug further into macroeconomic reports to see if there were additional insights to be obtained. I came across the Department of Commerce 2016 Top Markets Report on the Cold Chain in Mexico. This report states that Mexico’s supermarkets have been growing at a rapid pace. At the same time, the introduction of supermarket distribution systems has become more prominent. Food and beverage, retail, and consumer goods companies represent a large percentage of warehouse automation and control sales globally. Maybe warehouse technology spend in Mexico is driven more by food and beverage and consumer packaged goods than automotive and electronics. Furthermore, maybe the automation is in support of domestic consumption more than exports. I decided to take a look at WMS and warehouse automation case studies on clients from Mexico to see how they mapped to these industries to see if it provided additional color into warehouse technology adoption trends within the country. A quick scan of publicly-available literature revealed the following projects:

mexico-warehouse-projects

This is a quickly assembled sample of recent investments that I plan to build out in the weeks ahead. The analysis of warehouse technology sales in Mexico is outside the scope of my current global research analysis. But it is an interesting country that is a positive outlier in the Latin America region. From this quick analysis, it appears that the recent strength in warehouse automation sales in Mexico is driven more by food and consumer goods than automotive or electronics. At the same time, it appears that automation of facilities supporting domestic Mexican demand is stimulating warehouse technology investment more than that of businesses exporting to the US. Mexico’s investment trends are certainly of interest to me, and I believe the country offers much opportunity for investment going forward.

How the Mexican Peso Is Impacting Cross-Border Transportation

Guest Commentary | By •

Troy RyleyThe devaluation of the Mexican peso over the past two years has been rather extreme. Two years ago, one U.S. dollar was worth about 13.5 pesos, and today it’s worth about 18. As a result of this severe drop in value, U.S. goods have become very expensive for Mexicans, and Mexican goods have become cheap for Americans. In fact, many markets across the globe have become cheaper as the dollar has gotten stronger – making these markets, including Mexico, more attractive for U.S. companies.

The difference in the dollar versus the peso has led to Mexico importing less cargo due to higher costs and exporting more cargo as Mexican products become even cheaper for U.S. consumers. This imbalance in northbound and southbound trade has created a shortage of truck and rail capacity, making it much more difficult and expensive to source northbound equipment. The results are going to leave many shippers continuing to scramble for truck and rail capacity as carriers are forced to reposition empty equipment in order to meet the demand.

Additional Concerns as Peak Season Approaches
When peak season begins in May, the capacity shortage will be further intensified as the increase in produce shipments will command available capacity and create additional challenges for shippers and a good deal of equipment will be refocused on perishable and time-sensitive agricultural products. Combined with the seasonal slowdown in southbound movements into Mexico and the devaluation of the Mexican peso, this will create serious capacity concerns. Therefore, it’s important that shippers are prepared with a strategy when it comes to equipment access.

For instance, it’s very likely that pricing will increase across the U.S.-Mexico border. Laredo is currently at approximately 90% capacity of its cross-dock space, and many shippers will be seeking out that space heading into peak season. Because of this lack of availability, cross-dock space will be in high demand and rates will likely be higher than previous years. It’s important for shippers to realize that in order to make up for the lack of capacity, there simply won’t be the high percentage of savings that there has been in the past.

Growing Challenges and Transportation Solutions
As peak season approaches, transloading and cross-docking will become even more valuable in the overall transportation equation, and shifting to a model that incorporates these strategies will be beneficial for many companies. While this won’t create a guaranteed capacity solution, it can help make hard-to-come-by capacity more readily available. Those shippers that haven’t adopted a cross-docking model will have no choice but to sit and wait until a U.S. trailer becomes available.

However, as shippers may be shifting to this type of model, it’s critical that they remember that cross-docking is complex. This strategy takes both yard space and cross-dock space to keep things flowing properly. Shippers also need to take into account that there will be additional labor needs as well as the ever-present border congestion and issues that can arise on both sides – making cross-docking a time-consuming and intricate process.

Additionally, moving freight to the border on a transload shouldn’t be viewed as a fix-all solution. While it does give shippers access to more U.S. carriers that don’t currently enter Mexico, it doesn’t eliminate the potential wait time and backups at the border. In general, shippers need to understand that even with implementing new strategies to adapt to a shortage of capacity, service levels will continue to be affected both in the pickup of freight and the corresponding issues at the border.

As the constantly increasing number of exports from Mexico to the U.S. aren’t slowing down, and the value of the peso continues to drop, the resulting challenges will not simply disappear. Shippers need to explore new strategies and work with their carrier and 3PL partners to create a mutually-beneficial, collaborative approach to their cross-border transportation strategies.

Troy Ryley is the Managing Director, Mexico for Transplace. Mr. Ryley has been involved in Mexico and Latin America logistics since 1993.  Shortly after graduating with his MBA from The American Graduate School of International Business (Thunderbird), he was relocated to Mexico City where he worked and lived for more than 12 years. Mr. Ryley has managed the Mexico operations for Distribution Services Ltd (now Maersk Logistics) and Expeditors International.  In addition, he spent several years working throughout Latin America as a Business Development Manager for TNT Express Worldwide. Now located in Laredo, Texas, he has a unique view of the extensive development and changing trade practices of America’s southern neighbor.

This Week in Logistics News (November 4-8, 2013)

Retail | By •

Forget cloud, social, and mobile. Forget WMS and TMS. Forget BI and analytics. As was confirmed for me yet again this week at a conference, the most utilized supply chain and logistics application, the reigning champ of them all, is the Excel spreadsheet. As the saying goes, old habits die hard.

In other news…

What is a warehouse? And what is a warehouse management system? Omni-channel fulfillment is changing the traditional answers to those questions. As more consumers order products online for in-store pickup, retail stores are becoming fulfillment centers, and that’s driving logistics software vendors to develop new solutions to enable these processes.

This week, for example, JDA Software announced the release date for JDA® In-Store Picking, “a solution designed to enable retailers to accurately and efficiently pick e-commerce orders in a store (in-store).” JDA is targeting Grocery, Hardline, and Fashion/Apparel retailers with this solution, which will be generally available December 26, 2013. Here is an excerpt from the press release:

JDA In-Store Picking accepts orders from order management systems and then allocates and clusters them to make efficient use of both store space and time when picking and processing e-commerce orders.

 

For grocers, the picker may choose either voice activation or browser-based devices to pick products for packaging on carts and for those carts to be marshaled into staging areas before being loaded for home delivery, “click-and-collect” store areas, or for “drive-through” models as used in mainland Europe.

 

The pickers are sent to the shop floor to pick at an appropriate time ‒ to minimize the disruption for customers in the store – and be on time for the home delivery dispatch or the promised click-and-collect time. The solution also provides different substitution strategies depending on the retailer’s brand promise, and generates customer-ready paperwork before sending the picked items electronically to the point-of-sale system.

Of course, technology is only one piece of the omni-channel fulfillment puzzle. The open question is whether retailers are also going to invest in people to make it work — i.e., hire and train enough store-level workers to execute these new tasks efficiently and effectively.

On the 3PL front, C.H. Robinson and XPO Logistics both announced Q3 2013 financial results this week. C.H Robinson reported total net revenues of $463.3 million in the quarter, an increase of 7.1 percent from last year, which includes contributions from the company’s acquisition of Phoenix International Freight Services in October 2012. Truckload net revenues, however, decreased 1.3 percent in the quarter compared to Q3 2012. In North America, average truckload rate per mile charged to customers increased about two percent while truckload transportation costs increased about four percent, excluding the estimated impacts of the change in fuel.

XPO Logistics continued its rapid growth, reporting a 173.3 percent increase in total revenue and 251 percent increase in gross margin dollars in Q3 2013 compared to the same period last year. The company, however, reported a net loss of $6.0 million, compared with a net loss of $3.1 million for the same period in 2012. Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “While we reported a loss, as expected, our strategic investments are driving significant revenue growth and margin improvement. Given our trajectory, we’re on track to meet our 2013 targets for positive EBITDA in the fourth quarter and a billion dollar revenue run rate by year-end.”

Back in February 2010, I wrote a report highlighting how the MENA region is a growth opportunity for companies across many vertical industries, with countries such as United Arab Emirates, Saudi Arabia, and Egypt leading the way. Of course, the political and economic landscape has changed significantly since then, but the growth opportunities remain promising nonetheless, which is why 3PLs like Choice Logistics are investing in the region. The company announced this week that it is has opened a new distribution center in Dubai, United Arab Emirates. Here are some details from the press release:

Opened on July 1st, the new distribution center in JAFZA serves a region encompassing a 2000-mile radius around Dubai, including countries in the midst of building their technology and communication infrastructures such as Pakistan, Kuwait, Jordan, Egypt, and Saudi Arabia. It serves as a hub for duty-free importation and exportation of service parts, allowing clients to manage their inventory levels and distribution more competitively in the Middle East and Northern Africa.

U.S.-NAFTA trade reached $96.5 billion in August 2013, up 2 percent from August 2012. Trucks accounted for 59.9 percent of the trade value in August 2013 ($30.3 billion of exports and $27.5 billion of imports), but compared to the same period a year ago, trade by rail grew faster overall (3.0 percent compared to 0.7 percent for trucks). Looking at U.S.-Mexico trade, rail increased the most of any mode from August 2012 to August 2013, growing 10.1 percent compared to 1.1 percent for trucks. This was due, in large part, to imports of vehicles.

Speaking of Mexico, according to an article in the Wall Street Journal, the Mexican government has sent soldiers and federal police to take control of the deep-water port of Lázaro Cárdenas, which ranks among Latin America’s top 10 by cargo (the port is expected to handle 38 million tons this year). Here are some excerpts from the article:

The Mexican government sent soldiers and federal police on Monday to begin taking over the nation’s largest port and disarm the city’s municipal police following a week of mounting chaos at the hands of drug trafficking gangs in the western state of Michoacán.

 

Top Navy personnel will take the jobs of port manager and captain of the Lázaro Cárdenas port, while the army and federal police will take over security…The government is also sending more than 150 officials to take over the port’s customs agency.

I wonder if the U.S. military should start training our soldiers and military police to run the West Coast ports in the ever-more-likely event ILWU workers will go on strike this summer when the current agreement expires June 30, 2014.

And with that, have a happy weekend!

Song of the Week: “Kick” by INXS


Note: C.H. Robinson and JDA Software are Logistics Viewpoints sponsors.

This Week in Logistics News (July 15-19, 2013)

Mergers-Acquistions | By •

99_degreeI passed on spending $1100 to fix my car A/C, so I’ve been driving around with the windows down this summer. When you have Cuban blood, 99 degrees is nothing to complain about (although I reserve the right to change my mind).

In this week’s news, new products and services and a couple of acquisitions top the list.

Con-way Freight announced this week that it has enhanced its Mexico service offering with the introduction of real-time, door-to-door online tracking, a 24-hour Customer Resource Center and new web tools for tendering and managing shipments moving to and from Mexico. As I’ve commented in previous postings, if you are a 3PL or transportation company and you’re not involved in cross-border shipping with Mexico, then you are missing out on a growing business opportunity (see Reuters article from December 2012). Based on the comment below from the press release, Con-way is making these enhancements in response to increased customer demand for Mexico services:

A recent survey of Con-way’s customers showed that with increased NAFTA traffic, and more manufacturing being shifted from Asia to Mexico, the provision of fast, efficient and simplified services, coupled with enhanced door-to-door visibility to shipments, is increasingly a requirement for today’s fast-response demand cycles.

On the technology front, LLamasoft announced the release of Data Services, “a new offering that provides reference and benchmark data to LLamasoft customers and others in the supply chain design community…[this data] enables significant reduction in model building time and validates model outputs against realistic standards.” Here are some additional details from the press release:

Data Services data sets will include mode-specific transportation costs and transit times, facilities cost estimates, demographics, risk metrics, duties and taxes, sustainability metrics and others. Users can access Data Services initially through an Excel macro interface with future direct connections planned to LLamasoft supply chain modeling software such as Supply Chain Guru and Transportation Guru, or through a Web-based interface. Source data is a combination of reference and benchmark data from third parties as well as econometric models and formulas.

Meanwhile, Oracle announced the general availability of two new Oracle In-Memory Applications for Oracle Value Chain Planning: Oracle In-Memory Consumption-Driven Planning and Oracle In-Memory Performance-Driven Planning. According to the press release:

Oracle In-Memory Consumption-Driven Planning helps organizations understand and respond on a daily basis to true end-customer demand thus helping to reduce bullwhip effect and to improve on-shelf availability and inventory turns.

 

Oracle In-Memory Performance-Driven Planning helps organizations analyze and plan massive amounts of supply chain data and get better, more timely business insights to simulate multiple real-time scenarios in order to improve decision making and reduce risk.

The merging of supply chain software and trading partner connectivity continues, with HighJump Software announcing this week that it has acquired Evenex, a provider of business-to-business integration solutions. Evenex has “over 3,000 customers exchanging more than 375,000,000 documents every year and is the leading and preferred business-to-business integration provider in Denmark.”

Last-mile logistics is a niche segment of the 3PL market that is starting to heat up, as evidenced by XPO Logistics’ announced acquisition of Atlanta-based 3PD — “the largest non-asset, third party provider of heavy goods, last-mile logistics in North America” — for about $365 million. Here are some additional details from the press release:

3PD reported year-over-year growth in adjusted EBITDA1 of 20 percent and 36 percent for the full year 2012 and the first five months of 2013, respectively; and trailing 12 months revenue of $319 million through May 31, 2013.

 

3PD provides blue chip retailers with customized solutions tailored to their supply chain needs, and serves small and mid-sized shippers by matching them to carriers on a transactional basis. The business has differentiated itself through its ability to assure a superb customer experience using proprietary technology and industry-leading process management.

And finally, UPS raised a red flag by lowering its full-year EPS expectations. “Overcapacity in the global air freight market, increasing customer preference for lower-yielding shipping solutions, and a slowing U.S. industrial economy drove revenue and operating profit below expectations [in Q2 2013],” said the company in the press release. “In addition, UPS experienced some slowing in package volume growth as a result of labor negotiations.”

Will the growing trend of retailers fulfilling online orders from stores negatively impact UPS and FedEx in the future? A Reuters article published this week raises this question, and it includes the following quote from Joel Anderson, president of walmart.com:

“We are at least two zones closer [to the customer] by utilizing the stores,” Anderson said. “The closer we can inject the order into our network, the more this saves the customer time and reduces what it will cost us to get it to the customer.”

I wonder if Mr. Anderson is factoring in the difference in labor costs between stores and distribution centers in his calculation, as well as the cost of transporting the goods to the stores in the first place.

And with that, have a happy weekend!

Song of the Week: “Safe and Sound” by Capital Cities.

This Week in Logistics News (February 18-22, 2013)

Logistics Service Providers | By •

This was school vacation week and I spent most of it either with cross country skis or ice skates on my feet, which isn’t so bad except for the fact you have to be out in the cold to ski or skate, and I’m allergic to the cold, unlike my kids who would outlast any polar bear in a blizzard.

As I take a break to warm up, here’s a look at this week’s news:

C.H. Robinson Worldwide announced the release of a mobile app that extends the reach of its Navisphere platform, “allowing users to access critical shipment information with Apple or Android™ mobile devices.” Here are some details from the press release:

Navisphere app users are able to view detailed shipment information by searching for shipments via pickup or drop off dates, container, customer reference, or C.H. Robinson load numbers. In addition, users are able to view events of a shipment, imaged documents, and can email their account representative with questions on a particular move.

 

The Navisphere customer app can be downloaded for free at the Apple App Store on iTunes, Google Play and Amazon Marketplace.

As I highlighted in my supply chain and logistics predictions for 2013, tablets and smartphones are quickly becoming the preferred computing platform for business professionals, which is why technology providers are designing and optimizing their applications for these devices. This is also another example of how the lines between 3PLs and technology companies continue to blur.

Speaking of 3PLs and technology, Transplace and CombineNet have extended their partnership agreement for a minimum of three more years. According to the press release:

Transplace leverages the CombineNet ASAP® advanced e-sourcing technology as part of its expert solutions, helping customers develop and optimize their carrier strategy for procurement events involving truckload, less-than-truckload (LTL), and intermodal needs. Transplace delivered more than 50 customer solutions in 2012 using the CombineNet sourcing technology, in industries including consumer goods, chemicals, manufacturing, and retail.

Meanwhile, Con-way Truckload and Con-way Multimodal announced the launch of a new North American intermodal product “that integrates the strengths and capabilities of both organizations to deliver a high-value, high-reliability offering for intermodal shipping” with an emphasis on U.S.-Mexico trade. This new collaborative service leverages Con-way Truckload’s capabilities in Mexico through its CFI Logistica subsidiary, “where it has 10 offices, an extensive drayage network and 40 years of in-country experience, and Con-way Multimodal’s resources, systems and freight procurement expertise.” According to the press release:

Con-way Truckload today derives 35 percent of its revenue from shipments destined for or originating in Mexico. The company has a fleet of 2,700 tractors and 8,800 trailers, with more than 2,300 trailers operating in Mexico.

 

Ultimately, the joint service provides a new solution for customers of both companies for U.S.-Mexico shipping, which is particularly timely as more companies locate manufacturing and distribution operations in Mexico and the need for capacity and reliable cross-border shipping services accelerates.

As I stated back in December, in response to a Reuters article highlighting how U.S. transport companies are cashing in on the Mexico trade boom, if you are a 3PL or transportation company and you’re not involved in cross-border shipping with Mexico, then you are missing out on a growing business.

In his State of the Union address a few weeks ago, President Obama signaled that infrastructure investments and climate change will be among his priorities this term. These topics are already being debated in Washington, and a couple of news items this week will certainly add fuel to the debate.

First, a new Reason Foundation report examining 20 years of state highway data finds the condition of America’s state-controlled roads has improved in seven key areas: miles of urban Interstate highways in poor pavement condition, miles of rural Interstates in poor condition, congestion on urban Interstates, deficient bridges, highway fatalities, rural primary roads in poor condition and the number of rural primary roads flagged as too narrow. Here are some excerpts from the press release:

In the 20 years examined, 11 states (North Dakota, Virginia, Missouri, Nebraska, Maine, Montana, Tennessee, Kansas, Wisconsin, Colorado, and Florida) made progress in all seven categories and 37 states improved in at least five of the seven metrics.

 

“There are still plenty of problems to fix, but our roads and bridges aren’t crumbling,” said David Hartgen, lead author of the Reason Foundation report and emeritus professor of transportation at the University of North Carolina at Charlotte. “The overall condition of the state-controlled road system is getting better and you can actually make the case that it has never been in better shape. The key going forward is to target spending where it will do the most good.”

And with regards to climate change, an article in the Wall Street Journal outlined the problems facing the European Union’s carbon market:

The European Commission, the EU’s executive body, is trying to hammer out reforms that would permanently eliminate an oversupply of permits to emit carbon dioxide, which has pushed their price on the open market so low that there is little incentive to reduce emissions.

 

The short-term reforms that will be put to the vote Tuesday could push the price of a CO2 permit up to between €14 and €18, but not high enough to encourage investments in clean energy or carbon capture and storage, Mr. Oettinger [the European energy commissioner] said.

Speaking of climate change, it’s time to head back into the cold again, this time with sleds, a man and his little polar bears, to race down a snowy hill.

Song of the Week: “Miracle Mile” by Cold War Kids

(Note: C.H. Robinson, Con-way, and Transplace are Logistics Viewpoints sponsors)

This Week in Logistics News (December 3-7, 2012)

Logistics Service Providers | By •

Adrian’s stand up desk

I’ve been reading a lot lately about how sitting for too long isn’t healthy, and how many business professionals are now using stand up desks at work. So I decided to work standing up this week, and because stand up desks are expensive, I employed my Cuban ingenuity and built my own using an ironing board and five of my Encyclopedia Britannica books. I am happy to report that my lower back feels much better. My legs and knees, however, are not so happy.

In other news…

As I’ve highlighted in previous postings, the main driving forces for mergers and acquisitions in the 3PL industry are to expand globally, introduce new services, target new industries, and penetrate the small and midsize business (SMB) market. Transplace is a perfect case study when you look at the acquisitions the company has made since early 2011, including this week’s acquisition of Torus Freight Systems, a Canadian-based logistics services company focused on Canadian cross-border and intra-Canada freight. Here is how Transplace CEO Tom Sanderson summed it up in the press release:

“Acquiring Torus, a leading Canadian 3PL, continues our expansion through strategic acquisition. In 2011, Transplace acquired SCO Logistics to broaden our vertical experience in chemicals and joined forces with Celtic International bringing us door-to-door intermodal expertise. Geographic expansion was our goal, and that’s exactly what we have accomplished with this acquisition.”

Retailers and other companies are breathing a huge sigh of relief now that the strike by clerical workers at the Los Angeles and Long Beach ports is over. But when you stand back and think about it from a supply chain risk management perspective, being in a situation where just 800 clerks can shut down the main entry point for about 40 percent of US imports and cost the region about $1 billion per day is not good.

The buzz around same-day delivery continues. A few weeks ago, I wrote about how Google is testing a same-day delivery service in San Francisco. Well, it seems like the company is broadening its strategy in this area with the news that it has acquired BufferBox, which provides lockers for customers to receive packages from online e-commerce retailers (very similar to Amazon Locker). Check out this video to see how it works.

Meanwhile, the Wall Street Journal published an interesting article on same-day delivery, which included some interesting details about eBay’s activities in this area:

In each town, eBay plans to have dozens of couriers like Ms. Widtfeldt, who use their cars, bicycles or even the subway to shuttle goods around town.

 

“There’s a lot of inventory that’s close to customers, in stores and warehouses, but the link through delivery hasn’t really been cracked yet,” said eBay’s marketplace President Devin Wenig. “This is an experiment to determine if we can cement eBay into local markets by handling all aspects of commerce.”

 

There are high upfront costs to running a troop of couriers, for instance. EBay is paying couriers about $12.50 per hour, plus 55 cents per mile driven, and furnishes drivers with a parking card for when a lot is convenient. EBay plans to invest more into the service, including new uniforms and advertising on buses and, possibly, on couriers’ cars.

Like I’ve said before, the true winners in same-day delivery will be the retailers and service providers who can actually make money at it, rather than just leveraging it as a loss leader. Optimization and mobile technologies will certainly play a big role in achieving this goal.

If you are a 3PL or transportation company and you’re not involved in cross-border shipping with Mexico, then you are missing out on a growing business. A Reuters article published this week provides a nice overview. Here are some excerpts:

As the U.S. economy creaks along, the growing business with Mexico is a cause for cheer: Both Kansas City Southern and Union Pacific are reporting much bigger increases in cross-border shipments than in overall volume.

 

Two areas that are “just exploding” are transporting automobiles into the United States and intermodal shipping – moving goods in containers that are shifted from truck to train or train to ship – said William Galligan, vice president of investor relations at Kansas City Southern.

 

Total cross-border freight by train and truck has surged nearly 35 percent in the past five years, according to U.S. government data.

Finally, Apple’s CEO Tim Cook said that it will move the production of some Mac computers from China to the United States next year. “This doesn’t mean that Apple will do it ourselves,” he said, “but we’ll be working with people and we’ll be investing our money [more than $100 million].” It will be interesting to see where Apple decides to build its manufacturing facility (and why), and which products it will build there (and why). In terms of manufacturing jobs, my bet is that relatively few will be created because, more than likely, robots will be doing most of the work (see the New York Times article “Skilled Work, Without the Worker” published in August).

Now I need to sit down. Have a great weekend!

Song of the Week: “Stand” by R.E.M.

(Note: Transplace is a Logistics Viewpoints sponsor)

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