China Logistics

Robert Malone, of Forbes.com, is always right on the money with his insights into supply chain management and logistics. In a recent article he says that the biggest misplaced assumption is that China will continue to be the place of choice for companies looking to outsource manufacturing.

Via Forbes.com:

The Biggest Misplaced Assumption

That China will be for a very long time the outsourcing capital of the world. Yet wages there are rising, the cost of logistics for the U.S. and Europe is rising in dealing with China and a tilting point in some industries will soon be reached. This will mean more outsourcing work for India, South Korea and select African and South American enterprises.

We have touched on this concept many times over the past year at 3plwire. I would also look at Vietnam as a potential sleeping giant in terms of outsourced manufacturing, especially if they gain entrance into the WTO.

Logistics – 2007

As 2006 comes to an end, we begin to see a multitude of articles come out either providing a recap of the year or telling us what we can expect for the upcoming year.

This article from Supply and Demand Chain advises the latter. Here are the the top risks shipper’s will face in 2007 as written by Bernie Hart of JP Morgan Chase Vastera.

1. 2007 Tariff Code Changes

2. Reverse Logistics From Asia

3. Global Environmental Regulations

4. Security

5. Mandatory Automated Export System (AES) Filing

Read the whole article for an explanation of each item. What risks are you anticipating as we head into the new year? We would love to hear from you and we will publish the list of your suggestions in a future post.

Port Hueneme

Port Hueneme, the “other” port in the So Cal region, tends to get overlooked with all the attention paid to the ports of Long Beach/Los Angeles. However with global trade booming, especially in terms of imports from China, the Port of Hueneme is on pace for a record year in ‘06.

Via LAtimes:

“It’s been another banner year for us,” said Port Hueneme Harbor Commissioner Ray Fosse, whose facility moved 1.3 million metric tons of goods during the fiscal year that ended in June, or 9% more than the previous record volume in fiscal 2005. This year, it is again on a record pace.

“With the major ports going with containers as much as they can, customers are looking for a place where they won’t get chased out and where they become very big fish in a much smaller pond,” Fosse said. “And with the expanding economy there is just more and more demand out there for ports access.”

The Port of Hueneme is typically known for it’s handling of break bulk cargo, autos, and produce. The LA Times article also discusses the resurgence of some of the other “smaller” West Coast ports including Sacramento, San Diego, and San Francsico.

Portland looks to double capacity

The Port of Portland has some work to do as a recent study has found that they will need to double capacity over the next 30 years.

The report projects a million more people living in the region by 2035. The increased population and the ever-growing trade with Asia are both expected to strain the transportation infrastructure.

A big concern is whether highways can handle increased trucking. The report found that while rail and maritime services will grow in importance, trucking will continue to be the trade sector’s workhorse.

Scott Drumm with the Port of Portland says truckers often have to negotiate city streets, not highways.

That’s a growing problem with many major metro-areas these days – what to do with all the increased truck traffic as trade volume grows. No matter what mode of transportation is used to send goods from point A to point B, at some point it needs to be put on a truck for the local pick up/delivery.

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