Morai-Logistics-Blog-Nearshoring-vs-Reshoring

In the past, we’ve written about the benefits of near-shoring over off-shoring. However, something we haven’t discussed in much detail is re-shoring.

A recent article on EBN discussed the findings of Cushman & Wakefield’s 2015-2017 North American Industrial Forecast. In the article, writer Jennifer Baljko highlights the differences between the praise reshoring has gotten in the media versus Cushman & Wakefield’s findings and in doing so, asks an important practical question of manufacturing and logistics companies: “Where will you put your factory?”.

Before going any further, it’s important to properly define the terms re-shoring and near-shoring as they are sometimes used interchangeably despite them having very different meanings.

According to a Forbes article on the topic,

Re-shoring refers to manufacturing that was previous done outside of America and has been moved back to America. Near-shoring refers to manufacturing work that has returned closer to America in countries such as Mexico.

Cushman & Wakefield’s findings, as Baljko points out, makes fining quality and affordable space for factories and warehouses one of the biggest challenges for companies who decide to move back home.
“A lack of quality space remains one of the biggest challenges facing manufacturers in the U.S. Emerging technological advances, such as improved measuring/process control, advanced digital technologies and sustainable manufacturing, have made many older facilities functionally obsolete, opening the door for more speculative construction to take place within the next few years,” the report noted.

How Does Near-shoring compare?

Although Cushman & Wakefield’s study advised caution for companies considering re-shoring their manufacturing, their findings did indicate that near-shoring to Mexico might be a more prudent long-term strategy.

“Major drivers of industrial real estate activity continue to reflect the prominent role of distribution and logistics sectors. They include large renovations, like Kuehne+Nagel’s 341,000 sf at O’Donnell Logistics Park, or expansions, like Walmart’s 132,000 sf at Parque Industrial El Convento” they write.

The reason for this is that is because of the competitive land prices the country offers. “Average industrial land costs range from $638.08 psf to $231.85 psf for private industrial parks sites and raw land respectively” they write in their report.

Manufacotring in Mexico also has other advantages that we’ve written about elsewhere, but according to Cushman & Wakefield’s, “Generally, Mexico is increasingly developing a pool of high-skilled workers and rapidly integrating its manufacturing industries with global production lines. Also, in addition to a successful macroeconomic reform agenda, an ambitious investment program by the federal government is expected to bring further improvements to Mexico’s transport and logistics infrastructure” they highlight in their findings. “Given such factors, Mexico’s industrial real estate market is forecast to continue growing and benefiting from increased demand from a diversified range of industries” they conclude.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Globalization has broken through several technological, political, and geographic barriers to supply chain logistics. However, while its been documented that companies that include more women at the top levels of leadership tend to outperform those that don’t, there is still a noticeably large gender gap when it comes to the logistics industry.

Although there has been a great deal of progress in the last few decades in closing the gender gap, this infographic shows that there is still a lot left to do.

Closing the gap for good shouldn’t be thought of as barrier for those of us in logistics, but rather an opportunity. An opportunity for logistics companies, as Shalu Shigram puts it, ‘to maintain a competitive edge by utilizing all human resources and potential capital.”

Top 10 Facts Exploring the Gender Gap Around the World

Morai-Logistics-Infographic-Looking-at-Gender-Gap

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

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Johnnie Doe

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Morai-Logistics-Blog-Epidemic

Last week, an article in The Verge covered Bill Gates’ statements concerning the lack of preparedness the world saw when it came to the Ebola epidemic that ravaged Sierra Leone, Guinea, and Liberia. What Gates suggests is needed, is for preparations for epidemics be similar to preparations for war, “war games” and all.

“It’s useful to compare our preparations for epidemics with our preparations for war. Defense budgets and investment in new weapons dwarf investments in epidemic preparation. NATO has a mobile unit that is ready to deploy quickly. Although it’s not a perfect system, they do joint exercises where they work out basic logistics like how fuel and food will be provided, what language they will speak, what radio frequencies will be used. When soldiers sign up to serve, they know what the risks are and who will take care of them if they’re injured or killed. Few if any of these things exist for an epidemic response.” the article quotes Gates, who originally wrote this in The New England Journal of Medicine.

Gates isn’t wrong in his assessment.

When You Play the Game of Infectious Diseases…

A research paper written by Thomas K. Dasaklis, Costas P.Pappis, and Nikolaos P. Rachaniotis in the International Journal of Production Economics which looked at epidemics control and logistics operations highlighted the importance of logistics supply in controlling epidemics.

“Logistics operations play a crucial role during the containment effort of an epidemic outbreak as they strengthen the ability of all the parties involved to promptly respond and effectively control the situation,” they wrote. “Even at a long-term level, strategies adopted in commercial supply chains could be also adopted in the case of emergency and/or humanitarian supply chains in an effort to match supply with demand”.

The researchers continue their paper with clear examples of the necessity of a strong logistical network to combat an epidemic,

“The flow of essential medical supplies, transportation activities and demand for medical personnel are some of the logistics-oriented features that depend on the available information regarding disease’s progression. At the same time the management of materials flow during the containment effort necessitates its own stream of information. Highly sophisticated systems in business supply chain and relevant technologies like RFID could also be adopted in the case of epidemics containment”.

This is not say to say that there is a one-to-one comparison to more traditional logistics models, ” Such supply chains have much in common with commercial supply chains but at the same time they pose significant challenges as they operate under uncertain, and many times, chaotic conditions” the researchers clarify.

The paper’s conclusion is similar in some aspects to Gate’s words when it finds that there are “a plethora of gaps and discrepancies in the literature regarding epidemics control and logistics operations”.

As The Verge article, quoting the US Center for Disease Control and Prevention points out, over 25,000 across Sierra Leone, Guinea, and Liberia have been infected with Ebola as of March 15th, and 10,000 people have died.

With the virus still spreading, and 116 new cases confirmed in the week before March 8th according to the World Health Organization, perhaps Gates’ suggestion that the Ebola epidemic (and really epidemics) be treated as serious as war is treated isn’t a bad one.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-West-Coast-Ports

With the worst of the West Coast dockworkers strike effectively ended last month, now is a good time to take a step back and assess the costs, consequences, and repercussions to all of the stakeholders that were affected in the nine month strike.

Optimism from Mayor

Political stakeholders have been the most optimistic about the future of the West Coast port and its ability to meet the massive backlog that has accrued over the protracted labour dispute.

” Business should return to normal at U.S. West Coast ports in about three months, and long-term damage from a nine-month labor dispute should be limited, said Long Beach, Calif., Mayor Robert Garcia in an interview with the Wall Street Journal.

Later in the article, he admits that some business may have been permanently lost to East Coast ports, but remained confident that they would regain the vast majority of the business.

Zepol report

A report put out by Zepol concerning the impact of the West Coast port strike puts forth a less optimistic view than Mayor Robert Garcia. Some of the highlights of the report are as follows:

  • Total U.S. container imports are down over 5 percent this year, compared to January and February of 2014.
  • The ports of Los Angeles and Long Beach, which make up a combined 40 percent of U.S. container imports, declined by 19 and 20 percent so far in 2015.
  • East Coast ports have increased container imports by 8 percent this year.
  • Total U.S. imports by TEUs (twenty-foot containers) dropped from 2.93 million in January through February of 2014 to 2.78 million in 2015.
  • Combined, the ports of Los Angeles and Long Beach have declined by over 230,000 TEUs compared to the first two months of 2014.
  • The port of New York/Newark grew by over 34,000 TEUs. The port of Savannah increased 20 percent with an increase of over 40,000 TEUs and Houston rose 29 percent, by nearly 31,000 TEUs.

Canadian fallout

Although Canada wasn’t as heavily affected by the strike as its southern neighbour, however retailers north of the border still felt the impact of the situation, in particular, Ontario’s automotive plants.

An article on OurWindsor.ca discussed the potential and actual impact of the west coast strike at the time. Instances of Honda Honda Canada Manufacturing plants sometimes running at 60 % capacity, congestion at B.C. ports, shipping containers running five to 10 days late, and a trickle-down cost to consumers from additional costs incurred from said congestion were all issues that this article brought up.

As previously mentioned in this article, the worst of the strike seems to be over. However, there’s still a chance that even with the most optimistic of predictions and outcomes, more complication will arise. Especially when the five-year deal still must be approved by the 13,000-member International Longshore and Warehouse Union’s rank-and-file.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

This past Sunday was International Women’s Day. In tribute to celebrating women globally, we would like to dedicate this week’s post to showcasing the major milestones in recent development for the state of women in the logistics and supply chain industry.

Last year we posted an infographic that the logistics community wholeheartedly enjoyed and we thought we would continue the trend and release an update, this time in the form of an eBook. We have come a long way from the world of logistics notoriously being known as a Gentleman’s Club, but we still have a ways to go when it comes to diversity in logistics (and not just with women).

From education, job options, and position within companies, we take a careful look at contemporary findings and showcase the statistics behind women in the logistics industry for 2015.

Women in Logistics

Morai-Logistics-Women-In-Logistics-Linked-1

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-Coming-and-Going

There are several things when operating a business that despite the most careful planning, cannot be avoided: unexpected weather extremes affecting delivery times, changing customer expectation and demand, having to react to competitor innovation, and every business big or small having to deal with inevitable employee turnover. I’d like to focus this week’s post on the last point.

Data from the American Trucking Association (ATA) shows that the turnover rate at large truckload carriers rose one percentage point to an annualized rate of 97% in the third quarter of 2014. In 2013, the ATA presented data showing those with more than $30 million in annual revenue— averaged 96 percent for all of 2013, down 2 percent from the 2012. And that’s a drastic improvement over the all-time high of 130 percent turnover in 2005.

Employees in warehouses also have very high turnover rates, especially where large warehouses are concerned as shortages in the availability and quality of labor may have a lasting effect on a firm’s competitiveness. “Getting the right things to the right people at the right time” is the fundamental principle for any supply chain. What is sometimes forgotten in discussions is that for this principle to be enacted, a business needs the right training to be given to the right associates so the right skills can be cultivated and utilized. With that said, let’s look at some key items when discussing employee turnover in the logistics industry.

Who is Most Likely to Change Jobs?

A study from CareerBuilder measured worker satisfaction in the U.S as a whole and the logistics industry specifically. Of the workers surveyed, they found certain factors appear to make workers significantly more likely to change jobs than others:

  • Workers who are dissatisfied with their job: 58 percent plan to change jobs in the New Year
  • Workers who are dissatisfied with advancement opportunities at current company: 45 percent
  • Workers who are dissatisfied with their work/life balance: 39 percent
  • Workers who feel underemployed: 39 percent
  • Workers who are highly stressed: 39 percent
  • Workers who have a poor opinion of their boss’s performance: 37 percent
  • Workers who feel they were overlooked for a promotion: 36 percent
  • Workers who have been with their company two years or less: 35 percent
  • Worker who didn’t receive a pay increase in 2013: 28 percent

Who is Most Likely to Stay?

The same study also looked at the top reasons as to why employees would stay in their current job. Though there were a variety of reasons, there were 8 reasons in particular that they found:

  1. “I like the people I work with.” – 54%
  2. “I have a good work/life balance.” – 50%
  3. “I have good benefits.” – 49%
  4. “I make a good salary.” – 43%
  5. “There still is a lot of uncertainty in the job market.” – 35%
  6. “I have a quick commute.” – 35%
  7. “I have a good boss who watches out for me.” – 32%
  8. “I feel valued and my accomplishments are recognized.” – 29%

Sometimes Goodbye Isn’t so Bad

A recent article by the International Business Times quoted a study from Payscale that demonstrated that of the fortune 500 companies, Amazon was second in the number of employee turnovers. Despite having some of the least loyal employees, Amazon’s high turnover isn’t necessarily a bad thing.

“A high employee turnover rate isn’t always because the company isn’t a good one to work for. When workers are willing to hop from job to job, it is usually an indicator of an improving job market”, Payscale’s lead economist Katie Bardaro said.

“Workers might be job-hopping more than before. This means that the industry is hot and the economy is improving,” she told Business Insider. “Some of the firms on [the high turnover] list are there, because they’re a hot market.”

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!