In recent years, the growing trend with many U.S. companies has been to relocate some or even all of their off-shore production back to North America. China no longer holds the sway that it used to, but countries such as Mexico are quickly becoming the much more attractive option. Here are 12 reasons why you should consider near shoring in Mexico.

The Right Time to Consider Nearshoring Strategies to Mexico

morai-logistics-12-reasons-to-invest-in-mexican-nearshoring

As foreign investment in China stalls, Mexico’s foreign investment continues to grow. As a result, demand for facilities and land is beginning to drive up. Thus, the best time to invest in Mexico for your manufacturing or sourcing potential for your organization is now.

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!

We hope everyone has had a great holiday and we would like to wish all of our readers a Happy New Year! To kick off the year, we have finished compiling our infographic on the top logistics and supply chain facts from the news that we’ve collected throughout last year. As there is a large number of news items spanning the many large topics in the logistics industry, we decided to create our Top 10 by focusing on categories:

  1. Drones
  2. Same-Day Deliver
  3. Supplier Diversity and Women
  4. Sustainability
  5. RFID
  6. World Bank Institute’s Private Sector Platform
  7. Automation
  8. Online Retail
  9. Truck Driver Shortage
  10. Logistics Slow Growth

Each of these topics have some pretty interesting facts and statistics that may have been missed in the hustle and bustle of fellow logistics professionals and enthusiasts. And while we haven’t covered all of the interesting facts from 2014; we felt that these topics helped changes the face of the logistics and supply chain industry in 2014 and serves a good snippet to review the year.

Top 10 Logistics and Supply Chain Facts of 2014

Morai-Logistcs-Top-10-Logistics-and-Supply-Chain-Facts-of-2014

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!

Amazon Spain. Source: Wikimedia Commons
Amazon Spain. Source: Wikimedia Commons
Amazon Inc. is in the news again. This time, the online retailing giant got press attention for having petitioned the Federal Aviation Administration (FAA) for an exemption from rules prohibiting the use of drones for commercial purposes. This move, along with its recent job posting calling for experienced pilots to fly its drones, indicates that Amazon is serious about moving Prime Air, an ambitious thirty minute delivery program involving unmanned aerial vehicles, from concept into reality.

Although the experimental delivery program may still be a few years away, it is this sort of unorthodox business strategy that has led the company into having a hand in 20 percent of all e-commerce in North America. Other programs that Amazon has implemented over the past several years has also caused stirs in B2B markets, cloud technology, and those in 3PLs in general.

1 – Shifting from to B2C to B2B

Amazon has been selling millions of items annually to thousands of households for several years. However, since 2012, it has been targeting the lucrative wholesale and distribution market through AmazonSupply which itself grew out of years of experience operating Smallparts.com since it was acquired in 2005.

Whereas common items on Amazon’s main site include books, CDs, and Blu rays, many of AmazonSupply’s items are those that would otherwise only be obtained through specialist distributors such as centrifuges, micrometers and air cylinders. And unlike many other businesses that specialize in industrial B2B transaction, Amazon focuses its marketing through digital media assets such as videos, post downloadable, CAD drawings and user reviews.

Although AmazonSupply’s main competitor, the Chicago-based industrial supplies giant W.W Grainger, holds an estimated 6% of the entire B2B market according to a Forbes article. Despite this, AmazonSupply’s future is bright. It already has Grainger’s online inventory beat by almost twice the amount indicating that it may in fact be the major player in the B2B market rather than its current status as only a major player.

2 – The future is in the cloud

The computer infrastructure that Amazon has built for Amazon Web Services (AWS) is considerable. With it, the company has been able make itself felt in the e-commerce business world by dominating the cloud computing industry and “hosting customers from NASA to Pfizer PFE +0.89% and ringing up an estimated $3.2 billion in revenue last year” writes Claire O’Conner of Forbes.

With its control of the cloud computing industry, “Amazon might leverage its investment in cloud technology to become a clearinghouse for a steadily increasing share of e-commerce business” wrote Dr. Robert C.Lieb and Kristin J. Lieb in the Quarter 3 2014 report. As more and more 3PLs move into the digital world, that means that Amazon will continue to be a looming presence as it moves from customer to competitor.

3 – Customer or competitor?

There’s been some discussion as to whether Amazon is in the process of making a committed move into the 3PL market. The company already offers a range of services and benefits to its two millions vendors such as cheaper transporting services, order management, inventory control, delivery and billing–all of which put it into competition with other 3PLs.

Referring back to Lieb & Lieb study, they found “with the continued expansion of the company’s warehousing, distribution services, order fulfillment, and transportation services, Amazon might become a formidable competitor by offering shippers a broad range of services that 3PLs already provide”.

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!

We hope you have been enjoying this summer so far! As we are now in the latter half of the warmest and sunniest of seasons, we would like to take the time to focus on some summer-themed logistics and supply chain related news.

Nova Scotia Aims to Modernize Seafood Industry Trading

Source: Wikimedia Commons
Source: Wikimedia Commons
Daily Business Buzz recently released an article on how Ocean Executive, a Bridgewater, Nova Scotia based company, is developing an online platform aimed at improving supply chain efficiency for the seafood industry. Ocean Executive has received a $100k seed investment from Innovacorp, a Nova Scotia based venture capital organization to fuel the idea and help it come to fruition.

Mikel Budreski notes that the platform will help streamline the sales and marketing process for a wide range of seafood companies worldwide. Ocean Executive’s platform seeks to allows users, be it buyers or sellers, to connect directly to each other and their respective products and services in real-time via a an auction marketplace (a function that can be either public or private). This allows users to receive live pricing and market data for more efficient and transparent trading practices:

All players in the supply chain stand to benefit from true and fair market pricing, whether it’s fishermen, processors, wholesalers, distributors, traders, brokers, retailers or large restaurant chains.
– Mikel Budreski, President of Ocean Executive

Greg Phipps of Innovacorp notes that the seafood industry is still using outdated an inefficient processes to buy and sell products and that this technology being developed by Ocean Executive has the potential to modernize this dated trading system. This is indeed a trend that is happening with regards to the logistics and supply chain industry as a whole; combining technology and the Internet of Things (IoT) to help optimize the industry is indeed proving to be a strategy that is here to stay.

Coconut Water Affecting the Coconut Supply Chain

Source: Wikimedia Commons
Source: Wikimedia Commons
You see it in almost every grocery store; some places even have a whole section dedicated to the number of variations, flavours, and brands. We’re talking of course about coconut water! Whether you love it or hate it, this product has made our way into store shelves globally.

Tessa Riley of The Guardian gives the scoop on the coconut water craze and how it affect s the supply chain. This spur in popularity is largely facilitated by North America, now the biggest global market for coconut water. Originally seen as a useless byproduct by coconut farmers, and normally reserved for exotic holidays, the North American market has really taken coconut water to the next level. From the sales report of the top three most popular brands going from almost nothing in 2004 to a whopping $400 million dollar industry in just under a decade (i.e. 2013).

For a bit of history on coconut farming, traditionally coconuts were harvested for their ‘copra,’ or meat, which is then used to extract coconut oil. Coconut water is notorious for being hard to preserve as it starts decomposing as soon as the coconut water is cut. Thus, coconut farmers see it as a useless byproduct. Since the leap in demand though, initiatives have been taken to allow coconut farmers to consider the production of more diverse economic return like coconut water, which has a much higher return on investment per coconut for the farmers. Lack of technology and limited knowledge is the biggest wall for the coconut farmer though, despite the UN Food and Agricultural Organisation promoting best practices on small-scale production of bottled coconut water.

This gap between the coconut farmer and the consumer along the supply chain is growing and if the coconut water industry intends to stay sustainable, there needs to be some way to bridge the gap that would allow coconut farmers to leverage knowledge and technology to allow them to produce the great demand for coconut water.

Cashew Juice? Not Just a Nuts Idea

Source: Wikimedia Commons
Source: Wikimedia Commons
PepsiCo has started an initiative to test out the market for a new line of products in order to solve the dilemma of a major issue in the extraction and production of cashew nuts: heaps of agricultural waste. Leon Kaye of Triple Pundit gives us an insight into what Pepsi has planned to alleviate this waste problem.

When extracting nuts from cashew plants farmers usually throw away the fruit attached to the nut. Known as the ‘cashew apple,’ this nut is full of Vitamin C as well as other essential nutrients. It also has many other potential uses such as: being another form of meat substitute, used for the production of alcohol, or animal feed.

PepsiCo has started work in India to collaborate with farmers to source cashew apples and use it to create the next iteration of specialty juices, along the same lines of coconut water, pomegranate juice, and hazelnut milk. This comes with a new set of logistics challenges though, mainly that of storage, transport, and shelf life. The fruits are fleshy and must be collected from the ground (not the trees), and must be processed within 24 hours (if the nut is removed before collection, then the time frame is shortened to a mere six hours). Temperature is also important; they must be stored in containers that do not get cooler than 5 degrees. Furthermore, the intended market for where Pepsi wants to sell is about 3000 km from the growers’ sourcing stores (i.e. Sao Paulo and Rio de Janeiro).

Testing it out in both the South American and Indian market to start, PepsiCo hopes to eventually expand it other markets across the globe.

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!

We have already predicted that there will be challenges when attracting the new generation, i.e. Generation Y or the Millenials, to the concept of logistics and supply chain. What better way to influence the move to educate, and more importantly motivate than to make learning about logistics more fun and engaging through play?

On this Industry Focus Week post, we’re going to be exploring different ways gaming and play have been incorporated into the world of logistics and supply chain learning.

Business on the Move – The Game

Logistics games have existed in the past, but they’re normally meant of the University or other post-secondary/professional education stream. Concepts like the Beer Game have existed for a while, but we’ve still got an untapped market: the youth of today. Millenials are still very unaware that there even are careers in logistics.

Source: Business on the Move
Source: Business on the Move

In an effort to attract future generations into the concept of logistics, Andy Page and Pat Smedley, two former business studies teaches, sought to educate all ages but with a focus on youth (9-19 years old) behind the concept supply chain and logistics. They set up a social enterprise called Very Enterprising Community Interest Company in 2011 in order to create Business on the Move.

This board game presents the following challenge: How do you (as a player) move different products from China to their UK customers? You are given the options of different modes of tansportation (i.e. the standard land, sea and air). The point of the game is the be the player that can successfully execute the moving of your goods as quickly, as profitably and as responsibly as possible. Or at least better than the other playes!

Players are faced with taking decisions that are surprisingly similar to those made regularly by many businesses when addressing logistics and supply chain challenges. They have to tackle meeting delivery deadline, improving their supply chain (i.e. supply chain optimization), and ultimately: How to profit! And to top it off, Business on the Move also created sustainability initiatives to the game mechanics to address issues like reducing your company’s carbon footprint?

It is no surprise that Business on the Move has already won an award under the Royal Bank of Scotland’s Inspiring Enterprise initiative as well as UnLtd,a charity that supports social entrepreneurs. SHD Logistics writes that to date:

To date, nearly 600 young people, teachers and supply chain professionals have played Business on the Move, with another 15,000 young people projected to play over the next 12 months. Andy and Pat’s vision is that by 2020 over 100,000 people will have played the game.

Our team at Morai Logistics believes that this is a great move and a wonderful step in the right direction for opening up the concept of logistics and supply chain as not just a career option, but a fun and challenging one to boot!

Warehouse and Logistics Simulator

Gamers are now even getting their own simulator! Simulator genre lovers and casual gamers can finally experience a game that outlines the challenges involved in warehouse and supply chain operations.

Published by United Independent Entertainment GmbH (known for other simulator games like Woodcutter Simulator, Airport Simulator, and Towtruck Simulator to name a few) and developed by the team at app2fun, Warehouse and Logistics Simulator puts your in the driver’s seat of a forklift as you scramble to move goods around the warehouse to reach a time-based high score.

While the game itself did not amass great press or review from the official video game reviewers, it is a great start into a realm of possibly excellent thought out logistics related simulation games. This targets a market that logistics has yet to see and we’re excited to hear that developers have launched something like this to begin with. We are definitely keeping an eye out.

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!

Source: Wikimedia Commons
Source: Wikimedia Commons
In the recent years, China and Mexico have been battling to be the prime hub spot for logistics operations in North America. While there are still advantages of offshoring to China, for example their already established work force and prime manufacturing facilities, when it comes down to it cost and time are the prime factors for the change. We will be discussing the expected advantages for nearshoring as well as present some statistics that support the trend that suggest that nearshoring, especially for companies that are looking to build manufacturing plants, is the better option.

Top 5 Expected advantages of Nearshoring

Inbound Logistics Magazine released and analysis of the status of the logistics and supply chain industry in Latin America. Below is an excerpt of survey respondents based on research by AlixPartners of the top five expected advantages of nearshoring:

  • Lower Freight Costs
  • Improved Speed-to-Market
  • Lower Inventory Costs
  • Time-Zone Advantages
  • Improved Cultural Alignment with North American Managers

Nearshoring is becoming more and more attractive as geopolitical changes, and factors such as rising fuel costs, have been affecting the main attraction for China: lower total cost for logistics operations. By 2015, China’s wages are expected to rise to $6 USD, and by this point it will no longer be cheaper than Mexico’s flat wages.

3 Statistics on Mexico as an Advantageous Nearshoring Move

Statistics since our initial post on our case study exploring Mexico as a prime logistics hub has shown that the trend to nearshore is not just very real, but also becoming more and more attractive. Logistics Management’s report exploring how US manufacturing costs are now equal to Mexico and how costs will be equal to China by 2015 seem to be confirmed as we near 2015. The following are statistics that we found that further solidify this trend:

1 – The full landed cost of Chinese production rose from 2005-2010 to 87% of US costs, while Mexican costs fell to 75% of US costs.
Source: Lilly and Associates

2 – Ocean freight from Altamira, Mexico to the port of Miami takes 6 days while a similar shipment from China can take up to a month to arrive.
Source: Lilly and Associates

3 – China’s fuel costs grew at approximately 20 percent per year in the past few years.
Source: Supply Chain Brain

China has some challenges to compete with the attraction of nearshoring to Mexico, and indeed efforts are being taken in order to control the rising fuel costs and the new minimum wage standards in order to remain a strong competitor as an offshoring option for North America. But the concept of nearshoring is now not just a real avenue of exploration, it simply cannot be ignored for those in the North American logistics and supply chain industry.

If you’re interested in finding out more Mexico as a solution for your logistics and supply chain needs, check out our white paper on Mexico and Third Party Logistics!

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!

3 Reasons to Partner with a 3PL Provider
3 Reasons to Partner with a 3PL Provider

Why do companies look to outsource their logistics processes? The primary reason is that companies expect third-party logistics providers (3PLs) or logistics service providers (LSPs) to run all transporting and warehousing operations more efficiently, and at a lower cost, than they can run it themselves. The services that 3PLs provide can include all of the steps along the supply chain from origin to destination depending on the type of partnership. Furthermore, multiple 3PLs can take care of different aspects of your logistics needs (one that specializes in small package deliveries for one product line and another for larger shipments, etc.).

Take advantage of this free white paper today to learn about the logistics and supply chain industry by filling out this form below. If you subscribe to our content by checking yes (it’s optional!) to our e-mail subscription form will send you updates on our next White Paper or other digital assets as they become available. We will also never share your information.

This White Paper focuses on:

  • Benefits of outsourcing third-party logistics services.
  • What makes a 3PL provider a good one.
  • Current state of the logistics industry for 3PL.
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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!

Source: Wikimedia Commons
Source: Wikimedia Commons

We’d like to kick off April with our Industry Focus Week post on reverse logistics. You may have seen lots of news in the past little while about the benefits of reverse logistics, and how emphasizing strategies on reverse logistics is a good thing. But what exactly is reverse logistics? We thought that this month we would focus on answering that question for our readers.

What is Reverse Logistics?

According to The Council of Logistics Management, the official definition of reverse logistics is:

The process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. More precisely, reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics.

In layman’s terms, reverse logistics is essentially all logistics operations related to reusing products and materials. Contrary to normal logistics processes, which focuses on bringing products towards the customer (i.e. origin to destination), reverse logistics goes at least one step back in the supply chain. For example, having products or goods move from the customer to the manufacturer or distributor. The process of reverse logistics creates its own challenges, as certain factors can affect how goods can be taken backwards through the supply chain cycle (e.g. cross-border issues), hence the importance of creating a proper reverse logistics structure.

Looking at its most salient model, reverse logistics in the retail industry is the process by which customers return their products.

Why Is Reverse Logistics Important?

The importance of reverse logistics is mostly based on industry, but the average manufacturer spends 9-15% of total revenue on returns. It can be seen by certain companies as a hidden cost, but it can be a very real one based on industry and involves processes where vendors convert liabilities into either reduced liabilities or viable assets (i.e. it’s more than just warranty and basic logistics processes).

Industries involved in retail are obviously the most affected by reverse logistics risk management, as 95% of customers will not buy from a company if they have a bad returns experience. Thus, focusing on reverse logistics is an important, and sometimes unseen, customer service opportunity that many businesses have yet to properly leverage. US-based experts have suggested that companies with best-in-class reverse logistics capabilities average a 12% advantage in customer satisfaction, which leads to better retention and a higher rate of return (customers).

Process Improvement Strategies

Reverse Logistics Magazine released a great list of reverse logistics elements that can be modified and improved for optimizing the reverse supply chain:

  • Gate keeping
  • Compacting Disposition Cycle Time
  • Reverse Logistics Information Systems
  • Central Return Centers
  • Zero Returns
  • Remanufacture and Refurbishment
  • Asset Recovery
  • Negotiation
  • Financial Management
  • Outsourcing

They also highlighted the importance of updating warehouses with reverse gear. This essentially focuses on equipping warehouses with the capability to accept returns, process, repair, and replace products coming in through the reverse supply chain cycle. So if your company involves any form of reverse logistics, these factors can be the difference of having your end step (i.e. customers) experience improved.

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!

Source: Wikimedia Commons
Source: Wikimedia Commons
There is a lot of talk these past couple of months on the implications of 3D printing and how it will change the face of the logistics and supply chain industry. This month we thought we would highlight the industry and shed some light into its development.

Widely practical, 3D printing is used primarily for prototyping and, more recently, distributed manufacturing. It is commonly seen in the following industries: architecture, construction, industrial design, automotive, aerospace, various engineering and medical industries, and fashion just to name a few.

What is 3D Printing, Exactly?

By definition, 3D printing is the process of making three-dimensional solid objects using a digital model. Also known as additive manufacturing, 3D printing uses a process called the additive process and carries out the process under computer control.

In the additive process, layers of material are laid down in different shapes. This is in contrast to subtractive processes in manufacturing, which is what is traditionally used to produce goods and involves the removal of material by various methods (i.e. cutting, drilling, carving, etc.).

The technology and concept of 3D printing is not a new idea. In fact, 3D printing technology has been around since the 1980s. The first working 3D printer was created by Chuck Hull of 3D Systems Crop. in 1984. It wasn’t until the early 2010s that companies started producing 3D printers for commercial distribution and use. This is partly due to a Moore’s Law type of progression; the development of the technology used in 3D printing has drastically impacted the price of 3D printers enough to be able to release it to consumer production.

How Will This Affect the Supply Chain?

Cerasis has released an excellent post regarding the impact of 3D printing particularly in inventory and logistics. The most interesting concept is that with the advent of 3D printers, the need to store finished products is nonexistent. There is no more need to store component parts before compiling the final product anymore; it essentially gets rid of the need to shelve or store products in warehouses anymore. This essentially collapses the supply chain to its most basic processes, which creates new efficiencies along the supply chain.

The 3D printing process can drastically alter the global supply chain and re-assemble it into a new local system. It can bypass the constraints of the traditional supply chain model: the need for low cost, high-volume assembly workers, real estate for stages of manufacturing and warehousing components, etc. Thus, the efficiencies of 3D printing impact the entire supply chain, from the cost to distribution and assembly to improving assembly cycle times.

Forbes released a post recently that suggests 3D printers essentially turn consumer products into digital content. The printers can already produce fairly detailed solid objects, though at this stage quite expensively. But according to Moore’s Law, and indeed looking at the history of 3D printing, prices have dropped significantly since the 1980s and will do so in the future. This could impact hardware stores and parts distribution services the same way e-books have impacted book stores.

Too Good to be True?

Tech Republic recently released a post suggesting that 3D printers are a potential double-edged sword and made some interesting points regarding what we should watch out for throughout the development of 3D printing as a process to be used by the masses.

The process of 3D printing itself, while efficient in many ways, are also not the most environmentally friendly. To start, they are energy hogs, 3D printers consume 50-100 times more electrical energy than injection molding and has a reliance on plastics. They are also known to pose health risks, especially with 3D printers used in the home. The emission from desktop 3D printers release unhealthy air emissions. There are also numerous issues on the corporate and legal side, involving potential national security risks, ethics and regulation, and corporate responsibility of products from 3D printed technology. So while 3D printing is something to look forward to, it is also something we should watch carefully.

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!

Sochi-Olympics-LogoIn the spirit of the games, we’ve decided to do our monthly Industry Focus Week on the Olympics. As many of you may already know the Olympics happens once every four years, alternating every two years between the Summer and Winter Olympics. The creation of the ceremony was inspired by the original ancient Olympic Games from Olympia, Greece back around 800 BC. Currently, it is governed by the International Olympic Committee (IOC), which was founded in 1984.

It is now a global event where the top athletes of every participating country meets to compete in a host city which changes every year. This obviously created many economic for the hosting cities, but present logistics challenges in many aspects leading up to and during the event itself.

This blog post, we’re going to take a look at the logistics and supply chain processes behind Sochi to give you a better idea of how a massive event like this can be pulled off from our industry perspective.

The 2014 Sochi Winter Olympics Logistics Challenges

The Olympics opening ceremony happened last week, and while it went off almost completely without a hitch, the task of turning Sochi into an Olympic venue is not without its challenges.

The Logistics of Building Sochi into an Olympic Host City

John Fritsche, the NBC Senior VP for Olympics Operations commented that the Sochi Olympics has been the most complex since his career began in 1979:

One of the things logistically challenging about Russia and Sochi is that from a marketplace point of view there is no Home Depot here, no Costco here, no city industrial base or any kind of base to draw from… We have to bring everything we need, as much as we can, and then bring it back to the States.

NBC reported that it would likely exceed $100 million in production costs. The majority of the problem lies in the fact that it is not very easy to get to Sochi. News has already spread regarding people getting to Sochi from around the globe having difficulties getting to the Olympic venue (i.e. it’s not the easiest to fly to, and the visa is over $200). But this doesn’t compare to the difficulties of getting materials into the city. Many of the goods for example, have to get routed through Istanbul, then across the Black Sea by boat in order to get to the destination.

Getting Goods Into Sochi

The Olympics in general is notorious for being one of the largest logistics nightmares when it comes to transporting goods on a global scale. Many packages will be sent from all over the world to a central location at the same time so that athletes, spectators, staff and media representatives get everything they need during the games. For a sample of the demographics, there are:

  • More than 7,500 Olympic, Paralympic, and respective team members attending
  • Over 25,000 volunteers helping out
  • Over 12,000 media representatives

All of the above-mentioned will need their tools or equipment, including extras (in case goods are faulty or damaged) for the entire duration of the Winter Olympics. Aeroloft and Russian Railways (RZhd) are the official cargo freight carrier and official freight services providers for the 2014 Sochi Winter Olympics this year, respectively.

Goods will be loaded into Russian Railway trains and shipped to one of two distribution centers, boasting 2,700 square metres of space to house all Olympic game-related goods and the other 8,400 square metres (IBC Warehouse) for all broadcasting equipment.

Warehousing Snow

A really interesting fact about the Sochi that you may not know is that it is one of the warmest locations ever selected to host the Winter Olympics. In order to help accommodate for this challenge, the Olympic ski village of Roza Khuntor developed the largest snow-making operation in Europe. They have 404 snow cannons ready for use, and in preparation for the winter Olympics, have saved 450,000 tonnes of snow from last winter. They’ve been stored in the largest snow warehouse ever made.

The end product that you see today is a great logistics success story that involved overcoming many challenges from our side of the industry. We hope that our reader who aren’t too familiar with logistics and supply chain now have better understanding (and hopefully a new appreciation!) of how we get your goods to where they need to be!

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!