THE START OF THE CHINESE LUNAR YEAR OF THE
Monkey, on Feb. 8, may have gone largely unnoticed, but it’s
beginning to look as if this monkey year will see more supply
chain changes than any of the last 50. Monkeys are by nature
intellectual and creative, but often have trouble demonstrating
these qualities. That can make them seem confused. Nothing
could be further from the truth, however.
You need look no further than Amazon.com for an example
of that. Amazon, which seems to be entering many logistics
businesses, is behaving much like the monkey—appearing to be
confused about its business model, but whatever it is, pursuing
it with a vengeance. If you’re like me, you are growing a little
tired of reading about Amazon, quadcopters, etc. If you’re in
the retail business, however, you have more
than a passing interest. Major retailers such
as Target are getting serious about mounting Amazon-competitive attacks by investing
more resources in their supply chains. Target
has announced spending initiatives for technology and supply chain of as much as $2.5
billion annually by 2017 and has hired an
Amazon executive to head up its supply chain
effort. Walmart has set similar goals.
But let’s not forget that Amazon is hardly
the only game in town. There are plenty of
non-Amazon-related supply chain develop-
ments under way. What follows are some
observations on a few of these developments and their potential
to change the way we ply our trade:
b The long-awaited expanded Panama Canal opens in May of
this year. Although the traffic-flow consequences of the enlarged
canal are still a little unclear, the expansion most certainly will
result in significant changes in international shipping patterns,
particularly to and from East Coast ports. Already, ships are
going from large to huge, requiring extensive modifications to
port facilities. One German shipbuilder has found a unique way
to widen Panamax ships, increasing their capacity by 30 percent.
b With the price of oil declining as it has, supply chain managers should be able to control their costs a little better. While
the economy seems to have softened somewhat, monkey years
are considered to be optimistic. (Actually, the U.S. jobless rate
in February continued at the lowest rate in eight years at 4. 9
percent. Some 242,000 new jobs were added, suggesting the
BY CLIFFORD F. LYNCH fastlane
The monkeys are back
monkeys may be right.)
b While legislative changes are possible,
they are not too likely in this election year.
Drivers’ hours of service, CSA 2010, and
other legislation affecting the motor carrier
industry are still a little unsettled and will
pretty much stay that way until 2017. One
major piece of legislation reauthorizing fund-
ing for the Federal Aviation Administration
is being handled much the same way the
highway reauthorization was—with delays
and disagreements. Among other provisions,
the legislation provides for the privatization
of air traffic controllers,
but don’t expect anything
until next year.
b E-commerce will continue to grow, and I am
still optimistic that logistics service providers will
continue to find ways to
participate more fully
in this new era of retail
deliveries, Amazon notwithstanding.
No discussion of monkeys would be complete
without some mention of the election process we are experiencing currently; but alas,
this is not a political column, and I will
refrain from comment. 2016 actually is a
“fire monkey” year, and fire monkeys are
intelligent and intuitive. They also excel at
both setting goals and meeting them. This
year, we would do well to stay alert and follow their lead.
Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider of logistics management advisory services, and author
of Logistics Outsourcing – A Management Guide and co-author
of The Role of Transportation in the Supply Chain. He can be
reached at cliff@cflynch.com.
