DC Velocity - May 2013

inbound

Every year, Peter Friedmann, Washington counsel for the Coalition of New England Companies for Trade (CONECT), closes the group’s Northeast Trade and Transportation conference with a rapid-fire rundown of issues that will affect international traders in the coming year. Here are just a few excerpts from his presentation at the 2013 event, held in Newport, R.I., in April:

▪ The sequester-related elimination of overtime for Customs and Border Protection (CBP) officers at the busiest land borders and seaports “could turn out to be almost as disruptive as a strike.” There’s no need to cut overtime because the Merchandise Processing Fee (MPF) pays for it. And why have furloughs, for that matter? “Is CBP so lean and mean that it can’t find 5 percent to cut in its operating costs?”

▪ The CBP commissioner’s position remains vacant, and the Obama administration may not fill it. The “next wave” of top CBP managers is likely to include “political bureaucrats” rather than the current managers, who worked their way up through the ranks and have a cooperative relationship with the trade community. Politicization will mean less freedom for officials to interact on their own with traders. “This may be our last opportunity to work with the Customs we’ve known for years.”

▪ CBP wants customs brokers to take on a larger role in vetting importers from a security standpoint. The express couriers, which clear large numbers of import shipments, say they can’t do that because of their high shipment volumes and tight delivery times. “In my view, CBP is leaning toward giving express couriers a pass on some of this.”

▪ Bigger ships carrying more containers need to be worked faster than is currently being done at most U.S. ports. Ports should be looking at the Charleston model, which accepts automation like bar-code readers and uses nonunion labor to operate cranes while union members handle other jobs. As a result, Charleston moves an average of 42 containers an hour. ;

Hot topics for
international traders
The 10 best warehouse networks

Each year, supply chain specialist Chicago Consulting identifies what it calls the 10 Best Warehouse Networks. While the list might not have quite the cachet of, say, Vanity Fair’s annual “Best Dressed” list, it nonetheless has a certain standing in the logistics community.

The 10 Best Warehouse Networks list identifies the cities from which companies could theoretically serve the greatest percentage of the population in the least amount of time. Uniquely, the list looks at networks consisting of from one to 10 facilities. For example, if a company uses only one warehouse to serve the entire United States, then locating that facility in Vincennes, Ind., would provide the lowest possible transit times to customers. The average leadtime to customers would be 2. 31 days, and the average distance to customers would be 819 miles, according to Chicago Consulting’s analysis.

For a network of three warehouses, placing them in Boyertown, Pa.; Jackson, Tenn.; and Porterville, Calif., would produce the shortest possible average transit time—just 1. 33 days. To achieve that, a company would have to ship 33 percent of its goods from Boyertown, 44 percent from Jackson, and 23 percent from Porterville.

The firm cautions that its Top 10 list consists of generic networks and that these networks are not intended as recommendations for any particular company.

To see the entire list, go to Chicago Consulting’s website, www.chicago-consulting.com. ;

Space: The final supply chain frontier

Think you have problems managing supply chains here on Earth?
Try doing it in outer space. As an infographic developed by Florida
Tech University Online’s supply chain master’s program shows, safe-
ly transporting people, technology, and equipment between earth
and space is a uniquely complex and costly mission. Supply chain
management plays an important role in space
travel and the future of space commerce,
according to the infographic, titled “The Space
Supply Chain Today and Tomorrow.”
The “by the numbers” graphic lists interesting
facts about what it calls “Mankind’s biggest sup-
ply chain”: the number of suppliers in NASA’s
supply chain ( 1,500), the number of satellite and
rocket launches in 2011 (84), and the payload cost per pound to enter
orbit ($6,000 for low-earth orbit; $30,000 for geosynchronous trans-
fer orbit). Cost to ship one gallon of water to the moon: $690,000.

Florida Tech’s supply chain gurus say the next step in space supply chain design will be setting up bases and distribution networks on asteroids and the moon. They should know: The university’s original mission was to provide advanced education for scientists, engineers, and technicians at what is now NASA’s John F. Kennedy Space Center.