Logistics: Constant State Of Change

Massive disruptions to global supply chains during the pandemic have forced the logistics sector to rapidly adapt, with manufacturers moving their supplier networks closer to home.

By the BF Staff
From the September/October 2021 Issue

The Council of Supply Chain Management Professionals’ (CSCMP) Annual State of Logistics Report®, titled “Change of Plans,” presented by Penske Logistics and authored by Kearney, was released on June 24, and “finds supply chains continuing to reset from the pandemic with resilient logisticians adapting, planning and shifting to meet current and future demands.”

“This story of the year 2020 is one of adaptation under the most severe conditions in memory,” says Michael Zimmerman, partner with A.T. Kearney and the report’s author. “Systems strained and sometimes broke.”

The national economy shrank by 3.5 percent, to $20.94 trillion, while logistics shrank 4 percent, to $1.56 trillion, or 7.4 percent of the GDP.

In early 2020 the pandemic caused global supply chains to suddenly stop, and as they started back up, they often faced capacity shortages, price increases and bottlenecks. The report notes, “Change is inevitable in supply chains, and adjustments are ongoing as manufacturers shift their sources and consumers shift their spending habits.”

The report described the “K-shaped” recovery of 2021, explaining that hospitality, restaurants and airlines struggled, while grocery retail, home improvement and e-commerce prospered. E-commerce purchases (including in-store pick-ups) grew by 33 percent to $792 billion, representing 14 percent of all retail sales.

According to the report, Transportation costs rose by 0.8 percent in 2020, driven by a 24.3 percent increase in the parcel and last-mile segment, complements of e-commerce and home delivery. Air freight costs increased by 9 percent, motor decreased 0.6 percent, water was down 28.6 percent, rail was down 11 percent overall, and pipeline was up 1.7 percent.

Disruptions, including the pandemic and natural disasters, have caused supply chains to continuously adapt, and it looks like they will have to continue doing so. Take a look at some areas with logistical advantages that may help make this an easier feat in the future.

CAROLINA CONNECTOR INTERMODAL TERMINAL AND NASH COUNTY, NC

Nash County, NC is excited to announce the opening of the Carolina Connector or CCX, a new, high-tech $160 million intermodal terminal operated by CSX Intermodal Terminals, Inc., slated to begin operations in the fourth quarter 2021.

Nash County
Carolina Connector (CCX) is a high-tech, $160 million intermodal terminal that will connect Nash County and the region to both domestic and international markets. (Source: Nash County)

The intermodal terminal provides a vital link in the supply chain, connecting rail with trucks, allowing consumer goods to efficiently and reliably reach Nash County, the surrounding region, North Carolina and nationwide. The intermodal terminal will also attract manufacturers and distributors who want to be close to the facility and I-95—located in Nash County—to help reduce their logistics costs.

“The intermodal facility will positively impact eastern North Carolina and our state as a whole,” said Governor Roy Cooper. “CCX will not only bring good paying jobs to our rural areas, but also connect the region to both domestic and international markets.”

More than five million people live within 120 miles of the new terminal and Nash County. With the new facility, I-95, regional airport, three seaports and the Raleigh-Durham International Airport, site selection consultants realize Nash County is an excellent logistics location for national and international companies.

“A recent announcement of another international food processing company locating to Nash County continues to display the importance of the terminal and Nash County’s strategic location between New York City and Miami on the Eastern Seaboard,” said Andy Hagy, Nash County Economic Development Director. The Canadian food processing company is locating in an existing 190,000-square-foot building. Additionally, a 62,500-square-foot county-owned building is also committed to a new company locating to the county. “With the present activity and future business growth ahead of us, the county is inviting all speculative builders and developers to invest in Nash County now,” said Hagy.

supply chain
CSX Carolina Connector Intermodal Terminal Rendering. (Source: Nash County)

The terminal will offer many cost and logistics advantages to both new and existing companies, but, according to a national site selection consultant, it also provides substantial advantages to Nash County. Cost benefit studies show significant job and economic development growth in the community and region where intermodal terminals are located.

“Because of the county’s location between I-95 and the Research Triangle region, national site selection consultants have identified Nash County as an ideal location to accommodate the growth of e-commerce, cold storage and logistics companies, especially ones in the life science and food-beverage industries,” said Hagy.

In addition to being a state-of-the-art facility, CCX has all of the important elements of a successful intermodal terminal, which include access to regional market commodities, close proximity to interstate connections, shovel-ready industrial sites and Foreign Trade Zone custom duty savings capabilities. With an annual lift capacity of 110,000 containers, the terminal provides opportunities to convert freight from the highway to rail, minimizing the environmental impact and offering vital scalable capacity to shippers.

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