Trade & Logistics: Understanding the Industry

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1 Trade & Logistics: Understanding the Industry 1

2 Key Initiative of Governor Scott Florida has a once in a lifetime opportunity, with the expansion of the Panama Canal, to transform the state s economy to become a global hub of trade, logistics and export oriented manufacturing activities

3 Growing Global Trade $110 Billion $55 Billion $25 Billion Value of Florida-Origin Exports Sources: U.S. Census Bureau and Florida Chamber Foundation??? 3

4 Florida Is A Crossroads Of Trade Source: Enterprise Florida, 2014

5 The Evolution of Transportation Moving vehicles From Individual modes and facilities Individual jurisdictions Physical capacity Travel time and vehicle operating costs Reacting to economic growth and community and environmental impacts To Moving people and freight Complete end-to-end trip Economic regions and trade corridors Operational performance, flexibility, and reliability Business logistics and economic competitiveness Proactive planning for economic, community and environmental goals

6 Definition of Logistics Oxford Dictionary defines it as The detailed coordination of a complex operation involving many people, facilities, or supplies. OR The commercial activity of transporting goods to customers. According to the Council of Logistics Management, logistics is the... process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements. At its most basic level The line between disorder and order lies in logistics. Sun Tzu Logistics = Supply + Materials management + Distribution Amateurs discuss tactics Professionals discuss logistics. General Robert Barrow, Commandant of the Marine Corps,

7 Achieve maximum customer service level Ensure high product quality Achieve minimum (possible) cost Be flexible during constant market changes The Scope of Logistics in Business Logistics management = the right product, in the right quantity, at the right place, at the right time, with the right cost. 7 Physical Supply Materials Management Inbound Logistics Physical Distribution Outbound Logistics

8 The Supply Chain The supply chain encompasses all activities associated with the flow and transformation of goods from the raw materials stage to the end user (along with the associated information flow). Supply Chain Management is the integration of these activities, through improved supply chain relationships, to achieve a sustainable competitive advantage Robert B. Hanfield & Ernest L. Nichols Jr., Introduction to Supply Chain Management 8

9 Supply & Distribution Logistics The physical supply channel refers to the time and space gap between a firm s immediate material sources and its processing points. The physical distribution channel refers to the time and space gap between a firm s processing points and its customers. 9

10 Logistics Network Design Planning issues include aspects related to the physical flow of the product through a company s operation, such as: Manufacturing location from which a product should be sourced Inventory that should be held Selection of the proper distribution network Number and location of depots Use of stockless depots Final product delivery Principle 2 of Supply Chain Management: Customize the Logistics Network The need to develop supply chain approaches that recognize geographical and environmental conditions, consider the market factors, and are responsive to the needs of the customer

11 Why is it important for Florida s transportation professionals to know more about Trade & Logistics? 11

12 Freight Impacts Economic Vitality and Competitiveness The Environment There are both positive and negative impacts of freight in each of these areas. Safety and Quality of Life National Security The challenge is to plan for both in a balancing act to enable the most positive outcome for all stakeholders.

13 Broad Trends Affecting Freight Transportation Anticipated Growth in Freight Traffic Strong in all modes tons transported doubling by 2035 capacity has not increased at near the same pace, and in many cases has not changed at all since the 1970 s rapid growth in containerized traffic largest mode increase is truck traffic Shift from Manufacturing to Service Economy More small shipments of light, high-value items increasing demand for reliable, flexible, cost-effective, timely, and door-to-door freight services emergence of e-commerce and e-business requiring faster and more efficient flow of information Shift from National to Global Markets Trade not constrained by jurisdictional boundaries businesses everywhere are conducting business on a global scale managing international supply chains and distribution networks Balance Between Freight Efficiency and Security Multiple law enforcement agencies involved new technology (ITS) for tracking and monitoring carriers and goods greater emphasis on international shipments impacts on cost and delay at multiple levels

14 Issues & Challenges to Freight Transportation Infrastructure Challenges Physical Condition of the System Intermodal Connectors Orphan status of connectors Geometry problems Pavement conditions Weight, height, depth limitations and / or restrictions Limited access lack of space and / or facilities Dated facilities at border crossings Age of the infrastructure in general just not up to par for today s transport Operational Challenges Performance of the System Congestion Available truck routes for bypass Chokepoints on rail system sharing of right of way with passenger service passenger trains take priority over freight Longer trains delays at crossings Port access freight and passenger service conflicts and congestion / delay getting in or out of the port System reliability the degree of certainty and predictability in travel times on the system Institutional and Policy Challenges Planning and Management of the System Balancing freight efficiency and security Balancing freight and passenger mobility needs Balancing economic competitiveness and environmental / community needs

15 Freight Planning Perspectives Private Sector (Shippers, Carriers) Global National Regional Local Public Sector (States, MPOs, Local Agencies)

16 Department Mission The Department will provide a safe transportation system that ensures the mobility of people and goods, enhances economic prosperity and preserves the quality of our environment and communities. 16

17 Florida as a National Leader Brookings Institute Top 10 State and Metropolitan Innovations to Watch Consistently Ranked #1 and #2 Infrastructure by the National Chamber Foundation Named #1 Tax Climate in the Southeast for Business by Tax Foundation Ranked #1 State for Aviation Manufacturing Attractiveness by Price Waterhouse Coopers #1 State for Innovation by Fast Company Found to be 3 rd Largest Cluster of Logistics and Distribution Establishments in the U.S. by EFI

18 Florida Freight Network 18

19 Florida s Freight System 19

20 Trade & Logistics Academy 20

21 Goals Advance the Department s mission to provide a safe transportation system and ensure the mobility of people and goods Broaden employee understanding of logistics Representatives from around the state Representatives from a variety of disciplines (traffic operations, design, maintenance, work program and planning) 21

22 Started in 2013 Offered the following: Level I (8 sessions) Level II (2 sessions) Executive (1 session) District (1 session) Our History 22

23 Traffic Operations Aviation Transit ROW Public Information Seaports Attendee Cross-section Policy Data/Analytics Construction Rail Design Planning Engineering Maintenance Environmental Finance Freight Intermodal Construction Design Engineering Environmental Finance Freight Intermodal Maintenance Planning Public Information ROW Traffic Operations Transit Aviation Seaports Rail Policy Data/Analytics 23

24 Three key components: #1 Class Classroom instruction: Supply Chain Management Transportation International In partnership with University of North Florida 24

25 Three key components: #2 Industry Presentations by industry experts 25

26 Three key components: #3 Site Visits Site visits to area trade and logistics providers 26

27 Transportation Module Emphasizing the operational, service, and financial characteristics of the various modes and types of transportation 27

28 Supply Chain Module Detailing the implementation and control of efficient and effective flow of goods, services, and related information. 28

29 Results Students have an understanding of: The relationship and cost trade-offs occurring between transportation and other logistics functions How the operating and service characteristics of each mode affect cost, performance, and the products moved The functions comprising logistics, how these functions interact, and how logistics can be managed as a system to reduce total cost How logistics affects customer service, corporate performance, and competitive advantage. 29

30 Statistics 8% 5% Level 1 (193 students) 16% Level 2 (43 students) Executive (23 students) 71% District (13 students) 30

31 What is the future of Trade & Logistics Academy? 31

32 Training options FDOT Trade & Logistics Academy has an open nomination process Each candidate must be present for the entire academy Support includes funding travel/accommodations as well as a registration fee of $250-$350 Selection is based on your current Trade and Logistics responsibilities and how the Academy experience will apply to your day to day work 32

33 Training options Talking Freight Seminars The Federal Highway Administration's (FHWA's) Office of Freight Management and Operations Seminars are held via web conference on a monthly basis throughout the year and are open at no cost to all interested parties _freight/index.htm 33

34 Training options Massachusetts Institute of Technology Supply Chain Technology and Systems MITx (Starts on January 25, 2017, free) Supply Chain Analytics MITx (Starts on March 15, 2017, free) Supply Chain Design MITx (Starts on April 26, 2017, free) Supply Chain Dynamics MITx (Starts on July 26, 2017, free) 34

35 Training options Georgia Institute of Technology Supply Chain & Logistics Institute offers FREE one-hour webinars to learn more about topics covered as part of Professional Education series 35

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