U.S. population shifts will affect logistics decisions
Maria Weiskott -- Casual Living, May 24, 2012
Significant U.S. population shifts in the Southeast and Southwest will impact transportation and logistics planners for decades to come as they accommodate those fast-growing regions, attendees at Sandow Media's second annual Logistics Conference here this month were told.
Bill Lindler, president and CEO of United Steel Storage, said the population of most southeastern and southwestern states, as well as Texas, have grown rapidly since 1990, while the Northeast, Midwest and Great Plains have lost population.
"The whole middle of the U.S. is a dead zone. The population is not growing," Lindler told the audience. "You have to recognize this when you're setting up your distribution network."
Speaking to more than 130 logistics professionals, Lindler said these fast-growing regions simply require more household goods to meet the needs of the residents and more raw materials and industrial goods to meet the needs of companies located there.
Atlanta, Lindler said, is a great example of this population shift. A dozen automobile, agricultural equipment and aircraft manufacturers have factories - most of which have opened in the last 20 years - within 150 miles of the Georgia capital.
"Atlanta is now Detroit," he said.
In a presentation entitled "The Changing Logistics Landscape," Lindler cited three other events that will significantly affect logistics in the coming years:
• The widening of the Panama Canal, now scheduled for completion in October 2014.
• The movement of manufacturing out of China.
• The use of alternative fuels - particularly compressed natural gas - to run transportation fleets.
He said the wider Panama Canal will significantly reduce transit time from Asia to ports on the East Coast and Gulf of Mexico, and reduce congestion at West Coast ports such as Long Beach and Los Angeles, where much of the nation's furniture now arrives.
It will also boost housing starts and employment in East Coast and Gulf port cities, which must upgrade their ports to accommodate the larger cargo ships that will be able to pass through the canal, he said.
Lindler referred to the movement of manufacturing out of China as "re-shoring," and said he believes it will stick because of the increasing cost of freight, the U.S. consumer's increasing demand for immediate gratification, and potential disruptions to the supply chain.
"In the early '90s, I said China was a flash in the pan, and nobody believed me," Lindler said. "But it is now more cost-effective to build some products here."
He also said he envisions compressed natural gas (CNG) as the fuel of choice for truck fleets because there is an abundant supply at a much lower price that gasoline or diesel fuel.
"This is not about saving the Earth. The Earth will save itself," Lindler said. "This is about saving money."
He said converting a typical fleet of 30 trucks to CNG would pay for itself in two years or less, and also will result in less truck maintenance and less harmful fumes spewed into the environment.