a ale SHAPING THE FUTURE OF LOGISTICS by Jason McDowell What Will Smart Cities Mean For the Supply Chain? ade ago, we were sill getting used to traffic m To help add to the idea that our mobile phone transportation concerns, a smart city would have infrastructure and smart ce handle self-driving and connected 0 it sno sueprse thatthe US. With Ci sntined failure to pa of Transportation (USDOT) and Google’s any kind of m ucture fund Sidewalk Labs have put fo USDOT is seck ich will ‘urban ves ranging from housing to pollution a) 3PLCentral Bi aenamantteien |[wrecus] TRENDS SHAPING THE FUTURE OF LOGICS transportation budget. “Smart cities are not adequate against chronic under- investment,” he said in a press call, “but ‘what we're introducing isthe possibilty of technology innovation to solve some of, ‘our mobility challenges differently. This conld be a way to flatten the curve of the infrastructure deficit litle bit” ‘Where will the smart city be located? USDOT has ists to seven cities: Austin, Columbus, Ohio; Denver; Kansas City, ‘Mo. Fittsburgh; Portland, Ore. and San Francisco. The finalists are currently developing proposals to introduce smart technologies into their cities, and the winner will receive $50 million toward mplementing it plan rowed down the Asmart city environment would have a drastic impact on the supply chai Driverles vehicles would open up a new world of transportation, logistics, and technology solutions, and the impact ofthe commercial driver shortage would likely be far less dire in these ateas. Automated cars and trucks would also improve delivery efficieney and lower environmental mpact, according toa DHL report Also, a smart city presents an optimal location to finally begin public urban use of commercial drones lor delivery. ‘This depends heaviy on the Federal Aviation Administration releas- ing the long-avaited commercial drone regulations, which may not hap- pen soon considering that the deadline for Minimum Wage Hike May Have Maximum Supply Chain Impact MINIMUM WAGE CHANGES, 2015 TO 2016 [A Si/hour ineresse in minimum wage yy Minimum wage fs same a federal Amid all the issues being debated and discussed in USS. polities. the country’s current $7.25 federal hourly minim ‘wage has been a hot topic. Many argue that minimum wage has failed to keep ‘pace with inflation, and needs substantial increase to restore working class America’s buying power and economic stability. ‘The most common number suggested in recent months for a new federal mini- ‘mum wage has been $15 per hour. In fact, some cities and states have already imple- ‘mented these wages on theit own. Such a lange hike has many stakeholders across the supply chain concemed about how those increases would affect operational costs Fora warehouse employing 500 people, the annul cost ofa wage increase amentnts to $I million annually for each dollar raised, according to anew repot rom real estate brokerage im CBRE (see chart). With e-commerce sales continually rising, and online retailers looking to open warehouses and distribution centers near 'metro areas to meet the fast denery demands of consumers, companies that refuse to expand in these areas will have trouble remaining competitive. Yt these metro areas (24 Inbound Logistics Ape 2016 (BS) 3PLCentral ‘or 500 jobs increases labor spend by 1 million annually. 3B. ‘those regulations gets kicked down the toad about as often as infrastructure funding Dills do, Still, developing a connected ity lays the groundwork for future drone use Its difficult to predict what benefits and technologies the first smart city will bring until the finalists release their indi- vidual plans. But whatever surprises are in store, there can be litle doubt that the jmpact on the supply chain will ‘be substantial min. wage ($7.25/hour) ___ No change from 2015, but min. ‘wage is higher than $7.25/nour gy Min. wage change from 2015 is fess than 50 cents/hour || Min. wage change from 2015 1s ‘reater than 50 cents/hour my Min. wage change rom 2015 is ‘$t/hour or more {pj States contempiatingruture Increases in minimum wage ‘SOURCE Navona! Conference State Legs, eh. 2016 are the same locations where support fora ‘minimum wage incre is fiecest. Proponents of $15 per hour minimum wage argue that cots such as these will be offset because consumers will have more to spend, patting money back into retail- crs pockets. The feceral mmimum wage hhas lost 8.1 percent ofits purchasing power singe 1968, and a minimum wage properly adinsted for inflation should rest at about The Most Powerful $12 per hour, according to Pew Research, So, in theory, consumers who make more ‘ill eventually spend more. However, labor accounts for 20 percent of supply chain costs, according to the CBRE report, so even if consumers do eventually spend enough to nullify increased labor expenses, companies must still be prepared for an initial impact that will negatively affect the bottom line. id Most Affordable WMS in The CloudySupply Chain Disruptors: The Storm After The Calm A quiet storm has been brewing beneath the relative calm that the trans- portation and logistics sector enjoyed in 2015, according to a report by profes- sional services fm Fw. Customers) changing needs have made shipper supply chains more complex, revealing five key trends that are disupting the sta- tus quo: "Supply chain fracturing, lobal supply chains increasingly feature a mix of offshore, nearshore, and onshore locations, - reducing delivery ime to customers from. cays to hours 2. Rising recognition that be a strategy, not a commodity. As spers learn that logistics can yield a considerable competitive advantage, they 1no longer consider shipping a tactical decision influenced solely by cost, but rather a strategic consideration based on factors such as customer expectations, sales volume, and prodiet mix. 3. Increased need for enhanced services to high-margin product shi Shippers selling valuable and sensitive products, such as specialty pharmaceuticals and fragile electronic equipment, require their transportation partners to provide exceptional handling, security, reliability, and tracking, 4, Large-scale events that cause shippers to reevaluate their pro- curement tactics. ‘The frequency and ‘magnitude of disruptive events —higher peaks in demand, “10-year” storms and other natural disasters, labor stkes, and geopolitical uncertainties —eause shippers to reevaluate their procurement tactics and the efficacy of their logistics networks (a) 3PLCentral High Fiber Diet 12012, Google launched Gooale Fiber-a project to bulld a ‘ber optic communications infrastructure. ince then, the company has rapidly expanded the project across America, with many cities either currently or soon to be online (see list, right). ‘With Google Fibers super-tast Internet connection of up to 000 ‘megabits per second, a bigger pipe ‘means less compression. “For the first time, !don'ttink about the pipe,” says Google Fiber customer Marcelo Vergaraof Propaganda 3, a developer of in‘eractive software, ‘games, websites, mobile apps, and supporting technologies, located in Kansas City. ‘Given the growing importance of e-commerce operations, supply chain Software-as-Service, and the impact of technology on transportation and logistics ‘operations, having access to near light-speed web tone can drive efficiencies. When making your next site Selection decision, it might be worth evaluating Google Fiber cities for your logistics, manufacturing, and service operations to continually drive supply chain speed. 5. E-commerce growth and tt inroads it Is making in shipment complexity within the business-to- ‘business arena. The rise in e-commerce is resulting in greater shipment complex- ity, and more demanding transparency and tracking requirement. ‘These trends are creating new demand patterns as shippets want logistics patt- ner that ean operate aeross diverse supply chains and distribution networks and that The Most Powerful and Most CURRENT FIBER CITIES: m Atlanta, GA Austin, 1. ‘= Kansas City, MO 1m Provo, UT UPCOMING FIBER CITIES: Charlotte, NC Huntsville, AL Nastwll, TN Raleigh-Durham, NC ‘salt Lake City, UT ‘San Antonio, TX ‘San Francisco, CA POTENTIAL FIBER CITIES: (Chicago. tL Irvine, CA Jacksonvill, FL. Los Angeles, CA Louisville, KY ‘Oklahoma City, OK Phoenix, AZ Portiand, OR ‘San Diego, CA. ‘San Jose, CA Tampa, FL, tically inclined —as comfortable im the C-suite asin a buyer’ office, accord ing to PwC. Shippers particularly seek carriers that can accommodate spikes in volume and maintain high performance levels during disruptions. And they are look- ing for business-enhancing opportunities, such as 30 prmting and digitally enabled solutions, that provide visibility into multi- ple vendoss, greater price transparency, and aconsumerlike userexperience, ‘Apil2015= Inbound Logistics 2 Nitec rl CE Sila tt Cots)Any Freight Invoice, From Any Provider, Anywhere in the World. et ee CM ee me oy ORG ORL ES a ea Satu moa SO eee aC Me Mn a Mee mercy ‘Vision Globalis a leading Global Freight Audit, Payment and Logistics Management Services provider. 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