Southern California Logistics Summit. 2016

April 28 2016

Pomona California –

Southern California Logistics and Supply Chain SummitThanks to our local NPR radio station, KVCR, we  were informed and later attended the 2016 Southern California Logistics & Supply Chain Summit.

South West Logistics is about educating, not only ourselves on new Logistics trends, but also brining new hot topics to you as well.   This was our first visit to the Summit and we were really unsure what to expect.

Highlights: 
Juan Garcia from Amazon Fulfillment –  Juan spoke on Amazons incredible employee programs.  They introduced a program that helps employees leave the company.   The program is designed to help employees, who are looking for growth, education to actually move on.  They even have an bonus incentive program.  Amazon will pay you up to $5,000.00 to leave the company.  1.4% of employees have actually taken pay to leave program.  The point of this program, is Amazons encouragement for personal growth.   Amazon also began to bring school to the office.  Amazon offers classrooms and courses on the job site.  Employees are encouraged to learn and are presented in class rooms with glass walls, for other employees to see, Yes, this is happening.

Pulse f the Port:
Dr Nole Hacebaga, Chris Shimala, Lena Kent of BNSF, and BJ Patterson  all spoke on matters concerning the Long Beach Port.
Coming from perhaps the worst year in port congestion (2015), Dr. Noel  spoke on how different Logistics companies came together and started sharing Trailer Chassis.  The Chassis were shared by everyone to help get the freight out of the ports.  It has been a big success.   Cargo ships have more than doubled in size in just the past 5 years!  This has made dock logistics even more congested, but lowered the cost of shipping a container from China from $2,100 just a few years ago, down to $700 or so. This resulted in many shipping companies to look at forming a collation and control the shipping prices across the seas. An OPEC for cargo if you will.

Chris Shimala spoke on Port Logistic infrastructure.  Annually, the state of California collects 2 Billion dollars in taxes generated from the Logistics industry.  Only 20% of the tax money collected goes back into infrastructure improvements.   A whopping 80% goes back into the General Fund and to the controversial California High Speed Rail project.   This lead into the next speaker

Lena Kent from BNSF.  To say that this board was frustrated with California policy towards the logistic industry, was an understatement.  Lena let if fly with her clearly unhappy tone.  “Its hard to get permits in California  We spent 100 Million dollars over 14 years for a net loss”.  BNSF spent 14 years and 100 million dollars building and proposing a Port Infrastructure plan, that according to her, would have helped Long Beach with the massive flow of products into the ports, and help keep Long Beach the go to port for Logistics on the West Coast.  A judge denied their case and it was over.   With Crude oil down and Coal down as well,  BNSF is struggling and this California setback didn’t help much either.

BJ Patterson shared his displeasure by stating “California is not the best state for doing business”.   Many on the panel felt as though the California bureaucracy was dead set against helping the Logistics industry in any way.    He brought up an Executive order from Governor Jerry Brown.  The mandate stated that by 2030, 100,000 Commercial trucks are to be emissions free, or Zero Emission vehicles. 25% of current vehicles are to have an increase of 25% fuel efficiency by 2030 and.. We must increase California’s Competitiveness as well.   Its very tall order that the logistics industry must adhere to by Executive order.   BJ did however end his speech on how truly excellent the Logistics industry is.  This is one of the very few industries left  where a blue collar person can support their family into middle class standards.

Great New incentives rolling out:

Southern California gas is rolling out its Natural Gas Vehicle Truck load program.   This program focuses on the introduction of Natural Gas vehicles to Diesel fleets.  There is a lot more information on this program.  Visit socalgas.com or contact us at info@southwestlogisticsinc.com. We will be happy to send you over more information.

Summary:  In short, the Logistics industry is strong.   There is a tremendous struggle with California’s ever tightening restrictions on business, making it very hard to grow, but grow we have.  Companies like Amazon, E-Bay have reversed the logistics model.    Giant warehouses  and many different types of vehicles all bringing your products to you.  All requiring some sort of logistics solution.   Assessment?  The logistics future is very bright.