Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
Jim Oberstar's run ended 18 months ago. After 36 years of representing the Land of 10,000 Lakes on Capitol Hill, the Minnesota Democrat went down to defeat by Republican Chip Cravaack, a political novice, in the November 2010 mid-term elections.
His departure was lamented by colleagues on both side of the political aisle and by those with an interest in transportation policy. Widely recognized as one of the most transportation-savvy people to ever hold a seat in Congress, Oberstar served on the House Transportation and Infrastructure Committee for his entire tenure, including a stint as committee chairman from 2007 to 2011.
Earlier this month, Oberstar returned to Washington as a private citizen to address the Legislative Policy Forum hosted by the National Industrial Transportation League. During his 40-plus minute, largely off-the-cuff keynote address, the former congressman demonstrated an extraordinary grasp of the nation's transportation needs and challenges as well as their implications for America's economic future.
As an example of the problems we face, he pointed to the notorious rail bottleneck in Chicago. "Something is wrong," Oberstar said, "when it takes 36 hours and costs $300 to move a container from the West Coast to the west side of Chicago, another $300 and another 30 hours to move it to the east side of Chicago, and then $200 and 24 hours to move it from Chicago to the East Coast."
Something is indeed wrong, and it is not a metropolitan, or even a regional, problem. It is a national problem. A recent study estimated that as much as 25 percent of all rail freight in the United States moves through Chicago, and six of the country's seven largest railroads run through the city. The delays not only cause headaches, but also hinder the rail industry's ability to provide the kind of service its customers need to compete in a global economy.
As for why the Windy City has turned into the Chokepoint City, there are many reasons. Part of it's politics. Part of it's money—or as The New York Times recently put it, "a nation's general disinclination to improve its roads, bridges, and rails." And part of it is simply the result of a track system that's grown up since the 19th century with little coordination among the railroads and the city.
Will the situation ever change? Well, there is hope. In 2003, a consortium of private companies and local, state, and federal agencies launched a $3 billion partnership known as the CREATE (Chicago Region Environmental and Transportation Efficiency) Program. Its aim is to bring order to the chaos that is Chicago's rail system.
A daunting task, no doubt, but not impossible. Just weeks before Oberstar's address in Washington, folks in Southern California celebrated the 10th anniversary of the opening of the Alameda Freight Corridor, a mega-public works project of the 1990s that did for the Los Angeles area what Chicago so badly needs.
The Alameda Corridor consists of a series of bridges, underpasses, and overpasses designed to separate freight trains from street traffic and passenger trains. The project's centerpiece is the Mid-Corridor Trench, a below-ground rail line for freight trains that runs for 10 miles between Route 91 in Carson and 25th Street in Los Angeles.
Prior to the project's completion, trains on the four low-speed branch lines that were eventually consolidated onto the corridor had to cross more than 200 at-grade crossings and traveled at an average speed of 10 to 15 mph. It was common for motorists to wait 20 to 30 minutes for a 6,000-foot-long train to pass. The Alameda Corridor eliminated conflicts at those 200 crossings. Trains now zip through the corridor at an average speed of 40 mph.
Here's hoping that Chicago can replicate Southern California's success—and put its days as the Chokepoint City firmly behind it.
Shippers today are praising an 11th-hour contract agreement that has averted the threat of a strike by dockworkers at East and Gulf coast ports that could have frozen container imports and exports as soon as January 16.
The agreement came late last night between the International Longshoremen’s Association (ILA) representing some 45,000 workers and the United States Maritime Alliance (USMX) that includes the operators of port facilities up and down the coast.
Details of the new agreement on those issues have not yet been made public, but in the meantime, retailers and manufacturers are heaving sighs of relief that trade flows will continue.
“Providing certainty with a new contract and avoiding further disruptions is paramount to ensure retail goods arrive in a timely manner for consumers. The agreement will also pave the way for much-needed modernization efforts, which are essential for future growth at these ports and the overall resiliency of our nation’s supply chain,” Gold said.
The next step in the process is for both sides to ratify the tentative agreement, so negotiators have agreed to keep those details private in the meantime, according to identical statements released by the ILA and the USMX. In their joint statement, the groups called the six-year deal a “win-win,” saying: “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coasts ports – making them safer and more efficient, and creating the capacity they need to keep our supply chains strong. This is a win-win agreement that creates ILA jobs, supports American consumers and businesses, and keeps the American economy the key hub of the global marketplace.”
The breakthrough hints at broader supply chain trends, which will focus on the tension between operational efficiency and workforce job protection, not just at ports but across other sectors as well, according to a statement from Judah Levine, head of research at Freightos, a freight booking and payment platform. Port automation was the major sticking point leading up to this agreement, as the USMX pushed for technologies to make ports more efficient, while the ILA opposed automation or semi-automation that could threaten jobs.
"This is a six-year détente in the tech-versus-labor tug-of-war at U.S. ports," Levine said. “Automation remains a lightning rod—and likely one we’ll see in other industries—but this deal suggests a cautious path forward."
Editor's note: This story was revised on January 9 to include additional input from the ILA, USMX, and Freightos.
Logistics industry growth slowed in December due to a seasonal wind-down of inventory and following one of the busiest holiday shopping seasons on record, according to the latest Logistics Managers’ Index (LMI) report, released this week.
The monthly LMI was 57.3 in December, down more than a percentage point from November’s reading of 58.4. Despite the slowdown, economic activity across the industry continued to expand, as an LMI reading above 50 indicates growth and a reading below 50 indicates contraction.
The LMI researchers said the monthly conditions were largely due to seasonal drawdowns in inventory levels—and the associated costs of holding them—at the retail level. The LMI’s Inventory Levels index registered 50, falling from 56.1 in November. That reduction also affected warehousing capacity, which slowed but remained in expansion mode: The LMI’s warehousing capacity index fell 7 points to a reading of 61.6.
December’s results reflect a continued trend toward more typical industry growth patterns following recent years of volatility—and they point to a successful peak holiday season as well.
“Retailers were clearly correct in their bet to stock [up] on goods ahead of the holiday season,” the LMI researchers wrote in their monthly report. “Holiday sales from November until Christmas Eve were up 3.8% year-over-year according to Mastercard. This was largely driven by a 6.7% increase in e-commerce sales, although in-person spending was up 2.9% as well.”
And those results came during a compressed peak shopping cycle.
“The increase in spending came despite the shorter holiday season due to the late Thanksgiving,” the researchers also wrote, citing National Retail Federation (NRF) estimates that U.S. shoppers spent just short of a trillion dollars in November and December, making it the busiest holiday season of all time.
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
The overall national industrial real estate vacancy rate edged higher in the fourth quarter, although it still remains well below pre-pandemic levels, according to an analysis by Cushman & Wakefield.
Vacancy rates shrunk during the pandemic to historically low levels as e-commerce sales—and demand for warehouse space—boomed in response to massive numbers of people working and living from home. That frantic pace is now cooling off but real estate demand remains elevated from a long-term perspective.
“We've witnessed an uptick among firms looking to lease larger buildings to support their omnichannel fulfillment strategies and maintain inventory for their e-commerce, wholesale, and retail stock. This trend is not just about space, but about efficiency and customer satisfaction,” Jason Tolliver, President, Logistics & Industrial Services, said in a release. “Meanwhile, we're also seeing a flurry of activity to support forward-deployed stock models, a strategy that keeps products closer to the market they serve and where customers order them, promising quicker deliveries and happier customers.“
The latest figures show that industrial vacancy is likely nearing its peak for this cooling cycle in the coming quarters, Cushman & Wakefield analysts said.
Compared to the third quarter, the vacancy rate climbed 20 basis points to 6.7%, but that level was still 30 basis points below the 10-year, pre-pandemic average. Likewise, overall net absorption in the fourth quarter—a term for the amount of newly developed property leased by clients—measured 36.8 million square feet, up from the 33.3 million square feet recorded in the third quarter, but down 20% on a year-over-year basis.
In step with those statistics, real estate developers slowed their plans to erect more buildings. New construction deliveries continued to decelerate for the second straight quarter. Just 85.3 million square feet of new industrial product was completed in the fourth quarter, down 8% quarter-over-quarter and 48% versus one year ago.
Likewise, only four geographic markets saw more than 20 million square feet of completions year-to-date, compared to 10 markets in 2023. Meanwhile, as construction starts remained tempered overall, the under-development pipeline has continued to thin out, dropping by 36% annually to its lowest level (290.5 million square feet) since the third quarter of 2018.
Despite the dip in demand last quarter, the market for industrial space remains relatively healthy, Cushman & Wakefield said.
“After a year of hesitancy, logistics is entering a new, sustained growth phase,” Tolliver said. “Corporate capital is being deployed to optimize supply chains, diversify networks, and minimize potential risks. What's particularly encouraging is the proactive approach of retailers, wholesalers, and 3PLs, who are not just reacting to the market, but shaping it. 2025 will be a year characterized by this bias for action.”
Under terms of the deal, Sick and Endress+Hauser will each hold 50% of a joint venture called "Endress+Hauser SICK GmbH+Co. KG," which will strengthen the development and production of analyzer and gas flow meter technologies. According to Sick, its gas flow meters make it possible to switch to low-emission and non-fossil energy sources, for example, and the process analyzers allow reliable monitoring of emissions.
As part of the partnership, the product solutions manufactured together will now be marketed by Endress+Hauser, allowing customers to use a broader product portfolio distributed from a single source via that company’s global sales centers.
Under terms of the contract between the two companies—which was signed in the summer of 2024— around 800 Sick employees located in 42 countries will transfer to Endress+Hauser, including workers in the global sales and service units of Sick’s “Cleaner Industries” division.
“This partnership is a perfect match,” Peter Selders, CEO of the Endress+Hauser Group, said in a release. “It creates new opportunities for growth and development, particularly in the sustainable transformation of the process industry. By joining forces, we offer added value to our customers. Our combined efforts will make us faster and ultimately more successful than if we acted alone. In this case, one and one equals more than two.”
According to Sick, the move means that its current customers will continue to find familiar Sick contacts available at Endress+Hauser for consulting, sales, and service of process automation solutions. The company says this approach allows it to focus on its core business of factory and logistics automation to meet global demand for automation and digitalization.
Sick says its core business has always been in factory and logistics automation, which accounts for more than 80% of sales, and this area remains unaffected by the new joint venture. In Sick’s view, automation is crucial for industrial companies to secure their productivity despite limited resources. And Sick’s sensor solutions are a critical part of industrial automation, which increases productivity through artificial intelligence and the digital networking of production and supply chains.
He replaces Loren Swakow, the company’s president for the past eight years, who built a reputation for providing innovative and high-performance material handling solutions, Noblelift North America said.
Pedriana had previously served as chief marketing officer at Big Joe Forklifts, where he led the development of products like the Joey series of access vehicles and their cobot pallet truck concept.
According to the company, Noblelift North America sells its material handling equipment in more than 100 countries, including a catalog of products such as electric pallet trucks, sit-down forklifts, rough terrain forklifts, narrow aisle forklifts, walkie-stackers, order pickers, electric pallet trucks, scissor lifts, tuggers/tow tractors, scrubbers, sweepers, automated guided vehicles (AGV’s), lift tables, and manual pallet jacks.
"As part of Noblelift’s focus on delivering exceptional customer experiences, we are excited to have Bill Pedriana join us in this pivotal leadership role," Wendy Mao, CEO at Noblelift Intelligent Equipment Co. Ltd., the China-based parent company of Noblelift North America, said in a release. “His passion for the industry, proven ability to execute innovative strategies, and dedication to customer satisfaction make him the perfect leader to guide Noblelift into our next phase of growth.”