Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Transportation and logistics providers took a wait-and-see approach to handling the potential impacts of the partial government shutdown that began at midnight Dec. 21 and requires "non-essential" employees of many federal agencies to stay at home while they are barred from working.
With President Trump and Congress mired in a stalemate over the terms of approving a budget to keep the government operating, the shutdown had no obvious end in sight as the nation headed into the New Year's Eve holiday break with thousands of workers idled.
One government body that was closed today was the Federal Maritime Commission, which in a statement on Wednesday said that all its employees had been placed on furlough and were prohibited by law from performing any duties during the shutdown. The exception to that requirement was the commission's acting chairman, Michael A. Khouri, and its commissioner, Rebecca Dye, who are exempted because they are Presidentially-appointed, Senate-confirmed officials.
According to its website, the commission is an independent regulatory and enforcement agency responsible for ensuring a reliable international ocean transportation supply system that supports the U.S. economy and protects the public from unfair and deceptive practices. Those duties are now on hold: "No transactions or filings will be accepted until appropriations legislation is enacted and the federal government reopens," the commission said in a release. "The Commission will resume normal operations upon enactment of appropriations legislation."
Among other impacts, the closure means that the commission:
will not respond to email or phone inquiries, or update its website
will not accept online filings for applications such as: Ocean Transportation Intermediary (OTI) applications or license updates; Foreign Unlicensed Non-Vessel Operating Common Carrier (NVOCC) registrations or renewals; Tariff Registration Forms; or eAgreements Filing System (Ocean carrier or marine terminal operator agreements or amendments).
will not support access to its online databases, including: SERVCON, the VOCC and NVOCC Tariff List, List of FMC Licensed and Bonded OTIs, and the Agreement Notices & Library.
Likewise, the U.S. Department of Commerce is now closed, according to its website. "Due to the lapse in Congressional Appropriations for Fiscal Year 2019, the U.S. Department of Commerce is closed. Commerce Department websites will not be updated until further notice," the site says. "The Department is prepared for a lapse in funding that would necessitate a significant reduction in operations and is currently implementing its plan."
However, that closure comes with some exceptions for operations that are considered essential safety or emergency programs, said Aaron Ellis, a spokesman for the American Association of Port Authorities (AAPA). One example is the Commerce Department's National Oceanic and Atmospheric Administration (NOAA) unit that manages the Physical Oceanographic Real-Time System (PORTS), Ellis said.
Also unaffected would be ongoing U.S. Army Corps of Engineers projects at cargo ports, although various other agencies could see changes, depending on the exact source of their funding within the federal budget, Ellis said.
In addition to the FMCSA, those agencies continuing to operate normally during the shutdown include the Federal Highway Administration (FHWA) and the National Highway Traffic Safety Administration (NHTSA), said Lloyd Brown, a spokesman for the American Association of State Highway and Transportation Officials (AASHTO), an industry group for state DOTs.
Thanks to that funding structure, most of the federal agencies that work with state DOTs will continue to operate through the shutdown, he said. For example, that means state DOTs working on federally approved projects should not see any changes to their FHWA reimbursement funding, he said. "For now, we do not see much direct impact from the partial shutdown," Brown said in an email. "That does not mean we are not watching the situation closely and if things change, we'll definitely advocate on behalf of our state DOT members."
UPS, NRF see little disruption for consumers
As logistics and transportation providers navigate the uncertainty and disruption caused by these various impacts of the shutdown, many are taking a wait-and-see approach.
"We're operating business as usual," UPS Inc. spokesman Matt O'Connor said in an email today. The hurdle comes just days after Atlanta-based UPS stretched its network to accommodate the business shipping days of the entire year, including the peak surge the transportation and logistics company calls "National Returns Day."
While that approach may support normal operations for some providers, the National Retail Federation (NRF) industry group voiced concern about the potential impact of the shutdown on consumer confidence and buying patterns.
"It's disappointing that a year marked by a consumer-driven economic recovery is ending in gridlock. Congress and the administration should move quickly to resolve this stalemate so that every American family can enjoy the holidays without worrying about dysfunction in Washington," NRF Senior Vice President for Government Relations David French said in an emailed statement.
The government's stalemate comes amid economic and policy uncertainty heading into 2019. On one front, the NRF and other groups are weighing the potential impact of looming tariffs on Chinese imports and the possible replacement of the North American Free Trade Agreement (NAFTA) with the proposed United States-Mexico-Canada Agreement (USMCA) trade deal. And on another front, several economic trend watchers are warning of signs of a slowdown in trade and growth statistics in 2019 and 2020.
NRF figures show that the economy is holding strong against these threats so far, shown as November retail sales increased 5 percent over 2017, and the country is on track to meet the group's holiday forecast predicting that holiday sales will increase between 4.3 and 4.8 percent this year.
"We do not believe this partial government shutdown will dampen consumer confidence heading into the New Year, but it certainly doesn't help either," French said.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.