Category: supply chains

Economic impact report says Seattle, Tacoma, bring nearly $55 billion to PNW

A new regional economic impact analysis shows The Northwest Seaport Alliance (NWSA), the Port of Tacoma, and the Port of Seattle continue as the primary drivers of the regional and state economy.  They supported more than 265,000 jobs in 2023, and together, the organizations generated $17.7 billion in wages and benefits and nearly $55 billion in business output.

The report offers a comprehensive regional look across the Seattle-Tacoma gateway, including marine cargo, aviation, real estate, commercial fishing, and the cruise industry. This is the first time that all lines of business have been evaluated together, according to the report.

It includes an analysis of direct jobs — such as longshore workers, truck drivers, and airport employees — as well as capturing a comprehensive viw of indirect jobs and induced economic benefit. Together, these represent the collective impact of port activities, demonstrating the amplifying economic effect the three organizations have across the region.  In addition, the organizations helped generate nearly $550 million in state tax revenues in 2023 (Exhibit 90). Jobs

The Northwest Seaport Alliance

The Northwest Seaport Alliance (NWSA) manages marine cargo in both harbors and in 2023 handled nearly 3 million twenty-foot equivalent units (TEUs) of containerized cargo, making it one of the largest gateways in the United States. Further, the NWSA is a key gateway for auto imports and breakbulk cargo. In 2023, NWSA operations supported an estimated 52,100 jobs, including 18,000 direct jobs, $4.4 billion in total wages and benefits, and nearly $14 billion in total business output throughout the state of Washington. 

Port of Tacoma

The report found the combined impact of trade through the NWSA’s South Harbor and additional Port of Tacoma lines of business in 2023 supported more than 41,000 jobs, $3.4 billion in wages and benefits, and a business output of almost $10.8 billion.

“We often talk about Washington being the most trade dependent state in the nation. What we don’t always talk about is how the trade that comes through our gateway is the catalyst for a robust supply chain ecosystem and quality living wage jobs across the state. We aren’t just dependent on trade, we excel at it,” said Northwest Seaport Alliance Co-Chair and Port of Tacoma Commission President John McCarthy in a press release.. “That trade excellence also serves the rest of the country. We are the ports of Idaho farmers and Midwest consumers; we serve a role of national importance and impact.”

Port of Seattle

The Port of Seattle’s business lines supported almost $39 billion in total business output, over 205,000 total jobs, and $396 million in total fiscal impact to the state.

The largest line of Port of Seattle business in the region is Seattle-Tacoma International Airport (SEA), which supported nearly 175,000 jobs in 2023, $10.5 billion in wages and benefits, and $33.3 billion in business output.

The Port of Seattle’s growing cruise business is expected to support 5,120 jobs in 2025, generating nearly $327 million in wages and benefits and over $1.2 billion in business output.

The report also found the Port of Seattle’s commercial fishing industry supported 8,790 jobs in 2023 and generated $484 million in wages and benefits and over $1 billion in business output. The Port of Seattle’s other lines of business, including its real estate, maritime moorage, and recreational boating portfolios supported an additional 16,035 jobs in 2023, nearly $1.3 billion in wages and benefits, and just under $3.3 billion in business output.

“At the Port of Seattle, we’re building the port of the future ‒ one that drives economic opportunity, safeguards family-wage jobs, and advances environmental stewardship,” said Northwest Seaport Alliance Co-Chair and Port of Seattle Commission President Toshiko Hasegawa. “This report reaffirms that our marine cargo and aviation gateways are vital to the economic health of our region. And just as important, it reflects the strength of our decade-long collaboration between the Ports of Seattle and Tacoma through The Northwest Seaport Alliance ‒ proving what’s possible when we come together with a shared vision for sustainable, inclusive growth.”

The report, prepared by Community Attributes, Inc., measures jobs, income, and business output directly supported by port activities, as well as associated nearby services tied to port operations (such as warehousing and off-site transloading) and the broader economic and fiscal impacts of these activities to the state economy.

Download the full Economic Impact Analysis (PDF)

Contact

Katherine Fountain | Senior Media Officer
(206) 787-3071 | fountain.k@portseattle.org

An exercise in futility?

No More Fossil Fuels by Joe Brusky via Flick CC

Supply chain emissions are mostly “overlooked” by corporations measuring their operational emissions (known as Scope 1 and 2), leaving a huge question mark about the ability to achieve net zero globally by 2050.

That’s a major problem, as a report from Boston Consulting Group indicates: corporations’ “supply chain Scope 3 emissions are 26 times higher than their operational emissions.” And: “Supply Chain Scope 3 Emissions continue to be overlooked, with only 15% of corporates having set a supply chain emissions target.”

Looking at this another way, 85% of businesses have no commitment to cut supply chain emissions!

That undermines the entire net zero exercise and its timeline because those blind spots drive “significant unreported risks for both investors and corporates.”

The BCG analysis examined the climate disclosures made by more than 23,000 companies through CDP (the non-profit Carbon Disclosure Project) this year, which was slso produced in collaboration with Boston Consulting Group (BCG).

For the average large, listed company, supply chain emissions will be 26 times higher than those generated in operations. The discrepancy is even higher in the retail and apparel sectors, at a ratio of 92:1 tonnes and 47:1 tons respectively.

The only sector in which supply chain emissions are equal to or less than operational emissions is fossil fuels.

“As such, having a robust plan to cut supply chain emissions should be part of any corporate climate strategy,” notes BCG.

The report says its conclusions “highlight that the challenge of effectively measuring Scope 3 emissions is widespread and spans industries,” said Sonya Bhonsle, director of strategic accounts at CDP. “Meaningful strides toward emissions reductions require corporates to evaluate their full supply chain, then raise ambition and take accountability. The first step to driving meaningful change toward a 1.5°C-aligned net zero future begins with disclosure.”

Evaluating the spectrum of all emissions is challenging and might be an impossibility. Unless all facets of the drive to net zero are factored in – and not “overlooked” – net zero cannot be achieved.

But then what is Plan B?

Los Angeles, Long Beach, and Shanghai Ports Implement Outline for First trans-Pacific Green Shipping Corridor

The creation of the first green shipping corridor across the Pacific is taking shape.

Credit: U.S. Naval Institute/Shutterstock

Last week a voluntary partnership of maritime goods movement stakeholders, including the Ports of Los Angeles, Long Beach and Shanghai, some of the largest carriers in the world, and key leading cargo owners unveiled a Green Shipping Corridor Implementation Plan Outline designed to accelerate emissions reductions on one of the world’s busiest container shipping routes across the Pacific Ocean.

The plan, the first of its kind, was developed with support from C40 Cities as part of their effort to reduce carbon emissions from the largest cities in the world.

A joint press release from the stakeholders says the plan “is an important step toward decarbonizing the global supply chains that power our economies and transitioning toward zero lifecycle carbon emission ships.” In addition, it will showcase “cutting-edge goods movement technologies, decarbonization applications and best management practices to enhance efficiency, and catalyze technological, economic and policy efforts to progressively decarbonize shipping and port-related activities.” 

Carrier partners will begin deploying reduced or zero lifecycle carbon capable ships on the corridor by 2025, and work together to demonstrate by 2030 the feasibility of deploying the world’s first zero lifecycle carbon emission container ship(s).

Carrier partners include CMA CGM, COSCO Shipping Lines Co., Ltd., Maersk, and ONE. Core partners include the Shanghai International Port (Group) Co., Ltd., the China Classification Society, and the Maritime Technology Cooperation Centre of Asia.   

Partnership participants will take steps to reduce carbon emissions and harmful pollutant emissions impacting air quality, through methods such as expanding the use of shore power and supporting the development of clean marine fueling infrastructure. Cargo owner partners have set goals to contract with carriers to use zero lifecycle carbon emission shipping services, and in an effort to measure progress toward decarbonization, all partners will develop metrics to track decarbonization progress. 

Gene Seroka, Executive Director of the Port of Los Angeles, said, “This trans-Pacific green corridor will be a model for the global cooperation needed to accelerate change throughout the maritime industry. Most of the emissions associated with moving cargo by ship occur in the mid-ocean part of the journey between ports.  This corridor will help reduce mid-ocean emissions while continuing the work we have done to cut emissions within our ports.”

The initiative will drive emissions reductions across the world’s largest ocean and lead to greener practices from supply chain participants along these vital trade routes, added Mario Cordero, Chief Executive Officer of the Port of Long Beach. “The new and innovative vessel technologies, increased availability of sustainable fuels and better practices created through this green corridor will also impact society’s transition to a cleaner future far beyond the areas served by our ports.”

 C40 Cities is a network of world cities that are working to deliver the urgent action needed “to confront the climate crisis and create a future where everyone, everywhere can thrive.” Mayors of C40 cities are committed to using a science-based and people-focused approach to help the world limit global heating to 1.5°C and build healthy, equitable and resilient communities. Through a Global Green New Deal, mayors are working alongside a broad coalition of representatives from labor, business, the youth climate movement and civil society to go further and faster than ever before. 

Established in 2004, Shanghai Municipal Transportation Commission (SMTC) undertakes the management and safety supervision of the highways and urban roads, road transportation and urban traffic, ports and shipping, and other transportation industries in Shanghai. SMTC also leads the development of the Shanghai International Shipping Center. SMTC coordinates the air, rail and postal transportation management. SMTC aims to optimize the layout of the transport structure, comprehensively balance the transport capacity, and build an integrated transportation system in Shanghai.

Read the Green Shipping Corridor Implementation Plan Outline.

Watch a video about the Green Shipping Corridor.

California Grants Target Big Bucks for Net-Zero Efforts

The California State Transportation Agency (CalSTA) this month announced $1.5 billion in grants as part of efforts to build a “more efficient, sustainable and resilient supply chain.” The program includes approximately $450 million for zero-emission infrastructure, locomotives, vessels and vehicles.

Port of Long Beach CA by Ken Harrell via Flickr CC

A major chunk of the funding includes a $383.35 million grant for the Port of Long Beach to complete a series of construction and clean-air technology projects to “accelerate” the transformation to zero-emissions operations and enhance the reliability and efficiency of cargo movement.

Also, as part of the state’s Port and Freight Infrastructure Program, nearly $225 million will fund a variety of zero-emissions cargo-moving equipment and support infrastructure projects across the Port of Long Beach, including “top handlers” and other manually operated cargo-handling equipment, as well as tugboats and locomotives. The sum is the single largest grant the port has received to support the zero-emissions goals of the 2017 Clean Air Action Plan Update.

The Port of Los Angeles will receive $233 million in grants from the state to complete infrastructure projects aimed at creating a more efficient and sustainable supply chain. “This nearly quarter-billion-dollar investment in critical Port of Los Angeles projects –– along with an additional $191 million in supporting regional projects –– will accelerate our efforts to boost competitiveness, create jobs and enhance decarbonization efforts,” said Port of Los Angeles Executive Director Gene Seroka. 

The Port of Oakland was awarded $119 million in grant funding from the state under the Port Freight Infrastructure Program (PFIP). The funding will support infrastructure improvements at the port’s maritime facilities and roadways, and to electrify port cargo handling equipment. 

A complete list of projects is available at the following links:

The funding – particularly the investments in zero-emission projects, which account for nearly 40 percent of the Port and Freight Infrastructure Program awards – builds on a partnership between the governments of California and Japan announced in March to collaborate on strategies to cut planet-warming pollution at seaports and establish green shipping corridors as part of the state’s broader strategy to aggressively combat and adapt to climate change.

The investments also follow the California Transportation Commission’s recent approval of $1.1 billion for infrastructure improvements on high-volume freight corridors as part of the Trade Corridor Enhancement Program (TCEP) – for a total state investment in supply chain infrastructure of more than $2.6 billion this month.

Sustaining Supply Chains

Supply chain infrastructure by Lars Plougmann via Flickr CC

Have supply chains ever really been sustainable? Are they more or less sustainable now in the post-pandemic, political and economic climate? Probably less.

Perhaps the problem is with the word itself: what happens when supplies are disrupted by war, weather, politics, economic turbulence and/or pandemics? Are the chains tough and flexible enough to withstand those punches?

Supply Chain Digest reviewed the Top Supply Chain Stories by Month 2022, which presented  pictures of oddities, failures, and “chaos.”

In January, for example, SCD reported that thieves are “opening intermodal containers as freight trains slow down or stop as they approach depots in downtown LA. That also leaves a trash mess around the rails from items the thieves don’t want.” Also, the queue of ships waiting to unload at the ports of Los Angeles and Long Beach reached a record high of 105, even as peak season ended weeks before.

And that was just January. In February Russia invaded Ukraine leading to chaos that is still happening.

In June, CSCMP and Kearney released the 2022 State of Logistics report. One of its metrics, US Business Logistics Costs (USBLC) rose sharply on an absolute basis in 2021 to $1.85 trillion. “That was an increase of 22.4% from an economically weak 2020. With a smaller increase in US nominal GDP (10%) than logistics cost rose last year (22.4%), that took the relative cost of logistics as a share of GDP to 8.0%, up significantly from 7.44% in 2020.”

Members of the International Longshore and Warehouse Union (ILWU), which represents West Coast dock workers, begin working without a contract in July after the current one expired at the end of June. Negotiations with the Pacific Maritime Association (PMA), which represents ports and terminals, began in May and a settlement seems well off.  Port automation is said to be a key issue, raising fears that a stalemate will lead to a dock worker strike and … supply chain chaos.

In December, the battery-powered Tesla Semi was launched as a commercially available product, with news that PepsiCo received the first vehicle. “It’s been a long haul for the electric truck,” according to SCD. “The company’s CEO Elon Musk first announced the cargo truck plans in 2017, with stated expectation for a commercial launch in 2019. At the announcement, Musk also said that on a November 25 test drive, a fully-loaded Tesla Semi (81,000 pounds) traveled 500 miles on a single charge.

Maybe we will all have to slow down in the EV age.

So what about this year? Thomas Insights offered these “top trends” in the supply chain for 2023:

  • An increase in Reshoring and Near-Sourcing initiatives: “Factors ranging from high freight costs, labor shortages, and factory shutdowns to component shortages, transportation delays, and geopolitical conflicts, have compelled many organizations to rethink their approach to supply chain management.” 
  • The Rise of crowdsourced delivery: A global research study found that around 90% of retailers expect to use crowdsourced delivery to handle specific orders by 2028. 
  • Better conditions for truckers: As of October 2022, the U.S. was short almost 78,000 truck drivers. “If current trends continue, the driver shortage could exceed 160,000 by 2031, contributing to significant supply chain delays.”
  • High supply chain costs: “In 2022, increases in fuel prices and ongoing global supply chain disruptions have severely impacted retailers’ margins. Between January and June, for example, the price of regular motor gasoline rose by 49% and the price of diesel fuel rose by 55%. Meanwhile, the ongoing war in Ukraine has seen a decline in food supplies and transportation bottlenecks. Because it’s more expensive, and takes a good deal longer, for retailers to acquire, transport, and store their goods, the prices of commodities are also soaring.”
  • Smaller warehouses: “Because smaller warehouses are both in-demand and hard to come by, recently, the rental rates for units less than 120,000 square feet had risen twice as much compared to bigger warehouses. Another option for retailers is to transform existing retail spaces into fulfillment centers. This is the tactic taken by Walmart, which is in the process of converting many of its 4,700 stores to mini-warehouses.”
  • Major skills gaps remain: “For supply chain leaders, a focus on attracting, recruiting, and retaining top talent will be a key focus in 2023, as will reskilling and upskilling the existing workforce.”
  • Technology investments: “The top supply chain technology trends of 2022 included digital twins, autonomous things, sustainability tools, and analytics everywhere. As companies become more comfortable utilizing these technologies, we will see them grow in 2023.”

Sustainable supply chains? It seems those are three words that don’t work very well together at the moment.

Green Corridors on the deep blue sea

On the shipping lane by Kari Nousianien via Flickr CC

The ports of Gothenburg and Rotterdam pledged to establish a Green Corridor between the two cities, which will put a framework in place for collaboration on alternative fuels and reducing carbon emissions.

The Memorandum of Understanding (MoU) was signed in the presence of the Swedish and Dutch royal families. It is intended that the corridor will become part of the European Green Corridors Network, set up in March 2022 by the Maersk McKinney Moller Centre for Zero-Carbon Shipping.

According to a recent report from McKinsey, zero-emission fuels and vessels will need to be deployed over the next decade to achieve full decarbonization of the shipping sector by 2050. “This ambitious goal could be catalyzed by green corridors.”

The zero-emission goal was established by the International Maritime Organization (IMO), which has mandated emission reductions of 50 percent for all vessels by 2050. (Annex 11 Resolution MEPC.304(72) adopted April 13, 2018, Initial IMO strategy on reduction of GHG emissions from ships, International Maritime Organization, imo.org.) A number of countries—including Japan, the United Kingdom, and the United States—have declared a target for net-zero shipping emissions in the same time frame.

The U.S. Department of State released a “Green Shipping Corridors Framework” fact sheet in April that states: “Green shipping corridors can spur early and rapid adoption of fuels and technologies that, on a lifecycle basis, deliver low- and zero-emissions across the maritime sector, placing the sector on a pathway to full decarbonization. The United States envisions green shipping corridors as maritime routes that showcase low- and zero-emission lifecycle fuels and technologies with the ambition to achieve zero greenhouse gas emissions across all aspects of the corridor in support of sector-wide decarbonization no later than 2050. There are multiple pathways through which a fully decarbonized corridor can be achieved; this green shipping corridors framework therefore provides maritime stakeholders the flexibility to choose the path that best suits their needs.”

It seems that we are in the early stages of actually establishing green corridors in the maritime/port sector, which is why the Rotterdam-Gothenburg agreement is significant. Allard Castelein, Chief Executive of the Port of Rotterdam said: “This Green Corridor initiative is part of our ongoing efforts to bring together parties across the supply chain to help realize more sustainable shipping in support of the Paris Agreement.” And Elvir Dzanic, Chief Executive of the Gothenburg Port Authority added: “We can now present a more distinct path towards the decarbonization of shipping.”

The McKinsey report asserted: “Finding industry-wide solutions is challenging, given the varied and complex nature of the sector. One way to accelerate decarbonization is to implement ‘green corridors’: specific trade routes between major port hubs where zero-emission solutions are supported. A new report, The next wave: Green corridors, produced by the Getting to Zero Coalition in collaboration with the Global Maritime Forum, Mission Possible Partnership, and Energy Transitions Commission, with analytical support from McKinsey, probes the feasibility of two such selected corridors,” the Australia-Japan iron-ore route and the Asia-Europe container route.

The results of this analysis are “encouraging” but there is still a long navigation ahead.

FAO on food loss and waste

Fresh mangoes, like many other fruits, spoil rapidly because of their high moisture content and delicate nature. © FAO/Miguel Schincariol.

The Food and Agriculture Organization of the United Nations asserts that minimizing food loss “is easier than you think” by adopting simple solutions that can help “break the vicious cycle of food loss and climate change.”

The FAO article, released in connection with the International Day of Awareness of Food Loss and Waste 2022, notes that each year, approximately 14 percent of the food we produce is lost between when it is harvested and before it reaches the shops. A further 17 percent of our food ends up being wasted by retailers and consumers.”

FAO continues: “Food loss and waste is also a major contributor to the climate crisis, accounting for up to 10 percent of global greenhouse gas (GHGs) emissions. In some countries, the food supply chain is already on course to overtake farming and land use as the largest contributor to GHGs emissions, adding to an unstable climate and extreme weather events such as droughts and flooding.”

Alarming numbers, to be sure, but simple solutions? It seems that nothing is ever simple anymore.  

The UN organization has implemented several projects designed to reduce food loss and make agriculture systems more efficient. The Asia region is showing some promising results. Consider the mango.

Like other fruits, fresh mangoes spoil rapidly because of their high moisture content and delicate nature. If not harvested at the correct stage of maturity, and if not handled properly throughout the distribution chain, mangoes suffer both in terms of quality and quantity, resulting in losses and reduced income for all involved in their production and post-harvest handling. Furthermore, improper handling and infestations shorten their shelf-life, which in turn limits their sales, resulting in economic losses.

In southern Asia, for example, FAO experts found that local farmers often have scarce knowledge of how to handle fruit and vegetables after the harvest and also lack the resources to address quality issues in the supply chain. This can result in more than half of vegetable harvests being lost due to diseases, pest infestations, improper harvesting techniques, careless handling, poor packaging, and transport conditions.

That does not sound very simple, but apparently, training is a key factor. “When FAO trained the farmers to apply good post-harvest management practices and use reusable plastic crates instead of single-use mesh sacks to transport their produce, the switch produced dramatic improvements.”

Using plastic crates for bulk packaging reduced losses to a minimum during transportation. Also, “shelf lives in shops and markets improved significantly for the mangoes that underwent a hot-water treatment that controls post-harvest diseases. New harvesting tools and techniques, such as improved picking poles or trimming the fruit stem with scissors and gloves rather than pulling them off by hand, reduced mechanical injury to the fruit, while the trimming of the stems reduced latex staining of the fruit when packed in the crates, making them more attractive in shops and markets.” 

Improvements in the post-harvest handling practices, together with the hot water treatment, resulted in better quality mangoes having a longer shelf life in retail, with a 70 – 80 percent reduction in the number of mangoes wasted due to decay over a period of five days.

FAO is promoting its findings and practices around the world. About 5 000 smallholders across Asia have been trained in fresh fruit and vegetable production and marketing.

 The FAO conclusion? “With the rise of food prices, the growing impact of climate change, and the persistence of global hunger, there is no excuse for food loss and waste at any level.”

It does sound simple, but simple is often complicated.

The story and photos can be found here:  https://www.fao.org/fao-stories/article/en/c/1605721/

Eco-Friendly sourcing and risks

Forest Farming by Sustainability via Flickr CC

An article in Information Today talks about “reigning in” the risks of sustainable sourcing. Written by contributing reporter Samuel Greengard, the report says that building more eco-friendly and sustainable supply chains “is rapidly becoming a top priority for businesses. A clear strategy and the right technology that delivers visibility can reduce risks and improve results.”

That’s great but what has taken so long for businesses to realize this? The climate crisis is well upon us — it should have been a top priority many years ago. One of the great lessons, and confluences, of the pandemic and the climate crisis, is that supply chains of all types must change their thinking dramatically about how they do business.

Back to the article. Greengard writes:

“Product shortages and supply chain disruptions have emerged as a frustrating reality for organizations across a wide swath of industries. Due to a convergence of factors — including the pandemic, the war in Ukraine, and a shortage of raw materials — procuring essential materials and components is increasingly difficult.

“Yet, things suddenly get a whole lot more complicated as soon as sustainable sourcing enters the picture. As businesses strive to meet aggressive climate goals and display results on Environmental, Social and Governance (ESG) reports, the headaches and risks multiply. An inability to obtain materials, products and services can threaten basic operations.”

Supply chains and procurement are risky enterprises and adding green principles and sustainable sourcing to the mix adds even more risk. It’s the cost of doing business, so “reigning in risk” seems like the wrong approach. Actually, it can’t be done in a significant way because risk in the modern era is a pandora’s box.

“The end goal is to establish strategies, policies and processes that fully support sustainable sourcing.”

A nice and obvious thought but extremely difficult to implement as the climate crisis becomes more, well, critical. Better to do the right things, risks or no.

,,,

Note: Things are changing job-wise for yours truly so watch this space for developments with this blog and other endeavors.