Talking Shop With… George W. Prest

The CEO of the Material Handling Industry of America (MHIA) outlines some of the educational and networking opportunities at MODEX 2012.

Grocery Headquarters: What are some of the trends retailers can expect to learn about at the show?
George W. Prest: There are several supply chain trends we are hearing about from MHIA members and end users, all of which will impact retailers. Sustainability is still a hot topic as well as leveraging labor resources and training. Ergonomics and safety are also big as well as forklift fleet management and third-party logistics (3PL) selection.

However, it seems that automation is on top of most agendas right now, whether you’re talking automation equipment or related software, as companies strive to improve the efficiency of their supply chain operations.

Within automation, we are hearing a lot about flexible automation, voice, order picking, order fulfillment, mobile computing and visibility solutions.

Several exhibitors and collocated partners are presenting sessions on these topics at MODEX 2012 next month in Atlanta. Session information is available at www.modexshow.com/education.

One topic on the minds of supply chain executives is the expansion of the Panama Canal. How will this change the supply chain dynamic in the U.S.?
We see the Panama Canal expansion as a real supply chain game changer. The expansion is certain to have a major impact on the flow of imports into the U.S. However, it will also have a major impact on the flow of goods once they get to the U.S., creating new supply chain efficiencies for retailers.

According to officials at Jones Lang LaSalle (JLL), a Chicago-based commercial real estate services firm, 25% of imports currently coming through the West Coast could shift to East Coast ports as a direct result of the canal expansion. By lengthening, widening and deepening the locks, the Canal will accommodate much larger ships.

In fact, the largest ships today carry just 5,000 20-foot equivalent units (TEUs). When the expansion opens in 2014, that number will jump to as high as 13,000. Most hopes for the canal’s future are for cost savings, which are estimated at $400 per TEU compared with intermodal rates from the West Coast.

JLL cites the Panama Canal as one of the five most compelling change agents in the supply chain going forward. Inland ports are expected to also benefit from the import shift. Of particular note are Atlanta, Chicago and Columbus.

The Ports of Savannah, Charleston, Jacksonville, Miami, Baltimore and Philadelphia have announced projects to enlarge and deepen channels to make way for the larger ships. Hampton Roads and New York/New Jersey ports are already positioned to benefit from the shift.

We also expect that more distribution centers will be needed in the Southeast as a result of this shift. Distribution networks may already be undergoing a significant shift from super distribution centers to a hub-and-spoke model of smaller DCs.

The driving force is the high cost of energy and the low efficiency of less-than-truckload shipments typical of the large DC model.

How will MODEX 2012 be different from other material handling and logistics shows?
The inaugural MODEX expo, to be held in Atlanta, Feb. 6-9, is the industry’s newest event to offer end-to-end supply chain solutions for manufacturing and distribution professionals. The event was designed to build out from the material handling core of MHIA’s successful ProMat event to also showcase solutions for the broader supply chain that may, or may not, be confined to the four walls of a facility.

The exhibits on the MODEX show floor and the education presented will appeal to a broader supply chain audience that includes manufacturing, distribution and logistics operations. This is a great value for retail firms who need solutions for their entire supply chain operations.

What issues will be covered in the sessions at the MODEX 2012 Conference?
The MODEX 2012 Conference will feature leading-edge topics in manufacturing, distribution and the supply chain, exploring subjects as such as the impact of the Panama Canal expansion to sustainability, security and visibility. One of the MODEX keynoters is Alberto Alemán Zubieta of the Panama Canal Authority.

MODEX will also feature keynotes by CSCMP’s Rick Blasgen on the state of logistics and supply chain management and Georgia Tech’s Donald Ratliff on how supply chain and logistics performance impacts trade.

You can find detailed information on the entire MODEX 2012 expo at the website
www.MODEXShow.com.

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