Caterpillar relies upon supply network, not ‘chain,’ Georgia event attendees told

Don’t tell Caterpillar Inc.’s vice president and chief procurement officer that his job includes overseeing the heavy equipment company’s supply chain. Rather, as Frank Crespo told attendees of the eighth annual Georgia Logistics Summit, Caterpillar depends upon its “global supply network” to move massive products from construction and mining equipment to engines and turbines to diesel-electric locomotives plus half a million different parts throughout the world. “There’s nothing linear about it,” Crespo said of Caterpillar’s logistics network in closing the April 19-20 event at the Georgia World Congress Center in Atlanta. “It’s no longer a chain.” Crespo said Caterpillar, which ships machine and engines to 32 countries via Georgia’s ports of Savannah and Brunswick, in addition to importing parts and materials through Savannah, benefits from on-dock rail, direct Interstate highway access and flexible pickup and delivery hours and looks to soon gain from a deeper Savannah harbor.

Caterpillar relies heavily on intermodal rail, according to Crespo, and focuses on maximizing visibility throughout the supply network. “Visibility is a premier asset,” he said. “More and more, visibility will drive success.” In a discussion of regulatory onuses, Jason N. Craig, director of government affairs at third-party logistics leader C.H. Robinson said the soon-to-be-implemented mandate for electronic logging devices in trucks should definitely bring higher trucking rates. “Whether rates go up because of fear or because of actual capacity shortage, it’s the same for shippers: Rates go up,” Craig said.

Rhett Willis, president and chief executive officer of Savannah-based D.J. Powers Co. Inc., said the Automated Commercial Environment requirement for a single data window, to take full effect by yearend, places a heavy burden on freight forwarding and customs brokerage firms such as his. “It has given us five years of headaches and a lot of gray hairs,” he said. Regarding the International Convention for the Safety of Life at Sea’s impending demand for reporting of verified gross mass, or VGM, Willis said the ability for legal implementation is questionable. “They can’t make it law here,” Willis said, adding, in reference to the July 1 effective date, “It’ll be interesting to see come July first.” Curtis J. Foltz, who is slated to retire in June from his role as executive director of the Georgia Ports Authority, also doubted whether the new SOLAS demand can be enforced at U.S. ports, stating, in reference to the International Maritime Organization, “The IMO has no true authority to implement rules.” Foltz said that while the vast majority of other U.S. ports are expected to have a policy of rejecting containers for which a VGM has not been provided, the GPA plans to deploy “a little added element of flexibility” in that it will take receipt of a container with or without a VGM and then require verification from the ocean carrier that it has the VGM in hand before loading.

In other discussions, several shippers extolled benefits of Georgia’s ports.  Among them was Mitsubishi Hitachi Power Systems Americas Inc.’s Pooler, Ga.-based supervisor of transportation and warehouse, DeLores Ross, who said the Port of Savannah, including Foreign-Trade Zone No. 104, was a primary reason her company chose to locate in Georgia. Jeff Tindel, director of inside sales and logistics at Stone Mountain, Ga.-based Heatcraft Refrigeration Products LLC, said his firm not only has benefited from Georgia facilities but also has doubled logistics cost savings by making more active its partnership with Tyler, Texas-based flatbed operator Swan Transportation Services Ltd. Georgia Gov. Nathan Deal told the crowd that Peach State investments in port facilities and connective infrastructure have helped facilitate six straight years of record cargo throughput and are setting the course for continued gains, commenting, “We are making plans to do great things.” GPA Executive Director Foltz said other states and the federal government should put as much emphasis on transportation as Georgia. “We really need to focus on better infrastructure across the spectrum, because our country needs it,” he said. Foltz added that rail-served assets are critical, citing plans for development of at least two more inland port hubs to join the existing site in Cordele and another now being built in Northwest Georgia. Michael Miller, chief commercial officer of short-line rail operator Genesee & Wyoming Inc., said inland ports are “extremely important for growth of ports and rail and important from an environmental standpoint.” Ed Crowell, president and chief executive officer of the Georgia Motor Trucking Association, said enhanced partnerships and increasing use of technology, including smarter trucks and smarter roads, are advancing the role of trucking. “Trucking is where the cool things are happening in logistics,” Crowell said. Russell McMurray, commissioner of the Georgia Department of Transportation, noted that the state is investing $1.85 billion in transportation projects this year, adding, “Georgia is serious about its infrastructure, building a better Georgia today.”