Supply Chain Leaders Air Issues, Call for Change

FORT WORTH-As nations duel for trade superiority, North America's SuperCorridor Coalition, meeting this week in Fort Worth, is swapping trade secrets and weighing solutions to develop smooth-sailing plans to move goods swiftly through Mexico, the US and Canada. It's all about the logistics of logistics.

An estimated 400 transportation leaders from all three countries are attending Nasco 2007, a three-day event with Fort Worth as the host city and locally based powerhouses Hillwood and BNSF Railway Co. in the sponsor lineup. Roughly 25% of the contingent hails from Mexico and Canada.

There's the obvious: cross-border partnerships, public-private partnerships and continued infrastructure development of air, port, rail and road networks. But, there's more to the case than the obvious, say speakers for the non-profit organization's annual event, which is focused on north-south trade lanes. Imagine stopping a freight train in the middle of an international bridge to exchange one country's crew for another. It happens every day, but there is a solution--getting legislation enacted for international crews.

There is a long list of challenges, some easier to fix than others. At the end of the day, the payoff is economic development and remaining a supply chain leader.

The AllianceTexas story is well known in the industry: 17,000 acres of Texas pastureland that's now a logistics fortress with every type of real estate in its bounds and more being built every day. Hillwood Development Co. chairman Ross Perot Jr., though, is ready to take the industrial construction to the next level: building warehouses to LEED certification just as his team is doing with its newest office building. The goal is to show industrial development and environmental sustainability can share one homestead.

Not only does Hillwood gain ground on its environmental score, but it also scores points with investors and tenants. "We win because our buildings have environmental sustainability and tenants will pay more to be in sustainable buildings," Perot says. "And, our institutional partners want to be owners and investors in sustainable real estate."

Development, sustainable or traditional, is just one part of the logistics equation. Several Nasco speakers called for unified policies and regulations so goods can be transported quickly, easily and securely from border to border, crisscrossing states without a hitch. "We need to look at issues through new lenses," says Brian Bohunicky, director general of strategic policy for Transport Canada. "It's not just about ports, roads and rail. It's about how the whole system fits together. Partnerships are crucial."

Canada has committed $5.8 billion to infrastructure for its Asia-Pacific Gateway, a multi-modal network to move goods from its western ports into "North America's economic heartland," Bohunicky says. A $2.1-billion national fund is dedicated to gateway and border crossings.

Mexico, which has been pumping capital into its four ports, has transitioned the 33-year-old Lazaro Cardenas from an industrial port into a commercial one in the past four years. The 6,899-acre port is surrounded by a 1,680-acre industrial park and 3,286 acres of private development by industries. Construction is about to start on a $36.5-million container facility, which is slated to open in late 2008. The project will boost capacity to two million containers per year. It includes a ship dismantling site, predominately scrapped pieces of US fleets, and processing sites for bulk minerals and non-container cargo.

Lazaro Cardenas is operated by Hong Kong-based Hutchison Port Holdings, the world's largest private port owner and operator with 257 berths in 45 ports. "Privatization is the key for the 45 ports that we operate," Gary Gilbert, senior vice president, told the conference-goers at yesterday's opening at Texas Motor Speedway in AllianceTexas. "Money goes where it's treated very well. And privatization allows better efficiencies in our opinion."

But, Gilbert stresses it doesn't mean shortcuts. "I believe every box needs scanned. I believe we need to know where it's been and if it's been tampered with," he emphasizes.

Whether it's at the border or deep in America's heartland like Kansas City, security ranks as one of the hot topics for the conference. In Kansas City, construction is under way or about to start on three more logistics parks. The uptick in industrial development is bringing 500,000-sf-plus warehouses to the "inland port" city for the first time.

Kansas City has set up a non-profit organization, SmartPort Inc., to promote its economic development interests. And part of the Kansas City call for change involves a customs clearance that would allow goods to move "seamlessly" across states and borders.

According to David Bradley, CEO of the Canadian Trucking Alliance, 39 states rank Canada as their top buyer of goods. Last year, 13 million rigs crossed the Canadian border. With Asia rebuilding the Silk Road to reopen the trade route, it's time for policymakers to "stop talking and start doing. We've got to come face to face with the issues," he says. "If we want North America to become and remain a competitive trade block, we've got a heck of a lot of work to do."