Big Deals in Logistics: From automation and Amazon to tariffs

MEAGAN NICHOLS | MEMPHIS BUSINESS JOURNAL

Getting things from point A to point B in a timely and cost-effective manner: that’s Memphis.

To discuss the city built on logistics, a group of industry experts gathered Monday, May 13, at the Crescent Club at the Crescent Center, focusing on the sector’s current opportunities and challenges as part of Memphis Business Journal’s Big Deals in Logistics event.

From automation to blockchain to tariffs — and lots in between — the conversation touched on the most pressing transportation and supply chain matters.

Participants in the event were:

  • Carolyn Hardy, president and CEO of Chism Hardy Investments LLC
  • Joel Henry, president of Intermodal Cartage Co. LLC
  • Dr. Udo Lange, chief operating officer for FedEx Logistics
  • Richard McDuffie, chief operating officer for Dunavant Global Logistics Group.
  • Moderator: Dr. Stephanie Ivey, associate dean for research with the Herff College of Engineering and a professor with the Department of Civil Engineering at the University of Memphis.

“If ever there was a time to be excited about transportation and logistics — it’s now,” Ivey said.

Big Deals in Logistics sound bites

Blockchain

“What is really game changing? I think robotics is game changing, but the biggest thing that is game changing is blockchain.” — Dr. Udo Lange

Automation

“We used to have 30 people load 24 trucks. We invested in automation and technology, and [then] we needed only four. It takes a different skill set. You are going to have to train your people in a different way. … There is going to be a foundational level of knowledge that our kids are going to have to know. … It is a whole different world, and I see the challenge is going to be: What are we sharing with our school systems? How are they embracing where the business community is going?” — Carolyn Hardy

“Automation is great, but applying automation when there is not a good return on investment doesn’t work.” — Richard McDuffie

Tariffs

“We have an export customer in lumber who exports about 50 to 75 loads a week, and they canceled all of their bookings to China last week. That is the first time we have seen anything like that.” — Joel Henry

“This whole tariff thing, we are terrified of it. Today we lost a customer we’ve had for a year. They decided this week they weren’t going to ship at all.” — Hardy

“I am for free trade. … A tariff is a tax, and, quite frankly, we aren’t going to see job creation come back to the United States in droves because of tariffs.” — McDuffie

“What several of our customers did is absorb the 10 percent [tariff], and now they are saying if it goes to 25 percent, they won’t be able to absorb the 10 percent. Either people will pass it on to the end consumer, which will be interesting what will happen then … or they will look for different sourcing alternatives.” — Lange

Amazon

“FedEx and Amazon have done a lot about pushing our expectations about how you see the delivery cycle.” — Henry

“The biggest change coming up that is going to force everybody to change is Amazon. Amazon keeps looking at things from a different set of lenses and is forcing everybody to look at things differently. That is very healthy because it forces everyone to do an internal look, to say, ‘What can I do differently for the consumer?’ If Amazon is doing something in six hours, it forces someone to think about, ‘How can I do it in five?’ Organizations like Amazon — though a disturbance — are also good for our economy.” — Hardy

Infrastructure

“Believe it or not, I want to pay more taxes on fuel if it goes to the right place. We need that to go to road infrastructure.” — Henry

Memphis

“Memphis being one of the logistics hubs in the world is always benefitting from logistics challenges, so I think the future will be bright.” — Lange

“I believe in Memphis from a supply chain perspective because it truly is one of the greatest logistics centers in the world. Not many cities have the ability to ship freight up and down the Mississippi River. We’ve got that opportunity. We’ve got the first- or second-largest cargo airport — depending on the year — in the world, and that is because of FedEx. You’ve got a major thoroughfare here for highway transportation, and of course you’ve got all five Class A railroads. … Memphis can reach 80 percent of the population in less than one day by truck. That’s a huge, huge deal in the supply chain. From my perspective, there is no better place to have a supply chain career than in Memphis, Tennessee.” — McDuffie