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Jan.12, 2015

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8 THE JOURNAL OF COMMERCE JANUARY 12.2015 2015 ANNUAL REVIEW & OUTLOOK SHIPPER ROUNDTABLE E ven as they grow more optimistic about the economy and the outlook for demand this year, U.S.-based shippers are worrying about port con- gestion and dwindling truck capacity. Even if the International Longshore and Warehouse Union and West Coast employers reach a settlement that ends labor slowdowns, the participants in The Journal of Commerce's 7th Annual Shipper Roundtable are adjusting their supply chains to cope with the congestion that slowed cargo traf- fi c to a crawl, not only in the U.S. but also around the world. They already are extending their planning horizons so they can adjust their supply chains to meet demand, but they don't want to beef up the inventories they struggle to keep lean. After all, any port delays result in bigger inventories, because, as you'll fi nd as you read on, product at sea is inventory, and "inventory is cash." As much as port congestion is throwing a monkey wrench in shippers' plans for 2015, the shortage of trucking capacity and chassis looms just as large. That's one of the reasons shippers can't get their containers off East and West Coast docks, and they fear it's only going to get worse. Then there's the crumbling of U.S. infrastructure, once the world's best and now the victim of con- gressional inaction. But there are bright spots. The relationship between shippers and carriers has improved markedly. Roundtable panelists view their carri- ers as their supply chain partners and are working closely with them to adjust capacity to meet demand. Another bright spot is the sharp decline in fuel prices, which is providing shippers and carriers cost relief, as well as boosting demand for the products they import. Nevertheless, the cost of sourcing in China continues to escalate, so shippers are looking at bringing production closer to home, so they can cut supply chain costs and adjust them more quickly to cope with risks such as port congestion. The message revea led when Executive Editor Chris Brooks and Editor-at-Large Peter Leach sat down in December for this wide- ranging discussion was clear: There will be no shortage of challenges facing shippers as the year progresses. Breaking Point F rom port congestion and new ocean alliances to driver shortages and rail service worries, the global supply chain is more fragile than at any point in recent memory. Three shippers discuss how they're adjusting to the challenges.

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