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Jan.9, 2017

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126 THE JOURNAL OF COMMERCE JANUARY 9.2017 2017 ANNUAL REVIEW & OUTLOOK LOGISTICS EXECUTIVE COMMENTARY which will further increase the speed of adoption. I recently participated in a round - table discussion that included some of the largest omnichannel shippers, and was amazed to learn how every one of them is deploying or testing new technology services in 2017. Great organizations understand the need to continually evolve or be left behind. The fear of becoming the next Blockbuster can be a strong motivator. Moreover, many larger organizations have developed corporate cultures and mandates to ensure they remain thought leaders in their industries. There is a great desire to be at the helm of the new economy, helping to figure ways to reduce carbon footprint or deliver same day to their consumers. As adoption of these new technologies gains steam in 2017, a select few will become the new norm, part and parcel of most shippers' tool kits for success. It's evident that the tech mantra, "try new things but fail fast," has found its way into the logisticians' vernacular. It should be noted that we are still in the first inning of a very long game. Companies developing these new technology services no longer are being funded with a pitch deck and an idea, but instead need to show actual sales and traction in the marketplace. As such, the number of entrants will level off, and some will fade away as the market's natural selection process takes effect. CARGOSPHERE NEIL BARNI President 2017 LOOKS TO have an exciting focus on digitization. The spotlight is shining brightly on this subject as companies look to achieve the productivity and performance benefits that come from digital solutions. When we look at freight rates, we know the technology that allows industry partners to effectively work together in the cloud, in real-time to improve customer satisfaction and returns, is a path to success. The time is now for greater collaboration around rate management and distribution. Eliminating the notoriously cumber - some and laborious manual processes involved with freight rates is critical to boosting efficiency. Managing multitab contracts with thousands of port pairs is a daily exercise filled with complex - ity. It's no wonder rates in general, and subsequent updates, have become a significant burden on the industry. The technology that's catching on strengthens and accelerates industry connectivity to improve business per - formance and efficiency. The magic comes from innovative solutions that tame rate complexity and volatility and enable immediate connectivity. A single rate platform that makes global interconnectivity possible reduces rate friction and allows com - panies to rapidly conduct business and achieve time and cost savings. By sim- plifying the ocean freight rate process, everyone wins. Robust technology that drives automation where it didn't exist before saves countless hours of a com- pany's best people's time. Interconnectivity to drive effi- ciency and deliver financial gains is now a priority. When ocean shipping parties come together to adopt a frictionless rate platform, real value is realized. That's when the magic happens. CBRE BLAINE KELLEY Senior Vice President, Global Supply Chain Practice INDUSTRIAL REAL ESTATE markets globally have been on a growth curve for the last 60 months. In the US, an imbalanced warehouse demand-supply ratio is finally leveling out with each delivering 200 million square feet for 2016. Despite concerns and headwinds from slowing global trade, domestic markets look to have a repeat perfor - mance for 2017. The consumer continues to demand agility, customization and convenience in today's marketplace. This remains a perplexing algorithm for supply chain leaders as they balance service and cost with tighter delivery windows and labor constraints. Look for a proliferation of even more last- mile delivery centers in population clusters. High fashion, apparel, and electronics industries will invest heav - ily in their networks and infrastructure. The new distribution center might just be a 30,000-square-foot repurposed shopping center or neglected office building in the urban core. Given the duration of this recov - ery cycle, what challenges should we expect for 2017? First, owners and investors of industrial real estate have seen rents grow and returns increase, especially in primary markets. The results are increased operating costs, rent inflation, labor shortages, and mar - gin pressure. For shippers, this leads to a fixed-vs.-variable cost impasse. Real estate owners entrench on firm return expectations. Retailers rely upon flex- ible, nimble pricing models. Second, given the cyclical nature of real estate, there is a risk of over- building, especially on the edge of a recession. This risk should be tempered as investors are much closer to logistics company needs than ever before and able to dial back new deliveries more efficiently. We expect 2017 to look much like 2016. Despite global trade lethargy, car - rier consolidation and historical cycles, our industry should fare well. If con- sumer optimism stays the course and does not lead to speculative overbuild- ing, the next year should be another strong performer. DACHSER USA AIR & SEA LOGISTICS FRANK GUENZERODT President and CEO ONE OF THE most important changes we can expect to see in our industry in 2017 is further consolidation in the ocean freight market. With that comes some uncertainty, but we can expect to see a slight reprieve in increasing shipping rates providers have been experiencing since the collapse of Hanjin. While rates are not predicted to decrease substantially, stabilization should occur after Chinese New Year. However, providers can expect that once rates flatten, they will be higher than what we have experienced in the last year or more. Unfortunately, Hanjin's col - lapse may not be an isolated incident. Logistics providers should learn from the Hanjin experience and readjust their risk management systems. Tak- ing corrective action prior to a crisis can ensure that a customer's cargo is not stranded on a container at sea. Providers should pre-emptively move shipments to more stable carriers. In addition to rate increases, many importers have experienced delays and interruption of their supply chain as carriers experienced a capacity crunch. To manage delays, it's essential that logistics providers work with their customers to ensure advanced booking of space by using the best forecasting tools for visibility and forward planning of weekly movements. Proper planning and forecasting is key to an uninter - rupted supply chain. It will also be important for the supply chain industry to monitor the Despite global trade lethargy, carrier consolidation and historical cycles, our industry should fare well. Unfortunately, Hanjin's collapse may not be an isolated incident.

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