How are you planning for the rebound?

By Christopher Steele, President, CWS Consulting Group LLC

All right, the economy is still not great. The Wall Street Journal reports that the recession is over. We’re starting to see signs that
unemployment is starting to at least plateau a little, but consumer spending is still down. The railroads, trucking companies, and ports are starting to see some slight easing of their troubles, but nothing to truly trumpet from the rooftops as yet. Unemployment forecasts continue to grow, consumer spending continues to be down, and there are concerns that the dollar will not be the currency of choice in the global economy going forward.

Still, the fact that we have not yet recovered does not excuse inaction. This represents a strategic risk: While waiting for the “new normal” to arrive, for things to finally settle back to what we recognize as prosperity, companies have been losing time and
competitive advantage.

The simple fact of the matter is that this economic state of affairs is the new normal.

Instead of bemoaning this fact, companies should recognize that times of flux, change, stress and upheaval represent opportunities for world-leading organizations to jump ahead of the curve. And if they embrace the current environment as an exciting, challenging standard environment, rather than a storm to be weathered such companies will remain the world leaders of the future.

Looking towards a new normal
Think back to the concerns of just slightly more than a year ago: Companies faced crushing fuel costs were competed on an
increasingly global battleground. Uncertainties abounded regarding how green pressures would impact both logistics and real estate.
Product flux and supply chain dynamics were pushing against inflexibility in real estate deals.

These concerns remain, but have gone largely unaddressed due to the financial and credit crises of the past few months. Perhaps it is time to accept these issues as given in the new economy and move forward.

The times of cheap energy, impermeable borders, and cheap credit may be gone for a long while, but time moves forward, and companies cannot sit on their hands forever. By choosing to do nothing, companies have chosen to either defer fixing their problems and finding new ways of succeeding sometimes both.

The new normal the global economy that companies and developers will need to compete in will include increased competition for energy (and resulting volatility in transportation pricing). It will include a global competitive landscape. It will include a need to compete not only on cost, but on innovation and embracing change. And, most importantly, this new normal will require companies to jump when they sense an opportunity.

This is the time for the brave to plant their flag in the next economy. Some of this is already starting to happen.

Opportunities for the brave
While both GM and Chrysler went through bankruptcy and massive scalebacks, Volkswagen has moved forward with plans for a new manufacturing plant in Chattanooga, Tenn. The announcement had come before the financial and auto crisis, but Volkswagen has held fast to its plans, confident that they will be producing vehicles of choice for the coming years. By doing so now, Volkswagen also gains the advantage of being the preferred buyer in town for auto parts and has their choice of talent among the highly skilled professionals from many levels across the U.S. auto industry.

Others (like the biotech and alternative energy industries we have previously discussed) have moved forward because they understand that their innovations are needed now and that they must act while their market window is open.

Of course, this still leaves open the need for true solutions for fuel and energy solutions, as well as for a fully integrated global supply chain solution; but these will come if companies are willing. They cannot use the current economy as an excuse to do nothing, regardless of their industry. As shown above, the industry does not need to be new to have opportunities in the present environment. But it does need to have the courage and the vision to clearly see how it can succeed in indeed, as a result of this new normal state of affairs.

In our next column, we will recap some of the supply chain and real estate issues discussed at the Southeast Freight conference in Charlotte. There was a very lively exchange of ideas, and this column will attempt to describe some of the more critical issues of the day!

In This Issue

Up Front

News, Trends & Analysis
New Items

U.S. employment environment promotes import uncertainty

Supply Chain
How are you planning for the rebound?

Trade compliance often has a broader scope

Features
Optimism characterizes inaugural Southeast Freight Conference

Gateway at a glance: Northern California

Ports & infrastructure
Prince Rupert looks towards Memphis

Canada tries to standardize port performance metrics

Global players jockey over Arctic shipping routes

Port Products
Terminal management systems

Commentary
Roll up your sleeves for the next phase

On the Horizon
The Internet of 2020

Casualties