Weak link in the supply chain: West Coast ports

Many large U.S. companies have their products manufactured in China — no surprise there. But “the huge surge of goods arriving on our shores from China and elsewhere in Asia could easily overwhelm the infrastructure that receives and distributes them,” writes veteran consultant George Stalk.

Stalk — in his book “Five Future Strategies You Need Right Now” (Harvard, 2008) — calls this phenomenon the “China riptide” and makes this prediction:

The West Coast ports of the U.S. will reach their combined container unloading & loading capacity as early as 2010.

One researcher calls the ports “the choke valve” of global commerce.

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Railroads make eco-friendly comeback

Is the horse-drawn carriage next? It’s 2008 and the once-dying freight railway industry is “enjoying its biggest building boom in nearly a quarter century, a turnaround as abrupt as it is ambitious,” gushes The Washington Post ( 21 April 2008 ). The boom is “largely fueled by growing global trade and rising fuel costs for 18-wheelers,” the article says. However, with the boom comes a concern about a return to the robber barons (and anti-competitive pricing) of the 1800s. Excerpts:

In 2002, the major railroads laid off 4,700 workers; in 2006, they hired more than 5,000. Profit has doubled industry-wide since 2003, and stock prices have soared.

This year alone, the railroads will spend nearly $10 billion to add track, build switchyards and terminals, and open tunnels to handle the coming flood of traffic. Freight rail tonnage will rise nearly 90 percent by 2035, according to the Transportation Department. [Actually: 88%.]

[T]he changing global market has fueled prosperity — and the need to add track for the first time in 80 years. Soaring diesel prices and a driver shortage have pushed freight from 18-wheelers back onto the rails. At the same time, China’s unquenchable appetite for coal and the escalating U.S. demand for Chinese goods, means more U.S. rail traffic is heading to ports in the Northwest, on its way to and from the Far East.

The zeitgeist has even dropped a “green” gift in the industry’s lap. A train can haul a ton of freight 423 miles on one gallon of diesel fuel, about a 3-to-1 fuel efficiency advantage over 18-wheelers, and the railroad industry is increasingly touting itself as an eco-friendly alternative.

But rail customers are complaining about the kind of price-gouging not seen since the robber barons of the 1800s, leading to antitrust suits and calls for re-regulation of rail prices. The rail industry counters that it’s using the same kind of “differential pricing” that airlines use today (i.e., higher prices where they have market power).

Railroad news: Shippers say lack of antitrust enforcement hindering rail competition

Business greetings: Shake hands, kiss cheek(s) or make smacky noise in the air?

One effect of globalization: learning whether to shake hands, kiss, or kiss-kiss-kiss when greeting a business associate from outside the U.S. “With so many national customs involved, ordinary office greetings require savoir-faire,” says Wall Street Journal writer Christina Binkley ( 27 March 2008 ) .

There was a time when business acquaintances did not kiss lightly on our side of the Atlantic. Close friends and family, maybe — but one didn’t peck her investment banker on the cheek or buss his Congresswoman. Social greetings are evolving, though, and are becoming more complicated with globalization.

Whatever happened to shaking hands? There is something so American about the firm control of a handshake — it’s about disarming one’s opponent and keeping him two feet at bay. Control is in our DNA. This is why travel guides must spell the social kiss out for us: In France, generally two cheeks, or four, no lips; in parts of Belgium, three cheeks, and so on.

Still, raise the subject and a blush-worthy anecdote is sure to follow. “Much of the confusion comes because each participant assumes he or she is choosing the type of social kiss to be performed, and the two choices don’t match,” writes Judith Martin, a.k.a. Miss Manners, in her “Guide to Excruciatingly Correct Behavior — Freshly Updated.”

Miss Manners says to kiss the right cheek first. “The first presenter gets to choose whether they will actually kiss each other’s cheeks, make a smack-smack noise in the air, or simply bump cheeks,” she writes. “The partner’s job is still to be alert in order to follow suit….” More rules are here (in a sidebar).

And, in case you were wondering, the rule is “no frontal hugs” in business settings. Major faux pas.

8 top business issues for ’08

No surprises here.  But it’s a nice restating of the obvious megatrends. From interviews with industry consultants at Deloitte & Touche USA LLP, here are eight business issues “that resonated across multiple industry sectors and could have a dramatic impact” this year:

  • Globalization
  • Convergence
  • Environmental Sustainability
  • Rising Energy & Health Care Costs
  • Transparency
  • Technology Use & Integration
  • The 2008 Presidential Election
  • Talent Management

Source: “2008 Industry Outlook: A Look Around the Corner,” Deloitte & Touche USA LLP, January 2008
The full report, with analyses for various industries, is available here.

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College students are taking more foreign language classes

U.S. college students seem to recognize the importance of knowing foreign languages, including Arabic and Chinese, in an era of globalization. The Modern Language Association’s survey of enrollments in languages other than English reports that enrollments expanded by 12.9% since 2002.

The study of the most popular languages — Spanish, French, and German — continues to grow and represents more than 70% of language enrollments. There is growing interest in languages such as Arabic (up 126.5%), Chinese (up 51.0%), and Korean (up 37.1%).

And, as an aside, enrollments in American Sign Language increased nearly 30% from 2002, the association reports.