LO • GIS • TICS The overall management of the way resources are moved to the areas where they are required. Resources Employ Florida Banner Center for Logistics and Distribution 386-754-4492 Florida Trucking Association 850-222-9900 Jacksonville Economic Development Commission 904-630-1858 Supply Chain Management Institute, Polk County Community College 863-669-2326 Port of Tampa 813-905-7678 University of North Florida, Division of Continuing Education 904-620-4200

U.S. Representative John Mica from Winter Park, Republican leader of the House Committee on Transportation and Infrastructure, has noted that “every $1 billion in spending on highways and transportation projects results in 35,000 new jobs.” A Florida Chamber of Commerce report cites a higher jobs figure (47,000), but there’s no question that such investments pay off in a big way.

It is no surprise then that in December 2008, Florida Governor Charlie Crist presented a

$6.9 billion list of transportation projects for consideration in President Barack Obama’s economic stimulus package. The return could be exponential, generating close to $40 billion in increased economic activity in the state.

Beyond the potential for transportation investment to stimulate new job growth, building and maintaining a healthy supply chain is key to Florida’s economic competitiveness throughout the Sun Belt and across the globe. Businesses, government agencies and consumers demand timely, efficient movement of goods and services. Quality of life depends on it as well.

Millions of Floridians expect gasoline to be available at their local pump, orange juice to be on the shelf at the corner store and medication to arrive safely at the pharmacy. And millions of people all over the world want goods and services produced right here in Florida.

For Florida’s businesses, supply chain issues are compounded by the need for greater efficiencies. Congested roads mean missed opportunities, increased operational costs and lost time and productivity. A freight truck has to take approved routes to meet its destination, and a freight train can’t pop a U-turn to avoid a traffic jam.

With an estimated shortfall of $58 billion in funding over the next 25 years, Florida’s transportation system, which includes 120,000 centerline miles of public roads, 127 public aviation facilities, 2,800 miles of rail and 14 deepwater seaports, will be challenged to keep pace.

To complicate things further, the economy of tomorrow will be different from — and more diverse than — the economy we have today. Innovation will add high-tech demands to already pressing challenges.

“If you look at what has made Florida, it is transportation and connectors to people, space and agribusiness,” says Carolyn Fennell, spokesperson with the Greater Orlando Aviation Authority.

Orlando International Airport, along with other airports across the state, is looking at how to bring the future of transportation to Florida now. Fennell says that uncorking bottlenecks is the key to keeping Florida’s economy revving: “It’s going to be connectors that take us to the future.”

That observation cuts to the heart of any effort to move Florida forward as a viable competitor in the Sun Belt or across the globe. Yet, as Fennell will tell you, it’s not enough anymore to recognize the problem and discuss solutions. Execution is key if the business community wants to keep demand coming to — not leaving — Florida.

roads State Highways » 42,082 lane miles of state highways » 6,511 bridges Local Roads » 107,482 lane miles of local roads » 5,061 bridges

Executing Real Solutions

Whether it’s getting freight to port, or workers to the office, transportation costs are increasing as demand is spiking. And the challenges impact every business sector in Florida. Whether they realize it or not, every business is involved in logistics — either on the sending end or the receiving end.

A report issued in June 2008 notes a $91 billion increase in U.S. business logistics costs from 2006 to 2007. For the first time since 2000, “logistics costs are exceeding 10% of GDP,” says Elaine Purie, director of the Employ Florida Banner Center for Logistics and Distribution in Lake City.

Purie says transport costs are likely to increase in Florida, due to changing environmental regulations, a dynamic global economy and national security measures.

Besides the actual physical challenges of keeping goods and services flowing, Purie says one of the biggest hurdles for business is the supply of talented workers. The good news is there are solutions. And they begin with education.

The Logistics Banner Center was launched in 2007 to train the next generation of distributors and suppliers. In the past, students in the industry may have learned basic inventory procedures, basic math skills and — essentially — how to drive a truck. Now, Purie and her staff teach advanced computer skills, commodity control and international economics.

Polk Community College in Winter Haven partners with the Banner Center to provide convenient, tailored programs for logistics and distribution career professionals through its Corporate College Supply Chain Management Institute. SCMI’s programs respond to the new, increasingly global needs of the industry professional who now needs to understand subjects and technology beyond the basics, subjects such as best practices in export, global commerce and project management.

air & Space » 127 public aviation facilities; 18 with scheduled passenger service » Florida airports generate nearly $90 billion annually in economic activity and support more than 1 million jobs. » Florida is host to nearly a third of all commercial space activity worldwide.

Raising Awareness of Industry Needs

Like the PCC Corporate College, organizations across Florida’s workforce development system, from high schools and colleges to companies and industry leaders, have joined the efforts of the Banner Center.

They are also raising awareness of critical industry needs.

As Purie says, “There has historically been little visibility for what business needs for career supply chain planning and management.”

Workforce Florida Inc. President Chris Hart says the Banner Center’s efforts are paying off; filling a critical economic need and providing young workers with engaging education and new opportunities.

“Kids who used to say, ‘Why am I having to learn this, how is this relevant, how am I going to use this?’ can see how it’s transferred into the real world,” says Hart. “Through a class like operations management, students pick up math skills. Then they pick up interest and stay in school.” Hart notes that several U.S. Department of Education studies show that Florida’s career academy model boosts high school retention rates, prevents many students from dropping out and offers students a broader scope of options.

Students can also take advantage of articulation agreements and earn simultaneous college credits and valuable industry certifications.

The CHOICE Institutes of Okaloosa County is a great example of how educational investment can help cultivate workforce value. Since the 2004-05 school year, students earned 25 Federal Aviation Administration certifications and 1,848 Embry-Riddle Aeronautical University college credits — academic achievements that added $3.7 million to the economy.

Florida’s university system is also stepping up to relay talent in logistics and supply chain to the next level. At the Florida Institute of Technology in Melbourne, students can earn advanced degrees in logistics management. The Coggin College of Business at the University of North Florida in Jacksonville boasts a flagship Transportation and Logistics program for students seeking a Bachelor of Business Administration.

Retaining employees and training workers with upgraded skills are also vital to future success.

As president of Schenck Company, a full-service beverage distributor based in central Florida since 1954, Kelley Mossburg realizes that even during difficult economic times, employees have a choice of where to work. “Benefits and pay are important, but a lot goes to culture and relationships with management,” Mossburg says.

Employee retention is a key metric tracked on Schenck’s corporate scorecard. Through its Workplace of Choice program, employee satisfaction is consistently tested. Mossburg says he is always considering how to bring in and retain the best talent. Safety, he says, is a huge deal.

“Our drivers are delivery professionals, too, so they have an occasion to put themselves in harm’s way,” Mossburg says. Because Schenck focuses much training on safety, “It instills in our people that we care. Our folks are healthy and accident-free, happier citizens.”

Rail » 25 major rail terminals » 14 line-haul railroads » 4 terminal or switching companies » 17 bulk transfer facilities

Opportunity on the Horizon

One of the biggest changes that will impact the state’s transportation facilities and infrastructure is happening outside of Florida. With upgrades to the Panama Canal, there will be increased cargo levels coming into the state. This means increased profit opportunities for Florida businesses and facilities that are equipped to handle the work.

The impacts of the $5.25 billion Panama Canal upgrades can be seen now, in advance of the anticipated 2014 completion date. Already, Florida ports and shipping companies are rethinking their deployment patterns and models.

And Florida is not alone. Port communities from Mobile to Savannah are implementing similar policies, and lawmakers in Alabama and Georgia have pledged to fund port expansion projects despite state budget shortfalls.

The Port of Tampa is in a unique position to take advantage of the opportunities. In addition to being Florida’s largest port and the closest to the canal, Tampa Port Director and CEO Richard Wainio has inside knowledge of what to expect. Wainio spent 20 years in various senior management positions with the Panama Canal Authority and was instrumental in strategic planning for its future.

Tampa’s port today hosts nearly 50 million tons of diverse goods each year, from liquid and dry bulk to steel and automobiles. While much of the current cargo serves the central Florida region, the Tampa port is emerging as an important distribution center gateway for Florida and the Southeastern U.S.

Under Wainio’s leadership, the Tampa port has dramatically increased its crane capacity and embarked on a multi-phased approach to expanding its container facilities. The port also offers direct container service from Asia with global connections.

Changes like these could be the catalyst that moves Florida’s logistics and supply chain system toward serving not just in-state consumer markets, but advancing as an international gateway and access point for the American Southeast and Gulf Coast.

Seaports » 70% of Florida’s international commerce moves by water. » Every Florida business is within 90 miles of at least one of 14 deepwater seaports.

Re-Linking the Supply Chain

Freight moving in at new levels through any of Florida’s 14 deepwater seaports must be connected to its destination by road, rail or air. And as states across the Sun Belt and nations across the ocean prepare to compete in a new generation of logistics and supply chain, intermodal connectivity may be the edge that moves Florida forward.

The word “intermodal,” according to the dictionary, has only existed since 1960. In the next 10 years almost everyone will know that intermodal refers to transportation movement via more than one mode or platform — rail, air, sea, road and even space.

In fact, Florida has been leading the way in intermodal infrastructure for years. Cambridge Systematics Principal John Kaliski says that Florida’s approach to intermodal strategy is “viewed as a national model.” Cambridge Systematics has consulted for the Florida Department of Transportation (FDOT) on critical transit initiatives and for mega-region efforts beyond our state’s borders.

Kaliski says it takes proficient workers to make intermodal work, and that’s where the next generation of talent comes in. After that, it takes vision from government and business leaders to put the right kind of training in motion.

FDOT launched the Strategic Intermodal System (SIS) in 2003 as a public-private venture. Florida’s SIS serves as a network of high-priority transportation facilities resources that bolster the movement of freight and people across Florida’s regions and among other states and nations.

Ron Barton, executive director of the Jacksonville Economic Development Commission, considers the Jacksonville area a competitive leader in the state, largely for reasons of intermodal virtuosity. “The intermodal framework is indigenous to our area,” Barton says.
Jacksonville boasts strong proximity to three major interstates: I-10, I-75 and I-95. There is also access to air cargo, three major rail lines and a deepwater seaport, which has earned recognition from international shipping organizations.

Barton believes the Panama Canal expansion will open up out-of-state markets. “Florida is shifting beyond just serving a booming in-state consumer market. Jacksonville, with its multi-modal spokes,” Barton says, “is preparing to serve in a new generation as an international gateway to the Southeast United States, as ports along the West Coast reach capacity.”

“Clearly we have to look at intermodal,” says Joel Hass, CEO of the American Red Cross of Central Florida. “We don’t have the room to build lots of new roads like Texas,” he notes, pointing to plans for a new NAFTA Trans American super freight highway.

Hass has seen how initial obstacles can help build strength. Limited geography and major tropical storm activity have provided unique challenges for Florida, but those challenges taught some useful lessons. “From a disaster perspective,” says Hass, “I don’t know another state that has a better distribution system.”

Focused on a New Space Race

For years, Florida has been the center of American space exploration. But with plans for commercial spaceports springing up from Alabama to Oklahoma to Thailand, a new space race is underway.

Space Florida President Steve Kohler has led a charge to seed commercialized space exploration in Florida. “We are not there yet, but we are consciously recognizing the importance of exploration and the Space Coast.”

A 2008 agreement to designate a commercial launch complex on Florida’s Space Coast signals the potential for high-growth economic clustering and development of commercial space exploration and research. Kohler says, “Everyone understands the need to deepen the supply chain and add to the value proposition.”

With almost 700 high-skilled employees in Ocala, Lockheed Martin relies on critical linkage across the U.S. and Florida. Brian O’Connor, chair of the Ocala/Marion County Economic Development Council and director of Ocala Operations for Lockheed Martin, says his company plans to expand in the community but notes, “The whole supply chain management piece is the largest risk we have in execution.”

“We receive over 1 million parts per month,” O’Connor says. Noting that parts arrive in Ocala from locations coast to coast throughout America, he drives home the point that logistics and supply chain connections are key for Florida’s future success.