Behind the Scenes At UPS

Ultimate Factories: UPS, will premier Thursday, June 12 at 9 p.m. on the National Geographic Channel

The hour-long program gives viewers a behind-the-scenes look at the 4.4 million-square-foot sorting facility, which processes an average of 304,000 packages per hour. It also gives insight into Louisville-based UPS Airlines and the UPS Global Operations Center, which provides scheduling and weather forecasting services for the 284-plane operation.

I added this to my Netflix, since I don't have cable.

There are so many good shows on the Discovery Channel right now that deal with economics and the supply chain. I am truly blessed to live in age where television broadcasting has evolved to the point of capturing a micro audience. I mean how many other people are fascinated by the inner workings of UPS or the Ports of Los Angeles / Long Beach?

It Could Be Worse, Right?

Truckers in Europe are striking to protest high fuel prices. They are blocking the highways and boarder crossings. A total shutdown of most goods movement within Spain, and some fear that grocery stores will deplete their stock of food by the middle of the week. Consumers are already beginning to hoard goods in anticipation of the worst.

Amateurs debate tactics, professionals debate logistics

Forbes has an interesting piece on the role logistics has in warfare. Here is a little snippet.

Since the beginning of organized warfare, logistics have been one of the biggest headaches of any commander. Even the best army, without adequate supplies, will quickly collapse. Few people understand or appreciate the problems the logistician has to face. But behind every successful army there have been some great logisticians.
American military logisticians have had to face a complex variety of problems. The 1st Infantry Division, also known as the Big Red One after its distinctive shoulder patch, was established in 1916 and is the U.S. Army's oldest divisional organization. It has served in every major American conflict since World War I. These snapshots of the 1st Infantry Division taken over a century illustrate the typical problems Americans have had to face. One thing is for certain: A good logistician has to adapt to a constantly changing environment.

Here is a list of quotes about logisticians and their role in winning a war. Here are some of my favorites.

Logistics...as vital to military success as daily food is to daily work. - Captain A.T. Mahan, Armaments and Arbitration, 1912

The supreme excellence is not to win a hundred victories. The supreme excellence is to subdue the armies of your enemies without even having to fight them. - Sun Tzu, The Art of War

My logisticians are a humorless lot...they know if my campaign fails, they are the first ones I will slay. - Alexander

The Green Loan: A New Leaf?

Summarized from National Real Estate Investor

With all the talk of "greening" commercial real estate, now there is one more group jumping on the sustainability bandwagon; lenders.

Green loans are special loans for the development of LEED certified buildings. Such loans usually originate with community banks and offer generous loan to value ratios and slightly better interest rates than conventional projects.

From the article:

Green lending is still in its infancy because there are few sustainable multi-tenant buildings, according to Scott Muldavin, executive director of the Green Building Finance Consortium in San Rafael, Calif. “Even as recently as a few months ago, there was only a handful of small banks and no life companies — to my knowledge — that offered green mortgages,” Muldavin says. “In the last three or four months, driven by good borrower customers’ growing participation in sustainable investment and development, many larger banks and insurance companies have started to explore offering green mortgages.”

A challenge for green finance is the ongoing struggle among appraisers and underwriters to understand the value and risk of sustainability, Muldavin says.
Because the appreciation for energy savings and marketing is increasing gradually, lending programs are expanding incrementally as well. “The smaller lenders that have programs and the larger lenders that are planning programs are focusing on relatively incremental steps including preferential review, quarter-point interest rate discounts, longer amortization and similar relatively small changes in return for LEED or EnergyStar certification,” he says.

Real change occurs on the margins; small changes at first until enough momentum is reached and ideas break through a tipping point. Once the standard is set and appraisers start to value in green developments, then these changes become institutionalized.

In the infancy stage of what many people still consider to be a fad, these rules for the green movement are being set and it pays to know how the system is likely to change and what the future is likely to look like.

Airlines To Treat Customers "As Freight"

Because of rising fuel costs, you may be charged by the pound next time you want to fly.

From Reuters:

After U.S. airlines reported combined first-quarter losses of $1.7 billion and crude oil jumped to a record $133.17 a barrel on May 21, almost double from a year earlier, fares based on a passenger's weight may be a logical step, said Robert Mann, head of R.W. Mann & Co., an aviation consultant based in Port Washington, New York.

``If you look at the air-freight business, that's the way they've always done it,'' he said. ``We're getting treated like air freight when we travel by airlines, anyway.''

``Laughter aside, the airlines are just in a desperate situation,'' said David Swierenga, president of consulting firm Aeroecon in Round Rock, Texas, who dismissed weight-based ticket sales and steep price increases as unrealistic.

Since December, eight companies have ceased flying, largely because of fuel costs -- MaxJet Airways Inc., Big Sky Transportation Co., Aloha Airlines Inc., ATA Airlines, Skybus Airlines Inc., Eos Airlines, Silverjet Plc. and the charter- flight operator Champion Air. Air Midwest, a division of Mesa Air Group Inc., is ceasing operations this month.

Cheese Plant For Sale

One of the more interesting listing my guys are working on is a former cheese processing facility in Corona. Here is the website.

The reason why the cheese plant is closing is simple economics.

The supply of milk to make cheese has been severely reduced.

The supply of milk has been reduced because farmers are having a tougher time dealing with the environmental treatment of cow waste. It is not economically feasible to raise cows anymore, at least not here in California.

Plus, land prices have increased dramatically and many cow farmers are selling their land for residential and commercial development. Many of these farmers used to live in Chino, which has been turned into a major industrial warehouse hub. These industrial warehouses are employing more people at higher wages; any jobs that have been lost have been replaced 10-fold.

With the cow pastures, it was fairly easy to find alternative uses. You just have to remediate the soil and then build something else. The land was worth more than any existing buildings.

With the cheese plant, things are more complicated. It is not viable to tear down a multi-million dollar facility and start from scratch. The trouble is finding a user who will benefit from the existing infrastructure and who would also benefit from being in California.

The facility would be ideal for a "green" food manufacturer. Being located in the center of the market would reduce the number of food miles, plus their is an existing co-generation plant on the premises that produces steam and electricity for the facility, reducing carbon emissions.

Putting the right user in place is why the Dairy Farmers of America hired us to sell their property, they knew it would be a challenge and it pays to have great people working for you.

I will let you know who we (or somebody else) sells this building to.

For a walk-through of the plant, here is a good site. It was created by the Golden Cheese Company of California, the previous tenant.

King Kong Attraction Catches Fire At Universal Studios

Driving on the 101 today I noticed a large plume of black smoke in the air. Turns out it was the King Kong attraction at Universal Studios.

Here is the story from Reuters.

The same fire occured in 1990, costing the studio $50 million dollars to rebuild.