10 Questions...on Globalization for Guy Fox
 

CBAPP Board of Directors member Guy Fox started Global Transportation Services in 1985. Stonepath Logistics bought the company two years ago, and Fox now serves as Stonepath’s executive vice president. Here, he provides some insight on the significance of the Long Beach and Los Angeles ports, the implications of manufacturing overseas, a new logistics program in the works at CBAPP, and what the U.S. needs to do to keep manufacturing jobs here at home.

You describe your job as a “global logistics specialist.” What does that mean?

We do everything from A to Z in the supply chain. We handle shipments of heavy freight from door to door, any place in the world. Footwear, machinery parts, medical equipment, furniture, electronics – we don’t specialize in any particular type of goods, we specialize in handling the process. For one of our customers, that means getting fabric from France to China, where it is then manufactured into garments and then shipped to the U.S. and Canada.

How has the market changed since you started your own logistics company 20 years ago?

The technology and methodology has changed immensely. Before, we used calculators and typewriters, now we just use computers and specially designed software. The other major change is the move to manufacturing offshore where companies can produce their goods for less – it’s a global market, not just domestic anymore.

Since you must work with customs officials all the time, how did 9-11 affect your business?

Basically, we’re doing twice as much work for the same amount of money because of the stricter security measures and ways U.S. Customs changed their processes to ensure the ports – both Long Beach and Los Angeles – remained safe. The primary thing they’re doing is tagging many more container ships to be examined than prior to 9-11. Like so many other industries in the wake of the terrorist attacks, it made us reevaluate our business and forced us to look for ways to be more innovative and to find better ways of doing things.

How important are the ports to this area?

For Los Angeles and Southern California, they are so important. Not only do the deliver the goods that drive so much of the commerce within this region, but they create a huge number of jobs too. And both are expanding tremendously. They’re adding more container terminals, and the container ships themselves are getting huge too – some as big as 12,000 truckloads of goods. Ships that big can’t go through the Panama Canal so the ports are even more important in bringing goods to the U.S. from all over the world.

You’re helping CBAPP develop a global logistics program to help fill that need. How much opportunity is out there for people in this field?

There’s no question in my mind that there is a huge demand for people with these kinds of practical skills. With all the expansion in the ports, our business is having a hard time finding qualified people who understand what we do. So much goes into each step of what we do – we need specialists in logistics, customs clearance, warehousing and distribution, transportation, trucking – every step of the process we handle. We need well trained and taught people who understand computers, geography, mathematics, English, communication, and international business. I know CBAPP wants to develop a program with those principles in mind.

With all the advances in globalization, one of the negative side effects has been companies moving manufacturing outside the U.S. because it’s cheaper. Is it just cheaper labor?

First, it’s cheaper land and property to set up the manufacturing and factories, then it’s a cheaper workforce, and then there’s also been the development of larger container ships that contribute to economies of scale when it comes to shipping.

How rampant is the move to offshore?

It started with wearing apparel, things like footwear and textiles, but it’s moved to a number of different sectors. Automobile companies now run their manufacturing out of Mexico, and I heard Maytag moved some of their manufacturing down there too.

All these companies going offshore mean major cuts in the blue-collar workforce here at home. Isn’t that a factor?

I’m certainly not an advocate of the loss of jobs in the U.S., and I doubt anyone is. We should do something to protect jobs here, but you have to take into consideration that it’s a global market. Companies have to compete and when they pay $1.50 an hour in China versus $25 an hour in Newton, Iowa, that’s a big difference for their bottom line.

What can be done to keep manufacturing jobs here in the U.S.?

I think part of the solution is in the hands of the U.S. Government. Right now, only 10 percent of my business is export, the rest is import. I think we need to stimulate exports by offering export tax credits, subsidies, a well developed network of trade commissioners around the world trying to get foreign companies to buy American goods, and anything else to get a serious American export business underway. There’s also the flip side of that coin – other countries have a lot more regulations on imports than we do. So foreign companies can come here no problem, but we can’t do the same. Again, our government could do something about that by developing agreements with other countries to make an even playing field, so they face the same restrictions here that we face overseas.

That’s your take on the government’s role, but what do you think companies can do themselves?

Everyone used to use the adage, “we are the Cadillac of the industry.” No one uses that anymore. They’d probably say they’re the Ferrari or Mercedes of the industry. What I’m getting at is that with the possible exception of the Japanese, the U.S. has always been known for making higher quality goods that people would pay more for because they were better quality. If American manufacturers can return to that idea by delivering better quality products, that will stimulate American buying behavior.

The opinions expressed here do not necessarily reflect the positions of the College of Business Administration and Public Policy.

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