Inbound Logistics | April 2023


This is far from a done deal, WEF notes. Eight countries—Canada, Denmark (through its administration of Greenland), Finland, Iceland, Norway, Russia, Sweden, and the United States— lay claim to land that lies within the Arctic Circle. SURMOUNTING MULTIPLE CHAENGES Along with the opportunities Alaska presents come real challenges. Top among them, particularly for companies shipping retail and manufactured items, are distance, expense, and the weather. Meeting the challenges of shipping to or through Alaska requires thorough planning, equipment built to withstand harsh weather, a commitment to reliability, and an ability to improvise. “They’re unique challenges, but they’re not insurmountable,” Dahlin says. “You have to understand them.” More than 90% of retail goods sold in Alaska are shipped in from the lower 48 states, Prokop says. The extra shipping distance boosts the costs of many items. On top of this is the challenge of empty backhauls. Container loads of retail items shipped from the Port of Tacoma and unloaded in Alaska will typically be empty on the return trip. “This means that consignors in Alaska have to pay all of the transport costs incurred on the roundtrip,” Prokop adds. Given Alaska’s vast coastline, marine transport has become the “go-to” solution for moving goods into and out of Alaska, McKallor says. Barges serve most of the state, including the many small communities scattered throughout. As in many other areas, labor is a challenge in Alaska. A lack of drivers,

With its vast coastline, Alaska relies on marine transport to move goods into and out of the state. Alaska has more than 6,000 miles of coastline and borders two oceans: the North Pacific and the Arctic. Barges serve most of the state.

Companies are adapting, however. Carlile has been creative in its recruiting efforts, reaching out to potential candidates not only from within the state, but nationally, says Van Treeck. Once drivers are on board, they are trained to navigate the landscape of Alaska safely, she adds. The University of Alaska Anchorage’s undergraduate and graduate supply chain management programs also are a great resource. “They were designed not only to teach the fundamentals, but also to help students understand the unique landscape and challenges facing Alaska,” Van Treeck says. RELYING ON MULTIMODAL TRANSPORTATION As vast as Alaska is, its land connection to the outside world depends primarily on a single two-lane road, McKallor says. The Alaskan Rail System is connected to the broader North American rail system only by barge, and it goes only as far north as Fairbanks. Because of the limited road and rail infrastructure, “with a few exceptions, you need to think of Alaska as a bunch of islands,” McKallor says. So few places are connected by roads or bridges that almost all shipments require multimodal transportation. Within Alaska, only roughly 20% of communities are accessible by the road system. “Any time you move freight,

whether by truck, rail, or air, you run the risk of delays due to mechanical issues and weather or terrain challenges,” says Van Treeck. What’s more, much of the freight that comes into the state is shipped “just in time,” so delays can throw off entire supply chains. “Having limited modes of transportation, compounded with weather challenges, can be highly impactful,” she adds. The weather also impacts the timing and landed cost of shipments into Alaska. Alaskan shoppers typically can tell from bare shelves at retail stores when a vessel has been delayed by a storm. “It does not happen often; but when it does, it is noticeable,” Prokop says. PLA ING FOR CONTINGENCIES Alaska also is home to 70 potentially active volcanoes, and every year, more than 5,000 earthquakes rock the state. “Shippers and carriers have to plan for contingencies in case the weather or topography—or both—decide not to cooperate,” Prokop says. These challenges make Alaska the world’s most challenging logistical laboratory outside of war zones, Prokop says. “If you can manage logistics in Alaska successfully you can do so anywhere else in the world,” he says. Through their commitment, the following companies meet this test day in and day out.

mariners, pilots, mechanics, and equipment operators often boosts costs beyond the rate of ination, McKallor says.

“Shortages of qualied CDL drivers are, and will continue to be, extremely impactful to our business,” says Christen Van Treeck, vice president with Carlile Logistics. Along with an aging workforce and attrition, some drivers are leaving the state for other opportunities and a lower cost of living elsewhere.

38 Inbound Logistics • April 2023

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