30Th QUEST for QUALITY AWARDS Simply the Best Page 30
Total Page：16
File Type：pdf, Size：1020Kb
logisticsmgmt.com LTL strategy 54 Getting closer to visibility 58 Growing top-notch supply chain talent 66 August 2013 ® 30th QUEST FOR QUALITY AWARDS Simply the best Page 30 QUARTERLY TRANSPORTATION MARKET UPDATE Ocean: Will the “greening” of fleets trump overcapacity challenges? 75S TONIGHT’S DESSERT DIDN’T START 45 MINUTES AGO. IT STARTED 15 YEARS AGO. Since 1998, Whirlpool Corporation has partnered with Penske Logistics to get their appliances to you. Our network of 11 distribution centers has reduced costs by 14% and now moves over 18 million units annually. Working together, our two proud companies have created one of the worldos most efƂ cient supply chains. Whirlpool makes the appliances. We set the table. penskelogistics.com DEDICATED CONTRACT CARRIAGE / INTEGRATED SOLUTIONS / BULK TRANSPORTATION A B Dedicated Contract Carriage. And Logistics Management. And Warehousing. And more. That’s Integrated Solutions — handled for you by Ruan. And. That’s a word you will hear a lot when you talk to Ruan about create lasting value — regardless of the solutions you choose. Ruan Integrated Solutions. Dedicated Contract Carriage (DCC) and Logistics. provides you the best of both worlds, delivering services designed to Warehouse Management and Subassembly. Supply Chain Optimization guarantee load coverage and manage carriers, mode selection and and Certified Brokerage Services. Integrated Solutions encompasses it all, warehousing. These services are coupled with advanced technology to providing our customers the ideal combination of asset- and non-asset- provide industry-leading supply chain event management and workflow, based solutions that get your products from point A to point B safely rich analytics, quarterly KPI reporting and a sophisticated transportation and efficiently. planning engine. Our customer partnerships are based on trust and integrity, and we use That’s Integrated Solutions — creating the optimal supply chain you need a consultative approach to design efficient supply chain solutions that to be more competitive — handled by Ruan. BULK MOTOR CARRIER TO START TAKING ADVANTAGE OF THE POWER OF “AND”, QUEST FOR QUALITY CALL (866) 782-6669 OR VISIT WWW.RUAN.COM. 2010 2011 2013 Get your daily fix of industry news on logisticsmgmt.com management UPDATE AN EXECUTIVE SUMMARY OF INDUSTRY NEWS UPS sees slight earnings gains. Following per barrel, coupled with summer driving season, an earnings pre-announcement in mid-July, when many supply chain stakeholders are anticipating it lowered its second quarter and full-year earnings prolonged pain at the pump. Shippers have told guidance, UPS said that second quarter revenue Logistics Management (LM) that adjusting budgets increased 1.2 percent annually to $13.51 billion, is only part of the solution when it comes to deal- with operating profit down 2.8 percent at $1.74 ing—and living—with fuel price fluctuation. When billion. Net income—at $1.071 billion—was down asked if they expect to pay higher fuel surcharges 4 percent. “Market conditions and shipper prefer- in the coming months, a recent LM reader study of ences clearly affected our freight forwarding and roughly 420 shippers found that 39.1 percent said international business,” said UPS Chairman and yes they did, 44.1 percent said they did not expect CEO Scott Davis. “Customers around the world to have to pay higher fuel surcharges, with 16.8 continue to put greater emphasis on costs, rather percent stating that they were unsure. than time of transit. We believe this change is cyclical as in the last few quarters there has been Oakland regroups. The Oakland Board of Port a trough in the innovation cycle.” Davis said that Commissioners unanimously approved a litigation demand for new high-tech products traditionally settlement agreement with SSA Terminals, LLC, drives demand for express bulk package airfreight and SSA Terminals (Oakland), LLC (collectively, out of Asia, and he added that some of the modal “SSAT”), one of the port’s major long-term seaport trade-downs may be permanent as more interna- tenants. The settlement involves four of the Port’s tional trade is being conducted regionally and sup- seven marine terminals, and will create operationally ply chains are becoming more efficient. the third largest terminal on the U.S. West Coast. In terms of size and operational efficiencies, this new TIA report says 3PL revenues see Q1 gains. “mega-terminal” will be more in line with competing As a whole, market conditions in the third-party terminals, allowing the port to sustain and attract logistics (3PL) sector appear to be holding up well, more maritime cargo, which currently supports despite the uneven nature of the economy, accord- approximately 40 percent of the 73,000 jobs the ing to the first quarter 2013 TIA 3PL Market Report port generates annually in the region. Meanwhile, by the Transportation Intermediaries Association the port’s new executive director, Chris Lytle, had (TIA). Total revenue in the first quarter for all TIA his first day on the job. Lytle is the former execu- member study participants—at roughly $2.27 bil- tive director of the Port of Long Beach, the second lion—was up 3 percent compared to the first quar- busiest container port in North America. ter of 2012, and total shipments saw a 3.2 percent annual increase. First quarter invoice amount per XPO Logistics set to acquire 3PD. The acqui- shipment—at $1,739—dipped 0.2 percent annually, sition train continues to roll along for non asset- and profit margin—at 13.6 percent—was off by 0.7 based 3PL XPO Logistics, with the most recent percent. According to the report, nearly 98 percent stop being July’s announcement that it plans to of 3PL revenue cited came from truckload, intermo- acquire 3PD Inc., the largest non-asset, third-party dal, or less-than-truckload at 72 percent, 18 per- provider of heavy goods, last-mile logistics in North cent, and 8 percent, respectively, with each of these America. This transaction represents the largest modes seeing annual gains in shipments. financial outlay made by XPO since its Chairman and CEO Brad Jacobs and his firm Jacobs Private Diesel prices heading back up. Through July Equity and a group of investors made a $150 million 23, the average price per gallon for diesel increased commitment into Express-1 Expedited Solutions, a for three straight weeks for a cumulative 8.6 cents. non-asset-based third party logistics transportation These gains erased the 7.3 cent cumulative decline provider, and subsequently re-named the company which occurred over the previous three weeks. XPO Logistics, in mid-2011. “They are a non-asset Citing heighted tension in the Middle East, which 3PL like we are and matching shippers with carri- has seen oil prices shift back to more than $100 ers to get freight moved just like XPO does,” XPO Continued, page 4 WWW.LOGISTICSMGMT.COM AUGUST 2013 | LOGISTICS MANAGEMENT 3 Get your daily fix of industry news on logisticsmgmt.com management UPDATE AN EXECUTIVE SUMMARY OF INDUSTRY NEWS Chairman and CEO Brad Jacobs told LM. “It’s a Asia and Europe around the Cape of Good Hope, major milestone in our strategy, accelerates our with transit times remaining a little longer due to growth rate, and is a strong strategic fit.” their reserves of speed. As calculated last spring, average container vessel speed only has to be Dubai rocks. Construction has started on increased to 22 knots in each direction to avoid the Emirates SkyCargo’s new terminal and supporting loss of time. facilities at Dubai World Central Al Maktoum Inter- national Airport, which is set to become the home Emerging markets chugging along. Only a of its freighter operations beginning May 2014. In few years ago, there was talk of emerging markets addition to the cargo terminal, various facilities and decoupling from the developed economies and infrastructure will be built, including 46 truck docks becoming the locomotives of global growth. Since and 80 truck parking spaces, 12 aircraft stands, 2010, however, the slowdown in growth in some of while additional interface facilities, including east the larger emerging markets (Brazil and India) has and west cross docks, will be built at Dubai Inter- been dramatic and worrisome. Far from offsetting national Airport. The construction company Amana the lackluster growth in the U.S. and recession in Steel Buildings Contracting was awarded the con- Europe, the swoon in emerging markets has wors- tract and recently started with the foundation work ened the global malaise. At 3.6 percentage points for the cargo terminal, with the first phase to be in 2012, the gap between emerging market and completed this December. developed market growth was the narrowest in 10 years. According to IHS Chief Economist Nariman Blast off. With the start this fall of the widening Behravesh, however, the good news is that the fun- and deepening of its 3.5 mile channel, Port Canav- damentals in many mature economies are solid and eral is also pursuing the development of an inland improving, although any significant pickup in growth port near the north end of Brevard County, a region is unlikely before the end of 2013. This delay means that has lost thousands of space-related jobs and the current global growth slump will probably hit its is suffering the economic repercussions. Dedicated nadir this year, before the new locomotives start to barges will carry cargo from Port Canaveral to gain traction. inland transfer points and connect to the Florida East Coast Railway. The project involves reactiva- Fiercer competition. In the not-so-distant tion of a rail spur in Port St. John, located just south past, the great cargo seaports in our global mar- of the city of Titusville.