logisticsmgmt.com Includes: • Transportation Services • Third-Party Logistics • Logistics Technology December 2013 ® • Warehouse/Distribution Centers VIRTUAL CONFERENCE2013 Best Practices in Transportation and Logistics Management: Preparing for the New Realities www .logisticsmgmt.com/ 2013_vc_bestpractices NOW ON DEMAND On Time. On Target. No Exceptions. With Premium Logistics® services on six Coverage. Global. continents, we offer world-class shipping Reliability. Door-to-Door. solutions, superior technology, and High Value. High Security. 24/7/365 customer service. Access the world Supply Chain. Made Simple. with confidence and unparalleled visibility. Technology. World Class. ¥0ANTHER%XPEDITED3ERVICES )NCs0ANTHERISAREGISTEREDTRADEMARKOF0ANTHER%XPEDITED3ERVICES )NCs800.685.0657swww.pantherexpedite.com Get your daily fix of industry news on logisticsmgmt.com management UPDATE AN EXECUTIVE SUMMARY OF INDUSTRY NEWS Logistics Management remembers Jack 85 million shipments to move through its global Congdon. Logistics Management regrets to report networks, marking a 13 percent gain over the that John R. “Jack” Congdon, Sr., former vice same period last year. chairman of the board at less-than-truckload carrier Old Dominion Freight Line Inc., has passed away. And don’t forget about the USPS during the Congdon joined ODFL in 1951 and held several holiday season. The United States Postal Service positions during his time there, including senior vice (USPS) also expects another busy holiday shop- president. He also was the founder of Old Dominion ping season, much like the duopoly of UPS and Truck Leasing, a Virginia based corporation primar- FedEx. The USPS said it expects to process 545 ily engaged in the full-service leasing of tractors, million pieces of mail daily throughout this holiday trailers, and other equipment. season, coming in at nearly 15 billion pieces of mail to be delivered between Thanksgiving and New Yield management in the air. The International Year’s Eve. And on the shipping side, it noted that Air Transport Association (IATA) recently called on competitive package volume is also expected to all participants in the air cargo value chain to work increase by approximately 12 percent annually to together towards the common goals of improved roughly 420 million packages during the 2013 holi- quality, increased efficiency through e-freight, and day season. The busiest delivery day for mail will more effective security. Combined, these measures be Wednesday, Dec. 18, and the busiest day for will improve air cargo’s competitiveness in the face packages will be Thursday, Dec. 19, according to of stagnant demand growth and unfavorable market the USPS. developments, added IATA. Air cargo is suffering from a prolonged slump that has seen falls in yields, CSX and GE Transportation to team on LNG- revenues, and market share. Since 2010, world powered locomotive pilot program. The ongo- trade has grown by 12 percent, whereas air cargo ing emergence of the role of natural gas in freight demand growth has been basically flat with only a transportation is making its latest stop on the rails in 2 percent increase. A divergent trend in passenger the form of an agreement between Class I railroad demand, with growth continuing in the historical 5 carrier CSX and GE Transportation. The companies percent to 6 percent range, has complicated the said that they will focus on exploring emissions- situation. cutting and efficiency advancements through the use of Liquefied Natural Gas (LNG) technology for Holiday cheer is expected for UPS and locomotives. Officials from both companies said FedEx. Like in past years, transportation and that a pilot program in the form of field tests would logistics bellwethers FedEx and UPS are calling kick off next year. Among the benefits of LNG- for healthy holiday volumes in December. UPS is powered locomotives, according to CSX and GE, calling for December 16 to be its single busiest are trains being able to travel longer distances with- day of the year, expecting to pick up more than out refueling stops as well as other economic and 34 million packages. And FedEx expects Cyber environmental benefits. Monday, December 2, to be the busiest day in its entire history, calling for more than 22 million Pricey exports. As the peak shipping period shipments to be delivered globally. Officials at approaches in the U.S. export trade to Asia, ship- both companies indicate that increased e-com- ping lines in the Transpacific Stabilization Agree- merce activity by consumers is a major driver in ment (TSA) Westbound section are recommending these figures. With 26 shopping days between minimum rate increases in key commodity catego- Thanksgiving and Christmas, which is six less ries that have seen steady rate erosion in recent days than in 2012, UPS said the 2013 holiday months. TSA Westbound has adopted minimum shopping season will be the most “compressed” guideline increases of $100 per 40-foot container one since 2002. As for FedEx, during the week (FEU) via U.S. West Coast ports, $200 per FEU via of Dec. 1 through Dec. 7, the company’s busiest East and Gulf Coast ports, and $100 per FEU for week of the year, FedEx said it expects more than Continued, page 2 WWW.LOGISTICSMGMT.COM DECEMBER 2013 | LOGISTICS MANAGEMENT 1 Get your daily fix of industry news on logisticsmgmt.com management UPDATE AN EXECUTIVE SUMMARY OF INDUSTRY NEWS intermodal shipments for six commodities (waste with growth in the first half of 2014 expected to paper, metal scrap, plastic scrap and resin, lumber be decent. and logs, hay, and agricultural products) effective no later than Dec. 1. In the case of waste paper, POLA unveils incentive program for ocean lines also adopted guideline minimum rate levels via carriers. In a move geared toward bringing more California ports that may lead to increases above volume to the Port of Los Angeles (POLA) in 2014, the minimum levels. the Los Angeles Board of Harbor Commissioners said last month that it has signed off on an incentive Challenges a-plenty for high-tech program that will reward shipping lines bringing new shippers. According to a survey released by UPS, container business into POLA. Entitled the Ocean the 350 high-tech logistics executives polled in Common Carrier Incentive Program, POLA officials North America, Latin America, Europe, and Asia said that participating ocean carriers will earn $5 said that increased export activity will be a com- per twenty-foot equivalent (TEU) for each incremen- mon theme in the coming years, with 41 percent tal container it ships through the port in calendar of respondents expecting to see exports grow year 2014, with the rate heading up to $15 per TEU faster over the next two years compared to 2013. for all TEU if a carrier’s container volume increases Another key theme of the survey was near-shoring. by 100,000 or more units for the same 12-month Nearly 30 percent of survey respondents said that period. In terms of measuring volume increases, they plan to be more active on the near-shoring port officials explained that the baseline for measur- front—compared to 10 percent in 2010. But even ing volume is the number of containers each carrier with the percentage of those buying into the fact moved through the port in calendar year 2013, with that near-shoring is on the rise, the data observes carriers receiving their incentive in the form of a that challenges remain. “For high-tech companies, lump sum payment in early 2015. near-shoring is clearly on the rise globally,” said UPS high-tech marketing director Ken Rankin. Greener POLA? The Port of Los Angeles’ “The focus on reduced lead times and more construction and maintenance division has customer-centric supply chains rang loud and received International Organization of Standards clear. However, on the flip-side, it’s clear in the (ISO)14001 recertification, an internationally rec- data that near-shoring is not for everybody.” ognized protocol designed to help organizations minimize negative impacts to the environment. Port Tracker report says growth is still in “ISO 14001 recertification is a testament to the the forecast. Activity at U.S.-based retail con- port’s ongoing environmental stewardship and tainer ports continue on a growth path and are leadership,” said Jim Morgan, director of the port’s expected to continue that way through the end construction and maintenance division. “Our highly of the year, according to the most recent edi- integrated environmental management system tion of the Port Tracker report from the National means that care and attention to the environment Retail Federation (NRF) and maritime consul- is now woven into all aspects of the port’s daily tancy Hackett Associates. The 2013 forecast operations and employee activities.” ISO 14001 is now at 16.2 million TEU, which is down from involves the training of personnel in environmental 16.3 million TEU last month. This represents a processes and procedures, monitoring and audit- 2.3 percent increase over 2012’s 15.8 million ing of the port’s environmental performance, and TEU, with the first half of 2013 at 7.8 million annual reporting of data. The Port of Los Angeles TEU up 1.2 percent compared to the first half of is the only port on the West Coast that is ISO 2012. Hackett Associates Founder Ben Hackett 14001 certified, and one of only a handful world- said that this mild annual increase reduction is wide to achieve such status. due in part to the federal government shutdown in October and a fairly high inventory-to-sales CEVA CEO to step down. Marv Schlanger, ratio. He added that the U.S. GDP forecast is CEO of global third-party logistics provider CEVA not expected to be hindered by the shutdown, Continued, page 4 2 LOGISTICS MANAGEMENT | DECEMBER 2013 WWW.LOGISTICSMGMT.COM Hundreds of New Flights.