DispatchDispatch NewsNews The official publication of the California Delivery Association Spring 2014 Past Present Future Untitled-1 1 7/2/2013 1:43:59 PM From The President, JR Dicker Gold Rush Express Delivery California Delivery Association Hello to everyone out there in delivery land. I would like to give you all an update of where we are and where we are heading. CDA Director Mike McBain of Central Courier has resigned from the Board and is enjoying retirement. Mike was a long standing great member, while serving on the Board multiple times and as a past Secretary/Treasurer for the CDA. He was upbeat, outgoing, and always asking the direct questions while also sharing his favorite jokes. His overall contribution to our Association will be greatly and forever missed. Your Board of Directors would like a replacement candidate for Mike’s position. If you or someone you know may be interested in serving the association, please let me know so the Board can consider a possible appointment. There is a lot on the plate for the Board of Directors as our Executive Director is pointing out in this issue. Time goes by so fast, and we as directors are putting in the time, but like Dan is saying, "A lot of energy can get expended but is it producing what is needed?" A good percentage of our members have been on the CDA Board and many have been offi- cers, so I imagine they know what we are going through. This is a critical time in our Association's history and we need to work smart to insure we bring value to our long time and current members, but we must find a way to grow in a changing industry. We have a full agenda for the board, but we ask “what do our members want?” What do you like or not like? How can we attract new members to our Association? We are looking at our association Bylaws for changes that may be useful, and which the membership would then vote on. We also ask, “are membership dues to expensive?” If so, how do we cover our fixed costs? If we were to reduce our revenue, then we may need to make changes to our Executive Director and those responsibilities. If we do, then how will that affect our operations and would others willingly take up some of the slack? Advocacy – what time, efforts, and bills do we lobby for or against? For instance, I have a passion to make sure that reasonable Workers Compensation rates stay in place that are affordable, and to see that there are more carriers that want to do business in California with our class codes. Most importantly how do we grow our membership? In This Issue: Please know that no matter who you are, you are important to Amazon Air - Drone Technology... the association’s well being and your input is valued. We want to hear from members so give me a call at 408-292-7300, or call Logistics Excellence Predictions for 2014 any of the Board listed on page 27. Thank you. Association History NLRB Reissues “Ambush” Election Rule Couriers Expand To Challenge Larger Rivals JR Dicker, CDA President “End Classification Confusion in California” Industry News… BITS & Pieces 10 Top Ways You Can Demonstrate Love... and a whole lot more... www.cadelivery.org California Delivery Association Spring 2014 page 3 Last November, I traveled to Sacramento to meet with some “higher ups” at the EDD for discussion of industry matters and a little relationship building. Rob Hulteng and Damon Ott with Littler Mendelson also were in attendance, and generously provided me with transportation back to the Bay Area. The next day I had a meeting with CDA President, JR Dicker and Bryan Scott, Sec/Treasurer. Both meetings were useful and provided some insight as to what course or courses the CDA may want or need to pursue. After returning to LAX in the dark, I snagged a cab and joined the bustle on PCH Hwy 1. Then as always, at a close major intersec- tion, it is startling to have Southwest flights coming right over your head, at maybe 100’ up in the air to land on the northern LAX runways. Soon another red light stop in Playa Del Rey provided me more time to reflect on what had transpired during this busy two day trip. Here I was looking at a huge, recently built corporate building formerly occupied by Electronic Arts, but now in this corner glass monster is the biggest LA Fitness that I have ever seen. The second story windows must be at least a full two stories in height from the previous “open space” tenant. The extreme lighting inside contrasted quite well with the darkness surrounding the Prius cab, me, and the I.C. taxi driver. What I was witnessing were dozens and dozens of machines, most with people on them, and all in synchronized motion expending tremendous amounts of energy. Whether striding or standing on ellipticals, treadmills, stair climbers, bikes, etc, they were all moving, but other than that…they were going nowhere, just running in place. I likened this display as being similar to what we experience at some times in our lives, whether it be ourselves, your business, government, or maybe even an association. A lot of energy can get expended, but is it producing what is needed? Are our CDA efforts moving the members and association towards the future? Certainly much being done is useful, but is it time for some additional strategic or critical thinking? Perhaps we need more assistance and thought from all members in an effort to recognize our history, consider our mission, and advance to new horizons for the future. During my career I have often used the following: Where are we, Where are we going, Where should we be going. How do we get there? Your Board of Directors will be grappling with these challenges, so please stay tuned and offer your input, suggestions, and thoughts along this journey. Dan Bender, CDA Executive Director www.cadelivery.org Companies form an association for their common needs. While these needs may change or vary, they do not go away. California Delivery Association Spring 2014 page 4 Amazon Air — How Drone Technology Stands to Alter Supply Chain Norms by Joel Johnson of GEP. For product-oriented companies, the last leg of the supply chain is often the most inefficient. Urban streets are clogged with trucks, vans, and motorcycles operating on behalf of companies ranging from logistical giants to local grocery delivery chains. What if there was a solution that offered increased service levels and efficiency along with reduced labor and environmental costs? What compa- nies are best positioned to capitalize on this emerging technology, and how could it impact future business operations? Amazon recently made news when it released the latest product of its next generation R&D lab, Amazon Air. In actuality, Amazon’s CEO, Jeff Bezos, is embracing an emerging delivery solution that has been gaining momentum for the past decade. Unmanned Ae- rial Vehicles, or drones, have gained infamy for their role in executing strikes against terrorists in Afghanistan and Pakistan. Now their commercial utility is anticipated to drastically impact a number of industries while altering some fundamental supply chain practices. While substantial regulatory hurdles may make drone drop-off on your front porch unlikely in the near future, it is worth exploring a few implications of this emerging technology with an emphasis on the role of Amazon. Urban Warehousing Development – As consumer expectations for product deliveries transition from days to minutes, the importance of centralized distribution hubs take on an increasing level of significance. Through a combination of acquisitions and organic growth Amazon has established a strong presence in most major urban areas. These urban networks create an environment in which drones can thrive and will likely prompt other logistical providers to make similar investments. Small Parcel Industry Mix-Up – Given the integral role of distribution to Amazon’s business model, it has long been speculated that the company would either acquire a major logistics provider such as FedEx or UPS or develop its own distribution presence through internal investment. With the advent of drone technology, Amazon could significantly reduce its reliance on small parcel firms for the last leg of delivery, perhaps breaking the UPS/FedEx duopoly that has existed since DHL left the market in 2008. I would argue that Amazon’s leading role in the widespread adoption of drone distribution technology is representative of trend in which a small number of companies progressively encroach into multiple facets of our lives in and out of the office. Such companies include Amazon, Google, and Apple, all of which ini- “prepare themselves for a tially provided consumer-direct produces or services, but have since each established a formi- time when consumers dable presence related to business applications and products. With visionary leaders, heavy expect a 15-minute emphasis on R&D, and vast budgets for acquisitions, they are forcing established players to innovate. For example, Amazon’s investment in drone technology is further complemented by delivery for a spare part” its emerging presence as a MRO supplier via Amazon Supply which could be complemented by the Amazon 3D printing store as 3D manufacturing applications continue to gain momentum. Established MRO industry players such as Grainger and McMaster Carr must now prepare themselves for a time when consumers expect a 15-minute delivery for a spare part. While it may be several decades until “Drone Transport” becomes another logistics pro- curement category alongside ocean freight, truckload, and small parcel, the technology is emerging quickly with clear benefits for the early adopters.