CIVILIAN & PRIVATE INDUSTRY
“In an article entitled “A Logistics Nightmare,” Traffic World chronicled the unexpected shutdown of Ford’s plant in Hapeville, Georgia on August 30-31, 2004. According to the article, shutting down an auto plant can cost $50,000 a minute – you read it right, $50,000 a minute. You do the math, but there are 1440 minutes in a day, for a total cost of $72,000,000 per day! $72,000,000 buys a lot of trucks.It would be nice if the Ford shutdown was an isolated incident: however, in recent weeks, we have learned of other companies whose plants were temporarily shut down due to parts shortages. As we head into the Fourth Quarter, we’re advising shippers to closely analyze their carrier network for adequate capacity.One example of the impact of a “minor” disruption is how the hurricanes in the southeast have impacted the flow of freight in the United States. In the wake of Hurricane Charlie and Frances, and later Ivan, the demand for materials as well as the service disruptions caused by the storms themselves, has made an already tight truck market even tighter. And the fourth quarter is typically the busiest for shipping activity.In this environment there are a couple of things that can help keep your products moving. First, time is of the essence. The more time you have to locate a carrier and move the product, the greater your chances of getting your goods moved at a lower cost. Second, expect to pay more for any unusual service requirements, or moves that tie up a carrier’s equipment. In the wake of the HOS ruling, some shippers thought that they’d be able to revert to practices pre-January, 2004. In fact, drivers and carrier equipment are at a premium and carriers are charging accordingly. Finally, accept the fact that rates are much higher than last year (with fuel, rates are anywhere from 5% to 15% higher depending on geography.)A friend and great logistician told me years ago, that in logistics it’s basically about time, service and cost. In a sellers (carrier) market you can pick two of the three variables. That’s a pretty good rule of thumb for today’s market. We know shippers who have passed on a carrier based on price, only to find that the rate was actually cheaper based on the short lead time.”
Source: Tranzact Technologies
Can $2.9 billion Schneider National become a $12 billion company and the nation’s largest trucking concern? That’s President and CEO Christopher Lofgren’s goal – though the time line is known only to Lofgren. The means will be expanding its many business units and, perhaps acquisitions. A former technology executive with a Ph.D. from Georgia Tech, Lofgren is at the forefront of a changing industry in which trucking companies are aligning their businesses with larger logistics networks, combining strategic vision with attention to detail.
Source: trafficWORLD
Barcode giant Symbol Technologies is making a bid for leadership amount RFID suppliers. The $1.53 billion manufacturer will spend $230 million in cash to acquire Matrics, a maker of RFID readers and tags. The move comes less than two months after Symbol agreed to pay $138 million to shareholders and others to end a federal investigation into its financial reporting procedures.
Source: trafficWORLD
What’s good news for Yellow Roadway isn’t necessarily good for its customers. In this case it’s a pricing environment that points one way – up. A booming economy, tightened capacity and nervous shippers have earned both Yellow and Roadway a 15 percent rise in revenue with each winning new business and extracting healthy rate increases from old accounts . And the rest of the year looks just as good as the beginning to Yellow Roadway chief Bill Zollars.
Source: trafficWORLD
New Terror alerts in New York and Washington put a spotlight on trucks as possible terror weapons. Truckers have ramped up security screening of drivers and their fleets. But trucking companies say the long term impact will be felt most by shippers, who may see goods delayed and costs rise.
Source: trafficWORLD
Virtually ever major publicly held truckload carrier is reporting double-digit income and revenue gains. The list includes Swift Transportation, Land-star System, Werner Enterprise, U.S. Xpress and Smithville Motor Express. J.B. Hunt earlier reported a 79 percent surge in net income.
Source: trafficWORLD
The Capacity Crunch & Today’s Driver Pool
As economic indicators have pointed toward recovery, an increase in demand for truckload services exists today following four years of working within a challenging freight environment. How bad was the “perfect storm” for the trucking industry? Recent studies have shown that approximately 15 percent of truckload capacity has vanished from the North American marketplace. According to one report, our industry has seen nearly 11,900 carrier failures between 2000 and 2003. The majority of these departures have been through bankruptcies of small carriers-unable to meet the demands of increasing fuel costs and soaring insurance premiums as well as additional regulatory requirements. The cost environment has created a shrinking marketplace in which few new players can enter.In an industry where 81 percent of carriers are comprised of fleets with six trucks or less, these departures have greatly contributed to the present capacity crunch. If you go by the six truck average alone, we have seen at least 71,400 trucks leave the market. Now consider this fact: The trucking industry was already in the midst of a severe driver shortage even before this exodus of trucks took place.
Source: U.S. Expressions
FMCSA Asks Court to Leave Current Hours-of Service Rules in Effect
The agency announced it would request that the court stay further action. While ruling on that request, the agency is already moving to correct the court’s concerns. The court allowed the old rules reinstated until 2005.
Source: efleetmgmt
Senate Defeats GPS Amendment
By a 55-34 vote, the Senate has defeated a proposal that would have provided $70 million for a global positioning system for trucks carrying hazardous materials. Senator Charles Schumer, D-NY, proposed the amendment, which would have been part of the homeland security appropriation bill for fiscal year 2005. (LandLineMag.com)
Source: efleetmgmt
Transportation Secretary Mineta Reports Record Seat Belt Usage
A record 80% of Americans wear their safety belts while driving or riding in their vehicles, U.S. Secretary of Transportation Norma Y. Mineta announced. In the past four years, safety belt use has increased steadily from 71% in 2000 to 80% this year. The 80% safety belt usage will save 15,200 lives and $50 billion in economic cost associated with traffic related crashes, injuries and deaths every year (U.S. Department of Transportation.)
Source: efleetmgmt
Big changes are taking place in logistics. The Council of Logistics Management is dropping “logistics” form its name and calling itself the Council of Supply Chain Management Professionals. University degree programs are giving more attention to global supply chain management and less to the nitty gritty of how freight actually gets shipped. These changes reflect a long term transformation that will place new demands on logistics managers and encourage outsourcing of transportation and warehousing management.
Source: trafficWORLD
Relief from rail service crises is proving elusive for shippers and railroads alike. Union Pacific Railroad is pressing for steady improvement in system velocity, terminal dwell time and total car inventory, but admits that its gains have been modest at best. Shippers fear limits on freight volume and lack of rail cars will hurt production, sending ripples throughout the economy. The problem extends beyond UP as the national transport infrastructure struggles under the weight of an unprecedented volume of freight.
Source: trafficWORLD
SHIP AND PORT SECURITY INSPECTIONS IMPLEMENTED
With the implementation of the Maritime Transportation Security Act (“MTSA”) and International Ship and Port Security Code (“ISPS”) the U.S. Coast Guard began inspecting ships arriving at U.S. ports. On the first day, Coast Guard personnel inspected 79 foreign vessels and turned away or ordered six to leave of some 270 that arrived at U.S. ports. Among U.S.-flag ships and port facilities subject to the new rules, the Coast Guard restricted 42 vessels and closed 19 facilities for non-compliance.The initial reports from major foreign ports, such as Hong Kong, indicate that there has been no significant disruption to trade so far.
Source: TransDigest
The scale and sophistication of third-party logistics providers are leading more shippers to outsourcing as a strategic step, not just a means to cut costs. The big concern for many is how to measure the strategic value that 3 PLs say they bring. Shippers say developing a statement of strategic intent is the first step toward better benchmarking.
Source: trafficWORLD
A rising tide doesn’t lift all boats. Overnite Transportation rode the economic recovery to the finest first half in its history, reaping a 56.8 percent net profit gain. The economic improvement did little to help Central Freight Lines, however, as it struggles with expenses from its rapid expansion into the Pacific Northwest. The regional LTL Carrier has lost $3.7 million in the first half.
Source: trafficWORLD