Air cargo profits take off - Article from Logistics Management

Air cargo profits take off

While the world’s airlines are posting an impressive revenue rebound, air cargo analysts claim that volatility caused by too little or too much capacity in the market has resulted in wide swings in rates and overall carrier performance.

By Karen E. Thuermer, Contributing Editor
November 10, 2010

While the height of the global recession in 2008-2009 saw the airline industry facing unprecedented declines, the dramatic upturn that began in the 4th Quarter of 2009—driven by shipper needs to restock depleted inventory—only draws more attention to the air freight market’s volatility.

At first glance, the news appears positive for the carriers. International Air Transport Association (IATA) projects that for 2010, global demand for both passenger and cargo service will expand by 11 percent.

IATA forecasts 2010 yields for cargo to grow 7.9 percent, sharply higher than the 4.5 percent previously projected. As of September, IATA now expects the airline industry worldwide to generate net profits of $8.9 billion in 2010, up from its previous forecast of $2.5 billion. Certainly, current airline revenue figures are impressive. In the United States alone, Delta Airlines posted a $467 million second quarter 2010 profit, part of the cumulative $1.45 billion profit reported by the top nine U.S. passenger airlines for that period—and a dramatic turnaround from their net loss of $556 million a year ago. However, the IATA maintains that this recovery is not sustainable and only reflects a post recession rebound; in the meantime, the organization does commend the industry for managing its assets with tight capacity over the past 12 months.

Any way you slice it, it’s time for a reality check. The IATA warns that even with this year’s improvement, yields are still 8 percent below the pre-crisis levels of 2008. In addition, doubts linger about how long this cyclical upturn will last. “This year is as good as it gets,” says Giovanni Bisignani, IATA director general and CEO. “It will be the peak of the cycle and 2011 will be a much tougher year.” Bisignani’s reasoning for the slow down in the air is directly related to the forces that have kept the current rebound rather tepid: government stimulus monies are ending; new jobs haven’t been created; and consumer confidence remains low. “Even if it is sustainable, the profit margins are so razor thin that even increasing profits 3.5 times only generates a 1.6 percent margin,” he adds. This is below the 2.5 percent margin of the previous cycle peak in 2007 and far below what it would take just to cover the industry’s capital costs.“The bounce that we saw this year was to restock inventories,” Bisignani adds. “Now consumer spending needs to support demand.”

Click here to download PDF article

Air cargo profits take off - Article from Logistics Management

Landstar / Business Value Logistics Provide Supply Chain Management Service to Global EMS Market

Landstar Supply Chain Solutions and Business Value Logistics announce their new Supply Chain Management Venture.  The relationship is formed to introduce the new Landstar Supply Chain Solutions Business to the Electronic Manufacturing Services market.  The A3i Integration subsidiary of Landstar Supply Chain Solutions is providing the Oracle based TMS and GTM solution in a Software as a Service format.  For more information  visit the Business Value Logistics Blog .

Accenture wins major energy supply chain contract

The energy convergence program is designed to incorporate DLA's energy supply chain business into its enterprise resource planning architecture, which Accenture introduced in 2000 via the business systems modernization contract.

By SCMR Staff
September 12, 2010

The U.S. Defense Logistics Agency (DLA) awarded Accenture a four-year, $73 million contract to integrate DLA’s energy supply chain into its enterprise business system (EBS) program. The energy convergence program is designed to incorporate DLA’s energy supply chain business into its enterprise resource planning (ERP) architecture, which Accenture introduced in 2000 via the business systems modernization (BSM) contract.



Under BSM, Accenture developed a SAP-based ERP architecture, replaced two of DLA’s major legacy systems, and integrated seven of DLA’s supply chains. In 2007, Accenture began work on EBS, bringing more efficient, effective and reliable supply chain support to the U.S. military services. Energy, which includes all fuel commodities and related business processes, is the eighth and final component of


“Bringing energy into the EBS environment is DLA’s final step in achieving a leading-edge logistics system. We look forward to helping DLA and DESC continue providing for America’s armed forces through an efficient, reliable and speedy supply chain that meets the ever-changing needs of DLA’s customers,” said Lisa Mascolo, managing director, Accenture’s U.S. federal practice.


Working with both DLA EBS personnel and Defense Energy Support Center (DESC) fuels managers, the Accenture team will integrate a client-specific oil solution to meet DESC requirements. Accenture’s solution will streamline operations, integrate financial activities and reduce systems support cost. Additionally, it will provide DLA with total asset visibility and reduce customer wait times – a critical feature for military personnel worldwide. When the energy integration is complete, DLA will have added more than $18 billion in traceable items to its fully integrated logistics supply chain.

DLA provides 100 percent of food, fuel, medical supplies, clothing/textiles, construction and equipment to U.S. service men and women in 126 nations. The agency averages 54,000 requisitions and 8,000 contracts per day, and manages 520,000 shipments annually. EBS has enabled DLA to re-direct shipments in-flight, all within one system with real-time monitoring of the processes and transactions.

Story from ThomasNet Industrial Market Trends

This message was sent to you by Royce Dugan.

How Many Suppliers are in the Global Supply Chain? Anecdotal evidence that a significant number of suppliers have "gone bust" over the past year abounds. How many are left? New research suggests much fewer than just two years ago.Procurement departments continue to wrestle with maintaining supplier viability. In the U.K. alone, there has been a 47 percent increase in the number of public-sector suppliers that have collapsed in the first half of 2010 over the same period in 2009. According to research from accountancy firm Wilkins Kennedy this week, 168 businesses in health, social services, education and defense collapsed in the first six months of this year, up from 114 in the first half of last year.

Throughout the entire global supply chain, just how many suppliers remain?

"The [...] overall number of relevant and highly used suppliers is significantly smaller than many believed," according to Mike Anguiano, chairman of CVM Solutions, a provider of supplier management solutions.

New findings of a multi-year analysis of suppliers to Fortune 1000 companies, conducted by CVM, indicate that there are approximately 4.9 million unique suppliers in use by Fortune 1000 companies. Of these, only 309,790 (6 percent) were used by two or more companies in 2009. That is 15 percent less than the 366,356 in 2008.

The study, announced this month, also shows that the number of suppliers is decreasing at a faster pace in the first half of 2010 than previous years, although the full scope of the decline will not be evident until the end of this year.

As the number of highly used suppliers has continued to decline since 2008, the remaining suppliers may struggle to support increasing customer demand throughout the coming years, the findings suggest.

The study's data further highlights other declines in the supplier base. For example, the number of unique supplier families dropped from 93,038 in 2008 to 62,976 in 2009, while the number of small and diverse businesses dropped from 1.15 million to 851,699 during the same period. These figures were based on the total population of common suppliers.

CVM points to continued challenges for small and diverse businesses. "Fortune 1000 spending with small and diverse businesses is under pressure, as the number of these suppliers continues to decline," the study says.

While the overall number of suppliers is trending downward, CVM also noticed that, despite the disappearance of certain suppliers, new ones are being added.

"This trend leads us to believe that there is a Darwinian effect occurring in the supply chain as Fortune 1000 companies cut weaker suppliers and replace them with stronger ones," Anguiano said in an announcement of the findings.

Ultimately, supplier consolidation continues to increase, as evidenced by the smaller number of unique supplier corporate families. According to CVM, the two key reasons for this trend are that smaller independent suppliers are being discontinued or going out of business and mergers are reducing the number of parent companies as larger firms acquire smaller suppliers.

Last year, companies were advised to monitor their suppliers' financial health more closely than usual. This effort should continue today, according to CVM.

"The worldwide economy continues to struggle, resulting in ongoing shrinkage in the overall number of suppliers," CVM adds. "As this trend continues, Fortune 1000 companies must be diligent in managing their suppliers."

Related

Spotting a Troubled Supplier

Auto Part Suppliers Rebound as Vehicle Sales Recover

Resources

CVM Solutions Sees Darwinian Effect in Fortune 1000 Supplier Base

CVM Solutions, Aug. 10, 2010

Public Sector Suppliers Suffer Surge in Insolvencies as Government Cuts Take Hold

Wilkins Kennedy, Aug. 23, 2010

Read the full article here:

Posted via email from landstar-whitestone-logistics's posterous

Port Tracker report calls for 15 percent annual volume increase and a new peak month - Article from Logistics Management

Port Tracker report calls for 15 percent annual volume increase and a new peak month - Article from Logistics Management
By Jeff Berman, Group News Editor


August 06, 2010

Following last month’s report which noted import cargo volumes at U.S.-based retail container ports would begin to decline in the coming months, the most recent Port Tracker report by the National Retail Federation and Hackett Associates notes that 2010 volume is pegged to hit 14.5 million containers for a 15 percent annual increase.



July volumes are expected to rise 1.38 million TEU, or 25 percent, and August volumes are expected to rise 14 percent year-over-year at 1.32 million TEU, according to the report.



Port Tracker indicated that U.S. ports handled 1.32 million TEU (Twenty-foot Equivalent Units) in June, which is the latest month for which data is available, for a 4 percent gain from May and a 30 percent year-over-year gain. This marks the eighth straight month to show a year-over-year improvement after December 2009 snapped a 28-month streak of declining volumes through November 2009.



This year began with sequential gains in December and January, followed by a decline in February. March volumes—came in at 1.07 million TEU (Twenty-foot Equivalent Units), which was up 7 percent from February’s 1.01 million TEU and 12 percent year-over-year. April volumes at 1.15 million TEU—were up 7 percent from March and 16 percent year-over-year. And May hit 1.25 million TEU followed by June’s 1.32 million TEU.



The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, New York/New Jersey, Hampton Roads, Charleston, and Savannah.



The report’s authors said that the large double-digit increases in June and July can be attributed to backlogs that accumulated due to a lack of shipping capacity brought on by ship owners removing capacity during the recession, followed by them taking their time bringing them back online when economic activity picked up.



They added that many retailers may actually be transporting more merchandise earlier in the year to avoid further bottlenecks, explaining that this could lead to July becoming the peak shipping month in 2010 as opposed to October, which is more common.



“Shippers and importers have sort of moved ahead of the market by buying early partly out of fear that there was not going to be enough capacity later on, and it seems that they have gotten a head start,” said Ben Hackett, president of Hackett Associates, in an interview. “This is what really drove the May-July figures.



Hackett added that he believes the container shortage is close to an end, with carriers putting vessels back into service that are charged with bringing back empty containers from Europe and North America. And the amount of empty containers moving out of U.S. ports is higher through the first six months of 2010 than it was for all of 2009, according to Port Tracker.



And with various economic indicators taking steps backwards in recent weeks, Hackett pointed out that consumer confidence appears to be moving in lockstep with that trend, as current levels—since June—are in line with August 2009.



Even though the Port Tracker report maintains that July may turn out to be the peak shipping month of the year, Hackett noted that does not mean there will not be growth in the coming months.



In fact, year-over-year projected growth rates are still in double-digits, with July and August projected to hit 1.38 million TEU (25 percent increase) and 1.32 million TEU (14 percent increase, respectively. September is expected to hit 1.32 million TEU (16 percent increase, and October is slated for 1.31 million TEU (10 percent increase. November and December are projected to hit 1.19 million TEU (9 percent increase) and 1.12 million TEU (2 percent increase), respectively.



“We aren’t back to where we were two years ago and consumers aren’t convinced that the recession is over quite yet, but 2010 is clearly going to finish better than last year,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “In the meantime, retailers are monitoring demand very closely and hoping to see increases in employment and other areas that will boost consumer confidence. Cargo numbers this summer are showing unusually high percentage increases, but that appears to be an indication of shortages in shipping capacity earlier in the year rather than sales expectations.”

Logistics Management - July 2010 - Page 10-11

via logisticsmgm-pwf.texterity.com

Transportation cost predicted to increase accross all modes. Supply Chain Management solutions will be the buzz words for the next few years.

Posted via email from landstar-whitestone-logistics's posterous

Supply Chain Management: Surge in U.S. chip sales confirms forecast - Article from Supply Chain Management Review

Supply Chain Management: Surge in U.S. chip sales confirms forecast

By Patrick Burnson, Executive Editor

July 06, 2010

The Semiconductor Industry Association (SIA) reported today that worldwide sales of semiconductors in May were $24.7 billion, a sequential increase of 4.5 percent from April when sales were $23.6 billion and a year-on-year increase of 47.6 percent from May 2009 when sales were $16.7 billion. As expected, the year-on-year growth rate declined slightly from the 50.4 percent reported in April. All monthly sales numbers represent a three-month moving average.

“Global sales of semiconductors in May reached a new high and remain on pace to reach the SIA forecast of 28.4 percent growth to $290.5 billion in 2010,” said SIA President George Scalise.  “Chip sales have been buoyed by strength in sales of personal computers, cell phones, corporate information technology, industrial applications, and autos. Unit sales of personal computers are now expected to grow by 20 percent this year and cell phone unit sales are predicted to be up 10 to 12 percent over 2009 levels.

“Emerging markets, including China and India, are fueling sales of computation and communications products,” Scalise continued. “The automotive market is also slowly recovering after several years of weak sales. Demand from the corporate information technology and industrial sectors that had pushed out replacement cycles during the global economic recession is beginning to come back.”

SIA once again noted that the industry year-on-year and sequential growth rates are likely to continue to slow during the second half of 2010. “Recent chip sales have shown robust demand, but the year-on-year growth rates also underscore the very depressed market conditions of the first half of 2009. Going forward, the year-on-year growth comparisons will reflect the industry recovery that gained momentum in the second half of last year.

“Growing concerns about issues such as government debt, declining consumer confidence, and pressures on government spending do not appear to have affected worldwide semiconductor sales to date, but given the semiconductor industry’s growing sensitivity to macroeconomic conditions, these issues bear watching in the second half of 2010,” Scalise concluded.

About the Author

Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at pburnson@ehpub.com

via scmr.com

Posted via email from landstar-whitestone-logistics's posterous

What Shippers Need to Know About Comprehensive Safety Analysis

 

CSA2010 will have a significant effect on all motor carriers & operators

Please take the time to learn more about CSA 2010 at:

 

csa2010.fmcsa.dot.gov/

 

Or to take the Online Course please visit:

http://elearn.landstar.com/login/index.php

 

The Federal Motor Carrier Safety Administration has rolled out CSA 2010 is to create a more efficient and effective way to monitor and levy enforcement against carriers of all sizes.

 

Beginning in 2010, ALL roadside violations (not just out of service violations) will be assessed against the carrier and operator.

 

Violations received will be placed into 6 categories that have been shown to cause crashes. These categories will be monitored on a federal and state level. If a specific category exceeds a predetermined threshold sanctions will be initiated against the carrier and driver to include fines, inability to transport hazardous materials, and ultimately (in the future) declaring the carrier unfit.

Violations a carrier receives will be assessed against the carrier for 24 months. Violations an operator receives at a roadside inspection will follow that operator for 36 months, regardless of which carrier the operator was with when the violation was received. Roadside performance becomes a part of the carrier's "report card" and the operator's "report card". CSA 2010 is scheduled for initial implementation November 30, 2010, with full implementation in 2011.

 

CSA 2010 will directly affect every interstate motor carrier

 

How can Shippers help?

Make sure cargo weight is correctly distributed (Violation = 21 CSA points)

Make sure sealed loads are properly blocked & braced (Violation = 36 CSA points)

Make sure
cargo weight is correctly distributed (Violation = 21 CSA points)

Make sure sealed loads are properly blocked & braced (Violation = 36 CSA points)

Make sure operator is able to load/unload in a timely manner (Violation = 21 CSA points) Hazardous Material Paperwork/Placards/Labels are compliant (Violation = 3 CSA points)

Li & Fung says China low-cost era over

Li & Fung says China low-cost era over


Speaking at the Reuters Consumer and Retail Summit on Wednesday, President and Executive Director Bruce Rockowitz said China was still a dominant and unique player in the whole supply chain despite everything that was happening in the country, including growing costs.

"We believe that over the next few years there is not going to be a radical change in where people source from," he said, adding that other countries did not have and would never have the same scale as China.

Li & Fung, which this year expects to export $8 billion worth of goods from China and $1 billion of goods from Vietnam, said China would continue to be its biggest sourcing country, while Vietnam would be the second-largest.

"China is still a very dominant and unique player in the whole supply chain," Rockowitz said.

He said structural problems restricted India from becoming as dominant as China, while Bangladesh, Indonesia, and Vietnam would grow dramatically.

Li & Fung would switch to sourcing from China's cheaper interior as infrastructure had improved with high-speed railways linking remote areas and major Chinese cities, he said.

"Over the next few years, I think still 50 percent of our production will be based in China. I don't think it will change dramatically at all, it may go up or down 1 or 2 percentage points, but I think China is still the dominate supplier of the world," he said.

On the potential of China's consumer market, Rockowitz said: "It has not developed national retailing yet" as the top 100 retailers accounted for only 10 percent of total domestic retail.

LOW-COST ERA OVER

The last 20 years had been a deflationary environment for costs of goods and was unique because China added so much production very quickly to the world, depressing global prices of consumer goods, Rockowitz said.

"Now what we and the industry are facing is that the party is over," he said. "Basically China has a lot of the same issues that all developing countries have when they become developed."

"What you are moving into is an era for higher prices," he said, adding that the Foxconn effect was the "natural evolution" of a country developing and part of "a greater movement of prices going up", including commodities prices and labour costs.

"The ultimate answer to all of this is consumer goods prices are going to get higher. On the other hand, retailers will have a hard time passing that on to consumers," he said.

U.S. BUSINESS TRENDING UP

The exporter, which supplies retailers such as Wal-Mart Inc (WMT.N) and Target (TGT.N), said it expected its U.S. business to trend up and did not see a double-dip in the U.S. economy as it had already emerged from recession.

Li & Fung gave a positive view for growth in 2010, helped by a strong recovery in the United States, which accounts for about 65 percent of its business and was expected to remain steady to slightly higher in the years ahead.

"If you look at the optimism and confidence of our customer base, its a complete change in a positive direction from last year, and in the last three to four months ... its been incrementally better every month," he said.

Commenting on areas that would see strong growth opportunities, Rockowitz said: "All areas have pretty big opportunities, including sourcing".

"For our sourcing business, growth is pretty established now for the next three to five years. Other businesses, like our beauty business, will be in a high growth position and are likely to grow much faster."

With $1 billion war chest for mergers and acquisitions, Li & Fung is aiming to expand its onshore businesses in the U.S. and Europe.

Li & Fung would look at acquiring footwear-, and health and beauty-related assets in Europe and in the U.S. and may consider acquiring food-related assets in future, Rockowitz said.

"This year will not disappoint shareholders at all from that point of view," he said, adding the company would announce its half-year results on Aug. 12 and would have other announcements to make at the same time.

To view full article:

http://www.supplychains.com/en/art/3732/

Global economics: IMF forecasts leadership role for Asian nations - Article from Supply Chain Management Review

Global economics: IMF forecasts leadership role for Asian nations - Article from Supply Chain Management Review

Ocean cargo/global logistics: FMC Scrutinizes Carrier Rates and Capacity

By Patrick Burnson, Executive Editor
June 01, 2010
As the Federal Maritime Commission ramps up its investigation of ocean carrier price-fixing, it is also keeping a vigilant watch on capacity and equipment shortages.
In a speech given before the Virginia Maritime Association last month, FMC commissioner Michael Khouri noted that U.S. exporters of agricultural products are particularly exercised about the impact of capacity limitation, equipment unavailability and rate increases on their ability to compete internationally.

“The capacity, equipment availability and rate increase issues and their impact on U.S. shippers are of great concern to the FMC,” said Khouri. “Last March, the Commissioners voted to initiate a Non-Adjudicatory Fact Finding Investigation into the current conditions concerning vessel and equipment availability in the U.S. export and import liner trades.”

Meanwhile, Khouri and his colleagues are concentrating on rate inflation too.

“Recent reports of increases in annual transpacific contract rates have heightened shipper concerns that these rate hikes are facilitated by carriers using, first, their legal authority to discuss voluntary general rate guidelines with, second, discussions to agree on capacity restriction,” he said. “The first discussion would be legal under the Shipping Act. The second discussions — if they occurred — would be outside of the Shipping Act purview and would therefore be a violation of the Sherman Act.”
While the FMC’s Fact Finding is not focused on the vessel operator’s antitrust immunity, the Commission is mindful of these concerns and plans to closely monitor the carriers’ collective activities. If there is any indication that capacity issues and higher freight rates are credibly linked to any improper use of antitrust immunity by foreign-flag or U.S. flag liner carriers, the Commission will take action, said Khouri. He said shippers may also see renewed attention by Congress and the Administration.

Green logistics/trucking news: President Obama and trucking industry agree on new fuel standards - Article from Logistics Management

Green logistics/trucking news: President Obama and trucking industry agree on new fuel standards - Article from Logistics Management

Green logistics/trucking news: President Obama and trucking industry agree on new fuel standards
By John D. Schulz, Contributing Editor
May 25, 2010
A fully loaded 80,000-pound tractor-trailer gets perhaps five miles per gallon of costly diesel fuel. If the truck is properly maintained. Going downhill. With a tailwind. Maybe.

President Barack Obama wants to change that. And, somewhat surprisingly, the American trucking industry largely agrees.

In a Rose Garden ceremony on May 21 with a handful of top U.S. trucking industry and heavy truck manufacturers on hand, President Obama signed a presidential memorandum that for the first time would set mileage and pollution limits for big trucks. The rules are set to take effect with the 2014 model year.

Although heavy trucks comprise just 4 percent of vehicles, they account for perhaps as much as 21 percent of air pollution from mobile sources. Heavy trucks consume 16 percent to 22 percent of this nation’s fuel, or about 54 billion gallons of fuel annually. When diesel reached its peak in 2008, the U.S. trucking industry had a fuel tab that exceeded $150 billion. Although this year’s figure cannot be determined precisely, the tab will approach that again.

After labor and equipment, fuel is the third-highest cost for a motor carrier. The average truckload carrier spends about 12 to 14 percent of its revenue on fuel, with the average LTL carrier spending perhaps 6 percent (The difference is because of the longer lengths of haul of a TL carrier, typically over 1,000 miles).

With the White House under pressure from environmentalists after the catastrophic BP oil spill in the Gulf of Mexico, the president chose to go the executive order route on truck mileage standards. That was an end-run around Congress, which could have been expected to dither for years (if not decades) on the issue. Instead, the presidential memorandum directs the U.S. Department of Transportation and the Environmental Protection Agency to develop national standards for fuel economy and greenhouse gas emissions for heavy- and medium-duty trucks.

“The nation that leads in the clean energy economy will lead the global economy,” Obama declared on May 18. “I want America to be that nation.”

Although a Class 8 truck is cleaner now that it has ever been, the nation’s 7 million commercial trucks are hardly pristine. According to the EPA, commercial trucks account for 21 percent of all greenhouse gas emissions in the transport sector even though they are roughly 4 percent of all vehicles.

“This is a small but commendable step,” Michael Levi, an energy and climate change expert with the Council of Foreign Relations, told the New York Times. “The oil spill can help focus people’s attention, but it will take something else to close the deal.”

That “something else” could be the surprising support of the organized trucking lobby. For an industry that fought deregulation, anti-lock brakes and other initiatives when they were first proposed, the trucking industry seems unusually sanguine and even supportive of the president’s proposal.

Hours after the president’s announcement where he was flanked by top executives of the trucking industry and its suppliers, the American Trucking Associations issued a press release trumpeting the announcement that the President “effectively endorses the ATA Sustainability Task Force recommendation” of 2008 that called for national fuel economy standards for trucks to reduce greenhouse gas emissions.

ATA Chairman Tommy Hodges, who also is chairman of Titan Transfer, Shelbyville, Tenn., attended the Rose Garden ceremony along with the heads of Daimler Trucks North America, Volvo North American Trucks, Cummins and Navistar International.

The trucking industry is determined “to be at the front of the fuel economy issue,” Hodges said. He said ATA would have “significant input” on the final rule to develop what the industry hopes will be beneficial and affordable fuel efficiency standards

SaaS and Outsourced TMS Strategies

The trend is up for Software as a Service and Outsourced TMS Strategies according to data from a recent Aberdeen Group White paper. With 69% of their respondents stating that they prefer to seek assistance through consulting on "best practice implementation".

We can break down the graph into three distinct groups:

1. Thought Leadership(69%) – Companies prefer to seek assistance on thought leadership with 69% considering consulting on "best practice implementation"
2. Optimization (40% range) – Companies prefer to seek assistance beginning with planning, shipment monitoring and problem resolution, and freight audit and settlement assistance
3. Execution (30% range) – Assistance in managed services for backhaul, inter-company coordinators, transportation execution and procurement / RFO management

The numbers of companies exploring release of control over execution-side capabilities is on the upswing. The aversions of the past to releasing control of execution-related areas is beginning to subside as SaaS hosted sites, B2B data exchange platforms and providers become more robust and secure, and 3PL options for managed systems and execution become more commonplace and expand their service offerings.
Source: Aberdeen Group

ISM: Manufacturing jumps, inventories leap up

The Institute for Supply Management's latest monthly report shows another month of growth, fueled in part by an unusually big leap up in inventory levels.

Sean Murphy -- Supply Chain Management Review, 4/1/2010

A surge in inventories fueled a high growth rate in the manufacturing sector in March, ending the first quarter with a bang, according to the latest monthly report from the Institute for Supply Management (ISM).



According to Norbert Ore, chair of ISM's Manufacturing Business Survey Committee. The index the ISM uses to measure the sector, or PMI, hit 59.6 percent, up 3.1 points from February. This marks eight straight months of increase for the PMI, Ore said, placing the sector's overall health well into "growth" territory. Ore also said the current growth rate is the fastest since 2004.



Ore said the current PMI is impressive, considering the same index registered at 40.4, in contracting territory, at this time last year.



"That's a remarkable story of what's been happening over the past year," Ore said.



In addition, similar indices in Europe and other parts of the world also indicate growth, a sign, Ore said, that the recovery isn't just happening here at home.



"We have basically a reasonably good recovery in global manufacturing going," he said.



Ore said he expected to see the PMI going up, since the New Orders and Production indices got into the 60s in March, but what really surprised him, he said, was the Inventories index. After a 46-month period of liquidation, Ore said the index made a "most unusual" leap upward in March, going up 8 points to 55.3 percent.



"I think it's an indication that we really hit bottom in inventories," Ore said.



Not all the news was positive, but even the bad news, Ore said, wasn't all bad. Prices went up as much as inventories in March, rising eight points to 75 percent. Ore's report said that prices have remained above 50 percent, indicating growth, for the past nine months.



Still, Ore said the numbers are misleading, and not an indication of pending inflation. Many of the goods which have gone up in price the most, he said, were metals.



"I don't think it's a problem yet," he said.



The employment index dropped by a single point to 55.1 percent. Ore called that "noise in the data," and said it didn't mean that employment was about to take a dive. The index, he said, went up 6 points between January and February, and still remains in "growth" territory, despite losing a point in March.

Non-Manufacturing keeps on growing, but employment still lags behind

The Institute for Supply Management (ISM)'s February report on the non-manufacturing sector promises more growth in the future, but the real proof will be when employment begins to grow again.
Sean Murphy -- Supply Chain Management Review, 3/3/2010

Non-Manufacturing keeps on growing, but employment still lags behind:

Trucking news: ATA reports January tonnage is up 5.7 percent year-over-year

The trucking industry has long been the barometer for real econimic data. For one ton of cargo to move someone really placed an order and purchased sometinig. It usually takes 6 months of good tonnage reports to hear the economy is back on track. This report reflects positive year over year results.

Trucking news: ATA reports January tonnage is up 5.7 percent year-over-year: "ARLINGTON, Va.-At a time when freight volumes remain low, the American Tr..."

Report: Companies Going Green, and Expecting Suppliers to Follow Suit

Not only are corporations getting on the green bandwagon, but they are beginning to demand the same from their suppliers, to the point of cutting loose any suppliers that don't have carbon management plans of their own, according to a new report from the non-profit Carbon Disclosure Project and consultant firm A. T. Kearney.

http://www.scmr.com/

Report: Companies Going Green, and Expecting Suppliers to Follow Suit:

"If your company acts as a supplier to larger corporate clients, you'd better be prepared to discuss sustainability and environmental business practices, because you can bet your clients will want to.That's the message of the results of a new survey conducted by the Carbon Disclosure Project (CDP), a nonprofit organization that collects climate change data from the corporate world. The CDP conducted the survey with the help of global management consulting firm A. T. Kearney, which released the results this week. The survey contacted 44 of the CDP's member companies, and the responses from these companies show a strong interest in carbon footprinting and management. According to the report, 63 percent of the companies have "a formal, documented corporate climate change strategy." Even the remaining 37 percent, according to the report, have "general guidelines" in place, and 90 percent of the member companies have plans in place to reduce carbon emissions. "

Freight forwarders brace for change

In an otherwise troubled economy, some U.S. shippers are heartened by the fact that the weak dollar has meant more revenue return on exports. Domestic freight forwarders should be happy, too; but in the global arena the fight for middleman “market share” is more heated than ever.
By Patrick Burnson, Executive Editor -- Logistics Management, 11/1/2009

According to Global Freight Forwarding 2009, the recent report compiled by London-based Transport Intelligence Ltd. (Ti), this dynamic sector “is in the eye of a recessionary storm.” In fact, industry analysts who’ve examined market growth rates from 2008 and the first half of 2009 note that since the middle of last year there has been a massive reduction in demand for all forwarding services.
“The magnitude of the fall suggests that the sector is undergoing a systemic change,” says Ti analyst John Manners-Bell. Furthermore, notes Manners-Bell, the market environment for freight forwarders is changing quickly, not only in terms of geography and type of business, but also by the competitive position of industry players.

Freight forwarders brace for change: "According to Global Freight Forwarding 2009, the recent report compiled..."

The link above will take you to the article published in Logistics Management in November of 2009. The article is a proof statement for the Landstar Business Model. Landstar has operated in a Non Asset Based environment since its inception. The company has remained profitabe through the tough business climate of 2008 and 2009. Visit www.whitestonelogistics.com for an introduction to Landstar.

Logistics Quarterly Magazine - Volume 15, Issue 4, 2009 - THE TOP 40 3PLs 2009

A survey of North American 3PLs in August show 3PLs’ gross revenues were down over 12 percent. Seventy-two percent of the companies said gross revenues were down for the year. Twenty-four percent said their revenues were up. Net revenues were reported as down by 5.9 percent. Here’s an overview of 2009 and where 3PLs are forecast to develop in the future.
By Richard Armstrong
3PL MARKET SEGMENTS VARY SIGNIFICANTLY. Value-added warehousing (contract logistics) revenues declined by 2.8 percent. Indeed, some well-known VAWD 3PLs are reporting increased revenues for the year. GENCO’s business is up over 10 percent for the year. Chicago-based DSC is up seven percent. Companies with a heavy VAWD presence in automotive logistics have fared worse than most VAWDs.

Companies in the transportation management segments have uniformly seen reductions in revenue. Domestic transportation managers (including freight brokers) reported gross revenues down by nearly 13 percent. International transportation management (including freight forwarding) is down 16 percent. Especially hard hit has been air freight where volumes are running 20 to 25 percent less. Bucking the trend has been C.H. Robinson. CHR is expected to have a net revenue increase of three percent this year with a slight increase in net income. CHR dominates North American domestic transportation management with more than 20 percent of total revenue and 40 percent of EBIT.
Expeditors International, the leading freight forwarder in North America, reported gross revenues down 35 percent for the first six months of 2009. Net revenues were down 14 percent and net income was down by 18 percent. Peter Rose, Chairman of Expeditors has made a point of saying that no employees had been laid off. Salaries were down by just over 10 percent. Many top layer Expeditors’ personnel have compensation packages heavily loaded to bonuses. Much of the salary reduction has come from a drop in those bonuses.
Dedicated contract carriage has dropped by 15 percent for 2009 compared to 2008. Forecasts for industry leader J.B. Hunt are for 2009 DCC revenues to be down 17 percent.
Results by industry verticals indicate improvement in the second quarter over the first quarter. Automotive logistics improved to negative 18.5 percent in Q2 from negative 37.5 percent in the first quarter. These numbers reflect the collapse of GM and Chrysler as well as the reduced sales of other automakers. Michigan and Ontario and several of their “old line” 3PL operations have been hit particularly hard.
Automotive vertical leaders Penske Logistics and Ryder SCS both experienced large drops in revenue. Ryder SCS’s gross and net revenues were down by over 25 percent for the first half of the year.
Estimates are that Penske and Ryder’s reduced volumes will hold for the year. Food and beverage, as expected, has not been affected significantly. People gotta eat. Switching to generic brands doesn’t reduce the volumes transported and stored.
Retail and hi-tech have not shown any significant improvement through the first eight months. Most industry watchers expect volume improvements through the second half of 2009 but no significant rise in retail volumes for a normal consumer Christmas rush.
When asked how they expected their revenues to do for the 2009 fiscal year, the 3PL responses were primarily negative. The averages were for gross revenues to be down 8.1 percent and net revenues to be down 2.6 percent versus 2008.
With regard to fiscal year 2009, most 3PLs are ready to say, “I am glad that’s over.”

The Big Get Better
A small group of global supply chain managers (GSM) continue to expand their size and scale advantages, particularly in information technologybased solutions. For example, CEVA now has more than one dozen standardized global supply chain solutions. DHL’s Global Customer Solutions and Kuehne + Nagel’s Lead Logistics Solutions have developed along the same lines. Panalpina’s Panlogic Suite is a high powered tool for GSM. All of these 3PLs having increasing name brand recognition in search of the industry leader UPS SCS. Typically 4PL/LLP solutions designed by the major 3PLs cover trans-global order and inventory management from factories in Asia to customers in Europe and North America. Usually, supply chain design and management as practiced by the GSM will include control towers whose life blood is EDI and email messages covering transportation events, cross-docking, customs issues and warehouse management. That is, more supply chains are being managed by 4PLs who never see the freight.
Because of their size and scale development, the major 3PLs are increasingly more capable of being the sole lead logistics providers for medium size companies with less than $5 billion in revenue, the 4PL for Fortune 500 companies, or the LLP for a division of a Fortune 500 company. Often company divisions are structured on a continental basis. LLPs may vary by continent with LLP/3PL roles reversed in North America, Europe and Asia.
The biggest story of the year among GSM is the “carve out” purchase of IBM’s in-house supply chain management activities. The purchase price was $423 million. Seven hundred fifty IBM employees transferred to Geodis, the new 4PL. Geodis is a large French 3PL with $7 billion in turnover. It is owned by SNCF, the French railway which is owned by the government. Geodis now manages IBM’s $1.4 million logistics spend. Geodis in North America operates as a non-asset player and 4PL. As a result, ironies of coopertition result.
In July, Geodis issued a press release that DHL and Apple Express, in partnership acquired the warehouse logistics handling of the Geodis (IBM) service parts operations. Nineteen parts inventory locations are now being managed by Apple. DHL is managing two distribution center locations in Markham. The deal is multi-year and the transfer took place on October 3. Geodis employees were outsourced to Apple and DHL. The outsourcing from inception to completion took 18 months.
We expect outsourcing of major logistics operations to increase over the next few years as more companies fall behind the expanded capabilities of GSM.
Another major shift in the North American market has been the redesign of Ryder’s SCS. John Williford, president, led a significant expansion in Canada through the purchases of CRSA Logistics and Transpacific Container Terminal. Williford also led Ryder’s exit from Europe and South America. An expanded Asia base is in the works with plans to be more involved in Asia-North America retail supply chains.
Ryder will have significant established competition in the Asia-North America markets. Expeditors is the leading air and ocean forwarder and customs broker in this lane. Also there are a host of Chinese competitors, especially in ocean forwarding, who are interested in expanding to the United States. They are interested in buying American companies and controlling purchase order management.
What’s Next?
Economic recovery in North America should continue throughout 2010. By year end, 3PL activity should be close to 2008 levels.
Outsourcing to 3PLs should proceed at two to three times the increase in GDP. Watch for more big company “carve outs” like the IBM/Geodis deal.
Global supply chain solutions can be expected to become more frequent. The top 10 3PLs will grow stronger with these scale-based solutions. Smaller companies will find it increasingly hard to compete.
Security modifications should become a more accepted practice by year end. Perhaps technology will bring back quicker border crossings between Canada, the United States and Mexico.

via logisticsquarterly.com

Posted via web from landstar-whitestone-logistics's posterous

Landstar Honors 101 As Million Mile Safe Drivers - Truckinginfo.com

Landstar Systems has placed safety in its mission statement since the formation of the business model. The core belief that operating a Safe Transport company will create a true profitable opportunity for all stakeholders in the business. This belief permeates the entire organization and has paid the profitable dividends that were expected.

The link below gives the verification of the belief in Safety for Landstar. They congratulate and reward this years group of safe drivers, on their way to becomming one of Landstar's Roadstar's! This years awards go to 101 "BCO's" (Business Capacity Owner Operators) that have driven 109,000,000 SAFE MILES.

Congratulations to Landstar and their Roadstars!

Landstar Honors 101 As Million Mile Safe Drivers - Truckinginfo.com

CSA 2010 Is a ‘Game Changer’ | Transport Topics Online | Trucking, Freight Transportation and Logistics News

CSA 2010 Is a ‘Game Changer’ | Transport Topics Online | Trucking, Freight Transportation and Logistics News

Posted using ShareThis

Week of Feb. 15, 2010 | Transport Topics Online | Trucking, Freight Transportation and Logistics News

Week of Feb. 15, 2010 | Transport Topics Online | Trucking, Freight Transportation and Logistics News

Posted using ShareThis