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POPS100 Percent Cargo Inspection: Part Deux Congress apparently didn't read my article of April 7th, 2007 on the practical difficulties of 100 percent cargo inspection called for under House bill HR-1. HR-1 requires 100 percent cargo inspection of all air and ocean cargo. Forget that we don't have the current technology to perform the scanning. Forget that there is no clearly defined mandate for what's to be scanned. Forget that it will take a loooonnnngg while to figure out the union rules on how this will take place. The one concession I can see in the passed bill is that rather than implementing this deal by the end of 2010, it has a 5 year implementation window with the ability of the government to extend the deadline 2 years...
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POPSDHL Investment in Polar Air Clears Hurdle DHL Express has invested 150 million dollars into Polar Air, an all cargo airline subsidiary of Atlas Air Worldwide. The deal gives DHL extensive extra lift capability into a number of markets. DHL's investment represents a 49% stake in the carrier. DHL is number 1 in market share worldwide in international parcel express with as much as a 40 percent market share in Asia. Polar AIr's B747 fleet will augment DHL's own fleet and charters.
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POPSLogistics Talent: Growing your Own
I recently posed a question to my LinkedIn network requesting opinions on which US universities had the top supply chain and logistics programs. The answers I got weren't suprising. Stanford, University of Tennessee, Michigan State and Penn State featured predominantly. The article below from Logistics Management Magazine highlights an increasing desire by senior supply chain managers to grow their own internal talent rather than hire newbies straight out of the academic halls. The University of Michigan has a Master of Supply Chain Management degree that takes seasoned employees from other parts of a business, and combines their manufacturing or engineering backgrounds with an advanced supply chain degree. The thought is that these cross trained employees will bring a faster ROI than younger "supply chain only" employees whose background is only based on university learning. Whats your opinion? Is it better to cross train from inside than hire new grads?
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POPSCrave the Open Road? Theres a job for YOU. There is a crisis in America that gets bigger every day. As the baby boom generation gets older, fewer and fewer workers from that generation are available to drive the trucks that move almost all of the products we consume every day. For that reason, the American Trucking Association is conducting a wide ranging and diverse hunt for new drivers. Lost a job recently to downsizing? Crave getting out of that Dilbert cube you work in? Maybe you are just home from the Middle East and want out of the Army. Trucking could be for you. Supply chain demand is way up, and drivers are hard to find. That means premium opportunity for those who want to try their hand at the open road. The ATA says there are 20,000 openings now for drivers. In 7 years time, in 2014 that figure jumps to over 110,000 jobs.
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POPSWhats Next? McOil? In the quest for alternative fuels, it seems that there will be a new use for rendered animal fats. Tyson Foods, a large food conglomerate with big interests in poultry especially, is working with Conoco Phillips to develop diesel fuel products from rendered animal fats. While acknowledged not to be a major fuel alternative, just think what might happen if a fast food chain like McDonalds started a conversion program similar to this one? A chain of fuel stations entirely supplied with McGas and McOil? I wonder if animal fats can be traded as a commodity?
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POPSOld School Transportation I found this amazing video and just had to share it. It is a compilation of remarkable uses of basic transportation ranging from bicycles to hand carriage. Looking at this, it is easy to see why the US Air Force never successful at shutting down the Ho Chi Minh trail during the Vietnam War, and how such amazing sites as the Great Wall of China got built. Somehow I suspect none of these folks belongs to the Teamsters!
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POPSFedEx Raises LTL Rates The FedEx Freight and FedEx National LTL rate increases announced in March go into effect April 2, 2007. The FedEx entered the LTL market in the US with the acquisition of Watkins Motor Lines in September 2006 and maintains their LTL division as a separate entity under FedEx Freight. The FedEx/Watkins merger along with UPS's acquisition of Overnite Express, is creating a blurring of lines between LTL and parcel industries by offering longer haul, larger shipment sizes with guarantees in service delivery usually reserved for express services. While increasing service levels, both carriers are also likely to try to use increased LTL service reliability as a way to raise rates in what has been a traditionally rate driven market. Both carriers will also continue to try to merge the Express and Parcel markets through bundled contracting and pricing offers.
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POPSSupply Chains in Space! Leave it to the brainiacs at the Massachusetts Institute of Technology (MIT) to think about the provisioning of interplanetary fixed based stations. Engineers at MIT, Olivier de Weck and David Simchi-Levi have created a tool called SpaceNet, which models movement of freight between Earth and stations on the moon. With transit times of up to 9 months on a mission to Mars, supply chain execution in space would be difficult. Perhaps the moon will serve as a staging area for the future! Now how long until FedEx or DHL start advertising interplanetary Express services? When it absolutely positively has to get there...in 10 months!
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POPSAirline Flight Tracking: FBO Web 3D Fboweb.com has announced an implementation their online flight tracking system that integrates with google earth. This allows you to see in near real time, flight activity at major airports such as Atlanta, LAX, New York JFK and Chicago O'Hare.
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POPSS. Carolina and Ga. Governors Propose New Jointly Run Port Big news in the ocean freight business. South Carolina Governor Mark Sanford and Georgia Governor Sonny Perdue announce intention to develop a jointly run port facility in Jasper, SC. Modelled on the Ports of New York and New Jersey, the new port facility would share responsibility and funding on a bi-state basis serving the southeastern US. This is huge news as ocean vessels continue to get larger. Savannah, Georgias primary commercial deep water port, is limited in capacity by Savannah River, on which it sits. The new port would be capable of handling increased capacity container ships and as a green field project, potentially attract co-located commercial distribution centers.
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POPSInbound Logistics: The Indian Logistics Goldmine. Logistics and transportation companies always follow the freight. If sourcing origins change, so do liner vessel routes. Warehousing, forwarding, consolidation and other 3PL services also go where the business is. Behind China, India is the second most important Asian sourcing and manufacturing location. India boasts of a highly competent technical work force, low labor costs and abundance of low cost manufacturing. The key to Indian growth for the long term however will be continued investment in supply chain infrastructure. The article below from Supply and Demand Chain Executive outlines the challenges and opportunities.
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POPSNRF: Container Traffic Starting to Build at Retail Ports The National Retail Federation issued a press release highlighting container traffic growth at major ports used by major US retailers. The NRF's "porttracker" follows activity at the ports of Los Angeles/Long Beach, Oakland, Tacoma and Seattle on the West Coast, and New York/New Jersey, Hampton Roads, Charleston and Savannah on the US East Coast. Container traffic growth for February, typically the lowest volume month for the year, is up 10 percent over February 2006. This years peak season volume should reach crescendo in July, 2007 based on current projections. The National Retail Federation is the largest Retail Trade Association in the world.
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POPSAirbus Posts Record Loss of 572 million Euros Troubles in development and deployment of the A380 continue to impact Airbus and parent company EADS. Cancellations of orders, including all orders for the A380F freighter, by both FedEx and UPS, have forced the European aircraft maker to consider elimination of up to 10,000 jobs as well as spin off of a number of plants throughout Europe.
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POPSWeather affects Rail Traffic in February Snow and Ice in the mid-west and northeastern United States hampered rail operations in February. No surprise as truck traffic and parcel carrier hubs located in Tennessee, Kentucky and Ohio were similarly impacted during the winters worst storms.
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POPS2007 Rate Negotiations: Opportunities Exist in Certain Modes As 2007 rate negotiations continue, shippers are finding more flexibility in rate discussions depending on mode of transport. Parcel carrier rate increases seem to be sticking, along with new fee structures based on dimensional weight. Truckload carriers are more rate competitive based on available capacity. Rail rates continue to increase while air carriers continue to be impacted by the price for fuel. Check out the clip below from Logistics Management magazine for more information.
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POPSThe Truck Driver who Reinvented Shipping Malcolm McLean was a pioneer in ocean transportation. He founded McLean Trucking, then ported that experience into founding Sea-Land Service Company, then sold that to take over United States Lines. A great man who revolutionized a business. Without his singular invention, the ocean container, the China Import revolution couldn't have occurred. Wal*Mart would still be a sleepy general store in Arkansas.
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POPSUSPS: Genius at Work This is news from the Bizarro World. The US Postal Service has decided to fix long waits in line at the local post office by..removing the clocks. The theory is people won't know how long they waited, therefore it won't seem so long. Thats our government at work folks. I guess postal workers haven't heard of watches, or mobile phones or PDA's with chronometers. I wonder what the government did with those 37000 clocks? I bet they gave them to the IRS. Check this clipmark to find out.
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POPSChina is the Market... Investment in Chinese supply chain infrastructure continues rapid expansion with DHL announcing a new multi-million dollar investment and FedEx spending 400 mil to buy out their general agent DTW. Walmart meanwhile buys a China hypermart chain with 89 locations. China is the market..no longer just the export factory location.
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POPSFedEx acquires balance of DTW FedEx acquires the remaining 50% of their general agent in China. This does not add domestic capacity, it only changes the ownership to 100% FedEx. Gives them a controlling interest in the international parcel business from China. DTW retains the intra-China business so far as I know.
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POPSTop Supply Chain Opportunities in 2007 Nice article discussing possibilities of manufacturing coming back "onshore" and trade agreements etc. What goes around comes around. Especially if China floats its currency.
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