A new style of terrorism was on display in New York this past week. No, I’m not talking about Faisal Shahzad’s attempt to blow up an SUV in Times Square. I’m talking about the terror unleashed yesterday by an errant trader on Wall Street who triggered a 1,000 point drop in the stock market with the press of a button (this rumor hasn’t been confirmed yet, but it’s a working theory at the moment). Regardless of who or what triggered the sell-off, the problem was exacerbated by computer-driven, high-frequency trading. Almost $1 trillion in equity value was wiped out in a matter of minutes before the market rebounded and closed “just” 3 percent down for the day.

Who needs crude car bombs when you have smart computers?

In other news this week:

Not surprising, Con-way’s LTL operations were a drag on its overall financial results in Q1 2010, despite a 26.3 percent increase in LTL revenues compared to the same period last year. Menlo Worldwide Logistics, the company’s global logistics and supply chain management operation, was the shining star this quarter. Total revenue increased 12.2 percent, net revenue increased 15.2 percent, and operating income was $12.9 million (including a $2.8 million expense for an acquisition-related write-off), a record for quarterly profit and a 158.5 percent increase from the $5.0 million earned in the first quarter of 2009. “Menlo is benefiting from strong current project activity across its full portfolio of transportation and logistics management services,” said Douglas W. Stotlar, Con-way’s president and CEO. “With the combination of solid contributions from maturing new accounts, a return to growth in transactional volumes from existing customers and good cost controls, Menlo performed well.”

According to the press release, the improvement in Con-way’s net revenue “reflects contributions from warehouse management services as well as transportation management revenue, which due primarily to higher performance-based revenue [emphasis mine], grew by a larger amount than purchased transportation expense.” I plan to follow up with the company to see if I can get more specifics, but this comment certainly supports our research on performance-based outsourcing/vested outsourcing.

Aldata Solution Oyj , which provides retail space and supply chain management solutions that optimize the placement and replenishment of products in the store, acquired Cosmic Solutions Ltd , a UK provider of category management software, for about 3 million GBP. Here is what my colleague Steve Banker had to say: “I think this acquisition is significant based on my working hypothesis that category management and demand management are coming together for some consumer goods companies. I’ve talked to CPG supply chain execs who say their best people start their career in Bentonville and have mixed category management and dynamic replenishment responsibilities. Interestingly, this acquisition is aimed more at CPG than at retail where Aldata is strong.”

As we highlighted in other postings this week, Manhattan Associates held its user conference this week. Its FieldSCOUT announcement caught my attention because it follows in the footsteps of other vendors that are untethering their solutions (see “Do You Have A Mobile Commerce Strategy in Place?” and “Sterling Commerce Unveils Mobile Applications Strategy”). As Eddie Capel, executive vice president, global operations at Manhattan Associates states in the press release, “Having a mobile supply chain strategy just makes good sense if you consider that nearly 75 percent of U.S. workers are now mobile. For supply chain professionals, this means moving functionality out of the office and closer to customers via the hands of the end user.”

A quick aside: I will be presenting a workshop on “Mobile Technologies and Supply Chain” at the upcoming The Logistics & Supply Chain Forum organized by Richmond Events (June 6-8 at The Evergreen Resort and Spa at Stone Mountain, Georgia). Stay tuned for additional writing on this topic after the event.

Have a great weekend!

(Note: Con-way, Manhattan Associates, Descartes, and Sterling Commerce are ARC clients)

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