Monday was a holiday here in the U.S., so this week went by fairly quickly. Here is the news that caught our attention this week:

Descartes, an ARC client, posted record operating results for Q1FY11 (ended April 30, 2010). Revenues were up 22% from $17.4 million in the first quarter of last fiscal year (Q1FY10) and up 13% from $18.9 million in the previous quarter (Q4FY10). The results for this quarter included $2.6 million in revenues from its recent acquisitions of Porthus and Imanet.

Although the first quarter is usually Descartes’ weakest and the company was negatively impacted by currency fluctuations ($500K in the quarter) and the shutdown of European airports due to the volcanic ash problem (resulting in a 6% drop in shipment volume), Descartes still exceeded its plans. Art Mesher, Descartes’ CEO, said that the company’s ability to achieve record operating results “in the face of these types of challenges” demonstrates “the resiliency of our operations.”

This comment raised a question in my head: is a software-as-service business model truly more resilient than a license-based one? Since 9/11 and Katrina, there’s been a lot of discussion about building resilient supply chains (see, for example, Yossi Sheffi’s well-known book “The Resilient Enterprise: Overcoming Vulnerability for a Competitive Advantage”). If someone were to write a book about “The Resilient Software Business Model,” what recommendations and case examples would it contain?

In conjunction with its MRM 2.0 announcement, Descartes held an event this week in Toronto showcasing several customers, including Kraft Foods and DHL Express. I had the opportunity to attend and I’ll share my takeaways next week. But here is the main message that Descartes presented, as Chris Jones, Executive Vice President, Solutions and Services at Descartes stated in the press release:

“The traditional market view has been that route planning and MRM were two separate technologies and markets, with neither technology set designed with the other set in mind. This created two significant problems for customers. First, the architecture of the two technologies sets only allowed for simple, non-real-time integration because route planning solutions were batch-based and MRM solution interfaces used historically-oriented performance data. Second, integration of the technologies was left to the customer, resulting in potentially costly, time-consuming and fragile implementations that had limited value.”

NAFTA trade continues to recover compared to 2009. Trade using surface transportation between the United States and its North American Free Trade Agreement (NAFTA) partners reached $69.9 billion in March 2010, according to the Bureau of Transportation Statistics (BTS). But trade is still below 2008 levels. According to the press release, “The 37.0 percent increase from March 2009 to March 2010 is the largest year-over-year rise on record but freight value in March 2010 still remained 1.2 percent less than the value in March 2008, two years earlier.”

Click to Enlarge

Are container shipping lines colluding on prices? This is what the U.S. Federal Maritime Commission and EU regulators are investigating. According to the WSJ article, “the average price of moving a 40-foot container from one port across an ocean to another port rose to $2,716 in March, up more than 74% from $1,557 a year earlier. The increase is even more dramatic on some routes. For example, on shipments to Europe, the index rate has more than tripled to $3,880 from $1,071.” These sharp price increases seem out of line compared to existing levels of supply and demand.

Back in March, the Federal Maritime Commission initiated a fact finding investigation “to examine current conditions in the U.S. ocean-borne common carrier trades, to gather facts related to vessel capacity and shipping equipment availability for U.S. exports and imports, and to provide the basis for any subsequent action by the Commission.” According to the press release, “The Commission’s Fact Finding Order noted that 2009 was one of the worst years in the fifty-year history of international containerized shipping, during which U.S. export and import volumes and carrier revenues fell precipitously. Recent gains, however, have been accompanied by a number of reports of U.S. exporters and importers having difficulty obtaining liner service and problems with the distribution and availability of shipping containers. The Commission will use the information obtained in this Fact Finding Investigation and recommendations of the Fact Finding Officer to determine its policies with respect to these vessel and equipment capacity-related issues.” An interim report will be issued June 15 and a final report on July 31. Stay tuned.

Have a great weekend!

Share