Archive for Mergers-Acquistions

ice-bucket-challenge-fb-user-profile-2I’m sure everyone’s Facebook feed has been jammed with friends and family members (and links to celebrities) taking the ice bucket challenge. For those of you who don’t know what the ice bucket challenge is, I’ll explain. If you are challenged, you have 24 hours to either dump a bucket of ice water on your head, film it, post it, and challenge some friends to do the same, or you are to donate $100 to the ALS Association. For those that complete the ice bucket challenge, a $10 – $25 donation to the ALS Association is recommended. To say that the challenge went viral is an understatement. It swept the social media landscape by storm. As of Thursday, August 21, The ALS Association has received $41.8 million in donations compared to $2.1 million during the same time period last year (July 29 to August 21). I applaud everyone who has accepted the challenge and donated for a great cause.

And now, on to the news.

TMW Systems announces a strategic partnership with 3Gtms.  This partnership includes a significant – but minority – equity investment by TMW Systems parent company, Trimble Navigation Limited.  They get a seat on the board based on this investment.  TMW, a market leader in the fleet management space, will sell the 3Gtms solution into their installed base of asset-based transportation providers.  3Gtms will continue to sell their planning and execution solution to shippers and non-asset based logistics providers.  This partnership was driven by increasing momentum of brokers and carriers seeking to move up the value chain and provide managed transportation services.  Integration between the products has begun and there is one customer with both solutions that will serve as a beta customer for the integration.

At last week’s Oracle Transportation Management Special Interest Group meeting, Oracle announced that beginning in September, customers can purchase a cloud-based offering of their TMS and GTM solutions. This move is in line with Oracle’s investment in cloud-based solutions, and will likely bolster their position in the market. The solutions are all pre-configured, including work flows, user roles, and reports. Oracle is claiming that they can achieve rapid, cost-effective implementations of core OTM / GTM functionality in 8 – 10 weeks with a private cloud solution. While Oracle will still offer its OTM and GTM as on premise, licensed solution, the cloud offering can open a new market of smaller companies for Oracle.

free tradeLast year’s development of a Free Trade Zone in Shanghai has opened the doors for Amazon to try to seize some market share away from local giants Alibaba and JD.com. Amazon will open a new logistics warehouse in the 11 square mile zone. It is a market worth going after; according to data from iresearchchina.com, Amazon has barely 2% of a B2C market that was worth some $75 billion in the first quarter of the year alone. According to Amazon’s senior vice president for International Consumer Business Diego Piacenti, “Amazon must seize this strategic development opportunity. We’re going to have lower shipping charges, faster delivery coming into the free-trade zone, so there are going to be many benefits.”

In other Amazon news, drones are back. After a lot of news coverage and debate, the use of drones for home delivery had slipped into the background for many people. But according to anonymous sources, drone deliveries are close to becoming a reality. However, India, not the United States, will be the launch pad for drones. Sources indicate that Amazon will debut its drone delivery service with trials in Mumbai and Bangalore, cities where it has warehouses. While Amazon itself would not comment, sources say that the drones could be deployed as early as Diwali, which is October 23.

According to latest CIPS Risk Index, global supply chain risk fell to an 18 month low. The Index, which tracks the effect of economic, political and social factors on the security of global supply chains, has fallen from an all-time high of 82.4 in Q3 2013 to 78.1 in Q2 2014.

“Nevertheless, global supply chains still face significant risks. The Ebola outbreak in West Africa, combined with, political unrest in the Ukraine, Iraq and Libya, have the potential to create significant risks to global supply chains. These risks must be monitored and managed and where necessary contingency plans must be developed.” – John Glen, CIPS economist and senior economics lecturer at the Cranfield School of Management.

corner storeTaxi and car service company Uber has launched a test of same-day grocery delivery in Washington, D.C. The service, named Corner Store, allows users to choose from more than 100 products, excluding fresh food, through the Uber app. The exclusion of fresh food is a departure from the norm for tech companies investing in last mile technology, such as Amazon Fresh and Google Express. The key question is how can Uber make this model profitable and sustainable.

That’s all for this week. Enjoy the weekend and the song of the week, The Smashing Pumpkin’s 1979.

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BostonStrongRibbon

This past Tuesday, April 15, marked the one year anniversary of the Boston Marathon bombings. It was a moment that brought shock, terror, sadness, anger, strength, and pride to the city of Boston. The local and national media have done a terrific job of capturing the raw emotion of the events, and the healing process of the last year. I don’t feel it is necessary for me to recount my thoughts and opinions of the tragedy. But, I will ask that we keep all of those affected by this tragedy in our thoughts. I also want to wish all of the runners in Monday’s 118th running of the Boston Marathon good luck and happy running.

And now, on to the news.

Gap Inc. has said that it will expand its omni-channel operations by testing a new “order in-store” capability later this year. This capability will allow online and mobile customers to reserve items in certain Gap and Banana Republic stores. This capability pushes the customer experience forward as it offers “endless aisle” shopping. This move helps to combine the digital and physical world and allows Gap to carry less inventory in stores, as long as the order can be fulfilled quickly from a warehouse or DC.

Zebra Technologies, a provider of bar code printing technology, has agreed to purchase Motorola Solutions Inc.’s business scanners. This deal combines Zebra’s bar-code labels and radio tags with the computers and scanners made by Motorola. This can simplify and streamline a company’s ability to track items through the overall distribution network. Investors were skeptical however, as Zebra’s stock fell 10% after the announcement.

Cargo theft is on the rise. Despite three years of decline in Europe, 2013 saw a rise in cargo theft. Thefts in Europe were up more than 60% last year. This is in direct relation to the rise in organized cargo theft gangs. Though rarely seen in the United States, European cargo vessels are still susceptible to violent heists and hijackings.

While a harsh winter impacted agriculture and crop production, it didn’t impact the Union Pacific Railroad. The railroad announced it delivered 14 percent higher quarterly profit as it hauled more agricultural, industrial and coal shipments. So there is good news for the freight railroad business, while at the same time, the trucking industry is struggling. A driver shortage has been plaguing the industry in recent years, and things are not looking better. The new issue: a shortage of qualified technicians. This shortage means that keeping trucks on the road will be harder than ever, which could seriously impact the future of trucking.

“The trucking industry could face a technician shortage as large as 200,000, say sources, and the Department of Labor predicts the current 1 million jobs in auto, diesel and collision repair industries to grow 17 percent by 2020. However, only about 3,500 diesel and truck techs enter the labor market through schools each year — not nearly enough to keep up with growth and demand.”

That’s the news for this week. Have a great weekend, and enjoy the song of the week: “More than a Feeling” by Boston.

 

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Yesterday morning, I stood at my kitchen window and watched leaves fall from the trees. They floated down, one after another, to the dead grass below, where other leaves had fallen, yesterday and the day before. What made them drop today? I looked for patterns in their flight, but saw none. Each leaf acted alone, unaware of time and place, like me in the quiet house, watching leaves fall from the trees.

In this week’s news…

In 3PL news, XPO Logistics announced that it has acquired Optima Service Solutions, LLC, “a leading non-asset provider of last-mile logistics services for major retailers and manufacturers in the United States” for $26.6 million. This follows the company’s acquisition of 3PD this past July, another provider of heavy goods, last-mile logistics in North America. Here’s an excerpt of what Bradley Jacobs, chairman and CEO of XPO Logistics, said about the Optima acquisition:

It enhances our ability to provide a seamless in-home delivery experience for end customers, particularly with large appliances and electronics. In addition, Optima benefits from the same powerful tailwind as 3PD: the growing inclination of retailers and manufacturers to outsource the last-mile logistics of heavy goods [emphasis mine]. We plan to leverage these synergies, and integrate Optima’s proprietary software with our last-mile technology.

Last-mile logistics is not new, but it’s certainly a segment of the logistics market that is gaining a lot of attention from 3PLs and technology vendors alike. To paraphrase Jacobs, 3PLs and technology vendors are busy setting their sails to capture this strong tailwind.

The wind is also blowing strong in the direction of global expansion. This week, for example, C.H. Robinson announced that it has opened a new office in Basel, Switzerland. Over the past 20 years, the company has built a network of 52 offices with over 1,000 employees throughout Europe.

And HighJump Software announced a new partner in the Middle East, Dubai-based Norq Solutions that provides mobility solutions for warehouse management, field service, retail, and other industries. The company will offer the HighJump® Supply Chain Advantage suite to customers in the region. According to the press release, “HighJump Software currently has 17 international partners on six continents to support its double-digit growth in markets outside of the United States.”

On the technology front, TomTom Business Solutions launched “new road toll reporting functionality for its fleet management platform, providing transport companies with greater cost transparency for all European routes.” Here are some details from the press release:

WEBFLEET truck toll reporting provides a real-time breakdown of the toll costs incurred for each trip, allowing transport companies to better manage expenses and provide customers with transparent invoices.

 

The functionality accounts for all applicable national tolls in France, Germany, Austria and Slovakia. It will also cover the proposed French Ecotaxe, reporting on the CO2 emissions for each trip and estimating the total costs.

In other transportation-related news, UPS announced that UPS Ground, Air and International, and Air Freight rates within and between the U.S., Canada, and Puerto Rico will increase an average net of 4.9 percent. And Cass Information Systems reported that its Cass Truckload Linehaul Index set a new all-time high, “with truckload linehaul rates registering 0.9% higher than in October of last year and 0.7% higher than in September.” The press release goes on to say that “supply and demand in the truckload marketplace remain relatively balanced for now. Capacity continues to shrink slowly, while truck tonnage has been increasing.”

By now, most companies should have their transportation budgets in place for 2014. So, is your transportation budget increasing or decreasing in 2014, and by how much? Take my 5-second QuickPoll and see what others are saying.

Finally, labor tensions continue to simmer at the West Coast ports. This past Monday, “truck drivers from three companies at the Port of Los Angeles and Long Beach began a 36-hour strike…and Port of Oakland truckers have threatened to walk out next week,” according to an article in Cargo Business News. These are just some passing showers; the real storm will come in June 2014, when the current agreement between ILWU workers and the ports expire. I suggest you start planning now, if you haven’t already, for possible disruptions this coming summer.

Have a happy weekend!

Song of the Week: “Let Her Go” by Passenger

Note: C.H. Robinson and HighJump Software are Logistics Viewpoints sponsors.

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“Half the countries in the world have an even number of chickens.” I wrote those words on a sticky note back in college, which I found in a memory box recently. I have no idea what it means, or what I was thinking at the time, but if I went through the trouble of saving the note, it must be important, right?

In more relevant news…

China remains an important focus for supply chain and logistics technology providers, as evidenced by this week’s announcements by Amber Road and Kewill. First, Amber Road announced that it has acquired EasyCargo, “a cloud-based solutions company with a specific focus on a subset of global trade management called China Trade Management, or CTM.” Here are some details from the press release:

EasyCargo’s CTM solution provides extensive automation to support the Chinese government’s regulations for an import regime called Processing Trade.

 

Processing Trade affects companies that import materials and components into China and use those materials and components to manufacture finished goods for export to foreign markets. When properly administered, Processing Trade transactions are exempt from import duties and value-added-taxes on export.

 

Because Processing Trade can reduce product costs by 25 percent or more, qualifying goods for the program has become increasingly popular. Goods qualifying for the Processing Trade program now account for more than 30 percent of all Chinese imports.

Meanwhile, Kewill and CarrierWeb announced that they are collaborating to develop the Transportation Management System (TMS) market in China. According to the press release, the companies plan “to penetrate the China TMS market aggressively by offering a wider range of mobile-enabled solutions to empower customers with real-time, anywhere, anytime access to updates and monitoring to drive greater efficiency and productivity across their logistics and transportation operations.”

Penetrating the China market has been a long journey for software vendors, with varying degrees of success. I remember when I visited China in 2005 and I met with the CEO of a leading logistics service provider. When I asked him how he planned to scale his business in the face of growing demand, he replied, without hesitation,“We’ll just add more people.” In other words, at the time, adding people was the fastest, cheapest way for Chinese companies to scale their operations, not investing in technology. Today, with labor rates significantly higher and weaker economic growth, investing in technology is becoming the smarter choice.

More evidence that Supply Chain Operating Networks are on the rise: Accellos and SPS Commerce announced that they have partnered “to deliver a fully integrated, turnkey supply chain management solution for the Microsoft Dynamics® GP market.” According to the press release, the enterprise cloud service enables “suppliers to seamlessly connect with more than 50,000 supply chain partners including retailers, distributors, vendors and logistics providers through a single connection from their Microsoft Dynamics® GP system to SPS’s Universal Network.” Here’s a customer testimonial from the press release:

“SOG needed to integrate every trading partner in our supply chain with our Microsoft Dynamics® GP system to support our substantial growth,” said Nando Zucchi, Vice President of Sales & Marketing, SOG Specialty Knives & Tools. “With SPS and Accellos, we seamlessly automated our trading relationships with major drop-ship and traditional retailers including Amazon.com, Costco.com, Dick’s Sporting Goods, Wal-Mart and others within a few short weeks. This holiday season we will automate 1,750 transactions each week, saving our staff more than 60 hours of data entry every week. We are delighted by the solution and expertise provided by SPS and Accellos.”

In other technology news, Oracle has released Oracle E-Business Suite 12.2, which includes several supply chain management enhancements. Oracle Warehouse Management, for example, now has “streamlined mobile user interfaces, enhanced managerial workbenches, improved catch-weight functionality and better extensibility supports greater fulfillment flexibility.”

And finally, add Tesla to the list of companies working on self-driving cars. Here are some excerpts from the Financial Times article:

“We should be able to do 90 per cent of miles driven within three years,” [said Elon Musk, Tesla’s CEO]. Mr Musk would not reveal further details of Tesla’s autonomy project, but said it was “internal development” rather than technology being supplied by another company. “It’s not speculation,” he said.

 

[Mr. Musk said] that Tesla was working on a plan that would allow drivers to turn on a form of “auto-pilot” in most situations that would allow the vehicle to take over control.

The future keeps coming faster and faster.

Have a happy weekend!

Song of the Week: “You & I” by Crystal Fighters

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This was a relatively quiet week for news, and I suspect many of you are taking off early today to enjoy the long holiday weekend, which unofficially marks the end of summer. So, without delay, here is the news that caught my attention this week:

Qualcomm is selling its Omnitracs subsidiary to Vista Equity Partners for $800 million in cash. Here is a quote by Derek Aberle, executive vice president and group president at Qualcomm:

“In the late 1980’s, Qualcomm pioneered the use of commercial vehicle telematics with the introduction of the first mobile information system for transportation and logistics. As one of Qualcomm’s earliest businesses, Omintracs has maintained a leadership position within the industry for 25 years. Today, the opportunity for fleet management and telematics is evolving rapidly, and we believe Omnitracs is well positioned to continue its leadership position as a stand-alone entity.”

The opportunity for fleet management and telematics is certainly evolving rapidly, but the competitive landscape and scope of solutions are very different today than in the late 80s, especially as GPS-enabled smartphones and other devices have become nearly ubiquitous. In the early days, Omnitracs owned the top end of the market, but everybody else was left on the sidelines because the technology was simply too expensive to deploy. Today, there is a much broader spectrum of solutions available in the market, from the simple and affordable to the most sophisticated and costly.

In other technology news, Kewill announced the release of mobile applications for its Kewill Logistics software. According to the press release:

The iOS and Android applications allow drivers to instantly log in to their company’s Kewill Logistics operating system, retrieve a list of trips to be made, and send back the status of each stage of the trip directly from standard touch-screen smartphones or tablets. This helps logistics organizations easily communicate with drivers, provide instructions in real-time and keep customers informed on shipment progress, without investing in separate software or hardware. Furthermore, it extends the reach of the Logistics operation to 3rd party transport providers by allowing them to connect without having to be on the LSP’s networks, systems or investing in additional hardware.

Meanwhile, LLamasoft announced a partnership to offer ALK’s PC*MILER routing, mileage and mapping software solution to its customers. According to the press release, “The partnership with ALK provides LLamasoft Supply Chain Guru and LLamasoft Transportation Guru customers an industry-recognized means to accurately calculate distance and transit times for all global regions, as well as determine geocoding and detailed road routes.”

Finally, according to the the Bureau of Transportation Statistics, $93.5 billion of freight moved in June 2013 between the United States and its NAFTA partners, Canada and Mexico. This is a 0.8 percent decline from June 2012. The value of freight moved by all modes decreased in June 2013 compared to the previous year, except for rail, which increased 0.7 percent. Overall for the year, the value of freight moved between the U.S. and its NAFTA partners is up 1.1 percent — much lower than the 2011-2012 year-to-date increase of 7.7 percent.

Monthly_US_NAFTA_TradeFlow_June2013

In short, trade between the U.S. and its NAFTA partners has flatlined over the past 12 months. Cause for concern?

And with that, have a safe and happy weekend!

Song of the Week: “A Question of Time” by Depeche Mode

Note: LLamasoft is a Logistics Viewpoints sponsor.

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