Archive for Mergers-Acquistions

EARNS EXXON MOBILEFor many years, “fall back” was a good thing. I could go to the bed at my normal time on Saturday night and enjoy an extra hour of sleep. Sure, it meant that the cold of winter was coming and that it would be dark by 4:30, but for one glorious day, I got to indulge in an extra hour of sleep. Unfortunately, that all changes once you have kids. For some reason, they do not understand the concept of extra sleep. Instead, they are hard wired to get up at the same time they usually do – only it’s now an hour earlier. But they don’t adjust after one day. I’m going on nearly a week of 5 am wake-ups now. At least the time change makes it feel like the winter and holiday seasons are coming, making the influx of Christmas-themed commercials at least a little more palatable.

And now, on to the news.

transplace-logoTransplace, which is owned by Greenbriar Equity Group, has bought Logistics Management Solutions (LMS), which is a third party logistics (3PL) provider. LMS has strong ties to the chemical and industrial manufacturing industries, which will help boost these areas for Transplace. While no financial terms were disclosed, LMS earned a spot on Inc. magazine’s ranking of the 500 fastest-growing private companies in the country.

“Acquiring LMS further supports our commitment and strategic plan to grow Transplace and build a competitive advantage for our company and our customers,” said Transplace CEO Tom Sanderson. “We are pleased to add LMS’s knowledgeable, experienced employees to our workforce. Bringing the LMS team on board allows Transplace to offer more services to its existing customers and to serve an entirely new set of customers, as well as continue to expand our presence in key verticals, such as the chemical industry.”

Since their contract expired back in June, Pacific Coast dockworkers negotiating a new labor agreement have begun a work slowdown in Seattle and Tacoma. The slowdown by members of the International Longshore & Warehouse Union reduced container movement to 10 to 18 per hour from 25 to 35, the Pacific Maritime Association said yesterday. Most ports in Seattle and Tacoma are now experiencing delays, which does not bode well for the upcoming holiday season. While there has been an influx of imports over fears of a looming strike, if a deal is not settled soon, the holiday season, and the fate of many retailers, could be disastrous.

First there was Amazon Prime, with its free two day delivery. Then Amazon rolled out is private fleet of trucks for same day local delivery. Now, Amazon is testing deliveries via taxis in San Francisco and Los Angeles. Amazon is using the taxi-hailing mobile app, Flywheel, to ship parcels via licensed cabs. In its latest test, Amazon summoned cabs through Flywheel to distribution centers, from where they picked up as many as 10 packages bound for the same location at about $5 a package. With drones still facing a lot of scrutiny, maybe switching to taxis will pay off, especially as the holidays approach.

Washington State saw a record-breaking number of cargo thefts in the third quarter of the year along with a new tactics on the part of thieves, according to new report from the logistics security services provider FreightWatch International. There were a total of six incidents in the last 12 months, with four of these happening July through September. In addition, half of the thefts in Washington State during the quarter were multiple trailer thefts — one taking three trailers, and one getting away with four. This made the full truckload theft total nine in the quarter, 29% higher than the total number from 2010 through the second quarter of this year.

teamstersAnd finally, the Teamsters have scored another victory at FedEx, which is their second victory in the last month. Drivers at FedEx Freight’s New Brunswick, N.J., terminal voted last week to join the Teamsters Local 701 with a 66-42 vote, following drivers from the Croydon, Pa., terminal, who voted to join the union Oct. 14. The drivers are seeking job security and improved benefits, according to the Teamsters. After organizing started, FedEx increased wages by 80 cents an hour and scrapped a driver scorecard, the union added. FedEx is “offering pay raises and other improvements at the same time we are organizing, but the workers know that these things can be taken away just as quickly without a legally binding contract,” said Tyson Johnson, director of the Teamsters’ freight division.

That’s it for the news this week. As a nod to all the news from the Pacific Northwest, enjoy the song of the week, which was probably my first mind-blowing music experience, Nirvana’s Smells like Teen Spirit.

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.

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.

 

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.

“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