This Week in Logistics News (June 28 – July 2, 2010)

Last week was a relatively quiet one for news; this week, it was hard to keep up. Here is what caught our attention:

Oracle reported its fiscal Q4 and 2010 results this week. For the quarter, total revenues were up 39%, new software license revenues were up 14%, software license updates and product support revenues were up 12%, and operating income was up 14%. For fiscal year 2010, total revenues were up 15% and operating income was up 9%. In short, these results are another positive sign that the enterprise software market is on the rebound.

The other welcome news from Oracle this week, especially for its JD Edwards customers, is the integration of Oracle Transportation Management 6.1 with Oracle’s JD Edwards EnterpriseOne 9.0. Oracle has been very successful selling its OTM solution to existing E-Business Suite customers; this integration should help the company cross-sell OTM to its JDE customer base.

If you talk with 3PLs that have cross-border operations, you know that NAFTA trade is hot these days, especially with Mexico. The news release from Bureau of Transportation Statistics (BTS) validates this trend. According to the press release, “Trade using surface transportation between the United States and its [NAFTA] partners was 32.4 percent higher in April 2010 than in April 2009. The 32.4 percent increase is the third consecutive monthly increase of at least 24 percent from the previous year.” However, as is the case with most statistics this year, the picture is a bit less rosy when you compare the numbers to 2008: “Freight value in April 2010 still remained 11.4 percent less than the value in April 2008, two years earlier.”

We know that safety is (or should be) the number one priority for carriers. But how important is safety for shippers? Are shippers willing to pay a premium to work with a carrier that invests in safety? Con-way just invested $5.4 million in safety technologies, part of a $100 million tractor replacement investment. According to the press release:

Under the program, the company has put into service nearly 1,300 new Freightliner Cascadia 2010-model tractors, each equipped with an integrated suite of advanced driver alert and truck control technologies. The suite includes technologies that provide for rollover stability, front collision warning with adaptive cruise control, and lane departure warning. The suite also includes factory-installed in-dash AM/FM/Satellite radio units which replace portable radios and are designed to minimize driver distraction.

The RFID market continues move forward on an evolutionary (not revolutionary, as some had predicted years ago) path towards greater adoption in supply chain and asset management applications. Savi’s announcement this week is another step forward, another sign that the market is maturing. The company is making its suite of RFID hardware and supply chain software tools available to developers who want to leverage them for their own market applications. According to the press release, Savi Developer Tools include:

  • Web Services API (Application Program Interface), which utilizes Savi’s broad portfolio of supply chain software web services to build web-hosted software products.
  • Adaptive Applications, which leverage the functionality of Savi SmartChain® software applications to develop asset management and supply chain management solutions.
  • RFID Hardware Components, which enable developers to embed DASH-7 (ISO-18000-7) products into their own hardware and software products.

Back in December, both Steve Banker and I included cap-and-trade legislation in our supply chain and logistics predictions for 2010. Steve predicted that there would be continued political rhetoric on this topic, while I took a less pessimistic view and predicted that cap-and-trade legislation would follow a similar path as healthcare reform: a lot of backroom deals would occur to get the necessary votes, but the end result would be a much watered-down version of what was on the table at the time. Based on the news this week from Washington, it seems that we were both right. The opening sentence of the Wall Street Journal article says it all: “President Barack Obama and his Democratic allies signaled Tuesday that they were ready to shelve their effort to win an economy-wide cap on carbon emissions and work for a more limited bill.”

But this debate is far from over. About three weeks ago, the U.S. Senate defeated a measure (53 to 47) to stop the EPA from regulating CO2 emissions. Therefore, EPA regulation of CO2 remains the “stick” that will supposedly make some form of cap-and-trade legislation from Congress a more palatable “carrot” for businesses to swallow. In related news, the EPA flexed its muscle this week, overturning a 16-year-old Texas air permitting program the agency says violates the Clean Air Act. According to a Boston Globe article, “The EPA’s decision…will force some 125 refineries and petrochemical plants to invest millions of dollars to get new permits. Many of the plants may also have to invest in updates to comply with federal regulations.”

The ruling by the WTO against Airbus this week is significant. In a nutshell, the WTO concluded that the European Union has provided subsidies to Airbus, which in turn has affected Boeing’s ability to compete in Europe and other markets, including Australia, Brazil, India, and China. The WTO recommended that “the subsidizing Members withdraw the subsidy without delay.”

On the lighter side: For all of you who are married or have significant others, here’s a wonderful article from the Boston Globe by Joan Wickersham about the “nerdy private language” couples develop—i.e., phrases that only make sense to them. Here are some phrases that have special meaning for my wife and me: Tucson bird. Nice nose. How soon is soon?

Post a comment and share some of your nerdy private language.

Have a great holiday weekend!

(Note: Con-way, Oracle, and Savi Technology are ARC clients)