This Week in Logistics News (March 19-23, 2012)

Last October I bought three new shovels in anticipation of another cold, snowy winter. The snow and cold never came, and it was 81 degrees here in Boston yesterday. This coming October I will buy a snow blower.

Acquisitions and new software products headline this week’s news.

The bigget acquisition story of the week was not Amazon.com buying Kiva systems; it was UPS buying TNT Express for $6.77 billion, which strengthens the company’s presence in Europe and puts FedEx on the defensive. According to the press release, the combined company will have annual revenues of more than EUR 45 billion ($60 billion), with around 36 percent of the revenues coming from outside the United States, up from 26 percent today at UPS.

There are four main ways logistics service providers look to drive growth: expand globally; introduce new services; target new industries; and penetrate the small and midsize market. UPS’s deal clearly falls in the first category, while you can argue that Amazon’s deal strengthens the company’s fulfillment services to small and midsize businesses.

Wait, Amazon.com is a 3PL? You bet they are! (See “Amazon.com: A Customer-Centric 3PL” and “Amazon and the e-Fulfillement Journey”).

On the technology front, LeanLogistics announced the upcoming release of On-Demand TMS® version 12.1.0. Among the new features and improvements: enhanced multi-modal planning, embedded ocean sailing schedules, booking management as well as online storage of trade documentation, and tools to calculate and report greenhouse gas emissions. This is just another data point in a trend that I first wrote about in April 2009: the footprint of transportation management systems (TMS) continues to expand, with continued emphasis on adding ocean shipping, fleet management, and parcel shipping functionality…as well as vendors entering new geographies and expanding their global presence.

Not too long ago, the general consensus was that “WMS in the cloud” was a far-fetched idea due to concerns about response times and integration with other systems. Today, WMS has joined the ranks of other enterprise software solutions that are being offered in the cloud. The latest entrant is Accellos, which launched its AccellosOne Warehouse Management System (WMS) in a cloud deployment option. According to the press release, key benefits of AccellosOne Cloud WMS include: flexible subscription pricing; technical administration such as back-up, disaster recovery and system availability monitoring; software updates; and standard integration to many accounting and ERP packages including Microsoft Dynamics, Sage, and SAP BusinessOne.

FedEx reported revenue of $10.56 billion for Q3FY12, a 9 percent increase from the same period a year ago. However, the company reduced its forecast for global economic growth from 2.9 percent to 2.3 percent, and plans to idle some aircraft and reduce its workforce as a result.

Supporting FedEx’s forecast is news this week that China’s manufacturing activity shrank for the fifth straight month, while in Europe, “the purchasing managers’ survey, compiled by Markit Economics, slipped to a three-month low of 48.7 in March from 49.3 in February,” as reported in a New York Times article. “In that survey…a reading below 50 indicates a contraction in economic activity. The Markit survey also pointed to a decline in German manufacturing. That is particularly worrisome, because German exports have helped to compensate for sluggishness in Southern Europe as countries like Italy and Spain cut government spending to reduce debt.”

The roller coaster ride continues.

Have a great weekend!

(Note: LeanLogistics and Oracle are ARC clients)