This Week in Logistics News (October 22-26, 2012)

Last year, Halloween greeted us with a snow and ice storm. This year, it greets us with Hurricane Sandy. This is too much trick and not enough treat for me.

In other news…

CH Robinson, SAP, and UPS all reported third quarter 2012 financial results this week. You can read the press releases for all the details, but here are some highlights:

CH Robinson: Total net revenue increased 2.3 percent from Q3 2011. Truck net revenues (which includes truckload and LTL) increased 2.1 percent; LTL net revenues increased about 11 percent. The company’s average truckload rate per mile to customers was unchanged in Q3 2012 compared to Q3 2011. Net revenues for the company’s Other Logistics Services segment, which includes transportation management services, customs, warehousing, and small parcel, increased 16.6 percent, due primarily to transaction increases in its transportation management and customs net revenues. Meanwhile, net revenues for Air and Intermodal services declined 9.0 and 4.4 percent, respectively.

SAP: Total revenues increased 16 percent in Q3 2012 (10 percent in constant currencies) compared to Q3 2011. Software revenues increased 17 percent (12 percent at constant currencies), while revenues from Cloud, SAP HANA, and Mobile experienced triple-digit growth. “SAP had a strong performance in the Americas and solid double digit growth in APJ…Key industries such as retail, health sciences, manufacturing and energy as well as continued expansion of sales through SAP partners also contributed to the third quarter results.” Including Ariba, SAP now expects full-year 2012 non-IFRS software and software-related service revenue to increase in a range of 10.5% – 12.5% at constant currencies.

UPS: Total revenues declined 0.7 percent in Q3 2012 compared to the same period last year. U.S. Domestic revenue increased $94 million over Q3 2011, driven by a 3.7 percent gain in daily package volume, due in part to rapid e-commerce growth. The International segment produced record Q3 operating profit of $449 million, driven by export package growth, network changes and currency translation. “For the first time in several quarters, Asia exhibited growth in Export package volume…[and] although the rate of growth in Europe has slowed, it remained positive.” Operating profit decreased $15 million in the Supply Chain and Freight segment, “as declines in Forwarding were partially offset by improvement in UPS Freight…The Freight Forwarding unit was pressured by overcapacity in the market, especially out of Asia.”

In other 3PL news, C.H. Robinson Europe BV announced that it has been granted Authorised Economic Operator (AEO) certification by Dutch customs, which officially regards the company as a reliable trade partner. As reported in the press release, “The certificate enables clients of C.H. Robinson Europe BV to benefit from several advantages with regards to Customs procedures such as prior notification for import and export exams, priority treatment in the event of a cargo exam, and fewer physical exams and document reviews.”

Meanwhile, FedEx Freight has enhanced its Canada and Mexico services, “with expanded geographic coverage and upgrades to its shipping tools that assist customers in processing less-than-truckload (LTL) shipments.” The company opened a new service center in Rochester, NY that connects cross-border shipments to and from Toronto and Montreal, and opened two new service centers in Mexico, in Culiacán and Silao. Customers can also now process cross-border LTL shipments to and from Canada and Mexico through FedEx Ship Manager Software, FedEx Ship Manager® Server and FedEx Web Services.

On the technology front, LLamasoft announced that MK Capital and Nike have invested in the company, along with Augment Ventures and First Step Fund. The company also announced that it has established a strategic partnership with Nike to co-develop supply chain solutions that offer both logistics and environmental benefits. Here’s a quote by Hans Van Alebeek, Nike’s Vice President of Global Operations & Technology, from the press release:

“Innovation and sustainability are core to NIKE, Inc.’s operations and this new partnership with LLamasoft represents unique opportunities in both of these areas. Through working with LLamasoft as a customer, we recognized the potential to collaborate on innovative supply chain solutions that offer real time logistics benefits and the potential to positively impact our efforts around carbon reduction.”

Back in February 2008, in “Inconvenient Truths About Green Supply Chain Management,” I wrote that “there’s a limit to what [companies can] accomplish with current ‘green’ initiatives because today’s products, manufacturing processes, and supply chains were not designed with sustainability in mind…we’re trying to fix the environment while keeping the production lines of a fast-growing, global economy running…[with] supply chains that were not designed with sustainability as a criterion.” This partnership between LLamasoft and Nike is the latest example of how companies are addressing sustainability where it matters most: at the design stage, of both products and supply chains.

In related news, “Wal-Mart has given global suppliers five years to comply with its environmental rules or risk being pushed off U.S. shelves,” according to a Reuters article. Here are some additional excerpts from the article:

The standards set in Wal-Mart’s “sustainability index”, which has helped to burnish an image tarnished by criticism from labor groups and local communities, have already been embraced by 500 of the world’s major consumer product makers.

 

The retailer said that by the end of 2017, U.S. Walmart and Sam’s Club stores will get 70 percent of their goods from global suppliers that use the sustainability index.

 

“This will send a clear message to the Walmart supply chain that if you want to grow and partner with us for the long term, you will engage with us on the sustainability index,” Wal-Mart Chief Executive Mike Duke said in a speech in Beijing.

While there’s been virtually no talk of sustainability in the US presidential campaign, other than brief mentions of renewable energy, it’s clear that many companies in the business community, particularly those that embraced sustainability years ago, continue to move forward with their efforts in this area.

Okay, time to bring in the patio furniture and clean the gutters. Have a great weekend and stay safe!

Song of the Week (as heard in Apple’s new iPod commercial): “Yeah Yeah” by Willy Moon.

(Note: CH Robinson and SAP are Logistics Viewpoints sponsors)

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