This Week in Logistics News (November 5-9, 2012)

The US presidential election is finally over. $6 billion (yes, billion) was spent on the presidential campaign to end up where we started: same president, the Republicans in control of the House, the Democrats in control of the Senate, and the country still very divided. It’s hard to see how things will be different this time around when nothing has really changed. As Albert Einstein said, “Insanity is doing the same thing over and over again and expecting different results.” I just hope that Congress and our president will stop the insanity in Washington and take a different path to working together, a more productive and constructive one, for the good of our country. Otherwise, it will be four more years of inaction and finger pointing, four more years of low approval ratings for our elected officials, and four more years of the same insanity.

In other news…

Innovation in logistics doesn’t just happen in computing technology or software. Take the lowly truck trailer for example. Back in July 2010, I wrote about Con-way’s DoubleStack trailers that use a racking system which “allows for the loading of cargoes on two separate, adjustable levels throughout the length of the trailer, accommodating shipments of different dimensions while more fully utilizing the trailer.” This week Walmart Canada unveiled a 60-foot supercube trailer that can hold up to 30 percent more product than a standard 53-foot trailer. The company received permission from the Ministry of Transportation in Ontario to conduct a pilot test with four of these trailers on the road. Here are some excerpts from a Truck News article:

Designed and built in Ontario, the supercube trailer was produced in partnership with Innovative Trailer Design. The tractor is a Freightliner, built in the US but modified in Canada.

 

The extended semi-trailer of up to 60-ft, 6 inches provides about 28% more volume than the existing 53-ft semi-trailer with a floor that is lower…than a typical trailer currently in use.

 

“We’ve always said that sustainability is not a competitive advantage. We’ll share the knowledge and technology put into this truck with anyone who’s interested, just as we’ve shared the knowledge gained from our sustainable fresh food distribution centre in Balzac, Alberta,” said [Andy Ellis, Senior VP, Walmart Supply Chain and Logistics] in a release.

Meanwhile, FedEx has enhanced its SenseAware service by introducing it to new markets (Canada, the United Kingdom, Australia and Singapore) and making it available to other air and ground transportation carriers (Delta Airlines, Southwest Airlines, United Airlines, and certain third-party ground carriers and private fleets). The company also made some application improvements, as outlined in the press release:

  • Route Geo-fences: Customers can now create a geo-fence along the actual route a shipment should follow and set up alerts to notify the customer if the shipment deviates from this pre-established route. This feature is available on ground shipments.
  • Environmental Data Specification: When setting up a journey or creating a template, customers can now choose which environmental data, such as temperature, humidity or barometric pressure, is collected. This ensures that the device only collects data for specific environments requested, thus streamlining the amount of information the customer receives.
  • Nonevent Geo-fence Triggers: Triggers can be set up to alert or notify customers when geo-fence events do not occur as expected by a specified time. This helps customers determine if a package has gotten off pace or off track

On the software front, SAP announced a user interface add-on for its SAP Supplier Relationship Management application that provides “a consumer-like user experience for casual procurement users to create purchase requests from catalogs with little or no training.” Here is an excerpt from the press release:

SAP worked with over 40 customers to develop the more intuitive user experience. The familiar look-and-feel and dynamic Web page features that users enjoy from online shopping and Internet search experiences have been incorporated into their corporate buying experience. Features like type-ahead search terms, browse by category, filtering, detailed product information and ratings enables users to search across internal and external catalogs to quickly find the products and services they need to order.

This is an example of two trends we’ve talked about in the past: enterprise applications are starting to borrow the “look and feel” of consumer applications, including search tools and social media apps, and user interfaces are becoming a competitive differentiator for software vendors.

Another related example is FedEx’s launch of its FedEx® Ship to Friends app this week “that allows people who use Facebook to prepare and pay for a U.S. domestic shipment without ever leaving Facebook.” Because, why would you ever want to leave Facebook?

At a meeting this summer, the topic of driver shortage came up, and a logistics executive said to the group,”This is a problem that has been talked about for many years, for as long as I’ve been in the industry, and it has yet to cause any real, lasting impacts on transportation operations.” There is some truth to his statement. The last time the driver shortage problem had a real impact was during the “capacity crunch” shippers experienced in and around 2004. Then again, increased use of rail and intermodal, better load consolidation and trailer utilization, and of course, the economic downturn have all minimized or negated the driver shortage issue since then.

But the red flag continues to wave. A new paper released by the American Trucking Associations (ATA) concludes “that long-term trends could cause the [driver] shortage to explode in the next decade.” Here are some excerpts from the press release:

“Carriers and fleet executives have begun expressing concern about their ability to identify and hire qualified professional drivers,” ATA Chief Economist Bob Costello said, “and with this report, we tried to identify where the impacts were being felt the most, why the shortage is increasingly worrisome and why it has the potential to get worse.”

 

“ATA estimates the current shortage of drivers to be in the 20,000 to 25,000 range in the for-hire truckload market . . .  on a base of roughly 750,000 trucks,” the report said, adding that if current trends continue, the shortage has the potential to grow to 239,000 over the next decade.

 

“On average, trucking will need to recruit nearly 100,000 new drivers every year to keep up with demand for drivers,” Costello said, “with nearly two-thirds of the need coming from industry growth and retirements.”

Finally, file this news under “A Supply Chain Risk Management Blindside”: After Australian auto parts supplier Autodom shut down two plants in Australia last week, Ford Australia and General Motors Holden raced in to underwrite the company’s $6.5 million debt and prevent their own production lines from shutting down. The Reuters article cites declining demand for locally-produced vehicles as a contributing factor to the automotive industry’s woes in Australia, but as we’ve seen in other cases, I’m sure the OEMs and their “we expect cost cuts every year” approach to supplier relationship management played a role too.

Have a great weekend!

Song of the Week: “We Come Running” by Youngblood Hawke. It’s not often that you see musicians surrounded by sharks in a music video.

(Note: Con-way and SAP are Logistics Viewpoints sponsors)

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