This Week in Logistics News (October 21-25, 2013)

“Did you come to Denver to plant mango trees?” the taxi driver asked me shortly after we left the airport. He had a thick accent, so I thought I had misunderstood his question. “Excuse me?” I said leaning forward, and so he asked me again, “Did you come to Denver to plant mango trees?”

The taxi driver was originally from the Congo, and his younger brother had come to America too, and he did well for himself. The brother bought a large parcel of land, built a large house on it, and with every child born to him and his wife, he planted a mango tree. “In a few years,” the younger man explained to his brother, “the trees will start to produce fruit, which I will sell and save the money to help pay for my children’s education in the future.”

“In that case, yes, I have come to Denver to plant mango trees,” I told the taxi driver, and he glanced back at me with a smile, and then he faced the long road ahead, and I turned my head and looked at the snow-capped mountains in the distance, and for a minute or so, we sat there in silence, strangers again.

Aside from Q3 financial results, it was a relatively quiet week for news.

Manhattan Associates and SAP both reported Q3FY13 financial results this week. What was the common thread between them, aside from reporting increases in total revenues? The ongoing decline in license revenue.

Manhattan Associates reported record Q3FY13 revenue of $107.8 million, up 12.5 percent from Q3FY12. License revenue, however, decreased 8.6 percent in the quarter compared to the same period a year ago. Through the first nine months of 2013, total revenue is up 9.3 percent and license revenue is down 4.2 percent.

Meanwhile, SAP reported a 23 percent increase in Q3 net profit compared to a year ago, but total revenue increased only 2 percent (due in part to currency fluctuations), while software license revenue dropped 5 percent overall, and down 13 percent in the Americas and 9 percent in Asia.

It took more than a decade, but it seems to me that growth in recurring revenues, specifically from cloud and software-as-a-service offerings, is replacing growth in license revenue as the primary measure of a software company’s health.

On the 3PL front, Ryder reported third quarter revenue of $1.63 billion, up 4 percent from the same period last year. The company’s Supply Chain Solutions business segment posted strong results, with operating revenue (revenue excluding subcontracted transportation) up 9 percent compared to Q3FY12. According to the press release, “SCS operating revenue grew as a result of new sales and higher volumes. The Company saw strong growth in industrial, consumer packaged goods/retail, and high tech industry vertical groups. In particular, dedicated services saw strong double-digit growth, driven by increased customer outsourcing activity.” Looking forward, Ryder’s Chairman and Chief Executive Officer Robert Sanchez said, “We expect our Supply Chain Solutions business to continue to grow, driven by strong new sales and customer volumes. In particular, we anticipate strong ongoing performance in dedicated services driven by both secular outsourcing trends and our sales initiatives.”

Earlier this year on Talking Logistics, I interviewed Sonney Jones from Dal-Tile Corporation and Ben Enriquez from Transplace Mexico about the collaborative transportation project that earned their team — which also included members from Whirlpool and Werner Ladder — the 2012 Council of Supply Chain Management Professionals’ (CSCMP) Supply Chain Innovation Award. Building on the success of that initiative, Transplace announced this week the expansion of its TransMATCH co-shipping service that “offers the opportunity to consolidate freight through collaboration with multiple shipper companies and increase delivery frequency to targeted customers without increasing costs.” Here are some excerpts from the press release:

Collaboration has long been a focus in the transportation industry, but the realization has been a challenge because of the manual processes and lack of scalability. Transplace has worked with its partners to provide a solution with technology for automation and reporting, allowing for scalability, visibility and velocity in the market.

 

“Transplace has helped consumer packaged goods customers in the TransMATCH program [including Clorox, Colgate-Palmolive, Del Monte Foods] find the right partners and optimize freight, providing an innovative and valuable service to retail companies,” said Transplace Operations Vice President Mark McEntire.

 

McEntire added: “The current TransMATCH program was borne out of our annual CPG Summit, where our customers review logistics needs, share visions for industry progress, and give Transplace guidance on how we can help them grow and improve their businesses. We listened to what they said, developed the technology, process and team to execute their vision, and we are now rolling it out on a broader scale.”

Are we finally reaching the tipping point on collaboration, where companies are not just talking about collaboration, but actually taking action on it? Check out my thoughts on the barriers to collaboration and how to overcome them.

And on that note, have a happy weekend!

Song of the Week: “Cab” by Train



Note: Ryder is a Talking Logistics sponsor.