This week’s logistics news includes a nice combination of international trade, regulatory, corporate, and “fun” topics.
- Ukraine moves closer to unfettered trade access to European Union
- Value of 2013 U.S.-NAFTA Freight on Surface Modes Rose from 2012; Declined on Air and Vessel
- FMCSA proposes rule mandating electronic logging devices
- MODEX 2014 Expands Beyond the Four Walls
- FedEx Corp. Reports Third Quarter Results (highlighting impact from weather)
- U.S. Maritime Regulator Approves Mega Shipping Alliance (WSJ)
- Taking Direct Delivery to an Extreme
- Restaurant to me made from used shipping containers
European lawmakers backed a package of approximately €500 million in annual trade benefits to Ukraine. The trade package will permit the removal of 98 percent of all customs duties for Ukrainian goods entering the European Union, beginning on April 23. The Ukrainian Prime Minister signed off on portions of the pact earlier today in Brussels. Meanwhile, the EU and US continue to escalate trade sanctions with Russia.
The US Bureau of Transportation Statistics released 2013 data on US NAFTA trade. The overall value on all modes increased 2.6 percent over 2012. At 7.7 percent, pipeline was the mode that experienced the greatest year over year growth. This is due in part to the increase in oil prices. Rail and truck modes also increased, while vessel and air declined. Trucking represented the majority of trade, at 59.7 percent of the total.
The US FMCSA has announced the next iteration of a rule requiring the use of electronic onboard recorders (EOBR). This rule, if implemented, would serve as a catalyst for growth in fleet telematics sales. Also, it would likely support the legacy providers of these solutions, in contrast to the trend I highlighted on March 5th (see Fleet Telematics Competition Benefits Customers). However, I also argued back in 2010 that these pending regulations would serve as a catalyst for growth in the fleet telematics market by 2012. In my defense, I made this claim before they became a political hot spot and were subsequently bogged down in the Washington DC quagmire. The article states that EOBR use will likely be required in the second half of 2016. So I was off by four years – minor forecasting error.
As a quick note, I attended MODEX 2014 earlier this week. It was the second MODEX show, which alternates annually with it sister show, ProMat. Similar to ProMat, MODEX centers on material handling. However, the show is more focused on the end-to-end supply chain. The core MODEX show included about 600 exhibitors, while the co-located Supply Chain and Transport USA included an additional 100 exhibitors. I found the combination of supply chain and logistics vendors to be a strong complement to the material handing content. The exhibition floor included a lot of interesting emerging technologies, including the use of augmented reality glasses for navigation and picking, and collaborative robots freely roaming exhibitor booths (including one that repeatedly told me to get out of its way).
FedEx reported its third quarter financial results. I point this out because of its reference to the impact of this winter’s weather on operating results. Here is a quote from the release:
Unusually severe winter storms throughout the quarter disrupted operations, decreasing shipping volume and increasing costs, and impacted year-over-year operating income by an estimated $125 million.
It appears that the FedEx Express segment was most severely effected, as it reported a decrease in revenue. In contrast, the FedEx Ground and FedEx Freight segments both experienced year over year growth.
The Wall Street Journal reported that the US Federal Maritime Commission has approved a shipping alliance between three of the world’s largest container shipping companies. These three companies, known as the P3 alliance, include Maersk, CMA CGM, and Mediterranean Shipping Company. The proposed alliance is focused on sharing facilities in Shanghai, Rotterdam, New York and the US West Coast. The alliance still requires approval from Chinese and European regulators.
I found this article from the UK to be entertaining, since no one was harmed. It appears that a Royal Mail carrier has redefined the concept of in-home delivery by driving his truck into the living room of an elderly couple.
Also amusing and creative, approval has been granted in Buffalo, New York, for the development of a restaurant to be created out of 8 to 10 used shipping containers. I must admit, I’ve been to restaurants made of rail cars, but never shipping containers.
Have a great weekend!