The best thing about living in New England is the change in seasons. A couple months ago I vented my disgust for the seemingly never ending Winter. I couldn’t wait for the Spring to arrive. Now I sit with scratchy eyes, unable to breath, looking at my pollen-covered porch wishing for the Spring to end. Soon enough, the ragweed pollen will begin and I will be begging for the first frost to terminate my allergic agony for the season. I love living in New England.
In this week’s logistics news….
- Frigid winter takes toll as US GDP contracts for first time in 3 years
- Alibaba Ramps Up Its Asian Logistics With A $249M Investment In SingPost
- Freight co. Ponzi scheme bilked customers of $42 million, DOJ alleges
- ‘Chronic lack of warehousing could hamper UK economic recovery’
- US Class 8 Fleet Expands to Largest Size on Record
- Supply Chain Software Acquisitons
The US Commerce Department reported that first quarter GDP decreased at an annual rate of 1 percent. This was a negative surprise, as the initial estimate was an increase of 0.1 percent. This was the worst performance since the first quarter of 2011. A decline in private inventory investment and a substantial reduction in exports were two primary factors hindering growth. I previously mentioned a number of leading economic indicators that were consistent with a substantial downturn in the first quarter. The especially harsh winter is considered the cause of the poor performance, and it is therefore believed to be transitory. A number of leading indicators have already improved, suggesting a return to GDP growth for the second quarter.
Alibaba, the multibillion dollar Asian e-commerce giant, has been in the news recently mostly due to its highly anticipated IPO. Earlier this week, the Chinese company announced that it will invest $249 million in Singapore Post, a leading Asian transportation and logistics services provider. This move to obtain logistics control, capacity, and efficiencies has similarities to Amazon’s decision to acquire Kiva Systems to support its massive logistics operations. Here is a quote from the article:
Alibaba says the strategic investment will cover “other e-commerce opportunities in Southeast Asia and beyond by providing amongst other things, greater access to SingPost’s international logistics capabilities, infrastructure and delivery networks, and as well as end-to-end solutions to Alibaba Group customers and merchants.”
The owner of a group of freight payment and audit companies operating under the umbrella of the “TransVantage Group” surrendered to charges of operating these companies as a multi-million dollar Ponzi scheme. The Department of Justice alleges that the scheme subsidized personal expenses including a yacht, Maserati, and Sooy’s home remodeling. TransVantage also operates under the names Freight Traffic Services, FTS Industries and FTS. Not surprisingly, the company filed for bankruptcy last year.
From across the pond, an executive from UK based Rhenus Logistics stated that his firm is having difficulties securing warehousing space and that the chronic lack of large-scale warehousing has potential to hamper the country’s economic recovery. Building of new facilities is an option, but one that requires a greater lead time that could slow progress. At the same time, the executive expressed concern about facility developers’ ability to access financing and willingness to take the investment risk in the current economic environment.
Transportation Topics referenced an IHS Automotive report stating that the U.S. heavy-duty truck fleet grew to 3.66 million, its largest size on record, during the first quarter. This surpasses the previous record of 3.65 million in 2008. Information sources that I have noted previously on this blog expect the fleet to continue growing, as capacity is currently constrained and prices are under pressure.
There were a couple notable acquisition announcements this week from the logistics software industry. Tecsys , a publicly-traded, Canadian logistics software solutions company announced it has signed an agreement to acquire Logi-D, provider of point-of-use technology for supply chain automation servicing hospitals and healthcare organizations. Tecsys has carved out a niche in the healthcare industry for its WMS solution, and this acquisition is poised to augment Tecsys’ position in this vertical. Logility, a mid-sized supply chain planning software provider, announced its acquisition of MID Retail, provider of retail allocation and merchandise planning solutions. This acquisition extends Logility’s planning optimization footprint out to the retail floor.
And with that, have a great weekend!!