This Week in Logistics News (June 7 – 13)

Happy Friday the 13th! Did you know that fear of Friday the 13th is known as paraskevidekatriaphobia? Try saying that three times fast… Like many of you, I was scarred for life by the movie Friday the 13th. From the perspective of “most damage inflicted,” it was a toss up between Friday the 13th and Nightmare on Elm Street. Nightmare was especially damaging because I was petrified to fall asleep. Anyway, on to this week’s logistics news:

• DOT Freight Transportation Index Jumps 4.8%
• ‘SuperTruck’ Program on Track to Meet Fuel-Economy Goals, Report Finds
• Operating Costs Expected to Limit Fleet Profitability, ATA Says
• UPS Pulse of the Online Shopper Study signals change in logistics
• Global port growth overtakes China
• 61 percent of consumers would switch retailer based on an unacceptable online shopping experience

The DOT freight transportation services index jumped 4.8 percent in April from the same period last year. This represents the second highest reading ever recorded for the index. The jump was primarily driven by increases in trucking and rail intermodal. The DOT report provided some longer term context, stating, “Freight shipments are up 24.1 percent in the five years from the recession level of April 2009 and are up 6.4 percent in the 10 years from April 2004.” The high shipping volumes and the tight capacity, while probably exacerbating transportation bottle-necks this past winter, are also good signs for truck manufacturers and transportation providers. There are already signs of increased demand for trucks and desire for rail capacity increases. While trucking revenues (and shipper costs) are likely to increase on the short-term, the addition of capacity should mitigate cost pressures in the mid-term.

A report by the International Council on Clean Transportation found that the “SuperTruck” project is on track to meet its goal of a 50 percent increase in tractor-trailer efficiency along with a 20 percent increase in engine efficiency. The article further states:

The teams led by Cummins and Daimler met the 50% freight efficiency goal in 2013, and the Cummins team already had achieved a more than 20% gain in engine efficiency, according to the report. The study found that the program has helped vet particular advanced technologies, such as waste-heat recovery systems, new transmissions and ultra-aerodynamic tractor-trailers, helping those new technologies get closer to commercialization.

I’m all for fuel efficiency gains that don’t hinder performance- truck owners fuel prices decline, less pricing pressure on goods delivered, and less carbon dioxide is released into the atmosphere. But increased operating costs serve as a efficiency burden on the economy. Therefore, I believe that “Clean and Green” needs to consider the negative effects from decreased efficiency. For example, see  “Operating Costs Expected to Limit Fleet Profitability”  below.

The chief economist at the American Trucking Associations (ATA) is forecasting US economic growth to accelerate this year, but he expects rising operating costs to limit fleets’ profitability. Although freight demand is increasing, revenue per truck has not followed. Costello noted that operating costs such as driver pay increases from shortages, rising equipment costs, and regulations are increasing costs, thereby limiting profitability.

UPS released its annual UPS Pulse of the Online Shopper study. Here are some of the highlights from the Logistics Management article on the study. Click Here to download a copy of the UPS study.

• “Omnichannel drives brand loyalty. The demand for cross-channel convenience is becoming more prevalent for the savvy shopper. In fact, 40% of purchases are made crossing channels, whether searching in store and purchasing online or vice versa.”
• “Delivery costs and free shipping trump faster delivery. Free shipping continues to drive purchasing decisions – 58% have added items to their shopping carts to qualify for free shipping and 83% are willing to wait an additional two days for delivery if shipping is free.”
• “While smartphones play a big role in the online experience, user interfaces have some catching up to do to win over consumers. Online shoppers who use multiple devices said they would prefer to shop on a desktop computer over mobile because larger and clearer images help them comparison shop.”

A report from Shanghai International Shipping Institute states that cargo throughput grew more quickly across the globe than it did at China ports. The article by Port Strategy contains a number of interesting tables on the world’s major ports and growth rates of cargo throughput. Interestingly, Rotterdam is the only listed port that is not in Asia.

JDA Software released its Customer Pulse report out of the UK. The report discusses home delivery results and “click and collect,” which is a prevalent omni-channel commerce flow in the UK. In fact, the report states that 48 percent of respondents stated that they used such services in the last 12 months. Click Here to request a copy of the report.

Everybody have an enjoyable and relaxing weekend, like this guy in the picture. His name must be Yogi, because he is clearly “smarter than the average bear!”