This Week in Logistics News (March 31 – April 4, 2014)

By Adrian Gonzalez

Well, the snow melted in time for us to get the baseball field ready for Opening Day tomorrow. But Murphy’s Law struck nonetheless. After training all winter for this day, my son woke up with a fever and cold symptoms on Wednesday, so he might not be in uniform tomorrow. Welcome to April baseball in New England.

In the news this week…

My company issued its very first press release this week, announcing the launch of 3PL Briefings, a research service focused on providing supply chain and logistics executives with high-quality and trusted research, analysis, and briefings about the Third-Party Logistics (3PL) industry and leading practices in logistics outsourcing. As I say in the press release, our mission is to help manufacturers, retailers, and 3PLs develop successful, long-term relationships through the power of knowledge and community. Our research will be centered on discovering the attributes that maximize the value and longevity of 3PL-customer relationships, and we will take an in-depth look at the role people, technology, and company culture play in the process.

We are very excited to get started on pursuing our mission. Logistics executives at manufacturing and retail companies interested in learning more about 3PL Briefings and joining our research community, as well as Third-Party Logistics companies interested in scheduling a briefing and submitting a company profile, please contact us for more details.

In other news, Descartes acquired Computer Management USA, “a leading US-based provider of security filing solutions and air cargo management solutions for airlines and their partners,” for $6.6 million in cash. Here are some details from the press release:

Computer Management’s solutions help air carriers to improve operational efficiency and streamline security filing and customs clearance processes, directly and through coordination with ground handlers and container freight stations. The air cargo community is challenged by a rapidly evolving global regulatory environment where customs authorities around the world continue to implement mandates designed to improve security. Recent examples include U.S. Customs and Border Protection’s (CBP) Air Cargo Advanced Screening Initiative (ACAS), the European Union’s Import Control System (ICS) and Preloading Consignment Information for Secure Entry (PRECISE), Canada Border Services Agency’s (CBSA) Advance Commercial Information (ACI) system.

Descartes has made several acquisitions over the years in the customs and regulatory compliance space, so this latest one basically strengthens the company’s solution footprint in this area. What’s surprising to me is that Descartes continues to find these niche providers (“Needlefish,” as former Descartes CEO Art Mesher called them) to acquire, which highlights the fragmented nature of this market.

On the 3PL front, Ryder announced that its fleet of over 500 natural gas vehicles surpassed 20 million miles. According to the press release:

The fleet consists of liquefied natural gas and compressed natural gas tractors serving over 40 customer operations in California, New York, Texas, Arizona, Michigan, Utah, Georgia, and Louisiana. Since deploying its natural gas vehicle program in 2011, Ryder has replaced approximately 3.1 million gallons of diesel fuel with domestically produced natural gas and reduced emissions by more than 559,000 MTCO2e (metric tons of carbon dioxide equivalent) emissions.

The use of alternative fuel vehicles in logistics operations — including natural gas, electric, and hybrid vehicles — continues to grow. As I commented earlier this month when UPS announced plans to invest $70 million to purchase 1,000 propane package delivery trucks, the rising cost of diesel and sustainability goals have been the main driving forces, and they’ll continue to lead other companies in this direction in the months and years ahead. For related commentary, watch my recent interview with Jason Mathers, Senior Manager at Environmental Defense Fund, on 5 Principles for Greener Freight.

One of the biggest blind spots in supply chain visibility is ocean shipping. Being in the dark is especially troubling for companies that ship sensitive or high-value goods. In response, DHL Global Forwarding launched a new global ocean freight service this week called Ocean Secure, “designed for customers shipping sensitive or high value cargo, specifically from the Life Sciences & Healthcare, Technology, Automotive, and Consumer Goods industries.” Here are some excerpts from the press release:

An integral part of the DHL Ocean Secure services are in-transit visibility and in-transit control. Customers have access to real time information on the location and condition of their shipment at any given time via an online platform. In case of irregularities, a DHL team will intervene. Intervention points are all over the world, ensuring customers that their goods are taken care of quickly.

The service is globally available and can be individualized by customers, depending on their needs. Customers can choose between container tracking, monitoring of any opening of the container, or of temperature and humidity in the container leveraging the DHL SmartSensor GSM technology as well as real-time and in-transit information for all container parameters from remote areas and at sea through satellite transmission.

DHL is not the first to offer this type of service, and historically, the cost has been too high for most companies to adopt, except for those shipping very expensive items where the business case makes sense. Nonetheless, as the technology continues to improve and become more affordable, I expect more companies to use this type of service — especially “intervention points” — to respond more quickly and efficiently to demand changes.

In my conversations with transportation executives, truckload capacity remains their top concern, and news this week from FTR doesn’t provide comfort:

FTR’s Trucking Conditions Index (TCI) reading of 7.54 for February, while down slightly from the previous month, continues to reflect good news for trucking fleets as well as a warning to shippers seeking carriers to move their goods. The severe weather likely had a bigger impact and is not getting picked up in the data. When you adjust for weather, the TCI reading would be pushed above a reading of 10, certainly making this the tightest truck market on record. FTR expects the TCI to remain in this range throughout 2014, impacted by truck freight demand accompanied by regulatory drag hindering available capacity.

Apple is reportedly looking to buy Renesas SP Drivers, a Japanese maker of power-saving smartphone chips for about $1 billion. The reason why is what caught my attention (from the WSJ article):

In the seven years since Apple introduced the iPhone, the company has taken a bigger interest in controlling key components as a way to differentiate its products [emphasis mine]. It acquired chip designer P.A. Semi in 2008, allowing it to design its own powerful processors for iPhones and iPads. In 2012, it acquired AuthenTec Inc., maker of a fingerprint-sensor technology built into the iPhone 5S. Apple has also started building a sapphire-crystal facility in Arizona this year, fueling speculation that it may replace the iPhone’s glass displays with harder-to-scratch sapphire.

There’s that word again: Control.

(For related commentary, read my recent post, Keeping Control: What 3PLs Must Convince Their Customers).

Finally, I don’t normally comment on this type of news, but this one has a personal connection. Congratulations to C.H. Robinson for receiving the Community Impact Award in the Workplace Giving Campaign category from Minnesota Business magazine. C.H. Robinson was presented the award for the company’s 14 years of support and dedication to the MinnDakotas chapter of JDRF, the leading global organization focused on type 1 diabetes (T1D) research. As the parent of a daughter with T1D, I am very grateful for all the time and money that employees at C.H. Robinson and elsewhere are investing to help us turn Type One into Type None in the future.

Therefore, instead of a “Song of the Week,” I encourage you to watch this meaningful video from JDRF.