This Week in Logistics News (February 4-8, 2013)

By Adrian Gonzalez

Schools are closed, the roads are empty, and we’re all just waiting for the blizzard to arrive. It’s a stay-at-home-in-your-pajamas kind of day, my favorite. And the fact that it’s Friday makes it even better. I’m not looking forward to shoveling two feet of snow tomorrow, but there is something undeniably beautiful about seeing the world outside covered in white, and your kids laughing and playing in it, with their red cheeks and noses, shovels and buckets, snowmen and snow forts — winter’s version of a day at the beach.

While we wait for the storm…

C.H. Robinson and Con-way both reported Q4 and full-year 2012 results this week. You can read the press releases for all the details, but here are some highlights:

C.H. Robinson: Total net revenues increased 5.2 percent and net income increased 37.6 percent in 2012 compared to 2011 (including contribution from acquisitions). Truck net revenues, which includes truckload and less-than-truckload services, increased 7.1 percent in Q4 2012. The company’s North American truckload volumes increased eight percent in the quarter, and its average truckload rate per mile charged to customers (excluding fuel) increased about 1 percent in Q4 2012 compared to Q4 2011, while its truckload transportation costs increased approximately two percent (excluding fuel). Net revenues from “other logistics services,” which include transportation management services, customs, warehousing, and small parcel, increased about 15 percent in Q4 2012 (excluding contribution from acquisition), driven primarily by transaction increases in its transportation management and customs services.

Con-way: For the full-year 2012, Con-way reported net income of $104.5 million, up 18.2 percent from 2011. Menlo Worldwide Logistics reported net revenue of $161.8 million, up 2.7 percent from Q4 2011; “net revenue grew at a lower rate than gross revenue, primarily due to slower growth in warehousing volumes at current accounts, and tighter margins on new business.” Revenue at Con-way Truckload in Q4 2012 was basically unchanged from Q4 2011, with operating income decreasing 10.5 percent. Loaded miles declined 3.7 percent in the quarter compared to Q4 2011, and empty miles were 9.9 percent compared to 9.6 percent in Q4 2011.

2013 is off to a slow start for freight shipments, according to the Cass Freight Index Report for January. Here is an excerpt:

Both shipment volume and total freight payments declined significantly from December [2012] to January [2013], as the economy slowed to a near stall. Total shipment volume has fallen in each of the last four months, mirroring the recent contraction in GDP. The 0.1 percent contraction in GDP for the fourth quarter of 2012 was the first negative result since the recession.

January shipment volumes fell off 4.8 percent from December and were 2.5 percent lower than they were a year ago. For each of the last two years, freight shipment volumes ended the year at about the same place they began. This was the first year since the recession period that January shipments were actually lower than January of the previous year.

In technology news, LLamasoft announced the launch of Supply Chain Sherpa, “a mobile supply chain modeling app developed to make supply chain design and what-if scenario analysis accessible to everyone throughout the extended enterprise.” According to the press release, Supply Chain Sherpa enables users to:

Rapidly modify a pre-loaded supply chain design or quickly prototype a new design using built-in reference data
Immediately visualize results in detailed maps and graphs including service, cost, logistics, sustainability and risk
Share designs with other Supply Chain Sherpa users via email, or send the models to Supply Chain Guru for more detailed modeling, optimization and simulation

As I commented in my predictions for 2013, tablets and smartphones are quickly becoming the preferred computing platform for business professionals, and this is just another example of how enterprise applications are being designed and optimized for these devices.

Another of my predictions was the continued adoption of alternative fuel vehicles, and this week UPS announced the deployment of 100 fully electric commercial vehicles in California. Here are some excerpts from the press release:

These UPS electric trucks [manufactured in Stockton, California by Electric Vehicles International] will reduce the consumption of conventional motor fuel by approximately 126,000 gallons per year. Additional benefits include reduction of carbon emissions and noise. The vehicles have a range of up to 75 miles and primarily will deliver packages to customers in Sacramento, San Bernardino, Ceres, Fresno and Bakersfield.

“We currently operate more than 2,500 alternative fuel vehicles worldwide with a variety of hybrid, electric and natural gas technologies, making UPS the leader in logistics sustainability,” said Myron Gray, president of U.S. operations for UPS.

Supply chain executives have one less thing to worry about this year: the United States Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA) have reportedly reached a tentative labor contract agreement. A strike would have shut down ports along the Eastern seaboard, which together handle 110 million tons of import and export cargo.

Finally, the Import Security Filing (ISF) — more commonly referred to as “10+2” — is back in the news. As reported in a Supply Chain Management Review article:

Earlier this year, the National Industrial Transportation League (NITL) cited customs and international trade law firm Sandler/Travis’s reporting in its Daily Report that “CBP is expected to issue by the end of May a proposed rule that would make various changes to increase the accuracy and reliability of the advance information submitted under the importer security filing, or ‘10 + 2 rule.”

It added that while fines for non-compliance were set at $5,000 per incident, Sandler/Travis said that CBP has not strongly required full compliance and that the proposed rule could set forth the agency’s intention to do so and establish standards under which full compliance could take place.

As I wrote back in November 2008 in “10+2: A Beacon of Hope for Software Vendors and Freight Forwarders,” nothing gets software vendors more excited than new government regulations because it often translates into increased demand for their compliance solutions. I expect to see many more blog postings, white papers, and press releases about this topic from software vendors and service providers in the days ahead.

Ah, look, the snowflakes are here. Time to go.

Song of the Week: “Judy Staring at the Sun” by Catherine Wheel with Tanya Donelly