This Week in Logistics News (February 11-15, 2013)

By Adrian Gonzalez

Back in November 2008, I shared with you my fear of asteroids– see “All Greened Out (Until the Asteroid Comes).” Since then, various asteroids and meteors have come “near” our planet, but I suspect most people have been too busy with other things to notice or care. Well, this morning, according to a CNN report, “a meteor streaked through the skies above Russia’s Urals region Friday morning, before exploding with a flash and boom that shattered glass in buildings and left about 1,000 people hurt.” Watch the incredible video below:

Coincidentally, the Wall Street Journal published an opinion piece this past Wednesday titled “A Warning from the Asteroid Hunters,” where the authors (a former NASA astronaut and the astronomer royal of the U.K.) say that there is a 30 percent chance that an asteroid with 700 times the destructive power of the Hiroshima A-bomb will impact the Earth this century.

Still think my fear is irrational?

In other news…

What is a 3PL? Ask 10 people and you’ll probably get 10 or more different answers. The reality is that the definition continues to evolve, as the business models of logistics service providers, technology companies, consultants — and yes, contract manufacturers — continue to merge. The partnership announced this week by UPS and Jabil is a perfect example. Here are some excerpts from the press release:

By combining UPS’s warehousing, transportation, returns management and trade compliance capabilities with Jabil’s reverse logistics planning, repair and call center support, the UPS/Jabil collaboration provides a turn-key supply chain model that can drive efficiencies, reduce vendor complexity and enhance customer service.

The collaboration, supported by Jabil’s and UPS’s integrated systems and capabilities, provides flexible service models that accommodate customer return and repair demands that includes providing high-tech companies with access to strategically-located repair and distribution facilities near their customer base. Specifically, the joint UPS/Jabil reverse logistics portfolio includes: order fulfillment, next and same day transportation, returns processing, whole unit and component repair, assembly, procurement and vendor management, planning and inventory funding, call center and tech support, trade compliance and the use of The UPS Store locations for product pick-up or drop-off.

Buying a product is different than buying a service, and when it comes to cloud computing, factors like uptime, redundancy, and security are critically important (see “What If a Cyber Attack Takes Down Your Software-as-a-Service TMS?”). Various standards and certifications exist for service providers, and this week JDA announced that it has achieved the International Standards Organization/International Electrotechnical Commission (ISO/IEC) 20000 and IS0/IEC 27001 certifications for its cloud services operations. According to the press release:

ISO/IEC 20000 certification provides independent validation of JDA Cloud Services’ service management system. JDA Cloud Services has proven its system availability, that customer needs are captured and promptly responded to, and that customer service processes are proactive and consistently benchmarked against industry best practices to ensure high quality services.

ISO/IEC 27001 confirms JDA Cloud Services’ information security management system. JDA Cloud Services operating processes ensure data integrity and the logical and physical protection of intellectual property and instill confidence regarding the privacy of customer data.

Freight shipments, as measured by the Freight Transportation Services Index, increased 1.0 percent in December from November, rising for the second straight month. The index, however, remained flat for most of 2012, with December ending at the same level as January. We’ll have to wait and see if this two-month uptick is the start of a longer upward trend or just a hiccup.

Diesel prices have increased 17.7 cents the past two weeks. The average price was $4.104 per gallon at the start of the week. The Department of Energy’s Energy Information Administration (EIA) expects diesel prices to average $3.97 per gallon in 2012 and $3.84 in 2013. What number did you use in your transportation budget this year? A couple of week’s of data is no reason to panic, but it’s no reason to smile either.

Finally, the threat of a labor strike at the west coast ports is back on the table. According to news reports, the clerical workers union failed to ratify the tentative agreement reached December 4th. Like I said back in December, being in a situation where just 800 clerks can shut down the main entry point for about 40 percent of US imports and cost the region about $1 billion per day is not good. Stay tuned.

Have a great weekend!

Song of the Week: “Dark Again” by Gold Fields