This Week in Logistics News (May 6-10, 2013)

By Adrian Gonzalez

After spilling coffee all over my desk this morning and cleaning up the mess, I am short on time, so let’s go straight to the news this week:

C.H. Robinson reported mixed results for Q1 2013. On a pro forma basis, total net revenues increased 3.8 percent and income from operations increased 0.3 percent in the quarter compared to Q1 2012. Truckload net revenues increased 1.9 percent, less-than-truckload net revenues increased 12.9 percent, and intermodal net revenues decreased 6.3 percent compared to the same period last year. One bright spot was the company’s “Other logistics services” net revenues, which include transportation management services, warehousing, and small parcel, which increased 22.3 percent in the quarter compared to Q1 2012; the increase was due primarily to transaction increases in its transportation management services. John P. Wiehoff, chairman and chief executive officer of C.H. Robinson, said the following in the press release:

“Our results for the first quarter of 2013 reflect the slower growth and continued margin contraction that we have seen in the markets we serve. They also reflect our continued investments in our future and adjusting to the changes we see. We remain positive in our long term performance outlook. Our investments, including the acquisitions executed last year, continue to drive our revenue growth and ability to service the global supply chain needs of our customers.”

Back in January, I discussed the “Rise of Supply Chain Operating Networks” on Talking Logistics. Based on Elemica’s announcement this week, and what I saw and heard at Ariba Live 2013 (more on that in a future posting), I am very encouraged by the developments occurring in the market — including the incorporation of social networking capabilities, something I never imagined when I first coined the “supply chain operating network” term a decade ago. According to Elemica’s press release:

The new Elemica QuickLink Network captures transaction data across the entire network, creating a critical mass of real-time business information allowing partners to collectively sense and properly respond to supply and demand changes in the market. Built in social collaboration [emphasis mine] gives clients the ability to discover, create, and build new or more robust business relationships faster. In addition to being an efficient method for broad collaboration, social also provides clients with the ability to quickly analyze the marketplace and assess partner performance.

Meanwhile, Ariba and Discover Financial Services announced AribaPay, “a new service to be offered by Ariba [will be generally available in 2014] that is expected to transform B2B payments by eliminating paper transactions, providing better visibility into cash flow and producing rich remittance information that improves reconciliation processes for buyers and sellers.” In short, this new service will strengthen the Pay side of the Procure-to-Pay process through the Ariba Network.

Thanks to the consumerization of IT and the growing recognition by technology companies and customers that “software is not enough” when it comes to supply chain management, I predict we’ll see more innovation and market adoption of supply chain operating networks (or, if you prefer, “social business networks”) over the next 2-3 years than we’ve seen in the past decade.

Speaking of software not being enough, JDA held its JDA Focus 2013 user conference this week and many of its announcements were focused on services rather than software. For example, the company announced the release of six JDA Cloud Optimize services — demand planning, replenishment planning, inventory optimization, next generation collaborative planning forecasting and replenishment, category management, and workforce management for retailers — that “enable customers to enhance and transform their supply chains by expanding their internal teams to include JDA expertise and standardized, repeatable processes that yield consistent results.” This is yet another example of how solution providers can differentiate themselves by combining software with human IP (supply chain talent), which many companies lack these days.

In other technology news, Roadnet Technologies launched Roadnet Transportation Suite version 3.6.2 that includes new enhancements, such as improved self-installation software upgrade mechanisms, fleet route profitability calculations and processes to efficiently calculate optimal route distances. Here are some additional details from the press release:

The Optimal Route Distance function allows transportation logistics professionals to quickly compare the mileage of a route to the “optimal” route by distance. This new vehicle routing feature enables users to determine the impact of tight time windows on route performances, as well as quickly identifying those with excessive mileage figures. This feature is also a key indicator for routers to understand how manual movements affect the routes.

In addition, the new route profitability functionality highlights the profit a fleet’s route generates based on total route cost and revenue per order. This exact data enables fleet routers to determine the cost to add stops or make manual moves relative to revenue generation and profitability as well as export information for use in analysis of profit per delivery or profit per customer relative to delivery.

Finally, as yet another example of how maps are becoming a killer app, and how business, mobile, and social networking apps are coming together, Facebook is reportedly in talks to buy Waze, an Israeli company that calls itself “the world’s fastest-growing community-based traffic and navigation app.” Here’s an excerpt from the Reuters article:

Maps and navigation services have become a key asset for technology companies as consumers increasingly adopt smartphones and other mobile devices.

Waze uses satellite signals from members’ smartphones to generate maps and traffic data, which it then shares with other users, offering real-time traffic info.

Time to get some more coffee. Have a great weekend!

Song of the Week: “Don’t Let’s Start” by They Might Be Giants