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

By Adrian Gonzalez

Forget cloud, social, and mobile. Forget WMS and TMS. Forget BI and analytics. As was confirmed for me yet again this week at a conference, the most utilized supply chain and logistics application, the reigning champ of them all, is the Excel spreadsheet. As the saying goes, old habits die hard.

In other news…

What is a warehouse? And what is a warehouse management system? Omni-channel fulfillment is changing the traditional answers to those questions. As more consumers order products online for in-store pickup, retail stores are becoming fulfillment centers, and that’s driving logistics software vendors to develop new solutions to enable these processes.

This week, for example, JDA Software announced the release date for JDA® In-Store Picking, “a solution designed to enable retailers to accurately and efficiently pick e-commerce orders in a store (in-store).” JDA is targeting Grocery, Hardline, and Fashion/Apparel retailers with this solution, which will be generally available December 26, 2013. Here is an excerpt from the press release:

JDA In-Store Picking accepts orders from order management systems and then allocates and clusters them to make efficient use of both store space and time when picking and processing e-commerce orders.

For grocers, the picker may choose either voice activation or browser-based devices to pick products for packaging on carts and for those carts to be marshaled into staging areas before being loaded for home delivery, “click-and-collect” store areas, or for “drive-through” models as used in mainland Europe.

The pickers are sent to the shop floor to pick at an appropriate time ‒ to minimize the disruption for customers in the store – and be on time for the home delivery dispatch or the promised click-and-collect time. The solution also provides different substitution strategies depending on the retailer’s brand promise, and generates customer-ready paperwork before sending the picked items electronically to the point-of-sale system.

Of course, technology is only one piece of the omni-channel fulfillment puzzle. The open question is whether retailers are also going to invest in people to make it work — i.e., hire and train enough store-level workers to execute these new tasks efficiently and effectively.

On the 3PL front, C.H. Robinson and XPO Logistics both announced Q3 2013 financial results this week. C.H Robinson reported total net revenues of $463.3 million in the quarter, an increase of 7.1 percent from last year, which includes contributions from the company’s acquisition of Phoenix International Freight Services in October 2012. Truckload net revenues, however, decreased 1.3 percent in the quarter compared to Q3 2012. In North America, average truckload rate per mile charged to customers increased about two percent while truckload transportation costs increased about four percent, excluding the estimated impacts of the change in fuel.

XPO Logistics continued its rapid growth, reporting a 173.3 percent increase in total revenue and 251 percent increase in gross margin dollars in Q3 2013 compared to the same period last year. The company, however, reported a net loss of $6.0 million, compared with a net loss of $3.1 million for the same period in 2012. Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “While we reported a loss, as expected, our strategic investments are driving significant revenue growth and margin improvement. Given our trajectory, we’re on track to meet our 2013 targets for positive EBITDA in the fourth quarter and a billion dollar revenue run rate by year-end.”

Back in February 2010, I wrote a report highlighting how the MENA region is a growth opportunity for companies across many vertical industries, with countries such as United Arab Emirates, Saudi Arabia, and Egypt leading the way. Of course, the political and economic landscape has changed significantly since then, but the growth opportunities remain promising nonetheless, which is why 3PLs like Choice Logistics are investing in the region. The company announced this week that it is has opened a new distribution center in Dubai, United Arab Emirates. Here are some details from the press release:

Opened on July 1st, the new distribution center in JAFZA serves a region encompassing a 2000-mile radius around Dubai, including countries in the midst of building their technology and communication infrastructures such as Pakistan, Kuwait, Jordan, Egypt, and Saudi Arabia. It serves as a hub for duty-free importation and exportation of service parts, allowing clients to manage their inventory levels and distribution more competitively in the Middle East and Northern Africa.

U.S.-NAFTA trade reached $96.5 billion in August 2013, up 2 percent from August 2012. Trucks accounted for 59.9 percent of the trade value in August 2013 ($30.3 billion of exports and $27.5 billion of imports), but compared to the same period a year ago, trade by rail grew faster overall (3.0 percent compared to 0.7 percent for trucks). Looking at U.S.-Mexico trade, rail increased the most of any mode from August 2012 to August 2013, growing 10.1 percent compared to 1.1 percent for trucks. This was due, in large part, to imports of vehicles.

Speaking of Mexico, according to an article in the Wall Street Journal, the Mexican government has sent soldiers and federal police to take control of the deep-water port of Lázaro Cárdenas, which ranks among Latin America’s top 10 by cargo (the port is expected to handle 38 million tons this year). Here are some excerpts from the article:

The Mexican government sent soldiers and federal police on Monday to begin taking over the nation’s largest port and disarm the city’s municipal police following a week of mounting chaos at the hands of drug trafficking gangs in the western state of Michoacán.

Top Navy personnel will take the jobs of port manager and captain of the Lázaro Cárdenas port, while the army and federal police will take over security…The government is also sending more than 150 officials to take over the port’s customs agency.

I wonder if the U.S. military should start training our soldiers and military police to run the West Coast ports in the ever-more-likely event ILWU workers will go on strike this summer when the current agreement expires June 30, 2014.

And with that, have a happy weekend!

Song of the Week: “Kick” by INXS