This Week in Logistics News (March 3-7, 2014)

By Adrian Gonzalez

Mystery of the week: My third grader came home yesterday with dog poop inside his right boot. The outside of the boot was completely clean, he had his boots on the whole day, and we don’t have a dog.

Things that make you go “hmm”…

In more relevant news…

Descartes reported FY14 annual revenues of $151.3 million, up 19 percent from the previous year. Adjusted EBITDA was $44.5 million, up 16 percent from FY13. The U.S. accounted for 40 percent of revenues and EMEA accounted for 46 percent, with the balance coming from Canada, Asia, and the Americas. Services revenues comprised 91 percent of total revenues for the year. Edward Ryan, Descartes’ CEO, summarized it best: “Our strategy of focusing on recurring revenues, organic growth and complementary acquisitions continues to deliver consistent, predictable financial results.”

On the 3PL front, Ryder announced the launch of its new Ryder On-Demand maintenance solution in Canada. Here are some details from the press release:

The flexible solution provides private fleet owners and for-hire carriers with pay-as-you-go preventive maintenance and repair, with access to Ryder Canada’s nationwide network of 40 service locations and more than 400 trained technicians, when and where they need it. A small monthly fee opens up Ryder Canada’s expert vehicle maintenance network to any private fleet owner, who can then choose and pay for services as needed.

This is another great example of how a company can leverage assets and resources that support its internal operations (“internal cost centers”) to provide revenue-generating services to other companies. Of course, this makes sense for logistics service providers like Ryder, but a similar opportunity exists for manufacturers and retailers. Can you leverage your logistics assets and resources for top-line growth?

Meanwhile, Con-way Freight announced the full deployment of Drive Safe Systems™, a suite of advanced on-board “monitor, sense and alert” technologies. According to the press release:

Drive Safe Systems™ incorporates five in-cab technologies that alert drivers to potential safety risks and help them respond, improve situational awareness, provide feedback to refine safe-driving skills and defensive-driving techniques, and maximize safe, fuel-efficient operations.

The rollout of Drive Safe Systems™ represents the addition of two new in-cab safety technologies [Event Recorders and Real-time On-board Performance Management] which join three existing “sense and alert” on-board systems [Collision Avoidance, Lane Departure Warning, and Roll Stability Control] that have been factory-installed in every new Con-way Freight tractor since late 2009.

The slow (but accelerating) roll toward driverless trucks continues.

Speaking of trucks, Walmart unveiled a concept truck called the WAVE (Walmart Advanced Vehicle Experience). According to a Yahoo Auto article:

The WAVE features a range-extended electric powertrain, consisting of a Capstone micro-turbine and an electric motor. To reduce weight, the entire truck is made of carbon fiber–including the trailer. Walmart says this is the first example of a carbon-fiber trailer ever produced, and that its 53-foot side panels are the first single pieces of carbon fiber that large that have ever manufactured. Walmart says the carbon-fiber trailer is around 4,000 pounds lighter than a conventional one, allowing a truck to carry more freight without the need for increased power or fuel consumption.

Since a video is worth a thousand words, check out this short video of the WAVE:

In related news, UPS announced plans to invest $70 million to purchase 1,000 propane package delivery trucks and install an initial 50 fueling stations at UPS locations. According to the press release:

The propane fleet will replace gasoline- and diesel-fueled vehicles used largely in rural areas in Louisiana and Oklahoma with other states pending. The vehicles on these routes can travel up to 200 miles on a tank of propane. Operations will begin by mid-2014 and be completed early next year.

The new propane fleet is expected to travel more than 25 million miles and to displace approximately 3.5 million gallons of conventional gasoline and diesel per year.

Over the past few years, a growing number of companies — including Frito-Lay, UPS, Ryder, Sunny Delight, FedEx, Waste Management, Staples, AT&T, and Mohawk Industries — have started using alternative fuel vehicles. 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.

The White House released its Fiscal Year 2015 budget this week, which includes a $302 billion, four-year surface transportation reauthorization proposal that will be paid for, in part, “with transition revenue from business tax reform.” Politicians love to pay for something with planned (i.e. not guaranteed) savings somewhere else. The reality here is that the budget proposal doesn’t address the country’s long-term transportation infrastructure funding problem (see Enough Talk: Time to Fix Transportation Infrastructure Funding Problem). The American Trucking Associations (ATA) was quick to criticize the budget proposal:

“Finding a long term, sustainable way to improve our nation’s roads and bridges is one of ATA’s top priorities,” said ATA Chairman Phil Byrd, president of Bulldog Hiway Express. “Using the proceeds from corporate tax reform, while creative, does little to address the long-term solvency of the Highway Trust Fund or to uphold the principle of users paying for the services they get, in this case, the federal fuel tax, which has not been adjusted in more than two decades to account for inflation and improvements in vehicle fuel efficiency.”

Finally, logistics service providers and warehouse operators need to pay close attention to a case the Supreme Court agreed to hear this week involving Amazon warehouse workers in Nevada. According to a Reuters report:

The case revolves around workers at Amazon warehouses in Nevada, who had to pass through security checks as part of an anti-theft procedure. The workers, former temporary employees at Amazon contractor Integrity Staffing Solutions, said they spent nearly 30 minutes some days waiting for the checks. In a 2010 lawsuit, they argued they must be compensated for that time under the federal Fair Labor Standards Act (FLSA).

In a brief to the court, Integrity stated, “Security screenings are indistinguishable from many other tasks that have been found non-compensable under the FLSA, such as waiting to punch in and out on the time clock, walking from the parking lot to the work place, waiting to pick up a paycheck, or waiting to pick up protective gear before donning it for a work shift.”

What do you think? Post a comment and share your opinion.

And with that, have a happy weekend!

Song of the week: “Harlem” by New Politics