This Week in Logistics News (May 12-16, 2014)

Another crazy Friday morning, made worse by all this pollen in the air that’s turned my eyes into red fireballs. With no time to waste, and while I can still see, let’s go straight to the news…

JDA Software announced that Baljit Dail, the company’s chairman, is replacing Hamish Brewer as CEO “to lead the company through the next phase of its strategic growth plan.” I don’t have much insight into what prompted this change, or why it was made now versus prior to its recent users conference. But generally speaking, the enterprise software industry is undergoing a lot of disruptive change, putting pressure on software vendors not only to innovate their solutions faster, but also their business models and go-to-market strategies. SAP, for example, said that its shift to cloud computing will result in “a staff shake-up this year, with some employees laid off as others are redeployed,” according to a Wall Street Journal article. Here’s an excerpt from the article:

“The company is being geared toward the cloud business model,” said [SAP spokesman] Mr. Liedtke. Staffing in development, sales, support and marketing of SAP’s on-premises software will be adjusted in all countries, he said. Cloud business requires employees with different skills. The company therefore needs additional staff in website design but fewer sales representatives visiting customers, Mr. Liedtke said.

Speaking of SAP, the company announced the latest versions of its transportation management and warehouse management solutions this week. According to the press release, SAP TM 9.1 includes “major innovations in rail transportation, for both rail carriers and shippers.” In addition…

The application has also been extended to enable both buying- and selling-side capabilities for analyzing, collaborating on and creating freight agreements with a comprehensive strategic freight management solution. Additionally, the collaboration portal allows for real-time collaboration between shippers, logistics service providers (LSPs) and freight forwarders and their carriers. Load optimization, direct EWM integration and parcel management top off the major innovations.

In other transportation-related news, Transplace announced that Celtic International has expanded its cross-border and intra-Mexico intermodal capabilities. According to the press release:

This investment better positions Transplace and Celtic to capitalize on the growing use of intermodal, which grew by 4.6 percent domestically in 2013 over the previous year. Even with the steady increase year-over-year, there is still tremendous room for growth. In a recent report, Raymond James and Associates referred to Mexico as the “final frontier” for the North American intermodal market, stating, “Intermodal over the U.S./Mexico border remains in its infancy with market share in the low single digit rates.”

Simply put, many third-party logistics providers (3PLs) — in response to customer demand and growth potential — are introducing or expanding their U.S.-Mexico cross-border services. All signs indicate that this trend will continue into the foreseeable future. For related commentary, see my recent post, Mexico Back in the Supply Chain Spotlight.

In a recent post (Putting 3PLs and Software Vendors in a Box), I said that the answer to “What is a third-party logistics provider (3PL)?” doesn’t fit so neatly in a box anymore, as the business models of service providers, consultants, and software vendors continue to converge. enVista is a good example of this convergence in action. The company announced this week that its Transportation Solutions practice (which includes managed transportation services) achieved over 30 percent year-over-year growth in the first quarter of 2014. Here’s a quote from enVista President and CEO Jim Barnes:

“We credit the success of our Transportation Solutions practice to strong market acceptance of and demand for enVista’s core transportation service offerings, which include: freight invoice audit and bill payment, transportation assessments, analytics, and modeling. Because of this growth, we invested over $250,000 in a massive hardware refresh of our proprietary Transportation Spend Management solution, myShipINFO®, which offers multi-lingual, multi-currency, VAT considerations, and a robust, real-time rating engine to ensure carrier compliance. In addition, we look forward to introducing new dashboard technologies in the months to come.

As I’ve said many times before, a successful 3PL today is an operations manager, a consultant, and a technology provider all rolled into one. For related commentary, see 3PLs, What Business are You In? and Is Your Business Model Safe?

The amount of freight carried by the for-hire transportation industry rose 1.6 percent in March from February, rising for the second consecutive month, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics’ (BTS) Freight Transportation Services Index (TSI). Here are some details from the press release:

March was the second month in a row that trucking and rail intermodal were the fastest growing modes. The growth in trucking represented continued recovery from unusually severe winter weather that hampered freight shipments in earlier months.


Freight shipments in March were at the third highest all-time level, below only the two highest months: November and December 2013.


March 2014 freight shipments were up three percent from March 2013.

Finally, in a preview of what’s to come across the trucking sector if capacity continues to tighten, a Reuters article highlights the challenges many shippers felt earlier this year as they tried to shift from rail to trucking. Here are some notable excerpts:

In what trucking executives described as an unprecedented bidding frenzy, spot market rates surged by as much as 20 percent to record highs in the first three months of 2014 as shippers sought to minimize sometimes weeks-long delays in rail service.


Demand to ship freight on flatbeds outpaced the number of available trucks by a ratio of 37 to 1 in March and kept rising in April, an unusually steep seasonal spike, data showed. As the frigid winter and chilly spring yield to summer, quarterly corporate results are only now laying bare the tens of millions of dollars of added freight costs for shippers.

Consider yourself warned.

And with that, have a happy weekend!

Song of the Week: “Annie Get Your Gun” by Squeeze

Note: Transplace is a Talking Logistics sponsor.