This Week in Logistics News (July 7-11, 2014)

By Adrian Gonzalez

Lots of news to get to this week, so let’s dive right in.

The big news this week was the announced merger of Accellos and HighJump, which creates “a market leader with 11,000 customers in 23 countries with operations in North America, Asia and Europe” and “brings together a unique set of technologies, including networked trading partner connectivity, warehouse management, transportation management, and route delivery.”

I haven’t been briefed by the company yet — which will be called HighJump moving forward, and be led by Michael Cornell, Accellos’ founder and CEO — but here are some excerpts from an FAQ it published about the merger (emphasis mine):

Supply chain changes driven by emerging models for omni-channel commerce are causing enterprises to rethink their order fulfilment technology and invest in warehouse management systems. This has been evident by the growth in WMS product sales by both Accellos and HighJump. While the combined companies offer multiple WMS products, each services a unique market niche. HighJump WMS provides large and upper mid-market companies including 3PL companies one of the most scalable and adaptable WMS platforms in the market. The Accellos 3PL WMS product has tremendous market adoption within multi-client public warehouse 3PLs and is differentiated in the market based on 3PL specific product features and domain expertise in the Accellos’ 3PL business unit.

Omni-channel commerce is also driving significant adoption of B2B integration. Multi-participant trading partner networks that are a combination of software and managed service are emerging as the new technology platform to connect businesses. The combined EDI product portfolios of Accellos and HighJump provide a compelling set of solutions for global EDI.

It sounds like omni-channel commerce made them do it, although the new HighJump will need other solutions, such as Distributed Order Management and a broader transportation management footprint, to offer clients a more complete omni-channel fulfillment solution (the old HighJump offered DOM via a partnership with Main Street Commerce, which was acquired by Demandware in January 2014).

Another driving force, from my perspective, is the opportunity to become the dominant logistics solution provider for the mid-market, including third-party logistics providers. While larger competitors like Manhattan Associates, JDA, SAP, and Oracle battle it out at the top end of the market, the new HighJump has the opportunity to, as it states in the FAQ, “bring innovative solutions with low total cost of ownership to the mid-market.”

Of course, the combined company has to overcome the usual challenges associated with mergers, including supporting existing applications while developing a unified solution platform. But this is not a new challenge for Michael Cornell who has managed the acquisition of seven companies during his tenure at Accellos. We’ll just have to wait and see how this one goes.

I attended Accellos’ user conference last year and had the opportunity to interview several of its 3PL customers to learn more about the challenges and opportunities they face, and how those factors are influencing their technology investments and priorities. You can watch my video interviews in this post, and also my interview with Ross Elliott, founder and CTO at Accellos, where he discusses (among other things) the company’s acquisition strategy.

The other big news this week was the action in Congress to replenish the Highway Trust Fund before it runs out of money next month. According to the Wall Street Journal:

The House Ways and Means Committee, in a voice vote, approved legislation that would transfer $10.8 billion to the Highway Trust Fund by relying on financing mechanisms unrelated to transportation spending. The bill, which the House is expected to take up next week, would extend the funding through May 2015.

The Senate Finance Committee voted later Thursday, also by voice vote, on a bipartisan alternative that would transfer about the same amount to the trust fund through similar funding strategies but also seek to improve compliance with existing tax laws, including taking Medicare payments from doctors and other providers who are delinquent on their taxes and tightening up on compliance with mortgage-interest deduction rules. The committee didn’t specify an end date for its bill.

As luck would have it, my guest on Talking Logistics yesterday was Jason Craig, Manager of Government Affairs at C.H. Robinson, where we discussed this breaking news, along with the latest trends in transportation regulations. Check out the video for his comments and analysis on this topic (the segment on transportation funding begins at the 4:16 mark).

The bottom line: For the 11th time in 5 years, Congress is kicking the can yet again on coming up with a long-term funding solution until after the November 2014 elections. For related commentary on this topic, read my post from February 2014, Enough Talk: Time to Fix Transportation Infrastructure Funding.

Finally, the American Trucking Associations announced that “the turnover rate at large truckload carriers rose just one percentage point to 92% (annualized rate) in the first quarter of 2014, but held above 90% for the ninth consecutive quarter…[ATA Chief Economist Bob Costello] noted that poor weather during the first quarter could have kept a lid on turnover and it could still rise as improved economic growth and healthier freight volumes put more pressure on the driver market and the driver shortage.”

Driver turnover is part of the driver shortage problem I wrote about earlier this week, which has received some great comments here and on LinkedIn. Check out the comments, then post your own.

And with that, have a happy weekend.

Song of the Week: “Come With Me Now” by Kongos