This Week in Logistics News (December 8-12, 2014)

Lots of news to get to this week, so let’s get started…

Descartes continues to broaden its footprint in the global trade management space, with two more acquisitions announced this week: e-customs, “a leading provider of electronic security and fiscal customs filing solutions in the UK,” and Pentant, “a leading UK-based Community System Provider (CSP) offering customs connectivity and import/export inventory control solutions for ocean, truck and air cargo.” Back in June, Descartes acquired Customs Info, and the company has made several other acquisitions in this solution space over the past few years. The total upfront cost was under $12 million for both companies, which were owned by common investors.

Here are some additional details from the press releases:

e-customs’ cloud-based solution, Webdecs, provides both shippers and logistics service providers with a wide range of customs capabilities to cost effectively comply with UK fiscal filing and security filing requirements…Importers and exporters can leverage default and client-specific standing data, declaration templates, historical filings, on-screen tips and system validations to increase speed and accuracy in the filing process.

Pentant provides its shipper and logistics service provider customers with a reliable and secure connection to both CHIEF (the central UK Revenue & Customs system) and ICS (the European Union Import Control System) to streamline declaration, cargo security and clearance processes. Pentant also helps customers meet UK Revenue & Customs requirements for imports and exports to be managed through an approved inventory control system for the ports of Dover, Portland, Poole, Plymouth, Teignmouth, Bideford and Scrabster, as well as London City and Warton airports.

Simply put, over the past few years, Descartes has aggressively pursued a roll-up strategy in the GTM space, focusing on all “3 Cs” — Compliance, Content, and Connectivity. For related commentary, see A New Era for Global Trade Management Software? and Accelerating Supply Chain Speed and Efficiency with Global Trade Data.

One of my predictions for 2015 is that companies will begin to transform their decision-making processes, which will lead to greater use of social networking technologies. Coincidently, SAP announced this week that “SAP Jam [its social networking solution with more than 15 million users] helps companies to evolve the way they work and invent new approaches for the work of tomorrow.” The press release highlights how one of its customers, Sharks Sports & Entertainment, Inc., has benefited from the solution:

The company implemented SAP Jam to improve employee collaboration, increase engagement and enhance understanding of common corporate goals. And within three months, user adoption was at 90 percent.

“SAP Jam has greatly increased our employee engagement on a day-to-day basis,” said John Tortora, chief operating officer, Sharks Sports & Entertainment, Inc. “We’re able to share key information and make better connections both inside and outside the organization.”

Sharks Sports & Entertainment, Inc.’s improvement of employee collaboration is just the latest in a growing trend of businesses transforming collaboration through the use of social tools.

When it comes to online marketplaces, is history repeating itself? According to an article in the New York Times, “SAP…is readying an ambitious plan to build a global marketplace for business products and services, according to senior company executives.” Here are some additional excerpts from the article:

SAP could make money selling the software, Mr. McDermott [SAP’s CEO] said. The company might also gain valuable economic information about business behavior that it could then sell. “Participants conducting digital commerce, and the insights that can come from there,” he said. “All through HANA,” SAP’s tool for rapidly managing and analyzing large quantities of information.

The plan, still in development, will be announced early next year, he said. If successful, SAP could become a direct competitor to Alibaba, which already enables significant commerce between businesses through an online marketplace.

I’ll write more about this in a future post, but I view SAP’s plans as an extension of the network effect in supply chain and logistics that I’ve been talking about for years. In short, to quote the famous Verizon Wireless ad campaign from years ago, “It’s the Network” — not just software — that will drive competitive differentiation and innovation moving forward.

Moving on to 3PL news, C.H. Robinson and Transplace both announced an expansion of their international offerings. Here are some excerpts from the press releases:

Originally opened in 2012 with a focus on the fast growing temperature controlled transportation segment, the C.H. Robinson office in Rotterdam, The Netherlands has increased it’s offering to incorporate the entire C.H. Robinson road transport service offering portfolio…Since 1993, C.H. Robinson has built a network of more than 50 offices with over 1,000 employees throughout Europe to become one of the leading transportation and logistics companies in the region. The company has shown its commitment and investment in Europe by recently opening an office in Hamburg, Germany.

​Transplace, a leading provider of transportation management services and technology, today announced its Canadian office expansion to both Calgary and the Greater Montreal area, further increasing its business across Canada and cross-border throughout North America…In December 2012, Transplace acquired Torus Freight Systems and its office in Richmond Hill, Ontario. The new Canadian offices allow Transplace to expand its presence and continue to specialize in Canadian cross-border and intra-Canada freight.

Although my main prediction for 3PLs next year is that they will focus more on acquiring small and midsize customers, and on serving the needs of companies in the Energy and Process Industries, it’s clear from these announcements that 3PLs will continue to focus on expanding their international presence and capabilities too.

Finally, Hours of Service (specifically, the 34-hour restart rule) is back in the news. The spending bill that passed last night in the House includes an amendment to (as summarized in a press release issued by the ATA):

  • Requires the FMCSA to conduct a study in order to assess the operational, safety, health and fatigue impacts of the restart provision. This study will assess drivers’ safety critical events, fatigue and levels of alertness and driver health outcomes.
  • Provides a temporary suspension of two provisions the two consecutive overnight periods from 1:00a.m. – 5:00a.m. and the use of the restart rule to only once every 168 hours (once a week) to lift the undue hardship while the Department conducts the study.
  • The Secretary shall submit a final report on the findings and conclusions of the study and the Department’s recommendations on whether the provisions in effect on July 1, 2013, provide a greater net benefit for the operational, safety, health and fatigue impacts of the restart provision.
  • Provides $4 million in unobligated balances to conduct this study.

We’ll have to wait and see what happens in the Senate with the bill, and if President Obama ultimately signs it, but one thing is for sure: regulations will continue to impact the transportation industry in 2015 and beyond.

And with that, have a happy weekend!

Song of the Week: “Prayer in C” by Lilly Wood & The Prick and Robin Schulz

Note: C.H. Robinson, Descartes, and Transplace are Talking Logistics sponsors.

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