This Week in Logistics News (October 9-13, 2017)

I’m on borrowed time this morning, so let’s go straight to the supply chain and logistics news that caught my attention this week:

If you’re a transportation executive, you already know what’s happening in the market today: capacity is tightening and rates are climbing. Here’s some data reported by DAT Solutions this week:

  • The DAT North American Freight Index achieved record highs in September, with a 9 percent gain compared to August.
  • Spot freight availability was 74 percent higher than in September 2016.
  • Demand for truckload capacity, already at a premium due to economic growth and seasonal freight activity, experienced the largest year-over-year increase since 2010.
  • Hurricanes Harvey and Irma also contributed to demand, as the storms disrupted supply chains and boosted spot truckload rates to levels not seen since December 2014.
  • The national average spot van rate was $1.97 per mile, 19 cents higher than in August and 35 cents higher than in September 2016.
  • There were 6.6 available van loads per available truck in September, the highest monthly average in at least eight years.

Are you communicating what’s happening in the transportation market to upper management? What expectations are you setting? Are you having clear, honest, and ongoing conversations with your carriers? A few questions to ask yourself as you finalize your transportation budget and execution plans for 2018.

Last week in A Brief Commentary on the Future of Delivery, I stated that “Some of the technologies and delivery models that we currently believe are on the fast track to adoption will ultimately stall or fail and those that we believe are at least a decade or more away from reality will actually arrive much sooner than we predict.” By the volume of news each week, you might expect driverless cars and trucks to be just around the corner (see news this week from DHL and USPS). But maybe it’s hyperloop that will be here sooner rather than later. As reported by CNBC:

Richard Branson’s Virgin Group is investing in Hyperloop One, a company developing the super-fast transport system originally dreamed up by Elon Musk.

Hypleroop One is rebranding itself as Virgin Hyperloop One, and Branson is joining the board…Virgin Hyperloop One will focus on a passenger and mixed-use cargo service.

Breaking ground on a commercial hyperloop in two to four years is possible if “governments move quickly,” Branson said in a “Squawk Box” interview. So far, no government has approved a plan for a hyperloop system. The Virgin founder also said that building a hyperloop tube above or below ground is “cheaper” and “faster” than a traditional rail network.

There are plenty of naysayers, including Amtrak President Richard Anderson who told CNBC recently that hyperloop systems would not be taking over rail transport anytime soon. He also added that such technology is not “realistic” right now.

Mr. Anderson might be right or his comments might join the ranks of infamous quotes from other leaders who were quick to dismiss emerging competitors, like Microsoft’s former CEO Steve Ballmer’s comment about the iPhone: “500 dollars? Fully subsidized? With a plan? I said that is the most expensive phone in the world. And it doesn’t appeal to business customers because it doesn’t have a keyboard. Which makes it not a very good email machine.”

Finally, in the technology realm, SMC³ launched a new pricing API with MercuryGate as its first transportation management system (TMS) integration partner. According to the press release:

SMC³’s pricing API is the newest tool in the company’s ever-growing collection of Execution and Visibility APIs – solutions that are tailored for efficient, fast and powerful direct-to-carrier communications. These APIs are delivered through the SMC³ Platform, an innovative hub of LTL transportation technology solutions.

The contract pricing API gives shippers, 3PLs and other MercuryGate users direct access to their negotiated contract pricing, including accessorial charges, for multiple carriers from within MercuryGate’s TMS. MercuryGate customers also now have access to the SMC³ imaging API, which asynchronously provides users with a range of key shipping documents in real time during each shipment’s journey through the supply chain.

Two years ago, in my supply chain and logistics predictions for 2016, I predicted that we would see “increased innovation to simplify and expedite trading partner (B2B) connectivity, with APIs and Web Services replacing EDI as the preferred approach moving forward.” This has certainly been the case when it comes to LTL carrier connectivity, as SMC³, project44, Banyan Technology, and others keep driving this technology forward.  

And with that, have a happy weekend!

Song of the Week: “No Roots” by Alice Merton