Management Update
An executive summary of industry news
-- Logistics Management, 10/1/2009
-
Is the recession ending? You bet it is. Well, at least that’s what Rosalind Wells, chief economist at the National Retail Federation (NRF), now firmly believes. In the NRF’s quarterly Retail Sales Outlook report, Wells said that the economy is growing in the second half of this year, even though consumer spending—the main driver for economic activity—remains sluggish. Wells added that the nation’s GDP will grow by 2.5 to 3 percent over the last six months of 2009 and be driven by a need for inventory rebuilding.
-
What’s that noise? Lufthansa may end its freighter operations if a new “noise abatement” law prohibiting night flights is enacted. According to published reports in the EU press, Lufthansa Cargo chief executive Carsten Spohr is warning shippers that if there’s a reduction in the number of flights the airline can make out of its Frankfurt hub, operating such a service will become economically unfeasible. Pending a decision by the German state of Hesse, such a law will be imposed as a condition for badly needed airport expansion. Spokesmen for Lufthansa said it would not consider moving its freighter operations to any other EU air cargo gateway if Hesse rules against the airline. The news comes on the heels of a new launch by Lufthansa of a twice weekly freighter service between Frankfurt and Seattle via Los Angeles.
-
New Penn Teamsters do an “about face.” A month after rejecting a wage and concession package, Teamsters at New Penn, a regional subsidiary of LTL transportation services provider YRC Worldwide (YRCW), signed off on a labor agreement previously approved by more than 90 percent of YRCW Teamsters employees. The original agreement went through in early August—and was approved by Teamsters at YRCW—is comprised of a 5 percent incremental cut and an 18 month freeze on union pension fund contributions. YRCW said these measures are expected to save the company roughly $45 million per month through the rest of 2009 and roughly $50 million per month in 2010.
-
A positive sign for freight trends? Following flat growth from May to June, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported that its Freight Transportation Services Index (Freight TSI) was up 1.6 percent from June to July. The jump represents the first sequential increase in the output of services provided by the for-hire transportation industries since February and is the biggest monthly gain since January 2008, according to the BTS. Despite the sequential uptick, the current Freight TSI level is the lowest July level it’s been since 1997’s 94.8. In fact, the 13.5 percent year-over-year July decrease is its biggest decline for that period in 20 years.
-
More than a Canal. While the Canal expansion is getting most of the ink, Panama is also wooing U.S. air cargo shippers. As a consequence, the U.S. Trade and Development Agency (USTDA) has awarded a $258,000 grant to Gulf Coast International Cargo Panama S.A. to help conduct a feasibility study on the construction of an air cargo facility with cold storage at Tocumen International Airport. U.S. companies may compete for the USTDA-funded study through the Federal Business Opportunities web site. Gulf Coast Panama will select the company. “At present, few air cargo facilities in Latin America and the Caribbean have cold storage capacity, hampering the region’s development of international markets for its perishable products and contributes to the region’s food insecurity,” a USTDA spokesman said.
-
The Next Generation Supply Chain Conference is coming soon! New this year, Logistics Management and sister publication Supply Chain Management Review have teamed up to offer logistics professionals a comprehensive online conference to help shippers “learn the ropes” in today’s unique economy. The 2009 Next Generation Supply Chain Conference hosts thought leaders and practitioners from around the world to help shippers prepare for this “new economy” with sessions on Wednesday October 27th. The conference will be available on demand after the launch dates, so shippers can listen at any time. Visit logisticsmgmt.com/nextgen to register.
-
Air breathes a sigh of relief. Although Asia-Pacific air carriers recorded a steep decline in demand in recent months, Boeing predicts a resurgent marketplace in the coming years. “Despite an unprecedented contraction during 2008 and 2009, we remain confident in the strength of the global air cargo market over the long haul,” said Jim Edgar, regional director of cargo marketing for Boeing commercial airplanes. According to Boeing analysts, Asian carriers are expected to add about 750 freighters to the region’s fleet to accommodate growth and airplane retirements, about 27 percent of the world requirement—second only to the more mature, but slower growing North America market.
-
Industry players cited as standout career starters. Class I railroads Norfolk Southern (NS) and Union Pacific (UP), along with UPS and CH Robinson Worldwide (CHRW), were cited by BusinessWeek as some of the best places to launch a career. This annual survey ranks top employers for recent college graduates and is based on a survey of U.S. employers, college career services directors, and about 60,000 college undergrads. NS and UP paced the transports at 26 and 28, respectively, on the publication’s list, with UPS coming in at 59 and CHRW at 65.
-
Pacer updates credit agreement. Freight transportation and logistics services provider Pacer International Inc. has entered into a revised credit agreement with a group of financial institutions led by Bank of America. This agreement follows a July 1 announcement that it had successfully entered into a First Amendment and Waiver of its 2007 Credit Agreement with Bank of America and other financial institutions. Pacer officials said the revised agreement provides for an asset-based, revolving credit facility of up to $125 million. “Momentum is building at Pacer,” said Michael Uremovich, Pacer chairman and CEO, in a statement. “We have streamlined and strengthened our capabilities, improved our service levels and achieved additional synergies across the entire Pacer enterprise,” he added.
-
Tree huggers vs. shippers. In response to a recent joint letter to Representative James Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee, by the Natural Resources Defense Council (NRDC) and the Sierra Club, The National Industrial Transportation League (NITL) refuted claims made by the environmental interest groups that the NITL opposed the Clean Trucks Program of the Ports of Los Angeles and Long Beach. The Sierra Club co-signed a letter with the NRDC last month stating that “we firmly believe that a concession model is essential to the long-term success of the Clean Trucks Program.” The letter added that concessions could help ports better enforce the programs and will lead to better maintained trucks because concessionaires are “well-heeled trucking companies,” not “underpaid drivers.”
-
Longshore labor worries mount. Now that the International Longshoreman’s Association (ILA) has rejected a deal with the United States Maritime Alliance (USMX), East Coast ports may no longer enjoy a “labor friendly” advantage. ILA Wage Scale delegates unanimously rejected a proposed two-year contract extension offered by the USMX at meetings in Orlando, Fla., last month. All terms of the current six year agreement will now remain in effect until 2010. USMX sought to alter the terms of the final year of the current six year agreement, including deferring a scheduled ILA wage increase for a year in exchange for their immediately lifting the Container Royalty Cap and beginning to bridge the salary gap between the lower and higher tiered wages that ILA members earn. But USMX refused to address ILA’s concern on new technology and rejected the union’s demand to freeze introduction of new technology throughout the term on the extended contract.
"Clean Trucks" Conundrum
02/19/2009Clean Trucks Update
02/23/2009RX for ailing air cargo sector
03/06/2009Management Update
09/30/2008The Next Generation Supply Chain
10/11/2009
View All On-Demand Webcasts
