Up Front

By Staff -- Logistics Management, 5/1/2000

Here's a new term

Here's a new term to add to the buzzword lexicon: "3FL," or third-party fulfillment logistics. That's the new moniker for companies that specialize in providing distribution, warehousing, and fulfillment services for dot-com retailers. Industry analysts expect the 3FL to be the hottest segment in the 3PL market. Analyst Elaine Chen of Xceed Intelligence notes that dot-coms that outsource fulfillment gain several advantages, including limited capital investment in logistics, scalability of operations, and shorter time to market. Chen told the audience at a recent conference on e-fulfillment presented by the International Quality and Productivity Center that dot-coms handling between 1,000 and 10,000 online orders per day were ideal candidates for outsourcing fulfillment. Dot-coms with online orders outside that range should do the job in-house, she said.

Relief may be on the way:

Relief may be on the way: World oil prices should begin a gradual decline as members of OPEC (the Organization of Petroleum Exporting Countries) increase their oil production, according to the Department of Energy's Short Term Energy Outlook. The DOE expects the average cost per barrel of crude oil imported into the United States and delivered to U.S. refiners to decline from an estimated $26.75 per barrel in February and March 2000 to about $25.00 per barrel by June 2000, then to $23.50 per barrel by the end of 2000. The price is expected to continue to decline to about $21.50 by the end of 2001. The big question: Will refiners pass the savings on to their customers?

Wondering how to deal with the age-old problem of wooden pallet disposal?

Wondering how to deal with the age-old problem of wooden pallet disposal? They've found a solution in Iceland. The striking cover photo on the May issue of National Geographic shows Icelanders celebrating mid-summer in the Viking tradition with an enormous bonfire made entirely of-you guessed it-surplus wooden pallets.

Transportation goes to school:

Transportation goes to school: The Federal Highway Administration will sponsor its National Summer Transportation Institute again this summer at colleges around the country. The NSTI, launched in 1993, is one of several educational programs supported by the Garrett A. Morgan Technology and Transportation Futures Program. That's a Department of Transportation educational initiative aimed at encouraging development of math, science, and technology skills. NSTI host sites include historically black colleges and universities and other minority institutions of higher education across the nation. The program provides students with a four-week introduction to all modes of transportation and to transportation careers as well as academic enhancement activities.

For the record:

For the record: An item in the Up Front section of our April issue made reference to a theft of a check by a former employee of Roadway Express. Due to a reporting error, the item implied that the event occurred recently, when in fact it occurred in 1996. Logistics Management & Distribution Report regrets the error.

Proposed new hours-of-service rules met with criticism

Proposed new hours-of-service rules met with criticism from both sides of the issue even before they were announced last month. The proposed rules would require longhaul drivers to have 10 consecutive hours off in each 24-hour period, plus a two-hour rest during the work shift. Current rules allow drivers 10 hours on the job followed by eight hours off. Trucking interests say the proposal would hurt productivity and raise costs without improving safety, while safety advocates say allowing 12 hours of driving in a 24-hour period will lead to more accidents. Trucking groups also condemned a proposed requirement that trucks carry on-board recording equipment to monitor compliance with the rules.

Truck-related highway fatalities fell slightly last year

Truck-related highway fatalities fell slightly last year even as the number of trucks on the highways and the mileage they traveled continued to soar. According to preliminary statistics provided by the National Highway Traffic Safety Administration, fatalities in crashes involving large trucks dropped from 5,374 in 1998 to 5,203 in 1999. Overall, the nation recorded 41,345 traffic fatalities last year, down slightly from 41,471 fatalities in 1998.

The International Brotherhood of Teamsters has sued its former president, Ron Carey,

The International Brotherhood of Teamsters has sued its former president, Ron Carey, and nine other individuals for $9 million, accusing them of racketeering, embezzlement, breach of fiduciary duties, and legal malpractice. The union, which brought the suit under the Racketeering Influence and Corrupt Organizations (RICO) Act, claims the defendants participated in a plot to loot the union treasury in order to bolster Carey's re-election campaign in 1996. Carey won that campaign but lost to current General President James Hoffa after federal overseers ordered a new election.

No noise is good noise:

No noise is good noise: The United States and the European Union appear to be at an impasse over the EU's scheduled imposition of a ban on airplane hush kits, according to a report from the National Industrial Transportation League. Hush kits are noise-reducing mufflers primarily used on older aircraft engines. The United States contends that the ban unfairly targets the older U.S. cargo aircraft that use hush kits to comply with noise-reduction rules. The United States has filed a complaint with the International Civil Aviation Organization (ICAO). The EU has until June 30 to respond to that complaint.

Shipping hazardous materials is getting more expensive.

Shipping hazardous materials is getting more expensive. The Research and Special Programs Administration (RSPA), which regulates hazardous-materials shipping, has increased fees for hazardous-materials registration and expanded the number of shippers required to register. For the 12 months beginning July 1, shippers offering for transportation hazardous materials that require placarding will be required to register. Businesses that fall under the Small Business Administration's criteria must pay an annual fee of $300. All others must pay a registration fee of $2,000. Brochures and forms are available by calling (617) 494-2545 or requesting them by fax at (202) 366-7435 or by e-mail at REGISTER@rspa.dot.gov. This material may also be printed from the Hazardous Materials Safety Internet home page at hazmat.dot.gov/register.htm.

To understand the impact that the Internet will have on business, look back to the early days of the railroads,

To understand the impact that the Internet will have on business, look back to the early days of the railroads, recommends professor Martin Anderson, senior lecturer in management at Babson College in Wellesley, Mass. "When the world converted to railroads from ships, people made a lot of money in railroads. But they made much more money in the reorganization of business that occurred after that change," he told attendees at the Coalition of New England Companies for Trade's annual conference in Newport, R.I., last month. A similarly far-reaching redefinition of markets happened after the advent of the automobile, he said, and this process is once again under way thanks to the Internet.

A unique alliance between DuPont Global Logistics and international freight forwarder BDP International

A unique alliance between DuPont Global Logistics and international freight forwarder BDP International will bring together DuPont's expertise in logistics, hazardous-materials safety, and process quality with BDP's core capabilities in transportation management, freight forwarding, customs brokerage, customer service, and logistics information systems. The joint venture, called BDP Transport LLC, will take advantage of ocean shipping reform to offer small and medium-sized shippers the benefits of DuPont's purchasing power and BDP's international logistics services.