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Management Update

Staff -- Logistics Management, 4/1/2003

  • The third-party logistics industry defied predictions and grew around 7 percent last year. That's the assessment from Richard Armstrong, who compiles the annual guide to third-party logistics, "Who's Who in Logistics?" According to Armstrong, the industry saw increases in turnover, net revenues, and net income. By his estimate, total revenues rose from $60.8 billion in 2001 to $64 billion in 2002. Most of that growth came in the areas of international services, value-added warehousing, and dedicated contract carriage. Domestic transportation management in the United States, by the way, shrunk last year.

  • The exodus continues at the Surface Transportation Board with the departure of yet another key official. In February, former chair Linda J. Morgan announced that she would be leaving this month, nearly nine months before her term expires. Now Vice Chairman Wayne Burkes says he's leaving the STB to seek political office in his home state of Mississippi. That leaves only current chairman and recent Bush appointee Roger J. Nober on the three-member board. Logistics Management's Pricing columnist Ray Bohman says it's unclear whether a single member of the board has the authority to issue rulings. If not, that will leave shippers and carriers on hold until President Bush appoints new members—a process that could take months.

  • Who's overseeing logistics operations for the U.S. military in the war against Iraq? The man who's ultimately responsible for getting supplies and materiel to U.S. troops in the Middle East is Major General Dennis K. Jackson, who joined the Army in the late 1960s after graduating from the ROTC program at the University of Wyoming. The highly-decorated Jackson became U.S. Central Command Director of Logistics in August 2000. He has held a number of management positions in the service, including a stint as director of logistics for the U.S. Pacific Command. Jackson also holds an MBA from Florida Institute of Technology.

  • If you need to find out the latest developments in logistics and supply chain software, then the Distribution/Computer Expo, scheduled for May 20—22 at Chicago's Navy Pier, is the place to be. The event kicks off with educational seminars and product demonstrations on May 20; exhibit hall doors open the next day to showcase the newest products from the industry's top vendors of logistics and supply chain applications. You can find a DC/Expo show guide following Page 44 in this issue. Logistics Management, by the way, plans to broadcast live Webcasts from the show floor. For more information or to register, go to www.logistar2.com or call (800) 338-4112.

  • There's a new twist in ocean shipping contracts this year. With so much riding on compliance with new trade security rules, more and more shippers are writing security-related requirements into their annual service agreements with ocean carriers. To ensure that they will be in compliance with Customs' increasingly strict rules, some shippers now are specifying in their contracts that ocean carriers meet security standards such as those for the Customs-Trade Partnership Against Terrorism (C-TPAT). They're also writing time-specific commitments for carriers to provide shipment data, notes Beth Peterson, vice president, product development at Qiva, a provider of international trade management software.

  • Troubled by new the homeland security rules? Then direct your complaints to Rep. Dave Camp (R-Mich.) He takes over as chair of the newly formed Infrastructure and Border Security subcommittee of the House of Representatives. That panel—part of the new House Select Homeland Security Committee—oversees most of the security-related regulations affecting transportation and logistics. Rep. Loretta Sanberg (D-Calif.) will serve as the ranking subcommittee member.

  • Longtime Logistics Management columnist William C. Copacino now has bigger shoes to fill. The former managing partner of Accenture's Global Supply Chain Management practice was named group chief executive of Accenture's Business Consulting group. In that role, he will assume responsibility for five consulting service lines as well as several professional service units. Copacino received the Council of Logistics Management's 1998 Distinguished Service Award and the 2002 Syracuse University School of Management Harry E. Salzberg Medallion. A graduate of Cornell University and Harvard Business School, he has been a partner at Accenture since 1989.

  • A successful WMS implementation can cut warehouse operating costs between 10 and 35 percent. That's the word from consulting firm KOM International Inc. in its recent white paper, "Warehouse Management System Cost Justification." If warehouse operations represent 2 to 3 percent of sales, the report's authors say, then a WMS can add between .2 to 1.0 percentage points to the company's bottom line. Those benefits come from such factors as labor savings, inventory reduction, faster order turnaround time, and reduced returns, to name a few.

  • North American brokers unite. In response to stricter border-crossing procedures mandated by U.S. Customs in the interest of ensuring security, customs brokers from the United States, Canada, and Mexico are getting together to present their suggestions for improvement. The National Customs Brokers and Forwarders Association of America (NCBFAA), the Canadian Society of Customs Brokers (CSCB), and the Confederación de Asociaciones de Agentes Aduanales de la República Mexicana (CAAAREM) have agreed to jointly address several customs matters. Foremost among them will be compliance with the 24-hour advance manifest rule. The trio of associations also plans to discuss how customs authorities receive and use automated information from carriers, shippers, forwarders, and brokers that do business among the three countries.

  • Stevedoring Services of America has been awarded a contract to operate the Iraqi port of Umm Qasr. Secured by U.S. troops in March in the early days of the war, the 23-berth port is Iraq's only deepwater hub. The Seattle-based company won the $4.8 million one-year contract from the U.S. Agency for International Development (USAID) last month. SSA will be responsible for efficiently operating the port, which will be USAID's main conduit for humanitarian and reconstruction materials. SSA has also been charged with facilitating warehousing, shipment tracking, storage, and onward forwarding, as well as managing truck access and security at the port.

  • Big Brown will soon sport a more colorful appearance. United Parcel Service will add new colors to its familiar brown logo and remove the bow-tied parcel that tops the brown-and-gold "shield" logo that has long been displayed on personnel uniforms and company vehicles. The parcel giant plans to spend $20 million on its redesign this year, which does not include advertising. It's estimated that it will take UPS three years to repaint all its vehicles and six years to change the look of its jets.

  • If you feel like you're part of the reason your company is successful, you're not alone. A survey conducted by Chicago-based HR Solutions Inc. found that 70 percent of employees in the transportation and logistics industry believe that their employers make it possible for them to contribute directly to their companies' success. That compares to 62 percent of employees in all industries. Roughly 119,000 transportation/logistics employees responded to the survey over the last three years.

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