Management Update
An executive summary of industry news
By Staff -- Logistics Management, 4/1/2004
Last month's terrorist bombing of a train in Madrid has prompted calls for more funding for railroad security.
Senators Joe Biden and Tom Carper, both of Delaware, sponsored legislation to authorize $515 million for railroad security. Their bill would order the Department of Homeland Security to undertake a risk assessment of rail security threats and devise steps railroads should take to protect their infrastructure. Senate Commerce Committee Chairman John McCain of Arizona has already said he wants a rail security bill to be ready for passage this month.
Wal-Mart will have trouble meeting its ambitious deadline for putting radio frequency tags on shipments. The New York Times reported last month that the giant retailer had pushed back from March to June a deadline for prescription drug makers to apply the transmitter tags to their products. Last year, Wal-Mart issued a mandate to its top 100 suppliers to begin tagging shipments to certain distribution centers and stores by the end of this year; drug makers were in the group of suppliers with the earliest deadline. The Times reported that the pharmaceutical companies have hit some snags in deploying RF tags, including cost, lack of uniform standards, and readability problems.
Leading logistician and economic analyst Robert V. Delaney passed away early this month. Best known as the co-author of the annual "State of Logistics Report," which quantifies the impact of logistics on the U.S. economy, Delaney had worked in the distribution profession for some 40 years. He had recently become a consultant to the Council of Logistics Management after serving as a vice president of Cass Information Systems. Delaney also was well known for playing a major role in promoting transportation deregulation.
Third-party logistics companies saw strong revenue growth for the ninth consecutive year.
Armstrong and Associates last month reported that U.S. providers of contract logistics services posted $32.9 billion in net revenues in 2003, a 6.1-percent increase over the previous year's number. Gross revenues rose by 8.2 percent to reach $76.9 billion. Armstrong and Associates, publisher of the guidebook Who's Who in Logistics, ranks the top contract distribution companies each year.
Should the Big Apple promote more off-peak deliveries? The New York State Department of Transportation has hired Rensselaer Polytechnic Institute to conduct a study to determine business' interest in and support for increasing deliveries outside of regular business hours to mitigate traffic congestion in New York City. Among other things, the study seeks shippers' input on what kind of incentives would be required to encourage companies to deliver goods between the hours of 7:00 p.m. and 6:00 a.m. To participate in the study, go to www.zoomerang.com/recipient/survey.zgi?p=WEB2EG3GG94W.
Where's the best place to get the latest news on software trends and radio frequency identification?
Head for the 22nd annual Distribution/Computer Expo in Chicago, slated for May 18–20. The D/C Expo showcases software and systems for supply chain, logistics, distribution, transportation, warehousing, and RFID applications. Registrations for the show are up compared to last year, says organizer CS Report Inc. Details on the exhibition can be found at www.logistar.com. By the way, Logistics Management Magazine will be at Booth No. 1229. We'll also be hosting a live Webcast from the show floor, and in a separate session will present an advance look at the results of our exclusive supply chain software study, to be published in the May issue. For more information go to www.logisticsmgmt.com.
Who's liable if a driver keeps on trucking beyond the quota for driving hours under the new hours-of-service rules? That question was raised at last month's annual meeting of the Transportation Consumer Protection Council. David L. Jordan, a logistics executive with McCormick and Co., wondered if a shipper might be held liable for refusing a driver a place to rest. He noted that the current legislation is flawed because it provides no "safe haven" clause allowing a driver to get to a safe rest area after running out of driving time.
Motor carriers have asked the federal government to prevent rising energy prices from crippling their industry. In a letter to Energy Secretary Spencer Abraham, American Trucking Associations President Bill Graves warned that surging fuel prices could also act as a roadblock to economic recovery. At press time, average diesel prices had hit last year's high-water mark and gasoline prices had reached an all-time high. (See the news item on page 21.) "With oil prices continuing to rise, plus the Organization of Petroleum Exporting Countries cutting production, we remain concerned about prices in the future," Graves said in his letter.
The U.S. DOT has thrown its weight behind a proposal to let ocean consolidators enter into confidential contracts. In a filing with the Federal Maritime Commission, the Department of Transportation said that ocean consolidators, also known as non-vessel-operating common carriers (NVOCCs), should be freed from the tariff-publication requirements imposed on them under the Shipping Act of 1984. DOT contends that the law should treat NVOCCs the same way it does ocean carriers, which are allowed to enter into individual, confidential contracts with their shipper customers.
More truckers will be trained to become highway watchdogs for the government. The American Trucking Associations has entered into a $19.3 million agreement with the federal Transportation Security Administration to continue and expand its Highway Watch program, which trains drivers to spot and report potential security problems to authorities. The ATA said the money would be used in part to enable its emergency call-in center to handle more calls and coordinate with states' "Amber Alert" missing child programs. Launched in 1998, Highway Watch is a joint effort of the ATA and the Federal Motor Carrier Safety Administration.
If you have any last-minute thoughts on the Conrail breakup, you have one more chance to be heard.
When the Surface Transportation Board (STB) approved dividing up Conrail between CSX Transportation and Norfolk Southern in 1998, it promised to hold hearings on the impact of its decision. The final hearing on that subject will be held May 3 in Washington, D.C. Information on participating in the hearing is available at www.stb.dot.gov.
AIM has honored two industry pioneers with its 2004 Dilling Award. Craig K. Harmon, president of QED Systems, received the prestigious award from AIM, the association for Automatic Identification and Mobility, for his contributions to the advancement of automatic identification technologies. Harmon has long played a role in the development and adoption of data collection, communications, and RFID standards. The award was presented posthumously to George Goldberg, who founded a leading supplier of bar-coding supplies and launched the first publication about the automatic identification industry in 1977.
You need to go to "WERC" if you want to learn more about warehousing. The Warehousing Education and Research Council (WERC) will hold its 27th annual conference May 16–19 in Atlanta. Wal-Mart's CEO, H. Lee Scott Jr., heads a list of industry leaders who are scheduled to speak at the event. The conference will offer 15 feature presentations and 30 other topic sessions for attendees. For more information, visit the organization's Web site, www.werc.org.
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