Management Update
An executive summary of industry news
By Staff -- Logistics Management, 10/1/2004
Get ready to dig deeper into your wallet, now that diesel prices have cracked the $2 per-gallon ceiling for the first time ever.
As crude oil approached an all-time high of $50 a barrel at press time last month, diesel prices rose in lockstep. For the last week of September, the U.S. Department of Energy reported that the average retail price of diesel fuel in the United States had risen by 10 cents per gallon, to $2.012. That means diesel prices have soared by 31 cents just since the end of June, and are 58 cents a gallon higher than they were one year ago.
The Senate has killed a controversial plan to require hazmat truckers to use global positioning satellite (GPS) systems.
New York Senator Charles Schumer last month proposed an amendment to the Homeland Security appropriations bill that would have required GPS for all vehicles moving hazardous materials. The measure would also have expanded background checks on holders of commercial drivers licenses and required carriers to file route plans with the Department of Homeland Security. The Senate tabled the plan, which was vigorously opposed by motor carrier groups such as the American Trucking Associations.
RFID could pump some life into the flat market for warehouse management systems.
RFID compliance mandates should generate significant revenues over the next three years for WMS vendors that offer modules supporting the use of RFID technology in warehouses, predicts ARC Advisory Group analyst Steve Banker. Last year, worldwide revenues for WMS packages dropped by 2.7 percent.
Warehouseman Mark E. Richards takes over the reins at CLM.
Earlier this month, Richards succeeded Elijah Ray as president of the Council of Logistics Management, the educational organization for logistics and supply chain professionals. Richards is currently vice president of Associated Warehouses Inc. Mary-Lou Quinto, director of global logistics for Genentech Inc., moved up to first vice president, and Rick D. Blasgen, senior vice president for integrated logistics at Con-Agra Foods, assumed the position of second vice president. Richard Jackson, senior vice president, logistics at Limited Logistics Services, was named secretary and treasurer. Elections were held at CLM's annual conference in Philadelphia.
Mexican truckers wanting to operate in the United States could hit another roadblock.
The House of Representatives last month adopted an amendment to the FY2005 transportation appropriations bill that would require foreign trucking companies operating in the United States to meet the same safety and certification standards as U.S. carriers. The amendment, offered by Massachusetts Congressman John Olver, would prevent the U.S. Department of Transportation from granting two-year waivers to Mexican motor carriers that don't meet U.S. standards. President Bush reportedly will veto the bill if the Senate attaches the Olver amendment. (For more on the cross-border controversy, see "New Order at the Border" in our September issue, or find it online at www.logisticsmgmt.com.)
Need real-life answers to your supply chain questions? Supply Chain Management Review, a sister publication to Logistics Management, has published a seven-volume series of books called Real Supply Chain Questions, Real Supply Chain Answers. The books address such topics as how to master the basics of supply chain management, design the right supply chain for your product, successfully collaborate with supply chain partners, leverage technology, implement change, and measure supply chain performance. Each volume includes articles written by leading supply chain practitioners, consultants, and academics. Single volumes cost $79; the entire set is available for $350. To order, go to www.scmr.com/books.
If you're concerned about U.S.-Mexico trade security, consider attending one of three seminars on that topic
to be offered by the U.S. Trade and Development Agency in four of Mexico's largest industrial centers. The agency will hold the one-day seminars Nov. 30 in Mexico City, Dec. 2 in Monterrey, Jan. 25 in Guadalajara, and Jan. 27 in Tijuana. The events are being held in cooperation with the U.S. Department of Commerce and the Mexican Trade Council. For more information, go to www.mexicotradesecurity.com.
Sirva has said goodbye to logistics.
The parent of Allied, northAmerican, and Global Van Lines signaled its departure from the asset-based logistics market with the sale of its specialized transportation business to a group of North American Van Lines agents. That unit handles less-than-truckload shipments of high-value goods, such as medical and telecommunications equipment. Sirva also will sell its European Specialized Transportation and Transportation Solutions divisions as part of its strategy to focus on high-return relocation services.
IBM is pumping up its transportation and logistics consulting practice.
Big Blue recently bought Maersk Data from A.P. Moller-Maersk Group of Denmark, the parent company of ocean carrier Maersk Sealand. Maersk Data provides consulting services and software development for transportation and logistics applications. IBM has indicated that it plans to combine its existing consulting practice with Maersk Data to form a Global Transportation and Logistics Competence Center that will serve both companies' customers.
With RFID in the technology spotlight these days, it was no surprise when a new RFID trade group debuted at
last month's Frontline Show in Chicago. The RFID Business Association (RFIDba) will represent the interests of both vendors and end users of this technology. RFIDba plans to promote the work of international RFID standards bodies as well as a wider understanding of the technology.
Former LM
columnist William Copacino has joined the ranks of shippers.
The long-time consultant recently was named chief administrative officer of C&S Wholesale Grocers, one of the largest privately held companies in the country. C&S provides distribution services to grocery chains and independent stores. Copacino, who until last month served as group chief executive of Accenture, is the recipient of several awards for distinguished service in logistics. He wrote the "Copacino on Strategy" column for this magazine for 18 years.
Sometimes a sense of humor can help when facing a challenge
—
and that certainly describes the Customs-Trade Partnership Against Terrorism's goal of achieving global supply chain security. One of our favorite C-TPAT stories comes from Michael Laden, president of Target Customs Brokers, a division of mega-retailer Target Corp. Laden told attendees of a recent American Association of Exporters and Importers conference that it wasn't hard to convince company executives to join the security program. "When we started to talk about whether we should participate in C-TPAT," he said, "one of the very first things I did was remind senior management that we were sitting in a building with a huge bull's-eye painted on the side."
That's a wrap...
In our September issue, we detailed how Kraft North America reduced in-transit damage by 70 percent. (See "Handle with care" at www.logisticsmgmt.com.) Kraft isn't the only company taking action on the damage front. Another is Procter & Gamble, whose "Stretch Wrap/Load Stabilization University" reduced shipment-quality problems by 50 percent. P&G's trainers demonstrate proper load-stabilization techniques and give employees hands-on instruction with palletizers and stretch wrappers. A bonus: Employees who've taken the training have reduced stretch-wrap usage by 20 percent.
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