Management Update

An executive summary of industry news

Keep a close watch on proposed mandatory requirements for importers participating in C-TPAT. U.S. Customs and Border Protection (CBP) is circulating a plan that calls for minimum standards for the Customs-Trade Partnership Against Terrorism. Since the program began, compliance standards have not been clearly defined. Now, Customs officials want to set specific criteria in six areas: business-partner selection, container security, physical access controls, personnel security, procedural security, security training and threat awareness, physical security, and information technology security. (For more on this topic, see "C-TPAT: Separating hype from reality" in the August 2004 issue, available at www.logisticsmgmt.com.)

Don't look for more federal dollars for fixing roads this year. Both the House and Senate approved an eight-month extension of the current funding levels for highway, public transportation, and road-safety programs. Disputes over funding levels and a formula for distribution hijacked a multi-year spending bill in a House-Senate conference committee. The bill's chances for passage appeared to be doomed early on when the White House took a hard line against the House of Representatives' push to increase highway spending.

Before heading home to campaign, Congress weighed in on the HOS dispute, passing legislation to keep the current hours-of-service (HOS) rules for truck drivers in place for another year. Lawmakers took that action as part of a bill extending highway funding until May 31, 2005. The HOS rules that took effect in January were cast in doubt by a federal appeals court when it sided with safety advocates who contended that the regulations did little to curb driver fatigue. The court ordered the Federal Motor Carrier Safety Administration (FMCSA) to develop a new set of regulations—a position opposed by safety advocates, who sought restoration of the old driving rules. The current regime will remain in place until either the FMCSA develops new rules that satisfy the court or until September 30, 2005, whichever comes first.

Another big merger between European 3PLs could be in the offing. Motor Transport, our sister publication in the United Kingdom, reported last month that Christian Salvesen, the third-largest third-party logistics (3PL) company in that country, was in preliminary merger talks with TDG, the sixth-largest 3PL. There's also been speculation that Wincanton, the second-largest 3PL, may want to seek a merger with Salvesen in place of TDG. Industry consolidation has been a hot topic since Exel became the U.K.'s largest 3PL by acquiring Tibbett & Britten.

Warehousing consultant John M. Hill has received a top materials handling industry award. The Material Handling Education Foundation honored Hill with the Reed-Apple Award for his contributions to industry knowledge and education. Hill, a pioneer in the fields of automatic identification and warehouse management software, is principal in the consulting and integrations firm ESYNC. The foundation gave its other top honor, the Norman L. Cahners Award, to John B. Nofsinger, who heads the Material Handling Industry of America (MHIA), a trade association for materials handling equipment manufacturers and service providers.

Missed the Global Supply Chain Conference last month? You can still check out the proceedings of this annual educational forum, which was co-sponsored by Logistics Management, Supply Chain Management Review, and Modern Materials Handling. Start by reading the summary of the sessions, which are grouped in three tracks of interest to logistics, warehouse, and supply chain managers, in a special supplement following Page 80 in this issue. The video and audio presentations from the virtual conference will be archived online until the end of January. To access the conference proceedings, go to www.scmr.com/GSCC.

DHL Worldwide Express may relocate its European hub as a result of a dispute over nighttime flights. The express delivery giant has threatened to close its Brussels hub because the city government won't allow an increase in the number of late-night flights it operates. Aircraft noise has become a major issue throughout Europe, and airports such as London's Heathrow have set night-noise limits in response to public opposition. Such restrictions hamper express carriers, which rely on overnight flights to meet next-day delivery commitments.

Need to know even more about what's happening in the express package world? Then sign up for the World Mail & Express Americas conference and exhibition, slated for Dec. 6 and 7 in Miami. Although the program, which features presentations from top express and mail executives, is primarily aimed at service providers, there's plenty of value for shippers. A special forum for users of mail and express services will take place prior to the main event. The organizer is Triangle Management Services, a U.K. consulting company specializing in mail and express transportation. More information is online at www.triangle.eu.com.

A new design concept could open shallower waters to barge traffic. The Mod 1 Hull is designed to operate in shallow drafts, such as the upper reaches of the U.S. inland waterways system, as well as in deep-draft areas such as the Gulf of Mexico and the Caribbean Sea. The introduction of such vessels could provide shippers with a cost-effective alternative to truck or rail for inland movements of containerized cargo, including 53-foot equipment.

The Chinese government has hired a U.S. company to gather data for road-improvement projects. The Lansmont Corp. of California will place special instruments in hundreds of trucks throughout China. Those instruments will measure a variety of conditions, including shock and vibration levels. The Chinese government will use the devices to map its road network and gather data to prepare national highway standards. The study was prompted in part by U.S. companies' concerns about shipment damage caused by using Chinese roads.

What's in a name? Apparently quite a lot, as yet another professional group plans to change its moniker. "APICS—The Educational Society for Resource Management" will become "APICS The Association for Operations Management" starting Jan. 1, 2005. The organization will also add the tag line: "Advancing Productivity, Innovation, and Competitive Success." APICS was founded in 1957 as the American Production and Inventory Control Society. APICS is not alone in its desire to reflect its changing mission; in January the Council of Logistics Management will change its name to the Council of Supply Chain Management Professionals.

Do you really understand what "lean" means? In the September issue of his Warehousing Forum newsletter, consultant Ken Ackerman offers his definition for the term "lean warehousing." Ackerman writes: "Lean warehousing is the process of identifying and eliminating waste, not fixing something that is wrong. In the warehouse, waste is measured in time, space, and excess inventory. Lean warehousing requires continuous effort and improvements."

A management buyout is in the works for Arnold Transportation Services. Current management of the truckload carrier, led by President and CEO Mike Walters, has proposed buying a 51 percent stake from Jefferies Capital Partners. Truckload carrier U.S. Xpress Enterprises would buy the other 49 percent share, but the two companies will operate independently. Arnold operates approximately 900 owned tractors, 520 tractors provided by owner-operators, and more than 4,000 trailers, primarily in the Eastern United States.