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New thinking on infrastructure

By Peter Bradley | August 04, 2015 | 9:59 AM | Categories: Transportation

Congress continues to dawdle, postpone, pontificate, obfuscate and otherwise refuse to come to grips with reauthorizing highway and mass transit funding programs. Before heading off for August recess, both houses did agree on a three month extension of the current law, so at least states had funding for current projects during the peak construction season. You can see DC Velocity's latest report on the legislation's progress here.

Just as Congress went away without coming to grips with a long-term bill, along comes a timely new book on just how important fixing our infrastructure is to the health of the nation's economy. And the book, “Move: Putting America’s Infrastructure Back in the Lead,” comes from one of the nation's most respected and thoughtful business thinkers, Rosabeth Moss Kanter. A professor at Harvard Business School and former editor of Harvard Business Review, Kanter offers an analysis of what ails our transportation and other infrastructures and offers some thoughtful ideas on how to tackle them. It's book not just for transportation executives or those involved with managing transportation projects, but for anyone concerned with the long-term health of our economy.

I hope that someone of Kanter's stature addressing an issue that's usually given short shrift in the mainstream business press might help bring greater attention to the topic and help develop the sort of innovative approaches to dealing with some of the massive challenges. The book has already drawn important reviews in major publications, including the New York Times.

Now let's just hope key players in Congress take note as well, particularly of this from Kanter: “Infrastructure has no ideology. Bridges either stay up or fall down.”

Howard’s End?

By Mark Solomon | August 31, 2015 | 12:55 PM | Categories: Transportation

Imagine if the former editor and publisher of the Journal of the American Medical Association wrote an op-ed in the New York Times charging the physician community with being a threat to public safety, the AMA with blocking regulators’ efforts to make physician practices safer, and Congress with coddling doctors?

The trucking crowd was treated to this type of surreal scene nine days ago when Howard S. Abramson, who spent 16 years as editorial director of Transport Topics, which is owned by the American Trucking Associations (ATA) and considered trucking’s bible, penned a piece for the Times’ op-ed page excoriating the industry for “consistently” resisting efforts to improve road safety, and Congress for doing the “trucking industry’s bidding by frustrating” the regulators tasked with overseeing it. The column had the headline “The Trucks Are Killing Us,” and a drawing of a truck’s cab with a grill in the shape of a skeleton’s face.

If something was needed to shake off the summer slumber, this was it. Abramson, who also spent a number of years as Transport Topics’ publisher before leaving ATA in 2014, was blasted across the trucking spectrum from the executive offices of ATA to other trade journals. It became, for a couple of days at least, the talk of the somewhat clubby transportation journalism fraternity of which Abramson was a part, and who many still know well.

For full disclosure, this blogger worked for and with Abramson in the late 1980s and through the mid-1990s at two other publications. Here’s what is not in dispute: Abramson is a stellar journalist. He has deep experience covering all transport modes from every angle. He understands the business and journalistic sides of trucking. He is tough, and can be caustic, combative, and combustible. And he is nobody’s shill; he told this blogger several years ago that one of his biggest challenges was to keep Transport Topics independent from the state trucking associations that would want the magazine to serve as a mouthpiece for the industry’s line.

It is the reputation of Abramson’s fierce independence that may resonate long after the hubbub over his incendiary piece dies down. The trucking industry is locked in a fierce, emotional, and seemingly endless battle with safety advocates and the railroads over legislative and regulatory issues concerning highway safety. In fact, trucking is coming off a successful legislative period where it got a lot of what it wanted from Congress, namely a delay in the implementation of certain adverse regulations and an advancement of language allowing longer twin trailers on all of the nation’s federal-aid highways. For someone of Abramson’s prominence, and one so closely tied to trucking in so many ways, to use arguably the nation’s most powerful op-ed page to slam the industry is of no small matter to its lobbyists. Abramson was not a casual observer of the trade. Nor was his view colored by personal tragedy as so many anti-truck types who lost a loved one in a truck-related incident. He was an insider’s insider, with access few could match. That is influence the railroads and safety advocates couldn’t buy if they tried. As Congress returns from summer recess to attempt to pass a long-term transport funding bill, it will be interesting to see what impact, if any, Abramson’s column will have on lawmakers and on the status of pending truck safety legislation.

Abramson’s critics—and there a few—will say that he’s been gone from Transport Topics for 18 months, and that his power left with him. Others will call him a hypocrite, claiming he supported the industry when he needed a paycheck and turned on it only when there was nothing to lose. In e-mail exchanges, Abramson said he had felt this way for some time but couldn’t go public with his views while employed at ATA. He denied his column was an attack on the industry. “What I did was to write an opinion piece about a specific area of concern for me, and one that I believe should be a deep concern for anyone who drives on our roads,” he wrote.

Abramson stressed that he doesn’t want to put the industry out of business, that he is aware of trucking’s importance to the economy, and that he has a “deep understanding of the complexities the trucking industry faces.” But true to form, he’s not backing off. “I believe the trucking industry has done much to impede highway safety improvements … rather than supporting technologies that would lessen car-truck crashes, elements of the trucking industry have spent great energy thwarting their use,” he said. “I believe trucking has missed the opportunity to be seen as a partner with the motoring public in efforts to make our roads safer, and has made itself an adversary in this regard.”

Abramson called his op-ed a “service to the more responsible segments of the trucking industry,” saying some industry insiders and truck drivers share his view that special interests that put profits over safety are blocking efforts to employ available, proven, and affordable technology and processes that would reduce the number and severity of truck-related accidents. He also professed wonder at the backlash to his column. “In my many years of covering the trucking industry, I have often been baffled by the inability of those who run it to deal with constructive criticism,” he said.

And what about that slash-and-burn headline augmented by the skull and crossbones-like caricature? Abramson said the Times, like many publications, develops its own headlines and graphics. As one who has spent many hours working with Abramson, this blogger can attest to the truth of that statement.

Pallet experts teach safety course at Virginia Tech

By Ben Ames | August 20, 2015 | 12:21 PM

Searching for ways to improve the humble wooden pallet, supply chain professionals from around the country gathered in Blacksburg, W. Va., on August 4 for training on pallet design software.

Representatives from Amazon.com Inc., DuPont Co., and 19 other companies attended the two-and-a-half day educational short course at Virginia Polytechnic Institute and State University, titled “Wood Pallet Design and Performance: Pallet Design in the 21st Century.”

Together, the cross-section of pallet manufacturers and recyclers, pallet brokers and end-users learned how to design efficient and safe wooden pallets using the National Wooden Pallet and Container Association (NWPCA)’s Pallet Design System (PDS) software program, according to the university.

PDS users can improve pallet strength, stiffness, and durability by using the program to simulate design aspects such as pallet materials, the location and dimension of components, and loading and handling conditions. Attendees also tested their designs in a laboratory at Virginia Tech’s Center for Packaging and Unit Load Design (CPULD).

“CPULD at Virginia Tech is an outstanding facility to host a course on pallet design. The attendees were able to observe actual load tests in a lab setting while learning how to simulate loading a pallet using PDS,” said Brad Gething, Technical and PDS Manager at the NWPCA. Gething hosted the class along with CPULD director and Virginia Tech professor Laszlo Horvath.

The two groups will join forces to repeat the course in the spring of 2016 at a new location in Washington, D.C. For more information, see http://www.palletcentral.com or http://unitload.vt.edu.

Cybersecurity and your supply chain: a wake-up call

By Toby Gooley | August 06, 2015 | 1:02 PM | Categories: Supply Chain

By now, everybody on the planet is aware that criminals have at various times hacked into the customer databases of giant retailers like Target and Home Depot, and that even government agencies—including the military—are not immune to such crimes. But what many of us don’t realize is that our supply chains are also vulnerable to electronic infiltration.

As Drew Smith, founder and CEO of the computer security company InfoArmor, writes in “Is your supply chain safe from cyberattacks?” in the Q2/2015 issue of our sister publication, CSCMP’s Supply Chain Quarterly, global supply chains are highly reliant on the rapid sharing of data among supply chain partners. Yet each of these relationships represents a potential point of access to an organization’s proprietary information. Exchanging data with suppliers, it turns out, is risky business.

That last sentence deserves your full attention. Today’s integrated, interdependent systems, Smith notes, are rife with cybersecurity risks. These include the transmission of information to and from vendors; open access to data rather than “need to know” access; frequent changes in suppliers and products; a lack of standardization of security protocols among suppliers and other supply chain partners; and obsolete or infected hardware and software.

Smith argues that cybersecurity should therefore be an integral part of supplier vetting, and that every buyer should require its suppliers to meet specified security standards. “One of the most important and effective steps you can take,” he writes, “is to include cybersecurity protocols, conditions, and capabilities in the procurement function’s approval criteria for all potential new vendors.”

The Home Depot security breach came about because criminals obtained and manipulated vendors’ computer credentials. Target was compromised because a service provider failed to follow accepted information-security practices. If cybersecurity standards are not currently included among your vendor-approval criteria, I urge you to circulate Smith’s article in your procurement organization, and to conduct a risk assessment soon.

TMS is driving forward

By David Maloney | July 27, 2015 | 8:03 PM | Categories: Material Handling, Supply Chain, Transportation

A research survey released earlier this month shows just how important transportation management has become. The survey, conducted by InMotion Global (the folks behind the AscendTMS transportation management system), reveals that the use of TMS has more than tripled in the last 10 years.

The report details that 54 percent of logistics professionals currently use transportation management software in some way. InMotion Global says that is up from only 15 percent in 2005. And to show further how TMS is growing, the research also explains that of the remaining 46 percent not currently using a TMS, more than half say that they expect to use transportation management software within the next 12 to 24 months.

 Among other findings taken from the report: 

  • The two most common reasons for not using a TMS are cost (43%) and complexity (32%).
  • Trucking companies were most likely to use a TMS if they had more than 20 trucks in service (89%). For those with under 10 trucks, the percent using a TMS falls to just 31%. For those with under 5 trucks in service TMS use was only 16%.
  • Shippers and manufacturers used a TMS system primarily for LTL shipments (47%). However, that number rises to 73% if the shipper moved an average of 30 or more truckload shipments per week.
  • Home-grown TMS systems accounted for 6% of TMS systems in use today, and 3% of survey respondents use a freight module as part of another system (such as an ERP or sales management system). 

 Clearly transportation management systems are playing a more crucial role than ever before in managing the flow of goods. Companies have learned through experience and through their competition that decisions need to be done in a smarter way using available data. A good TMS fills that role.

J.B. Hunt study shows ways to boost trucking efficiency

By Ben Ames | July 27, 2015 | 7:28 AM | Categories: Material Handling, Transportation, Warehousing

Logistics partners in every part of the supply chain are in a constant hunt to increase driver utilization and optimization in trucking fleets—whether their own, their partners’, or their 3PL’s.

Now a white paper from J.B. Hunt Transport, Inc. says one solution for wringing maximum efficiency out of the Hours of Service regulations covering the legal driving limits for commercial motor vehicles (CMVs) may be right under our noses—inefficiencies at the loading dock.

Breaking down the math around the DOT-regulated driver’s “on duty” day of 840 minutes (14 hours), the report shows how quickly those minutes can drain away. The rules require a 30-minute break and 150 minutes for everything else a professional driver does, including pickup, delivery, safety inspections, and shutdown.

A quick calculation shows that leaves just 660 minutes of actual driving time per day, but surveys show most drivers fall far short. The J.B. Hunt report cites figures showing that a typical driver loses valuable time on activities such as empty drive time, appointment inflexibility, and time spent at the shipper or receiver location. Multiply that over many loads, and there’s no mystery what happens to missing capacity.

The paper points out ways to avoid those wasted minutes, such as:

  • shave down loading and unloading times
  • utilize a drop-and-hook strategy strategy instead of live unloading
  • push back against rigid pickup and delivery times
  • shrink shut-down time by asking shippers to provide onsite parking and amenities
  • furnish a more predictable schedule to avoid cancellations, short lead times, multi-stop loads and other headaches

To read the full whitepaper, check out http://blog.jbhunt.com/wp-content/themes/files/pdf/660_Minutes.pdf.

A merger of material handlers

By Ben Ames | July 24, 2015 | 1:53 PM | Categories: Material Handling, Supply Chain

Two companies made news in the material handling sector this month when Inmar, the Winston-Salem, N.C.-based firm that operates supply chain, promotions, and healthcare platforms for retailers and manufacturers, announced it had acquired Scanner Applications. 

Inmar’s core business is supplying technology to help its clients operate intelligent commerce networks, connecting offline and online transactions in real time for retailers, manufacturers, and their trading partners. More specifically, the Inmar Supply Chain Network combines the unique transaction processing of returns with real-time analytics to enable supply chain improvement and facilitate reverse logistics.

Scanner Applications, of Cincinnati, supplies turnkey solutions for trade promotion management and tracking services. Combine that with Inmar’s offerings—such as digital and paper coupon and rebate processing and settlement, digital coupon distribution, promotion analytics, and shopper behavior research—and the new partners think they have something special.

The two companies plan to join forces to create a broad suite of consumer and trade promotion solutions for retailers and consumer packaged goods manufacturers, as shoppers increasingly demand both flexibility and personalization from retailers.

 As part of Inmar, the Scanner Apps team will continue to operate from its Cincinnati location, enabling Inmar to extend its presence in that area of the U.S. For more information, check out www.inmar.com.

Why supply chain managers should care about material handling equipment

By Toby Gooley | July 14, 2015 | 1:23 PM | Categories: Material Handling, Supply Chain

Back in March, I attended the biennial ProMat trade show in Chicago. ProMat, produced by the trade association MHI, boasts more than 800 exhibitors and largely focuses on material handling equipment, technology, and services for warehouses and distribution centers (DCs). I was there in my role as a senior editor for DC Velocity, but could not help thinking about what the show had to offer readers of CSCMP's Supply Chain Quarterly, the Council of Supply Chain Management Professionals' member magazine of which I am editor. Among all the forklifts, conveyors, and other material handling equipment I found much that could—and should—pique the interest of supply chain managers and executives.

Why should someone who lives in the world of inventory management, demand forecasting, and network optimization devote time to learning about material handling equipment? Because that equipment is what makes it possible to implement supply chain strategies. Without efficient warehouses and distribution centers supported by new equipment and technology, all you have is a plan on paper (or a computer screen). And with supply chains undergoing increasingly rapid transformation influenced by disruptive technology, this has become an area supply chain managers can’t afford to ignore.

Here are just a few examples of the intersection of material handling and supply chain strategy from the show:

  • Much of the more sophisticated equipment on display, such as goods-to-person systems and automated storage and retrieval systems, could play a role in helping companies address broader supply chain concerns—for instance, speed to market and bringing consistent performance to global operations. Vendors are providing complex solutions designed from the customer back—that is, starting with a problem or a new market imperative, and developing equipment and technology that not only address that need, but also revise upstream and downstream processes as needed.
  • E-commerce appears to be the single greatest factor influencing material handling equipment development. The design, or redesign, of everything from packaging equipment to conveyors and sortation systems to order picking and storage systems is being heavily influenced by the unique needs of e-commerce fulfillment. Software, too, is under the microscope; warehouse management systems (WMS), for instance, are being retooled to keep up with e-commerce’s faster pace and its focus on individual piece picking and shipping.
  • Robotics has matured from a gee-whiz novelty to an important tool for bringing consistent, reliable, 24 x 7 performance to an array of tasks in high-throughput distribution centers. Robotic equipment—including some that is designed to work alongside human order pickers and packers—could mitigate the effects of labor shortages and allow more workers to shift from ergonomically challenging, repetitive activities to those that truly require human input. With labor availability, training, and management expected to become more problematic in the future, it’s time to look at robotics as a viable solution.

For more examples, as well as commentary on how this important subject fits into the big supply chain picture, be sure to read MHI’s Material Handling & Logistics U.S. Roadmap report at www.mhlroadmap.org. We've also covered the report at DCV.

On track in Texas

By David Maloney | June 25, 2015 | 8:17 PM | Categories: Lift Trucks, Material Handling, Supply Chain, Transportation, Warehousing

Yesterday I was in Pharr, Texas working on a print story and a video at a company called McCoy’s Building Supply (look for this story in an upcoming issue of DC Velocity). As the name implies, McCoy’s provides lumber, hardware, shingles, blocks, and a full range of other building products to construction firms from over 80 locations throughout five southern states. I was there to look at their use of Toyota lift trucks, particularly in moving the heavy loads within their yard.

 

The Pharr facility does a little of everything. It serves as a distribution point for other McCoy stores in south Texas and there is also a retail store attached to the lumberyard that provides hardware and other home improvement products to do-it-yourselfers.

 

What struck me as uncommon about this facility was that it had a rail spur in its yard. While rail is often used to supply manufacturing facilities, few distribution operations in the U.S. have rail connections. Two flatbed rail cars had been dropped off onto the spur the night before I visited. Heavy-duty pneumatic-tire lift trucks were used to quickly unload the cars the following morning, taking advantage of their ability to access the rail cars from both sides.

 

Of course, a lot of freight moves by rail in North America. It is the most cost-effective ground transport available to shippers. Most rail loads, though, have to transfer to trucks to reach a D.C. Having a rail spur in their yard allowed McCoys to purchase full train car loads, which gave them better pricing and saved on freight. The product is then distributed to other local McCoy’s stores.

 

Possibly in the future we will see more distribution networks designed to better take advantage of direct connections to rail, gaining the efficiencies and cost savings found with being on-track.

Fast track off track on trade disputes

By Peter Bradley | June 23, 2015 | 10:25 AM | Categories: Supply Chain, Trade

With its vote to end a Democratic-led filibuster, the US Senate will pass fast track authority this week for the Trans-Pacific Partnership(TPP), the most wide ranging trade deal since the North American Free Trade Agreement. The House will be under enormous pressure to go along.

Most of the details of the pact remain secret as negotiations continue, and that secrecy is one of the reasons that authorizing fast track authority has run into opposition. 

But a more contentious part of the deal is the Investor-State Dispute Resolution (ISDS) mechanism. That creates a binding arbitration process by which foreign investors can challenge a nation's laws or regulations that they contend unfairly cause those investors economic harm. 

ISDS has been a part of trade agreements for a long time. but as large international firms have used the process more and more often to go after laws and regulations they don't like, ISDS has become a central issue to opponents of TPP and similar agreements (notably the now stalled Transatlantic Trade and Investment Partnership.) 

When you look at some of the ISDS challenges, it's no wonder. As the Economist reports, "Among the cautionary examples often cited are the suit brought by Vattenfall, a Swedish energy firm, against the German government for phasing out nuclear power after the Fukushima disaster and that of Veolia, a French utility, against the Egyptian government for raising the minimum wage." And there others like that that create similar concerns. Philip Morris Asia, for example, has challenged Australia's rules aimed at reducing smoking by requiring health care warnings on tobacco packaging under the ISDS procedures. The results of that case are pending. Furthermore, ISDS cases have proliferated, jumping sharply over the past decade or so, 

It surprises me that the Obama administration has not seemed amenable to reforms in the ISDS process to allay at least some of the concerns of the TPP opponents. The Economist, in the same report, says European trade authorities, in an effort to restart the transatlantic talks,  have suggested changes that would make the process more like that found in courts of law, with public access, permanent arbitrators, and an appeals process.

The original idea behind ISDS processes was to protect investors from arbitrary and confiscatory rules in nations where they invested in order to encourage that very investment. But it seems to being used more often to challenge laws and regulations that are merely inconvenient--health and environmental rules, minimum wage laws and the like. Furthermore, with business investment flourishing around the world, even the need for ISDS might be questionable.

I'm no foreign trade expert, but a process that could let outside arbitrators rather than our own courts determine whether our rules and regulations are legitimate--a process, by the way not open to all-- makes me as a citizen pretty uncomfortable.

 

 

Parcel carriers behaving badly

By Mark Solomon | June 08, 2015 | 9:20 AM | Categories: Transportation

Duopolies should be able to make bundles of money the above-board way without resorting to tactics that could be described as underhanded or just downright dumb.

The latest incident came to light last month when the Justice Department said UPS Inc., one half of the B2B parcel duopoly in the U.S., agreed to pay $25 million to settle claims that, for 10 years, the company knowingly recorded inaccurate delivery times on packages shipped to hundreds of federal agencies to make it appear the packages were delivered on time. UPS also applied inapplicable exception codes designed to excuse late deliveries, and provided incorrect on-time performance data. UPS’ objective, according to DOJ, was to conceal its failure to meet its “Next Day Air” delivery commitments, which would have allowed the government to claim refunds through the money-back guarantees called for under contracts with the General Services Administration and the U.S. Transportation Command.

UPS did not acknowledge liability, and paid the fine to avoid the prospects for lengthy litigation. Susan L. Rosenberg, a company spokeswoman, said the company has worked to improve systems, training, and technology since it became aware of the issue.

The issue is a practice known as “stopping the clock,” where a carrier will, at times, game the system to appear a particular route has few or any service failures. The clock starts when a shipper selects a service level. The clock stops when a package is delivered and a proof of delivery is furnished, when a carrier encounters bad weather, a wrong address is entered, the recipient is not available, or if Customs holds a package. These are all legitimate causes. The problem arises when carriers, under pressure to hit tough deadlines, play fast and loose with events. There are as many as 60 codes at a carrier’s disposal that stop the clock; many can be and are used inappropriately, and the result is that the customer has no recourse to file a claim. Even if they do, most lose because the carrier’s can prove that there was a code invoked that stopped the clock.

Jerry Hempstead, who worked for decades at top positions at Airborne Express and DHL Express in the U.S., called it a widespread problem that demonstrates no respect for the shipper or the consignee. Hempstead said it’s caused by a culture of fear that flows from line supervisors to drivers to “make service no matter what it takes” in order to make their service numbers and get the bonuses and promotions that accompany good results often arise from that. “When employees are under pressure, and performance reviews, and compensation are involved, sometimes poor judgment enters the equation,” he said.

This isn’t the first time of allegedly bad behavior by either company. Nearly two years ago, FedEx Corp. reached a tentative $21.5 million settlement with thousands to shippers to resolve allegations the company overcharged commercial customers by misclassifying their shipments as residential deliveries to extract higher surcharges. Last year, DOJ accused FedEx of being part of a criminal conspiracy by knowingly transporting illegal drugs on behalf of two rogue pharmacies. The year before, UPS settled similar claims out of court; FedEx plans to fight the charges.

UPS and FedEx dominate the US B2B parcel market, and no one is in sight to challenge them. Yet they’ve been accused of acting in ways that would make them out to be scrappy newcomers willing to push the boundaries of the law just to get their names known. The two companies combined cover virtually all corners of the earth and employ hundreds of thousands of people. It’s true that there’s opportunity for sleazy stuff to go on well below the eyes of upper management. Still, the culture if formed at the top, and if messages aren’t permeating all the way down the line, then, like it or not, the buck stops in the C-suite.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

Thoughts from our editors.



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