United States’ ‘Deteriorating Infrastructure’ Causes Drag on Economic Growth

(Business Wire)

The US Chamber of Commerce has released what it calls the first-ever nationwide and state-by-state Transportation Performance Index which shows a significant decline over the last five years in how America’s transportation infrastructure is serving the needs of domestic commerce, international trade, and the overall US economy. The annual index is the first of its kind designed to look over time at how US transportation infrastructure is serving the needs of the US economy and business community.

“The performance of the nation’s transportation system is not keeping pace with the rate of growth of the demands on that system,” said Thomas J. Donohue, president and CEO of the US Chamber of Commerce. “As our economy recovers, the nation’s transportation infrastructure must be prepared to meet the projected growth in freight and population. In fact, a 10-point improvement in the new national transportation index could generate 3% more growth in the nation’s Gross Domestic Product. However, our index shows that from now through 2015 there will be a rapid decline in the performance of the system if we continue business as usual. Right now we’re on an unsustainable path.” Read more here.

Companies Redefining Supply Chain Officer Role

(Supply Chain Digital)

SCM World has released its 2010 Chief Supply Chain Officer Report which revealed how companies are redefining the role of the supply chain officer. The report, designed and developed to draw out critical insights that drive C-level supply chain executives in 2010, surveyed 400 senior global supply chain and procurement executives.

It uncovered how companies are redefining the role of the Supply Chain Officer in the rapidly shifting macro economic climate. In turn, the report reveals how executives are positioning their organizations to remain competitive in an increasingly globalized and complex operating environment.

One of the report’s key findings revealed that 49% of respondents will increase investment in supply chain related technology this year. The study also found that Best-in-Class firms are 50% more likely to have an executive position with end-to-end SCM responsibility. Read more here.

Logistics Expenditures Hit Record Lows in ‘09, Report Says

(DC Velocity – Mark B. Solomon)

CSCMP’s 21st annual State of Logistics Report shows steepest year-over-year decline in study’s history

One word could best sum up the state of the U.S. logistics industry last year.

Ugly.

The cost of operating the nation’s business logistics system declined in 2009 to $1.1 trillion, an 18.2% drop from 2008 levels and the steepest year-on-year fall since record keeping began in 1981, according to the annual State of Logistics Report released today in Washington, D.C.

In all, business logistics costs last year declined by $244 billion over 2008, the report said. In the past two years, logistics costs fell by almost $300 billion, with most of 2008’s drop occurring after the financial crisis hit in September and U.S. and world economies went into virtual free-falls.

The 2009 numbers mark a sharp turnabout from the 2003-2008 period, when logistics costs rose in aggregate by 50% as the nation recovered from the relatively brief and modest recession of 2000-01.

Logistics costs measured as a percentage of U.S. gross domestic product (GDP), a closely watched metric of the supply chain’s relevance to the nation’s output of goods and services, dropped last year to 7.7%. That key ratio also hit a level not seen since data has been kept. Read more here.

CSCSC Program Can Grant Thousands in New-Hire Wages

(Canadian Transportation & Logistics)

The Canadian Supply Chain Sector Council (CSCSC) is now accepting applications for the second year of its Career Focus Program, which gets underway April 1. Under the program, companies that hire a new employee in a supply chain role can receive up to $12,750 from the CSCSC to help pay his or her wages for a year. More information about supply chain roles can be found on pg. 2 of the CSCSC’s Supply Chain Sector Facts and Figures document.To be eligible, the employee must be a post-secondary graduate of a university, college, association or private-sector program, and be between the ages of 15 and 30.

To participate, companies first enroll in the program, then select a candidate, complete an application form and, if approved, submit proof of wages paid in each pay period. Approval of applications takes just one or two days, according to the CSCSC. Applications are assessed on a first-come, first-served basis.

To find out more, go here or contact Sheryl Keenan at 905-897-6700, 1-866-616-3468 or skeenan@supplychaincanada.org.

Top 10 Logistics Challenges for 2010 (and Beyond)

(DC Velocity – Clifford F. Lynch)

Economists are in broad agreement that a recovery is under way, but that's not to say our troubles are over. In fact, it's likely the logistics/supply chain community will continue to experience difficulties throughout the year.

What are the biggest concerns? With apologies to David Letterman, I have developed a "Top 10" list of issues that bear watching in 2010. In no particular order, they are as follows:

1. The precarious health of the LTL industry. Weak volumes and cut-throat pricing have taken their toll on the LTL sector, which continues to struggle with inadequate earnings. YRC is the best-known example, but there are others as well. Con-way, for instance, lost $110 million in 2009. This will not change without a significant improvement in the economy.

2. The price of diesel fuel. After a temporary dip, fuel prices are once again on the rise. According to Department of Energy projections, the average retail price for diesel this year will be $3.00 per gallon. Although that's way down from a few years back, it's still high enough to be a major factor in the cost of moving goods. And we still have $80-a-barrel oil.

3. Rail regulation. A bill currently in Congress would eliminate antitrust law exemptions for railroads and change the way the industry is regulated. While captive shippers certainly deserve protections, I believe this bill, if passed, could be a dangerous first step toward more regulation.

Read the complete list here.

RFID: Cargo Security and Product Traceability

(Video: Metro Group/Text: Aimglobal.org)



Whether it’s the result of the weak economy, the increased efficiency of thieves, or better reporting, freight thefts increased dramatically in the U.S. in 2009 — and that raises concerns about the integrity and safety of the supply chain.

A report by FreightWatch showed cargo thefts in the U.S. up 12% in 2009 over 2008 — but that figure doesn’t tell the full story.

The total value of these thefts, $487 million in 2009, represents a 67% increase over 2008.

While a variety of overt and covert methods can be used to identify stolen goods after the fact, whether in black or gray market outlets or in more legitimate channels, preventing theft — or identifying it early enough to stop goods from entering a distribution channel — is more effective.
But whether it’s preventing thefts or tracking goods after the fact, RFID can be a valuable tool.

The FreightWatch report showed that an increasing number of thefts, mostly truckloads, were from supposedly secure lots. On the one hand, that’s good news because it means that hijacking, with the greater possibility of personal injury, is on the decrease in the U.S. (although it is higher in other parts of the world). On the other hand, it means that “secure lots” really aren’t all that secure -- whether because of gaps in security procedures or complicity on the part of employees or others with access to lots. Where does RFID fit in? In virtually every aspect of shipment identification.

Read more here.

Trimming Excess Packaging Could Bring 10% Payoff

(DC Velocity – Peter Bradley)

Packaging may not be the first place logistics professionals look when searching for savings opportunities. Maybe it should.

When Jack Ampuja gives a talk on packaging, he brings along a visual aid: a shipping carton he received that's big enough to hold its contents several times over. His point is one familiar to most logistics professionals: Businesses ship a lot of air, driving up costs in a number of ways.

Ampuja, who is president and CEO of the consultancy Supply Chain Optimizers, says more often than not, the problem is simply lack of awareness. Companies typically select packaging based on marketing or other considerations without giving much thought to the supply chain implications, he says. As a result, they end up using more packaging than they need, creating enormous waste and unnecessary expense. He advocates with some passion that logistics professionals should become more involved in decisions about the packages their companies use to ship freight. Read more here.

UPS Freight Announces Improved Service to and from Western Canada

(UPS via Reuters/Business Wire)

UPS Freight today announced improved transit times from western Canada to points across the United States.

"Improving and expanding our coverage and service capabilities with our country's largest trading partner is a key element of our overall growth strategy," said Kevin Hartman, UPS Freight senior vice president for strategy.

"We have listened to our customers' needs and engineered and piloted faster, more efficient network links. We plan to continue to expand and improve our capabilities throughout key markets in North America."

In all, UPS Freight is reducing transit times across 340 lanes from Calgary and Edmonton to points throughout the United States. The faster transit times include bringing Calgary to cities in Arkansas, Arizona, California, Kansas, Louisiana, South Carolina and New Mexico within four days.

Similarly, one and two days have been shaved off the transit times between Edmonton and U.S. cities along the East Coast from Connecticut to Georgia. Read more here.

AAEI Says 10+2 Costs Will Mount

(American Shipper)

The American Association of Exporters and Importers [AAEI] in comments filed last week urged caution over the costs of U.S. Customs’ Importer Security Filing interim final rule.

ISF, also known as ‘10+2’, requires cargo information to be transmitted to CBP agents at least 24 hours before goods are shipped to the United States.

“AAEI expressed concern to U.S. Customs and Border Protection that the costs of ‘10+2’ compliance are still unknown,” the association said. “In the first months of implementation, the only cost CBP is capturing is the transaction fee for filing. However, AAEI notes that the true costs are much higher, especially for small and medium-sized enterprises. Plus, hidden costs of ‘10+2’ compliance will add up quickly due to delays and slowdowns in the supply chain.

“AAEI is also concerned about the lack of tangible benefits for voluntary participation in the costly C-TPAT program…” Read more here (subscription required).