Eric Joiner's Freightdawg.com - The Logistics and Supply Chain Blog!

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Some Ergonomics in Play Here.

Anyone who has followed this blog for more than 30 days will notice a few things.  First is that articles all have main highlights in BOLD.  Second, that recent articles not only have content in both black BOLD but also in red BOLD.   There is a reason.

My experience in readability online shows that serious content that takes more than 1000 words to make a point won't get read to the finish.  People don't have time to read that much.  I think it has a lot to do with PC monitor reading. It's just not very easy to do.   To alleviate that problem, one thing I have done in the last 6 months is to highlight and bold the significant messages in my blog articles.  This makes reading articles online very quick in digest form.

For articles whose content is long and potentially complex, I have chosen two strategies to digest the content for readers.  First, all primary content will be highlighted and black BOLD.   For even tighter content control and digest, the very salient points will be highlighted in red BOLD.  The rest of the text will be in normal fonts.

Read Freightdawg.com articles normally, but if you are in a hurry, just reading the bold highlights will condense the article. reading only the red BOLD sections will seriously condense the articles to what you need.

Eric

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Maersk Raises Westbound Rates to Asia

Maersk Line will raise rates on services from the United States and Canada to most of Asia as a result of high fuel costs as well as the strong export market growth to the Far East.

Rates will increase $160 per TEU (dry), $200 per FEU (dry and high cube), and $220 per 45-foot high cube container and will be effective on January 1, 2008.

The rate increase applies to all cargo under Maersk Line independent tariffs and service contracts as agreed with its customers individually, includes services to Brunei, Cambodia, China, Hong Kong, Indonesia, Japan, South Korea, Laos, Macao, Malaysia, Mongolia, Philippines, Singapore, Taiwan, Thailand, and Vietnam.

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Once in a Lifetime: A meeting of Three Queens

Back in June, I wrote about the sale of the magnificent Cunard Line ocean liner, Queen Elizabeth 2 to interests in Dubai.  Now as the year ends, it is time for the famous liner to start her pay off sailings and join its new owners as a luxury floating hotel in Dubai by late 2008.   The QE2 is a famous and historic global cruise liner.   

Prior to that however, a very special once-in-a-lifetime event is going to take place in New York on January 13th, 2008. Cunard's current flagship the Queen Mary 2 as well as the QE2 and the even newer Queen Victoria will sail together from New York past the Statue of Liberty amid fanfare and fireworks. The ships will depart from their berths in the New York harbor at 6:30PM.

"This is the first-time in Cunard’s 168-year history that three Queens have been in service at the same time and with QE2 retiring in November 2008 will be the only time they will be together."

The article below is an associated press article on how to best view this special maritime event.   As an old steamboater and student of maritime history, I look forward to attending this event.   

Three Cunard Queen ships to meet in NYC The Associated Press NEW YORK-The three Cunard Queen ships - the Queen Mary 2, Queen Elizabeth 2 and the new Queen Victoria - are expected to meet in the waters off Lower Manhattan on the evening of Jan. 13, with the Statue of Liberty as a backdrop and fireworks celebrating the once-in-a-lifetime event. The Queen Victoria was christened Dec. 10 in Southampton, England, by the Duchess of Cornwall (Camilla Parker Bowles, who is married to Prince Charles). The ship embarks Jan. 6 on a three-month around-the-world cruise, including a transatlantic crossing with the QE2. After Victoria and the QE2 arrive in New York, they will rendezvous with the QM2, which homeports in Brooklyn. The meeting of the three grand ships should be quite a sight, all lit up and twinkling in the winter darkness of New York Harbor. Fireworks are scheduled for 7 p.m. The public will be able to view the spectacle from the parks and open spaces ringing Lower Manhattan, including Battery Park on Manhattan's southern shore; and Robert F. Wagner Jr. Park, located just south of the Museum of Jewish Heritage. If you're willing to pay for your viewing privileges, there are a couple of options. A special four-hour cruise scheduled for Jan. 13 departs South Street Seaport's Pier 16 at 4 p.m., returning at 8 p.m., aboard the Zephyr. Tickets are $125, including cocktails and hors d'oeuvres. Reservations required. The cruise is sponsored by the South Street Seaport Museum. Please call  212-748-8786 for details. The Ritz-Carlton New York in Battery Park in Lower Manhattan is offering an "Anchors Aweigh" package starting at $585 per couple with a nonrefundable three-day advance payment. The price includes breakfast in bed and a seafood tasting for two; all the rooms offered with this package have telescopes and harbor views for prime viewing of the ships. Details at http://www.ritzcarlton.com or 800-241-3333. The Queen Elizabeth 2 is expected to be retired from service later in 2008. Cunard is building a new Queen Elizabeth for a 2010 launching. Details at http://www.cunard.com.

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Buffett Buys into Union Tank Car

Warren Buffett is adding to his train set.  Progressive Railroading reported today that Buffett's Berkshire Hathaway will buy controlling interest in Union Tank Car Company. Union Tank Car is presently owned by Marmon Holdings. The deal will close in Q1 2008.  Union Tank Car builds, leases and repairs railroad tank cars.

As discussed here before,  Buffett only invests in businesses whose fundamentals he understands. The simpler the fundamentals the better. With a weak US dollar and foreign oil approaching 100 dollars a barrel, US consumers and industry are increasingly depending on US and Canadian coal and biofuels to power homes and industry.   The European Union is also buying increasing amounts of coal from the US to meet their energy needs.

Any guesses on how those commodities move to ports and to market?   Here's a clue: Railroad and pipeline. Buffett spent heavily to buy into BNSF Railroad, Union Pacific and Norfolk Southern.

Berkshire Hathaway is now expanding into the rail equipment needed to move energy.  This move really isn't surprising considering the level of control Railroads have on their base costs. 

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FedEx LTL Business Units announce 2008 GRI

FedEx Freight and FedEx National LTL (formerly known as Watkins Motor Lines) have announced their 2008 general rate increase.  The GRI will be effective January 14th, 2008 and be in the amount of 5.48 percent of base freight.

The increase does not impact FedEx Express and Ground parcel products.  FedEx express products are covered by a previously announced 4.9 percent increase plus various accessorial increases.

As usual, readers would be well advised to check the FedEx website for possible accessorial fee increases for their LTL business units that may not be specifically outlined in the general press release.

clipped from biz.yahoo.com FedEx Freight, FedEx National LTL Announce General Rate Increase Wednesday December 26, 9:00 am ET MEMPHIS, Tenn.--(BUSINESS WIRE) -- FedEx Freight, a leading U.S. provider of regional next-day and second-day less-than-truckload (LTL) service, and a subsidiary of FedEx Corp. (NYSE: FDX - News), will implement a 5.48 percent general rate increase (GRI) effective January 14, 2008. Additionally, FedEx National LTL, the long-haul LTL company, will implement a commensurate increase for its general rates. Rates for other operating companies within FedEx Corp., specifically FedEx Express and FedEx Ground, are not affected. The GRI increase will apply to interstate and intrastate traffic, and certain shipments between the United States and Mexico and Canada. Various additional adjustments will include minimum and accessorial charges, as well as adjustments in fuel surcharges and select lanes and service areas. After January 14, the new base rate and rules tariffs for FedEx Freight will be available on the company's Web site, www.fedex.com/us/freight/main/ and new base rates and rules tariffs for FedEx National LTL will be available at http://fedex.com/us/national/main/. Customers may access rate quotes via these sites.

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Wrap Rage: A Packaging Nightmare.

Christmas day is almost over. At my house the day was spent with with family and friends enjoying each others company and the taste of great food and drink.  The kids got up early as usual and the morning was spent trying not to explode the house in presents, paper and packaging. 

Amongst the fun, there was one thing I hated. Opening factory packaging.  In particular that awful clamshell plastic packaging.    That stuff is so universally hated that there is a term for it.  Wrap Rage.

Consumer Reports has an award for bad packaging.  Its called the "Oyster Award".  Clamshell packaging is the hands down winner for hard-to-open packaging. CR reports it takes an average of 9 minutes and 22 seconds to open a clamshell packaged product.

Clamshell packaging is designed to protect products as they move through international supply chains.  The plastic vinyl sheeting protects the product in transit and keeps the product safe in merchandising.  Anybody who has ever tried to open a product wrapped in it also knows it helps against shoplifting because the stuff is almost impossible to get open.   Having worked my way through several such pieces this Christmas day,  I was so frustrated that I found myself cussing the brands that use this package type.

From a logistics point of view, clamshell packaging is cheap, its efficient and it (undeniably!) protects the merchandise.  Contract Logistics operations often use this kind of quick packaging when items are merged at a distribution center to create a new SKU.   Such a situation might be when a toothbrush that comes from one factory is joined with a tube of toothpaste from another plant at the distribution center.  The new clamshell packed item is a new product SKU and is often found at a point of sale kiosk in a grocery or retail store.  Thats a very efficient and common scenario.

From a consumer point of view though, clamshells are a disaster. Any product attribute that causes the customer to get mad when trying to open the package is bad.   Even worse, this packaging causes people to get hurt.  In 2004 over 6400 people were treated in emergency rooms in the United States because they were either cut by the plastic itself or by an improvised "opener" such as a knife, box cutter, scissors, etc.  The clamshell can also make products completely inaccessible to both young children and senior citizens.

High visibility packaging like clamshells are also big business. US retail demand for high-visibility packaging, like clamshells and blister packs, are expected to be an $8.5 billion dollar industry by 2010,  covering as many as 32 billion units.  You can forget "green" as a concept though.  These tough packages are also tough on the environment.  Over 900 million pounds of plastic resin will be required to create the packaging to meet the 2010 volume projection.

Of course with any problem there will be entrepreneurial opportunities.  Such is the case here as well.   A number of specialty tools have been developed to help open clamshell packaging. Tools such as the Zibra "OpenIt!" , the KwikCut or OpenX tools allow consumers to slice open plastic clamshell packaging.  While I'm very likely to buy one of the various tools available, I think its poor marketing to force the consumer to buy a special tool to get access to a product he paid good money for already. 

For all the angst over Clamshell packaging, there are alternatives. 

MeadWestvaco's Natralock is one example.   Natralock packaging allows products to be sealed for safety and security, but is much easier to open.   Costco is starting to use this packaging as a way to serve their customers.   Food giant, Nestle is also investing heavily in new styles of packaging that are both recyclable and easy to open by younger consumers and the Elderly.  Their view is that if these two groups can open a package, then the masses in the middle certainly can.

While there may be moves to replace clamshell packaging, I don't think we'll see it go away within the next 3-5 years.  The packaging machinery is too widely deployed. When "low cost" is still a major driver in manufacturing and product sourcing, cheap packaging will go hand in hand.  Maybe buying one of those tools isn't such a bad idea after all?!

In the meantime, I hope you and your families had a wonderful Holiday.

Eric

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Rock On: Freightdawg.com is One Year Old.

Freightdawg.com will be one year old in January 2008. During 2007 I, and a number of associates, have posted over 250 articles on transportation, logistics and supply chain related subjects. 

"Your participation as a reader and responder have been vitally important and greatly appreciated."

Freightdawg started as a personal blog, but has grown to be much more. I've been in this industry for almost 25 years. For that reason, I figured I had at least something to share. What I found was that I had a lot more to learn! 

Freightdawg is more than a blog now. It is a journey.  Reader input and advice, as well as social networks like LinkedIn.com have contributed tremendously to both whom and what I know about our field. For that reason alone...establishing Freightdawg was a great idea and a blessing.

Thankfully, many supply chain professionals in industry, academia and business research share their knowledge.  Your data provides perspective and validation on what would have otherwise been conjecture here. One thing I have found to be universally true is that all I have talked with care deeply about our industry. While there are multiple constituencies that comprise the logistics business, all have an interest in its relative wellbeing.

"To those who read this blog and to those whom I have met this year, a humble THANK YOU."

I wish you both Happy Holidays and a Merry Christmas.

Eric

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US Pilots Get Retirement Age Reprieve

The International Air Transport Association (IATA) estimates that air carriers will need to recruit over 17,000 new pilots annually to cover increasing demand for air travel and dwindling pilot supply.  At the same time, healthy, highly experienced pilots are leaving US airlines through forced retirement.

For the last 50 years, the Federal Aviation Administration has mandated that pilots must retire from commercial airline service at age 60.  However, unlike previous years, many pilots today enjoy great health and could easily continue flying.

The Fair Treatment for Experienced Pilots Act (HR 4343), signed into law on December 13th by President Bush, allows pilots in the future to fly to age 65 so long as they meet health and training standards. The new law allows commercial pilots and copilots to be up to 65 years old on domestic flights. However, commercial pilots on international routes must still follow the International Civil Aviation Organization (ICAO) 2006 standard whereby at least one of the pilots must be under 60.

The new law only applies to pilots who have not yet reached retirement age.  For pilots who were previously forced into retirement coming back to airline duty isn't so easy. Airlines base duty assignments and pay rates on a seniority system.  A pilot who retires then rejoins the airlines would find himself back at the bottom of the seniority list, flying smaller airplanes on shorter routes and in a first or second officer role.  Essentially he becomes a new hire.

The new rule allows pilots to stay on for an additional five years, but more importantly keeps experienced aviators in the US air network.  In recent years, foreign air carriers have raided US and European carriers for their most experienced crews. This has placed a commercial burden on US air carriers even as they aggressively hire new pilots and trainees. Airlines in the Middle East and India have been aggressive in hiring experienced US air crews.

In 2007 several US air carriers chose to invest in additional international routes. Those routes demand experienced high time pilots.  However when revenues are in dollars and expenses are often in Euros or other better positioned currencies,   American carriers may be at a disadvantage in competing with foreign carriers who may be better able to afford higher priced American crews.

Senior pilots make significantly higher salaries than newer hires. Leaving experienced pilots in the captains seat for another five years will significantly raise crew costs for airlines. Combining the largest American airlines together, (American, United, Delta, Continental, Northwest, US Air, Southwest, FedEx, and UPS), there are over 22,000 pilots scheduled to retire in the next ten years.

Keeping senior pilots for an additional five years increases the availability of experienced talent, but at the same time holds younger pilots in lower slots and increases crew costs at a time when many airlines are struggling financially. Airlines may be pushed harder to consider mergers as the burden of crew cost combined with high fuel prices, force carriers to rationalize their fleets, routes and personnel costs just to survive.

Eric

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Mashable: Packagemapping.com

Now this is a cool website.  Using the power of Google Earth and the parcel tracking facilities of DHL, UPS, FedEx and the US Post Office, you can now track a package in a way that pings the Express carrier web site then transfers the data to a Google Earth map.  This is very interesting, especially for international shipments.

As an "express carrier" guy, I find this interesting because it can graphically display logical bottlenecks in supply chains.  As a consumer, I also find it useful in terms of seeing exactly where my online ordered goods are.  This is very helpful during this Holiday season. Online sites like Amazon etc., will need to have this kind of technology mashup available in the future.  I'd like to see this sent to my PDA. 

Think about how valuable this technology combination would be if you were tracking an organ transplant shipment for your child or relative?     Or, more commonly, what if the same technology was applied to tracking your luggage for your trip to Puerto Valarta?

That's a bigger deal than you know...airlines struggle with excess baggage to Mexican cruise ports. Often they fly whole airplanes with nothing but luggage down to Mexico. 

If you want to play with this site a little to see what its about, try this tracking number for a recent DHL shipment I received.  Try airway bill: 24588551853

Eric

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Funny Stuff at the Atlanta Airport

Sometimes business travel can be humorous.  Today I was in New Jersey to visit a customer.  I flew Delta as usual.   I caught my flight home and waited at baggage claim in Atlanta.

While waiting for my checked luggage,  Delta made an announcement intended to tell passengers that there had been a change in baggage claim locations for various flights.  The first announcement was "Attention Newark arriving passengers, if you flew on Delta flight 599, your baggage will be available on baggage carousel 5".   

Then somebody new took over.  Apparently, the new person was less familiar with the protocol. They announced "Attention Newark surviving passengers..."  The folks waiting for luggage looked up, had a funny look, then broke out laughing.   

The fellow doing the announcements made the same one several times.  It got funnier every time because new people would pick up on what the guy was saying.  Clearly people tune those PA announcements out because most of the time, it was the children in a group who would notice it first!

Given that I've been giving my friends at Delta a little bit of a hard time lately, this struck me as particularly funny.

Flight 599 was my flight.

Eric

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