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

Airlines: Aloha Closes Doors

After 60 years of operation in the Hawaiian market,  Aloha Airlines today will close its doors for passenger operations. Citing difficult trading in the face of low cost competitors as well as economic downturn,  Aloha will cease selling passenger tickets today for any future flights.

President David Banmiller has claimed unfair predatory pricing by low cost competition brought on the bankruptcy that eventually has claimed the 61 year old air carrier.    While not specifically named, Go! Airlines is the primary discount airline in the Hawaiian market. Go! is a regional brand of Mesa Airlines based in Honolulu. 

Passengers with pre-purchased tickets on Aloha Airlines will be accommodated by United Airlines .   Hawaiian Airlines also has special arrangements to assist stranded passengers.

Aloha was also a primary air cargo carrier in the inter-island and mainland US to Hawaii trade.  Those assets and services are being bid on by the parent company of Northern Air Cargo, Saltchuk Resources of Seattle.   Northern Air Cargo serves the Alaskan cargo market.   

The loss of Aloha Airlines in the cargo market is a big deal because their 737 aircraft can accommodate air freight.  Go! airlines operates low cost CRJ regional jets, which cannot accommodate cargo with any meaningful load. It is therefore important that Aloha's cargo assets be purchased and operated by someone.  US Federal Bankruptcy Court is accepting bids for these assets.

Aloha Airlines was a stalwart air carrier in the Hawaiian market and had suffered from financial trouble in its past. However, the carrier simply couldn't acquire additional financing in order to avoid the closure of the business.  At one point in the early 1990's, Aloha considered a merger with rival, Hawaiian Airlines, but that deal never came to completion.

clipped from www.alohaairlines.com HONOLULU – Aloha Airlines announced today that it will be shutting down its inter-island and transpacific passenger flight operations. Aloha’s last day of operations will be Monday, March 31, 2008. On that day, Aloha will operate its schedule with the exception of flights from Hawaii to the West Coast and flights from Orange County to Reno and Sacramento, and Oakland to Las Vegas. Code-share partner United Airlines and other airlines are prepared to assist and accommodate Aloha’s passengers who have been inconvenienced. For more information on United’s accommodation options, contact United at 1-800-UNITED1 or www.united.com. Passengers who do not wish to be re-accommodated by another airline should contact their travel agent or credit card company to request a refund. Effective immediately, Aloha will stop selling tickets for travel beyond March 31, 2008.

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Airlines: US-EU Open Skies Begins on Sunday!

In April of 2007 the United States and the European Union ratified an agreement that would liberalize American and European air rights for air carriers. Effective, Sunday March 30th, 2008, European and American air carriers can fly anywhere they want between European Union countries as well as Switzerland, and the United States. European carriers are still not able to offer services inside the US for domestic travel, but may fly internationally between any point they choose.

The initial agreement is thought to be more advantageous to to American carriers because the Open Skies treaty does allow US carriers to offer services between EU countries. For the Americans, the most coveted aspect of the agreement is the ability to land at London-Heathrow airport. Starting Sunday a number of carriers are launching new services to land at the airport most central to London. Delta will operate a new flight from Atlanta and from New York JFK,  Continental will launch flights from their hubs in Houston and Newark, while Northwest will have new flights from Seattle, Minneapolis/St.Paul and Detroit. Not to be left out, US Airways will fly from Philadelphia to LHR.

London-Heathrow is still dominated by British Airways , who holds approximately 40% of the landing rights slots.   BA will open new flights from a variety of European cities to New York starting this summer.  With the Euro trading so favorably against the US dollar, I think a regular European invasion will occur this summer in the US. Lots of seats and lots of buying power will make for some nice vacations in America. British Airways has even gone so far as to start a new airline brand called "Open Skies", which will fly from New York to Brussels and Paris starting in June, 2008. Virgin Atlantic originally planned to expand its flight roster this summer, but may delay until 2009 or 2010 now.

Round Two

The Open Skies agreement that was signed in 2007 was only part of a continuing dialog between the European Union and the United States. The agreement calls for further discussion to take place within 60 days of the implementation of phase 1. Targeted for May or June, negotiators will continue talks that may eventually liberalize issues such as European carrier ability to offer domestic services in the US as well as foreign ownership of US air carriers. Both of these are protected by US law now.  Government negotiators on both sides hope that increased competition and flight availability will increase competition and eventually lower fares. Those issues remain to be seen based on economic indicators as well as competition.

The Open Skies agreement also has the intent of creating a framework for harmonizing airport security issues, safety and the environment.

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DHL Goes Green in Asia

Green supply chain programs are growing in popularity and public interest. Corporations are reacting by looking at how to implement a more environmentally friendly way to move material through their network. With carbon credits now being actively traded in Europe, that trend is only going to get bigger.

Pressure on transportation providers to deliver green solutions intensifies with each new Request for Proposal and may become key vendor selection criteria. The information below from DHL discusses the GO GREEN Program that DHL has enacted in Europe and now Asia.

Parcel Industry News

DHL Introduces Industry-First Carbon Neutral Shipping Service in Asia Pacific "Sustainability is increasingly a critical part of DHL's leadership philosophy," said Dan McHugh, CEO of DHL Express - Asia Pacific. "In addition to looking at how we can manage our own environmental footprint, we want to provide our customers with products and services that allow them to reduce their environmental impact. A first-in-the-industry, DHL GOGREEN EXPRESS is an easy-to-use carbon neutral service that aims to directly address the climate change challenge." DHL GOGREEN EXPRESS is part of the GOGREEN range of carbon-neutral and low-carbon shipping options already available to DHL customers in Europe. The service was first launched in  January 2007 at the World Economic Forum in Davos to help the Forum achieve its carbon neutral commitment. In Asia Pacific, the service will be available in 17 countries across the region over the course of this year. With this value-added service, DHL aims to meet the demands of customers who are looking for a more environmentally-responsible shipping option. Through customer payment of an additional 3% 'green premium' on top of standard delivery charges, DHL calculates the carbon emissions generated by transporting each specific customer shipment from the country of origin to destination, and offset these emissions by reinvesting in certified carbon management programs such as alternative fuel vehicle technology, solar panels and reforestation projects.  These projects have been identified via DHL's dedicated carbon management function, with an aim to compensate the emissions generated when transporting customers' shipments across the globe. Customers can choose to send all or a selection of their international shipments as part of DHL GOGREEN EXPRESS. To ensure accountability and transparency, the program is annually verified by an independent certifying body - the Swiss-based Société Générale de Surveillance. In addition, customers will each receive an annual certificate from DHL stating the total amount of CO2 which was offset on their behalf during the year. The certificate serves as a useful environmental reporting tool for companies working to reduce their CO2 emissions created during transport. In other recent environmental sustainability initiatives in Asia Pacific, DHL has introduced bio-fueled or hybrid vehicles in its various markets. For example, in India, DHL Express is operating over 200 Compressed Natural Gas (CNG) vehicles. In Japan, DHL Express is actively encouraging "Green Logistics" through a combined use of hybrid vehicles, Fuel-Cell cars and bicycles in its operations network. DHL's freight forwarding business also achieved certification for Environmental Management System ISO14001:2004 across its entire operations in Asia Pacific, covering 188 locations in 15 countries. This makes DHL Global Forwarding the first and only freight forwarder to achieve full umbrella certification for Environment Management System ISO14001: 2004 in Asia Pacific.

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Delta Follows UAL and US Air on 2nd Bag Fee

Earlier this month I wrote about both United and US Airways charging passengers for a second bag on airline flights. I railed that both airlines were using a penalty fee to discourage traveling families from bringing extra luggage rather than using creative rewards to get business travelers to check their luggage.  Now that the storm surge has died down a little, Delta has copied the same charge scheme.

I really think that the way to win this operational challenge is not to hit traveling families with an extra bag fee, but to figure out a way to get business travelers to check their bags. It's that ubiquitous roll-aboard bag that virtually every business traveler has that slows down boarding and departures.

The article below though points to another airline strategy which wasn't quite so obvious. That is the revenue gained by nickel and diming passengers with "ala carte" pricing strategies. Anybody in the freight business knows that if you only focus negotiations on a base rate, you'll get eaten up by accessorial charges. The air and ocean carriers have learned that and the parcel carriers have perfected it.

As far as the passenger airlines go, I'm ok with ala carte on some things. I'll pay for food. I'll even pay for a choice of movies. These are things I don't have to have but can purchase if I want to.  Operational issues however, like paying for extra bags,  I think should be looked at in another way. Get the passengers to behave in a way that gets them to be part of the solution. Give the business traveler a discount for checking his one bag.  He rarely has two anyway. The discount doesn't even need to be cash. Give them frequent flyer points. A whole new class of elegant solution could be had here.

What I see is too much conventional thought and not enough out of the box thinking.   This is NOT rocket science.  It's appreciation of the role the customer plays in the whole transaction.

clipped from www.btnmag.com Delta To Join In Second Bag Charge  Delta Air Lines beginning in May plans to join United Airlines and US Airways in charging passengers for a second checked bag, Delta president and CFO Ed Bastian told investors at a JP Morgan aviation conference in New York this morning. Bastian said the carrier would charge $25 for a second checked piece of luggage, but did not give further information about which customers or which routes the initiative would impact. United Airlines last month became the first domestic legacy carrier to initiate a $25 fee for a second bag (BTNonline, Feb. 4), and US Airways within weeks joined the carrier in a similar initiative (BTNonline, Feb. 26). However, both United and US Airways have shielded certain customer segments, particularly elite frequent flyers, from such fees. United executive vice president and CFO Jake Brace today at the JP Morgan aviation conference said the carrier sees more opportunity for further unbundling and envisions implementing more a la carte pricing options for passengers. Brace said the second bag fee could yield $100 million in additional revenue for the carrier in 2008, particularly if matched industry-wide. He said other such initiatives are in the pipeline, claiming that unbundling and merchandising options could generate more than $1 billion for United within five years.

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Product Quality Control and Supply Chains

The video below is truly eye opening relative to testing and toxicity quality control for products in made in Asia. US and other western retailers, reacting to public and governmental demands for safe, usable goods, are mandating that their suppliers in Asia meet market safety standards. The reality is that tier 1 vendors have their own sub-vendors, whether of component parts, or raw chemicals. Auditing and controlling the quality of those sub-vendors is often next to impossible.

Melissa Brown of the Association for Responsible and Sustainable Investment in Asia (ASRIA) discusses challenges of the Chinese supply chain and the needs for proactive responses by investors and companies. The auditing and safety aspects of international sourcing puts tremendous pressure on supply chains. This is one reason why more and more companies are considering a return to sourcing in the US or in other markets where quality and toxicity are more controllable.

The video below runs a little long at 15 minutes, but is well worth the time.

(Note: Some corporate proxy servers ban video from youtube.com.  If you see white space below...you may be on such a network.  Please revisit from home or a connection that does not go through your company VPN.)

Eric

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2008: What's Next for Logistics and Transportation?

This is a "Best of Freightdawg" article

I originally published this in December 2007. Now that we are through the first quarter of 2008, this outlook still remains accurate.

What might 2008 hold for the logistics and transportation industry?

Here's what I think the key issues are and what impact they will have by mode.The key issue above all remains fuel. Security is a hot second.  Technology also has a big role to play along with the "Green" environmental movement. All will combine in unexpected ways to reshape our industry in the next couple of years.

The aggregate of this information is important to consider not only for budgetary reasons but as shippers and carriers enter pricing negotiations by mode.  Rates are important, but its not all about the price.  Available service will also be critical.   There were plenty of instances in 2007 where contracts signed at cheap rates didn't yield priority freight carriage, especially in air freight peak season. If you are a big shipper, you should consider that last sentence and how you will handle the 2008 negotiations.

Air Freight - main deck air freight I think will remain in high demand on the Asian trade lanes but not all because of volume.  European carriers such as Lufthansa shifted freighters out of Asian trades in order to take advantage of higher rates in the Transatlantic markets.  Latin American markets for main deck freight will be strong southbound. I see no reason for that to stop.   

Flights from Europe, North America and Asia to Latin markets remain strong.  Airline belly freight markets globally are reasonably strong and should stay so. Pricing however is much more competitive on the airline fleets worldwide.  The line between what freight should fly versus what freight should go by ocean freight however is blurring some. LCL freight increasingly is taking air cargo as shippers reconfigure their supply chains to adjust for fuel costs.

Airlines - US air carriers will continue to match smaller planes to longer routes in an effort to contain fuel costs. Fuel hedging, which has always been important, but better done by some airlines, will be huge.  Southwest Airlines is hedged through most of 2008 at $51.00 a barrel while open trading runs almost twice that.  Nevertheless, traditional discounters are now going to have to find new ways to compete with the big guys.  While Delta and Northwest emerged from bankruptcy in the spring of 2007 with a new battle plan, the fuel issue is complicating the competitive landscape and impacting their returns.   The recent extension of mandatory pilot retirement age to 65 could also be a complication as high time and highly paid pilots remain on the books instead of being replaced by younger (and cheaper!)  pilots moving up the ladder.   

These two issues could force merger talk to increase as airlines focus on optimizing air fleets and air crew costs.  I'm watching to see if Delta in particular places an order with Boeing to replace their 767's with B787's. An order of around 100 planes had been predicted earlier in 2007.  If Delta sits on it's hands, that means it could be looking at fleet rationalization under a merger before any new planes are ordered...especially since one of the possibilities is Northwest, who is already a big 787 customer. Merger talks for Northwest may also come in play as DHL, its largest air cargo customer, phases out of Northwest's cargo fleet in favor of its investment in Polar Air Cargo by late 2008.  Much depends on whether NWA can replace the DHL express volume.

The Green issue is an interesting one for the air carriers. The public sees airlines as huge fuel users and high carbon polluters.  Continental Airlines marketing department didn't do the industry any favors by offering to plant x number of trees for passengers willing to pay a premium.  That's well meant, but I think takes away from more important operational actions like matching planes with payloads and ranges, ordering the most fuel efficient jets available and optimizing the networks though rationalized services with airline partners.

Trucks and LTL - UPS and FedEx significantly reshaped the US Less than truckload (LTL) market in 2007 by acquisition of Overnite and Watkins Motor Lines respectively.  Using parcel express expertise and planning, both have upped the LTL service level by introducing time definite products in the LTL space.   LTL traditionally is a day definite business.  With parcel carriers now entering that business,  service requirements are going up while margins will go down.   Meanwhile available freight has been shrinking. If shippers can hold freight long enough to make FTL shipments, or zone skip, then they are doing it.   Freight that was moving domestic air is now moving back to deferred air freight, otherwise known as GROUND.   

For FTL, the slump in US housing was a major hit this year. That should continue at least into the first part of 2008. Despite market pressure I believe that the labor market in trucking will be stable going forward because UPS and the Teamsters have already concluded their 2008 contract renegotiation.  That will allow the National Master Freight Contract to be concluded using the UPS contract as a basis.

Parcel - All three major parcel players will take an increase of approximately 4.9% for express shipments in 2008.  However, watch for accessorial fee changes to figure the true cost to ship.  UPS, FedEx and DHL all carried record levels of parcel freight this holiday season, with UPS accounting for 22 million pieces on their largest day. In order to combat the increases I think shippers will work hard to choose deferred modes for parcel and especially on LTL shipments.  The US Postal Service could become an increasing factor in commercial parcel shipping if allowed by Congress to negotiate rates.  The US Post Office is the 800 lb gorilla in the mail room! The Postal Service also has access to the FedEx day air network as well.   

I am also intrigued to see whether the US Government will force the union issue with FedEx in 2008.  FedEx has always claimed its employees need to be covered under the Railway Labor Act while UPS and other Teamster employers are covered under the National Labor Relations Act. Airlines are covered under the RLA and it's much harder to nationally organize under that law. However, with the FedEx folks now offering every single mode and service that UPS has, a difference in labor laws seems outdated. Fred Smith may find himself in front of a congressional microphone again on that this year.

Railroads - Warren Buffett and Berkshire Hathaway decided to buy the ultimate train set.   Buffett invested this year in BNSF, Union Pacific and the Norfolk Southern Railroads. All are major players in the movement of coal and other energy products. With oil being as high as it is and European markets now clamoring for US coal,  Buffett is buying into the primary capacity to move coal and biofuels to market.  Not a dumb guy.  These commodities will drive rail capacity and rail pricing for some time to come.   Buffett strengthened and underlined that strategy this week when Berkshire Hathaway secured 60% ownership of Union Tank Car Company.  UTLX is one of the primary constructors and repair facilities of tank rail cars.   Matching use of the rails with available capacity puts Berkshire in tremendous position to capitalize. 

Ocean Freight - Asian imports continue to drive volumes in the international ocean markets.  Fuel remains the biggest part of ocean transportation costs.  However pressure from security concerns at US Ports in the form of the new Transport Worker Identification Card (TWIC) will force all port workers and those with access to the ports to have background checks in order to work in US port facilities.  Security will add cost to liner infrastructure costs and will show up in the freight rates in due course.   

Green pressures from local environmental groups will also add costs as Southern California ports force new environmentally friendly trucks and truck modifications on local drayage firms. In order to fund the conversions the ports will charge a $35.00 port fee per container. Those fees will immediately show up on ocean bills of lading as surcharges. For mid-size importers these fees almost immediately add 5 figures to the transport budget, and for the really big guys, this number represents millions in cost.   

Look for importers to strongly consider alternative ports in Canada and Mexico such as Prince Ruperts Island in British Columbia, or Lazaro Cardenas in Mexico.   Both have significant rail tie ups with the Canadian National Railroad for Prince Rupert and Kansas City Southern De Mexico for Lazaro Cardenas.   These are two seriously great port alternatives if SoCal is a problem.

APL added exciting new container equipment to the ocean business by introducing 53 ft international ocean containers. While potentially market disruptive, These box sizes will be welcomed by importers of volume cargoes from Asia where they have the order management technology to cut a store level distribution list from origin.

This is my view on the last day of December 2007.    I will look back on these quarter by quarter to see what's changed. With this much cargo in play, along with the major market dynamics of fuel, currency, security, sourcing and the attendant technology,  I am sure much will change.

I haven't even touched on the 3PL and contract logistics markets or supply chain technology. Perhaps I will write on those within the next several days.

Happy New Year.  I think it will be exciting.

Eric

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China: Local Business Professionals Wanted!

This is a "Best of Freightdawg.com" article that was published in June, 2007.  Since Freightdawg.com has grown considerably since then, I republish the article to a larger audience.

Last year, the American Chamber of Commerce in Shanghai surveyed almost 300 U.S.-based companies with operations in China and found that the No. 1 business challenge in China was attracting and retaining talented white collar managers.

As China's economy matures, it is shifting from a manufacturing economy to a more service based economy.  This is a natural evolution as money moves into the pockets of consumers as a result of China's economic success. Service based businesses increase the demand for skilled, white collar employees with professional management and business talent. The problem is there are just not enough local Chinese with the skills to suit the burgeoning market.

Shaun Rein is the Founder and Managing Director of China Market Research Group, based in Shanghai. Recently he published an excellent article on "How Multi-Nationals Err in China". The article highlights three main reasons why multi-national firms have such difficulty in finding, attracting and keeping local talent. 

Two Tiered Pay Systems with Little Opportunity for Advancement.

There is a perception that a glass ceiling exists for local Chinese staff - Western companies often import senior managers from the head office or from Hong Kong or Taiwan to run their operations in China.  Many times these people have only limited experience in local customs or market knowledge. This is very frustrating to talented Chinese employees who think that opportunities should be afforded to them to run the business.  This is seen as a major cause of job hopping, as Chinese employees see little opportunity for advancement in these businesses.

Imported foreign managers often make considerably more money than local Chinese managers. As a result an imbalanced system of payment exists that many local managers feel is unfair. The best Chinese managers therefore often prefer to work for Chinese firms where they feel this kind of two-tier system doesn't exist. Why work for Google when you can work for Baidu.com?

Chinese Baby Boomers Want a Balanced Life

Younger Chinese workers have experienced three decades of Chinese economic explosion. As a result they want many of the same trappings of a comfortable life that those in the West enjoy. These include more free time, more disposable income and the ability to enjoy both. Quality of life is more important to younger Chinese employees than just a quest for money itself.  These Chinese Urban Professionals, or "Chuppies" want the same things young western people do.  They know brands, they know fashion, but want it on their terms.  That will be a difficult transition for business and Government in China going forward.  It is not about "all work and no play".

Education / Training Opportunities

China's educational system is largely based on rote memorization. Chinese employees want and need more advanced education that prepares them for the dynamic pace of business. Younger Chinese employees value education and training.  They see it as a link to better pay and quality of life. Firms that can offer educational opportunities are likely to be able to attract better candidates and keep the talent they invest in.  Especially prized are overseas assignments for Chinese managers or trainees. American hotel chains such as Ritz-Carlton, Marriott and Starwoods  excel at this.

Chinese HR Professionals: Pure Gold.

In a previous article, I highlighted that in addition to savvy business managers, it is critical that multi-national firms hire and retain skilled Chinese HR managers. These are among the most highly prized of all available Chinese business professionals because they understand the local market and can advise multi-national management teams on what it takes to satisfy and retain local talent. Chinese HR professionals often command as much as a 20 percent premium in salary above other Chinese management professionals according to Korn/Ferry due to their rarity.

Eric

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DUI Lawyers, Student Loans, SEO and Google

Freightdawg.com has been active for a little over a year. The content is deep and generally of high quality. There were nearly 300 articles published on unique topics here in the last year.

What's interesting is that the more I know about blogs, and especially how Google Adsense advertising works, the less I believe that "logistics" oriented blogs will ever directly pay for themselves as a web blog.

Thats ok. I don't do this to make money directly from blog advertising. This is a niche blog.  My reasons for producing Freightdawg.com are much more personal.  I simply believe there's a lot to say about an industry I have spent 25 years of my life in.  I also have directly gained from new and deeper industry contacts, industry association relationships and customer contacts. Those things alone made freightdawg.com highly valuable.

What I find hugely revealing however, is how much different advertisers pay for online advertisements. Check this site out.  Top Paying Adsense Keywords. This site lists the amounts paid by Google Adsense advertisers for click throughs by specific subject.   Logistics and supply chain aren't anywhere near the top of the list. Like I said, thats ok. What surprises me is what IS at the top of the list.

DUI lawyers and Student Loans. Check the link above.  "DUI Lawyer Long Beach" pays $87.88 per click through.  I guess that's because Lindsay Lohan and Britney Spears hang out near there. To be honest, I thought mortgages would be at the top. They used to be.

There is a concept called long tail SEO (search engine optimization), that looks at what words generate the most searches at Google, then using that list to determine what you should to write about on your blog in order to maximize ad revenue.. Typically, those topics which generate the most demand also command the highest advertisement revenue.  Unfortunately, I find it only modestly useful if you have a niche market you want to serve (like freightdawg.com).

Guess what? This entire article is an SEO exercise just by the nature of how Google will deal with it. I mentioned top rated advertising topics, so thats likely to impact the banner ads on this site.  I also bolded topics that Google likes.  I also mentioned SEO (search engine optimization).

These days it's not only about the quality of the content, but what you write about.  Logistics and supply chain might not be the most popular blog topic, but it is strategic to real world economics.  Thats why I write about it.   

Meanwhile I'll chuckle a little about figuring out how to include Lindsay and Britney into a Freightdawg article. If you see banner ads with those topics on freightdawg soon, now you will know why and see the proof of what I'm talking about.  By all means, CLICK THOSE ADS!!!

Cha Ching!!!

Eric

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Gone Fishin'

Dear Freightdawg readers, 

I'm going on my annual spring fishing trip starting Sunday, March 16th through mid week next week.  During that time, I won't be working on the blog.   Not to fear however, I'll post a couple of "Best of Freightdawg.com" articles that I think remain worthy of commentary.

I will post some pics and video on my return! (guess I better catch something!)

See you Thursday when I return!

Eric

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Understanding: Green vs. Carbon

I'm all over this green thing now. 

Mainly because I believe it will be the key to profitability in the supply chain sector in months and years to come.  It costs too much to move goods with fossil fuels costing north of 100 US dollars a barrel. It is killing everybody from the airlines and ocean carriers to parcel carriers and private citizens. We Americans spend well over US$ 50 dollars a tankful for gas, but thats nothing compared to what European drivers must pay. 

People tend to imagine "green" as planting trees and taking care of the environment.   In fact, its much more than that.  It is also about making the best use of all available fuel resources in order to drive cost out of a business. European governments are looking at ways to tax carbon fuel use. So, in a very real sense being "green" means more "bling" at the bottom line.

DHL is working on some pretty creative things on the green fuel consumption front in the UK.   Many DHL Express stations in the UK get their electricity now from wind energy. There are other initiatives also being considered. The article below discusses a service provided by a local Volvo commercial truck dealer in the UK who now is launching a fuel consultancy business.

From a dealer point of view, this comes down to educating the commercial haulier how to effectively use their new truck in the most fuel efficient way. If the driver and company don't follow recommended methods, the new trucks won't make an efficient cost saving (green) impact.

Now lets take it to a higher level. Lets say the transport company wants to trade carbon credits with a major conglomerate customer. The transport company runs an efficient operation and is considered a green service provider. If the local operations in a given country are inefficient, this opportunity can't happen because there won't be any credits to trade.  The net result is that this whole cycle comes down to measuring fuel and operational efficiency. When efficiency is getting traded,  it can be guaranteed that service will improve as well. 

Everybody keeps thinking this green thing is about hugging trees. It is NOT. It is about saving money that otherwise would be used to pay for fossil fuels. The efficiency will be translated into carbon credits. That will translate into everything from carrier selection to purchase of fleet vehicles and warehouse management resources. All this stuff ties together. Carriers and 3PL service providers who wind up with positive carbon credits will be able to use those as currency with customers who need those credits to prevent taxation. Folks this is not about rates...

Alternative energies and carbon trading can promote energy independence thats financially prudent, good for the environment and potentially lessens the power of the oil cartel on business. 

(Do you understand why I'm motivated now?)   

clipped from www.easier.com Thomas Hardie launches Fuel Torque 12 March 2008 Thomas Hardie Commercials, the main distributor for Volvo truck, bus & coach and LDV light Commercial Vehicles in the Northwest is the first dealer in the UK to launch a fuel consultancy scheme:- Fuel Torque. Fuel Torque is a concept designed to help transport companies make dramatic savings on their fuel costs. “The savings could be massive,” says John Parry, former Engineering Director DHL/Exel Supply Chain “and could have a major impact on a companies profitability”. “As an example, taking a 40-vehicle fleet currently averaging 8 mpg, a 5% fuel saving could potentially add more than £90,000 to the bottom line of the business.  Fuel Management should be a fundamental discipline of any transport operation”. Thomas Hardie Commercials would supply the resource to the customer, analysing the transport operation, vehicles and drivers over a pre-determined period of time.

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