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

Perspective...

Last night I watched "60 Minutes"

It's an American television documentary-news show. They had a  piece that chronicled the hardship of the town of Wilmington, Ohio relative to the withdrawal and shut down of DHL Express US domestic service. 

The impact of DHL's service changes has had clear impact on this small town and southwestern Ohio as well.   While it's indicative of the hardship Americans are facing with the current economy, it's not the only company nor community that's hurting.  Taking our whole country into account, we are hurting in many areas.  

Here's just a short list of companies who have laid off employees.

• Sprint Nextel = 8,000 jobs
• Caterpillar = 20,000 jobs
• Home Depot = 7,000 jobs
• Microsoft = 5,000 jobs
• Washington Mutual = 3,000 jobs
• Starbucks = 2,000 jobs 
• Circuit City = 35,000 jobs
• General Motors = 2,000 jobs

Thats 82,000 American workers without even talking about the Automotive Industry.

That's NOWHERE near an exhaustive list!!   But the numbers are scary when you start adding them up. My 21 year old daughter was delighted to get a hostess job at an upper end restaurant today.  She commented that there were a lot of "clearly professional" people applying for the same job.  Times are HARD and a job is a job.  That lesson (surprisingly) wasn't lost on my kid. 

Even Google has laid off 100 recruiters. Google is still in growth mode, but perhaps it may take a pause in gaining new geniuses.  It may have enough for now.

The total personnel reduction at DHL will be over 20,000 folks as the company reconfigures to "International only" service.   However, a few things can be said. DHL never asked for a federal subsidy nor bail out.   Second, we never asked our customers to pay extra for our services in the face of difficulty.  Lastly, Deutsche Post put up serious money to assist outgoing employees with both job retraining and economic welfare.

The clear deal here is that DHL will focus on its core products and match its capacity to individual markets. To do anything else would not be smart.  

 I used to tell my customers back in the 1980's that "if you can't sell it, I can't ship it."  That saying is truer now than ever.  Let it be said that I am not an apologist for DHL.   I am a participant in the current economic adventure. 

Nobodys job is safe these days.  Mine included. 

Eric

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So Much for Freedom of the Open Road!

Truck drivers have always been an independent breed.

These are folks who prefer the freedom of time and distance in delivering freight on schedule.  Drivers are independent thinkers who are free to choose their lifestyle. Truck driving is an art mostly.

Between the distances demanded every day and the limits of how many hours a driver can drive, it becomes a stress factor for drivers to balance being legal vs being on time.

Over the years, technology has become available that helped track the efficiency within which goods were delivered by truck.  These included tracking driver hours, stops, GPS position, etc.

I recently had email from Steve Hensley, CEO of BlueSky Logistics on a new software package that tracks both driver and truckload behavior.  Steve was rightly highly pumped about the efficiency that this package creates for trucking operations.

I think this is great for performance measuring, but I wonder if the allure of the open road is now lost on the free spirits who used to choose this occupation?  I mean, lets face it...with this software a movie like Smoky and the Bandit could never have been made! 

Some of the stuff the new Bluesky technology tracks...

· Road segment by segment speeding.  With Google mapping.

· Unknown / unauthorized stops.

· Overages, Shortages and Damages.

· Later deliveries and late delivery notifications to a customer portal.

· Route tracking details.

· DOT violations.

· Over revs.

· Idle Time and excess idle time.

· Out of route mileage.

· Mile Per Gallon.

· On-time performance.

And all of this can be looked at by:

· Site

· Account

· Driver

· Driver Groups

· Vehicle

· Vehicle Groups

· Date ranges, including trending.

· And several other exception based parameter

Gone with the wind...

In the 1980's, when I lived in Charlotte NC, it used to be fairly common that inbound containers were delayed because of "flat tires" in Holly Hill SC.   Turned out that there was a "pleasure stop" located in Holly Hill.   This new software could do wonders to curb creative use of hardware.

Eric

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A Good Pilot and a Good Airplane Save the Day.

US Airways flight 1549 was scheduled to fly today from New York  Laguardia airport to Charlotte NC. The flight was equipped with an Airbus A320 and an experienced crew lead by Captain Chelsey Sullenberger.

After an apparent bird strike shortly after take off, the aircraft was ditched in the Hudson river due to loss of engine power resultant from the bird strike. The flight contained 155 passengers, all of which survived the crash.

Observers on the ground indicated that the airplane flew low over the Hudson then settled in in a controlled way.   Passengers disembarked through emergency exits and were later evacuated by local ferrys and boats that came to the rescue.  Today was an extremely cold day in New York and New Jersey, with temperatures in the 20's or below.  Passengers were taken to New York area hospitals complaining mainly of the cold and potential hypothermia.

The video below shows early content today from WNBC in New York.  The knucklehead reporting doesn't know the difference between an A320 and a regional jet.  This was a full Airbus jet with 155 people aboard. There ARE no regional jets that hold that many people.  Nevertheless, the film footage is interesting.  

The naievete of TV reporters amazes me. They get away with a lot of sensational stuff just because they are on the spot first. The guy reporting is clearly making this up as he goes along.

 

New York City Mayor Michael Bloomberg personally complimented US Airways Captain Sullenberger for the orderly way the aircraft was evacuated and the leadership his crew displayed in taking care of the passengers aboard.

Eric

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Yoram Bauman: The Standup Economist

A lot of the posts I've written lately have been about the hard economic times both the global economy faces as well as its derivative impact on logistics and supply chain.  This includes both the movement of freight as well as its impact on supply chain professionals in all categories.  

Now, just for fun,  I include the video below which is done by a real smart guy named Yoram Bauman.  Yoram is a PhD real economist who who has a heck of an ability to make this whole economics thing easier to understand for us freight sales types.  Check it out.

President Obama should probably name this guy to his happy-go-lucky staff as a diversity plus.

Dr. Bauman has a number of other routines worth watching as well!

Eric

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Pirates: Here's an idea- lets let them experience a live fire exercise.

Surfing around today, I read a great article in the Canberra (Australia) Times about the major difficulties Somali pirates are presenting to commercial shipping transiting the Red Sea and Indian Ocean.  These ships are coming under increasing harassment from fast boats equipped with rocket propelled grenades and heavy weapons.  The pirates use speed boats and heavy weapons to approach commercial ships then board them, demanding ransom.   

Navies ranging from the US and British to the Chinese have put warships in the area to help protect merchant ships, but given the long coast line of Somalia and the large area of ocean involved, direct protection seems difficult.

Current international law prevents merchant vessels from defending themselves with deadly arms.   The pirates however have no problem going to sea with AK-47's and RPG's.  The latest thought from the great minds at the UN is to use naval vessels to blockade harbors where pirates might take hostage vessels. There are not many. This is possibly a good strategy.  However, I think there is a much better one.

Let Merchant Vessels Carry Arms.

Spanish galleons in the 1500's carried gold.  They also carried cannon.  The goal was to transport goods without harassment, but if it came...you could at least defend yourself.    Pirates won many of those battles because they used fast attack ships and bloodthirsty crew whose only mission was taking the ship and its' cargo. 

Pirates today would prefer to hold a ship hostage then take ransom from a shipping company and vessel owner.  International law today prevents merchant ships from carrying arms.   I think that's  misguided.

Lets either give merchant vessels moving through known pirate areas guns and heavy weapons or provide them with national marines and troops who are expert at defending attacks.  It seems to me that the moment that merchant vessel defense becomes a naval responsibility, most of this piracy will end.   Helicopter gunships deployed from merchant vessels will be highly deterrent.

So far, the risk assessment seems to be on the pirates side.   Attack, knowing that the victims have no more than water cannon, or stand down knowing the target has devastating weapons and helicopters that are likely to kill you.

When you live in a country with no formal government nor control of the national landscape, versus taking hostage of fat, commercial pigs whose owners will pay you to release them, this seems like a simple commercial decision.

Like the 1500's...a navy of greater will and determination will need to come fix this problem.

Eric

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Remember its a "Dry Heat"

I blogged recently about APL seeking cheaper digs for its corporate headquarters but selection of Phoenix, Arizona seems ironic.

A major shipping company based in the 115 degree heat of Arizona?   It makes sense financially, but the concept of a shipping company based in the "dry heat" of Arizona just seems funny to me!  Especially APL, who historically has always been an icon of the "cool" San Francisco bay area.

I know one thing,  APL won't have a problem finding high quality IT people in the area.  Lots of talented technology people work in the Phoenix area because many companies, including DHL, have their data centers there.

APL headquarters moving to Phoenix By Cecily Burt Oakland Tribune Posted: 01/07/2009 04:39:17 PM PST OAKLAND — Neptune Orient Lines, the parent company of shipping giant APL, announced today that it will move its Americas headquarters from Oakland to the Phoenix area later this year. The company announced in November that it would relocate its Oakland headquarters as part of several cost-cutting moves to meet declining revenues and a worsening economy. APL will retain its marine terminal operation at the Port of Oakland. Oakland has hosted APL's headquarters for 35 years, and the company's roots go back to 1848. NOL purchased APL in 1997. Approximately 340 employees work in the Oakland office. Mike Zampa, communications director for North America, said NOL is in the process of deciding which positions will be moved and which employees will be offered the chance to relocate. Those announcements likely will begin later this month, Zampa said.

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Happy New Year My Brethren.

Today is New Years Day 2009.  For we logistics and supply chain folks, we concluded a very tough year in 2008.  Lay offs, ships laid up, divisions closed, salaries and benefits cut,  all in the name of making the business fit the market. 

More transportation and logistics folks got laid off this year than in any time I can remember since the container shipping business melted down in the mid 1980's.  It used to be that kids with degrees from Ivy league schools wanted to join international transportation companies.   That hasn't happened in a very long time.  Lets just say my son will be applying to law school this spring and nobody I know of in his age group is even considering our industry. 

Normally I'm very optimistic at the new year.  New budgets, new RFQ's and customer bids, generally a new chance at business and at life.  I think this is a season and a time over the next couple of years, where the business veterans will leverage their experience to make things work.  Hard times will distinguish whats "real and whats Memorex".

There is an Opportunity Here. 

Shippers are looking to avoid the same pitfalls we are.   Moving goods "fast for cheap" has always been the goal, but more than ever, I see my clients looking for solutions.  These are the fruits of our experience. What modes best fit the customer's client need?

More than ever, I find myself thinking about my customers customer. What promise has been made in terms of service delivery?    Are there other ways to accomplish the same thing with perhaps a day or two later delivery at a lower cost? Are there alternative origins where rates may be more advantageous?

I also spend more and more time with my customers international trade compliance team. Today, Compliance folks route freight. Being compliant with ever strengthening regulations in the United States and abroad gives these folks both clout and legitimate business influence. Being conversant in customs regulations and trends is something that I've had to work on. However it's made me an asset to my customers, which ultimately means my company and our relationship has more value beyond a simple freight rate.

There is a proverb which is said to be of Chinese origin. "May you live in Interesting Times".  I used to think this was a blessing until a great friend of mine told me that this is actually a curse.  I truly believe we live in times that will be very interesting in the next 2-4 years.  

Having said that, and since I borrowed my wifes ipod while writing this, I share also one of my favorite REM songs (daysleeper) which I think fits the mood.

God Bless everyone in our industry.  This will be a hard year.  Having said that, I look forward to making opportunities out of challenges.  We all have no choice!

Eric

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