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

STS-135: Atlantis Takes the Greatest Transport System ever into the History Books

Yesterday, on July 8th, 2011, NASA launched the 135th and final space shuttle mission.   I had a lot of internal business stuff to take care of, so I worked from home.  I needed the alone time to get some stuff done, but selfishly, I also wanted to watch this lift off, which was scheduled for 11:26AM Eastern Time.    I have a small TV in my office, so I had it on in the background. I was listening to Anderson Cooper and the rest of the talking heads on CNN blather on about the Shuttle and NASA while the launch team worked through a weather delay, which stopped the countdown at about 9 minutes.

So, slogging through conference calls,  a couple of RFP's and some other business stuff, I kept peering over to see what was going on.   About the time my cell phone rang with a call from our Atlanta District Manager about some staffing issues,  NASA started the countdown again.   I had my back to the TV and was deep into the conversation, when I happened to turn around and saw the Shuttle had already launched and was screaming off into space!!!    My daughter was home at the time in another part of the house. 

Next thing she hears from me is "DAMN!, DAMN!, DAMN!!!!  I MISSED IT!!!"        

I know our local DM thought I had lost my mind. I started fussing "Dammit Rich, you made me miss the shuttle launch!!".    This guy is sitting in the office and and I am sure he thought I was sitting here in my Bunny Slippers.   The phone call ended quickly after that. 

I'm pretty attached to the Shuttles.  I grew up watching Gemini missions when folks like Walter Cronkite, David Brinkley and Eric Sevareid would announce the launches back in the 60's.   Then the Apollo missions came.   Alas, Apollo ended in the 1970's when the moon mission had fulfilled Kennedy's promise and the political juice ran out after the 1973 oil embargo.   

We waited 6 long years for the next launch system to come along.  It was the Space Shuttle.  Arguably the most complex, and most Herculean transportation system ever developed by man.    I vividly recall sitting in my parents home in 1981 when John Young and Bob Crippen took the first shuttle up from Cape Canaveral.   What an emotional event that was.    America was leading again.  Reagan was in the White House.  America was in the ascendency again.  Literally.

Then Challenger happened.   Like the Kennedy assassination and later 9/11,  I think every American remembers where they were when Challenger blew up.   I was in my office when my wife called and told me.  I felt like I had been kicked in the groin.  It hurt.  America hurt.    Two years later, the Shuttle returned, this time safer and NASA was humbled into a stronger, safer space program.    On the backs of Astronauts like Story Musgrave,  Hoot Gibson, Bruce McCandless, Sally Ride and others,  the Shuttle accomplished the launch of the Hubble Space Telescope,  its subsequent repair and ultimately the missions to build the first permanent International Space Station.   Despite the sacrifices of 14 American patriots in the astronauts who died in the Challenger and Columbia accidents,  the Space Shuttle has been an unparalleled success.

STS-135 was essentially a housekeeping mission, taking supplies to the ISS.  It wasn't even supposed to take place.  However, NASA has Atlantis ready to go as a back up shuttle for the earlier missions this year, and decided to fly one last time.  I'm delighted they did.

At some point in the future, America will have the political will to venture into space on its own again.  Whether through NASA and the Orion program, or through brilliant commercial minds who are developing private launch capacity,  America will go back to space.  I can't wait.   The sooner we get a Republican back in the White House again, the sooner that will be.

Enjoy the video above.  That's how I got to see the last mission blast off into space.  

Eric

CSX: Tomorrow Moves Project

One of the cool things about Freightdawg is that I get to meet a lot of people in our industry.   This includes the PR and marketing folks at various transportation companies.   I have followed CSX Railroad for some time, not only for their transportation services in the US, but also their very forward thinking marketing on the Green value of railroad shipping. 

 CSX may be the vanguard for the industry on this topic.  At least they have made the effort to spend the money to advertise on TV, Internet and in print on the economic and environmental aspects of rail transportation.  Every railroad from short line to class 1 benefits from that message.  

I was recently invited by CSX to participate as a judge in a very cool contest called the "How Tomorrow Moves" project.   This contest awarded prizes to contestants who best described  CSX's message of how to protect the environment.  Winning contestants would win $5000.00.  Not bad for a 200 word submission!   

Thousands of entries were ranked by followers of CSX on Facebook.   Finalists were then reviewed by a team of judges composed of various industry and media representatives.   Some good ideas were suggested from the contestants and two lucky winners will be selected.  Here is the video CSX used to introduce the contest, which closed May 13th. 

While the contest was cool, what I really liked was that CSX continues to promote not only their marketing message but uses it to promote ideas that go beyond railroading. 

"When CSX launched this campaign around the environment, I really questioned how this effort would help CSX move freight.  

Over time I've reckoned there are a few ways. " 

First, it raises the image of railroads as a viable domestic long haul transportation option vs trucks.  I think many younger people simply do not think about railroads.  Main stream passenger services are largely a thing of the past, so unless you have specific interest to do so,  rail isn't the first way most young professional transportation people think to move cargo. 

Second, I think the green aspect raises the profile of the railroad as an important societal infrastructure component.  This impacts government and political opinion over whether the railroad is a nuisance or a vital, economic and environmental asset to a community.  Trains moving on rail lines near your home could be seen as noisy, dirty and potentially dangerous.  However, when considering they take many, many trucks off the roads every time they move a train,  the trade off begins to have balance.   Considering that alternatives to foreign oil such as coal and ethanol move primarily by rail, the railroad now becomes an important national asset.  

By raising the positive aspects of rail freight transportation, CSX is doing a great thing for the industry.  Why would a politician vote against rail transportation or right-of-way when such vital interests are being raised to the public?    Voters are being educated here.   Given that, this whole message becomes strategic to CSX and the industry. 

By connecting with the public in new media like Facebook,  CSX is attracting the attention of young people.  Transportation is an asset heavy business with relatively few people in it given the size of the businesses involved.   When I started at United States Lines in the early 1980's,  graduates from ivy league schools interviewed with shipping companies.  Not so much any more.  That stopped being cool in the mid 80's when everybody who looked good in a pinstripe suit figured they could be a stockbroker during the Reagan years.   Reconnecting youth, particularly net savvy young people with brains to transportation is a way to bring new talent to the industry at a time when we need it.  

Lastly,  investors look at the media as well as the general public. CSX stock has climbed steadily since the 2009 economic crisis.  I think there is good reason for this.  The rails move the base commodities that power our country and many exports.   Warren Buffet thought railroads a good enough idea that he bought one.  Moreover, he decided to vertically integrate by buying a rail tank car manufacturing company.  If you are an old technology company wanting to impress a new technology investor base, why not use a forward thinking message like the environment to communicate that CSX stock is a good buy?  

All I know is that if I had bought CSX stock when I started in this business (stock in the single dollars) to now (stock in the 80 dollar range), I wouldn't be sitting in Atlanta.  I'd be in the Bahamas posting this! 

This second video is available on the CSX web site, but I think communicates the green value of rail transportation well.

Eric

WMS Systems trends in 2011

Michael Koploy works as an ERP market analyst for Software Advice in Austin Texas.  Michael covers ERP and WMS systems amongst others.  Mike dropped me a note on a recent article he published on 2011 trends in Warehouse Management Systems (WMS) at the link below.    

http://www.warehousemanagementsystemsguide.com/blog/2011-market-trends-report-warehouse-management-systems-1020911/

Michaels comments regarding 3PL and small business in warehouse management were an interesting read, especially surrounding 3PL requirements for managing multi-tenant facilities (which plays directly towards the small to medium sized client.)  

I, for one, would like to see a more in depth article on 3PL requirements as seen from the software side of the business.   I'm interested to see if the same requirements we tell our software vendors are needed are perceived in the same way and with the same importance! 

 

An Old Dawg Talks about New Tricks. 2011 awaits.

My friend and former colleague Jerry Hempstead spent 32 years in the parcel business.  He "retired"...and I use that term loosely... in 2006.  In the meantime Jerry and his consultancy practice have been busier than most non-retired people I know.   Jerry possesses a passion for people, intellect for our business and street savvy that make him simply fun to be around if you are a freightdawg like me.  

I've been working in this field for 25 years and I learn every time I talk with Jerry.   Below he shares his thoughts for 2011.  This will be a challenging year in rebuilding the global economy.  Logistics players will be challenged across the board, ranging from carriers to 3PL's and forwarders to the integrators.   Nothing is as it was.

_____________________________________________________

I get a lot of what I would call "negative mail". Items that complain about the decisions being made by politicians. The state of the economy, the housing crisis, the dollar, our taxes and so on. Taken without context, its enough to make one depressed.

Today we are on the verge of entering a brand new year. Most who know me, realize right away that I'm an optimist. Just ask me how I'm doing when you call me... you'll know immediately.  I believe that no matter how bad things are,  I have a daily obligation to determine how I will relate to you. I choose to do so positively.

My life's passion is Logistics.   When I think about it and the future, I get excited.   I've been doing this for years, and I remain motivated about our field of endeavor. While I am retired from the firm I served for many years, I remain active in the industry I love as a consultant, enthusiast and confidant of supply chain professionals worldwide.

I'm a parcel guy first and I remain amazed at our postal system. We in the United States have the greatest postal service on the planet. I have lived overseas and can attest that our service is second to none, when you consider that every citizen has the right to home delivery six days a week. The Postal Service is actually one of the few things our Constitution says the government must provide.

The United States Postal Service employs over 500,000 people. Relative to any other postal service, ours is a bargain. $.44 for one to three day service just about anywhere in the USA is amazing. I think its the most complex logistics provider on the planet when you consider all the classes of mail, the number of pieces they handle and the myriad of sizes and shapes they transport.

As weird as it sounds, the USPS is one of the biggest customers of FedEx and UPS. Conversely two of the largest customers of the USPS are FedEx and UPS. I suspect that FedEx Smartpost gives the USPS more parcels today than any other mailer, and Smartpost has been the fastest growing FedEx service.

Two of the largest logistics players in the parcel world are U.S. companies FedEx and UPS. Take a look at how these two firms performed financially in 2010.  Fedex stock rose by 11% year to date and UPS is up 26%. I think between the two there are over 600,000 people employed globally. We can be proud of both these companies and be thankful they are American flag carriers.

I thought about our road system after seeing a television program on how our infrastructure is crumbling and that we are in crisis. I spend a lot of time "on the road", both here and abroad, and I can share with you that with all its faults our interstate and local road systems are the best there is in the world.

I have been on every continent except Antarctica and I can say that we are blessed to have the network we have today. No other country has invested like we have in our roads, with the possible exception of Germany. We have the most available and largest domestic trucking industry in the world and a workforce that for all its issues generally cares for the customer and about their mission in the transport and delivery process.

The United States has more technology, more ports, more rail track and more modern and sophisticated aviation infrastructure than any other country.  We are blessed.

I have had the opportunity to work for over three decades with a group of people who have passion for their work and for building enterprises that offer services that delight customers. I've witnessed incredible, exciting changes over those decades that have increased the speed, visibility and the consistency of the services being offered. Most of all I have shared my life with a community that has a tremendous work ethic and a wonderful sense of camaraderie that the logistics industry seems to engender.

I have made lifelong friends as a result.

So as we enter 2011 let's focus not on what the press is saying about how bad things are, and let's get to work making a difference each and ever day to make the situation better. Even if its just the pride at the end of the day, that you did your best and for those tasks to which you were assigned that day, you made a difference.

Do these Eight things in 2011.  They will not only improve your business, but your life.

1. Make every encounter with your peers, your customers, your family, your friends a positive one. Brighten up a room when you enter and not when you leave. 


2. Make an effort every day to improve yourself. don't let time get wasted away without content. Use the commute to listen to a book on tape, read a book or article, for goodness sake, what you are thinking is important, write an article. This will make you more valuable to your employer or when you might be seeking new employment or a promotion.


3. Dress like you care about how you look. People make judgements based on first impressions. Sorry but that's just life. Always look like you are enjoying the experience...over time you will.


4. Everyone wants to be assured that they are important, worthwhile and accepted. This includes your family and your colleagues. Take the time to send an email or better yet call or speak face to face and tell them they did a good job, or that you really appreciate something they did.  You will make friends for life.


5. Focus on doing the right things, doing them right and not having to do them over. Do everything as if your job depends on it. Have a sense of urgency and a sense of pride in what you produce. Be thankful you have meaningful work and know there are 400 people out these that would love to have your job (no matter how bad you think your job might be).


6. Get involved. if you are in the freight/logistics business you are remiss if you are not at least attending the local roundtable events hosted by CSCMP. There are other inexpensive and or free organizations that will expand your circle of contacts and if you pay attention will increase your knowledge of the business. Organizations like Toastmasters will help you in may ways to improve who you are and how you communicate and also make you some great friends.


7. Know what's going on with federal and local issues that impact your employer and your continued employment. Then get involved. You can communicate for free with your elected officials. Believe it or not,they keep track of what constituents are saying. You can be on the bus or under the bus. Your choice.


8. You are bright, intelligent, articulate, and motivated if you got this far in the article. Take that power and create a mission for yourself for 2011 and then put it on an index card and post it on your bathroom mirror. Make a decision that 2011 is going to be the best year of your life. List those things that are important to you and to which you will actually devote some time and create one or more things on your bucket list to accomplish in this coming year. My wife has always wanted to go to Poland, the land of her fathers ancestors. Number 1 on our list for 2011 is to get to Eastern Europe. What do you think my odds are of getting that accomplished?

Happy New Year

Jerry

Green Packing Materials

Packing materials used in both freight and express parcel movement are both expensive to produce and eat lots of petro resources.  Not exactly green materials.   

ZDNet has a great video on some new developments in creating biodegradable packaging for ecommerce uses as well as some interesting information on how bio materials are making their way into plastics used in everyday items up to and including automobiles.

Check this link out to the ZDNet site.

CSCMP Releases 2010 State of Logistics Report

Sponsored by Penske Logistics, the Council of Supply Chain Management Professionsl (CSMP) released their 2010 state of the logistics industry.

Check out this video with Rosalyn Wilson, author of the report.

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The 21^st Annual “State of Logistics Report^®,” released by the Council of Supply Chain Management Professionals (CSCMP) and presented by Penske Logistics, reveals that, continuing the decline reported in 2008, business logistics costs fell to 7.7 percent of U.S. Gross Domestic Product (GDP) in 2009, as compared to 9.3 percent the previous year.  Total U.S. logistics costs dropped again last year showing a significant decrease from 2008.  Interest rates remained historically low, and this, combined with lower inventory levels, pushed the interest paid on inventories down over 89 percent from 2008 levels. 

 The report, authored by Rosalyn Wilson, a transportation consultant for Delcan Corporation, was presented today at the National Press Club in Washington, DC. A panel of senior supply chain executives and academics from BNSF Railway, Covidien, Delcan Corporation, Jones Lang LaSalle, Miami University (Ohio), Penske Logistics, Staples, and Sustainable SC Consulting discussed the implications of the report’s findings on their companies, the logistics industry, and on the economy as it recovers.

via state-of-logistics.presslift.com

ABS Capital Partners invests in INTTRA

Capital infusion to fund development of e-commerce portal

INTTRA, the carrier-owned portal for ocean-freight bookings, is getting a fresh capital infusion that will enable it to develop new electronic commerce services for new markets.

ABS Capital Partners, a capital fund that specializes in later-stage growth companies, has invested $30 million in INTTRA and is taking a majority stake in it.

INTTRA will use these funds to further develop its platform for electronic invoicing and to roll out a new product that will enable shippers to make bookings and instructions with non-vessel-operating common carriers.

“ABS Capital’s investment will give us the financial strength to accelerate our business plans and operations,” said INTTRA CEO Ken Bloom.

He said INTTRA’s search for new investment was started by its board more than two years ago before the onset of recession.

via www.joc.com

The INTTRA ocean portal is one of two major carrier neutral portals for booking, documentation and tracking of ocean freight.

Originally backed by European ocean carriers such as Maersk and Hapag-Lloyd, the portal has grown in sophistication and breadth of membership.

A number of leading NVOCC's including DHL Global Forwarding, Panalpina and UTi, also belong to the portal as a way to provide a common user interface to ocean customers who want a one stop shop for eCommerce.

The ABS investment is interesting because (as far as I know), this is the first VC investment into the portal. Given that the portal is backed by several of the worlds largest ocean carriers, the investment must be viewed as relatively safe. However for cash strapped ocean carriers, this has to be seen as a major win in divesting the majority stake in a non-core business whilst still keeping the portal and its inherent economic benefits intact. 

Venture Capitalists are not known for their long term views nor holdings, so it will be interesting to see how a VC dominant position on the INTTRA board changes the direction of the company over time.  As a late stage investor, ABS may intend to hold the investment for a longer period, but one wonders what the eventual exit strategy of a VC would be in an ocean portal? 

Eric

C&W comments on Commercial Property Trends

Cushman & Wakefield are global commercial real estate brokers specializing in commercial real estate space.  Their interests in both commercial office space and warehouses are substantial.  As a result, C&W have produced an interesting white paper that documents trends in commercial warehouse space in both the Americas and globally.  

Interesting findings include:

• Global industrial rents declined by an average of 5.5% in 2009
• While the Asia Pacific region saw the largest decline in rents (-6.4%), it is also the first to show signs of stabilizing due to an up tick in exports and rise in production
• Ottawa now replaces San Francisco as the most expensive city for industrial space in the Americas
• In the US, an increase in consolidation has caused a trickle down effect including an increase in supply of space and a downward pressure on rental rates
• Upturn in domestic consumption and regional trade will be the determining factors in the strength of recovery in occupational demand

The global info in the C&W white paper didn't surprise me.  However, some of the trends in the Americas were of interest. In particular the expense of commercial property in Canada and Mexico.  Both are growing markets, but the cost of commercial buildings surprised me given the downturn in the global economy.

Download the white paper here.

Eric

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Supply Chain Strategy: Developed by Market.

Cranfield University in the UK is a leading supply chain educational institution. Richard Wilding, PhD is an expert on supply chain strategy by market. He is a professor of Supply Chain Risk Management at Cranfield. Dr. Wilding is a well respected expert in Europe on Supply Chain Strategy.

Corporate marketing teams make the case relative to product value in individual markets. Logistics teams however are the ones who fulfill the delivery of the promise made by marketing.

Eric

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Tesco Direct Chooses Manhattan

Tesco is a major convenience retailer in the UK and more recently in Southern California.   Tescodirect.com is a website operated by Tesco that allows ordering of products for home delivery in the UK.    To enable the Tescodirect.com ordering capabilities,  Tesco chose Manhattan Associates warehouse management systems to facilitate the unique order picking requirements of direct purchasing, such as picking single items.   This is not something ordinarily done in a distribution center that supports retail stores.    The video below shows how Tesco are using Manhattans tools as a case study.

The video below is embedded from www.yourtechtv.com.  I recommend signing up for this site because they have a complete supply chain management category for video.  I'm a believer in online video as an interesting and instructive communication tool.  You'll see more of these vids on Freightdawg.com in due course.   

(Note: Some corporate proxy servers ban video from some sites such as 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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