Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
The new kid on the freight broker block is in a legal smackdown with the big kid on the freight broker block.
Depending on how the scales of justice tip, the outcome could spell trouble for the newbie.
On Jan. 17, a state court judge in Hennepin County, Minn., ruled that several employees of XPO Logistics
Inc., a nearly two-year-old company
that has rapidly grown through acquisitions and internal expansion, wrongfully
procured customer lists and solicited personnel from their former employer, C.H. Robinson Worldwide Inc. Eden Prairie,
Minn.-based Robinson has been in business since 1905 and is the nation's largest freight broker.
Judge Ronald L. Abrams ordered XPO to return to Robinson its customer and carrier worksheets that were in
possession of former Robinson employees that jumped ship. Judge Abrams also barred XPO employees who had worked
for Robinson and who are governed by a two-year nonsolicitation agreement from soliciting or contacting current Robinson
employees about joining XPO.
Judge Abrams didn't hit XPO with any direct legal sanctions, refusing Robinson's motions both for a
temporary restraining order and a temporary injunction against its rival. Judge Abrams said the breadth of
sanctions sought by Robinson could have a devastating impact on XPO's nascent enterprise. The judge added that as
the country's largest and most visible freight broker, Robinson is, and perhaps should be, a natural target for
competitors looking to lawfully recruit its talent.
But Judge Abrams' 31-page ruling meted out its fair share of pain to XPO. He barred XPO from doing business
with any of the Robinson customers identified on one of the worksheets that also tendered shipments that generated
more than $100,000 in "gross revenue," or revenue paid by the customer to the provider, for Robinson in 2011. The prohibition
was to extend until July 1, 2014, or until a further order by the court, the judge ruled.
The worksheet contained the names of hundreds, if not thousands, of companies that did business with Robinson,
according to a source close to the matter. It is unclear how many customers listed on the spreadsheet meet or exceed
the 2011 gross revenue threshold set by the court.
The day after the ruling, Greenwich, Conn.-based XPO went before Judge Abrams to request a stay on that
part of his order. The judge agreed to grant the stay pending further court action. At this time, no additional
hearings are scheduled.
XPO has complied with all other aspects of Judge Abrams' ruling, according to the source.
Robinson had more than 37,000 customers worldwide in 2011 according to company information. The accounts ranged
in size from Fortune 100 companies to small businesses. Robinson's gross revenue hit $10.3 billion that year.
Its largest customer represented less than 3 percent of its total net revenue—revenue after factoring out the
costs of purchased transportation—of more than $1.6 billion, the company said. It would not identify the customer.
XPO reported 2012 operating revenue of $278.5 million, compared to $147.3 million in 2011. XPO posted an operating loss of
$27.9 million, compared with an operating profit of $1.7 in 2011, as the company made substantial investments to keep up with
the rapid growth. Bradley S. Jacobs, the company's founder, chairman and CEO, has estimated XPO's 2013 revenue will range
between $650 million to $750 million, which includes about $300 million in revenue booked as of the end of 2012 by companies
it plans to acquire during 2013.
For now, it is business as usual at both companies. However, there is no guarantee Judge Abrams' stay will remain
in place. Both companies declined to discuss the case, saying the judge's ruling speaks for itself and no further comment
was warranted.
ROBINSON'S ALLEGATIONS
The skirmish began on August 1, 2012, when Robinson sued XPO as well as William F. Kratt IV
and Roman Pankiv, two former Robinson employees who had since joined XPO, for breach of contract,
interference with contracts, and misappropriation of trade secrets, among other allegations. In late
August, Judge Abrams issued a temporary restraining order against the XPO employees, barring them from
contacting any of their former co-workers and directing them to return any of Robinson 's confidential
materials still in their possession.
During the evidence-gathering process that fall, XPO identified 71 documents that appeared to contain
Robinson's business information and was given to XPO from someone who worked at Robinson during the prior two years,
according to the ruling. A court-ordered forensic examination found that Kratt kept worksheets that he had access to
at Robinson containing lists of customers, carriers, contact person information, and notations specific to carriers
and customers, the judge said.
Another former Robinson employee who joined XPO, Brad Bell, had worksheets of Robinson's top customers that showed
such information as the total number of loads Robinson covered for each customer and a customer's revenue contribution
to Robinson, according to court documents. Bell also had a spreadsheet showing the total number of loads, gross revenue,
and net revenue for every carrier from Robinson's Phoenix office, court documents said.
In their roles as brokers, Robinson and XPO match loads tendered by their shipper customers to available motor
carrier capacity. Neither company owns trucks, but each maintains relationships with a network of carriers.
Some of the data in Bell's spreadsheets were disclosed to high-level XPO management, such as Greg Ritter, the company's
senior vice president of brokerage operations, and Lou Amo, its vice president of carrier procurement and operations,
according to court documents. In one case, Bell shared information about business that Robinson did with Conair, its
fourth-highest grossing customer, to Amo and other executives, according to court documents.
Bell repeatedly disclosed to high-level executives the rates Robinson paid certain carriers on particular routes,
the judge said. In addition, several XPO employees would contact current Robinson employees to obtain information about
carrier pricing, according to the ruling. Jacob Schnell, XPO's carrier procurement and operations manager, asked Robinson
employees to access Robinson's proprietary computer systems to find information on carrier rates to determine if XPO's
pricing was competitive, according to the ruling.
Kratt and Bell are no longer employed by XPO, but Pankiv continues to work there.
A BALANCED APPROACH
Judge Abrams tailored the scope of his decision so as not to push XPO against the wall but to
still send a strong message about its alleged practices. The judge said the evidence showed XPO
would inflict "irreparable harm" on Robinson if it continued to misuse Robinson's confidential information.
He added that XPO didn't just threaten to disclose Robinson's information but actually did so by sharing and
openly discussing the intelligence among high-level executives.
Judge Abrams dismissed XPO's contention that because market decisions in the brokerage field are driven
by pricing considerations rather than customer relationships, it is inappropriate to claim that Robinson's
goodwill with customers was compromised to the point of producing irreparable harm. He found that "there is
direct testimony from multiple actors...that employees build relationships with customers through persistent and
sustained contact with those customers."
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”