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.
For the second time in less than four years, YRC Worldwide Inc.'s unionized workers will be voting on
a contract as if their livelihoods depended on it.
Leaders of the Teamsters Union, which represents about 26,000 unionized workers at the less-than-truckload (LTL)
carrier, on Friday approved a membership vote on the company's proposal to extend the current collective bargaining
agreement through March 2019. Ballots will be mailed either tomorrow or Wednesday and will be counted around Jan. 8.
The first principal payment of $69 million is due Feb. 15. Overland Park, Kan.-based YRC said today it expects to
save $100 million a year through the contract's provisions and other so-called corporate initiatives.
James L. Welch, YRC's CEO and president of its YRC Freight long-haul LTL unit, said today he was not at the Friday
meeting and was unaware of comments made by his executives of such a drastic step. Welch said he remained confident that
workers would ratify the agreement, adding that it would be hard to find jobs elsewhere in the LTL sector as well-paying
as YRC's. The LTL industry is overwhelmingly made up of nonunion carriers whose compensation is generally below that of
YRC and its unionized rival, ABF Freight System Inc.
In late October, ABF's rank-and-file ratified a new five-year agreement that called for wage cuts and productivity
improvements that would save the trucker between $55 million and $65 million a year over the contract's life. The agreement
narrowed the cost differential between YRC and ABF, which had the LTL industry's highest cost structure, and made ABF more
cost-competitive in the eyes of many shippers.
In a filing today with the Securities and Exchange Commission, YRC said that it "may be unable to refinance or restructure"
parts of its debt that mature in 2014 without an extension of its current agreement. The rank-and-file's failure to ratify the
compact would have a "materially adverse effect on our business, financial condition, and results of operations," the company
said.
In 2009, YRC's rank-and-file approved a series of extraordinary contract concessions that helped keep the company out of
bankruptcy protection. After close brush with bankruptcy at the end of 2009, YRC appeared to be making slow headway under Welch,
who was named CEO in mid-2011. However, the company's struggles have resurfaced, most recently in the wake of a major YRC Freight
network restructuring that did not go well. The outcome led to the dismissal of then-YRC Freight President Jeffrey A. Rogers and
Welch's assumption of the YRC Freight post.
Under the contract proposal, union workers would receive, in lieu of pay raises, $750 in annual bonuses over the first two years
of the extended contract. After that, they would receive net annual raises equal to 34 cents an hour. Vacation pay would be capped
at 40 hours per week or 1/58 of annual earnings. Three-week paid vacations would only be available to workers with 11 years
seniority.
The first bonus would be paid in early 2014 should employees ratify the contract extension and lenders agree to the debt
restructuring, Welch said.
Profit-sharing programs will kick in if YRC Freight achieves a 97-percent operating ratio per year starting in 2015. Workers
will share in a larger percentage of profits should the unit's ratio decline further. For YRC's profitable regional units, profit
sharing would begin at 94.1 percent. Operating ratio is the ratio of expenses to revenues and is a measure of a transport company's
efficiency and profitability. YRC Freight's third-quarter operating ratio stood at 101.2, meaning it spent a little more $1.01 for
every $1 in revenue. The company said its ratio in the quarter was impacted by problems surrounding the network revamp. YRC
Regional's third-quarter operating ratio stood at 95.5.
In addition, the contract would allow YRC for the first time, to subcontract out 6 percent of its driver work, with supposed
protections for all currently employed drivers. Some drivers have voiced concern that the protections would only apply to the
originating drivers on a multistop trip. As a result, "relay" drivers, (or those drivers other than the originating driver who
pick up loads at various points) could have their work subcontracted out, they warn.
Welch said the use of "purchased transportation," another term for subcontracting, would be confined to markets like Chicago
where the company is facing a driver shortage. "We will not use it in place of existing rank-and-file drivers," he said.
Pension contributions, which were suspended in mid-2009 and resumed in 2011 at one-fourth their prior amount, will be fixed at
the current levels through the life of the extended compact.
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Two European companies are among the most recent firms to put autonomous last-mile delivery to the test with a project in Bern, Switzerland, that debuted this month.
Swiss transportation and logistics company Planzer has teamed up with fellow Swiss firm Loxo, which develops autonomous driving software solutions, for a two-year pilot project in which a Loxo-equipped, Planzer parcel delivery van will handle last-mile logistics in Bern’s city center.
The project coincides with Swiss regulations on autonomous driving that are expected to take effect next spring.
Referred to as “Planzer–Dynamic Micro-Hub w LOXO,” the project aims to address both sustainability issues and traffic congestion in urban areas.
The delivery vehicle, a Volkswagen ID. Buzz battery-electric minivan, will feature Loxo’s Level 4 Digital Driver navigation software, a highly automated solution that allows driverless operation. The van was retrofitted to include space for two swap boxes for parcel storage.
During the two-year pilot phase, Loxo’s Digital Driver will navigate a commercial vehicle several times a day from Planzer’s railway center to various logistics points in Bern's city center. There, the parcels will be reloaded onto small electric vehicles and delivered to end customers by Planzer’s parcel delivery staff.
Following the completion of the pilot phase, Planzer and Loxo will build on the program for rollout in other Swiss cities, the companies said.
The partners said the project addresses the increasing requirements of urban supply chains and aims to ensure the “scalability of their disruptive solution.” With largely emission-free delivery, it contributes to greater levels of sustainability for the city as a living space, they also said.
“The uniqueness of this project lies in the fact that it will have a direct impact on society,” Planzer’s CEO and Chairman Nils Planzer said in a statement announcing the project. “We didn't just want to integrate automated technology into existing systems, we wanted to develop a completely new concept and a new business model.”
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.