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.
After several years of false starts, it seems the trucking capacity crunch is finally arriving.
The latest evidence came today from consultancy FTR, whose monthly index of trucking conditions showed
"unprecedented capacity constraints" in February, similar to the month before. Severe winter weather amplified an
already-tight supply situation, and FTR expects a sellers' market for truckload services to persist for the rest of 2014.
When taking the bad February weather into account, the monthly reading represented the "tightest truck market on record," FTR
said.
Jonathan Starks, FTR's director of transportation analysis, said the imbalance is driven largely by changes in the regulatory
landscape that have compressed driver and rig supply. However, he added in an email that "demand has held up pretty well so far
this year."
In a statement accompanying the results, Starks said shippers and carriers "have to be on the lookout for a potential
tipping point when freight demand is able to keep [up] the current high level of truck use well into the summer months." If
that scenario unfolds, shippers will be forced to bid up rates to ensure they have adequate capacity during the fall shipping
season, Starks said.
The first two months of the year saw dramatic spikes in spot-market rates as shippers who were unable to get contracted
capacity were forced into the premium-priced category to get their loads moved. The current combination of moderating demand
and the spring thaw has eased fears of a full-blown capacity crisis, Starks said. But he warned that it would only take a
relatively modest and short-lived uptick in industrial production to tighten up the market yet again.
The good news for carriers—and conversely a warning for shippers—was also found in a first-quarter survey
of small and large carrier executives issued last week by the consulting company Transport Capital Partners (TCP). About 77
percent of respondents said they expect volume increases over the next 12 months, up 74 percent from the fourth quarter 2013
consensus, the group said. Four out of five carriers expect rates to increase over that period, a 62-percent jump from the
prior quarter, TCP said.
Because of the powerful spikes over such a short time span, Richard Mikes, a TCP partner, leader of the survey and long-time
industry veteran, said in a statement that the "literal mother of all rate increases may be here in 2014." Through the first half
of the year, rates will rise at a mid single-digit pace rather than by a low single-digit amount as forecast earlier by carriers,
Mikes projected.
About 60 percent of carriers reported that their days sales outstanding (DSO) had not increased, according to the survey.
This trend indicates that shippers are paying with reasonable promptness so they don't fall out of favor with their carriers,
TCP said. Mikes said he expects DSO to continue narrowing as capacity tightens further.
During the past several months, shippers and carriers alike have complained about a shortage of qualified drivers and
available rigs. While the capacity problem was most acute in the winter months, the dilemma is starting to take on a secular
feel. Howard Mingo, who runs transportation out of Wal-Mart Stores Inc.'s LaGrange, Ga., facility, about 60 miles south of
Atlanta, told an industry conference last month that attracting drivers who fit the retail giant's specifications—Wal-Mart
does not hire drivers without a certain amount of logged miles under their belt—is a growing problem.
"It's difficult to get drivers nowadays," said Mingo, who supervises 165 drivers that run, on average, about one million
miles per month. Apparently, though, it's not for a lack of supply; Mingo said he has received as many as 753 applications
for one driver opening.
Mingo said he tries to get his drivers home every week, and offers a 5-cents-per-mile bonus for drivers who work over a
weekend.
Ashwin Rao will serve as the company’s principal AI architect, after a career in which he served from 2016 to 2022 as the head of AI for Target Corp., where he led a team that developed mathematical models for pricing, merchandising, customer experience, supply chain logistics, and other functions. Previous to that role, he worked in the finance sector on Wall Street, and is currently an adjunct professor of applied mathematics at Stanford University.
“The opportunities to use AI to transform the building products distribution industry are endless,” Rao said in a release. “I’m excited to get started on dozens of AI workstreams that, combined with advantages of scale, will help QXO increase efficiency, optimize supply chains and add value for our customers.”
He joins QXO as the company is preparing to target tens of billions of dollars of annual revenue over the next decade through accretive acquisitions and organic growth, the company says. According to Jacobs, who is the company’s chairman and CEO, AI will play an important role in that approach. “Artificial intelligence will permeate everything we do at QXO, including demand forecasting, inventory management, and e-commerce,” Jacobs said. “Ashwin is recognized as one of the brightest minds in enterprise AI. He will be instrumental in making QXO the most tech-forward company in the industry.”
Terms of the deal were not disclosed, but Aptean said the move will add new capabilities to its warehouse management and supply chain management offerings for manufacturers, wholesalers, distributors, retailers, and 3PLs. Aptean currently provides enterprise resource planning (ERP), transportation management systems (TMS), and product lifecycle management (PLM) platforms.
Founded in 1980 and headquartered in Durham, U.K., Indigo Software provides software designed for mid-market organizations, giving users real-time visibility and management from the initial receipt of stock all the way through to final dispatch of the finished product. That enables organizations to optimize an array of warehouse operations including receiving, storage, picking, packing, and shipping, the firm says.
Specific sectors served by Indigo Software include the food and beverage, fashion and apparel, fast moving consumer goods, automotive, manufacturing, 3PL, chemicals, and wholesale / distribution verticals.
Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.
First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).
Second, they use them often, with 61% of American shoppers buying online at least once a week. Among the most popular items are online clothing and footwear (63%), followed by consumer electronics (33%) and health supplements (30%).
Third, delivery is a crucial aspect of making the sale. Fully 94% of U.S. shoppers say delivery options influence where they shop online, and 45% of consumers abandon their baskets if their preferred delivery option is not offered.
That finding meshes with another report released this week, as a white paper from FedEx Corp. and Morning Consult said that 75% of consumers prioritize free shipping over fast shipping. Over half of those surveyed (57%) prioritize free shipping when making an online purchase, even more than finding the best prices (54%). In fact, 81% of shoppers are willing to increase their spending to meet a retailer’s free shipping threshold, FedEx said.
In additional findings from DHL, the Weston, Florida-based company found:
43% of Americans have an online shopping subscription, with pet food subscriptions being particularly popular (44% compared to 25% globally). Social Media Influence:
61% of shoppers use social media for shopping inspiration, and 26% have made a purchase directly on a social platform.
37% of Americans buy from online retailers in other countries, with 70% doing so at least once a month. Of the 49% of Americans who buy from abroad, most shop from China (64%), followed by the U.K. (29%), France (23%), Canada (15%), and Germany (13%).
While 58% of shoppers say sustainability is important, they are not necessarily willing to pay more for sustainable delivery options.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."