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 tentative five-year contract agreed to late last night by UPS Inc. and leaders of the Teamsters union's small-package division calls for a significant reduction in intermodal use in favor of expanding the number of two-person "sleeper team" drivers operating over the road.
Under the tentative agreement, UPS will switch "many loads" currently moved by railroads to what the union, in a communiqué last night, referred to as a significant number of "newly created" sleeper teams. UPS' sleeper teams will be paid at levels that far surpass what any teams receive elsewhere in trucking, the union said. The proposal would create 2,000 full-time Teamsters jobs, according to the union. Atlanta-based UPS has operated with over-the-road sleep teams for a number of years.
Depending on the amount of converted volume, the provision could be a blow to the nation's railroads. UPS has long been one of the largest, if not the largest, individual users of intermodal services. The company would not comment on how much traffic moves via intermodal.
Two-person sleeper teams split a fairly generous cents-per-mile rate between them, and they are considered some of the highest-paid drivers on the road today. Sleepers can make a combined wage of well into the six figures, depending on the carrier. Sleepers are in higher demand now after the implementation of the electronic logging device (ELD) mandate, which requires strict adherence to driver hours-of-service regulations. Unlike a solo driver, who must pull off the road after 11 hours of continuous driving (with a 30-minute break after 8 hours), in a team one of the drivers can take the wheel after the other exhausts his or her available hours. The supply of available two-person teams is very tight, however.
The tentative compact, which is being referred to as a "handshake" or an "agreement in principle," calls for a $4.15-per-hour wage hike over five years for full-time Teamsters workers. In addition, the agreement establishes a classification of a full-time "combination driver," who will receive $20.50 an hour as a starting wage and max out at $34.79 an hour by Aug. 1, 2022. UPS' unionized part-timers will be paid a starting rate of $13 an hour, which will escalate to $15.50 as of the 2022 date.
In its communiqué, the Teamsters did not specify the responsibilities of the new class of driver. The union said, however, that the provision will resolve membership concerns over how the contract addresses the potential need to operate on Saturdays and Sundays. The company has never delivered on Sundays. However, increasing consumer demands for seven-day-a-week deliveries of online orders have pressured the company to consider it. After 110 years, the company just began U.S. ground deliveries on Saturday in early 2017.
According to the union, the tentative contract eliminates the contentious language floated during negotiations creating a classification of "hybrid" small-package drivers, who would deliver ground packages either Tuesday through Saturday or Sunday through Thursday, and who would be paid at the lower tier of a new two-tier wage scale.
However, Ken Paff, national organizer of the dissident group Teamsters for a Democratic Union (TDU), disputes the notion that the two-tier structure has been done away with. The top rate for the combination drivers will be about $6 less than what regular drivers will make at the end of the contract, thus the new drivers' wages will also be separate and unequal, Paff said.
Last night's tentative agreement covers the 256,000 UPS employees who are members of the Teamsters' small-package unit. Contract talks to cover about 11,000 workers at the company's UPS Freight less-than-truckload (LTL) unit are still going on. The two sides will meet July 9-12 in Minneapolis to continue the LTL talks, and to finalize the local parcel supplements and riders that remain unresolved. Once the local agreements are hammered out, two-person committees at each local will review the proposed master contract. It will then be sent to the rank and file for a ratification vote.
All locals must ratify their respective supplements and riders before the master contract can take effect. The last master contract was ratified in July 2013, but didn't take effect until the following April because several locals repeatedly refused to approve their supplements. The dispute didn't end until the Washington leadership in April 2014 took the extraordinary step of imposing the national contract on all UPS members.
In early June, UPS and UPS Freight members voted to authorize the union to strike in the event that talks reached an insurmountable impasse. Although such a move is pro forma, it received widespread media attention and spurred some UPS customers to explore other delivery options in the event of service disruptions.
FedEx Corp., UPS' chief private sector rival, has said it will focus on the needs of its existing customers before entertaining requests to handle diverted freight. The company would not comment on how it would handle requests from customers that also use UPS' services. The U.S. Postal Service, which is both a competitor and partner of UPS for business-to-consumer (B2C) traffic, much of it coming from online orders, declined comment.
DHL Express, which does not operate domestic express services but serves the U.S. as part of its 220-country network, will try to accommodate businesses that use DHL and UPS, Greg Hewitt, DHL Express' U.S. CEO, said yesterday in an interview.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
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.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.