December 1, 2008
Column | fastlane

My annual letter to Santa Claus

My wish list for this year is a lengthy one. But I know you don't have much time to read, so I'm going to limit it to six requests.

By Clifford F. Lynch

Dear Santa,

As you may recall, last year I requested three things—and for a while, it appeared that you had come through on one of them. I had asked for $60 to $70 per barrel oil, and in October of this year, we saw the price of crude fall to $70. What I had not expected, however, was that the entire economy would come crashing down with it. I guess I should have been a little more specific in my request.

Also, it appears that someone in your workshop is mathematically challenged. Although the price of oil has dropped 14.9 percent since I made my request last year, diesel fuel has risen 16 percent during the same period. Please tell whichever elf handles pricing that, according to the Department of Energy, crude oil accounts for 64 percent of the retail price of diesel fuel. If that is true (would the government lie to us?), the price of diesel should have come down 9.5 percent.

My wish list for this year is a lengthy one. But I know you don't have much time to read, so I'm going to limit it to six requests. I hope you can deliver on at least some of them. So ... here goes:

1. A new name for 3PLs. I'm still hoping we can banish the term "3PL" (third-party logistics provider) from the supply chain vocabulary. Logistics outsourcing is about subcontracting logistics activities to firms that are equipped to provide the services. Besides being numerically inaccurate (sometimes those "third" parties are really "fourth" parties, logistics providers that coordinate the services of other subcontractors), the concepts of third and fourth parties only serve to cloud the relationships. Let's just call them what they are: logistics service providers, or LSPs. The term is clear, yet broad enough to cover any type of logistics function.

2. Fuel price relief. Right now, fuel prices are down, but I've noticed that with each cycle of rising and falling prices, prices drop back to a higher floor. Please get some of your best elves to work on developing alternative energy sources. That is the only real solution.

3. A new air traffic control system. As a sleigh driver yourself, you are undoubtedly aware of the deficiencies in the nation's antiquated flight control system. In fact, I'm surprised you haven't had a reindeer work stoppage. Flights are rarely on time, and according to the Wall Street Journal, delays cost the airlines $8.1 billion in 2007—not to mention the safety and passenger inconvenience considerations. Wait until you get a DC-10 up the tail pipe of that sleigh; then maybe you'll listen to me.

4. Access for Mexican truckers. Given our president-elect's rather negative views on NAFTA, I'm afraid we may never see Mexican truckers traveling freely on U.S. highways. I hope you will keep trying to persuade Congress to honor the agreement their fellow Democrats signed in 1993. Mexico is our third-largest trading partner. Let's show a little respect!

5. Respectful treatment of carriers. As the economy continues to deteriorate, we almost certainly will have overcapacity in transportation services. Please remind the shippers they will get ashes and switches instead of toys if they treat the carriers poorly.

6. Friends in high places. I don't know whether you're a Republican or a Democrat, but we are about to have a president and a Congress from the same party. Hopefully, we will get a secretary of transportation with the knowledge, experience, and courage to do what's right for the transportation system and infrastructure, and a Congress willing to support him or her. Give Mr. Obama a call. He has two young daughters and needs toys. Maybe you can work out a deal.

Wishing a very Merry Christmas to you and the family,

Cliff Lynch

P.S. Can you see Alaska from there?

About the Author

Clifford F. Lynch
Columnist
Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider of logistics management advisory services, and author of Logistics Outsourcing – A Management Guide and co-author of The Role of Transportation in the Supply Chain. He can be reached at cliff@cflynch.com.

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