Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
Every year, students in John Bartholdi's warehousing and distribution class at Georgia Tech choose a handful of remote locations around the globe and send packages off to each of them via UPS, FedEx, and DHL. The exercise has become known as The Great Package Race. Its objective is to see which carrier reaches the remote and sometimes dangerous locations first.
Last year, the students selected Apia, the only city on the island of Upulu (a part of Samoa); Florianopolis, an island off the southern coast of Brazil; Harare, the capital of Zimbabwe; Tikrit, the birthplace of Saddam Hussein in Iraq; and Yangon (formerly Rangoon), until recently the capital of Burma (or Myanmar, as its military rulers would have it).
Bartholdi, who is the research director for Georgia Tech's Supply Chain and Logistics Institute, is careful to note that The Great Package Race is just a way to get students interested in the challenges of global shipping and should not be viewed as a valid comparison of the carriers' performance. But the exercise does serve to illustrate the reach of the three major express carriers.
As the Georgia Tech students learn, FedEx, UPS, and DHL can indeed deliver to addresses almost anywhere in the world. But that's not all they do: As they have extended their physical reach, they have also expanded into the types of services traditionally offered by freight forwarders and customs brokers.
By adding brokerage, forwarding, and other information-related services to their lineups, the Big Three express carriers can offer something approaching a one-stop shopping experience for international parcel shipments. And because they have expanded the scope of their services while simplifying import and export procedures for their customers, they've opened the door to global trade for a growing number of companies—particularly small and mid-sized players that may previously have found international trade daunting.
Navigating the global marketplace
Trimble Navigation Ltd. is one of the small and medium-sized enterprises that have benefited from the parcel carriers' comprehensive international services. The California-based company provides positioning technologies for the agriculture, engineering and construction, transportation, and wireless communications industries. It has offices in 18 countries, manufacturing facilities in Asia, and customers around the globe.
Trimble uses all of the major express service providers to import and export parcels, many of which are destined for—or departing from—the shipper's Dayton, Ohio, distribution center, says Brigitte Smith, Trimble's manager of transportation and logistics. Smith demands speed and a high degree of reliability—critical factors for a company that promises turnaround times of 24 to 48 hours and must provide warranty replacements and service for thousands of products.
The high-tech company relies on its parcel carriers not just to provide transportation but also to help it manage the complexities of international shipping. While it's important for any importer or exporter to be familiar with the regulations of the countries it operates in, Smith says, carriers can and should be able to provide additional expertise in areas like commodity classifications. She also expects them to provide a comprehensive customs service, including automated clearance, reporting, and management of drawback claims.
Along with using their transportation services, Smith also benefits from using the shipping software that the express carriers provide. She cites DHL's EasyShip program as an example of the type of software tool she has come to rely on. EasyShip offers automated document preparation and processing, shipment management tools, shipment tracking, and database management and maintenance for international traders.
Smith especially likes the fact that express carriers are so versatile nowadays. In the past, Trimble sometimes had to use four or five different service providers to handle various parcel shipping activities, but that's no longer the case. "It is nice to have a carrier that has the flexibility to provide services without branching out to a forwarder," she says.
Window on the world
Trimble is just one of thousands of small and medium-sized companies that are now taking advantage of express carriers' international services. In fact, says Carl Asmus, vice president of international marketing for FedEx Services, small and mid-sized companies represent the fastest-growing segment of the international parcel shipping market. "In the past, they have not had the resources to participate in international sourcing or selling," he explains. "[But now] they have to do it in order to survive. They have to compete with companies that can source around the world or have markets around the world."
For many of them, parcel carriers can provide the necessary resources. Henk Vlietstra, vice president of international services for DHL Express, says that by having offices around the world staffed with employees who understand import and export rules, parcel carriers can extend the reach of shippers that don't have their own international facilities. "They effectively have the capability to do international sourcing," he says.
In some cases, carriers are not only enabling smaller companies to build an international supply chain but are also actively encouraging it through education. FedEx, for instance, began a program in Latin America and the Caribbean in 2004 that offers seminars on exporting to small and mid-sized companies in Mexico, Argentina, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, and Puerto Rico.
The international trade software that parcel carriers provide to their customers allows even small shippers to track their goods and ensure that those shipments comply with diverse and perpetually changing regulatory and security regimes. By providing a window on the world, these software tools encourage companies with limited international trade experience to venture across borders.
UPS, for example, developed its TradeAbility software package to help those shippers overcome many of the obstacles to international trade, says Ross McCullough, vice president of global marketing. The software, which helps international shippers generate cost estimates for duties, taxes, and transportation and locate compliance information for 34 countries, can take some of the worry out of exporting and importing for shippers that may not even know where to start. McCullough notes that UPS's WorldShip software, which provides direct Internet connections between shippers' own databases and UPS's air and ground information systems, is installed in some 550,000 locations around the world.
FedEx has focused on developing technology that improves the speed and reliability of its international express services, says Asmus. Among the tools it makes available to customers is FedEx InSight, a Web-based program that provides visibility into inbound, outbound, and third-party shipments, allowing shippers to find out about customs-clearance delays while it's still early enough to take corrective action. At the same time, the carrier has been promoting its Internet-based FedEx Global Trade Manager service as a tool to guide customers who are new to international trade through the international shipping process. The program includes import and export documents from more than 200 countries, assists in landed-cost calculations, and conducts denied-party screening for exports.
DHL, too, offers international shipping tools for customers of all sizes. "We can do automated shipment preparation for everyone from the mom-and-pop shipper to operations that ship up to 7,000 parcels per day," says Vlietstra. In addition to the EasyShip software that Trimble uses, the carrier offers DHL Import Express Online. The program helps importers prepare import shipments and manage the details from pickup to delivery.
Keep walking the walk
Demand for international services almost certainly will continue to grow as more shippers take the plunge into international trade. The express carriers are responding by expanding their physical and technical infrastructure to give their customers what they need, wherever they need it.
These days, where they need it is likely to be China or India. Even the smallest of international traders are now venturing into those markets. But bureaucracy is deeply entrenched in China and India, and it can be challenging to stay abreast of their constantly changing (and sometimes inconsistent) regulatory requirements. In those cases, smaller importers and exporters may end up relying more heavily than ever on their parcel carriers to help them navigate the trade landscape.
UPS, FedEx, and DHL will be ready. UPS, for instance, has allied with AFL, an express carrier in India that will pick up international shipments on its behalf. Big Brown also expects to open a new international air hub at Pudong International Airport in Shanghai later this year.
FedEx Express will offer FedEx International Economy, a new day-definite, customs-cleared, door-to-door service in 10 Asia-Pacific markets. Last year, FedEx acquired express businesses in China and India, and by the end of 2008, it expects to complete a new air hub at Guangzhou's Baiyun International Airport in South China.
DHL, meanwhile, has expanded its lift capacity between the United States and Asia through a 20-year agreement with Polar Air Cargo Worldwide. And in May 2007, it consolidated its various investments in Indian logistics, freight forwarding, and customs brokerage into a single joint venture.
Regardless of where in the world they do business, international shippers of all sizes are likely to demand much from their carriers. Smith of Trimble Navigation certainly does. "It is a very competitive world, and we have to do what we can to ensure that our customers will come back to us," she says. "Our carriers have to talk the talk and walk the walk."
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.