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.
In a victory for transportation interests who've charged that commodity speculators, not economic fundamentals, have caused the price volatility in oil markets during the past three years, the massive financial reform bill heading to President Obama's desk curtails speculation on energy pricing. The legislation, known as the Wall Street Transparency and Accountability Act, restricts the betting on the direction of energy prices to so-called commercial end-users who use sophisticated trading tools to reduce risk associated with managing their business.
The measure, which won congressional approval after passing the Senate on July 15 and which is expected to be signed into law this week, is the most sweeping overhaul of the nation's financial rules since the Great Depression. Embedded in the controversial 2,300-page bill is language that limits the role of speculation in the $615 trillion financial derivatives market.
The transport sector keyed in on a provision in the bill that allows only companies with what are being termed legitimate commercial interests to enter into derivatives transactions, or "swaps," without regulatory oversight. Many of these companies traditionally use the derivatives markets to hedge against fluctuations in energy prices that may affect their profit margins.
In a statement, the American Trucking Associations (ATA) said it "applauds Congress's decision to curb excessive commodity speculation while protecting the ability of the trucking industry to hedge its exposure to increased fuel prices. The legislation will help ensure that fuel prices are linked to the market forces of supply and demand."
The Air Transport Association, which represents the nation's major passenger and cargo airlines, also hailed passage of the bill, saying the law will ultimately reduce the risk of cost spikes associated with speculative trading and will align energy prices more closely with supply and demand fundamentals.
"The passage of the financial- and commodities-reform bill achieves all [of the group's] objectives on this issue," said James May, president of the air carriers group. "The bill is the culmination of many years of hard work by our members and is a significant win for airlines as consumers of oil."
Industry backlash over oil price fluctuations took root in 2007 as prices began skyrocketing, culminating in July 2008 with a record $147 per-barrel price for crude oil. Prices then began an equally rapid decline along with the economic downturn, plunging as low as $34 a barrel in February 2009. Today, the price of a barrel of crude is quoted on the New York Mercantile Exchange at slightly more than $76.
At the peak in July 2008, diesel fuel prices reached $4.76 a gallon, threatening the survival of many smaller trucking firms and causing anguish among truckers and shippers alike.
U.S. airlines spent $58 billion on jet fuel in 2008, nearly $20 billion more than the year before, according to Air Transport Association data. The run-up in 2008 "was not [based on] supply and demand fundamentals," said David Castelveter, the group's chief spokesman.
"Excessive speculation has caused dramatic increases in the price of crude oil, which harms end-users like America's trucking industry," Richard Moskowitz, ATA's vice president and regulatory affairs counsel, said prior to the bill's passage in the Senate. Moskowitz advised Congress not to expand the right to engage in these complex swaps to "entities that neither produce nor consume the physical commodities upon which the derivative contracts are based."
ATA is a member of the Commodity Markets Oversight Coalition (CMOC), an alliance of consumer advocates and commodity producers, marketers, and end-users that use derivatives to hedge commodity price fluctuations and to insulate their businesses and consumers from risk.
In a letter sent in early May to Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.), the coalition said that "hedge funds, investment banks, and insurance companies have begun to use commodity derivative contracts to hedge the risk of a declining dollar or rising interest rates." While these financial entities "have a legitimate interest in hedging their risk, they are not producers, distributors, or end-users of physical commodities," the coalition said.
The legislation had been reported out of the Senate Agriculture, Nutrition and Forestry Committee. The Committee's chairwoman, Sen. Blanche Lincoln (D-Ark.), had championed the language reining in the unfettered use of derivatives.
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 U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
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.