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.
Shell Oil Co. and TravelCenters of America LLC (TA) said today they
have signed
a tentative agreement to build and operate liquefied natural gas (LNG) fueling lanes for heavy-duty rigs at about 100 of
TA's 238 nationwide fueling centers.
The proposed agreement, if finalized, would represent another step forward in establishing the necessary infrastructure
to make the economical energy source accessible to the nation's interstate motor carrier fleet. The biggest obstacle to expanded
trucking industry use of natural gas is the absence of a national refueling network that allows drivers operating 300 miles or more
easy access to natural gas lanes to fill their rigs.
The joint agreement, which takes the form of a "memorandum of understanding," calls for Houston-based Shell to build at
least 200 LNG fueling lanes at the 100 TA locations. Westlake, Ohio-based TA will operate the lanes.
Shell and TA will jointly choose the locations, the companies said. The first location is expected to be operational
in 2013, the companies said.
BUILDING A NETWORK
The announcement is the second breakthrough within the past two years in building out so-called
natural gas highways to support gas-powered rigs. In October 2010, Clean Energy Fuels, a Seal Beach, Calif.-based
natural gas supplier, signed an exclusive agreement with Pilot Flying J, the nation's largest truck-fueling operator
in the country to build and operate natural gas facilities at Knoxville, Tenn.-based Pilot Flying J Centers.
Since that agreement, the companies have completed work at 20 stations, and plan to have 50 more stations operational by year's end.
It is expected that 80 additional facilities will come on line in 2013, according to the companies.
Natural gas supplies in the U.S. remain plentiful due to a mild North American winter that depressed energy demand, and,
more significantly for the long term, an increase in domestic exploration and development that has led to an abundance of gas inventories.
As of June 4, the average cost of a gallon of diesel fuel stood at $3.84, according to the Department of Energy's Energy
Information Administration. The cost of a gallon of LNG is currently about $2.92 a gallon, according to prices quoted on the
Clean Energy network. The cost of compressed natural gas (CNG) is estimated at $2.30 a gallon, Clean Energy said.
Natural gas prices traded yesterday at $2.42 per million British Thermal Units, (or BTUs), well above recent lows of under $2
per million BTUs, but still low by historical standards.
Although truck engines can run on both, LNG is considered the better fuel for longer hauls because, unlike CNG, it
doesn't add weight that must be carried along with the goods.
As a result, CNG is better suited for local-use vehicles like buses and garbage trucks, both vehicles that operate over
shorter hauls.
About 300 million gallons of natural gas is consumed each year by various forms of livery, according to
data from Clean Energy. By contrast, 35 billion gallons of diesel are sold and consumed annually. The wide
disparity in the numbers indicates a sizable market for conversion to natural gas as a truck power source, advocates say.
A SIGNIFICANT ANNOUNCEMENT?
Glen P. Kedzie, a vice president at the American Trucking Associations, called the Shell-TA announcement an
"extremely significant" step forward in reinforcing the notion that natural gas can stand on its own as an
alternative to diesel as a truck fuel. "We're seeing the stuff born right before our eyes," he said.
Kedzie said, however, that transactions such as this may convince Congress that enough private sector capital exists to
support natural gas investments and that there is no need for government subsidies to incent con version efforts.
James N. Harger, chief marketing officer for Clean Energy, downplayed the announcement as little more than a proposed agreement
that could be revised, or even never see the light of the day.
Still, Harger acknowledged that the proposed agreement is "good for our business because it confirms there is a growing market" for
natural gas.
It’s getting a little easier to find warehouse space in the U.S., as the frantic construction pace of recent years declined to pre-pandemic levels in the fourth quarter of 2024, in line with rising vacancies, according to a report from real estate firm Colliers.
Those trends played out as the gap between new building supply and tenants’ demand narrowed during 2024, the firm said in its “U.S. Industrial Market Outlook Report / Q4 2024.” By the numbers, developers delivered 400 million square feet for the year, 34% below the record 607 million square feet completed in 2023. And net absorption, a key measure of demand, declined by 27%, to 168 million square feet.
Consequently, the U.S. industrial vacancy rate rose by 126 basis points, to 6.8%, as construction activity normalized at year-end to pre-pandemic levels of below 300 million square feet. With supply and demand nearing equilibrium in 2025, the vacancy rate is expected to peak at around 7% before starting to fall again.
Thanks to those market conditions, renters of warehouse space should begin to see some relief from the steep rent hikes they’re seen in recent years. According to Colliers, rent growth decelerated in 2024 after nine consecutive quarters of year-over-year increases surpassing 10%. Average warehouse and distribution rents rose by 5% to $10.12/SF triple net, and rents in some markets actually declined following a period of unprecedented growth when increases often exceeded 25% year-over-year. As the market adjusts, rents are projected to stabilize in 2025, rising between 2% and 5%, in line with historical averages.
In 2024, there were 125 new occupancies of 500,000 square feet or more, led by third-party logistics (3PL) providers, followed by manufacturing companies. Demand peaked in the fourth quarter at 53 million square feet, while the first quarter had the lowest activity at 28 million square feet — the lowest quarterly tally since 2012.
In its economic outlook for the future, Colliers said the U.S. economy remains strong by most measures; with low unemployment, consumer spending surpassing expectations, positive GDP growth, and signs of improvement in manufacturing. However businesses still face challenges including persistent inflation, the lowest hiring rate since 2010, and uncertainties surrounding tariffs, migration, and policies introduced by the new Trump Administration.
Both shippers and carriers feel growing urgency for the logistics industry to agree on a common standard for key performance indicators (KPIs), as the sector’s benchmarks have continued to evolve since the COVID-19 pandemic, according to research from freight brokerage RXO.
The feeling is nearly universal, with 87% of shippers and 90% of carriers agreeing that there should be set KPI industry standards, up from 78% and 74% respectively in 2022, according to results from “The Logistics Professional’s Guide to KPIs,” an RXO research study conducted in collaboration with third-party research firm Qualtrics.
"Managing supply chain data is incredibly important, but it’s not easy. What technology to use, which metrics to track, where to set benchmarks, how to leverage data to drive action – modern logistics professionals grapple with all these challenges,” Ben Steffes, VP of Solutions & Strategy at RXO, said in a release.
Additional results from the survey showed that shippers are more data-driven than they were in the past; 86% of shippers reference their logistics KPIs at least weekly (up from 79% in 2022), and 45% of shippers reference them daily (up from 32% in 2022).
Despite that sharpened focus, performance benchmarks have become slightly more lenient, the survey showed. Industry performance standards for core transportation KPIs—such as on-time performance, payables, and tender acceptance—are generally consistent with 2022, but the underlying data shows a tendency to be a bit more forgiving, RXO said.
One solution is to be a shipper-of-choice for your chosen carriers. That strategy can enable better rates and more capacity, as RXO found 95% of carriers said inefficient shipping practices impact the rates they give to shippers, and 99% of carriers take a shipper’s KPI expectations into account before agreeing to move a shipment.
“KPIs are essential for effective supply chain management and continuous improvement, and they’re always evolving,” Steffes said. “Shifts in consumer demand and an influx of technology are driving this change, in combination with the dynamic and fragmented nature of the freight market. To optimize performance, businesses need consistent measurement and reporting. We released this study to help shippers and carriers benchmark their standards against how their peers approach KPIs today.”
Supply chain technology firm Manhattan Associates, which is known for its “tier one” warehouse, transportation, and labor management software products, says that CEO Eddie Capel will retire tomorrow after 25 total years at the California company, including 12 as its top executive.
Capel originally joined Manhattan in 2000, and, after serving in various operations and technology roles, became its chief operating officer (COO) in 2011 and its president and CEO in 2013.
He will continue to serve Manhattan in the role of Executive Vice-Chairman of the Board, assisting with the CEO transition and special projects. Capel will be succeeded in the corner officer by Eric Clark, who has been serving as CEO of NTT Data North America, the U.S. arm of the Japan-based tech services firm.
Texas-based NTT Data North America says its services include business and technology consulting, data and artificial intelligence, and industry solutions, as well as the development, implementation and management of applications, infrastructure, and connectivity.
Clark comes to his new role after joining NTT in 2018 and becoming CEO in 2022. Earlier in his career, he had held senior leadership positions with ServiceNow, Dell, Hewlett Packard Enterprise, Arthur Andersen Business Consulting, Ernst & Young and Bank of America.
“This is an ideal time for a CEO transition,” Capel said in a release. “Our company is in an exceptionally strong position strategically, competitively, operationally and financially. I want to thank our management team and our entire workforce, which is second to none, for their hard work and dedication to our mission of advancing global commerce through advanced technology. I look forward to working closely with Eric and continuing to contribute to our product vision, interacting with our customers and partners, and ensuring the growth and success of Manhattan Associates.”
The Japanese logistics company SG Holdings today announced its acquisition of Morrison Express, a Taipei, Taiwan-based global freight forwarding and logistics service provider specializing in semiconductor and high-tech logistics.
The deal will “significantly” expand SG’s Asian market presence and strengthen its position in specialized logistics services, the Kyoto-based company said.
According to SG, there is minimal overlap between the two firms, as Morrison Express’ strength in air freight and high-tech verticals in its freight forwarding business will be complementary with SG’s freight forwarding arm, EFL Global, which focuses on ocean freight forwarding and commercial verticals like apparel and daily sundries.
In addition, the combined entity offers an expanded geographic reach, which will support closer proximity to customers and ensure more responsive support and service delivery. SG said its customers will benefit from end-to-end supply chain solutions spanning air, ocean, rail, and road freight, complemented by tailored solutions that leverage Morrison's strong supplier and partner relationships in the technology sector.
The growth of electric vehicles (EVs) is likely to stagnate in 2025 due to headwinds created by uncertainty about the future of federal EV incentives, possible tariffs on both EV and gasoline-powered vehicles, relaxed federal emissions and mileage standards, and ongoing challenges with the public charging network, according to a report from J.D. Power.
Specifically, J.D. Power projects that total EV retail share will hold steady in 2025 at 9.1% of the market, or 1.2 million vehicles sold. Longer term, the new forecast calls for the EV market to reach 26% retail share by 2030, which is approximately half of the market share the Biden administration targeted in its climate agenda.
A major reason for that flat result will be the Trump Administration’s intention to end the $7,500 federal Clean Vehicle Tax Credit, which has played a major role in incentivizing current EV owners to purchase or lease an EV, J.D. Power says.
Even as EV manufacturers and consumers adjust to those new dynamics, the electric car market will continue to change under their feet. Whereas the early days of the EV market were defined by premium segment vehicles, that growth trend has now shifted to the mass market segment where franchise EV sales rose 58% in 2024, reaching a total of 376,000 units. That success came after mainstream franchise EV sales accounted for just 0.8% of total EV market share in 2021. In 2024, that number rose to 2.9%, as EVs from the likes of Chevrolet, Ford, Honda, Hyundai and Kia surged in popularity, the report said.
This growth in the mass market segment—along with federal and state incentives—has also helped make EVs cheaper than comparable gas-powered vehicles, J.D. Power found. On average, at the end of 2024, the average cost of a battery-electric vehicle (BEV) was $44,400, which is $1,000 less than a comparable gas-powered vehicle, inclusive of hybrids and plugin hybrids. While that balance may change if federal tax incentives are removed, the trend toward EVs being a lower cost option has correlated with increases in sales, which will be an important factor for manufacturers to consider as they confront the current marketplace.