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.
YRC Freight, the long-haul unit of less-than-truckload carrier YRC Worldwide Inc., on March 11
unveiled a long-awaited network restructuring that seeks to close three breakbulk terminals and
consolidate 29 smaller, "end-of-line" terminals used as freight pickup and final delivery points.
However, it may be some time before the plan is implemented.
The Overland Park, Kan.-based carrier, which employs between 20,000 and 25,000 members of the Teamsters
union, initially requested meetings on March 20 with leaders of union locals to discuss the proposed changes.
However, the dissident group Teamsters for a Democratic Union (TDU) said today that the international
leadership in Washington told all locals not to schedule any meetings with YRC through the end of April
because there are "substantive and procedure issues" with the proposal.
YRC asked for the March 20 meetings in a Feb. 11 letter sent to Teamsters General President James P.
Hoffa and other members of the union hierarchy.
Under the National Master Freight Agreement, the compact that currently governs labor relations
between the Teamsters and what's left of the unionized trucking business, a company has the right to
implement a "change of operations." Management must meet with the union to discuss the proposal, and
labor has substantial input in how the change is executed. However, the Teamsters don't have much
control over the company's overall strategy.
The proposed restructuring would eliminate breakbulk terminals in Cincinnati, St. Louis, and Memphis.
It would also consolidate end-of-line terminals in San Jose, Calif.; Youngstown and Mansfield, Ohio; and
Daytona Beach, Fla., among other cities, into YRC's terminal network. Ironically, on that list is Fort Smith,
Ark., home of YRC's archrival, ABF Freight System Inc.
YRC Freight plans to open a small "relay" driver facility in Staunton, Va., staffed by 26 drivers. Relay
drivers take over a load and drive between eight and 10 hours before handing that load to another driver. After
a required break, the initial driver would then take over the next truck heading back to his or her hometown.
The restructuring proposal would lead to the loss of 760 dock, shop, office, and cartage jobs, and an additional
452 over-the-road driver positions at the various affected terminal locations. At the same time, 343 over-the-road
driver jobs would be created, along with 639 cartage positions. All told, the restructuring would result in a net
loss of 230 jobs.
In the Feb. 11 letter, YRC Freight said the proposal is designed to improve line-haul density, reduce unproductive
"empty" miles, cut fixed administrative costs such as building and leasing expenses, and make the company's service more
cost-effective.
FEWER "FINGERPRINTS"
A breakbulk facility acts as an intermediate sorting point for interregional freight. Freight
from the various end-of-line terminals is sent to a regional breakbulk terminal to be combined
into trailers, which the carrier then routes to end-of-line terminals. For example, freight
destined for Texas from a terminal in Binghamton, N.Y., might go to a breakbulk terminal in
Pittsburgh, where it would be combined with Texas-bound freight from other Eastern cities.
Charles W. Clowdis Jr., a longtime trucking executive and now managing director, transportation advisory
services for the consulting firm IHS Global Insight, said the proposal should reduce the frequency of freight
"touches" between origin and destination, a problem that plagued Yellow Transportation Inc., the LTL carrier
whose 2003 merger with Roadway Express Inc. created what is now known as YRC Freight.
"Every time a carrier handles, or 'fingerprints,' a shipment, it adds labor costs," Clowdis said. In addition,
fewer handoffs should, in theory, result in smaller loss and damage claims, he added.
"The basic premise is that fewer handling(s) and fewer small terminal investments translate into more profit," Clowdis said.
Freight-claims ratios, which historically were a big problem at YRC Freight, have declined for seven straight months on a
year-over-year basis through the end of January, Jeff Rogers, YRC Freight's president, said in an interview with DC Velocity
last month. Without disclosing specifics, Rogers said the unit's freight-claims ratio is at its lowest level in years.
The network proposal is Rogers' latest move to wring efficiencies and profitability out of YRC Freight. That unit still
accounts for the bulk of the parent's revenue, and its troubles nearly drove the entire company into bankruptcy at the
end of 2009. Rogers was named head of YRC Freight in September 2011 after three years piloting Holland, a regional carrier
and YRC subsidiary.
YRC Freight posted fourth-quarter operating income of $21.1 million, its second consecutive quarter of operating gains and
a nearly $48 million improvement over the 2011 period. Its fourth-quarter operating ratio—the ratio of revenues to expenses
and a key gauge of a carrier's efficiency—improved 600 basis points year-over-year to 97.3, the unit's best fourth-quarter
operating ratio in six years. The ratio meant YRC Freight generated $97.30 in expenses in the quarter for every $100 in revenues.
In a sign that YRC Freight has made progress in shedding unprofitable freight, the unit's revenue per hundredweight—a
central measure of tonnage profitability—rose 3.2 percent both in the fourth quarter and for the entire year, even though tonnage
and shipment count were down in the same periods.
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
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.
Two European companies are among the most recent firms to put autonomous last-mile delivery to the test with a project in Bern, Switzerland, that debuted this month.
Swiss transportation and logistics company Planzer has teamed up with fellow Swiss firm Loxo, which develops autonomous driving software solutions, for a two-year pilot project in which a Loxo-equipped, Planzer parcel delivery van will handle last-mile logistics in Bern’s city center.
The project coincides with Swiss regulations on autonomous driving that are expected to take effect next spring.
Referred to as “Planzer–Dynamic Micro-Hub w LOXO,” the project aims to address both sustainability issues and traffic congestion in urban areas.
The delivery vehicle, a Volkswagen ID. Buzz battery-electric minivan, will feature Loxo’s Level 4 Digital Driver navigation software, a highly automated solution that allows driverless operation. The van was retrofitted to include space for two swap boxes for parcel storage.
During the two-year pilot phase, Loxo’s Digital Driver will navigate a commercial vehicle several times a day from Planzer’s railway center to various logistics points in Bern's city center. There, the parcels will be reloaded onto small electric vehicles and delivered to end customers by Planzer’s parcel delivery staff.
Following the completion of the pilot phase, Planzer and Loxo will build on the program for rollout in other Swiss cities, the companies said.
The partners said the project addresses the increasing requirements of urban supply chains and aims to ensure the “scalability of their disruptive solution.” With largely emission-free delivery, it contributes to greater levels of sustainability for the city as a living space, they also said.
“The uniqueness of this project lies in the fact that it will have a direct impact on society,” Planzer’s CEO and Chairman Nils Planzer said in a statement announcing the project. “We didn't just want to integrate automated technology into existing systems, we wanted to develop a completely new concept and a new business model.”
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.