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.
Like Lazarus arisen from the dead, the one-time corpse known as YRC Worldwide Inc. was out in force at last month's NASSTRAC annual meeting in Orlando, Fla. The less-than-truckload (LTL) carrier's exhibition booth was abuzz with activity, with CEO James L. Welch smiling and glad-handing shippers and third-party logistics service providers.
About 1,100 miles away in Fort Smith, Ark., Judy R. McReynolds, CEO of Arkansas Best Corp., the parent of YRC rival ABF Freight System Inc., had other things on her mind. Her company is locked in what has become a near life-and-death struggle with the Teamsters union to reach agreement on a new contract that calls for wage and pension cuts, as well as higher health care payments for workers. Without a satisfactory deal, ABF has warned that it would have to scale back its network, shutter terminals, and, invariably, lay off workers.
That's not to say ABF wasn't a presence at NASSTRAC. In fact, for the third time in four years, the shipper group named ABF its national LTL "Carrier of the Year," a testament to ABF's long-held and mostly undisputed reputation for service excellence.
But for a publicly traded concern like ABF, awards, while certainly appreciated, pale in importance at this point to the $230 million in cumulative losses suffered since 2009. ABF says much of the problem would disappear if its workers, who are the best paid in the LTL industry, would accept modest wage cuts and benefit concessions that would still leave them with higher salaries than YRC, and certainly higher than the nonunion entities that have come to dominate LTL.
So far, it hasn't gone well. Teamster leaders representing 7,500 ABF workers were not happy with the company's late April proposal, under which employees would take a 6.5-percent across-the-board wage cut, accept reductions in ABF's pension contributions as well as caps on those contributions, and pay about $3,000 a year for family health coverage, which is more than labor is accustomed to paying. "We've put millions of dollars worth of operational relief on the table, but that apparently is not enough," said Gordon Sweeton, co-chairman of the Teamsters ABF National Negotiating Committee, in a statement April 19.
Still, both sides agreed to extend the current contract, which expired on March 31, until the end of May in order to continue talking. This marks the second consecutive monthly extension and could be the first of many.
By contrast to the situation with ABF, the Teamsters appear to be playing well with other companies in the sandbox. At press time, the union looked to be on track to clinch a new contract with UPS Inc. and its UPS Freight LTL subsidiary by the beginning of May, which would be roughly three months before both pacts expire. And Teamster leaders agreed in late April to a restructuring at YRC Freight that allows YRC's long-haul unit to close three breakbulk terminals and consolidate 29 "end-of-line" terminals used as freight pickup and final delivery points. The change is expected to save YRC Freight up to $30 million a year by improving line-haul density, cutting building and leasing expenses, and reducing freight "touches" that often prolong transit times, raise labor costs, and increase damage claims.
It should be noted that ABF and the Teamsters bring baggage to the table that other companies don't have. In 2010, ABF and Teamster leaders agreed to wage and benefit concessions to roughly match three extraordinary givebacks agreed to by YRC's Teamster workers to keep the carrier alive at the time. However, ABF's rank and file spurned the proposal.
Then in a move ABF may live to regret, it sued YRC and the Teamsters in an effort to void those agreements on grounds they were negotiated outside of the broad labor compact that covers the trucking industry. Despite several legal setbacks, ABF insists on pursuing the suit, an approach that can't sit well with the Teamster hierarchy. After all, having a three-year lawsuit hanging over one's head might not provide a strong incentive to bargain with the party that brought it.
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.