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.
Unionized workers at less-than-truckload (LTL) carrier ABF Freight System Inc. late last night
ratified a five-year national collective bargaining agreement by a narrow 52-percent margin, according
to the Teamsters union, which represents ABF workers, and the company.
The agreement takes both sides a giant step closer to ending an often tense, eight-month contract fight
requiring three separate one-month extensions to the current agreement, which had originally expired March 31.
Sandwiched between the talks was the surprising revelation that CEOs of ABF and arch-rival YRC Worldwide Inc.
had met in late March to discuss a possible YRC purchase of ABF's parent, Arkansas Best Corp. Arkansas Best
rebuffed YRC's advances, and it seems unlikely at this time that any transaction will take shape.
The ABF rank and file also ratified 21 of the 27 local or regional contract addenda, known in labor lingo
as supplements, while rejecting six others. The national compact cannot be implemented until all 27 supplements
have been renegotiated and ratified by the affected members.
The outstanding supplements cover various local work-rule and technical items, and don't affect the
major economic issues covered by the master agreement, ABF said.
About 80 percent of the approximately 7,500 union members cast ballots.
TERMS OF THE DEAL
The tentative compact calls for an immediate 7-percent wage reduction,
which would be recouped in increments over the life of the contract. For the first time,
ABF can subcontract out roadwork, at least up to the equivalent of 6 percent of its total miles. The agreement
affords the company flexibility on work rules by expanding functions that could be handled across job classifications.
It also eliminates one week of workers' vacation.
In return, all current union health, welfare, and pension benefits will be maintained. Workers would get a 1-percent bonus
if ABF's operating ratio—the ratio of expenses to revenues—fell between 95.1 and 96. They would get a 2-percent bonus if the
ratio fell between 93.1 and 95, and a 3-percent bonus if it dropped below 93. ABF's first-quarter revenues totaled more than
$407 million, while its expenses were nearly $429 million. That translated into an operating ratio of more than 100.
Labor sources have said the agreement freezes ABF's pension contributions to funds representing workers in the central and
western U.S. Kathy Fieweger, a company spokeswoman, declined comment. A Teamster spokesman was unavailable for comment at press
time.
Judy R. McReynolds, Arkansas Best's president and CEO, said the contract would result in a "more efficient, profitable ABF"
that will work alongside Arkansas Best's other businesses. ABF accounts for about 80 percent of the parent's annual revenue.
"Once ratified, the national contract will protect our members' health, welfare, and pension benefits and will also give the
company the ability to compete in a very tough trucking environment, which is good for ABF and the long-term job security of our
members," said Gordon Sweeton, co-chair of the National ABF Negotiating Committee, in a separate statement.
TOUGH TALK ON WAGES
Arkansas Best and ABF executives have been very vocal about the need to drive down labor expenses through a new contract.
ABF has the highest labor costs in the LTL sector, and management said its workers would still be the best paid after the
agreement takes effect.
It is widely believed that ABF has been unable to bid on new business or has been forced to shed existing business because it
cannot overcome its labor cost disadvantage. Most of the LTL industry is nonunion, and ABF's costs are significantly higher than
those of its nonunion rivals.
The company has played public hardball over the issue. In December, it warned of "extensive changes" to its network, which
could include the shuttering of terminals and distribution centers, if it couldn't reduce labor costs and increase flexibility
through a new labor agreement. It also used the specter of YRC buy-out talks as leverage, saying in an e-mail communiqué
earlier this year that failure to ratify an agreement could weaken ABF and make it easier for YRC to consummate its buy-out plans.
In the e-mail, executives told union workers that "if you vote yes and ratify the agreement... then ABF can continue on with
our own plan to improve profitability, take back market share, [and] grow and protect your jobs and retirement benefits." By
contrast, a contract rejection means the "likelihood that YRC would be able to consummate a deal grows higher," the document
said. The date of the communiqué was unknown.
A freeze on pension contributions in two key regions could also help narrow the pension cost gap between ABF and YRC, one of
its chief union rivals. ABF's pension contributions have risen 8 percent a year, on a compounded basis, since its last contract
in 2008. Meanwhile, YRC was allowed by the Teamsters to suspend pension payments from the end of 2009 through mid-2011, and
resume contributions at about one-fourth the rate that was in place prior to the suspension. YRC is not expected to resume
full payments until 2015, at the earliest.
The pension expense today accounts for as much as two-thirds of the $11 to $12 an hour cost gap, per employee, between the
two truckers, according to Ken Paff, national organizer for dissident group Teamsters for a Democratic Union (TDU).
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.