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.
Con-way Freight, the regional less-than-truckload (LTL) unit of trucking and logistics giant Con-way Inc.,
said today that it will raise wages of its approximately 14,500 drivers effective Jan. 4, becoming
the first big, mostly nonunion LTL trucker to raise driver pay.
In a statement issued earlier today, Con-way Freight declined to quantify the extent of the increases but
said they would be aligned with the pay rates deemed competitive in a driver's home region. Con-way Freight
will also establish a schedule under which all of its drivers will reach the top wage scale three years from
the date of hire. Before, the tenure required to achieve top pay varied.
Analysts said the wage and accompanying benefit increases will cost the parent company about $60 million,
expenses that would be booked in 2015. The amount is about double the increases taken in recent years, analysts said.
The changes should not affect the company's second-half operating results, according to analysts. Through the first
half of 2014, Con-way Freight accounted for about 60 percent of the parent's $2.86 billion revenue and for a much
higher proportion of its $135.7 million in operating income.
Traders and investors have been in selling mode all day, taking Con-way shares down more than 4.6 percent near
the close of trading on the New York Stock Exchange.
In the statement, Con-way Inc. President and CEO Douglas W. Stotlar said both Con-way Freight and the parent's
truckload unit, Con-way Truckload, are "facing the most pronounced driver shortage we've ever seen." This is one of
the first public acknowledgments from a top trucking executive that the dearth of qualified drivers, which had long
been thought of as confined to the truckload sector, has bled into the smaller LTL category, where wages generally
are higher and drivers are home more frequently due to their relatively shorter routes.
Con-way has already raised the pay of drivers working at its truckload unit. That package, which included a boost
in per-mile pay and layover pay as well as loyalty and productivity incentives, increased compensation for experienced
new hires from 37 cents to 42.5 cents per mile. The increase in mileage pay also applied to Con-way Truckload's independent
contractors. Con-way Truckload employs about 2,300 drivers. The adjustments took effect Sept. 7.
Today's announcement comes two weeks after a little more than 100 employees at Con-way Freight's service center in Laredo,
Texas, voted for union representation by the Teamsters, the first union shop in the company's 31-year history. In addition,
the Teamsters will hold representation elections on Oct. 23 at Con-way Freight terminals in Los Angeles, Santa Fe Springs,
and Pacoima, Calif., which comprise the unit's footprint in greater Los Angeles. The National Labor Relations Act (NLRA), the
federal law governing labor relations in the trucking industry, requires that organizing be done on a terminal-by-terminal basis.
Con-way Freight has 273 terminals across the United States.
It is illegal to offer wage increases as a way of influencing a union vote. However, with one terminal in the union fold
and three more, including stations in the country's second-largest population center, considering similar moves, it may not
be surprising that the company would take steps to keep its work force happy. "Laredo got their attention," said Benjamin J.
Hartford, analyst at the investment firm Robert W. Baird & Co.
Con-way makes no secret of its anti-union position. It expressed disappointment with the vote in Laredo, and today issued
a statement on the upcoming votes in California that said, "We continue to believe that our employees do not need union
representation and that we can best meet their needs and the needs of our customers through a direct working relationship
with our employees, without the interference of a union."
HIGHER RATES ON TAP FOR 2015
David G. Ross, analyst for Stifel, Nicolaus & Co., an investment firm, said he doesn't expect similar announcements from
other publicly traded LTL carriers. Unionized carriers YRC Worldwide Inc., ABF Freight System Inc., and UPS Freight, the LTL
unit of UPS Inc., are bound by contracts that will not change. Ross expects normal driver wage hikes from Old Dominion Freight
Line and Saia Inc., two of the better-managed LTL carriers, though he didn't specify what type of increases they would be.
The Con-way Freight increases come amid one of the best LTL operating environments in nearly a decade. A moderately rebounding
industrial economy along with improved pricing discipline that has been sustained for three or four years have helped companies
fatten their top and bottom lines. LTL carriers are also benefitting from ongoing service issues with rail intermodal service,
which is forcing traditional intermodal users to seek alternatives.
LTL rate increases are, for the most part, sticking. As perhaps a show of confidence in the sector's ability to push through
rate hikes, FedEx Freight, the LTL unit of FedEx Corp., said it would impose a 4.9 percent general rate increase on Jan. 5, about
three months earlier than normal.
Ross said that higher rates in 2015 should offset cost increases for all LTL carriers, as long as the industrial economy
remains strong and carriers stay disciplined in regard to capacity additions. Carriers should continue to benefit from improved
shipment density—a byproduct of relatively tight supply—and higher haulage rates, Ross said.
Charles W. Clowdis Jr., managing director, global trade and transportation for the consultancy IHS Economics, said carrier
wages will continue to rise as competition for drivers intensifies, particularly for local city drivers and dockworkers. A
dramatic improvement in the economy—which has yet to transpire—would make local drivers especially hot commodities, Clowdis
added.
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.