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.
Airfreight users, who had been dealing most of the year with a tightening market for capacity, are now also coping with
what could be a late-peak season crush for airfreight services as disruptions at West Coast ports are pushing some businesses
to shift their goods from ocean to air.
Tensions between the International Longshoremen & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) over
negotiations for a new collective bargaining agreement have been increasing over the past few weeks, and according to PMA, led
to ILWU-orchestrated slowdowns at the ports of Los Angeles, Long Beach, Seattle, and Tacoma. On Tuesday, the slowdowns spread
to the Port of Oakland, where dockworkers temporarily shut down a terminal operated by SSA Marine, a Seattle-based stevedoring,
marine terminal operations, and intermodal management firm. Mike Zampa, a spokesman for the Port of Oakland, said late yesterday
that workers have returned to their jobs and normal operations have resumed.
ILWU has declined comment on the PMA allegations of slowdowns, and both sides have spent most of the month hurling insults at
one another. The 13,600 ILWU members have been working without a contract since the prior six-year pact expired on July 1, and
until recently, the 29 West Coast ports covered under the agreement have operated normally.
The dispute has forced some businesses to shift goods that would normally move by ocean to higher-priced air to ensure they
enter U.S. commerce before the holiday shopping season begins. Ann Inc. (formerly Ann Taylor), a women's specialty apparel
retailer, will be hit by a double-whammy when it reports its fiscal third-quarter results later this month. The company said
in a mid-quarter update Nov. 6 that sales in the first half of the period were hurt by shipment delays due to labor-related
uncertainty at the ports. A shift to air freight mitigated the delivery issues, but at a cost of $8 million in air shipping
expenses, it said. Airfreight users, even if they've negotiated capacity agreements with airlines, are still subject to
peak-season surcharges if they want rush freight moved.
For airfreight forwarders, the turmoil at the ports throws another log on what has been a yearlong fire revolving around a
general tightening of international air capacity, especially in the eastbound trans-Pacific market. Carrier rates have been
driven up for much of the year by a pickup in demand, ongoing concerns over West Coast port congestion separate from the labor
issue, the simultaneous launches of two Apple Inc. iPhones, and a secular decline in the production and delivery of all-cargo
aircraft. "There are [marketplace] expectations that will compound the situation in the coming days, but we have seen the
airlines with large backlogs before the port slowdown hit," said Rich Zablocki, vice president, North American air freight, for
Dutch forwarder and third-party logistics provider Ceva Logistics.
In early October, DHL Global Forwarding, the world's largest air freight forwarder, launched a capacity management program
designed to secure all-cargo lift on key trade lanes from Asia to North America and into Latin America, as well as on certain
Asia-to-Europe routes. The forwarder is negotiating so-called blocked-space agreements with airlines that will guarantee
capacity for a certain amount of time in return for a specified amount of freight. Rates are generally kept constant for the
duration of the agreements.
Mathieu Floreani, CEO Americas for DHL Global Forwarding, said the move is in response to mounting customer and company
concerns over the availability of all-cargo equipment in the years ahead. The capacity situation is dire on certain trade
lanes, though it doesn't affect the global market, Floreani said in an October interview. Many of his customers, even those
that don't require main-deck lift and can manage with using below-deck aircraft space, have expressed worries over all-cargo
space and the rates they'll be forced to pay for it, he said.
Floreani declined comment on the amount of space the forwarder is attempting to procure. He said an agreement's duration would
depend on the trade lane involved. However, he expects most compacts to extend only beyond the end of 2015.
Demand for air freighters, especially newbuilds, is likely to diminish over the next two decades as a shift to regionalized
or local sourcing and production, a migration to lower-cost seafreight on certain lanes, and an abundance of passenger aircraft
with lower-holds priced as an inexpensive byproduct of passenger services make costly freighter purchases less appealing. In its
biennial global air cargo forecast released last month, Boeing Co. projects 840 new freighters to be delivered worldwide through
2033. In its prior report two years ago, the aircraft maker forecast 935 new freighters to be delivered from 2012 through 2031.
Boeing also scaled back its forecast for total freighter deliveries, which include aircraft converted from passenger
configuration. In this year's forecast, it forecast deliveries of 2,170 freighters through 2033. Two years ago, it projected
2,754 freighter deliveries through 2031.
Global airfreight activity in September grew by 5.2 percent from the 2013 period, the International Air Transport Association
(IATA), the global airline trade group, said earlier this month. Most world markets showed strong growth, IATA said. The exceptions
were Europe, which reported a year-over-year decline, and Latin America, which posted flat results.
In its 2014 forecast, Boeing projected a 4.7-percent annualized growth rate worldwide through 2033, which would result in a
doubling of global cargo activity by then.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs 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.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.