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.
The modus operandi behind Amazon.com Inc.'s quest to build a transportation and logistics colossus to support its e-commerce business may be taking shape.
Atlas Air Worldwide Holdings Inc., an air cargo carrier that arranges leases with customers and provides the plane, crew, maintenance, and insurance, said today it signed two multiyear leases with Seattle-based Amazon for 20 Boeing 767-300 freighters converted from passenger aircraft configuration. In addition, Atlas granted Amazon equity "warrants" to acquire up to 30 percent of Atlas' common shares at a fixed price of $37.50 a share over the next seven years.
Under terms of the deal, Titan Aviation, Atlas' leasing unit, will lease the aircraft to Amazon, and Atlas will operate them. The so-called dry lease operation that involves Titan, Atlas, and Amazon will run for seven years. The agreement for the crew, maintenance, and insurance services solely provided by Atlas has a 10-year duration. Operations are expected to start in the second half of the year and will build until full ramp-up, set to take place throughout 2018, Purchase, N.Y.-based Atlas said. There is potential for further expansion beyond what was announced today, Atlas said. Amazon did not post comment on its web site.
Amazon's vesting in the warrants is tied to the launch of operations of all 20 planes, as well as other conditions, Atlas said. The 767-300 freighter can carry around 115,000 pounds at a range of about 3,300 nautical miles, according to Boeing data. The aircraft type will support Amazon's one- to two-day air express-delivery service on routes that may not be reachable by truck in that transit time window.
Nearly two months ago, Amazon struck a similar arrangement with Wilmington, Ohio-based Air Transport Services Group Inc. Amazon agreed to lease 20 of the same planes for a five- to seven-year period and to acquire a 19.9-percent ownership stake in ATSG if all warrants were exercised. The exercise price was set at $9.73 a share, based on ATSG's closing price on Feb. 9, the day the deal was announced.
The Atlas and ATSG deals bind Amazon to the two carriers both operationally and financially. It also removes capacity that might have been available to other users. And if Amazon exercises the warrants, it would mean making money as an investor in those companies. Satish Jindel, founder and president of SJ Consulting Group Inc., said today he expects Amazon to structure similar transactions as it continues to build out a transportation and logistics network to support fulfillment operations and relies less on third-party providers to ship its package volumes.
There has been enormous speculation, which Amazon has neither encouraged nor sought to tamp down, that the company is morphing into a full-fledged logistics provider capable of providing transportation, freight forwarding, and contract logistics to support the movement of its own traffic as well as those of "third-party" merchants that market their wares on Amazon's site and rely on it to warehouse, fulfill, and distribute their shipments once they're ordered.
Colin Sebastian, an analyst for Robert W. Baird and Co. Inc., has written that Amazon would gain competitive advantage by managing the logistics of its core revenue-generating business and then extending the capacity as a service to other companies. Sebastian estimated the global logistics market available to Amazon to be about $400 billion. He added that given Amazon's already enormous scale, there are efficiency gains to be had from internally operating fulfillment, logistics, and delivery.
Amazon will continue to invest heavily in transport services. It spent $11.5 billion in outbound shipping in 2015, and SJ forecasts that number to rise to $16.4 billion in 2016, $22.34 billion in 2017, and $29.6 billion in 2018.
Terms of the deal were not disclosed, but Aptean said the move will add new capabilities to its warehouse management and supply chain management offerings for manufacturers, wholesalers, distributors, retailers, and 3PLs. Aptean currently provides enterprise resource planning (ERP), transportation management systems (TMS), and product lifecycle management (PLM) platforms.
Founded in 1980 and headquartered in Durham, U.K., Indigo Software provides software designed for mid-market organizations, giving users real-time visibility and management from the initial receipt of stock all the way through to final dispatch of the finished product. That enables organizations to optimize an array of warehouse operations including receiving, storage, picking, packing, and shipping, the firm says.
Specific sectors served by Indigo Software include the food and beverage, fashion and apparel, fast moving consumer goods, automotive, manufacturing, 3PL, chemicals, and wholesale / distribution verticals.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."
In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.
British carbon emissions reduction platform provider M2030 is designed to help suppliers measure, manage and reduce carbon emissions. The new partnership aims to advance decarbonization throughout Clorox's value chain through the collection of emissions data, jointly identified and defined actions for reduction and continuous upskilling.
The program, which will record key figures on energy, will be gradually rolled out to several suppliers of the company's strategic raw materials and packaging, which collectively represents more than half of Clorox's scope 3 emissions.
M2030 enables suppliers to regularly track and share their progress with other customers using the M2030 platform. Suppliers will also be able to export relevant compatible data for submission to the Carbon Disclosure Project (CDP), a global disclosure system to manage environmental data.
"As part of Clorox's efforts to foster a cleaner world, we have a responsibility to ensure our suppliers are equipped with the capabilities necessary for forging their own sustainability journeys," said Niki King, Chief Sustainability Officer at The Clorox Company. "Climate action is a complex endeavor that requires companies to engage all parts of their supply chain in order to meaningfully reduce their environmental impact."
According to New Orleans-based LongueVue, the “strategic rebranding” brings together the complementary capabilities of these three companies to form a vertically integrated flexible packaging leader with expertise in blown film production, flexographic printing, adhesive laminations, and converting.
“This unified platform enables us to provide our customers with greater flexibility and innovation across all aspects of packaging," Joe Piccione, CEO of Innotex, said in a release. "As we continue to evolve and adapt to the changing needs of the industry, we look forward to delivering exceptional solutions and service."