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.
Sometimes it takes a whack to the wallet to change customer behavior. Several UPS Inc. policies that go into effect June 4 appear designed to do just that.
On that date, the Atlanta-based transport and logistics giant will impose a fee for auditing bills that result in shipping charge corrections because the shipment's dimensions conflicted with those calculated by the shipper. Those shipments would be subject to higher prices based on their dimensions instead of actual weight.
Fees will be assessed if the value of corrections in an invoice week exceeds $5, UPS said in a service announcement earlier this month. The fee will be the higher of either $1 for each package subject to a shipping charge correction, or 6 percent of the total amount of shipping charge corrections during an applicable invoicing period, UPS said. It will waive the fee if an audit finds the company's calculations match the shipper's.
In addition, UPS will raise surcharges by more than 40 percent on the handling of packages that exceed the company's maximum dimensional requirements. Surcharges for handling oversized pallets will also rise by 40 percent. In both instances, the surcharges will climb to $650 from $500, UPS said.
The surcharge program, known inside the company as "Overmax," has been in place since 2000. The surcharge amount has been raised through the years to account for more outsized shipments that have been moving through UPS' small-package network due to elevated e-commerce activity. To keep such merchandise out of its network, UPS, the nation's largest transportation company, has reportedly been looking to team up with truckload carriers that will deliver heavy goods like furniture that are ordered online.
Under UPS policy, a parcel will not be accepted for standard transportation if it has any one of three characteristics: an actual weight of more than 150 pounds, length that exceeds 108 inches, or 165 inches of combined length and girth combined. Packages that violate any of those rules and are found in the UPS small-package system are subject to an "Over Maximum Limits" surcharge in addition to other applicable charges.
In its service announcement, UPS said it wants to encourage its shippers to use the company's less-than-truckload (LTL) network for these items rather than its small-package infrastructure. The company's small-package network was never designed to efficiently handle big and heavy goods, and it requires what the company called "extraordinary special handling" at high labor expense to process them. A parcel industry executive who asked for anonymity said UPS has effectively drawn a line in the sand with its shippers as to what types of shipments will move through its system without exorbitant surcharges attached to them.
The company did not publicly state the rationale behind the new audit fee. Melissa Runge, vice president of analytical solutions for Spend Management Experts, a parcel consultancy that helps high-volume UPS shippers control their shipping costs, said the fee is designed to influence shippers' behavior by hitting them in the pocketbook, as well as to compensate UPS for the cost of the audits. For example, one way for a shipper to circumvent a dispute over dimensions is to use the same packaging that clearly fits within UPS' dimensional requirements, Runge said. That might be exactly what UPS wants, she added.
However, UPS can audit any shipment it chooses, and its decision on the dimensions of each will carry the day unless the shipper wants to go through the hassle of disputing the company's findings, Runge said. In addition, thousands of UPS shipments a day push the dimensional envelope and would be subject to audits and unfavorable decisions for the shipper.
Runge estimated that about one-third of her company's clients will be affected by the various changes, and on average it will add about a six-figure equivalent to their current shipping costs.
The executive who sought anonymity said the audit fee will add insult to the injury already being meted out through higher dimensional pricing. The brunt of the pain may be borne by unsophisticated shippers who repeatedly use UPS' web site to book pickups, the executive said. "Most average shippers won't think to put the dimensions in," the executive said. "They get the sticker shock later (from the dimensional pricing); now they will get a $1 surcharge."
Jerry Hempstead, a long-time parcel executive who runs his own firm, said the changes will amount to little if anything for UPS. Regarding the volumes subject to the higher handling surcharges, Hempstead said it involves a "minuscule number of transactions. And we are talking about shipments that should never find their way into the UPS parcel network."
It is believed that Memphis-based FedEx Corp., UPS' chief rival, has yet to implement similar measures. The two companies often move in lockstep on rate and other pricing actions.
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.