There is increasing evidence that if you are not seen to be reducing the carbon footprint or greening your business, that your organization may be left out in the cold when it comes to achieving lucrative contracts, sales or projects.  

Major companies such as Dell, Pepsi, Colgate Palmolive are just some of the few that are requesting their suppliers to disclose their "Green" policy or carbon reduction program in order to be considered as an official supplier. 

For logistics companies, this should be on their agenda since they are among the organizations that are most likely to contribute to gas emissions and carbonization of the planet.  
A recent article in Logistics Today highlights the Carbon Disclosure Project Report 
Download the PDF file from our Logistics Articles page.

Where are the logistics leaders in Haiti?  The wall street journal recently reported an appalling case of failure to get the goods to the people.  Delays and distribution workers are stranded because of bureaucratic failure and the lack of logistics experts.

Now that the streets are cleared a little more and trucks can  actually pass, one would assume that the flow of goods and services would not be obstructed to this great extent any more. 

An incredible slide show on the Eagles Wing Foundation attempt to deliver goods is featured on the Wall Street Journal Site.

Read more....

For most of the business and shipping community, 2009 was just plain dismal.  World volumes and especially US/Canada depicted a 20 to 40% decrease, plunging carriers and forwarders into a "save our skins" mode. In order to keep their market share, rates plunged across all sectors but especially the north american trucking sector, where the fight was on to keep customers with lower and lower rates.

The large integrators such as DHL, Fedex and UPS managed of course but their last two quarters indicated negative growth.   It seems that if one of these companies does one thing, the others follow and this is especially true of the January 4, 2010 increase.

Their new rate guides have been published with an approximate hike of 5-6%.  Most volume importers and exporters however already have a discount from the standard tariff and this discount will most likely continue but with the across the board General Rate Increase.   Watch out for the accessorial and special handling fees as  these have also been increased and could in fact impact your bottom line for the small packages. You can download UPS, DHL, Fedex and Purolator tariffs from this site.

Agility,( owned by PWC, a middle eastern company with a lot of money) was formerly called Geologistics the rebranded name for the + 100 year old International Forwarding Group - Lep International which ran into financial trouble in the nineties.  For the most part, Lep /Geologistics kept it's name relatively clean throughout the decades. 

Not so now with the recent news this week where Agility was just indicted by the US Justice Dept., Agility's name has been smeared not to mention their stocks plunging and throwing the Kuwaiti stock market into a freefall. 

Over the past few years, the contracts awarded to Agility by the DOD have been mind boggling and worth billions.  In fact just this month, they won another 50 million dollar contract with US Aid.  Where they well connected?  I would say so since former high ranking army personnel are now in charge of the Agility Defense Dept. division and one can assume are now the key figures in this indictment.

Agility of course denies any wrong doing and insists they will be vindicated however in this world of instant information and headlines, significant damage has already been done.   They have many other contracts with DOD that are not involved with this particular indictment but surely the DOD and other US Government Agencies are going to look like fools and incompetents if they award anything further to Agility.

One can only think the internal connection is strong, as all parties were aware of the two year investigation into the Food Contract.  Yet, still the contracts kept coming.  
News Sources and reactions:  CBS News
Forbes Timeline
What the middle east is saying:  Alphadinar

If you are new to Canada, the first winter can be quite trying.  I've found that many people from warmer countries really do look forward to the seasonal change however they require some important strategies or advice on what they need to do to get around, stay warm, and what to buy.   Read more

DHL Express launched their Go Green services for Canadian shippers on Oct 13, 2009.  This follows announcements earlier this year by several carriers especially UPS and Fedex about their carbon-neutral services.   One may well ask how does this work?

"To provide a carbon-neutral shipment, DHL calculates to the nearest gram, the carbon emissions generated by transporting each customer's shipment from country of origin to destination. DHL then offsets these emissions by reinvesting in certified carbon management programs such as reforestation and alternative energy projects. These carbon-offset credits are issued directly to the companies that use GO GREEN via a carbon offset certificate. The carbon offset and credit process is monitored and verified by Society Général de Surveillance SA (SGS), a leading independent certification organization." 
Source :  Newswire

One may ask however why the logistics companies such Fedex Trade Networks, UPS-SCS and DHL Global Forwarding have not announced their participation in these Go Green programs.  These companies control a lot of heavy freight, whether air, ocean or road,  fuel emissions on the freight handles by the latter companies would be significant.   Although under the same corporate umbrella as the Express companies of the same name, they are separate entities.  It may be that Go Green is not being applied to the forwarding divisions.  We've seen no press releases to this effect.

Related article :   Green ambition UPS tries one up

Top Managers at the LHR facility were fired in the midst of a theft operation recently discovered.  This surely will rock the DHL Global Forwarding world as the LHR operation is one of DHL's major hubs with significant exports to all worldwide locations impacting  DHL's good name in Europe and Britain especially.  Even though the Senior Management and those individuals affected may well not have had anything to do with this theft ring, it can be considered that they are being penalized as it was on "their watch". 

One can only consider the law suits arising from "unfair dismissal" and the payouts that could occur.  After all, the innocent people affected will undoubtedly have a hard time getting a top position any where else.

London Heathrow has long been labelled "thief row" in the past years and it's conceivable that there are several organized thieving operations that could affect anyone that is running a large warehouse facilility.  Freight forwarders are especially vulnerable since they only track cargo and not it's contents and are not in a position to quickly identify theft only damage and missing pieces.  

This does not affect the DHL Express organization since they are completely separate from DHL Global Forwarding and rarely share meeting space never mind actual warehouse facilities and personnel.    Recent Article at Air Cargo News.   Read more......

LOT Airlines will start flying freighters into Hamilton, Ontario this week from Katowice Poland using Cargojet.  This 767 aircraft can carry 45 tonnes of cargo and will greatly increase the uplift from Eastern Europe and even central Europe into Canada.   Over the past decade, the number of freighters (all cargo aircraft) moving into Canada had decreased, leaving importers to fly in their large orders or out of gauge pieces via whatever route there was available even though it was inconvenient.   It has not been uncommon that a piece destined for Hamilton, had to fly in to Chicago or New York and then be hauled directly in.

Considering however that for certain trade lanes, the volume has dropped considerably, especially Poland of about 38% since the same time last year, we can only hope that this service is supported well enough for it to last.

Ocean carriers have allowed rates to plummet in view of the last year's dropping shipping volumes. The largest trade lane is of course the Asia Pacific trade to Europe and North America.   Rates dropped to record lows as each carrier tries to just retain their market shares, yet this is only a stop gap measure, since they well know that eventually they will have to raise the rates in order to continue operating at their current level.

A recent article at Purchasing explores this further "

Transpacific Stabilization Agreement will push hikes of $1,000 per container

Dave Hannon -- Purchasing, 10/7/2009 3:13:50 PM

With the battle for dwindling ocean container volumes consuming most ocean carriers this year, container rates have plummeted, most notably in the Pacific lanes, where carriers claim to be losing money on some business just to keep ships moving. But heading into 2010, most ocean freight buyers can expect that to change.

The Transpacific Stabilization Agreement, a group that represents ocean container carriers shipping from Asia to the U.S., this week said it is pushing another round of "significant" rate hikes in a frantic effort to restore rates to their 2008 levels.

Read More

In 1999, UPS went public and the public as well as private sectors bought in. Now with after 40 acquisitions and large investments in China as well as the 3PL, they have, closed the perceived gaping holes in their global profile. Focusing on Supply Chain and Distribution networks in the last ten years, as well as business services such as the UPS Store, they have come a long way from being just a courier.

It is probably the most well established courier/business logistics company in North America. They are a freight forwarder as well, but these services seem to have been somewhat neglected since forwarding freight requires reliance on extra-company resources such as steamship lines, containers, and airlines. UPS of course is an airline, however they do not commit their aircraft to the normal every day forwarding as their craft have a very high revenue to cost ratio, that only courier revenue provides.

Freight Forwarding also requires an element of entrepreneurship and creativity at the desk level, as there are many milestones of the shipment and conditions that are varied and uncontrollable. It may well be that UPS with it's tight structure and organization of human resources does not lend well to this type of flexibility exercised by employees.

Having a significant part of the North American and global market share for small package and supply chain, they may have reached their saturation limit and this could be an affect on their share price. There is still much work to do for them however especially in the area of forwarding globally, those cargoes that are dependent on extra-company assets, vehicles, ships, aircraft to move.

Gathering the talent is not that hard, since they have the resources and deep pockets to pay for it. Making inroads into the market share of KN International, DB Schenker, Panalpina, DHL Global and many others is the real task and......it can't be done by a fancy commercial.

Recent article discusses UPS's weakness and strengths. At the end of the day, this huge company is still a very strong organization and a viable stock to buy.

newsworthy: Ten years after IPO, Big Brown still trying to deliver – DC Velocity

Can DHL move forward in light of their losses and fumble in the North American market?  Dr. Appel is suprisingly candid in his recent interview in India.  Read more....

The effect of the global economy and the lack of consumer demand has significantly reduced international shipping volumes particularly in containerized oceanfreight.  Traditionally, the last quarter was always peak season, where demand for containers, space of vessels, especially to North America was high.  During this time a peak season surcharge was in effect, and it still is as shipping lines try to stay above the water.   Studies however have shown that there really isn't a peak any more and there is still plenty of space.  

For active importers, this is rather good news as they can have a reasonable expectation of having their oceanfreight containers actually sail on the booked vessel.   In prior years during the peak season, the highest revenue generating containers were loaded at the origin ports, bumping the lower revenue shipments off the vessel.   Anyone who wanted their goods on time, were faced with a new price regardless of their agreed rate.  This is not likely to happen this year.  A recent article in logistics management addresses this issue.

A logistics consultant can in fact serve as a "virtual traffic manager" for companies who do not have a full time position for that function.  There are in fact some substantial cost savings when an organization is able to have someone on call for logistics assignments such as freight bids, re-managing the supply chain, taking advantage of the economic climate, e.g. lower freight rates.   I recently discovered an excellent article on line. 
"

Why Use Consultants?

Working with a consultant who has a broad knowledge base and experience working through similar issues to those you are experiencing brings a number of advantages to your team.

Independent consultants can help sort through conflicting claims and find the right solution for you. All vendors distribute literature telling how great their products are. An independent logistics consultant is not selling products and does not get any financial incentives from the products they specify.   Read more

Welcome to Second Review's blog where you can find tips, best practices, our take on things as well as get to know us.   We'll mix it up with some light hearted views and thoughts.