While You Were Shipping
Stories You May Have Missed That Caught Our Eye
26 June, 2019 // Magical Thinking In the Truckload Industry? (Journal of Commerce; limited free subscription access). A Cowen Inc. survey shows that truckload carriers’ optimistic expectations don’t match current market trends.
The most recent measurements from the Cass Truckload Linehaul Index suggested a reduction in the rate of price increases from 11.1 percent in August, 2018 to just 1.2 percent last month. Yet, 20 percent of carriers plan for contract rates to rise 5 percent in the next six months; 18 percent said rates will increase 3 percent over that same period. In all, average expectations from all survey respondents are for a 2.7 percent annualized increase.
Either that marks a sharp turn ahead for the market (A Sharp Turn is Cowen’s report title) or there’s going to be some frantic swerving to keep up with conditions in the truckload business.
But You Can’t Blame Them for Being Optimistic (Supply Chain Quarterly) That’s because the Council of Supply Chain Management Professional’s latest “State of Logistics” report details the rocket ride that transportation and logistics professionals experienced over the past year. According to the report,logistics costs grew at 11.4 percent last year and logistics spending as a percentage of total economic output hit a high for the past decade at 8%. Inventory carrying costs were also up 14.8 percent. (Morgan has a few ideas to counteract that, including our signature outsourced inventory ownership program.)
Cop or Carrier? (Wall Street Journal; tiered subscription access) “FedEx is a transportation company, not a law-enforcement agency.” That’s the key statement from Brand Purple’s statement on a lawsuit it has filed against the US Department of Commerce. In May, the U.S. government agency placed Chinese telecom company Huawei on its “entity list.” That’s supposed to restrict the shipment of U.S. technology to any companies on the list without prior government approval.
FedEx is arguing it shouldn’t be held formally liable after it accidentally misrouted a couple of shipments, including a Huawei cellphone that a British journalist was intending to return to China but instead made it to FedEx’s Memphis sortation center. The suit challenges how far common carriers should have to go to monitor the contents of packages they move.
Cyber Pirates Hit The Highway (Journal of Commerce; limited free subscription access) Less-than-truckload carrier A. Duie Pyle reported a recent, serious ransomware attack on its operations. The source of the attack is unknown. However, hackers typically infect computer systems through malicious emails or websites, then lock users our of their own computers until a ransom is paid.
While Pyle’s IT teams were able to restore tracking and communications fairly quickly, the incident highlights rising tech threats for transportation companies. In 2018, Cosco Shipping suffered a similar attack; Maersk got hit the previous year; and overall ransomware exploits rose 195 percent in the first quarter of 2019 according to the story.
With all this in mind, it’s prudent to review corporate security policies, as well as business continuity plans for these kinds of events. It’s also worth considering how interruptions to partners’ systems would affect your enterprise’s own operations. And, if you’d need help orchestrating information and process flow between supply chain partners, check out Morgan’s ChronosCloud platform.
This Is Your Blockchain On Drugs (TechCrunch) IBM, Merck, KPMG and Walmart are teaming up to test blockchain technology in the pharmaceutical supply chain. IBM, an early and aggressive advocate for the distributed ledger technology is leading the push. KPMG is advising on regulatory issues for manufacturer Merck. While we’ve been skeptical of some of the hype and over-application of blockchain, this pilot seems like a worthwhile effort in a sector where accurate chain of custody reporting is critical.
5G And The Supply Chain (Delivered: The Global Logistics Magazine) While consumers dream of instant-download Netflix binging, logistics blogger Johnathan Ward writes that the best new opportunities for next-generation mobile networks will be for business.
To date, 5G’s marketing story has been all about speed—anywhere from 10 to 100 times faster download speeds than current networks. But Ward says improved latency is one of the real killer improvements.
With the present 4G networks, the typical round-trip time between when a user presses a button and sees a response from a remote server is about 50 milliseconds. 5G shrinks that to as little as 1 millisecond, enabling remote robotics, autonomy, augmented / virtual reality applications, machine-to-machine orchestration and other new technologies. Warehousing and transportation will be prime areas for innovation, he says.