NEWSFLASH: ILA walks out of NY/NJ contract talks
Talks between the International Longshoremen’s Association and New York Shippers’ Association over a local contract for New York and New Jersey dockworkers abruptly broke down Wednesday when ILA representatives walked out of the meeting. The breakdown reportedly centered on work rules changes proposed by the employers that were unpalatable for the dockworkers’ union, after the two sides opened discussions Wednesday.
Here are our predictions and developments to be followed in 2013:
Transervice Logistics | January 7, 2013
- Land freight carriers will continue to face driver shortages, regulatory constraints such as CSA and hours of service, higher equipment costs and fuel costs.
CSA, driver safety, will by year end be substantially less of an impediment and this may become more of a positive than a negative.
- Most modes of transportation will continue to deal with pricing challenges, certain capacity shortfalls, infrastructure issues (ports, roads, bridges) and sustainability.
Retention of truck drivers will continue to be challenging over pay and unless pay increases are tied to KPIs; lifestyle improvements need to be made as such factors keep men/women from considering a career as a truck driver.
- Rail intermodal will continue to grow but capacity could become an issue. Use of boxcars might return as an alternative to intermodal when not available and to trucks if pricing and service reliability are reasonable.
- In express and small package delivery, less expensive shipping options will continue to be adopted as not every shipper or customer needs overnight or even second-day delivery.
The use of alternative fuels in truck transportation will grow albeit still at a slow pace due to capital investment and infrastructure for refueling, however several private fleet operators and motor carriers already have had excellent results with natural gas, and there is no reason to expect this to change.
- Empty miles still is a challenge for many private fleet operators and specialized carriers, however adoption of new technology to help manage empty miles, improved backhaul efforts and co-loading can have very positive results; the biggest optimization hole in logistics is around the difficulty of arranging for collaborative multi-party outbound hauls and backhauls.
- Outsourcing – although there is some growth improvement in the economy there is continuing weakness overall; uncertainty in the economy and the supply chain will give a lift to logistics service provider (LSPs) and 4PLs. Shippers who have contracted with one or more LSPs should leverage the relationships to gain more flexibility to modify their DC networks fairly quickly in relation to customer changes within their own supply change, volume changes and in transportation.
- Technology will continue to be at the forefront and dominate: massive management of data, cloud computing, supply chain management, social media customer involvement, mobile technologies such as in-plant and in-warehouse mobile stations and of course mobile phones.
- Automation and robots – the acquisition of Kiva by Amazon was an important announcement last year and an indication of where many distribution centers will eventually evolve to and this is not the only area where automation will be playing a bigger role. Robots will track inventory not only in DCs but in large format stores as well.
- Panama Canal – expansion is expected to be completed in 2015 and will open up new port options for U.S. importers. Change will be gradual at first but increase rapidly for importers that are looking for less touches, speed, cost savings and close to market shipment arrivals; this may have a big effect on DC locations in the future. The canal expansion could also effect port selection for export.
- Final mile delivery will garner even greater focus by the big retailers during 2013 – Amazon, Walmart, Google, eBay, and USPS launched or accelerated efforts to provide same-day delivery to certain markets in 2012 and more market launches are expected. Network analysis including DC and for large retailers store location optimization will need to be done along with selection of the newest mobile technologies; very supportive and proven quality transportation/courier providers will be important to successful implementation.
With Tesco, SuperValu Reviewing Strategic Options, Big Changes Coming to Grocery Ownership
Mark Heschmeyer | Watch List/Co-Star Group | December 12, 2012
Next Year Likely To See ‘Big Revolving Door’ for Grocery Stores
The grocery store segment of the retail real estate industry is facing a substantial amount of dislocation going into 2013. Two major chains last week confirmed what analysts had been suspecting for much of the year, that they were reviewing their strategic alternatives after posting disappointing financial numbers.
Admitting that its bid to crack the U.S. grocery store market has failed, Tesco plc., the largest retailer in the U.K. and one of the world’s leading international retailers, dismissed the CEO of its 199-store Fresh and Easy U.S. chain and appointed Greenhill to review its options for its U.S. stores.
And now SuperValu Inc. confirmed that the company continues to be in active discussion with several parties regarding the sale of all of its stores or some of its individual brands, which include: Acme, Albertsons, Cub, Farm Fresh, Hornbacher’s Jewel-Osco, Lucky, and Sav-A-Lot.
“The real question is if Walmart will buy them and just convert to Walmart Xpress stores, or if they try to chop it up and sell,” said Garrick Brown, director of Research for Cassidy Turley. “I think it could go either way.”
“The big winners are the mid-priced and unionized guys in California, Arizona and Nevada — Safeway, Vons, Stater Brothers, Bashas, Raley’s/Bel Air and the like — just in that there is one less competitor to fend off,” Brown said. “But should Walmart take them all, I think their sense of relief will be short-lived.”
Ocean Capacity and Weak Volumes Hit Rates
World Trade | January 9, 2013
The December 2012 Container Forecaster reports that despite attempts to pull East/West capacity, significantly weaker cargo volumes limited carriers’ success at raising rates for any sustainable period.
TODAY IN ENERGY: Wednesday, January 9, 2013
2012 Brief: Coal and mid-continent crude oil prices declined during 2012
Coal and mid-continent crude oil (WTI) led energy commodity price declines in 2012. Natural gas was the only key energy commodity with a significant price increase when comparing January 1 to December 31. Heating oil, Brent crude oil, and wholesale gasoline (RBOB) ended 2012 close to the level at which they started the year.