The Federal Maritime Commission (FMC) has its sight set on a "top-to-bottom" makeover of the rules governing non-vessel operating common carriers (NVOCC).
That was the message from the FMC's Chairman, Richard Lidinsky, Jr., at the annual meeting of the National Customs Brokers & Forwarders Association of America. The chairman explained the FMC is planning updates to licensing and financial responsibility regulations for NVOs and freight forwarders.
The FMC plans to modernize the rules in the coming months.
A History Lesson
In his speech, Ledinsky shared a history lesson on the FMC and its handling of intermediaries.
The birth of NVOCCs occurred in 1961 when the Federal Maritime Board ruled that consolidators who tool possession of cargo and acted as shippers should be considered common carriers. That ruling meant that even though NVOCCs were subject to tariffs, they were not licensed. Congress added a license requirement in 1998.
Later, a debate over exempting NVOCCs from the required filing of tariffs resulted in the relaxing of tariff requirements. The FMC allowed NVOCCs to enter confidential service contracts. However, that was not the end of the debate.
Fast forward to 2011, and the FMC exempted licensed NVOCCs from publishing rates in tariffs, provided NVOCCs used a Negotiated Rate Agreement (NRA).
Time for Reform
The FMC Chairman outlined two steps for reform. The first focuses on simplifying documentation and other requirements that do not add much value.
The second step reviews the following three options.
- Expanding the NRA exemption to foreign, unlicensed NVOCCs
- Adding non-rate terms to NRAs
- Trimming the current prohibition on amendments to NRAs
John Nikolich, Director Global Marine, expressed Odyssey Logistics & Technology's support.
"As a member of the NVO community, OL&T supports the efforts of the FMC and the Trade to bring about meaningful change which can reduce regulatory setbacks and facilitate the safe and secure movement of international cargo across the globe."
A copy of Chairman Lidinsky's speedch is available at the FMC site.
A common word used to describe today's global supply chain is volatility. It is a familiar topic for the chemical industry and one LogiChem 2012, the 11th Annual Chemical Supply Chain & Global Logistics Conference, put center-stage.
The three-day conference held in April in Antwerp, Belgium, assembled top experts from the chemical and supply chain industries to share strategies for managing the challenges of economic uncertainty and emerging markets.
Attendees heard case studies from top chemical manufacturing companies and shared best practices on supply chain strategies, demand planning, and improving operational performance and logistics management by establishing key performance indicators.
OL&T's Managing Director of European Headquarters, Toine Matthijssen, discussed the benefits of a strategic partnership with a Lead Logistics Provider (LLP) for effective management of today's global supply chain.
Mr. Matthijssen provided three key elements for the successful implementation of an LLP partnership.
- A commitment by the company for identifying and supporting a Project Lead
- An alignment of objectives between the company and the LLP
- The development of the best integration model for the company's logistics services
"There is a lot of volatility in the global supply chain," explained Mr. Matthijssen, "there is more uncertainty and companies are taking a longer time to define their logistics and supply chain strategies."
Mr. Matthijssen cautioned about the danger of "doing nothing," where companies lose the full benefit of service, cost controls, and efficiencies that the right partnership delivers.
Copies of the presentations are available for download for attendees of the event at the LogiChem 2012 site.
The roller coaster ride of the global economy appears headed for a smoother ride. That's the opinion of Panjiva and Global Sourcing Council global trade members.
According to the 18-question survey, The State of Global Trade in 2012, half of the responding buyers and shippers are "somewhat" or "very optimistic" about the global economy. However, larger organizations (with over $100 million in revenue) were twice as pessimistic about a full economic recovery.
Top Concerns
The top three concerns of the survey respondents were similar for suppliers and buyers, with the exception of rising labor costs that suppliers do not view as a serious concern.
- Slump in global demand (41 percent of suppliers / 28 percent of buyers)
- Commodity prices volatility (20 percent of shippers / 27 percent of buyers)
- Rising labor costs (7 percent suppliers / 26 percent of buyers)
Buyers in the survey indicated an interest in finding new sourcing outside of China. Sixty-eight percent rated the initiative as "more important" or "much more important" for 2012.
Moving Production
Rising labor costs in China and supply chain complications are a concern for businesses. Reports indicate wage increases of 15 to 20 percent in China. Supporters of returning production to North America argue that increased shipping costs, as well as decreased productivity, diminish or eliminate the gap in cost-savings.
Recent surveys show manufacturers are taking a close look at production sites. The first survey from online manfucaturing marketplace, MFGWatch, reported 22 percent of manufacturers surveyed in the fourth quarter of 2011 moved at least a portion of production back into or closer to North America from a low-cost country. It's a trend that has stayed relatively constant since 2010.
The second survey, conducted in 2011 by management consulting firm Accenture, revealed 61 percent of responding manufacturers were considering matching the production site closer to the locations of customers.
Manufacturers are watching the changing economy carefully, which continues to spotlight the need for flexibility, reliable market information, and access to a large global network of support.
Sustainability is a formidable challenge for most shippers. With so many links in the global supply chain, one misstep sends a sustainable business model tumbling.
A new resource document, Empowering Sustainability in Logistics: Building a Responsible Partnership for a Green Supply Chain, explains how logistics is the logical partner for building a company's sustainable business practices.
The Big Picture
Few business partners have a better big picture view of supply chain activities than the logistics provider. Managing those activities reveals the potential domino effect one process has on other parts of the supply chain.
A 2010 study by Deutsche Post DHL dicusses the influence of logistics, particularly as it applies to carbon dioxide (CO2) emissions.
- 63 percent of business customers believe logistics is a strategic lever for CO2 abatement
- "Long-term success will be strongly linked to more sustainable business concepts"
The report concludes, "The logistics industry is of equal strategic importance in achieving lower CO2 emissions as it is in terms of economic development."
For more information on how logistics provides invaluable insight to creating a green supply chain and tips for what to look for in a partner, download the sustainability resource document.
The one certainty in the supply chain industry is change. How companies respond to change is what differentiates them from each other.
Managing the logistics of the global supply chain requires innovation that has many shippers turning to logistics partners for solutions.
A recent survey sponsored by EyeforTransport(EFT) revealed the majority of companies (58 percent) use between one and three third-party logistics (3PL) partners. The survey provides insight into what companies expect from the partnership.
Service and Cost
EFT's annual survey shared responses from supply chain and logistics executives to what is most important in their partnership.
- For shippers, the best quality service ranked number one in priority (58 percent) in logistics partnership
- Most 3PL respondents felt lower prices would edge out service for shippers
- Only 18 percent of shippers rated lower prices as most important
The top five reasons companies do not renew 3PL contracts include:
- Cost "creep"
- Poor service
- Better service offered by another 3PL
- Hidden costs
- Cheaper price from other 3PL
3PLs appeared to underestimate the influence of cost "creep" in shippers' contracting decisions as it was ranked eighth among 3PL responses. The results demonstrate the need for a clear understanding of the scope of work and transparency in pricing.
2012 Summit
EFT plans on incorporating the themes presented in its annual survey at the Chief Supply Chain Officer Forum, which takes place June 18 - 20, 2012 in Chicago, Illinois.
Importers scratch their heads over the issues of chassis management.
For years, ocean carriers in the U.S. have explored different strategies for exiting the container chassis business, which involves using a chassis/container unit as a road trailer for transportation.
There are multiple reasons for the change in strategy.
- The assets take up too much space on marine terminals
- Ocean carriers would rather use the space for storing containers
- The chassis requires constant maintenance and repair
- Maintenance is very expensive
The U.S. is the only country where ocean carriers own the chassis. In the rest of the world, truckers own the container chassis.
Recent Chassis Trends
Shipping lines began collaborating through chassis "pools," which, for a fee, independent truckers draw from. Some formed companies solely for managing the assets and chassis pools.
A straw poll of readers by Inbound Logistics, reported 80 percent of respondents experienced a drop in chassis availability at ports and 67 percent reported higher port drayage prices.
Ocean carriers will still provide chassis moves with door-to-door service when a shipper requests and pays for those services. However, some lead logistics providers, like Odyssey Logistics & Technology, negotiate rates for managed services that include the door-to-door chassis service.
The U.S. House Transportation and Infrastructure Committee recently introduced a five-year, $260 billion transportation bill, the American Energy and Infrastructure Jobs Act.
In a press release from the Committee, Chairman John Mica calls it "the largest transportation reform bill since the creation of the Interstate Highway System in 1956."
The previous law for transportation programs, the Safe, Accountable, Flexible, Efficient Transportation Act (SAFETEA), expired in 2009 and received eight extensions for current funding that end in March.
Uphill Climb
The new bill provides funding for transportation and looks to authorize domestic drilling for oil and gas to support infrastructure spending.
Since introduced, the bill was the source of hours of debates and proposed amendments, then finally approved by a House panel. However, the debates are not over a legislators scrutinize the cost and various provisions.
For example, a provision authorizing longer and heavier trucks did not make it through the rounds of debates. The original language allowed the operation of 33-foot trailers in doubles formation, an increase from the current maximum of 28 feet. The first draft also allowed triple-trailers up to 120 feet long.
The committee replaced the above provision with an amendment authorizing a study on the safety and effects of heavier trucks on the roads.
The bill has several hurdles as it moves through the House, including the Senate's Transportation Enhancement program, which the House bill eliminated, that allows states to use highway money for non-roadway projects.
BG Strategic Advisors held its annual BGSA Supply Chain Conference on January 25-27, 2012 in Palm Beach, Florida. The conference brought together executives from the logistics, transportation and supply chain industry where they share industry strategies and have an opportunity to discuss emerging trends.
Chief Executive Officer and President, Bob Shellman and Cosmo Alberico, Executive Vice President and Chief Financial Officer for Odyssey Logistics & Technology (OL&T) attended this year's conference. A summary of the topics discussed and key takeaways can be found here. Executives Converge at 2012 BGSA Supply Chain Conference
Odyssey Logistics & Technology (OL&T) is proud to announce the launch of a new corporate logo as part of the ongoing evolution of its overall brand. In addition to a new icon, which graphically depicts the company's name, OL&T has adopted "Empowering Global LogisticsSM" as the tagline that aptly describes the company's mission to empower logistics professionals by providing them with leading-edge technology, streamlined processes and robust information for better decision making.
The updated logo, included above, incorporates the familiar "swoosh" element that has been part of the company's identity since its inception over a decade ago. The same new logo design has been applied across the OL&T family of subsidiaries, including Capital Transportation Solutions LLC (CTS), Chemical Marketing Concepts LLC (CMC), International Forwarders, Inc. (IFI), Optimodal, Inc., Odyssey Overland LLC and Odyssey International LLC.
We invite you to visit our recently updated web site at www.odysseylogistics.com regularly for new case studies, videos and other helpful industry resources and our blog at http://web.odysseylogistics.com/blog/.
Questions about our new look? Contact OL&T's VP, Marketing at dyanncalder@odysseylogistics.com or 203.448.3822.
You would think with a rising demand for freight that the truck driving industry has no worries. However, a shortage of truck drivers presents a good news-bad news scenario for transportation and logistics management.
Wages and Benefits
With projections for a shortage approaching 300,000 by the end of the year, trucking companies are pulling out all the stops. Many are offering higher wages and benefits, such as student loans for trucking schools, which drivers repay by working for the company after graduation. The added incentives create increased competition, making it even more difficult for trucking companies to hire and retain drivers.
Contributing Factors
The downturn in the economy was certainly one of the contributing factors to the shortage. The recent release of the final Hours of Service (HOS) regulations that reduces work hours has industry experts speculating on the impact to freight management.
Additionally, the Federal Motor Carrier Safety Administration's (FMCSA) Comprehensive Safety Analysis (CSA) 2010 program requires individual safety records of truck drivers to become more visible. While both the HOS and CSA 2010 are a good step for safety, they are bound to affect the number of available drivers.
Industry Experts
The increase in demand appears to be a positive sign; however, the number of available truck drivers is not keeping pace. Analyst, Jeff Kauffman of Sterne, Agee & Leach has said, "The truck driver population is growing at less than 1 percent a year. Freight's growing at closer to 4 percent."
Shippers are looking for alternative solutions, such as using railways for cargo previously slotted for trucks.
Bob Messemer, Director, Package Freight Motor Truck Procrement, for Odyssey Logistics & Technology had the following observation.
"As the logistics market continues to be complicated by both capacity issues and driver shortages, it's vital that companies leverage a network that offers multiple carrier and mode operations to ensure materials and goods make it to their final destination in the most efficient and cost-effective manner."
