@Risk

New orders for manufactured goods rose for the second consecutive month in December, the US Department of Commerce reported on Friday.

In addition:

• Shipments increased 0.7 percent –up for the seventh consecutive month.
• Unfilled orders increased 1.4 percent –now up 20 of the last 21 months.
• Inventories increased 0.1 percent –up 26 of the last 27 months.

The latest report from the Institute for Supply Management also showed signs of improvement. According to the ISM Report On Business, economic activity in the non-manufacturing sector grew in January for the 25^th consecutive month.

ISM’s research found that the 12 non-manufacturing industries reporting growth in January were (in order): (more…)

The International Telecommunication Union estimates that 90 percent of the global population is now covered by a 2G mobile cellular network. (Half that, or 45 percent, is covered by 3G.)

But, of course, that global population is on land. If you’re out on the open seas, it’s a different story.  Not surprisingly, the oceans are the last “white spot” for the mobile communication industry to connect.

Earlier this month, Maersk Line, the largest shipping company in the world, announced that it is taking steps to change all that.  The company has appointed Ericsson to introduce end-to-end systems integration and deployment of mobile and satellite communication to the entire Maersk Line fleet.

More specifically, over the next two years Maersk Line will outfit 400 of its 500+ container vessels with Ericsson antennas and GSM base stations. Upgrades to the remaining vessels will be made soon after.

It’s an important step, because as Ericsson points out, mobile communication provides opportunities for the shipping industry to upgrade several essential processes.  For example, until now, Maersk Line’s high-tech modern container ships have been equipped with satellite connectivity primarily intended to support communication for vital shipboard functions.  But Ericsson says its new integrated maritime mobile and very-small-aperture terminal (VSAT) satellite solution will allow Maersk Line to better address: (more…)

After several down months of retailers reducing their imports compared to last year, we’re likely to see a (slight) turnaround in December.

The monthly Global Port Tracker report, released last week by the National Retail Federation (NRF) and Hackett Associates, forecasts that import cargo volume at the nation’s major retail container ports should increase 0.3 percent this month compared to December 2010.

Global Port Tracker covers the US ports of Long Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast, New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast, and Houston on the Gulf Coast. It records retail container traffic in Twenty-foot Equivalent Units (TEU), where one TEU is one 20-foot cargo container or its equivalent.

Here is the volume these ports have handled over the past few months: (more…)

The House Oversight and Government Reform Subcommittee held a hearing last week about a proposed rule to limit truck driver time.

The rule, proposed by the Transportation Department, is an effort to reduce the risk and prevalence of fatigue-related truck crashes through improvements in the hours of service (HOS) regulations. Under the proposal, the current 11-hour HOS daily limit for drivers would be reduced to a 10-hour limit. In addition, the 34 hours of time off currently required between each week of driving would have to include at least two midnight-to-6 a.m. periods of nighttime rest.

In a statement, Anne S. Ferro, administrator of the Federal Motor Carrier Safety Administration, offered detailed historical perspective on this rulemaking, as well as an analysis of its economic impact.

From the statement:

With regard to the economic impact of the proposed rule, FMCSA estimated that the regulatory option that included a 10-hour limit on driving time during the work day would impose costs of approximately $1 billion per year with annual safety and economic benefits of approximately $1.4 billion. The net benefits would be $380 million per year. The regulatory option that included an 11-hour limit on driving time during the work day would impose costs of approximately $520 million per year with annual safety and economic benefits slightly greater than $1 billion. The net benefits for this option would be $560 million per year. FMCSA acknowledged that the 10-hour driving time component of the rulemaking contributed more than $500 million to the estimated cost of the rule while providing only $330 million in safety and economic benefits. However, taken as a whole, the regulatory option that included a 10-hour driving time limit was cost-beneficial, based on the Agency’s analysis of the crash data and research.

Not everyone agrees the changes would be beneficial. Opponents of the proposed rule say shortening the daily driving limit would: (more…)

3PLs and their customers appear to be misunderstanding each other’s priorities.

For example, the recently published Global 3PL & Logistics Outsourcing Strategy Report 2011-12, from eyefortransport, found that:

• 36 percent of 3PLs believe lowest price is the most important factor for shippers when choosing a new 3PL, as opposed to best quality service (30 percent).  Shippers, on the other hand, rate best quality service as the most important factor (64 percent) and lowest price as far less important than 3PLs expect (15 percent).
• When it comes to the non-renewal of existing 3PL contracts, 3PLs overestimated the importance of their competitors offering a cheaper price by a dramatic 49 percent.

This kind of fundamental disconnect needs to be addressed so the industry can successfully face the challenges that lie ahead.

“This year’s survey findings really reinforced some of the trends we’ve seen for the last 18 months,” said eyefortransport’s Executive Director, Katharine O’Reilly.  “The insights are not really unexpected, but when you see figures like this, especially in areas where 3PLs and their customers are fundamentally misunderstanding each other’s priorities, we really sit up and take note.  These are gaps in understanding that need to be filled if the industry is to move forward and grow as it should.”

In other findings: (more…)