Logistics Industry Update: July 2014 in Review
Back to What We Think
[caption id="" align="alignright" width="286"] A Freightliner truck heads north on I-95 in Boca Raton, Florida. (Photo credit: Wikipedia)[/caption] Summer is rapidly running its course, which means the edge of peak season is approaching for supply chain professionals. As we explained last month in our June review, we know it's easy to miss out on some of the more salient industry news items as the month rolls by. Our answer to this is to do the work for you and pull together a bite-sized review of the major numbers and announcements. So, here are the reports and trends that made the media during July:
- Intermodal freight movement continues to be up for the year, with a 5.9% gain over the same period in 2013. Railroad are also seeing steady gains over the first 30 weeks of the year, with cumulative volume up 3.6% compared to 2013. Railway Age provides the full figures here.
- Industry advisers sought additional long-term funding for U.S. infrastructure from lawmakers, beyond the expected relief funds designed to "avert the immediate crisis." A bipartisan group of 12 current and former transport secretaries made no bones about warning Congress that the temporary funding bill being considered, which allocates almost $11 billion more, won't be enough to fix the country's transportation system.
- And speaking of emergency funding, UPS will spend some $175 million of its own to shore up its seasonal operations as we head toward the holidays. Last year saw several companies fail to deliver on a busier than expected peak season, which Big Brown clearly intends to avoid as packages hit the road this year.
- A Pricewaterhouse Coopers survey found that almost three-quarters of U.S. CEOs have plans to redesign their service and fulfillment supply chains, fueled by a renewed confidence in our field as a driver of revenue. Tough economic conditions had pushed supply chain operations firmly into the category of cost savings for several years, but the deeper competitive advantage that improvements can bring are now gaining wider recognition as growth picks up.
- Meanwhile, a study by Harris Interactive shows a good number of consumers focusing on costs when it comes to ecommerce, most notably shipping costs. Being forced to pay to move a product was the number one annoyance for online shoppers, with 66% describing shipping costs (admittedly vaguely) as their "pet peeve." Meanwhile, the second most significant annoyance was not getting a product that looks like its online image. So the message is clear for ecommerce fulfillment, build shipping into your product price (and make sure what you send looks the same!)