Monday, February 29, 2016

US trucking industry can’t stop driver exodus, transport institute says

Dustin Braden, Assistant Web Editor, JOC.com | Feb 29, 2016 3:57PM EST

Try as they might, trucking companies have been unable to stop the exodus of drivers from the industry just as new regulations threaten to cut capacity by 15 percent, according to the National Transportation Institute.

The impact of driver turnover is felt most acutely depending upon the segment of the trucking market, hitting truckload firms the hardest and presenting opportunities for less-than-truckload carriers and third-party logistics providers, Gordon Klemp and Leah Shaver of NTI said during a Friday conference call hosted by investment research firm Stifel. The shortage of qualified drivers and related cost increases cited by trucking operators will only grow worse as new regulations like electronic logging devices, speed limiters, and mandatory drug testing further restrict capacity.

Sluggish pay rises have contributed to the exit of drivers. Although driver pay rose 14 percent from July 2014 through January, that 19-month period of pay increases is actually the shortest recorded in the 22 years the NTI has been keeping track of driver pay. Previous pay increase cycles have lasted roughly 33 months, while the Great Recession took a 25 percent bite out of driver pay on average, according to NTI.

Private fleets pay drivers between 20 and 50 percent more than over-the-road for-hire drivers are paid and that premium, coupled with steady and reliable hours, has held down private fleet turnover at 14 percent while for-hire truckload turnover is basically 100 percent, NTI said.

Turnover at large for-hire truckload firms hit its highest level since 2012 in the third quarter, according to the American Trucking Associations. Smaller truckload firms had a turnover rate of 68 percent. The need for drivers is so acute that trucking firms added 1,500 jobs in January, a month when other transportation companies shed more than 20,000 jobs.

Less-than-truckload shippers and third-party logistics companies can take advantage of this as excess truckload freight often finds its way into LTL trailers while tight truckload supply creates a need for 3PLs to find capacity, NTI said.

Making truck driving more unattractive to potential recruits is the fact that while driver pay averages $54,000 a year, purchasing power is half what it was at the time of trucking industry deregulation in 1980. Many truckload drivers must pay for their own expenses when on the road and spend an average of around $1,000 per month on food, showers, laundry, etc.

One bright spot for an industry that faces stiff demographic headwinds is that only 6 percent of drivers are female. NTI believes changes to recruiting practices and operational tweaks could boost that percentage.

Women truckers could also help companies meet safety goals and cope with a changing insurance market, NTI said. Companies have begun to hand out safety-based bonuses as AIG exits the trucking insurance market, reducing supply and likely driving up costs, and other insurers are tightening their safety standards ahead of new Federal Motor Carrier Safety Administration standards.

Carriers should also make sure that dispatcher and fleet management personnel are used to maximum effectiveness. Typically, a company’s best dispatchers are teamed with its best drivers, which means that inexperienced dispatchers are working with inexperienced drivers, allowing for miscommunication and flaring tempers, creating a challenging work environment that can contribute to turnover, NTI said. Carriers could use personality tests to match drivers and dispatchers, the company suggested.

The report also said that driver needs don’t really change all that much and firms that can guarantee a consistent paycheck, sufficient miles to reach pay targets, desired quantity and frequency of time at home, and “emphatic” respect will find themselves with significantly lower turnover.

Improve the Omnichannel Experience, Reduce Customer Effort

Annette Franz Gleneicki

| Feb 27, 2016 25 views

Image courtesy of norjam8

I originally wrote today’s post for Intradiem. It was published on their blog on October 15, 2015.

How would your customers rate your omnichannel experience? It’s probably time to make that a priority, if it isn’t yet.

Customer effort is (or should be) a huge area of concern for customer experience professionals; it’s major point of contention and frustration for customers. Measuring customer effort is probably one of the best ways to understand if you’re delivering a great customer experience; effort is a key driver of satisfaction and of the overall experience, no doubt. If you’re not asking a customer effort question on your transactional surveys, it’s time to add the question; the responses will likely be eye-opening!

If you’re thinking about reducing customer effort, one of the most impactful ways to do so is to take a look at your omnichannel experience. Don’t confuse that with multichannel or any of the other “xx-channel” terms. There’s a difference! Let’s start with defining multichannel versus omnichannel.

Multichannel refers to offering or using multiple channels to interact with their customers, for purchases, support, or whatever the customer is trying to achieve with the company. Multichannel does not refer to a consistent, seamless experience across channels. The experience is not optimized across channels, and the channels are not integrated in any fashion. This can lead to a very fragmented experience for customers.

Omnichannel refers to using these multiple channels to interact with customers (or for them to engage with you) but in a consistently seamless way. The experience is consistent with each channel, and companies know who the customer is and what she’s done at any previous channel with which she’s interacted with them. In other words, omnichannel is all about delivering a seamless brand experience across and with all channels. Regardless of which of those channels your customers use, they feel like they are getting the same, personalized experience; they don’t have to start from scratch with each interaction. To them, you appear as one brand from channel to channel. (It sounds odd to say that, but you know there are plenty of brands out there that are very disjointed from channel to channel.)

I’m going to focus on the omnichannel experience. I think most businesses know that they’ve got to offer multiple channels with which customers can interact with them. But far fewer have mastered how to make the entire channel ecosystem experience effective; they haven’t made it a priority to integrate the experience across all of those channels.

Why is this important?

According to research by Oracle Retail and Retail TouchPoints about the shopping experience…

Omnichannel shoppers are the most valuable. These consumers are significantly more valuable compared to single-channel: More than 45% of retail executives report that omnichannel shoppers are 11% to 50% more valuable; and close to 3% said they are up to 200% more valuable.

Three of the most significant ways that their value/profitability is measured include: frequency of shopping trips, total dollar value of purchases over time, and average basket size. I don’t think we can argue with any of those metrics when we think about the value of a customer. These types of results speak to focusing on the omnichannel experience – simplifying it and reducing the work that customers have to do when they are interacting with your company.

If you want to effect change that results in reduced effort and an improved omnichannel experience, it will take a herculean endeavor. Why? Because, first of all, by definition, it’s not something that each individual department can fix or improve on its own. It’s an organization-wide transformation, and it begins with executive commitment and then moves into understanding your data inputs, outputs, infrastructure, and flow.

Once the executive team is on board (resources, budget, etc.) with this transformation, there are two key next steps:

Silos must be broken down. This is a culture thing. Departments need to start talking to each other, working together, and sharing data and information. Key to this is helping each department understand how they impact the customer experience, i.e., importantly, that every department touches a single experience in one way or another. The best tool to facilitate this understanding is a journey map.
You must have a single view of the customer. In order for this to happen, data must be shared. In order for that to happen, your CIO must prioritize the work; without that prioritization, forget about it. The key to an improved omnichannel experience and, hence, a reduction in customer effort, is data. It must be shared across departments and channels; in order to do that, you’ve got to have the right architecture and infrastructure in place to capture it, centralize it, and get it into the hands of the right people at the right time in a format that makes sense and is actionable. No small feat! It has to be given top priority. Now.

The crux of the matter, the reason that the omnichannel experience breaks down, is that the business acts like it doesn’t know the customer at every touchpoint. For the customer, that means that he has to “re-authenticate” at every interaction; he has to start each interaction with identifying himself, what he’s trying to do, who he’s already talked to, where he’s been, etc. You’re a customer. You know all about this. It’s so frustrating. Why perpetuate this experience with your own customers.

Customers and prospects today are extremely savvy and informed. They want to browse, shop, talk, and otherwise interact with companies through a variety of channels: phone, web, in store, social media, app, mobile, web chat, and more. The bottom line is that companies need to allow customers to do so using whatever channel is most convenient for the customer; most importantly, those channels must afford a seamless and personalized experience. Then, and only then, will you have successfully reduced customer effort in a way that is meaningful and impactful.

Are you ready?

In the future, I’ll write about a channel that you may not think about when you’re making the transition and the transformation from multichannel to omnichannel experiences.

The less effort, the faster and more powerful you will be. -Bruce Lee

It's not just Amazon that is killing Walmart ...

Elena Holodny

Feb. 23, 2016,

Damian DovarganesThis millennial buying food all over the place is a problem for Walmart.

A lot has been written about Amazon versus Walmart.

The crux of the argument is that the rise of online shopping, particularly at Amazon, has bruised Walmart's dominance in the retail industry.

But Walmart's struggles might not be entirely about online shopping.

In a recent note to clients, Stifel analysts shared a chart showing that when it comes to grocery shopping, supercenters like Walmart aren't losing out to any type of store in particular. Rather, these supercenters are being hurt by consumers' preference for not having a single store to do all of their grocery shopping.

As Stifel's Taylor G. LaBarr explains in greater depth:

The idea of a "one stop shop" is giving way to more local convenience. In [the chart below] the largest inflection is not Supercenters versus Supermarkets — it's the rising number of consumers who report having no primary grocery store at all, instead shopping at a variety of locations to meet various needs. We believe consumers at all demographic levels will continue to shift to smaller but more frequent trips, with an increased focused on product quality, nutrition, and healthy (local) supply chain.

Stifel

There are several potential things that can be contributing to this trend.

For starters, Stifel's team notes that more Americans are living in cities and more folks are "net-downsizing" for the first time in decades. In both cases, it's more difficult to store bulk pantry foods in smaller homes/apartments than in bigger ones.

Additionally, people across income levels have generally shifted to eating healthier, observes Stifel. Arguably, the desire to eat healthier could encourage shoppers to seek out the healthier options at various stores, rather than deferring to a one-size-fits-all supercenter.

Moreover, "while many millennials may not be as proficient in the kitchen as their parents," continues LaBarr, they "are much more likely than prior generations to find inspiration from a new recipe, or plan a unique meal."

Consequently, millennials don't stock-up on the same four items for the whole winter as previous generations may have.

Instead, their grocery shopping is more spontaneous, and they are more likely to go to a number of stores to get what they need than a one-stop-supercenter.

Stifel

And as for what this means for the industry, Stifel declares that, "specialization is back."

As LaBarr writes:

With consumers now making frequent small trips to fulfill a variety of specific demand (based on unique inspiration), there is little to prevent them from visiting the best store for each individual need. Weekly shopping may consist of a Saturday trip to Walmart for paper towels and bulk cereal, followed by a Sunday stroll through the local farmers market for produce, a Wednesday visit to the discount grocery for easy weeknight dinners, and finish with a Friday trip to Fresh Market for a dinner party that weekend.

Although this could be bad news for the likes of Walmart, it is great news for the smaller bodegas and specialty stores.

Sunday, February 28, 2016

Puga Sankara, Principal, Smart Gladiator
2/26/2016 Post a comment

We live in a world that is bathed in data...and yet too often that data yields little in terms of information. Today, data proliferates business, but the worth of that data can only be measured by the insights derived from it.

Further, we need data that we can substantiate from other relevant metrics and that we can act upon effectively. Currently, we lack (and hopefully are evolving) a framework and a systematic approach to analyzing even unstructured data in an unstructured manner. We need to track the intelligence gleaned from it until we find interesting insights that impact a real business problem.
That is the next frontier of data analytics, which can be further substantiated by simulations and or even prediction markets. Consider this scenario: A corporate project is potentially in trouble. Everyone in the organization knows it, except the vice president who owns the project. The failure comes, and the company brand is soiled and the VP and his people are all fired, and the company's stock price tanks. What if the employees, those on the ground, were allowed to share their belief on the potential outcome in a regulated way? Then, the VP would have data around the potential perceived success. Of course, this wouldn't work in every scenario (which as when the management team is trying to effect revolutionary change), but it's interesting to think about.
During a post pilot review meetings in which I was involved, a distribution center (DC) manager expressed his frustration about the three to four hours daily that his supervisors were spending collecting data on the organization's operators in order to answer seemingly simple questions like:

How much work was done? How many picks were done?
Did the operators meet their targets?
Did anything hinder the operators from doing what they were supposed to do? (For example, with replenishments, often the pickers will have to wait when the bins run out of product because the bins will have to be replenished from the reserve locations.)
How are new hires performing compared to the veteran workers?
How long does it really take to fully onboard the new hires?
How long does it take for new hires to perform consistently and match the corporate standards?

In addition, when employees see that managers are not measuring or measuring inaccurately, therirs a temptation to slack off their work. The age old adage is so true, "What cannot be measured cannot be managed." if you want to really manage something effectively, you have to measure it and every one needs to know how they are being measured and what successful performance metrics are.
I remember one client that was plagued by a warehouse management system (WMS) that, for various reasons, wasn't producing the expected throughput. I went to a senior manager but was met with nothing but anger and frustration. He was angry ,because the DC throughput was almost half of what was promised to them during the WMS sales cycle. Eventually, I figured out the bottlenecks that were slowing them down, addressed them and helped them get back on track. At the end of the project, here are the questions that were looming:

Hey how do we make sure we keep this going?
How do we make sure we maintain this level of efficiency and productivity?
How do we make sure we all know that we are consistently performing to these metrics? Or there is an alert or a red flag that pops up if we slack?
Also how do we keep ourselves on top of this, especially when the business is changing dynamically? A good example is shift of commerce from Retail to e-commerce and to mobile these days.)

Then someone suggested displaying a service level metrics for the departments, so the supervisors can proactively showcase their metrics, instead of waiting until other departments or customers start to complain.
With the evolution of Internet of Things (IoT), data is proliferating and mobile devices are loaded with all kinds of sensors, accelerometers, gyroscopes, pedometers etc. It is often possible to gather vital intelligence to measure the efficacy of the processes and operations in a distribution center pretty quickly.
In any DC, the biggest expenses are labor and supplies. Often, DC personnel don't focus as much on inventory cost because it is outside their control. The inventory/merchandise needs to be really managed throughout the whole supply chain. If it is something that is owned by the retailer or distributor, then they care about the accuracy of the inventory count and location of inventory.
As I said, the two most important expenses executives care about are the labor expenses and supplies. While managing labor, it is very important to manage unproductive travel time, for example. Unproductive travel time can be measured easily by monitoring the number of steps the operators walk or travel during the entire course of the day. If an operator that walks a lot but gets little work done, it needs to be flagged and addressed. That's just one way that data could be actionable.
Let us know what activities you monitor and how you leverage that good information to optimize spend in the comments section below.

Men are twisting the knife that's already killing shopping malls

Mallory Schlossberg

Shutterstock

Men, rejoice. Your dreams might be coming true, all thanks to your desire to never leave your house.

A new study from Business Insider Intelligence confirms that men are doing a lot of shopping online.

So men are thereby helping drive malls into the ground, which are already struggling on multiple counts.

"When it comes to e-commerce, men drive nearly as much overall spending online in the US as women. The conventional wisdom is that women drive shopping trends, since they control up to 80% to 85% of household spending," BI Intelligence reports.

And it turns out, more men than women would prefer to never have to leave their houses to shop — especially these guys.

The report noted that 40% of men ages 18-to-34 "would ideally buy everything online." Women, on the other hand, seem to still care for traditional in-store shopping experiences at times with only only 33% of women agreeing they feel the same.

The report notes that more men, in general, make purchases on their phone than women do, too.

And the trend continues for teens. According to the report, male teens shop online more than female teens — 86% of male teens said they shopped online, whereas 76% of teen girls said they did.

miserable_men on InstagramThis guy hates shopping.

For men, e-commerce is an easy solution. But in particular, e-commerce can permit people to buy things (like technology — which consumers want more than clothes anyway) without having to go into a store.

And mall stores that sell "things," instead of just clothing — like Sears and Radio Shack — have been on their death beds.

Interestingly enough, Sears chairman Eddie Lampert wrote a letter lambasting tech companies like Uber, Amazon, and Tesla for sending Sears into its downward spiral.

"Companies like Amazon were able to grow rapidly without having to collect sales tax, while traditional retail companies had the dual disadvantages of having to report profits and to collect sales tax from their customers," Lampert wrote. "The consequence? We are now seeing more and more retail stores shut down."

(Look no further than eerie photos of abandoned Sears stores for proof.)

To add insult to injury, men are shopping more on sites like Amazon than their female counterparts, according to BI Intelligence's data. The report notes that women often shop on "specialized and fashion-conscious sites." Additionally, more men used auction sites such as eBay (43% of men ages 18-34 said they used those sites; only 31% of women said that.)

Regardless of gender, however, a growing number of people, driven by millennials, engage in e-commerce. They made made up 46.6% of people surveyed who used their phones to make purchases. The shift is hurting malls that, unlike stores that can thrive on a direct-to-consumer basis, depend on foot traffic.

BI Intelligence

All of this comes on top of how malls are already clinging to life support; Fortune reported last year, citing Green Street Advisors, that approximately 300 malls would shutter over the course of ten years.

One reason for this decline is that mall anchor stores, like Nordstrom and Macy's, have been struggling. Nordstrom, with its rapidly growing off-price Rack store and its plan to be more promotional to rid itself of excess inventory, and Macy's, with its newly launched off-price Backstage, have been tarnishing their reputations as full-price retailers. And photos of abandoned Sears tell a very clear story: consumers don't want to shop there.

Meanwhile, Nordstrom recently reported that its online off-price store Nordstrom Rack's Haute Look, saw a 47% spike in sales in fiscal 2015, which signals that consumers don't want to pay full price, and that they want to shop online, not at malls.

Nordstrom's CFO Michael Koppel recently expressed that there can be additional expenses as the company attempts to gain more of the online retail market space.

"This business model has a high variable cost structure driven by fulfillment and marketing costs in addition to ongoing technology investments. With our increased investments to gain market share along with the changing business model, expenses in recent years have grown faster than sales," Koppel said in an earnings call.

The manufacturing industry is being revolutionized by the Internet of Things

John Greenough

Feb. 24, 2016, 10:15 AM

BI Estimated Annual Manufacturing IoT Investment

BI Intelligence

The Internet of Things (IoT) is changing business models, increasing output, and automating processes across a number of industries. But no other sector has been more impacted by this technological revolution than manufacturing.

Manufacturers across all areas —automotive, chemical, durable goods, electronics, etc. — have invested heavily in IoT devices, and they're already reaping the benefits. Manufacturers utilizing IoT solutions in 2014 saw an average 28.5% increase in revenues between 2013 and 2014, according to a TATA Consultancy Survey.

In this report, we examine the ways the IoT will impact the manufacturing sector. We include forecasts on device shipments, the investments made by manufacturers on IoT solutions, and we examine the return on investment that manufacturers are witnessing from their IoT solutions. Further, we look at the common IoT use cases in manufacturing, including asset tracking, control room consolidation, predictive maintenance, autonomous robots, augmented reality, and additive manufacturing.

Here are some of the key takeaways:

Investment in the IoT by manufacturers will translate to billions in spending. We estimate that global manufacturers will invest $70 billion on IoT solutions in 2020. That's up from $29 billion in 2015.
Manufacturers are currently using IoT solutions to track assets in their factories, consolidate their control rooms, and increase their analytics functionality through predictive maintenance. Many IoT solutions are still basic, but we expect manufacturers to eventually implement more complex technologies, such as autonomous robots and augmented reality (AR) tools.
There are four top barriers that will create challenges for manufacturers as they begin to upgrade to the IoT. These barriers include the increasing threat of a cyber attack, difficulty determining ROI, technical difficulty integrating the IoT into a factory, and reluctance to implement automation, which would result in job losses.

Onslaught of mega-ships to test US East and West Coast ports

Bill Mongelluzzo, Senior Editor | Feb 27, 2016 9:14AM EST

The major question facing carriers in the trans-Pacific trades this year isn’t how much cargo will move, but whether U.S. West and East Coast ports will be up to the challenge of handling the big ships carrying the goods.

For beneficial cargo owners, the message is that they must be nimble in their cargo routing, and they must have close working relationships with ocean carriers, trucking companies, warehouses and railroads, to ensure BCOs have the transportation capacity they need where and when they need it.

The coming year will be marked by major changes in supply chain logistics in the trans-Pacific trades. Carrier mergers have begun, with the Feb. 18 announcement of the merger between Cosco and China Ocean Shipping Co. The previously announced acquisition of APL parent NOL by CMA CGM is moving forward and should be completed in the second half of the year. South Korean carriers Hyundai Merchant Marine and Hanjin Shipping face government pressure to merge following another year of steep losses.

As these business relationships unfold, questions surround carrier participation in the four major vessel-sharing alliances. Significant restructuring is possible, involving at least the G6, Ocean Three and CKYHE alliances. Changes are unlikely in the 2M Alliance of Maersk Line and Mediterranean Shipping Co., so those two large carriers will focus mostly on service enhancements.

The long-awaited completion of the third set of locks at the Panama Canal is scheduled for May, although it will probably take several additional months before commercial changes in all-water services from Asia to the East Coast develop. The likely scenario will be to collapse two weekly services with ships capable of carrying 4,800 20-foot-equivalent units into one weekly service of ships of about 8,000-TEU capacity.

There are currently 25 all-water weekly services to the East Coast. BCOs, then, must ask whether East Coast ports, with their current infrastructure limitations, can handle these big ships efficiently.

The West Coast since late December has had a taste of what handling super-post-Panamax vessels is like. First, the 15,000-TEU Maersk Edmonton arrived in Los Angeles, followed four days later by the 18,000-TEU CMA CGM Benjamin Franklin. The latter vessel returned on Feb. 18 to Long Beach. The big ships also were being tested on calls to Oakland and Seattle-Tacoma. Although it’s not certain when regular weekly services by super-post-Panamax vessels will occur, it’s fair to assume carriers are testing these ships now because regular services will materialize in the next year or two.

Given these watershed developments, carriers, ports and BCOs are probably fortunate that 2015’s modest growth in cargo volume will continue this year. Total U.S. containerized imports increased 5.4 percent in 2015, to a record 20 million TEUs. Imports from Northeast Asia led the way, increasing 2.3 percent, with imports from Southeast Asia, the second-fastest-growing region, at 1.2 percent growth, according to Mario Moreno, senior economist for IHS Maritime & Trade, the group that also consists of JOC.com and PIERS.

The trade should anticipate much the same this year, with Moreno projecting a 5.5 percent increase in imports. As occurred last year, robust housing and automobile markets will generate much of the growth in imports, with furniture, other household goods, building materials for housing and automotive parts driving much of the growth.

Containerized exports declined about 2 percent in 2014 and again in 2015 because of the strong dollar, which makes U.S. products and commodities more costly, and weak demand among economically struggling trading partners such as China, Japan and most of the European nations.

Moreno is more optimistic this year, projecting export growth of about 4 percent as the trading partners show gradual recovery. Nevertheless, total exports aren’t expected to reach the peak year of 2013.

West Coast ports anticipated strong growth in January compared to January 2015 when they were crippled by congestion associated with coastwide longshore contract negotiations. The numbers were astounding. Los Angeles, the largest U.S. port, reported a 33 percent increase in total container volume, with imports up 41.6 percent and exports 1.5 percent higher. Long Beach, the second-largest U.S. port, reported an increase of 24.8 percent in total container volume, with imports up 30.3 percent and exports up 8.4 percent. Oakland reported a 38.5 percent increase in loaded containers, with imports exploding 75.8 percent and exports up 16.8 percent. The Northwest Seaport Alliance of Seattle and Tacoma reported a 25 percent increase in total international container volume, with imports up 33 percent and exports 16 percent higher.

Similar lofty percentage increases are likely in February because they will be compared to the congestion-plagued month of February 2015. March’s numbers will probably be down compared to March 2015, when the vessels that had been stuck at anchor outside of West Coast ports were finally unloaded. The port numbers should return to normal seasonal container traffic beginning in April.

Most East and Gulf Coast ports, by contrast, registered record growth in January-February 2015 because of cargo diversions from the West Coast. They are therefore expected to report modest growth in early 2016. As traffic flows return to normal this year, the Global Port Tracker published each month by the National Retail Association and Hackett Associates is projecting 4.5 percent growth in U.S. containerized imports in the first half of 2016.

BCOs, which had been enjoying some of the lowest rates ever in late 2015, could see some firming of freight rates this year. David Arsenault, president and CEO of the Americas at Hyundai Merchant Marine, told the Propeller Club of Southern California that it looks as if the relentless overcapacity that plagued the global trade lanes in recent years bottomed out last year. Carriers in 2015 took delivery of a record 214 container ships, with global capacity increasing 8.5 percent. Net capacity, after the scrapping of older ships, should increase marginally this year.

Carriers, meanwhile, have reported such large losses — an estimated $5 billion in 2015 — that they may have no choice but to decouple capacity from freight rates to stop the bleeding. “We can’t continue to do one good year followed by three bad years,” Arsenault said.

According to the Shanghai Containerized Freight Index, the spot rate for shipping a 40-foot container from Shanghai to the West Coast in December dropped to the ridiculous level of $766. The spot rate on the longer all-water routes to the East Coast was no better, at $1,448 per FEU.

Freight rates recovered somewhat in January and early February in anticipation of the quiet period during the Chinese New Year celebrations in Asia. The most recent spot rates were $1,388 per FEU to the West Coast and $2,466 to the East Coast.

West and East Coast ports in the months ahead must concentrate on expanding their physical infrastructure and improving cargo-handling processes in order to handle the cargo surges generated by mega-ships. On the West Coast, ports and terminal operators will be raising the height of their cranes to about 165 feet, or ordering new super-post-Panamax cranes to handle the biggest ships such as the Benjamin Franklin where containers are stacked 10 high on deck.

Some East Coast ports are deepening their harbors, while New York-New Jersey is raising the height of the Bayonne Bridge to allow passage underneath by the bigger ships. All major gateways must pay greater attention to their gate processes to avoid the long truck queues that ports on both coasts struggled with last year.

Saturday, February 27, 2016

Retailers still plan to open new stores in the year ahead despite the growth of online shopping

By Chloe Rigby

February 26, 2016 - 9:44 am

Retailers plan to open more stores in 2016, despite the growth of online shopping, a new study has found. Eight in 10 (83%) of more than 150 international retail brands questioned in property company CBRE’s seventh annual How active are retailers globally? said their plans to open more stores would not be affected by the growth of ecommerce. Almost a third (29%) of the brands, from Europe, the Americans, Asia Pacific, the Middle East and Africa, said they planned to expand in the UK.

Some 17% of those questioned said they planned to open more than 40 stores, while 67% envisage up to 20 new stores. Western Europe was a priority target, with 35% set to expand in Germany, and 33% in France. Then 27% planned to open stores in China in 2016, while a quarter looked to the US as a retail destination.

Rather than providing an alternative to store shopping, CBRE suggests, ecommerce supports the physical channel – and vice versa.

Mark Disney, executive director of CBRE Shopping Centre Development & Leasing, said: “The evidence from major shopping centres and the strongest high streets supports the findings with increased investment in physical stores sitting alongside growing online sales.

“Demand from retailers is stronger than for several years with a substantial number of global brands looking to expand in strategic locations or upgrade their stores to improve customer experience and showcase their brand. This comes in the form of new sites or existing stores being enlarged or upgraded to include further lines or collaborations that retailers may be pursuing. The stores need to support the range that can be found online, and vice versa.”

High streets (76%) and regional shopping malls (72%) were cited as the most popular formats for expansion, while a fifth of brands, mainly from the Americas and EMEA, said they planned to expand into travel hubs in 2016 for access to high footfall, highly frequented locations.

Mark Burlton, global executive, retail occupier team, EMEA, at CBRE said: “Despite the backdrop of economic uncertainty and the popularity of online shopping growing year on year, a physical store presence in key locations is still critical to the strength of a brand’s presence.

“Stores still need to create an emotional affinity with a shopper and customers still feel a need to go into store, physically touch a product and enjoy the feel-good factor associated with a particular brand experience. The store is integral to the shopping journey and can be used in a number of different ways, such as to click and collect, research of the product or brand or to test the product. It isn’t solely about the transactional side.”

Regulations poised to reduce driver ranks and trucking productivity

NTI estimates productivity losses due to “regulatory drag” to tally 15%.

Feb 26, 2016Sean Kilcarr | Fleet Owner

NTI's Leah Shaver noted that early retirements and drivers “wearing out” from the physical demands of the truck driving job are becoming bigger problems as well for the industry. (Photo by Sean Kilcarr/Fleet Owner)

The trucking industry is going to suffer a significant productivity hit from a variety current and on-the-horizon regulatory initiatives, with those same initiatives expected to cause a substantial “wash-out” within the truck driver labor pool as well.

In a conference call hosted by Stifel Financial Corp., Gordon Klemp – founder and president of the National Transportation Institute (NTI) – and Leah Shaver, NTI’s COO, said that while “regulatory drag” is an issue that’s “been around for a long time,” it’s impact on the industry is about to be felt acutely.

“ELDs [electronic logging devices] are here and speed limiters are on the horizon, withhair testing [for drug use] tending to grow in use,” said Klemp.

He interviewed fleets that implemented ELDs and said “they saw a 10% to 15% crunch on productivity almost instantly, though that is now down to 5%.”

The reason for the front-end productivity losses is that drivers initially don’t know how to use them properly while motor carriers spend time sorting out how to manage the technology and data as well.

“When we see them [ELDs] roll through industry, I think we’ll settle out to a 5% net loss in productivity,” Klemp noted.

The oft-delayed speed limiter rule will cost the industry another 3% to 5% in productivity, though that will vary quite a bit among fleets, which could be a problem.

“With hair testing, everyone we talk with says the same thing – it’s painful to start with,” Klemp noted. “They went from 5% to 8% rejection rates [for driver candidates testing positive in urine-based drug tests] to an 11.6% rejection rate. But then it dropped back down to 5%.”

One reason for that drop, Klemp speculated, is that candidates “self-select” themselves out. “But that [11.6% rejection rate] is higher than I would have ever thought and it will lower the labor pool by 5%.”

Add it all up and the industry is facing a 15% loss in productivity due to regulatory drag, “and it’s probably more when you look at the whole boat [of regulations] and not just the three we picked out,” Klemp stressed.

NTI’s Shaver, who previously worked for a largest Midwestern-based TL carrier for 14 years, added that early retirements and drivers “wearing out” from the physical demands of the job are becoming bigger problems as well.

“The industry workforce is peaking at the high end of age, and that’s not what we want in a tough job like truck driving,” she said. Right now, the largest cohort of the truck driving workforce – some 34.3% – is aged 45 to 54, with the second largest cohort aged 35 to 44 at 31.8% and 55 to 64 at 13.9%.

“Ultimately we know age is a problem right now and it will continue to be an issue,” Shaver stressed. “We are not recruiting our children and grandchildren to do this job. No longer want our children to work this hard and be away from home so much.”

Klemp added that ELDs are exacerbating the problem to a degree and many older drivers may simply quit rather than adapt to the new technology.

“We estimate that about a third of the 16% of drivers at or near retirement age might leave. Overall that’s 5% of the driver workforce,” he explained. “And it’s probably closer to 8% when you factor in many drivers not wanting ‘Big Brother’ in the cab.”

Klemp noted that most drivers that use the technology for 30 days end up liking it once they get used to it, but it’s getting drivers to stick with it that long that could be problematic from a workforce retention perspective.

“Many may go to carriers that are not using them, but by 2017, everyone must use them, so that option is running out,” he said.

Logistics: Value Networks