Green logistics: Industry expert cites ways of going green and cutting costs at the same time

WALTHAM, Mass.-It's possible to save money and the environment at the same time, and if you need proof, just look at the Green Machine.

That was the message Jack Ampuja, president of the consulting firm Supply Chain Optimizers, and executive director of the Center for Supply Chain Excellence at Niagara University in Lewiston, N.Y., was trying to get across at a Council of Supply Chain Management Professionals (CSCMP) New England Round Table event in Waltham, Mass. Tuesday night.

The event featured, among other things, a description of a new type of tractor for hauling freight, which Ampuja dubbed the "Green Machine" because of its environmentally-friendly design.

The tractor, he said, was conceived and built by a number of former trucking industry workers and veterans in Michigan. The tractor, Ampuja said, contains a long list of "green" enhancements, including nitrogen-filled tires (ordinary air escapes through the rubber over time), carbon-fiber springs, and a special hydrogen injector system for the engine.

Right now, companies like office furniture maker Hayworth, along with Pepsi, Anheuser-Busch and other companies, are expecting to save thousands of gallons of fuel per truck per year, and cut greenhouse gas emissions by amounts measured in metric tons.

But Ampuja was selling a point, not a truck: for all the cutting-edge improvements and patented design, Ampuja said the tractor is built out of off-the-shelf parts, and therefore costs the same as any other tractor on the market, so using them will not cost extra. If anything, Ampuja said, using them will save money long-term.

And that, Ampuja told the packed room, is the reality of the green movement in the corporate world.

"They (cutting costs and helping the environment) are not at odds," he said. "They complement each other."

Ampuja cited a recent study by the Aberdeen Group which found that leading companies are "greening up" by, among other things, redesigning logistics systems and redesigning packaging.

In addition to technological advances, Ampuja challenged the audience of supply chain managers, consultants and vendors to look to their own operations for other ways to go green and save money. Network optimization applications, he said, will be another major component of a green plan in the future, especially with oil prices expected to rise.

Read the rest of the logisticsmgmt.com article here.

As a company, part of our mission is to support our local communities. One of the organizations that we continue to support is the Alzheimer’s Association. The Orange County Alzheimer’s Association is having their annual Memory Walk on Saturday, October 17th at 10am on the campus of Cal State University of Fullerton. The Arizona Alzheimer’s Association is having their annual Memory walk on Saturday, October 24th in West Valley at the Beardsley Recreation Center at 9am.



The States Logistics “teams” for CA and AZ have been created on Memory Walk web site, where you can join the team and we can all walk as a group – or just support your fellow co-workers. Click the following link to go directly to the States Logistics Team Pages for CA and AZ:



http://memorywalk.kintera.org/csuf/stateslogistics



http://memorywalk2009.kintera.org/westvalley/stateslogistics



In addition to walking, we have also reached out to the Alzheimer’s Association about volunteer opportunities on the day of the walk. For more information contact the States Logistics Human Resources Department.



The States Logistics family has participated in the Memory Walk for the past several years. It is a great opportunity to support a worthy cause … get in some light exercise … and spend a couple of hours with family and friends.

New Study Highlights Role of Third-Party Logistics Providers in Helping Shippers Adapt to Economic Challenges

The fourteenth Annual Third Party Logistics (3PL) Study examining the current global market for logistics outsourcing was recently released. The study surveyed shippers and logistics service providers in North America, Europe, Asia Pacific and Latin America. Key findings included:

* The economic downturn has created significant challenges for both shippers and third-party logistics providers (3PLs) – 82% of shippers are employing cost-cutting tactics and 60% are rethinking their supply chains and relationships with 3PLs
* 88% of shippers feel that IT-based logistics services are important, but only 42% are satisfied with the capabilities of their provider – as a result of this IT capability gap, shipper respondents reported a lack of the key performance indicators, alerts and visibility required for an adaptive supply chain and 3PLs reported similar difficulties in getting the data and commitment they need from shippers
* There are significant differences between how 3PLs evaluate their role in the supply chain and how they are viewed by shippers – 59% of shippers feel their use of 3PLs has a positive effect on customer service compared to 88% of 3PL respondents
* Shipper respondents devote an average of between 47% (in North America) and 66% (in Europe) of their total logistics expenditures to outsourcing and this is expected to increase in the next five years.

“Shipper-3PL relationships are being impacted significantly by the prevailing uncertainty and economic volatility in global markets,” said Dr. C. John Langley Jr., Professor of Supply Chain Management, Georgia Institute of Technology. “It is very important for 3PLs to mitigate or reduce any financial risk or service level impact that this may cause.”

Economic uncertainty and the use of 3PLs
Economic volatility has challenged shippers and 3PLs alike to contend with factors such as unpredictable demand, instability in fuel costs and currency valuation, and excess inventory. In response, not only are shippers attempting to cut costs, 77% are also seeking to improve forecasting and inventory management.

Cost reduction and improved reliability in services are the main factors likely to increase shipper respondents’ use of 3PLs. This includes converting fixed to variable costs (59%), expanding to new markets or offering new products (56%), and restructuring the supply chain network to improve financial performance (48%).


Read the rest of the mhia.org article here.

Why 3PLs need to build their brand

Over the past several years, the global third party logistics (3PL) industry has changed dramatically. While the demand for 3PL services has grown steadily, the major logistics service providers have expanded their geographical reach and broadened their service offerings. At the same time, the structure of the industry has changed not only through mergers and acquisitions, but also through new market entry by many companies, including some funded by private equity investors. 3PL company reorganizations and name changes have become commonplace.

These changes have fostered a degree of buyer confusion in the marketplace, and many large 3PLs fear a possible “commoditization” of their services in the eyes of those who currently buy their services or are considering doing so. If this is indeed occurring, existing and potential customers will become increasingly indifferent when choosing between logistics service providers. And this, in turn, will intensify the price compression pressures that already plague the 3PL industry.

A key question that needs to be asked here is: What are executives of those 3PL companies doing in response to these market developments? Specifically, what steps have large 3PLs taken in recent years to differentiate their service offerings in the marketplace while strengthening their brands? Further, is there more that those executives should be doing in those areas?

This article addresses the typical steps that companies should take in building, refining, and strengthening their brands—and in particular examines recent attempts by major 3PLs to do so. Branding literature forms the basis for discussion of the general case, and the branding steps taken by large 3PLs were documented through data generated during 2006 and 2007 in surveys of the CEOs of major 3PLs operating in three geographic regions: North America, Europe, and the Asia-Pacific region. (For more on the surveys, see accompanying sidebar). We conclude with suggestions for 3PL industry executives concerning their future branding efforts—and the potential positive implications of these efforts on the buyers of these services.

Read the rest of the scmr.com article here.

Transportation infrastructure: Funding options for next surface transportation authorization presented at House hearing

At a Ways and Means subcommittee hearing last week the top two members of the House Transportation and Infrastructure Committee—Chairman James L. Oberstar (D-Minn.) and Subcommittee Chairman Peter A. DeFazio (R-Ore.) presented their options for the lack of capital in the Highway Trust Fund (HTF), as well as recommendations for their recently-introduced six-year, $500 billion surface transportation authorization bill, the Surface Transportation Authorization Act of 2009.

This hearing came at a time when there are many questions about how to keep the HTF solvent and how to finance the new legislation.

Among the measures presented by Oberstar and DeFazio for funding the next surface transportation authorization were:

* restoring the HTF for emergency relief, vehicle safety research, and foregone interest;

* issuing $60 billion of 10-year Treasury bonds to finance increases in funding provided during the first several years of the bill, which would be repaid in fiscal year 2012 with revenue from the HTF and be retired in 10 years;

* requiring fuel tax exemptions to be reimbursed from the United States General Treasury Fund;

* increase the per barrel fee on crude oil and imported gasoline and diesel;

* instituting a transaction tax on speculative trading of crude oil futures;

* the implementation of other user fees like an increase in the Heavy Vehicle Use Tax, vehicle registration fees, and container fees, which would finance freight related infrastructure improvements (this would be comprised of a $10 fee on every TEU (twenty-foot equivalent unit) container moving through a U.S. port and raise $3 billion over six years;

* a freight waybill tax that would act as a sales tax on freight shipping costs, with a 0.1 percent tax on truck freight waybills that would raise $620 million per year and a similar tax on waybills for all transportation modes that would raise $740 million annually; and

* a transition from a gas and diesel tax to a vehicle miles traveled (VMT) fee system that charges users for each mile driven.

“There are many options for financing the Surface Transportation Authorization Act of 2009,” said Oberstar. “None will be popular. However, without new revenues, our highway, highway safety, and public transit programs face enormous cuts at a time when the nation’s surface transportation network requires a substantial increase in investment just to maintain current standards. By making this investment, we will transform the future of surface transportation in the United States.”

Read the rest of the logisticsmgmt.com article here.

Trucking news: Transport Capital Partners survey points to heightened future expectations for trucking market

A recent quarterly survey from Transport Capital Partners indicates that expectations for trucking carriers are lifting across several key metrics.

These metrics, according to TCP, include freight volumes, freight rates and credit, among others.

In terms of freight volumes, TCP found that expectations for increases over the next year rose up to 37 percent in the second quarter, a sharp increase from 17 percent last November, as well as a 6 percent bump from the first quarter’s 21 percent.

Freight rates also appear to be stabilizing, according to the survey, with 54 percent of respondents stating they expect rates to remain the same over the next 12 months, compared to 30 percent in the first quarter. Meanwhile those respondents that expected rates to decrease fell to 29 percent in the second quarter from 58 percent in the first quarter.

“Earlier in the year, we were wondering when the other shoe was going to drop, due to many factors like a slow fourth quarter and a new White House, and people were somewhat scared,” said Lana Batts, a partner at TCP. “Now, people have reached the conclusion that we will get through this, but it will be different, and ‘normal’ is the new normal.”

Batts added that in the trucking industry there is a sense the worst may be over, although it will take a while, given that freight volumes are still sluggish. But at the same time, most carriers are not expecting a major future decrease either.

With more respondents now indicating they expect freight rates to remain the same compared to February, when more expected a decrease in rates, it stands to reason that the trucking market is one in which carriers have stripped away a significant amount of capacity and are competing fiercely for whatever freight they can move.

Batts maintains that the trucking industry still has too much capacity, and rates would be going up has more capacity already been removed.

“Normally when you have this kind of dramatic drop in tonnage and the supply and demand drop in rates, you see a lot of carriers go out of business,” Batts said. “And while more carriers left the business during the fourth quarter of 2008 and the first quarter of 2009, it was not anywhere near where we thought it would be. The reason more carriers have not left the market is because carrier’s lenders were not pulling the plug for non-payment of trucks, because the price of used equipment has dropped so dramatically that lenders are willing to have truckers make every other payment, as long as they don’t get too far behind.”

Read the rest of the logisticsmgmt.com article here.

States Logistics Services’ New Warehouse to Achieve LEED Silver Certification

By Tiffany Beffel, LEED AP

Known by its customers as one of the best providers of third-party logistics services, States Logistics Services, Inc. has grown to accommodate more than 100 customers and over two million square feet of warehouse space company-wide. Since the company’s inception, the vision to provide outstanding services to a wide variety of industries in Southern California and Arizona has expanded to include a significant focus on sustainability opportunities that reduce the impact of the company on the environment. Their vision of sustainability is employed in daily operations and procedures, and has expanded to include environmentally-conscious building development. The commitment to green building is showcased in their first LEED registered facility, which is anticipated to achieve Silver level certification through the U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) Rating System for New Construction.

States Logistics Services’ new sustainable facility provides office and warehouse space to serve the growing warehousing, transportation, and packaging needs of Arizona. The 417,000 square foot facility has multiple environmentally-responsible facets including design, construction, and operations. Green operations include an extensive corporate recycling program, buying regional products and materials to support local businesses. and raising sustainability consciousness within the staff.

As a major supplier of packaging services, States Logistics Services, Inc. recognizes the benefits of reducing waste sent to landfills and reducing transportation of products and materials. This is one of the company values that led to the use of building products and materials with recycled content sourced from local providers. Steel, a material having high post-consumer and pre-consumer recycled content, was used extensively for the skin and structure. It enabled long roof spans which were needed for the open floor plan. Additional specified materials having recycled content include miscellaneous metal frames and doors and acoustical ceiling tile made from old ceiling tiles and mineral fibers.

Click to read the rest of the States Logistics warehouse article.