Report says revenues for fleets are growing
The latest review of the logistics industry has some good news for shippers, truckers and third-party logistics suppliers alike. Compiled by Cass Information Systems (CIS), a subsidiary of St. Louis-based Cass Commercial Corp., and Colorado-based global logistics supplier ProLogis, the 11th annual "State of Logistics Report" shows logistics costs for shippers are dropping, while revenue for truckers and third-party firms is growing.
According to Robert V. Delaney, a vp at CIS, U.S. business logistics costs reached 9.9% of the country's GDP last year, or $921 billion. By extrapolation, some $552.6 billion was spent on transportation - with trucking accounting for some $453 billion, or 82%, of that total, according to the report's calculations.
In his presentation at the National Press Club last month, Delaney said third-party logistics firms did well, too, watching their business grow 16.5% overall last year, to $45.3 billion. Within the third-party logistics spectrum, domestic transportation management and dedicated contract carriage grew 18%, warehousing services grew 16%, and non-asset based international transportation management grew 11%.
How can logistics costs be declining for shippers while revenues grow for truckers and third-party firms? Delaney pointed out two reasons: lower inventory investment and greater use of the Internet.
The inventory-to-sales ratio dropped last year from 1.38 months of supply to 1.32 months - the lowest figure yet recorded by the annual study, even as pundits and prognosticators worried about shippers stockpiling goods in the face of Y2K.
Even as inventories increased 4.6% in 1999, sales climbed twice as fast - by 9.2% - thereby reducing inventory to record low levels, said Delaney.
The advent of the Internet and the corresponding growth of e-commerce in the logistics world also aided in decreasing costs to shippers, giving them greater visibility of the supply chain and, correspondingly, greater visibility of demand and replenishment, so they can better manage transportation needs.
However, he added that how the Internet is used in relation to existing customer relationships will really determine its effect on transportation and logistics services in the years to come.
More than 26% (11,000) of the 43,000 trucks and buses that were inspected during the Commercial Vehicle Safety Alliance (CVSA) International Roadcheck 2000 last month were placed out of service. In addition, nearly half (20,781) received out-of-service violations.
Brake-related problems accounted for more than 51% (10,657) of the out-of-service violations issued during the June 6-8 inspection blitz, which was conducted throughout the U.S., Canada and Mexico. As for drivers, 1,852 hours-of-service violations were handed out, or 46% of the 4,014 driver out-of-service violations issued.
The good news is that more than 25,000 vehicles were found free of critical safety defects.
Representing 8.5 million accident-free miles, three drivers were honored by Ryder System. Sam Hill received the "Driver of the Year" award for the Vertical Industries area; he drives for BellSouth out of Theodore Ala. Kenneth Ryburn received the "Driver of the Year" award for the Transportation/Dedicated Contract Carriage area; he drives for Pepsi-Cola Bottling Group, Marion, Va. The "National Driver of the Year" designation went to Santos Flores, who drives for Texas-based Ryder lesee Oneta Co.
G.I. Trucking has instituted a new truck tracking and monitoring safety program in three of its Western and Midwestern locations. Safety vehicles equipped with radar systems will spot-check company truck speeds, which are limited to 55 mph.
Roadway Express has expanded operations in Mexico by opening three new terminals, including one at the El Paso, Tex./Juarez, Mexico border crossing.
Gene R. Tyndall has been named executive vp-global markets and solutions for Ryder System.
Stephen H. Fraser has been appointed president and CEO of May Logistics Services.
Allen R. Wilkie has been promoted vp and operations controller for Delco Remy International.
Don Sitter has been promoted to director of aftermarket engineering for Dana Corp.'s Clevite Engine Parts.
Accuride announced the appointment of Larry Taylor to the position of vp-sales and marketing for its heavy vehicle operations.
Raymond B. Greer, exec. vp and general manager of Global Markets and Solutions of Ryder System, has been named to the board of directors of PNV Inc.
The American Trucking Assns. (ATA) has named Richard Curtis executive director of the National Accounting & Finance Council.
Kenworth Truck has named Jim Strong medium-duty segment manager; Arlen Savitt has been promoted to director of fleet sales; and Deborah Seaney becomes marketing communications manager.
Holland Hitch has announced that Scott W. Fowler has been hired as SBU director-fifth wheels & king pins.
The National Transportation Exchange has announced the appointment of Steven Ford to director of corporate communications.
Mark D. Slingluff has joined Hendrickson International Trailer Suspension Systems as manager of communications.
Richard C. Cilento Jr. has been appointed to the position of president and CEO of FuelQuest Inc.
Samuel K. Skinner has been elected to the position of president and CEO of USFreightways.
James E. Coles, president of Western Peterbilt, was named 2000 Truck Dealer of the Year at the American Truck Dealers convention.
Tony Chrestman has been named senior vp of field operations for Ruan Transport Corp.
Stan Graff has been named senior program manager-transportation for Vistar Datacom.
Charles S. Fleischmann has been named director of business development for Kinetic Computer.
Express-1 has named Matt Gustafson sales manager; Laura Drury marketing director; and Bob Tracey safety director.
Patch Rubber Co. has named Jeff Young sales manager for tire repair and retread products.