newsworthy
alliances
Old Dominion announces 4.9%
For a while, it appeared that 6. 9 percent would be the benchmark level for
tariff rate increases imposed by the nation’s largest less-than-truckload
(LTL) carriers. But that is no longer the case.
Old Dominion Freight Line Inc., viewed by many as the gold standard of
LTL carriers, came to market in late July with a 4.9-percent general rate
increase, dramatically undercutting the 6.9-percent increases imposed by
FedEx Freight, the LTL unit of FedEx Corp.; Con-way Freight, the LTL unit
of Con-way Inc.; YRC Freight; and ABF Freight System Inc. A month earlier, UPS Freight, UPS Inc.’s LTL unit, announced a 5.9-percent increase on
its business that does not move under contract.
This marks the second straight year that Thomasville, N.C.-based Old
Dominion has imposed a 4.9-percent increase on non-contract shipments.
And as it did in 2011, Old Dominion waited late in the 2012 pricing cycle
to make its move.
Unlike many of its rivals, Old Dominion did not dramatically lower its
rates during the 2006–2010 freight recession. In so doing, it chose not to
become deeply enmeshed in the fierce LTL rate wars largely aimed at driving YRC, then the market leader, out of business through underpricing.
As a result, Old Dominion emerged from the recession in much better
shape than its rivals and could afford to take smaller increases to make up
lost ground when the trucking upturn commenced.
In the past two years, LTL carriers in general have rationalized their pricing strategies and have either shed or turned away unprofitable freight. Rate
increases are, for the most part, sticking, and yields are picking up to levels
not seen in years. Truckers have also abandoned the idea they could drive
YRC out of business through predatory pricing. If anything, the rate wars
only served to damage the carriers’ bottom lines, and they did not push
YRC out of the game. ;
—M.S.
USPS to rebid FedEx air contract
The U.S. Postal Service (USPS) has informed FedEx Corp. that it intends to
rebid a large air services contract when it comes up for renewal in
September 2013.
The contract, first awarded in the fall of 2001, calls for FedEx to provide
domestic airport-to-airport delivery of first-class mail, Express Mail, and
Priority Mail. The agreement has been in place for 11 years.
The contract generates about $1 billion in annual revenue for Memphis-based FedEx, equal to about 2. 5 percent of the company’s $43 billion in
total annual revenue. It is also USPS’s biggest air transport contract.
In its annual 10-K filing with the Securities and Exchange Commission,
FedEx said it has been told the post office “intends to solicit proposals for the
provision of these services upon the expiration of the current agreement.”
In a statement, USPS said that while no decision had been made regarding
the current contract, the agency is “evaluating all of its options” to maintain
long-term financial stability and still meet customer commitments. ;
—M.S.
Robert Transport has successfully
implemented C3 Reservations, an
online dock scheduling system, to
manage all deliveries and customer
pickups at its Mississauga, Ontario,
location. … Alnatura, a German-based producer of bio products, has
commissioned Swisslog to design
and implement a fully automated
high-bay warehouse. … Canadian
Blood Services, a national organization that manages the blood supply
in all Canadian provinces and territories except Quebec, has implemented Descartes’ cloud-based
Transportation Management solution. … Asda Stores Ltd., one of the
United Kingdom’s leading multi-cat-egory retailers, has selected multiple
components from the Manhattan
SCOPE supply chain solution portfolio to support the growth of its general merchandise e-commerce operation, Asda Direct. … CaroTrans, a
global non-vessel operating common carrier and ocean freight consolidator, has expanded its partnership with Craft Multimodal in the
East Coast of South America trade
region. … Cold Zone Trinidad and
Tobago has implemented Accellos’
One Enterprise 3PL software. …
Wholesale distribution and marketing company Metcash Ltd. is deploying the Retalix Yard Management,
Dock Scheduling, and Transportation
Web Portal solutions in its five
mega-distribution centers across
Australia. … The WorldWide
Alliance (WWA) has joined Inttra’s
e-commerce platform for ocean shipping. … Swift Transportation Co.
has entered into a contract with I.D.
Systems to deploy the company’s
VeriWise transportation asset management system on domestic intermodal containers. … UPS has selected Vitronic’s 200 Vicam high-per-formance line scan cameras to
increase its package sorting capacity
at Cologne/Bonn Airport.
