DC Velocity - September 2015

Coyote has also helped behind the scenes to support UPS’s capacity needs during holiday peak seasons, periods when demand goes on steroids and the pressure on UPS’s system is immense. During the 2013 peak, when bad weather and an avalanche of last-minute shipments from e-tailing giant Amazon.com gummed up its air operations, UPS paid dearly to reroute packages to truckload carriers for rush delivery. Chastened by the 2013 problems, UPS ramped up its operational spending for the 2014 peak, only to find that it overinvested for expected volumes that never materialized.

In January, Abney disclosed that the company would not meet its fourth-quarter earnings estimates due to the higher costs associated with the peak ramp-up. Abney also said at the time that UPS would implement “new pricing strategies” for the upcoming holiday cycle. That could mean the implementation of so-called surge pricing, similar to the system ride-sharing firm Uber employs during its peak demand periods. If so, Coyote’s skills and clout could allow UPS to push through surge pricing while keeping its linehaul rates in check, said Jett McCandless, founder and CEO of CarrierDirect LLC, a logistics consulting and sales company.

SHAKEOUT AHEAD?

The emergence of UPS is no small matter to brokers, who
are unaccustomed to a company this size. The $50 billion-
a-year brokerage business is composed mostly of small
companies, with just a handful of big players. McCandless
foresees transportation and brokerage becoming “agnos-
tic,” with technology being the key differentiator. As a
result, the next five years will witness major consolidation
as the smaller companies, lacking the technology and robust
carrier relationships, lose out to the large “one-stop shops”
and are either acquired or fold their tents, said McCandless.

However, this cycle will beget another phase in years six through 10, as big players effectively become too big to adequately serve a broad shipper base, McCandless said. New, smaller niche providers will then step into the breach, pick up the slack, and expand the number of providers in the market, he predicted.

—Mark Solomon go figure …

83%

The percentage of survey respondents who said they have begun to use the Internet of Things (IoT) to improve their supply chain operations, despite concerns about the technology’s costs.

SOURCE: ZEBRA TECHNOLOGIES CORP.

oversight

In the news story “‘State of Logistics Report’: U.S. business logistics costs hit $1.45 trillion in 2014” (July 2015), the statistics on the growth of rail intermodal and carload traffic were incorrect. Rail intermodal volumes rose 5. 2 percent and rail carloads rose 3. 9 percent in 2014 compared with 2013.

Doug Johnston has been promoted to senior vice president, customer solutions and operations development, at Saddle Creek Logistics Services. … Eastern Connection, a regional transportation and logistics service provider on the East Coast, has named

Lindsay Flynn as its direc-
tor of operations engineering. … AIM,
the international industry association for
automatic identification and data cap-
ture, has appointed Donald H. Ferguson,
president of Lyngsoe Systems Ltd., to
its board of directors. … Southeastern
Freight Lines, a provider of regional less-than-truck-
load transportation services, has promoted Richard
Slater to service center manager in Charlotte, N.C.
… Randall Manufacturing, which makes tempera-
ture-zoning products, has appointed Greg
Jones product manager of its transporta-
tion and access product lines. … Systems
integrator Fortna has promoted John A.

White III to chief executive officer and president. Former CEO Peter Counihan will retain his position as chairman of the board. … Jim Robertson has joined the advisory firm China Centric Associates as senior adviser–business development. … Dan Nasato has been appointed vice president–international operations at the conveyor company Dorner Manufacturing Corp.