New Member of AWI Advisory Board

AWI (Associated Warehouses Inc.) is pleased to announce that Mark A. Andrews, Vice President Sales & Business Development at Bonded Logistics, Inc., in Charlotte, NC has joined the Advisory Board.

The AWI advisory board is made up of executives from several of the companies who are part of the AWI logistic services network. This group provides leadership and insight on the strategic direction of the organization and service offerings.

Materials handling: U.S. Department of Agriculture seeks public comment on potential changes to wood packaging regulations

The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) is seeking information from the public on potential approaches for dealing with the interstate movement of wood packaging material (WPM). WPM includes crates, dunnage, wooden spools, pallets and packing blocks used in domestic trade.

Currently, APHIS regulates the movement of logs, lumber and other unmanufactured wood articles due to the presence of wood pests such as the Asian long-horned beetle (ALB) and the emerald ash borer (EAB) within specific areas of the United States. The artificial spread of these pests has been linked to the domestic movement of WPM, and poses a potentially serious threat to U.S. agriculture and forests. APHIS is looking at ways to protect the environment without placing an unjustified strain on domestic commerce and shipping requirements.

“We recognize this is an area that requires additional information,” said Andrea McNally, assistant director of public affairs at the APHIS. “We are in the initial stages of a fact finding mission that will help the APHIS determine whether or not to generate a proposal to modify the current regulations.”

Wood packaging materials are used to ship nearly every type of commodity or product shipped domestically, including the 1.2 billion wooden pallets that are currently in circulation in the United States. Nearly 93% of all goods move on pallets, according to the National Wooden Pallet & Container Association (NWPCA), the trade association that represents the pallet industry.

International commerce is already regulated. In 2004 APHIS adopted ISPM 15, an International Plant and Phytosanitary Standard that requires all imported wood packaging to be fumigated or heat-treated before it is admitted into the United States.

One option under consideration is to apply that same regulation to domestic commerce, a move that is supported by industry groups like the NWPCA, according to Bruce Scholnick, president of NWPCA. “We believe that some kind of regulation is inevitable and it’s preferable to the state-by-state, piecemeal approach in place now,” Scholnick said. “It’s confusing to pallet users and is unfair to wood packaging companies in quarantine states.”

Read the rest of the logisticsmgmt.com 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.

ISM: Non-Manufacturing Continues Upward Climb

It is highly likely that signs of growth and possibly economic recovery will be visible by the end of this year, according to the results of the latest non-manufacturing industry survey by the Institute for Supply Management (ISM).

The ISM has been making such a prediction for some time now, and the report on business activity in the non-manufacturing sector in June indicate the economy is definitely headed in that direction, said Anthony Nieves, chair of ISM’s non-manufacturing business survey committee.

“The report is encouraging,” he said.

Overall, the non-manufacturing index went up three percentage points in June to 44 percent. Technically, anything under 50 percent is considered to be “contracting,” but Nieves said the trend over the last few months has been a positive one, indicating that the index is creeping steadily upward, indicating a gradual improvement in the overall non-manufacturing sector.

“I think we’re seeing the signs of the leveling off,” he said.

Nieves said he was especially encouraged by the business activity and new orders indexes. Business activity leapt up 7.4 percentage points to 49.8 percent, while new orders went up 4.2 points to 48.6 percent.

Nieves said he will be watching both indices over the next few months, especially new orders, to verify that the growth trend overall is continuing.

The employment index, which typically lags behind everything else, also took a jump in June. According to the report, it went up 4.4 points to 43.4 percent, but despite this increase, Nieves said employment tends to be the slowest to react to changes, even positive ones, in the overall sector.

Read the rest of the scmr.com article here.

Transportation funding: Highway Trust Fund is again in need of more capital

WASHINGTON—A lack of capital for the Highway Trust Fund (HTF) is looming, with up to $7 billion to keep it solvent through the remainder of 2009, according to various reports.

The HTF is the federal government’s primary source for financing highway, bridge, and transit projects, and it is largely funded by the motor fuel federal tax, which is 18.4 cents per gallon for gasoline and 24.4 cents for diesel and has not been raised since 1993. One main reason for the HTF’s dwindling financial resources is that Americans are driving fewer miles, as evidenced by Americans driving 90 million fewer miles year-over-year in fiscal 2008.

California Senator Barbara Boxer said at a hearing yesterday that the HTF is estimated to have insufficient cash by August 2009 to make good on prior commitments, with $5-to-$7 billion needed.

She added that White House officials have estimated that an additional $8-to$10 billion is needed to pay immediate cash needs of the HTF program is to be maintained at current funding levels through the end of fiscal 2010, which is when Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), the current highway, transit, and highway safety authorization, expires.

“The administration is working closely with Congress to solve this difficult problem and ensure that states have the resources they need to maintain our roads and highways,” Department of Transportation Spokeswoman Jill Zuckman told the Associated Press.

Read the rest of the logisticsmgmt.com artilce here.