Tighter air security will need a deft touch to avoid economic harm
In August 2010, the United States will require 100 percent of cargo shipped on passenger aircraft to be screened by security personnel, machines, or specially trained dogs.
IHS Global Insight Inc. is a leading consulting company providing comprehen- sive economic information and forecasts on coun- tries, regions, and industries with particular expert- ise in global trade and transportation. IHS Global Insight serves more than 3,800 clients in industry, finance, and government through offices in 13 countries covering North and South America, Europe, Africa, The Middle East, and Asia.
In August 2010, the United States will require 100 percent of cargo shipped on passenger aircraft to be screened by security personnel, machines, or specially trained dogs. That requirement, mandated by the 9/11 Commission Recommendations Act of 2007, could have a substantial economic impact on shippers, carriers, airfreight forwarders, and other industry stakeholders if it is not handled properly.
The agency charged with screening and inspecting air cargo is the Transportation Security Administration (TSA). After the terrorist attacks on September 11, 2001, the TSA focused its efforts on passenger screening; cargo carried on passenger aircraft ("belly" cargo) and all-cargo carriers went largely unnoticed for some time. Now the agency has been ordered to devote more of its efforts to securing commercial aviation.
Article Figures
[Figure 1] Value of U.S. merchandise trade by air: 2000-2008Enlarge this image
There is no question that there is a need for aircraft of all types to be protected from potential attack. What remains uncertain is how successful those efforts will be, and what economic effect the screening initiative will have on the air cargo industry and its customers.
Potential consequences
Globally, air freight represents 3.72 percent of all shipment units and comprises about 0.4 percent of world gross domestic product (GDP). Within the United States, air cargo represents just 1 percent of all freight volume yet it accounts for some 25 percent of the total value of U.S. freight across all modes of transportation. (See Figure 1.)
Getting cargo security right is critically important: by providing same-day, next-day, and just-in-time deliveries, air cargo plays an invaluable role in the operation of today's lean supply chains. A week-long disruption at John F. Kennedy International Airport in New York, for instance, would deliver a severe blow to all forms of aviation as well as to the U.S. and global economies.
Accordingly, the rollout of a stricter security system must be designed and managed to diminish any chance of unintended economic harm. This will be challenging for several reasons. For one thing, the augmented screening requirements come during a period of economic uncertainty. In 2008, the industry suffered horribly as airfreight volumes fell by as much as 25 percent on some routes. There have been encouraging signs of growth since November 2009, but that improvement is not likely to continue for long. In fact, most forecasts for airfreight shipment volumes for the coming year are flat, due in part to expectations that global consumer spending will be stagnant.
For another, implementation of new procedures almost always leads to "hiccups" in any system, and the introduction of more restrictive security mandates is likely to be no exception. The resulting inefficiencies may delay shipments, causing substantial financial losses for air carriers and higher costs for shippers.
Even a small disruption in airfreight movements could have a notable impact. IHS Global Insight's analysis shows that a disruption of only 1 percent in total industry output in the United States would result in the loss of approximately 1,250 jobs directly tied to air cargo shipping, and 3,851 in total. Ultimately, 100-percent screening could tip the competitive landscape in favor of the bigger players in the airfreight industry, because the larger operators have more infrastructure, such as aircraft and crews, in place than do their smaller competitors. This means they are better equipped to handle the delays that may result from increased screening.
Government-industry cooperation
One way the U.S. government hopes to mitigate any harm to the nation's commerce is by bestowing more funding on the TSA. Thanks to a budget infusion of US $56.3 billion, the transportation security agency is planning to increase its staff by 5,000 and install more high-tech screening equipment. This increased funding and staffing should give the TSA most, if not all, of the resources it needs to meet the 100-percent screening requirement.
Although the airline industry has worked alongside the U.S. government to keep flying safe for both passengers and freight, achieving smooth implementation of the additional cargo screening measures will require even closer cooperation. To avoid potential disruptions to commerce, the industry must work together with legislators to help them understand the measures' potential effects on operations.
All things considered, air shipment offers a safe, consistent, and rapid option for the movement of goods worldwide. Still, the airfreight system must operate efficiently if it is to keep airlines and other air cargo players afloat in the current tough environment. The only way to achieve that is by ensuring a thorough but efficient detection process that maintains the flow of goods, not just in the United States but around the globe.
The venture-backed fleet telematics technology provider Platform Science will acquire a suite of “global transportation telematics business units” from supply chain technology provider Trimble Inc., the firms said Sunday.
Trimble's other core transportation business units — Enterprise, Maps, Vusion and Transporeon — are not included in the proposed transaction and will remain part of Trimble's Transportation & Logistics segment, with a continued focus on priority growth areas following completion of the proposed transaction.
Terms of the deal were not disclosed but as part of this agreement, Colorado-based Trimble will become a shareholder in Platform Science's expanded business. Specifically, Trimble will have a 32.5% stake in the newly expanded global Platform Science business and will receive a Platform Science board seat. The company joins C.R. England, Cummins, Daimler Truck, PACCAR, Prologis, RyderVentures, and Schneider as a key strategic investor in Platform Science along with financial investors 8VC, Activant Capital, BDT & MSD Partners, Softbank, and NewRoad Capital Partners.
According to San Diego-based Platform Science, the proposed transaction aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings.
From Trimble customers’ point of view, they will continue to enjoy the benefits of their Trimble solutions, with the added flexibility of the Virtual Vehicle platform from Platform Science. That means Virtual Vehicle-enabled fleets will receive access to the Virtual Vehicle Marketplace, offering hundreds of new and expanded applications, software, and solution providers focused on innovating and improving drivers' quality of life and fleet performance.
Meanwhile, Platform Science customers will enjoy the added choice of Trimble's remaining portfolio of transportation solutions which will be available on the Virtual Vehicle platform, the partners said.
"We believe combining our global transportation telematics portfolio with Platform Science's will further advance fleet mobility and provide our customers with a broader portfolio of solutions to solve industry problems," Rob Painter, president and CEO of Trimble, said in a release. "Increased collaboration between the new Platform Science business and Trimble's remaining transportation businesses will enhance our ability to provide positive outcomes for our global customers of commercial mapping, transportation management, freight procurement, and visibility solutions. This deal will result in significant synergies along with tremendous opportunities for employees to continue to grow in a more-competitive business."
The acquisition comes just five months after Platform Science raised $125 million in growth capital from some of the biggest names in freight trucking, saying the money would help accelerate innovation in the commercial transportation sector.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
Economic activity in the logistics industry expanded in August, though growth slowed slightly from July, according to the most recent Logistics Manager’s Index report (LMI), released this week.
The August LMI registered 56.4, down from July’s reading of 56.6 but consistent with readings over the past four months. The August reading represents nine straight months of growth across the logistics industry.
The LMI is a monthly gauge of economic activity across warehousing, transportation, and logistics markets. An LMI above 50 indicates expansion, and a reading below 50 indicates contraction.
Inventory levels saw a marked change in August, increasing more than six points compared to July and breaking a three-month streak of contraction. The LMI researchers said this suggests that after running inventories down, companies are now building them back up in anticipation of fourth-quarter demand. It also represents a return to more typical growth patterns following the accelerated demand for logistics services during the Covid-19 pandemic and the lows of the recent freight recession.
“This suggests a return to traditional patterns of seasonality that we have not seen since pre-COVID,” the researchers wrote in the monthly LMI report, published Tuesday, adding that the buildup is somewhat tempered by increases in warehousing capacity and transportation capacity.
The LMI report is based on a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
That hiring surge marks a significant jump in relation to the company’s nearly 17,000 current employees across North America, adding 21% more workers.
That increase is necessary because U.S. holiday sales in 2023 increased 3.9% year-over-year as consumer spending grew even amidst uncertain economic times and trends like inflation and consumer price sensitivity. Looking at the coming peak, a similar pattern is projected for this year, with shoppers forecasted to drive a 4.8% increase in holiday retail sales for 2024, Geodis said, citing data from Emarketer.
To attract the extra workforce, Geodis says it will offer competitive wages, peak premium pay incentives, peak and referral bonuses, an expedited payment option, and flexible schedules. And it’s using an AI-powered chatbot named Sophie to serve as a virtual recruiting assistant.
“We acknowledge the immense responsibility we have to our customers to deliver exceptional service every day, and this is especially true during peak season,” Anthony Jordan, GEODIS in Americas Executive Vice President and Chief Operating Officer, said in a release. “Because peak season is the most business-critical sales period of the year for many of our retail clients, expanding our workforce is vital to ensure we have a flexible, dynamic team that can handle anticipated surges in demand.”