Transportation Tips

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2010-04-23T09:03:00.001-04:00

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M33 Webinar: Prepapring for the Upcoming Capacity Crisis

2010-03-24T13:54:00.012-04:00

Industry experts are predicting carrier pricing will rebound this year across both the TL and LTL sectors. Companies that take a proactive approach to this dynamic market will best mitigate the pricing impacts on their supply chain. We held a webinar to educate our clients, prospects and business associates about what industry-leading companies are doing today to better position themselves for the coming crisis. You can watch it here:

If you have any questions or comments about the issues and recommendations in this presentation, please feel free to contact us.

Come Walk With Us!

2010-03-17T02:51:00.002-04:00

M33 has teamed up with the March of Dimes to help publicize and participate in the annual March for Babies in Greenville, SC.

Every day, thousands of babies are born too soon, too small and often very sick. We're walking because we want to do something about this. The money we raise will support
March of Dimes research and programs that help moms have full-term pregnancies and babies begin healthy lives. And it will be used to bring comfort and information to families with a baby in newborn intensive care.

Please join us for the march:
March for Babies
Saturday, April 24, 2010
CU-ICAR

Walk Distance: 6 miles
Registration Time: 8:00 AM
Start Time: 9:00 AM

If you can't walk with us, please help the team reach our goal by making a donation. You can do that online as well: M33 Integrated Solutions

Transportation Update: 1st Quarter Review, 2010

2010-03-12T15:47:00.003-05:00

The consensus concerning the trucking industry for the year of 2009 is that it was a dismal year. As manufacturers and the economy struggled, carriers fought to maintain profitability while providing service to their customers.

The less-than-truckload (LTL) sector ended the year at a collective 107 operating ratio, losing $.07 per dollar. This was a direct result of declining tonnage and diminished revenue yield driven by excess capacity and pricing pressures. There was speculation throughout the entire year that a major player in the LTL market would exit the industry, effectively balancing capacity and demand. That event never took place, and LTL carriers were forced to absorb losses that were historic in some cases. Across the board, we saw carriers reduce employee pay and benefits, initiate layoffs and downsizing, dramatically change their line haul networks, and shrink the size of their turn terminals from fully staffed operations with managers and clerical staff into ‘dark’ or unmanned operations.

Despite these cost-cutting measures, most companies still ended the year in the red. The competition that ensued was both a positive and a negative for shippers. Through bid processes and negotiations, companies were able to enjoy discounts at historic levels. As a direct result of such discounting, we saw deterioration in levels of service and the number of quality choices available in several lanes. LTL companies require a certain amount of volume to meet high operating costs. Discounting at the levels seen in 2009 caused many of these carriers to handle unprofitable business simply to keep freight volumes at an acceptable level.

An industry that operates at a loss for a full calendar year cannot sustain itself indefinitely and will correct itself in one of two ways; either freight volumes will rise to meet capacity or capacity will continue to shrink to meet the diminished demand. We expect pricing pressures in the LTL sector to linger throughout the first quarter. However, we see evidence of sporadic increases in demand from a variety of sources, and we know that companies are readjusting their capacity daily to ‘right-size’ their operations. By mid-year of 2010, we expect to see the supply/demand scale tip toward the carrier’s favor, which will lead to incremental pricing increases. Such price increases will likely be widespread across the industry. The speed at which this occurs, and the level of increases requested, will obviously be affected by the economy as a whole and each individual situation. But it would not be surprising to see an overall 5-6% effective increase in LTL pricing for the industry as a whole.

Truckload (TL) carriers have faced many of the same challenges in 2009. Despite 4000+ trucking company closures in the last seven quarters, we still see over-capacity. As with LTL, reports indicate some growth in demand at the end of last year and early this year, but experts still believe the industry is well over capacity. Large fleets are downsizing to accommodate business levels and smaller companies are feeling the pressure of reduced rates. We expect TL capacity to tighten significantly in some markets as early as this spring, with wider scale rate upticks beginning in the summer months.

We anticipate that the TL sector in particular will be heavily impacted as new safety requirements come into play. Comprehensive Safety Analysis 2010 rolls out later this year and will replace the current Safe Stat Scores, which indicate what a carrier’s safety performance has been. Although the impacts of this are still being explored, the Federal Motor Carrier Safety Administration believes there is a focused and determined initiative to raise the bar for companies entering the industry and to enforce safety compliance on a consistent basis for existing firms. The end result of this will hopefully be safer highways for all of us and our families. But it is important to realize that with strict enforcement of these new guidelines, companies will have to purchase new technology and adopt new standards. These new expenses may force some companies out business altogether. The impact of these failures and/or the inability for some companies to enter into the market is not easily measured, but verifiable statistics will probably begin to emerge later this year.

In summary, we expect pricing to rebound this year across both the LTL and TL sectors. Companies that take a proactive approach to this dynamic market will best mitigate the pricing impacts on their supply chain. Our commitment is to work with our partners in this period of market uncertainty to determine the best solution based on service, price and overall value.

Jeff Thomas is the Director of Market Economics for M33 Integrated Solutions, a global logistics solutions provider. Jeff is responsible for the successful integration of new customers into the M33 Client Network, overseeing data analysis, procurement of carrier resources through the RFQ process, and carrier contract management. He can be contacted at (877) 369-0343 or via e-mail.

The commentary above is based solely on the professional opinion of M33 representatives, and is meant to provide M33 clients with the knowledge they need to make more educated decisions.

Web Developer – JavaScript/CSS/MVC

2010-01-22T12:35:00.002-05:00

Web Developer – JavaScript/CSS/MVC
M33 Integrated Solutions
Greenville, SC

Got MooTools, Sproutcore, Prototype, Functional Programming, jQuery, Rich JavaScript Applications, MVC, or HTML5? Please read on if you grok these tools and concepts.

We are looking for an exceptionally talented Web Developer to build rich JavaScript applications. Reporting directly to the CIO, you will have the unique opportunity to build new web applications that are robust, extensible, and flexible.

M33 is a technology-driven transportation and logistics company headquartered in Greenville, SC. Our technology office is located directly on Greenville’s uber-cool Main Street offering a casual environment, characterized by “relaxed intensity”, and is certified cubicle-free with private offices.

Our technology stack leans toward jQuery (currently), Grails (like RoR), Groovy, Clojure, Java, Linux, MySQL, and SQL Server. We are agile with a development bias toward Scrum: a prioritized feature backlog, short development cycles, automated testing, and frequent demos.

Requirements

We seek a forward thinker with a Bachelor’s degree in Computer Science, Mathematics, or other hard sciences and a mastery of the following: JavaScript, jQuery, MooTools or Prototype, CSS, AJAX. Solid understanding of MVC, Linux, Git or Subversion.

In addition, ideal candidates will have skill and experience in any of the following. These will guarantee at least 6 seconds more consideration than otherwise:

Groovy or Ruby, RoR or Grails, OS X, Hadoop, CouchDB, Clojure, Lisp, Scala
Delivering real software products with ongoing accountability to users for accuracy and reliability.
Functional Programming
Ping Pong (No need to panic. This is Table Tennis, not a new programming framework that somehow escaped your radar.)

This is an opportunity for full-time employment for U.S. citizens. No contractors please.

Please send resumes and inquiries to: tech.recruitment@m33integrated.com

Become a SmartWay Partner

2009-09-24T10:17:00.000-04:00

What is SmartWay?

The SmartWay™ Partnership is a program sponsored and administered by the US Environmental Protection Agency (EPA). The EPA describes SmartWay as "a partnership among government, business and consumers to protect our environment, reduce fuel consumption, and improve our air quality for future generations."

There are three partnership categories: Shippers, Carriers & Logistics Providers

Getting SmartWay Certified

In order to apply for SmartWay certification, a shipper, carrier or logistics company must sign the EPA's Partnership agreement. Next, the company must calculate its total emission output as it relates to freight activities (i.e. establish a model). These two steps usually result in SmartWay certification.

Finally, the applicant company must develop an Action Plan outlining a strategy to further reduce emissions by a certain percentage each year. The EPA uses the Action Plan to determine whether a SmartWay partner maintains certification.

Don't Know Where to Start?

We at M33 Integrated Solutions are SmartWay-certified. As a global logistics company, we received the EPA's highest overall rating of 1.25. We've helped manufacturers and distributors of all sizes learn how to measure and manage their transportation-related emissions and develop a workable plan to increase efficiencies. The strategy we co-develop with our clients often results in better visibility and cost reductions across their distribution model. So not only are they able to tout their green credentials to an increasingly eco-conscious customer base, but they become leaner in the process.

If you would like to discuss "next steps" in exploring SmartWay certification for your company, please contact us:

M33 Integrated Solutions
info@m33integrated.com
(877) 369-0343

Three Times in Three Years - M33 Makes Inc. 5000 List

2009-08-18T08:21:00.004-04:00

For the third time in as many years, M33 Integrated Solutions has been honored by Inc. Magazine as one of the "5000 Fastest Growing Private Companies in America."

In response to the award, Sammy Riddle, Senior Partner and co-founder of M33, said, "All of these recognitions just go to show that we've put together a team that is committed to growing our company -- not just landing new accounts, but also maintaining our relationships with our current clients. That's what matters most. But it's always fun to be honored by an independent party, just to see how our business measures up against the competition."

M33 was founded in 1998 by brothers Scott and Sammy Riddle as a freight brokerage. In the decade since, the company has evolved into a full service, global logistics solutions provider. A profile of the company was recently published by Armstrong & Associates, which concluded:

While it is small in comparison to other [Third Party Logistics Providers, (3PLs)] with supply chain network management expertise, M33 has found a niche in focusing on mid-market customers with complex supply chains. As companies continue to find ways to reduce logistics costs in the current economy, outsourcing functions to 3PLs for improved transportation management is an increasing prevalent strategy. With its capabilities, M33 will continue to benefit from this trend.

M33 placed 2495th overall and ranked 59th in the field of Logistics and Transportation. The company ranked 2853rd in 2008, and 2224th in 2007.

M33 Profiled by Armstrong & Associates

2009-08-12T13:45:00.001-04:00

M33's collaborative logistics network merits praise from third-party analysts

M33 Integrated Solutions was recently profiled by Armstrong & Associates, a respected third-party in the field of logistics. The profile concluded:

While it is small in comparison to other 3PLs with supply chain network management expertise, M33 has found a niche in focusing on mid-market customers with complex supply chains. As companies continue to find ways to reduce logistics costs in the current economy, outsourcing functions to 3PLs for improved transportation management is an increasing prevalent strategy. With its capabilities, M33 will continue to benefit from this trend.

Click here to read the whole thing.

YRC Takes Another Hit

2009-08-03T08:25:00.006-04:00

In keeping with the warnings we expressed last month, YRC has reported some more bad news:

YRC Worldwide, the country’s largest less-than-truckload carrier, lost $309 million in the quarter ending June 30 as shippers apparently abandoned the troubled company in large numbers, sending revenue down 45 percent.

The company, which has struck deals in recent weeks with its lenders and the Teamsters union to reduce its costs and debt troubles, saw shipping at its national LTL business fall more than 37 percent and tonnage per day at its regional unit decline 26.4 percent compared to the last year’s second quarter.

Even if you ignored these figures, two factors would indicate that YRC is in its last throes:

Bankruptcy is often a self-fulfilling prophecy. Simply because YRC might go under, responsible managers are making contingency plans with other carriers. Those carriers are already eating into YRC's market share, resulting in less revenue.

People used to joke that the Detriot automakers were health care companies that made cars on the side. The same could be said of YRC's pension fund. No matter what kinds of deals the company makes with labor, the unavoidable commitments YRC owes to pensioners is unsustainable.

YRC may eventually get their finances in order, but that doesn't mean shippers shouldn't be making contingency plans. Capacity will be tight, and those with existing contracts will lock in the good rates.

Walmart Sends Out a Green Shockwave

2009-07-23T10:02:00.012-04:00

Over the past 20 years, we've seen a largely bottom-up approach to environmental issues. All of that changed on July 16th, 2009, when Walmart announced a new strategy aimed at "greening" its supply chain. Walmart will provide each of its 100,000 global suppliers with a survey of 15 questions to evaluate their own company's sustainability:

Energy and Climate: Reducing Energy Costs and Greenhouse Gas Emissions
Have you measured your corporate greenhouse gas emissions?

Have you opted to report your greenhouse gas emissions to the Carbon Disclosure Project (CDP)?

What is your total annual greenhouse gas emissions reported in the most recent year measured?

Have you set publicly available greenhouse gas reduction targets? If yes, what are those targets?
Material Efficiency: Reducing Waste and Enhancing Quality
If measured, please report the total amount of solid waste generated from the facilities that produce your product(s) for Walmart for the most recent year measured.

Have you set publicly available solid waste reduction targets? If yes, what are those targets?

If measured, please report total water use from facilities that produce your product(s) for Walmart for the most recent year measured.

Have you set publicly available water use reduction targets? If yes, what are those targets?
Natural Resources: Producing High Quality, Responsibly Sourced Raw Materials
Have you established publicly available sustainability purchasing guidelines for your direct suppliers that address issues such as environmental compliance, employment practices and product/ingredient safety?

Have you obtained 3rd party certifications for any of the products that you sell to Walmart?
People and Community: Ensuring Responsible and Ethical Production
Do you know the location of 100 percent of the facilities that produce your product(s)?

Before beginning a business relationship with a manufacturing facility, do you evaluate the quality of, and capacity for, production?

Do you have a process for managing social compliance at the manufacturing level?

Do you work with your supply base to resolve issues found during social compliance evaluations and also document specific corrections and improvements?

Do you invest in community development activities in the markets you source from and/or operate within?

It's not hard to see that companies in the position to tout their green credentials will have the competitive advantage.

As everyone jockeys to make themselves appear more eco-conscious, they will start asking their own suppliers for information they can include in their reports. So whether you sell directly to Walmart, or your customer's customer sells to Walmart, you'll soon be required to provide your own sustainability scorecard.

To learn how your company can position itself as a sustainable shipper without the large investments usually associated with green initiatives, please contact us.

For more information about Walmart's Sustainable Product Index, click here.

Software Developer Job Opportunity

2009-07-13T09:19:00.003-04:00

M33 Integrated Solutions is looking for exceptionally talented software developers to work with Groovy, Grails and Java in a fast-paced environment with tremendous growth potential. We’re currently building business web applications, rules-driven workflow management systems, and web service API’s.

M33 is a fast-growing, technology-driven, third party logistics company (3PL) with offices in Greenville, SC and Greensboro, NC. Our technology office is located directly on Main Street in downtown Greenville, SC. Our environment is casual, characterized by "relaxed intensity," and has no cubicles!

Successful candidates must possess the following attributes:

Bachelor degree in Computer Science, Mathematics, or other hard sciences

Mastery of the following:

Higher-order language constructs

Object oriented development principles

Java

Groovy or Ruby

HTML/DOM/JavaScript

Linux

Source control

Preference will be given to candidates with the following knowledge and experience:

History of delivering real software products with ongoing accountability to users for accuracy and reliability

Knowledge of (and appreciation for) functional programming concepts

Grails, Rails, Struts, or other MVC web application frameworks

Subversion and Git

Virtualization tools such as VMWare and Xen

Automated testing principles and tools: unit testing, BDD and Selenium

Continuous Integration (CI) systems and best practices

Amazon Web Services – EC2, S3

Agile software development practices

C++ and/or Assembly Languages

Ping Pong (No need to panic. This is Table Tennis, not a new programming framework that somehow escaped your radar.)

Please send resumes and inquiries to tech.recruitment@m33integrated.com.

Canada to Implement eManifest Program Next Year

2009-07-10T16:54:00.003-04:00

By now, everyone who imports goods into the US is aware of the Importer Security Filing, known more commonly as “10+2.” This regulation by US Customs & Border Protection requires importers to submit additional information factors before a shipment can clear customs without incident. The purpose of the extra documentation is to tighten port security and maintain a more accurate inventory of the freight that crosses our borders every day. It was widely assumed that Canada’s Border Services Agency (CBSA) would impose similar import regulations, and they’ve finally announced that their rules will come in the form of an eManifest Program:

eManifest is the third phase of the Advance Commercial Information (ACI) program, which introduced the requirement for marine and air carriers to provide the CBSA with electronic information in advance of the arrival of commercial cargo at Canada’s sea and air ports of entry.

eManifest will further modernize and enhance how the CBSA processes and screens commercial goods coming into Canada.

In this way, the CBSA will have the right information at the right time from carriers, freight forwarders and importers in all modes of transportation. And, by rigorously performing risk assessments on commercial goods before their arrival, the CBSA will be better able to ensure that high-risk shipments are examined and low-risk shipments have facilitated entry into Canada.

The eManifest Pprogram is scheduled to be implemented in phases. Phase 1 will begin next Spring with highway carriers transmitting cargo and conveyance data to the CBSA in advance of their arrival at the border. Phase 2 will begin next Fall with rail carriers transmitting their pre-arrival data. Regulations focusing on forwarders and importers will take effect in 2011 and 2012. The program is scheduled to be fully implemented by 2015.

For more information about eManifest, consult the following resources:

CBSA fact sheet on amendments

E-Manifest fact sheet

Press Release on Amendments

Continued Concern Over Future Capacity

2009-07-10T16:51:00.002-04:00

We’ve been raising red flags since last fall about the excess capacity caused by a contraction in shipping volumes, and how the lack of demand has led a large number of small Truckload (TL) and Less-than-Truckload (LTL) companies to close their doors. The true effect of our stagnant economy, with emphasis on the lack of production and transportation, was notably evident during the first quarter of the year. We saw losses reflected in the operating ratios of almost every publicly-traded LTL carrier. Old Dominion Freight Line (Thomasville, NC) was the only such carrier to report a profit.

With most major players in the LTL industry losing money in the first quarter, and a slow recovery in truck tonnage predicted, analysts in the sector predict that we will see fallout, possibly involving a major LTL company, as early as the third quarter of this year. There are still estimates of anywhere between 15-25% excess capacity in the LTL sector despite mitigating factors such as workforce reductions, the virtual non-existence of new truck buys, company closures and mergers.

In the short term, this has allowed for very aggressive pricing in the marketplace as companies compete over a severely diminished pool of available shipments. While lower shipping costs do have the effect of easing the pain for shippers who are being impacted from all sides by the economy, there is a general consensus among carriers, analysts and industry experts that the current condition of the transportation sector is not sustainable.

We have previously reported that YRC Worldwide (consisting of the former entities of Yellow and Roadway as YRC National and Holland, Reddaway and New Penn as YRC Regional) has been particularly affected. Although YRC is certainly not the only carrier facing difficult times, the problems they are facing are compounded by several factors beyond the current economic constraints. Here are a couple of prominent issues:

The longhaul LTL market is shrinking as a part of an overall change in supply chain strategy in the US. As more companies move to regional distribution centers, market share is shifting to shorter lengths of haul. Yellow and Roadway have traditionally competed in the long-haul market, and the amalgamated corporation continues to seek that market.

As parties to the Central States Pension Fund, YRC, along with ABF (Arkansas Best Freight), carry nearly all of the responsibility to fulfill the Fund’s obligations. As participants, YRC and ABF are forced to fund pensions for former employees of union companies who once participated in the plan, but are now defunct.

When presenting an industry financial assessment at the semi-annual SMC3 event in June, 2009, Dave Ross of Stifel Nicolaus told those in attendance that he did not expect YRC to be an entity by this time next year. Soon after, a report by John Larkin and Stifel Nicolaus was excerpted in Transport Topics advising that, “Without further concessions, the company will likely run out of cash this fall as operating losses and interest payments chew up remaining cash availability.”

Comments like this are abundant in industry publications and on the web. This is not to say that YRC isn’t doing everything in its power to become more profitable; it simply shows the magnitude of the obstacles they are facing and calls many to question if they will be able to survive in the face of such overwhelming adversity.

The Effects of Cap and Trade on Business

2009-07-10T16:43:00.006-04:00

Despite the promised environmental benefits of the proposed Cap & Trade legislation, there's no denying it will inhibit business growth.

What is Cap and Trade?

The American Clean Energy And Security Act of 2009, more commonly known as “Cap and Trade,“ passed the House of Representatives on June 26th on a largely party-line vote. The Senate is currently working on a similar version of the bill, and President Obama has stated publicly that he hopes to sign Cap and Trade into law this year. Although many Senators from both parties are under mounting pressure from energy companies, businesses and consumers to oppose such legislation, the seating of Sen. Al Franken in the chamber provided Democrats with a filibuster-proof majority. This makes it likely that the legislation will at eventually make it to the floor for a vote, perhaps as early as this fall.

Cap and Trade involves utilizing legislation and regulation to curb the release of pollutants and greenhouse gas emissions, specifically carbon dioxide. If enacted, the legislation would set up a complex accounting and trading scheme whereby companies would buy and sell emission permits and/or credits. The goals of the bill are noble; after all, who is for pollution? But like anything in business, there is a cost-to-benefit ratio. The downside of Cap and Trade is that it is intended to move consumers off carbon-based fuels by increasing prices through higher taxes and strict regulation of growth.

Using taxes to disincentivize some practices and offering tax breaks to incentivize others is nothing new. Common examples are sumptuary or "sin" taxes on alcohol and tobacco and tax write-offs for energy star appliances and charitable giving. Still, Cap and Trade goes far beyond anything currently on the books.

How Does Cap and Trade Work?

The House version of Cap and Trade would force companies to reduce their carbon emissions by 17% by 2020, and 83% by 2050, when benchmarked against 2005 levels. To facilitate this reduction, federal agencies would cap the amount of carbon (and other pollutants) that companies can release into the environment, based on the averages in their particular industries. In a way it’s similar to the varying salary caps used by the NFL, NBA and NHL to level the playing field. In sports, the franchises that maintain space beneath the cap are more flexible with regards to making strategic changes involving personnel. Under Cap and Trade, businesses that stay under the cap will be better positioned to make strategic changes involving operations and growth.

Companies will be required to decrease emissions by a certain percent each year against the benchmarked average, or “Cap.” Companies that don’t make operational changes that result in emission reductions will be penalized and will have to purchase offsets from companies that have exceeded their reduction requirements. That’s where the “Trade” part comes in. Reductions in carbon emission will become an asset and commodity that is traded between companies and is taxed by the government.

How Will Cap and Trade Affect Business?

Despite the spin emanating from politicians and special interest groups, this new regulatory scheme is a thinly-veiled tax on business that would hit manufacturers and distributors particularly hard. Imagine that ten years from now, your top competitor is brought down by unsustainable debt. As a result, they’ve put most of their assets on the market, assets that would allow your company to absorb a decent percentage of their market share in a short period of time.

Under Cap and Trade, you would have to offset the increase in emissions that would result from the expansion in operations and distribution. Even if it was legal for your company to increase emissions by such an exorbitant amount in one year, it would certainly be prohibitive to business have to pay for the assets as well as the offsets. One solution might be to spread your incorporation of the ailing company’s assets across several years, but that does little more than create an accounting scheme that would slow business growth. And depending on the final markup of the bill, there may be limits on what percentage of carbon reductions can be made up by purchased offsets (versus organizational reductions) each year, thereby limiting corporate growth to a predictable percentage of existing operations.

How Would Cap and Trade Affect the Economy?

Another damaging aspect of Cap and Trade is that the emission reductions required per year are not rooted in reality. During the first few years of regulation, most firms will find it easy to reduce their carbon output. There are many strategies and programs out there today that will achieve the necessary results with minimal up-front investment. But the fact remains that around 85% of our energy use today is based on carbon-emitting fossil fuels. The ability to switch to alternative energy sources in the short term is both limited and expensive. Despite the ability for companies to continue improving their operations, they will still be required to get under the cap or pay the price. This will happen every year, whether there are technological breakthroughs in clean energy production or not.

Once the regulations outpace the available solutions, there will be less carbon to trade. As the price for this commodity increases, many companies will go out of business. Since the healthy companies won’t be able to afford to take on the emissions associated with expansion, many of them won’t buy out their former competitors. The increased prices resulting from the higher cost of doing business will be passed on to customers, who will already be paying higher prices for goods and energy. The economic cost that may result from this attempt to micromanage industrial growth is projected to be in the trillions of dollars of lost GDP.

Proponents of Cap and Trade argue that the legislation will be amended as needed to protect our economy. While we can be hopeful that they are right, the important question is whether the damage will have been done by then. Opponents argue that the sheer number of pollution allowances being promised to energy producers in exchange for their Senators' support for the bill will negate the goal of the legislation, making it all cost and no benefit to American taxpayers. They also argue that the inflexibility of Cap and Trade legislation and the stymieing effect it will have on our economy will inevitably lead to nationalistic “Buy American” clauses that will only exacerbate the problem. In fact, we’ve seen calls for such provisions already. And we won’t even get into the dangers of patronage, graft and fraud that would be endemic in such a restrictive economic environment.

Is Carbon Regulation Inevitable?

This scenario we’ve described above is purely theoretical and based on the premise that the Senate will pass Cap and Trade. There's no guarantee that such sweeping new regulations will be adopted this year or during this administration.

What we do know is that Europe has already adopted a complex carbon trading scheme, and it seems inevitable that America will eventually adopt some form of regulatory oversight. As European companies seek to impose the same barriers to profitability on their American counterparts, we'll likely see this issue start to dominate at various world trade forums. In fact, European diplomats are already advising American officials on the successes and failures they’ve experienced on the continent. So the question seems to be whether carbon regulation will happen sooner, rather than later, and what that program will look like when it is signed into law.

Of course, Cap and Trade may turn out to be only a minor thorn in the side of American industry, but no one would make an honest argument that it will be financially beneficial to anyone besides carbon accountants and the federal treasury. To put it simply, there’s an upside to Cap and Trade, but it’s dwarfed by the unavoidable downside.

Where Can I Find More Information?

Because Cap and Trade is a politically-charged issue, we would like to offer the following resources that approach the issue from varying perspectives:

Environmental Defense Fund: How Cap and Trade Works

Wall Street journal: Who Pays for Cap and Trade?

Center for American Progress: Cap and Trade 101

The Heritage Foundation: Beware of Cap and Trade Climate Bills

Port of Charleston Getting Busier

2009-07-01T08:43:00.004-04:00

Over the past decade, international shippers have looked on as the Ports of Norfolk and Savannah have increased traffic, seemingly at the expense of the Port of Charleston. The SC State Ports Authority has proposed an expansion to the site, and those changes seem to be creating new opportunities:

Mediterranean Shipping Co. is digging in its heels at the Port of Charleston, continuing to grow its local presence while other shipping companies are cutting back.

S.C. State Ports Authority Board Chairman David Posek announced Wednesday that the world’s second-largest shipping company would add a weekly call on Charleston starting June 9.

That will bring the company’s weekly calls on the Port of Charleston to six, surpassing by two the number of calls that Maersk Line now makes here.

If you move products through Southeastern ports, now is a good time to reevaluate routes and renegotiate rates.

Are Trans-Pacific Freight Costs About to Rise?

2009-06-22T16:36:00.003-04:00

According to Logistics Management:

As the peak transpacific season approaches, ocean carriers comprising the industry's last rate-fixing cartel will try to charge shippers more. The CEOs of container shipping lines of the Transpacific Stabilization Agreement (TSA) have collectively voiced their intentions to raise rates as 2009-10 service contracts are being negotiated.

Now is not exactly the right time to be absorbing increased costs, and it's definitely the wrong time to be passing added costs on to your customers. However, this economic slowdown is the perfect time to have an experienced third party review your international distribution model and identify opportunities to eliminate unnecessary fees and outdated rate structures.

Like we've said before, the companies that exploit the market slowdown will have the competitive advantage when the economy turns around. Those 'leaner' companies will have leveraged independent expertise to enable more profitable partnerships with existing vendors and customers.

Companies Are Getting Creative to Cut Costs

2009-05-29T14:07:00.008-04:00

A recent article in Supply Chain Brain underscored what so many companies have experienced lately:

In the midst of a brutal recession, companies think of little else than cutting costs. According to a new report by Archstone Consulting, however, they haven't been thinking enough. The firm's annual Cost Management Survey finds that 57 percent of respondents “have not yet identified sufficient savings opportunities to meet the cost-reduction targets necessitated by the dramatic economic decline in 2009." Last year's survey uncovered "a high rate of success” among organizations looking to cut costs, with an emphasis on achieving incremental savings, Archstone says. Now, with the economic crisis growing more dire, companies are deploying more complex initiatives, such as logistics redesign, shared services and asset rationalization.

Cost-cutting trends like these have been emerging across the country, if not the world, as oraganizations attempt to decrease operating costs. For example, universities are pooling their IT infrastructures, retailers are teaming up for promotions and advertising, and manufacturers are starting to collaborate in their distribution.

We detailed the many benefts of inter-company collaboration last year, specifically referring to the strategy as a way for businesses to shield themselves from market conditions. That advice is proving to be very prescient in light of our lingering economic doldrums.

You can take another look at that piece here: Surviving the Highs and Lows of Transportation

How's Your Risk Management Strategy?

2009-05-14T13:58:00.005-04:00

There’s no question that companies will come out of this recession leaner than they were going in, but the competitive advantage will go to those companies that used the economic slowdown to eliminate waste and reduce risk:

The outcomes of inadequate risk management span the gamut from financial losses to a loss of customer goodwill that may well threaten the long-term viability and survival of a firm. Today, with an increasingly unforgiving regulatory environment and legislation such as Sarbanes-Oxley that requires business technology systems to function without error, executives need to be concerned about risk management more than ever before. (Baseline Magazine, 5/5/2009)

Is your company doing everything it can to reduce waste and minimize risk in the distribution process? Is your competitor's?

Don't Overlook the Soft Dollar Savings

2009-05-07T14:14:00.006-04:00

You’re probably using this time to weigh the costs and benefits of your company’s operations, but are you analyzing all of the fixed costs?

Analytical and precise by nature, CFOs are famously averse to anything that can be deemed "squishy." Subjectivity, vagueness, wiggle room, these are qualities that CFOs routinely attempt to expunge from budgets, briefings, and business plans. They seek clarity as relentlessly as Sidewinder missiles seek heat, and that's generally to their credit.

That may be one reason why many tend to regard "human capital" as a euphemism for "personnel" or "labor" rather than a legitimate strategic issue. It's not that CFOs don't regard the collective capabilities of their workforces as critically important — they simply aren't sure what they're supposed to do about it. As a result, many leave the "soft" side of human capital to the human-resources department and fixate on the salary, benefits, and other costs associated with all those bodies. (CFO Magazine, 2/1/09)

Lean Manufacturing was forged in similar economic times. It’s been our experience that transportation departments aren’t as lean as they could be. External partnerships and technology can often minimize redundancies while improving customer service and cutting costs. Are you analyzing those operations as thoroughly as you should be?

Proactive companies are going to come out of this recession in a better position than their competitors. Will your company have that competitive advantage?

Continued Concern over Future Capacity

2009-04-22T08:29:00.004-04:00

We have been speculating about what will happen with trucking capacity since the middle of last year. In the most recent quarter, supply and demand have both been racing downward at breakneck pace. As a result, industry analysts, trucking companies and shippers are attempting to predict what the landscape will look like when we achieve a more balanced market place.

In a recent article in the Journal of Commerce, statistics released from a report by Transport Capital Partners indicated some fairly significant trends:

Almost one quarter of the truckload carriers surveyed by the firm this month said they were giving “serious consideration” to leaving the business or liquidating if tonnage does not increase within the next six months—an event only 21.4 percent of the carriers said they expect.

As previously reported, we saw a large number of Truckload (TL) carriers leave the marketplace in 2008, and this report seems to indicate that number will continue to grow at a rapid pace without significant improvement in the overall economy.

There is an equal amount of speculation and unrest in the Less-Than-Truckload (LTL) sector. YRC, which contains the former entities of Roadway and Yellow, has experienced well-documented financial difficulties over the past 18 months. The company recently made cost-cutting measures in many areas, even securing an agreement with the Teamsters to reduce wages. Fortunately, YRC has received a great deal of cooperation from their banking partners to date. The next milestone will come at the end of the 2nd quarter of 2009; current loan covenants require the company to turn a profit during that quarter.

We at M33 are consistently monitoring developments, and will continue to update you as events occur that may impact your transportation program and your business.

Are You Overpaying on Import Duties?

2009-04-21T12:56:00.007-04:00

The Offshore Assembly Program (OAP), formerly known as the 806/807 Provision of the US Tariff Code, has been renamed the 9802 Provision of the Harmonized System Code. This program allows American firms to export component parts and have them assembled overseas. When the finished product is imported back into the US, duties are paid only on the foreign value added.

Shippers should estimate the production characteristics of the US OAP activity, and in particular, whether this activity is intensive in the use of non-production labor as compared to the overseas production. They should also examine the sensitivity of OAP imports to real exchange rate movements.

A breakdown of documents is required per shipment estimating the value of the US goods, the value of any foreign components that may have been added, and a breakdown of labor. If terms are listed on an invoice as Delivered Duty Unpaid (DDU), then freight needs to be shown as a separate line item. If you use a third-party logistics provider (3PL), they will need a listing of the freight rate so they will know how to handle the customs entry once the documents reach the US. Please note that you do not want to pay duty on freight either.

When handling imports of this nature, documents will need to be more itemized. By doing so, you will save money in duties, and make sure you are handling the shipment correctly and providing all the necessary information to US Customs and Border Protection.

If you have any questions about the "9802 Provision,” please contact Julia Church, International Specialist for M33 Integrated Solutions.

Software Development Intern Position Available (Summer Housing Provided)

2009-03-27T10:55:00.005-04:00

M33 Integrated Solutions is seeking a summer intern to work with cutting-edge technology on a fast-paced software engineering team. Work involves extensive use of the Grails web application framework and the Groovy programming language. Projects will include the development of web applications and web services.

Our office is located directly on Main Street in downtown Greenville, SC. Summer housing (within easy biking distance of our office) will be provided.

Successful candidates must possess the following attributes:

Actively working on a degree in Computer Science, Mathematics, or other hard sciences.
A solid grasp of object oriented development principles.
Some Java knowledge and experience.
Grasp of HTML/DHTML/JavaScript fundamentals.
Knowledge and familiarity with Linux.
Solid work ethic and ability to have a good time while being extremely productive.

Preference will be given to candidates with the following knowledge and experience.

Dynamic languages such as Groovy, Ruby, Python, Scala, Scheme
Knowledge of (and appreciation for) functional programming concepts.
Grails, Rails, Struts, or other MVC web application frameworks.
Subversion, Git, or other version control systems.
Eclipse, IntelliJ, or NetBeans
Virtualization tools such as VMWare and Xen.
Unit testing principles and tools.

M33 is a fast-growing, technology-driven, third-party logistics company (3PL) with offices in Greenville, SC and Greensboro, NC.

UPDATE: 4/28/09

The position has been filled.

M33 Expands Its Footprint in the Atlanta Area

2009-02-27T08:45:00.002-05:00

Danette Cole is a new Business Development Manager for M33 Integrated Solutions, a global logistics solutions provider. She will develop and execute supply chain solutions that drive service, reduce costs, and increase market share for manufacturers and distributors in the greater Atlanta metro area.

Danette has 20 years of experience in the fields of transportation management and logistics. While attending Georgia State University, she started her career at Consolidated Freightways, where she held numerous jobs in operations and sales. She was a Major Account Executive for DHL Worldwide Express specializing in International and Domestic Small Package Sales. Most recently, she was Vice President of Sales for a Third Party Logistics Company based out of Atlanta, where she worked with manufacturing and distribution companies to streamline their supply chain processes through carrier consolidation and warehouse optimization via a technology-based solution. Danette is HazMat and NMFC Certified.

Companies Turn to TMS to Cut Costs

2009-02-26T14:24:00.008-05:00

Whenever companies project budget shortfalls, they are faced with the prospects of increasing sales or cutting costs. Most shippers are unlikely to significantly increase sales in a time of contracted consumer spending, so cost cutting is on everyone's mind. Unfortunately, there's an army of technology reps out there who think they can increase their own sales by promising that their products/services are the cure for whatever ails you. So what are executives to believe when it comes to cutting transportation costs?

Apparently, one technology is living up to the hype:

Times might be tight for shippers, but that hasn’t stopped many of them from investing in new or upgrading their existing Transportation Management Systems (TMS). And that trend makes perfect sense because the technology has long been known as a tool that can make companies work smarter, better, and faster in the best of times—and in the worst of times. Analysts agree that the TMS option fits well in that equation with its ability to eradicate repetition, increase supply chain visibility, and cut redundant costs.

Click here to read the rest.

M33 Profiled in Supply Chain Digital

2009-02-25T08:57:00.003-05:00

Click on the image to access the article.