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For the UPS C-suite, last Friday brought anything but calm weekend vibes. As the Teamsters announced the overwhelming support of their rank and file for a strike authorization, UPS tried to reassure shareholders in a June 16 press release that strike authorizations are “[...] normal steps in labor union negotiations.” However, with Teamsters General President Sean O’Brien working to fire up his union’s membership, some in the transportation industry aren’t taking UPS’ assurances at face value.
But it’s not all strike authorizations and dramatic votes; general rate increases are preventing trans-pacific container rates from falling as quickly as anticipated, and last-mile delivery Veho is launching service in 11 new cities in the Northeast. Whether it’s high drama or business as usual, here are nine transportation headlines you need to know.
In a worrying sign for UPS, the International Brotherhood of Teamsters’ rank-and-file voted overwhelmingly to authorize a strike by the 340,000 Teamsters working as UPS delivery drivers and warehouse workers. With 97% of UPS Teamsters voting to authorize a strike, the union has gained considerable leverage at the bargaining table.
“This vote shows that hundreds of thousands of Teamsters are united and determined to get the best contract in our history at UPS. If this multibillion-dollar corporation fails to deliver on the contract that our hard-working members deserve, UPS will be striking itself,” O’Brien said in a Teamsters press release, “The strongest leverage our members have is their labor, and they are prepared to withhold it to ensure UPS acts accordingly.”
Experts predict that U.S. truckload spot market rates may be at or near their annual bottom. As a result, they advise that shippers lock in their truckload contracts sooner rather than later.
“I recommend shippers do three-month bids with the volatile, low-volume freight or engage in a floating contract,” Jon Payne, Loadsmart’s director of pricing and strategy, said in an interview with the Journal of Commerce, “And for more stable, high-volume lanes that carriers will take just because they need volume, lock them in for six to 12 months now.”
The world’s seventh largest 3PL by volume, Nippon Express, has agreed to acquire Cargo-Partner for as much as $1.5 billion. By purchasing the Austrian logistics company, Nippon Express will further solidify its position in competitive European transportation markets and expand its global presence.
“Nippon Express’ gross revenue was more than $21 billion last year, with 29% of business coming from overseas sales compared to 20% in 2019,” writes Eric Kulisch in FreightWaves, “The company, which has more than 73,400 employees at 760 locations, forecasts revenue will decline to $18 billion this year amid a global economic slowdown and weak shipping demand, with international sales increasing to 30%. It is targeting an overseas sales ratio of 40% by 2028, with half of the sales from outside Japan by 2037.”
Pennsylvania Gov. Josh Shapiro issued a disaster declaration in response to a bridge collapse on Interstate-95 in Philadelphia. This action provides immediate access to federal funds necessary to begin addressing repairs on one of the busiest stretches of highway in the country. Authorities say the repairs could take months.
“To expedite the rebuilding of I-95 and cut through the red tape, this morning, I issued a disaster declaration, allowing the Commonwealth to immediately draw down federal funds and move quickly to begin the repair and reconstruction process,” Shapiro said in a June 11 press release, “My administration is in regular contact with our federal partners, who have pledged their complete support and assistance as we create alternative routes and rebuild I-95. My administration is all hands on deck to repair I-95 as safely and as efficiently as possible.”
Veho, a Colorado-based final mile delivery and reverse logistics provider, recently announced plans to expand into 11 new markets. Located mainly in the Northeast, these new markets increase the total population within Veho’s service range to 100 million. The new markets include the Bronx, New Haven, Conn., and Providence, R.I.
“In this macroeconomic environment, retailers are recognizing more than ever the importance of the post-purchase experience in driving brand loyalty, repeat purchases, and ultimately profitability,” Veho’s Chief Revenue Officer Brian McDevitt said in a June 6 press release, “Veho’s laser focus on the customer experience and highly efficient operating model continues to position itself as an invaluable partner to brands and is at the heart of our growth and expansion.”
As part of Postmaster General Louis DeJoy’s ambitious 10-year plan to revitalize the U.S. Postal Service, the USPS will merge its first-class package service with Parcel Select Ground service. The new Ground Advantage service will handle 1-ounce to 70-pound parcels.
“Over the past year, the Postal Service has focused on strengthening its shipping solutions as part of its 10-year strategic plan for service excellence, on-time delivery, and revenue generation from enhanced package delivery services,” a USPS representative said in a May 10 press release. “With more than 31,000 post offices, various pickup options, including free package pickup, and no surcharges for fuel or residential delivery, the Postal Service provides exceptional value and convenience to customers.”
As carriers continue to hemorrhage revenue, shipping lines are taking steps to bolster sinking container costs. Following the general rate increase on June 5, spot rates have increased slightly. FreightWaves says, “China-West Coast spot rates were $1,441 per forty-foot equivalent unit on Friday, up 11% from prior to Thursday’s GRI and up 44% from prior to the April 15 GRI.”
DSV A/S, the world’s third-largest logistics provider, recently announced plans to acquire Phoenix-based S&M Moving Systems West and Global Diversity Logistics (GDL) to appeal to the booming semiconductor industry.
“These acquisitions underline our continuous commitment to strengthening our U.S. position, competencies, and service offerings,” Niels Larsen, President of DSV Air & Sea US, said in a press release. “They also provide access to a strong heritage and a wealth of knowledge and experience in the semiconductor industry.”
Ingka Group, owner and operator of 482 Ikea stores, has recently purchased supply chain software provider Made4net to strengthen fulfillment processes. Made4net will continue operating independently of its New Jersey headquarters and six global offices.
"Our business currently requires a better fulfillment operations system with more accurate data that better supports handling for our customers," Tolga Öncu, Head of Retail, Ingka Group, said in a May 31 press release, "Our goal is to become leaders of life at home, serving more people in an omnichannel reality, whenever and however customers choose to meet us."
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