25. February 2014 06:00
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- What is Business Intelligence (BI)? - Understand how Business Intelligence (BI) technology transforms raw data into meaningful and useful information for business purposes and strategic decisions
- Trends in Reporting - The evolution from paper reporting to sophisticated dashboards
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- Key Performance Indicators (KPIs) - How to design and create important KPIs that are specific to each job function
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When: Wednesday, February 26, 2014
Time: 1:00 - 2:00 CST
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20. February 2014 08:55
With the current transportation funding legislation due to expire in October of this year, Congressional and industry leaders are beginning to mull over how it will be replaced. There is no disagreement that the country's infrastructure is in a serious state of deterioration. The big question is how improvements will be funded; and so far, Congress has not been able to reach a consensus on a viable answer. The American Society of Civil Engineers has estimated that an investment of $2.7 trillion will be needed by 2020 in order for the country to stay competitive. There is no way that any plan can generate that kind of funding; but at a minimum, $50 billion annually will be required to fund critical projects. The Highway Trust Fund is predicted to have a shortfall by August.
The most obvious answer is to increase the fuel tax. First levied in 1932, the fuel tax is the primary source of revenue for the Highway Trust Fund. These taxes of $.184 on gasoline and $.244 on diesel fuel, however, are woefully behind the rate of inflation and have not been increased since 1993.
On February 12, Tom Donohue, president of the U.S. Chamber of Commerce, recommended to Congress that the tax be increased by 15 cents per gallon over the next three years, chiding the Senate committee to, "For once let's do what is right, not what is politically expedient." The same day, Representative Earl Blumenauer (D-Ore.) introduced a bill that would increase the gasoline tax to $.334 on gasoline and $.428 on diesel fuel.
The whole issue of course, is a political minefield, with which Congress hasn't dealt for over twenty years. The House Transportation and Infrastructure Committee Chairman doesn't believe Congress will support such an increase again this year. The states also levy fuel taxes averaging $.335 on gasoline and $.243 on diesel, and as Congress continues to kick the can down the road, they are enacting their own increases to pay for infrastructure improvements the federal government won't fund. Congress is right about one thing – many voting drivers no doubt will push back.
Some members of Congress have suggested that they abdicate their responsibility and have the federal government just turn the whole thing over to the states. Whatever the solution – private funding, tolls, tax increases, etc. – it is absolutely critical that Congress does not let the can be kicked any further. It is past time to act responsibly in spite of the political pain.
7. February 2014 09:15
Last month marked the fiftieth anniversary of the Teamsters' National Master Freight Agreement (NMFA) with the motor carrier industry. Often referred to as Jimmy Hoffa's greatest achievement, it covered 400,000 union members and 16,000 motor carriers. The NMFA has diminished in significance until now it applies to only a handful of carriers. While this is not necessarily a bad thing for the carriers and shipping public, it has produced some disconnect in the industry. With different agreements with individual carriers, it is difficult to predict how negotiations might go.
In October of last year, ABF Freight System and the Teamsters ratified a five year agreement that reduced wages by 7% and cut other benefits.
In January of this year, UPS Freight and the union agreed on a five year contract that will raise wages by $2.50 per hour over the life of the contract, as well as increase other benefits. By the end of the contract the base pay for a UPS Freight driver will be an impressive $70,000 annually, the highest in the industry.
Three weeks ago, Teamster members overwhelmingly rejected a proposed five year extension of the current YRC contract. The proposal would have extended to 2019, the 15% wage reduction agreed to in 2009, along with a 75% reduction in pension contributions. 61% of the members drew a line in the sand. However, last weekend, the union accepted a modified proposal which although still containing the extension of the 15% rollback, made some other concessions to the employees. Without this agreement, YRC would have been in serious trouble with their $1.4 billion debt load, a $69 million chunk of which is due to lenders on February 14. They now have begun to move ahead with refinancing.
Since labor and fuel are the two major expenses of any motor carrier, these agreements have a direct impact on the rates shippers will pay. And even for non-union carriers it would not be surprising to see some pressure for higher wages, particularly in view of the UPS agreement.
Even though the YRC issue seems to be resolved at least for the time being, it is difficult to predict what these agreements mean to the shipping public. Most industry experts are predicting increases in both TL and LTL of 2-3% this year; but as always, there will be some uncertainty surrounding fuel costs, capacity, and drivers.
27. January 2014 08:30
Image: WORLD ECONOMIC FORUM / swiss-image.ch / Photo Christof Sonderegger
At last week's annual World Economic Forum in Davos, Switzerland, most of those attending were very upbeat about the global economy. The World Bank, International Monetary Fund and others have predicted that 2013 will show the most significant growth in three years; but that is based primarily on the strengthening U.S. economy. But what about the emerging markets, the ones in which many firms have a significant interest?
Also last week, Agility published the Agility Emerging Markets Index which assessed 45 emerging markets on their attractiveness as logistics markets. The study considered three metrics – market size and growth potential, market connectedness and market compatibility. (An emerging market, according to the World Bank, is a country making an effort to improve its economy and achieve the same level of sophistication as a "developed" country.) Only 15 of the 45 had a 2012 GDP of over $300 billion.
According to the survey, logistics professionals were very optimistic about the prospects for most of these markets as well, with the Asia Pacific countries having the brightest perceived outlook. The top six markets, according to the respondents, are China, India, Brazil, Russia, Indonesia, and Mexico. Mexico rose two rankings from 2013, no doubt a result of "nearshoring" interest. Even though China remains a strong market, 63% of the respondents agreed that manufacturers could likely move away from China with Vietnam, India, Mexico, and Indonesia seen as the most likely destinations. When asked to identify the most significant factors affecting potential emergence, respondents listed economic growth, growing trade volume, Foreign Direct Investment (FDI), cheap labor, potential consumer spending and geographic location.
Not surprisingly, there are risks to conducting business in many of these markets. In Asia the major risks were identified as natural disasters, economic shocks and corruption in that order. In Latin America, 42% saw corruption as the major obstacle, followed by poor infrastructure. In the Middle East, government instability and terrorism were the major concerns, and in Sub-Saharan Africa, poor infrastructure and government are significant issues. Other problems noted were such things as difficult customs procedures, government policies, difficulty in setting up and doing business, security, and difficulty in repatriating profits.
From the results of this study it seems clear that economic growth is the driving force behind the most popular markets. While factors such as cheap labor, location, and population are important, growing economies are viewed as having the greatest logistics potential. For the complete report, see www.agilitylogistics.com.
16. January 2014 14:30
Several times yearly, Verinder Syal, a Chicago marketing consultant, publishes a very informative newsletter on marketing innovations and techniques. One of his best from 2013 contained a summary of The Art of Customer Service, taken from the book Reality Check: The Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition by Guy Kawasaki. Kawasaki was one of the Apple employees originally responsible for marketing the Macintosh in 1984. I believe this checklist is worth repeating and, with permission, I am including Syal's summary here.
- Start at the top. The CEO's attitude toward customer service determines the quality of service that a company delivers.
- Put the customer in control. This requires two leaps of faith: first trusting customers to not take advantage of the situation; second, trusting employees to make sound decisions.
- Take responsibility for your shortcomings.
- Don't point the finger.
- Don't finger the pointer. Great customer service companies don't shoot the messenger.
- Don't be paranoid. One of the most common justifications for lousy service is "What if everyone did this?"
- Hire the right of people. The ideal customer-service person derives great satisfaction by helping people and solving problems.
- Under-promise and over-deliver.
- Integrate customer service into the mainstream. Customer service largely determines the company's reputation, so do not consider it a profit-sucking necessary evil.
- Don't give them a sales pitch. When customers call for customer service or technical support, they are hardly in a mood for a sales pitch.
- Use operating procedures, not scripts.
- Use operators. Use people, not systems to answer the phones. (No push 1 for Sales, 2 for Billing, etc.)
- Use a callback system.
- Keep customers in the loop.
- Make customers feel important.
- Follow up. The difference between acceptable and great customer service is how often and how well the customer service department follows up on requests.