The U.S. Court of Appeals (District of Columbia Circuit) has thrown out the new Hours of Service (HOS) rules that went into effect on January 4, 2004, and has sent the case back to the Federal Motor Carrier Safety Administration (FMCSA) for review.
According to Morgan Stanley analyst James Valentine, the status quo is likely to remain in place for some time. "Despite this decision, it is our understanding that trucking companies will continue to operate under the recently implemented HOS rules until the issue reaches a final decision pending more appeals, which could take months if not years," Valentine says.
If the new HOS rules are ultimately thrown out, the results are likely to be more negative than positive, Valentine believes. "Assuming that we revert to the former rules at some point in the future, carriers would have higher equipment and driver productivity, which in turn could be viewed as benefiting individual truckload [TL] company's earnings per share, but looked at on a macro level, this would create 1 percent to 3 percent more capacity in an industry that has historically been plagued by overcapacity, although this is not the case at present," he says.
What does this mean to shippers?
While the current rules stay in place for the time being, that means no opportunity to reduce rates or costs for shippers.
"When the decision was announced, shippers wanted to renegotiate contracts to remove conditions predicated on the HOS rules," says Perry Trunick, executive editor of Logistics Today, Material Handling Management's sister publication. "Many shippers are likely to hedge against the outcome they expect by either keeping contracts short or locking the carriers in at current levels if they anticipate the next set of rules will add cost. I'd vote for getting that long contract, but do your own due diligence before you sit down at the bargaining table."
To read the court ruling for yourself, go online to: http://pacer.cadc.uscourts.gov/docs/common/opinions/200407/03-1165a.pdf.
RFID Experts Group Moves to AIM Global
A group of RFID (radio frequency identification) expert advisers initially chartered by the U.S. Department of Defense will become an expert advisory group within AIM Global, the industry trade association for RFID and the automatic identification industry.
The group, known as the RFID Experts Group (REG), has been working with the Defense Department to address implementation issues related to supply chain adoption of RFID systems. The department and a number of global retailers are beginning to require suppliers to implement RFID automatic data identification systems to track cases and pallets of goods.
RFID uses tiny computer chips on various substrates that can be attached to cases and pallets. Information about the contents of the cases and pallets can be recorded on the chips, allowing companies to track inventory and goods through an entire supply chain.
REG membership currently includes early implementers, technology vendors, integrators and research institutions. Many REG members also are members of AIM.
To learn more about AIM and its RFID initiatives, visit www.rfid.org. For more information on the REG and its activities, see http://www.aimglobal.org/members/news/templates/rfid.asp?articleid=158&zoneid=3.
New Software Selection Handbook Available
The new Software Selection Handbook is a step-by-step tool for organizations that want to follow a quality process as part of the software selection process.
The handbook provides detailed descriptions of the steps companies should follow to ensure a successful selection project. All the forms, worksheets and tables used by the Brown Smith Wallace consultants are included on the accompanying CD-ROM. The forms are in a standard format so they can be customized for individual projects. Handbook clients also are eligible for a one-hour phone consultation with a Brown Smith Wallace consultant.
The handbook ($1,295) may be ordered online at www.software4distributors.com or by calling Cory Metz at 314-983-1216 for more information.
CLM Will Change Name in 2005
The Council of Logistics Management (CLM) Executive Committee has voted to become the Council of Supply Chain Management Professionals (CSCMP), effective January 1, 2005.
"The decision to become CSCMP was made for one reason -- to meet the changing needs of our members and our profession," said Elijah Ray, 2003-04 president. "People in our profession now have an expanded and more critical role within our companies than we did 10 or even five years ago. We interact with more people within and outside our organizations. Our roles have evolved, which is why CLM is changing to reflect what's happening in the supply chain. The organization will also become more inclusive to others that play important roles in the supply chain."
With a broader emphasis on the entire supply chain, CSCMP will provide its members with enhanced content that incorporates not only logistics, but also procurement, manufacturing operations and sales/marketing functions. The new organization will expose members to more voices and different perspectives to help them increase their value to their companies while enhancing networking opportunities and professional growth.
The association's new Web site address, as of January 1, 2005, will be www.cscmp.org.
Companies Making News
Rice Lake Weighing Systems has acquired Powell All-Steel Scales. Rice Lake will now manufacture and distribute Powell's full line of livestock, truck and railroad track scales throughout the world.
Case Systems Inc., a manufacturer of furniture and commercial plastic laminate cabinetry for schools, laboratories and healthcare facilities, has acquired BOSTONtec Inc. and has relocated it to its Midland, Michigan, facility.
Wisconsin Lift Truck Corp. announced that Nissan Forklift Corp. N.A. has named the company its authorized dealer for Nissan and Barrett lift trucks in an additional 29 counties in Wisconsin and Michigan.
TPG N.V., a mail, express and logistics company, has acquired Wilson Logistics Group, the Swedish-based global freight-forwarding company, from Nordic Capital. In line with the strategy of TPG's division TNT Logistics, this acquisition is TNT's first major step into global freight forwarding.
Equipment Inc., a Nissan lift truck dealership in Jackson, Mississippi, was presented the Nissan 2003 President's Award. The award identifies the one dealership whose annual contributions demonstrates tremendous success in new equipment sales, parts sales and service excellence.
In a management buy-out orchestrated with a management team based in the United States, Germany and the United Kingdom, NORD Holding has taken a stake in Transnorm System Holding GMBH, with headquarters in Harsum, Germany. Transnorm has been acquired from Swisslog AG.
HK Names New Partner
HK Systems Inc., automated material handling and supply chain software solutions provider, has named Munroe Material Handling as a new Distributor Integration partner.
Munroe Material Handling, St. Louis, has been providing material handling solutions that optimize operational efficiency and maximize profitability since 1944. Munroe's turnkey solutions include mechanical engineering, electrical engineering, project management, installation, and system commissioning services. Munroe also provides system maintenance programs.
Robert Munroe, Munroe Material Handling president, said, "We are excited to join the HK Systems' Distributor Network, enhancing our comprehensive products and services offerings. I believe this union strengthens Munroe's ability to provide tailored solutions for our customers' challenges."
HK Systems' comprehensive products and services offerings include conveyance, sortation, automated storage and retrieval systems, automated guided vehicles, palletizers, customer services, warehouse management, transportation management, and event management systems.
Munroe Material Handling was MHM's Value-Added Award winner in 2000.
Managers Making News
Jack Allor has been promoted to president of Dearborn Mid-West Conveyor Co. He succeeds Wes Paisley who will take on the role of vice chairman of DMW.
Amatek Inc. has named Denise M. Schier as vice president and general manager of Commercial Floor Care. She was division vice president and business unit manager of sensors and monitoring products for Ametek Aerospace.
Kent Prokop, a 27-year veteran of the freight logistics and transportation industry, has been named president of the Warehousing and Distribution unit of Pacer International Inc.
Brian A. Rener has been named vice president and chief electrical engineer for the mechanical/electrical/plumbing engineering unit of A. Epstein and Sons International Inc. Richard J. Kooy has been named vice president of business development.
Thomas S. Wujek has been named vice president, sales & operations, for Flexible Steel Lacing Co. (Flexco). Michael J. Stein has been named director of marketing.
Steve Ackerman, president of FKI Logistex North America, announced the appointment of three senior executives as presidents of its North America divisions. Dave Baker was named president of the Manufacturing Systems Div., John Kelly was named president of the Airport, Post & Parcel Div., and John Westendorf was named president of the Warehouse & Distribution Div. Other promotions include Stephen Causey to vice president, finance, and Stephen Legg to vice president, business development.
Metrologic Instruments Inc. has promoted Benny Noens to chief executive officer and president. He will also join the company's Board of Directors. C. Harry Knowles, who founded Metrologic, will continue to serve as chairman of the board.
APL has appointed Koichi Maeda managing director of its Japan business. His career includes senior positions in human resources, marketing, business planning and systems coordination.
James Cady, president and CEO of Staktek Holdings Inc., was named an Austin, Texas, regional winner of Ernst & Young's 2004 Entrepreneur of the Year competition. He will now be considered for National Entrepreneur of the Year award.
Checkpoint Systems Inc. has hired David Donnan as president of its North America division. He will also lead the newly formed Strategy Council and have responsibility worldwide for RFID, marketing and communications.
Conrad J. Heilman Jr. has been promoted to vice president of Tunnell Consulting and to director of the firm's pharmaceutical/life sciences technical practice. He replaces Joseph S. Tempio in the director's position. Tempio was recently elected president of the firm.
Rob Douglas was recently appointed president of Psion Teklogix Americas. He will focus on expanding the company’s position in the Americas mobile computing market.