Prorail, the railway infrastructure manager in the Netherlands, will increase the tariffs for rail transportation dramatically. For the most heaviest trains (coal and iron transports) the tariffs will increase from 0,89 /km to approx. 3,20 /km. The increased tariffs will have it’s impact to European transport prices, due to the fact that the Dutch Railway Network connects the main port Rotterdam to the other European countries. It is expected that the new prices will create 15-25% lesser demand for rail transportation.

Many companies have seen measurable improvements within their warehouse operations, but Supply Chain Execution (SCE) goes beyond the four walls to address other improvements and benefits. In fact, tangible results can be seen everywhere, including the financial and customer service areas of your operation.

The tangible benefits of an SCE application include reductions in inventory, staffing, transportation costs and customer chargebacks. You can also realize increases and improvements in space utilization, customer service, communication, accuracy and accountability. Along with the tangible benefits, SCE brings several intangible benefits as well, such as improved decision-making abilities, reduced ‘firefighting’ and improved employee satisfaction. Supply chain execution can take your distribution operation to a new level. What used to be achieved only within the four walls of the warehouse can now extend across your entire operation. By being aware of the current supply chain execution trends and best practices, and by utilizing the software, systems and resources available, you can achieve maximum results across your entire supply chain, especially in productivity and profitability.

SCE Industry Trends

In all cases, Supply Chain should be an IT priority. IT should implement new SCE solutions and the solution should integrate with your trading partners with EDI or a direct connect model, leading to cost reductions. (i.e. in accounts payable or receivable). The use of open standards will also reduce integration costs. The gap between supply chain planning and execution is closing and over time information learned from SCE may change SCP. Traditionally, SCP reports weekly, monthly and quarterly, while SCE transactions are recorded in days, hours and minutes. SCP systems are gathering SCE information via intelligent agents, filters for ‘exception’ execution data, and data gathering tools from carriers, suppliers, customers and plants. You can optimize your supply chain by using analytical information. Historically, SCE solutions (since each product was initially developed as an execution system) do not have solid reporting. While detailed data exists within the application, many tools have not yet been created for more detailed inventory analysis, historical reporting, and flexible productivity tracking. However, in the last few years, SCE solutions have been improving in this area using traditional reporting and business intelligence concepts. Utilizing the data to create more flexible reporting will improve decision support and knowledge management, resulting in a strategic advantage over your competition.

SCE Best Practice Trends

A logistics/fulfillment focus involves continued collaboration with suppliers, customers, and carriers. Such collaboration solutions result in the ability to integrate data from carriers, consolidators, freight forwarders and customs brokers. Having this collaboration increases operational productivity through information flow and improves management of Homeland Security requirements. From a distribution perspective (especially in the consumer goods and retail industries), Distribution Center (DC) management is being located near manufacturers, often in the Orient. Then, container loading is being handled direct-to-regional-DC and direct-to-store to reduce shipment and handling costs.

Vopak starts development and construction of new chemicals terminal in Zhangzijagang, China and will be operational in 2008. The Koninklijke Vopak N.V. (Royal Vopak) announces that it has reached agreement with the local authorities of Zhangzijagang in Jiangsu Province, China, on the long-term lease of around 48 hectares of land to build a state-of-the-art terminal. In this bonded area in the industrial park of the Free Trade Zone in Zhangzijagang, Vopak will start development and construction of a new chemicals terminal.

Zhangzijagang is situated on the southern banks of the Yangtze River, about 140 kilometres northwest of Shanghai, in the Yangtze River Delta area. This area accounts for approximately 20% of China?s Gross National Product and 25% of the country?s total industrial output.

The terminal will serve partly as an industrial terminal supporting the manufacturing activities of the multinational chemical companies in the industrial park where it will be built. Furthermore, the excellent location of Zhangzijagang will enable the terminal to offer break bulk services of chemicals in the Yangtze River Delta area.

In the first phase, the terminal will have a storage capacity of around 200,000 cbm and will be taken into operation in 2008. At present, the design and scope of the terminal are being finalised in order to start the selection process of the engineering/construction company.

Vopak has been active in China since the beginning of the 1990s and has since established a network of five terminals, in different joint ventures, along the Chinese coastline. The new terminal in Zhangzijagang will be the first Vopak terminal in China that is fully-owned by the company.

Schneider Logistics, Inc., an international lead logistics provider and part of the Schneider National enterprise, announced that it has signed a definitive agreement to acquire American Port Services, a U.S. provider of port transloading/deconsolidation, warehousing, and distribution services. Upon completion, Schneider will have a significant presence in major U.S. ports and will be the first national full truckload provider to offer transloading services.

Adrian Gonzalez, ARC Advisory Group, commented, “As highlighted in ARC’s recent market study on the 3PL industry, Logistics Service Providers must reexamine and redefine their role and value proposition in this global environment. There is a lot of variability and ‘visibility gaps’ in managing global supply chains, because there are many parties involved with relatively poor interoperability of processes and systems. The coming together of Schneider Logistics and APS is indicative a larger trend occurring in the 3PL industry, namely the consolidation of control over greater portions of the end-to-end global trade process. By consolidating control and resolving interoperability issues, logistics service providers like Schneider aim to provide clients with more reliable and consistent services which ultimately translate into lower costs, shorter cycle times, and improved flexibility.”

When event management systems first came on the scene earlier this decade, software vendors billed it as the next “killer application.” Often referred to simply as “EMS,” the stand-alone products were designed to alert users via e-mail or fax messages when specified supply chain events occurred. Every shipper would want to buy an EMS, software vendors thought, because the programs would provide visibility from the time an order was taken to the time it arrived at the customer’s door.

The future looked so bright for EMS, in fact, that in 2003, when ARC Advisory Group last completed a study of supply chain event management (SCEM) software, the Dedham, Mass.-based research firm forecast a 50 percent-plus annual increase in sales. With companies like Descartes Systems and Yantra (acquired by Sterling Commerce earlier this year) leading the charge, SCEM sales were projected to reach $1.4 billion by 2006, recalls Steve Banker, ARC’s service director of supply chain management. For its 2003 study, ARC looked only at the logistics visibility and control aspects of SCEM, with a focus on inbound, outbound, and reverse logistics activities, segments that comprised a $200 million market that had grown at a 29 percent cumulative rate since 2000, Banker says.

SCEM software continues to enjoy brisk sales growth, but not as a stand-alone application. Those early dreams were folded into a larger one when software vendors realized that EMS did not have the “legs” to stand on its own. Today, a number of software vendors have integrated EMS into applications such as warehouse management (WMS), transportation management (TMS), and global trade management (GTM) systems.

Because EMS depends in large part on data gathered through WMS, TMS, and GTM applications, it makes sense that software vendors have woven event management features into such offerings. EMS products require users to specify what kind of information they want to receive and to set acceptable time parameters for various events in the order-to-delivery process. These events include normally occurring activities, such as shipment pickups and deliveries, as well as unusual or potentially problematic events. Shippers can specify, for example, that if an order arrives by a certain time, the product must ship from the warehouse and arrive at the customer’s premises within a certain timeframe.

Radio frequency identification technology isn’t going away any time soon. But some of the companies that sell the stuff might be. Even as uses for the digital barcodes and tracking chips proliferate, the radio frequency identification industry may be on the verge of a shakeup that could hit the Dallas area harder than others. Experts say that while consolidations, bankruptcies and mergers may sound traumatic, they would actually indicate the industry is maturing. And opportunities will continue to blossom for start-ups focused on new uses for the technology.

By all appearances, the industry seems to be growing faster. For example, 135 companies had exhibits at the RFID World conference in Grapevine, Texas, earlier this year compared with 80 last year in Denver, and the show floor at the Gaylord Texan Resort & Convention Center was crammed with more than 3,000 attendees. At the inaugural conference in Fort Lauderdale in 2003, there were about 400 attendees.

Many of the new firms, both in Dallas and nationwide, sprang up to cater to companies trying to meet Wal-Mart Stores Inc.’s RFID mandate. Wal-Mart has already required its largest suppliers to start using radio frequency technology, and is now pushing its smaller suppliers to adopt it as well. While many suppliers simply did the bare minimum to comply initially, they now hope to use radio frequency tags and readers to help their own supply chains operate as efficiently as Wal-Mart’s.

As a result, the less sophisticated start-up radio frequency firms that just stick tags on boxes without helping a company overhaul its supply chain are going to see demand decline. Compliance mandates from companies such as Wal-Mart and agencies such as the Defense Department are still driving most of the demand for radio frequency products and services. But over the next two years, most of the affected companies will be in compliance and will start using RFID technologies internally. The potential return on investment will be too big for them to ignore.

But even as the industry matures new uses will pop up, creating new opportunities for start-up firms. It is also expected that new companies perfecting battery technology for some of the more powerful RFID tags, as well as more software firms creating programs to help companies integrate their radio frequency data with the rest of their infrastructure.

PierPASS Inc. announced today that OffPeak, the new program to reduce congestion at the Port of Los Angeles and Port of Long Beach, will begin on Saturday, July 23, 2005. PierPASS also confirmed OffPeak’s night and weekend hours of operation and announced an accelerated rollout of the program, establishing five full-service shifts during the first week of operation.

PierPASS is a not-for-profit company created by marine terminal operators to reduce congestion and improve air quality in and around the Los Angeles and Long Beach ports. Marine terminal operators at the Los Angeles and Long Beach ports created PierPASS in 2004 in response to community and industry requests to address congestion and air quality issues in and around the ports. By providing a financial incentive for cargo operations on nights and weekends, OffPeak aims to reduce daytime truck trips and improve air quality.

The OffPeak shifts will be Monday through Thursday from 6:00 p.m. to 3:00 a.m. and Saturday from 8:00 a.m. to 6:00 p.m. The first OffPeak shift will be Saturday, July 23. Beginning on Monday, July 25, PierPASS will assess a “Traffic Mitigation Fee” on all loaded containers entering or exiting marine terminal gates by road during peak daytime hours (Monday through Friday, 3:00 a.m. to 6:00 p.m.). The fee has been set at $40 per TEU (20-foot equivalent unit), or $80 for a 40-foot container.

PierPASS had initially planned for a ramp-up period, with off-peak shifts added gradually. However, the terminal operators have determined that launching all shifts during the first week will present fewer logistical challenges than a phased-in launch. The ramp-up period has now been eliminated; all 12 international container terminals at the two ports will now launch five full OffPeak shifts starting July 23.

The Traffic Mitigation Fee payments collected, minus PierPASS overhead and refunds for cargo moving during OffPeak hours, will be allocated by PierPASS to the marine terminals to help offset their incremental costs to operate the extra gates. The estimated annual cost to the terminal operators of operating these extra gates is $156 million to $160 million. PierPASS is a not-for-profit company.

PierPASS will not assess a fee for empty containers and chassis, domestic containers, or transshipment to other ports. Nor will it assess a fee for intermodal containers that depart or arrive via the Alameda Corridor for import or export, or that pay an ACTA fee. The beneficial cargo owners (shippers, consignees, or their agents) are responsible for payment of the fee. The trucking community and water carriers are not responsible for the payment.

After July 23, the Traffic Mitigation Fee will be required for cargo movement through the ports during peak hours. Only registered users will be able to pay this fee. Users of the ports (such as cargo owners, brokers, truckers and logistics companies) can register for OffPeak through the registration site at www.pierpass-tmf.org

This glossary was originally compiled in conjunction with a course on Logistics and Supply Chain Management at the University of Chicago. Now it is a free download for you.

Kuehne & Nagel, the Switzerland-based international freight forwarder and logistics provider, has introduced three new door-to-door products for its airfreight service. KN Express, KN Expert and KN Extend offer a range of transit times and service features, while providing freight-rate information online.

With the introduction of new standardised airfreight products, Kuehne + Nagel is meeting its customers? growing demand for plannable and controllable airfreight processes. Leading the way ahead, the new products include a simplified rate structure and a time-defined delivery promise.

Major airfreight carriers, logistics providers and handling agents have joined under the ?Cargo 2000? initiative with the aim of defining uniform quality standards for airfreight forwarding, and to create standardised and controllable operating procedures. Kuehne + Nagel is at the forefront of this endeavour. As the only logistics provider so far certified worldwide to Cargo 2000 phase 2, the company currently plans and monitors each airfreight shipment from door to door automatically.

KN Express, KN Expert, and KN Extend, the new door-to-door products with differential transit times, feature immediate and all-inclusive freight rate information online. This increases cost transparency and enhances communication processes.

An individual route map defining the precise time of each process step is generated for every shipment. The actual shipment is electronically monitored against this route map during transport. Any deviation can thus be identified at an early stage, enabling prompt corrective measures. All route maps are fully displayed in Kuehne + Nagel?s track and trace system, KN Login, and customers have access via the internet to current transport status data as well as historical and anticipated shipment cycle information. This allows for seamless visibility of the entire transport process.

The new products will be lauched as of July 2005 at initially eight stations including London, Paris, Amsterdam, Chicago, Tokyo and Atlanta, followed by their global rollout.

With more than 23,000 employees at 620 locations in 98 countries, the Kuehne + Nagel Group is one of the world?s leading logistics companies. Its strong market position lies in the seafreight, airfreight and contract logistics businesses, with a clear focus on providing IT-based supply chain management services.

APHIS has published the Final Rule for new requirements concerning the importation of wood packaging material in the US. The implementation date for regulatory enforcement shall be September 16, 2005. The delay between publication and implementation shall allow an appropriate amount of time for countries to establish programs to become compliant with ISPM 15 and the Final Rule.

APHIS has set standards for Wood Packaging Material imported into the USA through 7 CFR 319.40 - Importation of Wood Packaging Material, as published on September 16, 2004. This rule states that all regulated wood packaging material shall be appropriately treated and marked under an official program developed and overseen by the National Plant Protection Organization (NPPO) in the country of export.

Until September 16, 2005, as the designated enforcement date, APHIS will follow its current requirements for imported wood packaging material. Please note that PPQ is in the process of updating all references to SOLID WOOD PACKAGING to reflect the September 16, 2004 rule for REGULATED WOOD PACKING MATERIAL.

The Animal and Plant Health inspection Service (APHIS) is responsible for protecting and promoting U.S. agricultural health, administering the Animal Welfare Act, and carrying out wildlife damage management activities.