TSC Consultant James Bisaha on Parcel Shipping

Posted on June 25th, 2014 by Ed Blickstein

Strategies for Managing the FedEx Dimensional Weight Change Federal Express recently announced that it would be implementing dimensional weight pricing on its ground shipments effective January 1st, 2015.    What is dimensional weight pricing?  Dimensional weight pricing takes the space of the package and converts into pounds. Shippers are charged the higher of the actual weight of the package or the implied DIM weight of the package.  Dimensional weight pricing has been a standard for air shipments and international shipments.  UPS and FedEx rolled out dimensional weight pricing in 2007 for ground shipments over 3 cubic feet or 5184 cubic inches.  In addition, both companies apply a large package surcharge for shipments greater than 165 inches.  UPS is expected to change dimensional weight pricing as well.  The US Postal Service also utilizes dimensional pricing; however, it is based upon zones and is more complicated. If you are a FedEx customer, here are some steps that you can take to prepare your firm for the upcoming changes. More to follow this when UPS announces its approach to dimensional pricing.

Parcel Contracts:  Review and understand your parcel contract.  Do you have an in-depth knowledge of the terms and conditions of the contract?  Do you know your annual small package spend?  What is spent by individual each of your product lines: express, ground and international?  What are the shipping patterns and what is the volume by zones? You may want to consider zone skipping?  Knowledge is power and your firm needs to understand what it ships and where it ships.  What is your current package discount and is it tied to specific volumes? Be mindful of accessorial charges, last count FedEx and UPS had 44 different types of accessorial charges.  Examples of accessorial charges that can add up quickly are oversized package charges and rural delivery surcharges.

Packaging:  Conduct an in-depth review of your packaging. Many companies utilize seven or eight different size boxes.  You may need to change your packaging by utilizing flat boxes or envelopes for small light weight products and get rid of dead space after allowing for protection.  Accurate product dimensions are extremely important.  It is important to have accurate product dimensions stored in your warehouse management system.

Data Analysis:  Information is power.  It is extremely important that your firm have a shipment history with product type, zone, charges, dimensions and weights.  If you don’t have your shipment history, ask your parcel carrier to provide this information.

Processes and Procedures:   Shipping Manual with documented processes and procedures on how to package and ship products should be a requirement for your business.   With the dimensional weight changes, small light weight items packaged in large boxes will incur a dimensional weight charge. Your firm will be spending additional money.  In addition, your firm may want to review and see if some express shipments can be sent via ground reducing costs.  Training of the shipping team is extremely important to keep costs in check

By James Bisaha, Senior Consultant – Supply & Logistics June 12, 2014 www.transconsulting.com

US Oil Exports & Energy Prices – The Iragi Effect

Posted on June 25th, 2014 by Ed Blickstein

TODAY IN ENERGY: Monday, June 16, 2014, EIA

U.S. crude exports in April rise to highest level in 15 years

The United States exported 268,000 barrels per day (b/d) of crude oil in April (the latest data available from the U.S. Census Bureau), the highest level of exports in 15 years. Exports have increased sharply since the start of 2013 and have exceeded 200,000 b/d in five of the past six months. The increase in crude exports is largely the result of rising U.S. crude production, which was 8.0 million b/d in February.

Intensifying Iraqi Turmoil Poses Another Threat to Supply in Tight Global Oil Market

By Patrick Burnson, Executive Editor

Supply Chain Management Review

June 17, 2014

IHS Energy experts say oil markets have turned their attention squarely to Iraq and the fast-moving attacks of the Islamic State in Iraq and Syria (ISIS). The impact on global supply chains has yet to be measured.

Global oil prices have increased by several dollars per barrel in the past few days, with Brent front-month futures rising above $114 in intra-day trading late last week. Prices will remain elevated during this crisis, all else equal.

So far, the ISIS offensive has been largely confined to the north and west of Iraq—still some distance away from the epicenter of the country’s oil production in the south.

Derik Andreoli, Ph.D.c., a senior analyst at Mercator International LLC, says time will tell how this spells out for supply chain managers.

“It all depends on how long the prices remain elevated,” he says. “But in general, elevated oil prices push through to elevated bunker prices.”

OPEC spare capacity is currently at the lower end of the market’s comfort zone of 2.5- to 4.5 million barrels per day (mbd) as market balancers Saudi Arabia, Kuwait, and the United Arab Emirates continue producing at high levels in part to offset some 3.5 mbd of supply offline globally.

The global balance is expected to tighten this summer as demand picks up seasonally.

Energy analysts say further global oil price increases could spur discussions of releasing oil from strategic reserves. New supply outages in Iraq would likely push global oil prices higher still—possibly toward $120, a level that could trigger discussions among consuming countries of tapping strategic stocks.

Logistics Opportunities – They Are Real

Posted on June 25th, 2014 by Ed Blickstein

FORTUNE — How can a $1.3 trillion industry, getting bigger every year, be hidden in plain sight? By Anne Fisher @anbfisher ,May 1, 2014, 9:00 AM EDT.

Blog Note: This headline really got my attention because when it comes to jobs many people have a misinformed opinion about logistics as a career. They think of transportation, warehousing – logistics – as old line businesses that are stale and low tech. Of course this is not the case and this article in Fortune says it all very well. Here is what Anne Fisher wrote:

Easy. The vast U.S. logistics business, which delivers 48 million tons of freight (worth about $48 billion) daily and already employs roughly 6 million people, operates mostly behind the scenes.

“When you order something from, say, Amazon, you know it arrives on your doorstep in two days, but most people don’t think about how,” observes George Prest, CEO of logistics trade group Material Handling Industry (MHI). He adds that the field gets overlooked by new grads in particular, who think of supply-chain work — if they think of it at all — as “a guy driving a forklift in a dusty old factory.”

That outdated image is a huge hurdle for an industry that badly needs new talent in high tech, analytics, robotics, and engineering. Career changers, take note: Seasoned managers, marketers, data analysts, and human resources executives are also in demand. “There are currently six to eight management jobs available for each applicant we get, and the median salary is about $80,000,” notes Prest — and that’s even before the wave of boomer retirements the MHI projects over the next few years. In total, says a new MHI report, the logistics business will be looking to fill about 1.4 million jobs, or roughly 270,000 per year, by 2018.

Blog Contributor: Edward Blickstein


Posted on May 5th, 2014 by Ed Blickstein

U.S Fuel Pricing – April 28, 2014

 The U.S. average diesel fuel price rose by less than a penny to $3.98 per gallon, 12 cents more than the same time last year.

 The West Coast price increased three cents to $4.06 per gallon. The Rocky Mountain price rose by less than a penny to remain at $3.98 per gallon, while Gulf Coast and Midwest prices remained flat, at $3.82 per gallon and $3.95 per gallon respectively.

Prices on the East Coast showed the only decline, falling half a cent to remain at $4.07 per gallon.

Receipts of domestic crude oil at East Coast (PADD 1) refineries in January were approximately equal to receipts of foreign crude oil (Figure 1), reflecting a very significant change from recent experience. In January 2013, domestic crude oil was only 18% of total PADD 1 crude receipts, and in January 2012 domestic crude accounted for just 5% of PADD 1 receipts.

Rising U.S. crude oil production in the Bakken formation in North Dakota combined with the expansion of crude-by-rail infrastructure, which has facilitated movement of Bakken crude to PADD 1, have contributed to the increase in domestic crude oil supply to East Coast refineries. http://www.eia.gov/


Economics & Politics Also Drive Fuel Pricing

Posted on February 11th, 2014 by Ed Blickstein

The Effect of Politics & Economic News on Energy Prices – Feb 11, 2014

Yahoo Finance

Natural Gas Prices jumped more than $1 after Yellen’s remarks; price may find support near $4.28 per Million British Thermal Units (MBTU) on the Comex division of the New York Mercantile Exchange.

• Crude oil futures rose to $100, huge resistance is seen near 100.73

• Yellen says recovery in labor market is far from complete

Natural gas and crude oil futures rose on Tuesday as financial markets took Janet Yellen’s remarks about the labor market as dovish and consequently, the US Dollar (USD) slid.

Only a “significant change in economic outlook”, proclaimed Yellen, could prompt the Federal Open Market Committee (FOMC) to slow the current pace of tapering in its monthly asset purchase program worth $65 billion. Although recovery in the labor market is not very impressive, growth picked up considerably, Yellen said. Financial markets took these remarks as dovish because the pace of tapering is linked to recovery in the labor market. Yellen’s remarks came days after a Labor Department report showed that the US economy could create far less jobs in January than expected. However, the unemployment rate fell to 6.6% last month, very close to the Fed’s 6.5% threshold, after which a policy shift might be expected. FOMC members will meet on March 18-19, where they will analyze both January and February job data before voting on the pace of the asset purchase program.

Commodity Prices & Oil Forecast




NFL stadiums produce onsite energy with solar PV projects – Super Bowl 2014

Posted on February 3rd, 2014 by Ed Blickstein

Source: U.S. Energy Information Administration, based on information received from McKinstry (for CenturyLink Field),

a maker of PV systems, and NRG Energy (for all other stadiums)

On February 2, MetLife Stadium in East Rutherford, New Jersey, will host Super Bowl XLVIII. During the game, aerial footage will likely

show 916 external LED fixtures powered by 1,350 solar photovoltaic (PV) panels with a total generating capacity of 276 kilowatts (kW).

MetLife Stadium, home to the New York Jets and New York Giants, opened in 2010, and its PV installation was completed in August 2012.

The total capacity of the PV installations is typically dwarfed by the energy needs of powering a football stadium during games and other

events, but these onsite energy systems can help reduce the amount of electricity pulled from the local distribution grid.

When stadiums are not in use, their PV systems can feed electricity into the local grid.

To date, PV installation projects at NFL facilities are concentrated in the northeast region of the United States and on the West Coast.

SCROLL DOWN!  Great picture.

Principal contributors: Dale Sweetnam, April Lee