Welcome to the Freight Industry April Roundup, a series of articles where we gather breaking news and important information from the Logistics Industry and add our unique perspective to it. Why waste time searching for news yourself when we do all the work for you? Enjoy!
There was a lot of activity in April so I’ve added some bonus links at the end of the article. Don’t forget to check them out.
Norfolk Southern Profits Surge by 25% in Q1
I kickoff with some great news. My alma mater Norfolk Southern reported a 25% profit jump for the first quarter. This is only two weeks after they beat off the Canadian Pacific attempted hostile takeover.
They posted a first-quarter profit of $387 million, up from $310 million over the same period last year. Compare that to CSX who posted net earnings of $356 million down from $442 million, Union Pacific with net earnings of $979 million down from $1.15 billion, BNSF with net earnings of $784 million down from $1.05 billion and Kansas City Southern reporting $563 million down from $602 million.
All the class one railroads, including Norfolk Southern, cited the same adverse market conditions, weak coal demand, lower intermodal volume and sliding oil prices pinching fuel surcharge fees. However only Norfolk Southern and their erstwhile protagonist Canadian Pacific have put their respective houses in order and are successfully weathering the storm.
MarketWatch, reporting the Norfolk Southern results, state:
“The first-quarter results demonstrate “significant progress” in the company’s strategic plan, Chief Executive James Squires said. “Our team has been committed to streamlining operations, reducing expenses and maintaining superior customer service levels.”
Way to go Norfolk Southern!
UPS Earnings Rise on Increasing E-Commerce Deliveries
UPS first-quarter earnings are $1.13 billion up from $1.03 billion over the same period last year. The daily US package volume increased by nearly 3% and they managed to reduce the average cost per package by 1.9%.
The higher package volume comes from increased e-commerce deliveries to residential customers, notoriously more expensive than business deliveries. However UPS has managed to post this impressive earnings increase by efficiency gains. They have invested in software to improve delivery routes, added package pickup locations to pool deliveries, and is increasing their lost mile deliveries instead of paying USPS to do it for them.
FAA Grants the First Exception for Nighttime Drone Flights
The Federal Aviation Administration has finally approved commercial nighttime drone flights by granting an exemption to Industrial Sky Works.
“The commercial drone industry has been taking some baby steps forward as of late, though operations like drone delivery are still waiting on more FAA guidance before they can take to the skies. Still, any step forward is positive news for the drone industry, resulting in a slow but steady increase in commercial drone operations. It’s likely we’ll see quite a few other industries taking this exemption as a precedent, searching for their own use for drone flights at night.”
Lufthansa Cargo Backs RocketSpace’s New Logistics Accelerator
The tagline for RocketSpace’s Logistics Tech Accelerator is “Be part of the disruption in logistics technology.” As a fully paid-up logistics professional myself I say “welcome to the party – it’s about time!”
“The Logistics Tech Accelerator is one of a series of accelerators RocketSpace plans to launch for specific industry sectors to help established companies revamp their operations by taking advantage of technology tools such as robots, financial technology, connected devices, and Web-based data storage.
The art of moving goods around the globe is ripe for innovation, CEO Logan says, as manufacturers and retailers adjust to the on-demand economy and consumers take next-day delivery for granted.”
You can find out more on RocketSpace’s website. If you recall I announced the launching of the Dynamo accelerator program based in Chattanooga Tennessee in the Freight Industry March Roundup. I’m excited to see our industry targeted for disruption by smart people with plenty of money. Five years down the road this is going to be a very different industry in my very humble opinion!
CMA CGM has launched a new generation of containers designed to ship live lobsters safely by sea in conditions maintaining their natural habitat. Yes the same company the EU has approved can purchase Neptune Orient Lines, and the same company that owns the Megaship Benjamin Franklin. Pretty smart and successful operators you would think. But in the case of the live lobster market maybe not so.
For me steak beats lobster anytime but the combination of the two is a totally different story!
The Federal Motor Carrier Safety Administration (FMCSA) is still looking for hundreds of Volvo trucks recalled last month and subsequently placed out of service over potential steering problems.
New technologies are transforming warehouses, particularly those serving e-commerce, a Zebra Technologies survey of logistics professionals finds.