Welcome to the Freight Industry January 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!
Amazon is a Transportation Service Provider – It’s Official!
As some of you may noticed I’ve been devoting quite a bit of time on speculating about Amazon’s move into the logistics sector, and warning logistics professionals to stay on top of this if they wish to compete.
In a securities filing, Amazon for the first time identified “companies that provide fulfillment and logistics services for themselves or for third parties, whether online or offline” as competition. And it referred to itself as a “transportation service provider.”
In both cases, it marked the first time Amazon included such language in its annual report, known as a 10-K. A spokesman declined to comment beyond the filing.
So Amazon has now admitted on public record that it is a transportation service provider.
Well it’s not often I get to do this – but I told you so!
Some Trucking Companies Successfully Weathered the 2015 Perfect Storm
Swift Transportation Co. it $196.5 million in adjusted earnings, up from $195.7 million in the fourth quarter of 2014.
The move to halt the expansion of the company’s fleet of tractor-trailers was likely behind the cost savings driving Monday’s results, said Art Hatfield, an analyst at Raymond James & Co.
Werner also bucked the industry trend by reporting a 12% increase in net income for the fourth quarter. Their strategy differed from Swift’s in that their truck brokerage division operating income jumped 84% and added $4.4 million to the bottom line.
Diversification “is one of the advantages to having a non-asset based business in addition to your asset-based business,” said Donald Broughton, analyst at Avondale Partners LLC.
Werner’s profit increase is a good reflection of the company’s management through a challenging year for trucking companies, Mr. Broughton said. “Having a well-developed brokerage business allows you to better manage the market conditions.”
Swift Transportation’s Board Is Not Jumping For Joy However!
That’s because CEO Jerry Moyes has been using Swift stock as collateral against loans for other business ventures, and exceeded the limit set by the board.
Mr. Moyes has pledged more than $600 million of his holdings in Swift—a quarter of the outstanding shares—as collateral for loans or in complex loan-like contracts, according to securities filings. The trucking company’s stock tumbled 52% in 2015. The fall triggered margin calls—demands to make shortfalls in the value of collateral—which Mr. Moyes sometimes dealt with by pledging more Swift shares.
I see trouble on the horizon.
New York Area Ports Shut Down as Longshoremen Walk Off the Job
I must’ve missed the memo on this one. Didn’t we just have a damaging West Coast ports strike that negatively impacted the economy and most sectors of the logistics industry? Companies went bankrupt and people lost jobs. So the East Coast longshoremen figure that the West Coast has had all the fun last year and now it’s their turn?
While union officials issued statements saying that the action was a result of a dispute with the Waterfront Commission of New York Harbor, a government agency, over its authority to oversee hiring practices on the docks, two officials familiar with the operation of the port suggested that it may be a backlash against a federal criminal investigation into the union’s leadership.
Tony Soprano back from the dead?