Third-party logistics services are supposed to deliver efficiencies that companies hope will boost their bottom lines. That is why, when considering a 3PL or logistics technology contract, companies often want to evaluate it in terms of its return on investment. But as the economy softens, companies are focusing more on the price of those services, which some see as a disturbing trend. In a recent survey of international and domestic shippers by J.P. Morgan Securities, price ranked No.1 among factors companies use when awarding logistics contracts. Potential savings ranked 5th behind geographical scope, business expertise and breadth of service. Greg Burns, J.P. Morgan logistics analyst, wrote, 'It is not surprising that in a weak economy with profit margins under pressure, 3PL customers are placing increasing emphasis on the price of supply-chain services, even though we believe that, long term, this may result in a flawed supply-chain strategy.' Ports and shipping lines that longed for a peak season finally got what they wanted. After a lackluster eight months, cargo volumes at West Coast ports suddenly surged in mid-September. The week of Sept. 17 'was our best volume week ever,' said Douglas A. Tilden, president of Marine Terminals Corp., which operates container terminals at the major West Coast gateways. Truckers reported longer lines at many terminals. Some terminals returned to stacking containers instead of storing them on chassis. Spot shortages of equipment were also reported. Importers said some vessels were over-booked in Hong Kong. However, few shipments have been 'rolled' to later voyages, because there still is ample space on many U.S.-bound ships. 'We're definitely busier than we have been, although not quite as busy as I thought we'd be,' said Cliff Katab, senior manager at the Triangle Network, a third-party logistics company and warehouse operator. The general feeling is that the peak season will last for only a few more weeks. However, shipping executives hope even a short bout of rolled cargo and equipment shortages may be enough to discourage importers from seeking still lower rates in the eastbound Pacific.
John Bowers, president of the International Longshoremen's Association, and James A. Capo, president of the New York Shipping Association, have announced the creation of the Port of New York/New Jersey Port Community Fund to assist people and families affected by the attack on the World Trade Center. The fund will provide contributions to survivors and the families of victims who are employees of the Port Authority of New York and New Jersey or of port and maritime businesses. More than $100,000 has already been pledged by the maritime community. Donations, made payable to PORT COMMUNITY FUND, should be mailed to:Port Community Fund
118 Export St.
Port Newark, N.J. 07114
A large number of U.S. Customs personnel normally assigned to commercial operations, perhaps as many as 400, have been temporarily reassigned to security duties, creating backlogs in normal import operations. That, combined with the destruction of Customs' New York headquarters at the World Trade Center, is creating disruptions in the process of issuing 30-day binding rulings, as well as drawback and textile programs.
JoC Week welcomes letters to the editor. Articles can be e-mailed to Peter Tirschwell at ptirschwell
oc.com, or sent via regular mail to him at JoC Week, 33 Washington St., 13th Floor, Newark, N.J. 07102.