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March, 2006 | List all Trends articles
Security Spending Spree
The White House's recently released $2.7-trillion proposed spending plan for fiscal 2007 beefs up the budgets of several Department of Homeland Security agencies. The proposed budget offers Customs and Border Patrol (CBP) a 6-percent increase over 2006 to $5.1 billion, the bulk of which would go for Border Patrol personnel and border security technology.
The Transportation Security Administration (TSA) would also receive $5.1 billion, a 1.5-percent increase from the previous year, with $4.6 billion of that to fund aviation security. The Coast Guard is allotted $5.5 billion under the proposed plan, $200 million less than its 2006 budget, because money allocated for Hurricane Katrina rescue and relief was rescinded. Other budget highlights include:
The proposed budget groups together the security infrastructure needs of seaports, trains, trucks, and other transit modes into one consolidated program, which some security officials take issue with. Others argue the additional funding is not enough to adequately address security concerns. "We are pleased the latest budget request represents an increase of $33 million over last year's request. Yet the budget still falls short of what is needed to maintain the nation's ports and harbors," says American Association of Port Authorities CEO Kurt Nagle.
Brand New Brands
What's in a brand? CNF, UPS, and Overnite Corporation will soon find out. Seeking to better position their range of global supply chain services for shippers, these industry giants are in the midst of major rebranding projects. CNF Inc., a $4.2-billion freight transportation and logistics company, recently announced it will change its corporate name to Con-Way Inc., launching an integrated strategy to bring the company's operations under one single identity. "Con-Way is a powerful, respected brand, known for service excellence and shareholder value. It portrays with more clarity who we are today, and what we will be in the future," explains Douglas W. Stotlar, CNF president and CEO. The switch to the Con-Way name –which includes changes to building signs, employee uniforms, vehicle colors and markings, and marketing materials – will not alter services for shippers or the business model of Con-Way regional carriers and other subsidiaries. Following Overnite's acquisition by UPS in August 2005, the company is rebranding as UPS Freight. The acquisition was part of UPS's strategy to provide shippers a broader portfolio of offerings. To understand what the Overnite acquisition and rebranding to UPS Freight means for shippers, Inbound Logistics spoke to Leo Suggs, president and chief executive officer of ground freight operations for Overnite. "We are pleased the latest budget request represents an increase of $33 million over last year's request. Yet the budget still falls short of what is needed to maintain the nation's ports and harbors," says American Association of Port Authorities CEO Kurt Nagle. IL: UPS's acquisition of Overnite Corporation was a milestone for both companies. Why was this deal such a good fit? Suggs: It's a good fit both for the two companies and for shippers. UPS and Overnite will take advantage of their individual strengths to make the other stronger. Overnite immediately gains UPS technology that gives shippers and dispatchers real-time shipment tracking and tracing capability. We'll be able to reduce transit times because dispatchers will now know how much freight is coming into a service center and where loads can quickly be put together and sent to their final destination. And UPS's portfolio now includes a top ground-freight carrier to support its parcel and small package network. The growing number of shippers bringing heavy international shipments in via ocean now have a ground operation that can cover points of entry throughout North America. IL: What are the major service changes and what can Overnite customers expect from the new division? Suggs: First, the acquisition and rebranding by UPS has allowed us to accelerate the integration of Overnite and its subsidiary Motor Cargo, which benefits shippers. By placing customers from both Overnite and Motor Cargo on the same Overnite information systems network, Motor Cargo customers gain greater shipment visibility, and can now trace and track shipments through Overnite's nationwide network. Motor Cargo customers can also take advantage of our service to Mexico, Puerto Rico, and Guam with improved reach into Canada and Alaska. For Overnite customers, the benefit comes in improved transit times and expanded coverage in the western United States. Overall, the new company will make thousands of lane enhancements. IL: What is your role in the new company? Suggs: I will continue to serve as president and chief executive officer of ground freight operations.
Major Mergers
The consolidation trend is continuing throughout the logistics industry, keeping transportation and logistics managers on their toes when it comes to who owns the services and technologies they use to improve supply chain management. Three notable companies recently merged or acquired other companies to increase offerings for customers. Here is a rundown:
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