At a popular Supply Chain Summit, several prominent economists presented their findings for the Logistics Economic Outlook for 2016 and beyond. We’ve summarized some of their findings and forecasts in order that our clients and followers might be armed with expert advice on what to expect in the coming years and how to plan on what’s ahead.

Engineers began to fill the new Pacific end locks of the Panama Canal with water in June in preparation of testing the new gates prior to  opening to commercial traffic in April 2016.  This phase puts the 5.3 million dollar canal expansion project on track with the revised timetable for completion.

Fedex has agreed to pay $228 million to settle litigation claiming the company short-changed its drivers on pay and benefits by improperly labeling them as independent contractors. The settlement disclosed on Friday is directly related to a decision against the Memphis, Tennessee based package delivery company in August, when a federal appeals court in Oakland found that Fedex misclassified 2,300 Fedex Ground and Fedex Home Delivery drivers working in California from 2000 to 2007 as independent contractors.  After that ruling,  Fedex immediately sought a judicial review.  Fedex independent contractors have claimed for years that they should be considered employees and not independent contractors.  Under California law the employer / employee relationship is determined largely by the extent of power the employer has over the employee in the performance of their duties.  In the case of the Fedex contractors they were required to work overtime and provide replacement drivers, at their own expense, to fill in for their own sick and vacation time.  Lawyers for the plaintiffs said FedEx shifted hundreds of millions of dollars in costs to the workers, including obtaining and operating Fedex branded trucks, Fedex branded uniforms and Fedex scanners. The attorneys also said the company didn't pay for missed meal and rest periods and overtime compensation. The 9th U.S. Circuit Court of Appeals in Oakland ruled that the workers weren't independent contractors because Fedex controlled the manner in which drivers do their jobs, including scheduling, appearance and equipment requirements. The Ninth Circuit's decision reversed earlier court rulings in favor of Fedex in Indiana.   

In 1962, President John F. Kennedy declared a permanent date to recognize transportation in the United States. He declared that from that week forward, it will always fall during the week in May which contains the third Friday (National Defense Transportation Day), with the Maritime Day falling on the day after, Saturday.

3PL companies strive to minimize transport costs and maximize the abilities of meeting their clients’ most demanding logistics needs. When it comes to logistics, the type of products to be transported, the method of transportation and the distance of transportation determines your ability to derive value from working with a third party logistics company. The efficiency of your supply chain is dependent on the level of efficiency of each component in the supply chain. In any company, you should be able to measure performance; the easiest way to determine whether the process is adding value to your company or not. Benchmarks should be set to determine the acceptable limits of performance given certain business environments.

Newark's mayor is asking for Gov. Chris Christie's help to approve new revenue sources for the struggling city.  The mayor of Newark, New Jersey, has renewed his call for the Port Authority of New York and New Jersey to provide more money for city-owned land the bi-state agency uses for seaport and airport facilities.  Mayor Ras Baraka is effectively holding hostage City owned land if his financial demands go unmet threatening to sell the land currently used by the Port Authority of NY & NJ and Newark Airport.  “We are continuing to push the port authority to be a better partner and a better tenant. Either we get some serious relationship counseling or we have to seek a divorce,” Baraka said in his “State of the City” speech.  “We need the airport and the seaport not to just be in Newark, but we need them to be a part of Newark,” Baraka said. “We need transparency and oversight now. And if they cannot work with us in a way that is both fair and transparent, I’m prepared to put an RFP on the street asking interested parties to buy our seaport. You cannot be in our home and cook on our stove, even if you did bring the food, and eat while we sit in the living room and starve. We want to eat, too.”  Port authority’s chairman, John Degnan, said the agency would consider the suggestion but countered with the fact that the port authority had provided the city with $1.5 billion in payments since 2005.

Not yet, but it's close. Radar and camera technology have introduced the possibility of completely autonomous vehicles. Currently in the commercial truck market vehicles equipped with this his technology are capable of self braking when a vehicle is detected too close in the trucks path. The truck is braked to a safe distance at no more than the required braking rate than necessary. The truck is then throttled up to maintain a safe following distance from the vehicle ahead. Cameras and sensors on either side allow for automated interruption of lane changes when a potential obstruction is approaching at a potentially unsafe rate on either side. Adaptive cruise control uses the same cameras and sensors to allow the truck to be fully autonomous on freeways and major interstates. This however still requires a driver to maneuver the truck on and off the major highways. Anti-Roll Stability Suspension Technology has become an industry standard. Designed to sense lateral deviations in the trucks suspension, a powerful microprocessor executes complex algorithms in fractions of a second to control damping between the vehicle body and the wheels.The algorithms use thirteen attached sensors to compute the programmed cycle of a "Pulse Width Modulated" electrical signal. All of these calculations are done in time to slow the truck to a safe speed for the particular maneuver. In todays trucks the driver is necessary but we'll explore what the next generation brings.

When government regulations come into the scene, no industry is spared, including the transportation industry. Many regulations pertaining to this industry will bring about dramatic and significant changes in the coming years. It is believed the new logistics/transportation laws being enforced will affect the bottom line of carriers, truckers, consignees and shippers. Depending on the end cost, they may even affect consumers down the line. 

Transportation disruptions come in all manner of destruction; mechanical, weather, labor and capital markets.  Savvy logistics providers come away with valuable lessons that will help manage the next service disruption and aid in the design of disruption management strategies.  The 7 month West Coast Ports strike exposed capacity and productivity limitations at the ports of Long Beach and Los Angeles.

The International Longshore and Warehouse Union and port operators along the U.S. West Coast have finally reached a tentative agreement on a new labor contract following months of talks. Since the June 30, 2014 expiration of the labor contract between the ILWU and the Pacific Maritime Association contentious talks have been ongoing.  International Longshore and Warehouse Union reached a deal Friday on a five-year contract, ending nine months of talks. It will take six to eight weeks to relieve cargo congestion at ports from San Diego to Bellingham, Washington, where productivity has been reduced by as much as half since November.  U.S. Labor Secretary Thomas Perez arrived in San Francisco last week to take part in talks and pushed for a resolution on the last significant roadblock, which was the union’s demand to be able to unilaterally fire arbitrators who hear workplace grievances.