Mark Tarzwell VP Supply Chain Ahold USA
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1 Mark Tarzwell VP Supply Chain Ahold USA
2 Source: YouTube, Star Trek
3 Today Amazon is to logistics what Walmart was to retail in the 1980 s and 1990 s Amazon Prime Air is committed to making a delivery within 30 minutes of order US online retail sales are expected to grow 57% by 2018 to $414B UAS- Unmanned Aircraft Systems weighing less than 50 lbs. can travel greater than 10 miles Source: NY Times, LA Times
4 Source: Huffington Post.com
5 Phil Misener the VP Global Public Safety at Amazon said this in the NY Times, :US regulators are moving way too slowly in the rapidly evolving development of commercial drones. Amazon Prime Air has envisioned buzzing fleets of miniature helicopters soaring far beyond the view of Amazon warehouses. According to Certify Expense Management Systems 47% of expenses in March for inner city travel was for Uber, up from just 14% YAG and in it s home town, San Francisco 71% Source: NY times, Associated Press
6 Source:Freedom Lab
7 1956 Bell Laboratories Push button phone, fax, cell phone, ATM Internet 1990 s www. Digital cameras Smart technology Instant gratification..
8 OTR- Over the road Team drivers, lonely nighters, locals Railroad Intermodal, Supercars, freight carriers Shipping lines Air freight UPS, FedEx, USPS, DHL, Uber, Sidecar
9 Industry employs 8.9M, 3.5M drivers 15.5M trucks operate in US, 2M tractor trailers 1.2M trucking companies, 90% > 6 units 70% of all freight rides on trucks $671B worth of manufactured and retail goods Drivers logged over 440B miles OTR loads down 16% since 2006 TL market >700 mile distance= $40B Source: ATH Track, Truck info.net
10 Large fixed costs High capital need Driver shortage, very high people turnover 100% turnover last 10 years, 35,000 needed Pay not keeping up with cost of living Lost 160,000 drivers to construction since 2011 Today most entry level drivers want local work Source: USDOT, Truck Data.com
11 State by state regulations Insurance minimums have increased Lower speed restrictions ELD electronic log devices Stringent temperature requirements National drug scan clearinghouse Excessive delivery penalties and fines Increased safety enforcement Hours of service changes Source: USDOT, joc.com
12 14 Hours of Service, 840 minutes [VALUE] [VALUE] [VALUE] [VALUE] [VALUE] [VALUE] Pre trip Personal Dwell Void Dead time Drive time Source: Truck Stop
13 Tractor Paradigm shift how many years can I run a truck now how many years should I? LCO- achieve lowest cost of operation Performance metrics modeling and monitoring Data driven decisions Components: Maintenance/Repairs 9% Depreciation 21% Fuel cost 70% Source: Fleet Advantage
14 2014 Federal mandate for oil savings standards that Heavy Duty Trucks must achieve 20% reduction in fuel consumption and GHG (Greenhouse gas) emissions by 2018 Saves 4 gallons per 100 miles driven Reduce consumption by 530M barrels of oil GHG reduction of 270M metric tons Savings of $50B/year 2014 vs 2018 $75,000 in operating savings over life of tractor Source: Fleet Advantage
15 Much of today s rail is Intermodal or piggyback vs off loading cars or supercars through spurs at manufacturing or distribution sites Railroad industry is usually a good indicator of the underlying North American economy Agriculture commodities like wheat and corn are using more rail Growth of railroad sector expected to outpace the economy Refer loads up 20.3% since 2006 Source: Intermodal.com, BB&TMC
16 Intermodal has experienced 12 straight years of load growth.+6% saw commodity carloads up 5.5% Intermodal $14B 2014 expected $20B 2019 Reduces carbon foot by 60% vs. OTR Price competitive Use lightweight day cabs to complete delivery Easier to find dray drivers- for intermediate transport..local runs Growing networks allow more flexibility, top 10 companies from 65% in 08 to 73% in 13 Source: Intermodal.com, BB&TMC, joc.com
17 Railroad consolidation seems to always affect service Dwell time up 20% in 2014 Longer timeline than OTR Shipment inflexibility Dray costs and driver availability 5772 miles Source: wilipedia.com
18 Shipping industry that drives the world economy has been flat or declining for years Average cargo vessel is 14,000 TEU but today s new fleets up to 20,000 TEU Source: United cargo
19 15 largest carriers saw revenue down 3% in 2014 but EBITDA increase 7% by reducing operating costs 4% and load optimization Debt declined in 2013 from $107B to $91B Carriers approaching limits of cost optimization Expansion of Panama and Suez Canals will be instrumental in East Coast receiving Container ships travel ¾ of the way to the moon and back annually Source: NY times, Bloomberg, containerstatistics.com
20 A T Kearney reports the Global e-commerce Index for 2014 shows US growth at 15% leading the world s previous leaders China and Japan Annual average growth for e-commence 15.6% since 2006 On-line food was $6B in 2012 and expected to be $10B by 2017, almost doubled in 5 years Retail customer traffic down significantly Source: Statistica.com
21 UPS USPS DHL Fedex Peapod Amazon Amazon Fresh Fresh Direct Grub Hub Uber Ship Station Instacart Kale Cart Blue Apron Domino s Amazon Air
22 Source: Robot Center
23 Thank you
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