Supply Chain Executive Survey: Economic Recovery is Close, But Companies Not Fully Ready to Benefit

A recent study of supply chain executives working for retail, high-technology, pharmaceutical and consumer product companies stated that a larger percentage expected the economy of the United States to make a turnaround in either the fourth quarter of 2009 or the second quarter of 2010.

Carried out in September 2009 in Chicago at the Supply Chain Leadership Forum, the survey indicates that approximately 40% expected GDP growth to be positive in 2010 while 30% expected the economy to ‘make it’ during the end of 2009.

Bruce Tompkins, Executive Director of the Supply Chain Consortium commenting on the results of the study said the outlook of the economy turnaround depended heavily on the industry itself. He further explained that the food and beverage sector was already witnessing some growth, while retail and high-tech industries were still waiting for positive growth figures to show.

The ‘Great Comeback’ seems to be commonly accepted to happen fairly soon, although over 90% of the respondents stated that they had not developed anything significant with regards to a ‘Comeback’ plan or any other related initiatives to take advantage of a better economy.

Tompkins pointed out that the smarter companies in the industry had already adopted a recovery model, way before their competitors. This model involves a strong recovery plan that not only takes into account the recession ending time, but also one that pushes them to the fore to achieve positive growth. Tompkins also stated that some companies that were heavily affected by the economic instability have also adopted fairly aggressive improvements to their supply chains in order to maximize on their positions in the competitive market.

Fedex Completes Acquisition of Watkins Motor Lines

A recent corporate announcement by FedEx Corp confirmed the completion of the acquisition of Watkins Motor Lines and its related affiliates for an outright purchase of $780 million. Watkins Motor Lines is a private company, which is based in Lakeland, Fla. – and is one of the top providers of long haul LTL services, with annual revenue figures at over $1 billion.

The operations of the company include service centers numbering 140, and over 14,000 trailers and tractors – all of which will now be rebranded as FedEx National LTL and FedEx Freight Canada. The rebranding of both these operations is already underway.

Commenting on the recent acquisition, Frederick W. Smith, FedEx’s Chairman, President and Chief Executive Officer said that the FedEx group could now offer its customers even greater flexibility and value, especially in the ‘less than truckload’ sector. The purchase of Watkins Motor Lines, he said, would now enable FedEx to offer customers the highly requested long haul LTL services for sometime now. Customers will also have on offer bundled transportation solutions.

FedEx Freight Canada and FedEx National LTL both operate their own separate networks under the FedEx Freight sector. This sector also includes FedEx Custom Critical, FedEx Freight and Caribbean Transportation Services – with a grand total of 500 centers. Regional and long haul customer needs are met by around 54,000 tractors and trailers.

Douglas G. Duncan, FedEx Freight’s President and Chief Executive Officer said that the company was also working towards growing their LTL market share within North America.