For UPS, a golden opportunity at Golden State sorting hub

As part of a $500 million capacity expansion and hub modernization program unveiled in January 2014, UPS late last year installed automated sorting technology at its North Bay distribution facility in Richmond, Calif.

The world’s largest package delivery company and railroads’ biggest intermodal customer chose the North Bay hub as one of the program’s early candidates — which also included a distribution center in Memphis, Tenn. — in part because of rail. Served by BNSF Railway Co., the San Francisco Bay-area facility features an on-site intermodal ramp and relies on rail to handle a large chunk of parcel volume transported throughout California and to many points east of the Rocky Mountains, including Chicago.

The modernization work in Richmond began in early March 2014 and was completed in early November 2014, prior to the peak parcel-shipping season. The hub now features UPS’ next-generation sorting and scanning equipment, which is designed to increase the efficiency of package processing by reducing human error and minimizing the number of times a parcel is handled.

A UPS employee unloads a package at the start of the sorting process and the facility’s automated system then scans and reads data on a label affixed to a package, and moves it automatically throughout the sorting cycle. A parcel then is carried to a dock area, where another worker loads it onto a truck for final delivery. Other packages are loaded into containers for rail shipments.

An outbound train moved by BNSF each Tuesday from UPS’ North Bay hub in Northern California to Chicago must cover 2,500 miles in 54 hours. BNSF Railway Co.

Built 25 years ago, the North Bay hub was located on the Richmond site because it’s near a BNSF line, says Sal Mignano, the facility’s director of operations.

“The proximity to rail allows us flexibility,” he says. “We can sort any volume at any time.”

BNSF’s intermodal ramp at the hub is situated on UPS property — which is unusual — and is the Class I’s only ramp that’s dedicated to one customer, says BNSF Director of Equipment Utilization David Longsworth, who handles the UPS account.

Busy UPS hub

The North Bay facility handles 200,000 to 300,000 packages per day, with about 30 percent of inbound and outbound volume handled by rail. Typically, two inbound trains and one outbound train serve the facility daily, with an outbound train carrying about 70,000 packages in 50 to 70 containers. During the peak season, outbound rail volume exceeds 100 containers.

One outbound train heads to the Southwest, including Texas and other points, and is partially moved by Union Pacific Railroad. Another that departs each Tuesday morning for Chicago is an all-BNSF move and an all-important transportation link both for the hub and UPS. The high-priority train — which must arrive Thursday in time for a 5 p.m. sort at the Chicago Area Consolidation Hub adjacent to BNSF’s Willow Springs, Ill., terminal — factors into tight sort schedules and high volume, says Ken Buenker, UPS’ vice president of corporate transportation services.

“We plan sorts based on our integrated plan. We try to keep the flow to outbound [moves] without any disruptions,” says Buenker, who’s responsible for the package delivery giant’s rail transportation. “If there are disruptions, we have to manage volume later in a sort, and work around lateness.”

The North Bay hub modernization provides more opportunities to manage contingencies and more flexibility for recovery, says Buenker. For example, the automation enables UPS to seamlessly design and implement new sort flows for outbound volume if a train is late.

“Both our package visibility and our facility technology allow us to create sort-specific recovery plans that consider all aspects of the network impact and allow us to maximize service, minimize operational impact and ensure we consider all available options,” says Buenker. “We can change sort design far more quickly and effectively with the [new] technology in the building.”

During the modernization project, BNSF “strategically positioned” extra rail cars and locomotives to ensure the railroad could provide the service UPS required at the hub, says Longsworth.

“There was also heightened communication around any potential delay anywhere along the route between Chicago and North Bay,” he says.

BNSF seeks service tweaks

Since the project was completed, BNSF has been seeking ways to tweak the North Bay-to-Chicago move, already its “hottest, highest priority and most premium train” based on total miles and transit time, says Fritz Draper, BNSF’s vice president for business unit operations.

The outbound train covers 2,500 miles and must adhere to a 54-hour schedule. It’s the railroad’s tightest, most challenging and most important schedule, and has held that title “since intermodal was invented,” says Draper. In a sense, BNSF is trying to turn its No. 1 train into “No. 1A” train, he says.

Slight planning adjustments and better communication between the railroad and UPS — especially about any weather or network problems — have helped spur the No. 1A mission.

“We run as on time and exact as we can, but there are bumps in the road, like floods or the Polar Vortex,” says Draper. “UPS came to us about their modernization plans at North Bay. It was up to us to up our game.”

The outbound train needs to be perfect each time, he says.

“It’s like the starting pitcher who needs to go nine innings every start with no relief in sight,” says Draper.

To meet the transit-time requirement, the train must average about 45 mph, including crew changes, refueling stops and inspections. The tight schedule is challenging because BNSF each day manages 100 trains in its network, and some commodities move at slower speeds and have different protocols, says Draper.

The North Bay facility has noted a “tremendous difference” in BNSF’s service over the past two years, says Andrew Kearns, the hub’s transportation coordinator.

“We have better connectivity now with BNSF. If there are issues, we communicate better and collaborate,” he says. “Before, we had [service] struggles maybe twice a week.”

BNSF’s on-time performance at the North Bay facility stands at about 95 percent, says Buenker.

“BNSF has provided us the flexibility we needed. We have had the same schedules for decades, the difference now is in how it’s supported and runs according to the transportation service plan,” he says.

BNSF: Performance is paramount

BNSF’s overall on-time performance percentage for UPS is in the low to mid 80s — not where it needs to be, but better than its performance over the past two years, says Buenker.

“We are like the auto industry. It needs to be ‘just in time,’” he says.

BNSF will make any necessary adjustments to provide the performance UPS needs throughout its distribution network, says Draper. UPS manages 1,600 hubs and many of the facilities incorporate rail into their transportation planning.

At the North Bay facility, BNSF and other railroads were very accommodating before, during and after the modernization project, says Buenker. And he expects those efforts to continue.

“They made significant modifications to several trains and ran well, allowing us to focus on our adjusted operating plan and to continue to serve the markets the North Bay transportation operation supports,” says Buenker.


Metro-North is improving, but work remains

MTA Metro-North Railroad is making progress in improving its safety culture and service reliability, railroad President Joseph Giulietti told the Connecticut General Assembly’s Transportation Committee earlier this week.

Giulietti’s remarks to Connecticut lawmakers followed a series of high-profile accidents and service disruptions over the past two years. In a recent letter addressed to Metro-North customers, Giulietti outlined the reforms implemented and underway.

“Metro-North is committed to the goal of rebuilding the railroad’s organizational culture and its physical plant so that safety is the foundation of everything we do. Every decision and change that has been made since I became president last year has been made to advance safety,” said Giulietti’s message, which is posted on the railroad’s website.

Although the railroad has “accomplished a lot, we are fully aware that a lot of work remains to be done,” Giulietti wrote.

Among the organizational and workforce reforms, Metro-North has communicated to all its employees that operating safety — not on-time performance — is the railroad’s primary focus; implemented a confidential close-call reporting system; reorganized and enhanced training; and added new positions to the Maintenance of Way Department, including a vice president of engineering.

Reforms related to rebuilding track include the hiring of the Transportation Technology Center Inc. (TTCI) to assess Metro-North’s infrastructure and its maintenance procedures. Overall, TTCI identified 146 items to evaluate or implement; of these, 127 have been implemented or are in progress, Giulietti said.

Additionally, the railroad’s signal system has been modified to allow allow automatic speed control in 10 critical areas, and the railroad has implemented a pilot program to identify key employees such as train engineers with sleep apnea.

Future improvements in the works include the installation of video/audio recording devices in rail cars, autonomous track geometry measurement systems on rail cars, and positive train control. A PTC pilot program is set to begin on the New Haven and Hudson lines this year.

“Rest assured that these current and past reforms are just the start of a comprehensive effort to rebuild the railroad’s organizational culture and its physical plant so that safety IS the foundation of everything Metro-North does,” Giulietti’s letter concluded.

Bill and Hillary’s Interventions Raise New Doubts About NATO

any Americans see the North Atlantic Treaty Organization as our ultimate line of defense. Some view it as an American puppet. Both takes need serious rethinking. NATO and its implicit ties to the European Union (EU) have come to pose an unexpected threat to the United States, and nowhere more dramatically than in Bill and Hillary Clinton’s interventions in the Balkans and Ukraine and her non-ending push for military action, especially in Libya.

“I know the United States has taken some actions against terrorists inside Libya, particularly ISIS training camps,” Hillary told CNN on February 23, “and I support that.”

These actions are open and covert preparations for an allied war in Libya, as I reported last week, drawing on French media. Hillary may not have known the full story when she talked to CNN. But given her experience, contacts, and leading role in promoting the first Libyan war, she certainly knows what’s coming.

NATO’s place in all this has been less clear, reflecting how far the alliance has evolved. At the start in 1949, its first secretary general, Lord Ismay, famously quipped that its purpose was to “keep the Germans down, the Russians out, and the Americans in.” The fall of the Berlin Wall four decades later, the collapse of the Soviet Union, and the epic transition from the Common Market to the European Union have made the uses of NATO more complex, less predictable, and potentially more dangerous. The resulting rat’s nest will cause grief no matter who becomes the next US president.

German chancellor Helmut Kohl and President George H.W. Bush opened the door to danger when they hoodwinked Mikhail Gorbachev, the last leader of the Soviet Union, into believing that they would not expand NATO to the east. Bill Clinton then led NATO to bring in Poland, the Czech Republic, Hungary, Estonia, Latvia, Lithuania, Slovenia, Slovakia, Bulgaria, and Romania. This put the world’s most powerful military alliance right on Russia’s doorstep, feeding a real, if historically overblown, sense of victimhood that Vladimir Putin puts at the heart of his national narrative.

“The policy of containment was not invented yesterday,” he declared in his State of the Nation speech at the end of 2014. “It has been carried out against our country for many years, always, for decades, if not centuries. In short, whenever someone thinks that Russia has become too strong or independent, these tools are quickly put to use.”

Without question, the proximity of a nuclear-armed NATO has provoked Russia to respond. But Putin has chosen the responses to make, whether preaching an increasingly right-wing Christian nationalism, “the historical reunification of Crimea and Sevastopol with Russia,” massing his troops and little green men to back armed conflict in Ukraine, making nuclear threats, or funding Marine Le Pen and her father Jean-Marie here in France and reportedly the right-wing, anti-immigrant AfD in Germany.

NATO’s expansion has also encouraged Eastern European nations – even those not formally members of the alliance, such as Georgia – to bait the Russian bear, foolishly expecting the United States and its allies will come to their aid.

The Balkan Express

Besides pushing NATO beyond its original theater of operations, presidents George H.W. Bush and Bill Clinton joined with Germany to redefine NATO’s mission, most dramatically in the former Yugoslavia. As early as 1992, NATO began playing a small role in conjunction with United Nations peacekeepers in Bosnia and Herzegovina. Clinton then pushed for a massive intervention after the July 1995 massacre in the village of Srebrenica, in which Bosnian Serbs rounded up and killed some 8,000 Muslims.

If ever a massive blood-letting cried out for international intervention, Srebrenica seemed the perfect case. But, as so often happens in supposedly humanitarian acts of war, Bill Clinton and his top foreign policy advisers had a much larger agenda and a truly imperial vision.

Richard Holbrooke, a one-time managing director of Lehman Brothers who became ambassador to Germany and assistant secretary of state, saw an expanded NATO as central to preserving American leadership throughout a stable, unified Europe, which would embrace democracy, Western values, and “free-market economies.” Chancellor Kohl, French president Mitterrand, and their allies were just creating a newly strengthened European Union, and would – with the Clinton administration’s encouragement – turn it into a bastion of neo-liberal economics.

Strobe Talbott, Clinton’s deputy secretary of state, saw an expanded NATO primarily in terms of exercising hegemony over a weakened and pliable Russia. Now president of the Brookings Institution, he remains a friend and advisor to the Clintons.

Zbigniew Brzezinski, the grand old man of the Democratic foreign policy establishment, saw a much bigger goal in the control of Eurasia and its vast oil and gas reserves. “NATO entrenches American political influence and military power on the Eurasian mainland,” he wrote in The Grand Chessboard. “A wider Europe and an enlarged NATO will serve the short-term and longer-term interests of U.S. policy.”

Only a few savvy outsiders saw at the time the vast scope of these ambitions, which extended beyond Western Europe, beyond the EU, beyond Russia, and into the regions once controlled by the Ottoman Turks. In pushing NATO into Bosnia, the Clinton administration was looking to make the United States “the leader of an informal collection of Muslim nations from the Persian Gulf to the Balkans,” wrote Jacob Heilbrun and Michael Lind in The New York Times in January 1996. “The disintegration of the Soviet Union has prompted the United States to expand its zone of military hegemony into Eastern Europe (through NATO) and into formerly neutral Yugoslavia. And ? most important of all ? the end of the Cold war has permitted America to deepen its involvement in the Middle East.”

Far more than any humanitarian concerns, these imperial ambitions led Washington to push NATO airstrikes against Serbia and Montenegro in 1999, which even the normally reluctant Congressman Bernie Sanders voted to support. The Clinton administration then sent Col. Robert Helvey, of the Defense Intelligence Agency, to train 20 militants from the Serbian student group OTPOR in the techniques of strategic nonviolence to undermine the authority of the Serbian leader Slobadan Milosevich, “the Butcher of the Balkans.” Supplied by the United States and backed by NATO, OTPOR overthrew Milosevich and created the pattern for the color revolutions that George W. Bush and Barack Obama would use primarily against pro-Russian governments on the edges of the former Soviet Union.

You can read the story at length in “How Washington Learned to Love Nonviolence,” which I wrote in 2009. But events moved on. As Obama’s secretary of state, Hillary Clinton presided over the National Endowment for Democracy, Foggy Bottom’s own “democracy bureaucracy,” and outside contractors like Freedom House to create a second Orange Revolution against Ukrainian president Viktor Yanukovych. You can find this documented in “Meet the Americans Who Put Together the Coup in Kiev,” Part I and Part II. Hillary and Bill even played a personal role in the run-up to the coup against Yanukovych, speaking at an oligarch-sponsored conference in Ukrainian Crimea in September 2013.

The role of the Clintons dramatizes two key historical realities. Many progressives tend to whitewash the Democratic Party by blaming the coup on Republican neocons. Their best evidence is the hands-on role played by Victoria Nuland, then assistant secretary of state, the wife of Robert Kagan, one of the neocon founders. But Hillary was Nuland’s long-time boss and mentor, and she exemplifies her party’s long tradition of liberal intervention. Kagan has now turned against the Republicans and endorsed Hillary for president. A historian by trade, he has also been calling himself a liberal interventionist.

Second, where Nuland gained fame for saying “Fuck the EU,” Hillary characteristically used Washington’s coup-making machinery to serve European ambitions to bring Ukraine into the EU – not into NATO, at least not at the time. Obama made this clear in a roundabout way in the April edition of Atlantic Monthly – and in scathing terms.

“There are ways to deter, but it requires you to be very clear ahead of time about what it is worth going to war for and what is not,” he told journalist Jeffrey Goldberg. “Now, if there is somebody in this town that would claim that we would consider going to war with Russia over Crimea and eastern Ukraine, they should speak up and be very clear about it.”

What neither the foreign policy realist Obama nor the more interventionist Hillary Clinton has ever made clear is how it was in America’s interest to make a coup in Kiev to help the EU expand to include a conflict-riven and extremely corrupt Ukraine.

Sarkozy’s War

A bigger problem arose over Hillary’s first war in Libya. And, once again, it was never quite the humanitarian venture that both she and Obama made it out to be.

As I reported much too cautiously in April 2011, the story began the previous Autumn, when Nuri Mesmari, Gadhafi’s chief of protocol and one of his closest confidants, came to Paris and began meeting regularly with French intelligence officials. On at least one occasion, at the Hotel Concorde Lafayette on November 16, he reportedly had a long session with close collaborators of French president Nicolas Sarkozy. Shortly after, French soldiers disguised as businessmen travelled to Benghazi to meet secretly with Col. Abdallah Gehani, a Libyan Air Force officer whom Mesmari had identified as about to turn against Gadhafi. On January 22, Gadhafi’s security forces arrested Gehani, but the rebellion was already under way, breaking out on February 17, initially as a peaceful protest, but increasingly with armed force.

Much of what I reported has since been confirmed in Hillary’s secret emails and Exit Gaddafi, a book by Ethan Chorin, a former US diplomat. Sarkozy and his government were in touch with the rebels well before the philosopher and journalist Bernard Henri Levy ever warned of an imminent massacre of civilians in Benghazi ? and months before Secretary of State Hillary Clinton met in Paris on March 14, 2011, with the Libyan opposition leader Mahmoud Jibril and gave him her seal of approval.

Some of the story still remains a mystery. On February 25, for example, the too-well-connected Israeli news service Debkafile reported that the night before French, British, and US military advisers landed in the region, dispatched from warships and missile boats off the coastal towns of Benghazi and Tobruk. Was this Israeli-inspired propaganda? Or was the US militarily involved before Hillary gave her go-ahead?

Whatever Washington’s start date, the bigger question is why Clinton and Obama went along with Sarkozy’s war, knowing as her emails state that French companies had been guaranteed the lion’s share of Libya gas and oil. Hillary’s answer comes through all too clearly in the two-part New York Times special on her leading role in yet another war of choice that “ran aground in a tribal country with no functioning government, rival factions and a staggering quantity of arms.”

The defining moment, and one that shows the danger that NATO and our European allies now pose, came on March 19, when the wily Sarkozy met in Paris with British prime minister David Cameron and Secretary Clinton. French jets were already in the air, he told them. “I will recall them if you want me to.” Hillary was not prepared to object. “I’m not going to recall the planes and create the massacre in Benghazi,” she grumbled to an aide. And that was how Sarkozy blackmailed the world’s most powerful nation into a war that served no American interest other than making nice with untrustworthy allies.

Steve Weissman, Reader Supported News

The Adirondack Scenic Railroad: Let’s preserve it!

The Adirondack Scenic Railroad is engaged in a “battle” with “tree huggers” for it’s existence. It is “supposed” to run between Utica, NY and Lake Placid, NY. Pictured below is the Lake Placid train station.

AdirondackRailroadLakePlacidFor a great discussion on this subject, I am going to turn this over to Phyllis Zimmerman, columnist for the Utica Observer-Dispatch.

“I am an Adirondack Railroad preservationist. I am strongly against the state DEC’s and DEP’s recent proposal to tear up a 34-mile section of the track between Tupper Lake and Lake Placid.

Reportedly, this newest proposal is a compromise. Officials from these state agencies are offering this as an alternative to ripping up a 90-mile section of unused tract running between Big Moose and Saranac Lake.

This makes me wonder, why rip up the railroad’s northernmost section and leave Tupper Lake as the corridor’s final destination instead of Lake Placid? I happened to visit both of these towns last summer and can relay with some authority that Lake Placid is far more of a tourist destination than Tupper Lake.

Tupper Lake is a nice little Adirondack town offering plenty of water recreation, skiing, and snowmobiling, but sadly, the main part of town appears rundown with little for tourists to do. The Wild Center nature museum appears as its saving grace.

In comparison, Lake Placid appears to be overflowing with tourist activities. I can’t tell you about all of them because my family only skimmed the surface of things when spending an afternoon there last summer. The town’s main drag is dotted with miles of unique shops, restaurants, and hotels, as well the U.S. Olympics Museum. That’s not to mention Whiteface Mountain and the U.S. Olympic Training Center just outside opposite of sides of the town.

But really, I have a bigger question to all this: Why rip up ANY of the railroad corridor? The Adirondack Trail Advocates reportedly believe that the 90-mile track span between Big Moose and Saranac Lake originally slated for demolition would be better served as a recreational trail for hikers, bicyclists and snowmobiles. I have absolutely nothing against these recreational pursuits, but don’t we already have enough Adirondack trails for these?

I have taken the Adirondack a few times between Utica and the Thendara station just outside Old Forge, and let me tell you, the route is breathtakingly beautiful. It is one of a kind. If any portion of the railroad is torn up, it probably never will be replaced.

Once it’s gone, it’s gone!”

Big Data From EDI Can Make Predictions

EDI is a significant source of big data. Of course that’s no shock to anyone dealing with data storage or a VAN bill, but when you consider the volume of transactions and the number or companies involved, it would seem that there is a wealth of data in those transactions. The data now covers (depending on the trading partners) every aspect of the order process, from initial P.O. to final payment, with plenty of status updates along the way. So, what can be learned from all the data? It turns out that when looked at as an aggregate and put through the right analytical processes, there’s plenty to be learned – and predicted.

EDI software/service providers/VANs that act as collecting points for EDI data are in a great position to help leverage this data because all the transactions they transfer between trading partners pass through their servers. At some point these transactions are stored on their servers, and some of the providers maintain those transactions for historical purposes. The newest trend that these providers are offering is to leverage those transactions by applying business intelligence techniques to them. What emerges from these advanced calculations takes on many forms, but in general they paint a picture of what has happened, and what is likely to happen in the future.

Mother’s Market & Kitchen Expansion

Editors Note: WholeFoods Magazine recently reported on a new partnership between Mother’s Market & Kitchen and Mill Road Capital investment firm. Our very own merchandising editor Jay Jacobowitz provides some insight on the potential of this new partnership and what it means for the supernatural retail space.

This is a significant event in the natural organic products retail space. Costa Mesa, California-based Mother’s Market & Kitchen, founded in 1978, and now with seven supermarket-size locations in Southern California, possesses some of the most valuable real estate in the nation. By this I mean household quality and demand potential for natural organic products is extremely high; among the best in the country according to our Retail Insights’ Retail Universe for Natural, Organic Food, Supplement and Personal Care Sales database. In addition, the stores are first-rate operations, with excellent food service offerings, dynamic merchandising, beautiful facilities, and the highest ingredient standards in the industry.

Coupling with Greenwich, Connecticut-based Mill Road Capital (MRC) should be a wake-up call for all supernatural competitors. MRC Senior Managing Director, Thomas Lynch, handled the private equity business for Blackstone Group, which manages over $300 billion in investor funds. Lynch has borrowed a page from Blackstone, locking up investor capital for 10 years; a requirement of investing with Blackstone and MRC. By doing so, MRC can take the long view with its investment portfolio, allowing it to mature companies at their own intrinsic growth rates, and inoculating them from transient external factors, such as economic shocks or sector slowdowns.

Certainly, Mother’s Market could have attracted private equity capital long ago, in the 1990s for example, as Austin, Texas-based Whole Foods Market was executing its “roll-up” strategy of buying the most significant supernatural competitors around the country. But Mother’s Market did not take this route, content instead to focus on its regional trade area and build an unequaled brand identity of superior quality.

I predict the acquisition by MRC signals management intends to continue to pursue the long game, waiting patiently for ideal real estate before signing leases, and being careful to maintain reasonable proximities between stores to maximize distribution efficiencies. The growth plan may resemble the Cheesecake Factory, which chooses its real estate extremely carefully, only opening stores with optimal locations, and never settling for suboptimal real estate. I suspect Mother’s Market & Kitchen will do something similar as it builds out from its Southern California base.