• Do players in your industry manufacture overseas? What aspects of their operations do they outsource?

Most transportation companies, U.S.-based or foreign, do not do manufacture anything for themselves. Companies like UPS, CSX, American Shipping Lines, Maersk, and American Airlines require small and large vehicles, airplanes, ships, and train cars to move their product, whether it be people or goods. These companies, while they do boast their logo on every vehicle they use, purchase these vehicles from separate equipment manufacturers such as General Motors, Ford, Greenbrier, Boeing, Airbus, Bombardier, STX Shipyards, and others.

Whether a vehicle is manufactured in the United States depends on two main factors: Location of Company and Vehicle Type. When it comes to cars and trucks, it is almost always location, location, location. For instance, most of US-based companies UPS' and FedEx's United States ground trucks (implemented in the U.S.) are manufactured by Ford or General Motors. However, the ground division in Europe often implements Mercedes trucks, which are manufactured in Germany. UPS's US semi-trucks are manufactured by Kenworth, Peterbilt, and other US companies. UPS's European semi-trucks are manufactured by Volvo, Scannia, and others. When it comes to trains, it varies. US rail cargo company CSX, uses rail cars manufactured by Oregon-based company, Greenbrier. US passenger rail company Amtrak uses cars built by Bombardier International, which has facilities in 23 countries, including the United States. However, it is impossible to tell exactly where each individual part was made on each car.

When it comes to ships and airplanes, the array of manufacturers thins. When US airline American Airlines needs a new plane, they have three real options: Boeing, Airbus, and Bombardier. These companies are the only ones large enough to fulfill the large orders required by a company like American Airlines, or Delta, the world's largest passenger airliner (it also happens to be US-based). All of Boeing's manufacturing facilities are in the United States. Airbus and Bombardier are both foreign-based (the former in Denmark and the latter in Canada) and operate facilities around the world.

Shipping is even more limited. Chances are, when a massive maritime shipping company such as Maersk needs a new ship, they will head to South Korea, which produces more than half of the world's ships. They are extremely efficient shipbuilders, and South Korean company STX recently acquired Aker Yards, Europe's largest shipbuilder. Due to inefficiencies in the US, non-military shipbuilding, has become negligible in the global marketplace. Even US companies such as American Lines are contracting ships from foreign shipyards.

When companies like UPS, CSX, and Delta choose to purchase from American manufacturers, they are doing a service to the economy that made their existence possible. When Delta chooses Boeing to make their newest fleet, even if it may be slightly more expensive than Airbus, they are keeping the US competitive and showing "country loyalty." A major area the US is lacking in is shipbuilding. The government needs to stop subsidizing shipbuilders, which masks inefficiencies in US shipbuilders. Overall however, in terms of US companies using US equipment, the future looks bright.

www.fedex.com
www.boeing.com
www.ups.com
http://www.maersk.com/Pages/default.aspx

Going Global?

Which company(ies) in your industry are most global? What has been the key to their success in other countries?

In analyzing various package delivery companies, it is clear that UPS is the most global. UPS employs   400, 000 people within the U.S. and 75,000 internationally. Regionally, UPS covers more than 220 countries and territories including every address in North America and Europe. In addition, the UPS has facilities in Europe, Asia Pacific, the U.S., and Canada. In total, the company has 807 facilities along with 196 service centers in more than 120 countries.

Since its founding in 1907, UPS has had the enterprise strategy of “ Create Value, Transform, and Invest to Grow,” which it has been living up to in various ways. One of those ways is visible in the attempt to acquire European company TNT Express.

TNT Express is a European based, cargo and express delivery company.  TNT Express employs nearly 81,00 people and operates on 26,00 vehicles, 48 aircrafts, and a global collection of 2,400 depots and hubs. Although a new company, TNT generated £7 billion in revenue and £66 million in profits. With TNT’s growing success, UPS stood by its founding strategy of “ Create Value, Transform, and Invest to Grow,” and is now optimistically pursuing TNT Express.

In the article UPS Packages a European Deal, author Tony Daltorio highlights the major aspects of this deal. First, if the acquisition were signed, sealed, and delivered, UPS would be the largest mail carrier in Europe, reaching a European audience larger than its already massive customer base. Furthermore, the acquisition would provide UPS the positive presence TNT has in China and Brazil, countries with combined populations hovering over 1.5 billion people, ultimately expanding UPS in Asia and Latin America.

Although not the most affordable move by UPS ($6.4 billion), it has been one of their best pursuits since the founding. The acquisition would move UPS far beyond its competitors and expand their presence, reaching untouched markets. It would affirm the company’s purpose of “ We enable global commerce.”

Article link: http://beta.fool.com/tdalmoe/2012/02/24/ups-packages-european-deal/2325/?source=eogyholnk0000001

Which foreign companies are key players globally in the shipping industry?

Nearly 75 percent of maritime shipping is done from one ocean to another ocean. The United States, however, is not home to the top three overseas shipping companies. Evergreen Marine, Nippon Yusean Kabushiki Kaisha, and AP Moller-Maersk, based in Taiwan, Japan, and Denmark respectively, are the three biggest shipping companies.

The federal government has recently tried to improve America's shipping industry by investing in advanced technology. Despite the boost by the federal government, shipping job opportunities overseas are still more plentiful than America's. The United States should do more to grow this vital segment of the economy.

Article: http://www.wetfeet.com/careers-industries/industries/transportation

What non-US companies are key players in the industry?

In the article titled "TNT Shares Soar After UPS Makes Takeover Bid," it talks about how the shares jumped up after UPS offered 9 euros per share. They jumped above 10 euros a share now. Interesting enough, UPS can go from anywhere between 9-14 billion euros to takeover TNT express delivery.

TNT express is a dominant express delivery company in Europe and for them to be bought out by UPS would be huge for UPS. They would almost essentially have the majority of the market in Europe. This would be terrible for international business for Fedex. They would be locked out of Europe. Another reason why this would be so big is because TNT Express was considered one of the big 4 companies in package delivery. For UPS to buy out such a close competitor would make them a very powerful international company in the transportation industry.

http://online.wsj.com/article/SB10001424052970203358704577235251316965674.html?mod=WSJ_Transportation_leftHeadlines

• Which companies in the industry stand out in regards to their view and actions in CSR?

Southwest Airlines ranks among the top 50 US companies on the Corporate Social Responsibility Index (CSRI). The CSRI was developed by the Boston College Center for Corporate Citizenship and Reputation Institute and ranks companies in seven areas: citizenship, governance, workplace, leadership and performance, products/services, and innovation. Southwest Airlines was also the only airline on the list to be ranked among the top 25 in the workplace category. 


Southwest's motto is "performance, people, planet," and they are no slouch in excelling in all three categories. In 2010, Southwest Airlines was able to post industry-leading revenues and market share gains, all while implementing several "green" practices to propel the planet forward. These green practices include implementing "Required Navigation Performance (RNP) technology to conserve jet fuel, retrofitting ground service equipment (GSE) to consume cleaner-burning fuels, and making energy-efficient improvements at [their] Headquarters to reduce electricity use." 13.9 million dollars in donations to local communities and over 80,000 employee volunteers hours added to their efforts. 


Another exemplary company in the Corporate Social Responsibility arena is global shipping and logistics firm, UPS.  UPS was ranked 3rd overall on 2011's CSRI index. This is extremely impressive, and along with FedEx at number 7 on the list, shows that the transportation industry is moving in the right direction. In 2010, UPS "became the first small-package carrier to offer a carbon neutral service for deliveries within the United States," invested over $150 million in employee safety training, and urged its employees to volunteer for more than 1.2 million hours. UPS was even able to cut the amount of fuel used on its ground packages, its most popular product, by nearly 4 percent. 




http://www.southwestonereport.com
http://www.bcccc.net/index.cfm?pageId=2202
http://responsibility.ups.com/Sustainability/Highlights

What are some examples of ethics challenges that industry players have experienced?

TNT international express delivery has been long coveted by American companies such as UPS and Fedex. UPS has been trying to expand into the european market. Big investors in TNT have stated that they would not mind for the company to try to sell itself. TNT had split from another company and its share has almost dropped 60%. Thus, causing investors to push TNT to a possible sale. However, both sides have yet to come to an agreement but acknowledge that talks are occurring.

Companies that transport goods can face some ethical problems. One ethical issue that these companies face is insuring their customer that their item wont be damaged. Companies like UPS and Fedex have to make sure that they dont damage the product while delivering them. The customers would be incredibly angry if there was damage to the package and UPS or Fedex won't take responsibility. UPS also has the ability on how fast to deliver the package. They can take their time and deliver the package which would also cause the customer waiting for the package, to be very angry. UPS and Fedex often do deliver the package in a timely manner and usually will own up to any damage done to product. They are well respected companies within their industry.

http://online.wsj.com/article/SB10001424052970204792404577229221106343502.html?mod=WSJ_Transportation_leftHeadlines

What are key ethical issues the trucking industry faces?

The trucking industry has some very real ethical concerns. With the emergence of the climate change debate came concerns over greenhouse gas emissions. Tons of hydrocarbons are sent into the atmosphere every year by trucks. Most trucks are not covered by a corporation and are individually handled, which makes a major switchover to biodiesel more difficult.

There are also issues with what is being transported on trucks. Many veteran truckers doctor their travel logs, avoiding weigh stations and checkpoints. Illegal goods are sometimes brought across state and country borders this way.

Many accidents by truckers are attributed to driver fatigue. The hours of operation in the trucking industry makes it so the drivers have to stay awake over the course of long hauls to get shipments at the right place on time. Hours need to be more flexible to allow for proper rest.

Since most truck drivers are freelancers, they are usually not covered by insurance. On-the-job injuries can be financially devastating to truckers. Companies should have more of a vested interest in their drivers, even if they are paying them out of pocket.

Finally, trucking may be a dying industry. The price of petroleum is increasing, and there are cheaper and faster ways to transport goods now-a-days, like via air. New truckers should rethink their decision before joining the trucking industry.

article: http://www.internationalvisioncollective.org/ethical-business/ethical-issues-in-the-trucking-industry/

Is your ride to work worth more than my home?

In an article done by Nicholas Winning, he examines one of the U.K.'s newest projects.  This project is the creation of a billion dollar high-speed rail network, which would connect major cities in the country. The project is estimated to be worth approximately £32.7 billion and is to expandover a 20-year time period. However exciting this may seem, this project is one of the U.K.'s most politically controversial issues. 

The current Parliamentary government is under the leadership of, conservative, David Cameron, who is 100% behind the project. He's one of the leading factors for this project getting the green light. But aside from Mr. Cameron's enthusiasm about the project, his opposition is countering his argument by all-means.

Prime Minister Cameron and his party are in favor of the controversial project because of the potential investments it may bring. U.K.'s Secretary for Transport, Justine Greening, also under the direction of Prime Minister Cameron, said " At present values, it will generate benefits of up to £47 billion and fare revenues of up to £34 billion over a 60-year period," which doesn't sound too bad. But the opposition is countering the discussion of profits with a discussion on the people and the environment. 

 The opposition raises the issue of the "constituents" and the environment. What will happen to the environment and the people?

Well, while the project is estimated to bring in billions for the country, support the growth of the economy, and assist in the reduction of traveling time, it will also disrupt the living conditions of thousands. As the high-speed line links the cities of Birmingham, Leeds, London, and Manchester, the iron rods and metal-like components that are in the construction of the rail, will going through thousands of homes, forcing them to relocate. Beyond the homes of thousands, the environment will suffer, because of the amount of trees that will be cut down during the building process.

Although so profitable, the British government should take a deeper look with an ethical lens. Is it ok to displace people beyond their wills, because you want to create a high-speed system to benefit some? Is it a logic idea to kill trees in the midst of global warming, based on the pursuit of profits? 

The solution here is to find another route that the rail can be built on. If not, maybe building the rail isn't such a great idea. It maybe profitable, but is it sound?

In the Airline Industry, Expansion into Foreign Markets is Key

A February 9th New York Times article, "Etihad Airlines Looks to China and India for Growth," highlights the recent expansion and future prospects of the airline Etihad. 


Etihad is owned by the Abu Dhabi government and was founded five years ago in an effort to compete with its now gulf rival, Emirates. As a strategy, Etihad has been buying stake in several foreign airlines to expand their market and increase revenues. A recent purchase in 2011 gave Etihad 29% stake in Air Berlin, Germany's second largest airline. This purchase will give Etihad access to 35 million new passengers and an estimated 50 billion dollars in revenue in 2012. Earlier this year, the airline bought a 40% stake in Air Seychelles,  "giving it access to the African island country’s leisure market, which has grown increasingly popular with Chinese travelers."

To continue its expansion, CEO James Hogan said "Etihad was eager to identify “one or two” more strategic investments in other airlines over the coming years that could drive new passenger and cargo traffic to its ever-widening network of 82 destinations." Mr. Hogan is pleased by the Indian government's recent proposals to liberalize their aviation industry.  Struggling domestic carriers, including Kingfisher, have been lobbying government officials to raise the 26% foreign ownership cap on domestic airlines. Foreign investment would bring prosperity to both the domestic companies, and companies like Etihad, who wish to expand in the coming years. 

Even if India does not pass a law raising the 26% percent cap, Etihad is still expected to grow in the coming years. In 2011, it posted a 17% growth in customer traffic, three times higher than the international average of 15.9%.

http://www.nytimes.com/2012/02/10/business/global/etihad-airlines-looks-to-china-and-india-for-growth.html?scp=2&sq=airlines&st=cse

China's Transportation Sector Set to go Greener

          The government of China has announced plans to invest trillions of dollars in order to make its transportation sector more green. China used to be called by some as a "Kingdom of Bicycles", but by the end of 2009 China had around 170 million vehicles on the road and projections will increase that number by 220 million between now and 2020. The number of vehicles in China increased by 14.5 percent annually between 2000 and 2009. Even though green investment is relatively new to China, the alternative-fuel vehicle industry, inter-city high speed rail, and urban rail development have seen many improvements during the course of the last few years and is expected to see even more development during the this decade. An example of green investment is the 1.3 billion that the Chinese electric car industry received in 2010 alone.

         Millions of jobs are expected to be created due to the plans to grow the green industry in China. The high-speed rail industry is expected to double by 2020, creating around 630,000 jobs per year. 153 billion is planned to be doled out by China to the urban rail centers. This will create an additional 420,000 jobs annually. Domestic production of hybrid vehicles could reach 16.6 million, creating an astonishing 1.2 million jobs per year. These numbers suggest that going green can be a powerful economic driver, and other countries would be wise to take note of China's prosperous green industry.

Article: http://www.greenconduct.com/articles/2011/04/01/greening-china%E2%80%99s-transportation-sector-can-create-millions-of-jobs/

Is it innovation or distraction?

An article titled “ Don’t Look Now: A Car That Tweets,” speaks on a new form of technology and how that technology is going to change the way people access internet while in their cars.

U.S. automakers are now exploring a new way to bring innovation to their customers. Companies including: General Motors, Ford Motor, Tesla, and a few others, are among the list of auto makers who are on board with this new form of accessing social media and other information available on the internet. The companies have not revealed how they’ll go about cost of Internet usage, but have revealed that there will be a dashboard, but that will obviously vary in size on a company-to-company basis.

The article also reveals that cars are being considered “connected car[s],” referring to them as being connected to the internet and running at, approximately, 65 miles an hour.

Aside from the perks and gadgets that come with the cars, the article identify that these cars might come with some distraction.  Kia Motors executive Michael Sprague said, “Consumers are going to drive with phones and all we can as a manufacturer is to provide what the consumers are asking for and making it as safe as possible,” basically claiming that it is not safe to be distracted, but if there’s a safer way of being distracted, they’re creating it.  The counter argument to Sprague comes from Rob Reynolds, an executive director of FocusDriven, stating “ They are putting a big filter on your cigarette so it will take longer to kill you.” In essence, saying that distractions are still distractions, regardless of how safer they are.

This new technology within the auto industry has the capability of creating a new wave of profit, but it also carry’s the capability of causing possible of the defect of distractions, which in turn would cause more accidents, ultimately decreasing profits. Although a risky move, the automakers that are in pursuit of this technology should take hold of it and test it out.

 Article: http://online.wsj.com/article/SB10001424052970203824904577213041944082370.html?mod=WSJ_auto_LeadStoryCollection

Stephen Hauschild post 1

Bombardier Inc. manufactures rail equipment such as high speed trains. The CEO of the company defended the chinese by saying that slowing down the development of high speed trains after a recent accident that killed 40 people. He said he is confident that the chinese high speed network is safe.

In our last we recently talked about business ethics and also had a guest speaker come in and educate the class on ethics of business. China's Ministry of Railways could easily have no safety requirements for the trains being produced by Bombardier. On top of that, Bombardier is helping China's Ministry of Railways by helping improve the safety of the system. The article also stated that Bombardier has a joint venture with one of China's two main train producers. A joint venture is a partnership in which two or more companies join up and try to complete a big project. Joint Venture's are typically between two companies from different countries. One possible reason these two companies teamed up is because Bombardier has a contract to with China to make 80 high speed trains. By teaming up with a Chinese company, this could help the transportation cost go down by already having the materials necessary to produce these trains, in china.

http://online.wsj.com/article/SB10001424052970203646004577212952826399264.html?mod=WSJ_Transportation_leftHeadlines