Top Skills to Develop

AJ Wilhoit, Chief Product Officer, project44

Obsess over the customer. People who approach every problem with “what will make our customers’ lives better?” will always win in the long term. When you obsess over the customer, you are driven to deliver big, meaningful results for your customers and business.

Act like an owner. Your job is to define, advocate, and launch the right experience for your customers—which, in turn, will drive the right results for your company. Whether you’re an introvert or extrovert, find a way to make your voice heard so that you effectively guide your team to the right outcome.

Be a force multiplier. You can only get so far as a team of one. Be someone who motivates the people around you to bring their best work, grow, and have some fun doing it.

Dennis White, Vice President, Brokerage, Crowley

Adaptability, problem solving, and change management. All three center around the ever-changing nature of the supply chain industry. To thrive in such a dynamic environment, one must have a base level of adaptability. The inevitable challenges that arise in these fluid conditions require strong problem-solving skills, and the ability to lead a team through change management can be a true differentiator.

Heather Hoover-Salomon, CEO, uShip

Gain proficiency in data analytics. As data fuels the next wave of supply chain management, gaining an aptitude for how an organization creates more value from its data will be essential.

Be an ecosystem thinker. Take a collaborative approach with other partners in the industry to elevate the customer experience for all customers.

Maintain a human touch. B2B communications can often feel stilted, disengaged, and void of heart. Remember your buyers are humans, just like you. They love relatable stories and humanizing communications around how you can benefit their business.

Tony Harris, SVP & Chief Marketing and Solutions Officer, SAP Business Network

The most important skill for supply chain management is creative problem-solving. Constantly fluctuating geopolitical and market conditions, like the current crisis in the Red Sea, can create lags in delivery time, forcing companies to implement original solutions to transport products to customers.

These situations require imagination to source accurate responses, as unprecedented challenges require unprecedented resolutions.

Jeff Mahler, Co-Founder and Chief Technology Officer, Ambi Robotics

Emphasize empathy. Behind every data point, every shipment, and every transaction, there are people—customers, suppliers, partners, and employees—whose experiences need to be understood.

Empathy guides us to anticipate concerns, address challenges, and exceed expectations. It fosters resilience and collaboration in navigating disruptions and uncertainties. While technology optimizes operations, empathy drives success and fosters meaningful relationships in the dynamic supply chain.

Build a foundation in analytical and critical thinking. The future of the supply chain is data—the ability to get it, analyze it, and use it faster than anyone for competitive advantage. To do this takes good analytical skills and the ability to critically think through problems. This skill set will be important as you need to be able to break down problems and understand what the source of an issue is.

Many times supply chain issues wear a disguise, hiding the true problem and appearing as a completely different problem.

–Stephen Dombroski
Director, Consumer Products and Food and Beverage Vertical Markets
QAD Inc.

Three important skills to develop are 1) the ability to empower teams, 2) maintain a long-term focus, and 3) achieve work/life balance.

Efficient supply chain management requires seamless coordination across all links in the chain. A manager needs to provide their teams with the knowledge and skills they need to do their jobs well, but they also need to trust their teams and allow them some room to make their own mistakes.

Second, a long-term focus is critical. I’ve learned, sometimes the hard way, you need to keep your foot on the gas and keep building for the future. And last, no manager is useful to their company, customers, or teams if they are burnt out. By protecting some time for family and other personal priorities, a supply chain manager will be a more effective, productive, and balanced leader.

–Mark McCullough
CEO
Gebrüder Weiss North America

AI in Supply Chain Management:
Make it work for you

David Fisher, Executive Director, Transportation & Supply Chain Institute. University College, University of Denver

Remember AI is a tool and a methodology. Those who utilize it correctly will benefit from enhanced decision making and speed. The risk is not understanding how to use the tool correctly or worse, entrusting this technology to produce solutions that are not verified adequately. Like any new tool, AI will be most effectively utilized by those who get training.

If you plan to be a programmer or heavy contributor to the development and utilization of AI in the workplace then we would recommend that you get professional training to do so. If on the other hand, your intent is to be a user of AI-enhanced processes, you must think of AI as a new tool just as the calculator and the computer were once integrated in society in previous generations.

Lesley Veldstra Killingsworth​​​​, NMFTA Chairperson, Vice President of Pricing and Market Strategy, Polaris Transportation Group

First, get familiar with AI basics, machine learning, and data analytics. Embrace the data deluge and think strategically, not just tactically. Lastly, network, network, network. It’s important to talk with and learn from tech-savvy folks in the industry such as AI developers, data scientists, and other forward-thinking carriers. Stay ahead of the curve as AI is constantly evolving.

Dan Singer, Vice President, Dedicated Operations, Averitt

Be open-minded. We are in the early stages of determining all the applications of AI in supply chain management. Recognize that it can have a role in virtually any problem that must be solved repeatedly. It’s also important to stay abreast of each new application.

Christine Barnhart, Chief Marketing and Industry Officer, Nulogy

Foster a collaborative approach to AI implementation and involve cross-functional teams and stakeholders. This can facilitate seamless integration and maximize the benefits of AI across the supply chain. By embracing AI with a combination of technical expertise, adaptability, and collaborative spirit, supply chain professionals can then position themselves for success.

Sumit Vakil, Co-Founder and Chief Product Officer, Resilinc

Focus on rethinking processes to leverage AI’s potential to reduce manual work and enhance productivity. This means critically analyzing existing workflows to identify areas where AI can automate routine tasks, streamline operations, and optimize decision-making.

For example, look at how AI tools can be applied to forecast demand, manage inventory levels more efficiently, or improve logistics operations. Practitioners should start with small AI projects to gain practical experience and learn from both successes and failures, then slowly expand projects with the intent of developing people and processes. Embrace AI not only for its technological capabilities but also for its ability to transform business processes.

Identify and understand gaps AI can’t fill. This means that while AI is invaluable when it comes to getting a tailored approach to data (among many other benefits), supply chain managers should be the strategic, big-picture, and nuanced thinking that AI may not yet recognize in the process.

–Heather Hoover-Salomon
CEO, uShip

AI should be a tool for decision-makers and not the decision-maker itself. AI systems need a lot of data. To generate the data, a lot of processes must be digitized. It is supply chain professionals who will decide how this will be done.

The good news for humans is that their interactions have many nuances; and there are idiomatic differences across regions and countries. Can such variations be reflected in digital contracts and transportation bills of lading?

Will an AI system be able to “negotiate” contracts for two parties better than the parties themselves? If there were a legal dispute, would an AI system be able to replace judges and juries?

What is not surrendered to AI must be presided over by human decision-makers. Transportation, the most outsourced logistical activity, should be the best test-case for the promise of AI. Automating the process of transport, port entry/exit, and compliance should generate enough AI “hallucinations” to keep supply chain professionals gainfully employed for years to come.

–Dr. Darren Prokop
Professor Emeritus of Logistics, College of Business & Public Policy
University of Alaska Anchorage

Consider how AI can best advance your organizational goals. While AI is sexy, it is a tool. Take it as seriously as you do WMS, VMI, ERP, CRM. Don’t let it create blinders that prevent you from seeing other solutions.

Getting up to speed on blockchain and IoT for delivering greater transparency, traceability, optimization, and trust in the chain will put rocket boosters on your career trajectory.

–Lee Allison, Ph.D.
Associate Professor, Engineering Technology & Industrial Distribution
Industrial Distribution Program, College of Engineering
Texas A&M University

Be an advocate for innovation. Those who remain fearful of AI run the risk of falling behind. By championing new ideas and demonstrating a commitment to staying at the forefront of industry trends, employees can secure their current roles and emerge as indispensable leaders shaping the future of supply chain management.

The rise of AI and automation, such as ChatGPT, offers supply chain professionals a prime opportunity to maximize the associated benefits and advance their careers. They should actively seek out training and learning opportunities to integrate these emerging technologies into their daily operations and, by doing so, they can significantly enhance their performance and productivity while positioning themselves as a strategic leader within their organization.

Continuous upskilling, adapting to evolving trends, and fostering a culture of agility are crucial components to long-term success in supply chain.

–Joe Galvin
Chief Research Officer
Vistage

High-Impact Career Moves

Joe Adamski, Senior Director, ProcureAbility

Learn the broader aspects of a supply chain, and how it fits within the overall corporate strategic framework. Don’t just focus on a single area; someone with deep logistics, procurement, or warehouse expertise is important, but won’t progress as quickly as someone who understands the full spectrum of Plan – Source – Make – Deliver.

Identifying opportunities to get involved in the ideation phase of new projects to drive better decisions on designing for value can be essential in building the right network. Enable your success by learning the broader business skills that will set you above the pack.

Be curious about new innovations; you might be surprised by the opportunities this curiosity offers. Instead of feeling threatened by automation and AI, learn how these technologies work and how they can complement your skillset.

For example, individuals who can troubleshoot and repair automated equipment and operate AI analysis tools are in high demand. Networking with industry peers and colleagues is one of many ways to keep abreast of these new cutting-edge advancements.

–Yanitza Vega-Hughes, PMSM
Director of Human Resources
iGPS Logistics

Show you are a utility player. Not just sticking to what you are good at, but developing new skills will generate growth and advancement. Not being afraid to say “yes” when a new opportunity is offered.

Whether those skills are a stepping stone up or a lateral move, having a full scope of the supply chain and how it operates is an impactful way to advance your career. Through learning new or different skills, you can gain an understanding of the drivers, the customer/supplier, the employees, and the company, thus developing mastery of how the supply chain works as a whole.

–Taylor Rinehart
HR Specialist
Tri-National, Inc.

Develop leadership skills such as effective communication, strategic thinking, and adept problem-solving to inspire teams, navigate challenges, and drive organizational success.

Devote time to understanding best practices for supply chain risk management. Develop a nuanced understanding of the disruptive forces facing global supply chains, the role risk visibility plays in enabling proactive responses, and deep knowledge of risk mitigation strategies that build resilience into the end-to-end supply chain.

–John Donigian
Senior Director, Supply Chain Strategy
Moody’s Analytics

Continuously invest in one’s skills and knowledge. Ongoing education, certifications, and simply staying up to date on industry trends and best practices is a part of this. Furthermore, networking and building relationships in the industry is crucial as well, as it broadens the horizon and opens up new opportunities.

–Gabriele Langenmayr
Head of Human Resources Americas
DACHSER USA Air & Sea Logistics Inc.

Embrace a mindset of continuous learning, curiosity, and fearlessness. Successful practitioners in the field understand the importance of staying curious and being lifelong learners, constantly seeking new knowledge and insights to improve their practices.

Practitioners also need to try and look beyond their own industry, drawing inspiration from diverse sources and applying innovative solutions to their own environments. Those who make the most progress are fearless in their pursuit of improvement, learning from failures and using setbacks as opportunities for growth. Ultimately, supply chain professionals should not hesitate to ask questions, seek help, and collaborate with others to address challenges and drive positive change in the industry.

–Christine Barnhart
Chief Marketing and Industry Officer
Nulogy

Prioritize substance over flash as you work to understand and embrace new technology. Don’t be distracted by the new technologies of the moment. Instead, pay close attention to the problems they’re supposed to solve and consider their practical, sometimes-imperfect, applications in the real world.

We’ll take the rise of digital twins, for example. In reality, very few organizations will require hyper realistic digital models of warehouse floors or assembly lines. That said, the idea of digital twins might prompt a lagging organization to standardize its data, evaluate existing workflows, or consider changes to its procurement process.

Sometimes, abstractions are sufficient in generating quick insight and faster improvements to supply chain and manufacturing processes.

–Jason Hehman
Vertical Lead for Industry 4.0
TXI

Focus on innovation, collaboration/teamwork, sustainability, and social responsibility. Strategic partnerships—extending from suppliers to customers—and cooperation ignite creativity, enhance problem-solving, and ensure collective achievement in a tightly connected global market. Moreover, dedication to sustainable and ethical operations is vital.

Embracing eco-friendly logistics, ethical sourcing, and fair labor practices demonstrates a profound grasp of the industry’s broader implications. Aligning with the growing demands for corporate responsibility elevates a brand’s reputation and ensures its long-term sustainability.

–Ariella Azogui
Co-Founder
DutchX

Emphasize optimization. I rely on one principle that has guided my career: The only constant is change. A recent report from Amazon Business found that global procurement and supply chain organizations believe the same, as 95% of leaders said they will work to optimize their procurement and supply chain practices in 2024.

The dynamic nature of markets, supplier-principal relationships, and other macro trends will drive the need for supply chain leaders to optimize and adapt faster than ever. The unpredictable influence of technology changes, transformation (which I like to think of as evolution), geopolitical forces, governance, and compliance factors will require leaders to have agility built into their companies’ defined strategies.

Many questions surface as supply chain leaders contemplate future strategies. Are their organization’s current foundations strong and flexible enough to support future change and optimization? Does the optimization require a bit of a teardown and rebuild? How seamlessly can optimization be performed to reach both short-term and long-term goals? Did the organization set the best goals to guide these evolutionary changes?

Leaders who are diligent about building resilience in their supply chain with trusted partners will develop strategies that can carry them through any market fluctuation.

–Jeff Austin
Vice President of Supply Chain Services
Jabil

The post Supply Chain Career Hacks appeared first on Inbound Logistics.

CargoNet recorded 692 cargo thefts in the third quarter of 2023, a 59% increase when compared to the same period in 2022. Still, even with cargo thefts surging, the supply chain field as a whole largely does a good job of preventing theft, says Keith Lewis, vice president of operations for CargoNet at Verisk.

The problem is “that when things go wrong, they go very wrong, and it has a significant impact,” he adds. The chief challenge for companies is taking the necessary steps to prevent theft without slowing the movement of freight significantly and undermining their profits.

Here are some key ways that shippers and others can work to combat cargo theft in the most challenging landscape in years.

1. Understand the new vulnerabilities.

Cargo theft can be divided into two types: straight theft and strategic theft, according to Scott Cornell, transportation segment lead, crime and theft specialist at Travelers.

Straight theft, the most common and traditional form, means physically stealing cargo. Strategic theft is less straightforward and it’s rapidly on the rise, jumping a startling 430% year-over-year in the third quarter of 2023.

“Strategic theft is when thieves use methods such as identity theft, fictitious pickups, and double brokering scams,” Cornell explains. “That’s done partially virtually.

“We’ve seen the largest increases in that category since about halfway through 2022, all through 2023, and we expect it to continue into 2024,” he adds.

Thieves essentially find ways to exploit the systems that have been implemented to make the supply chain faster and more efficient.

“Whether that’s load boards, the use of email, or internet platforms—all those things that have been put in place to help the supply chain move as quickly as demand—are the same things that cargo thieves take advantage of,” Cornell says.

The pressure to move freight faster to keep up with customer expectations can create “an environment where things fall through the cracks,” Cornell says.

“Moving freight at the speed of light, even if we are do a very good job of vetting, creates vulnerability,” Lewis says.

While busy port areas remain the most-targeted areas for thieves, the use of identity theft and other virtual methods means that thieves can steal cargo anywhere, widening the geography of where thefts are occurring to the interior of the United States and other nontraditional cargo theft areas.

“That will be a big shift for the industry going forward,” Cornell says. “How do you deal with that, when most of the resources that have been built over decades around cargo theft are concentrated in those traditional hotspot areas?”

2. Put in place processes, procedures, and culture.

Companies should have strong processes and procedures in place to prevent theft, and maintain diligent training and oversight of those processes to ensure team members do not cut corners.

Cargo theft is often about people failing to follow basic protocols. “Many cargo thefts, especially pilferages, are crimes of opportunity,” notes J.J. Coughlin, chairman of the Southwest Transportation Security Council.

Security needs to be treated as a company-wide point of emphasis—a focus integral to an organization’s culture and to its relationship with its partners and providers. “Everyone should be pulling the rope in the same direction and understanding what you’re trying to do and how you’re trying to do it,” Coughlin says.

Cornell agrees that solid processes and procedures serve as the foundation for cargo theft prevention. For instance, he points to the value of using a “red zone.”

“Cargo thieves will sit in surveillance outside a distribution center and follow loaded trucks as they come out,” Cornell says. “They hope that the driver goes straight to a truck stop to fuel and have a meal before they get back on the road. That gives them an opportunity to steal the tractor and trailer.

“A red zone is about making sure drivers are fueled and rested prior to picking up the freight, so that when they pick up a load, they can travel 200 to 250 miles without making a stop,” he says.

“That won’t eliminate the opportunity for cargo thieves to follow them, but more often than not thieves are looking for the truck that will go 20 to 30 miles,” Cornell says. “You improve your odds.”

As part of their procedures, shippers need to have a firm plan in place in the event of a theft. That includes knowing what resources to access and who to contact immediately for support to work toward recovering the stolen cargo.

“If a theft occurs at 2 a.m. Friday, everybody needs to know what their role is, and they need to be able to execute it quickly because after the first 24 to 48 hours, the chances of recovery drop by 50%,” Cornell says.

3. Leverage tools, data, and intelligence

Tactically, locks and plastic seals are a vital part of securing loads. The simple use of locks—such as high-security rear locks, landing gear locks, air cuff locks and kingpin locks—can have a consequential impact on combating theft.

“Anything you can do to deter a thief for a bit makes it more likely they will go somewhere else,” Lewis says.

Technology also offers an array of ways to help curb cargo theft. That includes visibility tools and GPS-based covert tracking, which can be integrated into the trailer or into the cargo itself.

Technology also can provide alerts when doors have been opened or when a truck is moving when it is not supposed to be.

Carriers, drivers, and others also should be aware of trends in cargo theft so that they are aware of areas where cargo often is stolen and how it’s stolen so that they can avoid possible vulnerabilities.

For instance, CargoNet provides data and intelligence about theft that companies can use to improve security, including noting routes and stops that have proven to be problem areas. If CargoNet puts out Be On the Lookout (BOLO) notices about cargo thefts into a particular area, then carriers and others should be aware of that threat and take precautions accordingly.

“It’s important for companies to ask if they’re getting the right information to their decision-makers so that they can act accordingly,” Lewis says.

4. Vet and verify.

Identity theft is common in the consumer world, but it is also a common method of strategic theft. The best way to prevent it is by vetting carriers thoroughly.

Thieves will steal the identity of a legitimate trucking company then go to a load board and solicit a load that appeals to them.

“In that scenario, freight brokers have to be good at vetting that carrier and realizing that it is not actually ABC Trucking, even though it’s pretending to be,” Cornell says.

That means learning to spot the red flags that indicate identity theft has taken place and putting in place measures that prevent thieves from accessing the screening process in the first place.

In the case of a so-called fictitious pickup, a freight broker may have done everything correctly, including properly vetting a legitimate carrier. However, cargo thieves will show up ahead of the scheduled pickup, pretend to be the appropriate carrier, and then be allowed to take the cargo erroneously.

“It is important for there to be open lines of communication and good processes and procedures in place with that shipper to verify that the carrier and driver that they say is there to pick up the load is the carrier who that load is supposed to be released and assigned to,” Cornell says. “That’s the key to avoiding a fictitious pickup.”

Shippers sometimes assume that the broker they hired has done due diligence on any carrier that they use, but that is not always the case. Instead, shippers should make their security requirements clear to anyone they partner with and ensure that partners are contractually liable if they fail to follow established security procedures.

Shippers who use third-party logistics providers or outsourced transportation services often do not obtain all relevant information from the driver and unit picking up their goods.

“I call this ‘point of pick-up control,’” Coughlin says. “You must capture unit information, license plates, Department of Transportation numbers, markings and pictures on the tractor/trailer, driver license information, and pictures. Then, if the loads go missing, you have something to provide to law enforcement.
“Don’t assume someone has all this information because 90% of the time they don’t,” he cautions.

5. Stay involved.

Getting involved with industry organizations that emphasize cargo security is one way for companies to strengthen their security efforts.

For instance, the Transported Asset Protection Association, a nonprofit organization that develops industry standards for supply chain security, hosts the kind of security-focused webinars, conferences and courses that can be invaluable, Cornell says.

Joining regional security councils such as the Southwest Transportation Security Council also can bring large benefits for organizations as a place to share intelligence and resources.

“Get involved in different organizations so that you can have access to the current intelligence that the industry is providing,” Cornell says. “It’s a great way to be a part of the solution to the cargo theft problem.”

Park It

Parking and safe areas for pit stops are enduring challenges and critical to cargo security.

A lack of available truck parking ranks second on the list of the trucking industry’s top concerns—the highest the issue has ever ranked on the list—finds the American Transportation Research Institute’s 19th annual Top Industry Issues report released in October 2023.

“Secure parking and secure stopping areas are sore spots for drivers,” says J.J. Coughlin, chairman of the Southwest Transportation Security Council. “Truckers work within mandated driving time limitations, and many times they deliver to industrial areas of the city that are not the best parts of town.

“Drivers need to pre-plan their trip and identify where it will be safer to stop, rest, or refresh,” he says.

One resource to help drivers with their search for parking is the Trucker Path app, which provides real-time information from its nearly 1 million driver users at all hours of the day on a variety of driver-related topics, including truck stops and parking availability. Trucker Path also recently partnered with We Realize to allow drivers to use the app to reserve secured parking at certain lots.

“In the past six or seven years, many private parking locations have popped up with reserved parking available, and that’s a viable solution,” notes Chris Oliver, chief marketing officer for Trucker Path. “Truck stops and rest areas are viable as well, but finding them is not always easy. That’s the void that the app looks to fill.”

With parking, it usually is better for drivers to use foresight rather than to improvise, particularly in densely populated areas with highly competitive parking climates where reserving a paid spot might make sense.

“Drivers have a good feel of where they will be at the end of a day or a shift,” Oliver says. “Planning ahead based on that information can be important.”

In addition to finding secure parking spaces, one simple method of reducing thefts in truck parking lots is parking a trailer back-to-back with another trailer, making access to the trailer nearly impossible.

As an alternative, Keith Lewis, vice president of operations for CargoNet at Verisk, recommends that drivers pull straight into parking spots rather than backing into them, ensuring that the trailer doors are exposed and potential thieves do not have cover to access them.

The post To Catch a Thief: 5 Ways to Boost Cargo Security appeared first on Inbound Logistics.

As 2024 gets underway, leaders at U.S. ports view the concept of eco-friendly port operations as a vital element in nearly every aspect of operational decision-making. In short, sustainability is a primary focus.

“It’s definitely at the top of the list,” says Eric Caris, director of cargo marketing for the Port of Los Angeles, which is at the forefront of national and international sustainability efforts with initiatives such as the world’s first transpacific green shipping corridor connecting Southern California with Shanghai.

Other strategies for the new age in port leadership include increased collaboration among intermodal partners as well as other ports, plus ambitious infrastructure enhancements and greater use of digital tools to provide advanced visibility throughout the supply chain.

Sharing Goals

In addition to the ports’ own sustainability objectives—which are consistent with White House initiatives to achieve climate-resilient supply chain infrastructures and operations—many shippers are likewise motivated to improve sustainability in their operations. The ports, therefore, seek to partner with their customers to bolster individual sustainability efforts.

The move toward sustainability is not without challenges, however, notes Mike Bozza, assistant director of commercial development for the Port of New York and New Jersey. Specifically, it’s difficult to acquire sustainable equipment that operates with zero or low emissions.

One example is battery-operated straddle carriers, which are used for container loading and unloading. Electric straddle carriers require scheduled charges, Bozza notes, causing the equipment to be temporarily out of service, which is not ideal. The technology for sustainable equipment is steadily improving, however.

The Port of New York and New Jersey, as well as other ports, is moving resolutely toward a more sustainable future. “We are working with our terminal operators and we’ve got our own net-zero roadmap,” Bozza says.

The Port Authority’s goals include getting to net zero by 2050 as well as achieving a 50% reduction in greenhouse gas emissions for Scope 1 and Scope 2 emissions between now and 2035. (Scope 1 refers to direct emissions from sources an entity owns or controls while Scope 2 means indirect emissions from purchased electricity, steam, heat, and cooling.)

To accomplish these goals, “We’re doing things like solar installations and investing in electric vehicles for our light-duty and medium-duty fleet,” says Bozza.

The Port Authority of New York and New Jersey has also announced a “green gateway” for goods as part of the agency’s overall commitment to reducing emissions from its own operations as well as its operating partners, including marine terminal operators, oceangoing vessel operators, railroads, and trucking companies.

To date, 89 of the port’s 91 ship-to-shore and rail-mounted gantry cranes are electric, with a mandate for full electrification by 2026.

Through a marine terminal tariff, the agency is phasing out old equipment and requiring terminal operators to move to zero-emission material handling equipment as new models become commercially available.

Partnering for Progress

The Port of Los Angeles (opposite) and the Port of New York and New Jersey (above) have both embraced “green shipping corridors” for goods as a way to reduce carbon emissions.

The Port of Los Angeles continues to provide national and international leadership with its initiatives around green shipping corridors, which the U.S. State Department defines as “maritime routes that showcase low- and zero-emission lifecycle fuels and technologies with the ambition to achieve zero greenhouse gas emissions across all aspects of the corridor in support of sector-wide decarbonization no later than 2050.”

In partnership with the Port of Long Beach, the Port of Los Angeles is working with the Port of Shanghai and the C40 Cities global network of mayors to reduce greenhouse gas emissions from cargo movements. One goal is to transition to zero-carbon-fueled ships by 2030.

Collaboration with shipping lines is essential to the success of these initiatives. “Without shipping line participation, you have no green shipping corridor,” says Caris, adding that the fuels of the future must be made available in sufficient quantities to meet the needs of shipping lines.

In December 2023, the ports of Los Angeles and Long Beach also unveiled a partnership strategy with the Maritime Port Authority of Singapore to establish a green and digital shipping corridor between Singapore and the San Pedro Bay port complex in Southern California.

Collaboration was a central theme of the announcement, made at the United Nations Climate Conference in Dubai. “Our success requires the resolve and dedication of the three partnering ports as well as our industry partners,” said Gene Seroka, executive director of the Port of Los Angeles. “Together, we will model the collaboration necessary to achieve our climate and efficiency goals.”

Port of Long Beach CEO Mario Cordero echoed Serkoka’s comments. “Over the past two decades, we’ve learned that collaboration between maritime industry partners is the key to making meaningful progress in reducing emissions and cleaning the air,” Cordero said. “This transpacific green shipping corridor takes this concept global.

“The strategies we develop here can be used as a roadmap by a larger network of seaports and supply chain companies to invest in programs, technologies, software, and infrastructure to decarbonize international trade everywhere,” he added.

In his annual State of the Port address to stakeholders in January 2024, Seroka reiterated the LA port’s commitment to sustainability and the environment, bolstered by the fall 2023 announcement of up to $300 million in federal grant funding for the development of “hydrogen hub” operations in the San Pedro Bay port complex.

Stronger Infrastructure

Top-priority infrastructure developments at the Georgia Ports Authority include the newly opened Mason Mega Rail, the largest marine terminal rail facility in North America.

Across all political lines, port infrastructure has also been a perennial theme of discussion among state and federal government leaders—and those discussions are expected to intensify in the 2024 presidential election year. National and state infrastructure priorities include waterway projects designed to strengthen supply chains, speed the movement of goods, and reduce costs.

U.S. ports are leading the way in these efforts, exemplified by initiatives at the Port of Galveston, Texas, where years of groundwork are expected to reap progress with developments including major cargo infrastructure improvements and free-trade zone expansion.

Located on the deep-water Galveston Harbor and ranked as one of the Top 50 U.S. Water Ports by the U.S. Department of Transportation, the Port of Galveston is a major cargo hub that also boasts three cruise terminals.

Guided by its 20-Year Strategic Master Plan, the port is maximizing its assets for aggressive growth.

“A major focus of the master plan is expanding our cargo business by increasing acreage and improving infrastructure at our West Port Cargo Complex,” says Rodger Rees, the port’s director and CEO. “A top priority is improving decaying waterfront infrastructure after decades of neglect.

“We’re also nearing completion of a two-mile-long interior roadway to move cruise and cargo traffic more efficiently, while helping to alleviate congestion on nearby downtown roadways,” he adds.

Infrastructure is also a top priority for the Georgia Ports Authority (GPA), which represents a network of both coastal and inland ports. Included among the GPA’s ports is the Port of Savannah, the single largest and fastest-growing container facility in America.

“The infrastructure development at our Garden City Terminal West facility and the upgrade and expansion of Ocean Terminal as a container facility will be exciting developments to watch,” says Ed McCarthy, GPA’s chief operating officer.

Another central theme commanding the attention of port leaders in 2024 can be expressed in a single word: linkage.

One example is the Council of Port Performance at the Port of New York and New Jersey. The council is a group of critical stakeholders including the Port Authority, the Shipping Association of New York and New Jersey, marine terminal operators, and labor.

“This group was formed about 10 years ago to deal with congestion challenges at that time, and it has been a critical element of our success at the port,” Bozza explains.

Creating Key Linkages

The Port of Galveston, Texas, is expanding its cargo business by increasing acreage and improving infrastructure, including a new interior roadway, at its West Port Cargo Complex. The road will help to move cargo traffic more efficiently and alleviate congestion.

“We learned from our challenges during the pandemic that you have to look at the entire supply chain,” he adds. “The council and our port efficiency team are trying to create linkages from the ship all the way out to the warehouse—and every point in between—so we understand all the individual nodes.

“By doing that, when the next cargo surge comes, we will understand where those bottlenecks are and hopefully work to address them quickly,” Bozza adds.

Data transparency has helped the port augment existing relationships with trucking and rail partners with links to warehouse and distribution facilities via a weekly dashboard developed with input from all elements of the stakeholder community.

Strengthened relationships at U.S. ports also extend beyond direct business partnerships. For example, the Port of Los Angeles regularly exchanges information and insights with ports around the globe. Among other benefits, Caris says, the ports have learned from one another about ways to improve their “shore power” infrastructure. This strategy helps them reduce emissions by enabling vessels to turn off their engines and plug into the local electricity grid to power auxiliary systems while at berth.

This new age of port leadership and the increased emphasis on sustainability and other forward-thinking priorities at ports across the country benefits not only supply chain stakeholders, but the U.S. economy and businesses as well.

Spending Billions to Boost Shipping on Great Lakes, St. Lawrence Seaway

Initiatives to address the needs of the next generation in maritime shipping extend from the coasts to the vital U.S. inland port network. Especially noteworthy are investments in the St. Lawrence Seaway, which enables oceangoing vessels to travel to and from the Atlantic Ocean and to reach ports in all five of the Great Lakes via the Great Lakes Waterway.

From 2018 to 2027, $8.4 billion will have been spent to enhance marine shipping on the Great Lakes and St. Lawrence Seaway, estimates an independent survey of public and private investment firms. The survey was developed as part of a project that was requested by a public/private sector committee of American and Canadian maritime organizations.

Prepared by economic and transportation consulting firm Martin Associates, the survey quantifies ongoing investments in the navigation system to help support long-term planning and economic development goals, while also building confidence in the system’s future viability.

The survey shows that as the world undergoes a shift toward more sustainable practices, the marine shipping industry and the U.S. and Canadian governments are partnering to actively invest billions to lead the transition. In addition to identifying the level of investment, the survey also reveals investment in specific aspects of the Great Lakes–St. Lawrence Seaway system.

Expressed in U.S. dollars, this includes investments of:

• $636 million in vessel enhancements between 2018 and 2022, with at least another $328 million planned by 2027.
• $2.1 billion to enhance port and terminal infrastructure between 2018 and 2022, with at least another $1.1 billion planned by 2027.
• $3 billion for waterway infrastructure such as locks, breakwater structures, and navigation channels between 2018 and 2022, with at least another $1.2 billion planned by 2027.

The size of these expenditures illustrates broad recognition that economic growth and greenhouse gas reduction ambitions can be achieved through significant investment in maritime shipping, say port leaders.

“The survey’s conclusion is clear,” said U.S. Transportation Secretary Pete Buttigieg. “Both the public and private sectors recognize maritime commerce on the Great Lakes and St. Lawrence Seaway remain essential to the economies of the United States and Canada, and both the public and private sectors are investing to protect this irreplaceable system.

“Through President Biden’s infrastructure law, we are investing in marine shipping, which will continue to support high-quality jobs, strengthen America’s supply chains, and drive sustainable economic growth.”

The post Ports Update: New Strategies for a New Age appeared first on Inbound Logistics.

“For too long, we’ve thought about supply chains as cost centers,” says Rob Cushman, senior partner, supply chain transformation, with IBM Consulting. At their best, however, supply chains are growth drivers, he adds.

Automation is key to corporate initiatives to drive growth. As more supply chains digitize, they can deliver a wealth of data. A lack of automation, however, can keep supply chain leaders from accessing real-time, enterprise-wide information that can help them identify operational inefficiencies.

Here’s a look at the benefits possible from automating the supply chain.

Enhance Inventory Visibility

Many benefits possible with automation stem from the visibility it can provide.

Visibility and automation are key tools for companies facing pressure from customers, as well as internally, to cut inventory and costs.

“CFOs are closely monitoring supply chain and logistics operations,” says Ashutosh Dekhne, partner and head of Americas supply chain operations and tech practice with EY. “Many are questioning the labor required to make and ship items.” Automation can streamline processes, allow workers to contribute strategically, and cut costs.

The inventory visibility made possible through automation helps companies avoid overstocking products that are at risk of growing obsolete, or understocking hot-selling items and losing sales.

Accelerate Speed to Market

Companies can leverage automation to rev up speed to market. When they leverage dynamic planning solutions and employ automation, companies can act as soon as they receive market signals.

“Conversely, if a company takes several days to plan, it negates the benefit of getting the demand signal quickly,” Dekhne says.

Attract Workers

By making many warehouse and distribution center positions more appealing, automation can help companies tackle the current labor shortage. “Nobody wants to work in a facility where the easiest thing to use is their cell phone and everything else is 15 years behind the curve,” Dekhne says.

Meet Sustainability Goals

Even once products are in transit, automation has a role to play. Vehicle routing and scheduling solutions enhance full truck utilization and optimize routes, reducing emissions, among other benefits, says Robert Recknagel, vice president, logistics and manufacturing with Flexis, a provider of supply chain solutions. Integrating a three-dimensional container-loading solution further maximizes space utilization and cuts transportation costs.

These benefits have gained prominence as attention to sustainability increases. “More companies are aiming to streamline processes and align automation efforts with initiatives that address environmental concerns,” notes Craig Moore, vice president, sales, North America, with Körber Supply Chain.

Gain Control

Manual inventory management methods are no longer productive. Many companies are incorporating Inventory visibility technology into their omnichannel fulfillment operations to better predict inventory flows and reduce operating costs.

Once an organization has data, it needs to convert it to information. This may take the form of a supply chain control tower, which Gartner defines as “a combination of people, process, data, organization, and technology that captures and uses (close to) real-time operational data from across the business ecosystem to provide enhanced visibility and improve decision making.”

By assembling information from across a supply chain, control towers can develop “one source of truth,” says Barry Bradley, head of supply chain with Crisp, a collaborative commerce solutions provider.

When all areas of an organization work from the same information, they can make better-informed decisions, he adds.

Take the example of RxSugar, which provides allulose, a plant-based alternative to regular sugar, through more than 15,000 stores and 30-plus brick-and-mortar and ecommerce channels.

“As a relatively new product, our main challenge has been the supply chain-constrained ecosystem in which we operate,” says Steve Hanley, founder and chief executive officer.

The limited universe of allulose manufacturers, combined with RxSugar’s impressive growth, calls for a carefully planned and streamlined supply chain. To help reach this goal, RxSugar implemented a data platform from Crisp that can aggregate data on sales, distribution, inventory, and other functions from across the company’s distribution channels.

Hanley and his team can assess top-level demand across the network in real time, plan production, and keep shelves stocked. “We are now able to get ahead of our supply chain and we can order materials and packaging with 12-week lead times,” he says.

Leverage Robotics

Robots, such as Boston Dynamics’ Stretch, can boost warehouse efficiency and improve picking accuracy, among other benefits.

By 2027, more than 75% of all companies will have adopted some form of cyber-physical automation within their warehouse operations, according to Dwight Klappich, vice president and fellow with Gartner’s supply chain practice, in a recent brief.

Mobile robots typically require lower capital investments than fixed automation systems, says Rowan Stott, research analyst with Interact Analysis. In addition, it’s typically easier to add robotics to existing warehouses than to put in a new, fixed system.

Adding to robotics’ appeal is their dropping prices. Between 2011 and 2022, the average price of an industrial robot fell by about half, finds EY research. Conversely, wages and salaries rose about 43% over the same period, according to Statista.

Boost Decision-Making

Like control towers, digital twins can aid in decision-making. These are virtual representations of objects or systems that span their lifecycle, are updated with real-time data, and use simulation, machine learning, and reasoning to help decision-making, IBM explains.

Companies can use digital twins to simulate the impact of an event, such as a supplier that halts plant operations due to a weather event. To provide the most value, a digital twin should concentrate on modeling hot spots and critical components. “Be smart about what you want to model,” Dekhne recommends.

Improve Data Insights

In the supply chain world, artificial intelligence (AI) is capturing attention. Successfully implementing AI-enabled supply chain management solutions enabled early adopters to improve logistics costs by 15% and inventory levels by 35%, among other benefits, compared to their slower-moving competitors, McKinsey research found.

Generative AI is upping the ante. Generative AI empowers users to build their own interactive models, Deknhe says. For instance, a supply chain planner trying to determine the impact of a 20% jump in demand for a product has typically needed to manually assess supply levels and contact suppliers to get information on raw material supplies, among other data—a process that can take days. Generative AI can ask the same questions, work with the data, and adjust models to more quickly provide this insight.

Advance with Software

While traditional software solutions, like warehouse management systems, may not generate the same buzz as AI, they remain critical to many supply chains. They also continue to advance. Thirty years ago, companies could complete materials requirement planning (MRP) about once a week.

“We would dim the lights whenever we hit the enter key,” recalls Steven Benz, senior consulting manager with Panorama Consulting. Today, companies can generate MRP reports every 15 minutes.

Current algorithms can automate forecasting, inventory control, and supplier selection, among other functions. While algorithms—sets of finite rules or instructions to be followed in calculations or other problem-solving operations—aren’t true AI, they make software solutions more robust and useful.

Automate from End to End

More companies are evaluating and automating supply chains in their entirety, rather than focusing on optimizing individual pieces. A more comprehensive approach can help supply chains better handle disruptions, such as geopolitical events.

“End-to-end process automation can bring together siloed systems, connect people involved in different processes, and allow information to flow securely, says Gary Cassell, global industry lead, manufacturing and automotive, with Appian.

Organizations can act on the information to build resilience and optimize performance. When companies link their systems through a digital layer, they minimize the need to rip out solutions that are working but disconnected.

End-to-end solutions often encompass multiple systems. For instance, supply chain execution systems can expedite operations for swift, efficient task completion, while warehouse control systems (WCS) can serve as vendor-neutral hubs, orchestrating diverse material handling technologies for uninterrupted material flow. A WCS can integrate with a warehouse management system to optimize material flow.

The result? “An integrated process, enhancing warehouse throughput and performance,” Moore says.

Connect Through the Cloud and APIs

Automation has generally lagged where old systems need to be linked with new software solutions. Cloud-based software solutions can help by enabling the rapid exchange of data between all supply chain parties in real time, so data-based decisions can quickly be made.

APIs also offer a scalable solution for sharing data, unlike the generally cumbersome practice of emailing spreadsheets back and forth. APIs encompass a set of defined rules that allow different applications to communicate with each other. They enable access to information by sharing folders via the cloud.

Optimize Routes

Route optimization technology can improve delivery productivity while hitting customer service targets. This improvement can reduce delivery costs—distance, vehicles, or drivers—and increase delivery capacity.

It’s not only the operations inside warehouses or distribution centers where automation can drive efficiency. Route optimization software can leverage AI to dynamically match carrier capacity with loads, minimizing empty miles and helping carriers fill their trailers, says Justin Haines, director, fleet solutions with Coyote Logistics, which offers such a solution.

Improve Yard Management

In contrast to the automation seen in many warehouses and in transportation management, the “yard often is clipboards and walkie-talkies,” says Greg Braun, chief revenue officer with C3 Solutions, which offers yard management solutions. Yet technology has a role to play here.

Yard management automation can include a range of solutions. Some systems allow drivers to check in with their smart phones. Artificial intelligence can support task optimization, such as determining optimal trailer moves, Braun says.

As technology advances, the value of automating the supply chain will only grow. Companies that are quicker to leverage automation will gain first mover advantages, as well as the ability to attract top-notch talent. “It’s a win-win,” Dekhne says. n

7 Steps to Implementing Automation

While the benefits of supply chain automation are clear, the skill with which it’s implemented contributes to a solution’s success. These guidelines can help.

1. Focus on adding value. The solutions that will add value vary by company, says Lisa Anderson, president with LMA Consulting Group. Ecommerce retailers may find that automating the order-taking process adds the greatest value, while distributors might look to advanced analytics and planning solutions to better manage inventory and free up cash.

2. Take it step by step. Start with a solution that brings a rapid return on investment and addresses the most urgent problems, and then build from there. Introducing too many functions at once increases complexity and can overwhelm employees.

3. Invest in change management. When new solutions fail to live up to expectations, it’s rarely the technology that’s the reason, says Sandy Gosling, partner with McKinsey. Instead, it’s often a failure to build the capabilities needed to leverage the technology. Supply chain leaders can help employees understand how a new way of operating will benefit them and the company, and then train them on the systems.

4. Know your starting point. This isn’t always obvious, given corporate restructurings and changes in IT solutions. If you can’t identify the starting point, you risk generating needless disruptions when automating.

5. Check the data. The GIGO (garbage in/out) rule applies. While perfection isn’t necessary, data should be “directionally correct,” Anderson says.

6. Consider the impact to the organizational structure. It likely will change as new data becomes available. Employees who were good at finding problems may find their roles supplanted by technology. Instead, they’ll be charged with deciding how to address the problems.

7. Develop back-up plans. Automation can fail even with the best of care. Backup plans and systems can help with recovery until systems can be restored.

Pouncing on Automation

Automation is helping Tiger Tail USA “keep our team lean and efficient,” says Spring Faussett, president of the muscle recovery tools producer. Oracle/Netsuite’s manufacturing, inventory, and accounting system enables Tiger Tail to more systematically manage orders.

Among other benefits, Tiger Tail can enter product and vendor information, and then use reports and alerts to ensure proper ordering lead time and quantity forecasting.

When Tiger Tail receives inventory, it can quickly add this information and make it visible to all users. The company also uses inventory reports to work with vendors and shipping companies to ensure full truckloads.

“Although the system is expensive for our small company, it saves at least one employee and lowers accounting costs over the course of a year,” Faussett says.

On Tiger Tail’s consumer websites, custom APIs push orders into Netsuite, minimizing human handling. Custom APIs allow Tiger Tail to easily add new websites and products, which otherwise would be difficult to manage, Faussett adds.

The post 13 Top Benefits of Automating Your Supply Chain appeared first on Inbound Logistics.

Add in a pandemic and two wars and you’ve got the ingredients for the massive disruptions we’ve seen during the past few years. All these changes can cause headaches and sleepless nights for anyone charged with deciding where and when to develop a new manufacturing facility, warehouse, or distribution center—whether on an entirely new site or by expanding an existing facility.

Yet, within the constancy of change, certain core principles don’t change much at all. Think of them as the best practices of site selection; they revolve around major influences including labor, transportation, and costs as well as less obvious factors like natural resources and even climate change.

We’ve rounded up eight crucial tips from the experts for considering how and where to place facilities to best serve your distribution strategy.

1. Gather Your Resources

Don’t try to make your decision in a vacuum. Numerous resources can help you with the process, including site selection consultants, community-based economic-development organizations, commercial real estate firms, and logistics experts.

Your company’s internal operating departments are also experienced at what works and what doesn’t work within your distribution network, and how to handle the financial aspects of the decision.

Assemble a working site selection team that has both the knowledge and experience to conduct due diligence, vet every important site selection variable, analyze pertinent data, and agree on a solution.

2. Establish a Systematic Process

Decisions about where to locate facilities are determined by each company’s unique business goals, which means they vary depending on specific circumstances and objectives, notes Christopher Steele, president and CEO of EBP-US, a business consulting firm based in Boston.

Steele adds that site selection decisions typically involve at least the following four steps:

• Define the company’s business strategy and the success parameters for the new or relocated facility.
• Develop the site selection criteria, usually phased in such a way as to allow a progressive evaluation from broad to specific, for example from country to region to community.
• Examine the communities and sites directly.
• Involve three to four sites and communities in detailed discussions and negotiations.

Site selection is “very much a systems exercise,” Steele says. “There is no one factor that determines it. There has to be a holistic answer that is good for multiple reasons.”

3. Build Consensus

Choosing intermodal-adjacent sites, like this CenterPoint Intermodal Center outside of Chicago, helps reduce drayage transportation costs and cut emissions.

Site selection can be completed within three or four months, whether you’re considering a new distribution center, warehouse, or manufacturing facility. Meeting that timeline, however, depends on first building consensus within your organization so that team members—even with some internal disagreement—are all ultimately on the same page.

Edward (Ned) Hill, professor of economic development in the John Glenn College of Public Affairs at The Ohio State University, proposes the following key 10 steps to build consensus:

1. Assemble your team (internal and consultant).
2. Define goals, objectives, and key operational concerns.
3. Establish consensus on steps 1 & 2.
4. Define your business model and corporate culture.
5. Create a project timeline.
6. Establish consensus on steps 3 & 4.
7. Identify factors and variables critical to the company’s success.
8. Establish consensus on step 7.
9. Rank the regions under consideration.
10. Establish consensus on step 9 before commencing to identify specific potential properties.

4. Consider the Labor Force

Deciding where to put your facility “starts and stops with one word—labor,” says Terry Coyne, vice chairman in the Cleveland office of Newmark, a global commercial real estate advisory and services firm. “Labor completely drives everything.”

Coyne points to Honda’s decision, in 2022, to build a $3.5-billion EV battery plant in the small town of Washington Courthouse, in Fayette County, Ohio. “The plant is not near much, but it is near a lot of labor,” Coyne says. And the new factory will need that labor to fill an estimated 2,200 new jobs.

In addition, Honda is retooling existing plants in Union, Logan, and Shelby counties for EV production, and adding another 300 or so jobs there.

Workforce issues are especially critical now. “It used to be power, utilities, the cost of construction, and incentives, but since the pandemic, it’s labor, labor, labor,” Coyne says.

Look toward markets with large university systems, which produce “a heavy pool of young labor, and that tends to attract employers,” he advises. These markets also fuel future growth. “People move to where the jobs are,” he says.

5. Know Your Customers

The three rules of real estate—location, location, location—still apply, especially if your customer base is regional and labor is local.

That’s why Camrett Logistics, a Wytheville, Virginia-based third-party logistics company, invested more than $2 million to expand its Dublin, Virginia, facility with new construction. It also renovated existing space and purchased new forklifts and electric trucks.

“We decided to invest in the community where we already have three buildings,” says Cameron Peel, president and CEO of Camrett. “We have a good brand and name in this community and are confident we can fill 58 jobs over the next 15 months. Having roots in southwest Virginia made it an easy decision for us to invest here.”

In addition, the company considered its customer base and the position that Camrett holds within their supply chains.

“Costs for customers go up if we are located in Timbuktu,” Peel explains.

The company did consider other locations in the Southeast, but higher construction costs intervened. “It was hard to justify putting $150 per square foot into the ground when it was $50 per square foot four years ago,” he says.

And, with their current location, “we are already in a sweet spot to get to New York City, Philadelphia, Washington DC, Indianapolis, Nashville, Atlanta, and the entire East Coast,” Peel notes.

“We can offer one-day trucking to more than 50% of the U.S. population without having to move,” he adds.

6. Leverage Existing Assets

RLS Logistics decided to expand its Newfield, New Jersey, cold storage facility to leverage its existing assets and remain in an area that is conducive to serving the East Coast market.

RLS Logistics, a New Jersey-based cold chain 3PL, also decided to increase operations in its existing area. In October 2023, it announced the opening of its expanded Newfield, New Jersey, cold storage warehouse.

“Our Newfield facility is a busy campus,” said John Gaudet, vice president of business development, in a statement. “Adding cold storage warehouse capacity here has been well received by current and new customers. We are well on our way to filling the space and moving new customers into our network.

“With increased cold storage inventory, enhanced capabilities in fulfillment, and LTL cross docking, this expansion is a great opportunity for the East Coast marketplace,” Gaudet added.

The on-site expansion gives customers access to RLS’ temperature-controlled freight brokerage and LTL shipping services and allows businesses to manage their cold storage needs and transportation requirements through one 3PL partner.

“This development provides growth opportunities not only in our cold storage business but also in our direct-to-consumer fulfillment and cross docking warehouse business units,” says Russell Leo, CEO of RLS Logistics.

7. Think Ahead

Adam Roth lives by what he calls “The Rule of 1.5.” The executive vice president of Chicago-based NAI Hiffman, an independent real estate services firm, says that transportation drives real estate.

“I have found that issues in this sector eventually impact industrial real estate about 1.5 years later,” he explains.

For manufacturing, the 1.5 Rule means estimating your needs for power, water, climate, and “an additional factor, which is the new COVID,” Roth says. In the coming years, power and water will become scarcer, and climate change will play a bigger role in where natural disasters are likely to be more severe, he notes.

He recommends looking to expand in states that are able to export power, which means they have excess power. “Few states do that,” he says.

Water is also more difficult to find, “but the Great Lakes contain 84% of the continent’s fresh water, 95% of U.S. water, and 21% of global water,” Roth says.

In 2008, the eight Great Lakes states signed the Great Lakes-St. Lawrence River Basin Water Resources Compact, which allows them to control the lakes’ water and keep it in the region, with limited exceptions. The states reached a similar agreement with Ontario and Quebec, Canada.

Regarding climate, Roth recommends looking at FEMA’s National Risk Index, which includes data on 18 natural disasters—including avalanche, flood, fire, and drought—to determine risk by region.

“The number of disasters causing more than $1 billion in damages is alarming,” Roth says. “If you’re going to spend $50 million-plus on a plant, those are consistent factors to consider in site selection.”

The factors affecting his 1.5 Rule are always changing, he says. But the new realities around power, water, and climate represent “the biggest changes in the past five years.”

8. Strike a Balance

While all real estate search requirements are unique, “site selection is generally a balancing act between real estate, labor, and transportation costs,” says Kristin Leffew, vice president, real estate at Kenco, a 3PL provider based in Chattanooga, Tennessee.

To reduce transportation costs, Leffew recommends strategically locating warehouses and distribution centers near the main mode of transportation for shipping/receiving and to your distributors, suppliers, customers, or manufacturing plants.

Locating in an intermodal-adjacent facility also provides benefits. “Transportation is 12-14 times the cost of real estate,” Roth notes. “By locating on an intermodal campus, corporations can directly impact their transportation spend by saving on drayage costs and carbon emissions.”

On average, the annual cost savings by locating at an intermodal center is “equivalent to 50% of a corporation’s rent depending on their intermodal volume,” he adds. “In addition, the CO2 savings are also measurable and perpetual due to the reduced drayage miles.”

Leffew also recommends the following tips for factoring transportation costs into site selection decisions:

• Research each potential area’s workforce availability, skill, and wages on the front end. Many real estate service providers now have integrated tools that consolidate building availability and rates, labor data and wages, transportation costs, and GIS mapping into one platform. The tool can offer a facility ranking based on key metrics the user identifies.
• With vacancy at an all-time low and rates at an all-time high, evaluate market rents compared to transportation costs; it may be less expensive to consider a nearby location. For example, surging rents in the Inland Empire in Southern California pushed many companies to Las Vegas and Phoenix, where average rates are considerably less.

Other important factors to consider, Leffew says, include state and local incentives that may help reduce upfront capital costs, investments, and ongoing taxes; and local, state, and federal regulations—building codes, zoning, environmental and safety regulations—that may impact the operation.

A new focus on micro-distribution plays a major role in which areas are gaining favor. “The pandemic took a knife to big retail, which has changed last-mile distribution tremendously,” says Christopher Steele of EBP-US.

With e-commerce’s emphasis on micro-distribution and fulfillment, Steele points to 24 locations in the United States that support 100% of last-mile distribution within 100 miles.

Yet, with all these recommendations, the right choice for any one company is always unique. “It depends on the company’s exposure and markets,” Steele says. “The obvious answer sometimes is not the right answer when you look at the specifics.”

U.S. Hot Spots For Logistics Facilities

Where are the best and hottest places to expand your logistics operations? That depends on who you ask.

Perennial all stars include Atlanta, Chicago, Columbus, Dallas-Fort Worth, the Inland Empire of California, Las Vegas, Phoenix, Savannah, and New Jersey, according to Cushman and Wakefield’s Q3 Industrial Report, while Colliers’ 10 Emerging U.S. Industrial Markets to Watch in 2023 adds Austin, Charleston, Memphis, Raleigh-Durham, Reno-Sparks, Richmond, Salt Lake City, and Stockton/Central Valley of California.

In the coming fight for power, water, and climate safety, “Illinois, Pennsylvania, and the Midwest will thrive” in the manufacturing space, says Adam Roth of NAI Hiffman.

Newmark’s Terry Coyne picks Columbus, Ohio, as his hidden gem, because of its pro-business, incentive-heavy approach. He also cites Nashville, which has won site selection awards recently.

The Southeastern region “is rocking and rolling,” says Cameron Peel of Camrett, thanks to low wages and taxes, and a growing population.

The post U.S. Site Selection: How to Know Where to Go appeared first on Inbound Logistics.

The definition of white glove encompasses a wide range of services, depending on customer needs. Basically, it’s the next step beyond final-mile service, which delivers a product to the customer’s dock or curb. With white-glove service, providers take the product to the customer’s specific location of choice and install it or set it up for use.

As consumers become more comfortable buying large items online, and brands go all in on reducing the amount of stock in retail locations, white-glove service will continue to play a significant role in the fulfillment space. Parcel and LTL carriers will continue to purge big and bulky items that make their networks inefficient, shifting more volume to white-glove service options.

For their part, shippers are leaning toward white-glove service as a way to consolidate oversized shipments. Instead of sending, say, five bar stools in three oversized parcel deliveries, the shipper consolidates that order into one pallet load for white-glove delivery.

Data Centers Get Some Love

While furniture and home appliances have long embraced white-glove delivery, it is now gaining traction across a wider spectrum of industries. SEKO Logistics, for example, has added data centers to its roster of white-glove customers.

Long a staple in the furniture and home appliance industry, other sectors are embracing white-glove services as well. The growth of artificial intelligence and the remote work trend has created a surge in white-glove deliveries for data centers, for instance.

“Constant growth and refurbishment of high-tech equipment exists primarily within data centers,” says Brian Bourke, global chief commercial officer for SEKO, a global logistics provider.

Data centers are adding capacity, and outdated equipment has to be upgraded to handle the new workload. White glove provides an ideal scenario for deliveries to these data centers—even when they are located at the ends of the earth.

In one extreme example, SEKO Logistics delivered data center gear to a location above the Arctic Circle, where the items had to acclimate to the local weather for hours until they could be installed.

FAILURE IS NOT AN OPTION

Unlike shipping from dock to dock, there is no telling what a delivery driver might encounter in a white-glove scenario.

At the consumer level, that means doing whatever it takes—such as removing the door and then putting it back on—to get a new refrigerator into the customer’s kitchen.

At the commercial level, white-glove service could entail delivering complex medical equipment for demonstration use and picking it back up again or installing customized rooms for private video calls as employees return to work in open floor plan offices.

Customers, both consumer and commercial, have high expectations for service when they order expensive items for delivery. That also means the seller assumes liability for the product going into the customer’s location.

“Companies used to be able to deliver a $7,000 couch to the street, and the customer took care of it from there,” says Nick Brown, director of supply chain solutions for enVista, a supply chain technology consultant. “Now the shipper is responsible for getting it into the customer’s room of choice.”

Complexity and timing raise the stakes for white-glove deliveries. “These projects are time sensitive and often delivered in the off-hours and sometimes even weekend off-hours. When we deliver to a downtown location, for instance, we have issues like having to close off streets,” says Bourke.

Consumers also see white-glove delivery contractors as representatives of the company for whom they are delivering: 41% of consumers blame the brand when orders arrive late, according to a Loqate survey. This raises the pressure on white-glove service providers.

“If we deliver for a fitness company, the consumer looks at us like we are that fitness company,” says Rob Lamell, vice president of home delivery-U.S. for AIT Worldwide Logistics, a global transportation provider. “We are an extension of our client to their end consumer.”

Metrics THAT MATTER

For white-glove service, on-time delivery isn’t necessarily the most critical metric for success. Other factors, such as proof of damage-free delivery and compliance with procedures, are essential benchmarks.

“The definition of on-time delivery has become more nuanced because arriving early can be just as bad as arriving late,” Bourke says.

Customer service metrics are also key. Positive customer reviews are the currency that helps consumers build a comfort level with white-glove delivery services.

“Consumers like to shop at retail stores, and we have a big job in extending that experience into the home,” says Luis Escobar, director of operations, home delivery, for AIT, which delivers furniture, fitness equipment, and outdoor structures such as gazebos and gym sets via white-glove service.

The same emphasis on service applies to industrial settings. For example, when SEKO Logistics returns medical devices to a warehouse, the company must prove that the units have been properly disinfected and all accessories have been collected for return. SEKO helps customers track the expensive accessory kits to ensure the inventory goes where it belongs.

“Each client measures us differently, and on-time delivery is one metric, but it’s not always the metric when it comes to white glove,” Bourke says.

Some products include their own built-in feedback that white-glove providers can use to track success. Data server racks, for instance, have a tip-and-tell device that records if the shipment tipped past a certain point that could cause damage to the server. Through the SEKO Live app, drivers can send photos to the shipper to find out how to address the situation if it occurs.

White-glove providers also use vehicle routing and scheduling systems to boost customer experience. These technologies—often available to drivers directly via an app—can collect and communicate attributes of delivery locations, so when drivers arrive, they know the parameters for delivery and assembly, including specifics like whether or not a loading dock is available, whether they need a key code to enter the facility, and if any hours are off-limits.

“The goal is to make the driver’s job as easy as possible to get as much throughput as possible,” says Brown of enVista.

These apps and technologies also play a role in the customer experience after a delivery is complete by enabling photographic proof of delivery, paperless forms, surveys, customer feedback, and other features.

TECHNOLOGY ENABLES OVERSIGHT

To ensure excellent customer service in the white-glove sector, management oversight is critical, according to AIT’s Escobar.

The company has built a regional field organization for its delivery and assembly services that can service every ZIP code in the country; 16 district managers vet and monitor contractors in their areas. The district teams benchmark contractor performance through a dashboard of compliance and deadlines.

In major markets, there may be some contractors that specialize in fitness equipment while others focus on furniture assembly. In a smaller market, one contractor may do it all.

AIT has travel teams ready to go to a customer site if a local contractor isn’t available. Customers assign contractors ratings, which AIT then uses to guide the jobs the contractors receive. “That allows us to continuously improve because we put the bulk of our work with the contractors that perform the best,” Escobar says.

Drivers for AIT use the next-stop feature in their mobile app, which alerts the customer when the truck is on the way to their location. Other milestones can trigger alerts as well.

“In our reviews, customers note how great it is to see the truck roll up and the delivery is aligned with the arrival information on their app,” Escobar says.

Drivers send proof-of-delivery photos through the app to verify they have completed an installation correctly and removed packaging material. The retailers AIT serves have access to the same photos for quality assurance. AIT field personnel conduct random spot checks to ensure the photos are of actual completed services.

A Little Help From Tech

“Our technology plays a big role in enabling us to elevate that level of service for our customers,” adds Lamell.

AIT also sends a customer survey 15 minutes after a delivery to quickly gauge the customer experience. A positive survey result is forwarded to the contractor as reinforcement. A negative result, or one where the customer indicates the experience wasn’t entirely satisfying, goes to district management for follow up.

By contrast, as a freight forwarder, SEKO takes ownership and liability of shipments, so it relies on its own network of proven carriers. The company vets and approves carriers, with some focusing on specific verticals such as medical installations.

With the many complexities surrounding white-glove delivery—and the likelihood the service will continue to grow in use cases—providers stay laser-focused on how they can deliver the best service to continue to meet customer demand.

“Issues always arise,” Bourke says. “The key is helping resolve them as positively as we can.”

WHITE GLOVE IN ACTION: No Room For Error

Room, a Brooklyn, N.Y.-based manufacturer of soundproof office pods and phone booths, delivers its products to corporate workspaces, such as office buildings and co-working spaces, and is seeing growth in non-traditional end users, such as universities and libraries. Each delivery is unique in terms of access, security requirements, municipal building codes, and many other factors. They all require a white-glove approach.

Delivery success starts with the initial contact with Room’s customer, typically someone in the sales department. First, the Room team checks the dimensions to ensure the office pod will physically fit in the customer’s facility. Then, it develops a pre-delivery planning guide to capture details like utilities, local code compliance, loading dock and freight elevator use, and delivery requirements.

“We try to make it as simple as possible for our customers, who might not be used to doing these large installs,” says Sam Krotz, director of services. “We coach them on checking with their building management about requirements and then also making sure their space inside is prepared for the build.”

Customers selecting Room’s smaller, less complex booths can typically complete the install on their own. For larger, more elaborate installations that incorporate networking, cameras, and display technology, Room contracts with the Office Moving Alliance, a consortium that manages installation specialists in markets across the country.

Room provides these specialists with digital checklists, accessed via Room’s app, that require photo or video documentation to prove everything is working. The app is cloud-based, so anyone within the company can comment or provide troubleshooting information in real time. QR codes in assembly manuals direct installers to more detailed videos and instructions for each product. And for some customers, Room uses video call software to communicate with the on-site installation team.

The Room team reviews and analyzes the documentation sent after each installation. A project can be flagged as “no follow-up is required” or “visit is required.” A re-visit could be due to a manufacturing issue, such as missing or broken parts, or an installation problem. The customer may ask for additional instructions on how to use the video conferencing software and hardware.

“We ask our installers to flag that for us so that we can proactively reach out to the customer with next steps if something goes wrong,” Krotz says.

For Room, premier white-glove service is crucial to the success of the business, she adds.

The post White-Glove Delivery: Giving Your Shipments the Red-Carpet Treatment appeared first on Inbound Logistics.

Small and mid-sized businesses (SMBs) are naturally focused on their product or service, but the ins and outs of supply chain and logistics planning may not be an area of specialty. Any SMB whose enterprise involves moving physical inventory must understand that failure to prepare and anticipate demand can kill even the best idea before it gets off the ground.

For SMBs, navigating supply chain operations and learning to partner with the right logistics and technology vendors can be just as important—maybe even more so—as it is for large companies.

OPEN FOR BUSINESS

Newly established companies hope that orders come in; they are excited and ready for their initial customers. Typically, they are prepared for orders to ramp up and may even be ready for a sudden surge, at least at the front end.

“The order-entry division or front end of a company’s supply chain can handle increasing demand, but the back end usually needs help,” says Brandon Novak, a senior director at consultancy Alpine Supply Chain Solutions.

For businesses at this stage, Alpine encourages investment in goods-to-person (GTP) automation technologies. Novak calls these quick wins, or plug-and-play scenarios, involving software that can improve picking inefficiencies fairly quickly in order to keep up with increasing demand.

“These technologies don’t require nearly as much infrastructure and time investment as implementing a whole warehouse management system,” he says.

If an SMB doesn’t have the capital to invest in a full GTP solution, there are smaller technologies such as automated guided vehicles (AGVs), automated robots and other types of product-to-picker solutions that are smaller in scale but could potentially help an operation keep productivity and efficiency humming cost effectively.

THE SURPRISE ELEMENT

Although undoubtedly good for business, the unexpected popularity of a product or products can cause major supply chain headaches for SMBs. When there’s no infrastructure in place to handle such a surge, Novak suggests SMBs lean into their vendors for a short-term solution.

“If it’s possible to push any packaging or additional labeling upstream to vendors, companies should seize that opportunity so they have less work to do internally,” he says. The same applies to the opportunity to drop-ship directly from those same vendors.

Relying on vendors in the short term buys an SMB some time to create or find a solution that will serve them more effectively over the long term. This might entail engaging a third-party logistics (3PL) provider and determining how to best leverage the 3PL’s technology offerings.

3PLs also offer specific market expertise that is helpful for SMBs. Some 3PLs specialize in cold storage or pharmaceuticals, for instance, while others concentrate on other niches. “3PLs are starting to become a lot more targeted in the services they provide and the markets they serve,” says Novak.

Before selecting a 3PL partner, Novack advises SMBs to interview the company just like they would any prospective employee. Key elements to investigate are the 3PL’s technology offerings and value-added services.

As part of that process SMBs should ask 3PLs questions such as: Do they offer kitting services? Can they do labeling? How do they handle reverse logistics?

Finding the right 3PL provider can bring many benefits to SMBs. Most importantly, it enables the SMB to hand off supply chain and distribution functions so they can focus on their own core competencies.

TECHNICAL DEBT

While SMBs may be prepared for surges in demand on the front end, their back-end distribution processes may not be optimized for growth. Partnering with a provider like Alpine Supply Chain Solutions can improve picking efficiency, among other benefits.

Unfortunately, many SMBs—even successful companies that have been operating for decades—have cobbled together a number of software solutions to handle their supply chain operations. This approach may hold the companies back when it comes to efficiency and productivity.

“Honestly, SMBs are drowning in having to configure all these technologies,” says Mikel Lindsaar, founder and CEO of StoreConnect, an Australian ecommerce solutions provider with U.S. headquarters in Clearwater, Florida.

Lindsaar has encountered SMBs with a 25-year history that still work this way. “These companies have traditionally installed the next-best software solution that came along and never consolidated their operations,” he says. In these instances, employees may have to log into as many as seven different systems to complete tasks.

This all-too-common approach brings about what is known as technical debt: the implied cost of future software upgrades or new systems required when an organization chooses an easy but limited solution instead of a better approach that could take more time.

“Competitively, SMBs need to look at their technical debt because it stifles their ability to expand quickly and to create and grasp new opportunities,” says Lindsaar.

And similar to how a bank loan must be serviced with interest payments, in the software world, companies often end up servicing technical debt with staff time and customer dissatisfaction.

LEANER AND MEANER

Pro-Ma Systems, maker of the Grace Cosmetics line, traded in its cobbled-together homegrown tech stack and implemented Salesforce and StoreConnect to improve and streamline back-end CRM and CMS functionality.

Pro-Ma Systems knows a thing or two about technical debt. As one of Australia’s largest, privately owned and family-operated direct-sales companies, its stock in trade is aloe-based cosmetics, cleansers, and body care products. Over the course of 40 years in business, the company, whose flagship brand is Grace Cosmetics, has expanded into the UK and Canada as well as the U.S. market.

Pro-Ma embraced tech solutions early on due to the complexity of its operations. “Because we’re a direct-sales company, a commission structure underlies the business,” explains Rob Hill, a senior manager at the 50-employee company, who notes that Pro-Ma began working with a software developer just a few years after the business launched.

“In the 1980s, we were creating bespoke software; there weren’t any off-the-shelf solutions back then,” he says of the core software that was written as the company’s commission structure engine.

The company also needed a customer relationship management (CRM) tool and an enterprise resource planning system (ERP), both of which were plugged into Pro-Ma’s core software by an in-house developer. When Pro-Ma began selling via ecommerce in the early 2000s, the back end became even more complicated. “It all became unwieldy over time,” says Hill.

This mashed-together setup caused increased risk and complexity as well as system bugs. “With all the recurring downtime for system changes, the cost to us was also increasing,” he explains.

Pro-Ma first considered outsourcing its ERP solution, then later its CRM solution, which led the company to Salesforce, a cloud-based software company. Shortly after, Pro-Ma was introduced to StoreConnect, a Salesforce preferred partner.

SINGLE SOURCE OF TRUTH

StoreConnect’s credo is that SMBs don’t need multiple Software as a Service (SaaS) systems connected by plug-ins to manage their online, in-store point-of-sale, and in-person customer commerce business systems. Instead, SMBs should have easy access to purchase history and account and contact information as well as supply chain and logistics data—that’s the goal behind StoreConnect’s solutions.

“The only way we found to accomplish our goal was to build our platform on top of Salesforce,” Lindsaar explains. “Doing so has allowed us to offer a complete, centralized, single-source-of-truth data position.”

Salesforce also offers a customer commerce solution, but its product is targeted at mid-market and enterprise customers. StoreConnect offers a more affordable product that is tailor-made for SMBs.

Sticking to the Core

The StoreConnect platform has worked well for Pro-Ma Systems. As it grew, the company hit the proverbial brick wall in terms of scalability and extensibility, and needed a streamlined solution.

“Managing our ever-growing software ourselves was turning us into a software development company,” says Hill, underscoring how important it is for an SMB to be able to focus on its core competencies.

Sold on both Salesforce and StoreConnect, Pro-Ma Systems took the plunge. From an onboarding point of view, it was a huge step to move software systems but the company was able to launch all the systems at the same time.

“Being able to do everything within the one ecosystem of Salesforce has made a big difference to us,” says Hill. “Running the CRM and the CMS for the website all in one place is powerful.”

In the past, when a promotional idea came up during marketing meetings, Pro-Ma staff knew they’d have to first check with their software developer to see if the plan was feasible. Even if it was, integrating a marketing initiative into their supply chain software was often a complicated process.

“Now with Salesforce and StoreConnect, we’ve got a team in place and we can just fire off a promotional or marketing email,” says Hill. “We can easily achieve so much more now that we have the freedom that this system enables.”

Consolidating multiple technological solutions that a company has acquired throughout its history takes time and sometimes a leap of faith.

“But the benefit is that you can start moving quickly again and that’s where the competitive landscape is going to improve for that small business,” Lindsaar notes.

THE ROAD TO SUCCESS

The right 3PL will work with an SMB to find an optimal transport solution, taking price and service into consideration. For its SMB clients, for example, ODW Logistics often recommends using consolidators instead of shipping LTL.

Mid-market and enterprise level companies typically have a better handle on logistics processes than their SMB counterparts. These firms know what their customers expect, they buy or manufacture at scale and their supply chain—fine-tuned to address end-to-end transportation concerns—operates like a well-oiled machine.

“And they’re likely doing all these things at a much lower cost per unit because they’ve been doing it for a long time,” says Dave Giblin, vice president of transportation services at ODW Logistics.

SMBs encountering large supply chain cost gaps often benefit from partnering with a 3PL to find solutions that give them the capabilities typically associated with bigger companies.

“SMBs might have a nice little product but they’re going to get clobbered on cost,” notes Giblin.

When it comes to transportation, SMB shippers do not usually send full truckload shipments. Small-package and less-than-truckload (LTL) freight is far more commonplace. While shipping LTL freight is easy and can bring cost savings compared to shipping full truckload, it may still not be the right fit for a small shipper.

“On a per-unit basis, the big shippers move full truckloads and their cost per unit is still lower than shipping LTL,” explains Giblin. Ideally, the right 3PL will work with an SMB to find the optimal transport solution in terms of price and service.

Sometimes, Giblin suggests, that solution may be a consolidator, who will take freight from multiple customers and put it all on the same truck. The consolidator will align the delivery date, pick up at one facility, deliver to one facility, and offer it at a much lower cost than LTL carriers that are generically consolidating freight but not specifically consolidating freight.

“LTL carriers offer a lot of extra touches, a lot of extra handling, and a lot of extra pickups and deliveries whereas a consolidator—if they’re effective in your network—builds much fuller loads and has fewer moving parts,” Giblin says.

REGULAR CHECK-INS

There are many agenda items that clamor for attention when an SMB conducts annual assessments of its operations, as it should.

“Supply chain can sometimes be an afterthought when it comes to budgeting and upgrading systems,” says Novak at Alpine Supply Chain Solutions. He argues that it shouldn’t be.

“A lot of small businesses will say, ‘Well, we’ve made it to this point using the software that we have. Do we really need something else?’ And the answer is typically yes, especially if you’re growing,” he says.

“Small and mid-sized businesses need partners and solutions that can scale and grow with them,” Novak adds.

The post Getting to Big: SMBs Embrace Tech and Partnerships appeared first on Inbound Logistics.

Today, drones serve many functions, ranging from monitoring climate change to carrying out search operations after natural disasters to photography, filming, and delivering goods. Amazon first revealed a plan for drone deliveries one decade ago, proclaiming drones would revolutionize shipping methods. At the time the news created quite a stir. Flash forward 10 years and drone delivery does occur, but there are still the hurdles to overcome.

Before a drone can be flown commercially, a user must first procure two certificates: One is an airworthiness certificate for the aircraft itself and the other is a domestic air carrier license, which is necessary to perform any sort of commercial air operations in the United States. Issued by the Federal Aviation Administration (FAA), neither certificate is new or specific to the drone industry, but rather standard procedure for all commercial aircraft.

STRINGENT GUIDELINES HOVER OVER THE INDUSTRY

“Requirement of an airworthiness certificate will make drone delivery as safe as manned aviation,” explains Beth Flippo, chief executive officer of Drone Express, an aviation and last-mile logistics company located in Dayton, Ohio. Acquiring these certificates, however, takes time because even though drones vary greatly from other aircraft, the FAA makes no concessions.

The required domestic air carrier license for drones is the same one required by American Airlines or any other airline. Same goes for the required airworthiness certificate: it’s identical to what a Boeing 747 or any other plane might receive. Not surprisingly, the guidelines are stringent.

“The FAA basically tore our drone apart and had us rebuild it in a way that was considered airworthy. It has to be produced exactly the same each time,” says Flippo, whose company has been working with the FAA for five years trying to get their operating certificates.

Despite that, Drone Express is already deploying drones on last-mile deliveries for their customers, which include Kroger, Winsupply, and Papa Johns Pizza. “In order to fly now, we have to maintain visual line of sight,” Flippo explains.

This means that although their drones fly autonomously, someone has to maintain full control of the aircraft and be prepared to take control should anything adverse occur. It’s a practice Drone Express started in 2021.

“This approach is not sustainable for extended operations,” Flippo notes, but it has allowed her company to start performing deliveries and seeing how the community responds. It’s akin to being in a testing phase and it’s where most drone start-ups are now. The holy grail is to be able to operate beyond line of sight and trust that the aircraft does what it’s supposed to do without connectivity.

PROGRESS TAKES FLIGHT

The Matternet M2 drone can deliver small packages weighing up to about five pounds.

In April 2019, Wing—an initiative of Google’s parent company Alphabet—became the first drone delivery firm to win FAA approval in the United States. The safety evidence it submitted included data that demonstrated a Wing delivery carried “a lower risk to pedestrians than the same trip made by car.”

In August 2023, Wing teamed up with Walmart to deliver items in under 30 minutes to homes located within six miles of stores in the Dallas-Fort Worth area.

Meanwhile in May 2023, drone delivery system developer Matternet’s partner Ameriflight received FAA approval to operate the Matternet M2 drone for commercial delivery, making it the second U.S. operator to obtain such authorization.

Combined, Matternet and Ameriflight became the country’s first fully operational, large-scale drone airline. The airline’s initial intent is to focus on healthcare and ecommerce deliveries.

The relative light weight of lab samples and pharmaceuticals bolsters the healthcare focus. Similar to most drones, a Matternet M2 can carry one package with a maximum weight of 2.2 kilograms or just under five pounds. That isn’t the whole story, however.

“Weight itself was not a key factor in targeting our initial customers,” says Jim O’Sullivan, vice president, regulatory and special projects for Matternet. “We chose to initially focus on hospitals, laboratories, and pharmacies because they rely on ground transport, which can be slow and unreliable. Matternet’s goal is to make critical goods and services accessible to all.”

Certain products do mesh well with last-mile drone delivery. Flippo says she was surprised when Winsupply, a U.S. construction materials distributor, approached them. “At first, I said ‘We can’t deliver a hot water heater by drone. This isn’t a good choice,’” she says.

But after learning that construction sites can shut down over small missing items, the idea made sense. “We can certainly deliver a water faucet and do it quickly so a project’s entire timeline isn’t disrupted,” Flippo says.

ECOMMERCE GETS AIRBORNE

Drone Express provides last-mile drone deliveries for companies including Kroger, Winsupply, and Papa Johns Pizza.

Ecommerce companies and products that are best suited for drone delivery are those that enable ultra-fast delivery of single packages such as food, lightweight consumer goods, and medical prescriptions. Compared to utilizing cars or vans, drone delivery dramatically lowers carbon dioxide emissions.

Integrating drone delivery into an ecommerce setting can take many forms. It can be as simple as hiring an outside drone service provider to operate the drone delivery network and establish a handoff process. “We piggyback off of the buy-online-pickup-in-store model that already exists in many retail settings,” says Flippo. For instance, shoppers order an item online at Target with plans to pick it up in one hour and employees bring it to the front of the store.

“Essentially, we use that same process except our pilots grab the item and put it on the drone for last-mile delivery,” says Flippo. “To employees, it just looks like any other order.”

An ecommerce provider could also bring a drone delivery system in-house and tightly integrate into its workflow. The future will likely see drones sitting on the roofs of stores waiting to launch. It’s conceivable, too, that robots could collect the packages that need to be delivered and bring them to the nearest drone.

Dispatching drone deliveries from a warehouse setting, by contrast, requires a number of landing/takeoff sites set up outside the facility, along with battery charging facilities and drone storage.

“Key challenges to implementing drone delivery for ecommerce include addressing noise issues at the local level as well as establishing scalable methods for sharing airspace with crewed aircraft,” explains O’Sullivan. “Some municipalities have regulations limiting the times and places a drone may land or take off.”

TAKING THE MIDDLE MILE TO NEW HEIGHTS

The vagaries of the regulatory landscape have led some drone startups to concentrate on middle-mile delivery. There’s no need to work out the safety details for landing in someone’s backyard or driveway when larger deliveries to specific cargo drop-off and take-off locations can be accomplished.

That’s the focus of San Francisco-based drone startup Volansi, whose electric-hybrid, vertical takeoff and landing (VTOL), fixed-wing drone is capable of carrying up to 10 pounds of cargo for as far as 50 miles.

Its fixed-wing aspect allows Volansi and other drones like it to fly for longer periods of time, while the vertical takeoff component allows drones to be more nimble and take off from a much wider swath of spaces without needing infrastructure like a runway.

In November 2023, San Francisco-based Elroy Air flew its autonomous hybrid eVTOL cargo aircraft known as the Chaparral for the first time. It took off vertically from the company’s flight test operations center and successfully landed without incident after a 57-second hover flight.

The Chaparral aircraft is designed to carry 300 to 500 pounds of cargo and has a range of up to 300 miles. These kinds of statistics are game changers in the middle-mile arena.

Volansi’s deliveries focus on commercial and defense industries including construction, mining, oil and gas, medical, and heavy equipment operations.

Meanwhile, Elroy Air is working with FedEx Express to test a concept for middle-mile logistics and has also signed several agreements with prospective customers interested in using its Chaparral aircraft for commercial, military, and humanitarian operations.

The bottom line is last-mile delivery drones have smaller payload capacities and shorter ranges than drones being developed for middle-mile logistics. The ability to carry more cargo for longer distances increases middle-mile drone cost benefits over traditional transportation in this area.

Among other advantages, middle-mile drones like Elroy’s slash transportation hours and handoff times tied to trucks and other grounded vehicles. And, they actively shift the economic value of time savings to both the sender and receiver, according to a 2020 white paper from Levitate Capital, a venture firm focused on next-generation air mobility. (Note: Levitate Capital is an Elroy Air investor.)

THE SKY’S THE LIMIT

The global delivery drones market size was valued at $530.2 million in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 42.6% from 2023 to 2030.

A big selling point for last-mile drone delivery is convenience. It’s the ability to get Tylenol to a sick child in the middle of the night within 30 minutes or a forgotten ingredient while cooking dinner.

“We call it the ‘autonomy economy’ and it will change everything,” says Flippo. “It’s not that it’s cheaper per delivery. It’s that you can do incredibly convenient things.” A Drone Express app is already available that allows people to shop locally with unlimited delivery for $9.49 a month.

Early fall 2023 was a busy and productive time in the American drone marketplace. Four drone companies achieved the coveted FAA authorization to fly beyond the visual line of sight (BVLOS).

Two of the companies—Zipline and UPS Flight Forward—intend to use their BVLOS approvals to conduct drone package deliveries. Zipline is authorized to operate its Sparrow drone, while UPS Flight Forward is authorized to operate Matternet 2.

These approvals are a huge step forward for the drone delivery industry, which has been building momentum ever since Jeff Bezos first spun his seemingly fantastical tale regarding the future of Amazon deliveries a decade ago.

It turns out he wasn’t spouting science fiction, as 95% of Amazon deliveries weigh less than five pounds and drone delivery is within the realm of possibility. The company’s Amazon Prime Air service will deliver to customers in three U.S. locations as well as cities in Italy and the UK by the end of 2024.

In terms of last-mile drone delivery, even the five-pound weight limit is surmountable. “If you place a huge order with Kroger, it’ll show up via five drones because it doesn’t cost us anything to send them all to your house,” says Flippo.

Their service also helps customers eliminate the need for order substitutions. “If you order one flavor of ice cream and it’s not in stock, a drone from a different store will bring it to you,” she adds.

A DEMAND FOR EXPERTISE

Drone implementation will also create jobs. Just as manned aviation requires air traffic controllers, so does autonomous aviation. Robotics-related expertise will be in demand, as will software developers working on drone systems. A whole new industry aimed at developing and advancing drones is springing up.

The sky is indeed the limit. “Right now, the regulatory landscape is the biggest hurdle facing mass adoption of drone delivery,” O’Sullivan says. “The innovative technology provides a reliable, eco-friendly, and cost-efficient delivery model.”

The post From Sky to Doorstep: Drones Deliver the Middle and Last Mile appeared first on Inbound Logistics.

“That understanding comes from knowing your data,” says Micheal McDonagh, president of parcel for Louisiana-based third-party logistics provider AFS Logistics. “Be able to answer questions about your zones, packaging, weights, customers, destinations, and more.”

The RFP process is a crucial one for shippers and can set the stage for supply chain success. Shippers who approach the process by prioritizing planning, transparency, and communication are most likely to achieve results. Scope of services, terms, service levels, and performance metrics can all flow into place through a diligent process built on a proper foundation.

Despite the importance of RFPs, shippers do not always put in sufficient time to plan beforehand.

“Not sitting down and planning your strategy for the year is a big mistake,” McDonagh says. “Are you changing products? Are you growing? Where’s your volume going? Is your profile as a shipper changing? You also need to have those conversations and strategic planning sessions far enough in advance of an RFP so you know what is acceptable to negotiate based on your business needs.”

A successful RFP conveys all information that would impact pricing, such as specialized transportation requirements, equipment types, and seasonality.

Here are other steps to optimize the RFP process.

Build relationships with carriers. An effective RFP targets carriers who are the best possible fit rather than casting a too-wide net. For that reason, shippers need to know not just themselves but also have a clear understanding of the capabilities and limitations of each potential provider.

“Relationships, new or longstanding, are key,” says Sean Burke, chief commercial officer for Echo Global Logistics, a Chicago-based provider of technology-enabled transportation and supply chain management services.

Shippers can save time by being selective in the carriers they engage in an RFP. “Carriers have certain types of freight they’re not interested in, whether it’s the lane profile, mix, geography, or another factor,” notes Kevin Day, president of LTL for AFS Logistics.

“For example, a carrier may decide that handling large grocery or retail customers is not right for them, making any of that freight a nonstarter,” he explains. “Shippers can streamline their process by filtering out carriers who don’t fit upfront. This comes with the bonus of being better for carriers—even if the business isn’t right for them at face value, it still costs them time and money to process the RFP.”

Shippers that build a relationship with carriers will have a higher acceptance rate in their lanes.

“Also make sure to have a mix of asset providers and brokers in your freight awards,” says Tim Langfield, senior vice president, sales and business development, for MVP Logistics, a 3PL based in Minneapolis.

“Asset carriers do a great job of consistent lanes and volumes while brokers can tap into available capacity that you may not have known about,” he says. “They also are always good to work on last-minute loads or changes.”

An effective RFP emphasizes transparency with carriers as part of relationship-building.

“It’s also important to guarantee fair treatment of carriers throughout the bidding process, offering sufficient time and being trustworthy regarding realistic volume estimates and service requirements,” says Mike Weaver, vice president of sales for DAT Freight & Analytics, a freight exchange service and provider of transportation information based in Oregon.

“The speed of decision-making and implementation is a key factor for the overall effectiveness of the RFP,” he notes.

When shippers are transparent with their expectations and level setting they can get on the same page with carriers.

“It’s also important to understand what’s ‘normal’ or standard practice for LTL carriers so that shippers know what service expectations to flag,” Day says.

“For example, if a shipper says they want their freight picked up by 10 a.m. or they need weekend pickups and deliveries, live load, drop trailer, or other service requirements, they may be outside of normal practice for carriers,” he says.

Identifying these considerations early can help focus the conversation on what’s important for shippers and manage expectations upfront about feasibility and cost.

“You need to define the operational aspects that a shipper wants compared to a carrier’s standard offering, and address the gap in between,” Day adds.

Create comprehensive, accessible RFPs and bolster them with discussions. Burke recommends that shippers use technology or third parties to host their RFPs. The documents are too important to leave to someone unseasoned.

“You need someone experienced, who knows the ins and outs of each mode and what carriers look for,” McDonagh says. “There’s too much money on the line to leave it up to just anyone—it shouldn’t be their first rodeo.

“You need someone with a full perspective, not just someone in finance who knows numbers or someone who knows only logistics,” he says. “Creating an RFP is one of your biggest line items and leaving it to an amateur can cost you a lot of money.”

“Not planning your strategy for the year is a big mistake. You need to have those conversations and planning sessions far enough in advance of an RFP so you know what is acceptable to negotiate based on
your business needs.”

—Micheal McDonagh, President of Parcel, AFS Logistics

Meetings can strengthen the RFP process. “Having a group kickoff meeting for an RFP is good—however expanding that and having an individual kickoff meeting for what you would like the team to work on or focus on is better,” Langfield says.

Shippers should be flexible with changes to allow for a mutually beneficial contract and legal teams for both parties should be available for questions and negotiation.

“Often shippers evaluate willingness to sign an agreement versus evaluating the ability to live up to the commitment, creating an uneven playing field in contract terms,” Burke says. “Legal teams should work with finance to confirm an RFP participant can meet obligations, such as the ability to pay. Or if they are asset based, they have the fleet size to support the freight award.”

There is only so much that you can convey in an RFP document.

“I suggest shippers have a conversation where they can convey what’s important in the RFP,” Day says. “That discussion enables two-way dialogue between shipper and carrier, whereas an RFP document by itself can be a one-way communication.

“I would also advise shippers to provide the most accurate, complete data they can, as that facilitates a carrier’s best possible offer,” he adds. “When carriers see information is missing, they may take a conservative approach with what they offer. They may even decline the opportunity.”

Define the scope of services. Shippers should clearly outline the services to be provided and define the roles and responsibilities of all parties, while also establishing measurable performance metrics and service level agreements. The scope of services should also align with the overall goals and objectives of the RFP.

“I’d advise shippers to provide the most accurate, complete data they can during the RFP process, as that facilitates a carrier’s best possible offer.”

—Kevin Day, President of LTL, AFS Logistics

Shippers will want to strike a balance between how much information they provide and request in the RFP process.

“Avoid providing too little information, such as lanes without any volume estimates, but also refrain from overwhelming carriers with excessive details, such as massive amounts of highly granular data on past history and lengthy paragraphs on company vision,” Weaver recommends.

In addition, be careful not to game volume estimates, “where instead of presenting actual low volumes, there is a tendency to round up to one shipment per week or more,” Weaver says.

Accurate lane information and data, and all information that would impact pricing—seasonality, equipment types, special requirements—are among the essential components of an RFP. Shippers and providers should have a clear understanding of the priority between service and cost savings.

Shippers should provide any additional documents related to locations and hours of service, shipping days, and volume estimates.

In addition to providing the basics—such as lanes, routes, and volumes—Langfield adds that shipper/receiver characteristics such as hours, appointments required, driver work needed, scorecards, and payment terms, can all have a large impact on price and attractiveness to a certain carrier.

Langfield recommends shippers incorporate live shipping data to give carriers an idea of the frequency, consistency, and capacity needed when compiling lanes and putting together routes. Not providing an accurate picture of lanes and routes is a common mistake.

“For example, if you bid a lane from Atlanta to Minneapolis year round, and it is 100 loads per year, carriers can presume around two loads per week,” Langfield says. “However, if that volume falls within a three-month period or a seasonal capacity crunch time—for instance a produce time—it can impact not only the service levels that you can get when it comes to acceptance of the loads but also how the carrier rates it.”

Set the terms. Terms, service levels, and performance metrics “should be clearly set and understood by all parties prior to engaging in any pricing exercises,” Burke says. “They should be fair and measurable and have reporting capabilities to share between parties that are consistent across all providers.”

It is essential to be truthful and transparent. “When it comes to setting terms, service levels, and performance metrics, maintain transparency, clarity, and consistency in what is being measured and how it will be assessed,” Weaver says.

“Establish clear processes for handling disagreements or discrepancies in the future,” he recommends. “Finally, follow through on the defined terms and agreements.”

Payment terms, particularly as they relate to late fees, are an especially important element in parcel freight shipping.

“In the past five to six years, carriers have shortened payment terms and the late payment fee is now 8%, up from the 6% it used to be,” McDonagh says. “You might be able to negotiate some savings, but if you’re hit by a late fee because you can’t turn payment around fast enough, that nullifies that benefit. Late fees can kill your negotiated savings.”

Choose a timeline, then evaluate and adapt. A fair bidding process means that carriers have sufficient time to respond to an RFP. Weaver recommends a minimum duration of two weeks.

In addition, limit the number of bidding rounds to no more than two or three. More rounds than that “can be a significant waste of time for all parties involved,” Weaver says.

An efficient analysis and assignment of carriers to lanes ideally would be completed within one month. Delays of four to five months can undermine effectiveness.

A common mistake that shippers make is not providing enough time for carriers to develop a strategy to respond to an RFP. They also sometimes fail to provide between-round feedback with targets.

Shippers should avoid waiting too close to the expiration of a current contract to engage carriers. For parcel shipping, the lead time should be particularly long.

“Especially on the parcel side, if the contract is up in 3-4 weeks, you have to just extend at that point,” McDonagh says. “Parcel agreements are typically three years long, so give yourself plenty of time before the contract expires to negotiate. I’d recommend a ballpark figure of about six months out.”

“That guidance is shorter for LTL though, both in terms of contract length—typically one year long—and lead time—seven to eight weeks prior to expiration,” Day adds.

Defining terms, service levels, and performance metrics is only the beginning.

“You need to periodically evaluate performance against those terms and then define what each party can do to improve,” Day says.

Burke recommends a regular review of terms, scope of services, and performance to ensure they remain relevant and effective. Conditions can change. Burke says shippers should be open to renegotiating terms and conditions depending on changes to the business, market, client or provider needs.

“Transparency and communication go a long way to ensure a successful RFP for all parties involved,” Burke says.

RFPs are not about winning or losing, but about shippers and carriers enjoying a thriving relationship.

“The only way a negotiation works,” Langfield says, “is if both parties come out feeling they won.”

For parcel shipping, the RFP lead time should be particularly long. Parcel agreements are typically three years long, so shippers need to allow plenty of time to negotiate before the contract expires.

Top 5 Mistakes in Transportation RFPs

Shippers can mitigate risk and successfully manage capacity needs by avoiding these common pitfalls.

By Dave Halsema, Principal Owner, DH Logistics Consulting

1. Unclear Carrier Strategy

Instead of sending every lane to bid or rolling every lane over to incumbent carriers, use the 80/20 rule—focus on the 20% of lanes that account for 80% of your volume—to identify the high-priority lanes where additional flexibility will improve cost and service the most.

During the pre-selection process, pinpoint carriers that fit your unique requirements, then use online databases to streamline the manual request-for-information process.

In addition to lane and volume requirements, qualify carriers by considering variables like equipment types, terminal locations, SmartWay certification, load board activity, driver staffing, and more.

2. Limited Carrier Mix

Economies of scale do not apply to transportation, since more volume often does not generate better prices, so shippers tend to see higher-than-market rates if they allocate all their volume to one or two carriers.

Shippers can better manage costs and service levels by diversifying the carrier base. Leveraging several carriers on a lane enables better carrier coverage and network fit, reducing the risk of spot market exposure from routing guide failures.

Clear and concise expectations and feedback between bid rounds are critical to building a reliable and diverse carrier base through the RFP process.

3. Not Focusing on Efficiencies

Many shippers expect carriers to conform to their networks with little success. Instead, try taking a collaborative approach by focusing on economies of scope to align capacity with carrier networks.

Combine lower-volume lanes that have similar origins and/or destinations to create more attractive bid opportunities, such as clustering locations within a 75-mile radius or using three-digit zip code ranges known as key market areas (KMAs).

Carriers benefit from the volume density, which cuts down on ad hoc negotiations.

4. Missing Key Details

Quoting annual volumes in the RFP provides a high-level view of capacity needs, but obscures nuances like volume spikes and seasonality that can wreak havoc on networks.

Shippers can provide clarity and improve bid confidence and accuracy by segmenting lanes and network patterns. This allows carriers to prepare to service lanes ahead of the ebbs and flows in volume, enabling shippers to secure more predictable rates and reliable long-term capacity throughout the duration of the contract.

5. Short-Sighted Evaluation

Simply selecting carriers based on the lowest rates often costs more in the long run. When contract pricing is too low during times of tight capacity, shippers are often forced to turn to budget-busting spot market premiums when they face tender rejections.

Evaluate past, present, and future rates on key lanes to establish realistic budget expectations and secure year-round capacity. Consider other factors such as service levels, lane density, and overall network fit for a comprehensive carrier evaluation.

The post How to Write a Great RFP appeared first on Inbound Logistics.

“Drayage’s impact on the entire lifecycle of a shipment is pivotal,” Ricksecker says. “Any errors or inefficiencies in this phase can have far-reaching consequences throughout the entire supply chain.

“Efficiently and accurately executing drayage is essential for the smooth flow of goods from their arrival at the port to their end destination,” she adds.

Drayage is “the connective tissue between U.S. ports and rail ramps,” notes Peter Weis, chief information officer and senior vice president of supply chain services for Nevada-based ITS Logistics.

“Drayage is a high-risk area because condensed activities happen in congested areas in a short amount of time,” Weis says. “Drayage is the first domino of the supply chain; if it doesn’t go right, it holds up everything down the line.”

As supply chain leaders better understand drayage’s importance, technology providers are developing sophisticated solutions that are transforming the industry’s traditional way of operating. The result is greater efficiency, improved service, and compelling new possibilities on the horizon.

A Fresh Embrace of Technology

An assortment of critical challenges affect the drayage industry, such as capacity constraints, congestion and delays, compliance and regulations, maintenance and repairs, driver shortages, labor disruptions, appointment challenges, asset allocation and utilization, tight timelines, lack of visibility, outdated legacy software, and cost pressures.

“These challenges can impact the efficiency and profitability of drayage operations, making it difficult for carriers to compete in an underserved market,” says Michael Mecca, CEO and founder of PortPro, a Jersey City-based company that provides a drayage transportation management system.

When drayage companies use outdated technology, it can make those challenges that much more difficult.

“Drayage inefficiencies can be particularly challenging due to routing, manual paperwork, and communication issues,” Mecca explains. “These inefficiencies can lead to longer wait times, increased costs, and lower customer satisfaction.”

Before the pandemic-era supply chain disruptions, drayage historically had not seen much innovation. Among the factors holding the industry back was its skepticism of “flashy tech released by pure software providers,” Weis says.

“Drayage is an incredibly complex process, and businesses are hesitant to trust software providers that don’t offer hard-won ground operations experience,” Weis says.

Ricksecker agrees the drayage field has historically been slower to adopt technology than other segments of the supply chain, but the pandemic acted as a catalyst for digitalization across all sectors. The pandemic not only spotlighted drayage’s critical importance but also that it has been underserved by tech advances, leading to growing investor interest.

“This new recognition has resulted in increased investment in technology solutions tailored to the drayage industry,” Ricksecker says, as has the persistence of legacy systems in many ports and logistics entities.

“Outdated systems have become a hindrance as the complexity of supply chain operations has increased,” Ricksecker says. “Drayage companies are increasingly acknowledging the advantages of technology to optimize operations, streamline processes, and maintain competitiveness in the evolving logistics landscape.”

Array of Tech Solutions

As the importance of drayage grows, sophisticated technology solutions are hitting the market and transforming the industry’s traditional way of operating.

A wide variety of tech advancements have led to notable improvements in drayage.

“Technology empowers drayage carriers by providing the tools and capabilities necessary to enhance visibility, streamline operations, optimize planning, and effectively manage various aspects of their business,” Ricksecker says. “These advancements contribute to greater efficiency, cost savings, and improved service quality in the drayage segment of the supply chain.”

Several different types of technology are helping to improve efficiency and streamline operations in the drayage field.

“Transportation management systems and electronic logging devices can help carriers to optimize routes, track shipments in real time, and reduce paperwork,” Mecca says. “Mobile apps and online portals make it easier for customers to track their shipments and communicate with drayage carriers.

“Cutting-edge integrations allow for the real-time bilateral sharing of information so cargo owners can be kept informed on status updates, document sharing, ETAs, and more,” he adds.

GPS elements located within the truck provide “more transparency to the last mile than there was before,” notes Mike Wilson, CEO of Consolidated Chassis Management, a New Jersey-based company that manages chassis on behalf of ocean carriers.

Enabling Transparency

“GPS can also provide data to the operating company to see where they’re being efficient and where they’re being inefficient or where there may be delays or other issues,” Wilson says. “The ability to have onboard monitoring systems, both for the truck and for the trailer, has helped make things safer and more efficient. It also provided more information to the carrier to better serve their clients.”

It’s simple: Customers want to know where their freight is.

“Drayage usually is the most complicated area to track because it works on the highway systems and you never know what’s going to happen,” Wilson says. “Delays, accidents, construction diversions—they all impede a truck’s ability to get to its destination.

“Transparency allows the shipper to see where their freight is, and then plan around that,” he adds. “Transparency is also important in terms of how data is accumulated and used. Transparency isn’t just being able to query a container, chassis, or trailer on the screen and see where it is. Data accumulates over time, and it provides valuable information for analytics down the road.”

Similarly, “automated tracking offers real-time visibility into container locations, minimizing errors,” Ricksecker notes. “Simultaneously, live load tracking with geofencing facilitates better communication and coordination.

“Data-driven algorithms efficiently match imports with carrier empty acceptance,” she says. “This optimization of import loads and carrier empty acceptance, along with streamlined street-turning of containers, brings mutual benefits to both drayage carriers and customers. These practices result in cost savings by reducing empty container trips and improving asset utilization, leading to competitive rates for customers.

“Moreover, they decrease delays, ensuring prompt container availability and reducing the risk of detention fees,” Ricksecker says.

Artificial intelligence (AI) is leading the tech-based reshaping of the drayage industry.

“AI plays a central role in streamlining operations, predicting congestion, optimizing traffic flow, analyzing sensor data for maintenance predictions, and improving route optimization, resource allocation, and the overall customer experience,” Ricksecker says. “AI-driven software algorithms are revolutionizing load rate determination in drayage, reducing costs, and establishing more competitive drayage rates.”

ITS Logistics developed ContainerAI during the recent disruptive years. The solution uses AI to aggregate critical data points into a cloud-based platform with rail data, trucking milestones, ocean voyages, and port charges, among other information.

“AI allows us to sift through the available data to find the most trustworthy points, giving our customers intelligent conclusions,” Weis says.

The Rise of AI

“AI will become more relevant, with predictive and generative AI especially moving to the forefront,” Weis says. “Accurate and high-quality data must be the driver behind AI decision-making; otherwise, bad input equals bad output. Once the quality of data and business rules are defined, routine business decisions can be made autonomously.

“But that’s not to say that people and relationships won’t play a part,” Weiss adds. “The way forward is developing technology to improve relationships and empower people to their highest use.”

The possibilities of AI will only grow with time—and more data and users.

“Over time, as this data accumulates and we see increasingly more people comfortable with utilizing AI, these programs will be able to help companies be more efficient and drive out inefficiency—empty miles or equipment maintenance, for example—from the network that the drivers are operating,” Wilson says. “That will continue to evolve. We’re just at the beginning.”

Looking Ahead

Going forward, technology and innovation can help drayage operators transform their businesses and better navigate challenges facing the industry.

Through that effort, they can become better partners to other stakeholders in the supply chain, particularly as drayage firms progress from manual operations to using tech tools to improve decision-making and efficiency.

“Efficiency gains inside their own operations and their ability to run their businesses more effectively allow drayage operators to better serve their customers,” Mecca says.

When a drayage trucking company achieves operational efficiency and gains the capacity to offer comprehensive information and data to its customers, this translates into improved service overall.

And, enhanced operational performance across drayage companies contributes to compounding efficiency gains throughout the entire supply chain.

Technology and innovation are poised to drive a major transformation of the drayage field in the years ahead.

Revolutionary Changes

“The traditional methods of conducting drayage operations, which may have relied on manual processes and outdated systems, will increasingly be seen as slow, resource-intensive, and costly,” Ricksecker says.

“This transformation will affect various facets of drayage—including booking, scheduling, tracking, and reporting—with the goal of streamlining operations and enhancing customer service,” she says.

“Over the next five years,” Ricksecker adds, “the drayage field can expect revolutionary changes that leverage technology to improve efficiency, sustainability, and customer experiences, ultimately reshaping the way goods move from point A to point B.”

Tech Shows Chassis Some Love, Too

For drayage operators, the availability and reliability of chassis is essential to success. Delays and interruptions in chassis supply can undermine the broader supply chain, and a chassis shortage added to the congestion issues that arose at some ports during the pandemic.

Effective and efficient chassis supply is as important to drayage as effective and efficient tractor supply, notes Mike Wilson, CEO of Consolidated Chassis Management (CCM).

Aiming to improve efficiency in chassis supply with the aid of its CIT fleet management technology, CCM launched SACP 3.0 in 2023.

Here’s how it works. Previously, various leasing companies put chassis in a chassis pool in the region, and CCM managed those chassis for those providers. That system, however, encountered persistent challenges keeping enough chassis in the pool and assuring their quality.

Under SACP 3.0, CCM has become the provider of the chassis, and can now offer “total asset control” under a single-provider utility model that is a public-private partnership with the Georgia Ports Authority, the Jacksonville Port Authority, the North Carolina State Ports Authority, and the Ocean Carriers Equipment Management Association. Truckers can reserve chassis over a network of locations using an online portal.

The system will lead to fewer motor carriers waiting in line in and out of terminals and an overall more efficient and reliable approach for drayage, Wilson says.

“Our program is to assure that we have enough chassis in the fleet to accommodate cargo demands, as well as to ensure that the asset itself is of high quality,” he says. “This way, when a motor carrier picks up a chassis or uses one of our chassis, it is reliable, and they don’t break down on the road, causing them to be delayed and incur lost time.”

In addition, chassis are growing more technologically advanced. Chassis innovations over the years have bolstered safety, with advancements such as hub-piloted wheels, anti-lock brakes, LED lights, radial tires, brake systems that keep the brakes cooler, and improved visibility.

“We have equipped the chassis with electronics to be able to plug and play for GPS and telematics,” Wilson adds. “You won’t see them on every chassis tomorrow, but over time, these telematics, which are essentially sensors in different operating components in the chassis, will be common.”

Chassis are evolving, just as much as tractors, trains, ships, and warehouse systems. “Chassis are keeping up with the technological evolution that we’re seeing in the transportation industry,” Wilson says.

The post Technology Brings A New Dawn for Drayage appeared first on Inbound Logistics.