Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
The old tune may assert that it's a small world after all, but to assume that makes cross-border trade simple is still a bit of a fantasy. Time differences, language barriers, distance, customs (and Customs) considerations, security, and arcane and ever-changing trade rules make managing international trade far more complex than its domestic counterpart.And that can mean headaches for businesses— particularly as retailers and consumer goods and electronics companies source an evergreater portion of their products from suppliers in Asia or Latin America.
But supply chain managers aren't entirely on their own when it comes to navigating the sometimes treacherous currents of global trade. They can choose from a dazzling array of sophisticated software tools—platforms that provide visibility from the foreign factory through to the local DC, and that can assure compliance with varying and oft-changing trade, security and documentation rules.
What the best of those tools provide, says Beth Enslow, a specialist in international trade research for Aberdeen Group, are three major components. The first is visibility into the flow of goods and the ability to manage that flow. Second is trade compliance—the varied documentation needed to assure that the information flow enhances, rather than impedes, product movement. That includes keeping shippers in the good graces of security agencies, which keep a close watch not only on what's moving, but also who's doing it.
"The third pillar we define as trade finance," she says. "We're finding that most of the data you need for transportation and logistics are the same data that you need to handle financial processes. A central repository of trade data can be used by multiple functions."
Enslow adds that this last capability has captured the attention of senior management."We're seeing CFOs become cheerleaders for these [global trade management systems]," she says."They are seeing financial ... benefits such as better cash flow and better working capital optimization."
Jim Preuninger, CEO of Management Dynamics, a company that provides trade management software, agrees. "That is an emerging trend," he says. "They are always concerned about where the money is." He notes that senior management is paying more attention to international trade finance issues as international trade's share of corporate business grows.
Trade management software's financial management capabilities have come a long way in recent years. Historically, it's been difficult for shippers to obtain a real-time view of the true landed cost of imports—that is, the product cost plus all the associated logistics expenses. But that's starting to change, says Greg Johnsen, a vice president with GT Nexus, another trade management software provider. Johnsen and other trade management software vendors claim that the latest tools go a long way toward overcoming that problem. Johnsen says the very tools that track inventory can, with additional applications, track costs as well. "Precisely because we have an integrated network providing physical visibility, we can get into financial visibility," he says. "It is not a quantum leap."
Expertise on demand
Software tools for managing international trade come in a variety of forms, but what seems to be gaining the most traction with shippers right now is software offered on an on-demand basis. Instead of buying and installing the software, customers "rent" the software, which is hosted and updated by the provider, on a pay-as-you-go basis.
What attracts companies to the on-demand model? To begin with, it minimizes their IT investment. Though the end user's IT team still plays an important role, it does not have to take on the responsibilities (and headaches) of a full- scale integration.
Second, on-demand arrangements can be implemented relatively quickly. Enslow says that a recent Aberdeen study showed that about two- thirds of the respondents using on-demand platforms were able to begin operating on the platform within three months of selecting a vendor, and had a return on the investment within a year. "That's two to four times faster than a traditional application," she says.
In addition, because on-demand vendors are continually expanding their connections with governments, manufacturers and logistics providers, it's a relatively easy matter for a shipper to change suppliers or carriers or to shift sourcing to another nation. These days, shippers are likely to find that about 70 percent of the companies they want to hook up with are already connected with a given provider, says Enslow. And the rates are accelerating.
Enslow believes the on-demand model has much to offer in comparison to installed software. "On-demand is compelling, certainly, for supply chain visibility," she says. "Any time you can leverage an existing system, you reduce the overall project risk."
Further, by signing on with an on-demand service provider, customers get almost instant access to the wide information infrastructure many of those companies have built. "The analogy I like to use is that we're like a power plant that supplies your electricity," says Johnsen of GT Nexus. "It's built—you're just using the electricity."
Trade management provider TradeBeam, for example, supports about 90 percent of international regulations, according to Duncan Jackson, the company's vice president of business development and marketing. Jackson says TradeBeam has 3,000 customers globally and users in more than 100 countries.
For its part, Management Dynamics taps into more than 280 sources of information for 118 countries to keep up with trade and security rules and regulations. "It's almost impossible for one company to do that," says Preuninger. "We have 13,000 users, so we can afford to do it."
One step at a time
It is not plug and trade, however. As eager as customers may be to automate everything at once, it's unlikely that any system—even an on-demand system—could be fully functional in all trade management tasks in three months. They're simply too complex.
A better strategy is set priorities and take it in stages. "You have to have defined the process and take it in incremental steps," Enslow says. "Using on-demand, you can be laser focused on what part of the supply chain you want to deploy to. The worst thing you can do is say 'Track these 12 events, provide these 20 alerts.' It would take too long, and there are too many data quality issues. It would just become noise, and your users wouldn't use it. Start with three or four events and two or three daily reports."
That was the approach taken by fashion retailer and marketer Liz Claiborne. Its import staff worked closely with the retailer's software vendor, TradeBeam, to determine requirements and to implement the tools. (See the accompanying sidebar.) Implementation took place in stages, not all at once. According to the Aberdeen Group's report on the implementation, EDI integration began with the highestvolume products and largest logistics providers, and then others were added. Liz Claiborne continues to expand its use of the system, adding functions like product classification, restricted party screening, calculating dutiable values, and filing customs declarations.
Then the work really starts
But implementation is only a part, and perhaps the easiest part, of the journey to automated trade management. What counts is what happens next. The real power of any such tool comes not from the information it provides, but from how shippers make use of that information.Used properly, visibility into each step of the supply chain can provide end users with a competitive edge—supplying the information they need to lower costs, reduce cycle times and inventory, reduce working capital, and find and eliminate the inevitable snarls in the supply chain. But no software will solve shippers' problems for them.
"Too many companies think of visibility as track and trace and magically lead times and inventory are improved. That's dead wrong," Enslow warns. "The whole key is [understanding] that when you turn the system on, you will get information, but unless you do something, you will not see improvements."
What visibility will provide, she says, is the information needed to diagnose supply chain problems and locate recurring bottlenecks.With that information at hand, managers can take actions to reduce variability in the supply chain. "Once you have confidence in where your inventory is, you can manage in-motion inventory more actively or you can have the confidence in when goods will arrive and use that in safety stock calculations."
Further, the information available through trade management tools can prove very useful for strategic decisionmaking. Jackson cites the experience of one large customer, the automaker Renault, which used the tools to analyze where it should build a new low-cost vehicle for the Egyptian market. The solution—sending semi-assembled vehicles to Morocco for completion in a free trade zone and then shipping to Egypt—took advantage of a free trade agreement between the two countries, substantially reducing Customs costs for Renault.
Preuninger says the process of taking on a trade management system starts with sourcing strategy and builds from there. "It's fairly encompassing," he says. "You work with suppliers to adjust for errors or problems. You can start to implement new strategies, such as DC bypass or in-transit allocation. You get rid of as much paper as you can."
He also urges managers to look at both the tactical and strategic capabilities. "The tactical set of tools gives you supply chain visibility and alerts that give you the ability to understand when a problem occurs or is about to occur well before you might have without a sense-and-response system," he says. "On the strategic level, you can see how your vendors and logistics companies perform, or look at performance by commodity or by trade lanes."
Johnsen adds, "The first thing the importer has to bring to the equation is a real vision of what the supply chain will look like in two years. From there, it is all about execution."
fashioning a solution
Even before Sept. 11, 2001, Liz Claiborne's import staff had its hands full. Part of it was the sheer volume of imports. The fashion retailer imports more than 250 million units (garments, accessories, shoes and so forth) each year, sourced from more than 3,000 factories in 35 countries. Another challenge was its antiquated global trade system—a client/server setup that required time-consuming manual data entry.
Then came the Sept. 11 terrorist attacks and their aftermath. In the months following those attacks, the U.S. Customs Service began to add demands on importers. As those demands escalated, Liz Claiborne's staff found that their manual system was fast becoming untenable. It was time for a change.
The company turned to Beth Enslow, a specialist in international trade research for Aberdeen Group, for help finding a solution. What her client primarily wanted, says Enslow, was visibility and linkage. Its top priority was obtaining better product and shipment visibility from its suppliers and logistics providers. "They wanted automated shipment visibility for all the stakeholders, enabling them to manage uncertainties," she says. The company also wanted to link to its partners electronically to provide instant product classification and other information to brokers and to prepare documentation for Customs.
Once it began reviewing its options, the company quickly narrowed its list to on-demand offerings. Lois Davis, vice president of global logistics for Liz Claiborne, told Aberdeen that choosing an on-demand trade management tool meant that the company wouldn't have to burden its IT staff with a complex installation or upgrades. It would also be able to avoid hardware purchases. In addition, use of an outside provider would allow quick connections to new acquisitions and suppliers.
Eventually, the company selected TradeBeam's on-demand solution. The shift to the new system began in 2001, with the company's import staff working closely with TradeBeam. Implementation took place in stages, not all at once.
Today, Enslow says, Liz Claiborne's staff can monitor and manage products from the supplier's dock to the destination DC. Freight payment and the return of containers are also done through the system. The information available through the system gives the company's DC managers visibility into packing list details, enabling them to plan customer allocations.
One particular advantage is that the staff can make changes on the fly. "Now they can work by exception," Enslow says. "They can do such things as send a container to a different port or transload facility to bypass congestion or accelerate a shipment."
And the results? The company credits the TradeBeam system with enabling it to cut five to seven days from transit times for international shipments, according to an Aberdeen report on the project. It has also accommodated an increase in the number of shipments handled by 50 percent without adding staff. And in the first 18 months alone, it eliminated between seven and 10 days of inventory as a result of the shorter leadtimes and greater certainty of shipment status.
Economic activity in the logistics industry expanded in January, growing at its fastest clip in more than two years, according to the latest Logistics Managers’ Index (LMI) report, released this week.
The LMI jumped nearly five points from December to a reading of 62, reflecting continued steady growth in the U.S. economy along with faster-than-expected inventory growth across the sector as retailers, wholesalers, and manufacturers attempted to manage the uncertainty of tariffs and a changing regulatory environment. The January reading represented the fastest rate of expansion since June 2022, the LMI researchers said.
An LMI reading above 50 indicates growth across warehousing and transportation markets, and a reading below 50 indicates contraction. The LMI has remained in the mid- to high 50s range for most of the past year, indicating moderate, consistent growth in logistics markets.
Inventory levels rose 8.5 points from December, driven by downstream retailers stocking up ahead of the Trump administration’s potential tariffs on imports from Mexico, Canada, and China. Those increases led to higher costs throughout the industry: inventory costs, warehousing prices, and transportation prices all expanded to readings above 70, indicating strong growth. This occurred alongside slowing growth in warehousing and transportation capacity, suggesting that prices are up due to demand rather than other factors, such as inflation, according to the LMI researchers.
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
As commodities go, furniture presents its share of manufacturing and distribution challenges. For one thing, it's bulky. Second, its main components—wood and cloth—are easily damaged in transit. Third, much of it is manufactured overseas, making for some very long supply chains with all the associated risks. And finally, completed pieces can sit on the showroom floor for weeks or months, tying up inventory dollars and valuable retail space.
In other words, the furniture market is ripe for disruption. And John "Jay" Rogers wants to be the catalyst. In 2022, he cofounded a company that takes a whole new approach to furniture manufacturing—one that leverages the power of 3D printing and robotics. Rogers serves as CEO of that company, Haddy, which essentially aims to transform how furniture—and all elements of the "built environment"—are designed, manufactured, distributed, and, ultimately, recycled.
Rogers graduated from Princeton University and went to work for a medical device startup in China before moving to a hedge fund company, where he became a Chartered Financial Analyst (CFA). After that, he joined the U.S. Marine Corps, serving eight years in the infantry. Following two combat tours, he earned an MBA from the Harvard Business School and became a consultant for McKinsey & Co.
During this time, he founded Local Motors, a next-generation vehicle manufacturer that launched the world's first 3D-printed car, the Strati, in 2014. In 2021, he brought the technology to the furniture industry to launch Haddy. The father of four boys, Rogers is also a director of the RBR Foundation, a philanthropic organization focused on education and health care.
Rogers spoke recently with DC Velocity Group Editorial Director David Maloney on an episode of the "Logistics Matters" podcast.
Q: Could you tell us about Haddy and how this unique company came to be?
A: Absolutely. We have believed in the future of distributed digital manufacturing for a long time. The world has gone from being heavily globalized to one where lengthy supply chains are a liability—thanks to factors like the growing risk of terrorist attacks and the threat of tariffs. At the same time, there are more capabilities to produce things locally. Haddy is an outgrowth of those general trends.
Adoption of the technologies used in 3D printing has been decidedly uneven, although we do hear about applications like tissue bioprinting and food printing as well as the printing of trays for dental aligners. At Haddy, we saw an opportunity to take advantage of large-scale structural printing to approach the furniture and furnishings industry. The technology and software that make this possible are already here.
Q: Furniture is a very mature market. Why did you see this as a market that was ripe for disruption?
A:The furniture market has actually been disrupted many times in the last 200 years. The manufacturing of furniture for U.S. consumption originally took place in England. It then moved to Boston and from there to New Amsterdam, the Midwest, and North Carolina. Eventually, it went to Taiwan, then China, and now Vietnam, Indonesia, and Thailand. And each of those moves brought some type of disruption.
Other disruptions have been based on design. You can look at things like the advent of glue-laminated wood with Herman Miller, MillerKnoll, and the Eames [furniture design and manufacturing] movement. And you can look at changes in the way manufacturing is powered—the move from manual operations to machine-driven operations powered by steam and electricity. So the furniture industry has been continuously disrupted, sometimes by labor markets and sometimes by machines and methods.
What's happening now is that we're seeing changes in the way that labor is applied in furniture manufacturing. Furniture has traditionally been put together by human hands. But today, we have an opportunity to reassign those hands to processes that take place around the edges of furniture production. The hands are now directing robotics through programming and design; they're not actually making the furniture.
And so, we see this mature market as being one that's been continuously disrupted during the last 200 years. And this disruption now has a lot to do with changing the way that labor interacts with the making of furniture.
Q: How do your 3D printers actually create the furniture?
A:All 3D printing is not the same. The 3D printers we use are so-called "hybrid" systems. When we say hybrid, what we mean is that they're not just printers—they are holders, printers, polishers, and cutters, and they also do milling and things like that. We measure things and then print things, which is the additive portion. Then we can do subtractive and polishing work—re-measuring, moving, and printing parts again. And so, these hybrid systems are the actual makers of the furniture.
Q: What types of products are you making?
A: We've started with hardline or case goods, as they're sometimes known, for both residential and commercial use—cabinets, wall bookshelves, freestanding bookshelves, tables, rigid chairs, planters, and the like. Basically, we've been concentrating on products that don't have upholstery.
It's not that upholstery isn't necessary in furniture, as it is used in many pieces. But right now, we have found that digital furniture manufacturing becomes analog again when you have to factor in the sewing process. And so, to move quickly and fully leverage the advantages of digital manufacturing, we're sticking to the hardline groups, except for a couple of pieces that we have debuted that have 3D-printed cushions, which are super cool.
Q: Of course, 3D printers create objects in layers. What types of materials are you running through your 3D printers to create this furniture?
A: We use recycled materials, primarily polymer composites—a bio-compostable polymer or a synthetic polymer. We look for either recycled or bio-compostable [materials], which we then reinforce with fibers and fillers, and that's what makes them composites. To create the bio-compostables, we marry them with bio-fibers, such as hemp or bamboo. For synthetic materials, we marry them with things like glass or carbon fibers.
Q: Does producing goods via 3D printing allow you to customize products easily?
A: Absolutely. The real problem in the furniture and furnishings industries is that when you tool up to make something with a jig, a fixture, or a mold, you tend to be less creative because you now feel you have to make and sell a lot of that item to justify the investment.
One of the great promises of 3D printing is that it doesn't have a mold and doesn't require tooling. It exists in the digital realm before it becomes physical, and so customization is part and parcel of the process.
I would also add that people aren't necessarily looking for one-off furniture. Just because we can customize doesn't mean we're telling customers that once we've delivered a product, we break the digital mold, so to speak. We still feel that people like styles and trends created by designers, but the customization really allows enterprise clients—like businesses, retailers, and architects—to think more freely.
Customization is most useful in allowing people to "iterate" quickly. Our designers can do something digitally first without having to build a tool, which frees them to be more creative. Plus, because our material is fully recyclable, if we print something for the first time and find it doesn't work, we can just recycle it. So there's really no penalty for a failed first printing—in fact, those failures bring their own rewards in the form of lessons we can apply in future digital and physical iterations.
Q: You currently produce your furniture in an automated microfactory in Florida, with plans to set up several more. Could you talk a little about what your microfactory looks like and how you distribute the finished goods?
A: Our microfactory is a 30,000-square-foot box that mainly contains the robots that make our furniture along with shipping docks. But we don't intend for our microfactories to be storage warehouses and trans-shipment facilities like the kind you'd typically see in the furniture industry—all of the trappings of a global supply chain. Instead, a microfactory is meant to be a site where you print the product, put it on a dock, and then ship it out. So a microfactory is essentially an enabler of regional manufacturing and distribution.
Q: Do you manufacture your products on a print-to-order basis as opposed to a print-to-stock model?
A: No. We may someday get to the point where we receive an order digitally, print it, and then send it out on a truck the next day. But right now, we aren't set up to do a mini-delivery to one customer out of a microfactory.
We are an enterprise company that partners with architects, designers, builders, and retailers, who then distribute our furnishings to their customers. We are not trying to go direct-to-consumer at this stage. It's not the way a microfactory is set up to distribute goods.
Q: You've mentioned your company's use of recycled materials. Could you talk a little bit about other ways you're looking to reduce waste and help support a circular economy?
A: Yes. Sustainability and a circular economy are really something that you have to plan for. In our case, our plans call for moving toward a distributed digital manufacturing model, where we establish microfactories in various regions around the world to serve customers within a 10-hour driving radius of the factory. That is a pretty large area, so we could cover the United States with just four or five microfactories.
That also means that we can credibly build our recycling network as part of our microfactory setup. As I mentioned, we use recycled polymer stock in our production, so we're keeping that material out of a landfill. And then we tell our enterprise customers that while the furniture they're buying is extremely durable, when they're ready to run a special and offer customers a credit for turning in their used furniture, we'll buy back the material. Buying back that material actually reduces our costs because it's already been composited and created and recaptured. So our microfactory network is well designed for circularity in concert with our enterprise customers.
Generative AI (GenAI) is being deployed by 72% of supply chain organizations, but most are experiencing just middling results for productivity and ROI, according to a survey by Gartner, Inc.
That’s because productivity gains from the use of GenAI for individual, desk-based workers are not translating to greater team-level productivity. Additionally, the deployment of GenAI tools is increasing anxiety among many employees, providing a dampening effect on their productivity, Gartner found.
To solve those problems, chief supply chain officers (CSCOs) deploying GenAI need to shift from a sole focus on efficiency to a strategy that incorporates full organizational productivity. This strategy must better incorporate frontline workers, assuage growing employee anxieties from the use of GenAI tools, and focus on use-cases that promote creativity and innovation, rather than only on saving time.
"Early GenAI deployments within supply chain reveal a productivity paradox," Sam Berndt, Senior Director in Gartner’s Supply Chain practice, said in the report. "While its use has enhanced individual productivity for desk-based roles, these gains are not cascading through the rest of the function and are actually making the overall working environment worse for many employees. CSCOs need to retool their deployment strategies to address these negative outcomes.”
As part of the research, Gartner surveyed 265 global respondents in August 2024 to assess the impact of GenAI in supply chain organizations. In addition to the survey, Gartner conducted 75 qualitative interviews with supply chain leaders to gain deeper insights into the deployment and impact of GenAI on productivity, ROI, and employee experience, focusing on both desk-based and frontline workers.
Gartner’s data showed an increase in productivity from GenAI for desk-based workers, with GenAI tools saving 4.11 hours of time weekly for these employees. The time saved also correlated to increased output and higher quality work. However, these gains decreased when assessing team-level productivity. The amount of time saved declined to 1.5 hours per team member weekly, and there was no correlation to either improved output or higher quality of work.
Additional negative organizational impacts of GenAI deployments include:
Frontline workers have failed to make similar productivity gains as their desk-based counterparts, despite recording a similar amount of time savings from the use of GenAI tools.
Employees report higher levels of anxiety as they are exposed to a growing number of GenAI tools at work, with the average supply chain employee now utilizing 3.6 GenAI tools on average.
Higher anxiety among employees correlates to lower levels of overall productivity.
“In their pursuit of efficiency and time savings, CSCOs may be inadvertently creating a productivity ‘doom loop,’ whereby they continuously pilot new GenAI tools, increasing employee anxiety, which leads to lower levels of productivity,” said Berndt. “Rather than introducing even more GenAI tools into the work environment, CSCOs need to reexamine their overall strategy.”
According to Gartner, three ways to better boost organizational productivity through GenAI are: find creativity-based GenAI use cases to unlock benefits beyond mere time savings; train employees how to make use of the time they are saving from the use GenAI tools; and shift the focus from measuring automation to measuring innovation.
According to Arvato, it made the move in order to better serve the U.S. e-commerce sector, which has experienced high growth rates in recent years and is expected to grow year-on-year by 5% within the next five years.
The two acquisitions follow Arvato’s purchase three months ago of ATC Computer Transport & Logistics, an Irish firm that specializes in high-security transport and technical services in the data center industry. Following the latest deals, Arvato will have a total U.S. network of 16 warehouses with about seven million square feet of space.
Terms of the deal were not disclosed.
Carbel is a Florida-based 3PL with a strong focus on fashion and retail. It offers custom warehousing, distribution, storage, and transportation services, operating out of six facilities in the U.S., with a footprint of 1.6 million square feet of warehouse space in Florida (2), Pennsylvania (2), California, and New York.
Florida-based United Customs Services offers import and export solutions, specializing in remote location filing across the U.S., customs clearance, and trade compliance. CTPAT-certified since 2007, United Customs Services says it is known for simplifying global trade processes that help streamline operations for clients in international markets.
“With deep expertise in retail and apparel logistics services, Carbel and United Customs Services are the perfect partners to strengthen our ability to provide even more tailored solutions to our clients. Our combined knowledge and our joint commitment to excellence will drive our growth within the US and open new opportunities,” Arvato CEO Frank Schirrmeister said in a release.
And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.
One of the biggest targets for innovation spending will artificial intelligence, as supply chain leaders look to use AI to automate time-consuming tasks. The survey showed that 41% are making AI a key part of their innovation strategy, with a third already leveraging it for data visibility, 29% for quality control, and 26% for labor optimization.
Still, lingering concerns around how to effectively and securely implement AI are leading some companies to sidestep the technology altogether. More than a third – 35% – said they’re largely prevented from using AI because of company policy, leaving an opportunity to streamline operations on the table.
“Avoiding AI entirely is no longer an option. Implementing it strategically can give supply chain-focused companies a serious competitive advantage,” Kristi Montgomery, Vice President, Innovation, Research & Development at Kenco, said in a release. “Now’s the time for organizations to explore and experiment with the tech, especially for automating data-heavy operations such as demand planning, shipping, and receiving to optimize your operations and unlock true efficiency.”
Among the survey’s other top findings:
there was essentially three-way tie for which physical automation tools professionals are looking to adopt in the coming year: robotics (43%), sensors and automatic identification (40%), and 3D printing (40%).
professionals tend to select a proven developer for providing supply chain innovation, but many also pick start-ups. Forty-five percent said they work with a mix of new and established developers, compared to 39% who work with established technologies only.
there’s room to grow in partnering with 3PLs for innovation: only 13% said their 3PL identified a need for innovation, and just 8% partnered with a 3PL to bring a technology to life.