Even though logistics is essentially the engine that drives the economy, and even though the business of logistics represents a bigger chunk of the United States' gross domestic product than, say, the construction trade, it remains under the radar.When things go smoothly, no one even notices. But it's a very different story when things go wrong.
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
You've no doubt been there. you're out at a neighborhood cocktail party, a family gathering or one of the kids' soccer games. The conversation turns to what you do for a living. When you mention "business logistics," you're greeted with a blank stare accompanied by a comment on the order of: "Oh. Geez. That sounds kinda dry."
Let's face it, it's not a terribly visible profession in which we toil. But that doesn't diminish its importance. Whenever I'm asked to explain what DC VELOCITY's readers do, I answer: "They're the folks who are essentially responsible for making sure everything in the world gets to wherever it's supposed to be when it's supposed to be there."
An overstatement? Maybe. Does it get the point across? I think so.
Unfortunately, even though logistics is essentially the engine that drives the economy, and even though the business of logistics represents a bigger chunk of the United States' gross domestic product than, say, the construction trade, it remains under the radar.When things go smoothly when goods and materials get where they're supposed to be at the right time no one even notices.
But it's a very different story when things go wrong. Then, it seems, everyone notices. The 2005 hurricane season in the Atlantic certainly brought that fact to the fore.While the politicians continue to quibble about what went wrong and who's to blame, it's important to point out that no one should have been shocked by the destruction along the Gulf Coast from the likes of Katrina, Rita and Wilma. If you didn't realize something like this could happen, you haven't been paying attention.
All the signs were there. To begin with, we've built cities in spots that were never really suitable for long-term human habitation. (Let's not forget, for example, that New Orleans lies well below sea level.) We've permitted dense development along the shores, destroying along the way the barrier islands and marshlands that would ordinarily provide some protection from Mother Nature's fury. Should we really be surprised that all those beaches eroded and so many waterfront buildings surrendered to the surf?
We had ample warning, too. A report issued by the Office of Homeland Security a full eight months before Katrina slammed into the Gulf Coast pointed out in detail how ill-prepared we were for sudden large-scale disaster. And was it really that sudden? Today's forecasting technology gives us a week or more to prepare for big storms. Still, things went wrong.
Given all the hurricanes, earthquakes and tsunamis that have grabbed the headlines in the past year, it's probably no surprise that companies are now pondering the problem of how to shore up their supply chains to make sure that in a crisis, their integrity isn't breeched like a New Orleans levee. In the October issue of DC VELOCITY, we published a three-part report on the fragility of the nation's transportation infrastructure and how proper planning can soften the blow when disaster strikes. Deeper in that same issue (the one with Katrina on the cover, of course), we also published a review of a fascinating new book by Yossi Sheffi, professor of engineering systems at the Massachusetts Institute of Technology and head of that institution's Center for Transportation and Logistics.
In the work, The Resilient Enterprise, Sheffi points out that disruption to your company's supply chain whether the result of war, terrorism, accidents or acts of nature is inevitable. It's only a matter of where and when. Though some might argue that it's impossible to plan for the unforeseen, Sheffi disagrees.
Drawing on years of research and experience, Sheffi makes a strong case for taking the time to assess the impact a disaster might have on your operation and then looking at ways to minimize disruption. The key to success, he says, is building a high degree of flexibility into your operation so you can make it more resilient.
It's advice worth heeding. Although we all like praise for our efforts, a smooth-running logistics operation often goes largely unnoticed. And when someone does notice, you certainly don't want it to be because you failed to respond effectively when all hell broke loose!
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.