John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
More than 1 billion RFID tags were sold worldwide in 2006, according to research firm IDTechEx. That might sound like a lot, but it's left some analysts disappointed. Their original projections had called for much higher sales volumes.
So what went wrong? Part of the explanation lies in slower- than-expected growth in sales of tags used to identify cases and pallets during shipping. Only 200 million RFID tags were sold for use in case- and pallet-tagging applications last year—about one-third of the original target of 600 million.
Despite mandates by retailers in the United States, consumer goods companies have been slow to expand their use of RFID beyond the minimum required to comply with those mandates.Many are still struggling to figure out how to capitalize on their RFID investments and seem disinclined to sink more money into the technology. IDTechEx estimates that Wal-Mart's mandated suppliers purchased just a few hundred tags apiece on average last year.
That may be about to change. IDTechEx predicts that sales of RFID tags will see significant growth in 2007, reaching 1.71 billion by the end of the year. The research firm estimates that about 420 million of those tags will be sold for use in case- and pallet-tagging applications worldwide— more than double the number sold in 2006. Looking further out, the company says it expects to see sales of tags used for case and pallet tagging skyrocket sometime next year, reaching 1 billion tags per year by 2009. Even so, RFID tags won't be ubiquitous anytime soon. The day when tags are attached to all of the estimated 35 billion pallets and cases shipped worldwide still looks to be a decade off.
Michael Liard, an RFID market analyst with ABI Research, says that RFID solutions providers and integrators will be a driving force in the exploding market for tags as well as other products used in RFID-enabled applications. As an example, Liard points to Xterprise Inc.'s recent order for 4.5 million RFID tags to support its solution deployment for iGPS, which manages the largest pool of RFID-enabled reusable plastic shipping pallets in North America.
"There currently is a major lack of recognition of the important role played by the solutions providers," says Liard. "However, that will change as more market demand is attributed to the efforts of solution providers who are market makers."
With the order for 4.5 million tags, Xterprise CEO Dean Frew estimates that his firm's projected annualized RFID tag shipments will be over 10 million this year. The recent order is being filled by Alien,Avery-Dennison and Zebra. Raghu Das, founder of IDTechEx, expects that item-level tagging will continue to gather steam this year as retail and pharmaceutical customers adopt the technology. Pfizer itself used about 5 million tags last year to tag shipments of Viagra and could easily double that amount in 2007, when it starts tagging cases and pallets of over-the- counter pain reliever Celebrex. The company expects the first RFID-tagged cases and pallets of Celebrex to roll off the line by the fourth quarter of this year. Tagged product could work its way to wholesalers and pharmacies by the end of the year or early in 2008.
On the retail side, U.K.-based retailer Marks & Spencer is on schedule to expand its item-level RFID tagging effort from 42 stores to over 100 stores this spring. The retailer's goal is to eventually tag all 350 million items of apparel it sells each year.
RFID gets a thumbs-up in Moscow
Moscow is about to become a big user of RFID tags. The city's Metro transportation system is phasing out its magnetic swipe payment cards in favor of an RFID-based ticketing system. UPM Raflatac, a manufacturer of RFID tags and inlays, has been selected to supply RFID inlays for the contactless passenger tickets.
Initially, the company will supply about 5 million units a month for the Moscow Metro. However, by the fall, demand will increase to about 30 million inlays per month. That demand could be fulfilled by multiple suppliers. The Moscow Metro is one of the world's busiest systems, carrying 8.2 million passengers on a normal weekday.
For seasonal tickets, the Moscow Metro is already using contactless RFID smart cards, which allow significantly faster entry for passengers. The Moscow Metro, which implemented smart cards together with a new type of magnetic card in 1998, was the first metro system in Europe to use smart cards.
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
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.
Two European companies are among the most recent firms to put autonomous last-mile delivery to the test with a project in Bern, Switzerland, that debuted this month.
Swiss transportation and logistics company Planzer has teamed up with fellow Swiss firm Loxo, which develops autonomous driving software solutions, for a two-year pilot project in which a Loxo-equipped, Planzer parcel delivery van will handle last-mile logistics in Bern’s city center.
The project coincides with Swiss regulations on autonomous driving that are expected to take effect next spring.
Referred to as “Planzer–Dynamic Micro-Hub w LOXO,” the project aims to address both sustainability issues and traffic congestion in urban areas.
The delivery vehicle, a Volkswagen ID. Buzz battery-electric minivan, will feature Loxo’s Level 4 Digital Driver navigation software, a highly automated solution that allows driverless operation. The van was retrofitted to include space for two swap boxes for parcel storage.
During the two-year pilot phase, Loxo’s Digital Driver will navigate a commercial vehicle several times a day from Planzer’s railway center to various logistics points in Bern's city center. There, the parcels will be reloaded onto small electric vehicles and delivered to end customers by Planzer’s parcel delivery staff.
Following the completion of the pilot phase, Planzer and Loxo will build on the program for rollout in other Swiss cities, the companies said.
The partners said the project addresses the increasing requirements of urban supply chains and aims to ensure the “scalability of their disruptive solution.” With largely emission-free delivery, it contributes to greater levels of sustainability for the city as a living space, they also said.
“The uniqueness of this project lies in the fact that it will have a direct impact on society,” Planzer’s CEO and Chairman Nils Planzer said in a statement announcing the project. “We didn't just want to integrate automated technology into existing systems, we wanted to develop a completely new concept and a new business model.”
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.