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Logistics service providers looking to cut emissions from their transportation operations have largely focused on the switch from internal combustion engines to battery electric vehicles (BEVs). But some proponents say that hydrogen fuel cells are a better way to generate the electricity required to reach that goal. A new demonstration project now underway is designed to prove their point.
The FCEV began real-world testing on routes in the San Francisco Bay Area in August. Over the next few months, the truck will head down to the Los Angeles area before making its way to northern California and then to western Canada.
Those tests follow similar demos in Australia as well as a July trial of Hyzon’s Class 8 FCEV tractor-trailer with some of its North American fleet customers, which include waste haulers. According to Hyzon, those tests showed that hydrogen fuel-cell technology is a viable replacement for heavy-duty diesel engines and can overcome some of the inherent challenges associated with other zero-emission technologies, such as fluctuations in operating temperatures, payload limitations, and short ranges (the company says its hydrogen fuel cells provide the refuse-collection trucks with reliable power for up to 125 miles).
Global supply chains have long had to weather disruptions triggered by sudden spikes in demand. Holiday gift shopping, big price discounts, and stocking up before major storms are just a few reasons for jumps in consumption. Now there’s another variable to consider: Taylor Swift.
Devoted fans of the pop megastar often wear outfits reflecting Swift’s own costumes or references to her songs when they attend concerts. Her influence is so notable that, according to London-based Dalston Mill Fabrics, the singer’s lyrics appear to drive spikes in demand for certain styles and fabrics.
Songs on Swift’s most recent album, The Tortured Poets Department, mention several types of clothing and have boosted fans’ interest in similar items. For instance, as any Swiftie knows, miniskirts have always been a signature piece in Taylor’s wardrobe. But this summer, they jumped in importance thanks to a reference in her song “imgonnagetyouback,” which begins with the words “Lilac short skirt, the one that fits me like skin.” The singer wore a lilac skirt in a video for the song, increasing the hype. Since the video was released, worldwide internet searches for “lilac skirt” have skyrocketed by 992%, reaching a peak in July, Dalston Mill said, citing data from Google Trends. The fabric purveyor reports similar search trends for black dresses, lace tops, and dresses with buttons, all of which are mentioned on the album.
“The recent release of The Tortured Poets Department has solidified Taylor Swift’s reputation as a fashion icon,” a Dalston Mill spokesperson said in a release. “These search spikes also demonstrate Taylor Swift’s position as a global trendsetter. Her influence is indisputable, and it will be great to see Swifties debuting some of these outfit trends at the upcoming Eras Tour shows.”
Which prompts a burning question for supply chain professionals: Should demand planners in the apparel industry consider Taylor Swift albums as leading indicators in their forecasts?
The announcement from the electric vehicle (EV) charging company contained a really big number: 1 million. That’s the number of places in North America and Europe where drivers can go to charge up their cars, according to ChargePoint, a California company that provides a list of those charging stations on its smartphone app. And it’s important because the lack of a robust charging network has been one of the main obstacles to the mass transition from fossil fuel to battery power.
But the number also made me wonder, How does that stack up against the number of service stations where drivers can pump gas or diesel? And since charging an electric car takes longer than filling a tank, does the EV industry need more plugs than pumps anyway?
The rough answers to those questions were easy to find—the American Petroleum Institute says there are more than 145,000 traditional fueling stations across the U.S., and Statista puts the number in Europe at around 135,719—but those numbers only raised more questions for me. For example, each filling station typically has between four and eight pumps, so shouldn’t we multiply the number of stations by the number of hoses at each one? As it turns out, ChargePoint’s number is the total amount of ports—or plugs—not the number of locations. So I was trying to compare apples to oranges.
Don’t get me wrong—providing drivers with a list of a million charging stations is an awesome achievement—but the number also demonstrates the difficulty of comparing electric and fossil fuel infrastructures.
Here’s an example: We recently learned about a $3 billion EV battery factory being planned as a joint venture by the automotive giants Cummins, Daimler, and Paccar. Intended to ensure a U.S.-based supply of commercial and industrial batteries, the plant will be a 21-gigawatt hour (GWh) factory. I’m not an engineer, just a humble reporter, so that number meant precisely nothing to me. And when I tried to figure out how that would stack up by more conventional measures of production capacity, I ran up against the vagaries of “green math.”
First, a little background: In transportation terms, gigawatts are like horsepower—a measure of maximum potential output—and so, gigawatt hours are like horsepower multiplied by endurance. But of course, no one drives their car at top horsepower all the time—they’d quickly collect a stack of speeding tickets at the very least. Maybe that’s why legacy automotive plants don’t measure their vehicles’ output in “horsepower hours.”
Further complicating matters, an EV battery is like an internal combustion engine (ICE) and its fuel tank, all wrapped up in one box. Describing the “power” of that box with a single number requires that drivers think about energy in a new way. Here’s the best I could do: That new battery factory would be able to offer a single charge-up to about 48,000 electric Freightliner eCascadia trucks. But that math only works in the absurd scenario where those truckers somehow all come in for a charge on the same day and claim the plant’s entire annual battery output.
It was a similar story when I started looking into the driving ranges of EVs versus their gas-powered counterparts. That seems like a simple concept, but I stumbled over that one too when I learned that my friend’s Ford F-150 Lightning electric pickup truck has an EPA-estimated range of 300 miles. Pretty impressive: That’s more than my Toyota Rav4, which runs about 240 miles on a tank of gas. But wait a minute, that’s not a fair comparison because maybe the Rav4 has a smaller gas tank, so … but hold on, the Lightning doesn’t even have a gas tank! See, I lost my direct comparison again.
Fortunately, the next generation may have this thing figured out. We now have two teenage drivers in the house, and whenever I hand my son the keys to that Toyota, he sets the digital dashboard display to show the car’s estimated remaining mileage. Call me old-fashioned, but all these years, I’ve just been keeping an eye on the analog gas tank needle to see when I needed to fill up. If you change your mode of thinking to watch the number of miles the car can go, not the number of gallons left in the tank, it no longer matters whether you’re burning gasoline or electrons under the hood. Wait a minute, an EV doesn’t actually burn any electrons … oops, I did it again.
Earlier this year, the California Air Resources Board (CARB) adopted new regulations that will eventually ban most forklifts with internal combustion engines from operating in the Golden State. With a few exceptions, companies will have to phase out their carbon-emitting trucks between 2028 and 2037. These regulations are designed to help clear the skies over California, even though lift trucks are responsible for a very small percentage of the state’s air pollution.
CARB has also begun to target drayage trucks that operate in California, with the goal of having only zero-emission models in use by 2035. It has offered incentives, such as grants and access to dedicated lanes at ports, to encourage the shift.
In both of these cases, the technology required for the transition to greener vehicles exists. Sadly, that is not the case with CARB’s proposal to transition the rail industry to clean locomotives. Essentially, CARB wants to do away with diesel engines in favor of electric-powered locomotives—and it wants this transition to happen by 2030.
While I support the overall goal of making transportation greener, there are some major problems with the proposed regulations for railroads. I believe they’re going too far too soon.
The main problem is that the shift will rely on electric technology that is not yet available for train operations. Trains can’t just pull over to a plug to recharge the way battery-operated cars and trucks can. We can’t expect a regulation to drive invention. It doesn’t work that way.
Unlike forklifts and drayage trucks, railroads also cross state lines in their daily operations. It is unreasonable to expect trains to switch locomotives when they enter California. So, in effect, California’s regulations will become the de facto standard for all states nationwide.
However, the biggest problem with these regulations is that they will actually defeat the goal of reducing pollution. Instead, more carbon will be released into the environment as freight is diverted from rail to less-fuel-efficient trucks. A single train can haul the equivalent of 200 truckloads while producing far fewer emissions. And trains don’t add to road congestion—no small consideration for a state notable for its endless traffic jams.
CARB’s regulations will result in more complexity, longer transit times, and higher costs for moving freight. If you agree, contact your senator or representative and lobby for federal intervention before it’s too late.
It wasn’t long ago that the term “microfulfillment center,” or MFC, frequently cropped up in logistics industry conversations. The trend reflected a need for local inventory sources that could fill accelerating demand for last-mile delivery as e-commerce surged during the Covid-19 pandemic, especially in the grocery market.
You hear the term far less frequently today. Demand for MFCs has softened alongside steadying e-grocery sales over the past few years, but experts say the market for microfulfillment remains strong, with emerging opportunities that hold promise for equipment vendors and e-commerce players alike.
“A lot of the growth [in MFCs] pulled forward during the pandemic. Grocers had to service this channel that they hadn’t paid attention to or that was a small portion of their business,” explains Greg Lary, senior sales manager for logistics technology vendor Knapp, which was an early leader in supplying shuttle-based microfulfillment systems to grocers around the world. “Recent data [show that] demand has leveled off. We’re not seeing major spikes like during the pandemic. We expect to see more of a sustained volume [moving forward].”
Indeed, monthly e-grocery sales have softened since the pandemic days, according to data from the Brick Meets Click/Mercatus Grocery Shopping Survey, an independent research project that tracks online grocery trends. Monthly e-grocery sales were $6.5 billion in March of 2020 and hit a peak of $9.3 billion in March of 2021. Monthly sales have declined or been flat since, although they remain well above those 2020 levels—sales fell to $8 billion in March of 2023 and remained there this past March, 23% above where they were at the onset of the pandemic.
“The new behavior of the consumer is becoming more ingrained,” Lary says. “E-grocery is here to stay and should be considered in the growth plans of our grocery customers.”
Lary and others say microfulfillment technology can help companies address those needs in grocery and beyond. They point to growth opportunities across retail, including the pharmacy and even the auto-parts sectors, as the MFC market continues to evolve and businesses seek more efficient ways to serve customers. Here’s a look at some of the latest trends shaping demand for microfulfillment.
THE CASE FOR FLEXIBILITY
An MFC is a small-scale, automated facility used by e-commerce businesses to store inventory closer to the end-consumer, allowing companies to reduce transportation costs and transit times. MFCs often consist of robotic shuttle-based automated storage and retrieval systems (AS/RS) with manual or technology-assisted picking stations, but they can also incorporate other technologies, including autonomous mobile robots (AMRs), as part of a goods-to-person picking system. The key is that the systems are smaller in scale than what you’d find in a typical warehouse or fulfillment center and are often located in dense, urban areas. They can also be built inside larger warehouses or in the backrooms or storage areas of retail outlets.
One of the biggest challenges associated with MFCs is return on investment (ROI), says Matt Kelly, director of business development and strategic partnership at automated warehouse solutions provider Hai Robotics, which offers an autonomous case-handling mobile robot (ACR) solution for microfulfillment. Kelly describes that solution, the company’s HaiPick system, as an ACR-driven AS/RS.
“I think [microfulfillment] went through a lot of hype … and now businesses are figuring out if it’s the right decision, because it’s very expensive,” Kelly says, emphasizing the low per-item cost of most grocery merchandise compared to the high cost of installing microfulfillment equipment and technology, especially the infrastructure required in fixed-automation solutions. “ROI is really the issue.”
In light of that, flexibility has become a key attribute in microfulfillment, according to Lary, of Knapp. Modular systems that can be easily expanded or adjusted are often the best way to ensure customers make the most of their investment, he says.
“One of the biggest challenges [early on] was [the customers’] real estate requirements,” Lary says, explaining that Knapp’s early MFC designs featured a single layout that didn’t always fit the customer’s space. “One of the costliest parts [of a system] are the modifications that have to be made to the real estate. We realized we needed to be more flexible.”
Today, Knapp’s shuttle-based microfulfillment AS/RS can be customized to accommodate those differences and scaled to adjust to changing business demands: Customers can mix and match totes, trays, and cartons of various shapes and sizes; add racks when they need more storage capacity; and add shuttles for higher performance. This enables customers to design a system that fits their space requirements and budget. Oftentimes, they start small and add to the system over time.
“[It’s] less about ‘here’s what we have’ and more about fitting and using the space,” Lary explains, adding that the Knapp system can also incorporate AMRs—a technology that’s gaining traction in microfulfillment primarily because of its flexibility.
Hai Robotics’ ACRs are a case in point: The mobile robots consist of a base with a tower or ladder-like structure attached for transporting multiple containers at a time. The ACRs come in various styles and heights, with some capable of reaching as high as 39 feet. The robots retrieve cases or cartons from storage shelves and deliver them to workstations staffed by humans for picking and packing. The system’s software allows the robots to identify and retrieve specific totes or cartons within a storage system rather than moving an entire rack or shelf—differentiating Hai’s system from similar, shelf-to-person AMR solutions. The system allows more flexibility than fixed-infrastructure automation, Kelly explains, adding that, to date, Hai Robotics has implemented microfulfillment solutions for customers in the grocery, cosmetics, and e-commerce apparel industries around the world.
Matt Inbody, vice president, global execution excellence for supply chain automation specialist Dematic, agrees that the move toward AMRs will be a key trend in microfulfillment moving forward.
“The trend is toward efficient and cost-effective solutions. Lower-investment systems, such as AMR shelf-to-person solutions, are gaining popularity due to their appealing balance of automation and cost,” he says. “While many systems are still in development and refining their models, the future looks bright for these innovative solutions.”
Yet despite that generally rosy outlook, the grocery industry still faces one big barrier to microfulfillment ROI: cold storage. Kelly explains that, for many companies, the automated equipment that is the cornerstone of microfulfillment often stops short at the freezer because of the high cost of robotic solutions capable of working in extreme temperatures.
“It’s super expensive—and there’s not a lot of technology that can [operate] in that environment,” he says. “Freezer equipment for that application is substantially more expensive than having human beings walking around.”
NEW MODELS, NEW MARKETS
In-store fulfillment holds promise for the MFC market, according to Kelly and others, who say that turning retail storage areas into minifulfillment centers answers the call for systems that support both click-and-collect business and last-mile delivery—both of which are here to stay despite a return to in-store shopping post-pandemic.
“There is a lot of discussion around in-store fulfillment, which is a form of microfulfillment,” Kelly explains. “[You can] deploy a standard system that works much like a warehouse, but it’s in the store.”
Lary agrees, noting that much of the traditional microfulfillment market was designed for that purpose, whether it meant building standalone MFCs in dense, urban areas or carving out space for them in stores. E-grocery will continue to drive that trend, but other growth areas include convenience stores, pharmacies, general retail, and industrial parts—including parts used in the automotive and HVAC industries. Hub-and-spoke models—in which retailers use warehouses with larger automated systems to supply orders to stores—remain popular as well.
“We are seeing both of those models being applied—especially in denser, affluent areas,” Lary says.
Inbody, of Dematic, agrees, adding that flexibility and simplicity are key to making microfulfillment work at all levels, in all situations.
“Simple, easy-to-interface automation will drive the future of microfulfillment centers, reducing the need for large, fixed-automation units,” he says. “We anticipate continued growth in urban-based high-density systems, especially in [affluent] areas with a high population density. The evolving landscape of urban and suburban office spaces will also play a crucial role in the real estate aspect of urban fulfillment centers.”
The news that e-commerce microfulfillment specialist Takeoff Technologies filed for Chapter 11 bankruptcy this past spring raised questions about the strength of the microfulfillment market—but at least one of Takeoff’s business partners says the move is not an indicator of the sector’s strength.
Logistics technology vendor Knapp has partnered with Takeoff Technologies on microfulfillment projects since 2017 and extended that partnership as recently as February, adding a modular product portfolio to provide grocery retailers with right-sized automation for high-, mid-, and low-volume facilities. Greg Lary, senior sales manager at Knapp, said the bankruptcy news was a surprise to Knapp and that future projects with Takeoff are on hold, although Knapp continues to service existing projects the companies developed together.
“We were one of the creditors financially impacted. It was a surprise to the organization for sure,” Lary says, adding, “Our relationship is good, [but] we are not actively pursuing more projects through Takeoff while they figure out how and if they go forward.”
At press time, Takeoff was still pursuing the sale of its assets.
“I think the situation is going to raise concern about the condition of microfulfillment in the industry in general, and I think, at a surface level, I can understand why,” Lary adds. “But I don’t think Knapp, as an organization, sees Takeoff’s situation [as a reflection of] e-grocery [demand] or how Knapp plans to invest. We still see the channel as being viable and grocers invested in it; [and] automation is part of it. The vision still makes sense, even though Takeoff has some challenges at the moment.”