David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
When it's time to charge up their forklifts at the end of a shift, most drivers either line up at a battery-changing room or head for a fastcharging station. But not the drivers at East Penn Manufacturing Co.'s Topton, Pa., distribution facility. There, lift-truck operators maneuver their vehicles into a small drive-in refueling room attached to the building. Once inside, the driver dismounts and closes the door. He removes a hose from a wallmounted dispenser, inserts it into the tank onboard the lift truck, and turns a dial on the dispenser. In less than one minute, the tank is filled and the truck is ready for another full shift, using power supplied by hydrogen fuel cells.
While the rest of the world awaits the day when hydrogen-powered cars speed silently along the nation's highways, a revolution is already quietly under way in North America's DCs. For several years now, fuel cell-powered lift trucks have been gliding around manufacturing and distribution facilities run by some of the world's best-known companies. Wal-Mart has conducted fuel cell forklift trials, as have Raymond Corp. and East Penn. At least one tester, GM Canada, is about to embark on its second pilot.
Industrial edge
Although they're still considered an experimental technology, hydrogen fuel cells are not really new. "It's a technology that's been around since 1839," says Bruce Townson, director of business development for Hydrogenics, a Canadian-based developer of fuel cells. "Not much was done with the technology, however, until the Apollo space missions. Then in the late 1980s and early 1990s, developers began looking at it for powering vehicles."
At first, developers set their sights on the markets with the biggest potential payoff: cars and trucks. But as difficulties emerged with establishing a fueling-station infrastructure, many shifted their attention to industrial markets. Compared to the automobile market, the industrial truck sector has at least one overwhelming advantage: It doesn't require a network of public fueling stations. Lift trucks typically operate within the confines of a DC, which enables easy and centralized refueling.
harnessing hydrogen's power
How do you use hydrogen to power a lift truck? One way is to place a fuel cell power pack where a battery would normally fit and connect it to the truck using the same terminals a battery would use. The power pack consists of a tank to store the hydrogen once it's dispensed into the vehicle, a stack of fuel cells to create electricity, and a power storage device, such as a battery. The fuel tank holds about 1.8 kilograms of hydrogen, which is enough to power the truck throughout a shift.
The fuel cell stack consists of layered combinations of bipolar plates and membrane electrode assemblies coated with a catalyst such as platinum. The stacks allow hydrogen to combine with oxygen from the air to create a chemical reaction, splitting the electrons and protons of the hydrogen. In simple terms, the result of the chemical reaction is an approximately 50/50 release of energy and heat. The energy is converted to electricity to power the vehicle. Additional energy is stored in a small battery that provides power when needed for peak loads and captures regenerative power from braking. The heat is dispersed using a cooling fan.
A single cell can only produce about 0.7 volts of electricity, which means it takes a significant number of cells stacked end to end (as with flashlight batteries) to power a conventional 36- or 48-volt lift truck. The size of the stack varies according to the truck's voltage requirements.
Developers have found a receptive audience among lift-truck users. Part of the appeal, of course, is fuel cells' reputation for cleanliness (the only byproducts are water and heat). But fuel cells also hold other attractions for lift-truck users—consistent power delivery, shorter fueling times, and reduced maintenance, among them.
East Penn was one of the companies eager to start testing the technology. It might seem odd that East Penn, which manufactures the well-known Deka brand battery along with a variety of battery accessories, would be among those in the forefront of fuel cell testing. But the company doesn't view hydrogen as a threat to its business. "We want customers to be able to pick the right solution out of our bag," says Jim Rubright, East Penn's vice president of motive power sales. "We don't see hydrogen replacing battery use in facilities as much as we see it complementing them."
East Penn began experimenting with hydrogen about a year ago. In conjunction with its partner, Nuvera, a Cambridge, Mass.-based fuel cell manufacturer, the company outfitted 10 lift trucks at the Topton facility with hydrogen fuel cells. The company also installed a storage tank and compressor outside the building, and built a small drive-in refueling room attached to a door of the DC to house the dispenser unit. The decision to locate the dispenser in a separate room that's merely attached to the main building allowed East Penn to get the system up and running quickly and meet fire code requirements.
Rubright says East Penn's experiments have yielded impressive results. To begin with, the fuel cells have led to significant reductions in refueling times. Replacing the hydrogen takes less than a minute, while the entire process of moving into and out of the dispensing area takes less than five minutes. The DC is saving on space as well. "The space needed for the actual dispensing unit is about 2 percent of that required for a changing room," he reports.
On top of that, there are the benefits of consistent power delivery, which drivers consider a big plus. "Our operators have also been pleased, as they do not experience the voltage lag that batteries have when they begin to wear down," says Rubright.
Take two!
Testers at GM Canada's plant in Oshawa, Ontario, have reported similar results. GM Canada began experimenting with hydrogen fuel cells in 2004, when it placed hydrogen units into two lift trucks at the Oshawa plant, where Chevrolets, Buicks, and Pontiacs are assembled. Workers at the facility immediately noticed that with fuel cells, there was no drop-off in power, reports Brad Cochrane, GM Canada's facilities area manager. "It really takes variation out of the system. We achieved consistent productivity throughout the workday."
The success of that test has led GM to conduct an even larger trial, which is set to begin during the third quarter of this year. In the upcoming test, which will also be conducted at the Oshawa plant, GM will use hydrogen fuel cells from Hydrogenics to power 19 Hyster counterbalanced lift trucks that are used to deliver incoming parts to assembly stations. While GM produced and stored the hydrogen needed for its first trial on site, company officials say GM has yet to work out the details for the testing's second phase.
GM hopes to use what it learns from the upcoming trial in its ongoing research into ways to use hydrogen to power the passenger cars produced at the plant. "In general, GM as a company wants to explore all of the green technologies available," says Cochrane. "This project is just one piece of the knowledge base that will be needed for hydrogen fuel cells to break through as a mainstream energy technology."
Labor-saving device?
Certainly, hydrogen's reputation as a "green" alternative will be one of its biggest selling points. Hydrogen burns much cleaner than internal combustion systems, making it an attractive option for companies seeking to cultivate an ecofriendly image.
But there's no denying that the other kind of green—the greenbacks companies invest in their vehicles—will play a role in their decisions as well. "There are environmental benefits to hydrogen fuel cells, but it clearly will come down to what makes economic sense," notes Steve Medwin, manager of advanced research for lift-truck manufacturer Raymond Corp.
When it comes to hydrogen, cost can be a showstopper. Although the cost of outfitting a vehicle with a fuel cell power pack is about half what it was two years ago, it still comes to about $40,000 per truck, or about 10 times the price of a conventional lead acid battery. On top of that, there's the expense of equipping a building with a hydrogen storage tank, compressor, and dispensing system, which together total another $100,000 or more.
Although the technology may never be affordable for one- and two-shift operations, fuel-cell proponents argue that high-volume facilities—like the Oshawa plant, which operates 24 hours a day, five days a week—can expect to save money. "The busier the warehouse, the more likely the economic profile for hydrogen fits," says Rubright of East Penn."Hydrogen equipment is not cheaper, but the benefits come in productivity and saving labor."
Medwin of Raymond agrees. "The way you justify hydrogen is on productivity," he says.Medwin explains that since a hydrogen cell can be refueled in less than five minutes, it saves a great deal of time compared to battery changing. "Twenty minutes per shift per vehicle to exchange a battery is a lot of lost productivity," he says. "They are not moving goods while they are changing batteries."
Do the math
But others say the economics just aren't there right now. "Any customer looking to improve operations and productivity needs to do the math," cautions Steven Gitlin, director of marketing strategy for AeroVironment, the maker of PosiCharge battery charging systems and other power technologies. "Given the nature of the costs and alternatives available, there are more beneficial solutions already out there."
Gitlin explains that aside from the costs of the fuel cell packages and infrastructure, there are basic limitations on how inexpensively hydrogen fuel can be created and a system operated. When you add up all the expenses, it currently costs four to five times more to operate a hydrogen system in a vehicle than it does to recharge lead acid batteries in the same vehicle, he says. Eventually, that may drop to about half, but the costs will still be considerable, he adds. "Your hydrogen bill will still be about 2.5 times more than your electric bill. Two-and-a-half times is just a fundamental limitation of fuel cells based on how practical you can make those conversions."
"It will be hard to switch from what works today," adds Cesar Jiminez of Toyota Lift Trucks. "It is definitely difficult to justify the investment costs. Just the infrastructure costs alone are astronomical."
Yet those costs haven't stopped Toyota—or Raymond, for that matter—from developing experimental trucks using hydrogen. In fact, both foresee a day when lift trucks will be built around a hydrogen power system, in contrast to the current hybrid system, which simply replaces a battery with a hydrogen fuel pack.
Many observers also believe that costs will drop as the technology advances and adoption becomes more widespread. Think of it this way, says East Penn's Rubright: "What did you pay for your last VCR as opposed to your first?"
hydrogen inside!
Hydrogen may be the most common element in the universe, but fuel cell users still need to find a way to "harvest" that hydrogen and store it.
Right now, companies have two choices for obtaining hydrogen: They can contract with a commercial supplier or they can manufacture their own on site. For most companies, the decision is dictated by economics—the local cost of the natural gas and/or electricity required to manufacture hydrogen vs. the cost of having it delivered from the nearest production plant. Hydrogen typically runs about $10 to $12 per kilogram, though some high-volume purchasers may be able to find hydrogen for as little as $5 per kilogram.
Commercial suppliers deliver hydrogen in one of two ways. They either bring it in via tanker truck and transfer it to an on-site storage tank, or they deliver a tube trailer consisting of several long tubes filled with hydrogen in gaseous form. In the latter case, the driver simply unhooks the tube trailer from the tractor and leaves it at the customer's site, where it can be connected directly to the facility's system. When the trailer is empty, the supplier delivers another full tube trailer and takes back the empty unit.
Companies that decide to make their own hydrogen will need conversion equipment that operates on either natural gas or electricity. The converter removes hydrogen from the air for processing in a gaseous form.
Whether it's made on site or delivered, the hydrogen must be compressed to 5,000 to 7,000 pounds per square inch before it can be used. The fuel passes through a compressor that assures that the gas can be dispensed into the tank properly while occupying as little cubic volume as possible once delivered to the vehicle.
Most facilities use a small storage tank to hold the compressed hydrogen. The dispensing station then draws the hydrogen directly from the tank. The dispensing station is normally located inside the facility and, similar to a gasoline pump, consists of a rectangular regulator box mounted to a wall. A hose protrudes from the box for dispensing the hydrogen gas into the vehicle. As a safety precaution, companies usually position hydrogen sensors in the dispensing area to monitor for leaks.
In many municipalities, fire and safety codes for hydrogen use and storage have yet to be written. Nonetheless, companies contemplating the use of hydrogen fuel are advised to check with their local authorities as early in the planning stages as possible.
Most of the apparel sold in North America is manufactured in Asia, meaning the finished goods travel long distances to reach end markets, with all the associated greenhouse gas emissions. On top of that, apparel manufacturing itself requires a significant amount of energy, water, and raw materials like cotton. Overall, the production of apparel is responsible for about 2% of the world’s total greenhouse gas emissions, according to a report titled
Taking Stock of Progress Against the Roadmap to Net Zeroby the Apparel Impact Institute. Founded in 2017, the Apparel Impact Institute is an organization dedicated to identifying, funding, and then scaling solutions aimed at reducing the carbon emissions and other environmental impacts of the apparel and textile industries.
The author of this annual study is researcher and consultant Michael Sadowski. He wrote the first report in 2021 as well as the latest edition, which was released earlier this year. Sadowski, who is also executive director of the environmental nonprofit
The Circulate Initiative, recently joined DC Velocity Group Editorial Director David Maloney on an episode of the “Logistics Matters” podcast to discuss the key findings of the research, what companies are doing to reduce emissions, and the progress they’ve made since the first report was issued.
A: While companies in the apparel industry can set their own sustainability targets, we realized there was a need to give them a blueprint for actually reducing emissions. And so, we produced the first report back in 2021, where we laid out the emissions from the sector, based on the best estimates [we could make using] data from various sources. It gives companies and the sector a blueprint for what we collectively need to do to drive toward the ambitious reduction [target] of staying within a 1.5 degrees Celsius pathway. That was the first report, and then we committed to refresh the analysis on an annual basis. The second report was published last year, and the third report came out in May of this year.
Q: What were some of the key findings of your research?
A: We found that about half of the emissions in the sector come from Tier Two, which is essentially textile production. That includes the knitting, weaving, dyeing, and finishing of fabric, which together account for over half of the total emissions. That was a really important finding, and it allows us to focus our attention on the interventions that can drive those emissions down.
Raw material production accounts for another quarter of emissions. That includes cotton farming, extracting gas and oil from the ground to make synthetics, and things like that. So we now have a really keen understanding of the source of our industry’s emissions.
Q: Your report mentions that the apparel industry is responsible for about 2% of global emissions. Is that an accurate statistic?
A: That’s our best estimate of the total emissions [generated by] the apparel sector. Some other reports on the industry have apparel at up to 8% of global emissions. And there is a commonly misquoted number in the media that it’s 10%. From my perspective, I think the best estimate is somewhere under 2%.
We know that globally, humankind needs to reduce emissions by roughly half by 2030 and reach net zero by 2050 to hit international goals. [Reaching that target will require the involvement of] every facet of the global economy and every aspect of the apparel sector—transportation, material production, manufacturing, cotton farming. Through our work and that of others, I think the apparel sector understands what has to happen. We have highlighted examples of how companies are taking action to reduce emissions in the roadmap reports.
Q: What are some of those actions the industry can take to reduce emissions?
A: I think one of the positive developments since we wrote the first report is that we’re seeing companies really focus on the most impactful areas. We see companies diving deep on thermal energy, for example. With respect to Tier Two, we [focus] a lot of attention on things like ocean freight versus air. There’s a rule of thumb I’ve heard that indicates air freight is about 10 times the cost [of ocean] and also produces 10 times more greenhouse gas emissions.
There is money available to invest in sustainability efforts. It’s really exciting to see the funding that’s coming through for AI [artificial intelligence] and to see that individual companies, such as H&M and Lululemon, are investing in real solutions in their supply chains. I think a lot of concrete actions are being taken.
And yet we know that reducing emissions by half on an absolute basis by 2030 is a monumental undertaking. So I don’t want to be overly optimistic, because I think we have a lot of work to do. But I do think we’ve got some amazing progress happening.
Q: You mentioned several companies that are starting to address their emissions. Is that a result of their being more aware of the emissions they generate? Have you seen progress made since the first report came out in 2021?
A: Yes. When we published the first roadmap back in 2021, our statistics showed that only about 12 companies had met the criteria [for setting] science-based targets. In 2024, the number of apparel, textile, and footwear companies that have set targets or have commitments to set targets is close to 500. It’s an enormous increase. I think they see the urgency more than other sectors do.
We have companies that have been working at sustainability for quite a long time. I think the apparel sector has developed a keen understanding of the impacts of climate change. You can see the impacts of flooding, drought, heat, and other things happening in places like Bangladesh and Pakistan and India. If you’re a brand or a manufacturer and you have operations and supply chains in these places, I think you understand what the future will look like if we don’t significantly reduce emissions.
Q: There are different categories of emission levels, depending on the role within the supply chain. Scope 1 are “direct” emissions under the reporting company’s control. For apparel, this might be the production of raw materials or the manufacturing of the finished product. Scope 2 covers “indirect” emissions from purchased energy, such as electricity used in these processes. Scope 3 emissions are harder to track, as they include emissions from supply chain partners both upstream and downstream.
Now companies are finding there are legislative efforts around the world that could soon require them to track and report on all these emissions, including emissions produced by their partners’ supply chains. Does this mean that companies now need to be more aware of not only what greenhouse gas emissions they produce, but also what their partners produce?
A: That’s right. Just to put this into context, if you’re a brand like an Adidas or a Gap, you still have to consider the Scope 3 emissions. In particular, there are the so-called “purchased goods and services,” which refers to all of the embedded emissions in your products, from farming cotton to knitting yarn to making fabric. Those “purchased goods and services” generally account for well above 80% of the total emissions associated with a product. It’s by far the most significant portion of your emissions.
Leading companies have begun measuring and taking action on Scope 3 emissions because of regulatory developments in Europe and, to some extent now, in California. I do think this is just a further tailwind for the work that the industry is doing.
I also think it will definitely ratchet up the quality requirements of Scope 3 data, which is not yet where we’d all like it to be. Companies are working to improve that data, but I think the regulatory push will make the quality side increasingly important.
Q: Overall, do you think the work being done by the Apparel Impact Institute will help reduce greenhouse gas emissions within the industry?
A: When we started this back in 2020, we were at a place where companies were setting targets and knew their intended destination, but what they needed was a blueprint for how to get there. And so, the roadmap [provided] this blueprint and identified six key things that the sector needed to do—from using more sustainable materials to deploying renewable electricity in the supply chain.
Decarbonizing any sector, whether it’s transportation, chemicals, or automotive, requires investment. The Apparel Impact Institute is bringing collective investment, which is so critical. I’m really optimistic about what they’re doing. They have taken a data-driven, evidence-based approach, so they know where the emissions are and they know what the needed interventions are. And they’ve got the industry behind them in doing that.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”
That result showed that driver wages across the industry continue to increase post-pandemic, despite a challenging freight market for motor carriers. The data comes from ATA’s “Driver Compensation Study,” which asked 120 fleets, more than 150,000 employee drivers, and 14,000 independent contractors about their wage and benefit information.
Drilling into specific categories, linehaul less-than-truckload (LTL) drivers earned a median annual amount of $94,525 in 2023, while local LTL drivers earned a median of $80,680. The median annual compensation for drivers at private carriers has risen 12% since 2021, reaching $95,114 in 2023. And leased-on independent contractors for truckload carriers were paid an annual median amount of $186,016 in 2023.
The results also showed how the demographics of the industry are changing, as carriers offered smaller referral and fewer sign-on bonuses for new drivers in 2023 compared to 2021 but more frequently offered tenure bonuses to their current drivers and with a greater median value.
"While our last study, conducted in 2021, illustrated how drivers benefitted from the strongest freight environment in a generation, this latest report shows professional drivers' earnings are still rising—even in a weaker freight economy," ATA Chief Economist Bob Costello said in a release. "By offering greater tenure bonuses to their current driver force, many fleets appear to be shifting their workforce priorities from recruitment to retention."