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.
We've all heard about the pressure Wal-Mart and other retailers are putting on distribution centers when it comes to RFID capabilities. However, that's not the only request savvy retailers are dumping on DC managers.
DC executives have come to dread retailers' requests to perform a myriad of value-added services, many of which take hours of extra labor to complete. Tasks like ticketing items, packaging, assembling displays, providing special labeling, and putting apparel onto hangers for customers commonly occur at the DC level nowadays. It's clearly a no-win situation for DC managers who have made great strides in minimizing labor expenses for picking operations, but must now increase labor to deal with requests for often complicated and laborious hands-on value-added services.
"We're definitely seeing a trend toward more value-added services occurring in the DC," says Patti Satterfield, business development manager for Q4 Logistics, a systems integrator based in Santa Ana, Calif. "Many retailers don't have as much backroom space these days, so as items come off the truck they are literally flowed onto the floor as quickly as possible.
"For retailers, it's a resources issue as well as a space issue. They don't want people in the backroom putting items on hangers, so they are pushing that back to the DC. Value-added services are becoming part of day-to-day pick/pack operations, and many DCs have had to create extra steps to accommodate that, like adding a value-add services function to their WMS software."
The folks at Columbia Sportswear are an exception. Columbia's distribution center in Portland, Ore., performs value-added services on almost 20 percent of the products that move through its DC, but that percentage is much lower than it was three years ago.
"When you look at it on a productivity basis for units per hour, value-added services is the least productive area in our building by far," says Dave Carlson, who heads up Columbia Sportswear's distribution activities. "There's not too much we can do about it.We can automate getting the goods there [to the value-added services area] and taking the goods away, but what happens during the value-added process is very manual … it's customized and it changes with each pick and each order."
It's not unheard of, for example, for some of Columbia Sportswear's European customers to request that product be steamed and delivered on hangers. Columbia outsources that request, which delays the shipment to the customer and increases Columbia's lead time for getting product to the customer.
Just say no
Carlson reports that Columbia is making some progress in having value-added services take place at the manufacturer's factory. That's crucial in a distribution center where nearly 70 percent of products are less-than-case quantities, meaning those SKUs must be picked and packed manually before they leave the DC.
"It's taken a number of years," says Carlson, "but factories are getting more and more used to having these value-added requests pushed back to them. We've been able to move some of it upstream. That's the whole idea of the supply chain—trying to get everything done on the first touch."
Columbia Sportswear often refuses to perform certain value-added tasks that will consume too much labor and result in far too low payback. The firm also takes a consultative approach with its customers, letting them know when a value-added service request just doesn't make economic sense—for either Columbia Sportswear or the customer.
In one case, a retail customer requested a customized shipping label containing special shipping information.
Columbia's policy is to print a standard shipping form and content label from its warehouse management system for outbound freight. Carlson pointed out to the customer that the information it asked for in its special request was already included on the two labels Columbia produces. Suffice it to say, the customer backed off from the request.
The simple truth is when you are shipping 2,500 cartons an hour and filling five to seven trailer loads per hour during peak season, there isn't a lot of time for value-added services that don't provide a real benefit.
"We have a process to approve a customer for valueadded services," says Carlson. "In the end it's a commercial decision. We tell the customer we can do anything but it's not free. The customer needs to gauge how important it is to its business. Sometimes retailers are surprised that their requests don't add any value."
So before you spend all kinds of time and energy (and money) reconfiguring pick/pack operations to accommodate value-added requests, first make sure it's worthwhile for both sides.
picking options
Logistics professionals struggle every day to make picking operations more efficient. Why the attention to picking? Because up to 60 percent of all DC labor costs are related to picking and packing, and both of those activities are directly linked to customer satisfaction. At a User Conference held by Manhattan Associates last month, a panel on picking operations summarized the pros and cons of the various picking options as shown below:
Paper Picking
Benefits
Simple and common in distribution centers
Low support structure and hardware requirements
Pick list can be used as packing list
Ideal for smaller facilities with low orders per day
Generally used for picking one order at a time
Challenges
Distribution of paper to picker (lack of controls)
No real-time updating of transactions (pick verification)
Manual update to pick list for shortages (data entry)
Hard to reprioritize orders
Printing optimal pick path is difficult if used as packing slip
Voice Picking
Benefits
Frees hands for picking by use of a headset
Real-time updating of transactions
Provides pick verification (correct location and quantity)
Provides easy method for productivity tracking
Can provide extra information (special handling) to picker
Proper application can lead to higher productivity vs. RF
Challenges
Processes requiring large amount of license plate scanning can become tedious (scanning vs. verbal)
Additional step of creating packing slip
Radio Frequency (RF) Picking
Benefits
Real-time updating of transactions
Provides pick verification (correct location and quantity)
Allows for greater material handling complexity to assign tasks, license plates, split orders, cartonization, etc.
Provides easy method for productivity tracking
Can provide extra information (special handling) to picker
Challenges
All pickers require an RF terminal (initial cost/maintenance)
Another piece of hardware a picker must carry
Can lead to a decrease in productivity – requires training
Additional step of creating packing slip
Pick to Light
Benefits
High pick productivity with good accuracy
Real-time updating of transactions
Provides pick verification (correct location and quantity)
Provides easy method for productivity tracking
Challenges
Initial capital costs high, depending on number of SKUs
Typically used for high-volume broken case picking
May require additional controls & order management system
Operations requiring licenses plates will require a scanner for each picker
Here's our monthly roundup of some of the charitable works and donations by companies in the material handling and logistics space.
For the sixth consecutive year, dedicated contract carriage and freight management services provider Transervice Logistics Inc. collected books, CDs, DVDs, and magazines for Book Fairies, a nonprofit book donation organization in the New York Tri-State area. Transervice employees broke their own in-house record last year by donating 13 boxes of print and video assets to children in under-resourced communities on Long Island and the five boroughs of New York City.
Logistics real estate investment and development firm Dermody Properties has recognized eight community organizations in markets where it operates with its 2024 Annual Thanksgiving Capstone awards. The organizations, which included food banks and disaster relief agencies, received a combined $85,000 in awards ranging from $5,000 to $25,000.
Prime Inc. truck driver Dee Sova has donated $5,000 to Harmony House, an organization that provides shelter and support services to domestic violence survivors in Springfield, Missouri. The donation follows Sova's selection as the 2024 recipient of the Trucking Cares Foundation's John Lex Premier Achievement Award, which was accompanied by a $5,000 check to be given in her name to a charity of her choice.
Employees of dedicated contract carrier Lily Transportation donated dog food and supplies to a local animal shelter at a holiday event held at the company's Fort Worth, Texas, location. The event, which benefited City of Saginaw (Texas) Animal Services, was coordinated by "Lily Paws," a dedicated committee within Lily Transportation that focuses on improving the lives of shelter dogs nationwide.
Freight transportation conglomerate Averitt has continued its support of military service members by participating in the "10,000 for the Troops" card collection program organized by radio station New Country 96.3 KSCS in Dallas/Fort Worth. In 2024, Averitt associates collected and shipped more than 18,000 holiday cards to troops overseas. Contributions included cards from 17 different Averitt facilities, primarily in Texas, along with 4,000 cards from the company's corporate office in Cookeville, Tennessee.
Electric vehicle (EV) sales have seen slow and steady growth, as the vehicles continue to gain converts among consumers and delivery fleet operators alike. But a consistent frustration for drivers has been pulling up to a charging station only to find that the charger has been intentionally broken or disabled.
To address that threat, the EV charging solution provider ChargePoint has launched two products to combat charger vandalism.
The first is a cut-resistant charging cable that's designed to deter theft. The cable, which incorporates what the manufacturer calls "novel cut-resistant materials," is substantially more difficult for would-be vandals to cut but is still flexible enough for drivers to maneuver comfortably, the California firm said. ChargePoint intends to make its cut-resistant cables available for all of its commercial and fleet charging stations, and, starting in the middle of the year, will license the cable design to other charging station manufacturers as part of an industrywide effort to combat cable theft and vandalism.
The second product, ChargePoint Protect, is an alarm system that detects charging cable tampering in real time and literally sounds the alarm using the charger's existing speakers, screens, and lighting system. It also sends SMS or email messages to ChargePoint customers notifying them that the system's alarm has been triggered.
ChargePoint says it expects these two new solutions, when combined, will benefit charging station owners by reducing station repair costs associated with vandalism and EV drivers by ensuring they can trust charging stations to work when and where they need them.
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”
"Shrink" is the retail industry term for the loss of inventory before it can be sold, whether through theft, damage, fraud, or simple book-keeping errors. In the ongoing effort to reduce those losses, Switzerland-based retail tech company Sensormatic Solutions has expanded the scope of its Shrink Analyzer application to shine a light into previously unmonitored parts of brick-and-mortar stores where goods tend to go missing.
The newly enhanced, cloud-based application can now integrate radio-frequency identification (RFID) and electronic product code (EPC) data from overlooked parts of the building, like employee entrances, receiving doors, "buy online, pick up in store" (BOPIS) doors, or other high-risk areas selected by a store. It then integrates that data into Sensormatic's analytics engine to provide insights into when, where, and how shrink occurs to help users strengthen their loss-prevention strategies, the company says.
Those expanded capabilities allow the platform to provide enhanced "shrink insight" at locations beyond the store's main exit, Sensormatic says. For example, strategically placed RFID scanners at employee exits can reduce internal theft while providing item-level evidence for theft investigation efforts. Likewise, monitoring online-order pickup doors can help retailers both improve in-store e-commerce fulfillment accuracy and identify employee theft events, according to Sensormatic.
A few days before Christmas as I was busy preparing for the holiday, I received a text message from my bank asking if I had attempted to purchase a $244 Amtrak ticket in Orange County, California. Considering that I had the card in my possession and that I lived thousands of miles away from the attempted purchase location, I promptly replied "No." Almost immediately, a second message informed me that my card was locked and to contact my bank.
I'd like to say this was an isolated incident, but in 2024, I had to replace the same card four times. Luckily, it just took a quick trip to my local bank to replace the compromised card, but it was still an unwanted hassle.
Fraud is a never-ending issue facing not just consumers but businesses as well—no one is immune, it seems. In its latest industry report, "Occupational Fraud 2024: A Report to the Nations," the Association of Certified Fraud Examiners (ACFE) estimated that businesses lose 5% of their revenues to fraud each year. This report focused specifically on three basic types of occupational fraud: asset misappropriation, corruption, and financial misstatement. But what about other types of fraud?
The media often report on big organized theft rings stealing goods from trailers, trains, or containerships, or on bands of thieves breaking into warehouses or retail stores—but there are so many other ways in which fraudsters wreak havoc.
For instance, another area where fraud is rampant is consumer returns in the retail industry. Software company Appriss Retail, in collaboration with business management consultancy Deloitte, recently published its "2024 Consumer Returns in the Retail Industry" report. It states that "total returns for the retail industry amounted to $685 billion in merchandise in 2024." That might seem like a drop in the bucket compared to the $5 trillion in sales U.S. retailers racked up last year, but as the report's authors note in the executive summary, "the amount of fraud and abuse remains a significant issue that should be addressed. Fraudsters and abusers are often becoming adept at circumventing retailers' controls across all channels."
So what can businesses do? According to the ACFE study, internal controls (i.e., surprise audits, management reviews, hotlines or other reporting mechanisms, fraud training, and formal fraud risk assessments) are the best defense against occupational fraud.
When it comes to consumer returns fraud, Appriss Retail's report concludes that while retailers continue to adapt and refine their fraud prevention strategies, it's a delicate balancing act. The trick is for "retailers to implement solutions that have [a] minimal impact on the consumer experience," the report noted. "Brand loyalty can be fragile and competition continues to grow, so holding onto consumers is often a key to long-term success."
Then there's security and asset protection. Last October, I attended a session at the Council of Supply Chain Management Professionals' EDGE 2024 conference that focused on security and safety. In that session, Lee Ambrose, vice president of business development for Remote Security Solutions (RSS), discussed advanced strategies and technologies for violence prevention. But he also touched on asset/transit protection and specific solutions that can help companies discourage theft.
As an example, Ambrose cited his company's transit surveillance unit (TSU)—a portable monitoring device that can be installed on trailers to protect in-transit freight. According to the company's website, the TSU uses AI (artificial intelligence) detection, security cameras, and two-way communication to deter criminal activity, providing real-time detection and notification when unauthorized persons attempt to enter the trailer. It claims the device has a deterrence rate of 98%.
In the end, sometimes there is only so much a company can do to mitigate fraud/theft. But we are fortunate to have resources we can turn to if we need help. It's an uphill battle, but one that we will keep on fighting.