I could not agree with you more! I just hope the powers that be are listening to all the logistics providers, large and small, and to industry experts such as DC VELOCITY. Your view mirrors what the rest of us are thinking—we average people who are also feeling the pinch and want something real to be done toward gaining energy independence. MJ McDonald, Indianapolis, Ind.
Opening Alaska, the Pacific Coast, or the Atlantic Coast to more oil exploration is not the solution. Even if projects started today, it would be five to 10 years before any new domestic oil hit the market. Increasing production will only prolong the agony and suffering of the patient (trucking and logistics companies).
What about ridding the industry of load brokers? That way, the actual cost of moving freight would go to the trucking companies and then, hopefully, to the drivers. How about reducing supply chains from 15,000 miles to more domestic networks? What about moving manufacturing plants back to North America and away from Asia? There are huge fuel savings to be had there.
Our reliance on oil, make that "cheap" oil, has led us to this predicament. How about buying locally instead of getting fruit from California shipped to New York? How about banning all plastic bags? How about mandatory recycling programs? There are an infinite number of ways to cut back on the amount of oil we use. We must stop being oil pigs and reduce our consumption. Will that cause some to suffer? Absolutely, but think of all the innovation that will be produced because of this. Job losses today will be replaced by jobs of tomorrow that haven't even been thought of yet. Kevin Lee, Roaring Express
In his column "the patient is not well," Mitch Mac Donald states that "there's no short-term solution at hand" and "we must wean ourselves off those [expensive fossil] fuels." He goes on to support only one "solution" that helps nobody but oil companies: "remove roadblocks to domestic oil exploration and drilling." This populist and political solution to produce more fossil fuel at home is, by all serious accounts, not a short- or long-term solution (our relatively small incremental U.S. supplies can't significantly affect world oil prices). And this does not wean us off oil.
It would be better to remove import restrictions on alternative fuel imports (like Brazilian ethanol) and subsidize efficiency improvements now as we restructure distribution networks to accommodate permanently higher transport/fuel costs. Rather than political fixes, a more realistic view of our options and potential solutions to high fuel/transport costs would better serve your readers. Bret Andersen, Palo Alto, Calif.
real "Rainmakers" at last
First, I think DC VELOCITY is the premier magazine covering our industry. Layout, stories, graphics ... the complete product is high quality all the way.
Having said that, when I received the July issue today, I was primed to drop you a nasty note. Over the last two years, I have felt that the "Rainmakers" issue was dominated by academics and software providers. While important to our industry, they are not "Rainmakers" by definition (or at least by my definition). This does not mean that my definition is correct, but with over 30 years in this industry, at least it is a firm definition in my mind.
I was pleasantly surprised to find that the 2008 version actually has operations people highlighted—real people actually providing a quantifiable service. So, instead of expressing indignation, I'd like to say, keep up the good work! Michael Sims, Jacobson Companies
a silent majority?
Re: "a step backward?" FastLane (July 2008)
Cliff Lynch's treatise on rail regulation and deregulation was a fine and historically accurate version of this chapter in American history. As a co-author—with David DeBoer—of An American Transportation Story, I can verify what Mr. Lynch has stated.
It is only certain shippers, however, that are calling for measures that would re-regulate the railroads despite their protestations that they want nothing of the sort. These are the shippers of bulk commodities that saw during the debate on the Staggers Rail Act that they would pay a larger portion of system fixed costs than they did under the Interstate Commerce Commission's public utility-type regulation. They opposed passage of Staggers and have been seeking to negate it ever since.
Meanwhile, shippers that are receiving much improved service at market rates are relatively silent because there is nothing for them to say—yet. When and if re-regulation legislation makes any headway in Congress, I would expect many shippers to speak out. They have been the beneficiaries of deregulation every bit as much as the railroads have been. Larry Kaufman, Golden, Colo.
Editor's note: The writer was vice president of public affairs for the Association of American Railroads when the Staggers Act was debated and passed.
create your own network
Re: "let's make a deal" (July 2008)
I really enjoyed Mark Solomon's article about social networking. Being from a marketing—as opposed to a material handling—background, I might be more familiar than some of your readers when it comes to social media. There is a great deal of power in social networking, but it is not always easy to harness and can be confusing to the first-time user. The article was a good introduction to those who see social networking as "private networking."
Besides the social networking sites mentioned in the
article, another that I have recently become interested in is "Ning." Ning allows you to create your own social networking site, be it for your customers or sales team or any group. It makes it easy to create a "closed circle" network.
Thanks for the article and for the magazine. Travis A. Baker, SSI Schaefer Systems International Inc.
a vote for nuclear and wind power
Re: "a far less dismal alternative," SpecialHandling (July 2008)
In his column, George Weimer stated that we (our country as a whole) haven't built a new nuclear power plant in a generation and a half, have done nothing to promote coal, and haven't allowed ourselves to drill for new oil or build new refineries for decades.
I consider myself an environmentalist, but I am also a realist. As energy costs continue to rise with virtually no prospect of retreating, I think we need to invest more in nuclear power. Stop allowing the injunctions that stop or delay construction, adding millions to the cost of a plant. If nuclear plants are designed properly, located on stable ground, and allowed to be built without interruption, I'm positive it would be a great benefit to this country. The only downside, of course, is the waste. I do not have a good answer for that.
I'm not that convinced that coal is the way to go. With burning coal, you get mercury and sulfur—two things I would rather not have added to the planet's surface in mass quantities. They're best left underground undisturbed.
On his point about oil, it is not "we" who control the money for drilling or building new refineries; it's the oil companies. By not doing these things, they achieve exactly what they wanted: super high oil prices so they can make unheard-of record profits. The oil companies have more than enough money to drill more wells on existing leased land or build at least one new refinery in this country. But they would rather pay the stock holders huge dividends and watch the rest of us suffer.
I think wind power should be the new "Apollo" program. Yes, it would require a huge up-front investment, but I believe the payoff would be worth it. Mark C. Miller, Brook Park, Ohio
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.
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.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
This story first appeared in the July/August issue of Supply Chain Xchange, a journal of thought leadership for the supply chain management profession and a sister publication to AGiLE Business Media & Events’ DC Velocity.
Companies can find it challenging to meet the increasing demand to make their supply chains sustainable—except when external events force their hands.
Our research shows that when large-scale disruptions compel companies to rethink their operations, improving sustainability is often part of the redesigned supply chains that emerge from such crises. Counterintuitively, supply chain sustainability (SCS) efforts appear to thrive in a crisis.
While companies should not limit their SCS efforts to crises, an awareness of these opportunities can help them identify opportune moments to advance their green agendas. This is especially the case in today’s volatile business environment, where adjustments to operational footprints in response to disruptive market forces are becoming more frequent.
The pressure to make supply chains more sustainable has risen steadily over the four years we have done this research. We measure 10 sources of pressure, including investors, government entities, corporate buyers, company executives, and consumers, and the pressure from all of them has increased over the four years.
Investors represent the fastest-growing source, with a 25% increase in average respondent score throughout observation. Next come corporate buyers, with a 15% increase, followed by governments and governing bodies (11%).
Overall, the research indicates that commercial interests—be it access to capital gated by sustainability-minded investors or sales opportunities gated by sustainability-minded procurement teams—are pushing companies to improve their SCS performance year after year.
OBSTACLES TO SCS
However, meeting stakeholder expectations of significant reductions in supply chain carbon footprints is still a stretch for many companies.
Reducing Scope 3 emissions—those associated with assets not owned by the company and therefore largely out of their control—is proving particularly tricky. These problems are reflected in our latest research. Almost half of the “2023 State of Supply Chain Sustainability” report respondents indicated their organizations will not begin measuring or reducing Scope 3 emissions for five years or more. Scope 3 reporting and collecting reliable data across company boundaries appear to be especially challenging.
Another indicator of the bumpy road to SCS is the number of companies rethinking or scaling back their net-zero emissions pledges. Again, these issues are reflected in our research. Across all global respondents in the 2023 report, only 35% confirmed that their companies have net-zero goals. Moreover, many within this minority group appear unprepared for the net-zero deadlines they set for themselves.
DON’T WASTE A CRISIS
Four years of researching SCS efforts have allowed us to study the impact of various large-scale global crises on firms’ commitment to this work. We have found that the effect varies with the type of disruption experienced.
For the most part, crises that provoke acute supply chain network disruptions necessitating supply lines to be redrawn tend to result in an increased commitment to sustainability in supply chains. However, economic crises that require companies to regroup tend to dampen their SCS commitments.
For example, in the 2023 report, respondents were asked to rate their companies’ continued commitment to SCS in light of three crises: the Covid-19 pandemic in 2020–21, Russia’s invasion of Ukraine (asked in 2023), and adverse economic conditions in 2023. In the first two cases, SCS efforts did not flag, but they did in the third situation. The survey results show that 79% of respondents confirmed that their SCS commitments increased in response to the Covid-19 pandemic, and 61% said they have increased due to the Ukraine invasion.
In contrast, 56% of respondents indicated that their commitments to SCS declined over concerns that an economic slowdown was imminent in 2023. The research shows that when an economic downturn is in the offing, firms tend to concentrate on developing leaner, more cost-effective supply chain networks, even when such efforts do not align with sustainability goals. Also, companies are more focused on short-term risk-mitigation efforts—rather than longer-term sustainability targets—when dealing with economic headwinds.
However, when global disruptions upend operations, the reaction is different. Companies redesign their supply chain networks in response, and building sustainability into these revamps makes sense. In recent years, we’ve observed that the most opportune time to redesign a supply chain with sustainability in mind is, paradoxically, when the supply chain is broken.
AN EXTENSION OF REDESIGN
In today’s uncertain world, there is no shortage of global-scale disruptions to supply chains, and these are unlikely to diminish in the face of future uncertainties, such as climate change and geopolitical instability.
Framing SCS as part of a company’s ongoing supply chain network redesign efforts might be a way to secure resources for these programs.
Moreover, perhaps this rationale need not be restricted to global crises. A host of competitive challenges can require firms to review the structure of their end-to-end operations. A company might need to change the geographic profile of its supply base as political tensions rise, decentralize its supply chain to reduce risk, or reconfigure its last-mile operations in changing e-commerce markets.
Further research is needed into the relationship between sustainability efforts and managing and mitigating disruption risks. Meanwhile, current and potential disruptions can offer an opportunity to integrate sustainability into the design and management of supply chains.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!