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.
With apologies to Kermit The Frog, being green is looking pretty easy these days—even for warehouse and distribution center operations. Environmentally friendly material handling systems are available for nearly every warehouse function, and most suppliers are eager to help their customers figure out how to use their equipment to maximum green effect. Best of all, many of these products do not require large investments, just a new way of thinking when it comes to selecting equipment.
What follows is a brief rundown of some areas of a DC operation that offer easy opportunities to go green. Although this is by no means a comprehensive list, it may give you some ideas on simple ways to make your own operation more sustainable.
Waste not, want not
Most distribution facilities create mountains of waste—corrugated cartons from incoming shipments, paper used to pick and process orders, and even the backing of labels used in pick operations. Throw in used stretch wrap, old pallets, and left-over packaging supplies, and the volume mounts quickly.
What to do with all that waste? First, reuse the corrugated materials where possible. By shipping products in their original cartons, you save the cost of new materials as well as the time spent repacking. (But check with your vendors first to make sure the cartons are sturdy enough for reuse.) All corrugated that you do not reuse should be recycled. Balers can make it easy to stack and prepare old corrugated for transport to a recycling facility.
Paper, too, can be recycled, but a greener alternative is to eliminate paper altogether wherever you can.More and more DCs are turning to paperless order processing systems these days. In a paperless environment, warehouse management software relays picking instructions to workers via voice, pick-to-light, or radio-frequency technology, eliminating the need for paper pick lists. As a side benefit, these systems boost accuracy and productivity, and generally have a fairly short payback period.
If paperless operations are not an option, there are still things you can do to reduce your environmental impact. For example, if you use paper for pick-to-label applications, look for labels made from recycled materials.
Run on demand
When the subject of green equipment comes up, conveyors probably aren't the first thing that comes to mind. But actually, today's conveyors are engineered to save electricity. A prime example is the motordriven roller (MDR) conveyor, which is designed to power down when not in use—a significant departure from traditional conveyors, which run continuously during operating hours. Although they're more expensive than conventional models, MDR units typically pay for themselves many times over in energy savings and reduced maintenance expenses (because the units don't run continuously, there's less wear and tear on components). The "run on demand" feature alone reportedly cuts power consumption by at least one-third.
Even if you have an old conveyor, you may still be able to save money by converting it to a more energy-efficient design. A number of conveyor companies offer retrofits for existing systems that involve replacing old drive motors with more efficient units.
Many of today's conveyor systems feature a modular design that allows them to be easily repositioned or even moved to another facility as distribution needs change. That versatility can help extend the conveyors' lives far beyond the time when units are ordinarily consigned to the scrap heap.
Manifest destiny
When it comes to opportunities for going green, it's hard to imagine an area of DC operations that offers more potential than packaging and shipping. For starters, there are the shipping containers. Rather than relying on corrugated boxes, consider the reusable plastic container for closedloop applications. Advocates say the plastic units are cheaper to use in the long run and provide better protection than corrugated. And the containers are designed to nest when empty, making them economical to store and transport.
If plastic containers aren't an option, there are still steps you can take to make your operation more sustainable. For example, you can select cartons made of recycled materials. You can also review your operations to make sure you're choosing the right size carton for each shipment. Cubing systems make it easy to determine the volume of each order as well as the optimal carton size. Smaller cartons use less material, save on transportation costs, and require less void fill to protect their contents.
As for void fill, again, look for products that can be recycled. Kraft paper made from recycled material is an eco-friendly choice. Air-filled cushioning is another good option—one that requires minimal storage space and is also readily recyclable. There are also peanut-type cushioning products on the market today that are made of cornstarch and other water-soluble materials, making them a biodegradable alternative to foam-based packing peanuts.
Although often overlooked, green opportunities can also be found in a facility's printing and labeling operations. For example, you might be able to switch to a smaller shipping label, or replace your current labeling system with one that prints the shipping information on one side of the label and the packing slip on the other (thus saving paper).You might also consider dispensing with shipping labels altogether in favor of an inkjet encoding system that prints shipping information directly onto a carton. (If you do, look for a system that uses environmentally friendly inks.)
Of all the equipment in a distribution center, the item most likely to be recycled is actually the wood pallet. Most facilities repair and reuse pallets until they're no longer serviceable, and nearly all pallets are eventually recycled. While some argue that wood pallets are the greenest choice because they're made from a renewable resource, others consider plastic and metal pallets to be more eco-friendly because they can be reused hundreds of times (see "how green are your pallets?" DC VELOCITY, November 2008). Still others advocate for pallets made from fiberboard, corrugated, and other materials that are easy to recycle.
In it for the long haul
Like conveyors, lift trucks, which are the workhorses of most DCs, have become greener in recent years. That's partly because manufacturers have shifted some of their emphasis from internal-combustion engine models to battery-operated trucks that produce virtually no greenhouse gas emissions. In the meantime, research continues on alternative fuels, like hydrogen fuel cells, that show great promise.
Even among electric models, many of today's trucks are greener than their predecessors. There's been a shift away from units that rely on direct current (DC) electricity in favor of alternating current-powered models that use less energy. And lately, manufacturers have introduced hybrid electric models that generate power from energy used in vehicle braking and mast lifting operations.
At the same time, advances in electric battery design and charging technologies have increased the power output of standard cells, making electric trucks more eco-friendly than in the past. Plus, the fast-charging systems for batteries that are now on the market typically reduce the number of batteries required per truck by at least half (and eliminate the need for a battery changing room).
The environment inside
As for the facility itself, there are plenty of ways to make a building more eco-friendly without investing in costly new heating, cooling, and ventilation systems. To begin with, you can install large, low-speed ceiling fans as an alternative or supplement to air conditioning. In the winter, these same fans can force the warm air that rises to the ceiling back down to floor level, where there can be a 20-degree temperature difference.
For very hot climates, also consider misting devices to help keep workers cool as an alternative to air conditioning.
If you haven't already, install dock seals, barriers, and side curtains around all openings at a facility's docks. The seals will not only help keep heated or cooled air from escaping, but will also prevent insects and other pests from entering. Many dock equipment companies also offer seals for their dock levelers and truck plates and the small area around the trailer hinges where air can escape. Consider vinyl strip doors, rollup doors, and air curtains to maintain temperatures in the various zones of refrigerated and freezer buildings— keeping the cold where it belongs.
If your facility uses mercury vapor, sodium vapor, halogen, metal halide, or tungsten lights, think about replacing your existing system with a more energy-efficient alternative, like high-output fluorescent and similar induction lighting systems. T8 fluorescent fixtures, for example, operate on just 64 watts and can reduce power consumption by two-thirds while still producing more illumination than older lights. You can also save energy by installing motion sensors in racks and other areas of the building to turn lights on only when workers are present.
One step at a time
While the list of opportunities to go green may seem overwhelming, remember that you don't have to do everything at once. Instead, start with those improvements that make the most sense for your operation and your budget—no matter how insignificant they may seem at the outset. When it comes to saving the planet, even small steps can have a big impact.
hip to be green?
When it began its search for a new distribution facility in December 2007, Gainesville, Fla.-based Exactech had two main goals, and neither had anything to do with the environment. First, the company wanted more space. Second, it was looking to upgrade to a faster, more efficient system for filling orders for its products, surgical instruments and orthopedic implants for hip, knee, and shoulder replacements.
But when it came time to choose the material handling systems for the new facility, Exactech's designer and integrator, TriFactor, suggested that its client consider setting a third goal for itself: to use eco-friendly equipment where possible. "The opportunity was presented to us to go green," recalls Kevin Godwin, Exactech's director of customer operations. The company agreed to give the matter some thought, and soon afterwards, added eco-friendliness to its list of priorities.
After looking at the various options, Exactech concluded that the biggest eco-benefits would come from selecting energy-efficient conveyors and lighting. For conveyors, it chose a motor-driven roller (MDR) model manufactured by Hilmot Corp. The conveyors, which run on 24-volt direct current electricity, operate only "on demand," that is, when a product is present. That makes them as much as 60 percent more efficient than traditional conveyors, which run continuously. They're significantly quieter as well. "We refer to it as our 'stealth' conveyor," says Godwin. And because the motors are not constantly running, there is less wear on belts, bearings, and other conveyor components.
As for lighting, the company came up with an energy-efficient lighting system that could be described as spartan yet functional. Taking advantage of a resource abundantly available in the Sunshine State, it installed skylights that flood the facility with natural light. A polished concrete floor and white insulation on the walls further reflect the light, keeping the space well illuminated.
With artificial lighting, Exactech took a "less is more" approach, installing as little as possible. The lights it did install are controlled by a user-friendly switch panel that allows lights to be turned on only in the areas needed. As a result, power consumption in the new building is lower than it was in the old building, which was about half its size, according to Godwin.
Godwin says Exactech is now looking at replacing the nickel metal lighting fixtures that were there when the company moved into the building with more efficient induction lighting. Induction lamps would require half the wattage of the current lamps to produce comparable light output. Swapping out the fixtures would further reduce the building's power consumption by half.
As for how it's all working out, it appears that Exactech has no reason to regret its decision to go green. "It was more expensive up front," says Godwin, "but we save in the long run with lower maintenance and energy savings." Plus, the green initiative was a good fit with the company's values, he adds. "As a corporation, we are very community-oriented, and so it made sense for us to go green."
Artificial intelligence (AI) and data science were hot business topics in 2024 and will remain on the front burner in 2025, according to recent research published in AI in Action, a series of technology-focused columns in the MIT Sloan Management Review.
In Five Trends in AI and Data Science for 2025, researchers Tom Davenport and Randy Bean outline ways in which AI and our data-driven culture will continue to shape the business landscape in the coming year. The information comes from a range of recent AI-focused research projects, including the 2025 AI & Data Leadership Executive Benchmark Survey, an annual survey of data, analytics, and AI executives conducted by Bean’s educational firm, Data & AI Leadership Exchange.
The five trends range from the promise of agentic AI to the struggle over which C-suite role should oversee data and AI responsibilities. At a glance, they reveal that:
Leaders will grapple with both the promise and hype around agentic AI. Agentic AI—which handles tasks independently—is on the rise, in the form of generative AI bots that can perform some content-creation tasks. But the authors say it will be a while before such tools can handle major tasks—like make a travel reservation or conduct a banking transaction.
The time has come to measure results from generative AI experiments. The authors say very few companies are carefully measuring productivity gains from AI projects—particularly when it comes to figuring out what their knowledge-based workers are doing with the freed-up time those projects provide. Doing so is vital to profiting from AI investments.
The reality about data-driven culture sets in. The authors found that 92% of survey respondents feel that cultural and change management challenges are the primary barriers to becoming data- and AI-driven—indicating that the shift to AI is about much more than just the technology.
Unstructured data is important again. The ability to apply Generative AI tools to manage unstructured data—such as text, images, and video—is putting a renewed focus on getting all that data into shape, which takes a whole lot of human effort. As the authors explain “organizations need to pick the best examples of each document type, tag or graph the content, and get it loaded into the system.” And many companies simply aren’t there yet.
Who should run data and AI? Expect continued struggle. Should these roles be concentrated on the business or tech side of the organization? Opinions differ, and as the roles themselves continue to evolve, the authors say companies should expect to continue to wrestle with responsibilities and reporting structures.
Shippers today are praising an 11th-hour contract agreement that has averted the threat of a strike by dockworkers at East and Gulf coast ports that could have frozen container imports and exports as soon as January 16.
The agreement came late last night between the International Longshoremen’s Association (ILA) representing some 45,000 workers and the United States Maritime Alliance (USMX) that includes the operators of port facilities up and down the coast.
Details of the new agreement on those issues have not yet been made public, but in the meantime, retailers and manufacturers are heaving sighs of relief that trade flows will continue.
“Providing certainty with a new contract and avoiding further disruptions is paramount to ensure retail goods arrive in a timely manner for consumers. The agreement will also pave the way for much-needed modernization efforts, which are essential for future growth at these ports and the overall resiliency of our nation’s supply chain,” Gold said.
The next step in the process is for both sides to ratify the tentative agreement, so negotiators have agreed to keep those details private in the meantime, according to identical statements released by the ILA and the USMX. In their joint statement, the groups called the six-year deal a “win-win,” saying: “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coasts ports – making them safer and more efficient, and creating the capacity they need to keep our supply chains strong. This is a win-win agreement that creates ILA jobs, supports American consumers and businesses, and keeps the American economy the key hub of the global marketplace.”
The breakthrough hints at broader supply chain trends, which will focus on the tension between operational efficiency and workforce job protection, not just at ports but across other sectors as well, according to a statement from Judah Levine, head of research at Freightos, a freight booking and payment platform. Port automation was the major sticking point leading up to this agreement, as the USMX pushed for technologies to make ports more efficient, while the ILA opposed automation or semi-automation that could threaten jobs.
"This is a six-year détente in the tech-versus-labor tug-of-war at U.S. ports," Levine said. “Automation remains a lightning rod—and likely one we’ll see in other industries—but this deal suggests a cautious path forward."
Editor's note: This story was revised on January 9 to include additional input from the ILA, USMX, and Freightos.
Logistics industry growth slowed in December due to a seasonal wind-down of inventory and following one of the busiest holiday shopping seasons on record, according to the latest Logistics Managers’ Index (LMI) report, released this week.
The monthly LMI was 57.3 in December, down more than a percentage point from November’s reading of 58.4. Despite the slowdown, economic activity across the industry continued to expand, as an LMI reading above 50 indicates growth and a reading below 50 indicates contraction.
The LMI researchers said the monthly conditions were largely due to seasonal drawdowns in inventory levels—and the associated costs of holding them—at the retail level. The LMI’s Inventory Levels index registered 50, falling from 56.1 in November. That reduction also affected warehousing capacity, which slowed but remained in expansion mode: The LMI’s warehousing capacity index fell 7 points to a reading of 61.6.
December’s results reflect a continued trend toward more typical industry growth patterns following recent years of volatility—and they point to a successful peak holiday season as well.
“Retailers were clearly correct in their bet to stock [up] on goods ahead of the holiday season,” the LMI researchers wrote in their monthly report. “Holiday sales from November until Christmas Eve were up 3.8% year-over-year according to Mastercard. This was largely driven by a 6.7% increase in e-commerce sales, although in-person spending was up 2.9% as well.”
And those results came during a compressed peak shopping cycle.
“The increase in spending came despite the shorter holiday season due to the late Thanksgiving,” the researchers also wrote, citing National Retail Federation (NRF) estimates that U.S. shoppers spent just short of a trillion dollars in November and December, making it the busiest holiday season of all time.
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
As U.S. small and medium-sized enterprises (SMEs) face an uncertain business landscape in 2025, a substantial majority (67%) expect positive growth in the new year compared to 2024, according to a survey from DHL.
However, the survey also showed that businesses could face a rocky road to reach that goal, as they navigate a complex environment of regulatory/policy shifts and global market volatility. Both those issues were cited as top challenges by 36% of respondents, followed by staffing/talent retention (11%) and digital threats and cyber attacks (2%).
Against that backdrop, SMEs said that the biggest opportunity for growth in 2025 lies in expanding into new markets (40%), followed by economic improvements (31%) and implementing new technologies (14%).
As the U.S. prepares for a broad shift in political leadership in Washington after a contentious election, the SMEs in DHL’s survey were likely split evenly on their opinion about the impact of regulatory and policy changes. A plurality of 40% were on the fence (uncertain, still evaluating), followed by 24% who believe regulatory changes could negatively impact growth, 20% who see these changes as having a positive impact, and 16% predicting no impact on growth at all.
That uncertainty also triggered a split when respondents were asked how they planned to adjust their strategy in 2025 in response to changes in the policy or regulatory landscape. The largest portion (38%) of SMEs said they remained uncertain or still evaluating, followed by 30% who will make minor adjustments, 19% will maintain their current approach, and 13% who were willing to significantly adjust their approach.
The overall national industrial real estate vacancy rate edged higher in the fourth quarter, although it still remains well below pre-pandemic levels, according to an analysis by Cushman & Wakefield.
Vacancy rates shrunk during the pandemic to historically low levels as e-commerce sales—and demand for warehouse space—boomed in response to massive numbers of people working and living from home. That frantic pace is now cooling off but real estate demand remains elevated from a long-term perspective.
“We've witnessed an uptick among firms looking to lease larger buildings to support their omnichannel fulfillment strategies and maintain inventory for their e-commerce, wholesale, and retail stock. This trend is not just about space, but about efficiency and customer satisfaction,” Jason Tolliver, President, Logistics & Industrial Services, said in a release. “Meanwhile, we're also seeing a flurry of activity to support forward-deployed stock models, a strategy that keeps products closer to the market they serve and where customers order them, promising quicker deliveries and happier customers.“
The latest figures show that industrial vacancy is likely nearing its peak for this cooling cycle in the coming quarters, Cushman & Wakefield analysts said.
Compared to the third quarter, the vacancy rate climbed 20 basis points to 6.7%, but that level was still 30 basis points below the 10-year, pre-pandemic average. Likewise, overall net absorption in the fourth quarter—a term for the amount of newly developed property leased by clients—measured 36.8 million square feet, up from the 33.3 million square feet recorded in the third quarter, but down 20% on a year-over-year basis.
In step with those statistics, real estate developers slowed their plans to erect more buildings. New construction deliveries continued to decelerate for the second straight quarter. Just 85.3 million square feet of new industrial product was completed in the fourth quarter, down 8% quarter-over-quarter and 48% versus one year ago.
Likewise, only four geographic markets saw more than 20 million square feet of completions year-to-date, compared to 10 markets in 2023. Meanwhile, as construction starts remained tempered overall, the under-development pipeline has continued to thin out, dropping by 36% annually to its lowest level (290.5 million square feet) since the third quarter of 2018.
Despite the dip in demand last quarter, the market for industrial space remains relatively healthy, Cushman & Wakefield said.
“After a year of hesitancy, logistics is entering a new, sustained growth phase,” Tolliver said. “Corporate capital is being deployed to optimize supply chains, diversify networks, and minimize potential risks. What's particularly encouraging is the proactive approach of retailers, wholesalers, and 3PLs, who are not just reacting to the market, but shaping it. 2025 will be a year characterized by this bias for action.”