Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
On paper, a "continuous moves" shipment strategy is a clear winner: A shipper works with a few core carriers to group a series of one-way hauls—between suppliers, manufacturing plants, distribution centers, and sometimes customers —into a round trip. The truckers benefit from fewer empty miles, less idle time, better asset utilization, and near-regular routes. The shipper benefits from lower rates and guaranteed capacity. The resulting efficiencies translate into better fuel economy and a smaller carbon footprint.
But shipping, like sports, is not played on paper. In practice, continuous moves are complicated to engineer, difficult to execute, and effective only under certain conditions. That may explain why the model's two-decade track record has been spotty at best.
Yet with fuel prices again on the rise and mounting pressure on companies to go green, continuous moves may be worth a second look, at least by shipping operations that have the freight density and geographic profile to make it work.
Hershey keeps things rolling
One company that has embraced the concept is The Hershey Co. In 2007, the iconic confectioner began a comprehensive review of its transportation and distribution processes. A key objective of the exercise —dubbed "Project Overdrive" —was to create an integrated transportation program by identifying continuous moves opportunities for Hershey, its suppliers, and its carriers.
In early 2008, Hershey and four of its core carriers launched a pilot program of continuous moves for outbound shipments from the company's factories to its four U.S. distribution centers and from the DCs to Hershey's retail customers. Hershey went nationwide with the outbound program later in the year. The company is currently implementing continuous moves for inbound freight to its plants from its packaging and commodities suppliers.
The program required Hershey to assume greater control over its transportation. In the past, inbound and outbound moves were managed separately. Suppliers were often responsible for getting their freight to Hershey's manufacturing plants, while Hershey managed movements between its plants and DCs. Under that system, for example, a packaging supplier located near Hershey's St. Louis DC would arrange for trucks to haul packaging materials to Hershey's factory in Robinson, Ill. Hershey, meanwhile, would manage outbound shipments of finished products from the Robinson plant to its St. Louis DC. Under the new program, Hershey manages both types of moves, which enables it to identify opportunities to combine trips. For example, Hershey might tender a load of packaging supplies bound for Robinson from St. Louis to an "outbound" refrigerated carrier that's scheduled to deliver finished goods to the St. Louis DC at around the same time. Instead of returning to Robinson empty to pick up another load for the DC, the refrigerated carrier drops its load at the DC, picks up the packaging material from the nearby supplier, and then delivers it to the Robinson plant, where the cycle begins again.
The advantages to Hershey are obvious: The confectioner improves asset utilization, reduces deadhead time and miles, relieves its suppliers of the task of transportation management, and benefits from volume-based discounts, according to Cindy Ambrose, project manager, integrated transportation for Hershey. The company has reduced transportation expenditures by 5 to 10 percent under the program, she says.
But the benefits go beyond the strictly quantifiable, she adds. The continuous moves program has also opened up new line-haul opportunities for its truckers in an otherwise weak market, making Hershey a more attractive business partner, Ambrose reports. That ensures Hershey will have the carrier capacity it needs during times of high seasonal demand.
Despite the many benefits Hershey has seen from its continuous moves program, Ambrose emphasizes it is not a one-size-fits-all strategy. "We haven't approached this as a blanket program —we evaluate each situation on its own merit," she says. "There will be times when it does make sense and... times when it does not."
Match game
For all its strategic potential, the continuous moves approach has its drawbacks. For one thing, it's effective only under a limited set of conditions. A shipper's tactical stars have to be aligned for the method to work, says Charles W. Clowdis Jr., managing director, North America, global commerce and transport for the consultancy IHS Global Insight. For example, it's critical that the inbound raw materials and the outbound finished goods match up in cube and density so they can be trucked by the same conveyance, he says.
Geographic proximity is another consideration, Clowdis says. Supplier sources, factories, distribution centers, and final delivery locations must be relatively close to one another or shippers run the risk of missing the carefully timed shipment cutoffs that are integral to a successful continuous moves plan.
Clowdis says the model can be effective in the retail environment. If stores are situated close to vendor locations, the trucks that make store deliveries can then pick up loads from vendors and haul them to the retailer's DCs. He adds that the model also has potential in the automotive sector, where raw materials are shipped from a parts supplier located near an auto assembly line to a plant where components are assembled. From there, the components are shipped to the final stop, where they are used to build cars.
Another drawback to the continuous moves strategy is difficulty of execution. Coordinating the many moving parts of this type of program is a painstaking, time-consuming exercise, and it doesn't take much to throw it off course, says Clowdis. It's rare for a company to have such a flawless supply chain that it can execute these demanding programs consistently, he adds.
Even advocates of the strategy acknowledge the difficulties of doing it right. "Few companies have executed this successfully," says Dawn Salvucci-Favier, senior director of product management for the services team of JDA Software Group Inc., a software developer that provides consulting and IT services to support the Hershey program.
Salvucci-Favier says most of the failures stem from a lack of coordination among the supply chain partners. The strategy works best if the program is run by a shipper who's working with a core group of dedicated carriers, she says. A continuous moves strategy is less likely to succeed if it's coordinated by a third-party logistics service provider that brings multiple carriers into the loop on a transactional basis, she says.
Jim Butts, senior vice president of the transportation brokerage giant C.H. Robinson Worldwide, says market conditions also play a role. Interest in continuous moves runs highest when demand for truck space exceeds available capacity or when fuel prices are rising, he says. Shippers under pressure to create efficiencies and to secure reliable carrier capacity have a strong incentive to make such programs work, he explains.
In an environment where demand is slack and fuel prices quiescent, however, the benefits of continuous moves may not outweigh the costs and risks of embarking on what often becomes a major redesign of a shipper's distribution process, Butts says. "Most shippers are able to achieve their goals of saving money on freight costs without such an elaborate approach" as continuous moves, he says.
Salvucci-Favier disputes the notion that a continuous moves model can only work under certain market conditions. "Regardless of the capacity and fuel situation," she says, "Hershey and others will be able to lower operating costs and improve efficiency with a program like this."
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
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.