Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
When Jack Ampuja gives a talk on packaging, he brings along a visual aid: a shipping carton he received that's big enough to hold its contents several times over. His point is one familiar to most logistics professionals: Businesses ship a lot of air, driving up costs in a number of ways.
Ampuja, who is president and CEO of the consultancy Supply Chain Optimizers, says more often than not, the problem is simply lack of awareness. Companies typically select packaging based on marketing or other considerations without giving much thought to the supply chain implications, he says. As a result, they end up using more packaging than they need, creating enormous waste and unnecessary expense. He advocates with some passion that logistics professionals should become more involved in decisions about the packages their companies use to ship freight.
Package selection has taken on added importance in recent years as carriers—particularly parcel carriers—have begun imposing dimensional weight rules. Under those rules, the size of a package that's over three cubic feet can matter more than the weight when it comes to determining the freight charge, especially if the shipment is not very dense. Shippers have learned the hard way—through chargebacks by carriers—that they'd better be as aware of package dimensions as they are of package weight.
But the dimensional weight issue is just part of the reason Ampuja urges logistics professionals to take more control of packaging. Cost enters into it too, he says. Packaging has significant effects on logistics costs well beyond the price of cartons and filler. For instance, it can have a big impact on transportation expenses. The more packages you can fit on a pallet, the more packages you can get in a truck, thereby reducing the number of trucks needed and the amount of fuel used—important issues from both a cost and a sustainability perspective.
Then there's the issue of damage in transit. Randy Neilson, vice president of Quantronix, maker of the Cubiscan line of dimensioning equipment, adds that tighter packaging also means less shifting of goods within cartons, which reduces the potential for product damage.
There may even be regulatory compliance considerations. André Johnson, CEO of FreightScan, a company that makes cargo dimensioning products for carriers and some shippers, tells of customers who have used the dimensional data to back up their dimensional weight shipping costs as part of their companies' Sarbanes-Oxley compliance. "Shippers have told us that their dim weight charges have been questioned by their compliance people," he says. "They want to know how [shipping] knows the charges are accurate, since they are attesting that they are true. This is how they know."
Some companies may even face business pressure to avoid wasteful packaging. Wal-Mart Stores Inc. has launched a "packaging scorecard" for suppliers as part of an initiative to reduce packaging across its global supply chain 5 percent by 2013, based on a 2008 baseline. Shippers are rated on several criteria, among them the ratio of the product to the package, cube utilization, and transportation—all issues directly related to the size of the box. Late last year, Wal-Mart said it will roll out the packaging scorecard across most of its markets worldwide by the end of this year.
Wal-Mart expects the initiative to take some $10 billion in costs out of its supply chain, including transportation savings, with most of that going to its suppliers. That might sound like an ambitious goal, but Ampuja thinks the Wal-Mart targets should actually be relatively easy to achieve. "They should blow through that," he says. "I think for most companies, there is at least a 10-percent opportunity."
Nothing to lose, much to gain
Ampuja's own experiences with packaging optimization attest to the savings potential. He cites one customer (a retailer whose identity he cannot disclose because of a confidentiality agreement) that realized big cost reductions just by revamping its lineup of shipping cartons. Based on the results of an analysis Supply Chain Optimizers conducted over its 16,000 SKUs, the retailer eliminated nine of its 16 box configurations, then added 12 more for a total of 19. Increasing the number of options might sound like a step in the wrong direction, but Ampuja says the move actually reduced the total number of cartons used by 5 percent. In addition, the client expects to see a 5-percent reduction in outbound shipping weight, a 7-percent reduction in dim weight, a 28-percent improvement in outbound-case cube utilization, a 21-percent reduction in corrugate, and a 41-percent reduction in filler material. The net result: a 5-percent reduction in overall freight costs.
That's just one example of the kind of savings that can be achieved through packaging optimization. Ampuja cites another customer, a company that recycles used auto parts, that parlayed a minor packaging change into a rate reduction. By redesigning the packaging for a single part, it was able to take its freight class from 250 to 150, resulting in a 40-percent reduction in rates.
Of course, it's not enough to simply conduct a packaging optimization analysis. Once you have the results in hand, you then have to do something with them. One option is to incorporate tools into the warehouse management system that ensure the right carton is used for each shipment. For example, Nielson of Quantronix suggests programming the system to determine the right carton based on the dimensions of the shipment and then convey those instructions to workers on the line.
Team effort
Ampuja does not argue that packaging should be solely the responsibility of logistics; he acknowledges that there are plenty of marketing, antitheft, and other considerations that factor into packaging decisions. But he believes it is critical that logistics get involved in packaging decisions early on. "I would love companies to see it as a team exercise," he says.
On the overall need for logistics professionals to give more thought to packaging, Ampuja borrows a quote from the famed bank robber Willy Sutton. Logistics managers should focus on packaging "because that's where the money is," he says.
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).
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.”
Under terms of the deal, Sick and Endress+Hauser will each hold 50% of a joint venture called "Endress+Hauser SICK GmbH+Co. KG," which will strengthen the development and production of analyzer and gas flow meter technologies. According to Sick, its gas flow meters make it possible to switch to low-emission and non-fossil energy sources, for example, and the process analyzers allow reliable monitoring of emissions.
As part of the partnership, the product solutions manufactured together will now be marketed by Endress+Hauser, allowing customers to use a broader product portfolio distributed from a single source via that company’s global sales centers.
Under terms of the contract between the two companies—which was signed in the summer of 2024— around 800 Sick employees located in 42 countries will transfer to Endress+Hauser, including workers in the global sales and service units of Sick’s “Cleaner Industries” division.
“This partnership is a perfect match,” Peter Selders, CEO of the Endress+Hauser Group, said in a release. “It creates new opportunities for growth and development, particularly in the sustainable transformation of the process industry. By joining forces, we offer added value to our customers. Our combined efforts will make us faster and ultimately more successful than if we acted alone. In this case, one and one equals more than two.”
According to Sick, the move means that its current customers will continue to find familiar Sick contacts available at Endress+Hauser for consulting, sales, and service of process automation solutions. The company says this approach allows it to focus on its core business of factory and logistics automation to meet global demand for automation and digitalization.
Sick says its core business has always been in factory and logistics automation, which accounts for more than 80% of sales, and this area remains unaffected by the new joint venture. In Sick’s view, automation is crucial for industrial companies to secure their productivity despite limited resources. And Sick’s sensor solutions are a critical part of industrial automation, which increases productivity through artificial intelligence and the digital networking of production and supply chains.