Art van Bodegraven was, among other roles, chief design officer for the DES Leadership Academy. He passed away on June 18, 2017. He will be greatly missed.
There will always be those who see the green movement as more fad than force of change. And the booming business in green conferences, books, webinars, and so forth has only given cynics further reason to sneer.
But the prevailing evidence suggests the green movement is more than a passing fancy and further, that green initiatives can deliver real benefits, including, believe it or not, long-term cost savings. Re-use, recycling, reduction, and renewability will ultimately all pay off some day. Pegging "some day" on the calendar is a bit of a challenge, but looking past tomorrow—or next quarter's earnings imperative—can help develop confidence in the economic, as well as moral, correctness of doing smart green things.
The question of the moment is how much momentum the green movement may have lost as a result of the economic slump. When the economy headed south, businesses began curtailing even essential expenditures—travel, training, inventory investment, hiring, and more. Executives, understandably, haven't had the stomach for initiatives—of any kind—with long payback periods. Any project lengthy enough to warrant talking about net present value or discounted cash flow has had virtually no chance of seeing the light of day.
Guess what—green initiatives tend not to be quick fixes and frequently take years and years to deliver payback. And quantum leaps are in short supply. Take solar power, for example. High cost is admittedly solar power's dark side. Although recent advances in technology have led to the development of a thin-film panel that costs 40 percent less than the popular silicon panels, there's a catch. The thin-film panels generate only half as much energy as their silicon counterparts, so the net gain is not yet exactly a breakthrough and won't change the long-term payback equation by all that much.
Maybe volume and some level of critical mass could change the cost equation a bit more. But it seems to us that the efficiency of panels of any type ought to be a focus area for improvement. The newer thin-film products convert anywhere from 10 to 14 percent of sunlight into electricity; that compares with 19 percent for silicon.
That vision thing
In the short term, however, it appears that when it comes to eco-initiatives, the focus will remain squarely on programs that offer a speedy payback. A 2009 survey of DC Velocity's readers showed a clear bias toward short-term, tried-and-true measures that deliver nearly immediate savings—notably in energy costs (see "into the green"). Bigger, longer-horizon efforts, especially those with less-certain paybacks, barely made the list.
We wish that companies and their leaders would avoid knee-jerk reactions in periods of transient difficulty. Somebody's going to break a jaw that way. We wish that every business leader had the courage and the vision to take the long view and do the right thing(s).
But sadly, only a few do. And the pressure to make a profit—and make it now—is immense. Not to mention how important it is in publicly held companies to not disappoint The Street. So, with a little luck, enough organizations will pursue the simple, short-term things that look like they'll keep the boss out of trouble in enough cases to make a bit of a difference.
As economic conditions improve, maybe there's a fighting chance of getting the really important green infrastructure bits back on the table.
Here's a harsh reality, and we can look to Europe for a preview of coming attractions. The dad-gum gummint isn't going to care that 2008/2009 were tough years. Our dedicated public servants are likely to become enthralled by the promise of green and mandate what we, as organizations, have got to do and when. Think the government won't be here soon? Surprise! The administration's secretary of labor has made the creation of green jobs a high priority.
Seems to us that the prudent management tactic for today is pre-emption. Doing everything we can—now—to make/save real money. Setting the wheels in motion for the big, but longer-term, projects that will make life both greener and more profitable into the coming decades. Our guess is that those who set strong and positive green agendas now are going to be way ahead of those who close their eyes and hope that the mandates are never issued.
When Washington sets the agenda and timeline, the relevance and payback for specific companies are typically not in the equation. But there'll be no forgiveness—and maybe even crippling penalties—for those who don't comply.
Staying in the game
So, it's not as easy being green as it might have been when companies were more profitable, but the stakes in being—or not being—green have grown. And those are the stakes we've got to deal with if we're going to be in the game.
Even if you're not quite ready to reconfigure your distribution network, or build a new green DC from scratch, or explore biofuels and fuel cell technology, there are things you can do—or plan for. Remember, though, simply swapping out light bulbs—while a good thing—won't get you remotely close to where you need to go in a new, green world.
Like it or not, we've got to get real about our efforts to green up our act, including initiatives that might be slow to produce results but can radically change the resource consumption equation. Using alternative fuel sources—and less of them—comes to mind. Extending preliminary advances into arenas with potentially huge payoffs—e.g., over-the-road trucking—does as well.
The way that shippers and carriers classify loads of less than truckload (LTL) freight to determine delivery rates is set to change in 2025 for the first time in decades, introducing a new approach that is designed to support more standardized practices.
But the transition may take some time. Businesses throughout the logistics sector will be affected by the transition, since the NMFC is a critical tool for setting prices that is used daily by transportation providers, trucking fleets, third party logistics providers (3PLs), and freight brokers.
For example, the current system creates 18 classes of freight that are identified by numbers from 50 to 500, according to a blog post by Nolan Transportation Group (NTG). Lower classed freight costs less to ship, ranging from basic goods that fit on a standard shrink-wrapped 4X4 pallet (class 50) up to highly valuable or delicate items such as bags of gold dust or boxes of ping pong balls (class 500).
In the future, that system will be streamlined by four new features, NMFTA said:
standardized density scale for LTL freight with no handling, stowability, and liability issues,
unique identifiers for freight with special handling, stowability, or liability needs,
condensed and modernized commodity listings, and
improved usability of the ClassIT classification tool.
The new changes look to simplify the classification by grouping similar articles together and assigning most classes based solely on density – the most measurable of the four characteristics, he said. Exceptions will be handled separately, adding one or more of the three remaining characteristics in cases where density alone is not adequate to determine an accurate class.
When the updates roll out in 2025, many shippers will see shifts in the LTL prices they pay to move loads, because the way their freight is classified – and subsequently billed – might change. To cope with those changes, he said it’s important for shippers to review their pricing agreements and be prepared for these adjustments, while carriers should prepare to manage customer relationships through the transition.
“This shift is a big deal for the LTL industry, and it’s going to require a lot of work upfront,” Davis said. “But ultimately, simplifying the classification system should help reduce friction between shippers and carriers. We want to make the process as straightforward as possible, eliminate unnecessary disputes, and make the system more intuitive for everyone. It’s a change that’s long overdue, and while there might be challenges in the short term, I believe it will benefit the industry in the long run.
Business leaders in the manufacturing and transportation sectors will increasingly turn to technology in 2025 to adapt to developments in a tricky economic environment, according to a report from Forrester.
That approach is needed because companies in asset-intensive industries like manufacturing and transportation quickly feel the pain when energy prices rise, raw materials are harder to access, or borrowing money for capital projects becomes more expensive, according to researcher Paul Miller, vice president and principal analyst at Forrester.
And all of those conditions arose in 2024, forcing leaders to focus even more than usual on managing costs and improving efficiency. Forrester’s latest forecast doesn’t anticipate any dramatic improvement in the global macroeconomic situation in 2025, but it does anticipate several ways that companies will adapt.
For 2025, Forrester predicts that:
over 25% of big last-mile service and delivery fleets in Europe will be electric. Across the continent, parcel delivery firms, utility companies, and local governments operating large fleets of small vans over relatively short distances see electrification as an opportunity to manage costs while lowering carbon emissions.
less than 5% of the robots entering factories and warehouses will walk. While industry coverage often focuses on two-legged robots, Forrester says the compelling use cases for those legs are less common — or obvious — than supporters suggest. The report says that those robots have a wow factor, but they may not have the best form factor for addressing industry’s dull, dirty, and dangerous tasks.
carmakers will make significant cuts to their digital divisions, admitting defeat after the industry invested billions of dollars in recent years to build the capability to design the connected and digital features installed in modern vehicles. Instead, the future of mobility will be underpinned by ecosystems of various technology providers, not necessarily reliant on the same large automaker that made the car itself.
Regular online readers of DC Velocity and Supply Chain Xchange have probably noticed something new during the past few weeks. Our team has been working for months to produce shiny new websites that allow you to find the supply chain news and stories you need more easily.
It is always good for a media brand to undergo a refresh every once in a while. We certainly are not alone in retooling our websites; most of you likely go through that rather complex process every few years. But this was more than just your average refresh. We did it to take advantage of the most recent developments in artificial intelligence (AI).
Most of the AI work will take place behind the scenes. We will not, for instance, use AI to generate our stories. Those will still be written by our award-winning editorial team (I realize I’m biased, but I believe them to be the best in the business). Instead, we will be applying AI to things like graphics, search functions, and prioritizing relevant stories to make it easier for you to find the information you need along with related content.
We have also redesigned the websites’ layouts to make it quick and easy to find articles on specific topics. For example, content on DC Velocity’s new site is divided into five categories: material handling, robotics, transportation, technology, and supply chain services. We also offer a robust video section, including case histories, webcasts, and executive interviews, plus our weekly podcasts.
Over on the Supply Chain Xchange site, we have organized articles into categories that align with the traditional five phases of supply chain management: plan, procure, produce, move, and store. Plus, we added a “tech” category just to round it off. You can also find links to our videos, newsletters, podcasts, webcasts, blogs, and much more on the site.
Our mobile-app users will also notice some enhancements. An increasing number of you are receiving your daily supply chain news on your phones and tablets, so we have revamped our sites for optimal performance on those devices. For instance, you’ll find that related stories will appear right after the article you’re reading in case you want to delve further into the topic.
However you view us, you will find snappier headlines, more graphics and illustrations, and sites that are easier to navigate.
I would personally like to thank our management, IT department, and editors for their work in making this transition a reality. In our more than 20 years as a media company, this is our largest expansion into digital yet.
We hope you enjoy the experience.
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In this chart, the red and green bars represent Trucking Conditions Index for 2024. The blue line represents the Trucking Conditions Index for 2023. The index shows that while business conditions for trucking companies improved in August of 2024 versus July of 2024, they are still overall negative.
FTR’s Trucking Conditions Index improved in August to -1.39 from the reading of -5.59 in July. The Bloomington, Indiana-based firm forecasts that its TCI readings will remain mostly negative-to-neutral through the beginning of 2025.
“Trucking is en route to more favorable conditions next year, but the road remains bumpy as both freight volume and capacity utilization are still soft, keeping rates weak. Our forecasts continue to show the truck freight market starting to favor carriers modestly before the second quarter of next year,” Avery Vise, FTR’s vice president of trucking, said in a release.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index, a positive score represents good, optimistic conditions, and a negative score shows the opposite.
A coalition of truckers is applauding the latest round of $30 million in federal funding to address what they call a “national truck parking crisis,” created when drivers face an imperative to pull over and stop when they cap out their hours of service, yet can seldom find a safe spot for their vehicle.
According to the White House, a total of 44 projects were selected in this round of funding, including projects that improve safety, mobility, and economic competitiveness, constructing major bridges, expanding port capacity, and redesigning interchanges. The money is the latest in a series of large infrastructure investments that have included nearly $12.8 billion in funding through the INFRA and Mega programs for 140 projects across 42 states, Washington D.C., and Puerto Rico. The money funds: 35 bridge projects, 18 port projects, 20 rail projects, and 85 highway improvement projects.
In a statement, the Owner-Operator Independent Drivers Association (OOIDA) said the federal funds would make a big difference in driver safety and transportation networks.
"Lack of safe truck parking has been a top concern of truckers for decades and as a truck driver, I can tell you firsthand that when truckers don’t have a safe place to park, we are put in a no-win situation. We must either continue to drive while fatigued or out of legal driving time, or park in an undesignated and unsafe location like the side of the road or abandoned lot,” OOIDA President Todd Spencer said in a release. “It forces truck drivers to make a choice between safety and following federal Hours-of-Service rules. OOIDA and the 150,000 small business truckers we represent thank Secretary Buttigieg and the Department for their increased focus on resolving an issue that has plagued our industry for decades.”