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.
The air cargo supply chain's effort to screen all domestic cargo moving in the bellies of passenger planes comes to a head Aug. 1, when the industry will be required to show that each piece of cargo shipped in plane bellies is inspected before it is placed aboard an aircraft.
The last step will likely be the most difficult.
On May 1, the Transportation Security Administration, the federal agency in charge of managing the cargo security program, announced that the industry had met a key milestone by screening 75 percent of all belly cargo moving in U.S. commerce.
However, the biggest challenge will be with the remaining 25 percent, most of which will involve multiple pieces shrink-wrapped in pallets or loaded into containers destined for the nation's busiest airports. By law, cargo must be screened at the "piece level," either by the shipper, the freight forwarder, or the airline, before it is allowed in the belly of an airliner. The piece-level screening means, for example, that a container must be stripped down and each piece screened before the shipment can be "rebuilt."
Shipper, carrier, and freight forwarder executives have warned of shipment delays in the days following the Aug. 1 deadline, especially if airlines are responsible for screening a large proportion of cargo before it is boarded. Dave Brooks, who heads cargo for American Airlines, said in a May 26 webinar that carriers might not even have the airport space needed to inspect a cascade of freight in the event the bulk of the screening burden falls on their shoulders.
Brooks said American will be "dramatically increasing our fees" for cargo if it is required to screen from Aug. 1 on. He wouldn't be more specific on the extent of the increases.
In an effort to push the screening responsibility upstream, Congress created the Certified Cargo Screening Program (CCSP), a voluntary initiative that authorizes shippers and freight forwarders to screen and inspect cargo before it reaches the airline. The CCSP's goal is to spread the screening burden equally across the supply chain, and to allow shippers to be in control of opening and inspecting their own goods rather than having someone do it for them, thus risking damage to high-value consignments like pharmaceuticals and medical devices.
Another benefit of the CCSP is that it reduces the risk of shipment delays at airports because the carrier doesn't have to delay the cargo in order to inspect it, according to participants in the May 26 webinar, which was sponsored by American.
About 500 freight forwarders are enrolled in CCSP, making them by far the largest group of program participants. By contrast, shipper involvement has been weak, though it is expected to increase as the Aug. 1 deadline approaches.
Brandon Fried, executive director of the Airforwarders Association, said many shippers believe freight forwarders should be responsible for the cargo screening function as part of the shipper-forwarder business relationship. "Shippers have basically said that this is the forwarders' problem," he said.
Ken Konigsmark, senior manager, supply chain & aviation security compliance for the Boeing Co., said many shippers—especially manufacturers of high-value, perishable products—already have in-house screening programs in place, so there will be little additional cost in being CCSP-certified.
Konigsmark said shippers will need to examine the "opportunity costs" of not inspecting their own goods, noting that shipment delays and supply chain disruptions might ensue if someone has to do it for them.
"To the supply chain professional, time is as important as cost," he said.
However, that trend is counterbalanced by economic uncertainty driven by geopolitics, which is prompting many companies to diversity their supply chains, Dun & Bradstreet said in its “Q4 2024 Global Business Optimism Insights” report, which was based on research conducted during the third quarter.
“While overall global business optimism has increased and inflation has abated, it’s important to recognize that geopolitics contribute to economic uncertainty,” Neeraj Sahai, president of Dun & Bradstreet International, said in a release. “Industry-specific regulatory risks and more stringent data requirements have emerged as the top concerns among a third of respondents. To mitigate these risks, businesses are considering diversifying their supply chains and markets to manage regulatory risk.”
According to the report, nearly four in five businesses are expressing increased optimism in domestic and export orders, capital expenditures, and financial risk due to a combination of easing financial pressures, shifts in monetary policies, robust regulatory frameworks, and higher participation in sustainability initiatives.
U.S. businesses recorded a nearly 9% rise in optimism, aided by falling inflation and expectations of further rate cuts. Similarly, business optimism in the U.K. and Spain showed notable recoveries as their respective central banks initiated monetary easing, rising by 13% and 9%, respectively. Emerging economies, such as Argentina and India, saw jumps in optimism levels due to declining inflation and increased domestic demand respectively.
"Businesses are increasingly confident as borrowing costs decline, boosting optimism for higher sales, stronger exports, and reduced financial risks," Arun Singh, Global Chief Economist at Dun & Bradstreet, said. "This confidence is driving capital investments, with easing supply chain pressures supporting growth in the year's final quarter."
The firms’ “GEP Global Supply Chain Volatility Index” tracks demand conditions, shortages, transportation costs, inventories, and backlogs based on a monthly survey of 27,000 businesses.
The rise in underutilized vendor capacity was driven by a deterioration in global demand. Factory purchasing activity was at its weakest in the year-to-date, with procurement trends in all major continents worsening in September and signaling gloomier prospects for economies heading into Q4, the report said.
According to the report, the slowing economy was seen across the major regions:
North America factory purchasing activity deteriorates more quickly in September, with demand at its weakest year-to-date, signaling a quickly slowing U.S. economy
Factory procurement activity in China fell for a third straight month, and devastation from Typhoon Yagi hit vendors feeding Southeast Asian markets like Vietnam
Europe's industrial recession deepens, leading to an even larger increase in supplier spare capacity
"September is the fourth straight month of declining demand and the third month running that the world's supply chains have spare capacity, as manufacturing becomes an increasing drag on the major economies," Jagadish Turimella, president of GEP, said in a release. "With the potential of a widening war in the Middle East impacting oil, and the possibility of more tariffs and trade barriers in the new year, manufacturers should prioritize agility and resilience in their procurement and supply chains."
The third-party logistics service provider (3PL) Total Distribution Inc. (TDI) is continuing to grow through acquisitions, announcing today that it has bought REO Processing & REO Logistics.
Terms of the deal were not disclosed, but REO Processing & REO Logistics is headquartered in West Virginia with 10 facilities across West Virginia in Parkersburg, Vienna, Huntington, Kenova, and Nitro as well as in Atlanta, GA.
Headquartered in Canton, Ohio, TDI is a wholly owned subsidiary of Peoples Services Inc. (PSI). The combined TDI and PSI businesses operate over 12 million square feet of contract and public warehouse space located in 65 facilities in eight states including Michigan, Ohio, West Virginia, New Jersey, Virginia, North Carolina, South Carolina, and Florida.
As an asset-based 3PL, the PSI network offers a range of specialized material handling and storage services including many value-added activities such as drumming, milling, tolling, packaging, kitting, inventory management, transloading, cross docking, transportation, and brokerage services.
This latest move follows a series of other acquisitions, as TDI bought D+S Distribution, Inc. and Integrated Logistics Services Inc. in May, and Swafford Trucking, Inc., Swafford Warehousing, Inc., and Swafford Transportation, Inc. in February. The company also bought Presidential Express Trucking, Inc. and Presidential Express Warehousing & Distribution, Inc. in 2023.
The freight equipment original equipment manufacturer (OEM) Wabash will use a federal grant to launch a project with the University of Delaware that will save electricity by incorporating lightweight solar panels into refrigerated trailers and truck bodies, the Indiana company said today.
The three-year project, set to begin next year in partnership with the University of Delaware’s Center for Composite Materials, is intended to play a pivotal role in making zero-emission mid-mile transportation a commercially viable option, Wabash said.
Those materials are important because batteries powering heavy trucks can weigh between 5,000 to 10,000 pounds, often limiting the payload capacity and drawing significant energy from the electrical grid when charging, the partners said.
“This project has the potential to revolutionize refrigerated transport by reducing reliance on the electrical grid and minimizing overall emissions,” Michael Bodey, director of technology discovery and innovation at Wabash, said in a release. “While many of today’s zero-emission products focus on tailpipe emissions, they still draw power from energy grids, which often rely on non-renewable sources. Our goal is to offer a truly green solution—a well-to-wheel approach—that accounts for the full life cycle of energy consumption, from production to usage.”
Pharmaceutical groups are breathing a sigh of relief today after federal regulators granted many of them more time to come into compliance with strict track and trace rules required by the Drug Supply Chain Security Act (DSCSA).
The regulation was initially scheduled to be required by 2023, but that has been delayed due to the steep logistics and IT challenges of managing the reams of data that must be generated, stored, and retrieved. The most recent target update was November 27, but industry experts say many businesses would probably have missed that date, too.
Facing that reality, the FDA yesterday again delayed that deadline until next year, setting new deadlines for various trading partners: Manufacturers and Repackagers have until May 27, 2025; Wholesale Distributors have until August 27, 2025; and Dispensers with 26 or more full-time employees have until November 27, 2025.
Pharmaceutical businesses quickly cheered the move. “HDA and our pharmaceutical distributor members applaud the FDA’s decision to grant an exemption for the DSCSA’s enhanced drug distribution security (EDDS) requirements for eligible trading partners,” said Chester “Chip” Davis, Jr., president and CEO of the Healthcare Distribution Alliance (HDA), which is an industry group representing primary pharmaceutical distributors, who connect the nation’s pharmaceutical manufacturers with pharmacies, hospitals, long-term care facilities, and clinics.
“While many in the supply chain have made significant progress throughout the stabilization period, some are still struggling to establish data connections. Given the interdependency of the pharmaceutical supply chain, FDA’s phased-in approach will allow supply chain partners to better align their data exchange processes to ultimately achieve full implementation and also acknowledges the progress made thus far,” Davis said.
“As we continue to make progress toward full DSCSA implementation, HDA and our distributor members will remain engaged with our public- and private-sector partners to share information and education, as we move toward our shared goal: helping patients and providers safely access the medicines they need.”