Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
It has often been noted here that while the contrarian approach to business entails many risks, it is sometimes the clearest path to success. The way companies responded to the Great Recession is a case in point.
As the global economy plunged over the figurative cliff in September 2008, many businesses hunkered down in survival mode, cutting spending, hoarding cash, and generally keeping their heads down. That strategy met with mixed results. While some weathered the storm and are now regaining their footing, others weren't so lucky. The more they slashed costs, the worse things got, eventually forcing them to shut down altogether.
Not everyone ran for cover when the storm hit, however. A few contrarians decided to brave the elements and treat the downturn as a business opportunity. While others throttled back on investment, these companies did just the opposite. They invested aggressively in facilities, systems, and equipment to ensure they'd be well-positioned for growth when the economic winds inevitably shifted. One such company is Blackman Plumbing Supplies in Bayport, N.Y.
During 2009, in the teeth of the recession, Blackman, a wholesale plumbing distributor serving the New York metro area, embarked on a bold two-year investment initiative. In the first year alone, it upgraded its enterprise resource planning (ERP) software, relocated its distribution operations to a building with double the capacity of the previous site, and installed a new warehouse management system (WMS).
That was three major projects in one year—a lot to tackle in boom times, and all the more impressive given the chaos taking place in the market. But the plumbing supplier never looked back. "Without change there would be no progress," said Dave Connelly, Blackman's director of purchasing, in a press release detailing the initiative.
And Blackman wasn't done yet. As the calendar turned to 2010, the company marched forward with further investments. In addition to completing the largest acquisition in its 89-year history, Blackman revamped its delivery fleet operations and installed a new transportation management system (TMS).
As a result, the company today has both the technologies and processes in place to meet even its most aggressive customer service goals, says René Jones of Burbank, Calif.-based Total Logistics Solutions Inc., a firm Blackman engaged to help guide it through the transition. Material is received and put away within 48 hours of delivery by the vendor. Orders are now picked with radio-frequency devices. And with the system's command center, the movement of every order can be tracked throughout the facility in real time. On top of that, every delivery truck is monitored through a GPS system so the customer knows exactly when its order will arrive.
As for what all this means for Blackman's competitive position in the market, consider the following: The DC's error rate is less than 5 percent in an industry where the standard is more than double that. Blackman's order fill rate exceeds 97 percent (the industry average is between 94 and 97 percent). And the company can now tell customers with full confidence that if they place an order by 5 p.m., they'll have their supplies by 7 a.m. the next day.
What will 2011 hold for Blackman? Instead of coasting on its achievements, the supplier plans to continue on its course of improvements. "Just because the year changed doesn't mean it's time to stop progressing forward," said Stephen Davanzo, the company distribution center manager, in the press release. "One more year means a new set of challenges that must be overcome!"
Spoken like a businessperson with no fear of swimming upstream in turbulent waters.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
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.
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.