David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
Water, water everywhere, but no place to put it all.
With apologies to Samuel Taylor Coleridge, that was the situation Hassia found itself in.
Hassia, the fourth-largest beverage manufacturer in Germany, was experiencing some of the symptoms common to fast-growing businesses. As a result of an increase in both its stock-keeping unit (SKU) base and its sales volume, the company, which distributes premium bottled water as well as juice and soft drinks, found itself dealing with a serious space crunch at its Bad Vilbel distribution center, a 323,000-square-foot facility near Frankfurt.
Adding to the problem was a surge in consumer demand for one-way bottles, which require more storage space than returnables. "One-way bottles are made from thinner plastic and do not stack well compared to the crates that are used for returnable bottles," explains Stefan Marhold, warehouse manager at the Bad Vilbel site. "That requires us to move to racking instead of floor stacking." One of the company's chief concerns was that conventional racking wouldn't allow for the same storage density that could be achieved with floor stacking, he adds.
At the same time, the company was feeling pressure on another front—rising transportation costs. In addition to the Bad Vilbel facility, Hassia was operating a second warehouse and production facility about 12 miles away in Rosbach, where it has a spring water source. Because neither warehouse was big enough to accommodate output from both production plants, the company was constantly shuttling products from one building to the other—a practice that was growing increasingly expensive.
With the pressure mounting, Hassia had limited options for addressing its capacity crunch. The company wanted to remain in its current distribution facility in Bad Vilbel, which is located just half a block from one of its bottling sites. Though separate, the two buildings are ingeniously connected via an underground tunnel that runs beneath an adjacent apartment building. Inside the tunnel is a 360-foot-long monorail that carries goods from the plant to the DC.
While expansion might seem the logical solution, that wasn't workable in this case. The facility is surrounded by other properties, making outward expansion impractical. Options for expanding upward were pretty limited as well. Because the facility is located in a residential area, the height of the building could not exceed 20 meters (about 66 feet).
In short, Hassia's only alternative was to find a way to make the most of the space it did have—that is, by creating denser storage. Knowing the solution would likely involve automated equipment, Hassia turned to Krones, a Neutraubling, Germany-based systems designer and integrator that specializes in the unique demands of beverage and food distribution. Krones had supplied much of the company's bottle filling equipment, so Hassia felt confident in contracting with the company for the new project.
System overhaul
The solution Krones came up with went far beyond just a retool of the storage area. It also involved a complete redesign of the facility's work flow and included a new high-bay warehouse, a new case-picking area, and software that runs in tandem with the company's existing ERP system to coordinate the activity. It also incorporated a new truck loading area, with docks that would allow trucks to back in for rear loading. The latter move was a response to increasing requests from Hassia's customers to load trucks from the rear rather than the side, as is more commonly done in Europe.
Designed to maximize storage density, the high-bay automated warehouse features storage lanes capable of holding 39,000 pallets in a footprint of only 8,600 square meters (92,500 square feet). The system is eight levels high and consists of four aisles. But unlike traditional automated storage and retrieval systems (AS/RS), where cranes operate the entire height of the aisles, the system designed by Krones stacks four cranes within the eight levels of each aisle. Each crane serves just two levels and runs the length of the aisle, for a total of 16 cranes overall. The use of the additional cranes allows for faster input and retrieval from the system than could be achieved in a traditional AS/RS.
To minimize disruption to operations—several sections of the warehouse had to be demolished to make way for the high-bay addition—the project was conducted in four phases, beginning in the fall of 2008 and completed in April 2009. About 80 percent of product was diverted temporarily to Rosbach during construction, while the remaining 20 percent was processed within the sections of the warehouse that were still intact.
"The [project required] a lot of coordination between everyone involved, as we could not shut down the warehouse operations completely," says Marhold.
Smooth flow
Today, beverages bottled at the nearby plant are placed on pallets and transported via monorail to the warehouse. Once they arrive, a lift raises them to a pallet conveyor for transport to the AS/RS. Additional lifts hoist the pallets to transfer stations served by one of the cranes. The crane then moves front to back down the aisle until it comes to a channel. Unlike conventional AS/RS racks, which are one pallet deep, these channels hold 10 pallets apiece.
A transfer shuttle attached to the crane next moves beneath the load and lifts it off the crane carrier. It then travels down the desired channel perpendicular to the aisle until it reaches the last available space, where it deposits the pallet. The transfer shuttle then returns to the crane. Typically, only one SKU resides in each lane to avoid the need to move pallets to get to a trapped SKU.
The crane then either collects another inbound load or gathers a pallet needed to fill orders. In total, the system handles 350 pallets an hour—typically, 250 an hour from the nearby production plant and another 100 or so that arrive by truck from other production facilities.
Products that will ship as full pallets are brought to the lifts and lowered to pallet conveyors for transport to outbound dispatch areas. Pallets needed to replenish case picking are sent to the new picking area designed by Krones. The picking area consists of three lanes, each serviced by a shuttle crane. Each crane can serve two levels of racking, running between the two rows of racks.
Most products are placed into the pick faces on the bottom levels of the lanes (there are six pick faces in total). Each lane has gravity conveyor to move items to the front of the rack for easy picking. Fast-moving products designated for reserve storage are deposited in the top layer of the rack by the shuttle crane. When a pick slot below empties out, the crane moves a pallet from the top level to the bottom level to replenish that slot.
At any given time, five to 10 associates are working in the picking area, selecting cases according to preprinted labels. They place the cases onto mixed-SKU pallets maneuvered with pallet jacks. As each pallet is completed, it is taken to a drop-off point for the conveyor system.
The pallet is next transported to either the side-loading dispatch area or the newly built rear loading area, although on occasion, goods slated for later transport may be returned to the AS/RS for temporary storage. In the side loading area, pallets are diverted to pickup lanes, where they await loading onto a truck. Pallets are retrieved as needed by lift truck drivers, who load them into trucks according to instructions displayed on a diagram on their vehicle-mounted computers.
Clear direction
As for the results of the project, the retrofit has allowed Hassia to achieve its objective of consolidating products from both Bad Vilbel and Rosbach into the new AS/RS. Coincidentally, the company was also able to close the production facility in Rosbach and instead pipe the water from the Rosbach spring to the Bad Vilbel production plant.
Labor has also been reduced, and productivity is up. Customer service has also improved. A truck can pull into the dock, drop off its load of returnable bottles, pick up a new load, and be on its way within 45 minutes.
"We achieved our goals, including the speed of loading and reliability to [meet] our customers' needs," says Marhold. "It was a very tight relationship working together. Krones had very smart ideas that they brought in, and we also had ideas. It was a very interactive approach. We would never have met the timeline we had without that coordination."
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.