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.
What would happen if the nation went to a 97,000 pound gross vehicle weight limit on its interstate highways?
MillerCoors, the giant Chicago-based brewer, estimates it could cut by 25 percent the number of trucks it deploys each week to move products from its eight breweries to its six distribution centers. That would translate into 1.15 million fewer vehicle miles traveled each week, the company said. Based on a diesel fuel price of $4.50 a gallon, Miller estimates it could cut its weekly fuel bill by nearly $181,000 and reduce weekly carbon emissions by more than 4.5 million pounds.
Kraft Foods, the snack foods behemoth based in Northfield, Ill., says that, in a typical year, it would be able to move the same product with 66,000 fewer loads, resulting in a 33 million drop in vehicle miles driven, a savings of 6.6 million gallons of diesel fuel, and a 73,000-ton reduction in Kraft's carbon emissions.
Campbell Soup Co., the iconic Camden, N.J.-based canned goods producer, said it could cut its annual loads by 41,000, reducing vehicle miles driven by 23 million, saving nearly 4 million gallons of fuel, and eliminating about 39,000 tons of carbon from the atmosphere.
International Paper Co., the Memphis, Tenn.-based paper products titan, said it would carry the same amount of tonnage per year on 68,000 fewer truckloads, achieve a 27-percent annual productivity gain per truck, and shave up to 20 percent a year from its truck freight bill.
All compelling numbers, to be sure. For now, however, it is just data on fact sheets. Arguably the best shot to date to increase both the weight and size limits for big trucks plying the nation's highways has vanished into the legislative ether, helped into oblivion by a trade group whose members move these companies' goods for a living.
BITTER BLOW
For shippers that have long fought to effect what would have been the first legislative change to truck weights and size limits in 30 years, it was a bitter and expensive blow. By one estimate, though impossible to quantify, upping the per-vehicle weight limit to 97,000 pounds from 80,000 pounds would have yielded shippers between $32 billion and $37 billion a year in cost savings and productivity improvements.
In early February, Rep. John L. Mica (R-Fla.), chair of the House Transportation and Infrastructure Committee, personally inserted language in a first draft of federal transport reauthorization legislation that would have allowed states to raise the weight limit for fully loaded trucks traveling on their portion of the interstate highway system. The vehicles would have to be equipped with a sixth axle to improve braking and to better distribute the load's weight in order to minimize road wear. Currently, six states—five of them located in New England—allow the heavier vehicles on their interstate highways.
The language would also have allowed the nationwide use of twin trailers each with 33-foot lengths, and would have permitted the deployment of triple-trailers in states that currently don't have them. The longer doubles are allowed in 22 states, and the triples in 16 states.
Shipper and business groups that have tried unsuccessfully for years to convince Congress to raise maximum gross vehicle weights were thrilled by the news. Unlike other bills that have been introduced only to quickly wither on the legislative vine, the initiative was being pushed by the head of the House committee that oversees transport programs, and it was included in the multiyear highway bill rather than standing legislatively naked on its own.
DASHED HOPES
However, even this version was not to be. Almost immediately, and expectedly, the Association of American Railroads (AAR) and the association representing owner-operator drivers came out in opposition. The railroads argued that heavier and longer trucks would jeopardize public safety and cause road damage that would put taxpayers on the hook for repairs.
The owner-operators group maintained that the heavier trucks would worsen an already-deteriorating infrastructure, and that longer trucks would put drivers and motorists at risk because of their limited maneuverability. The group also said there was no evidence that allowing bigger trucks on the highways would lead to an overall reduction in rigs and trailers.
Supporters of the Mica language knew the tide had turned against them when the full committee then called for a three-year feasibility study by the Transportation Research Board into the issue. But the death knell came on Feb. 13 from an unexpected source, when the American Trucking Associations (ATA) and the AAR penned an extraordinary joint letter calling on House members to move forward on a highway bill without the controversial language.
ATA Chairman Bill Graves made it plain in the letter that the group was urging the abandonment of the provision in order to maintain harmony among the many players with much at stake in the transport reauthorization process.
"What this agreement allows us to do is take one potentially controversial issue off the table in the interest of moving the legislation, which is nearly 30 months overdue, forward," the joint letter said.
As early winter turns into late spring, it is clear ATA's position hasn't changed. "Is it an important issue? Yes. Can it be the only issue? Unfortunately, no," Boyd Stephenson, ATA's manager for safety and security operations, said May 3 at an international trade conference in Norfolk.
Shippers' groups have come to realize what they probably already suspected: that the trucking industry as a whole pays lip service to the issue, even though a honcho like David S. Congdon, president and CEO of Thomasville, N.C.-based less-than-truckload carrier Old Dominion Freight Line Inc., has gone on record saying an increase in size and weight limits would represent a "quantum leap" in supply chain productivity.
TEMPORARY SETBACK?
For now, and perhaps for the foreseeable future, U.S. shippers will have to be content with the status quo, even though their two border partners, Mexico and Canada, have weight limits of 106,000 and 95,000 pounds, respectively. They are also left to ponder what remedies will be available to deal with the consequences of a doubling or tripling of U.S. truck volumes by 2025 on an infrastructure where truck traffic is already growing 11 times faster than road capacity.
John Runyan, executive director of the Coalition for Transportation Productivity, which has lobbied extensively to increase truck size and weight limits, said the recent legislative setbacks are temporary and the joint ATA-AAR letter didn't make anything better or worse for the group's members.
Runyan said, however, that he would have advised ATA officials not to sign the letter.
"The days of a carrier group speaking on behalf of American shippers are over," he said. "They simply may not be aware of that yet."
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.”
The three companies say the deal will allow clients to both define ideal set-ups for new warehouses and to continuously enhance existing facilities with Mega, an Nvidia Omniverse blueprint for large-scale industrial digital twins. The strategy includes a digital twin powered by physical AI – AI models that embody principles and qualities of the physical world – to improve the performance of intelligent warehouses that operate with automated forklifts, smart cameras and automation and robotics solutions.
The partners’ approach will take advantage of digital twins to plan warehouses and train robots, they said. “Future warehouses will function like massive autonomous robots, orchestrating fleets of robots within them,” Jensen Huang, founder and CEO of Nvidia, said in a release. “By integrating Omniverse and Mega into their solutions, Kion and Accenture can dramatically accelerate the development of industrial AI and autonomy for the world’s distribution and logistics ecosystem.”
Kion said it will use Nvidia’s technology to provide digital twins of warehouses that allows facility operators to design the most efficient and safe warehouse configuration without interrupting operations for testing. That includes optimizing the number of robots, workers, and automation equipment. The digital twin provides a testing ground for all aspects of warehouse operations, including facility layouts, the behavior of robot fleets, and the optimal number of workers and intelligent vehicles, the company said.
In that approach, the digital twin doesn’t stop at simulating and testing configurations, but it also trains the warehouse robots to handle changing conditions such as demand, inventory fluctuation, and layout changes. Integrated with Kion’s warehouse management software (WMS), the digital twin assigns tasks like moving goods from buffer zones to storage locations to virtual robots. And powered by advanced AI, the virtual robots plan, execute, and refine these tasks in a continuous loop, simulating and ultimately optimizing real-world operations with infinite scenarios, Kion said.