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.
It's not perfect. It could have been better. It could have been worse.
That's the consensus among stakeholders of the nation's infrastructure after President Obama last Friday signed into law
a
27-month, $105-billion bill that, for the first time since 2005, provides long-term funding for U.S. surface transportation projects.
The bill, which ends nearly three years of interim stopgap measures to fund the nation's transport system, is seen as a good start towards putting
the network on solid footing. But industry experts say there is still work to be done, and freight interests will be disappointed if the new law becomes
the end of the story and not a means to a satisfactory end.
In the here-and-now, however, there is finally a multi-year transport funding law on the books. And for freight advocates who have struggled for years
to get Congress' attention, it ended up being a productive process.
The Coalition for America's Gateways and Trade Corridors (CAGTC), a group of 60 public and private organizations dedicated to promoting intermodal
transportation, said the law places "unprecedented emphasis on freight movement and its importance to the United States economy."
"[The bill] shows that Congress has been listening when we've made our case for supporting the systems that move our nation's goods," said Coalition Chairman
Mort Downey. "We see this as a good platform upon which future steps can be taken to further improve this critical network and its infrastructure."
Janet F. Kavinoky,
executive director, transportation & infrastructure, of the U.S. Chamber of Commerce, said the law is a milestone for advancing the role of freight in the
national infrastructure discussion. Kavinoky, who for the past three years has taken a somewhat skeptical view of the process, said that while the bill isn't
a cure-all, the "increased freight focus is welcome progress" given budgetary constraints and the election-year overhang.
THE ROLE OF THE STATES
The law establishes a national freight policy and requires the Department of Transportation (DOT) to develop a national freight strategic
plan and a "primary freight network" out of 27,000 miles of existing roadways designated as most critical to the movement of goods.
It also gives states financial incentives to develop freight-specific projects by increasing the federal government's role in paying for them.
Under the new law, if the physical path of a state's freight project is located on the interstate highway system, federal funding for the project increases
to 95 percent from 90 percent. For projects not located on the interstate system, Washington's share of the payment rises to 90 percent from 80 percent.
The law does not contain a separate freight section or program that mandates federal funding. Rather, it leaves it up to the states to make the case to the DOT that a proposal has enough freight-generating potential to justify funding.
Freight-specific projects must meet certain eligibility standards, but the criteria are fairly broad. Eligible projects include railway-highway grade
separation; geometric improvements to interchanges and ramps; truck-only lanes; improvements to intermodal connectors; and programs to ease truck bottlenecks,
among others.
Leslie Blakey, CAGTC's executive director, said the provisions of the law incorporating more state involvement in freight will build a "substantial
bridge to a comprehensive multi-modal freight program" that will be created in future infrastructure re-authorization cycles.
Blakey said few states today have the capabilities to plan and analyze initiatives that support the movement of goods. The bill provides the financial
incentives for states to elevate freight's visibility and, ultimately, feed state projects into a national freight network, she said.
James H. Burnley IV, who served as Transportation Secretary in the Reagan Administration and today heads the transportation practice at Washington law firm
Venable LLP, said in an e-mail that the bill "will enhance freight movements in the years to come."
Burnley said the legislation streamlines the multi-year process for project approvals, and exempts from a full environmental review requests to
perform both routine and emergency road repairs. The bill's language will "make it easier for states to build and maintain highways that can accommodate
the continuing growth in freight movements," he said.
GRATEFUL FOR PROGRESS
Stakeholders, who a couple of months ago were resigned to seeing no progress in 2012 on a long-term bill, were grateful that the needle had been
moved so dramatically in such a brief period. They even put aside concerns that a 27-month duration is too short a time for those involved in the
process, especially states with complex highway projects that often take years to complete. This could be especially true for freight projects, as
many states will have to climb a steep learning curve.
The House's original proposal called for a six-year timetable at a funding level of $230 billion. But that gave way to the shorter, less-expensive
version pushed by the Senate.
"It has been 30 months since we have had a true, long-term highway funding bill," Bill Graves, president and CEO of the American Trucking Associations
(ATA), said on Friday, "so today's bill signing is a good thing for trucking and for our national economy."
"While we would have preferred a bill covering a period longer than 27 months and with greater funding, this is a major step in the right direction," said
Thomas J. Donohue, president and CEO of the U.S. Chamber.
WHERE WILL THE MONEY COME FROM?
Given that the program will come up for renewal in September 2014, the call has grown louder to find other sources of long-term
funding outside of the federal excise tax on motor fuels. So-called gas taxes haven't been raised since 1993, and the bill calls
for current levels to be maintained until 2015.
Over the years, vehicles of all types have become more fuel-efficient, and highway users are travelling longer between fill-ups. This means less
revenue for the highway trust fund, which relies almost exclusively on fuel-tax receipts to fund highway projects. To maintain funding levels amid
lower revenue levels, Congress has been forced over the past few years to redirect $35 billion of general funds into the trust fund.
To avoid a continuation of this scenario, the new law mandates the unusual step of setting aside $18.8 billion from general funds and deploying it to
the trust fund at the start of the current 27-month cycle.
Donohue warned that fuel taxes alone can no longer fund the nation's long-term infrastructure needs. "The bigger challenge lies ahead—devising a
predictable, sustainable, and growing source of dedicated, user-fee-based funding to ensure we have adequate resources to maintain the world's greatest
infrastructure system for decades to come," he said.
Sen. Orrin Hatch (R-UT.), ranking member of the Senate Finance committee, voted against the package, saying the revenue provisions in the bill do nothing
to resolve long-term funding issues. The bill is "nothing more than a short-term Band-Aid to the greater issue of how we fix highway program financing so we
aren't back in this same position a year or two from now," Hatch said.
TRUCK SIZE AND WEIGHT LIMITS TABLED
The Association of American Railroads (AAR), representing an industry that has been riding high for several years, appeared pleased
that the bill did less to harm their interests than it did to promote them. In particular, AAR was happy that a nascent proposal
to increase truck size and weight limits on the nation's interstates never made it into the final version. Instead, it became
the subject of a two-year study by the Transportation Research Board to examine the impact of longer and heavier trucks on the
nation's infrastructure.
"Such a thorough review and assessment of the impact and associated costs of heavier trucks operating on our nation's roads and bridges is long overdue,"
the group said in a statement.
Rep. John L. Mica, (R-Fla.) chairman of the House Transportation and Infrastructure Committee, wanted to raise the per-vehicle weight limit to 97,000 pounds
from 80,000 pounds, with the proviso that heavier trucks be equipped with a sixth axle for better braking and overall stability. That language was tabled by
his own committee, however.
The committee did approve language allowing the nationwide use of twin, 33-foot-long trailers and permitting the deployment of triple trailers
in states that currently don't allow them. But that provision fell by the wayside as the legislative process moved forward.
Opponents of hiking truck size and weight limits argued that because freight users only pay a portion of the actual cost of road repair, taxpayers
would be on the hook for the rest, a number measured in billions of dollars. They also warned that bigger and heavier trucks on the highways would put
the safety of the travelling public in jeopardy.
Supporters, including shippers and carriers, said the measure would dramatically increase supply chain productivity with little risk to harming the nation's
infrastructure. The current limits have been in place for 30 years.
The shipper group National Shippers Strategic Transportation Council, or NASSTRAC, expressed dismay that the language was gutted. NASSTRAC argued that prior
studies have shown that a modest boost in equipment size would not damage the nation's roads and bridges.
"By giving into fear-based misinformation, this bill unfortunately delays the deployment of some of the trucking industry's safest, most fuel-efficient
trucks," said Michael P. Regan, CEO of Elmhurst Village, Ill.-based consultancy TranzAct Technologies Inc. and head of NASSTRAC's advocacy committee.
"Past studies have shown time and again that modest increases in truck size and weight limits have a net positive effect on highway safety and maintenance."
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.
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.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.