Many of the nation's transportation and logistics business elite have gathered in Palm Beach, Fla., for
investment firm Stifel, Nicolaus & Co.'s annual two-day conference, which starts today. For those seeking
to divine what 2014 holds for those who ship and move stuff, it is hoped the commentary will be as warm as
the near 80-degree weather in the tony South Florida locale.
So far—and even the optimists concede that it's still early—the narrative from top executives indicates
that 2014 is shaping up to be a decent year, though hardly a memorable one. Investment firm Morgan Stanley & Co.
recently sifted through press releases and transcripts of conference calls between management and analysts over the
past two years to compare 2014 outlooks with the prior year. The takeaway, according to lead transport analyst William
Greene, is that freight executives "feel better about the 2014 outlook" compared with their mood when surveying the
2013 landscape at the start of last year.
In a Feb. 3 research note, Greene extracted comments made so far this year by top executives of many leading
publicly held companies as they discussed 2013 fourth quarter and full-year results. Executives of Omaha, Neb.-based
truckload carrier Werner Transport Inc. said that, "freight trends thus far in 2014 have been better than the same
period in 2013." Leaders at Norfolk, Va.-based rail giant Norfolk Southern Corp. said that while "we were less sure
about the economy" during the first half of 2013, "we felt better about a lot of our business segments" as the year
progressed. Fort Smith, Ark.-based less-than-truckload carrier (LTL) ABF Freight System Inc. said the company had
"better conversations" with its customers over business conditions as it finalized contracts during December.
Executives at Atlanta-based UPS Inc. cited economists' projections of stronger U.S. gross domestic product (GDP) growth,
modest 1- to 2-percent growth in the Eurozone after a flat 2013, and China's economy expanding in line with 2013 results at
around 7.5 percent. "More importantly, global exports are projected to slightly outpace global GDP," said UPS, whose fortunes,
more than most U.S.-based transportation firms, are tied to the global economy.
On rates, most executives said they were seeing a firming not visible for some time. Jacksonville, Fla.-based Landstar
System Inc., a trucking firm that operates through a network of agents, said revenue per load in December rose 3.1 percent
over December 2012. That was the first month all year where that critical metric came in higher than in a comparable month
of 2012, Landstar said. Kansas City-based rail holding company Kansas City Southern said that the pricing environment is
"still positive" and that its rates will rise faster than the projected overall inflation rate, which was reported by the
government at 1.5 percent for 2013.
LTL carrier Saia Inc., based in Johns Creek, Ga., said the rate environment remains "pretty good," though it saw stronger
years for rate increases in 2012 and 2011. Oak Brook, Ill.-based Hub Group Inc., the nation's largest intermodal marketing
firm, was one of the few firms that reported a tough pricing environment; efforts in general to hike intermodal rates have
been muted by increases in capacity to meet growing demand for the service.
Not everyone is that upbeat about the outlook. John G. Larkin, Baltimore-based Stifel's lead transportation analyst, said
freight growth will be suppressed by increases in supply chain efficiencies that better calibrate supply and demand and minimize
the risk of over-production. An aging U.S. population that will spend more on services than on goods will depress economic and
freight growth, as will a dearth of investment in freight-related infrastructure, according to Larkin.
The positive trends will be found mostly in international markets, Larkin said. Cross-border volumes in the U.S.-Mexican
trades will continue to increase, he said. In addition, U.S. exports will come close to balance with U.S. imports due to the
emergence of middle classes in developing countries and the rising global competitiveness of U.S. manufacturing, Larkin said.
The analyst expects industry consolidation to continue as asset-based providers increasingly take share from nonasset-based
rivals.
Roslyn Wilson, who authors the influential "State of Logistics Report," which is published annually, said she is cautiously
optimistic about 2014. Wilson said early data points paint a mixed picture of economic and freight activity. The Institute for
Supply Management's index of new orders for January was off more than 13 percent over December, hardly a positive sign although
the numbers may have been skewed by bad weather and a pull-forward of orders into December. Inventory levels have been elevated
for some time, also not a positive sign as companies will want to work off existing supply before placing new orders, Wilson said.
On the positive side, growth in personal consumption and in residential and nonresidential fixed investment bode well for freight
volumes, she said.
Wilson, who is now gathering data for the report to be released in June, said, "the things we look for that translate into more
supply chain business are not sparking yet." However, perhaps mindful of her generally pessimistic stance on the economy and the
industry since the 2009 recession, she added that, "I am more positive than negative for 2014."
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.
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.
After years in the military, service members and their spouses can find the transition to civilian life difficult. For many, a valuable support on that journey is the U.S. Department of Defense (DOD) SkillBridge program. During their final 180 days of service, participants in the program are connected with companies that provide them with civilian work experience and training. There is no cost to those companies while the service member continues receiving military compensation and benefits.
Both sides benefit from the program. “We’re proud to work with SkillBridge to give back to our military veterans for the bravery and sacrifices they’ve made for all of us,” Troy Pederson, director of training and development at LiftOne, a Hyster-Yale dealer and established SkillBridge employer, said in a release. “In the last year, we’ve helped 10 SkillBridge interns transition from military to civilian life, and the value and positive impact of the program can’t be overstated. At LiftOne, we’ve gained so much from the experience and diverse mix of technical and leadership skills of our SkillBridge candidates.”