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.
The Federal Motor Carrier Safety Administration today finalized a rule requiring electronic logging devices (ELDs) be installed in virtually all commercial motor vehicles by the end of 2017, ending a five-year legal and regulatory battle that still has some in the industry concerned about how small operators will comply with the rule's costs and stay in business.
FMCSA, a subagency of the Department of Transportation, said the rule applies digital technology to a traditionally manual process to improve compliance with federal hours-of-service regulations designed to prevent driver fatigue. The rule phases out the 77-year practice of using paper logs to track driver on- and off-duty times.
An ELD automatically records driving time. It monitors engine hours, vehicle movement, miles driven, and location information. It does not track a driver's personal whereabouts. Truckers that have already installed ELDs on a voluntary basis will have an additional two years past the initial phase to comply with the new regulations. FMCSA estimated the average annualized per-vehicle cost of a basic ELD—one that would satisfy its mandate—at $495.
The costs escalate from there, however. One carrier, which FMCSA did not identify, told the agency it spent more than $100,000 a year to install, maintain, monitor, and replace ELDs for its fleet of 200 trucks. That expense didn't include the costs of downtime when an ELD wasn't working, or any penalties and inactivity at a job site because a load wasn't delivered on time, the carrier told the agency.
The final rule, which came down as had been generally expected, is one of several government mandates that could lead to significant driver and rig attrition due to the compliance costs of each. Although the supply-demand scales are today roughly in balance, analysts expect capacity to significantly tighten in two to three years as the financial burdens of rules like ELD compliance force many smaller operators, the backbone of the nation's truck fleet, to exit the business. This, in turn, will result in a meaningful increase in freight rates, according to various analysts.
DOT officials hailed the rule as heralding a new and improved era in highway safety and efficiency. "Since 1938, complex, on-duty/off-duty logs for truck and bus drivers were made with pencil and paper, virtually impossible to verify," said U.S. Transportation Secretary Anthony Foxx in a statement. "This automated technology not only brings logging records into the modern age, it also allows roadside safety inspectors to unmask violations of federal law that put lives at risk."
The rule will save, on average, 26 lives and prevent 562 injuries per year caused by crashes involving large commercial motor vehicles, FMCSA said. It will generate annual net benefits of $1 billion, largely by reducing the amount of required industry paperwork, the agency said. For example, in most cases a carrier would not be forced to retain supporting documents verifying a driver's on-duty driving time, the agency said. The switch to digital records will also make it faster and easier for roadside law-enforcement personnel to review driver records, FMCSA said.
Addressing concerns by groups like the Owner-Operator Independent Drivers Association (OOIDA), which represents about 150,000 independent drivers, that trucking firms could use the technology to micromanage and ultimately harass drivers, FMCSA said "strict protections" of drivers are embedded in the rule to insulate them from harassment.
The ELD rulemaking process had been in legal limbo since August 2011, when a federal appeals court froze the original 2010 FMCSA rule on grounds it didn't do enough to protect drivers from the possibility of harassment by fleet owners and operators. The original rule was set to take effect in mid-2012, but the court's order returning the rule to the FMCSA upended that timetable.
The new rule establishes technology specifications detailing ELD performance and design requirements so manufacturers can produce compliant devices and systems, FMCSA said. The rule permits smart phones and other wireless devices to be used as ELDs if they satisfy technical specifications, are certified, and are listed on an FMCSA website, the agency said. Canada- and Mexico-domiciled drivers will be required to use ELDs when operating on U.S. roadways.
The American Trucking Associations (ATA), which represents large trucking firms, some of whom have already installed ELDs across their fleets, called the rule a "historic step forward" for the industry. "This regulation will change the trucking industry—for the better—forever," Bill Graves, ATA's president and CEO, said in a statement. "An already safe and efficient industry will get more so with the aid of this proven technology."
OOIDA, which has argued the rules do virtually nothing to improve highway safety while laying onerous cost and process burdens on smaller carriers, repeated its concerns in an e-mailed statement. "We know of no technology that automatically tracks a driver's record-of-duty status, and so ELDs will not be able to verify compliance with hours-of-service regulations," OOIDA said. "ELDs can only track (the) movement of a truck and approximate location, not a driver's work status, which requires input from the driver." The group added that it will be "interested to learn the specifics on how the agency intends to deal with the issue of harassment."
Critics of the FMCSA proposal contend that fleets will not only confront the costs of buying hardware and software, but will also face a productivity hit as they adapt their systems and processes to the new technology. Various groups said in comments to the FMCSA that truckers have dramatically improved their safety performance and that there was no need for a costly rule. OOIDA said the rule's costs could be the "proverbial straw that breaks the camel's back."
The group also expressed concern that the rule did not address whether a driver or a carrier contracting out the driver's services should bear the cost of paying for mandatory ELD use. In response, FMCSA said its mission is to promote highway safety and that it would be the private sector's responsibility to sort out the cost issues. The agency said, however, that fleets that buy ELDs in bulk could pass any volume savings on to their driver contractors. It also noted that overall costs could decline as companies comply with the mandate and the technology gains wider acceptance.
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.”