Firing an LSP still ranks as one of the most difficult tasks in logistics management. Here are some ways to minimize the disruption to your operations.
I recently heard of not one, but two, outsourcing relationships that had gone bad. This is always unfortunate for both parties in the relationship, but it can be particularly tricky for the client company. In fact, I think terminating a logistics service provider (LSP) for a breakdown in service is one of the most difficult tasks in logistics management.
There are a couple reasons for that. It's partly because no one wants to be the bearer of that kind of bad news (although ideally, the LSP will have been kept fully informed of the problems and had every opportunity to address them). And it's partly because terminations for cause have enormous potential to disrupt operations. An early cancellation constitutes a rejection of the provider, its management, and its operations, and it's bound to create hard feelings. And a resentful partner is unlikely to be a cooperative partner when it comes to working out an exit strategy.
In my March 2011 column, I offered some recommendations for ways to minimize the disruption resulting from an early contract cancellation. In light of recent marketplace developments, I think they're worth revisiting. What follows is a slightly updated version of those guidelines:
1. First and foremost, avoid acting impulsively. No matter how often you've been told to act swiftly and decisively, that advice doesn't hold here. Before rendering the first notice of unsatisfactory performance, you should have already developed a contingency plan and shared it with appropriate managers within your company. Don't allow yourself to become so frustrated that you terminate an arrangement with an LSP before its replacement is ready.
2. Include the new provider in the planning process. If the operations are being transferred to another LSP, it is important to involve the new provider in the transition planning early on. Ideally, the outgoing LSP will make every effort to ensure a seamless transition, working with its successor to bring it up to speed on critical activities like order processing. But you can't assume things will work out that way. To head off trouble, sit down with your new provider and develop two separate timelines for the transfer of responsibilities—a plan for an orderly transition and a contingency plan for making the switch on short notice.
3. Identify alternative distribution points. If DCs are involved, you don't want to be caught short if a total breakdown occurs before the new provider is ready to take over. As part of your contingency planning, identify other DCs that could be used in a pinch and make the necessary arrangements. That includes ensuring that adequate labor, equipment, and inventories are available at the alternate sites.
4. Maintain good internal communications. No one likes to admit that a relationship has failed, but it's important to keep your colleagues in the loop. Let managers from marketing, sales, and other areas know that the relationship has gone bad and outline the corrective measures you're taking. Keeping them informed will make it easier for them to anticipate and head off potential customer and other issues.
5. Keep emotion out of it. Once you've delivered the bad news, frustration levels will likely run high, tempers will fray, and the atmosphere may become downright chilly. Try to maintain as much equilibrium in the relationship as possible and handle the myriad details in a professional manner. More often than not, the provider will take its cues from your behavior.
6. Make a clean break. When it's over, it's over. Don't spend an inordinate amount of time dwelling on the past. There's nothing to be gained from recriminations and second-guessing. Learn from the mistakes that were made. Then leverage those lessons to make the new relationship a successful one.
Warehouse automation orders declined by 3% in 2024, according to a February report from market research firm Interact Analysis. The company said the decline was due to economic, political, and market-specific challenges, including persistently high interest rates in many regions and the residual effects of an oversupply of warehouses built during the Covid-19 pandemic.
The research also found that increasing competition from Chinese vendors is expected to drive down prices and slow revenue growth over the report’s forecast period to 2030.
Global macro-economic factors such as high interest rates, political uncertainty around elections, and the Chinese real estate crisis have “significantly impacted sales cycles, slowing the pace of orders,” according to the report.
Despite the decline, analysts said growth is expected to pick up from 2025, which they said they anticipate will mark a year of slow recovery for the sector. Pre-pandemic growth levels are expected to return in 2026, with long-term expansion projected at a compound annual growth rate (CAGR) of 8% between 2024 and 2030.
The analysis also found two market segments that are bucking the trend: durable manufacturing and food & beverage industries continued to spend on automation during the downturn. Warehouse automation revenues in food & beverage, in particular, were bolstered by cold-chain automation, as well as by large-scale projects from consumer-packaged goods (CPG) manufacturers. The sectors registered the highest growth in warehouse automation revenues between 2022 and 2024, with increases of 11% (durable manufacturing) and 10% (food & beverage), according to the research.
The logistics tech provider Körber Supply Chain Software continues to position itself in a fast-changing business landscape, aligning itself today with the digital transformation consulting firm Zero100.
Körber Supply Chain Software—to be formally known as Infios beginning in March—has plenty of funding to make those strategic changes, since the company is a joint venture between its parent company, the German business technology powerhouse Körber AG and KKR, the California-based merger and acquisition specialist.
London-based Zero100 calls itself a membership-based intelligence company connecting, informing, and inspiring the world’s supply chain leaders to accelerate progress on digital supply chain transformation. In January the company gained new financial backing through a “growth investment” from the private equity firm Levine Leichtman Capital Partners. According to Zero100, that new financing will accelerate its tech, data, research, and talent capabilities, further strengthen its team, and enable further product and service innovation on behalf of the company’s customers.
Infios says it is joining that community to access Zero100’s data-driven research insights and advisory, and to integrate innovative sustainability practices and digital tools into its adaptable solutions. Infios’s catalog of technology includes order management, warehousing and fulfillment, and transportation management.
By harnessing advanced technologies such as AI and data analytics and providing businesses with the right level of flexibility and control to evolve and adapt solutions to their needs, Infios says it can help its customers optimize their entire supply chain ecosystem and create a more optimistic outlook.
The Swedish supply chain software company Kodiak Hub is expanding into the U.S. market, backed by a $6 million venture capital boost for its supplier relationship management (SRM) platform.
The Stockholm-based company says its move could help U.S. companies build resilient, sustainable supply chains amid growing pressure from regulatory changes, emerging tariffs, and increasing demands for supply chain transparency.
According to the company, its platform gives procurement teams a 360-degree view of supplier risk, resiliency, and performance, helping them to make smarter decisions faster. Kodiak Hub says its artificial intelligence (AI) based tech has helped users to reduce supplier onboarding times by 80%, improve supplier engagement by 90%, achieve 7-10% cost savings on total spend, and save approximately 10 hours per week by automating certain SRM tasks.
The Swedish venture capital firm Oxx had a similar message when it announced in November that it would back Kodiak Hub with new funding. Oxx says that Kodiak Hub is a better tool for chief procurement officers (CPOs) and strategic sourcing managers than existing software platforms like Excel sheets, enterprise resource planning (ERP) systems, or Procure-to-Pay suites.
“As demand for transparency and fair-trade practices grows, organizations must strengthen their supply chains to protect their reputation, profitability, and long-term trust,” Malin Schmidt, founder & CEO of Kodiak Hub, said in a release. “By embedding AI-driven insights directly into procurement workflows, our platform helps procurement teams anticipate these risks and unlock major opportunities for growth.”
Here's our monthly roundup of some of the charitable works and donations by companies in the material handling and logistics space.
For the sixth consecutive year, dedicated contract carriage and freight management services provider Transervice Logistics Inc. collected books, CDs, DVDs, and magazines for Book Fairies, a nonprofit book donation organization in the New York Tri-State area. Transervice employees broke their own in-house record last year by donating 13 boxes of print and video assets to children in under-resourced communities on Long Island and the five boroughs of New York City.
Logistics real estate investment and development firm Dermody Properties has recognized eight community organizations in markets where it operates with its 2024 Annual Thanksgiving Capstone awards. The organizations, which included food banks and disaster relief agencies, received a combined $85,000 in awards ranging from $5,000 to $25,000.
Prime Inc. truck driver Dee Sova has donated $5,000 to Harmony House, an organization that provides shelter and support services to domestic violence survivors in Springfield, Missouri. The donation follows Sova's selection as the 2024 recipient of the Trucking Cares Foundation's John Lex Premier Achievement Award, which was accompanied by a $5,000 check to be given in her name to a charity of her choice.
Employees of dedicated contract carrier Lily Transportation donated dog food and supplies to a local animal shelter at a holiday event held at the company's Fort Worth, Texas, location. The event, which benefited City of Saginaw (Texas) Animal Services, was coordinated by "Lily Paws," a dedicated committee within Lily Transportation that focuses on improving the lives of shelter dogs nationwide.
Freight transportation conglomerate Averitt has continued its support of military service members by participating in the "10,000 for the Troops" card collection program organized by radio station New Country 96.3 KSCS in Dallas/Fort Worth. In 2024, Averitt associates collected and shipped more than 18,000 holiday cards to troops overseas. Contributions included cards from 17 different Averitt facilities, primarily in Texas, along with 4,000 cards from the company's corporate office in Cookeville, Tennessee.
Electric vehicle (EV) sales have seen slow and steady growth, as the vehicles continue to gain converts among consumers and delivery fleet operators alike. But a consistent frustration for drivers has been pulling up to a charging station only to find that the charger has been intentionally broken or disabled.
To address that threat, the EV charging solution provider ChargePoint has launched two products to combat charger vandalism.
The first is a cut-resistant charging cable that's designed to deter theft. The cable, which incorporates what the manufacturer calls "novel cut-resistant materials," is substantially more difficult for would-be vandals to cut but is still flexible enough for drivers to maneuver comfortably, the California firm said. ChargePoint intends to make its cut-resistant cables available for all of its commercial and fleet charging stations, and, starting in the middle of the year, will license the cable design to other charging station manufacturers as part of an industrywide effort to combat cable theft and vandalism.
The second product, ChargePoint Protect, is an alarm system that detects charging cable tampering in real time and literally sounds the alarm using the charger's existing speakers, screens, and lighting system. It also sends SMS or email messages to ChargePoint customers notifying them that the system's alarm has been triggered.
ChargePoint says it expects these two new solutions, when combined, will benefit charging station owners by reducing station repair costs associated with vandalism and EV drivers by ensuring they can trust charging stations to work when and where they need them.