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.
Over the next nine years, can America's heavy-duty truck fleets cut 40 percent of their fuel consumption and carbon emissions? A consortium of 12 food and apparel companies, all of whom have rich environmental pedigrees, thinks they can. So does the nonprofit advocacy group the Environmental Defense Fund (EDF).
The founder of startup trucking information website Trucks.com, who cut his teeth as CEO of online car-purchasing site Edmunds.com, said it's economically impractical even if the technology is available to do it. The American Trucking Associations (ATA), which represents the nation's big fleets, thinks it's somewhat ridiculous to look out that far ahead because no one has a crystal ball on available technology and economic activity, among everything else.
In an April 1 letter, the shipper consortium urged the Environmental Protection Agency and the Department of Transportation to require big rigs to meet even tougher standards for fuel and greenhouse gas (GHG) reductions than the Obama Administration has proposed for a new phase of vehicle environmental standards set to begin in 2018. EPA and DOT are expected to publish final rules in late summer or in the fall.
According to the letter, a 40-percent cut in fuel use would raise a loaded big rig's efficiency to 11 miles per gallon by 2025. Currently, the most efficient heavy-duty truck gets about 7 mpg. Fleets would experience lower life-cycle costs as soon as the new fuel-efficient trucks entered service, the group said, citing test results from the Department of Energy's "Smart Truck" program. By 2040, the typical big truck would save 21 cents per mile in fuel costs and the industry in total would save about $25 billion a year, according to the letter.
Among the group's members are Minneapolis-based General Mills Inc.; Waterbury, Vt.-based Ben & Jerry's Homemade Inc., a unit of the multinational food and personal-care company Unilever PLC; Richvale, Calif.-based Lundberg Family Farms, and Londonderry, N.H.-based Stonyfield Farm Inc., a unit of French food giant Danone. Ventura, Calif.-based apparel manufacturer Patagonia Inc. is the only nonfood company member.
EDF, for its part, has proposed a more aggressive fuel-consumption cut for big rigs. Its proposal calls for an overall 40-percent reduction, spread across all truck asset classes. However, because EDF's formula is a weighted average based on the volume of fuel consumption, the heavy-duty trucks that are the biggest guzzlers would be required to cut by 46 percent.
Jeremy Anwyl, CEO of Trucks.com, doesn't buy the push for tougher fuel-economy standards. If the payback was so robust and rapid, fleets and independent drivers alike would rush on board, borrowing capital in confidence that they would be repaid in spades, Anwyl said. The fact that such a change would need to be regulated, rather than dictated by market forces, indicates the math simply doesn't work, especially with diesel-fuel prices still hovering near multiyear lows, he said.
Instead, the shipper group should focus on the environmental benefits, which are more clear cut, and on who should ultimately pay for the investments needed to reach GHG-reduction goals, Anwyl said.
Jason Mathers, senior manager of EDF, said strict measures are in the best interests of shippers because they require the trucking industry to stay the fuel-efficiency course and not be swayed by short-term energy-price fluctuations. "As this industry learned just a few years ago, it takes time to improve fleet fuel efficiency," Mathers said in an e-mail. Efficiency practices aren't "something that can be flipped on when diesel goes north of $4 gallon," he said.
As of this past Monday, nationwide on-highway diesel prices stood at $2.27 a gallon, about 30 cents a gallon above 13-year lows hit earlier this year, but still 60 cents a gallon below the already low prices of May 2015.
Solheim acknowledged that fleet owners view fuel-efficiency investments differently when diesel is $2.30 a gallon than when it's $4.00 a gallon or higher. The value of stricter efficiency standards is that they "act as a hedge" against fuel price volatility, and the higher prices that may be a byproduct of those swings, he said.
Glen Kedzie, who heads energy and environmental issues at ATA, said it can't evaluate the group's proposal because no one knows what technology will be available nine years out to support the objective, or whether the technology would be effective. Kedzie said it's easy for outsiders to make projections when they're not in the shoes of the fleet owner. Unless fleets are reasonably certain that they can achieve a solid return on investment, they won't commit, Kedzie said.
The proposed EPA-DOT regulations will run until 2027, making it one of the longest rule-implementation cycles in trucking history. The Administration projects that, by 2027, big truck fuel consumption and GHG emission levels will be cut by 32 percent from 2017 levels. The rules will be imposed on truck, trailer, and engine manufacturers, but fleets will foot much of the bill as those costs get passed on.
Complying with the tougher standards will end up costing an owner of a typical "Class 8," or heavy-duty, truck about $16,800 by 2027 compared with 2017 levels, according to Administration projections. Kedzie said, however, that the government's estimate is dramatically understated because it doesn't include the higher costs of maintenance, warranties, and driver and vehicle down times.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
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.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.