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.
On Sept. 2, the Port of Virginia, which runs terminals at Norfolk, Newport News and Portsmouth among other facilities, said it wouldn't transfer cargoes laden aboard ships of the bankrupt Korean liner Hanjin Shipping Co. to vessels in the "CKYHE" Alliance, a five-company global carrier compact that Hanjin belonged to. Nor would the port load cargoes from any of the four other members aboard Hanjin's ships, it said.
In a statement, the port said that it acted "after careful consideration" and at the behest of the four remaining carriers—Chinese carrier Cosco Group Container Lines, Japanese firm "K" Line, and Taiwanese firms Yang Ming Line and Evergreen Line. The port's actions underscore a key ripple effect of the largest bankruptcy in shipping industry: That the damage caused by Hanjin's collapse could stretch well beyond its customers and partners to affect users of other liner companies. These businesses may never have thought of booking their cargoes on Hanjin vessels, but due to the interlocking web of containership alliances, where carrier members swap vessel slots and move boxes around accordingly, that's where their goods ended up.
Such can be the blowback in the environment of ship alliances, which shippers, freight forwarders, and beneficial cargo owners (BCO) never much cared for, and will likely care for even less as the supply chain grapples with the collapse of the world's seventh largest liner company. Vessel-sharing agreements began in the mid to late 1980s as a way for carriers to improve capacity utilization and to defray the high cost of investing in large ships. They have become even larger in scope in recent years as the soaring costs of ever-larger ships needed to stay economically competitive made it difficult for an individual liner to invest outside of an alliance structure.
Liner interests maintain that their mode remains the most efficient mode for transporting global cargoes, and that the alliance structures continue to make this possible by using vessel assets as effectively as possible, and offering improved services to their customers.
However, shippers, BCOs and third parties have griped that the proliferation of alliances and the big ships that accompany them have strained port capacity, especially on the U.S. West Coast, causing shipment delays and backlogs.
The fallout from the Hanjin bankruptcy is likely to put unprecedented pressure on the alliance model. Hanjin contributed 21 vessels and nearly 177,000 twenty-foot equivalent unit (TEU) containers to the CKHYE alliance on the eastbound trades from Asia to the U.S. West Coast, according to data from U.K. maritime and logistics consultancy Drewry. On the eastbound Asia-East Coast trades, Hanjin contributed 13 vessels and about 84,000 TEUs, Drewry said. All told, Hanjin accounted for 8 percent of the container capacity of the eastbound trans-Pacific market, and 3 percent of global container capacity with about 600,000 TEUs.
Alan Murphy, CEO of shipping consultancy SeaIntel Maritime Analysis, told the U.K. publication The Loadstar that the impact of Hanjin's collapse would be felt by alliance partners and its customers, and by those involved in the many vessel-sharing agreements that operate in the non-alliance trades. "Shippers are likely to be surprised by the extent of such co-operation, and even though they are not customers of Hanjin they may still be heavily affected by the turmoil," Murphy was quoted as saying in the publication. The magnitude of the disruptions will largely depend on how quickly and effectively the CKYHE alliance carriers respond to the challenges, he added.
Simon Heaney, an analyst for Drewry, wrote late last week that while Hanjin's partners have begun to arrange for alternate means of transport, there will be "inevitable delays," especially for boxes that are stuck on the dozens of Hanjin ships that have been denied access to ports worldwide until it is determined who will pay ports and terminals to unload the cargoes. Shippers now moving their boxes from Hanjin to other carriers will face additional costs, while terminals will have problems moving containers to meet different vessels, as well as uncertainty over who will pay the handling fees, Heaney wrote. The remaining members of the CKYHE Alliance will have to fill the gaps left by Hanjin's exit, but such steps will disrupt its network scheduling for months, Heaney said.
Hanjin planned to leave the alliance early next year to join a new compact comprised of six carriers, including "K" Line and Yang Ming. Hanjin's demise is likely to diminish the competitiveness of the new alliance, said Heaney.
Generative AI (GenAI) is being deployed by 72% of supply chain organizations, but most are experiencing just middling results for productivity and ROI, according to a survey by Gartner, Inc.
That’s because productivity gains from the use of GenAI for individual, desk-based workers are not translating to greater team-level productivity. Additionally, the deployment of GenAI tools is increasing anxiety among many employees, providing a dampening effect on their productivity, Gartner found.
To solve those problems, chief supply chain officers (CSCOs) deploying GenAI need to shift from a sole focus on efficiency to a strategy that incorporates full organizational productivity. This strategy must better incorporate frontline workers, assuage growing employee anxieties from the use of GenAI tools, and focus on use-cases that promote creativity and innovation, rather than only on saving time.
"Early GenAI deployments within supply chain reveal a productivity paradox," Sam Berndt, Senior Director in Gartner’s Supply Chain practice, said in the report. "While its use has enhanced individual productivity for desk-based roles, these gains are not cascading through the rest of the function and are actually making the overall working environment worse for many employees. CSCOs need to retool their deployment strategies to address these negative outcomes.”
As part of the research, Gartner surveyed 265 global respondents in August 2024 to assess the impact of GenAI in supply chain organizations. In addition to the survey, Gartner conducted 75 qualitative interviews with supply chain leaders to gain deeper insights into the deployment and impact of GenAI on productivity, ROI, and employee experience, focusing on both desk-based and frontline workers.
Gartner’s data showed an increase in productivity from GenAI for desk-based workers, with GenAI tools saving 4.11 hours of time weekly for these employees. The time saved also correlated to increased output and higher quality work. However, these gains decreased when assessing team-level productivity. The amount of time saved declined to 1.5 hours per team member weekly, and there was no correlation to either improved output or higher quality of work.
Additional negative organizational impacts of GenAI deployments include:
Frontline workers have failed to make similar productivity gains as their desk-based counterparts, despite recording a similar amount of time savings from the use of GenAI tools.
Employees report higher levels of anxiety as they are exposed to a growing number of GenAI tools at work, with the average supply chain employee now utilizing 3.6 GenAI tools on average.
Higher anxiety among employees correlates to lower levels of overall productivity.
“In their pursuit of efficiency and time savings, CSCOs may be inadvertently creating a productivity ‘doom loop,’ whereby they continuously pilot new GenAI tools, increasing employee anxiety, which leads to lower levels of productivity,” said Berndt. “Rather than introducing even more GenAI tools into the work environment, CSCOs need to reexamine their overall strategy.”
According to Gartner, three ways to better boost organizational productivity through GenAI are: find creativity-based GenAI use cases to unlock benefits beyond mere time savings; train employees how to make use of the time they are saving from the use GenAI tools; and shift the focus from measuring automation to measuring innovation.
According to Arvato, it made the move in order to better serve the U.S. e-commerce sector, which has experienced high growth rates in recent years and is expected to grow year-on-year by 5% within the next five years.
The two acquisitions follow Arvato’s purchase three months ago of ATC Computer Transport & Logistics, an Irish firm that specializes in high-security transport and technical services in the data center industry. Following the latest deals, Arvato will have a total U.S. network of 16 warehouses with about seven million square feet of space.
Terms of the deal were not disclosed.
Carbel is a Florida-based 3PL with a strong focus on fashion and retail. It offers custom warehousing, distribution, storage, and transportation services, operating out of six facilities in the U.S., with a footprint of 1.6 million square feet of warehouse space in Florida (2), Pennsylvania (2), California, and New York.
Florida-based United Customs Services offers import and export solutions, specializing in remote location filing across the U.S., customs clearance, and trade compliance. CTPAT-certified since 2007, United Customs Services says it is known for simplifying global trade processes that help streamline operations for clients in international markets.
“With deep expertise in retail and apparel logistics services, Carbel and United Customs Services are the perfect partners to strengthen our ability to provide even more tailored solutions to our clients. Our combined knowledge and our joint commitment to excellence will drive our growth within the US and open new opportunities,” Arvato CEO Frank Schirrmeister said in a release.
And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.
One of the biggest targets for innovation spending will artificial intelligence, as supply chain leaders look to use AI to automate time-consuming tasks. The survey showed that 41% are making AI a key part of their innovation strategy, with a third already leveraging it for data visibility, 29% for quality control, and 26% for labor optimization.
Still, lingering concerns around how to effectively and securely implement AI are leading some companies to sidestep the technology altogether. More than a third – 35% – said they’re largely prevented from using AI because of company policy, leaving an opportunity to streamline operations on the table.
“Avoiding AI entirely is no longer an option. Implementing it strategically can give supply chain-focused companies a serious competitive advantage,” Kristi Montgomery, Vice President, Innovation, Research & Development at Kenco, said in a release. “Now’s the time for organizations to explore and experiment with the tech, especially for automating data-heavy operations such as demand planning, shipping, and receiving to optimize your operations and unlock true efficiency.”
Among the survey’s other top findings:
there was essentially three-way tie for which physical automation tools professionals are looking to adopt in the coming year: robotics (43%), sensors and automatic identification (40%), and 3D printing (40%).
professionals tend to select a proven developer for providing supply chain innovation, but many also pick start-ups. Forty-five percent said they work with a mix of new and established developers, compared to 39% who work with established technologies only.
there’s room to grow in partnering with 3PLs for innovation: only 13% said their 3PL identified a need for innovation, and just 8% partnered with a 3PL to bring a technology to life.
Volvo Autonomous Solutions will form a strategic partnership with autonomous driving technology and generative AI provider Waabi to jointly develop and deploy autonomous trucks, with testing scheduled to begin later this year.
The announcement came two weeks after autonomous truck developer Kodiak Robotics said it had become the first company in the industry to launch commercial driverless trucking operations. That milestone came as oil company Atlas Energy Solutions Inc. used two RoboTrucks—which are semi-trucks equipped with the Kodiak Driver self-driving system—to deliver 100 loads of fracking material on routes in the Permian Basin in West Texas and Eastern New Mexico.
Atlas now intends to scale up its RoboTruck deployment “considerably” over the course of 2025, with multiple RoboTruck deployments expected throughout the year. In support of that, Kodiak has established a 12-person office in Odessa, Texas, that is projected to grow to approximately 20 people by the end of Q1 2025.
Women are significantly underrepresented in the global transport sector workforce, comprising only 12% of transportation and storage workers worldwide as they face hurdles such as unfavorable workplace policies and significant gender gaps in operational, technical and leadership roles, a study from the World Bank Group shows.
This underrepresentation limits diverse perspectives in service design and decision-making, negatively affects businesses and undermines economic growth, according to the report, “Addressing Barriers to Women’s Participation in Transport.” The paper—which covers global trends and provides in-depth analysis of the women’s role in the transport sector in Europe and Central Asia (ECA) and Middle East and North Africa (MENA)—was prepared jointly by the World Bank Group, the Asian Development Bank (ADB), the German Agency for International Cooperation (GIZ), the European Investment Bank (EIB), and the International Transport Forum (ITF).
The slim proportion of women in the sector comes at a cost, since increasing female participation and leadership can drive innovation, enhance team performance, and improve service delivery for diverse users, while boosting GDP and addressing critical labor shortages, researchers said.
To drive solutions, the researchers today unveiled the Women in Transport (WiT) Network, which is designed to bring together transport stakeholders dedicated to empowering women across all facets and levels of the transport sector, and to serve as a forum for networking, recruitment, information exchange, training, and mentorship opportunities for women.
Initially, the WiT network will cover only the Europe and Central Asia and the Middle East and North Africa regions, but it is expected to gradually expand into a global initiative.
“When transport services are inclusive, economies thrive. Yet, as this joint report and our work at the EIB reveal, few transport companies fully leverage policies to better attract, retain and promote women,” Laura Piovesan, the European Investment Bank (EIB)’s Director General of the Projects Directorate, said in a release. “The Women in Transport Network enables us to unite efforts and scale impactful solutions - benefiting women, employers, communities and the climate.”