"Conexus Indiana," the state's private-public economic development partnership, has thrived mainly because the private sector leads and the public sector follows, says David Holt, a Conexus vice president and head of its logistics initiative.
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.
In August 2010, this magazine wrote about the launch of a program called "Conexus Indiana," which officials at the time called the first statewide initiative to promote logistics opportunities and to integrate logistics with four other economic disciplines, notably workforce development. The latter connection was critical to job creation in a state that was struggling with a 10.2-percent unemployment rate.
Fast forward nearly seven years. What began with 36 logistics executives identifying ways to combine infrastructure needs, workforce development requirements, and public policy imperatives has mushroomed into a small army of 220. Work that originated on a statewide level has expanded into Indiana's regions and counties, with six regional logistics councils. But one thing has remained the same: The state that pioneered the use of logistics to attract business investment and push economic growth is still the only state doing it, according to David Holt, who has headed Conexus' logistics council from the start. Its success, according to Holt, is based on the idea that the private sector leads and the public sector holds back until it is appropriate to follow.
Holt recently spoke with Mark B. Solomon, DCV's executive editor-news, about Conexus' evolution, why other states haven't copied its approach, and how the group communicates the strengths of Indiana's assets—such as having more "pass-through" interstate surface arteries and being closer to the U.S. population's mid-point than any other state.
Q: How did Conexus Indiana get started?
A: We were founded by the Central Indiana Corporate Partnership, which had five economic clusters, one of them being logistics. We were seeded with a $3 million grant from the (Eli) Lilly Endowment. That was used for workforce development and allowed us to begin communicating with logistics executives about the role they could play in helping the state support their companies. I was brought in with a background in transportation and workforce development. I had also worked at the White House and in Congress, so I understood the nuances of the political process and its impact on industry.
In 2008, we created an educational curriculum of logistics and advanced manufacturing, and began connecting with schools to build interest and participation. We divided Indiana into three regions—North, Central, and South—and we partnered with high-level logistics executives around the state. We went to market in 2010 with a statewide logistics plan that basically identified all logistics needs for the next 30 years.
Q: Where is the organization today?
A: The executives we are involved with have always been volunteers, and we have far more of them today. Our expanded roster was vital in helping us begin the next major phase of our work, which was to help coordinate projects on a local level. The six regional logistics councils drafted infrastructure plans that identified road needs of all 92 counties. We delivered the plan to INDOT (the Indiana Department of Transportation), which it funneled to our General Assembly. The General Assembly is now debating mechanisms to fund about $2 billion per year in road infrastructure, maintenance, and new capacity projects.
We have also expanded our efforts in workforce development, especially when it comes to working with universities. We have worked to get high school students and students attending (two-year) junior colleges interested in the field. We have endorsed logistics curriculums at Ball State University and the University of Evansville. We send executives to business schools to talk to students about getting logistics degrees. We will then bus interested students to logistics companies so they can get a feel for the work at these facilities.
Q: You played a role in helping reroute westbound intermodal traffic from the Chicago area to Indiana, where it could be moved via rail faster and more cheaply to the Port of Prince Rupert in Vancouver, B.C. You also helped scotch a state tax rule that would have discouraged companies from relocating to Indiana. Yet you consider Conexus' mission, and the council's role in it, to be that of a catalyst rather than an initiator. How does that square with those two achievements?
A: Those efforts came from the private sector. Conexus is more of a connecting point. We come up with ideas, and the private sector drives the work. We connect the ideas to the right people. If you build, design, and make available the assets so our economic developers can support our companies, then the state can attract new companies because we have what they need. For example, when a transport funding bill was up for debate, the chairman of the House transportation committee asked Conexus to identify people to testify. We asked a real estate developer, who testified about what would be needed to attract warehouse and distribution center development to the state.
We don't have any hard data to illustrate how our work has generated economic benefits. Any data would come from the Indiana Economic Development Corp. (IEDC), which does the deals. Sometimes IEDC will bring us in, but most deals have confidentiality agreements, and we are not privy to the information in them.
Q: Why haven't other states replicated your efforts?
A: I've visited a number of states, and they ask me how we've done it. I tell them that our state made the decision to let the private sector lead and that it would follow up with the necessary implementation that only government can do. States have this idea that economic development needs to run through the government. But that throws up a roadblock. The private sector has a skeptical view of government's lead role. As a result, it will be reluctant to share information. Our experience has been that when the private sector leads, it will be more willing to share ideas, resources, and best practices. In our state, it comes down to the private sector getting together and saying with a collective voice, "This is what we need to make it happen."
That said, we've had tremendous backing during the past seven years from governors Mitch Daniels and (current Vice President) Mike Pence. Both administrations understood the value of Indiana's location on the map and were extraordinarily engaged in making logistics work for the state's economy and its people.
Q: So what is your message to other states?
A: That the private sector, when brought together, can solve a lot of problems. It does take leadership to bring them together, and that's where an organization like Conexus, which has long experience working with the public and private sectors, can be a valuable asset. We have people who can connect with executives, who understand the industries they work in, and who can demonstrate how logistics activities benefit their companies and the state. The key is getting the private sector's commitment. If they grasp the benefits for their company, you will get great engagement.
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.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
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.