Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
In the wake of yesterday's deadly shooting at a San Francisco facility operated by UPS Inc., logistics firms are re-examining how to strike a balance between tighter security measures in DCs and the impact of those steps on costs and operating efficiencies, industry experts said today.
Employees at the site were back at work Thursday, after a disgruntled UPS driver killed three colleagues and wounded two more during the morning shift change before turning the gun on himself. The UPS package center is located in an industrial neighborhood about two miles from downtown San Francisco.
Atlanta-based UPS said it uses layers of physical and technological security at all of its facilities. The company declined to say whether it would consider any changes in the wake of the incident. "We are working to help our employees and the families of those impacted heal from this senseless tragedy, while also investigating the circumstances that led up to this event," UPS Chairman and CEO David Abney said in a statement.
UPS declined to comment on the motives behind the shooting. The shooter was identified as Jimmy Lam, a 38-year-old package car driver and an 18-year UPS employee. Lam had filed a grievance with the company in March complaining of too much overtime and requesting a cut in his working hours, a spokesman for the Teamsters Union, which represents UPS unionized workers, told the Associated Press.
Most warehouses and DCs lack the resources to make changes in security practices that could prevent similar attacks, said Mike Briggs, a partner in Beam LLC, an Atlanta-based consulting firm. "You can make a very secure environment, but it's expensive and you have to maintain it. Vigilance is always required," Briggs said in an interview today.
Pharmaceutical companies with DCs full of powerful narcotics are the exceptions to the rule, he added. Such facilities require employees to change into uniforms and leave all personal items in lockers outside a security gate. Other practices include extended background checks, buddy-system rules barring workers from being alone in certain rooms, and "man-traps," which are rooms designed to stop someone who tries to illegally enter a building by following closely behind a legitimate employee passing through a card-access door.
However, the cost of implementing those procedures is beyond the reach of many warehouse operators, and workplace efficiency is sapped when workers have to pass through airport-like security to reach the bathroom or take a lunch break, Briggs said.
Another challenge is that enhanced security measures take up valuable square footage in warehouses. That is especially true with older buildings, he said. "In most of these older, more established metro areas, UPS has had these facilities for decades, and those older buildings are more challenging to retrofit," said Briggs.
HUMAN FOCUS
When it comes to preventing workplace violence, the most effective approach is to focus on human resources, Briggs said. "You can put in these systems, make the investment, and that can really help with basic loss prevention," he said. "But for a disgruntled, unhappy, mentally unhealthy employee, ultimately your best tools are trying to understand that person and knowing that they need help."
A company that is tuned into its workforce can track workers' behavior, note their comments to colleagues, monitor social media posts, and absorb that input in time to address potential problems. "It's cultural; knowing you're cared for in the workplace. That's probably the hardest thing to attain, but it is something that super high-attaining organizations are doing," he said.
It would have been hard for UPS to prevent the incident, because the shooter was employed at the facility, said Eric Peters, president and CEO of SensorThink, a logistics technology vendor that provides Internet of things (IoT) platforms for automated warehouses. "You look at this situation, it would have been almost impossible to prevent it, unless you put military-style security at the facility, like an embassy," he said.
Most warehouse security plans employ both a hardware technology approach—with sensors like digital video cameras, motion sensors, and proximity monitors—and also a human behavior approach, such as carefully screening employees before they are hired or looking at ways to reduce workplace stress, said Peters.
However, a security strategy can fall short when companies use it to meet two different goals, protecting both the facility's products and its people, he said. While grainy security cameras might help identify an employee who looted packages, they would not be of much use in preventing workplace violence.
Most DCs have a poor record of applying their own security protocols, largely because of the high turnover of warehouse employees and the frequent use of temporary workers to manage the holiday peak. "Most facilities are very lax; you have a primitive level of security in these buildings," Peters said. "There might be contact switches at doors, but those doors are often left open or propped ajar, and you have employees sneaking out to take smoking breaks."
That situation may begin to change as rapid advances in technology drive down the cost of sensors and IoT networks, allowing companies to track their employees in real time, Peters said. For example, if every worker carried a badge with a unique RFID tag, a warehouse could install readers to allow managers to tell whether workers were spending too long in the break room, were lingering in a restricted region of the warehouse, or they had ignored a fire alarm or evacuation order, he said.
Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.
First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).
Second, they use them often, with 61% of American shoppers buying online at least once a week. Among the most popular items are online clothing and footwear (63%), followed by consumer electronics (33%) and health supplements (30%).
Third, delivery is a crucial aspect of making the sale. Fully 94% of U.S. shoppers say delivery options influence where they shop online, and 45% of consumers abandon their baskets if their preferred delivery option is not offered.
That finding meshes with another report released this week, as a white paper from FedEx Corp. and Morning Consult said that 75% of consumers prioritize free shipping over fast shipping. Over half of those surveyed (57%) prioritize free shipping when making an online purchase, even more than finding the best prices (54%). In fact, 81% of shoppers are willing to increase their spending to meet a retailer’s free shipping threshold, FedEx said.
In additional findings from DHL, the Weston, Florida-based company found:
43% of Americans have an online shopping subscription, with pet food subscriptions being particularly popular (44% compared to 25% globally). Social Media Influence:
61% of shoppers use social media for shopping inspiration, and 26% have made a purchase directly on a social platform.
37% of Americans buy from online retailers in other countries, with 70% doing so at least once a month. Of the 49% of Americans who buy from abroad, most shop from China (64%), followed by the U.K. (29%), France (23%), Canada (15%), and Germany (13%).
While 58% of shoppers say sustainability is important, they are not necessarily willing to pay more for sustainable delivery options.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
Economic activity in the logistics industry continued its expansion streak in October, growing for the 11th straight month and reaching its highest level in two years, according to the most recent Logistics Managers’ Index report (LMI), released this week.
The LMI registered 58.9, up from 58.6 in September, and continued a run of moderate growth that began late in 2023. The LMI is a monthly measure of business activity across warehousing and transportation markets. A reading above 50 indicates expansion, and a reading below 50 indicates contraction.
October’s reading showed the fastest rate of expansion in the overall index since September of 2022, when the index hit 61.4. The results show that the industry is continuing its steady recovery from the volatility and sluggish freight market conditions that plagued the sector just after the Covid-19 pandemic, according to the LMI researchers.
“The big takeaway is that we’re continuing the slow, steady recovery,” said LMI researcher Zac Rogers, associate professor of supply chain management at Colorado State University. “I think, ultimately, it’s better to have the slow and steady recovery because it is more sustainable.”
All eight of the LMI’s indices grew during the month, with the Transportation Prices index showing the most growth, at nearly 6 points higher than September, reflecting increased activity across transportation markets. Transportation capacity expanded slightly during the month, remaining just above the 50-point threshold. Rogers said more capacity will enter the market if prices continue to rise, citing idle capacity across the market due to overbuilding during the pandemic years.
“Normally we don’t have this much slack in the market,” he said. “We overbuilt in 2021, so there’s more slack available to soak up this additional demand.”
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
The port worker strike that began yesterday on Canada’s west coast could cost that country $765 million a day in lost trade, according to the ALPS Marine analysis by Russell Group, a British data and analytics company.
Specifically, the labor strike at the ports of Vancouver, Prince Rupert, and Fraser-Surrey will hurt the commodities of furniture, metal products, meat products, aluminum, and clothing. But since the strike action is focused on stopping containers and general cargo, it will not slow operations in grain vessels or cruise ships, the firm said.
“The Canadian port strike is a microcosm of many of the issues that are impacting Western economies today; protection against automation, better work-life balance, and a cost-of-living crisis,” Russell Group Managing Director Suki Basi said in a release. “Taken together, these pressures are creating a cocktail of connected risk for countries, business, individuals and entire sectors such as marine insurance, which help to mitigate cargo exposures.”
The strike is also sending ripples through neighboring U.S. ports, which are hustling to absorb the diverted cargo, according to David Kamran, assistant vice president for Moody’s Ratings.
“The recurrence of strikes at Canadian seaports is positive for U.S. ports that may gain cargo throughput, depending on the strike duration,” Kamran said in a statement. “The current dispute at Vancouver is another example of the resistance of port unions to automation and the social risk involved with implementing these technologies. Persistent disruption in Canadian port access would strengthen the competitive position of US West Coast ports over the medium-term, as shippers seek to diversify cargo away from unreliable gateways.”
The strike is also affected rail movements, according to ocean cargo carrier Maersk. CN has stopped all international intermodal shipments bound for the west coast ports of Prince Rupert, Robbank, Centerm, Vanterm, and Fraser Surrey Docks. And CPKC has stopped acceptance of all export loads and pre-billed empties destined for Vancouver ports.
Connected with the turmoil, Maersk has suspended its import and export carrier demurrage and detention clock for most affected operations. The ultimate duration of the strike is unknown, but the situation is “rapidly evolving” as talks continue between the Longshore Workers Union (ILWU 514) and the British Columbia Maritime Employers Association (BCMEA), Maersk said.
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."