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.
Corporate CIOs aren't shrinking violets when competing for budget dollars. If it walks, talks, or quacks technology, they'll push ROI projections and lobby hard for the stuff. But mention the word "blockchain" and the CIOs' attitudes suddenly get adjusted. They become Star Trek's stone-cold Mr. Spock to the emotional Captain Kirk, forced to tamp down the demands of their besotted CEOs to "get me some blockchain!"
Part of the caution stems from the notion that the CIOs' bosses have no idea what a blockchain is or what it does. A blockchain is not a product, service, or database. It is a process, one with enormous promise but whose broad uptake is far from assured. It was first utilized to support the Bitcoin crypto-currency, which buyers and sellers use to execute transactions outside of the normal banking ecosystem. But leveraging a blockchain across multiple industries, while certainly feasible, will require much work, robust collaboration between many parties, and a challenging transition to what could end up being different sets of laws and regulations.
"Managing expectations will be critical over the next two years as CIOs try to rein in CEOs who don't understand blockchain, but are sold on its potential," Ken Craig, senior vice president, special projects for Birmingham, Ala.-based McLeod Software, a trucking software provider, told a meeting of the executive council of the "Blockchain in Trucking Alliance (BiTA)," an industry standards group, in mid-November in Atlanta. Craig co-founded BiTA with Craig Fuller, founder of TransRisk, the first futures market for truckload spot-market pricing, which had its coming-out party in late October.
Given the blockchain's superheated hype, expectation management could be a tall order. According to Fuller, 561 companies have applied to join BiTA, a number he reckons makes the group the largest vertical involved in blockchain. About one-third of the applicants have interests that extend beyond trucking, Fuller said. There is little doubt that many are IT firms exploring profitable ways to refresh trucking's reputation as a technological backwater and bring it into the 21st century. There is also keen interest in how a blockchain process could transform an industry where time and the chain of custody mean everything, and where the bill of lading—the standard contract of carriage—still rules the roost. About 30 attendees were expected at the BiTA council meeting, but about 160 showed up, Fuller said.
What blockchain is
A blockchain is a distributed ledger that creates a transparent and indelible trail of each transaction, free of hackers and of so-called trusted third parties such as lawyers, bankers, and other intermediaries who've historically filled overseer's roles. In its simplest form, parties within an extended supply chain add "blocks" of information to the broader chain. The blocks could identify as much information as the stakeholders deem necessary for the transaction to progress and be consummated. Cheating would be virtually impossible, because each step in a transaction, whether open to the public or restricted to specific stakeholders (the latter being what is envisioned in trucking) would be witnessed by everyone in the chain.
At the heart of a blockchain's appeal is the development of so-called smart contracts, or self-executing contracts that would not require a third party to validate them. As envisioned, contracts could be converted to computer code, stored, then replicated on the system and supervised by a network of computers that run the blockchain. Smart contracts enable the exchange of money, property, shares, or anything of value in a transparent and conflict-free way, while avoiding the services of a middleman, according to supporters of the blockchain process. Like a traditional contract, these new compacts would define applicable rules and automatically enforce those obligations, proponents say. Smart contracts are the "holy grail" of the blockchain concept, said Craig of McLeod.
It is no secret that global supply chains running on legacy systems often get bogged down in the back-and-forth of obtaining multiple approvals for transactions, and are vulnerable to loss and fraud. A blockchain prevents this by providing a secure and quickly accessible digital version to all parties in the chain, advocates say.
"We all collectively work to integrate one level upstream or downstream through point-to-point integration. But then we lose the ability to view the extended supply chain beyond those direct relationships," Shanton Wilcox, a partner at Infosys Consulting, a Palo Alto-based firm that works with logistics providers, among other fields, said in a recent webcast sponsored by the investment firm Stifel.
By charting each step of a transaction in the form of blocks that are validated before they are added, a blockchain process cuts the time lag incurred in achieving extended visibility and reduces the risk of information being corrupted as it moves through the chain, Wilcox said.
Companies that have explored a blockchain for transportation have done so gingerly, to say the least. Danish ocean carrier Maersk Line is probably the furthest along, having completed a test of managing Maersk's cargoes using blockchain in collaboration with IT giant IBM Corp. Retail behemoth Wal-Mart Stores, Inc. is testing blockchain technology, mostly to track food shipments with its suppliers, according to Gartner Inc., a consultancy that presented at the Atlanta event. Japanese automaker Toyota Motor Corp. is considering a blockchain technology to track auto parts from the point of manufacturing to assembly plants in other countries, Gartner said.
What blockchain isn't
One wag at the BiTA event referred to a blockchain as "the thing that enables the thing." Scrambled syntax notwithstanding, the description is not far from accurate. Because it isn't a product or service, a blockchain doesn't replace technologies currently in use. Rather, it augments existing business-to-business integration systems with what Craig called a "shared visibility overlay." The challenge for developers and users will be to determine where a blockchain fits within the framework of the current IT mosaic, Bart de Muynck, research director at Gartner, said at the Atlanta event.
As with other very nascent processes, the jury is out on how a blockchain would actually perform. A present-day blockchain cannot handle a lot of data and is not scalable, experts said at the conference. Attaining the ultimate objective of executing smart contracts will depend on Congress, states, or the courts writing and interpreting laws granting them legal authority, a process that could take years.
There will also be new scrutiny placed on the software developers who are writing code to enable a blockchain. One of the pre-meeting conversations centered on whether a blockchain would dis-intermediate lawyers, who have long filled the role of a trusted third party. One attendee replied that lawyers would still be needed to help ascertain liability in the event of a problem, and that they will be riding herd on the developers. Not surprisingly, blockchain advocates said it is critical to establish a transitional mechanism between paper and smart contracts, and to produce a totally bug-free system for smart contracts.
Speakers at the BiTA event emphasized that blockchain processes will not advance without a well-thought-out strategy, rock-solid collaboration among vested interests, and a strong set of industry standards governing folks with different agendas operating in what could become a radically changed world. As one attendee said, "What we are talking about is doing away with traditional trusted parties that have existed for centuries, and replacing them with technology, and with each other."
A version of this story appeared in our January 2018 issue under the title "The block is hot."
“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” NRF Chief Economist Jack Kleinhenz said in a release. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
The Census Bureau said overall retail sales in September were up 0.4% seasonally adjusted month over month and up 1.7% unadjusted year over year. That compared with increases of 0.1% month over month and 2.2% year over year in August.
Likewise, September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month over month and up 2.4% unadjusted year over year. NRF is now forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
Despite those upward trends, consumer resilience isn’t a free pass for retailers to underinvest in their stores by overlooking labor, customer experience tech, or digital transformation, several analysts warned.
"The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value. Promotions in general will play a larger role in the 2024 holiday season. Retailers are dealing with shrinking shopper loyalties, a larger number of competitors across more channels – and, of course, a more dynamic landscape where prices are shifting more frequently to win over consumers who are looking for great deals,” Matt Pavich, senior director of strategy & innovation at pricing optimization solutions provider Revionics, said in an email.
Nikki Baird, VP of strategy & product at retail technology company Aptos, likewise said that retailers need to keep their focus on improving their value proposition and customer experience. “Retailers aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars,” she said.
Editor's note:This article was revised on October 18 to correct the attribution for a quote to Matt Pavich instead of Nikki Baird.
The market for environmentally friendly logistics services is expected to grow by nearly 8% between now and 2033, reaching a value of $2.8 billion, according to research from Custom Market Insights (CMI), released earlier this year.
The “green logistics services market” encompasses environmentally sustainable logistics practices aimed at reducing carbon emissions, minimizing waste, and improving energy efficiency throughout the supply chain, according to CMI. The market involves the use of eco-friendly transportation methods—such as electric and hybrid vehicles—as well as renewable energy-powered warehouses, and advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI) for optimizing logistics operations.
“Key components include transportation, warehousing, freight management, and supply chain solutions designed to meet regulatory standards and consumer demand for sustainability,” according to the report. “The market is driven by corporate social responsibility, technological advancements, and the increasing emphasis on achieving carbon neutrality in logistics operations.”
Major industry players include DHL Supply Chain, UPS, FedEx Corp., CEVA Logistics, XPO Logistics, Inc., and others focused on developing more sustainable logistics operations, according to the report.
The research measures the current market value of green logistics services at $1.4 billion, which is projected to rise at a compound annual growth rate (CAGR) of 7.8% through 2033.
The report highlights six underlying factors driving growth:
Regulatory Compliance: Governments worldwide are enforcing stricter environmental regulations, compelling companies to adopt green logistics practices to reduce carbon emissions and meet legal requirements.
Technological Advancements: Innovations in technology, such as IoT, AI, and blockchain, enhance the efficiency and sustainability of logistics operations. These technologies enable better tracking, optimization, and reduced energy consumption.
Consumer Demand for Sustainability: Increasing consumer awareness and preference for eco-friendly products drive companies to implement green logistics to align with market expectations and enhance their brand image.
Corporate Social Responsibility (CSR): Companies are prioritizing sustainability in their CSR strategies, leading to investments in green logistics solutions to reduce environmental impact and fulfill stakeholder expectations.
Expansion into Emerging Markets: There is significant potential for growth in emerging markets where the adoption of green logistics practices is still developing. Companies can capitalize on this by introducing sustainable solutions and technologies.
Development of Renewable Energy Solutions: Investing in renewable energy sources, such as solar-powered warehouses and electric vehicle fleets, presents an opportunity for companies to reduce operational costs and enhance sustainability, driving further market growth.
The clean energy transition continuing to sweep the globe will give companies in every sector the choice to either be disrupted or to capitalize on new opportunities, a sustainability expert from Deloitte said in a session today at a conference in Orlando held by the enterprise resource planning (ERP) firm IFS.
While corporate chief sustainability officers (CSOs) are likely already tracking those impacts, the truth is that they will actually affect every aspect of operations regardless of people’s role in a business, said John O’Brien, managing director of Deloitte’s sustainability and climate practice.
For example, regulatory requirements on carbon emissions are expanding in every region, which means that even if a specific company doesn’t have to change its own practices, it will almost definitely need to flex to accommodate its partners and suppliers as they track scope 3 emissions or supply chain practices.
Likewise, companies are starting to challenge the classic concept of “force majeure” events than can cancel service providers’ contractual duties due to unforeseeable weather events. As the new argument goes, extreme weather patterns increasingly occur in accordance with climate scientists’ forecasts, so those hurricanes and wildfires are in fact foreseeable after all.
But one strategy for coping with the cost of those changes is to mine the power of the data that most companies will soon need to collect as part of their evolution. Instead of simply tracking its trucks to trim their routes and emissions, a transportation company could use the same data to manage their maintenance and fuel consumption.
“The climate management transition is going to be a massive disruption, but with that comes massive opportunity,” O’Brien said from the keynote stage at the “IFS Unleashed” show. “Don’t waste compliance efforts just on compliance, use it to create new value. You’re collecting all that new data, so use it!”
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.
However, that trend is counterbalanced by economic uncertainty driven by geopolitics, which is prompting many companies to diversity their supply chains, Dun & Bradstreet said in its “Q4 2024 Global Business Optimism Insights” report, which was based on research conducted during the third quarter.
“While overall global business optimism has increased and inflation has abated, it’s important to recognize that geopolitics contribute to economic uncertainty,” Neeraj Sahai, president of Dun & Bradstreet International, said in a release. “Industry-specific regulatory risks and more stringent data requirements have emerged as the top concerns among a third of respondents. To mitigate these risks, businesses are considering diversifying their supply chains and markets to manage regulatory risk.”
According to the report, nearly four in five businesses are expressing increased optimism in domestic and export orders, capital expenditures, and financial risk due to a combination of easing financial pressures, shifts in monetary policies, robust regulatory frameworks, and higher participation in sustainability initiatives.
U.S. businesses recorded a nearly 9% rise in optimism, aided by falling inflation and expectations of further rate cuts. Similarly, business optimism in the U.K. and Spain showed notable recoveries as their respective central banks initiated monetary easing, rising by 13% and 9%, respectively. Emerging economies, such as Argentina and India, saw jumps in optimism levels due to declining inflation and increased domestic demand respectively.
"Businesses are increasingly confident as borrowing costs decline, boosting optimism for higher sales, stronger exports, and reduced financial risks," Arun Singh, Global Chief Economist at Dun & Bradstreet, said. "This confidence is driving capital investments, with easing supply chain pressures supporting growth in the year's final quarter."