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.
Third-party logistics provider (3PL) Seko Logistics has introduced a nationwide delivery service for heavyweight and outsized goods that incorporates a once-popular, but now frequently overlooked, transport mode: air freight.
Under the program, Itasca, Ill.-based Seko will use the cargo holds of passenger aircraft instead of less-than-truckload (LTL) services for the line-haul portion of certain goods ordered online. Seko will pick up products by truck at either the customer's warehouse or one of its own and deliver them to a designated origin airport. Following the move, Seko collects the goods at the destination airport and trucks them to the end customer. The program will be offered for express deliveries made in 1 to 2 days of ordering, or standard deliveries made in 3 to 4 days. The standard service is the option that is price-competitive with truck. Businesses must be certified as "known shippers" under the Transportation Security Administration's (TSA's) criteria to be eligible, Bourke said.
The new service is aimed at hauling such products as large flat-screen televisions, bicycles, and folding sports equipment such as ping-pong and air hockey tables, goods that are non-conveyable in traditional parcel systems and may require faster delivery times than a line-haul truck operation could provide, Seko said.
The program spent several months in the pilot stage for an unidentified electronics retailer that was moving shipments from the Southeast to markets in Texas and California, according to Brian Bourke, Seko's vice president of marketing.
Shipping goods by air is generally far more expensive than by truck. However, the rate differential between air and LTL, the primary truck mode to move e-commerce, is virtually nil for oversized commodities, Bourke said. Part of the reason are the recent moves by the large parcel carriers to make it more expensive to ship relatively lightweight, but bulky or outsized, items by ground. Parcel delivery services are priced either by the actual weight of a shipment or by its dimensions. A large item like a bicycle would be subject to dimensional pricing, and its outsized dimensions would subject the commodity to higher rates to compensate the carrier for the amount of space the product would occupy in the trailer.
Seko's formula for standard deliveries would probably not have been cost-competitive three to four years ago, before the changes in dimensional pricing, Bourke said.
Another benefit of using air, especially for high-value commodities, is that in-transit damages are lower, because airline personnel are generally more careful in their cargo handling, according to Bourke. The pilot shipper reported a significant reduction in its cargo-claims ratio versus truck when it switched to air, Seko said.
Bourke said he was unaware of any 3PL using domestic airfreight for all or part of a last-mile delivery. Seko said it will continue to use its ground network to haul most of its last-mile deliveries. Demand for last-mile deliveries of heavy goods is expected to grow rapidly as producers and merchants throw open more of their stock-keeping units (SKU) to online ordering.
Airfreight became a potent force in U.S. commerce in the 1970s and early 1980s as businesses began to adopt fast-cycle distribution and delivery strategies. However, the mode fell out of favor in the mid-1980s as companies switched to regional distribution centers that could be served by lower cost ground transport, thus achieving rapid deliveries at a fraction of the cost of air. United Airlines and American Airlines ceased freighter services in 1984. Since then, no U.S. passenger airline has operated all-cargo aircraft in domestic commerce.
Instead, airlines built profitable businesses moving goods in their plane's bellyhold compartments, taking advantage of the fact that cargo could be priced competitively because the plane had to fly no matter what. The bulk of a flight's revenue was already being generated by passengers, and to a lesser extent, mail.
Carriers like Memphis-based FedEx Corp., Atlanta-based UPS Inc., and the former Airborne Express, the Seattle-based carrier acquired in 2002 by German giant DHL, filled the void to some extent. However, distribution patterns over the years have continued to tilt toward shorter-haul deliveries. FedEx, which built its company around the need for next-day air deliveries, several years ago restructured its operations to de-emphasize air in favor of its fast-growing ground parcel business. FedEx's traditional air business had stagnated for years.
Seko itself was for many years almost exclusively an air freight forwarder, and was originally known as "Seko Air Freight." It eventually rebranded to reflect an expanded service portfolio beyond air.
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.
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!