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.
Walmart Inc. has throttled back on its original deadlines and thresholds for meeting its controversial "on-time, in-full" delivery service, which require truckload and less-than-truckload (LTL) carriers to meet specific delivery requirements or face a 3-percent off-invoice penalty.
Meanwhile, Walmart is testing a program to automate the now-manual process of scheduling delivery appointments to its U.S. distribution centers. Under the initiative, Walmart will automatically pre-set delivery appointments for carriers, which will then be expected to hit the targets, according to a top carrier executive and a Walmart partner.
The ultimate goal of the automated appointment program is to precisely align Walmart's DC capacity with its delivery schedules so that its entire supply chain operates on a just-in-time basis with virtually no inventory, the executive said. Any excess stock will be returned to the supplier, the executive said. The program is being piloted at a DC in New Albany, Miss., and is expected to be rolled out across the company's regional DC network in the third quarter, according to Walmart documents obtained by DC Velocity.
Both programs are working toward the same objectives of tightening delivery flow, cutting inventory-carrying costs, and ensuring available product at all times in a world where customer expectations have been elevated due to e-commerce and, notably, Seattle-based Amazon.com Inc. In commenting on the scheduling initiative, the LTL executive said in an e-mail that "what is coming is just-in-time inventory for retail on all levels. Walmart will always be in stock, and (will) carry very little excess. Carrying costs of inventory will drop dramatically, (and) what they don't sell will head right back to the vendor."
Under the new targets for the on-time, in-full program, which is better known by the acronym "OTIF," effective April 1 truckload carriers will be expected to make deliveries of food and other consumables within "must-arrive-by dates"—set at one day for food and other consumables, and two days for general merchandise—and to do so 85 percent of the time. LTL carriers, whose operations are less linear and more labor-intensive, will be required to hit those targets 50 percent of the time.
When Walmart announced the initiative last July, it set an Aug. 1, 2017, deadline to hit a 75-percent target for truckload deliveries, and a Feb. 1, 2018, date to meet a 95-percent threshold. LTL carriers were started at 33 percent, and were scheduled to be raised to 50 percent by Feb. 1.
Kory Lundberg, a Walmart spokesman, said there's no set timetable for attaining the 95-percent threshold, adding that the goal is for all of Walmart's suppliers to be at that level. "We want to ultimately get to 95 percent with all of our suppliers, and we want to get there in a thoughtful way," Lundberg said in an e-mail.
The OTIF program has raised concern among Walmart's vast supplier and motor carrier partner network, many of whom have operated for years under four-day delivery windows and without the added pressure of meeting the "in-full" objectives. Some motor carriers raised concerns about being penalized for delays on the supplier's end, and the hassles of passing on the off-invoice charge to its shipper.
Lundberg said he wasn't aware of any pushback from carriers to the OTIF mandate. "Our in-stock is the highest it has been since 2012. And we have experienced 13 quarters of positive comp sales while continuing to reduce excess inventory from our U.S. stores," he said. OTIF is a "key component" of those improvements, he said.
The new scheduling initiative is aimed at eliminating the manual process that Walmart said in its communiqué makes it "virtually impossible to prioritize purchase orders presenting the most value to our customers when our network is at capacity." Automating DC appointments "means less administration for our suppliers and carriers," the company said. In the future, Walmart purchase orders will contain such information as appointment date and time, destination, and appointment number, according to the document.
"After full implementation, there should be no more DC callbacks and no more phone calls to schedule delivery appointments," Walmart said.
Automating delivery appointments will require synchronizing customer demand, suppliers' logistical requirements, and Walmart's network capacity requirements, the company said. Suppliers and carriers will hear more in April about how to integrate their logistical parameters into the broader operation, Walmart said.
The changes to OTIF and the planned rollout of the scheduling platform were announced last week at a Walmart national supplier meeting in Bentonville, Ark.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
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.