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.
The coronavirus pandemic has triggered a cascade of changes in global trade patterns ranging from regulatory issues to customs compliance, but personal expertise and relationships are just as important as technology in preserving performance and profits, transportation and third party logistics (3PL) provider C.H. Robinson said yesterday.
Eden Prairie, Minnesota-based C.H. Robinson has been tracking those evolving conditions as part of its efforts to acquire personal protective equipment (PPE) for health workers in its home state during the Covid-19 crisis.
Together, recent changes triggered by the pandemic add up to costly transportation and logistics trends that present budgetary challenges for states in need of PPE, especially as they deploy reopening strategies, the company says. Specifically, logistics professionals have seen a raft of evolving hurdles, such as: a proliferation of counterfeit products, enhanced FDA regulations of medical supplies, rapidly evolving customs compliance guidelines, and a sharp drop in passenger plane capacity.
In response, C.H. Robinson says it has applied its experience, data, and scale to move shipments of PPE—which are largely produced in China—to its home state of Minnesota as quickly and inexpensively as possible. “Covid-19 has created unprecedented logistics challenges across the global supply chain when the rapid movement of PPE is more essential than ever,” C.H. Robinson CEO and President Bob Biesterfeld said in a release. “With our teams based all over the world, including over 20 offices in China, where the majority of PPE is sourced, we are tracking regulations that change weekly and leveraging our vast network to help our customers strategically manage the mounting risks the pandemic has presented.”
According to C.H. Robinson, that approach has helped to mitigate massive supply chain disruptions that have affected over 90% of internationally sourced PPE shipments. Those disruptions can include:
compliance issues: cargo inspection rates of PPE out of China have dramatically increased, lengthening the average waiting period prior to transportation from 3 hours to 2-3 days. Increased import customs delays and shipment refusals add even more time to the process,
longer transit times: normal delivery time for air freight from China to the U.S. has doubled or tripled from 4-6 days to 8-14 days,
higher transportation costs: the price of expedited shipping out of China for PPE has gone up to 3-4 times the average (and at times, as high as 8-10 times the average) amid unprecedented global demand all hitting at the same time, and
other rising costs: Increased commodity prices (e.g., the price of face masks has increased 2-5x the average) and transportation disruption are creating the need for more cargo insurance policies and at higher rates.
While many logistics operations are outfitted with cutting edge technology like digitalized operations and the internet of things, those approaches are insufficient for tackling such complex problems when shippers and carriers are facing a crippled infrastructure, Biesterfeld said in a phone interview.
“Technology alone or digitalization alone aren’t enough to solve these problems,” he said. “Do you need a global control tower? Yes, absolutely. Do you need real-time visibility over inventory in motion and at rest? Yes, absolutely. But you can’t just provide visibility to a flawed process.”
Instead, logistics providers striving to do business during a global pandemic also need personal assets such as: expertise on the ground, awareness of governmental restraints, relationships across multiple providers in both air and ocean, and the scale to achieve appropriate pricing, he said.
According to C.H. Robinson, it has leveraged its global logistics network during the pandemic to shave a few cents off each transaction through strategies like consolidating shipments from multiple parties, capturing space on air freight shipments, using expedited ocean freight as needed, or turning to traditional ocean freight when more time was available.
Those approaches helped the State of Minnesota save more than $1 million in transportation costs associated with procuring more than 72 million pieces of PPE. “A fraction of a cent doesn’t seem like a lot until you’re charged it 72 million times, and then those pennies turn into dollars pretty quickly,” Biesterfeld said.
In that context, every detail counts in the effort to build a sufficient supply or PPE and other crucial goods for health care workers, hospitals, and afflicted communities. And yet, various regions of the U.S. have been scrambling to master their own global supply chains, Biesterfeld said. “All 50 states were sort of left on their own to handle procurement, warehousing, fulfillment, distribution, and purchasing. So they faced a fractured supply chain and increased costs at the same time that they had a lack of expertise on how to navigate the global supply chain.”
Looking further down the road, logistics providers must transition from just “battening down the hatches” during business shutdowns to planning a transition to a new era when a Covid-19 cure or vaccine helps enable an economic recovery. “This crisis has brought supply chain so far to the fore, that supply chain is no longer just a functional conversation; it’s a C-suite conversation,” Biesterfeld said. “Now there are discussions happening everywhere about supply chain performance, resilience, efficiencies, redundancy, and investments.”
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 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.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.