Growing up … and up and up: interview with Sam Bertram
Warehouse-based “vertical farms” could help ease world hunger and solve some sticky supply chain problems in the process, says entrepreneur Sam Bertram.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
The production and distribution of the food we eat each day presents some of the world’s biggest supply chain challenges. Some foods travel thousands of miles to market. Think of the banana you may have eaten today that came from Central or South America.
Many foods need to be kept refrigerated or frozen throughout their lengthy journeys, making the trips extraordinarily costly. The process is wasteful as well. Because many fresh fruits and vegetables have short shelf lives, a significant portion will spoil before ever reaching the consumer.
As our world continues to urbanize, it will be increasingly difficult to feed growing populations far from the farms that produce our food. That’s where vertical farming comes in. Growing plants in warehouses located close to urban areas can provide fresher food that requires fewer resources, isn’t dependent on climate or weather, and minimizes travel distance, a proposition that could eventually make it much easier to feed growing populations.
That’s the vision of Sam and John Bertram, two brothers from Melbourne, Australia, who originally came to California on college tennis scholarships. After completing their engineering studies, they looked for a venture where they could direct their talents. They found it in vertical farming. In 2017, the Bertram brothers co-founded
a Silicon Valley firm that has developed an automated indoor farming technology “stack,” enabled by proprietary robotics, cultivation, and AI (artificial intelligence) innovations. Sam serves as chief executive officer and John is chief technology officer.
Last year, the company opened its first commercial farm in a warehouse near San Jose. The farm, which operates under the company’s Willo direct-to-consumer brand, offers a subscription-based service whereby members are provided with a portion of the farm to grow herbs and vegetables of their choice and then have them delivered to their homes—what Willo calls “personalized farming.” DC Velocity Editorial Director David Maloney recently spoke with Sam about his operation and the supply chain implications of vertical farming.
Q: Can you describe the concept behind a vertical farm and what your farm looks like?
A: Absolutely. Vertical farming just means that you’re using the “third dimension”—you are no longer growing in just two dimensions [like a traditional outdoor farm]. We use a cultivation technique called “vertical plane aeroponics.” So, the plants actually grow out of thin air. There is no soil. Instead, a hydroponic nutrient-infused mix is misted onto the roots that serves all of the functions of soil. Rather than using sunlight, LED lights provide the plant with energy for photosynthesis. When you look at any of the dozens of walls—or “columns,” as we call them—within our facility, you see plants growing out of a two-story, double-sided wall.
So, you can imagine how a warehouse in an urban location could be used as a vertical farm. Usually, warehouses have relatively high ceilings, so that allows you to increase your density and plant production.
Q: How did you and your brother become interested in vertical farming?
A: In 2016, my brother and I came across a statistic that said that 1.1 billion people began this millennium malnourished. That’s an astronomically depressing figure when you think about the sheer number of people who don’t know where their next meal is coming from. Our desire to make an impact led us to found our first company, OnePointOne.
We looked at traditional farming and greenhouse farming, both of which are very mature industries, with tens of billions of dollars’ worth of R&D going into them each year. But in both categories, operations are fundamentally limited by the fact that the growers can’t control the plants’ environment. That was something that vertical farming solved. With vertical farming, you gain complete control of the plant’s entire experience—and, by extension, its taste, texture, shelf life, nutrient composition, appearance, and aroma. It is very powerful, and that is very pertinent to this conversation as it applies to the supply chain.
Q: And I’d guess the problems with more traditional farming aren’t going away, right?
A: No. They are only going to become worse. You have to think about a growing population, a decrease in arable land, and a massive increase in consumption of fresh water. Finding farm labor is also difficult. The average age of laborers in Salinas and Monterey, California, is between 52 and 56, and there’s no generation of farm workers coming up behind them nor any automation technology ready to fill the gap.
Q: What are some of the supply chain issues that vertical farming can address?
A: One would be energy consumption. Fresh food on average travels 2,000 miles to get to the end-consumer in the United States. Imagine the amount of energy that is required to move those plants and to keep them cold both in the truck and inside the retail store. It is astronomical. Most of the energy consumed in this model is actually in distribution and not production. Now, consider how much less energy would be required if the food were grown only 20 to 50 miles away.
But the main value proposition of vertical farms to the consumer is freshness. Leafy greens don’t last an hour if you leave them outside. They also experience significant nutrient loss when they travel long distances through the supply chain. Besides that, we can ensure that the plants in our facility never exceed their “chill points,” which greatly improves overall product quality and shelf life.
Q: What are some of the environmental benefits of vertical farming?
A: When you use aeroponics, the roots are getting exactly what they need all the time. We use zero pesticides, of course. We still apply nutrients, but obviously they’re in a far, far lower concentration than the fertilizer required on a farm. We use around 99% less water, with zero runoff and environmental contamination. That really matters when you consider the fact that 70% of fresh-water consumption around the world is for agriculture. We use, depending on the crop, around 250 times less land than a traditional farm does. That is really a function of the fact that we can grow year-round, grow plants twice as fast, and utilize the third dimension.
Q: What steps did you take to develop your farm?
A: The first thing we focused on was developing a technology that could produce food at a low-enough cost that it would make sense to deploy it around the world. We knew that labor was the number-one cost factor and that electrical efficiency was second. We knew we would have to develop our own farming technology and infrastructure to grow the plants, the software to operate the facility and automate many of the cultivation processes, and then the robotic equipment that manages the logistics of the farm: the inspection of the crops, the movement of different subsystems within the farm, and so forth.
We started the business three and a half years ago. We spent the first two and a half years developing the technology, and then in the first half of 2020, we built our first commercial farm. We call it Farm One, and it is located in a 6,000-square-foot warehouse in San Jose.
Q: Let’s talk about your business model. Willo’s members basically rent space within your farm on a subscription basis and decide what they want to have grown in that space?
A: That is exactly right. Basically, people will interact and control their farm shares through a mobile application. On a month-to-month basis, they can increase or decrease the size of their farm share, or “field,” by adding or subtracting beds, which are areas within the farm where specific crops are cultivated. The customers control what they want grown for them.
Q: What kinds of crops are grown in your farm?
A: We started with the leafy greens—the kales, the arugulas, the spinaches, the basils, the micro greens. They are productive plants and highly nutritious. We have also grown potatoes, strawberries, blackberries, blueberries, and cauliflower. We plan to continually introduce new categories of fruits, vegetables, and medicinal plants to our list of selections.
Q: How often do you make deliveries?
A: It depends on the subscription. It could be once a week or once every two weeks.
Q: What do the robots you developed do in the facility?
A: These robots handle the high-frequency, low-complexity tasks. That’s what robots are very, very good at. For example, our robots handle the planting of the seeds, the movement of the plants throughout the facility, and the visual inspection of the plants with high-resolution cameras. The next functions we will automate include the movement of lights around the facility, the cleaning of the infrastructure, the sampling of tissue, and the pollination of plants within the facility. So, eventually, we will have automated every single operation within the vertical farm through a single fleet of robots.
We are also automating the processes of harvesting and packaging, using off-the-shelf robots for both of these functions.
Q: How many robots do you have operating in the facility and how do they work?
A: Today, we have three robots that are operational inside of the facility, and the next facility will have something on the order of 11.
The vertical farm is two stories tall, and at the top of that vertical farm is what is called a heat island—it’s where all the heat rises up from the LED lights and from the plants as they generate heat. That all sits in about a four-foot area on top of the facility, and it is where the robots operate as well.
The robots travel around the facility on rails, and each carries a different “payload” that can be lowered to perform different functions, such as moving the plants, inspecting the plants, or moving the lights. We designed these robots so that their payloads can be dropped 40 feet or more, but we also built them in such a way that the distance could easily be extended. That is one of the best parts about our system—its ability to physically scale up, out, and side to side.
We have also developed our robotics system to be extremely modular, which gives us a lot of redundancy. If something goes wrong with one of these robots, it is not like a conveyor belt, where you have a single point of failure.
Q: How do you control all of this automated equipment?
A: We have an in-house software suite that monitors conditions to make sure the setpoints are perfect. The software manages all of the environmental input that the plant experiences, such as light, temperature, humidity, air flow, water flow rates, water pressures, droplet sizes, nutrient composition, PH levels, electrical conductivity … the list goes on and on.
Q: And you have plans to expand this technology to additional locations?
A: That is correct. We sold out the first farm in a matter of weeks. We will soon build a second facility, which will be located in Santa Clara, about eight minutes up the road. It will be a little bit over 10 times the size of our current facility and will offer significantly more in the way of production capacity. From there, we plan to expand to other cities.
Q: With your goal of alleviating world hunger, could your technology be deployed anywhere in the world?
A: That is the aim, but it won’t happen overnight. First of all, as with electric cars, this starts at a low-volume, high-price level, which is exactly where vertical farming must exist in the market today. As we continue to optimize operations within the farms themselves, production costs per pound will drop.
In our opinion, though, there are a number of other ventures where this technology could potentially be a significant disruptor. For instance, our technology allows us to analyze crops in ways that could lead to genetic breakthroughs with respect to feeding more of those 1.1 billion people who began this millennium malnourished, and help us grow plants for medicines and vaccines to keep those same people healthy. There is nothing in the world that would drive me harder as a human being than the idea of turning those two prospects into reality.
This story first appeared in the September/October issue of Supply Chain Xchange, a journal of thought leadership for the supply chain management profession and a sister publication to AGiLE Business Media & Events’' DC Velocity.
For the trucking industry, operational costs have become the most urgent issue of 2024, even more so than issues around driver shortages and driver retention. That’s because while demand has dropped and rates have plummeted, costs have risen significantly since 2022.
As reported by the American Transportation Research Institute (ATRI), every cost element has increased over the past two years, including diesel prices, insurance premiums, driver rates, and trailer and truck payments. Operating costs increased beyond $2.00 per mile for the first time ever in 2022. This trend continued in 2023, with the total marginal cost of operating a truck rising to $2.27 per mile, marking a new record-high cost. At the same time, the average spot rate for a dry van was $2.02 per mile, meaning that trucking companies would lose $0.25 per mile to haul a dry van load at spot rates.
These high costs have placed a significant burden on the operations of trucking companies, challenging their financial sustainability over the last two years. As a result, 2023 saw approximately 8,000 brokers and 88,000 trucking companies cease operations, including some marquee names, such as Yellow Corp. and Convoy, and decades-long businesses, such as Matheson Trucking and Arnold Transportation Services.
More so than ever before, trucking companies need to get better at efficiently using their assets and reducing operational costs. So, what is a trucking company to do? Technology is the answer! Given the nature of the problem, technology-led innovation will be critical to ensure companies can balance rising costs through efficient operations.
One technology that could be the answer to many of the trucking industry’s issues is the concept of digital twins. A digital twin is a virtual model of a real system and simulates the physical state and behavior of the real system. As the physical system changes state, the digital twin keeps up with the real-world changes and provides predictive and decision-making capabilities built on top of the digital model.
DHL, in a 2023 white paper, suggests that—due to the maturation of technologies such as the internet of things (IoT), cloud computing, artificial intelligence (AI), advanced software engineering paradigms, and virtual reality—digital twins have “come of age” and are now viable across multiple sectors, including transportation. We agree with this assessment and believe that digital twins are essential to radically improving the processes of fleet planning and dispatch.
THE NEED TO AUTOMATE
Outside of attaining procurement efficiencies, trucking companies can achieve lower costs by focusing on critical operational levers such as minimizing deadheads, reducing driver dwell time, and maximizing driver and asset utilization.
However, manual methods of planning and dispatch cannot optimally balance these levers to achieve efficiency and cost control. Even when planners work very hard and owners strive to improve processes, optimizing fleet planning is not a problem humans can solve routinely. Planning is a computationally intensive activity. To achieve fleet-level efficiencies, the planner has to consider all possible truck-to-load combinations in real time and solve for many operational constraints such as drivers’ hours of service, customer windows, and driver home time, to name just a few. These computations become even more complex when you add in the dynamic nature of real-world conditions such as trucks getting stuck in traffic or breaking down or orders getting delayed. This is not a task humans do best! For these sorts of tasks, technology has the upper hand.
When a company creates a digital twin of its trucking network, it has a real-time model that factors in truck locations, drivers’ hours of service, and loads being executed and planned. Planners can then use this digital model to assess possible decisions and select ones that increase asset utilization, improve customer and driver satisfaction, and lower costs.
For example, a digital twin of the network can offer significant insights and analysis on the state of the network, including exceptions such as delayed pickups and deliveries, unassigned loads, and trucks needing assignments. Backed by AI that takes business rules into account, digital twins can allow companies to optimize their fleet performance by finding the most efficient load assignments and dynamically adjusting in real time to changes in traffic patterns and weather, customer delays, truck issues, and so on.
With a digital twin, carriers can optimize the matching of assets, drivers, and freight. Typically, an investment in this innovative technology results in a 20%+ increase in productive miles per truck, while also improving driver pay and significantly decreasing driver churn. Drivers get paid by the miles they run, so when they run more, they are able to make more money, resulting in less need to chase the next job in search of better pay.
ADDITIONAL BENEFITS
Digital twins also combat deadheading, another source of driver dissatisfaction and cost inefficiencies. On average, over-the-road drivers spend 17%–20% of road miles driving empty. Using a digital twin, a company can search across several freight sources to find a load that perfectly matches the deadhead leg without impacting downstream commitments. These additional revenue miles will help drivers to maximize their earnings on the road and carriers to maximize their asset utilization and profitability.
The traditional manual dispatch planning model is becoming increasingly outdated—each planner and fleet manager tasked with overseeing 30 to 40 vehicles. Carriers try to manage this problem by dividing the fleet into manageable chunks, which results in cross-fleet inefficiencies. Such a system isn’t scalable. A digital twin acts as an equalizer for small and mid-sized fleets. It enables carriers to expand by venturing beyond the fixed routes and network they were forced to run out of fear of additional logistical complexity.
A digital twin can also give an organization the transparency and visibility it needs to find and fix inefficiencies. A successful carrier will leverage the technology to learn from the hitches in its operations. While this visibility is beneficial in its own right, it also provides the first step toward a seamless, digitized operation. “Digital revolution” is a buzzword frequently heard at transportation conferences. Yet not too many organizations are dedicated to digitizing their operations past the visibility stage. The end goal should be using decision-support systems to automate key elements of the system, thus freeing up planners from their daily rote tasks to focus on problems that only humans can solve.
Finally incorporating a digital twin can also help trucking companies work toward the broader trend of creating greener supply chains. Because they have lower deadhead and dwell times, trucking companies that have adopted a digital twin can be more attractive to shippers that are looking for more efficient operations that meet their environmental, social, and governance (ESG) goals.
THE FUTURE IS HERE
It is important to note that the benefits described here are not dreams for the future; digital twin technology is already here. In fact, choosing a digital twin can seem daunting because there are already a spectrum of options out there. First and foremost, an organization must ensure that the digital twin it selects aligns with both the goals and the scope of its operation.
Additionally, the ideal digital twin should:
Operate in near real time. A digital twin should be able to refresh as often as the network changes.
Be able to factor in specific customer delivery requirements as well as asset- and operator-specific constraints.
Be computationally efficient and comprehensive as it considers thousands of permutations in milliseconds. The digital twin should be able to reoptimize an entire fleet’s schedule of multi-day routes on the fly.
Before implementing a digital twin, carriers need to make sure that they have robust data management processes in place. Electronic logging devices (ELDs), customers’ tenders, billing, shipments, and so on are already inundating carriers with a glut of data. However, the manual nature of operations in many carriers leads to poor data quality. Carriers will need to invest in data management approaches to improve data quality to support the generation and use of high-fidelity digital twins. Otherwise, the digital twin will not be representative of reality and companies will run into an issue of “garbage in, garbage out.”
REINVENTION AND TRANSFORMATION
While data management is critical, change management through the ranks of dispatch operations is often a harder task. In fact, the largest roadblock carriers face when undergoing a digital transformation is the lack of willingness to change, not the technology itself. Many carriers cling to outmoded planning methods. Planners, used to operating based on well-worn business rules and tribal knowledge, could be wary of the technology and resistant to change. They may need to be assured that, while it is true that every trucking network is uniquely complex, digital twins can be set up to model the intricacies of their specific dispatch operations and drive value to the network. A significant amount of time and resources will need to be expended on change management. Otherwise even though trucking companies may invest in cutting-edge technology, they won't be able to fully capitalize on the added value it can provide.
As the truckload industry works through the current freight cycle, it is important to realize that change is inevitable. Carriers will need to reinvent their operations and invest in technologies to ride through the busts and booms of future freight cycles. Recent global events point to the many ways that wrenches can be thrown into global transportation networks, and the fact that such volatility is here to stay. Digital twins can provide companies with the visibility to navigate such changes. But above all, an operation that uses the digital twin to drive decisions can make customers and drivers happy, and help the carriers keep their heads above water during times such as now.
Regular online readers of DC Velocity and Supply Chain Xchange have probably noticed something new during the past few weeks. Our team has been working for months to produce shiny new websites that allow you to find the supply chain news and stories you need more easily.
It is always good for a media brand to undergo a refresh every once in a while. We certainly are not alone in retooling our websites; most of you likely go through that rather complex process every few years. But this was more than just your average refresh. We did it to take advantage of the most recent developments in artificial intelligence (AI).
Most of the AI work will take place behind the scenes. We will not, for instance, use AI to generate our stories. Those will still be written by our award-winning editorial team (I realize I’m biased, but I believe them to be the best in the business). Instead, we will be applying AI to things like graphics, search functions, and prioritizing relevant stories to make it easier for you to find the information you need along with related content.
We have also redesigned the websites’ layouts to make it quick and easy to find articles on specific topics. For example, content on DC Velocity’s new site is divided into five categories: material handling, robotics, transportation, technology, and supply chain services. We also offer a robust video section, including case histories, webcasts, and executive interviews, plus our weekly podcasts.
Over on the Supply Chain Xchange site, we have organized articles into categories that align with the traditional five phases of supply chain management: plan, procure, produce, move, and store. Plus, we added a “tech” category just to round it off. You can also find links to our videos, newsletters, podcasts, webcasts, blogs, and much more on the site.
Our mobile-app users will also notice some enhancements. An increasing number of you are receiving your daily supply chain news on your phones and tablets, so we have revamped our sites for optimal performance on those devices. For instance, you’ll find that related stories will appear right after the article you’re reading in case you want to delve further into the topic.
However you view us, you will find snappier headlines, more graphics and illustrations, and sites that are easier to navigate.
I would personally like to thank our management, IT department, and editors for their work in making this transition a reality. In our more than 20 years as a media company, this is our largest expansion into digital yet.
We hope you enjoy the experience.
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In this chart, the red and green bars represent Trucking Conditions Index for 2024. The blue line represents the Trucking Conditions Index for 2023. The index shows that while business conditions for trucking companies improved in August of 2024 versus July of 2024, they are still overall negative.
FTR’s Trucking Conditions Index improved in August to -1.39 from the reading of -5.59 in July. The Bloomington, Indiana-based firm forecasts that its TCI readings will remain mostly negative-to-neutral through the beginning of 2025.
“Trucking is en route to more favorable conditions next year, but the road remains bumpy as both freight volume and capacity utilization are still soft, keeping rates weak. Our forecasts continue to show the truck freight market starting to favor carriers modestly before the second quarter of next year,” Avery Vise, FTR’s vice president of trucking, said in a release.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index, a positive score represents good, optimistic conditions, and a negative score shows the opposite.
A coalition of truckers is applauding the latest round of $30 million in federal funding to address what they call a “national truck parking crisis,” created when drivers face an imperative to pull over and stop when they cap out their hours of service, yet can seldom find a safe spot for their vehicle.
According to the White House, a total of 44 projects were selected in this round of funding, including projects that improve safety, mobility, and economic competitiveness, constructing major bridges, expanding port capacity, and redesigning interchanges. The money is the latest in a series of large infrastructure investments that have included nearly $12.8 billion in funding through the INFRA and Mega programs for 140 projects across 42 states, Washington D.C., and Puerto Rico. The money funds: 35 bridge projects, 18 port projects, 20 rail projects, and 85 highway improvement projects.
In a statement, the Owner-Operator Independent Drivers Association (OOIDA) said the federal funds would make a big difference in driver safety and transportation networks.
"Lack of safe truck parking has been a top concern of truckers for decades and as a truck driver, I can tell you firsthand that when truckers don’t have a safe place to park, we are put in a no-win situation. We must either continue to drive while fatigued or out of legal driving time, or park in an undesignated and unsafe location like the side of the road or abandoned lot,” OOIDA President Todd Spencer said in a release. “It forces truck drivers to make a choice between safety and following federal Hours-of-Service rules. OOIDA and the 150,000 small business truckers we represent thank Secretary Buttigieg and the Department for their increased focus on resolving an issue that has plagued our industry for decades.”
“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.