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Mark Stanton is the general manager of PowerFleet for Supply Chain. In his role, Stanton is responsible for all business-related activities—including sales, engineering, product management, finance, and administration, and warehouse operations—for both the industrial and logistics sides of PowerFleet’s business. Prior to joining PowerFleet, Stanton was the vice president and general manager for I.D. Systems.
David Maloney, Editorial Director, DC Velocity 00:00
Supply chains prepare for hurricane season. A key employer changes hiring criteria in a tight labor market. And strong growth persists within logistics.
Pull up a chair and join us as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast. Hi, I'm Dave Maloney. I'm the editorial director at DC Velocity. Welcome.
Logistics Matters is sponsored by Honeywell Intelligrated. From system design and emulation to integrated warehouse automation software and technologies to AS/RS shuttles and robotics, Honeywell Intelligrated end-to-end solutions address the most pressing e-commerce and labor challenges facing our industry. Learn more. Visit sps.honeywell.com.
As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be along to provide their insight into the top stories of this week. But to begin today: hurricane season is just around the corner, bringing the potential for disruptions in supply chains that have already been battered by the pandemic surges in e-commerce and tight capacities within transportation lanes. Can things get any worse? And how do we prepare for the next round of events that nature may throw at us? So, to address those questions, we welcome today's guest, Mark Stanton. Mark is the general manager for PowerFleet for Supply Chain.
Welcome, Mark. Thanks for joining us today.
Mark Stanton, General Manager, PowerFleet for Supply Chain 01:32
Thank you, Dave.
David Maloney, Editorial Director, DC Velocity 01:34
To begin today, can you share just a bit about PowerFleet and the role that you have within the company?
Mark Stanton, General Manager, PowerFleet for Supply Chain 01:39
Yeah, I'll keep it brief. So, PowerFleet has been around for about 25, or a little over 25 years. And broadly speaking, we provide telemetry solutions for transportation, warehousing, distribution organizations, as well as rental cars and other mobile assets, both domestically here in North America, as well as throughout Europe and parts of South America.
David Maloney, Editorial Director, DC Velocity 02:04
Thank you. And as we mentioned, hurricane season's about to begin, so how bad of a season should we expect on top of all the other disruptions that we've faced this year?
Mark Stanton, General Manager, PowerFleet for Supply Chain 02:15
That—if I had a crystal ball, I'd tell you, but I think, if you read the news, like most of us do, most of the forecasts are suggesting it's going to be a pretty bad, if not worse than normal season. So hopefully, they're wrong, but it doesn't look terribly promising. That's for sure.
David Maloney, Editorial Director, DC Velocity 02:33
So what can companies do now to prepare their supply chains?
Mark Stanton, General Manager, PowerFleet for Supply Chain 02:37
Well, I think many, if not most companies are already, and have done for years to prepare their supply chains. You know, the large organizations, such as, you know, Home Depot and Lowe's and Walmarts and Targets and others of the world—food and grocery, retailers, etc.—you know, they have teams of people looking at this, not just this year, not just now, but you're planning for years in the past. I think there's various things that we can all do. They being organizations.
But I think the government—FEMA and others—can do things maybe a little differently. And I think the one area that maybe you'd like to explore a little bit is the collaboration of those organizations. And I think they all do a good job for themselves, and I don't mean to suggest that they're not helpful to others, but maybe there's an area where those organizations and others could collaborate more, maybe under the guise of FEMA or something like that, to see if there's a greater level of capability as a combined effort, rather than a number of distinct or separate efforts.
David Maloney, Editorial Director, DC Velocity 03:43
[Are] there ways that technology could help them in doing some of this collaboration?
Mark Stanton, General Manager, PowerFleet for Supply Chain 03:49
I think so, yeah. I mean, you know, many, if not all of the transportation companies and those organizations, whether they're private fleet or third party, that move products, either from areas that might be under a hurricane watch, and then respond to the hurricane once it's hit, and recovery needs thereafter. They have technology in the house, but how much of that information is shared between them and others? They could be competitors, of course, right? But under certain circumstances, maybe sharing that information, sharing even the resources, as much of that information could enable a much more effective recovery from and flexibility to that recovery, rather than each organization responding, as I say, as separate individual elements to that response.
David Maloney, Editorial Director, DC Velocity 04:44
So, key technologies that we're talking about in this kind of collaboration would be visibility tools and telematics and that sort of thing. What roles can those tools play in helping people better understand their supply chains in doing this kind of preparation?
Mark Stanton, General Manager, PowerFleet for Supply Chain 04:58
I think you nailed it. I think the two areas are really, as you say, visibility—you know, where are my things, whatever they are, right? People is obviously vitally important, but also my assets, whether that's the tractors, the trailers, and equally importantly, the products that are on those tractors and trailers. Where are they at the moment? How can I best disperse them away from the troubled area, or areas? And then if I can manage that, and have that visibility—not just to myself, but maybe visibility of other people's resources—If I have that visibility on the preparedness side, can that enable me and the organizations to be more flexible and capable of the recovery? If I know where my thing or things are, then I should be able to do more with them, than losing them and being blind to how I respond, right? And as I said, if we can collaborate, then maybe there's a much better, more effective way of responding to a disaster like hurricanes, etc.
David Maloney, Editorial Director, DC Velocity 06:03
Sure, and a lot of people do some preparation work by running what-if scenarios and simulation models. Is there a role for some of that in the preparation that people should be doing for hurricane season?
Mark Stanton, General Manager, PowerFleet for Supply Chain 06:15
I think simulation is a really interesting item, actually. This isn't the first year that we've gone through this in North America, and other parts of the world goes through similar weather systems on a regular basis. So, you know, I think one of the things we as an industry and a technology provider to industries like transportation, warehousing can and should do is simulation.
Now, what did we do well? What did we not do so well, you know, last year, the year before, five, 10, 15 years ago? And learn from—I'm not [actually] calling them mistakes, but learn from areas where we could improve. And I think telemetry is one example where the data that we can collect—and when I say we, I don't mean PowerFleet, but the organizations that use our telemetry or others'—the data that they collect could be put into artificial intelligence, machine learning all the others, all [the] acronyms that we're now used to, and really start predicting, not just where the hurricane's gonna hit, but how do we respond more effectively to that weather system? And I think simulation can have a large part to play in that future response.
David Maloney, Editorial Director, DC Velocity 07:26
I agree. And what we're talking about isn't just for hurricane season, but it also helps people to prepare for other types of natural disasters. That could be wildfires, tornadoes, earthquakes, as well as man-made disruptions, as with the things that could occur within supply chains and shortages, is that correct?
Mark Stanton, General Manager, PowerFleet for Supply Chain 07:44
I completely agree. I think your point about earthquakes is a very good example, again, on the West Coast particularly, but man-made disasters, etc.
I think we collect, as a race, as a humanity, we collect a huge amount of data, whether it's your cell phone, or industrial kind of telemetry, collecting data on, as I say, where people, things, whatever they might be, are, whether it's the temperature of that product and the shipment, etc. If we can do—I think there are many things that we can do with that information that we're not doing today, and with the improvements, and, as I say, artificial intelligence, machine learning, etc., I think it opens up, or could open up, some very significant opportunities for us to be better, as you said before, in the preparing for that event, whatever that event is.
But also, equally important is the recovery from that event. So, we can reduce the impact of that event and respond to that recovery more effectively, then we're all better for it, I think, as a nation.
David Maloney, Editorial Director, DC Velocity 08:51
And we know these kinds of disasters are going to happen. We just don't know where or when they're going to occur. But how can this kind of technology help after an event to get supply chains moving again?
Mark Stanton, General Manager, PowerFleet for Supply Chain 09:03
Well, as I touched on earlier on, I mean, if you know where your assets are before the event occurs, whatever that event might be, and you can move them out of harm's way, but keep them close enough that they can be made available speedily—whatever that might be, whether it's hours or days later—is one example. But again, if you know where you've moved them, whether it's to different parts of a state, or to different states, but nearby, you know who's where, you know what availability you have, the asset types.
I think, you know, every tractor and every trailer is not made the same, right? I mean, there's reefers, and as you well know, there's flatbeds, there's all different types of assets that can be utilized differently, depending on the recovery that's required. And I think just knowing where those things are, who has them, are they available, how far away are they from, from the recovery zones, for want of a better term? All of that information can, as I said before, I think, really enable a much more effective recovery from that event. I mean, it saves lives, it can help improve the recovery with regard to buildings and infrastructure and all the things that get damaged. And I think we, as I say, I think we can do more as a nation to be more collaborative in those events.
David Maloney, Editorial Director, DC Velocity 10:21
Well, our hope, of course, is it is not a disasterous season this year for hurricanes, but it's good to be prepared for them.
Mark Stanton, General Manager, PowerFleet for Supply Chain 10:29
Yes—sorry to interrupt you. Yeah. I mean, there's an old saying in the army in England, where I'm from, and I'm sure the U.S. and others, planning prevents-I won't give you the acronym necessarily—but your pain planning prevents poor performance, right? The more you can plan, the more you can be prepared, and the better you can respond, and I think that's really what we're all about here.
David Maloney, Editorial Director, DC Velocity 10:51
We've been talking to Mark Stanton, the general manager for PowerFleet for Supply Chain. Thanks, Mark, for being with us today.
Mark Stanton, General Manager, PowerFleet for Supply Chain 10:57
You're welcome, Dave. Appreciate the opportunity. Thank you.
David Maloney, Editorial Director, DC Velocity 11:01
Now let's take a look at some of the other supply chain news from the week. And Ben, you reported on Amazon's decisions to change their hiring criteria for distribution workers during a tight labor market. What did they do?
Ben Ames, Senior News Editor, DC Velocity 11:15
That's right, Dave. Yeah, it's been an interesting week for labor. Labor was definitely one of those topics that we covered in the magazine an awful lot before the pandemic ever showed up, and now it really looks like it's beginning to rise again to the top of some of the concerns in the industry
One of the signs of that is that Amazon, which is of course, a leader, purely by size, and by its policies, as well, with, you know, operations in every state, they already employ almost 900,000 people, they recently announced plans to hire another 75,000—that'll put them close to a million—so this week, the company said, with all those huge numbers, that it would stop testing its new hires for marijuana use. It does pre-hire drug screening, of course, and will look for other uses—other drugs—but Amazon said that it would not look for the marijuana, and that's a result of an increasing number of U.S. states that have passed laws that legalize pot for medicinal or recreational use. And it looks like the company's just facing reality that it might actually struggle to find enough workers to hit those numbers if it excluded the legal marijuana users.
And in addition, Amazon also said it would change its use of a policy that it calls "time off task" that measures the amount of time that workers are logged out of the software tools in their warehouse and fulfillment work. That was one of the reasons that Amazon has been gaining kind of a bad reputation about micromanaging workers and making really difficult, unpleasant working conditions. So, it's going to loosen the reins on that time off task. It's a little to do with statistics, but it's going to average that measure over a greater period of time, so… . Amazon said its goal was to use that statistic more to identify operational problems instead of tracking individual workers. So, it's really interesting. The company looks like it's positioning itself, just to be able to, you know, hit its numbers for those hiring targets.
David Maloney, Editorial Director, DC Velocity 13:23
That is interesting. Did the company explain exactly which kinds of jobs would be affected by those changes?
Ben Ames, Senior News Editor, DC Velocity 13:29
They did. Yep. So, Amazon can make some changes, but of course, they can't affect everything. For example, marijuana is still not legal at the federal level in the U.S. So, while Amazon will stop testing its workers in warehouse and fulfillment jobs, it will continue to test them for marijuana for workers applying for truck-driving positions. Those are still regulated by rules under the U.S. Department of Transportation.
For example, the DOT runs a drug and alcohol clearinghouse that's operated by its FMCSA [Federal Motor Carrier Safety Administration] arm, and that makes it more difficult for prohibited workers who have failed past tests to sort of do an end run and say "We entered the workforce in a different state" or something.
So having said which, you know, Amazon has other policies that are across the board. For example, it's offering a starting average pay of over $17 an hour; sign-on bonuses of up to $1,000 in some locations; full benefits. So, you can see that Amazon's really kind of rolling out the carpet, just to try to attract labor.
David Maloney, Editorial Director, DC Velocity 14:39
It will be interesting to see if other companies follow Amazon's lead. So, thanks, Ben. Appreciate your joining us today.
Ben Ames, Senior News Editor, DC Velocity 14:47
Yep, we'll be following
David Maloney, Editorial Director, DC Velocity 14:49
And, Victoria, you wrote this week about the strong growth that is persisting in logistics markets. What more can you tell us?
Victoria Kickham, Senior Editor, DC Velocity 14:56
Yes, that's right. There was some interesting economic news out this week. The Logistics Managers' Index report—which is also known as the LMI—for May came out on Tuesday, and it highlighted the tight market conditions we see continuing across the logistics industry this spring. Essentially, supply chain companies are working hard to meet sustained consumer demand in the wake of the pandemic. And they're battling tight capacity and higher costs as they do so.
So, the LMI registered 71.3 in May, which is down slightly from April's reading, but still well above the 50-point mark, indicating growth in the industry. This all stems from the sharp rebound in logistics that began last summer and really just continues unabated.
For a bit of background, the LMI is a monthly gauge of economic activity in the logistics sector. Researchers from five universities poll logistics managers each month to sort of get a pulse on economic activity in the channel, and the resulting LMI score indicates where we are. Above 50 indicates expansion; below 50 indicates contraction. The LMI has been on a strong upswing since last June, steadily climbing from the 60s to readings in the 70s, which essentially indicates strong growth across the industry.
The big story continues to be rising costs. The researchers, in May, pointed to continued high inventory costs, warehousing prices, and transportation prices. And this comes on top of tight capacity. Warehousing capacity declined for the ninth straight month in May, and transportation capacity continued at historic lows. Those are historic, in terms of the LMI index, which is about five years old. So, we're really looking at much of the same from over the past few months. Logistics companies are very busy, and it just keeps getting more expensive to keep up with demand.
David Maloney, Editorial Director, DC Velocity 16:46
Yeah, it really seems to be that way right now.
So, Victoria, the report usually takes a forward look also. What did logistics managers predict for future conditions?
Victoria Kickham, Senior Editor, DC Velocity 16:57
Yes, that's right. The LMI gauges what it calls the Future Conditions Index, and logistics professionals are predicting more of the same over the next 12 months: higher prices, tight capacity. I spoke to researchers Zac Rogers, who compiles the monthly report, and he noted that this latest report tracked the highest predicted cost growth in the history of the index. All three of the indices that track pricing and costs were in the high 80s, approaching the 90 mark, which essentially indicates considerable growth ahead. Rogers said he doesn't expect supply to catch up to demand for quite some time, so the message is that the industry should settle in and continue to battle these busy and costly conditions.
Listeners can learn more about the LMI by checking out the story on our website, and they'll also kind of find a link to the to the report there for more information.
David Maloney, Editorial Director, DC Velocity 17:46
And we'll continue to track that and report the LMI numbers every month.
We encourage listeners to go to DCVelocity.com for more on these and other supply chain stories. And check out the podcast Notes section for some direct links on the topics that we discussed today.
Thanks, Ben and Victoria, for sharing highlights of the news this week.
Ben Ames, Senior News Editor, DC Velocity 18:05
Thank you, Dave. always glad.
Victoria Kickham, Senior Editor, DC Velocity 18:07
David Maloney, Editorial Director, DC Velocity 18:09
And again, our thanks to Mark Stanton of PowerFleet for Supply Chain for being with us today. We encourage your comments on this topic and our other stories. You can email us at email@example.com.
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And we'll be back again next week with another edition of Logistics Matters, when we will look at how warehouse management systems are evolving to work with increased automation and robotics, so be sure to join us. Until then, please stay safe and have a great week.