Through the looking glass: the future of sourcing and inbound logistics
The pandemic has left no aspect of the supply chain untouched, and sourcing and inbound logistics are no exception. The latest installment of the multiyear “Logistics 2030” study looks at what the future holds for these operations.
If you are trying to buy furniture or an affordable car, you’re most likely feeling the pain from supply shortages and transportation delays. And you’re not alone—retailers, manufacturers, and other businesses are feeling the pain as well. That’s led many to rearrange their priorities for their sourcing and inbound logistics operations, shifting the focus from controlling costs to ensuring uninterrupted supply.
That shift will likely have lasting effects on these operations, according to a research report released this fall. The latest installment of the multiyear “Logistics 2030” study suggests that the crisis will reshape companies’ organizational priorities, tech investment plans, and even talent retention strategies over the decade to come. Here’s a look at some of the findings:
Autonomous inventory management system provider Corvus Robotics is delivering drone technology for lights-out warehouse environments with the newest version of its Corvus One drone system, announced today.
The update is supported by an $18 million funding round led by S2G Ventures and Spero Adventures.
“Corvus Robotics fits our mission to invest in companies that truly transform the way business is conducted,” Marc Tarpenning, co-founder of Tesla and partner at Spero Ventures, said in a press release Tuesday. “Other than a landing pad, its drone-powered system requires no infrastructure, is quick and easy to deploy, and cost-effective to manage. It literally merges with the existing warehouse environment.”
Corvus Robotics’ drone-based inventory management system uses computer vision and generative AI to understand its environment, flying autonomously in both very narrow aisles—a minimum width of 50 inches—and in very wide aisles. It uses obstacle detection to operate safely in warehouses and features an advanced barcode scanning system that can read any barcode symbology in any orientation placed anywhere on the front of cartons or pallets, according to the company.
The lights-out feature is already in use at customer locations.
“Being able to run inventory checks 24/7 without operator assistance has been a game changer,” Austin Feagins, senior director of solutions at third-party logistics services (3PL) provider Staci Americas, said in the release. “The lights-out capability in the Corvus One system allows our inventory teams to correct discrepancies off-shift and pre-shift before production starts each day, limiting fulfillment delays and production impacts.”
The warm waters of the Gulf of Mexico are brewing up another massive storm this week that is on track to smash into the western coast of Florida by Wednesday morning, bringing a consecutive round of storm surge and damaging winds to the storm-weary state.
Before reaching the U.S., Hurricane Milton will rake the northern coast of Mexico’s Yucatan Peninsula with dangerous weather. But hurricane watches are already in effect for parts of Florida, which could see heavy rainfall, flash and urban flooding, and moderate to major river floods, according to forecasts from the National Oceanic and Atmospheric Administration (NOAA).
As it revs its massive engines with fuel from the historically warm Gulf of Mexico, Hurricane Milton could possibly hit Tampa as a Category 5 storm, according to the FEWSION Project at Northern Arizona University, which tracks supply chains throughout the country.
With that much power, Milton could shut down the port and seriously disrupt the fuel supply into western and central Florida, which could then hinder recovery efforts. That’s because fuel supplies for much of Florida, especially central Florida, arrive from Texas and Louisiana through the Port of Tampa. That means that anyone who depends on generators or fuel for critical functions should plan for an extended period without access to fuel. And recovery crews and logisticians should consider bringing their own fuel when responding to the storm, FEWSION said.
One of those disaster recovery efforts will be led by nonprofit group the American Logistics Aid Network (ALAN), which is already mobilizing its forces for Hurricane Milton, even as it devotes other energy to the Hurricane Helene response. “In an ideal world we’d have plenty of time to focus all of our efforts on Hurricane Helene clean-up and recovery,” Kathy Fulton, ALAN’s Executive Director, said in a release. “But in the real world, major hurricanes don’t always wait for their turn. As a result, we are officially activating for Hurricane Milton.”
In the meantime, many weary residents of the region are thinking of moving to another part of the country instead of getting hit by vicious storms several times a year. Nearly one-third (32%) of U.S. residents aged 18-34 say they’re reconsidering where they want to move in the future after seeing or hearing about the damage caused by Hurricane Helene, according to a survey commissioned by real estate brokerage Redfin.
“Scores of Americans flocked to the Sun Belt during the pandemic because remote work allowed them to take advantage of the region’s relatively low cost of living. Some thought Appalachia was insulated from hurricane risk, not realizing that the area is prone to flooding and that hurricanes can sometimes cause flash flooding far away from the ocean,” Redfin Chief Economist Daryl Fairweather said in a release. “Americans are beginning to realize that nowhere is truly immune to the impacts of climate change, and we’re starting to see that impact where people want to live—even people who haven’t experienced a catastrophic weather event firsthand.”
The report is based on a commissioned survey conducted by Ipsos on Oct. 2-3, fielded to 1,005 U.S. adults. After making landfall in Florida in late September, Hurricane Helene wreaked havoc across Appalachia, becoming the deadliest storm to hit mainland America in almost two decades. In North Carolina, the death toll has surpassed 100 and the city of Asheville has been devastated.
Demand for warehouse and industrial space continued to slump in the third quarter as the overall national industrial vacancy rate edged higher, climbing 30 basis points (bps) to 6.4%, according to the latest research by Cushman & Wakefield.
Although vacancy rose again, it increased by the lowest quarterly gain in vacancy since Q4 2022. The primary cause of the rising empty space was “vacant speculative deliveries,” as developers flooded the market, the report said.
“Industrial vacancy rates remain below the 10-year pre-pandemic average of 7% as new supply slowed and overall absorption remained soft, but positive,” Jason Price, Senior Director, Americas Head of Logistics & Industrial Research, said in a release. “We expect that net absorption will more than double in 2025 as leasing activity accelerates with greater economic certainty.”
Through the first three quarters of 2024, the strongest absorption totals of new real estate were seen in Dallas/Ft. Worth at 18.8 million square feet (msf), Houston at 17 msf, Phoenix at 15.1 msf, and Savannah at 7.4 msf. Conversely, the Los Angeles, New Jersey, Oakland/East Bay, Reno, Seattle, and Portland markets have yielded the highest amounts of negative absorption year to date.
Speculative developments continue to dominate the delivery landscape, accounting for 83% of the YTD new supply total. Expect Q4 deliveries to moderate a bit further nationwide as the construction pipeline has dwindled substantially over the last two years.
The average asking rental rate for industrial space exceeded the $10 per square foot (psf) level for the first time in history at the close of Q3 at $10.08 psf. This marked a 4.3% rise year-over-year as some markets continue to see rents tick higher despite softer fundamentals than the past three years.
“Industrial construction is in the final stages of adjusting to the more normalized levels of demand and absorption and we expect to see markets stabilize in 2025,” said Price. “The pipeline has shrunk to a low (309.3 msf) not seen since year-end 2018 and will continue to dissipate into early next year as construction starts remain muted. We anticipate demand reaccelerating in the second half of next year amid softer delivery totals, coupled with healthy leasing totals.”
E-commerce giant Amazon is in the process of hiring 250,000 people across the U.S. as it heads into the holiday season, saying it will pay all seasonal employees at least $18 per hour and provide full-time hires with health care from the first day on the job.
The positions include full-time, part-time, and seasonal roles across the company’s customer fulfillment and transportation operations in the U.S., according to a blog post by Sandy Gordon, Amazon’s vice president, Global Operations Employee Experience.
The cloud-based solution, now called QAD Advanced Scheduling, optimizes production decisions by determining what products to make on each production line in the best possible sequence to minimize changeovers, optimize inventory, and align cost and service goals.
According to Santa Barbara, California-based QAD, manufacturers seek technology to become more efficient, agile and resilient in their pursuit of better competitiveness and profitability. The firm says its platform helps in these areas by scheduling related products together, in the best sequence, with visibility to inventories, capacity, product attributes and changeover costs. This improves the synchronization of manufacturing processes, resource utilization and on-time delivery, while also helping to reduce inventory levels and waste.
Laguna Beach, California-based Phenix Software Inc. originated from Zinata Inc. seven years ago after identifying that customers were experiencing major performance loss due to suboptimal changeovers and inventory levels, with no suitable tool to sustain the gains made with existing scheduling solutions. Committed to continuing to provide the best scheduling solutions available, Zinata has since become a QAD distributor to sell, support, and implement the product as a partner.