Inbound Logistics | April 2022

APRIL 2022

ALASKA: NOURISHING INNOVATION

TECH: BREAD & BUTTER OF 3PL SOLUTIONS

BITE SIZED SUPPLY CHAIN / LOGISTICS INFORMATION Info SNACKS

100,000+ Number of mobile robots shipped globally in 2021 700,000 Number of mobile robots expected to ship globally by 2025

H ITTING W HERE IT H URTS • 78%of businesses have experiencedmoderate to significant IT supply chain delays over the past 12months • 71%are experiencing shipping delays of up to 6months. • 74%had to cancel at least

$2,984 The amount of money

Tesla spends on research and development per car produced. That’s three times the industry average and higher than the collective R&D budgets of Ford, General Motors, and Chrysler per car. – StockApps.com

one order and reorder with a new vendor to get employee laptops.

– Interact Analysis

– GetApp research into supply chain issues IT professionals face and how they impact their companies

“Leaders win through logistics. Vision, sure. Strategy, yes. But when you go to war, you need to have both toilet paper and bullets at the right place at the right time. In other words, you must win through superior logistics.” – Tom Peters TRUCKLOAD TROUBLES • 51% of truckloads booked in 2021 were moving partially empty • 96% of LTL shippers experience delays between 1-4 days; some experience 5-6 day delays • 1 in 2 shippers are paying for air in underutilized truckload shipments • 100% of shippers had to remanufacture and reship goods due to damage

FedEx Drones On In an effort to speed its deliveries, FedEx has teamed up with Elroy Air, which is developing a vertical take-off and landing cargo drone, to transport packages between sorting centers via autonomous ights. The Chaparral C1 drone is in a pre-production phase. If tests prove positive, FedEx would be able to use drones to move cargo from Fort Worth to Oklahoma City.

– Flock Freight survey of 200 shippers across various industries

April 2022 • Inbound Logistics 1

CONTENTS APRIL 2022 | VOL. 42 | O. 4

44 SPONSORED ALASKA: INSPIRING AWE AND INNOVATION This special 10th edition of our Alaska supplement explores the state’s beauty, resources, and the challenges presented by its location, geography, and climate. The logistics providers that excel in Alaska rely on grit, dedication, and expertise to move products to, from, and within the state safely and efficiently.

66 LOGISTICS IT MARKET RESEARCH REPORT Companies rely on logistics technology to help them navigate a landscape reshaped by pandemic, war, and evolving customer demand. Our annual logistics IT market research report explores the challenges these companies face and the latest trends in IT solutions designed to meet that need. 74 TOP 100 LOGISTICS IT PROVIDERS Inbound Logistics ’ Top 100 Logistics IT Providers list shines a light on the brightest and most innovative companies in the sector.

90 SPONSORED TECHNOLOGY: BREAD & BUTTER OF 3PL SOLUTIONS Third-party logistics providers meet customer challenges by spreading their IT capabilities on thick to become indispensable supply chain partners.

60 TECHNOLOGY SOUPS UP THE SUPPLY CHAIN Consumers slurped up e-commerce with gusto amidst boiling disruption in 2021. To sate that appetite, supply chain professionals can serve up technology that aids with visibility, intelligence, and efficiency.

2 Inbound Logistics • April 2022

CONTENTS APRIL 2022 | VOL. 42 | O. 4

GOOD QUESTION How can companies compete with the logistics dominance of the e-commerce behemoths?

112

34 IT MATTERS Digital transformation: the experience is king 36 LEAN SUPPLY CHAIN Lean isn’t mean and agile isn’t cheap 28 SPONSORED SOLVED

INFO 96 SUPPLY CHAIN INSIGHTS 98 WEB_CITE CITY 108 CALENDAR 110 RESOURCE CENTER

FedEx will test Elroy Air’s Chaparral autonomous air cargo system

INFOCUS 1 INFO SNACKS

INSIGHT 6 CHECKING IN

Managed transportation solution supports resin distributor’s rapid growth...28 Real-time visibility plays an integral role in vaccine delivery...29 Streamlining supply chains during widespread port congestion...30 Leveraging supply chain standards through technology solutions and service...31 38 SPONSORED THOUGHT LEADERS Optimizing multimodal shipping with a one-stop solution...38 How collaboration and technology create efficiencies for SMBs..39 Why transportation spend management visibility is crucial in today’s global supply chain...40 Digitally transforming your supply chain? Here’s how to make it meaningful...41 Leading supply chain solutions facilitated clear sailing during 2021-2022 port congestion...42 Manage supply and demand swings with a digital logistics platform...43

Artificial and human intelligence create an unbeatable combination 8 GOOD QUESTION

14 VERTICAL FOCUS: FITNESS & EXERCISE 18 NOTED 20 TAKEAWAYS 104 IN BRIEF 112 LAST MILE Drones: ready for takeoff

How can companies compete with the logistics dominance of the e-commerce behemoths? 10 DIALOG 12 10 TIPS Managing the Amazon effect 24 SPONSORED Two generations with a drive to serve, grow, and innovates...24 Why you should attend Connections 2022...109 26 SPONSORED KNOWLEDGE BASE Mobile solutions enable efficient facility management operations...26 Debunking common truckload myths...27 32 E-COMMERCE Out of stock? Hoarding is not a solution TruckWings automatically deploy to cover tractor-trailer gap

104

INPRACTICE 16 LEADERSHIP Through transparency,

honesty, and decisiveness, Chief People Officer Megan Davidson champions Crowley employees and makes sure everyone is heard.

Inbound Logistics (ISSN 0888-8493, USPS 703990) is mailed monthly to approximately 60,000 business professionals who buy, specify, or recommend logistics technology, transportation, and related services, by Thomas, a Xometry company, 5 Penn Plaza, NY, NY 10001. Periodicals postage paid at New York, NY, and additional mailing offices. All rights reserved. The publisher accepts no responsibility for the validity of claims of any products or services described. No part of this publication may be reproduced or transmitted in any form or by any electronic means, or stored in any information retrieval system, without permission from the publisher. POSTMASTER SEND ADDRESS CHANGES TO: Inbound Logistics, 5 Penn Plaza, New York, NY 10001

4 Inbound Logistics • April 2022

GX- AR I AN Y VISION GGRAOINUND you work with Penske, our ClearChain® technology suite allows us to see all of your inventory, across every distribution point, all in one place. So you gain total visibility. You weren’t born with superpowers. But when

CHECKINGIN Articial andHuman Intelligence: An Unbeatable Combination

Vol. 42, No. 4 April 2022 THE MAGAZINE FOR DEMAND-DRIVEN ENTERPRISES www.inboundlogistics.com

STAFF

PUBLISHER Keith G. Biondo

publisher@inboundlogistics.com

I nvestment in logistics technology—$26 billion in the past seven years—is white hot right now. Here’s a small sampling of the types of solutions that venture capitalists are nancing: • An articial intelligence (AI)-driven demand- prediction engine that helps lifestyle brands forecast how many units of a particular item will sell. The mission? To better match global inventory levels to demand before the demand.

EDITOR Felecia J. Stratton

editor@inboundlogistics.com

SENIOR EDITOR Katrina C. Arabe

karabe@inboundlogistics.com

CONTRIBUTING EDITORS Merrill Douglas • Thomas Gresham Karen M. Kroll • Helen Mann

CREATIVE DIRECTOR Jeof Vita

jvita@inboundlogistics.com

DESIGNER Nicole Estep

nicole@inboundlogistics.com

Keith Biondo, Publisher

Amy Palmisano apalmisano@inboundlogistics.com

DIGITAL DESIGN MANAGER

• AI-powered warehouse management software solutions that optimize operations globally, while shaving costs and providing better fulllment percentages. • A full-stack, low-cost agri-tech startup targeting farmers in developing countries that uses AI to bring process optimization tools to areas that previously were not plugged into the global techno web. • Online marketplaces using AI to aggregate and deliver automobile and other spare parts on specialty e-commerce platforms. The value proposition: limit inventory investment and offer e-commerce-style delivery to “under- served” market sectors. AI, AI, AI! The buzz-worthiness of that acronym is driving billions in investment, and rightly so. We are all aware of what AI can do to power complex demand-driven solutions in a high-speed dynamic global market. OK, let me say it. AI driving the nest transportation and supply chain solutions cannot solve all problems. Given the disproportionate emphasis on AI, especially in investment and news coverage, I want to posit a reminder that there are plenty of non-AI-driven technologies solving enterprise logistics challenges. You’ll nd some of the best solutions in our annual Top 100 Logistics Technology Providers list ( pg. 74 ) in this edition. I recently ran across an opinion piece by Michael Wax, managing director and co-founder of Forto, titled Combining Human Expertise With State-of-the- Art Logistics Technology . Back in 2018, I oated a similar idea, except I called it the Human Experience or HX . True then, truer now. A recent example of combining human expertise with technology comes from Toyota Motor Company North America. Bob Young, group vice president of purchasing and supplier development, has access to a broad range of technology, including AI. It’s Toyota, after all. But it’s the giant whiteboard on the wall where Young and his team list and track the problems of the world and their related supply disruptions in up-to-the minute detail. In March, Young’s team and their whiteboard were tracking at least 70 threats to the production and delivery of Toyota vehicles to dealerships across America. A whiteboard, dry erase markers, and supply chain practitioners with superior skills and intelligence, along with the latest technology, create an unbeatable combination. n

PUBLICATION MANAGER Sonia Casiano

sonia@inboundlogistics.com

CIRCULATION DIRECTOR Carolyn Smolin

SALES OFFICES PUBLISHER: Keith Biondo

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Inbound Logistics supports sustainable best practices. Our mission is rooted in helping companies match demand to supply, eliminating waste from the supply chain. This magazine is printed on paper sourced from fast growth renewable timber.

Inbound Logistics welcomes comments and submissions. Email us at editorial@inboundlogistics.com; call (212) 629-1560; or mail 5 Penn Plaza, NY, NY 10001. For advertising or subscription information, call (212) 629-1560, or e-mail publisher@inboundlogistics.com. Inbound Logistics is distributedwithout cost to those qualified inNorthAmerica. Interested readers may subscribe online at bit.ly/get_il. Subscription price to others: in North America: $95 per year. Foreign subscriptions: $229. Single copy price: No. Amer. $10, foreign $19, back issues $15.

6 Inbound Logistics • April 2022

GOODQUESTION Readers Weigh In

How can retailers compete with the logistics dominance of the e-commerce behemoths?

ADOPTING AUTOMATED SYSTEMS IS KEY for smaller retailers to keep pace with e-commerce giants. To meet the high demand for online orders and address the cost of increasing speed to the consumer, companies are looking at automated system features and models to streamline fulfillment including micro-fulfillment, hub stores, and BOPIS. —Alex Hempel Senior Director RSC VST, ORBIS Corporation THOUGHTFULLY EXECUTE ALL COMMUNICATIONS AND CUSTOMER TOUCH POINTS to leave an impression and promote acquisition and retention. Every point of contact with a potential client—fromweb store design, to ease of checkout, and all the way to receiving a beautiful

You compete by exposing the chink in their armor . They have serious quality and trust issues with counterfeits in their marketplace. Promote transparency and quality in your supply chain all the way back to the direct manufacturer and you will allay customer fears while giving yourself a leg up on them. —Dusty Dean Founder and CEO BITCADET

DON’T VIEW THIS AS A COMPETITION with e-commerce behemoths, but as another sales channel in your omnichannel strategy. Treat it as such and develop your strategy to provide differentiation on customer service and trust to be able to drive direct sales, while still leveraging other channels to build brand awareness. —Scott Hebert CEO, SYSPRO USA AN E-COMMERCE PLATFORM IS REQUIRED . Many logistics positions have transitioned remotely and therefore increased the demand for digital solutions. You may not be able to compete with the behemoths in all verticals, but differentiation in niche markets will always be desired. Establish a good reputation and maintain a good brand. From this point, a customer base grows.

BEAT THEM AT THEIR OWN GAME. E-commerce giants are still typically moving slowly. Beating them is about moving quickly and precisely and focusing on execution. —Daniel Sokolovsky Co-Founder and CEO, Warp

Corner Your Own Market If a company set out to corner the beverage market with a refreshing carbonated cola-flavored drink targeting a neatly defined carefree audience, they’d fail. No one out Coca-Colas Coca-Cola. In the same way, nobody is going to outperform the logistics capacity of an e-commerce giant when the product is not particularly fragile, relatively small, and fits in a box. The thing is, very few people only drink coke. —Techa Pacitto COO, IL2000 LLC The key is to have a product that has a clear value proposition and cannot be found on any other website. Consumers will find what they need even if your inventory is not found on an e-commerce behemoth. —Donny Salazar Founder and CEO, MasonHub

—AdamWhelpley Transportation Logistics Manager Mickey

8 Inbound Logistics • April 2022

GOODQUESTION

branded shipment—can help influence a purchasing decision. —Brendan Heegan CEO, Boxzooka Fulfillment & Global Ecommerce THE KEYS TO SUCCESS ARE STRATEGIC DISTRIBUTION POINTS , communication, technology, and touching a vertical that strives for the utmost superior customer service expectation. You have a winner if you can get to the heart of what the client and their customers need, with a decent price and ease of use. —Nicole Glenn

Find a Partner

Level the playing field by partnering with the right transportation/logistics provider using their core competencies. They can also ship directly from a vendor network that negates the need for regional warehouses and speeds up their cash position. —John Hill Chief Commercial Officer, Pilot Freight Services

Consumer shifts bring opportunity for service providers to create new value. 3PLs are already well-equipped to compete with the Amazons of the world by providing scalable fulfillment and transportation capacity, integrated supply chain technologies, and strategically partnering with customers to create a better connection to the end consumer. —Mike Glover VP eComm Fulfillment, Legacy Supply Chain

Founder and CEO Candor Expedite

BETTER UNDERSTAND STOCK LEVELS and SKU-level demand to make effective promotions and full price decisions. To compete with big e-tailers, retailers can’t hesitate when making promotion decisions, and must prepare with better data insights and automated reports. —Juliana Prather CMO, EDITED MOVE INVENTORY CLOSER TO THE END CUSTOMER , leveraging the gig economy and using technology to create an asset-light, scalable, and flexible supply chain. —Adam Bryant CEO, AxleHire UTILIZE YOUR PHYSICAL STORE NETWORK for online fulfillment, last- mile services, and customer service. Retail stores are typically closer to the consumer, allowing for faster online fulfillment, last mile, and return services while good customer service can build strong relationships with customers. —John Haber President, Parcel, Transportation Insight FIND TOOLS THAT INTEGRATE seamlessly with 3PL providers. This can help small businesses successfully fulfill large orders and keep up with the big guys. —Doug LaBahn Chief Marketing Officer Cin7

UTILIZE FLEXIBLE AUTOMATION SOLUTIONS, cloud-based software, rapid installation/integration, and opex financing models to gain access to advanced technology without the need for large capital budgets or long commissioning timelines. —Matthew Cherewka Director, Business Development and Strategy Vecna Robotics FOCUS ON FULFILLMENT. Can you deliver for your customers? That’s the top way to succeed in e-commerce, whether it’s processing returns, producing goods, or delivering products. Ensuring you’re running smoothly from staffing to production to deliveries to returns is the path to success in this environment. —Carl Schweihs

IN E-COMMERCE, CONSUMER TRUST IS EVERYTHING. Any company— regardless of size—that fails to accurately communicate a product’s status within the supply chain risks damaging its customer relationships. Consumers are more likely to shop with businesses whose product availability and delivery information is accurate and consistent, even if there may be a longer wait time. Thomas Kasemir Chief Product Officer Productsup

Have a great answer to a good question? Be sure to participate next month. We want to know: What’s the biggest supply chain silo? How would you break it down? We’ll publish some answers. Tell us at editorial@inboundlogistics.com or tweet us @ILMAGAZINE #ILGOODQUESTION

President and COO PeopleManagement, a TrueBlue company

LEVERAGE HIGHLY DEMOCRATIZED, LOW-COST DATA, like location analytics, to manage and optimize your supply chain. The near real- time nature of this data enables increased visibility and streamlined communication throughout supply chains. —Jeff White Founder and CEO, Gravy Analytics

April 2022 • Inbound Logistics 9

DIALOG @ILMagazine [ INSIGHT ]

Want to join the conversation? FOLLOW US: linkedin.com/company/inbound-logistics facebook.com/InboundLogistics twitter.com/ILMagazine youtube.com/user/InboundLogistics inboundlogistics.com/cms/podcast DROP US A LINE: editorial@inboundlogistics.com

While fuel will never be a fixed operating expense for carriers, and

Re. Good Question: What’s the difference between traceability and transparency in the supply chain? bit.ly/Feb22_GoodQuestion Both deal with information flow throughout a supply chain; the difference is the relationship and trust formed between two supply chain partners. Anything can be tracked and traced, but transparency involves a level of trust and honesty between two partners. Think of it in terms of dating. At first, two people are sharing only minimal information with each other (traceability). As the relationship progresses and a partnership is formed, more honest communication and information flow between the two parties (transparency). –Casey Jenkins

shippers will always be exposed to moving fuel surcharge schedules, shippers can be cognizant and critical of increasing linehaul rates given the many other factors affecting the marketplace. Focus on reducing costs where you do have control including deadhead miles, sourcing strategies, supplier and receiver relationships, warehouse and storage utilization, modal selection and more. Condensing freight networks is critical to eliminating unnecessary competition and driving down costs. Duplication and overlap can cost you time and money; that’s why it’s crucial to leverage partner networks by building capacity strategies. –Mark Derks Chief Marketing Officer, BlueGrace Logistics On Inventory Strategies Supply chain disruptions have forced us to move from “just in time” to “just in case” logistics. Shippers are now prioritizing capacity and service over rates. Global conflicts only accentuate these disruptions, prolonging deliveries and escalating costs for companies trying to move goods around the world. –Jenny Vander Zanden Chief Ope rating Officer Breakthrough Though supply chains have run on “just in time” principles for years, calculating the cost of downtime due to events such as port slowdowns can change the calculus in favor of keeping more critical inventory on hand. –Tony Pelli Practice Director of Security & Re silience, BSI

2022 LOGISTICS PLANNER

Cover_0122.indd 1

1/21/22 4:24 PM @ochsfamily Clever cover! Not sure about song title #5, I Will Survive . It feels more like Thunderdome: “Two men enter, one man leaves.” TWITTER TAKE

Fast TAKES On Diesel Fuel Surcharge Rates

Re. You Won’t Get Fooled Again: January 2022 Checking In by IL Publisher Keith Biondo bit.ly/0122_CheckingIn

Shippers and carriers are bracing for the short-term impact from rising diesel prices, and potential long-term effects to their end customers who will eventually feel cost increases if fuel costs stay high. Paying fuel surcharges is a common industry practice. Therefore, paying higher surcharges for higher fuel costs makes perfect sense, right? However, when the market has drastic spikes in fuel prices, that doesn’t mean rate per mile should also spike dramatically, but often it does.

I always enjoy and look forward to your comments regarding the state of supply chain matters—especially your recent comments in your Checking In piece. I had to email and tell you: Keep up the good work. We all enjoy your perspectives. As you said, hopefully, “We Won’t Get Fooled Again.” –Grant Sebaugh via email

10 Inbound Logistics • April 2022

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10 TIPS

Whether online or in-store, customers expect an immediate and frictionless shopping experience, thanks to Amazon. To compete, you must level the playing field with experiences that keep customers coming back to your branded e-commerce site. Managing the Amazon Effect

1 PROVIDE CONSUMERS WITH CONVENIENCE EXPERIENCES.

won’t lose orders by being able to supply a backorder scenario where customers wait a few extra weeks. 8 MAKE RETURNS AND EXCHANGES EASY. Give customers the ability to self-initiate the process. Retailers can also incentivize consumers to make additional purchases during the process. Retailers need to be prepared for an influx of returns post-holiday and as e-commerce sales continue to soar. Use technology to optimize returns and ensure a seamless end-to-end customer experience. 9 COMMUNICATE OFTEN AND WELL. Be sure customers have what they need, when they need it, including order status, shipment notifications, and SMS notifications. Communications on a BOPIS or curbside order are more complex as customers need details about where to pick up the order, when it will be ready, and if there are any additional charges.

Convenience exper iences can include anything from customizable products to buy- now-pay-later options to simply providing convenience. Offer consumers the option to choose the most convenient deliver y method, select the deliver y date, or accept multiple ship-to addresses. Retailers that can provide “convenience exper iences” similar to what Amazon does will continue to compete.

2 LOOK AT THE ENTIRE PURCHASING PROCESS. Examine the purchasing process from browsing and checkout through delivery and returns. Every interaction with a brand is pivotal in developing a repeat—or bet- ter yet, lifelong—customer. 3 USE SEAMLESSLY INTEGRATED SYSTEMS. When used together, order management systems and e-commerce storefronts enable retailers to automate manual or time-consuming processes to manage inventory, transactions, or fulfillment. 4 ENABLE CUSTOMERS TO SEE ALL INVENTORY. Make sure customers see accurate inventory across all channels as this is one of the first customer-facing interactions that consumers have with a retailer. Allow customers to pick and choose how they want their order fulfilled–pick-up-in-store, curbside, or home delivery.

5 ENABLE OMNICHANNEL FULFILLMENT. Be certain you can fulfill any order from any distribution point with improved shipping times. Make sure your fulfillment capabilities successfully scale, such as having the ability to fulfill orders locally from a micro- distribution center or a centralized warehouse or other location. 6 IMPLEMENT A CUSTOMER SERVICE (CS) PORTAL. Representatives need to promptly and accurately answer customer questions and inquiries. A web- and role-based CS system provides global visibility so that representatives can see all the orders placed across every

channel. Give customers the ability to change their minds on their fulfillment location with grace periods before sending orders to be fulfilled. 7 OFFER PREORDERS AND ACCEPT BACKORDERS. These offers help you gain momentum and improve the customer experience. If a product is out of stock, highlight on the storefront when it is expected back in stock. When retailers integrate ERP information with order management and inventory, they know what inventory is scheduled to show up at the DC. This helps businesses gauge the volume of demand they might expect by having pre- sales or pre-orders. Retailers

10 IMPLEMENT A BUY ANYWHERE,

FULFILL ANYWHERE, RETURN ANYWHERE MODEL. These options range from BOPIS and curbside pick up to drop shipping and ship-from- store. This t ype of convenience delights customers and makes them want to do more business with a retailer or tell their friends about how great it is to shop with the store.

SOURCE: ED RUSCH, CHIEF REVENUE OFFICER, DECK COMMERCE

12 Inbound Logistics • April 2022

U U O R

C D

G P

O O O

S S S

T E

Enter

Z X

Delete

It doesn’t take a puzzle to see that Sunset wants your vote for Top 10 3PL Provider! A vote for Sunset is a vote for personal service, flexibility, and continuous improvement.

Cast your ballot now!

@sunsettransportation

sunset-transportation

@sunsettransportation

@SunsetTrans

Fitness & Exercise Equipment

PANDEMIC GIVES FITNESS FIELD A WORKOUT Like most industries, the fitness equipment field changed dramatically when the pandemic struck. In particular, sales of fitness gear, gadgets, and apparel soared in 2020 as consumers stuck at home and locked out of gyms invested heavily in new equipment for their homes. “As soon as the lockdowns took effect, the home-fitness business took off like wildfire,” Matt Powell, vice president and senior industry adviser for the NPD Group told the Washington Post last year. Health and fitness equipment revenue more than doubled to $2.3 billion, from March to October 2020, according to NPD data. Some manufacturers, in fact, struggled to keep up with demand, particularly as sales of stationary bikes tripled and sales of treadmills jumped 135%, according to the Post . Dumbbells also saw a sharp sales spike. The trend also extended beyond exercise-style equipment, leading to increases in the purchases of products such as bicycles, kayaks, and cross-country skis. Meanwhile, gyms suffered major initial losses and operational challenges amid widespread shutdowns that particularly put pressure on those already struggling. Gold’s Gym, 24 Hour Fitness, and Town Sports International, the owner of the New York Sports Clubs and Lucille Roberts chains, all filed for bankruptcy protection in 2020. More than 9,000 gyms, clubs, and studios closed for good as a result of the pandemic, estimates Mark Williamson, co-founder of ClubIntel. As vaccinations became available and gym doors reopened, fitness center numbers began to rebound. The home gym will never replace retail gyms, which will always offer the advantage of a social environment and a wide assortment of sophisticated equipment, notes Joanna Zeng O’Brien, a Moody’s analyst who covers the fitness industry. For most equipment manufacturers, serving both home and retail gym markets is nothing new. But many gyms extended their presence into the home market as a result of the pandemic with apps that help members work out away from the facility. “There is the convenience of working out from home, but people also want to go to physical locations. People miss that,” O’Brien says. “Fitness companies that want to stay around and not become obsolete have to do both.”

Planet Fitness is one fitness club company that has thrived in recent years, growing from 918 locations in 2014 to more than 2,200 in 2021.

FISCAL FITNESS

Here's a sampling of statistics about the fitness equipment industry, compiled by RunRepeat and other sources, that helps to illustrate its status today. • The fitness equipment industry is estimated to be worth $11.3 billion as of 2021, up 11% from 2020. • The fitness equipment industry is projected to be worth anywhere from $14.7 to $21.1 billion by 2028. • One of the biggest growth markets globally is China, which is expected to have a 16% compound annual growth rate in the industry from 2021 to 2027. • Consumer fitness equipment sales grew 68.4% from $3.3 billion in 2010 to $5.6 billion in 2020. • At-home fitness equipment sales shot up 218% in 2021. • By 2024, cardio equipment such as treadmills, ellipticals, and recumbent bikes will make up 65% of the total fitness market. • Online fitness is expected to grow by 33% year-on-year, making it a $6-billion slice of the annual fitness industry by 2027, according to Uday Anumalachetty, divisional vice president at FitnessOnDemand. • Planet Fitness is the largest fitness center (in terms of members) in the world, with more than 2,200 clubs, primarily in the United States, Canada, and Australia.

14 Inbound Logistics • April 2022

VERTICALFOCUS

The Peloton Bike+ is the subject of legal battles.

TREADMILL MARKET NOT STANDING STILL Among the oldest exercise equipment categories is the treadmill market, and they remain a popular choice in fitness- minded homes and the health clubs where rows of the machines have long been such a familiar sight, finds a report from Allied Market Research. The report shows that the global treadmill market was valued at $3.2 billion in 2020 and is forecast to climb to $5.9 billion by 2030, enjoying a compound annual growth rate of 5.1%. Treadmills represent the highest-selling exercise equipment category in the fitness industry, “well ahead of others,” according to the Sports & Fitness Industry Association. The treadmill industry now includes hundreds of manufacturers globally, estimates Allied Market Research. Although the category encompasses both manual and electronic treadmills, the treadmill industry is dominated by the electronic-based products. Users have come to expect treadmills that provide sophisticated measurements and guidance, helping them understand the nuances of their workouts and the effort they are putting into them. Treadmills were among the fitness categories to see increased demand when the pandemic arrived and pushed many consumers to seek personal pieces of fitness equipment for their homes. Still, the commercial segment of the global treadmill market remains much larger than the residential segment, according to Allied Market Research. The specialty store segment reigns over franchise and online stores among distribution channels. Allied Market Research points to that segment’s advantages in providing consumers with more detailed expert guidance. However, online stores are expected to be the fastest-growing segment through 2030 as e-commerce becomes increasingly popular and simple for customers to use.

PELOTON PEDALS IT BACK Perhaps no home product will be more associated with the pandemic than the stationary bike, particularly the one made by Peloton. The company’s fortunes have fallen since demand exploded in the first year of the pandemic, and it has faced an array of challenges. In one of the latest legal efforts surrounding the competing home-fitness equipment companies, NordicTrack’s maker iFit Health & Fitness has filed a U.S. trade complaint seeking to block imports of Peloton Interactive’s stationary bikes The case centers on the Peloton Bike+ stationary bikes that alternate between bicycling and weight lifting. InMay 2021, iFit was issued a patent for an invention involving stationary bikes that have free-weight cradles. The company uses the invention in several studio bike models. In its complaint, filed with the U.S. International Trade Commission, iFit says, “The unauthorized use of patented inventions by Peloton is pervasive,” reports the American Journal of Transportation (AJT) . Peloton and iFit already have a legal case over patents in federal court, but AJT notes that the U.S. International Trade Commission tends to work faster than district courts and has the authority to stop products from crossing the U.S. border, which could create a major headache for Peloton. The company’s Taiwan-based manufacturers, Tonic Fitness and Rexon Industrial Corp., are also named in the complaint. The case is not the only one before the trade commission involving Peloton and iFit. Both are accused, along with Mirror owner Lululemon Athletica, of infringing patents for streaming video over the internet by Dish Network Corp. and its Sling TV. In March 2022, CNBC reported on Peloton’s efforts to overcome the struggles it has faced since the surge in the pandemic’s early days, including declining demand for at-home workout products and heightened supply chain expenses. The company’s stock shares dropped 80% over 12 months and it replaced its CEO early in 2022.

Treadmills represent the highest-selling exercise equipment category.

April 2022 • Inbound Logistics 15

LEADERSHIP Conversations with the Captains of Industry

Culture, Collaboration, and Courage

An early job in retail helped Megan Davidson find her calling in human resources. “As store manager, the recruiting and training parts of my job energized me most,” she says. Davidson’s latest role in HR is her position as chief people officer at Crowley, the logistics, government, marine, and energy solutions firm based in Jacksonville, Florida. She entered the C-suite at Crowley in November 2021. We spoke with Davidson about her career trajectory, agenda at Crowley, and strategies for nurturing talent in challenging times. IL: You came to Crowley after 11 years at British Petroleum. What are the corporate culture differences between them? The two companies share many similarities. But Crowley is able to be more purposeful and agile at all levels of the company. Decisions are made faster. Also, people at Crowley have more autonomy to put new ideas into action due to the environment that the leadership team has fostered over the years. IL: Share an early experience that shaped you as a leader. Shirley Bailey, who was HR business partner at Deutsche Bank when I joined that company in 2005, had a big influence on me. First, she took a chance on hiring me. I didn’t necessarily have all the required skills, but I was tenacious and had a strong work ethic. She gave a lot of her time, helping me to build my skill set. She also taught me a great deal about overcoming adversity and the power of attitude. As I’ve stepped into bigger roles, I’ve tried to be just as generous with my time, and sponsor people who need extra support to accelerate their careers. IL: What’s at the top of your agenda since you took on your new role? This is a pivotal time at Crowley. We’re shifting our strategy, with new emphasis on sustainability, emerging energy sources, and digital transformation. The question is how to leverage and reshape our culture as needed to support our goals. We have to make sure our culture works to enable, not hinder, our success. For example, we might need to move quickly to seize a new opportunity that aligns with our strategy. We’re a highly collaborative culture, and collaboration is good, but sometimes it can slow things down. To stay nimble, this may be one area where we need to consider making a shift.

Megan Davidson Chief People Officer, Crowley

Through transparency, honesty, and decisiveness, Megan Davidson champions Crowley employees and makes sure everyone is heard.

by Merrill Douglas

16 Inbound Logistics • April 2022

LEADERSHIP

I seek opinions and perspectives. But once I have them, I’m decisive. I’m comfortable with change and I’m courageous. I’ve always felt my role in HR was to speak on behalf of employees who don’t feel they have a voice. I’ve continued to nurture that quality, making sure people hear the quiet voices and difficult messages. IL: What’s the hardest part of your job? It’s ensuring that leaders across all levels are aligned. Every decision made related to diversity and inclusion, to the work environment, to whether an employee feels developed—stems from leaders. Getting leaders aligned is particularly challenging in a company like Crowley. For example, think of leaders who are out on vessels in the middle of the ocean. We need to ensure that leaders at all levels and in different work environments are all pulling in the same direction. IL: With whom would you like to sit down for a chat? That would be the lecturer and author Brené Brown. Her research shines a light on the need for authentic, vulnerable leaders who lead in their truth. I’d like to hear her thoughts on how leaders choose courage over comfort and make sure we’re not silent on the tougher topics. IL: Beyond work, how do you like to spend your time? I spend most of my free time with my daughters, who are 8 and 11 years old. Sometimes that’s doing a whole lot of nothing; sometimes it’s traveling. I also enjoy reading and gardening. n Know Thyself Employees who meet with Megan Davidson often ask what they should do differently. “How can I make an impact on the job I’m in or the team I’m leading?” they ask. “For me, the answer has always been ‘Get to know yourself better,’” Davidson says. “If you’re in tune with yourself, you’ll see where you’re excelling and where you’re falling down.” One of the best paths to self-knowledge, Davidson says, is simply to contemplate how people react to you in different situations. Keeping a journal can help, too. “Also, ask for advice from the people you might call your board of advisors,” she says. “Those are the ones who won’t tell you just positive things but will provide a balanced response.”

IL: If we followed you around on a typical day, what would we find you doing? I’m in meetings about three-quarters of the day. I spend a lot of time with my peers on the leadership team, working to understand the business context—what challenges they face and where they are trying to move the business. This enables me to adjust the people strategy as needed. I meet with employees to understand how they experience work, what they love, where they encounter obstacles, and where the HR team can support them. I meet with my team to create alignment and build capability. I also try to build in some white space—time to think, educate myself, talk with leaders at other organizations, and talk to third parties. It’s easy to get caught up in the day-to-day. But to recommend a people strategy that supports the organization, it’s important to step back and look above and farther out. IL: How do you collect feedback from employees? My team runs focus groups, but often I’ll just sit with different people at different levels of the organization to find out what they enjoy about the company and what gets in the way. IL: As many companies struggle with the Great Resignation, how are you helping Crowley retain talent? We haven’t seen the volatility that many organizations have. But we need to keep moving to stay ahead of things. We recently went through a review to make sure our pay and benefits are still competitive in the market. We’re studying what work will look like as people come back to the office, eyeing a hybrid model at least for this year but making sure we understand employees’ concerns and needs. We’re getting employees energized about our new brand, including an increased focus on sustainability and a drive toward the future. Also, through our Crowley Cares Foundation, we encourage community involvement. In 2021, we rolled out a policy that gives each employee two paid days off a year to volunteer with organizations that matter to them. IL: What qualities make you an effective leader? The first is transparency. I’ve always tried to be honest— sharing what I know and what I don’t know, where I’m uncomfortable and where I need support. I’m collaborative;

April 2022 • Inbound Logistics 17

NOTED [ IN FOCUS ]

The Supply Chain in Brief

> GREEN SEEDS

> M & A

• Maersk will add 300 electric trucks to its North America network— the largest heavy-duty electric

n Veho, a technology company that enables next- day package delivery, acquired reverse logistics startup QuikReturn . Veho plans to accelerate the Veho Returns product and expand into 50 U.S. markets by the end of 2022. n Deutsche Post DHL Group closed the acquisition of J.F. Hillebrand Group AG (Hillebrand) and its subsidiaries. Hillebrand is now part of DHL Global Forwarding, Freight. n AFS Logistics acquired DTA Services, a freight bill audit, cost allocation, and analytics firm located in Toronto. DTA will continue serving clients under its established brand as an AFS operating company and will maintain its current team, service offering, and location. n Dayton Freight Lines, a provider of regional less- than-truckload transportation services, purchased the cartage division of Valley Companies. Dayton Freight acquired Valley assets including service centers, trucks, and miscellaneous equipment; Valley Logistics and Warehousing is not part of the purchase. n Zebra Technologies plans to acquire Matrox Imaging, a developer of advanced machine vision components and systems, to expand its offerings in the automation and vision technology solution space. n Lineage Logistics acquired MTC Logistics, a cold chain provider with four locations on or near the ports of Baltimore, Maryland; Wilmington, Delaware; and Mobile, Alabama. Through the acquisition of these facilities, Lineage adds nearly 38 million cubic feet of capacity and more than 113,000 pallet positions in the United States.

truck deployment to date. The trucks will be delivered between 2023 and 2025 for use by Performance Team, Maersk’s North American warehousing, distribution, and transportation business. The trucks will be operated using technology company Einride’s digital road freight operating system and charging solutions. • The Massachusetts Port Authority (Massport) aims to reduce carbon emissions across all facilities and become net zero by 2031, coinciding with its 75th anniversary. Its agenda focuses on 100% of the greenhouse gas emissions directly controlled by Massport-owned facilities, equipment, and purchased electricity.

• To increase traceability and transparency in its global palm oil supply chain, Unilever launched a pilot program of the GreenToken by SAP solution. Aiming to achieve sustainability benchmarks, Unilever applied GreenToken to source more

than 188,000 tons of palm oil fruit through a pilot program conducted in Indonesia. The solution helps Unilever track, verify, and report the palm oil supply chain in near real time.

> UP THE CHAIN

• General Motors named Jeffrey Morrison vice president, global purchasing and supply chain. In this role, he will develop supplier relationships and help the company accelerate electric vehicle (EV) launches, building a scalable and sustainable EV supply chain. • Outdoor specialty retailer Sportsman’s Warehouse Holdings appointed Tom Clement as vice president, supply chain/ omnichannel operations. In this newly created role, he leads the company’s distribution, transportation, planning/allocation, and omnichannel operations.

18 Inbound Logistics • April 2022

NOTED

> RECOGNITION

> SEALED DEALS

• Republic National Distributing Company, a wholesale beverage

• EnerSys, a provider of stored energy solutions, earned the 2022 Most Valuable Supplier (MVS) Award from the Material Handling Equipment Distributors Association (MHEDA). Every year, MHEDA recognizes fewer than 10% of all member companies with the MVS Award to acknowledge suppliers that have demonstrated commitment to their dealer network, employees, and the community. • Roadrunner, a less-than-truckload (LTL) carrier, was recognized by Amazon with the On-Time Pickup Performance Award and the EDI Compliance Award. Roadrunner outperformed Amazon LTL carriers with a best-in-class on-time pickup rate and nabbed the second award with its efficient transmission of confidential data via EDI. • Leonard’s Express, a provider of refrigerated trucking, dry van, warehousing, and freight brokerage services, won the Trucking Association of New York’s (TANY) Fleet Safety Award in the large-class, general commodities truckload category. The TANY Fleet Safety Awards recognize member fleets with the best record of safe operation in New York State.

alcohol distributor, selected Manhattan Active Warehouse Management to run its growing supply chain network. The distributor selected the cloud-native solution from Manhattan Associates so it could focus on customer service and plans to roll it out in its distribution centers across North America over the next 30 months. • Consumer goods company Orkla chose HICX, a supplier management platform, to manage its increasingly complex supplier ecosystem and onboard new suppliers with as little operational disruption as possible. Orkla aims to remove friction points from supplier relationships and enable a single version of truth across all supplier data. • Southern Glazer’s Wine & Spirits, a distributor of beverage alcohol, selected Ryder System to restructure its inbound transportation and implement its visibility and collaborative logistics technology RyderShare. The distributor aims to make its inbound supply chain more efcient and resilient, in order to get its suppliers’ products to market even faster.

> GOOD WORKS

> SHOVEL READY

• The CMA CGM Foundation provided humanitarian supplies to Ukrainian civilians in partnership with the CDCS (Crisis and Support Centre of the French Ministry of Europe and Foreign Affairs). The CMA CGM Foundation completed an emergency shipment of 55 tons of humanitarian supplies, including food, tents, and medical equipment, via a cargo plane from Paris to Warsaw, Poland. • The Trucking Cares Foundation donated more than $40,000 to three organizations involved in Ukrainian humanitarian relief efforts: Save the Children, the International Red Cross, and the United Nations Children’s Fund. These organizations were recommended by the group Trucking & Logistics Professionals for Ukraine, which launched a fundraising and awareness campaign in response to the crisis. • Union Pacific donated $500,000 to humanitarian relief for Ukraine, its largest-ever corporate disaster relief donation. The funds will be divided between the American Red Cross and Save the Children and come after UP employees drove nearly $50,000 in matching donations from the company earlier in the year.

n The Canaveral Port Authority broke ground on a $48-million project to rebuild Port Canaveral’s North Cargo Berth 3. Built in 1976, North Cargo Berth 3 has been out of service since 2014. Demolition of the existing pier began in December 2021; it will be replaced with an 880-foot-long multipurpose wharf with the channel width to accommodate larger cargo vessels simultaneously at berth.

Officials from the Canaveral Port Authority joined with leaders from federal, state, and municipal government, along with business and space industry representatives for the ceremonial groundbreaking in Port Canaveral, Florida, on March 25, 2022.

April 2022 • Inbound Logistics 19

TAKEAWAYS [ IN FOCUS ] Shaping the Future of the Global Supply Chain

Russia-Ukraine Supply Chain Strain

CONSUMERS CATCH COLD Growing consumer demand in the United States is impacting the storage and distribution of frozen foods and other products that depend on cold environments, finds the Thomas Index Report. The report examines the shift to buying groceries online during the pandemic, as consumers embraced online ordering and fully filled pantries and freezers. The increased demand for frozen foods means distributors need more refrigerated trucks to handle the available goods and more space in cold storage warehouses to store them. As a result of this demand, freight rates are going up. In March 2022, it cost $4.97 per mile to ship goods by refrigerated truck, a striking jump from $2.93 in early 2020. If demand continues to climb, it could exceed available capacity and drive prices up more starkly. In response, a growing number of third-party logistics providers plan to expand their cold storage capacity in the coming months, building new facilities and acquiring more cold storage warehouses. The growth in cold storage aligns with overall growth in the storage and warehousing sector. The average availability of U.S. warehouse space dropped from 8.5% in the first quarter of 2016 to a mere 5.6% in the first quarter of 2021, says real estate firm CBRE Group. Meanwhile, U.S. warehousing and storage companies have added 420,000 new jobs to accommodate the increased work they are bringing in, reports the Bureau of Labor Statistics.

The commodities markets are the industry category that is experiencing the greatest strain as a result of Russia’s invasion of Ukraine, according to a Dun & Bradstreet briefing report released in March 2022. The report, which assesses the global business impact of the crisis, focuses on the businesses and countries that work with Russian and Ukrainian suppliers. Data compiled by the business intelligence provider shows that 25 countries heavily depend on Russia and Ukraine for a variety of commodities. In particular, at least 374,000 businesses worldwide rely on Russian suppliers—90% based in the United States—and at least 241,000 businesses rely on Ukrainian suppliers—93% based in the United States. The most prominent commodities affected by the conflict include wheat and meslin, coal, and petroleum gases and other hydrocarbons. Of particular concern, the crisis threatens “to widely exacerbate Europe’s energy crisis,” according to the report, which notes that European gas storage levels are at a critically low 33% of capacity. Another concern is Germany placing a hold on the Nord Stream 2 gas pipeline as part of European Union sanctions on Russia. The impact of the Russia-Ukraine crisis on the supply chain includes not only the disruption of trade routes but also increased freight costs and inaccessibility of critical raw materials. The sanctions on Russian companies issued by the United States, the UK, and the EU impact thousands of entities and “further cripple an already weakened global supply chain,” the report says.

Number of countries that have a high dependency on Russian and Ukrainian exports of select commodities

Wheat and meslin

Coal

Petroleum gases and other gaseous hydrocarbons

Barley

Crude Petroleum

Maize (corn)

Source: UN Comtrade, Dun & Bradstreet

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