Lift your supply chain with this insight-packed IL edition covering importing must-do’s and missteps as well as intermodal approaches. Including a site selection special report and a look into an industrial equipment maker’s business intelligence overhaul, this edition helps you elevate supply chain efficiencies.
OCTOBER 2022
ENERGIZING SITE SELECTION
RAISING CRANE Import & Intermodal Strategies to Lift Your Supply Chain THIS EDITION SPONSORED BY THE NORTHWEST SEAPORT ALLIANCE
BITE SIZED SUPPLY CHAIN/LOGISTICS INFORMATION Info SNACKS
50 to 100% of workload Average time freight forwarders, traders, and NVOCCs say they spend each week on monitoring and managing containers.
GETTING SUPPLY CHAIN DOWN TO A SCIENCE “Supply chain has probably done just as much, if not more” than the innovative science that Pfizer and other drug companies used to produce the new COVID-19 vaccines that have been distributed around the world. – Jim Cafone, Pfizer’s senior vice president of global supply chain, during a supply chain conference in September 2022.
1,000 ITEMS PER HOUR The picking capability of a new pinch-grasping robot that Amazon is testing for e-commerce fulfillment. Amazon is teaching robots how to understand cluttered environments in three dimensions, locate specific items, and pick them using a pinch grasp, or a thumb and finger hold.
– Container xChange
3DPRINTED PARTS DRIVE WORLD’S FASTEST AIRCRAFT Hypersonic aircraft startup Hermeus will make parts for its Chimera engine and Quarterhorse aircraft using Sapphire 3D printers from Velo3D. Hermeus is aiming for the Quarterhorse aircraft, named after a horse breed known for its ability to sprint short distances, to reach a top speed of Mach 5 at a cruising altitude of 95,000 feet. Quarterhorse will be autonomous or remotely piloted. The company also plans to make the aircraft fully reusable. Additive technology will help consolidate components, minimize external dependencies, increase performance, and reduce aircraft weight. Quarterhorse’s rst ight is scheduled for 2023. If successful, passengers will be able to cross the Atlantic Ocean in 90 minutes. – Thomas Insight
Till We Meat Again What’s up with Beyond Meat? First, the plant-based meat producer eliminated the role of chief supply chain of cer after Bernie Adcock stepped down for another position. Then, the company’s operating chief Doug Ramsey was arrested for allegedly biting a man’s nose. We’ll just leave it at that. – CNBC report
October 2022 • Inbound Logistics 1
CONTENTS OCTOBER 2022 | VOL. 42 | NO. 10
FEATURES 34 TOP 12 IMPORTING DO’S AND DON’TS
34
To operate a supply chain that meets today’s global logistics challenges, importers need to rethink some approaches. These 12 strategies can be key components of a comprehensive plan.
44 SPONSORED
38
ENERGIZING SITE SELECTION What sparks site selection decisions? From strategic locations to tax incentives to organizations that develop custom solutions, discover the factors that juice the site selection process.
44
38 RAIL TO THE RESCUE?
ABOUT THE COVER Cranes at the Port of New York and New Jersey’s Port Jersey container terminal. Its six
When the supply chain turns volatile and the trucking market gets tough, finding alternatives to over-the-road transportation can save the day.
terminals and public berths handle all cargo types, from
containers and roll-on roll-off cargo to bulk, breakbulk, and specialized project cargo.
2 Inbound Logistics • October 2022
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CONTENTS OCTOBER 2022 | VOL. 42 | NO. 10
GOOD QUESTION If you could invent one tool to help you do your job better, what would it be?
14
The agricultural sector plows ahead
10
16
28 LEAN SUPPLY CHAIN Supply chain forecast: cloudy 30 IT MATTERS Why IoT is not the answer 32 SMART MOVES Becoming a successful female mentor in male-centric industries INFO 58 SUPPLY CHAIN INSIGHTS 60 WEB_CITE CITY 70 RESOURCE CENTER 71 CALENDAR
INFOCUS 1 INFO SNACKS 14 VERTICAL FOCUS: AGRICULTURAL COMMODITIES 18 NOTED 20 TAKEAWAYS 66 IN BRIEF 72 LAST MILE The trucking sector is in it for the long haul INSIGHT 6 CHECKING IN What do the cans tell us? 8 DIALOG 10 GOOD QUESTION
12 10 TIPS Moving to a cloud-first strategy 24 SPONSORED SOLVED WMS enables automation orchestration for e-fulfillment 26 SPONSORED ABOVE & BEYOND Getting logistics players in place for a make-or-break season
INPRACTICE 16 READER PROFILE Anne Meyrose, vice president, logistics control tower with Gap, leads a new team that is charged with ensuring the company’s logistics network is set up to move the right product, to the right place, at the right time. 55 TOOLKIT Industrial equipment maker E.D. Etnyre & Co. turned to Tada Cognitive Solutions to help create an enterprise- wide repository of data to track material costs and other expenses, identify trends, and schedule production.
66
If you could invent one tool to help you do your job better, what would it be?
New cargo services take flight
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 • October 2022
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Vol. 42, No. 10 October 2022 THE MAGAZINE FOR DEMAND-DRIVEN ENTERPRISES www.inboundlogistics.com
What Do The Cans Tell Us?
STAFF PUBLISHER Keith G. Biondo
D espite possible future disruptions, Stefan Paul, CEO of Kuehne+Nagel, arguably the world’s largest air and sea freight forwarding business, sees bright spots ahead for global shippers and brokers in the coming months. The recent telltale movements of shipping containers, or cans, give insight into those future global trading patterns. Plenty of crowdsourced intelligence is available to show how smart supply chain managers and their
publisher@inboundlogistics.com
EDITOR Felecia J. Stratton
editor@inboundlogistics.com
SENIOR EDITOR Katrina C. Arabe
karabe@inboundlogistics.com
MANAGING EDITOR Robert Fee
rfee@inboundlogistics.com
CONTRIBUTING EDITORS Merrill Douglas • Karen M. Kroll Richard Osborne • Amy Roach
CREATIVE DIRECTOR Jeof Vita
Keith Biondo, Publisher
jvita@inboundlogistics.com
DESIGNER Nicole Estep
enterprise leaders are adjusting to the macro trade environment expected in 2023. To latch on to those global supply chain bright spots that Paul predicts, what can we learn from container movement patterns? Plenty. Malaysia, Vietnam, and Singapore are now strong contenders for a China plus one strategy for 2023 and beyond, according to a Container xChange analysis. An intriguing trend tracked in August shows a 36% increase in average container prices from those countries and a 21% increase in one-way leasing rates for containers in Southeast Asian countries overall. From a different angle, average leasing rates for containers—all types, all conditions—from China to the rest of the world fell from $1,454 in July 2022 to $1,080 in August. An additional data point is that the average leasing rates for seaworthy cans rose from $607 in July 2022 to $738 in August from Southeast Asian lanes to the United States. What’s the net result of this repositioning? Vietnam’s exports hit $336 billion in value, up 19% from the prior year even in the face of the pandemic. Global investment in Vietnam production is way up and is driving the export boom while China’s exports face headwinds—some internal with lockdowns and energy-related plant shutdowns and some external with the softening appetite for consumer goods in the West. To put things in perspective, with consumption patterns of Chinese goods shrinking, high in ation, and an inexplicable energy policy, smart leaders managing global supply chains will clearly continue to increase redeployment to alternative Southeast Asian countries like Singapore, Malaysia, Vietnam, and others. China’s recent customs data for exports shows an increase of only 7.1%; analysts expected a 13% rise. Here’s another measure of a shift in container ow. Volume at The Port of New York and New Jersey in August 2022 increased by 24.1% compared to August 2019, moving 843,191 TEUs (twenty-foot equivalent units). The seaport marked the busiest August in its history, placing it as the top port in the nation and eclipsing West Coast, China-centric ports. That’s what those cans tell us.
nicole@inboundlogistics.com Amy Palmisano apalmisano@inboundlogistics.com
DIGITAL DESIGN MANAGER
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 distributed without cost to those qualified in North America. 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 • October 2022
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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
CELEBRATING 20 YEARS AS AN IL TOP 100 3PL
In Harmony
Your May 2022 cover ts me. I had a long career in global logistics with shipper and container carriers until I retired and still
consult. I started in Army transportation managing the Port of Naha Okinawa during the Vietnam War and worked early on at Sealand. I used that service experience for the rest of my career, mostly with major shipping lines in New York City. Your music cover also re ects my latest new venture with a local church choir and a special event in Carnegie Hall—Jubilate NYC 2022—last July as part of the chorus. Amazing how your timing with music and logistics ts with mine. —John Morris Via email Re. 10 Best Paying Trucking Companies bit.ly/truckingcompanies_bestpay I am upset and sad to see unsustainable information regarding truckers’ salaries listed as $41+ per hour. This is not true. I have been a truck driver for almost two decades and never came close to $41/hour. There is a big difference from East to West: $18-20 East Coast vs. $23-25 Midwest and $28-35 West Coast. That is with many years of experience and a clean, no-accident record. You would also do well to mention the danger of driving, what truckers go through every day to deliver on time and meet everyone’s needs (physical and dirty work, sleeping in a metal box) and not being appreciated. —Humble driver
who have contributed to our success. We took a group photo with our banner, which now hangs in our warehouse. Everyone was excited to celebrate. Thanks for establishing this recognition and allowing our team to feel appreciated for their hard work.
Evans Distribution Systems is thrilled to celebrate our 20-year recognition as an Inbound
Logistics Top 100 3PL. In honor of this milestone, we hosted a company-wide picnic at our headquarters to celebrate all
—Morgan Zenner Director of Marketing Evans Distribution Systems
Re. Good Question: What’s your best tip for retailers pivoting to direct- to-consumer ful llment? bit.ly/Aug22_GoodQuestion
pro les average 1.8 items per order, which requires signi cant batching logic to minimize picker travel. —Michael Wohlwend Managing Principal Alpine Supply Chain Solutions
Under promise and over deliver. Be conservative in promises of shipping and delivery times. You’re less likely to get burned by a transaction and a negative review.
TWITTER CALL-OUT
@Supernetworks I have had an IL subscription for
—Barbara Rainville Marketing Manager Maple Landmark Woodcraft
years and have even used articles in my classes at UMass Amherst. Thanks for the great magazine. —Anna Nagurney Eugene M. Isenberg Chair in Integrative Studies Director of the Virtual Center for Supernetworks
After completing more than 50 storage type analysis projects, we’ve noticed one consistent thing: Retail order pro les have more items and the quantity of each item is higher, which allows for picking bene ts. Direct-to-consumer ful llment order
8 Inbound Logistics • October 2022
GOODQUESTION Readers Weigh In
If you could invent one tool to help you do your job better, what would it be? Translate This GPS-ENABLED PAPER. Incorporate a GPS locator with a shipment’s packing slip. The question I routinely get is,
“Where is my shipment?” While some carriers excel at this, some struggle. With this invention, I would have the answer to everyone’s question. –Brian Gaffney
The ultimate translator defining our words. It would be a form of closed captioning, defining the meaning of the words people use to communicate with. The notion of establishing meaning up front and speaking the same language allows for faster communication and less rework over misunderstandings.
Supply Chain Specialist Natural Fiber Welding
–Matt Reddington Vice President, Operations, Procure Analytics
A DANGEROUS GOODS (DG) COMPLIANCE APP that connects with your transportation management system, warehouse management system, and enterprise resource planning system to validate your DG shipments against current regulations, reducing manual intervention and rejected shipments. The app also would help ensure your DG shipments are packaged, marked, and transported compliantly from any of your shipping warehouses. –Mario Sagastume VP, Software & Customer Success Labelmaster A SOCIAL NETWORK FOR SUPPLY CHAINS. Except it’s only somewhat social and includes a marketplace to collaborate around the exchange of goods and services. The idea here would be that companies can build partnerships, drive key cross- organization workflows, and share/ host feedback to build credibility.
A device that is able to decipher every document , email, and conversation about freight, transportation, and supply chain and pull out the most relevant information depending on who is using the device. Shippers, receivers, manufacturers, customers, dock workers, and drivers wouldn’t need to waste time scouring over pages hunting for their information; it would be easily found and perfectly organized. –Whit Smith Director of Operations, TA Services A widely accepted universal logistics language. There is some standardization, but that which is not standardized still adds length, time, and complexity to the process and dialogue. A language is a tool. If one could be “written” that bridged the elements that are international standards with those that still differ, then significant time, money, and resources would be saved. –Richard Kohn Director, Marketing & Business Planning, SeaCube Containers
enable multilevel quantitative analysis to explore the effects of forward and backward disruption propagation, moderated by network structure, network status, and node-level vulnerability.
how our solutions could help them address these challenges. However, it would be awesome if we could have a 12-month head start over such challenges arising in the first instance. –Tony Harris
–Sanjay Sharma CEO, Roambee
SVP and Head of Marketing and Solutions, SAP Business Network
–Peter Rifken Principal Solutions Consultant, Quickbase
A TOOL THAT EXAMINES HOW SUPPLY CHAIN OUTAGES PROPAGATE by simulating different scenarios considering past and current demand, disruption risk, material flow, and more. Specifically, the tool could
ARTIFICIALLY INTELLIGENT CAPACITY SYSTEMS. Every year, 29 billion empty truck miles are recorded in the United States. Artificial intelligence (AI) allows us to create systems that alert the network of
A CRYSTAL BALL. As solution providers, we talk a lot with the community about the challenges facing logistics ecosystems and supply chains, and we collect feedback on
10 Inbound Logistics • October 2022
GOODQUESTION
available space and maximize truck capacity by picking up extra loads. This drives up revenue and creates a more efficient supply chain.
It’s Already Here AI-driven sustainable materials testing . It hasn’t quite made an impact yet, but it will in the next five years. Often new sustainable materials require significant work to source them, then test them to figure out what is feasible and at what cost; this process can take years. AI is in the early stages of proving we can reduce testing times. –Ian Arthurs Founder and CEO, Circular.co Advancements in RFID technology, including the ability to track temperature, humidity, and light, are game changers in the agricultural supply chain space. Passive data collection allows for real-time identification of issues and opportunities that optimize supply chain velocity and quality. –Michael Johnson CEO, Metrc Software that helps create visibility into supplier practices has been the greatest recent innovation. Combined with risk intelligence, it helps me quickly understand how suppliers would react to potential disruptions, allowing me to advise my clients on how to plan ahead and be proactive. –Tony Pelli Practice Director, Security and Resilience, BSI Teleportation, cost-effective massive 3D printers, cloning, automated trucks , AI . It’s all going to happen eventually. –Chris Krawczyk VP, National Sales, UWL
–Rick Burnett CEO, LaneAxis
A TOOL THAT CONSOLIDATES DATA IN REAL TIME FOR EVERY SHIPMENT. While today’s technologies can solve operational issues, the barrier is the lack of transparency and data sharing capabilities across the supply chain. –Carmit Glik CEO, Ship4wd A DIGITAL TWIN OF MY ENTIRE ECOSYSTEM — my enterprise, suppliers, contract manufacturers, distributors, etc. That digital twin would have real-time visibility and concurrent planning capabilities, provide quick assessments of the impact of changes in the ecosystem, and have the ability to do quick what-if scenarios and drive rapid decision making. –Allen Jacques Industry Thought Leader, Kinaxis DYNAMIC FREIGHT MATCHING that can be easily managed across multiple platforms. Many companies have platforms that “match” carriers with available loads based on a multitude of variables, but there’s still a lot of manual operation behind the scenes. In a true dynamic freight matching environment, carriers would be linked with loads across multiple platforms and supply chains. Shippers would be able to use the best carriers to meet their deliverable metric goals and optimize a carrier’s time, creating the optimal efficiency gains. –Andrew Dunbar Director of Account Management Shipwell A SYSTEM TO HELP UPSKILL TRUCK DRIVERS and give them opportunities to grow their job into a career. Your drivers are your ambassadors—give them more responsibility in a world marked by recruitment and retention issues. Current drivers could be a sales engine. –Kyle Humphries Solutions Engineer, Rose Rocket
AN INTELLIGENT, MULTIMODAL TMS for SMB shippers and carriers that provides this underserved market with a single platform that automates and simplifies the entire transportation process—serving SMBs’ logistics needs the way NetSuite handles accounting or Workday manages HR functions— consolidating tasks, optimizing loads, enhancing visibility, at no cost. –Mark Carroll EVP Product Strategy, Transportation Insight & NTG
A REAL-TIME MARKET ANALYTICS UPDATE GENERATOR. It would give transparent, fair, live quotes based on capacity, fuel costs, weather emergencies, and truck-to-load ratios. –Ashley McMillan Senior Sales Manager, Denim
A STAR TREK TRANSPORTER. It could charge whatever I wanted.
–Dale Young VP, Warehousing & Distribution World Distribution Services
Have a great answer to a good question? Be sure to participate next month. We want to know: Do you think supply chain globalization is in retreat? Why or why not? We’ll publish some answers. Tell us at editorial@inboundlogistics.com or tweet us @ILMAGAZINE #ILGOODQUESTION
October 2022 • Inbound Logistics 11
10 TIPS
The benefits of cloud computing are driving many companies to adopt a cloud-first strategy. System migrations can be complex and intimidating, but with some preparation, your transition can be straightforward. Here’s how to start your cloud journey. Moving to a Cloud-First Strategy
1 DETERMINE THE JUSTIFICATION AND BENEFITS OF THE CLOUD FOR YOUR BUSINESS.
8 GET ALL TEAMS ON THE SAME PAGE. Your internal team, your ERP provider, and your implementation team
The benefits of moving to the cloud may include increased security, outsourcing of value-adding system maintenance work, the ability to adopt innovation, access to real-time data and business intelligence and analytics, increased efficiency, better inventory control, and lower total cost of ownership.
should sync. Setting goals, expectations, and milestones will help smooth your organizaton’s migration to the cloud. 9 COMMUNICATE, COMMUNICATE, AND COMMUNICATE! Keeping your team fully informed of the process— the why, who, where, when,
2 SET SIGHTS ON A CLEAR VISION. Set a clear vision of what you want to achieve from your move to the cloud. What application areas—email, human resource programs, enterprise resource planning, supply chain management, and others do you want to move? When, and in what order, do you want to move them? 3 ENSURE THE BENEFITS ALIGN WITH YOUR LONG- TERM BUSINESS STRATEGY. Major technology upgrades need to fit into and support your long-term business strategy. Ensure you understand the different cloud approaches. For example, learn the difference between the value of multi- tenant and public cloud over single-tenant and private cloud. 4 CREATE AND SEND A REQUEST FOR PROPOSAL. If you have experience with software request for proposals (RFPs), you may want to write one in-house.
If you are not comfortable doing this yourself, several companies specialize in this service. 5 CHOOSE A CLOUD PROVIDER PARTNER. There are many enterprise resource planning (ERP) and cloud providers to choose from. Some take a blanket approach, while others take an industry-specific approach. Companies such as Gartner, Nucleus Research, and Constellation Research provide unbiased rankings of software providers. No company utilizes only one software provider. It is critical to have an ERP that integrates with your other software to ensure you have one source of truth from a data perspective. Efficient use of artificial intelligence and machine learning requires access to all your relevant data. 6 ACCESS POTENTIAL RISKS. Any move to the cloud will involve risk. Is your organization prepared? Do you have the required staff and bandwidth to
facilitate the necessary change management? Are there any compliance risks? Is adequate bandwidth available? 7 DEVISE A STRATEGY FOR CHANGE MANAGEMENT. A move to the cloud will affect everyone in the organization and how they work. It is vital not to underestimate how this move will affect your people and how they may react with resistance to it. You may want to handle the change management internally, or you may want to seek support from a third-party provider.
and how the migration will occur—is essential.
Establishing honest dialogue about the work that will be needed and acknowledging the stress and extra workload is necessary. Provide regular updates company-wide. Understanding what is happening will ease some of your team’s fears.
10 USE YOUR NEW CLOUD TECHNOLOGY TO ITS FULL CAPABILITY.
Once you have moved to the cloud, periodically review your plan to ensure you achieve the vision. Your IT staff will have to learn how to unlock the potential of the cloud for your organization. Adopt a dynamic training system to teach your current and future staff how to best use the technology provided.
SOURCE: WILL QUINN, DISTRIBUTION INDUSTRY PRINCIPAL, INFOR
12 Inbound Logistics • October 2022
Agriculture/Bulk Agriculture Commodities
Both clear skies and stormy weather are in the forecast for the agricultural sector. That’s the mixed- bag conclusion from a September 2022 panel discussion at the Ag Outlook Forum in Kansas City, Missouri. The panel of experts—including Kip Tom, former ambassador to the U.N. Food & Agriculture Organization, and Daniel Whitley, administrator for USDA’s Foreign Agricultural Service—stated that U.S. farmers right now are in a good economic position. Both incomes and land values are far higher now than they were before the pandemic, they noted. The group pointed to ongoing macro-economic challenges and impact from the war in Ukraine as factors that are wreaking havoc on supply chains and putting increasing expectations on U.S. farmers to increase production of crops such as wheat. They expect supply chain challenges—a backlog of agricultural equipment and parts, manufacturing disruptions stemming from China’s continued zero-COVID policies, and the potentially fragile energy situation in Europe as a result of the Russia- Ukraine conflict. Agricultural labor is another potential disturbance. A glut of unfilled jobs in the dairy industry is particularly worrisome, the panel noted. AG OUTLOOK: MI XED
FOOD COMMODITY PRICES DROPPING—BUT STILL INFLATED The latest Food Price Index, released in September 2022 by the UN Food and Agriculture Organization (FAO), shows that the prices of five key commodities—cereals, vegetable oil, dairy, meat, and sugar— have fallen for a fifth consecutive month. The good news is tempered by the fact that prices are still nearly 8% higher than they were one year ago. The Index, which tracks the monthly international prices of these breadbasket staples, averaged 138 points in August, down nearly 2% from July, though 7.9% above the value one year before. Here’s a breakdown: • Cereal: A landmark agreement in July 2022 that unblocked Ukraine grain exports amid the ongoing war has helped to lower cereal prices. Production expectations are still tight, however: FAO’s global cereal production forecast projects a decline of nearly 40 million metric tons, or 1.4% from the previous year. • Cheese: Although dairy prices saw a 2% drop, they remained 23.5% higher than in August 2021. The price of cheese increased for the 10th consecutive month. • Meat: The price of meat declined by 1.5% but remained just over 8% higher than the value last August. Meat prices declined due to weak domestic demand in some top exporting countries, the report notes. • Sugar: Sugar prices hit their lowest level since July 2021, largely due to high export caps in India and lower ethanol prices in Brazil. • Vegetable oil: Prices decreased by 3.3%, which is slightly below the August 2021 level. FAO attributes this to increased availability of palm oil from Indonesia and the resumption of sunflower oil shipments from Ukraine.
14 Inbound Logistics • October 2022
VERTICALFOCUS
MUCH ADO ABOUT COTTON The world’s most widely used natural fiber for clothing, cotton is a key agricultural staple around the globe. As such, the twists and turns in its pricing tell an important economic story. After a super-high peak in spring 2022, cotton prices dropped significantly, according to the September 2022 USDA report. A variety of factors, including demand, harvest conditions, and the value of the U.S. dollar all come into play. Key highlights from the USDA’s most recent data include: • Cotton futures shed 25% since late August. • The most actively traded futures ended the month at 88 cents a pound, down more than 40% from May’s peak of 140 cents per pound, which was the highest price in more than a decade. (Also worth noting: Cotton prices have only exceeded $1 a pound three times since the late 1950s.) • One factor driving the cotton price drop is negative forecasts from clothing manufacturers, who cite concerns over high energy costs and waning consumer demand. • Another reason: Analysts believe inflation will drive consumers to focus their spending on essential items, leading to a decrease in clothing purchases. • Drought is also an issue. The U.S. cotton crop has been hard-hit by dry weather over the growing season, causing supply worries, which impact prices.
MOVING FERTILIZER PRODUCTION FORWARD The U.S. Department of Agriculture recently announced $500 million in federal grants under The Fertilizer Production Expansion Program, part of a government effort to promote competition in agricultural markets. The funds are being made available through the Commodity Credit Corporation and will be used to support independent, innovative, and sustainable American fertilizer production to supply American farmers. Funds also will expand the manufacturing and processing of fertilizer and nutrient alternatives in the United States and its territories. The program will support fertilizer production that is: • Independent, and outside the orbit of dominant fertilizer suppliers. Because the program’s goal is to increase competition, market share restrictions apply. • Made in America. Products must be produced by companies operating in the U.S. or its territories, to create good-paying jobs at home, and reduce the reliance on potentially unstable, inconsistent foreign supplies. • Innovative. Techniques will improve fertilizer production methods and efficient- use technologies to jumpstart the next generation of fertilizers and nutrient alternatives. • Sustainable. Ideally, products will reduce the greenhouse gas impact of transportation, production, and use through renewable energy sources, feedstocks, and formulations, incentivizing greater precision in fertilizer use. • Farmer-focused. Like other Commodity Credit Corporation investments, a driving factor is providing support and opportunities for U.S. agricultural commodity producers.
GREEN SNAPSHOT: SCOTTSMIRACLE-GRO North America's leading recycler of compost, ScottsMiracle-Gro, redirects green waste into its products to support the concept of circularity. Doing so prevents green waste, such as grass and tree trimmings and waste from commercial landscaping, tree cultivation, and agriculture, from ending up in landfills. The company also supports a “growing local” strategy, counting on a network of small and mid-size companies as agricultural partners. The result? A bag of ScottsMiracle-Gro soil is sourced, produced, and used within a 120-mile radius on average. And, the company recycles roughly 9 billion pounds of green waste each year.
October 2022 • Inbound Logistics 15
READERPROFILE
as told to Karen Kroll
Filling the Gap
ANNE MEYROSE is vice president, logistics control tower with Gap Inc., the apparel company behind the Athleta, Banana Republic, Gap, and Old Navy brands.
RESPONSIBILITIES: Lead newly created team charged with ensuring the company’s logistics network is set up to move the right product, to the right place, at the right time and bring each brand’s vision to life. Lead track and trace for all product movement, KPI reporting and network visibility, and serve as single point of
contact with each brand on behalf of the network. EXPERIENCE: All with Gap, Inc.: senior director, transportation; director, transportation service operations; manager, Gap logistics planning; planner, Gap Outlet logistics planning; transportation supervisor, service contact
center; transportation analyst, methods and programs; transportation specialist, methods and programs; outbound transportation, store services. EDUCATION: B.S., economics; M.S. executive human resource development; both from Xavier University.
I n college, I was an economics major. Supply chain and operations were nowhere on my radar. Then I landed a part-time job with Banana Republic and fell in love with the culture of Gap, Inc. A local internship became available on the transportation team. I wanted to do whatever I could to stay with the company and learn more, so I took it. I was fascinated and inspired by the impact of the supply chain function and the opportunity it presents to connect across nearly every aspect of the business. I’ve now been with Gap for almost 17 years. Each year has brought something new. For instance, several years ago, I was asked to lead our transportation reporting and analytics team. I had little technical background and worried this would leave the team without the direction it needed and be my career
the need for leadership and setting the vision and strategy. It was an eye- opening career move. I also spent time within the Gap brand, stepping out of the supply chain role and into the shoes of our “customer” or brand partners. I learned not just what our brands need, but how it relates to their commercial strategies. Even today, this opportunity impacts how I make decisions and lead my team.
downfall. It’s intimidating to go into an area where you don’t have functional expertise and ask questions in a way that’s professional and poised. With the support of a talented team and great mentors, we delivered a full-scale reporting overhaul and automation initiative that changed how our operating teams can monitor the network and proactively mitigate risk. This experience helped me understand and respect the difference between the need for functional expertise and “Supply chain is about much more than on-time deliveries and capacity utilization.”
TAKING THE LEAD When I moved back into
transportation, I had the opportunity to lead nearly every aspect of our North American operations teams, and work closely with our incredible carrier partners, who bring our network plans to life. Learning the complexity of each node of our transportation network has been invaluable in preparing me for my
16 Inbound Logistics • October 2022
READERPROFILE
current role of leading our transformation strategy. We have so much exciting transformation and digitization work ahead. Our strategy is to redefine and digitize our transportation operating model, bringing together data, metrics, and events across the supply chain to proactively identify, quantify, and mitigate network risk, while protecting margin. We’re also laying the groundwork to unlock more advanced capabilities. Supply chain is about much more than on-time deliveries and capacity utilization. It has been an unexpected career path, but I wouldn’t trade it. n
Anne Meyrose Answers the Big Questions 1 What’s the best leadership/supply chain advice you ever received? A mentor told me, ‘When things are hard
chain sector is changing at such a rapid pace. 4 If you could attend any event in the world—past, present, or future—what would you choose? It would have been fascinating to attend the World’s Fair in the late 19th century, in an age of so much technological advancement and innovation. 5 If you could speed the development of a supply chain-disrupting technology, what technology would it be and why? By its nature, this is a highly physical industry, with goods moving all over the world. Advanced visibility technology and analytics are rapidly developing and can’t get here soon enough.
or ambiguous you can be scared and jump back, or you can get excited and lean in. Always lean in.’ 2 What hobbies/activities make you better at supply chain management/ handling logistics? I have two young kids, and nothing in supply chain management or logistics could be more challenging than the role of a parent. Parenting is about time management, prioritization, and being quick on your feet. 3 What book title best describes your job? Brave New World , because the supply
asi_halfpgIL_1022_final_• 9/22/22 10:17 AM Page 1
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NOTED [ IN FOCUS ]
The Supply Chain in Brief
> GOOD WORKS
> SEALED DEALS
• Global athletic brand Puma deployed Manhattan Associates’ WMS at its largest distribution center in China, an approximately 753,000-square-foot facility in Taicang, Jiangsu Province.
• WEG , which manufactures around 19 million electrical motors annually, selected Logility’s Digital Supply Chain Platform to support its global supply network management. WEG chose Logility’s demand planning tool to support inventory replenishment in its U.S. distribution business. • Valvoline selected OMP’s Unison Planning to drive business transformation. OMP will assist Valvoline with tools to streamline decision-making cycles, increase supply chain visibility, and predict demand more precisely. • Confluent Medical Technologies, which designs, develops, and manufactures medical devices, now uses the Kinaxis RapidResponse platform to improve planning accuracy and inventory management. • Parts Town, a global distributor of OEM parts for the foodservice industry, debuted a pilot program with Uber Technologies to provide two-hour, last-mile delivery service to Chicago-area foodservice operators and service technicians. • Global construction engineering company Aegion selected Ivalua’s cloud-based spend management solution to help digitally transform its procurement and supply chain operations.
• Flood victims in KwaZulu-Natal, a coastal South African province, received a donation of more than 400 pairs of shoes from Bolloré Logistics USA . Bolloré partnered with Boots for Africa and sponsored the donation's transportation and logistics requirements.
> UP THE CHAIN
• Long-term Target executive Gretchen McCarthy was named the retailer’s executive vice president and chief supply chain and logistics officer. McCarthy has held a wide range of leadership roles across the company, in supply chain transformation, merchandise planning, and buying.
• Tamera Fenske was appointed Kimberly-Clark’s chief supply chain officer with global responsibilities for procurement, manufacturing, logistics, transportation, safety, and sustainability. Most recently, Fenske served as senior vice president of manufacturing and supply chain for 3M Company.
• WINIT, a Chinese cross-border warehouse operator, partnered with robotic systems manufacturer HAI Robotics to deploy around 100 robots to help pick and sort at WINIT’s approximately 322,000-square-foot warehouse near Birmingham, England.
• Metro Supply Chain tapped Chris Fenton as president and CEO. Previously, Fenton served as managing director and executive team member at Wincanton Plc, a UK supply chain solutions company.
18 Inbound Logistics • October 2022
NOTED
> M&A
> GREEN SEEDS
n To strengthen its presence in Mexico and expand temperature-controlled storage and transportation infrastructure, DHL Supply Chain acquired pharmaceutical and healthcare logistics specialist NTA-New Transport Applications.
n Renault Trucks opened a used parts factory in Vénissieux, France, where the company will dismantle trucks and reuse parts. To reduce its natural resource usage and the environmental impact of its fleet, the company is transitioning to a circular-economy approach.
n Transportation and logistics firm GEODIS acquired Need It Now Delivers to increase its U.S. contract logistics and last-mile delivery capabilities.
n Asset-based pallet management services provider PLA acquired TaylorMade Pallets & Logistics , a family-owned provider of new, recycled, remanufactured, and custom-sized pallets.
n Lufthansa Cargo now uses a new, thinner type of film consisting of 10% recycled plastic. The
n Heartland Express announced a $525-million deal to acquire from TFI International its Contract Freighters non-dedicated U.S. dry van and temperature-controlled truckload business and CFI Logistica operations in Mexico. n RoadOne IntermodaLogistics is growing its national footprint with two acquisitions: Wilmac Enterprises, a domestic intermodal and drayage company in Fort Worth, Texas, and R&A Trucking Company based in Oakland, California.
company also set a goal to increase the recycled content of its plastic film to 30% by 2025. n As part of its commitment to tackling climate change, Cathay Paci c extended its Fly Greener program to air cargo services. A carbon-oset program powered by an integrated carbon emissions calculator, Fly Greener enables shippers to purchase carbon osets via their air waybill number. n To accelerate its energy transition and achieve net-zero carbon by 2050, CMA CGM Group launched a $1.5-billion Special Fund for Energies. The fund helps support industrial production of new fuels and low-emission mobility solutions to be used across the group’s maritime, land and air freight, port, and logistics services units.
n Charlotte-based third-party logistics brokerage HTL Freight acquired Illinois-based 3PL ATTS Logistics to expand its less-than-truckload oering.
> RECOGNITION
• CFI won the 2021 Best in Cargo Security Award , large motor carrier category, from CargoNet Group. CargoNet cited CFI for overall exemplary performance, lauding its security and fraud prevention program that uses machine learning algorithms and predictive analytics to identify and anticipate cargo theft threats. • Schneider was recognized by Forbes as a Best Employer for Women in 2022. Determined by an independent survey from a sample of 50,000 U.S. employees—30,000 of whom are women—the honor validates Schneider’s commitment to workforce diversity. Women make up 10% of Schneider’s drivers and 41% of leadership roles across the organization.
October 2022 • Inbound Logistics 19
TAKEAWAYS Shaping the Future of the Global Supply Chain
Against All Odds, Trade Going Strong “Resilient” seems to be the key word to describe global trade today. Despite myriad challenges—the aftermath of the pandemic, inflation, the war in Ukraine, a rocky stock market—global trade is persisting at strong levels, according to the latest DHL Trade Growth Atlas, published by DHL and the NYU Stern School of Business. The report maps the most important trends and prospects of global trade in goods, covering 173 countries. Key takeaways include: • International trade in goods has surged as high as 10% above pre-pandemic levels, even in the face of significant supply bottlenecks that constrained further growth. • Prospects for future trade growth remain surprisingly positive. Due to the war in Ukraine, trade growth forecasts have been downgraded, but they still call for trade to grow slightly faster in 2022 and 2023 than it did over the preceding decade. • E-commerce sales boomed during the pandemic (see chart) and forecasts point to strong cross-border e-commerce growth continuing. • Trade growth is spread across a wider variety of countries. China accounted for one- quarter of trade growth in recent years and is predicted to continue to have the largest growth, but its share is likely to fall by half, to 13%. Vietnam, India, and the Philippines stand out on both speed and scale of projected trade growth through 2026. All three have potential to benefit from efforts by many companies to diversify China-centric production and sourcing strategies. DHL TRADE GROWTH ATLAS 2022 GLOBAL E-COMMERCE: UNPRECEDENTED SURGE DURING COVID-19 PANDEMIC DHL TRADE GROWTH ATLAS 2022 GLOBAL E-COMMERCE: UNPRECEDENTED SURGE DURING COVID-19 PANDEMIC
ON MANUFACTURING PESSIMISM: “Given current economic trends, it’s understandable that manufacturers’ optimism is declining. Yet, increased demand offers some promising news. To keep up, business leaders should diversify their material suppliers and challenge logistics providers to find ways to tighten delivery times. And, to address employee shortages, companies must revisit their talent strategies and implement comprehensive recruitment and talent development programs.” —Jerry Murphy,
SHARE OF RETAIL SALES 2019-2021 16 % 19 % (UN Data) SHARE OF RETAIL SALES 2019-2021 16 % 19 % (UN Data)
partner in charge of manufacturing and
distribution services at Sikich, explaining the reason for declining manufacturing optimism.
OUTLOOK: CROSS-BORDER E-COMMERCE TO SOAR 2020-2030 from $300 bn to $1 tn OUTLOOK: CROSS-BORDER E-COMMERCE TO SOAR 2020-2030 from $300 bn (McKinsey) to $1 tn
SOURCE: Sikich Industry Pulse: Manufacturing & Distribution report
(McKinsey)
Source: DHL Trade Growth Atlas
#DHLtradegrowth For more information visit: dhl.com/tradegrowth #DHLtradegrowth For more information visit: dhl.com/tradegrowth
20 Inbound Logistics • October 2022
TAKEAWAYS
With several key federal bills that bring dollars to logistics and transportation infrastructure passing recently, it can be hard to keep track of which funds are going where—and what it all means for supply chain and manufacturing professionals. Commercial real estate firm Savills breaks it down: Infrastructure Investment and Jobs Act: Signed into law by President Biden in November 2021, the goal of this domestic spending agenda is to direct billions of dollars to state and local governments to upgrade the outdated physical infrastructure. Less than one year later, the injection of funds has already had an impact on construction in the industrial sector. $4 billion in funding to expand key ports across the United States, announced in January 2022, is particularly impactful as domestic trade activity rises to record high levels. Inflation Reduction Act: Enacted by President Biden over the summer, the Inflation Reduction Act is a game-changer for the electric vehicle (EV) industry, as one of its key aims is to incentivize the growth UNCLE SAM’S INFRASTRUCTURE SPENDING, EXPLAINED
of the EV market within North America. As electric vehicle production proliferates in the United States, more manufacturing space is needed to produce component parts and batteries, as well as infrastructure for charging. This boosts industrial demand. Since the legislation was passed and the value of producing electric vehicles has increased, plants have been announced in Kansas and Oklahoma, with more likely to follow. Also exacerbating the trend toward EV production is California’s recent vote to restrict and eventually ban gasoline-powered cars in the state, further increasing demand for EVs in the United States. CHIPS and Science Act: Passed in August 2022, and signed into law, CHIPS and Science Act funding aims to enhance domestic semiconductor production. To be eligible for the monetary incentive, a company must produce chips in the United States; this includes building and operating factories. ■ $4 billion earmarked: For funding of ports and waterways projects as part of the Infrastructure Investment and Jobs Act. ■ Expanding key ports: Long Beach—the second busiest port— and Norfolk—the fastest growing port—will get deeper and wider channels. ■ Enhancing inland waterways: Navigable waterways are receiving major investments in the form of new locks to increase capacity and help relieve landside congestion.
FEDERAL INVESTMENT DOLLARS TARGET BUSY PORTS, WATERWAYS
Source: Local Port Authorities, The White House Savills U.S. Industrial Market Update
October 2022 • Inbound Logistics 21
TAKEAWAYS
Industry buzz usually surrounds the release of a new Gartner Hype Cycle, and the 2022 Hype Cycle for Supply Chain Strategy is no different. The annual findings detail important changes in which strategies, technology, and workflows are making an impact. Along the continuum are these categories: • Innovation Trigger • Peak of Inflated Expectations GET READY FOR THE HYPE
global supply chains and price inflation have transformed existing notions of resilient operations,” explains Noha Tohamy, distinguished VP analyst with the Gartner Supply Chain practice. “Challenges such as those from active conflict, severe weather, cybercrime, trade policy uncertainty and other risks make improving supply chains’ resilience a key priority. At the same time, the pressure to manage traditional key performance indicators, such as cost, still remains.” Gartner included three new additions in the 2022 Hype Cycle: 1. Machine customers: nonhuman economic actors that obtain goods or services in exchange for payment. Examples: IoT-connected devices that place orders independently, intelligent replenishment algorithms that maintain availability of consumables, and intelligent assistants that suggest deals to consumers. 2. A supply chain ecosystem partnership: a large community of independent organizations that shares and combines capabilities and develops equitable relationships to generate and exchange value to all participants. 3. Hybrid work: where at least some activities can be done in any location, typically via a laptop or mobile device.
• Trough of Disillusionment • Slope of Enlightenment • Plateau of Productivity
Most notably in this year’s Cycle , supply chain resilience reached the Peak of Inflated Expectations and will arrive at the Plateau of Productivity in five to 10 years. What does that signal? “Today’s levels of disruption in
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22 Inbound Logistics • October 2022 FOOD AND BEVERAGE • PARCEL SHIPPING • AUTOMOTIVE • MANUFACTURING • HEALTHCARE CONSTRUCTION MATERIALS • RETAIL/CONSUMER PRODUCTS • ELECTRONICS • PAPER PRODUCTS
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