Assemble your retail approach with this special e-commerce edition on the building blocks of omnichannel fulfillment and white-glove delivery tactics for big and bulky products. No toying around with customer delivery expectations as this edition tackles how to pivot to direct-to-consumer fulfillment and how to power logistics development.
AUGUST 2022
POWERING LOGISTICS DEVELOPMENT BOOSTING PHARMA
SUPPLY CHAINS FLORIDA RISING
ASSEMBLING AN ECOMMERCE PLAN In a Snap
WHITE GLOVE DELIVERIES: NO CHILD’S PLAY
PLANS CHANGE. DEADLINES DON’T. With Lynden you can choose the mode – air, land, or sea – that best ts your schedule and budget. Important shipment? Track it from anywhere using Lynden’s mobile app, or choose to receive email updates as the status changes.
Download at www.lynden.com/mobile
BITE SIZED SUPPLY CHAIN/LOGISTICS INFORMATION Info SNACKS
Enough to feed the UK, Germany, France, and Italy for 1 year
A ZEST FOR BREAKBULK The M/V Baltic Erica recently unloaded approximately 3,300 pallets—3,500 tons— of fresh lemons from Argentina at the Port of Philadelphia. The lemons are the first ever
to enter the United States under a new agreement The amount of money— $14 billion—India loses every year from poor warehouse management. That totals more than 35% of the country’s total agricultural produce. –see Vertical Focus, page 12 “The supply chain stuff is really tricky.” – Elon Musk I QUIT! BECAUSE... between the U.S. Department of Agriculture and The National Service for Agrifood Health and Quality. Most common reasons given for quitting previous job (April 2021-April 2022)
CARGO SETS SAIL While many ocean carriers are switching to alternative fuels to power their giant containerships, smaller businesses can skip the fuel altogether and opt for sailboats instead. New Dawn Traders oers the green alternative for niche sectors with smaller cargo volumes. Goods that can be eciently transported via sail include olive oil, rum, wine, coee, and chocolate. The company’s sailboats are also historic. Klevia , a 1936 ketch built in Denmark, handled one recent shipment. New Dawn Traders also oers several classic wooden vessels that are powered exclusively by wind. –autoevolution
41%
Lack of career development/advancement
36%
Inadequate compensation
34%
Uncaring/uninspiring leaders
31%
Lack of meaningful work
Unsustainable work expectations
29%
26% 26% 26%
Unreliable/non-supportive colleagues
Lack of workplace flexibility
Lack of support for health/well-being
Source: McKinsey & Company. Based on a survey of 13,382 employees in the United States, Australia, Canada, India, Singapore and the UK
August 2022 • Inbound Logistics 1
CONTENTS AUGUST 2022 | VOL. 42 | NO. 8
62 SPONSORED FLORIDA RISING
38
The Sunshine State is strategically positioned for increased global trade, even as supply chains undergo dramatic changes. Here’s how two of its ports are supporting Florida’s ambitions and making bold moves.
50 SPONSORED
FEATURES 38
62
PHARMA SUPPLY CHAINS GET TECHNOLOGY BOOSTER Pharmaceutical and life sciences supply chains receive a healthy dose of innovation and automation
WHITE-GLOVE DELIVERY: IT’S NOT CHILD’S PLAY When consumers were sent home to work, big and bulky e-commerce orders took o, along with delivery expectations. The right combination of technology and strategy can help retailers meet them.
solutions—boosting visibility, traceability, and productivity.
50
44
56 SPONSORED POWERING LOGISTICS DEVELOPMENT What energizes logistics development? From access to infrastructure and proximity to a population center, to tax, energy, and land incentives, here are the driving forces behind site selection decisions and major investments.
56
44 THE BUILDING BLOCKS OF OMNICHANNEL FULFILLMENT
Here’s how leading brands snap together their omnichannel mix to meet market needs and expectations while serving business goals.
2 Inbound Logistics • August 2022
Let’s Supply Change
4 Smart Integrations 4 Personalized Service Service 4 Customized Solutions Solutions 4 Environmental Stewardship Stewardship
Request a Quote
Visit Symbia.com Call (855) 467-9624
National Fulfillment Fulfillment & Distribution Distribution Centers Centers Reno, Nevada u Aurora, Colorado Colorado u Kansas City, City, Missouri Missouri u Chicago, Illinois
CONTENTS AUGUST 2022 | VOL. 42 | NO. 8
GOOD QUESTION What’s your best tip for retailers pivoting to direct- to-consumer fulfillment?
INFOCUS 1 INFO SNACKS 12 VERTICAL FOCUS: PERISHABLES 16 NOTED 18 TAKEAWAYS 78 PRODUCT SPOTLIGHT: MATERIALS HANDLING
88
8
The largest port in the world and other mega builds
SOLUTIONS 80 IN BRIEF 88 LAST MILE Big builds
28 SPONSORED SOLVED
10 10 TIPS Keeping your digital supply chain secure 22 SPONSORED The eects of inflation on the supply chain... 22 Pallet recovery keeps the circular supply chain moving .. 24 26 SPONSORED KNOWLEDGE BASE Solving the unique challenges of shipping perishables
14
Marmon Holdings improves performance with managed logistics program.... 28 MagicLogic provides flexible customized cartonization software for Augusta Sportswear.... 29 30 SPONSORED THOUGHT LEADERS What is a freight embargo and why do carriers set them? 32 IT MATTERS How strong trading relationships help win and retain customers 34 RETAIL RETHINK An order management system can boost customer experience 36 SMART MOVES Tips to overcome year-round labor challenges INFO 68 WEB_CITE CITY 76 SUPPLY CHAIN INSIGHTS 84 CALENDAR 86 RESOURCE CENTER
INSIGHT 6 CHECKING IN Democratizing global e-commerce 8 GOOD QUESTION
What’s your best tip for retailers pivoting to direct-to-consumer fulfillment?
78
Materials handling innovations
INPRACTICE 14 READER PROFILE F or Sachi Thompson, general manager of the global hardware division with Curvature, the greatest hires have come from giving out business cards to people hustling on the job. Her key to success is hiring the best talent to focus on critical areas of the business, resulting in a unique—and profitable— leadership approach.
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 oces. 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 • August 2022
CHECKINGIN
Democratizing Global E-Commerce?
Vol. 42, No. 8 August 2022 THE MAGAZINE FOR DEMAND-DRIVEN ENTERPRISES www.inboundlogistics.com
STAFF PUBLISHER Keith G. Biondo
publisher@inboundlogistics.com
M any small and mid-size enterprises (SMEs) report friction due to in ation and COVID. One way to rise above those headwinds is to expand both consumer and business-to-business e-commerce sales. But many SMEs don’t have the spend or techno skills to form a winning strategy to compete with the e-commerce big players who dominate the market given their early start, size, and resources— nancial and technological.
EDITOR Felecia J. Stratton
editor@inboundlogistics.com
SENIOR EDITOR Katrina C. Arabe
karabe@inboundlogistics.com Chris Cavallo ccavallo@inboundlogistics.com
AUDIENCE DEVELOPMENT & RESEARCH
CONTRIBUTING EDITORS Sandra Beckwith • Karen M. Kroll • Helen Mann Richard Osborne • Amy Roach CREATIVE DIRECTOR Jeof Vita jvita@inboundlogistics.com DESIGNER Nicole Estep nicole@inboundlogistics.com DIGITAL DESIGN MANAGER Amy Palmisano
Keith Biondo, Publisher
Enter entrepreneur Nandan Nilekani, the co-founder of Infosys, a global IT solutions provider on track to log $16+ billion in sales this year. He knows a bit about how SMEs can develop winning strategies to face challenges. “I’m increasingly beginning to realize that the way I think about strategy is not whether it will be A or B, but whether you have built the exibility to do A or B,” he says. Nilekani’s exibility approach came into play when he considered the plight of SMEs in his home country of India (initially) and helped him form a successful e-commerce strategy that competes with the two monster players there: Amazon and Walmart’s Flipkart. Nilekani developed Open Network for Digital Commerce (ONDC), an e-commerce mall with many shops instead of just the two giants. The goal in India is in the millions. How does it work? While shopping search engines such as Google Shopping offer users the ability to compare prices among online stores, results are usually limited to larger e-commerce companies with the budgets and technical know- how to list products and supply data feeds from inventory systems. Because ONDC functions as a set of standards, it will allow consumers to pick one of many platforms for shopping. Each platform will receive the same product, pricing, and availability information, based on the same set of standards. “ONDC aims mainly to tap millions of small businesses that often lack technological expertise,” says All India Traders, a business group representing almost 80 million small businesses. Amazon and Flipkart own 60% of India’s $55 billion e-commerce market. Adding millions of shops will triple that. Amazon India has no delivery arm, but by buying a stake in Ecom Express, an Indian end-to-end logistics provider, it will ride the coming growth curve. The challenges are formidable. One obvious one is nancial standardization. Another huge impediment is ful llment and delivery reliability. Even without immediate success, the impact of the ONDC strategy will not be lost on today’s e-commerce titans. Look for their coming exibility to nd some way to open their networks and infrastructure to more SME vendors, ushering in another explosion in global e-commerce activity.
apalmisano@inboundlogistics.com
PUBLICATION MANAGER Sonia Casiano
sonia@inboundlogistics.com
CIRCULATION DIRECTOR Carolyn Smolin
SALES OFFICES PUBLISHER: Keith Biondo
212-629-1560 FAX: 212-629-1565 publisher@inboundlogistics.com WEST/MIDWEST/SOUTHWEST: Harold L. Leddy
847-446-8764 FAX: 847-305-5890 haroldleddy@inboundlogistics.com Marshall Leddy
612-234-7436 FAX: 847-305-5890 marshall@inboundlogistics.com SOUTHEAST/MIDWEST/ECONOMIC DEVELOPMENT:
Joseph Biondo 516-578-8924 jbiondo@inboundlogistics.com NORTHEAST: Rachael Sprinz 212-629-1562 FAX: 212-629-1565 rachael@inboundlogistics.com MEXICO & LATAM: Guillermo Almazo 212-629-1560 mexico@inboundlogistics.com FREE SUBSCRIPTIONS www.inboundlogistics.com/free
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 • August 2022
GOODQUESTION Readers Weigh In What’s your best tip for retailers pivoting to direct-to-consumer (DTC) ful llment? Shift Gears
Recalibrate your processes and systems. The biggest failures we see are when companies simply layer-on a DTC fulfillment strategy (whether through stores, DCs, or web-based point-of- sale system) to their current fulfillment. Most retailers have spent a lot of time and resources finely tuning their fulfillment but the change to direct customer fulfillment unbalances these systems, leaving angry customers, inventory overages, and shortages. –David Barach VP Pricing Solutions, antuit.ai, a Zebra Technologies company Appreciate that DTC is quite different from store fulfillment. From receiving to shipping, there are material differences in process, timelines, and costs. Order placement timing, product included in an order, and speed of delivery are all decided by the customer—requiring flexible fulfillment operations with options to match the customer timing. –Laura Ritchey EVP and COO, Radial
Successful DTC fulfillment comes down to balancing customer acquisition cost, conversion rate, and average order value (AOV). AOV is critical—if it’s too low, shipping costs will eat up your margins. Keep AOV up by bundling products and using shipping partners who offer flexible fulfillment options that scale with you.
–Aaron Galer SVP of Strategic Partners Arrive Logistics
DTC FULFILLMENT CAN PROVIDE MORE CONTROL OVER THE PRODUCTS , and even packaging, that a retailer delivers, which is important amid heightened consumer demands. However, innovation requires accurate data—at the DNA level. By managing data proactively, companies can adjust to market conditions quickly. –Matthew Wright Founder and CEO, Specright
KNOW YOUR AUDIENCE AND TAILOR YOUR MARKETING TO HIGHLIGHT THEM. Everyone is
DON’T SKIMP ON RESOURCES to develop online capabilities and customer data acquisition. Social media presence targets the right customers while a robust order management system affects accurate processing, fulfillment, and shipping. Understanding consumption patterns informs product portfolio, and inventory and returns management. –Stanley Lim Assistant Professor, UNDERSTAND THE LANDSCAPE OF THE GOODS YOU’RE SHIPPING. The regulations, packaging and labeling requirements, and transportation mode can vary depending on where and how goods are shipped and the quantity. –Rhonda Jessop Director, Global Learning, Labelmaster Supply Chain Management Michigan State University
offering e-commerce; make sure you stand out to your target audience. Know your competition. Research their sites and what ease-of-use features they have (or lack) that you can offer to appeal even more to your audience. –Brian Gaffney
Supply Chain Specialist Natural Fiber Welding
PROVIDE A RELIABLE AND CONSISTENT FULFILLMENT
ENSURE THE LAST-MILE CUSTOMER EXPERIENCE IS EXCEPTIONAL . With the right technology, tools, and people, retailers can elevate the way they execute their delivery strategy by improving order visibility, communication, and inventory management.
EXPERIENCE that is on-par or better than their product/brand experience, while also managing a more challenging cost structure in parallel. Companies that neglect fulfillment experience do so at their own risk. –Matt Comte Operations Transformation Practice Leader, PwC
–Brian Kava CEO, PICKUP
8 Inbound Logistics • August 2022
GOODQUESTION
ESTABLISH A PROPER FULFILLMENT PROCESS. Some questions to ask: Is your pick area set up to handle each pick vs. case pick? Is there a pack area for single unit orders vs. multi-unit orders? Ensure you have the right cycle counting cadence, so your pick slots meet your inventory accuracy levels, and your SKU availability is consistently available for your end users. –Harold Baro SVP and General Manager Simos Solutions EMPOWER YOUR COMPANY WITH DATA FROM SUPPLIERS —and have an automated system and the processes in place to act on it. This gives retailers real-time visibility into their supply chain so they can make informed decisions, reduce unnecessary costs, and streamline inventory management.
Make It Personal Moving to a DTC business model is a great opportunity to experiment and provide a personalized customer experience to boost
customer loyalty. Make sure to have the right logistics and technology in place when implementing this model to distribute to many individual customers and to constantly ensure customer expectations are being met. –Francisco Topp Product Manager, Cin7 Make a customer feel a connection to your brand even without a salesperson creating that experience. Consider personal notes, customized discounts, simple return policies, etc. Competitive advantage will go to the organizations that prioritize human connection in DTC. –Whit Smith Director of Brokerage Operations-Indianapolis, TA Services Consumers expect personalized shipping experiences —like same-day delivery and having a sustainable option. Retailers must have a flexible supply chain involving multiple transit modes, inventory locations, and a technology solution to orchestrate in order to deliver on customers’ expectations. –Steve Denton CEO, Ware2Go, a UPS Company
–Archie Black CEO, SPS Commerce
ENHANCE SYNCHRONIZATION AND COORDINATION with logistics providers, especially third-party logistics providers. Understand each and every custody exchange as products travel to consumers, as well as ensure all parties involved are aware of the environmental conditions surrounding them during the delivery and exchange process.
should implement a returns process that incorporates automation to prioritize efficiency and cost savings. –Thys Visser VP of Market Line Operations, GEODIS in Americas GET A SOLID GRASP of your supply chain network design and how you can leverage existing components of your fulfillment network. Do not operate your direct-to-consumer business in a silo. –Bryan Palma Industry & Solutions Marketing Director, Kinaxis
Have a great answer to a good question? Be sure to participate next month. We want to know: What phrase or buzzword (think shrink ation ) would you create to describe a supply chain trend or development? How would you define it? We’ll publish some answers. Tell us at editorial@inboundlogistics.com or tweet us @ILMAGAZINE #ILGOODQUESTION
–Jim Yarbrough Global Director of Supply Chain Solutions, BSI
ADOPT AND OPTIMIZE THE RIGHT SOFTWARE to help automate DTC warehouse processes along with connected hardware such as barcode label printers. These solutions help direct-to-consumer fleets gain competitive differentiation, speed, and superior customer service. –Brian Beans Senior Manager, Route & Transportation Brother Mobile Solutions SPEED TO CUSTOMER IS CRITICAL for DTC fulfillment to help differentiate the product. Forming strategic partnerships for fulfillment (often placing inventory closer to the end consumer) is key for customer satisfaction. Additionally, brands
PARTNER WITH 3PL S that have strong middle- and last-mile
capabilities. They have the technology to allow retailers to manage inbound and existing inventory placement, as well as forecast inventory needs. Technology to manage the last mile helps extend the retailer’s brand to the consumer’s front door. –Matt Huckeba SVP, Corporate Strategy & Consulting Transportation Insight
August 2022 • Inbound Logistics 9
10 TIPS
Keeping Your Digital Supply Chain Secure
Organizations that are most protected from cyberattacks are ones that understand what threats exist in the first place. This means having a good understanding of their entire supply chain as well as the data they are responsible for and where it is stored.
1 UNDERSTAND THE BIGGEST THREATS TO THE DIGITAL SUPPLY CHAIN, WHAT DATA YOU HOST AND WHERE IT IS. While having a goal of protecting against all types of cyberattacks is a nice sentiment, homing in on your crown jewels and the biggest threats—such as phishing attempts and ransomware—will guide more targeted and effective security strategies.
8 IMPLEMENT ZERO-TRUST SECURITY. In a zero-trust approach, an organization doesn’t trust any users or networks from inside or outside the organization. Security initiatives can sometimes be painful to implement, but zero-trust alleviates many of these issues by creating awareness and more ownership for end users. From a practical standpoint, implementing biometric authentication or multi-factor authentication for all users is a key step to begin creating a zero-trust environment. 9 BLOCK UNSAFE WEBSITES & SERVICES. Helping users stay safe on the web is another way to avoid malicious actors. Although whitelisting applications and services is ideal, for a quicker win, blacklist certain applications and block unsafe websites and services on any computer or device with access to sensitive data.
2 KNOW THE RULES. Understanding what regulations and security frameworks you need to comply with provides insight to what you need to manage and secure your digital supply chain. 3 FORMALIZE YOUR SECURITY PROGRAM. Defining and formalizing your security program will not only help you demonstrate your compliance to customers and other stakeholders, but it also allows you to apply the same expectations to your vendors and business partners. As an organization, you are responsible for the security of your and your customer’s data even if it is hosted by a third party. You are responsible for evaluating and assessing the security of your data across your digital supply chain. 4 BE MINDFUL OF THE DATA YOU STORE. Holding on to gigabytes of data is no longer an option and it increases your risks significantly. In fact, the more
unnecessary data stored, the more susceptible the supply chain is—and the more costly the cyberattack. Work with your business partners to understand the type of data they need and make sure that it is disposed of securely when it is no longer needed. 5 INSTILL A SECURITY- FIRST CULTURE. Cybersecurity should be a concern to every member of the organization. Offering regular training for employees and facilitating conversations around digital supply chain security are great ways to start fostering a security-first culture. 6 USE MULTI-FACTOR AUTHENTICATION. Compliance shows why and how an organization
can protect itself, and the security tools and
technology implemented are your first line of defense against cybercriminals. Make sure that multi-factor authentication (MFA) is turned on everywhere. As the supply chain and data increases, so too should the security measures. 7 PATCH AND BACK UP YOUR SYSTEMS. Patch management is the process of distributing and applying updates to your software. Ask about patching requirements for your vendors as well as your systems and don’t forget to backup your data and ask the same question to your vendors.
10 HAVE A DATA BREACH
RESPONSE PLAN IN PLACE. Hackers are increasingly sophisticated and relentless in their efforts – no network is entirely cyber-secure. Developing a response plan is essential so everyone is aware of the steps to take if a breach occurs, including notifying appropriate parties, talking to the media, fixing vulnerabilities and preventing additional data loss.
SOURCE: JOSE COSTA, CISO, TUGBOAT LOGIC BY ONETRUST
10 Inbound Logistics • August 2022
Perishables
GRAIN PAIN As with many other sectors, transportation disruptions have hit the perishables industry in 2022. The American Farm Bureau Federation (AFBF) released its mid-year status update on transportation systems in the United States—and, as you might expect, the numbers are troublesome. • Total grain rail cars loaded and billed dipped slightly, from 381,000 cars in Q1 to 373,000 cars in Q2. • BNSF and Union Pacific (UP), which processed 64% of all grain rail cars in Q2, shipped 9% and 14% fewer grain rail cars than the same period last year, respectively. • Between Q2 2021 and Q2 2022, the number of cumulative unfilled orders—the number of cars a shipper (such as a grain elevator) ordered but did not receive—jumped from 62,000 to 204,000, a 231% increase. Year-over-year, BNSF saw a jump of over 110,000 cumulative unfilled orders (+546%) and UP saw an increase of 33,000 (+154%). Comparing Q1 2022 and Q2 2022, there has been a 49% (66,000) increase in cumulative unfilled grain car orders one or more days overdue. • Of the 204,000 cumulative unfilled grain car orders one or more days overdue, nearly 70% (or 140,000) were also 11 or more days overdue—a 348% increase from the second quarter last year and an 82% increase from last quarter. • In Q1, bidders faced a nearly 500% increase in secondary railcar auction bids from the prior four-year average (between BNSF and UP). • On what the AFBF calls “a marginally higher note,” secondary market bids for shuttle service have cooled for deliveries to be made in August from highs for deliveries made in April. “Rates remain volatile and well above average,” the AFBF reports. “Shippers with flexibility in moving product may participate in the secondary market to take advantage of high bids for existing contracts, further contributing to delivery uncertainty.”
Tracking fresh produce shipments is becoming more eco-friendly. Consentio, a digital trading platform with customers across Europe and North America, is adding sustainability data to its offering. This allows produce traders to monitor carbon dioxide and water consumption data in their transactions. Consentio’s platform follows fresh produce transactions from grower to distributor to retailer. The new sustainability data, which will be displayed along with price and availability, comes from accredited government sources, the company says. More sustainability features are on the way, “such as details of the grower and the produce journey from farm to fork,” CEO and co-founder Benoit Vandevivere told Perishable News . “The entire world of food production and supply is changing rapidly,” he said. “Consumers want to know more about the food they eat, where it was produced and when, what the carbon impact has been during the food production, and much more. “Retailers are now looking for suppliers who can provide true and veri able provenance with transparent supply chains, meaning some food producers are nding it harder to gain shelf space,” Vandevivere notes. “It is our aim to place Consentio at the heart of this revolution, offering provable, transaction-based, transparent supply chains, accessible from all technologies.” SUSTAINABILITY DATA GOES DIGITAL
Cumulative number of weekly grain car orders in the second quarter from 2018 to 2022 that were one or more days overdue.
250,000 200,000 150,000 100,000 50,000 0
BNSF
CN
CP
CSX
KCS
NS
UP
Q2 2017
Q2 2018
Q2 2019
Q2 2020
Q2 2021
Q2 2022
Source: American Farm Bureau Federation
12 Inbound Logistics • August 2022
VERTICALFOCUS
Few products go bad quicker than milk. Yet many dairy supply chains are stuck in an analog, pen-and-paper legacy universe. One company, Milk Moovement, is working to change that, with cloud-based software that uses data to speed perishable deliveries. Introduced in 2018, Milk Moovement helps dairy farmers and distribution partners track and route shipments in real time and access information about the quantity and quality of the milk being shipped. The company recently raised $20 million in a Series A round to boost product development and help market the technology platform throughout North America. Milk Moovement will use the funds to expand its engineering team in order to segment its site for different departments, such as logistics and transportation, processing, and payments. The company, which currently employs 55 people across Canada and the United States, plans to grow to 75 or 80 employees by the end of 2022. Dairy cooperatives were the rst users of the software, but in recent years, the company has moved into other industry areas, including dairy farmers and truckers. The software helps perishables producers by providing “frictionless access” to data, according to Robert Forsythe, CEO of Milk Moovement. “We don’t create new data—the data’s out there,” he says. “It’s about getting it in their hands faster so that they can make improvements.” KEEPING MILK MOOVING
A FRESH START The fresh meal market seems to be one bright spot in an otherwise challenging business climate. Investors have placed their bets on FreshRealm, a provider of fresh meals for retailers nationwide, to the tune of a $200 million capital raise. The market, valued at $30 billion, remains strong as busy consumers continue to look for fresh and convenient prepared meals. FreshRealm says it is the only provider with a national platform for simple delivery of fresh, ready-to-cook, ready-to-heat and low-prep meal kits. The company supplies about 10,000 retail locations and more than one million direct-to-consumer customers, it says. The company will use this latest capital infusion—on top of the $32 million raised in 2021—to: • Expand operational facilities nationwide to address growing retailer demand for fresh meals. • Deliver more than 400 million meals to consumers nationwide. • Expand production to service additional retail channels, including convenience and club stores. • Access culinary expertise and proprietary consumer data to boost sophistication and customization in meal development for retail customers and end consumers. • Improve equipment, facility technology, and production capacity to increase eciency within its horizontally integrated operations model. • Bolster supply chain security. • Create new technology solutions to manage scale and complexity of meals and ingredients across its customer base and channels. “As the retail fresh meals category continues to demonstrate compelling growth, this funding allows FreshRealm to bolster our existing end-to- end platform that supports elevated private label and branded meal assortments and fresh meal destinations,” says Michael Lippold, founder and CEO.
AN EGG-CELLENT PARTNERSHIP Happy Egg Co. is about to make more customers happy. Its free- range eggs will now be available in Florida, California, Nevada, Oregon, and Washington, thanks to a new partnership with Fresh Del Monte and Trinity Logistics, to supply and fulfill its orders across the United States. With temperature-controlled warehouses throughout the country and a large truck fleet, Fresh Del Monte provides perishables shippers like Happy Egg with drayage, refrigerated warehouse services, refrigerated LTL distribution, last-mile delivery, cross-dock, ripening services, and truckload brokerage services. A partnership with Trinity Logistics enhances its time-sensitive freight delivery capabilities. “We’re always looking for ways to work with other companies and help them utilize our vast logistics network to provide high-quality products to the end consumer,” says Mohammed Abbas, Fresh Del Monte’s chief operating ocer. Fresh Del Monte also owns Network Shipping, a global third-party shipping network, and Tricont Trucking and Tricont Logistics.
August 2022 • Inbound Logistics 13
READERPROFILE
as told to Karen Kroll
Do The Hustle
SACHI THOMPSON is general manager of the global hardware division with Curvature, a division of Park Place Technologies, a global data center and networking optimization firm.
RESPONSIBILITIES: Lead Curvature’s global server, storage, and network hardware business, including running operations, sales, and executing the division’s corporate strategy.
EXPERIENCE: Executive vice president, global supply chain, Curvature; chief operating o£cer, Curvature (pre-merger with SMS); director of real estate and leasing, Ess-Tee Management; production director, Big Dogs Sportswear.
EDUCATION: B.A., History, University of California— Santa Barbara
I n 2007, I joined Curvature as its 85th employee. We were at about $87 million in revenue, and operating only in the United States. Originally, my role was the chief executive of cer’s right hand. I put myself anywhere the company needed me, because our growth was blasting off like a rocket ship. Every six months or so, I’d take over a new responsibility. First was real estate, then supply chain, and then operations. I became chief operating of cer in 2014. Under my direction, my focus was building facilities for the organization and becoming a global brand. This expansion changed our supply chain considerably. I had to make sure we were ready to deliver the parts our customers needed to a service area that grew to more than 140 countries in 2016. The complexity changed from, “I can operate my production plants
between 8 a.m. and 5 p.m.” to “I need 24/7 operations centers.” This forced me to focus on global logistics and a global supply chain. I gained my education in this space by going out and dealing with supply chain challenges and complex operational logistics issues. I’d bring in consultants, learn from them, and apply best practices to our business. Early in my career I learned that the key to success is hiring the best talent to focus on critical areas of the business. Being the youngest of ve siblings, with a single mother who was an immigrant from Japan, I was taught from an early age that education is a gift. Now, when I see opportunity for myself or others, I seize it. Some of my greatest hires have been out in the world where I see a person hustling on the job. I give them my card and say, ‘I’d love to hire
you in our operations center.’ We can do a lot for employees who have that hustle, grit, and desire to be better. I have had amazing opportunities that allowed me to develop a unique leadership approach. If I have a system or process that’s not working or isn’t scaling, I start to work with people at all levels to show me why it’s not working. Then I take it down another level to the process or the widget as it’s going through our plant, so I can see what’s I had to make sure we were ready to deliver the parts our customers needed to a service area that grew to more than 140 countries in 2016.
14 Inbound Logistics • August 2022
READERPROFILE
really happening. I try to make complex problems simple and provide the best possible experience for my staff. Amid the pandemic, we were able to provide our hospital clients with equipment that wasn’t readily available from original equipment manufacturers. Because Curvature is a vendor-agnostic provider, we could give our clients various options, which, in turn, helped them save money. There’s a concern that pre-owned isn’t the same quality as new, but we’ve been in this business for 30 years and know the quality of our offerings. It’s nice when new customers say, “Not only did you help me get what I needed, but you saved our organization a considerable amount of money.” When you learn what you’re supposed to do in this world and do it well, you feel like you’ve unlocked your purpose and it never feels like work. I’m fortunate that my work at this company is my purpose. n
Sachi Thompson Answers the Big Questions 1 If you could travel anywhere, and time and money weren’t constraints, where would you go? One place on my bucket list is Greece. I’d also love to go to Croatia. 2 If you could represent the United States in the Olympics, what sport would you choose? Gymnastics. From when I was four years old until I was 10, I was in a gymnastics league. I competed at the Olympic pre-trials and pushed myself at a young age to achieve difficult things. While I didn’t make it, I learned early on the value of rigor and training—four hours every night, six days a week—that helped me develop a strong work ethic. 3 If you had $1 million to start a new business or philanthropic venture, how might you invest it? I would build a company where my employees owned it with me. Every dollar of profit would go to something that solves real problems, like water or housing. We’d make an impact in communities all over the country.
If not, they should be reading this.
Spread the good news by getting your vendors, partners, and team members reading Inbound Logistics . Point them to inboundlogistics.com/subscribe
August 2022 Inbound Logistics 15
ICC =inventory carrying costs C =capital T =taxes I =insurance W =warehouse costs X =shrinkage S =scrap O =obsolescence costs R =recovery
NOTED [ IN FOCUS ]
The Supply Chain in Brief
> SEALED DEALS
> GOOD WORKS
• SOS Children’s Villages International is bene ting from a new partnership with DHL Express , DHL Global Forwarding , and DHL Supply Chain . The organizations are working together to help young people, ages 15 to 25, in the Philippines prepare for employment or entrepreneurship. Under the partnership, DHL employees will mentor youths as they transition to the working world. • Carrier Logistics, a provider of freight management software for LTL eets, recently donated to Autism Speaks in honor of Geoffrey Muessig, executive vice president and chief marketing of cer at PITT OHIO. The donation was made as part of Carrier’s golden anniversary celebration and will support various programs and research conducted by Autism Speaks.
• Brewing company Carlsberg Group selected Kinaxis’ RapidResponse platform to create a harmonized planning process and improve
commercial agility. By using the platform, Carlsberg can glean process insights and improve supply chain decision-making for its portfolio of beer and other beverage brands.
> GROUNDBREAKING
> IN MEMORIAM
• Tubby Todd, an e-commerce company
• RJW Logistics Group executive Greg Forbis passed away after a one- year battle with cancer. He had a lifelong career
providing body care products for babies, selected PFS to manage its U.S.
order ful llment operations. From its Memphis-based campus, PFS provides ful llment services including kitting, picking, packing, and shipping for Tubby Todd orders. PFS also manages Tubby Todd’s direct-to-consumer transportation as well as the drop-ship program for its retail channel. • To help its U.S. members transport their vehicles faster and more ef ciently, the National Independent Automobile Dealers Association (NIADA) named omnichannel logistics platform ACERTUS its preferred vehicle logistics vendor. The ACERTUS platform gives NIADA dealers access to services to move, store, recondition, title, and home-deliver vehicles.
in supply chain, including 30 years at Walmart and the past three years with RJW Logistics Group, where he developed and maintained relationships with clients and partners.
n Cold-Link Logistics began construction on a $60-million cold storage warehouse facility in the Southbridge Business Park in Sioux City, Iowa. The new warehouse, a 190,000-square-foot rail-served freezer building, is expected to employ 60 people when completed in 2023. n Crow Holdings Development is building a 126-acre industrial park near the New Jersey Turnpike in Carteret, New Jersey . The project, which broke ground in June 2022, includes three buildings ranging in size from 335,000 to 480,000 square feet. They will feature 40-foot clear heights and together will offer 159 trailer parking spots, 174 dock doors, and 6 drive-in ramps.
> MILESTONE
n After reaching its one-year anniversary
of COVID vaccine distribution earlier in 2022—delivering 1 billion doses globally— UPS continues to keep vaccine distribution a top priority for its healthcare division. The company is working with vaccine manufacturers to provide storage and ultra-low temperature freezers for a wide portfolio of new vaccines.
16 Inbound Logistics • August 2022
NOTED
> UP THE CHAIN
> M & A
• Barbara Bergmeier is now executive director, industrial operations, for Jaguar Land Rover. In this newly created
n Burris Logistics purchased
foodservice redistributor
role, Bergmeier is responsible for leading Jaguar Land Rover’s new industrial operations organization, with oversight for manufacturing, purchasing, and supply chain teams.
R.W. Zant Company in order to help expand the foodservice redistribution capability of Burris company Honor Foods .
n Majestic Steel USA, a steel service center and processor of flat-rolled steel products, completed two acquisitions: Quicken Steel , a manufacturer of steel buildings and components, and transportation company Mercury Transport. The acquisitions support Majestic’s strategy of supply chain reliability for customers and downstream value-add in steel manufacturing. n KAG Logistics, a logistics provider serving the petroleum and renewable fuels industry, acquired American PetroLog, a provider of multimodal distribution services to the petrochemical industry.
• Ray Nichols (pictured) was appointed chief business support of cer and Chad Boardrow was named chief supply chain of cer at Arcimoto, which makes ultra- ef cient electric vehicles. Nichols is responsible for expanding Arcimoto’s footprint while Boardrow will work with supplier
partners and the company’s manufacturing team to keep supply chain operations running smoothly.
n Global logistics provider DB Schenker acquired USA Truck, which maintains a U.S. and Mexico freight network.
• Pace International, a provider of sustainable post- harvest solutions and technologies for the fresh produce industry, named Luke Shepard as senior manager of global operations. Shepard will work on process and quality improvements, strategic sourcing and planning, logistics network optimization, and customer- service enhancements. • Fashion brand PVH appointed David Savman as executive vice president and chief supply chain of cer. Savman will be responsible for the global supply chain and sourcing strategy for PVH’s global brands. He will join PVH in late 2022 from H&M Group, where he spent 19 years, most recently as head of global supply chain. • HP named Ernest Nicolas as the leader of its worldwide supply chain organization. Nicolas will oversee the company’s supply chain, which delivers more than 100 million products to
n To provide ongoing support to Ukraine during the war, 3PL Logistics Plus acquired Concord-Trans, a Ukrainian freight forwarding and logistics company with locations in Kyiv and Odesa.
> RECOGNITION
• Barbara Melvin, president and CEO of South Carolina Ports, received the 2022 Woman of Courage Award. Melvin, the first woman to lead a top 10 U.S. operating container port, was selected for the award by the
College of Charleston School of Business and the Women for Women Summit. The Woman of Courage Award recognizes an inspirational, impactful, and courageous leader who has made significant contributions to their industry and community. • Two veterans of the logistics industry are set to receive awards from the Containerization and Intermodal Institute in September 2022. Joseph S. Gregorio Sr. , CEO and chairman of Pacific Crane Maintenance Company, will receive the 2022 Connie Award while Captain Lynn Korwatch will be honored with the Lifetime Achievement Award recognizing her 45-year maritime career.
customers each year. He will also oversee social and environmental sustainability for HP.
August 2022 • Inbound Logistics 17
TAKEAWAYS Shaping the Future of the Global Supply Chain
$317.17 BILLION That’s the estimated size of the chemical logistics market by 2026, according to The Business Research Company’s Chemical Logistics Global Market Report 2022 . The figure represents a compound annual growth rate (CAGR) of 3.9% over the next 5 years. For 2022, the chemical logistics market size will grow to $271.73 billion, up 7.9% from $251.94 billion in 2021, the report predicts.
Supply Chains Out of Sync There are some harsh words for the logistics and supply chain sector in the 33rd Annual State of Logistics Report, revealed recently at the National Press Club in Washington, D.C. U.S.- based supply chains are “out of sync,” caused by struggles to adjust to short-term changes, the report claims. The good news, though: the industry is discovering long-term solutions to those challenges. The report, produced for the Council of Supply Chain Management Professionals (CSCMP) by global consulting rm Kearney and presented by Penske Logistics, is intended to look at the overall U.S. economy as seen through the lens of the logistics and supply chain sector. One of the more telling statistics from the report involves U.S. business logistics costs, or USBLC. In 2021, USBLC rose 22.4% to $1.85 trillion, which accounts for 8% of 2021’s $23 trillion GDP. Other key ndings: • Business inventories dropped to near historic lows, but the costs associated to store, handle, and nance those items jumped by 25.9% in 2021, while transportation costs increased 21.7%. This has led to “uneven supply chains and inconsistent product availability for consumers (both in-person and online),” says CSCMP. • Multi-shoring efforts are expected to increase. Companies are looking to move their operations closer to the United States so they can respond to changing market demands more swiftly. • The pandemic continues to pose challenges to the supply chain, as disruptions further damage capacity. • Last-mile delivery volume is trending up. E-commerce sales grew 10% in 2021 (to $871 billion), accounting for 14% of U.S. retail sales. • Trucking freight is a bright spot, with more volume and opportunities. Road freight expanded by 23.4%, to a robust $831 billion spend, and accounted for the largest segment of the U.S. supply chain spend.
18 Inbound Logistics • August 2022
TAKEAWAYS
Need warehouse space? It should be slightly easier to come by into 2023. A recent Prologis report focused on Q2 2022 activity and predictions for 2023 expects a small increase in vacancies. The reason: Demand will drop and supply chain movement will improve, which will get more products into the marketplace. Here are some key numbers from the report: • Vacancy rates remained at an all-time nationwide low of 3.1% in Q2. • Rates are expected to rise to 3.2% by the end of 2022. • Rates should rise to 3.7% by the end of 2023. • Warehouse rents jumped 16% in the first half of 2022, because demand remained high and rents rose in response to materials inflation, land shortages, and labor and supply chain issues. • Capacity utilization rose to 85.6%, which seems to show that no excess space existed within facilities due to higher retail sales and restocking eorts. Looking forward, deliveries should be able to meet demand by the end of 2022, Prologis predicts, and should even exceed demand over the next 18 months. That should give those looking for warehouse space more leverage negotiating leases. Prologis estimates that 800 million additional square feet of space will be needed for current growth and future replenishment estimates. The report also notes that wholesale and retail inventories have risen by 7% net over the past six months alone. Taking into account current and future replenishment eorts, the ratio of inventory to sales is expected to level o at 5% to 10%, which is higher than pre-pandemic numbers. WAREHOUSE SPACE: CAN YOU FIND IT?
Consumers Go on an Online Spending Spree
Despite current worries about an economic downturn, consumers are still shopping—especially online. And retail logistics companies keep shipping products. As a result, the global retail logistics market is forecast to jump from $231 billion USD in 2021 to $622 billion USD by 2030. That computes to a 12% compound annual growth rate over that time. That’s the prediction made by Acumen Research and Consulting in its Retail Logistics Market, Share, Analysis Report and Region Forecast, 2022- 2030 report. It credits the surge in e-commerce and global customers’ increasing digital literacy for the boom in online sales. And as smartphones and internet access spread to more and more markets, online shopping will only continue to grow. The report surveyed key market players such as APL Logistics, C.H. Robinson, A.P. Moller–Maersk, DSV, DHL, FedEx, Nippon Express, Kuehne + Nagel, UPS, Schneider, and XPO Logistics. Behind the good news, though, is the pandemic’s ongoing impact. The report contends that the pandemic has hurt the global economy in three ways: 1. It has damaged pro tability. 2. It has directly harmed production and demand. 3. It has depleted capital and cash ows. As a result, retail logistics companies are still struggling to regain their footing and learning, on the y, how to meet customer behaviors that have changed because of the pandemic, says the report. Additionally, it notes that retailers are also dealing with a data shortage and declining revenues. On the bright side, increased use of robotics and robotic process automation has greatly helped global retail logistics market value, and robotics will only become more important to the sector moving forward. On top of that, the growth of big data analytics in retailing and, by extension, retail logistics operations, will help supply chain companies identify bottlenecks and streamline the ow of goods and resources.
August 2022 • Inbound Logistics 19
TAKEAWAYS TOP 5 SUPPLY CHAIN DISRUPTIONS New data from Resilinc highlights the top drivers of supply chain disruptions for the first half of 2022. From January through June, Resilinc’s EventWatchAI platform alerted its customers to an astounding 7,929 potential supply chain disruptions (a 46% YoY increase) with the life sciences, healthcare, high- tech, and automotive industries being most impacted. The top five reported disruptions include: 1. Factory fires 2. Mergers & acquisitions 3. Business sale 4. Leadership transition 5. Factory disruption Of these disruptions, 54% were impactful enough to trigger the creation of a WarRoom (virtual platforms in the Resilinc dashboard where customers and their suppliers communicate and collaborate to assess and resolve disruptions). Factory fires ranked as the top disruption for the first half of the year, with the number of fires up 131% YoY. This year is on track to have the most factory fires ever reported, a trend driven by regulatory and process execution gaps, as well as a skilled labor shortage in warehouses. The data also reveals that disruptions due to geopolitical events, most notably the Russia-Ukraine war, were up 521% YoY. Sanctions and production shutdowns are creating unprecedented commodity and raw material shortages; these will likely continue through the end of the year. Geographically, North America experienced the most disruptions, accounting for 40%+ of the total alerts issued in the first six months of this year.
Freight Is Fraught
The double-whammy of skyrocketing fuel prices and out-of-control in ation has put a hurt on the freight industry. So have attening modal growth trajectories, seasonal factors, and softening demand. So says the new edition of the Cowen/AFS Freight Index, which provides predictive pricing tools for such sectors as less-than-truckload (LTL), truckload (TL), and parcel shipping (separately focusing on express and ground). In ation is working as a double-edge sword: while pushing prices up, it also is limiting demand by slowing purchasing power, according to Tom Nightingale, CEO of AFS. Compared to a record-breaking Q1 in the previous report, the new report indicates that growth trends are more likely “to subside but not tumble,” with the index remaining elevated in comparison to its 2018 baseline and annually. “Businesses are shifting modes and re-optimizing carrier networks proactively to limit their exposure to higher pricing, but carriers are using fuel surcharges and other accessorials as subtle but effective tools to expand revenue,” Nightingale adds. Other takeaways:
Truckload rates should atten in Q3, from 24.1% in Q2 to 26.5% in Q3, due to historical data and seasonal effects such as the end of produce season and manufacturers and retailers ramping up for the holidays.
Truckload miles per shipment were down 6.7%, from Q2 to Q3, caused by inventory build-up and port congestion, with demand softening. Q2 year-to-date cost-per-shipment was down 4.9%, and linehaul cost-per-shipment down 5.2% in Q2, but up 14.5% annually.
LTL average fuel surcharge jumped from 34% in Q1 to 47.6% in Q2, with fuel representing 20.7% of total cost-per-pound through June, well above the 13.4% rate in 2021.
LTL weight per shipment was down 4.4% sequentially, while cost-per- shipment rose 6.8%. LTL rate per pound will remain high in Q3, with annual growth continuing to slow, and the Q3 LTL index forecast at 54%, down from Q2’s 54.8%.
Express parcel rates increased 7.9% from Q1 to Q2, the result of fuel surcharges, weight, service mix, and 2022 general rate increases. The Q3 express parcel freight index is expected to drop from Q2’s all-time high of 5.5% to 2.2%. The Q3 ground parcel index is forecast at 25.7%, down from Q2’s record of 27.7%.
The better-than-expected pricing trends data in the TL ndings may be related to capacity coming out of the marketplace, which Cowen notes could be at a rate higher than expected. “That said, we are still cautious on TL pricing in Q4 2023 due to the macro-economic backdrop,” says Jason Seidl, a Cowen analyst.
20 Inbound Logistics • August 2022
Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92Powered by FlippingBook