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RED HOT COLD CHAIN 2022 global cold chain logistics market size: USD 280.2 BILLION By 2031: USD 1,024.1 BILLION Growing at a CAGR of 15% between 2023–2031
FOLLOW THE MONEY NEW JERSEY ($116,356) NEW YORK ($108,966) WASHINGTON ($105,545) States that offer the highest average salaries for supply chain jobs $90,812 Average median salary for supply chain jobs VERMONT, WYOMING, NORTH DAKOTA States with the most supply chain job openings per capita GENERAL/ OPERATIONS MANAGERS The supply chain jobs with the most openings: 35,000+ job openings posted online PURCHASING MANAGERS Have the highest median salary: $131,350 LOGISTICIANS Have the highest 10-year projected growth rate (18%) among supply chain jobs COST ESTIMATORS Have the lowest growth rate and are projected to decline by 3% over the next few years –Zetwerk study using Bureau of Labor Statistics and O*Net OnLine data to analyze wages and employment across various roles in the United States
The Federal Highway Administration apparently has lost its sense of humor. It issued new guidance on interstate traffic-safety messages: “Signs should avoid language that uses pop-culture references or humor.” The signs can be distracting, the FHA says, and should be used only to deliver information.
––Straits Research
NO AI, JUST OJ In a limited-edition run, Tropicana has renamed itself Tropcn, removing the letters “a” and “i” from the label to take a stance on AI, insisting there is nothing artificial about its juice. “Artificial just isn’t in our DNA,” said Monica McGurk, chief executive officer of Tropicana Brands Group’s North American business unit. But not every bottle of Tropicana features the new name. The company is hiding only 100 bottles at grocery stores across the United States. Customers who find a bottle can scan a code and enter for a chance to win a trip to the original orange juice state, Florida.
LOOK MA, NO PILOT!
Reliable Robotics recently flew a large cargo plane 50 miles with no pilot on board. Using advanced navigation and redundancy features, the company says the autonomous system can prevent the two most common causes of airplane accidents: controlled flight into terrain and loss of control.
February 2024 • Inbound Logistics 1
CONTENTS FEBRUARY 2024 | VOL. 44 | NO. 2
GOOD QUESTION Have companies made progress toward supply chain resiliency?
38 PORTS UPDATE: NEW STRATEGIES FOR A NEW AGE In the post-pandemic era, U.S. ports are steering new courses toward sustainability, collaboration, infrastructure, and more. 42 With cargo theft surging—bolstered by sophisticated new tech-based methods— it has never been more important for shippers and their partners to emphasize security best practices. 46 5 WAYS TO BOOST CARGO SECURITY
6
INSIGHT 4 CHECKING IN Bringing automation to food production 6 GOOD QUESTION Have companies made progress toward supply chain resiliency since the pandemic? 8 10 TIPS Building brand reputation through the supply chain 26 VIEWPOINT The independent contractors rule raises more questions than answers 28 IT MATTERS What tech trends should you prioritize? 30 SMART MOVES The power of diversity in transport tech 56 LAST MILE Cargo theft terms and tricks to watch out for INFO 50 SUPPLY CHAIN INSIGHTS 54 CALENDAR 55 RESOURCE CENTER INPRACTICE 10 LEADERSHIP: DAVE BOZEMAN STAYS CLOSE TO THE WORK As a leader in today’s trying business environment, the CEO of C.H. Robinson embraces lean principles, gains insights from his people, and makes decisions based on firsthand experience.
FEATURES 32
13 TOP BENEFITS OF AUTOMATING YOUR SUPPLY CHAIN
SUPPLY CHAIN CAREER HACKS
From attracting talent to boosting visibility, companies are gaining key advantages by automating some or all of their supply chains.
Supply chain management professors and practitioners share advice and strategies to boost your skills set and supercharge your career trajectory.
CONTENT PARTNERS 20 The Power of Unstructured Data Offered by DDC FPO 22 How to Future-Proof Your Supply Chain from Freight Embargoes Offered by SMC 3 24 Leveraging Predictive Analytics to Gain a Competitive Edge Offered by Argus Logistics 25 Fulfillment Automation: What’s Driving Adoption and How It’s Changing Operations Offered by VARGO
INFOCUS 1 INFO SNACKS 12 VERTICAL FOCUS: HAZMAT/DANGEROUS GOODS 14 NOTED 16 TAKEAWAYS 52 IN BRIEF
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, 6116 Executive Blvd, Suite 800, North Bethesda, MD 20852. Periodicals postage paid at North Bethesda, MD, 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, P.O. Box 1167, Lowell, MA 01853-9900
2 Inbound Logistics • February 2024
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CHECKINGIN
Bringing Automation to Food Production
Vol. 44, No. 2 February 2024 THE MAGAZINE FOR DEMAND-DRIVEN ENTERPRISES www.inboundlogistics.com
STAFF PUBLISHER Keith G. Biondo
publisher@inboundlogistics.com
J ohn Deere and SpaceX have partnered to bring new automation advances to food production. Automation in the food supply chain is nothing new and there are many examples of how automation has driven efficiencies by saving time and keeping costs down. Most of the existing examples are found in the middle mile—the warehouse and DCs—moving ingredients and finished consumer products toward the final demand point.
EDITOR Felecia J. Stratton
editor@inboundlogistics.com
SENIOR EDITOR Katrina C. Arabe
karabe@inboundlogistics.com Amy Roach amy.roach@thomasnet.com
DIRECTOR OF STRATEGIC CONTENT
CONTRIBUTING EDITORS Merrill Douglas • Tom Gresham Karen M. Kroll • Rich Osborne
CREATIVE DIRECTOR Jeof Vita
Keith Biondo, Publisher
jvita@inboundlogistics.com
DESIGNERS Nicole Estep Arlene So
Several leading companies have taken shots at automating the final mile with drone deliveries. Amazon Air, DHL, FedEx, UPS, and Walmart are all testing the waters with drone delivery of products, but not necessarily just food. Robot final mile is also being tested in select urban areas. But those automated bot delivery attempts have hit some speed bumps. Drone and bot delivery methods are in their infancy and may be successful in the far future, but today they can’t compete with something much better— human-driven DoorDash, Instacart, and Uber Eats last-mile food delivery. Now comes a new alliance between two great brands—John Deere, with a long and storied 188-year history in food production, and Elon Musk, who is creating history with Starlink and everything else, it seems. Deere has a long history in farm automation. How is this different? What’s the end game? For the first time, it brings web tone automation capabilities to rural internet dead zones, lighting up the first mile or starting point in the food supply chain. Aaron Wetzel, vice president of production for Deere, says it best: “Farmers must complete tasks within extremely short windows of time. This requires executing incredibly precise production steps while coordinating between machines and managing machine performance. Each of these areas are enhanced through connectivity, making the entire operation more efficient, effective, and profitable.” The possibilities are exciting. Enterprise automation from low earth orbit, to rural farms both large and small, in the United States and around the world. Super accurate maps of all available arable fields. Increased efficiency and sustainability. Better water and fertilizer management. Then there are the seasonal labor shortage challenges farms must contend with. Satellite automation can help there with all of that and more. Imagine robotic combines, seeders, plows, fertilizers, or anything a tractor can pull. And most importantly for supply chain planning purposes, 10-ton harvesters like sentient bugs picking the fields clean and pushing advice to demand points around the globe. The offline start point of the food supply chain is coming online.
Amy Palmisano apalmisano@inboundlogistics.com
DIGITAL DESIGN MANAGER
PUBLICATION MANAGER Sonia Casiano
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CIRCULATION DIRECTOR Carolyn Smolin
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4 Inbound Logistics • February 2024
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GOODQUESTION Readers Weigh In
Have Companies Made Progress Toward Supply Chain Resilience Since the Pandemic?
YES. Since the pandemic, supply chains have undergone a shift from being perceived primarily as a cost center to an opportunity for competitive advantage. Organizations have built resilience by shifting to a more modern, digital supply chain and leveraging technology like artificial intelligence (AI) to support planning, procurement, and logistics. –Nirav Patel CEO, Bristlecone NEARSHORING AND ALLY SHORING have improved supply chain resilience since the pandemic, with nearshoring reducing dependency on overseas suppliers and shortening lead times, while ally shoring fosters collaborative alliances for shared risk mitigation and agile responses to disruptions. –Mark McCullough CEO, Gebrüder Weiss North America NO. Companies built additional infrastructure during the pandemic for more capacity. Now they need capacity in different parts of the country for different things. They need to be more efficient and instead of building even more infrastructure, utilize that unused space to save on costs, transportation, and emissions. –Bill Thayer Founder & CEO, Fillogic CRITICAL SUPPLY CHAINS in food, health, defense, and technology are being studied and reinforced. Companies are expanding data analysis, deepening industry coordination, and enhancing resilience through disruption wargaming.
Passing Grade Overall, I would give it a C-. There have been some signs of risk mitigation, reshoring, and increasing inventory levels, but collectively we are still suffering a hangover from COVID that will take more years to resolve. It will take time to undo 40+ years of rampant offshoring. –Joe Adamski Senior Director, ProcureAbility
Numerous global private/public partnerships are also forming.
2020. Companies are now looking to multi-piece and multi-source, and we are seeing the confluence of planning and execution capabilities that allow for inventory sourcing decisions to match order reality. –Andy Dyer President, Transportation Management, AFS Logistics COMPANIES EMERGED with a focus on helping keep the supply chain flexible and adaptable to sudden shocks. By supplementing labor with robotics, advanced technologies, and new labor sourcing strategies, the supply chain is more resilient to unexpected challenges. –Jason Minghini Senior Vice President, Operations, Kenco THE INDUSTRY HAS MADE LEAPS in supply chain resilience, notably through diversifying logistics networks and accelerating the adoption of digital technologies for better inventory management and demand forecasting. –Dennis Moon COO, Roadie
–Alberto Toribio del Pilar Managing Director, ButcherJoseph & Co.
COMPANIES HAVE ADAPTED THEIR SUPPLY CHAINS to be more resilient. By incorporating risk into the optimization of stock levels, increasing frequencies of reviewing and updating system parameters, and simplifying product portfolios, businesses can continue to adapt to disruptions.
–Chip Barth Managing Director, Supply Chain, TBM Consulting Group, Inc.
COMPANIES DIVERSIFIED their supply base, increased in-region sourcing, and revised their inventory policies. They still need to address the shortage of talent in supply chain management, especially in tech innovation and advanced planning systems. –Shamini Martin VP Marketing, Trigent Software COMPANIES WERE SINGLE- PIECING and single-sourcing, which made for a fragile platform, prior to
6 Inbound Logistics • February 2024
GOODQUESTION
COMPANIES ARE ADVANCING SUPPLY CHAIN RESILIENCE with automation and AI, creating enhancements and increasing productivity during periods of high demand that were otherwise manually unachievable. To mitigate long- term supply chain risks, businesses must consider other tactics like regionalization and workforce training alongside automation and robots. –Annie Noel Chief Operating Officer, Vention OUR CLIENTS HAVE BEEN MORE ACTIVELY exploring resiliency. One method is scenario modeling, which helps companies explore the most efficient and cost- mitigating network structure by identifying where facilities should be, how many are needed, service level performance, functionality, advantages of shoring initiatives, ESG considerations, product mix, and inventory policies. –J.C. Renshaw Senior Supply Chain Consultant, Savills COVID HAS GONE FROM PANDEMIC TO ENDEMIC and the same has happened to supply chain disruptions; economic, geopolitical, cyber, and environmental disruptions dominate. Supply chains have become more resilient; however they have not recovered to their pre-pandemic performance with too many being bottom line—not resilience—focused. –Matt Spooner Industry Thought Leader, Kinaxis COMPANIES HAVE MADE SIGNIFICANT STRIDES through further diversification of suppliers and more supply/product redundancies. Businesses were also forced to reevaluate and strengthen their operations where vulnerabilities became readily apparent including asset controls and employee policies. –Michael B. Wilson CEO, Consolidated Chassis Management (CCM) ONE, BUSINESSES REALIZED THEY LACKED real, accurate, timely information about their
Proceed with Caution
Yes and no. Since 2020, many shippers have grown more resilient by reevaluating their ordering and inventory levels, diversifying vendor relationships, investing in nearshoring, and leveraging systems or partners that provide greater visibility into supply chains performance. However, a softening transportation market over the past 12-15 months has provided a false sense of security for companies who have not taken the time to shore up their processes, and they may struggle to adapt when cheap and reliable capacity is less abundant in a tighter market. –Ben Steffes VP, Managed Services, Coyote Logistics
shipping operations—what they were spending, what was driving expenses, how costs were increasing each year. Two, many realized diversification of carriers was important to give them the redundancy they needed in case of delays. These moves have resulted in real progress and improved resiliency across the industry. –Josh Dunham Co-founder and CEO, Reveel YES FOR SOME. Some companies have significantly leveled up their supply chain visibility so that they can react in real time with high accuracy. However, there’s still quite a few companies that need to invest in supply chain and inventory visibility to stay resilient. –Sankalp Arora CEO & Co-Founder, Gather AI COMPANIES MOVED TOWARD VENDOR DIVERSIFICATION , automation, nearshoring, creative staffing, and risk mitigation solutions. Many were able to test and improve contingency plans. Many will return to the old ways, but the overall industry will learn and evolve. –Jim Heide COO, Loadsure THE SUPPLY CHAIN BENT but never broke during the pandemic, largely due to the incredible resilience of our transportation system, and due to the risk mitigation actions taken by
logistics companies. There was never a day—ever—where we were not able to locate a truck to move a shipment. –Anne Reinke President & CEO, Transportation Intermediaries Association MOST COMPANIES ARE PROACTIVELY IDENTIFYING alternative products in case of supply issues like delays or manufacturing bottlenecks. It’s crucial to evaluate supply chain and inventory management activities and collaborate with suppliers to ease burdens, safeguard against supply disruptions, and mitigate future pain points. –Dakonya Freis VP, Commercial Development, Nelson-Jameson
Have a great answer to a good question? Be sure to participate next month. We want to know: What’s one supply chain misconception that needs to be cleared up now? We’ll publish some answers. Tell us at editorial@inboundlogistics.com or tweet us @ILMAGAZINE #ILGOODQUESTION
February 2024 • Inbound Logistics 7
10 TIPS
In today’s competitive world, maintaining a positive brand reputation is critical to success. Every interaction and touchpoint across your supply chain is an opportunity to build trust and deliver an exceptional experience to clients, vendors, and stakeholders. Building Brand Reputation Through the Supply Chain
1 FOCUS ON
streamline operations, enhance communication, and effectively respond to ongoing market conditions and challenges. Web-based supply chain and logistics technology enhances global connectivity and is available 24/7. Transparent supply chains foster trust and confidence in your brand. 7 FOSTER SUPPLY CHAIN INNOVATION. Encourage innovative solutions that could significantly improve your brand reputation. Innovation can lead to a better customer experience, improve efficiency, and enhance your reputation for being on the cutting-edge of industry advancement and trends. 8 ENSURE SUSTAINABILITY. Whether it’s sustainable packaging, transportation and routing choices to reduce your supply chain carbon footprint, or selecting
renewable energy sources in your warehouse, you can make eco-conscious decisions that demonstrate your commitment to a greener, healthier future. Your ongoing efforts in developing environmentally friendly solutions is a key way to create a planet- friendly supply chain, as well as enhance your brand reputation. 9 COLLABORATE ON PLANNING. Build a positive brand reputation by developing rapport with vendors and other stakeholders. This leads to better collaboration and mutual support, which serves you well when exceptions occur and supply chain performance relies on resolving these issues quickly. The essence of collaboration, honesty, and respect lays a strong foundation for year- round interactions.
SUPPLIER RELATIONSHIPS. Know your suppliers and work to build strong, trusted relationships. Their reputation directly impacts your brand. Collaborations should align with your company’s values, quality standards, and ethical practices.
2 ENSURE CONSISTENT QUALITY CONTROL. Quality control is not just about your final product; it extends to all aspects of your business. When sourcing components and materials from global suppliers, insist on stringent quality checks to ensure they are meeting your standards, each and every day. This maintains a consistent brand reputation for your company. 3 VERIFY DATA ACCURACY AND RELIABILITY. Inaccurate supply chain and logistics data can delay shipments, add costs, and hurt your reputation. Your logistics technology platform should have clean, verified
4 COMMUNICATE IN A TIMELY MANNER. From start to finish, transparent and timely communication is key to building trust with
customers and supply chain vendor partners. Be a good partner who communicates effectively and resolves issues promptly to avoid supply chain disruptions. 5 PRIORITIZE SOCIAL RESPONSIBILITY. Engage in community initiatives and support local causes where your company operates. Employees can actively participate in these activities, enhancing your brand’s reputation as a socially responsible organization and doing something good for your community and its people. 6 BUILD A TRANSPARENT SUPPLY CHAIN. Eliminate siloed communication. Connect internal stakeholders, vendor partners, and customers to simplify and
data so all supply chain stakeholders can make
10 VET YOUR
optimal, informed decisions. Data integrity standards are an effective way to drive supply chain value for your customers and all parties to a shipment.
SOURCING CHOICES. Your sourcing decisions can have a direct impact on your brand reputation. Ensure that your sourcing decisions include an ethical and sustainable practices review that involves fair labor practices, environmental standards, and community engagement efforts.
SOURCE: JEFF PLUMLEY, CHIEF COMMERCIAL OFFICER, ASF LOGISTICS
8 Inbound Logistics • February 2024
LEADERSHIP Conversations with the Captains of Industry
Staying Close to the Work
Soon after Dave Bozeman joined C.H. Robinson as CEO in 2023, he launched a company-wide challenge called What’s Impeding Your Speed? “I asked everyone, ‘What is keeping you from doing your job or going faster in your work?’” he says. Bozeman expected to send about 345 handwritten notes thanking the global 3PL’s employees for their responses. “But I received 3,400 ideas from more than 2,400 employees,” he says. “That told me we have a speak-up culture, full of people who want to win. It was all very rich data.” Gaining insights from rank-and-file employees is a signature strategy for Bozeman, who has also held executive positions at Harley-Davidson, Caterpillar, Amazon, and Ford Motor. He recently talked with us about his leadership philosophy and recent efforts to foster continuous improvement at Robinson. IL : What was one event early in your career that helped to shape you as a leader? When I came to Harley-Davidson in 1992 as an entry-level manufacturing engineer, I badly wanted to carry a two-way radio on the job. Only supervisors carried radios, but I wanted it so much, my superintendent finally handed me one. That obliged me not only to do engineering work, but also to spend time on the floor with the people who worked on the flywheel truing line. I took a pounding from those people, because they saw me as management. But at the end of several weeks, a few of them said, “We like the way you listen to us and respect us.” This taught me always to get close to the work and respect the people who do it. When the time came to introduce new processes on the floor, people were cooperative. I’ve carried that lesson throughout my career. IL: What did you learn from serving as vice president of Amazon Transportation Services during the pandemic? It was a crazy time for ecommerce. We worked long hours and handled surging volumes with reduced capacity, since everyone had to be six feet apart. I learned never to underestimate the power of innovation and people. We had to innovate quickly and remember that it’s okay to fail. I tell my teams now, you fail, get up, learn fast, and keep moving. When I look back on that time, I wonder how we made it through. But we became stronger, and we made some important discoveries.
Dave Bozeman CEO, C.H. Robinson
As a leader in today’s trying business environment, Dave Bozeman embraces lean principles, gains insights from his people, and gets close to the work so he can make decisions based on actual data and firsthand experience.
by Merrill Douglas
10 Inbound Logistics • February 2024
LEADERSHIP
IL: What’s the hardest aspect of your job? It’s not lost on me that when I make decisions and take actions, I’m responsible for more than 15,000 employees. We’re in a freight recession right now. People deserve to have leaders who make them feel confident, assuring them that we have a plan to get them through these trying times. IL: What books do you like to recommend to others? I gave the whole organization a book called The Lean Turnaround by Art Byrne. As an easy read that gives insights into what lean is, it provided the Rosetta Stone our organization needed, so we could all talk the same language. On a personal level, one book I love is The Color of Law: A Forgotten History of How Our Government Segregated America by Richard Rothstein. IL: When you’re not working, how do you spend your time? Spending time with family is the big thing. My wife and I have been married for almost 31 years. We met in college, and now we have five children ranging in age from 15 to 30—four are out of college, two work in Florida, one is in law school in Oregon, and one works in Arizona. Also, I’ve become a big-time foodie. I like to cook, and as I have traveled around the world I’ve come to appreciate the power of food to help people connect. n Disruption and Opportunity Two closely related concerns make C.H. Robinson’s customers especially anxious these days. “Number one is the unknown and number two is variability,” says Dave Bozeman. Since the pandemic, shippers have been riding a roller coaster, trying to get inventories back to the right levels while dealing with a freight recession. “Customers are thinking, ‘I certainly don’t want to experience the pain I had when I over-ordered during the pandemic,’” says Bozeman. “There were shipping and logistics issues, and a lot of customers were stuck with inventory. “And it was tough to move goods around the world,” he adds. “So I think they’re being cautious about how and when they order.” Global turmoil—including attacks on shipping in the Red Sea and disruptions at the U.S.-Mexico border—compound challenges for shippers. For example, as workers at the Big Three automakers ended their recent labor strike, the tight border made it hard for tier one suppliers in Mexico to speed auto parts back into the pipeline. C.H. Robinson helped with creative solutions, such as shifting some shipments to air freight. “We thrive in disruption,” Bozeman says.
IL: You’re a lean practitioner. How have you been implementing lean principles at C.H. Robinson?
You can’t just walk in and say, “Today we’re going to do lean.” You need to make sure everyone speaks the same language. Maybe people don’t know anything about lean, but if I say I want to reduce waste in all the processes within a company—waste of information, waste of movement—people understand that. That’s the approach I took at the beginning, walking through discussions of continuous improvement and helping people at Robinson adopt that mindset. Also, I like to use a lean practice called gemba, which means “go see.” Just as in my Harley-Davidson days, I like to get close to the work. As a leader, that lets me base decisions on actual data and things I have witnessed. IL: What’s an example of an improvement Robinson has made by implementing lean principles? We have approximately 100,000 customers. Some of the largest have IT systems that connect directly to our IT systems, allowing for seamless transactions, for example, when they need a quote. But many other customers, even quite large ones, communicate with us via unstructured data, which generally means email. Then a human needs to do the research and get back to that customer with a quote. But if you examine that process through the lean framework, you ask how we can take waste out of that system using technology such as generative AI and large language models. With some of that technology, we can deal with 500,000 unstructured data points daily. The system retrieves the right information, and in some cases it talks back to the customer in a conversational way. Our bar, which we’re hitting, is to get that quote back to them in less than one minute. IL: What characteristics make you an effective leader? I hope the people who work around me will say that I’m authentic. I like to communicate consistently and effectively. Driving the development of others is my responsibility, and it gives me satisfaction. Solving problems through the use of data is very important. So is driving a high bar to take people where they didn’t think they could go.
February 2024 • Inbound Logistics 11
HazMat/Dangerous Goods
HAZMAT TO-DO LIST Hazardous materials shippers have a lot of moving pieces to manage. Of all the shipper responsibilities, properly classifying a hazardous material is most critical because all the other requirements are based on that proper identification. According to the Federal Motor Carrier Safety Administration, hazmat shippers are responsible for: • Determining whether
Ensuring the safe and compliant transportation of hazardous materials requires careful planning and due diligence. Choosing the right carrier is crucial, and asking the right questions can help you mitigate risks and ensure smooth transit for your hazmat shipment. Before assigning a load, ask your prospective carrier: 1. Are you properly licensed and insured for transporting my specific hazardous material? Different hazmat classes have specific requirements for carrier licenses and insurance coverage. Verify the carrier holds the necessary permits and has insurance limits that meet your risk tolerance and regulatory requirements. 2. Do you have experience transporting this specific type of hazardous material? Experience matters. Ask about the carrier’s track record with similar hazmat shipments. Inquire about their safety protocols, training programs, and any incidents they have encountered. 3. Can you provide detailed information on your equipment and personnel qualifications? Ensure the carrier’s vehicles are properly equipped for your hazmat shipment, including placards, safety equipment, and emergency response measures. Verify the driver’s hazmat endorsements and training certifications match the specific requirements for your load. 4. What is your emergency response plan in case of an accident or incident? Accidents can happen. Ask about the carrier’s established emergency response procedures and their communication channels. Learn who to contact in case of an incident, and ensure their plan aligns with your own. 5. Can you provide references from previous customers who shipped similar hazmat materials? References offer valuable insights into the carrier’s reliability and performance. Contacting previous clients who shipped similar hazmat materials allows you to verify the carrier’s claims firsthand. 6. What is your process for ensuring regulatory compliance throughout the transportation process? Understanding the carrier’s approach to regulatory compliance demonstrates their commitment to safety and adherence to industry standards. 6 QUESTIONS TO ASK A HAZMAT CARRIER
a material meets the definition of a “hazardous material” • Proper shipping name • Class/division • Identification number • Hazard warning label, packaging, marking, placarding • Employee training • Shipping papers • Emergency response • Certification • Compatibility • Blocking and bracing • Security plan • Incident reporting information and phone number
12 Inbound Logistics • February 2024
Hazmat shipments account for 12% of all freight tonnage shipped within the United States. That equates to roughly 3.3 billion tons of hazardous materials shipped every year, worth • Request copies of the carrier’s insurance certificates and safety permits. • Conduct a background check on the carrier’s safety record. • Negotiate contractual terms that clearly define responsibilities and liabilities. • Maintain open communication with the carrier throughout the transportation process. BEFORE ASSIGNING A HAZMAT LOAD
Dangerous goods professionals highlight the need to reduce process complexity, establish effective staff recruitment and retention programs, and enhance digitalization to facilitate the safe and compliant transport of dangerous goods (DG) and hazardous materials, according to the 2023 Global Dangerous Goods Confidence Outlook survey, sponsored by Labelmaster, the International Air Transport Association (IATA) and Hazardous Cargo Bulletin. Among the survey’s key findings and recommendations: DG professionals are confident about the industry’s level of infrastructure and investment. 85% of respondents say that their infrastructure is on par or ahead of the industry and 92% increased or kept their DG investment the same year-over-year. While 56% believe their current infrastructure meets existing needs, only 28% responded that it meets both current and future needs. Process complexity, mis-declared DGs, and attracting qualified staff remain challenging. 72% of respondents need more support to address future DG compliance. Views of the labor market are mixed; 40% indicate that current challenges will persist, 32% expect the labor market to improve and 28% say that it will become more difficult to find qualified staff. 56% say they expect the mis-declaration of DGs to stay the same or worsen. Sustainability remains a focus across the industry. 73% of DG professionals report that their organizations have sustainability initiatives in place or planned. However, 27% do not have any sustainability initiatives planned, indicating room for improvement. TOP SUPPLY CHAIN CHALLENGES FOR DANGEROUS GOODS EXPANDING U.S. CHEMICALS MANUFACTURING
an estimated $1.9 trillion .
Magrathea Metals, METSS Corp., Powdermet, and Synthio Chemicals. Lacamas Laboratories received the largest contract at $86.2 million. The next two largest contracts were CoorsTek at $49.6 million and Magrathea Metals at $19.6 million. The commercial sector can also apply these chemicals to various operations, including consumer products, pharmaceuticals, automotive components, energy, and agriculture. The funding adds to 10 awards and $289 million the DPAI Program has issued since the start of 2024.
To increase domestic manufacturing of military-grade chemicals, the U.S. Department of Defense will award $192.5 million to seven companies under the Defense Production Act Investments (DPAI) Program. The funding would establish, expand, and modernize U.S. manufacturing capacity for 22 critical chemicals in defense systems applications. The department expects the companies to reach a national capacity of chemicals by 2028. The seven companies, which have proven that they can produce one or more of the military-grade chemicals, are CoorsTek, Goex/Estes Energistics, Lacamas Laboratories,
February 2024 • Inbound Logistics 13
NOTED [ IN FOCUS ]
The Supply Chain in Brief
> GREEN SEEDS
> SEALED DEALS
• Channel-free logistics platform Fillogic will manage footwear brand Koio’s ecommerce and store fulfillment, reverse logistics, and transportation optimization. Fillogic converts under-utilized retail space in shopping malls into middle-mile fulfillment and reverse logistics hubs.
n As a result of a continued relationship with BioNatur Plastics, which manufactures biodegradable plastic products for use in air cargo operations, American Airlines Cargo reduced long-term plastic waste by more than 150,000 pounds, the equivalent of 8.6 million water bottles, in 2023. n ORBIS’ Ocean in Mind packaging initiative focuses on recovering and repurposing single-use plastic waste found on coastlines and using it in supply chain packaging. ORBIS blends the recovered plastic waste with other materials when it manufactures its containers and pallets.
• OBI, a home and garden retailer across Europe, has selected TradeBeyond’s multi-enterprise platform for an extensive supply chain digitalization project.
• MyFBAPrep entered a strategic partnership to provide Blenders Eyewear with warehousing solutions powered by its SaaS platform Preptopia. The contract covers marketplace order fulfillment services, and logistical support tailored to Blenders’ specific needs.
• CEVA Logistics, a subsidiary of the CMA CGM Group,
signed a new multi-year agreement to continue
providing all logistics services for Scuderia Ferrari’s cars and equipment during Grand Prix events, as well as for GT races and Ferrari Challenge events.
> RECOGNITION
• CSX received the inaugural W.F. Thompson Award for Class I Operating Performance for 2023. The award, presented by Loop Capital, recognizes the Class I railroad with the best operational performance in a calendar year. • To recognize its consistent ability to deliver improved end-customer satisfaction, reliable service, and reduced transit times, Schneider Electric presented GEODIS with its 2023 Best Service Award in China. • Zion Solutions Group was honored with the 2024 Most Valuable Partner Award by the Material Handling Equipment Distributors Association. The award recognizes companies for their commitment to education and community, and innovation.
> GOOD WORKS
• Averitt Express and MoonPie teamed up to deliver more than 10,000 boxes containing 60,000 MoonPies to Fort Campbell to thank soldiers for their service to the country. Averitt delivered the MoonPies at no cost.
• US Foods donated more than $12 million in food, supplies, and monetary contributions to address hunger-relief efforts—the equivalent of about 5 million meals or 225 truckloads of product.
14 Inbound Logistics • February 2024
NOTED
> M&A
> UP THE CHAIN
Global industrial manufacturer and distributor Optimas Solutions appointed Jim Heller ( left ) as the new senior vice president of distribution, and Chris Martens as the new vice president of manufacturing for the Americas region.
National DCP, the Atlanta- based foodservice company serving Dunkin’ restaurants worldwide, promoted Stephen Down to CEO. Down joined NDCP as CFO in 2023, bringing 30 years of financial and executive leadership experience.
n PS Logistics acquired Buddy Moore Trucking of Birmingham, Alabama. The transaction enhances PS Logistics’ flatbed, dedicated dry van, and brokerage operations, and diversifies its offerings in the Southeast. n To strengthen its geographic coverage of the European food network, Dachser acquired Frigoscandia AB, a full-service provider of temperature-controlled and frozen food logistics in the Nordic region. n Kenco acquired The Shippers Group, a Dallas- based third-party warehousing company. The strategic partnership adds to Kenco’s capabilities by providing increased capacity, broader geographic reach, and an expanded suite of services.
Magnate Worldwide appointed Matt Hamilton as president of its global forwarding services segment. Hamilton has an extensive history in global logistics and supply management, with over 27 years in the industry.
Omar Shamsie was named chief commercial officer of Odyssey Logistics. He will focus on driving strategic sales growth, developing vertical markets, and cross-selling initiatives to deepen customer relationships.
Polaris Transportation Group appointed Richard Kunow as president and Dave Cox as CEO.
Katie Quinn, formerly the COO of R2 Logistics, has assumed the role of CEO to steer the company’s third-party logistics services and strategic supply chain solutions into the future.
n Ryder System acquired Cardinal Logistics, which provides
Jeff Harpole will become chief operating officer at Ruan, succeeding Dan Van Alstine when he retires near the end of 2024. Van Alstine will serve on Ruan’s board of directors starting in 2025.
dedicated fleets and professional drivers to service complex route structures across distribution centers, suppliers, and stores. n Daseke has entered into a definitive agreement to be acquired by TFI International , a North American transportation and logistics provider.
> MILESTONE
n The Raymond Corporation facility in Greene, New York, is celebrating 100,000 employee-submitted kaizens in operations since introducing the program in 2006. Rooted in continuous improvement, kaizen is based on the idea that small ongoing changes over time will result in significant improvements.
February 2024 • Inbound Logistics 15
TAKEAWAYS Shaping the Future of the Global Supply Chain
SPOTLIGHT ON FREIGHT AUDIT & PAYMENT: INTEREST IS UP IN KEEPING COSTS DOWN Optimizing transportation spend is top of mind for shippers today—and the emphasis is likely to grow as companies seek ways to maximize budgets across every department. As a result, the need for freight audit and payment services is growing. That’s the key finding of The Global Freight Audit and Payment Market Report from Verified Market Research, which notes that an increase in demand for effective transportation and logistics management systems is driving market growth. Some key questions the report answers include: • Why outsource this function? In addition to cost reduction, outsourcing the freight audit and payment function enables shippers to reduce time spent on tasks like collecting carrier invoices, conducting freight invoice audits, making payments to carriers, and pulling detailed reporting on freight costs and services. The highly regulated nature of the U.S. transportation market is another factor pushing shippers to freight audit and payment services. The report shows that shippers are adopting these services to ensure compliance with various regulations. • How big is the market? The report notes a market value of $696.11 million in 2022 and projects that number to reach $1.85 billion by 2030, growing at a compound annual growth rate (CAGR) of 13.67% from 2024 to 2030. • What are the market segments? Currently, the market is bifurcated based on organization size, mode, industry verticals, and geography. - Large organizations make up the largest market share, accounting for 64.48% of the market in 2022, with a market value of $448.87 million. The report projects this number will grow at a CAGR of 13.67% during the forecast period. - Road freight accounted for the largest market share of 39.16% in 2022, with a market value of $272.59 million. It is projected to grow at the highest CAGR of 14.33% during the forecast period. - Top industries included in the market are retail, manufacturing, food and beverage, and healthcare . Retail accounted for the largest market share of 31.35% in 2022, with a value of $218.21 million and a CAGR projection of 13.84% during the forecast period. - Regionally, the market is classified into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America . North America accounted for the largest market share of 44.9% in 2022, with a market value of $312.57 million and is projected to grow at a CAGR of 13.77% during the forecast period.
MAKE ROOM FOR TWINS The popularity of supply chain digital twins is rising. These virtual replicas or simulations of a physical supply chain— created using real-time data and advanced technologies such as the Internet of Things, artificial intelligence, and machine learning—enable organizations to better understand, analyze, predict, and optimize their supply chain processes. How great is the demand? According to Market.us, the worldwide supply chain digital twin market is projected to reach a value of $8.7 billion by 2033 —a compound annual growth rate of 12% during the forecast period from 2024 to 2033. The increasing complexity of supply chains, the need for greater visibility and control, and the rising demand for predictive analytics in supply chain management is driving the growth in this market, according to the report.
16 Inbound Logistics • February 2024
TAKEAWAYS
TOP TRADE DISRUPTORS While the pandemic is firmly in our rearview mirror, a new batch of disruptions have popped up to challenge the supply chain. The Q1/ Q2 2024 Retail Sourcing Report from TradeBeyond outlines the top trade disruptors that are likely to throw a wrench into global sourcing plans and buying decisions in 2024. Here are the key highlights: • Rate fluctuation: Extreme shipping rate volatility with attacks in the Red Sea have sent shipping rates surging since December, more than doubling the rates on some European lanes and creating substantially longer transit times. • Looming uncertainty: The shipping crisis has made supply chain disruptions more likely, elevating fears of a return to the bottlenecks, component shortages, and product delays that supply chains endured in recent years. • Tech spend coming: The pace of digitalization continues to accelerate in retail supply chains, with more than 90% of supply chain managers saying their companies are actively engaged executives anticipate that AI, cognitive computing, and cloud applications will be their greatest areas of investment in digital operations over the next three years. • Manufacturing slump: The most recent GEP Global Supply Chain Volatility Index warned of continued downturn in global manufacturing through at least the first quarter of 2024 amid softened demand, especially in Europe. in digital transformation. And 46% of supply chain
Mega Money for Intermodal Projects In a win for intermodal infrastructure, the U.S. Department of Transportation (USDOT) recently selected 37 projects to receive funding through the Bipartisan Infrastructure Law’s Mega and Infrastructure for Rebuilding America (INFRA) grant programs. Several of the projects will boost intermodal infrastructure across the country. The Mega Program, also known as the National Infrastructure Project Assistance program, funds large, complex projects that are difficult to fund by other means and likely to generate national or regional economic, mobility, or safety benefits. Congress established the program in 2021 through the Bipartisan Infrastructure Law and dedicated $5 billion to the program over five years. The most recent awards were the second round of funding, worth roughly $2 billion. INFRA is a competitive grant program that provides funding for multimodal freight and highway projects of national or regional significance to improve the safety, efficiency, and reliability of freight movement in and across rural and urban areas. The most recent annual program funding amount is $3.1 billion and the annual award amount is $1.5 billion. Intermodal projects receiving grants in this round of Mega and INFRA funding include: • America’s Green Gateway: Pier B Rail Program Buildout, Long Beach, Calif. The project will complete the Pier B On-Dock Rail support facility program by significantly enhancing container-on-rail service to and from the ports of Long Beach and Los Angeles. • St. Lucie River Railroad Bridge Replacement Project, City of Stuart, Fla. The project will replace the existing 100-year-old St. Lucie River Railroad Bridge with a new double-track structure. By diverting freight traffic to rail, the project will increase safety for marine traffic, decrease the potential for blocked grade crossings and vehicle collisions, and shift single-occupancy vehicles to passenger rail travel. • East River Berth Replacement Project, Garden City, Ga. The project will replace a port berth and two vessel berths at Georgia Ports Authority’s Port of Brunswick’s East River Terminal and will also reduce greenhouse gas emissions by supporting a modal shift from truck to rail for transporting commodities to the Port of Brunswick. • Louisiana International Terminal Project, St. Bernard Parish, La. The project will construct a new container terminal on the Gulf Coast for the Port of New Orleans that is not air-draft restricted and can accommodate larger vessels.
February 2024 • Inbound Logistics 17
TAKEAWAYS
AI in Transportation: All Talk, No Action? While artificial intelligence (AI) is one of the most buzzed-about topics within the supply chain sector, AI adoption is lacking severely in the U.S. transportation and logistics (T&L) market, according to new data from HERE Technologies and Amazon Web Services. In a multi-country survey of transportation and logistics professionals in the United States, Germany, and the United Kingdom, HERE found a significant gap in the adoption of basic data analytics. The survey results underscore the untapped potential of AI—from data analytics supported by machine learning to optimized fleet routing, predictive maintenance, and streamlined processes for strategic decision-making. Here are the report’s key takeaways: • Only 50% of T&L professionals across the three countries say that their organizations utilize basic data analytics in their operations. At the same time, 25% of all respondents state their organization leverages AI capabilities. • Cost (23%) is the leading barrier to tech implementation. • Potential disruption to existing services (12%) and lack of internal expertise (11%) were the second and third most cited barriers to technology implementation. Somewhat conversely, survey participants were optimistic about their progress toward supply chain visibility, with 86% reporting notable progress toward supply chain visibility and 18% considering their progress significant. Among modes, 50% indicate truck freight has the highest visibility, while 45% cite ocean freight as the least visible mode of transportation ( see chart ). The untapped potential of AI US | Which of the following ways best describe how your organization is using data analytics and/or AI to improve supply chain management?
WALMART WINGS IT The nation’s largest retailer will soon boast the retail sector’s largest drone delivery footprint. Walmart recently unveiled plans to dramatically expand its drone capabilities across the Dallas-Fort Worth metroplex, adding more than 30 municipalities and towns in North Texas. The expansion will enable the company to reach up to 1.8 million additional households —the most ever by a retailer offering drone delivery in a single market—and cover as much as 75% of the metro area. Individuals who live within 10 miles of participating stores will be able to order thousands of items, ranging from snacks and beverages to baby wipes and over- the-counter medications, for delivery by drone in 30 minutes or less and potentially in as fast as 10 minutes. The retail giant is partnering with drone delivery companies Wing and Zipline for the service; both are authorized by the FAA to fly drones beyond the line of sight of operators. Walmart says it has safely completed more than 20,000 drone deliveries over some two years of test flights.
We do not currently use artificial intelligence (AI) in our supply chain management
27%
We use basic data analytics tools to track and analyze supply chain performance
25%
We utilize basic data analytics to identify inefficiencies and streamline supply chain processes
24% 24%
We do not currently use basic data analytics in our supply chain management
We leverage both basic data analytics and AI for real-time tracking and predictive maintenance in our supply chain
14%
AI is integrated into our supply chain to automate decision-making and enhance overall efficiency
10% 10%
We employ AI algorithms for demand forecasting to optimize inventory management
Supply chain visibility progressing
US | How would you rate your company’s progress toward real-time supply chain visibility on a scale of 1 to 5, with 5 being the most progress and 1 being the least? 45% cite ocean freight as least visible mode of transportation 50% indicate truck freight as having the best visibility
Source: HERE Technologies/Amazon Web Services
18 Inbound Logistics • February 2024
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