Inbound Logistics | August 2023

AUGUST 2023

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DELIVERING LOGISTICS LAST-INCH

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BITE SIZED SUPPLY CHAIN/LOGISTICS INFORMATION Info SNACKS

WOMEN TAKE THE WHEEL 12.1% of overall professional drivers who hold commercial driver’s licenses and drive heavy- duty trucks are female. 43.5% of overall dispatchers are women. –Women In Trucking Association Index

REMOTE CONTROL A new technology addresses workplace safety challenges by enabling people to remotely drive forklifts from the safety of an office, from up to thousands of miles away. Phantom Auto launched its remote operation technology at the Maersk Innovation Center, a facility that showcases emerging technologies to improve

A FULFILLING EXPERIENCE 11 MINUTES ON AVERAGE The time it takes for an Amazon same-day facility to get an order ready for delivery. 1.8 BILLION The number of items Amazon delivered to U.S. Prime members the same or next day to date in 2023. That’s nearly four times the volume delivered at those speeds by the same point in 2019. 15% ↓ The distance between Amazon sites and the customer since the beginning of 2023. 12% ↓ Fewer touchpoints within Amazon’s middle-mile network.

operational logistics processes. CJ Logistics America is using the

technology in its warehouse near Dallas. Drivers more than 750 miles away, sitting at computers in Colorado, California, and Mexico (where CJ has warehousing and distribution operations), operate the forklifts to unload double stacked pallets from inbound trucks and move them to the dock ready to be put away.

A HIRE POWER Managing market volatility and building supply chain resilience are among the main priorities for procurement over the coming year, and finding skilled talent to meet those challenges remains difficult. To address the challenges, recruiters identify the top skills they look for when hiring: 1. Negotiation skills (listed number one by 52%) 2. Supplier relationship management — 35% 3. Sourcing — 35% 4. Communication — 34% –Procurement Salary Guide 2023-North America, released by the Chartered Institute of Procurement & Supply and sponsored by Hays Q: WHY DID THE SUPPLY CHAIN MANAGER WAKE UP IN THE MIDDLE OF THE NIGHT? A: He was having a logistical nightmare.

–Amazon Corporate Update

August 2023 • Inbound Logistics 1

CONTENTS AUGUST 2023 | VOL. 43 | NO. 8

FEATURES 32 DELIVERING LAST-INCH LOGISTICS Nailing down the final inches of a delivery can be complex. Fortunately, a variety of solutions show promise to help shippers navigate that crucial leg.

See how the Port of New York & New Jersey and other U.S. ports are meeting new demands.

50 SPONSORED FLORIDA: PRIMED FOR

44 SPONSORED PORT DEVELOPMENT ACCELERATES

LOGISTICS PROMINENCE Long a premier logistics location, Florida has its sights set on growing its already enviable place in the global economy. The state’s logistics assets, including deep-water seaports like Port Everglades, are helping to lead the way.

Across the United States and much of the world, ports are preparing for a changing future. Here’s a look at leading U.S. ports that are accelerating their cargo handling capabilities.

It’s not just a brown box anymore. Check out these new packaging innovations.

38 ECOMMERCE & SUSTAINABILITY: A PACKAGE DEAL

With a focus on ecommerce and sustainability demand, visibility, and improved efficiency, packaging systems are rapidly changing with the times.

Why is the Sunshine State a logistics powerhouse?

2 Inbound Logistics • August 2023

GOOD QUESTION What’s your controversial take on a supply chain issue?

12 How the sporting goods industry stays in the game

INFOCUS 1 INFO SNACKS

12 VERTICAL FOCUS: SPORTS EQUIPMENT 14 NOTED 16 TAKEAWAYS 64 PRODUCT SPOTLIGHT: WEARABLES 66 IN BRIEF 72 LAST MILE Made in the USA? How companies earn that label

26 HEALTHCARE Transportation when life is on the line 28 SC RESILIENCY 4 ways to leverage the cloud 30 SMART MOVES How to counter a hazy warehouse employment outlook INFO 56 SUPPLY CHAIN INSIGHTS 58 WEB_CITE CITY 68 CALENDAR 70 RESOURCE CENTER

CONTENT PARTNERS 20 Cloud-Based Freight Procurement Solution Helps 3PL Optimize RFP Events Offered by SMC 3 22 Balancing Exception Management and Customer Satisfaction Offered by WSI Avoiding compliance pitfalls 24 GREEN LANDSCAPE 5 ways to design a sustainable supply chain INSIGHT 4 CHECKING IN DC diversification: direct-to- consumer reigns 6 GOOD QUESTION What’s your controversial take on a supply chain issue? 8 10 TIPS

INPRACTICE 10 READER PROFILE As part of his Lean journey, Theron Reese, chief operating officer with Integrated Supply Network, (pictured above) is always looking for the next bottleneck and working to tackle it.

The latest wearables and hands-free solutions

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August 2023 • Inbound Logistics 3

CHECKINGIN DC Diversification: Direct-to-Consumer Reigns

Vol. 43, No. 8 August 2023 THE MAGAZINE FOR DEMAND-DRIVEN ENTERPRISES www.inboundlogistics.com

STAFF PUBLISHER Keith G. Biondo

publisher@inboundlogistics.com

U .S. supply chains have been on Ozempic for the past two years and that diet leaves room to invest, experiment, and expand in direct-to-consumer (DTC). DTC is truly demand-driven and not dominated just by the growth in online purchasing. The search for elusive and cost-conscious retail and manufacturing customers is spurring new ideas, backed by operational expansion and investment. Yet the DTC sector is becoming saturated and will

EDITOR Felecia J. Stratton

editor@inboundlogistics.com

SENIOR EDITOR Katrina C. Arabe

karabe@inboundlogistics.com

CONTRIBUTING EDITORS Thomas Gresham • Karen M. Kroll Richard Osborne • Gary Wollenhaupt

CREATIVE DIRECTOR Jeof Vita

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DESIGNER Nicole Estep

nicole@inboundlogistics.com Amy Palmisano apalmisano@inboundlogistics.com

Keith Biondo, Publisher

DIGITAL DESIGN MANAGER

not continue to show the phenomenal growth seen in recent years, according to an Airhouse Research report. Maybe, maybe not. Successful companies are focusing supply chain brainpower on that challenge, so I wouldn’t bet against it. Here’s one example. I was at a crowded (thankfully) mall recently and walked past Starbucks. Right next door was a Nespresso boutique, with a line out the door, selling pods and machines directly to mall shoppers. Nespresso’s distribution channels are robust and well developed and include traditional retailers and department stores. Retail boutiques have been operational for a while, but Nespresso has been expanding recently with locations in 84 countries. Its DTC ecommerce online ordering service is global, serviced here in the States by final mile, direct-to-doorstep experts such as CDL. Nespresso, like Walmart and Amazon, will invest in new ideas and build out new ways to maintain and expand sales and market share. How are the two retail giants expanding customer touchpoints? Both companies are spending millions on roboticized mega fulfillment centers to up the speed and lower the cost of their DTC game. But how are they trying new DTC ways to expand? Walmart and Amazon are supplementing those roboticized channels and tasking retail locations with distribution and fulfillment responsibilities. The mission? Get an expanded geographic direct-to-consumer pipeline. Walmart does that by leveraging its 10,000-store footprint to serve as mini distribution centers and use location advantage in the DTC war by getting closer to consumers. Amazon doesn’t have that footprint advantage, even with Whole Foods, so it is going another way. The plan is to set up distribution partnerships with small businesses—think bodegas and neighborhood shops—to compete with Walmart’s closer-to-consumer location advantage. Amazon will soon test this Hub Delivery Partner program in 25 states to ultimately partner with at least 2,500 small businesses by the end of 2023. The goal is to multiply DC channels, compete with the Walmartian location advantage, and get a closer direct-to-consumer connection. Brilliant! These developments tell me that, despite research to the contrary, DTC sales will continue to grow. What other ways to get closer to customers are just over the horizon?

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4 Inbound Logistics • August 2023

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

GOODQUESTION Readers Weigh In

What’s Your Controversial Take on a Supply Chain Issue? Nearshoring? Not So Fast

THE CURRENT GLOBAL SUPPLY CHAIN IS UNSUSTAINABLE. A sustainable model embeds environmental, social, and governance best practices into how raw materials are sourced, turned into products, and delivered to market. Global supply chains have been focused on achieving financial efficiency. The result is messy and fragile supply chain systems. –Abishek Bhat Vice President, Business Development Trigent Software FORCED STANDARDS, EVEN IF IMPERFECT, make more sense. While historically standards have been determined by the free market (VHS vs. Betamax, etc.), the pandemic demonstrated alarming gaps in all supply chains. We need to act quickly and we do not have enough time for the free market to crown a winner. –Michael Johnson CEO, Metrc MANUFACTURERS AND LOGISTICS PROVIDERS FACE A CRUCIAL CHOICE : They must either (1) engage in candid discussions with their economic development and governmental leaders to invest in the supply chain workforce or (2) embrace an accelerated adoption of automation. The challenges in the supply chain workforce cannot be left unattended. –Craig Turner President, World Trade Center Buffalo Niagara THINGS WOULD RUN SMOOTHER IF MORE GOVERNING ORGANIZATIONS INTERVENED when major bottlenecks occurred. I don’t believe

Nearshoring will not be around for the long term. It’s a short-term reaction to turmoil in overseas sourcing points. In the long term, raw materials will always be sourced from wherever demand can be met at the lowest cost. –Eric Elter Director, Information and Technology Services, KDL Logistics Nearshoring or ally-shoring will prove difficult if not impossible. As much as companies would like to decouple from certain countries, there are powerful reasons (manufacturing expertise and scale) why they will simply have to deal with sourcing from higher-risk countries. –Tony Pelli Practice Director, Security and Resilience, BSI

on the impact of these technologies, I see governments enacting laws to ensure the future of work is sustainable, equitable, and beneficial for all mankind. –Ann Marie Jonkman PMP, Senior Director, Global Industry Strategies, Blue Yonder THE BILLIONS OF DOLLARS completely automate the brokerage industry won’t prove to yield a high return on investment. The billions of dollars spent by large incumbent brokerages on technology to create efficiencies and better serve their clients and carriers is where real value will be created in the industry. –Zach Jecklin Chief Information Officer, Echo Global Logistics SPENT BY STARTUPS on technology with the intent to

any single company or union should have the power to control a process when it hinders the entire supply chain. –Eric Vasquez Owner, Veterans Logistics Group THE RUSSIAN INVASION OF UKRAINE and subsequent war have been tipping points in weakening global supply chains—but climate change has been undermining their resilience since long before that. War might get resolved, but climate change is still the biggest long-term threat to supply chains and is excluded from decision-making. –Himanshu Gupta CEO and Co-Founder, ClimateAI IN THE NEXT 10 YEARS we will see a heavy unionization of roles due to automation and artificial intelligence standards becoming the norm. Based

6 Inbound Logistics • August 2023

GOODQUESTION

WE NEED TO TAKE A HARD LOOK at port disruptions and labor shortages. These issues won’t go away by conducting business as usual. What’s at the heart of work slow-downs? Why aren’t the jobs we have to offer attractive? Finding answers to tough questions will keep global supply chains moving. –Jason Totah President, International & Alaska Odyssey Logistics CALIFORNIA’S AB5 and CARB decisions are having a significant and deleterious effect on the American economy. They are causing driver shortages, owner-operators to exit, and will massively increase costs by forcing electric truck utilization and slowing the supply chain due to long charging times versus fuel pumping. –Joe Adamski Senior Director, ProcureAbility THE RIPPLE EFFECTS OF THE PANDEMIC have ultimately left logistics and procurement in a better place. Yes, they have made for the toughest operating conditions in a generation—but have also shaken up the industry, forced us to embrace innovation and agility, and provided the infrastructure to tackle future challenges. –Matthias Gutzmann CEO and Founder, DPW THE RECENT RISE IN FRAUD IN THE DOMESTIC TRUCKLOAD MARKET will lead to more consolidation of power by large 3PLs and trucking companies that also have large brokerages. • Smaller companies have a higher likelihood of going out of business if they are hit by these schemes. • The costs to ensure compliance will continue to rise, which will more negatively impact providers with smaller shipment counts. • Customers will look to lower the number of carriers they work with to have less exposure to potential fraud schemes that negatively impact their business. –Eric Masotti President, Logistics, Trailer Bridge

Just in Time Is Officially Dead Most companies don’t look at inventory in the right way. I recall reading an article back in the late 1980s entitled J.I.T.–Just in Time or Just

J.I.T.

Inviting Trouble ? I worked for a Japanese consumer giant at the time. That article stuck with me right up to the present day, and the dilemma should resonate with all of us. The answer is not simple, and it can be vastly different depending on the complexity of the supply chain. It’s also important we recognize the following: • The companies hit worst by recent events were the leanest (e.g. automakers; were they “just inviting trouble?”) • These shortages will come again. Demand and supply will forever be at odds. Understanding where the risks are in advance is everything. • OEMs will again panic buy and jam orders for way more than they need. This will cause supply chains all around the world to swell and potentially burst, wreaking havoc on the ecosystem around them. –Andy Pepper VP, Global Supply Chain, Diversified Manufacturing Services (DMS), Jabil

AI-POWERED SUPPLY CHAIN SOLUTIONS SHOULD NEVER STRIVE for 100% automation. In the event they do, organizations will fail to uncover new opportunities that are exposed via human interactions, and progress will stagnate. People fuel growth and expansion, AI powers efficiency. –Alyssa Myers VP Technology, RXO

BLAMING THE SUPPLY CHAIN for what ails us is no longer in vogue. It’s a worn-out cliché customers no longer find acceptable. Some would even say it’s insulting. Establishing and maintaining an impactful comeback means better forecasting, demand planning, and multi-sourcing products. –Eric Allais President & CEO PathGuide Technologies

Have a great answer to a good question? Be sure to participate next month. We want to know: What’s one transportation metric shippers should pay more attention to? We’ll publish some answers. Tell us at editorial@inboundlogistics.com or tweet us @ILMAGAZINE #ILGOODQUESTION

August 2023 • Inbound Logistics 7

10 TIPS

Shipping dangerous goods (DG) safely and compliantly is complex and challenging, and can have a significant effect on your supply chain. Here are 10 ways to avoid compliance issues. Avoiding Compliance Pitfalls

1 KNOW WHAT

8 KNOW WHAT SHIPS WITH YOUR GOODS. Compliance doesn’t pertain just to your company’s products; it also pertains to the items shipped with them. This encompasses items such as those used to regulate temperature or track shipments, including dry ice and monitors containing lithium batteries. These are regulated goods themselves and have their own rules and restrictions. 9 DON’T FORGET ABOUT RETURNS. Return shipments must comply with the same hazmat rules as items shipped to consumers, and it’s the shipper’s responsibility to ensure compliance. Establish standardized returns management processes, such as providing compliant packaging with the required

YOU’RE SHIPPING. Businesses often don’t realize they’re shipping DG. Know what goods are classified as dangerous—you might be surprised that items ranging from medical devices and cell phones to nail polish and perfume are regulated when being transported.

2 MAINTAIN CURRENT SAFETY DATA SHEETS. A product’s components, dimensions, and origins

6 BE AWARE OF CARRIER POLICY CHANGES. Carriers can impose tighter restrictions than what regulations require, or they can decline shipments altogether. Even if you’re

technology can automate and streamline the shipping process by producing documentation, validating shipments against the latest regulations, and more. You can then implement these repeatable and reliable processes across all locations, departments, and supply chain partners. 5 DON’T ASSUME FUNCTIONALITY. Many transportation and warehouse management systems and enterprise resource planning platforms lack the functionality required to fully address dangerous goods shipping processes. Don’t assume your existing systems have the compliance capabilities you need. You may need additional DG-specific software that can often integrate into your existing platforms.

impact every process required for safe and compliant shipping,

including packaging, labels, documentation, employee training, and more. Maintain current safety data sheets with complete and accurate information for all products you ship to help ensure you comply with all shipping regulations. 3 KEEP UP TO DATE WITH REGULATIONS. Regulations can differ based on quantity, country, and transportation mode, and can continue to change. So don’t just assume that what was correct one year ago is correct today; stay up to date on the latest regulations to make the necessary changes to your shipping operations. 4 AUTOMATE COMPLIANCE PROCESSES. Manual compliance processes are inefficient and can lead to errors that bring about delays, penalties and other interruptions. DG

100% in compliance regarding training,

paperwork, and packaging, individual carriers still may not accept your shipment. 7 INVEST IN QUALITY TRAINING. Ensure all employees involved in shipping and handling DG receive the required training in accordance with 49 CFR 172.704. Online interactive and 3D training can help them digest complicated regulations in a more convenient and engaging format. And know where their training records are—that’s the first thing regulators request during an audit.

labels and markings, shipping all returns via

ground transportation, and training customer service representatives to answer customers’ questions about return shipments.

10 CONSIDER PARTNERING WITH AN EXPERT.

Shipping DG is complicated. Partner with an industry expert to help make sense of the regulations and implement the necessary processes and systems to ensure compliance across your supply chain.

SOURCE: BRIAN BEETZ, DIRECTOR OF REGULATORY AFFAIRS AND CORPORATE RESPONSIBILITY, LABELMASTER

8 Inbound Logistics • August 2023

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READERPROFILE

as told to Karen Kroll

Leaning Into It

RESPONSIBILITIES: IT development and infrastructure, process improvement, distribution, procurement, quality, inventory control, and transportation. EXPERIENCE: Executive vice president, operations, FCX; vice president, replenishment and 3PL solutions, vice president, manufacturing and supply chain solutions, and multiple other executive positions with Cardinal Health. EDUCATION: MBA, University of South Carolina; B.S., biology and chemistry, University of South Carolina Honors College. THERON NEESE is chief operating officer with Integrated Supply Network (ISN), a Lakeland, Florida-based distributor of automotive tools and equipment.

Y ears ago, I worked as a warehouse operations supervisor. The plant manager conveyed that part of my job was to make it easier for tomorrow; to take one or two hours to fix a problem so I didn’t have to deal with it every day and so things would run more smoothly. It’s a concept from Lean—to always be looking for the next bottleneck and working to tackle it. It stuck with me and has been part of my Lean journey. At ISN, I’m in charge of procuring domestic national brands and company private brands from overseas, planning inbound and outbound transportation, and overseeing pick, pack, and ship. One thing that makes all these responsibilities challenging is that we truly are omnichannel—we operate in ecommerce, business-to-consumer, and business-to-business. And we partner with regional and national wholesalers and distributors.

and need to be held back versus prodded on. If a team member takes ownership, they will work to improve the company, not just their area. And a process orientation ensures that people are always looking to improve. I’m also extremely data-driven, whether the issue is inventory, financial, or something else, so we don’t make emotional decisions. For instance, when judging carriers, we look at their current performance and whether they’re meeting our needs. We also consider simplicity—it doesn’t make sense to use 50 carriers at one site. I try to be transparent and use Lean processes: plan, do, check, act. We constantly look at our processes to make sure we do better next time. As a distributor, we are hit hard by inflation as we try to pass on manufacturer increases while remaining cost competitive. We’ve

We also do a lot of same- and next- day shipping. We take orders until 3 p.m. and then ship them out on the same day. All this adds complexity. In my five years at ISN, I’ve focused on distribution and driving improvement across the enterprise. Over the past few years, we’ve consolidated 18 distribution centers to seven, many as a result of acquisition activity. Handling change requires several steps. One is making sure we have the right people. While you can teach most things about business, I look for drive, ownership, and process orientation. I want to hire people who drive forward “Always look for the next bottleneck and work to tackle it.”

10 Inbound Logistics • August 2023

READERPROFILE

looked for ways to reduce costs, while maintaining inventory availability and service. Those have been key challenges. We implemented Locus Robotics for warehouse efficiency and Blue Ridge for supply planning. Pick rates have more than doubled, and our inventory has been reduced by more than 30%. Every day, I use Power BI to review inventory levels and transactions and I engage in a lot of communication around supply levels, to make sure we utilize our capital effectively. We’re also implementing a more robust sales and operations planning solution. We involved sales and category management in the process, so we reduce inventory in the right places, and our changes are tied to customer demand. In college, I was a chemistry and biology/pre-med major. I took a break from school after earning my Bachelor’s degrees and worked in different roles for a liquid pharmaceutical manufacturer. I really enjoy operations because of the ability to rapidly improve the business and solve problems. Plus, every day presents a new challenge. n

Theron Neese Answers the Big Questions 1 If you were granted one superpower, what would you choose?

3 If you could travel anywhere in the world, and time and money weren’t constraints, where would you go? The place I’ve enjoyed the most is Alaska in the summer. I’d also like to see the pyramids and the Great Wall of China. I think of supply chain and manufacturing developments and how in ancient times, they were able to create these structures without today’s tools. They are marvels of human ingenuity.

The ability to read minds. (I’d also need the ability to turn this power on and off.) 2 What would you tell your 18-year-old self? To slow down and enjoy the ride. I’d also tell him to take on different roles. While I did a brief stint as vice president of sales, I wish I had taken on more roles at the manager or director level. You learn a lot about the business when you’re in the weeds.

August 2023 • Inbound Logistics 11

Sports & Recreation

Four key trends are shaping the active lifestyle industry in 2023, according to McKinsey: 1. Brand relevance will increase. Consumers who were once motivated first by factors such as functionality, design, and price, are now increasingly driven by brand. Notably, the industry’s high performers in terms of value creation are characterized by high levels of brand equity and loyalty. Sporting goods companies need to build strong and trusted brands that leverage the direct-to-consumer revolution, collaborate with other brands, and engage in community marketing. 2. Sustainability. Brands, retailers, and manufacturers have made bold promises of a more sustainable future, but are they up to the challenge? With self-imposed deadlines on the horizon, it is time to deliver. In an environment where both regulators and consumers are targeting greenwashing, companies should carefully consider how they deliver on their actions and ambitions. 3. Nearshoring. It is important that the nearshore country meets the requirements for raw materials and components and offers the right capabilities and capacity. A detailed business case should take into account a holistic set of variables to determine financial impact and feasibility, as well as potential government incentives. 4. Hot target for private investors. The sporting goods industry has grown strongly over recent years and is likely to continue on that path. In addition, the industry has proven to be more resilient in downturns, bouncing back faster than others. Further, it comprises many smaller but well-differentiated brands that make attractive targets for consolidation or growth plays. These factors have fueled interest among private investors, with the number of annual deals doubling in the past decade. HOW THE LIFESTYLE INDUSTRY STAYS IN SHAPE

AT YOUR ATHLEISURE • The athleisure market (sneakers, leggings, T-shirts, hoodies, sweatshirts) is expected to grow from $4,18,690 million in 2022 to $8,33,199 million by 2030. has an annual growth rate of 8.1% worldwide. • The United States is the largest • Athleisure’s market value market for athleisure products. It accounts for about 30% of worldwide sales. • A growing interest in physical fitness among young people in the Asia-Pacific region and a cultural shift in apparel preferences has that region set to overtake the United States as the world’s largest athleisure buyer in a global market. • Athleisure is the largest product segment among young people worldwide. In some places, it accounts for more than 65% of the clothing purchased by people in their teens and 20s. –Linchpinse

Four Themes Will Guide Sporting Goods Trends in 2023 Brand relevance Becoming a brand super winner Sustainability Time to make it real Nearshoring Balancing acts

Investments in the industry Routes to

profitable growth in private investments

50%

86%

75%

20.3%

of surveyed companies plan to expand nearshoring by 2025

total shareholder returns in 2019-21 for sportswear (vs 4.5% for traditional apparel companies)

of surveyed companies have announced or plan to announce a CO 2 reduction target

of surveyed sporting goods companies expect to increase spending on branding by ≥5% in 2023 (vs. 16% expecting to reduce by ≥5%)

Source: McKinsey

12 Inbound Logistics • August 2023

VERTICALFOCUS

Although online retailing has remained a considerably stable distribution channel for the sales of sports equipment in the past, it is expected to gain more prominence in the future due to the associated convenience, finds a Mordor Intelligence report. Specialty stores, however, hold the largest share in the current market scenario, the report notes. The sports and leisure equipment market is projected to register a compound annual growth rate of 4.5% over the next five years. Increased online retailing, widely spreading distribution channels, and easy availability of sports equipment and necessary courses required for tournaments and other competitions are expected to boost market growth. ON YOUR MARK, GET SET, GO SHOPPING

BE A GOOD SPORT The sporting goods industry played a good game during the past two years, with growth equaling or outperforming pre-pandemic levels, but economic conditions could derail progress for some industry players, according to Sporting Goods 2023: The Need For Resilience In A World In Disarray , a study conducted by the World Federation of the Sporting Goods Industry and McKinsey. The study identifies six actions that active lifestyle companies can take to tackle inflationary and other economic pressures: 1. Implement smart pricing and channel management. Data and analytics related to price elasticity and competitor offerings could inform flexible pricing strategies and revenue management to protect net margins and limit volatility. 2. Reset return on investment. Conduct a top-down review of efficiency by channel and SKU to invest for growth. 3. Strengthen brand communications. Optimize and refocus communications on the brand’s core value proposition to help boost revenue. 4. Build supply chain resilience. Review sourcing and supply chains and apply next-generation levers to the cost base. 5. Foster next-generation organization productivity. An agile approach and innovations, including robotic process automation, could lead to long-term savings. Review warehousing and transportation costs to increase productivity. 6. Optimize finance. Focus on freeing up cash and exploring divestments and acquisitions.

10 BEST-SELLING SNEAKERS OF ALL TIME 1. Nike Air Jordan 1 2. Converse Chuck Taylor All Stars 3. Nike Air Force 1

4. Air Jordan XI 5. Air Penny 2 6. Air Jordan XII

7. Nike Zoom Kobe IV 8. Reebok the Question 9. Converse Weapon 10. Nike Air Zoom Huarachie 2K4

August 2023 • Inbound Logistics 13

NOTED [ IN FOCUS ]

The Supply Chain in Brief

> GOOD WORKS

> M & A

• Reusable packaging company ORBIS Corporation hosted its third annual ORBIS Good Days for Kids golf outing,

n Crowley has purchased Tamarind Consolidated, a logistics company serving the

which raised more than $330,000 for the Children’s Wisconsin Pediatric Simulation and Resuscitation Program, the region’s only independent healthcare system dedicated to the health and well-being of children. • American Airlines Cargo is the first U.S. airline and cargo carrier to join United for Wildlife, a group dedicated to ending the illegal trafficking of wildlife. • During its annual Geeks for Kids Delivery Day Celebration, LEARN Science & Math Club, a non-profit organization based in Kansas City, Missouri, gave away more than 60 customized electric cars and assistive devices for children with mobility limitations. Long-time partner and sponsor Wagner Logistics used its specialized handling skills to transport and deliver the vehicles.

United States to the British

Virgin Islands, to enhance end-to- end supply chain capabilities for the Caribbean region.

n Global logistics services provider Alba Wheels Up acquired VT Mancusi, a provider of customs brokerage and trade compliance services primarily for the flavors and fragrances end markets. n Dupré Logistics, a Louisiana-based transportation company, acquired Interstate Transport, Inc., a temperature-controlled and time-sensitive food and beverage logistics services provider based in St. Petersburg, Florida. n Logistics Plus, a worldwide provider of transportation, logistics, and supply chain solutions, acquired Jan Krediet, a logistics company with offices and warehouses in the Netherlands. n Supply chain services provider Redwood Logistics acquired Rockfarm Supply Chain Solutions and Global Distribution and Logistics. The acquisition supplements Redwood’s growing tech-enabled managed services.

> GREEN SEEDS

n Canadian Pacific Kansas City (CPKC) and CSX Corporation entered into a joint venture to build and deploy hydrogen locomotive conversion kits for diesel electric locomotives. As an initial step, CSX will convert one of its diesel locomotives using a hydrogen conversion kit developed by CPKC.

> SHOVEL READY

n Tippmann Group and Cold-Link Logistics broke ground on a new 198,000-square-foot cold storage facility in Ellisville, Mississippi. The state-of-the-art food-grade warehouse will offer nearly 27,000 pallet positions of frozen and refrigerated storage space.

14 Inbound Logistics • August 2023

NOTED

> RECOGNITION

> SEALED DEALS

• Brooks Running, a global performance running footwear and apparel company, selected the TrusTrace platform to deepen visibility across its manufacturing supply chain and help identify and mitigate responsible sourcing and business continuity risks. • High Ridge Brands, an independent branded personal care company, engaged ODW Logistics to help streamline communications through multiple third-party logistics providers. Integrating transportation and warehousing with ODW Logistics allowed for operation efficiencies including strategic load planning and freight consolidation solutions into major retailers.

• GEODIS was named Vendor of the Year by Mitsubishi Logisnext Americas, a leading manufacturer and provider of material handling, automation, and fleet solutions. GEODIS in Americas was selected out of 1,100 suppliers and is the first service provider recognized in the award’s seven-year history. • PLS Logistics Services is the recipient of the Mars Wrigley Broker Carrier of the Year award. • Ernst & Young (EY) honored AIT Executive Chairman and CEO Vaughn Moore as an EY Entrepreneur of the Year 2023 Midwest. EY recognized Moore’s accomplishment of building AIT from a mid-size domestic forwarder to a global logistics enterprise. • Two Southeastern Freight Lines drivers—Larry Spinks and Michael Crapps—were recognized for joining Malcolm Bryant as the only three truck drivers in the company’s history to drive for 50 years with no accidents.

• Footwear and lifestyle brand TOMS selected Cart.com as its U.S. fulfillment partner. The partnership enables TOMS to meet increasing consumer demand by leveraging Cart.com’s inventory management, 3PL, and fulfillment capabilities.

> UP THE CHAIN

The supervisory board of Hellmann Worldwide Logistics appointed Jens Drewes as chief executive officer to succeed Reiner Heiken, who will retire in 2024.

Lance D. Roberts was named chief operating officer for Candor Expedite. He is responsible for sales, trucking, production, and human resources as well as the company’s long-term direction and performance.

Union Pacific announced that Jim Vena will become CEO, Beth Whited will become president, and Mike McCarthy will become chairman of the company. They succeed current Chairman, CEO and President Lance Fritz, who is stepping down. As part of the transition, the company’s supply chain, operations, finance, marketing and sales, and technology functions will report directly to Vena.

ShipBob hired Melissa Nick as its first chief supply chain officer. She most recently served as Amazon's vice president of North America customer fulfillment, where she led operations, planning, and engineering teams across more than 250 fulfillment centers.

August 2023 • Inbound Logistics 15

TAKEAWAYS Shaping the Future of the Global Supply Chain

Don’t Get Held Up for Ransom To avoid supply chain ransomware attacks, follow this advice from Adam Scamihorn, product director, InterVision: 1. Deploy proactive cybersecurity defense measures. The only way to prevent an attack—or curtail its impact on business continuity—is to enact a ransomware protection strategy. 2. Include zero-trust security in your cyber-defense practices. Zero-trust systems require robust and frequent user authentication through multi-factor authentication and single sign-on protocols, regardless of where the user is geographically located. 3. Work with a cybersecurity partner , either through an internal position like head of cybersecurity, a third-party vendor, or both. 4. Procure a ransomware response strategy. Evaluate and test the response strategy with both desktop exercises and disaster recovery testing that utilizes a secure gapped recovery site with immutable data repositories. 5. Consider a cyber insurance plan. Cyber insurance covers some losses associated with a ransomware breach, including direct damages stemming from encryption or data loss. 6. Evaluate your suppliers’ cybersecurity practices. Consult with suppliers to ensure full visibility into their ransomware response plan and general cybersecurity measures. 7. If breached, note the damage and file a report. Pinpoint all affected devices and categorize impacted data. Work with legal counsel to determine the scope of legal and regulatory concerns based on the data impacted. This will inform the next appropriate steps to take. 8. When necessary, address ransomware appropriately. It is never wise to pay a ransom. Instead, focus on restoring device functionality expeditiously. 9. Inform stakeholders if a breach occurs. Work with legal counsel and develop an appropriate communication strategy. Be clear and upfront when informing top stakeholders of the damage and its possible ramifications. 1 0. Review internal processes and make improvements after a breach. Identify where the ransomware entered and fortify that gap. Invite outside parties to review security protocols and ensure that future ransomware attacks fail.

SKY MILES We’re one step closer to the future after Alef, a startup developing a flying car, was recently granted Special Airworthiness Certification by the Federal Aviation Administration. Alef’s all-electric Model A can drive on roads and also vertically take off and land. It has a driving range of 200 miles and a flight range of 110 miles. The gimbaled cabin of the vehicle remains steady and stable during flight since it’s mounted to a rigid frame that allows it to pivot. The propellers are enclosed within the frame to enhance safety and cut down on noise. The Model A currently is designed to accommodate one to two passengers, but the company says it is developing a Model Z four- person sedan with increased range. As testing continues, Alef says it remains on track to deliver the first Model A vehicles by the fourth quarter of 2025. The Model Z will have to wait until 2035. Oh, the price? A mere $300,000.

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TAKEAWAYS

Tech Adoption on the Rise Innovative technology is on the rise and companies are ready to invest. The top technologies for investment in the near future are artificial intelligence/machine learning and 3D resource planning software, coming in ahead of electric vehicles, robotics, and new WMS/TMS software, according to the latest CartonCloud Logistics Index Report. Of nearly 2,000 respondents surveyed, 27% say their business is likely to invest in artificial intelligence/machine learning in the coming months. This was closely followed by 3D resource planning software at 26%, and robotics and automation at 23%.

Ryder’s Nate Robert ( left ) and Andrew Berberick at Baton.

RYDER RIDES AI WAVE To prepare for the coming artificial intelligence (AI) wave, Ryder Systems has established Baton, A Ryder Technology Lab, based in Silicon Valley. Baton’s mission is to pioneer customer-facing technologies to revolutionize how Ryder customers interact with their transportation and supply chain networks. These technologies will digitize and optimize networks at a level not currently available in the industry. Leading Ryder’s innovation lab are Andrew Berberick and Nate Robert, co-chief product and technology officers for Ryder. The two founded San Francisco-based startup Baton, which was known for the development of a proprietary logistics technology focused on optimizing transportation networks. Ryder acquired the startup in 2022. Baton’s first challenge is to create a first-of-its-kind, AI-powered digital platform and optimization engine that facilitates a new, integrated approach to managing transportation networks for customers where seasonality and fluctuating demand inhibit the continuous use of resources.

Artificial Intelligence/ Machine Learning

3D Resource Planning Software

Robotics and Automation

Source: CartonCloud Logistics Index Report.

August 2023 • Inbound Logistics 17

TAKEAWAYS

45 % 26 % of CEOs had

Anticipated Volume Growth Lifts Intermodal Outlook Total intermodal volumes fell 10.4% year-over-year in the second quarter of 2023, according to the Intermodal Association of North America (IANA). All segments showed declines: domestic containers, 6.3%; international containers, 13.2%; and trailers, 20.1%. “Slower year-over-year demand for goods and a competitive freight environment have taken its toll for a second quarter,” says Joni Casey, president and CEO of IANA. “On the other hand, the numbers suggest a later peak this year and an improved picture for the second half of 2023.” The seven highest-density trade corridors, which collectively handled more than 60% of total volume, were all down in the second quarter. Total intermodal marketing company volume fell 31.9% year-over-year in Q2, with intermodal traffic down 16.5% and highway loads down 39.7%. Second Quarter 2023 Intermodal Volume Comparisons

ACTIVELY EXPLORED the option to on or nearshore.

have ALREADY UNDERTAKEN on/nearshoring their parts of their supply chain.

CEOs SET SUPPLY CHAIN PRIORITIES A majority of CEOs are spending more time on supply chain issues, finds the 2023 Supply Chain Barometer from procurement and supply chain consultancy Proxima. The research also reveals that: • Supply chain issues remain a headache. More than half (52.6%) of CEOs say they expect to spend more time on supply chain issues in the coming 12 months. • Human rights issues are a key concern. More than two-thirds of CEOs (70.3%) say they are concerned about the potential for human or labor rights issues in their supply chain. • Global supply chains are being rewired. In last year’s Supply Chain Barometer, just over one- quarter (26%) of CEOs said they had actively looked at on- or nearshoring some or all of their supply chains. This year’s results find that 4 in 10 (44.6%) CEOs in the United States who have a resilience problem are already either onshoring or considering it as an option, and a similar ratio (39%) are looking seriously at nearshoring. • Progress is slow on decarbonization. The research shows that just over one-third of U.S. CEOs (34%) say they have a formal business plan for decarbonization, and 34% have begun strategic collaboration conversations with their suppliers.

5,000,000

-10.4%

4,000,000

3,000,000

-7.6%

-13.2%

-6.3%

2,000,000

-20.1%

1,000,000

Trailers

Domestic Carriers

All Domestic Equipment

ISO Containers

Total

2022

2023

Source: Intermodal Association of North America.

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UNMATCHED

Weaving CO 2 Into Yarn Walmart is teaming up with a California startup to test technology that removes carbon dioxide from its supply chain, with plans to eventually turn that CO 2 into yarn for clothing. As part of a pilot project with San Leandro-based Rubi Laboratories, Walmart will identify factories in its supply chain where carbon dioxide in waste gases can be captured using Rubi’s reactor systems. The majority of the world’s captured CO 2 is currently used for oil extraction, according to the Global CCS Institute, but Rubi’s system uses biochemical processes to convert the gas to cellulose, the main substance in the walls of plant cells. It’s a technique inspired by the way trees use carbon dioxide to grow. That cellulose is used to produce lyocell yarn, which can be made into textiles. After performance testing, Walmart and Rubi plan to develop a prototype apparel collection. The pilot project runs through the end of 2024.

▪ RAIL INTERMODAL ▪ HIGHWAY CAPACITY ▪ TEMPERATURE CONTROL ▪ INTERNATIONAL ▪ CUSTOMS CLEARANCE

TOP 3 EMISSIONS CHALLENGES AND PRIORITIES What does the current landscape of corporate sustainability efforts look like? According to Optera’s 2023 trend report, Corporate Emissions in 2023: Large Organizations’ Top Challenges & Priorities , key trends include: 1 Emission reduction and regulatory compliance are top priorities. One- third of respondents report emissions reduction project implementation as the most pressing task this year. Compliance with regulations and verification comes close behind, with 25% of respondents citing it as their top priority. 2 Emission inventory processes are on the rise. The study reveals that 72% of organizations have undergone at least one emission inventory process. 3 Sustainability leaders are concerned about inaccurate emissions data. Fewer than 30% of respondents use tools that address the most common data issues. Incomplete and inaccurate data is holding back sustainability leaders from comprehensive, high-fidelity emissions data collection and analysis.

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