SEPTEMBER 2023
BEYOND THE FREIGHT AUDIT
TOP 100 TRUCKERS WMS GUIDE
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DOCUMENTS
SHIPMENT STATUS
ELECTRONIC BILL OF LADING (eBOL)
PRO# ASSIGNMENT
DISPATCH
PRICING
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BITE SIZED SUPPLY CHAIN/LOGISTICS INFORMATION Info SNACKS
DROP-OFFS PICK UP Drop-off is the predominant returns method available to consumers.
CYCLE TIME If the New York City Department of Transportation gets its way, four- wheeled electric cargo bikes—which are larger than typical e-bikes but smaller than box trucks and delivery vans—will share bike lanes and roads to make last-mile deliveries. A proposed DOT rule would allow the use of pedal-assist bikes that measure up to 48 inches wide with four wheels, compared to the current 36-inch-wide bikes with three wheels. The extra width and wheel make the bikes easier to use, reducing the number of trucks on city streets and cutting vehicle emissions and trac.
Nearly 70% of retailers
offer return drop-off at brick-and-mortar stores, carrier locations, lockers and kiosks. Only 19% offer home pickup About 9 miles
A PEEK AT PEAK SEASON Kenco’s consumer survey on peak season spending, shipping concerns, and product availability finds: • 58% of respondents expect to spend the same amount of money during peak season 2023 as they did in 2022. • 54% of consumers worry they will not be able to aord the gifts they want to buy—with this, 65% of respondents have or plan to take advantage of shopping holidays. • 72% of respondents would opt for slower shipping if it meant their packages arrived for free, and 74% will take slower shipping speeds if provided an incentive. • 60% of consumers indicate product availability as their biggest supply chain concern for the 2023 peak season.
Distance the average American consumer is willing to travel for a return drop- off at one of 60,000 available locations.
–BOXpoll survey, Pitney Bowes
AS THE WORD TURNS When a truck loaded with thousands of copies of Roget’s Thesaurus crashed, losing its entire load, witnesses were stunned, startled, aghast, taken aback, stupefied, confused, shocked, rattled, paralyzed, dazed, bewildered, mixed up, surprised, awed, dumbfounded, nonplussed, flabbergasted, astounded, “Arti cial intelligence will revolutionize the supply chain in ways that haven’t even been thought of yet.” – Dave Waters
amazed, confounded, astonished, overwhelmed, horrified, numbed, speechless, and perplexed. Meanwhile, those waiting for the shipment were at a loss for words.
September 2023 • Inbound Logistics 1
CONTENTS SEPTEMBER 2023 | VOL. 43 | NO. 9
92
FEATURES 36 14 WAYS TO ENSURE CARRIER SERVICE
The questions to ask and features to consider when picking a WMS that meets your organization’s needs.
Gaining the right service levels from your truckers starts before you choose a carrier and then requires eort to maintain. Here are some surefire ways to get the service that rings your bell. 42 MARKET RESEARCH: 2023 TRUCKING PERSPECTIVES In a year of looser capacity but higher operating costs, Inbound Logistics provides an exclusive look at the issues that are top-of-mind for truckers and over-the-road shippers.
69 SPONSORED FREIGHT PAY: BEYOND THE AUDIT As freight bill audit and payment providers transition to transportation spend management, leading companies deploy technology tools and oer services that transcend traditional freight audit and payment.
92 SELECTING A WAREHOUSE MANAGEMENT SYSTEM: 3 TIPS FOR THE RIGHT PICK If you are in the market for a warehouse management system (WMS) provider, focus on your current business needs with an eye to the future. Here are the factors to consider and questions to ask to ensure you make the right choice. 97 2023 WMS GUIDE Looking to increase inventory accuracy, streamline fulfillment, and optimize equipment and labor utilization? A warehouse management system (WMS) may be the answer. This short list of WMS solutions can help you start your search.
How freight bill audit and payment is expanding to help shippers more eectively manage costs.
69
50 TOP 100 TRUCKERS Inbound Logistics ’ annual Top 100 Truckers list helps you find carrier
partners that best fuel your diverse and demanding needs, especially in today’s challenging and volatile business climate.
2 Inbound Logistics • September 2023
FIND OUT WHY WE ARE ONE OF THE FASTEST GROWING COMPANIES IN AMERICA
WANT TO LEARN MORE? CLICK, CALL, or CHAT ONLINE WITH US
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CONTENTS SEPTEMBER 2023 | VOL. 43 | NO. 9
INFO 102 SUPPLY CHAIN INSIGHTS 104 WEB_CITE CITY 118 RESOURCE CENTER
INFOCUS 1 INFO SNACKS 16 VERTICAL FOCUS: CANDY 18 NOTED 20 TAKEAWAYS 115 IN BRIEF 120 LAST MILE Tennis balls go bouncing around the globe
115 The newest and hottest products
GOOD QUESTION What’s one transportation metric shippers should pay more attention to?
8
INSIGHT 6 CHECKING IN Labor and management: under pressure 8 GOOD QUESTION What’s one transportation metric shippers should pay more attention to? 12 10 TIPS Rethinking retail strategies
INPRACTICE 14 LEADERSHIP An entrepreneur at heart, Vanessa Coleman, CEO of Oceanworks, knows it takes 10 shots to score one goal. That’s why she takes risks, stays persistent, talks to people, and is a good listener—all characteristics that helped build her company’s success.
32 3PL LINE How 3PLs build resilient supply chains 34 IT MATTERS How artificial intelligence will revolutionize shipping
How many tennis balls did the U.S. Open use?
16
CONTENT PARTNERS 26 Syfan Logistics Provides Safe Harbor for Manufacturer with Drayage Delays Oered by Syfan Logistics 27 MagicLogic Cube-IQ Plans Loads Faster, Reduces Damages for Arauco Oered by MagicLogic 28 A Unique Event with a Critical Mission Oered by Women in Trucking 30 How Freight Management Technology Can Enhance Processes and Relationships Oered by Landstar
Sweet trends in the candy industry
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CHECKINGIN Management and Labor: Under Pressure
Vol. 43, No. 9
September 2023
EMPOWERING DEMAND-DRIVEN SUPPLY CHAINS www.inboundlogistics.com
STAFF PUBLISHER Keith G. Biondo
publisher@inboundlogistics.com
T he Yellow Corp. bankruptcy offers some insight into labor and management navigating an economic crucible not of their making. It’s true the players in this sad episode shoulder direct responsibility, but the backdrop of in ation impacted both labor and management and they did not build that.
EDITOR Felecia J. Stratton
editor@inboundlogistics.com
SENIOR EDITOR Katrina C. Arabe
karabe@inboundlogistics.com
CONTRIBUTING EDITORS Merrill Douglas • Thomas Gresham Karen M. Kroll
CREATIVE DIRECTOR Jeof Vita
jvita@inboundlogistics.com
For management, the cost of equipment, parts, fuel, compliance and—most of all—money for operating expenses increased rapidly. On the other side, unions and other workers directly experience the same stresses on their families. Who can blame them for needing more? Both operated in a macro environment, with quality of life and business operating pressures created by others far above them. The resolution was a wreckage that served neither side. It suggests that rather than reacting by attacking, a cooperative approach may have been more bene cial to bridge the gap between today’s government policies and more levelheaded ones in our future. But what if our economy and increased costs are the new normal? Then all the more reason for management and workers to nd a smarter way to respond to outside pressures. Technological changes also impact management and labor. Enterprise managers react to scarcity of skilled labor and rising costs with automation. Investing in manufacturing and distribution robots, and applying AI to the supply chain, may not be the right answer for everyone, but those trends are unstoppable. What impact do those developments have on labor? Not too much now but certainly more later, and soon. Another development that will impact global supply chains, inventory levels, and how—or even whether—product gets delivered and the workers that deliver them is additive manufacturing, commonly known as 3D printing. Global manufacturer Daimler is testing 3D parts that, when fully implemented, will drastically reduce shipment levels for spare parts. Early results should make players in all parts of the supply chain take notice. “From our portfolio of about 320,000 spare parts, we identi ed 40,000 as feasible for 3D printing,” explained Matthias Schmid, CDO of the Center of Competence for Additive Manufacturing, Daimler Truck, at a recent industry event. “Currently, we have more than 1,500 parts available in our digital warehouse.” 3D parts are made available to production lines and Daimler’s customers, facilitating demand-driven production and ful llment with zero inventory . Warehousing? Transportation? It’s coming, maybe not for everyone, and maybe not soon. But the Yellow bankruptcy offers a lesson that working together is a better way to face the future.
DESIGNER Nicole Estep
nicole@inboundlogistics.com Amy Palmisano apalmisano@inboundlogistics.com
Keith Biondo, Publisher
DIGITAL DESIGN MANAGER
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6 Inbound Logistics • September 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 One Transportation Metric Shippers Should Pay More Attention To?
FIRST-PASS YIELD is the number of shipments that cycle through without further handling. If a shipment is rebooked/rescheduled, or the corresponding documentation must be revised/resent, it’s considered a defect. If your overall rolling throughput yield is low, a shipper will be challenged to leverage automation or enjoy handling costs from 3PLs. –Andrew McLoone Executive Director, PSA BDP RATE OF LAND CONSUMPTION. It is critically essential to sustainable operation because excessive land use for transportation infrastructure can lead to environmental degradation, habitat loss, and increased carbon emissions. –Giorgio Ferdinandi Head of Procurement, Linnea SA YOUR CARBON FOOTPRINT. Incorporate sustainability into carrier selection. Partner with providers who oer dashboards or applications that track emissions so you can identify and act on opportunities to reduce environmental impact. –Phil Sullivan VP, NA Enterprise Managed Services, Odyssey YOUR CUSTOMERS’ SATISFACTION with the carriers you are selecting. There can be assumptions the receiver/customer is happy, but if the carrier is not doing a good job on delivery (product condition, driver attitude, on-time, etc.) then you may lose that customer to another supplier. –Mitch Luciano CEO, Trailer Bridge
That’s So Yesterday
While traditional transportation performance metrics have a place in process improvement, relying on them alone is a bit like reading yesterday’s newspaper. Shippers today have an opportunity to leverage global positioning in predictive analytics, enabling more accurate estimated arrival times than ever before, and integrating comprehensive risk assessments of financial, social-political, and climate risks. –Tony Harris SVP & Chief Marketing & Solutions Ocer SAP Business Network
FUEL SURCHARGES. Prices are volatile and can fluctuate significantly, aecting shipping costs. By tracking fuel surcharges via getting quotes from carriers, monitoring prices, and negotiating with carriers on lower surcharges, shippers can save money on shipping costs. –Chella Palaniappan President, Client Services Trigent Software MISSED APPOINTMENTS. Shippers who drive more than 97% of all activity through a transportation management system can see scheduled load fulfillment rates of over 90%, implying missed appointments are less than 10%. This reduces labor, improves inventory accuracy, minimizes detention fees, reduces CO2 emissions, and improves retail on-time and purchase order fulfillment scores.
PERFECT ORDER RATIO measures the ability to deliver products and services as promised. It is the percentage of orders delivered on time, in full, undamaged, and defect free as a percentage of the total orders delivered. And I like to add: No billing errors from your carrier. –Nicole Glenn Founder & CEO, Candor Expedite, Inc. THE TIME IT TAKES TO EMPTY A CONTAINER at a warehouse. The ability to make sure containers are emptied in time results in less exposure to fees like per diem. –Toni Ann Careccio ON-TIME DELIVERY, ALWAYS. The entire goal of the supply chain is to create a delightful customer experience. –Michael Johnson CEO, Metrc Chief Customer Ocer & Board Member, PortPro
–Barak Bar-Cohen Founder and CEO, Sojo Industries
8 Inbound Logistics • September 2023
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GOODQUESTION
What’s One Transportation Metric Shippers Should Pay More Attention To?
Have a great answer to a good question? Be sure to participate next month. We want to know: How will arti cial intelligence impact supply chain management in the next ve years? We’ll publish some answers. Tell us at editorial@inboundlogistics.com or tweet us @ILMAGAZINE #ILGOODQUESTION Getting drivers in and out of pickup facilities eciently is critical. Ensure the carrier receives accurate information regarding service requirements, shipment details, and capacity needs. Check each shipment for proper in-transit packaging, stage the freight for convenient access, and have the driver’s paperwork complete and ready. –Chase Smith Vice President, Carrier Services, MODE Global By reducing dwell time, you can reduce detention and demurrage charges, improve your capacity utilization, streamline operations, and overcome driver shortage issues, ultimately improving your overall performance. It also has a positive impact on all aspects of the supply chain, reducing environmental impact and supply chain imbalances. –Amit Prasad Chief Data Science Ocer, Transportation Insight Dwell on This Dwell time is clearly the one thing shippers need to dwell on. On port containers, the dwell cost is at times as much as the final mile cost. Per the Department of Transportation report, dwell time at shippers’ docks costs carriers $1.1 to 1.3 billion per year. Essentially it shows a lack of planning at various levels in an organization and creates an impact on future RFPs in the form of increased carrier rates. And while the penalty cost is bad, the greater impact is on the reputation of the shipper. –Reo Hatfield VP of Corporate Services, TA Services Paying more attention to dwell time can give shippers early warning of potential backups in the supply chain, allowing them to work with logistics partners to identify and reduce bottlenecks. Container dwell times at ports or railyards can be a useful indicator for overall supply chain health as well. –Tony Pelli Practice Director, Security and Resilience, BSI High dwell times indicate ineciencies in logistics processes, leading to potential delays and increased costs. –Srini AV Transportation and Global Trade Practice Director, Gaea Considering dwell time information at the very start of a shipper/carrier relationship results in stronger overall plans. –Kelly Williams Enterprise Product Lead, Trimble
IT NEEDS TO BE ON-TIME DELIVERY PERFORMANCE if shippers can only focus on one transportation metric. Customer experience is foundational for every business. Delivery performance is the last thing that customers see and heavily influences their perception of the entire buying experience and the overall relationship with the business. –Chris Jones EVP of Industry, Descartes LOCATION OF INSPECTION AND FUMIGATION SERVICES. Streamlining regulatory processes through ecient dockside USDA and Customs inspections not only accelerates clearance but also minimizes unnecessary transportation distances and wait times. This optimizes shipment costs by avoiding osite cargo transfers and reloads. –Carla Stone President, World Trade Center Delaware SHIPMENT QUALITY. Poor shipment quality requires excessive manual labor for unloading—needlessly adding time and costs. Similarly, damaged goods, having absorbed order acquisition, fulfillment, and transportation costs, exacerbate shipment quality issues by further eroding margins.
–Rob Small Senior Solutions Expert, Supply Chain, Inmar
TENDER LEAD TIME TO SHIP DATE. Provide carriers ample time to meet your expected ship date, which includes scheduling appointments, confirming shipping details, arranging drivers, and finding backhauls. In general, more lead time results in better service and pricing. –Michael Link Chief Supply Chain Ocer, RJW Logistics Group TIME TO BOOK. Faster booking— via services like autobooking—enables a better shipper experience and more transparency with buyers, ultimately resulting in better customer retention. –Heather Hoover-Salomon CEO, uShip
10 Inbound Logistics • September 2023
From the open sea to the open road.
WE CARRY THE THINGS THAT CARRY THE WORLD FORWARD
crowley.com/land23
10 TIPS 1 IMPLEMENT STRONGER
As a result of retail’s rapid change, retailers need to review existing strategies to fully leverage forward-thinking practices and technology. Identifying those opportunities contributes greatly to revenue, profit improvement, and customer satisfaction. Rethinking Retail Strategies
ASSORTMENT PRODUCTIVITY METRICS. While the first instinct might be to invest in assortment planning software, many companies can improve assortment profitability by implementing stronger metrics such as gross margin return on investment by style or by category across channels. You cannot improve what you do not measure, so consider getting more specific and current with your key performance indicators (KPIs).
6 AUTOMATE SOLUTIONS WISELY. Arti cial intelligence and
8 OPTIMIZE THE
2 HAVE A HOLISTIC While each channel has nuances, demand applies to the product holistically, regardless of selling channel. Plan, analyze, and report all sources of demand. 3 FOCUS ON PROCESS. A strong assortment DEMAND POINT OF VIEW. justi cation process can align more than just inventory. It can in uence product design to mitigate the cost of over- development, over-assorting, and housing too much inventory, which ultimately reduces pro table revenue.
4 DON’T OVERLOOK THE 16-18%. Based on historical data, returns are likely to run 16-18% this year. Having a returns strategy and plan is essential for retailers, and they cannot afford to overlook it. It is critical to have a clear view of inventory that is truly available to sell vs. existing somewhere in the pipeline. 5 LEVERAGE DATA TO DRIVE DECISIONS. Ensure your data is accessible, available, and ready for use across the enterprise. Clearly de ned data governance and management keeps data ready and secure, eliminates the “justi cation of the number” and facilitates more ef cient and informed decisions.
TECHNOLOGY YOU OWN.
Owning technology is no guarantee that you are fully realizing its bene ts. Implement processes supporting the use of the technology, then review them regularly. 9 KEEP AN END-TO-END PERSPECTIVE. Hold all inventory accountable for expected sales and pro t
machine learning are removing much of the guesswork in decision-
making. Be sure to develop a plan that takes advantage of those features within your existing technology. 7 POSITION INVENTORY APPROPRIATELY. Align inventory and demand from the point of distribution and sale. Push what is needed to be brand-positive and tell the merchandise story at the store. Once established, let sales dictate where and how your replenishment ows.
performance—from conception to nal
sale. Measure this through a series of linked plans, such as corporate sales goals, merchandise nancial plans by channel, assortment planning at all levels, demand planning and forecasting, and allocation and replenishment.
10 DON’T LOSE SIGHT OF THE GOAL.
Clearly align your business goals with your people, processes, and technology. Conducting a full capabilities assessment of your organization will clearly illustrate the pain points, gaps, and opportunities for growth and improvement along with a timeline to execute, resulting in improved strategies and execution.
SOURCES: ALLISON McCABE, DIRECTOR OF RETAIL TECHNOLOGY AND JULIE CHENEY, SENIOR DIRECTOR OF RETAIL, ENVISTA
12 Inbound Logistics • September 2023
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LEADERSHIP Conversations with the Captains of Industry On a Quest to Rid the World of Junked Plastic
More than 11 million metric tons of plastic waste enter the oceans each year, says a 2022 United Nations report. Vanessa Coleman’s company, Los Angeles-based Oceanworks, seeks to halt that pollution. The company helps brand owners source recycled materials and lets them buy credits that fund the removal of plastic waste from the environment. Oceanworks is the third venture Coleman has helped to launch since her days as an engineering grad student at MIT. “I’m an entrepreneur at heart,” she says. “I like creating things in the world that weren’t there before.” Coleman gave us a look at how she leads Oceanworks and some of the company’s exciting recent activities. IL: How and why did you come to co-found Oceanworks? I’d been reading a lot about the challenges our oceans are facing. Also, through my travels—partly with Saha Global, the nonpro t I helped to found in Africa—I’d experienced the increase in plastic waste in the environment worldwide. In places where there used to be land or a beach, there’s now a mass of plastic waste. I wondered how to create solutions that might help accelerate the reclamation of that waste at scale. Then one of my investors connected me with Rob Ianelli [now the company’s president], who had the original concept that ultimately turned into Oceanworks. He made sunglasses out of recycled ocean plastic and wanted to scale that concept with larger brands that had big supply chains. He and I started working together, and we built the company from there. IL: What prompts manufacturers to work with your company? Based on their own corporate goals or customer desires, manufacturers often look for more sustainable material streams. They need competitive costs, quality, and reliability at scale. We provide access to feedstock that they wouldn’t be able to access otherwise. They can get traceability, allowing them to document claims about the origins of their recycled content. And they can count on us for reliability and capacity. IL: What early experiences helped shape you as a leader? I was rst exposed to entrepreneurship through a graduate course at MIT called Energy Ventures. Engineering and business students formed teams to take forward a business idea.
Vanessa Coleman CEO, Oceanworks
An entrepreneur at heart, Vanessa Coleman knows it takes 10 shots to score one goal. That’s why she takes risks, stays persistent, talks to people, and is a good listener–all characteristics that helped build Oceanworks’ success.
by Merrill Douglas
14 Inbound Logistics • September 2023
LEADERSHIP
IL: What is Oceanworks doing that’s new and interesting? We’re developing traceability technology to validate the recycled content in a company’s material stream and the origin of that material. We use a blockchain-based system to log all the information about materials into an immutable record. On top of that, we’ve built some visualization tools, so a user can follow the material through the supply chain. IL: What have you read lately that has made an impression? A Poison Like No Other: How Microplastics Corrupted Our Planet and Our Bodies by Matt Simon. It reinforced my sense that we’re already late to the game of getting plastics out of the environment. IL: What advice would you give your 18-year-old self? Find a way to work on things you’re really passionate about, because that creates a fun life. And push yourself to be one of the experts in things that you’re excited about working on. IL: Outside of work, how do you like to spend your time? I spend time with my three kids, who are ve, two, and newborn. We love to go boating and skiing, and go to the beach and the mountains. I live on Cape Cod in the summer and Maui the rest of the year, so I get continuous exposure to the “why” behind what we do at Oceanworks. n Dinner Conversation If Vanessa Coleman could have dinner with anyone, alive today or from history, she’d actually arrange three meals. The first would be with former Vice President Al Gore. “He was fighting the battle against climate change early on,” she says. “He was making movies, trying to run for President, trying to enact policy. Now he’s an investor in the climate space. I’d like to hear his thoughts on what works, what is still needed, and how this might apply to the problems I’m working on.” Dinner companion number two would be environmentalist and author Rachel Carson. And number three would be the social media influencer known as MrBeast. “He has built a huge following by doing big, interesting stunts,” Coleman says. For instance, he has raised millions of dollars for removing plastic waste from the oceans. “I would be intrigued to hear how he built his following and influence in this new type of media,” she says.
Once we developed some ideas, we started talking to potential customers. It shocked me that you could just call people on the phone and ask if they needed this idea you had. People are willing to take the time because they see value in bringing new things to their business. If we talk to enough of them, we can understand how to put together technologies and business opportunities to make something real and new. That has de ned much of my career. IL: Is there something you have changed your mind about since the early days of your career? I used to assume that people in big companies wanted to innovate. I still nd that this is true of leaders. But it turns out that the bulk of most organizations, the rank and le, face incentives to do just the opposite. If you take a risk and it goes wrong, someone has to take the blame. We have to be very aware of that at Oceanworks, because there’s a bias toward using fossil-based plastics in all products. When you introduce something new, you have to realize that the resistance you face often comes down to a desire not to be rst, to let someone else make the mistakes. IL: Do you try to make Oceanworks a safe place to take risks? I do. We talk about the fact that you need to take 10 shots on a goal in order to score. Not everything you try will work, and that’s okay. We need to be reliable on the operations side. But we also need to maintain an innovative mindset. If we deliver containers, store materials, and source the way everybody else has done it, we will never improve the status quo. IL: What characteristics make you an effective leader? I’m a good listener, both within the company and when I talk with customers and markets. I ask questions that elicit new information, hear where people are coming from, assimilate that information, and then show a bias for action. I also think every good entrepreneur needs to be persistent. I like to joke that you have to stick around long enough to get lucky. Persistence and the ability to identify and capitalize on opportunities help me anchor and encourage the team as we grow in what is fundamentally a dif cult space.
September 2023 • Inbound Logistics 15
Candy
CHOCOLATECOVERED COMPLIANCE Many food companies are applying advanced supply chain technology to improve the quality compliance of shipments before they arrive at stores or distribution centers. One of the world’s largest chocolatiers, for example, saw its cold chain compliance grow from 59% to more than 85% after implementing Roambee’s AI-powered supply chain intelligence platform. The system analyzes real-time conditions both inside and outside reefer containers across various lanes throughout the year. Among 93 lanes, Roambee's AI utilized sensor input—including location, temperature, humidity, and more— to identify the top 20 lanes responsible for more than 60% of temperature and humidity breaches. By prioritizing investment on premium transport models for these 20 lanes instead of all, the chocolate company saved millions of dollars. By using firsthand sensor-driven signals, the chocolate company was able to deliver 26 million pounds of candy annually without compromising quality, detect anomalies in its supply chain operations, and better forecast cold chain compliance by lane, by transport partner and by season.
As Halloween approaches, candy companies face a global shortage of a key ingredient: sugar. Even when candy producers can locate enough raw materials to meet production demands, they must contend with high prices. Factors exacerbating the sugar shortage include: Transportation issues. Supply chain disruptions have led to logjams at ports, lack of carrier availability, and other challenges that delay sugar deliveries to candy companies. Trade restrictions. Agricultural policy requires candy companies to purchase at least 85% of sugar from domestic suppliers, creating a major hurdle during the current shortage. Additional restrictions, such as sanctions imposed against Russia–a major sugar producer–have worsened the shortage’s impact. Climate change. Climate change and associated extreme weather events such as heat waves can shorten growing seasons, reduce crop yield, and limit sugar availability. Crop failures. Many domestic and international producers faced significant crop failures over the past year. Some experts also point to El Niño as a cause for the decline in sugar production. TRICK, NO TREAT
$42.6 BILLION
Current total confectionary market sales, boosted by inflation $12.9 BILLION Market size of the U.S. candy production industry as of 2022 $54.3 BILLION Projected total confectionary sales by 2027
SWEET SUCCESS The top 5 largest candy brands in the United States by revenue: 1. Hershey Company $10.4 billion — 2022 annual sales 2. Kit Kat
$2.1 billion — 2022 annual sales 3. Reese’s Peanut Butter Cups $2 billion — 2022 annual sales 4. M&Ms $912 million — 2022 annual sales 5. Twix $297 million — 2022 annual sales
SOURCES: Euromonitor, Zippier
16 Inbound Logistics • September 2023
VERTICALFOCUS
LIGHTS, CAMERA, CHOCOLATE To oset major price hikes from manufacturers, AMC Entertainment Holdings plans to make its own candy and sell it in theaters. “As a result of the pandemic and supply chain shortages, candy manufacturers had increased their price to us by a huge amount,” said Adam Aron, chairman and CEO of AMC, during an earnings call. AMC says it can manufacture a private label of popular candy and sell it at a lower price than the current name brands the theater chain oers. Even at lower prices, AMC would still maintain a higher profit margin because the “cost to manufacture the private label brand is so much less than the normal brands,” Aron said. The entertainment company expects to introduce its private label of popular candies in theaters later in 2023 or early 2024.
SUGAR RUSH
The average American consumes an estimated 8 pounds of candy per year, with children eating even more.
September 2023 • Inbound Logistics 17
NOTED [ IN FOCUS ]
The Supply Chain in Brief
> GOOD WORKS
> M & A
• Transervice Logistics, a provider of dedicated contract carriage and customized transportation solutions, awarded four $2,500 scholarships to children of its employees for the 2023 fall term at the college of their choice. The Transervice executive team chose the winners based on academic achievement, community involvement, and overall character.
> UP THE CHAIN
Trax Technologies, a transportation spend management solutions company, appointed Blake Tablak ( pictured ) as CEO. Tablak succeeds Hampton Wall, who will transition to the role of special advisor.
n Forward Air Corporation and Omni Logistics will combine in a cash-and-stock transaction. The merger creates a scaled LTL enterprise that provides multimodal solutions for shippers with complex, high-service, and high-value freight needs.
Robert Stadnicki joins Worldwide Logistics Group as national air freight director, responsible for setting the company’s air freight strategy, managing import and export air services, and creating and implementing new strategies to drive revenue.
n CEVA Logistics signed an agreement to acquire 96% of Mumbai-based Stellar Value Chain Solutions , a contract logistics provider, encompassing
DP World named Terry Donohoe as vice president of freight forwarding for the Americas. He is responsible for establishing and implementing the company’s Americas’ freight forwarding strategy and service offerings while working to integrate these capabilities into the broader DP World global supply chain network.
IntelliTrans, a provider of global multimodal solutions for the bulk and break-bulk industries, named Chad Raube ( pictured ) as president and CEO, replacing Ken Sherman, who has retired.
approximately 7.7 million square feet of space across more than 70 facilities in 21 cities in India. n Verst Logistics has acquired the managed transportation and freight brokerage business from Loth Logistics. This strategic transaction will roll up into the Verst Transportation Business Unit.
DHL Supply Chain announces a change in its regional management as Terry Ryan, CEO DHL Supply Chain Asia Paci c, retires from the DHL Group after more than 40 years with the company. His successor, Javier Bilbao ( pictured ), was previously CEO DHL Supply Chain Latin America.
18 Inbound Logistics • September 2023
NOTED
> RECOGNITION
> SEALED DEALS
• The Containerization and Intermodal Institute (CII) honored Brenda Martin, former vice president of terminal services (retired) for Husky Terminal and Stevedoring at the Port of Tacoma, with the 2023 Lifetime Achievement
• UK-based online men’s and women’s clothing label HERA Clothing has selected Bleckmann as its third-party logistics partner. This new collaboration, which covers warehousing and ful llment, will help HERA continue to meet customer service levels as it pursues a growth strategy.
Award. CII presents the award to individuals or organizations who have played a long-standing, significant, supporting role in the industry. • Tim Dean, a Werner professional driver, achieved the milestone of driving 5 million accident-free miles . Dean joins retired Werner professional driver, Charley Endorf, as the second driver in company history to reach this milestone. • ToolsGroup, a provider of retail and supply chain planning and optimization software, was awarded Microsoft’s Best Independent Software Vendor Partner Award for the third year in a row. The award recognizes ToolsGroup’s expertise, data- driven approach, and cloud-based solutions for retailers, distributors, and manufacturers. • Third-party logistics provider MODE Transportation was named the 2023 Univar Solutions Central Region Carrier of the Year. MODE provides over-the-road and LTL shipping solutions to Univar, a global specialty chemical and ingredient distributor, and its customers.
• Souto Foods, a wholesale distributor of authentic Hispanic Foods, has chosen Made4net’s WarehouseExpert WMS to enhance inventory accuracy, productivity, throughput, and customer satisfaction. Souto Foods serves a customer base of more than 600 grocers and food service providers across the United States.
• Wawa is partnering with Penske to operate a Freightliner eCascadia battery- electric truck as part of a 6-month pilot program. This is the rst electric truck used in Wawa’s history. From the pilot, Penske will test and learn more about this emerging new technology to consider future application or expansion to its delivery eet.
• Global lighting brand and retailer Briloner has adopted TradeBeyond as its multi-enterprise supply chain platform. Briloner will use TradeBeyond to cover its end-to-end supply chain operations, from product development to sourcing and supply chain.
• CLARINS , a high-end skincare company, has selected the Goods to Man SCALLOG solution to automate its business-to-business and business-to-consumer retail order picking at its ecommerce logistics hub in Somme, France.
> MILESTONE
n August 2023 marked the 20th anniversary of Lakeshore Logistics, based in Cleveland. The non-asset company uses a proprietary, data-driven approach to solve transportation supply chain challenges for its customers.
September 2023 • Inbound Logistics 19
TAKEAWAYS Shaping the Future of the Global Supply Chain
Shippers Share High Hopes What are shipper expectations for Q4—traditionally the busiest shipping season of the year? The latest BlueGrace Logistics Con dence Index nds: • Expected revenue growth. Positive responses increased, indicating most shippers (64%) are optimistic about revenue growth in the fourth quarter of 2023. • Impact on inventory levels. Responses reveal a nuanced view of shippers’ outlook on inventory levels. Although a slightly larger portion compared to Q3 anticipates revenue uctuations negatively affecting inventory, the majority still foresees a positive impact. This mix of perspectives suggests a dynamic marketplace where adaptability will be key.
• Order sentiment. A noteworthy nding shows the unprecedented level of neutral responses at 66% regarding order sentiment. This high level of uncertainty hints at an equilibrium between expansion and contraction, implying that most shippers are adopting a cautious approach, likely in uenced by prevailing market ambiguities. • Consensus. The Q4 data reveals a remarkable alignment among shippers in terms of revenue, inventory, and orders. This convergence, not seen in more than one year, showcases a uni ed perspective within the industry and signi es that stakeholders have identi ed common ground and expectations for the upcoming quarter.
20 Inbound Logistics • September 2023
TAKEAWAYS
SHIPMENT VOLUMES AND PEAK SEASON: WHAT TO EXPECT Facing a complex international scenario of inflationary pressure and high interest rates, there is a ton of speculation around the eects of the 2023 peak season, with global stocks signaling caution and reflecting a slower pace of replenishment. The cycle of shipments and restocking for 2023 will be very similar to 2022, when the peak season did not increase the respective volumes, experts predict. “It is expected that the rising interest rates around the world, except in Japan, will make inventory replenishment and shipping less necessary,” says Mario Veraldo, CEO MTM Logix, a logistics company. “However, unlike 2022, when rates were reduced during the high season, there is an expectation that rates will have a small increase this year.”
Veraldo attributes this recovery to global increases in specific product categories, reflecting a growing relationship in product categories in dierent geographical regions. “These trends provide insights into current market dynamics, highlighting the importance of adaptability and strategic planning in a complex global market environment,” he notes. “The main challenge lies in the replenishment process in many sectors, which generally involves little data and relies heavily on intuitive ‘gut feelings’. This approach contributed to the whip eects experienced during the pandemic.” The order book for container ships is at its highest ever, reflecting the restructuring of supply and demand in the sector. This aligns with the trends in global inventory figures, interest rates, and specific product category increases, all of which are influencing the current freight rate dynamics. These trends suggest a scenario in which, unless the world economy grows and the movement of goods increases, freight rates could fall below pre-pandemic levels. This could lead to a scenario of prolonged deflation, Veraldo notes.
September 2023 • Inbound Logistics 21
SALES & LEASING TERMINAL TRACTORS & TRAILERS
TAKEAWAYS
YELLOW WENT UNDER. NOW WHAT? Now that Yellow Corp. is out of business, what can shippers do to keep freight moving while limiting costs? With Yellow’s operations accounting for 9% of total U.S. LTL capacity, its collapse immediately tightened up the market. Other carriers are happy to keep former Yellow freight moving—for a price. Analysts say Yellow rates were 10-20% below competitors, and carriers are raising rates in the aftermath of the bankruptcy. Pricing aside, carriers are also using the Yellow collapse to optimize the freight they move. If new loads from former Yellow customers are a better, more profitable fit for the carrier’s network than existing freight, they take action to purge less-desirable freight. How? Mid-contract, out-of-cycle pricing actions. Shippers receive notice of a major rate increase or accessorial charge, and they have the choice to accept it or cancel their contract. An example of this tactic is a carrier changing their rules tari on lightweight shipments.
Carriers have a rule in their taris document called the “cubic capacity minimum” that applies an alternate rate or the standard rate— whichever is highest—to lightweight, low-density shipments of 750 cubic feet and greater that weigh 6 pounds per cubic foot or less. For some carriers, the cubic capacity minimum now has been updated to apply to shipments of 350-750 cubic feet at 4 pounds per cubic foot—targeted to price out light, fluy freight and smaller shipments. The shift makes shipments as small as three pallets eligible for the cubic capacity minimum, down from the previous 6 pallets threshold. The cyclical nature of transportation supports the fundamentals for shippers: Build lasting relationships and maintain favorable contracts by upholding practices that make them a shipper of choice. But careful analysis can also pay o. Identifying lane imbalances can allow shippers to capitalize on major dierences among carriers that yield meaningful cost savings. Success in today’s LTL market requires investing in the give-and- take of long-term carrier relationships and digging deep to capitalize on opportunities when market conditions work in their favor. – Kevin Day, President, LTL, AFS Logistics
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22 Inbound Logistics • September 2023 FOOD AND BEVERAGE • PARCEL SHIPPING • AUTOMOTIVE • MANUFACTURING • HEALTHCARE CONSTRUCTION MATERIALS • RETAIL/CONSUMER PRODUCTS • ELECTRONICS • PAPER PRODUCTS
TAKEAWAYS
Taking a Hard Look at Drayage The U.S. drayage industry is poised to grow from $6.1 billion in 2022 to $8.3 billion by 2027. A new report from PortPro, a drayage software provider for drayage carriers, identi es the following trends: • Primary growth drivers come from a global increase in consumer demand for ecommerce. Areas to watch for more future growth include electronics, food and beverage, autos, chemicals, oil and gas, and pharmaceuticals. • Drayage is at a technological crossroads. Growth-minded drayage carriers are adopting technology to digitize operations and improve ef ciency and services. • Increased investments to strengthen the infrastructure of the entire port ecosystem to accommodate growth in consumer spending and imports. Improvements to bridges, new equipment, new larger vessels, overall operation expansion, new technologies, and more employees impact all players. • A sustainable future is top of mind, but slow in adoption. Carriers share concerns for building infrastructure to support e- eets and other AI opportunities on the road and in warehouses.
Drayage growth is expected to come from market share, making competition fierce.
September 2023 • Inbound Logistics 23 SyfanLogistics.com | Gainesville, GA | 855.287.8485 | 770.287.8485 SyfanLogistics.com | Gainesville, GA | 855.287.8485 | 770.287.8485
TAKEAWAYS
Regulations Roundup No matter what industry your company is in, you need to stay aware of relevant regulations and take steps to comply. Here is a brief roundup of some major government agencies in the logistics and supply chain space and their current rules. Federal Motor Carrier Safety Administration (FMCSA) The FMCSA regulates commercial motor vehicle (CMV) safety in the United States. This includes regulations on securing cargo, driver hours of service, and vehicle maintenance. Recent FMCSA rules include: • More frequent drug and alcohol testing for drivers . The FMCSA now requires truck drivers to be tested for drugs and alcohol at least once every two years, and more often if they have a positive test result or are involved in a crash. • Electronic logging devices (ELDs). All commercial motor vehicles must be equipped with ELDs that track driver hours of service. This rule was originally implemented in 2017, but some exemptions expired in 2023. • More ef cient and effective safety tness determinations. The FMCSA’s new safety tness determination process focuses on identifying carriers that are most likely to pose a safety risk, and takes into account a wider range of factors, such as vehicle maintenance records and driver history. • The safe introduction of automated driving systems (ADS). The FMCSA has published a notice of proposed rulemaking (NPRM) for ADS-equipped commercial motor vehicles. The NPRM seeks comment on several issues, including how to ensure that ADS-equipped CMVs are operated safely and how to address the liability implications of these vehicles. GOVERNING BODIES Here are some other government agencies issuing regulations that may aect your supply chain and logistics operations: Occupational Safety and Health Administration (OSHA) regulates workplace safety. Customs and Border Protection (CBP) regulates the import and export of goods. Department of Transportation (DOT) regulates the transportation of goods by air, land, and sea. Securities and Exchange Commission (SEC) regulates the financial aspects of supply chain operations.
Food and Drug Administration (FDA) The Food and Drug Administration regulates the safety of food, drugs, and medical devices including how they are manufactured, transported and stored. While there are no new transportation regulations speci cally for 2023, the FDA’s key transportation regulations include: • Hazard Analysis and Risk-Based Preventive Controls for Human Food rule. Requires food facilities to identify and control hazards that could cause foodborne illness, and to implement preventive controls to reduce the risk of these hazards. • Sanitary Transportation of Human and Animal Food rule. Establishes sanitary practices for truckers and rail shippers, loaders, and receivers involved in transporting human and animal food to ensure its safety. • Current Good Manufacturing Practice (cGMP) regulations for Finished Pharmaceuticals: Establishes requirements to ensure quality and safety during the manufacturing, processing, packaging, labeling, and holding of nished pharmaceuticals. Environmental Protection Agency (EPA) To reduce greenhouse gas emissions and air pollution from vehicles, the EPA has proposed several new transportation regulations for 2023, including: • New fuel economy standards for light-duty vehicles. These standards would require light-duty vehicles such as cars and trucks to get an average of 55 miles per gallon by 2026, up from 40 miles per gallon in 2023. • New emissions standards for heavy-duty vehicles. These standards would require heavy-duty vehicles such as trucks and buses to emit less nitrogen oxides and particulate matter. • Renewable fuel standards. These standards would require a certain percentage of transportation fuel to come from renewable sources, such as corn ethanol and biodiesel. • Proposed regulations on electric vehicles. These regulations could include requirements for automakers to sell a certain number of electric vehicles each year, or for utilities to provide charging infrastructure for electric vehicles.
24 Inbound Logistics • September 2023
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