From strategies to reboot global supply chains to importing and exporting success case studies, this edition takes on an unsettled world and provides steadying insights. Discover leading global trade management systems, reverse logistics approaches, and how your company can not only survive but thrive in this new global landscape.
MARCH 2022
THE GEORGIA CONNECTION(S) SOLVING THE E-COMMERCE EQUATION
For over 50 years, Penske has kept fleets, supply chains and businesses moving forward. From uptown to cross country and any direction you need, our transportation and logistics solutions have you covered. Because when your business is on the line, you have everything to lose but even more to gain.
BITE SIZED SUPPLY CHAIN / LOGISTICS INFORMATION Info SNACKS
6,000 Current number of dark stores across the globe 45,000 Estimated number of dark stores by 2030 (A dark store refers to a brick- and-mortar location that has been shut down and turned into a ful llment center.) – Interact Analysis
FULL STEM AHEAD • 75% of women and 80% of men are likely to recommend a career in manufacturing. • STEM programs are the most effective pathway for women to enter into the manufacturing industry. • Training programs have had the most significant impact on career advancement. – Career Advancement for Manufacturing, an annual report from Thomas and Women in Manufacturing that outlines key insights surrounding diversity and career opportunities for women in the manufacturing sector. $401 million Estimated loss of goods from a re aboard cargo ship Felicity Ace on its way from Germany to Rhode Island. The ship was carrying about 4,000 Volkswagen AG vehicles, including Volkswagen, Porsche, Audi, Bentley, and Lamborghini models. The loss could cost the automaker at least $155 million.
UNDER ARMOUR PLAYS DEFENSE “We expect many supply headwinds to continue well into fiscal 2023 until longer- than-usual transit times, backlogs, and congestion find balance and inbound shipping delays subside.” – David Bergman, chief nancial of cer, Under Armour, during an earnings call warning that the company is taking a hit
”This is a moment when corporations will stop taking their supply chains for granted and consumers will begin to understand the costs and inconvenience to satisfying their demands.” – Chris Rogers, Supply Chain Economist, Flexport
THAT’S THE WAY THE COOKIES CRUMBLE Supply chain and labor issues experienced by Little Brownie Bakers, one of the two companies the Girl Scouts licenses to make its famous cookies, is resulting in a nationwide shortage of the organization’s newest offering—Adventurefuls.
To help address the shortage, each council is limited to carrying just 7% of the minimum order forecast in November 2021. Additionally, the organization has also called on sellers to discontinue further Adventureful orders and even offer customers alternative flavors.
2 Inbound Logistics • March 2022
CONTENTS MARCH 2022 | VOL. 42 | NO. 3
36 SPONSORED SOLVING THE E-COMMERCE EQUATION As labor constraints and capacity challenges persist, e-commerce complications multiply. Eureka! These logistics providers have it all figured out.
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56 GLOBAL TRADE MANAGEMENT SYSTEMS GUIDE 2022 In today’s complex and unsettled business environment, global trade management (GTM) systems are more important than ever. These GTM providers can help take some of the stress out of managing a global supply chain. 50 THE INS & OUTS OF IMPORT/ EXPORT SUCCESS Whether they are bringing goods into the country or shipping them out, import/export professionals embrace ingenuity, grit, and hard work to stay afloat.
60 SPONSORED THE GEORGIA CONNECTION(S) The essence of logistics is making connections. No surprise, then, that Georgia—a state where connectivity is a way of life—is a shining star on the logistics land (and air and sea) scape.
44 7 STRATEGIES TO REBOOT GLOBAL SUPPLY CHAINS These tips will help your company restart operating systems, processes, and strategies through the new normal.
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4 Inbound Logistics • March 2022
Perfectly positioned to thrive.
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Learn how we can help your business grow at www.portnynj.com
The Port is a facility of The Port Authority of NY & NJ
CONTENTS MARCH 2022 | VOL. 42 | NO. 3
GOOD QUESTION What’s your best reverse logistics tip?
26 SPONSORED SOLVED Deploying an end-to-end solution to support a major product launch 28 AUTOMATION Why you should care about AP 30 3PL LINE Improving driver retention 32 IT MATTERS Digitalize to manage disruptions
INSIGHT 8 CHECKING IN Rowenta irons out inventory challenges 10 GOOD QUESTION What’s your best reverse logistics tip?
Automated guided vehicle and autonomous mobile robot innovations
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10
INFO 78 SUPPLY CHAIN INSIGHTS 80 WEB_CITE CITY 92 CALENDAR 94 RESOURCE CENTER
12 DIALOG 14 10 TIPS
Choosing a 3PL 24 SPONSORED KNOWLEDGE BASE Take control of your imports— save time and money
34 RETAIL RETHINK Ensuring delight in the grocery aisle
INFOCUS 2 INFO SNACKS 16 VERTICAL FOCUS: TOYS 20 NOTED 22 TAKEAWAYS 86 PRODUCT SPOTLIGHT:
New container-carrying services in Europe and other solutions
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AMR S /AGV S 88 IN BRIEF 96 LAST MILE Race to zero emissions
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Autonomous electric rail cars aim to make more efficient use of rail infrastructure
INPRACTICE 18 READER PROFILE
Daniel Politowicz, the logistics and transportation manager of Tubelite, brought together supply chain stakeholders to make sure the company’s aluminum extrusions for its doors and frames were shipped seamlessly.
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6 Inbound Logistics • March 2022
CHECKINGIN
Rowenta Irons Out Inventory Challenges
Vol. 42, No. 3 March 2022 THE MAGAZINE FOR DEMAND-DRIVEN ENTERPRISES www.inboundlogistics.com
STAFF
PUBLISHER Keith G. Biondo
publisher@inboundlogistics.com
W here do I go when it is too painful to watch TV? To my garage workbench. As it happens, my daughter had a project for me. Her pricey Rowenta iron was staining and scorching clothes. I can’t x what’s going on in the world, but I’ll try my hand at this! Having broken several appliances while xing them, I’ve learned to get expert guidance rst. I put the iron on my workbench and headed to the Rowenta website looking for the user manual. In addition to irons,
EDITOR Felecia J. Stratton
editor@inboundlogistics.com
SENIOR EDITOR Katrina C. Arabe
karabe@inboundlogistics.com
Jaclyn Ix jix@inboundlogistics.com
PLATFORM CONTENT MANAGER
CONTRIBUTING EDITORS Merrill Douglas • Karen M. Kroll Richard Osborne
CREATIVE DIRECTOR Jeof Vita
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Keith Biondo, Publisher
DESIGNER Nicole Estep
nicole@inboundlogistics.com
Rowenta, a multinational global company, manufactures home appliances including heaters, vacuum cleaners, fans, air puri ers, and humidi ers. However, my search on Rowenta.com turned up something I was not looking for—insight into Rowenta’s business model and the company’s philosophy of using supply chain management to serve their customers better than all others in the home appliance sector. As part of an ongoing sustainability initiative, the company has spent the past 10 years developing “eco-intelligent” products, explains Alain Pautrot, vice president of consumer satisfaction for Rowenta. The front end to that starts with product engineering teams who craft small appliances with longevity and repair-ability in mind. On the back end, they sought to guarantee “that repairs will generally cost less than a new product,” Pautrot says, and that the spare parts will be globally available at their network of repair centers “within a few days—for 10 years after purchase,” he adds. How can the home appliances Rowenta manufactures last or be quickly repairable for “at least 10 years”? The company backs that goal with an inventory investment and global supply chain operation with a stated mission: to stock a global network of repair stations with spare and repair parts available to support repair for at least one decade after the appliance was rst manufactured. “We realize that our products are deserving of a long life,” Pautrot says. What gives his statement legs? Maintaining a global inventory of nearly six million spare parts in 165,000 square feet of global warehouse space. It gets better. Rowenta sets aside half of those parts to repair products it no longer manufactures. Finally, the repair life cycle can be “extended inde nitely,” says Pautrot, with the use of additive manufacturing, or 3D printing. It all adds up. You have sustainable product design, a massive global inventory stock, rapid delivery of repair parts, and 3D printing technology all combining to drive supply chain operations that support an incredible commitment to customer service. Oh, and that iron is still on my workbench. I’ve got at least 10 years to try and repair it. n
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8 Inbound Logistics • March 2022
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GOODQUESTION Readers Weigh In
What’s your best reverse logistics tip?
SHARE THE COST WITH COMMERCIAL COUNTERPARTS and invest in online merchandising. Measure the reduction in returns that comes from better product descriptions and photos, customer reviews and ratings, and demo videos. —Dustin Burke Global Co-Leader, Manufacturing and Supply Chain, Boston Consulting Group IDENTIFY I O T AND TECHNOLOGY TO COLLECT ESSENTIAL DATA. Reverse logistics is essential to customer experience and to business success, involving repair, replacement, coordination between locations, information from service management and inventory systems. —Sarah Nicastro VP, Customer Advocacy, IFS Creator, Future of Field Service
PROVIDE LABELING AND PACKAGING that make it easy for the consumer. If goods can be quickly received and routed, then half the battle is over.
—John Wirthlin Industry Principal, Manufacturing, Transportation and Logistics, Zebra
~17%
RATHER THAN DISMISSING RETURNS as a cost additive, investigate how you can reduce costs while getting the items that can be re-sold back into stock sooner for resale. Are there ways to increase throughput, while reducing touches, like managing staff based on throughput goals and incentive-based pay? —Harold Baro SVP and General Manager SIMOS Solutions - A TrueBlue Company
According to the National Retail Federation, the total rate of returns was 16.6% in 2021, up from 10.6% in 2020. The best way to reduce returns is to understand the total cost of your returns and to make sure your reverse supply chain is optimized along with the rest of your supply chain.
Prevention Prevails Avoid reverse logistics in the first place by having better upstream control. Ensure the right product and process quality control throughout the inbound flow, and you will take away key reasons for returning products. —Elger Postma Asia Commercial Head, APL Logistics
— John Haber President, Parcel Transportation Insight
INVEST IN PAINLESS RETURN SOLUTIONS. Retailers and brands should implement solutions like physical drop-off locations that make returns more convenient for customers, helping them to compete with major players like Amazon and Walmart. Brands should keep a pulse on challenges in their returns processes and correct them in order to acquire and retain customers. —Tierney Wilson SVP, Consulting and Client Services January Digital
Avoid it, at least where you can. Work to ensure that your customers are truly receiving what they want and that it will work for them. Whether it’s clothing that has a detailed size chart or technology that answers customers’ questions, make sure they are equipped with enough information so they’re certain they’re getting the right product.
—Nancy Korayim Founder and CEO, MetroSpeedy
10 Inbound Logistics • March 2022
GOODQUESTION
DOCUMENT YOUR RETURN PROCESS and make it easy to find on your website. Include a return label and make durable packaging that’s easy to reuse. On the back end, use a strong forward/backward product tracking mechanism and processes to handle the repair, replacement, or recycling of the item being returned. —Scott Hebert CEO, SYSPRO USA
CX Strong Point
Don’t skimp on the customer experience for returns. It’s a unique opportunity to delight a customer under a non-ideal experience (no one likes returns), which generates super-fans for your brand. —Chris Deck CEO and Founder, Deck Commerce Make it easy for the customer. Provide simple access to labels and shipping, immediate credit for the returned product, and incentive to shop again. These simple steps build brand loyalty and positive customer sentiment, resulting in more purchases and product recommendations that offset any investment required to deliver this seamless experience. —Laura Ritchey COO, Radial Start with the goal of a great customer experience. A value-added returns process is aligned across all stages—beginning with clear instructions, expectations, and returns systemization for the customer; then creating seamless flow of product and information between returns fulfillment center, customer service, and outbound re-delivery functions, with meaningful visibility along the way. —Brandon Feeler Director of Client Solutions Legacy Supply Chain
DEFINE THE APPROPRIATE STRATEGY for your products,
processes, and customers. Reverse logistics is defined differently based on the industry-specific lens you view it through. Solutions are diverse across the products and services developing customer-centric processes. —Andrew Moul Director of Warehouse and Distribution Solutions A. Duie Pyle ENSURE RETURN SHIPMENTS COMPLY with all hazmat regulations. Simplify returns processes for customers, and ensure safe, compliant shipping, by giving them next- generation shipping boxes designed for shipping regulated materials (such as electronics containing lithium batteries) that arrive pre-assembled and pre-labeled with simple closure instructions. —Brian Beetz Director, Regulatory Affairs and Corporate Responsibility Labelmaster FIND AWORKFLOW THAT ENCOURAGES EXCHANGES to keep the customer happy and also keeps their revenue in your business. —Donny Salazar Founder and CEO, MasonHub
them back into inventory as quickly as possible becomes key. —Tony Oakes Continuous Improvement Engineer TA Services LOOP PRODUCT DATA BACK to the original source. The way many companies currently manage their product data only allows for the one- directional flow of information from suppliers to buyers. —Thomas Kasemir Chief Product Officer, Productsup
VIEWAND OPTIMIZE THE ENTIRE REVERSE LOGISTICS PROCESS and not just single components. Allow technology to drive the optimal routing when the customer initiates a return. —Steve Rop Chief Operating Officer, goTRG KEEP STOCK IN GOOD SHAPE and get returned parts back into inventory. Sometimes returned parts may become a “hot” item and need to be picked again quickly. Getting
Have a great answer to a good question? Be sure to participate next month. We want to know: Is it possible to compete with the logistics dominance of e-commerce behemoths? How? We’ll publish some answers. Tell us at editorial@inboundlogistics.comor tweet us @ILMAGAZINE #ILGOODQUESTION
SEEK SOLUTIONS THAT AUTOMATICALLY REFRESH
INVENTORY and financials to keep systems from accidentally selling inventory they don’t have in stock. Consumers today are buying products they can’t see or touch, so they order multiple versions of a product online and ultimately return all but one. —Samuel Parker Product Evangelist, Cin7
March 2022 • Inbound Logistics 11
DIALOG @ILMagazine [ INSIGHT ]
Want to join the conversation? FOLLOW US: linkedin.com/company/inbound-logistics facebook.com/InboundLogistics twitter.com/ILMagazine youtube.com/user/InboundLogistics inboundlogistics.com/cms/podcast DROP US A LINE: editorial@inboundlogistics.com the landscape for both commodities trading and supply chain management. –Marc C. Hebert Partner, Corporate Practice Group Jones Walker LLP
Re. Good Question: How can brick-and-mortar retail make a comeback? bit.ly/Aug21_IL_GQ
The basics will win—inventory, customer service, selection, convenient hours, and a great purchase experience. –Danny R. Schnautz Clark Freight Lines Re. 2022 Supply Chain Predictions bit.ly/SC_predictions_0122 Supply chain management has transformed across the globe through technological innovation. The pandemic has accelerated this process, and decarbonization has taken a lead role in shaping that transformation. Embedded in this transformation are legal, regulatory compliance, and data transparency issues that all companies must deal with. In the United States, efforts are underway to pursue a customs modernization act, called the 21st Century Customs Framework, bringing U.S. customs laws and regulations into the 21st century to match up with e-commerce challenges and address money laundering, cybersecurity, trade facilitation, and intellectual property rights enforcement, among other issues. The market will respond and develop programs that increase data transparency and reduce risk, strengthening accountability across the supply chain. We can expect this to be accomplished through blockchain technologies based on cryptocurrency platforms formatted for compliance with U.S. and other countries’ nancial services regulatory systems. These new programs will reshape
Global VIEW
All eyes are on Ukraine as the
PERSPECTIVE Women in Supply Chain
Russian invasion wreaks havoc on already strained supply chains. It is imperative the world plans for both the short- and long-term consequences. In the short term, the exodus from Russian investments and SWIFT legislation is severely complicating payments. Prices across the board—from energy to transport and manufactured goods—are soaring. The world’s reliance on Russia for commodities such as wheat and sun ower oil is being exposed and goods that are transported through the Black Sea face signi cant dif culties. Shipping from Ukrainian ports has practically ceased and as airlines warn of Russian airspace closures, transportation costs will soar, making some routes unusable. With sales and trading with Russia increasingly ceasing, procurement leaders must create lasting solutions should the sanctions become permanent and ultimately isolate the Russian market from global business. Supply chains can no longer ignore geopolitical risks in Europe. The con ict must become a fundamental pillar of procurement strategies. –Simon Geale Executive Vice President Proxima
Recently, I attended a conference that hosted a Women in Supply Chain luncheon. I assumed the event would be almost exclusively female, giving us the opportunity to discuss key challenges we have experienced or are seeking advice on as a leader or emerging leader in supply chain. Surprisingly, the room was also lled with many of our male colleagues. I was taken aback by this. I realized this was an important milestone—not only do we need female representation in supply chain leadership roles to encourage women to be a part of this vibrant industry, we also need support and acknowledgment from our male colleagues that women equally deserve to be in these roles and at the boardroom table. After all, businesses with diversity, and not just gender diversity, are more likely to be successful and grow. Although the proportion of women in senior management roles grew to 31% globally in 2021, according to Catalyst, diversity is clearly still lacking. It takes our entire industry to promote change.
–Karin Stevens General Manager
Overhaul via email
12 Inbound Logistics • March 2022
FLORIDA’S HUB EXPANDING CAPACITY TO DISTRIBUTION
• Expanded terminal capacity with plenty of room for growth • Multiple round-trip truck deliveries per day from Port to distribution centers • New and expanded container services with Central America, Mexico and Asia
• No congestion • Tampa/Orlando I-4 Corridor: 400 million SF of distribution center space • E-commerce, consumer goods, perishables and building materials • One of the hottest industrial real estate markets in the U.S.
WWW. PORT TB . COM
10 TIPS
Selecting a third-party logistics (3PL) provider is a strategic business decision so treat it that way. Your 3PL should be a catalyst for producing unmatched retail logistics performance levels and total supply chain optimization. Here’s how to choose the right partner. Choosing a 3PL
1 CONSIDER THE ADVANTAGE OF ASSET-OWNED PROVIDERS.
8 LOOK AT RETAILER RELATIONSHIPS. Your 3PL partner should have deep relationships with today’s retailers that provide you with insights to drive seamless integration into retailers’ systems. This access to critical knowledge drives process optimization, while developing stronger relationships to increase retail presence and sales. 9 EXAMINE RETAILER COMPLIANCE. On-time and in-full shipping standards will only continue to increase as more retailers adopt stricter regulations to meet consumer demand. Your 3PL should have a pulse on each major retailer’s evolving compliance demands— and the logistics solutions to help you meet them.
An asset-based third-par t y logist ics provider owns and operates its trucking f leet, warehouses, and propr ietar y analyt ics technologies. Ownership of assets eliminates middleman costs passed on by 3PLs that outsource their warehousing and trucking. Suppliers benef it f rom improved control, the abilit y to pivot quickly, and increased supply chain ef f iciencies.
2 FOCUS ON ONE STRATEGIC REGION. Centralized warehousing and inventory control produce economies of scale throughout supply chain operations. By controlling inventory from one inventory location, suppliers avoid redundancies at multiple warehouses, reduce overall operational costs, improve efficiencies, and achieve a more consistent product flow to store shelves. 3 LEVERAGE RETAIL CONSOLIDATION. Consumer product goods (CPG) suppliers share truckloads with other customers to create a single, full truckload to the same retailer distribution center. It’s a simple concept that yields immediate cost savings, decreases carbon footprints, and improves overall supply
6 INVEST IN PEOPLE.
improves compliance to eliminate retailer fines while increasing in-stocks and line extensions. 4 TURN INSIGHTS INTO MEANINGFUL ACTION. Real-time visibility and access to critical data is essential for improved decision-making and supply chain optimization. Working with a 3PL that offers an advanced analytics platform to improve transparency, control, and real-time insights is critical in today’s business climate. 5 EMBED SUSTAINABILITY ACROSS THE CHAIN. Your 3PL partner should be a catalyst for helping suppliers integrate supply chain best practices that reduce operational costs, decrease environmental footprints, and produce a greater return on investment.
Work with a 3PL that has invested in subject matter experts with functional areas of expertise who own deep categorical and industry knowledge. 7 BENEFIT FROM VALUE-ADDED SERVICES. merchandiser assembly and more, 3PLs should offer value-added services that reduce overhead costs and turnaround times. This allows suppliers to focus on growing their businesses. From labeling to repackaging to
10 VET TO MAKE SURE
RETAIL LOGISTICS ARE MASTERED. With ever-increasing demands and disruptions, put your supply chain in the hands of a retail logistics exper t. Conduct due diligence to research, vet, and select a 3PL par tner that can grow with your business.
chain performance. Importantly, it also
SOURCE: GREG FORBIS, EXECUTIVE VICE PRESIDENT STRATEGY AND BUSINESS DEVELOPMENT, RJW LOGISTICS GROUP
14 Inbound Logistics • March 2022
Toys
TOYING WITH RESHORING A U.S.-based toy industry may be possible as manufacturers face continued facility closures, freight issues, and rising costs. Some toymakers are ready to explore reshoring and nearshoring, says a report from Toybook.com. Highlights from the report include: Challenges: While nearly 70% of American consumers would prefer to buy and pay more for products labeled “Made in the USA,” the toy industry faces several roadblocks. Opening a new U.S. factory requires upfront capital investment, machines sourced from overseas, and environmental considerations. A new facility must be operated by a workforce that’s hard to come by during a labor shortage. Possibilities: In 2021, Walmart committed to purchasing $350 billion in products made, grown, or assembled in the United States as well as uniting businesses with economic development groups to create regenerative supply chains. Simplay3 collaborated with Walmart to develop its Monster City Extreme Wheels Track in just 17 weeks, because the design, engineering, and manufacturing all took place in Ohio. Classics coming home: Hasbro sold its facility in Massachusetts to the Cartamundi Group back in 2015, but the companies formed a partnership in which Cartamundi manufactures select Hasbro products, such as Monopoly, Clue, and Play-Doh in the United States. Know the nuances: Toymakers cannot put “Made in the USA” on their labels unless all final assembly and processing occurs in the United States, and virtually all components are made and sourced in the United States, according to the Federal Trade Commission. Qualifiers include wording such as “Made in the USA of U.S. and China components,” or similar labels that are truthful and not misleading. Upcoming plans: New Jersey-based LaRose Industries, maker of Cra-Z-Art and RoseArt products, opened a 315,000-square-foot manufacturing facility in Florida. Cra-Z-Art now maintains more than 1 million square feet of space dedicated to producing toys, art supplies, craft kits, and school supplies in the United States. Toymaker Starplast USA plans to invest nearly $18 million to open a second U.S. manufacturing facility in Virginia. “WE DECIDED THAT NOT ONLY WERE WE GOING TO PRODUCE OUR PRODUCTS IN THE UNITED STATES, BUT THAT WE WOULD ALSO SUPPORT U.S. SUPPLIERS OF COMPONENT PARTS.” — Brian McDonald, vice president of sales and marketing, Simplay3
McDonald’s is making its supply chain more sustainable by manufacturing its Happy Meal toys with signi cantly less plastic by the end of 2025. The fast food chain will make some toys, such as board game pieces, with plant-derived or recycled material. Super heroes and movie characters will be 3-D cutouts rather than plastic gurines. In the past, lower-plastic options included Pokemon cards and books. The chain is also looking into switching from plastic wrapping to plant-based and certi ed ber packaging. The newer options will be cost-neutral for franchisees because the effort was designed with the existing price in mind, the company says. McDonald’s has already been learning from feedback in France, the U.K., and Ireland, where the toys have rolled out. The goal is to make sure they are safe and sturdy enough for children. It’s also looking to recycle the old plastic toys in its restaurants. Its U.K. and Japan locations have reused the plastic for playgrounds and restaurant trays. More than 100 countries worldwide sell Happy Meals at McDonald’s locations. The toys have become a marketing strategy for movies, TV shows, and more through partnerships with Disney, Warner Brothers, and Hasbro. DO YOU WANT SUSTAINABILITY WITH THAT? McDONALD’S SELLS MORE THAN ONE BILLION TOYS PER YEAR THROUGH ITS HAPPY MEALS. — CNBC Report
16 Inbound Logistics • March 2022
VERTICALFOCUS TOPTOYTRENDS IN2022 Toy supply chains will focus on sustainability, escapism, and sensory products, with a strong focus on creative play, says the Toy Association. Here are the top trends expected to drive consumer spending on toys in 2022, the report says: 1. Content Creation From food play toys to artistic and building toys, items that encourage kids to use their imaginations and customize their own experiences, like content creators, are on the rise. It's also a trend that encourages intergenerational play between kids and parents, as well as one that taps into science, technology, engineering, arts, and math skills. 2. Escapism Most (76%) parents believe play provides a positive escape from the reality of the pandemic. More toys will focus on escapism to decompress from day-to-day life. This includes a mix of travel-ready toys and games and international- themed puzzles and games that take kids on adventures. This trend transports players into the digital world, such as NFTs, virtual reality, and toys tied to video games. 3. Sensory Toys Spurred by viral videos on platforms like TikTok, autonomous sensory meridian response (ASMR) has become synonymous with creating soothing moments out of mundane activities. More toys, such as light-up objects that let kids express their changing moods, dget play, and toys that provide calming social-emotional comfort, will
LEGO BUILDS MOMENTUM No matter how pricey they get, Legos remain one of the most loved toys in the United States ( see infographic ), according to recent research by toy company Premium Joy. Four expensive Lego sets, the cheapest of which costs $200, are the most popular toys in 34 states. Lego Home Alone is the most popular toy overall, even though it costs $250. The second most popular toy, Lego Titanic, costs $630 and is one of the most expensive sets Lego currently offers. Consumers sometimes get attached to a particular toy because it evokes nostalgia. “Kidult” toys have surged in popularity as young adults look to childhood toys for comfort during the pandemic. In the past year, about 25% of all toy sales have gone to young adults aged 19 to 29, reports Toy World . Lego has tailored its supply chain strategy to meet the demands of adult consumers bored with being confined at home. To make products more readily available, Lego has expanded its retail footprint away from major shopping centers and into the suburbs closer to its consumers, the company says.
engage the senses in this manner. 4. Social and Environmental Good
Most (78%) parents say a toy's sustainability is important to them. In 2022, many toys will not only incorporate more sustainable materials, but also emphasize a commitment to teaching kids how to be better global citizens. From the protection of endangered species to social justice issues, products that walk the walk resonate with consumers. As this trend grows, toys become tools for engaging kids in critical issues.
Source: Premium Joy
TOY PLAYERS STAY IN THE GAME
• Mattel expects strong growth from Hot Wheels, Barbie, Thomas & Friends, and action gures, driven by movie tie-ins with Jurassic World Dominion and Lightyear. • Mattel's recent agreement with Disney to make dolls for Disney Princess and Frozen will be a big sales driver in 2023. • Hasbro's net revenue rose to $1.7 billion in Q4, from $1.43 billion one year earlier. • Hasbro surpassed estimates for quarterly revenue in February 2022, boosted by demand for its board games, such as Monopoly, and collectible cards from consumers seeking at-home entertainment.
Despite supply chain issues and higher consumer prices across the toy industry, toymakers Mattel and Hasbro experienced solid growth during the pandemic, says a NASDAQ report. Parents have been spending more on toys and board games to keep children occupied due to limited vacations, boosting sales during the crucial 2021 holiday period. Highlights include: • Mattel saw 10% year-on-year sales growth during the holiday quarter, and growth is projected to continue in the near term, with strong Q4 earnings in February. • Mattel gained global market share within the dolls category in 2021, with Barbie ranking as the No. 1 toy brand globally.
March 2022 • Inbound Logistics 17
READERPROFILE There’s Always Something to Make Better
as told to Karen Kroll
A long with producing and shipping doors and frames and miscellaneous parts, at Tubelite we move a lot of 24-foot aluminum extrusions on our dedicated carrier base. Occasionally, we have to ship these extrusions by common carriers. The less-than-truckload (LTL) world can be scary. Sometimes a 24-foot extrusion is bent and returns as a 22-foot extrusion. Or, some might disappear. Most LTL carriers are not willing to move this type of material. In reviewing the processes we used to load and move the extrusions, as well as the volume of damages, I brought together the carrier, the packaging engineer, the safety people, and others, making sure everybody who touched the items was involved. When you bring together the affected departments so they have input on the project, they’re going to help make sure it works. We went through about eight renditions of the packaging before we came up with the nal design. It works really well. We dropped our damage claims down to less than 0.01%. Similarly, when I adjust customers between routes and carriers to make
the routes more ef cient, I bring the carriers into the same room and we go over the changes together. The open communication with our carriers, who also communicate with each other, makes a working partnership. For instance, at times one carrier may be short a driver and another carrier will help them out and vice versa. A MARINE CORPS START I started in the Marine Corps the year after I graduated high school. They needed people in logistics— embarkation as they called it. I didn’t know what logistics meant, but I took classes and started to learn. My job was to move everybody into the necessary operational area, and support them with whatever they needed, such as food, ammo, and repair parts. Then, I’d dissolve everything and bring them home. Then we’d do an after-action report and ask what we learned. It was always important to talk with each other. In the Marine Corps, you got the guy on your left and the guy on your right. That’s how you survive. If you don’t communicate with them, there are problems.
RESPONSIBILITIES: Oversee freight movement, distribution, and continuous improvement initiatives for the transportation and logistics of Tubelite’s storefront, curtainwall, entrances, and daylight control systems. DANIEL POLITOWICZ is logistics & transportation manager of Tubelite, an architectural aluminum manufacturer and division of Apogee Enterprises.
EXPERIENCE: Supply chain manager, Velocity Glass; operations & procurement
In reviewing the processes we used to load and move aluminum extrusions, I brought together the carrier, packaging engineer, safety people, and others. When affected departments have input, they will help make sure the process works.
manager, Palogix Supply Chain; sr. transportation mgr., Coca-Cola Refreshments; U.S. Marine Corps Staff Sergeant, as a 0431 Logistics and Embarkation Specialist.
18 Inbound Logistics • March 2022
READERPROFILE
The military has acronyms for everything. One is SMEAC, which stands for Situation, Mission, Execution, Actions, and Command Control. You look at every situation in that order, a practice I still use daily. If something goes wrong, I ask: What needs to be done to correct it? What are we solving for? How do we put a plan in motion and communicate it to the proper people? If you think that you have everything running perfectly and nothing can be improved, that probably means you need to move on. There’s always something to make better. n
Daniel Politowicz Answers the Big Questions 1 How would you describe your job to a ve-year-old? I would get some trucks and say, ‘I’m going to put this Lincoln Log on this truck, and bring it over here to this guy, so he can build his house.’ 2 Who are your heroes? My dad passed away early in my life. My next-door neighbor, Mr. Goodenough, really helped me through a difficult time. Without stepping in, he took care of and guided me. Then when I needed a place to go, my brother Rich took me in and let me finish school. I also admire his motivation. He owns a big company that does home remodeling and repairs, and he makes sure everything is done right. As a kid, I’d watch him put a 100-pound sack of feed on each shoulder, walk down a big hill to the pasture, and feed the cows. His strength and fortitude stayed with me. 3 As logistics manager, what three things do you check each morning? First, I make sure everything shipped out the previous night. After that, I get coffee and check my thousands of emails for emergencies. Then, I walk out on the floor and ask everyone how they’re doing. I like doing that.
asi_halfpgIL_0322_final_• 2/24/22 11:00 AM Page 1
GLOBAL LOGISTICS SOLUTIONS
International Transportation Services ▪ PORT-TO-DOOR INTERNATIONAL SHIPMENTS ▪ CUSTOMS BROKERAGE ▪ FREIGHT FORWARDER, NVOCC ▪ AIR FREIGHT SERVICES ▪ IMPORTER SECURITY FILING SERVICES (10+2) ▪ SHIPPERS RISK COVERAGE SERVICES
www.alliance.com
March 2022 • Inbound Logistics 19
NOTED [ IN FOCUS ]
The Supply Chain in Brief
> GREEN SEEDS
> M & A
n Logistics software-as-a-service company Descartes acquired NetCHB , a provider of customs filing solutions in the United States. n International technology group Körber signed an agreement to acquire the global mail and parcel business of Siemens Logistics . n FleetPride , a truck and trailer parts distributor, acquired the assets of Nationwide Truck Service of Louisville, Kentucky. n Charlotte-based third-party logistics brokerage HTL Freight acquired Wilmington, Delaware-based third-party logistics provider Matchmaker Logistics . n FourKites , a provider of real-time supply chain visibility platforms, acquired European supply chain visibility provider NIC GmbH .
• CMA CGM Group will no longer transport plastic waste aboard its ships. Ten million tons of plastic waste end up in the sea each year due in part to open- air storage and the absence of processing infrastructure for plastic waste that does not get recycled. CMA CGM's move prevents this type of waste from being exported to destinations where sorting, recycling, or recovery cannot be assured. • PepsiCo is using material developed by Israeli startup UBQ to develop a sustainable pallet made with unsorted household waste. The company will redirect more than 1,629 pounds of mixed waste from landfills and loop it back into the material as a valuable resource. During the manufacturing process, waste is diverted and greenhouse gas emissions are prevented. • The Environmental Protection Agency awarded the Port of Baltimore a $1.8 million grant for its Diesel Equipment Upgrade Program, which replaces older cargo-handling equipment and dray trucks with cleaner and more efficient models. The additional funding will help further reduce emissions at the port and its surrounding residential neighborhoods. • Logistics technology company Odyssey released first-year results from its Cloverleaf Sustainability Program aimed at reducing carbon emissions. The program reduced emissions for its clients by 489,831 tons in 2021, surpassing the original projection of 300,000-plus tons. Odyssey anticipates a reduction target of 529,017 tons in 2022.
> SHOVEL READY
n Canada-based online furniture retailer Article is building a 507,000-square-foot warehouse in the Houston metro area at TGS Cedar Port Industrial Park, its first fulfillment center in Texas. The new warehouse will help get products delivered quickly and easily. By focusing on a digital- first experience, Article is able to pass along savings to consumers.
n Amazon started construction on a massive fulfillment center in Los Lunas, New Mexico. At more than 1 million square feet, the facility is slated to open in 2023. Workers at the facility will pick, pack, and ship items for delivery.
20 Inbound Logistics • March 2022
NOTED
> RECOGNITION
> SEALED DEALS
• About You , a European fashion platform, selected CEVA Logistics to manage a new 40,000-square-meter fulfillment operation in Poland. CEVA’s automation and technology capabilities help deliver greater productivity and shorter lead times for About You's e-commerce activities. • Sheetz , a restaurant and convenience chain in the Mid-Atlantic, will partner with RELEX Solutions , a provider of unified retail planning solutions. The partnership helps position Sheetz for store growth and unifies its demand-planning processes to ensure an efficient flow of products from suppliers to stores. The supply chain management solution improves collaboration and visibility throughout the vertically integrated network. • DHL Supply Chain is investing $15 million in robotics solutions from Boston Dynamics to further automate warehousing in North America. Boston Dynamics will deliver a fleet of its Stretch robots, which are specifically designed to automate the unloading process in distribution centers, to multiple DHL warehouses during the next three years.
• Hyster’s J155-190XNL high-capacity lift truck series won the 2021 Good Design Award . The sit-down, counterbalanced lift truck is powered by a factory integrated 350-volt lithium-ion battery. It offers a zero- emission alternative with performance comparable to the internal combustion engines typically used in high- capacity applications. • The Home Depot recognized Hub Group with the Domestic MVP Award for supply chain support across intermodal, over-the-road, emergency, and transfer freight. The home improvement retailer presented its Online Final Mile Carrier of the Year Award to Hub Group's final-mile business for providing the best service, flexibility, and solutions for online home delivery and named Hub Group the Intermodal Carrier of the Year for its dependable intermodal capacity and solutions. • Global logistics company Ascent was named a Partner-Level Supplier for 2021 in John Deere’s Achieving Excellence program. Partner is the highest level in the program for strategic suppliers to Deere & Company. Ascent provides on-demand, mission-critical air and ground expedite solutions across North America.
> GOOD WORKS
> UP THE CHAIN
• Wiliot , an Internet of Things solution for manufacturers, named Manish Bansal as its chief product officer, responsible for developing and scaling the platform. Bansal joins the company after a 15-year career with Amazon, serving as director and general manager in supply chain optimization technology.
• Jim Berlin, chief executive officer at Logistics Plus , created a fundraising effort at lpukrainerelief.com to help support the company’s employees in Ukraine with the goal of reaching $1 million. The company's Ukraine team consists of about 50 people.
March 2022 • Inbound Logistics 21
TAKEAWAYS [ IN FOCUS ] Shaping the Future of the Global Supply Chain
Electric Trucks Save the Planet...and Some Cash By 2027, electric freight trucks and buses will become less expensive to purchase and operate than their combustion engine counterparts, says a study by Roush Industries for Environmental Defense Fund, with lower maintenance and energy costs. These electric vehicles will not only help save truckers and eets money, but also provide substantial health and welfare bene ts. The cost savings will overcome any added costs from charging infrastructure, and the lower upfront costs are largely driven by steeply decreasing battery costs, the study says. Although freight trucks and buses make up less than 10% of the vehicles on U.S. roads, they are responsible for almost 25% of all pollution from the transportation sector. They also emit more than 50% of the transportation sector NOx and particulate pollution. The EPA is expected to propose pollution standards for model year 2027 for medium and heavy-duty vehicles, and President Biden has directed the EPA to consider the role that zero- emitting vehicles can play in eliminating harmful pollution.
4 TECH PREDICTIONS THAT CAME TRUE From companies spending billions on cybersecurity to the cloud becoming the biggest thing in desktop applications, some of the top tech predictions from those in the know in various tech fields were proved right in 2021. Here are four trends that came true: 1. Natural Language Processing The branch of artificial intelligence that helps computers understand human speech and writing patterns, natural language processing was predicted to rise from the least funded subcategory in 2018 to the highest funded in 2021. While it didn’t get the top spot for all of 2021, it did get there for a short while in Q3 and managed to raise $5 billion throughout Q1 to Q4. 2. Special-Purpose Acquisition Companies (SPACs) SPACs saw a huge rise—double that of 2020—with more than 500 companies going public in this way, including Aurora Innovation, the $2-billion SPAC run by former Google and Tesla executives. They’re working to revolutionize the future of transportation with innovative self-driving technology. 3. Cybersecurity Due to the boom in work-at-home life, cyberattacks were rampant. Investing in cybersecurity training for employees, as well as top cybersecurity programs for all employee devices, is now imperative. The prediction of the surge in cybersecurity training was spot on, with a 53% increase from 2020. 4. The Cloud Using desktop apps like Word in the cloud is now the way of the world. This magic cloud has become the biggest thing in desktop applications, and according to Gartner, is expected to continue growing to reach $482 billion in 2022. In addition, more cybersecurity monitoring tools will also be moving to the cloud to become less prone to hacking.
Total Cost of Ownership per mile ($/mi)
$3.04
$3.00
$2.43
$2.50
$2.08 $2.07
$2.00
$1.85
$1.83
$1.58
$1.58
$1.50
$1.03
$0.92
$1.00
$0.80
$0.70
$0.68
$0.58
$0.50
$0.00
Source: Roush Industries for Environmental Defense Fund
22 Inbound Logistics • March 2022
TAKEAWAYS
• Expanding digital commerce and exploring international channels: 47% of U.S. trade among B2B small to mid-sized businesses is now through e-commerce, a nearly 12 percentage point jump in two years. • Digitized SMBs invest in growth: Digitized businesses are more likely than non-digitized businesses to make investments, including hiring more full-time employees (48% vs. 32%) and increasing capital expenditures (49% vs. 33%). • Digitized businesses are better equipped to go global: 39% of digitized businesses expect to grow exports in 2022, versus just 13% of those who rely on offline channels. • Digitized SMBs are significantly more confident about their future: 91% of digitized businesses are confident in the future of their business, compared to 80% of non-digitized businesses.
Digitized businesses report even higher levels of optimism than their offline peers, says a report from Alibaba.com, bolstered by stronger sales performance, larger anticipated investments, and more global exports. Key findings from the report reveal: • Digitized SMBs far outperformed businesses still operating offline in terms of sales and sourcing: 61% of digitized businesses saw increases in sales in 2021, compared to just 34% of those not online. Digital Businesses Look At the Bright Side
KNOWLEDGE Base S P O N S O R E D C O N T E N T
Take Control of Your Imports– Save Time and Money
Importers can mitigate supply chain disruption and the resulting escalation of costs by taking control of their shipments at origin and moving their goods more strategically.
T he impact on Americans from supply chain disruption is ubiquitous and, despite a few apparent regional improvements, likely to continue for some time. Whether it’s the shortage of drivers, trucks, containers, warehouse space, ocean carrier capacity, terminal capacity, air cargo service—it’s really affecting us all. Those who import have particular challenges as their cargo often arrives at congested terminals. In addition, importers often have no control over the routing or timing resulting in storage, demurrage, and/or detention charges. While ocean carriers, ports, airlines, and air terminals have reduced their allowed “free time,” congestion and domestic/inland transport shortages delay the pick-up from the terminals, increasing the cost of goods to the merchants and consumers. Taking the Reins Importers can combat/mitigate this escalation of costs by taking control of their shipments at origin and moving their goods more strategically. For instance: 1. Air shipments arriving on Friday evening or on Saturday will incur storage charges. Importers who ensure their air shipments arrive at the destination airport on Sunday through Thursday and see to it that they are picked up within 24 hours will avoid additional costs. 2. Routing ocean shipments to a seaport that is not congested, has plenty of chassis available, and
readily available drayage service will avoid delays and demurrage . It’s often better to have a longer dray from port to destination than to have containers sit offshore for days or, worse, on a pier awaiting pick-up and gathering demurrage. Setting the Terms The buyer/importer owns the goods and is paying for the inbound transport even when the cost of transport is included in the cost of the goods. Taking control of how the goods move may mean changing the terms of purchase from FOB, DAT,
In in ationary times, reducing transport costs becomes even more important and effective in reducing the cost of goods sold, and doing so takes some creativity and much effort. It takes requiring suppliers to change their procedures and it requires buyers to change the way they think about how they manage getting their goods to their distribution facilities. Yes, it’s quite challenging these days. Importers should discuss these transport issues with their customs broker and explore avenues to cost and time savings.
—By Robert J. Schott
CFR, or CIF to EXW or FCA. Such a change gives the buyer
control over the routing, enabling the buyer/importer to take U.S. port/airport circumstances into consideration and providing them the opportunity to avoid additional expenses at destination.
CEO AIRSCHOTT rjschott@airschott.com www.airschott.com 800-272-4688
AIRSCHOTT provides a full complement of customs brokerage, international air, rail, and motor-freight services. SEASCHOTT, its ocean freight division, is an ocean transport intermediary providing national and worldwide service from its headquarters in Baltimore. www.airschott.com
24 Inbound Logistics • March 2022
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