Inbound Logistics | June 2021

JUNE 2021

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BITE SIZED SUPPLY CHAIN / LOGISTICS INFORMATION Info SNACKS “The demand for supply chain talent is now roughly six times greater than the supply.” –– Joel Sutherland, Professor of Practice in Supply Chain Management, University of San Diego School of Business (See Winding a Way Through Supply Chain Education, page 60)

75,000 Number of employees Amazon plans to hire for fulfillment and logistics jobs—warehouse workers who pick and pack customer orders and drivers who transport them either to other Amazon facilities or to customers’ doorsteps. WORLD MAP IN A SNAP, SNAP, SNAP Managing your global supply chain could be a lot more fun with this as a sourcing reference. Lego has revealed its largest set ever—a giant world map that comes with 11,000 pieces. Once put together, the map measures two feet high and three feet wide.

Going Into Labor How do logistics executives plan to address current labor shortages? 40% of logistics executives are being more lenient on specific job/industry experience requirements to attract and retain labor/talent in a tight labor market. 54%

CAFFEINE RUSH Coca-Cola has teamed up with Walmart and drone flight services provider DroneUp to deliver its new Coca-Cola with Coffee and its zero- sugar variant to customers in Coffee County, Georgia. As part of a launch stunt, select customers who live in single-family residences within a one- mile radius of Coffee County’s Walmart Supercenter could have their coke- coffee fix delivered via drone.

Water Works Securing ocean capacity continues to be a concern to supply chain managers. “Anyone starting with the question, ‘Howmuch is this going to cost?’ should reassess and start with, ‘Do I need my cargo to move?’ If the cargo does not move, maybe for months, howmuch will you lose? That will give you an idea of howmuch you want to pay to move the cargo. It is a sad message for anyone on a budget, but it is the stark reality here.” —Logistics Rewired: Let’s Talk Ocean. Flexport webinar

plan to invest in workforce management technologies. 51% plan to invest in enhanced

Don’t MinedMe

Pandora Group will no longer use

mined diamonds. Instead, the world’s largest jewelry maker is launching its first collection created exclusively with diamonds manufactured in labs. The move aims to make the company’s jewelry more sustainable, affordable, and accessible.

workforce training procedures in the next 12 months. — The New Normal of Logistics survey, Blue Yonder

June 2021 • Inbound Logistics 1

CONTENTS JUNE 2021 | VOL. 41 | O. 6

34 DO WE STILL CARE ABOUT SUSTAINABILITY? As shippers move past the distractions posed by the pandemic, they’re brainstorming new ways to shrink their carbon footprints, eliminate waste, and make operations greener. 40 75 GREEN SUPPLY CHAIN PARTNERS Inbound Logistics editors select 75 companies going above and beyond to prioritize green initiatives and help global supply chains become more sustainable. 75

60 WINDING A WAY THROUGH SUPPLY CHAIN EDUCATION Three leading professors draw a map for recruiting and retaining top talent through advanced supply chain education as the pandemic reshapes roles and skill sets. 68 SPONSORED CHEMICAL LOGISTICS ON A ROLL Overcoming capacity constraints, severe weather, and cyberattacks, chemical logistics providers use their expertise and dedication to keep shipments rocking and rolling.

30 E-COMMERCE GROCERS DELIVER With more consumers ordering groceries online than ever before, retailers are hungry for fulfillment improvements and efficiencies as their plates fill up with temperature control and inventory challenges.

2 Inbound Logistics • June 2021

YOUR BUSINESS RUNS ON PROMISES KEPT.

At Old Dominion Freight Line, we know keeping promises to customers is at the heart of y we’ve been ranked the #1 national LTL carrier ery record and low claims rate. because it means everything to you. LEARN MORE AT ODFL.COM

OD PEOPLE

OD GLOBAL

OD TECHNOLOGY

CONTENTS JUNE 2021 | VOL. 41 | NO. 6

GOOD QUESTION How has the pandemic affected supply chain partnerships?

INPRACTICE 14 LEADERSHIP As the intermodal industry faces port congestion and equipment shortages, Mike Wilson, CEO of Consolidated Chassis Management, leads with empathy and an open mind, using the company’s interoperable model to enhance velocity and increase capacity.

INFOCUS 1 INFO SNACKS

U.S. offshore wind projects won’t be a breeze

16 VERTICAL FOCUS: ENERGY, OIL & GAS 18 NOTED 20 TAKEAWAYS 90 IN BRIEF 96 LAST MILE Barbecue supply chain sizzles INSIGHT 6 CHECKING IN EV power play 8 GOOD QUESTION How has the pandemic affected supply chain partnerships?

10 DIALOG 12 10 TIPS Improving cold chain operations 24 SPONSORED KNOWLEDGE BASE Five ways to position your supply chain for retail

compliance success 26 E-COMMERCE

Fixing manufacturers’ broken traditional selling processes 28 IT MATTERS Solving the global data dilemma

INFO 82 SUPPLY CHAIN INSIGHTS 84 WEB_CITE CITY 94 CALENDAR 95 RESOURCE CENTER

What are BBQ grill makers cooking up?

New airfreight arm links the Netherlands

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4 Inbound Logistics • June 2021

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EV Power Play

STAFF

PUBLISHER Keith G. Biondo

publisher@inboundlogistics.com

T he U.S. electric vehicle (EV) manufacturing sector is about to get a sales boost from the Biden Administration. The EV market has been rocking because of the continued growing interest in sustainability, especially now that the bleeding-edge vehicle phase is behind us. President Biden confirmed that EVs would get a stimulus in the not-yet-passed multi-trillion-dollar infrastructure legislation. Accordingly, in the Clean Energy for America bill, the Senate Finance Committee

EDITOR Felecia J. Stratton

editor@inboundlogistics.com

SENIOR EDITOR Katrina C. Arabe

karabe@inboundlogistics.com

CONTENT MANAGER Jaclyn Ix

jix@inboundlogistics.com

CONTRIBUTING EDITORS Merrill Douglas • Karen Kroll Helen Mann

CREATIVE DIRECTOR Jeof Vita

jvita@inboundlogistics.com

DESIGNER Ellen Swandiak

Keith Biondo, Publisher

ellen@inboundlogistics.com

Amy Palmisano apalmisano@inboundlogistics.com

DIGITAL DESIGN MANAGER

cleared new incentives for domestic manufacturers. The devil will be in the final details, which are still being worked out on Capitol Hill. If the bill passes and the President signs it, which is likely given his stated support for sustainability initiatives, tax credits to buyers per vehicle will increase substantially. At this point, the bill includes increasing the per- vehicle tax credit to $12,500; that includes semis and other EV delivery vehicles (think Amazon). Some of the details are interesting. Observers say the bill that cleared the Finance Committee takes a shot at stubbornly non-union Tesla by excluding the manufacturer from the maximum allowed tax credits. Others cheekily point out that Elon Musk has been on the naughty list for leaving California paradise for Texas as a Tesla tit-for-tat. Another example: It has been reported that federal tax incentives sunset for any manufacturer that produced more than 200,000 vehicles (Tesla). Some production limits will be removed, but the question is whether non-union manufacturers (Tesla and Volkswagen in Tennessee) will be dinged on that point. Politics is driving the production limit “adjustment” as the United Auto Workers (UAW) union usually gets political perks. The problem is that the 200,000 vehicle limit will soon hurt GM and Ford, both UAW members. Tesla grabbed 80% of the EV market in 2020, but GM is growing fast. The introduction of the amazingly engineered F-150 Lightning— which joins the F-150 pickup family and the best-selling vehicle in America and currently has 100,000 pre-orders—also creates a complication. Ford, GM, and the UAW may lobby for the removal of the 200,000 vehicle production cap entirely to qualify for federal tax credits. Some states will follow the federal lead and increase and/or extend their incentives. All that would be a good thing. The bottom line is that U.S. manufacturers and their penumbra of value chain partners, carriers, and logistics solutions providers will experience a boom given the public’s appetite for the new improved crop of EVs and the political machinations that are underway. Get ready if you play in that space or have transportation and logistics partners that do. n

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6 Inbound Logistics • June 2021

GOODQUESTION Readers Weigh In

How has the pandemic affected supply chain partnerships?

current challenges, while more importantly building capability for the “next normal” of tomorrow’s supply chain. —Mike Andaloro President & COO, BDP International SUPPLY CHAIN TURMOIL triggered by the pandemic has resulted in a massive acceleration in channel shift to e-commerce. Retailers collaborate across selling channels more than ever before, warehouses are becoming truly omnichannel, and advanced automation and robotics are enabling the required process capabilities. —John Seidl Consulting Partner, GreyOrange MARKET VOLATILITY caused firms with unreliable partners to evaluate alternative products, services, technologies, and strategies. Shippers gravitated toward firms that could meet service requirements, reshuffling partnerships as a result. —Oren Zaslansky Founder and CEO, Flock Freight DISRUPTION TESTED and proved or broke existing partnerships as shippers and their logistics providers adapted to either make it work, be innovative, be opportunistic, or drop it. Hard lessons have been learned and supply chains are being redesigned, rerouted, and de-risked as a result. Overall they will become more expensive as more optionality is built in. —Michael Zimmerman Partner, Americas Lead, Kearney

CUSTOMERS WERE FORCED to look at reshoring their supplies or taking a pareto approach—having some on shore and some off shore. Many have also started adopting a circular economy model to retain material and as many components as possible. —Colin Elkins Vice President, Manufacturing, IFS PARTNERSHIP DEVELOPMENT is a key capability supply chain leaders will have to leverage to create sustainable value. While the pandemic changed some of the partners, it did not change the concept of partnerships. —Melvin Bosso Principal, Myrtle Consulting Group (now a part of Accenture) LACK OF COLLABORATION between retailers and CPGs led to avoidable out of stocks. Alignment is essential to ensure supply chain disruptions don’t result in forecasts that can’t be accurately executed. Using AI-based collaboration tools, both retailers and CPGs can increase agility and improve inventory management. —Patty McDonald Global Solution Marketing Director Symphony RetailAI THE URGENCY around supplier risk and preparations to withstand the next disruption is changing the dynamic of supply chains. Organizations must innovate beyond the traditional, linear supply chain model and lean into a dynamic, collaborative supply network. —Tony Harris Global Vice President, Business Network Solutions, SAP

THE HEIGHTENED STAKES of keeping up with high demand and scarce labor urgently meant vendors had to condense their integration timelines. Supply chain partnerships that were in testing mode were pushed into full production. We went from practicing the 200-meter relay to running it in the Olympics. —Lior Elazary Co-founder and CEO, inVia Robotics THE DEGREE OF VULNERABILITY within the supply chain revealed by the pandemic forced us to revisit business models and redefine supply chain partnerships to ensure alliances evolve along with the organizations. Companies are looking at operational processes, enhanced digitization, and new customer demands. —Andy Frommenwiler VP Air Freight USA Dachser USA Air & Sea Logistics THE PANDEMIC redefined and reinvigorated partnerships. Collaborative supply chain partnerships allow firms to navigate

8 Inbound Logistics • June 2021

GOODQUESTION

WITH THE WIDE RANGE of disruptions, crises, and changes that unfolded quickly and unexpectedly, relying on partners has become more important than ever and critical to helping companies weather the storm.

Have a great answer to a good question? Be sure to participate next month. We want to know: What is the secret to a successful shipper/3PL partnership? We’ll publish some answers. Tell us at editorial@inboundlogistics.comor tweet us @ILMAGAZINE #ILGOODQUESTION Supply chain collaborations have increased rapidly. System providers and operators need to find ways to appease customers and meet rising e-commerce demand, which is difficult to do alone. Hence, there will be a substantial growth in collaborations where companies provide unique solutions to the supply chain machine rather than one giant solution to cover all. Users can then consequently tailor their operations more efficiently and personally, leading to better results. Industry 4.0 is about compatibility and the Internet of Things. The pandemic has just accelerated it. —Aldus von der Burg Founder & CEO Meili Robots Fluctuating production and consumer demand, coupled with labor and transportation capacity issues, have required more planning and preparation for many companies. Dramatic shifts in any of those variables have led many supply chain leaders to ask for help. Collaborating with partners on ideas that solve supply chain problems has been crucial to mitigating risk and keeping supply chains flowing throughout the pandemic. —Christina Ryan Executive Vice President, Managed Services Redwood Logistics The pandemic demonstrated supply chain partners need to collaborate better and with greater transparency . We all were forced back to the drawing board. We found success leveraging technology to improve efficiency by eliminating cost and complexity. —Todd Pigeon Chief Commercial Officer Sealand Americas COLLABORATE OR STAGNATE The pandemic magnified the need for collaborative partnerships between service providers and customers. We have seen things happening in the market you almost couldn’t make up in Hollywood, and those that have remained transparent and collaborative in navigating these challenges have succeeded. —Matt Friedman Vice President, Sales, Warehousing Mainfreight

—Brad Wright CEO, Chunker

IN CONVERSATIONS with both consumer brands and external suppliers, we’ve seen an increased focus on collaboration over transactional conversations based on cost efficiency, as well as an acceleration of technological adoption in order to facilitate that heightened level of collaboration. —Jason Tham, CEO, Nulogy MANAGING CONSTANT CHANGE with suppliers through brute force no longer works. The pandemic exposed that most companies have neglected the first mile of their supply chains for decades. To stay competitive, procurement and supply chain teams must embrace technology and innovation to modernize their supply chain partnerships. —Tom Kieley CEO, SourceDay COMPANIES ARE FOCUSING on the points where collaboration really matters and find practical solutions. Thirty-page consulting decks have been replaced with pragmatic, focused solutions for well-defined problems in visibility and pricing.

—Brian Glick CEO and Founder, Chain.io

THE PANDEMIC reinforced the importance of having partners you trust to cope with volatility and uncertainty while leveraging innovative technology and data insights to remain agile.

—Scott Sureddin CEO, DHL Supply Chain North America

EVERYONE IS RE-EVALUATING their supply chains with a stronger focus on aligning with the consumer. Distribution partnerships need to evolve with that change or they will be left behind. —Dan Waters VP Sales, North America, Made4net

June 2021 • Inbound Logistics 9

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

Fast TAKES

Re. Good Question: What fictional character or historical figure would you put in charge of global vaccine logistics and distribution? bit.ly/ILGoodQuestion_vaccine_lead

MUNCH On This

Strong e-commerce sales combined with recovering business-to-business (B2B) demand is driving more need for delivery services. The situation will likely constrain last-mile capacity further as B2B fully recovers throughout the year. It would not be a surprise to see UPS follow FedEx in

Dagny Taggart from Atlas Shrugged

—Reader Email

Lord Voldemort from the Harry Potter series

—Kerry L. Lohrman President, Sales Engineering System

raising its peak surcharges soon. To ensure last-mile capacity and on-time delivery, shippers need to

diversify their providers. Besides FedEx, UPS, and the USPS, shippers need to consider regional small-parcel carriers, crowd-sourced platforms, and alternative solutions such as lockers and third-party pickup locations. —John Haber Founder & CEO, Spend Management Experts, on FedEx increasing peak surcharges Version 1.0 of the MassRobotics autonomous mobile robot (AMR) interoperability standards will have a tremendous impact on the industry. The standards enable AMRs from multiple vendors to work together to support safe and efficient operations in factories, warehouses, distribution and fulfillment centers. This improved communication from AMRs to any existing technology will allow greater flexibility in these environments, speeding up the supply chain as a whole to maximize throughput. —Daniel Theobald CEO of Vecna Robotics and co-founder of MassRobotics, on the supply chain implica- tions of new AMR interoperability standards

Lunch bowl with IL ’s April feature, “Supply Chain Technology: The Age of Acceleration.” —Frank Mullens @FrankMullens

Re. Robots and People: Co-Evolving bit.ly/IL_checkingin_0521

ICING ON THE CONTENT CAKE Can online articles be assigned “classic” status? Whatever the answer, we consider this one bit.ly/3PL_Knot from IL way back in 2010 to be essential reading, covering exactly why we make the distinction between fulfillment part- ners and simple service providers. —Capacity LLC

Your May 2021 Checking In makes a point that people need to hear: Automation is not a 100% win. The irrational craze for self-driving trucks is better pursued as technology to help a human driver make decisions. And even in that, some of the “help” issues harsh and startling alerts to drivers, which is not consistent with safe driving. —Danny R. Schnautz Clark Freight Lines

10 Inbound Logistics • June 2021

10 TIPS

A wide range of factors can impact the transport of temperature-controlled goods. Here are 10 tips to help ensure smooth cold chain operations. Improving Cold Chain Operations

1 KNOW YOUR

operation. Passive systems may be less expensive, but could be higher risk if there’s a chance of delays while being transported through warm climates, or more labor intensive if they require pre- and post-conditioning. 6 CONSIDER THE TOTAL COST OF OWNERSHIP. Identify how both hard costs (packaging, freight bills) and soft costs (SKU management, training) contribute to your total cost, and the potential trade-offs in selecting one solution versus another. For example, buying cheaper packaging with less insulation capabilities may require the use of more frozen gel packs, making packages bulkier and heavier and more expensive to ship. 7 PICK EASY-TO-USE MONITORING SOLUTIONS. Companies increasingly use devices to track shipments and monitor time and temperature. Chemical strip indicators are simple to use,

inexpensive, and do not employ hazardous materials, such as lithium batteries, which may require additional packaging and labeling. 8 PLAY BY THE RULES. A wide range of regulations impacts how you pack, store, and ship temperature- controlled goods. Know which rules apply to what you’re shipping and take steps to ensure all stakeholders are properly trained and adhere THE UNEXPECTED. A lot can go wrong when shipping temperature- controlled goods, so consider all potential supply chain disruptions and associated costs. For example, if there’s a higher risk of a shipment getting held up in customs, you may want to use more expensive packaging that holds temperature longer or select a carrier that will re-ice a shipment if it is delayed. to these rules. 9 PLAN FOR

REQUIREMENTS. Temperature-controlled goods—whether food, vaccines, infectious substances, or other items—all have requirements that impact how they are packaged, stored, and shipped. Consider all your requirements for temperature ranges, packaging, transit time, tracking, and size and weight restr ictions.

2 UNDERSTAND EXACTLY WHAT YOU’RE SHIPPING. Consider the factors that can affect the type of solution needed to keep the entire shipment within the desired temperature range from origin to destination. What are the package dimensions? How much is being packed

4 IDENTIFY YOUR PAIN POINTS.

Do you have trouble keeping seasonal items cold during the summer? Is sourcing or disposing of packaging difficult? What could hold up a shipment in customs? Understanding your current pain points — as well as those that may arise — will help you select solutions that align with your service, financial, and performance goals. 5 SELECT THE RIGHT COOLING SYSTEMS. Determine if an active cooling system (e.g., a refrigerated truck) or a passive system (e.g., gel packs or dry ice) is best for your

per package? Is there a single package size or

multiple sizes? Knowing this information upfront will help you select optimal cold chain processes and solutions, and avoid problems later on. 3 CLEARLY DEFINE YOUR GOALS. Do you want to save money on packaging? Reduce shipping costs? Speed fulfillment? Knowing what you’re trying to accomplish — and how you’ll measure success — will help guide the selection of cooling systems, packaging, carriers, and more.

10 ALIGN WITH ORGANIZATIONAL GREEN INITIATIVES. Sustainabilit y continues to be an impor tant component in an organization’s decision-making, so make sure your cold chain operations align with your company’s sustainabilit y goals. This may require f inding alternatives to St yrofoam coolers or planning how to optimally return re-useable packaging.

SOURCE: JAY JOHNSON, SENIOR MANAGER OF LABELMASTER SERVICES, LABELMASTER

12 Inbound Logistics • June 2021

LEADERSHIP Conversations with the Captains of Industry

Navigating an Industry at the Crossroads

When Mike Wilson joined Consolidated Chassis Management (CCM) as its CEO in 2019, the chassis provision industry was in the midst of profound change. The Ocean Carrier Equipment Management Association had formed CCM in 2005 to operate a chassis pool, using equipment owned by the shipping lines. But in recent years, the lines have been selling off their equipment to third parties. By the time Wilson took the helm, CCM was competing against several other companies that own chassis fleets and operate pools. Currently, CCMmanages about 100,000 of the 550,000 marine chassis in the United States. To stay competitive, CCM has been reshaping its management structure and developing new markets for its services. Here’s how Wilson is leading CCM through this evolution.

Mike Wilson CEO, Consolidated Chassis Management

IL: What brought you to a career in ocean and intermodal transportation?

While pursuing my graduate degree in social work, I was working at a Division for Youth Service facility, and after a year I realized this career was not for me. My father, who had some experience in shipping, suggested that there were good opportunities in international shipping. Soon, I was accepted to a training program at United States Lines. During my first day at the Howland Hook Marine Terminal in Staten Island, I stood looking up at a ship and a huge crane, with trucks and workers all around. For a young guy, all that action and big machinery seemed very inviting. I was hooked immediately. IL: What’s one experience that shaped you as a leader? In 1983, U.S. Lines built the first Econship, the largest vessel ever to call the United States at that time. I was assigned to set up the operation in the Port of Savannah, which was going to be the first U.S. port of call. Working with the team to set up the yard cranes and tractors was a challenge, but it was a great chance to see what I could really do. IL: When you were appointed CEO of CCM, what were your main goals for the company? Because of the way the industry was changing, I wanted to assess the company’s core strengths and determine the key

In an industry currently challenged by port congestion and equipment shortages, Mike Wilson focuses Consolidated Chassis Management on technology and innovation, and leads with empathy and an open mind.

by Merrill Douglas

14 Inbound Logistics • June 2021

LEADERSHIP

Cultivating Talent

I also think it’s important to have empathy for others. Every job has dignity, and everyone has something to offer. We need to make opportunities for people to work, and to contribute to the success of the overall enterprise. IL: Who is a business leader you find particularly inspiring? While I was vice president of logistics and operations at shipping line Hambug Süd, I was lucky to work for Dr. Heino Schmidt. He had the perfect blend of personality, empathy, and skill. He was deeply intelligent, with a PhD in economics. But he was a down-to-earth guy. He showed me how to be an executive leader, and he gave me a lot of opportunity. He is now CFO of the Oetker Group. IL: How do you like to spend time outside of work? I love to be around my family, including my children and grandchildren. In April, my wife and I were lucky enough to spend four days with our son and two grandchildren at Disney World. My wife and I also have a little boat on Lake Hopatcong, New Jersey, where we enjoy the sun and do a little fishing. I’m on several ministries at my church, and I’m on the board of Samaritan Inn, an organization in Sussex County, New Jersey, that has had great success helping homeless families nw As a younger professional, when Mike Wilson needed to get a job done, he would create rigid job descriptions for the people who would do the work. But experience has taught him to rethink that strategy. “Tight structure squashes creativity and individuals’ ability to be their best,” he says. Today, Wilson prefers to find out what employees are good at and let them contribute accordingly. “If we look for ways to identify people’s true skill sets, see how those skills fit into the outcomes of the enterprise, and let people grow, that creates a broader and deeper success experience,” he says. It can also lead to some fortuitous surprises. Say, for example, an employee who works in equipment control expresses a desire to try marketing. Wilson probably wouldn’t have opened that door in the past, but he has seen that sort of gamble pay off extremely well. “You give somebody a shot at working in marketing, and all of a sudden that’s one of the best marketing people you’ve ever seen,” he says.

elements we could use going into the market. Our organization was obviously designed to manage chassis, and our two core pillars were our people and our technology. So first, I wanted to make sure we were performing to the best of our ability, with our people properly focused on those ideas and new service opportunities. We changed the reporting structure to make the business more decentralized and reorganized our technology approach to insource key aspects while maintaining our primary vendor relationships. IL: Once you’d attended to those basics, what came next? We started to identify opportunities to market our technology to other entities that could benefit from it. As a result, we created a new division, Consolidated Intermodal Technologies (CIT), and engaged with several customers. Companies that can take advantage of our technology include other leasing companies that track and maintain their equipment and bill their customers. Railroads that run their own chassis fleets are interested in our technology, as are some trucking companies with small to mid-sized fleets that are looking for ways to manage their chassis effectively while improving the enterprise overall. IL: What’s it like managing a chassis fleet in an era of acute port congestion and equipment shortages? With a 20% surge in container volume, no asset base— whether chassis or trucks or warehouses—can handle the need. The fixed asset base of our North American supply chain has been overwhelmed, strictly due to the influx of cargo. In times of stress, you have to find ways to do things better. That’s where innovation comes in. We’re using our interoperable model—where you can put any chassis under any box for any line or motor carrier at any facility in the network— to enhance fluidity and velocity. The faster you go, the more capacity you have. Our interoperable model has driven greater efficiency and it’s built on collaboration. IL: What qualities make you an effective CEO? I’m generally open-minded, and I believe that I should never engage unless I am truly informed. To lead, you need to create an environment where people have confidence in what you’re saying.

June 2021 • Inbound Logistics 15

Energy, Oil &Gas

MINERAL SUPPLY CHAIN IN CRITICAL CONDITION Prompted by the global chip shortage, President Biden signed an executive order for a 100-day reviewof supply chains for critical materials, including for semiconductors, large-capacity batteries, and rare-earth elements. The United States—which is 100%reliant on imported rare-earth elements—and itsWestern allies are behind, while China built its rare-earth supply chain decades ago, says a U.S. News report. China controls about 80%of theworld’s rare-earth production capacity, 43%of exports, and nearly 90%of refining, whichmeans theworld sells China low-value “TO REMAIN A LEADER IN THE ENERGY AND AUTOMOTIVE AREAS, THE UNITED STATES MUST SECURE ADEQUATE SUPPLIES OF THE METALS NECESSARY TO POWER THE 21st CENTURY’S INDUSTRIAL REVOLUTION.” — Brian Menell, Chairman and CEO, TechMet

OFFSHORE WIND PROJECT ISN’T A BREEZE

President Biden recently approved the Vineyard Wind project—the first major U.S. offshore wind farm—off the coast of Massachusetts. The project, which would generate up to 800 megawatts of electricity from 62 giant wind turbines, is expected to produce enough electricity to power 400,000 businesses and homes in New England by 2023, while reducing carbon emissions by more than 1.6 million tons per year. Boston-based General Electric will manufacture the massive Vineyard Wind turbines, which will send electricity along underwater cables to the regional power grid near Hyannis. Even though GE will manufacture the major components in Europe, as many as 2,000 workers will be employed locally during the project’s construction and dozens more will work in maintenance and operations after the wind farm is complete. Representatives of the fishing industry continue to criticize the Vineyard Wind project, claiming that the giant wind turbines will disrupt their fishing grounds and create navigational hazards to their boats, even though the plan calls for spacing them one mile apart. The decision to approve the Vineyard Wind project is an important milestone in the Biden administration’s effort to battle climate change by moving the nation’s energy policy away from fossil fuels and toward cleaner, renewable sources. The administration plans to install 30 gigawatts of offshore wind power capacity—the equivalent of more than 36 additional wind farms of Vineyard Wind’s size—in U.S. waters by 2030. More than 2,000 turbines will be needed to meet that target.

ore concentrate and China sells high-value end products. The United Statesmust make the supply of critical minerals a key part of its domestic and foreign policy to get in the game, the report says. Although there is strong opposition to these environmentally challengingmining practices, it is possible that U.S. companies canmine and process critical materials with much lower environmental impacts than China can, the report says.

OIL SPOUTS TO A TWO-YEAR HIGH Oil prices surged to $72 per barrel for the first time in two years in June 2021, exacerbating high transportation and shipping costs for businesses navigating rawmaterials shortages, crowded ports, and increased consumer demand. The trends in oil prices show:

• Brent , the global crude oil benchmark, sank below $20 per barrel in April as lockdowns dried up demand for airlines and manufacturers, but shot up to $71.48 per barrel in June, its highest since January 2020. • The deep freeze in Texas and the Colonial Pipeline cyberattack tightened the market for fuel, while increased demand and the fast pace of vaccinations in the United States boosted oil prices. • Up to 25% of tank trucks are parked around the country because there aren’t enough qualified drivers, a 15% increase

from the beginning of summer 2020, compounding fuel shortages and rising costs. • When demand for truck drivers sank during the pandemic, drivers sought other jobs, drying up the pipeline for new drivers once economies opened back up. • High oil prices partly stem from the Organization of the Petroleum Exporting Countries and its allies’ decision to continue to gradually restore supply. • As supplies increase and the global economy normalizes, demand and prices could ease.

16 Inbound Logistics • June 2021

VERTICALFOCUS

SHELLING OUT RENEWABLE DIESEL Royal Dutch Shell plans to cut down its refinery footprint and transform the facilities into energy and chemical parks that generate low-carbon fuels. To that end, the oil company sold its Mobile, Alabama, facility to refiner Vertex Energy for $75 million. Vertex will convert part of the facility to renewable diesel production, which will be able to produce 10,000 barrels of renewable diesel daily. Shell also sold its Puget Sound refinery ( pictured ) to refiner HollyFrontier for $350 million. The site is equipped to produce clean gasoline and diesel fuels, as well as fuel oil, propane, butane, and jet fuel. Both deals are pending regulatory clearance, with completion expected in Q4 of 2021.

JAPAN FUELS AN AMMONIA SUPPLY CHAIN Ammonia is used for fertilizer and industrial materials, but could it also be an effective future energy source? JERA, Japan’s largest power generator, thinks so. The company is working with manufacturers,

delivery of emissions-free ammonia as fuel for electricity generation in Japan, following an agreement with Malaysia-based Petronas to collaborate on ammonia and other energy projects. JERA is also planning a demonstration project to develop technology to co-fire ammonia and coal at a 1-gigawatt commercial coal- fired power plant. In an effort to expand its renewable power assets to 5 gigawatts by 2025, JERA and its partners Equinor and Electric Power Development submitted a bid for three offshore wind power projects in Northern Japan. JERA also began an environment assessment process for two offshore projects, one off Ishikari Bay in Hokkaido and another in Northern Japan.

shipping companies, and domestic electric utilities to build out a global supply chain for ammonia as a fuel. Ammonia does not emit carbon dioxide when burned, but production creates emissions if it is made with fossil fuel. JERA, a joint venture between Tokyo Electric Power and Chubu Electric Power, aims to achieve net zero emissions of carbon dioxide by 2050 as well as 20% use of ammonia at its coal-fired power plants by 2035. It signed a memorandum of understanding with Norwegian ammonia maker Yara for the

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June 2021 • Inbound Logistics 17 Follow us @Controlant on Twier and LinkedIn

NOTED [ IN FOCUS ]

The Supply Chain in Brief n Canadian National (CN) and Kansas City Southern entered into a definitive merger agreement. The combined rail company connects North America’s industrial corridor to create new options for shippers. n PayPal acquired Happy Returns , a California-based startup that allows online shoppers to make returns in person. n Multinational electronics company Panasonic acquired Blue Yonder , a digital fulfillment platform provider. n E2open , a provider of a cloud-based, end- to-end supply chain management platform, acquired BluJay Solutions , a cloud-based logistics execution platform. n Canada-based logistics technology company Descartes Systems Group acquired Portrix Logistics Software , a German provider of multimodal rate management solutions. m&a

> GOOD WORKS

Oversize air freight transportation provider Volga-Dnepr Airlines operated three charter flights to India from China, Ireland, and Germany to aid the nation during its COVID-19 crisis. Volga-Dnepr delivered more than 200 tons of medical equipment, including oxygen-storing and cryogenic containers, to various regions that experienced oxygen equipment shortages.

IAG Cargo and its sister company British Airways operated a relief flight to India, transporting 27 tons of medical aid. The carriers loaded a B777-200 with more than 1,000 items from the High Commission of India and charities, including oxygen cylinders, oxygen concentrators, respirators, and blood oxygen saturation monitors. British Airways is also donating care packages for families in need.

> SHOVEL READY

Averitt Express opened a new distribution and fulfillment center near Dallas, Texas, and its service center in Grand Prairie. The 400,000-square- foot facility handles domestic and international freight, and is equipped to accommodate growing international shipping needs in the region.

Third-party logistics provider Kenco Logistics is building, staffing, and managing a finished goods warehouse and distribution point in Salt Lake City for Oatly, a Swedish sustainable food company. Kenco will help Oatly achieve its sustainability goals, streamline operations, and meet consumer demand in North America.

> UP THE CHAIN

Blackline Cold Storage broke ground on a 298,000-square-foot cold storage facility at the Port of Houston. Its design incorporates flexibility for multiple

Final-mile platform OneRail appointed Bill Hancock to its board of advisors. Hancock brings nearly two decades of leadership experience, having served in executive leadership roles at Target Corporation, American Tire Distributors, and US Foods. Bridge Industrial hired David Aschenbrand as its new vice president of cold storage. Aschenbrand previously served as director at Lineage Logistics, where he oversaw the transportation and logistics division.

segregated temperature zones, including blast freezing capability, and up to 50 truck doors and rail connectivity to serve multiple customer requirements. The facility is set to open in 2022. GameStop is expanding its North American fulfillment network by leasing a 700,000-square-foot fulfillment center in York, Pennsylvania. Expected to be operational by the fourth quarter of 2021, the facility will support the company's e-commerce and fulfillment needs and expedite shipping across the East Coast.

18 Inbound Logistics • June 2021

NOTED

> SEALED DEALS

> RECOGNITION

• Ready-made cocktail maker Edmunds Cocktails selected logistics provider Johnston Logistics UK to store and supply its sustainable glass bottles. Johnston, which specializes in alcohol-focused logistics, helps store pallets of empty bottles before they are filled to streamline warehousing operations. • Cardinal Health selected FourKites to enhance tracking of medical equipment, pharmaceutical products, first-aid supplies, and personal protective equipment in transit to healthcare facilities. FourKites’ advanced tracking and analytics enable a fast, reliable experience for the pharmacies and hospitals that contract with Cardinal Health for critical supplies. • Titan Brands selected global software provider enVista and supply chain technology company Körber to meet increasing demand for direct- to-consumer fulfillment. To achieve an order-to-ship cycle within hours rather than days, Titan will leverage Körber’s warehouse management system, while enVista’s order management systemwill provide inventory visibility as well as shipment experience management.

• The University of Minnesota’s Center for Transportation Studies presented Deb DeLuca ( pictured ), executive director at Duluth Seaway Port Authority, with the 2021 Distinguished Service Award . The award honors a private-sector professional in the freight transportation and supply chain industry for leadership and mentorship. • Peak Technologies received the Supply Chain Solutions Partner of the Year award from Ivanti-Wavelink for exceptional performance in 2020. The award is based on total revenue for the year, product sales growth, and similar metrics. • J.B. Hunt Transport Services was named Walmart's 2020 Intermodal Carrier of the Year . Walmart bases the honor on a demonstrated commitment to customer service, effective communication, and service improvements. • Southwest Airlines Cargo was honored as the Airforwarders Association’s Domestic Airline of the Year for delivering outstanding service for its customers. The airline was ranked at the top of the list for its operational performance, service offerings, and overall value for air cargo customers. • Gartner named RateLinx , a logistics payment platform, in its Magic Quadrant for Real-Time Transportation Visibility Platforms for its TracLinx solution. Gartner bases its evaluation on completeness of vision and ability to execute. TracLinx is a multimodal, transportation platform that delivers real-time visibility into shipments, carriers, locations, and users.

> GREEN SEEDS

DB Schenker and Lufthansa Cargo completed the first carbon- neutral cargo flight connection in history from Frankfurt to Shanghai Pudong. Sustainable aviation fuel, which is produced mainly from

biomass waste such as used cooking oil, covered the fuel requirements. This conversion saves approximately 174 metric tons of conventional kerosene weekly. Dutch brewer Heineken plans to decarbonize its production by 30% by 2030 and its full value chain by 2040. Heineken beer is set to be transported from its brewery in Zoeterwoude to Moerdijk on an emission-free barge.

IKEA Canada plans to achieve 100% zero- emission deliveries by 2025. The home furnishings retailer partnered with logistics and last-mile delivery provider Second Closet, which will integrate zero- emission trucks into its fleet for IKEA home deliveries in Quebec, Ontario, and British Columbia.

June 2021 • Inbound Logistics 19

[ IN FOCUS ] Shaping the Future of the Global Supply Chain TAKEAWAYS

CISCO SNAGS TOP SUPPLY CHAIN SPOT Cisco Systems earned the number-one spot in Gartner’s ranking of the 2021 top 25 supply chains. The technology company’s agility and strength in environmental, social, and governance initiatives helped prioritize critical infrastructure for hospitals and vaccine research, Gartner says. Four new companies on this year’s list include Dell Technologies, Pfizer, General Mills, and Bristol Myers Squibb. Gartner determined this year’s companies based on three key qualities: purpose- driven operations focused on keeping society running during the pandemic and meaningful green initiatives; accelerated transformation; and achieving digital- first supply chains to enable a seamless

U.S. Reefer Load-to-Truck Ratio

2021

2020 2019

FTR

18 16 14 12 10

8 6 4 2

Jan

Feb

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customer experience. 1 Cisco Systems

Refrigerated Shipping Heats Up Demand for temperature-controlled shipping is expected to continue to grow as vaccination rates increase and people gather for summer picnics and barbeques, says a C.H. Robinson report. Foodservice refrigerated volumes are also bouncing back as restaurants reopen, the traveling public dines out, and festivals and large functions commence. High prices continue: The load-to-truck ratio (LTR), which indicates loads posted versus trucks posted, for key temperature-controlled markets such as Florida, California, and Texas have already hit record highs before the produce season’s peak weeks, suggesting high pricing will continue as demand outstrips supply. The national LTR in 2021 demonstrates the highest levels of imbalance in six years ( see chart ). Attracting drivers: The temperature-controlled truckload sector faces even greater challenges finding drivers for trucks than dry van, because it requires drivers to manage a refrigeration unit and the temperature of the trailer. Because capacity in the temperature-controlled market will not likely increase significantly, enhanced compensation strategies for drivers will be more successful for dry vans, the report says. Stay flexible: The tight truck market will likely impact capacity and pricing. Planning and flexibility are critical for supply chains this year. C.H. Robinson advises shippers to expect seasonal movement in truckload pricing, with the year-end bringing a higher cost per mile than today. Load-to-truck ratios (LTRs) represent the number of loads posted versus trucks posted on load boards. To determine LTR, the number of load posts is divided by the number of truck posts. The resulting number indicates the balance between spot market demand and capacity. When there are more loads posted, LTR rises. When there are more trucks posted, LTR dips. Changes in the ratio often signal impending changes in rates.

2 Colgate-Palmolive 3 Johnson & Johnson 4 Schneider Electric 5 Nestlé 6 Intel 7 PepsiCo 8 Walmart 9 L’Oréal 10 Alibaba 11 AbbVie 12 Nike 13 Inditex 14 Dell Technologies

15 HP Inc. 16 Lenovo 17 Diageo 18 Coca-Cola Company 19 British American Tobacco 20 BMW 21 Pfizer 22 Starbucks 23 General Mills 24 Bristol Myers Squibb 25 3M

20 Inbound Logistics • June 2021

TAKEAWAYS

adopt some form of wearable electronics by 2023, according to MHI research. MIT’s smart clothes are made of knitted conductive yarn. To make a garment, researchers develop its design in a computer program, knit it with an industrial machine, and then plug it into electronic pressure sensors that can detect the wearer’s movements. Typically, display materials are not compatible with textiles because they can’t withstand the warping that occurs when fabrics are worn and washed. Fudan’s design solves that problem by weaving conductive and luminescent fibers together with cotton into a fabric display. That produces a textile that can provide, for example, a touch-sensitive fabric keyboard that can withstand 100-plus laundry cycles. The researchers also say the textiles have a power supply and can harvest solar energy. Applications for Fudan’s textiles include using one’s sleeve to send text messages and follow GPS instructions. Researchers say they can produce the display textiles on a large scale at low cost and are already providing them to companies. They will start to hit the market in 2021 and no later than 2022, Fudan predicts.

Smart Clothes Hit the Rack Will warehouse workers suit up in electronic clothing? Possibly. MIT researchers released a line of smart clothes that can track physical movement, and Fudan University researchers in China unveiled state-of-the-art electronic textiles that can produce visual displays. This is all happening as wearable devices continue to streamline supply chain operations and provide critical feedback in real time. In fact, 70% of warehouse facilities will

asi_halfpgIL_0621_final_• 6/7/21 1:47 PM Page 1

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