Inbound Logistics | June 2024





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45 % of supply chain managers at small to mid-sized businesses cite inflation as their top concern 33 % are most worried about a recession

THE LONG AND THE SHORT OF IT The largest percentage of goods, by weight and value, move relatively short distances (less than 250 miles) in the United States. Approximately 73.7% of the weight and 55.4% of the value of goods moved less than 250 miles between origin and destination in 2023. In contrast, about 6.6% of the weight and 17.4% of the value of goods moved 1,000 miles or more in 2023. –U.S. Department of Transportation “The flagship went from being a giant store to a cellphone and the screen.” –Scott Lipesky, chief financial and operating officer, Abercrombie & Fitch

55 % of supply chain leaders are increasing their supply chain technology and innovation investments 88 % plan to spend more than $1 million 42 % plan to spend more than $10 million This investment includes solutions for improved supply chain resiliency and transparency as well as solutions for the ongoing workforce shortage. –MHI Annual Industry Report to be battery innovation and charger compatibility, customer adoption, and raw material availability/costs. –Xometry Automotive Manufacturing Industry Survey EVs LOSING POWER A whopping 84% of automotive industry professionals say that the current status of electric vehicle (EV) innovation is far from where the Biden Administration wants it to be in 2024. The Administration has invested heavily in the EV transition, but a majority of automotive companies are having trouble supplying manufacturing services, parts, and related materials. The top obstacles to EV production seem

–Software Advice global report

For companies that have rolled out Generative AI: 62% have reassessed their GenAI supply chain initiatives in the past 12 months and only 7% have completed deployment . There are two primary reasons: 1. Concern about, and lack of understanding of, the unique risks created by GenAI. 2. Implementation challenges, including a skills gap and maintaining data quality. –EY research

June 2024 • Inbound Logistics 1

CONTENTS JUNE 2024 | VOL. 44 | NO. 6


Our 50th state is an amazing retreat for tourists and a challenging location for shippers. Here’s how top logistics companies ensure smooth sailing (and air and ground transport) for cargo.

72 SPONSORED CHEMICAL LOGISTICS: FORMULATING SOLUTIONS OF SUBSTANCE In response to the challenges facing the chemical industry, companies are reacting with a willingness to look ahead and innovate.

FEATURES 28 CIRCULAR SUPPLY CHAINS GO ROUND AND ROUND Circular supply chains can be resilient and sustainable, and can help meet growing demand for environmentally friendly products. But, shifting from linear to circular supply chains requires intense research to determine how best to reuse many materials and returned goods, implement new technology and processes, and educate both suppliers and customers on circularity’s challenges and benefits. 35 G75: GREEN SUPPLY CHAIN PARTNERS From 3PLs to rail carriers, and from ports to trucks, Inbound Logistics recognizes 75 supply chain visionaries who have come full circle by demonstrating their commitment to sustainability every day in every way.

66 DEVELOPING THE SUPPLY CHAIN WORKFORCE OF THE FUTURE Educators reveal how they’re preparing future supply chain management practitioners—from the skills they’re developing to the courses they’re offering.

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What the experts are saying about tariff increases


INPRACTICE 10 LEADERSHIP John Moseley: Port Houston’s People Person As Port Houston’s chief commercial officer, John Moseley dreams big, champions diversity, relies on constant communication, and touts relationship management as his superpower.


CONTENT PARTNER 20 Selecting a Consolidation and Fulfillment Partner to Navigate a Tough Landscape Offered by Hub Group


GOOD QUESTION What grade would you give brands on how they handle reverse logistics?

United States continues to invest in clean energy


83 IT TOOLKIT Belcorp:

A Supply Chain with Beauty and Brains To optimize inventory and service levels within its complex supply chain, beauty company Belcorp partnered with demand and supply planning solutions provider ToolsGroup.


INSIGHT 4 CHECKING IN Supply chain managers run the company 6 GOOD QUESTION What grade would you give brands on how they handle reverse logistics? 8 10 TIPS De-risking your supply chain 22 FREIGHT OUTLOOK What can rail shippers expect? 24 IT MATTERS Are we ready for fully digital bills of lading? 26 SC RESILIENCY Supply chains stabilize, but risks are ahead 96 LAST MILE Lab-grown diamonds shine

EV innovation a challenge for automotive companies


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June 2024 • Inbound Logistics 3

CHECKINGIN Are Supply Chain Managers Running the Company?



S upply chain managers are playing a greater role in directing company operations and creating shared enterprise value as silos between suppliers and customers start to come down. Technology plays a part in opening those pathways because it cuts across company barriers. Third-party logistics (3PL) providers promise to do the same by cutting across inter-company barriers to discover shared value. Yet even with world-class technology and a logistics

EDITOR Felecia J. Stratton

SENIOR EDITOR Katrina C. Arabe Amy Roach


CONTRIBUTING EDITORS Merrill Douglas • Karen M. Kroll Rich Osborne


Keith Biondo, Publisher

DESIGNERS Nicole Estep Arlene So

partner’s expertise, many silos persist and value remains unmined. Given the current economic environment, companies need to tap that hidden value. That need is escalating the supply chain function to a CEO and board-level task— especially when combined with other non-traditional supply chain challenges. Here are 3 examples of supply chain managers being involved in areas outside their typical function. Labor. Not long ago, Toyota was forced to repeatedly halt production at a plant after local labor shortages stopped component supply. Some vendors cited employee turnover and a skills gap for stalling production and shorting Toyota material supply. “Employees are frequently leaving and we can no longer maintain the required production volume,” said one supplier. It’s not just material supply that must be wrangled in times of disruption. Sourcing skilled labor at vendors is now a supply chain concern. Finance. SC managers are assuming financial responsibilities. Liz Door, chief supply chain officer for Ford’s EVs, recently asked suppliers to cut the cost of what Ford sources from them. “We value our suppliers’ collaboration and asked them to share their ideas for cost reductions in what they sell Ford,” she said. “Everything is on the table. Consider this a call to action.” Demand slowdown creates other supply challenges. Some Chinese EV makers are taking almost one year to pay invoices, threatening supply and the overall relationship. SC managers must factor in cost cutting and slow payments in their vendor management functions. Company expansion. Related to the financial duties is the quest for cost savings needed to drive enterprise modernization and expansion. “To fuel growth and transform our manufacturing and distribution network, we must invest and further strengthen our supply chain,” said Dan Poland, Campbell’s chief supply chain officer. “By leveraging our best-in-class in-house capabilities, combined with the expertise of trusted manufacturing partners, we will continue to make the highest quality products, with a more agile, flexible, and cost- effective manufacturing network... to build our supply chain of the future.” In the past, labor, finance, and company expansion were not typically thought of as the province of supply chain managers. Now they have to be.

Amy Palmisano





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What Grade Would You Give Brands on Reverse Logistics Operations?

To-Do’s for Improvement • Have easy-to-follow return policies.

WHILE SOME BRANDS EXCEL in reverse logistics, there’s room for improvement. Prioritizing technology to streamline processes and elevate the customer experience can boost reverse logistics performance. –Mike Trudeau Executive Vice President, Business Development, Montway Auto Transport TRACKING, inventory management, and customer experience can be improved. Companies investing in artificial intelligence and robotics stand to achieve notable progress. –Vlad Kadurin Chief Product and Operations Officer, Ship.Cars MAJOR LEADERS LIKE AMAZON skew the average upwards. However, I see refurbishment and repairs as needing more attention. Many large companies make repairing damaged products an unnecessarily expensive and long process. –Bryan Gerber Founder and CEO, Hara Supply BRANDS NEED TO FOCUS on optimizing return processes, implementing better tracking and communications systems as well as finding innovative ways to recycle return items to minimize environmental impact. –Mary Goodwin Account Associate, 4D Supply Chain Consulting Inc.

• Invest in technology to track and process returned products. • Explore ways to reduce the need for returns, like improving product quality, providing accurate product information, and offering customization options. • Leverage insights from returns to improve product design, marketing, and customer service . –Gene Welsh Chief Transportation Officer, MODE Global

TECHNOLOGIES INCLUDING INTERNET OF THINGS, artificial intelligence, and machine learning analytics can be used to reduce chaos and enhance the circular economy. There’s room for improving key aspects such as returns processing, remanufacturing/refurbishment, packaging, and recycling.

SOME BRANDS HAVE MATURE REVERSE LOGISTICS processes and some have a lot of room for growth. They’re recognizing the need to optimize reverse logistics with greater urgency as the costs to run a business shift in this macro economy, creating greater pressure to increase margins. –Kristen Kelly VP of Product, Loop Returns STREAMLINING RETURN AUTHORIZATIONS and offering eco-friendly disposal options could further enhance customer satisfaction and reduce environmental impact. –Siddharth Priyesh Vice President & Head, Americas & Caribbean, CrimsonLogic

–Shamini Martin Vice President, Marketing, Trigent Software

BRANDS ARE MAKING STRIDES in integrating customer-centric return processes. The next step is to enhance logistics networks for faster, more sustainable reverse flows, ensuring products are repurposed or recycled efficiently. –Dennis Moon COO, Roadie

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A SIGNIFICANT CHALLENGE REMAINS: the slow processing of returned inventory that sits in the warehouse—tying up capital. These items must be inspected and made available for resale much more quickly. –Troy Graham

High to Low Marks I would give a range of grades from A to F for how brands are handling reverse logistics. There is still a

lot of variation in this area—from consumer spending to B2B direct spend. A stellar reverse logistics program can lower the bar to buy. It’s so much easier to make a purchase decision when you know you can send the product back if needed, with no hassle. This is an area for improvement. –Doug DeLuca Product Marketing Manager, SAP Business Network, SAP

VP of Customer Success, Descartes Systems Group

discounts, or destroying items entirely. Using a warehouse management system to drive the returns process supports a well-managed reverse logistics system. –Eric Allais President & CEO, PathGuide Technologies, Inc. REVERSE LOGISTICS OPERATIONS have been left largely unchanged for decades. Manual, paper-centric processes lead to a lack of visibility and accountability. Brands need to implement technology and automation into their operations. –Jon Ward Senior Director, GM, Elite EXTRA, an Epicor solution WITH AN OVERALL RETURN RATE of nearly 18%, revenue is significantly impacted by returns. Consumers demand convenience, free returns, instant exchanges, lenient return policies, and consistency. Providing all this comes with a high price, but it’s worth it to improve customer satisfaction.

development? Defects in the product? Marketing that made customers think they were getting something different? Each returned item is a lesson. –Josh Dunham CEO, Reveel BRANDS SHOULD VENTURE to porch returns, restaurants, airports, and spaces with heavy foot traffic, looking beyond traditional parcel posts and kiosks. When it comes to quick fashion sustainability, they should consider how to salvage excess in a better way and embrace virtual try-on technology to reduce returns. –Ann Marie Jonkman Vice President, Global Industry Strategy, Blue Yonder

RETURNS-TO-SALES RATIO remains steady. Focusing on reducing returns is crucial. Other opportunities include fraud prevention and sustainable disposal in the reverse supply chain. –Tara Buchler

Vice President, Product Management, e2open

CONFUSING POLICIES and clunky processes frustrate customers. Tech could improve tracking, speed, and data. –Roslyn Ellerbee Founder & CEO, Express Errands & Courier BRANDS OFTEN OVERSIMPLIFY or neglect reverse logistics to focus on outbound logistics. To improve, they should set up processes to categorize and classify returns, create clear business rules for handling items (resale, refurbish, recycle, or dispose), and work with a reliable 3PL provider. –Dave Tu President, DCL Logistics

SOME MATURE GLOBAL SUPPLY CHAINS have been using reverse logistics to find backhaul revenue opportunities and minimize the movement of empty trucks. By and large, companies are only beginning to think about how to optimize reverse logistics, and this will be strategic to sustainability in our new circular economy.

–Jason Minghini Senior Vice President, Operations, Kenco

MANY DEFAULT to writing off returned goods as a loss without ever learning from it. Are there patterns that can inform future product

–Matthew Bunce Senior Engagement Principal, Aera Technology

Answer upcoming Good Questions at: We’ll feature some responses.

BELOW SATISFACTORY. Brands struggle with reverse logistics by either mixing returned items with new inventory, reselling products at vast

June 2024 • Inbound Logistics 7


The supply chain can be impacted by everything from weather to infrastructure, so creating diversified, resilient networks has become essential. Here’s how to navigate uncertainties, enhance flexibility, and fortify supply networks against disruptions. De-risking Your Supply Chain

enable you to think about your provider mix differently. Maybe you can take a risk on a new provider in a market where you have more established providers in the portfolio. De-risking doesn’t

ASSETS AND SUPPLIERS. The impact and disruptions from the pandemic taught us just how critical it is to develop a more resilient supply chain. The endeavor of maximizing resiliency goes hand in hand with minimizing exposure to risk. In most cases, lowering that exposure means not having all your eggs in one basket. Diversifying both physical and provider networks is becoming a necessity throughout the import supply chain. Look for single points of failure and determine if and how you can diversify.

mean not taking risks. 8 DETERMINE THE TRUE COST.

Look at the full cost of the opportunity. Opening up a new import warehouse may create an additional warehousing expense but transportation expenses, inventory carrying costs, or even an increase in sales due to speed to market can easily offset the initial expense. 9 ENSURE PROVIDER FLEXIBILITY. Core to de-risking the supply chain is to be careful to not enlist too many critical services from one provider. However, when selecting providers, additional opportunities should be identified—and potentially included in the contract—in the event you need those services.

2 FOCUS ON ADDING For many companies, the question isn’t what to do but what not to do. What is your team uniquely positioned to address and respond to effectively? And where can you find partners that are VALUE, NOT CREATING IT. equipped to extend your impact without pushing the constraints you operate within at your company? 3 CONSIDER CAPITAL VS. EXPENSE DOLLARS. Many companies are being challenged to do more with the same or fewer resources than before. When evaluating new initiatives, consider the allocation of your capital resources and weigh the potential efficacy of an investment in both technology and personnel against the possibility of leveraging outsourced providers to augment your team’s capabilities.

4 ACCELERATE DATA AGGREGATION. Data storage and aggregation is becoming less expensive with the burgeoning availability of cloud storage and its inherent ease of data transfer. Put together a strategy for your company’s data aggregation that prioritizes the seamless integration of providers and systems into a flexible environment that is not costly to change. 5 KEEP RESILIENCY EFFORTS ONGOING. Don’t forget that as you create a more resilient network, you then need to manage a more diverse

network. Don’t overlook the recurring effort and

personnel resources it takes to maintain and improve after implementing your strategy. 6 PUT ACTIONABLE METRICS IN PLACE. As you diversify your network, you need to then establish meaningful metrics and a recurring cadence for reviews with your providers. Keep in mind that if your highest- scoring provider isn’t your best provider, your metrics are off. 7 PAY ATTENTION TO PROVIDER SOLVENCY. As you begin to de-risk and diversify your network, it will


CORE SOLUTIONS. When selecting a provider for one of your core solutions, make sure it is a core solution for the provider as well. Companies today are shifting strategy and focus, which can be impactful to you. Make sure you are aligned.


8 Inbound Logistics • June 2024


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LEADERSHIP Conversations with the Captains of Industry

Port Houston’s People Person

As a high school student, John Moseley started to dream of a career with global scope. “My dad was in the foreign service, and I went to the American School in Islamabad, Pakistan,” says Moseley, chief commercial officer at Port Houston. His best friend came from Nigeria, and Moseley also hung out with friends from Pakistan, the Czech Republic, Hungary, and South Korea. “I knew I wanted a career that took me to faraway places and international cultures,” he says. Moseley first imagined himself as chief marketing officer at a big, international firm. But life had other plans, nudging him into the world of ocean transportation. He has worked for cargo owners and shipping lines, provided third-party transportation services, and held several roles in trade development at Port Houston before he assumed his current role in 2018. We talked with Moseley about how his career took shape and what keeps him busy and enthusiastic these days. IL: How did you find your way into ocean transportation? I studied international business administration at California State University, Los Angeles. In my junior year, I took a paid internship at a customs brokerage. Eventually, that turned into a full time job. While handling Japanese imports, I was invited to attend the grand opening of Mitsui O.S.K. Lines’ new terminal in Los Angeles. I met some people there who impressed me, and they offered me a position. I started working for ocean carriers in 1988, and I haven’t looked back. IL: When you joined Port Houston in 2010, what was it like to make the transition from port user to owner? Working for a port kept me close to the international side of the business, and to the water and ships. Helping the port grow and creating value has been a great way to cap my career. Port Houston was especially appealing to me because, unlike the typical port authority, we’re not just a landlord; we’re a terminal operating port. Working directly with beneficial cargo owners, ocean carriers, and freight forwarders has kept me in the game. IL: What’s an important lesson you learned early on that has helped to shape you as a leader? As an intern, and then as a person in the lower ranks, I learned how important other people were to my career.

John Moseley Chief Commercial Officer Port Houston

John Moseley dreams big, champions diversity, relies on constant communication, and touts relationship management as his superpower.

by Merrill Douglas

10 Inbound Logistics • June 2024


IL: How would you describe your leadership style? It’s servant leadership, inclusive, and opportunity-driven. I don’t claim to be the smartest guy in the room. I rely on all the smart, hard working people around me, and my role is to make sure they have the resources they need. I also consider myself a champion for diversity in the workplace. Diversity of perspectives, of opinions, comes from having people with diverse backgrounds and life experiences. I come from a diverse background myself. I think that sort of variety creates strength in an organization. IL: What qualities do you look for in people who report to you? Work ethic, honesty, and integrity are at the top of the list. We can always learn new skills, but some qualities are innate to a person. I also value the ability to communicate with others. IL: What advice would you give to your 18-year-old self? Don’t be afraid to dream big. Anything’s possible. I never shied away from anything back then, but maybe I’d tell myself to focus more on school work. IL: Outside of work, how do you like to spend your time? Mostly I like to spend time with my family, doing whatever they’re doing. That could mean going on a trip, or just watching a movie together. I’m a people person, and I love to be with friends and family all the time.  n Be Prepared Attacks on shipping in the Red Sea, drought in the Panama Canal, a pandemic—there’s no shortage of emergencies that can disrupt a port’s operations. “It’s important to always be ready to mitigate the risk of these bumps we experience,” John Moseley says. Case in point: the pandemic. “Port Houston was the first U.S. port to report someone sick with COVID-19,” Moseley says. “Having to respond to that while keeping our business moving, doing our part to feed, clothe, and supply the regional population, was huge.” Port Houston’s operations affect 20% of Texas’s gross domestic product, so keeping cargo moving in and out, and keeping factories supplied with materials they needed, was crucial. “We had to get creative, rolling up our sleeves and working some late nights when necessary, putting in protocols to keep our people safe and working,” Moseley says. It’s also crucial to prepare in advance, financially and operationally, for any number of potential disruptions, Moseley says. Luckily, Houston has had lots of experience to draw upon. “We’re used to disasters here, such as hurricanes,” he says. “We don’t spook easily in Texas.”

It was always people who made me feel good or bad, who provided opportunities and mentored me. You can’t be successful without other people. That has been a valuable lesson, and I’ve always tried to give back. Helping younger folks—providing guidance, mentoring, and suggestions—has been a tremendous source of pleasure throughout my life. IL: Since you became CCO at Port Houston, what have been your most important initiatives? Moving us up to become the number 5 container port in the country was huge. Working on communications and messaging for stakeholders was new to me and very important, as was creating communications for finance packages to support the expansion of the Houston Ship Channel. The foreign trade zone is another big one. And then there are the economic development initiatives. The real estate piece of my responsibility has been a lot of fun; it is one of the cornerstones of my role during the past five years. IL: Which of your current responsibilities do you find most exciting? Developing our intermodal product is a big, fun project. I also enjoy leveraging our real estate to prepare for the kind of capacity we’ll need in the future. IL: Which aspect of your job is the most fun? It’s the interaction with people. I like to be outside, engaging with people, doing new things. I’m all about putting people together to find successful outcomes. I’d say relationship management is my super power. IL: If we followed you around at work during a typical week, what would we see you doing? You’d see me on my phone and going in and out of meetings. I constantly communicate with people through all sorts of channels. I like to get a quick answer and keep things moving, and I treat other people the same way. Sometimes I need a little help being that responsive, but fortunately I have a team that helps me manage things.

June 2024 • Inbound Logistics 11


The Supply Chain in Brief



• Arvato has taken over logistics and

fulfillment for Tonies , the manufacturer and supplier of the Toniebox and accompanying figurines. The logistics campus in Guetersloh (Germany) and the East Midlands Gateway (UK) will act as central distribution centers.

• Premier Trailer Leasing launched a new human trafficking awareness campaign that addresses the signs of human trafficking and how to report it. • Carolina Handling is celebrating its 58th anniversary in 2024 with a yearlong campaign entitled “Handling Hunger Together” to assist neighboring hunger-relief organizations. The company is giving away 58 motorized pallet jacks to hunger-relief organizations throughout its five-state territory.

• Supply chain resilience company signed a $28-million, five-year agreement with the Secretary of the Air Force to bolster due diligence efforts across the Department of Defense . The DoD and 23 other federal agencies use the Craft platform to conduct due diligence and foreign influence checks on companies that aim to do business with the federal government. • WSI was selected as the operator of Canadian Pacific Kansas City’s Zacha Transload Terminal in Dallas. With 50 acres of outdoor storage, the terminal features capacity for transloading and storing materials such as steel, lumber, plastics, aggregates, food, and other agricultural products. • Ruan entered a new partnership with the Idaho State Liquor Division for dedicated contract transportation for liquor products distribution. • To support its growth within mass retailers such as Costco, Target, TJMaxx, and Walmart, E&C’s Snacks forged a strategic partnership with ODW Logistics . In addition to being an E&C’s Snacks transportation partner, ODW now manages the brand’s inventory out of its Romeoville, Illinois warehouse.


n Descartes Systems Group acquired Aerospace Software Developments , a provider of customs and regulatory compliance solutions. n Cin7 acquired Inventoro , a provider of AI-driven sales forecasting and replenishment optimization solutions.

12 Inbound Logistics • June 2024




•Averitt was named Trane Technologies’ Logistics Supplier of the Year for delivering differentiated value for Trane customers.

AGX Freight , a full-service transportation and logistics platform, appointed Carson Mendez as its new director of brokerage operations.

DHL Group announced a leadership transition in DHL Supply Chain North America . Patrick Kelleher , current global chief development

• CPC Logistics truck driver Stuart Shuck , who is assigned to drive for John Deere in Davenport, Iowa, has been inducted into the National Private Truck Council Driver Hall of

officer ( left ), will assume the role of North America CEO effective July 1, 2024. This follows the retirement of Scott Sureddin ( right ), which takes effect on December 31, 2024.

Fame . Shuck was honored for demonstrating excellence on the highway, in his company, and in his community.

Kurt Milburn was promoted to chief supply chain officer for Papa John’s International , succeeding Shane Hutchins, who will retire after 26 years at the pizza chain. Milburn joined Papa John’s in 2022 as vice president of supply chain operations.

• Leslie Ajlouny , chief marketing officer for Evans Distribution Systems, was recognized with the International Warehouse Logistics Association’s (IWLA) Pinnacle Award , which

Monogram Foods appointed Larry Elliott as executive vice president and chief supply chain officer. Elliott oversees Monogram’s corporate operations functions, including logistics and customer service.

acknowledges individuals whose contributions have significantly increased the value of IWLA membership.

• Schneider National was recognized as a 2024 Military Friendly Employer and a Military Spouse Friendly Employer for its outstanding work recruiting, hiring, and retaining military veterans.

CN appointed Remi G. Lalonde as executive vice president and chief commercial officer. He succeeds Doug MacDonald, who will retire following a 35-year career with the railroad.

Crowley named Phil Shook as senior vice president and general manager of Land Transportation Services, a newly created business unit. Shook is responsible for all land-based transportation, including brokerage solutions, intermodal services, trucking, and managed transportation.

• Roadrunner earned the 2023 Platinum LTL Carrier Award from Echo Global Logistics for outstanding service, commitment, and performance.

• Groendyke Transport won its record ninth National Tank Truck Carriers North American Safety Champion Award. Also known as the Heil Trophy, this award is given each year to the tank truck carrier with the best overall safety record and program in its division.

End-to-end fresh meals platform FreshRealm appointed Stacey Wallace as its chief supply chain officer to oversee supply chain, planning, and fulfillment functions. She joins FreshRealm from Redbubble Group, where she served as chief supply chain officer.

June 2024 • Inbound Logistics 13


EV BATTERY INVESTMENTS CHARGE AHEAD The global push toward a sustainable future has ignited an unprecedented surge in battery investments. This rapid growth has introduced new challenges, however, particularly impacting the stability of the battery supply chain. “Global efforts to combat climate change are driving a surge in battery investments with the aim to de-risk supply chains that are historically highly concentrated in Asia, particularly China,” says Mirko Woitzik, global director of intelligence solutions at Everstream Analytics, which monitors global investments in battery facilities. Sustainability concerns have prompted a boost in localization efforts for battery production in an attempt to strengthen the resilience of supply chains, most notably for the automotive sector. Since 2021, the United States has invested more in new battery production plants than any other country, with China following far behind. This trend is expected to continue. Everstream’s projections show that North America will keep investing in new battery production plants at a higher rate than any other region until 2030. Europe is also on track to exceed Asia’s investments in new plants by 2030. U.S. automakers such as Ford, which currently leads the way in global investments in battery plants by companies worldwide, are driving this growth. Other U.S. and European automakers, including General Motors, Volkswagen, and Mercedes-Benz, are also investing in new battery plants at unprecedented rates. These investments prompt Everstream to project significant shifts in global battery procurement, diffusing concentration of activities and, in turn, increasing resilience to external shocks in certain parts of the world.

Here are the top five energy sources in the United States that keep the lights on and wheels turning. 1. Petroleum (crude oil and natural gas liquids). Petroleum makes up 36% of the U.S. energy mix. Concerns about environmental impact and dependence on foreign oil, however, are driving efforts toward cleaner alternatives. 2. Natural gas. This clean-burning fossil fuel makes up 33% of U.S. energy consumption. Natural gas is a popular choice for heating homes and businesses due to its efficiency and lower emissions compared to coal, but the extraction process (fracking) raises environmental concerns. 3. Renewables. Wind, solar, hydroelectric, biomass, and geothermal sources are collectively making a significant push, currently contributing 13% of U.S. energy. 4. Coal. Coal has seen its share decline to 10% in recent years. While it remains a relatively cheap and abundant resource, concerns about air pollution and greenhouse gas emissions are leading to a shift away from coal-fired power plants. 5. Nuclear power. Providing a reliable source of baseload electricity, nuclear power plants account for 8% of U.S. energy consumption. Concerns about safety and nuclear waste disposal continue to be debated. POWERING THE NATION Around 40% to 60% of a manufacturing company’s energy and carbon footprint can reside upstream in its supply chain—from raw materials, transport, and packaging to manufacturing processes—but this number can be as high as 80% for some sectors. —U.S. Department of Energy

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U.S. INVESTS IN CLEAN ENERGY, DOMESTIC BIOFUELS The U.S. Department of Agriculture (USDA) will fund more than 700 clean energy projects to lower energy bills, expand access to domestic biofuels, and create jobs and new market opportunities for U.S. farmers, ranchers, and agricultural producers. President Biden’s Inflation Reduction Act funds many of these projects. In all, USDA is providing $238 million in funding through the Rural Energy for America Program (REAP) and the Higher Blends Infrastructure Incentive Program (HBIIP). The REAP program helps agricultural producers and rural small business owners expand their use of wind, solar, geothermal, and small hydropower energy and make energy efficiency improvements. USDA has invested more than $2 billion through REAP to support renewable energy and energy efficiency improvements that will help rural business owners lower energy costs, generate new income, and strengthen their resiliency of operations. HBIIP provides grants to fueling station and distribution facility owners, including marine, rail, and home heating oil facilities, to help expand access to domestic biofuels, a clean and affordable source of energy. These investments help business owners install and upgrade infrastructure such as fuel pumps, dispensers, and storage tanks. USDA has invested approximately $135 million to increase access to biofuels at fueling stations. In June 2023, USDA made $450 million available in Inflation Reduction Act funding through the HBIIP to expand the use and availability of higher-blend biofuels.

A shuttered nuclear power plant in Southwest Michigan will resume operations in 2025 after federal energy officials offered more than $1.5 billion in financing for the project. The Palisades Nuclear Plant, an 800-megawatt generating station located along the coast of Lake Michigan, halted operations nearly two years ago after more than five decades. The plant was reportedly set to be dismantled entirely, but under a proposed loan offer from the Department of Energy’s Loan Programs Office, Holtec Palisades would restore the complex and return it to service by late 2025. If approved by federal nuclear regulators, the revamped plant would be able to produce power until at least 2051. D O E TO RESTORE NUCLEAR PLANT "The recent attacks by Iran on Israel highlight the fragile nature of international trade, particularly within a region that plays a critical role in the provisioning of the world's oil. Companies must bolster their risk management strategies, incorporating comprehensive contingency plans that ensure flexibility and adaptability in the face of geopolitical instabilities. By fostering robustness in their supply chains, businesses can better navigate the complexities of today's global market dynamics, maintaining operational continuity even as geopolitical tensions pose ongoing challenges.” —Vitaliano Tobruk, Supplier Risk Management–Industry Practice Lead, Moody’s

DHL Group is expanding its charging infrastructure for electric trucks, thanks to a partnership with energy provider E.ON. The contract calls for E.ON to establish fast- charging infrastructure at DHL Group distribution centers. DHL service partners will also have access to the new charging infrastructure.

June 2024 • Inbound Logistics 15

TAKEAWAYS Shaping the Future of the Global Supply Chain

NEW EXEC MUST-HAVE: GenAI Training Continuing to create buzz across the supply chain sector, generative artificial intelligence (GenAI) is at the top of the priority list for most companies today. A new Accenture survey shows 87% of C-suite executives responsible for supply chain and production plan to invest more in GenAI. And 85% expect to reap the returns of their generative AI investments already in 2024. But the survey shows these executives also recognize they need to better understand the technology and its potential, and they need widespread GenAI training across their organizations . Only 15% are highly confident they currently have the right data strategy and digital capabilities to use generative AI effectively. Other interesting takeaways on GenAI training perceptions: • 74% of respondents feel they need at least some level of training in GenAI. • 18% recognize the necessity for extensive training in this area. • 42% claim to be personally using GenAI tools at least once per week, down from 71% just six months ago. • 54% believe their organization requires intermediate-level training in the technology, such as prompt engineering and model fine-tuning. • 40% think the most crucial need

EQUIPMENT AND PAY WILL MAKE DRIVERS STAY Despite signs of improvement in the freight market, carriers and drivers continue to grapple with the lingering effects of the freight recession. Competition for drivers is intensifying, leading to a rise in driver turnover as evidenced by an increase in CDL driver job postings and truck driver job seekers. This is the key message from the Q1 2024 Driver Recruiting & Retention Data Download Report, compiled by Conversion Interactive Agency and People. Data. Analytics. (PDA). “It’s crucial for carriers to reassess their recruitment and retention strategies,” says Kelley Walkup, president and CEO of Conversion Interactive Agency. “Several Q1 data points indicate that driver demand is increasing. With many carriers seeing improvement in freight volumes, now is the time to review the driver pipeline and be ready for the rebound.” The Q1 data highlights equipment and compensation as drivers’ top concerns and the main reason drivers voluntarily decide to leave their carrier. However, there was a notable shift in compensation issues, with fewer drivers attributing pay problems solely to miles. Here’s a closer look at what the data indicates: • Driver messaging is important for recruiting and retention. “Amidst evolving trends in driver pay and competition dynamics, it’s imperative for carriers to deliver accurate equipment and pay messaging in their recruitment marketing,” notes Walkup. The Q1 data shows “pay” and “equipment” were top keywords from online driver reviews last quarter. • Today’s drivers also emphasize the need for predictable pay in the current freight market. “Implementing strategies to maintain consistent movement for drivers and ensuring their expectations are aligned appropriately are crucial steps in addressing pay- related concerns,” says Scott Dismuke, vice president of operations at PDA. “Ultimately, the significance of a higher pay rate diminishes if drivers are not consistently logging miles.” • Compensation concerns go beyond mileage. Q1 2024 marked the first time in five quarters that fewer than half of drivers surveyed attributed their compensation woes to miles. “Compensation became the top worry for drivers for the first time since late 2022. Fewer drivers are talking about miles, while more are talking about pay rate,” Dismuke added. “There has been a 3% drop in issues related to miles. This suggests a significant change in driver priorities, as compensation concerns now take precedence over the traditional focus on miles driven.”

is advanced training, such as developing GenAI models and applications.

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MANUFACTURING OPTIMISM REBOUNDS The manufacturing sector is feeling upbeat again, reporting the highest levels of optimism since June 2021, according to the latest Sikich Industry Pulse Report. The manufacturing executives surveyed rate their optimism an average of 7.07 on a scale of 1 to 10 , the highest rating in the past three years. ( See Rating Executive Optimism chart .) Contributing factors include an increase in customer demand and a decrease in labor challenges. Respondents also cite supply chain improvements and favorable economic conditions as reasons for increased optimism. The survey also asked executives to determine which factors represent the greatest challenges to their business in the upcoming year. Labor shortages/ increased labor costs (31%) continue to be a top issue. ( See Top Challenges for 2024 chart. ) Despite these challenges, business leaders are still prioritizing growth but doing so conservatively. They report being focused on existing products in current markets, with market penetration (40%) as their primary growth strategy.

DECODING EUROPE’S NEW CARGO CODE The European Union recently updated its Union Customs Code, which affects companies involved in transporting cargo to or through the EU. The changes are a direct result of the Import Control System (ICS2) rollout, which is the third release of the new pre-arrival and security system for the EU. The ICS2 mandates that all bill of lading issuers provide advance cargo information to address security and safety concerns associated with incoming shipments entering the EU. Shippers must comply by submitting a comprehensive set of Entry Summary Declaration data for goods crossing the EU border, regardless of whether they are inbound or outbound. What’s the impact? Here are the key points, according to Bryn Heimbeck, president of Trade Tech: • Failure to comply with these new regulations will result in cargo shipments being halted and delayed at EU customs borders, with customs authorities withholding clearance. • Insufficient declaration will either be rejected or subjected to intervention, potentially resulting in noncompliance penalties. “It is strongly advised that shippers prepare ahead in order to prevent disruptions to their shipments bound for or passing through the EU,” notes Heimbeck. • Shippers can help to ensure compliance by utilizing unified platform technology that aligns with the enhanced requirements of ICS2. This type of technology is designed to integrate new regulatory changes and is built on top of existing systems and processes. “By adopting a unified platform technology, shippers can bridge the regulatory gap when it comes to global security filings such as AMS, ISF, and the latest addition, ICS2,”says Heimbeck.

Rating Executive Optimism (on a scale of 1-10) 8














Mar 2023

Aug 2023






Top Challenges for 2024

2% Other

31% Labor shortages/cost of labor

3% Lack of inventory

8% Inflation 3% Disruptions in the supply chain

20% Decreasing customer demand

9% Increasing competition

11% Rising cost of materials

14% Gap in skilled labor

Source: Sikich Industry Pulse Report

June 2024 • Inbound Logistics 17


PLANNING GETS PRIORITY Given the extreme supply chain disruptions companies have faced in the past few years, it’s no surprise that crisis mitigation and prepping for disruptions have become increasingly important. New data from intelligent planning technology provider Board International confirms this: Senior supply chain professionals are placing a renewed focus on scenario planning in response to a volatile business landscape, according to the new Board 2024 Global Planning Survey. Overall, 73% of decision-makers are taking planning more seriously , with the Ukraine War, cost-of-living crisis, and ongoing supply chain disruptions acting as major catalysts, the survey shows. The key business threats decision makers are currently planning for: • Cyberattacks: 36% • Labor shortages: 35% • Fluctuating oil prices: 34% • Blockage of key supply chain channels: 27% Despite an emphasis on planning to help navigate ongoing disruptions, many supply chain professionals continue to face challenges planning effectively. The survey reveals signs of planning fatigue within many companies, highlighting a 14% decrease in how seriously companies are taking planning compared to last year. In addition: • 77% of supply chain decision makers admit their organization makes planning decisions based on assumptions. • 29% of respondents report that ineffective planning has impacted profitability, productivity, and the ability to drive innovations and new products or services. • 72% of supply chain professionals usually disregard the most extreme scenarios when planning, suggesting most companies are leaving themselves open to risk should the unexpected happen.


In May 2024, the White House announced a flurry of tariff increases impacting imports of everything from electric vehicles (tariffs are raised from the current 25% to 100%) to lithium-ion EV batteries (jumping from 7.5% to 25%), steel and aluminum products (increasing from 7.5% to 25%), and semiconductors (raising from 25% to 50%), among others. What’s the impact? Here’s what experts are saying: The White House tariff hikes on a number of China-made imports into the U.S. is the latest sign that the U.S. is ‘walking the walk’ when it comes to onshoring supply chains and encouraging domestic industry. Something that needs to be considered is the potential impact on net zero. China-made EVs, clean energy technologies, computer chips, and minerals were bringing the cost of decarbonizing the U.S. economy down, and a balance will need to be struck between bolstering domestic industries and continuing to progress to net-zero goals.” —Simon Geale, Executive Vice President of Procurement, Proxima New tariffs on Chinese goods like lithium batteries, critical minerals, and semiconductors will significantly impact U.S. companies and manufacturers. These tariffs will increase the cost of essential components, squeezing profit margins and raising production costs. Companies reliant on these imports will face higher prices, which may lead to increased prices for consumers or reduced competitiveness globally. The tariffs will disrupt supply chains, compelling companies to seek alternative sources or to reconfigure their supply chains before the tariffs go into effect, which can be time- The new tariffs are another hit to supply chains as they try to manage ongoing risks and build resiliency. Whenever tariffs are increased, regardless of the rationale for doing so, the impact goes beyond cost increases to companies and consumers. Discussions on redesigning supply chains surface through considerations for reshoring as one way to offset costs. Supplier relationships are strained as contract re-negotiations to offset tariff impacts become commonplace. Companies may also adjust their inventory positions through increased buffer stocks to account for delays or disruptions in the supply chain. All of this leads to additional risk and complexity in an already strained supply chain environment.” —John Donigian, Senior Director of Supply Chain Strategy, Moody’s Analytics consuming and expensive.” —Keith Hartley, CEO, LevaData “ “ “

18 Inbound Logistics • June 2024

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