Inbound Logistics | March 2023

MARCH 2023

GEORGIA WELCOMES LOGISTICS LEADERS ACCEPTING THE E-COMMERCE CHALLENGE

BITE SIZED SUPPLY CHAIN/LOGISTICS INFORMATION Info SNACKS

GOING DOWN? Import data from Descartes shows: In February 2023, U.S. container imports decreased signicantly from January 2023, but remained aligned with pre- pandemic 2019 volumes. After an upward move in January, Chinese imports into the United States returned to a downward trend in February. Compared to January 2023, imports from China decreased by 17.1% to 632,702 TEUs.

HIPPO HOP In what may be an air cargo first, Colombia is proposing transferring at least 70 hippopotamuses that live near Pablo Escobar’s former ranch to India and Mexico as part of a plan to control their population. The plan is to lure the hippos with food into large, iron containers and transfer them by truck to the international airport in Rionegro. From there, they would be flown to India and Mexico, to sanctuaries and zoos capable of caring for the animals.

ONE BILLION HOURS The amount of time truckers waste sitting in tra c every year, making shipping even more expensive. • A highway intersection outside of New York City is the most congested bottleneck for trucks. • Congestion added $42 billion+ to the cost of freight transportation in 2019. • Chicago, Atlanta, and Los Angeles are among the most congested cities for trucks. —Business Insider SUPPLY CHAIN CAREERS ARE HOT Employment of logisticians is projected to grow 28% from 2021 to 2031, much faster than the average for all occupations. In January 2023, there were nearly 300,000 U.S. job listings on LinkedIn for supply chain roles.

THE TRUCK STOPS HERE Trucker Path, a mobile app for North American commercial truck drivers, released its annual ranking of truck stops chosen by its nearly one million app users. Top 5 Best Truck Stops 1st Place – Kwik Star #1071, Davenport, Iowa 2nd Place – Love’s Travel Stop #827, Moses Lake, Washington 3rd Place – Rainbow Trucker’s Lounge, West Wendover, Nevada 4th Place – Bert’s Travel Plaza, Wellsville, Kansas 5th Place – Workman’s Travel Center Ozark, Ozark, Arkansas

–U.S. Bureau of Labor Statistics

March 2023 • Inbound Logistics 1

CONTENTS MARCH 2023 | VOL. 43 | NO. 3

46 INCOTERMS:

THE GOOD, THE BAD, AND THE AMBIGUOUS Incoterms are a set of international rules that interpret the most commonly used trade terms. Applying Incoterms to sales and purchase contracts makes global trade easier and helps partners in dierent countries understand one another. 52 GLOBAL TRADE MANAGEMENT SYSTEMS GUIDE 2023 Global trade management (GTM) systems and services are more important than ever in today’s complex and disrupted business environment. From resource planning and trade compliance to customs filings and data analytics, these GTM providers can help ensure your global supply chain runs smoothly.

FEATURES 34 SPONSORED INCREASING E-COMMERCE EFFICIENCIES BLOCK BY BLOCK Consumer expectations continue to stack up, and pressures on e-tailers are mounting. Here’s how companies are building e ciencies and constructing e-fulfillment strategies. 40 INVITING NEW TRADING PARTNERS TO THE PARTY More U.S. companies are asking a Plus One guest to join China sourcing strategies, inviting suppliers beyond the border of the world’s primary outsourcing powerhouse to the party.

56 SPONSORED GEORGIA: PROPELLED BY LOGISTICS Georgia attains logistics prominence with an expansive infrastructure, more cargo capacity on the way, and access to a qualified workforce.

Renovations to the Port of Savannah will increase its annual berth capacity by 25%—one of the many logistics developments on the horizon for Georgia.

2 Inbound Logistics • March 2023

CONTENTS MARCH 2023 | VOL. 43 | NO. 3

GOOD QUESTION How will supply chain management transform in the next five years?

Outdoor gear makers scale supply chain challenges

INSIGHT 6 CHECKING IN

The last mile gets giggy 10 GOOD QUESTION How will supply chain management transform in the next five years ? 14 10 TIPS Optimizing mobile devices in your supply chain 26 GLOBAL TRADE The supply chain impact of the war on Ukraine 28 RISKS & REWARDS Managing supply chain risks 30 IT MATTERS Stabilizing the chemical supply chain 32 OCEAN FREIGHT Container shipping shifts balance INFO 80 WEB_CITE CITY 86 SUPPLY CHAIN INSIGHTS 92 CALENDAR 94 RESOURCE CENTER

88 PRODUCT SPOTLIGHT Tracking and labeling solutions 90 IN BRIEF 96 LAST MILE The great outdoors: peak market opportunitie s

INFOCUS 1 INFO SNACKS 12 DIALOG 16 VERTICAL FOCUS Cosmetics 20 NOTED 22 TAKEAWAYS

CONTENT PARTNERS SOLVED 24 KEY INGREDIENTS FOR EFFICIENCY: 3PL PARTNERSHIP DELIVERS

INPRACTICE 18 READER PROFILE Shaun Bunch, senior vice president of supply chain for Northern Tool + Equipment, oversees distribution, fulfillment, network design, and inventory for the company’s more than 100,000 tools through 130+ stores, catalog, and website. 77 IT TOOLKIT JOELLE Collection, which oers apparel and jewelry through a thriving e-commerce business and a boutique, needed to automate more inbound processes, increase its ability to pick and pack orders, and reduce the risk of fulfillment errors.

MULTIPLE BENEFITS Oered by Hub Group

A new heavy loader crane from Hiab and other recent innovations

Inbound Logistics (ISSN 0888-8493, USPS 703990) is mailed monthly to approximately 60,000 business professionals who buy, specify, or recommend logistics technology, transportation, and related services, by Thomas, a Xometry company, 5 Penn Plaza, NY, NY 10001. Periodicals postage paid at New York, NY, and additional mailing o ces. All rights reserved. The publisher accepts no responsibility for the validity of claims of any products or services described. No part of this publication may be reproduced or transmitted in any form or by any electronic means, or stored in any information retrieval system, without permission from the publisher. POSTMASTER SEND ADDRESS CHANGES TO: Inbound Logistics, 5 Penn Plaza, New York, NY 10001

4 Inbound Logistics • March 2023

Only pay for the speed you need... Dynamic Routing!

On time and on budget. At Lynden, we understand that plans change but deadlines don’t. That’s why we proudly offer our exclusive Dynamic Routing system. Designed to work around your unique requirements, Dynamic Routing allows you to choose the mode of transportation – air, sea or land – to control the speed of your deliveries so they arrive just as they are needed. With Lynden you only pay for the speed you need.

1-888-596-3361 | www.lynden.com

CHECKINGIN

Vol. 43, No. 3 March 2023 THE MAGAZINE FOR DEMAND-DRIVEN ENTERPRISES www.inboundlogistics.com

Gettin’ Giggy With It

STAFF PUBLISHER Keith G. Biondo

publisher@inboundlogistics.com

T he gig economy’s impact on last-mile delivery and fulllment expectations has not gone unnoticed by the retail and e-commerce behemoths. Acknowledging that impact, investment activity is spinning up this year. It seems odd but, despite nely tuned distribution systems, e-commerce leaders now feel they have to add to their “legacy” fulllment infrastructure, technology, and expertise with last-mile buildouts designed to be 2023-competitive.

EDITOR Felecia J. Stratton

editor@inboundlogistics.com

SENIOR EDITOR Katrina C. Arabe

karabe@inboundlogistics.com

MANAGING EDITOR Robert Fee

rfee@inboundlogistics.com

CONTRIBUTING EDITORS Merrill Douglas • Karen M. Kroll Richard Osborne • Debra Phillips

CREATIVE DIRECTOR Jeof Vita

jvita@inboundlogistics.com

Keith Biondo, Publisher

DESIGNER Nicole Estep

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

How? By building out the concept of Fulllment-as-a-Service (FaaS) as a brand enhancement for their current and future vendors, in the hopes of blunting more share gains by small and mid-sized sellers. Last-mile guaranteed delivery windows offered by a growing group of gig nal-mile solutions providers are empowering a pool of newer and smaller e-commerce companies, offering them the ability to side-step existing excellent Amazonian and Walmartian delivery expertise. A Prime example of this trend is the Shopify and Flexport/Deliverr mash-up with its hopes of a solid offering of guaranteed delivery windows, usually within two days. Beyond mashups, segment leaders are slapping on more than add-ons. Sam’s Club recently announced a weighty ve-year buildout plan to expand and add 16 e-commerce fulllment centers. Why? You guessed it—to compete with Amazon and expected delivery experience changes wrought and brought by new e-commerce sellers using fast, cheaper gig delivery services. Low-cost delivery tracking technology and delivery performance metrics à la Uber, combined with dramatic shifts in consumer buying habits and young consumer culture, also drive this investment. SMB retailers and e-commerce companies have nailed down the click-to-sale. But meeting new age consumer delivery expectations without breaking the nal-mile bank is crucial. Even large e-commerce companies like Chinese-owned Temu are concerned with doorstep performance. Temu is currently offering a $5 bounty on any missed delivery window in the States. All this concern partially explains the growth of gig and gig hybrid nal-mile delivery solutions such as Uber and new entrants like AxleHire and DutchX. For the e-commerce giants—Walmart, Amazon, Shopify, Temu—there’s more than money to be made. They plan to grow their market share if they can stave off all the second-tier e-commerce companies and the hordes of new gig-delivery empowered entrants using ultra-fast delivery as a brand builder with vendors and customers. That’s why everyone is gettin’ Giggy with it.

DIGITAL DESIGN MANAGER

PUBLICATION MANAGER Sonia Casiano

sonia@inboundlogistics.com

CIRCULATION DIRECTOR Carolyn Smolin

SALES OFFICES PUBLISHER: Keith Biondo

212-629-1560 ¨ FAX: 212-629-1565 publisher@inboundlogistics.com WEST/MIDWEST/SOUTHWEST: Harold L. Leddy

847-446-8764 ¨ FAX: 847-305-5890 haroldleddy@inboundlogistics.com Marshall Leddy

612-234-7436 ¨ FAX: 847-305-5890 marshall@inboundlogistics.com DIRECTOR, NEW PRODUCT DEVELOPMENT & MARKETING, SOUTHEAST/MIDWEST/ECONOMIC DEVELOPMENT:

Joseph Biondo 516-578-8924 jbiondo@inboundlogistics.com NORTHEAST: Rachael Sprinz 212-629-1562 ¨ FAX: 212-629-1565 rachael@inboundlogistics.com MEXICO & LATAM: Guillermo Almazo 212-629-1560 mexico@inboundlogistics.com FREE SUBSCRIPTIONS www.inboundlogistics.com/free

Inbound Logistics supports sustainable best practices. Our mission is rooted in helping companies match demand to supply, eliminating waste from the supply chain. This magazine is printed on paper sourced from fast growth renewable timber.

Inbound Logistics welcomes comments and submissions. Email us at editorial@inboundlogistics.com; call (212) 629-1560; or mail 5 Penn Plaza, NY, NY 10001. For advertising or subscription information, call (212) 629- 1560, or e-mail publisher@inboundlogistics.com. Inbound Logistics is distributed without cost to those qualified in North America. Interested readers may subscribe online at bit.ly/get_il. Subscription price to others: in North America: $95 per year. Foreign subscriptions: $229. Single copy price: No. Amer. $10, foreign $19, back issues $15.

6 Inbound Logistics • March 2023

Perfectly Positioned

We are leading the way, in every way, from our foreign-trade zone and new gantry cranes to providing one-third of Florida’s petroleum. Our diversity and customer service are second to none and our master/vision plan and $3 billion in ongoing and future improvements are charting the course for unprecedented success.

As one of the top ports in the world and located at the confluence of South Florida’s Atlantic shipping lanes, airways, railways and highways, we are your unrivaled connection to global markets. We serve ports worldwide from Greater Fort Lauderdale, in the heart of one of the largest consumer regions in the nation.

We’ll take it from here.

PortEverglades.net

GOODQUESTION Readers Weigh In

How will supply chain management transform in the next five years?

EXPECT A SIGNIFICANT RELOCATION OF GLOBAL SOURCING. Businesses are keen to shorten the supply chain, increasing visibility and bringing suppliers closer to them and their customers. The geographical distribution of suppliers and manufacturers, which once leaned global, will flip to favor local and regional sourcing. Organizations will need to tap into their business networks to find local suppliers. –Gordon Donovan Global Market Research Director, Procurement & External Workforce, SAP

SUPPLY CHAINS WILL COALESCE AROUND THREE KEY PILLARS: people, process, and technology. Today, there is some integration among these pillars. The next step is a much tighter and deeper integration across all three in order to provide value to customers and employees. –Ann Nemphos Chief Technology Ocer, World Group THE SUPPLY CHAIN RECENTLY BECAME EXTREMELY FLUID, with freight moving from ship to plane to rail to truck and back to address shortages. Add in reshoring/ nearshoring trends and growing visibility expectations, and supply chain management is poised to be more fluid, yet even more connected, in the next five years. –Ron Bisio INCREASED DIGITIZATION IN BOTH THE PHYSICAL SUPPLY AND LOGISTICAL CHAINS as well as in the finance of trade. We expect to see the continued leap from paper- based processes to global information networks (think ocean bills of lading on a blockchain) and an increasing number of partners and service providers connected and sharing data electronically. The added visibility and availability of real-time status information should allow new forms of financing for trading partners at earlier points in the manufacturing, shipment, and delivery cycles. –Michael Stitt Head of Trade and Supply Chain Finance Sales, U.S. Bank Senior Vice President Trimble Transportation

SCM WILL EVOLVE FROM BEING REACTIVE TO PROACTIVE. Technology will enable proactive decision-making focused on additional parameters such as resiliency and sustainability while still considering costs, service, and performance. This is a shift from the past siloed evaluations. Supply chain practitioners will be equipped with the power of data- driven insights, and more time will be spent on strategic complex planning vs. tactical execution. –Venky Arun Partner, Strategic Operations, Kearney RESILIENCY, SUSTAINABILITY, INCREASED USE OF DATA ANALYTICS AND END-TO-END COLLABORATION —supply chain management will continue to expand upon these current trends. Additional use of technology, especially with artificial intelligence, cloud computing, and other advancements will enable faster, more precise decision-making. -Felix Vicknair VP, Supply Chain Solutions Kenco Group

WE WILL SEE A FAR GREATER FOCUS ON CUSTOMS CLEARING CARGO IN TRANSIT. The need for better terminal eciency will pressure importers to clear cargo and secure the carrier release before vessel arrival so that terminals can plan their container stacks. It’s time to put automated manifest system data to use—visibility, clearance, appointment, go. -Bryn Heimbeck President and Co-Founder Trade Tech Inc. SUPPLY CHAINS WILL OPERATE WITH LESS ENERGY. Many supply chain processes will run autonomously, supported by IT-assisted data analytics. Overall, in five years, supply chain management (SCM) is super resilient, as disturbances will no longer be a surprise. Furthermore, SCM incorporates Gen Z’s demands for sustainability and work-life balance. –Dr. Herbert Kotzab Director, Crowley Center for Transportation and Logistics, CSX Transportation Eminent Scholar in Transportation & Logistics, University of North Florida

10 Inbound Logistics • March 2023

GOODQUESTION

SUPPLY CHAINS WILL FURTHER MOVE AWAY FROM BEING LINEAR CHAINS toward connected ecosystems that link data, decisions, and operations across multiple touchpoints and processes, enabling a greater level of coordination, collaboration, and orchestration. This will further accelerate into the future. –Alex Pradhan Product Strategy Leader John Galt Solutions EXPECT AN INCREASED EMPHASIS ON SUPPLIER AND ECOSYSTEM PARTNERSHIPS, with a marked focus on sustainability. Nearshoring will continue to grow, which will intensify the war for talent, and more companies will continue to adopt blockchain solutions to improve supply chain management. –Guru Bandekar Global Vice President, Supply Chain Management, Carrier THE COST OF INACCURATE DATA WILL ESCALATE and cost to track will continue to be a burden. Internet-of-Things technology will have increasing impact on the supply chain to help address these issues. –Jason Judd SVP, Engineering, Optilogic THE U.S. POSTAL SERVICE WILL TAKE SHARE IN E-COMMERCE SHIPPING. Multi-carrier strategy will gain momentum with retailers, e-commerce pure-plays, and manufacturers selling direct-to- consumer. The trend is driven by elevated profitability goals and the necessity to adapt to new economic challenges from industry leaders, FedEx and UPS. –Gaston Curk CEO, OSM Worldwide WHILE INVESTING IN SUPPLY CHAIN AGILITY AND ANALYTICS will be a top priority for every logistician, increasing inventory levels will also be key to oering companies the flexibility necessary to meet unexpected surges in demand. –Greg Tuthill CCO, SeaCube Containers

Get Ready for These Transformations

Here are the three major transformations supply chain managers can anticipate.

Adoption of advanced supply chain technology will be a major source of competitive advantage for companies.

Platforms that improve human decision making and asset management will be areas of focus. Companies will unify their technology portfolios and update or replace legacy systems. Soon the majority of supply chain management platforms will deliver embedded advanced analytics (AA) and artificial intelligence (AI) capabilities. Improved decision making through the use of AA and AI is a high priority for supply chain stakeholders. This will be a major competitive advantage, making repetitive and manual requests for status obsolete. Environmental, social, and governance (ESG) priorities will be embedded in the supply chain process. Leaders must move from good intentions to value creation—accelerating progression of ESG priorities and merging them into the supply chain. This will become increasingly crucial as countries around the world continue to adopt stricter due diligence laws like the recently passed German supply chain law and the United States’ Uyghur Forced Labor Protection Act. -Tim Chiu SVP, TradeBeyond

BRINGING TOGETHER A CLEAN ENERGY MIX of renewable energy with low-carbon alternative energy sources is one of many ways we will see supply chain management evolve over the next five, 10, and 15-plus years. –Joe Calhoun Director, Off-Road Business Development, Propane Education & Research Council

SUPPLY CHAIN VISIBILITY WILL ADVANCE SIGNIFICANTLY. Order/purchase order management capabilities, rapid customer integrations, and real-time container tracking will be commonplace and base requirements for shippers seeking new supply chain partners. –Mike Williams EVP, Commercial Development & Logistics ContainerPort Group

Have a great answer to a good question? Be sure to participate next month. We want to know: How has logistics technology impacted your job or changed your business? We’ll publish some answers. Tell us at editorial@inboundlogistics.com or tweet us @ILMAGAZINE #ILGOODQUESTION

March 2023 • Inbound Logistics 11

DIALOG @ILMagazine [ INSIGHT ]

Want to join the conversation? FOLLOW US: linkedin.com/company/inbound-logistics facebook.com/InboundLogistics twitter.com/ILMagazine youtube.com/user/InboundLogistics inboundlogistics.com/podcast DROP US A LINE: editorial@inboundlogistics.com predictability, and are outperforming their peers with data-driven workows, insights, and actions—employing predictive approaches, implementing tech-infused workows, and experimenting with simulation like digital twins. As companies mature their digital twin, prescriptive and cognitive capabilities, they can improve supply chain productivity by 10–15%, eliminate non-value-add work by 50–60%, and improve their disruption response time from days to hours or minutes. Focus on sustainability. Integrate environmental sustainability and social impact into your enterprise strategy— recalibrate value with a holistic lens of people, planet, purpose, and prot impact. Experiment with open innovation and scientic discovery to explore new solutions and possibilities. Finally, emphasize sustainability in operational metrics, leadership assessments, and investment criteria. Broaden your workforce/recruiting strategy. Provide pay transparency and position company culture as a benet. Use AI to analyze labor markets, skills, experience, and location. Enable prescriptive AI capabilities to recommend pay adjustments and share analysis with workers. Include career paths, fast-track and rotational programs among others. Measure happiness to support business goals like productivity, quality, and sales. Integrate diversity into culture to reinforce an inclusive, safe atmosphere and broaden the pool of potential candidates by not requiring a four-year college degree for certain positions.

To address the talent gap, consider making jobs accessible to a broader pool of potential candidates, including groups that Today I am proud to say Candor Expedite was featured in the January edition. This morning I enjoyed sitting back and reecting on everything and everybody that has impacted me over the many years spent in transportation and various supply chain roles. So many ups, downs, and all-arounds! –Tyler Wiard Director of Business Development, Candor Expedite Quick TIP When I was a shipper, I would scan through the company proles of my latest edition of Inbound Logistics . My biggest headache at the time was liquid bulk tanker capacity for food- grade raw materials and nished product we were shipping in and out of my facility. I was always on the hunt to nd diamonds in the rough within this niche mode of transportation.

Re: Supply Chain Education Kindles New Skills bit.ly/SC_educa- tion_0223

may not historically have had as many opportunities in supply chain as others. Consider actively recruiting military personnel leaving the services. Include offering services or incentives for day care to allow women to more fully participate. –Chris Jones EVP Industry & Services, Descartes

The single most important skill young people should have for a career in supply chain management is problem-solving. Since supply chain management requires the ability to create and operate a series of independent processes, it is critical to be able to skillfully and surgically solve problems. Problem-solving requires using both objective and subjective skills and tools. Objective skills include data collection and analytics. Subjective capabilities include a positive attitude/behavior and interpersonal communication to convert results into actionable tasks. Problem-solving includes the ability to identify/analyze the problem and then develop/implement a controlled improvement plan. –Chris Petrocelli Instructor, Department of Global Business and Transportation SUNY Maritime College

Re. Plan Ahead and Get Organized for 2023 bit.ly/SC_predictions_0123

Managing the supply chain has become a juggling act. Chief supply chain ofcers should consider the following moves: Accelerate investments in supply chain technology. Research shows top supply chain performers are using cloud, analytics, and articial intelligence to provide ecosystem interconnectivity, sustainable operations, and greater

–Rob Cushman Worldwide Leader – Supply Chain Transformation, IBM Consulting

12 Inbound Logistics • March 2023

10 TIPS

Mobile devices are indispensable tools for businesses to stay connected and manage their supply chains—placing them on the front lines of technology transformation. Here are 10 action items to better optimize the use of mobile devices in your supply chain. Optimizing Mobile Devices in Your Supply Chain

1 STREAMLINE WORKFLOWS TO RAISE PRODUCTIVITY

disturbances and delays. Real-time data collection and transparency is the backbone of a supply chain. Sharing that information across the organization via mobile devices enables vital connections to partners and customers, allowing the supply chain to function at its full potential. 6 BOOST KEY INSIGHTS TO AUGMENT REPORTING An innovative technology platform delivers critical insight into a company’s supply chain, oering team members access to key reports, trends, statistics, and real-time data, which allows the organization to make adjustments to enhance eciency and accuracy. 7 IMPROVE DEMAND VISIBILITY A proven technology platform improves visibility to better anticipate demand, which is necessary to properly plan and create accurate forecasts.

A platform with strong mobile device accessibility baked in also makes it easier to source and distribute goods on time and cost- eectively, which provides a positive impact to the bottom line. 8 INCORPORATE SECURITY BEST PRACTICES Mobile devices are especially prone to security risks; therefore, a technology platform should adhere to security best practices and seamlessly work with and comply to existing security standards. 9 ASSESS SUPPLY CHAIN HEALTH PROACTIVELY Unpredictable global challenges over the past few years have sent some supply chains into a tailspin, causing uncertainty and ambiguity. Companies can quickly determine the health of their supply chain and how to mitigate risk throughout their operations, including mobile devices, thanks to innovative technology platforms.

It’s crucial for businesses to enhance workflows. The use of mobile devices can raise productivity by eliminating time-wasting redundancies, and reducing administrative costs, billing errors, and staff time.

2 SCALE AND INTEGRATE SEAMLESSLY An intuitive technology system allows seamless integration by sharing real-time data on mobile devices. The right system enables transparency and streamlines communications that align with business objectives while reinforcing best practices. But proceed carefully here. Many systems do not address a business’s actual day-to-day needs. As a result, choosing the incorrect technology platform can be a costly mistake, leading to greater ineciencies and poor performance. 3 MANAGE ASSETS WITH A ROBUST DATABASE Managers can use mobile devices to access critical data stored on a database housed on an advanced technology platform. Mobile access allows for convenient tracking of assets, maintenance, and allocation.

4 FREE UP RESOURCES BY FINE-TUNING PLANNING A business can fine-tune its planning processes by eliminating antiquated methods and manual- heavy procedures while simultaneously leveraging mobile technologies. This frees up resources and increases agility by empowering mobile device users to be more proactive and respond quickly to challenges. 5 IMPROVE DATA COLLECTION Many advanced mobile technology systems improve data collection and information delivery. This promotes transparency and elevates eciency regardless of location while minimizing

10 ANTICIPATE EXPECTATIONS TO

IMPROVE THE CUSTOMER EXPERIENCE Mobile device optimization utilizing the right software can improve the overall customer experience. An intuitive technology platform allows mobile device users to receive updates and notications on their mobile devices—enabling them to meet customer expectations.

SOURCE: TOM MARTUCCI, CHIEF TECHNOLOGY OFFICER CONSOLIDATED INTERMODAL TECHNOLOGIES

14 Inbound Logistics • March 2023

Proactively investing in infrastructure for your supply chain

THE WORLD CONNECTS HERE

SCSPA.COM/WHYSCPORTS

Cosmetics

From managing ingredient shortages to finding a production plan that delivers the right amount of product when and where it’s needed, cosmetics companies face significant supply chain challenges. Many are turning to automation to meet these challenges. One example is Belcorp, a multinational beauty brand corporation operating for more than 55 years primarily in Latin America. The company sought a software solution that would both enhance inventory performance of more than 90,000 SKUs and elevate service. Reducing and properly positioning inventory across its network would help managers make agile decisions while minimizing environmental impact. But Belcorp also needed access to statistical and optimization tools that could calculate optimal stock levels. Its search led Belcorp to ToolsGroup, a Boston- based supply chain planning software provider. It implemented ToolsGroup’s demand planning, multi- echelon inventory optimization and replenishment solutions to help right-size inventory levels and improve stock positions. Since implementing the solution, Belcorp has reduced on-hand inventory while positioning available stock where it can best fill demand. INVENTORY MANAGEMENT GETS A MAKEOVER

THE LIPSTICK EFFECT ON SUPPLY CHAINS While much of the current U.S. economic news has focused on recession fears driven by inflation and geopolitical concerns, the cosmetics industry is sitting pretty because American consumers are still spending heavily on beauty products. To understand why, consider the lipstick eect. The lipstick eect occurs when consumers continue to spend money on luxury items during times of economic stress. The term was coined by Estée Lauder’s former chairperson, Leonard Lauder, who observed how lipstick sales soared in the wake of Sept. 11 and theorized that lipstick must be a contrary indicator of an economy. Recent data supports Lauder’s theory. The beauty category was “a rare bright spot” for retailers in 2022, finds the NPD Group, and the only discretionary retail category to enjoy rising unit sales in the first half of 2022. Makeup sales, including lipstick, were up 20%, skincare was up 12%, fragrance was up 15%, and hair care was up 28%. But greater demand for product creates greater strain on the supply chain. For example, the lipstick eect can make it tricky for cosmetics firms to predict economic downturns, so managing inventory levels can be a challenge. To leverage the lipstick eect and drive supply chain e ciencies, cosmetics companies do the following:

Prioritize supply chain stability Find the right pricing balance Diversify product oerings

●

● Invest in technology that helps to predict demand

16 Inbound Logistics • March 2023

VERTICALFOCUS FACING SUPPLY CHAIN CHALLENGES While some challenges are common to every industry, others are unique to a particular market segment. The cosmetics industry will face at least four unique supply chain challenges in 2023, according to analysts at rfxcel, a part of the Antares Vision Group. Combating counterfeit goods. Cosmetics are often pricey, which makes them attractive to counterfeiters. In fact, counterfeit products cost the cosmetics and personal care sector between $4.5 million and $5.6 million and created 10% of all customs seizures in 2019, according to a Statistica report. “Traceability in a digital supply chain, including serialization and real-time environmental monitoring solutions, is the best defense,” the report advises. Ensuring sustainability. While regulatory concerns drive sustainability eorts at many companies, cosmetics consumers continue to demand accountability, requiring suppliers to focus on sustainable sourcing, packaging, and manufacturing. Minimizing product damage. Climate control that reduces the risk of damage during shipment is crucial. Cosmetics companies should make climate control part of a larger real-time environmental monitoring solution such as Integrated Monitoring, which uses Internet of Things devices to monitor conditions, including temperature, during transportation. Addressing labor issues. Sourcing high-quality ingredients is essential, but the cosmetics sector has dealt with illegal labor issues. Sourcing requires vigilant monitoring of labor practices, making end-to-end traceability, visibility, and transparency crucial.

ULTA ULTRA FOCUSED ON TECH Technology is changing the playing field for all industries, including beauty products. The larger players understand that the technologies that disrupt a process today can lead to huge e ciencies and profits tomorrow. They are investing more time and money in funding the development of technology that will drive their business forward. Take Ulta Beauty as an example. The largest beauty retailer in the United States recently launched Prisma Ventures, a digital innovation fund that will invest $20 million in emerging tech startups with a particular focus on artificial intelligence, augmented reality, Internet of Things, and personalized data-driven technology. The Ulta Beauty Prisma Ventures team evaluates these tech startups based on five key metrics: 1. Alignment with an Ulta focus area 2. Leadership and cultural compatibility

3. Diligence and risk assessment 4. Business plan and scalability 5. IP and dierentiation

APPLYING A BETTER FOUNDATION While the benefits of robotics solutions in cosmetics manufacturing are solid, implementation can prove shaky. Packaging or picking products that come in a range of sizes and shapes creates unique challenges that have led many cosmetics companies to build processes that piece together a variety of solutions. For example, because cosmetics products often deal with liquids at a variety of viscosities, liquid filling can be particularly troublesome for manufacturers with diverse product ranges. There may be another way. Shemesh Automation has developed a solution that the company says can handle feeding, filling, capping, labeling, case packing, and palletizing cosmetics products of all shapes and sizes. The company’s TKS-C60 solution consists of three ABB Delta Robots—one on the product unscrambling station, one for multi-capping, and one for case packing—and an integrated vision system. The solution is able to pack multiple product types with one line, according to the company. Early investments in start-ups that include Haut.ai, Adeptmind, Revea, LUUM, and ReStyle have enabled greater personalization and diagnosis within Ulta Beauty’s digital skin and hair experiences, the company says.

March 2023 • Inbound Logistics 17

READERPROFILE

as told to Karen Kroll

Best of the Bunch

RESPONSIBILITIES: Oversee distribution, fulfillment, network design, inventory and demand planning, forecasting, transportation, logistics, safety, and facilities, among other functions. EXPERIENCE: Vice president, logistics and inventory management, Sleep Number Corporation; vice president, fulfillment and final mile, Ashley Furniture Industries; senior director, online operations and fulfillment, Sears Holding; director of distribution and logistics and logistics manager, Coca-Cola Consolidated, and senior operations manager, Amazon. EDUCATION: M.B.A., Sullivan University; B.S. Business Administration, University of South Carolina. SHAUN BUNCH is senior vice president of supply chain with Northern Tool + Equipment, which offers more than 100,000 tools—from air compressors to welding tables—through 130-plus stores, catalog, and website.

W hile interning with Walmart, I visited a distribution center in Monroe, North Carolina, and immediately knew this was where I wanted to be. There was so much going on: high- tech conveyors and de-palletizers, trucks coming in and out, people working on different things. I was hooked. Then, early in my days at Amazon, I learned the importance of being able to quickly change and try new things. As part of an operations team that launched multiple new buildings, I had the opportunity to teach and train new employees, open new facilities, and implement technology to go faster. As I grew in my career, I learned different aspects of the distribution network, including transportation, inventory management, and e-commerce operations. I got into

our customers are the ones who do the tough jobs. They kept the country running during the pandemic. They’re professionals and serious DIYers, who want pro-grade tools.

network design and the engineering that goes into guring out not just where you’re at, but how to skate to where the puck is going and build a network for the future.

The patience to try and fail is not easy, especially in a violently changing supply chain environment. But once you get it nailed down, you can execute fast.

We aren’t just a store trying to sell goods. We’re anchors in our communities and we keep the people who do these jobs working. I’m proud of our ability over the past few years to not just adjust, but also to be agile. We’re not a small ship, but we’re much smaller than the biggest ships. Those ships can weather some storms, but they’re also hard to turn.

When I joined Ashley Furniture, we worked on the customer experience from a customer lens, and not just an operations lens. We focused on enhancing the experience once the drivers and furniture arrived at customers’ homes. When you cross into somebody’s home, the experience is not just important; it’s sacred. At Northern Tool + Equipment,

18 Inbound Logistics • March 2023

READERPROFILE

We’re strong enough to weather the storms, and we also can make agile cuts and invest in supply chain initiatives to make us stronger and better. For instance, we’re implementing ship-from-store technology for customers using our direct channel. Utilizing store inventory gets us geographically closer to the customer and normalizes inventory. We launched with an alpha site. We try and fail, and hone the system before we plug it into place. The patience to do that is not easy, especially in a violently changing supply chain environment. But once you get it nailed down, you can execute fast. That has been key to the success of this program. We’re growing and investing in new

Shaun Bunch Answers the Big Questions 1 What activity makes you better at supply chain management? 3 Who are your heroes?

My grandfather is one. His ability to lead our family and in the community, his work ethic, his kindness, his business savvy and smarts, and his ability to unite—I strive to be like him every day. Professionally, I love risk-takers; people who charge in with a vision, not knowing exactly how to get there. But they charge anyway because they know it’ll work. Jeff Bezos gets a lot of bad press, but Amazon started out like everything: an idea. His ability to be fearless in building it was monumental. It taught me if you have a vision and you’re passionate about executing it, anything’s possible.

I’ve coached my three teenagers in basketball at all levels. Coaching basketball is one of my passions and it plays into my obsession with supply chain. Basketball is a sport of orchestration and adjusting to the dynamics of the other team. You have to have good plays and training so each individual can harmonize as a team, and then respond to the other team. 2 If you could speed the development of a supply-chain-disrupting technology, what would you choose? Better technology around the movement of big and heavy goods.

asi_halfpgIL_0323_final_• 2/21/23 3:29 PM Page 1 facilities and systems in an environment where everything is scary and up for grabs, and a lot of folks are trying not to collapse. I’m grateful for the growth of my team as we’ve done this. n

GLOBAL LOGISTICS SOLUTIONS

International Transportation Services ▪ PORT-TO-DOOR INTERNATIONAL SHIPMENTS ▪ CUSTOMS BROKERAGE ▪ FREIGHT FORWARDER, NVOCC ▪ AIR FREIGHT SERVICES ▪ IMPORTER SECURITYFILING SERVICES(10+2) ▪ SHIPPERS RISK COVERAGE SERVICES

www.alliance.com

March 2023 Inbound Logistics 19

NOTED [ IN FOCUS ]

The Supply Chain in Brief

> GOOD WORKS

> RECOGNITION

• Atlas Air sent a 747-8F aircraft lled with humanitarian and relief supplies from Washington Dulles International Airport to earthquake victims in Turkey and Syria. Atlas Air donated the use of the aircraft and crew and Turkish Airlines collected clothes, medical supplies, and other essentials.

• Dayton Freight Lines received the 2022 LTL Carrier of the Year Award from Scotts Miracle-Gro Company. This award recognizes superior performance in on-time service, claims ratio, and responsiveness to Scotts’ capacity needs. (Pictured: Mike Cronin (left), executive vice president and Tom Cronin, CEO and president, Dayton Freight Lines, accept the award.) • Federal longshore and harbor workers’ compensation insurance provider Signal Mutual awarded APM Terminals its Industry Safety Leadership Award for 2021-2022. • Avetta’s support center team won a 2022 International Service Excellence Award, presented by the Customer Service Institute of America and the International Council of Customer Service Organizations. The team also was named as a 2022 Service Excellence Up and Comer for improving satisfaction scores and reducing customer wait times. • Gartner awarded two Power of the Profession Supply Chain Awards to Microsoft for Supply Chain Breakthrough of the Year and Process or Technology Innovation of the Year for its submission titled Real Time Visibility Enabling a Sentient Supply Chain , which detailed how Microsoft transformed its devices supply chain.

> MILESTONE

n Milky Way, a division of LTI, celebrates its 75th anniversary in 2023. The bulk milk transporter serves producers in Oregon, Idaho, and Montana.

> UP THE CHAIN

• ITS Logistics appointed Peter Weis as its chief information ofcer and senior vice president of supply chain services. Weis brings 20 years of global C-suite IT leadership experience to the company.

20 Inbound Logistics • March 2023

NOTED

> M&A

> GREEN SEEDS

n Descartes Systems Group acquired GroundCloud, a cloud-based provider of last-mile solutions and road safety compliance tools. n To expand its last-mile oerings, PITT OHIO secured a minority stake in Aria Logistics, a nationwide provider of large format residential delivery. Services include curbside, threshold, room of choice, and white glove delivery. n GEODIS has finalized its acquisition of trans-o-flex, a leading German network for temperature-controlled pharmaceutical goods and express premium delivery. The acquisition boosts GEODIS's presence in the healthcare market and enhances its delivery capabilities in Europe. n Overhaul, a provider of supply chain visibility, risk, compliance, and insurance solutions, purchased SensiGuard security services from Sensitech. The acquisition expands Overhaul’s global footprint by adding oces in Brazil, Mexico, and Czech Republic. n ROI sold Atlas Motor Express , a Boston-area trucking company that specializes in less-than-truckload freight, consolidation, and final-mile deliveries, to Laconia Best Warehousing and Distribution. n To boost its customs brokerage, clearance, and consulting solutions oerings, EFL Global acquired Trans American Customhouse Brokers. n Horizon Air Freight purchased Transmarine Navigation Corporation. The acquisition allows Horizon Air Freight to oer port call agency services at Transmarine's 12 served ports in the Gulf Coast, West Coast, Hawaii, and Argentina. n Asset-based truckload carrier Big G Express acquired RTR Transportation , a nationwide dry van truckload carrier that oers local cartage, warehousing, cross-dock, trailer rework, and storage trailers. Both companies are based in Tennessee.

n Lufthansa Cargo will equip all its Boeing 777 freighters with AeroSHARK surface film. The technology mimics the microscopic structure of shark skin, which provides fuel e ciencies and reduces emissions. n US Foods Holding received its first battery-electric powered Freightliner eCascadia trucks at its La Mirada, California distribution center. The food service distributor plans to add a total of 30 electric trucks to its distribution fleet.

> SEALED DEALS

• Apotea, an online pharmacy, automated its logistics center with the piece-picking robot eOperator solution, a collaboration among Element Logic, AutoStore, and RightHand Robotics. • Cooper's Hawk Winery & Restaurants implemented ArrowStream's food service cloud platform for supply chain intelligence in its network of more than 275 chain operators across 100,000 restaurant locations, 1,300 distribution locations, and 10,000 manufacturers.

March 2023 • Inbound Logistics 21

TAKEAWAYS Shaping the Future of the Global Supply Chain

WAR IN UKRAINE SQUEEZES SHIPPING More than one year after Russia’s initial invasion of Ukraine, global supply chains are feeling the impact. In the months after the invasion, total vessels moving in and out of Ukraine dropped from 109 in January 2022 to just two in June 2022, according to data tracked by project44. Combine the lack of vessel movement with trade sanctions on Russian exports, and you have a recipe for global inflation and commodity price spiking. To mitigate these challenges, many companies are diversifying their supply chains by changing from single to multi-supplier sourcing. In some cases, they are shifting from o shoring to nearshoring.

Look Ma, No Hands As autonomous driving gains some traction, transportation companies are building partnerships to bring self-driving trucks from concept to reality. To that end, Ascend, a truckload carrier that offers middle-mile supply chain solutions, partnered with Volvo Autonomous Solutions (VAS) to test autonomous, long distance linehaul options. As part of the pilot, Ascend will pick up customer loads and transport them to VAS hubs in Dallas and Houston. From there, VAS will move loads to Ascend destination hubs, where drivers will pick them up for delivery to nal destinations. “In the future, the VAS transportation solution could combine the service and transit time benets afforded by point-to-point truckload movements with the linehaul advantages of intermodal rail transportation,” says Michael McLary, CEO of Ascend. Potential benets of autonomous driving include increased safety, faster delivery schedules that can take advantage of 24/7 operation, and increased fuel optimization due to computer-guided synchronization and vehicle operation optimization, according to Ascend.

135 139 141

134

128

123

The invasion of Ukraine started Feb. 23, 2022

109

112

100

116

Total vessels Vessels arriving Vessels departing

Jan ‘21 Apr ‘21 Jul ‘21 Oct ‘21 Jan ‘22 Apr ‘22 Jul ‘22 Oct ‘22 Jan ‘23

Total vessels Vessels arriving Vessels departing

79 79

The invasion of Ukraine started Feb. 23, 2022

40 40

36 34

33 35 32

30 28

Jan ‘21 Apr ‘21 Jul ‘21 Oct ‘21 Jan ‘22 Apr ‘22 Jul ‘22 Oct ‘22 Jan ‘23

The war in Ukraine has led to significant supply chain challenges, exemplified by a sharp drop-o of vessels arriving and leaving Ukraine since the war began. This chart shows numbers from Odesa, the largest port in Ukraine, which mirror the country’s overall numbers. ( Source: project44 )

22 Inbound Logistics • March 2023

TAKEAWAYS

Gaining Vision in Ocean Freight’s Murky Depths

What you don’t know can hurt you. Half of ocean freight stakeholders responding to a recent report released by FourKites say they have zero visibility into their ocean freight. More than 20% still rely on manual track-and-trace processes to locate their ocean freight in the supply chain. Once that cargo hits land, the numbers get better. Up to 73% report having some level of visibility into their over-the-road shipping. It will take some work to get those numbers close. Fortunately, ocean freight executives are ready to invest time and money. FourKites’ report, The Great Reset: Ocean Shipping in a Post- Pandemic World , also nds that

AIR CARGO GAINS ALTITUDE Air cargo levels are showing signs of rebounding to pre-pandemic levels. North American carriers reported a 5.1% decrease in demand in 2022 when compared with 2021, but capacity increased 4.2%, according to the International Air Transport Association. Comparing these figures with 2019 shows demand at 13.7% and capacity at 8.2% above pre-pandemic levels. Here are the top 10 global airports–based on total cargo– leveraging the increased demand, according to Airports Council International: 1. Hong Kong International Airport 2. Memphis International Airport 3. Shanghai Pudong International Airport 4. Ted Stevens Anchorage International Airport 5. Incheon International Airport 6. Louisville International Airport 7. Taiwan Taoyuan International Airport 8. Los Angeles International Airport 9. Narita International Airport 10. Hamad International Airport

73% plan to invest in supply chain visibility technologies, with 46% saying they are going to invest more in 2023 than they did in 2022. Ocean freight executives also expect to face labor challenges, high shipping costs, and impacts to customer service in 2023.

KEEPING THE LAST MILE IN SIGHT When customers order an item, they want it delivered now. Retailers realize this, but they also have to keep costs in mind. A study FarEye conducted with Researchscape International finds that retailers with more than $100 million in sales seek to improve the top key performance indicators of on-time delivery (74%) and cost per delivery (62%). But as supply chain complexities increase, on-time deliveries become more challenging. To help solve this issue, many retailers outsource their delivery networks, but this comes with its own set of problems. For example, the initial report findings show that 84% of retailers that have outsourced their delivery networks now want more control over those networks. Visibility is the biggest reason why; 33% of retailers say accessing reliable information is a challenge. To address these shortcomings, 77% of logistics providers say they expect to expand their budgets for last-mile delivery technology, and 82% say they will likely change or buy a new last-mile delivery solution in the next one to two years. To enable more e§cient, cutting-edge deliveries and lower costs, logistics providers are also evaluating electric vehicles (80%), autonomous vehicles (44%), and drones (38%).

March 2023 • Inbound Logistics 23

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100