Inbound Logistics | June 2023

JUNE 2023

STREAMLINING CHEMICAL LOGISTICS HAWAII SHIPPING ESSENTIALS

SUPPLY CHAINS COME FULL CIRCLE

Maximizing customer value through continuous improvement and innovation, CJ Logistics provides customers visibility to supply chain data to help them improve, optimize and make informed decisions. Data is transformed into intelligence. Maximizing customer value through continuous improvement and innovation, CJ Logistics provides customers visibility to supply chain data to help them improve, optimize and make informed decisions. Data is transformed into intelligence.

WAREHOUSING TRANSPORTATION FREIGHT FORWARDING SUPPLY CHAIN CONSULTING WAREHOUSING TRANSPORTATION FREIGHT FORWARDING SUPPLY CHAIN CONSULTING

BITE SIZED SUPPLY CHAIN/LOGISTICS INFORMATION Info SNACKS

SUPPLY CHAIN CAREERS PAY OFF SALARIES ARE ON THE RISE The median supply chain income is up to $98,570. At all degree levels, salaries were reported about $30,000 more than the national average. CAREER SATISFACTION IS HIGH 96% of supply chain professionals are planning to stay in the eld in the next 5 years, and 82% take pride in their work. –2023 Supply Chain Salary and Career Report, The Association for Supply Chain Management

A NEW DAWN As part of a bridge replacement project, The Utah Department of Transportation slid a 1.1 million pound bridge into place using a hydraulics system and a little drizzle of something you likely have in your home: Dawn dish soap. Crews generously applied dish soap to Teflon pads to keep “everything slippery and moving,” says Tyrell Wood, resident engineer. As part of the hydraulics system, long “screws” rotated, causing the bridge to inch toward its final location. The slab was only allowed to move several inches at a time, which varied as crews worked to ensure that spacing on each side was approximately equal. “Dawn dish soap is the secret ingredient,” Wood says.

NY SWEARS IN ROBOCOP The New York Police Department will implement Boston Dynamics’ Digidog remote-controlled robot to assess and de-escalate high-risk situations, such as counterterrorism initiatives and hostage negotiations, New York City Mayor Eric Adams recently announced. The 27.6-inch-tall robot can walk, climb stairs, avoid obstacles, and autonomously follow predetermined routes. Digidog also features 360-degree perception, data capture capabilities, and a payload capacity of up to 31 pounds. • 38 large ships were lost worldwide in 2022. South China Sea region sees most total losses. British Isles sees most shipping incidents. • Fire is the second top cause of loss over the past year with 8 vessels lost and more than 200 incidents reported—the highest for a decade. • More expensive claims due to inflation. Cost pressures could impact the shipping sector’s decarbonization and safety initiatives. • While piracy incidents are down, new maritime challenges are emerging around lithium-ion batteries, mis-declared cargo, cyberattacks, and decarbonization. – Safety and Shipping Review 2023, Allianz WATER SAFETY

GIVE ME A BRAKE The Commercial Vehicle Safety Alliance conducted an unannounced single-day brake inspection campaign throughout North America in April 2023. The results, by country: Canada – 10% (88 vehicles) of the 894 total commercial motor vehicles inspected were placed out of service for brake-related violations. Mexico – 34 commercial motor vehicles were inspected. Six (18%) had brake-related out-of-service violations and were placed out of service. United States – Inspectors placed 679 (11.5%) of the 5,901 commercial motor vehicles inspected out of service for brake-related violations. ROAD RAGE “I’d like to see you and your colleagues try to get your work done if you didn’t have a safe place to sleep at night. Then you arrive at your ofces at 9 a.m., but you are forced to wait until the early afternoon to begin working, while not being allowed to use the restroom and not being paid for the time you have wasted all morning.” – At a Congressional hearing aimed at improving the supply chain, OOIDA Executive Vice President Lewie Pugh asked lawmakers to consider the challenges truck drivers face.

June 2023 • Inbound Logistics 1

CONTENTS JUNE 2023 | VOL. 43 | NO. 6

80 FILLING THE SUPPLY CHAIN TALENT PIPELINE Private sector companies and organizations turn on the spout and team up with educational institutions to raise the profile of a career in supply chain, bolster curricula, and help build tomorrow’s supply chain workforce.

Businesses and schools fill the supply chain talent pipeline

FEATURES 30 GREEN SUPPLY CHAINS COME FULL CIRCLE A growing number of organizations are incorporating circular supply chain approaches within their operations. Here’s a look at how they are closing the loop. 37 G75: 75 GREEN SUPPLY CHAIN PARTNERS Inbound Logistics recognizes supply chain visionaries that demonstrate their commitment to sustainability.

60 SPONSORED HAWAII LOGISTICS: MOVING ON ISLAND TIME Hawaii imports around 85% of the goods it uses and has limited storage capacity, which challenges companies to keep shipments flowing. Here’s how logistics providers keep supply chains buoyant and disruptions at bay.

The chemical industry rolls out solutions to meet supply chain challenges

86 SPONSORED CHEMICAL LOGISTICS: FORMULATING SOLUTIONS As chemical production increases in the United States, logistics providers drum up solutions to transport these critical shipments safely, eciently, and accurately—leveraging specialized expertise and experience. 102 OPTIMIZE YOUR SUPPLY CHAIN BALANCE SHEET Every supply chain contains hidden costs and potential savings. Smart shippers and their logistics partners use data to discover cost-saving opportunities that improve profits.

Hawaii challenges companies to deliver just in time

2 Inbound Logistics • June 2023

GOOD QUESTION What one supply chain adjustment would make the biggest impact on ESG?

Beer trends are brewing

INFO 106 SUPPLY CHAIN INSIGHTS 108 WEB_CITE CITY 118 RESOURCE CENTER

INFOCUS 1 INFO SNACKS 12 VERTICAL FOCUS: ALCOHOLIC BEVERAGES 14 NOTED 16 TAKEAWAYS 114 IN BRIEF 120 LAST MILE Sriracha brings the heat

8 10 TIPS Managing your ocean freight 22 SC RESILIENCY 3 strategies for supply chain resilience 24 ECOMMERCE How to combat fraudulent losses 26 IT MATTERS Steps to AI success in your warehouse 28 RISKS & REWARDS If you don’t quantify risk, COVID didn’t teach you anything

INPRACTICE 10 LEADERSHIP Mark Ang was 12 when he and his brother demolished and rebuilt an apartment building with their father, a property developer. At 14, Ang helped manage construction for the family business. So he was already a seasoned business professional when, in his early 20s, he founded Second Closet. Now, as CEO of GoBolt, he has harnessed that work ethic to accomplish a day’s worth of work before 8 a.m.

INSIGHT 4 CHECKING IN Warehouse location automation 6 GOOD QUESTION What one supply chain adjustment would make the biggest impact on ESG?

114

Drop-in lithium-ion batteries for lift trucks and other solutions

CONTENT PARTNER SPONSORED 20 INNOVATIONS IN PALLET LIFE-CYCLE MANAGEMENT Oered by Kamps

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June 2023 • Inbound Logistics 3

CHECKINGIN Warehouse Location Automation

Vol. 43, No. 6 June 2023 THE MAGAZINE FOR DEMAND-DRIVEN ENTERPRISES www.inboundlogistics.com

STAFF PUBLISHER Keith G. Biondo

publisher@inboundlogistics.com

I f a robot told you where to go, would you listen? Choosing a domestic distribution site is a well-honed science with several schools of thought. Some supply chain practitioners favor the mega-DC approach, while others use retail locations to do double-duty as efulllment centers. Other practices include a blended approach to match evolving customer demand. The cardinal rule, at least in days gone by, was that you’d locate your DC or warehouse near your customers

EDITOR Felecia J. Stratton

editor@inboundlogistics.com

SENIOR EDITOR Katrina C. Arabe

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MANAGING EDITOR Robert Fee

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CONTRIBUTING EDITORS Merrill Douglas • Thomas Gresham Karen M. Kroll • Richard Osborne

CREATIVE DIRECTOR Jeof Vita

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Keith Biondo, Publisher

DESIGNER Nicole Estep

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

to keep transport costs low, speed fulllment, and optimize inventory investment. Does that rule still hold? Maybe not. While current approaches have been monumentally successful and offer benets for those who follow the rules, logistics automation—specically new developments in warehouse automation—gives forward-thinking supply chain managers some counter-intuitive choices on warehouse or fulllment center locations. Three factors drive that counter-intuitive thinking. 1. Products follow people and some centers of American consumption are reshufing. “Where are my customers now? Where will they be in 5 years?” That’s hard to know. But smarter, and in some cases older, consumers who hanker for less crowded, less congested, less contested, and more clement climes are moving elsewhere as a result of the pandemic, work from home, high taxes, social challenges, onerous regulations, and other factors. Companies are planning and building a new wave of distribution assets to serve that mini migration. 2. Warehouse labor shortages in many areas. Conventional thinking was to locate a new facility in larger, more urban centers of population to gain access to a good and reliable labor pool. Yet many modern and automated DCs are less labor intensive and more labor light, meaning product can move with fewer hands on the boxes. That also means you don’t need to locate your distribution facility in traditional urban areas. Consider that those locations are typically more highly taxed, have higher energy costs, and, in some cases, a more stringent regulatory environment, prompting the question: What am I doing here? 3. A new wave of available warehouse automation and robotics. Lower- cost, hard-working automation solutions enable you to locate your facility in sites more distant from your nal mile. While it’s true that automation costs are high, amortizing those investments over time is likely to offset the costs associated with traditional locations, even accounting for higher transport costs. New choices are here. You don’t have to be a robot whisperer to listen to where your robot tells you to go.

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4 Inbound Logistics • June 2023

A TON MORE

FOR YOUR CARGO. Say hello to more go-power, with new Boeing 737s that give you an extra 2,000 lbs. of capacity per passenger flight. And with new freighters that increase shipping capabilities by 40%. Add to that 100+ destinations, including same-day, coast-to-coast connections, and you now have more get-up-and-go for cargo than ever before.* We’re expanding our fleet, our capacity, and more.

For more information or to book your shipment online, go to go.alaskacargo.com/letsgo. Or call us at 1-800-225-2752.

*Per departure capacity based on allowable or maximum payload of new 737-9MAX and 737-800BCF vs. existing eet.

GOODQUESTION Readers Weigh In

What one supply chain adjustment would make the biggest impact on ESG? Dwell Not, Waste Not

THE BIGGEST OPPORTUNITY IS REDUCING THE WAIT TIME , or dwell, that drivers spend sitting at shipper docks. That wastes driver hours, and when they’re idling, they waste fuel. While electrification offers benefits, those are

MATURE YOUR DATA so you can use it like Google Maps. Sustained ESG marries continuous improvement with reporting and analysis—predicated on trustworthy data. Every company has a different origin, destination, and journey. Equip your organization with dependable navigation skills by building data intelligence and embedding a culture of data-driven action. –Michael Ochi Sr. Manager, Sustainability and Digital Manufacturing, QAD REDUCE DEADHEAD-RELATED EMISSIONS. Using technology and data to identify the most efficient load/carrier/lane match, while meeting service requirements, is a powerful method for mitigating those miles to reduce emissions and drive sustainability. –Alex Schwarm VP of Data Science, Arrive Logistics LOGISTICS COMPANIES CAN IMPACT ESG with three key adjustments: avoid empty runs to reduce emissions, decrease yard wait times for driver well-being, and prepare to comply with forthcoming regulations. The transportation sector accounts for approximately 10% of global emissions and is on pace to double. –Georgia Leybourne Chief Marketing Officer, Transporeon

down the road. Drivers have 11 available hours they can drive every day, the best average 7 or 8. Reducing driver dwell can have a major impact on emissions reduction and achieving ESG goals. –Greg Orr President, CFI

COMPANIES THAT SHIP A LARGE VOLUME OF GOODS can review and adjust their shipping profiles to shorten the distance of travel needed between their goods and end-user delivery. This can be done by reducing the number of shipping zones, i.e., adding an additional distribution center closer to the final destination. –Josh Dunham CEO and Co-founder, Reveel ADOPT ORDER CONSOLIDATION AND LOAD PLANNING. Reducing deliveries and over-the-road miles by transportation providers would deliver multiple benefits, including decreased emissions and expense, increased efficiency, and better profit margins. If you couple this with the electrification of final-mile delivery vehicles, you have a winning combination. –Eric Elter Director of Information and Technology Services, KDL Logistics

THE KEY TO MAKING THE MOST SIGNIFICANT IMPACT on ESG is simple but powerful—measuring better and more consistently. Achieving ESG goals requires ethical, authentic, and honest measurement to aligned standards within the industry. –Glenn Riggs Chief Strategy Officer, Odyssey Logistics FOCUS ON ENGAGING SUPPLIERS to measure, report, and ultimately reduce their greenhouse gas emissions. Remember, your suppliers’ direct emissions are your indirect (Scope 3) emissions. Engaging suppliers to require their reporting of emissions is a good first start. –Ryan Lynch Practice Director, Sustainability, BSI USE GREENER FUEL SOURCES like biofuels and hydrogen fuel cells. These alternatives are more expensive than traditional fuels, but many carriers are providing this option already thanks to government incentives and rebates

6 Inbound Logistics • June 2023

GOODQUESTION

that help mitigate their costs. Making green fuel the standard will require changing the conversation within our organizations from one focused solely on logistics budgets to a broader sustainability discussion. –Jeannie Carpenter Senior Director, Global Logistics, Jabil STANDARDIZATION OF DIGITAL DOCUMENTS like bills of lading and customs filings would go a long way not only in saving paper, but also in providing all key supply chain stakeholders with accurate data that would help them plan more efficiently and make greener shipping choices. –Martyn Verhaegen Chief Technology Officer Magaya Corporation ONE CLEAR SOLUTION creates the largest impact (20-40% reduction). The greatest way to reduce greenhouse gas emissions is switching from truckload to intermodal transportation. The reduction in ton- miles is material, and you gain the added cost savings associated with hauling your freight via rail. –Jason Roberts SVP & BU President, Avenger Logistics & MODE Enterprise Operations TRANSPARENCY WOULD ENACT the most significant change. Companies tend to lack understanding of their primary suppliers, let alone those farther down the chain. Increased transparency, combined with the wealth of available information used for modeling ESG risks, would provide companies with real, actionable insight. –Hugo Wegbrans EMBRACE A DIGITAL-FIRST MINDSET. Many organizations are hesitant to disrupt the status quo and adopt new technologies. But embracing new tech (data analytics, AI, IoT, and more) is the only way to increase transparency, optimize resource usage, reduce waste, and improve efficiency in today’s fast- paced environment. Global Head, Broking and Broking Strategy, WTW

Shift Gears

Ship your packages via the ground network instead of the express network.

–Micheal McDonagh President, Parcel, AFS Logistics

Adjust your mode of transportation. With the supply chain slowly stabilizing, consider moving back from air freight to ocean freight; review if intermodal transport can augment trucking. In terms of carbon emissions, airplanes produce more than 40 times more greenhouse gas per ton mile. –Andre Luecht Director, Global Strategy Lead–Transport & Logistics, Zebra Technologies

SWITCHING TO SUSTAINABLE MATERIALS AND PACKAGING not only has an immediate environmental impact, but also addresses the expectations of various stakeholders, customers, and regulators. To initiate this shift, companies must first gather information on sourcing processes and integrating sustainability considerations into sourcing scores and decision-making for materially relevant supplier types.

ELIMINATING CO2 EMISSIONS resulting from shipping goods between locations (e.g. from one retail store to another) due to inaccurate forecasting, will make a big difference. To help advance sustainability, artificial intelligence- based allocation planning can ensure each store’s demand is forecasted by store and item.

–Inna Kuznetsova CEO, ToolsGroup

IMPLEMENTING REAL-TIME, ANONYMOUS FEEDBACK TOOLS across all sectors of our supply chain, from truck drivers to warehouse staff, would be transformative for ESG. This approach equips workers with the power to voice their thoughts and issues fearlessly, enriching social sustainability by cultivating a truly inclusive and supportive work environment.

–Katie Martin Principal Lead, Sustainability & ESG, Avetta

HAVING VISIBILITY of cargo shipping costs and the time it will arrive, but also the total greenhouse gas (GHG) emissions. In assessing any goods’ overall climate impact, one needs to understand a complete GHG profile from sourcing, to manufacturing, to logistics impact, to use and disposal. –Peggy Murphy Global VP of Sustainability, PSA BDP

–Max Farrell CEO, WorkHound

Have a great answer to a good question? Be sure to participate next month. We want to know: If you could have a lifeline during a logistics crisis, who would it be and why? We’ll publish some answers. Tell us at editorial@inboundlogistics.com or tweet us @ILMAGAZINE #ILGOODQUESTION

–Matthias Gutzmann CEO and Founder, DPW

June 2023 • Inbound Logistics 7

10 TIPS

Managing Your Ocean Freight

In today’s post-pandemic new normal, beneficial cargo owners (BCOs) can successfully manage their ocean freight transportation by adhering to some sound rules of thumb, while embracing new best practices for the current market dynamic.

1 BE SURE TO READ THE FINE PRINT.

8 SHIP WITH GREEN IN MIND. The day is quickly arriving for commercially viable green ocean transportation options, with many companies developing ambitious sustainability objectives. Many carriers oer dierent “greener” services, but BCOs should carefully examine these oerings to partner with providers that are able to deliver accurate tracking of actual emissions and utilize lower carbon emissions fuel. 9 OPTIMIZE SHIPMENT ROUTING. The world and ocean transportation has changed significantly, with new key ports, intermodal connections, and strategies. Forward- hubbing—the strategic positioning of containers in key regional hubs such as Singapore and Antwerp—oers better delivery reliability to end customers. Barges and rail also provide lower carbon modes of access to the hinterland for greater connectivity optimization.

Find the total cost of transportation and conrm what is xed and what is variable. The ocean market is competitive and some rate offers may be too good to be true. Many BCOs are eager to recoup the higher ocean freight costs spent over the past two years, but it’s still important to understand the terms and conditions. Learn the applicability of future general rate increases and mechanisms for bunker adjustment factor price uctuations.

2 BE A PREFERRED SHIPPER. Large volumes do aord buying power, but ocean carriers also desire regular, dependable BCOs on key routes. Make sure your operations deliver shipments prior to cutos (latest receipt date) and do the same for submitting your shipper’s letter of instructions (SLIs) . 3 ENCOURAGE COMMUNICATION AND DOCUMENTATION. These can be just as important as transportation when selecting ocean partners. How well does the carrier notify of delays? No one wants to find out about a delay after their customer is aware. Does the carrier issue timely and accurate bills of lading? The consequential costs of poor documentation can significantly outweigh the cost of transportation. 4 USE CARRIER SCORECARDS. Scorecards are an eective tool to objectively review data when assessing

transshipment or feeder. If you use a transit time in your enterprise resource planner (ERP) as a delivery-to- promise date for a customer, routinely review the service changes to make sure the confirmed customer ETA is attainable. 7 REDUCE YOUR LEAD TIMES. Similar to transit time, the current state of overcapacity in the ocean market allows BCOs to reduce overall cycle time from order to cash. Lead times were as high as six weeks during the pandemic due to equipment availability and vessel space. In today’s environment, BCOs should be able to cut that in half and perhaps even get on next week’s vessel.

performance under service level agreements. Carrier scorecards provide a quality framework to collaborate on continuous improvement opportunities. 5 DO NOT PUT ALL YOUR EGGS IN ONE BASKET. Many BCOs learned the importance of supply chain resilience the hard way over the past few years. Mitigate risk with carrier selection, rate agreement type, and routings. 6 STAY HYPER-VIGILANT ON TRANSIT TIMES. One ocean shipping alliance has announced its break-up and others may follow suit. A route that was historically direct from point A to point B may move in the future via

10 PARTNER WITH A

NON-VESSEL OPERATOR (NVO). NVOs offer routing flexibility, optionality among carriers, and most importantly competitive rates to help your bottom line. Many BCOs benefited from their NVO partnerships during the pandemic. They have seen fit to increase the NVO’s role in managing ocean freight, allowing them to focus on their products and customers.

SOURCE: ANDREW McLOONE, EXECUTIVE DIRECTOR, PSA BDP

8 Inbound Logistics • June 2023

LEADERSHIP Conversations with the Captains of Industry

A Bolt From the Blue

Mark Ang was only 12 when he and his brother demolished and rebuilt a sixplex apartment building with their father, a property developer. At 14, Ang helped manage construction for the family business. “I was involved in scoping, nancing, getting quotes, working with architects, and ultimately working with the trades to execute the project,” he says. So Ang was already a seasoned business professional when, in his early 20s, he founded Second Closet, a Toronto-based valet storage company that grew to ve locations across Canada. Second Closet later transformed into GoBolt, a technology and logistics company on a mission to build the world’s largest sustainable, vertically integrated supply chain network. Ang is GoBolt’s co-founder and CEO. He recently talked with IL about the company’s history, its current priorities, and his own evolution as a corporate leader. IL: In your construction days, how did vendors respond when they saw a young teen walk into a meeting to strike deals? Fortunately, because our side of the table was paying the bills, they couldn’t react too negatively. And I probably got a bit more leeway when I asked for discounts, because they would think, “This is kind of cute.” I leaned into that. IL: How did Second Closet evolve into GoBolt? As a valet storage company, Second Closet would pick up and store people’s stuff, then bring it back whenever they wanted it. Our vision was that people would use us to maximize their space by storing seasonal possessions. But most people were storing for the long term. My co-founder and I didn’t want our legacy to be that we helped people hoard their stuff more efciently. So we shifted focus. Fortunately, several major brands including Chanel and WeWork were using us for business needs. We decided to pursue more of that business. Slowly we morphed into a third-party logistics provider for brands, providing storage, fulllment, and last-mile logistics. IL: What keeps your customers awake at night? They’re hyper-focused on efciency. Logistics and supply chain are a massive cost for many of our brands and for most of the retail world. We’re having more discussions about how to

Mark Ang CEO, GoBolt

An admitted workaholic, Mark Ang does a day’s worth of work before 8 a.m. While he is there for his team any time of day or night, he is a shockingly hands-off leader who encourages autonomy and gives his team space to spread their wings. by Merrill Douglas

10 Inbound Logistics • June 2023

LEADERSHIP

IL: What do you check rst thing in the morning? Before I get out of bed, even on weekends, I check my e-mail. If there’s something urgent, I can skip my morning coffee because my blood already starts to rush. Then I check my calendar to see if anything has been added or rearranged. I try to get into the ofce as soon as possible, which is easy because it’s a two-minute walk. Once there, I pop open my laptop and check on our operations performance for the previous day—quality, cost, and efciency. Then I look at any incoming opportunities and nd out what solutions our team is thinking of providing, to see if I can offer a different perspective on an even better solution. All that happens before 8 a.m. IL: What books would you recommend that others read? One is The Hard Things About Hard Things by Ben Horowitz. It’s a classic for anyone who’s on an entrepreneurial journey. Another is The 48 Laws of Power by Robert Greene. These laws apply to different parts of your professional and personal life. IL: Beyond work, how do you like to spend your time? I’m a big movie buff. I can rewatch a movie six to 12 times if I really like it. And I try to stay active. Recently I’ve picked up pickleball, which is an intense, fun game where you can trash- talk your partners while you play. n Learn by Doing From his earliest days of knocking down walls, installing plumbing, and laying floors, Mark Ang discovered how crucial it is to learn the nuts and bolts of the business you’re running. “Before I was able to manage a construction project, I had to be a laborer within a project,” he says. “That helped me to understand that you don’t just manage the outcome; you manage the process.” A business process involves many people, with many different perspectives. As a leader, you need to understand those varied concerns so you can communicate effectively, Ang says. “For example, we recently brought on a new chief operating officer,” he says. “We told him that it’s important to do support days and account management days, to be in the trucks and the warehouses, and actually operate as part of the team that you manage.”

strategically set up the supply chain network to take advantage of the customer experience that our brands want, but at an economic level that is sustainable. How do we forward-place some of the product? How do we leverage more electric vehicles (EVs) to offset fuel surcharges? IL: Tell us about your plans to build an electric vehicle eet. By the end of 2023, we want 90% or more of our deliveries to be done by EVs. EVs will help us and the merchants we serve meet our sustainability goals, while also saving customers money by eliminating the 30% fuel surcharge. IL: What challenges do you face in converting to EVs? There are many constraints to consider—grid capacity, vehicle reliability, recharging time, and driver training. We also have to rethink how we route deliveries to account for things like range degradation. If a truck starts out loaded with 10,000 pounds, do you drive that load over a highway at 55 miles per hour or a city street at 25 miles per hour? Then, as you deliver items and shed weight, how does that impact your next sprint? How do winter or summer temperatures affect battery performance? We’re building routing software in house that accounts for all that. IL: What characteristics make you an effective leader? I’m always willing to roll up my sleeves when an issue arises. Whether it’s midnight or 6 a.m., and whatever is required, I’ll be there. That creates a culture at the top of our business where everyone is willing to help, based on the value of ‘one team, one dream.’ Also, I spend the time it takes to explain my decision-making process and make sure we get input from the people who are affected by a decision. IL: How do you nurture talent on your team? I’m very hands-off, shockingly so. We hire people who push the pace and challenge us to be better, and who know their areas better than I do. So I try to give them a ton of space. I stay vigilant and dive in when they need support, but I give them space to spread their wings and exercise their own decision-making.

June 2023 • Inbound Logistics 11

Alcoholic Beverages

3 TIERS OF THE WINE SUPPLY CHAIN We can’t talk about wine without mentioning the Volstead Act, which made it illegal to “manufacture, sell, barter, transport, import, export, deliver, furnish, or possess” such beverages. Prohibition wasn’t just a temporary blip in alcohol manufacturing; it changed the way the supply chain functions. Prior to Prohibition, the manufacture, sale, and transportation of beverages with an alcohol content greater than 1.28% looked di¬erent than it does today. Producers often owned their own retail outlets and served their local communities. Today, alcohol—including wine—is highly regulated in the United States. After the repeal of Prohibition, the wine and spirits industry fractured into a three-tier system: Tier 1: Producers. The first tier includes grape growers, wineries, manufacturers, suppliers, and importers. Tier 2: Distributors. The second tier could be considered the middle man. These are the wholesalers. They purchase wine from the producers and then sell and deliver it to retailers. Tier 3: Retailers. The third tier refers to not just stores but also restaurants. –Thomasnet

The beer brewing industry faces another year of uncertainty and evolving customer tastes. These six trends will guide the industry throughout 2023, according to SevenFifty Daily . 1. Consumers seek value in bulk beer and higher alcohol levels. As consumers try to get the most bang for their buck, they are buying beer in bulk or shopping for higher-alcohol-percentage products. 2. Breweries will trim SKUs and focus on specific styles. Increasing competition for shelf placements in grocery and liquor stores will lead breweries to eliminate slow-moving brands and rally around core beers. Focusing on fewer beers can help breweries better weather the vagaries of ingredient availability. 3. Breweries reclaim carbon dioxide in the face of supply chain disruptions. The carbon dioxide shortage caused a boost in innovation as brewers looked for ways to solve gas supply availability and reduce dependence on delivery. Breweries are also turning to a traditional technique called spunding, which traps carbon dioxide in tanks during fermentation, to naturally carbonate beers. 4. Global crises spur more local beers. The ongoing war between Ukraine and Russia—which together export more than one-quarter of the world’s wheat— and a terrible harvest for European hops will lead breweries to look closer to home for raw materials. 5. Beer merch and variety beer packs oer sales opportunities. The pandemic caused a spike in online shopping, and the digital shift will continue to lead breweries to emphasize online sales for merchandise and, where legally permitted, beer. Variety packs are also fostering aftermarket interactivity. 6. Taprooms become attractive interactive hubs. People now seek compelling places to gather that meet the needs of all ages. A bland taproom that o¬ers only cold beer won’t cut it. 6 BEER TRENDS ARE BREWING

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VERTICALFOCUS

10 LARGEST GLOBAL SPIRITS COMPANIES (Based on current market capitalization) 1. LVMH Moët Hennessy Louis Vuitton . Paris, France 2. Kweichow Moutai. Maotai, China 3. Jiangsu Yanghe Brewery . Suqian, China 4. Anheuser-Busch. Leuven, Belgium

5. Diageo North America . London, England 6. Wuliangye Yibin Co. Ltd. Yibin, China 7. Altria. Richmond, Virginia 8. Pernod Ricard USA . Paris, France 9. Constellation Brands. Victor, New York 10. Brown-Forman . Louisville, Kentucky

THE HARD STUFF The hard seltzer market continues to grow at an unprecedented pace and is expected to reach $76.9 billion by 2033. Additional key takeaways on the market from a Future Market Insights report: • The hard seltzer market is particularly appealing to millennials and Gen Z consumers, who prioritize low-calorie and light beverages. • The hard seltzer market is segmented based on alcohol content, with 5% to 6.9% ABV (alcohol by volume) hard seltzers generating the most revenue, accounting for 52% of market share in 2022. However, the sales of 1% to 4.9% ABV hard seltzers are projected to increase at a compound annual growth rate of around 24% between 2023 and 2032 due to the growing awareness of health concerns and the trend toward moderation, particularly in the United States. • The bottle segment is expected to record a compound annual growth rate of 3.4% due to low processing costs and easy handling. Glass bottles are a popular option because they can be reused and recycled and they are durable. • The o¬-trade distribution channel is the leading segment, generating 71%+ of global hard seltzer market sales in 2022. The segment’s growth was due to factors such as the well-established infrastructure of hypermarkets, supermarkets, convenience stores, and wine and spirit shops. • The on-trade distribution channel segment is projected to expand at a rate of more than 23.5% from 2022 to 2030, fueled by bars, clubs, hotels, and lounges.

SOURCE: Zippia

$1,609 BILLION 2023 revenue in the alcoholic drinks market BEER The market's largest segment at $610 billion in 2023 CHINA Country that generates the most revenue from alcoholic drinks 6.6% OF TOTAL REVENUE will be generated through online alcohol sales in 2023 42% OF SPENDING 25% OF VOLUME CONSUMPTION In the alcoholic drinks market will be attributable to out- of-home consumption–in bars and restaurants–by 2027 9.7 GALLONS Average alcoholic drinks volume per person in 2023 SIP ON THIS

– Statista

June 2023 • Inbound Logistics 13

NOTED [ IN FOCUS ]

The Supply Chain in Brief

> GOOD WORKS

> RECOGNITION

• Technology-driven logistics company TransLoop partnered with Luke Grimes of Yellowstone , Hydroviv, and the Jeff Ruby family to deliver and donate ltration systems to East Palestine, Ohio, in the wake of a train derailment.

• Less-than-truckload carrier ABF Freight won the 2022 Excellence in Cargo Claims & Loss Prevention Award (LTL Division) from the American Trucking Associations. ABF is the first LTL carrier to receive this award 10 times and the only carrier to win for three consecutive years. • AFS Logistics announced the winners of its inaugural LTL Carrier of the Year Award, which acknowledges the national, super regional, and regional LTL carriers that best exemplified outstanding performance and service during the previous year: National- Old Dominion Freight Line, Super regional- Southeastern Freight Lines, Regional- Ward Transport & Logistics. • J.B. Hunt Transport Services recently celebrated 84 company drivers for achieving two-plus million safe driving miles. The company awarded the elite group of drivers a total of more than $1.2 million in safe driving bonuses for their career-defining achievements.

• Trailer Bridge and ATS International held a charity golf tournament that raised more than $104,500 for Habitat for Humanity of Puerto Rico, supporting the organization's efforts to create and preserve home ownership opportunities for low-income individuals and families on the island.

• Nexterus , a supply chain management and third-party logistics provider, announced the Nexterus Charity of the Year for 2023. This year’s charity is Building Bridges for Brianna, a York County, Pennsylvania, charity that helps members of the community deal with and prevent suicidal and non-suicidal self-injury.

> GREEN SEEDS

> MILESTONE

n CN launched a new self-service, sustainability tool, My Carbon Emissions, that gives shippers a detailed report of their estimated greenhouse gas emissions based on their shipments moved on CN, as well as the emissions avoided by choosing rail over truck. n Schneider completed its first-ever battery electric vehicle delivery with Frito-Lay North America, the first company to contract transport on Schneider's fleet of electric Freightliner eCascadia trucks.

n Founded in 1983 as an airfreight specialist in Vienna, cargo-partner is celebrating its 40th anniversary this year. Today, the company offers air, sea, rail, road transport and warehousing services from 160+ offices globally.

n Southeastern Freight Lines is celebrating 70 years of service at its Florence, South Carolina, service center, which opened for business in June 1953 with a handful of dock doors and one associate. Since then, the facility has grown to 67 dock doors and 60 associates.

14 Inbound Logistics • June 2023

NOTED

> M & A

> SEALED DEALS

• Retail and supply chain planning and optimization software company ToolsGroup has been selected by RISI, a leading Spanish snack brand, to help transform its supply chain operations, strengthen retail partner relationships, accelerate business growth, and maximize customer satisfaction. • Nissan Motor Company has partnered with project44 to enhance its resilient global logistics network. The automotive company will use the Movement by project44 platform to gain end-to-end supply chain visibility and improve operational efciency by quickly mitigating disruptions.

n Global materials handling specialist Alstef Group acquired warehouse automation solutions provider Solution Net Systems (SNS). n The Allen Lund Company, a transportation and logistics provider, has completed its acquisition of United World Transportation , a freight brokerage based in Canada. n EFL Global, a logistics and supply chain solutions provider, purchased Locher Evers International , a family-owned Canadian logistics company oering a full suite of logistics services. n Descartes Systems Group acquired the assets of Localz, a technology platform to help engage with customers on the day they’re having goods or services delivered. n Everstream Analytics purchased BlueNode, which automates the enrichment of intermodal logistics data with an AI-powered cleansing and integration engine. The solution helps streamline logistics and facilitates carbon emission measurement and reporting for the maritime corridor.

• Canada-based home and commercial services and energy solutions company Enercare has selected IFS Cloud for Service Management, together with the IFS Planning and Scheduling Optimization software, to streamline service operations and eld productivity.

> UP THE CHAIN

• GreyOrange named co-founder Akash Gupta as chief executive ofcer. Gupta leads GreyOrange’s senior executive team to advance growth of the company’s automation solutions platform.

• MODE Global promoted Gene Welsh to chief transportation ofcer. He previously served as senior vice president of international. As CTO, Welsh will have oversight and accountability for all transport modes.

Old Dominion Freight Line's Board of Directors elected Christopher J. Kelley, who currently serves as the company’s vice president of the Central States Region, to serve as the company’s senior vice president of operations.

n NFI acquired SDR Distribution Services, a

multichannel provider of custom warehousing and distribution solutions in Canada and the United States.

> IN MEMORIAM

• Graham Connor, a preeminent veteran of the pallet industry, has passed away. He was in the industry for 40 years, including 20 years at CHEP and nearly one decade as the president and chief operating ofcer of PECO.

n Papé Material Handling acquired Globe-Bay Area Forklift. Former Globe-Bay Area Forklift customers will gain access to Papé's extensive selection of forklifts and other material handling equipment.

June 2023 • Inbound Logistics 15

TAKEAWAYS Shaping the Future of the Global Supply Chain

Technology Leads the Pack Packaging used to be simply for protecting and identifying a product; now it helps drive sales. Smart packaging—which uses technology to enhance user engagement, product quality, and supply chain efciency—is the latest iteration, according to Smart Packaging 2023-2033 , a new report from IDTechEx. Establishing business models that utilize these technologies to unlock value for brands and consumers will grow the smart packaging market to $2.6 billion in 2033, IDTechEx forecasts. This gure covers just the electronics hardware; the smart packaging market value will be much higher if infrastructure, software, and services are included. Smart packing comprises a range of current and emerging technologies, often with different purposes. These include: • RFID for wireless item identication—usually invisible to the consumer— as well as other identication technologies, including QR codes and capacitive ink approaches. • Electronic Articles Surveillance (EAS) for anti-theft—usually invisible to the consumer. • Data loggers for temperature, shock, vibration, and time and location monitoring. • Interactive smart packaging including light-up, and measuring, such as smart blister packs. • Printed, exible, and organic electronics , including displays, sensors, and batteries. • Chemical indicators for temperature, frozen chemical visual indicators, and active packaging for produce and pharmaceutical monitoring.

AIR CARGO GROUNDED The global air cargo market may have to hang on until October for signs of a recovery. A flood of summer bellyhold capacity on major lanes and a 4% drop in demand in April 2023 indicates challenging months ahead, according to new analysis from CLIVE Data Services, part of Xeneta. Air freight spot rates dropped 41% versus April 2022 as a 7% rise in cargo capacity resulted in lower load factors and a 14th consecutive month of falling volumes year-over-year. CLIVE’s dynamic load factor—which measures global volume and weight perspectives of cargo flown and available capacity—dropped 5% versus 2022 to 57% in April, continuing a more than year-long decline. Summer capacity had its traditionally significant impact on the air cargo market from Europe to North America, with capacity up 26% in comparison to March 2023. Data showed a 10% decrease in load factor across the North Atlantic to 57% in April, compared to the 67% level recorded to major North American airports in March. It remains uncertain whether a rise in demand will come in Q4, as the industry anticipates.

SOURCE: IDTechEx

16 Inbound Logistics • June 2023

TAKEAWAYS

In Asia, this shift has primarily benefited Vietnam, Taiwan, and India, but Mexico has also accounted for a larger share of U.S. imports in the past few years. Since the onset of the pandemic, U.S. imports of Mexican manufactured goods have grown from $320 billion to $402 billion (+26%). That number includes many Chinese companies that have begun manufacturing operations in Mexico to build and expand capacity closer to the U.S. domestic market. As for reshoring, what 10 years ago was merely a promise is now a fact. Kearney’s latest CEO survey indicates that 96% of CEOs are, at a minimum, evaluating the potential to reshore their operations, an increase from 78% in 2022. Most have decided to reshore, or have already reshored. Much of this activity is, directly and indirectly, consumer-driven as U.S. consumers become far more comfortable with paying a premium for American-made products and are increasingly concerned about companies’ ESG stances. Other factors boosting reshoring include new policies from Washington, D.C., and access to increasingly more affordable automation.

RESHORING MOVES BEYOND THE DRAWING TABLE Reshoring and nearshoring have finally matured into commercial realities, finds Kearney’s 10th annual Reshoring Index Report . Reshoring initiatives have become so successful that companies that took a wait-and-see approach to locating manufacturing operations in the past are now scrambling to find facilities in Mexico and the United States. But the road to reshoring is harder than most companies expected and requires thorough preparation and strategic planning, the report cautions. Since 2013, Kearney has noted a slow shift in commercial production away from China to other low-cost Asia Pacific countries and regions—now known as Altasia—and Mexico.

asi_halfpgIL_0623_final_• 5/25/23 2:46 PM Page 1

▪ RAIL INTERMODAL ▪ HIGHWAY CAPACITY ▪ TEMPERATURE CONTROL ▪ INTERNATIONAL ▪ CUSTOMS CLEARANCE

SUSTAINABILITY PROMISE At Alliance Shippers Inc., we continuously work towards arranging cleaner and more energy-efficient transportation services and solutions. Our 2023 Green Supply Chain Partner award underscores our steadfast commitment to a greener environment.

www.alliance.com

June 2023 • Inbound Logistics 17 2017+2019 EXCELLENCE AWARD WINNER CERTIFIED MEMBER SINCE 2006

TAKEAWAYS

Pay Me My Money Down

INDUSTRIAL SECTOR COOLS, MANUFACTURING HEATS UP Following record high demand and rent prices notched during the pandemic, the industrial sector’s dynamics are shifting and demand is cooling, finds a new U.S. industrial market update from Savills. Some predictions about where things are headed from here: • Vacancy rates are on the rise. While the market is still historically tight, vacancy rates are inching higher as occupiers take less space and sublease availability increases. • New construction slows. Construction activity is slowing in the sector, with new starts down 38% since this time in 2022. Given the interest rate uncertainty impacting the entire real estate industry and the danger of oversupply— particularly in Sun Belt markets—new development has started to halt. • Port volumes are down. Ports around the country are seeing lower container volumes, with the West Coast most impacted by the drops. • Manufacturing poised for growth. Despite economic headwinds, manufacturers remain poised for long- term growth due to the reshoring of production, especially electric vehicles. At the same time, e-commerce companies’ demand for new space will drop as growth in the sector slows. • Occupiers gain leverage. Market conditions should a¥ord tenants more options as well as leverage in negotiations. Savills expects to see rents continue to stabilize and more flexible deal terms, including landlord concessions, on the horizon.

What are the best and worst paid industries in America? To rank them, Lensa conducted a study that looks at average weekly earnings compared to the average weekly hour worked. The industry with the lowest average earnings is leisure and hospitality, in which employees only take home $506 every week ( see chart below ). This is just 25.9% of what workers in the utilities industry earn and less than half of the private sector average. INDUSTRIES WITH THE LOWEST AVERAGE SALARY PER HOURS WORKED

Average Weekly Hours Worked

Average Weekly Earnings

Average Salary per Hour Worked

Rank

Industry

Leisure and hospitality

26.1

$506

$19.40

Retail trade

31.3

$704

$22.50

Transportation and warehousing

38.1

$1,042

$27.36

Other services

32.3

$918

$28.42

Manufacturing

40.4

$1,226

$30.35

Education and health services

33.4

$1,036

$31.01

Private service-providing

33.7

$1,055

$31.31

Goods-producing

40.1

$1,271

$31.69

Construction

39.2

$1,318

$33.62

Wholesale trade

39.2

$1,349

$34.42

The industry with the second-lowest average earning is retail, in which workers work an average of 31.3 hours per week. Despite this, the average salary is just $704 per week. In third place is transportation and warehousing, in which employees take home $1,042 every week. The average hours worked per week in this industry is 38.1. The Lensa study also looks at the industries with the highest weekly earnings. Utilities is the industry with the highest average weekly earnings at $1,953, which is $861 higher than the private sector average of $1,092. Second on the list is the information industry, earning an average of $1,659 per week. Mining and logging is the industry that earns the third most per week, with an average salary of $1,601.

18 Inbound Logistics • June 2023

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