John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
Steve Sellentin has little sympathy for consumer goods manufacturers chafing under RFID mandates from giant retailers like Wal-Mart. For them, compliance is a snap, he says. You just tag a dozen or so items and the customer goes away happy. Sellentin's customers aren't so easily satisfied. He fully expects that his company will be required to tag as many as 50,000 products by the end of the year.
Sellentin is vice president of sales at Government Scientific Source (GSS), the largest dedicated distributor of scientific equipment and supplies to federal, state and municipal laboratories as well as the Department of Defense (DOD). Like all DOD suppliers, GSS has been required to affix RFID tags to all DOD-bound shipments since Jan. 1 (although the government is still not ready to receive tagged shipments). That requirement is likely to expand before long. GSS expects to receive notices from the Defense Logistics Agency (DLA) and the Navy any day now requesting that he begin sending them RFID-tagged shipments. (For now, only cases and pallets will require tags, although the government is examining item-level tagging as well.)
When the government does pull the trigger, GSS will be ready. "We're just waiting for them to push the button," says Sellentin, who is using Gen 2 equipment and tags purchased from Symbol Technologies for 35 cents apiece. Sellentin estimates that up to 25 percent of GSS's shipping volume could be affected in the beginning. Eventually, up to 80 percent of its products—everything from cloth ing to food and medicine to lab equip ment and supplies—may fall under the requirement if the practice spreads to agencies like the Department of Energy, which is examining how it can best use RFID.
Anything goes
It's probably safe to say that GSS's RFID compliance program is unprecedented in its scope. In fact, some consider it to be the largest tagging venture by a single company to date. GSS carries 1.2 million different products—items ranging from commodity supplies like latex gloves to million-dollar pieces of robotic equipment. Sooner or later, all of them will require RFID smart tags. "We're tagging everything from 50-cent test tubes and vials to plate readers and weapons of mass destruction," says integrity and the product [would Delayed gratification Sellentin.
What has made the job particularly challenging is the nature of some of the products GSS ships. For example, the company ships large volumes of temperature-controlled liquid chemicals to the DLA. In the RFID world, those shipments, which combine liquids and metals (the chemical containers are packaged in boxes wrapped with insulating foil), represent what amounts to a double whammy.Metal reflects RF signals, and liquids absorb them, compromising the accuracy of tag reads.
"I wasn't worried about tagging a case of test tubes," says Sellentin. "My concern was tagging a case of temperature-controlled life sciences chemicals. If that tag doesn't read, the carton will be diverted for manual processing. While it's sitting there, it could lose its temperature integrity and the product [would be] ruined."
Anxious to avoid that scenario, Sellentin called in experts from systems integrator epcSolutions and Zebra Technologies. The team solved the problem by applying the RFID smart label to a rubber plate placed on the foil-wrapped boxes, which provided enough of a buffer to shield the smart label's tag from the interference inside.
While that resolved the metal and liquid problems, there was still the temperature-controlled aspect to consider. Many of the products that GSS ships are frozen, often stored at -40 degrees Celsius. No one knew how the tags would be affected by extreme temperatures. To find out, Sellentin's team froze a batch of RFID tags to see how they would react. "We didn't know what to expect," he says, "but they passed with flying colors."
Delayed gratification
Right now, GSS is still awaiting word from the DOD as to when it should begin shipping products with the smart tags. Sellentin expects that word will come sometime this month. Although it's continuing to prepare for a full-scale implementation, GSS will initially apply smart tags only to the shipments it's required to tag. To identify those shipments, epcSolutions software will check the shipto address for all products arriving at GSS's distribution centers. If the address is for a DOD facility that requires RFID, the software will direct the shipment labeling system to produce a smart label, which will be manually applied to the carton and immediately verified using a handheld interrogator. RFID-tagged shipments will be verified a second time through an RFID pOréal reader immediately before leaving the GSS distribution center.
To date, GSS has handled RFID labeling as a stand-alone operation. However, the system ultimately will be upgraded so that GSS can integrate its smart labeling operations with its inventory control and warehouse management systems. At that point, GSS will also be able to produce advance ship notices automatically.
For all its investment in training and RFID equipment, GSS doesn't expect to see immediate benefits. (The government, however, stands to gain by automating and simplifying an archaic and inefficient receiving system.) Right now, the best GSS can hope for is a faster turnaround on payments from the government.
Nonetheless, Sellentin believes the effort will pay off down the road. "Having the capability to do this will only help to make us a value-added player with our suppliers and with the U.S. government," he says. "That's why we're doing this."
As it gains more experience with RFID, GSS hopes to incorporate the technology into its internal DC processes. GSS itself deals with more than 250 major suppliers and manufacturers, and processes millions of separate line items. "[W]e face many of the same challenges as the U.S. government," Sellentin points out. "We also have to figure out how to receive materials from all these folks and have it done right."
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."