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.
You open the front door and are delighted to find a package containing the lamp you ordered yesterday. But when you pick up the carton, you hear the telltale clink of broken glass. Before you can pick up the phone to complain, however, you look up and see the express carrier's driver sprinting across your lawn bearing a carton with a replacement lamp—this one, happily, fully intact.
Sounds too good to be true? That scenario may be closer than you think ... and it will likely be made possible by the magic of RFID. Among other projects, express delivery companies are busy running tests to see whether RFID tags can reliably detect damage to packages and automatically prompt the shipper to send a replacement. "There are just so many possibilities," says Bob Berg, an RFID specialist at DHL. "RFID could be used to track if a package was dropped from beyond its drop specifications, or [if it] got wet or was tipped on its side." With early notification of the mishap, he says, the carrier could ship a replacement while the first one was still in transit.
It's hard to imagine an industry where RFID holds out more potential than the overnight package delivery business. True, the major players already possess advanced systems to track packages, but it's clear that they see RFID playing a role some day. DHL, for instance, has pledged that it will tag every package it delivers by 2015. UPS, meanwhile, has invested in three RFID-related startup companies, including Impinj, a supplier of RFID chips and tags. FedEx, too, acknowledges that RFID is the way of the future. "RFID is going to play an important role in the future of shipment and package movement," says David Zanca, FedEx's senior vice president of information technology.
Beyond detecting damage to packages, RFID also offers great potential for tracking. Customers who ship high-value goods are already asking for tracking solutions that make use of active RFID tags—tags with their own power source.
Eventually, DHL hopes to use RFID to offer customers tracking data so detailed and accurate that they can dispense with costly inventory stockpiles."We're hoping that the increased visibility we'll have into shipments, and the information we'll be able to transfer to the customer in real time, will result in the customers' having a better opportunity to manage their freight while it's still in the DHL pipeline," says Berg. "By eliminating some of their inventory warehousing, RFID could help to fine-tune [clients' just-in-time operations]."
Recommended for internal use, too
In the end, however, RFID's greatest promise may lie not in the "extras" parcel carriers can offer their customers, but in its ability to streamline the carriers' internal operations. Carriers could use routing data collected via RFID, for example, to identify mis-sorts and get misdirected items back on track for on-time delivery.
Then there's RFID's well-documented ability to reduce paperwork and eliminate time-consuming data collection tasks. "The process of manually scanning bar codes at certain points could be replaced with tag readers,
so as you load a container, packages pass through a pOréal and you get a read on the tag," says Zanca. That's much faster than having a worker scan the bar code and manually place the package in the container.
It's not just faster; it's cheaper. "Having a person pulling a trigger on a bar-code scanner represents a considerable cost to us," notes DHL's Berg. "Internally, where we can replace manual bar-code scanning with RFID and automated scanning would be a big plus for us."
UPS already has a pilot under way to test the feasibility of using RFID tags to track containers moving within its processing centers. As part of the test, the carrier has affixed passive RFID tags—tags with no batteries or power source of their own—on reusable tote boxes used to convey small packages and irregularly shaped packages within its own facilities. The pilot's first phase was conducted at the carrier's state-of-the-art automation testing facility in Atlanta, which replicates most automation systems used in UPS's global operations. The pilot's second phase is currently under way at Worldport, the UPS international air hub located in Louisville, Ky., where 1,000 tote boxes have been tagged with RFID labels.
Active interest
Though UPS's pilot is a notable exception, most RFID applications in the parcel delivery world have involved active tags. "We've used active tags quite successfully for a number of years," says FedEx's Zanca. "We've deployed them in our operations in a number of places—on our trailers as they come into facilities with gate readers, and we've tagged containers and various other assets."
But as reliable and capable as they may be, those active tags have yet to transform the industry. What will finally ignite the RFID revolution, analysts say, will be their less capable brethren, the passive tags. The explanation lies in the tags' cost. Active tags are too expensive to use for tracking the millions of shipments the big parcel carriers move each day. But passive tags, which are much cheaper to manufacture, may someday make tagging feasible.
Problem is, that technology is not yet ready for prime time—at least where the overnight delivery business is concerned. "We think ... passive tag technology has a very important place in the future," says Zanca, "but as of today, all of our field work has shown there are still read rate problems and reliability issues. ...We continue to work with them in a lab environment in the field, but they are not reliable enough for us to run a sorting operation or to provide tracking information to our customers from those tags."
And even if the reliability issue could be resolved, the tags' costs are likely to inhibit their widespread adoption in the near term. "The 10-cent tag will not take RFID into mainstream supply chain applications," says UPS representative Donna Barrett. "Technology breakthroughs are required before tag costs drop to [the] point where RFID replaces bar codes." Even if tag prices were to drop precipitously, she adds, companies would still have to invest in tag readers and related equipment.
Still, most observers believe it's only a matter of time before the express industry goes over to RFID. DHL has already gone public with its plans to tag all of its shipments within the decade. And though he doesn't specify a timeline, it's clear FedEx's Zanca is thinking along the same lines. "It's safe to say this technology will evolve to the point where it will have a place on all of our shipments and packages and be an important part of our operations," he says. And UPS? Right now, the carrier says it has no immediate plans to tag individual packages. But that will undoubtedly change if one of its competitors takes the plunge. In the race to move packages smarter, faster and cheaper, no one wants to risk getting a slow start out of the gate.
RFID goes postal
Consumers beware: Postal services around the world have big plans to read your mail. But postal patrons need not worry about local letter carriers' scanning their private correspondence. The readers will be RFID pOréals that scan individual pieces of mail to expedite sorting and dispatching.
Though the U.S. Postal Service has been something of a laggard in this regard—it's just now looking at ways to use RFID—other countries are swiftly moving forward with the technology. Swedish Post, for example, is using RFID-enabled postal sorting equipment, RFID cards that monitor drivers' access to postal vehicles, and RFID systems to detect package tampering.
Korea is looking at using RFID to automate the entire process of mail delivery, from the time a package is accepted through classification and dispatching. And postal officials in India and Taiwan have already met with Microsoft to discuss using a new postal-related RFID package that Microsoft unveiled at the Taipei 2005—18th Asian International Stamp Exhibition last fall.
Microsoft's sudden interest in postal systems is easily explained by the market's growth projections. Analysts at London-based Research and Markets project that the global market for postal-related RFID systems (including tags) will be worth at least $3 billion by 2016—a number that could go much higher if item-level tagging gains acceptance earlier than expected. The study predicts over one trillion postal items will be tagged yearly, making the sector second only to the retail supply chain when it comes to the worldwide market for RFID.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”