There's high-density storage and there's narrow-aisle storage, but Schenker's gone one better: no-aisle storage. Its ultra-dense system stores pallets 24 deep and requires no human intervention.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
There's no standing in the aisles at Schenker's two Toronto-area DCs. There's no stacking pallets of detergent or cases of tea in the aisles either. In fact, there are no aisles in the storage areas of either of these facilities. The two DCs, through which Schenker distributes Unilever's packaged foods and personal care products across Canada, boast ultra-dense storage systems that store pallets 24 positions deep using sophisticated mechanical devices. And because their operations require no assistance from humans, the systems require no aisles.
These distribution systems—designed jointly by Schenker of Canada and its client, Unilever Canada—were chosen for their ability to accommodate Unilever's need for high-volume order fulfillment while preserving the flexibility required by a third-party logistics service provider (3PL) like Schenker. They incorporate several innovative material handling technologies new to the North American market, which required a substantial investment on Schenker's part. But the 3PL didn't let that stand in its way. "They wanted to take their distribution to the next level," says Jason Cunneyworth, senior director of logistics and general manager of Schenker Distribution in Canada, "so we were willing to spend the money to provide the service levels they desired."
As may have become evident, this is no ordinary third-party partnership. For one thing, its roots run deep. The relationship between the two companies dates back to the early 1990s when Schenker began distributing powdered laundry detergent for one of Unilever's divisions. That wasn't an exclusive arrangement, however. At the time, each of Unilever's divisions made its own deals, which meant the company ended up using an array of vendors. That made it tough for Unilever to optimize its processes and manage its inventory levels.
And it prevented the conglomerate from leveraging its size to reduce distribution and transportation costs.
When it acquired Best Foods brands in 2000, Unilever seized the opportunity to centralize its business. It would contract with just one third party, Schenker, consolidating its Lipton and Best Foods brands in a DC Schenker would build in Brampton, Ontario, and consolidating its consumer goods in an older Schenker facility in Mississauga. This deal, through which Schenker became Unilever Canada's largest logistics service provider, would be a long-term agreement. In contrast to the standard five-year 3PL contract, this arrangement would run for double that term, 10 years.
Cool runnings
Once the contract was signed, the planning could begin. The DCs would require some retrofitting, which would be carried out over several years while the facilities continued to operate.
It's important to note that the goal was not a completely mechanical operation."We did not go with full automation in the facilities," says Leonard Bayard, manager for third-party warehousing at Unilever. "It was more of a 'strategic' automation approach." That strategic automation would include major upgrades to storage systems to create semi-automated storage, installation of a layer picking system capable of selecting layers of products for building mixed pallets, and upgrades to warehouse management software and IT systems.
Today, Schenker distributes everything from Lipton's soups and Red Rose Tea to Ragu sauces through the Brampton DC. The 288,000-square-foot center processes 100 orders per day, amounting to some 17 million cases each year. Though the center has only been open a few years, Schenker has already made some modifications. For example, this past April, it dismantled one of the two-level pick towers used for selecting full cases and replaced it with a more efficient layer picker. This unit, which is basically a rail-guided counter-balanced vehicle, uses four-sided clamps to select layers of cases from product pallets and place those full layers onto an order pallet to create rainbow loads of mixed SKUs. The system, which can pick up to 1,400 cases per man-hour, has cut labor needs and reduced damages and is well on its way to achieving its projected return on investment of two years.
The other facility, the 480,000-square-foot Mississauga DC, handles all of Unilever's personal care consumer products, including the Vaseline, Dove, Sunlight, Pond's, Degree deodorant, Suave, Lever 2000, Q-Tips and Salon Selectives brands. This facility processes 50 orders daily, which translates to 13 million cases annually. Like the Brampton site, the Mississauga DC ships about 45 percent of its items as full pallets and 55 percent as case picks.
Although the facility itself is 30 years old, it houses some of the most up-to-date technology on the continent. When it underwent renovations in the late '90s, Mississauga became the first site in North America to feature a semi-automated storage system known as a Pallet Runner system. This technology, which has been used for several years in Europe, was later replicated in Brampton.
The Pallet Runner system, supplied by Pacific Westeel, provides high-density storage of pallets 10 to 24 positions deep and requires a very small footprint. The system, which offers the density of drive-in racking without the need to drive a vehicle into it, could basically be described as a storage area without aisles—you can't get any denser than that. The system operates using small shuttle carts, known as pallet runners, which carry pallet loads deep into the racking.
In operation, lift trucks carry pallets of incoming products to the end of the storage racks. The driver scans a pallet and receives instructions via an RF device telling him which end row the pallet should enter. He then uses the lift truck to place a pallet runner shuttle (there are six of these shuttles in the Mississauga facility) into the slot at the end of the rack where that SKU will be stored. He next deposits the pallet load on parallel rails just above the pallet runner. The driver then presses the "In" button on a remote control that directs the hydraulic lifts on the pallet runner to lift the load a few inches above the rails. The battery-operated pallet runner then shuttles the load down its row to the next available position and hydraulically lowers the pallet onto the rack rails for storage. Once the load is deposited, the pallet runner returns to the beginning of the row to repeat the process until all positions are filled.
When it comes time to retrieve items to fill orders, the products are extracted from the opposite end of the racking. Once the first pallet of an SKU row is removed, a shuttle is inserted to bring the next pallet to the end position, where a lift truck can gather it as well. The system is also capable of performing a "shuffle." In this function, a shuttle is inserted into the racks to automatically index all pallets forward toward the end positions, keeping products ready to be quickly pulled from the storage area.
Saving space and time
The beauty of this system is that it promotes first in/first out processing while still providing very dense storage. The Mississauga Pallet Runner system is five levels high and stores 8,900 pallets that normally contain about 100 different SKUs (one SKU per storage row). That represents an enormous improvement in space utilization. "Within the same footprint, we can store 4,000 more pallets than we could with floor stacking," says Cunneyworth. That's a big plus in Schenker's eyes. "Real estate is an expensive commodity," he notes. "We have to use our space wisely."
The system has proved productive, too. "We're two pallets per man-hour more productive with this system than we were before," reports Cunneyworth. That's because lift truck drivers no longer spend time in the racks performing putaway and picking duties. The pallet runners now take care of those tasks. Plus the lift trucks don't have to wait around while the shuttles carry products to their storage positions deep within the racks; they can be off retrieving more loads from the docks.
Along with improving productivity, the new system has improved safety and reduced product damage. The pallet runner system is more accurate than lift trucks when it comes to placing pallets into their storage positions, which means products are less likely to bump into the racks' sides when entering and exiting. The system doesn't require the high ceilings typically found in dense storage systems. The clear ceiling height in Mississauga is only 28 feet.
Elsewhere in the building, full cases are selected in the pick towers from racks. These cases are placed directly onto a conveyor belt that feeds a shipping sorter. Using recirculation, the sorter can be programmed to route products down shipping spurs according to a particular sequence, such as delivering a single SKU to a pallet or sorted according to expiration dates. The sequence can also reflect the order in which cases are to be stacked, with heavier items, for instance, sorted first so that they can be manually placed on the bottom of a pallet load.
Only the beginning
Along with boosting productivity and improving both safety and handling, the new systems have increased accuracy. Schenker reports that accuracy has increased to better than 99.5 percent from the low 90s just a few years ago. As a result, returns have dropped to about half the former levels.
The efficiencies have also allowed better labor management. "Our labor force has been where the real reductions have occurred," says Unilever's Bayard. "I can't believe how few people work in our warehouses." Those labor savings have contributed to a reduction in overall costs of as much as 20 percent.
Cunneyworth credits communication for the success. "You have to be very involved with your client to understand their business and make sure the cultures fit," he says. Apparently, the cultures have been a good fit. Both companies hope their 10-year deal will be only the beginning of many years of successful collaboration.
The Port of Oakland has been awarded $50 million from the U.S. Department of Transportation’s Maritime Administration (MARAD) to modernize wharves and terminal infrastructure at its Outer Harbor facility, the port said today.
Those upgrades would enable the Outer Harbor to accommodate Ultra Large Container Vessels (ULCVs), which are now a regular part of the shipping fleet calling on West Coast ports. Each of these ships has a handling capacity of up to 24,000 TEUs (20-foot containers) but are currently restricted at portions of Oakland’s Outer Harbor by aging wharves which were originally designed for smaller ships.
According to the port, those changes will let it handle newer, larger vessels, which are more efficient, cost effective, and environmentally cleaner to operate than older ships. Specific investments for the project will include: wharf strengthening, structural repairs, replacing container crane rails, adding support piles, strengthening support beams, and replacing electrical bus bar system to accommodate larger ship-to-shore cranes.
The Florida logistics technology startup OneRail has raised $42 million in venture backing to lift the fulfillment software company its next level of growth, the company said today.
The “series C” round was led by Los Angeles-based Aliment Capital, with additional participation from new investors eGateway Capital and Florida Opportunity Fund, as well as current investors Arsenal Growth Equity, Piva Capital, Bullpen Capital, Las Olas Venture Capital, Chicago Ventures, Gaingels and Mana Ventures. According to OneRail, the funding comes amidst a challenging funding environment where venture capital funding in the logistics sector has seen a 90% decline over the past two years.
The latest infusion follows the firm’s $33 million Series B round in 2022, and its move earlier in 2024 to acquire the Vancouver, Canada-based company Orderbot, a provider of enterprise inventory and distributed order management (DOM) software.
Orlando-based OneRail says its omnichannel fulfillment solution pairs its OmniPoint cloud software with a logistics as a service platform and a real-time, connected network of 12 million drivers. The firm says that its OmniPointsoftware automates fulfillment orchestration and last mile logistics, intelligently selecting the right place to fulfill inventory from, the right shipping mode, and the right carrier to optimize every order.
“This new funding round enables us to deepen our decision logic upstream in the order process to help solve some of the acute challenges facing retailers and wholesalers, such as order sourcing logic defaulting to closest store to customer to fulfill inventory from, which leads to split orders, out-of-stocks, or worse, cancelled orders,” OneRail Founder and CEO Bill Catania said in a release. “OneRail has revolutionized that process with a dynamic fulfillment solution that quickly finds available inventory in full, from an array of stores or warehouses within a localized radius of the customer, to meet the delivery promise, which ultimately transforms the end-customer experience.”
Commercial fleet operators are steadily increasing their use of GPS fleet tracking, in-cab video solutions, and predictive analytics, driven by rising costs, evolving regulations, and competitive pressures, according to an industry report from Verizon Connect.
Those conclusions come from the company’s fifth annual “Fleet Technology Trends Report,” conducted in partnership with Bobit Business Media, and based on responses from 543 fleet management professionals.
The study showed that for five consecutive years, at least four out of five respondents have reported using at least one form of fleet technology, said Atlanta-based Verizon Connect, which provides fleet and mobile workforce management software platforms, embedded OEM hardware, and a connected vehicle device called Hum by Verizon.
The most commonly used of those technologies is GPS fleet tracking, with 69% of fleets across industries reporting its use, the survey showed. Of those users, 72% find it extremely or very beneficial, citing improved efficiency (62%) and a reduction in harsh driving/speeding events (49%).
Respondents also reported a focus on safety, with 57% of respondents citing improved driver safety as a key benefit of GPS fleet tracking. And 68% of users said in-cab video solutions are extremely or very beneficial. Together, those technologies help reduce distracted driving incidents, improve coaching sessions, and help reduce accident and insurance costs, Verizon Connect said.
Looking at the future, fleet management software is evolving to meet emerging challenges, including sustainability and electrification, the company said. "The findings from this year's Fleet Technology Trends Report highlight a strong commitment across industries to embracing fleet technology, with GPS tracking and in-cab video solutions consistently delivering measurable results,” Peter Mitchell, General Manager, Verizon Connect, said in a release. “As fleets face rising costs and increased regulatory pressures, these technologies are proving to be indispensable in helping organizations optimize their operations, reduce expenses, and navigate the path toward a more sustainable future.”
Businesses engaged in international trade face three major supply chain hurdles as they head into 2025: the disruptions caused by Chinese New Year (CNY), the looming threat of potential tariffs on foreign-made products that could be imposed by the incoming Trump Administration, and the unresolved contract negotiations between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX), according to an analysis from trucking and logistics provider Averitt.
Each of those factors could lead to significant shipping delays, production slowdowns, and increased costs, Averitt said.
First, Chinese New Year 2025 begins on January 29, prompting factories across China and other regions to shut down for weeks, typically causing production to halt and freight demand to skyrocket. The ripple effects can range from increased shipping costs to extended lead times, disrupting even the most well-planned operations. To prepare for that event, shippers should place orders early, build inventory buffers, secure freight space in advance, diversify shipping modes, and communicate with logistics providers, Averitt said.
Second, new or increased tariffs on foreign-made goods could drive up the cost of imports, disrupt established supply chains, and create uncertainty in the marketplace. In turn, shippers may face freight rate volatility and capacity constraints as businesses rush to stockpile inventory ahead of tariff deadlines. To navigate these challenges, shippers should prepare advance shipments and inventory stockpiling, diversity sourcing, negotiate supplier agreements, explore domestic production, and leverage financial strategies.
Third, unresolved contract negotiations between the ILA and the USMX will come to a head by January 15, when the current contract expires. Labor action or strikes could cause severe disruptions at East and Gulf Coast ports, triggering widespread delays and bottlenecks across the supply chain. To prepare for the worst, shippers should adopt a similar strategy to the other potential January threats: collaborate early, secure freight, diversify supply chains, and monitor policy changes.
According to Averitt, companies can cushion the impact of all three challenges by deploying a seamless, end-to-end solution covering the entire path from customs clearance to final-mile delivery. That strategy can help businesses to store inventory closer to their customers, mitigate delays, and reduce costs associated with supply chain disruptions. And combined with proactive communication and real-time visibility tools, the approach allows companies to maintain control and keep their supply chains resilient in the face of global uncertainties, Averitt said.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.