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.
When something needs to be moved or stored in or around the DC, most people grab a box—a corrugated carton. A mainstay of shipping operations everywhere, the familiar six-sided carton can be used for an endless variety of applications. But it's not necessarily the best choice. For all its virtues, the corrugated cardboard box has drawbacks too: it's an easy target for thieves, it's easily pierced or crushed, it's prone to snagging when used in automated handling operations, it requires disposal after use. That's why more and more operations are bypassing cardboard for an alternative that has none of these shortcomings: the returnable plastic container.
It's not hard to understand why returnables are making headway in the container market. Most commonly made of plastic (though they can be made of wood or metal), returnable containers trump cardboard in a number of ways, their advocates say: They reduce purchasing and disposal costs. They offer a higher level of security. They offer better ergonomics. And they do a better job of cubing out space.
Better still, they're versatile. Returnables come in designs and sizes to fit just about any application. Large bulk containers, for example, can be used for transporting large items (or a multitude of small items) or for storing products in racks. They're typically designed with fork entries to allow easy transport via lift trucks or pallet jacks. And many times these containers offer hinged side doors that, when lowered, allow easy access to the items inside. Many bulk containers also come with collapsible sidewalls so that they can be easily stored or transported when empty.
Smaller containers are typically designed so that when placed side by side, they match the footprint of a standard 40- by 48-inch pallet. They offer a wide range of stacking configurations, and most are designed with top and bottom grooves to facilitate stacking into solid cubes that can max out available space in storage racks or on trucks. Top covers—and sometimes straps—hold the load together during transit for a secure ride.
Safe and secure
Returnables easily outperform their corrugated counterparts when it comes to product protection, according to plastic container manufacturers. Most returnable containers used for shipping offer hinged lids to help protect the products placed inside. Typically, they're also designed to accommodate security cable ties that loop through the lid and a hole in the container's sidewall. This locks the lid in place and discourages theft of the contents. A broken tie provides an easy method of identifying containers that may have been breached. And because they are made of sturdy plastic, which resists piercing or crumpling, these containers also tend to protect products better than corrugated cartons can.
Most returnable containers are also designed to stack one on top of another to save floor space. Turn one container 180 degrees in the opposite direction and it can be inserted into the empty tote below it for dense stacking. This "nesting" feature allows a large number of empty totes to occupy a small space in storage racks or for transit back to the facility.
Because plastic containers come in uniform sizes, they're ideal for use with automated material handling systems. They're also the container of choice for automated mini-load systems and carousels because, unlike corrugated cartons, they have no rough edges that can snag when used in automated systems. Further, they can be easily transported on conveyors and sorting systems.
Plastic containers are also designed to work well with the latest in inventory control technology. Most are designed with special areas on their outside panels to accommodate bar-code labels and RFID tags. These areas are recessed so that conveyors or other material handling equipment will not tear the tags as they move through the distribution operations.
Easy on the back
Plastic returnable containers also offer
ergonomic advantages over cardboard cartons, according to plastic crate manufacturers. Easy-to-grip handles on the plastic containers' ends make them much easier to lift and move than corrugated cartons. And their uniform size helps ensure that loads don't exceed weight limits. Many companies will designate specific sizes of containers for certain classes of products, knowing exactly how many items can be picked into the containers before they reach a maximum threshold for safe lifting.
Since plastic containers can be made in virtually any color, some facilities designate certain colors to represent the various functions within the distribution facility. Red may be reserved for picking tasks, while a green container may signify that the items inside are destined for a value-added service station.
Taking advantage of this, some of the more sophisticated conveyor systems have sensors built in that are able to distinguish colors. Pickers completing a wave of orders may pick the last products into, say, a yellow container to signal that this completes the wave. Once the container is sent off to the sorting equipment, the sensor identifies the yellow tote as the last tote to be diverted to a particular spur line.
Closing the loop
By their very nature, plastic containers must be reused again to be cost effective. Because of this, most reusable containers in use at distribution centers are used exclusively within the facilities. But that's not always the case. Some companies have developed distribution systems that call for their containers to be shipped out to stores and select customers. These, however, must have some mechanism for returning the containers to the distribution center for reuse. Companies operating such closed-loop systems often ship the containers on their own dedicated fleet (see sidebar). Filled totes are dropped off at delivery and empties are gathered for the return trip back to the DC.
Pooled container programs offer an alternative for those companies wishing to use reusable containers but that don't operate under a closed-loop distribution model. With pooled programs, the containers are owned by the pooling company. The pooler takes responsibility for retrieving the empty containers, washing them and delivering fresh empties to the distribution centers.
The best thing about returnable containers is that they can be used over and over again, making them extremely cost effective.When they do reach the end of their lives following hundreds of trips, they can be recycled easily, which also makes them a sound environmental choice.
urban legends
For Sneaker Villa, a chain of a dozen stores featuring the latest hip-hop clothing and shoes designed for the urban lifestyle, corrugated boxes are so yesterday. Last year, the Philadelphia-area chain bought 500 reusable plastic containers from Buckhorn to replace the corrugated boxes it was using to ship split-case orders of clothing and accessories to its stores. The company was so pleased with the totes' performance that it bought another 500 this summer.
Today, jeans, sweatsuits, jerseys, belts and other accessories (everything but the shoes) are picked into plastic containers at the company's Wyomissing, Pa., distribution center, before being loaded onto Sneaker Villa's own fleet of trucks for transport to stores. About 500 totes ship weekly, with most stores receiving deliveries two to four times during the week. Each store delivery includes anywhere from 15 to 50 containers, depending on store volumes and the selling season.
Once emptied, the containers can be nested inside each other to save space when stacked in the stores' backrooms. The empties are picked up for the return trip back to the DC upon the next delivery.
The durable totes, each measuring 27 by 17 by 12 inches, are uniform in size, which makes them easy to handle. That uniform size also provides much more stable stacking for transit than cardboard cartons can and makes it easier for managers to calculate payloads. "They cube out the pallet and allow us to easily know how many containers can fill a truck," explains Brandon Naples, warehouse manager for Sneaker Villa.
The plastic totes easily outperform cardboard boxes when it comes to product protection. And the attached-lid totes offer greater security than the corrugated boxes they replaced. Sneaker Villa uses cable ties to seal the lid of each container before it leaves the DC, so it can tell at a glance if a container has been opened.
The plastic containers offer other advantages as well. For example, the containers feature textured side panels that make it easy for workers to remove old shipping labels before new ones are applied. They also feature ergonomic handles that make the totes easy to lift and carry, reducing the potential for injuries. "We have not had anyone hurt lifting them," says Naples. "The handles make them so much easier to move."
the case for cardboard
For every company like Sneaker Villa that's embracing the plastic returnable container, there are several others that are sticking
with the plain old cardboard box. For all the recent interest in returnables, corrugated boxes, with their ready availability and low cost, still far outsell their plastic counterparts.
That's not to imply that users only choose cardboard as a matter of convenience. Corrugated boxes offer a number of benefits, according to the Corrugated Packaging Council, a Rolling Meadows, Ill.-based advocacy group. On its Web site (cpc.corrugated.org), the council provides an extensive list of the advantages of using corrugated cartons, including the following:
Low shipping costs. With their light weight, high stacking strength and space-efficient packing geometry, corrugated cartons are cheaper to ship than plastic crates, the council claims. And unlike companies using plastic containers, those who choose cardboard avoid the expense of returning the containers, cleaning the crates, tracking their whereabouts in the distribution system, and modifying existing packing methods and equipment to accommodate the new shipping container.
High level of product protection. The fluted construction of a corrugated box offers superior product protection through built-in air cushioning, according to the council. If needed, cartons can be customized to provide extra protection for heavy, fragile or hazardous materials.
Ease of customization. Today's computer-designed corrugated boxes can be customized to accommodate an ideal pack count for a particular commodity. In addition, corrugated packaging can be cut and folded into an infinite variety of shapes and sizes.
Supports marketing efforts. Corrugated packaging can be printed with colorful, high-quality graphics, the council notes, enabling the containers to serve as traveling billboards. In many cases, the corrugated carton serves as the primary package all the way to the sales floor, reducing packaging costs for the manufacturer and handling costs for the retailer.
Easy availability. More than 1,600 box plants in the United States and Canada produce corrugated, making it readily available anywhere in North America.
Environmental friendliness. Though plastic crates are reusable, they're made from a non-renewable resource: fossil fuels. A significant percentage of plastic crates eventually end up in landfills where they do not degrade, the council reports. By contrast, currently about 74 percent of all corrugated is recovered for recycling and then used to make new corrugated boxes.
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."