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.
Five years ago, Toronto-based Apotex Inc. faced the classic growth challenge, if such a thing can be said to exist. Already one of Canada's largest pharmaceutical manufacturers, the company, which makes generic, prescription and private-label over-the-counter drugs, began to experience an unexpected surge in sales. The cause quickly became apparent. It wasn't an outbreak of some northern strain of bird flu or an escalation in hypothermia cases; rather it was skyrocketing demand from consumers across the border in the United States. Fed up with the high cost of home-grown drugs, increasing numbers of U.S. consumers had begun importing lower-priced medications from Canada.
Since that time, there's been no letup in demand. Output at the company's Etobicoke, Ontario, manufacturing facility has increased fivefold during the past five years, with 70 percent of the dosages manufactured at the site bound for the United States. And although the financial people probably aren't complaining, the boom has had some side-effects. The growth has created a space crunch in the manufacturing plant as well as the R&D lab located on site. It has also put a severe strain on the warehouse, which stores raw materials and work in process for the adjacent manufacturing plant.
Though Apotex was in desperate need of space, building an addition at the site wasn't an option. The Etobicoke facility is surrounded by major roads on all four sides. And in any event, any extra space that could be found would be immediately commandeered by the manufacturing plant, which itself was feeling the squeeze.
Clearly, the only place the warehouse could grow was up. In the end, Apotex altered its sights from the horizontal to the vertical. To free up floor space for production and research, the company came up with a high bay, very-narrow-aisle design for the storage area, a design that called for 65-foot ceilings in one section and 80-foot ceilings in another as opposed to the traditional 30-foot ceilings. And to make it all work, the storage area would be equipped with automated storage and retrieval systems.
Retrieval made easy
Today, Apotex operates two separate storage and retrieval systems in the Etobicoke facility. A semi-automated system handles the storage of raw materials and a small volume of finished goods, while a fully automated system supports work in process. Together, the two systems, which both use equipment supplied by FKI Logistex, provide Apotex with the warehouse space it needs to meet its expanding output.
Not only have the high-rise systems eased the storage space crunch; they've also improved inventory control at the site. Because the systems keep close tabs on inventory, the company can respond immediately to demand for a specific ingredient or medication. Once the item is located, a crane can be easily dispatched to retrieve it from its storage location within the system. Products can also be removed from storage in a specific sequence to accommodate just-in-time manufacturing.
The semi-automated system that houses the facility's raw materials consists of seven aisles with a footprint of some 50,000 square feet. The aisles are 300 feet long and 65 feet high. Aisles 1 through 6 are used for materials, while Aisle 7 holds some finished goods until they are ready to ship to a distribution center in Indianapolis.
Two man-operated cranes patrol the 10,500 pallet locations within the storage area. The cranes are designed to change aisles easily, guided by rails at the floor and ceiling. Using only two units to cover seven aisles reduced overall system costs while also providing flexibility. If repairs are needed on one unit, the other unit can quickly retrieve needed items from any aisle. As volumes increase, the company has the option of adding cranes and/or aisles.
The raw materials, contained in drums, cartons and bags, are held in the storage locations on plastic pallets. Plastic was chosen over wood for a variety of reasons, such as the reduced risk of contamination from split wood, wood dust and debris; long-term cost-effectiveness; and longer life expectancy. The plastic pallets are used only within the closed loop of the facility, however, not for outbound shipments.
To retrieve items from storage, operators manning the cranes can either drive the cranes to the assigned locations or program the units for semi-automatic mode, which at the push of a button, whisks them to rack slots where the ingredients needed next for production are stored. Each of the cranes features twin loaders to hold two pallets at a time.
After the pallets have been gathered, they're driven to drop-off stations. There, a combination of conveyors, vertical lifts and automated guided vehicles transport the materials through the various processes of the adjacent manufacturing plant.
Just what the doctor ordered
The second storage and retrieval system, installed just last year, houses work in process: big gray totes containing medications in tablet or capsule form that are awaiting further processing, such as tablet coating or special packaging. This AS/RS consists of one 80-foot-tall aisle manned by a fully automated crane. The crane is designed to make about 20 to 25 moves an hour, sliding the totes in and out of 1,800 double-deep locations.
While the system is predominately used for holding the work in process, a number of the storage locations are devoted to empty totes. Some of these empties are waiting to go to washer units for cleaning, while others have already been washed and are being held there temporarily until needed. All totes are moved to and from the automated system using automatic guided vehicles.
To track the medications as they move through the facility, Apotex is using radio-frequency identification (RFID). "All work in process has RFID tags, which [allows us to] track the weight of the tote and then write that to the tag," explains Fred Grafe, the company's director of global logistics. He adds that the information on the tags is automatically read and updated each time the materials enter and exit the automated storage systems, resulting in very little manual intervention with the totes.
The lack of human intervention both minimizes the risk of contamination and provides greater security for the medications, which is important in assuring the safety of the consumer drug supply. The reduction in handling also has reduced product damage and picking errors. Warehouse accuracy at the facility has now improved to well over 99 percent. For Apotex, at least, it appears that the AS/RS storage units have proved to be a miracle cure.
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.”