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.
Worried that you don't have the staff needed to implement a radio-frequency identification (RFID) pilot program? Here's some good news. Contrary to popular perception, it doesn't take a village—or even a small army—to get a company RFID-ready. If the talent is at hand, all it takes is a few good men or women.
Take the case of Wal-Mart's much vaunted RFID implementation, which was officially launched in January. For all the decisions to be made and questions to be answered (where do we put the tags? what technology do we use?), Wal-Mart used only five people, all from its information systems group, to get its pilot up and running. Even now as it rolls out its RFID program to 100 more suppliers and to additional locations, Wal-Mart has only increased the RFID team's headcount to nine.
Linda Dillman, chief information officer at Wal-Mart, urges others to start small. "Our team in the first year had five associates [who] made this happen at Wal-Mart," she says. "Today we have nine. If you have a small group that understands the business, you can make it happen. Recognize it's a journey. It's not a single step."
Of course, it can't be just any five people. They need to be knowledgeable about RFID. And people with RFID expertise are getting tougher to find. In fact, eight out of 10 respondents to a recent survey conducted by the Computing Technology Industry Association (CompTIA) said a lack of people qualified to implement, service and support the technology could hinder the successful widescale adoption of RFID. Another two-thirds cited training and educating employees in RFID technology as one of the biggest challenges they faced.
"We believe the market needs hundreds of systems integration companies with RFID capabilities; and hundreds of thousands of individuals knowledgeable in this technology to meet current and future demand," David Sommer, vice president of electronic commerce at CompTIA, said during a presentation at RFID World in March.
To address the skills shortage, CompTIA is working with major players in the RFID market. Product manufacturers, distributors, systems integrators, education and training providers, and end-user customers are collaborating to develop a vendor-neutral professional certification of RFID skills for individuals working with the technology.
Slow start
Though it's hard to know how much a shortage of experts has hindered its adoption, it appears that RFID has been somewhat slow to take hold. The survey of CompTIA members (mostly computer service companies and computer manufacturers) found that customer adoption of RFID solutions remains relatively modest. More than two-thirds of the respondents—71 percent—reported that their customers had not yet implemented RFID solutions. And even among respondents whose customers had begun using RFID, it appeared that only a fraction—20 percent— of their customers had gotten involved. (Survey respondents said their customers came from government and a variety of industries, including manufacturing, retail, health care, services, communications, and financial services and real estate.)
Not that the respondents themselves were all that experienced with RFID. A full 80 percent of the responding companies said they either had yet to go past the investigation stage of RFID implementation or had done no investigation at all. Just 16 percent have implemented one or more RFID pilot projects for themselves or their customers. When asked if they saw their company offering RFID products and services in the next three years, 37 percent of the organizations said they definitely would, while 39 percent said they would consider it if there were interest from their customers.
The majority of respondents to the CompTIA survey were value-added resellers and solutions providers (33 percent); consultants and systems integrators (21 percent); and manufacturers (19 percent). Two-thirds of the companies have annual revenues of up to $25 million; while 22 percent are companies with annual revenues of $100 million or more.
what's holding them back?
RFID's early adopters get all the headlines, making it easy to forget that plenty of companies have yet to get started. So why haven't they taken the plunge?
Costs are too high
18%
Technology is still emerging
51%
Confusion in the marketplace
6%
Not enough resources in the industry
2%
Not sure
23%
Source: DC VELOCITY, Warehousing Education & Research Council
this show rocked!
Though undoubtedly footsore and weary after a day packed with seminars, speeches and demonstrations, those hardy souls still standing on the show floor at the end of RFID World's first day got their reward. They were treated to a special performance at an after-hours networking reception. Continuing a tradition begun at the first RFID World show in 2003, the "RFID Jam Band," a group of about a dozen industry professionals who share a fondness for rhythm and blues, took the stage to rock their (RFID) world.
Led by Bill Allen, singer/guitarist/keyboardist and harmonica player (as well as a conference speaker and professional whose day job is director of strategic alliances and programs at Texas Instruments), the group's alternating cast of rock wanna-bes performed a hard-hitting set for just over two hours on the show floor.
Although Gregg Temple, president of Meyers Label Group, stole the show with his rousing rendition of "Mustang Sally," Allen's raspy vocals and harmonica riffs electrified the crowd. Other band members included Rick Morgan of SCAN, the Data Capture Report (bass); Stephen Garth, Oracle (keyboards); Karl Ludwig, Hightech Knowledge Inc. (guitar, vocals); Doug Bourque, Texas Instruments (drums); Robert Stone, Texas Instruments (guitar); Dan Schell, Business Solutions magazine (bass, vocals), Chris Zimmardi, Texas Instruments (bass), and DC VELOCITY's own Emma Shin (vocals).
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."