James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
When food-service distributor Gordon Food Service (GFS) began planning for the construction of its fourth distribution center a few years back, it decided early on that the DC would be automated. GFS's other three distribution centers take considerable advantage of material handling automation. When it came to the new facility in Shepherdsville, Ky., the distributor decided to follow the same course to ensure an efficient and cost-effective operation. In GFS's eyes, automation would be critical to increasing throughput, optimizing cube utilization, and keeping close track of pallets.
The question was how to go about it. The 300,000-square-foot center, which was being built to serve customers in Kentucky and Tennessee, as well as parts of Indiana, Illinois, Arkansas, and Missouri, would be a high-throughput operation, handling up to 5,000 incoming pallets per day. Furthermore, its handling requirements would be relatively complex. As is typical of grocery distribution centers, the building would have separate sections to hold dry, chilled, and frozen products—approximately 10,000 stock-keeping units (SKUs) in all. That meant that the system would have to be set up to accommodate the flow of thousands of pallets each day into not one, but three separate storage areas (ambient, refrigerated, and freezer storage).
There were other challenges as well. For example, the automation plan for the Kentucky facility would have to provide a way to handle waves of inbound pallets quickly within the small footprint allocated to receiving. It also had to be capable of managing storage positions within the automated storage and retrieval system (AS/RS) to ensure that stock positions were not depleted. Furthermore, the system had to make provisions for the disposition of the empty pallets created as workers selected products to fill orders. On top of that, the company wanted to make sure that any automated system would be cost-effective to maintain as well as easily adaptable for future needs.
A matter of coordination
The decision to break ground on a fourth distribution center in 2004 was prompted by the company's rapid growth. Headquartered in Grand Rapids, Mich., GFS is the largest family-owned and -operated broad-line food-service distributor in North America. GFS delivers about 16,000 national brands and private-label products to more than 45,000 customers, which include restaurants, hotels, health care institutions, colleges and universities, and businesses both in the United States and Canada. Besides its wholesale distribution business, it operates more than 120 GFS Marketplace stores in Florida, Illinois, Indiana, Kentucky, Michigan, Ohio, Pennsylvania, and Tennessee.
As it set about the task of designing the new facility, GFS came up with a plan for a unique AS/RS system with its own "intelligence" to expedite the put-away of incoming products. To execute that plan, the food-service distributor turned to German company Viastore Systems GmbH. GFS contracted with Viastore to provide not only the automated storage and retrieval (AS/RS) technology, but also the material flow control (MFC) software needed to run the system.
The software Viastore developed oversees the inbound receiving operation and interfaces with the host warehouse management system (WMS). Basically, the MFC optimizes pallet movement, integrates all sub-systems, and provides command history, system status, and system diagnostics—all in real time. It also contains a special mathematical algorithm designed to minimize AS/RS moves. The complex algorithm in the MFC also requires the AS/RS machines to scan all storage positions in the DC on an hourly basis to ensure that pallet locations at the ends of the aisles are not depleted.
Before installing any automated equipment in the Kentucky center, Viastore took it for a virtual test drive by conducting a simulation. Using actual order data from one of the company's other distribution centers, it ran tests to model the system's capabilities and prove that, even in worst-case scenarios, the system could still meet throughput requirements. Simulation was also used to improve and refine the system.
Just take the shuttle
As for the tricky problem of handling waves of inbound pallets rapidly within a small space, Viastore came up with a shuttle car system that allowed GFS to quickly and efficiently transfer pallets from inbound conveyor spurs to the correct storage aisle. Forklift truck drivers off-load pallets from inbound trucks and then take them to an inbound transfer station, which feeds the conveyor spurs.
As an added feature, the shuttle cars are equipped with sophisticated controls to move loads gently, without sudden acceleration or deceleration. By eliminating the risk of a bumpy ride, the shuttle cars have effectively reduced the amount of pallet shrink-wrapping required for load stabilization before put-away. "Compared to our other facilities that utilize chain conveyors with 90-degree right transfers, the shuttle car solution provides a much more smooth and stable transition from the input conveyors to the crane pickup stations," says Kirk Mortenson, DC development manager for GFS. "This fact has enabled us to reduce the number of stretch wrappers from what we originally had planned."
The shuttle cars whisk full pallet loads to the AS/RS system, which consists of nine storage/retrieval machines equipped with double-deep pallet shuttles. The system measures approximately 98 feet high and more than 450 feet long. In the freezer and dry grocery sections of the warehouse, the system ranges between 16 and 17 levels high. In the cooler area, however, it only reaches 12 levels high. The AS/RS contains more than 60,000 unique storage locations.
GFS's warehouse management system determines whether the inbound loads are sent to reserve storage or to pick face locations. The control system on the AS/RS verifies the pallet's size, weight, and product ID and then sends it to a dedicated pick or storage location.
Rapid replenishment
To expedite the picking process, the AS/RS system also features integrated pick levels where workers have access to the pick faces on the two levels closest to the ground. Workers refer to pick labels as they walk the aisles to select cases of products needed to fill orders. Once a worker picks an item, he or she applies a label to the carton and then deposits the box on the outbound conveyor system. FKI Logistex furnished the outbound conveyor system, which has the capacity to ship 185,000 cases per day. The conveyor transports the product cases to a staging area, where the items are then floor-loaded into a truck for delivery via GFS's fleet of refrigerated vehicles.
About 95 percent of GFS's outbound shipments consist of full cases. Selectors pick those cases from pallets placed into the pick location by the AS/RS machines. The remaining 5 percent of the company's outbound shipments are full pallets. When full pallets are needed to fill an order, the AS/RS itself will pull out the skids and route them to a designated shipping spur. The WMS then directs a forklift operator to go to the shipping spur and deliver the pallet to a particular loading door.
The system enhances efficiency by automatically providing for the pick bays to be replenished on a regular basis. To make that happen, Viastore put sensors on its AS/RS cranes to create a "pallet sensing" mechanism. A typical AS/RS with integrated order fulfillment uses photo-eye sensors on every pick face location to signal when product is needed from reserve storage or the inbound area. Viastore's approach, by contrast, was to create a dynamic pallet-sensing system that scans every pick location as the storage/retrieval machines travel by these locations at full speed.
Dynamic pallet sensing has allowed GFS to greatly reduce the amount of field wiring and piping required in its Kentucky warehouse. On top of that, the unique design eliminated the need for more than 10,000 sensors on pick faces, providing more cost-effective automation. "We are very pleased with the 'sensing on the fly,'" says Mortenson. "This has been much easier to troubleshoot and maintain compared to individual wired locations."
Nowadays, when a crane sensor detects an empty bay, it automatically triggers stock replenishment. Oftentimes pallets received into the system are placed right into the pick bay rather than storage. "Putting items directly into pick reduces moves on the crane by eliminating a put-away move and then later, a replenishment move," says Mortenson. "Keeping the pick bays full also [eliminates] the need for picking the product later and enables us to complete the work in a more timely [fashion]."
Trash logic
To accommodate the need to remove empty pallets from the gravity pick faces, the system was designed so that workers can stack empties in the empty pallet returns located periodically throughout the aisles. The storage/retrieval machines take the stacks of empty pallets back to the shuttle cars in the inbound area. To direct that task, Viastore wrote special code into the MFC logic.
In addition, trash chutes have been built into the AS/RS to collect and remove bulky waste materials like cardboard and discarded shrink-wrap. Trash tossed into the chutes is collected in bins at the floor of the high rise. For leaking or damaged product that can't be thrown down the chute, three-foot-high containers are staged on every level of the AS/RS. When these containers need to be emptied, workers can use the control system to request their removal. The containers are transported back out on the pallet conveyor to a specified spur, where the custodians can empty the refuse into a compactor or trash bin.
A unique feature of the automated system installed at the Shepherdsville DC is that its storage/retrieval machines were designed with double-deep telescopic shuttle forks with synchronized chain conveyors on the lift carriages. This innovation has cut cycle times at pickup and drop-off stations in half by eliminating the need to wait for telescopic arms to pick up or drop off full pallets. In addition, the chain-driven mechanism has resulted in a substantial space savings. In fact, the space freed up allowed GFS to add an additional storage level in the building.
As for the technical details, the Viastore solution features Windows server-based technology, the SQL Server database management system, and Wonderware software. A graphical software package, Wonderware enables visualization and system monitoring capabilities. It provides a user interface for workers to monitor AS/R movements and solve problems as they arise.
Exceptional performance
How has the automated system worked out? GFS reports that it's proved to be both reliable and accurate. To begin with, the system runs with minimal interruptions. Since the Kentucky facility opened in early 2006, the automated system has experienced 99.9 percent uptime. In addition, accuracy in replenishment and picking has been close to 100 percent.
"Automation has enabled us to improve our overall performance in the facility and to our customers," says Mortenson. "We are very pleased with the performance of the system both in terms of throughput and uptime," he adds. "The Viastore machines are very fast, and we are able to transfer loads efficiently and move on to the next move."
Most of the apparel sold in North America is manufactured in Asia, meaning the finished goods travel long distances to reach end markets, with all the associated greenhouse gas emissions. On top of that, apparel manufacturing itself requires a significant amount of energy, water, and raw materials like cotton. Overall, the production of apparel is responsible for about 2% of the world’s total greenhouse gas emissions, according to a report titled
Taking Stock of Progress Against the Roadmap to Net Zeroby the Apparel Impact Institute. Founded in 2017, the Apparel Impact Institute is an organization dedicated to identifying, funding, and then scaling solutions aimed at reducing the carbon emissions and other environmental impacts of the apparel and textile industries.
The author of this annual study is researcher and consultant Michael Sadowski. He wrote the first report in 2021 as well as the latest edition, which was released earlier this year. Sadowski, who is also executive director of the environmental nonprofit
The Circulate Initiative, recently joined DC Velocity Group Editorial Director David Maloney on an episode of the “Logistics Matters” podcast to discuss the key findings of the research, what companies are doing to reduce emissions, and the progress they’ve made since the first report was issued.
A: While companies in the apparel industry can set their own sustainability targets, we realized there was a need to give them a blueprint for actually reducing emissions. And so, we produced the first report back in 2021, where we laid out the emissions from the sector, based on the best estimates [we could make using] data from various sources. It gives companies and the sector a blueprint for what we collectively need to do to drive toward the ambitious reduction [target] of staying within a 1.5 degrees Celsius pathway. That was the first report, and then we committed to refresh the analysis on an annual basis. The second report was published last year, and the third report came out in May of this year.
Q: What were some of the key findings of your research?
A: We found that about half of the emissions in the sector come from Tier Two, which is essentially textile production. That includes the knitting, weaving, dyeing, and finishing of fabric, which together account for over half of the total emissions. That was a really important finding, and it allows us to focus our attention on the interventions that can drive those emissions down.
Raw material production accounts for another quarter of emissions. That includes cotton farming, extracting gas and oil from the ground to make synthetics, and things like that. So we now have a really keen understanding of the source of our industry’s emissions.
Q: Your report mentions that the apparel industry is responsible for about 2% of global emissions. Is that an accurate statistic?
A: That’s our best estimate of the total emissions [generated by] the apparel sector. Some other reports on the industry have apparel at up to 8% of global emissions. And there is a commonly misquoted number in the media that it’s 10%. From my perspective, I think the best estimate is somewhere under 2%.
We know that globally, humankind needs to reduce emissions by roughly half by 2030 and reach net zero by 2050 to hit international goals. [Reaching that target will require the involvement of] every facet of the global economy and every aspect of the apparel sector—transportation, material production, manufacturing, cotton farming. Through our work and that of others, I think the apparel sector understands what has to happen. We have highlighted examples of how companies are taking action to reduce emissions in the roadmap reports.
Q: What are some of those actions the industry can take to reduce emissions?
A: I think one of the positive developments since we wrote the first report is that we’re seeing companies really focus on the most impactful areas. We see companies diving deep on thermal energy, for example. With respect to Tier Two, we [focus] a lot of attention on things like ocean freight versus air. There’s a rule of thumb I’ve heard that indicates air freight is about 10 times the cost [of ocean] and also produces 10 times more greenhouse gas emissions.
There is money available to invest in sustainability efforts. It’s really exciting to see the funding that’s coming through for AI [artificial intelligence] and to see that individual companies, such as H&M and Lululemon, are investing in real solutions in their supply chains. I think a lot of concrete actions are being taken.
And yet we know that reducing emissions by half on an absolute basis by 2030 is a monumental undertaking. So I don’t want to be overly optimistic, because I think we have a lot of work to do. But I do think we’ve got some amazing progress happening.
Q: You mentioned several companies that are starting to address their emissions. Is that a result of their being more aware of the emissions they generate? Have you seen progress made since the first report came out in 2021?
A: Yes. When we published the first roadmap back in 2021, our statistics showed that only about 12 companies had met the criteria [for setting] science-based targets. In 2024, the number of apparel, textile, and footwear companies that have set targets or have commitments to set targets is close to 500. It’s an enormous increase. I think they see the urgency more than other sectors do.
We have companies that have been working at sustainability for quite a long time. I think the apparel sector has developed a keen understanding of the impacts of climate change. You can see the impacts of flooding, drought, heat, and other things happening in places like Bangladesh and Pakistan and India. If you’re a brand or a manufacturer and you have operations and supply chains in these places, I think you understand what the future will look like if we don’t significantly reduce emissions.
Q: There are different categories of emission levels, depending on the role within the supply chain. Scope 1 are “direct” emissions under the reporting company’s control. For apparel, this might be the production of raw materials or the manufacturing of the finished product. Scope 2 covers “indirect” emissions from purchased energy, such as electricity used in these processes. Scope 3 emissions are harder to track, as they include emissions from supply chain partners both upstream and downstream.
Now companies are finding there are legislative efforts around the world that could soon require them to track and report on all these emissions, including emissions produced by their partners’ supply chains. Does this mean that companies now need to be more aware of not only what greenhouse gas emissions they produce, but also what their partners produce?
A: That’s right. Just to put this into context, if you’re a brand like an Adidas or a Gap, you still have to consider the Scope 3 emissions. In particular, there are the so-called “purchased goods and services,” which refers to all of the embedded emissions in your products, from farming cotton to knitting yarn to making fabric. Those “purchased goods and services” generally account for well above 80% of the total emissions associated with a product. It’s by far the most significant portion of your emissions.
Leading companies have begun measuring and taking action on Scope 3 emissions because of regulatory developments in Europe and, to some extent now, in California. I do think this is just a further tailwind for the work that the industry is doing.
I also think it will definitely ratchet up the quality requirements of Scope 3 data, which is not yet where we’d all like it to be. Companies are working to improve that data, but I think the regulatory push will make the quality side increasingly important.
Q: Overall, do you think the work being done by the Apparel Impact Institute will help reduce greenhouse gas emissions within the industry?
A: When we started this back in 2020, we were at a place where companies were setting targets and knew their intended destination, but what they needed was a blueprint for how to get there. And so, the roadmap [provided] this blueprint and identified six key things that the sector needed to do—from using more sustainable materials to deploying renewable electricity in the supply chain.
Decarbonizing any sector, whether it’s transportation, chemicals, or automotive, requires investment. The Apparel Impact Institute is bringing collective investment, which is so critical. I’m really optimistic about what they’re doing. They have taken a data-driven, evidence-based approach, so they know where the emissions are and they know what the needed interventions are. And they’ve got the industry behind them in doing that.
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.”
That result showed that driver wages across the industry continue to increase post-pandemic, despite a challenging freight market for motor carriers. The data comes from ATA’s “Driver Compensation Study,” which asked 120 fleets, more than 150,000 employee drivers, and 14,000 independent contractors about their wage and benefit information.
Drilling into specific categories, linehaul less-than-truckload (LTL) drivers earned a median annual amount of $94,525 in 2023, while local LTL drivers earned a median of $80,680. The median annual compensation for drivers at private carriers has risen 12% since 2021, reaching $95,114 in 2023. And leased-on independent contractors for truckload carriers were paid an annual median amount of $186,016 in 2023.
The results also showed how the demographics of the industry are changing, as carriers offered smaller referral and fewer sign-on bonuses for new drivers in 2023 compared to 2021 but more frequently offered tenure bonuses to their current drivers and with a greater median value.
"While our last study, conducted in 2021, illustrated how drivers benefitted from the strongest freight environment in a generation, this latest report shows professional drivers' earnings are still rising—even in a weaker freight economy," ATA Chief Economist Bob Costello said in a release. "By offering greater tenure bonuses to their current driver force, many fleets appear to be shifting their workforce priorities from recruitment to retention."