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.
A lot of companies are jumping on the "green" bandwagon these days. JohnsonDiversey isn't one of them. It's not that the company isn't environmentally conscious. It is. It's just that the Sturtevant, Wis.-based manufacturer of cleaning and maintenance supplies established its eco-credentials long ago. Since its founding in 1886, the company (formerly known as Johnson Wax Professional) has maintained an unusually strong record of environmental leadership.
In 1935, for example, then-president H.F. Johnson made a historic expedition to Brazil to study the sustainability of carnauba palm trees. Carnauba palms represent an important source of raw material for the company's floor waxes—the cut leaves are sun-dried and mechanically thrashed to remove the crude wax. But only 20 leaves can be cut from each tree per year. Though Johnson made the trek in his company's best interests, his efforts to establish a carnauba palm plantation have also helped preserve the species.
In the early 1970s, JohnsonDiversey voluntarily eliminated the use of all chlorofluorocarbons (CFCs) in its aerosol products—long before the ban became law. In the years since, it has introduced an environmentally friendly container and launched several water and agricultural sustainability projects, racking up an impressive array of environmental and conservation awards along the way.
Given the company's long history of environmentally responsible manufacturing, it should come as little surprise that JohnsonDiversey is also committed to sustain- able building and development. In 1997, it built an environmentally friendly corporate headquarters, which has earned a gold-level Leadership in Energy and Environmental Design (LEED) certification from the U.S. Green Building Council. This past September, the company opened the greenest distribution center in North America. Like the headquarters building, the new $24 million DC, which is also located in Sturtevant, has received a gold-level certification from the U.S. Green Building Council. The group says the DC, which occupies 550,000 square feet of space (the equivalent of 11 football fields), is the largest DC to be awarded a gold certificate.
"We designed this to be a green facility from the very start," says Stu Carron, director of global facilities and real estate at JohnsonDiversey. "Some companies wondered if we were seeking both green and nongreen bids to compare the two, but we just weren't going to build a non-green building. You can do so much better when it comes to energy efficiency, water use, and productivity in the building when you build green in from the outset."
Developers were asked to compete on the basis of how many green features they could provide, Carron says. Initially, 17 companies bid on the project, but several dropped out when they realized they didn't have the necessary experience in green construction. In the end, the choice of developers turned out to be an easy one, according to Carron. "The low bidder was also the one that produced a bid with the most green features," he says. "It had the most experience building green buildings and had figured out a way to develop green buildings [that are] no more expensive than regular buildings."
Green from the ground up
JohnsonDiversey's new DC is green literally from the ground up. More than 12,000 tons of bottom ash—a granular byproduct of combustion in coal-fired power plants—were reclaimed from a local landfill to be used for the building's sub-base. By the project's completion, the design and construction team had recycled 941 of the 964 tons of waste generated during the building's construction. The result was a net reduction in the volume of landfill material—Carron reports that the company pulled 500 times more material out of the landfill than it put back into it.
The DC has no air conditioning system, relying instead on a state-of-the-art ventilation system and fans the size of helicopter rotors that circulate air in the building to keep it cool in the summer. A specially designed HVAC system ensures optimal indoor air quality and efficient energy use, and a white thermoplastic polyolefin (TPO) roof and extra insulation at R-27 help to reduce solar heat gain within the building.
Faucets in the DC's restrooms and break room reduce the flow of water to one-half gallon per minute, and together with waterless urinals resulted in a 51-percent savings in water usage over the minimum legal baseline. The building's energy-efficient lighting system incorporates fluorescent high-bay fixtures and motion-activated occupancy sensors. Combined with a high-gloss floor finish and a white-painted interior, these features help drive down energy costs. According to the company, the new DC uses 40 percent less energy and 50 percent less water than a typical DC of its size.
The company has also committed to buying green power. All electricity at the new DC is generated by alternative energy sources, including solar, wind, and biomass, which equates to a reduction of 3.2 million pounds of carbon dioxide. Carron says it is the only DC of its size in the United States to make this claim.
Not going for the gold
Though justifiably proud of the DC's LEED certification, the company insists that the project was not about going for the gold. "We never set out to obtain a gold-level certification," says Harold Miller, regional operations manager for JohnsonDiversey and the project leader for the DC's construction. "Our object was to be certified. We never felt we'd hit the gold level. We didn't want to pay our way to obtain a certain level of certification; we wanted each decision we made to be cost justified."
In fact, the JohnsonDiversey team considered but rejected a number of common green features during the planning and design process. For example, they passed on a rainwater collection system, which has turned out to be no great loss. More than 70 percent of the 38-acre site has been landscaped with native and adaptive plants that don't require irrigation.
Company executives also took a pass on skylights because the 10-year payback exceeded the three- to five-year time frame the company was looking for. Solar panels also didn't make the cut, although the company plans to look at the technology down the road as a possible building retrofit as the price of solar equipment drops.
Even without solar panels, the DC's energy savings promise to be impressive. The company expects to save more than $100,000 a year on energy costs over a typical DC of its size. It also expects that the facility will be much more productive than traditional DCs.
"It's highly competitive to build green and this project proves that," says Carron. "We have not only created a much better working environment, but one that undoubtedly will improve productivity as well."
one truck, one invoice … one DC
Along with securing the company's reputation as an eco-friendly business, JohnsonDiversey's newly opened DC has given supply chain performance a boost. That's partly a result of efficiencies gained through consolidation. The new 550,000-square-foot DC replaced four other buildings in the Racine (Wis.) area that had been used to store the company's cleaning and maintenance products. Geography has been a factor as well. The new DC is located just under a mile from Waxdale, the company's flagship manufacturing plant, which has cut travel times and enhanced the speed and efficiency of the distribution process.
"There were a lot of drivers and synergies from consolidating four locations into one," says Stu Carron, the company's director of global facilities and real estate. "The transportation costs from shuttling products between the manufacturing plant and the different DCs were significant, so that's been another cost savings."
It also helps that the new DC was designed for fast throughput. It features 55 loading docks and staging for 118 tractor-trailers—a significant capacity increase over the four previous warehouses, where backlogs in processing trucks were once common.
"Great customer service is the name of the game and this new center delivers," says JohnsonDiversey President and CEO Ed Lonergan. "We call it one truck, one invoice. Customers order one time. They receive one invoice with their order on one truck. That's a huge improvement in service to customers and our operational efficiency."
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."