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.
When their bubble burst, the dot-coms took a lot of industries down with them. Along with the manufacturers of pool tables, beanbag furniture and cappuccino machines were victims of another sort: manufacturers of the sortation systems used in picking the individual items for all those Internet orders.
Manufacturers of sortation equipment—shoe sorters, tilt-tray and cross-belt sorters, pop-up-wheel and pusher type sorters—had all watched sales swell during the early years of the dot-com boom. High-speed sortation equipment seemed an ideal fit for e-tailing, which tends to be heavy on single-pick orders. And in those heady early days when the dot-coms didn't know what their limits would be, sortation systems offered the design flexibility to ship 50,000 items a day or a million units a day.
Everybody knows how that story ended. And though sortation equipment remains hugely popular in Europe, domestic sales have dropped. "Like almost all material handling equipment makers, we've seen a decline in market size since the fall of the dot-coms and the downturn of the overall economy," says Steve McElweenie, executive vice president of sales and marketing for the Crisplant division of FKI Logistex, which manufactures sorting systems.
But surprisingly, the outlook for sortation equipment sales remains relatively bright. Even with the dot-com meltdown and the feeble economy, demand for high-speed sorters has held its own, bolstered by DC managers who hope that sortation systems' fabled ability to increase productivity, reduce costs and improve customer satisfaction will help them rev up their operations.
Full tilt
Though high-speed sorters aren't for everyone, their appeal to a high-volume operation is obvious. The equipment, which is used most commonly to sort individual items or cases by order in a pick-to-belt operation, offers flexibility, the ability to handle high volumes, and most of all, speed. Rates vary somewhat depending on the type of sorter. According to Christopher Paulsen, CEO of Pittston, Pa.-based material handling specialist WEPCO, shoe sorters can typically handle up to 9,000 items per hour, while cross-belt sorters process up to 11,000 items per hour.
All these things make sort ation equipment attractive to companies selling everything from books to foot wear to CDs to pharmaceuticals. But it's probably made its biggest inroads in the apparel industry: At TJ Maxx's one-million-square-foot distribution center in Pennsylvania, for example, two tilt-tray sorters run over 3,500 feet apiece and sort clothing items for delivery to over 600 stores at mind-boggling rates.
Fashion apparel manufacturer Tommy Hilfiger uses a unique sortation system built into the conveyor line at its wholesale consolidation center in New Jersey, which has cut the time it takes to turn delivery trucks by 40 percent or more. Tommy Hilfiger's DCs pick and pack customer orders (sometimes in advance of the customers' requested shipping dates), then transfer them to the company's consolidation center, where they accumulate to become full truckload quantities. On the day trucks are scheduled to pick up a consolidated truckload shipment, the pallets are placed in a multi-level pallet flow rack pick module. When the truck arrives, cartons are put on to a conveyor, inducted into the sortation system and sorted by bill of lading to the appropriate door. The sorter allows multiple trucks to be loaded simultaneously, typically in less than 90 minutes per truck.
Going for volume
Many times, the decision to invest in sortation equipment signals that a company's order volume has finally hit critical mass. At children's apparel manufacturer VF Playwear, for example, volume can reach over 100,000 units a day. "At over 100,000 units a day … when they looked at pick-tolight tolight or other options, the sheer labor it would take to process that unit volume was overpowering," says McElweenie. "Sortation provided a pretty good return on investment for them."
Scholastic Inc., the world's largest publisher and distributor of children's books, processes an avera ge of 50,000 to 60,000 orders a day at its distribution center in Jefferson City, Mo., but during a recent peak period, it actually moved more than 112,000 orders. The DC—which occupies just under one million square feet—couldn't move such high volumes without the sortation system now in place.
In Scholastic's highly automated operation, which features approximately 5.5 miles of conveyor line, high-speed merging and sortation take place at key points in the orderflow process. Wide-merge tables consisting of live roller and power-faced plow equipment from Hytrol merge up to 100 cartons a minute before they move to the quality control and automated weight check lines.
Another high-throughput merge system prepares the cartons for transport to taping lanes for sealing. From the taping area, the completed orders move toward the shipping area for the final high-speed merge and sortation.
Cartons enter this area on live rollers and connect with a three-lane servo-belt gapping system. Each lane has three segments. Photo eyes control the speed of the belts in each segment, creating gaps between the cartons. This creates a "zipper" effect as the cartons merge onto a tube-and-chain combiner.
The combiner aligns the cartons and nudges them onto a belt conveyor that leads to the Hytrol ProSort, an advanced sortation system that can handle more than 150 cartons a minute. Product is transported on flight tubes, where at predetermined locations, divert shoes move diagonally across the conveyor to push the product onto a take away line.
Start spreading the news
As sortation systems evolve,distribution centers are finding new uses for them. McElweenie notes, for example, that many customers are adapting their systems to handle a wider variety of products. Others are finding ways to perform multiple sorts on their sorters, running not only outbound order processing but also handling returned items on a second shift in an effort to achieve a higher return on their investment.
These applications haven't escaped the vendors' notice. While they wait for the economy to perk up, they're working hard behind the scenes to get the word out about sortation. Educating—or re-educating—the industry may sound like an ambitious endeavor. But it beats sitting around waiting for a dot-comeback … or shopping for a good deal on a used cappuccino maker.
A move by federal regulators to reinforce requirements for broker transparency in freight transactions is stirring debate among transportation groups, after the Federal Motor Carrier Safety Administration (FMCSA) published a “notice of proposed rulemaking” this week.
According to FMCSA, its draft rule would strive to make broker transparency more common, requiring greater sharing of the material information necessary for transportation industry parties to make informed business decisions and to support the efficient resolution of disputes.
The proposed rule titled “Transparency in Property Broker Transactions” would address what FMCSA calls the lack of access to information among shippers and motor carriers that can impact the fairness and efficiency of the transportation system, and would reframe broker transparency as a regulatory duty imposed on brokers, with the goal of deterring non-compliance. Specifically, the move would require brokers to keep electronic records, and require brokers to provide transaction records to motor carriers and shippers upon request and within 48 hours of that request.
Under federal regulatory processes, public comments on the move are due by January 21, 2025. However, transportation groups are not waiting on the sidelines to voice their opinions.
According to the Transportation Intermediaries Association (TIA), an industry group representing the third-party logistics (3PL) industry, the potential rule is “misguided overreach” that fails to address the more pressing issue of freight fraud. In TIA’s view, broker transparency regulation is “obsolete and un-American,” and has no place in today’s “highly transparent” marketplace. “This proposal represents a misguided focus on outdated and unnecessary regulations rather than tackling issues that genuinely threaten the safety and efficiency of our nation’s supply chains,” TIA said.
But trucker trade group the Owner-Operator Independent Drivers Association (OOIDA) welcomed the proposed rule, which it said would ensure that brokers finally play by the rules. “We appreciate that FMCSA incorporated input from our petition, including a requirement to make records available electronically and emphasizing that brokers have a duty to comply with regulations. As FMCSA noted, broker transparency is necessary for a fair, efficient transportation system, and is especially important to help carriers defend themselves against alleged claims on a shipment,” OOIDA President Todd Spencer said in a statement.
Additional pushback came from the Small Business in Transportation Coalition (SBTC), a network of transportation professionals in small business, which said the potential rule didn’t go far enough. “This is too little too late and is disappointing. It preserves the status quo, which caters to Big Broker & TIA. There is no question now that FMCSA has been captured by Big Broker. Truckers and carriers must now come out in droves and file comments in full force against this starting tomorrow,” SBTC executive director James Lamb said in a LinkedIn post.
The “series B” funding round was financed by an unnamed “strategic customer” as well as Teradyne Robotics Ventures, Toyota Ventures, Ranpak, Third Kind Venture Capital, One Madison Group, Hyperplane, Catapult Ventures, and others.
The fresh backing comes as Massachusetts-based Pickle reported a spate of third quarter orders, saying that six customers placed orders for over 30 production robots to deploy in the first half of 2025. The new orders include pilot conversions, existing customer expansions, and new customer adoption.
“Pickle is hitting its strides delivering innovation, development, commercial traction, and customer satisfaction. The company is building groundbreaking technology while executing on essential recurring parts of a successful business like field service and manufacturing management,” Omar Asali, Pickle board member and CEO of investor Ranpak, said in a release.
According to Pickle, its truck-unloading robot applies “Physical AI” technology to one of the most labor-intensive, physically demanding, and highest turnover work areas in logistics operations. The platform combines a powerful vision system with generative AI foundation models trained on millions of data points from real logistics and warehouse operations that enable Pickle’s robotic hardware platform to perform physical work at human-scale or better, the company says.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."