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.
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."