David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
As we begin, may i suggest a glass of Altesino Brunello di Montalcino Riserva? This fine red wine from Italy's Tuscany region is aged four years to provide a multidimensional blend of aromas featuring berries, spices, and dried flowers. Its taste is full-bodied and velvety, and it provides a fresh finish.
While you're enjoying your glass of wine, allow me to tell you about Winebow, the New Jersey-based importer responsible for bringing Altesino and other fine Italian vintages into the U.S. market.
Winebow represents over 70 wine-growing estates, offering some of the finest Italian wines available anywhere to wine lovers throughout the nation.
In addition to its import business, which serves cus- tomers nationwide, Winebow also is a regional wholesaler of other fine wines from all around the world. These are sold to smaller distributors, retailers, and restaurants within the Northeast—about 5,000 customers in all.
About a third of its wholesale distribution business is in New York City. Orders there may vary from several pallet loads for a small distributor to a few bottles needed to restock a restaurant's wine cellar.
Recent acquisitions have expanded Winebow's wholesale operations from its base in New Jersey and neighboring New York and Pennsylvania to include Connecticut and Massachusetts. The company also has wholesale distribution operations in Washington, D.C.
All bottled up Wine flows freely
While double-digit growth and the move into new markets have been positive developments for the company, the effect on Winebow's Ho-Ho-Kus, N.J., distribution facility has been more like a bad hangover. The 80,000-square-foot building, which served both the import and wholesale businesses, did not offer an optimal design, nor was it located in a particularly accessible location. The facility was in a small industrial park that was bordered by railroad tracks. Trucks often had to wait for trains to pass before they could move into and out of the small yard.
Actually,Winebow had outgrown the Ho-Ho-Kus facility a long time ago and had been forced to locate product at two offsite facilities and two third-party warehouses. Having its wines in five different locations made things very difficult to manage.
"Our primary issue was space," says Scott Ades, senior vice president of corporate development and operations. "We needed more room and a layout that would provide greater throughput and allow us to improve customer service and our response time."
Winebow contacted W&H Systems, a material handling conveyor and software systems integrator based in Carlstadt, N.J., that is well known for its work designing systems for the wine and spirits industry. The result of the collaboration was the creation of a new 196,922-squarefoot distribution center in Pine Brook, N.J. Situated within 20 miles of midtown Manhattan, the location allows Winebow to have products within easy reach of a large portion of its customer base.
Opened last April, the facility seamlessly handles more than a million cases of wine annually, representing over 3,300 different stock-keeping units (each brand, type of wine, and vintage represents a different SKU). The wholesale division offers 933 unique brands of wine from 600 different suppliers, while the import business has 120 brands.
All of the wine for the wholesale distribution business (with the exception of product bound for customers in Massachusetts and Connecticut) passes through the new building. About one-third of the imported wines also flow from Pine Brook, with the rest shipped directly from the manufacturers.
The new facility provides badly needed room and a much more efficient design. It boasts 23 doors, including three drive-in docks, compared to just four doors in the old warehouse. A new two-level pick module also provides faster and more accurate processing of orders. New conveyors and sorters help whisk cases through the building.
"The new facility has allowed us to be more efficient and productive," reports Ades. "We are more easily able to meet the delivery windows of our customers."
Wine flows freely
Most receiving at Winebow takes place during the daytime hours, with picking of orders done overnight for next-day delivery. As many as 19 doors can be used for receiving, though usually only a handful are assigned to incoming goods. The three new drive-in docks were carved out of the facility floor so that trailers can back up directly inside the building. "We basically built these interior docks for security and to get some of the trailers out of the weather," explains Ades.
The interior docks also provide additional flexibility.Workers can fill a trailer and store it inside overnight until it's time to leave the building. Reefer units can also be pushed into the building to avoid sitting out under a blazing sun.
Currently, received items are checked against paper lists. But within the next few months, the building will be installing the Motek Priya warehouse management system (WMS), which will then control most of the warehouse operations. At that time, products will be scanned into the warehouse management system upon arrival. Ades says Winebow wanted to refine its other processes in the new building before tackling the WMS implementation.
Both the importing and distribution businesses operate from within the building, sharing common areas. "Inventory is virtually separated, but physically together. On paper, though, they are separate operational entities," explains Ades.
Products are housed in three parts of the building. A large bulk area stores approximately 6,600 pallets stacked on the floor. Customers ordering imported products—these, again, are other distributors located nationwide—typically order full pallet quantities or mixed pallets containing full cases. Most often, these are picked from the bulk area and ferried by lift trucks to outbound doors dedicated to the import business.
Products for the wholesale distribution side of Winebow's business—smaller distributors, retailers, and restaurants in the region—are also stored in the bulk area. However, most of the wholesale products stored here are fast movers that replenish the facility's pick module. Replenishment begins during daylight hours and continues as needed during overnight picking.
While the vast majority of the wholesale distribution orders are filled in the pick module, some product for larger customers may also be picked directly from the bulk area as full pallets or loads of mixed cases.
Slower-moving pallets are stored in 2,500 rack locations (the racks were supplied by Unex). Also found within the racking are 700 half pallet locations and some decking for slow-moving wines that are stocked in smaller quantities. Thanks to the 22-foot ceilings in the new facility,Winebow is now able to store products four rack levels high, compared to only three levels high in the old building.
Most of the racked items also replenish the pick module, though, as with the bulk area, some items for customer orders may also be picked directly from these racks. Individual cases selected here are inducted by hand into the facility's conveyor system.
Wine list, please
As much as 95 percent of all order filling for the wholesale distribution business occurs within the pick module. This new area has only been in operation since the first week of November. Prior to that, picking was done from a temporary setup in an overflow bulk room while the module was made ready for occupancy.
The two-level module provides 6,000 square feet of picking space per level. The top level consists of 300 locations equipped with floor-mounted pallet flow rollers. Full cases are picked here by label, with the label attached as the case is removed and placed onto a takeaway conveyor (which was supplied by FKI Logistex).
The bottom level of the module contains a mix of storage for pallets, cases, and individual bottles, with storage systems here also supplied by Unex. Another 30 locations are dedicated to full pallets on flow rollers. Case flow racks provide 250 locations capable of holding 2,500 cases of slowmoving products. Opposite the flow racks is shelving that holds medium and slow movers that are picked as individual bottles. About 25 percent of the wholesale business consists of split-case orders.
As with the upper level, full cases are picked by label, while bottles are picked by lists into order cartons that are then labeled for shipping. Once the WMS is installed, picking of these items may be directed by radio-frequency units or even voice technology.
In the short time that the new module has been in use,
Ades has already seen improvements. It is now easier to locate products, and picking speed and accuracy is better.
"When you are dealing with premium wines, you have to be accurate," he says. "Damage has also been reduced as we are not moving product as much internally."
Picks made on the bottom level are placed onto a takeaway conveyor where they are transported to the upper level by a Ryson spiral conveyor. The cases next pass through a scan tunnel, where Accu-Sort scanners read the bar codes on the labels before cartons are diverted to two loading docks using a pop-up sorter (which was also supplied by FKI Logistex).
Winebow operates its own fleet of 30 trucks for wholesale deliveries. Loading the trucks begins with the start of order filling at 7 p.m. and continues overnight so that the first trucks are ready to depart the building at 5: 30 a.m.
A good finish
The creation of the new distribution center has provided a smooth flow of wines at Winebow. All products are finally under one roof. There's no longer any need to shuttle products between the offsite warehouses, and space constraints are a thing of the past.
"Before, we had to spend time just consolidating inventory to make space for new receipts," recalls Ades. "A fair amount of productivity has been achieved simply by eliminating all of the extra handling and shuffling of products."
In addition to greater flexibility, the additional space gives Winebow the capacity to eventually double its previous throughput. The company distributed just over a million cases in 2007, 12 percent more than the year before, and expects to handle at least 10 percent more this year. It has plenty of room now to accommodate such growth for years to come.
Changes to the material handling systems are also planned to keep up with expected growth. Another pick module can be added, the sorter can provide double the number of diverts, and additional doors can be assigned to shipping. Narrow-aisle racking is also being considered to create additional density in the storage areas.
The large room that had been used for temporary picking before the pick module went live will soon be sublet. This area, measuring 27,000 square feet, can then be taken back in about five years when growth necessitates.
And within the next few months, the new WMS system will provide Winebow with real-time information and improved inventory control.
The new building also proved to be a winner during the recent holiday season, easily Winebow's busiest time. "We were able to process our orders much better than in the past, and we did it all with less manpower and better response time," says Ades.
Best of all, the new facility has improved Winebow's customer service. Greater efficiencies and flexibility have allowed Winebow to extend its order cutoff time from 5 to 6 p.m., with the hope of extending it by another hour soon.
Orders also arrive at their destinations at the promised time, which is no easy task when making deliveries in the traffic of midtown Manhattan.
"Customer service has definitely gone up," says Ades. "Our trucks are on the road earlier, and we hit our delivery windows on time and [with the product] in good condition. Our customers now tell us, 'I'm going to order from you because I know I will get it on time.'"
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."