Although the supply chain industry represents the very essence of the global economy, a surprising number of logistics service providers and their clients seem to be having difficulty defining a clear global outsourcing strategy.
Although the supply chain industry represents the very essence of the global economy, a surprising number of logistics service providers (LSPs) and their clients seem to be having difficulty defining a clear global outsourcing strategy.
International trade is no longer something they can safely ignore. There is little doubt that we are part of the global economy and will continue to be so. U.S. international trade in goods and services has grown to 28 percent of GDP (gross domestic product) in 2007 from 10.7 percent in 1970.
As the number of companies getting involved in global trade has soared, so has demand for international expertise. Global trade requires a broad knowledge of regulations, cultures, operations, and currencies that many managers do not possess. The global LSPs often are in a much better position to manage international supply chains than the clients themselves are.
In fact, the explosion in global trade has already caused a dramatic shift in the logistics service industry. The nation's strong domestic LSPs play a valuable role in U.S. logistics and will continue to do so for some time to come. But during the past five years, more and more shippers have suddenly found themselves in need of a freight forwarder's or customs broker's services. Because many of these shippers prefer to use a single provider for all their needs, they're turning to global players for both their domestic and international requirements. As a result, the list of preferred provider candidates is quite different from what it was just a few years ago. Of the world's top 20 global providers (by revenue) only four are based in the United States.
A number of these global players have their origins in freight forwarding, and several—such as UTi and DHL—have strong contract logistics capabilities as well. They have incorporated these capabilities into their overall offerings and thus, enhanced their service menus.
Lately, however, some confusion seems to be developing regarding the LSP marketplace (particularly with the forwarding-based firms), resulting in some unwarranted concerns. Several of the larger providers are publicly traded, and it appears that in some cases, financial analysts have contributed to the confusion. When evaluating the forwarders' contract logistics operations, they've looked at client turnover rates and sounded the alarm. What they apparently don't realize is that forwarding and contract logistics are two very different kinds of businesses and cannot be judged by the same standards. In contract logistics, it's normal for clients to come and go. It's also normal for clients to change their own marketing and supply chain strategies from time to time, which leads them to re-evaluate and perhaps, modify their distribution networks. This is the "nature of the beast"; it does not mean that the contract logistics service provider has failed to perform satisfactorily.
At the same time, it appears that corporate restructurings by some of the larger players have also given rise to misguided speculation. In order to concentrate equally on both segments of their business, some of the providers have recently split their forwarding and logistics units. Some industry pundits have seized on that as a sign of trouble or even possible divestiture. Others have publicly speculated that it will be more difficult for them to offer a total solution when separate entities are involved.
I would suggest that just the opposite is true. By placing highly qualified individuals in charge of the separate businesses, the freight forwarderbased providers appear to be re-emphasizing their commitments to each segment. As one wellrespected LSP executive has suggested: If you have two strong entities working together with a strong bridge in between, you can have the best of both worlds.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.
After years in the military, service members and their spouses can find the transition to civilian life difficult. For many, a valuable support on that journey is the U.S. Department of Defense (DOD) SkillBridge program. During their final 180 days of service, participants in the program are connected with companies that provide them with civilian work experience and training. There is no cost to those companies while the service member continues receiving military compensation and benefits.
Both sides benefit from the program. “We’re proud to work with SkillBridge to give back to our military veterans for the bravery and sacrifices they’ve made for all of us,” Troy Pederson, director of training and development at LiftOne, a Hyster-Yale dealer and established SkillBridge employer, said in a release. “In the last year, we’ve helped 10 SkillBridge interns transition from military to civilian life, and the value and positive impact of the program can’t be overstated. At LiftOne, we’ve gained so much from the experience and diverse mix of technical and leadership skills of our SkillBridge candidates.”
Raise your hand if you think you’re a pretty good driver. Now put your hand back down, because we’re about to introduce you to someone who has set the bar much higher than you can ever dream of reaching.
Meet Greg Swift, a longtime driver for Schneider National Inc. who has driven 5 million miles without a preventable accident. The Green Bay, Wisconsin-based carrier boasts a notable safety record: More than 6,500 of its drivers have traveled at least 1 million safe driving miles with the company. Swift, however, stands out from that crowd, joining only two other drivers in Schneider’s nearly 90-year history in reaching the 5 million-mile mark.
Swift’s achievement was recognized with a parade, a “Sound the Horn” celebration—a long-standing tradition of sounding a truck horn inside the headquarters building to celebrate achievements—and a $10,000 bonus.
And if you’re wondering how long it takes to motor 5 million miles, that’s the equivalent of driving to the moon and back 10 times. Swift began that odyssey 33 years ago when he started his career with Schneider after leaving his teaching job. He now runs a dedicated route for Schneider customer Georgia-Pacific.
In his time as a driver, Swift has witnessed the evolution of trucking technology from paper maps to advanced GPS and collision-mitigation systems, but his advice to new drivers is simple and technology-free: Plan ahead and manage your time efficiently.