Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
For most distribution/supply chain managers, the question doesn't really require much in the way of explanation. When asked how many distribution centers they oversee, they can give a simple, direct answer: two or 17 or 153. But Mark Pollard doesn't have this luxury. Though his company ships to sites all over the country, it operates without a single DC.
How does he accomplish that? He gets by with a little help (well, actually a lot of help) from his motor carriers. His company, the Finland based Raflatac, has U.S. manufacturing facilities in Fletcher, N.C.; Loveland, Ohio; and Ontario, Calif. From these sites, it reaches customers across the United States with a combination of truckload consolidation and less-than-truckload (LTL) distribution service. In essence, it has built a distribution network without ever building a DC.
That might have been a difficult feat to pull off a few years back. But not today. LTL haulers have made a big push in recent years to trim transit times on thousands of lanes and extend the geography they can reach in one or two or three days. As a result, some next-day lanes stretch out as far as 700 or 800 miles (and on-time performance among top carriers now routinely reaches close to 99 percent).
Stock in trade
A relatively new presence in the United States, Raflatac manufactures paper and film pressure-sensitive label stock that is used in a wide variety of industries. Raflatac label stock turns up on everything from the small labels on your apples to the fancy embossed labels on fine wines to the barcode labels used in your DC. Its primary customers are the printers and converters who produce the actual labels.
Pollard, who is supply chain manager for Raflatacs U.S. operations, says his company's strategy for competing in the U.S. market centers on speed. Not only will the North Carolina facility take orders as late as 4 pm. on Monday for delivery to a customer in the eastern United States on Wednesday, he says, but the whole manufacturing system is geared toward fast replenishment.
To keep expenses under control, Raflatac ships products out of its DCs in truckload quantities. On average, the company ships 30 to 40 truckloads a day from its Fletcher facility. (C.H. Robinson, a major non-asset-based third-party logistics company, manages the truckload shipping process for Raflatac.) Many of the truckload shipments move directly to customers, which is Pollard's preference because of the cost advantage over LTL. "We only do LTL if we have to," he says.
Even so, 14 or 15 of the daily truck loads shipped out of the North Carolina plant are consolidated LTL shipments. The average order consists of about 2.5 pallets, and as many as 15 customers' shipments may be in one consolidated truckload. Each of those consolidated truckloads moves to one of 11 FedEx Freight hubs. There, the shipments are shifted into the LTL carrier's network for next-day delivery to Raflatac's customers. (FedEx Freight is the multiregional LTL subsidiary of FedEx Corp. It has two units, the former Viking Freight System and the former American Freightways, which combined reach most addresses in the United States.) Despite the time required for handoffs, Pollard says, this is faster than pure truck load freight transportation.
Destination anywhere
With its "rolling DCs" in place, Raflatac was able to create a nearly instant—and extremely flexible—nationwide distribution network. "As a bulk manufacturer, we felt it was important for us to consolidate our sites to as few as possible," says Pollard. "This has allowed us to compete differently. We penetrate markets using our distribution network." That, he says, is far cheaper than building distribution facilities, especially since the destination hubs change continuously, based on Raflatac's current orders.
The system also allows Raflatac to split production among facilities but still consolidate individual customer shipments at the FedEx Freight hubs so that customers receive a single delivery. "It gives us more agility," Pollard says."It allows us to make the best use of our resources internally."
Making the system work requires close collaboration between the company and the carriers, he says. And that means finding the right partners. "It comes to one thing," Pollard says, "people."
That's people, not price. Pollard is quick to note that the company competes based on efficient network operations, not on the transportation rate."The key thing for me is that FedEx makes good money," he says. "We bring costs down by innovative solutions, not the rate. Many people don't realize that transportation costs are not determined so much by rates as by the way you manage it.We've brought down our costs by 20 percent by collaborating to increase efficiency. You'd never be able to reduce costs by 20 percent through rates alone."
One key to making the system work is finding collaborators that offer sufficient geographic reach, Pollard adds. "The companies we work with have to have nationwide coverage," he says, noting that this requirement limits the pool of available carriers. "You can't build links with many companies. First, they need physical presence, then consistent service capability. They have to be strong across the board."
Though FedEx Freight met all the stated requirements, Pollard still moved cautiously in selecting the company as its LTL carrier. Though his goal from the outset was to have a single LTL provider, he used several carriers in the early days to mitigate risk. Why the caution? Because in a system like this, the carrier must necessarily become part of the distribution strategy, he answers. "Once the systems are in place, it is very difficult to change."
Moving out
Raflatac is not the only manufacturer using trucks as rolling DC s these days. The accelerating velocity of inventory-or at least the desire to accelerate the movement of goods through the supply chain-is driving many companies to use carriers to extend distribution's geographic reach. Denny Carey, vice president of marketing for FedEx Freight, says, "It is not an exaggeration; we have customers manufacturing products today that are shipped tomorrow to be on the shelf tomorrow afternoon." He says that based on customer demands, FedEx Freight is continuing to cut transit times between hundreds of ZIP code pairings.
A number of other LTL carriers have followed suit, including regional, multiregional and national haulers. For example, Roadway Express, a major national LTL carrier, has tightened its service standards on 40,000 lanes, says Tom Collins, a group manager in the carrier's marketing department. "From a distribution standpoint, our customers are looking to use our network in place of their real estate," Collins says. He adds that Roadway has set up regional networks to help meet the growing demand for regional transportation. "Customers are using our distribution network as their distribution network."
Dave Miller, president and CEO of Con-Way Southern Express, has observed this trend as well. He says that his company's customers are using the regional carrier's network "to be closer to their customers without expending capital." Con-Way Southern is part of the Con-Way Transportation Services family of regional LTL carriers that also include Con-Way Western Express and Con-Way Central Express.
Con-Way, too, has made major efforts to tighten service standards in its carriers' networks. Its next-day service now reaches as far as 700 miles, Miller says. For example, John Guice, vice president of sales for Con-Way Southern, says the carrier has improved service on 6,000 lanes in the past year. "We've found some customers who have been able to close warehouses by allowing direct LTL shipments to customers," he says. He reports that one customer distributing petroleum products from central Texas uses the carrier to reach both coasts in two days.
And there's every indication that this trend will continue. A recent Freight Pulse survey by Morgan Stanley Dean Witter asked shippers what services they were using. Not only did the results show a continuing shift away from national LTL carriers and toward regional carriers, but the analysis indicates there's plenty of reason to believe that regional carriers will gain further market share as they extend their geographic reach.
The supply chain risk management firm Overhaul has landed $55 million in backing, saying the financing will fuel its advancements in artificial intelligence and support its strategic acquisition roadmap.
The equity funding round comes from the private equity firm Springcoast Partners, with follow-on participation from existing investors Edison Partners and Americo. As part of the investment, Springcoast’s Chris Dederick and Holger Staude will join Overhaul’s board of directors.
According to Austin, Texas-based Overhaul, the money comes as macroeconomic and global trade dynamics are driving consequential transformations in supply chains. That makes cargo visibility and proactive risk management essential tools as shippers manage new routes and suppliers.
“The supply chain technology space will see significant consolidation over the next 12 to 24 months,” Barry Conlon, CEO of Overhaul, said in a release. “Overhaul is well-positioned to establish itself as the ultimate integrated solution, delivering a comprehensive suite of tools for supply chain risk management, efficiency, and visibility under a single trusted platform.”
Artificial intelligence (AI) and data science were hot business topics in 2024 and will remain on the front burner in 2025, according to recent research published in AI in Action, a series of technology-focused columns in the MIT Sloan Management Review.
In Five Trends in AI and Data Science for 2025, researchers Tom Davenport and Randy Bean outline ways in which AI and our data-driven culture will continue to shape the business landscape in the coming year. The information comes from a range of recent AI-focused research projects, including the 2025 AI & Data Leadership Executive Benchmark Survey, an annual survey of data, analytics, and AI executives conducted by Bean’s educational firm, Data & AI Leadership Exchange.
The five trends range from the promise of agentic AI to the struggle over which C-suite role should oversee data and AI responsibilities. At a glance, they reveal that:
Leaders will grapple with both the promise and hype around agentic AI. Agentic AI—which handles tasks independently—is on the rise, in the form of generative AI bots that can perform some content-creation tasks. But the authors say it will be a while before such tools can handle major tasks—like make a travel reservation or conduct a banking transaction.
The time has come to measure results from generative AI experiments. The authors say very few companies are carefully measuring productivity gains from AI projects—particularly when it comes to figuring out what their knowledge-based workers are doing with the freed-up time those projects provide. Doing so is vital to profiting from AI investments.
The reality about data-driven culture sets in. The authors found that 92% of survey respondents feel that cultural and change management challenges are the primary barriers to becoming data- and AI-driven—indicating that the shift to AI is about much more than just the technology.
Unstructured data is important again. The ability to apply Generative AI tools to manage unstructured data—such as text, images, and video—is putting a renewed focus on getting all that data into shape, which takes a whole lot of human effort. As the authors explain “organizations need to pick the best examples of each document type, tag or graph the content, and get it loaded into the system.” And many companies simply aren’t there yet.
Who should run data and AI? Expect continued struggle. Should these roles be concentrated on the business or tech side of the organization? Opinions differ, and as the roles themselves continue to evolve, the authors say companies should expect to continue to wrestle with responsibilities and reporting structures.
Shippers today are praising an 11th-hour contract agreement that has averted the threat of a strike by dockworkers at East and Gulf coast ports that could have frozen container imports and exports as soon as January 16.
The agreement came late last night between the International Longshoremen’s Association (ILA) representing some 45,000 workers and the United States Maritime Alliance (USMX) that includes the operators of port facilities up and down the coast.
Details of the new agreement on those issues have not yet been made public, but in the meantime, retailers and manufacturers are heaving sighs of relief that trade flows will continue.
“Providing certainty with a new contract and avoiding further disruptions is paramount to ensure retail goods arrive in a timely manner for consumers. The agreement will also pave the way for much-needed modernization efforts, which are essential for future growth at these ports and the overall resiliency of our nation’s supply chain,” Gold said.
The next step in the process is for both sides to ratify the tentative agreement, so negotiators have agreed to keep those details private in the meantime, according to identical statements released by the ILA and the USMX. In their joint statement, the groups called the six-year deal a “win-win,” saying: “This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coasts ports – making them safer and more efficient, and creating the capacity they need to keep our supply chains strong. This is a win-win agreement that creates ILA jobs, supports American consumers and businesses, and keeps the American economy the key hub of the global marketplace.”
The breakthrough hints at broader supply chain trends, which will focus on the tension between operational efficiency and workforce job protection, not just at ports but across other sectors as well, according to a statement from Judah Levine, head of research at Freightos, a freight booking and payment platform. Port automation was the major sticking point leading up to this agreement, as the USMX pushed for technologies to make ports more efficient, while the ILA opposed automation or semi-automation that could threaten jobs.
"This is a six-year détente in the tech-versus-labor tug-of-war at U.S. ports," Levine said. “Automation remains a lightning rod—and likely one we’ll see in other industries—but this deal suggests a cautious path forward."
Editor's note: This story was revised on January 9 to include additional input from the ILA, USMX, and Freightos.
Logistics industry growth slowed in December due to a seasonal wind-down of inventory and following one of the busiest holiday shopping seasons on record, according to the latest Logistics Managers’ Index (LMI) report, released this week.
The monthly LMI was 57.3 in December, down more than a percentage point from November’s reading of 58.4. Despite the slowdown, economic activity across the industry continued to expand, as an LMI reading above 50 indicates growth and a reading below 50 indicates contraction.
The LMI researchers said the monthly conditions were largely due to seasonal drawdowns in inventory levels—and the associated costs of holding them—at the retail level. The LMI’s Inventory Levels index registered 50, falling from 56.1 in November. That reduction also affected warehousing capacity, which slowed but remained in expansion mode: The LMI’s warehousing capacity index fell 7 points to a reading of 61.6.
December’s results reflect a continued trend toward more typical industry growth patterns following recent years of volatility—and they point to a successful peak holiday season as well.
“Retailers were clearly correct in their bet to stock [up] on goods ahead of the holiday season,” the LMI researchers wrote in their monthly report. “Holiday sales from November until Christmas Eve were up 3.8% year-over-year according to Mastercard. This was largely driven by a 6.7% increase in e-commerce sales, although in-person spending was up 2.9% as well.”
And those results came during a compressed peak shopping cycle.
“The increase in spending came despite the shorter holiday season due to the late Thanksgiving,” the researchers also wrote, citing National Retail Federation (NRF) estimates that U.S. shoppers spent just short of a trillion dollars in November and December, making it the busiest holiday season of all time.
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
As U.S. small and medium-sized enterprises (SMEs) face an uncertain business landscape in 2025, a substantial majority (67%) expect positive growth in the new year compared to 2024, according to a survey from DHL.
However, the survey also showed that businesses could face a rocky road to reach that goal, as they navigate a complex environment of regulatory/policy shifts and global market volatility. Both those issues were cited as top challenges by 36% of respondents, followed by staffing/talent retention (11%) and digital threats and cyber attacks (2%).
Against that backdrop, SMEs said that the biggest opportunity for growth in 2025 lies in expanding into new markets (40%), followed by economic improvements (31%) and implementing new technologies (14%).
As the U.S. prepares for a broad shift in political leadership in Washington after a contentious election, the SMEs in DHL’s survey were likely split evenly on their opinion about the impact of regulatory and policy changes. A plurality of 40% were on the fence (uncertain, still evaluating), followed by 24% who believe regulatory changes could negatively impact growth, 20% who see these changes as having a positive impact, and 16% predicting no impact on growth at all.
That uncertainty also triggered a split when respondents were asked how they planned to adjust their strategy in 2025 in response to changes in the policy or regulatory landscape. The largest portion (38%) of SMEs said they remained uncertain or still evaluating, followed by 30% who will make minor adjustments, 19% will maintain their current approach, and 13% who were willing to significantly adjust their approach.