CARB weighs in
Re: "California plans reefer restrictions," NewsWorthy, September 2008
The California Air Resources Board (CARB) takes issue with a number of statements in a recent news story about two new trucking regulations in that state, believing them to be misleading and inaccurate. What follows is a list of statements from the original news story, followed by CARB's revised version.
1. Original statement: The California Air Resources Board (CARB) plans to impose restrictions on the use of refrigerated containers for extended cold storage by the end of 2008, assuming that it receives federal approval. CARB must obtain permission from the federal Environmental Protection Agency for implementation of its rules since the regulations would affect interstate commerce.
CARB's revised statement: "The California Air Resources Board
(CARB) plans to start preliminary rulemaking activities in late 2008 and formal rulemaking by spring of 2009 that would impose restrictions on the use of diesel-powered transport refrigeration units for extended cold storage at facilities. The board's rule adoption hearing would take place in late 2009 and compliance dates would probably begin early 2011. A [federal] waiver ... is not required for this type of rule."
2. Original: CARB's restrictions on temporary cold storage are part of the agency's new environmental standards for diesel-powered inuse transport refrigeration units (TRUs).
CARB's revision: "CARB's restrictions on temporary cold storage are part of the agency's new Climate Change Program."
3. Original: In addition to the parking restrictions, CARB's new rules call for the phase-out of TRUs that are more than seven years old. Operators will be required to retrofit existing units with cleaner-burning diesel engines or buy new reefers.
CARB's revision: "In addition to the parking restrictions, CARB's new rules call for transport refrigeration units (TRUs) that are more than seven years old to meet in-use performance standards. Operators will be required to retrofit existing units with diesel particulate filters, replace noncompliant engines with cleaner new or rebuilt diesel engines, use an alternative technology, or replace noncompliant reefers."
4. Original: Fleets operating reefers that use alternative technologies, such as electric power, are generally exempt from the regulations.
CARB's revision: "Fleets operating reefers that use alternative technologies, such as electric-standby, are not exempt from the regulations, but can comply with the in-use performance standards if they eliminate diesel engine use at facilities."
5. Original: Out-of-state motor carriers and fleets will also have to retrofit or replace noncompliant TRUs before bringing refrigerated products into California.
CARB's revision: "Out-of-state motor carriers and fleets will also have to meet these in-use performance standards if they operate the TRU in California." Dimitri Stanich, submitted on behalf of CARB
DHL still under fire
Re: "DHL in the hot seat," NewsWorthy, October 2008
While the piece in question was fairly interesting, it misstated a point about the Airborne Express history.
With the exception of losses in 2001 (caused by flight interruptions following the 9/11 attacks), Airborne posted profits every year (which can be verified via its SEC filings).
DHL has, in effect, run a successful player into the ground with its bloated bureaucratic policies and disregard of the customer experience. Airborne was by far the smallest of the three domestic carriers, but it was successful because it didn't try to be all things to all people. Mark S. Bower, Seattle, Wash.
Editor's note: The writer worked for Airborne Express before the DHL acquisition and then for DHL until the company laid off most of its sales team last month.
DHL's parent company, Deutsche Post, is solely to blame for the mess the company is in. Deutsche Post managers have been trying to run an air express service using a post office model. They have pushed volume over quality, cheapness over good service. Bottom line, there are just too few people who want to use their poor, post office-style product. Now they are blaming ABX to cover their own blunders. But in reality, they destroyed themselves and will take a lot of hardworking people down with them. John Charte
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.
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.
This story first appeared in the July/August issue of Supply Chain Xchange, a journal of thought leadership for the supply chain management profession and a sister publication to AGiLE Business Media & Events’ DC Velocity.
Companies can find it challenging to meet the increasing demand to make their supply chains sustainable—except when external events force their hands.
Our research shows that when large-scale disruptions compel companies to rethink their operations, improving sustainability is often part of the redesigned supply chains that emerge from such crises. Counterintuitively, supply chain sustainability (SCS) efforts appear to thrive in a crisis.
While companies should not limit their SCS efforts to crises, an awareness of these opportunities can help them identify opportune moments to advance their green agendas. This is especially the case in today’s volatile business environment, where adjustments to operational footprints in response to disruptive market forces are becoming more frequent.
The pressure to make supply chains more sustainable has risen steadily over the four years we have done this research. We measure 10 sources of pressure, including investors, government entities, corporate buyers, company executives, and consumers, and the pressure from all of them has increased over the four years.
Investors represent the fastest-growing source, with a 25% increase in average respondent score throughout observation. Next come corporate buyers, with a 15% increase, followed by governments and governing bodies (11%).
Overall, the research indicates that commercial interests—be it access to capital gated by sustainability-minded investors or sales opportunities gated by sustainability-minded procurement teams—are pushing companies to improve their SCS performance year after year.
OBSTACLES TO SCS
However, meeting stakeholder expectations of significant reductions in supply chain carbon footprints is still a stretch for many companies.
Reducing Scope 3 emissions—those associated with assets not owned by the company and therefore largely out of their control—is proving particularly tricky. These problems are reflected in our latest research. Almost half of the “2023 State of Supply Chain Sustainability” report respondents indicated their organizations will not begin measuring or reducing Scope 3 emissions for five years or more. Scope 3 reporting and collecting reliable data across company boundaries appear to be especially challenging.
Another indicator of the bumpy road to SCS is the number of companies rethinking or scaling back their net-zero emissions pledges. Again, these issues are reflected in our research. Across all global respondents in the 2023 report, only 35% confirmed that their companies have net-zero goals. Moreover, many within this minority group appear unprepared for the net-zero deadlines they set for themselves.
DON’T WASTE A CRISIS
Four years of researching SCS efforts have allowed us to study the impact of various large-scale global crises on firms’ commitment to this work. We have found that the effect varies with the type of disruption experienced.
For the most part, crises that provoke acute supply chain network disruptions necessitating supply lines to be redrawn tend to result in an increased commitment to sustainability in supply chains. However, economic crises that require companies to regroup tend to dampen their SCS commitments.
For example, in the 2023 report, respondents were asked to rate their companies’ continued commitment to SCS in light of three crises: the Covid-19 pandemic in 2020–21, Russia’s invasion of Ukraine (asked in 2023), and adverse economic conditions in 2023. In the first two cases, SCS efforts did not flag, but they did in the third situation. The survey results show that 79% of respondents confirmed that their SCS commitments increased in response to the Covid-19 pandemic, and 61% said they have increased due to the Ukraine invasion.
In contrast, 56% of respondents indicated that their commitments to SCS declined over concerns that an economic slowdown was imminent in 2023. The research shows that when an economic downturn is in the offing, firms tend to concentrate on developing leaner, more cost-effective supply chain networks, even when such efforts do not align with sustainability goals. Also, companies are more focused on short-term risk-mitigation efforts—rather than longer-term sustainability targets—when dealing with economic headwinds.
However, when global disruptions upend operations, the reaction is different. Companies redesign their supply chain networks in response, and building sustainability into these revamps makes sense. In recent years, we’ve observed that the most opportune time to redesign a supply chain with sustainability in mind is, paradoxically, when the supply chain is broken.
AN EXTENSION OF REDESIGN
In today’s uncertain world, there is no shortage of global-scale disruptions to supply chains, and these are unlikely to diminish in the face of future uncertainties, such as climate change and geopolitical instability.
Framing SCS as part of a company’s ongoing supply chain network redesign efforts might be a way to secure resources for these programs.
Moreover, perhaps this rationale need not be restricted to global crises. A host of competitive challenges can require firms to review the structure of their end-to-end operations. A company might need to change the geographic profile of its supply base as political tensions rise, decentralize its supply chain to reduce risk, or reconfigure its last-mile operations in changing e-commerce markets.
Further research is needed into the relationship between sustainability efforts and managing and mitigating disruption risks. Meanwhile, current and potential disruptions can offer an opportunity to integrate sustainability into the design and management of supply chains.
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!