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.
In DC operations across America, "guesstimates" may be going the way of the dodo. Over the last couple of years, operations managers have had to pay much closer attention to the size of their outgoing shipments.
The new emphasis on precision is a response to parcel carriers imposing and enforcing so-called "dimensional weight" rules. Under those rules, shipping charges, particularly for large, lowdensity packages, are more likely to be based on a parcel's "dimensional" weight—a computation that includes its length, width, and height—than on its actual weight. Rate a package incorrectly, and you're likely to be hit with charge-backs and penalties.
To avoid those fines, many shippers have turned to dimensioning, or "cubing," systems. As a result, these devices, which use sensors or lasers to automatically gather dimensional and weight data, are fast becoming fixtures on shipping docks nationwide.
That same equipment, it turns out, can contribute to efficiency on the receiving dock as well. In fact, dimensioning systems were initially developed for the back end of the warehouse. Here, the systems are used to record the dimensions of individual products or cartons, as opposed to entire shipments, for use in storage, or "slotting," assignments. Capturing accurate dimensions of all incoming products can help users make slotting decisions that lead to more efficient use of DC storage capacity, says Steve W. Trommer, vice president of Trommer & Associates, a consulting firm that specializes in facility design and material handling.
Of course, slotting decisions involve a lot more than determining the most efficient use of storage space. Factors such as how quickly SKUs turn and what products tend to ship together are all essential to good slotting decisions.
But accurate physical measures are nonetheless an important part of those decisions. And it's not a static issue. Products change, and so, too, does product packaging. If the facility fails to capture those changes, DC slotting efficiency will diminish over time. Trommer says that's something DC managers often overlook when considering possible causes for declining productivity. "When operations managers come to us, they may be looking at inventory quality, but they have never re-profiled their material handling system," he says. "They may be using a six-foot space for a product that now comes in a smaller volume or in less than pallet loads."
Quick returns
Trommer advocates that companies invest in dimensioning systems like the Cubiscan line of dimensioning systems from Quantronix or similar tools sold by Mettler Toledo, arguing that buyers can expect a quick return on their investment. That's largely a result of labor savings, he says. To illustrate his point, Trommer cites slotting projects his company completed for two customers with similar SKU profiles. One, using a cubing tool, captured the cube and weight of 721 SKUs in three days. The other, with employees using tape measures, needed three weeks to capture the dimensions of 750 SKUs.
"A cubing device can save an enormous amount of time measuring a large number of items," says Randy Nielsen, vice president of Quantronix. He says the company's Cubiscan 100 model, for example, can capture the dimensions of more than 100 items an hour.
Trommer further argues that dimensioning systems are much more accurate than workers measuring by hand. Tape measure readings are subject to interpretation, he explains, and even slight variations in readings can have a big effect on productive slotting. "If you are off by a half inch," he says, "that can have a large impact on the days of inventory in a flow module."
Current cubing systems offer accuracy of two-tenths of an inch or better, manufacturers say. Some of the systems aimed at the distribution and warehousing markets have even closer tolerances, with some small devices offering accuracy down to one one-hundredth of an inch for products like books and CDs. Nielsen says that for warehousing and distribution applications, accuracy to one-tenth of an inch or better is essential.
The best systems for slotting
For applications like capturing data for slotting, static systems, as opposed to inmotion systems mounted over conveyors, appear to be the tool of choice. Manufacturers offer a range of those products, from devices aimed at capturing data from items as small as CDs up to pallet dimensioners.
The systems also have the advantage of being user friendly, Nielsen says. "Our static systems are user installable and user maintainable," he says. "The customer can open the shipment, unpack the device, load software to its PC, plug it in, and away they go. You can be up and running within an hour."
As for the procedural side of the dimensioning process, Trommer says the easiest way to capture dimensional data is to measure carton sizes as they arrive. But that leaves the question of what to do about slower movers that may not arrive during the time period set for a re-slotting project— say, a month or so.
Trommer says in those cases, the easiest thing to do is go out and capture data at the items' current locations. Many of the cubing devices on the market today are designed to mount on portable carts for that reason. The mobile cubing systems run on battery power and can feed information as it is captured into a PC on the cart or, through a wireless connection, directly upload it to a warehouse management system or an enterprise resource planning system, he says.
Most modern WMS and ERP programs have built-in fields for capturing weight and dimensional data, he adds. "If you have a legacy system, you have more of an issue. You may have to go back to the programmers."
Nielsen expands on that point: "The whole goal is to eliminate or, in some cases, minimize the work the IT department has to do to adjust or tweak the WMS. We've taken a look at a lot of WMS, TMS, slotting, and manifesting software and come up with software systems that are virtually plug and play. There will always be some exceptions, but very few."
Standard equipment?
Right now, cubing systems are generally considered optional equipment for warehouses, but that might be about to change. The ability to capture and upload dimensional and weight data quickly may become an imperative for DC operations. "Industrial engineers are making it mandatory," says Jerry Stoll, marketing manager for Mettler Toledo, a Switzerland-based manufacturer of scales and cubing equipment. "Companies are more stressed to save pennies."
Stoll adds that precise dimensional information can prove useful for purposes other than slotting. For instance, accurate size and volume information also helps managers allocate operational costs to products based on the space they occupy in the DC.
But whatever the end use, one thing remains the same: The first step is taking the measure of the goods.
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.
Global trade will see a moderate rebound in 2025, likely growing by 3.6% in volume terms, helped by companies restocking and households renewing purchases of durable goods while reducing spending on services, according to a forecast from trade credit insurer Allianz Trade.
The end of the year for 2024 will also likely be supported by companies rushing to ship goods in anticipation of the higher tariffs likely to be imposed by the coming Trump administration, and other potential disruptions in the coming quarters, the report said.
However, that tailwind for global trade will likely shift to a headwind once the effects of a renewed but contained trade war are felt from the second half of 2025 and in full in 2026. As a result, Allianz Trade has throttled back its predictions, saying that global trade in volume will grow by 2.8% in 2025 (reduced by 0.2 percentage points vs. its previous forecast) and 2.3% in 2026 (reduced by 0.5 percentage points).
The same logic applies to Allianz Trade’s forecast for export prices in U.S. dollars, which the firm has now revised downward to predict growth reaching 2.3% in 2025 (reduced by 1.7 percentage points) and 4.1% in 2026 (reduced by 0.8 percentage points).
In the meantime, the rush to frontload imports into the U.S. is giving freight carriers an early Christmas present. According to Allianz Trade, data released last week showed Chinese exports rising by a robust 6.7% y/y in November. And imports of some consumer goods that have been threatened with a likely 25% tariff under the new Trump administration have outperformed even more, growing by nearly 20% y/y on average between July and September.