Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
The trough of a recession might seem an unpropitious time to take the helm of an influential trade association, but you won't hear Michael Mikitka complain. Though he acknowledges that "economics have made membership a more challenging product to sell," Mikitka, who was recently named executive director of the Warehousing Education and Research Council (WERC), is quick to point out that a downturn doesn't diminish the need for professional education and training. As long as there are warehouses, managers will want information on how they can refine and improve their processes—and that is precisely what his group intends to provide.
Education is a subject close to Mikitka's heart. He began his career as a technical writer preparing educational materials for the Property Loss Research Bureau, an insurance trade association. He later moved to a job developing programming for the group's annual conference, a job he parlayed into a similar role at WERC, which he joined in 2000.
Mikitka, who graduated from Illinois State University with a B.A. in industrial/organizational psychology, holds the prestigious Certified Association Executive (CAE) and Certified Meeting Professional (CMP) designations. He met recently with DC VELOCITY Group Editorial Director Mitch Mac Donald to talk about the programs WERC is developing, the group's online initiatives, and why the days of the 500-page book are over.
Q: How would you describe WERC's mission?
A: WERC's mission is to provide resources to the warehousing and distribution industries, whether it's learning opportunities, products, or services. The association has also played a role in raising the profile of warehousing and distribution.
WERC also provides networking opportunities through our events, our committees, and our regional chapters, which extend WERC's reach to the local level.
Q: Could you talk a little about the regional chapters and their activities?
A: Our chapters serve as volunteer-driven extensions of the national organization. The local chapters help us to serve a member who might be working with more limited resources and can't attend the national conference every year. They also allow members to bring their front-line people into association activities, again without the expense of attending the national conference. Our chapters give us the ability to provide learning and enrichment opportunities to larger segments of our members' operational teams through local facility tours, networking events, and speaker presentations.
Q: In the current economic climate, everyone's looking for ideas for cutting costs, streamlining operations, and so forth. Would you say that the role of educationfocused associations like WERC is more important now than it might be in better times?
A: I don't know that I would say more so now. I think that [education support] is what we always provide. That said, our members are certainly like everyone else in business right now in that they're being challenged by the economic environment. So they clearly are looking for more information and ideas to help them not just survive, but perhaps thrive in this downturn. For instance, as business is a bit slower, this is an excellent time to focus on training, and WERC can help with that.
Q: What sorts of programs is WERC currently developing for its members?
A: From an ongoing perspective, there is our annual distribution center metrics and benchmarking study, which we do jointly with DC VELOCITY, Georgia Southern University, and Supply Chain Visions. Having done that for six years, we are now in a position to offer trending information as far as DC metrics go, which I think is valuable and which is something our members have always been looking for.
We're also looking at moving more of our products and resources online, whether through online learning or other programs. We are experimenting with the social networks that are out there—the LinkedIns and the Twitters. We are also always looking to expand our menu of online tools. A good example is our online benchmarking tool. It allows a member company to go in and enter its own DC performance numbers to see how they compare with data from the DC metrics study. So that is giving our members tools and information they need to refine and improve their processes.
Q: It seems most every association is currently facing challenges in maintaining its membership base. How are things trending with WERC?
A: Economics have made membership a more challenging product to sell if you can consider it a stand-alone product. But we are seeing upswings in other areas, like online courses and sales of our publications. Although conference attendance was off a little bit this year, our attendee surveys still show that we deliver a very good product, a very good experience. That's something we remain committed to.
Q: You've now been involved with WERC in some capacity for nine years. What has kept you there for so long?
A: We have a really great membership. I mean, this is a good field. It is a business that has to be responsive, and it expects that same type of responsiveness from an association in terms of the products and services we provide. It is a very realistic group to work with. That is one of the nice things about WERC and our membership and the profession we serve.
Q: How do you stay on top of industry trends and your members' changing information needs? Do you have a formal process for that?
A: We have several ways of gathering that information. We do it through member surveys. We do it through talking with members. We do it through direction from our board of directors regarding trends they are seeing. We also use research that may be presented to us by the educators in our field.
We're also making some changes in the way we present information to members. When we do research, our publications are more targeted than in the past. The days of the 500-page book are over. We're now focusing more on the practical, quick-read type of approach.
The question we ask ourselves when developing products and resources as well as our conference sessions is, What is the takeaway from this particular item? You'll find something to take away from each of our offerings, whether it's a conference session, a facility tour, or an online course. For example, with a conference session, it might be the top five things to look for when choosing a system, or the top three things to avoid when implementing a system.
Q: If you were asked to identify the one industry trend or development that has the greatest potential to benefit the profession going forward, what would it be?
A: Distribution and transportation are closely tied in the supply chain. The transportation infrastructure in the United States is a major opportunity for warehousing, distribution, and logistics in general. As there seems to be a focus in Washington on roads, bridges, and rail, there is the opportunity for cost savings and quicker transit, adding more flexibility to the supply chain.
Q: What advice would you offer to young people looking to pursue a career in the logistics profession?
A: Learn as much about the profession as they can. The best way to do that, I think, is to identify a network of people who can help them learn. That network could be through WERC—either at the local chapter level or the national level. Or it could be through other industry associations. There are certainly other great industry associations out there.
What you don't know in life, good people will teach you. It's a matter of finding the right teachers.
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.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."