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 conventional wisdom says that an economic slump is no time to try to build up a trade association's membership or launch a series of bold new initiatives. But apparently Joel D. Anderson either never got the word or chose to ignore it. Since taking the reins of the International Warehouse Logistics Association (IWLA) three years ago, Anderson has worked steadily to inject a new sense of purpose into the venerable organization. He has revitalized IWLA's government affairs program, expanded its education offerings, and—perhaps most impressive of all—implemented a membership recruitment and retention program that led to positive financial growth in 2009.
Anderson, who serves as the group's president and chief executive officer, has long experience in the association world. Prior to joining IWLA, he spent 28 years with the California Trucking Association (CTA), the last 13 as executive vice president and CEO. Before joining CTA, Anderson was an economist with the California Public Utilities Commission. He has a community college teaching credential in marketing and distribution, and has served on state and national panels on transportation, goods movement, and mobility.
Anderson spoke recently with DC Velocity Group Editorial Director Mitch Mac Donald about the challenges facing IWLA's members, the shifting regulatory winds, and what shippers might not know about 3PL services.
Q: Could you start by telling us a little bit about your background and how you came to be where you are today? A: I graduated from UCLA in 1970 with a bachelor's degree in economics and then went to work as an economist for the California Public Utilities Commission, which regulated trucking in those days. I spent six or seven years with them, participating in rate-making and regulatory proceedings. At one of those proceedings, the head of the California Trucking Association's research department saw me in action. He offered me a job with the group, which I accepted.
I started out in the research department, and 15 years later, wound up running the whole organization. During my time there, I grew the finances and grew the membership in a trial-and-error way. I learned through the process how to run a pretty good government affairs shop and a pretty focused industry association.
I took a medical retirement in July 2005 when I had surgery for cancer. Afterwards, while I was sitting around trying to decide what to do next, I put my resume on the American Society of Association Executives' Web site, and it just so happened that IWLA was searching for a new president and CEO at that time. The search firm picked up my resume. I went through the process, got interviewed, and then received an offer to come here.
I started with IWLA in April 2006. In the first year, we grew a little bit, and in the second year, 2007, we grew substantially. 2008 was a retrenchment year—a time for realigning, refocusing, and restructuring the organization. In 2009, we began growing again, so I feel real good about the changes we made in 2008 to give us a better foundation to build on.
Q: Who are IWLA's members? A: I would say that facility-based third-party logistics service providers are the core of our membership. They range from the company that operates a single 50,000-square-foot warehouse all the way up to industry heavyweights like UPS Supply Chain Solutions.
Over the years, our members have gotten more and more involved in value-added services, so that the warehouse is not just a static facility that is racking goods, but an operation that handles all kinds of subassembly, kitting, packing, and order fulfillment tasks. I just toured a warehouse in Indiana where I'd say at least 15 percent of the square footage was devoted to conveyor racks, assembly lines, and Internet order fulfillment—you know, something you would not have seen 15 years ago.
Q: What are the key challenges your members face today, and what is IWLA doing to help them in that regard? A: There are several issues. One is a concern that probably wasn't on the radar screen with any frequency two years ago but in today's business climate, has become a growing problem for our members—the creditworthiness of their customers, the shippers or beneficial owners of the goods stored in the warehouse. We're seeing more problems with late payments and sometimes bankruptcies. So, we're getting more questions from members about the warehouse lien. Specifically, they want to know about the proper documentation and execution of the warehouse lien to protect their interests if, in fact, a customer goes into bankruptcy.
We're also getting more questions in these tough times on how to market: how to get your name out there, how to build your brand, how to take advantage of social media to market your services, and how to differentiate yourself in the marketplace.
We've done a number of things in response to those questions. For one thing, we developed the Logistics Services Locator (LSL), a free search engine that lets customers search for an IWLA member by location, company, keyword, and so on. We put a lot of effort into that and advertise it to the shipping community.
I also have developed a relationship with a consultant who specializes in 3PL marketing, Chip Scholes. He has made himself available to our members for help developing their marketing campaigns.
Basically, we're trying to help our members understand that in order to market their services successfully, they first have to sit down and analyze who they are and what they do better than anybody else. When times were good, people forgot that because freight came their way. But now, you'd better be able to deliver a clear message about who you are, what you bring, and why people should do business with you.
Q: What else do you offer in the way of member support? A. We also offer training and education. Our education programs focus on ways to make your company more profitable. We have seven live classes every year plus webinars—all C-level oriented.
In addition, we have really ramped up our government affairs and advocacy work. We feel that the days of deregulation are over. If the government is going to look at more aggressively or intrusively regulating the supply chain, we want to be there to try to make sure those regulations working their way through Congress and regulatory agencies won't negatively affect trade and commerce.
Q: What does the future hold for your members—both in the near term and the long term? A: It looks like people are starting to move inventories. You know, our industry totally relies on consumer behavior. The long and short of it is, if consumers buy, our people do well. If consumers don't buy, our people don't do well because it is velocity through the warehouse where our guys and gals make the money. I mean, storage is nice, but it's their move into value-added services that has significantly increased our members' role in the supply chain, and that is influenced by consumer behavior.
To a great extent, two items affect the long-term profitability of our members. One is regulations on international trade and commerce. In other words, how free is free trade? If international trade can flow freely, then we have an opportunity to be real creative in helping our manufacturers and shippers outsource, resource, insource—you know, whatever it takes to get the right amount of the right product to the right customer on time. Number two is encouraging our consumers to buy things. Almost everything else is secondary to that because if consumers are going to buy, then freight is going to move and we are going to have an opportunity to make money.
Q: What advice would you give a young person who's interested in pursuing a career in the logistics profession? A: I'd tell them it's all about following up and following through. Do what you say you're going to do and then let people know you did it. Reliability is probably the number one thing in success because reliability builds trust.
Q: Recognizing that a lot of our readers are customers of your members, is there anything else you'd like to share with them? A: I think the major point I'd like to make to your readers is how inventive and creative today's 3PL is, so that if they haven't looked at that—at letting that 3PL at least examine their supply chain for ways to reduce costs and boost order fulfillment performance—they should, because the entrepreneurs in our business are incredibly creative. That is what is so thrilling about being in this business. The people doing supply chain fulfillment now are just so incredibly, incredibly creative. The way they are using technology, the way they are managing their work force. It is just fun to watch. So if they haven't tried it, I would suggest your readers put a toe in the water and give it a try. I think they will be very impressed with the results.
Most of the apparel sold in North America is manufactured in Asia, meaning the finished goods travel long distances to reach end markets, with all the associated greenhouse gas emissions. On top of that, apparel manufacturing itself requires a significant amount of energy, water, and raw materials like cotton. Overall, the production of apparel is responsible for about 2% of the world’s total greenhouse gas emissions, according to a report titled
Taking Stock of Progress Against the Roadmap to Net Zeroby the Apparel Impact Institute. Founded in 2017, the Apparel Impact Institute is an organization dedicated to identifying, funding, and then scaling solutions aimed at reducing the carbon emissions and other environmental impacts of the apparel and textile industries.
The author of this annual study is researcher and consultant Michael Sadowski. He wrote the first report in 2021 as well as the latest edition, which was released earlier this year. Sadowski, who is also executive director of the environmental nonprofit
The Circulate Initiative, recently joined DC Velocity Group Editorial Director David Maloney on an episode of the “Logistics Matters” podcast to discuss the key findings of the research, what companies are doing to reduce emissions, and the progress they’ve made since the first report was issued.
A: While companies in the apparel industry can set their own sustainability targets, we realized there was a need to give them a blueprint for actually reducing emissions. And so, we produced the first report back in 2021, where we laid out the emissions from the sector, based on the best estimates [we could make using] data from various sources. It gives companies and the sector a blueprint for what we collectively need to do to drive toward the ambitious reduction [target] of staying within a 1.5 degrees Celsius pathway. That was the first report, and then we committed to refresh the analysis on an annual basis. The second report was published last year, and the third report came out in May of this year.
Q: What were some of the key findings of your research?
A: We found that about half of the emissions in the sector come from Tier Two, which is essentially textile production. That includes the knitting, weaving, dyeing, and finishing of fabric, which together account for over half of the total emissions. That was a really important finding, and it allows us to focus our attention on the interventions that can drive those emissions down.
Raw material production accounts for another quarter of emissions. That includes cotton farming, extracting gas and oil from the ground to make synthetics, and things like that. So we now have a really keen understanding of the source of our industry’s emissions.
Q: Your report mentions that the apparel industry is responsible for about 2% of global emissions. Is that an accurate statistic?
A: That’s our best estimate of the total emissions [generated by] the apparel sector. Some other reports on the industry have apparel at up to 8% of global emissions. And there is a commonly misquoted number in the media that it’s 10%. From my perspective, I think the best estimate is somewhere under 2%.
We know that globally, humankind needs to reduce emissions by roughly half by 2030 and reach net zero by 2050 to hit international goals. [Reaching that target will require the involvement of] every facet of the global economy and every aspect of the apparel sector—transportation, material production, manufacturing, cotton farming. Through our work and that of others, I think the apparel sector understands what has to happen. We have highlighted examples of how companies are taking action to reduce emissions in the roadmap reports.
Q: What are some of those actions the industry can take to reduce emissions?
A: I think one of the positive developments since we wrote the first report is that we’re seeing companies really focus on the most impactful areas. We see companies diving deep on thermal energy, for example. With respect to Tier Two, we [focus] a lot of attention on things like ocean freight versus air. There’s a rule of thumb I’ve heard that indicates air freight is about 10 times the cost [of ocean] and also produces 10 times more greenhouse gas emissions.
There is money available to invest in sustainability efforts. It’s really exciting to see the funding that’s coming through for AI [artificial intelligence] and to see that individual companies, such as H&M and Lululemon, are investing in real solutions in their supply chains. I think a lot of concrete actions are being taken.
And yet we know that reducing emissions by half on an absolute basis by 2030 is a monumental undertaking. So I don’t want to be overly optimistic, because I think we have a lot of work to do. But I do think we’ve got some amazing progress happening.
Q: You mentioned several companies that are starting to address their emissions. Is that a result of their being more aware of the emissions they generate? Have you seen progress made since the first report came out in 2021?
A: Yes. When we published the first roadmap back in 2021, our statistics showed that only about 12 companies had met the criteria [for setting] science-based targets. In 2024, the number of apparel, textile, and footwear companies that have set targets or have commitments to set targets is close to 500. It’s an enormous increase. I think they see the urgency more than other sectors do.
We have companies that have been working at sustainability for quite a long time. I think the apparel sector has developed a keen understanding of the impacts of climate change. You can see the impacts of flooding, drought, heat, and other things happening in places like Bangladesh and Pakistan and India. If you’re a brand or a manufacturer and you have operations and supply chains in these places, I think you understand what the future will look like if we don’t significantly reduce emissions.
Q: There are different categories of emission levels, depending on the role within the supply chain. Scope 1 are “direct” emissions under the reporting company’s control. For apparel, this might be the production of raw materials or the manufacturing of the finished product. Scope 2 covers “indirect” emissions from purchased energy, such as electricity used in these processes. Scope 3 emissions are harder to track, as they include emissions from supply chain partners both upstream and downstream.
Now companies are finding there are legislative efforts around the world that could soon require them to track and report on all these emissions, including emissions produced by their partners’ supply chains. Does this mean that companies now need to be more aware of not only what greenhouse gas emissions they produce, but also what their partners produce?
A: That’s right. Just to put this into context, if you’re a brand like an Adidas or a Gap, you still have to consider the Scope 3 emissions. In particular, there are the so-called “purchased goods and services,” which refers to all of the embedded emissions in your products, from farming cotton to knitting yarn to making fabric. Those “purchased goods and services” generally account for well above 80% of the total emissions associated with a product. It’s by far the most significant portion of your emissions.
Leading companies have begun measuring and taking action on Scope 3 emissions because of regulatory developments in Europe and, to some extent now, in California. I do think this is just a further tailwind for the work that the industry is doing.
I also think it will definitely ratchet up the quality requirements of Scope 3 data, which is not yet where we’d all like it to be. Companies are working to improve that data, but I think the regulatory push will make the quality side increasingly important.
Q: Overall, do you think the work being done by the Apparel Impact Institute will help reduce greenhouse gas emissions within the industry?
A: When we started this back in 2020, we were at a place where companies were setting targets and knew their intended destination, but what they needed was a blueprint for how to get there. And so, the roadmap [provided] this blueprint and identified six key things that the sector needed to do—from using more sustainable materials to deploying renewable electricity in the supply chain.
Decarbonizing any sector, whether it’s transportation, chemicals, or automotive, requires investment. The Apparel Impact Institute is bringing collective investment, which is so critical. I’m really optimistic about what they’re doing. They have taken a data-driven, evidence-based approach, so they know where the emissions are and they know what the needed interventions are. And they’ve got the industry behind them in doing that.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”
That result showed that driver wages across the industry continue to increase post-pandemic, despite a challenging freight market for motor carriers. The data comes from ATA’s “Driver Compensation Study,” which asked 120 fleets, more than 150,000 employee drivers, and 14,000 independent contractors about their wage and benefit information.
Drilling into specific categories, linehaul less-than-truckload (LTL) drivers earned a median annual amount of $94,525 in 2023, while local LTL drivers earned a median of $80,680. The median annual compensation for drivers at private carriers has risen 12% since 2021, reaching $95,114 in 2023. And leased-on independent contractors for truckload carriers were paid an annual median amount of $186,016 in 2023.
The results also showed how the demographics of the industry are changing, as carriers offered smaller referral and fewer sign-on bonuses for new drivers in 2023 compared to 2021 but more frequently offered tenure bonuses to their current drivers and with a greater median value.
"While our last study, conducted in 2021, illustrated how drivers benefitted from the strongest freight environment in a generation, this latest report shows professional drivers' earnings are still rising—even in a weaker freight economy," ATA Chief Economist Bob Costello said in a release. "By offering greater tenure bonuses to their current driver force, many fleets appear to be shifting their workforce priorities from recruitment to retention."