David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
While RFID may not be the golden ticket to distribution success proponents had envisioned a few years back, it has hardly faded from the scene. Far from it, in fact. Although the RFID tag may not yet be as ubiquitous as the bar code, plenty of companies out there are putting the technology to use in their distribution and logistics operations.
For evidence of that you need look no farther than the Federalsburg, Md., consolidation center run by H&M Bay, a third-party logistics service provider that specializes in climate-controlled less-than-truckload (LTL) freight. At the Federalsburg site, H&M Bay is using an RFID-based system to track frozen and refrigerated goods moving through its fast-paced transload and cross-dock operations.
To understand what makes RFID a particularly good fit for this application, you have to know a little bit about H&M Bay's business. The company operates as a truck broker, with a network of over 10,000 owner-operators nationwide. Although it also offers truckload services, its specialty is managing LTL movements of frozen and refrigerated commodities. As part of that service, it operates six consolidation centers around the country (including the Federalsburg facility), where regional LTL shipments are received and combined into new loads for delivery across the 48 contiguous states.
The Federalsburg site operates on a weekly schedule, with freight consolidation taking place on Saturdays. But goods may begin arriving as early as Thursday. To accommodate these early arrivals, the company in 2008 built a cold storage area at one end of the 66-door facility, where the goods can be held at the appropriate temperature until it's time for outbound loading.
One of the decisions the company faced early on was how to track the goods held in the temporary storage facility. H&M Bay wanted a system that would not only allow it to locate the goods quickly but also enable it to track how much time they spent in storage and when they were shipped out. After weighing a number of options, H&M Bay settled on RFID.
For a fast-paced operation like H&M Bay's, RFID offers a number of advantages over other data-collection methods. For one thing, there's the technology's extended read range. With RFID, there's no need for lift truck drivers to climb down off their vehicles to scan a pallet's label the way they would with, say, bar codes. They simply pick up the load and drive past a reader that automatically captures data from the pallet's tag. For another, there's the technology's speed and flexibility. RFID not only provides high read rates but also allows for multiple tags to be read simultaneously.
Rapid readers
Working with its integrator, Franwell Inc. of Lakeland, Fla., H&M Bay designed a system that's easy to use but still provides all the tracking data it needs. As a truck arrives, workers wheel a portable cart to the dock door. The cart holds a Datamax printer that creates two 4- by 8-inch passive RFID labels containing information about the product—the order number, the shipper, the number of cases on the pallet, the shipping destination, and the truck on which it will eventually be loaded. One RFID label is applied to the top of the pallet, while the other goes on the front. The lift truck then takes the load and drops it at either the cooler entrance or the freezer entrance.
From there, one of three reach trucks retrieves the pallet for putaway in the appropriate storage area. Each of these reach trucks is outfitted with a Motorola RD 5000 RFID reader mounted on its forks. The reader is tethered to a Motorola VC5090 mobile computer on board the vehicle. As the truck picks up the load, its reader automatically captures the data from the pallet's front tag and transmits it to the onboard computer. The computer, in turn, transmits the data to the company's customized inventory system.
As the reach truck enters a cold room, an overhead Motorola XR Series RFID reader retrieves the information from the pallet's top tag. That information is then relayed to the inventory system to let it know that the product is now located in either the cooler or the freezer and is not still sitting in a staging area or on the dock.
The storage area features 1,000 pallet positions within five levels of racking. To expedite the putaway process, H&M Bay's RFID system allows drivers to decide where to deposit their loads (usually at the closest available position) rather than sending them to a pre-assigned location. This saves valuable time because it eliminates the need for drivers to consult a sheet or display screen to find out where they're supposed to put the pallet and then search among the racks for the correct slot.
As the driver places a load onto a rack, the lift truck's reader captures the location data from a tag permanently attached to the rack's inside upright. The onboard computer then displays the location and asks the driver to confirm the information. This assures complete accuracy, although the company says that because of the way the system is set up—with tags permanently mounted on the racks' metal interior and a configuration that allows for adjustments to the scanners' read range—there's little chance that a neighboring tag will be read in error.
Once the driver has confirmed the position, the inventory system is updated again with the pallet's new location. If customers wish, they can log onto H&M Bay's system to confirm that their product is safely in cold storage.
When loading begins on Saturday, the reach truck drivers are handed a list of pallets to pull from the racks. As the drivers exit the cooler or freezer areas with their loads, the interrogator positioned above the door reads the tags, and the system is updated to show they're no longer in cold storage. The pallets are then whisked to the appropriate staging area for loading onto outbound trucks.
Need for speed
As for how the RFID tracking system has been working out, H&M Bay reports that the technology has allowed it to keep precise track of each product's location with no slowdown in the workflow. On top of that, the company estimates that it has saved about 25 percent in labor costs compared with other types of data-collection methods. Drivers do not have to leave their vehicles to scan a bar code or enter location information into a computer terminal, which expedites the loading and unloading process. And because drivers are free to choose storage locations, they don't have to waste time trying to find pre-assigned positions.
"Everything happens so quickly here," says John Walker, H&M Bay's software development manager. "In our operations, it is up to the guys on the fork trucks to manage the process. With the RFID setup, we have a mobile system that allows them to do the transactions quickly."
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."