Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
The bombardment is over, or at least it has abated. Shell-shocked logistics executives have emerged from their foxholes to face a future that they can only hope is better than the recent past.
The recession has left indelible scars on the supply chain. No one with two digits to their age is likely to recall a decline so swift and severe. Few would doubt that the industry is now in recovery mode, but fear still trumps optimism.
"Many of our customers went through a near-death experience," said Vincent W. Hartnett, president of Penske Logistics.
Given the recession's ferocity, it might appear that the industry would treat the recovery—for as long as it lasts—with sober reflection. But some veterans say history indicates otherwise.
"When you come out of a recession, only 10 percent of the costs you save [during it] are sustainable," said Thomas W. Speh, James Evans Rees distinguished professor of distribution at Miami (Ohio) University's Richard T. Farmer School of Business, at a press conference following the early June release of the 2010 State of Logistics Report. "My concern is we are going to forget some of those lessons."
Detlef Trefzger, a member of the board of management for contract logistics and supply chain management for the German giant Schenker AG, disagrees with Speh over the extent of the industry's collective amnesia. He thinks the change in customer attitudes has staying power.
"People are more focused and more committed to solutions," Trefzger said in an interview later in June. "Before the recession, we discussed strategies with our customers that were nice to talk about but never implemented. That has changed."
Trefzger doesn't think the crisis has passed. However, he sees growth continuing across all of Schenker's regions and is optimistic about next year.
One sign of customer skittishness can be found in the absence of even an intermediate-term outlook. John P. Lanigan, executive vice president and chief marketing officer of BNSF Railway, said at the State of Logistics Report press conference that a customer told him the "last four to six weeks have been great. But I'm scared to death about the next four to six weeks."
Trefzger said it has become virtually impossible to forecast volume patterns beyond three-month cycles, especially in industries like auto manufacturing that have volatile sales activity. "We have tried to reduce our lead times for future investments and have tried to not end up in long-term commitments," he said.
Jim McAdam, president of APL Logistics, the logistics arm of shipping giant APL, has a different view, He said that importers, many of them in the retail trade, have seen their order books "strong and strengthening" throughout the year and heading into the end of the peak holiday season inventory replenishment period. McAdam said he sees nothing on the horizon to support concerns about a marked economic slowdown. (Trade in and out of North America accounts for 60 percent of APL Logistics' revenue.)
McAdam said an enduring lesson from the downturn is for customers to develop tight strategic bonds with service providers instead of jumping back and forth looking for the best rate. "I think many customers wished they had worked a little bit closer with their supply chain partners instead of chasing different providers over a few dollars," he said.
Another trend, according to McAdam, is that businesses that took their logistics functions in-house for any number of reasons are re-examining, and in many cases restoring, their relationships with third-party service providers.
Put away the gloves
If the recession was a boxing match, it was an awfully bloody affair. As demand fell faster than carriers could withdraw capacity, shippers held the iron fist and were not afraid to wield it. On the inbound side, shippers pressured their suppliers for the lowest prices for their products.
As the recovery takes hold, the chickens are coming home to roost. Demand is up, capacity is tight, and many suppliers—especially second- or third-tier vendors hit by the double-whammy of weak demand and scarce credit—have gone out of business. Bereft of traditional supply sources, companies are now preaching collaboration and are talking about a "new normal" in supply chain matters.
"Consolidation of suppliers is something we should all expect in the future," said Hartnett of Penske.
The more candid shipper executives say they will need to lie in the bed they've made for themselves. "Shippers took advantage of the situation a year ago and jeopardized long-term relationships" with their providers, Don Ralph, senior vice president, supply chain and logistics for Staples Inc., said at the June press conference. "These levels of rates are not sustainable."
Kate Vitasek, founder and president of consultancy Supply Chain Visions, said the climate is ripe for a concerted push to "vested outsourcing," where, distilled to its base elements, companies nurture relationships with suppliers so they are first or near-first in line for product without having to pay a premium for it.
"The power has shifted to the suppliers," she said. "People came out of the gate with massive cost-cutting. But you can't beat up suppliers for very long. You will, at some point, face retaliation."
Supply chains are poised for accelerated adoption of mobile robots and drones as those technologies mature and companies focus on implementing artificial intelligence (AI) and automation across their logistics operations.
That’s according to data from Gartner’s Hype Cycle for Mobile Robots and Drones, released this week. The report shows that several mobile robotics technologies will mature over the next two to five years, and also identifies breakthrough and rising technologies set to have an impact further out.
Gartner’s Hype Cycle is a graphical depiction of a common pattern that arises with each new technology or innovation through five phases of maturity and adoption. Chief supply chain officers can use the research to find robotic solutions that meet their needs, according to Gartner.
Gartner, Inc.
The mobile robotic technologies set to mature over the next two to five years are: collaborative in-aisle picking robots, light-cargo delivery robots, autonomous mobile robots (AMRs) for transport, mobile robotic goods-to-person systems, and robotic cube storage systems.
“As organizations look to further improve logistic operations, support automation and augment humans in various jobs, supply chain leaders have turned to mobile robots to support their strategy,” Dwight Klappich, VP analyst and Gartner fellow with the Gartner Supply Chain practice, said in a statement announcing the findings. “Mobile robots are continuing to evolve, becoming more powerful and practical, thus paving the way for continued technology innovation.”
Technologies that are on the rise include autonomous data collection and inspection technologies, which are expected to deliver benefits over the next five to 10 years. These include solutions like indoor-flying drones, which utilize AI-enabled vision or RFID to help with time-consuming inventory management, inspection, and surveillance tasks. The technology can also alleviate safety concerns that arise in warehouses, such as workers counting inventory in hard-to-reach places.
“Automating labor-intensive tasks can provide notable benefits,” Klappich said. “With AI capabilities increasingly embedded in mobile robots and drones, the potential to function unaided and adapt to environments will make it possible to support a growing number of use cases.”
Humanoid robots—which resemble the human body in shape—are among the technologies in the breakthrough stage, meaning that they are expected to have a transformational effect on supply chains, but their mainstream adoption could take 10 years or more.
“For supply chains with high-volume and predictable processes, humanoid robots have the potential to enhance or supplement the supply chain workforce,” Klappich also said. “However, while the pace of innovation is encouraging, the industry is years away from general-purpose humanoid robots being used in more complex retail and industrial environments.”
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.
The Boston-based enterprise software vendor Board has acquired the California company Prevedere, a provider of predictive planning technology, saying the move will integrate internal performance metrics with external economic intelligence.
According to Board, the combined technologies will integrate millions of external data points—ranging from macroeconomic indicators to AI-driven predictive models—to help companies build predictive models for critical planning needs, cutting costs by reducing inventory excess and optimizing logistics in response to global trade dynamics.
That is particularly valuable in today’s rapidly changing markets, where companies face evolving customer preferences and economic shifts, the company said. “Our customers spend significant time analyzing internal data but often lack visibility into how external factors might impact their planning,” Jeff Casale, CEO of Board, said in a release. “By integrating Prevedere, we eliminate those blind spots, equipping executives with a complete view of their operating environment. This empowers them to respond dynamically to market changes and make informed decisions that drive competitive advantage.”
Material handling automation provider Vecna Robotics today named Karl Iagnemma as its new CEO and announced $14.5 million in additional funding from existing investors, the Waltham, Massachusetts firm said.
The fresh funding is earmarked to accelerate technology and product enhancements to address the automation needs of operators in automotive, general manufacturing, and high-volume warehousing.
Iagnemma comes to the company after roles as an MIT researcher and inventor, and with leadership titles including co-founder and CEO of autonomous vehicle technology company nuTonomy. The tier 1 supplier Aptiv acquired Aptiv in 2017 for $450 million, and named Iagnemma as founding CEO of Motional, its $4 billion robotaxi joint venture with automaker Hyundai Motor Group.
“Automation in logistics today is similar to the current state of robotaxis, in that there is a massive market opportunity but little market penetration,” Iagnemma said in a release. “I join Vecna Robotics at an inflection point in the material handling market, where operators are poised to adopt automation at scale. Vecna is uniquely positioned to shape the market with state-of-the-art technology and products that are easy to purchase, deploy, and operate reliably across many different workflows.”