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.
For a dot-com retailer, the distribution center is much more than a warehouse. It is a storefront, fulfillment depot, and customer service center all rolled into one. Unlike brick-and-mortar retailers, online merchants can't offer customers the opportunity to see and feel the product they're ordering. What they can do is offer a much wider selection than can be found in stores and provide superior customer service. iHerb.com aims to excel on both counts.
iHerb.com is a pure-play dot-com retailer that offers some 30,000 wellness-oriented health and natural organic products. This includes vitamins, sports nutritional products, supplements, health care items, earth-friendly cleaning products, and housewares.
"Anybody young, old, in shape, out of shape, anybody looking to better their performance, anybody looking to better their health ... that's the kind of customer we are looking for," says Craig Smith, director of operations at iHerb's new distribution center in Moreno Valley, Calif.
iHerb's pledge to customers is that any order received by 1 p.m. PST will ship the same day. That's a tall order that requires a combination of sophisticated voice and put-to-light technology to facilitate swift order turnaround. Adding to the challenge, the operation has to be able to accommodate the small (one- to 10-item) quantities that make up a typical Internet order.
"Our biggest challenge is that while we receive product by the case, we have to turn around and package it and put it into small boxes so that it can survive the transit to the customer's house. So from that perspective, it's a lot more challenging than traditional distribution," notes Smith.
The automated route
iHerb was launched 14 years ago as an Internet-only health product retailer. The Moreno Valley DC, which opened in October 2010, is the third building it has used but the first to be automated—the previous two were manual operations. The new 320,000-square-foot climate-controlled building gives iHerb room to spread out. The company originally occupied half the building, but within three months, it had moved into the remaining portion as it expanded its SKU depth to accommodate its growing business.
The automated system, designed and integrated by Dematic, has made possible this broad reach and speedy order fulfillment. On top of that, it is engineered to provide the flexibility to handle a wide range of product sizes and to accommodate growth and expansion down the road.
The system also helps iHerb track its products within the building. Because many of the retailer's nutritional items are ingested, it must maintain strict control over them, knowing where each item is at any time.
As products enter the building, 100 percent pass through quality control and inspection. Lots and expiration dates are recorded, as many of these will have to be supplied with the customs information for international shipments. Products are then staged for putaway, with a voice system directing their placement within the pallet storage racks. The voice system was designed by Dematic, using Vocollect hardware and software of Dematic's own design.
Approximately 99 percent of the order picking is done in batches within a three-level module and a small shelving area that together provide over 45,000 pick locations. The batching is directed using voice.
The remaining 1 percent of picks are mostly non-conveyable items selected directly from storage. Products for batch picking are first brought from the reserve racks to replenish case and pallet flow racks that contain faster-moving items within the modules, as well for the floor-level shelving that holds slower movers.
Dematic's Pick Director software works in tandem with iHerb's homegrown warehouse management system to organize orders into the batches. The software then directs workers wearing headsets to select the quantity needed for a batch. For instance, if 30 customers each order a bottle of calcium tablets, then 30 bottles will be pulled at the same time and placed into a batch tote. The items will be allocated to individual orders later in the process.
Pick, pack, repeat
Once the batch totes have been filled within the pick module, workers place them onto takeaway conveyors. Elsewhere in the facility, associates gather slow-moving items from the shelves and deposit them into totes sitting on wheeled carts. Voice directs this operation as well. When the tote is full, the worker is instructed to wheel the cart to an induction location on the conveyor line and deposit the tote onto a conveyor. There, the totes are merged with totes coming from the pick module and conveyed to put stations, where steerable wheels pop up to divert the batch totes to their assigned stations based on order profile.
At the put stations, items from the totes are divided up for individual orders. The put stations themselves are arranged as shelving walls on either side that run perpendicular to the conveyor. On the backsides of the shelving walls are pack stations. The arrays of shelving, called "put walls," hold various-sized bins that are used to gather individual orders, with each bin representing an order. The entire wall is wired with put-to-light technology.
As batch totes arrive from picking, workers unload them and allocate the items to bins in the put wall. To begin the process, the worker at the put station removes an item from the tote and scans it. This causes lights and quantity indicators to flash below an order bin that requires that product. The worker simply deposits the items into the bin and pushes a button to confirm that it's the correct tote. He or she then scans another item and repeats the process. The scanning and putting of items into totes, as directed by the lights, continues until all of the items in the batch tote have been assigned. Then, another tote arrives, carrying more products that will be divided among the customer bins. All told, the put system is designed to accommodate 500 puts per hour, per operator.
Once an order is ready for packing, a light flashes at the pack station on the opposite side of the put wall. Employees spend considerable time wrapping individual items, Smith says. "We carry glass, we carry liquid, we carry food goods, and we carry durable goods. All that has to be packed so that it's going to survive that trip to your house." Particular attention is given to international shipments to ensure they arrive intact at the 180 country destinations iHerb serves.
As a purveyor of natural and organic products, iHerb is committed to using environmentally friendly packaging. The company recently moved to a biodegradable, compostable clamshell-design packaging for its breakable bottles. It also uses recycled materials wherever possible.
Once products are packed, they're placed onto takeaway conveyors that pass through stations where void fill is added and the cartons are sealed. The products are also weighed using an inline scale before heading to a sliding shoe sorter that diverts the cartons to 10 shipping lanes based on carrier and destination.
As for how the new process is working out, Smith has nothing but praise for the system. The automated system's speed has allowed iHerb to meet its same-day shipment pledge while achieving an accuracy rate that has cut returns by 60 percent, he reports. "The pick to voice allows us to achieve essentially 100 percent accuracy in what we pick—whatever goes in that box is exactly what that customer ordered."
Editor's note: To watch a video of the iHerb.com facility in action, go to www.moveitshow.com.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
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.”