Late last year, The Container Store pulled the plug on its old RF picking system and switched over to voice. The result? A 10-percent productivity gain.
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.
As its name implies, The Container Store sells, well, containers. And lots of them. Since its founding in 1978, the company has grown into the nation's largest retailer of home organization and storage systems, with its 57th store opening in Westbury, N.Y., this month. It supplies all of those stores from an 835,000-square-foot distribution center in the company's hometown of Coppell, Texas.
Dealing with the retailer's wide array of containers—some of them quite sizeable—has sometimes proved challenging for the facility's order pickers. That was particularly true under the old radio frequency-based order fulfillment system, which often required pickers to juggle scanners and unwieldy items. Last year, those challenges prompted management to switch to voice technology. The voice system is hands-free, which allows pickers to select needed items unencumbered by paper lists or scanning devices.
"We had been picking with RF for the past 15 years. It was not broken, but we were looking to improve on that," explains Christy Parra, the retailer's director of logistics systems. "We have a lot of bulky things, so going hands-free was desired."
Converting over to voice was not a spur-of-the-moment decision. According to Parra, the retailer had looked at voice systems about five years back but decided that what was available at the time did not suit its needs. This time around, it came to a very different conclusion, she says, largely because of recent technology enhancements. Compared with their predecessors, today's systems are more user friendly as well as simpler to configure, Parra says. On top of that, she says, the current systems are easier to customize, an attribute that was important to The Container Store.
The Container Store looked at systems from five different voice vendors before inviting two to come in and set up a small pilot program at its DC. Employee involvement was crucial to the decision, as the company prides itself on its employee-centric culture. (The retailer has become a fixture on Fortune magazine's annual list of the best places to work. During the recession, it managed to avoid laying off a single employee or closing any of its stores.)
"We are an employee-first company, so we needed a system that makes sense for our users," explains Parra. "Our users really drove this decision."
The system ultimately chosen was Jennifer VoicePlus from Lucas Systems. "[The users] felt that Jennifer VoicePlus offered a more natural voice," Parra reports. "Training was also very simple, and they liked the ease of the commands, as well as being able to get information back from the system."
Parra notes that in addition to the normal picking dialogues, workers can query the system about the size of their assignment, how they're doing as far as performance, and what the target goals are for that assignment—interactions that allows workers to continuously monitor their productivity. If they're about to go on break, they can even ask the system to calculate how much time it's expected to take to complete their current assignment.
THE RIGHT PICKS
The Jennifer voice system went live last September. Today, it works in conjunction with the facility's Catalyst warehouse management system to oversee all order fulfillment activity at the Coppell DC, which includes both store replenishment orders and direct-to-customer orders. (Most of the latter are Internet-based orders, but some are orders customers place in stores for shipment directly to their homes.)
The Jennifer software itself is resident on Motorola MC3190 terminals, which offer scanning capabilities in addition to voice. The Container Store currently deploys 80 Motorola units in its voice picking operations. The terminals are used by about 100 workers over two shifts—one shift devoted to direct-to-customer orders and one that handles both store and consumer orders.
Store replenishment primarily involves the selection of cases, which order pickers deposit onto pallets, with each pallet earmarked for a particular store. Walkie rider trucks transport the pallets through the pick areas.
To begin the process, a worker dons a headset and microphone and logs onto the voice system using the Motorola device. Next, he or she scans a pallet's ID "license plate," which allows the system to associate an order with a particular pallet.
The system then directs the worker to the location of the first pick. Upon arrival at the location, the worker reads off a check digit displayed on the storage rack to confirm that he or she is in the right spot. The worker then selects the required number of items and places them on the pallet. Picking instructions are sequenced so that heavier items will be picked first and thus, positioned on the bottom of the pallet.
Lucas has configured the voice dialogue for The Container Store to eliminate the potential for confusion arising from some of its product packaging. For instance, many of the retailer's items are packaged with inner-packs. To ensure clarity, the system is set up to provide instructions like "pick two cartons of six." If it merely said "pick two," the worker might interpret that as meaning he or she should pull two inner cartons out of the master carton, which would result in a mis-pick.
The process continues until all items in the order have been selected or the pallet is full. The voice system then directs the worker to ferry the pallet to a particular shipping dock for staging. On arrival, the worker reads off a check digit posted at the dock position to confirm that the load was dropped off in the right place.
Replenishment orders ship to stores as full truckloads, with the average load containing anywhere from 900 to 2,000 picks, depending on product size.
GOING DIRECT
Direct-to-customer orders are also filled via the voice system at the Coppell DC. But in this case, items are picked to wheeled carts that hold six to eight order container trays, designated A through H.
To begin the process, the worker uses the Motorola device to scan a cart ID number. The voice system responds with an order number and asks the worker to scan one of the container trays to associate it with the order and its position on the cart. Additional orders are assigned to the cart via the same process.
Workers then pick items in small batches from racks according to directions from the voice system. When the picks are completed, the system provides instructions for allocating the items to containers—for instance, place three items into container A, four into container D, two into F, and so on. Workers read off check digits as they deposit items into the containers to confirm the quantities.
Once all items for the cart are selected, the voice system instructs the worker to take the cart to a packing station, where items are transferred to shipping cartons. The average direct-to-customer order contains 1.3 cartons. The facility processes about 1,200 direct-to-customer orders a day—a number that swells to about 3,000 orders a day during peak holiday times.
PERFECT PICKS
Since going to the voice system last year, the facility has posted solid gains. To begin with, it has seen a 10-percent increase in overall picking productivity, with a jump of 15 percent in some applications. Accuracy now sits at over 99.9 percent.
Worker safety has improved as well. For one thing, there's less bending involved, since employees no longer have to set down a scanner in order to make a pick. And since instructions are transmitted through the headsets, workers no longer need to glance down at the devices for assignments, so their eyes are always focused on their work and their surroundings.
Parra notes that during the transition, the company took great pains to ensure workers were comfortable with the new technology. In addition to familiarizing associates with the dialogue and commands needed to interact with the voice system, the retailer spent time making certain workers understood how to change batteries, plug in headsets properly, reboot the system, and so on.
"Although our employees thought voice was very cool, it was still different for them, and we wanted to make sure they were comfortable with it," says Parra. "Voice is really simple to operate, and we stressed that if you have a problem, just take a breath and repeat the command. The voice system can easily walk you through the situation."
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."