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.
It's a common enough dilemma these days. Say you're a retailer looking to add an online sales channel to your operations. You have several options. You can build a new facility to handle your e-commerce distribution, you can build onto an existing facility, or you can outsource the task to a third party.
But there's another option—one that's often overlooked: You can look up. No, we're not talking about seeking heavenly guidance, though that's not a bad idea before starting any major project. We're talking about making use of the facility's vertical space.
Building up—as opposed to out—allows a company to gain more operating space without altering a building's footprint, which is especially important to facilities that are landlocked. It's also significantly cheaper than building out or constructing a stand-alone facility.
"It allows you to get the best utilization of square footage and density. You don't want to build more of a building footprint than you need," says Rick Herlacher, manager of the solutions development team at Dematic, a systems manufacturer and integrator.
As for how to make use of a facility's vertical space, there are a couple of options. One is to build a mezzanine; the other is to install a work platform.
Of the two, adding a mezzanine tends to be more complicated process. A mezzanine, which typically runs from wall to wall, is essentially another story that's built between two others in a building. Because they're generally considered permanent fixtures, mezzanines must meet codes for sprinklers, egress, lighting, accessibility by the disabled, and so on.
Installing a work platform is a much simpler matter. Work platforms are typically freestanding steel structures that are not mounted to the walls or hung from the ceiling. Instead, they derive their support from the building's floor and their own columns.
From a construction perspective, work platforms offer a number of advantages over mezzanines. To begin with, they're generally considered equipment, rather than permanent fixtures, which means they're likely exempt from the codes that apply to mezzanines. On top of that, their status as equipment means they can be depreciated faster than a building structure.
They're also easy to reconfigure as needs change, so they offer a high degree of flexibility. Plus, they're readily customizable. "Most work platforms are customer specific and are engineered around a particular space or particular need," says Arlin Keck, an engineer at storage equipment maker Steel King who serves as chair of the engineering committee for the Storage Manufacturers Association within MHI.
WHY GO UP?
Building up—as opposed to out—offers a number of advantages to companies expanding into new channels like e-commerce, say those in the know. For one thing, installing a mezzanine or platform will enable them to move into the new channel faster, since they don't have to deal with the delays associated with site searches and construction.
"If a company wants to enter the e-commerce world, then the sooner they are up and running, the better. It takes a long time to build something new," says Klaus-Dieter Wurm, vice president and managing director for SSI Schaefer, a systems manufacturer and integrator.
"The key advantage is timing," adds Todd Brendel, the head of engineering and structural solutions for Wynright, a material handling equipment supplier and integrator. With work platforms, he says, "the design process is straightforward and very clean. While the time in new construction is quite long, [a work platform] can just bolt together like a kit." Brendel adds that a typical work platform can be installed within about six weeks.
There are inventory-related benefits as well. For one thing, locating fulfillment operations for different channels at a single facility allows those channels to share inventory. This can lead to faster inventory turns and reduces the amount of money a company must tie up in stock. "It allows companies to leverage that inventory rather than duplicate it," says Chris Arnold, vice president of operations and solutions development for Intelligrated, a company that manufactures and integrates systems.
The shared inventory can also allow for better use of existing material handling resources. For instance, the same sorter that handles store orders may be utilized for e-commerce orders, depending on order profiles.
Other advantages include control and flexibility. Housing fulfillment operations for multiple channels in the same building enables companies to react more swiftly to problems. Labor can be diverted easily from one channel's processing area to another as needed. And speaking of labor, there's no need to train an additional workforce as there might be when separate facilities are used. You can simply utilize the same staff.
ROOM AT THE TOP
One of the questions often asked when it comes to work platforms is what applications they're best suited for. According to the experts, the field is pretty much wide open. Work platforms can accommodate picking operations, sorting systems, fast-response processing, slow-moving inventory, value-added services, and more. Depending on the application, work platforms can be staffed by employees or simply used to house equipment. They can also hold conveyors that feed larger systems, such as automated storage and retrieval systems, although some work platforms are built simply to keep conveyors off the facility floor so that lift trucks can cross underneath.
"Conveyors are a natural fit, but slower movers can also go there. It's a matter of how it fits into the entire operation of a facility," says Tripp Eskridge, senior vice president of project and development services for industrial real estate developer Jones Lang LaSalle.
Companies looking to get the most out of their DC space may want to consider using their work platforms for highly automated functions. Dense storage units, such as vertical lift modules, shuttle systems, and carousels, allow large quantities of goods to be held in a minimal amount of space. Platforms are also good for housing workstations, such as picking or packing areas for order fulfillment. Goods-to-person stations can also find a home on work platforms.
Work platforms can also be a good solution for seasonal operations, either to handle certain products seasonally or to accommodate overflow volumes during peak periods. (And if you're looking to add a work platform, off-season is a good time for the installation, since there is less stress on the facility.)
When considering whether to add a work platform to an existing building, it's important to make sure the concrete floor can support the weight of the platform and its load. This is especially true if the platform is intended to hold heavy, dense storage or automated equipment. Floors can usually be reinforced if found to be lacking.
Also, consider what role the platform will play now and in the future. If future uses cannot be easily determined, then it's better to design a work platform that can support more weight than you need now than to have to retrofit and reconfigure later. Because of the way they're constructed, work platforms can also be relocated within the facility or to another building if needed down the road.
"That makes them good for current needs as well as for the future," notes Schaefer's Wurm.
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.
Global trade will see a moderate rebound in 2025, likely growing by 3.6% in volume terms, helped by companies restocking and households renewing purchases of durable goods while reducing spending on services, according to a forecast from trade credit insurer Allianz Trade.
The end of the year for 2024 will also likely be supported by companies rushing to ship goods in anticipation of the higher tariffs likely to be imposed by the coming Trump administration, and other potential disruptions in the coming quarters, the report said.
However, that tailwind for global trade will likely shift to a headwind once the effects of a renewed but contained trade war are felt from the second half of 2025 and in full in 2026. As a result, Allianz Trade has throttled back its predictions, saying that global trade in volume will grow by 2.8% in 2025 (reduced by 0.2 percentage points vs. its previous forecast) and 2.3% in 2026 (reduced by 0.5 percentage points).
The same logic applies to Allianz Trade’s forecast for export prices in U.S. dollars, which the firm has now revised downward to predict growth reaching 2.3% in 2025 (reduced by 1.7 percentage points) and 4.1% in 2026 (reduced by 0.8 percentage points).
In the meantime, the rush to frontload imports into the U.S. is giving freight carriers an early Christmas present. According to Allianz Trade, data released last week showed Chinese exports rising by a robust 6.7% y/y in November. And imports of some consumer goods that have been threatened with a likely 25% tariff under the new Trump administration have outperformed even more, growing by nearly 20% y/y on average between July and September.