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.
As a contract provider of warehousing, logistics, and supply chain solutions, Geodis often has to provide customized services for clients.
That was the case recently when one of its customers asked Geodis to up its inventory monitoring game—specifically, to begin conducting quarterly cycle counts of the goods it stored at a Geodis site. Trouble was, performing more frequent counts would be something of a burden for the facility, which still conducted inventory counts manually—a process that was tedious and, depending on what else the team needed to accomplish, sometimes required overtime.
So Levallois, France-based Geodis launched a search for a technology solution that would both meet the customer’s demand and make its inventory monitoring more efficient overall, hoping to save time, labor, and money in the process.
SCAN AND DELIVER
Geodis found a solution with Gather AI, a Pittsburgh-based firm that automates inventory monitoring by deploying small drones to fly through a warehouse autonomously scanning pallets and cases. The system’s machine learning (ML) algorithm analyzes the resulting inventory pictures to identify barcodes, lot codes, text, and expiration dates; count boxes; and estimate occupancy, gathering information that warehouse operators need and comparing it with what’s in the warehouse management system (WMS).
Among other benefits, this means employees no longer have to spend long hours doing manual inventory counts with order-picker forklifts. On top of that, the warehouse manager is able to view inventory data in real time from a web dashboard and identify and address inventory exceptions.
But perhaps the biggest benefit of all is the speed at which it all happens. Gather AI’s drones perform those scans up to 15 times faster than traditional methods, the company says. To that point, it notes that before the drones were deployed at the Geodis site, four manual counters could complete approximately 800 counts in a day. By contrast, the drones are able to scan 1,200 locations per day.
FLEXIBLE FLYERS
Although Geodis had a number of options when it came to tech vendors, there were a couple of factors that tipped the odds in Gather AI’s favor, the partners said. One was its close cultural fit with Geodis. “Probably most important during that vetting process was understanding the cultural fit between Geodis and that vendor. We truly wanted to form a relationship with the company we selected,” Geodis Senior Director of Innovation Andy Johnston said in a release.
Speaking to this cultural fit, Johnston added, “Gather AI understood our business, our challenges, and the course of business throughout our day. They trained our personnel to get them comfortable with the technology and provided them with a tool that would truly make their job easier. This is pretty advanced technology, but the Gather AI user interface allowed our staff to see inventory variances intuitively, and they picked it up quickly. This shows me that Gather AI understood what we needed.”
Another factor in Gather AI’s favor was the prospect of a quick and easy deployment: Because the drones can conduct their missions without GPS or Wi-Fi, the supplier would be able to get its solution up and running quickly. In the words of Geodis Industrial Engineer Trent McDermott, “The Gather AI implementation process was efficient. There were no IT infrastructure or layout changes needed, and Gather AI was flexible with the installation to not disrupt peak hours for the operations team.”
QUICK RESULTS
Once the drones were in the air, Geodis saw immediate improvements in cycle counting speed, according to Gather AI. But that wasn’t the only benefit: Geodis was also able to more easily find misplaced pallets.
“Previously, we would research the inventory’s systemic license plate number (LPN),” McDermott explained. “We could narrow it down to a portion or a section of the warehouse where we thought that LPN was, but there was still a lot of ambiguity. So we would send an operator out on a mission to go hunt and find that LPN,” a process that could take a day or two to complete. But the days of scouring the facility for lost pallets are over. With Gather AI, the team can simply search in the dashboard to find the last location where the pallet was scanned.
And about that customer who wanted more frequent inventory counts? Geodis reports that it completed its first quarterly count for the client in half the time it had previously taken, with no overtime needed. “It’s a huge win for us to trim that time down,” McDermott said. “Just two weeks into the new quarter, we were able to have 40% of the warehouse completed.”
The less-than-truckload (LTL) industry moved closer to a revamped freight classification system this week, as the National Motor Freight Traffic Association (NMFTA) continued to spread the word about upcoming changes to the way it helps shippers and carriers determine delivery rates. The NMFTA will publish proposed changes to its National Motor Freight Classification (NMFC) system Thursday, a transition announced last year, and that the organization has termed its “classification reimagination” process.
Businesses throughout the LTL industry will be affected by the changes, as the NMFC is a tool for setting prices that is used daily by transportation providers, trucking fleets, third party logistics service providers (3PLs), and freight brokers.
Representatives from NMFTA were on hand to discuss the changes at the LTL-focused supply chain conference Jump Start 25 in Atlanta this week. The project’s goal is to make what is currently a complex freight classification system easier to understand and “to make the logistics process as frictionless as possible,” NMFTA’s Director of Operations Keith Peterson told attendees during a presentation about the project.
The changes seek to simplify classification by grouping similar items together and assigning most classes based solely on density. Exceptions will be handled separately, adding other characteristics when density alone is not enough to determine an accurate class.
When the updates take effect later this year, shippers may see shifts in the LTL prices they pay to move freight—because the way their freight is classified, and subsequently billed, could change as a result.
NMFTA will publish the proposed changes this Thursday, January 30, in a document called Docket 2025-1. The docket will include more than 90 proposed changes and is open to industry feedback through February 25. NMFTA will follow with a public meeting to review and discuss feedback on March 3. The changes will take effect July 19.
NMFTA has a dedicated website detailing the changes, where industry stakeholders can register to receive bi-weekly updates: https://info.nmfta.org/2025-nmfc-changes.
Trade and transportation groups are congratulating Sean Duffy today for winning confirmation in a U.S. Senate vote to become the country’s next Secretary of Transportation.
Once he’s sworn in, Duffy will become the nation’s 20th person to hold that post, succeeding the recently departed Pete Buttigieg.
Transportation groups quickly called on Duffy to work on continuing the burst of long-overdue infrastructure spending that was a hallmark of the Biden Administration’s passing of the bipartisan infrastructure law, known formally as the Infrastructure Investment and Jobs Act (IIJA).
But according to industry associations such as the Coalition for America’s Gateways and Trade Corridors (CAGTC), federal spending is critical for funding large freight projects that sustain U.S. supply chains. “[Duffy] will direct the Department at an important time, implementing the remaining two years of the Infrastructure Investment and Jobs Act, and charting a course for the next surface transportation reauthorization,” CAGTC Executive Director Elaine Nessle said in a release. “During his confirmation hearing, Secretary Duffy shared the new Administration’s goal to invest in large, durable projects that connect the nation and commerce. CAGTC shares this goal and is eager to work with Secretary Duffy to ensure that nationally and regionally significant freight projects are advanced swiftly and funded robustly.”
A similar message came from the International Foodservice Distributors Association (IFDA). “A safe, efficient, and reliable transportation network is essential to our industry, enabling 33 million cases of food and related products to reach professional kitchens every day. We look forward to working with Secretary Duffy to strengthen America’s transportation infrastructure and workforce to support the safe and seamless movement of ingredients that make meals away from home possible,” IFDA President and CEO Mark S. Allen said in a release.
And the truck drivers’ group the Owner-Operator Independent Drivers Association (OOIDA) likewise called for continued investment in projects like creating new parking spaces for Class 8 trucks. “OOIDA and the 150,000 small business truckers we represent congratulate Secretary Sean Duffy on his confirmation to lead the U.S. Department of Transportation,” OOIDA President Todd Spencer said in a release. “We look forward to continue working with him in advancing the priorities of small business truckers across America, including expanding truck parking, fighting freight fraud, and rolling back burdensome, unnecessary regulations.”
With the new Trump Administration continuing to threaten steep tariffs on Mexico, Canada, and China as early as February 1, supply chain organizations preparing for that economic shock must be prepared to make strategic responses that go beyond either absorbing new costs or passing them on to customers, according to Gartner Inc.
But even as they face what would be the most significant tariff changes proposed in the past 50 years, some enterprises could use the potential market volatility to drive a competitive advantage against their rivals, the analyst group said.
Gartner experts said the risks of acting too early to proposed tariffs—and anticipated countermeasures by trading partners—are as acute as acting too late. Chief supply chain officers (CSCOs) should be projecting ahead to potential countermeasures, escalations and de-escalations as part of their current scenario planning activities.
“CSCOs who anticipate that current tariff volatility will persist for years, rather than months, should also recognize that their business operations will not emerge successful by remaining static or purely on the defensive,” Brian Whitlock, Senior Research Director in Gartner’s supply chain practice, said in a release.
“The long-term winners will reinvent or reinvigorate their business strategies, developing new capabilities that drive competitive advantage. In almost all cases, this will require material business investment and should be a focal point of current scenario planning,” Whitlock said.
Gartner listed five possible pathways for CSCOs and other leaders to consider when faced with new tariff policy changes:
Retire certain products: Tariff volatility will stress some specific products, or even organizations, to a breaking point, so some enterprises may have to accept that worsening geopolitical conditions should force the retirement of that product.
Renovate products to adjust: New tariffs could prompt renovations (adjustments) to products that were overdue, as businesses will need to take a hard look at the viability of raising or absorbing costs in a still price-sensitive environment.
Rebalance: Additional volatility should be factored into future demand planning, as early winners and losers from initial tariff policies must both be prepared for potential countermeasures, policy escalations and de-escalations, and competitor responses.
Reinvent: As tariff volatility persists, some companies should consider investing in new projects in markets that are not impacted or that align with new geopolitical incentives. Others may pivot and repurpose existing facilities to serve local markets.
Reinvigorate: Early winners of announced tariffs should seek opportunities to extend competitive advantages. For example, they could look to expand existing US-based or domestic manufacturing capacity or reposition themselves within the market by lowering their prices to take market share and drive business growth.
By the numbers, global logistics real estate rents declined by 5% last year as market conditions “normalized” after historic growth during the pandemic. After more than a decade overall of consistent growth, the change was driven by rising real estate vacancy rates up in most markets, Prologis said. The three causes for that condition included an influx of new building supply, coupled with positive but subdued demand, and uncertainty about conditions in the economic, financial market, and supply chain sectors.
Together, those factors triggered negative annual rent growth in the U.S. and Europe for the first time since the global financial crisis of 2007-2009, the “Prologis Rent Index Report” said. Still, that dip was smaller than pandemic-driven outperformance, so year-end 2024 market rents were 59% higher in the U.S. and 33% higher in Europe than year-end 2019.
Looking into coming months, Prologis expects moderate recovery in market rents in 2025 and stronger gains in 2026. That eventual recovery in market rents will require constrained supply, high replacement cost rents, and demand for Class A properties, Prologis said. In addition, a stronger demand resurgence—whether prompted by the need to navigate supply chain disruptions or meet the needs of end consumers—should put upward pressure on a broad range of locations and building types.