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.
Handling cases of beverages is never easy. That's because liquid-filled cases are heavy to lug around and if dropped, can quickly create a sticky mess. In addition to being hard on the back, manual processing and sorting often result in less-than-stellar order accuracy rates, especially for operations that ship multiple cases to a variety of customers.
That's why Horizon Beverage of Norton, Mass., was determined to make some operational changes when it recently moved to a new distribution center. "We had capacity issues in the old building, and our error rates were high," says Michael Epstein, the company's executive vice president and chief operating officer.
After mulling its options, the company decided on a solution that would address all of its pain points: accuracy, product damage, and ergonomic woes. It would partially automate its operations.
REAPING THE BENEFITS OF REPEAL
Horizon began its business life as Brockton Wholesale Beverage at an auspicious time—the day after prohibition ended in 1933. The company has grown steadily ever since, acquiring its current name, Horizon Beverage, in 1998. Fourth-generation descendants of the founder now run the company.
Today's Horizon Beverage is a wholesaler of beer, wine, and spirits throughout Massachusetts and Rhode Island. It also runs a brokerage operation in New Hampshire, Vermont, and Maine, which are all "control states" that regulate alcohol wholesaling.
Wholesale distribution for the company covers a wide range of customers throughout the Bay and Ocean states. "We ship to the smallest VFW, the largest nightclubs, stores, restaurants, and even Fenway Park. If you have a liquor license, we can deliver products to you," says Epstein.
Horizon Beverage moved to its new 600,000-square-foot temperature-controlled facility in Norton, which is 35 miles south of Boston, last year. (The company also has a 100,000-square-foot facility in western Massachusetts.) The new site, from which Horizon ships full pallets, full cases, and mixed cases of beverages, is a far cry from its predecessor. For example, the new building features roller conveyors and a sliding shoe sorter (both from Intelligrated) that now do most of the heavy lifting. Labels and voice picking technology also help boost accuracy.
To design the material handling systems for the new facility, Horizon Beverage turned to Carlstadt, N.J. -based integration firm W&H Systems. "W&H has experience in the wine and spirits [trade], and that is why we chose them," says Epstein.
Epstein praises W&H for its willingness to work with Horizon to smooth out rough spots in the flow, such as tweaking conveyor inclines and turns to assure gentle transport and minimize the potential for bottle breakage. The integrator also arranged to have the conveyors' rollers positioned closer together to reduce vibration and jarring, he says.
LIFTING THEIR SPIRITS
Today, distribution is a smooth-running operation at the Norton site. Forklifts whisk full-pallet orders and keg products to the shipping docks, while the remaining items are gathered from seven pick areas. (About 80 percent of the products shipped daily from the DC are selected in case- or less-than-case quantities.)
Six of the selection areas are located in three, two-level pick modules. Here, full cases are selected using printed shipping labels. Each label lists the location where a case is stored within the pick module. The worker assigned to the module pulls a case from that storage slot and manually affixes the shipping label to the carton. He then lifts the case onto a takeaway conveyor that runs through each level of the module.
The seventh pick area, known as "bottle pick," is designed for assembling mixed cases of products for customers who want less-than-full-case quantities of particular stock-keeping units (SKUs). The majority of these items are liquors and spirits, though a small percentage of wines are also selected within the bottle pick area. Voice technology from Lucas Systems directs picking. Workers receive computer-generated instructions over their headsets, then place the bottles into mixed-SKU cartons.
Epstein jokes that this is actually the second "pick-by-voice" system his company has used. In the old facility, a supervisor would stand at the end of the aisle with a written manifest in his hand. He would speak over a hand radio to workers in the aisles, who would select needed items as he read them off. "It was like using horses instead of cars," Epstein quips in comparing the two "technologies."
The full cases selected in the six modules combine with cases coming from the bottle pick area in a seven-to-one merge. They then enter the sliding shoe sorter. The sorter has small blocks, known as shoes, which can move across the conveying surface. When a carton reaches its divert destination, the software directs the shoes to slide, gently redirecting the case down a divert lane. The sorter at Horizon has nine divert lanes. Eight of these feed down to outbound shipping doors.
The ninth sorter divert sends cases through a pop-up sorter to a palletizing area. Once cases go through the initial sorting, wheels in the conveyor surface rise up to direct them to one of four palletizing stations. When a case reaches the assigned station, a computer relays instructions to workers regarding where to place it on a waiting pallet.
The cartons that divert from the sliding shoe sorter to the eight outbound docks are floor loaded onto the company's fleet of 50 beverage delivery trucks, where they join full pallets brought directly from the storage areas. Horizon also has three tractor-trailer trucks that it uses for longer hauls, some transfers to its western Massachusetts facility, and occasional inbound freight.
BETTER FLOW
All together, the facility ships about 30,000 cases of beverages a day, with 25,000 of them passing through the sorter. The automation has led to higher throughput in the new building compared with Horizon's previous DC. The gentle handling has also reduced breakage levels. Epstein says that work is now performed at a controlled, steady pace compared to the often-hectic environment in the old building.
"It's a much more pleasant work environment now, and we can do more in less time," says Epstein. "We had problems with a lot of errors when we did manual sorting, but the automated sorting takes that away."
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.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."