Eight predictions for 2014

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Transcript

David Maloney, Editorial Director, DC Velocity 00:01

Delivering Halloween. Forecasting technology trends. And is pallet handling the next robotic frontier?

Pull up a chair and join us, as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast.

Hi, I'm Dave Maloney. I'm the group editorial director at DC Velocity. Welcome.

Logistics Matters is sponsored by Zebra Robotics Automation. Are you tired of overpriced, underutilized autonomous mobile robot fulfillment solutions that drain your profits? It's time to switch to Zebra Robotics Automation. Their cutting-edge Zebra Symmetry fulfillment solution is engineered to reduce your cost per unit and give you that unbeatable competitive edge. Don't settle for less. Maximize your profits with Zebra. Discover the future of fulfillment at zebra.com/fulfillment.

As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be alone to provide their insights into the top stories of this week.

But to begin today, Halloween is just a few days away. The holiday has grown over the years to be the second or third most popular holiday, depending on which survey you trust. So, it's basically right up there with Christmas and Thanksgiving. Making sure that deliveries of all the decorations and treats get to their destinations on time is a big task, and to find out what's involved in all of that, here's Victoria with today's guest.

Victoria.

Victoria Kickham, Senior Editor, DC Velocity 01:35

Thanks, Dave. Our guest today is Dennis Moon, chiefoperating officer for crowdsourced delivery platform Roadie. Welcome Dennis.

Dennis Moon, Chief Operating Officer, Roadie 01:43

Thank you.

Victoria Kickham, Senior Editor, DC Velocity 01:45

Yeah, thanks for joining us today. I think most of our listeners are familiar with Roadie, but can you just give us a quick overview of the company and its role in the supply chain?

Dennis Moon, Chief Operating Officer, Roadie 01:54

Absolutely. We've been around since 2014. Roadie is a logistics-management and crowdsource delivery platform. We're also a UPS company, and our role in the supply chain is to offer businesses fast, flexible, and asset-light logistics solutions in the last mile.

Victoria Kickham, Senior Editor, DC Velocity 02:10

Terrific. So, as Dave said, supply chains are gearing up for this Halloween season. Retailers are busy getting orders out to people. How does demand for all those costumes, decorations, and candy affect supply chains?

Dennis Moon, Chief Operating Officer, Roadie 02:24

It really kicks off the peak season for us, and as we've been doing this for a while, it gets a little bit different every year, but what we're seeing is a lot of retailers are kicking off their peak season at the same time as Halloween. So, as we can see, and you probably have noticed, more and more sales events and promotions are kicking off earlier and earlier into the season, so I think it's really good, because we're able to take the momentum that we start for Halloween, continue it on to delivering for people right into peak, and it also really helps with that last-minute Halloween rush that a lot of people have. I would just say the other thing is that, you know, consumers, and us as consumers, we're just really getting used to following the promotions more than we are following the event, so we've been seeing that over the last couple of years.

Victoria Kickham, Senior Editor, DC Velocity 03:08

Great. Thank you. Along with all of that, so Roadie has a partnership with Spirit Halloween, which is a retailer that's certainly at the forefront of dealing with these particular peak-season challenges that are happening right now. Can you describe the partnership and how it works?

Dennis Moon, Chief Operating Officer, Roadie 03:23

Yeah, I'm really excited about this one. Spirit Halloween is North America's leading Halloween retailer, and we provide same-day delivery from spirit Halloween's online stores across the United States. So same-day's available in more than 800 Spirit Halloween retail locations, allowing their customers to receive their items quickly and conveniently, just like they would with any other delivery. But Halloween fans have access to hundreds, if not thousands of SKUs in that same-day marketplace, and we're just really excited, as I said earlier, to be able to start propelling ourselves as we enter into a really big peak season.

Victoria Kickham, Senior Editor, DC Velocity 03:59

And I think you said — how many stores are you doing this in?

Dennis Moon, Chief Operating Officer, Roadie 04:02

Eight hundred Spirit Halloween retail locations, and this is the first time they've offered it. So, it's new to them and it's new to us, so we're just really excited about the opportunity.

Victoria Kickham, Senior Editor, DC Velocity 04:09

Yeah, I'm very familiar with the store, and that sounds new to me, so... .Is Roadie working with otherretailers on similar solutions designed to help manage this Halloween demand?

Dennis Moon, Chief Operating Officer, Roadie 04:19

Yeah, you know, one of our most notable specialty retailers, and one of the bigger customers during Halloween, is the Home Depots of this world. And as everybody knows, they've got a really, really good selection of Halloween decorations that I see in my neighborhood every day, and being able to deliver some of those really big yard decorations has been super cool for us, and we've been doing a lot of it this Halloween season.

Victoria Kickham, Senior Editor, DC Velocity 04:46

So, what trends are you seeing in same-day delivery service in general? How are technology advances, for example, things like AI, affecting the industry?

Dennis Moon, Chief Operating Officer, Roadie 04:56

Yeah, you know, [I've] been doing this for a while, and just, every year, more and more retailers create or have same-day as just standard expectation for online shopping. It's pretty surprising. Going back 10 years, no one did, not many people did, and they just really didn't have it on its radar. So, the adoption rate is accelerating. Everyone feels that they must have same-day delivery to compete, and retailers have really found that just the same-day model gives them that competitive edge. It increases revenue, and it's good for them, it's good for their customers. We did a survey recently where we conducted, it found 80% of companies reported an increased revenue with same-day delivery, so it really is starting to prove itself. To answer your question about AI's impact. It's helping optimize delivery routes for us. It balances delivery capacity. We're using it all over the place, from customer support all the way to helping drivers make decisions on what's the most economical route for them, what's the best route, what's the best offer that they should make — so, just giving them all the information. And making sure that we're as transparent as possible, utilizing all the AI technology that we can behind the scenes so that drivers can make a good decision. It enables our retailers to anticipate demand. So, as we think about, we've got a bit of demand going into the Halloween season, but it's going to get really, really hectic with a compressed peak as people who follow UPS know, it came out yesterday, you know, Carol Tomé talked about it: 17 business days between Thanksgiving and Christmas. So we haven't seen that compressed of a peak since 2019, which means all of the supply chain is just going to have to really, really work well together to get things to people right before the holiday. And AI is going to be a big part of it as we implement it more and more in different facets of our business.

Victoria Kickham, Senior Editor, DC Velocity 06:47

Looking ahead to the holiday peak — we've touched on that throughout this conversation — how large a role will this crowdsource delivery model play in helping businesses manage all those last-minute holiday deliveries? Just sort of a general perspective on that?

Dennis Moon, Chief Operating Officer, Roadie 07:02

Yeah, it's a great question, and every year, we become a bigger and bigger part of it. Consumers are looking for same-day, fast deliveries,crowdsource platforms like Roadie, we play a really big part, and part of that is probably because we're seeing more and more retailers, the big retailers, need to move product closer to customers. So, there's a sense of forward distribution coming out of the brick-and-mortar stores, where, in years past, everything would come out of a distribution center somewhere else. So they've got to have the product in the store, and we've got to get it to their customers fast, which is just really, really growing every single year, especially in some of the biggest retailers that everybody knows that have the best deals when it comes to Black Friday, Cyber Monday. A vast majority of that volume is coming from the stores now, where it used to come out of their distribution centers.

Victoria Kickham, Senior Editor, DC Velocity 07:51

Dennis, anything else on this topic you want to mention as we gear up for Halloween next week, and looking further ahead to holiday peak?

Dennis Moon, Chief Operating Officer, Roadie 08:00

I would reiterate that it's going to be a short, compact, and hectic peak. As I said before, it was 27 days between Thanksgiving and Christmas, 17 business days, which we haven't seen in quite some time, and this year, more more than ever, fast delivery is going to be critical. It's going to making sure people have it in hand, they have it wrapped, they have it ready, because we don't want to leave people wondering, will my package arrive on Christmas Eve or Christmas morning? But the other thing, as I mentioned earlier, is to combat this, we're seeing a lot of retailers pull forward. We're seeing a lot of events take place prior to Black Friday, whereas it used to be Black Friday Cyber Monday, were the big Super Bowls of our year. Some things are kicking off early in November. Some things are going to have really, really good sales and events that go on all the way through the month of November and into early December, so I think the retailers are smart. They're trying to identify, they can't get everything done in that very, very condensed window, so let's go ahead and spread it out over a longer period of time. And the consumers are smart too, because they're just looking for, you know, really good deals on what they need to purchase for this peak season. So, the last thing I'll just say is that a lot of it will take place online. More and more and more of Black Friday, Cyber Monday is becoming an online event, and according to International Trade Administration, e-commerce in the U.S. is growing an annual rate of 11.22%, and the global marketplace is expected to reach 5.5 trillion by 2027, so it's just showing us the data to support that we're in the right space, and people are utilizing e-comm more and more every single year.

Victoria Kickham, Senior Editor, DC Velocity 09:35

That's certainly true. We see that, in, I think, in our work and in our lives here, so... . Thank you, Dennis, very much for joining us today. We appreciate your insight.

Dennis Moon, Chief Operating Officer, Roadie 09:45

Thank you guys for having me. Have a great day.

Victoria Kickham, Senior Editor, DC Velocity 09:47

Thank you. We've been talking with Dennis Moon of Roadie. Back to you, Dave.

David Maloney, Editorial Director, DC Velocity 09:51

Thank you, Dennis and Victoria. Now let's take a look at some of the other supply chain news from the week, and Ben, you wrote this week about a forecast for technology trends. What can you tell us?

Ben Ames, Senior News Editor, DC Velocity 10:05

That's right. You know, as we near the end of the year, many experts throughout the logistics sector take this chance to make some forecasts and predictions for 2025 that may seem like a long way away, but we're halfway through the fourth quarter already, so now's the time to plan, and one of the first ones that I saw came this week from Forrester, the technology analyst group. Forrester pointed out that 2024, to no surprise, has been a particularly challenging year for companies, especially in asset-intensive industries like manufacturing and transportation. That's because those asset-intensive industries and businesses quickly feel the pain when energy prices rise, when raw materials become harder to access, or when borrowing money for capital projects becomes more expensive. And all of those conditions arose in 2024, so that forced some of those leaders — again in manufacturing and transportation — to focus even more than usual, on managing the costs and improving efficiency, to find that balance point. All this was According to researcher Paul Miller, who's vice president and principal analyst at Forrester.

David Maloney, Editorial Director, DC Velocity 11:16

Well Ben, there certainly were a lot of supply chain disruptions this past year. Did the report say whether they felt 2025 would be any easier on supply chains?

Ben Ames, Senior News Editor, DC Velocity 11:27

Well, it did say, and unfortunately they are forecasting that it will not be all that much smoother. Forrester's latest forecast doesn't anticipate any dramatic improvement in the global macroeconomic situation for 2025, but it does anticipate several ways that companies will probably adapt. So, for 2025, Forrester predicts that over 25% of the big last-mile service and delivery fleets over in Europe will have become electric across the continent. So, between the different nations, they are analyzing parcel delivery firms, utility companies, even local governments that operate large fleets of small vans over relatively short distances, and so, for all those sorts of applications, electrification is an opportunity both to manage costs and to lower carbon emissions. In a second analysis of what we were likely to see, they said that probably less than 5% of the robots that we see in factories and warehouses will be walking. We might have seen a lot of recent headlines — I've written some of them myself — about some rise in two-legged robots that are now able to be designed. Forrester says that the compelling use cases for two-legged robots are less obvious than supporters suggest. Specifically, they said that those kind of robots, they might have a wow factor, but they probably don't have the best form factor for addressing the industry's dull, dirty, and dangerous tasks, which, that's a frequent way of describing the type of assignments that go to robots. And finally, that the third look forward at 2025, Forrester said that car makers, automakers are going to make significant cuts to their digital divisions, sort of admitting defeat after having invested billions of dollars industrywide to try to build the capability to design all those connected platforms and digital features that we see in modern vehicles. Instead, the future of mobility will be underpinned by sort of ecosystems of various technology providers. So, it won't — a vehicle won't necessarily be reliant on the same large automaker that made the car itself to also make the digital platforms on the inside of it.

David Maloney, Editorial Director, DC Velocity 13:53

But those really do look like some interesting trends. I guess we'll see how it all plays out in the coming year.

Ben Ames, Senior News Editor, DC Velocity 13:59

Yeah, absolutely I hadn't thought of the car one. I think we all touch base with that, probably daily, and it's interesting to try to figure out who's making the stuff.

David Maloney, Editorial Director, DC Velocity 14:09

Certainly is. Thank you. Ben.

Ben Ames, Senior News Editor, DC Velocity 14:11

Glad to.

David Maloney, Editorial Director, DC Velocity 14:12

And Victoria, as robots continue to make inroads into our distribution centers, there's one area that's just now getting a little bit of love from those robots. Can you give us the details?

Victoria Kickham, Senior Editor, DC Velocity 14:23

Absolutely, yes. So, I recently wrote about the continuing trend toward implementing warehouse robotics and discovered that there's a bit of a shift happening in where many warehouses are applying the latest technologies. A lot of companies have been focused on applying robotics to picking tasks as a way to handle accelerating e-commerce orders.We saw this trend really gain steam leading up to 2020, and then, of course, during the pandemic years. Many of those early automation gains are bearing fruit, so some companies are shifting their automation focus behind those picking lines, so to speak, and applying robotics to bulk handling, particularly pallets. I spoke to a handful of robotics vendors recently about the reasons behind this trendand what they are seeing in terms of how warehouses are using pallet-handling robots.

David Maloney, Editorial Director, DC Velocity 15:09

Victoria, what's driving that shift to moving towards more bulk handling?

Victoria Kickham, Senior Editor, DC Velocity 15:14

Well, one reason is that this is a labor-intensive process. Bulk items like pallets are moved by people with human-operated equipment, for the most part, and there are a lot of different movements of pallets throughout the warehouse. Workers are often moving them up and down, side to side, from receiving to storage, from storage to shipping, and so forth. So it's an area that's ripe for automation in many ways. But it's difficult to automate all of those pallet moves within a warehouse, so the trick is finding the processes within your facility that make the most sense to automate. Some facilities may benefit from using AGVs or AMRs to transport pallets between destinations; others could apply forklift AGVs to move pallets in and out of storage; and there are also robotic pallet shuttles, which can move pallets into and out of dense storage racking as part of a larger system. Now, all of these productshave been around for a while, but there's much research and development going on, making them better, smarter, more effective, and also in developing pallet-handling robotics that work in concert as a system. Really, what I learned is that this is very much about relieving pressure on labor and keeping goods flowing through the warehouse.

David Maloney, Editorial Director, DC Velocity 16:24

Yeah, because of those labor needs — and I think that's going to be still a growing problem — we will see more robots plying their trade and handling those heavy loads. It just makes a lot of sense.

Victoria Kickham, Senior Editor, DC Velocity 16:33

It certainly does.

David Maloney, Editorial Director, DC Velocity 16:35

Thank you, Victoria,

Victoria Kickham, Senior Editor, DC Velocity 16:36

You're welcome.

David Maloney, Editorial Director, DC Velocity 16:38

We encourage listeners to go to dcvelocity.com for more on these and other supply chain stories. Also check out the podcast Notes section for some direct links to read more about the topics that we discussed today.

And we'd like to thank our guest, Dennis Moon of Roadie, for being with us today. We welcome your comments on this topic and our other stories. You can email us at podcast@agilebme.com.

We also encourage you to subscribe to Logistics Matters at your favorite podcast platform. Our new episodes are uploaded on Fridays.

Speaking of subscribing, check out our sister podcast series, Supply Chain in the Fast Lane. We have a 10-episode series currently playing on the state of logistics. Check out Supply Chain in the Fast Lane wherever you get your podcasts.

And a reminder that Logistics Matters is sponsored by Zebra Robotics Automation. Are you tired of overpriced, underutilized autonomous mobile robot fulfillment solutions that drain your profits? It's time to switch to Zebra Robotics Automation. Their cutting-edge Zebra Symmetry fulfillment solution is engineered to reduce your cost per unit and give you that unbeatable competitive edge. Don't settle for less. Maximize your profits with Zebra. Discover the future of fulfillment at zebra.com/fulfillment.

We'll be back again next week with another edition of Logistics Matters. Be sure to join us. Until then, have a great week.

Articles and resources mentioned in this episode:

• Forrester forecasts technology trends for 2025
• How to handle a pallet
• Visit Supply Chain Xchange
• Listen to CSCMP and Supply Chain Xchange’s Supply Chain in the Fast Lane podcast

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