Supply chain evangelist: interview with Michael Regan
Over a four-decade career, Michael Regan has earned recognition as a tireless advocate for the logistics profession and one of its most prominent, innovative—and often provocative—thinkers.
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
When Michael Regan, founder and chief relationship officer of the consulting company TranzAct Technologies, speaks to a gathering of shippers or carriers, he sometimes likes to test his audience, challenging commonly held assumptions or insisting that managers are missing important opportunities to improve their businesses or relationships. He often takes the same approach when he is in the audience, asking provocative questions of speakers. Unerringly polite and courteous, he relishes a good debate.
Over a four-decade career as a shrewd, inventive, and successful businessman, he has also been a passionate advocate for the logistics profession. Last September, the Council of Supply Chain Management Professionals (CSCMP) recognized his long list of accomplishments by presenting him with its Distinguished Service Award (DSA). CSCMP President and CEO Rick Blasgen said of Regan, "He is a champion of innovation and creativity, cares deeply about the people in our profession, and has the ability to share his knowledge in ways that positively impact our community."
The breadth of Regan's activities is a reflection of his commitment to the profession. In addition to being an active member of CSCMP, he serves on the boards of the American Society of Transportation & Logistics (AST&L), the National Industrial Transportation League (NITL), the National Shippers Strategic Transportation Council (NASSTRAC), and the Transportation Intermediaries Association (TIA). Along with his leadership role at TranzAct Technologies, he is chairman of the consulting firm Supply Chain Edge and is actively engaged in community and faith-based organizations.
The DSA takes its place on a long list of other awards for Regan, including recognition as a DC Velocity Rainmaker in 2005, Delta Nu Alpha's Transportation Professional of the Year in 2002, NITL's Executive of the Year in 2005, and NASSTRAC's Member of the Year in 2008.
Regan reflected on his career and accomplishments in a recent conversation with Editorial Director Peter Bradley.
Q: What drives you to be as engaged as you are in both the profession and in your private volunteer efforts? A: I grew up in a house with parents who encouraged a spirit of service. My dad owned an industrial catering company and was deeply involved with the Red Cross. I remember that when there were some disasters in the Chicago area, such as the McCormick Place fire in 1967 and the tornado that struck Oak Lawn that same year, my dad took his food trucks to the sites so that he could feed the disaster-relief personnel. My mom also was a very active volunteer in numerous organizations. Growing up with parents who place a high value on engagement and serving others leaves an indelible impact on your life.
With respect to my engagement in professional and not-for-profit organizations, one cornerstone for me has been my belief that the world is a better place when people [take the initiative and try to make as big a difference as they can].
One of the ministries that my family has been involved with since 1997 is the Youth With a Mission ministry, which builds homes for families in Tijuana and Ensenada, Mexico. The first family we built a house for had nine kids, and they were literally living under a tarp. Two weeks prior to the build, they lost their youngest baby due to exposure. Seeing that family get a house—as well as many of the other families that we have built for since then—gives us a sense of satisfaction and joy. At the end of the day, our family realizes that we may not change the world, but we can make a positive difference in the lives of those individuals who cross our paths.
Q: Do you see participation in industry and professional organizations as an obligation for yourself and for other successful logistics and supply chain professionals? A: First, while I would like to think that my motivation has been altruistic, practically speaking, I have gotten more than I have given. While I have been very engaged in the leading shipper and third-party logistics organizations, this engagement has helped us build a better business because of our ability to serve our customers. And through my engagement and participation in these organizations, I have been honored and blessed by some (iconic for me) people who took an interest in my career. Whether it was the late Don Bowersox or Bill Augello, or people like Dan Sweeney or Norm Mineta, I have been very fortunate to have met and gotten to know some wonderful people.
Second, I don't know whether participating in these organizations is an obligation, but I really do believe that as successful logistics and supply chain professionals, we have a responsibility to work toward improving the supply chain and logistics world, and leaving our profession in better shape than when we began our careers. Engagement in worthwhile associations facilitates this.
Finally, one of the things that upset me is seeing people who complain but never get engaged to try and ameliorate the things they are complaining about. One of the reasons I am honored to be a DSA winner is because as a group, these individuals understand the need to be engaged and to make a difference personally and professionally.
Q: You serve in leadership roles for many organizations and are a frequent motivational speaker. What message do you try to convey through those efforts? A: There are a couple of things I work to convey through my talks. First, I want to encourage people to believe they can be "difference makers." Candidly, I meet a lot of hard-working, dedicated logistics and supply chain professionals who are discouraged for several different reasons. Truth be told, they work in environments where their accomplishments and capabilities are taken for granted, they are continually challenged to do more with less, and they live with the reality that their position could be "downsized" at a moment's notice.
Second, in preparing my presentations, I focus on challenging the audience in a positive manner. So my presentations—such as "Invest in You, Inc." or "Lead, Follow or Get Out of the Way!"—have common themes that accentuate my belief that individuals have tremendous capabilities and potential; have responsibility for investing in their careers and for cultivating and developing their capabilities even further; and make choices and thus, are responsible for the things that happen in their lives.
Having spoken at over 20 CSCMP annual conferences and having given 15 to 20 talks per year for the last 15 years, I am well aware that a lot of people who attend these events think it is more important to hear about technical, tactical, or strategic stuff in our industry than to hear some motivational message or words of encouragement. They are wrong! I believe a case can be made that more people are fired because of a lack of relationship skills than for a lack of technical skills. That is why I believe everybody needs some words of encouragement and some tools that help them develop their relational skill sets. It's a much better world when we have effective relationships where we can encourage each other.
Q: What role do you see logistics and supply chain management serving in the broader economy? A: There is no doubt in my mind that the disciplines of transportation, logistics, and supply chain management not only address fundamental business needs but also serve a higher purpose in the economy and contribute to a better standard of living for everyone! That said, it is crucial to understand the importance of what we do and how it makes a contribution to society.
I believe that a plausible argument can be made that a key ingredient in America's success is the fact that the companies in North America have more advanced and competitive supply chain capabilities. Because of these capabilities, we pay lower prices for our goods and have a wider selection of resources to choose from. Thus, we have a better standard of living as well as an enhanced capability to positively impact consumers on a global basis because of the work of intelligent and dedicated logistics and supply chain professionals around the world.
This story first appeared in the Quarter 4/2014 edition of CSCMP's Supply Chain Quarterly, a journal of thought leadership for the supply chain management profession and a sister publication to AGiLE Business Media's DC Velocity. Readers can obtain a subscription by joining the Council of Supply Chain Management Professionals (whose membership dues include the Quarterly's subscription fee). Subscriptions are also available to nonmembers for $34.95 (digital) or $89 a year (print). For more information, visit www.SupplyChainQuarterly.com.
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."