You may not think of the military as a wellspring of logistics innovation. But the Defense Department has a long history of developing (and implementing) cutting-edge tools. Here are just a few examples.
Steve Geary is adjunct faculty at the University of Tennessee's Haaslam College of Business and is a lecturer at The Gordon Institute at Tufts University. He is the President of the Supply Chain Visions family of companies, consultancies that work across the government sector. Steve is a contributing editor at DC Velocity, and editor-at-large for CSCMP's Supply Chain Quarterly.
When you think about innovative organizations, what comes to mind? Amazon? Facebook? Apple?
If you're a logistician, the military—yes, the people who brought us the $435 claw hammer, the $640 toilet seat, and $7,600 coffeemakers—should be on your short list. Throughout history, the defense establishment has led the way in developing and implementing crucial tools and practices that have eventually seen widespread adoption by the business world.
The Department of Defense (DOD) has been a relentless early adopter of new logistics technologies and strategies. But in many cases, it has been more than just an early adopter; it played a major role in the innovations' fundamental research and development. What follows are just a few examples.
Intermodal freight and containerization. Containerization and intermodal transportation are deeply embedded in the way the world moves goods today. The commercial breakthrough for containers happened in the mid-1950s, brought about by visionary trucking executive Malcom McLean. After building and selling a successful motor carrier operation, McLean Trucking, he purchased the steamship line U.S. Lines and led the way in developing the containerships shippers now take for granted.
McLean deserves enormous credit for that. But in fact, the concept of containerized transportation originated with the U.S. Army. In the latter years of World War II, the Army used something it called "transporters"—standardized boxes that were really mini-containers—to speed up the loading and unloading of cargo ships ferrying goods between the U.S. and Europe.
When the Korean conflict erupted, the military started using the "transporters" for sensitive military equipment heading to the Pacific Rim as well. In 1952, the Army adopted the term "CONEX," short for "container express," to refer to the transporters. Late that same year, the first major shipment of CONEXes, containing engineering supplies and spare parts, moved by rail from Georgia to the Port of San Francisco and then by ship to Yokohama, Japan, and on to Korea.
So, Malcom McLean ran with the idea and created an industry, but containerization and intermodal started with the military, not McLean.
Roll on/roll off cargo ships. Intermodal carriage and containerization are not the only transportation innovation we owe to the World War II-era military.
In the fall of 1946, the Atlantic Steam Navigation Co.'s Empire Baltic—a seagoing roll on/roll off (Ro/Ro) cargo ship with a built-in ramp—sailed from Tilbury in the United Kingdom to Rotterdam loaded with 64 vehicles for the Dutch government. Thus began the first commercial Ro/Ro service, which relied on a fleet of three ships: the Empire Baltic, the Empire Cedric, and the Empire Celtic.
The Atlantic Steam Navigation Co. didn't own the ships, though.
The Ro/Ros were leased from the UK's Royal Navy, which used the specialized cargo ships during the Normandy landings in 1944. Known as LSTs, short for "Landing Ship, Tank," the vessels were the first purpose-built seagoing ships enabling road vehicles, like trucks, jeeps, and tanks to roll directly on and off. For the D-Day invasion, many of the LSTs were loaded in the United States and unloaded on the beaches of France.
From this military innovation grew the roll-on roll-off ferry cargo ships of today.
The Internet.The Internet is now so ubiquitous, so essential to business operations, that it's easy to forget how recent a development it is. It grew out of work carried out at the Stanford Research Institute (SRI) and the University of California, Los Angeles (UCLA) with funding from the Department of Defense. The Advanced Research Projects Agency (ARPA), renamed the Defense Advanced Research Projects Agency (DARPA) in 1972, oversaw the effort.
The first Internet message was sent over the wires from UCLA to SRI on Oct. 29, 1969. By the mid-1990s, the original network was decommissioned. By that time, there was no further need for DOD involvement. Commercial Internet service providers (ISPs) were off and running, and the rest is history.
Automated freight payment. In 1998, the Department of Defense evaluated the benefit of re-engineering the freight payment process and abandoning the use of military manifests and government-defined bills of lading. That same year, DOD went all in with a commercial off-the-shelf solution from U.S. Bank called PowerTrack.
Not only did this support an emerging commercial capability with millions of dollars a year of DOD funds, but it also helped legitimize the overall market for automated freight payment systems. Even if you don't work with U.S. Bank, if you use an automated system, you have DOD to thank. A rising tide lifts all boats.
WHAT'S NEXT?
And these are but a few examples. We could also mention the military's groundbreaking work with radio-frequency identification (RFID) technology, global positioning systems (GPS), and even the Internet of Things.
As for what's next, innovations in military logistics will keep on coming, and commercial applications are sure to follow. Delivery drones are already in use at the Marine Corps. Driverless cargo trucks are being tested by the Army. Field-deployable 3-D printing capabilities went forward in Afghanistan.
More innovations—some still on the military drawing board, some in development—are now taking shape. The Army is rolling out leading-edge virtual reality combat simulators to train people in battlefield conditions without an actual battlefield. Perhaps someday we'll train truck drivers the same way.
What the military has learned over the years is that creativity by itself is insufficient, that better is sometimes not good enough. The drive for different—innovating an entirely new approach—may be what's required to win the battle, or even the war.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
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.”