Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Faced with swiftly changing business conditions, logistics professionals are finding creative new uses for their labor management systems (LMS), in addition to their core application of tracking labor performance in order to identify workers in need of remedial training and offer bonus incentives to high-performers.
Under pressure from economic trends such as omnichannel fulfillment, demand for next-day shipping, and warehouse labor shortages, companies are using data generated by their LMS to help solve a wide array of logistics challenges. Today's LMS platforms allow DC supervisors to quickly adjust to changing market conditions, provide real-time feedback and coaching to employees, and boost efficiency in smaller facilities and retail stores.
Although the specifics will vary from one operation to the next, all of these applications can save users time and money. What follows are five ways companies are wringing extra value from their labor management systems:
1. To provide mobility for managers. "LMS platforms have come a long way in the last five to 10 years," says Bradley Gillette, director of supply chain excellence at Ryder System Inc., the Miami-based third-party logistics service provider. Ryder works with a variety of LMS systems in its operations, including commercial and in-house platforms on both its own and its clients' networks.
One of the most visible of those changes is mobility, Gillette says. Software developers now offer labor management systems that can run on mobile computing platforms, such as tablets and smartphones. This allows warehouse supervisors to walk the floors of their facilities and provide on-the-spot coaching to their workers, instead of sitting alone at their desks pulling clerical reports, he says.
Coaching workers based on real-time feedback can help boost efficiency and safety, improve teamwork, and enhance training efforts. Access to LMS data also allows warehouse managers to adapt to new work flows, such as the addition of tasks like each-picking, light assembly, returns, or kitting.
2. To provide real-time performance feedback. Operating under the assumption that an informed worker is a productive worker, some DCs have set up their operations so that LMS-generated performance data can be seen in every corner of the warehouse. Using large dashboard displays, many warehouse managers post real-time performance updates so workers can measure their progress against pre-set goals.
"An LMS can be used to track, reward, benefit, and incent," says Jason Franklin, product manager for labor and business intelligence at Intelligrated Software. "Workers like friendly competition—to be judged and to see who won."
In addition to motivating workers to work more efficiently, sharing performance data in a public space can build employees' trust in the overall incentive system, Franklin says. By offering a transparent picture of performance, managers encourage workers to compare themselves with their peers as they all work toward long-term goals.
Despite these benefits, some experts warn that displaying LMS data on public dashboards can distract some warehouse workers from their primary jobs—particularly if they're constantly checking the scoreboard. There's also the risk that they'll cut corners on safety if they're running behind, or slack off after a busy morning when they see they'll easily make their daily quota.
"We have found that when we put that information on display, people who were performing well above average ended up going slower, just to fill up the allotted time," reports Jon Kuerschner, vice president for supply chain solutions at HighJump Software Inc. "They were normalizing their behavior to meet the expectation."
Managers don't have to turn off dashboards entirely to avoid these outcomes, Kuerschner says. They can provide LMS data only for certain workers, aggregate the data for a team of employees, or provide incentive-based pay that's based on a combination of individual and team performance.
3. To boost worker retention. In addition to helping boost worker efficiency on the warehouse floor, LMS platforms can be effective tools for retaining current employees and even recruiting new workers, says Gary Allen, Ryder's vice president for supply chain excellence.
By linking LMS metrics to employees' paychecks, a company can reward its best workers with higher compensation. And the rewards don't have to be monetary. Some operations link workers' performance to nonfinancial incentives. For instance, in some DCs, workers who hit their targets can earn extra vacation hours, prizes, or a chance to attend a weekly pizza party.
While linking performance to rewards can be a strong incentive, some managers warn that it can be a tough sell initially. That's because employees often need time to adjust to the idea that their daily performance is an open book. Their reluctance tends to diminish as workers see the benefits of greater transparency in their compensation structure.
Not all employees are averse to the idea, however. Workers from the millennial generation, who are accustomed to living in a digital world, tend to embrace the concept, experts say.
"As opposed to saying 'The LMS can track everything; Big Brother's watching,' the new workers we're hiring are used to new technologies," Allen says. "It encourages their competitive nature. People like to hear feedback—both qualitative and quantitative. It helps them understand how they're contributing to the whole organization."
That transparency has been helpful both in recruiting new warehouse employees and in retaining existing workers, experts say. That is especially important in an increasingly tight labor market, where warehouses must compete with industries like construction and plumbing for help.
"One of the shifts we're seeing in the work force is that millennials want to know they're in an organization they have a future with," Allen says. Not only are they eager for tips and advice, he says, but they also want a career path set out for them that they can expect to follow if they continue to perform well.
4. To rev up fulfillment operations in small DCs and retail stores. Many LMS providers promise that the software can deliver a 10- to 30-percent improvement in worker efficiency. A boost of that magnitude makes it easy to justify the software's cost, since those efficiencies add up fast in a warehouse with several hundred workers.
Calculating the return on investment (ROI) gets much harder for smaller facilities with just a few dozen workers, however. So in recent years, some users have begun using a simplified version, sometimes called "LMS light," in small fulfillment centers and even retail stores.
With a smaller price tag, these versions usually forgo certain features of a full-blown LMS, such as employee coaching, customized goals, and interoperability with the warehouse management system (WMS). But a scaled-back version of an LMS with a simple dashboard can still deliver performance gains of nearly 10 percent, proponents say.
"If you look at a large home improvement store or sporting goods retailer, the store is basically a warehouse with customers in it some of the time," says Intelligrated's Franklin. "But in the store environment, we have no idea how long it should take to receive and scan items, or do break-out and put-away by aisle," he says. "So how can we hold individuals accountable?"
One answer is to use a stripped-down LMS system to develop a baseline for time needed to perform various tasks.
This approach can be especially valuable in the age of omnichannel fulfillment, as stores struggle to master new tasks like filling e-commerce orders from retail shelves or meeting deadlines for buy-online-pick-up-in-store orders, Franklin says. Using an LMS to, say, batch orders so that an employee can retrieve three items at once instead of making three trips can help stores run more efficiently.
5. To generate data for high-level decision-making. Another way companies are wringing extra value from an LMS is to leverage the data it generates for corporate-level scenario modeling and strategic decision-making.
By applying business analytics tools to LMS-generated data on receiving, put-away, picking, value-added services, and shipping, users can calculate the best way to respond to market shifts like variations in seasonal demand, the introduction of new product lines, or a changeover from pallet picking to piece picking.
Managers can also use LMS-generated data in activity-based costing, a method of estimating the cost of completing a job by adding up the costs of all of its constituent activities, says HighJump's Kuerschner. That can be crucial when a DC is trying to decide whether it would be profitable to bring on a new customer who demands complex kitting or assembly tasks, instead of just basic loading and shipping.
Taken together, these five creative applications of a standard labor management platform are helping DC managers find solutions to 21st century logistics challenges. Whether an operation is looking to adapt its operations to meet the demands of omnichannel order fulfillment or the changing demographics of the next-generation labor force, the humble LMS may hold the answer.
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."