Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
The mantra of U.S. freight brokers is that they're not shippers. Brokers arrange the transportation of their customers' goods. But the freight belongs to somebody else, and brokers never touch the shipments or the equipment used to haul them.
The Food and Drug Administration (FDA) has other ideas. In publishing its long-awaited final rules last Tuesday on the sanitary transportation of human and animal food, the agency did what the brokers asked it not to do: Classify them as shippers.
This means brokers must comply with the regulations as if they were the shippers. The food producers are indemnified once they turn over their shipments to the broker. The producers will instruct the broker on the requirements for the product's safe carriage and handling. However, the responsibility of guaranteeing a clean shipping environment—and the corresponding liability if the ball is dropped during transportation—rests with the broker.
In broad strokes, brokers will be tasked with establishing controls for the transport of food that comes in contact with the environment. (The rule exempts the transport of frozen foods as well as food completely enclosed in containers, unless temperature controls are required.) Brokers must also notify the carrier and cargo loader of the conditions the shipping equipment needs to be in to achieve compliance. For example, brokers must certify in writing that a trailer has been precooled to a proper temperature, although there is nothing that said the freight itself must be precooled.
Failure to comply with the rules could lead to civil and criminal penalties if folks are sickened by food that went bad during transport. It could also leave brokers exposed to significant out-of-pocket costs—not to mention the inherent aggravation of tangling with insurance companies—if food becomes adulterated while in transit.
Chris Burroughs, senior government affairs manager for the trade group Transportation Intermediaries Association (TIA), said that although the industry knew it had a key role to play in the process, it felt the manufacturer should be classified as the shipper because it had the deepest knowledge of the product's characteristics. Despite that, the industry is prepared for the regulations because it already follows many of the practices the FDA outlined, Burroughs said.
Food is a huge and established commodity for brokers, though TIA could not quantify its size.
Brokers will "embrace this, and (will) be prepared to educate our shipper partners and ourselves on how to best comply," said Robert Kemp, president and CEO of DRT Transportation LLC, a broker based in Lebanon, Pa. That doesn't mean Kemp's looking forward to the experience. "This ruling is just another example of the government getting in the middle of the intermediary business, without really fully understanding what we do," he said in an e-mail today.
Implementing the law
The final rules, which implement the Food Safety and Modernization Act signed into law in 2011, represent the FDA's first foray into regulating transportation. For larger companies, the rules take effect one year after their publication date, which is expected to be early to mid-June. Smaller companies, defined as shippers with less than $27.5 million in revenues and carriers with fewer than 500 employees, would get two years from the publication date to comply.
Ironically, the FDA said in January 2013, when it first proposed the regulations, that it had no plans to add more layers to current sanitary food practices. The agency said at the time that its goal was to ensure that the status quo wouldn't trigger unnecessary risks to the food supply chain. In a statement issued when the rules became final, the FDA said it wants to "prevent practices during transportation" that could jeopardize food safety. Robert D. Moseley, an attorney for the law firm Smith Moore Leatherwood LLP, said in a note published Monday on the firm's website that the final rules are not as broad-based as what was first proposed.
There are a host of exemptions. For example, the rules do not apply to Mexican or Canadian firms shipping food through the U.S., as long as the food doesn't enter U.S. distribution. Shippers, carriers, and receivers of milk products that are inspected under a separate program are also exempt. Waivers were also granted to the unloaders of the goods, though the receivers of the product must still comply.
The FDA dropped its requirement for specific monitoring technology to be installed on or in the trailer, leaving it up to the broker and carrier to determine the devices to be used. Brokers will also not be liable for products, such as chocolate and butter, whose characteristics may change during transportation but wouldn't present a hazard if consumed in its altered form.
In two more breaks for brokers, the FDA said one batch of spoiled product would not render the entire load adulterated. The agency added that deviations in temperature between what appears on the bill of lading and what is actually recorded in transit or upon arrival must be "material," and not incidental, for the shipper to be liable.
TIA said in its 2014 comments to the proposed rule that a full load would be considered adulterated even if there was a mere 0.5-percent deviation in temperature levels, and that the broker would be on the hook for the total cost. Currently, the burden of proof falls on the producer and, at worst, the broker would be responsible for a portion of the cost of the damaged goods, according to the group.
The FDA has also left open the possibility that a shipper or carrier can rebut a charge of contamination if it can get a qualified individual to attest that the circumstances surrounding the transportation did not render the freight unsafe. Noting the provision, Moseley advised that it "would be a good time to get a retired FDA inspector on speed dial."
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use AI-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next 1-3 years. That was followed by self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) that are planned for use within the next three years, specifically for loss prevention.
Those strategies could help improve the brick and mortar shopping experience, since 78% of shoppers say it’s annoying when products are locked up or secured within cases. Adding to that frustration is that it’s hard to find an associate while shopping in stores these days, according to 70% of consumers. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
The survey also identified additional frustrations faced by retailers and associates:
challenges with offering easy options for click-and-collect or returns, despite high shopper demand for them
the struggle to confirm current inventory and pricing
lingering labor shortages and increasing loss incidents, even as shoppers return to stores
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.