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 heads of a large third-party logistics (3PL) provider and one of the biggest less-than-truckload (LTL) carriers gave ringing endorsements Tuesday to an alternative data platform to power data communications between parties in one of trucking's supply chains, saying the companies needed a more rapid exchange of data to work in a world quickened by the influence of e-commerce.
John Wiehoff, chairman and CEO of 3PL C.H. Robinson Worldwide Inc., and James L. Welch, CEO of carrier YRC Worldwide Inc., said the $35 billion U.S. less-than-truckload market is being inexorably pulled in the direction of the Application Program Interface, or API, platform, which promises faster LTL data communication speeds than ever before. The technology is not new. However, backers of a new iteration known as the "direct carrier" model say it offers superior velocity in exchanging carrier-user data by allowing the software of carriers and users to communicate directly with each other, without data being routed through a third-party interface like Electronic Data Interchange (EDI), the system the LTL supply chain has relied on for years.
Wiehoff said that Robinson, which is the nation's largest freight broker, has taken "committed direction" toward greater API adoption. Welch concurred, saying the industry needs to migrate to a system with a proven ability to accelerate the flow of data. Both spoke at the Council of Supply Chain Management Professionals (CSCMP) annual global meeting in Orlando.
Robinson has for many years generated the bulk of its revenue from truckload brokerage. However, its LTL segment is growing at a much faster clip, albeit over a smaller base. Robinson generated nearly $100 million in LTL net revenue in its second quarter, a 9-percent year-over-year gain, and three times the pace of its top-line truckload growth. Net revenue is defined as revenue generated after transport costs are paid; Robinson is a non-asset-based provider.
Second-quarter LTL volumes grew by 7 percent, compared to 3 percent for truckload, Robinson said.
Robinson uses an API platform called "Freightview," which it absorbed from Freightquote,com, an e-commerce platform which Robinson acquired in December 2014 to get a sizable foothold in the LTL transactional market. Robinson is a very active user of EDI. However, Wiehoff's remarks indicate that API will represent a proportionally larger share of the Eden Prairie, Minn.-based giant's data budget, either through EDI conversion or network expansion.
At the time of the acquisition, transactional LTL accounted for two-thirds of Freightquote's business. Freightquote provided small to mid-size LTL shippers with access to multiple rate offerings, automated load-acceptance and -confirmation data, and digital payment processes. Through the acquisition, Robinson gained solid access to a shipper segment that had been underserved.
Robinson and Overland Park, Kan.-based YRC are benefitting from a firm LTL rate environment, which has come about even as the U.S. industrial economy—which is the sector's bread and butter—has experienced a mild-to-moderate recession. A concentrated provider environment has been a boon to pricing, enabling the carriers to impose one, sometimes, two published rate hikes a year, and make them stick. The top 10 carriers control about 70 percent of all capacity. "It's pretty good out there right now," said a leading LTL carrier executive, who asked not to be identified.
By contrast, the much-larger truckload market is more fragmented, because of fewer economic barriers to entry. The top 25 carriers control less than 30 percent of the $350 billion truckload market, according to industry estimates.
Wiehoff, who understands the truckload market better than virtually anyone, said he expects the market to remain extremely fragmented for years.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.