Art van Bodegraven was, among other roles, chief design officer for the DES Leadership Academy. He passed away on June 18, 2017. He will be greatly missed.
Every so often, a need to get right with "the infrastructure" rises to the top of the bottle, only it's not necessarily cream. The industry has been railing against infrastructure negligence for decades. After a bare handful of legislative actions at the federal level, even the two major parties' presidential candidates are committing to infrastructure rebuild.
But the most pugnacious fly in the ointment, the estimable and formidable Mitch Mac Donald, has raised a couple of infrastructure issues, namely the physical and enabling technology as priorities. Your 'umble correspondent has waxed eloquent about infrastructure components in the past, but they were different in focus and intensity from Mitch's observations.
The politicians are ready to pounce on yesterday's infrastructure as a sure way to solve tomorrow's challenges, in much the same way that generals study past failures as guides to future victories by learning how to win the last war.
It's not just politicians imagining that Israeli-Palestinian peace is a slam-dunk in an enlightened global community, or generals believing that the Mau-Mau would flee like rabbits when faced with heavy armament, or great minds in control of the exchequer who would invest in rotting bridges (last-mile solutions) or crumbling highways (long-distance movement) when there are constituencies that vote reliably to which they can pander. But candidates and incumbents are determined to spend on yesterday's physical infrastructure, deficits notwithstanding and relevance in question.
Football coaches devise offenses to outsmart the defenses of 30 years ago. Or create defenses to confound offenses abandoned for ineffectiveness 20 years ago. Dude! The Single Wing went out with piston warplanes!
Thus, it makes sense for supply chain management (SCM) professionals to periodically revisit what makes up an SCM infrastructure and what the priorities within infrastructure need to be.
TODAY'S INFRASTRUCTURE HOT BUTTONS
There is a handful of imperatives to be addressed, and now. These are a subset of the fuller list of infrastructure components listed in earlier writing, and they expand on Mitch's concerns regarding the physical elements and the role of consistent, visible, and coherent technology support.
The physical/technology hardware must be brought up to the standards and capabilities and capacities of advanced Western nations. Communications, Internet, everything. The traditional bridge/highway network needs to be elevated to a sustainable high level.
The difference between now and earlier is that the new and remedial work has to be accomplished to a comprehensive plan, a sequence of priorities that recognizes relative GDP (gross domestic product) impacts and ties into a whole, as opposed to a random collection of unrelated make-work projects that reward loyal voters or woo desirable battleground states. Significant attention must be paid, in Willy Loman's words, to long-haul and short-haul movement, including exits, ramps, congestion reduction, smooth transfer interchanges, and easy urban movement. Where appropriate, rail, seaport, inland waterway, and pipeline modes need to be included in the plan—as well as integrated with passenger alternatives.
As to technology, there isn't any without skills development, to be addressed below.
THE HUMAN INFRASTRUCTURE
Important as the physical component is, our supply chains simply won't work without people—people with the right skills, the right education, the right attitudes, and the right roles and responsibilities.
It begins with raw execution. We simply don't have enough forklift drivers, truckers, and order pickers to meet today's needs and customer commitments, and will need Evel Knievel's motorcycle to leap over tomorrow's looming entry-level worker gap. Compounding the challenge, we don't have programs to build and fill an execution labor pipeline, the landscape being littered with bits and pieces of unrelated and uncoordinated initiatives in various corporations and schools.
We are not remotely close to developing the next level of talent—the analysts, planners, and schedulers; the sourcers (not sorcerers, btw) and procurers; the relationship points of the spear; the collegial internal collaborators; the transport mavens; the project managers and S&OP (sales and operations planning) savants; and the like. And creating supply chain managers is largely a game of chance, the luck of right place/right time experience, coupled with fortuitous on-the-job learning.
And in a universe abuzz with drones, the hum of robots, and the clink/clank of sundry material handling contraptions, we are utterly failing at developing designers, repair people, installers, and the coders who make things stop going bump in the night.
The greatest human infrastructure gap? By far, our collective inability to take ordinary people and teach them to do the extraordinary, to become supply chain leaders—passionate visionaries with powers of persuasion and magnetic attraction for followers.
PUTTING THE PIECES TOGETHER
Until and unless we develop people to the extent that we have developed roads and bridges, and technology hardware and software, the other infrastructure imperatives will remain relatively meaningless. So, let's get to it, and figure out how to teach leaders to lead, managers to manage, and technogeeks to make bits and bytes do our bidding.
We cannot afford to cede the output of brainpower to offshore geniuses and let our best and brightest chillax while highly motivated technocrats from other lands learn enough to power their homelands to heights of supply chain excellence.
Time to get real. We can't—and won't in the future—satisfy the consumerist hunger of our home market, nor will we be a commanding player in global competition. Can we afford to become Greece or operate on a par with Portugal? Really? Are those your visions for a supply chain future?
THE ROLE(S) OF EVOLVING INFRASTRUCTURE PRIORITIES
We have a plate overflowing with infrastructure challenges, a legacy of neglect, a history of looking into the rear-view mirror, a failure to see the demands of tomorrow, a distorted view of skills needs, an unrealistic hope that tomorrow's blue-collar, well-paying jobs will translate to the STEM (science, technology, engineering, and mathematics) knowledge that helps define the 21st century economy in a planetary context. Is it too late? One hopes not, but vision, leadership, and individual initiative will be essential to survival, imho.
The Port of Oakland has been awarded $50 million from the U.S. Department of Transportation’s Maritime Administration (MARAD) to modernize wharves and terminal infrastructure at its Outer Harbor facility, the port said today.
Those upgrades would enable the Outer Harbor to accommodate Ultra Large Container Vessels (ULCVs), which are now a regular part of the shipping fleet calling on West Coast ports. Each of these ships has a handling capacity of up to 24,000 TEUs (20-foot containers) but are currently restricted at portions of Oakland’s Outer Harbor by aging wharves which were originally designed for smaller ships.
According to the port, those changes will let it handle newer, larger vessels, which are more efficient, cost effective, and environmentally cleaner to operate than older ships. Specific investments for the project will include: wharf strengthening, structural repairs, replacing container crane rails, adding support piles, strengthening support beams, and replacing electrical bus bar system to accommodate larger ship-to-shore cranes.
Commercial fleet operators are steadily increasing their use of GPS fleet tracking, in-cab video solutions, and predictive analytics, driven by rising costs, evolving regulations, and competitive pressures, according to an industry report from Verizon Connect.
Those conclusions come from the company’s fifth annual “Fleet Technology Trends Report,” conducted in partnership with Bobit Business Media, and based on responses from 543 fleet management professionals.
The study showed that for five consecutive years, at least four out of five respondents have reported using at least one form of fleet technology, said Atlanta-based Verizon Connect, which provides fleet and mobile workforce management software platforms, embedded OEM hardware, and a connected vehicle device called Hum by Verizon.
The most commonly used of those technologies is GPS fleet tracking, with 69% of fleets across industries reporting its use, the survey showed. Of those users, 72% find it extremely or very beneficial, citing improved efficiency (62%) and a reduction in harsh driving/speeding events (49%).
Respondents also reported a focus on safety, with 57% of respondents citing improved driver safety as a key benefit of GPS fleet tracking. And 68% of users said in-cab video solutions are extremely or very beneficial. Together, those technologies help reduce distracted driving incidents, improve coaching sessions, and help reduce accident and insurance costs, Verizon Connect said.
Looking at the future, fleet management software is evolving to meet emerging challenges, including sustainability and electrification, the company said. "The findings from this year's Fleet Technology Trends Report highlight a strong commitment across industries to embracing fleet technology, with GPS tracking and in-cab video solutions consistently delivering measurable results,” Peter Mitchell, General Manager, Verizon Connect, said in a release. “As fleets face rising costs and increased regulatory pressures, these technologies are proving to be indispensable in helping organizations optimize their operations, reduce expenses, and navigate the path toward a more sustainable future.”
Businesses engaged in international trade face three major supply chain hurdles as they head into 2025: the disruptions caused by Chinese New Year (CNY), the looming threat of potential tariffs on foreign-made products that could be imposed by the incoming Trump Administration, and the unresolved contract negotiations between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX), according to an analysis from trucking and logistics provider Averitt.
Each of those factors could lead to significant shipping delays, production slowdowns, and increased costs, Averitt said.
First, Chinese New Year 2025 begins on January 29, prompting factories across China and other regions to shut down for weeks, typically causing production to halt and freight demand to skyrocket. The ripple effects can range from increased shipping costs to extended lead times, disrupting even the most well-planned operations. To prepare for that event, shippers should place orders early, build inventory buffers, secure freight space in advance, diversify shipping modes, and communicate with logistics providers, Averitt said.
Second, new or increased tariffs on foreign-made goods could drive up the cost of imports, disrupt established supply chains, and create uncertainty in the marketplace. In turn, shippers may face freight rate volatility and capacity constraints as businesses rush to stockpile inventory ahead of tariff deadlines. To navigate these challenges, shippers should prepare advance shipments and inventory stockpiling, diversity sourcing, negotiate supplier agreements, explore domestic production, and leverage financial strategies.
Third, unresolved contract negotiations between the ILA and the USMX will come to a head by January 15, when the current contract expires. Labor action or strikes could cause severe disruptions at East and Gulf Coast ports, triggering widespread delays and bottlenecks across the supply chain. To prepare for the worst, shippers should adopt a similar strategy to the other potential January threats: collaborate early, secure freight, diversify supply chains, and monitor policy changes.
According to Averitt, companies can cushion the impact of all three challenges by deploying a seamless, end-to-end solution covering the entire path from customs clearance to final-mile delivery. That strategy can help businesses to store inventory closer to their customers, mitigate delays, and reduce costs associated with supply chain disruptions. And combined with proactive communication and real-time visibility tools, the approach allows companies to maintain control and keep their supply chains resilient in the face of global uncertainties, Averitt said.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.