David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
With its location in the heart of Europe, the Netherlands is the center of distribution and logistics for the Continent. The Dutch have over 400 years of logistics experience behind them. Since the days of the Dutch East India Co., which was founded in 1602, the Netherlands has made international trade an art form.
The Netherlands has the infrastructure to match the expertise. The country's system of ports and canals, for instance, provides fast reach to most major European markets.
The World Economic Forum in 2013 rated the Dutch infrastructure among the best in the world: first in the world for maritime, fourth for air, and 11th for rail. That kind of infrastructure is key to reaching large population centers quickly (500 million people live within a 24-hour drive of Rotterdam, the country's main logistics entry point). It's no surprise that half of Europe's distribution center operations are located in Holland.
The Dutch government recognizes the vital economic role played by trade and logistics—the logistics sector accounts for approximately 9 percent of the nation's jobs—and has worked hard to position the country as a gateway for trade. Customs clearance, for example, is among the most streamlined in Europe. Supply chain management is recognized by the government as one of a handful of significant industries that must be nurtured. Coalitions of government, industry, and university representatives are working on initiatives to expand trade, ease restrictions, and promote innovation.
BELLY UP
As the main gateway to Europe, the Netherlands handles imports from all over the world, but in particular, from Asia and North America. Most of these goods arrive by sea or air. In fact, one-third of all imports into Europe pass through Amsterdam's Schiphol Airport or the Port of Rotterdam.
Schiphol is one of Europe's largest and busiest aircargo hubs. Nearly 80 percent of the airport's available capacity is in the form of lower-deck "belly space" in passenger planes. As with most air freight, these shipments consist mainly of perishables or high-value items. For example, Schiphol handles more shipments of cut flowers than any other airport in the world. Freight forwarders and third-party logistics service providers (3PLs) have set up shop in 17 business parks near the airport, providing logistics services to support the food, flower, aerospace, fashion, and life sciences markets.
Most products arriving at the airport pass through a streamlined customs process that requires only one stop. The majority of the cleared freight then leaves Schiphol on trucks, although some of it is offloaded to rail and canal barges for transport to distant destinations.
Outbound freight is handled equally quickly as well as securely. About 80 percent of security checks for outbound freight are performed remotely, with local shippers scanning their freight at their own facilities using devices that produce two-sided X-rays of outgoing containers. For companies that don't have their own scanning equipment, the airport has a program to bring mobile scanning vans to their sites. Nuclear detection vans are also employed at the airport to scan outgoing cargo.
MAIN PORT OF CALL
The Port of Rotterdam is the largest seaport in Europe and the ninth largest in the world. It alone accounts for 4 percent of the Dutch gross domestic product (GDP). The port's customs area clears more than 7 million containers each year.
With 75 feet of draft, the Port of Rotterdam can easily handle any ship currently on the water. It offers 80 terminals for handling bulk, breakbulk, containerized, liquid, and roll-on/roll-off freight. Last year, it processed 466 million tons of freight, 29 percent of those containerized. Investment in the port continues each year, with 190 million euros (approximately US$203 million) invested in infrastructure this past year alone.
Strategically located in the heart of Western Europe, the Port of Rotterdam offers easy access to transportation and fast reach to major markets. It is here that most intermodal operations begin. Some 53 percent of received goods depart by truck. Another 36 percent are loaded onto barges at adjacent docks, where 200 barge connections take products farther into the Netherlands as well as to more distant markets in Germany, France, and Switzerland. Some 11 percent move by rail via 250 weekly rail connections, mainly to destinations in Germany.
Some containers are transferred from giant vessels to smaller feeder ships that serve other ports in Europe, including ports in Ireland, the Baltic and Scandinavian countries, Spain, and the United Kingdom, as well as ports along the Mediterranean.
New automated systems in the Port of Rotterdam's terminals expedite processing and reduce the time a container spends in the port area. The European Container Terminal (ECT) at the port is one of the busiest, with 54 cranes handling about 30 ships each week and between 80,000 and 100,000 boxes per week. The cranes used to unload containers from vessels are still operated manually, although the terminal is experimenting with having operators control them remotely from an adjacent building.
Once the containers have been deposited on the dock, fully automated cranes take over, gathering up the containers and loading them onto large automated guided vehicles (AGVs). The AGVs transport the containers to stacking areas, where other automated cranes gather the loads and place them in stacks based on their projected mode of transit (feeder ship, canal boat, rail, or truck) and time of departure. About 1.5 percent of containers need to be scanned upon arrival, based on their risk assessment. The AGVs drive these containers through a security scan tunnel before taking them to the stacks.
When the boxes are ready to be loaded onto a truck chassis, the stacking cranes automatically gather the containers from the stack and take them to the truck. The automated process stops just short of placing the box onto the chassis. At that point, a worker in a remote building takes over, directing the process with a joystick.
REACHING THE HINTERLANDS
The European Container Terminal also operates an intermodal service to feed containers by barge and rail into more remote areas, or the hinterlands, of Northern Europe, Germany, and Austria. Known as European Gateway Services (EGS), this operation consolidates freight for delivery using a method known as "synchromodal transport," where algorithms determine the optimal way to transport each container based on mode, route, and leadtime.
Many of these containers move by barge on Holland's extensive river and canal system. Waterways connect the Port of Rotterdam to the Meuse River, which also connects to the Rhine to feed points in Germany and beyond. About 7,000 vessels ply the Netherlands' inland shipping lanes, the largest such fleet in Europe. According to the Holland Logistics Library, 79 percent of all containers transported on inland waterways within the European Union (EU) pass through Dutch territory.
Inland ports within the Netherlands receive containers originating in Rotterdam that require further intermodal handoffs. For example, the Trimodal Container Terminal in Venlo acts as an extended gateway for the Port of Rotterdam's ECT terminal, with facilities for transferring boxes from barges or railcars to trucks. Located just a few kilometers from the German border, the city of Venlo has become an important border crossing. Many U.S. and international distributors have set up shop in the area to process fresh foods destined for German markets (see the photo infographic on Fresh Park Venlo in this issue).
INNOVATIVE LAST-MILE DELIVERY
Other delivery modes are being deployed in the cities to help ease congestion and pollution. In Amsterdam, couriers use the extensive canal network to ferry packages by water. Bicycles are also common in Amsterdam, and it's not unusual to see couriers out making deliveries on electric bikes towing wagons filled with parcels.
Amsterdam is currently looking to establish plug-in stations around the city for refrigerated trucks. This would enable trucks to use electricity to keep cargo cool during delivery stops, instead of running their diesel engines. Smaller electric and natural-gas trucks are also being deployed in the cities to reduce noise and pollution while deftly navigating narrow streets. When possible, deliveries are made at night to further reduce congestion. Autonomous vehicles are also being looked at as a potential last-mile delivery method, all with the aim of reducing the use of larger trucks.
The Netherlands' history of trade- and transport-related innovation is no accident. The country was created out of an area once occupied by the North Sea, and it has little in the way of natural resources other than water. To survive, and ultimately flourish, it needed an avenue by which the world could efficiently move its commerce. If history, and the present, is any guide, it has certainly met the test.
A version of this article appears in our January 2017 print edition under the title "Europe goes Dutch."
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."