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.
Shortly after 10 a.m. tomorrow, Elaine L. Chao will appear before the Senate Commerce Committee and, barring unforeseen developments, will breeze through a confirmation hearing on her way to becoming the 18th secretary of transportation in the agency's 50-year history.
Those will likely be the least complicated moments of the 63-year-old Chao's tenure. Ahead of her lies a multitude of challenges. Chao will serve as the Trump administration's point person for a proposed infrastructure improvement initiative pegged at between $550 billion and $1 trillion, though at this point no one knows what it will entail or how it will be funded. While Congress controls the process, Chao's decades of public policy experience, which includes five years at DOT and the Federal Maritime Commission (FMC), and eight more as labor secretary in the George W. Bush administration, as well as her deep political connections—she is married to Senate Majority Leader Mitch McConnell (R-Ky.)—could put her front and center of what will likely be a high-profile debate.
Beyond her role in helping shape infrastructure policy, Chao is tasked with balancing the commercial demands of a rapidly changing mobility landscape and the department's top priority of ensuring public safety. The DOT's new world includes autonomous autos and trucks as well as commercial drones, areas that will only grow in relevance during Chao's tenure and will likely require different regulatory approaches. She will be dealing with ever-more crowded roadways; the Bureau of Transportation Statistics and the Federal Highway Administration, both DOT units, forecast today that truck ton-miles—one ton carried one mile—will rise by nearly 50 percent by 2045. She will be sought after by intermodal freight interests anxious to gain a larger share of the infrastructure pie with the phrase "freight can't wait." Chao is also likely to face pressure from motor carrier interests, emboldened by President-elect Trump's broad pledge to reverse Obama administration edicts viewed as anti-business, to rescind some of the Federal Motor Carrier Safety Administration's (FMCSA) regulations that truckers have complained are too costly and burdensome, and not justified by the potential safety benefits.
The only two regulations seen as being off the table are the mandate that each truck built after 2000 be equipped with an electronic logging device (ELD) by the end of the year, and the creation of a drug and alcohol information clearinghouse to let employers know whether a driver had a history of substance abuse at the time they were hired. Both are believed to have sound safety principles behind them, and, in the case of the ELD mandate, have been upheld by a federal appeals court, though the Owner-Operator Independent Drivers Association (OOIDA), which represents thousands of owner-operators and small fleets, has appealed the ruling.
James H. Burnley IV, who as deputy transportation secretary in 1986 helped launch Chao's transport career by recommending her as deputy maritime administrator, said Chao will take a rational and analytical approach to addressing economic regulation, and she will not let it conflict with her primary mission of maintaining safe roads, skies, waterways, railroads, and pipelines, all of which fall under DOT's purview. Though Chao will not layer the trucking industry with additional regulations, she won't put its economic interests above her overarching safety mandate, said Burnley, who served as DOT secretary in the last two years of the Reagan administration and has practiced law in Washington ever since.
Burnley, who has known Chao since 1983, was effusive in his praise. "She is one of the best qualified people, if not the best qualified person, to head DOT at this point in time," he said in a phone interview.
The American Trucking Associations (ATA) and OOIDA, the nation's two principal trucking groups, either declined comment or were not available to comment. The groups issued statements of congratulations when Chao was nominated in late November.
A balanced approach?
Cost-benefit analysis will be the order of the day at a Chao DOT, according to Marc Scribner, a senior fellow specializing in transport issues at the Competitive Enterprise Institute, a free-enterprise think tank with a jaundiced view toward regulation. "There will be a general skepticism of regulating first and asking questions later," said Scribner, a reference to what he said was the modus operandi of the Obama DOT. Ray LaHood and Anthony Foxx, the transport secretaries during President Barack Obama's two terms, "didn't really care about the costs" of regulations even if there were legitimate questions about whether the policies would result in safety improvements, Scribner said. That mindset will change under Chao, he predicted.
A tip-off to Chao's attitude toward trucking regulation may come with her choice to head the FMCSA, which over the past eight years has often been at loggerheads with truckers over alleged administrative overreach. The most recent administrator, T.F. Scott Darling III, has been relatively non-controversial. However, his predecessor, Anne S. Ferro, repeatedly incurred the wrath of an industry that accused her of ramming unfunded mandates with dubious safety benefits down its throat. A collective outcry of motor carrier interests is believed to have contributed to Ferro's departure from the agency in July 2014.
C. Randal Mullett, who was the long-time Washington lobbyist for the former Con-way Inc. trucking and logistics company, and now heads his own lobbying firm, said he's been told Chao is "actively involved" in selecting her leadership team, which would include the heads of sub-agencies like FMCSA. Mullett expects Chao to immerse herself in truck regulation with an eye toward better understanding the natural tension that exists between safety and economic imperatives. "Every administration is different, but based on the signals coming out of Trump Tower so far ... this administration will be very focused on such details, particularly in such a vital economic sector where good blue-collar jobs are involved," he said.
Chao's supporters point to her transport regulatory experience, which besides her stint at the maritime administration included one year as FMC chair and two years as deputy transport secretary in the George H.W. Bush administration. However, Kathryn B. Thomson, who was DOT general counsel under Secretaries LaHood and Foxx and is now a Washington-based attorney, said the significance of Chao's transport experience might be overstated. Thompson noted that Chao has been away from day-to-day transport policymaking since 1991, and in the years to follow did not keep her hand in the industry. Thomson, who never worked for or with Chao, said she has conducted extensive research on her work at DOT, the FMC, and the labor department since her nomination.
Throughout her stints in government, Chao has been supremely focused on reducing regulatory burdens and improving organizational behavior, Thomson's analysis found. Chao's style was to give directives to her staff and then expect those directives to be executed without much hands-on management. She excelled at completing what Thomson called one-off projects, and did not manage by consensus. By contrast, Secretary LaHood preferred to follow a big-tent approach where he sought views from multiple stakeholders before moving forward, Thomson said. It remains to be seen whether Chao's style will mesh with the work of an agency that takes a strategic, long-term view of the industry it governs.
"She is capable of doing it," said Thomson, referring to Chao's ability to re-align her management approach. "But she doesn't have a record of doing it."
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.
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.”