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 thousands of folks walking the show floor at ProMat 2017 in Chicago this week witnessed material handling automation on a scale unimaginable just two years ago. But the breathtaking high-tech improvements come with a hitch: a shortage of skilled workers to service the increasingly complex stuff.
According to a 2017 survey by MHI, the trade group that runs ProMat, 63 percent of respondents said that "hiring and retaining a skilled workforce" remains their top challenge. A 2015 forecast by EMSI, a unit of CareerBuilder.com, predicted the number of new supply chain technician positions would grow by 11 percent through 2025 to more than 2.6 million from less than 2.4 million. On top of the expected growth in new positions, about 22 percent of the 2015 tech labor pool will turn over by 2025 due to retirements and departures, according to the EMSI forecast. As a result, 770,000 tech-level job openings (new and replacement) will be created by mid-decade, the firm said. However, universities and technical schools are not turning out enough skilled techs to meet the projected demand, according to a study by the University of Tennessee at Knoxville.
Organizations like the National Center for Supply Chain Automation are working to connect industry, academia, and talent in a long-range plan to build a self-sustaining labor pipeline. In the meantime, though, the goods still need to flow, warehouses need to hum, and expensive mission-critical systems and equipment need to be maintained and serviced.
The stakes in keeping systems running are higher than ever because of the explosive growth of e-commerce, which puts a premium on speed and precision in the DC to meet uncompromising omnichannel fulfillment demands. A company like Seattle-based Amazon.com Inc., the world's largest e-tailer and now a major fulfillment services provider, has "no tolerance for downtime" in its centers, said Todd Sermersheim, vice president, North America customer service for the Grand Rapids, Mich.-based systems integrator Dematic, a unit of German conglomerate Kion Group AG.
AN OUNCE OF PREVENTION ...
Maintenance comes at a cost, but the tab in time and money can be mitigated by proactive lifecycle checks, according to executives of system integrators, companies that blend material handling and software systems from multiple suppliers into a whole and ensure the component parts function smoothly together.
Whether they do it in-house or outsource the work—and many companies still opt for the former—businesses need to conduct five- to 10-year lifecycle assessments on new systems and develop remediation plans for older systems that are more vulnerable to near-term problems, said Dave Trice, senior director of business development, lifecycle support for Mason, Ohio-based systems integrator Intelligrated, a unit of Honeywell International Inc.
Intelligrated offers an end-to-end solution called "Iris," which Trice said provides customers with a support "roadmap," something sorely needed by businesses with expanding DC footprints. Dematic has also established a "managed services" unit, run by Sermersheim, dedicated to analyzing systems and equipment, and to identifying potential problems before they occur.
Integrators are training non-techs to handle problems that don't require highly skilled hands. For example, Conshohocken, Pa.-based systems integrator Invata Intralogistics Inc. trains customers on its systems so they can provide support on their own, according to Walter High, vice president of marketing. The objective, said High, is to allow customers to self-diagnose and repair when possible so they "do not need to call on Invata for a majority of support-related issues."
Raising worker proficiency in troubleshooting physical systems, or even helping with software repair, allows companies to solve minor technical problems on their own and in real time, material handling executives said. This frees up the so-called multicraft technicians—folks who can perform virtually every job in the warehouse and who are in the greatest demand—to focus on more challenging tasks. It also builds marketable skills for warehouse workers whose jobs might otherwise be replaced by automation, according to executives.
Industrial truck manufacturer Seegrid offers a two-day training program that certifies manufacturing employees to operate, repair, and manage fleets of its next-generation autonomous vision-guided vehicles (VGVs). The program trains customers' employees to handle routine tasks without the aid of a Seegrid technician, enabling them to develop skills as "robot fleet managers," according to Jeff Christensen, vice president of products at Pittsburgh-based Seegrid.
"This shift in responsibility is empowering manufacturing employees to have an ownership stake in the adoption of this new technology and will only continue to create more opportunities within the workforce," Christensen said in an e-mail.
One untapped resource is the real estate and logistics services giants like Los Angeles-based CBRE Group Inc., Chicago-based JLL Inc., and New York-based Cushman & Wakefield Inc. Until now, businesses have outsourced general building maintenance services to the real estate giants, said Steve Harrington, industry liaison for the National Center for Supply Chain Automation. Now, however, there is a push by customers to convince the giants to provide "integrated facilities management" services that include managing the systems and equipment on the floor, and the labor needed to support it, Harrington said. A full-service suite of solutions from the real estate firms might not be far off, he said.
A MOVING TARGET
Though systems integrators employ hundreds of on-site support technicians, most maintenance and repairs are now done remotely, either by communicating with workers on the plant or DC floor, or through embedded software that allows integrators to make immediate fixes without having a technician at the site. For instance, Dematic rolled out in late February a mobile phone app called "SiteView," which functions like the "FaceTime" app on Apple iPhones to enable Dematic technicians to see and hear descriptions of the problem from a non-tech worker on the floor, according to Sermersheim.
"We are driving more technology than ever into our products to allow for more self-diagnostics and problem solving," said John Sorensen, Intelligrated's senior vice president and general manager, lifecycle support services.
Technical mastery of systems and equipment is a moving target, mainly because the marketplace moves on so quickly from the last big thing. What's considered whiz-bang at this year's ProMat show may be obsolete by 2019, replaced by automation that hasn't yet been conceived. The difficulty in acquiring, training, and retaining engineers and technicians will create greater demand for machines and solutions that do not require complex programming and that can be managed by people who may not have received formal training to do so.
Perhaps most important is the need to think proactively when it comes to support, no easy task with maintenance budgets that are fixed even as DC networks expand, and with omnichannel demand ratcheting up the pressure to perform. "Everybody has been in a firefighting mode for some time," said Sorensen of Intelligrated.
Businesses with fast-growing DC networks tend to give proactive strategies short shrift, either because they are overwhelmed by current demands or are unaware that they need to, according to integrator executives. In addition, they may take a chance on hiring a supposedly qualified technician, only to discover that the employee can't keep up with the demands of rapid system and equipment obsolescence or master the technology upgrades, they added. All of this presents a recipe for trouble down the line, they warned.
"There was a time that you could walk in with a tool bag and be moderately successful," said Sorensen. "You can't do that anymore."
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
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.”