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."
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.
The Florida logistics technology startup OneRail has raised $42 million in venture backing to lift the fulfillment software company its next level of growth, the company said today.
The “series C” round was led by Los Angeles-based Aliment Capital, with additional participation from new investors eGateway Capital and Florida Opportunity Fund, as well as current investors Arsenal Growth Equity, Piva Capital, Bullpen Capital, Las Olas Venture Capital, Chicago Ventures, Gaingels and Mana Ventures. According to OneRail, the funding comes amidst a challenging funding environment where venture capital funding in the logistics sector has seen a 90% decline over the past two years.
The latest infusion follows the firm’s $33 million Series B round in 2022, and its move earlier in 2024 to acquire the Vancouver, Canada-based company Orderbot, a provider of enterprise inventory and distributed order management (DOM) software.
Orlando-based OneRail says its omnichannel fulfillment solution pairs its OmniPoint cloud software with a logistics as a service platform and a real-time, connected network of 12 million drivers. The firm says that its OmniPointsoftware automates fulfillment orchestration and last mile logistics, intelligently selecting the right place to fulfill inventory from, the right shipping mode, and the right carrier to optimize every order.
“This new funding round enables us to deepen our decision logic upstream in the order process to help solve some of the acute challenges facing retailers and wholesalers, such as order sourcing logic defaulting to closest store to customer to fulfill inventory from, which leads to split orders, out-of-stocks, or worse, cancelled orders,” OneRail Founder and CEO Bill Catania said in a release. “OneRail has revolutionized that process with a dynamic fulfillment solution that quickly finds available inventory in full, from an array of stores or warehouses within a localized radius of the customer, to meet the delivery promise, which ultimately transforms the end-customer experience.”
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.