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 main hallway at the Transportation Intermediaries Association (TIA) 40th annual conference in Palm Desert, Calif., was clogged Monday with attendees craning their necks, Joséling for a better vantage point, and creating a near-impassable roadblock for folks looking to move to and fro.
The subject of the fuss was not a celebrity or some orange-haired politician. It was for sessions at TIA's two learning centers focusing on the worst truck capacity crisis to hit in at least 15 years, and maybe in the industry's history. Each learning center held enough chairs for about a dozen people. The size of the throng at each was perhaps three to four times that.
The interest was keen, and expected. TIA members—mostly property brokers, freight forwarders, third-party logistics (3PL) providers that do brokerage, and the burgeoning group of IT providers that sell to brokers, forwarders, and 3PLs—live and die by the truck. Rail intermodal executives were in attendance to pitch an alternative mousetrap, something that hasn't been seen much at TIA meetings. Though brokers' use of intermodal was up 3 to 4 percent from a year ago, according to data from Cary, N.C.-based transportation management systems (TMS) provider MercuryGate International, those attending the sessions did not appear keen on shifting their business to the rails.
Broker wariness toward using intermodal is divided into three buckets: Service reliability, lack of container equipment in markets where it needs to be, and too many moving parts—rail and dray—for broker comfort. Besides, the dray segment faces the same challenges of truck and driver shortages as its line-haul brethren.
One broker who looked like he'd seen more than a few business cycles said he shifted some business from over-the-road to rail, only to switch it back to truck. Asked by one of the session's moderators, Jim Perdue, intermodal product manager for MercuryGate, if it was because truck service on his lanes had improved, the broker replied, "No, I was making the best of a bad situation."
A "bad situation" seems like an apt description of the status quo. Some folks at the conference forecast truck rate hikes of 15 to 20 percent over the next 18 months. Moreover, they did so with a tone of acceptance and resignation that made one feel there was certainty behind the projections.
The default explanation for the rate hikes is the shortage of qualified truck drivers. Yet the industry actually added 17,000 net drivers in 2017, according to Damon Langley, director, solution delivery—BI optimization and value engineering for Cleveland-based TMS provider TMW Systems Inc. The problem, at least through the first four-plus months of 2018 as rates have blasted skyward, is the reduction in driver and fleet productivity. Macro factors—ranging from compliance with the federal government's electronic logging device (ELD) mandate to an acute shortage of truck stop parking to too many shippers and receivers still making drivers wait three hours or more to load and unload their shipments—are conspiring to keep wheels turning, on average, just 6.5 to 7 hours each day, well below the 11 continuous drive hours (with a 30-minute rest break during the first 8) within a 14-hour workday that the law allows.
Driver detention has become a real sore spot, with fed-up fleets and drivers becoming increasingly stingy with free time. Langley said fleets and drivers may insist on allowing no more than one hour of free time before charging detention fees, with that number shrinking to "no hours" at some point.
Another problem is that drivers exit the industry almost as fast as they enter it. Only about 15 percent of drivers last beyond their second year in the business, Langley said. Driver survival rates can be measured in milestones, Langley said. The first is 90 days, followed by six months, and then two years. A fleet that holds on to a driver for two years is likely to have a long-term employee, he said.
Drivers, especially owner-operators, don't do themselves any favors by an inability to manage their costs. Brené Hutto, chief relationship officer of Truckstop.com, a New Plymouth, Idaho-based truckload spot market load-board operator, who also moderated one of the learning center sessions, cobbled together a slew of data and found that about 75 percent of owner-operators don't know their costs per mile. Such an eye-opening statistic runs counter to the notion that an entrepreneur's strong suit is knowing where every dollar is going, Hutto said.
All of this chaos might seem to be a golden opportunity for railroads to make themselves shine for brokers. Recognizing this, TIA has developed a tutorial for its members on the ins and outs of intermodal service. Yet the railroads can't seem to get out of their own way, as evidenced last month when the U.S. Surface Transportation Board (STB), which oversees the remnants of rail regulation, asked the seven big railroads to submit what are known as "service outlooks" for the near-term period and for the rest of the year. The STB agency said it is "increasingly concerned about the overall state of rail service," noting that average train speeds had declined noticeably, while average terminal dwell times had risen.
On a separate panel at the TIA conference with brokers, draymen, and IT providers, rail intermodal executives acknowledged they need to improve service, especially the speed of throughput at the notorious Chicago chokepoint, and they pledged to aggressively court brokers with promises of a truck-like service they can consistently depend on. "Our mission is on-boarding new brokers," said Sam Niness, president of Thoroughbred Direct Intermodal Services Inc., a unit of Norfolk-based rail Norfolk Southern Corp.
Shawntell Kroese, vice president of Loup Logistics, a newly reconstituted intermodal unit of Omaha-based Union Pacific Co., said the company will purchase containers and chassis during the year to respond to concerns over equipment shortages and imbalances. To hear the intermodal executives tell it, chassis availability is a more acute challenge than containers. "We had enough boxes, but not enough chassis," said Todd Biscan, director, intermodal sales for Jacksonville-based CSX Transportation Inc.
At the same time, Kroese cautioned the intermediaries in the audience that reliability cuts both ways. "We plan on your freight," she said. "We plan on the containers and the draymen." If the demand doesn't materialize as promised and expected, then the relationship could be compromised, she said.
Supply chains are poised for accelerated adoption of mobile robots and drones as those technologies mature and companies focus on implementing artificial intelligence (AI) and automation across their logistics operations.
That’s according to data from Gartner’s Hype Cycle for Mobile Robots and Drones, released this week. The report shows that several mobile robotics technologies will mature over the next two to five years, and also identifies breakthrough and rising technologies set to have an impact further out.
Gartner’s Hype Cycle is a graphical depiction of a common pattern that arises with each new technology or innovation through five phases of maturity and adoption. Chief supply chain officers can use the research to find robotic solutions that meet their needs, according to Gartner.
Gartner, Inc.
The mobile robotic technologies set to mature over the next two to five years are: collaborative in-aisle picking robots, light-cargo delivery robots, autonomous mobile robots (AMRs) for transport, mobile robotic goods-to-person systems, and robotic cube storage systems.
“As organizations look to further improve logistic operations, support automation and augment humans in various jobs, supply chain leaders have turned to mobile robots to support their strategy,” Dwight Klappich, VP analyst and Gartner fellow with the Gartner Supply Chain practice, said in a statement announcing the findings. “Mobile robots are continuing to evolve, becoming more powerful and practical, thus paving the way for continued technology innovation.”
Technologies that are on the rise include autonomous data collection and inspection technologies, which are expected to deliver benefits over the next five to 10 years. These include solutions like indoor-flying drones, which utilize AI-enabled vision or RFID to help with time-consuming inventory management, inspection, and surveillance tasks. The technology can also alleviate safety concerns that arise in warehouses, such as workers counting inventory in hard-to-reach places.
“Automating labor-intensive tasks can provide notable benefits,” Klappich said. “With AI capabilities increasingly embedded in mobile robots and drones, the potential to function unaided and adapt to environments will make it possible to support a growing number of use cases.”
Humanoid robots—which resemble the human body in shape—are among the technologies in the breakthrough stage, meaning that they are expected to have a transformational effect on supply chains, but their mainstream adoption could take 10 years or more.
“For supply chains with high-volume and predictable processes, humanoid robots have the potential to enhance or supplement the supply chain workforce,” Klappich also said. “However, while the pace of innovation is encouraging, the industry is years away from general-purpose humanoid robots being used in more complex retail and industrial environments.”
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.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.
The Boston-based enterprise software vendor Board has acquired the California company Prevedere, a provider of predictive planning technology, saying the move will integrate internal performance metrics with external economic intelligence.
According to Board, the combined technologies will integrate millions of external data points—ranging from macroeconomic indicators to AI-driven predictive models—to help companies build predictive models for critical planning needs, cutting costs by reducing inventory excess and optimizing logistics in response to global trade dynamics.
That is particularly valuable in today’s rapidly changing markets, where companies face evolving customer preferences and economic shifts, the company said. “Our customers spend significant time analyzing internal data but often lack visibility into how external factors might impact their planning,” Jeff Casale, CEO of Board, said in a release. “By integrating Prevedere, we eliminate those blind spots, equipping executives with a complete view of their operating environment. This empowers them to respond dynamically to market changes and make informed decisions that drive competitive advantage.”
Material handling automation provider Vecna Robotics today named Karl Iagnemma as its new CEO and announced $14.5 million in additional funding from existing investors, the Waltham, Massachusetts firm said.
The fresh funding is earmarked to accelerate technology and product enhancements to address the automation needs of operators in automotive, general manufacturing, and high-volume warehousing.
Iagnemma comes to the company after roles as an MIT researcher and inventor, and with leadership titles including co-founder and CEO of autonomous vehicle technology company nuTonomy. The tier 1 supplier Aptiv acquired Aptiv in 2017 for $450 million, and named Iagnemma as founding CEO of Motional, its $4 billion robotaxi joint venture with automaker Hyundai Motor Group.
“Automation in logistics today is similar to the current state of robotaxis, in that there is a massive market opportunity but little market penetration,” Iagnemma said in a release. “I join Vecna Robotics at an inflection point in the material handling market, where operators are poised to adopt automation at scale. Vecna is uniquely positioned to shape the market with state-of-the-art technology and products that are easy to purchase, deploy, and operate reliably across many different workflows.”