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 global e-commerce unit of transport and logistics titan Deutsche Post DHL is piloting a program designed to facilitate the returns process for international e-commerce, a segment that is expected to grow as international e-commerce expands.
Charles Brewer, CEO of DHL eCommerce, said today that the program, which began about a month ago, is being tested in both directions on the U.S.-United Kingdom and U.S.-Australia trade lanes. The plan is for the unit to cover all aspects of cross-border returns, including a straight return to the product seller, consolidation of return shipments at the warehouse and distribution center level, disposal of low-value returned items, and the recovery, repair and repurposing of returns deemed to have a shelf life, Brewer said in an interview at DHL eCommerce's offices in Norcross, Ga., an Atlanta suburb.
The program aims to leverage all parts of the DHL enterprise, Brewer said. For example, DHL Supply Chain, one of the world's largest operators of contract warehouse and DC space, will be involved in the consolidation process, according to Brewer. DHL Express, the unit's express operations, will be involved in the transportation. DHL Global Forwarding, the company's freight forwarding, will be brought in to provide forwarding services, if necessary, Brewer said.
It is unclear whether the program will go live in time for the post-holiday returns period, which in many countries typically occurs during the first 10 days of January.
Brewer said that while other providers offer cross-border returns of products from the buyer to the seller, no one to date has come to market with a cross-border returns program to match the scope of development underway in domestic markets. Among the challenges is determining how customs authorities will process e-commerce returns when many countries are already swamped with what World Customs Organization (WCO) Secretary General Kunio Mikuriya earlier this year described as a "tsunami of small packages" that customs administrations, structured to clear business-to-business commerce between established trading partners, were not set up to process.
Brewer said his unit has not experienced problems getting its customers' shipments cleared through Customs in a timely manner. However, he said it is an issue that must be addressed, especially as cross-border e-commerce activity increases.
Brewer said there is merit to the concept of free-trade zones dedicated to e-commerce patterned to some extent after the "Foreign Trade Zone" model long in place for manufacturing. Brewer also endorsed an idea advanced by Jack Ma, co-founder and executive chairman of the Chinese e-marketplace Alibaba Group, of a "World Commerce Organization" that could be structured along the lines of the World Trade Organization (WTO).
Brewer said DHL has an inherent advantage in global e-commerce because it serves 220 countries, is the leading express delivery company in many markets, and has deep relationships with the many different customs authorities. DHL, based in Bonn, is a unit of Deutsche Post, which for decades functioned as the German postal system but which over the last 20 years has aggressively expanded into logistics and transportation. DHL marks its 50thyear in business in 2019.
According to DHL data, the value of all worldwide e-commerce is about US$3.7 trillion. Of that, $2.7 trillion moves entirely within countries, while the rest is cross-border in nature. The cross-border segment grew by 27 percent last year, while the larger "domestic" trades grew by 9 percent, according to the data.
Brewer said that the dominant markets like China, the U.S., France, and Germany will continue to see expanded e-commerce activity but that the pace of growth in those countries will level off due to the law of large numbers. E-commerce accounts for about 13 percent of U.S. retail sales, but when factoring out industries like gasoline where product is not ordered online, e-commerce's percentage is closer to 18 percent, Brewer said. In China, the latter figure is about 24 percent, he added.
Emerging markets offer huge potential, according to DHL. For example, in Indonesia, a nation of more than 276 million, e-commerce accounts for just 0.5 percent of retail sales. In Africa, that figure is about 1 percent, DHL estimates. Brewer reckons that there are only 10 to 12 shopping malls in all of Africa north of Johannesburg. This means millions of Africans will have little, if any, choice but to shop on line; as Internet connectivity improves and disposable income increases, they will, Brewer said.
Ironically, one country that DHL e-Commerce does not serve domestically is China, which is the king of intracountry e-commerce activity. Brewer said the company believes that it would take too much time and cost too much money to serve such a massive country, either through an acquisition or organic growth. DHL provides services supporting the international e-commerce market to and from China.
Brewer said his customers so far have been unperturbed by threats of a U.S-China trade war, which escalated today as each side implemented 25 percent tariffs on $16 billion worth of the other's goods. The National Retail Federation (NRF) has warned that the latest round of tariffs would directly hit U.S. consumers because they would be aimed at everyday consumer goods rather than industrial products and technology, which has mostly been the case up to now. For example, a 25 percent tariff on Chinese furniture imports would cost Americans $4.6 billion more for furniture even if retailers switched their sourcing to other foreign countries, many of whom already charge more than their Chinese counterparts, NRF said.
For DHL, which along with many of its customers has withstood many geopolitical threats through the years, it is business as usual, according to Brewer. "Whatever is going on, most companies tend to find a way to do business," he said.
North American manufacturers have begun stockpiling goods to buffer against the impact of potential tariffs threatened by incoming Trump Administration, building up safety stocks to guard against higher imported costs, according to a report from New Jersey business software firm GEP.
That surge in orders has sparked a jump in production, shrinking the level of spare capacity in global supply chains to its lowest level since June, the firm said in its “GEP Global Supply Chain Volatility Index.” By the numbers, that index rose to -0.20 in November, from -0.39 the month before, based on GEP’s measurement of demand conditions, shortages, transportation costs, inventories, and backlogs from its monthly survey of 27,000 businesses.
Another impact of the trend has been to trigger a surge in procurement activity by manufacturers in Asia—especially China—as new orders rebounded sharply. Only India reported a greater rise in raw material purchases than China in November. And preparations to ramp up production even further were evidenced data showing factory procurement activity across Asia rising at its fastest pace for three-and-a-half years, GEP said.
In sharp contrast, Europe's industrial recession worsened in November, in large part due to Germany's deepening manufacturing downturn. Factories in that region went deeper into retrenchment mode, as demand for inputs from manufacturers in Europe was its weakest since December 2023.
"In November, U.S. manufacturers, particularly in the consumer goods sector, increased their safety stocks to help blunt any immediate tariff increases," John Piatek, vice president, GEP, said in a release. "In contrast, Chinese manufacturers are getting busier as a result of government stimulus and growth in exports, led by automotives and technology products. Strategically, many global companies have a wait-and-hope approach, while simultaneously planning to remake their global supply chains to respond to a tariff and trade war in 2025 and beyond."
In response to booming e-commerce volumes, investors are currently building $9 billion worth of warehousing and distribution projects under construction in the U.S., with nearly 25% of the activity attributed to one company alone—Amazon.
The measure comes from a report by the Texas-based market analyst firm Industrial Info Resources (IIR), which said that Amazon is responsible for $2 billion in warehousing and distribution projects across the U.S., buoyed by the buildout of fulfillment centers--facilities that help process orders and ship products directly to end customers, ensuring deliveries of online goods from retailers to buyers.
That investment is inspired by U.S. Census Bureau data showing $300.1 billion in a preliminary estimate of U.S. retail e-commerce sales for third-quarter 2024, adjusted for seasonal variation but not for price changes, compared to $287.5 million in the first quarter, and an increase of 7.4% compared with third-quarter 2023. In addition, e-commerce sales accounted for 16.2% of total retail sales in the third quarter of this year, the report said.
Private equity firms are continuing to make waves in the logistics sector, as the Atlanta-based cargo payments and scheduling platform CargoSprint today acquired Advent Intermodal Solutions LLC, a New Jersey firm known as Advent eModal that says its cloud-based platform speeds up laden container movement at ports and intermodal hubs.
According to CargoSprint—which is backed by the private equity investment firm Lone View Capital—the move will expand the breadth of global trade that it facilitates and enhance its existing solutions for air, sea and land freight. The acquisition follows Lone View Capital’s deal just last month to buy a majority ownership stake in CargoSprint.
"CargoSprint and Advent eModal have a shared heritage as founder-led enterprises that rose to market leading positions by combining deep industry expertise with a passion for innovation. We look forward to supporting the combined company as it continues to drive efficiency in global trade,” said Doug Ceto, Partner at Lone View Capital.
Terms of the deal were not disclosed, but Parvez Mansuri, founder and former CEO of Advent eModal, will act as Chief Strategy Officer and remain a member of the board of directors of the combined company.
Advent eModal says its cloud-based platform, eModal, connects all parts of the shipping process, making it easier for ports, carriers, logistics providers and other stakeholders to move containers, increase equipment utilization, and optimize payment workflows.
Airbus Ventures, the venture capital arm of French aircraft manufacturer Airbus, on Thursday invested $10.5 million in the Singapore startup Eureka Robotics, which delivers robotic software and systems to automate tasks in precision manufacturing and logistics.
Eureka said it would use the “series A” round to accelerate the development and deployment of its main products, Eureka Controller and Eureka 3D Camera, which enable system integrators and manufacturers to deploy High Accuracy-High Agility (HA-HA) applications in factories and warehouses. Common uses include AI-based inspection, precision handling, 3D picking, assembly, and dispensing.
In addition, Eureka said it planned to scale up the company’s operations in the existing markets of Singapore and Japan, with a plan to launch more widely across Japan, as well as to enter the US market, where the company has already acquired initial customers.
“Eureka Robotics was founded in 2018 with the mission of helping factories worldwide automate dull, dirty, and dangerous work, so that human workers can focus on their creative endeavors,” company CEO and Co-founder Pham Quang Cuong said in a release. “We are proud to reach the next stage of our development, with the support of our investors and the cooperation of our esteemed customers and partners.”
Tire manufacturer Michelin has long used predictive maintenance tools to head off equipment failures, but the company recently upped its game by implementing cutting-edge robotics at its factory in Lexington, South Carolina. Managers there are using Boston Dynamics’ autonomous mobile robot (AMR) “Spot” to speed and streamline the inspection and maintenance processes—a move that is boosting productivity at the Lexington facility and for the company at large.
“Getting ahead of equipment failures is important, because it affects our production output,” Ryan Burns, an associate in the facility’s reliability and methods department, said in a case study describing the project. “If we can predict a failure and we can plan and schedule the work to fix the issue before it becomes an unplanned breakdown, then we’re able to increase our output as a company and a tire producer.”
MORE—AND BETTER—INSPECTIONS
Spot is a versatile quadruped AMR that can automate sensing and inspection tasks, and capture data—all while moving freely throughout a facility. The robot is being used around the world for maintenance-related functions, such as detecting mechanical problems and monitoring equipment for energy efficiency. At the Michelin plant, managers began by assigning Spot to inspect machinery in its tire verification (TV) area—taking over tasks previously done by in-house technicians as well as conducting additional inspections. Spot identifies issues and problems, and then conveys that information through its software program, called Orbit, which managers can access via an on-site server. From there, managers can sort through the data to detect anomalies and set alarm thresholds that will trigger a technician’s response.
“From a technician standpoint, Spot going out and doing these routes eliminates a mundane task that the humans were doing,” said Burns. “By Spot finding these anomalies and these issues, it gives the technicians more time to … [decide] how and when they’re going to fix the problem versus going out, identifying [the issue], then trying to plan and schedule everything.”
FEWER BREAKDOWNS, MORE PRODUCTIVITY
The results have been game-changing, according to Burns and his colleague Wayne Pender, the tech methods and reliability manager at the Lexington plant. As of this past fall, Spot was running seven inspection missions in the TV area, scanning about 350 points across 700 assets to detect anomalies ahead of time. The results helped generate 72 work orders in Michelin’s system—allowing the facility to avoid uncontrolled breakdowns and major production losses, according to Pender. On top of that, Spot had generated 66 air-leak work orders, identifying areas where Michelin can reduce energy consumption.
Looking ahead, the plan is to apply Spot’s talents beyond the TV area to the rest of the facility.
“Spot is a member of our maintenance team,” Burns said. “The future is to have more Spots, so that we can improve on our inspections and improve our overall output as a company here at [Lexington].”
Pender agrees: “We see Spot [as] the future. … [But] we probably need a whole dog pound or multiple Spots … to actually do what we need to do [across all of Michelin’s North American facilities].”