David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
October is National Disability Employment Awareness Month. It's a time each year when Americans recognize the important work being done by our fellow citizens with disabilities. At Lansing, Mich.-based Peckham Inc., however, that recognition takes place all year long. Peckham is a nonprofit vocational rehabilitation organization that advances employment opportunities for people with disabilities. Its operations include a third-party logistics services unit.
As Tom Minich, Peckham's vice president of logistics, explains, "The talents and skills of employees with disabilities are what fuels and maintains our company's success as an organization." He spoke recently with DCV's editorial director, David Maloney, about the third party's operations, the benefits of hiring the disabled, and how other companies can get started with their own hiring program.
Q: Can you tell us about Peckham and your commitment to providing employment opportunities for people with disabilities?
A: Peckham is a nonprofit vocational rehabilitation organization that specializes in training, employing, and preparing individuals with disabilities and other barriers to employment for workplace success. We believe that people with disabilities deserve the right to work and the right to choose where they work.
Peckham operates five social enterprises—supply chain solutions, business services, environmental services, apparel manufacturing, and Peckham Farms. We choose to work with customers that embrace diversity and community, and believe in the potential of all individuals.
Q: Why did you choose supply chain as one of your company's focused industries?
A: We conduct town hall meetings periodically to ask our work force what they would like to see in the future. Warehousing was one of the lines of business where we could effectively employ people with significant disabilities using technology.
Peckham has six warehouses totaling 1.4 million square feet of space, all in Lansing, Mich. From storage, to contact center, to "pick, pack, and ship," we are a one-stop logistics and fulfillment center.
Q: Who are your customers?
A: We are doing logistics support for the Defense Department, specifically the Defense Logistics Agency (DLA) and the Army.
One of the operations is a repair facility for the Army's Organizational Clothing and Individual Equipment division. Peckham receives, launders, repairs, and stores thousands of items. We also stock more than 8,000 items, primarily clothing, for Navy and Coast Guard service members worldwide. Peckham ships an average of 1,500 orders each day to over 40,000 customers.
Q: Can you talk a little about the diversity found in your work force?
A: Peckham is a very diverse organization. Nearly 80 percent of our 2,500 employees have one or more physical, mental, or emotional disabilities. We are very culturally diverse, with nearly 30 languages being spoken and individuals representing more than 50 different cultures. Our supply chain solutions social enterprise employs more than 250 employees at the six different locations, and more than 97 percent of those workers have one or more disabilities. For example, among the supply chain associates, we have people with psychiatric disorders and emotional impairments, physical disabilities, developmental and learning disabilities, autism spectrum disorders, visual and hearing disabilities, and traumatic brain injuries.
Q: Can you provide some examples of the work that people with disabilities perform in your distribution centers?
A: Currently, 97.5 percent of all direct labor is done by persons with disabilities. These functions include receiving, storing, picking, shipping, repackaging, inspection, washing, drying, repairing, and classifying/reclassifying product. There have also been individuals with disabilities who operate in supervisory roles.
We have experienced amazing results with this work force. There are studies that show that people with disabilities are more reliable, more loyal, and more engaged than other workers, yet this is one of the most untapped resources for talent by employers because of stigma, fear, myths, and misconceptions about cost and training, or plain ignorance.
Peckham has a very high retention rate with this work force, currently 96.5 percent. Our unplanned absence rate is also very low and generally runs between 0.8 and 1.8 percent.
Q: Did you need to adapt your processes to accommodate their disabilities?
A: No. We believe in fitting the job to the employee and individualizing the work experience for every employee whether that person has a disability or not.
There are a few jobs that were carved out, but the cost from the carved-out position was neutral when compared with the savings elsewhere. An example would be wrapping pallets. Peckham has automated stretch wrappers, but a person is still needed to attach the stretch film to the pallet and start the machine. Our forklift drivers were doing this and were having to get off and on their vehicles multiple times an hour, which reduced their productivity.
We hired a visually impaired worker who now operates several stretch wrap machines simultaneously, which added a cost. But once we added that worker, the productivity of the forklift operators almost doubled, making this a cost-neutral or cost-saving initiative overall. Most accommodations can be done in this way, where there is little to no cost but the return on investment is high for all parties.
Q: Do you think concerns about the cost of accommodations keep employers from hiring workers with disabilities?
A: I do, but our experience is just the opposite. There is a myth that all people with disabilities require job accommodations, yet studies show less than a quarter of employees with disabilities need accommodations.
There are many simple accommodations that we make for workers that cost us nothing, such as schedule adjustments. Investing in our workers, providing the resources and support they need, gives us employees who love their jobs and appreciate the opportunity they were given, in turn doing outstanding work and remaining loyal to our organization.
Q: Do you have any concerns for the safety of workers with disabilities?
A: Peckham does not have any unique safety concerns outside of what any other employer has. We monitor incidents just like everyone else. We invest in training our workers well and monitor any shifts in data.
For instance, we have many hearing-impaired forklift operators. We speak with many employers who will not hire hearing-impaired forklift operators, as they cannot hear the backup sirens. We have installed strobe lights on all of our equipment so that in addition to a siren, each truck has flashing lights to alert other employees that a truck is about to enter. I would bet our incident rate is lower than at most other warehouses. It's all in the training.
Q: What must employers do to create an inclusive culture?
A: As employers, we are at an advantage if we shift our thinking from looking at people with disabilities as a burden to thinking about them as a strength for the work force. Disability is just another part of diversity. Every employer should want a more diverse and inclusive environment. We believe that inclusion drives innovation.
Q: What advice would you offer employers looking to get started?
A: Partner with your local vocational rehabilitation organizations to recruit, hire, and retain individuals with disabilities. There are many organizations similar to Peckham that are looking to partner with employers who want to make concerted efforts to hire people with disabilities.
Start small and remember it's a journey. We don't have it all figured out and probably never will; but constantly listening, asking questions, and working toward the goal and mission of treating everyone with respect will yield incredible results.
Even as a last-minute deal today appeared to delay the tariff on Mexico, that deal is set to last only one month, and tariffs on the other two countries are still set to go into effect at midnight tonight.
Once new U.S. tariffs go into effect, those other countries are widely expected to respond with retaliatory tariffs of their own on U.S. exports, that would reduce demand for U.S. and manufacturing goods. In the context of that unpredictable business landscape, many U.S. business groups have been pressuring the White House to pull back from the new policy.
Here is a sampling of the reaction to the tariff plan by the U.S. business community:
American Association of Port Authorities (AAPA)
“Tariffs are taxes,” AAPA President and CEO Cary Davis said in a release. “Though the port industry supports President Trump’s efforts to combat the flow of illicit drugs, tariffs will slow down our supply chains, tax American businesses, and increase costs for hard-working citizens. Instead, we call on the Administration and Congress to thoughtfully pursue alternatives to achieving these policy goals and exempt items critical to national security from tariffs, including port equipment.”
Retail Industry Leaders Association (RILA)
“We understand the president is working toward an agreement. The leaders of all four nations should come together and work to reach a deal before Feb. 4 because enacting broad-based tariffs will be disruptive to the U.S. economy,” Michael Hanson, RILA’s Senior Executive Vice President of Public Affairs, said in a release. “The American people are counting on President Trump to grow the U.S. economy and lower inflation, and broad-based tariffs will put that at risk.”
National Association of Manufacturers (NAM)
“Manufacturers understand the need to deal with any sort of crisis that involves illicit drugs crossing our border, and we hope the three countries can come together quickly to confront this challenge,” NAM President and CEO Jay Timmons said in a release. “However, with essential tax reforms left on the cutting room floor by the last Congress and the Biden administration, manufacturers are already facing mounting cost pressures. A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses—employing millions of American workers—will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.”
American Apparel & Footwear Association (AAFA)
“Widespread tariff actions on Mexico, Canada, and China announced this evening will inject massive costs into our inflation-weary economy while exposing us to a damaging tit-for-tat tariff war that will harm key export markets that U.S. farmers and manufacturers need,” Steve Lamar, AAFA’s president and CEO, said in a release. “We should be forging deeper collaboration with our free trade agreement partners, not taking actions that call into question the very foundation of that partnership."
Healthcare Distribution Alliance (HDA)
“We are concerned that placing tariffs on generic drug products produced outside the U.S. will put additional pressure on an industry that is already experiencing financial distress. Distributors and generic manufacturers and cannot absorb the rising costs of broad tariffs. It is worth noting that distributors operate on low profit margins — 0.3 percent. As a result, the U.S. will likely see new and worsened shortages of important medications and the costs will be passed down to payers and patients, including those in the Medicare and Medicaid programs," the group said in a statement.
National Retail Federation (NRF)
“We support the Trump administration’s goal of strengthening trade relationships and creating fair and favorable terms for America,” NRF Executive Vice President of Government Relations David French said in a release. “But imposing steep tariffs on three of our closest trading partners is a serious step. We strongly encourage all parties to continue negotiating to find solutions that will strengthen trade relationships and avoid shifting the costs of shared policy failures onto the backs of American families, workers and small businesses.”
Businesses are scrambling today to insulate their supply chains from the impacts of a trade war being launched by the Trump Administration, which is planning to erect high tariff walls on Tuesday against goods imported from Canada, Mexico, and China.
Tariffs are import taxes paid by American companies and collected by the U.S. Customs and Border Protection (CBP) Agency as goods produced in certain countries cross borders into the U.S.
In a last-minute deal announced on Monday, leaders of both countries said the tariffs on goods from Mexico will be delayed one month after that country agreed to send troops to the U.S.-Mexico border in an attempt to stem to flow of drugs such as fentanyl from Mexico, according to published reports.
If the deal holds, it could avoid some of the worst impacts of the tariffs on U.S. manufacturers that rely on parts and raw materials imported from Mexico. That blow would be particularly harsh on companies in the automotive and electrical equipment sectors, according to an analysis by S&P Global Ratings.
However, tariff damage is still on track to occur for U.S. companies with tight supply chain connections to Canada, concentrated in commodity-related processing sectors, the firm said. That disruption would increase if those countries responded with retaliatory tariffs of their own, a move that would slow the export of U.S. goods. Such an event would hurt most for American businesses in the agriculture and fishing, metals, and automotive areas, according to the analysis from Satyam Panday, Chief US and Canada Economist, S&P Global Ratings.
To dull the pain of those events, U.S. business interests would likely seek to cushion the declines in output by looking to factors such as exchange rate movements, availability of substitutes, and the willingness of producers to absorb the higher cost associated with tariffs, Panday said.
Weighing the long-term effects of a trade war
The extent to which increased tariffs will warp long-standing supply chain patterns is hard to calculate, since it is largely dependent on how long these tariffs will actually last, according to a statement from Tony Pelli, director of supply chain resilience, BSI Consulting. “The pause [on tariffs with Mexico] will help reduce the impacts on agricultural products in particular, but not necessarily on the automotive industry given the high degree of integration across all three North American countries,” he said.
“Tariffs on Canada or Mexico will disrupt supply chains beyond just finished goods,” Pelli said. “Some products cross the US, Mexico, and Canada borders four to five times, with the greatest impact on the auto and electronics industries. These supply chains have been tightly integrated for around 30 years, and it will be difficult for firms to simply source elsewhere. There are dense supplier networks along the US border with Mexico and Canada (especially Ontario) that you can’t just pick up and move somewhere else, which would likely slow or even stop auto manufacturing in the US for a time.”
If the tariffs on either Canada or Mexico stay in place for an extended period, the effects will soon become clear, said Hamish Woodrow, head of strategic analytics at Motive, a fleet management and operations platform. “Ultimately, the burden of these tariffs will fall on U.S. consumers and retailers. Prices will rise, and businesses will pass along costs as they navigate increased expenses and uncertainty,” Woodrow said.
But in the meantime, companies with international supply chains are quickly making contingency plans for any of the possible outcomes. “The immediate impact of tariffs on trucking, freight, and supply chains will be muted. Goods already en route, shipments six weeks out on the water, and landed inventory will continue to flow, meaning the real disruption will be felt in Q2 as businesses adjust to the new reality,” Woodrow said.
“By the end of the day, companies will be deploying mitigation strategies—many will delay inventory shipments to later in the year, waiting to see if the policy shifts or exemptions are introduced. Those who preloaded inventory will likely adopt a wait-and-see approach, holding off on further adjustments until the market reacts. In the short term, sourcing alternatives are limited, forcing supply chains to pause and reassess long-term investments while monitoring policy developments,” said Woodrow.
Editor's note: This story was revised on February 3 to add input from BSI and Motive.
Businesses dependent on ocean freight are facing shipping delays due to volatile conditions, as the global average trip for ocean shipments climbed to 68 days in the fourth quarter compared to 60 days for that same quarter a year ago, counting time elapsed from initial booking to clearing the gate at the final port, according to E2open.
Those extended transit times and booking delays are the ripple effects of ongoing turmoil at key ports that is being caused by geopolitical tensions, labor shortages, and port congestion, Dallas-based E2open said in its quarterly “Ocean Shipping Index” report.
The most significant contributor to the year-over-year (YoY) increase is actual transit time, alongside extraordinary volatility that has created a complex landscape for businesses dependent on ocean freight, the report found.
"Economic headwinds, geopolitical turbulence and uncertain trade routes are creating unprecedented disruptions within the ocean shipping industry. From continued Red Sea diversions to port congestion and labor unrest, businesses face a complex landscape of obstacles, all while grappling with possibility of new U.S. tariffs," Pawan Joshi, chief strategy officer (CSO) at e2open, said in a release. "We can expect these ongoing issues will be exacerbated by the Lunar New Year holiday, as businesses relying on Asian suppliers often rush to place orders, adding strain to their supply chains.”
Lunar New Year this year runs from January 29 to February 8, and often leads to supply chain disruptions as massive worker travel patterns across Asia leads to closed factories and reduced port capacity.
That changing landscape is forcing companies to adapt or replace their traditional approaches to product design and production. Specifically, many are changing the way they run factories by optimizing supply chains, increasing sustainability, and integrating after-sales services into their business models.
“North American manufacturers have embraced the factory of the future. Working with service providers, many companies are using AI and the cloud to make production systems more efficient and resilient,” Bob Krohn, partner at ISG, said in the “2024 ISG Provider Lens Manufacturing Industry Services and Solutions report for North America.”
To get there, companies in the region are aggressively investing in digital technologies, especially AI and ML, for product design and production, ISG says. Under pressure to bring new products to market faster, manufacturers are using AI-enabled tools for more efficient design and rapid prototyping. And generative AI platforms are already in use at some companies, streamlining product design and engineering.
At the same time, North American manufacturers are seeking to increase both revenue and customer satisfaction by introducing services alongside or instead of traditional products, the report says. That includes implementing business models that may include offering subscription, pay-per-use, and asset-as-a-service options. And they hope to extend product life cycles through an increasing focus on after-sales servicing, repairs. and condition monitoring.
Additional benefits of manufacturers’ increased focus on tech include better handling of cybersecurity threats and data privacy regulations. It also helps build improved resilience to cope with supply chain disruptions by adopting cloud-based supply chain management, advanced analytics, real-time IoT tracking, and AI-enabled optimization.
“The changes of the past several years have spurred manufacturers into action,” Jan Erik Aase, partner and global leader, ISG Provider Lens Research, said in a release. “Digital transformation and a culture of continuous improvement can position them for long-term success.”
Women are significantly underrepresented in the global transport sector workforce, comprising only 12% of transportation and storage workers worldwide as they face hurdles such as unfavorable workplace policies and significant gender gaps in operational, technical and leadership roles, a study from the World Bank Group shows.
This underrepresentation limits diverse perspectives in service design and decision-making, negatively affects businesses and undermines economic growth, according to the report, “Addressing Barriers to Women’s Participation in Transport.” The paper—which covers global trends and provides in-depth analysis of the women’s role in the transport sector in Europe and Central Asia (ECA) and Middle East and North Africa (MENA)—was prepared jointly by the World Bank Group, the Asian Development Bank (ADB), the German Agency for International Cooperation (GIZ), the European Investment Bank (EIB), and the International Transport Forum (ITF).
The slim proportion of women in the sector comes at a cost, since increasing female participation and leadership can drive innovation, enhance team performance, and improve service delivery for diverse users, while boosting GDP and addressing critical labor shortages, researchers said.
To drive solutions, the researchers today unveiled the Women in Transport (WiT) Network, which is designed to bring together transport stakeholders dedicated to empowering women across all facets and levels of the transport sector, and to serve as a forum for networking, recruitment, information exchange, training, and mentorship opportunities for women.
Initially, the WiT network will cover only the Europe and Central Asia and the Middle East and North Africa regions, but it is expected to gradually expand into a global initiative.
“When transport services are inclusive, economies thrive. Yet, as this joint report and our work at the EIB reveal, few transport companies fully leverage policies to better attract, retain and promote women,” Laura Piovesan, the European Investment Bank (EIB)’s Director General of the Projects Directorate, said in a release. “The Women in Transport Network enables us to unite efforts and scale impactful solutions - benefiting women, employers, communities and the climate.”