Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Severe weather events have hit supply chains hard in recent years, so as the Atlantic hurricane season looms just two weeks away, many companies are applying some hard-earned lessons to their logistics operations in an effort to avoid disruption and plan for a quick recovery from the next storm.
Traditionally spanning from June 1 to November 30, the six-month span has lately included painful and expensive hits to U.S. roads, rails, and warehouses by hurricanes Florence and Michael in 2018, and by hurricanes Harvey, Irma, and Maria in 2017.
To help businesses take steps to minimize that damage, transportation and logistics provider DHL provides a supply chain risk management platform called "Resilience360" that the company says can help users to predict, assess and mitigate the risk of disruptions. The company on March 25 released its first "Annual Risk Report," listing the top 10 supply chain risk predictions for 2019. Number four declares: "climate change impact heats up," saying that forecasters predict this year could be the warmest year on record, pitting companies against an increasing number of weather-related disruptions.
A forecast from Colorado State University's Department of Atmospheric Science backs that up, saying those disruptions are on track in 2019 to include 13 named storms, including five hurricanes.
While such massive storms are mighty forces of nature, DHL says companies can use technology to mitigate hurricane risk, since storms are usually detectable three to five days in advance through data supplied by weather radar, satellite imagery, and airplanes carrying sensors. "Companies can map their supply chains, see which supplies are where, and what routes they're using," Tobias Larsson, CEO of Resilience360, said in a May 15 webcast. "Then they can see the predicted path of the storm, whether it will impact their suppliers, and note whether those are critical suppliers, who provide high-volume or high-margin products."
Armed with that model, companies can build buffers of backup capacity so they can continue operating even if inventory flow comes to a halt because of flooding, power outages, and other impacts. "Many just-in-time supply chains have very low inventory levels because they are optimized," so they may have to contact alternative suppliers or load some goods into trucks and put their stock on wheels, Larsson said. "You can't mitigate 100 percent of the risk, but you can do better than your competition."
DHL applied many of those lessons to its own practices after Hurricane Maria swamped Puerto Rico in 2017, and the company was scrambling to get its 10 warehouses on the island back up and running, Ewar Rivera, the director of operations for DHL Supply Chain in Puerto Rico, said on the webcast. As a provider of third-party transportation and warehousing services, DHL helped its customers build up inventories, so they had enough "safety stock" to stay in business, even though the movement of goods through the region came to a standstill as Puerto Rico was lacking clean water, electricity, food, and fuel, he said.
Each DHL warehouse has a business continuity plan (BCP) that is drafted with input from customers and from providers of crucial services like internet, fuel, and water. Many BCPs also include pre-agreed standing orders, so a diesel vendor will continue to make deliveries even when communications are down. "We also used catering services to our facilities, so employees could get food while working and even take some home after work," Rivera said. "We were up and running faster than other companies in the area."
Far-flung supply chains mean that essential suppliers, customers, transportation routes, or other dependencies could be located in high-risk areas, spelling danger for their clients thousands of miles away from a storm's path, Travelers said. The insurer provided three points of advice for businesses planning for the upcoming hurricane season:
have a comprehensive contingency plan in place, including back-up suppliers and alternative transportation routes, and make sure suppliers have back-up plans as well.
establish an emergency communication plan for employees and suppliers in case operations are effected.
prepare to monitor social media and have a transparent response ready to address customer concerns, troubleshoot issues and communicate status updates.
Setting priorities before the storm hits is a crucial step in hurricane preparation, according to the American Logistics Aid Network (ALAN), a charitable group that coordinates donations of logistics goods and services to supplement non-profit organizations' response efforts following natural disasters.
In a May 14 blog post comparing storm preparation to the safety pamphlets founds in airline seatback pockets, ALAN executive director Kathy Fulton advised people to "put on your own oxygen mask before helping others," saying that one of the most practical things you can do to help the cause of disaster relief is to be prepared to take care of yourselves and your loved ones.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.