In our continuing series of discussions with top supply-chain company executives, Marc Althen discusses discusses Penske's role as a third-party logistics service provider and the market outlook for 2020.
Marc Althen is president of Penske Logistics. Althen began his career as a project engineer with Chevron. He came to Penske following Penske's 1988 merger with Gelco Truck Leasing, where Althen had served as a construction director. His first role with Penske was to manage the environmental services department. During the next 20-plus years, Althen took on positions of increasing responsibility, including vice president of environmental services and vice president of administration.
In 2004, he was named senior vice president of administration and procurement for Penske Truck Leasing. In that role, he was responsible for real estate, facilities, energy, telecommunications, vehicle supply, vehicle remarketing, and non-vehicle procurement.
Althen is a member of the Council of Supply Chain Management Professionals and sits on the board of Fleetwash, a company that is majority-owned by Transportation Resource Partners. He is also a board member for several charitable and cultural organizations in the Reading, Pennsylvania, area. He holds a bachelor's degree in chemical engineering from the University of Kentucky.
Q: For those not familiar with your company, can you describe the work of Penske Logistics?
A: We are a third-party logistics provider servicing the automotive, food and beverage, industrial, manufacturing, and consumer packaged goods industries. The majority of our business is operated throughout North America, and we provide six primary services: distribution center management, dedicated contract carriage, regional truckload services, transportation management, lead logistics provider, and freight brokerage.
Q: How do you view the current transportation market and the prospects for 2020?
A: We are cautiously optimistic. We know there is excess trucking capacity in the market, and therefore there are rate pressures. We are also still experiencing a truck-driver shortage, and at Penske Logistics, we are acting on strategies to ensure that we are hiring the best drivers available.
Today, we see more customers and prospects reaching out to us specifically around the main services we offer—transportation management, dedicated contract carriage, and distribution management. Customers are looking to optimize their networks in an effort to reduce their costs. We are always striving to exceed our customers' expectations, and that's what helps us build trust and win business.
Q: What are the advantages of coming to a company like Penske that offers both warehousing and transportation as well as brokerage and other supply chain services?
A: Shippers look to Penske Logistics for business outcomes—rather than products. They are seeking to better serve their customers, which includes their external customers as well as the internal customers or stakeholders that interact with their supply chain team and processes. They want to improve their cost of operations, as measured by KPIs and financial statements. Our ability to incorporate the people, skills, systems, and resources from across our various product lines into a unique solution to meet their very specific needs—ultimately, the ability to deliver a compelling solution—is what keeps them coming back to Penske.
Q: How are your technology investments at Penske helping you to better serve your customers?
A: The market for supply chain software is growing rapidly. Both established players and start-ups are enhancing their platforms and creating new offerings at a rapid pace. For shippers, off-the-shelf software is difficult to configure to meet the needs of their industry, and shippers are struggling to separate the hype from reality in the burgeoning tech space.
IT talent with experience in supply chain systems is very limited, and shippers' internal IT departments, while skilled, tend to be committed to implementing new digital strategies, not supply chain systems. Penske brings best-in-class platforms, speed of implementation, seasoned IT practitioners, and commitments to measureable results that supply chain executives find attractive.
Over the years, Penske Logistics has acquired and implemented the best commercially available software on the market. This is the same software any shipper or third-party logistics service provider can buy. However, Penske has taken additional steps to customize and develop a proprietary solution—the Penske ClearChain technology suite. We've drawn on our experience to invest in the right tools to drive visibility and insight into the supply chain. This includes portals, analytics, dashboards, scorecards and mobile tools. Penske developers have created dozens of supporting applications, informed by our experience working with customers. These apps are integrated with our core systems, offering users a seamless experience.
Q: You have a background working in environmental services. How have you been able to promote sustainability in your role as president of Penske Logistics?
A: We are constantly evaluating and implementing the newest and best technology to drive sustainability in our fleet and logistics operations. On a daily basis, we continue to optimize customer shipments in a variety of ways, and to operate and maintain cutting-edge trucks. That's why for the fourth time this decade, Penske Logistics was honored by the U.S. Environmental Protection Agency for its sustainability efforts, collecting a 2019 SmartWay Excellence Award in the Truck Carrier category. Penske Logistics also attained SmartWay awards in 2018, 2017, and 2013. We are one of 55 truck and multimodal carriers to receive this distinction, representing the best environmental performers of SmartWay's 3,700 partners.
Q: What value to you feel Penske brings to its customers?
A: At the end of the day, we all know that relationships play an important role and it is critical to be a trusted adviser. That's why we are always striving to challenge the status quo and exceed our customers' expectations day in and day out. Some people consider it to be cliché to say that it's our people who make the difference in our solutions, but we don't. We continue to invest in our talent.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use AI-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next 1-3 years. That was followed by self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) that are planned for use within the next three years, specifically for loss prevention.
Those strategies could help improve the brick and mortar shopping experience, since 78% of shoppers say it’s annoying when products are locked up or secured within cases. Adding to that frustration is that it’s hard to find an associate while shopping in stores these days, according to 70% of consumers. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
The survey also identified additional frustrations faced by retailers and associates:
challenges with offering easy options for click-and-collect or returns, despite high shopper demand for them
the struggle to confirm current inventory and pricing
lingering labor shortages and increasing loss incidents, even as shoppers return to stores
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
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.