Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
John Janson’s career journey in logistics began almost 40 years ago, although he didn’t know it at the time. It was 1983, and he had just graduated from college with a degree in communications. While he was hoping to land a job in his field, it wasn’t in the cards. The job market was the tightest it had been in the post-war era, with unemployment in the high single digits. So when he was offered a job in sales by a local trucking firm, Janson accepted it.
That job started him down a path that included stops at a number of major motor carriers before he crossed the fence to work as a shipper—in this case, managing logistics for an Idaho-based tech startup called Micron PC. From there, he went on to manage logistics operations at companies that included MWI Animal Health/AmerisourceBergen, Bodybuilding.com, and now apparel wholesaler SanMar, where he serves as head of global logistics.
Although somewhat unusual, that career trajectory has provided Janson with a number of benefits. For starters, the fence-hopping has given him the perspective of both a buyer and a seller of logistics services. More importantly, perhaps, it has allowed him to cultivate the strong business generalist skill set that’s so often the hallmark of successful logistics and supply chain professionals.
Janson spoke recently with DC Velocity Group Editorial Director Mitch Mac Donald about his long, strange career trip; the “Amazonization” of supply chain; and what the future holds for logistics.
Q: Tell us about SanMar and your role there as head of logistics operations.
A: SanMar is a privately held company based in Seattle, Washington. We are the nation’s largest wholesale distributor of apparel to the “imprinting”—meaning custom printing and embroidering—industry. Essentially, we sell the blank canvas that is then decorated by one of our 75,000 customers in the U.S. and sold as uniforms or “fan wear.” I always tell people that SanMar is probably the largest small company you’ve never heard of and that I can almost guarantee you have some of our products hanging in your closet. If you have something from makers like Port Authority, Sport-Tek, Port & Co., Red House, and so forth, you have something from SanMar.
It’s always interesting to see where our products end up. We recently had that chance when the 49ers pulled on their championship gear after winning the National Football Conference (NFC) Championship Game in January. Those hats and shirts were provided by [the online sportswear retailer] Fanatics, and we provided the blank canvas for Fanatics, meaning that we actually delivered the T-shirts and baseball caps that went to the NFC champions. That’s the more flashy side of the business.
To support the business from the logistics side, we source materials for manufacturing from 22 different countries around the world. We have 10 domestic DCs, so we can basically provide the product to most of our customers within a one-, or at most, two-day transit time. It is a pretty complex operation for a little T-shirt company.
Q: What are your team’s responsibilities?
A: I have a 20-person team. We are responsible for managing all of the global logistics activities at SanMar. We are responsible for getting product from manufacturing sites in 22 countries through our cross-dock operations and all of our distribution points, and then delivering it to our end-of-the-line customers.
Q: Tell us about your career journey. How did you come to hold your current position?
A: Back when I graduated from college, it wasn’t like today—where people are actually going and getting degrees in supply chain and logistics, and targeting this industry for its career opportunities. I graduated from Boise State University in 1983, and the job market was kind of tough at the time. I got hired by a truckload carrier that was based out of Idaho. They offered me a job in sales, even though I distinctly remember telling them that I had never sold a thing in my life and I knew nothing about trucking.
I went from there to Consolidated Freightways and Yellow Freight, and from Yellow Freight, I crossed the fence to go to work for one of my customers. Once I landed on this side of the fence, I really never looked back.
The position was with a startup operation in Boise called Micron PC. We were a direct-to-consumer personal computer company. Over the course of seven years, we went from a startup to a retail company with $3.2 billion in sales. I advanced in that time from a traffic manager to the vice president of supply chain. My time there probably provided me with a better education in logistics than I could ever have gotten in school. It was a fast-growth ride and then an educational ride down. [Micron Technology’s PC division was spun off and acquired by Gores Technology Group in 2001.] Although the ride down was nowhere near as much fun as the ride up, it taught me a tremendous amount that I carried forward into my other positions.
Three years ago, I went to work with SanMar, leading the whole global logistics scene, which is the coolest opportunity I’ve ever had in my life.
Q: So you’ve experienced the logistics game from both sides now, and it seems you’ve developed a very strong generalist business skill set along the way. You really have to understand the business as well as the logistics to support it, right?
A: It is, and it’s funny. People are always asking what my degree was in. I got a degree in communications and that has served me well, because communication is truly what we’re doing. It is about building these strategic relationships. It is about servicing our internal customers and our external customers. And that communication background has been invaluable in leading a global logistics team.
Q: You’ve been in the field long enough to have seen logistics and supply chain management’s star rise, as it went from a back-office function to one that now has a seat in the boardroom. What do you think is driving that trend?
A: I think that is a great question. We just concluded a series of webinars with NASSTRAC on getting your seat at the table, and I do think that companies now get it—that they understand the importance of the logistics arm. I think what more companies have realized is that it really does come down to getting the right product to the right place at the right time and then on to the customer.
Certainly, part of it is what you might call the “Amazonization” of supply chain. What that’s done is to re-set the expectations of the end-user, so that if you’re not focusing on logistics and supply chain, then you’re just not going to survive as a company.
Q: Let’s shift gears and talk about what’s happening in the field from a macro perspective. What are some of the biggest challenges logistics practitioners face in 2020?
A: I think one of them would be customers’ escalating delivery expectations. Today, anything longer than two days is just not fast enough. If they can’t order something in the late afternoon or early evening and have it in two days, they’re not a satisfied customer. So that’s our challenge both now and going forward: How are we going to constantly improve that delivery service to our customer?
I think the other major challenge is the geopolitical turmoil. Businesses operate best in a stable environment, not the kind of volatile times we face right now. Take the tariff disputes with China, for example. As trade tensions have escalated, we’ve moved some of our manufacturing out of China to countries like Myanmar, Pakistan, Cambodia, and Vietnam. While that might solve the short-term problem, it introduces complications in the front end of the process—like the need to find the right logistics service partners in new countries. Everything has gotten a little more difficult.
Q: How important is technology in meeting today’s challenges?
A: I’d say it’s critically important—particularly with respect to visibility. One of the things customers always want to know is when their package will arrive. Likewise, my team here wants to know when an inbound ocean container is going to get here. Technology can provide that kind of crucial information.
Q: We’ve talked a lot about what has changed—emerging technologies, shifting consumer expectations, geopolitical dynamics—over the past 20 years. What hasn’t changed?
A: I think one of the fundamentals that we’ve built our organization on is that strategic relationships matter. If you’re able to develop very strong long-term relationships with your service providers, the strength of those relationships will help you during good times and carry you through bad times.
For example, I think the reason SanMar was relatively unaffected by the 2018 trucking capacity crunch was that we had built long-term relationships with our service providers, and they knew we were in it for the long haul. That’s not to say we didn’t blow up our budget, because we did. However, we did come through it pretty much unscathed, largely because we made a conscious effort to become a shipper of choice.
As for how that went down, we decided early on that this driver shortage was a real deal and would only get worse, so we began working to make sure carriers would see us as a driver-friendly company—one that doesn’t waste drivers’ time when they show up at our facility. They can just drop off a trailer, pick up an empty or pick up a load, and get back out on the road.
Another part of that is letting our carriers know that we’re going to be a good steward of their assets—that we’re not using their trailers for short-term storage and that we’re looking to get those assets back into their hands as quickly as possible so they can continue to do business. I think those kinds of efforts really make us somebody people want to do business with.
Q: It’s time for you to dust off the crystal ball that I know you keep on your desk. What is the next big thing? What is on the horizon that’s going to profoundly change the way we approach logistics?
A: I think one is going to be the continuing escalation of customer expectations and the “I need it now” mentality. I remember sitting on a panel several years ago when the subject of same-day delivery came up. I remember thinking, “Why? Who would ever need something the same day?” And now, we’re talking about two-hour deliveries. I think the immediacy of “I want it now” is going to continue to drive this industry. I think that will certainly be one of the game-changers.
Another is going to be the complications that come with globalization. The planet feels much smaller today than it did 20 years ago—especially for a company like ours that now manufactures in a lot of far-away places. That will put pressure on the logistics side to drive costs out of the supply chain and move merchandise faster.
I think both of those challenges are with us for the long haul—not to mention shorter-term disruptions like the truck capacity shortage or IMO 2020 [the maritime industry’s costly new anti-pollution regulations], which are cropping up with increasing frequency. So you’ve got to be nimble, you’ve got to be flexible, and you’ve got to be ready to adapt to a changing environment. If you can’t adapt, you’re just not going to survive.
Most of the apparel sold in North America is manufactured in Asia, meaning the finished goods travel long distances to reach end markets, with all the associated greenhouse gas emissions. On top of that, apparel manufacturing itself requires a significant amount of energy, water, and raw materials like cotton. Overall, the production of apparel is responsible for about 2% of the world’s total greenhouse gas emissions, according to a report titled
Taking Stock of Progress Against the Roadmap to Net Zeroby the Apparel Impact Institute. Founded in 2017, the Apparel Impact Institute is an organization dedicated to identifying, funding, and then scaling solutions aimed at reducing the carbon emissions and other environmental impacts of the apparel and textile industries.
The author of this annual study is researcher and consultant Michael Sadowski. He wrote the first report in 2021 as well as the latest edition, which was released earlier this year. Sadowski, who is also executive director of the environmental nonprofit
The Circulate Initiative, recently joined DC Velocity Group Editorial Director David Maloney on an episode of the “Logistics Matters” podcast to discuss the key findings of the research, what companies are doing to reduce emissions, and the progress they’ve made since the first report was issued.
A: While companies in the apparel industry can set their own sustainability targets, we realized there was a need to give them a blueprint for actually reducing emissions. And so, we produced the first report back in 2021, where we laid out the emissions from the sector, based on the best estimates [we could make using] data from various sources. It gives companies and the sector a blueprint for what we collectively need to do to drive toward the ambitious reduction [target] of staying within a 1.5 degrees Celsius pathway. That was the first report, and then we committed to refresh the analysis on an annual basis. The second report was published last year, and the third report came out in May of this year.
Q: What were some of the key findings of your research?
A: We found that about half of the emissions in the sector come from Tier Two, which is essentially textile production. That includes the knitting, weaving, dyeing, and finishing of fabric, which together account for over half of the total emissions. That was a really important finding, and it allows us to focus our attention on the interventions that can drive those emissions down.
Raw material production accounts for another quarter of emissions. That includes cotton farming, extracting gas and oil from the ground to make synthetics, and things like that. So we now have a really keen understanding of the source of our industry’s emissions.
Q: Your report mentions that the apparel industry is responsible for about 2% of global emissions. Is that an accurate statistic?
A: That’s our best estimate of the total emissions [generated by] the apparel sector. Some other reports on the industry have apparel at up to 8% of global emissions. And there is a commonly misquoted number in the media that it’s 10%. From my perspective, I think the best estimate is somewhere under 2%.
We know that globally, humankind needs to reduce emissions by roughly half by 2030 and reach net zero by 2050 to hit international goals. [Reaching that target will require the involvement of] every facet of the global economy and every aspect of the apparel sector—transportation, material production, manufacturing, cotton farming. Through our work and that of others, I think the apparel sector understands what has to happen. We have highlighted examples of how companies are taking action to reduce emissions in the roadmap reports.
Q: What are some of those actions the industry can take to reduce emissions?
A: I think one of the positive developments since we wrote the first report is that we’re seeing companies really focus on the most impactful areas. We see companies diving deep on thermal energy, for example. With respect to Tier Two, we [focus] a lot of attention on things like ocean freight versus air. There’s a rule of thumb I’ve heard that indicates air freight is about 10 times the cost [of ocean] and also produces 10 times more greenhouse gas emissions.
There is money available to invest in sustainability efforts. It’s really exciting to see the funding that’s coming through for AI [artificial intelligence] and to see that individual companies, such as H&M and Lululemon, are investing in real solutions in their supply chains. I think a lot of concrete actions are being taken.
And yet we know that reducing emissions by half on an absolute basis by 2030 is a monumental undertaking. So I don’t want to be overly optimistic, because I think we have a lot of work to do. But I do think we’ve got some amazing progress happening.
Q: You mentioned several companies that are starting to address their emissions. Is that a result of their being more aware of the emissions they generate? Have you seen progress made since the first report came out in 2021?
A: Yes. When we published the first roadmap back in 2021, our statistics showed that only about 12 companies had met the criteria [for setting] science-based targets. In 2024, the number of apparel, textile, and footwear companies that have set targets or have commitments to set targets is close to 500. It’s an enormous increase. I think they see the urgency more than other sectors do.
We have companies that have been working at sustainability for quite a long time. I think the apparel sector has developed a keen understanding of the impacts of climate change. You can see the impacts of flooding, drought, heat, and other things happening in places like Bangladesh and Pakistan and India. If you’re a brand or a manufacturer and you have operations and supply chains in these places, I think you understand what the future will look like if we don’t significantly reduce emissions.
Q: There are different categories of emission levels, depending on the role within the supply chain. Scope 1 are “direct” emissions under the reporting company’s control. For apparel, this might be the production of raw materials or the manufacturing of the finished product. Scope 2 covers “indirect” emissions from purchased energy, such as electricity used in these processes. Scope 3 emissions are harder to track, as they include emissions from supply chain partners both upstream and downstream.
Now companies are finding there are legislative efforts around the world that could soon require them to track and report on all these emissions, including emissions produced by their partners’ supply chains. Does this mean that companies now need to be more aware of not only what greenhouse gas emissions they produce, but also what their partners produce?
A: That’s right. Just to put this into context, if you’re a brand like an Adidas or a Gap, you still have to consider the Scope 3 emissions. In particular, there are the so-called “purchased goods and services,” which refers to all of the embedded emissions in your products, from farming cotton to knitting yarn to making fabric. Those “purchased goods and services” generally account for well above 80% of the total emissions associated with a product. It’s by far the most significant portion of your emissions.
Leading companies have begun measuring and taking action on Scope 3 emissions because of regulatory developments in Europe and, to some extent now, in California. I do think this is just a further tailwind for the work that the industry is doing.
I also think it will definitely ratchet up the quality requirements of Scope 3 data, which is not yet where we’d all like it to be. Companies are working to improve that data, but I think the regulatory push will make the quality side increasingly important.
Q: Overall, do you think the work being done by the Apparel Impact Institute will help reduce greenhouse gas emissions within the industry?
A: When we started this back in 2020, we were at a place where companies were setting targets and knew their intended destination, but what they needed was a blueprint for how to get there. And so, the roadmap [provided] this blueprint and identified six key things that the sector needed to do—from using more sustainable materials to deploying renewable electricity in the supply chain.
Decarbonizing any sector, whether it’s transportation, chemicals, or automotive, requires investment. The Apparel Impact Institute is bringing collective investment, which is so critical. I’m really optimistic about what they’re doing. They have taken a data-driven, evidence-based approach, so they know where the emissions are and they know what the needed interventions are. And they’ve got the industry behind them in doing that.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”
That result showed that driver wages across the industry continue to increase post-pandemic, despite a challenging freight market for motor carriers. The data comes from ATA’s “Driver Compensation Study,” which asked 120 fleets, more than 150,000 employee drivers, and 14,000 independent contractors about their wage and benefit information.
Drilling into specific categories, linehaul less-than-truckload (LTL) drivers earned a median annual amount of $94,525 in 2023, while local LTL drivers earned a median of $80,680. The median annual compensation for drivers at private carriers has risen 12% since 2021, reaching $95,114 in 2023. And leased-on independent contractors for truckload carriers were paid an annual median amount of $186,016 in 2023.
The results also showed how the demographics of the industry are changing, as carriers offered smaller referral and fewer sign-on bonuses for new drivers in 2023 compared to 2021 but more frequently offered tenure bonuses to their current drivers and with a greater median value.
"While our last study, conducted in 2021, illustrated how drivers benefitted from the strongest freight environment in a generation, this latest report shows professional drivers' earnings are still rising—even in a weaker freight economy," ATA Chief Economist Bob Costello said in a release. "By offering greater tenure bonuses to their current driver force, many fleets appear to be shifting their workforce priorities from recruitment to retention."