In an exclusive interview with DC Velocity, Kathy Fulton of the American Logistics Aid Network talks about the supply chain community’s role in disaster response and why the Covid-19 relief effort has been different from all the rest.
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.
For the past 15 years, the American Logistics Aid Network has been on the front lines of nearly every major catastrophe the world has endured. Better known as ALAN, this consortium of transportation companies, third-party service providers, and warehouse operators helps coordinate the logistics community’s response in times of crisis.
Covid-19 has presented a slightly different agenda from the earthquakes, tornados, and famines that the members of ALAN typically address. But as Executive Director Kathy Fulton explains, it’s just another moment for the heroes of the supply chain to shine.
Q: Can you describe the work of ALAN?
A: ALAN works with businesses, nonprofits, and government to harness logistics knowledge, expertise, and resources to serve communities that have been affected by crisis. We do that in a variety of ways. We work with nonprofit organizations to help them find pro bono transportation and material handling equipment. We work with businesses that want to help but may not otherwise have an outlet to do so.
We also provide businesses with information about what’s happening in the affected area. And we work with government entities to help them better understand how business is operating and what’s happening with freight flows and the transportation sector. Government entities then have a better idea of what their response should be. That is what we do. We’re saving lives through logistics.
Q: ALAN was created in response to infrastructure failures in a time of critical need. Can you describe what took place?
A: Sure. Hurricane Katrina brought some unique logistical challenges when it slammed into the Gulf Coast in 2005. Although relief supplies came pouring in from across the country, there were problems getting them into the survivors’ hands. People were hungry and couldn’t get what they needed because either businesses or government couldn’t get the necessary logistics in place.
So, at the Council of Supply Chain Management Professionals’ (CSCMP) annual conference that year, a group got together and said, “Look, we do this year-round. We move products literally around the world every single day. It seems like we ought to be able to use our knowledge and expertise to help solve these challenges.”
That was really the birth of ALAN, which started out as a consortium of 13 industry and trade associations. Today, that’s grown to somewhere north of 30 organizations that we work with on an ongoing basis.
Q: What part of the supply chain do they cover?
A: Everything. We work with everyone from manufacturers through operations and supply chain management and on to the transportation and broker community.
And there are some nontraditional associations we partner with, like the moving and storage industry and the bottled water association because they have logistics assets and requirements. We work to provide the logistics behind the basic things that are needed in any disaster, like food, water, shelter, and medicine.
Q: So unlike a traditional relief organization, you’re not raising funds to buy supplies and ship them. You’re more of a matchmaker that connects relief organizations in need of services or equipment with companies that can fill those needs?
A: Yes, that’s right. The model doesn’t always make sense to people who take a more traditional view of humanitarian relief work because we’re not directly putting products on trucks. We are helping to put somebody else’s product on a truck or in a warehouse.
So we are not procuring things like supplies or equipment. We are literally finding people who need resources, finding people who have these resources, and making an introduction and letting that relationship go from there.
Q: ALAN usually mobilizes in response to disasters in a localized area. In the case of Covid-19, it’s a worldwide event. How is your role different now?
A: Sometime in January and February, even before the coronavirus outbreak reached the U.S., we realized our role had changed because this is not geographically concentrated. It’s not like a storm in the Southeast United States or a tornado that only affects a couple of communities. This is everybody all at once.
The geographic scale of what we’re doing right now across the nation is new for us. But the types of requests are very similar to what we see in any other event—nourishment, hydration, medical care, and shelter. Those are the things people need. Those don’t go away. In fact, some of those things are amplified.
For example, we work with a lot of food banks. Some of those organizations saw a two, three, four, or five-hundred percent increase in requests. That requires additional transportation to move supplies to the warehouse. We’re also getting requests for support for last-mile deliveries. Again, the scale is increased, the intensity is increased, but they’re still the same types of requests that we’ve been seeing for 15 years.
Q: It is a daunting task with all the needs that are there.
A: Just the pace is interesting. It hasn’t slowed down, honestly. Businesses have figured out how to keep toilet paper and other staples on retail shelves for the most part. But the unemployment numbers are staggering, and that’s causing more strain for our primary partners in the nonprofit community.
Q: Have you noticed any particular problems or resource shortages?
A: Right now, there is plenty of available capacity in the transportation networks. The problem is, it may be too much capacity. We are starting to see smaller fleets parking their trucks. The concern is that if we lose those trucks, will we have enough capacity to respond if there’s another major shock?
Another potential trouble spot is the availability of volunteers within the humanitarian space. A lot of the people who volunteer are at higher risk of contracting Covid-19. Nonprofits are having to look for new and unique ways to run their operations because they don’t have that consistent level of volunteers that they’re accustomed to.
Q: We are recognizing heroes of the supply chain in this issue. Could you give us some examples of companies that have gone above and beyond in this time of crisis?
A: Everyone, once they understood the problem, started to look at how they might be able to leverage their available resources. Whatever the core business, they began asking themselves what they could do to support the relief effort. So that means the chemical community and even distilleries have started manufacturing hand sanitizer, which I think is a really creative solution.
We’re also seeing companies whose transportation business has slowed and are looking for ways to keep their employees busy and who want to contribute. So they’re saying, “Look, we may not have commercial product to move right now, but we will help haul personal protective equipment or food or whatever it may be.”
The cool thing about it is the logistics community is right there at the forefront. Many are being hit hard for a variety of reasons, but they are stepping up and serving.
Q: With so many people out of work, food banks serve a critical need right now. Are you seeing demand for material handling equipment like conveyors, forklifts, and racking to help food banks handle the surge in volume?
A: Yes. We’ve gotten requests for conveyors and supplies as well as boxes and stuff like that to package food in. A lot of those requests are for equipment that’s easy to install, such as gravity-feed conveyor, as well as anything to increase throughput, especially when you have a limited workforce and more volunteers.
Q: I’m sure there are people with supply chains skills and assets out there who want to help. How can they find out what’s needed?
A: They can always visit our website, www.alanaid.org. We’ve posted a list of needs there, and we keep it up to date. Or they can just call us.
The other thing is, if they don’t see a request that fits with what they want to offer, let us know anyway. There is a way to contact us on the website with those kinds of offers. We work to match them with someone with a corresponding need.
Q: If someone doesn’t have services or equipment to offer, can they make a cash donation?
A: Yes, absolutely. We operate on a small budget, and that budget has been strained like everyone else’s because of the Covid-19 response. People who want to support us financially can donate through our website. Those funds help us cover our expenses for technology and all of the other things that allow us to coordinate more effectively.
Q: Although the country is reopening, it will still take some time to get back to normal, especially with all the job losses. What do you expect to be the biggest needs for the next few months?
A: Right now, we’re seeing a lot of requests for transportation service—someone to haul the food from the field to the food bank and out to the people who need it. That is definitely going to continue as we go through the summer. We have enough food and we can process enough food, but there are some kinks in the processing supply chain.
Another challenge is that states have different policies for reopening, and those policies can vary from county to county. It can be difficult for someone operating a supply chain to navigate all of the different policy restrictions. So we’ve created a map that shows all of those policy restrictions by county. You can go to www.alanaid.org/map and request access. We have an incredible team of volunteers who are updating it on an ongoing basis. Every time a policy changes, they are making that update, and you can see it there live and in living color.
Q: Are there any lessons we’ve learned from the first wave that could be applied to future waves should there be any?
A: Yes. One of the really cool things about my job is that I have a front row seat to the crisis response. We convene with all of the associations we partner with once a week and talk about problems that affect all of the members.
The policies and the internal ways in which companies are protecting their employees had to be developed in real time and some are here to stay. I would consider all of that part of the lessons learned and lessons applied. I think we also learned from countries that dealt with this before us and have helped shape the response in the U.S.
The biggest thing is that it’s not just during times of crisis that supply chain folks are heroes. However, it often takes a disaster to make people aware of the critical role of the forklift operator or the truck driver in making sure they have the food and the water and the medical care they need every day. It is really cool to see that they’re being recognized now. They have always been heroes, but now the rest of the world knows it.
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."