Material handling companies focus on social distancing
From battery makers to integrators, industry firms continue to find ways to reduce human interaction in the workplace to promote health and safety during the coronavirus pandemic.
Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
Material handling companies continue to focus on social distancing strategies in warehouses and distribution centers (DCs), advancing the trend toward automation that had already been growing even before the Covid-19 pandemic hit this spring.
Faced with new labor challenges and the need to reduce human interaction within the four walls of the warehouse, companies are increasingly turning to their material handling partners for solutions, according to Mark Dumont, senior technical sales representative for Pennsylvania-based battery technology company EnerSys, which makes a range of battery and charging solutions, including for forklifts and other material handling equipment. Dumont points to growing demand for battery technology that can power automated guided vehicles (AGVs) in the workplace—a trend that’s accelerated over the past three to four months. Dumont specializes in EnerSys’ AGV business.
“There is a huge uptick in interest [in AGV technology] and in companies going into it [AGV development and manufacturing] as well,” he explained, pointing to the growing number of AGV developers in the industry over the last few years. “[Less than 10 years ago] there were probably only three or four notable companies that I would call AGV companies. Today, there are 35 to 40.”
Customer interest in such solutions is growing as well, especially since this past spring. Dumont’s colleague Tim Wittig, general manager of motive power specialty products, says EnerSys continues to add resources to its AGV-focused business to accommodate demand.
“Since Covid, we’ve seen very strong orders [for AGV battery solutions] coming in,” Wittig said. “We brought Mark [Dumont] over in 2014 to solely focus on AGVs. In the last six months, we’ve brought on another individual to focus on it as well. Their responsibilities continue to increase, and we continue to add resources to grow the business.”
Dumont and Wittig say that’s because AGVs can help companies reduce their reliance on human labor, a need that has escalated since the pandemic. Before March, it was difficult for warehouses and DCs to find workers due to the near full-employment economy; now, health and safety concerns, among other issues, are making workers think twice about returning to physical workplaces. Both trends are accelerating demand for automation—and AGVs, in particular, because they can be used to move heavy materials throughout a facility without an operator on board.
“Companies have to come up with solutions on how to do this job without hiring more people,” Dumont explained, adding that AGVs “don’t call in sick, they don’t ask for overtime, and they don’t care about breaks or holidays. [An AGV] simply does the job on a continuous basis.”
Incorporating newer battery technologies, such as thin plate pure lead (TPPL) and lithium-ion chemistries, helps as well by reducing the need for maintenance. Such solutions require less maintenance and human interaction than traditional lead-acid batteries, which require frequent change outs, watering, and long charging processes, Dumont and Wittig said.
And reducing human interaction means reducing the spread of the coronavirus.
“An autonomous piece of equipment doesn’t get a human virus—and it can’t spread that human virus to another person,” Dumont said.
EnerSys is also developing wireless charging solutions that aim to further reduce human interaction with batteries and equipment. This summer, the company announced a partnership with electric vehicle charging technology firm Blink Charging Co. to develop high-power inductive charging solutions for the broader transportation market. The solution involves a wireless transfer of energy to the device, similar to wireless smartphone charging.
Because AGVs are highly engineered solutions, battery makers such as EnerSys are often involved at the start of a project, working with equipment manufacturers and customers to develop the right power solution for the application, environment, and other factors. Dumont and Wittig say they expect demand for such projects to continue.
“The AGV business is evolving and changing; it’s a very busy time,” Wittig said. “The same thing is happening on our side of the business. With the advancement of new manufacturing techniques and new research, batteries continually get better.”
Battery and equipment makers aren’t the only ones focused on reducing human interaction in the warehouse, however. Ohio-based material handling systems integrator Vargo introduced a social distancing feature to its continuous order fulfillment execution system (COFE) this summer, aimed at reducing the number of workers that are in a pick aisle at the same time. The system’s algorithms can now be programmed to create a process in which only one person is working a pick aisle at a time, keeping workers at a minimum of one per pick aisle—or eight feet apart—in picking areas, the company said.
The feature helps warehouses and DCs maintain productivity and worker safety protocols at the same time by automating the distancing and integrating it into the overall workflow, Vargo officials said. This helps eliminate slowdowns that often occur when companies attempt to space workers apart.
“For example, if there is one worker in a specific aisle, COFE will send multiple picks to that employee to maximize the time they spend in that pick aisle,” company officials said.
The social distancing feature is available for large-volume warehouses, according to Vargo.
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.”