In Person interview: Sean Wallingford of Vanderlande
In our continuing series of discussions with top supply-chain company executives, Sean Wallingford discusses labor, standardization, and the benefits of being a full-service solutions provider.
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.
Sean Wallingford is president of Warehouse Solutions in North America for Vanderlande, overseeing the company’s portfolio of warehouse solutions and systems, intelligent software, and life-cycle services. Before joining Vanderlande, Wallingford was vice president of product management for Intelligrated Software at Honeywell Intelligrated, where he had previously served as the company’s senior director of strategic operations. Wallingford studied electrical engineering at the University of Tennessee and holds a law degree from Northern Kentucky University.
Q: Where do you see the material handling market heading in 2022?
A: Although the growth of e-commerce is not new, the pandemic will continue to accelerate its adoption. We will also see the continued modernization of global supply chains, even as many organizations encounter challenges like labor scarcity and shortages of raw materials that will lead to increased leadtimes and costs. In many respects, 2022 will feel like a continuation of 2021, with the same trends impacting the material handling market.
Q: What is the most significant change you’ve seen during your time in the industry?
A: In North America, there is a shift occurring toward the larger, more integrated and complex material handling systems that are already common in Europe, where the availability and cost of land and labor forced most warehouse operations to embrace automation years ago. Those same market drivers were much less pronounced here, but that’s changing as distribution centers find it challenging to fully staff their facilities and real estate values increase. The pandemic is accelerating this shift.
The other significant change I have seen is the move toward standardized and productized systems. Previously, the only “gating” factor in the design and sale of material handling systems was the imagination of sales engineers. That introduced a lot of risk and often led to long, overly complex implementations. Today, the industry is moving toward a more standardized approach that is still adaptable for specific needs while decreasing the time to go live and providing customers with tangible benefits and realistic expectations for performance, cost, and maintenance.
Q: Vanderlande is now a part of Toyota Advanced Logistics. What are the benefits for your customers of being part of the Toyota family?
A: Our customers are rightfully mindful of the manufacturing supply chain when investing in their material handling systems. Vanderlande, of course, is owned by the experts: Toyota invented lean manufacturing. In addition to having access to their technology, such as automated guided vehicles, we also benefit from their strong financial backing. Our customers are investing in complex systems that will be in use for many years to come, so having a partner with a solid financial foundation is important. We also continually work with Toyota to improve our performance, response times, and costs.
Q: Vanderlande is a full-service solutions provider. What are the advantages of working with a company with a wide assortment of systems and services?
A: To start, the global reach of Vanderlande is a significant advantage. With employees in 100 countries, we benefit from a constant global feedback loop that often provides us with advance notice of developing trends that will impact our customers. Typically, new problems in one area of the world have already been solved somewhere else, so we often have solutions in place that our teams can immediately utilize.
Offering a complete set of solutions is also very beneficial. We don’t have to go outside of Vanderlande for the core components used in our systems. That is a significant risk-mitigating factor and one that enables us to ensure that they always perform at their peak without the finger-pointing that can occur when using software and components that were not purpose-built to work together.
Q: How can automation help solve the current warehouse labor crisis?
A: The labor crisis is real. Most material handling operations today are struggling to fully staff their facilities. Automation helps, and is crucial, because it enables distribution centers to reallocate people to the more complex tasks and roles that exist in all warehouses. It’s also important to use automation to take on the most difficult jobs—for example, ones that are associated with the repetitive stress injuries that prompt many people to leave our industry.
Q: You have experience in operational software. How are AI and machine learning enhancing the software available for today’s warehouses?
A: First, you have to remember that artificial intelligence (AI) and machine learning rely on large data sets that are normalized in order to recognize patterns, build a model that addresses them, and act accordingly. In the past, our industry revolved around custom software, and that by its very nature made it impossible to create data sets at the scale needed to do this. The standardization of systems and software makes that possible, and the more standardized they become, the larger and more useful the data sets get.
Specifically, AI and machine learning make it possible for software to recognize what’s happening in the system in real time. That is where intelligence really comes into play, and it’s what enables modern warehouses to automatically reroute products to avoid congestion, utilize robotic picking, and proactively address the failure of components before breakdowns occur. It’s important to remember that it’s a constant feedback loop, so the systems and the data they draw on improve over time.
Q: Why is the standardization of systems and technologies so important?
A: Predictability and standardization are synonymous with one another. Organizations today need to know what performance their new DC system will achieve, what it will cost to deploy, and how long it will take. Standardization is crucial to answer those questions accurately and to create systems that can automatically adjust to the demands operators place on them. You want to consistently tackle the same problems in the same ways and then scale the resulting practices to additional facilities. That is when you begin to see the full potential of automation.
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
Global trade will see a moderate rebound in 2025, likely growing by 3.6% in volume terms, helped by companies restocking and households renewing purchases of durable goods while reducing spending on services, according to a forecast from trade credit insurer Allianz Trade.
The end of the year for 2024 will also likely be supported by companies rushing to ship goods in anticipation of the higher tariffs likely to be imposed by the coming Trump administration, and other potential disruptions in the coming quarters, the report said.
However, that tailwind for global trade will likely shift to a headwind once the effects of a renewed but contained trade war are felt from the second half of 2025 and in full in 2026. As a result, Allianz Trade has throttled back its predictions, saying that global trade in volume will grow by 2.8% in 2025 (reduced by 0.2 percentage points vs. its previous forecast) and 2.3% in 2026 (reduced by 0.5 percentage points).
The same logic applies to Allianz Trade’s forecast for export prices in U.S. dollars, which the firm has now revised downward to predict growth reaching 2.3% in 2025 (reduced by 1.7 percentage points) and 4.1% in 2026 (reduced by 0.8 percentage points).
In the meantime, the rush to frontload imports into the U.S. is giving freight carriers an early Christmas present. According to Allianz Trade, data released last week showed Chinese exports rising by a robust 6.7% y/y in November. And imports of some consumer goods that have been threatened with a likely 25% tariff under the new Trump administration have outperformed even more, growing by nearly 20% y/y on average between July and September.