Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Warehouses throughout North America are stocked to the rafters. The space crunch comes as e-commerce orders have exploded and companies stockpile inventory to avoid running short of goods amid disruptions like pandemic surges and labor shortages. The consequences are significant: Real estate specialists say the run on space in distribution centers is driving vacancy rates to new lows and rents to record highs.
The lack of storage space is making it tough for shippers and logistics service providers to manage their inventory, but some are getting help from the warehouse management system (WMS) software that controls the daily flow of goods through their facilities.
MOVE ’EM OUT, MAKE SOME ROOM
In traditional applications, retailers use WMS software to manage material flows solely “within the four walls” of a building, says John Santagate, vice president for robotics with Körber Supply Chain. That approach balances variables like labor, slotting locations, inventory levels, and fulfillment schedules in order to efficiently funnel goods into individual channels, such as e-commerce orders or store replenishment, inside a single facility.
However, that traditional approach may not be sufficient to keep product moving and free up storage space when the building is at capacity, a condition more and more companies are experiencing right now, Santagate says. With too much inventory in the building, goods that languish on the racks can quickly go out of style or pass their freshness dates, leaving warehouse managers with obsolete inventory taking up space that could be used for new inventory.
One response to that challenge is to minimize the amount of outdated product in storage by using a WMS that tracks and manages items not just by their stock-keeping unit (SKU) codes, but also by a wider range of attributes, such as expiration dates, sales history, or location while in transit, says Dave Williams, vice president of technology solutions at Westfalia Technologies Inc., which makes the Savanna.Net WMS product. By taking that fuller profile into consideration for each product, a WMS can help ensure that products are moved out of the warehouse before they become obsolete. One way it does that is by being “aware” of saleable inventory that may be located at other points in the supply chain—such as suppliers’ stocks or goods in transit—and allocating those items to fill orders, thus allowing organizations to get by with fewer goods within the DC.
A WMS can also help DCs make better use of storage space by deploying more efficient slotting strategies—for instance, by helping them configure their warehouses so that slower-moving products don’t interfere with faster-moving ones, Williams says.
To obtain these benefits, users enter precise data about each type of inventory they hold. “You have to know when a product is going to sell,” Williams says. “Then you can set the density of storage, avoid unproductive moves, incur the least amount of re-warehousing, [minimize] product damage, and utilize as much of your real estate as possible.”
OMNICHANNEL OPPORTUNITIES
Another way companies can leverage a WMS to more fully utilize precious warehouse space is to maintain the inventory used for both e-commerce and store replenishment orders under a single roof, says Adam Kline, senior director for product management at software developer Manhattan Associates. By leveraging the ability to manage goods for multiple channels in a single pool, an intelligent WMS can create “opportunistic” workflows, such as assigning multiple tasks to a warehouse worker in a particular row or aisle of the DC, according to Kline.
“In the old world, retail and e-commerce [operations] were in different buildings, sometimes even with different [enterprise resource planning] systems. But now it’s [all in] one building, [with] one software,” Kline says. “That allows you to understand who’s busy in the warehouse, where space is available, what’s the most intelligent way to get all the goods out on time, and keep that demanding customer at their keyboard happy.” Together, those improvements can lead to more efficient use of space, he says.
When merchandise for multiple channels is stored in the same DC, the WMS can create a “hybrid pick cart” that allows for multiple tasks on a single trip—not unlike asking a spouse to pick up a jug of milk while out running errands. In the warehouse, the software might assign a single employee to pick certain items into totes for retail replenishment, place other items directly into a shipping carton for an individual consumer’s order, and then move a third batch of goods back onto storage racks to replenish inventory for the next shift. Doing all three jobs in a single trip allows for more efficient use of a worker’s time, thereby helping companies move goods through the building more quickly.
EXTEND YOUR VIEW
Yet another way a company can leverage a WMS to help manage overcrowded warehouses is to use a cloud-based platform that extends its view over multiple DCs in different locations. With a multilocation WMS, users can manage inventory that is spread across several sites, reducing the need to carry every item in every DC, says Brad Wright, CEO of Chunker, a startup that provides a short-term warehouse marketplace for owners, tenants, and third-party logistics service providers (3PLs). Accessing inventory stored at different sites also helps users avoid congestion by allocating overstocked goods to be shipped out first.
Perhaps surprisingly, Wright argues that even in today’s tight real estate market, there is a lot of underutilized space available. That’s because vacancy rates are measured from the landlord’s perspective—whether they have leased the entire building or not—but individual tenants frequently have pockets of unused capacity in their own DCs, and they are eager to lease that space for extra income.
There’s no denying that DC space is a hot commodity in 2022, but the right software can help retailers and 3PLs rotate their goods, get orders out on time, and make space for those new pallets that just arrived at the dock door.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
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.”