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.
We’ve heard repeatedly over the past two years about how quickly the supply chain landscape has changed, and is changing, in response to shifting consumer buying habits and recent economic forces. And the evidence keeps pouring in.
Technology is the most-cited example of the change, as retailers, brands, third-party logistics service providers (3PLs), and carriers have sought ways to keep up with accelerating e-commerce activity and increased delivery demands. Tech solutions that can help companies better manage the onslaught of orders, automate warehouse and distribution center (DC) functions, and optimize delivery routes are in high demand these days. A report published this spring by industry association MHI underlined those trends, finding that adoption of supply chain technologies is set to explode over the next five years. MHI’s Annual Industry Report, presented during the Modex 2022 show in Atlanta this past March, showed that companies are investing in and adopting new technologies at a much faster clip compared to the more measured pace seen in the years leading up to 2020, when the coronavirus pandemic hit. The report surveyed more than 1,000 supply chain professionals in late 2021 about emerging technologies, innovations, and trends in supply chain, and found that nearly 80% said the pandemic had accelerated supply chain transformation, a key driver of technology adoption and investment. According to the report, the industry will see the following technology adoption rate increases over the next five years:
Cloud computing and storage will grow to 86% from 40%;
Automatic identification technology will grow to 84% from 31%;
Inventory and network optimization tools will grow to 87% from 28%;
And robotics and automation will grow to 79% from 28%.
Investment levels will rise sharply as well. Two-thirds of respondents said they expect to spend more than $1 million on supply chain technology over the next two years alone.
Other recent research underscores the growing demand for supply chain technologies that can help manage change. Two of the biggest areas are fulfillment and delivery. An April report from London-based Interact Analysis estimates that the installment of microfulfillment centers (MFCs), for example, will grow to more than 7,000 by 2030 from less than 100 at the end of 2021, driven primarily by the grocery market. MFCs are small automated fulfillment centers located in close proximity to customers; Interact defines them as standalone facilities of less than 50,000 square feet or those that are installed in the back of a store.
Improving the customer’s delivery experience is also at the heart of the tech trend. A recent report from supply chain technology company FarEye explains how shifting consumer habits have changed supply chain and last-mile logistics strategies for good; the report emphasizes the need for retailers and brands to improve the delivery experience if they want to grow their business. Nearly 40% of the 1,000 consumers FarEye surveyed for the report said they would not give retailers another chance following a bad delivery, and 37% said they had changed their opinion of a brand after a poor delivery experience. Technologies that can provide real-time tracking and order notifications can go a long way toward improving that experience, as just one example.
Managing these trends will become even more important in the years ahead. The FarEye research showed that although pandemic-related restrictions have largely ended, consumers don’t plan to alter their newfound buying habits anytime soon. Although 30% of survey respondents said they expect to do most of their shopping in-person post-pandemic, a considerable number said they expect to continue doing more from home. Thirty-two percent of respondents said they are doing more online shopping since the spring of 2020, and 65% of online shoppers reported preferring home delivery over in-store pickup, for example.
The MHI research describes the change occurring in supply chain tech as a tipping point, in which the industry is moving from evolutionary levels of technology adoption and investment to revolutionary levels. It seems an apt description of an industry dealing with unprecedented change.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.