Warehouse managers are sharpening their focus on the batteries, chargers, and forklifts they are running in light of escalating energy costs—and suppliers are at the ready with solutions designed to maximize productivity and reduce expenses.
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.
Rising energy costs are taking a toll on consumers and businesses alike, and in the warehouse, that means companies are placing a sharper focus on the systems and equipment they are running as well as the power those systems consume. This is especially important when it comes to the forklifts traversing warehouse floors nationwide. As warehouse managers seek ways to get more out of that equipment or upgrade to energy-efficient and productivity-enhancing solutions, they are increasingly turning to equipment suppliers to learn about the latest technologies and automation strategies that can reduce costs.
“[Inflation and higher costs] are accelerating some trends we’ve seen in the industry for a few years now—[especially] demand for automation and new power systems,” explains Bill Pedriana, chief marketing officer for material handling equipment manufacturer Big Joe Forklifts. “[There is a] huge appetite out there for both of those things. In some cases, there is an appetite for both at the same time. Labor costs, power costs, all costs are going up, [and] companies are scrambling for a more efficient means of moving things through their supply chains.”
For many, those strategies begin on the warehouse floor, with new battery technologies, upgraded equipment, and in-depth analyses that can boost equipment performance and deliver data that can help managers make more-informed decisions. Here’s a look at what some battery and equipment makers are doing to help customers reach their energy- and cost-savings goals.
ENERGY-AS-A-SERVICE
Leaders at Quebec-based lithium-ion (Li-ion) battery company UgoWork set out to help industrial customers get a better handle on their energy usage in the warehouse seven years ago, when the company’s founders recognized a common problem in warehouse logistics: Forklift battery maintenance and energy management were taking too large a share of warehouse managers’ time—time that would be better spent focusing on ways to get products in and out of the facility faster and more efficiently. UgoWork’s leaders were confident that switching from traditional lead-acid batteries to Li-ion solutions would solve that problem for many companies—especially those running large fleets—but the higher cost of Li-ion batteries was too much for many customers to swallow.
So UgoWork developed a subscription-based model that removed the upfront costs of purchasing Li-ion batteries and chargers, giving customers a more affordable way to make the switch. For a recurring monthly fee, users get a Li-ion battery and charging station along with access to UgoWork’s cloud-based software system that monitors and manages the battery. The program is similar to subscription-based software-as-a-service (SaaS) programs designed to help companies outsource IT needs.
“The whole idea behind UgoWork and energy-as-a-service [is to] provide a sole supplier for everything related to energy—with the mission to really change how the industry operates,” explains Jean-François Marchand, the company’s director of marketing. “With the energy-as-a-service option, there is no [capital expenditure]. It is a pure subscription model that removes that problem of adoption—because you eliminate the upfront equipment costs.”
The model is gaining steam as companies attempt to manage today’s higher energy costs—largely because it gives them a partner that manages their energy use and makes sure they’re getting the most out of their equipment. Marchand offers an example: A UgoWork customer was using 20 forklifts in one area of its warehouse. Switching to trucks powered by Li-ion batteries improved uptime by reducing the amount of charging time required for the equipment—a standard savings when switching from lead-acid to lithium, according to Marchand. But UgoWork was able to dig deeper into the equipment’s usage—via its energy-as-a-service monitoring system—ultimately discovering that the customer could do the same work with fewer forklifts. In the end, the customer removed seven trucks from that particular section of the warehouse, reallocating them to other areas.
“That’s huge in terms of cost savings,” Marchand said. “It’s one example of what data can bring in terms of real-life savings.”
Using energy-as-a-service also helps customers maintain a more predictable energy budget, according to UgoWork.
“By using a subscription model, they know their fee will be stable, or at least proportional to their energy usage,” Marchand explains.
INSIGHT AND ANALYSIS
For years, battery and equipment makers have provided power consumption studies designed to give warehouse managers a look at just how well their equipment is performing. Such studies—which can be conducted on all types of batteries and equipment—evaluate warehouse workflows as well as examine how much energy a particular forklift, or an entire fleet, is using. The feedback can lead to solutions for better equipment usage and energy management. Pedriana, of Big Joe Forklifts, says he’s seen a renewed interest in such studies as energy costs rise.
“Workflows are central to material handling … direction, flow, quantity, speed of goods through a facility—they are all important,” he explains. “[Customers] are looking at all of that with fresh eyes: How much energy is being consumed? What’s the best sequence of workflows from a power-consumption basis?”
Battery management systems (BMS) also help by continuously monitoring batteries in the warehouse. These electronic devices monitor and regulate the charging and discharging of batteries, tracking factors such as battery type, voltage, temperature, capacity, state of charge, power consumption, and remaining operating time. And increasingly, such systems are tied in with forklift telematics, which collect and analyze interactions between the fork truck and the battery, generating data that can help users adjust workflows and operating conditions to improve efficiency and reduce costs.
“[The data could reveal] where charger placement might be advantageous, for example,” Pedriana explains. “Or, if we’re running [equipment] at peak hours, can we reduce costs by changing when we operate trucks? There are so many tools people can use to really drive down their operating costs.”
LONG-TERM PLANNING
In addition to rising costs, other market developments are complicating warehouse leaders’ efforts to manage their energy needs—particularly, longer leadtimes for new or replacement equipment, according to Trevor Bonifas, general manager of sales, motive power, for material handling equipment manufacturer Crown Equipment. E-commerce and other trends have boosted the volume flowing in and out of warehouses over the past two years, and many warehouse managers are taking the opportunity to add equipment or upgrade to new, energy-efficient systems to handle that volume. Supply chain disruptions and materials shortages mean they could wait a year or more for that new equipment—and in the interim, they have to figure out how to address both current and future demands for power.
“[Customers are telling us], ‘I need to get something new today, but I need something that will work with my equipment that will be replaced a year or two from now,’” Bonifas explains.
He offers an example: If a customer replaces a charger or charging system to boost equipment performance today, that customer wants to make sure that whatever charger it buys will work with any new equipment that arrives in a year. Bonifas says he spends a lot of time figuring out how to best address that problem.
“Ultimately, we go in and talk about how they are using power today, how they expect to use it tomorrow, and we put a device on the equipment to see what they are consuming and what solutions make the most sense today or a year from now,” he says.
That could mean a new charger, an entirely new truck, or even a replacement piece or part that will make the equipment more efficient. For customers using lead-acid batteries today but who plan to switch to Li-ion in a year or two, Crown Equipment offers a flexible solution designed to address both needs—a charger that can charge both types of equipment with the switch of a DC cable and connector.
“Across the entire industry, leadtimes are at historically long levels because of the growth in demand [for new forklifts],” he says. “We have the ability to put in a lead-acid charging solution that has the capability to switch to lithium when the equipment comes in. … That allows some flexibility for those customers who need something today, but say ‘What do I do a year from now?’”
Customers’ growing interest in these and other energy-saving solutions is a sign of the times—and a concern Bonifas and other industry professionals say is here to stay for those on the warehouse floor.
“With the rise in costs, for anything, it comes with a thirst for more data and knowledge,” Bonifas says. “Customers are saying, ‘I’m paying more for this, so I want to make sure I’m getting what’s right.’”
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."