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.
Canadian parcel delivery company Intelcom is speeding operations and expanding its services thanks to recent multimillion dollar investments in automated material handling systems at its high-volume sortation hubs across Canada. The investments are fueling Intelcom’s transition from a last-mile delivery specialist to a nationwide parcel company that can handle the middle mile as well, making it a more valuable partner to online merchants who are serving residential customers from British Columbia to the Maritime Provinces and everywhere in between.
“The strategy that we’re putting in place is to build a national network,” says Intelcom President Jean-Sébastien Joly, explaining that the company’s automated hub-and-spoke model allows it to serve a wider audience of e-commerce clients by giving them access to a single point of entry at major logistics hubs in Canada. From those automated hubs, parcels can be sorted and delivered to smaller stations throughout the network for last-mile delivery.
The high-tech transformation is a vital part of Intelcom’s growth strategy.
“We’ve always had hubs, but we were doing manual sortation,” Joly explains, adding that it became clear a few years ago that labor challenges would make it difficult for the company to keep up with its retail clients’ delivery demands. “[We also] felt we needed to increase productivity and decrease transit time.”
Automation is helping Intelcom achieve those goals. With more than 70 locations across Canada, the privately owned, Quebec-based company currently delivers about half a million packages per day to 10 Canadian provinces and two territories for local, national, and international retailers using a network of more than 400 independent delivery partners.
AUTOMATING IN ONTARIO
Intelcom began its automation journey about three years ago, when Joly says company leaders anticipated a labor shortage and started exploring ways to increase productivity across their fulfillment and delivery network. The result was a $12 million investment in a new high-volume sorting hub in Mississauga, Ontario, a major logistics and transportation center. Opened just in time for peak delivery season in the fall of 2021, the hub features two automated systems that can convey and sort 12,000 and 9,000 packages per hour, respectively—more than tripling the number the operation previously handled manually.
The system’s pneumatic conveyors are equipped with “push tray sorters”—high-speed, continuous-loop sortation conveyors that use a bar to physically push parcels off of individual trays. Workers first manually feed parcels onto a flat conveyor, which carries them to a point where they are dropped individually onto the trays of the push tray sorter. The trays then continue the journey, with the bars pushing individual parcels into designated cages along the assembly line. Cages are assigned to either a particular last-mile delivery driver for final delivery or are put on a long-haul route for the middle mile. When full or complete, the cages are manually delivered to the hub’s loading areas and prepped for delivery—with final-mile shipments making their way directly to consumers and middle-mile shipments heading to another station in the network, where they will be sorted for final delivery.
Designed by material handling firm Bastian Solutions, a Toyota Advanced Logistics company, the conveyors operate 24 hours a day, powered by a parcel control platform that is integrated with the facility’s broader IT system—a mix of proprietary software and native embedded solutions. A key part of that system is Intelcom’s proprietary route optimization software, which Joly refers to as “the heart of our technology.” The system creates 4,000 optimized routes across Canada every day, based on the destination of each parcel. A staff of nearly 100 technology experts is working to continuously improve the route optimizer and reduce transit times, according to Joly.
“We own the technology, and we keep building on it,” he explains, emphasizing the company’s commitment to investing in technology across all of its operations as a way to accommodate growth and improve service.
Intelcom’s success in Mississauga has fueled further investment. The company will open a $9 million automated sortation hub in Montreal—featuring the same conveying and sorting technology—by the end of this year. Joly says the company plans to deploy similar technology to hubs in British Columbia, Alberta, and the Maritime Provinces over the next few years as well—although the size of the station and its daily package volume will determine exactly what kind of equipment will be installed.
BUILDING OUT THE NETWORK
Beyond the high-volume sortation hubs, Intelcom’s network includes roughly 25 midsized sorting facilities that handle between 5,000 and 15,000 packages per day, and about 45 facilities that process smaller volumes. The company plans to add automated systems to speed processes at the smaller locations as well—and again, the size and volume of the facility will determine what’s installed. Reverse logistics is on the agenda too. Intelcom began handling residential returns about six months ago—drivers will pick up items to be returned at the consumer’s home, providing a label and packaging if needed—and the company will add convenience-store dropoff locations for returns this fall. As of September, Intelcom was processing roughly 12,000 returns per day, according to Joly.
“By the end of [the first quarter of 2023], we will hopefully be in 800 convenience stores, and by the end of 2023, the goal is to be in 2,000 convenience stores,” Joly added.
Intelcom is also looking to expand internationally, under the brand name Dragonfly. The company is already operating under that brand in Australia, delivering to most of the country’s major metropolitan areas. Joly says other attractive markets for Intelcom include South America and some parts of Europe. The goal is to find new markets where the company can solve the problem retailers face in meeting ever-increasing residential delivery demand.
As Joly explains: “We continue to diversify our client base and our services” in pursuit of that goal. And he says automation will be a prime route to getting there.
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.