In our continuing series of discussions with top supply-chain company executives, Loren Swakow discusses changes in the lift truck market, his company’s growth, and the impact of telematics.
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.
Loren Swakow is managing director of Noblelift North America, a China-based forklift manufacturer that hired Swakow in 2016 to bring the brand to the U.S. and Canada. He has since overseen the spinoff of Noblelift Canada into a separate entity with 30 dealers. Noblelift currently has 115 dealers in the United States as well as dealers in Mexico and Colombia.
A life-long Chicagoan, Swakow was president of Scott Lift Truck in Elk Grove Village, Illinois, from 1977 to 2012. He holds a business degree from Carthage College in Wisconsin and an MBA from Northern Illinois University. Swakow is a past president of MHEDA (the Material Handling Equipment Distributors Association) and past president of CITDA (Chicago Industrial Truck Dealers).
Q: How would you describe the current state of the material handling industry?
A: The material handling industry in America continues to flourish. E-commerce requires a lot of products to be moved continuously. We can see our brick-and-mortar stores continue to disappear. Americans are consuming online.
This requires efficient distribution centers. I believe they are driving the market. They need material handling equipment in volume. They require frequent deliveries to keep their stock levels optimum. These trucks coming in are all loaded with material handling equipment as well. The industrial buildings are getting taller to make the most of a smaller footprint. This requires a new style of lift truck that can reach up to 400 inches. This, in turn, requires the owner to buy new equipment. A lift truck that can go up to 400 inches is cheaper than the land to expand to hold extra product.
The wide acceptance of lithium power as the preferred source of energy is driving the market as well. Lithium batteries generally have a 10-year warranty. There are electric trucks that can have 50-degree gradeability. Cleaner, no maintenance, fast charging, opportunity charging, etc. are pushing the electric and internal combustion market to lithium. We are seeing higher and higher capacities as well. With the continual drop in lithium pricing out of China, the lithium lift truck is competing in price with the lead acid truck—we are seeing many cases where lithium can even be less expensive at initial purchase point. Leasing companies see this and are increasing residuals on lithium trucks. A five-year-old lead acid truck needs a battery. A five-year-old lithium truck still has five years of warranty left on the battery.
I feel these two issues—e-commerce and lithium—are keeping material handling growing at a rate faster than the economy.
Q: You have been in the lift truck industry since 1977. What major changes have you seen during your 45-plus years in the business?
A: Some of the biggest changes I’ve seen center on the safety of the driver and the pedestrians in the work area. Blue lights, strobes, headlights, and so forth used to be options. Now they are standard equipment. This helps protect the pedestrian, especially as we move to electric trucks, which are quieter than internal combustion units. The addition of a rear horn button so the driver can sound the horn without having to take his eyes away from the direction of travel is also helping to warn pedestrians of an oncoming vehicle.
Driver safety has been improved greatly as well. Seat belts, including those with ignition lock-out, are common. Speed reduction in turns is standard, reducing rollovers. Speed reduction with forks in the air also helps stabilize the truck. The advancements in safety are removing driver error from the equation and saving lives.
I have also seen the advent of OSHA certification, a justifiable requirement to drive a lift truck. The ergonomics of the lift truck have seen major advances as well. Driver comfort is important. Adjustable steering wheels are standard. Seats have greatly improved too, with multiple settings to adapt to each driver. When I think about the seats we were selling in the 1970s, I wonder how the driver could sit in them for hours at a time. Monitors in the dash now give the driver access to information on the machine’s operating condition.
The second major change I have witnessed would be with electric lift trucks, primarily Class I. We have moved from carbon pile, to contactors, to rectifiers, to solid state—all with the goal of reducing heat production in electric lift trucks and increasing efficiency. Heat is lost energy. The drive motor has seen major improvements as well. From DC to AC, with AC having the ability to put power back to the battery. These new motors also have a very long life span compared to electric motors with carbon brushes.
Electric lift trucks were slowly eating into the market share of internal combustion trucks. Now with the advent of lithium and all its attributes, I expect that replacement of IC trucks by electrics to increase. Lithium is here to stay. We are also seeing higher voltage in lift trucks compared to the 1970s. We have an 80-volt 5,000-pound truck that has twice the voltage of the old 36-volt electric truck. Again, higher voltage is more efficient and has less heat output and longer run times. All of this in a smaller configuration. We are using a lithium iron compound, the most stable and safe compound on the market.
Q: How have telematics and real-time information technologies affected lift truck operations?
A: Information gathering and dissemination has always been an important topic for American business. Telematics came into vogue when the large distribution centers with hundreds of lift trucks needed to keep track of their fleet—not only monitoring the location of the trucks but also tracking critical maintenance and operational information. This can be reviewed in an office without having to inspect the lift truck. This also prevents a lot of major repairs by noting an issue before it becomes crucial. Fleets of lift trucks are expensive. Fleet management is paramount to protect that investment.
With today’s large buildings, you need communication with the driver. Coming back and forth to the office is terribly inefficient. Lift trucks now come with USB ports to power communication devices or tablets, making the drive more efficient. Real-time information sharing between management and the driver promotes efficiency and saves both fuel and time, which translates into money for the owner.
Q: Noblelift has seen tremendous growth in recent years, with sales projected to rise 25% in 2023. To what does your company owe its success?
A: The product is exceptional. Our warranty cost compared to revenue is less than one-half of 1%.
When Noblelift first offered me the job in 2016, I turned it down. I had never heard of Noblelift, and I had a preconceived notion of Chinese quality. They asked me to come over for an interview. After I had personally seen the quality of the workmanship and rigorous inspection processes, I readily accepted the position. I will admit, I was extremely impressed with the quality control and high-tech manufacturing with robotics. I also found out they were building products for many well-respected OEMs, many of which I had represented at one time or another.
Our dealers felt the same way. They would give it a try, as I was offering free returns with no restocking charge. They discovered the same quality and slowly began to embrace the brand. We felt strongly that the brand needed to be promoted, and we have been marketing to achieve that.
China also put a bonus plan in place that promotes our team, so we are all pulling in the same direction. Last year, this amounted to 18% of pay. Morale is good, and financials are shared. We measure ourselves against the previous year’s month. We compare October of 2023 against October of 2022. This format takes cycles out of the comparison and I believe is a good measure of our consistent growth. We have been surpassing the previous year’s month [in terms of performance] on a regular basis for over four years now. With the addition of new products on a regular basis, I expect double-digit growth to continue for years to come.
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."