No one wants to think about the possibility of a product recall. But those in the know say the key to surviving the crisis is to put a recall management plan in place before the worst happens.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
Product recall. The words alone are enough to strike terror in the hearts of logistics and distribution managers. And who wouldn't quail at the prospect of having to retrieve and dispose of thousands (perhaps millions) of individual items—usually with little or no advance notice?
Even companies with reverse-logistics systems already in place may find product recalls daunting. After all, there's so much at stake: In addition to the cost of retrieving and repairing or destroying recalled items, companies may rack up millions of dollars in transportation, inventory, and other costs to replace faulty merchandise.
Most costly of all, perhaps, is the loss of customers' confidence. Just ask Topps Meat Co., which went out of business less than a week after recalling more than 21 million pounds of frozen beef. Or ask Mattel, which now faces a shareholder lawsuit over allegations that it mishandled recalls of unsafe toys.
The infrastructure, processes, and technology needed to protect your company's interests during a recall are complex. They take time to develop, test, and implement. If you wait until a "red alert" occurs, it will be too late. The only way to successfully manage one of these nerve-wracking situations is to launch a pre-emptive strike—putting a plan in place before the worst can happen.
Make a federal case of it
Before you put together an action plan, there's research to be done. "One of the most important things to recognize is that there are very defined disciplines and procedures that need to be followed," says Tom Giovingo, executive vice president of Fidelitone Logistics, which handles recalls for automotive and other manufacturers. "You need to make sure you have fully explored all the requirements and procedures."
Recall dos and don'ts
Here's some practical advice from those in the know:
Jack Walsh, Videojet Technologies Inc.: Keep your product and customer database accurate and up to date. Pay attention to how the product code needs to be read downstream. Don't just put a code on the package; make sure it will serve a purpose and that it will be readable by the time it gets to the consumer level.
Despina Keegan, JPMorgan Chase Global Trade Services: Act quickly when a crisis does arise, and show the federal agency regulating your product that you didn't sit on the information. Your paramount goal should be consumer protection. That's what will help maintain your reputation with customers and protect your brand.
Tom Giovingo, Fidelitone Logistics: Recalls are not the time to be conservative and cautious. If you're unsure of your potential exposure, bring it all back. Step up to the plate and do what you need to do to make it right. You can't put a price on potential lost sales.
Kevin Brady, Satellite Logistics: Most state regulations make the manufacturer responsible for proper disposal of products. Make sure your recalled products don't end up being resold on the gray market and that you can accurately document disposal for regulators.
Krish Mantripragada and Sven Denecken, SAP: Not all suppliers are able to deploy an automated solution to manage the recall process effectively. By using existing automation to deploy standard, template best practices, they can achieve some level of quality-control compliance in manufacturing, logistics, and distribution.
Many of those requirements come straight from the U.S. government's playbook. The Food and Drug Administration, National Highway Traffic Safety Administration, Consumer Product Safety Commission, and several other agencies get involved in recalls. Each has its own rules—and if you don't follow them, you could be in violation of federal law.
If you're unfamiliar with those rules, help is available. Six federal agencies have launched www.recalls.gov, a Web site that consolidates news about recalls by product category and provides links to more detailed information.
Product recalls aren't a U.S.-only problem, of course. "Any company doing business in any market across the globe has to know the rules and regulations that apply in that market. You have to be proactive in knowing the rules for all recalls, whether domestic or international," says Despina Keegan, a senior trade adviser in JPMorgan Chase's Global Trade Services group.
Plug up the holes
Knowing the rules up front lets you design processes with regulatory compliance in mind, says Giovingo. For example, the sorting process has to be paired with careful documentation because manufacturers must report to government agencies how many pieces were received during a recall, and of those, how many were deemed to be suspect or bad.
Effective recall management also depends on making sure now that you have the information you'll need later on. It makes perfect sense: You won't be able to identify the source of a problem if you haven't been tracking the origin and disposition of raw materials all along. And you won't be able to retrieve individual items if you don't know exactly where each one went.
Many companies have a basic system for identifying lot or batch numbers and for tracking cases or pallets, but they may not know precisely who the end customer is for a specific item or what ingredients went into which batch, observes Jack Walsh, director of sales for brand-protection solutions at Videojet Technologies Inc., a provider of marking solutions. Without that level of visibility, they may have no choice but to recall an entire product line just to be safe. "Those are the 'black holes' of the chain of custody," he says. "There's a cost associated with plugging those holes; people have to balance that against the risk and cost of having to conduct a massive recall compared to a specific recall."
The technology to plug those holes does exist. There are systems and software that can identify the sources of raw materials and track them before and during manufacture. Others label or mark goods in a way that will be useful during a recall, enabling tracking of individual orders, lots or batches, and stock-keeping units (SKUs) all the way from manufacturing to the end consumer and back again.
Some systems used for managing recalls are so sophisticated that they can pinpoint an item's exact location hour by hour. Tim Konrad, president of GENCO Supply Chain Solutions' reverse logistics unit, tells this illustrative tale: A consumer who returned a suitcase for repair later realized that she had left a jewelry case with a wedding ring inside. Using bar codes assigned to the suitcase and to the pallet on which it was strapped, GENCO was able to track the pallet and find out where the suitcase went, when it arrived at the processing center, and where it was located inside the facility. Voilà: One wedding ring returned to a grateful owner.
The ring episode shows the value of creating software-enabled associations between each link in the chain of custody. Another example: By associating the lot numbers on medicine bottles with the bar codes or RFID tags on cases and pallets, a manufacturer could trace individual bottles to a specific customer order and a particular delivery location.
An effective recall system should use such associations to collect, process, and share relevant information among multiple sources, says Sven Denecken, vice president of ERP market strategy for SAP. Connecting material tracking with regulatory restrictions helps to ensure compliance. It also helps to create the audit trails required by regulatory agencies as proof that potentially dangerous products have been properly destroyed or neutralized, he says.
One of the most important of those connections is the one between operations and finance; without it, you can't accurately determine the financial implications of a recall, says Krish Mantripragada, SAP's head of solutions management for RFID and supply chain management. That's especially clear when taxes and import duties are involved, notes Kevin Brady, president of beverage industry specialist Satellite Logistics. When alcoholic beverages have been recalled and destroyed, for instance, companies can file for a rebate of the excise tax—but only if the relationship between the product that was destroyed and the taxes already paid on that specific product lot can be accurately documented.
Protect yourself
The final area to consider in your plan is the recall equivalent of the "last mile": Once you have the faulty items back in hand, what will you do with them? The choices regarding product disposition, also known as material recovery, range from repair and resale to recycling of salvageable parts and materials to the total destruction required for regulated materials.
Protecting your company's brand undoubtedly will factor into that decision. "If you're a name brand with a billiondollar marquee, you want discretion when it comes to material recovery," Brady says.
Whatever course you choose, it should be part of a comprehensive, detailed plan that lays the groundwork for handling a recall long before such an event occurs. "You want to be all dressed up and ready to go instead of scrambling," Giovingo says. "Anybody who's been in that kind of negative situation is definitely thankful they took the time to prepare beforehand."
an ounce of prevention
Most of the recalls in the news recently have involved imports from China. Is it possible to prevent quality problems if you're located here and the factory is over there? "Maybe not 100 percent, but you can get pretty close," says Despina Keegan, a legal expert and senior trade adviser for JPMorgan Chase's Global Trade Services group. She advises her clients to be specific about product quality and testing requirements in contracts with suppliers. She also recommends making both scheduled and unannounced visits to check on production: "You can't rely on the product samples you got when you started doing business with a supplier," she says.
Verifying product quality requires a significant commitment. "You have to have systems in place just like we've seen for supply chain security and for checking that working conditions are safe and no child labor is being used," Keegan says.
Knowing exactly who the supplier is can be challenging in China, where layers of subcontractors are common and manufacturing "towns" are swiftly springing up throughout the country. Investigate carefully, remain vigilant, and regularly re-evaluate—and that goes not only for new suppliers and venues but also for long-standing relationships, she adds. The bottom line: "If you can't verify who you're doing business with, you don't have the resources to do it, or you're not allowed to do it, then you have no business doing business there."
The fault may not always be with the supplier, however. Research by professors Hari Bapuji of the University of Manitoba and Paul Beamish of the University of West London (Ontario) found that product design was the most common cause of recalls. Of the 550 toy recalls since 1988, 420 (76.4 percent) could be attributed to design flaws. Only 54 (9.8 percent) of the recalls were attributable to defects such as poor craftsmanship, overheating batteries, lead paint, and inappropriate raw materials.
Importers of Chinese goods may be setting themselves up for failure by focusing on making a product to certain specifications as cheaply as possible, says Sven Denecken, SAP's vice president for ERP market strategy. "They tend to look at it from a money perspective and from the perspective of ensuring that they always get the product on time," he observes. "They are not taking into account the possibility that one kind of supply is cheaper but it could cause product problems later on."
When it comes to your loading docks, safety should be job one.
Occupational Safety and Health Administration (OSHA) data show that a quarter of all industrial accidents happen at loading docks, making this vital, high-activity area a place for vigilance and attention to detail.
“We’re talking about industrial equipment. People don’t get paper cuts here; there can be serious injuries and potential fatalities,” explains Ryan Schaffner, director of sales for loading dock equipment manufacturer McGuire, a division of Systems LLC. Schaffner says there are 7,700 forklift accidents per year at loading docks across the United States: “That’s 21 [incidents] per day. It’s important to protect yourself.”
Protecting employees, vendors, transportation providers, and visitors—anyone who could come into contact with your loading docks—gets a little bit easier when you can identify risks and stay up to date on the latest advances in loading dock systems and equipment. Here are three ways to help ensure your loading docks are as safe as possible.
COMMUNICATE
The biggest accident risk at the loading dock? Early departure of a truck or trailer while a forklift is still inside. The best way to avoid that risk? Good communication and good processes.
“Loading docks are loud, complex environments,” Schaffner explains, noting that in many situations, there’s no clean line of sight or established process for dock workers to communicate with truck drivers coming in and out of the yard every day.
“It’s easy for miscommunication to happen,” he adds. “Ultimately, though, customers [need to] own what happens on their property and in their building. It may be a FedEx driver, but the customer site has to own the safety of the loading and unloading [operations].”
One way to solve the problem is to install a light-communication system that indicates when it’s safe for a truck to enter or leave the dock, and when the driver should stay put. Like traffic signals, dock alerts use red and green lights inside and outside the building—working in opposition—to let both the driver and the forklift operator know the status of the loading or unloading operation. A green light inside indicates it’s safe for the forklift operator to load or unload, and a green light outside lets the driver know it’s safe to pull in or away, for instance. Red lights indicate the opposite.
Truck restraints add another layer of protection and can work in conjunction with light systems. Usually mounted underneath the dock leveler—which is a platform that ensures the safe and smooth movement of goods from the truck to the building—truck restraints hook onto a trailer’s bumper or to a bar underneath the truck, holding it to the building so that the truck can’t pull away without substantial force. Restraints also help eliminate trailer “creep”—which happens when the trailer starts to inch away due to the repetitive motions of the forklifts entering and exiting the trailers. The restraints prevent this and hold the trailer fast to the dock. When the dock leveler is stored and there’s no forklift or worker inside the trailer, a green light tells the driver it’s OK to go.
“Try to increase communication to avoid the incident from occurring,” Schaffner advises, referring to the light system. “The insurance policy is the truck restraint—the physical means of holding you to the building.”
AUTOMATE
Moving from manual to automated loading dock systems is also a good way to improve safety. Dock levelers offer another useful example: Mechanical systems require workers to manually raise and lower the leveler, putting them in close contact with equipment—which can raise the risk of slip-and-fall accidents, among other dangers. Alternatively, air-powered and hydraulic dock levelers utilize pushbutton controls that allow workers to remain at a safe distance from the truck and leveler, reducing the risk of accidents.
Schaffner says more than half of the warehousing industry uses mechanical systems, so there’s plenty of room to convert to automated protocols where it makes sense. Experts at loading dock equipment maker Rite-Hite agree; in a report on industry trends from early this year, the company listed the automation of labor-intensive tasks as one of the top loading dock trends of 2024.
“… manually lifting a loading dock leveler or bending over to throw open a dock door can be taxing on anyone’s back and body. These repetitive motions can lead to chronic pain that stays with workers long after they’ve punched out for the day. In fact, back injuries account for one in five workplace injuries. And 80% of those injuries are caused by manual material handling that requires twisting, carrying, or extending out to reach something,” Rite-Hite said in its report. “This is more often seen inside the facility, but in the last 10 to 15 years has been addressed at the loading dock with the application of pushbutton controls for dock [leveler] operation.”
Such systems help keep workers at the control box, where they are both ergonomically protected and out of harm’s way.
SEQUENCE
Automated systems can also help ensure that loading dock operations are handled in the proper sequence each and every day—another key to safety.
“We encourage customers to look at that—how do we protect everyone to make sure it’s the safest operation [and also that] we’re using things in the proper order every single time,” Schaffner says. “We talk a lot about sequence of operation. And the more we encourage [customers] to buy more powered equipment than manual [equipment], the better.”
Leaders at Rite-Hite concur. Advanced loading dock controls can help “bake” safety into the equation by programming equipment to only work in an “interlocked safe sequence of operations,” according to the 2024 trends report. Rite-Hite uses its Dok-Lok system as an example: The sequence of operations begins when the truck backs in and the Dok-Lok becomes engaged with a rear-impact guard, or a wheel-based restraint is engaged with the rear wheels.
“Once the vehicle is secured, the dock barrier can be stored out of the way [and] the overhead door can be opened and the leveler positioned into the trailer bed,” according to the report. “After loading/unloading, the restraint is not allowed to disengage the trailer until the leveler is taken out of the trailer and stored safely, [the] dock door [is] closed, and [the] safety barrier [is] engaged across [the] dock opening.”
McGuire/Systems LLC offers similar solutions.
“Your restraint has to be engaged before you open the door, [so there is] always a protective layer there,” Schaffner says. “Likewise, you can’t engage the dock leveler until the door is in a fully open position.”
The ultimate goal? A safe and secure loading dock.
CMA CGM will purchase a 48% stake in the company from its current owner, Opportunity Funds. Santos Brasil manages a portfolio of 8 assets on the Brazilian coast, including 3 Container Terminals, 1 Vehicle Terminal, 1 Liquid Bulk Terminal, and 3 Logistic Facilities. These assets are located in the Ports of Santos, Imbituba, Vila do Conde, Itaqui and in Sao Paulo.
Once the acquisition closes, CMA CGM intends to further develop its line calls in the various Brazilian terminals and further improve its offering to Brazilian exporters and importers, thereby responding to increasing demand and better addressing consumer needs.
The move will also enable CMA CGM to offer “seamless connections” between Europe, Asia, North America, and the Caribbean, thus solidifying Brazil's position as a key hub in the group’s worldwide operations and reinforcing synergies with its MERCOSUL Line affiliate.
The deal marks CMA CGM’s latest move to expand its port holdings, reinforcing its position as a leading global multi-user terminal operator with investments in approximately 60 terminals worldwide, the company said.
“I am pleased that the CMA CGM Group has concluded this strategic agreement for the acquisition of Santos Brasil, which operates five terminals in Brazil, including the largest container terminal in the Port of Santos, handling 40% of Brazilian volumes, as well as a logistics company. This significant investment reflects our commitment to strengthening our partnership with Brazil and supporting its growth in the coming years,” Rodolphe Saadé, CEO of CMA CGM Group, said in a release.
A government watchdog group is calling for the Federal Aviation Administration (FAA) to take “long-overdue” action to modernize the nation’s aging, unreliable air traffic control systems, according to the Center for Transportation Policy (CTP).
The GAO report also said that over half of those unsustainable systems are especially concerning, but the FAA has been slow to modernize. Some system modernization projects won't be complete for another 10 to 13 years. But the FAA also doesn't have plans to modernize other systems in need—3 of which are at least 30 years old, the GAO report found.
“News out of the Government Accountability Office highlighting the vulnerabilities of our air traffic control systems is disturbing,” said Jackson Sheldelbower, executive director of the Center for Transportation Policy (CTP). “Pete Buttigieg and the Department of Transportation need to get their priorities straight. We’re urging federal officials to fast-track the repairs and modernization projects necessary to bring air travel into the twenty-first century.”
“This traffic data suggests a relatively small number of bridges see a disproportionate amount of the largest ship traffic. It’s very clear where the heavy traffic is happening and these bridges should be prioritized for more careful and rigorous risk analysis,” Shields said.
To create the study, researchers used data mining techniques to identify the nation’s bridges that are the most vulnerable to a similar strike. First, they collected six years of U.S. Coast Guard data—logs detailing the precise location, heading, speed, and status of every ship traveling through the country’s waters on a minute-by-minute basis. Then they cross-referenced the geolocated shipping information with port data and bridge data from the National Bridge Inventory to determine which large ships passed under bridges. Finally, they built a program to analyze that data set to assess large-ship traffic under more than 200 major U.S. bridges.
The results show that three bridges had—by far—the most traffic from the very largest ships: The Verrazzano-Narrows Bridge in New York City, the Talmadge Memorial Bridge in Georgia, and two San Francisco Bay Area bridges. In addition, bridges with the most traffic from large (but not necessarily the very largest) ships include Houston’s Fred Hartman Bridge and several bridges along the Mississippi River including the Crescent City Connection in New Orleans. Meanwhile, the Francis Scott Key Bridge ranked among the top 10 bridges in very large ship traffic, with on average one ship longer than 300 meters (the size of the Dali) passing under it per day.
Shields cautioned that high ship traffic alone doesn’t necessarily mean a bridge is at high risk for collisions. Other variables that play a role include local shipping channel conditions, along with existing shipping safety practices, and individual bridge protections.
According to Indiana-based Wabash, its TaaS offering differs from traditional leasing because it ensures minimal downtime by providing a holistic solution that supports the full lifecycle of the trailer, from acquisition to maintenance and uptime management.
In addition to its TaaS service, Wabash makes products including: dry freight and refrigerated trailers, flatbed trailers, tank trailers, dry and refrigerated truck bodies, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade processing equipment.
In turn, California-based Kodiak will focus on further developments to “Kodiak Driver,” its autonomous technology. The company last month said it had surpassed 50,000 miles of autonomous long-haul trucking by working in collaborations with other companies such as supply chain solutions provider J.B. Hunt Transport Services Inc. and tire and sustainable mobility vendor Bridgestone Americas.