Food Logistics January/February 2018

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OCEAN CARRIER TECHNOLOGY

RETAIL AND LABOR TRENDS PAVE NEW PATH FOR WAREHOUSES

UNLOCKING VALUE FROM THE CONNECTED FORKLIFT

Food Logistics

®

Global Supply Chain Solutions for the Food and Beverage Industry

AUTOMATION

EVOLVES TO NEXT LEVEL WAREHOUSES FACE SEVERAL CHALLENGES, BUT AUTOMATION IS HELPING CLOSE THE GAP

THE FLEET MANAGER’S FORECAST

ISSUES THAT WILL REDEFINE THE INDUSTRY ABOUND IN 2018

AUTONOMOUS

TRUCKS: TAKING ON THE

DRIVER SHORTAGE Issue No. 193 January/February 2018

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© 2 018 Utilit y Tr a ile r M a nu fac tu r ing C o.

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We continue to only explore better, while our competitors explore cheaper.

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ON THE MENU

ON THE MENU

OCTOBER 2015 ISSUE NO. 171

Jan/Feb 2018 ISSUE NO. 193 COLUMNS

COVER STORY

FOR STARTERS

Next Stage of Warehouse Automation

Threats to withdraw from the pact draw pleas from the agriculture community.

Today’s warehouses face numerous challenges as customer preferences evolve and talent remains scarce, but automation is helping to close those gaps.

COOL INSIGHTS

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18 TRANSPORTATION

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F act or Fiction: The Hype Behind Self-driving Trucks

Automation is the blue collar worker’s worst nightmare—or is it? Why autonomous vehicles offer the trucking industry an opportunity to address their ongoing driver shortage.

FEATURE

he Fleet Manager’s T Forecast for 2018

As 2018 gets rolling, there are plenty of issues that will redefine the industry in the coming months.

SECTOR REPORTS WAREHOUSING

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4 Keys to Unlocking Value from Forklift Connectivity

Forklift connectivity and fleet management uses technology that is proven to deliver insight into truck utilization, compliance, safety, performance and productivity.

FOOD (AND MORE) FOR THOUGHT

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DEPARTMENTS

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Q&A with Fortna reveals how warehouse operators can adapt to evolving marketplace. OCEAN PORTS & CARRIERS

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T he Technological Revolution of the Ocean Carrier

Ocean carriers are looking for new ways to improve communications, information accuracy, and data acquisition and sharing. The IoT, artificial intelligence and more are making that dream a reality.

T he American Dream Lives

The Tax Cuts and Jobs Act will bring relief to millions of American businesses, none more so than the foodservice industry.

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R etail and Labor Trends Paving New Path for Warehouses

L essons on Optimized Routing from Across the Pond

Much of the massive shift in U.S. food retail patterns will mimic what has already happened in the UK, Europe and beyond.

SOFTWARE & TECHNOLOGY

THIRD-PARTY & REFRIGERATED LOGISTICS

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T rump Administration’s NAFTA Strategy Poses Risk to Farm Trade

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Supply Scan Food on the Move Ad Index

WEB EXCLUSIVES • The Future of 3PLS in the Digital Era: Evolve or Face Extinction foodlogistics.com/20986313

• Cashing in on Manufacturer Fulfillment for E-commerce foodlogistics.com/12385458

• Mobile Apps, Notifications Can Help Food Producers Minimize Recall Fatigue foodlogistics.com/20985587

Published and copyrighted 2018 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher. Food Logistics (USPS 015-667; ISSN 1094-7450 print; ISSN 1930-7527 online) is published 10 times per year in January/February, March, April, May, June, July, August, September, October and November/December by AC Business Media Inc., 201 N. Main Street, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI 53538 and additional mailing offices. POSTMASTER: Send address changes to Food Logistics, P.O. Box 3605, Northbrook, IL 60065-3605. Canada Post PM40612608. Return undeliverable Canadian addresses to: Food Logistics, Station A, P. O. Box 25542, London, ON N6C 6B2. Subscriptions: U.S., one year, $45; two years, $85; Canada & Mexico, one year, $65; two years, $120; international, one year, $95; two years, $180. All subscriptions must be paid in U.S. funds, drawn from a U.S. bank. Printed in the USA.

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FOR STARTERS

FROM THE EDITOR’S DESK

DETAILS

TRUMP ADMINISTRATION’S NAFTA STRATEGY POSES RISK TO FARM TRADE

N SOWINSKI

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ow that NAFTA negotiations have entered into more controversial territory, U.S. agricultural interests are increasingly worried about the lack of progress—and outright tension— surrounding the talks. The fifth round of formal negotiations were held in Mexico City from Nov. 17-21, 2017, with U.S. Trade Representative Robert Lighthizer issuing a statement at the conclusion of the talks that the United States has “seen no evidence that Canada or Mexico are willing to seriously engage on provisions that will lead to a rebalanced agreement.” Obviously, this didn’t go over well with Canada and Mexico, which not only represent two of the United States’ biggest trade partners, but are also the secondand third-largest markets for U.S. agricultural exports. Threats by the administration to withdraw the U.S. from the trilateral trade pact continue to rattle many Republicans and Democrats in Congress as well as the agricultural community, who are pleading with the president to at least “do no harm” during the negotiations. Farmers in Minnesota are one group that would be hit hard if the U.S were to withdraw from NAFTA. Pork, corn and soybeans are among the top agricultural exports the state sells to Canada and Mexico each year, totaling $1.5 billion for farmers of these products. All told, American farmers exported nearly $40 billion in agricultural products to Canada and Mexico in 2017. Meanwhile, our NAFTA partners

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Published by AC BUSINESS MEDIA INC. 201 N. Main Street, Fort Atkinson, WI 53538 (800) 538-5544 • www.ACBusinessMedia.com

aren’t wasting time in shoring up and expanding trade ties with other nations. Mexican officials were in Brussels in late December to meet with European Union officials over the existing EU-Mexico pact. While the recent visit failed to result in a further expansion of the pact, both sides agreed that it would be bolstered this year. According to Alessia Mosca, an Italian lawmaker in the European Parliament who is acting rapporteur on EU-Mexico trade, “The EU is left practically the only big player in the global arena without the U.S., so it’s a necessity to conclude agreements. For this reason there has been a speedup in talks.” Indeed, Mexico is speeding up its efforts to strengthen trade ties with other parties too, including Argentina, Brazil and Asia. For its part, Canada is warming up to the idea of a bilateral trade agreement with China. With a population of 1.3 billion, China is a highly attractive market for Canada’s agricultural exports and various natural resources. While a rip and replace strategy is sometimes the best way to fix something that is hopelessly broken, when it comes to NAFTA, a more thoughtful, measured approach is what’s really needed. The same can be said for U.S. trade policy as a whole. Enjoy the read.

LARA L. SOWINSKI, EDITORIAL DIRECTOR LSOWINSKI@ACBUSINESSMEDIA.COM

WWW.FOODLOGISTICS.COM PRINT AND DIGITAL STAFF Group Publisher Jolene Gulley Associate Publisher Judy Welp Editorial Director Lara L. Sowinski lsowinski@ACBusinessMedia.com Editor John Yuva jyuva@ACBusinessMedia.com Assistant Editor Amy Wunderlin awunderlin@ACBusinessMedia.com Web & Copy Editor Mackenna Moralez mmoralez@ACBusinessMedia.com Contributing Editor Barry Hochfelder Senior Production Manager Cindy Rusch crusch@ACBusinessMedia.com Creative Director Kirsten Wiskus Audience Development Director Wendy Chady Audience Development Manager Angela Franks ADVERTISING SALES (800) 538-5544 Associate Publisher (East Coast) Judy Welp (480) 821-1093 jwelp@ACBusinessMedia.com Sales Manager (Midwest and West Coast) Carrie Konopacki (920) 542-1236 ckonopacki@ACBusinessMedia.com National Automotive Sales Tom Lutzke (630) 484-8040, tlutzke@ACBusinessMedia.com EDITORIAL ADVISORY BOARD Jaymie Forrest, Chief Supply Chain and Commercial Officer, ScanTech Sciences Inc. John Haggerty, Vice President of Business Development, Burris Logistics Robert A. Norton, Ph.D., Professor of Veterinary Microbiology, Public Health and Biosecurity, Auburn University; Coordinator of National Security Initiatives, The Futures Laboratory Jon Shaw, Director of Sustainability and Global Marketing Communications, UTC Climate, Controls & Security Smitha G. Stansbury, Partner, FDA & Life Sciences Practice, King & Spalding CIRCULATION & SUBSCRIPTIONS P.O. Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (847)-291-4816 circ.FoodLogistics@omeda.com LIST RENTAL Jeff Moriarty, InfoGroup (518) 339-4511 jeff.moriarty@infogroup.com REPRINT SERVICES Carrie Konopacki (920) 542-1236 Fax: (920) 542-1133 ckonopacki@ACBusinessMedia.com AC BUSINESS MEDIA INC. Chairman Anil Narang President and CEO Carl Wistreich CFO JoAnn Breuchel Digital Operations Manager Nick Raether Digital Sales Manager Monique Terrazas Published and copyrighted 2018 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage or retrieval system, without written permission from the publisher.

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SUPPLY SCAN

NEWS FROM ACROSS THE FOOD SUPPLY CHAIN Daily Updates at FoodLogistics.com

AMERICOLD OPENS NEW UTAH FACILITY

Cold storage provider Americold opened a new 9.5 million cubic feet warehouse in Clearfield, Utah in December. The new building brings the total capacity of the campus to nearly 21 million cubic feet. The campus plans to employ around 120 associates once fully operational. The new facility features innovative technology that fits the need for a large engine room and on-site ammonia storage. Customers are still able to adjust temperature zones down to -20 degrees Fahrenheit. “This is the first grand opening of the three U.S. facilities for which we’ve broken ground this year,” says Fred Boehler, president and CEO of Americold. “It’s amazing to see the hard work of the local community, our contractors and suppliers, and our Americold team paying off with the opening of this much-needed operation.”

INSTRUCTIONAL TECHNOLOGIES INC. INTRODUCES ELD TRAINING

Instructional Technologies Inc. announced a new course to provide drivers who use electronic logging devices. The course is designed to cover the basics of ELDs, such as logging in and out of an ELD, different duty statuses, ELD responsibilities and reasons for keeping an electronic log, all while allowing carriers to customize training to meet company needs. “Our new introduction to electronic logging devices course helps ease the stress of using this new technology, saving drivers’ time and reducing frustration. Carriers can also use the course to be assured that their operations will be in compliance with the ELD mandate,” says Nathan Stahlman, COO at ITI.

NEW MEXICO’S GREEN CHILES LEAVES FARMERS SCRAMBLING

The New Mexico chile has always been a staple in the state, being a main ingredient in many dishes. Since growing in popularity, officials have worked hard to improve the crop’s brand outside of the state. However, demand is starting to outgrow supply. Restaurants are struggling to make it through the year with their locally grown stashes. To avoid running out, they’re starting to look toward Mexico to meet their needs. One of the problems contributing to the limited supply are the droughts that New Mexico often faces, but also the fact that the crop is so gentle that it needs to be hand-picked, something that most people aren’t willing to do.

TRUCK DRIVER TURNOVER CONTINUES TO RISE

Driver turnover has risen from 71 percent to 90 percent over the last three-quarters, a 27 percent increase for large truckload carriers, according to a Driver iQ survey designed to better understand and measure recruiting and retention in the truckload sector. Driver iQ polled its customers, which include 23 of the top 25 truckload carriers.

AMAZON OPENS “GO” STORE

More than a year after it was introduced, Amazon’s concept store, Amazon Go, will open in Seattle to the public. Shoppers will be able to scan their smartphone with the Amazon Go app at a kiosk, pick out the items they want and leave. With the combination of computer vision, machine learning algorithms and sensors, the store can tell what people have purchased and charge it to their Amazon accounts. If someone were to put an item back on the shelf, they would not be charged. Even though the store is without cashiers, it still has employees to make food, stock shelves and assist customers. The Amazon Go store adds to the company’s growing physical store presence and its expansion into the grocery industry after its purchase of Whole Foods last year.

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SUPPLY SCAN

NEWS FROM ACROSS THE FOOD SUPPLY CHAIN Daily Updates at FoodLogistics.com

COMPLIANCEMATE LAUNCHES TEMPERATURE AND HUMIDITY SENSORS

AMAZON LEADS ONLINE GROCERY MARKET

CM Systems’ ComplianceMate recently introduced new temperature sensing equipment utilizing the LoRaWAN wireless communications portal. The new device challenges Bluetooth and WiFi devices in commercial kitchens by transmitting through stainless steel, insulated coldholding units and concrete structures. One of the new features that the sensor offers is an extended lifeline by using lithium ion batteries. “We are committed to remaining the technological leader in the food safety industry,” says Steve Getraer, president of CM Systems. “This new LoRaWAN sensor developed with Laird continues our efforts to enhance our solutions, enabling our customers to improve their food safety profile results for greater peace of mind, while improving ROI and operational effectiveness.”

In 2017, Amazon ruled the United States online grocery market with 18 percent of its share, doubling supermarket staple, Walmart, according to marketresearch.com. Cold drinks are currently one of Amazon’s best selling food/beverage items, growing 65 percent over the last year. That number could have grown after the purchase of Whole Foods, but 90 percent of the 365 Everyday Value items sold out once the retailer started selling the Whole Foods private label online.

U.S. GROCERS PLAY TECHNOLOGY CATCH UP

Retailers continue to lag behind Europe and Asia in using technology to make shopping more time efficient. As technology continues to mature, grocers are attempting to find practical ways of implementing them within stores. Retailers aim to have scanning devices, smart shelves that light up to show where the product you’re looking for is and self-driving carts in their stores. “All around the world people want to save money and they want to save time,” Walmart CEO Doug McMillon said during a keynote speech at the National Retail Federation’s Big Show. “We want to foster a culture that supports change and helps us go along the journey we’re all on, which will lead to even more change in the future.” As buying online and picking up in store becomes more popular amongst consumers, technology has to advance with it, and grocery stores are continuing to roll out that change.

COCA-COLA AND MCDONALD’S AIM TO BE GREENER

Both Coca-Cola and McDonald’s announced in January initiatives to reduce waste and increase the use of recycled materials for their packaging. McDonald’s also pledged to offer recycling bins in all of their restaurants worldwide by 2025. For its part, Coca-Cola promised to make bottles with 50 percent recycled content by 2030. The twin announcements signal a new era in consumer brands taking responsibility for their packaging with an eye toward sustainability.

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SUPPLY SCAN

NEWS FROM ACROSS THE FOOD SUPPLY CHAIN Daily Updates at FoodLogistics.com

FOR THE RECORD: FL100+ CORRECTIONS LOADDELIVERED AND WISE SYSTEMS Food Logistics’ November/December issue featured the 2017 FL100+ list. Regrettably, there were two mistakes that required corrections. Chicago-based LoadDelivered crafts their technology solutions (such as Nucleus) for each individual customer,

tailoring it to fit their precise needs. They integrate with their customers’ systems in as little as 24 hours and build custom robots that help manage their loads from start to finish. Wise Systems’ offerings provide a mobile technology solution capable of routing

and scheduling as well as predictive analytics. With dynamic, real time optimization, Wise Systems can deliver visibility and intelligence to help fleets dramatically reduce late deliveries (over 80 percent) while simultaneously increasing mileage efficiency (over 15 percent).

REPORT HIGHLIGHTS AGRICULTURE RISKS OF US-UK TRADE DEAL

A report by the UK-based charity Soil Association highlighted risks for U.S. farm goods producers in the proposed trade bill between the United States and United Kingdom in the post-Brexit era. The top three concerns from the UK’s perspective were the selling of chlorinated chickens, hormone fed beef and pork produced with additives capable of crippling the pigs. The group fears that there will be pressure to get food from the United States, creating a concern that food standards would be compromised in order to get a better deal. A UK government spokesperson said: “We are committed to a mutually beneficial economic trading arrangement with the U.S. We have been clear that the UK will maintain its own high animal welfare.”

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

SOUTH CAROLINA PORTS AUTHORITY SEEKS $5 MILLION FOR NEW TERMINAL

PIZZA HUT PARTNERS WITH TOYOTA TO EXPLORE FULLYAUTONOMOUS DELIVERY VEHICLES

Toyota, the world’s top automaker, and Pizza Hut, which serves and delivers more pizzas than any other pizza restaurant in the world, have forged a global partnership to explore the future of pizza delivery and other initiatives to improve mobility around the world. Toyota unveiled designs of a self-driving concept vehicle called e-Palette in January at the Consumer Electronics Show (CES) in Las Vegas, and Pizza Hut is one of the founding members of a new “mobility service business alliance” that also includes Amazon, Didi, Mazda and Uber. The alliance will create a broad-based ecosystem of hardware and software support designed to help a range of companies utilize advanced mobility technology to better serve customers. Toyota plans to implement testing of the e-Palette Vehicle Concept in several regions, including the United States, as early as 2020. Along with working together on autonomous delivery solutions, the companies will immediately begin working on plans to improve the existing driver/delivery ecosystem. Starting in early 2018, Pizza Hut and Toyota will jointly test dual communication technology in Pizza Hut delivery vehicles to capture data on driver patterns and behaviors. Better data will result in improved performance for both companies, optimize the safety of delivery and enhance operations.

The South Carolina Ports Authority wants $5 million for a new terminal along the Savannah River. According to The Post and Courier of Charleston, SCPA CEO Jim Newsome says the Jasper County facility will be needed when the main terminal in Charleston reaches capacity. The proposed Jasper Ocean Terminal (JOT) is a joint venture with the Georgia Ports Authority and would be constructed on the South Carolina side of the river. The additional money would go for design work and obtaining permits for the effort. The SCPA reported that 2017 was a record-breaking year in terms of container volume growth, which rose by 9 percent, with 2.2 million TEUs handled.

DAT SOLUTIONS’ MONTHLY FREIGHT REPORT

Freight Keeps Trucking into 2018 By Mark Montague Mark Montague is senior industry pricing analyst for DAT Solutions, which operates the DAT® network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates and routing for more than 30 years. Montague is based in Portland, Oregon. For information, visit www.dat.com.

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This time last year the truckload freight market was settling into a typically softer Q1 pattern. In January 2017, the national average spot line-haul rate for reefer freight was $1.70 a mile, compared to the average contract rate of $1.86. There were 7.3 available reefer loads for every truck posted on DAT load boards—a little high for January but not abnormal—and the load-to-truck ratio was trending downward like it almost always does going into February. For all intents and purposes, 2017 was off to a lackluster start. It ended, however, with record freight rates and extremely tight capacity. Some highlights: In December, the reefer load-to-truck ratio was 14.1 loads per truck, up 73 per-

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cent compared to December 2016. The national average line-haul rate for spot reefer freight was $2.15 a mile, 39 cents higher than in January and 15 cents higher than the average contract rate. Line-haul rates do not include a portion for a fuel surcharge, and diesel prices rose steadily in 2017. The fuel portion increased from 25 cents per mile at the start of the year to 31 cents in December. The DAT North American Freight Index achieved record highs throughout most of 2017 and in June hit its highest point in three years. In September, demand for truckload capacity experienced

the largest year-over-year increase since 2010, when the economy was emerging from a recession. Today those crazy-high ratios and rates have started to settle into a more normal pattern. But watch out. Things looked pretty unremarkable at this time last year.

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

RISING TRANSPORTATION RATES SQUEEZING FARMERS ICE CREAM THE REASON FOR COLD CHAIN GROWTH?

Ice cream and frozen pizzas are some of Amazon Fresh’s best-selling products. These items indicate the need for temperature-controlled distribution. The cold chain industry is starting to boom because it was something that Amazon, the world’s largest online retailer, had been lacking in the past. The company aims to be closer to the customer, thus shortening distribution time. Customers are able to refuse products if they don’t come in good condition, however. Companies are determining whether or not it’s cost effective to spend extra money to ship via the cold chain, saving money by avoiding waste and claims of damaged goods.

Trucking officials say they expect freight rates to continue rising for the short term, creating a concern for agriculture producers across the United States. According to the USDA, shipping from coast to coast has increased by nearly $2,000, and truck rates for fresh food are making a 25 percent jump. The increase in trucking costs can be blamed on two major factors: a lack of available trucks and a shortage of drivers. A third reason may rest with the implemented federal requirement to install electronic logging devices (ELDs) into all trucks to better track driver hours of service. Shippers say retailers are slow to accept and pass-through increased transportation costs, and challenges related to driver shortages only further the problem. Agricultural producers say with low commodity and food crop prices, an increase in shipping costs may be a burden too big to handle.

HAWAII MAYORS COMMIT TO 100 PERCENT RENEWABLE TRUCKING BY 2045

Hawaii’s four mayors made a joint commitment in December to take the state’s ground transportation off of fossil fuels. The mayors imagine a future where within 28 years, all cars, trucks, trains and buses will be fueled by renewable energy across the state. That means Hawaii would no longer ship oil into their ports to move food from the farm to the dinner table. It also means when residents hop on the bus to go to work, their ride won’t pollute the air they breathe.

PORT OF LOS ANGELES BREAKS ALL-TIME CARGO VOLUME RECORD IN 2017

In the Port of Los Angeles’ 110-year history, it moved the most cargo it ever has in 2017, racking up 9,343,192 TEUs, a 5.5 percent increase over 2016’s record-breaking year. “Two thousand seventeen was a year beyond expectations but it was not by chance,” said Port of Los Angeles executive director Gene Seroka. “Our growth is a direct result of a concerted, multi-year effort by the port and its many partners to maximize efficiency throughout the supply chain. All the collaborative work by a broad range of global maritime stakeholders has delivered these remarkable results.” Supply chain efficiencies implemented by the Port in 2017 included technology upgrades such as the “Port Optimizer” digital information portal. The optimizer accumulates key cargo data online to facilitate better cargo tracking, projections and productivity. Infrastructure upgrades continue to boost the port’s service to larger ships, as well as to more efficiently facilitate cargo movement throughout its terminals. “The cargo volume for 2017 reflects the importance of the Port of Los Angeles, not just to the regional economy but the nation,” says John McLaurin, president of the Pacific Merchant Shipping Association (PMSA). “The record volume could not have taken place without the hard work and cooperation of everyone in the supply chain.”

HEALTHY TRAILER LLC OFFERS NEW SANITARY OPTIONS FOR FRESH PRODUCE TRAILERS

Companies are required to use trailers that are clean and in sanitary conditions. Salinas, California-based Healthy Trailer LLC recognized that companies needed a greater level of assurance that cleaning practices were truly getting the job done. Based on best practices and technologies currently used in healthcare and food industries, Healthy Trailer designed an interior trailer cleaning service that combines a three-step process that begins with a chemical-free automated cleaning cycle, followed by a robust dry cycle, and finishes with a UV treatment engineered specifically for Healthy Trailer by UV sanitation experts to kill dangerous human pathogens that can collect on food trailer surfaces. www.foodlogistics.com

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COOL INSIGHTS

BY PHIL INGHAM

LESSONS ON OPTIMIZED ROUTING FROM ACROSS THE POND

L INGHAM

Phil Ingham is the support director at Paragon Software Systems, the UK’s leading supplier of routing and scheduling optimization software.

 Dynamic route planning and execution tools can help food retailers stay ahead of the complex and everchanging industry.

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et’s say you’re taking your regular commute home from work via train. On board, there are easily-accessible touchscreens on which you can order and pay for ingredients for tonight’s dinner or a microwaveable prepared meal. Not long after, you arrive at your local stop, drop in to the retail outlet close by, pick up your order and head home. Sound futuristic? It’s been happening in South Korea for five years. Or consider the notable advent of ingredient-and-recipe meal kit services that have sprung up recently like shitake mushrooms— Blue Apron, Hello Fresh, Home Chef, to name just a few. In the United Kingdom, customers can now choose between ordering delivery at home, as their American cousins are obliged to do, or picking up a box of ready-to-cook ingredients at a convenient retail store. In the UK, for more than 10 years now, established large supermarket chains have been offering customers much smaller outlets in densely populated areas with great success. Add to that a growing customer demand for fresh, often locally sourced food, and there’s been a revolution in refrigerated food distribution. All

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indicators point to a similar shift in consumer food-shopping patterns in the United States. Food suppliers will be faced with a demand for more frequent, less predictable deliveries, while continuing to drive costs down. What can distributors of chilled food products learn from their counterparts across the ocean? An important priority has been to shift from fixed truck delivery routes to a dynamic routing strategy. With dynamic routing tools, companies can use powerful mathematical algorithms to master the vast complexity of possible multi-stop route plans and flex quickly to adjust those plans when needed. Furthermore, delivery time windows are shrinking. One reason is that smaller outlets inevitably mean smaller staff teams who are operating the cash register and/ or stocking shelves, as well as handling deliveries. That means far smaller tolerances when it comes to delivery times, because no one wants to be left waiting for a truck that hasn’t arrived while there is a line of customers out front. Retail outlets increasingly need real-time information about ETAs, communicated proactively by the execution software, accurate to the minute. Food retailers that adopt dynamic route planning and execution tools will stay ahead of this volatile complexity. Take the example of British grocery distributor A.F. Blakemore Logistics, which trimmed 600,000 miles off its delivery routes and was able to make a 10 percent reduction in its fleet after implementing a dynamic routing and scheduling solution. Other food distributors have been able to make smart decisions

about the locations of warehouses, the size of trucks they need, and even whether it would make sense to switch from palletized delivery to roll cages (which take up more space, but are easier and quicker to handle at point of delivery). They can do this all without spending a cent, using the modeling capabilities of sophisticated route optimization software in order to run myriad what-if scenarios. Meanwhile, they can make sure every truck mile counts, maximizing the assets and processes already in place, while minimizing the effect of the pressing current driver shortage. Other benefits include being able to automatically feed driver hours of service restrictions, time-of-day constraints in densely populated areas, receiving dock hours and a host of other important elements into the software’s algorithm. The plain fact is that most food distribution companies are already struggling to come up with a workable, flexible route plan for delivery trucks. Anticipating the coming changes in customer demand, retail outlet size and sourcing patterns mean dynamic, optimized routing will become an essential competitive factor. Using all assets dynamically and efficiently involves ensuring that routing plans are executed and continually improved by constructive, ongoing interaction between the teams executing the plans and those planning them. That way, the delivery tail isn’t wagging the product dog, and you can concentrate on delivering excellent customer service and retaining a competitive advantage. www.foodlogistics.com

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COVER STORY

BY JOHN R. YUVA

NEXT STAGE OF

WAREHOUSE

AUTOMA

Today’s warehouses face numerous challenges as customer preferences evolve and talent remains scarce, but automation is helping to close those gaps.

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W

arehouse automation is driving efficiency throughout the supply chain by helping the food and beverage and other industries meet the ever-changing challenges presented by today’s fast-paced, consumer-centric global economy. As companies strive to deliver products

faster and more accurately, they are turning to automation at each stage in the warehouse process. Automation is a clear sign that it’s not your father’s warehouse anymore. Autonomous mobile robots (AMR), automated guided vehicles (AGV), automated storage and retrieval systems (AS/RS), and

www.foodlogistics.com

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MATION conveyor systems are transforming warehouses, and it’s expected that the trend in warehouse automation will grow in the years ahead. Automated processes also help companies maintain flexibility to meet current and future demands. Some of the specific challenges that warehouse automation is

www.foodlogistics.com

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addressing include:  Growth in e-commerce, increased SKUs and need for greater accuracy  Better space utilization for a more efficient footprint  Improved workforce strategies for a shrinking labor pool and the need for qualified workers.

E-commerce Changes Everything Many experts agree that at the heart of the growth in warehouse automation is the e-commerce boom, whether it’s in the B2C or the B2B space. A whitepaper by Honeywell Intelligrated notes that the United States has experienced

 A WITRON engineer works on a controls cabinet for tray conveyors.

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COVER STORY

continued

26 straight quarters of year-overyear e-commerce sales growth at or near 15 percent. And much of the customer experience Years ago, in e-commerce centers on we saw orders for fulfillment operations. full pallets, then E-commerce is affecting it was ordering warehouse operations as by the case, and demand for smaller quannow we are seeing tities grows. No longer are customers ask for warehouses only supporting single pieces to a single client or moving full come out of the pallets to one store or diswarehouse.” tributor. The challenge now T.J. Fanning, vice president is to fulfill an e-commerce consumer goods for Swisslog order or small-piece package order, says T.J. Fanning, vice president consumer goods for Swisslog. “Years ago, we saw orders for full pallets, then it was ordering by the case, and now we are seeing customers ask for single pieces to come out of the warehouse.” This shift means increased labor, and greater concerns about accuracy. That’s why many companies are looking at their omnichannel fulfillment options. Fanning says: “Now they are asking, ‘Can I fill this e-commerce order out of a store? Do I perform grocery pickup out of a much smaller facility?’” The proliferation of SKUs, complexity of orders for fulfillment, various delivery mechanisms, and

differing recall processing methodologies are also contributing to the trend toward increased warehouse automation, explains Dave Williams, vice president of software development for Westfalia. “These issues are making it clear that everyone in the supply chain needs to

work closer to meet the expectations of the end customer. Whether it’s AS/RS, robotics, simple labeling applications or new, innovative ways of moving products from one place to another, Williams says automation can “smooth out, simplify and make warehouse processes more efficient.” The trend to increased SKUs and faster deliveries is strongly impacting the food and beverage industry, says Kevin Darby, automated systems solutions manager for Advance Storage Products. Using soda as an example, Darby says in the past, many warehouses would send 24 or 25 pallets of the same item to a distributor. Now, of those 25 pallets, only 10 are of a standard cola, and there are six to eight other flavors or varieties that the customer wants as part  Order selectors provide case pick to conveyor using Dematic software at the Tropical Cheese temperaturecontrolled warehouse.

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www.foodlogistics.com

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 Rover can adapt to any size warehouse no matter size constraints, and enables storage locations of more than 20 pallets deep.

of the delivery, he says. “We don’t have a forklift operator pulling full pallets, now we have people picking partials,” he explains. “The whole warehouse operation is changing.” And this change is prompting concerns over order fulfillment accuracy. “When a mistake is made in e-commerce, it’s a $25 mistake, he explains. “You can lose all profitability on that product. So the need for accuracy is much more dramatic, which is why automation is getting more attention.” Automation results in a lot fewer mistakes, he says. And the use of scanners and automated verification processes helps warehouse operations to catch any mistakes before products are shipped.

Making Best Use of Space The challenges presented by e-commerce also put a strain on warehouse and distribution space that was built to accommodate the movement of large pallets of goods www.foodlogistics.com

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and merchandise, says John Clark, product marketing, mobile automation for Dematic NA. “Automated storage solutions help with space utilization because they allow for dense storage and maximized space,” he explains. An automated warehouse with a high-density configuration means a smaller building footprint. Experts agree that companies and warehouse operators are not only seeking greater density within their facilities, but also looking to build warehouses closer to population centers to cut down on transportation time and costs. Companies are continually challenged to configure their warehouse operations in a “much different way than they did five years ago,” says Williams of Westfalia. He says this is especially true in the food and beverage industry because of needs like optimized freezer space, temperature-controlled buildings, and 3PL processing. Automation systems allow warehouses to make every inch of

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COVER STORY

 RK Logistics, a Fetch Robotics customer, uses autonomous mobile robots for greater efficiencies in its warehouse.

continued

space count because the systems allow greater and easier access to products stored in greater density. Matt Rivenbark, executive sales manager at SSI Schaefer, says automatic pallet high-bay warehouse (HBW) systems, with heights up to 140 feet, help use a building’s footprint more efficiently. “An HBW can provide storage capacity to allow efficient production for even smaller to medium batches in order to avoid too many changeovers in productions,” he adds. Experts agree that the only place to go today for additional space in many facilities is up—and only automated systems have the ability to retrieve from higher, denser areas.

Meeting the Labor Challenge Labor is another major driver of warehouse automation, and there

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are many aspects to the labor issue. “Interesting enough, it’s not the cost of labor that is really driving automation, as much as the lack of viable labor,” explains Darby of Advance Storage Products. Darby echoes the opinion of many other warehouse experts when he says companies are having a hard time hiring reliable employees to work in the warehouse. He tells of a discussion with a potential client in Indianapolis who was exploring warehouse automation. He asked the client if he could justify automation because the company is in a low-wage area. The client responded: “We can’t find forklift operators, and we are actually offering bonuses to people if they take a job as a forklift operator.” Darby adds that the labor shortage in warehouse operations, cou-

pled with the push for warehouse automation, is prompting companies to develop a more robust workforce strategy. That strategy centers on attracting well-qualified warehouse workers because they are “now operating a multimillion-dollar piece of equipment.” He adds that warehouse operators who upgrade to automated systems often get frustrated if they take a forklift operator, for example, and expect him or her to easily step into using automated warehouse equipment. Swisslog’s Fanning says the trend toward automation means warehouse operations are “transitioning from hiring manual labor to hiring engineers, mechanics, electricians and even data scientists.” Data scientists are being used to examine data sets from automated devices to dictate behaviors or operational changes based on feedback from sensors, for Interesting example. enough, it’s Another not the cost workforce of labor that is strategy is really driving looking to automation, millennials to as much as fill warehouse the lack positions of viable as the need labor.” for more Kevin Darby, automated tech-savvy systems solutions employees manager, Advance Storage Products becomes apparent. The push to attract millennials “impacts not only how those employees want to work, but how they work,” says Williams of Westfalia. “Millennials are much more comfortable with automation, and because of that, they quickly come up to speed in an automated environment,” he says. “I really see an opportunity for companies in the warehouse/distribution world to take advantage of millennials’ experiences to help continue to optimize and make the process flow smoother.” He says companies that commit to automated systems will find they are attractive companies to the www.foodlogistics.com

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younger generation. Darby agrees, adding: “Millennials want jobs they feel good about, and automation helps them do that. They will be more engaged because it will be a challenging job for them.”

Autonomous Mobile Robots in Warehouse Operations Robotics technology has changed the manufacturing sector over the past several years and is currently “transforming supply chain operations to be faster, safer and more productive,” according to Tractica, a market intelligence firm. It notes that the demand for robots and the supply of robotic solutions “could lead to widespread acceptance and presence of robots in warehouses and logistics operations.” Matt Wicks, vice president, product development, manufacturing systems for Honeywell Intelligrated, agrees that he has seen a growth and evolution in the

use robotics in warehouses. Some of these trends include:  Continual improvement to robotics software that enables better ease of use and performance  Advancement of machine learning, and greater data collection and analytics  Continued integration of machine vision, advance algorithms and sensing solutions into sophisticated robotic solutions to solve automation problems. In the food and beverage industry, he says the first inroads into robotics were made in the palletizing space, and now “we’re seeing that robotic technology has migrated to and merged with more conventional palletizing machines to yield improved performance in case handling and machine rates.” He says advancements in robotic palletizing continue to show promise for the industry. The increased focus on food safety and maintaining a competitive

advantage in the food and beverage industry is prompting ongoing interest in automation and robotics, adds Ed Mullen, vice president of sales North America for Mobile Industrial Robots. Robotics meets the industry’s need for flexible, fast and adaptable production, as well as minimizing the risk of human Our AMRs, for example, can be contamination. part of a fully automated While robots fleet of robots that perform many transport items between tasks related production cells or lines.” to case packing Ed Mullen, vice president of sales North and bundling, America, Mobile Industrial Robots Mullen sees “great potential” for optimization of robots in primary production with the use of AMRs. “Our AMRs, for example, can be part of a fully automated fleet of robots that transport items between production cells or lines,” he explains. “They can work with humans, be summoned by a button and transport items between

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COVER STORY

continued

production and the warehouse, and can transport items around a warehouse.” Melonee Wise, CEO of Fetch Robotics, sees improvement in material flow as a key advantage to robotics in any industry. She says a solid materials flow operation in warehousing affects head count and space utilization. When people and robots work together in the picking process, she says people are more likely to put goods onto the robots at a more regular velocity, smoothing out the flow of materials and reducing the size of consolidation areas. Specifically in the food and beverage industry, she says robotics can be used in humid and cold environments, “taking people out of the cold parts of the facility—not exactly a desirable place—which also helps optimize the labor force.” When looking to integrate and/or upgrade the use of robotics, some points to consider include:  The level of expertise and certification of the robotic integrator  The amount of space in the factory or warehouse  Whether robots will change the general workflow in the factory/ warehouse  Having a staff “point” person responsible for working with the integrator  Starting small, and getting to know how the robots work, allowing for easier and faster integration and growth.

Automated Guided Vehicles (AGV) AGVs, mobile robots that move and transport items in production, warehouses and distribution centers, help reduce labor costs by replacing non-value-add labor, and also increasing inventory accuracy, says Clark of Dematic. He says other conditions where AGVs offer solutions include:  Transport in challenging or less operator-friendly environments

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 Westfalia’s high-density AS/RS systems enable companies to maximize their existing warehouse space by increasing storage capacity by 30 to 50 percent.

 Applications requiring steady and continuous throughput  Repetitive transport, or midto long-distance travel areas  Material flows with a large number of buffer locations  Complex production flows. AGVs are an “ideal combination” with an automatic high-bay warehouse (HBW) system, adds Rivenbark of SSI Schaefer. The AGV can connect the HBW with production to supply both production and packing material into daily operations, he says, taking finished goods after palletizing and transporting them into the HBW. Fanning notes that AGVs traditionally have been about “reducing the transportation distance within buildings,” but the future is using AGV technology with robotics. While moving around a warehouse, for example, the AGV could take images to assist with inventory or replenishment, use technology to help with quality assurance, or work with a robot to pick pieces or cases of products.

Automated Storage and Retrieval Systems (AS/RS) AS/RS solves several warehouse challenges, ranging from order accuracy to the efficient use of space. Because an automated warehouse features a high-density configuration, allowing for vertical space to be used more efficiently, AS/RS can translate into a smaller building footprint, according to Ken Ruehrdanz, manager, distribution systems market, Dematic NA. He says AS/RS also can better pinpoint inventory locations, cutting down on inaccurate orders, which can cost a food and beverage wholesaler anywhere from $100 to $500 per order to fix. The system also can save on operational costs such as warehouse labor and energy. Darby of Advance Storage Products adds that storage and retrieval systems can cut down on damage because forklifts will not be running into storage racks. Overall, products are handled more efficiently and accurately with automated storage and retrieval systems. www.foodlogistics.com

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Conveyor Systems While conveyor systems are a mature technology within food and beverage warehouses, they continue to serve the critical role of taking product from one warehouse zone to the next. Ruehrdanz says the conveyor is the ideal and preferred method of connecting functional areas in an automated warehouse— it’s the interstate highway system between all functional areas. “In the conveyor space, a key attribute is developing the ability to reconfigure conveyors based on changing business needs. In food and beverage production and logistics operations, there is constant change—business conditions, stock-keeping units, load structures and volume,” he says. “To accommodate that, conveyance paths need to be frequently reconfigured and remapped.” At Dematic, this means reconfigurability both mechanically and within the control scheme. This is followed by scalability to accommodate greater capacity. That could mean the ability to change the conveyor speed either through manual resetting or automatic sensing as well as building extra accumulation capacity. “Automatic www.foodlogistics.com

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speed control is critical for users’ automation because the system is much more energy efficient and there’s less wear and tear on the technology. Maintenance schedules can also be scheduled further apart, lowering your cost of operation,” says Ruehrdanz. Brian Sherman, vice president of sales and engineering, WITRON Integrated Logistics Corp., says the company’s goal with its conveyor systems is to install them in the smallest footprint as possible with a focus on standardization. “We use standard transport units as often as possible. Thus, our products are usually straight double-chain-style for pallet transport, and in the case of mini loads, we’ll use carton or tray transports because the use of rollers saves on maintenance. Whether it’s a standard system pallet design, a specific tray that may have one or two varying dimensions or a tote, keeping that availability as high as possible minimizes faults and other packaging inconsistencies that lead to errors and downtime. The solutions have changed over the decades, says Sherman. “In the 1990s, for example, the solution centered around the sorter. Pick to belt sorters where conveyors were running throughout the warehouse down aisles to specific dock areas and distributing product to various docks for trailer loading,” he says. “Solutions have now evolved to where sorters have been replaced by AS/RS technology and different shuttle systems and means of picking product to minimize touches. The next evolution is: how do I eliminate touches using robotics or AS/RS technology or palletizers?” Ruehrdanz agrees, and says the future is in figuring out how conveyors can be made as simply as possible yet perform at the highest level as it integrates and interfaces other subsystems. “It all has

to snap together in a more efficient way. We also need to be able to reduce the time it takes to design and implement a solution for a user,” he says. “Systems need to be turned on and operating in a shorter timeframe to increase the user’s ROI.”

In the conveyor space, a key attribute is

Automation on the Horizon

based on changing business needs.”

There are many improvements and possibilities on the horizon when it comes to automated warehouse systems, experts agree. And it’s not just about automating vehicles or using robots; it’s also about automating processes from the picking, to the loading to the unloading process throughout the supply chain. While the growth of e-commerce has spurred warehouse automation, it’s also transformed the warehouse, Darby says. “I think upper management is more interested in making warehouses more efficient because the warehouse is becoming the new storefront.”

developing the ability to reconfigure conveyors

Kevin Darby, automated systems solutions manager, Advance Storage Products

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3PL/REFRIGERATED LOGISTICS

BY LARA L. SOWINSKI

THE FLEET MANAGER’S As 2018 gets rolling, there are plenty of issues that will redefine the industry in the coming months.

ONE QUARTER

OF SMALL FLEETS (BETWEEN FIVE AND 100 TRUCKS) ARE NOT ELD

COMPLIANT CarrierLists.com

26

A

s fleet managers assess the trucking industry landscape for 2018, what stands out is a dynamic market that is growing alongside an expanding economy—both domestically and globally—coupled with advancements in technology that promise increased safety, visibility and efficiency. Regulatory compliance issues are also top of mind, especially the Federal Motor Carrier Safety Administration’s (FMCSA) electronic logging device (ELD) mandate, whose impact is still very much in play. “It’s hard to get a good, accurate measurement of what the ELD mandate is actually doing in terms of capacity in the marketplace,” confirms Jonathan Starks, transportation analysis expert at FTR Transportation Intelligence. A survey from CarrierLists.com suggests that one quarter of small fleets (between five and 100 trucks) are not ELD compliant, though other surveys show that smaller carriers are at least improving their compliance and implementation efforts with the mandate, he says. However, until the more significant enforcement stage comes into effect on April 1, it’s difficult to determine how much capacity might be negatively impacted. Specifically, while the ELD mandate came into force on Dec. 18, 2017, the FMCSA has stated that drivers who are cited for not having an e-logging device between Dec. 18 and April 1 will not have points recorded against them in the Compliance, Safety, Accountability

FOOD LOGISTICS | JANUARY/FEBRUARY 2018

The pace at which the industry adopts and complies with the ELD mandate will have a bearing on capacity, so too will the overall economic environment.

(CSA) carrier scoring system. In the meantime, when it comes to capacity, “We’re already in a very tight environment,” says Starks. “After the hurricanes (in 2017) hit, we saw record highs for our market demand index, which is basically looking at load availability versus truck availability; it’s simply a capacity utilization measure. Those numbers spiked to record highs back in early September. They’re back down from where they were, but they’re still at very high year-over-year numbers,” he says, adding that, “There’s essentially no idle capacity that can readily be put into service to dramatically alter the landscape of what’s going on in the marketplace right now.”

Outlook The question for fleet managers remains: How long will the capacity crunch last? According to Starks, for at least the first half of the year, we will continue see a very tight market. “After that there’s potential for things to start to loosen up, but it would still stay very tight,” he adds. The pace at which the industry adopts and complies with the ELD mandate will have a bearing on capacity, so too will the overall economic environment, he says. “If (the economy) stays strong like we’ve seen recently, then it’s going to remain tight throughout 2018,” Starks says. “However, if we get a little bit of a reverse and return to the growth environment www.foodlogistics.com


Photo Credit: Wise Systems

S FORECAST FOR 2018

that we’ve experienced during most of the economic recovery, then things will ease up a bit. We’ll still have growth, but we should be able to add in enough capacity to support it, and the market will slowly start to come back to a more normal environment. That scenario would not happen until the second www.foodlogistics.com

FLOG0218_26-31_Forecast LS AW JY.indd 27

half of the year though, so there are “We saw something similar a few still unknowns.” years ago with a move to natural As for the state of infrastructure gas vehicles, but I think that electric in the United States, Starks vehicles have a better doesn’t foresee any significhance of becoming more If (the cant changes to the status fully developed,” he notes. economy) quo, which means chronic “Natural gas is a more stays strong congestion will remain an like we’ve seen transitional fuel—not a issue. Even if the Trump recently, then fuel for the long term. administration were to pass it’s going Electric, however, is fuel an infrastructure-spending You can recharge to remain neutral. bill, in the near term it would an electric vehicle with tight in coal, diesel, natural gas or actually make things worse, 2018.” not better, he explains. On with renewables, which the other hand, long-term makes it much more Jonathan Starks, transportation developments like changes conducive to long-term analysis expert at FTR Transportation development.” to truck size and weight Intelligence regulations, platooning, and Rising demand for truck autonomous vehicles have transportation is simulthe potential to more effectively taneously driving orders for trailers, address congestion and boost truck including refrigerated trailers. productivity, but are still down the “That market segment has been line. “They really aren’t going to adding capacity pretty significantly impact the marketplace in the next over the last few years, and stayed few years,” adds strong in 2017 as well,” says Starks. Wise Systems’ Starks. “Things Furthermore, it’s not just temfocus on like autonomous perature-controlled food that is dynamic vehicles are going driving the need for more refrigerscheduling to have a more ated trailers. solutions meets today’s slow-step approach. “There’s a lot of activity outside marketplace While it is a transof the food sector that is coming demands formative element, into the refrigerated market that related to it will come along in we never had to deal with before,” service and he says, such as pharmaceuticals, performance. incremental steps.” When it comes fresh flowers, and health and to new technologies such as Tesla’s beauty products. “Even though we electric semi-truck, admittedly are adding a lot more refrigerated Starks concedes “they get a lot of trailer capacity, it’s getting soaked bang,” but he sees more immediate up pretty quickly.” promise in electric vehicles, which “have more of a potential impact in Opportunities the local segment and for final mile Like most business obstacles, deliveries.” He expects the industry the other side of the coin usually will see electric vehicles used for reveals opportunities. Compliance routes with a maximum of a few with the ELD mandate undeniably hundred miles, which would allow represents added costs for many the vehicle to go out, make its deliv- carriers, yet there are benefits ery and then return to charge up. associated with the investments JANUARY/FEBRUARY 2018 | FOOD LOGISTICS

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3PL

continued

The introduction of Tesla’s electric semi-truck has drawn a lot of interest over the past few months. Indeed, electric vehicles have the potential to make the most impact in the local segment and during final mile deliveries.

30

required to achieve compliance, notes Jim Griffin, chief operations and technology officer at Fleet Advantage. Not surprisingly, fleets that have been using telematics for a while are in a better position to more quickly comply with the ELD mandate compared to those that have just recently started outfitting their equipment with the technology. “Introducing telematics into a fleet is initially disruptive and challenging,” acknowledges Griffin. “It impacts behavior, processes, reporting systems, culture and a host of peripheral activities. In fact, the cultural mindset alone might be the most challenging aspect, especially for fleets that are new to telematics.” In addition to compliance with the ELD mandate, fleets that have already made investments in telematics and other technologies are receiving benefits in the form of increased data visibility, data management and reporting that continues to advance year over year. Telematics should be providing actionable data, leading to increased efficiency and controlled costs, while enhancing their end customer experience, Griffin explains. There are other issues for fleet managers that can be viewed as both an obstacle and an opportunity, such as maintenance costs, he says. “Our customers are becoming

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more focused on how to properly record, analyze and monitor maintenance cost data. Additionally, they are focused on the value of asset lifecycle management as a means to better control maintenance costs,” says Griffin. “We have also noticed an increased focus on how leasing structures are affecting their balance sheet. The proposed changes in accounting standards and tax laws have created an emphasis on how expenditures, with regards to capital equipment acquisition, are categorized and how they affect the organization’s overall financial KPIs. This is increasing the need for the operations departments and the finance/accounting departments to collaborate in ways we have not seen in the past. While cost control has always been important when it comes to capital equipment acquisition, the details of how the equipment is acquired (e.g., via lease, loan or purchase) have, in general, been the extent of the conversation between the two areas. “Today, we are seeing a deeper conversation about the value of certain financial reporting impacts based on the financial structure of the lease. We’re working diligently to ensure both operations and finance departments have the right dialogue on how best to structure the lease that is most beneficial to their financial and operational goals,” says Griffin. New technologies and innovations are helping to support a more open mindset in the industry, adds Griffin, which is evidenced in several areas key to fleet managers. For instance, “fleets that continue to operate their business with legacy operational philosophies, such as long-term asset lifecycle, are going to find it challenging to remain relevant and competitive,” he cautions.

Obligations From his perspective, Chazz Sims, CEO and co-founder of Wise Systems, sees a greater awareness from transportation providers and fleet managers toward meeting the demands and obligations related to service and performance. “Many of our customers are really thinking a lot about how to maintain and improve service levels, while at the same time improving efficiency,” he says. For starters, that means making deliveries more predictable. “It’s becoming more of an expectation in the industry that deliveries not only show up when the customer wants it, but exactly how they want it,” he says, citing Target and Walmart and their “on-time and in-full” mandates as examples—as well as the penalties attached to those mandates for missing specific service levels. In order to achieve more stringent expectations around service and performance, fleet managers are looking at ways to increase driver utilization, says Sims, including helping drivers complete more deliveries throughout the day and exploring ways to reduce miles while improving on-time deliveries. “We’re hearing from our customers that they don’t want to have to choose one or the other; they want both. We’re supporting them in their goal to improve service while saving money at the same time,” he adds. The solution to meeting those new marketplace demands is in dynamic scheduling. “Previously, a lot of companies looked at their routes just once a quarter or maybe only once a year,” Sims says. “But customers’ needs change every day, and they also don’t want to have empty shelves or wait several days for a delivery. There is also any number of unpredictable events that a driver encounters throughout the course of a single day, such as arriving at the customer’s facility on time only to find all the loading docks occupied.” While the industry has historically been focused on building good www.foodlogistics.com

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SAFETY MINDED:

Safety remains one of the top well, because those routes aren’t always the same and they’re not concerns for fleet managers, always consistent. They’re ever changing,” he says. whether it’s the safety of the These challenges are contributing to the fleet manager’s move driver, the cargo, or motorists on the outside. Not surprisingly, toward open platform and integrations between technologies. distracted driving is a growing concern that falls into this bucket, “Fleet managers have multiple problems they are trying to solve, says Dave Riordan, chief client officer and executive vice president whether it’s productivity or service differentiation, along with at Lytx, and fleet managers are trying to addresses it. the safety and retention of drivers and customer service,” and it “Drivers are exposed to increased distractions on the road and affects their decision-making concerning technology investments. increased congestion too, both in the urban environment and on They also want to avoid making decisions that “box them in,” the highway,” Riordran says, adding that mitigating close quarter Riordan says. “That’s important,”he adds, noting “integration and collisions is also a growing priority. These are described as collifuture expansion are key considerations when it comes to making sions that occur in a crowded technology decisions.” Simplicity is parking lot, for instance, when another, he says, and Lytx aims to a driver is trying to back into a offer customers a technology connarrow spot. figuration that “answers 80 percent E-commerce and last mile of what they want answered, while delivery also has an impact allowing them to make modificaon safety, Riordan points out. tions unique to their requirements.” E-commerce tends to increase Meanwhile, Riordan is also seeing the number of trips and the a greater acceptance of video-based variety of areas that fleets solutions as coaching tools for operate in. safety. Fleet managers can learn “There’s no doubt that from others who have encountered e-commerce has implications similar challenges and identify on a fleet’s productivity and ways to improve claims litigation utilization strategy. But from strategies, encourage changes An increase in e-commerce and last mile deliveries is impacting driver our perspective, it also has an safety, contributing to the fleet manager’s move toward open platform and in driver behavior and improve impact on the safety strategy as integrations between technologies, says Dave Riordan at Lytx. overall safety.

route plans, most plans cannot sufficiently respond to the vast array of unknowns on the ground. The only way to truly see and respond to all of the variables is to tap into and crowd source the knowledge and experience of both drivers and dispatchers, says Sims, which in turn creates a huge opportunity for machine learning technology. “We’ve made machine learning a core component of our technology because it helps capture all of those insights so companies can better plan for the future,” he says. “That knowledge and experience really wasn’t being used before when it came to future planning.” Not only are technologies becoming more robust and feature rich, but they are also designed for easier integration and user friendliness—characteristics that are valued by big companies and small companies alike. With regards to new systems on the market, “there is a lot more focus around usability,” notes Sims. www.foodlogistics.com

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“It’s about someone being able to pick up and use a software and quickly get up and running in a matter of minutes, versus taking months to train them.” Previously, there were several barriers. Companies had to hire a dedicated person, as well as an integration specialist team that was needed in order to get the software and do an on-premise installation, Sims explains, adding, however, that a lot of the software has moved away from that model. “Now it’s cloud-based, easy to use, fast as a bullet, and it’s built around being intuitive. This really opens the door for a lot of small businesses as well,” he says. Sims emphasizes the importance of machine learning and how it can help the industry better respond to evolving consumer demands driven by e-commerce, which typically means smaller and more frequent orders. With e-commerce, “you’re dealing with smaller drop sizes, and

you’re probably dealing with more people than you were before. But, as you start applying machine learning, you are able to look at broader trends. You are able to become more responsive to schedules and changes,” he says. Other developing technologies, such as blockchain, autonomous vehicles and drones are also beginning to reshape how fleets—and supply chains in general—operate and perform. And while these technologies are collectively driving improved visibility and efficiency, customer service is also getting a big boost. Admittedly, while automation is responsible for eliminating some jobs, it’s also freeing up organizations and workers to focus more on customer service. “Customer service and the customer experience is becoming a competitive differentiator for a lot of businesses,” notes Sims. “There is more power getting back into the hands of the customer. It’s an exciting time on all fronts.”

We’ve made machine learning a core component of our technology because it helps capture all of those insights so

companies can better plan for the future.” Chazz Sims, CEO and co-founder of Wise Systems

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SECTOR REPORTS WAREHOUSING

BY JIM GASKELL

❹ KEYS TO

UNLOCKING VALUE FROM

FORKLIFT CONNECTIVITY

Forklift connectivity and fleet management uses technology that is proven to deliver insight into truck utilization, compliance, safety, performance and productivity.

Jim Gaskell is the director of global technology business development at Crown Equipment.

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T

he pressure to reduce costs in the supply chain is relentless. Almost every material handling organization is evaluating the role of technology in improving warehouse productivity and efficiency, including forklift-based features that are transparent to operators. Leveraging and consolidates data from the information from forklift is a forklift service strategy that events to better continues to manage costs, demonstrate standardize provalue in delivercesses and exing measurable tend forklift life. improvements The operations  Forklifts equipped with in warehouse component incommunications terminals bring management. volves collecting data-driven decision making to the warehouse floor. The connected data on forklifts forklift is a moand operators bile information technology hub ca- to improve safety, utilization and pable of collecting and processing productivity. data from products, operators, the Collecting real-time data environment and other material requires that forklifts be equipped handling systems. And, a connected with a communications terminal forklift provides necessary visibility that integrates with the forklift’s so that managers can make smarter, electronics. The system wirelessly faster, and fact-based decisions to communicates data on impacts, simplify asset management, achieve energy consumption, utilization, greater cost control and strategilocation, performance and other cally adjust to evolving needs. factors. This transforms the truck The most common application from an isolated piece of equipof a connected forklift to date ment into a networked device and is through a fleet and operator brings data-driven decision making management system that typically to the warehouse floor. features two key components: Systems integration is just one maintenance and operations. The part of maximizing the investment. maintenance component collects Through our experience with fork-

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lift fleet and operator management implementations, Crown has identified four keys to realizing value from the connected forklift.

❶ Clear Goals A forklift fleet management system’s versatility is part of its attraction. It can be used to monitor a wide range of warehouse and performance metrics, but it can also be a drawback if an organization doesn’t establish clear goals prior to implementation. This doesn’t mean that forklift fleet management must be a single-issue solution; most users derive multiple benefits from their system. But it does mean that having a clear goal in the early stages is the best way to ensure the system gets integrated into management processes. Once progress has been made on the initial goal, new goals can be defined. The goals an organization might consider in relation to forklift fleet management include reducing impacts, increasing equipment utilization, streamlining compliance, improving operator productivity www.foodlogistics.com

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and reducing service costs. One of the most effective tools for ensuring continuous improvement is a scorecard that benchmarks the current state and documents initial results. Once initial goals have been achieved, the bar can be raised and goals can be expanded to create a continuous improvement process.

also important that the system includes interactive features that can communicate and record results. Forklift fleet management systems rely on three types of information delivery to meet these requirements: Alerts: Alerts can be delivered to managers via email, text message or the management dashboard. They provide immediate notification of Relevant, Timely Data events that require attention, such The ability to achieve your goals as impacts or operating conditions can be compromised without the that exceed preset thresholds. right data at the right time. They also can be a powerful tool in In today’s world, the managing change if they are challenge is as likely to In today’s set up properly. be too much data as not Management Dashworld, the enough. Forklifts can challenge is as board: The forklift fleet provide a wealth of data and operator management likely to be to a management system, too much dashboard needs to provide so the system must be data as not managers with a quick designed to present this overview or snapshot of enough.” data to busy managers in operating trends within a way that makes efficient the warehouse. This allows use of their time while providing managers to monitor trends and act the basis for decision making. That before they reach critical levels and requires information to be timely trigger an alert. A well-designed and have appropriate context. It’s dashboard can enable a shift from

reactive to proactive management by providing managers a visual overview of key operating trends and a clear path for quickly drilling into issues that require attention. Detailed Reports: Based on the information presented by the management dashboard, managers need the ability to drill down to isolate problems. This is where the depth of data provided by the system becomes important. It should enable managers to quickly and accurately isolate root causes of issues, such as low utilization or low productivity related to specific operators.

 The data to drive change is available, but supervisors must hold operators accountable.

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MANAGING POWER IN THE WAREHOUSE

SR: WAREHOUSING

continued

BATTERY CHARGING STRATEGY IS MORE IMPORTANT THAN YOU THINK Contributed by AMETEK Prestolite Power Whether you are planning a new warehouse buildout or a reconfiguration of an existing operation, it is important to consider both the size of the space as well as the level of activity in your facility before implementing a power strategy. Gaining this understanding will help you manage power, maximize equipment runtime, alleviate the stop-gap of down time from inoperable fork lifts, and ensure your staff is equipped to complete the job every day. Here is some information to help you determine your needs:

Charging Options Opportunity/Fast Charging—This strategy is ideal for charging during breaks and downtime. The battery is connected to the charger in short sessions and remains easily accessible when employees are ready to go back to work. Tradtional Charging—For 24/7 operations with little downtime, having spare batteries ready for use is a must. In these cases, a conventional style charger and battery changing routine works best. Lower charger cost, durability and readily available power make this a good choice. Hybrid Charging—In many instances, just one charging strategy may not be the best fit for an entire facility. In this case, deter-

mining which section of your warehouse makes best sense for each strategy can take time, but be well worth the investment.

Charging Solutions

Selecting the technology that delivers the most value for your specific operation is critical for long term success. Here’s an overview of battery chargers that are available: • New High Frequency (HF) Chargers PROS: small/light, versatile, energy efficient, great for opportunity/fast charging CONS: noisy AC and moist/dusty environments can cause issues, shorter life span when compared to ferroresonant charger • Traditional Ferroresonant Chargers PROS: low cost, simple, reliable, long s ervice life CONS: large, heavy, must be properly matched to battery size, not good for opportunity or fast charging routines • SCR Chargers PROS: reliable and durable in many environments, long service life, versatile, great for opportunity and fast charging CONS: higher cost, large / heavy

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Forklift fleet and operator management systems put the impetus for success squarely on management. It’s tempting with any technology for managers to be engaged during the early stages and then shift their focus once they believe it has been successfully implemented. That’s exactly the wrong approach; engagement with the system needs to grow—not diminish—following startup. If management doesn’t stay engaged with the system and consistently demonstrate that data from the system is being used to evaluate performance, there is little chance for sustainable change. The data to drive change is available, but if supervisors don’t hold operators accountable, their behavior won’t change. Senior management needs to

communicate their support, as well as ensure support and collaboration extends across departments to achieve defined goals.

❹ Site Preparation Implementation problems based on inadequate site preparation can dampen enthusiasm for new technology and discourage adoption. One of the keys to site preparation is getting all stakeholders involved in the planning process, including affected departments (maintenance, operations and safety, among others) as well as IT. Early participation by IT can identify potential issues and help ensure the proper infrastructure is in place to support forklift fleet management. IT can also guide the decision about whether the data should reside on-site or if a cloud-based implementation is preferred. In addition, data sharing processes should be defined and documented to guarantee that the right information is shared with the right departments at the right time. These processes may ultimately evolve once the system is in place, but establishing them in the beginning increases the likelihood that all departments that can benefit from the technology will use it. Forklift connectivity and fleet management uses technology that is proven and reliable to deliver insight into truck utilization, compliance, safety, performance and productivity. There is sufficient experience with forklift connectivity to ensure that implementation issues are resolved relatively quickly and significant value is realized if the organization sets clear goals. Organizations that address these issues directly today will realize the benefits of forklift connectivity in the short term, while positioning themselves to build on the technology foundation it provides in the long term. www.foodlogistics.com

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INNOVATION. OUALITY. SERVICE. It takes a lot to be a global leader. It takes a proud history of engineering material handling solutions that lead the way in innovation. It takes skilled and talented people committed to constant improvement. It requires a level of service that offers end-to-end solutions that anticipate customers’ needs. Your business runs on performance. Count on Raymond to Run Better. Manage Smarter. For more information visit www.raymondcorp.com.

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2/2/18 12:19 PM


SECTOR REPORTS TRANSPORTATION

BY AMY WUNDERLIN

Automation is the blue collar worker’s worst nightmare—or is it? Why autonomous vehicles offer the trucking industry an opportunity to address their ongoing driver shortage.

Fact or Fiction:

THE HYPE BEHIND

SELF-DRIVING 36

TRUCKS

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www.foodlogistics.com

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I

n October, billionaire investor Warren Buffet’s company Berkshire Hathaway acquired a 38.6 percent equity stake in Pilot Flying J, the largest truck-stop chain in North America. By 2023, Berkshire will become Pilot Flying J’s majority stakeholder by acquiring another 41.4 percent of the company. In a world where technological innovation reigns, this may seem like a bad investment. However, according to Steve Banker, service director of supply chain management at ARC Advisory Group, the multi-billion-dollar investment likely hinges on Buffet’s belief that autonomous trucks are not even remotely close to becoming a reality—meaning the human beings transporting our goods still need to stop at locations such as Pilot Flying J to refuel not only their trucks but themselves. In fact, the FSCMA’s electronic logging device (ELD) mandate, which requires drivers to obey a strict hours-of-service requirement, will further reduce the time drivers spend on the road, Banker says, which seemingly Thousands of makes Buffet’s warehouse workers investment in will be out of work, travel stops a based on robots safe bet. in the warehouse, Berkshire’s before the first investment truck driver sends a strong loses a job message to because of a billion-dolautonomous lar industry trucks.” plagued Steve Banker, by driver service director, shortages and ARC Advisory Group costly regulations, but is the idea of relief via an autonomous fleet all hype? Semi-autonomous vehicles already move across American roadways every day. However, the road to fully autonomous trucks involves surmounting significant technological hurdles. While Banker believes this reality will eventually come to fruition, he says it might not happen as soon as the industry thinks. “When you look at the technological challenges, it’s not like www.foodlogistics.com

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these are minor steps,” he notes. “Going from step one to step two is a huge technological hurdle that requires an order of magnitude, more information, much faster computers and much better machine learning capabilities. “Where we’re at right now is step two. Arguably getting to step four is where Buffett would start to be impacted. But, there are just huge technological challenges to get there. It easily could be decades

before we get there,” he adds. In the meantime, Banker speculates there will be “tens of thousands of warehouse workers thrown out of work, based on robots in the warehouse, before the first truck driver loses a job because of autonomous trucks.”

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SR: TRANSPORTATION

A hybrid network of self-driving and driveroperated trucks

will only improve the logistics sector.”

Sarah Abboud, Uber spokesperson

 The combined tech powers of Uber and Otto led to the first commercial shipment a by self-driving truck in October 2016.

38

continued

racing to make self-driving trucks a reality, agrees with Banker’s timeline, envisioning a future where truck drivers and self-driving trucks work together to move freight around the country. MIT Technology Review recently spoke with Uber’s Nancy Sun, who is the engineering lead for self-driving trucks, about the reality of self-driving trucks and the challenges still ahead. She tells the magazine that a world where the majority of vehicles on our roadways are autonomous is 10 to 20 (or more) years away. “It’s not like you’re going to flip a switch one day, and you’re going to have self-driving trucks everywhere doing everything for you,” she says. “It’s going to be a long journey to get to a point where it’s even going to be a majority-of-transit-happens-by-self-driving-vehicle world. It’s not in the next three years. It’s not in the next five years. We’re talking like five, 10, 15, 20-year future, beyond.” And for Uber, that world is at the core of its mission to provide safe, reliable transportation to everyone, everywhere. Its ridesharing network is used by millions of drivers and riders every day, and now it is investing in trucking. In December of last year, the company introduced Uber Freight, a free app that matches carriers and their drivers with loads to haul. They’re also working hard on getting autonomous vehicles on the road through

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 Daimler tested digitally connected trucks in so-called platooning operations on select public roads in Oregon and Nevada last year.

their Advanced Technology Group (ATG), which is comprised of a team of engineers dedicated to self-driving technologies, mapping and vehicle safety. “We saw an opportunity to drive the logistics industry forward, which is why we began Uber Freight,” says Sarah Abboud, a spokesperson for Uber. “Uber Freight has already begun to transform the driver experience, and we believe that a hybrid network of self-driving and driver-operated trucks will only improve the logistics sector.” Uber’s acquisition of tech startup Otto was a huge step toward achieving this hybrid network. In October 2016, the combined tech powers reached their first major milestone, successfully delivering the first commercial shipment by self-driving truck. While a human still sat in the cab, the truck delivered a trailer load of Anheus-

er-Busch beer from Fort Collins to Colorado Springs, Colorado, approximately 120 miles. “Job demands may change, but we believe there will always be a need for professional truck drivers,” adds Abboud. “Drivers will handle more dynamic parts of the job such as communicating with facilities workers, unloading, loading, city driving and final delivery. We also expect to see increased safety and efficiency, wherein self-driving trucks are an opportunity for drivers to have a say in where and how they work.” So while self-driving vehicles may not replace the need for human truck drivers, it may ultimately address the industry’s driver shortage by making the job more attractive. The American Trucking Association estimates that the for-hire trucking industry’s driver shortage stood at roughly 58,000 in 2015, due to several reasons, including demographic, regulatory and the fact that drivers are away from home for a period of time. Uber is listening to truck drivers, unions and others who depend on the trucking industry for their daily lives to better understand their needs, so Sun says they are able to make technology that supports the industry well. “We’re not looking to eliminate people’s livelihoods. We’re looking to supplement and help improve their livelihoods,” she adds. “A model www.foodlogistics.com

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where self-driving trucks automate a lot of the long-haul routes and drivers continue to operate going from a transfer hub to a distribution center, driving more on the local routes near their homes, is a route we’re super-interested in pursuing.”

Challenges Ahead Technological challenges are chief among concerns that block the road to self-driving trucks. But doubts in regards to safety, government regulations, infrastructure, and of course, cyber security also linger. “There’s a huge machine learning, vision recognition challenge; there’s just so much going on once you get off the highway and into a city environment. The machine learning issues, are massive, but I think those can be tackled, eventually,” Banker explains. “But, there’s also the cyber security issues. Foreign governments have proven that they can hack into anything. They could hack into cars, but the bigger terrorism threat is to turn an 80,000 pound truck into a guided missile. I don’t think I don’t think we’re anywhere the hurdles will close to solving that issue.” be too hard to In terms get regulations of regulatory that will roadblocks, allow Banker says that for [selfis probably least driving of the industry’s trucks].” worries. “The government will Steve Banker, service director, ARC Advisory Group do tests first; they’ll do pilots first. If they like what they see, I don’t think the hurdles will be too hard to get to regulations that will allow for this,” he adds. During a January speech at the annual Consumer Electronics Show in Las Vegas, Transportation Secretary Elaine Chao said the U.S. Transportation Department will soon publish four requests for public comment on how to cast aside roadblocks for transportation advancements in vehicles, trains, buses, commercial trucking and transit systems. Calling current regwww.foodlogistics.com

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ulations numerous and outdated, Chao said an update would allow for innovation to move forward. In addition, self-driving pilot programs have taken off in several states such as Oregon, where Daimler, a commercial vehicle manufacturer, has tested a concept called platooning. Platooning is when a group of computer-controlled trucks drive closely together

to save fuel. As for Uber, they consider regulatory agencies key stakeholders in their journey. “Our general approach is to maintain close engagement and transparency with these agencies. We believe this approach better prioritizes safety and is rich with opportunities for continued dialogue and two-way education,” Abboud says.

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SECTOR REPORTS SOFTWARE & TECHNOLOGY

BY JOHN R. YUVA

RETAIL AND LABOR TRENDS PAVING NEW PATH FOR WAREHOUSES Q&A with Fortna reveals how warehouse operators can adapt to evolving marketplace.

 Stores are experiencing much more individual fulfillment.

40

W

arehouse and distriPersonal shopping. Traditional bution center (DC) grocery distributors and wareoperators have much to house operators are accustomed contend with in the marketplace. to shipping pallets and full cases The role of the wareof product to the store house and DC is quickly where it’s put on the shelf changing as consumer for customers to purchase. preferences and channel That’s now changing. Stores expectations are evolvare experiencing much more ing. This means that individual fulfillment—pertoday’s warehouse and sonal shopping for grocery S WA RT Z DC operators need to where online orders are find ways to reduce order ready for pickup at the lead time, become more efficient store. Online and in-store pickup and control costs. changes the dynamic inside the To gain additional perspective on stores, and that reverberates back what warehouse and DC operators to the DC and grocery wholesaler, can do in light of these changes, Food requiring more prepacked and kitLogistics spoke with George Swartz, ted foods ready to go. It’s the Blue vice president at Fortna, where he Apron model, but in a grocery store leads the wholesale industrial distrisetting. Amazon’s own Amazon bution sector. Fresh and its purchase of Whole Foods is placing greater pressure The Amazon Effect’s on traditional grocers to adopt the Widening Impacts same model. What changes are we And these trends are impacting likely to see from grocery delivery models as well. Whethwarehouse and DC operators er it’s Amazon, Whole Foods or as a result of the Amazon now Target (with the acquisition purchase of Whole Foods? of Shipt), more customers want

Q:

FOOD LOGISTICS | JANUARY/FEBRUARY 2018

FLOG0218_40-43_SOFTWARE.indd 40

product delivered to their door. It will be really interesting to see how it all plays out. Daily delivery. Because of changing demographics and how people are ordering, grocery wholesalers are seeing requests for smaller, more frequent orders. Grocers don’t want one big truckload rolling in once a week and produce arriving every other day. To be nimbler and keep their inventories stable, grocers are now looking for daily, smaller deliveries, with a higher focus on fresh. Liquor industry could be disrupted. With the purchase of Whole Foods, Amazon acquired more than 300 liquor licenses across 41 states. That now gives Amazon the ability to establish a distribution model and compete effectively with industry powerhouses like Southern Glazer’s Wine & Spirits and others that have owned that marketplace. I think this will drive more innovation from other players. Competition rallies. With Target’s acquisition of Shipt, it’s clear that Amazon is not the only company driving new distribution models and strategies. Many companies are looking to compete with Amazon. Shipt is in 70 cities, so Target can begin its own home delivery grocery service for customers. Target can also now scale-up its e-commerce operations to better compete with Amazon Fresh and Amazon Prime. Private labels expand. With about 40 private brands, Amazon will bring more private labeling into the food marketplace with the Whole Foods purchase. This is going to put additional pressure on food retailers because prices are www.foodlogistics.com

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SR: SOFTWARE & TECHNOLOGY continued

A WCS provides better control over tasks such as

likely to decline. And it’s going to create more market pressure on Target and others that focus heavily on brand labels.

batch Where picking Technologies Meet and wave W hat is driving technopicking, logical change in today’s

while adding efficiencies to automation that reduce the depedency on labor.”

Q:

warehouses? Changing labor force. A major issue is the shifting of labor, especially the graying workforce. The typical DC worker is getting close to retirement or retiring, and millennials and Gen Xers are not attracted to these types of jobs. This is a situation less about raising the wage due to competition and more about less people wanting to go into the field. Thus, warehouse and DC operators are looking at strategies to reduce their dependence on labor—and technology and automation are ways to get there.

Technologies like warehouse management systems (WMS) make the whole process more efficient, allowing for such tasks as directed activity, task interleaving and the like. And then I combine that with automation solutions and technologies like voice picking and retrieval machine picking that make my labor more productive. The three Ws. There are three systems to consider inside the warehouse— warehouse management systems (WMS), warehouse control systems (WCS) and warehouse execution systems (WES). From a WMS standpoint, the basic functions have stayed relatively static. What we have today is better technology, better systems and better integration with other technologies available inside the warehouse. WMS SUPPORTING SPECIFIC NEEDS providers like Manhattan IN THE FOOD INDUSTRY continue to advance their Multiple Date Tracking Recall Management products. And SAP’s ExtendFIFO Efficient Space Utilization Detailed Audit Trails Just-In-Time Process ed Warehouse Management Environmental Controls Cycle Counting product is much more robust than its previous version, which opens doors to many SAP customers. A WCS provides better control over such tasks as FIND OUT HOW WE CAN HELP YOUR WAREHOUSE batch picking and wave FUNCTION EFFICIENTLY AND TO ITS FULLEST POTENTIAL. picking, while adding effiThinkInterlink.com | 800.655.5465 | info@thinkinterlink.com ciencies to automation that

TOP OF THE

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WMS

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reduce the dependency on labor. WCS’ are necessary in automated warehouses to take information from the WMS, convert it into task-level batch and wave picks and control sortation. That information is diverted throughout the warehouse, allowing automation to work correctly. And finally, the WES is like the next generation of the WCS with more functionality and more system intelligence. It’s designed to compensate for the shortfalls of the WMS, while handling more management inside the warehouse rather than within an ERP system.

Q:

H ow can warehouse and DC operators reduce their dependency on labor? If you look at both the receiving and picking functions within a warehouse, there’s tremendous opportunity to reduce your labor while enhancing your efficiencies. Receiving. In many warehouses today, more product is coming from overseas on floor-stacked containers and moved domestically in rail cars and intermodal trailers. Thus, on the receiving end, there’s a heavy labor compowww.foodlogistics.com

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 Today’s warehouse and DC operators are looking for ways to reduce lead times and operate more efficiently.

(AGVs) and robotics can perform how many cases to pull for specific put-away tasks to the point of orders. Once pulled, the robot goes put-away before a fork operator to the next zone where another picks up the product and puts it in human picker provides instructions. storage. These technologies can be And finally, another technoloused in an automated process from gy that can be used with robots the time the product comes off are smart carts that follow the nent. It could take the trailer until it’s in the put-away picker through different zones. five or six employees location in a pallet rack within the For example, a picker may have to hand-unload a warehouse. While this is straightmultiple totes on a cart and be container or railcar. forward automation, it can reduce picking smaller items that go into And when you exthe labor necessary on a per-trailer that order. Once an order of batch amine the number of basis by 60 percent. orders is completed, the cart moves receipts per day that Picking. Warehouse picking to an operator who removes the grocery warehouses automation offers great potential totes from the cart onto a takeaway and distributors are for savings. Traditionally, picking op- conveyor, then loads the cart with handling, this has erations consist of discrete picking empty totes to begin filling the next cost impacts on the throughout the warehouse. Leading set of orders. bottom line. warehouse operators are moving There are several automation There are now technologies at toward automation using pick modstrategies and methods within the receiving dock that ules, batch picking and other warehouses and DCs to help imAutomation automated technologies. enable you to reduce prove efficiencies, lower costs and can reduce the your labor from five or Consider a multilevel reduce the dependence on labor six to two or one. A stuff- labor necessary pick module with pallet flow where talent is scarce. Leading on a per-trailer racks where multiple pallets ing unit, for example, is companies are making these investbasis by 60 of product can be placed. an automated articulatments to meet changing customer ing conveyor that moves expectations in a world where Amapercent.” Two or three batches into the trailer with the are created for the day’s zon is constantly raising the bar. laborer. The unit moves orders. By visiting a up and down depending on how the location once, an operaproduct is stacked and transports tor can pull the number the product to the person palletof cases needed for the izing it at the end of the container orders, place them onto a or trailer. Or, if products are being conveyor that takes them SHIPPING SUPPLY SPECIALISTS cross-docked, product can be to a sorter. The WCS/WES loaded into a sorter. The unit can then sorts those cases also work directly with a robot based on specific orders. assigned to a put-away role within From there, they’re sent MATERIAL HANDLING the warehouse. down lines and placed on a In some cases, automation is pallet for a truck. DependPRODUCTS IN STOCK used to move product from the ing on how manual your point of receipt to put-away. Thus, processes are, this can be autonomous guided vehicles a 60 percent to 70 percent labor improvement. Additional technologies ORDER BY 6 PM FOR such as voice picking, RF SAME DAY SHIPPING devices, including ring scanners and wrist scanners, and pick-to-light, can be used to allow handsfree picking and increase efficiency. In a discrete picking environment, robots can be used to transport a set of pallets or carts throughout the COMPLETE CATALOG 1-800-295-5510 warehouse where systems instruct the robots on

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SECTOR REPORTS OCEAN PORTS & CARRIERS

BY AMY WUNDERLIN

THE

TECHNOLOGICAL REVOLUTION OF THE OCEAN CARRIER Ocean carriers are looking for new ways to improve communications, information accuracy, and data acquisition and sharing. The IoT, artificial intelligence and more are making that dream a reality.

L

ast but not least, the old saying goes. And that certainly seems to be true for the ocean carrier sector. The industry is the last transportation mode to truly embrace digitization in a meaningful way, and as times change, it’s no surprise Maersk Line is leading the way. In July, the ocean liner launched a solution called Remote Container Management (RCM), providing visibility of a refrigerated container’s location and the atmospheric conditions inside throughout its journey. RCM gives customers shipping refrigerated cargo an unprecedented understanding of their supply chain—something they have long been asking for. While this is good news for shippers, and ultimately the consumer, it means the industry’s other major carriers must now follow suit or risk losing market share. “There’s almost an impetus or a real push to (find a solution), because if you’re one of the big avocado importers and Maersk comes to you and says, ‘Well, I can give you all the temperature data real time, even on my ship,’ It’s not like (shippers) haven’t and you go to asked for the data before; the next one in they’ve always the top 10 and say, ‘Well, can wanted it.” you do that?’ Don Miller, vice president of global sales and marketing, Globe Tracker And they say, ‘No.’ Well, where are you going to go?” explains Don Miller, vice president of global sales and marketing at Globe Tracker, a provider of solutions designed to

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Globe Tracker’s Sense Reefer, which provides real-time reefer monitoring, was designed around repair and maintenance. They quickly realized, however, the industry was more concerned about the cargo than the container.

remotely track, monitor and maintain supply chain assets. “It’s not like (shippers) haven’t asked for the data before; they’ve always wanted it. It’s just a matter of (Maersk) opening up a can of worms, if you will, and now everyone really needs these solutions,” he adds. And while the move by Maersk Line is certainly accelerating the sector’s move toward a digital supply chain, it is not the only factor contributing to innovation. In the food supply chain, it’s not solely about customer assurance (though that certainly is top of mind). Logistics providers also must comply with numerous federally-mandated regulations, such as the Food Safety Modernization Act (FSMA), as well as adhere to highly sensitive temperature standards for per-

ishable commodities. Consumers are driving innovation in many industries, but with regards to the food and beverage sector, you are seeing faster adoption of technologies to optimize the supply chain. Not only is greater supply chain visibility a strategic advantage for the industry, but a matter of safety and health.

Perfect Timing For a company like Globe Tracker, the timing could not be more perfect for a technological revolution in the way ocean carriers transport perishable goods. The software provider’s Sense Reefer, which provides real-time reefer moniwww.foodlogistics.com

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SR: OCEAN PORTS & CARRIERS continued

Real-time monitoring down to the pallet level allows distributors to know the exact shelf life of an item before it even leaves the container.

Sensors are one of the most exciting innovations to happen with fruits and vegetables.” Don Miller, vice president of global sales and marketing, Globe Tracker

46

toring and control, data and alarms, is now in its second generation, which included the addition of pallet-level sensors. “This version is able to provide data inside the container from an individual pallet and even inside a box on the pallet. Light sensors can actually detect if someone even opens a box inside your container, if you wanted to have that specific demand,” Miller says. From a food standpoint, Miller believes these sensors are one of the most exciting innovations to happen with fruits and vegetables, which have a high loss during transit. “We are able to put multiple sensors in each pallet and condition monitor everything from when it goes into the container and comes out. What becomes exciting there is that we can create a first in, first out model for the pallets coming off the ocean because…we can monitor each pallet for damage and tilt and humidity and know what was affected where. Get a picture of the inside of the container, if you will,” Miller adds. This in turn makes it easier for the distributor to determine the exact shelf life of an item before it is even off the container, thus realiz-

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ing more sales of the product. Sense Reefer was initially created primarily to address issues around repair and maintenance, but as Globe Tracker looked at the markets and what people were asking for, even from the shipping and third-party logistics (3PL) side, it was more about the cargo than it was about the actual container or equipment. “We had to introduce a technology that would allow us to communicate through the refrigerated container wall right into the cargo space and to every pallet, even when the reefer is unplugged,” Miller says. “We made it possible with our device that it charges itself when the reefer is powered, so there’s no explanation of what the variation in temperatures are, and there’s no explanation of why you have no data because you’re in transition from vessel to port. You have an opportunity for data all the way through, which is particularly appealing for pharmaceuticals, but also food.”

Making Sense of Data Real-time data and visibility has never been more important than in

today’s consumer demand-driven environment, especially in the transportation of food and beverage. But having data and actually understanding that data are two very different things. ClearMetal, which has self-titled itself as a predictive logistics company, is helping companies to make sense of supply chain data and get advanced visibility and predictive visibility into their supply chain’s flow by utilizing an artificial intelligence (AI)-based platform. “Our platform cleans that data. It structures it. It normalizes that information and allows companies in the supply chain to finally make valuable use of the data that they have in their hands,” explains Adam Compain, founder and CEO of ClearMetal. “Second, what we do is we provide applications that allow supply chain professionals to make the most efficient decisions on how to order cargo, how to watch those shipments move across the world, predict when exceptions might go awry, and when those shipments will finally arrive at their destination. And basically also predict the behavior of the different logistics providers that are serving those shippers.” The third benefit of ClearMetal’s AI-based solution is its predictive visibility capabilities. Shippers are able to predict much farther in advance, and with much higher granularity of certainty, what’s likely to go awry in the supply chain or when shipments will finally arrive. “Supply chain experts can actually make better decisions, plan strategically, manage exceptions before they actually happen, and deliver far better customer service to the recipients of those shipments,” notes Compain. A shift in production upstream in the supply chain as well as the Amazon Effect downstream is putting new pressures on both logistics providers and the shippers to run www.foodlogistics.com

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SR: OCEAN PORTS & CARRIERS continued

In some cases, the customers are driving innovation, but with food

you have regulators as well.” Brian Nella, director of marketing, ClearMetal

much leaner supply chains. Many logistics providers, including ocean carriers, Compain says, are waking up to the fact that in this new digital era they have to use a fundamentally different type of technology and approach than they used in the past. “What we’re seeing with transportation and logistics specifically, is there’s an interesting use case, because everyone needs predictability. Everyone needs visibility and traceability,” says Brian Nella, director of marketing for ClearMetal. “And if you think about food, you’re dealing with perishables. It’s not just customers that are seeking assurance. You have regulators and safety compliance rules around traceability and ingredients. In

some cases, the customers are driving innovation, but in others, like with food, you actually have regulators as well.” Nella believes the food and beverage industry may actually see innovation and a movement toward a digital supply chain faster because of the multiple pressures the sector faces. “Supply chain visibility is no longer just a strategic advantage, but it’s also sometimes a matter of health and safety,” he adds.

Customers Expect Visibility Global trade is one of the biggest and oldest industries in the world that still operates like it is 1970, according to Nerijus Poskus, vice president of global pricing and procurement at Flexport, a freight forwarding and customs broker. “Flexport is challenging the status quo by applying a modern

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software layer as part of our freight forwarding service, enabling our team to be efficient and allowing importers to have full visibility and control into their shipments every step of the way,” he explains. In a nutshell, Flexport’s software enables them to provide real-time shipment updates and SKU-level visibility for each of their clients’ shipments, which requires a keen eye in data integrity and operations. “This kind of transparency helps our customers better understand their supply chain activities (e.g., landed cost of goods) and make even smarter business decisions,” Poskus adds. And while automating transaction costs is not a new concept, Flexport is innovative in the way it has combined machine learning with human expertise. Most companies have customer support teams that operate in a silo. Flexport operates in autonomous squads, with representation from sales, account management, operations and customs compliance. Each squad owns its client relationships from end-to-end and is empowered to make their own decisions on what is best for the customer and the business without needing to appeal to a higher authority. “We operate in a complex industry, and that means that every shipment we manage will need an expert involved,” notes Poskus. “It’s this combination of human expertise and machine intelligence that allows us to provide the most value to our customers and set us apart from our competitors.” Poskus believes this level of transparency and reliability soon will become the norm for ocean carriers, as customers will expect visibility into their partner’s operations on their behalf. “We envision a world without the significant bottlenecks we see today,” says Poskus. “To eradicate all of those lags…we are open to new technologies and to disruption, and we’re excited about bringing in modern techniques to help the industry adapt for this decade.” www.foodlogistics.com

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FOOD (AND MORE) FOR THOUGHT

BY MARK S. ALLEN

The AMERICAN DREAM The Tax Cuts and Jobs Act will bring relief to millions of American businesses, none more so than the foodservice industry.

Mark S. Allen is president & CEO of the International Foodservice Distributors Association (IFDA), a McLean, Virginia-based trade organization representing the $300 billion foodservice distribution industry. Allen oversees IFDA’s day-to-day operations, including all initiatives in education, research and government relations.

50

A

merican business owners can breathe a sigh of relief—comprehensive tax reform has passed. The Tax Cuts and Jobs Act is a historic tax reform package that will bring relief to millions of American businesses. And thanks to House Speaker Paul Ryan (R-Wis.), small business owners won’t have to worry if they can keep their businesses running while paying tax burdens of nearly 40 percent. The Tax Cuts and Jobs Act is more than just smart legislation. It’s about reviving the American Dream. Just take a look at the industry I represent, foodservice distribution. While it may not be coming up with the latest tech gadget, it’s certainly hard at work, often behind the scenes, making dining out all across America possible. Foodservice distributors serve many family-owned businesses, support their communities, and provide high-quality jobs to their fellow Americans. They deserve to keep more of their hard-earned money in their communities. With a combined annual sales volume of almost $300 billion, foodservice distributors are vital drivers of the American economy. Each day, they work to make sure that professional kitchens across the country have fresh, high-quality products to serve their customers, whether it’s dinner at your favorite local restaurant, a quick lunch at a national chain, or breakfast at a hospital or school cafeteria. This is no small task.

FOOD LOGISTICS | JANUARY/FEBRUARY 2018

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was not reaching its full potential. Nowhere is this felt more than by Foodservice distributors are foodservice distributors. In this responsible for maintaining a safe current climate, distributors are and efficient supply chain, inspectfinding themselves at a disadvaning, tracking, storing and managing tage, laying out huge sums of capital every product to ensure safety and to keep up with innovation and the peak freshness, each and every ever rising costs of doing business. time. This is an incredible responsi- While our economy has seen bility, given that 225 million meals some improvement recently, many are purchased away hard-working business ownfrom home in the United ers are still not feeling the The Tax States every single day. Cuts and Jobs benefits. There is no better Foodservice distributors way to spur the economy Act is more earn every penny they than just smart than driving change that make. Despite averaggrows local businesses. legislation. ing pre-tax profits of 2 The good news is that It’s about percent, foodservice we are now taking steps reviving distributors pay their to fix this problem. This the employees well above tax reform package is just the national average. For American the start. Now foodservice Dream.” distributors can keep more example, foodservice distribution delivery of what they earn. They will drivers earn average annual wages be able to reinvest more money in of $62,854 and receive competitheir businesses, continue to adopt tive benefits. the latest industry innovations, Foodservice distributors, on all while providing high-quality average, currently pay an effective products to their customers, and in tax rate of 37 percent. This high turn, a top-notch dining experience rate was a result of our broken, for the American consumer. burdensome tax code, which has So, I extend a heart-felt thank grown to be unreasonably complex, you to Speaker Ryan and Congress increasingly unfair and filled with for leading the way to pass this vital special interest loopholes. Under piece of legislation. Because of you, the old system, American companies millions of Americans can continue were taxed at the highest rate in the to build successful businesses, industrialized world, and the govern- serve their communities, and give ment took even more from certain their employees a better life. The businesses like foodservice distribAmerican Dream is still alive. You utors. As a result, economic growth helped make that possible. www.foodlogistics.com

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