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This Week in Logistics News (June 10 – 16)

By June 16, 2023Uncategorized

Two months ago, I assumed this was going to be championship week for the city of Boston. The Bruins were coming off a historic season with an NHL all-time best 65 wins and 135 points. The team was so dominant that the Carolina Hurricanes, who finished with the league’s second-best record, were a full 13 wins and 22 points behind. It seemed like a run to the Stanley Cup was inevitable. At the same time, the Celtics finished with the second-best record in the Eastern Conference. With the Milwaukee Bucks opening round loss, the Celtics would have home court advantage throughout the playoffs, with a strong chance to bring home championship number 18. Fast forward two months, and the Bruins had an epic first round collapse against the Panthers and the Celtics couldn’t win at home. Instead of two championship parades, Boston fans could only sit back and watch two franchises win their first ever championships. Congratulations to the Las Vegas Golden Knights and Denver Nuggets. And now on to this week’s logistics news.

Survey: supply chain professionals wary of rising operating costs
I-95 collapse to upend shipping for months
Robots are looking to bring human touch to warehouses
White House seeks to ease growing strains in port labor talks
US SMBs look closer to home for suppliers
Construction boom fuels surge in excavator sales

A 72 percent majority of supply chain professionals are experiencing significant challenges across their organizations, from fuel costs to inflation to various delays outside their control, according to a report from last mile delivery software provider DispatchTrack. By the numbers, the top challenges supply chain leaders are currently experiencing include fuel costs (59 percent), inflation (46 percent), delays outside of their control (41 percent), unpredictability (38 percent), driver shortages (32 percent), and losing business due to the economy (30 percent). The data also signaled that supply chain leaders expect ongoing increases in operating costs, as 6 in 10 respondents expect operating costs to be 10 percent to 20 percent higher this year than in past years. But despite those challenges and uncertainties, the majority of supply chain leaders are optimistic about the future, with 61 percent reporting a positive business outlook for 2023. In the coming year, over half of supply chain organizations plan to accelerate technology adoption (57 percent) as well as hire more drivers and increase delivery capacity (55 percent).

The collapse of a section of Interstate 95 in Philadelphia will cause “major disruption” in the region just as the summer travel season begins, US Transportation Secretary Pete Buttigieg said. The failure will affect the movement of people and goods, he said Monday at an annual conference of the American Council of Engineering Companies in Washington. His agency will back the rebuilding with financial and technical support, he said. A section of the highway, the longest north-south interstate on the East Coast, collapsed during a tanker-truck fire on Sunday. Northbound and southbound lanes will be closed for months, according to Pennsylvania Governor Josh Shapiro, who on Monday signed a disaster proclamation to free emergency funding. “This is not just about commutes,” Buttigieg said. “This is also about supply chains, about 150,000 vehicles a day, and a good percentage of that is trucking. For both vehicle passenger traffic, and for goods moving supply chains, this is going to be a major disruption in that region.”

Humanoid robots are on their way to warehouses as companies start to move beyond the disembodied arms, moving trays and other machines aimed at speeding up logistics operations. Agility Robotics, Figure AI and Boston Dynamics are among companies designing robots more closely modeled on human beings for use in distribution centers. The new machines are being engineered with the ability to walk around warehouses, reach items high on shelves, crouch to put things down and pick up and move boxes, defying some of the physical limits on automation in the industrial world. The robot developers say their devices will help warehouse operators mitigate labor shortfalls and eliminate the need to redesign warehouses to match the capabilities of machines.

The Biden administration is trying to ease tensions between the West Coast dockworkers’ union and port employers as escalating strains in contract negotiations threaten to reach cargo operations and obstruct the movement of goods through some of the country’s biggest trade gateways. The two sides agreed to a grace period starting Tuesday morning after Labor Secretary-designate Julie Su spent Monday shuttling between the union and employers, according to a person familiar with the talks. The agreement paused dockworker job actions potentially through the end of this week. The actions, which port employers say include work slowdowns and failure to report to cargo terminals from Southern California to Seattle, have stalled shipments ranging from inbound consumer goods to outbound agricultural commodities since late May. Su is trying to cool off the two sides as employers grow increasingly frustrated with dockworkers disrupting operations. “She is working towards keeping lines of communication open and working towards a final agreement,” said another person familiar with the talks.

Nearly three quarters (74 percent) of U.S. small and midsize businesses (SMBs) plan to shift “most or all” of their suppliers to North America as the nearshoring trend gains steam, according to a poll of 300 supply chain managers conducted by the business software marketplace Capterra. The move is well underway for many businesses, as U.S. SMBs have switched an average of four suppliers from overseas to ones in North America in the past two years, Capterra’s “2023 Supplier Relationships Survey” found. However, with each SMB maintaining relationships with an average of 27 suppliers, the process has a ways to go. The industries that have made the most progress in nearshoring so far include: consumer electronics, food/beverage, and automotive, while apparel and cosmetics lag behind. Companies say they are motivated to switch to domestic suppliers in order to cure three main headaches: unreliable delivery timeframes (63 percent), inconsistent quality of delivered goods (54 percent), and insufficient sustainability (54 percent). Indeed, nearshoring can help create shorter delivery time frames, more consistent product quality, and more eco-friendly business practices, Capterra said. But the company noted that switching vendors is not a quick or easy process.

Construction excavators are tearing through the equipment market. Companies including Deere, Caterpillar, and CNH Industrial are expanding or upgrading their models of the earth-moving machines that function as jack-of-all-trades at construction sites. Building and infrastructure projects are driving historic demand for excavators. Sales of excavators in North America last year rose 23 percent over 2021 to 41,320 machines, the second-straight year of record sales, said Off-Highway Research. The London-based consulting firm projects sales will rise another 5% this year, boosted by federal spending on battery plants for electric vehicles, road and bridge repairs and other nonresidential construction. Excavators, especially small models, increasingly are replacing backhoes and front-end loaders that traditionally have been used to dig holes or move piles of dirt, construction company executives said. Rising excavator demand also is being fueled by labor shortages, according to contractors, as older, higher-skilled workers retire or leave for other jobs.

That’s all for this week. Enjoy the weekend and the song of the week, Ain’t That a Shame by Fats Domino.

The post This Week in Logistics News (June 10 – 16) appeared first on Logistics Viewpoints.

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