Dr. Terry L. Esper is an associate professor of logistics at the Fisher College of Business of The Ohio State University. He has published several articles on issues associated with retail logistics and supply chain management strategy in leading academic and managerial outlets.
We’ve all seen the news. The rallies and protests triggered by the killing of George Floyd have taken center stage all across this country, as persons of all races and ethnicities gather in city streets to express frustration, hurt, and anger. These are, indeed, tense and “charged” times. Times that call for tough conversations within communities, about how racism, discrimination, biases, and differences in viewpoints shape the ways in which those communities function. This includes the supply chain management (SCM) community.
We have had long-held conversations regarding gender disparities in SCM, but the widescale focus on the George Floyd incident opens a door for us to bring the race conversation to the forefront. There are many things that we could discuss on race, but as a researcher of last-mile logistics and home delivery services, I’d like to raise one concerning issue for us to talk about, ponder, and hopefully act on.
I’ve been in SCM for over 25 years. I started as an intern for a state department of transportation, worked for a major carrier in claims and billing, launched my professional career managing small package transportation for a major corporation, and throughout these experiences, worked my way through college and graduate school, eventually earning a PhD in SCM. For the last 20 years, I’ve been in the SCM academic community, serving on faculty at many of the field’s most well-respected university programs. In this capacity I not only educate emerging SCM talent, but I also spend considerable time studying strategic SCM issues (like last-mile logistics) and working with several major corporations in the process. And, I must admit...In my many years of observing our industry from these various viewpoints and perspectives, never... never have I ever... been as concerned and fearful for the safety of frontline logistics and transportation workers as I am today.
Let me be more specific by adding another of my characteristics to my credentials—I’m a black man. It is that part of my identity that triggered this piece, because while I am generally concerned about the safety of all frontline logistics workers, especially in light of COVID-19, I am most and directly concerned about my fellow black men in our SCM community that are charged with the task of providing last-mile delivery services. Let me also be clear in saying that this is not a new concern. It’s been brewing for some time. But a series of recent events, including the situation in Minneapolis, Minnesota, have brought my concern to a boiling point—prompting me to pull up a chair and attempt to start a conversation.
In case you missed this story in the news... a black male delivery driver was recently stopped by members of a neighborhood community demanding answers regarding his reasons for being there. These weren’t simple inquiries, mind you... they were demands, laced with threats of calling law enforcement, apparently out of concern for the safety of their neighborhood. The driver, recording it all via a mobile device, was eventually “allowed to leave”... but only after the delivery recipient intervened, assuring neighbors that the driver had a valid reason for being in their community.
Fast forward a few days, and another such incident occurs. In this case, a pair of FedEx independent contractors, black men in full FedEx uniform, deliver a package to a home. Upon leaving, a resident of the home chased and confronted the men, yelling threats and verbal attacks. After law enforcement intervention, the resident claimed that he had done so out of fear that these men were potential burglary threats. Again, the incident was video captured by one of the drivers.
Fast forward another week, and yet another example surfaces. A black man attempting a DoorDash delivery in an Arizona apartment complex was met by a resident with a drawn firearm. The resident claimed to be afraid of the delivery worker and held him at gunpoint until law enforcement arrived.
Now, some would classify these as isolated incidents, perhaps blown out of proportion by social media retweets and reposts. Some might argue that these are nothing more than simple misunderstandings that were captured and shared, in order to highlight one side of the story. I disagree. Either way, this disturbing pattern allows for a broader conversation because what I know for sure is that these situations represent the oft unspoken fears and concerns that many black men shoulder when navigating neighborhoods to make deliveries.
Stories abound where African Americans, particularly men, are reported to law enforcement for what is found to be benign occurrences, simply because their presence and/or disagreement are interpreted as a threat of significant harm. A most recent example involves Amy Cooper, a New York Central Park patron, who, upon being asked to leash her dog by a black man, called law enforcement and falsely claimed that her life was in danger...all while being recorded. This story was shocking to many, but came as no surprise to black men. We know that we are often viewed as a threat. It is an awareness that we carry, and an unfortunate tax of physicality that we pay. Yet, as the recent killings of Ahmaud Arbery and George Floyd have so hurtfully illustrated, we also know that our traipsing about city streets can be interpreted as threatening, and can lead to loss of life, even if law enforcement is involved.
And, that is what I want us... the SCM community... to consider.
I am concerned. The sheer numbers suggest an increased likelihood of situations similar to the delivery examples above. As we have seen, COVID-19 has caused more marketplace consumers to shift to online retail for food and product purchases, which means an increase in home deliveries, and an increased potential for delivery-related confrontations involving African American drivers. Furthermore, many online retailers and restaurants are turning to crowdsourced home-delivery service providers for last mile logistics, which means an increase in home deliveries made by drivers in “ordinary” vehicles wearing “ordinary” clothes. And, in the event that these ordinarily clothed delivery drivers are black men, there is unfortunate likelihood that we will see more reported repeats of the aforementioned delivery incidences. Perhaps with even worse outcomes, especially if not recorded.
SCM community, let’s take this seriously! Yes, the leading story of the day involves law enforcement in Minneapolis, but this emerging pattern of delivery-related issues suggests we also have problems in our SCM community. The sad truth is that, for black male delivery drivers, simply circling a neighborhood to find an address location, or opening a screen door in order to secure a package, comes with a real threat of being accused, accosted, arrested, or dare we even say...assaulted or killed. I ask that we not turn a deaf ear or blind eye to this issue, especially in light of the heightened tensions in our country. I wish I had a list of solutions to provide, but I don’t. I can only ask that we expand our thinking regarding driver safety. In addition to investing in things like personal protective equipment (PPE), advanced technologies, and updated delivery equipment as ways of enhancing driver safety, let’s also consider implementing processes and standards to combat the safety threats that biases and racial stereotypes pose for frontline delivery drivers—especially those that are African American and men.
Just 29% of supply chain organizations have the competitive characteristics they’ll need for future readiness, according to a Gartner survey released Tuesday. The survey focused on how organizations are preparing for future challenges and to keep their supply chains competitive.
Gartner surveyed 579 supply chain practitioners to determine the capabilities needed to manage the “future drivers of influence” on supply chains, which include artificial intelligence (AI) achievement and the ability to navigate new trade policies. According to the survey, the five competitive characteristics are: agility, resilience, regionalization, integrated ecosystems, and integrated enterprise strategy.
The survey analysis identified “leaders” among the respondents as supply chain organizations that have already developed at least three of the five competitive characteristics necessary to address the top five drivers of supply chain’s future.
Less than a third have met that threshold.
“Leaders shared a commitment to preparation through long-term, deliberate strategies, while non-leaders were more often focused on short-term priorities,” Pierfrancesco Manenti, vice president analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results.
“Most leaders have yet to invest in the most advanced technologies (e.g. real-time visibility, digital supply chain twin), but plan to do so in the next three-to-five years,” Manenti also said in the statement. “Leaders see technology as an enabler to their overall business strategies, while non-leaders more often invest in technology first, without having fully established their foundational capabilities.”
As part of the survey, respondents were asked to identify the future drivers of influence on supply chain performance over the next three to five years. The top five drivers are: achievement capability of AI (74%); the amount of new ESG regulations and trade policies being released (67%); geopolitical fight/transition for power (65%); control over data (62%); and talent scarcity (59%).
The analysis also identified four unique profiles of supply chain organizations, based on what their leaders deem as the most crucial capabilities for empowering their organizations over the next three to five years.
First, 54% of retailers are looking for ways to increase their financial recovery from returns. That’s because the cost to return a purchase averages 27% of the purchase price, which erases as much as 50% of the sales margin. But consumers have their own interests in mind: 76% of shoppers admit they’ve embellished or exaggerated the return reason to avoid a fee, a 39% increase from 2023 to 204.
Second, return experiences matter to consumers. A whopping 80% of shoppers stopped shopping at a retailer because of changes to the return policy—a 34% increase YoY.
Third, returns fraud and abuse is top-of-mind-for retailers, with wardrobing rising 38% in 2024. In fact, over two thirds (69%) of shoppers admit to wardrobing, which is the practice of buying an item for a specific reason or event and returning it after use. Shoppers also practice bracketing, or purchasing an item in a variety of colors or sizes and then returning all the unwanted options.
Fourth, returns come with a steep cost in terms of sustainability, with returns amounting to 8.4 billion pounds of landfill waste in 2023 alone.
“As returns have become an integral part of the shopper experience, retailers must balance meeting sky-high expectations with rising costs, environmental impact, and fraudulent behaviors,” Amena Ali, CEO of Optoro, said in the firm’s “2024 Returns Unwrapped” report. “By understanding shoppers’ behaviors and preferences around returns, retailers can create returns experiences that embrace their needs while driving deeper loyalty and protecting their bottom line.”
Facing an evolving supply chain landscape in 2025, companies are being forced to rethink their distribution strategies to cope with challenges like rising cost pressures, persistent labor shortages, and the complexities of managing SKU proliferation.
1. Optimize labor productivity and costs. Forward-thinking businesses are leveraging technology to get more done with fewer resources through approaches like slotting optimization, automation and robotics, and inventory visibility.
2. Maximize capacity with smart solutions. With e-commerce volumes rising, facilities need to handle more SKUs and orders without expanding their physical footprint. That can be achieved through high-density storage and dynamic throughput.
3. Streamline returns management. Returns are a growing challenge, thanks to the continued growth of e-commerce and the consumer practice of bracketing. Businesses can handle that with smarter reverse logistics processes like automated returns processing and reverse logistics visibility.
4. Accelerate order fulfillment with robotics. Robotic solutions are transforming the way orders are fulfilled, helping businesses meet customer expectations faster and more accurately than ever before by using autonomous mobile robots (AMRs and robotic picking.
5. Enhance end-of-line packaging. The final step in the supply chain is often the most visible to customers. So optimizing packaging processes can reduce costs, improve efficiency, and support sustainability goals through automated packaging systems and sustainability initiatives.
That clash has come as retailers have been hustling to adjust to pandemic swings like a renewed focus on e-commerce, then swiftly reimagining store experiences as foot traffic returned. But even as the dust settles from those changes, retailers are now facing renewed questions about how best to define their omnichannel strategy in a world where customers have increasing power and information.
The answer may come from a five-part strategy using integrated components to fortify omnichannel retail, EY said. The approach can unlock value and customer trust through great experiences, but only when implemented cohesively, not individually, EY warns.
The steps include:
1. Functional integration: Is your operating model and data infrastructure siloed between e-commerce and physical stores, or have you developed a cohesive unit centered around delivering seamless customer experience?
2. Customer insights: With consumer centricity at the heart of operations, are you analyzing all touch points to build a holistic view of preferences, behaviors, and buying patterns?
3. Next-generation inventory: Given the right customer insights, how are you utilizing advanced analytics to ensure inventory is optimized to meet demand precisely where and when it’s needed?
4. Distribution partnerships: Having ensured your customers find what they want where they want it, how are your distribution strategies adapting to deliver these choices to them swiftly and efficiently?
5. Real estate strategy: How is your real estate strategy interconnected with insights, inventory and distribution to enhance experience and maximize your footprint?
When approached cohesively, these efforts all build toward one overarching differentiator for retailers: a better customer experience that reaches from brand engagement and order placement through delivery and return, the EY study said. Amid continued volatility and an economy driven by complex customer demands, the retailers best set up to win are those that are striving to gain real-time visibility into stock levels, offer flexible fulfillment options and modernize merchandising through personalized and dynamic customer experiences.
Geopolitical rivalries, alliances, and aspirations are rewiring the global economy—and the imposition of new tariffs on foreign imports by the U.S. will accelerate that process, according to an analysis by Boston Consulting Group (BCG).
Without a broad increase in tariffs, world trade in goods will keep growing at an average of 2.9% annually for the next eight years, the firm forecasts in its report, “Great Powers, Geopolitics, and the Future of Trade.” But the routes goods travel will change markedly as North America reduces its dependence on China and China builds up its links with the Global South, which is cementing its power in the global trade map.
“Global trade is set to top $29 trillion by 2033, but the routes these goods will travel is changing at a remarkable pace,” Aparna Bharadwaj, managing director and partner at BCG, said in a release. “Trade lanes were already shifting from historical patterns and looming US tariffs will accelerate this. Navigating these new dynamics will be critical for any global business.”
To understand those changes, BCG modeled the direct impact of the 60/25/20 scenario (60% tariff on Chinese goods, a 25% on goods from Canada and Mexico, and a 20% on imports from all other countries). The results show that the tariffs would add $640 billion to the cost of importing goods from the top ten U.S. import nations, based on 2023 levels, unless alternative sources or suppliers are found.
In terms of product categories imported by the U.S., the greatest impact would be on imported auto parts and automotive vehicles, which would primarily affect trade with Mexico, the EU, and Japan. Consumer electronics, electrical machinery, and fashion goods would be most affected by higher tariffs on Chinese goods. Specifically, the report forecasts that a 60% tariff rate would add $61 billion to cost of importing consumer electronics products from China into the U.S.