Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Air cargo industry group The International Air Transport Association (IATA) is urging governments to begin planning now with industry stakeholders to create supply chains capable of distributing a future Covid-19 vaccine, warning of “potentially severe” capacity constraints in transporting vaccines by air.
Even in years without major pandemics, air cargo plays a key role in the annual distribution of vaccines through well-established global time- and temperature-sensitive distribution systems, IATA’s director general and CEO, Alexandre de Juniac, said in a release.
But that process will likely be far more complex for a potential coronavirus vaccine, which still has major unknown variables, such as the number of doses, temperature sensitivities, and manufacturing locations. To cope with those challenges, it is clear that the scale of activity will be vast, cold chain facilities will be required, and delivery to every corner of the planet will be needed, IATA said.
According to IATA’s calculations, providing a single vaccine dose to the world’s 7.8 billion people would fill 8,000 747 cargo aircraft. Of course, developed economies with local manufacturing capacity will offset many of those flights through land transportion, but the estimate underlines the size of the challenge.
“Safely delivering Covid-19 vaccines will be the mission of the century for the global air cargo industry. But it won’t happen without careful advance planning. And the time for that is now,” de Juniac said. “We urge governments to take the lead in facilitating cooperation across the logistics chain so that the facilities, security arrangements and border processes are ready for the mammoth and complex task ahead.”
In addition, those challenges come at a time when the air cargo sector is mired at historically low capacity levels, due to coronavirus travel restrictions and travelers’ wariness of boarding airplanes. Those factors have led airlines to ground large numbers of passenger jets, which typically carry some 60% of global air freight volumes as “belly cargo.”
According to IATA, additional challenges will include boosting cargo security to guard valuable vaccine shipments from theft, and easing border restrictions to streamline regulatory approvals, security measures, appropriate handling, and customs clearance.
“Delivering billions of doses of vaccine to the entire world efficiently will involve hugely complex logistical and programmatic obstacles all the way along the supply chain,” Seth Berkley, CEO of Gavi, the Vaccine Alliance, said in a release. “We look forward to working together with government, vaccine manufacturers, and logistical partners to ensure an efficient global roll-out of a safe and affordable Covid-19 vaccine.”
Air freight specialists bulk up pharma networks
Some logistics providers are already preparing for the looming challenge of global vaccine distribution.
DHL Global Forwarding, Deutsche Post DHL Group’s air and ocean freight specialist, today announced a series of technology enhancements to its Life Sciences and Health Care logistics services. The Miami-based company rolled out: a new iteration of its Lane Risk Assessment software tool that incorporates data from sensors and internet of things (IoT) devices; a digitalized version of its Standard Operating Procedures (SOPs) for biopharmaceutical shipments; and a new interface for its DHL LifeTrack tracking portal for temperature controlled shipments.
“At DHL Global Forwarding we partner with our life sciences and healthcare customers to develop ground-breaking technologies to facilitate their logistical needs. Due to the unprecedented challenges unchained by the pandemic and its aftermath, it prompted us to expedite the rollout of these innovations, in order to more quickly support our customers to navigate this fluid environment,” Patricia Cole, global head of temperature management solutions at DHL Global Forwarding, said in a release.
Also, the freight forwarding and logistics provider Kuehne + Nagel today announced recent investments to its global pharmaceutical and healthcare network, saying it has opened airside pharma & healthcare hubs in Brussels, Belgium, and Johannesburg, South Africa. Those facilities support direct tarmac access, which is critical for handling temperature-sensitive products with very low to no stability outside of their stated temperature ranges, the Swiss firm said.
"Today, new pharma & healthcare products tend to be more valuable, more temperature-sensitive, and have additional requirements for storage and transportation conditions,” Yngve Ruud, member of the management board of Kuehne+Nagel, responsible for Air Logistics, said in a release. “Such capabilities and facilities are not easily available globally.The new hubs in Brussels and Johannesburg will ensure that our pharma & healthcare customers can fully rely on Kuehne+Nagel to handle the specific challenges of integrity as well as provide end-to-end visibility and regulatory compliance along the logistics journey of their sensitive products.”
J.B. Hunt President and CEO Shelley Simpson answers a question from the audience at the Tuesday afternoon keynote session at CSCMP's EDGE Conference. CSCMP President and CEO Mark Baxa listens attentively to her response.
Most of the time when CEOs present at an industry conference, they like to talk about their companies’ success stories. Not J.B. Hunt’s Shelley Simpson. Speaking today at the Council of Supply Chain Management Professionals’ (CSCMP) annual EDGE Conference, the trucking company’s president and CEO led with a story about a time that the company lost a major customer.
According to Simpson, the company had a customer of their dedicated contract business in 2001 that was consistently making late shipments with no lead time. “We were working like crazy to try to satisfy them, and lost their business,” Simpson said.
When the team at J.B. Hunt later met with the customer’s chief supply chain officer, they related all they had been doing for the company. “We told him that we were literally sitting our drivers and our trucks just for you, just to cover your shipments,” Simpson said. “And he said to us, ‘You never shared everything you were doing for us.’”
Out of that experience, came J.B. Hunt’s Customer Value Delivery framework. This framework, according to Simpson, provides a roadmap for creating value and anticipating customer needs.
Framework for Excellence
J.B. Hunt created the above framework to help them formulate better relationships with customers.
The framework consists of five steps:
Understand customer needs: It all starts, according to Simpson, with building a strong relationship with the customer and then using the information gained from those discussions to build a custom plan for the customer.
Deliver expectations: This step involves delivering on the promises made in that custom plan.
Measure results: J.B. Hunt believes that they are not done when freight makes it to the destination. They also need to measure how successful they were versus what the customer expected from them.
Communicate performance: This step involves a two-way exchange, where J.B. Hunt walks the customer through their performance and gets verbal agreement on whether or not they have met the customer’s needs.
Anticipate new value: Here J.B. Hunt looks at what they are hearing from their customer today and then uses that information to derive what the customer may be looking for in the future.
Simpson said the most important part of the process is the fourth step, communicating performance (perhaps reflecting the piece that went wrong in that initial failed customer relationship).
Not only can this framework be used to drive excellence in a company, but it can also be adapted as a model for driving personal excellence, Simpson said. Instead of understanding the customer needs, the process starts with understanding yourself: what your strengths and interests are. This understanding helps drive a personal development plan and personal goals for the year, which can be measured and assessed. For example, each year, Simpson gives herself a letter grade on each of her personal goals and communicates her assessment back to her boss. She has also found it helpful to anticipate where opportunities lie beyond what she is personally doing.
Confronted with the closed ports, most companies can either route their imports to standard East Coast destinations and wait for the strike to clear, or else re-route those containers to West Coast sites, incurring a three week delay for extra sailing time plus another week required to truck those goods back east, Ron said in an interview at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
However, Uber Freight says its latest platform updates offer a series of mitigation options, including alternative routings, pre-booked allocation and volume during peak season, and providing daily visibility reports on shipments impacted by routings via U.S. east and gulf coast ports. And Ron said the company can also leverage its pool of some 2.3 million truck drivers who have downloaded its smartphone app, targeting them with freight hauling opportunities in the affected regions by pricing those loads “appropriately” through its surge-pricing model.
“If this [strike] continues a month, we will see severe disruptions,” Ron said. “So we can offer them alternatives. We say, if one door is closed, we can open another door? But even with that, there are no magic solutions.”
Turning around a failing warehouse operation demands a similar methodology to how emergency room doctors triage troubled patients at the hospital, a speaker said today in a session at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
There are many reasons that a warehouse might start to miss its targets, such as a sudden volume increase or a new IT system implementation gone wrong, said Adri McCaskill, general manager for iPlan’s Warehouse Management business unit. But whatever the cause, the basic rescue strategy is the same: “Just like medicine, you do triage,” she said. “The most life-threatening problem we try to solve first. And only then, once we’ve stopped the bleeding, we can move on.”
In McCaskill’s comparison, just as a doctor might have to break some ribs through energetic CPR to get a patient’s heart beating again, a failing warehouse might need to recover by “breaking some ribs” in a business sense, such as making management changes or stock write-downs.
Once the business has made some stopgap solutions to “stop the bleeding,” it can proceed to a disciplined recovery, she said. And to reach their final goal, managers can use the classic tools of people, process, and technology to improve what she called the three most important key performance indicators (KPIs): on time in full (OTIF), inventory accuracy, and staff turnover.
CSCMP EDGE attendees gathered Tuesday afternoon for an update and outlook on the truckload (TL) market, which is on the upswing following the longest down cycle in recorded history. Kevin Adamik of RXO (formerly Coyote Logistics), offered an overview of truckload market cycles, highlighting major trends from the recent freight recession and providing an update on where the TL cycle is now.
EDGE 2024, sponsored by the Council of Supply Chain Management Professionals (CSCMP), is taking place this week in Nashville.
Citing data from the Coyote Curve index (which measures year-over-year changes in spot market rates) and other sources, Adamik outlined the dynamics of the TL market. He explained that the last cycle—which lasted from about 2019 to 2024—was longer than the typical three to four-year market cycle, marked by volatile conditions spurred by the Covid-19 pandemic. That cycle is behind us now, he said, adding that the market has reached equilibrium and is headed toward an inflationary environment.
Adamik also told attendees that he expects the new TL cycle to be marked by far less volatility, with a return to more typical conditions. And he offered a slate of supply and demand trends to note as the industry moves into the new cycle.
Supply trends include:
Carrier operating authorities are declining;
Employment in the trucking industry is declining;
Private fleets have expanded, but the expansion has stopped;
Truckload orders are falling.
Demand trends include:
Consumer spending is stable, but is still more service-centric and less goods-intensive;
After a steep decline, imports are on the rise;
Freight volumes have been sluggish but are showing signs of life.
CSCMP EDGE runs through Wednesday, October 2, at Nashville’s Gaylord Opryland Hotel & Resort.
The relationship between shippers and third-party logistics services providers (3PLs) is at the core of successful supply chain management—so getting that relationship right is vital. A panel of industry experts from both sides of the aisle weighed in on what it takes to create strong 3PL/shipper partnerships on day two of the CSCMP EDGE conference, being held this week in Nashville.
Trust, empathy, and transparency ranked high on the list of key elements required for success in all aspects of the partnership, but there are some specifics for each step of the journey. The panel recommended a handful of actions that should take place early on, including:
Establish relationships.
For 3PLs, understand and get to the heart of the shipper’s data.
Also for 3PLs: Understand the shipper’s reason for outsourcing to a 3PL, along with the shipper’s ultimate goals.
Understand company cultures and be sure they align.
Nurture long-term relationships with good communication.
For shippers, be transparent so that the 3PL fully understands your business.
And there are also some “non-negotiables” when it comes to managing the relationship:
3PLs must demonstrate their commitment to engaging with the shipper’s personnel.
3PLs must also demonstrate their commitment to process discipline, continuous improvement, and innovation.
Shippers should ensure that they understand the 3PL’s demonstrated implementation capabilities—ask to visit established clients.
Trust—which takes longer to establish than both sides may expect.
EDGE 2024 is sponsored by the Council of Supply Chain Management Professionals (CSCMP) and runs through Wednesday, October 2, at the Gaylord Opryland Resort & Convention Center in Nashville.