Above the Fold: Supply Chain Logistics News (March 3, 2023)

By Adrian Gonzalez

I woke up this morning to a sound I hadn’t heard in a long time: chirping birds.

Spring must be around the corner, even though we’re supposed to get some snow tonight. Then again, the weather forecasters were terribly wrong last week, when they predicted inches of snow and all we got was a dusting, so maybe the birds know something we don’t.

I’ll enjoy the chirping birds, the calling of a new season, but I hope I don’t wake up tomorrow to another sound I haven’t heard in a long time: the woodpecker who likes to peck the shingles outside my bedroom window. I’d rather wake up to the bang of snowplows scraping the streets outside. I can sleep through that ruckus, but not the tap tap tap tap of beak tapping on wood.

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Moving on, here’s the supply chain and logistics news that caught my attention this week:

What Goes Up Must Come Down

Remember when shipping a container from China to Los Angeles cost $15,600? That was last year. Today, it costs $1,238, according to the Freightos Baltic Index.

“Global shipping executives are wrestling with plunging exports, falling freight rates and mounting suspense over whether the industry is headed for a price war in a reversal of the soaring demand the industry saw during the pandemic,” writes Costas Paris in the Wall Street Journal. Here’s another excerpt from the article:

Shippers at [the TPM conference this week] said that they are getting lower rates and no longer facing extended delivery delays. Shippers traditionally negotiate freight rates that run for a year. But at this year’s TPM conference, they are negotiating contracts as short as two or three months, which is unprecedented, according to Peter Sand, chief analyst at shipping data provider Xeneta.

“The tide has turned completely and cargo owners now have the upper hand in contract talks,” said Mr. Sand. “There will certainly be more freight rate hardship for carriers this year.”

Back and forth the pendulum goes. Sometimes it’s the shippers who get to feast, other times it’s the carriers. How can shippers and carriers (in all modes of transportation) create lasting collaborative relationships that are mutually beneficial regardless of the market cycle? How can they smooth out the feast and famine peaks and troughs?

It’s a question that never gets answered because changing “the way we’ve always done procurement” is hard; keeping the status quo is easy, even if you have to suffer every once in a while.

If Malcom McLean Had Worked In A Warehouse

Malcom McLean was a North Carolina trucker who invented container shipping in 1956. He was featured in the PBS television series They Made America about “the extraordinary innovators whose ideas and entrepreneurial spirit gave birth to landmark advances.” Here is an excerpt from the PBS biography about McLean:

His years in the transportation business showed McLean the need for an easier method of shipping goods. He had watched dock workers unloading goods from trucks and transferring them to ships, and marveled at the inefficiency of the process. “Wouldn’t it be great,” he asked himself, “if my trailer could simply be lifted up and placed on the ship?” In 1955, he gambled big on a container venture, buying two oil tankers and securing a bank loan to buy $42 million worth of docking, shipbuilding, and repair facilities. He refitted the ships and designed trailers to stack below or on the decks. In April 1956, his first container ship, the Ideal X, departed Port Newark, New Jersey, headed for Houston.

If Malcom McLean had worked in a warehouse, witnessing the same inefficiency that exists in trailer loading and unloading, would he have invented the “Vaux freight movement technology” introduced by ArcBest this week?

That’s the thought that crossed my mind when I read the press release and watched the video of the technology in action.

As described in the press release:

Vaux is an innovative suite of hardware and software that modernizes and transforms how freight is loaded, unloaded and transferred. Vaux enables the entire contents of a trailer to be unloaded in under five minutes and offers complete visibility into freight movement within warehouse facilities, on the dock and over the road. It creates extreme efficiencies and orchestrates seamless warehouse operations.

The Vaux Freight Movement System™ consists of the Vaux MP™ and MP Coupler, which enable freight handling operators to load and unload full trailers rapidly. They connect seamlessly into warehouse operations through the Vaux OS™, a suite of proprietary software that includes warehouse orchestration, operator fulfillment and MP Tracker.

Is this the shipping container equivalent for warehouses? Only if it ultimately becomes an industry standard, at least the hardware portion of it.

Nonetheless, while warehouse robots get all the attention these days, it’s great to see other inspired forms of innovation happening to make warehouse operations more streamlined and efficient.

And with that, have a happy weekend!

Song of the Week: “Easy On Your Own?” by Alvvays