The e-commerce logistics revolution The technology and processes that are revolutionizing logistics and supply chain operations are helping today’s organizations keep pace with digital commerce. ® When it comes to eCommerce Fulfillment, Bigger is not always better. Who Wins? The giant logistics elephant, or the dynamic supply chain lion that is innovative and fast moving, with expertise to drive cost-to-serve in complex supply chain environments? BE BOLD. CHOOSE THE LION. Learn how LEGACY can add value to your dynamic supply chain LEGACYscs.com The e-commerce welcome logistics revolution E-commerce: Changing the logistics game It’s a vast under- contents statement to say Major modes join e-commerce mix 4 that e-commerce While last mile carriers receive much of the attention, the traditional modal heavyweights has changed the are in charge of connecting the growing web of facilities that enable e-commerce. Today, way the logistics all modes as well as freight intermediaries must be poised for growth and flexible enough to keep evolving. and supply chain game is played. Battle for the last mile 10 In fact, it’s much Established carriers and logistics services providers are clashing with tech-savvy safer to say that the world of digital com- newcomers to gain market share in this critical, final piece in the e-commerce puzzle. merce has introduced more risk and com- Parcel Express Roundtable: plexity than logistics and supply chain professionals have ever faced. Paying for peak performance 14 From rapid order intake to omni-chan- Our panel provides an update on all the market shifts in store for parcel shippers— especially when it comes to pricing, service and managing an e-commerce-centric nel order fulfillment to establishing the supply chain. optimal distribution network for next-day or same-day delivery windows, both retail- Freight Forwarding: Digitization & e-commerce ers and manufactures now have to inno- continues to reshape marketplace 18 vate, adapt and evolve—or get knocked The global freight forwarding market has grown by 2.7% in real terms since this time last out of their markets. year, but owing to a continuation of excess capacity issues and lower average oil prices, In this Special Digital Issue, the edi- rates continue to fall in both air and sea freight. Forwarders now need to ramp up the value-add visibility services in an effort to boost revenues and keep shippers smiling. torial staff of Logistics Management has compiled feature stories that encapsulate Warehouse/DC Operations Survey: the software, technology and processes In the thick of e-commerce adjustments 24 that are helping today’s retail and man- As e-commerce fulfillment pressure continues to climb, our annual survey points to the ufacturing professionals exceed ever- many changes taking hold—from more investment in automated approaches to piece increasing customer demands—whether picking, more use of robotics, increased interest in throughput metrics and general process improvement. in B2B or direct to consumers. We hope this helps guide you along your digital State of Mobility: Part of the playbook 32 transformation journey. By taking the process to the product, mobility enables a more streamlined, more accurate and faster approach to warehouse and DC management in today’s e-commerce age. The evolving DC tech stack 36 With the growth of e-commerce, the technology stack for distribution centers is xpanding. Michael A. Levans, Group Editorial Director We explore why WES/WCS software is gaining prominence and share how operations are Comments? E-mail me at expanding their use of data science. [email protected] Follow me on Twitter: @MikeLeva Editorial Staff Peerless Media, LLC Michael A. Levans Sarah Petrie John D. Schulz Brian Ceraolo Group Editorial Director Executive Managing Editor Contributing Editor, President and Group Publisher Transportation Bob Trebilcock Jeff Berman Kenneth Moyes Executive Editor Group News Editor Wendy DelCampo President and CEO Art Director EH Publishing, Inc. Francis J. Quinn John Kerr Editorial Advisor Contributing Editor, Polly Chevalier Editorial Office Patrick Burnson Global Logistics Art Director 111 Speen Street, Suite 200 Executive Editor Bridget McCrea Framingham, MA 01701-2000 Contributing Editor, 1-800-375-8015 Technology CMYK GRAYSCALE Major Modes Join E-commerce Mix While last mile carriers receive much of the attention, the traditional modal heavyweights are in charge of connecting the growing web of facilities that enable e-commerce. Today, all modes as well as freight intermediaries must be poised for growth and flexible enough to keep evolving. s Amazon continues its inexo- rable march toward distribu- tion and order-fulfillment dominance, logistics manag- Aers are examining the opportunities all modal players are promising as they build out their e-commerce supply chains. As a consequence, the nation’s industrial transportation networks have been largely transformed. BY PATRICK BURNSON, EXECUTIVE EDITOR 4 E -COMMERCE logisticsmgmt.com logisticsmgmt.com E -COMMERCE 5 e-commerce According to the CBRE Group, the facilities are now underway. New air cargo hubs world’s largest commercial real estate Egan maintains that this trend The impact on air cargo operations services firm, there’s been a proliferation foretells several different things. “The is already being felt by upstarts like of warehouses and distribution centers proliferation of big-box facilities under- Greater Cincinnati/Northern Kentucky (DCs) spanning 1 million square feet or scores the rapid growth of e-commerce, International Airport (CVG), which larger across the nation. And while “last because these mega-facilities serve as will now serve as Amazon’s centralized mile” carriers receive most of the atten- the backbone of retailers’ fulfillment hub for its newly-launched Prime Air tion these days, the traditional modal networks, distributing goods across Cargo service. heavyweights are in charge of connect- multi-state regions,” he says. “Amazon advised us of several fac- ing this ever-growing web of facilities. Furthermore, says Egan, develop- tors important to them, including site “The massive warehouses and DCs ers prefer to build these big boxes in availability and infrastructure,” says have sprouted from Southern California industrial-powerhouse “metros” that Candace McGraw, CEO of CVG. to Philadelphia, clustering around metro offer the best combination of excep- “CVG owns more than 7,500 acres of areas that provide the combination of tional transportation access and close property, four runways, plenty of taxi- road, rail, air and sea access that e-com- proximity to big populations favored ways, and we’re a cost-effective airport. merce users covet,” says David Egan, by e-commerce users. “While massive To top it off, we’re committed to invest CBRE’s head of industrial and logistics warehouses aren’t purely a phenome- $5 million in infrastructure improve- research in the Americas. non of e-commerce, the two are closely ments that will assist the airport and To date, 117 such facilities were built related,” he says. “E-commerce users the overall project,” adds McGraw. across the United States from 2010 to typically need two to three times the Meanwhile, it appears that the 2016 for a total of 141.2 million square amount of warehouse and distribution “middle-mile” of e-commerce will feet—a significant increase from the 99 space that traditional users do.” also be served by established hubs facilities built between 2003 and 2009, That’s mostly because e-commerce like Dallas Fort Worth International according to CBRE data. fulfillment requires more inventory, (DFW) Airport. This international The markets in which the most big- labor and automation. According to Lexi cargo gateway recently began install- box construction occurred over the past Russell, a senior research analyst with ing a cold chain facility that will be operated by AirLogistix USA. Total e-commerce sales via a website, by industry sector Expected to be operational this sum- (2015, including micro-enterprises) mer, the new transfer facility will give DFW the ability to precisely control Wholesale ($93.81 billion) 32.3% warehousing temperatures for ship- Retail ($47.75 billion) 14.0% ments of pharmaceuticals, flowers and Other ($33.42 billion) 11.5% fresh foods. John Ackerman, executive Information and communication ($32.3 billion) 11.1% vice president of global strategy and Transport and storage ($31.68 billion) 10.9% Utilities ($24.35 billion) 8.4% development at DFW, calls it “a natural Manufacturing ($19.13 billion) 6.6% choice” for the AirLogistix facility, given Accommodation and food ($12.67 billion) 4.4% the airport’s location in the center of the Construction ($2.73 billion) 0.9% United States. Source: Ofce for National Statistics Aaron Ahlburn, senior vice president and director of research for the indus- six years are led by Philadelphia, Cali- CBRE, the strongest trend to watch trial property consultancy Jones Lang fornia’s Inland Empire and Dallas/Fort now is “build-to-suit,” which custom- LaSalle, concurs, noting that DFW Worth. By way of forecast, CBRE says izes warehousing for truck, rail and enjoys a certain geographical advantage. the Inland Empire, Chicago, Philadelphia intermodal service. “The dimensions He says location—as well as market and Atlanta lead the busiest markets for of the warehouse are determined by timing—is key. “Obviously, there are on-going construction of 1 million-square- the client,” she says, “to maximize traf- broad industrial and logistics real estate foot DCs. Across the 10 busiest U.S. mar- fic driven by e-commerce in the new implications as e-commerce supply kets for this type of construction, 29 such demand cycle.” chains are perfected,” he says. 6 E -COMMERCE logisticsmgmt.com Middleman in the mix Top 10 online retailers: U.S. cyber security measures.” According to Brandon Fried, According to Hanke, most executive director of the Air- forwarder websites are poorly Amazon 39.4% forwarder’s Association, impli- designed, and have a small, cations for today’s freight if any, presence on social intermediaries due to the media platforms.