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Digitalization and automation will help e-commerce supply chains overcome the profitability challenge, says new DHL white paper

DHL, the world’s leading logistics company, has identified digitalization and automation in the supply chain as an imperative for online retailers looking to grow and compete over the long-term.

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Digitalization and automation will help e-commerce supply chains overcome the profitability challenge, says new DHL white paper
Digitalization and automation will help e-commerce supply chains overcome the profitability challenge, says new DHL white paper. Image: DHL
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DHL, the world’s leading logistics company, has identified digitalization and automation in the supply chain as an imperative for online retailers looking to grow and compete over the long-term. In its latest white paper, the company, which this year announced an investment of at least USD 2.2 billion in digitalization through 2025, provides new insights on how specific challenges within the e-commerce supply chain can be overcome with the support of new technologies.

“Change at the Speed of the Consumer: How E-Commerce is Accelerating Logistics Innovations” was authored by Professor Lisa Harrington, President and CEO of lharrington group llc. It looks at six principal areas where e-commerce is challenging the supply chains of merchants and logistics companies: customer expectations for a perfect buying experience; consumers’ desire to buy and receive goods ‘anywhere, anytime’; exploding demand for urban delivery; competition for labor and wage inflation; the emergence of new online sales models and unexpected surges in demand; and environmental concerns.

The impact of these challenges is most keenly felt in the areas of fulfilment and last mile delivery. Labor in the U.S., for example, which is the world’s second largest e-commerce market accounts for 40-60% of warehousing operating costs. With real estate company CBRE predicting in 2018 that an additional 450,000 warehouse workers will be needed in the U.S. by the end of 2019  and unemployment at a consistently low rate, his presents a risk in terms of both cost and recruitment, particularly during peak periods. Increased urbanization, combined with heightened pressure – from both socially conscious consumers and municipal authorities, in particular – to reduce the environmental impact of transport operations is forcing retailers to seek out creative ways of balancing delivery convenience with reduced mileage for diesel-powered vehicles over the last mile.

Across each of the profitability challenges, technologies already exist that allow companies to reduce unit costs, better forecast needed inventory or increase productivity to absorb additional growth. Robotics and automated sorting systems, for example, allow companies to process higher order volumes without the need to engage large numbers of temporary workers. Advanced Warehouse Execution Systems, combining Internet of Things capabilities, machine learning, business intelligence and data mining agents can increase performance and responsiveness to meet rising customer expectations.

While autonomous vehicles for last-mile delivery still await regulatory approval in many markets, digitalization can already support better demand forecasting to allow inventory to be placed closer to the end customer and to optimize transport routings, reducing time on the road.  As many of these technologies evolve further and new innovations come to the market, companies that are able to deploy them effectively within their supply chain will be best positioned to address the costly inefficiencies, volatile order trends and demanding customer expectations that characterize the fiercely competitive e-commerce market.

“The insights from this new white paper show that profitability is still a major challenge for many e-commerce companies, despite – or often actually because of – the dynamic growth of the sector. It also gives our customers a comprehensive overview of the specific areas where that challenge is most prevalent, and which technologies currently offer the most potential to support them,” said Ken Allen, CEO, DHL eCommerce Solutions. “DHL’s innovation approach is targeted at identifying, piloting and deploying across our global network the most effective technologies and solutions in each of these areas. We will continue to actively expand robotics and automation across many parts of our operations, for example, and we see artificial intelligence becoming an enabler throughout our business in the future. There is no ‘silver bullet’, but companies must embrace new technologies and innovate to thrive.”

Acknowledging that innovation can itself be a profitability challenge, particularly if approached at the wrong pace or with excessive outlays of capital, the research also detailed a three-step approach to innovating successfully: focusing on innovations that provide differentiation; adopting a long-term, strategic view of innovation; and bridging the silos of people, software and machines.

“Given the complexity of the global logistics industry, the huge variance across markets and regulatory environments, and the competitive differentiation that comes from relationships and in-depth knowledge of customers’ supply chains, we still see people playing a critical role in the industry for the foreseeable future,” said Allen. “The companies that will win the race to future success are those that are able to combine the expertise of their people with software and machines most effectively.”

DHL opened its newest Innovation Center – its third globally – in September 2019 in Chicago, U.S. The center acts as a hub for innovation, where DHL conducts research into the major trends shaping the logistics industry, explores customers’ needs and readiness for more innovative solutions, and tests and pilots technologies with the highest potential for deployment.

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DSV inaugurates the largest integrated logistics centre in Africa

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DSV inaugurates the largest integrated logistics centre in Africa. Image: DSV
DSV inaugurates the largest integrated logistics centre in Africa. Image: DSV
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DSV inaugurates the new Gauteng HQ in South Africa, DSV Park Gauteng, which is Africa’s largest integrated logistics centre. With this centralised facility DSV will be able to provide more seamless service to customers which is an integral part of creating a strengthened and more efficient logistics network in South Africa.

DSV has consolidated its Gauteng operations in South Africa into a new, centralised facility which is the largest of its kind in Africa. It is situated near O.R. Tambo International Airport between Johannesburg and Pretoria and with easy access to the East and West Rand. The logistics centre consists of approx. 130,000 m2 of buildings and covers supply chain solutions from first to last mile controlled and managed under one roof, by DSV.

The investment in DSV Park Gauteng is a testament to DSV’s commitment to South Africa and to continuing to strengthen the logistics infrastructure in the country to the benefit of DSV customers and the South African society.

The new DSV logistics centre is officially being inaugurated at a virtual ceremony today, and the ceremony host and CEO of DSV Africa, Keith Pienaar, says:

“The inauguration of DSV Park Gauteng once again underlines DSV’s strong commitment to South Africa and our will to grow the business in the region. DSV Park Gauteng consolidates several smaller offices and warehouses around Johannesburg into one large, modern logistics centre.

The foundation of our values and culture is to promote an inclusive workforce and sustainable business practices. One consolidated facility will enhance collaboration and offer truly integrated supply chain solutions for our clients and customers.”

A large-scale and modern logistics facility

The sprawling complex houses a logistics warehouse of 79,000 m², a cross-dock facility of 41,000 m² and office space of 10,000 m². DSV’s divisions Air & Sea, Road, Solutions as well as the Shared Services function will be inhabiting the new logistics centre while other specific units such as Healthcare and parts of Mounties and Solutions will continue out of their current specialised facilities.

“With DSV Park Gauteng, DSV has developed a large-scale modern logistics centre which captures the essence of our consolidation strategy to create larger and more efficient facilities, enabling us to have many of our business units together under one single roof.”

“We have packed the new DSV facility with solutions such as an innovative sorter that can handle 12,000 packages every single hour. Throughout the whole building process, we have also utilised our global experience to construct buildings where sustainability and resource optimisation have been fundamental in all processes,” says Brian Almind Winther, EVP and Head of Group Property, DSV.

DSV Park Cape Town

To further improve the infrastructure nationally in South Africa, DSV is also building a consolidating logistics centre in the Western Cape called DSV Park Cape Town. This site will be located near the Cape Town International Airport, and close to the harbour and industrial and commercial hubs.

Building for the future

Innovation, sustainability and employee safety are key to the design of the buildings. The implementation of biometrics, solar power, translucent roof sheeting, recycling stations, LED motion lighting, boreholes and water filtration systems ensure that the facility is aligned to DSV’s global strategy of sustainable operations, reducing our impact on the environment.

Local community

DSV worked closely with contractors and the local community to ensure they were included in the development of DSV Park Gauteng. DSV has sourced vehicles and created opportunities for people from the local community to work on site.

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Transfix to merge with G Squared Ascend I

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Transfix to merge with G Squared Ascend I. Image: Transfix
Transfix to merge with G Squared Ascend I. Image: Transfix
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Transfix Inc., a leading digital freight platform, announced that it has entered into a definitive business combination agreement with G Squared Ascend I, Inc., a special purpose acquisition company sponsored by affiliates of G Squared, a growth-stage venture capital fund manager focused on the technology sector. The closing of the transaction is expected by the end of the first quarter 2022. The combined company is expected to be listed on the NYSE under the ticker symbol “TF”.

Transfix’s digital freight platform – powered by its proprietary technology, AI, and automation and underpinned with world-class operations – is transforming the traditional and digital freight sector, bringing together the world’s best shippers and carriers, and delivering a transparent, trusted, and sustainable freight ecosystem. Transfix works with some of the largest Fortune 500 companies as well as mid-and small sized shippers, and has built a strong carrier community across the U.S.

Transfix’s asset-light business model has produced strong revenue growth and a rapidly expanding gross margin with exceptional operating leverage. This is demonstrated by the company’s ability to grow revenue by over 40% in 2020, while gross profit grew over 100%, despite a highly-tumultuous freight environment caused by the global pandemic.

Lily Shen, Transfix CEO and President, said, “We are thrilled to be partnering with G Squared on this significant milestone. They have been incredible partners who share our excitement about the opportunity ahead, and who bring invaluable expertise in and knowledge of our rapidly growing sector. With this transaction, Transfix is well-positioned to accelerate growth and innovation to drive our impact at scale. We are at the beginning of a new era for the freight industry.”

Drew McElroy, Transfix Co-founder and Chairman of the Board, stated, “This announcement marks an important moment in Transfix’s natural evolution to a public company. Our vision, since day one, has been to build the world’s most connected and intelligent freight platform. This marks the next important step in advancing and accelerating toward that goal.”

Larry Aschebrook, Founder & Managing Partner, G Squared and Chairman, G Squared Ascend I, commented, “Transfix’s leadership team has built a best-in-class business with an incredible team of freight industry and technology experts. The company has consistently delivered impressive growth and margin expansion and has demonstrated a clear path to profitability. We are delighted to continue our support of Transfix’s industry-disruptive business as it raises the bar for the entire sector to move goods more sustainably.”

Ward Davis, CEO, G Squared Ascend I, said, “Transfix exceeds our many acquisition criteria for Ascend I. Impressively, its team managed through the pandemic and its incredibly volatile impact on freight with exceptional, industry-leading growth and returns. The company’s consistently strong financial performance, outstanding shipper spend retention, and growing list of top tier enterprise accounts fuel our conviction in this business combination.”

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New C.H. Robinson technology identifies how shippers can save on the spot market

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New C.H. Robinson technology identifies how shippers can save on the spot market. Image: C.H. Robinson
New C.H. Robinson technology identifies how shippers can save on the spot market. Image: C.H. Robinson
Listen to the story (FreightComms AudioPost)

With tight trucking capacity and market volatility pushing more freight into the spot market, global logistics provider C.H. Robinson has launched Market Rate IQ – a new tool that shows companies how their spot rates compare to a trusted third-party benchmark and breaks down where they could save money.

Created by C.H. Robinson’s technology incubator, C.H. Robinson Labs, Market Rate IQ is the only tool in the industry that shows shippers which factors in their U.S. spot pricing are market-driven and which they can control. It’s also the only tool in the industry that incorporates DAT’s RateView, the most comprehensive and reliable database of U.S. spot freight rates.

“Virtually every company is looking for a solution to help them navigate the spot market, so we built one,” said Tim Gagnon, head of Robinson Labs and C.H. Robinson’s vice president of analytics and data science. “Now, for the first time, they can see what’s driving their rates and what they can do about it. Then we take that transparency a step further and show them how their rates compare to the average for each of their shipping lanes and locations. It’s like going to the grocery store and instantly being able to see how the price of everything on your list compares to the market. Who doesn’t want to know if they’re paying more than market?”

Companies have had to turn to the spot market more as global disruptions ripple through their supply chains, requiring more last-minute changes and short-term decisions. Since January 2020, load postings are up 176% while postings from trucks looking for loads are down 5%. That imbalance drives rates up and companies often cope with that by spreading their spot freight among many transportation providers – even though that added effort doesn’t always result in better rates.

During its incubation phase, Market Rate IQ uncovered $75 million in potential customer savings across $1.2 billion in spot freight spend. These were the top five reasons customers paid more than they might have needed to, even when their rates were below market average:

Lead time – Carriers charge a premium when given too little lead time for pick up.
Uneven freight – Because any given shipping lane has a finite number of trucks, putting too much freight in the same lane on the same day instead of spreading it out means you might be paying extra for carriers elsewhere to drive out of their way.
Weekend pickup – To avoid the higher cost of Saturday and Sunday pickups, some companies might find it beneficial to run freight out of their warehouses only five days a week.
Multiple stops – Adding too many stops to fill a truck has diminishing returns. Other optimization strategies could be more cost-effective.
Delivery geography – Carriers charge more if they have to drive empty to get their next load. When shippers have spot loads going to a remote destination, they could save money by working with a logistics partner who can pair up loads originating nearby.

Market Rate IQ is offered within C.H. Robinson’s Navisphere platform and powered by C.H. Robinson’s unmatched freight dataset – the largest in the industry. Some of the largest retailers in the world, as well as other global B2C and B2B companies, have now begun taking advantage of this technology built by and for supply chain experts.

“Market Rate IQ gives us this window into our spot rates that just wasn’t possible before,” said Terry Laluk, Senior Director of Logistics of Valmont, a global provider of infrastructure for transit, utilities, agriculture and other industries. “We have confidence and assurance that we’re getting good rates, especially under market conditions no one has ever experienced. But it’s also so easy to see where adjusting our shipping strategy could add to our bottom line. We just started using the tool, and the potential for significant cost savings is already clear.”

C.H. Robinson teamed up with DAT on Market Rate IQ because DAT’s spot rate benchmark, based on $110 billion in shipment data across 68,000 shipping lanes, is widely considered the industry standard.

“Shippers don’t have to be at the mercy of these uncertain times,” said Mike Weaver, Vice President of Sales at DAT. “The right technology and data can make a powerful difference. Market Rate IQ represents two industry leaders coming together to help all parties negotiate with confidence, transparency and the most trusted rate benchmarks in the industry.”

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