What were the top supply chain stories in the first half of 2024?
Check out our list by month below.
January
UPS announces it will reduce its overall employee head count by 12,000 workers, which the company says will save more than $1 billion, citing higher labor costs and softening demand parcel shipping. It also says it will sell off its Coyote Logistics freight brokerage business, which it later does in June to RXO. UPS parcel deliveries, fresh off a new contract in 2023, are spared any layoff, UPS says.
The Biden administration announces new rules relative to classifying workers as employees instead of independent contractors. The new rules promulgate six new and somewhat vague criteria that must be evaluated to determine a workers’ classification. The new rules go into effect in March, with little impact thus far but potentially a large impact down the road for things like contract truck drivers.
Uber Freight announced it is adopting a new standards-based approach to integrating shippers and carriers with its transportation management system that it says will speed bookings and enable more process automation. Uber Freight says it is the first in the industry to adopt integrations standards from a group called the Scheduling Standards Consortium. There has been talk about developing standards to address the integration for many years, but there has been little progress.
February
The Wall Street Journal publishes a report on the woeful state of US ship building, with almost 50% of commercial ship building was done in China in 2023, far outpacing number 2 South Korea and number 3 Japan. Western countries are hardly in the fight, with all of Europe producing just 5% of ships and the US barely enough to register. This state of affairs is has geo-political and military implications, beyond the economic and logistics ones.
Chicago suburb Deerfield, IL bans new motor freight terminals, logistics centers, fulfillment centers and facilities used for the parking or moving of trucks, after new rules were unanimously accepted by the village’s Board of Trustees. The concern: companies reducing their office footprint, with the real estate going to ecommerce and local fulfillment centers. Those changes in business facilities have led industrial developers to eye empty office properties as prime redevelopment candidates for the increased logistics needs, but which are viewed as less desirable for a variety of reasons than office space by some.
Walmart announces it has cut 1 billion tons of emissions from its supply chain six years ahead of schedule. “Project Gigaton,” announced in 2017, was among the first corporate initiatives centered solely on addressing Scope 3 emissions— those from suppliers.
March
Walmart announces it is making its internal AI-powered Transportation Management System (TMS) available to all businesses as a Software-as-a-Service (SaaS) solution through its Walmart Commerce Technologies in surprising news. Walmart says it is the same TMS it is using internally, and is targeted to businesses of all sizes, with functionality to optimize driving routes, load trailers efficiently and minimize miles traveled. All that would obviously reduce costs and CO2 emissions. Will it work? I noted at time that the track record of regular companies commercializing is poor, but if Walmart pulls it off it would surely have a big impact on existing TMS vendors.
On March 26, a cargo ship hits the Francis Scott Key near the Port of Baltimore, causing it to collapse almost instantaneously, killing three people and closing the port for many weeks. The ship’s crew issued a mayday call moments before the crash took down the bridge, enabling authorities to limit vehicle traffic on the span. The port, a key link in imports of automobiles from Europe, was immediately closed, not fully reopening until June 12th. The accident happened when the ship lost power and thus control, veering off course into the bridge.
Unilever says it is going to focus on absolute cuts in CO2 from its supply chain, which with consumer usage represent about 98% of the company’s total greenhouse gas emissions. Previously, Unilever has promulgated goals around the “emissions intensity” of its products and operations, meaning how much CO2 is emitted per unit of output.
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April
After losing two high profile unionization campaigns in the past decade at a VW assembly plant near Chattanooga, TN, the United Autoworkers won a decisive victory to organize the factory, making it the first auto foreign-owned plant in the US to organize. But the euphoria doesn’t last long, as the UAW lost a vote in May (56% to 44%) at a Mercedes factory in Alabama. UAW membership fell 3.3% in 2023 to 370,000, its lowest point since 2009, according to US Labor Department data. In 1970, the union had 1.5 million members.
 In its first year of conclusion, Amazon tops the annual Transport Topics ranking of the largest US 3PLs by logistics revenue in 2023 ($140 billion), easily outpacing number 2 CH Robinson ($16.7 billion). Amazon has a wide variety of logistics services, including Amazon Warehousing and Distribution, which provides bulk storage and inventory management; Fulfillment by Amazon, which handles ecommerce fulfillment for orders placed on Amazon’s Marketplace site; its Multi-Channel Fulfillment service offering order fulfillment for outside sales channels; truckload freight brokerage to shippers of all sizes through its Amazon Freight division; among other logistics services.
Amazon reports it saw over 2 billion packages reaching customers in one day or less in Q1, with almost 60% of Prime orders delivered within the same or next day in 60 major U.S. cities.
May
Gartner releases its top 25 Supply Chains for 2024, with Schneider Electric taking the top spot for the second straight year – sort of. I put it that way because again in 2024, Apple, Procter & Gamble, Amazon, and Unilever were left off the formal top 25, as those four companies have been placed in a separate relatively category called "Supply Chain Masters," a sort of supply chain hall of fame. With Amazon, Apple, P&G, and Unilever withdrawn from the competition, the rest of the top 5 after Schneider Electric were: (2) Cisco; (3) Colgate-Palmolive; (4) Microsoft; and (5) Johnson & Johnson.
The Biden administration announces plans for new tariffs on Chinese imports, on top of the tariffs enacted by the Trump administration that were maintained by Biden. The new tariffs apply to $18 billion in Chinese goods, including electric vehicles, batteries, semiconductors, steel, aluminum, critical minerals, solar cells, ship-to-shore cranes, and medical products.
3PL Ryder releases a study saying the cost for carriers to shift to an all-electric fleet is expensive, with operating costs increasing up to 5% for light-duty EVs, while the jump is a huge 94% to 114% to convert heavy-duty trucks.
Reports that electric vehicle-maker Tesla is aggressively’ pushing its suppliers to start making key components outside of China and Taiwan due to the risk of war.
June
CSCMP and partner Kearney release the 2024 State of Logistics Report, with the headline news that US Business Logistics Costs (USBLC) actually fell on an absolute basis in 2023 to $2.37 trillion, down from $2.6 trillion in 2022, for a drop of 11.2%. That was after an increase of a huge 25.3% in 2022. Among the other many data points, trucking-related spend (including private fleets but excluding parcel) comprised 62.2% of total transport costs and 39.2% of total logistics spend, down from 42.9% in 2022.
New rules from the California Air Resources Board (CARB) on train emissions generate much controversy, with critics saying they are not feasible, and dependent on technology that does not exist. The rules in part say that starting in 2030, new passenger locomotives must operate with zero emissions, with new engines for long-haul freight trains with the same requirements by 2035. But the EPS must give CARB a waiver to enforce the rules.
On June 26, the ubiquitous Universal Product Code (UPC), the barcode used for point-of-sale and other applications, reached a birthday of sorts. That is because it was 50 years ago, on June 26, 1974, that the first commercial scan of a UPC at retail occurred at a Marsh Supermarket in Troy, Ohio, when a cashier named Sharon Buchanan scanned a 10-pack of Wrigley's chewing gum. Hard to imagine now, but prior to this invention cashiers had to manually punch in items and prices at checkout, leading to long lines and many errors. But big changes are coming, as the UPC (invented by IBM’s George Laurer, is to be phased out in favor of a 2D QR code that contains more information and links to still more starting in three years.
FedEx announces it will do a strategic review of its Freight unit, by far the largest US LTL carrier, in what could result in a spinoff or sale of the business.
Any other top supply chain stories in the first half of 2024? Let us know your thoughts at the Feedback section below.
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