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Can AI Help Build a More Adaptive Supply Chain?

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Global Logistics, Global Trade Daily, Technology

Can AI Help Build a More Adaptive Supply Chain?

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Before the COVID-19 pandemic, many supply chains strove for efficiency at all costs. While this approach lowered costs and shortened lead times, it led to significant disruption at the pandemic’s onset. Now, organizations favor adaptability and supply chain AI could be the key to achieving it.

Transitioning from a lean business model to more flexible alternatives is a substantial and challenging shift. While it can seem intimidating, new technology — namely, artificial intelligence — provides a path forward. The key lies in using it effectively.

A Global Supply Chain Problem

Supply chain AI’s value is clearer when organizations understand the scope of the problems it solves. Today’s supply chains are in dire need of change. The pandemic has revealed how these networks have too many single dependencies, are too risk-prone, and have too few fallbacks and safeties to mitigate disruption.

A staggering 83% of supply chain organizations have experienced raw material shortages within the past year. These shortages are often disruptive, too, as 45% of companies have no visibility past their first-tier suppliers. Many others rely on just one or two sources for mission-critical resources.

If something happens at a single upstream supplier, companies often won’t see it coming and are stuck until the supplier can recover. In light of how frequent disruptions are today from severe weather, geopolitical conflict and worker shortages, something needs to change. Supply chains must become adaptive so they can respond quickly to prevent delays and shortages.

The Promise of AI

Businesses can arrive at adaptive supply chains through different paths. Regardless of the specifics, though, AI makes the journey easier.

Tackling Inventory Management

One of supply chain AI’s biggest areas of impact is inventory management. Adaptive supply chains must be able to keep sufficient safety stocks, and adjust stock levels to meet shifting supply and demand. That’s difficult with conventional approaches, but AI offers more insight.

Businesses can use AI to analyze their sales and shipment history to categorize items based on volatility, criticality, and value. It’ll then be easier to understand which are most important to keep larger safety stocks of.

Similarly, AI can predict demand shifts so supply chains can adjust their inventories to meet these changes without surpluses or shortages. Coca-Cola does this to deliver 500 million beverages at optimal times across Japan. By adapting shipping practices to AI’s predictions, they can prevent waste and stock-outs simultaneously.

Highlighting Weaknesses

Inventory management may be an easy area of improvement to spot, but other issues can be harder to identify. Brands may not know where their weaknesses lie, making it difficult to optimize effectively. AI can clear this up, too.

It starts with creating a digital twin of the supply chain — a virtual model of the network based on real-world data. AI can then analyze the digital twin to find improvement areas. That could be a single dependency for a raw material supply, a warehouse with limited visibility or anything else that hinders flexibility.

Human analysts could theoretically do the same thing, but they’d take longer and be less accurate. AI can often spot subtle connections humans miss, so it’s the ideal tool to identify these supply chain weaknesses. Once companies know where they fall short, they can address those areas to boost adaptability.

Predicting Disruption

Of course, some disruption is inevitable. Even if enterprises optimize their inventories for adaptability and create a stronger supplier network, unexpected problems can still happen. However, these disruptions aren’t so disruptive if organizations see them coming and supply chain AI enables that foresight.

Just as AI models can predict demand shifts based on past trends, they can tell when a disruption is likely. By picking up on early warning signs, these models alert businesses of possible incoming problems. Companies can then react ahead of time to minimize the damage.

If AI predicts a shortage of a certain material, warehouses can increase their safety stocks ahead of time. If it suggests storms will slow transportation, logistics brands can inform downstream partners and schedule more time for deliveries. AI could even predict price shifts, letting enterprises know to save elsewhere to account for higher tax or fee spending.

Refining Documentation and Reporting

While pure efficiency over everything is no longer supply chains’ goal, efficiency is still important. Businesses must be able to act quickly if they hope to adapt to incoming disruptions or shifting trends. Once again, supply chain AI provides the solution.

AI can eliminate error-prone manual processes like data entry, billing and other documentation or reporting tasks. This kind of work doesn’t add much value to supply chains but takes a lot of time. Consequently, when companies manage it manually, they lose valuable time and effort they could otherwise spend on more nuanced, critical work like planning to adapt to incoming changes.

By automating back-office administrative tasks, supply chain organizations become more agile. They’ll be able to divert more resources to adaptation and get more done at once. This automation also mitigates labor shortages, enabling even more efficiency, which, in turn, enables adaptability.

The Road Ahead

The benefits of supply chain AI are hard to ignore. However, any seasoned business leader can attest things are often more complicated in real life than they are on paper. If companies want to capitalize on this potential, they must approach AI carefully.

As beneficial as this technology can be, it’s hard to get right. Between 60% and 80% of AI projects fail, mostly because of issues in the application, not the tech itself. Supply chains must understand AI’s weaknesses along with its strengths to use it effectively.

One key weakness to be aware of is the need for sufficient, accurate data. Brands must collect real-time and historical data across their supply chain to give AI enough information to draw correct conclusions. That means implementing data-gathering technologies like the Internet of Things and cleansing data before feeding it to AI models.

Organizations must also recognize this technological transformation is expensive and disruptive. Consequently, going all in on it at once will result in astronomical costs and poor results. Instead, businesses should identify where AI is most useful — typically, data-centric, analytical tasks where manual alternatives are least effective — and start there.

Applying AI to a single use case helps companies spread out the costs. They can then learn what works and what doesn’t to use it more effectively when they expand their AI in the future.

Supply Chain AI Could Be the Key to Adaptability

Supply chains must become more adaptive to meet tomorrow’s demands. To do that, they’ll have to embrace supply chain AI.

Implementing AI can be challenging, but if organizations do it well, it can push them ahead of the competition. They’ll then have the insights and efficiency necessary to adapt to a quickly shifting world.

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Global Logistics, Global Trade Daily, Trucking

6 Innovative Techniques to Maximize Trailer Space Utilization

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Empty trailer space may be small, but in reality it’s a significant waste. Fleets must use all available truck capacity to become as cost-effective as possible. Many understand the need to maximize trailer utilization, but irregular loads, fragile items and other complications make it difficult.

In other cases, fleet operators may not realize they have underutilized space left in their trailers. Whatever the specifics, most logistics providers can improve in this area, and thankfully, there are many potential solutions. Here are six innovative techniques fleet owners may have missed to use more of their trailer space.

Use More Vertical Space

Capitalizing on vertical space is one of the most common ways to increase warehouse capacity, and it works for trailers, too. When fully loaded, the average stacked pallet is 48 inches tall, and dry van trailers’ doors are around 9 feet tall. That leaves enough room for two layers of fully stacked pallets.

Of course, some goods aren’t ideal for stacking. Soft boxes and fragile items can’t support additional weight on top of them, but crews can place these items on higher layers. Ratchet straps or similar tools can secure higher-level items in place to prevent shifting in transport.

Another way to use more vertical space is to install decks within the trailer. Several companies now offer both pre-built double-decker trailers and aftermarket shelving solutions. This hardware lets employees safely stack at least two layers in each trailer, regardless of the load’s fragility.

Use Drop Deck Trailers

A similar way to maximize trailer utilization is to use more below-deck space. Drop deck trailers offer more space by lowering the floor below the height of the wheels where possible. That can provide at least two feet of additional storage area without creating a dangerously tall vehicle profile.

Most people are familiar with drop deck trailers in the form of open beds, but enclosed drop decks are another option. Loaders won’t be able to fit an entire additional pallet in this space, but it’s enough for a few boxes. If the trailer also utilizes a racking system, the weight on top of these items isn’t a concern, either.

Shipments in drop deck trailers can also stack in multiple layers on top of the dropped section to maximize space. However, fleets should keep their trucks’ maximum load weights in mind when filling trailers this much.

Choose Boxes Carefully

Fleets can also use more of their trailers’ space by rethinking the boxes they store shipments in. Crews can free a surprising amount of room by using different packages, compiling smaller containers into larger ones and assigning products to other package types.

An often-missed but important rule of thumb is to pack heavier items in smaller boxes and lighter objects in larger ones. This strategy ensures crews can fill every package as much as possible without making them too heavy to carry. Boxes are also more unstable the smaller they are, so the additional weight will help prevent excess movement.

Logistics providers can also account for smaller boxes’ instability by packing several of them in larger containers. This box-in-box strategy lets crews standardize larger package sizes, making it easier to create an even level for stacking additional layers.

Find Inefficiencies With Route Optimization Software

Another unique but effective strategy is capitalizing on route optimization software. These solutions have gained popularity for their cost reduction, as some fleets have attained 25% efficiency boosts through them. Fewer fleet operators realize the same software can reveal trailer underutilization.

Route optimization software will show when vehicles can make more deliveries per day than operators initially expected. When teams know they can complete more deliveries, they can pack more in the truck without fear of overloading. Fleets can also match vehicles to specific routes more effectively, ensuring they use vehicles that fit the exact size of their daily delivery schedule.

Efficiency gains from route optimization help, too. Underpacking often results from running out of time at the loading bay, leading trucks to leave before they’re full to meet deadlines. When this software makes routes more efficient, teams will have more time to load trucks, ensuring they don’t leave anything for a second trip.

Identify Gaps With Cargo Sensors

Similarly, fleets can maximize trailer utilization through cargo sensors. In most cases, fleet owners use Internet of Things (IoT) sensors to monitor shipment locations and quality throughout shipment. The same technology can also identify potential room for improvement in loading practices.

Cargo sensors can monitor the interior space of a trailer, detecting empty areas where additional boxes could fit. Over time and over the whole fleet, this data can reveal which regular routes are the most prone to under-packing. AI algorithms could analyze this data to find where the gaps arise and suggest new packing techniques to maximize the available space.

Cargo sensors can also help by leaving more time to load trucks, just as route optimization software does. Fleets can use this software to automate cargo inspections instead of performing them manually. As a result, routes will become more efficient, providing more packing time.

Rethink Fleet Sizes

Sometimes, maximizing trailer space is less about putting more items in one truck and more about using a smaller truck for fewer items. Fully packing a large trailer is only useful if the driver can still deliver all those items in one route. Alternatively, some fleets may use several fully loaded small vehicles when they could use fewer large ones to deliver the same amount in fewer trips.

If fleets are struggling with high operating costs and use a larger fleet of smaller vehicles, they may benefit by using fewer larger trailers instead. Studies show double-decker trailers cost less per year to operate than using multiple single-deck trailers to transport the same amount of goods.

By contrast, if fleets struggle to fill large trailers but don’t move enough goods to reasonably deliver more in one trip, smaller vehicles may be the answer. Fleet owners can compare trailer fill rates, delivery routes and fuel costs to determine if they should use bigger or smaller trailers.

Maximize Trailer Utilization to Maximize Throughput

If fleet operators follow these tips, they can ensure they don’t leave any excess room in their trailers. As a result, they’ll accomplish more work with the same resources, boosting their operating margins.

To maximize trailer utilization is to increase the company’s throughput. Before buying any additional trucks, fleet owners should ensure they use the ones they have as efficiently as they can.

 

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Global Logistics, Global Trade Daily

The Complexities of Transformer Transportation in the Power Industry

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Upgrading power plant infrastructure is crucial for the energy industry. It’s essential in preventing widespread grid issues and enabling the green energy transition, but it can also be more challenging than it appears. Transformer transportation carries a unique set of issues.

Shipping a transformer from a manufacturing plant to its installation site may seem straightforward compared to larger grid considerations. Despite this appearance, transporting industrial-size transformers requires thorough planning to avoid costs and minimize lead times. Organizations must consider these six complexities for effective transformer shipping.

Vehicle Restrictions

One of the first logistical obstacles businesses face is only select vehicles can transport transformers. A grid-scale transformer can weigh over 170 tons and be as tall as a two-storey house. Most equipment cannot safely transport loads that bulky.

Rail transport may seem like the ideal solution given that mass, but railways present unique challenges, too. Trains need specialized freight cars called Schnabel cars to support large loads while preventing the expensive equipment from colliding with other railcars. Some substations may also be inaccessible by rail, further minimizing these options.

Logistics providers will likely have to transport transformers along roadways — if not for the entire journey, then at least to and from railways. That requires heavy-duty lorries capable of carrying abnormal loads.

Abnormal Load Permits

Legal guidelines further complicate transformer transportation. The government classifies anything weighing more than 44,000 kilograms or wider than 2.9 meters as an abnormal load. Industrial transformers far exceed these measurements, requiring special permits and notification periods.

Logistics services transporting these loads must register through the Electronic Service Delivery for Abnormal Loads (ESDAL). That process will notify police and highway authorities, as they may have to shut down some roads, inspect bridges, move power lines or go over the planned route for any potential issues. In many cases, companies must file ESDAL applications several months in advance.

Moving abnormal loads outside the U.K. involves even more regulatory issues. In addition to checking with local authorities, shipping companies must review destination customs and transportation restrictions.

Route Planning Challenges

The ESDAL notification process entails route planning, which can be challenging when dealing with large transformers. As with all transport, finding the most direct and efficient route is generally best. However, some direct paths may be unavailable because of the transformer’s size.

Bridges and overpasses may be too low for lorries carrying transformers to go under. Some smaller roads to substations may have bends too tight for long specialized vehicles to manage. There may be sufficient space in other cases, but only if authorities clear the area first.

Intermodal transformer shipping requires even more planning. Scheduling specialized road vehicles, railcars and ships and determining which routes are safest and most efficient for each can take considerable time and effort.

Equipment Availability

Transformer transport stakeholders must also consider the availability of the equipment they must use. Schnabel cars and abnormal load-capable lorries are less common than smaller, less specialized alternatives. Consequently, it can take more planning and earlier action to reserve them.

It’s also important to consider loading and unloading. Every location where transformers move on or off a vehicle must have a crane capable of lifting hundreds of tons. In some areas, there may be size constraints, too, further restricting the range of applicable equipment.

Key stakeholders must determine what kinds of transportation, cranes and any supplementary equipment they need early. That may require reviewing routes to check for space restrictions. Companies might also have to work with different logistics providers than they usually do to find the machines they need.

Time Consumption and Costs

All these other transformer shipping complexities mean shipping this equipment can be time consuming and costly. Specialized vehicles are often more expensive than their more widely available counterparts and there may be legal fees to consider. Businesses should also plan on higher labor costs from the time it takes to complete the process.

The law forbids vehicles carrying loads over 80,000 kilograms to go over 40 miles per hour on motorways and 30 mph on other roads. On some streets, it may be necessary to go even slower to be as safe as possible. As a result, routes can take longer than GPS software suggests, so power companies must take that into account.

Given these delays and expenses, careful financial planning is necessary when transporting transformers. Businesses may have to schedule other large expenditures around these shipping times.

Transformer Shipping Best Practices

Given these complexities, power companies and their supply chain partners must approach transformer shipping carefully. The process can seem intimidating, but with enough preparation and following a few best practices, businesses can mitigate these costs and disruptions.

Using reconditioned transformers instead of brand-new ones when possible is often the most cost-effective route. Refurbished equipment has significantly shorter lead times than new alternatives, mitigating the impact of shipping delays and offsetting logistics costs. These recycled components are also more sustainable than new transformers, which aligns with net-zero energy goals.

It’s best to plan as far ahead as possible. Finding vendors offering the right equipment at the right time can take some research and gaining government clearance is even more time consuming. Last-minute adjustments are also more problematic when the load is more tightly regulated, so businesses should plan all transformer transportation months in advance.

Given the complexity of these logistics decisions, some businesses may consider using artificial intelligence (AI) to find the best way forward. Companies using AI to analyze and recommend ideal routes have saved 15% to 60% in time, distance and fuel. Those savings significantly mitigate the financial and scheduling toll of transporting large transformers.

Transformer Transportation Requires Careful Attention

As the nation’s energy needs evolve, substations will need new transformers. Supplying that need means power companies and supply chain organizations must consider how to approach transformer transportation. Failure to plan these routes thoroughly can result in substantial delays and cost overruns.

Knowing what to expect is the first step in overcoming obstacles. When businesses understand the complexities of transformer shipping, they can manage it more effectively.

 

Program promotes pharmaceutical shipments of export cargo and import cargo in international trade by ocean.
Global Logistics, Global Trade Daily, Uncategorized

What’s the Key to Reinvigorating the Pharmaceutical Supply Chain?

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While supply chains everywhere face mounting obstacles, issues in the pharmaceutical industry are particularly severe. After the COVID-19 pandemic, the sector’s shortcomings are painfully clear, so calls for change across public and private entities are growing. Pharmaceutical supply chain management will have to evolve as this pressure rises.

The U.S. was once a leader in the pharmaceutical supply chain and could become one again. As any experienced logistics professional knows, that process is easier said than done. However, while the road ahead will be challenging, that doesn’t mean it’s impossible.

The State of the Pharmaceutical Supply Chain Today

It’s important to understand where pharmaceutical supply chain management is today to learn where it can go from here. Among the biggest current issues are a reliance on foreign sources of active pharmaceutical ingredients (APIs) and a severe shortage of critical products.

Roughly 83% of the most-consumed generic drugs have no U.S. sources for their APIs. Even if U.S. manufacturers produce them domestically, that production relies on international sources — mostly in China and India — for critical supplies. COVID-19 revealed why those dependencies are risky. Over 40 Chinese pharma companies ceased production, and India stopped exporting 26 medicines during the pandemic.

These supply chain disruptions have exacerbated existing product shortages. Many of the most critical drugs face significant backlogs and availability issues. These shortages often follow a vicious cycle. As a drug’s demand surges, generic competition increases, leading to offshoring to lower production costs, making the most essential medicines the most susceptible to supply chain disruption.

What’s Next for Pharmaceutical Supply Chain Management

Pharmaceutical supply chain management must change to break this cycle and prevent future shortages and backlogs. That shift will require several significant changes across the pharma industry and its strategic partners.

Reshoring Efforts

Reshoring API production is the biggest piece of the puzzle. As long as manufacturers rely on international sources for these drug building blocks, critical medicines will be at risk of severe supply chain disruption.

U.S. drug manufacturers may already have the capacity to expand domestic production. Domestic operations account for 28% of all API manufacturing facilities, more than any other region. However, generic drugs — which account for the vast majority of consumption — rely more heavily on foreign-made APIs, and many U.S. facilities are operating under capacity.

Reinvigorating the pharmaceutical supply chain starts with domestic manufacturers capitalizing on their unused capacity. Existing facilities can begin producing some APIs companies currently outsource to foreign nations until new factories can emerge to take over the rest. That effort should focus on reshoring the most critical APIs first before expanding.

Addressing Costs

As reshoring initiatives increase, the pharmaceutical industry will face financial obstacles. The biggest reason companies offshore the most in-demand APIs in the first place is to lower their production costs. Supply chain management must also focus on minimizing costs elsewhere to offset resulting price hikes from reshoring to keep generic medication affordable.

Pharma companies can emphasize supply chain efficiency to mitigate these costs. Automated picking solutions will make warehouse operations more cost-efficient, and IoT tracking solutions can prevent product loss in transit to minimize expenses. As more companies emphasize reshoring, transportation costs can fall, too.

Medical manufacturers can also offset higher API production costs by transitioning to lower-cost alternatives for other SKUs. Single-use biopharmaceutical equipment carries lower manufacturing costs than reusable options and has faster lead times, which helps account for higher expenses elsewhere.

Public-Private Partnerships

Reshoring API manufacturing while keeping costs low will be challenging for some companies, especially in the near term. An industry-wide shift will likely require government support to balance expenses and incentivize domestic production, so public-private partnerships will play a key role in the transition.

Government incentive programs already promote the reshoring of semiconductor and electric vehicle manufacturing. The pharmaceutical industry and its supporters should push for similar legislation to incentivize API reshoring, especially given the growing U.S. demand for critical medicines. Potential rewards include tax breaks, cash rewards to cover some production costs or higher taxes on foreign-derived APIs.

The federal government has a stockpiling program to keep inventories of critical medicines to prevent damaging shortages. The problem is that this stockpile focuses on finished medication, which has a shorter shelf life, limiting the reserve’s size. Transitioning to stockpiling longer-lasting APIs to kickstart domestic drug production when necessary may be more effective.

Boosting Transparency

Pharmaceutical supply chain management must also emphasize transparency amid this shift. Today’s supply chains are too opaque to reliably track demand, supply and product quality or locations in transit. That oversight leads to spoilage, shortages and inventory distortion.

More transparency would minimize losses and enable pharma companies to predict and respond to incoming shifts to prevent stock-outs or surpluses. IoT technology is the key to this visibility. Companies using these sensors in inventories and vehicle fleets can better estimate demand and shipping times thanks to real-time data.

AI can take these benefits further by analyzing IoT data to predict future shifts. When more key players in the pharma industry have that capability, they can respond to incoming demand changes sooner, preventing shortages of critical medicines.

Moving Away from Lean Principles

All of these changes represent a shift towards resilience for pharmaceutical supply chains. Embracing resilience means organizations must let go of some of the lean principles they’ve focused on in years prior.

Lean practices like just-in-time production and eliminating inventories lower operational costs, but they leave supply chains more vulnerable to disruption. That disruption is too risky in the pharmaceutical sector to justify. Businesses must instead prepare for the unexpected, keeping larger safety stocks and using multiple distributed suppliers to mitigate any unforeseen changes.

Reshoring is an important first step in this transition from lean to resilient, but it can’t be the end. Pharmaceutical supply chain management must remove single dependencies and increase reserves everywhere to become more disruption-proof.

Pharmaceutical Supply Chain Management Has a Long Road Ahead

Reinvigorating the pharmaceutical supply chain is a challenging but necessary goal. It will take time, money and cooperation between many parties, both private and public, to work. If the industry can embrace these changes, though, they can pave the way for a safer future.

There’s no one key to better pharmaceutical supply chain management but rather a collection of several interconnected steps. Understanding that is the first step in preventing future disruption to U.S. pharmaceutical supplies.

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Global Logistics, Global Trade Daily

Can Reshoring Manufacturing Spark a New Era of Resilience in Supply Chains?

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The fragility of global supply chains has never been more evident. The need for supply chain resilience has become painfully clear after the COVID-19 pandemic, the war in Ukraine, semiconductor shortages and other disruptions. The reshoring of manufacturing will play a crucial role in fostering that flexibility.

Outsourcing production to foreign nations has been the standard in manufacturing for years due to cost benefits. The industry is shifting since organizations have experienced firsthand disruptions from outsourced manufacturing.

The Current Wave of Manufacturing Reshoring

Reshoring and foreign direct investment (FDI) job announcements surpassed 360,000 positions in 2022, an all-time high. That’s 53% higher than the previous record, which the manufacturing industry set just one year earlier in 2021. Reshoring led this growth, accounting for 58% of these new positions.

Nearshoring has also grown, though not as rapidly. U.S. companies nearshored roughly 10,000 jobs to Canada and 40,000 to Mexico between 2010 and 2022. Those figures will increase as supply chain resilience initiatives grow, but reshoring will likely remain the more popular strategy.

When asked about their reasons for reshoring, most manufacturers cited government incentives. The availability of a skilled workforce and reducing supply chain disruption risk came as the second and third most popular answers, respectively.

How Reshoring Can Build Supply Chain Resilience

Even if companies’ primary reason for reshoring manufacturing isn’t to boost resilience, they still experience it as a secondary benefit. Businesses that reshore or nearshore production build strength through several means.

Shorter Transit Times

The reshoring of manufacturing’s most direct impact on supply chain strength is shortening transit times. In these strategies, manufacturers become physically closer to their downstream supply chain partners, making them less prone to disruption and more likely to withstand unexpected delays.

Sudden demand shifts and inventory distortion are less impactful when companies receive goods in less time. Even if it takes domestic manufacturers just as long as foreign alternatives to increase output, lead times are still shorter because there’s less ground to cover between facilities. Faster shipping times also reduce risk factors related to transportation costs.

New automated technologies take these benefits further. Next-generation servo technology can enable manufacturing speeds two to four times faster than conventional systems, further shortening domestic lead times.

Increased Transparency

Reshoring also boosts supply chain resilience by increasing visibility. It can be challenging to manage offshore manufacturing processes because of distance and language barriers. Domestic production eliminates those obstacles.

The only way to reliably get timely updates from overseas suppliers is through Internet of Things (IoT) tracking, which not every company can afford at scale. By contrast, manufacturers in the same country operate in similar, if not the same, time zones, letting them respond in detail when required. Removing the need for an interpreter further streamlines this communication.

After reshoring, businesses and their suppliers will face the same geopolitical situations. As a result, it’s easier to understand what challenges or opportunities supply chain partners face, informing more accurate and faster decision-making. Company leaders can even personally visit suppliers for closer communication without time-consuming, expensive overseas trips.

Fewer Risky Dependencies

The reshoring of manufacturing minimizes vulnerable third-party dependencies. Supply chains relying on international suppliers are prone to disruption because they often depend entirely on single, large facilities businesses have minimal control over. The ongoing chip shortage — which stopped production for tens of millions of cars — is an excellent example.

Domestic suppliers can still face delays and deficits, but these disruptions are less impactful. Supply chain partners are more likely to see them coming because of the increased transparency and can adapt faster, thanks to shorter lead times. Any dependencies on domestic manufacturers also don’t carry risks from geopolitical tension, which offshore production does.

Reshoring can further reduce risky dependencies by improving supplier diversification. Companies can reshore some production and nearshore or outsource other portions. That way, they get reshoring’s time and resilience benefits while minimizing single dependencies.

Lingering Concerns

Despite these advantages, some organizations are still hesitant about reshoring their manufacturing. These concerns have merit since it brings challenges of its own.

Costs are the biggest obstacle. Even though reshoring means lower transportation expenses, labor is often more expensive. The disruption from ending relationships with overseas suppliers and transitioning to new domestic ones can also incur extra costs in the near term.

Domestic manufacturers may also be unable to support the same capacity or offer identical specialization as large, established overseas companies. The U.S. has the world’s second-largest manufacturing sector, but that doesn’t apply evenly across every subsector. Some specialized sectors — like electronics — have relatively few major American manufacturers.

It’s also worth noting that reshoring often means taking more control over the manufacturing process. That’s advantageous regarding transparency and minimizing disruption, but it also means higher organizational complexity and costs.

The Way Forward for Reshoring and Resilience

Even though these obstacles remain, reshoring is still an excellent way to build supply chain resilience. The extra costs and complexity are worth it in the long run because reshoring mitigates the impact of disruption. Considering there were over 11,000 supply chain disruptions in 2021 alone, that resilience will likely pay off sooner rather than later.

Businesses can also minimize transition-related disruptions by approaching reshoring slowly. Talking with multiple domestic suppliers to find the ideal partner before moving and reviewing legal ties to current overseas companies is crucial. Organizations should also reshore their operations one process at a time over a few years instead of transitioning all at once.

Recent legislation like the CHIPS Act suggests incentives for American manufacturing are growing. Domestic supplier options and capacity will expand as that happens, making reshoring easier.

The Reshoring of Manufacturing Is a Promising Shift

Supply chains are slowly becoming more resilient as more companies reshore their manufacturing. This shift isn’t the only step businesses must take to ensure resilience but it’s critical.

The reshoring movement will cause some initial disruption but will bolster supply chain operations in the long run. U.S. manufacturers, logistics providers and the companies that rely on them will all benefit from the shift.

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Global Logistics, Global Trade Daily

4 Benefits of Integrating an Automated Storage and Retrieval System

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As logistics professionals investigate how to keep productivity high while workers handle an increasing number of items, many believe automated storage and retrieval systems (ASRS) could help them achieve the desired scalability and consistency. An emerging trend involves using artificial intelligence (AI) for even better results. Here are some things leaders can expect by implementing such systems.

1. Raise Order Fulfillment Rates

Many companies must fill more orders than ever, particularly with customers from all over the country or world purchasing goods online and expecting the products to arrive in a matter of days. Logistics professionals must carefully coordinate what happens once goods leave a factory, but they can get off to a strong start by improving the coordination of warehouse-related movements. Automated storage and retrieval systems can help.

One such system — which utilizes AI, smart sensors and robotics — can bring significant workflow advantages. They include picker productivity rates increasing by four to five times, so workers can get more done in less time.

This particular system uses mobile robots to go down aisles, reach individual bins and bring them to the proper workstations. From there, humans can do the necessary processing tasks to prepare products for shipment. Such productivity improvements are particularly advantageous for companies that often deal with demand fluctuations.

For example, many businesses process more orders during the holiday season or when students return to school. ASRS infrastructure supports decision-makers to handle those spikes with ease.

Before investing in ASRS options with built-in AI technology, people should consider which problems they want to overcome or what they hope to achieve. They should then use that information to determine which commercially available systems match their requirements most effectively. Alternatively, custom solutions are possibilities when people have specific needs commercial products don’t yet meet.

2. Integrate ASRS With Warehouse Management Systems

Many logistics leaders find they must use warehouse management systems (WMS) to stay competitive in changing environments. These tools help users with multiple needs. For example, they can rely on the associated data to determine whether they have enough employees to handle anticipated labor needs.

A WMS can also track goods as they move around the warehouse. That’s beneficial for preventing high-value or large shipments from getting lost, which could represent significant losses for the affected companies. Similarly, if a business has ongoing problems with goods getting lost or broken, the WMS could help leaders determine what’s going wrong and why.

Most of today’s leading WMS systems have AI features. These typically assist with resource management, including predicting which products will sell fastest or recommending when people should reorder certain items to avoid unplanned stockouts.

One way to make the most of those offerings is to let the AI guidance shape how people use ASRS infrastructure. Perhaps the WMS algorithms predict a product will sell much faster than others. In that case, people may change how much of the item they have on hand, as well as its location within the automated storage and retrieval system. Those who take that approach should always give themselves ample time to learn how to use AI features.

It’s also important to use artificial intelligence as a guide that supports human expertise without replacing it. Well-trained algorithms can process data much faster than humans, allowing them to spot trends. However, AI tools aren’t perfect, so people should always apply their judgment before approving anything an algorithm suggests.

3. Maximize Available Storage Space

Many warehouse managers face the challenge of accommodating increasingly more products and categories. Such circumstances increasingly push people to investigate storage options. For example, a pallet flow racking system allows storing products up to 20 pallets deep, significantly increasing the warehouse’s available density.

Logistics professionals know how important it is to store things strategically, creating systems that support defined business needs. An ASRS solution is not the only option, but it’s popular due to the benefits of combined density and automation. People can also customize how items get stored in their facilities.

One frequently chosen possibility is the first-in-first-out method. It’s one of the best ways to manage perishable goods in the food, beverage or pharmaceutical industries. This approach means the products in storage the longest are the first ones a company uses. It can prevent items from expiring before customers use or even see them.

Some ASRS infrastructure also lets people take advantage of shallow and deep storage, depending on their needs. One beverage bottler in the Asia-Pacific region has an incredible 12,000 storage locations, allowing the business to handle current and emerging requirements.

When decision-makers want their ASRS to have integrated artificial intelligence features, they must always consider their must-have attributes. Automated storage and retrieval systems with AI are still relatively new. That may mean it’s necessary to have some tradeoffs when people are adamant their new system must include AI.

4. Save Time With Pick-Path Optimization

The pick path is an employee’s route through a warehouse when grabbing items to fill orders. However, most automated storage and retrieval systems also optimize their pick paths to work as efficiently as possible.

One commercially available AI solution reduces congestion and dwell time while minimizing travel distances. It can still achieve those benefits when users store goods in differently-sized containers. This option suits warehouses with up to 20,000 SKUs, providing up to 40% more throughput than manual operations.

Some companies also combine automated storage and retrieval systems with mobile robots to further reduce workers’ time moving through warehouses. That’s a practical way to implement artificial intelligence if the ASRS does not include the technology.

Before using any automated systems in a facility, an excellent starting point is to ask workers which tasks consume most of their time and what could make them more efficient. Their answers may be valuable for planning which ASRS to use so employees can maximize their time.

People should also view pick-path optimization as a constantly changing aspect due to how circumstances shift when items get added or removed from a warehouse. One of the benefits of using AI is the technology can recognize what’s different and make decisions accordingly.

Automated Storage and Retrieval Systems Make Good Business Sense

The four reasons above highlight why logistics professionals commonly choose automated storage and retrieval systems to streamline operations. Selecting options with built-in artificial intelligence are particularly useful for supporting decision-making in high-volume, fast-paced environments.

 

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Global Logistics, Global Trade Daily, logistics

5 Reasons Billing Transparency Is a Game-Changer for BCOs After OSRA

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On June 16, 2022, U.S. President Joe Biden signed the Ocean Shipping Reform Act (OSRA). One of its objectives was to reduce the costs associated with the demurrage and detention billing of beneficial cargo owners (BCOs). BCOs have previously complained about the lack of shipping billing transparency, noting they had to pay for costs outside their control and that the bills received were frequently unpredictable. Here’s why the OSRA should improve those issues and what BCOs can expect.

1. It Should Eliminate Questionable Demurrage and Detention Billing Practices 

Many OSRA elements center on forbidding some demurrage and detention billings imposed on BCOs. For starters, beneficial cargo owners will no longer receive extra charges based solely on the size, weight, type or classification of the cargo. 

OSRA also facilitates the Federal Maritime Commission (FMC) to investigate suspected unfair practices against U.S. shippers, including those associated with carriers’ discriminatory behaviors. 

Relatedly, ocean carriers must prove their demurrage and detention billing decisions occurred on reasonable grounds. Improved shipping billing transparency provides a more concrete paper trail, helping BCOs trace and see the justification for specific charges. OSRA also allows the FMC to impose penalties on parties found to engage in retaliatory practices against U.S. shippers, including those that could make securing space on ocean vessels more difficult.

These changes should level the playing field for people who work with ocean carriers. They should also reduce the fear people may have for reporting entities that try to charge unwarranted fees. 

2. It Removes the Recipient’s Obligation to Pay Non-Compliant Bills

OSRA specifics relieve recipients from paying demurrage and detention bills found non-compliant. Demurrage charges occur when too much time passes before full containers are moved outside of a terminal or port for unloading. Parties become liable for detention charges when it takes too long for shipping containers to return to the correct depot after unpacking finishes.

Both situations provide the relevant parties with a specific number of free days, and the fining begins outside that time frame. Now, BCOs and other shippers can challenge bills viewed as unfair, and the FMC has the authority to investigate such claims. 

The FMC also confirmed there’s no grace period for complying with OSRA. It went into effect as soon as Biden signed it. Additionally, OSRA’s specifics at least temporarily remove a recipient’s responsibility to pay a non-compliant bill. However, the FMC stipulated that the recipient must still pay if the biller reissues a compliant invoice.

Recipients must not believe they never have to pay a carrier’s bill after receiving one that does not align with OSRA. That’s only true if the recipient never eventually gets one that complies.

3. The Shipping Billing Transparency Extends Beyond the U.S.

Although OSRA is U.S.-based, it applies to foreign carriers that are moving goods between ports in the U.S. and abroad or transporting goods between the U.S. and other countries. Additionally, carriers must follow OSRA even if the demurrage and detention billing occurs outside the U.S., resulting in paperwork originating from other countries. 

These details should provide additional peace of mind for BCOs operating in an increasingly global market. Even if they primarily deal with companies based outside the U.S., those businesses must still provide the better billing transparency OSRA requires, as long as some of their journeys involve the U.S. and its ports. 

4. It Will Bring More Consistency to Shipping Exchanges

Shipping exchanges have become essential for people who move goods via land, sea or air. They’re online services that allow companies to advertise their available capacity to people who need to transport goods. These websites help people see all the possibilities and get the best rates for their desired dates. 

A part of the OSRA gives shipping exchanges three years to register with the FMC. However, the FMC has not yet provided the specifics for how that registration will occur, meaning that this stipulation may realistically take longer than three years to come into full effect. 

People associated with shipping exchanges should start preparing now for the high likelihood of extra paperwork associated with registering. They must also realize that failure to comply could give the FMC the right to shut down a business. 

However, the most likely positive effect for BCOs is that they will know the shipping exchanges with which they do business must fit within a specific framework associated with their FMC registrations. Moreover, if someone working for a BCO finds a seemingly non-compliant shipping exchange, they will have recourse for getting that conduct investigated. 

5. The Effects Are Already Evident

Another aspect of OSRA requires the FMC to publish an annual public report showing the parties penalized for inappropriate demurrage and detention billing and the associated fines. That document will be on a website for anyone to read. The information will also help parties avoid the common carriers shown to be first-time or repeat offenders. 

The good news for BCOs is that they can already see OSRA in action. In early June 2023, operator Hamburg Süd received a $9.8 million penalty under the Act. It was for “refusal to deal,” whereby the operator allegedly would not do business with a Florida-based furniture importer out of retaliatory action. Evidence uncovered about this situation showed Hamburg Süd stopped fulfilling its contractual agreements when representatives learned the furniture importer might take legal action against the company. 

However, the FMC subsequently agreed to review the language in OSRA regarding other refusal-to-deal-like instances. Parties from the International Federation of Freight Forwarders Associations (FIATA) raised concerns that many of the things carriers do to manage capacity — such as schedule changes or canceled sailings — could get co-opted to prevent certain customers from doing business with a company.

Thus, the FMC noted evidence of a carrier changing schedules or canceling trips for reasons other than demand fluctuations would not be considered legitimate transportation factors. This may be one of many OSRA reviews people see. In any case, such instances strengthen the overall shipping billing transparency of the Act.

Notable Improvements to Anticipate

Better shipping billing transparency affects BCOs and everyone else doing business with ocean carriers. These five aspects are some of the most compelling reasons why OSRA should end, or greatly reduce, unfair billing and retaliatory practices shown by the respective entities.

 

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Global Logistics, Global Trade Daily, Technology

Electric Vehicle Demand Is Revving Up in Logistics and Robots are Here to Help

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EV adoption is on the rise in the logistics industry and manufacturers are meeting that demand with help from robotics. Logistics companies that adopt EVs can reduce their emissions and save money on fuel and maintenance costs. Robots help manufacturers provide these new vehicles by resolving labor shortages, reducing waste, minimizing production costs and more. 

Rising Demand for EVs in Logistics

Demand for EVs in logistics is on the rise due to several factors. Over recent years, EV technology has seen many innovations, improving performance and affordability. EV adoption in the U.S. was 27 times higher in 2021 than in 2011. While logistics vehicles lag behind consumer EVs, a rising tide of innovation is still underway.

For example, leading logistics companies have announced a switch to EVs over the past few years. The USPS announced a plan to deploy over 60,000 electric delivery vehicles by 2028. Amazon’s electric delivery vans began hitting the streets in mid-2022 alongside EV fleets from FedEx and UPS.

Over the past few years, EV technology has reached a tipping point where it is both functional and relatively inexpensive. Public awareness about fuel emissions is also on the rise, which is strengthening investment and adoption. Logistics companies can improve their ESG performance by adopting EVs.

Benefits of EVs for the Logistics Industry

Why is demand for EVs in logistics increasing? The logistics industry relies heavily on efficient fleets that are low-cost and high-performance. Today’s EV technology is well-positioned to meet those needs. There are also valuable financial benefits to adopting EVs. 

For example, the U.S. federal government offers a growing number of tax credits and incentives to promote electric vehicles. Logistics companies can use these programs to save money and make EV investments more affordable. Businesses can also save money through the lower cost of charging compared to gas or diesel fuel. 

EVs are ideal for logistics applications since they are quiet and reduce urban pollution. Logistics often requires moving goods through residential areas and cities, where noise and air pollution are already high. Switching to EVs helps logistics companies do their part to resolve these issues. 

The Role of Robots in EV Production

Mass logistics EV adoption relies on a strong EV manufacturing industry. Robots are helping manufacturers meet demand while keeping costs and waste low. They are crucial to ensuring success for the future of logistics EVs. 

Improved Manufacturing Safety

Robots are ideal for electric vehicle manufacturing because they allow manufacturers to make more out of less. Research shows the manufacturing industry will be short over 2 million employees by 2030. As a result, manufacturers are attempting to meet rising EV demand with smaller teams of employees. 

Robots can fill those labor shortage gaps by automating repetitive, time-consuming tasks. Integrating robots in EV manufacturing also improves employee safety by reducing physical risks. Employees can switch to less strenuous roles while robots automate physically-demanding tasks like moving heavy parts. 

Collaborative robots, or cobots, are particularly effective for EV manufacturing. Engineers design these robots to work alongside humans. As a result, they improve workplace safety, productivity and resilience. EV manufacturers can blend the talents of both humans and robots by adopting human-friendly cobots.

Waste and Cost Reduction

Minimizing waste in EV manufacturing is an integral part of meeting the environmental goals engineers design electric vehicles to support. Robots can reduce production waste as much as possible through high efficiency and accuracy. This saves supplies, resources, time and money. 

Robots can perform the same task countless times without diminishing returns or significant variety. As a result, robots can deliver more consistent quality than humans. Employees will naturally get tired, fatigued and distracted on the job occasionally. In repetitive manual tasks, this can cause higher defect rates resulting in wasted materials. 

EV manufacturing can also benefit from the high level of precision robots offer. EVs require carefully assembled battery units and electronics which are often the most expensive part of the vehicle. Applying robots to battery assembly ensures the highest level of precision and consistent quality. It also minimizes the likelihood of production errors or defects wasting costly materials. 

Challenges Facing EVs in Logistics

What challenges is logistics EV adoption facing today? The EV market has a few main road bumps, particularly infrastructure and the initial investment cost. These challenges may be resolved with further innovation and development over the next few years, including help from robotics. 

Charging Infrastructure

Few things are hindering EV adoption like charging infrastructure. Surveys show that 47% of Americans are unlikely to purchase an EV, with 77% citing charger availability as a major or minor concern.

Charging infrastructure remains more complicated and less accessible than conventional gas stations. Different vehicle manufacturers may use different types of chargers. Charging stations vary significantly in the charging time and power they can provide. Refilling a gas tank is also drastically faster than leaving an EV to charge for hours. 

If EVs in logistics are going to reach their full potential, charging infrastructure will require significant innovation. Larger-capacity batteries may help but can also result in longer charging times. Heat management also creates a ceiling on how fast drivers can safely recharge EV batteries. 

Robots can help manufacturers produce more EV charging equipment with less money and resources. This will help grow the charging network and keep charger installation and operation affordable for everyone, including logistics vehicles. 

Affordability

Despite progress over recent years, affordability remains a challenge for EVs. The high initial investment cost can make it particularly difficult to get logistics companies and other businesses on board. Even if EVs are cheaper to own over time, the initial purchase price remains higher than gas or diesel-powered vehicles. 

Integrating robots in the EV manufacturing process can minimize production costs and bring down the purchase price of electric vehicles. Further innovation in EV design will also result in more affordable, efficient vehicles down the road. 

Batteries vs. Hydrogen Electric

EVs in logistics specifically are facing an interesting debate — are batteries or hydrogen fuel better for electric vehicles? Usually, people think of battery electric vehicles, or BEVs, when they hear about EVs. However, batteries aren’t the only power source available today. They might not be the best option for logistics applications, either. 

Hydrogen fuel cells are gaining popularity for electrifying the fleet industry, providing a cost-effective alternative to batteries for larger vehicles. Hydrogen fuel cells are great for vehicles like vans and trucks since they don’t require large, expensive battery packs or lengthy charging times. Instead, drivers simply refuel the vehicle with hydrogen fuel like at a gas or diesel station. Hydrogen electric vehicles may be the perfect solution for the logistics industry, providing clean transportation without the drawbacks of charging complications. 

The Future of EVs in Logistics

Electric vehicles are the future of transportation in every industry, including logistics. Robots are helping EV manufacturers resolve labor shortages, improve productivity, lower costs, reduce waste and improve employee safety. Over the coming years, manufacturing robots will support the growth of logistics EV adoption as the industry works to overcome a few remaining electrification challenges.

 

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Global Logistics, Global Trade Daily

How Is Digital Freight Forwarding Transforming the Industry?

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The freight industry has been forced to evolve, particularly as consumer spending habits have shifted in recent decades. Thanks to the internet, people can buy things from across the world and receive them quickly. That’s even more likely to happen with the use of digital freight forwarding platforms from industry professionals. Learn more about what digital freight forwarding is and how it has impacted the industry so far.

What Is Digital Freight Forwarding?

Digital freight forwarding involves using apps, databases, web platforms and similar tools to facilitate the movement, import and export of clients’ goods. It can include tracking shipments, improving communications between relevant parties, maintaining a paperless system for signing and keeping documents, coordinating steps and services between companies and more. 

This method brings numerous advantages, including more efficient, highly accurate shipments. Those outcomes can help companies increase competitiveness and react more decisively to challenging circumstances. 

However, it takes time and money to implement digital freight forwarding well. That’s why this approach is becoming more widespread but still hasn’t been adopted by all companies in the industry. Plus, people need time to adapt to most changes, so decision-makers may not see the expected benefits immediately. Those realities aside, digital freight forwarding makes good business sense for many of the organizations utilizing it. 

What is digital freight forwarding in a long-term sense? Many experts see it as the future and something decision-makers must pursue to keep up with peers. 

Promoting Better Productivity

Freight forwarders have detail-oriented jobs and they frequently deal with factors that are not wholly within their control. That reality requires these professionals to be excellent problem-solvers and remain flexible in uncertain situations. However, using a digital freight forwarding platform can reduce the number of issues cropping up in a given day. 

A 2023 survey found that focusing on digitalizing specific processes could have notable benefits. The best outcomes came when people used online marketplaces to source partners and equipment, live chat features to negotiate terms and conditions and container-tracking features to get live estimated arrival times. Together, those resources allowed people to save four working days per month or more than eight hours every week. 

Another takeaway was that online marketplaces allow freight forwarders to find partners in only 5-10 minutes. That means they save 170 minutes per new partner compared to those not using digital tools. 

Manual payments represent significant time spent, too. A third of people responding to the survey said each transaction takes approximately 10 minutes. Another 20% of those polled expressed frustrations while following up with people regarding manual payments. However, digital tools can speed up all aspects of the process, whether finalizing a transaction or providing an easily accessible record of everything that has happened. 

What is digital freight forwarding doing for companies’ employment needs? When organizations use modern platforms well, they may find they can complete the same duties with fewer people. That’s especially helpful when the workload ramps up and a company cannot feasibly hire more team members right away. 

Offering Better Visibility

A digital freight forwarding platform also makes it easier for people to see precisely where individual shipments are within the supply chain. Such insights give freight leaders more confidence because they can provide customers with the service they want and expect. 

In one case, a partnership between FourKites and Spotos brought predicted estimated arrival times and real-time location information to European customers. Since the content spanned shipments on the move or once they reached a stop, clients could get the details throughout the whole transit route. 

The platform also includes temperature-tracking data for perishable goods, such as medicines and produce. When people can get assurances that those products will arrive safely at their destinations in sellable condition, they’ll protect the bottom line and avoid preventable waste. 

When someone achieves improved visibility by using a digital freight forwarding platform, they can also prevent issues like fraud that could otherwise derail their business if undetected. Scammers pull off one of the most common forms of freight fraud by posing as legitimate entities. In other cases, they target specific professionals and pretend to be them, often taking over their phone lines and email addresses to do so. These criminals typically disappear as soon as they secure payment from victims. 

No single technology can prevent fraud. However, some can go a long way in thwarting it. For example, freight forwarders are working with technology companies to build blockchain tools. Those products provide an unalterable record of items and everyone associated with them. Brands dealing with luxury or in-demand offerings also use the blockchain to prove a product’s authenticity. 

Enhancing Operations

Professionals in this industry must think on their feet and track numerous trends to keep their businesses successful. The great thing about using a freight forwarding platform is that it helps people stay organized and responsive by giving them the reliable information they need. 

For example, staying on top of changes in freight forwarding indexes helps people understand how much it may cost to ship or buy specific goods. Labor disputes and inclement weather are two of the many factors that have caused recent pricing shifts. However, when people have real-time tools to track those changes, they’ll know the right times to find shipping partners and get goods moving. 

The digital documentation provided by many modern tools is also a significant money-saver. Estimates suggest electronic bills of lading could cause a $6.5 billion reduction in direct costs while facilitating up to $40 billion in global trade. Despite those benefits, many companies still use paper-based recordkeeping. That’s problematic for many reasons, including the fact that paperwork could get lost or damaged. 

What is digital freight forwarding doing to support better communications? Today’s platforms allow people to see a shipment’s real-time location through dedicated apps. Then, there’s no need to spend time writing an email or waiting on hold during a phone call to get the latest details. 

A new digital offering from DHL allows customers to only receive alerts about the events most important to them. They can also get those notifications as a daily digest rather than in real time. These options mean it’s easier for people to get the necessary information without getting distracted. They’ll streamline their operations as a result. 

Using a Digital Freight Forwarding Platform Is Good for Business

There are many reasons why people should strongly consider adopting a digital freight forwarding platform sooner than later. Doing so can help them get accurate information about shipments while avoiding slowdowns, cost increases and other unwanted events. 

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Global Trade Daily, Technology

The Top 10 Smart Packaging Technologies Disrupting the Industry

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When most people think of supply chain technology, packaging may not be the first thing to come to mind. However, despite these preconceptions, smart packaging technology is a fast-growing and exciting field.

Smart packaging technology is a broad field covering new technologies integrated into packages themselves or playing a crucial role in the packaging process. Here are 10 of the most disruptive of these technologies changing the industry today.

1. RFID and NFC Tags

Devices that wirelessly transmit real-time data about a package are some of the most useful packaging technologies. Today, radio frequency identification (RFID) and near-field communication (NFC) are the two leading examples of this tech.

Both RFID and NFC can send data like a package’s location, contents and even the quality or health of those contents to nearby devices. That way, customers can verify their orders and logistics professionals can manage their inventories more efficiently. Some RFID systems can even transmit data up to 25 feet, enabling easier scanning.

2. Printed Sensors

RFID and NFC tags make important information more accessible, but they may require other devices to gather this data in the first place. In the past, that meant placing bulky electronics inside packages, which isn’t practical. Today, businesses can use printed sensors to provide the same benefits in a more convenient form factor.

New technologies can print fully functioning circuits on thin adhesive strips. Adding quality sensors, vibration monitoring or other data-gathering systems is then as easy as placing a sticker on the inside of a package. As a result, businesses can enable more data-tracking without sacrificing packaging space.

3. Active Packaging

Some smart packaging technology goes further and protects shipment quality instead of simply reporting it. Active packaging interacts with its components, in turn extending their shelf life and protecting them in transit.

This type of packaging can take several forms. At its simplest, it uses chemical ingredients to absorb unwanted elements or emit desirable compounds — like an oxygen absorber to prevent beverage oxidation. However, it can also be more high-tech. Mechanical or digital technologies inside a package can monitor and emit antimicrobial solutions or block UV radiation. 

4. Nanomaterials

Nanotechnology — tech dealing with components on a nanoscopic scale — is another disruptive example of packaging tech. Many materials exhibit unique qualities on this scale, and capitalizing on these characteristics is helping companies make packaging safer, sustainable and more reliable.

Some aerogels made of nanomaterials offer effective insulation from heat and shocks without taking up as much space as conventional materials. Other nanomaterials provide biodegradable alternatives to traditional packaging materials like plastics and waxes. In other cases, logistics companies use nanoparticles to prevent microbial contamination in pharmaceutical shipments.

5. QR Codes

Quick read (QR) codes are a more familiar technology for many, but they’ve only recently grown in packaging. Just as RFID tags can send critical data to logistics workers, QR codes let end customers learn more about their packages with a simple scan. Unlike data transmitters, though, customers can read these codes with just a smartphone.

Companies can use QR codes to reveal more product information they couldn’t fit on the package. That could entail nutritional info, best-before dates, warranty explanations or tips for usage. Whatever the specifics, these codes provide an easy gateway for customers to get more out of their products.

6. AR Packaging

Augmented reality (AR) takes these customer-packaging interactions further. AR displays virtual images over a real-time view of the real world. Packages can capitalize on this by using QR codes to unlock unique AR experiences for customers.

Some companies have used AR to promote new products or giveaways. When users scanned the packaging of their products, they’d hear music from a label’s musicians or unlock an interactive experience to enter them into product sweepstakes. These unique experiences may encourage more people to buy products with this packaging so they can see the novelty first-hand.

7. AI Package Design

Some smart packaging technology focuses on processes around the packaging instead of the package itself. One of the most groundbreaking and practical of these is artificial intelligence (AI) in package design.

AI can consider thousands of possibilities and perform complex calculations far faster than humans. Its speed and accuracy in these decisions make it an ideal way to find ways to improve packaging, like coming up with designs that use fewer materials. Businesses using AI to generate novel package designs can create stronger or more cost-efficient packaging in less time.

8. 3D Printing

Similarly, 3D printing, also called additive manufacturing, can make better packaging designs. 3D printers work faster than conventional production techniques and don’t produce as much waste, making them more cost-effective. They can also produce more unique shapes than traditional methods, enabling more customization in packaging.

Since 3D printing is more efficient and can use more sustainable materials, it makes packaging more eco-friendly. Considering how 60%-70% of consumers say they’d pay more for sustainable packaging, that advantage is crucial.

9. Blockchain Tracking

Blockchain is a newer but increasingly viable smart packaging technology. While these distributed ledgers are most famous as the underlying technology behind cryptocurrency, they offer significant advantages in logistics.

Blockchain tracking solutions can store updates from in-package sensors to improve tracking throughout the supply chain. Because blockchain records are unchangeable and transparent to anyone, using them here would help fight fraud and boost supply chain visibility. In turn, blockchain tracking would offer end customers more trust in the brands they buy from.

10. Robotics

Robots are another increasingly important technology in packaging. Manufacturing packaging, folding boxes, loading trucks and fetching packages from a warehouse are all repetitive, heavy physical tasks. That makes them hazardous and inefficient when people do them, but those kinds of workloads are where robots excel.

Robots could automate these repetitive tasks to accomplish them much faster and more safely. Human workers could then focus on more nuanced, engaging tasks. In turn, packaging centers would reduce errors, lower operating costs and maximize throughput.

Smart Packaging Technology Has Significant Potential

These technologies are just a sample of the enormous scope of today’s smart packaging technology. As tech advances, new solutions and improved innovations will emerge and become more accessible.

Smart technologies like these make the packaging industry more transparent, efficient, sustainable and reliable. As more companies take advantage of them, they’ll soon become the norm in the sector, transforming packaging for good.