Logistics Matters with DC VELOCITY

Guest: Bill Brooks of Capgemini on bottlenecks for Covid-19 vaccine distribution; Logistics continues an economic expansion; Supply chain vendors make huge investments to meet consumer demands

• AGiLE Business Media • Season 2 • Episode 9

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In this episode, guest Bill Brooks, vice president of North America Transportation Portfolio at Capgemini, discusses the current state of the Covid-19 vaccine programs. Logistics plays a major role in getting people vaccinated. Where are the bottlenecks, and can anything be done to assure that vaccines are distributed more quickly to both urban and rural areas?

The logistics industry continued its expansion in February, as the pandemic-induced growth of e-commerce stresses existing supply chains. Capacity is limited and prices are continuing to increase due to rising demand. What is the outlook for logistics for the foreseeable future?

Investments are growing at supply chain vendor companies. Two in particular made major investments this week to better serve demand for new systems and material handling equipment.

Articles and resources mentioned in this episode:

Podcast sponsored by MHS

Other links

David Maloney, Editorial Director, DC Velocity  00:01

Three Covid-19 vaccines have now been approved for the United States. The challenge is getting them distributed. Logistics companies continue an economic expansion. And customer demand brings new investments by supply chain vendors.

Pull up a chair and join us as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast. Hi, I'm Dave Maloney. I'm the editorial director at DC Velocity. Welcome.

Logistics Matters is sponsored by Material Handling Systems, a single-source systems integrator based in Kentucky. MHS is driven by a customer-first mentality to go above and beyond for distribution and fulfillment operations. They provide automated systems that combine robotics, sortation, software, controls, and more, with full support over the entire system lifecycle. To learn more about MHS, please visit MHSglobal.com.

As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be along to provide their insight into the top stories of this week. But to begin today: It's one of the biggest logistics challenges in history. We have all heard of the difficulties of delivering Covid-19 vaccines to hundreds of millions of people in our own nation, not to mention billions more around the world. Where are the roadblocks, and what can be done to get vaccines distributed more quickly? to address those questions. Here is Ben with today's guest. Ben.

Ben Ames, Senior News Editor, DC Velocity  01:35

Thanks, Dave. That's right. We have with us today Bill Brooks, who's the Vice President of North America transportation portfolio at Capgemini, and Bill works with clients to develop and drive efficiencies in the transportation and logistics space by leveraging new technology and solutions. Thank you for joining us today, Bill. 

Bill Brooks, Vice President, North America Transportation Portfolio, Capgemini  01:57

You bet. Nice to be here. Thank you.

Ben Ames, Senior News Editor, DC Velocity  01:59

We're starting to see, as David mentioned, widespread rollouts of Covid-19 vaccines across the country, but just in the last couple weeks, we've seen some harsh winter weather that has stalled some of the vaccine delivery across large portions of the country, including Fort Worth, Texas, where Bill is joining us from today. Bill, is that just a question of supply and demand, or are there—the winter weather aside—other specific last-mile delivery challenges involved?

Bill Brooks, Vice President, North America Transportation Portfolio, Capgemini  02:32

Yes, there are. Supply and demand is a factor, right? The further we go and the longer we go, we are seeing supply pick up, and so that is helping, when more doses are hitting the market. However, in the last mile, there are unique challenges, whether it be from the cold storage, or the difficulty of getting to rural areas, or the logistics simply of having people sign up and get in the right spot at the right time, because we have vaccines that have a limited lifespan.

Ben Ames, Senior News Editor, DC Velocity  03:09

Yeah, and that's one of the reasons for the cold-temperature storage, and it's important to remember that the vaccines can be like, you know, produce or some of the food that we get at the grocery, that they do have a limited lifetime, there. Looking at some of those challenges that you described, are those universal? Are those challenges the same all across the country? Or are there different hurdles in between, say, urban and rural areas?

Bill Brooks, Vice President, North America Transportation Portfolio, Capgemini  03:37

Well, the challenges, you know, are the same in the sense of whether, if you're in an urban area, you are going to have those those challenges that I talked about of the logistics, signups, etc. But they're complicated, right?, in the rural areas. Not only do you have those, but you have so many more. You have a longer delivery time. We've already talked about the limited life—shelf life—of the vaccines, so when you have a longer delivery time, you have less time to that you have on the on the tail end in order to get the doses into arms. You also have a lack of storage facilities with the extreme cold storage requirements that are necessary. A lot of the rural areas don't have those capabilities. And, finally, you don't have the same access when you get out in the rural. You don't have as many pharmacies to where in an urban area you might pass 100 whenever you drive a mile and a half. You might pass two in a 500-mile stretch in some of our rural areas. So, we just don't have the infrastructure out there in order to have the facilities to actually get the shots into people's arms.

Ben Ames, Senior News Editor, DC Velocity  04:58

Got it. Really interesting. Yeah, I mean, from the outside, looking at the challenge, you know, one imagines that you just put it into a freezer, and then you're all set for whatever kind of length of time or distance that you're getting across, but it sounds like it's more complicated than that. From the description, one of the problems might be handoffs between the different stages there. Such as often in the pharmacy, and then the doctor's office. Is that right?

Bill Brooks, Vice President, North America Transportation Portfolio, Capgemini  05:28

That's exactly right. You have those handoffs and, you know, with Pfizer coming in lately with their their extreme cold and kind of saying that, you know what, it can be effective maybe not being stored at such cold temperatures for as long a period of time, that is going to help through the process, because it's going to enable a more of the outlying areas in order to be able to, to use that, and this gives more vaccines capability. So, just increasing that supply side.

Ben Ames, Senior News Editor, DC Velocity  06:04

Interesting. Yeah. Well, aside from the large-scale shipments by trucks, that I sort of imagine, is the main way that the vaccine is being moved around the country, are there any other options that might address some of these concerns we've been discussing? After all, we live in an age when we're starting to hear about e-commerce orders being delivered by robots on the sidewalk, or even by air.

Bill Brooks, Vice President, North America Transportation Portfolio, Capgemini  06:31

Yeah, that's exactly right. When you start seeing robots and drones and you're thinking, Okay, can that facilitate here? And it could, to some extent, in some of the outlying areas. It could help with the speed of getting some of the doses out to a place that may be difficult to get to, but there are concerns when you do that, right? You have security concerns, you have the cold-storage concerns, like we were talking about before, you know, so there are some limitations. But I think one of the great things that we've been able to utilize through this, in our IoT, or internet of things, is sensors. The sensors not only can monitor where they are, but you can track how many vials are going to be there. We can track the arrival time, so we can do some of our logistics early and maybe, you know, bring some people together in central areas. And with those sensors, we can tell temperature, and the variances, and okay, am I having a problem, you know, with this one shipment? Or maybe I don't have as much time on the backend like I thought I was going to have in order to get it into people's arms, or You know what? Maybe this one is this set is hitting the end of its shelf life, and I've just got to get it in arms—anybody's arm—as fast as I can. So, you know, that's one of the the tools that has been very nice coming out of this, and how we can utilize that and getting it more in the mainstream.

Ben Ames, Senior News Editor, DC Velocity  08:02

Yeah, really interesting. And some of that latest technology, some of the sensors and the more widespread internet of things networks, you know, some of those tools clearly just weren't available in the past. Are people learning any kind of lessons from a historical precedent? Is there anything we can learn from history about other big widespread rollouts like this?

Bill Brooks, Vice President, North America Transportation Portfolio, Capgemini  08:27

Well, you know, it's funny, you hear the term "unprecedented" hundreds of times every day. It is an unprecedented time. However, you know, you're right, we can learn from past history, whether that be from how we roll out flu vaccines every year—you know, we've been doing that in rural areas for a number of years now, and coming up with with new approaches in some of our rural areas. Maybe we do them in schools, or hospitals, or pharmacies, or maybe even grocery stores, you know, that that's the best vehicle. So, we have learned from past years of that, but there's also other lessons we can learn from other industries, you know, whether it be utilizing the sensors better, whether it be following security protocols. Maybe it's the the software involved with scheduling and signups. Maybe it's bringing in thousands of people together in one spot in some rural areas, and do some of that planning beforehand, so whenever the doses come in, they can get them quickly, and everybody's lined up. So, there are things that we've been able to learn over time that we're applying to what is very much an unprecedented time.

Ben Ames, Senior News Editor, DC Velocity  09:46

Right, right. Really interesting. That's a great point about some of the diversity of locations that you can use. You have to really find people where they are, so... Looking at this and following it as closely as you have, are there any best practices that you've seen in various parts of the country that have been the most successful at overcoming some of these challenges?

Bill Brooks, Vice President, North America Transportation Portfolio, Capgemini  10:08

I think some of the best practices is always planning, right? Anything we can do beforehand, the better off we're going to be, whether that be in preparing for the software, for scheduling, for people to sign up, the information flow. A lot of times, we all get frustrated, and it's not because of necessarily the process, but it's because of the lack of information that we have. We don't know where we fall in the process. We don't know if our time's up. So, I think some of those areas that have focused on some of that preplanning—and you can do that now, right?—I mean, we're still in the planning stages for some of the outlying areas and stuff. So, getting that infrastructure in place, if you will. But also, utilize everything that you have at your fingertips, whether it be the sensors, whether it be you know, cold-storage facilities. Give yourself as much flexibility as you can in order to maximize each dose, because, as you know, we started off supply has been behind, but it is picking up steam. So, these doses are are like, you know, they're probably probably more important than gold, as we go through. They've got a value that we are placing on him right now, so you just have to maximize them.

Ben Ames, Senior News Editor, DC Velocity  11:37

Got it, for sure. Bill, this has been really interesting. I've learned a lot from our talk, and it sounds like there's some good advice here, and we're just at the beginning of what's going to be an ongoing process of distributing vaccines to all the corners. I really appreciate your being here with us on the show today.

Bill Brooks, Vice President, North America Transportation Portfolio, Capgemini  11:57

Thank you very much for having me, and I enjoyed our time. So thank you. 

Ben Ames, Senior News Editor, DC Velocity  12:01

Great. We've had Bill Brooks with us today, and Bill is with, he's the Vice President of North American Transportation Portfolio at Capgemini. Thank you very much. Back to you, Dave.

David Maloney, Editorial Director, DC Velocity  12:12

Thank you, Bill and Ben. Now let's take a look at some of the other supply chain news from the week. Victoria, you reported this week on continuing economic expansion in the logistics industry. What is driving this growth?

Victoria Kickham, Senior Editor, DC Velocity  12:25

Thanks, Dave. Yes, well, as Bill and Ben were just talking about, it's certainly a busy time in the logistics industry, and it has been since the beginning of the pandemic. We saw a lull after, sort of, the initial panic buying, but since then, there was a ramp-up over the summer, and the industry has been humming along, to say the least. We saw that growth continue in February, and it's really being driven by tight capacity and high prices across the market. That's according to the latest Logistics Managers' Index report, which was released earlier this week. It's also referred to as the LMI, and as many of our listeners know, it's a gauge of economic activity in the logistics industry. In February, the index registered 71.4, and that's up about four points from January and more than—or I should say, nearly 19 points, compared to your gold levels. Just as a little background, an LMI above 50 indicates growth in the industry, and below 50 indicates contraction. So, we can see there are really strong growth conditions right now. And as I said at the outset, the big story last month was price and cost. Inventory costs, warehousing prices, and transportation prices all reached their highest levels in more than two years last month, and that's basically because demand for logistics service continues to outstrip supply. This is being driven, of course, by changing consumer buying behavior, accelerating e-commerce activity and demand for last-mile delivery; also the vaccines, as we just talked about. So, essentially, it's just hard for supply chains to keep up, and we see this, also, with the congestion at U.S. ports slowing down supply chains here at home and abroad, and the situation is likely to be exacerbated in the months ahead by strong consumer and industrial growth, which will likely be driven by the government government stimulus spending we're seeing. So, there's a lot of factors, and the industry is busy, to say the least.

David Maloney, Editorial Director, DC Velocity  14:16

Victoria in your reporting, did you find that there's any relief in sight?

Victoria Kickham, Senior Editor, DC Velocity  14:20

Yeah, good question. Not really. Transportation and warehousing capacity have been declining for months, and although most of the supply chain executives surveyed for the LMI say they expect capacity to come back online in the next 12 months or so, they say it's unlikely to reach a level that will push supply and demand on par. LMI researcher Zac Rogers, who I spoke to about the report this week, agrees it will likely take more than a year to build up enough capacity to catch up. so... And survey respondents also say they expect prices to continue to rise. So, essentially, the supply chain has gotten very expensive, and it looks like it's going to stay that way for a while.

David Maloney, Editorial Director, DC Velocity  14:59

Yeah, I guess there's only so much that you could pour through a funnel until you get a bigger funnel. 

Victoria Kickham, Senior Editor, DC Velocity  15:05

That's right. 

David Maloney, Editorial Director, DC Velocity  15:06

Thanks, Victoria.

Victoria Kickham, Senior Editor, DC Velocity  15:07

You're welcome.

David Maloney, Editorial Director, DC Velocity  15:09

And Ben, you wrote this week about a couple of supply chain vendor companies that made major investments to meet growing demand. Can you tell us more?

Ben Ames, Senior News Editor, DC Velocity  15:17

I can, Dave, and this actually really dovetails with some of the trends that Victoria was just describing about the LMI and the high demands for logistics services we're seeing. Keeping those supply chains running smoothly over the past year has been really difficult for players in all parts of the industry, but we got two specific examples of how some companies are dealing with that, just in the past week. One of them was project44, which our readers might have heard about. It's a Chicago-based software and technology provider that helps companies maintain supply chain visibility by supporting real-time tracking of goods in transit. About three months ago, they had landed $100 million in venture capital, so they're very well funded, and yesterday they spent some of that backing when they said they had acquired a German company that tracks ocean containers while they're being shipped. So, that, of course extends project44's ability to track freight, whether it's in trucks or trains or ships. It also increases the company's presence in the European freight market, where they see a lot of potential for growth. Also, as well as those justifications, they pointed out that it was very timely move, because as the pandemic drags on, just as Victoria had mentioned, the surging global trade volumes are disrupting a lot of typical supply chain patterns. They're sending freight rates soaring higher and contributing to some real import delays due to port congestion. So, project44's founder and CEO, named Jeff McCandless, said that while they're hopeful that those container and port roadblocks will ease up soon, the last year has exposed several weakspots for supply chains, so he believes that his customers need a single supply chain visibility solution across all modes of travel and geography so that they can best react to those pressures. 

David Maloney, Editorial Director, DC Velocity  17:13

Yeah, that's very interesting, and you also covered another company that's doing very well in a different sector of the supply chain. Can you tell us about that?

Ben Ames, Senior News Editor, DC Velocity  17:21

Yeah, that's right. It's interesting. We go right from the sort of highest of high technology with project44, there, to also, in the same week, covering a story about Hytrol. That's a company in Arkansas that makes conveyors. And that's the basic hardware.— think all of our readers have seen them—found in, really, every warehouse, and it allows workers to move goods around, do their fulfillment tasks, sorting, packing. So, what Hytrol has found is that the big spike in demand for e-commerce we've all seen has pushed, likewise, demand for their conveyors—specifically, the ones designed to handle parcels and poly bags, and all the other packages that end up on our doorsteps. It's a good thing, but they were spending so much time making those specialized conveyors that they were even having trouble filling orders for the other models of conveyor that they make. So, for the first time, since 1962, they expanded into a new factory, but they faced some real challenges to get there because, of course, in the middle of a pandemic, they were also in a hurry to add that capacity. So, it was interesting. They had to order these powerful lasers they use to cut the steel that forms the conveyors even before they'd chosen the new location for the factory where the lasers were going to get delivered. And then just as they were making that all work out, as we referenced at the top, the whole southwest region of the U.S. was hit with a huge winter freeze that knocked out power and water. But they actually, Hytrol stayed on schedule, and despite those things, they were able to start shipping finished products just 60 days after signing the lease on their new site.

David Maloney, Editorial Director, DC Velocity  18:53

Yeah, that's very impressive to get that new factory up and running so quickly, and it really shows the demand that companies now have for material handling technologies.

Ben Ames, Senior News Editor, DC Velocity  19:01

That's exactly right.

David Maloney, Editorial Director, DC Velocity  19:03

We encourage listeners to go to DCVelocity.com for more on these and other supply chain stories. And check out the podcast Notes section for some direct links on the topics we discussed today. Thanks, Ben and Victoria, for sharing highlights of the news this week.

Ben Ames, Senior News Editor, DC Velocity  19:17

Thank you, Dave. Always fun.

Victoria Kickham, Senior Editor, DC Velocity  19:19

Yes, you're welcome. Good to be here.

David Maloney, Editorial Director, DC Velocity  19:22

And again, our thanks to Bill Brooks of Capgemini for being with us today. We encourage your comments on this topic and our other stories. You can email us at podcast@dcvelocity com.

We also encourage you to rate this podcast, if your podcast platform allows for that. We appreciate your feedback, and it really does help people to find us.

And a reminder: Logistics Matters is sponsored by MHS. See why leading supply chain organizations turn to MHS as their trusted integration partner by visiting MHSglobal.com.

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We'll be back again next week with another edition of Logistics Matters, when we'll look at the Biden administration's bold plan to fix some of our nation's broken supply chains, so be sure to join us. Until then, please stay safe and have a great week.