With an increasing number of people and objects now having the potential to be connected to the Internet at all times, many companies are finding that they must drastically rethink their fulfillment and distribution operations. They're also coming to recognize that if they are to survive and succeed in the future, they will have to make those changes quickly.
To help companies make this evolutionary jump (and do so quickly enough), two professors at Arizona State University have created a research lab that focuses on how the Internet and physical Internet (also known as the Internet of Things) is reshaping supply chain management.
Professors Elliot Rabinovich and Dale S. Rogers say they formed the Internet-Edge Supply Chain Lab (internetedgelab.com) "to create industry-inspired research that advances understanding of innovations, challenges, and new possibilities involving supply chain management at the boundary shared by the Internet and the physical world."
The lab aims to develop collaborative programs involving companies, faculty, and students that will research these new Internet-fueled challenges with practical applications. The lab is particularly focused on three cornerstones: 1) Internet commerce, including last-mile delivery and omnichannel retailing strategies; 2) the mobile Internet and the "sharing economy," which is based on renting fragments of assets such as rides or space (the "Uber model"); and 3) the Internet of Things technology.
For example, Rabinovich and Rogers are keenly interested in how smart devices are allowing more logistics and supply chain decisions to be made on the front lines of the organization, as opposed to back at corporate offices. This raises the question, they say, of what types of information and data need to reside in a central repository, and what could—and perhaps should—live on this "Internet edge."
This is just one example of the types of questions that the lab hopes to answer. Rogers and Rabinovich anticipate disseminating the results of their work, which will be partly funded by industry sponsors, through research workshops, annual sponsor conferences, seminars, site visits, white papers, and journal articles.
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Is your academic organization conducting cutting-edge supply chain research? If so, consider sending us a brief (350-400 words) summary of your project's objectives and findings to date. Be sure to also include the names of the principal faculty and students involved—in fact, we encourage graduate students to write and submit the summaries. We'll feature one submission in our monthly Supply Chain Executive Insight e-newsletter and will post other submissions in a blog we'll be launching later this year. (Please note that in the interest of fairness, we may limit the number of articles from any one academic institution during a particular period.) Please send submissions and any questions to Senior Editor Susan Lacefield.
“Consumers pulled back in January, taking a breather after a stronger-than-expected holiday season,” NRF President and CEO Matthew Shay said in the report. “Despite the monthly decline, the year-over-year increases reflect overall consumer strength as a strong job market and wage gains above the rate of inflation continue to support spending. We’re seeing a ‘choiceful’ and value-conscious consumer who is rotating spending across goods and services and essentials and non-essentials, boosting some sectors while causing challenges in others.”
Total retail sales, excluding automobiles and gasoline, were down 1.07% seasonally adjusted month over month but up 5.44% unadjusted year over year in January, according to the Retail Monitor. That compared with increases of 1.74% month over month and 7.24% year over year in December.
Likewise, the Retail Monitor calculation of core retail sales (excluding restaurants in addition to automobile dealers and gasoline stations) was down 1.27% month over month in January but up 5.72% year over year. That compared with increases of 2.19% month over month and 8.41% year over year in December.
NRF says that unlike survey-based numbers collected by the Census Bureau, its Retail Monitor uses actual, anonymized credit and debit card purchase data compiled by Affinity Solutions and does not need to be revised monthly or annually.
As U.S. businesses count down the days until the expiration of the Trump Administration’s monthlong pause of tariffs on Canada and Mexico, a report from Uber Freight says the tariffs will likely be avoided through an extended agreement, since the potential for damaging consequences would be so severe for all parties.
If the tariffs occurred, they could push U.S. inflation higher, adding $1,000 to $1,200 to the average person's cost of living. And relief from interest rates would likely not come to the rescue, since inflation is already above the Fed's target, delaying further rate cuts.
A potential impact of the tariffs in the long run might be to boost domestic freight by giving local manufacturers an edge. However, the magnitude and sudden implementation of these tariffs means we likely won't see such benefits for a while, and the immediate damage will be more significant in the meantime, Uber Freight said in its “2025 Q1 Market update & outlook.”
That market volatility comes even as tough times continue in the freight market. In the U.S. full truckload sector, the cost per loaded mile currently exceeds spot rates significantly, which will likely push rate increases.
However, in the first quarter of 2025, spot rates are now falling, as they usually do in February following the winter peak. According to Uber Freight, this situation arose after truck operating costs rose 2 cents/mile in 2023 despite a 9-cent diesel price decline, thanks to increases in insurance (+13%), truck and trailer costs (+9%), and driver wages (+8%). Costs then fell 2 cents/mile in 2024, resulting in stable costs over the past two years.
Fortunately, Uber Freight predicts that the freight cycle could soon begin to turn, as signs of a recovery are emerging despite weak current demand. A measure of manufacturing growth called the ISM PMI edged up to 50.9 in December, surpassing the expansion threshold for the first time in 26 months.
Accordingly, new orders and production increased while employment stabilized. That means the U.S. manufacturing economy appears to be expanding after a prolonged period of contraction, signaling a positive outlook for freight demand, Uber Freight said.
The surge comes as the U.S. imposed a new 10% tariff on Chinese goods as of February 4, while pausing a more aggressive 25% tariffs on imports from Mexico and Canada until March, Descartes said in its “February Global Shipping Report.”
So far, ports are handling the surge well, with overall port transit time delays not significantly lengthening at the top 10 U.S. ports, despite elevated volumes for a seventh consecutive month. But the future may look more cloudy; businesses with global supply chains are coping with heightened uncertainty as they eye the new U.S. tariffs on China, continuing trade policy tensions, and ongoing geopolitical instability in the Middle East, Descartes said.
“The impact of new and potential tariffs, coupled with a late Chinese Lunar New Year (January 29 – February 12), may have contributed to higher U.S. container imports in January,” Jackson Wood, Director, Industry Strategy at Descartes, said in a release. “These trade policy developments add significant uncertainty to global supply chains, increasing concerns about rising import costs and supply chain disruptions. As trade tensions escalate, businesses and consumers alike may face the risk of higher prices and prolonged market volatility.”
New York-based Cofactr will now integrate Factor.io’s capabilities into its unified platform, a supply chain and logistics management tool that streamlines production, processes, and policies for critical hardware manufacturers. The combined platform will give users complete visibility into the status of every part in their Bill of Materials (BOM), across the end-to-end direct material management process, the firm said.
Those capabilities are particularly crucial for Cofactr’s core customer base, which include manufacturers in high-compliance, highly regulated sectors such as defense, aerospace, robotics, and medtech.
“Whether an organization is supplying U.S. government agencies with critical hardware or working to meet ambitious product goals in an emerging space, they’re all looking for new ways to optimize old processes that stand between them and their need to iterate at breakneck speeds,” Matthew Haber, CEO and Co-founder of Cofactr, said in a release. “Through this acquisition, we’re giving them another way to do that with acute visibility into their full bill of materials across the many suppliers they work with, directly through our platform.”
“Poor data quality in the supply chain has always been a root cause of delays that create unnecessary costs and interfere with an organization’s speed to market. For manufacturers, especially those in regulated industries, manually cross-checking hundreds of supplier communications against ERP information while navigating other complex processes and policies is a recipe for disaster,” Shultz said. “With Cofactr, we’re now working with the best in the industry to scale our ability to eliminate time-consuming tasks and increase process efficiencies so manufacturers can instead focus on building their products.”
Economic activity in the logistics industry expanded in January, growing at its fastest clip in nearly two years, according to the latest Logistics Managers’ Index (LMI) report, released this week.
The LMI jumped nearly five points from December to a reading of 62, reflecting continued steady growth in the U.S. economy along with faster-than-expected inventory growth across the sector as retailers, wholesalers, and manufacturers attempted to manage the uncertainty of tariffs and a changing regulatory environment. The January reading represented the fastest rate of expansion since June 2022, the LMI researchers said.
An LMI reading above 50 indicates growth across warehousing and transportation markets, and a reading below 50 indicates contraction. The LMI has remained in the mid- to high 50s range for most of the past year, indicating moderate, consistent growth in logistics markets.
Inventory levels rose 8.5 points from December, driven by downstream retailers stocking up ahead of the Trump administration’s potential tariffs on imports from Mexico, Canada, and China. Those increases led to higher costs throughout the industry: inventory costs, warehousing prices, and transportation prices all expanded to readings above 70, indicating strong growth. This occurred alongside slowing growth in warehousing and transportation capacity, suggesting that prices are up due to demand rather than other factors, such as inflation, according to the LMI researchers.
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).