From malware to ransomware and everything in between, hackers are everywhere these days, putting businesses, consumers, and governments at ever-increasing risk of cyberattack. Supply chains top the list of prime targets heading into 2023, according to a list of seven cybersecurity trends to watch from encryption technology company NordLocker, released this week.
“Cybersecurity never stops evolving because digital technologies are increasingly overtaking each part of our lives, in turn increasing the scope cybersecurity tools should cover,” NordLocker’s Chief Technology Officer Tomas Smalakys said in a press release. “This ever-changing nature of the cybersecurity field makes each week, month, and year different from those that have passed, making it extremely important to stay two steps ahead of emerging threats.”
Smalakys listed the targeting of supply chains as the second-biggest cyberthreat heading into 2023, just behind the rise of “fileless malware.”“The Covid-induced global chip shortage revealed that the most fragile part of the global economy is its interconnectedness. By targeting companies that play critical roles in the activities of other businesses, such as raw materials suppliers or logistics firms, cybercriminals have the ability to grind an entire supply chain to a halt and apply mounting pressure to make victims meet their demands,” he said. “We already see this trend in 2022, and these types of attacks are only ramping up.”
Other top trends on Smalakys’ list include:
Fileless malware will pose serious concerns. Because fileless malware does not require its victim to download any files, it is practically undetectable by most information security tools. This type of malicious software works by exploiting vulnerabilities in already downloaded, well-known, and trusted applications, leaving no trace on the computer’s memory. Fileless malware requires significant skills to develop and carry out, but if it's successful, it can do immense damage.
Employees will be the weakest link in corporate cybersecurity. With the human factor being the culprit behind more than 80% of cyberattacks, companies will continue struggling to instill proper cyber hygiene principles in their employee culture, even though the tools they use are becoming increasingly advanced.
Ransomware will become more targeted. Usually, ransomware is spread randomly to numerous targets by phishing or other social engineering methods with the hopes that someone will click the link or provide their credentials. More recently, however, ransomware gangs have been applying a different approach that is more carefully crafted to each individual victim and can do much more damage.
Cloud security will become increasingly important. With companies increasingly moving their data into the cloud instead of storing files locally on their computer, we will see a growing number of cyberattacks that exploit vulnerabilities in current solutions.
The EU threatens encryption laws. In order to curb various online crimes, the European Commission has put forward a proposal to weaken encryption laws across the bloc. If it passes, the new law will require digital platforms to scan every single message or file sent through their services for suspicious content. While the motivation behind the initiative is well-intentioned, it would make the internet much less private and secure.
Reduced cybersecurity spending will expose vulnerabilities. With a looming recession, many companies and individuals are rethinking their budgets, and cybersecurity spending is often among the first to receive a cut. Criminals will exploit this lowered guard, which is very likely to make 2023 one of the costliest and most destructive years for entities affected by cybersecurity incidents.
Documented processes and procedures are an important aspect of any successful distribution operation. Without process documentation, product gets shipped and not billed, customer orders and items get lost, and employees get upset. Distribution outfits need some form of step-by-step manuals, workflow diagrams, or digital instructions to ensure that operations run smoothly, consistently, and efficiently. However, creating and updating these documents has, historically, been time-consuming and resource-intensive.
Generative artificial intelligence (Gen AI)—a subset of AI that can create content, such as text, images, videos, and other media—can help. This cutting-edge technology has the potential to streamline the process of creating documented processes and procedures. As a result, it can become a cornerstone for companies looking to optimize their distribution operations, streamline training processes, and provide a superior customer experience. What once seemed like a distant futuristic possibility is now a crucial tool for the modern distribution industry.
The cornerstone of consistency
Documented procedures standardize operations across all levels of the distribution chain, from warehouse workers to managers. When employees follow clearly defined steps, consistency in task execution becomes a given. This is especially important in large distribution centers where employees might work on similar tasks but in different shifts. Standardization helps maintain a consistent level of quality, regardless of who is performing the job. This not only enhances operational efficiency but also minimizes errors.
In addition to providing consistency, documented processes and procedures have several other benefits such as streamlining training and onboarding, enhancing knowledge retention, improving performance evaluation, aiding in continuous improvement efforts, and ensuring compliance with industry regulations.
Training and onboarding:Training new employees is a critical phase in any organization, but even more so in the distribution sector, where complex logistics and time-sensitive processes are involved. Clear, documented procedures make it easier to onboard new staff, reducing the learning curve and ensuring they can contribute effectively in a shorter amount of time. These materials are a reliable resource for employees, allowing them to refer back whenever they are uncertain about the correct procedure for a task.
In the past, training often depended on experienced employees showing new hires the ropes, which can be time-consuming and inconsistent. Well-documented processes eliminate this dependency and ensure that training is uniform across the board, leading to faster, more efficient onboarding.
Knowledge retention: One of the biggest challenges many organizations face is the loss of knowledge when experienced employees leave. A robust system of documented procedures acts as an institutional memory, preserving critical knowledge and ensuring that valuable insights and practices are not lost when staff turnover occurs. This continuity is essential for maintaining long-term operational efficiency.
Performance evaluation and continuous improvement: Standardized, documented procedures allow for more objective performance evaluations. Managers can measure employee performance against clearly defined expectations, identifying areas of strength and opportunities for improvement. In addition, these documents serve as a foundation for continuous improvement efforts. By periodically reviewing and refining procedures, businesses can adapt to changing market conditions, adopt new technologies, and optimize workflows to stay competitive.
Compliance and auditing: In today’s regulatory environment, compliance is non-negotiable. Documented procedures are vital in ensuring that a company complies with industry regulations. When processes are clearly outlined and followed, it is easier to demonstrate adherence to safety standards, labor laws, and environmental regulations. This helps avoid costly fines and simplifies the auditing process, reducing the time and resources required for internal and external audits.
The perils of unclear instructions
When warehouses operate without clear, well-documented processes, they expose themselves to risks and inefficiencies. Unclear expectations create uncertainty, which can ripple across the entire operation. Here are some common examples:
Inconsistent performance and increased error rates: Employees may interpret tasks differently without standardized guidelines, leading to inconsistent performance. Variations in completing tasks can result in some excellent but many suboptimal outcomes. For instance, one employee may prioritize speed, while another focuses on accuracy. This inconsistency affects productivity and can lead to a higher error rate in order fulfillment, inventory management, or customer service.
Even small errors can have big consequences in a fast-paced warehouse environment. Incorrectly filled orders, damaged goods, or delayed shipments can damage customer relationships and result in financial losses.
Higher training costs and reduced productivity: When processes are not clearly defined, training new employees becomes more resource-intensive. Without a formalized training program supported by documented procedures, trainers often have to spend more time demonstrating tasks and correcting mistakes. This increases the cost of training and diverts experienced staff away from their regular duties, thus lowering overall productivity.
Customer dissatisfaction: Customer experience is a key differentiator in today’s competitive marketplace. Consistency in processes directly impacts how customers perceive a brand. A positive, uniform experience across multiple interactions strengthens brand identity and fosters loyalty. Customers are more likely to become repeat buyers when they know they can rely on the distributor to deliver on its promises, whether that’s order accuracy, speed of delivery, or responsiveness to inquiries.
Inconsistent service inevitably leads to customer dissatisfaction. Customers expect a reliable and uniform experience, especially regarding delivery times, product availability, and order accuracy. A lack of clear, repeatable processes can make it more likely for a company to fail to meet customer expectations, leading to complaints, returns, and, ultimately, loss of business.
Difficulty scaling operations: Scaling operations becomes increasingly difficult when there is no standardized playbook to follow. As distribution centers grow or a company expands to new locations, replicating success becomes challenging if processes are unclear.
Scalable, consistent processes also allow companies to grow their operations while maintaining the same level of service quality. This scalability becomes a significant competitive advantage in a sector where margins are thin and efficiency is paramount. By ensuring that processes are repeatable and effective, companies can focus on expanding their reach and entering new markets without sacrificing quality.
The potential role of Gen AI
Gen AI is a game changer for distribution operations that are looking to create, update, or optimize their process documentation. Gen AI can drastically reduce the time and effort required to develop comprehensive procedural guidelines by automating and enhancing the content creation process. (Figure 1 above lists the main benefits of using Gen AI to create process documentation and procedures.)
One of the most significant advantages of Gen AI is its ability to generate content quickly. Whether creating initial drafts of process documents or updating existing procedures, AI can handle these tasks in a fraction of the time it would take a human team. AI can also customize the content for specific roles, locations, or scenarios, ensuring the documentation is relevant and applicable to various operational segments.
Gen AI can create documentation in multiple formats, including text-based manuals, visual flowcharts, and instructional videos. This flexibility allows companies to create a variety of training materials that cater to different learning styles and ensures that employees can access information in the format that works best for them. Furthermore, as procedures evolve over time, AI can easily update these documents, keeping them current and aligned with the latest operational requirements.
Best practices and considerations
While the potential benefits of Gen AI are clear, successful implementation requires careful planning and strategic execution. The following are some key considerations that companies must keep in mind as they use Gen AI tools in real-world situations:
Human oversight: AI-generated content should not replace human expertise but rather complement it. Subject matter experts must review AI-generated documents to ensure their accuracy and relevance.
Data quality: AI systems need access to high-quality data to be effective, so ensuring that your organization’s operational data is up-to-date is critical.
Ethical considerations: As with any AI system, ethical considerations must be taken into account, particularly regarding potential biases in the content.
Employee training: Companies must also invest in training their employees to use AI tools effectively, ensuring that they can access and apply the information generated by AI systems.
Security and privacy: As AI systems rely on sensitive operational data, robust security measures are necessary to protect this information.
Change management: Introducing AI significantly changes how employees access and use procedural documentation. Clear communication and training are essential to ensure smooth adoption and to help employees see AI as a tool that enhances their work rather than a threat to their jobs.
Embracing the future of distribution
The distribution sector is on the brink of a significant transformation in today's fast-paced, ever-evolving business landscape. The driving force behind this change is the rise of artificial intelligence and, more specifically, generative AI.
It’s important to realize that Gen AI is not just a tool for the future—it is a tool that can already be used today to improve distribution processes. Companies can create more consistent, efficient, and scalable operations by embracing this technology. AI is poised to revolutionize how companies document and update their distribution processes, which in turn can streamline training and onboarding and improve customer satisfaction and operational efficiency.
As the industry moves forward, those who integrate Gen AI into their operations will be better positioned to meet the demands of a dynamic marketplace. The future of distribution lies in the partnership between human expertise and AI, creating a synergy that drives innovation and sets a new standard for excellence in the field.
About the author: Steve Levy is the vice president of Enterprise Architecture for the distribution industry at Infor. Before joining Infor, he honed his skills and expertise working in the distribution industry and was the executive vice president at a wholesale paper distributor.
As the Trump Administration threatens new steps in a growing trade war, U.S. manufacturers and retailers are calling for a ceasefire, saying the crossfire caused by the new tax hikes on American businesses will raise prices for consumers and possibly trigger rising inflation.
Tariffs are taxes charged by a country on its own businesses that import goods from other nations. Until they can invest in long-term alternatives like building new factories or finding new trading partners, companies must either take those additional tax duties out of their profit margins or pass them on to consumers as higher prices.
The Trump Administration on Thursday announced it may impose “reciprocal tariffs” on any country that currently holds tariffs on the import of U.S. goods. That step followed earlier threats to apply tariffs on the import of steel and aluminum beginning March 12, another plan to charge tariffs on the import of materials from Canada and Mexico—now postponed until early March—and new round of tariffs on imports from China including a 10% blanket increase and the elimination of the “de minimis” exception for individual items under a value of $800 each.
Various industry groups say that while the Administration may have legitimate goals in ramping up a trade war—such as lowering foreign tariff and non-tariff trade barriers—applying a strategy of hiking tariffs on imports coming into America would inflict economic harm on U.S. businesses and consumers.
“This tariff-heavy approach continues to gamble with our economic prosperity and is based on incomplete thinking about the vital role ethical and fairly traded imports play in the prosperity,” Steve Lamar, president and CEO of The American Apparel & Footwear Association (AAFA) said in a release. “Putting America first means ensuring predictability for American businesses that create U.S. jobs; affordable options for American consumers who power our economy; opportunities for farmers who feed our families; and support for tens of millions of U.S. workers whose trade dependent jobs make our factories, our stores, our warehouses, and our offices function. Sweeping new tariffs — a possible outcome of this exercise — instead puts America last, raising costs for American manufacturers for critical inputs and materials, closing key markets for American farmers, and raising prices for hardworking American families.”
A similar message came from the National Retail Federation (NRF), whose executive vice president of government relations, David French, said: “While we support the president’s efforts to reduce trade barriers and imbalances, this scale of undertaking is massive and will be extremely disruptive to our supply chains. It will likely result in higher prices for hardworking American families and will erode household spending power. We encourage the president to seek coordination and collaboration with our trading partners and bring stability to our supply chains and family budgets.”
The logistics tech firm Körber Supply Chain Software has a common position. "The imposition of new tariffs, or the suspension of tariffs, introduces substantial challenges for businesses dependent on international supply chains. Industries such as automotive and electronics, which rely heavily on cross-border trade with Mexico and Canada, are particularly vulnerable,” Steve Blough, Chief Strategist at Körber Supply Chain Software, said in an emailed statement. “Supply chains that are doing low-value ecommerce deliveries will have their business model thrown into complete disarray. The increased costs due to tariffs, or the increased costs in processing time due to suspensions, may lead to higher consumer prices and processing times.”
And further opposition to the strategy came from the California-based IT consulting firm Bristlecone. “Tariffs or the potential for tariffs increase uncertainty throughout the supply chain, potentially stalling deals, impacting the sourcing of raw materials, and prompting higher prices for consumers,” Jen Chew, Bristlecone’s VP of Solutions & Consulting, said in a statement. “Tariffs and other protectionist economic policies reflect an overarching trend away from global sourcing and toward local sourcing and production. However, despite the perceived benefits of local operations, some resources and capabilities may simply not be available locally, prompting manufacturers to continue operations overseas, even if it means paying steep tariffs.”
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”
Know someone who is making a difference in the world of logistics? Then consider nominating that person as one of DC Velocity’s “Rainmakers”—professionals from all facets of the business whose achievements set them apart from the crowd. In the past, they have included practitioners, consultants, academics, vendors, and even military commanders.
To identify these achievers, DC Velocity’s editorial directors work with members of the magazine’s Editorial Advisory Board. The nomination process begins in January and concludes in April with a vote to determine which nominees will be invited to become Rainmakers.
It’s getting a little easier to find warehouse space in the U.S., as the frantic construction pace of recent years declined to pre-pandemic levels in the fourth quarter of 2024, in line with rising vacancies, according to a report from real estate firm Colliers.
Those trends played out as the gap between new building supply and tenants’ demand narrowed during 2024, the firm said in its “U.S. Industrial Market Outlook Report / Q4 2024.” By the numbers, developers delivered 400 million square feet for the year, 34% below the record 607 million square feet completed in 2023. And net absorption, a key measure of demand, declined by 27%, to 168 million square feet.
Consequently, the U.S. industrial vacancy rate rose by 126 basis points, to 6.8%, as construction activity normalized at year-end to pre-pandemic levels of below 300 million square feet. With supply and demand nearing equilibrium in 2025, the vacancy rate is expected to peak at around 7% before starting to fall again.
Thanks to those market conditions, renters of warehouse space should begin to see some relief from the steep rent hikes they’re seen in recent years. According to Colliers, rent growth decelerated in 2024 after nine consecutive quarters of year-over-year increases surpassing 10%. Average warehouse and distribution rents rose by 5% to $10.12/SF triple net, and rents in some markets actually declined following a period of unprecedented growth when increases often exceeded 25% year-over-year. As the market adjusts, rents are projected to stabilize in 2025, rising between 2% and 5%, in line with historical averages.
In 2024, there were 125 new occupancies of 500,000 square feet or more, led by third-party logistics (3PL) providers, followed by manufacturing companies. Demand peaked in the fourth quarter at 53 million square feet, while the first quarter had the lowest activity at 28 million square feet — the lowest quarterly tally since 2012.
In its economic outlook for the future, Colliers said the U.S. economy remains strong by most measures; with low unemployment, consumer spending surpassing expectations, positive GDP growth, and signs of improvement in manufacturing. However businesses still face challenges including persistent inflation, the lowest hiring rate since 2010, and uncertainties surrounding tariffs, migration, and policies introduced by the new Trump Administration.