EP 590: Warehouse Innovations with Ryder
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The New Warehouse podcast hosted by Kevin Lawton is your source for insights and ideas from the distribution, transportation, and logistics industry. A new episode every Monday morning brings you the latest from industry experts and thought leaders. And now, here's Kevin.

Hey, it's Kevin with the New Warehouse Podcast, and I am here at Manifest Day 2, and I'm going to be joined by Gary Allen. He's a VP of Supply Chain Excellence over at Ryder, and we're going to talk about what's going on with...

technology in the supply chain, specifically in the warehouse. And we're going to talk a little bit about the evolution of technology that Gary's seen over his career as well. But first off, Gary, how's everything going? Everything's going great. Glad to be here. Appreciate it, Kevin. Definitely happy to talk to you again. We talked last Manifest, right? Seems like every year I get to see you, so I appreciate it. That's a great conference. I mean, every year it gets a little bit better.

You know what I like about the conference is it's got a blend of shippers, customers, providers. It's really not too heavily weighted one way or the other. So good to see you again, man. Yeah, absolutely. So why don't we kick it off here? And I guess for people that are not familiar, tell us a little bit about Rider.

Yeah, so, you know, rider, when you think of rider, most people think about trucks. Yes. And we have a lot of trucks. We love our trucks. Yeah, I see them on the road all the time. We see them on the road. Oftentimes, people think about, you know, the rental trucks, and that's one of our divisions. But rider is about $13 billion now, and we've been growing significantly over the last few years. But we have two main divisions. One is our fleet management division, which...

gets into full service lease, rental, maintenance. And we have 800 shops across the country where we maintain and lease out vehicles. But our supply chain division is about 60% of our revenue. Oh, wow. And within supply chain, we do it all, right? We have...

not only warehousing, but it's bivertical. So we have consumer products, auto industrial, retail, healthcare. We acquired an e-commerce company. We acquired a Copac co-manufacturer. We have Last Mile. And then we have our transportation business. So we actually get into brokerage, transportation management, as well as dedicated transportation. But we're big. In the US, we only operate in North America. We're not a global company. Okay.

We are the second largest warehouse provider in the U.S. or North America. Not too many people know that. We're right behind DHL. We have about, it's well over 100 million square feet of warehouses. Wow. We have 300 warehouses. We have 15,000 drivers on the road. So we're big. Yeah. And we're continually looking to kind of grow and kind of expand our footprint from a capabilities perspective. But we're more than just trucks. We like our warehouses too. Yeah.

I see that definitely with 100 million square feet. Got a lot to worry about there or a lot to take care of, definitely from your perspective. So tell us a little bit about what we're seeing here, where I manifest, right, which is the future of logistics and supply chain, right, is what they say. So tell us a little bit about, I think it's an interesting conversation we're having a little bit,

before we had record here, and then I was like, well, let's hit record, right? Yeah, save it for the podcast. So you've been in the industry for about 35 years or so, right? Way, way, way too long, Kevin. You probably weren't even born, you know, when I started, but I think I started in 19...

89. You know, I've worked at FedEx, DHL, did a little bit of consulting for about 10 years. And then I've been at Rider for about 11. And, you know, at Rider, I kind of run really our support functions. It's engineering, solution design, continuous improvement. And about seven, eight years ago, we started an automation team, really focused on the warehouse. And we'll kind of get into that a little bit. But then also data analytics. Yeah.

And that's been a big change over the years. So it's not just technology. It's how we use data to drive continuous improvement and deliver value to our customers each day and throughout the years. But technology has evolved. I mean, when I started, it was pretty manual. There was no cloud base. The internet wasn't even around. And I think there's a few key changes. One was around the internet. That just kind of shifted the whole industry around.

and then software kind of exploded in the late 90s into the early 2000s. And what I'd say is it's really focused on how can we leverage data right now. In the last 10 years, it's really accelerated. And I think a few triggers occurred in the industry. One was not only the technology, the cloud-based capabilities,

But, you know, things like asset sharing, you know, Uber was created, Tesla got into electric vehicles. Right. And the investments in supply chain companies really shifted about 10 years ago. And I'd say really last eight years, it's really skyrocketed. There was a ton of investments in, you know, analytics and automation, but a lot of that was geared towards shippers, manufacturers, right? Okay.

You know, manufacturers have really embraced automation for decades, right? I mean, they had not only robotics, you had, you know, autonomous guided vehicles, but those vehicles were like in line and you had like a hard line, if you remember, right? So, you know, and I think where it's going now is, you know, if you look at the technologies in the warehouse, I'd say a lot of the robotics is almost a commodity, right?

Right. Like if you think of the way we categorize our warehouse automation is four different categories. One is around goods to person. It can be an ASRS. It can be an AMR that delivers product to a person.

The other one is cobots, right? So it's robots that follow you as you do your picking. Another one is around autonomous forks. Right. Right. And, you know, the AGVs were around a long time. But now with autonomous forks that started with reducing travel time, now you can do put away and picking. You can do replan with it. Right. And so now it's kind of shifting to loading and unloading.

And then the last segment that we define warehouse automation is robotic picking. Right. And what I'd say is computer vision. And, you know, here, you know, at Manifest, everybody's talking about AI. Yeah. And it's a hot topic. But, you know, AI has been around a long time.

And we've been doing a ton of, you know, AI, whether it's machine learning, you know, natural language processing. What's changed on AI is more the gen AI, right? So you don't need as structured data. But I think the physical side of the robotics is a bit of a commodity now.

And I think the secret sauce is around the data analytics, the software, the computer vision, and it's just getting better, you know, every year. Right. And so that's been a huge shift. But, yeah, when I started, we had nothing. Yeah. Right? We didn't even have PowerPoint, man. It was like, I think we had Harvard Graphics was the first one, and then PowerPoint came around, right? Okay. And it was like, oh, my gosh, you know? Yeah. And we didn't even have laptops back then, right? So it's...

So the computing power, the technology, the capabilities has really exploded. So it's fun to be in supply chain now. I mean, it was always fun. But now, like, you know, when I started my career, nobody even knew what supply chain was. Yeah. Right. Nobody cared about it. Yeah. Yeah.

And warehouses, you know, it's like warehouses and trucks. So, but it's a fun time to be in the industry, Kevin. Yeah. Yeah, absolutely. And I think that evolution is, it's been so incredible to see. I mean, you've been in it longer than me, right? But even, you know, starting this podcast in 2019 and, you know, being able to see the continuous evolution of this technology. And I always say that I think for me, one of the most exciting things is that, you know,

we see all these cutting edge technologies come out, but where do they find practical applications? It's like in our industry, right? So it's cool to be a part of that and see that evolution. But I want to touch on something you said there where you created this division, right, that you head up and part of it is automation, right? But part of it is data as well, right? Talk to us about that relationship and kind of the importance of data

as it comes into the evolving supply chain involving warehouse fulfillment centers yeah i mean data is key yeah right and i think with all the new technologies it gets even more complicated around how do you harness that data right and yeah so like it give you an example we have a warehouse up in canada that is almost lights out we only have people on the inbound unload

and then the outbound. So it's in feed and out. That's it. When you get in the middle of the warehouse, it's all technology, right? We have an ASRS that feeds boxes and cartons to an AMR. The AMR brings it to a robotic picking cell, puts it back on AMR, goes to the outfeed. I bring that example up because it's extremely complicated, right? We have like four different technologies. Within Rider, we made a strategic decision that we need to own the data.

And it's really become more of a data-driven decision-making. It used to be led with, oh, I can do a Kaizen, walk a floor, look for problems. But now it's like you look into the data first. And I bring that example up because it's very complex. And you think about us as a 3PO, we service every customer across all these industries. Sometimes it's our WMS. Oftentimes it's our customers. We have...

probably well over 30 instances of a WMS across our network. Oh, wow. Okay. And now with the advancements in automation, how you leverage that data is actually critical and becoming more complicated. Yeah. So we made a decision that we need to invest in that intelligence, right? And there's a lot of grunt work around how do you structure the data, right?

It's not only connecting the dots, getting the data out of all these technologies. It's how do you structure it in a way that you can leverage it consistently. So when you build a solution, it's not a one-off for one individual customer. Because part of it is you need to standardize it to be able to do anything with it, right? Like even digital twins is, that was a hot topic a few years ago around digital twin. Yeah.

Which, it makes sense, right? That's like simulation, right? Scenario management, right? You're trying to plan for downtime or any disruption. But if your data is not structured in a consistent way, what you call things, right? You call it an item master, a SKU, a profile. You can't leverage that same digital twin across the network. Yeah. And so there's a ton of work that has to go into...

structuring the data, being able to extract it out in real time, normalizing that data, and then doing something with it. And then once you get there, you can get into advanced analytics and everybody talks about AI and it makes sense. But you have to really structure it to be able to leverage it.

And then that allows us to get into more proactive, predictive type solutions. Yeah. Which to us as a 3PL is really our secret sauce, right? Okay. It's trying to predict problems before the problems occur. And almost all of our customers, and we expose the analytics to our customer, but as a customer, they don't want to see 3,000 dashboards. Right.

They want to see what's important to them, and they want us to serve it up in advance of problems. It's like all of us are very busy. So we've taken that analytics to, if you think about embedding that data into a solution, thinking about you as a customer, as an example, to be able to push information to you or send you a notification of,

You know, the ASRS is down or order missed the cut time. We're not going to deliver that order to your customer, your end consumer. That's what our customers care about, right? Got it. So what I'd say about analytics is it's become very complicated with all the technologies.

But it's become a data-driven world. Yeah. Right? And we don't want to have to rely on one provider over the other. And even at Manifest, everybody's selling AI capabilities and analytics as a service. And I get it, but it gets really confusing, right? It's like, how do you apply, you know, where do you apply AI? Right? What problem are you trying to solve for? Is it like a forecasting problem? Yeah. It is a labor planning problem.

And where we started was really focused on labor. Okay. Right? Because as a 3PL, you know, we need to hire, we need to train, we need to bring in talent better than our customers can. And so we built out a lot of analytics around labor planning, forecasting, productivity. Okay.

And what I'd say is now changing is now we're bringing in automation. It's displacing some of the workforce. But the bottom line in warehousing, it's hard to hire people. Yeah. Right? And it's shifting really kind of that standard work environment.

where automation applies and then shifting that labor to more value added activity, right? Like in automotive, we do pre-assembly. Yeah. Right? And we can't use all robotics for some of the assembly. And then we deliver pre-built kits to an assembly line, as an example. That is really hard to automate, right? We can automate the movement of goods to that person.

But right now, the robots are not as sophisticated as being able to do every function. Now, they're getting there. Yeah. Right? The other hot topic is really around humanoids. Right. Yeah.

And we are investing in humanoids. Right now, we partnered with one company. You're going to see some announcements at the back half of this year. We can't get breaking news here? It's breaking news. I can't tell you who we're partnering with. But, you know, everybody is really enamored with humanoids. And it makes sense. It's cool technology. It's fascinating, yeah. But it's not ready yet. Yeah.

I mean, it's kind of like autonomous vehicles, right? Everybody's saying, okay, you know, they're going to be out in five or 10 years. Well, no, it's like, I'll be long retired before you see a ton of humanoids in a warehouse, but that's kind of where it's heading, right? The, the amount of options, the technology advancements are accelerating. The cost of labor is going up, right? I mean, even like 10 years ago, it was like, you know, 10 to $15 an hour in a warehouse. Now it's like 25. Yeah.

I see like a reach driver sometimes like $30 an hour. Yeah. I know. It's crazy. And it's, and you know, warehouse turnover, you know, our turnover is really good. I think our turnover is probably around 60% in the warehouse right now. But for a while it was like a hundred percent turnover. Oh yeah.

Our driver turnover is really good. It's about 30%, but it's consistency. Like our drivers want consistency of a shift. They want to be home at night with their family. And what we found on turnover, both in the transportation and warehousing, it's around consistency, flexibility, right? And we also on the technology side, we launched a new product called Rider Shift.

Okay. Which gets into flexible scheduling. Oh, okay. You can swap shifts. Yeah. It allows us to communicate to our employee. It's an app-based tool. Yeah. And then it gets into, you know, automating call-offs, right? So like in a warehouse, you have to pick up a phone, you call a supervisor, manager, say, I'm not coming in. This is all app-based. Okay. And then we can do, you know, voluntary time off, mandatory time off. It's all through the app around how we communicate with our employees. Okay.

And what we found is they really like the communication and the flexibility aspect of it. Yeah. Right? We don't allow employees in the warehouse to use their phone on the floor. It's all tablet or handheld scanners. But when they go home, we can communicate with them, right? Yeah. We don't have to pick up a phone and call them. So what we found is, you know, employees want flexibility. Yeah.

They want that engagement. They want that communication. And a lot of it's technology-driven now, right? I mean, everybody's got a cell phone. Everybody's used to it. So, yeah, it's a pretty cool time. Yeah, interesting. And I love that definitely that you've kind of invested in that, creating that flexibility for the employees because I think that makes a big difference. Because I think, and I'm sure you probably saw this, right? Like, I mean, coming...

Coming out of the pandemic, right, you know, warehouse workers, they were in the warehouse during the pandemic. I mean, I was in the warehouse managing during the pandemic. And, you know, I think they saw that, like,

oh, this whole other part of the world has all this flexibility. Like, why don't I have flexibility? So, I mean, I think that's a great thing that you invested in and created that. And I'm curious there to talk to us a little bit about, because you said investing in that technology to make it easier for the employee to be able to communicate and things like that. How do you approach that when you're looking at like,

the newer generation coming into the workforce, how do you try to embrace technology to get them maybe attracted to it or get them, you know, more, I guess, assimilated to the warehouse work in a way that they're used to being raised in a digital world. We'll be back after a quick break.

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Yeah, yeah, no, it's changed. And, you know, I think, you know, when some of the technologies came out, a lot of people were like worried about, you know, kind of technology overload. And what I'd say is the workforce is growing.

is technology driven. Yeah. Right. And, and like how we do our onboarding, right. It's all app based web based training. And what we found in the warehouse or even on the transportation side is they embrace technology. Yeah. Right. And, you know, a lot of people, whether legal compliance or kind of worried about, Hey, you know, having an employee sign up for an app. Right. And we don't make it mandatory on like rider shift. It's, it's voluntary, but,

Everybody loves it. Yeah. Right? And part of embracing the technology is really a recruiting strategy. Yeah. I think people would rather use technology than, like, in a warehouse, like, lumping. Oh, yeah. Right? I mean, who wants to lump and throw, like, tires into a trailer, right? It's like the worst job. That is tough, tough work. Yeah, yeah. Right? So, you know, I think what's happening is with the technology and automation, the training...

and how we adjust our workforce is shifting, right? So, like, you can have, you know, a person doing value-added services. You can have a person following a robot. Like, when the AMRs first came out, like, the employees loved it. Yeah. Right? Like, you know, I can reduce my travel time. I don't have to walk all over the warehouse, right? And so...

You know, they've really embraced it. I think that's going to continue. A lot of it is through training, communication, and how we onboard employees, right? We use it as a recruiting tool. Yeah. I mean, we don't use it as like, hey, technology is going to displace you. Yeah. Right? If you look at our warehouses, we have over 300 of them, right? About 30% to 40% of our warehouses have some level of automation. Okay. We don't have too many lights-out warehouses out there. Right.

a lot of the warehouses don't have much automation because the profile doesn't fit. It might be a one-shift operation, right? And you might have 1,000 SKUs, and your volumes are low to the point where you can't justify an autonomous robot or ASRS or an autonomous forklift. A lot of the warehouses are 50,000 square feet. So the reality is automation...

at least in the short term, is not going to displace every warehouse worker. It's just changing the role to more value-added services, which we find is more attractive. Like our employees want to do more, not only technology-driven activities, but they want to do more kind of complicated functions. A little more thinking. A little more thinking. Yeah, yeah. So it's not – I think it's a great thing.

for the industry and, you know, our employees are embracing it. So, yeah. Yeah. Yeah. That's great to hear. And I think that that technology definitely, you know, makes it more attractive for people to want to come work, work in the warehouse and things like that. I mean, I've heard stories where, you know, warehouse workers, they get to go home and tell their kids they work with robots now and their kids think they're, they're cool all of a sudden. Right. Yeah. But tell us, this is something that I've asked a couple of people and I think this is an interesting kind of question is,

you know, if you look at, like you just talked about, you know, moving these workers into a different type of role, right. More, you know, more thinking, more technology as we look maybe, you know, five, 10, 15 years from now, what, what do you think the, the entry level role looks like in a warehouse? Yeah, it's a, it's a great question. Um,

Yeah, like 10 years out, you're going to see a continued increase in the use of robotics. Yeah. You're going to see humanoids being a little bit further advanced. I mean, I'd say it's more towards the 10 years. But if you think about an entry-level job, it's not going to be doing your basic picking anymore, right? Right. It's going to be doing more advanced picking. It's going to be doing more assembly kitting activities. Mm-hmm.

If you think about the inbound receiving, you can automate a lot of that. I mean, today we don't have a lot of automation on the inbound receiving just because if you have cartons coming in, it's hard to automate some of that. But really where we see things going is more value added. Yeah. Right? Because if you look at how we use autonomous fork trucks right now, you know, it started with just put away or it started with movement.

Yeah, just A to B. Yeah. Yeah, it started like, hey, I'm going to reduce travel from point A to point B. But then it went into put away. Right. Went into picking. It went into replan. And now it's the unloading. Loading is more complicated. It's the assembly and value add. So, you know, I would say kind of the...

more mundane standard tasks will get automated. Right. And people will be either managing the robots or working side by side with them and doing more complicated activities. Interesting. Interesting. Yeah. Yeah. I'm curious what, uh, that entry level role is going to look like. Humanoids everywhere. Kevin won't need anybody to work. Right. Robot specialist or humanoid companion. Maybe. Yeah. I think they call it like a Wrangler, right? Oh, robot Wrangler, robot Wrangler. Um,

But it's working side by side with automation and robotics. Definitely. Interesting. Interesting perspective. Because we're looking at using humanoids for value-added assembly kitting, but we're also looking at, you think of an ASRS. Right. Cartons and parts will come down into ASRS. Right.

We're looking at, can we put a humanoid in to then take the part, take the case out of the ASRS and pack it? Yeah. That's kind of one of the first use cases that we're looking at. Okay. But, yeah, I don't see it displacing all the employees because, like I said, it really comes down to your profile of a warehouse and what goods you manage. Yeah. You know, not everybody's a Walmart employee.

where Walmart's got consistency and massive volumes. And you can automate a lot of those functions because it's a standard footprint. It's got three shifts. You've got millions of SKUs, huge volumes. But a lot of these industries are small, and they're not going to go away. So it should be interesting. Definitely, definitely very interesting, and definitely good perspectives from you here. And I guess before we wrap up, I want to ask you,

If we look at automation technology in the warehouse fulfillment space, what is the one? I say you can only pick one. Okay. All right. What is the one technology that's really the most exciting to you right now? Well, I'll pick one. I'll make it broad. It's really around data analytics. Okay. Right. I mean, I know that's broad, right? Because that includes AI. Yeah.

But it's the advancement in analytics and getting to the point where we can predict things. Right. And as I mentioned earlier, it's around serving up what information you need to see as a customer. Okay. I mean, I think the advent of analytics and getting into more AI is huge. I think the continued advancements in computer vision combined with AI and analytics, I think, is a game changer. Yeah. Yeah.

All right. Interesting. Love it. All right. Well, it's always a pleasure to catch up with you at Manifest. You're making this an annual tradition. So we'll talk to you in a year, I guess. You got it, man. Thanks, Kevin. Appreciate it. And if people want to learn more about Rider, what's the best way to do that? Rider.com. Rider.com. You got it. All right. So that's Gary Allen with Rider Supply Chain. And he gave us the latest on all the technology happening in the warehouse. So thank you very much, Gary.

You've been listening to the New Warehouse Podcast with Kevin Lawton. Subscribe and check us out online at thenewwarehouse.com. Enjoyed this episode? Make sure you are subscribed to the podcast and for more content from The New Warehouse, find us on LinkedIn and YouTube. Links to subscribe can be found in the show notes and for everything The New Warehouse, head to thenewwarehouse.com.