Ok, so I’m going to take full advantage of this weekly logistics post to highlight a topic that is dear to my heart. In fact, this story combines two of my great loves – logistics and beer. It has also put the federal aviation administration (FAA) on my least favorite list.
A few weeks ago, we discussed the 60 Minutes Story about Amazon’s Drone development program. It turns out that a microbrewery in Minnesota was especially motivated by the story, and decided to promote drone use for beer delivery to ice fishermen. Now that’s service! The company developed a YouTube video showing a six-propeller unmanned aircraft delivering a pack of beer from a shop to fishermen out on lake ice. The video went viral, and the FAA became aware of the stunt and shut down the operation. Those fun busters! I’m guessing the motive was marketing and the timing was related to the upcoming SuperBowl. But still, very creative. I have attached a copy of the commercial video below.
Now onto more pragmatic logistics news.
- Obama Seeks Highway Bill by Summer
- Area Toyota production disrupted by parts supply problems
- Con-way Truckload Recognizes Professional Driver for Reaching 4 Million Miles
- Nafta Surface Trade Grows 2.8% in November
- UPS’ 4Q Profit Rises
- Amazon.com Inc mulls raising fees as boundless spending hits profit
President Obama, during the State of the Union address, highlighted transportation infrastructure as a desired area for government investment. The current $100 billion MAP-21 transportation spending bill will expire in the fall, and the President’s remarks were a call to action for additional infrastructure investment spending. Specifically, he stated:
“We can take the money we save from this transition to tax reform to create jobs rebuilding our roads, upgrading our ports, unclogging our commutes – because in today’s global economy, first-class jobs gravitate to first-class infrastructure. We’ll need Congress to protect more than 3 million jobs by finishing transportation and waterways bills this summer.”
American Trucking Association (ATA) president Bill Graves commented on the President’s speech, stating appreciation for mentioning the need for infrastructure spending, but disappointment in the lack of specificity. I believe that there is potential for the Congress to pass another transportation funding bill, as both sides of the isle believe investment in needed infrastructure to be an efficient allocation of capital able to bringing about economic benefits to the nation. In fact, Ben Bernanke also recently specified useful infrastructure projects as economically beneficial investment opportunities.
From the supply chain disruption file, a couple Canadian Toyota plants in Ontario are in the midst of a production setback due to a logistics disruption. The recent inclement weather in the US is partially to blame, but it is primarily an issue with the logistics system. Here’s an excerpt that includes a quote from the GM of Toyota Motor Manufacturing Canada:
There are also “ongoing challenges in the sequencing of our (parts) pickups,” he said. “It’s related to our logistics system, so it is not specific parts or even from a specific location. It’s a challenge in our supply chain system.”
ARC recently completed its worldwide supply chain planning market study. This research indicated that automotive manufacturers, and machinery manufacturers have increased their demand for parts inventory planning solutions. The uptick in demand appears to be primarily due to aftermarket parts planning, but this incident at Toyota highlights the importance and financial impact of efficient materials planning to the manufacturing process as well.
Onto the Con-way Truckload marathon man. Con-way recognized one of its drivers for hitting the 4 million miles mark. Think about that. He has been driving for Con-way since 1984. That averages out to over 133,000 miles per year, or roughly four times around the circumference of the earth. Assuming 250 work days a year, that averages out to over 500 miles per day. I hope for his health he hasn’t been eating that fatty truck stop food every day.
The US Department of Transportation (DOT) announced that NAFTA surface trade increased 2.8 percent in November. More specifically, freight carried by trucks, trains and pipelines increased, while marine and air trade declined. Trucks moved the highest amount of trade, at 60 percent of the total. Meanwhile, freight moved by rail increased the most, an 8 percent increase year over year.
There were a couple notable corporate financial releases this week with interesting logistics details. First, UPS announced that its quarterly profit increased, but was negatively impacted by unexpected volume and inclement weather. Last month my colleague Steve Banker noted the difficulties UPS experienced, or more accurately the difficulties UPS customers experienced, over the holidays. The UPS press release specifically mentioned the difficulties experienced during the holiday season. Here is an excerpt:
“As the retail market shifts to a direct-to-consumer model, more and more companies are leveraging UPS solutions,” UPS chairman and CEO Scott Davis said in a statement. “As a result, we experienced an unprecedented increase in volume, exceeding even our most optimistic plans.”
That very well may be true. But from my experience, UPS also had some difficulties with the last mile of their deliveries- problems that are more likely to be a result of seasonal hiring processes than inclement weather.
Finally, I included a link to a story about Amazon’s financial announcement. It is relevant due to the increased expenses the company is experiencing resulting from investment in warehouses, drone research, and Amazon Prime delivery costs.
With that, have a happy weekend!