This Week in Logistics News (May 10 – 16)

Statistics, Disruptions, and Trade, Oh My!

Ok, so I made my first SkyMall purchase last week. After viewing that magazine on countless flights over many years, I finally broke down and ordered something. This leads me to think that in-flight wireless is likely boosting Skymall’s sales. I simply logged onto the Skymall website during the flight,  ordered the item of interest, and received it at home a couple days later. That’s it – I’m hooked!!

The DOT Freight Index rose 3 percent in March from the same period last year. It also rose from February of this year. The March increase in freight reflected growth in all modes except pipeline -with trucking and rail intermodal growing the most rapidly. The sequential rebound was partially attributed to the especially severe weather experienced this winter. The DOT press release stated the following:

The growth in trucking represented continued recovery from unusually severe winter weather that hampered freight shipments in earlier months. Severe weather can affect the demand for goods to ship as well as the ability to move goods.

Truck orders are booming! This article from Bloomberg provides some great insight into the current trucking environment. According to the article, Old Dominion and Knight Transportation are ordering hundreds of vehicles to keep up with demand. North American truckers are estimated to have placed net orders for 90,289 large trucks in the three months ended in March, representing a 35 percent increase over the same period last year. Contributing factors include strong volumes, high utilization, rising cargo rates, and high average age of tractors currently being utilized. This trend is not only benefiting manufacturers such as Paccar, but also powertrain suppliers such as Cummins and Eaton.

I guess Walmart isn’t contributing much to the recent increase in trucking demand. I included this article about Walmart for two reasons 1. It is the worlds largest retailer, and 2. The battle between e-commerce and traditional retail is at the epicenter of Walmart’s stagnation. Here are a couple of select quotes from the Wall Street Journal article:

The world’s largest retailer has suffered weaker store traffic in recent periods–as dollar stores and online marketplaces have cut into its business…Traffic at U.S. stores dropped 1.4% in the latest period, the sixth consecutive decline….To combat the pressure on its sales figures at its big-box super stores, Mr. McMillon, who took over in February, has said the company would focus more on opening smaller stores and beefing up its online presence.

Chris Cunnane often discusses on this blog the importance of the customer experience in today’s omni-channel environment. It appears that Walmart agrees, as the article also quoted Walmart’s McMillon saying, “Our investments are focused on improving customer experience and fulfillment capacity. We’re working to deliver a relevant, personalized and seamless customer experience across all channels to further grow sales.”

From the supply chain disruption file, Foxconn, best known for its massive electronic device assembly operations and its relationship with Apple, is back in the news. The Wall Street Journal reports that the company is going to suspend its operations in Vietnam for three days due to expanding protests in the area. The move is just cautionary at this point. Taiwan has been hit hardest by the regional protests, as at least 200 factories (of unnamed companies) have been looted or burned down.

According to Reuters, European Parliament elections are being held next week, and opinion polls are showing that almost one third of the chamber’s seats will go to anti-EU groups or the right and the left. If this occurs, it could cause disruption to future EU policy making. In particular, constituents of both the right and the left have reservations about free trade. This could complicate the proposed free trade agreement between the EU and the United States.

Lost Letter

Lost Letter

Finally, from the Fun File, US Post Office officials are seeking the relatives of the addressees of a World War II era letter that was mailed nearly 70 years ago. It is unclear if the letter was ever received. I hope it wasn’t anything important. The Muskegon Chronicle had a picture of the envelope that I have attached to this post. It was 6 cents for the postage, 69 years ago, amounting to an annual postal inflation rate of 3.1 percent… for you math geeks (.49/.06)^(1/69)-1.

Have a great weekend!