This Week in Logistics News (September 26 – October 2)

blood moonSunday night brought a lunar eclipse. But this wasn’t any ordinary lunar eclipse. This was a total lunar eclipse of a super moon (a super full moon). A rising super full moon looks much larger than a normal full moon as it is closer to the Earth. Total eclipses of super full moons are not exactly common. In fact, the last one occurred in 1982 and the next will not occur until October 8, 2033. The eclipse left the super moon glowing red in the sky, with most people referring to it as a blood moon. It was a spectacular site to see, and I was fortunate enough to enjoy it while sitting around a fire pit with friends. It was a nice way to close out last weekend – along with watching Tom Brady join the 400 touchdown club.

And now, on to the news.

wcpMany large retailers are still working through inventories built up during the first half of the year. This is due to the swelling inventories that resulted from the clearing of backlogs at West Coast ports due to labor disputes. As a result, economists say that a shipping slowdown should occur before the holidays. Many retailers are seeing inventory levels at least 10% higher than this time last year. This is causing margins and profitability to take a hit. Due to these factors, the latest Global Port Tracker report by the National Retail Federation and Hackett Associates LLC projects only modest growth in container imports at U.S. gateways this fall.

fedex headacheFedEx has a headache. The reason? A huge increase in the number of large, bulky shipments that customers expect delivered to their doors. An increase in online shopping has resulted in an increase in large goods that need to be shipped. These were items that were usually left to the customer to figure out how to get them home. This poses problems for a company that was built to move small packages. But now, large items, including everything from trampolines and mattresses to furniture and appliances, are being shipped through FedEx. FedEx allows companies to ship anywhere in the world at a rate that is more affordable than freight. But consumers are about to pay more for the privilege of getting large online purchases sent home. FedEx’s surcharge for parcels it considers over-sized will rise 17 percent to $67.50 on Jan. 4. UPS’s rate is $57.50, the same as FedEx’s current fee. FedEx also is increasing its base package shipping rates by an average 4.9 percent.

CHIPOTLEMARQUEEChipotle says carnitas is back on the menu at 90 percent of its restaurants, and that the pork’s return to all U.S. restaurants should be complete by the end of November. The restaurant chain had stopped serving pork at nearly one third of its restaurants after one of its suppliers violated its animal welfare standards. The company says it does not allow its pork suppliers to use gestation crates or antibiotics, and that pigs have to be given access to the outdoors. That makes it difficult to secure enough pork and puts major stress on its supply chain. However, this stance on animal welfare standards is also one of the restaurants biggest differentiating factors in a crowded market.

ups_logoUPS is asking people to pick up packages themselves. The company is rolling out a new program in 100 cities that requires people in some neighborhoods to pick up packages at nearby locations if they weren’t home to meet a driver. UPS says the service (Access Point), introduced a year ago in New York and Chicago, will trim costs by ending second and third delivery attempts, and can save consumers a trip to a distant customer center. The program targets neighborhoods with a high rate of failed deliveries. Now, instead of attempting to deliver the item three times, it will be sent to a pick-up location after the first try. This could save the company time and money, especially heading into the busy holiday season.

Hours violations and brake issues lead out-of-service orders issued during Roadcheck 2015. Nearly a quarter of the 44,989 trucks hit with a Level I inspection during the Roadcheck 2015 inspection blitz in June were placed out-of-service, according to numbers reported Sept. 28 by the Commercial Vehicle Safety Alliance. CVSA inspected just shy of 70,000 trucks and buses in total. Brake system violations were the leading cause of vehicles being put out-of-service with 27.5 percent of vehicles inspected were found to be in violation. For drivers, the leading out-of-service violation was hours-of-service violations, which resulted in 46 percent of the out-of-service orders handed to drivers.

OTTO_SmallClearpath Robotics announced its first self-driving warehouse robot: OTTO. This self-driving robot is capable of hauling one metric ton and a half of payload. That’s about 3300 pounds to you and I. Self-driving robots are nothing new to warehouses. In fact, we’ve written about Amazon’s robots, acquired from Kiva Systems, many times before. The difference is that unlike Amazon, these robots do not require navigation devices (RFID, barcodes, etc.). Instead, they have 20-meter lasers front and back (with an option for 50-meter range), and can localize against an existing basemap with an accuracy of about an inch (according to Clearpath). The new robots are in the midst of five pilot programs, the first being a General Electric facility (GE Ventures is a strategic investor in the project). It will be interesting to see how these robots perform in the field, and what impact they may have on the future of autonomous warehouses.

Diesel prices this week carried their summer-long decline into the fall, dropping 1.7 cents on average during the week ending Sept. 28. The U.S.’ average price of a gallon of on-highway diesel now stands at $2.476. Prices dropped in all regions of the country with the most significant decrease coming in the Rocky Mountain region, where prices came down by 3.6 cents. The nation’s most expensive diesel can be found in California at $2.815 per gallon, followed by the Central Atlantic region at $2.647 per gallon. The cheapest diesel can be found in the Gulf Coast region at $2.323 per gallon, followed by the Midwest region at $2.434 per gallon.

spot vanAnd finally, demand for vans on spot market have edged upward. The number of posted loads slipped 0.6% while available capacity declined 2.7% on the spot truckload market during the week ending Sept. 26, according to DAT Solutions, which operates the DAT network of load boards. Van load availability, however, gained 0.6% while the number of posted vans decreased 3.6% compared to the previous week. As a result, the national average van load-to-truck ratio was up 4.4% to 1.7 loads per truck, meaning there were 1.7 available van loads for every truck posted on the DAT network. The national average van rate was unchanged from the previous week at $1.75 per mile.

That’s it for this week. Enjoy the weekend, and the song of the week, Bad Moon Rising by CCR.

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