This Week in Logistics News (December 12 – 18)

Once again, it’s hard to believe another year is coming to an end. I’d like to thank all of our readers, sponsors, guest bloggers, and my fellow authors for making it a great year. There have been an awful lot of newsworthy items to keep you abreast of. We wrote about mergers and acquisitions, new technologies and innovations, customer success stories, the internet of things, last mile deliveries, 3PL’s,  omni-channel logistics, warehouse management, transportation management, and much more. These articles have been fun to read and write, and I feel that this has been another year of learning. And for that, I am thankful.

With the holiday season upon us, there are vacations to be had, family and friends to be enjoyed, and hopefully, some well-deserved rest. For these reasons, this will be the final Logistics Viewpoints column of the year from the core authors (Steve Banker, Clint Reiser, and myself). We are going to spend the next two weeks re-energizing ourselves to make sure we continue to bring you the most insightful supply chain and logistics news and stories. Happy holidays from all of us here at Logistics Viewpoints.

And now, on to the news.

• Trucking group challenges e-log mandate
• UPS struggles to keep up with surge in web orders
• FedEx boosts profit, sees record e-commerce deliveries
• Holiday online orders are taking longer
• Why rental trucks might be harder to find in December
• It’s free shipping day
• Amazon plans to expand Prime Now
• Fuel prices continue to fall nationwide

The Owner-Operator Independent Drivers Association (OOIDA), which represents tens of thousands of truckers, is mounting a legal challenge to a new federal requirement for drivers to electronically log their hours behind the wheel. The majority of the trucking industry is in favor of e-logs, as they can boost productivity and cut down on paperwork and logging errors that can lead to fines. However, the OOIDA fears drivers will be subject to more harassment by carriers who will pressure them to drive in poor conditions or while tired, because the logs do not take traffic, weather, or natural sleep patterns into account.

UPS has been slammed this holiday season and is straining to meet the demand of e-commerce orders. The increased volume has resulted in major disruptions, as the company does not have the adequate staff and equipment to handle the requests. As a result, on-time delivery rates for UPS have fallen to 91%, compared to 97% the same week last year. This is a direct result of the larger than expected online shopping volume so far this holiday season. While UPS did make advanced plans by gaging shipping estimates from retailers, the numbers have exceeded most retailer’s expectations.

FedEx says it saw a record number of holiday shipments this holiday season. FedEx executives said the company has been able to divert volume in the Northeast and that its technology in sorting hubs gives it a competitive advantage. The company is running its network around the clock during the holidays and capping volume when necessary, which could mean late packages for those who wait. As a result, shares of the delivery company rose 5% to $156.25 in after-hours trading on the New York Stock Exchange, after the company beat Wall Street’s expectations.

On a related note, holiday online orders are taking longer to be delivered this year. The main driver behind this trend is the fact that more retailers are offering free shipping. To keep costs down, these retailers are selecting slower and cheaper shipping methods, resulting in longer wait times for customers. As a result, there has been an up-tick in buy-online, pick-up in-store orders, which is a good option if you decide to brave the mall. The moral of the story is don’t wait until the last minute to order your gifts.

On a still related note, finding a rental truck is going to be very hard this month. Due to the increase in online shopping, FedEx, UPS, and the Postal Service are forced to rely heavily on rentals this time of year. The Postal Service has historically delivered first class mail, but in recent years has been the last mile extension for both UPS and FedEx. Their trucks are not designed to handle large bulky packages, so the Postal Service has been renting trucks for the last few years to handle the influx of holiday deliveries. UPS and FedEx are seeing volumes unlike any other year, which requires both companies to look for alternative means to find adequate capacity. So it’s probably not new neighbors moving in if you see a moving van this month; they are probably just getting a package.

Today is the 8^th annual Free Shipping Day. Free Shipping Day offers last-minute shoppers the kind of deal that may be too good to pass up: free shipping with guaranteed delivery by Christmas Eve at participating online merchants. This year, more than 900 retailers have signed up to participate in the e-commerce event. The full retailer list can be found at Freeshippingday.com. Some merchants are offering additional discounts, with coupon codes appearing on the website beginning Friday at 12:01 a.m. EST. Although with the last few articles we’ve covered, I’d be a bit wary about this one this year.

Amazon plans to expand Prime Now. A year ago, Amazon introduced Prime Now, a service that offers a limited catalog of goods available for one-hour or two-hour delivery. The service launched first in Manhattan and has launched in parts of more than 20 U.S. cities since. More cities are expected to get Prime Now next year. The Prime Now catalog is limited with 15,000 to 40,000 items to choose from. So while it can offer a one to two hour delivery, the products available do not compare to the millions for two-day shipping through regular Amazon Prime.

And finally, fuel prices continue to fall nationwide. Last week’s price was 4.1 cents lower than a week ago, and it was $1.081 lower than the same week in 2014. Prices dropped in all regions across the country with the most significant decrease coming in New England, where prices dropped 6.2 cents, followed by California and the Midwest, where prices dropped 5.4 cents. The most expensive diesel is in California at $2.65 per gallon, followed by the Central Atlantic region at $2.501 per gallon. The nation’s cheapest diesel can be found in the Gulf Coast region at $2.212 per gallon, followed by the Lower Atlantic region at $2.258 per gallon.

That’s all for this week and for the year. We hope everyone has a happy and prosperous new year and we look forward to bringing you more logistics news in January. Enjoy the weekend and the song of the week Kool & the Gang’s Celebration.