This Week in Logistics News (January 1 – January 8)

Happy New Year!! It’s hard to believe the holidays are over and we’re back into the swing of things. One of the last big news items I wrote about last year was the recently published federal requirements for truck operators to use electronic logging devices. The devices, which keep records of duty status, will take effect Dec. 10, 2017. That gives operators of post-1999 model year trucks not running a 395.15-compliant AOBRD-type e-log as of last month just under two years to have an ELD in place. Or else, the operator will suffer the consequences. But the big question here is: what are the consequences? The U.S. DOT’s Federal Motor Carrier Safety Administration is still in the process of finalizing enforcement measures for the ELD mandate. So that means that there really are no set consequences yet. Will the operators receive a fine? Will they receive a standard out-of-service order? Or will they receive something far worse? While we don’t know what the exact penalties will be, we will certainly keep an eye on this as details begin to take shape.

And now, on the news.

• FedEx has a better holiday season
• Merchants inundated with returns this week
• The next big thing in US trucking: Female drivers
• Amazon fulfillment service managed delivery of 1B items in 2015
• Vietnam grows cross-border trade with 3 partners
• UCR enforcement for 2016 delayed until Feb. 1

Odds are, you saw someone (or many people) tweeting to FedEx thanking them for late deliveries over the holiday season. Despite all the criticism, according to delivery tracking firm ShipMatrix, FedEx actually had a better holiday season in terms of on-time performance than it has either of the last two years. While a good deal of this can be attributed to better planning, better communication, increased capacity, and better luck with weather, let’s not forget that each of the last two years were not exactly great for FedEx. This makes improvements easier. The numbers for this year: FedEx met one-day, two-day, and three-day guarantees 97.8% of the time this holiday season, compared to 97.3% in the 2014 season and 95.4% in 2013.

So while we say congrats to FedEx for their holiday performance, UPS is calling Wednesday “National Returns Day.” UPS expects to deliver over 5 million returns by the end of this week, 500,000 more than last year. While this is good business for shippers, it poses lots of problems for retailers. With extended return policies, due to gifts bought in advance of the holidays, revenues that have been on the books for sometimes over a month, are set to come off. Additionally, retailers must devise the appropriate plans for accepting, distributing, and re-stocking the returned items. While a robust reverse logistics application can speed up the process and have the merchandise ready to be sold again, a lot of this merchandise will end up in mark-down sales, making it even less profitable.

In what is generally a male-dominated profession, there has been a recent, albeit small, shift in the trucking environment. Confronting a severe shortage of drivers, U.S. companies have begun turning to a little-tapped labor pool: women. The U.S. trucking industry faces an immediate shortfall of 48,000 drivers, according to the American Trucking Associations, and that number is on track to quadruple by 2025. To compensate for the shortage, fleet operators have been boosting pay and dangling 401(k) and tuition reimbursement programs — but also aggressively putting programs in place that directly target the fairer sex. A major draw for women into the trucking world is the fact that they will make the same money as their peers, as they get paid by the mile or the load of the percentage. While the percentage of female drivers is still low, new recruiting efforts have the segment poised for growth.

Amazon announced it handled the warehousing, packing, and shipping of 1 billion items last year for merchants that are part of its fulfillment program. Amazon is generally known for its online retail operations (and its development of drone technology), but the fulfillment services division is growing fast. Helping third party businesses sell in its online store generates extra fees and adds to the number of products available to shoppers beyond just what Amazon sells directly. The number of sellers using the service grew more than 50% in 2015 after a 65% rise a year earlier, according to Amazon, which did not disclose the number of merchants involved.

Vietnam has grown its cross-border trade significantly in 2015. Trade revenue across the China-Vietnam border in 2015 accounted for 85% of Vietnam’s total border trade revenue, according to Vietnamese Ministry of Industry and Trade. In total, during the year, Vietnam posted some $27.56 billion in border trade with China, Laos and Cambodia, an increase of 27% compared to 2014, the ministry said on its website. Being a trade partner with China is a huge part of Vietnam’s economy, and with more Chinese imports flooding the market, this will continue to be true. The total border trade revenue between Vietnam and China, Cambodia and Laos is expected to reach $30 billion in 2016.

And finally, enforcement of the Unified Carrier Registration Agreement has been delayed until Feb. 1, according to an inspection bulletin released this week by the Commercial Vehicle Safety Alliance. Enforcement was originally set to begin Jan. 1. The delay gives motor carriers, brokers, freight forwarders and leasing companies an extra month to file their registration fees for the 2016 registration year. CVSA said the Federal Motor Carrier Safety Administration added a violation code into the Aspen software to indicate that a carrier isn’t in compliance with the UCR. Two groups are not subject to the UCR – purely interstate carriers (unless their state has adopted the UCR program for interstate) and private motor carriers that transport passengers that is not available to the public at large.

That’s all for this week. Enjoy the weekend, and the song of the week U2’s New Year’s Day.