Oil prices have been sliding, hitting a 12 year low of $27 a barrel just last month. As recently as September 2014, oil traded at over $100 a barrel. As a result, fuel prices are creeping towards levels we haven’t seen in quite a while. For example, I saw gas around the corner from my house at $1.79. I think it’s been a decade since I’ve prices that low. It brought back memories of college when gas was $0.87 a gallon. Those were the days. In other news, according to the Department of Energy’s weekly report, diesel prices fell four cents in the most recent week, to a U.S. average of $2.031 per gallon. That marks the lowest price of diesel in 7 years. And if prices continue to drop, with all signs pointing to yes, diesel prices would actually drop below $2 a gallon for the first time in 11 years. Although in the Gulf Coast region, prices are already a staggering low price of $1.917 per gallon. So with winter ski trips in the mountains still on my radar, I’ll certainly keep a keen eye on falling fuel prices.
And now, on to the news.
- JDcom tests drones for package delivery in rural China
- Coming to a Metro station near you: grocery delivery
- Walmart Canada brings ‘click and collect’ online grocery service to Toronto
- Investigation begins into NY, NJ port walkout
- Amazon Prime memberships grew by over 50 percent in 2015
- Spot rates firm on stronger demand
Chinese e-commerce company JD.com is testing out drone deliveries to remote, rural villages. The company is using bright red drones with the JD.com logo on the side to carry small packages to locations that are traditionally hard to reach by truck. Chinese online retailers like JD.com and Alibaba are investing millions of dollars to reach new shoppers, but the infrastructure is not there to reach them all by truck (at least not easily). The streets into small rural villagers are narrow, making it hard for trucks to maneuver. But, with a population of about 600 million people living in these rural villages, these companies are looking for any way to reach this growing segment they can.
For those people who are tired of grocery shopping after work in the Washington DC area, the Metro and Peapod are here to help. Metro has partnered with the online grocer Peapod in a six-month pilot that allows you to order groceries online and pick them up as you exit the Metro during the evening rush hour. To use the service, Metro riders will place and pay for their order through Peapod’s online service with pickup options of 4 to 7 p.m. Mondays, Wednesdays, and Fridays. Peapod will deliver the orders to pods at each station. An on-site attendant will distribute the groceries to customers. No money will change hands and no food will be stored overnight. While the service is only being offered at three stations currently, Metro says that if the six-month try-out is successful it could expand to other locations in the 91-station system.
Walmart Canada is jumping on the click-and-collect bandwagon as well. The company is launching the service in Toronto after piloting in 11 Ottawa stores last summer. In Toronto, the service will be offered initially at 12 stores. It takes orders up to 21 days in advance and carries a pickup fee of $3. The company began taking online orders for stores on the west side on Wednesday for pickups starting February 9, and on the east side of the city starting February 18 for pickup beginning on Feb. 23.
An investigation is underway by the Waterfront Commission of New York Harbor to determine who orchestrated what it called an illegal walkout on Friday. Cargo operations resumed over the weekend after International Longshoremen’s Association members staged a one-day wildcat strike. The unexpected walkout occurred last Friday at 10 a.m. and disrupted the East Coast’s busiest port, which was still trying to catch up after being idled for four days by Winter Storm Jonas and the Martin Luther King Jr. holiday the previous week. The New York Shipping Association moved quickly to secure an arbitrator’s award declaring the work stoppage a violation of the NYSA-ILA contract’s no-strike provision.
Amazon announced its financial results for Q4 2015, and the results were good. From a revenue standpoint, the company brought in $35.7 billion, which was a 22% jump over last year. Profits increased 125% to $482 million. A large driver of the increased revenues and profits was a 51% increase in worldwide Amazon Prime membership. Although Prime was mostly noted for its free two-day delivery of all eligible purchases, recent additions to Prime’s streaming media has brought in a number of new customers. So while Amazon is still a fulfillment company, its place as a media company is continuing to grown.
And finally, load-to-truck ratios on the spot truckload market got a bump during the week ending January 30, according to DAT Solutions, which operates the DAT network of load boards. The total number of spot market loads increased 10% while available capacity fell 2.5% for the week. On the van market, the number of load posts was up 13% while truck posts fell 3%, leading to a 16% increase in the van load-to-truck ratio (1.7 loads per truck). The national average van rate was unchanged at $1.65 per mile. The number of posted reefer loads rose 6% and truck posts declined 3%, leading to a 9% increase in the reefer load-to-truck ratio (3.8 loads per truck). Overall, the national average reefer rate declined 1 cent to $1.88 per mile. Available flatbed load volume was up 11% while capacity increased 2%, yielding a 13% increase in the flatbed load-to-truck ratio to 8.3 loads per truck. The average flatbed rate was $1.85 per mile, down 2 cents compared to the previous week.
That’s all for this week. Enjoy the weekend, the Super Bowl, and the song of the week, Ozzy Osbourne’s Crazy Train.
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