This Week in Logistics News (February 20 – 26)

leap yearIn a normal year, this weekend would spell the end of February. But this is no ordinary year; this is leap year. Our quadrennial interruption of the shortest month of the year. As I’m sure everyone knows, a leap year occurs every four years to help synchronize the calendar year with the solar year, which is about 365 ¼ days. However, what you may not realize is that the solar year is actually slightly less than 365 ¼ days. How much shorter? About 11 minutes. That is why leap year is omitted 3 times every 400 years. If a century year is not divisible by 400, it is not a leap year. So while 2000 was a leap year, 1700, 1800, and 1900 were not. This correction changed the difference of 11 minutes and 14 seconds to about half a minute. The new system will keep us on track for another 3300 years. After that, the calendars will be off by about a day.

And now, on to the news.

walmart-pickupWith slower than expected e-commerce growth, Wal-Mart plans to re-focus its strategy to grow this area of the business. The retailer is expanding its online grocery business as well as the number of products available overall on its website. The company has already invested heavily on its e-commerce and fulfillment center infrastructure, and plans to spend roughly $2 billion on e-commerce work in the next two years. Wal-Mart already offers a service in 22 geographic markets where customers order groceries online and arrange pickup at a local store. The company wants to expand to more markets this year. With more and more companies jumping into the online grocery space (as was evident in last week’s news round-up), this is an area that could be a huge revenue stream for the retailer, who is already the largest grocery operator in the United States.

amazon lockerAmazon wants to set up a network of parcel lockers across Europe to enable people to pick up their own orders as it seeks to widen delivery options and cut costs. Amazon already has parcel lockers established in the United States and the UK. This is the latest move by the company to rid itself of relying on parcel carriers for delivery of packages. Amazon is establishing itself as a global logistics service as much as a retailer these days. Amazon has already taken a first step in Germany to reduce its reliance on established logistics companies, opening a parcel sorting center outside Munich late last year that employs 130 workers, with plans for more near other big German cities.

mexicoThe DOT has expanded the Mexican-US border freight zones in Texas and New Mexico. Cross-border freight haulers now have new access points to carry loads to and from Mexico, according to a pre-published rule issued Feb. 23 by the Federal Motor Carrier Safety Administration. The agency intends to officially codify New Mexico’s Dona Ana County and Luna County as commercial border zones and expand the commercial border zone around El Paso, Texas, thanks to a new cross-border bridge in the city. Commercial border zones along the U.S.-Mexican border allow Mexican-domiciled carriers and drivers and U.S.-based carriers and drivers limited access to cross the U.S.-Mexican border to deliver freight. Cross-border loads are generally dropped at a warehouse or some other facility within the commercial border zone.

InstacartWholeFoodsWhole Foods is expanding its relationship with Instacart. The grocery chain is making an investment in the delivery start-up, although the size of the deal is not known at this point. The two companies have also signed a new five year delivery partnership which makes Instacart the exclusive delivery option for Whole Foods. With expanded competition in the grocery delivery space it is not surprising to see these two companies push their agreement to new heights to combat the rise in organic and natural food delivery in the market.

The U.S. Department of Commerce (DOC) has expanded the list of products and services that U.S. companies can export to Cuba. The new rule will allow US companies to export and sell products that meet a few key categorical requirements: disaster preparedness, education, agricultural production, food processing, public transportation, and “artistic endeavors,” which are defined as film production and historic preservation. These exports will be evaluated on a case-by-case basis and must prove that they meet the needs of the Cuban people.

delivSame-day delivery startup Deliv Inc. is getting a funding boost from an unlikely source: UPS. The last mile delivery start-up collects items from retailers and delivers them to customers’ homes. The company uses a host of contract employees to deliver the products, and charges retailers a flat fee per delivery, which is usually passed on to the customer. The investment gives UPS a board seat at Deliv, as well as the opportunity to learn more about the software it uses to connect with the retailers website. This is the area that could be most useful for UPS in the long run as it evolves its last mile delivery processes.

And finally, last week saw van demand rebound, with the average load-to-truck ratio moving up to 1.4 loads per truck in DAT’s network of load boards. Van rates held steady last week at a national average of $1.58/mile. Outbound rates rose in Los Angeles, Dallas and Memphis but those gains were offset by declining rates in Chicago, Atlanta, Philadelphia and Buffalo.

Interested in Omni-Channel Fulfillment? Register for a free webinar scheduled for March 10th, hosted by IBS and ARC Advisory Group, to hear about the findings from survey-based research on Omni-Channel Fulfillment.  The webinar will be punctuated with contributions and insights by Graham Newland, IBS’ new Chief Customer Officer.

That’s all for this week. Enjoy the weekend and the song of the week, Time by Pink Floyd.

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