This weekend is Memorial Day weekend in the United States, a Federal holiday that honors the people who have died while serving in the armed forces. For many people it is a somber day to honor loved ones. Memorial Day weekend also kicks off the unofficial start to summer. And I, for one, could not be happier. Hot weather, swimming, beach trips, bbq’s, long days, and plenty of time outside. What’s not to like? I suppose there is the traffic if you are traveling this weekend (or most any weekend for that matter), but I plan on staying put. There are also the mosquitos, but I can deal with those. And I suppose the humidity in Boston can be a little much, but luckily, I have central AC. For me, the pros outweigh the cons, and I can’t wait for summer. So even though the official start of summer is 25 days away, I’m wishing everyone a happy summer today!
And now, on to the news.
- Amazon’s fulfillment services will command premium prices in Q4
- DOT officially expands freight zone at Mexican border in Texas
- Zappos to begin shipping shoes in reusable boxes
- France set to grind to a halt as strikes spark fuel shortages and air and rail blockages
- Cargo theft likely to increase over Memorial Day
- Diesel prices head up 6 cents to a new 2016 high
Amazon will be raising its storage fees in the fourth quarter for Fulfillment by Amazon clients. The change is due to how full warehouses get during the holiday season. Through the Fulfillment by Amazon program, merchants pay Amazon to store and ship the goods they sell on the Amazon marketplace. The new fee structure will reduce fees in October before more than doubling them in November and December. The driver behind the move is to encourage sellers to move inventory into the warehouses before the holiday season when Amazon’s fulfillment centers are less constrained. Additionally, it encourages sellers to only move inventory into the warehouses that are likely to sell in Q4. This will enable Amazon to move more inventory without being saddled with slow moving items.
The U.S. Department of Transportation (DOT) has finalized a February-proposed expansion to the commercial freight zone at the El Paso, Texas, border crossing between the U.S. and Mexico. The commercial border zones along the U.S.-Mexican line allow carriers in both countries limited access to cross the international border to deliver freight. The expansion came about with the opening of a new cross-border bridge between the two countries in March with the goal of collecting feedback from industry stakeholders. With no comments or feedback, the DOT has simply finalized the February proposal.
Zappos is looking at their shipping boxes as another way to connect and help their customers. Starting next week, the company will ship shoes in boxes that have templates inside which will allow customers to easily repurpose the boxes rather than throwing them away or recycling them. The template designs printed on the inside of the box encourage customers to cut and fold them to turn them into something else, including smartphone holders, children’s shoe sizers, a geometric planter, 3-D llama, and more. Aside from making the boxes more useful, this will reduce waste, as a large number of customers end up throwing away the boxes rather than recycling. This move helps to make for a more sustainable supply chain.
France is facing a transportation meltdown. There is a stand-off between unions and governments over labor reform, which saw oil refineries blocked and 20% of its fuel pumps run dry. In fact, seven out of eight of the country’s refineries have been cut off. According to experts, France’s emergency stockpiles are deep enough to keep fuel stations open for up to two months. However, as the strike looms and becomes more violent, the public has sparked fears of a fuel shortage. With the summer holiday looming, this is one dispute that will need to be resolved or it could prove disastrous for the country.
Truckers need to be more aware of cargo theft heading into Memorial Day weekend. This is according to warnings issued from both FreightWatch International and CargoNet. FreightWatch said in past Memorial Day weekends it has seen elevated theft levels up to 40% higher than non-holiday weekends. In 2015, the firm saw a record-high 15 cargo theft incidents averaging more than $600,000 in value. CargoNet reports that in the last four years, 98 cargo thefts have occurred during the same weekend. Both companies have outlined recommendations to avoid cargo theft incidents, including confirming delivering and receiving hours and staying up to date on security best practices.
And finally, diesel prices have risen 6 cents to a 2016 high of $2.357 per gallon. This marks a price increase for the 13th time in 14 weeks, and marks the highest price since December 14, 2015. Even with this stretch of gains, the average price per gallon remains lower annually, with this week’s average down 55.7 cents compared to the same week a year ago. With gasoline demand rising around the world, more gasoline has been exported, leaving a relative glut of diesel from refineries. This trend should continue, so even if prices continue to rise, they will remain lower than recent years’ averages.
That’s all for this week. Enjoy the long weekend, and the song of the week, Summer Breeze, by Seals and Croft.