It turns out that online shoppers want more for less. Shocking, right? Well, in its latest survey of over 1,000 US consumers, supply chain consulting firm AlixPartners LLP found that consumers expect to wait an average of 4.8 days for delivery, down from 5.5 days in 2012. And the share of those who are willing to wait more than five days has declined to 60% from 74% in four years. We can chalk this information up to the Amazon effect, where everyone wants free two-day shipping on everything. The reality is that two-day shipping is not cheap, and generally, is not efficient (unless companies are charging the appropriate amount). This is one of the reasons we are seeing an influx of crowd-sourced delivery options – it takes the shipping pains off the retailer. And for those of you who have held off on ordering Father’s Day gifts, hopefully fast shipping is available.
And now, on to the news.
- JD.com launches drone deliveries in rural Jiangsu
- Staples joins the same-day fray with Staples Rush
- FAA slaps Amazon with $350,000 penalty
- Norway adopts world’s first zero deforestation policy
- Indiana starts virtual weigh station pilot along I-94
- 36% Jump in Spot TL Freight
While there has been a lot of hype in the US around drone deliveries, especially with Amazon and Google pouring millions of dollars into research, Chinese online retailer JD.com has beaten everyone to the punch. The online retailer officially began using drones to make deliveries this week. The company is using drones to deliver packages in the countryside of east China’s Jiangsu Province. According to JD.com, the drones can cut delivery costs and timeframes in at least half. At a delivery depot in Suqian’s Caoji Township, two drones are capable of handling 200 parcels a day. The drones can each carry 10 to 15 kg of weight and fly 15 to 20 km at a speed of up to 54 km per hour. Currently, the drones transport goods between depots rather than to customers directly.
Staples is jumping into the same-day delivery space. The office supply company is rolling out its own same-day delivery service, called Staples Rush, to major metropolitan areas in the US. Cities such as Boston, New York, and Dallas have already had pilot programs in place which have proved successful. The next group of cities to use the program are Chicago, Houston, LA, San Francisco, and Seattle. The program has a $14.99 delivery fee, and all orders placed by 3pm guarantee same-day delivery. While there is no minimum order needed to take advantage of Staples Rush, Staples’ $9.95 traditional online ordering fee will still apply to orders that are under $49. The $9.95 ordering fee is in addition to the $14.99 same-day delivery charge.
The Federal Aviation Administration (FAA) is proposing a $350,000 fine on Amazon.com for allegedly shipping prohibited and dangerous goods by air. The fine stems from an incident in 2014 in which nine UPS workers came into contact with corrosive chemicals that had leaked through a shipping package. The employees had to be treated with a chemical wash after feeling a burning sensation from the contact with the liquid. The fine comes as the FAA is stepping up enforcement of hazardous materials safety violations and as Amazon is moving deeper into the world of shipping goods using its own network of airplanes, trucks, and warehouses.
We have heard a lot about companies making the commitment to eliminating deforestation from their supply chains. Well, now, for the first time, a government is making the pledge. Norway has announced a complete ban on deforestation, making it the first country to commit to a zero deforestation policy. The pledge comes two years after the country issued a joint declaration with Germany and Britain at the UN Climate Summit committing to “promote national commitments that encourage deforestation free supply chains, including through public procurement policies to sustainably source commodities such as palm oil, soy, beef, and timber.” The commitment was part of the Norwegian Parliament’s Standing Committee on Energy and Environment recommendation titled Action Plan on Nature Diversity, which also requests the government exercise due care for the protection of nature in its investments through the government’s Government Pension Fund Global.
Truck drivers traveling along I-94 in northwest Indiana will be part of a pilot program in the state testing weigh-in-motion sensors that are embedded in the pavement. The system combines cameras with in-pavement scales to identify and weigh trucks as they pass by, eliminating the need for trucks to slow down to go through a weigh station. When combined with federal and state compliance information, the system can provide a real-time compliance assessment to help law enforcement target overweight trucks. After the pilot program, the results will be reviewed to see if the program will be rolled out state-wide.
And finally, the number of posted loads on the spot truckload freight market was up 36% during the week ending June 11, according to DAT Solutions, which operates the DAT network of load boards. That made it another good week for carriers as load-to-truck ratios all jumped substantially: the van load-to-truck ratio was 3.1 loads per truck, up 23%; the reefer ratio climbed 29% to 5.9; and the flatbed ratio was 20.3, a 10% increase compared to the previous week. The national average spot rates were:
- Van: $1.61/mile, down a penny despite increases in average rates in major markets.
- Reefer: $1.94/mile, up 1 cent on higher rates out of California, the Northeast, and Midwest.
- Flatbed: Unchanged at $1.93/mile. A 1-cent drop in the line-haul rate was offset by a 1-cent increase in the fuel surcharge.
That’s all for this week. Enjoy the weekend, Father’s Day, and the song of the week, I Want It All, by Queen.