This weekend I am heading to New York for my wife’s cousin’s wedding. I’ve never spent a 4th of July in New York, but I assume we will have to head to Coney Island for the annual Nathan’s Hot Dog Eating Contest. Last year, Matt Stonie ended Joey Chestnut’s 8 year run as hot dog eating champ. Something tells me Joey Chestnut will be back for vengeance this year. And for the record, the hot dog eating record is 69 by Joey Chestnut in 2013. The contest includes dozens of competitors, hundreds of hotdogs and buns, gallons of water, and tens of thousands of spectators. On second thought, maybe I’ll skip it.
And now, on to the news.
- Panama Canal unveils multibillion-dollar expansion
- Delivery disruptions loom for e-retailers using Canada Post
- Walmart expands free-shipping program
- Paytm & Alibaba to help Indian sellers source 5-million products from China at cheaper rates
- Perdue Farms is re-thinking its sourcing
- Trunk Club to integrate order fulfillment with Nordstrom
- Trucks banned from I-95 for DNC
- Spot rates unchanged
The Panama Canal’s long awaited expansion has finally opened. The $7.45 billion expansion opened a third shipping lane with enormous locks built in to the Canal. The project, which began in 2007, was two years overdue, and significantly over budget. But with the opening, much larger ships can pass through the Canal, linking the Atlantic and Pacific Oceans. A giant Chinese-chartered freighter, baptized COSCO Shipping Panama especially for the occasion, made its way along the 80 kilometer waterway as the first ship to use the expanded canal. Panama’s goal is to increase its revenues three-fold from shipping fees, but with shipping rates declining due to a capacity oversupply, this could be a lofty goal.
A delivery disruption is looming for Canada. Mail carriers may strike, or Canada Post may lock them out, as soon as tomorrow. The two groups have been in a contract dispute for six months, and it does not look like it is going to end soon. As a result, a strike or lock-out seems most likely. This scenario would mean that all Canada Post deliveries would come to a grinding halt. This includes all parcel shipments, which could be devastating to online commerce. Canada Post says it delivers two out of every three e-commerce parcels in Canada. And for US e-commerce companies that use Canada Post, it means their packages will be stuck sitting at the border.
Walmart is expanding its free-shipping program just days before Amazon’s Prime Day. Walmart is offering a free 30-day trial on its two-day unlimited shipping service, and an extra month free for paying members. It will also offer discounts on an array of products from swimming pools to electronics that will ramp up as July goes by. These discounts, or what Wal-Mart calls “rollbacks,” typically last 90 days or longer. This last one is a clever move to ensure the movement of seasonal items. These moves are all geared towards chipping away at Amazon’s e-commerce marketshare.
Ecommerce platform Paytm said it is leveraging its association with Alibaba to enable Indian sellers to source products from China and other countries. This will allow these companies to get cheaper rates and assistance with logistics and payments. The company has identified 25-30 Indian merchants to participate in a pilot program that will allow them to source items directly. This means they can cut out the two to three additional steps it takes to import items. Patym estimates that it could significantly cut the cost to import items. This could be a potential boon to the Indian e-commerce market, as the partnership aims to have at least 10,000 merchants in the program by the end pf the year.
Perdue is re-thinking how it will source its chickens. The big change will be that Perdue is trying to make its chickens happier and more comfortable. There has been a big push towards free range chickens in the last few years, and the customer’s voice is being heard. Perdue is adding windows to its barns, as well as giving the chickens more space. The company may also tinker with its breeding schedule to decrease the speed at which the chickens grow. While this may add more cost to raising the chickens, Perdue is betting on the fact that it will sell more chickens (most likely at a higher price) as a result. It will be interesting to watch the impact of this move.
Trunk Club is closing its Goose Island distribution center and laying off 250 workers. Instead, the company will work more closely with its parent company Nordstrom to handle orders. Trunk Club ships customers clothing and accessories selected by personal stylists, and customers can try the merchandise on at home or at Trunk Club’s “clubhouses.” They then pay for what they keep and send the rest back. The company is now integrating its orders into the Nordstrom fulfillment network, as it is outgrowing its Goose Island facility. The company will begin shifting order fulfillment and distribution operations currently handled at its Goose Island facility to Nordstrom’s network at the end of the year.
Commercial trucks weighing more than five tons will be banned from traveling on a portion of I-95 in Philadelphia during the Democratic National Convention next month. The Pennsylvania Department of Transportation said trucks will be prohibited from traveling between Exit 13 and Exit 22 on I-95 in Philadelphia from Saturday, July 23 at noon until midday Friday, July 29. The rerouting of trucks is part of security efforts taken by the city of Philadelphia and the DNC. Other cities have done the same in the past, and will continue to do so in the future.
And finally, national average spot truckload rates were unchanged as spot market activity slowed during the week ending June 25, according to DAT Solutions, which operates the DAT network of load boards. The total number of posted loads fell 6.2% while available truck capacity dropped 9.3%. Load-to-truck ratios increased across all three equipment types.
- VANS: The van load-to-truck ratio rose 3% to 2.8 loads per truck. The national average spot van rate was unchanged at $1.61/mile for the third straight week.
- REEFERS: The national average spot market rate was unchanged at $1.95/mile.
- FLATBEDS: At $1.95/mile, the national average flatbed rate was unchanged compared to the previous week and several markets and lanes gave back last week’s gains.
That’s all for this week. Enjoy the long weekend and the song of the week, Hot Dog by Led Zeppelin.