This Week in Logistics News (August 13 – 19)

Wage discussions have certainly been in the news lately, especially with the “Uberization” of last mile deliveries. Just last week, I wrote about how Deliveroo, a food delivery start-up based in London, recently raised another $275 million in funding. This actually brought their total private funding up to nearly half a billion dollars since 2012. Well, Deliveroo has been told by the government that it must pay its workers the minimum wage unless a court rules that they are self-employed. This is in line with the struggles of Uber, Lyft, Amazon drivers, and a host of others, who are continuously deemed “contract workers.” In fact, there are scores of recent battles over this exact issue, especially when it comes to port drivers, where the courts have ruled that the drivers should be paid as employees, not contract workers. Amazon has certainly faced its fair share of these battles, and there clearly is not an end in sight. This is another topic we will certainly keep an eye on.

And now, on to the news.

otto newUber is acquiring Otto, a startup that’s been working on developing self-driving trucks. Uber has been rapidly expanding its self-driving division, opening an Advanced Technologies Center in Pittsburgh stocked with 50 robotics engineers poached from Carnegie Mellon University’s own self-driving lab, as well as researchers from a number of other companies. According to reports, the acquisition of Otto is geared towards starting a cargo service for long-haul trucking,  

instacart logoInstacart has officially announced a partnership with Minneapolis based Good Grocer. Good Grocer is not a national chain, but rather an independent full service grocery store. So why is this partnership newsworthy? This marks the first time Instacart has partnered with a non-profit. Good Grocer, which opened last year, allows customers to sign up to be volunteers and work at the store for two-and-a-half hours a month. In exchange for working, they receive a 25% discount. The idea is to give low-income residents an affordable way to access more fresh and healthy foods. Instacart charges $5.99 for a two-hour delivery or $7.99 for a one-hour delivery on orders of over $35. When ordering from Good Grocer, Instacart customers can feel good about where they are spending their money.

BT-AK539_AMTRAK_16U_20160817174511A new rule goes into effect later this month to measure to on-time performance of Amtrak trains. Instead of just measuring on-time performance at the final stop, measurements will be taken at each stop. The Association of American Railroads late last week filed documents with the U.S. Court of Appeals for the D.C. Circuit, challenging this new rule issued by the Surface Transportation Board. The big issue is that freight trains are required to pull over to allow Amtrak trains to pass. Under a 2008 federal law, freights may be penalized if they cause passenger trains to be late by not pulling over to allow the trains to go first. Often times there are not adequate side rails for trains to pull over, and the end result is both the Amtrak and freight trains running late.

jcpenney_2013_logo_detailJC Penney narrowed its quarterly loss and broke with department store rivals in reporting a sales increase Friday, signs that its turnaround is gaining traction. A big part of this turnaround was the increased focus to expand its same-day, in-store pickup for online buyers throughout the chain. This focus has reduced shipping costs, while bringing additional customers into the store, where up-sell and cross-sell opportunities exist. Friday, JC Penney said sales at existing stores grew 2.2%, and the retailer backed its same-store sales guidance for the year, expecting growth of 3% to 4%.

© JonCraig2With global trade expanding, and modes changing, there is sometimes a glut of excess cargo containers. But what can companies do with them? Well, Bristol UK’s Wapping Wharf District is putting cargo containers to good use. Cargo, the city’s first retail yard made of converted shipping containers, will be part of Bristol’s Wapping Wharf precinct. Both Cargo 1, which includes 18 converted shipping containers, and Cargo 2, a similar hub adjacent to the first and including 28 containers, have received planning consent. It is anticipated that the first retailers in Cargo 1 will open in September and in Cargo 2 later this autumn. It is certainly not the first time a company has used cargo containers for storefronts (see Puma’s pop-up stores), and it surely won’t be the last. But it is certainly fun.

August should be the busiest month of the year for import cargo volume at the nation’s major retail container ports now that retailers have stocked up for back-to-school and are getting a head start on holiday season merchandise. That’s according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates, which said cargo volume for 2016 should end the year with a 1.6% increase over last year. Ports covered by Global Port Tracker handled 1.58 million Twenty-Foot Equivalent Units in June, the latest month for which after-the-fact numbers are available. That was down 2.8% from May and 0.5% from June 2015. One TEU is one 20-foot-long cargo container or its equivalent. July was estimated at 1.64 million TEU, up 1.5% from the same month last year. August is forecast at 1.68 million TEU, down 0.3% from last year; September at 1.61 million TEU, down 0.6%; October at 1.63 million TEU, up 4.9%; November at 1.52 million TEU, up 2.9%, and December at 1.47 million TEU, up 2.5%.

And finally, the downward trend of diesel prices continues. Diesel prices continued their recent downward trend during the week ending Aug. 15 with a slight drop, according to the Department of Energy’s weekly report. The U.S.’ average for a gallon of on-highway diesel is now $2.31 following the six-tenths of a cent decrease during the week. All regions saw a decrease with the most significant coming in the West Coast less California region, where prices dropped 1.3 cents. The nation’s most expensive diesel is in California at $2.696 per gallon, followed by the West Coast less California region at $2.441 per gallon. The cheapest fuel can be found in the Gulf Coast region at $2.179 per gallon, followed by the Lower Atlantic region at $2.233 per gallon.

That’s all for this week. Enjoy the weekend, and the song of the week, Warren Zevon’s Lawyers, Guns, & Money.

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