In what most people are calling a shocking upset, Donald Trump has won the 2016 Presidential Election. Almost everybody was predicting that Hillary Clinton would become the country’s first female president, but it was not to be. So on January 20, 2017, Donald Trump will be sworn in as the 45th president. This, of course, is barring a move from “faithless electors” on December 19, when the Electoral College officially casts their votes. It will be interesting to see how Trump’s presidency will impact global supply chains. The trucking industry, for example, is backing Trump, anticipating that money will be poured into improving conditions on highways and infrastructure. The global shipping industry, on the other hand, fears the results of Trump’s anti-trade stance. These are two situations that will be very interesting to watch over the next four years.
And now, on to the news.
- Hudson Bay turns to robots
- com relaunches same-day delivery
- Amazon moves to free up warehouse space
- Intermodal traffic remained sluggish in Q3
- Global supply chain risks grow
- Cargo theft instances climb
Canada’s oldest retailer, Hudson Bay, is turning to robots as it plans its e-commerce future. The store has recently invested more than $60 million to make upgrades to its Toronto Distribution center. One of the biggest upgrades is the addition of a robotics system. According to the company, products that may have taken up to 2 ½ hours to locate and ship previously, will be located and shipped within 15 minutes using the robotics system. The system is the OPEX Perfect Pick robotic system, and allows the company to locate items in less than 30 seconds. So far about two-thirds of the 725,000 square foot distribution center have been converted to the robotic system. According to Hudson Bay, the system improves the accuracy of shipped items to 99.7%, up from 97 to 98% when done manually.
PetSmart has relaunched its e-commerce site in time for the holiday rush. Additionally, the company is now offering same-day delivery of online orders in select markets. The new e-commerce site was a year and half in the making, and provides customers with better visibility into product availability at local stores. The company is offering same-day delivery via Deliv; customers can also choose a time and date that works for them for delivery. The service will cost customers $7.99 per order, and is expected to be rolled out in 17 markets —including Chicago, Los Angeles, Miami and Las Vegas—by mid-November. Same-day delivery orders will be fulfilled through PetSmart retail locations.
Amazon is looking to free up warehouse space in preparation for the holiday rush. To do so, the company is urging merchants who rely on Amazon to fulfill orders to keep out-of-season merchandise out of its warehouses. Amazon is raising its fees for storing merchandise in warehouses for the months of November and December. Established sellers are required to time their shipments to arrive by Nov. 9 to guarantee they will be available for the post-Thanksgiving shopping weekend, and by Dec. 2 to be available in time for Christmas. The thinking is that merchants will not bother wasting money to keep slow moving merchandise or non-seasonal merchandise in the warehouse. To offset the cost, however, the company is reducing fees to fulfill orders for merchants.
According to the Intermodal Association of North America (IANA), total intermodal traffic fell 4.6% in the third quarter. The decline was attributed to lower intermodal trailer volumes and international shipments. Domestic container business rose 3.3%, which helped to offset the 26.9% decline in intermodal trailer volume and 6.7% decline in international shipments. The seven highest-density trade corridors — which account for 63.6% of total intermodal volume — collectively declined 3.9% year over year.
According to the Chartered Institute of Procurement & Supply (CIPS) Risk Index, the risk in global supply chains is on the rise. The figure is the highest since 2013, and is being driven in part by increases in supply chain risk across multiple regions, including Western and Central Europe, Eastern Europe, the Middle East, Latin America and Sub-Saharan Africa. The upward trend is tied to a disintegration of political consensus over globalization. In fact, the World Trade Organization reported an average of 22 new trade restrictive measures a month in its latest report. Supply chain risk in North America remains static at 2.101, but both Canada and the USA have seen trade agreements with the European Union stall this quarter. And Donald Trump’s opposition to free trade agreements and the Transatlantic Trade and Investment Partnership (TTIP) could push risk even higher.
And finally, FreightWatch issued its third quarter cargo theft report this week. The report identified a total of 193 cargo thefts in the third quarter of 2016, with the average value loss of $120,536. Compared to last quarter, thefts rose 14% while value dropped 26%. FreightWatch reported 77 cargo thefts in July, 66 in August and 50 in September. Electronics and home and garden were the most-stolen items in the quarter, each representing 18% of cargo thefts during the period. Food and drinks represented 17% of stolen items.
That’s all for this week. Enjoy the weekend and the song of the week, Bruce Springsteen’s Born in the USA.