As hard as it is to believe, next Thursday is Thanksgiving. I’ve written before about the intricacies of the Thanksgiving supply chain, and how over 730 million pounds of turkey will be consumed in the United States during Thanksgiving (or about 45 million individual turkeys). The bigger story, however, is the fact that the holiday shopping season technically kicks off a week from today, as Black Friday deals roll out nationwide. This, of course, is followed by Cyber Monday, which is the online equivalent to the in-store rush of Black Friday. The rise of Cyber Monday shows that once again, the biggest story for the holiday season (and I’ll go deeper into the issue in an upcoming article) is the rise of e-commerce. More and more people are choosing to avoid the lines and crowds at the mall for online shopping (myself included). This pushes the limits of UPS and FedEx (see the news below), and creates an influx of last minute orders that require expedited service. Luckily we live in an age where the consumer, if they are willing to pay, can get whatever it is they are looking for.
And now, on to the news.
- Descartes acquires 4Solutions
- Koch Industries invests $2.5b in Infor
- Domino’s delivers world’s first ever pizza by drone
- com launches drones in rural China
- Package carriers building up for e-commerce delivery
- Shipt to deliver beer and wine in North Carolina
- Retail imports up as holiday season begins
Descartes Systems Group has announced its acquisition of 4Solutions, an Australia-based provider of cloud-based business-to-business supply chain solutions. The deal was valued at around $2.7 million, and was paid in cash. 4Solutions is a supply chain integration and trading partner enablement solutions provider for the healthcare sector in Australia. The company operates the Health Supply Network, an electronic document exchange network for the healthcare community. According to Descartes, as part of this community, large multi-national, local pharmaceutical manufacturers and wholesalers can connect and collaborate to automate a wide array of supply chain processes spanning sourcing to delivery. This presents an opportunity for Descartes to expand its customer base and sell more products into the 4Systems community.
Koch Equity Development, the investment arm of Koch Industries, has announced plans to invest $2.5 billion for a big stake in Infor. The influx of cash into the company will allow Infor to continue to expand its product portfolio. Infor has grown by acquisitions and will be in a better position to compete in the supply chain and logistics space against other software giants. The deal valued Infor at over $10 billion, and gives Koch 4 seats on Infor’s board. With the industry as a whole moving in the direction of consolidation, it is not surprising to see investment firms sinking money into the larger companies.
Domino’s Pizza has delivered the world’s first pizza by drone. The pizza company delivered a Peri-Peri Chicken and Chicken and Cranberry pizzas to the backyard of Emma and Johnny Norman’s home in Whangaparaoa, about 20 miles north of Auckland (making them the first people to officially receive pizza via drone). According to Domino’s, the company ran a series of tests flights with an emphasis on food temperature tests. This all comes only three months after the company announced a partnership with drone delivery service provider Flirtey. Domino’s said it is looking at opportunities for drone delivery trials in its six other markets – Australia, Belgium, France, The Netherlands, Japan, and Germany.
Speaking of drones, JD.com has publicly launched its drone delivery service. The company started a trial of the program in rural China to coincide with the country’s “Singles Day” shopping festival. The one-day shopping festival, which generates over $17 billion in sales, dwarfs Cyber Monday’s sales of $3 billion. Delivery tests took place in Beijing, Jiangsu, Shaanxi, and Sichuan provinces. JD.com ran thousands of test flights, some complete with actual customer deliveries, with no indications of problems making the deliveries. This is another example of the rest of the world pushing ahead with drone deliveries while the US is still bogged down by FAA regulations that make unmanned drone deliveries essentially impossible.
FedEx and UPS are gearing up for the holiday rush by adding bigger parcel hubs (more to come on holidays planning). Both companies have opened more and larger sorting facilities that are more accessible to their customers. The goal behind this move is to shorten the timeframe for items to be shipped from the e-commerce fulfillment center to the shipping hub. Just how much space are these companies creating? UPS announced plans to open a $400 million, 1.2 million square foot distribution center just outside Atlanta. The company is also partnering with Sealed Air Corp to give customers access to package engineering expertise. And FedEx’s ground division has added more than 12 million square feet of package sorting space this year. The company has also partnered with Newegg to allow customers pick up their orders at a FedEx Office retail location. Given the public’s desire to shop online and skip the mall, this is a trend that will most likely continue for the foreseeable future.
Shipt, an on-demand, crowd sourced shopping and delivery start-up, will start offering beer and wine delivery to customers throughout Charlotte, NC. This comes at a time when consumers are turning to these types of services more and more to avoid the hassle of grocery shopping. The announcement expands the partnership with Harris Teeter, which until this week, would only allow for delivery of groceries. Customers can order through the mobile app and select a delivery timeframe window. With the addition of alcohol, customers will scan their ID through the app and will be required to present the same ID to the Shipt delivery person when their orders are ready. Currently, a Shipt membership is $99 per year, and includes unlimited deliveries.
And finally, with the holiday shopping season upon us, imports at the nation’s largest ports are expected to be up 4.4% this month compared to last month. Ports covered by Global Port Tracker handled 1.6 million Twenty-Foot Equivalent Units in September, the latest month for which after-the-fact numbers are available. That was down 6.6% from August, the busiest month of the year, and down 1.6% from September 2015. The numbers come as NRF is forecasting $655.8 billion in holiday sales, a 3.6 percent increase over last year.
Interested in Omni-Channel Fulfillment? Register for a free, on-demand webinar, hosted by Pitney Bowes and ARC Advisory Group, to hear about the findings from survey-based research on Omni-Channel Fulfillment. The webinar will be punctuated with contributions and insights by John Cruzan, Senior Director of Shipping Solutions at Pitney Bowes Global E-Commerce.
That’s all for this week. Enjoy the weekend and the song of the week, in memory of the late great Leonard Cohen, Hallelujah.