And like that, the year is basically over. I’d like to thank all of our readers, sponsors, guest bloggers, and of course, my fellow Logistics Viewpoints contributing authors for another great year. This is our last Logistics Viewpoints weekly news roundup. We’ll have a new article for you on Monday, but then we are going to take a few weeks to rest and re-energize to continue bringing you all the hard hitting news, analysis, and stories you expect. Happy holidays from all of us here at Logistics Viewpoints.
And now, on to the news.
- UPS, FedEx struggle to keep up with holiday surge
- Walmart beefs up delivery options for Christmas rush
- Amazon chooses UK for first drone delivery
- Dunkin’ Donuts begins test of curbside pick-up
- Red Robin offers delivery to build off-premise business
- Japan ratifies Trans-Pacific Partnership
Holiday shipping volumes are up, which is mostly good news for UPS and FedEx. However, with the increased volumes, come the types of problems that both shippers were hoping to avoid this holiday season – namely, delayed packages. On-time rates have fallen, and millions of packages ordered since Thanksgiving have been delayed. This is not surprising, given the fact that more people flocked to the Web than stores over the Thanksgiving holiday weekend, and that trend is continuing throughout the month of December. To alleviate the strain, UPS has relocated hundreds of staff from its headquarters and other corporate offices to help at shipping hubs struggling to handle the record demand. FedEx is continuing to work closely with its largest peak customers and is increasing hours for some employees to meet demand. And as the volume of packages awaiting delivery continues to grow, both UPS and FedEx have opened dozens of satellite sorting facilities and invested in automation to process more packages faster. Even with advanced planning, and the knowledge that both companies would see record-breaking demand, the holiday push will be a struggle to ensure packages are delivered on time. I’m guessing many people will be watching this news (and their packages) closely.
Speaking of the holiday rush, Walmart is making plans to be the procrastinators go to source for both online and in-store shopping this season. The retailer is beefing up its purchasing and pick-up options for shoppers with a lot left on their list. Walmart is offering free in-store pick-up of online orders placed by 6 p.m. local time on Dec. 23, and has launched a dedicated online website for customers to view last-minute gift inventory available at their local store. The dedicated website could certainly be a useful tool for shoppers as they will not have to go into the store only to find out that the item they want is not in stock. Shipping cut-off dates are Dec. 20 and Dec. 22 at noon local time for standard and rush shipping respectively and Wal-Mart stores will close at 6 p.m. local time on Christmas Eve this year — two hours earlier than in previous years.
Amazon has sunk a lot of time and money into drone research. And now, it is coming to fruition. On Wednesday, the company announced that it has made its first commercial drone delivery, on Dec. 7, to an Amazon shopper in Cambridgeshire, England. The flight left from a nearby Amazon warehouse and lasted about 13 minutes and covered 2 miles to deliver an Amazon Fire device and popcorn. Amazon said it would now test drone deliveries with two more customers near Cambridge, an English city where the company has a large drone-testing plant. If the tests are successful, the company says it wants to expand the number of consumers who could participate in the trial in the coming months.
Dunkin’ Donuts is jumping on the curbside pick-up bandwagon. This is an interesting take on curbside pick-up, as most restaurants that have tested the concept do not have drive-thru windows. But Dunkin’ Donuts is testing the service at one of its locations in Natick, MA as a first try. The service is only available to rewards perks members. Customers can place an order and pay using the Dunkin’ Donuts mobile app, then park in a dedicated curbside pick-up parking spot. When the order is ready, an employee will bring the order out. The big advantage here is for those locations that do not have a drive-thru window, as now customers will not have to get out of their car. The other scenario where this concept could work is for a very busy location. I have certainly pulled into a Dunkin’ Donuts before and contemplated which would take longer – going inside or going to the drive-thru. With the new mobile app, I’d be able to skip both. The program will be tested at the one location, and if successful, could roll-out nationwide next year.
Red Robin is going the opposite route of Dunkin’ Donuts – they are trying to build their off-premise business. The burger chain is partnering with DoorDash to offer burger delivery from 70 restaurants across the country, including Phoenix; Seattle; Los Angeles; Indianapolis; San Francisco; Chicago; Dallas; Houston; Charlotte, N.C.; Washington, D.C.; Columbus, Ohio; and Minneapolis. With same-store sales comps slipping, the chain is looking for new ways to drive business. And the growing excitement over home delivery from non-traditional delivery options is one way to start. Red Robin is testing various packaging variations for both carry out and delivery to keep the burgers and various toppings in good shape to travel, but company officials declined to give specifics on those tests. The burger chain is also testing an online ordering platform and delivery with various third-party partners. So, even if the test is successful, and a full roll-out takes place in 2017, there are no guarantees that DoorDash would be an exclusive partner.
And finally, Japan’s parliament has ratified the Trans-Pacific Partnership (TPP) trade agreement. The TPP is an extremely attractive trade agreement for Japan, as the 12 nation partnership brings Japan together with the US while excluding China. However, the ratification is mostly symbolic as President-elect Donald Trump has already said that he would pull the US out of the agreement on his first day in office. Unfortunately for Japan, and the other 10 members of the partnership, the agreement requires US ratification in order for it to take effect. This will leave Japan with a difficult decision to make, as to whether they will try to ratify the TPP without the US or seek other trade deals.
That’s all for this week and for the year. We hope you have a very happy and prosperous new year, and we’ll be back to bring you all the logistics news in January. Enjoy the holidays, and the song of the week, The Rolling Stones the Last Time.