For the ninth year in a row, I attended the National Retail Federation’s (NRF) Big Show in New York City. Not surprisingly, the show was packed again, with new and innovative solutions across all areas of retail (more to come on that in a future column). The Big Show always makes me think of the logistics required to pull it off – hundreds of suppliers with booths, collateral, and equipment, tens of thousands of people, transportation, hotels, meals, private parties, and countless other things. It’s enough to make your head spin. And looking at the rest of the week, from a logistics standpoint, things get even crazier. Later today is the inauguration of President-elect Donald Trump with an anticipated 800,000 to 900,000 attendees. And then tomorrow, there is the Women’s March on Washington, which is expecting to draw over 200,000 people. This march coincides with over 600 additional marches in cities throughout the world. And while the logistics are not as complex, Sunday plays host to the two NFL conference championship games (go Pats!). I’m exhausted thinking about all of this.
And now, on to the news.
- China’s first freight train to the UK rolls into London
- Amazon patented a highway network that controls self-driving cars and trucks
- Japan to subsidize pickup lockers to reduce parcel deliveries
- US files trade challenge against Canada over wine
- EBay seeks lower costs for Canadians cross-border shopping online
- Container cargo imports surged at end of 2016
The first freight train from China to the UK has completed its journey. And what a journey it was – 7,500 miles, 9 countries, and 2 continents over 16 days. The train set out from Yiwu in the east of China as the inaugural direct freight service between the two countries. To be fair, the train that left China is not the same one that arrived in London, as differing rail gauges in different countries do not allow for a single train to complete the trip. With the service, London becomes the 15th European city to be linked with China by rail, and China is planning up to another 20 European routes in the coming years. The service is one-sided for now, as no goods from London will head back to China. The big draw for this service is the reduction in costs of shipping goods from China to the UK by air, and a reduction in time sending them by sea.
Amazon has received a new patent to help self-driving cars and trucks. The patent is for a highway network that manages how autonomous cars and trucks handle reversible lanes. Reversible lanes are lanes that indicate a change in direction via overhead signs. Many highways use these types of lanes to help with the congestion of rush-hour traffic. However, if an autonomous vehicle has not been programmed to understand these signals, it could be disastrous. In the patent, Amazon outlines a network that can communicate with self-driving vehicles so they can adjust to the change in traffic flow. This is another step in Amazon’s quest to create its own logistics network.
With e-commerce on the rise in Japan, logistics providers are facing difficult challenges when it comes to capacity and the ability to deliver items on time. The government is stepping in to help ease the problem by subsidizing the installation of pick-up lockers at train stations and convenient stores. The government will cover about half of the estimated 1.5 million to 2 million yen per location to install the lockers. In order to qualify for the subsidy, however, the locker must accept deliveries from any logistics company, not just specific companies. The goal is to set up about 500 new locker locations in the first year, with more to come in the following years.
The Obama administration has launched a trade challenge with the World Trade Organization against Canada this week. The issue at hand is Canada’s treatment of US wine shipments, specifically in British Columbia. US Trade Representative Michael Froman said British Columbia’s rules “effectively deny” the sale of US wine on grocery-store shelves, and as a result gives that province’s winemakers an unfair advantage. This all comes on the heels of the recent US election, and growing concerns about the future of global trade. Canadian Prime Minister Justin Trudeau has vowed to work with the incoming Trump administration and their plans to change trade agreements, although relations have seemed a bit strained over the last few weeks.
EBay is looking to lower the costs for Canadian cross-border shopping. The company, and the 40,000 people who have signed an online petition, are asking Finance Minister Bill Morneau to increase the minimum threshold of money spent before consumers need to pay duties and taxes. In Canada, that limit is currently $20, meaning that anything purchased from outside the country over $20 is subject to the taxes and duties. By contrast, the limit in the US was recently raised from $200 to $800. With more and consumers looking at cross-border commerce as a viable option, Canadian consumers are getting left out. However, according to Retail Council of Canada, the taxes and duties that Canadian retailers pay would mean a 20-25 percent price advantage for outside retailers. This is issue that does not have an easy solution, but will be interesting to watch.
And finally, container cargo imports surged at the end of 2016 in the US. This was due to strong holiday spending and retailers stocking up on goods for 2017. According to research firm Panjiva, which tracks trade data, U.S.-bound seaborne shipments increased 8.9% in December over the same month a year earlier. The ports of Los Angeles and Long Beach, which make up the nation’s largest seaport gateway, imported 665,816 loaded containers in December, measured in 20-foot equivalent units, an increase of 7.8% over the same month in 2015. Exports were up 11.8% over the same period, to 287,834 TEUs last month.
That’s all for this week. Enjoy the weekend and the song of the week, CCR’s Fortunate Son.