This Week in Logistics News (January 28 – February 3)

The Super Bowl is this Sunday – the Atlanta Falcons are seeking their first championship while my beloved New England Patriots are seeking their fifth. If you’re planning on going to the game, you’re going to have to shell out some serious cash. Looking at the secondary market, data from TicketCity indicates that the average ticket price is $4,744 and the largest sale was $74,928. Now for the majority of us, we’ll enjoy watching the game from the comforts our home, a friend’s home, or a favorite watering hole. This will certainly save you some money. According to the National Retail Federation’s (NRF) annual Super Bowl Spending Survey conducted by Prosper Insights & Analytics, American consumers will spend an average of $75 for a total of $14.1 billion on the Super Bowl. Of those survey respondents who indicated plans to watch the game, 80 percent will purchase food and beverages, 11 percent will purchase team apparel, and 8 percent will purchase new TVs to watch the game. I’m planning on making some jerk chicken wings, but otherwise my expenses should be pretty low. What are you planning on spending your Super Bowl money on?

And now, on to the news.

Walmart is taking aim at Amazon as it is now offering free two-day shipping on more than 2 million items. The retailer is offering the deal on all purchases over $35, with no membership fee required. This is about as blunt as one can be to combat Amazon Prime’s free two-day shipping for its members. The new program is a replacement for the company’s Shipping Pass program, which for $50 annually, gave members free three-day shipping on all orders. The program did not go well, and current members will receive a refund. This move is all part of Walmart’s move to increase its e-commerce presence. The company also offers free same-day pick-up of online grocery orders, a service that even includes Walmart team members loading the groceries into your car.

Speaking of Walmart, a California federal judge declined to deliver $80.3 million in penalties to a certified class of Walmart truckers. However, the judge did add an additional $5.8 million in restitution to the $55 million that a jury awarded in back wages to truckers. This brings the total amount owed to over $60 million. The payout is restitution for rest breaks, layovers and pre-trip and post-trip inspections during the one-year period ending Oct. 9, 2005. Nearly 840 drivers will receive compensation for earning less than minimum wage for rest breaks, layovers and pre-trip and post-trip inspections. The case began in 2008, and is finally being put to rest.

Just last week, I wrote about how Amazon is making moves to increase its presence as a logistics service provider with the move to ocean freight. Well, Amazon is back at it. Earlier this week, the company said it plans to build its first air cargo hub to accommodate its growing fleet of planes. The hub will be located at Cincinnati/Northern Kentucky Airport in Hebron, Ky. The move will create 2,000 jobs, and will reduce their reliance on other carriers to move orders around the country. This goes to show that Amazon is seeking to become more than just an online retail marketplace, as according to people familiar with the matter, Amazon’s end goal is haul and deliver packages for itself as well as other retailers. The fact that the company has a dedicated fleet of 40,000 trucks and a fleet of couriers shows that this scenario is increasingly closer to becoming a reality.

Amazon has been using about 45,000 robots in its distribution centers to help pick orders. Well, that number is about to increase. The company was just granted a patent for a robot that can pack orders. According to the patent, there is one specific use case that could speed up operations in the fulfillment centers. A human operator will load a tray with the item to be shipped, and the robotic arm will use a suction cup to grab the item and pack in the appropriate sized box, picking it from a group of boxes. It will be interesting to see how long it will take to get the new robots into the fulfillment centers, but Amazon seems to be betting heavily on the future of the warehouse robot.

Speaking of robots, UK-based online grocery retailer Ocado has been working on a humanoid robot called SecondHands as part of growth plans. The robot in question understands human speech, has 3D vision, and uses artificial intelligence and machine learning to help the company pack and dispatch goods from the company’s warehouses. This sounds great, except for one thing – robots generally do not have that soft human touch that is required for delicate items. SecondHands has been great for hauling heavy boxes and crates around a warehouse. But now, the company is unveiling a new advancement that could be monumental in the automation and robotics future of shipping. Ocado has developed a working robotic arm that can grasp individual pieces of produce and pack them safely for delivery. It will be interesting to see if the robots can actually hold up to the standards required to deliver fresh grocery, but with the advancement in robotics, nothing surprises me anymore.

McDonald’s has entered the food delivery business by teaming up with Uber. Starting earlier this week, McDonald’s is partnering with Uber’s on-demand restaurant delivery app to roll-out its first large scale test of delivery. The program will take place at over 200 Florida McDonald’s locations. Customers can place a McDonald’s order through the UberEATS app or at UberEATS.com, and pay a $4.99 fee to have the food delivered. Using the app or website, much like hailing an Uber ride, customers can track the location of their order in real time. People seem to be enjoying the arrangement. According to Peter Hsu, UberEATS Florida general manager, the largest order placed was 33 items, and the most McNuggets ordered was 80. One customer even ordered 22 times in a 12-day span. If the tests go well, McDonald’s will look to expand nationally.

And finally, Cargo theft recording firm CargoNet logged 836 cargo theft incidents in 2016 worth an estimated $172.9 million, the firm reported in its annual cargo theft trend analysis. There were a total of 836 cargo incidents, which accounted for nearly half of all freight-related thefts. Food and beverage cargo was the most-stolen in 2016, accounting for 217 of 836 reported cargo thefts. Electronics were the second-most stolen with 122 reported thefts worth $45.6 million – the costliest of any category. Friday was the most popular day for cargo thefts, and California had the highest number of thefts.

That’s all for this week. Enjoy the weekend, the Super Bowl, and the song of the week, Welcome to the Jungle by Guns n’ Roses.

Comments

  1. Amazon’s free shipping is such a treat to online shoppers. McDonalds teaming with Uber is also a great connection. Business ideas such as these are truly enticing and many consumers can enjoy a number of conveniences at the same time savings in their purchases.

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