This Week in Logistics News (March 11 – 17)

Happy St. Patrick’s Day, a day where everyone is Irish. Or, at the very least, pretends to be. And like any holiday, Americans sure love to spend money. In fact, according to the National Retail Federation (NRF), Americans will spend a record amount of money this year. Just how much money? Well, according to the NRF’s annual survey conducted by Prosper Insights & Analytics, spending for St. Patrick’s Day is expected to reach $5.3 billion, an all-time high in the survey’s 13-year history (and about $900 million more than last year). Nearly 140 million Americans plan on celebrating the holiday, with an average spend of $37.92 per person. The most popular way Americans will celebrate the holiday is to wear green (82% of celebrants), followed by making a special dinner (31%), attending a party at a bar (27%), and decorating their home (23%). Personally, I’m planning a traditional corned beef and cabbage dinner, with a Guinness or two to kick off my weekend.

And now, on to the news.

Amazon is at it again, as it continues to move towards becoming a global freight forwarder and logistics company. I have written about the company’s move to lease cargo jets to move merchandise around the country between its fulfillment centers and its newly added capabilities of reserving space on ships from China and acting as a global freight operator and logistics organizer. Now, Amazon is planning to offer its sellers in China the ability to fly their goods internationally as air cargo, according to an Amazon Logistics site. This move puts the company in more direct competition with global freight companies such as UPS, FedEx, and DHL. It is all part of a growth strategy that reduces the reliance on parcel carriers to handle their shipments. It is certainly a bold move for Amazon in its quest to become a global logistics company.

Amazon has also been slowly moving in to the brick and mortar environment, announcing plans to open its 10th brick and mortar bookstore later this year. New permit documents reveal that Amazon is not just looking at bookstores for its brick and mortar business. The latest plan is for an “AmazonFresh Pick-Up” concept. According to the plans, each store would have an awning where customers would park while Amazon employees picked, packed, and brought out the order. Amazon has not yet publicly acknowledged the stores, but the plans are out there and construction has begun.

UPS is building out its natural gas fleet. The company is building six additional compressed natural gas (CNG) filling stations and adding 390 new CNG tractors and trucks, as well as 50 liquefied natural gas trucks as part of its alternative fuel fleet. The company is also investing $90 million on vehicles that run on natural gas and the infrastructure required to support them. This is all part of UPS’s mission to continue to use alternative fuel, building on last year’s $100 million investment in CNG fueling stations and trucks. A 2015 report from the U.S. Department of Energy estimated the use of natural gas as vehicle fuel could reduce greenhouse gas emissions by 6 percent to 11 percent. The company now has more than 4,400 natural gas vehicles in its fleet to go along with a network of natural gas fueling stations.

Automated trucks and platooning capabilities have been a very popular topic lately, and Volvo is pushing forward with more testing. Volvo Trucks announced Monday it completed a successful demonstration of a partially automated truck platoon in California, leveraging Cooperative Adaptive Cruise Control technology to run a three-truck platoon from the Port of Los Angeles along Interstate 110. The company ran a platooning test of three tractors hauling cargo containers in real-world conditions, which is an important part of any test. The three trucks traveled at speeds of 55 mph, and maintained a following distance of 50 feet, which is closer than normal for on-highway trucks. Forward-looking sensors and vehicle-to-vehicle communication helped maintain speed and spacing without driver intervention, Volvo says. Staged and unplanned vehicle cut-ins also occurred, allowing the platoon to handle common traffic situations.

While Amazon is looking to move into the grocery pick-up space, grocery heavyweights are expanding their home delivery options. Meijer, for example, has partnered with Shipt to test deliveries in Michigan last fall. As a result, the company is expanding its grocery delivery options to six mid-west states including Illinois, Indiana, Kentucky, Michigan, Ohio and Wisconsin. This encompasses 230 stores that will now have delivery capabilities. Walmart has announced plans to double the number of locations that offer grocery curb-side pick-up; it has also started a free, two-day delivery service for groceries. Kroger has announced plans to use Uber drivers to deliver groceries. This is an another example of retailers looking at crowd-sourced delivery models, which is gaining traction. All in all, more consumers do not want to leave their home to buy groceries, and the market will continue to expand.

According to the monthly Global Port Tracker report released by the National Retail Federation and Hackett Associates, all the talk in Washington about tariffs and border taxes are not impacting imports. The report indicates that imports at the nation’s major retail container ports should see double-digit year-over-year increases for the next two months. This is a result of the growing economy driving demand for imports. Ports covered by Global Port Tracker handled 1.67 million Twenty-Foot Equivalent Units (TEU) in January, up 12.5 percent over last year. February was estimated at 1.61 million TEU, up 4.2 percent from last year. March is forecast at 1.46 million TEU, up 10.6 percent from last year; April at 1.59 million TEU, up 10.1 percent; May at 1.67 million TEU, up 2.9 percent; June at 1.66 million TEU, up 5.5 percent, and July at 1.71 million TEU, up 5.2 percent.

And finally, the for-hire trucking industry added more than 10,000 jobs in February, wiping out a sizeable loss seen in January and pushing industry employment to a new high. The Department of Labor in its monthly Employment Situation Report indicated the for-hire industry’s employment grew by 10,600 jobs, the biggest month gain since December 2014.

That’s all for this week. Enjoy the weekend, your St. Patrick’s Day celebrations, and the song of the week, Whiskey in the Jar by the Irish Rovers.