This Week in Logistics News (April 15 – 21)

Patriots’ Day is one of the best days of the year in Boston. For those of you that don’t know what Patriots’ Day is, I’ll tell you. It is a state holiday commemorating the anniversary of the Battles of Lexington and Concord, the first battles of the American Revolutionary War. It is observed on the third Monday in April, and kicks off school vacation week. There are war re-enactments and parades to celebrate. It is also the date of the Boston Marathon, which is one of the greatest sporting events in the world. On top of that, the Red Sox play at 11am, so all the fans can pour out of Fenway Park into Kenmore Square to cheer on the runners. This year, it was 75 degrees with beautiful sunshine – a bit warm for the runners, but amazing for the spectators. In the words of Andy Williams, “it’s the most wonderful time of the year.”

And now, on to the news.

Even though President Trump announced America’s withdrawal from the Trans-Pacific Partnership (TPP) trade pact nearly three months ago, Japan is pushing ahead to revive the agreement without the US. Japan is attempting to get the other 10 nations to form a pact without US involvement. After a meeting between Japanese Prime Minister Shinzo Abe and President Trump, it became clear that the US would not object to such a deal, as the two sides discussed how to best promote trade and economic growth in the Asia-Pacific region. Most people believe that Japan, as the largest remaining economy in the partnership, would have to take the lead on rebuilding the TPP. Tokyo aims to have a TPP ministers meeting in Vietnam in late May to get everyone on board with proceeding. While it is possible, it will be an uphill battle.

Mexico has opened Latin America’s most technologically advanced shipping terminal in Lázaro Cárdenas earlier this month. However, President Trump’s ideas for trade barriers puts the terminal in a difficult position. Many large retailers see the port as a gateway between Asia’s factories and consumers in Mexico. They also see it as a shortcut to bypass the congestion at most West Coast ports, as there is a network of track operated by US railroad Kansas City Southern that goes as far north as Memphis, TN. However, with the proposed border adjustment tax, the additional costs on imports could make the use of the terminal cost prohibitive.

Robots are on the move again. Yelp Eat24 has begun testing delivery by robot in partnership with Marble in select San Francisco neighborhoods. Yelp Eat24 customers order as usual, either through the website or mobile app. During the check-out process, they are asked if they are OK with a robot delivery. Assuming they are, they receive a pin code to unlock the robot’s cargo tray. With on-board lidar, cameras, and ultrasonic sensors, as well as Nvidia’s Jetson TX1 AI supercomputers, Marble’s robots perceive the environment around them and navigate accordingly. There are still regulatory hurdles to clear before the robots can be used for meal delivery, but it is certainly an exciting possibility.

Walmart is back on the e-commerce acquisition bandwagon. After recent acquisitions of Jet.com, ModCloth, Moosejaw, and ShoeBuy, the company is in advanced discussions to buy Bonobos. Bonobos is a ten-year-old men’s fashion retailer, with a strong online presence. Originally formed to sell dress pants to athletic, fit men, the company has expanded to dress shirts, suits, and outerwear. Dress shirts start around $98, and suits start around $550. Based on the price and target market, there does not seem to be a lot cross-pollination opportunities, and it does not seem like a logical fit. But this is all part of Walmart’s digital strategy – to buy brands that appeal to a different target market. Terms have not been made public, but it will be interesting to see how this one plays out.

Apple is reporting that another three suppliers (Compal Electronics Inc., Sunwoda Electronic Co. and Biel Crystal Manufactory Ltd.) have pledged to using solely renewable energy to manufacture components for their products. This brings the total number of suppliers pledging to use renewable energy to seven. Apple has claimed that it now gets 96% of its energy from renewable sources such as wind and solar. Many companies have made a climate pledge as a means to reduce their carbon footprint. Apple and its suppliers expect to generate over 2.5 billion kilowatt hours per year of clean energy by the end of 2018, the company said in March. It’s building solar panels into the roof of its new headquarters and aims to sell excess energy in the market.

While nothing is official, multiple media outlets are reporting that Amazon is interested in buying BJ’s Wholesale Club. This comes on the heels of news that Amazon considered buying Whole Foods last fall. BJ’s has 214 warehouse clubs, as wells as 130 BJ’s gas stations. The company generated over $12 billion in total revenue last year. A purchase of the wholesale club would an interesting move, and one that Walmart and Sam’s Club would not like to see. Amazon would also look closely at where the distribution centers are, and compare it to their network. This could give them access to more DC’s to speed up the fulfillment processes.

And finally, Japan is facing a significant shortage of potatoes this year. As a result, there is a potato chip crisis occurring. Shelves are empty in many stores and popular brands have had to halt production. This has led to consumers stocking up when they can, and selling bags online. According to the Fuji News Network, 20 bags of the popular pizza-flavored chip “Pizza Potato” were being sold online for 120,000 yen ($1,100) on Thursday. To put that in perspective, the normal retail price of a bag of chips is less than 200 yen ($1.80). I like potato chips and all, but that is just ridiculous.

That’s all for this week. Enjoy the weekend and the song of the week, Dirty Water by The Standells.

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