This Week in Logistics News (May 6 – 12)

It’s been busy around here. I spent the week in Las Vegas for the Manhattan Associates user conference. The conference theme was “active solutions for an active world.” And that is exactly what Manhattan showcased. While I will certainly have an in-depth write-up and a case study story to share later, I’ll leave you with a few points. First, Manhattan has launched a first of its kind “omni-channel as a service” offering. It’s a combination of order management, POS, clienteling, and store inventory and fulfillment. Second, much like the BluJay conference last week, Manhattan brought out the big names, most notably with Sugar Ray Leonard delivering a keynote presentation on his life and how going the extra mile can result in success. There was also an incredibly fun customer event at Drai’s Rooftop Beach Club. I’ll report more later, but since I am still recovering from a red eye flight back to Boston, let’s move right into the news.

Target has announced that it will test a new next-day delivery service named Target Restock. The service is currently being tested with Target employees ahead of an official customer test. The program is designed to offer an easy way to shop online for household essentials which will arrive the day after you place your order. The program is focused on household items, beauty and personal care products, and dry goods, rather than fresh groceries at this time. To use Restock, customers will visit a dedicated online storefront for the service where they can shop over 8,000 products and add them to a box that will be shipped to their home for a flat fee. The boxes Target offers for Restock can hold up to 45 pounds and will arrive the next day if the order is placed by 1:30 PM.

Gillette, which is owned by Proctor & Gamble, is revamping its subscription-based service for razors. The new service will be named “Gillette on Demand” and will let customers send a text message to receive a razor order on-demand. Additionally, customers subscribe to a service which will give them every fourth order for free. This is a direct move in response to Dollar Shave Club, which was acquired by Unilever. The service will feature a traditional subscription model where customers receive razors on a regular basis, but will also enable them to text an on-demand order, which will be delivered within three business days. This is a reactive move to the company losing market share to new online competitors, but it could be a good move that will bring customers back.

Seven-Eleven Japan is introducing electric trucks to deliver products to its stores. This is in direct response to rising distribution and driver costs. According to the company, the electric trucks can reduce the operating costs of delivery vehicles by approximately 40% compared to the diesel ones currently used. The compact electric trucks will start being mass produced by Mitsubishi Fuso Truck and Bus as early as this fall. Seven-Eleven is expected to begin operating 25 of the vehicles as soon as this year, mainly in the Tokyo area. While the price of the new electric trucks is higher than traditional diesel trucks, Seven-Eleven expects to make up the difference in three years from electric vehicle subsidies earned when purchased and lower operating costs.

The Global Port Tracker, which is produced by Hackett Associates for the National Retail Federation, is projecting year-over-year volumes increases at the nation’s major retail container ports in the coming months. Specifically, ports should see a steady increase through the summer and fall. Ports covered by the Global Port Tracker handled 1.53 million TEUs in March, the latest month for which after-the-fact numbers are available, up 6.8 percent month-over-month and 15.8 percent year-over-year. Looking ahead, the report forecasts the following for each month across ports covered by the Global Port Tracker, compared to the same month in 2016: April up 8.3 percent; May up 2.6 percent; June up 3.3 percent; July up 3.1 percent; August up 1.6 percent; and September up 3.6 percent.

Amazon has lowered its free minimum shipping threshold back to $25. This marks the second time this year that Amazon has lowered the spending threshold to qualify for free shipping – In February from $49 to $35, and now from $35 to $25. This is all part of the larger battle with Walmart to ensure customers are satisfied with fulfillment options. Walmart’s current spend threshold is $35, but guarantees two-day delivery, while Amazon has no such option, unless you are a Prime member. In other “free shipping” news, Target just bumped its spending threshold from $25 to $35.

And finally, the Port of Savannah welcomed the largest cargo ship ever to visit ports on the east coast. The COSCO Development arrived Thursday at the Port of Savannah to the cheers of onlookers. Just how big is the ship? The Statue of Liberty and Washington Monument could fit end to end along its deck…and there would still be room for Big Ben. This ushers in a new era of giant cargo ships entering US ports, which the industry has anticipated for years. However, there is a problem with this new era. Without significant upgrades to the infrastructure, the ports will not be able to accommodate the supersized ships. It is the largest ship to pass through the Panama Canals expanded lane, which shows that shippers are not willing to wait for ports to make upgrades. It will be an interesting development to watch.

That’s all for this week. Enjoy the weekend and the song of the week, Elvis Presley’s Viva Las Vegas.

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