This Week in Logistics News (June 10 – 16)

According to the National Retail Federation (NRF), Americans are anticipating spending more on Father’s Day gifts this year than any other year. So just how much are Americans looking to spend? Let’s just say that the amount is insane. To be more specific, the NRF is expecting total spending to hit $15.5 billion this year, which is $1.2 billion more than last year. This isn’t overly surprising given the fact that Americans seem to spend more every year for every holiday. The NRF’s latest survey indicates that the biggest areas where families will spend money are on special outings like a ballgame, concert, or dinner. In a not so close second, third, and fourth place, Americans plan on spending money on clothing, gift certificates, and consumer electronics. All I want to do is hit the pool and grill this Father’s Day – no gifts required.

And now, on to the news.

Last week I mentioned that there could be a huge disruption for air freight shipped to the Middle East as several countries have cut ties with Qatar. As a result of Saudi Arabia, the United Arab Emirates, Bahrain, Egypt, Yemen, and Libya cutting ties with Qatar, the country has begun shipping cargo through Oman to bypass the Gulf countries that have cut off sea routes. Qatar’s port authority said its cargo will go through Sohar, as well as Oman’s port at Salalah, bypassing the need to dock in any of those countries that have cut ties. Global shipper Maersk already has said it will begin using Salalah for its shipments to Qatar.

The US government has announced that it is close to exporting beef to China for the first time since 2003. The shipments result from the US – China Comprehensive Economic Dialogue co-chaired by US Commerce Secretary Ross and Treasury Secretary Steven Mnuchin for the US and Vice Premier Wang Yang for China. The commitment to open China’s market to US beef was part of the US – China 100-Day Action plan announced on May 11, 2017. This opens up an enormous market for US cattle producers as China’s market for beef has exploded over the last few years. Over the last five years, China’s imports on beef have increased from $275 million to $2.5 billion dollars.

Instacart has had a busy week. First, in a development that has been hailed as a “milestone e-commerce partnership,” the company has partnered with Wegmans Food Markets to launch online shopping and delivery capabilities. The initial trial will only be available in Wegmans stores in Northern Virginia and Maryland, and will allow customers to order groceries online and have them delivered in as short as an hour. This marks the first time that Wegmans will introduce same-day delivery for groceries. Given their presence in the Eastern US, this could prove to be a huge market for both Wegmans and Instacart.

Instacart is also partnering with Ahold’s Stop & Shop brand to provide same day delivery service for e-commerce orders. In some ways, this appears to conflict with Ahold’s ownership of PeaPod, which has been delivering groceries for Stop & Shop and Royal Giant Food since 1989. However, according to a Stop & Shop spokesperson, the Instacart partnership would “add to the carousel of convenience for our customers.” This brings about another option for Stop & Shop customers on top of store pick-up, self-checkout, and other options for delivery.

Speaking of online food delivery, Grubhub has just announced that it has acquired Foodler / Dashed. Dashed was created as a food delivery service in 2009 by Founder and CEO Phil Dumontet, partnering with his brother, Christian, who developed Foodler in 2004. In April, Lowell, MA became the sixth city serviced by Dashed, which provides delivery for more than 800 restaurants throughout New England. This will be a great opportunity for GrubHub to advance its presence in the Northeast market, especially Boston, as Grubhub has not been the leading player in the space. While details are limited, the agreement is an all-cash transaction, came about quickly, and should close quickly.

DHL is pushing its innovation plans ahead to become a major player in the e-commerce space. The company’s latest e-commerce investment is in e-commerce electronic parcel delivery lockers in Nigeria. The computerized parcel lockers are parcel and package delivery lockers located at DHL facility in the country to enhance the delivery of packages. The lockers are designed to speed up delivery times while reducing courier delivery times. This will especially aid in the cross-border e-commerce boom.

And finally, diesel prices have dipped to the lowest point of 2017. A 4-cent decline in diesel fuel prices during the week ending June 12 pushed fuel prices to their lowest point in 2017, according to the Department of Energy’s weekly report. The U.S.’ average price for a gallon of on-highway diesel now stands at $2.524, the lowest diesel has been since early December. Prices have remained flat throughout 2017, not rising above $2.60 per gallon or falling below $2.53 per gallon until this week.

That’s all for this week. Enjoy the weekend and the song of the week (one of my Dad’s favorite in honor of Father’s Day), Good Vibrations by the Beach Boys.

 

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