This Week in Logistics News (August 5 – 11)

Wednesday marked the 22nd anniversary of the Grateful Dead’s Jerry Garcia’s death. Whether you are a fan of the Grateful Dead, or any of the large number of side projects he worked on, Jerry Garcia is a cultural icon and a very talented guitarist / songwriter. I actually never saw him play, and outside of hearing Touch of Grey hit mainstream radio in the summer of 1987 while on a West Coast road trip with my family, I knew nothing of the band or the man. That changed when I went to college, and after his death, I saw multiple variations of the surviving members play. I was never a huge fan of the band, but there were certainly some songs that I appreciated. I actually prefer his guitar and mandolin duo with David Grisman to the Dead. Either way, it is hard to believe that 22 years have passed since he left this world.

And now, on to the news.

So far this year, Best Buy has spent more than twice what it did and all of 2016 and Target has nearly equaled its 2016 spending on lobbying. The reason for the increased lobbying spend is to kill the border adjustment tax (BAT) put forth as part of the House Republicans “Better Way” tax reform plan. The BAT would have required American importers to pay a hefty tax on sales of foreign-made inventory. However, the companies would not be allowed to deduct the cost of that inventory. This could mean an increase of up to 20 percent in what American companies would need to pay the government. Thanks in large part to the money put into lobbying efforts, Speaker of the House Paul Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ky., joined Trump administration officials to announce that they had “set aside” the BAT to concentrate on other kinds of tax reforms.

Office Depot has announced plans to offer same day delivery in Atlanta, Los Angeles, and the Miami/Fort Lauderdale area, with more cities to be added before the end of the year. This is in large part due to the launch of same day delivery from their main rival, Staples, as well as Amazon’s increase in same day deliveries. Customers shopping at OfficeDepot.com will be able to choose same-day delivery windows of 8-11 a.m., 11 a.m.-2 p.m., 2-5 p.m. or 5-8 p.m. Office Depot is waiving the delivery fee during the introductory period. Crowd-sourced delivery company Deliv will handle the same day fulfillment.

While its main rival has announced plans to impart surcharges during the holiday season, FedEx has announced it will skip holiday surcharges on most orders. This decision is a gamble by the company, hoping that the projected up-tick in volume over the holidays outweighs the need for surcharges. Given the general public’s unwillingness to pay extra for shipping, this move could be a way for FedEx to take away some of the holiday business from UPS. However, FedEx will charge extra fees for deliveries requiring additional handling, which include larger and irregularly shaped packages, as well as oversize packages, which now make up 10% of its ground-shipping volume.

Walmart has joined a new program that rates companies on their use of chemicals. This is a serious move that puts added pressure on the CPG industry to better police its products. Walmart joins more than two dozen companies participating in the Chemical Footprint Project, which seeks to help companies root out dangerous substances from the products they sell. Consumer awareness is the key driver behind the initiative, as they become more aware and concerned about how their favorite products are sourced and manufactured, and what the potential long-term risks are when it comes to ingredients.

I’ve written about JD.com’s development of drone capabilities in the past. Well, now the second-largest e-commerce player in China has launched the first unmanned sorting center. The sorting center launched in Kunshan, Jiangsu province, and, according to JD.com, it can sort around 9,000 parcels every hour at a coverage rate of 100%. JD has developed its own intelligent equipment management system, including unmanned automated guided vehicles for loading and unloading goods. In a statement, JD.com said:

“The whole process, from parcel sorting to loading onto the trucks, are fully automatic in the Kunshan center, which is also the first of its kind in the world.”

Amazon is at it again with their drones. The company’s latest patent filing is for “ground-based mobile maintenance facilities for unmanned aerial vehicles.” This is essentially a hub that is dedicated to accommodating, loading, launching, receiving, and maintaining the delivery drones. According to the patent, “intermodal vehicles could be linked to locomotives, container ships, road tractors, or other vehicles, and equipped with systems for loading one or more items onto the aerial vehicle. These hubs could also launch or retrieve drones while the vehicle is in motion.”

And finally, while speaking of drones, the state of Kansas has become the first state to adopt a system that lets drone operators, both commercial and recreational, easily share data that can ensure safe use of airspace. The idea is to prevent both drone traffic jams as well as in-air collisions. The technology, built by Santa Monica, CA start-up AirMap, enables anyone flying a drone to file a flight plan. It also enables anyone else wanting to use the airspace to see who else is flying in it in real time, communicate with them, and to alert people or businesses when flying is unsafe. As the possibilities of drone deliveries become more real every day, the state of Kansas is certainly looking to be an innovator.

That’s all for this week. Enjoy the song of the week, Jack-a-Roo by Jerry Garcia and David Grisman.

Leave a Reply

Your email address will not be published. Required fields are marked *