This Week in Logistics News (October 21 – 27)

logistics newsWe are in the final weekend before one of my favorite holidays: Halloween. This year, I actually have plans to go to a costume party for one of the first times since having kids. I was stuck when it came to a costume as I looked back at some of my classics: Bob Ross, Richard Simmons, Brett Michaels, and a handful of others. Now that I have three kids, we are spending more than usual on both costumes and decorations. I guess that puts me right in line with the general trend for Halloween shopping. According to the annual survey produced by the National Retail Federation and Prosper Insights & Analytics, Americans will spend a record $9.1 billion on Halloween this year. The figure is up 8.3 percent from last year’s previous record of $8.4 billion. This is an average of $86.13 per person, up from last year’s $82.93. According to the survey, consumers plan to spend $3.4 billion on costumes (purchased by 69 percent of Halloween shoppers), $2.7 billion on candy (95 percent), $2.7 billion on decorations (72 percent), and $410 million on greeting cards (37 percent). It seems like every holiday is getting more and more expensive these days. And now, on to the logistics news.

While Amazon will not publicly name the cities that have supplied official bids for its new headquarters, the company has released that nearly 240 bids were received. Among those cities that have made their bids public are New York, Boston, Atlanta, Austin, and Nashville. The project is expected to take 20 years and $5 billion to complete. The 238 proposals came from 54 states, provinces, districts, and territories, with only 7 US states not supplying a bid. There is no timeline in place for when the list will be cut down or a final decision will be made. However, the lucky city can expect an influx of 50,000 new jobs. Some of the key criteria for selecting a city include availability of software developers and other technology talent, good transportation options, cultural fit, and the ability to move into a phase-one site as early as 2019.

UPS has announced that it is launching a pilot project using cargo bikes for package deliveries in Toronto. The goal of the cargo bikes is to decrease congestion on city streets and mitigate “traffic nightmares.” UPS has used cargo bikes in other countries around the world, but this marks the first time the company will run a pilot in Canada. According to UPS, the bike weighs around 475 pounds, and has a payload capacity, including the driver, of 900 pounds, holding up to 50 packages. While the bikes are too large for bike lanes, they will still operate on city streets in the hopes of reducing greenhouse gas emissions.

The White House is set to ease drone regulations. The new program will test oversight of drones in shared airspace. Current FAA regulations have all but eliminated drones for commercial uses such as last mile deliveries. Under the new rules, local communities would have oversight of drones flying under an altitude of 200 feet, while anything over that altitude would defer to the FAA. This new rule could potentially open up the skies to drone deliveries to residences and businesses. This is especially interesting given the extent of interest from both the general public and those companies investing in drone technology, including Amazon, Google, UPS, and number of others.

The new Apple iPhone X received a lot of attention and demand with its announcement. However, the company is expecting total shipments of around 20 million units, which is about half the planned amount for the year. This is largely due to a manufacturing problem which has severely limited the supply. At the beginning of mass production, defects occurred in the bonding process for the display. Although the problem was largely resolved around July, problems continued in assembly of the face authentication module. Manufacturers were only able to improve the first pass yield toward the end of September.

Over the last six weeks, Kindred, a San Francisco-based robotics and artificial intelligence startup, has been testing its human-assisted robotic arms at a Gap warehouse. The robots are guided by custom software but built by industrial robotics manufacturer Fanuc, and are all operated with a blend of AI-assisted automation and human piloting. Kindred has focused on teaching its robots to move similarly to the human arm and hand, which contain a large number of intricacies. The company’s robot arm is designed only to do the most tedious tasks a human warehouse worker might perform, such as sorting a bundle of products by hand, grasping one item, scanning its barcode, and sending it on its way to the final destination.

Indian supermarket chain D-Mart is entering the world of online commerce. This is not a surprising move given Amazon’s plans for its Indian presence. The pilot program allows customers to order items online and have them delivered to their front door for a fee, or to a neighborhood kiosk for free. For home delivery, they will have to pay 3 percent of the bill or Rs 49, whichever is higher. In a strategic move, the kiosks are located in neighborhoods where D-Mart does not have a physical presence. The market for online grocery in India is relatively immature, but with D-Mart and Flipkart leading the way, not to mention start-ups like BigBasket and Grofers, the market is poised to grow.

And finally, Chinese e-commerce giant Alibaba‘s delivery arm Cainiao Network unveiled a flagship automated warehouse in Huiyang district, Huizhou city in South China’s Guangdong province. It is among several automated warehouses that Cainiao plans to set up across China for the upcoming “Singles’ Day” shopping period. The warehouse has around 200 AGV (Automated Guided Vehicle) robots, which can help process more than one million shipments per day. This is yet another reminder of the scale of robotics within the warehouse today, and the impact these machines can have. It also shows what the future of the warehouse looks like.

That’s all for this week. Enjoy the weekend, and the upcoming Halloween holiday. For the song of the week, I am choosing a classic Halloween song, which happened to be a song my very short-lived band SlapJack Fever played at one of our only shows (which happened to be at a Halloween party), the Monster Mash by Bobby “Boris” Pickett. Although, given our “jam band” tendencies, it sounded nothing like the original. Enjoy!

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