This Week in Logistics News (November 11 – 17)

logistics newsOn Wednesday, a painting by Leonardo da Vinci was sold at auction at Christie’s in New York City for a record-shattering amount. While there are only about 20 known surviving da Vinci paintings, “Salvator Mundi” is the only one that is in private hands. The painting was once thought to be a copy, and sold for about $60 in the 1950’s. It resurfaced at an estate sale in 2005, and a consortium of American art dealers acquired the badly damaged and partly painted over painting for less than $10,000. The consortium restored the painting and authenticated it as a work by da Vinci, although some in the art community remain skeptical. In 2013, Russian billionaire Dmitry Rybolovlev bought it for $127.5 million in a private sale. On Wednesday, with a guaranteed price of $100 million, the bidding began. After 19 minutes, the gavel fell, and an unnamed bidder had paid $400 million, plus another $50 million in fees to Christie’s. It is amazing and unbelievable to see the value of a painting increase from $60 to $450 million in a mere 65 or so years. Let’s hope I can get that kind of return on my 401K…

And now, on to the news.

In one of his first moves as President of the United States, Donald Trump officially withdrew the US from the Trans-Pacific Partnership (TPP). In its initial incarnation, the US’ involvement was a requirement for ratification. With Trump’s withdrawal, the TPP fell apart. Earlier this week, a group of eleven countries announced that they had committed to resurrecting the TPP without the US. The new deal still needs to be signed and ratified by each country involved, which is something that could happen as soon as early next year. Some of the countries involved include US allies Japan, Canada, and Mexico. Collectively, the countries account for about one-sixth of all global trade. According to Taro Kono, Japan’s foreign minister, “the agreement will serve as a foundation for building a broader free-trade area across Asia.”

Walmart is joining eight other retailers in the United States Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP) pilot. Back in September, I wrote about Walmart’s plan to allow SNAP recipients to shop online. In this pilot, the cards could not be processed online; instead, after an order was placed, the recipient would need to pick-up the groceries. The new program, run by the USDA, is slated to begin in 2018. The original launch was delayed to update the infrastructure required to ensure secure use of the SNAP transactions online. The SNAP benefits cannot be used to cover added cost such as delivery or convenience fees. Walmart is joined by Amazon, Dash’s Market, FreshDirect, Hart’s Local Grocers, Hy-vee Inc., Safeway, ShopRite, and Wright’s Markets Inc.

UPS is making a push into green delivery initiatives. This isn’t the first time the company has made such a move. Back in May, UPS began testing a medium-duty delivery truck that uses gaseous hydrogen to power an electric battery and motor. In its latest initiative, UPS will partner with the New York State Energy Research and Development Authority (NYSERDA) to convert up to 1,500 diesel trucks to new all-electric systems. UPS and transportation energy company Unique Electric Solutions (UES) LLC will collaborate on the project, and if all goes according to plan, the electric trucks will begin delivering to routes in New York next spring. According to the company, the new electric trucks will be up to 20 percent more efficient than their diesel counterparts.

Back in June I wrote an article about how companies like GEODIS and Lowe’s were testing lift-assist technology within warehouses, specifically around the use of exoskeletons. Ford is now running a pilot for assembly line workers in two of the company’s US factories. The workers are using the EksoVest, which is an upper body exoskeleton manufactured by Ekso Bionics. The pilot will test how much the company can reduce back and shoulder injuries from the repetitive tasks associated with life on the assembly line. Ford estimates their workers lift their arms about 4,600 times per day, or about 1 million times per year. Unlike other powered exoskeletons, the ones in use by Ford is unpowered and does not have any robotic components. Instead, it elevates and supports a worker’s arms while the worker is performing overhead tasks, and provides adjustable lift assistance of 5 to 15 pounds per arm.

There is a serious shortage of customs inspectors at US ports which is slowing down operations and could impact the global supply chain. The Association of American Port Authorities (AAPA) has called on the Customs & Border Protection agency (CBP) as well as Congress to secure adequate allocation of resources to the ports. The AAPA has noted that both cargo and passenger volumes at US ports has risen steadily while the number of customs inspectors has remained flat. Add in the rise of ultra-large ships, and the problem becomes more pronounced. The increased volume slows down the flow of goods through the ports, which puts a strain on delivery timeframes and threatens to disrupt the entire supply chain. The CBP has said it could use 500 additional employees just on the maritime side. With the holiday season rapidly approaching, this could put a serious dent in retailer’s holiday plans.

Speaking of the holiday rush, XPO Logistics has completed the opening of eight new last mile logistics hubs in preparation for Black Friday. This puts XPO’s North American last mile hubs at an impressive 53-count. Historically, the last mile has been the most expensive and challenging aspect of delivering packages. As companies expand their last mile efforts, the process becomes less daunting. The opening of the last eight last mile hubs are part of XPO’s announcement that it plans to expand to 85 last mile hubs by 2018. The expansion will position XPO’s last mile footprint within approximately 90 percent of the US population. The newest hubs are located in Birmingham, AL; Buffalo, NY; Jacksonville, FL; Los Angeles, CA; Milwaukee, WS; Savannah, GA; Tulsa, OK; and Washington, DC.

That’s all for this week. Enjoy the weekend and the song of the week, Money Talks by AC/DC.