This Week in Logistics News (March 10 – 16)

logistics newsSásta Lá Fhéile Pádraig! Or, for those of you that don’t speak or read Gaelic, Happy St. Patrick’s Day! While the holiday originated as a celebration of the traditional death date of Saint Patrick (c. AD 385–461), the foremost patron saint of Ireland, it has certainly morphed into something else. It is now a day to celebrate all things Ireland, and as the saying goes, everyone is a little bit Irish on St. Patrick’s Day. This also means that Americans are ready to spend. Just how much? Well, like most every holiday, Americans are ready to spend a record amount on the holiday. According to the National Retail Federation (NRF), which releases an annual St. Patrick’s Day survey on consumer spending with Prosper Insights & Analytics, Americans plan to spend a record $5.9 billion this year; this is $600 million more than last year. The survey found 50 percent will purchase food, 41 percent beverages, 31 percent apparel or accessories, 26 percent decorations, and 16 percent candy. Of those making purchases, 38 percent will go to grocery stores, 31 percent to discount stores, 20 percent to department stores, and 19 percent to bars or restaurants. So, if you celebrate, Happy St. Patrick’s Day! And now, on to this week’s logistics news.

Walmart has announced that it is expanding its grocery delivery service. According to the announcement, the company will expand its online grocery delivery service to more than 40 percent of US households by year-end. This is an increase from six markets to over 100 markets, with 800 stores on board. This is a big move to combat Amazon; however, unlike PrimeNow, the service doesn’t require a subscription of any kind – only a minimum order of $30. Customers place their orders via Walmart’s dedicated grocery website, and select whether they want delivery or curb-side pick-up. This comes on the heels of Walmart’s announcement that it is expanding its grocery delivery service into Canada.

Speaking of grocery delivery, Kroger is building out its home-delivery network as well. The company announced that it is expanding its partnership with Instacart to increase delivery areas in 2018. Currently, Kroger’s home delivery service is available in 45 markets. The company delivers from more than 870 stores in the US while providing curbside pickup at nearly 1,100 locations. Kroger expects to add 500 locations to that list in 2018. Kroger has 2,800 stores across the US; the latest delivery expansion means that nearly half of its stores will offer a home delivery service.

Earlier this week, I wrote an article about the practicality of using drones for last mile deliveries. Amazon has been investing in drone research for some time, and has won a number of patents. Its latest patent would allow its drones to drop packages from as high as 25 feet safely onto your patio. The patent in question is for cushioning packages with inflatable air bags that will keep the packages safe. This will also allow the drones to use less energy by minimizing changes in flight altitudes. According to the patent, “the drone could inflate the ‘airlift package protection air bag’ with a gas canister or even just from the downdraft from the aircraft’s propellers, while in transit or near a drop location, such as a backyard or patio of a residential dwelling.” The air bag would also be deployed automatically if the drone becomes unresponsive to controls or loses power.

In last week’s news round-up, I reported that Uber has upped its testing of its self-driving vehicles. In fact, the company has been sending self-driving trucks on delivery runs across Arizona for the last three-plus months. Waymo’s self-driving trucking program is about to take a step forward as well. The company is launching a pilot program in Atlanta to focus on self-driving trucks and automated logistics. The pilot will be done with Google (another Alphabet company), with Waymo’s autonomous trucks hauling cargo to Google’s Atlanta-based data centers. These autonomous big rigs, which use the same sensor suite that Google uses on its autonomous Pacifica minivan test platform, have been testing in both California and Arizona one the course of the past year.

President Trump is at it again, looking to impose stiff tariffs on imports. This time, the President is seeking to impose tariffs on up to $60 billion of Chinese imports and will target the technology and telecommunications sectors. While the tariffs would be chiefly targeted at information technology, consumer electronics, and telecoms, they could be much broader and the list could eventually run to 100 products. Trump is targeting Chinese high technology companies to punish the country for its investment policies that force US companies to give up their technology secrets in exchange for being allowed to operate in the country. Much like the EU’s response to Trump’s tariff proposal on steel and aluminum, Chinese foreign ministry spokesman Lu Kang said “if the United States takes actions that harm China’s interests, China will have to take measures to firmly protect our legitimate rights.”

Speaker Paul Ryan has said that Congress will tackle an infrastructure overhaul in multiple pieces of legislation this year. This deals a blow to President Trump’s push for a $1.5 trillion rebuilding package, as Ryan’s plan is to do this in about five or six different bills. Ryan pointed to two “must-pass” pieces of legislation – the FAA reauthorization and the omnibus spending package lawmakers are currently negotiating ahead of a March 23 deadline as priorities. Ryan referred to the omnibus as a “down payment on the infrastructure plan.” The Fixing America’s Surface Transportation Act, known as the FAST Act, expires at the end of the 2020 fiscal year.

And finally, according to DAT Solutions, which operates the DAT network of load boards, flatbed load availability and rates made big gains and the flatbed load-to-truck ratio hit a new record during the week ending March 10. The number of flatbed load posts increased 10.8% while truck posts dipped 1% compared to the previous week. Flatbed freight includes construction materials, machinery, and other heavy loads. The national average flatbed rate was $2.50/mile, 11 cents higher compared to the previous week.

That’s all for this week. Enjoy the weekend, St. Patrick’s Day, and the song of the week, Medley by The Pogues.