This Week in Logistics News (May 12 – 18)

logistics newsI spent the beginning of the week (for the second straight week) in Orlando. This time, I was speaking at the Pitney Bowes Retail (R)Evolution conference. The conference as a whole was a great event, with the two days splitting up the complete customer shopping journey and overall experience. One of the highlights (aside from my participation in a fulfillment automation panel of course) was the keynote from Kevin O’Leary, AKA Mr. Wonderful from Shark Tank. His keynote looked at lessons from an entrepreneur and what should matter most for brands looking to increase customer acquisition and loyalty. One of the big points he made was about the firestorms that seem to follow brands on social media. Namely, if a customer feels burned, often times there is no repairing that relationship. However, the electronic trail of trying to make it work can certainly help the brand in the long run, as proactive attempts to fix things go a long way with other customers. He wrapped up with five key things that effective managers have in common when it comes to running a business. First, they have better time management skills. Second, they set achievable goals. Third, they maintain cultures that have less employee turnover. Fourth, they assimilate feedback to enhance customer service. And fifth, they have brand is everything core principle in their business. When you look at how those five pieces work together, it certainly shows a path for success. And now on to this week’s logistics news.

Uber Technologies is looking to test a new delivery service with drones in San Diego, CA. UberEats, which is now the world’s largest food delivery platform, plans to deliver food via drones as part of a wide-spread commercial test program approved by the US government. The test program, which was approved by the US Department of Transportation, chose 10 state, local, and tribal governments and a handful of companies, including Alphabet Inc., FedEx, Intel, Qualcomm, and Uber, to work together on commercial drone testing. Uber CEO Dara Khosrowshahi believes that with the addition of drones, UberEats will be able to deliver food in anywhere from 5 to 30 minutes. It will be interesting to see how the drones are able to navigate crowded areas and apartment buildings, where deliveries can be more difficult.

Target is cutting $2 off of delivery for its next-day delivery service Restock. The service aims for next-day delivery on essential household items such as laundry detergent, cereal, and diapers. The service is also being offered free of charge to Redcard holders, who also receive free shipping on orders. Restock, which was initially tested in the Twin Cities and has since expanded to 10 markets, is going nationwide to about 60 major metro areas, and will reach nearly 75 percent of the US population. This comes on the heels of Amazon’s announcement that it is raising the price of Prime membership by $20 and the price of Amazon Pantry. The move by Target puts it in the conversation for price and shipping speed with Amazon and Walmart.

Amazon Fresh has informed local third-party vendors that they will no longer be able to sell their goods on the Fresh platform. Previously, third-party vendors could sell items that filled gaps in Amazon Fresh offerings, and would be delivered with a customer’s Fresh order. The program will end on May 30, giving these vendors less than two weeks to find alternatives for selling their goods. The impetus behind the move is Amazon’s focus on making Prime Now its main grocery platform. The acquisition of Whole Foods is a major factor in all of this, as Amazon would rather have Whole Foods supply all of its grocery items, rather than using third-parties.

UPS is reviving a program that offers third-party logistics providers (3PLs) to move their customers’ shipments through UPS’ parcel platform at an LTL rate. The program, named “Ground Freight Pricing Through General Pricing,” breaks down an LTL pallet and moves it through the small package operation for processing and delivery. The program works best for shippers that are not moving enough volume to justify the expense of LTL rates, as their pallets are not full enough and they end up paying a disproportionate share of the truck cost. The pilot phase is in its eighth month, and there is no set timetable for rolling out it to more 3PLs. The product is being sold by UPS Freight, UPS’ LTL subsidiary.

A coalition of safety advocates has urged a House panel to avoid any push to allow larger and heavier trucks to operate on American roads. The coalition pressed Rep. Mario Diaz-Balart (R-Fla.), the chairman of the House Appropriations Committee’s subcommittee on transportation, housing, and urban development, and Rep. David Price (D-N.C.), the panel’s ranking member, to avoid any “riders” on an upcoming appropriations bill that would increase the length of twin tractor-trailers from 28 feet to 33 feet. The prime argument is that bigger trucks will simply make roads unsafe, as motorists will have a more difficult time navigating around the trucks and the drivers themselves will have a more difficult time operating them. The letter features more than 50 signatories, including truck drivers, members of law enforcement, and trade associations.

And finally, cargo theft recording firms SensiGuard and CargoNet released their first quarter reports on cargo theft in the United States. Both firms have reported a decline in the number of thefts and the overall value of these thefts for the first quarter. CargoNet reported a total of 159 cargo theft events in the US and Canada during 2018’s first quarter, while SensiGuard reported 115 cargo thefts. Both firms reported a more than 20 percent drop in thefts year-over-year for the first quarter. CargoNet’s report states that food and beverage loads ranked as the most-stolen, but thefts of food and beverage items decreased 39 percent year-over-year. SensiGuard reports that electronics were the most-stolen items in the quarter, accounting for 24 percent of total thefts. Unsecured parking areas were the most prevalent location for thefts, accounting for 92 percent of all thefts that a location was noted. Thefts from secured parking and warehouse/distribution center locations each accounted for 4 percent of the total.

That’s all for this week. Since Nick Pellegrino, who moderated our panel, didn’t get the song he wanted as our walk-up music, I’ll make it the song of the week. Have a great weekend and this week’s song, Who Are You by The Who.