And like that, my spring conference season is over. For three straight weeks I traveled to Florida attending user conferences, learning from peers, exploring innovative solutions, racking up JetBlue points, and spending lots of time in an Uber. Each of the three conferences, JDA, Pitney Bowes, and Manhattan Associates, offered dynamic content and a glimpse into the future of software. At JDA, the big announcement was around the introduction of the Luminate platform. Pitney Bowes explored the six stages of the consumer journey to understand how brands can create a better customer experience. Manhattan put the focus on extending its Manhattan Active solutions to the cloud to increase the speed of innovation, offer greater scalability and flexibility, be more available, and lower the total cost of ownership. Three great conferences in the books, but I’m ready to rest and enjoy the long weekend. And now, on to this week’s logistics news.
- JD.com plans to make courier robots smarter
- Amazon offers Map Tracking nationwide
- UPS hits customers with new fees for oversized packages
- Kroger considers all kinds of delivery options
- Shippers, truckers deal with soaring fuel and labor costs
- China trade war ‘on hold’ as Trump pauses tariffs
- Workhorse Group’s drones are now delivering packages in Ohio
- Tesco to scrap ‘best before’ dates on fruit and vegetables
JD.com has been making big investments in autonomous technology as part of its long-term business focus. The company has implemented blockchain technology into their supply chain, built an unmanned sorting center, trialed robotic deliveries, and invested heavily in drones, some of which are capable of delivering huge payloads. The latest endeavor is to figure out how its courier robots can communicate machine-to-machine so that they can deliver to flats in tower blocks. The company wants to make its robots smarter and enable them to “talk” to lifts. This will enable delivery to a customer’s door rather than simply to an apartment complex lobby. It is the latest move in Founder and CEO Richard Liu’s plans to remove people from the retail process.
Amazon has made headlines lately with stories of customers being banned for too many returns. At the other end of the customer service spectrum, Amazon has rolled out its Map Tracking feature nationwide. The feature, which debuted in a limited release in November, is now available for all Amazon deliveries in the US. The key feature of the Map is that is tells customers exactly where their package is and gives a better estimate of when it will be delivered. The map also lets customers know how many stops away the driver is, and they can follow their package’s progress on a map. With more customers demanding visibility into deliveries other than just the usual “out for delivery” message, this functionality should be a crowd pleaser.
UPS will begin to charge an extra $150 next month for oversized packages and pallets. The company will also add extra charges for packages with mislabeled dimensions. These extra charges come on the heels of new charges that UPS introduced last year for oversized items. Currently, UPS delivers packages up to 150 pounds; the new charges are perceived as the company’s way to discourage retailers from shipping heavier items that can cause delays at the sorting facilities. From June 4, UPS is hiking per-package surcharges for pallets and packages heavier than 150 pounds from $500 to $650.
Kroger is exploring all options when it comes to delivery options. The company announced a major partnership with Ocado, a U.K.-based online supermarket retailer. As part of the partnership, Kroger will gain access to Ocado’s Smart Platform, which includes online ordering, automated fulfillment, and home delivery capabilities. The platform will become the delivery mechanism for Kroger in the US. The two companies have begun to identify three potential sites for the development of new, automated warehouse facilities in the US. Over the first three years of the agreement, plans call for up to 20 potential sites. John M. Schlotman, executive vice-president and chief financial officer at Kroger, said “this arrangement is exclusivity in the United States. It’s not just in the parts of the United States where we have brick and mortar; it is in the entire country. And we would have the expectation that these sheds will turn up in areas where we don’t have brick and mortar today.”
The trucking industry is facing a crunch, and the outlook is not necessarily rosy. While the digital freight matching ecosystem is making it possible for carriers to offer additional capacity when they have it, the trucking industry is dealing with two costs that keep rising: fuel and labor. Both of these costs are rising at the fastest rate in years, which is pushing retailers and manufacturers to raise prices. Currently, the driver shortage sits at about 50,000. Drivers are leaving the industry for other jobs, especially construction, which allow them to not be on the road while making a comparable wage. More drivers are retiring and fewer young workers are entering the workforce; this is driving up the cost for qualified candidates. Fuel costs are rising as well; the average price of diesel reached $3.28 per gallon, which is the highest level in 41 months. It will be interesting to monitor this market and see how the driver shortage and rising fuel costs impact capacity and pricing.
President Trump is has said that the trade war with China is “on hold,” at least for now. Treasury Secretary Steven Mnuchin said Sunday that the Trump administration will hold off from imposing tariffs on China as leaders from both nations try to hammer out agreements on trade. In response to China’s insistence on US companies sharing intellectual property to do business in China, the Trump administration had threatened $50 billion to $150 billion in tariffs on Chinese goods. Beijing countered by threatening tariffs on $50 billion worth of US farm, chemical, and other exports. The two sides have agreed on a framework for reducing the US trade deficit with China and addressing technology trade irritants. The US trade deficit with China totaled a record $375 billion in 2017, and the Trump administration asked the Chinese to commit to the goal of reducing it by $200 billion by 2020.
Drones have been on everyone’s radar (especially the FAA) for the last few years as companies look at how they can use autonomous drones for last mile delivery. As I mentioned in last week’s news roundup, the US government has approved a drone test program which comprises 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. One of the companies that has received approval is Workhorse Group. The Workhorse HorseFly drones used in the pilot program are octocopters with carbon fiber construction, autonomous GPS navigation capability, and infrared cameras used for landing. A HorseFly can deliver a 10-pound package, fly at a top speed of 50 mph, and stay airborne for 30 minutes at a time, according to Workhorse. Residents of Loveland, OH, which is just outside Cincinnati, can opt into the program and have their packages delivered by drone. The drones are summoned using a dedicated app; customers can also use the app to set a delivery location, monitor the progress of a delivery, and receive a photograph as confirmation once the package is dropped off.
And finally, Tesco is scrapping ”best before” dates on fruits and vegetables. The company is leaving it up to consumers to use common sense to decide whether or not an item is no longer fit to eat. The main reason behind the move is to reduce customer confusion about whether they should throw items away, which is resulting in needless food waste. Shoppers will no longer find date labels on 70 lines of own-brand produce and will instead decide when they should be eaten or thrown away by looking at them, touching them and smelling them. The move follows a recent campaign by the National Federation of Women’s Institutes into causes of food waste, which found that less than half of respondents understood the meaning of “Best Before” dates, and were unnecessarily wasting food.
That’s all for this week. Enjoy the long weekend and the song of the week, which was the last song I heard on my last Uber ride home from the airport, Eric Clapton’s Wonderful Tonight.