This Week in Logistics News (May 26 – June 1)

logistics newsAs hard as it is to believe, today is already June 1, the 152nd day in the Gregorian calendar (153rd day in a leap year). There have been some pretty big moments in history that took place on June 1. Examples include Anne Boleyn was crowned Queen of England in 1533(for a short period of time), Benedict Arnold was court-martialed for malfeasance in 1779, Kentucky becomes the 15th state of the US in 1792, the USS Chesapeake is captured in 1813, and George H. W. Bush and Mikhail Gorbachev sign a treaty to end chemical weapon production in 1990, among others. As a music fan, three other events stand out to me on this day, as they all relate to one of the most iconic and influential bands of all time. On June 1, 1947,  Ronnie Wood, guitarist for the Faces and the Rolling Stones was born; in 1964 the Rolling Stones kick off their first US tour; and in 1975, the Rolling Stones begin their first tour with new guitarist Ron Wood. Seems like a pretty important day for the Stones. Oh, and they also released Jumping Jack Flash on June 1, 1968 in the US. And now on to this week’s logistics news.

As part of its strategy to compete with rivals Flipkart and BigBasket in India, Amazon is rebranding its online grocery service. Amazon Now will now be known as Prime Now and will make more delivery slots available to customers. The service will also offer Amazon Prime members same-day deliveries in categories such as electronics and small appliances, in addition to groceries and consumables. According to Amazon, the rebranding will offer additional benefits to customers, such as two-hour delivery for Prime members anytime from 6am to midnight. Other customers will continue to get the “beyond two-hour” delivery slots. This comes at a time when Flipkart and BigBasket are both investing heavily in same-day delivery for grocery and CPG items.

With global e-commerce growing, it is not surprising to see more investment in fulfillment services. Alibaba Group Holding is leading the purchase of a 10 percent stake in Chinese delivery service ZTO Express for $1.38 billion. The Alibaba-led investor group includes its own logistics arm Cainiao. According to the agreement, Cainiao and ZTO Express will collaborate on all aspects of their business, including delivery, warehouse management, and technology. This move is no surprise considering the money that chief rival JD.com is investing in its supply chain operations, from drone delivery to automated warehouses. According to Meisong Lai, ZTO’s Founder and Chief Executive Officer, “this partnership will enable us to expand our selection of high quality service offerings both in China and internationally.”

Although there have been recent talks to try to alleviate a trade war, President Trump has announced that the US will move forward with restrictions on Chinese investments in the US, as well as tariffs on $50 billion worth of Chinese goods. This comes on the heels of talks where the Trump administration and the Chinese government had agreed to an outline for a trade truce. The restrictions include a crackdown of Chinese investment in technology, and a formal complaint at the World Trade Organization about the acquisition of US intellectual property. The 25 percent tariff on $50 billion worth of Chinese goods will include machinery, mechanical appliances, electrical equipment, transportation vehicles and assets, chemicals, and other. The final list will be released June 15, with the restrictions coming by the end of the month.

Speaking of President Trump and tariffs, the EU is seeking a last-minute tariff reprieve to avoid inflaming global tensions. When the US imposed the 25 percent tariff on steel imports and 10 percent tariff on aluminum imports, the EU had a temporary reprieve which expires on June 1 (today). The EU threatened to retaliate with duties on $3.3 billion worth of American products. The US offered a quota for imports, set at 90 percent of last year, as an alternative to the tariff, but the EU would not accept a cap that would be lower than last year’s imports. German Economy Minister Peter Altmaier has said: “we have to try to avoid higher tariffs if possible and that means we’re ready to agree with the Americans on points that are necessary in our mutual interest.” This is a story that we will certainly keep an eye on.

UPS has launched an inventory tracking tool for medical device manufacturers. The company has introduced a field inventory tracking platform through its collaboration with WebOps LLC and Baxter Planning Systems. WebOps will enable tracking of surgery schedules, physician preferences, inventory availability, and the movement of surgical kits and implants; Baxter Planning Systems will allow users to plan for the dispersal of consigned inventory across hospitals and forward stocking locations The end result is to ensure that surgical kits and implantable devices arrive at the right place at the right time, a crucial component for medical devices.

The transportation unions representing workers at FedEx and TNT in Italy have called for a two-day strike. Three unions, FILT CGIL, FIT CISL, and UILTRASPORTI, are opposed to plans to close 26 branches and make 361 staff redundant as part of the integration of the two companies in Italy. When FedEx acquired TNT Express in May 2016 for €4.4 billion, it proposed a restructure in Italy that included the closure of 24 FedEx branches affecting 315 workers, and two TNT branches with 46 staff. A further 115 staff will be transferred to other branches. The unions previously staged a one-day protest stoppage on May 17.

And finally, Ukraine Post has unveiled a new-look post office. While it is working on better queue management and improved customer feedback programs, the big news, at least from a logistics standpoint, is the inclusion of a changing rooms. Similar to what Canada Post has done, Ukraine Post will have changing rooms available so customers can try on e-commerce purchases when they pick them up; most B2C parcel deliveries go to the post office for customer pick-up. The changing room enables the customer to make an immediate decision, and can speed up the returns process. For the post office that is handling the returns, instant returns can streamline the process.

That’s all for this week. Enjoy the weekend and the song of the week, Jumping Jack Flash by the Rolling Stones.

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