This Week in Logistics News (June 16 – 22)

logistics newsAfter nearly 10 months (including 5 snow days), today marks the last day of school for my kids. I’m sure they will come pouring out the front door with screams of excitement, knowing that vacation has officially begun. This vacation will consist of camps, the pool, a few trips, no homework, and most importantly, the carefree days of just being a kid. To say that I am jealous would be an understatement. But it is amazing how fast this year has gone. I just looked back at my first news round-up of the school year, and the stories seem so fresh in my mind, yet feel so far away at the same time. The cleanup efforts from Hurricane Harvey were in full swing, as fuel haulers received HoS exemptions, drones were being used for recovery efforts, and retailers were struggling to stock shelves with the bare essentials; Pitney Bowes had just acquired Newgistics; BASF connected blockchain with smart pallets; UPS planned to have delivery drivers use their own vehicles; and package delivery companies were gearing up for the holiday season. Before I know it, today’s news stories will be in the rearview mirror as the new school year kicks off. Until then, I am going to enjoy the summer. And now on to this week’s logistics news.

Amazon is at it again. The company has already introduced the world to some innovative choices when it comes to package delivery, such as right into your home or the trunk of your car. Well, now the retail giant is making a bigger leap into the logistics world with the introduction of Hubs by Amazon. Unlike other Amazon services, Hubs does not require the customer to make a purchase through Amazon. Instead, the program is a last-step delivery option for FedEx, UPS, and private mail. Delivery personnel enter a code to open a door on the Hub and leave the package inside. The recipient gets a notice that the package has been dropped off and can open the door with their own code at their convenience. Amazon is rapidly signing up major property management companies to install the Hubs in their properties.

CVS Health will make prescription deliveries nationwide to accommodate the heightened expectations of convenience from consumers. The nation’s second-largest drugstore chain has also said it will make home deliveries of other items, like allergy medicines, vitamins, and household products available for a $4.99 delivery fee, which will be made in one or two days. The company, which began same-day delivery service in New York City last year, is expanding that program (for a higher fee) to Boston, Miami, Philadelphia, San Francisco, and Washington, DC. The driver behind this move is to combat Amazon, as it potentially moves into the pharmaceutical business. CVS rolled out curbside pick-up a few years ago, but is now feeling the push for more convenient customer fulfillment strategies. CVS Health plans to expand the services it offers through its stores, deliver more care at home, and get more involved in helping customers with things like staying on their medicines.

Warehouse automation has been a very hot topic lately with large e-tailers such as JD.com and Alibaba indicating that they hope to go completely autonomous in the order fulfillment environment in the near-future. JD.com is getting pretty close. The company has constructed a highly autonomous warehouse that is handling 200,000 orders each day, and employees only four people. The roughly 100,000 square foot facility is run almost entirely autonomously, with human employees solely on site to tend to the robots. According to JD.com, the warehouse leverages ‘highly-automated sorting technology’ to sort up to 16,000 packages per hour with 99.99% accuracy. The sorting center uses artificial intelligence to scan and inspect packages as they’re being processed. JD.com adds that “once packages are taken off trucks at one side of the facility, they’re loaded onto a complex network of automated machinery, where fast-moving, automated conveyors zip each box around. Then, image scanners check the packages in ‘microseconds’ and the firm’s smart logistics system calculates where they should be dropped off. The packages are grouped by region, picked up by autonomous forklifts and brought to a truck for delivery.”

While drone deliveries to your front door have been in the news with nearly every fulfillment and e-commerce company staging pilot programs, we are probably still a way off from drones as a reality.  There is a new market that is gaining traction – autonomous cargo drones the size of small airplanes. Some companies are designing unmanned cargo airplanes to compete with short-haul trucks and small freight aircraft, and testing prototypes while pushing for their large fixed-wing drones to play a key role in the next wave of logistics. According to the Aerospace Industries Association, or AIA, short-haul cargo aircraft could be making routine flights in the US for early adopters in seven to 13 years. Those flights will be at low altitudes and in rural areas. This is certainly an inventive solution to the driver shortage.

The Antwerp Port Authority and the Antwerp blockchain start-up T-Mining have developed a solution to make document flows quicker, safer and more efficient. Blockchain technology will automate and digitize the flow of certificates of origin and phytosanitary certificates, which guarantee the safety of fruit and vegetables, to the forwarding agent. A pilot project will involve Belgian fruit forwarding company Belfruco, Belgian importer Enzafruit, PortApp (a blockchain application developer), 1-Stop (a port logistics solution provider), and New Zealand fruit and vegetable grower, exporter and importer T&G Global. The aim will be to ship fruit from New Zealand to European markets by using the blockchain-enabled, digital phytosanitary certificates. If successful, the technology should transfer certificates to the Belgian authorities for inspection and approval before releasing the cargo of fruit for import in Belgium.

With parcel companies around the world facing tougher restrictions and pressures from regulators to become more environmentally sustainable, UPS is making a big push. The company has set a goal to have a quarter of the new vehicles it buys running on alternative fuels by 2020. UPS also aims to replace 40 percent of its ground transportation fuel with sources other than conventional gasoline and diesel. This latest move will bring its investment in alternative fuel vehicles and related projects to more than $1 billion over the last decade. UPS said Daimler AG’s Freightliner and Paccar Inc.’s Kenworth will supply a total of 400 semi-tractors that pull trailers of goods, and that Terminal Investment Corp. will supply it with 330 terminal trucks that move trailers at UPS sorting facilities. Deliveries of the new vehicles will start this summer and be completed by the end of November.

A prolonged rail strike in France has caused a spike in truck and barge freight costs. The strike has caused alarm that the EU’s largest crop producer may be stuck with excess stocks when the summer harvest arrives. Luckily, with the ability to procure truck and barge transportation, the strike should not create a full-blown crisis. However, river transport has been hit by heavy rain as well as lock outages, and the rolling rail strikes since April have accentuated reliance on increasingly expensive and scarce trucks. One freight train in France typically carries as much grain as at least 40 trucks.

And finally, food waste is an issue we have talked about in the past, and it is an issue that continues to cause problems. For example, people eat around 100 billion bananas every year, which creates around 270 million tons of waste which are often burned or left to rot. Crop burning pollutes the air, and rotting releases methane into the atmosphere and contributes to global warming. The startup Circular Systems is pioneering new tech to convert food crop waste – like banana peels and hemp stalks – into wearable fibers. This is all part of founder Isaac Nichelson’s goal of making the fashion industry more sustainable.

That’s all for this week. Enjoy the weekend and the song of the week, Alice Cooper’s School’s Out.

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