This Week in Logistics News (June 23 – 29)

logistics newsThe group play stage of the 2018 World Cup is over and the tournament has moved on to the knockout stage, where the remaining 16 teams will play a single elimination tournament. Notice I said remaining 16 teams and not the best 16 teams. This is due to the somewhat unfair nature of the random draw, where some groups are simply more difficult to advance through. There were certainly some surprises and amazing moments from the group play stage this year, including Argentina’s slow start, Russia’s opening game thrashing of Saudi Arabia in the opening game, and an assortment of late-game heroics that tied or won games. But the biggest story of the group stage was Germany. Even though it was one of the favorites to win the Cup, and is the defending champion, Germany did not advance to the elimination round after securing only 3 points in the group stage after suffering shocking defeats to Mexico and South Korea. Germany’s group was labeled the “group of death” as it was assumed that Germany would surely advance, and the other three talented teams would fight for the final spot. But, sometimes, the chips just don’t fall the way you expect. And as they say, that’s why you play the game. And now, on to this week’s logistics news.

A consortium of 10 companies has come together to form the “Food Trust” group to apply blockchain technology for the food supply chain. It’s not surprising to see Walmart’s name on this list as the company has been testing blockchain technology over the last couple of years on initiatives to trace pork products from one farm owned by Chinese meat producer Jinluo to a Walmart distribution center in Beijing, as well as to trace mangos in the US from the plants to store shelves. The company is also looking to accelerate the acceptance and adoption of using blockchain technology to increase food safety, with a promised investment of $25 million by the year 2020. According to the Food Trust consortium, bad food can easily get into the supply chain as the companies do not have detailed and complete monitoring of the movement of foods. Under current regulations, companies must register only a few steps, and many are still using antiquated methods such as paper documents to record data. The use of blockchain will hopefully change this. The complete list of companies in the consortium is Walmart, Nestlé, Unilever, Dole Foods, Driscoll’s, Golden State Foods, McCormick and Co., Kroger, McLane, and Tyson Foods.

President Trump’s trade policies, especially the levying of tariffs on steel imports, is having serious repercussions, but probably not what Trump was hoping for. As the EU imposed retaliatory tariffs, many American businesses are feeling the crunch. Harley-Davidson is one such company, as it stood to lose nearly $100 million a year. For motorcycles, the European bloc raised its 6 percent tariff to 31 percent. That will make each bike about $2,200 more expensive to export. Considering that the European market is Harley-Davidson’s second largest market, this causes significant problems. As a result, the company is shifting some production of motorcycles for European customers out of the United States to avoid EU retaliatory tariffs.

Speaking of President Trump, his administration has announced plans to try to restructure and then privatize the Postal Service. A privatized postal operator, the White House plan proposes, could cut costs by delivering mail fewer days per week and to more central locations, instead of door-to-door delivery. The Trump administration’s proposal also calls on the Postal Service to revisit its labor agreements with postal unions. Additionally, by becoming a privatized entity, the Post Service would have greater flexibility for making adjustments to product prices, from shipping rates to boxes and envelopes. The Postal Service has reported 11 straight years of financial loses, and posted a $1.3 billion loss for the second quarter of fiscal 2018, more than double the loss it reported for the same period last year.

Körber Logistics added voice-directed warehousing and modeling solutions to its business portfolio with the acquisition of Centriq Group Ltd., including its voice solution business Voiteq and modeling and simulation business Cirrus Logistics. Voiteq is a UK-based provider of voice optimization software solutions based on Vocollect Voice technology. The VoiceMan solution set adds process optimization functionality to the hardware and voice translation capabilities delivered by the Vocollect product line. Cirrus Logistics, a sister company to Voiteq, is a UK-based provider of logistics modeling and optimization solutions. Cirrus provides software solutions for warehouse modeling and simulation, supply chain network design, and maritime scheduling and simulation.

Descartes Systems Group is no stranger to growth by acquisition, with a long list of acquisitions over the past few years. The company has acquired Velocity Mail, a provider of mail and parcel scanning and tracking solutions for the air freight sector, for $25.5 million. According to Descartes, global air carriers use Velocity Mail’s network to leverage mobile devices to track shipments and deliveries in real-time. Descartes will merge Velocity Mail with the company’s Global Air Messaging Gateway to provide air carriers with a single platform to manage the lifecycle of shipments.

In a third acquisition announced this week, Australian logistics software provider WiseTech Global has agreed to purchase US parcel shipping transport management solution (TMS) provider Pierbridge for $27.3 million. The driver for the deal for WiseTech is to gain greater access to the fast-growing e-commerce sector. WiseTech sees significant synergies with its platforms for larger freight classes, and the e-commerce parcel aspect provides a significant opportunity for growth. This deal is WiseTech’s eighth acquisition of the year. Depending on “business and product integration and revenue performance”, a further $16.5 million could be payable.

Home Depot has joined the growing number of retailers that have installed lockers for e-commerce order pick-up. The initiative began in 2016, and Home Depot hopes to have lockers in all its stores within three years. This is all part of the company’s $11 billion investment in its future. The use of lockers makes sense given that 45 percent of Home Depot’s online orders are picked up at the store. Additionally, with the stores generally selling lots of items through the e-commerce store exclusively, it provides an added later of convenience for customers when it comes to fulfilling the order.

As part of an ongoing research collaboration effort, Volvo Trucks worked with FedEx and the North Carolina Turnpike Authority to conduct an on-highway truck platooning pilot. This marks the first time a public on-highway platooning test has taken place involving a major truck manufacturer and a transportation company in the US. The platoon consisted of three trained, professional truck drivers in Volvo VNL tractors, each pulling double 28-foot trailers. The tractors and trailers traveled at speeds of up to 62 mph while keeping a time gap of 1.5 seconds, which is a closer distance than what is typical for on-highway tractors. Staged and unplanned vehicle cut-ins demonstrated how the technology handles common traffic situations.

As widebody freighter availability tightens, Boeing is looking at a conversion program for its 777 to meet demand. Right now, the majority of carriers are hesitant to invest the significant price tag for new production, but are open to the still-high cost of converted freighters. The current shortage has prompted efforts to get hold of aging 747-400 passenger aircraft to convert; however, the supply of these aircraft will simply not meet the demand required. There have been recent orders for 777-200Fs from several carriers, including Qatar Airways, Lufthansa, and All Nippon Airways, but most airline boardrooms are still reluctant to pay the cost of new production freighters. This is the main driver for Boeing to look at a conversion program, especially as the shortage looks to grow in the coming years.

And finally, Amazon Prime discounts have arrived at all Whole Foods stores. The Prime membership, which costs $119 a year, will get customers a 10 percent discount on some sale items and a discount on select items including some meats, fish, fruits and bulk items like nuts and granola. To get the Amazon Prime discount, customers have two choices. First, they can download the Whole Foods Market app, sign in with their Amazon account, and then scan the Prime code at checkout. Or, customers can simply give their mobile number to the cashier. Customers will also receive a discount when they order Whole Foods groceries through Prime Now. Free grocery delivery on orders of at least $35 is available in a number of regions, including Austin, Boston, Dallas, Los Angeles, Philadelphia, San Diego, San Francisco, and others.

That’s all for this week. Enjoy the weekend, the World Cup games, and the song of the week, Queen’s We Will Rock You.