This Week in Logistics News (August 25 – 31)

logistics newsIn October 2015, Asteroid 2015 TB145, dubbed the Halloween Asteroid, passed within 302,000 miles (just over 1 lunar distance) of the Earth. The asteroid is an estimated 2,297 feet in width, making it the largest object to pass that close to the Earth since 2006. The asteroid is expected to pass by the earth again just after Halloween this year, but this time will be an estimated 25 million miles from the Earth. What makes this asteroid so interesting and what sparked so much interest from astronomers is not just how close it came to the Earth. The asteroid’s most intriguing properties are its unusual shape and size. Namely, at certain angles, the asteroid has a creepy skull-like appearance. The skull-like features are most likely the result of an unusual number of boulders dotting the asteroid’s surface. Even though it will not be passing nearly as close this time around, astronomers are excited about the opportunity to obtain new data about the asteroid to help improve their knowledge of not only this mass, but asteroids in general. That, and they get to see the creepy skull flying through the sky. And now, on to this week’s logistics news.

Earlier this week, President Trump said that the US and Mexico had reached an accord to revise key portions of the North Atlantic Free Trade Agreement (NAFTA). Trump also said that the new agreement would be finalized in the next couple of days, indicating that he was ready to drop Canada from the agreement. Things have taken a U-turn on that front, as Canadian Prime Minister Justin Trudeau and Trump have indicated that they are both upbeat about the prospects for a NAFTA deal by the end of the week. There are still a number of issues that need to be worked out, but negotiators plan to continue to work around the clock to try to get a deal done. Trump set the Friday deadline to allow Mexican President Enrique Pena Nieto to sign it before he leaves office at the end of November. Under US law, Trump must wait 90 days before signing the pact.

UPS has launched a new technology company called Ware2Go. The new business is aimed at connecting small and medium sized businesses with warehouses to help facilitate online orders. Ware2Go helps to recruit and certify new warehouses for these businesses, which in turn allows them to expand to new locations as their e-commerce business grows. Customers can make an account on Ware2Go’s website as either a merchant, warehouse, or both, and set criteria for their business, such as their products, space requirements, delivery needs, and others. Ware2Go then enables merchants to manage their inventory in these warehouses on a cloud-based platform.

Transportation management system (TMS) provider MercuryGate has been acquired by global growth equity advisor Summit Partners. The company said it plans to work with Summit Partners on accelerating innovation and enabling global ecosystem growth for its software as a service (SaaS)-based TMS. MercuryGate said that CEO Monica Wooden will take on a customer-facing role, serving as chief revenue officer, and president Steve Blough will become chief product officer. Summit’s executive-in-residence Joe Juliano will become MercuryGate president and CEO. With more companies moving toward cloud-based solutions, the new ownership should be able to invest more money in expanding the MercuryGate solution to meet growing customer needs. The deal closed on August 23, and financial terms were not disclosed.

Amazon often touts its ability to make same-day or one-day deliveries. Well, customers in the UK have a problem with this claim. Recently, Amazon has faced criticism for ads claiming one-day delivery in the UK, and the UK advertising regulator said it had received 280 complaints, mostly from Prime customers who reported not receiving their packages within a day. It turns out that Amazon’s one-day service was actually one business day after the order was dispatched. Depending on what time the order placed could impact when that order was dispatched. The UK advertising regulator said the ad “must not appear again in its current form, and Amazon must make clear that a significant proportion of Prime items were not available for next-day delivery.”

Self-driving start-up AutoX is partnering with GrubMarket, a company that sources and deliveries farm-fresh organic foods, on the world’s first autonomous grocery delivery car. Customers can place an order through GrubMarket’s app and when they are ready, summon the autonomous car. The customer’s order will be waiting in the trunk; the back window will also roll down to reveal a shelf that will offer customers additional items to purchase. During the pilot, which will take place in San Jose, CA, there will be no delivery fee and a back-up driver will be in the vehicle at all times. The company will be testing how well the delivery system works, how people respond to it, and how customers will use the shelf in the back seat to buy additional items.

Northeast PassageAs my colleague Clint Reiser wrote about earlier this week, Maersk has sent its first container ship through an Arctic route. A Maersk vessel loaded with Russian fish and South Korean electronics will next week become the first container ship to navigate an Arctic sea route that Russia hopes will become a new shipping highway. This is the latest step in the expansion of the Northern Sea route, which is becoming more accessible as climate change reduces the amount of sea ice on the route. The Northern Sea Route runs from Murmansk near Russia’s border with Norway to the Bering Strait near Alaska. Ships sailing it require a permit from Russian authorities. The route is significantly shorter than going through the Suez Canal, but not enough testing has been done to ensure that it is commercially viable. This trip will be a big step in the testing procedure.

A trucker shortage is forcing restaurants to buy more local. According to a study by Freight Transportation Research Associates, a labor crunch in the trucking industry is making it more expensive to deliver food items. For the year-end on June 30th, US shipping rates had jumped 14 percent. Restaurants are feeling the crunch of rising costs; rather than pay more for deliveries, and then pass the costs along to the customer, many restaurants are turning to local sources for items. According to most chefs, the use of local food items has multiple positive benefits. First, they are paying less in transportation and delivery costs. Second, less time on the road means less gas and emissions, which is beneficial for the environment. And third, and probably most importantly to chefs, shorter shipping times means better looking and better tasting food.

As we approach the holiday season, the strong economic forecast will be beneficial to warehouse workers. According to an annual survey of nearly 16,000 hourly workers conducted by Atlanta-based Employ Bridge, warehouse operators are prepared to offer as much as $2 an hour over current wages to attract and retain workers during the peak holiday season. It should be noted that the $2 an hour increase is the top end of the scale. Many companies will not be offering that much, especially those that typically do not have a big peak holiday season. However, with a tight labor market, I expect to see most companies offering additional wages and/or other benefits to ensure proper staffing levels.

That’s all for this week. Enjoy the weekend and the song of the week, Golden Age by the Asteroids Galaxy Tour.