This Week in Logistics News (March 16 – 22)

logistics newsI spent the majority of this week in Las Vegas attending the Oracle Modern Business Experience conference at the Mandalay Bay. From a supply chain perspective, the conference looked into how disruptive technologies like IoT and blockchain are impacting supply chain management and the benefits and efficiencies they can add. The sessions were both informative and thought provoking at the same time. But I’ll have more on these topics at a later date. The conference also enabled me to accomplish two additional things. First, as a member of the analyst community, you realize how close the overall community is. As a result, I was able to meet up with and hang out with a number of former colleagues that I haven’t seen in a long time. It was great to hear about the research topics they are working on but also catch up on a personal level. Second, I was able to partake in a Vegas-only experience like no other: March Madness at the sports book. Granted, I was only there for the play-in games to kick off the tournament, but the sports book was electric. Every shot made or missed elicited a big reaction in the final minutes. I can’t even begin to imagine what it looked yesterday and today as the tournament gets into the full swing of things. And with that, let’s move on to this week’s logistics news.

A few months ago, I wrote that President Trump was threatening to pull the US out of the Universal Postal Union, the 145-year-old postal treaty that sets shipping rates for 192-member countries. The State Department has backed President Trump and proposed a new plan which would allow the US to set its own rates for the delivery of small international packages while remaining in the 192-country union. The Trump Administration said the agreement has disadvantaged domestic shippers by giving China and other countries discounts on postal rates. Specifically, Trump was very critical of the subsidized rate the union sets for delivery of lightweight packages sent from countries such as China, known as terminal dues. That rate is significantly less than the domestic delivery cost charged by the USPS. In order for the plan to be put into action, it needs a two-thirds majority vote from the 192 countries at the group’s quadrennial meeting. This means that 128 countries would need to approve the change. This should be an interesting vote.

Food traceability has become big news and the Seafood Business for Ocean Stewardship (SeaBOS) and the Global Dialogue on Seafood Traceability (GDST) are teaming up on a joint initiative to adopt worldwide standards. The two organizations are teaming up with major seafood companies such as Ahold Delhaize, Aldi, and Lidl to create standards that will improve the quality, efficiency, and affordability of seafood traceability. Other participants in the joint initiative include European food retailer Metro, UK grocer Sainsbury’s, Anova Food USA, Bumble Bee Foods, Cargill Aqua Nutrition, Stavis Seafood and Thai Union (Chicken of the Sea International). The companies agree that a lack of global standards around traceability has long been a problem within the industry.

The driver shortage in the US is continuing to grow and trucking companies have explored a variety of initiatives to close the gap. According to the American Trucking Association, the industry needs another 51,000 drivers to keep pace with increased shipping demands. Recruitment practices have changed as companies are offering more money while specifically targeting women and millennials. One surprising area where trucking companies have begun to turn is felons. The increased demand has led these companies to give non-violent, ex-offenders a second chance; just a few years ago, this would not have been the case. Most trucking companies will look at ex-offenders who were convicted 10+ years ago and have not been convicted of violent and/or sex crimes. Help for Felons, a website that provides support and resources for felons, lists more than 40 trucking firms that hire drivers with criminal backgrounds. including Swift Transportation, J.B. Hunt Transport Services, Knight Transportation, Barr-Nunn Transportation and Western Express, among others. Studies have shown that recidivism rates plummet with job placement. In fact, in prison-to-work programs in six cities across the country, states with overall recidivism rates of about 31 percent to 70 percent saw those rates plummet to as low as 3.3 percent for felons placed in jobs shortly after their release.

British Prime Minister Theresa May has officially requested Brexit be postponed beyond the original date of March 29. EU Brexit negotiator Michel Barnier said the EU would not grant a delay without a “concrete plan” from the UK about what they would do with it. Under the current law, the UK would leave the EU without a deal in place. The EU is poised to insist on a withdrawal no later than May 22. MPs rejected the withdrawal deal Theresa May has negotiated with the EU for a second time last week by 149 votes. They also voted in favor of ruling out leaving the EU without a deal, and in favor of extending the Brexit process. In other news, a petition calling on Theresa May to cancel Brexit by revoking Article 50 has attracted more than 900,000 signatures. Parliament’s petitions website crashed earlier because of the high volume of traffic.

Environmentally friendly approaches to delivery have become a hot commodity as companies explore alternative fuels and dynamic routing to reduce the number of trucks on the road. San Francisco-based online grocer Farmstead is taking a hard look at being more environmentally friendly. The company has launched its Sustainable Routes program, aimed at reducing the number of vehicles on the road and, in turn, carbon emissions and the company’s delivery costs. Under the plan, Farmstead will group neighbors who receive their online grocery orders during the same day and time window each week, allowing deliveries to be made to more customers with fewer vehicles. Under the program, customers can choose from three delivery windows daily, seven days a week. The company thinks the program could pull 9 or 10 unnecessary vehicles off the road for each delivery route.

A couple of weeks ago I wrote about the ongoing battle between Amtrak and freight railroads concerning train delays. The feud has been escalating lately as Amazon seeks to increase ridership which could add delays to freight services. Things have now boiled over, leaving the tracks and heading to Twitter. Amtrak has begun tweeting using the handle @AmtrakAlerts to tell riders when trains are delayed. While this seems like a positive customer service approach, the company has also made it clear to passengers when the delays were the result of being stuck behind a freight train. This prompted a lawyer for Norfolk Southern Corp. to send a demand late last month to Amtrak: stop tweeting about our trains, or the railroad “will be forced to consider further action.” This was due to conflicting reports about why a train from New Orleans to New York was 6 hours late. This will worth watching.

And finally, you may have heard the phrase “life is a game of inches” before. Well, for one Massachusetts couple, it certainly is not a game; it is a very costly surcharge. On February 18, Irum Haque packed, sealed, and measured a box containing a painting she needed to ship back to an artist in California. The painting was large; too large to fit in the car to bring to a UPS store to ship. So, the couple followed the UPS online prompts to measure the item, printed a shipping label, and scheduled a pick-up. A few weeks later, she received an email from UPS informing her that the package, which she measured at 60” X 48” X 4” (and just inside of the 165” maximum allowed by UPS), was actually 60” X 49” X 4”. This put the total at 166” and subject to an oversized item charge of $850. After a series of back and forths (and a little public outcry), UPS relented an refunded the additional $850 back to the Haques.

That’s all for this week. Enjoy the weekend, March Madness, and the song of the week (in honor of the late, great Dick Dale), Misirlou.

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