This Week in Logistics News (April 13 – 19)

logistics newsHe’s back! Eleven years after his last major win, Eldrick Tont “Tiger” Woods won the Masters for the fifth time, while notching his 15th total major victory. In doing so, Woods moved closer to Jack Nicklaus’ record 18 major wins. To put that in perspective, of all active golfers, Phil Mickelson is second in career major wins with 5. Surprisingly, this marked the first time that Tiger has won a major when failing to be in the lead entering the final round. When Tiger sunk the final putt, I felt a twinge of nostalgia, as I was watching my golf hero, and the most dominant golfer of my time, reassert himself to the top of the sport. My 8 year-old son was watching with me, and because I was cheering for Tiger, he could not have been more excited. If this turns out to be Tiger’s last moment of glory on the tour, I can’t think of a more fitting way or more fitting tournament for him to win. But, I have to say, I’m really hoping he can string a few victories together and make a push for Nicklaus’ record. And now on to this week’s logistics news.

Amazon has not been shy about its desire to lessen its reliance upon, and compete with, UPS, FedEx, and USPS for last mile deliveries. And while the company has been innovative in some of its efforts, its latest venture seems to be popping up out of nowhere – literally. Amazon is delivering packages out of carnival tents in cities across the US as it races to compete with UPS, FedEx, and USPS. The tents take only a couple of weeks to build, stand 35 feet tall, range in size between 9,000 and 18,000 square feet, require little maintenance or property taxes, and generally serve as a temporary delivery station while Amazon builds more permanent structures. The tents can employ up to 300 people, who sort packages and ready them to be loaded into trucks for final deliveries. So far, Amazon has pitched tents in at least eight states, including Arkansas, Colorado, Georgia, Idaho, Kentucky, Louisiana, South Carolina, and Tennessee.

As part of President Trump’s plans to overhaul trade, his administration has imposed a series of tariffs which have not all been met with enthusiasm. The administration has imposed tariffs on steel and aluminum imports by claiming authority under Section 232 of the Trade Expansion Act of 1962, which grants the executive branch authority to impose tariffs on goods in the “interest of national security.” Many opponents have claimed that the national security is simply an excuse for policies that are clearly just economic in nature. Those opponents may have found a strong ally – the World Trade Organization (WTO) Dispute Settlement Body Panel. The panel held that treaty members do not have unbounded discretion to invoke trade barriers on the grounds of the national security exception. This decision opens the door to challenges on the legality of the tariffs. This will certainly be an interesting story to watch.

FedEx Office is adding new employees for a test on last mile deliveries starting in July – delivery robots. The robots, named same-day bots, will operate in Plano and Frisco, TX, and are capable of delivering groceries, hot food, medicine, and a host of other items. The bots will operate on sidewalks with pedestrians as well as roads with cars. The six-wheeled bot looks like a white cargo box that’s attached to the base of a high-tech wheelchair. It can carry up to 100 pounds but can fit through a standard doorway. It’s powered by a rechargeable battery and uses software, sensors and a 360-degree camera to navigate. It can climb steps, wade through puddles and roll through gravel, sand or snow. Customers can unlock the side panel containing their items using a punch code. According to FedEx, the bots are the company’s answer to crowd-sourced delivery models.

As the food delivery market continues to grow, so too do the partnerships between retailers and delivery companies. Canadian food and drug retailer Metro Inc. has partnered with Uber Eats for home delivery of ready-to-eat meals in Quebec. According to Metro, 23 stores can now deliver ready-to-eat meals, after an initial pilot of 3 stores. Metro said it is the first Canadian food retailer to partner with Uber Eats. Meals available for delivery include a selection of sandwich and salad combos for lunch and a menu of individual and family-sized dinners. Orders are delivered in about 30 minutes to a home or workplace by an Uber Eats driver.

Albertsons has announced that it is joining the blockchain-based IBM Food Trust network. The main purpose for Albertsons is to track and trace food items within its supply chain, such as romaine lettuce. The addition of Albertsons brings the network to more than 50 brands across the food supply chain. Albertsons, which operates nearly 2,300 stores across the U.S., will begin piloting IBM Food Trust for tracing bulk romaine lettuce from one of its distribution centers, then explore expanding to other food categories throughout its distribution network. The digital ledger should enable the company to provide ore transparency on the souring of products, and if a problem arises, address it in a fast time.

In its efforts to keep control over its logistics network, JD.com has historically treated couriers as in-house staff and paid them a basic income. However, as the costs of doing business continue to rise, especially when innovation is at the core of what the company does, things will be changing. In an internal letter to staff, JD founder and CEO Richard Liu announced that the company will scrap basic salary for couriers as net loss amounted to $420 million in 2018 at JD’s logistics unit. JD Logistics became a standalone business in 2017, but low orders and high internal costs have resulted in losses for 10 years. According to Liu, “if losses continue, JD Logistics only has two years of runway left with its capital raised.” Going forward, JD Logistics will continue to pay social insurances on behalf of its couriers, whose income is now based on the number of packages they handle.

And finally, even though we are barely a month into spring, it’s time to plan for summer. While Memorial Day weekend is the unofficial kick-off to summer, the July 4th holiday is what pops into most Americans minds when it comes to summer holidays. And with the fourth of July come firework spectaculars. Earlier this week, fireworks haulers petitioned for hours relief during the Independence Day holiday period. The American Pyrotechnics Association (APA) has submitted a petition to the Federal Motor Carrier Safety Administration to add four new members to its existing hours of service exemption during the Independence Day holiday period. A separate fireworks hauler, Extreme Logistics, has also requested an HOS exemption for its 12 drivers during the same holiday period. APA is requesting that its four new members – Celebration Fireworks, International Fireworks Mfg. Company, Johnny Rockets Display Company and the Wald and Company All American Display Fireworks Company – be added to the group’s waiver that allows drivers to exclude off-duty and sleeper-berth time from the calculation of the 14-hour limit, as well as the waiver from the electronic logging device mandate.

That’s all for this week. Enjoy the weekend and the song of the week, Survivor’s Eye of the Tiger.

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