This Week in Logistics News (April 27 – May 3)

logistics newsAs history tells us, following Abraham Lincoln’s assassination, John Wilkes Booth fled to southern Maryland and then Virginia. There, Union soldiers surrounded the barn where Booth and his co-conspirator were hiding out, set the barn on fire, and in the ensuing chaos, shot and killed Booth on April 26, 1865. Or did they? The Philadelphia Inquirer has a new story that follows the adventure of sleuths using facial recognition technology to figure out whether Booth’s story ends there. According to the sleuths, there is a chance that Booth did not die in that barn but survived until 1903 using a fake identity. Facial recognition technology paired photos of Booth with those of John St. Helen from 1877 and the embalmed corpse of a David E. George from 1903. They were a nearly perfect match (or as nearly perfect as the technology allows). However, experts still doubt that Booth survived the barn fire and subsequent shoot-out. This is based on the fact that at least 25 people witnessed Booth’s death firsthand, including friends and one accomplice, and that his body was examined by a surgeon who knew him well, identifying him by the tattoos and scars he bore on his body. I suppose we may never know the absolute truth, but it’s always fun to have a conspiracy theory on hand. And now, on to this week’s logistics news.

Digital freight matching, or the “Uber for Freight” model as some people like to call it, seems to be hitting a critical mass. What once looked like a model that brought in lots of venture capital money without a lot to show for it has turned the corner. In fact, the big TMS providers are now integrating digital freight matching capabilities into their applications for backhaul optimization. And it turns out that one of the elephants in the room, Amazon, has been quietly running the service since last year. The website, which launched in 2018, allows shippers to get instant quotes on the packages they want to ship between warehouses. The service is currently in beta and is only available for shipments between warehouses in five states (Connecticut, Maryland, New Jersey, New York, and Pennsylvania) according to Amazon’s freight service website. About a year and a half ago I raised the question of whether Amazon’s trucking app was really just a soft entry into the digital freight matching market. Turns out, we may have our answer.

Amazon Prime is one of those services where once you have it, you’re basically hooked. Initially, it was set up to ensure two-day delivery of Prime-eligible packages. Now, it has streaming TV, movies, and music services tied to it. The company is now making a major overhaul to its Prime service: one-day delivery. During its earnings call with investors for the first quarter of 2019, Amazon shared that it would soon be seeing the results of the company’s $800 million investment in one-day delivery. While one-day and same-day deliveries have become an option lately, these services are still reserved for specific areas. Amazon is planning a major investment in its infrastructure to reduce the time-frame to one-day shipping for all Prime members in North America first with a global roll-out coming in the near-future. Following the earnings call, Amazon’s shares surged 3 percent.

The news of Amazon’s one-day shipping option for Prime members appeared to put the online giant that much farther ahead of its main competitors. However, Walmart is clearly not ready to go down without a fight. In an interview last year, Walmart CEO Doug McMillon said that while one-day delivery would not be a surprise for Amazon, it was not going to be the end-all; instead, same-day delivery would be the real battlefield. And Walmart has hinted at a response to Amazon’s latest announcement. In a tweet from last week, the company said “One-day free shipping…without a membership fee. Now THAT would be groundbreaking. Stay tuned.” Whether or not this becomes a reality, it is good to see the competition looking at the big picture.

Drone deliveries have been a hot topic around Logistics Viewpoints the last few years. Last year, I wrote about the practicality of drone deliveries in the US. There have been three key delivery types that make the most sense. From what we have seen, the first is the delivery of medical supplies to remote areas. These supplies include blood, medical equipment, and medicine; the key is to get the supplies there quickly without having to traverse rough terrain. A second practical application is within the yard or warehouse for inventory management applications. PINC Solutions, for example, provides drones for use in yards and warehouses that make use of RFID for real time location of yard assets and inventory management processes within the warehouse. The third aspect we have seen is the use of drones to ferry supplies at ports. According to the University of Maryland Medical Center, for the very first time, a kidney scheduled for transplant was delivered by a drone. The drone was custom-built to monitor the organ in the air in real time as it was delivered on April 19 and send updates to personnel handling the transplant. While the majority of the public looks at drone deliveries as a way to get things as fast as possible, this latest use case shows that the greater good of humanity is probably the best use of drone deliveries.

The Rhine River, which is a major shipping route for commodities such as grains, minerals, coal and fuel products including heating oil in Germany, is being hampered by low water levels. Cargo vessels cannot navigate much of the Rhine in Germany when fully loaded after dry weather caused a drop in water levels. Traders said that from Duisburg and Cologne to south Germany the Rhine is too shallow for normal sailings, which means vessel operators impose surcharges on freight rates for cargo owners. This is not the first time that a lack of rain has caused issues with the Rhine. Last year, German companies faced supply bottlenecks and production problems due to a drought and heatwave, which led to unusually low water levels on the Rhine. With rain in the forecast, hopefully the river will allow goods to flow as usual.

The home-delivery meal kit market is continuing to grow. Following a successful pilot, Wegmans Food Markets is expanding on its program to deliver meal kits to customers. While it is still only through select stores, Wegmans is expanding its partnership with DoorDash for last-mile delivery of meal kits. Accessed through the new Wegmans Meals 2GO app, the service is available at select locations. However, Wegmans aims to roll out Meals 2GO to more than 40 stores by the end of the year, as well as to additional locations in 2020.  Wegmans said Meals 2GO orders of $20 or more for lunch, dinner or “anytime in between” can be delivered via DoorDash in an approximately five-mile radius of participating stores. Items available for delivery include sushi, pizza, wings, subs, salads, soups, hot “wokery” (Asian), ready-to-heat meals, desserts and beverages.

And finally, speaking of the expanding market of food delivery, Postmates is pushing hard ahead of its expected IPO later this year. According to the company, Postmates has launched in 1,000 new cities since December. This brings the total number of markets up to 3,500 cities across all 50 states. The company says it now reaches 70 percent of US households and delivers food from some 500,000 restaurants, helping it to compete with food-delivery powerhouses Uber Eats and DoorDash.

That’s all for this week. Enjoy the weekend and the song off the week, Jon Bon Jovi’s Blaze of Glory.

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