This Week in Logistics News (June 8 – 14)

logistics newsSo close, yet so far away. I actually can’t believe that I am not writing an intro to the news round-up about Boston sports and our monopoly on titles. Unfortunately, after a valiant run, and a decisive game 6 victory to force a game 7, the Bruins were unable to bring the Stanley Cup home. Of course, I just assumed Boston would win, as it is what our sports teams do these days. For the second time in 12 years, Boston had a chance to win 3 of the 4 major sports championships, which once again, would have been the first time since Detroit in 1935 (Tigers, Lions, and Red Wings). But unfortunately, the St. Louis Blues were able to get the upper hand and bring home their first Stanley Cup championship. Even with the loss, it makes me realize how easy I have it as a Boston sports fan – I shrugged off the loss and got a great night sleep. This is something a generation before me could not have done. I’ve always been told to look at the silver lining – for my wife, it means I can finally trim my playoff beard. And now on to this week’s logistics news.

Any fan of Seinfeld is familiar with the term “preemptive breakup.” For non-Seinfeld fans, George thought his girlfriend was going to break up with him, so on the advice of Kramer, he preemptively breaks up with her. It sounds like this may be a favorite episode of FedEx. The company has announced that it will not renew its FedEx Express contract with Amazon at the end of the month. FedEx Express is FedEx’s air service that moves packages from one airhub to another. It is not surprising that this relationship is ending, as Amazon has been building out its logistics platform to lessen its reliance on other carriers. In a statement, FedEx said dumping Amazon, which represents just 1.3 percent of its business, will allow it to “focus on serving the broader e-commerce market.” The company expects the number of e-commerce packages to double from 50 million today to 100 million by 2026. Amazon will still use FedEx’s last mile delivery services, but that relationship is fading as well.

Walmart has been expanding its grocery delivery business significantly, and the company is ready to roll out a new service in three cities. Starting this fall, in Kansas City, Pittsburgh, and Vero Beach, FL, Walmart will deliver groceries directly to customer’s refrigerators. The service, called Walmart InHome, will use employees at stores that already offer curbside pick-up to deliver groceries to unattended homes. According to Walmart, associates will use smart entry technology and a proprietary, wearable camera to access the customer’s home – allowing customers to control access into their home and giving them the ability to watch the delivery remotely. Employees will undergo rigorous training on how to pick the best produce as well as how to enter a customer’s home with care and respect. Walmart is not the first company to offer this service, but it remains to be seen whether customers will get on board with the service.

Speaking of grocery e-commerce, Stop & Shop is expanding its service as well. The company has recently launched same-day grocery pick-up at 20 additional stores, the first part of a much larger roll-out. The service is powered by Peapod, the e-commerce arm of Stop & Shop parent Ahold Delhaize USA and the originator of grocery delivery. Customers go to Peapod’s website, choose “pick-up” from their preferred store, place their order, and go to the store at the specified time (usually within four hours). Stop & Shop stores that offer the service have designated parking spots for click and collect; customers park there, call a phone number to signal their arrival, and a store associate brings the groceries out to their car. As part of its expansion plans, Stop & Shop will roll out 175 additional locations throughout the year. Same-day online pickup costs $2.95.

The Federal Aviation Administration (FAA) has signed off on approvals for key commercial unmanned aircraft projects and expanded drone testing programs. Recently, the agency has granted waivers and certificates to companies that are looking to expand their drone delivery research projects. One such certificate was issued to Amazon for its Prime Air package delivery service. According to Amazon, the latest version of Prime Air system has thermal, visual, and ultrasonic sensors and can safely deliver packages under five pounds within a 15-mile radius in less than 30 minutes. The FAA also issued a waiver for Colorado-based Hensel Phelps Construction Company to allow a DJI Phantom 4 drone fitted with a safety parachute to fly over people at its job sites. Finally, the FAA announced that 100 more airports and control towers will be using the Low Altitude Authorization and Capability system that makes it easier for pilots of small commercial drones to get authorization to fly in controlled airspace.

The warehouse automation market is continuing to grow as robots become more ingrained in the everyday warehouse culture. Amazon is continuing to invest in robotics, and earlier this week, announced it had developed two new warehouse robot models called Xanthus and Pegasus to improve safety and efficiency for its sprawling buildings and enormous workforce. According to Amazon, the Xanthus model is the company’s first major redesign of its core drive-based robot, creating a common, sled-based foundation that serves as a mobile, modular base that can carry a wide range of potential attachments. The unit is similar to the Kiva unit it bought in 2012 but has a much thinner profile, with one-third the number of parts, one-half the cost, easier maintenance, and the same safety features. The Pegasus model, which the company said also goes beyond the Kiva unit, is able to sort and route individual packages instead of moving tall storage pods and can calculate the most efficient route for each drive unit to avoid traffic jams on the sortation floor.

Blockchain for supply chain is continuing to gain attention and traction. While many companies have been very vocal in their blockchain plans, Target has been slipping under the radar. However, the company has publicized its entry into the blockchain space which it has been working on since mid-2018. The solution is named ConsenSource and will support the Hyperledger Grid project, which is a Linux Foundation ledger-based solution for all types of cross-industry supply chain scenarios. ConsenSource has been mostly focusing in on certification of suppliers for the company’s paper manufacturing. The company is also advertising for a blockchain engineer and systems developer on its careers page, showing the level of commitment is has for the solution.

The trade war between the US and China has certainly been escalating, with new tariffs appearing on a weekly basis. And while this has been beneficial for some countries as they look to do more business with the US, it is also making some companies look at alternatives to getting their goods into the US. Specifically, some Chinese exporters are going to extreme lengths to avoid the hit from Donald Trump’s tariffs. Vietnam said earlier this week that it found dozens of fake product-origin certificates and illegal transfers by companies trying to sidestep US tariffs on everything from agriculture to textiles and steel. Vietnam has said that it will increase penalties on trade-related fraud as a result. Fraudulent cases discovered by Vietnam’s government include packaging on Chinese goods being changed to say “Made in Vietnam” before certificates of origin are processed.

That’s all for this week. Enjoy the weekend and the song of the week, So Far Away by Dire Straits.

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