This Week in Logistics News (June 15 – 21)

logistics newsI saw an article earlier this week that detailed how Amazon has gone about testing its delivery robots. The robot revolution is gaining a lot of traction and lots of companies are looking at how they can use robots to make last mile deliveries (see Dominos Pizza article below). Many companies have done initial testing in dense, urban locations to see how their robots handle the changing nature of the physical environment. But not Amazon. Instead, the company cloned a 2-square-kilometer zone of Snohomish County to run tests. But this isn’t a physical version built in a movie set-like environment. Instead, it is a digital copy created with scans of the area collected by lasers, cameras, and aircraft. The digital copy is accurate down to the position of weeds sprouting up through sidewalks. This digital version allows Amazon to run millions of delivery simulations in all weather conditions imaginable as well as alter different scenarios the bot may encounter. Amazon has been actively testing six robots in the physical world as well in an effort to figure out just how it will reach its goal of next day delivery to all Prime customers. The digital neighborhood is certainly an interesting take on research and development. And now on to this week’s logistics news.

Amazon continues to increase its focus on building out its logistics network to get away from its reliance on FedEx and UPS to move goods from warehouse to warehouse and on to the end consumer. Earlier this week the company announced plans to lease an additional 15 Boeing cargo planes from GE Capital Aviation Services. This move is just the latest in Amazon’s effort to speed up its Prime delivery service from two days to one day nationwide. Amazon currently has 42 planes in the air and plans to increase that number to 70 by 2021. This announcement comes on the heels of FedEx’s decision to not renew its Express Air contract with Amazon just last week. It will be interesting to see how Amazon continues to expand its logistics network and what that will mean for its rivals and current partners.

Walmart is continuing with its ongoing efforts to keep up with Amazon. The latest move is to offer some of its customers unlimited grocery deliveries for a $98 annual fee. Walmart is testing the service in a select number of cities, including Houston, Miami, Salt Lake City, and Tampa. While Walmart usually charges a delivery fee of $7.95 to $9.95 per order, the new service, dubbed Delivery Unlimited, is geared towards those customers looking to have groceries delivered on a regular basis; the $19.95 monthly fee is significantly cheaper than even three deliveries at the standard rate. The pricing is in line with other grocery delivery programs such as Shipt and Instacart. While the service is a bit cheaper than Amazon Prime’s price tag of $119 per year, Delivery Unlimited is limited to grocery orders only.

Walmart is also betting big on drones in its efforts to widen its e-commerce reach. According to the Financial Times, for the second year running, Walmart is on pace to file more drone patents than Amazon. In the last year alone, Walmart has filed 97 new drone patents with the World Intellectual Property Organization. Walmart sees its large network of stores across the country as a key differentiator in the drone delivery space. This is due to the fact that drones generally have a short range to make deliveries. Given that nearly 90 percent of the US population lives within 15 minutes of a Walmart store, the stores are the perfect launch pads for deliveries. However, this does put added pressure on individual stores to carry more inventory and a greater number of SKUs, which is something the retail world has recently been shying away from.

Volvo’s electric, fully autonomous truck Vera is going to work in Sweden. However, at first glance, this is certainly not what one expects from an autonomous truck. Unlike other trucks on the market, Vera is low to the ground and resembles a sports car. In fact, it is so low to the ground that it doesn’t even have a spot for a driver to sit. Instead, the truck is designed for very specific situations, such as its first job: serving the Swedish port in Gothenburg. The trucks will move goods packed in cargo trailers from a logistics center to the actual port terminal, where it’ll be loaded onto boats for transport. The trucks will operate autonomously but be monitored by a central operator working out of a control tower, and they’ll be operating at a top speed of only around 24 mph.

A few months ago, the US announced that it would terminate the preferential trade status granted to India and Turkey. According to the US Trade Representative’s Office, this was because they no longer comply with the statutory eligibility criteria.” Earlier this week, India responded by imposing higher tariffs on 28 items imported from the US. The increased duties apply to products including almonds, apples and walnuts; the list initially included 29 goods but artemia, a kind of shrimp, has been removed. New Delhi said the US withdrawal from the Generalized System of Preference (GSP) was “unfortunate” and India would always uphold its national interest in such matters. India is the number two market for California almonds and Washington apples.

Starting this Sunday, the USPS will implement a pricing change that subjects more parcels to rates pegged to their dimensions instead of their actual weight. Under the new policy, the USPS will price parcels which measure more than 1 cubic feet (1,728 cubic inches in multiplied length, width, and girth) and which move less than 600 miles by the higher of either its “dimensional” or actual weight. Currently, all parcels moving less than 600 miles are exempt from dimensional pricing. Additionally, each parcel measuring more than 1 cubic foot and moving more than 601 miles will be priced using a new “divisor” that calculates dimensional pricing. The impact of the new pricing structure will not be known for months, or just in time for the holiday rush.

Dominos Pizza is continuing to push the envelope in its technology endeavors. The company has already rolled out services that include self-driving cars delivering pizzas, mobile delivery hotspots, ordering pizzas through Snapchat’s shoppable AR, drone deliveries in Australia, and a pothole filling solution based on mobile responses. Now, the company is partnering with Nuro, a robotics delivery start-up, to test delivery via small, self-driving robots in Houston, TX.  Customers will order a pizza as they regularly would, and if they’re within an area that Nuro can deliver to, they’ll get the option for a robot delivery. Nuro and Domino’s plan to eventually add more robots to the location they choose in Houston, and after that, more stores in the area.

And finally, FedEx is partnering with Dollar General to offer pick-up and drop-off services at more than 1,500 stores later this summer. The deal will boost FedEx’s network of pickup and drop-off locations to more than 62,000. According to FedEx, the addition of the Dollar General stores will put 90 percent of Americans within five miles of a location where a shopper can access FedEx services. The two companies plan to expand the service to 8,000 stores by the end of 2020.

That’s all for this week. Enjoy the weekend and the song of the week, Pleasant Valley Sunday by the Monkees.

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