This Week in Logistics News (July 13 – 19)

logistics newsSometimes things go as planned and sometimes they don’t. However, even when they don’t go as planned, this create a huge business opportunity. In an effort to promote sustainability, many towns and cities, mine included, have begun to crack down on plastic bags in stores. And when I say crack down, I mean they banned them. Other stores, such as Whole Foods and Trader Joe’s offer incentives to customers that bring reusable bags. Then there is the story of East West Market in Vancouver, British Columbia. This store, in an effort to encourage customers to bring reusable bags to the store went so far as to try to publicly shame customers that used the stores plastic bags. And how did they do this? The company printed what it assumed would be embarrassing slogans on its plastic bags for consumers, including “Wart Ointment Wholesale,” “Into the Weird Adult Video Emporium” and “The Colon Care Co-Op.” The problem? Customers loved the plastic bags, and even those that brought their own bags were willing to pay the 5 cents for the single use bags instead. Lesson learned for East West Market as it is now printing the same slogans on reusable canvas bags to help reduce waste. And now on to this week’s logistics news.

McDonald’s, the largest fast food chain and fourth largest employer in the world, made big news this week when it comes to home delivery. The company announced plans to end its exclusive partnership with Uber Eats and add a second crowd-sourced delivery platform. McDonald’s, which launched nationwide delivery in 2017 with Uber Eats, will begin testing DoorDash delivery at 200 Houston-area restaurants later this month. The intent here is to improve nationwide service; Uber Eats will continue to be a delivery partner but will simply not be the only option. McDonald’s will be a part of DashPass, a DoorDash subscription service where members get delivery fees waived on orders of $12 or more.

Kohl’s has been an innovator later, especially when you look at the company’s partnership with Amazon for in-store returns. Well, the company is once again trying to jump ahead of the competition. But this time, it is not from a technology standpoint. Instead, the retailer is jumping ahead of its competitors in the race for the holiday hiring season. Yes, we just celebrated Independence Day. And yes, the back to school shopping season, let alone the holiday shopping season, is still a ways away. But Kohl’s has said it is beginning to staff up for the second half of the year at its stores and distribution centers, at a time when the U.S. labor market is tight and finding skilled workers is increasingly more difficult. Last year, Kohl’s started hiring for the holidays even earlier: at the end of June. The company is hiring for an “early wave of seasonal positions” at 500 stores, about double the number in last year’s early-hiring program.

The capacity crunch has been front and center for the transportation industry, and things are not looking much better in the coming months. The capacity crunch is also hitting the warehousing industry, although that story is often lost. Luckily, it looks like the warehousing capacity crunch is finally easing. The growth in e-commerce fulfillment has led to an increase in warehouse shortfalls. However, increased investment in new industrial real estate helped lead to a slight increase in US warehousing availability in Q2 2019, according to a new CBRE report sent to Supply Chain Dive. It will be interesting to see how these investments impact the on-demand warehouse market.

Now that hurricane season is upon us, it is not surprising to see news about the National Guard. However, this story has nothing to do with the hurricane season. In this case, the National Guard is heading to the Mexico border to help speed trucks across the border. Every day, more than 40,000 commercial trucks cross over the Pharr International Bridge into Texas from the Mexican city of Reynosa. These trucks often have to idle for hours on the three-mile-long bridge waiting for US customs officials to scan and approve their loads. In late June, Texas Governor Greg Abbott announced the deployment of National Guard troops from his state to help alleviate the traffic delays. According to Abbott, “they will be working in assisting border patrol at ports of entry to facilitate, especially, commercial traffic coming in as well, as any other traffic that may be coming across the border.”

Ikea has been on my radar quite a bit lately as it looks to reduce its carbon footprint, namely by using electric vehicles for deliveries. The company is making major news again. The company is shutting down its only furniture factory in the US and moving operations to Europe in a cost-savings effort. In justifying its decision, Ikea pointed to raw material prices, which it said are higher in the US than Europe. Ikea operates plants in European countries including Poland, Russia and Sweden. One can only wonder how much the ongoing trade conflict plays a part in this, as Ikea is not the first company shift production overseas.

The Federal Motor Carrier Safety Administration (FMCSA) has denied a request from the Small Business in Transportation Coalition that sought to exempt trucking companies with 50 or fewer employees from the electronic logging device mandate. In its request, SBTC stated the ELD rule “is merely a tool to determine compliance with an existing rule that regulates over-the-road drivers’ driving and on-duty time.” SBTC contends the rule isn’t a safety regulation. In its decision to deny the request, FMCSA says SBTC’s application did not meet regulatory standards for an exemption, because it failed to provide “the name of the individual or motor carrier that would be responsible for the use or operation of CMVs” under the exemption and did not provide an estimate for the total number of drivers and commercial vehicles that would operate under the exemption.

Starbucks has continued to push its expansion to China. However, unlike the majority of the coffee chain’s stores, the newest location in Beijing is the company’s first “express café” location which has a focus on mobile ordering and delivery. The express café format will also act as a dispatch center for nearby delivery orders, while all Starbucks Now and Starbucks Delivers orders will be placed in secure “pickup portals” along the wall so that customers and couriers can more easily find and pick up their orders.

That’s all for this week. Enjoy the weekend and the song of the week, which my kids are completely obsessed with (and I somehow hear being sung in the house all day long), Old Town Road by Lil Nas X, featuring Billy Ray Cyrus.

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