This Week in Logistics News (September 28 – October 4)

logistics newsWe have written extensively about the future of self-driving vehicles on this platform. And while we usually stick to autonomous trucks and mobile robots, we occasionally look at the current and future state of autonomous cars. As Elon Musk continues to build his empire, with a nod to the autonomous trucking world, one has to wonder how the public feels about autonomous vehicles. Over the last few weeks, a number of videos have surfaced of Tesla owners using the Smart Summon feature to various degrees of success. According to Tesla, if you’re in a private parking lot or driveway and no more than 200 feet away from your car, you can pull out your phone, navigate through the Tesla app, and press COME TO ME. The car is then supposed to come to you. Unfortunately, for the many Tesla users that have tried the Smart Summon feature, the results have been less than ideal. Videos abound online that show near misses with other cars as well as just horrible parking jobs. But, this is simply a speed bump to overcome, right? And now on to this week’s logistics news.

As more companies look toward the future of drones, UPS has achieved a big win. The company announced this week that it won the US government’s first full approval to operate a drone airline. The approval to operate a nationwide fleet of drones allows UPS to expand deliveries on hospital campuses. UPS’ drone subsidiary was awarded an airline certificate last week by the Federal Aviation Administration (FAA) after operating more than 1,000 test flights at WakeMed’s hospital campus in Raleigh, NC. The designation removes limits on the size of the company’s potential drone operation. Flight Forward, UPS’ drone subsidiary, can fly an unlimited number of drones, including night flights (which the company plans to do after installing the necessary colored warning lights on each machine). Even with this exciting news around hospitals and universities, UPS added that residential deliveries are still years away.

As the race for drone deliveries heats up, the USPS does not want to be left behind. As the Postal Service looks for enhancements to its mail delivery fleet, it wants feedback from drone operators that could provide drone capability to the agency. In a request for information filed on September 23, USPS said it isn’t planning on awarding a contract but is merely seeking market information as it considers future requirements. According to the USPS, drone operations “will support various missions, including ‘Long Driveway Delivery,’ in which a drone launches from vehicle, makes a delivery, and returns to the vehicle while the delivery truck continues on its route.” USPS is also considering a “Ride-Sharing Model” where customers can access the agency’s drone fleet for business-to-customer delivery.

Child labor continues to be a hot topic within the supply chain. Earlier this week, the Trump Administration announced it is stopping imports of clothing, gold, diamonds, and other items believed to have been produced with forced labor by companies based in Brazil, China, and Malaysia, as well as some gold mined in eastern Congo and diamonds from a region in Zimbabwe. The companies sanctioned are Bonechar Carvão Ativado Do Brasil Ltda; Hetian Taida Apparel Co., Ltd. in Xinjiang, China and WRP Asia Pacific Sdn. Bhd. in Malaysia.

Subscription retail models have taken off over the years, but one of the original companies is facing serious backlash after supply chain disruptions have halted service. Rent the Runway was founded nearly 10 years ago by Harvard Business School classmates that recognized a need for designer clothes rentals. Customers can rent one of the firm’s designer clothing for a 4- or 8-day period for as low as 10 percent of the retail price. Over the past few weeks, unfortunately, hundreds of customers have expressed their dissatisfaction over late or never-arrived packages. In an email to customers sent early Friday morning, Rent the Runway warned customers that “it can’t guarantee that orders scheduled to be received this weekend will arrive either. All event orders scheduled to be received the first week of October are canceled and the company is not accepting any new event rental orders or new subscribers until October 15.” The company has blamed the installation of a new warehouse software system for the issues.

According to the real estate services and investment firm CBRE Group Inc., strong growth of online grocery shopping is spurring demand for cold-storage warehousing space in the US. CBRE has forecast that the US industrial cold storage industry will need to add up to 100 million square feet of additional capacity to keep pace with the anticipated growth of online grocery sales over the next three years. One of the biggest challenges according to CBRE is the fact that cold storage construction costs on average two to three times as much as building a traditional, “dry” warehouse, due in part to the need for insulated metal paneling, mechanical equipment, refrigeration equipment, rooftop equipment, premium concrete slab and subfloor heating, as well as designs for multiple temperature zones with their own loading docks. Additionally, as I pointed out in an article about the cold chain last year, one of the major challenges facing companies is the fact that it is difficult to achieve consistent utilization in warehouses due to the seasonality of food. In the warehouse, space is money, and operations need to be sustainable.

Load postings jumped 29 percent and load-to-truck ratios rose for all three equipment types during the week ending Sept. 29, said DAT Solutions, which operates the industry’s largest electronic marketplace for spot truckload freight. The spot market recovered the 25 percent loss in volume during the previous week when Tropical Storm Imelda disrupted supply chains in the Houston area and other regions across the Southeast and Midwest. The number of truck posts increased 19 percent, reversing a 17 percent decline the previous week. National average spot van, refrigerated, and flatbed rates, on the other hand, were largely unmoved week over week and affected mainly by a higher fuel surcharge.

That’s all for this week. Enjoy the weekend and the song of the week, one of my all-time favorite hair-band tunes, Signs by Tesla.

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