This Week in Logistics News (November 30 – December 6)

logistics newsIt was such a surprising victory, that my wife and I were actually giddy. Now, neither one of us are what I would call “dog people.” However, we put on the replay of the National Dog Show on Thanksgiving night mostly to crack jokes about how much the movie Best in Show rings true. Additionally, we only saw the very end of the replay, meaning we just saw the individual category winners compete for the title of “Best in Show.” However, it was more than enough. The announcers made it clear who the favorite was, but it certainly wasn’t our favorite of the pooches. Ours, of course, was the floppy cheeked, slow moving English bulldog named Thor. The English bulldog, which is adorable in its own distinct way, had never won the National Dog Show before. And we could not have been happier. The smile on Thor’s face as they announced the winner was the icing on the cake for us. And now on to this week’s logistics news.

As the holiday season gets into full swing, Amazon is gearing up for the influx of orders in a number of ways. Ahead of Black Friday and Cyber Monday, the company launched a new service, named Amazon Storage and Replenishment, a new inventory storage service to help meet holiday demand and its next-day shipping pledge without overcrowding its warehouses or running out of products. Essentially, the service allows merchants to stage inventory close to Amazon’s delivery operation to enable quick replenishment of the products. The program is being trialed in Ontario, CA, which is about 20 miles from its closest facility. The new program helps to balance the delicate needs of Amazon stocking adequate products and merchants not spending too much for warehouse space that may not be needed.

Amazon has also expanded the number of private branded trailers that are moving goods for the holiday season. Amazon has said that its fleet of tractor-trailers now numbers 20,000, or double the amount the company had around this time last year. The main driver for the increase in trailers is the decision to expand its one-day delivery window for Prime members. With Cyber Monday hitting a record $9.4 billion, it is not surprising to see Amazon pushing for more control over the flow of goods. This is especially true considering the company’s decision to invest more than $1 billion in its one-day delivery initiative.

Earlier this week, President Trump said he will slap tariffs on steel and aluminum imports from Argentina and Brazil, accusing those countries of hurting US farmers through currency manipulation. In March of 2018, President Trump had exempted both countries from the tariffs. However, Brazil has increasingly become a major supplier of soybeans to China after Beijing cut back on US imports due to the ongoing trade war. In a tweet before departing for a NATO conference in London, Trump said the following:

“Brazil and Argentina have been presiding over a massive devaluation of their currencies … which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries.”

Drones, drones, drones. Been there, done that. But, there is new news from the Department of Justice (DOJ) in regard to its drone policy. The new policy maintains a lot of the same language and regulations, with a few key additions addressing concerns about cybersecurity and privacy. The new version of the policy “requires components to evaluate UAS acquisitions for cybersecurity risks, guarding against potential threats to the supply chain and DOJ’s networks.” The new policy also indicates that the DOJ will be coordinating with the FAA around access to airspace including working on a plan for air traffic support. Additionally, the policy specifically mentions information collected from cameras and sensors, and says it will weigh “the potential intrusiveness and impact on privacy and civil liberties“ against the government’s interests. This may or may not be big news for commercial last-mile delivery via drones. But it is always good to see the DOJ re-evaluating usage.

Cincinnati-based grocery chain Kroger is trying to make its name in the food delivery space. The company wants customers to think of Kroger rather than competing food delivery companies by partnering with a food delivery company to provide meals without fees. The new service has been dubbed Kroger Delivery Kitchen Powered by ClusterTruck and will be launching initially in Carmel, IN, where both Kroger and ClusterTruck are jointly opening a fourth kitchen, as well as Indianapolis and Columbus, OH. Customers in Carmel, Indianapolis, and Columbus delivery zones can go to to place their orders online or download the ClusterTruck app. According to Yael Cosset, Kroger’s CIO, “Kroger is leveraging ClusterTruck’s advanced technology to ensure our customers don’t have to sacrifice quality and value for convenience when it comes to meal delivery. Kroger Delivery Kitchen Powered by ClusterTruck will allow our customers to access restaurant-quality fresh and delicious meals like never before and without having to pay excessive service or delivery fees.”

Large delivery trucks and vans are playing a significant role in traffic congestion and pollution. New York City is putting a new program in place to help alleviate some of these issues. The new program aims to replace some of these delivery vehicles with electric cargo bikes. For a city that has long been the hub for bike messengers, this is a big move. According to details of the new program, as many as 100 pedal-assisted cargo bikes operated by Amazon, UPS, and DHL will be allowed to park in hundreds of existing commercial loading areas that are typically reserved for trucks and vans. Unlike those vehicles, the bikes will not have to pay meters. Smaller cargo bikes will also be allowed to park on wider sidewalks, and all the bikes can travel along the city’s growing network of more than 1,400 miles of bike lanes.

And finally, as the holiday season is now upon us, we can officially blame the recession for the increased cost of Christmas trees. According to the data team at Square, the price of Christmas trees rose 5 percent in 2018, or about $3, when compared with 2017 prices. The industry is poised to see a similar increase this year. The reason? The recession of 2007 – 2009. In the late 90’s (which somehow feels so long ago, yet so “yesterday”), there was a surplus of trees and prices fell. However, during the recession, growers planted less trees. Given the natural lifecycle of Christmas trees, those trees planted during the recession are now ready for homes across the world. But a limited supply means higher prices. On average, most tree farms are selling their goods for about $10 above last year’s prices.

That’s all for this week. Enjoy the weekend, and the song of the week, Hey Bulldog by the Beatles.


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