This Week in Logistics News (February 8 – 14)

logistics newsSustainability continues to be a hot topic within supply chain management. One area that has proven to be an uphill battle is the reduction of packaging waste for home deliveries. I actually wrote about this topic as one of my very first Logistics Viewpoints articles nearly six years ago. To this day, when I receive a package at my house, I am surprised at how much air and packaging materials are delivered. This week my wife mentioned to me that you can actually sign up for something called “frustration free packaging” (FFP) from Amazon. Since I had never heard of it, I had to do a little research. It turns out that Amazon does indeed have that option which means your order will arrive in easy-to-open, recyclable packaging. Currently, Amazon has about 750,000 products available with FFP. It turns out that there are a few other steps you can take to help reduce Amazon waste as well. I read an interesting article from Shannon Kenny, founder of Mama Eco. According to her blog, the two other big things you can do are group your orders together and choose no-rush shipping. Both of these options will reduce the amount of waste that is used in fulfilling your order. Ultimately, you can look at these three suggestions as the magic number. And now on to this week’s logistics news.

JD Logistics, the e-commerce marketplace arm of Chinese retail giant JD.com, is continuing operations in the quarantined city of Wuhan in an effort to provide last mile service at the epicenter of the coronavirus outbreak. This is partially due to the need to deliver relief materials to the hardest hit areas. JD Logistics will support the operations by issuing hygiene supplies to delivery workers, disinfecting its trucks and warehouses, and offering favorable payment and insurance terms for merchants shipping inventory on its platform that are located within the affected Hubei Province. JD Logistics has also allocated emergency materials for epidemic prevention such as masks, thermometers, protective glasses and clothing, and disinfectant to protect its employees “fighting on the frontlines.” The company has also deployed emergency plans to cleanse its physical fleets and facilities, and is now undergoing regular disinfection of its warehouses, delivery stations, and vehicles.

Drones have become a fascinating topic to write and talk about. Last week I wrote that TerraDrone Europe was teaming up with Unilever to make drone deliveries of Ben & Jerry’s ice cream in New York City. And while last mile consumer product deliveries are always fun, we have written about the most important and most practical use of drone deliveries here many times: medical supplies. In an effort to support healthcare efforts in to combat coronavirus, Terra Drone Group company Antwork is using drones to transport critical medical supplies and patient samples in China. Last week, a medical delivery drone flew from the People’s Hospital of Xinchang County to the disease control center there. Using drones reduces contact between patient samples and medical transport personnel and speeds delivery times. Drones best ground delivery speeds by more than 50 percent and also free ground transport assets and personnel at a time when the nation’s medical resources are severely strained. Terra Drone also pointed out that drone delivery also prevents “secondary pollution” of medical materials.

In our final coronavirus-related piece of news, FedEx and its pilots union reached an agreement allowing crew members to opt out of flying into China. FedEx says it’s following government regulations and guidelines regarding the coronavirus, which “may affect shipments inbound and outbound to/from Wuhan and other impacted cities within Hubei Province, as well as shipments moving within those cities.” Flights to and from China are still operating on a regular basis “as local conditions and restrictions allow.” The FedEx Master Executive Council “unanimously supported” the agreement with management.

The gig economy is big business, and Amazon’s Flex marketplace is driving a lot of interest. Amazon Flex uses everyday drivers to deliver packages from their own vehicles and operates in about 50 cities. The service is app-driven, with drivers logging in to the app in the morning to see if there are available shifts in their area for that day. Drivers will repeatedly tap a refresh button until delivery shifts, which are referred to as blocks, appear on the screen. The competition to claim these blocks has become big business, as many drivers have noticed that if they delay even two seconds, a block will disappear from the app. As a result, many Amazon Flex drivers are deploying bots — combinations of hardware and software meant to mimic the action of tapping on blocks — to increase their odds of winning a coveted shift. It turns out that using a bot is technically cheating and against Amazon’s policies, but the bots have become an increasingly common tool for Flex drivers as they look to pick up shifts. With the gig economy continuing to grow, it is not surprising to see people gaming the system; the question is how will Amazon respond?

In its latest effort to cut costs and reduce waste, Tyson Foods is implementing more automation and artificial intelligence tools in its plants. Specifically, the company is looking to expand the use of computer vision to track how much chicken moves through its plants. According to Tyson, by the end of the year, it will use cameras, machine-learning algorithms, and edge computing (where data is processed and analyzed in near-real time without being sent to a data center) to record hundreds of thousands of pounds of packaged chicken every week. Previously, the tracking of chicken was a manual process done by vision and hand signals. These advances will help to reduce the over and under processing of chicken. So far, Tyson has installed the automation systems at three of its facilities and has plans to roll it out at all seven of its “fresh tray pack” chicken plants, which represent about 14 percent of its US-based chicken processing facilities.

President Trump has unveiled his ten-year, $1 trillion infrastructure outline. Infrastructure has been a big piece of Trump’s platform, and this investment has been eagerly awaited. Unlike an earlier proposal, this one would draw completely on federal funding. The heart of the $1 trillion infrastructure package would be an $810-billion, 10-year surface transportation reauthorization. According to the figures, the largest portion of the bill would be highways, at $602 billion, followed by transit at $155 billion. According to Nicole Nason, head of the Federal Highway Administration, “a 10-year proposal gives greater optionality for states for planning their projects.”

Direct to consumer business is booming for many CPG companies, and as a result, more companies are jumping on the bandwagon. The big question is how do these companies make a direct to consumer model work? Kellogg’s is teaming up with crowd-sourced delivery business Deliveroo to offer Kellogg’s Kitchen Creations, which is a menu-based delivery service, to consumers. Kellogg’s currently offers 27 sweet and savory dishes, all made with Kellogg’s ingredients, to consumers, including Coco Pops Bubble Crepes, Bran Flakes Falafel Wrap and Kellogg’s Crunchy Nut Peanut Butter Shake. The partnership uses Karakuri, a small London-based startup that combines robotics, automation, and machine learning. The DK-One model can currently use up to 48 ingredients to create individualized and personalized meals or food items, producing up to 360 meals each hour, or one every 10 seconds.

And finally, the European Parliament approved a free-trade agreement with Vietnam after winning concessions from Hanoi that may show the way for ratification of a bigger commercial deal between Europe and South America. The European Union assembly endorsed an accord that will eliminate almost all current tariffs on goods traded with Vietnam. The two-way commerce, ranging from cars and pharmaceuticals to footwear and rice, was worth almost $55 billion in 2018. Vietnam will eliminate 99% of its import duties over 10 years and the EU will do the same over seven years under the deal, which is due to take effect around July once EU governments and Hanoi go through the formality of giving the final green light.

ARC’s Steve Banker will moderate a webinar on “A Data-Driven Solution to Dwell Time” on February 19th at 1 pm CT. Steve will be joined by Marjorie DePuy, Senior Director, Supply Chain and Sustainability at FMI; Keith Olscamp, Director, Industry Affairs at the Consumer Brand Association; and Priya Rajagopalan, Chief Product Officer at FourKites to talk about a very successful pilot program that can serve as a template for how shippers and carriers can gain real benefits. Register here for the webinar.

That’s all for this week. Enjoy the weekend and the song of the week, De La Soul’s the Magic Number.

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